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

francisco and this is "bloomberg technology." coming up in the next hour, amazon gets pummeled after predicting a rough holiday shopping season ahead. shares falling more than 20% at adding pain to an already one point, hurting tech sector. plus apple revenue beat , estimates, but shares drop with a strong dollar weighing on results. we are going to have all the details. and we are getting a glimpse into elon musk's vision for twitter, including his hope to avoid a quote free for all hellscape. but first a volatile day leading to apple and amazon out after the bell. our ed ludlow here to break it

down. ed: you said it right. absolutely punished. amazon is gettingabsolutely punished. its forecast for revenue significantly below what the street was looking for. to $148 billion. $140 millionthis street was looking for 155 billion dollars, but also the operating income is weak, and that is putting it mildly. we have been saying all day that companies this earnings season either live or die by their outlook for what is to come in the final three months of this year. compared to others, this is very weak. apple down by 1.3% in after-hours, paring some of its earlier losses. but it was the iphone sales that came in weaker than expected, along with services. overall, a beat on revenue and eps in the quarter but there are currency headwinds. if you look at powershares qqq, down 4% in after-hours is a big

mover this etf that tracks the s&p 500. we expect ripples in friday's session to be felt more broadly. meta, the story of the day this thursday, its biggest drop since february of this year. the stock closing at its lowest level since january of 2016. the real concern the growing , expenses year on year into 2023, which meta outline between $96 billion and $101 billion, the opposite of what investors have been calling on mark zuckerberg to do. on a more bright note twitter, , we are inching closer to the close of this deal. we have reported in the last 10 minutes that tesla engineering talent have been inside twitter san francisco headquarters this thursday, evaluating and assessing the underlying code that powers the platform to help elon musk understand it. there have been meetings they are calling code paring, where you work on it together, but signs from both sides, the debt side and equity financing side

and what i am hearing from sources, we will get a on close of this deal friday, as expected. emily: ed ludlow, great reporting. i want to dig into those amazon results. shares tumbling in late trading due to a holiday forecast that came in below expectations. rachel tipograph, ceo of tipo, mikmak, a platform that helps joining us to unpack the companies to grow results. not a warm and fuzzy outlook for amazon this holiday shopping season. what is your take on these results? is this inflation or a broader downturn looming? rachel: macroeconomic factors are impacting everyone. at the end of the day, net sales did increase by 15%, which was in range with what the executives were expecting, but not what the street wanted. i think a big focus was focusing on what would happen during the first-ever prime early access

event that happened in october. over 100 million items were sold. all of a sudden, amazon was able to move excess inventory. it showed despite inflation, consumers were ready to shop. as long as it was about value and convenience. what we saw at mikmak is that the categories that performed strongest during the sales event were health, personal care and grocery. not necessarily consumer-electronics or toys. what this continues to show is consumers are willing to spend, but spend on necessities. emily: so it sounds like you are a little more optimistic than the typical doom and gloom forecast we have been hearing, that said on the back of not so great results from microsoft, alphabet, meta, could it all get worse than we think? rachel: i think that amazon is in a very unique position to eat those other companies' lunch. the reason why is if you look at

amazon's advertising business in this past quarter, it grew over 25%. it's now the third largest player in advertising in the u.s. this is significant. the reason why is that changes in ios14 that negatively impacted alphabet and meta are benefiting amazon. amazon has so much first party data. and they own their dsp, and they built out self-serve capabilities that cater to the small and medium businesses, so they are in a position right now to significantly grow their advertising business, which has incredible margins. which can offset losses in other parts of the business, while platforms like alphabet and meta are struggling. emily: how is this impacting the brands that you work with, and obviously you help them grow businesses and partner with the health of amazon and other big e-commerce companies?

