>> from the heart of where innovation, money and power collide. in silicon valley and beyond, this is bloomberg technology with emily chang.

emily: i am emily chang in san francisco and this is bloomberg technology. vacations are back. disney parks have a blowout quarter and screaming subscribers beat with revenue up 70%. more on earnings in just a moment. plus, elon musk sells more tesla shares. i will speak with one of his long-time friends, david sachs who has been subpoenaed by twitter ahead of the trial. and of the key metric for roadblocks sent shares tumbling. overall bookings are unexpectedly dropping in the second quarter. what does that tell us about the making of the metaverse? dave will join me one-on-one. let's get a look at the market

tech stocks jumping after data showed inflation decelerated in july. ed ludlow here with the big moves. >> uscp i, a .5% gain in july there. the estimate was 8.7%. decelerating inflation. cooler than expected inflation. outperforming the s&p 500. the broader index. it is worth noting the technology and information and communication sectors on the s&p 500 were among the best-performing. they have dropped by the most since june. on tuesday, a narrative around changing demand for electronics.

they got the regulatory findings wednesday night. if the judge were to enforce it, he had the cash on hand. that seemed supportive for both. tech was up more broadly. the big breaking news aftermarket in earnings season is disney. so fascinating because it was kind of a mixed basket of results. the main takeaway, the company adding more. we got a .5% inflation in the month of july. you got disney raising prices. they are liking something.

>> i want to dig into the disney results. a mixed bag, adding 14.5 million. the bulk of those came from india, others from other countries. >> i don't look at it as a mixed bag at all. it is blowout results. you are looking at netflix struggling to add subscribers with tremendous competition in the streaming business. disney is still growing tremendously. not only disney plus but hulu as well. when you look at this streaming business, although it is losing a lot of money, the future looks very bright for that.

there are over $2 billion of profits and 5 billion of it just from consumer products. the operating results in this company have improved dramatically. >> a broad-based recovery. let's take a quick listen to some of what he had to say. >> significant subscriber growth in our streaming services. that added 15.5 million subscriptions in the quarter, including 14.4 million disney plus subscribers and 8 million here. as of the close of quarter three, we have 221 million subscriptions across our streaming. >> that is the service that is offered mostly in india. what you make of the addition of this ad support here. does disney potentially have

something on netflix when it comes to and as abortive model -- the ad supported model? >> no. i think because disney has networks and cable channels, you are sort of competing against yourself a little bit where you are spreading your ads over the property. it just allows more consumers to watch the content they are making which is a net positive because they sell through so many other things to the fans. whether it is going to the park and products and such. for disney, the most important thing, i don't love bob chapek but he is proving he is a great operator during hard times. the prophet drivers of the business, he has them back in the losses they are driving from disney plus will ultimately turn to gains over time. there is never session at disneyland.

-- no recession at disneyland. >> when it comes to streaming, it all comes down to content. disney has a huge library but there has been some concern about how much of the content will continue to appeal to adults. something netflix may be doing a little bit better. how do you think about those two players in a rapidly evolving streaming environment? >> i am having trouble calling myself an adult because -- as an adult, i watched disney plus -- ob want -- obi wan was a great show. anytime they want -- drop something from star wars, i watch it. they have hulu for adult content but they just recently dropped some r-rated movies on disney plus like deadpool. it is really a high-quality set of assets on disney plus and

hulu is much more like television so they are appealing to lots of different demos and i don't think they lose the older demo at all. parents like me absolutely trust disney content with my kids and i took youtube away from them because youtube shorts has become the garbage hole. i don't want my kids watching garbage content. if i put them on disney plus, there is nothing they can watch that is bad. i think parents really trust the brand and that is starting to really pay for them. >> that is quiet a way to describe youtube. >> not youtube kids, youtube shorts. what has happened is all the creators on tiktok are now posting on youtube shorts. youtube shorts is basically tiktok. but they are getting out is lower quality content that now switches between so many different topics. i monitor my kids youtube because they watch gamers and they will watch unspeakable and

