last few seconds here. quick thoughts on where we stand right now? >> market fully embracing this idea that taper is not going to hurt this bull market. it's not connected to where rates are going higher, and powell kind of walked the line pretty well. >> s&p almost touching up 20% for the year tech check starts now. >> developers, developers, developers, dwemers. developers, developers, developers, developers yes. >> good friday morning welcome to "tech check." i'm carl quintanilla ahead this hour, apple blinks

and it's a win for developers. maybe changes coming to apple's revenue model. then china tech stumbling a again. more pain thanks to additional rules out of beijing >> later, peloton powers down. investors fear the run-up in that stock may be over in the meantime, record highs for the nasdaq and the s&p after powell's speech at jackson hole. as the taper tantrum at least certainly has not arrived yet. julia. >> and let's start with apple's big update the company announced it will allow app developers to contact customers for payment outside of the ios app. apple developers can now use information obtained from apps such as email address to directly communicate with customers and avoid apple's notorious 15% to 30% fees. now, this change comes as part of a proposaled settlement to a class action lawsuit, that suit alleging apple monopolizes its

app store and overcharges for commission and we should point out that this is separate from apple's ongoing lawsuit with epic games. so deirdre, what i'm really curious about is whether this turns out to be really meaningful for apple's business or whether this is perhaps more of a strategic move because apple is facing so much regulatory oversight and scrutiny of maybe whether it's too big and powerful >> yeah, i think this is strategic, julia and carl. apple knows that what is key in the payment ecosystem is reducing friction, and this really does none of that if anything, it kind of adds another layer by asking developers to email their users, input their payment information again. one very, very small step, but who knows? i mean, this could be just the first step we know that there is just so much scrutiny around the payment systems within the app store, perhaps this leads to more >> yeah, morgan stanley's point is there's no change to the fee or in-app payment methods which in morgan stanley's view renders

this pretty toothless in their words. it does mean, of course, they can communicate with users via email, but they make the point that involves a lot of friction and is probably unlikely to change user behavior in a big way. >> yeah, certainly, carl there's a big difference between enabling app developers to email their users rather than to communicate with them directly within the app and get them to go from there to paying them directly and avoiding those fees now, our next guest slamming ap apple's new changes in the settlement, saying quote, this offer does nothing to address the structural foundational problems facing all developers large and small. undermining innovation and competition in the app ecosystem. joining us now, executive director of the coalition for app fairness, megan. thanks for joining us. i want to play devil's advocate here for a minute. it does seem like this kind of opens up the garden in a way we have never seen apple do before, right? >> you know, thanks so much for

having me. i have to disagree this is really a settlement offer. nothing, as you mentioned, to really address the root causes of the problems that developers large and small continue to face as part of the apple app store >> but what do you think is being overlooked here? what is the piece that you think would really make a difference is it about allowing developers to communicate more directly with their users within their apps and say, hey, click here and pay and avoid the apple app store fees what is the issue? is it about avoiding the app store fees entirely? because that seems unlikely. >> i think there are a few different root issues here one which you pointed out, this does nothing, allowing developers to communicate with their customers about a lower price outside of their app is quite frankly not a concession and further highlights apple's total control over the app marketplace, so that's one

issue. the other issue is, it does nothing to address the in-app requirement to use apple's in-app payment processing system and third, it really does nothing to address the exorbitant app tax that folks continue to pay when they're using apps that make their lives better on the daily basis. >> meghan, i'm with you here, it's deirdre i don't see this as much of a concession at all. it doesn't do anything to reduce that friction. however, could this be a first step as we're seeing so much scrutiny and there are more lawsuits you have very big companies like epic coming out against apple. does this at least give them some ammunition in their fight >> you know, i think that this is really -- it's hard to see the substance behind this, deirdre. i think as i keep referring to it, it truly is a sham it's, you know, apple using this as a pr stunt and not really quite frankly focused on the

solutions. you know, i think we're seeing important movement worldwide you know, there is bipartisan, bicameral legislation that has been introduced in congress, and in the house by representatives johnson, bach, and cicilline and i think those are important steps. we're also seeing movement worldwide, if you have been following, in south korea. they are poised to consider an important bill that would address in-app payment, the requirement of in-app payment processing systems on monday south korea time so i do think this is, you know, very much indicative of apple feeling the pressure, but like everything else, it's truly a part of their gate keeper role to really control the rules of the road going forward >> i wonder what you make of this fund for small developers

