that's when you start to see companies go belly up or conso consolidate. >> at some point it actually becomes important to generate real cash flow phil, thanks for a rundown of all those different names. continue to focus in part on that loss of market cap in tesla. that's going to do it for us on "squawk on the street. send it over to "tech check" which starts right now >> good tuesday morning. welcome to "tech check," i'm carl with deirdre. jon is going to be with us in just a bit he's wrapping up a conversation with the fcc chair at the paly center for media, and i'll bring us those highlights in a minute. in the meantime, lyft, take-two, trip all plummeting on the heels of their results we'll dive into the state of the consumer and discretionary spending on a day where the dow hits its highest intraday level since august take-two, activision reporting we're joined by microsoft's head of gaming. and then b of a cutting its target for apple the analyst behind that call is

going to join us to explain. >> we'll start with continued pressure on consumer spending. take-two, carl mentioned this, it is plummeting after slashing q3, spending on mobile game hit particularly hard. lyft also down big user growth slowing, active rider growth the slowest on record those shares down 20%. ouch president john zimmer pointing to weakness in delivery and takeout as consumers tighten their belts, and another example of a pullback, there's tripadvisor. some red here also management saying while people want to continue spending, they're thinking about how to adjust their plans that stock down more than 20% also carl, i guess the question, when we talk about these earnings, are they company specific or do they tell us something about the broader economy and consumer spending airlines, hotels, airbnb, no sign of a demand slowdown there. lyft's problem, that's not demand either. it's execution and potentially

losing market share. very different tone than uber a week ago, saying demand is strong they're still in growth mode they scaled back costs earlier that's a question here, that consumer side of the economy, especially when it comes to services, does that remain strong >> yeah, on lyft, the street has been all over their case here's bernstein, investors are questioning why they're messing around with uber's american only cousin when they can just own the real thing, which may be eating their lunch stateside investors hate this sort of out-year stretch goals especially in a bear market. at least in the ride sharing business, it's about share gain and loss today >> it's amazing how quickly that changed bah wall street used to like lyft based on the fact it was more of a pure play. they focused on delivery uber's diversification has diluted shareholders but they appreciate the execution both of these companies talk a lot about that path to profitability. still far from it in terms of any gap sense, carl. we're going to get into gaming

as well. mobile seems weak here that's another piece of consumer spending but less on the services side, right >> yes indeed. the take-two, the booking guidance, the revenue guidance, not exactly clean. they do blame fx and macro meanwhile, atvi had much better results, but it's not really trading on the fundamentals now as they continue to believe that deal will close before the end of microsoft's fiscal year in june of next year. but that's really the trade there. >> absolutely. i think jon has wrapped up his talk let's get him on this. he watches the gaming space. very quickly, jon, we're going to get to your chat with the fcc chairwoman in a bit. what did you make of the gaming earnings >> yeah, well, you know, you talked and covered take-two pretty well. i was interested that in the activision blizzard side which from a stock perspective, maybe people may be less interested in them, but when it comes to

mobile gaming on their side, of course, they have the king business, which includes candy crush. that did really well actually. people still crushing candy ten years in so it's a little bit of an outlier in the overall casual gaming, mobile gaming space. there really is this question as consumer spending slows down overall, how is that going to affect the in-game economies and how is that going to affect the in-game advertising market as we see overall digital advertising kind of taking a dive. >> yeah, and in the case of mobile, it's so easy to switch on and off that spend. let's stick with gaming. we have been talking about a mixed picture on the heels of the earnings joining us now, oppenheimer analyst martin yang. let's start where jon just left off in terms of the mobile picture. king's candy crush doing well, but zengo was a real sore spot for take-two >> yeah, so when you compare ze

nrb the key difference is king benefits from a diverse audience, a focused audience with a well known brand. zynga is the opposite. when it comes to user acquisition and getting access to new users to retain a scaled audience, zynga will run into much bigger trouble, especially in the environment where apple's att is putting up headwinds on everyone >> how does that deal look now in retrospect? is it something that take-two can turn around or did they overpay for zenga? are shareholders correct in not liking this deal from the beginning? >> i think there will be quite a few quarters, if not a couple years, where this deal will be perceived as a deal done at a peak multiple, given the lack of recovery on mobile user acquisition effectiveness. so the deal synergy or the value of the deal really comes from zynga's ability to ixplore take-two ips, trying to bring

