>> from the heart of where innovation, power, money

collide, from silicon valley and beyond, this is bloomberg technology with emily chang. caroline: i'm caroline hyde in new york for emily chang and this is bloomberg technology. a twitter attack, we will bring you the latest on the battle ahead. the 42 billion-dollar twitter deal. an evaluation for europe's most high-profile. it's being valued at 6.7 billion dollars down from $45.6 billion. just one year ago we spoke to an investor in the company. primetime shopping event. amazon kicking off on tuesdays extrema gads a dash extravaganza. how could it help the sales gain. we will get into all of that. first, let's get a look at the markets and make a cap tech, they were down on this monday, snapping a hot streak. ed ludlow will be switching up

to all important earnings, but some risk today. >> risk off is the buzz frayed, nasdaq 100 biggest drop in around two weeks. off to the back of five straight days with the gains in the nasdaq 100 since november. you look at the areas of paying semiconductors and stocks down a hundred percent. at a time when yields are pulling back again below 3%, bitcoin caught up in the risk sentiment. there is a pattern emerging. come into the bloomberg terminal and we look at this chart, we've seen in recent weeks, the nasdaq 100 make a weekly gain and then pull back, the rally kind of losing momentum, that we have a few down weeks, then we have an up week, there's no real staying power. i thing you are right, caroline, we are waiting for earnings season. we get a real lens into the world, how worried are we about inflation and recession fears let alone the impact of the fed and the great.

as always, really big corporate stories pushing the agenda. if you come with me back to the studio a look at the stocks, it was a mega cap, apples pulling down the index from a points mover perspective, down 6.5%, bloomberg scoop that the company plans to cut 5% of its workforce, you and i will talk about that later in the show, twitter down 11% after mosque files to walk away from that merger agreement -- merger agreement. the law firm representing twitter says that the company has done nothing wrong, i know you will get into that, and interesting look at tesla, monday session down 6.5% at the close, investors looking at what this all means and the bigger scheme of things, what is elon musk going to do. what is it mean for the tesla stake. we have to set it down still, more questions and answers. caroline: i'm pleased to say we have more answers coming from you on our questions about your news.

meanwhile, let's get back to the scene being set great disruptive legal battle over the future of twitter. the social media that form shares falling after elon musk walked away from a 44 billion-dollar deal to buy the company. muska alleges that they sent new data. twitter plans to send musk to close transaction. just ahead of our conversation, we understand from a lawyer for twitter that is to be said, twitter's lawyers saying musk's termination is invalid in wrongful and says that twitter has reached a no obligation. where are you out with this? >> we are getting to the fun part of the deal where all the lawyers are just going to start sending each other letters back and forth and we will have to parse through all this legally. you are right, now it's twitter's turn. on friday we were talking, -- you and i were live on air when we were reading the letter from elon musk's lawyers basically saying, twitter, you violated this agreement, now twitter has

filed its response and basically said the opposite, we have upheld our version of the agreement, our part of the agreement, and it's you who has been misleading or violated rights, so we are clearly headed to a fork in both sides will get to argue their case. but for right now, the lawyers are starting to put their respective arguments out into the universe. caroline: what are some of the theories being held for how it could turn out, who could win out, is not just going to be a $1 billion termination. >> i would be shocked if that's the ultimate result, i would imagine that we will end up somewhere in the middle. i think there's two kind of dramatic outcomes that could come from the legal battle, the one is what you said, the rules in favor of elon musk, and if he has a termination walks away. the other is if they rule in favor of twitter and force elon musk to spend $44 billion to force them to buy a company doesn't want to buy.