rachel: we work with huge consumer package goods companies, and these companies understand that during trying economic times, you cannot stop spending. you can look at proctor and gamble, you can look at coca-cola, over their 100 year history they always spend during trying times, and they always come out ahead. that said, cfos at those organizations want every single dollar to be able to work really hard. and that is why amazon is in a unique position, with its advertising business during this time because it has a really really strong return on investment. and so, right now what we are seeing across fortune 1000 consumer packaged good companies is that if they have a dollar to spend, they are often moving it into environments like retail media, where there is guaranteed roi. emily: you have interesting thoughts about buy now, pay later and how that might have

made the current consumer situation worse. can you share that? rachel: yeah, absolutely. if you look at 2020 and 2021, which honestly within commerce our anomaly years, we always guide our customers to look at 2019. but in 2020 and 2021, many consumers were trained to essentially spend money that they do not have. as interest rates have risen, all of a sudden consumers are recognizing that that buy now, pay later value proposition will put them in major debt and cost them so much. and so i share this because there was a lot of fake money being spent in the ecosystem. and if you remove that, all of a sudden very quickly you will see trends that look more like 2019. in the long run, i think this will benefit consumers because

hopefully it will prevent them from going into deeper debt or debt altogether. emily: alright. rachel, tipograph founder and ceo of mikmak, really interesting insights from you. thanks for sharing all of that. sticking with amazon the , national labor relations board's has the ceo of amazon violated labor laws when he told me this about workers earlier this year. >> we happen to think that they are better off without a union for a number of reasons, including the fact that it is much harder when you have a union to have a direct relationship with your manager and to get things done quickly. emily: the complaint against him follows a number of big tech union votes from workers and in a statement amazon says the comments lawfully explain amazon's views on unionization and the way it could affect at -- the ability of employees to

deal directly with managers, and they began with a clear recognition of our employees' right to organize and in no way contain threats of reprisal. we have to dig into apple results. the tech giant posting weaker than expected iphone sales in its latest quarter. a principal analyst at forrester research is with us now. julie why are investors so , seemingly unhappy with this report? julia: it is hard for me to say why investors are so unhappy with this report. but one of the things i look at more broadly is it is not their big quarter. they got product out, even though consumers could order products. there were still a lot of delays in shipping. they just announced a new tablet lineup next week. that quarter will be what it is going to be, but it is important for every consumer electronics manager is the holiday season. at that is what is most important for them in the rest of the year. emily: let's talk about that.

some words from tim cook here. he says, "as we head into the holiday season with our most powerful lineup ever, we are leading with our values in every action and decision we take. we are deeply committed to protecting the environment, security and privacy, and creating products and services that could unlock humanity's full creative potential." when you look at what is available this holiday season, the way that they are keeping many of their prices the same, how optimistic are you that they will be able to move a lot of product? julia: i have optimism. forrest just put out there holiday forecast and we are forecasting an increase in online spend of about 14.6%. when we surveyed consumers, 18% said they will spend more this year than last year. on the flipside we still have , about 40% saying that they will spend less. when we talk to consumers about how they are feeling about the economic headwinds, we do have, depending on the question you

asked, between 39% and 41% of u.s. online consumers saying that they will delay making purchases, that they are worried about the economy, that there are things they will pull back on. and just not making purchases and they want to make. if you ask them about how they are doing, 50% are worried about the economy, worried about their money. and definitely expect to slowdown purchasing this holiday season. it will be a question of what is that mix. is the 18% the affluent apple relies on? it will still be a good holiday season, but it may not be what everybody wanted it to be as we look at forecasts from earlier in the year. it will be a tough season. emily: china has been a huge market historically for apple. tim cook was the architect of apple's china strategy and we are in the middle of a potentially history-making decoupling of the u.s. and china. how is apple handling that and how much will it impact or hurt

apple over the longer-term? >> that is always a hard question because the devil is in , the details. one thing that has been interesting about watching china from a consumer standpoint is the chinese are still far more in lockdown than we are in the united states or europe. so there is more consumption of online media, virtual worlds. we are seeing far more interest in things like the metaverse streaming media, things that , keep them entertained at home. it is hard for me to say what will happen in china, but it is a very different environment than we have in the u.s. in terms of our mobility and how much we're depending on media and electronics to keep us entertained. the ability to work, stay in touch with family and friends and so forth. so it will be interesting to watch. emily: i have to ask about the controversy of changes in apple's ad tracking policies, meta hitting back with how much

