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powered by more than 2600 journalists and analysts in more than 21 countries. bloomberg. "bloomberg west" is next. >> welcome to "bloomberg west." coming up, tesla feeling the heat. new reports of a second car a crash, while using tesla's much-hyped auto pilot. the technology properly vetted? we'll discuss. consigns itsrry classic smartphone to the museum. the u.k. struggles to make sense of brexit, we'll look means. the vote
thefirst, to our lead, second tesla driver has been car'sd while using the autopilot function. he was on the pennsylvania turnpike, on autopilot, when it on july 1. this comes just days after the u.s. national traffic safety administration opened an investigation into tesla's a fatal crasher in may. it raises questions on whether testings done enough and whether drivers properly understand its limits. is auto blogger, ed. let me start with you. this technology seems like it was sort of so cutting edge that tore was no way for it really be reviewed by nhtsa before it hit the streets. >> yeah. i think every regulator around little bit behind the ball. but i think the bigger issue of lack of sort
understanding of just how cutting edge this technology aslly was, by branding it autopilot and sort of capturing -- surfing this wave hype around technology, tesla realit seem like this was autonomous technology. i think what we're finding out is that drivers believed it was in fact it was really something quite a bit less than full autonomous driving technology. >> are we right to suspect the drivers of just not doing the right thing here? it's a bit of both. i think as ed says, the branding of the product and the hype around it means that some people will interpret it as offering way more than it really does right now. you know, tesla's own be somewhatns can confusing. think it was protocol last year that they were talking fullycars becoming autonomous 15 to 20 years from thereut tesla getting
much quicker. i think there's just a race among these companies to establish leadership and people can think that that means they're already there. >> yeah. know, this guy who died in florida, joshua brown, teslaot just any old driver. he was well-known in the typically community for pushing the limits of this car. uploaded several videos on youtube, showing what he can do with the car. tesla owners, they said the autopilot feature would work under certain circumstances. they're watching actual video, shot by joshua brown. he posted this online. in this video, he appears to have been demonstrating how the atopilot feature helped avoid collision with a truck, a truck that pulled into his lane. commentso attracted from the other tesla users, both critical and complimentary. they even tweeted out a link to this very video, saying the of autopilot to avoid a truck.
they went on to shoot at least one more video and post it on youtube. me that thes to relationship between tesla and of -- i don't know. certainly didn't want him to drive dangerously, raises the question about what the company's relationship with its users. as athink the company whole has a reputation of in everyhe limits, which way. elon talks about building the best manufacturing company in the world. impossible targets. you know, whether they're sales manufacturing targets. i think, you know, in this particular instance, you know, tesla has been very quick to gives a lot ofit warnings about the system, when it neveres on, that tells drivers to simply switch it on and away they go. have to worrylly
about things. >> right. >> but obviously when you're is called,hing which you know, public testing of the piece of equipment that can take into a life-or-death situation -- thet's a beta, but it's on streets. >> right. it's not some app you're testing on a phone. around,people driving large pieces of equipment. and the danger is definitely real. >> and there's the notion out the car gets better and better with software updates, this autopilot functionality. but we just showed sales figure. released numbers that missed their own estimates. released them on a sunday, three-day weekend, in summer.le of the you know, you couldn't find a time to bury them more. nonetheless, stocks selling off and the company kind of lowering carsguidance of how many they can mark. two quarters in a row now with declining sales.
i wonder if you think there's any relationship here to the tesla tolivery of the limitlesse of limitless technological advancement. >> i've certainly noticed a the online conversation around tesla, going back nine months or more. and i think what you've seen in month or two is that it's really accelerated. think what's at issue here is tesla's key asset, which is not reallyit's technology or anything else. it's elon musk, specifically, credibility. i think you have a decade really of promises from musk and tesla, which have not been fulfilled. then you have this sort of disconnect between perceptions ofwhat autopilot is capable and the reality of it. what tesla's commitment to issue withthen the non disclosure agreements. you're seeing a number of issues, this disconnect between tesla's promises and the perception it creates, clashing with reality more and more. what's happening is that the credibility, the faith, this
thisdible evaluation of company, the bright future of this company, is starting to unravel. i think that's a really dangerous thing. i think that tesla's communication strategy, burying releases at the end of a week, before a long weekend, and various other ways communicating things, shows it really doesn't understand that the key issue here is its both its c.e.o. and as a company. i think it really needs to its communication strategy as much as anything else to get a handle on this situation before it unwinds further. >> when you look at this -- i was at a july 4th parade. there were two model x's in the parade. they pulled up, opened the and people literally oohed and awed. i was -- awed. i was struck by that, knowing died in ane had just typically.
tesla. the wow factor is still there. i wonder if these kind of events really can change that narrative. >> absolutely. it was very funny. what elon was talking about, the solar city a acquisition. said he got e-mails from two sets of people. product people who effectively got what he was doing and finance people who couldn't really understand what he was doing. best think ed made the point here, which is tesla's key -- sell yourself short now. in-- is its credibility, particular elon's credibility when it comes to raising money, which, you know, tesla periodically has to do in order to deal with these challenges. money beforeaised they released the knowledge of this death in florida, even though apparently the begun.gation had already >> that's right. and also before, they then turned around and said, hey, we
and allke on solar city its debts, with a rational that a lot of people can't make sense of. even there, there have been noises around, you know, what the hell is going on with this company? community will like him, as long as he's still raising money. thank you very much. we appreciate your time. coming up, san francisco legislator is proposing a new companies to combat the city's homelessness problem. question remains, does tech inherently drive housing prices higher? been five years in the making. juneau spacecraft. this is bloomberg.
