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tv   Bloomberg Technology  Bloomberg  June 27, 2022 5:00pm-6:00pm EDT

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>> from the heart of where innovation, money, and power collide, in silicon valley and beyond, this is "bloomberg technology." with emily chang.
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emily: we will bring you our exclusive interview. tech companies may be willing to cover travel fees for employees looking to get an abortion, but what about protecting your data? we will talk to a civil rights attorney. theranos -- his fate in the hands of the jury.
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we will get the latest. all of that in a moment. want to get a look at the markets, volatility is back, stocks falling again to start this week with the tech sector a big drag. ed ludlow is here with the latest. ed: it's not uncommon to see volatility creep back in, portfolio managers adjust the composition. the tech sector is the underperformer. the nasdaq is down 8/10 of 1% after a game last week. yields are such a big part of the story. up seven basis points. when we saw the gain and equity markets last week, yields were coming down. that is quite interesting.
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i'm going to bring you a silver lining. valuations have come down, they peaked. names like meda, for example, value buyers have started to come back and. that is important, we are asking ourselves where the bottom for this market is. we have the movers back in the studio. you look at u.s.-listed shares of chinese technologies, one of the beneficiaries after an investor sold a stake in the company. amazon is considering two prime days this year. that stock is one of the biggest rags, down to 20%. then the big story of the day, stx is talking internally about
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its options if it can by robinhood. that stock was halted due to volatility, ultimately gaining 14%. emily: more on that interest in acquiring robinhood. we learned just last month they owned a 7.6% stake in robinhood through another holding company. he tweeted customer assets should always be primary. everything else is secondary. for more i am joined by a bloomberg reporter who covers robinhood. reporter: the status is stx has talked internally about potentially buying robinhood. robinhood has been pretty distressed in the months since
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its ipo. it has led a lot of people to wonder if robinhood might pursue ideal. -- a deal. this is something stx is exploring. emily: they are saying they are excited about robinhood, potential ways we could partner, no active, and day conversations. do we know how robinhood founders feel about this? annie: true that it is in the earlier stages right now. it's complicated by the fact that robinhood cofounders have a supermajority voting, they control over 15% of voting power. that would complicate any deal.
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you are still in a position where -- they might have to take a look. emily: obviously, we know robinhood stock has plummeted. they have to do some layoffs. there is a popular -- they are a popular trading at. -- app. they are trying to push into the crypto market. talk to us about the reasoning other than the fact they are interested? annie: there are other overlaps between the companies. robinhood benefited from the huge boom in retail trading we saw during the pandemic.
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ftx is a crypto exchange but has also shown interesting getting into the equities world. there is a fair amount of overlap. you can see a tie up making sense. emily: we will continue to stay tuned to your reporting. later in the show, we are joined by the ceo of the future crypto's exchange. they just had to pause all withdrawals. coming up, digital life in a post-roe world. what can and can't be used against you. we will speak with the civil rights attorney,. -- we will speak with a civil
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rights attorney, next. this is bloomberg. ♪
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emily: some of the biggest companies in the world have quickly put into action to help employees who may need access to abortion care following the supreme court ruling overturning roe v. wade. apple, meta, amazon and more have announced they will cover travel expenses. for more, i am joined by sarah. explain to us what is happening in the fine print. reporter: companies are saying
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they will include abortion among the health care procedures they will reimburse travel for. often, that is something you need, they will find a way to fly you to estate where it's possible. they are not saying anything about, not just about employees, but about investments, data they collect. there is concern companies will collect data, through users, searches, messaging, through interactions online. prosecutors might try to subpoena companies. so far, we have not seen companies say they will not provide that data or they will protect user privacy.
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it is a tricky situation, because historically, the rule has been whenever there is something illegal or requested by law enforcement they comply. in this case, employees feel passionate about people should be able to have this health care procedure. emily: i know you and your team are trying to get answers from companies about how they will handle questions. what are we hearing so far? sarah: we might see some companies say we are not going to do that, we will fight in court over not providing it to the government and endangering someone, where other companies will say this is the law and we operate by the law of the land. wherever we are putting our
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products, we have to do a. -- we have to do that. it can set up a lot of problems for people who use the services. it's very different than 50 years ago. now, we have this entire economy around knowing exactly what people intend to do based on their online behavior. in the next few years, we will see a lot of questions around versus users and the law where they operate. emily: huge, big questions that have yet to be answered. thank you. while tech companies might be offering employees navigating a new landscape, there are concerns about the information these companies have on their
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users and how it could be used against them if they try to access an abortion. experts warned that her search history, location data can all be fair game. for more, i'm joined by cynthia county cook, a fellow at the gender justice team. we're in some uncharted territory. walk us through this post-roe era, the heightened risk of surveillance. guest: yes. we are not going back in time, we are going fast forward into uncertainty. what we have already seen happen with digital evidence used against people who were pregnant and charged with conduct related to the termination of their presidents -- pregnancy was that information was text message, email receives, search history,
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websites visited. that has already been used in cases we have already examined. emily: how did you expect companies to handle this information? is there going to be some sort of shadow economy foreshadow society created as a result? cynthia: absolutely. people will be pushed into shadow economies and places where they are experiencing more vulnerability as a result of this decision. emily: what is the power tech companies happier to do something about it? -- have here to do something about it? cynthia: they could engage in a few different ways. they can collect less data. i have heard a few companies speak to location data recently, but location data has not been used against people.