rock star into mobile and find success. without that, the deal will be perceived very negatively among investors. >> so martin, is this an opportunity, this environment for unity iron source, for example, or for app loven, which are trying to optimize that mobile and gaming ecosystem? is it an opportunity or is it a liability? do people need them more because the overall revenue is down, or is it going to just really squeeze them >> in this environment, especially for smaller developers, they need someone like app loven, they need someone like unity more than every. they need someone who can provide end to end service, not just from user acquisition point of view, but from any little things that help them to improve overall app performance that will benefit them. and you know, overall, they will need to look for a larger

software provider, someone who can provide everything from monetization to user acquisition to ad automation and everything else >> martin, you said that zynga may be seen as a deal done at peak valuation when you look at take-two now, does it look like an attractive target to you and do you think it would be attractive to a disney or netflix? >> if you have the discipline to hold take-two for the next two years, in other words, you will hold take-two until it launches to g6 some time in the next few years, this is a good entry point. but in a very near term, i would leave the stock will go through some turbulence because they're still very much uncertain in the first half of 2023 >> some more skepticism thrown into the mix on activision microsoft this week, and i wonder given the multiple

layeroffs scrutiny it's undergoing on various continents, do you think that's a model for how regulators are going to view the overall space in the years ahead >> for video game particularly, not likely for other deals because activision is so much bigger than anyone else. so if this deal doesn't go through, it doesn't really set a negative case for other potential large m&as because activision is so much bigger, so much more dominant than other games. >> opens the door for more m&a, do you mean activision blizzard potentially doing m&a or a target for someone else? >> activision -- well, there's the talk publishers always on the lookout for new games and that's a major source of innovation coming from the indy studios and in fact, during the pandemic when working from home becomes more prevalent, you do see a much higher number of indy studio formations and that's

where the big new ideas come from >> martin, appreciate that very much a lot to talk about, maybe next time we're talk about some of the chip channel clearing out. thanks we're going to come back to gaming in a moment let's get a check on shares of block. seeing an attractive buying opportunity thanks to that recent pullback, they also highlight strength in its cash app business, though they warn the buy now pay later story arc remains uncertain. the stock down 60% on the year guys, this is a company that hasn't been afraid to dip into buy now pay later, crypto, and it's been punished by markets, down 60% year to date, but we have to remember that it's done a pretty good job monetizing that cash app, which is still sort of at the core of what it does in a way that paypal wasn't able to with venmo, jon. >> that's so true. and from the user perspective,

those two apps and the experiences aren't that different. it's like, use it to tap into my checking or debit account, and pay people out but the way it's actually structured on the back end, so important. so this is a time when investors i think have to really drill down into what management's plans are to structure these businesses and make sure the models work, kind of echoing back to what you and carl were talking about when it comes to lyft versus uber i would call doordash into there, too it's not just are they in a hot area it's does their model work >> all right turning back to gaming our next guest says even with economic uncertainty ahead, history has shown gaming remains a good value for consumers, especially head nothing to the holiday retail season. let's bring in microsoft gaming ceo phil spencer to discuss what he's seeing at xbox. welcome. i would also throw in, i know there's not much to say about

activision blizzard specifically, but you guys bought zenamax for, what, $7 billion, which is small change compared to some of the other moves we have seen you make. but the environment has changed significantly since that transaction. how are you working to incorporate that and get the most out of it as the economic winds shift? >> yeah, it's all about getting great games done that's what we're working on with our teams at zenamax. two great games coming in 2023 red fall and star field. delivering great games for our customers across the platforms where they want to play is the fundamental promise we want to have at xbox >> so speaking of xbox, overall, the gaming business seems to be okay from a supply chain point of view, at least that's what we heard from amd, which supplies you guys as well as others what do you expect to see on the consumer front as consumer spending slows down?

is it the hit games that are going to outperform in this environment? is it having a broad portfolio that you think is going to indicate who wins console wise this holiday season? >> hit games have proven to always be successful in our market you're seeing that with modern warfare 2 right now, if you go back, elden ring you have big great games that reach a mass audience across all of these platforms they do really, really well. but it is also the back catalog or the tried and true hits that families have almost become part of the family activity in the evenings gaming is a good value for the dollar perhour that people spend in playing, in that the back catalog tried and true hits, free to play games, do really well right now, when you think about the fortnite and rocket leagues and fall guys. those kinds of games succeeding on the platform. diversity of business model, whether it's subscription, free to play, or retail, offers the customers a ton of choice. >> i wanted to ask you more about the developer side of