that is fine but then it will flip into a video like people exporting their children by throwing them in the pool. i can't monitor it with short and within two minutes, it is a garbage hole of content. it is just garbage. >> one more question before you go. we saw elon musk cell $7 billion worth of tesla shares. he says it is to shore up his finances. as this continues to evolve, how are you looking at this as a tesla investor? >> as a tesla investor, the sooner he can be done with it, the better. >> what if he has to buy it? >> it is weird about forcing somebody to buy a company where everybody at that company hate your guts. nobody at twitter wants to work for elon. elon is in a disaster.

he sold the stock because he might be liable for $10 billion in damages. twitter, the reason the stock is up, they might end up getting a check for billions of dollars. forcing him to buy the company would even be a worse outcome for everybody involved. i don't know if that is the court intention. it is to rectify the damage he has caused through this ill-fated merger. this is a tough time for elon and it is really all him. fortunately he is the richest man in the world so he can lose $10 billion. the sooner this is over, the better. >> provocative as ever. thank you so much for sharing your thoughts with us. apple is stepping up its spending on the original podcast. they signed an agreement with a pulitzer prize-winning stood up and holding talks with other companies about more deals. the deal with the studios will

fund development and production of podcasts. apple will have the chance to turn any podcast into a film or television. coming up, elon musk sold billions in tesla shares. what does that tell us about his potential twitter bio? i will ask david sachs who was just subpoenaed by twitter. she is next. this is bloomberg. ♪

>> shortly after the possibility of share buybacks, elon musk has sold $7 billion in tesla stock.

it is the biggest sale for musk ever. he says he will buy tesla shares again if the deal does not close. meantime, a number of people in the inner circle have been roped into this legal fight. among them are larry ellison, marc andre guest, longtime tech investor, david, good to have you back with us. you got subpoenaed. i know you said you were getting a lawyer to make this go away. what is the latest on that? >> i do have this very large, very broad subpoena. it is probably the thickest subpoena i have ever gotten. i know you're not supposed to talk about these things in these situations but i have to wonder if that is the point. i have been a vocal critic of twitter's management. maybe they don't want me talking about these issues. i can save them a lot of time

and hopefully some legal fees. i have never been in possession of nonpublic information related to their contract dispute with elon. i have commented based on all the public information that has been out there. two weeks, i am usually linking directly to that information i am commenting on. this is sort of an overly broad fishing expedition and i look forward to hopefully being done with it soon. >> we all know that you go way back with elon. he worked together at paypal and you have expressed support for him in the last several months when it comes to this twitter deal. looking at some of the tweets, the big question is did you have any nonpublic information? you talk about bots and suggest that deck -- jack dorsey masterminded this whole thing. is this all just your opinion or do you know something the public does not?

>> i do not. i am a commentator. i do a pod -- i have been for a couple of years. i have been writing blog posts for years. i expressed my opinion on these topics. this is all based on the public information. i am linking to the public information that i'm reacting to. that was a screenshot from a court filing that elon's lawyers filed. those are the facts i am citing. i am just a public commentator on this issue. twitter and elon have a fully integrated merger agreement that was negotiated by some of the best lawyers in the world. i don't know what the relevance is of my public commentary. on a contract dispute between them. this does make any sense. lots of people were roped into this. you saw that joe lonsdale tweeted that somehow he was roped into it despite his only connection being a few snarky

comments. i think this is a very overbroad fishing type expedition subpoena. but when you multiplied by the number of people that they are subpoenaing, it kind of amounts to harassment. i hope that court will suit. >> you mentioned your podcast. you and your crew actually interviewed elon musk a few months ago at your summit. have you had communications over the past several months? private communication? if so, do any of them pertain to the deal? could it be at all the vent -- relevant? >> the news that that interview did make some news but you can just go watch it to see. the question is if i have relevant information that pertains to this contractual lawsuit. i will think i do. there is nothing i know about

