Ed apple seeing bright spots in china as iphones a sellout within minutes of being released. Caroline the ceo of visco, his outlook on the social media company. We want to really be digging into the hot news of the day. This is largely around that ipo story. Instacart is finally a backed Company Coming onto the markets. Waiting with bated breath. Remind as if they are making money on this. We know that the valuation is significantly lower than the heyday of covid for them. Sure. It depends on when they invested. Anyone who invested in 2021 when they were valued at 39 billion dollars, they are not making money yet, if ever. The investors who invested very early when it was just a tiny start up, it has turned into a multibillion dollar company. Early indications show this company is probably going to pop, a significant pop. Maybe 30 or more. That would put it at or above the 13 billion dollar valuation that the company lowered itself to last year. Its internal valuation. The company was aware of Market Conditions and realities. They knew 13 billion was more reasonable of a target. Caroline more than a decade old, this company. Since its founding it has changed the way it strategizes and moves forward. Especially under the new ceo. I spoke with her and spoke about the era of competition. It appears as though she sees everyone as a competition. They say they are the undisputed leader in grocery delivery but they are gaining share, looking at strengthening their competitive advantages of advertising, software. How has this company pivoted . Katie so many think of them from the consumerfacing side where they receive groceries, but if you look at the revenue, they have a lot of revenue streams. They have software with fulfillment, they have strengthened their advertising business. They have so much data about consumers and what they like to buy, which is valuable for people who try to advertise groceries. They have done a lot of different things. They also have subscriptions. People pay more to be regular customers of instacart. Something that has been a little controversial, they charge more for the price of the item than you would pay in store. They are collecting revenue from customers in a lot of different ways and particularly from business partners. Caroline i dont know if my household is different. My husband generally does the grocery order. I spoke with fidji about what this means as a moment. There are very few women bringing companies to ipo. She feels a lot of her customers are women. 70 of the shoppers are women. She says it is important to have the right product and right voices at the table. She has been trying to lean into the diverse Leadership Team she has. Talk us through what this means for not the founder but the female ceo to bring a company to list . Katie it is a very low number of really Public Companies that are run by women. She makes a good point. A large percentage of Household Budgets are controlled by women. You look at who a lot of the people are buying groceries, its women. Certainly, it helps to bring that perspective. The current ceo is someone who is very seasoned in the business world. She worked her way up at facebook being one of the top executives there. She is not some junior person who did not know what she was doing. She is already well respected in the tech world. Ed she brought her advertising prowess to this business. Bringing us all of the inside track on what is a vc unicorn listing after a few years hiatus. Lets get more on the world of ipos. The director of research at Renaissance Capital, we are how to arm the pop tps that is rolling over somewhat now. It was not vc act. Now we get the likes of instacart. How important are these listings . Important. It has been two years with almost no tech ipos. One or two were successful last year, but three deals in the last week are definitely a good barometer for the health of the tech market. Arm has been public before. It is a very mature company. It is instacart that is the better indicator for where tech appetite is. Caroline when you make in the way this company has been listed . It is notable they priced on a monday. They were really trying to ride on the coattails of arm. The fact that they have a cfo that was at goldman leading these source of issuances. The fact that we could get the pop at the initial trade, are they leaving too much money on the table to have a successful ipo . Nick i dont think so. We know that we are in a market where the ip market has not been particularly strong. There is a lot of caution and investors. I think they needed to convince investors it was a good valuation that the stock is positioned to trade well. Kind of a lot of things to help make sure that the deal is a success for investors. It is part of light sorry, go ahead. Caroline a little about the competitive moat or lack thereof. Some frenemies, customers building out their own commerce place. Amazon as well. He was the key competitor for you . Nick there are a few definite ones. Doordash is an interesting one. They are more restaurant delivery, but they have been building a grocery business and they have been building share on these smaller transactions, impulse buys rather than the weekly shop. Doordash is definitely a key competitor. Then the grocery retailers themselves, walmart and the other big ones, our competitors. Instacart works with them on the back end of technology. Instacart is trying to shore itself up. Ed what have you learned about the risk tolerance that Technology Investors have . The ipo window broadly has opened backup. Nick there is definitely still some caution. We are not in the 20202021 mindset. One indicator is the renaissance ipo index, the underlying index for our etf that tracks the ipo market. That is 33 yeartodate versus 17 the s p 500. We have seen some Risk Appetite come back into this phase over the last year. We are in the right direction for ipo activity to increase. Ed there is a lot of excitement. There is some ipo window. In the background you have the fed. We started talking about china, the macro, the economy globally. How shortlived do you think this ipo window is going to be . Nick you know, i like to