tv Bloomberg Technology Bloomberg March 10, 2022 11:00pm-12:00am EST
>> from the heart of where innovation, money, and power collide, this is "bloomberg technology." with emily chang. emily: this is "bloomberg technology" and in the next hour, gas price pain, uber and lyft drivers take-home pay plummeting. gas prices are soaring. are the companies doing enough to help? google and apple maps cannot escape politics.
things becoming increasingly complicated as russia rains down on ukraine. relief efforts to help millions of ukrainian refugees and people who stay behind. we talk about the challenge of the just accept humanitarian aid and how the or is roiling global supply chains. first, talks stalling as cease fire fails. getting a look at the markets now with our ritika gupta. ritika gupta: it was a down day for the equities and it was a nasdaq 100 underperforming again down to what we saw in the bond markets with yields on the 10 year closing down as high as 2%. back to the highs of the year, high yields don't bode well for tech. plus that prospect of inflation
coming into bang in line with what hasn't even yet. taking a look at where oil closed in the session, $106 per barrel, earlier as high as $114. a big swing there. taking you into my terminal to show you the chart, i'm looking at the idea that yes, tech had a bad day but it could be worse. take a look at the nasdaq golden dragon index. chinese companies listed in the u.s. plunging today, a big part of what weighed down the white line on the chart. looking at the chart that's february of 2021.
the star performer. this is more than 60% below the high. compare that to what we are seeing in the u.s. tech, a banner year. 2021, 2022, a big divergence between the purple and white lines, it would be interesting to see. similar to the losses we saw in those chinese tech names. emily: i want to stick with today's market moves over the last several days and weeks, since it started before the invasion of ukraine. what do you make of the big tech selloff along with broader equities. any sign that this is going to
slow down? >> i don't think so, i don't think it is going to slow down. you had two years of dramatic tech outperformance. but the most important thing outside of russia invading ukraine where the rising rates that began before than. we haven't had an aggressively uncertain rising rate environment in years with a pocket at the end of 2018, the last time the nasdaq corrected like this in that is when we didn't have a decade high for inflation and the outlook for interest rates as well, high, bad for future profit high multiple stocks and i think tech is likely to be under pressure with very few pockets of safety. that's not outperformance, that's safety through the middle of the year. emily: in the middle of it all, amazon doing a stock split. no material impact but certainly a psychological impact with shares rising today. i wonder if that would have been higher if we hadn't been facing this geopolitical backdrop. what's your take on this move? >> i don't think that this split by itself does anything fundamentally but in terms of
the buyback, putting it in the 10k, they announced it was doubled and here's the backdrop. this is the first time in a decade that they have bought back stock. it's chump change in terms of what's north of one trillion. it's a signal. the way they think about this is their our price points at which they signal the market where the stock got to cheap. it's one of the big reasons the share has moved up. it's more likely to be able to trade hole in the market. solid balance sheets good business models. in both cases they are at a
trough level. incremental and positive news on amazon last night. emily: if they are more safe, what's less safe? >> anything with a high market outlook. shopify, things like that. emily: why shopify? >> not great cash flow. if you look at tech, software, to, anything that traded north of 10 times sales it is corrected more than the market year to date. there is that sphere of discount dates rising. countries whose profits are in the future will be discounted more, today with less. those stocks will be under pressure for quite some time. the company sets different fundamentals, technically the pressure out there on high multiple stocks.
emily: meta, twitter, they had issues leading into this given that they change the name to something that didn't exist yet, facebook selling off for weeks leading into this. they made some fairly preemptive moves when it came to russian disinformation but now they face the other side of the digital iron curtain, which putin has set down. what is the outlook for these companies? >> for facebook there are three overhangs. concerns over the apple privacy changes and the work around and third is the rise of tiktok as a competitive risk for facebook. they are all behind that decline in shares year to date. it's a high quality with tons of cash buying back a lot of stock. i actually think that if you have got 12 months of stomach in you you can make back a lot. when people via growth equities
they will go back to the highest quality assets and then facebook and there may be another pocket, by the way. booking, expedia, the market will buy those before they get the more speculative high market future profit stocks. emily: interesting given the pain of jet fuel prices. great to have you here on the show. it's the first major wall street bank to leave russia in the invasion of ukraine. goldman sachs trying to close their operations in russia. they already started the process and russia accounts for a relatively small portion of their global banking business but their credit exposure at the end of last year totaled $650 million.