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websites being tracked have. the other things tech companies can do is become prepared to go into court and pushed back to share information about what websites people are looking at, what information they are searching for. emily: you're talking about the biggest and most powerful companies in the world. senators wrote a letter to the ftc asking them to investigate apple and google' role in all of this. what responsibility do you think these companies have? cynthia: the companies provide an important service that allows people to access information about health care. this is a public health issue more than a technology issue. the technology companies need to understand the information they collect and store, and law enforcement agencies they provided to will use it to
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criminalize people they are relying on to be there users and people who will purchase information and commit to advertisers. it is part of the ecosystem. if they are disregarding the rights and welfare of the people that they are serving through the technology they provide, those people will be less able to participate. emily: there are big companies, there are also a host of startups offering women and family health care, i wonder what you think the role is of those companies, less powerful, less well resourced putting it any difficult position. cynthia: i would say they first should find out from places that
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are already existing, what the needs are for the questions they are asking and types of services they are making available versus the people designing it. emily: what do you think about the role of these crisis pregnancy firms? bloomberg has reported these firms which are encouraging women to not get abortion are also scooping up data on women who are seeking abortion. cynthia: that is right, they are. collecting information about people who visit their websites. emily: what is your advice to women right now about protecting
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digital autonomy in this messy metal were a lot of this has yet to be decided, this law was just overturned? cynthia: in the same way we should not be individually responsible, we should all not be individually responsible for securing our digital devices and having the knowledge of what types of information is collected about us, but there are a few things people can do. secure your devices. do not share voluntarily with police officers, social workers, anyone at a hospital. secure communications. use encrypted communication. secure your browsing. use the types of browsers that are not going to track you as you visit website to website. emily: fascinating new landscape
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to explore. ford foundation fellow, civil rights attorney. a new poll suggests a majority of americans disapprove of the overturning of the right to abortion. 78% of republicans support the action, 83% of democrats disapprove. coming up, the boyfriend of theranos founder elizabeth holmes -- will he face the same fate? a jury is deliberating his future, right now. we will have the latest on the case, next. this is bloomberg. ♪
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emily: a jury is deliberating in the trial of the former second-in-command at theranos and ex-boyfriend of elizabeth holmes. his lawyers have done their best to try and separate him from homes who was founded -- guilty. i am joined more -- i am joined for more. you have been and therefore much of the trial. have lawyers been successful separating the two? reporter: we are going to find out. i am not sure. it is going to be interesting what jurors think. elizabeth holmes has loomed large over the trial. i was in closing arguments last week. on monday alone in closing
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arguments she was mentioned 96 times. his lawyers are trying to say he too was defrauded by elizabeth holmes. that is what they are trying to pull off. i think that's going to be unsuccessful. emily: the jury was instructed to separate the two. you wonder if it's actually going to work. joel: that is the real conundrum of this trial and confusing for jurors, because they got an instruction that asked jurors to not consider any factor aspect of the trial. that is read legally, technically, you are not supposed to consider the trial. that is the instruction. she has permeated the entire
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affair and trial. she has been mentioned so many times that it is impossible to separate the two out. emily: what is your perception after spending so much time in the courtroom? is it clear one had more of a role that another? or were they working in tandem? joel: his lawyers have said he joined later, she founded the company, lawyers tried to say this is her company. we have seen the same texts and emails that were shown at elizabeth holmes' trial, showing how tight they were. he was the president, she was ceo. even on those titles, they held a special place in the company,
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special roles, held onto information only they could see or decided who can see what. they were in tandem. that is what jurors are going to see. emily: does he face the same potential sentence? joel: he does, part of the reason she has not been sentenced yet is because the judge wants to figure out his role in relation, they looked to be so closely aligned but i think they are both facing between eight and 10 years in prison. emily: deliberations took much longer than any of us expected. do you think that's going to happen? joel: this trial is very different. it's been much quieter. the courtroom is quiet. his family is sitting behind, just packed together.
