Emily im emily chang in San Francisco and this is bloomberg technology. Coming up, it is a date. Apples next big product unveiling is set for september 7 according to bloomberg sources. Details on the new mac, ipad, and iphone. We will see plus, metarolls out its old playbook for a new round of midterm elections. We talk about whether it is enough to fight the latest trends in misinformation and disinformation. And record revenues in shipping, but seeing a slowdown. I ask a ceo if he shares that sentiment. We will get all of that but first i want to get a look at the markets. U. S. Stocks falling for the first time in four days. Christine . Christine it is fed minutes day and we got another reminder that more rate hikes are coming. That means higher yields and bad news for tech. Lets look at the broad tech sector. The nasdaq 100 and the faang indexes falling for a second straight day, falling more than 1 . It has been a week since we have seen declines of that magnitude. We are seeing asset rotation here. We are hearing from investors that they are preparing to load up with treasuries as they are getting to the cheaper levels. That usually happens at the expense of these high valuation tech stocks. All of that also weighing on chips today. Look at the Philadelphia Semiconductor index extending its two day decline to about 3. 5 . Before the fed minutes, we also got bad news out of china earlier this week. That is taking a double whinny toll on the index, down about 25 yeartodate. Lets look at some interesting corporate stories today. We have quite a few. Bed, bath beyond continuing its retailfueled surge. That trade is back with a vengeance. I want to turn our attention to another stock on this board. It is manchester united, which his rallying which is rallying way bit. If you are wondering, what does that have to do with tech it is by way of elon musk, who tweeted about potentially buying this english football club. But hours later clarified it was just a joke. Still, the stock finished the day higher by nearly 7 . Emily a joke indeed. Another one. Thank you for that. A number of highprofile Venture Capitalists and entrepreneurs are meeting in los angeles for l. A. Tech week. It includes names like marc andreessen. For a better sense of the sentiment there, i want to bring in the zillow cofounder and 75 anthony founder spencer rakov. If we were to take the temperature of the markets it is , anything but 75 and sunny. What is the temperature in l. A. , the market temperature . Spencer it is hot. We are not going to let a weak couple of days in the stock market damper the enthusiasm for tech in los angeles. It is a really exciting time. The conference this week, it was kind of an unconference. We announced it to the community a couple of weeks ago and that we have over 300 events and we have over 300 events and 16,000 people, many of whom come from other areas, filled with enthusiasm and excitement. It is a boom time here. Emily tech has been changing. We talked about the movement away from silicon valley. But now, with more distribute it distributed work, remote work what is the power of the , l. A. Tech hub . Spencer l. A. Is the intersection of media, entertainment, pop culture, commerce. It is where taste makers live. The 20,000 people that decide what is cool for the rest of the country, the rest of the world they live in l. A. This is work culture happens. Now, you have this convergence of media through streaming and studios, which are Tech Companies increasingly. Media entertainment, pop culture is very strong in the Tech Community here but it should be remembered that l. A. Has a fiftyyear manufacturing history in aerospace, heavy equipment, technology. Incredible universities. It has now cemented itself as the number two tech hub behind the bay area. The l. A. Tech communitys goal is to get you someday to move your show from the bay area to talk about how l. A. Is the tech center of the country and hopefully the world. Emily it is a wonderful idea, spencer. I cant say we have not thought about it. You will be my first phone call when that happens. Look its dreary. There is a lot of red on the screen when you look at the markets almost every day. How is this impacting your strategy . Spencer we are in the midst of a venture winter. Venture firms have pulled back. The hedge funds the crossover investors that were leading all of the high price series rounds, they have moved out of private. They are hiding under their desk or they are focused on the public markets. That chill has moved upstream to earlier stage companies. Companies are doing inside rounds, flat rounds, cutting back on marketing expense, cutting headcount, and adjusting for this new winter. I am old enough now to have been through several cycles 2008, 2001. Great companies can get creative during these down cycles. They just have to make sure they survive. Customer behavior changes. Corporation behavior changes during this period of change, and during recessions. A lot of great things come out of them. But you are seeing Venture Capitalists adjust. Emily i know Andreessen Horowitz has a big presence down there, and they are the target of a lot of chatter in silicon valley. Marc andreessen writing the firms biggest check ever to adam neumann, the founder of we work. Some people are pretty unhappy about this. We spoke to a young founder and i want you to listen to what she had to say. You have to feel that rage when you are part of that community that is just historically blocked from accessing funding. What is a major, Prestigious Investment house doing backing fraud a second time . There is no excuse for that, and there has to be the ability to separate what is a Good Business idea that has the potential to be a good investment. From the person who is behind that idea and executing on it. Emily spencer, im going to leave it open ended. What is your take . Spencer there is a lot of commentary and discussion about that topic. I was very surprised by the size of the check. For a seed round, that is enormous by any standard. I dont know adam neumann. I suspect the team at Andreessen Horowitz had a