Pod Insights Equity Podcast Equity Monday: AI can do everything, but can crypto do something? About this episode This week, crypto prices are static, unlike a particular valuation and Alex is still mad about SPACs. Here's the rundown:
Stocks around the world are happy that America is once again going to avoid a default; congrats, United States.
At the same time, the crypto market is a bit boring right now, due in large part to muted trading volumes as the crypto winter tests new low temperatures.
No one knows what Byju's is worth, but Blackrock is marking its price in one consistent direction.
Serve Robotics is having a good run as a startup, partnering up with its prior parent company.
The WSJ has some great data on SPACs that drove us nuts.
Whew. What a way to start the week! We are back tomorrow!
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Credits: Equity is produced by Theresa Loconsolo with editing by Kell. Bryce Durbin is our Illustrator. We'd also like to thank the audience development team and Henry Pickavet, who manages TechCrunch audio products.
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Transcript 0:10 Speaker 00 Hello and welcome back to Equity, the TechCrunch Podcast, where we unpack the numbers and the nuance behind the headlines. It is May 30th, 2023, and this is Alex, and I am coming to you on a Tuesday, not a Monday, because of an American holiday. Whenever that happens, we just push this show back a day and have a very busy, compact Equity Week, but we are back on Wednesday. We are back on Friday. Do not worry. On the show this morning, we have stocks breathing a sigh of relief. Why crypto is kind of stuck. By Jews changing valuation in a turbulent ed tech market. The expansion of cute robots. I love that. And the massive embarrassment of the SPAC mess, part 6000. Let's go.
0:51 Speaker 00 Let's start with a look at the global stock market. Spinning that globe, shares are mostly higher today in Asia. They are mixed in Europe and they are set to rise here in the US at the open, with tech stocks leading the way. So what's going on and what's driving the news? Well, the United States appears to have found a way to pay for stuff it already said it was going to pay for, AKA the debt ceiling vote appears like it's going to happen. Woo, we have a multi-year reprieve ahead of us regarding the debt ceiling, but if we keep using it as an internal suicide threat, we are going to harm our credit standing. Also, it gives me heart palpitations. So let's, you know, stop doing that. Anywho, there are a few interesting earnings to watch out for this week on Tuesday, AKA today, we have both halves of HP and Box. On Wednesday, we have, it's a lot of folks.
1:35 Speaker 00 We have Salesforce, CrowdStrike, Okta, Viva, Insignia, Pure Storage and C3.ai. And then on Thursday, Asana and MongoDB amongst others. So you're thinking, why, Alex? It's the end of the second month of the quarter. Why do we have so many earnings? Well, it's because this is what happens when a bunch of SaaS companies have their fiscal calendars offset by a month compared to the calendar calendar, and then everyone reports a month later than you would expect. So a lot of SaaS data coming your way. Get excited. Moving on from stocks, what's going on in blockchain land? Well, here we are again. Bitcoin is worth around $28,000 and ETH is up around 3% in the last week to around 1,900. And the overall crypto market cap, again, I know that number has issues, is stuck around 1.17 trillion.
2:20 Speaker 00 So I think I'm going to record that segment once and I'm just going to copy and paste it into every single episode the rest of the year, because nothing is happening really on the price front. The bigger story in crypto land, I think, is actually falling trading volume. And I'm probably going to write about this at some point in time, but trading volume, according to data from the block, saw its seven day moving average of the value of crypto trades fall to around 10 or 11 billion dollars recently. And that matches what appears to be kind of record lows set earlier this year. There really has to be a trading volume recovery for crypto to kind of, I don't know, reinflate again. But the big boom we saw in trading value in March has since deflated. The question is, what can reignite interest in Bitcoin and its friends? Well, at the same time, new AI tools are being used by nearly everybody. And I can't just drop this contrast.
3:05 Speaker 00 A checker dataset highlighted by Tech Mean this weekend noted that, and I quote, "85% of American workers have used AI tools to perform tasks at work. Millennials lead the group with 89% saying they've used AI at work." And yeah, that's what demand looks like. So I'm still bullish on blockchains. They're going to be useful for something at some point in time. But that something is starting to seem smaller over time. And the in-time riff is starting to actually test my patience. So as AI does everything, can crypto do something?