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what they are seeing is a different trial. same facts, but not this kind of energy or pressure that i know jurors felt to make a decision. here they could decide easier and without pressure. emily: we will be following. thank you. coming up tech companies and startups are laying off people, creating tough questions about whether to buy equity. we will discuss that and more, next. ♪ how will your business adapt to change? you could hire an office full of peyton mannings. what's up, peyton? good morning, peyton. hold for peyton.
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>> this is a moment that has been 12 years in the making. >> if you look at the
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environment, the majority will survive. >> the best time to start a company is a recession. >> it's clear the market will -- >> i think the place of opportunity we are focused on is on cybersecurity. >> the future of work -- >> we think other companies will disappear. >> there are bright spots. emily: welcome back. snapshots of the reactions we
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have gotten from investors and ceos on our show, what the next big thing could be. this is data shows private capital startups raised fewer rounds of funding than they did late last year, early this year. ed ludlow is here. ed: it shows deal activity is down. it also shows there is caution. insight data shows deal counts were down 23%. you can see the aggregate line. it coincided with the volatility we saw in public. it's not just -- smaller is down
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27%, if you look for example where there is less of a drop in the number of deals, the drop in the size of the deal is much more noticeable. it's interesting. we don't talk as much about private markets when there is volatility in the public market. the consensus seems very much aligned, there is caution but opportunity. emily: thank you. i want to bring in the founder and chief equity officer. where do you think we are right now in the cycle? phil: we have continued the trend which is far -- private
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valuations leg behind public ones, seeing that reality set in. something we have seen is maybe companies trading on equities and secondaries at a discount in q1, we are seeing that continue to go downwards to 40% to 60%. we may be reaching the bottom. emily: some venture capitalists are recommending not just one to two years of runway, but three to four years. can startups handle that? phil: it's an easy thing for a bunch of venture capitalist essay. no company was prepared to have three to four years of cash.
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that is a bit unrealistic. you will see a shift in how companies are spending money as observed by some significant headcount reductions. compensation really is -- emily: talk to us about folks getting laid off. half of the upside is equity, you have to buy the equity in order to benefit in order to know if the startup is a success or not. when you get laid off, you have a short window in order to buy the equity. can you explain what these employees are going through? phil: it's a tough time. it is compounded by the fact most employees are issued stock
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options which give them the right to purchase shares, usually a big hope and incentive for employees to join the company. most of the rules, you have 90 days to buy those shares after you have left the company or even if you are terminated, it's an unfortunate scenario where hundreds of -- or thousands of employees are laid off and you are given a short window to decide if they should pay money out of pocket to own stock or not. it is really uncertain to know if your company is going to be successful, whereas nine or 12 months ago it was a no-brainer. we are seeing active conversations between companies and employees to see if they can help solve this problem which is pretty meaningful. emily: you have a company like bolt that gave employees an
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option to buy shares early. i wonder if those employees are in a precarious financial situation because they took that bet and it is not panning out. phil: they absolutely are. when that proposal came out four or five months ago, a lot of the venture capitalists that went through crash waived as many red flags as they could, it could and pearly -- and poorly. we can think of many other solutions that i think are more palatable for companies to enact for their employees. the easiest ones to do our companies can proactively convert equity compensation at departure to extend the amount of time to own shares, that is
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something we saw from interest and coinbase many years ago when they were private. something we work on with companies is we can help companies allow employees to share some of their shares to help cover the cost of any exercise or tax implications as well. companies can reduce fair market valuation which is used to determine tax implications and price at which you get stock options. we saw some companies do that and hope to see many more as well. emily: what is your advice to employees, they just got laid off, don't know what to do. how do they evaluate the decision? phil: it's a tough one. my first advice would be to ask what choices they do have with equity. the second thing i would ask is
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if the company is aware of investors looking to grow their position. i think that is the first one. the last one which is self-serving is to explore what options you have and get liquidity for your shares, while the market has taken a turn, we have seen investor interest at lower prices. point encourage employees to start having these conversations as soon as possible. emily: interesting. lots to consider, appreciate you taking the time. coming up, the crypto futures exchange that just halted all withdrawals. we will speak to the ceo exclusively about what happened, and how fast they can fix it. that is next, this is bloomberg. ♪
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emily: it is time for our crypto report. i want to take a look at the crypto liquidity. a vague tweet by a founder of the crypto hedge fund created more anxiety.
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then, pausing withdrawals. now, coin flex is in the spotlight. sonali basak is here. sonali: in addition to the situation you talked about, the counterparty was not three arrows capital or another lending firm. equally interesting, we -- how the industry is shoring up in the crypto winter. we want to talk about that with mark lam, the ceo of coin flex. they are looking to bring back operations in a more normal form and resuming withdrawals by thursday, june 30, and one of the ways you said to me is by issuing a new token. $47 million worth with a 20% yield.
