tv Bloomberg West Bloomberg October 9, 2015 10:30pm-11:01pm EDT
emily: a multibillion dollar tech merger is in the works. dell offering $33 a share for emc. ♪ emily: i am emily chang. this is "bloomberg west." coming up, tesla hit a speed bump all wall street. barclays is the latest to downgrade the stock amid continuing questions about delivery. plus, uber is reportedly pointing a finger at an industry rival in a major data breach. and the man, the myth, the movie. "steve jobs" opens this weekend. we will hear reviews from apple
cofounder steve wozniak. first, to our lead -- dell is offering $33 a share to buy emc. this, according to a person with knowledge of the matter who said the deal may be done as early as monday. shares of emc are rising in after-hours, along with vmware, that could be tied to the deal. cory johnson is in the newsroom. you have been digging through the numbers. what do you make of the price and speed at which this deal may be done? cory: we will see. this is a hard deal to imagine. it is about a $64 billion market cap acquisition for dell. they don't have that kind of money. they have nowhere near that amount of money. this is a minnow swallowing a whale. just look at the size of dell's business. we know dell already has a ton of debt. of course, the company was taken private in large part through borrowing money. if you look at the size of dell's business, it has about $12 billion in debt, given an enterprise value of maybe $25 billion.
they are trying to buy a $54 billion company. to get to those numbers, $12 billion in debt, $23 billion enterprise value, that is an estimate from bernstein. emc is a $55 billion company. how does a $23 billion company buy a $55 billion company? by borrowing loads of money. that's michael dell's play here. emily: what does this mean for the future of dell? what can we glean from michael dell's vision, if he is indeed pursuing this deal? cory: he is looking at that storage business at the heart of emc. he is expecting to have an additional portfolio of products to sell, mainly because the p.c. business is in the tank. numbers today saying that the p.c. business falling 7% year over year, one of the worst declines we have seen in that business. it suggests dell got the wrong stuff. and then you've got joe tucci at emc, a dynamic, strong leader
who has been looking to retire, postponing that for a while so they can figure out what to do with emc. that is propelling emc in this. emily: cory johnson, i know you will be continuing to watch the story. we will bring you developments as they happen. i do want to talk about tesla, falling to its lowest price in six weeks after barclays downgraded the stock to an equivalent of a cell. tesla shares have declined every day this week after three analysts slashed ratings. on tuesday, morgan stanley analysts lowered their price target. on wednesday, ben callow downgraded to neutral. today, barclays trimmed its 12-month target price and rated the shares underweight. analysts have been skeptical of tesla's future since the company's model s unveiling last week. here to discuss, dando left, an analyst at jefferies who covers
tesla. dan, you are saying buy. why? guest: as far as i am concerned, all of the negative data points have not been confirmed by management. it has all been downgrades and data points. if you think about tesla, you have to think about the long-term story. they are building a new car on the same production line. they have to deliver it. they have to actually get it ramped up. these are baby steps they are making. you have to look at the long-term story. you have to look at 2016, are they going to lower the battery costs. we have done in-depth research that shows you can get the battery costs down to $125, literally 50% decline. you have to look at all of that and then you have to think about the demand out there. the demand is very big. that is the other piece of research we have done. demand is there. the cost of the battery is going to come down with the gigafactory.
that is what makes this a buy, despite the short-term noise. nothing more than that at this point. emily: max, you have been covering the industry for 15 years. a lot of negative sentiment has been building since we saw the model s. if you ask me, it looks like the mom's batmobile. it is a pretty awesome car, but it is expensive. why are reviews so mixed? guest: i think in the long run, i agree with dan. tesla is a terrific company. it is one of the few automotive companies out there with a vision. their vision is to change the world. their vision is to bring sustainable transportation to the mass market. once the model 3 comes out, i think that is one elon musk and tesla's vision will be realized. emily: the model 3 is the cheaper version, supposed to cost $35,000. dan, should they be focusing more on that now?
guest: the issue with that is it is $35,000, that is the base price. people usually tend to upgrade. let me tell you about the research we have done. we have actually surveyed 145 owners of teslas currently. what we found out is that people tend to pay a 60% premium for their tesla. that means if they sell a car for a base price of $35,000, at $45,000 people upgrade that tapped into the market of $35,000. you're looking at a $20 million car more or less. selling 500,000 cars or 350 model 3's, it is really not that big of a deal. i think everyone should be focused on the model 3 and lowering the cost of the battery. that is the most important part. that would allow them to sell the car and be profitable and generate a low 20's gross margin, which is in line with ford or g.m. if you adjust for what the dealers are taking. the 6% to 7%.
emily: i want to ask your guys your reaction to some comments elon musk made to a german newspaper yesterday. in a question about whether he was concerned about apple poaching tesla engineers for apple car's efforts, musk said, important engineers? they have hired people we fired. we always jokingly call apple the tesla graveyard. if you don't make it at tesla, you join apple. i'm not kidding. as a follow-up, they asked, do you take apple's ambitions seriously? musk said, did you ever take a look at the apple watch? laughed. it is good apple is investing in this direction, but cars are very complex compared to phones and smart watches. you can't just go to foxconn and say, build me a car, but for apple the car is the next logical thing to offer significant innovation. a new pencil or a bigger ipad are not relevant enough.