be optimistic. One indicator that we look at a lot is the mix. The volatility index. Is the vix, the volatility index. That is if volatility is increasing or decreasing. That is coming down, in the teens. Thats usually a good level for ipo activity, but obviously a lot can change quickly. Fingers crossed that we can maintain that activity going forward. Caroline why getting Renaissance Capital on is important for our viewers as you are doing the hard work of preipo Companies Bringing that research and transparency. Who is waiting in the wings when we get through this week of instacart enclave io . What are the others you are updating your research on . Nick birkenstock filed a few weeks ago. There are a lot of companies waiting in the wings looking to see how instacart and clave io do this week. Everyone from reddit, lots of tech companies. We think there is a big backlog, just when conditions will be right. Ed a quick check on the markets, other stories are driving individual names. We are looking at block. Jack dorsey who was at the head of block and chairman of the board will come in and run square. Analysts see that as a positive even though it is a longtime leader leaving the company. Stock has not done well yeartodate. Disney down 4 doubling their capex commitment for the parks, entertainment, and Products Division to 60 billion over 10year period investing in theme parks and cruise line business. Insights into what bob iger is doing at disney. Moving the stock lower. Amazon down 2. 8 . They are hiring 250 thousand Seasonal Workers for the holiday period, particularly in logistics. They ended the june quarter with one point four 6 million employees, having cut back carriers through the early parts of the year. That is kind of weighing on the stock. It has been down amid everything thats going on this week. An update on arm, in its third, fourth trading session. It is trading at 54 . 80, below the price it opened at on thursday. Interesting how shortlived that was in terms of the pop we got and the downward stretch thereafter. Caroline still above 51 dollars, but notable as we check on the other ipos. We have a wild story. Microsoft has uploaded confidential documents to a federal court by mistake. It is on the website. More on the reveal next. This is bloomberg technology. Ed it is time for talking tech, all Things Microsoft starting with its Ai Research Team accidentally exposing a large cashe of private data on the Software Development platform get hub according to wiz. It included microsoft employees personal computer backups, secret keys, and more than 30,000 internal microsoft investors. Amazon is hiring the microsoft chief to run the division responsible for alexa and echo smart speakers, and almost 20 year veteran who led the windows team and was central to the hardware push with the surface computers. Microsoft plans to refresh the xbox consoles in the Holiday Season of 2024. That is according to a product roadmap mistakenly posted online as part of its case against the ftc. The change is for improvements to power consumption, better wireless, and builtin storage. And a physical redesign. This is one helluva leak. Lets get more from new york. Lets start with how on earth that information came to light. Thank you for having me. We are hearing that microsoft accidentally leaked confidential documents around plans for new xbox consoles, refreshed xbox consoles as soon as 2024, Upcoming Games that have never been announced before, and a variety of things. Caroline can we get to the bottom of how or who . There must be a lot of handwringing internally. There is a lot of handwringing internally today, especially because of the other leak you referenced earlier. Our understanding at bloomberg as a source told us that it was not the ftc behind the leak, it was microsoft. Caroline microsoft potentially trying to trail back as to who and how. Does this happen often . Do we see these leaks and undergo data that is hard to find in terms of price points and ultimately ip that they are going to be revealing . Game companies are famously secretive about upcoming plans around these things and this is the biggest leak in xbox history its fair to say. Ed i get it that there is a leak and leaks happen. The big news is we are getting a midcycle xbox console refresh, which doesnt happen. I am a ps5 die now. Would we know about this new xbox . In june xbox told me he didnt see an imperative to have a midcycle refresh. We are trying to reconcile this competing information. It is typical for after four years for a console to come out with a refresh with increased storage, like you are saying, and things along those lines. Ed we did get insight into microsofts videogame strategy. What did we learn . Xbox is planning a midcycle refresh as soon as 2024 and the new console as soon as 2028. These plans are subject to change, as everything in the gaming industry can be very volatile all the time. We learned updates to beloved games, including from bethesda, which microsoft acquired as well. We learned about discussions around acquiring nintendo. We knew that those discussions had happened. We didnt know that the board was interested as well until the leaks this morning. Caroline in its macro context thinking about the Federal Reserve eying inflationary pressures, im interested if the price points will be going up. The price points on video games gone from 60 to 70. Consoles are something that are a luxury item. They are very expensive. Especially when gaming pcs are becoming increasingly popular and eating more of what people would spend on consuls. It makes sense. Caroline make sense. Ed makes sense. Thank you. Coming up apples iphone 15 is all of the rage in china even after beijing expanded a ban on apple products in many public work leases. Details next. This is bloomberg technology. Thanks to avalara, we can calculate sales tax automatically. Avalarahhhhhh what if tax rates change . Ahhhhhh filing sales tax returns . Ahhhhhh business license guidance . Ahhhhhh crossborder sales . Ahhhhhh item classification . Ahhhhhh does it connect with acc. . Ahhhhhh ahhhhhh ahhhhhh todays the day you graduate from Southern New Hampshire