i think they could settle in the middle, that's to me the most likely scenario. what in that case, there's infinite numbers of outcomes here, so we don't know exactly where they will end up. caroline: nothing like infinite amount of outcomes to pass. thank you for all your expertise in all your expertise today as we continue to follow this story. let's get more on -- who the company. as we say in an infinite amount of outcomes, but from a fundamental basis, without the $44 billion offer, was it worth it? mark: probably not too far office -- if the deal was decided tomorrow. there are some markers in the market, you could look at the multiples of interest in snap chat trade. maybe there's a little bit of downside to that high 20's, $30 range, something like that. it is not much more dramatic than that and the difference here is by the way, we have kind

of forgotten in all of the noise, twitter is a good asset. it generated 5 billion in advertising dollars last year. advertisers are cognizant of and willing to tolerate the bot issue and fei company generated positive cash flow for several years prior to covid. so it is a business that has had a reasonable scale, decent growth, it has underperformed major piers like google and facebook but those were on fair comparisons. it's a decent asset, recently, it has been somewhat impaired by the uncertainty over this deal. going forward, it is probably impaired by the recession that is taking outgrowth from almost all internet assets. caroline: does it become impaired by advertisers walking away because of bots, as it seems that currently elon musk is trying to argue? mark: i don't know. it's possible. i've run surveys on twitter for

10 years. advertisers surveys on twitter for almost 10 years. it has never come up as an issue. i've never had a channel check or discussion with an advertiser that said i can buy ads on facebook, but i cannot do it on twitter because of this issue. i have never heard that. that there are bots, that there are farms in social media, i think that is well understood. it is part of the peril of these industries and of these companies. twitter, pinterest, google, a spoke have -- facebook have had to fought -- fight against these forms. people run a bots for political reasons and commercial reasons but it has always been a factor. i do not think it has been an issue for advertisers. i think 5 billion in ad revenue that twitter got last year, they earned it. and i think advertisers were not put off by the fact that there were lots on the platform. caroline: has there been any

upside to be whole fiasco for twitter? mark: i am struggling, caroline. i think there has been no upside, so all you have done is created a lot of dysfunction within the company. they have lost some of their top employees. there has probably been demoralization of employees because elon musk has come out and said that there are too many people working there. how would you feel of some but he was going to buy your company, started off by saying there were too many employees? i think what has happened is very unfortunate. and i thought elon musk had a lot of interesting ideas of what he was going to prove. and maybe this will all come out and maybe we will get some sort of resolution at a reduced deal size. my guess is the worse it case scenario is going to come through. there will be a breakup fee and then twitter is going to have to rebuild a little bit. that is probably going to be a year from now and it is very unfortunate, i think, what has transpired for investors. caroline: just put the sort of

-- well, mind math for us out there. if indeed elon musk is forced to buy it, how damaging is that? mark: it will depend. these are really hard questions to answer, uncharted waters. i cannot imagine it would be good for twitter to be owned by somebody who has no interest in owning the assets, although i'm sure that has happened in the media landscape so, you know, what he wants to do is take it private. he was very clear from the beginning, his intentions were not commercial. he was idealistic if you will. i think a logical is the wrong word, but he envisioned reasons for buying the company. this was an asset he cared deeply about and he wanted to see it improved. as he thought he could have improved the asset, i thought he had interesting ideas. he was going to get into this more ask, it is difficult, these decisions as to whether anything should be moderated. it requires a lot of adults to solve those problems. i think twitter had some of those people, by the way, in the

past. but anyway i thought he was going to bring a fresh perspective to a company that may have helped the assets, something well-known and used by so many people around the world. it is unfortunate how this has all of where it is today. i don't think anybody looks good coming out of this. caroline: well said. and indeed, we think you come out looking good. your expertise at evercore, we thank you mark mahaney. trying to find the fundamentals in what is in general a nonfundamental story at the moment. coming up, buy now pay later. seeing its valuation slashed in the dramatic reversal with andrea walne. this is bloomberg. ♪

caroline: a bit of a dramatic reversal for one of europe's most high-profile startups. klarna bank. valuations being slashed in its latest funding round, down from june 21. the swedish giant has been burning through hundreds of millions of dollars as a startup. and joining us to discuss how we continue to see talent in this market, andrea of manhattan partners. it is good to have you on and of course klarna one of the numerous members of your portfolio. i am interested and how painful it is for executives and the people that have invested. andrea: thank you for having me, caroline. i will say we invest in growth late stage companies much like klarna. while they are hitting the peak trajectory of their business, we

