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tv   Taking Stock With Pimm Fox  Bloomberg  December 19, 2013 5:00pm-6:01pm EST

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♪ >> this is "taking stock" for december 19, 2013. i'm pimm fox and we are going to focus on things that are sweet. since 1926, godiva has been one of the premier makers of earlier chocolates. its chief executive will tell us about the company's global expansion plan and the keys to long-term growth. plus, the sweet success of kabam , the company behind the game "the hobbit." he discusses his push away from
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casual gaming. and the automobiles of the year for 2013. we will tell you this week rides to have top our list. all that and more over the next hour. first, headlines with carol massar. >> nike is out with its earnings after the closing bell. the sporting goods giant posted more than analysts estimate. posting fourth-quarter profits that beat analyst estimates as well. the cruise operator benefiting from higher ticket revenue and more onboard spending by passengers. that stock is getting 2% for the day. u.s. treasury secretary jack lew is warning congress that the u.s. -- is urging lawmakers to raise the federal debt limit weeks before then. attention target shoppers, your credit or debit card information may have been stolen
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by cyber thieves. according to target, data from 40 million cards may have been compromised. shopping between november 27 and december 15. target is working with law enforcement officials to find those responsible. joining me to tell me more about this from washington is alex senior researcher for immunity inc.. good to have you with us. explain what happened. you have to tell us about the register, the actual card reader and something called track eight up. explain. therack data is essentially information encoded on the back of your credit card on the little black strip. that authenticates your credit card in order to make purchases to your account. so what hackers have done is they have compromised the small computer you slide your credit card through and they have been able to collect this data across
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target stores across the united states. as a result, target is reporting that 40 million people may be affected. difficult is this to accomplish? >> very. the interesting thing here is you have about 1700 target stores across the united states. figure you have a few dozen of these credit card machines. this takes a significant engineering investment in terms of time and planning to roll this out so that the machines are stable and continue to operate and no one would be the wiser, which they have done for the last three weeks. salehis leaves the point-of- and goes to a central repository and is intercepted. can you explain what happens next? data has been intercepted, and that happens right there while you swipe your card, what happens then is it is to acted and sent out server or the attackers control for later distribution.
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asis sold to what is known carter's and they can make clones of the card because they have tracked a to and can encoded onto a new card and use it to make transactions in your name. >> tell us about this world of buying and selling credit card information. it is very efficient and it has been done for a number of years, since the late 90s. the biggest one was in 2005 at 2006 with the tj maxx breach by mr. gonzales and his associates. this will be about 40 million, so it's going to come close. significant.ery the fbi and secret service have done things against this organization, against feel withons that stolen credit cards. a lot of them take place overseas or anonymous servers that make it difficult to track
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both the fbi and secret been tracking this. >> how much does it go for on the black market? lex it depends. of that really a number i have off the top of my head. buyers in bulk because the onus is on them to extract cash from the card. typically, high-quality credit card data can go for several thears per card down to prices variable. you have been doing cybersecurity since the age of 16. should companies be spending more money on thersecurity, specifically retail industry? >> absolutely. the retail industry and
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industries in general are governed by regulatory laws. companies need to spend smarter. there has already been a significant investment. you move toward hiring firms that do attacks against your company to find out where your vulnerabilities really are. that is the smart investment. as for retail needs to start spending money. kansas -- what is canada's describing these? what is canvas, for example? >> and this is a program, a software suite designed by my company, a community. show it provides high-quality exploits for vulnerabilities. your computer updates every month with vulnerabilities and patches for them from microsoft. what we do is write programs that take advantage of those vulnerabilities for our
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customers that allows tracking attacking totion demonstrate that these motor abilities are real and serious to their customers and that will hopefully and very often does spur those customers onto action to fix those owner abilities, to be more aggressive about security. , how do youorge safeguard your credit card information? >> i do not use my credit card online and i pay cash everywhere i go is the honest answer to that question. >> thank you very much. alex mcgeorge joining us from our washington dc bureau. coming up next, washing -- breaking news out of washington dc -- interdigital has lost its patent infringement case. this is coming from the international trade commission. phil mattingly joins us from washington with the details. >> interdigital has lost the case -- this is a big win for nokia.
