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tv   Bloomberg West  Bloomberg  October 30, 2015 5:30pm-6:01pm EDT

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cory: shares of solar city collapsed 20% during what happened? we explain the solar city nburn, next. i'm cory johnson in for my work wife emily chang and this is "bloomberg west." bids left and right about who came out on top. is better than one. to cap is better
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than one. it gets ready for a new way of looking at the world. and taking onber taxis. down 20%,solarcity the biggest fall since the company's ipo in 2012. one reason -- the report installation growth will slow. they will become cash flow positive after being -- you guessed it -- cash flow negative. --y also want to reach their their giving up on their goal for customers. that's not it. sun edison down 10%. our correspondent covers energy for bloomberg. we are glad to have you here, as well as the bp equity research
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or. mark, let me stay with you. the stockcity news, is down. i sort of do not care about the stock. i just want to talk to you because you are in the world of energy. is this different from what else is going on in solar or is this compression across the industry? guest: there are a number of headwinds that solarcity and its competitors are facing. it will see a tax credit that is quite beneficial to its bottom line -- cory: it is a tax break of 30%. 14 months left in the calendar and the makes all the difference as to whether a solar installation is profitable or not. a bigyes, that can make difference indeed. the other thing that can make a difference, how much they get paid for the amount of energy they put on the grid. cory: the way i had solar at my
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house, i did pay the utility for the right to sell the power to them, and that fee can make a big difference in a profit or loss. mark: that's right, and utilities are trying to raise those fees on solar customers. have had a buy recommendation on the stop for a long time now, and i just wonder -- i might as well ask the hard question because you can take it, i know. if i were an investor and i gave you my money and said, here's my retirement fund. you say the stock is going to 75, and this thing goes massively cash flow negative, worse every quarter, you are sickened by your by rating, then the company says, yeah, what we said before, what we told you was going to happen is not going to happen. we are not went to get to a million customers. we're trying to find a way to get you free cash flow. what happened that you did not expect? guest: sure.
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a million customers, that's a marketing gimmick. that's not a relevant thing to look at. will installrcity single-handedly more than every other solar company in the u.s. combined as recently as five years ago. this is hardly an end of the world when it is growing 40%. that is slower than the 70% or 80% the market has been accustomed to, and it's normal to have a shareholder rotation from the hyper, fast money crowd momentum players -- 47%: so, the stock is down -- you call it shareholder rotation. i'm thinking more about the business. it sounds like what the company decided is, if they lose money on every sale, maybe they are not went to make up in volume. i'm just wondering if there is anything different with this company today than what you saw six months ago? well, the multiple has
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certainly compressed. per share of $33 net retained value. that is the amount of the contract they hold ready in the bag. any growth they have in the future though, that is on top of that. that $33 a share today has a tod chance of growing $45, and 2016, that is before the tax credit even goes down by the way. when the tax credit goes down, the volumes they have on their business should flatten out, maybe grow a little bit. the margin will certainly be smaller. that's true of every u.s. solar developer. $45 that is locked in the bag by the end of 2016 does not depend on anything that happens with government policy afterward. the duration of the solar
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panels though -- the company is suggesting there is more than 20 years -- they will not just get the first 20 years of performance from the panels, but in extra 10 years on top of that. how long do you think the average duration of the solar panel, how long will it continue to crank out just as much energy on your one or your five? pavel: sure, the panels are off the shelf. solarcity does not manufacture them. cory: but they are guaranteeing the performance of those panels. solarcity they are under warranty. in general, 25 to 30 years is the standard from the mainstream module suppliers. two thirds of them are in china, by the way. germany, japan, all of the countries where solar originated, those were installed in the 1980's. they are still operating today. cory: but with significantly decreased capacity.
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let me turn to you, mark. the notion you can put in a solar panel and have it running 30 years from now, is that realistic question mark is that going to happen with all of the solar panels on our houses? that's difficult for me to say. it could affect performance quite dramatically. cory: whether the panels on your roof are in improving -- mark: the degradation rates, i think, it depends on who you're talking to. i think most people expect the capacity of this panels will degrade over time. years,aybe it will be 20 maybe it will be 30 years. maybe we don't know. the last thing we will bring up our natural gas prices. that is an important component. when compared to solar, compared to expensive coal or expensive natural gas -- we don't have
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expensive natural gas anymore. the price of natural gas in just teed of years is down 36%. mark: yeah, natural gas is hovering near a three-year low. no one expects the price to bounce back up anytime soon. there are shale reserves across the u.s.. and natural gas helps set the electricity prices, and that does make it harder for solar to compete, especially without subsidies. cory: it will be harder to sell. thank you so much, mark. pavel, analyst at raymond james. sierralast three weeks, sierra has been the target of two rival
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chipmakers. skyworks solutions had a bid to buy pmc for $11.60. sweetened semi its bid. billionve been $90 merger deals in the chip .ndustry this year another stop we're watching -- hp. trading -- the last a of hp trading as hp is today. it will trade as hp inc, that printers and pc's and the others will be hpe, for those of us in the know. that is supposed to be the growthy part.
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but the s&p does not think so. they downgraded it. our correspondent who covers this as joined us. so, hp has been shedding parts and adding parts for a while here. it is hard fairly -- to think more important company for silicon valley than hewlett-packard. argue a lot of people that. this is a huge deal. tens of billions of dollars, tens of thousands of employees and everything is about to on sunday.f, it's amazing. but this is a trend. you saw ebay, even restructuring at google a little bit. it is a big step and it's not may be as crazy as it seems at first glance. this is a very strange split up. they announced right before that both companies would instantly going to restructuring, which means layoffs among other
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things, after the split. and i've compared that to building a new house and saying, and the first thing of going to do is remodel the kitchen. never-ending at this coming. they are up to 82,000 layoffs, and it could go on and on and on. guest: i think there are some folks on wall street there are little tired -- that are a little tired of, ok, we are going to cut more. ok, we are going to cut more. is going to lead to growth? you'd like to see the ceo of just one of these companies -- guest: exactly. it makes is able to compete better. that is something that she is really betting on. obviously their big rival dell is not. we will see if either company has any growth. the predictions right now is both companies will continue to shrink even after the split.