emily: russia's government is moving closer to seizing and nationalizing foreign owned companies leaving the market over the invasion of ukraine while planning measures to cokes others into staying. clayton harris is with us to discuss. what companies is russia trying to take control of, even temporary control, and how with the government lit off? >> they are not revealing a lot of their plan.
you can make some guesses based on the public comments from officials in russia that have walked out from other agencies about the aircraft. in russia right now it is owned by less than what they might see, it's one example of a russian agency who said no, we will not necessarily do that, that person spoke out of turn. this is a confusing time but what the action of the government would allow them to do is that if there is a company where you have russian members of a board, maybe that's a local operating unit or something like that, that might be a company that could be taken over on a temporary basis. this is very, very fuzzy and can be interpreted a lot of different way is and probably will be depending on what happens in the weeks to come. if you are a company operating in russia or was until recently
operating in russia, i can guarantee you are looking at this seriously to figure out what it means. the companies that we have reached out to, they are so far saying they don't see any immediate concern of any asset futures. this is something that will play out for a while. emily: we just reported on goldman moving out of the country. what can companies do to avoid the fate? >> companies have been careful in their language about what they have been doing when they stop doing business in russia. you see the words suspended and paused quite a bit. mcdonald's being a prominent example, companies paying employees still at a local level.
you can think of that as one strategy to avoid getting nationalized or having assets seized, you could argue what -- are you you are still there, paying employees, just not actually doing business at the moment. but you plan to eventually. that may be one tact the companies are trying to take to protect long-term interests. ultimately, though, if you have money in the russian economy that you can use to pay workers, at some point you have to figure out how to replenish that, it could run out. depending on how long the situation takes to unfold, you could have a situation where companies are trying to hang on by paying employees who might have to make another decision. emily: again, what does this mean for everyday people in russia. everyone is feeling the pain at the pump.
especially drivers for uber and lyft as the war in ukraine drives gas prices in the u.s. to an all-time high. jackie dava lowe's has the story . in california i saw prices as high as seven dollars. unprecedented. how are drivers dealing with this? >> it is truly taking a huge cut out of their take-home pay. the impact has really been indiscriminate. fuel-efficient cars, previous is seeing their gas bill go from 10% to 60% of their net earnings. this is just completely unprecedented, making them reevaluate is this side hustle even worth it? emily: what are they doing about it? >> drivers tell me it's not enough. they have partnerships with get up side, effectively a rewards app that gives you cash back for fuel purchases but drivers tell me that this is a laughable solution and not sustainable, as you said, gas prices are upwards of seven dollars.
one driver spoke to me and said that he was paying upwards of five dollars, losing money every ride he takes and doesn't have the option to quit the app but it begs the question should companies be on the hook for helping them? especially because as independent contractors they are the ones footing the bill for every single expense. emily: the president himself said look, the american people will have to be prepared for a certain amount of sacrifice and pain if the united states is going to take this kind of stand against russia. in talking to drivers, do they understand, do they sympathize with the ukrainian people? and what the united states is trying to do here? >> there definitely is a huge tension there. they completely sympathize as they have been putting up with high gas prices and the impact of inflation for months.