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these companies that interdigital was seeking to pull out of say when this case. a juneacks with decision. interdigital stock went up about 5% and the international trade commission said they would take another look. we reviewed this case and the decision coming down now -- basically what interdigital is trying to say is these handset companies were using its patents and/or stealing from them. herewas an ongoing issue and in china too. what the error national trade commission said is they don't have a case. so it is a big win for nokia. 3000 patenttely infringement lawsuits were brought in 2012. is this just big business? >> i think so. when you look at what is going on across handsets, when you look at apple or android, this is how the game is being played
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right now. are going back and forth, the patent issue with the obama administration trying to figure out how to work with this issue, if we can't pejoratively call them patent trolls, this is the way things are working from a business perspective. it's frustrating for some companies but other companies utilize this. interdigital has made it very clear they were going to utilize this if there is a possibility of an import and to extract some royalties. they thought this was the hammer they could bring to the table but obviously they lost. this is not the end of these cases. these are going on nonstop and i don't think this case or any other will put a hold to it anytime soon. >> thank you very much, phil mattingly, joining us from washington dc. interdigital losing its patent .nfringement case coming up, my next guest cross company began above eight them
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some restaurant in san francisco back in 2006. now, they are a global empire with 700 and toys. we will tell you what they do, next. ♪
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>> this is "taking stock" on bloomberg. i'm pimm fox. during its opening weekend, the in $73bit movie raked million. that helped get the word out on peter jackson's latest film and warner bros. turned to my next yes to develop an accompanying game. kevin chou is the cofounder of kabam. secured a 120 $5 million in venture and strategic investors to include google, intel, pinnacle, warner bros. and mgm.
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sann joins us now from francisco to tell us about this world of gaming. free to play mobile gaming for traditional layers. explain a little bit about this. they came to you and said we would like you to make a game question mark tell us more. >> enqueue for having me. we flew down to meet with them and they wanted to learn more about games in general. this was about three years ago. they were excited about mobile games and social games. the first thing they want to do is say what's happening? about what our company did and they brought up the hobbit & the deal about two years ago. the game has been a massive success, grossing over $100 million in the year since we launched it great >> pretend for doing the studio pitch. explain to people who do not is, what do you do? >> we make names that are
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free to play. the consumer can download game without having to pay for it. findey pay the -- as they how you, we create a premium experience for those players to be able to buy different types of virtual armor, weapons, different armies, and they can take it at battle against other players as they compete for domination of the realm. this domination comes with money. you are expected to do sales of $325 million a year? >> that's right. we are going to do $325 million this year. we've in a huge growth company over the last four years. 2009, we did $2 million of revenue and that has grown 325entially to over elliott, an 80% increase over last year's $180 million in revenue. the company grows fast as we build new products and business
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lines as well as enter into asia and europe with our products. that has been another big growth driver for us. >> who do you make these products for? tell us the joint ventures you have established? >> we make the products ourselves. we have games that are strategy "king of camelot" has grossed 200 $54 billion. apple named it to one of their top 10 grossing applications, not just games, for all of 23rd in. these are the games we developed ourselves. that we partner with studios like warner bros. and mgm to create games like the hobbit. we partnered up with universal to create "the fast and the furious." we did a deal with fairmount to do a game around "the godfather." we develop these with our partners at hollywood and they become these earring franchises
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that create 365 days of engagement per year grade the opening day may have huge box office but there may not be a huge engagement and we provide that 365 days a year. >> any chance you will put together a game that tracks a small company that begins above sum restaurant and battles the forces of modern business? >> we are thinking about it. we will green light that soon. >> give us an estimate of your success. are you hiring? >> we are hiring a lot. the company four years ago as 25 people and as you mentioned, we were above the restaurant. the company today is over 700 people and we have eight offices, headquartered in san francisco, development center in vancouver, offices berlin and austen as well as soul -- soul among south korea. >> you graduated from the university of california berkeley, civic vladdy with a
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bachelor of science in is this. your parents say anything to you when you decided to go into the world of gaming? >> i actually graduated nine of commodity and they said why did you get a similar commodity? i started my career in finance and we decided to create a games company. my parents said we know you love laying games as a little kid and this is your passion, go for it. they were very supportive. >> one of the things you did was $18 million later and the berkeley stadium. tell us. >> we started talking to berkeley and they were looking for a partner for their new stadium. we ended up naming the field at california memorial stadium. partnership goes beyond a low blow and the 25 yard line.