3:37 Speaker 00 All right, enough about all that. Let's talk about a couple of startups. And first up, we have Baidu's. Now, back in March, we reported that BlackRock had cut the valuation of Baidu's, which is, and I know you know this, India's most valuable startup worth about $22 billion at its peak by nearly half to 11.5 billion, according to filings at the time. Then today, TechCrunch reported that BlackRock has yet again cut the valuation of its holding in the Bengaluru-based startup, this time to about 8.4 billion. And that's even as the most valuable Indian startup, aka Baidu's, continues to raise capital at what appears to be A better price. So this is a fascinating saga, and I think it's essentially an episode of price discovery.
4:19 Speaker 00 Keep in mind that this is not some podunk company. Baiju's may be the best funded ed tech startup of all time, raising around $6 billion, according to Crunchbase data. And that is a lot of coin. The question is, what is it actually worth now? It's a great question. Thank you. And not one that anyone seems to know the answer to. But then again, the company did just raise $250 million in what Techrinch said was, quote, "structured investments" that had a valuation cap of $22 billion attached to them. But that's not quite the same thing as raising equity capital at that price. In short, companies that did not go public are now having to deal with what would have been a relatively simple price movement,
4:58 Speaker 00 AKA down on the public markets, but they're doing it while they're private, which is way harder, way messier, and frankly, more embarrassing. But how about some good news? I found some. This morning, Techrinch's Rebecca Bellan reports that Serv Robotics, the Uber spinout that builds autonomous sidewalk delivery robots, is expanding its partnership with Uber Eats. Now, the Nvidia-backed startup will deploy up to 2,000 of its cute little bots via Uber's platform in multiple markets across the US. So yes, the Google-Eyed little bots that can bring you a burrito are expanding, and I love this. I live in a college town, and I would love to hire robots to zip around and do my bidding.
5:39 Speaker 00 Why? Well, hiring human staff is incredibly expensive, but small, cute robots, very cheap. And interestingly enough, Uber's doing even more stuff in the world of autonomy. The company is also working with Waymo to bring Google's self-driving cars to its ride-hailing platform in Phoenix, a large American city. I hate driving, so that's good news for me. And there is a little bit of history here. Way back when Uber was a startup, it riffed on how self-driving cars would make or break its business. And that actually turned out to be wrong in the short term, as no one has yet figured out self-driving cars. But we are getting closer, and it seems that Uber is still in or around the sharp tip of that particular spear, be it for Uber Eats or Uber Classic.
6:21 Speaker 00 All right. Next up, what we call a C block in the notes doc for the show. And it's basically the space that I have to riff on things that make me mad. So about a week ago, when Virgin Orbit, not Virgin Galactic, mind, went kaput, finance Twitter mocked its SPAC deck that showed it rapidly scaling to billions of dollars in revenue. That didn't happen. Now, if you are a regular equity listener, and thank you, by the way, I love that this show is powering along at its sixth year or something. You know that SPACs got hot for a minute, a bunch of companies rode them to the public markets, and then largely fell apart. It's a bit like driving a race car to the start line of a race, and then hitting the gas when the lights go green, and then you watch the wheels fall off, the engine explode, and the bodywork melt. But don't worry, everybody.
7:06 Speaker 00 Rich people did just great. Now, The Wall Street Journal did the math that I had been telling myself I'm going to do for a long time, but never got around to actually doing. And so they report that, and I quote, "Executives and early investors in companies that went public via SPACs sold shares worth $22 billion through well timed trades, profiting before share prices collapsed." And my response to this is, of course, they did. The issue is, no one else seems to have done as well. The Journal went on to note that, quote, "Companies that went public this way, aka SPACs, have lost more than $100 billion in market value, at least 12 have filed for bankruptcy, and more than 100 are running low on cash, battered by higher interest rates and rising costs."
7:50 Speaker 00 Sigh. Look, SPACs have a reputation for a reason, and SPAC promoters should go hide and shame if they made a bunch of money by floating trash. Doubly so if they got special deals along the way, leaving retail investors holding an incredibly empty bag at the end. Shame. Let's bring it back.
8:11 Speaker 00 And that is our show for this fine Tuesday morning. Don't forget, equity is coming back to you on Wednesday and Friday. If you want more of us in between the shows, though, we are on Twitter, where we tweet under the handle @EquityPod. I tweet under the handle Alex, because it's my name. All right. Well, talk to you soon. Hugs. Bye.
8:29 Speaker 00 Equity is hosted by myself, editor in chief of TechCrunch Plus Alex Wilhelm, and TechCrunch senior reporter Mary Ann Azevedo. We are produced by Teresa Locan Solo with editing by Kell. Bryce Durbin is our illustrator, and a big thank you to the audience development team and Henry Pickavet, who manages TechCrunch Audio Products. Thank you so much for listening, and we'll talk to you next time.
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