$100 million, which doesn't sound like a lot of money for apple. what do you think would have been serious money for apple >> i mean, that's a drop in the bucket when you're talking about a company like apple and quite frankly, the legal fees are coming out of that $100 million. so you know, at the end of the day, that's really not a whole lot of money developers are poised to get a $250 check that does nothing to encourage innovation and business growth generally. >> you know, what's interesting to me, meghan, is we're awaiting the ruling on this epic lawsuit, that epic suit has been so closely watched. i believe that the same judge who is going to be making that ruling is also going to be the one to oversee this class action settlement and i'm wondering if you think some of the things we're seeing here in this settlement are going to be part of the ruling in the epic case and how you think what we have learned about the settlement could impact what's to come in the deals that apple makes with its developers.

>> you know, i can't comment on the case the coalition for app fairness is not involved. obviously, epic has won many valued members of the coalition for app fairness, but i think the most important part of the recent developments and any of the developments that came out of the epic trial is we received confirmation time and time again that apple is acting in their own interests. and it really brought to light the public dialogue some of the consistent problems we see going on with the apple app store, and it's quite frankly, i think this is just the latest step. i can't speculate in terms of or do i have a crystal ball in terms of how the judge will rule in the epic trial, but i think the epial trial is one of many developments that continue to really influence the digital marketplace. >> well, certainly a topic we're going to be continuing to follow meghan, we appreciate you fall

joining us we'll watch the ruling on monday and of course for the epic ruling deirdre. >> now we have talked about the rush out of chinese equities over the last few months due to the government crackdown there the hang sang tech index down more than 20% since june, and this morning, the journal has a new piece saying chinese regulators are planning to ban all u.s. ipos for data heavy tech firms in the midst of the sell-off, some investors are trying to buy the drop, and there's this william blair just announcing a china growth equity fund this week you heard that right joining us now, the portfolio manager of that new fund, vivian lin thurston, thanks for being with us today. why now, when there's so much uncertainty? i just brought you that headline from the journal suggesting that beijing is far from done with its crackdown. >> thank you for having me here

today. if you think about chinese equity as an asset class, it has evolved and developed tremendously, especially in the past decade. chinese equities not only one of the largest asset classes in the world by market cap, together about $16 trillion, it also is one of the most exciting, interesting investment opportunities from the bottom up perspective. we continue to see that the long-term investment case on china equities remains unchanged. and in addition, the accessibility to chinese equities for global investors continue to broaden and to open up so you probably heard of that now global investors can access domestic stock exchanges, shanghai and shen sjeng through the connect program, so we believe the further opening up of domestic markets will make china even bigger representation of the global indices. for example, we think they can account for about 35% of the weight, and at one point was as

high as 40%. so despite a surge in developments in recent times, we believe this long term investment case on china remains unchanged. >> sorry to nurpt t rupt you what is your strategy here are you investing in some of the big tech names we talk about all the time like alibaba and pinduoduo? i'm looking from your top ten holdings and they're more connected to names we don't talk about as often is this a play on sort of government regulation, that companies that perhaps beijing is taking stakes in and helping to become winners at the expense of others? >> first of all, yes, we do invest into cross the board, all chinese equities including the ones listing outside of china. but the timing of this launch actually not related to what you mentioned. as i mentioned earlier, this is a long term evolution of this asset class, and the natural evolution of our own investment

capabilities perspective. we have been having the china investment since the late 1990s, and at the same time, we launched the dedicated china domestic strategy back in 2013 and recently, 2018 so on the topic, it sounds like the timing is interesting, but this has been a very natural evolution of what we have been thinking about this investment case and also the asset class. >> vivian, you mention msciem, and there was a period not too long ago where pressure was on them from u.s. politicians to distance themselves from chinese equities are you saying that political pressure domestically is going to abate and not come back >> it's very difficult to predict from the political perspective, but i would say that msci looking at the mechanism and also the evolution of the asset class from the fundamental perspective and also holistic perspective to look at the importance of the weighting of a certain country