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there are real challenges of the growth. but again, saying, let's give this a try -- nothing else that she has tried his words. bryan womack from bloomberg news, thank you very much. coming up --anti-uber. getting prepared to take on the ridesharing giants. plus, the number one selling xbox game repeat success on mobile. ♪
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cory: anyone who has used uber on lap friday or new year's eve knows all about search pricing. but uber says that puts more drivers on the road when demand is high and wouldn't that be a nice thing? a new study says not so much. researchers been a month hailing say theves and they number of available rides went down when search prices were in effect, with the assumption that drivers stayed away, knowing they would get fewer customers at a higher rate. sticking with the taxi app work, a 10-month-old startup stepping up against uber. 200,000 cars so far
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including the u.k.'s largest many cap group. groupcab -- minicab gro up. but can anything stop uber? i will warn you and our viewers that i am completely biased, back being a new york city cab driver during win the mets won the world series. guest: thank you for having me here today. this is a game changer. we ring together private hire and licensed taxis in one place, enabling consumers to have the widest choice possible -- cory: how does it work? : we are a comparison site enabling consumers to choose between licensed taxis and private to hire cars, giving them the biggest selection of
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choice, whether they're looking for private hire cars or a private taxi. the company they want at the price they want at a time that is convenient to them. there was a time when new york taxicabs have radios and they could talk about where the passengers were. the law made that go away. maybe that is not such a new thing. the technology is different. daniel: that is absolutely right. what we have been able to do, by connecting into dispatches, we an unparalleled user experience, empowering consumers was choice. we are also able to give for thes on the backend fleet operators, enabling them to see where the jobs are, ofether it is over a period
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time or real-time. the all about empowering in mobile marketplace. cory: i'm glad about that. will you have drivers doing both, driving for uber and driving for your service? work directly with fleet operators. our relationships are with them. we get the benefit of all of the drivers under this please. as a result, we are coming out of the gate in new york with an unprecedented 128,000 vehicles from day one. cory: it will be interesting to see how well that works. ceo, thank you very much. we appreciate your time. daniel: thank you very much. xboxfall, the top-selling game, making the leap from consoles.
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they will be working with the mobile developer. that is in the titanfall gorgeous universe. it will be easier to play on a touchscreen than first-person shooters. that after nintendo announced it was delaying its highly anticipated mobile game app. private jet use is on the rise. it is how i get to work every day. ♪
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cory: silicon valley is playing hard to get. according to the new analyst,
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they've only raise $7 million so far. and that's mostly from one dude who donated to arco rubio, a comparative pittance. says research shows there is "no tech candidate" this year. turning now to aviation, specifically private jet aviation. i joked that was how i get to work every day. i would like to. for example, this private jet. the overall number of flights .ave increased 17% north american flights are up 159% and the bay area -- right here in tech land, pushing a big increase in flights. .ight now, the chairman, thomas
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good to see you, thomas. thanks for booking me a flight on your jet. it's an interesting business. business is always going to grow when the economy is growing. what is different this time? guest: when people feel really rich they go out and buy an airplane rather than sharing them. 56 global all around the world. if executive is flying in europe or asia, anywhere in the world, needed.ll who are the big three out there when you look at the biggest companies and private aviation in the world? thomas: we recently got our chinese approval. we have a chinese airplane flying. we are in the moment -- in the mainland, here in the u.s.. we own all of those airplanes. we make sure that they are
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identical. be in delhi or london or here in the bay area, they are always the same price because we control the asset. cory: how many planes to have now and how many did you have a year ago? lester we have 44. right now we are at 57. -- last year we had 44. right now we are at 57. we are online for 60 by the end of the year. as for the tech industry, this area here flies a lot to asia. they fly across the pacific. are you going to binary thing airplane? tech companies are in a venture capital position. with us, they just -- of ther the duration fund, to be charged for certain investments. i wonder, when you look at the business, if you have a different kind of plane for this different kind of business.
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obviously a plane that will take you from chicago to new york or fly your around the south is not the plane you want to take from san francisco to singapore. thomas: exactly right. global or the challenger 350, a brand-new airplane in the u.s. flying coast-to-coast. we choose the airplane that is right for your mission. cory: the average age of your planes? thomas: 1.8 years. cory: very young for your fleet. thomas: it's a very, very young fleets. it has the latest technology. that is what clients want. they want to work on board. they want to feel home away from home. peoplehat makes tech different as far as what they won on the plane? the types of amenities, types of his news they are doing? thomas: it's a lot about efficiency. think they love the efficiency we offer.
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they are more savvy when it comes to a new business model, which they embrace and they embrace us a lot here in the valley. story.ke the assets they do not need to buy an airplane. they buy the hours they need. cory: interesting. thomas flohr. are getting how you him. i'm taking the train. starting monday, we are expanding the show to be one hour, 6:00 on the east coast, 3:00 here. that's all next week. we will see you on "bloomberg west." ♪
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>> from our studios in new york city, this is "charlie rose." charlie: admiral william mcraven is here. he retired from his post as u.s. special operations commander last year after more than 3.5 decades of military service. he oversaw the expansion of america's most elite warriors across the globe and is known for devising and directing the navy seal raid that killed osama bin laden in 2011. in a speech marking his departure, chuck hagel said a full account of his military career has yet to be written. when it is it will have to be heavily redacted. he is a warrior leaderha

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