Long time venture capitalist bill gurley joins us to talk about the path forward for Tech Startups and a new normal. Committee by a tommy autonomy, we will hear from an exclusive interview coming up. Are hearingtocks losses today as a fresh round of stimulus has been affecting the stocks. Lets bring in abigail doolittle. This has also touched the Biden Campaign and senator Kamala Harris and a couple of her aides. How does this impact today . Abigail there were so much movement. On the open, you had all of the major averages down. This has to do with the resurgence of the virus in europe. I would argue that that was the main bearish factor for the day. As trading went on, the cooler heads prevail. The s p 500 is a little bit down. There is a greater than 1 loss. That index is more domestically oriented, so that would support the idea that there were fears around the european virus cases. The bloomberg commodity index, a big piece of that copper, a big piece of the economy. Some investors are more optimistic about some sort of a reopening or a cyclical trade. However, where we we did not see any kind of risk action with the nasdaq 100 down, down at the open, and down at the close, investors are not wanting big tech. Some drag was biotech, for of the leaders and the laggers, and the index is down three days in a row. However, it is on pace for another week, being helped out by apple. Zoom is way taking off after yesterdays investor day. Traders and analysts really liking it. Day, islaggard on the with its worst day since 2003, after they discontinued liver and treatment that was expected to drive a new leg of growth for the company. You can see those shares getting punished. Some of the other big Biotech Companies were down. 2. 7 . Is down. 7 they have cut the price on the model s twice this week. We see folks take chips off the table, and in some ways, it makes sense. Emily thank you, bloombergs abigail doolittle. Since you mentioned zoom, we will speak with the cfo of zoom on the back of investor day. Turning out to twitter and facebook, said republicans are demanding to meet with the ceos of platforms after restrictions were put on the slowing of the spread of a New York Post oracle about joe biden and his son. The president is tweeting about this, saying that if big tech persists in coordination with mustainstream media, we immediately strip them of their protections. When government granted these productions, they created a monster. Tell us the latest. Ben i think what we are looking at is demands for Mark Zuckerberg to address the Senate Judiciary committee. What is particularly interesting, is that they are supposed to address the senate committee, and this could be another hearing coming up in just the next two and a half weeks. Talk to us about the results of this on the companies themselves. The companies saying that they did not do this, and that this article conflicts with policies about hacked materials wrote hack and leak. Where materials could be released to damage another campaign. Talk to us about the impacts on the companies themselves. Ben this has been a really long running battle, kier ndc. Dc. Particularly here in moree the companies to do of what they considered taking down political misinformation. Republicans increasingly are saying that you are taking down our stuff and censoring conservative views and conservative opinions. This seems to be coming to a pinnacle here, where they are saying that they are caught between a rock and a hard place. Very will be in power here in washington, and companies are saying what would we do if we do not take down this . And what will republicans do if we do take it down . This is a real catch 22. Year, they would have to live with the fallout from the election. Emily lets talk about what is happening on the section 230 front. I just spoke with the chair of the sec, and he was not to forthcoming about the sec plans. Whohave commissioners disagree that this is in the purview. How do you expect for this to play out . Ben there would be an advancing making. Rule this is a bit of a sprint. He does not have the votes right now. One of the republican commissioners said that he does not see this happening. President trump is trying to replace that commissioner. They would have to do that very swiftly. They are kind of racing the clocks if come to power. If President Trump gets another term, it is not so much of a problem. It seems like that is actually moving forward, even as you have these efforts in congress. Earlier this week, did one of the conservative justices on the Supreme Court that says this is too broad, and he wants to revise about 25 years of jurisdiction. Emily much to keep watching. Acute so much for giving us that update. Up, ipos are hitting the market faster than ever in recent history. We are talking to bill gurley of benchmark to see what his excitations are for 2020. This is bloomberg. Are running hot this year as investors build a new appetite for opportunities. There have been 309 ipos on the 75 et, and that is almost more than the same time last year. Many expected it to be different during the pandemic. Longtime venture capitalist bill gurley has been a vocal proponent, and he joins us now. It is good to have you back on the show. You have been out there a long time and saying that Companies Need to go public sooner. We see companies charging out of the gate. When you look at how they are going out of the gate, are you seeing them do it the right way or not . With snowflake going public, there was doubling on the first day of trading. Is that a victory or troubling . Any trader who is successful in their ipo is in a mindset of achieving. They are not in the mindset of, oh did i just make a mistake . Public, if of going people took the time to understand how it works, is to using a paper map to going on a drive today. There is such a more elegant approach. Because of conflict of interest and the money involved, a lot of people want the broken prices to exist and continue. Unfortunately, it is getting worse. Last year, and the year before, there was about 600 billion dollars in underpricing. 4. 5lake alone was billion. That is just one company. People had 4. 