so i believe from that perspective, as i mentioned earlier, chinese equity as a whole remains attractive and unchanged. we'll see how that inclusion will continue to evolve from this point onward, but i believe fundamentally speaking, it will be aligned with the same kind of thinking as i just mentioned of the overall chinese investment case >> vivian, it's so interesting to me because obviously there's so much uncertainty still. but also, this sense of a government crackdown on innovative leaders such as jack ma there's a fascinating profile of him in what's been going on with his relationship with the government in the "wall street journal" over the weekend, and with all of that in mind, i'm wondering if you think it will cast a pal over the next generation of innovation and multiple years if you think entrepreneurs will be less incentivized towant to invest in building within china with all of these different pressures. >> yeah. yeah, those developments definitely raised those kind of questions. but if we look at the evolution

of chinese policy or how the recent development comes through, we don't see this as a major deviation from what we have seen as china as a system so china is different than the rest of the world. it's a combined system between a top-down manage members and bottom-up market driven economy. this system has not changed, but the policy focuses of the government will shift from time to time. so in recent times, we see more and more of those policy focuses. the technology related industries but on the other hand, we're also seeing other technology industries such as the hardware, the high-end manufacturing, they get a lot of support from the government to some extent, this is a natural kind of development of the system has been always the case since we have been investing in china to mid to late '90s, but we do want to make sure that we continue to understand from our framework,

our investment process perspective, how to factor in those risk developments better and to further understand those risks impact our china investment and investment case >> vivian, will we start to see or continue to see the chinese government take stakes in some of china's biggest and most successful companies there was a report that it took a 1% ownership stake in bytedance. what does that kind of state ownership do to the long-term prospects of these chinese companies? and the most successful ones like alibaba have historically been able to operate independently. >> yeah, the prospect of those companies in our view that remain unchanged, as i said, because the bigger picture view is still china pro growth, china is pro innovation. but in terms of all those recent developments, as you just mentioned, i think on the margin, i do feel the policy developments become more tied to

understand how those large corporations operate, especially related to some sensitive areas such as data security. so i don't see this as a change of direction in terms of all those industry or the government's view and how to support those industries over longer periods of time, but we do want to make sure that we continue to monitor the developments and to understand what this intel is in the future, but as of now, we don't see the promise of growth and innovation change. >> we'll see we know things are moving quickly over there thanks for being with us hope to have you back again soon >> thank you for having me still to come, forget its products peloton is trying to recall investors this morning we'll tell you why that stock is down so much today that's next. >> big hour of "tech check" is just getting started

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let's get a gut check on shares of peloton. a two-month low as shares down

9% got a bigger than expected loss, they guide below, and it's disclosing it's been subpoenaed for documents related to injuries that customers received on some of its equipment let's bring in james hardeman who downgraded the stock to neutral back in july james, good morning. thanks for the time today. >> morning thanks for having me >> big debate this morning about whether or not cutting prices is smart in this environment. where are you right now? >> yeah, i mean, look, i have always been a big believer that this company is going to be valued more on top line growth than on profitability. certainly near term prof profit profitability. i still believe that, but the magnitude of the loss they're guiding to for this coming year is pretty dramatic they're coming in about $800 million short of where the street was in terms of the ebitda loss that they're guiding to that's a pretty big deal >> indeed, yeah, we're going to be looking for more on that front. but on the pricing side, when

you're dealing with such freight and commodity cost pressure, is cutting prices smart there are some on the street this morning who argue it is, that they have relatively low churn, and that is going to stimulate some new wave of demand in the years to come. >> yeah, look, they're certainly zigging when a lot of companies are zagging. we're hearing about most companies raising prices as a result of supply chain and commodities and these guys are lowering prices. at the end of the day, i think the street is going to give them a pass on the losses for this year, but i do think it is indicative of the fact that the pandemic is fundamentally over i don't think they would be cutting prices if they were sort of in this deficit from a supply/demand perspective that they have been in for the last year and a half. at the end of the day, i think as you think about people who are using this as a pandemic play, the honeymoon is over. it doesn't mean that this can't be a very effective marriage long term, but there is that

transition period. i think this price cut is a big part of that >> i'm curious to hear you say that you think the pandemic is over, especially considering that we're hearing more and more from some of these companies that are going to be doing hybrid work for a lot longer because of the delta variant so i'm wondering if you think that the delta variant is in effect going to delay the advantages of the pandemic for peloton, andalso whether you think there are going to be some people who are permanently converted away from gyms to these high priced devices in their homes. i have a peloton, and i me, i'm never going back to a gym because it converted me to this new mode of working out. >> sure, and i'm the same way. i am a big believer and continue to be a big believer there's a long term secular trend away from in-gym fitness and towards at-home fitness. i continue to think peloton is the leader in that respect but it doesn't mean that it's going to be as easy as it's been