things as you look to eventually operate in xbox mobile store, what does it look like is it an open app store model meaning that developers could be able to operate their own app stores within there, their own methods of payments? how do you think about that evolution? >> yeah, we're early on in this transition, and there's obviously a lot of obstacles in front of us that we have to work through on the mobile platforms but i think the model we have on windows is one to really learn from you look at windows which is a large scale platform and creators can make decisions whether they want to go direct to customers and deliver their store front, use our own store capability, our payment system or their payment system. that leads to more creative output, better creative community and player community on the mobile platforms today, we just have a ton of work to get from where we are today to any viable choice for a

customer >> what happens to cloud gaming, with game pass google kind of pulled back with stadia and killed that do you accelerate more into that with less competition or do you ease off in spending money on that, as the economy gets rougher? >> we follow where our customers are. we have now had over 20 million people use our cloud game streaming platform we have certain markets where most of our customers are actually playing on cloud. on the global state of gaming when you think of 3 billion people playing video games, obviously cloud gaming is a small percentage of that, but in running a tech business and entertainment business, we're always thinking about horizon one, what's happening now, horizon two and horizon three. we think about cloud as something that can be an important choice for creators and players, and we're long on the capability it's not a transformation we expect to see in the next three to five years. it's longer out before a majority of people might be playing on cloud >> okay. so it sounds like kind of two

things you want to be there, but you don't necessarily want to spend a ton on it because you don't expect results immediately let me throw mobile into the mix. we were talking about this earlier. mixed bag if you're looking at take-two's results versus activision blizzard's results, which might end up being part of microsoft's results before too long do you value mobile because the player is definitely there, probably for the long term, even if the economics are not hoping up right now >> like any at-scale business, what gaming's $200 billion top line tam right now, if you look at the cagr over multiple years, obviously, covid and everybody stuck at home and playing video games created some year over year anomalies for us. if you look at the long term trends, microsoft, we're obviously bullish on the category i think for our partners out there, whether it's take-two, what strauss is doing, activision, electronic arts, they're focused on building

great games, making sure they're delivering great content across all screens. i thought strauss acquisition of zynga last year was a really smart move on his part to diversify his portfolio. people are playing across any screen that they have. and the biggest franchises in the world exist across all of those screens. so if you're building a minecraft like we are or f fortnite or call of duty, you have to make sure the franchises show up on any screen that somebody wants to play on, and yeah, there will be economic uncertainty in times where gaming can play a role, but the long term trends for interactive entertainment for the generation that's coming up through remain very strong. >> all right phil spencer from microsoft, head of gaming, thank you. >> thank you still to come this hour, got an upgrade for block, as we mentioned. plus the highlights from jon's conversation with the chair of the fcc. the fcc. dow session highs up 417

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it is time now for a gut check. take a look at global foundries outperforming the broader chip sector in 2022 this morning, let's see. down about 6.5% after delivering -- no, sorry, up 7.9% after delivering a beat on the top and bottom lines in q3 the street also liking the guide, with earnings projections for the current quarter coming in above consensus revenue outlook falling in line with expectations, guys. that stock getting close, carl, to up 8% at the moment >> yeah, not a bad day for some in the chip business, jon. in the meantime, turning to m&a, it's been a stagnant year. our next guest does see some deal opportunities ahead, predicting investors will come off the sidelines for strong business models despite the broader volatility

joining us, union square advisers cofounder ted smith is back thanks for coming in so defensible business models means what exactly >> means profitability and growth and reasonable proportions with one another we're going to see slowdown in growth that's inevitable given the volatility and the general state of the economy, bought what investors are telling public and private companies is don't lose sight of the profitability we're willing to sacrifice a little of the go go growth for more of the profitability. >> you can look past a darker macro backdrop or no does it also need to be in asce ascension. >> we would like to see it better than it is now, but once we have a feeling for where things are going to bottom out with the fed, i think we're going to see that stability required to get more deals done. >> today, yields are lower, the san francisco fed had a piece out yesterday arguing that actually conditions are tighter than we may think. there's a little bit of brewing talk about could there be peace

talks with russia, could there be stim ulus in china? what happens if all those things come together? >> the bull case, first, i think it's going to take a while for the bull case to develop we're talking more about 2023 than we are 2022, for certain. but again, i think it's more about stability than a big bull case it's about people understanding what companies are actually able to do, how quickly they can grow in a normalized fashion into 2023 and beyond, showcasing the corporate profits, and corporate balance sheets from the acquirers are still quite strong they have a lot of cash to put to work and they want to put it to work. >> it's deirdre, good morning. good to see you. so there's sort of been this disconnect between the potential acquirers and the targets. i mean, a lot of the software companies saw peak valuations a year or so ago, and maybe a reluctance to be a target because they thought they could get somewhere close to that. is that coming down now? we had a few bear market rallies that may have given hope where do they settle

