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

emily: this is "bloomberg technology." juul ordered to pay to settle a probe over marketing. the company faces hundreds of lawsuits. plus, the rise of the creator economy. we will take a deep dive and how youtube reigns supreme as the platform of choice, tiktok is catching up. it is back. nfl starts thursday, more sports betting. our conversation with the ceo and what to expect as we kick off. all of that in a moment. let's get a look at the markets, tech leading declines as markets fear a more hawkish fed. ed ludlow is back in san francisco with the latest. welcome back. ed: painful weaken the market.

stocks in the red, tech underperforming, a familiar story. u.s. services stronger than reinforcing the idea the economy can withstand higher rates. the nasdaq down 7/10 of 1%, underperformance in semiconductors. selloff in the bond market. it follows three straight weeks of decline on the nasdaq 100. there is a feeling we will continue to see declines, especially when you take into account earnings revisions. simply put, we see downgrades, estimates outnumbering upgrades. that is a worrying signal as we enter a period that is traditionally very strong for equities. there are stories out there in the new cycle, some names we are keeping an eye on, for only 29 names in the green.

tesla is the biggest outperformer. apple, 24 hours ahead of the key events where we hope to get new details on iphones. the biggest point laggard. two key names, ubisoft. surging as much as 17%, paring gains. tencent will double its stake in that company. altria, closing down 1%. it spiked higher on headlines that juul has reached a settlement with 33 different states. emily: absolutely. we will talk to later. juul agreed to pay $438.5 million to 33 states, this resolves a two year bipartisan pro into the manufacturing

practices claiming it marketed addictive nicotine to children. telus has significant this settlement is -- tell us how significant the settlement is. reporter: it is significant. the largest they have had to pay to date. the company has settled a few state lawsuits in washington state and north carolina, this huge investigation was hanging over it. clearly, they decided to be done with this, though clearly there are lawsuits still pending. it does away with lawsuits that could have been filed by 33 states and puerto rico. emily: how much does this resolve the hundreds of other lawsuits? how much of juul's legal troubles go away? erik: it is significant that

states have settled, there were still over 2500 civil lawsuits filed by individuals, dozens of cases in school district. in november, the san francisco school district is the first of these cases to go to trial which could show the potential for how a jury would react to evidence. that is another one we could see a settlement before it hits trial. there are over 2500 suits out there, plus new york and california, which normally have the potential for big settlements or damages, they have lawsuits still pending. emily: juul agreed to stop a number of marketing practices. what are they, how big of a change will that be from the company we knew before? erik: they said in a statement they have agreed to do things

they are already not doing. they voluntarily changed practices a while ago. the writing is on the board about how the handle is coming down on marketing practices, it's no longer going to market to youth, not going to boast social media marketing, not going to use cartoons, not to public transportation advertising. not using anyone under the age of 35 in advertising. a lot of things like that. no free products. quite a wide range. including, limiting to fda approved flavors. emily: thank you for that update. we will continue to watch how those evolve. meantime, an update on private

markets and vc's. we are speaking with sheila patel, vice chair and general partner at bain capital. this is bloomberg. ♪

emily: let's take a pulse on the pc market and declining market conditions, talk about what is the future of venture capital. i want to get to sheila patel, get her insight. thank you so much for joining us.

what is your reaction to a continuing hawkish fed? we are getting mixed economic data, some looks better than others. what does this mean for your world and investing strategy? guest: venture capital has been an amazing run, and it was inevitable that we would come to a more difficult time. looking at the environment we are in today, i think it's a great time just as it has been in the past when you go through cycles that are difficult for private equity to look at technological innovations driving future innovations in productivity. to my mind, the pullback is necessary, and a good thing for shaking out where we need to be.

emily: where are we? our valuation still too high? sheila: you are seeing in the latest rounds, founders are realizing they need to do larger deals, more capital. that is to be expected. we're seeing from citigroup, from our strategic partnerships, suggest you will see more m&a in areas like the back office. i think there is room for valuations to move, but there is room for incredible innovation to come in areas that see the most difficult -- crypto is a great example. there is an interesting future

ahead after this latest downturn. emily: just how long is the downturn going to last? we have guests predicting millions of layoffs. does that jive with your thinking? sheila: it is entirely possible. i am probably more optimistic than that, because i see some positive trends in what is going on as well. for example, a recent survey suggests cfos and hro's in the financial and hr space are pulling back. a lot of what we focus on his core areas like enterprise. at the same time, they're going for more difficult circumstances. recessionary environment is not necessarily the worst environment for the business. emily: you're investing in

