TikTok Bill Heads to Senate, Chaos Erupts at Tesla | Bloomberg Technology

TikTok

• The House of Representatives passed legislation requiring TikTok's Chinese parent company to divest its ownership stake in the app, and the bill is expected to pass the Senate in the coming days.
• TikTok is preparing to challenge the legislation in court if it becomes law.
• TikTok's traffic has grown 40% year-over-year, despite concerns about a potential ban in the US.
• Many Fortune 1000 brands continue to invest in TikTok, not only for advertising but also for e-commerce through TikTok Shops.
• Experts believe that TikTok will fight the legislation and seek alternative solutions, such as divestment to a U.S.-based company, to avoid a complete ban in the United States.
• Elon Musk believes TikTok should not be banned in the US, despite the potential benefit to his own platform, X.

Tesla

• Tesla's stock price fell to a seven-day low due to price cuts, layoffs, and a decrease in the price of its Full Self-Driving (FSD) software.
• Tesla's focus has shifted from a cheaper EV model to Robotaxi, causing confusion among investors.
• Tesla's recent layoffs were reportedly based on a 20% decrease in deliveries in the first quarter, rather than cost-saving measures.
• Musk's management style involves questioning and cutting unnecessary components and processes, raising concerns about whether he has cut too deep.
• Tesla's upcoming earnings call is highly anticipated, with investors looking for clarity on the company's priorities and financial performance.

Tech Sector

• The tech sector is facing potential downside due to elevated valuations and the upcoming earnings season.
• The "Magnificent Seven" tech companies, which include Apple, Microsoft, Amazon, Alphabet, Meta, Tesla, and Nvidia, are expected to drive year-on-year earnings growth for the S&P 500.
• If these companies fail to meet expectations, it could lead to a broader correction in the market.
• UBS has downgraded the "Big Six" tech stocks (excluding Apple) to neutral from overweight due to tough comparisons this quarter.
• Investors are looking outside of large-cap tech stocks for value, particularly in the small and mid-cap space.
• There is concern about the sustainability of current valuations given the mounting economic, geopolitical, and Federal Reserve risks.

Social Media and Regulation

• Calls are growing in Australia for tougher laws on social media companies after two knife attacks in Sydney, with misinformation spreading quickly.
• Japan's antitrust regulator is investigating Google for potentially limiting Yahoo! Japan's ability to compete.

Apple

• Apple is named as a topic for 2024 by Bank of America, highlighting its strong balance sheet and cash flows.
• Apple is working on several major projects, including iRobot and augmented-reality glasses, but its biggest focus is on generative AI.
• Apple's approach to generative AI involves running it on the iPhone itself rather than cloud-based servers, aiming for increased speed, security, and functionality.

Cryptocurrency

• Bitcoin's halving event occurred, cutting the rewards paid to miners in half.
• The impact of the halving on Bitcoin's price is expected to be seen in the coming months due to supply constraints.
• Despite the halving, the cryptocurrency market has remained relatively stable, with some blockchain-related stocks experiencing gains.
• Bitcoin's finite supply and the increasing demand for diversification of currency are driving interest in Bitcoin as a retirement investment.

Media and Entertainment

• Candle Media, co-owned by Kevin Mayer, the former CEO of TikTok and former Disney chairman, is planning a movie based on their popular children's series, "Moon Bug Entertainment."
• Kevin Mayer, the former CEO of TikTok and current Co-CEO of Candle Media, discussed various topics in an interview.
• Mayer believes that Disney has a strong bench of leaders and will likely choose an internal candidate to succeed Bob Iger as CEO.
• He predicts consolidation in the streaming industry due to scale issues and the high cost of capital.
• Mayer praised the TikTok team and its product but acknowledged the ongoing security concerns surrounding the app.

Sustainability

• In the venture capital sector, Mayer's company, Candle Media, focuses on sustainability as a service, investing in construction infrastructure, supply chain software, and data platforms to promote economic sustainability.
• Mayer's company is currently raising a second fund of $80 million to invest in sustainable solutions that are cost-effective and don't drastically inhibit consumers' daily lives.
• Sita Chantramonklasri, founder of Siam Capital, believes that the sustainability transition presents significant wealth-creation opportunities.
• She emphasizes the importance of investing in scalable, software-focused solutions that connect new technologies with end users and businesses.
• Chantramonklasri highlights the role of consumers as major stakeholders in the economy and the need to find ways to encourage sustainable behavior without drastically changing their lifestyles.

Salesforce

• Salesforce's talks with Informatica about a potential takeover have fizzled out due to disagreements over price.
• Bloomberg Intelligence analyst Anurag Rana believes that Salesforce should focus on organic growth and improving its existing products rather than pursuing expensive acquisitions.
• Rana points out that Salesforce's recent acquisition of Tableau, a company with similar functions to Informatica, has not significantly boosted its growth.

Bloomberg Technology Show

• Bloomberg Technology is a show that will be live from New York City and San Francisco for the next four days.
• The show will be available on Apple, Spotify, and iHeart.