5 billion of wealth that they did not have the day before. We have a wonderful new age alternative called the direct listing that just matches supply and japan. Thats how matches supply and demand. It is night and day. A paper map compared to using waze. Emily i know that you are considering alternative facts and direct listing. Some investors have been disappointed in palantirs direct listing. How should companies be considering this . Bill i am a Firm Believer that once youre out in public, how you got there does not have a lingering effect on the company. I can give you a list of companies, amazon, square, salesforce, netflix, peloton, guess well of those have in common . They traded below there ipo price. In the long run, and how you perform as a Public Company is all about your longterm cash flow generation and how you do in your market. It is not about how you went out. Is anot by that there legacy for how you went out the door. That they wentlt out . Toly does that apply airbnb . It arguably waited too long to go public. Nobody knew that pandemic would happen. But that potentially impacted their fortune in the near term. They are getting out of the gate, and we reported that it is happening in december, postelection. Do they miss a window if they do it that way . Waiting so long, overall . Bill from what ive heard, and this is just rumor mill, they are going to do a traditional ipo. I think when they pulled back and covid hit them hard at first, the took on a bunch of debt. And think they want to raise capital. Are working with the sec to make that happen. I think that they are going to go the traditional route. Much have they lost by waiting this long overall . There is an argument that could be made that they could have done this years ago. There is a small set of people that happened to be people that i highly respect, and in the public side, it is and marc martin benioff and reed hastings. Searches, youle will see that they all say the same thing that i am saying. Properties are too afraid to go public. There are massive benefits to being first in category and being public and having control of the narrative with the buy side. There is a long walk post written on the subject, that there were voices in Silicon Valley about five or 10 years ago that are mostly raising late stage funds and were wanting to pick off investments before they got public. Equated thes analogy of football. If there were some college the topack that was in 50 listings of the draft and held a press conference, and he said i do not think im going to go in the nfl yet because im afraid of scrutiny. They tracked every stat and i do not will to be that shortterm oriented. If someone did that, they would fall immediately. But that is some of the behavior of the founders and so can value that founders in Silicon Valley. Once you start giving stock to your employees, you are in the game. You need to maximize your values. If you do not want to keep raising your game, at sell your company or higher a. C. L. That is. That is my point of view. Of hiring a ceo, you are obviously one of the early investors in uber. Do you think about his vision as a leader, by spinning off self driving a subsidiary, it is not rely on uber funding, is it it reliant with aligns with ubers goals . Bill their decision to be more diversified but from a geography standpoint by being global, and with the eats business place them in a place where they have a lot more going for them rather than being in a single category. I think that the place that they are in right now, there are a lot of investors that have interest, and they see possibilities for the stock moving higher. They want the company to prove that they can get to cash flow positive. The company has talked about that, and they have set future goals for that. When they achieve that, that is when you will see the real value on log. The real value unlock. Only uber is relying california lawmakers to decide if uber employees should be freelancers or under the companys coverage. What could be the impact on the companys future prospect . Bill to the extent that uber commitmentld to the of not operating here in california, i think that will be acrossetty profoundly the community. We spent so many years of car ownership, and the road would be better off if we lived in denser cities and had less car ownership. This is a patzer guess there. This is a path to get us there. Have committede to being a new drivers and the lowest unemployment in a lifetime. Gotteneople could have could have gone to a mcdonalds or starbucks, and no no one forced them to be an uber driver. You have untold flexibility in going to work. Lawne is trying to pass a that says you can show up to where to work whenever you want. That flexibility is an important right. Nobody is saying that. This flexibility benefit is super helpful to people that are in different stages of life, trying to cap debt, or put themselves through school, or be our work from home parent. Everyone canne understand because i think this could be unprecedented is that the error tour aboard that the Editorial Board has come out ab5 ishat the 85 b. S. The reason is that the lineage unions thing is that leans on the sacramento legislator to write a law targeting an industry that they do not even represent. It would be like nevada passing a law the impacts california residents. Said, if you hate citizens united, and you dont think that corporations should write legislation in d. C. , you should hate ab5. It was written by political donors. Emily there are so many questions about the impact on Silicon Valley longterm. What do you think the most dramatic changes will be in Silicon Valley in a new normal . What is different about this . Bill i think it is super hard to predict. Right now, i think that there are pretty dynamic things happening. Aople struggled with building large engineering teams here anyway, because it was so competitive and extensive. Overnight, when you need a marginal higher, every company is going, well maybe that person could be remote. Everybody elses. Startupsw backing without offices. We had not done that before. We do early stage investing. We back employees with five to employees, and they are a lot of times you are not