this that was not already in the public sphere. what i have offered are my opinions, my own opinions. they are not at anybody's best or instigation. i don't know why that would be hard for anyone to understand. as you all know, i am a person that has not been shy about expressing his opinions over the years. >> absolutely. you're on the show. one concern that twitter might have is elon has been texting all his friends and asking them to tweet about bots. what is your response to that? even though these people might not necessarily know or have any expert data. or have any special information about twitter's bond issues. >> none of this is that elon's instigation. twitter does have a bond issue based on my own usage. i remember in particular when i was tweeting about the ukraine

war, all of the sudden, these brand-new accounts that had just been created with zero followers, they started in march of this year and they were 20 things back at me and it felt like all of the sudden they were trying to drown me out. there are many examples like that. the information i am relying on is what is coming out publicly and what god reveals is that the way that twitter determines whether or not it has a bond issue is they are sampling 100 counts a day. -- accounts a day. i am not a statistician, this is just my opinion. in my view, having operated companies before, if you have a serious issue that could affect your company on an existential level, you do more than statistically example 100 counts a day. -- accounts a day.

that feels like a perfunctory exercise. i went to the public information about this and that is really all there is to it. >> elon musk at a tesla event last week had this to say about twitter. >> i understand the product quiet well. i think i have a good sense of where to point the engineering team with twitter to make it radically better. >> is is out -- this is as he is trying to get out of the deal. what you make of those remarks? what do you think he does with it? does he turn around and resell it? does he try to quote unquote fix it? >> i always hoped elon would buy twitter. i have supported the deal and the idea of this deal. i wanted it to go through because i think it would be a societal good if elon stored twitter to be free speech

platform. that has been my main interest in this whole thing. i would like to see censorship restraint and free speech restored on a major social network like twitter. i always hoped this deal will go through. at the same time, i have taken elon at his word when he tweeted there is this bond issue that -- but issue. -- this bot issues. if feels like twitter has not been fully transparent about that. i can understand that issue from his point of view. >> i want to get your thoughts on another issue having to do with social media. the fbi searched trump's mar-a-lago. in this particular case, how do you think these platforms,

twitter, reddit should handle something like this? >> if anyone is calling for violence, i would condemn that. in fact, you can take down any post to incite violence or a crime. content like that is not protected under the first amendment. >> do you think anything like that should be taken down without #? >> that is where i was going to go with this. you can take down content that would seek to incite violence. however, i don't think that is what this #is necessarily doing. what i see is people on the right are criticizing this raid on president trump's pirate -- private home. soldiers wearing body armor and carrying ar-15's, weapons of war with their fingers just outside the trigger guard. it looked like a rate of

something like pablo escobar's home. they are wondering if this is the beginning of a civil war. whether civil war is being declared on them. i think that is a legitimate question to ask. you have to see it in the context of not just this invent -- event but things that have been happening over the last 19 months. you have had draconian covid policies. gavin newsom has issued a state of emergency. they redefined misinformation as terrorism and they hired a democratic party operative to run a new agency. now you have this raid on president trump's home. i don't know what this was ultimately about but i do think these agencies deserve -- the public deserves an expedition in

terms of what they're after and what they were doing. >> once again, you are expressing your opinions to underscore but david, we always appreciate hearing your thoughts on the show. we will continue to follow this twitter story and more. david sachs, appreciated. coming up, much more of bloomberg technology. stay with us, this is bloomberg. ♪ ♪ what if you were a global bank who wanted to supercharge your audit system? so you tap ibm to un-silo your data. and start crunching a year's worth of transactions against thousands of compliance controls with the help of ai. now you're making smarter decisions faster. operating costs are lower. and everyone from your auditors to your bankers feels like a million bucks. let's create smarter ways of putting your data to work. ibm. let's create

>> sansone just unveiled the latest generation of foldable phones. the new galaxy full four and the flip comes into meant incremental of grades. a slimmer hinge. samsung kept prices the same despite costs of materials and shipping. prices will go up for sansone's

accessory letter. we are going to dig into the story of a nebraska teenager. how private facebook messages are being used in an abortion case against her and her mother and what that means for the future of digital privacy. my inclusive name is metaverse. and more, this is bloomberg. ♪

>> welcome back to bloomberg technology. i am emily chang in san francisco. i want to get back to earnings after hours. ed ludlow is back with us.

