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

collide, silicon valley and beyond, this is "bloomberg technology," with emily chang. emily: i'm emily chang in san francisco. coming up in the next hour, summer travel sting airbnb to a record expectations are even higher for the quarter. michael saylor and the next chapter, stepping down as ceo to focus on, wait for it, more bitcoin. he joins us later to tell us why he's making move in a continuing crypto winter. despite inflation pressure, a bad news trend got bucked. competitors like robin hood are

starting a massive round of layoffs. first, tech and biotech surging from paypal and moderna. i want to bring in ed ludlow, bad news from walmart after the bell. ed: earnings were good when i first came in, looking at the screen now, a lot of red. strong quarters, strong outlooks, back to pre-pandemic levels, the stock down 4% though , something spooking investors. saying they will only build between 6000 and 7000 vehicles, we started this year at 20,000 vehicles with supply chains for the ev maker, half of a strong quarter with a strong outlooks showing a strong strategy of higher rent for collectibles is paying off. breaking news the market close, walmart laying off hundreds of corporate jobs but what's interesting is this idea that they invest e-commerce,

something i reported a while ago, serving he curled -- e-commerce and curbside pickup. the nasdaq 100 having its best day since may 4, hence my official star wars tie. strong performance in the semi conductor sector with little fluctuation in yields. four basis points. it's been a weird week and a weird time in recent weeks. looking at the nasdaq 100 and how it has traded over the last 10 days, momentum then sideways, waiting for earnings to show us the strength of the consumer, popping off strong earnings on tuesday in particular. looking at the session on wednesday, i know we need to get to airbnb, but the pockets of strength and we as, sophia is absolutely surging, 29%. strength, showing signs of

strength when others have not. paypal is the other outperformer . airbnb, interesting, strong record quarter, strong outlook, high expectations from the street. one of the laggards. interesting one. emily: indeed, we are going to ask brian about that get airbnb, just not it's best, but second-best revenue ever. it's only going to get better with average daily rates 40% higher than pre-pandemic. the chair joins me now. i have to ask you about this market reaction. they have paired their reactions or the day but they are down for the year and what do you think investors are missing? brian: a lot of uncertainty and travel right now. i think the best thing we can do is keep telling our story. revenue was up 58%

year-over-year, $3 billion in the last year. one of the things that we share with investors is that bookings accelerated from june to july. one thing that we saw is that there is a lot of demand for q3 q4 summer travel and we are focused on being in control, that's what we are doing. emily: there is some disappointment about your forecast, still growing but growing at the same rate as last quarter. been filled from jeffries was on saying i might be -- brent was on from jeffries saying he just took a big trip, now he's going to slow down because of what's happening in the macro environment. how concerned are you about that? brian: we are not very concerned about the macroenvironment. two years ago we experienced something that we thought much worse than the current

environment. our business dropped 80% in a week when the pandemic hit the thing that was remarkable was what happens next, we recovered faster because our model is adaptable we have nearly every type of space in every type of community. people are still going to want to live on airbnb and travel. airbnb is a great way to do that. great for urban travel and crossing workers. want to get in the car and travel nearby, we work for that as well. we are a very adaptable model in a difficult time. people turned to airbnb to become hosts, wanted to save money and seek value. we are actually feeling very positive right now. emily: i spoke to the ceo of uber yesterday who said that he thinks uber is recession resistant.

would you describe airbnb that way? brian: we were born in recession. we just established a record q2 and are feeling really good about three. we are as well-positioned as anybody for recession if that were to happen. emily: we are talking a lot of companies doing layoffs. walmart, coinbase. tim cook said that apple is planning to slow down spending on growth. also said that they plan to be deliberate about her spending. are you changing your spending, investing, or hiring strategy at all? given the downturn? brian: absolutely not. if anything i'm interested in stepping on the gas. here's why, we were through this before. two years ago we had to right size and make difficult choices

and got really focused. that's why we went from a company with negative cash flow to positive. we are not changing our plans or any investment. we are staying really focused and we have sustained are disciplined. -- discipline. we were disciplined when we right size. now what we are focused on is next travel season. focused on how we can step on the gas to be prepared for the next travel season. emily: what's happening next travel season? it's clear that urban and cross-border travel are back. what are the destinations that will be most popular? brian: last year i thought it would be the rebound of the century ended nearly was but of was we had the delta strain and this was an even bigger year, record order for us. this was before asia recovered. a large percent of travel is asia-pacific and it hasn't