it has been acknowledged by even the uber ceo. it's not the first time they have raised the alarm about the impact of gas prices and it just seems to be a real breaking point for so many and while i think they understand the broader plight of the ukrainian people and the complex nature of the conflict, i think at this point they have enough options out there within the gig economy from doordash, instacart and lyft, there are other places to go outside the gig economy, it's something they are considering. emily: what does it mean, are prices going to go up? >> we have already seen higher fares for a while. uber for example said that for every 20% increase from today's average gas price level, consumers will only see a 1% increase in fares. that may sound small, but when
you take into account how quickly demand is coming back and supply is not shifting as quickly to meet that, we are going to see elevated fares for at least a few more months until they are able to sort through the supply issue where gas prices start to trickle down to how much we are paying in fares overall as well. emily: thank you for the update. coming up, apple and google maps are in the crosshairs of the war in ukraine. how big companies are navigating geopolitical turmoil, next in bloomberg. ♪
emily: soon after russia launched an invasion of ukraine google and apple disabled key features of their map services there. out of concern that live insights into what streets or shops were busy could be exploited by russian forces to harm citizens. in fact the nuances of mapping have become a significant more hot potato in the last few weeks. talking about that and more with chad anderson of early-stage venture capital looking into space-based technologies, many of which are delivering information to these tech giants enabling them to change these digital maps in real time. what do you make of this new, if you will, digital battlefield? >> the russian invasion of ukraine has highlighted the strategic advantage of space infrastructure for the u.s. and its allies. clearly a target and among the
critical domains to protect our this conflict unfolding. you know, with the google maps apple maps scenario, this is some of the first information we got about the russian invasion, it came about because of the traffic information from google maps. these companies have decided to turn off that functionality. they are still giving turn by turn directions but they have turned off the foot traffic functionality because it can alert the other side as to where ukrainians are and as well, it goes both ways. they decided to turn it off to protect those citizens of ukraine. emily: and at what point does that undermine the ukrainian efforts to resist invasion or flee to safety? have we outsourced too much power to big tech? >> they turned it off from a
global perspective. i'm not privy to who they turned it on and off for. so, i imagine that companies have this type of functionality and capability. emily: let's talk about the space companies getting dragged into the mess. space satellite technology companies floating around relatively quiet outside the earth's atmosphere that suddenly find themselves in the middle of this geopolitical mass. >> this crisis has highlighted the growing capabilities of commercial satellite companies. macs are, planet, black sky, providing observation on what's happening on the ground. this is vital information for anyone trying to keep up from a humanitarian perspective or monitoring the situation. military civilians.
this is giving us without the spin we are able to see with our own eyes what's happening on the ground and i think that the amount of data available today is really unprecedented, this open source information is really important for everyone involved. including the reporters on the ground looking to tie up the pieces of the story together. emily: we saw elon musk and his star link jumping quickly to the aid of the ukrainian people, driving home the point about how powerful and impactful these technologies can be in terms of changing the shape of modern communication. you know, what kind of risks do these companies face and how are they navigating the challenges internally? >> certainly, spacex turned on their satellite constellation and made it available in the ukraine upon request.
it really is showcasing what a capability like this can provide in terms of redundancy and capability, vital communications services layer in a previous era the invading country could just attack the fiber line or attack in some other way and shut off the internet. we really have resilient communication connectivity here, also essential in terms of getting vital facts from the source information. we talked about this a lot in our latest thesis paper, the nature of satellite communication is going through a fundamental shift. going from being a niche product making up less than 1% of global broadband internet to being an internet backbone in space where we could see 20 times the capacity come online in the next five years with a latency that look rivals terrestrial in there isn't much that russia can do
about it from a practical perspective. elon musk says they can shake their fist at the sky. russia is trying to jam the signals now but spacex is able to overcome that with a simple software update. cybersecurity is also a key area here for companies and the military as well. emily: it's a fascinating domain given that they are always showing different maps in different countries, looking at it different ways, you wonder how they can overcome the transparency or lack of transparency issues there. thank you for helping us work through that, it's a complicated and evolving issues. coming up, a new release from peggy johnson about the metaverse and the future of mixed reality. this is bloomberg.
of a curve that will just kick off dramatically over the next decade. emily: sequoia has invested dramatically in bitcoin as well as other companies. when it comes to the token side, what are tokens and things you find particularly interesting? >> it is a great question. we watch the developer momentum on blockchain very closely. that is an important signal for us. bitcoin has a particular type of community. one of the companies we are privileged to partner with where block is very involved in decentralized finance, nft's, web applications, and we have also seen a lot of development on solana and some newer chains. we watch all that very closely
and that is how we determine where we want to double down and spend our time. emily: last year, 20% your new investments in europe and the u.s. were in crypto. that is a big part of the pie for a long time more traditional tech venture capital firm. do you see that rising? is this going to become an even bigger part of sequoia's portfolio? >> i personally do. as someone who spends all my time in crypto, i think there are just tremendously talented founders entering the space and more and more engineers, developers, designers who are excited about doing in all aspects of crypto -- about building in all aspects of crypto. we believe crypto will impact both the financial sector as well as broader internet services, so we expect crypto -- we expect to be eventually in
all of those sectors, and i would expect everyone at sequoia to be in crypto. emily: you talked about how this will be different from traditional capital investing. tell us more about the structure. how are your investments in crypto going to be different than what we have seen sequoia do before? >> what is interesting about investing in more traditional equity-based startup's is you get a piece of paper that says you own a portion of the company, yet you don't do much with that piece of paper over the next years. you help the company grow, but the piece of paper is irrelevant. in crypto, it is different in that you are getting a token, you can use that to the benefit of the company or the project. what we can do now more flexibly is be able to stake our tokens to secure networks, we can provide liquidity to protocols and do a lot more activity with our tokens then you would with an equity. emily: we have seen a ton of
activity in the crypto space. the power of crypto to be able to support efforts -- war efforts. crypto being used by russians who are facing sanctions to suit -- second that -- circumvent the sanctions. where is this headed? >> we are all heartbroken by what we're watching. it hits very close to home printed sequoia had ukrainians, companies that have employees in ukraine. many users. it is something that we watch every day and our heart goes out to all of them and we do what we can we are really proud of the way that are crypto and other companies have stepped up to support the efforts. i work closely with sam and the team at ftx. they have gone above and beyond to support users on the platform as well as comply with all sanctions that they are very capable of doing.