it is hurting them and other social media companies. you have got the skeptics and critics saying apple is not doing this to protect privacy, but to add to apple's own bottom line. what is your take? julia: there is a little bit of both, but i do not know that anyone is crying for, you know, apple or google's diminished ability to monetize the data of consumers. these companies have grown wealthy by doing so over the past couple decades by doing so. as we are looking at the values consumers have, you know, tim cook hits on them one after the other. it is about privacy, security and responsibility. and it is about the environment. it is about trust. if you look at the things that clients are asking about, it is all of those. it is trust, the economy, being green, security and privacy. and i think that is really the long game. do i think advertising will contribute substantially to apple's bottom line in the next five years? i would be surprised if it gets

to be that big. this is about apple -- emily: right, i understand. always great to hear from you. five president and principal analyst at forrester research, they do so much for stopping by. we are listening to the apple conference call and we will bring you more headlines as we get them. coming up musk's message to , twitter advertisers and what we are hearing about his visit to the company headquarters. that's next. this is bloomberg. ♪

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>> elon musk has both tried to acquire and walk away from acquiring twitter. here is how we got here. april 4, a regulatory filing reveals elon musk has rapidly become the largest twitter shareholder. april 14, in a s.e.c. filing, muska says he will buy out stockholders in a cash deal and take twitter private. the offeror valued at $43 million is a 54% premium over the price in january. may 17, after elon musk and the twitter ceo have it out, muska tweets he won't proceed unless twitter can prove bots are less than 5% of its users. july 8, elon musk backs out of the deal, saying in a filing that twitter made misleading representations over the bots issue. july 12, twitter sous musk to force him to complete the deal.

musk countersues. october 4, after a trove of inner circle techs are revealed in court filings, elon musk revives his bid at the original offer price, potentially avoiding a courtroom fight. october 6, the delaware chancellery judge pauses the case, giving the parties more time to complete a deal. on 5:00 p.m., it hard deadline is set, otherwise the trial resumes in november. emily: just some of them musk twitter saga we have been living through most of the year but finally this deal seems imminent. in a tweet to advertisers, musk said he wants to make twitter a town square with highly relevant ads and less of a free for all hellscape. we are bringing in sarah frier. our latest reporting is tesla engineers have gone to twitter headquarters to review their code, and that the twitter code has been frozen ahead of a pending deal, so no changes can be made at the 11th hour. what is the latest?

sarah: it looks to us that the se tesla engineers are there to review the code, to help elon musk assess it and to think about what needs to be done. companies that have been around for as many years as twitter has, their code can be confusing to newcomers, so he is bringing in trusted folks from his company, tesla, which he also runs. just in terms of the note to advertisers this morning, i think elon musk is trying a little bit of a reversal of what has been said out there about what he is going to do. we all know he has this free speech plan for twitter. what that is going to mean is loosening up moderation standards and bringing on content that could make advertisers uncomfortable. so i am not exactly sure how he is going to do both things at once. as i wrote today, you can't have

a commercially viable social network, one that advertisers want to buy promotions on and people want to join, without some level of content moderation. there has to be some line that he will draw, and he will have to figure out what kind of balance he is comfortable with. emily: how are twitter employees feeling about it? we know he was at headquarters yesterday. there was this picture posted of everyone gathered around him. some people were smiling. it did not look so potentially doom and gloom. of course, you can only get a few people in one photo. how are twitter employees feeling about this, given he said that there are reports he might cut up to 75% of the workforce? he is bringing in engineers from another company to look at the code. >> last night he told twitter , employees he does not plan to cut 75% of the staff. he claims he does not know where that number came from. of course, as we previously reported, it came from his own presentations to equity investors.