hard look in the eye with him and said, have you been humbled . Are you now coachable . Did you learn from mistakes you made . And they look past those mistakes and said here is somebody who has revolutionized a huge category commercial real estate, and who has created a very large, successful, publicly traded company, which was a roller coaster. It went up. It went down. But it is still a 5 billion Public Company today. I suspect he convinced Andreessen Horowitz he learned from his mistakes. The commentary from that founder is absolutely right. It speaks to the fact that there it is a lack of diversity, equity, and inclusion. You wrote a book on this. This is still a serious issue in tech. She is right to express outrage from her perspective about that. I think that is what Andreessen Horowitz is expecting when they decided to back adam neumann again. He learned from his mistakes and be a different type of founder or different type of leader the second time. Emily it does speak to a pattern that we have seen in silicon valley, time and again. Im curious what you think of his idea as someone who also founded the company in real estate. His idea to revolutionize residential, real estate apartments. Is he that visionary to you . Spencer it is interesting. For viewers who do not know, he is trying to create a branded multifamily product. Think about what w hotels is for hospitality. This company would be to apartments. Most Apartment Buildings are unbranded. They are just named the address. It is in an interesting uninteresting experience. He is trying to create we work for apartment living. But i dont know is if the margins of managing a multifamily Apartment Building can support the accoutrements that he needs to build to create that community. I was talking to an investor last night who is much more experienced in multifamily Real Estate Investing than i am. This person was very bearish on the idea, said it would never work. There is not enough margin in managing. Other advantages to the tenant. This investor was very negative on it. I am not close enough to have a personal opinion about it. But as a user, as a tenant, as a homeowner, i would agree that there is there does seem to be there there. It is a problem renters have. Emily you and i could go on about this for hours but we can do that offline could do that offline. I do want to get your take on the Market Dynamics, the Housing Market dynamics. Do you think that the downturn that we are going through will delay innovation in the housing industry . The hope, which is what you were trying to do with zillow, is make transactions easier for homebuyers. Will all of this tumult put this off . Spencer the downturn in housing is scaring Venture Capital investors from putting money in the category. 75 and sunny, my venture firm, has about 100 investments. About of court of which are in prop tech. I am a very active prop tech investor. Vcs are put off and scared because the public costs have come down so much. Zillow is at a 7, 8, 9 year low. That weighs on investor mindset. And sentiment. So yes, it could dampen innovation, because there will be fewer startups in prop tech getting funded. The good news is, if you are a prop tech, like picasso, one of my other companies, that has raised Venture Capital and has a product on the market, this is a great time to gobble up market share, because competitors probably wont be able to get funded. Like i have seen in other cycles in 2008, for example, when zillow benefited from the 2008 recession because they were already funded and on the racetrack and others could not get funding, Great Companies can be built during this down cycle. Emily a question about spacs. You were part of a spac goldrush your offer, your spec, offer pad, i dont think it is where you wanted it to be. We have had a number of spac cancellations. Was this too good to be through . Or was this needing a better market . Spencer i did do a spac with righetti computer and with opera pad, and neither are trading where i want them to be. There is a long way to go for those companies to live up to their full potential. The spac craze is over, i think. Investor sentiment has soured on the product. I still think there is a place for that product. In particular, if a private Company Wants to get public right now, a spac merger is the only way to do it, because the regular ipo process is totally shut right now. There is still a role for spac s, but it is smaller than a couple of years ago, when the advantages were more clear relative to a traditional ipo. Emily i will let you get back to your very hot and sunny 75 weather over there. Coming up, apples brandnew iphone coming up this september. That and much more. All the details of what we know. This is bloomberg. . As a main street bank, pnc has helped over 7 million kids develop their passion for learning. And now were providing 88 billion dollars to support underserved communities. Helping us all move forward financially. Pnc bank see how we can make a difference for you. Emily apple is kicking up a busy fall product season with new iphones and ipads, and three models of the apple watch. The event will only be streamed online. Lets get more on this with mark gurman who covers all things apple for us. What do we know . The event is currently being planned for wednesday, september 7. A little rare for apple. They usually like to hold their events on a tuesday, but labor day is that monday. The blocking off that tuesday as a travel day. Not only is it going to be streamed online, but they will we are probably two weeks away from this event being announced. In all likelihood, the center of the event will be the iphone team line along with the apple watch series eight. Looking forward to those products and what is in store. Emily when will the product be available . Mark you will see apple do an initial launch on a friday nine days after the announcement, probably for the iphone 14 line. Will see four models. You will see entrylevel versions of the 14, and pro models. The big thing this year is the mini is going away. Instead there will be a max, a 6. 