believe that extraordinary companies backed by the best investors will deliver these outsized returns. so even though they have seen their valuation compressed, we believe in their long-term prospects very much so and they are deploying a number of strategies to keep the existing and we base an executive base retained caroline: talk to us, you are someone who thinks a lot about liquidity in the secondary market and a lot of that, often these big valuations and moments of exit, which currently the doors are shut to to a certain extent because it is about talent management, ensuring that they are able to take somebody, have a liquidity event. how hard as i become at the moment? andrea: there is always going to be demand, so that is something we measure when we evaluate companies whether on a primary or secondary basis. when it comes to klarna there has been a healthy volume of activity in the business and

investors are really excited about the prospects of where they are growing, because as of right now, they are the market leader across all geographies in the buy now pay later space and growing much further than just that nature of its business. i would say the prospects of the secondary market continue to get rather exciting and have created unique opportunities to buy into the business. dollar cross focus like klarna and others. caroline: what do you want to see from the leadership at klarna and the companies you have been backing. some have seen exits themselves but some will continue to grow in this environment. do you want them to be focused on profitability in this environment? andrea: i say across the board, we are focusing on seeing our companies invest in profitability and increase margins, so they can get above the line and at least be in the single-digit profitability markets. where klarna has sat for 14 years of his business, if not longer.

they are an exceptional example of a company that knows how to increase profitability and enjoy it. for other businesses across our portfolio and others in the venture landscape, we might want to turn down the dial a bit on sales and marketing and really increase the profit margin, which is really a level of taking in those levers. it saying we don't need to spend so much on facebook ads or linked in ads this corner. -- this quarter. we don't need to put this much money into creating a new layer of product roadmap and instead, focus on products that deliver and focus on the customers who are there versus creating new, innovative products just as a way to be unique in the product direction. caroline: how about products that had seen a real winner in terms of acquisition of new customers, suddenly resolute and other european pinups in the fintech world, they had doubled

down on offering crypto for example to bring in new users. with the fallout in valuation there as well, are you likely to see products moved away from? or will they remain committed to them? andrea: i think that what they will stop doing is just delivering on a new products. i think as we look at companies like klarna, they shift away from the core focus that they have and honed in on. it is by now pay later for example, and instead focus on creating value from their existing user base, which is something we are excited about. generally, companies realize where their public comps sit and they want to ensure that they are creating their own market position, away from those public comps. seeing that their growth can continue, while honing in on the products that have always been proven to be successful for these companies. and so, i really love how sebastian, the ceo of klarna

said on twitter that what does not kill you makes you stronger, because it is a business that i think understands exactly where their mindset could be honing in on the products that win. with this new capital involution -- infusion it will keep them growing across the united states, which is something where their public, has had a dominant force, but corn out, as we know is going faster at 300% --klarna is growing so much faster relative to them as a comp, so we have hope there. caroline: how long does this quieting down in the private markets and valuations last for? i'm not saying every business is affected by it. a company ramping up, because the supply chain disaster out there, they are a company that can help. there are areas like instacart in an inflationary environment, how does that persist? andrea: i would say right now, we need to see what the results of the first half of the year look like across all businesses. we are closing the books on q2 and going into q3 and generally, where the reflection of the

market is going to sit is what companies will be ready to go out, go public, going into q3. ideally the ones in september, october and anything before the thanksgiving holiday for the u.s. companies, that is where i would see there might be a shift in sentiment. what is happening is companies like instacart or example are filing a registration statement, they are using broad-based language to describe what kind of statement and company they are going to be as a public company, and to determine whether that is right. these companies are determining where to go out based on where the market will be, but at least they are ready to do so. caroline: andrea, thank you for your time. coming up, an exclusive interview with gina raimondo. stay for it. this is bloomberg. ♪

caroline: u.s. secretary of

commerce, gina raimondo, creates legislation that would produce funding. she spoke exclusively to bloomberg. take a listen. gina: yes, it will happen. it is taking much too long and what is at stake is national security. even beyond the economy, you know, every piece of military equipment requires chips. if you talk to the heads of national defense contractors, as i have done, or senior ranking officials at the department of defense, they are very worried about the delay. but yes, it will get done. at this point in the negotiation, unfortunately, politicians look for leverage. and while it is not right to play politics with national security, that is what i think is happening in the past two weeks, we made huge progress. we were closing out issues, finding compromise. so i think everybody needs to come back today, get back to work, and commit themselves to