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we are doing a number of internships for student athletes and there's a big scholarship program we are putting in place for students studying disruptive technologies. effort a big recruiting to join firm said we recruit about 10% of the workforce, so that's an important part of our overall workforce in a foretitive market engineering and technical talent and creative talent. the partnership is very collaborative. it honors veterans and we are very excited about the partnership. >> thank you very much. , cofounder and chief executive of kabam. coming up, the chief executive of godiva chocolates is going to talk about how they achieved their sweet success, next. ♪
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>> money, u.s. tax reform hit another speed bump. max baucus was hoping that next year he could make the biggest change to the tax code in nearly three decades. be presidentto obama's leading nominee to be the next ambassador to china. that leaves in place oregon democrat ron wyden, an advocate for tax simple dictation. here to tell us more about this pozen,hip change is bob a senior research fellow from the brookings institute. tell us about the money held by u.s. companies that is a missile outside the united states. thehat is domiciled outside
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audit states. >> large companies make most of their profits, quite a bit of their profits overseas. they are theoretically sets the -- subject to a 35% tax but they don't have to pay any tax unless they bring the money back to the u.s.. as a practical result, $2 trillion is overseas and not coming back to the u.s. that $2 trillion is not building plants in the u.s., not paying dividends to u.s. shareholders, and not helping them acquire u.s. companies. moreover, it's not raising any tax revenues for the irs because the money isn't coming back. we need to solve this problem to stopre out a way encouraging that money to stay abroad. >> how did this start? anddid this tax rule upcoming into being? >> it's a historical anomaly -- historical anomaly when they had this theoretical tax and they said you could do for it. but now deferral has become permanent. as long as you keep the money abroad, it is
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indefinitely deferred. that's why we have close to $2 trillion overseas that's not really helping anybody. >> had there been serious proposals and washing and to bring the money back rushing mark --? >> there are two proposals but two camps that are very far apart. what is the people in the business community who want to bring it back at 5% or 6% and have a tax holiday like we did in 2004 under president george bush. most people say we can't do that again. we are not exceeding the system grade it's a temporary thing and the rate is too low. you liberal democrats want to tax it now and 35% and people say that's too high. these people reasonably relied on the rules. my proposal is an intermediate proposal. what is the average marginal effect of the tax rate in the advanced industrial society.
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17%.rns out to be if you're making profits and you are taxed at 17% or more, the company should be able to move the money freely wherever it wants, including act to the u.s. without taking any tax. but if you're making profits in a tax haven like the cave and the -- like the cayman islands or bermuda and your only paying 2% tax, no more deferral, we will charge you right away the difference between a 17% and 2%, which is 15%. this would encourage companies that are doing business in real european and asian companies, not tax havens, to free up their money and bring it back to the u.s. at the same time, it would discourage these companies from figuring out clever ways to allocate those profits to tax havens. >> thank you for eliminating that for us. chocolate.
