. >> reporter: there is some exposure from microstrategy saying microstrategy was aware of this and tookn what they're saying was a fraudulent enterprise ultimately for tax purposes for microstrategy that could be a problem. also interesting here this is a false claims act case initially. there was a whistle-blower at the core of this, somebody who had access to microstrategy's internal documents because at some point the ag says they got hold of the actual flight logs from the microstrategy corporate jet and that's part of the way they're proving where michael saylor was bedding down each night, and it wasn't in florida. >> eamon javers, thank you >>> take a look at snap shares surging after announcing a major restructuring involving laying off 20% of its employees, more than 1,000 people, and discontinuing several products including its drone camera meantime netflix, interestingly, is poaching two of snap's top advertising executives julia boorstin joins us. julia, what does it mean for netflix's own ad business which we're following carefully? >> look, it's considered a big win and je

he stepped down as the ceo of microstrategies.e is here to talk about that move, the hit to the company, why he is more convinced than ever that bitcoin is the future. ♪. we hit the bike trails every weekend shinges doesn't care. i grow all my own vegetables shingles doesn't care. we've still got the best moves you've ever seen good for you, but shingles doesn't care. because 1 in 3 people will get shingles, you need protection. but, no matter how healthy you feel, your immune system declines as you age increasing your risk for getting shingles. so, what can protect you? shingrix protects. you can protect yourself from shingles with a vaccine proven to be over 90% effective. shingrix is a vaccine used to prevent shingles in adults 50 years and older. shingrix does not protect everyone and is not for those with severe allergic reactions to its ingredients or to a previous dose. an increased risk of guillain-barré syndrome was observed after getting shingrix. fainting can also happen. the most common side effects are pain, redness,

income taxes and he's suing microstrategy which is located just across the river in suburban virginia, quote, conspireing to help him evade taxes and he legally owes on hundreds of millions he's earned while living in d.c. the suit alleges that saylorly illegally avoided millions of dollars in d.c. by pretending to be a resident of other jurisdictions. he lives in a 7,000 square foot penthouse and has docked two of his luxury yachts in the district for long periods of time the complaint includes detailed allegations that saylor was physicall physically present in d.c. for most of the year despite being a florida resident including the corporate jet and location tagged social media posts. the whistle-blower's complaint said saylor openly bragged to friends and encouraged others to follow his example the a.g. alleges that saylor avoided paying $25 million in income taxes and he alleges that microstrategy as a company actively conspired with saylor to enable the fraud including by filing inaccurate w-s with the address of his proper ney florida rather than his home in d.c. we reached out

the morgan stanley head of microstrategy is joining us stuff do you see the volatility as our normal going forward? >> i think markets could remain volatile if central banks that are reacting to all of this data continue to change their tune or at least sing from different hymnals. i think that's probably likely to inject volatility into the market. caroline: we are looking at a picture of the ever important negative yield curve causing the inversion. are you baking in some sort of recession? what is the bond market signaling now? >> i think what you see in the market prices is the idea that the fed is going to raise rates to do some damage to the demand side of the k -- of the equation. with thought they made some progress in july but the payroll number we got freddie calls into question how much demand destruction the feds tightening of monetary policy and other central banks have achieved so far. jon: let's go short term and heading into tomorrow, the inflation report, giving everything you said, what are the demand in the market you'll be watching for? >> it's a foregone conclusi

obviously there is an immense amount of volatility with the asset class especially microstrategy if youhe good news for sailor and good news for microstrategy in general, the debt was long-term, low interest rates in 2020 environment. there is some time for bitcoin to recover. immense volatility in the equity itself is because you're essentially levering up the bitcoin bet. charles: right. >> i think the long-term thesis for bitcoin is unchanged. we're at the end of the debt supercycle. how it is resolved is anyone's guess. the engame is more monetary debate. over the long term that is the only answer from policy make years dylan, i have to hop do i have to get one of those chairs you have to be part of cool kids? all the cool guests have the same chairs. do i need one of those? >> need one of those, next time i will wear a suit. charles: sounds good, my man. talk to you soon. >> sure, charles. charles: coming up, everyone is focused on this jobs report. the cbo scored the most recent spending bill. so one person's perfect for both of them, and guess what? we have him. douglas holtz-eak