getting it done in the next few weeks. >> let me ask what difference it makes whether it gets done today or six month from today. decisions are being made perhaps by companies such as the round breaking in columbus. what decisions may not be reversible down the road? gina: what you say is exactly right. chip companies are making decisions now, literally right now, because they needed to meet demand of their biggest customers. in 2025, 2026, which means they have to start getting new facilities this summer or this fall. earlier today, global foundries, it has made a choice to expand in france. not the united states. that is a loss. you mentioned intel. who is saying perhaps expansion in germany. and the reason is because these companies are hearing from customers that they need confidence that the companies

will be able to hit the supply to them. -- get the supply to them. 2020 5, 2026, 2027, chip demand is expect to be through the roof. so suppliers, whether intel, micron, texas instruments, they need to fulfill for their customers. they want to be in the u.s., but if the choices are not fulfilling the customer demand for doing this in france, germany, singapore, japan, or any private subsidies today, they are going to leave america and to leave america and do that. that is the risk and that is why today, members of congress, get back into d.c., get back, do your job, do not let america lose out. >> should we be accepting an announcement from the president on tariffs, on using the tariffs applied to chinese goods? ahead of the cpi number wednesday, that will be something a lot of will look.

gina: i am not sure. i don't know the precise timing. i can tell you that his team are in active discussions with him, something we are talking about every day. and you know, he is doing his job, which is to say looking at all of the different factors. you will see a decision i think very soon, whether it is before he takes off this week, i am not sure. >> just to pursue the china issue for a moment, the tariffs are one thing. that is one part of a much more complex mosaic here. when you talk about turfs -- tariffs, you said it's not going to have an effect on inflation. but the larger term relation with china, in terms of specific tariffs being taken off or not is it possible it could be bilateral? could china give some to the

united states to try to reformulate our trade relations? gina: certainly that is possible and you raise an excellent point, which is part of the discussion, one of the things the president is thinking about. which is to say we are going to do this, what can they do on their side of the equation? so while i cannot say for sure, certainly that is possible. by the way, it does not happen immediately. it is something we will continue to pursue just in the interest of as you say fairness. if we are lifting tariffs, what are they going to do? caroline: u.s. commerce secretary gina with david westin and guy johnson. coming up, cuts are coming for the ev maker that has grown too big to quickly. we have more on the bloomberg scoop next. this is bloomberg. ♪

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caroline: this is bloomberg technology, i am caroline in for

emily chang. rivian is cutting its workforce by 5%. shares closed down at six and have percent on monday and this was following arab oort from ed ludlow -- following a report from ed ludlow. ed: it is important to note that sources say these are nonmanufacturing roles, these are not the men and women on the assembly line actually building is. they are back office and supportive roles. rivian raised a lot of money before going public, raised money when it went public and they were able to grow so quickly. they have doubled headcount to 14,000 employees in the last year alone and in some of those areas, they grew too fast to too big of a size. they have duplicates and a lot of roles, so with the macro picture such as it is, they are

trimming the fat and bracing for a sort of less solid global economy. caroline: over all, do you think that this is a case of having over hired? in case of reorientation or a case of trying to meet the economy where it is? ed: rivian's interesting because the demand is so great that they cannot keep up with it. they cannot build them fast enough. they have $17 billion on the balance sheet, but i get the sense from insiders, also investors, that $17 billion, and a lot of it is accounted for. they're going to build a second factory in georgia to the tune of 5 billion. there is r&d costs for the next generation of cars. and even though the cfo claims that they are eight experience, a former -- they are experienced, they are looking to preserve cash as best as they can and make it go a long way, so it is all of the after mentioned things. caroline: very briefly of course, you are looking last

week at how rivian was getting snapped up at some value at least in photos. ed: it was the hot ticket. everywhere i looked, they were there and some but he wanted to talk to him. they brought some electric vehicles with them. to sun valley, you had attendees crowding around. but i am told that on thursday night, tim cook, the ceo of apple, borrowed one of the pickup trucks with a gang of people and went into town for dinner, which is interesting, because as we have reported at bloomberg, apple is looking at its own electric vehicle potential he. in the world of tech, it is interesting to see who was looking at who and who is spending time with it. caroline: indeed. what a small world it is over there. ed ludlow, looking in on everyone and what they are up to. we thank you so much great electric vehicle expert there. let's get back to the key story of the day. shares tumbled after elon musk walked away from his $44 billion deal to buy twitter, setting the scene for a disruptive legal battle.