it is often a misnomer that crypto cannot supply it -- comply with sanctions. we can. there other companies -- airbnb has been offering housing. folks are doing everything they can to support ukraine and comply with all of the efforts for sanctions. emily: do you look at crypto currency a safe haven or a safer asset than traditional asset? we have seen some things we wiped away, we have seen a lot of volatility. how should we make sense of crypto as an asset? >> we are in an interesting moment where doug gets tainted by investors with -- painted with a broad brush.
when the world comes to understand crypto, we will see that assets are quite different. the volatility that you see with bitcoin or what you're buying is very different and what you're buying with an application token or any other type of crypto asset whether it's an nft etc. you can look at the volatility and say is bitcoin trading more like an equity or a commodity, how should it trade? the reality is we are early and -- in the world understanding crypto and the way those assets trade over time change a lot. emily: michelle, thank you. stripe is announcing their lunching payment for crypto services.
they will also be partnering to improve the know your customer protocols. we had a chat about crypto a few months ago. >> what we are hung up about is 22% of commerce is cross-border. crypto is a very enticing direction for trying to solve that. emily: coming up, we will talk about web three mixed reality and the metaverse. that is next. this is bloomberg. ♪
emily: welcome back. get ready to launch, a company has raised $500 million in funding. shifted to enterprise customers. i want to talk about that. what are some key changes that you are making with the latest version of the technology? >> thank you for having me back. the latest version is 100% focused on enterprise. what we heard folks in the areas of health care, defense, manufacturing needed work a bigger field of view. that is the area where you can place digital content. we have also improved the optics from one end to the other. there's better text legibility, the image is crisp and clear.
we have done a lot to focus on the improvements needed to meet the specific use cases in those three areas. >> what is the market opportunity? who do you see using this? >> the market opportunity is $39 billion 2025. the real opportunity is in those three areas. in health care, we are making the device able to take into the operating room and doctors can where it during surgery because they can still see the patient in front of them but they can hang screens around them to check the patient's vitals. we have also changed the orientation of the field of view to be more up and down so they don't have as much body movement. they can glance up, see the vitals, and down at the patient. in defense, we have a variety of use cases around training and command-and-control scenarios. then front-line workers to give them the ability to be hands-free and continue to do
their job but to have digital content put in front of their eyes that could help them do their job better. emily: the oculus headset is the market leader for vr. you have others. where do you see magic leap's headset competing and how? >> ics as the leader in the fully immersive ar sector. some other devices may need -- meet a narrow enterprise use case.
with all of the improvements in our device, we can meet -- you can think of us as the higher end where you need more accurate placement of the digital content in your physical world. those are the requirements of the two markets we're focused on. emily: the device looks like a blend of ar and vr printed why do you think mixed reality is the way forward? i have spoken to those who think that it's all about vr. some employees don't want to be stuck in a virtual world in business. >> you are right and i think the real promise in the metaverse is augmented reality. we want to see our physical world and having the content intelligently placed into that world. we are focused on ar, but we did introduce interesting new innovation where you can take the light out of what you are seeing and have almost like a super focus on something.
doctors can take the light out of a bright operating room and just see the thing in front of them they are operating on. we can do that globally or just in segments in front of the screen. it's complex, because ar is about introducing light in front of your eyes and we are removing it. emily: do you think the metaverse is overhyped? >> i think we are at the beginning of technology and at times, new technologies get a hype cycle. we are staying grounded in what the technology is capable of doing today. over time, i think you will see the further expansion into consumer ar. the device will have to be smaller, lighter, more of a format like glasses. we have made a step toward that with magic leap number two. it is half the volume of number one but it will need more for consumers. emily: thank you for stopping by. coming up, how to keep ukrainians -- help ukrainians fleeing the destruction of their lives and country as the numbers keep rising.