>> they are down almost 20%. that is right. 20% in after-hours. they cut the full-year sales outlook. the previously forecasted 1.95 billion to $2 billion and this goes against every single thing we have heard in this earnings season. a stronger dollar is hurting consumers in all kinds of markets around the world. inflation is pulling off consumer spending. they are setting elements of shifting consumer behaviors. the ceo says they are seeing less spent on goods, more on services and travel and they are heard by supply chains and a backlog. they basically had missed sales opportunities because the supply chain for their hardware is still not fixed itself. radial severe reaction. this is a stock that has suffered anyway. there was some hope that at least on the supply side, they could have improved things.

they also recently launched their own version of alexa to compete in that market. they know they are very sensitive to what amazon is doing as well. this is not good news. really severe reaction. when we will look at on thursday as well. >> as the pandemic has less time playing games to add to those rising prices but also, less money being spent on indian purchases, dressing up avatars and such, some game publishers struggle to maintain the search in growth seen during the pandemic. enter roadblocks which are just pointed to some. the company is still growing and expanding into the metaverse. david, great to have you back with us. there is no question the macro environment has been tough for a lot of companies, tech companies

and gaming companies in particular. how are you seeing those macroeconomic forces impact roadblocks in particular? >> thank you for having us on the show. we reach out to everyone who is having a tough time in these economic times. roadblocks just had our biggest month in history as far as engagement, as far as users in the u.s. and canada, around the world and in all age demographics. we are not disappointed at all. we had an amazing july and a wonderful q2. i think what it highlights is that roadblocks is not a game or maybe not even a game platform. it is an immersive human experience platform where people come together to play, to learn, to go to concerts. ultimately, the type of technology we are working on is almost more of utility that people use in their daily lives. >> your fastest demographic in the u.s. and canada is actually

17 to 24 years old. outpacing the younger kids. my son was in that younger cohort. what do you think is driving that? >> we always had the vision that roadblocks is a civil platform for people of all ages. it brings them together and allows them to connect authentically, to do things together, whether it is playing, whether it is dissecting a frog in school, whether it is graduating from high school. i think what we are seeing is the players get older and they are inviting friends. this growth is driven by three things. one is amazing content. almost half the content on roadblocks is now played by over 13 players done under 13 players. it is driven by the core of a rally of our platform. it is driven by constant technical innovation, new

amazing things around avatars, around immersive, layered clothing that allows people to be more closely identified with who they want to be, spatial audio we rolled out, higher fidelity materials. it is really a bunch of things driving this growth. >> how is engagement in monetization different for a slightly older age cohort? >> what is interesting is we have been monetizing very well across all ages. one can imagine as we start looking at older demographics that they do generally tend to spend more money on -- online. some of the products we are working on right now that we tended on include an ad server that is immersive and actually feels fun rather than getting in the way of our players. those types of things typically tend to monetize better with older players.

there is a huge future for our platform. not just around the world but as we get more and more older players on the platform. chris you keyed in on the disappointment among some analysts and investors earlier. you have always talked about a grand vision, the seven big inventions that are going to take years and years potentially to play out. how do you convince investors who might have a shorter-term time horizon to stick around? >> what is really interesting is think of the engagement, july, the biggest month we have ever had, 4.7 billion hours of engagement on our platform. 58.5 million daily active users. there were 13 and up cohort is growing at over 36% year on year and traditionally, as we grow engagement, we grow monetization. there is an enormous space in