do you think there's more of an appetite for some of insoftware companies that have been sold off to be acquired >> a great question, deirdre i think the reality of it is we're starting to see some of that happen in boardrooms. with a focus on not what was my valuation last week or last month, where was it a year ago, not so relevant. so we're seeing that disconnect kind of narrowing, certainly for public companies your stock price today is your valuation today, but private companies are falling in line with the valuation reality >> is it too late for some of them we talk about certain technologies that have become co commodityized. it's easy for companies to have that video product zoom even, some of these companies that looked like great technologies a year ago, but look like plug and plays at the moment >> in any market up or down, there are companies that will be

left behind. on either one of those cases i don't think that's necessarily the case, but particularly if you're zoom, you have a lot of firepower to continue to build out your business model and we think they will, but there are definitely going to be folks who miss the window and they'll regret that. >> the calculus for those who are selling is what? that valuations return to something approaching normal again or more reasonable or is it simply financing, it's time >> it's time, i think that's the calculus we need cash so we need to raise capital, a very active private capital market today, and if you need to sell because you simply have no choice, you have to accept the current valuation realities. i think what's different now than was a month ago, three months ago, people are starting to realize the valuations of a year ago are not coming back soon you need to bake that into the calculus about when is it time to sell. >> do we need to expect longer closing schedules? more reception to scrutiny from

regulators >> certainly longer closing schedules. deals are taking longer to get done i don't think the regulatory environment has played a significant role yet today is going to be an interesting test of that >> does anything change if the control changes? >> the argument is it gets easier, but we have to see what happens over the course of the day. over the last two years it hasn't been nearly as bad as the worst case scenario was forecast the last time. >> given the way the year has gone and the way volume had dried up, did you expect to be presenting a case that was net bullish at this case are you surprised by this? >> in january, i certainly did by the time we got to june, i certainly didn't we have gone through our own version of what we thought was going to happen. from a perspective of our business, a little less m&a, but a lot more financing activity. >> i wish you would stay with us for a moment we have breaking news regarding crypto let's get to kate rooney >> yeah, and you know, there's a lot going on right now, so i'm

grateful to have you on set. we're reading tweets what do we know? >> global exchange binance, one of the biggest exchanges if not the biggest in the world, is looking to buy ftx.com this is the nonu.s. business of ftx, owned by sam bankman freed. and both exchanges tweeting about it, saying it's a nonbinding letter of intent so they need to do due diligence. cz, the ceo of binance, tweeting that ftx, he says this afternoon, ftx asked for our help there is a significant liquidity crunch he said to protect users we signed that nonbonding-loi intending to fully acquire ftx to cover the liquidity tex, we

will conduct due diligence sam bankman freed saying we have come to an agreement on a strategic transaction with binance. binance was one of ftx's first investors. you talk about how we got here and how the drama has played out. >> very different tone from two of these major, let's call them the biggest players in crypto. at least two of the biggest players. there's been a feud going on and the tone from these tweets happening in the moment, spf is saying things like a huge thank you to vz, and binance, where cz is tweeting things like there's a significant liquidity crunch someone is being more generous to the other here. is this a case of sam bankman freed losing this. >> he also says there have been reports that we have had this fraught relationship, that's really what it looks like. so cz had accused sam bankman fried of lobbying behind others in the industry behind their backs, and binance is a global offshore exchange. that's where this starting and

the idea that sam had a seat at the table. >> closer to regulators. >> exactly, that was part of the issue. and cz over the weekend had tweeted essentially it was divesting its holdings in ftx's token it owned in part of getting out of the last equity round of ftx it had this massive amount of ftt tokens it offloaded it, said it was going to divest that that spooked the markets that's where we saw with bitcoin, the idea he didn't say what the recent revelations were, but coindesk published an article that alameda company had $5 or $6 billion of ftt tokens on the balance sheet, called into question the idea of the company being able to meet some of its loan requirements you have seen the same fears we saw with crypto markets in the spring, now coming to roost with sam bankman-fried and the big picture here is sbf and ftx were

the lenders of last resort came in as emergency loans >> jon has a question for you. >> yeah. >> hey, kate you know i have been skeptical of this whole sam bankman-fried white knight story was he bluffing at the poker table? acting like he had a great hand and he was going to rescue the whole crypto industry, and now he's having to fold? and everybody is kind of hoping that now binance and cz, that he's the white knight? this looks like poker to me. >> yeah, it's not clear who would be the lender of last resort here. there's no fed in crypto, so really sam bankman-fried had play this role he also hasn't closed some of the deals he agreed to, those are sort of binding agreements we don't know if those deals will still go through based on what we heard. the question of whether he was bluffing or not, one of the things people have called out is the relationship between alameda