companies taking on big tech, or trying to challenge big tech. we have been following a big piece of legislation working its way through congress to rein in big tech. there is a chance it won't make it before the midterms. what do you think the impact could be, and the impact of what could happen? sheila: around the world, the technology industry has proven itself to be incredibly adaptable. this is not the first time or region or country to take on issues of big tech. we have seen it where i have lived for many years in europe, the tech industry continues to adapt. many within the industry are eager to adapt. technology moves faster than humans can handle it. in my mind, whether the regulation happens before or after the midterm, some amount

is coming. everyone has accepted that, is ready for that. the real issue is making sure it's addressing the right thing. solving the right problems. emily: what is your advice to portfolio companies right now? potentially we are in a long downturn, a lot of uncertainty ahead. moving out of an era where there was a lot of money flooding in. now, investors want to see real numbers. sheila: it's a chance to go back to the meeting. as we look at portfolio companies, founders that think about things for the long term, founders that have a sense of cash burn rates and maintaining the runway, but also have a sense of competition.

realizing that they are in a moment to be aggressive. think about ways to push themselves, business and products forward in a difficult environment. you see many of the best founders able to put that hat on. but the hat on that says my idea is the best idea. my competition is showing the signs of weakness, this is my time to shine. emily: where are you placing your bets in terms of where we think we will be next year? sheila: we look at it as a more stable time. we see -- we invest over many -- you will see a slow and steady

investing in a year from now. we will be very focused on the areas where we see opportunities. enterprise. the evolution of crypto. my colleagues wrote a great piece about where descriptive go from here? where crypto and fintech merge. at this moment, most of what has gone on in crypto has been driven by speculation. where do the real-world applications come in? emerging markets. removing middlemen. getting money to rural areas. we are still thinking about where do the ideas of today that may not have been applied well get applied in real-world situations tomorrow. climate is another area.

emily: sheila patel. thank you for sharing your thoughts. elizabeth holmes claims a key witness in her criminal case visited her after the verdict and expressed remorse about testimony. the former lab directors showed up at her home and said hers testimony was -- his testimony was twisted by prosecutors. this is just weeks before she is scheduled to be sentenced. coming up, the creator economy is booming. how this industry is changing the face of entertainment. we will talk about that, next. this is bloomberg. ♪

emily: taking a deep dive on the creator economy which has experienced a massive boom. a slew of platforms like spotify, instagram and tiktok, youtube. every minute, at least 500 hours of footage is uploaded to youtube. let's break this all done with roberto, a content creator. and mark bergen, out with a new book today called like, comment and subscribe. thank you so much for joining us. mark, give us a sense and how big the creator economy is and how much has grown on these platforms over the last several years. >> their estimates it's about $100 billion.

certainly in the past five years, it has just exploded as these platforms got involved. there are over 2 million creators in the partner program which is a smaller number than it was before, you to cut that number, gradually moving it up and particularly as they are facing competition from tiktok. emily: you were a graphic designer and freelancer before content creator. why did you make the big job change? >> great question. for me, a lot of it comes down you want more time, freedom. you want a sense of ownership of the things you are doing. when you work for other people,

it's great. it's gratifying. but, when you get to do something for your own and have ownership, you feel supported by a community of like-minded people, there is nothing in the world like it. that is what attracts people to the creator economy and opportunities like youtube, podcasting, livestreaming. emily: why do you focus on youtube in particular? >> i have been with youtube almost since the very beginning. it is still the most powerful search engine in the world. youtube has a sense of permanence with its content. it's also the best monetization opportunity for content creators. i teach content creators roughly

15 different ways they can monetize, primarily using youtube specifically. i feel that with the rapid rise of tiktok, there is nothing like the permanence and longevity youtube content creation has. if you talk to tiktokers on a regular basis, you will find a lot of them have the intention of moving to youtube at some point because they want a sense of stability, permanence. they also want the potential for evergreen to be monetize it will in the future. they know right now that while they are getting something when

compared to traditional content on youtube and livestream community, with youtube, livestreaming, podcasting, there hierarch rigidities in terms of direct compensation when it comes to brand deals and it is not even close. for me, that is probably -- emily: not even close is one way to put it. we have talked so much about the threat of tiktok to youtube. it's a lot of disconnect, less permanent. how is youtube addressing the threat internally? >> it's a viable threat. instagram and facebook have tried multiple times and failed. what tiktok needs to do is demonstrate that google -- it's