covered because of javad yang cross-border and people are not really crossing borders yet. urban and cross-border more generally is just getting to recover, double what it was last year. i think that everything is going to continue to recover, notwithstanding what happens in the economy will be bigger than next year. emily: airbnb closed shop in china at the end of july, so tough to do business there because of the zero covid wallace he but you are now focused on outbound trip china travel. any expectation on when restrictions will he's and that will open up? brian: i don't. we are not in the business of predicting when countries will reopen but we will be the most prepared when they do. we will be ready when the borders reopen. to be clear, the china outbound business was always the prize. the chinese consumer-based

wanting to travel around the world and stay in homes. that's not really a robust business right now because people are not really causing the border, but when they are we will be ready, making sure we have enough homes in all of the corridors. we will be prepared to have enough homes and market them and make sure it's a great option for them. emily: how much more pricing power can hosts have in this market? this is the worst market that airbnb has ever seen in terms of inflation. brian: our business is somewhat seasonal. right now it is peak booking. a lot of people are traveling right now it because of that, prices will continue to go pop a little bit. bookings in august right now are to you for september on words, that's really after the travel season. that will provide some pricing belief. presumably.

i think there will be quite a bit of flex entering the system as we go off of high season. emily: there seems to be a trend in companies buying up short-term rentals in bulk and i wonder if that makes you concerned about inventory. brian: i'm not sure i understand the question. emily: you have these property managers purchasing up short-term rentals in bulk. i wonder if that could be more competition for airbnb, inventory growth getting more difficult. brian: i see. i think for the most it's good to remember our scale. we have 4 million hosts with 6 million listings around the world, hundreds of millions of guests. the scale of airbnb is critical and ultimately hosts decide they want to have the platform where they have increasing demand and airbnb probably has more demand homes then any platform in the world so i think we will be the

place for people to go. this is the category we created. emily: airbnb employees might be driving that demand. i know earlier this year you announced that they could live and work from anywhere. i'm so curious, your learning from this policy so far, what has been great, what has been more challenging, anything that you need to be tweaked? brian: it's been a great experiment so far. we announced that employees can live and work anywhere and we will change pay if they live within the country. and we will make it easy for them to travel. reaction was incredibly amazing. we have had hundreds of thousands of people visit our jobs page. clearly people want this. it will open up access to tons of talent around the world. our guidance isn't only to be on zoom. we would like people to be together a week a quarter.

we are trying to balance the best of zoom, best of real-world and we don't think that's necessarily being in the office he's a week. meaningful engagement. it takes central planning. you don't want free-for-all. you want to have things centrally planned. if one team does off-site, it can stop everything when collaborating with another team. you don't need to be in an office and see people working to another they are getting the job done. you just need to be organized. the more organized you are, or flexibility you can offer. emily: y combinator is cutting back by the accelerator. airbnb was one of their biggest successes, perhaps. does it give you concerns or pause about let's say the next six to 12 months? brian: to put it in perspective

they said they were going to reduce the batch-sized only fund 250 companies. when i was there it was 17 companies. just to put these things in perspective, the scale they operate off of his hard to fathom. i think they funded 4000 companies to date. i don't think anyone has ever funded more companies. it doesn't give me cause because the scale of funding 250 companies is profound. more than an order of magnitude greater than when we were there. i think that, you know, i don't know why, i don't know the workings all the details, but it doesn't give me pause. . emily: i know you are back at your home in san francisco but you have been on airbnb for some time now, i have seen pictures of you and your dog, sophie. but have been your favorite destinations and where are you off to next? brian: one of my favorites was a

frank lloyd wright home in ann arbor, michigan. have an entire collection under our design category. that was amazing. i'm going to europe and a little over the weekend looking forward to staying at some rate airbnb's. i think i have stayed at 12 or 13 by my last count since the beginning of the year, having gone to places all over the country and its rate, turns out you can run a large public company from a laptop in the home of someone else. emily: i will have to track down your 12 to 13 reviews on airbnb. brian, always great to have you. thank you. emily: coming up, china changing its tone during the nancy pelosi visit to taiwan and what it means for the relationship between beijing and washington. that is next on bloomberg. ♪

emily: house speaker nancy pelosi on her visit to taiwan, china reacting with a series of trade sanctions and military exercises on taiwan. our political director joins us from washington. what you make of this trip and the way it has laid out? >> it's interesting, we had been hearing a lot of threats from chinese officials directly who warned about consequences if she made the trip. the president himself said that there would be, that the u.s.