emily: with the russian invasion of ukraine escalating, so is the flood of fiji's. -- refugees. tom mackenzie is on the ground at the poland ukraine border. >> we are on the border where a number of refugees continues to rise. u.n. is saying 1.2 million people have crossed over from ukraine into poland in the last three weeks. we are now three weeks into the war.
the needs of these people is acute in temperatures well below zero. freezing temperatures and difficult conditions. we are hearing of more funding. the house of representatives signing off on $13.5 billion were the funding. art of that will go toward the humanitarian crisis. the imf pushing through emergency funding and the europeans as well. officials say they expect to see the first eu money coming through as soon as next week. this is a reminder of the need for spending for people whose lives are very much uncertain and the prospects are unknown. what is largely a population of women, children, and the elderly. on the polish ukrainian border, i'm tom mackenzie. emily: with ukrainians taking refuge in poland along with moldova, romania, and other countries, this adds logistical challenges on top of the
devastating humanitarian crisis. flex port is offering assistance. i want to bring in the ceo for more. talk to us more about talk to us about what your company is doing end of challenges you are navigating. >> flexport.org is our arm. we are organizing coordinating the overall refugee sites to provide relief goods, medical care, shelter and other things needed to help these people. they are on the ground, and we are partnering with unicef and a handful of other aid organizations to help fulfill the wish list. one of the products they need. also, corporate and companies that we ship for to get products flowing from wherever they are in the world, a lot of it is coming from the u.s. because
that's where we are headquartered. cheaper if we can find in europe and bring it by truck within the eu. it is a drop in the bucket, but we are getting started. we have raised over $15 million from donors to help us pay for these and get the transportation to get the goods flowing. emily: what has been the hardest part of getting aid to the places where it is needed most? >> historically, it's coordination as much as anything. over 60% of the goods donated are delivered to humanitarian disaster sites. only 60% of goods and up and landfills. it's the wrong goods received at the wrong time and there is no one there to receive it.
we started this in 2017 following the war to support refugees in turkey and jordan. working backwards from those sites of what are they need? what are the people on the ground doing their needs assessment? here we are ready to receive them. then partner with agencies and nonprofits around the world to make sure the goods don't go to waste. if something arrives and no one one's expecting it and no one knows what to do with it, that can slow things down. too much is often donated at the wrong place at the wrong time. that's were trying to solve. emily: this is already disrupted the supply chain.
at that the impact on russian oil. what shocks are you seeing in the supply chain and what are the reverberations you are expecting? >> we have been through a couple of years of supply chain shocks. it is resilient until it is not. big thanks now are we have lost the ability of the air cargo industry, it can't fly over russia anymore. that means extra stops, delays and higher fuel costs. russia is one of the biggest providers of energy to the world including feel -- fuel for aviation. the thing that has me worried the most is the loss of grain. russia is the largest exporter
of grain in the world. if the grain doesn't reach the market, it looks like ukraine will not plant this season, that will drive huge problems for food importing nations. belarus is a major exporter of fertilizer. many developing nations depend on these inputs and food for their population. it can get scary if that doesn't arrive. >> surely, that will impact supply and prices. mila kunis and ashton kutcher are directing parts of a gofundme that they set up. another ceo has been involved. i'm curious how much he has donated and how much crypto donations in general have contributed overall? >> we have great corporate partners. they are setting up to promote the ability for all users to provide donations via crypto to the gofundme that mila kunis and
ashton kutcher set up. i don't have the exact statistics for what has come in. that is happening right now. also shop a fight is a major investor, it made a meaningful donation to the cause as well. i'm excited to work with such great people. emily: we will continue to monitor efforts. thank you for continuing to monitor and get the supplies to the people who most. that does it for this edition of bloomberg technology. we will see back here tomorrow. this is bloomberg. ♪
>> the following is a paid program. the opinions and views do not reflect those of bloomberg lp, its affiliates, or its >> this is a paid advertisement for csn. >> many times i have been out here with the new point release and i have asked for a drum roll, and in all honesty in the past it has been nothing but hyperbole, at this time i would like a drum roll. i really think i should have one. this is i think the singu