Of a u. S. Trade war, is it a risk to investors . First, to our top story, facebook shares took a hit earlier today after the wall street journal reported Mark Zuckerberg knew about the social networks problematic privacy practices. Facebook uncovered emails in the process of responding to a federal privacy investigation, raising concerns that they would be harmful to the company if they became public. The journal says that is part of the reason why the company salt sought a quick settlement. Here in me in san francisco, our bloomberg tech executive editor, so, tom, explained this to me here. The nuts and bolts here. What is the journal saying that facebook uncovered . Tom they are referring to an email exchange, which, by the way, they have not seen them. We certainly havent. We dont know where they got them. Apparently there was this exchange in 2012, around the time that the ftc was handing down this consent degree punishment about facebook and its privacy practices. At the time, there was an interchange among some employees at facebook, including zuckerberg, about certain types of information on millions of facebook users that were available on this thirdparty app available to its users. The question went something along the lines of, is this possible, and is there anything that we should do about it . And the Exchange Went on after that, but, again it raised , questions about what it facebook know, what did Mark Zuckerberg know, when did he know it, did the company take adequate steps to deal with privacy concerns on the data that was leaving the platform . Emily now, based on my read of the journals reporting, there is also indication that this happened around the time of the ftc consent degree that facebook agreed to abide by and indicated that perhaps abiding by that decree or following those new orders was not a priority, Mark Zuckerberg, however, a spokesperson for facebook said today that at no point did mark or any other employee knowingly violate the companys obligations under the ftc consent order, nor do any emails exist that indicate that we did. How do we make sense of that . Tom look. The issue is this is why Companies Settle litigation or settle internal investigations and regulatory probes, but inevitably what happens whenever somebody goes crawling around into executive email boxes, things come out that may not reflect well on those executives. We have seen that over and over again, including in the case of facebook earlier this year. Lawmakers in the u. K. Released at this selective disclosure of emails and internal documents from facebooks earlier days, which did not paint Mark Zuckerberg in a flattering light. He appeared to be this very moneygrubbing executive who cared more about facebooks bottom line and growth than about protecting users. Again we have seen this movie , before, where emails can be released that, at least without additional context, may not look great for these companies and that is why we may see facebook settle this ftc case, as they may do other similar cases. Emily the ftc does have the option of taking facebook to court. But, as i understand it, that would be more risky for both sides. They might get less. Meantime facebook has said they , set aside 5 million for settlement. We have been waiting for news about the settlement, but it hasnt happened yet. Tom, what is the latest on that . Tom right. They set aside 5 billion for that, which i haste to say that that adds up to chump change for facebook. Is that enough for penalty, and are there people in the regulatory side of the Trump Administration who are saying, that is not enough . And so, we do have to ask the question of do we have evidence, and do we leak it to the journal or other publications, which as it may portrayt, zuckerberg and others in an unflattering light and raise questions about whether the 3 billion to 5 billion that they might be fined is sufficient. Should we go to the place where we ask them to change their practices and extract a bigger chunk of flesh from facebook . Emily meantime, shira, the punches keep coming. There has been another fake video posted on facebook, this time of Mark Zuckerberg in the style of the nancy pelosi video. Facebook has decided not to take it down. Meantime, Mark Zuckerberg has reportedly called nancy pelosi a couple of times, but she has not return his calls, so the plot thickens. Shira it does, indeed. All this goes to show that the only bipartisan issue in washington right now is hating Big Tech Companies. Facebook most of all. We have seen this from nancy pelosi, from donald trump, who has said we may need to take a look at the monopoly power of some of these Big Tech Companies and also he said that facebook and google and other Tech Companies suppress conservative voices. There has not been evidence of that, but you see on the left and the right side of the political spectrum that facebook is not popular. Emily so, tom, what is next . Tom well we are waiting to see , what the settlement is going to be, what kind of fine is going to come down. Were also looking at what this division of big tech between the doj and the ftc what does that hold for us . Doj, it seems like it is gearing up for some kind of probe of google. Doj will have oversight on apple. Ftc has got amazon and facebook. So lots of potential for headline risk to these companies in the months and weeks ahead. Emily ok, we are keeping a watch on the very latest. Tom giles, thank you. Meantime, on spacex launched the wednesday, radar constellation carrying a new generation of satellite observation satellites. The falcon 9 rocket and payload rumbled along wednesday from foggy Vandenberg Air force base on californias central coast. The three satellites began to deploy about 54 minutes after launch. Rockets laed the unch for a landing on a military base. Coming up, the year of the tech ipo continues. We will talk to george kurtz about going public next. If you like bloomberg news, check us out on the radio. In the u. S. On sirius xm. This is bloomberg. Emily the year of tech ipos continues. Shares of a Cybersecurity Company soared in its first they are trading. Stop jumping 97 at one point. Crowdstrike raised millions in its ipo, giving it an 11. 