and taiwan would get burned if that happened. she went, she got there safely, she spent the night, she met with taiwan's president and other government officials and left. set a lot of things about the u.s. commitment to taiwan. now china is sort of backing off that belligerent tone and saying give us some time. have patience with us while we develop our strategy for determining what we do about taiwan in terms of that retaliation. it really has been a marked difference in town in the past 24 hours since nancy pelosi left the island. emily: how are we expecting china to retaliate? we saw an analyst who said that we wouldn't see it right away but you will see them focus on certain companies and it will play out over years, not days. >> i think that's probably right. china is famous for having a

long view in terms of geopolitical kinds of things. certainly political kinds of events. there are two different categories. one of them is military. no one expects china and xi jinping to try to do something that could be, would be very dramatic to try to unify taiwan with the mainland, we do expect that things like missile tests and military drills could certainly be a part of that and they have already announced it, saying missile test could occur at any time to showcase their strength, the strength of the chinese army and defense forces. also, these drills that they have said will start soon. i think that we will of course see some of that but also economics. the thing about some of these military drills is they could disrupt the taiwan airspace. taiwan today complained about

that, saying they wouldn't be able to have commercial flights operate in the same kind of way. also shipping, shipping could be disrupted. china made some announcements today already about how they would not send some products to taiwan. we should also note tariffs could become economically punitive in some category of goods. that could be a real way to try to punish taiwan. we will see more over time with perhaps a variety of strategies being used to try to squeeze taiwan. emily: interesting. a lot of complicated dynamics to watch play out for years. jody, thank you are weighing in. coming up, more companies moving out of sanford disco, including one of the most prominent venture capital firms in tech. this is bloomberg. ♪

emily: one of the most prominent firms in silicon valley announcing his new headquarters, the cloud. silicon valley still is the top draw for venture capital dollars, san francisco attracting $52 billion in vc funding, more than one third of the total according to pitch book. it's a pretty big deal that andreessen horowitz is moving its headquarters, if you will, to the cloud, opening offices in miami and other parts of the country, right? >> a major deal. a watershed moment, for those

who aren't familiar with injuries and horowitz, it's one of the largest vcs with the most under management. they back things like lift, roadblocks, employing more than other firms. for them to say we no longer need to be in silicon valley, green lights, that practice for founders already found that working remotely works well. emily: is this the start of a trend? >> i would say its continuation of a trend that began before pandemic and this accelerates it. looking globally, how venture capital is distributed, the u.s. got 84% of total venture capital back in 2004. 2020 one the u.s. only got 49%. silicon valley's share of that continues to go down over time and this is accelerating that and of the reasons why is

because there are so many new places to get funding. emily: is your expectation is silicon valley will maintain dominance but there will be miniature silicon valley's around the u.s. in the world? >> i think that's a fair bet. i think that based on the talent here i don't think it's likely or, you know, a massive exodus of people to suddenly say no, we will sell all of our homes, rip our kids out of schools in all of that, but you know, there's definitely competition from other races with lower costs of living, lower tax is, and equal access to cash and talent. emily: some of them are very loud. thinking about miami. >> miami is very loud. [laughter] i lay as loud as well. as well as other market have been increasingly gaining steam,

like including salt lake city, atlanta. you look at some of these other markets that were overlooked by venture capitalists who didn't want to get on a plane or arrange the travel to go into a seed deal in early stages when they really need that one on one. they weren't willing to do it so in a way remote work makes venture capital more accessible to a larger number of founders that were historically overlooked. emily: fascinating and we will continue to follow this trend. lizette chapman, great to have you. bloomberg lp has invested in and recent horowitz. coming up, so if i stocks with record quarterly revenue. we go over all of this with the so five ceo. this is bloomberg. ♪

>> welcome back to bloomberg

technology. i am emily chang in san francisco. many stocks got clobbered in the first half of the year. lagging the s&p 500 with growth slowed by covid. it all raises the question of which payment stocks are best positioned to weather the downturn. ed ludlow is back with us. >> look at the numbers, they are up. the fourth straight day of games -- gains. in a consecutive quarter of positive. let's look at what the street was really paying attention to. this strong guidance for the rest of the year showing growth to the second half of this year despite changing market conditions. a really interesting move as well. personal loans also up.