and ftx. that's part of the issue and how this sparked, is that those two companies both owned by sam bankman fried, it's unclear. we have seen the financials of ftx as of last year, but there's so many holes and questions on the liabilities, how the two companies interact, and so the question, i can't say for sure if he was bluffing in terms of what cash he had on the balance sheet, but he tweeted they had enough cash to honor customer withdrawals. this does seem like a bit of a crisis scenario if you're going to sell ftx.com and all of the offshore non-u.s. assets to one of your biggest competitors who has been really dunking on you for the last week or so. so i think the story is still playing out, but ironic based on the fact sam bankman-fried was the lender of last resort for these companies. >> and also remains uncertain given that cz tweets they have the discretion to pull out from the deal at any time

and that's of course with no terms disclosed. i don't know how comfortable you are discussing what's going on, but clearly, things are fluid, at least in the crypto markets >> there's a lot of details that still need to emerge about exactly what's going on, but it does speak to the broader point you were making before sometimes companies don't have a choice even companies that have puffed their chest out and say everything is fine sometimes they need to find a lender or buyer of last resort i think that's what we're seeing play out in front of us. >> i want to ask the guest, to me, the central question and problem here is, we don't know in this crypto universe, and a lot of these cases, whether these people have the assets that they claim to have. they're promising money to somebody, taking money from somebody else. dealing with tokens that they made up. but real investors have real money in the crypto markets believing that somebody who is rich enough is going to bail this out isn't that a problem

>> i think it's a huge problem, and jon, i think you made the case for kate's point about there is no fed in crypto. the fed has been, you know, in addition to all the other things they have going on, very active in saying they want be part of this market. it needs to be regulated in ways it's not today you see what's going on today and investors expecting something to happen that they don't have a right to expect, that's when you'll see more regulation >> kate, let me turn this to you then you kind of outlined the background between sam bankman-fried versus cz in washington sam bankman-fried is becoming closer, he has a seat at the table. whereas cz's company binance is subject to s.e.c. and doj investigations so what does this mean, do you think, for the future of crypto regulation >> here we are, day of the midterms, sam bankman fried has been one of the biggest and most active political donors in the u.s. what hans to dc's trust in sam

bankman-fried and the idea he really was the one talking regulators through this, spending time in washington through the crisis, and it's too soon to tell how deep this goes. but does that erode trust in the u.s., in the crypto ecosystem in terms of getting more regulation, him having a seat at the table, and that's really where a lot of these issues started. his take on the dccpa, which is the cftc bill and some of his stances have pegged him on the other side of the entire industry there are a lot of people battling with him publicly >> the crypto natives, the ones who don't want that regulation >> they said we don't agree with you. you're not the voice of the entire industry. he had that pushback on one side unclear how regulators will respond to this now and if there's trust that has eroded. >> meerm, as if there were not enough, a headline crossing that eu anti-trust regulators will

open a full-scale investigation into microsoft's bid for atvi. they'll decide by march whether that deal will go through. i guess one would be large deals are going to get the look. >> absolutely. and particularly in the uk, which has been much more affect in m&a regulation in the last couple years than we have seen in the previous decade >> thank you for rolling with the breaking news. it's always good to have you in. >> appreciate it, carl >> dee >> so kate, at the middle of this, i don't want to get too deep in the weeds, but we started to see the sell-off in the fxt token, ftt i have a bunch of questions. its market cap was about $3 billion, but alameda held $5 or $6 billion worth of this coin. how big a role is that playing in this, and how much of that is more of the same, this really lack of transparency into these tokens, who is burning them, who is creating them >> ftx burns and creates these tokens as part of its appeal as an exchange.

if you're an ftt holder, you get certain rights, certain advantages as a trader on that platform it was also seen as sort of an equity tranche of getting access to ftx, a private company. but retail investors saw this ftt token as a way to get access and exposure and it was one of the better performing tokens if you look at the smaller cap examples the relationship there is they mint it, they burn it, and then the big question and the conflict of interest here is alameda owns, like you said, billions of dollars there, and is using it as much of its balance sheet. they said about $5 billion of this token the liquidity is unclear some people have made the comparison to the celsius token and what happened there. a lot of their bloons sheet is tied up in a token they create and own. so it's -- yeah. >> let's get sam on the phone right now. he's slow venture's partner and a crypto investor. what do you make of what's going on here, and break down this