4 billion market cap. Still like many recent tech ipos, crowdstrike is unprofitable. The reported a net loss on revenue of georgia 50 million. Lets bring in the ceo who joins , us from the nasdaq in new york. Congratulations. It is a volatile market, so the pop in the stock is welcome. What made you decide, given all of the issues, a lingering trade war between the u. S. And china, for example that now was the , right time to go public . We are, at crowdstrike, focused on going public when we are ready. Im our perspective, we have always taken a longterm view and today is one day where we raised financing round and we are to focus on the future. So i think we should look back at today and celebrate, but tomorrow, we are back at it and focusing on Customer Success and preventing breaches for companies around the globe. Emily how much are you following what is happening globally and how much exposure do you have to china . George we dont really sell in china. So that hasnt really affected us. I think from a china perspective, we typically see a lot of activity around geopolitical tensions and the activity tends to manifest itself in cyberattacks. So with some of this unrest, we continue to see nationstate attacks, and, again, why we started the company was to help organizations around the globe event against these determined adversaries and nationstate actors. Emily it is certainly what is happening with the u. S. China trade war impacting u. S. Companies. The cybersecurity landscape continues to change. The Threat Landscape continues to change. How do you stay competitive in an everchanging world . George a big part of our success has been the fact that we have built a cloud that form and in security, there hasnt really been a security cloud. If you think about service day, and workforce, there has not been adequately company. Part of our approach has been to collect a lot of endpoint data, Security Threat information. That has driven a lot of our Artificial Intelligence algorithms that we have. The more data we consume, the smarter our technology tends to get in identifying breaches that have never been seen before. So that is a big part of the overall story, and i think what we focused on is that platform approach, as opposed to building yet another point product, and that has resonated with our customers. Emily what are the biggest trends you see on the horizon, given that we are going into the heat of the u. S. Election season , and the last u. S. Election was certainly not secure . George well, whether it is elections, intellectual property theft or distraction from ransomware, these are threats that organizations have to deal with. I think what it does underscore is just how Vulnerable Companies and organizations are to these sort of cyber attacks. Unfortunately, they have been burdened with Legacy Technology that has been incapable of identifying these breaches. Again, that is part of what we really focus on, which is Building Technology not only to stop malware, but the broader issue is actually stopping breaches. Emily what trends are you seeing and company decisionmaking . Rising to this threat . Are they as protected as they should be, or are they still very vulnerable . George i think, more broadly, they are still viable. Unfortunately, there is a tapestry of Security Products they have been using that have not given them the visibility or the protection that they need. From an awareness perspective, the good news is boards of directors are taking this seriously. This is a board issue, a risk issue, and when you look at some of the attacks we have seen a few years back, where ransomware literally took companies off the map for many weeks and months on end, in some cases. It moved from purely being wow, this can be a Systemic Risk for corporation, and worst case, they are spending hundreds of millions of dollars in trying to recover their company and bring it back to health. Emily meantime, we reported that cisco held talks with possibleke about a deal. That deal did not happen. Why did you decide that the right course was staying independent . George i cant comment on rumors, but our goal has always been to be an independent company. I think we built the company, we have operated it as if it were a Public Company when we are private, and i think our growth and our financials are, again, of the scale of what a company should be. We went public when we wanted to , and i think we have seen a warm reception today from institutional investors. Z, ceo of, george kurt the now publicly traded crowdstrike. Thanks so much for joining us on a busy day. Coming up, the sec has been debating its own ban that could stifle huawei. Can the Chinese Telecom convince them they are not a threat . That is next. This is bloomberg. Emily last year, the ftc chair ajit pai weighed in on u. S. Efforts to ban huawei by suggesting his company may prohibit companies from using huawei increment. Huawei has responded, telling the fcc that banning particular vendors on grounds of National Security will do little or nothing to protect the security of americas telecommunications networks. To discuss, we have todd shields who covers the ftc. How big a deal is this potential action . It would be a big deal in u. S. Domestic terms. This is a problem over the fcc. It is one everyone can watch. We can see the filings by companies by National Security experts. It is a bellwether in that sense. In terms of huaweis business, small rural 40 , providers. In terms of rural providers, big deal. They