they seem to be doing well, consistent. that is what they had to say during the earnings call. compare your today versus robin hood as an example of how to do this. >> you. i want to bring in the ceo, strong earnings, you are bucking the trend here. click the big uptick in deposits reflects the fact that for the first time, we had our national bank open. we have taken an approach where we really want them to be with

us for all of the major decisions they make in our lives. in order to be that primary relationship, we need to be the place they do their direct deposit. we are offering them 1.8% interest. that is on checking, no minimum balance, no restriction on spending. that is what is allowing us to fund loans at a much lower cost. the two businesses are really synergistic. we can then watch more people and it drives great virtuous circle. >> i know you are expecting strong growth in the second half. we have a recession looming. we have these dire one is from policymakers and other ceos. what are you preparing for? >> we have been preparing for war since march of 2020 when the global pandemic hit, the president of the united states told federal student loan borrowers they did not have to

continue to make payments on those federal student loans as part of the cares act. that was important for our country. that had a negative impact on our student loan business. if you are not paying your student loans, there is no reason to look into getting a lower rate. we are a one-stop shop. we are building at the aws of intech -- syntax -- fintech. we really benefit in different environments and in this environment, we are seeing great trends in personal loans, investing in strong demand on

credit card and strong demand for technology services. >> you have the student loan moratoriums at the end at the end of this month but it is unclear what the biden administration will do. will it extend that pause? what are you preparing for their ? does the work continue? >> yes. it does. our outlook assumes the student loan moratoriums continues throughout the entire year and also that the president does provide forgiveness at about $10,000 for individuals. if that actually happens and it is definitive, we could see a little bit of benefit but we are not counting on it. we assume that it will continue through the end of the year but once the government makes a definitive statement, people can make choices. now, they are doing nothing. they are not benefiting from refinancing before rates go higher. they are not sure if they should

refinance or at all. once we have a decision, we can go to a market in a conservative way but right now we are anticipating the moratorium ending by the end of the year. >> we still have what seems to be a deteriorating macroenvironment. robin hood announced yesterday there laying off 20% of their workforce. i was on this call with the ceo who said he anticipated good market conditions would last longer than they lasted so that is on me. he used those words. is there any chance of this coming for you? >> we have been doing this since march of 2020 when our most profitable business got caught by -- cut by 75%. we delivered executive quarters and three quarters in a row of

record revenue and we had cap profitability for the first time this quarter in our bank. that is because of what risks we are willing to take and also dropping into the bottom line. we endeavored to drop about 30% of revenue and reinvest 70%. that keeps us disciplined on the cost side and not building up the expense. >> we are seeing bigger tech companies, huge tech companies, apple, amazon to a certain extent encroaching on the fintech space as well. how big of a threat is this? >> we don't see them as competitors. we monitor technology to deliver the service. we have pretty big moats built around our business. while we have a lot of capital, they don't have the credit and risk and marketing capabilities that we have in addition to that, people need to trust you.

we spent a lot of money to try to build trust and reliability in our product and services to become a household brand name. when people give us their money, we need to know it is available 20 47. that technology is very different. no one has really captured the sector the way amazon has or youtube has. one of the reasons why i joined so if i is i understood what those limitations were. >> always good to have you here with us. the ceo of micro strategy is stepping down but that does not necessarily mean the end of the bitcoin europe. we will hear from him and much more, coming up next. this is bloomberg. ♪

>> micro strategy is changing up its leadership. the ceo is giving up his title and saying he will increases his advocacy efforts. shares climbed as much as 70% -- 17% after this announcement. joining me to talk about all of this and more is michael. great to have you with us. what drove this decision to move on from that ceo spot? is it the end of the bitcoin

era? >> no. we got into bitcoin a few years ago and it has been a story of great success. the stock is up 123%. we outperform bitcoin. we did three acts as well as any other big tech company. the shareholder returns have been better than any competitive stock or competitive asset class and most inwardly, our balance sheet as well. we have increased our enterprise value by more than 730%. from 609 to $5 billion over that 24 month timeframe. now we have gone to the next point in our development weary decided we wanted to have a full time work at cfo. andrew kang joined us in may as cfo.

when andrew joined, that opened up the door for us to make him the president and ceo and for me to move to the role of executive chairman of the company. some people have written in the news that somehow this is related to record of the result for this large impairment chart from q2. it is totally unrelated. i have been working on ceo succession for a long time now. it has always been part of the plan. we finally got to the point where we had andrew on board and we could actually make the change. i think the market is responding to the fact that now, instead of two executives, we have three. it allows me to do what i like to do which is bitcoin efficacy. bitcoin acquisition.