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how sweet it is. we have godiva's chief executive, next. ♪
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>> this is "taking start -- "taking stock is good on bloomberg. >> mark zuckerberg is selling shares of facebook to help a taxes in an offer worth yearly $3.9 billion. about 27 million shares will be offered by facebook with an additional 41 point three 5 41 point 35es -- million shares from zuckerman and mark andreessen. tesla says it did not cause a
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fire in a california grosz. shares of tesla have pledged footie five percent after three reports of battery related fires in october and november. gardener of the olive and longhorn steakhouse restaurant chain's plans to separate its red lobster business amid declining sales. in a statement released today, they said while they plan to execute a tax-free spin off of red lobster to shareholders, the company may consider selling the business. coming up tonight on "bottom fed" we will talk about the 's move on the global economy and the eu summit in brussels. join us from washington. that's coming up in about 90 minutes right here on bloomberg tv. are uponlidays everyone and that means chocolate. chocolate is a starring treat at many holiday parties and functions from stocking stuffers to corporate it talks is.
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godiva chocolates offer an array of choices. . want to bring in jim goldman thank you for coming in. you must be a very popular person these days. >> everyone loves chocolate, particularly the dive a chocolate this time of year. it fills all the needs and wants you just spoke of. >> let's talk about the history of godiva chocolate. founded in belgium and it took a while before it made it to the united states. i think it wasn't even here until the mid-1960s. >> we have been around since 1926, a belgian chocolate tear through and through. we came to the united states in 1967 on fifth avenue and we are still there today. we have expanded around the globe and here in north america. >> there have been ownership changes over the course of those years. it was owned by campbell's soup corporation and they decided that was not part of their toategic focus and sold it
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the largest consumer products company in turkey. we run very stand-alone and they let us do our thing. they have appreciation for the quality of our chocolate and have them supportive of us growing the business. >> they put some money into the business because you've expanded at a number of stores. >> we have more than 600 stores globally and in the u.s.. we are in all the major malls and top department stores. you can get us in locations this holiday season. >> let's talk about the holiday season and seasonal chocolates. what is on the menu? >> this is our favorite time of year because we are a go to place right now. christmas around the corner, it's time to buy chocolate. one of my favorites is the holiday travel flight. you might say what is a flight to mark you probably have heard of wine flights or beer flights, we're the first ever with chocolate truffle flights. this one has a peppermint, dark chocolate truffle, gingerbread,
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ourberry tort truffle and favorite, milk and dark chocolate. dipped strawberries are fantasticks, our gold box is classic. experts want to create a do taste, do they call your office and have you come down? >> that's my favorite part of the job, when i'm with our executive chef and i get to sit with him and he shows his stuff. he's a real perfectionist, like a wine connoisseur, he's the chocolate connoisseur. he knows how to bring out the best in chocolate almond best ingredients, and they are amazing. >> you are talking basically about the cocoa bean that has turned into chocolate. it is native to the new world, to united states and mexico, going back hundreds of years. what is the process by which you
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turn that into a product that comes from africa now and how does a it into those things? >> i was in cocoa producing africa this summer and saw where the cocoa beans are grown. we are very selective. we go for the best ingredients. it's remarkable what happens with that cocoa bean. it is magic. the other ingredients are fillings, not just the best cocoa, but the best dairy, the finest vanilla -- >> how do you get the fillings in the truffle? like that is the magic. that is what terry and his team of chefs around the world -- they know how to bring out the best grade >> there must be a specialized assembly-line equipment. get the ship in a bottle? >> it is a little bit like wine. not everyone is the same. there are magic in terms of how you treat the ingredients and bring it to life.