the world's biggest digital advertising company and it had machinery in place for years. tiktok has political problems and have not proven they can be a threat to youtube at large scale. youtube's response is short. they are pushing viewers and creators, it's unclear how productive that will be for the company and how they will sort out monetization. youtube has a strong track record of sorting this out, responding to the threat in a significant way. emily: roberto, you are the founder of awesome creator academy, a coaching program that helps influencers build their brands online. we have some fun watching videos

earlier today. what trends do you see, what are you telling creators, advice that might not be obvious? >> the thing that is not obvious to those concentrators is potential. overall potential when it comes to earnings and the fact it is a compounding effect from the content over a period of time. what a lot of creators don't do is they rely on platform monetization, tiktok, youtube, things like that, they don't explore other monetization opportunities and don't think of what they are doing as what i refer to as content as a service. experiment like software, which most of us are familiar with. we have wonderful subscription services that we are all paying for. content creators have an opportunity not just as ad

revenue, brand deals, they can build their own communities around their 100, thousand truest fans and have monthly membership programs whether on or off platform. they need to look at things that give them referring revenue and telling creators to look into opportunities. youtube partnered with shopify and expanded the creator monetization program with regard to march, physical and digital products, used to have a 10,000 -- emily: it is so fascinating. we have to logon and watch her videos. we appreciate you joining us. we be right back. this is bloomberg. ♪ \]

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emily: welcome back to bloomberg

technology i am emily chang, back to a check in the markets and shares of lien stocks, with an update. >> one name in particular, bed, bath & beyond that the stock falling for five dates -- days in a row. the company cfo, died on friday after falling from a skyscraper in manhattan. the company is saying that they have appointed a tier -- interim cfo, you've seen a decline more month of august that surged by 99 zeros, caught up in the stock frenzy were retail investors discuss further stocks and forums on appliances such as reddit. that decline being felt in the market. you see gamestop down 8%, amc entertainment down. the activity around the area has dropped off. if we use cool volumes as a proxy we see the fewest trades

in this space, particularly for names like gamestop in 2020. nowhere near this envy like we saw in early 2021. one look at the space as a whole and the etf which does not mean the bed -- include bed, bath & beyond. you can see the broad equity markets it has a three straight weeks of declines, concern of the fed and fire -- higher rates impacting stocks. it is interesting to see reporting on the bloomberg terminal about this idea that when we got a return to school, also meeting return to college we might see the frenzy in meme stocks pick back up, because a lot of the traders doing this are young and they are discussing this online on their spare time, that has not been the case. we have seen the negative sentiment around meme stocks containing with bed, bath & beyond being the exception, after all of this, the tragic news relating to that company. our thoughts go to the family. emily: that is tragic news, ed

thank you for the update. i want to move on to the market now, on pace for one of its worst years and decades after an incredible activity. last year, leaving many companies with few options, once the markets have come down. joining us now are street chatterjee officer -- strategy officer. last time you are on the show you said the appeal window shut and not opening for a long time. do you still believe that? >> it must've been a heck of a party at burning man because it has been quiet this morning. we normally see a stampeding of ipo news the day after labor day, everyone eager to get out there, we have barely seen anything. i am a bit surprised that post-summer there has been a low levesque video we were starting

to see some dealers discreetly and there's a bit more structure. the ipo window is still pretty quiet. emily: we are hearing that instacart for example is considering owing public this year. why would a company move -- do this now when conditions are unfavorable? >> and there is a subset of the private unicorn companies that have such a large brown and cachet that the only way to continue elevate awareness and buying smaller companies is to go public. instacart continues is to raise money in the private market if they want to have extra prominence, they are going to have to publicize markets and they created a clean path to do so by knocking down their valuation public they, having a very senior executive team including the ceo. i think of it similar to how alibaba or facebook, tougher environments but still electing

to go public. emily: how long do you think the ipo window is going to be frozen shut, as you say? what is the timeframe that company should be planning for? >> i keep pushing it out more and more. i think of what is happening now is really what happened during the start of covid but it is being stretched over a longer period of time. you recall april, may, june of 2020, ipo's word zero. it is almost a stretching out of that now. you are seeing a game of chicken between investors now and companies that are ready to go public. if you are a company that is profitable, you can wait as long as you need to. but if you are a company that elected to grow at all costs and burn cash you are going to have to become -- come to market at some point. we will see more m&a activity, strategic investors and from private equity investors, we will see opportunities, where deals will get more structure, a little less public scrutiny. we expect that to pick up quite