over the last couple years during the pandemic by any perspective. and thus far, i don't think there's a whole lot of evidence that the delta variant and the spread of that variant has been a positive for peloton the fourth quarter we saw slowdown in terms of new subscribers and what they're guiding to for this upcoming quarter is also a significant step down. we'll see if delta ultimately helps them, but i think fundamentally, they're going to really have to work for their money much more so than they have over the last two years >> james, it's deirdre, and by the way, i'm not going back to the physical gym either. but you know, delta or not, we have seen office reopenings pushed back, perhaps these habits and trends are going to be around longer than what we originally anticipated on the call last night, the peloton team was asked about their corporate wellness strategy, and they said that so far it's exceeded expectations still early days

the market has 10s of billions of dollars do you think this could be sort of an underappreciated opportunity for the company? >> it could be and i think it's one of the many levers that the company has at its disposal the biggest, clearly, is new products right? they're coming out with a new treadmill. there's a lot of speculation that they're going to come out with a rower, the corporate wellness program seems like a potentially big deal but again, i think that the real news here is that over the last year and a half, they haven't really had to pull any levers. and now, for them to continue to fuel this growth story, they're going to have to hit on a number of these they're going to have to play their cards exactly right for the current valuation to stick >> james, quite a story. and obviously one of the big movers of the day. we appreciate the time and some

texture on your recent calls james hardeman, web bush meanwhile, guys, the hot new thing in i.t. security is a physical key we reported on new initiatives announced as part of the white house cybersecurity summit, but it appears one of them will be a physical key from amazon that lets customers securely log in to their accounts. this is for aws. cloud computing. so corporate customers who run their business on aws cloud servers, this is a broader trend towards physical hardware designed to prevent cyberattacks these will be multifactor authentication devices and it works as an added layer of security so you still need to have the password as well as this new usb device no confirmation as to who will actually be manufacturing these keys keep in mind, apple, facebook, google, and microsoft for the past few years have also allowed customers to buy usb devices and add them to accounts as an additional security measure. amazon telling cnbc that customers can begin requesting

keys in october, and julia, it reminds me a little bit of news we got out of square recently. they're going to look at making a bitcoin hardware wallet. so as we begin more digital, we're also getting more hardware, i guess. >> yeah, what's old is new again, i guess things can't exist only in the virtual world. >> meanwhile, more on apple's commission to concession in the app store. that's next. plus, new york city imposes new rules on the likes of uber, dash, and grubhub. the future of food delivery is after the break. competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute.

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uber has been far from a boon for investors since its ipo two years ago. now it has seen two strikes in one week the new york city council passed

two bills targeting the food delivery industry. making caps on fees permanent and boosting enforcement of past legislation, including rules over sharing customer data with restaurants. the bill heads to mayor de blasio's desk a week after a california judge deemed proposition 22 unconstitutional. that initiative, which would have cemented ride share drivers as independent contractors rart than employees is expected to be appealed joining us now, emil michael good to see you. you have been critical, and we should also note you were part of uber 1.0, the travis era, which had its own set of issues. what do you think has happened in the last two years broadly that put uber in this position the whole gig economy has to deal with this, but uber at least in terms of its balance sheet and profitability feels further behind than its rivals like lyft and doordash

>> yeah, you see that reflected in thevalue of uber where today, lyft plus doordash is bigger than uber from a market cap standpoint, and remember, uber's three times as big as lyft in the u.s., and uber used to be bigger than doordash in the u.s. so something is wrong there. i think what you're seeing is the unit economics that lyft was able to get per ride last quarter and the unit economics that doordash was able to get per delivery last quarter were significantly better than uber they were just more efficient and the market is crediting them with that and sort of dinging uber with that inefficiency. >> right, and sort of a notable difference between the two lyft and doordash, is they're sort of growing organically, they're staying pretty focused, but the ceo's focus has been one of deal making which investors haven't really appreciated so far. do you think that continues or he needs to step back and look at that organic growth and not do any more deals, perhaps