comment, this tweet from cz for us there's a significant liquidity crunch he's accusing ftx of a significant liquidity crunch how does that happen >> first, this is the wild west. i love this. if you talk about where great fortunes are made and lost and the intersection of the most interesting technology and opportunities in the world, with kind of the absolute, you know, wild hucksterism of it and the intersection of it, long are gone the days where the western expansion went, but this is crazy and i love it. that's my first take i say that as an early large salono holder who is part of the story as well because ftx has been a large part that story to date we have seen waves of people trying to understand where value is in crypto and kind of where security is in crypto i think this is, ftx is iconic,

spf have done an incredible job. what i see in this honestly big picture is, a, these are competitive firms in a lot of ways as with any good ecosystem growing, you get to a certain point of maturity where they can compete with each other, but they all have such vested interest in the ecosystem, they'll help each other out as well the reality, you're looking at facebook, google, a lot of these big entities start out hypercompetitive and they are on some things but as they mature, they figure out they can both compete and cooperate at the same time for the sake of an ecosystem and something exciting and new. that's how i look at it. >> are you saying this is a good thing, this is sam bankman-fried and cz cooperating it has felt like the opsult, they're trying to kill each other. >> look, it's certainly better than them not cooperating and

taking the whole ecosystem down with them. >> but kate brought up this idea i mean, sam bankman-fried has been this white night. he's been talking to washington. what does this do to his reputation and could this hurt the crypto industry at large asmany at least on the institutional side are looking for more regulation. this feels like a swing back to the evangelist side. >> i think this is like when most things, you have a breaking story. i love this stuff. this is wonderful from a business narrative interest perspective. i think the fallout will take a little time to understand. i agree that spf has been a strong voice in washington and his credibility, if he needs to bail out, so to speak, gets knocked a little bit in the situation. you know, but i do think my big picture here is you go from a world, i think about the internet and the kind of world i grew up in where you had the biggest

most iconic, most important platforms and exchanges that are all at one level trying to kill each other, but as they get mature, they realize they need each other and help each other out. that's what i see here i look at this as actually a positive story in that the big players will support each other and keep each other in a good place even when they hit turbulence, but look, on the flip side, i acknowledge your point. i think you're right that the stronger these players are, the more they don't need each other, the more credibility they have >> sam, i hear where you're coming from and i think the spirit in which you love this, here why i don't love it for the people at home is i think a lot of people took these guys seriously when they said that crypto is the future, it's going to the moon they have all this money it's relatively stable the unbelievers are heretics and will be wiped from the face of the earth, but it looks like they were playing poker, and it

looks like that classic situation where some people are at the right point in the pyramid, and they end up okay. and the person at home ends up holding the bag. ends up the sucker and i sort of wonder, what does this do for the overall public's faith in the crypto ecosystem when sam bankman-fried who was recently on the front of websites and the cover of magazines as this white knight who is going to save crypto now needs to be saved? >> one, the idea, i hear your point. i think you obviously have to be careful with this stuff, and in the wild west, it's dangerous. there's no question about that who is going to be playing and how it evolves is an interesting question the way i look at this is, look, crypto is complicated as an ecosystem. not all things are equal and in some cases multiple things can be true at the same time so there's a massive difference between bitcoin and the ftx token. now, it might be hard for a

retail investor to necessarily see that difference all the time, but at a fundamental level, there's a massive difference in terms of how you look at them look, any system that's supposed to be a decentralized future of the internet system is not going to be reliant on one or two individual humans. it's kind of contrary to the whole point. so i think we have to be careful with the narrative here about a single person in the history of crypto being the quote/unquote savior people can play big roles, they can be super helpful, but if crypto is viable as an ecosystem which i believe it is and i think it will be long term very important, we probably do have to move beyond the narrative of white knights, despite the fact the media loves it because you need a face to tell the story. so i don't know, a long winded way of saying i feel for people who got hurt on this stuff or get hurt as these things move around i certainly have lost a lot of wealth in the last year in crypto myself. so i get it on a bunch of

different levels it takes a lot of sophistication to play well, but you can both say as there was in the wild west, a lot of hucksterism, craziness, volatility, and scams, to be clear alongside a lot of deep innovation and really valuable stuff for the future as there was in the west >> sam, i'm curious about you're framing it as industry players have each other's back in a sense. but the way that cz frames this, it makes it sound like he knows his rival is basically in the dust, and he can step in at any time or not, depending on how he feels. >> you know, again, i think we'll see how this plays out going forward, but if cz is smart, and he is smart, he's got a lot at stake in this ecosystem being hypersuccessful, and he understands this can't be reliant on a single firm or institution. as much as the narrative was and has been, it's a great narrative from cz's perspective of so-and-so is the saverier,