thinking about there being in office. Far ends people on the of this, like with zillow and dropbox that they are trying to emote the most. And other founders are saying that they need to be in the office. I hate to answer a question with uncertainty, but i do not think that we know how this will play out. Emily there is a big question about the future of big tech are now. Talking about regulation earlier, we were talking about could pave its way to a big tech breakup amazon,hat apple, facebook are a big threat to a breakup . I have about two minutes left. Bill one thing that i think is inaccurate is that i actually think that the government restricting microsofts ability to leverage their way through the browser, open the door for facebook, google, amazon, if they had been able to tie the browser to search, the way that they went after netscape aggressively, i think that they would have succeeded. They really care that stuff. The governmentat created the window for many of these companies. I am torn from that point of view. Back smallerhat we companies, and having them thesect with us with companies, you feel the power. It is my way or the highway. Is an argument for breakup . Is that an argument for breakup . Bill the government going after ibm page the way for microsoft. Way for microsoft. Pointhink that there is a at which the leverage becomes so large, like this 30 thing that they are forcing arbitrarily on certain industries, that you have got to ask the questions. Maybe the pressure causes the behavior to change. I do not know if you have to take it to the extreme of breakup. But i do know that you have to pay to jim. Emily all right. From you, bill gurley benchmark capital partners. Think you so much for stopping by. Coming up zoom has hit a new record. Get the latest from the companys cfo next. This is bloomberg. Are you frustrated with your weight and health . Its time for aerotrainer, a more effective total body fitness solution. announcer aerotrainers ergodynamic design and four patented air chambers create maximum muscle activation for better results in less time, all while maintaining safe, correct form and allows for over 20 exercises. Do the aerotrainer super crunch. The prestretch works your abs even harder, engaging the entire core. Then its the back extension, super rock, and lower back traction stretch to take the pressure off your spine and stretch muscles. Planks are the ultimate total body exercise. Build your upper body with pushups. Work your lower body with the aerosquat. The aerotrainer is tested to support over 500 pounds. It inflates and deflates in less than 30 seconds using the electric pump. Head to aerotrainer. Com now. Now its your turn to lose weight, look great, and be healthy. Get off the floor and get on the aerotrainer. Go to aerotrainer. Com, thats aerotrainer. Com. Emily this is bloomberg technology. Im emily chang in San Francisco. Zoom is rolling out end to end ruption end to end come while generally be available for free and paid users next week. Zoom has been a prominent and efficient area of the coronavirus disruption to normal life, which has forced millions of us to work, study and socialize from home. We are joined by zooms cfo. You are wrapping up your resumet your z oomtopia event. I want to start with this end to end encryption. How will this change my experience . Encryptionnced our will be available next week. It is going to be available for boast free and for both free and paid users. What this means is users on the zoom client will have a higher level of security and privacy at their meetings and that the Encryption Keys will be generated by the participants machines themselves. It will be a really high level of security that will be combined with the reliability and the scalability and quality platform. D our emily now that we have stabilized in pandemic mode with some people going back to work and many of us at home for the foreseeable future, what is your outlook on growth . Do you see demand still accelerating and if so, how much . We have had a really amazing experience over the last six months. Seen is growth in this cohort of customers with fewer than 10 employees. If you look at our results from q4 in fy 20, that represented 20 of our revenue. In our last quarter, it was up to 36 . That is tremendous growth. This is an expansion of a cohort that historically before the pandemic we had been focused on our upmarket customers. Now we are focusing on these customers. With that, excited that we zoom,ced yesterday our on which is a onestop location for Small Businesses and consumers to come together to host events. We have all seen this. I am sure this is happening in your household whether i things like cano lessons and yoga lessons. Things like piano lessons and yoga lessons. We are trying to streamline the business for Small Business owners and their consumers to come together on zoom. Really excited to announce this and see where it goes. We have been looking forward this is going to continue to be a really important part of our longterm strategy. In the upmarket, what we have seen is companies have continued to buy. They have expanded into thinking about for the long term, how are they going to bring their employees together in a safe and efficient way . Another announcement i loved from yesterday was our smart gallery. This is part of our resume room our zoom room solution. We have all had an experience over the last six month in working together in this environment that there is a democratization of communication. Everyonest on zoom, square is the same size. When you think about companies wanting to go back and some are in the office and some are at home, how do you keep that benefit we have achieved . Not have somebody who is working from home and everybody else in the office looking at the back of someones head. This is going to enable us to have the appearance we are still all on screen together. This you unveiled solution for folks who want to host and monetize events. I know you said it is not initially material to revenue, but what about the mid to longterm potential in terms of having a platform that can offer experiences . How much revenue do you expect this to drive in the future . We