>> i have always been a big fan of organic growth, because that gives people in the company growth opportunities that means you're building things on your own platform, which has its long term benefits i think the deals largely haven't worked out, the ftc is investigating drizzly, they paid too much for post mates, and really in this environment, this anti-trust environment, it's going to be hard to do big deals any, so i think the company has to come back and look inside and figure out what to build and how to build it and have a long term perspective on it. >> emil, more broadly, just on some of these -- on the space overall, there's the driver classification, now the delivery commission caps. why does it seem like policy is kind of stacked against the business models at this point? >> yeah, it really does. and i think that while i think dara and the uber 2.0 management brought a sense of diplomacy to the company and sort of

stabilized it, the one thing they didn't do aggressively as they should is pushed back on some of the regulations. any one city that implements a delivery cap, that gives permission for all stooes to do it it's frankly bad for consumers and bad for restaurants. if you're capped and someone from brooklyn wants to order something from manhattan, and you can't pay the delivery guy enough to do that, well, you're not going to deliver from that restaurant or do that consumer so these regulations have real harm, and uber has not done a good job conveying that to the public and therefore pressuring the legislatures not to do these things >> emil, i understand that you think that uber has failed to do its part in these regulatory battles, but looking at these two major issues on the table right now, both in terms of uber eats and then also in terms of how drivers are classified, if uber loses these battles, is there a strong path forward for this company and what do you think the company needs to do right now to

prepare itself should it not within these regulatory battles? >> yeah, i think the scarier battle is the worker classification battle. because taking a driver who works ten hours a week and making them an employee has a whole range of bad ramifications for the driver, for the consumer, and for cities and if that happens, i think it will be a really destructive force on this industry so they won proposition 2 by 60/40. i think what the judge wrote i wrong and likely to get overturned they have to make sure it gets overturned there in california and do it in massachusetts, which are the two states that were most susceptible to this classification of driver on the food cap delivery fees, i think those may be able to be undone when the result on consumers is shown when you see that restaurants complain that, hey, i would be happy to pay a little bit more if i got way more customers and customers would be able to get

deliveries from anywhere they wanted i think those may be okay on uber business model. >> emil, this battle, though, goes beyond california, massachusetts, new york. i mean, even the biden administration has its eye on gig worker classification. so my question is really broad do these business models even make sense if they have to classify their drivers as full employees? >> i think that they are going to be significantly hampered if they lose this battle for sure but remember, we are entering into an era of remote work, of creator economies, of independent contractors where people want more flexibility in their work that's why you survey the drivers. 70%, 80% don't want this i have a hard time imagining even with the sort of regulatory headwinds they're facing with the biden administration and so on that they'll actually make this full-time worker business

but if they did, back toyour question, i think it will be a business model issue >> okay. emil, thanks for being with us emil michael i'm not sure if you got that, uber investors, we should say lyft as well which is still trading below its ipo price. rahel, over to you >> good morning. good morning, everyone and here's what's happening at this hour. the pentagon said there are specific credible threats against cupule airport even as evacuations accelerate about 5100 american citizens have now been flown out of the country. he also corrected a key detail of yesterday's deadly attack >> i can confirm for you that we do not believe that there was a second explosion at or near the baron hotel, that it was one suicide bomber >> the federal reserve says it will start tapering its asset purchases this year, as hiering continues to improve

although fed chair jay powell also signaled the u.s. central bank will remain patient as it tries to nurse the economy back to full employment and consumer sentiment dropping in august to its lowest level in nearly ten years the index falling to 70.3, which is below what economists had been forecasting you're now up to date. back to you. >> thank you take a look at a pair of earnings movers today. workday is close to a six-month high, raising their guidance on revenue and operating margins. bookings remain pretty strong. vmware falls a bit short of expectations shares down almost 9%. >> plus, elon musk taking a shot at jeff bezos in a tweet this morning. this after amazon urges the fcc to deny spacex's plan for second generation starlink. we're back after this. dow close to session highs

big tech has a diversity problem, a lack of representation both among its employees and its leadership frank holland is here with a new conference looking to change that frank. >> good morning, julia about 9% of u.s. tech workers are black according to the latest numbers from pew research, and the community has grown over recent years. one of the driving forces have been the afro tech conference, the largest gathering of black