countries like india and japan and the cohort for older players for us to continue growing along with our vision of collecting -- connecting a billion people with optimism and civility. >> you expressed frustration at times about being measured against these analyst estimates and i'm curious, given that you have waited so long, you waited a long time to become a public company. do you have any regrets about going public? >> i don't think i ever expressed any frustration at any analyst. i think we are all trying to do our jobs. we do keep optimistically talking about the size of the potential market here. we keep talking about the amazing people we are bringing on board. i just want to highlight our business model is robust enough that we are continuing to hire amazing people through the midst of what is for many people a difficult time and we have absolutely no regrets about going public. we run our business exactly the

same now as we used to before we are public. -- were public. >> given the macro environment, how do you think about spending? tim cook used the word deliberate. we are seeing layoffs and cutbacks at other companies. ping on the gas? are you pulling on the brakes? >> we are being consistent. we are hiring at the same rate as we were in the first half. we have always been very deliberate about overspending. we have a very efficient infrastructure, we have a very wonderful trust and safety team but as much as possible, we are trying to be efficient so our developers can take a bigger piece of that pie and keep making amazing creations. >> you are rolling out an immersive advertising system

later on this year. can you give us any more color on that? >> this has been a vision for a long time. the notion that when we are together in a 3d experience, we start to see some of the interesting things like billboards or a pop-up store in the town square that we are actually quiet optimistic based on the brands we work with that these will not feel like something that gets in your way but they will feel like something that is additive to the roadblocks experience. the brands that we work with our brands like gucci town. i think in march it had over 30 million visits were tommy play from tommy hilfiger. spotify island, these are brands that i think actually enhance the experience and will integrate in with this subversive advertising system. >> i am curious how you are thinking about mna. we are seeing some gaming and ad

tech companies joining some forces at the moment. you thinking about mna? >> i think we acquired 6, 7 or eight. there are absolutely amazing people. people that are very creative and innovative. people have been working on some of the technologies we are working on with our roblox platform. we have this wonderful business model where we bring these teams and players together. it is focused on improving our single platform rather than buying a second studio or pivoting in some direction. we are 100% focused on the quality of the roblox platform. >> there are skeptics out there who don't understand the metaverse and i'll believe it is going to be a thing. when it comes to the metaverse and these immersive experiences you are talking about, what is the next development on the near

term horizon that will help us all better understand this and potentially even experience it? >> i think the more people see just like print or video people using immersive 3d as a utility technology, i will give an example of one thing we are doing with first robotics which is -- it is a wonderful educational platform. it requires everyone to have a robot think it in to bill weld. there are many in the real world that don't have access to this. our partnership is simulating that exact same thing. competitive robot building, seeing how it works. this is a utility use of a platform that i think as people see this, they just are to say we see the wide range of uses from music, entertainment, play, learning and ultimately working. i think everyone will understand

this is a continuation of communication technology. >> all right. great to have you back with us, david. this was a busy earnings week. we appreciate it. crash coming up, crept up rallies on the new cpi report. who are the leaders of the rally? more on that next, this is bloomberg. ♪

>> time for eric gripp to report after a softer than expected inflation number.

they were calling from that 9.1% back in june. that is the largest for a decade. any crypto winners in this rally? >> the whole state was winning today. if you look across your crypto screen on the terminal, it all comes back to bitcoin. the largest crypto currency out there having a fantastic day. this goes back to the passion we saw on the stock market. you have the nasdaq 100 up 2.5%. bitcoin is going to be up as well. it all ties back to wagers the fed is going to have to be less aggressive than may be feared. you saw that reflected in the bond market. bitcoin was your big winner.

there is some fundamental news there. as we way to merge. i saw this coming up. it is known as the software update basically. we have been waiting for it for a while. theoretically it will happen in the back half of this year but what is important tonight is you are going to see the so-called girly test. it is scheduled to take place, it is basically a test merged with a test network. you have analysts saying this is the final dress rehearsal before we get to the actual merge. that is what you're seeing reflected in the prize. optimism that this test will go well and maybe we can get the actual to follow soon. >> thank you for that update. we will be right back with more. this is bloomberg. ♪