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so when it's in your mouth, it's complicated and has character and you love it great >> what about expansion plans for the company? >> we are aggressively expanding around the world, building our businesses at retail. we have a great e-commerce does this here. is looming this time of year. we are supporting our innovation . we've never had more innovation that we have this year. >> what is your favorite innovation? >> i love dark chocolate and peppermint is a big believer that of the season. i also loved our dip strawberries. there's a lot to love at godiva. >> what classifies dark talk to? i see something that says it's 85% or 65%, is there a classification? >> dark chocolate is anything over 50%. but we go up to 85%. our mid-ice world goes up to 85%. some people worry if it's going
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to be harsh, but the complexity and smoothness of our dark chocolate is really magic. >> what has happened to chocolate prices? is it more expensive? >> cocoa prices are up. taken prices in our store this year. we have a range of price points that are accessible. we also have an amazing ultimate truffle box, which is $165 of wild. if you want to impress a corporate customer or anyone on your list, that is the one. >> you are going to leave them with a very sweet feeling. >> happy holidays. january first, many consumers may be looking to take a break from chocolate. i will show you an app that gives dieters a major leg up, next. ♪
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>> first, let's assume for a moment you are a pregnant aegon with food allergies. this being the case, there are a lot of ingredients you can't have that you should avoid grade let's also assume you might be visually impaired and that may be difficult to read the ingredients on a food box. --next guest has a solution scanavert. joins me now.i what is scanavert question are >> it allows you to scan a barcode and shop safer for your family. >> when you say compatibility results, what is a compatible to? >> you put in a profile of anything important to you, a food allergy or your prescribed drugs. you could limit the amount of carbohydrates or sodium and then you scan the barcode and you get information as to what is incompatible with area so what
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is the point of learning what can't have? >> how do you end up making money with this? >> that's a good question in my family wants to know that because we are a free app. basically, we are hit the compliant, so i don't permit at the platform. that doesn't mean i will curate certain offers, so if you are looking for a customer, like tropicana, perhaps they don't know their product has too many carbohydrate rams. they might think they are giving goodtary or 50% chop of a product. customized personal, entrance to the target customer you're looking for. >> and this is something you can take using your smartphone. off the usproduct and what comes back is something you can see. phone, so youyour
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have a product picture so you make sure you have the right item. all, yourist them peanut allergy, your lipitor, your adderall, it exceeds the amount of carbohydrate grams you have established in your setting. thisis useful because information does exist in silos, so why not put it all together so you can shop safer and make wiser choices? generale companies like mills and kellogg's have to do anything to their packaging to make it compatible? >> we have sophisticated algorithms that look for all these terms. on one of them, whether it's wheat free or milk free, enlist the terms that are translated that will generate an exception for that food allergy. >> what has and the reception so far? >> we started out free and
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initially got a lot of young guys saying it doesn't give me the price. theidn't look at description, so he charged, so we are now free again. you can look on our website and see the reviews on the itunes market and google marketplace. up to three and a half or four stars on some. couple't looked since a of days ago, but the response has been very good. there are a lot of groups that use us. there's a tradeshow coming up and we will be sending the materials. we get a lot of grassroots folks who say they've made their lives easier. i feel really important when somebody tells me i made a difference in their life. that is what companies should strive to do. tool for myningful
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customers. >> you are in an illustrious group because you have been nominated for an edison award that will be awarded in 2014. i'm always thrilled when i'm ofthe radar of some type award that has sophisticated nominees. i believe tesla motors is nominated, ford motors -- i'm these to be in that company. >> as far as using the actual scanning device, is it ethically challenging? does it have to be updated on a regular basis to accommodate new food? >> we basically get a product feed him that automatically loads. as the user, you just scan the product and your results are right there. it allows you to -- part of what we did is because we allow multiple users on the same account, you can use it, your
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wife, your child, anyone can use it under the same umbrella. so that's kind of nice and you can see what products are good for one person but not someone else. that is what consumption is. its health care. >> congratulations on being the award, leave. -- award nominee. coming up, the top suite rides of 2013. i will be joined by bloomberg's automobile guru. he has his favorite cars of the year. find out if yours is among them. ♪
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>> from $21,000 to almost a million dollars, my next guest gets to test drive cars that of budgets,variety be at the porsche spider or a mazda six. these two vehicles in addition to five additional cars are