tech professionals that started in 2016. the last one before the pandemic with more than 10,000 people in tech or seeking tech jobs. now, the founders have started afro tech executive, aiming to increase black representation in the c-suite and in boards. of tech giants like google, facebook, microsoft, and apple, that have only seen marginal growth in those top positions. all these companies and others, they made pledges following the death of george floyd to address inequity, including in their own companies. i spoke with reddit ceo, and he called afro tech executive an awesome opportunity to meet folks we think hopefully will be interested in joining reddit as potentially leaders, executives, as board members the ceo of ebony magazine is leading that legacy into a digital transformation says now is the time to hold big tech accountable >> we have to put pressure on not only the day of but after. how are we following up? how are we building a coalition to continue to put pressure on,

how do we monitor? >> we continue to put pressure on the companies that want us as customers but don't value us and offer us a seat at the table, and that is not acceptable >> the conference begins in person on saturday executives from salesforce, microsoft, levis, and others are expected to attend in various capacities back over to you >> frank, thank you. we look forward to updates on how that all went. >> meanwhile, watch hp this morning shares are down big in today's trade after a revenue miss and a struggle to meet demand thanks to the chip shortage though shares down more than 2.5% enrique lori says the problem may persist until erly next year "tech check" is back in just a moment

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(upbeat music) - [announcer] introducing the grubhub guarantee, our promise to deliver your order on time within the delivery window and for the lowest price compared to other apps, or you'll get back at least $5 in perks. shares sinking on kwrk2 results. revenue did match expectations, but again, the costs came in higher on the quarter and it's worth noting the stock did hit a series of all-time highs leading into the print we'll have more on the quarter and the chip industry on monday. don't miss the exclusive on "tech check. in the meantime, we're back in two minutes.

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apple blinks the company has been locked in a tense standoff with developers over the fees it charges within the app store. the company now says it will loosen rules for developers, a major concession amid growing antitrust pressure from washington our next guest thinks competition is under assaults. general partner and former vp at facebook sam lesson joins us now. you penned this really interesting essay, if you will, about competition and how you think competition is under assault, but competition is necessary. how much of this assault on

competition is because of the power of these tech giants like your former employer, facebook, and apple? >> i don't think it's about the tech giants per se i think it's actually more about the nature of technology, where big things get really big and really powerful really quickly you look at what happens for apple, for instance. they're in a really tough spot because they legitimately have to deal with two demands from society. one is for privacy and safety. and the other is for open competition. that's an unwinnable thing for them what we can't allow them to do is use that as a cover to squash competition because they can't turn everything into a privacy issue so no competition is allowed, but i think the fundamental problem isn't about companies. it's about technology. these companies, the really big ones, are right in the middle of forcing how to deal with it. >> so sam, specifically on this apple issue, do you think the concessions they have made will enable more competition? do you think that what they were doing before was limiting it and were these concessions meaningful >> i think they're marginal is

what i would say i think they're the start of the story. the question apple has to wrestle with, as do all big platforms, is again, society demands two very different things of them you can't have perfect privacy, perfect security and things. you can't have perfect privacy, security and perfect competition and openness you have to choose society has to go in cyclicals what they care the most about. that's a lot of what you see around crypto is a fundamental technical rejection on the path of some of this stuff. but i think apple has to make more concessions over time if the narrative around competition prevails which i hope it does. because we need more to have a healthy society. but there are trades to be made here. >> sam, i wonder, fundamentally whether or not you think the environment right now for those who would look to disrupt and innovate, if the environment was different nan when itt and kodak and poll radio and even you

might argue ibm were unseated by young guys >> you need in shifts in technology to have unseating, i would say. you think about for instance facebook, my former company is constantly under assault because the world of social media changes so quickly you look at tiktok, always new things up and coming the fundamental platforms around phones for instance are in a pretty defensible place right now. we'll see what happens has to be another turn of the wleel, whether vr, ar, et cetera to put those guys in a mode where competition can rise it's hard to assault them at this point in the cycle. >> sam, it's deidre, of course we hear from developers on the 57 store, payment ecosystem. we don't hear from users make the argument as to why users should want the payment system to expand and how they benefit. >> it's simple it's demoral idsing to be a developer. you think about the talent going to app and app experiences and

pushing the envelope trying new things verdicts others the the reality is when the game is rigged no one wants to play the consumer experience is simple if you want new experiences and 567s, developers need to be empowered let's be clear, the developers and experiments have a cost if you want perfect privacy safety and security you want less innovation there is a question for consumers is they want bothand fundamentally you can't have both the question is how do you balance those at a global scale? >> sam, i wonder if you could lend perspective as an investor in light of the regulatory scrutiny all of the pressures on the companies, if they could limit the opportunity for start-ups to be acquired, do you think, you know, right now, do you think that that is more of a negative force? or do you think that just the size and scope of these companies is the challenge to start-ups? how does in impact where you want to place your bets?