our next guest says that while twitter is well-positioned legally, elon musk is looking for any excuse to get out of the deal. joining us is in lipton and associate dean for faculty research. wonderful to have you with us and your expertise. are there any legal grounds for elon musk to stand on here. anne: i don't know what he might have developed, but based on what has been stated publicly, he has offered a number of grounds to argue that twitter has breached its obligations and therefore, he is entitled to walk away. so far, they just do not seem that substantial, so he claims that twitter misled him about the spam on the platform. that is getting the headlines, but he has not offered much evidence that they misled him and even if it did, even if the spam counts were wrong, that is not a basis for walking away from a merger. he would have to show not only that they were wrong, but that they were dramatically wrong and

having a long-term effect on his finances. in that kind of showing has not been made. there is no evidence that that is the case. yeah, so these grounds just do not seem substantial. caroline: talk to us about the legal precedent here, because if they rule in twitter's favor, what happens? can they really force someone to buy a company? and then what occurs? ann: that is exactly the issue. i think most people watching from the outside think that twitter is a strong case. the question is what happens after twitter is found correct. then what, what do we do? well, they signed a contract in the contract basically says that there are two possibilities. one possibility is specific performance, meaning elon musk is ordered by the courts to follow through with his obligations and acquired twitter. the other is that elon musk pay a breakup fee of $1 billion. obviously, twitter would much rather he by the company, because he wants to pay 44 billion and that is bigger than one billion.

to the question is whether the court can and really will order elon musk to go through and by the company and delaware has done that. there have been occasions in the past where buyers got cold and wanted to walk away and the court said no they have to buy. this case is much bigger, it is a much bigger dollar figure on the deal and it is a company that has this huge social footprint. there is a real question as to whether it is appropriate to force an unwilling buyer to buy a company that is so important socially over his own objections. the alternative, contractually is $1 billion which does not seem rehydrated caroline: caroline: to that end, how much do the judges, lawyers involved, have to paint a picture of what has been lost for twitter financially as well? because fundamentally the picture has changed since he first made the offer. we all understand that and some would hypothesize this was a way to renegotiate the terms of the deal rather than walk away entirely. but they have lost key talent.

how can you assign monetary value to that? that is exactly why parties contract to say that there should be specific performance. ann: because you cannot put a dollar figure easily on it. so that is why twitter and elon musk agreed originally that the proper remedy would be to order it to close, because there is no way exactly to put a dollar figure on it. even if twitter were to try, they would run into the fact that they have already agreed that it has to be a dollar figure, one billion is the most they can get. it is kind of complicated the court is willing to order a performance. if it is not, is it going to be stuck with a billion-dollar cap or will it try to assess the amount of damage to twitter? caroline: of course, i feel like this is going to go down in the history books, but also the legal education books. from day one this was an extraordinary offered an extraordinary deal. and a very extraordinary person at the top, sort of leading and driving this. from your perspective does anything change? do you think this makes

companies act in a different way, when they have become a target? ann: well, elon musk is so singular. i mean, nothing about this deal unfolded the way deals normally do. this sort of overnight purchase, where he was pressuring the company on twitter and it was signed almost immediately. if there is any lesson here, it is that if you have an erratic buyer to be a little bit more careful, at least in the drafting of the merger agreement, which is always tightly drafted, but a billion-dollar damages cap maybe they should not have included that part. i'm not sure how many lessons there are for the future because i'm not sure how many impulsive

eyes of a 44 billion-dollar company would ordinarily see. -- impulsive buys of a company. the impression that must gave that he was buying it simply because he wanted to personally, they make this so extraordinary and hard to figure out what the next steps are. caroline: and of course the only winners are the lawyers. ann: well, they will certainly do pretty well. i think elon musk will win if he gets to walk away from this for $1 billion and nothing more. because he signed in agreement and created this chaos for this company and if the only thing he has to pay -- for me a billion dollars is quite a bit, but for him it is under the couch cushions. so i think you would make out pretty well if that is all that he had to pay. otherwise, i think it is a combination. caroline: extraordinary times. you put it also eloquently for us. chilean university and associate dean for faculty research, we thank you for joining. coming up, crypto, when it could be facing a noble that's another tumble but does this mean that regulation for digital assets is more than ever. kristin smith goes through it with us. this is bloomberg. ♪