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jason harper's list of cars that top it in 2013. just thinking that there are seven on mobiles that would be in this year's jason harper grosz. let's start with the porsche 918. >> this is my sports car of the year. 845 million. -- 800 and $45,000 car and it's a hybrid. you can drive this in all electric mode and then kick it into high gear and go 214 miles an hour. it is the ultimate sports car. i haven't driven it think what like it. >> what kind of looks do you get when you silently drive around? >> it is the killer app rate its convertible and people are looking at you and it's pretty wild. it is thenext to sedan. >> this year it is the mazda six. -- not a lot of horsepower,
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but it's stylish, and got good looks and is very efficient. i think 36 miles a gallon on the highway and it is comfortable. it's a smart car. you are looking at all the corollas and the courts and you can say that is my car. >> the mazda six. what happens if you would like to mess up jason harper's hair? >> a little less tactical is my convertible of the year, the jaguar f type. two seats, not a lot of room, the v-8 is the one you want and it's got almost 500 horsepower. and it sounds like there's a lion in front of you going crazy. this is a very visceral car. it will muss your hair and sounds great great it's the impractical choice you want for a convertible. >> let's say you got to take everybody on a trip. >> i hate to do this, but it's the brand-new range rover. the range rover -- it does so well -- it is lighter and more
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efficient and the interior is more luxurious. you hit it it and think i can live with this car every day. particularly in the winter in the northeast. you can drive over huge snow piles and it makes it great >> what does something like a range rover go for? wax you can easily get over $100,000. less gas --to use >> if you want to be a green a diesel.'s diesels are the best for highway miles. it's got all the great things. about 500 50nge of highway miles. >> 550 on a tank question are >> i saw almost 40 miles a gallon on the freeway. you are eating everything you want in the three series.
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rex and about 40 grand for this? we like our executive sedans. it's an important category of you are going to be driven. i chose the audi a eight. it's another diesel. readye going to see about six miles a gallon highway which is as good as the 328 the. it has all the technology. if you want the four-wheel learjet, take the f eight model which is faster than the supercar audi r eight. --when you say faster >> zero to 60 in less than four seconds. >> if you could find a place to go zero to 60 in less than four seconds. >> you could go very gas efficient or rip your hair out. >> that's not bad.
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>> that brings us to the car of the year. >> this is the car you want under the tree. >> it is the segment changer. of all things, it's the corvette, the seventh generation stingray. corvette has been around 60 years. they never quite. it right. this generation, they got it right. the interior is superlative and it performs like everything you could hope for. it's also pretty gas efficient and it is smart. he gets decent gas mileage and you can get into it starting around $50,000. storyas reading your about all of these automobiles. you describe the feeling of like beinge corvette a pilot in a jet fighter. >> it's very true. it feels like aycock bit and you are very in control of the car.
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with the you are going wind and it's a very special feeling. you can dial in how much of that feeling you want. it's very safe and stable. if you want to tool around town, you can do that. if you want to live around the racetrack, you can do that also. >> what was your best experience of the year driving question are >> the 918 which i just drove on the racetrack. there is only going to be 918 of them in the world. it's a million dollar car, all things said. >> you mentioned in the story that there are other automobiles that can cost you that much anymore, but you selected this one? fax they've done a great job on the design. porsche has an amazing racing heritage but it's still a street legal car. their last supercar was about 10 years ago, so they only come out with a special model every 10 years. a really have to do engineering
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and mechanical heights and porsche has accomplished that with the 918. and different. you get out of the car and know that was not a normal day. >> does the corvette as the car of the year give you a signal of what automakers can accomplish question are >> it was made out of duress. they weren't sure if they were going to make one. they get the details right, but they did some things i don't see on other cars that are really smart great it shows that gm can do it. >> thank you very much. excellent.r, it is 56 minutes past the hour. that means it's time for on the markets. the dow jones industrial average added 11 points. the s&p 500 loses a point. than 11aq also more points. coming up next, "bloomberg west." ."ank you for "taking stock
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i'm pimm fox. good night. ♪
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>> live from pier 3 from san francisco, welcome to late edition of "bloomberg west." we cover the global media and technology companies that are reshaping our world. i'm emily chang. our focus is on innovation, technology, and the future of business. let's get straight to the rundown. the value of the bitcoin is falling fast, now cut nearly in half from its recent $1200 high. we look at why, and where you can even use it. mark zuckerberg


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