considerably in absence of an ipo market that is active. emily: i wonder how many more cut downs we will see. i can imagine you have a lot of vcs out there sitting on portfolio companies that have valuations that are just not right for the time. >> absolutely. what i think what will start happening is more more deals that are happening behind the scenes, deals with structure. what i mean with that as investors are getting more preferential terms for the money they are putting in a company. we saw that joker is planning to raise money, a slight valuation bump up from the last round, but it gives a 40% return to investors. more deals like that are happening. we are also hearing of shared equities as well. those will continue. there's a lot of investors that want to see some realization of the investments they made. it is becoming rare for venture capitals to raise their funds

when they cannot return capitals to the limited partners, that is creating a tense board meetings. that is something we harped on. but that remains true. emily: what is happening inside these tense board meetings? a lot of these have also raised huge funds. we don't have anywhere to spend their money? >> absolutely. the best thing you can do is, the show must go on as far as companies operating in executing and selling and realizing their vision. it may just not proliferate and show up in news articles and updates. people are still buying enterprise stocks, cybersecurity solutions, it's just we are getting fewer data points on what those companies are worth. i think at some point we will start to see some companies that will quietly exit and sell themselves to big tech which, big tech has been quiet on the m&a front. maybe that will change soon. it's going to be a quieter media period, for these companies. emily: phil haslett equities and

founder of equityzen. ming up, it has been 108 days, since the executive order. what does the government think about it? next, the president of the lodging association. this is bloomberg

emily: white house stemming from president joe biden's executive order on digital assets including one on the

future of a money, payment systems and the implications of the west central bank digital currency. these reports will not be released to the public until mid-september. let's talk about what we can expect, kristin smith, along with our co-contributor sonali basak. what you think we will find in these reports? >> i think it's interesting. this is the first time that the federal government has looked at crib no regulation from -- crypto regulation from a regulation form perspective. he gave various federal agencies financial regulators and some non-financial regulators, mandate to look at different issues to look at some of the concerns we have, but some of the benefits that the crypto industry and sector could provide and come up with recommendations about what types of regulations are needed going forward. so, i think we are going to see

a fairly balanced analysis. we will see something around competitiveness and inclusion, that the industry is going to be very excited about. i think we will see some concerns around the lack of regulation of coins, which is something that has been discussed for a time. overall, they should provide a roadmap for policymakers, to choose to accept it as they consider legislation this fall and into 2023. emily: blockchain association has had a seat at the table with policymakers. how they been processing this crypto winter in this drama? >> i think, there's an understanding that crypto is here to stay. that wasn't a concern. even in this market downturn, i think policymakers have even more incentive to try to do something in the space.

especially if you look at the beginning of the summer we have the collapse of the luna, we've had it bankruptcies, we had capital. there are a bunch of events that had big impacts on consumers. instead of pushing away from this, policymakers said, this is a space where we need to make sure we feel -- phil riegler tory gaps and better understand what regulation exists -- phil regulatory gaps and better understand what regulation exists. the bills we saw this year, earlier this spring, we have seen the digital cloud exchange act in the house, we have a new bill in the senate to regular the space. they have been generating their own ideas and i think the executive order process in congress -- and congress's effort will converge nicely to have this educated policymaking group that is looking at this in a thoughtful comprehensive way, that moves the ball forward but

not so rushed that we get the policy fog. i think we are setting the stage up to get a good bipartisan compromise and fill those riegler tory gaps. >> what about the regular tours --regulations themselves? a common fatigue i get, when i'm talking about market participants, they emboldened each of the agency separately. there's a lot of conflict among them on how they define certain issues. take the fcc and the security issue when it comes to coinbase in particular. do you see the agencies consolidating power to one agency or another? how do you believe that congress may enable that or conflict? >> the executive order did require cross agency collaboration on different topics. i did think the core issue out there when it comes to regulating the crypto market, particularly the bitcoin market, those are truly commodities, today neither the sec, has

jurisdiction. what we need is congress to come in and say, we have this commodity market, other commodity stock markets like the gray market, they don't have any regulation -- grain market they don't have any federal regulation. so, congress has a choice what is interesting is that the three major proposals that have been introduced to congress so far have all pointed to the cftc has the appropriate regulator for the crypto industry. they are to have regulatory powers over crypto futures and a fraud and manipulation and the underlying market. that is probably the place it will end up. it can also go to the ftc as well. emily: what does it mean for the sec, they are so many things that they were looking at nft's

, other security issuances potentially here. do you think the sec loses power over these markets as they already have started on this path? >> would argue they don't have any authority over the." commodity markets. they have authority over things like security. you can use blockchain based systems to issue equity to tokenized shares of stock, when you have something that is truly security the sec is going to have a role to play there. the problem is for innovators is that there is a big gray area it is hard to know when they apply. but they need is a framework that addresses the concerns. the stakes are high from a regulatory perspective, if you are deemed with purity, if you're doomed with the commodity there is no regulator at all. by having a regulator, the ftc

regulate crypto commodity there will still be market surveillance, there will be disclosures that help give consumers more information. it will not be such a high-stakes decision if something is a security or commodity issue. that will help pave the way for more constructive dialogue, if congress gives the ftc jurisdiction. emily: kristin smith, executive director of the blockchain association. always appreciate you joining us, alongside our own sonali basak. coming up, getting ready for the kickoff, 2022 nfl season starts this week. we will get in full gear with a jason robbins, ceo of ash talking about the sport for the series and the introspection of technology.