caroline: let's talk about today's crypto report. wall street is expecting the crypto crash to get worse. bitcoin is likely to drop to $10,000 according to 60% of a mixture of wall street and retail investors who responded to the latest bloomberg survey. joining us to debate and also to talk about policymaking is kristin smith. kristin, i want to get your take first in or most take what you want to a certain degree of where next for prices, but as we see, this unarguable crypto winter upon us, is it now the time to be doubling down on

policymaking, ensuring that perhaps the protections where -- where we get an intense bout of interest in this space again? kristin: i think you're absolutely right. there is a focus in washington on trying to figure out the right regulatory framework for cryptocurrencies. it is important to notice that there are policies and on ramps and off ramps regulated for monetary purposes. there are sanctions requirements, there are securities instances. about what we really need is a fresh look at the regulatory space. we need to figure out a framework or stable clients. we need to figure out a framework for stock markets. and i think the events that happen in the market in the past few weeks and months have really focused policy maker attention on trying to figure out a path

or word. sonali: especially as you look at who has claimed to the assets at the end of the day in the event of bankruptcies or other forms of unwinding. how do regulators make sure that it is indeed the consumers that are protected, instead of the investors in these companies. what types of tensions does that create forward? kristin: i think this is the first time we have seen a couple of the larger companies in this space go bankrupt, where there are actually questions about customer assets. i think there are some places in bankruptcy law that we need to look at. more importantly, we need to have regulatory home or these types of entities that are doing consumer lending. we have seen in the past during many crypto native organizations be able to get bank terms. i think we need to have a discussion about how we can open it up, so that when you are dealing with customer deposits, there is some regulatory framework in place.

sonali: you really tied in with the regulators, lawmakers and companies themselves. realistically, we have been waiting years and there has been little movement on that front realistically, how soon can you see it now that you are seeing customers, retail investors, lose hundreds of millions of dollars? kristin: i think if you look at kind of the overall timeline, the key moment for getting this done is going to be 2023. i think the most regulators have done everything that they can within the authority that they already have to provide guidance in this space. not all of them, but most of them. the consensus is that we need a new framework, one that congress has put into the law of the legislation. we have been excited to see proposals like the one and others that are trying to look at these questions in a thoughtful and comprehensive way. i think the political reality is we are not going to see very much traction this year, because

the election is coming up. there are only a few legislative weeks left. something of this magnitude just is not going to move. what we're doing at the blockchain association is our members are meeting every single week to go deep on a different topic and finally, to coalesce around what we think we can live with as an industry, so that we can come to the table with solutions. i think there's a lot of work, and a lot of discussion, definitely legal bills, i can tell you that much. and we are working hard to try to bring actionable solutions to the table and i think 2023 is going to be the year this all comes together. caroline: what about europe, are they leading the way in some way? are there regional driving forces that are leading the pack versus the u.s.? kristin: europe made quite a bit of i guess you can call it progress last month. they passed sort of a more comprehensive look at impacts, legislation that looks at

stablecoins as well as spot markets and things of that nature. i do not think that they landed on their policies that are ideal, but they have moved forward and i think that that is another factor that will put more pressure on the u.s. congress, in order for them to move forward with the more comprehensive legislative solution. sonali: how hard is it for regulators to really make customers whole or make client funds -- keep track of client funds when companies are deciding to domicile elsewhere? becoming a huge hub or crypto firms, hong kong, the bahamas even. how do customers in the u.s. stay protected? kristin: customers in the u.s. should be operating with u.s.-based entities that are licensed to operate here in the u.s.. various technology where you can get around any sort of geo-fencing put in place, we