so, i think that there is a lot of maybe putting down the hatchet. and all of this tension between musk and the board twitter and , elon musk, you know, coming to a place where they can work together. where he can work with their partners and advertisers. where he is saying, i come in peace. i'm going to be the boss here and i am going to care about this. he comes in with this perspective, or at least he says in his letter to advertisers, that he is doing this for humanity. he has a grandiose vision for what twitter can be under his watch. and i think that that kind of messaging actually does appeal to twitter employees. they tend to say when you talk to them that they are in it for the impact that can have on the world, on our culture and on our politics. like, they can make a difference. so, i think that is historically why people have joined to twitter and not may be other big

tech companies that might pay them better. so, it will be interesting to see if musk can actually come in peace, even though he will certainly have to change quite a bit, cut staff, and dramatically pivot the company in his vision. emily: he is talking to employees, walking around with a kitchen sink, give us the tick-tock of the next 24 hours -- when does the deal get sealed? we are already reporting that arch capital will replace twitter in the s&p 500. sarah: it is a matter of time before the shares stop trading on the open market. that will be our first public signal, perhaps, that the deal is done. we are also looking at filings that might happen in delaware. whatever is being signed right now, like when you buy a house it is not final until you get the keys.

all these little steps have to be done before we can say the deal is closed. but it looks very much on track right now. there are unlikely to be, i say this with a grain of salt, right? this has been quite the saga but there are unlikely to be stumbling blocks between now and 5 p.m. on friday eastern time which is when the charge at chancery court said this needs to be completely complete she five. wants the email in her inbox by 5:00 p.m. saying this is done, we don't need to go to court. emily: some people may not be getting sleep tonight, and i hope one of them is not you, sarah. thank you so much. we will be right back with more of "bloomberg technology," after this break. this is bloomberg. ♪

emily: microsoft out with its

first ever report on median pay for its workforce. it shows women do better than the u.s. average, but black and hispanic employees remain underrepresented in higher level roles. and microsoft's employees of color, overall, make less. tesla is facing a criminal investigation into its self-driving system. the u.s. justice department is investigating whether the company made misleading claims about tesla cars' ability to drive themselves. the dow jones reporting the sec is probing tesla as well. coming up, what does the consumer want in the inflationary environment? we will talk more earnings with shopify's harley finkelstein. this is bloomberg. ♪

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emily: welcome back to "bloomberg technology", i'm emily chang in san francisco.

let's get back to the after hours action, apple and amazon. back to ed ludlow, investors seem to like what they are hearing from tim cook on this call? ed: they were liking what they were hearing from tim cook. the stock dropping suddenly, it seems to be the headlines crossing that they are not giving revenue guidance because of uncertainty in the macro picture. total company revenue growth will decelerate compared to the fourth quarter, the fiscal fourth-quarter, and macro revenue declined substantially in the fourth quarter. those are not things the market likes, apple now down 2.6%. there is a pocket of strength, which was the macbook, a lot of buyers of the macbook were first-time buyers perhaps because of cutting edge technology. this is what tim cook had to say about that. >> our mac customers have been

raving about the power of m2 since the arrival of our newest macbook air and macbook pro this summer. there incredible long battery life, stunningly rich display and lightning fast speeds are a signature part of the mac experience and helped drive an all-time record revenue for mac during the september quarter. ed: that's the story of apple so far, we will bring the latest as it crosses the bloomberg. the story of amazon, we know the investor base is not impressed with this outlook for the fourth quarter. how often have you heard amazon say macroeconomic conditions are tough? that seems like a card you play when earnings are not very good. hat tip to editor nick turner for that one. an interesting bright spot, after hours intel is a little bastion of hope, it is up 3%. revenue is not good but there is basically a pledge from the company to cut costs, be