max, your thoughts? max: i think any aspiring engineer is looking to work at tesla. it is a much more appealing proposition. as you just mentioned, would you rather be working on the next iphone or the model 3, or maybe even working for spacex and consider space exploration? emily: right, but if apple is working on a car, isn't apple potentially an exciting place to work for a supreme engineer who might want to work at tesla? max: it is an exciting place to work. however, tesla has elon musk. elon musk is a brilliant engineer and physicist. more importantly, he is the driving force behind every decision at tesla. very similar to what steve jobs used to do at apple. as an engineer, you want to work in the environment where the cofounder is in the trenches with you working on every little detail of bringing the new car, the new vision, to market.
emily: the reality is none of us will know until we see this supposed apple car. max and dan, thank you both. uber appears to be getting closer to an answer in a high-tech whodunit. this is important. multiple reports say uber investigators have found evidence linking an executive at the rival ride service lyft to a major data breach last year. in may of 2014, an unknown hacker downloaded names and licenses of 50,000 drivers. uber says it believes it was a breach to poach drivers and filed a lawsuit in san francisco to determine the hacker's identity. uber traced it to a comcast ip address, and a federal judge ordered comcast to reveal that subscriber's identity. lawyers for that individual are appealing the ruling. coming up, today is the day the highly anticipated steve jobs biopic is out. we will hear from his former
emily: now to a developing story. he has only been on the job as permanent c.e.o. for a week, but jack dorsey may be ready to make tough decisions that twitter. recode is reporting that twitter is planning layoffs next week. no word on how many jobs will be cut, but the company said it had 4200 employees as of last quarter, more than double the roughly 2000 employees it had in 2013 before the ipo. twitter's user base has grown less than 50% in that time. we will update you as we get developments. we did reach out to twitter and
the company declined to comment. the long anticipated steve jobs biopic hand by aaron sorkin opens today. multiple actors tapped to play jobs dropped out. now, the film is getting oscar buzz. i interviewed sorkin on studio 1.0 at the end of last year and asked, with all the books and movies already out about jobs, why he thought there was more of a story to tell. aaron sorkin: i think you could do 10 more movies about steve jobs. i think if you lined up 10 writers and said, write a movie about steve jobs, you would get 10 different movies, all of them worth going to see. emily: did you ever meet steve jobs? sorkin: i spoke to him on the phone three times. the first time, he called me because i gave an interview in which i said everything i have ever written, i have written on a mac. he called me to thank me for saying that and asked me if he
could send me -- they were coming out with the new laptop -- he said, let me send you this, just play around with it and tell me what you think. the second time he called me, it was to invite me to the bay area to tour pixar. he wanted to know if i would be interested in writing a pixar movie. the third time he called me was to ask me to help him write his commencement address at stanford. emily: you helped him write that? sorkin: honestly, i fixed a couple of typos. emily: i was there that day. my sister was graduating that day. sorkin: that is amazing. emily: it was beautiful. sorkin: yeah, but i don't want to suggest for a moment any of those thoughts were my thoughts. that was the brain of steve jobs. i helped him put the music to it. emily: how hard a character is that to write? how hard is that to bring to life? how much pressure is that? not putting any pressure on you.
[laughter] sorkin: the same pressure i feel when i am writing anything. maybe with a little bit of sauce on top of pressure, because he is a person so many people have so many strong feelings about. i have met and spent a lot of time with the other seven characters who are in the movie. joanna hoffman, who is a fantastic character. she was the head of marketing for the mac team. john sculley, who was the c.e.o. of apple and became famous or infamous, depending on how you look at it, for firing steve jobs from apple. he is a wonderful man and a great character. in this movie, jobs has conflicts with all of them that
get dramatized and worked out in a very compressed, very claustrophobic environment. emily: i also spoke with steve jobs' former p.r. mastermind who helped launch the macintosh and went on to work with jobs at pixar. here is her take on the film. cunningham: he does an excellent job of characterizing the good, bad, and ugly of steve jobs. there is plenty of all three of those with him. he is, was a complex character. what i really love about the film is it takes the roundness of his character and expresses it in less than two hours. emily: that is andy cunningham, steve jobs' marketing expert. founder of the cunningham collective. in spite of all this drama, this movie is now getting oscar buzz. what are you actually hearing out there in hollywood? what is the reaction?