use huawei equivalent and need to continue to do so. Emily does huawei have a point in that changing out the equipment could actually make u. S. Networks more vulnerable rather than less . Todd the point is a little obscure to me in their filing. You know they would be buying , presumably somebody other than huawei. Perhaps the point huawei is making is that it would undermine the performance of those networks. And they point to some rural providers say, look. If you make a shut down our equipment, we may lose network performance, so would be hard to some and first responders, emergency services. Emily when will the fcc make a final decision . Obviously, there are a lot of simmering and lingering issues around huawei . Todd this is interesting. The fcc chairman ajit pai was in Congress Today and was asked, what will you do if mr. Trump decides to resolve the huawei question as part of a trade deal. He said he would still be strong on National Security, didnt tell us when there might be a decision or what it might be. So it looks like they are delaying waiting for some things , that are floating around here to resolve. Emily ok, bloombergs todd shields, thank you. I want to continue this discussion on the security of five g networks. Our next guest in new york, a , and justat deloitte named the new leader of its u. S. Cyber practice. In washington, ceo of National Security services. I will start with you. What is your take on the ratcheting up of u. S. Action on huawei while we are still waiting for the u. K. Government to make a determination about whether to use huawei in its networks at all . Hi, emily. The geopolitical underpinnings of 5g are pretty interesting. The reality is the u. S. Government feels that some companies in china, because of the strong leadership or ability to influence these companies and what they do, potentially could create problems in some of the hardware that they provide. This is a dialogue that has been going on with huawei since 2012 in the House Intel Committee report related to it, so this is just a natural continuation. Underneath all of this, you have the larger issue of the dynamic between the u. S. And china and who is going to control and have the most influence on information in the future . And 5g is central to that. It really is the next generation orthe Industrial Revolution as some call it the fourth generation of the Industrial Revolution. Emily is the u. S. Government making the right call on huawei, given the importance of the future of 5g . Yes, and i think incredibly well said that when we look at 5g, it is the combination of industry and automation and when you think of all the different ways that we could be looking at the information coming in, it is billions and trillions amounts of information, whether that is facial recognition, Artificial Intelligence, just the sheer amount of data, you will have to have a harder look at the cyber activity and threats occurring around that data. Emily mark, lets talk about 5g in general and where, if not huawei, the market will be concentrated. I, what companies will be running the 5g networks . Whose equipment will be embedded in these networks around the world . Mark that is a great question and somewhat misunderstood. There are three and to end hardware infrastructure providers. And others. Kson, they can do endtoend. We have a bunch of Device Manufacturers and all sorts of other players. A lot of the chips that go in our u. S. Companies. If you go away from huawei as the core provider, a lot of it would be nokia or ericsson and a potential combination of others. What is important is what 5g brings us. This is a huge change. Deborah alluded to a lot of this. We will be able to enable robotics. We are taking data that have been centrally managed in the early generations of the internet, and we are spreading it out to the edge, and there is going to be a lot more layers of Security Associated with that an opportunity around security. This is going to change the way we operate business and the way we as humans operate, much like 10 years ago when we had the advent of 4g, we didnt realize what smartphones would be like. We will have similar things here. So i think there are plenty of providers. I think the market will stabilize itself. Primarily, these are offshore providers. The u. S. Does not have a major player in that core backend. We do have the key telecommunication Going Companies and other players in this business. Deborah, ashile, the world becomes more connected, as we move toward 5g, whoevers equipment is running it, there is a huge talent gap in cybersecurity. How big is that gap and what is being done to fill it . Deborah i mean, the gap just continues to get larger. As was mentioned, when you think about supply chain, thirdparty risk management, we no longer have to look at cyber inside the four walls. Cyber truly is everywhere. Cyber is in everything we do. It is everything that we do. When you think about the cyber workforce, the talent, and where we will have to look to solve these problems and these challenges, we have to start looking broadly in creating new ecosystems, looking at k12 programs looking at how to align , with universities and joint ventures and venture capitalist organizations to find and identify new and distinct ways to be quite disciplined in the way we look at finding these workforces. Emily now, mark, what direction do you think we are going . Obviously, the u. S. Is cutting off huawei. That could mean china will cut off u. S. And foreign suppliers. Were seeing moves by russia to create a sovereign internet. Is that the trend, isolationism . At least digital isolationism globally over the next decade . Well, lets not confuse the prism of 2019 with where we may be in five years. I think that is critical to understand. I mean, ultimately, we have created a Global Internet and we w