this is the chief operating executive. >> is there any truth that you are pushed out of this role? >> no. it is my idea. second of all, some people said that -- i have been planning to replace them as ceo as we made him chief operating officer. he was running sales marketing technology services, pretty much everything. he was the cfo.

that was the two years to get comfortable in that role. we could not elevate him to ceo and cfo. when could i find a cfo. >> micro strategy lost a billion dollars. the biggest tech companies are underperforming. how much is too much for you? >> it is a non-cash and definite intangible loss. the number that matters to our shareholders is 129,699.

that is the amount that we hold on our balance sheet. we are volatile in the near-term. volatility is the price you pay for performance. we could have just given $509 back to the shareholders and operated an enterprise software company that would have been worth about $60 a share. the stock is about $300 a share. it generates. we have more volatility in one hour then we have had in 12 weeks before. i embrace the volatility because the alternative would be dead money and no one cares about us. >> given tesla sold 75% of its

crypto holdings. you tweeted if you sell 75% of bitcoin, you only have 25%. >> such a sad day for tesla. we all regret having chosen great assets. they will never be more than 21 million bitcoin. 100 years from now, there will never be more than 21 million bitcoin. i think it is a buy-and-hold strategy. i think tesla has many other issues i am not privy to. i think acquiring and holding high-quality properties forever is a good investment strategy. >> you filed with the fcc.

>> there was a stock option grant to the new ceo. the rest goes to the employees, not to me. i work for a dollar a year. we have made a concerted effort to make sure nearly all of our employees either have stock options or restricted stock units. that has been a highly successful motivational program. it has cut our attrition in half. >> decentralized cryptocurrency

has been argued to be from the u.s. dollar. it has not happened yet. will that happen? >> i don't think it will. i think there was incredible consensus that the entire world once a digital dollar like a stable point, circle or tether and they wanted because their currencies are collapsing and a billion people would like to have elders on the android phone. -- dollars on their android phone. i think it is overly important as that you stand beside things like gold or oil or land and there is incredible demand for that sort of digital property in the world. i think bitcoin will grow as an asset class. it will be legitimized and embraced as an asset class. i think it will coexist alongside other assets and i think there will be always fiat currencies. in a place like sri lanka and

venezuela and nigeria, their currencies are collapsing. those citizens are going to use the dollars and meeting exchange. you want property and bitcoin is that long-term digital property. >> all right. always good to have you, michael. thank you for stopping by. >> coming up, more on the twitter and musk saga. why twitter is asking for investors to get involved in the deal. that is next, this is bloomberg. ♪

>> onto the latest in the twitter saga, repeated information from equity seekers and a host of other venture capital figures. this over elon musk's financing of the 44 million other bio. we should note that bloomberg lp has invested in this. here to break it down for us is our reporter who covers report from delaware. is this pretty common as part of discovery? >> it is standard operating procedure for both sides in these lawsuits to issue a bunch of subpoenas to banks, equity investors, lawyers, so they can gather the information they need to build their cases.

>> we have spoken to these friends of elon musk. they have come on to talk about the potential for this to happen. listen to what he had to say. >> when you put bots on twitter and pretend to be someone you are not, you are basically portrayed as fraud. it is perfectly fair game under any free-speech policy to take down these kinds of bots. i fully expect e line will be far more effective at doing that than the current management of twitter because they are unable to do that. >> we don't know what kind of discussions they had behind-the-scenes if any at all but what might they be hoping to get from someone like david sachs? >> this issue of the bots is where the rubber will meet the road. it is my understanding that it is very difficult to get very

specific numbers on these things. everybody has to deal with them. it is not just twitter. it is a common problem with the tech industry. it is not going to be an easy argument for mr. musk to win on. the twitter people say it is all sort of pretext ginned up to provide a basis for him to walk away. judge mccormick is going to be the ultimate decider of all of it. >> what is next? >> we are still in the discovery phase so we will still have a blizzard of subpoenas. next we will start with notice of depositions. there will probably be hundreds of depositions in this case, bankers, esther musk, twitter people. everybody will have to sit down. then we will go there in october and it should be quite a show.

>> a show indeed. we will follow this blizzard of subpoenas. i know you will continue to be very busy through october. thank you for coming in. we appreciate it. that doesn't for this addition of lumbar technology. we will talk to wesley from the wesley group. he was a former director on tesla. don't forget to check out our podcast wherever you get your podcasts. i am emily chang in san francisco. this is bloomberg. ♪

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