financially disciplined get this , company back on track and investors seem to be buying the story with that stock, up almost 4% in after-hours. we will keep an eye on that one, too. emily: ed ludlow, thank you, i want to dig in now to shopify's results bucking the trend with shares rising the last couple of days after their numbers came out. shopify president harley finkelstein is with us. so harley, how did you manage to buck the trend, what is shopify doing that everyone else ain't? harley: we are happy with how things came out. the big takeaway is that the role shopify is playing in the lives of merchants is not that of a typical software company. one of the things i mentioned on the call quite a bit was the merchant services attach rate. that is the amount of services and the value we create for merchants. the big difference is we are not just an e-commerce provider anymore. we are a retail partner with

physicals retail, we are the logistics partner, and with audiences we are now their advertising partner in some cases, too. so we saw a 2.4% working attachment rate in q3. that was really good. on the revenue side, revenue came in at $1.4 billion. but i also think what the street and investors wanted to see was operating discipline. we saw adjusted gross profit of over 86 million dollars. that is up 11%. when they see that plus year on year declining operating expense growth, and $5 billion of cash on the balance sheet, they see shopify is a long-term durable company. emily: investors are looking at this as potentially a sign that shopify's worst days are behind it quote-unquote. it's been a tough year, you have had job cuts, inflation is

weighing on everyone, is the worst over? harley: shopify was this incredible covid story. march 2020, physical retail shuts down permanently and all these physical retailers moved online and most did so with shopify. what most missed was that the trust we built in the covid period meant that now that stores are reopening, they are now using us to replace their existing point-of-sale systems as well. the second issue is, talking about some of the macro trend of the consumer, this idea of omni-channel is now steady state. the best most modern brands need , to sell everywhere, online, off-line, online marketplaces. doing so with a regional operator like shopify gives them the tools to do so. i don't know what will happen in terms of the larger economy in the future but september was a good month from a consumer spend. it looks like october looks pretty good, too. our merchants are getting set up

for a good holiday season and we want to be there to support them on that. emily: investors were not happy with amazon's results. their holiday forecast was not great. what's your read on that and what it also could bode for shopify? harley: we are dealing with an inflationary economy, no doubt about that. what is certain is that the direct to consumer business model where brands manufacture and sell directly and there are no intermediaries, there is more margin, there is room for inflation. so the direct to consumer model operates in this environment better than a third party seller might who is already operating on razor thin margins. but so far, you look companies just this quarter, spanx or alo yoga, these brands on shopify are doing really well.

we think the consumer remains strong, but we will see what the holiday season comes from. the most important thing is we are there to support them no matter what they want to do. emily: you had been at vuori. harley: great brand. great story. emily: let's talk about your logistics and fulfillment network. obviously you've been developing , that, where does it stand now and what are your ambitions when it comes to investing, and potential acquisitions? harley: we've made a lot of progress. the goal is to build and to end logistics networks. your product is made at the factory to when the consumer gets it, we want to handle that for all of our merchants. the key is we want to make it so that when you use shopify fulfillment network our , logistics product, you don't have to think about logistics. the key thing i mentioned on the earnings call is shop promise,

this idea that when you use our fulfillment product, you can provide an anticipated delivery date with certainty to your consumer. in early testing of shop promise, we know consumers will spend more hit higher when they know when to anticipate. we are trying to build out like -- so that our merchants would have to think about logistics, we will take care of it. second, that they can provide in anticipation of when the product will get into the hands of consumers. we've made a lot of progress there. this was a partnership we have with flex port, from port to fulfillment we acquired a company called deliver that does balancing frankly better than anyone on the planet. third, from the fulfillment center to the end consumer, that is where the shop fulfillment ramps up and we have partners all over the u.s. using our software, our robotics technology from six river system. and we are creating this logistics network. we are making a lot of progress but the key really is the shop promise, to give everyone the same tools that frankly amazon

has with amazon prime, and we think we can do that. emily: in person shopping is back, and i can imagine back even bigger this holiday season. how is shopify prepared to adapt, and what are you planning for? harley: you're 100% correct it is back. it went away obviously during the pandemic, but we always believed the future of retail is going to be retail everywhere. it will be about consumer choice. the consumer may want to buy online or off-line, on instagram, snap, tiktok or in person. those are the tools we have been building. what you saw this past quarter, you saw 35% increase year on year of dmv on point-of-sale. at the same time large companies have replaced their e-commerce systems with shopify. but also this quarter alone, more than eight retailers with more than 25 locations replaced their existing traditional point-of-sale system with shopify.