7 inch version of the nonpro phone. It will be pricier than normal, but i think it will be especially popular because of that enhanced screen size. Emily we have talked about inflation, consumers under pressure, difficult Market Dynamics. It is now the right time for apple to be updating its flagship product . Mark absolutely. Apple updates its iphone every september or october. They have done that since shifting the release schedule in 2011. There is no way up was not going to update their devices. The people who are able to buy them are going to buy them. As usual, you will see new tradein deals. I think i mentioned this on the show last year. I had the iphone 12. In 2020, i was able to get the 13 not only for free, but i think i got about 75 cash in my pocket extra for trading in. They have aggressive tradein deals like last year, i think they are going to shake out pretty fine. Emily you also had a story out today on netflix, more details about the adsupported plan, what will be included or wont be included. What do we know . Mark investors and consumers of netflix have been interested in this ad supported tier. Netflix can cost up to 20 a month for the top tier 4k plan with multiple screens. With ads, it will cost less but they will offset it with advertising. What we learned today based on code inside the netflix iphone app is not only are they underway on revamping to support this, but we know they are not going to support downloads for offline viewing. A super popular feature. I have used it before. If you are hopping on a plane and you want to download some shows to wash in her crosscountry flight, this will not happen. Emily thanks for your great reporting. Mark gurman. Coming up, midterm elections are a few months away. A few weeks away. His social media ready . Have companies learn from their mistakes . This is bloomberg. . Emily with midterm elections approaching, metais rolling out its plan to tackle misinformation. After years of updating its election strategy, the social media giant is sticking with familiar tactics, the same tactics we saw in the 2020 general election, which was marred by conspiracies and culminated in the january 6 insurrection at the u. S. Capitol. Alex barinka covers social media for us. Talk to us about what meta is planning to do and what if anything is different from 2020. Alex they are very focused on misinformation. They will remove posts and ads that have to do with wrong logistics on voting, that incite violence based on the outcome of an election and also making sure in the week prior to the close of the polls, they will not actually add any new lytic liber or ties meant or allowed to political advertisements. The reason, that will give sufficient time for folks to process and potentially factcheck if there is any misinformation on the plan. Bottom line is misinformation logistics is the focus. Emily the question is, is it going to work . Are they any more prepared than the were in 2020 for tactics that will surely have evolved . Alex we had an opportunity to talk to their help policy boss, nick clegg. He said we have spent the last six years you wont me the tactics we have. We feel good about what we had in 2020. We have had med some iterations but he insists the company will not be complacent. He said they are sure they will see some new things they need to combat this year. If the goal is to remove misinformation from the platform and stay ahead of things, i expect it will still kind of the this game of whackamole where you see bad actors putting out information. It needs to be taken down. They may change the language. It needs to be taken down. Which would be as the tune is for this year, pretty consistent with what we saw in 2020. Emily how is what facebook is planning to do compared to cocalico alex meta is kind of unique compared to tiktok and twitter in the they do allow lytic lever ties been spared tiktok and twitter do not allow political ads on the platform. Meta also has this unique stance they will not factcheck ads. That has been a controversial stance for them. That is kind of the main difference of their. When you look at Something Like tiktok, tiktok will that organic posts since they dont allow ads and things that are unverified from the platform. Fact checkers will allow good information they deem good to go through on tiktok. That formation will be taken down. Anything not verified will be suppressed from the four you feed, the main feed where people discover things. That is probably the biggest difference here is the lever of suppression tiktok has two make sure information that is not fully verified or they cannot say one way or another does not necessarily garner as big of an audience as a piece of content normally could emily it is hard enough in english. Are they think he about handling these issues in other languages, say russian . Alex meta did not talk a lot about russian language this go around. What they did talk about was adding additional spanishlanguage fact checkers. Half of them are spanish because with a soul in the 2020 general election was a lot of news and metairie in spanish so they felt they needed to add some extra some external partners to focus on that language. No mention of russian for the u. S. Audience but they are adding that additional language for the selection. Emily alex barinka, as always, appreciate you stopping by. Thank you. Coming up, conversation with rene haas about an chips and ipos. This is bloomberg. . Due to the macroeconomic uncertainties, highlevel stock inventories across various market segments, those inventories are being adjusted down. That is leading to reduced demand in the quarter. Emily that was the micron ceo earlier this month on the slowdown in semiconductor demand. It was tough to find in the latest earnings report. The chipmaker reported record First Quarter revenue as its diversification into cars and infrastructure started to pay off. Here to discuss, rene haas. We have heard from a lot of chip makers the their numbers have not been good. Rene q1 was good for us. We had record revenue, record royalties, over 400 million in royalties. We had never done anything