have seen quite a bit of this in the derivatives market, because there is demand in the u.s. for more access to derivatives. the only way to get around that is to use a vpn and go to overseas exchange i think actually having clear rules of the road in the u.s. will keep consumers protected here. and you know, make sure that the companies here in the u.s. are offering these services and have the ability to meet the demand that their customers, you know, the services that they want. and to do that in a way that is much, much safer. caroline: have you been discussing with companies sort of their moral obligations going forward? they might not be legal, but many will say this push towards saying it was democratization, this fervor around this fomo feeling around advertising at the peak when we were looking at advertisements around the super bowl. had there been lessons learned and is there an element of self-regulation going forward that they do not get themselves

into this situation again where yes, you can read the small print, but really, they should have been more transparent that there is an fdic protection and the like? kristin: the true decentralized finance, that did not break, even with vast changes in prices and a tremendous amount of work activity going on, the protocols themselves, they continue to operate. that is just software. where we run into trouble is situations where we have centralized entities taking possession of other funds. and also, where we have had lending that has gone on in a way that is levered multiple times over. but that has really been where the problems have. and so, i think what we need to do is look at how we put regulation on those centralized entities and what are their

obligations. the underlying technology, the software driven platforms, those continue to work just fine and in fact, you know, even under tremendous stress they continue to perform. one other thing i would point out though is that the industry, it's self, is swooping in to make sure that customers are harmed as little as possible. we have seen ftx come in and be a backstop to many of these companies. that is obviously not sustainable, but it is very much what jp morgan backed in 1907, saying hey, we see the bigger picture and we want to get through this turbulent time so we can get on building of all of the services that we think are going to improve so many lives. caroline: we thank you so much, kristin smith. of course with sonali basak on all things crypto. meanwhile, one of the biggest sparks, acquisition companies holdings, the tontine holdings is going to return the capital to shareholders. the ceo is telling us in a

letter to shareholders at the moment, of course, this is after they failed to find acquisition to take out. so the clock is ticking for many of these and many of them without an acquisition in the field. we will have much more on that, but later, we want to talk a little bit about prime. is it past its prime or will amazon's big day be the big event as it always is? we will discuss. this is bloomberg. ♪

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ibm. let's create caroline: amazon prime day is this week which means the internet will be in a renzi. -- in a frenzy. joining us now with what to expect, who covers amazon and it is a difficult time. inflation is real.

is it going to be more expensive, will we get the deals that we used to? >> that is a great question. you have this conflict, so it should be a great day for sales but sony shoppers are trying to fight inflation by looking for deals. then merchants, brands, manufacturers are dealing with rising costs, so they do not want to offer steve discounts. they want to beware of the profit margins. people will spend a lot of money. marketers estimating up about 17%. but they're not going to get as much with their money as they would like to. caroline: we're spending the same amount but getting less and less with it. to that end, how much are they managing to bring people into the overall offering? they have been doing some interesting offerings, purchasing grubhub was the latest one that they are teeming with. spencer: that is a great question and we are seeing signs that amazon is hitting the ceiling in the u.s. on prime membership.

there are some numbers that came out last week that they are about 172 million prime members, so that could include multiple people under one subscription in a household. hundred 72 million members in the u.s. as of june 30, which is unchanged from january. granted, they added 30 million in 2020 and 30 million in 2021, so they saw this huge growth during the pandemic but there are signs that it is leveling off and we will see if it starts fading. if people start looking at their budgets in the case of inflation. caroline: to that end do you think amazon is priming itself to become even more necessary in this time of inflation pressure or is it more likely to be cut? spencer: well, they definitely want to be absolutely necessary. that is why they keep building things so that if you are looking at your budget, you will think we really need amazon for this delivery. but we get videos to or other perks as well, now grubhub like you mentioned. they are trying to pile things on to make it as compelling as

possible, because people are looking at their budget. granted, they just raised it so people might think it's time to cut amazon loose. caroline: we will keep her -- we all keep reflecting on our budgets and seeing what is most integral. it depends on the programming as well. according to my producer, it is makeup brushes, lotion and collagen. that does it for bloomberg technology. tomorrow, exclusive interview with the partner at sequoia capital. her advice to founders on how to navigate the current market conditions, you do not want to miss it. don't forget to check out our podcast. you can find it on our terminal and apple. from new york this is bloomberg. , ♪

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