>> we want to talk about facebook now and how the app was used recently in an abortion case. a woman charged with two felonies related to illegal abortion after authorities discovered information about the pregnancy through private messages on his book messenger. this according to court documents. jessica burgess had helped her 17-year-old daughter obtain abortion pills when she was more than 20 weeks pregnant, making a determination of the identity illegal in the state. her daughter also facing related charges. i want to bring in bloomberg's sarah frier now. set the stage a little bit now. what happened? >> what happened in the case?

>> this is not the perfect case to look at when we are talking about whether tech companies give over data to authorities in the post-roe v. wade world. initially, it did not even ask for anything related. that is what was at stake here. facebook cooperated with that. through that search, they found these messages about the abortion pill and then added those charges. they said we did not know this was about abortion. >> let's look at this statement.

court documents were investigating the case of the case of a stubborn baby who was burned and buried. not a decision to have an abortion. the orders have not been lifted. as you say, the statement begs the question, if they believe this did have to do with an abortion, facebook would have done something differently. what are the -- would they have? >> that is why the need to bring us some clarification. i don't think that is what is going to happen. tech companies do tend to comply with the law's days where it is a law or they can operate their and their business comes under risk. i think we will see many cases where it is not even clear in the warrant that they are searching for abortion-related data and it is going to be up to companies like facebook and

facebook has come out and said this in the past. it is going to be up to them to make sure those are not overly broad, that they have some legal parameter they are following. that it is not just a wild goose chase through facebook messages try to find something to convict and then they let users know that the data has been requested. that has been the line from the company. they are not saying either way whether they would cooperate with authorities and abortion cases. my guess is a lot of the companies will have to end up doing that. >> this brings back the case of the san bernardino shooter back in december of 2015. apple refused to turn over the shooter's iphone. how do you compare this to that standoff? >> i think we have not seen a lot of tech companies standing up to law enforcement and the

time since, they just put those parameters around. we don't want our users to -- we don't just want to have a backdoor to all of the messages they ever sent and they tech companies have worked on things apple included on encryption, making sure there is no private way for people to send messages. i think while this gets cleared up, the best advice for anyone using any tech product is use an encrypted messaging service. whether it is signal or what's up. it is other than messenger for the most part but messenger does have an option to send encrypted messages. the point from the company would be that we cannot give this message to law enforcement because it does not exist on our service. >> this happened with facebook before where it was overturned. and a number of big tech companies have a lot of information.

what are these companies do -- doing? if law enforcement comes to ask for emails? search history, buying history, the companies have been mom on it. there has not been a perfect case to rally around. i think what is happening with this case is people are looking at it and saying abortion messages from facebook. but then we look at the details, it gets murkier because it is after 20 weeks in the state where it is legal there. there was a burial. i don't know if i want to go into the details. they are a little too dark. i think the case is not the one the privacy advocates want to rally around.

it is an indicator of how murky each one of these things is going to be. it will never be clean-cut. >> what is your sense of whether this nebraska case could create a precedent for what happened in these cases when these requests are made by law enforcement? >> every state is changing their lives in this moment. in the past few weeks, we have seen abortion get limited, restricted, criminalized, people who help out with abortions in some states. whether it is even having knowledge that they exist, it can be leading people to legal liability. i think it is opening up liability for users of these platforms beyond even just patients who might get abortions. i think this is a very big area we need to continue to look at because if companies like in the

comply with law enforcement wherever it goes, users of these platforms will get increasingly concerned about their privacy. and their ability to conduct normal everyday business. >> very complicated, nuanced issue there. thank you for upping us wade through all of that. i appreciate it. that doesn't it for this edition of bloomberg technology. thursday, i will be sitting down with the new ceo of pinterest. bill reddy is joining us for an exclusive conversation about the first month on the job. this is bloomberg. ♪

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