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emily: nfl season is kicking off we are exploring introspection of sports and technology. we are starting with sports betting. in 31 states, kansas being the first -- most recent to join. draftkings, contains their leadership on daily fantasy sports, market that has gone $4 billion. they're predicting this football season will be the biggest season yet. joining us to discuss the ceo jason robins. give us a status update on the numbers and how much you think nfl kickoff will kickstart and

already building industry. >> this is our holiday season, to make an analogy. this is when everything come all of the numbers go up and it is a fun time of year. a lot of work from the team goes into preparing for this. we lost a lot of features and products, in the last 90 days, including our new rainmakers, football game which i'm excited about. this one will be fantastic. i am looking forward to it. emily: you're also launching a new blockchain initiative, it will be able to collect digital player cards. how will this work? anything blockchain will be for sports? >> rainmakers is one of the most innovative things we have done ever. it takes fantasy sports, the ideas that your agm an -- you are a gm, and you get players you get, it immortalized as the

ownership in the forms of an nft the blockchain. instead of what -- buying that player you by the players nft. it's exciting because it mixes things our customers are interested in which is the game and the idea and being able to pick your favorite team or the team he thing is going to be able to win. our customers have shown in blockchain and collectibles. it's really a new way of looking at fantasy sports. we think it is the future of fantasy sports and we are excited about some of the early traction we are seeing. there are sales going off for big dollars on the marketplace now. emily: they seem to have pulled ahead of the industry in terms of market share. what is your play to counter that. >> it is seasonal, we do better in the nfl season where we have a big was to customers. if you look at the gaming side we are ahead of them a little bit. we're going to keep trying out the best products, for us. we think football is what will

ultimately win the customers over. we think the more customers we get to show when we launch this nfl season, the more excited they will be able to -- about keeping their player drafted. we will focus on customer experience. we are the most customer centric which entails having the best product and overall experience. emily: obviously bigger business has also meant some bigger losses. some competitors so they will pull back. how has your strategy changed as the market evolved? also, we are heading into a potentially prolonged downturn. >> we have always been data-driven in our decisions around spending. we look for payback, in our threshold in case the customer acquisition, a three year payback or less. we typically look for a two to

three year path to profitability timeline. i will say with some of the competitors pulling back, we are able to achieve great results without having to be quite aggressive on the advertising promotion front. we are being aggressive, it is an important time of year but we are making sure that we have a presence out there and we get in front of customers and we get good offers that are interesting to them. but i think the competitive environment has rationalized quite a bit year-over-year if you come to this time last year it is night and day. emily: we got a big election coming up you've got proposals my california could be the largest sports betting market in the world next to the u.k.. it would allowed draftkings vet anywhere in the state in partnership with native american tribes. there a number of proposals countering this. what are your polling's showing

you about the likelihood of your proposal passing and how are -- how much are you willing to spend? >> we are seeing great and the polling. there's a lot that can occur between now the election, it is two months away but everything we are seeing in the data is great. more importantly it makes sense, it is something californians want. most of them are doing it already anyway and the illegal market which has no consumer protection or tax revenue. our initiative will generate hundreds of millions of dollars year to combat homelessness and mental health issues in california. partner with tribes getting a cut of it as well. it will help the smaller tribes that are not as fortunate as some of the ones with the bigger casinos do well, and it will help with the education programs. we think it is great for the california sports bettors. it is great for those who want to help the homelessness and

mental health issues and it is great for the tribes. we are excited about it. it is great policy for california. the numbers are good but there's a lot of time between now the election, we have to keep getting our message out there, hopefully it will resonate with voters. emily: one answer, one word answer, jason. who are you putting your money on for the nfl playoffs? >> i'm a patriots fan. i will be rooting for them. there's a lot of great teams this year. i'm excited for the opening game. it's a good season. nfl content has never been this good. emily: great to have you, we. are at apple tomorrow. you will not want to miss this up -- this special show. this is bloomberg ♪

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