they're crypto, just as mark zuckerberg is social media i get the deal, i think a smart player, as he is, recognizes the fact that can't be how you build a multi-trillion dollar industry it has to be collaborative that doesn't mean you can't have a big piece of the pie, but i think if the story becomes i have vanquished my last real rival enemy and i now control crypto, that's a story that's going to be a disaster >> yeah, sam, it's a dangerous ground that we keep treading over there are plenty of people now, jack dorsey saying only elon can save twitter speaking of social media, but please, sam, stay with us. let's bring in moffettnathanson's lisa ellis as well she covers coinbase. lisa, what does this do, this binance/ftx situation, for faiths in crypto in general?

what's the message that you think investors in crypto should take from this and investors who don't have crypto should take from this, if they're thinking about getting into that ecosystem? >> yeah, i would say a couple things that really highlights and maybe will bring to the forefront inveers is there's a big distinction between the exchanges that have been operating in these sort of unregulated or sort of semiregulated areas of this ecosystem. and those that have been operating with more kind of discipline, the longer haul on the regulated side, like a coinbase or some of its u.s. rivals, like a gemini or firms like that. because part of what will be driving some of this liquidity issue at ftx, you know, is that these exchanges are operating not necessarily with the same types of backstops and limits

and restrictions that we are as consumers, i would say, kind of take for granted or are accustomed to when we deal with the new york stock exchange or the nasdaq, and i think it's easy to sort of lose sight of that distinction this issue, i think, while of course it causes shakiness as we saw with coin and also bitcoin and ethereum trading down dramatically earlier today, they have now stabilized because i think folks knowledgeable about the ecosystem start to understand that distinction and it may pave the way for sort of a cleaner, better regulated trading environment in crypto. >> at the samee, lisa, it felt like this whole thing came about from a twitter spat and cz throwing cold water on what may or may not be ftx's finances if you're a retail investor and holding crypto, whatever kind of coins, how worried should you be if ftx, one of the largest platforms in the world, the credibility, the liquidity of it was thrown into question,

leading to this in just a matter of days. what's your advice for retail investors? >> yeah, for retail investors, i would say you really want to make sure you're at an exchange that is holding very explicitly holding the customer funds segregated and fully reserved or really ideally even just fully in cash or in treasuries or something like that. and also, ideally an exchange that is perhaps not participating too heavily in the lending side of the equation what causes these liquidity crunches is when an exchange has a lot of lending activity going on you have like a multiplier effect in the ecosystem, so if you still want to play cryptso but you're nervous about the shakeout and whatever else we may see, that would probably be

a strategy you kind of move to something that's maybe less -- a little more traditional in that sense. >> kind of an amazing assessment, kate rooney i'm going to come back to you because it feels like a moving target for retail investors. they went off blockify to go to celsius that was giving them yield, and then celsius imploded so maybe they want to ftx or binance. if you're going with what lisa says, you want to make sure you're at an exchange that is fully backed, that is not participating too heavily in lending. that's coinbase. is coinbase the winner from what's going on here could cz inadvertently be pushing up another rival >> that's a good question. i was looking at the stock price. coinbase was down significantly this morning it recovered a little bit here too, but it's one benefit of being reshugulated and being ine u.s., they have to have public audits, they have to have that information and level of transparency so investors can look directly into what's happening under the hood at coinbase where they

don't have that ability at ftx one thing i want to bring up as well in terms of ftx and what it means, the international business has been way more profitable because ftx has been able to do arguably some of the riskier trading strategies that are not approved in the u.s. they don't do as much derivatives trading. ftx from at least 2021, it's by far the least profitable side of the business it's a slower play, and they're going to have to really operate within the guardrails in the same way coinbase has. >> right >> kate, i hear you. i want to bring sam back into this, if we still have him what this raises for me, again, is a question of maybe it's not different this time. right? maybe crypto, at least in the near term, is not just this entirely different world of money. it's a risk asset just like all kinds of risk assets, and in this case, we don't have a lot of visibility under the hood in

various tokens and even various exchanges into exactly how this works. even when it comes to coinbase, yes, they're a public company. we can see what they're reporting, but the fluctuations in crypto overall and people's faith in individual coins and even the regulatory rules that come out as it applies to individual coins are going to have sometimes a very quick impact, sam, won't they? >> yeah. one thing that wasn't mentioned which is most critical is if you go back to ininception of cryptocurrencies and the whole point, the whole point is to not need to rely on centralized parties or third party exchanges. look, if you're a long term believer as i am in bitcoin and kind of some of the core fundamentals of what's going on, the real answer is don't rely on any changes. go for the long term accepts the fact there will be volatility, and go on with your life