university. Ive been waiting for this day my whole life. The fact that i get to walk across the stage and get my degree, its honestly unreal. Dont ever stop. Keep on believing in yourself. It is never too late. If youre out there to wonder if you could be an snhu graduate today is the day to find out. Visit snhu. Edu. Ed overall, i think this is a good thing because people are operating, and its going to drive new units, so i think its good news. Can you line up where you take the most signals from, particularly when it comes to kline a . Were all trying to read the tealeaves at the moment. Yes, we got them selling out, but early preorder data from china continues to be difficult for the iphone 15 cycle, negative shift. Where do you go for the signals that are the right read . One of the things you have to think about, think about it from apples point of view, they do want to ship these things on order. So when look at lead teams, sometimes its very difficult to say whether it is because of the changing makeshift of the model with some models or just demand. I think this is why we need several more weeks of data before we can comfortably say that apple sales are going to be healthy over the next 12 months, because december quarter is the big quarter for all consumer electronics, and apple is no different there. Price of 215, they are saying the china data points are better than expected. We try to dissect where to get the real takeaway. Can you update a little bit on your worries and risks around china . It felt like the narrative of last week after their event. What then of now . Are you getting any more signals on the sturdiness of consumer and, indeed, government purchases . Yeah, i think i talk about it, and really, one of the things you have to remember, last time Something Like this happened, increased rise of nationalism in china, it did have a negative impact on apple. So we just to want make sure that because what the government said for the government, which is not new news, its been around for a while. But it was flashed around that it didnt change the consumer behavior, and so far it looks like things are on track for apple, but again, we need more data to be more comfortable. Just reflecting on being in tino last week, and there was a lot of emphasis on the color selection for the pro and pro max. Because in china, red and gold resonate with the consumer. We didnt get that. But they also tend to favor the latest technology, powerful processing, next generation camera. In your analysis, do you see a differentiation between consumer behaviors in north america, europe, china . Oh, its massive. Gold would do really well in in india. I mean, i can think of a few more companies. I personally am going to get the blue one on friday, but i know a lot of people who would want the red and the gold. Everyone wants to this is going to be driving up average selling prices. So certainly some price targets still on the higher side for apple. Meanwhile, though, coming up, look, were just talking about ai. Lets dig into it a little bit more particular when it comes to Digital Health. Were going to be joined by m13 partner lateef paracha. Thats next. Were going to talk also about the ipo z. Yeah, were going to talk about ipos, but there is one mover thats been listed a little while and talk about rocket lab down around 8 . Now, it had opened as and the pay load did not make it to orbit. This is the third time that theyve had trouble with the rocket provider that is a high cadence launcher, nowhere near spacex, one of the ones actually putting stuff into space. But this third failure really impacting the shares. We will bring you more on that story throughout the program. This is bloomberg technology. Welcome back to bloomberg technology. Ed how did i get here . Lets move on quickly and cover that with markets. Nasdaq 100, tech leading. The fed makes its decision in 24 hours time, widely expected to hold rates. We follow rates because they discount the future values of present cash flows the other way around, but also, if youre a private market investor and looking at proxies, youre paying attention as well. Bitcoin continues to kind of march higher despite the risk of sentiment that were seeing. Look at yields creep higher as well. I think all eyes on the fed, despite whats happening in other areas of the tech sector. Caroline all eyes on one particular i. P. O. Today. Were awaiting instacart. Were keeping abreast of what were going to be going from a price point. Looks likes its going to pop. It looks like were going to rise higher. Oh, yeah, sorry about that. I didnt hear you, caroline. Yes, we are waiting for it to open, and it is indicated to price around 42 a share. That makes it more than a 40 pop ads it makes it at the open. It also gives it a valuation upon the open at about 14 billion. That is not only above where it expected to be valued at out of the gate, it also is above its most recent funding round when it was valued and slashed its own internal valuation to closer to 13 billion. And so upon the i. P. O. Pop, you are getting a little bit of boost in valuation. Still, as weve been talking about, a far cry from the 39 billion valuation it was able to ink in the heyday of the pandemic for instacart, when a lot of people were using the delivery app. Now, i know you and i will talk about this later, but the sell that instacart might have as an a. I. Focused company, it doesnt even meet what you would get from the same type of idea here and is expected to price tonight in instacarts wake. You had also theyre up there, the i. P. O. Pricing range as well. Lets see if theyre able to meet that, especially because the markets theyre meeting are a little more mute than the markets we saw last week that they lifted into. Caroline its interesting coming off the previous highs, but on the big sell, was this an Artificial Intelligence empower company . I talk about this the a. I. Pitch that shes trying to take to the investor at the moment. Shes saying, look, theres a really big opportunity to make the grocery even more convenient. We have all the data. Theyve got the expertise. But look, it does take time. But thats sort of their