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that is a large returned to investors. mark, tell me, what does the token represent? who is it making whole, how is it making them whole, and what happens if you can't raise money? >> at coinflex, we believe in markets, transparency and tokenization. we have done that with other products. we are doing that with the recovery value usd. it is a way for us to use tokenization to solve this problem, where we have this asset, it's an ultra high net worth individual, they owe us these phones, -- funds, and we want to make it such that assets all matchup and everything
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matches up and away -- in a way that we pass on the risk to investors and are eager for this risk. right now, we cannot have withdrawals. there a lot of different ways of solving these problems in crypto finance. crypto is on the cutting edge of finance. one of the ways that has not been as successful is when companies put their head in the sand or refused to communicate and hide behind lawyers. rather than treating lawyers as advisors in creating solutions that resolve the problem extremely quickly. where more people get to participate in the solution. sonali: assuming this works and withdrawals begin again on june 30, are you afraid you will face a run on the bank?
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mark: we are not worried about that scenario because upon the fundraising being concluded, everyone can withdraw. we want everything to be matched at all times. we have to intervene, do these things, we are going forward. we're going to take further steps on making every aspect of the exchange transparent including the futures positions, the value of the coin and account positions public, by an external auditing firm, and we think that ultimately, that is in line with our vetoes from day one. we wanted everything to be market-based, transparent, tokenized. emily: what is your long-term plan to make sure if we experience this kind of volatility, shirley the crypto
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market will experience this volatility, that this won't happen? that it doesn't come down to or depend on one individual? mark: part of the issue, and this is common practice in crypto and originates from traditional finance. we had a customer on a personal recourse based noun the quotation account. we will be eliminating that type of account. we'll be making these positions public, and you want just have to take our word for it, we have an auditing firm we are working with to have them publish this data. this is much needed data. there is not a single crypto futures exchange in the world including here in the u.s. that makes this data public around position sizes and margin ratio, balances and collateral backing those positions. it's one of those things where there is a balance between
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transparency and privacy. we need to do at least as good with respect to transparency, so depositors and users can feel comfortable trading. it has a damage to privacy, but we think traders will find that worthwhile for the additional comfort they get from knowing the risk and leverage implicit. emily: what is your message to customers right now? what is your level of confidence that ended the three days between now and june 30, you will make that date? mark: i am highly confident. we have spoken to people nonstop since this issue arose. we have more than half of the amount needed in soft commitments to get this done.
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i am highly confident there is a strong appetite from within the crypto space and broader institutional space in this type of token. we are turning a problem into an opportunity. an opportunity to get to resolution very quickly. this is something where at the end of the offering, the problem is solved with a matter of days, this is something that has been done before in crypto history and extremely successful. sonali: what kind of pressure do you feel to reveal more details about who this investor is? especially, when this new token is tied to their fortune? the people investing in this token are doing it to make this other investor whole. mark: that's a great question.
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the market is always going to demand more and more transparency. we are going to be revealing as much information as we can, at this point, this is what we can give. we wanted to very quickly be fully transparent about what happens, how we are resolving it, and our plan going forward to protect customers and be fully transparent about all of the leverage and how it is collateralized. i think the market will demand that information. i think the market will pursue that information. that is the beautiful and powerful thing about markets and transparency, and i think that's what going to happen. sonali: how do you know whether he or she can pay you back? how much confidence you have you will get that money back, and
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what confidence can you give customers you will remain solvent and be able to continue operations if they can't? mark: we have alternative mechanisms. the focus is because it opens up a new type of asset for customers to invest in. there is a lot of people familiar with the situation, people who want access to this type of yield. we want to turn this into an opportunity for people. we want to be transparent. we want to make it clear going forward, every bit of data about the innerworkings of our exchange is going to be public. we are extremely public about
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all of the data in our exchange, but this is an area to go further, more cutting edge. emily: mark lamb, ceo of coinflex. appreciate it. coming up, the crypto meltdown is not sparing anyone. next, the tether stablecoin. why and how, after the break. this is bloomberg ♪
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emily: short-sellers reportedly have been ramping up bets against the world's largest stablecoin. more traditional hedge funds have executed trades to short it through genesis global trading.
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some hedge funds are shorting tether as a bet about the broader economy. taiwan's global wafers plans to build a silicon wafer plant in texas, the biggest of its kind on american soil. the company says the factory will close a critical gap in the supply chain. it is being built in sherman, texas. that does it for this edition of "bloomberg technology." we will be back tomorrow, the arm ceo will be here, cloudflare's matthew prince, this will be fun, allison felix has a tech angle for you. we will talk to her about that tomorrow. i am emily chang in san francisco. this is bloomberg. ♪
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