>> well, you know, i wrote an ee va recently how i think venture capital is changing fundamentally. a lot of what we consider traditional venture capital on the west coast, investing in sass, tech-driven, b to b, c to b software there is so much venture capital. i don't consider that venture capital. it's always forced to list for crazy opportunities. there are new crazy opportunities in the traditional app ecosystems because the pattern is too well stebd and understood doesn't mean you can't build good businesses but it's not great new things that voersso forces innovation on the edge. i don't think that's bad there is a lot to do there but if you want better apps and you want better people focusing time on building better apps you need the game fair and open and interesting. you can't kind of control the platforms too much or you end up with pretty suboptimal outcomes and consumer experiences >> well, sam so many different

pressures at play here we appreciate your perspective as an investor also former facebook queue. >> thanks so much. >> after the break, wall street bets and reddit are getting smarter. the graduation effect in retail trading is next. stay with us ♪ music ♪ ♪ dream, dream when you're feeling blue ♪ ♪ dream, dream that's the thing to do ♪ ♪ music ♪ when you see value in all directions, you add value in all directions.

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reddit traders learning a thing or two since entering the markets. kate rooney has more on the new investments they're making kate, spoiler, they're not the ira or roth ira accounts that robinhood has been touting. >> they tend to be riskier investments. some calling it the graduation effect with new traders started out with a single stocks quickly moving to more complicated and a lot riskier options trades with the help of social media and some of the low-cost apps. over the past two years we've seen a spike in ongss activity coincides with a rise in retail training since the lockdowns started in 2020 you can see options activity going up seven fold in that time limit time according to data compiled by api tradier.

retail activity meanwhile is a percentage of overall volumes increased in lock step now making up almost 30% of trades and the big factor at play here, guys, is social media from what i'm hearing. trader education is happening a lot quicker in places like reddit, youtube and discord. seeing a lot of chatter about it on reddit. a lot of options screen shots and chatter about those types of trades in particular there is also been a lot of the stay at home traders looking for content as well as a community and barriers have essentially gone airway. it's more accessible with hundreds of apps now including robinhood offering options it's cheap across the board, commissions have essentially dropped to zero. and volatility also spurred this on options contracts of course let you buy at a predetermined price in the future or you can sell it at a future price. and these types of trades tend to do better and just be more successful when there are big swings in the markets which we have seen a lot of this year,

especially in those meme stocks. and those rewards, of course can be higher but so can risks in these cases. so be approved to buy puts or calls usually requires one or two years experience and a minimum dollar amount in liquid assets brokerage firms like robinhood have some under pressure and made it harder to access options trading after criticism they made it a little too easy appear the bar too low. back to you guys >> well, to that end, kate, i wonder if there is a sense of whether these traders are actually ready to graduate they are graduating. but are they fully aware of risks and able to mitigate or manage them in. >> that's one of the big questions i was asking analysts pointing it out saying we have seen the rises, does seem tide to retrail trading there is a sense they're being educated faster. there are more resources they're on youtube some of them are taking the time to educate themselves. but it is a risk factor others say it's up to the brokerage firm and the regulate regulators

to make sure they're not taking on too much risk >> kate, appreciate that very much fascinating stuff. rate rooneyy we continue to watch markets close to record highs. s&p 4506 dow needs 175 points of its own. have a great weekend let's get to sully and the half." >> thank you all and welcome everybody to the "halftime report" on this friday i'm brian in for scott today and jay powell, you might have heard of him, signaling the fed may start scaling back stimulus before the end of the year but adding that rate hikes are still a long way away. so what does all of that if anything mean for the record rally and your money from here we will debate that and more with our investment committee today on a friday. shannon saccocia jason snipe, gem lebenthal and pete najarian. first a look at your money and, yeah, look at that green more new records the s&p 500 and nasdaq