keep an eye on microstrategy alongside the bitcoin it could have that as well. >> dangerous positions, dom. thank you. >>> speaking of rollercoaster weeks take a look at shares of 23andme. investors piled into the stock ahead of results shares were up 45% in a few days then the genetics research company posted a wider than expected net loss sending shares lower this morning 23andme is up 30% this month but lost roughly two-thirds of its value since going public joining us now 23andme co-founder and ceo welcome. i want to start off with the impact of this economy on your business as consumers have less to spend on discretionary things what is the impact there then you did also call out inflation's impact on some of the company's costs. >> for sure. i think a couple things. there's no doubt, you know, consumers are tightening their wallet that they are definitely being conservative about how they want to think about spending at the same time one thing we did see during covid and i do think that trend continues is that people are very, even more mindful of their health. and you definitel

and microstrategy's, michael taylor about his plans to step down and focus on bitcoin acquisitions.a show you don't want to miss. don't forget to check out our podcasts wherever you get your podcast. i'm emily chang in san francisco. this is bloomberg. ♪

you have seen that microstrategy. what is interesting is the level of core buying coming in.have seen a significant pickup in core buying certainly in game stock. it looks like we are back again and i think that comes back to the liquidity dynamics. better data has been at the heart of that. you see a strong correlation between citigroup futures and the s&p. in this world, financials are ok. i think they are looking pretty good. energy has been working well. tack has been the place you want to go, as well as automobiles. those areas are working. i think the cyclical areas continue to work for now. we've got our eyes this week on real rates. if we see 10 year real rates move about of 50 basis -- move above 50 basis points, that could be a headwind for risk assets. it is not without risk, but we just continue to do what is working. knowing that there is a massive trigger out there for further upside. that is the ctas and trend funds. if they were to buy on leverage come that would propel risk to move higher. our friend phil move comes back into play. haidi: great to have you. m

we've seen similar things in charges at microstrategy and the block, but what about what you are seeings of the cash burn? that's another half $1 billion nearly. our own bloomberg intelligence analysts are saying they are going to have to tighten the belt more when it comes to their cash burn given the topline pressures you are seeing when it comes to transaction revenue. emily: we will catch that full interview later this hour. sonali, as always, thank you. meantime, the u.s. justice department is preparing to sue google as soon as next month, capping years of work to build a case that it illegally dominates the digital ad market. i want to bring in julia love who just started covering dougal for bloomberg. first of all, welcome. this is a case the doj has been working on for years. what has been the big breakthrough? julia: thank you so much for having me. this case is a long time in the making. the doj first started looking into these questions in 2019. they brought their first case related to search but now we are hearing they are getting close to finally bringing a case of the ad t

. >> microstrategy, saylor moving to executive chair, says his next job will focus on bitcoin they take a pretty sizable charge on a stake where i think their cost basis is still in the $30,000 range. >> yeah. i mean, he's been so ill-advised that -- look, i mean, it's telling. the stock goes up. i mean, that's a referendum in itself that the stock goes up. i've often found when a stock goes up when someone steps aside, that's the market making a cool and severe judgment. >> we haven't mentioned solana wallet hack. it seems like there's waun week. >> look at these things and the idea that this is anything -- there was one that was a ponzi scheme the s.e.c. did this incredibly great -- they had the crypto champions. did you read that? there was nothing to it. it was all middle level marketing, mln solana is not something that i'd recommend to my friends. we have really seen -- look, get me speak to mike there's absolutely a sense of crypto gone wild yet wherngs you say that you're under attack by the crypto maniacs, and we all have to admit it's not as secure as we thought, i begged to g

so many things while we ask you i can ask you about michael saylor and he's stepping down from microstrategyer its bitcoin holdings >> that was a big surprise michael saylor was ceo and he founded the company in 1989. the past few years he's shifted the corporate strategy to use all of the software proceeds and take out loans and buy more bitcoins and it's become a proxy for bitcoin investors and saylor says while splitting the chairman and ceo role the company can pursue both of those strategies and acquiring and holding bitcoin and acquiring the enterprise software business and bitcoin is out of the business and suffering big time as bitcoin falls and taking an impairment of almost a billion dollars, $918 million and that happens any time bitcoin goes below the price where the company bought it and according to yesterday's report, the average purchase price is $30,700. bitcoin is well below that today and that's the cause of that impairment charge and the company has spent about $4 billion buying up bitcoin and about half of that, guys has been through debt. >> wow, very, very interesting