we had one merchant of ours who replaced us in 175 locations. we are really scaling up with point-of-sale pro to help larger retailers with lots of stores replace and modernize their in-store experience. is if you are a consumer and you buy something online, then you went to the store a week later, they should have the same set of information. one set of customer data and inventory. the idea of omni-channel will be like talking about the color tv. a few years from now. you don't say color tv because everything is basically a color tv. everything will be omni-channe by default in the future. emily: shopify president, harley finkelstein. it will certainly be an eventful holiday season. that at least we can say. coming up, we are seeing a decoupling between crypto and stocks, why? we'll discuss. this is bloomberg. ♪

emily: ethereum is transitioning to low energy consumption at a time of crisis. which could and maybe should in turn bump up demand and adoption. sonali basak joins us now from new york to explain. do you explain -- >> there are questions about the merge date for ethereum. are people trading ethereum more on the fundamentals than the

macro story? the answer is if you look at since the merge, it is flat to down. but in the last one-month period it is up nearly 15%, it is up pretty significantly over a seven-date period. so you are seeing positive impacts on ethereum when it comes to pricing. one of those reasons is that people believe there is more deflationary impact when it comes to ethereum. that means supply is more pressured which would have impact on the pricing. bloomberg intelligence has more information about ethereum, they are positive on the trends in terms of usage over the longer term. remember the reason i bring this up, emily, is when i talk to my sources not just in crypto but the banking industry, they are watching ethereum closely on what it could mean in terms of the next cryptocurrency that could really form a backlog to the financial system. the more you see ethereum succeed, the more you see traditional players also more comfortable with the network itself.

we should also turn our attention to what this means for the broader network. the idea that people are trading more on fundamentals and less on the macro story is really important to a lot of large investors. there are questions about how that is starting to form in the market, especially as you're seeing more macro hiccups come to the forefront, and inflation as sticky as it is. emily: bitcoin had a couple of strong sessions earlier this week, it is back above 20, and yet we have had several guest on this show saying it is going to go down to 12 or 13. is it really decoupled from the rest of the market, or is this just a blip? >> to your point, it is held above $20,000 and has faced pressure in the last 24 hour period. $20,000 is an important psychological level to hold on. when you talk to folks surveyed by bloomberg, people really say that it's not going to break in

or out of a very large range. $12,000 would be lower than that range, so if it drops to that point you have a lot more psychological issues when it comes to trading bitcoin, especially barring any large leveraged event like you saw earlier this year with three arrows or anybody else. to your if it were to fall that point, much, it would be concerning but you have to take note that you saw massive tech firms report earnings that were very disappointing. yet bitcoin holds up generally in the face of that. when bitcoin has been trading correlated to the nasdaq for a while. i will refer back to dan moorehead in a note he put up with pantera a couple days ago that crypto has traded in low correlation to the s&p for most of its life but in the last eight months, it was very correlated to the nasdaq. and he says, there are risk assets struggling. but there is a world where blockchain does well. the s&p was down, treasuries are

down, the galaxy crypto index was up 3.7% in that same timeframe. again, near-term signs of decoupling, does it hold is the main question for the market. emily: bloomberg's sonali basak, as always, appreciate it. coming up, more earnings, overstock, we will talk about that and more with its ceo john johnson. this is bloomberg. ♪

emily: more earnings today. including overstock missing estimates in the midst of rising inflation. i want to date -- date -- dig