i think if you're going to have something other than the core decentralized assets, your point is well taken, which is some of thee are really risk assets and they're assets that will mover in various ways and get more complicated. you need to know what you're investing in because there aren't guardrails. it's like walking on a tightrope and got to be really careful about things for sure are more risk at that versus things that are truly a different type of asset class. as much as it's easy for one things if you can go to market cap and see a,000 different things, one of it nuances and dramatic differences between different parts of these things as you look at it. i don't know, tick a long-term view, make sure you know what you're investing in is the core

of all of it unless you really know what you're doing make sure you know what true risks are versus things that have different properties. >> lisa, i'm curious given how easy it appears to be to engineer a run on one of your biggest rivals and then offer to buy them at a dish count, does that make you uneasy about covering the space overall >> well, it -- it definitely -- i mean it certainly is -- we're a volatile and risky environment, that's for sure very unpredictable in that way it takes a strong stomach to be focused in this space. it's also a reason why i personally like to focus a lot on the businesses that are

really focused on the infrastructure aspects of crypto more than these exchanges themselves, meaning in addition to a company like coinbit a company like circle, paxos, signature bank that are building -- they're maybe less sort of sexy day to day but they're building the plumbing infrastructure, doing the picks and shovels types of investing >> we've got to leave it there for this conversation. we point out this happened with bitcoin holding steady lately at around 20k, so who knows what happens from here. thank you. more on the story after the break plus highlights from my exclusive conversation wh itthe exclusive conversation wh itthe chairman this is the system you built to transform your business.

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the regulatory future of social platforms and big media mergers. the richest man in the world last month bought one of it major social networks, yesterday made a recommendation about which party people should vote for and the social network in this country tiktok is owned by achinese company and there are questions about where the data goes now, i know this isn't technically under the fcc's purview, but should it be? >> whoa, you went right there. >> get it out of the way >> well, first of all, vote like it matters because it does and second, you're absolutely right that stuff is not under my jurisdiction, and i want to be cautious because it's congress who gets to decide what's my authority and what's outside of it but you really do touch on something there, which is that the universe we think of as

media is changing so fast and our laws simply don't keep up. and i think that's challenging for regulators i think it's challenging for industry, and i think it's challenging for consumers, and we are going to have to modernize our frameworks for all these things over time, and certainly the fcc will be willing to offer thoughts as congress tries to evolve those laws, but we're not quite there yet. >> let's talk about mna. when it comes to local television, there are questions about how that's going to go does it make sense to, you know, look at innovation happening quickly in areas like 5g, like twitter, like tiktok and say maybe we should, you know, let these companies bulk up and compete or do you say no

>> so, and you knew this was coming, i can't talk about transactions presently before the agency >> just generally. >> i think that's a reasonable question to ask. i think one of the challenges for an agency like mine is some of my laws have a sort of vintage quality to it that when i assess transactions involving broadcast air ways, i'm broadly looking at the communications act of 1934. when i think about cable television and channels, that's the cable television act of 1984 and sometimes am if you're getting modern 1992. and then the bulk of our telecommunications framework is from 1996. and, you know, in 1996 i had an aol account. i thought i was really cool for having it. >> you were in '96 >> i appreciate that and things are changing now and i think the challenge is now our laws again don't always keep up.

what you do as a regulator is look at those laws and try to identify what are the values that are in them that apply to this moment. >> we also talked about rural broadband and 5g sort of access and how that's important to the overall economy and how covid showed that, but there's a lot on congress now to get done. also i would point out she said she was able to get things done with a gridlocked fcc. >> kind of breaking as this industry tries to figure out how to regulate or not regulate itself what she says, carl, is that facts and laws don't always keep up as a regulator she just has to look at the laws and identify the values no small task and i love you went right for it and asked her the hard questions right away. as i would expect no less.

>> great stuff, john that's fascinating and of course ties right into the election cycle we're right in the middle of overall even though we got caught with that breaking news regarding crypto has been a pretty good session. close to a one week closing high ten-year treasuries getting bought a bit we're below 414. big night with election mid-term results. let's get to the judge who's here at the nyc at post nine all right, karl, thanks very much i'm scott wapner front and center this hour, rally and risk what that means for stocks and your money we discuss that with the investment committee joining me for the hour. let's check the markets as we often do to kick things off. today on this tuesday we are green. it's election day. you've got the dow good better than 500, nasdaq almos