of the smaller cryptocurrencies and crypto exposed stocks with it don't look now but coinbase, microstrategy, riot blockchain and others up more than 50% in just the last month with bitcoin back above 4,000, ether flirting with 1800. crypto is making a comeback. jpmorgan jpmorgan saying they've found a floor. if so, that was a quick cold snap. >> indeed, indeed. look at ether down 44% i'm sorry, up 44 up 44 there. as stock prices and valuations crater some wall street firms calling the bottom on growth stocks, dom chiu is with us. hi >> valuations are at the heart of this discussion as to whether or not they make a comeback which tend to preguess the multiples or valuations of some of these analysts at goldman sachs are starting to look at them and say maybe they can make a comeback, but certain kinds. they say, consistent with history we expect investors will reward higher quality growth stocks but continue to avoid unprofitable growth stocks that would be required to tap into the financial markets at a time when the cost of capital is on the rise now, with that in mind, if you look at thos

been on a tear after announcing a partnership with blackrock and seeing a short squeeze and a microstrategy block and some of the mining names are the biggest winners and riot block chain up more than 50% for the month still plenty of headwinds for those that are really a bottom and there are high-profile hacks that have weighed on investors sentiment and crypto investors are very much watching that cpi number coming on wednesday to see if this bullish narrative continues. kelly? >> it has been fascinating to watch the coinbase saga play out, kate because on the one hand you have more concern than ever to have custodianship and all of these hacks on different wallets and what's the most appropriate, safe place to hold your crypto and is coinbase and all of the rest of it and "the wall street journal" with a big piece about some of the problems they've had. what did the shares do last week double it was incredible. >> it was quite the rally last week along with a ton of short interest so you have the blackrock partnership which lit a spark there and then it was one of the heavily shorted sto

the head of global microstrategy. good to have you with us.derperformance in chinese assets be helped by any of these policy moves we are finally seeing? guest: good morning. great to be back. it is somewhat of a relief for broader risk assets. china included. the recent easing we have seen from china is insufficient. that slow down or economic headwinds are really multifaceted. the property market continues to deteriorate. the inflection is being pushed back further and further out. we are seeing and slowdown, china is exposed to supply shortages of strategic foods, and china has been exposed to significant capital outflow. it sets the rebalancing back towards consumption. a lot of challenges, the market shery: the standard deviation, something we have not seen any diversification? guest: how it's manifesting are those interest rate differentials moving away from the favor i have played into the capital outflow picture. not so much manufacturing in the exchange rate, but relief is on the capital outflow for want -- front and there are signs t

christopher roan is microstrategy at strategic -- strategic's.t is about the bond market, technically you see two year yields moving higher. discuss. christopher: yeah, i think the idea that the bond market buys this idea of a fed privet, we do not see on the charts. two yields are basically back at the highs. if you look at the futures were say , they are already back to 4%. we met back and looked at every single tightening cycle back to the early 70's -- 1970's. we cannot find a tightening cycle where the fed funds rate ultimately didn't end above the rate of inflation. this idea of peak inflation, that is a math problem to us. i'm not sure it is investable. even if you get cpi lower over the next 12 months to 7, 5, 4, you need a fed funds rate above the rate of inflation, that is what history has shown us. i think that is with the two year yield is reflecting. i think that is what the shape of the yield curve is reflecting as well. it is very contradictory to the message from the market will last five to seven weeks. we have an equity market r

prices, $1,655, down nearly 4% and kind of the rest of the complex as well we'll keep our eyes on microstrategys back over to you. i obviously did not win the l lottery. i think i would get a nice car that would be my first big purchase. >> like what >> i don't know. i always liked the porsche thing, maybe something like that. >> nice. a tie can or internal combustion >> tie can because here in englewood we have a done of charging stations. i wouldn't have to pay for fuel again if i just drove the car to work. >> did you know that >> i would not be out there. >> you know i would be spending my money on a prius, so what can i tell you. >> i don't like the prius, all-electric prius thanks, dom. we've got to be more than half -- we're only halfway through the earnings season? it's august 1st. we've seen more misses and smaller earnings and revenue surprises from companies, slowing consumer demands struggling ad sales have been major themes strong dollar is weighing on the results. margins are getting squeezed and inflation is an issue. we've been paying suspepecial attention to the ceos. steve lie