>> "steve jobs" opens this weekend in only about four theaters. two in new york and two in l.a. it is off to a strong start. michael fassbender, who was picked after christian bale and leonardo dicaprio decided not to play the role, he is by pundits the number one choice supposedly for best actor. but there is a long way to go. leonardo dicaprio has a film he stars in which has not even been seen yet by many people. that could change things later on this fall. emily: i have been trading messages with steve wozniak today, steve jobs' cofounder at apple. he says he's going to see the movie tonight. you actually spoke with him about his thoughts on the film. i know he spent time with aaron sorkin. what did wozniak tell you? guest: i have spoken to him a few times since the first trailer came out. there are a bunch of people that
worked with steve jobs, that worked at apple, that consulted on this film, and he is one of them. he feels it correctly portrays the character of steve jobs, if you will. he will agree with others who say this is not a documentary of the creation of apple as we know it today. it is sort of a three-part film, behind the scenes on the launches of three iconic mac products. a lot of it is not true, apparently. that does not mean he does not recognize the steve jobs michael fassbender plays. emily: i'm excited to see it. thank you for joining us, our bloomberg entertainment news reporter. coming up, we sit down with the man aiming to crowdfund a mission to the south pole of the moon. why? that story next. ♪
emily: in today's edition of "out of this world," we recap this week in space, starting on pluto. nasa's new spacecraft is still sending back images from its historic flyby in july. this week, we learn from the most recent photographs pluto's sky is blue and huge patches of ice are mysteriously red. moving on to mars, curiosity has found evidence of streams and lakes that existed billions of years ago. according to nasa, the red planet was once capable of storing water in lakes for an extended period of time. the challenge, they say, is
figuring out what happened to that wetter planet. closer to home, we turn to earth's moon. lunar mission one is a research project aiming to send an unmanned spacecraft to an unexplored area of the moon. what makes this project unique is it is crowdfunded. anyone, from an individual to a government, can buy into the mission which raised $1 million on kickstarter last year. the founder joined us to explain. ♪ guest: lunar mission i is a robotic mission to the south pole of the moon for scientific research. what we are going to be doing is taking away the need for space agency money with all of us paying and putting it into the hands of those who want to take part. if we can get everybody involved around the world, then our market research suggests we could raise in the region of $4 billion to $5 billion.
we are going to be the first to drill deep off the earth. that will lead to a kind of technology that can be used for the search for life on mars, for example. we are also going to deposit a time capsule of life on earth, an epic record of humankind and our species, a database which can survive a very long time. just being able to launch it has been successful. we think we have tapped into an interest in space, life on earth, and even more so the views that people have of themselves, their mortality, their lives -- all all being put together as a record for imagining what might happen in the future. emily: david iron, founder of the lunar mission one project. the latest campaign is called "footsteps on the moon" where people can buy digital space in an epic time capsule that will
be dropped off on the moon in 2017. staying with crowdfunding, tilt is one of the fastest growing crowd platforms on mobile, with the company saying it outpaces rivals like kickstarter and gofundme. it is backed by big names and has been used for more than 300,000 campaigns. the c.e.o. and cofounder james beshara joins me with more. it is great to meet you. are we at a point where we could crowdfund a billion-dollar space launch? >> we love seeing that. crowdfunding, so many people have waved their hands about it for a few years. i think it is still not really mainstream. but with big projects like that, our m.o. is putting crowdfunding in your park it pocket, making it an everyday type of activity. i think it has a long way to go before it is mainstream. it is fun to watch it get there. emily: what makes you different
from kickstarter or gofundme? where are you seeing your growth? guest: the easiest way of explaining it is we are focused on crowdfunding for groups of friends. it is $500, $1500 for a party bus on friday night. $500 for a tailgate sunday. a group of friends pooling money for a ski house on tahoe. most key is it is focused on a mobile use case. emily: i'm glad you mentioned that. what i hear is that you might use tilt to fund your keg party. but you have kickstarter being used to fund syrian refugees. is tilt being used the way you hoped it would be used? guest: it's an interesting question. my first crowdfunding platform was focused solely on poverty alleviation -- micro insurance and micro-finance specifically, and built out tilt to be more
bite-size, everyman approach to crowdfunding. i think the significance of that is, crowdfunding in the conventional first generation tools is seven years into it, and it has not made it into people doing it more than two or three times a year. if someone can build the simplest, most accessible platform -- all crowdfunding is good crowdfunding -- but if you can build it for a mobile context, for someone to start with a $1000 community project, the idea is they will come back and use it for more ambitious ideas. emily: where does it go next? guest: we are growing fast on college campuses. we are growing about 40% month over month on college campuses. it is exciting to see. we have been doing it for three years. that is a lot of fun. internationally is our next biggest target. emily: james beshera, ceo of tilt. thanks for joining us. you will have to bring me the most exciting space tilt-funded project. that does it for "bloomberg west."
mark: i am mark halperin. joe: i am john heilemann. we will put you down as a maybe. happy national multi-cheese day, sports fans. bernie sanders ain't crying. the next speaker of the house, paul ryan? >> if he decides to do it, he would be an amazing speaker. he has got to decide on his own. >> there is a good chance. >> i will not run against paul ryan. if paul ryan gets the nomination, i would support paul ryan.