into the numbers and e-commerce trends with jonathan johnson, the ceo. they do so much for joining us, earnings beat but we saw revenue dropped more than 30%. what is driving this, inflation? is it this pending downturn? john: it's a lot of things. lapping pandemic numbers where we grew really well. it's a very promotional environment. many of our competitors have too much inventory and are working to liquidate that. that makes the environment more difficult. and of course, there is inflation and rising interest rates. when interest rates rise, housing sales go down, that hurts our business as a home furniture retailer. lots going into it. the good news is even with all that headwind, overstock is profitable for its 10th consecutive quarter. we've got a very asset-like business model that works when

the jolts help us, and when the jolts are against us. emily: how is overstock responding? there is criticism that growth in advertising is overshadowing bread and butter retail on the website and that there are too many promos. john: in a highly promotional market, where competitors are holding more and more sales, we have to be there. our view is we're always going to provide smart value to our customer, which means the best product they can afford for the amount of money they are spending. really quality product. we promote. we are also in the middle of launching a new marketing campaign that associates our brand more with home. we are a 100% home furniture and home furnishings company. we got a new ad titled "come on, get comfy," we've got social media brand ambassadors that have signed on really pushing our mobile app.

there is a lot of marketing from our push oversight overstock , sales that are not just promotions. emily: let's talk about the broader landscape, amazon's stock was pummeled today, not a bright forecast for the holiday quarter. i'm curious what you make of that and if you are expecting to feel similar trends. john: it's a very competitive market in a tough economy. our top line sales were down year-over-year significantly, we're not pleased with that. but it is incumbent upon all businesses when that happens to manage the bottom line and make sure you are profitable. the way i view today's economy it is like we are hiking down to , the grand canyon. and we are going to have a long hike up at some point. in order to hike up that north rim, every hiker needs energy

and fuel, and for a retailer that means you need lots of inventory and a strong balance sheet. overstock has both. i think that bodes well for us in the future. emily: let's talk about inventory because you have been diversifying products, and i'm curious how well that is working out, for example, when amazon diversified return rates went up. are you getting more returns and how would you say your return operation compares? john: we have actually been focusing. we went from being a general merchandiser, and over six quarters we got rid of everything that wasn't related to home. we are really a home furnishings company. during the last three years, we have doubled the amount of home product we have on site. that doesn't mean tens or hundreds of thousands more, it means millions more products. we have always been good at managing returns on home furniture and furnishings.

the difficult thing to do, we think it is one of the characteristics that sets us apart. we are all about easy delivery and support for our customers. they know that if they buy something from us, they are going to have a good experiences on the back end that's going to be delivered well and on time. and if for any reason they want to return it, we are good at facilitating that return and we are getting even better with our partnership we are piloting with ups right now. emily: give us a status on the supply chain issues is the worst , behind us? john: i think most retailers are flush with inventory. we are flush with inventory, too. that piece of the supply chain is not a concern. if customers are worried about getting product on time for the holidays, if you come to our

site, if you push click to order we are packing and shipping that day or the next. so there are no worries there. on the supply chain front, stuff being manufactured overseas, that supply chain is running fairly smoothly. container costs have gone way down, ports aren't clogged like they were before. the place where there are still supply chain constraints is from the distribution center to the customer. that's mostly a customer expensive because of higher fuel, more surcharges. that means it is either being passed on to the customer or in our case, eating part of our gross margins. emily: what are going to be the most popular items this holiday season? john: we've got a lot of inventory. we're -- one place we're particularly deep our giftable

products, lots of home appliances. big brand names like kitchenaid, mr. coffee, cuisine art. these are highly giftable, we've got lots of them. the other products that have been selling well recently are things that have to do with home improvement. people are staying at home and they want to spruce it up. we've been selling lots of home improvement products, things like bathroom vanities. emily: some gift ideas, too that i hadn't thought of. john johnson, ceo of overstock, thank you so much for joining us. and that does it for this edition of "bloomberg technology". friday, we've got ross gerber, he will be talking about elon musk and more, a big tesla investor who wasn't such a fan of twitter. and we will give you an update on the deal. this is bloomberg. ♪

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