>> we're learning more about what went on behind the scenes as lincoln shopped itself around. microsoft is deeper into the negotiating process, possibly theing the prices of software giant higher. facebook took a look and passed the acquisition. we are standing by with more. sarah, we started to get these from the s.e.c. filings that are required these days on such deals. were redacted. the players here, very interesting. b, c and d is how they're known in the filing. thatyes, very interesting there was so much interest around linkedin and you are right. sales was very much a factor in the deal. price of the deal was for $26 billion. probably about $5 billion of that was added during the negotiation process. tokedin kept going back
microsoft and saying they had this outside interest from another bidder. microsoft whotell it was. but that was enough to convince uprosoft to push the price to the one that eventually won the day. that is interesting too the notion -- sales force, of course, wouldn't have the cash deal.this kind of so we'd imagine the bid would have been probably for stock. maybe they would have had to the deal.bt to do so that's sort of part of this. but also, there's a corporate thing. it's interesting that linkedin would go with a microsoft is traditionally a lot more staid than the guys acrosssoftware the street from us here, those guys at the sales force. linkedin's business would integrate well with either either. the sales force obviously caters force,customers, sales software. this is something that, as you noted, the stock part of the was the reason why
linkedin ended up going with all-cash deal instead. having the stock component would require more shareholder approvals. it would be more complicated. and ultimately, you know, the decider here at linkedin is majorityman, who is a shareholder and has a lot of sway. go so, yes, they decided to with microsoft, but jeff wiener said -- he's the c.e.o. of linkedin -- and has it was very important to them that they remained a separate entity from microsoft, remained in the bay culturept their company and did not have to integrate fully with the team in seattle. >> interesting stuff. sarah from bloomberg news. thank you very much. you can find her story on bloomberg.com. san francisco based tech companies could be facing a new tax. proposing aals payroll tax. city'sion to the
homeless problem. this will be a big hit for twitter. glenn, to talk about what's driving up housing prices. >> don't blame me! are a reallys interesting real estate company. ofonder, you've spent a lot time here. you're in seattle. the effect on technology, on because is interesting, we've got these pockets of very high-priced housing where technology companies are doing big business. >> yeah. i mean, you asked earlier if intrinsically drives up home prices. and the answer is yes. when you create that much wealth such a concentrated group of employees, you're always going to see home prices increase. of course, we want that. everyone wants high-paying jobs. such ancisco just has enormous concentration. the challenge here is just creating middle class jobs alongside high-tech, high-paying jobs, because right now the only people who can afford to live in are the people working
for linkedin or twitter. >> well, middle class jobs and housing.e right? that's the other part of this. and mixed use development. something every city needs, whether it's technology or not. >> absolutely. so for a long time, the city hand.ut its head in the there's so much historic character here. my backyard. >> not in my backyard. although now there's a movement in my backyard. if you look at the number of housing starts in san francisco versus othere markets, san francisco still lags behind almost every other city. seattle has double the number of starts. double the number of new construction sales. so the problem is going to get worse here, because even as people pile in, we're seeing fewer houses being built compared to the rest of the country. >> talk to me about what we're in terms of housing and price elevation. americaest market in last year, i think in terms of price increase, has been san francisco. seen that, of course,
new york and miami have done really well. now,are we seeing right the trends of the last month or two? >> well, san francisco's crest, were to ask san francisco real estate agents, we see the owner of the property, too aggressive. likehile, in weird places grand rapids, michigan -- >> that's not a weird place. there.is from actually, lots of weird people, including much of the johnson family. >> i don't think having your dad there exonerates it. the hallmark of a spraining place. what's really strange about it seeou don't expect to double digit price increases. and in milwaukee, nashville. many of these folks are coming from seattle and denver and austin and san francisco and higherrying to escape home prices. and now, that is starting to change. so some of the safe havens where has always been affordable, are less affordable. if you were to ask agents there, tell you it's not
just one month or two months. it's a long-term trends of telecommuting. people who are checking in from afar. that house prices are going to go up everywhere. ini mean, rising prices grand rapids is good for johnson carpets. but you talk about the nerd bird when we were on the radio. flights when people are going from one tech hub to another. san francisco to denver, right? san francisco to austin flight. you're seeing people go there and stay there, those places cheaper.sing the do you think it's really driven by housing prices? >> absolutely. business out of catering to people in technology a home somewherey else. when you ask an agent in denver or dallas, where do you meet customers? he'll say at the airport. facebook for google or or other companies but just coming to these new markets in of the country,
because they want to have a yard and be able to go to public schools and have them be good. some of that is just impossible in san francisco unless you're truly a millionaire. >> i've got friends getting married and starting a new theyy in portland because just couldn't handle the bay area. it's a common story. >> portland is off the hook! going crazier than every other place we serve. >> it's probably the lack of johnsons. all right. glenn, really good to see you. thank you very much. years up, it's taken five and 1.7 billion miles. juno successfully entering jupiter's orbit. why is this coined the hardest thing nasa has ever done? look at that. this is bloomberg.
hoping it will get 22 million subscriber shares. up 7% in the news, one of the nasdaq's best performers of the day. five-year billion-mile journey, juno has entered jupiter's orbit. it is the first solar powered spacecraft to successfully make it to the outer planets in the solar system. company'sup with the project manager, kenny, ahead of the spacecraft's successful entry. important to science, because it's so massive. and it was one of the first or first planet that was formed in our solar system. veryientists are interested in what is in jupiter, what made up jupiter. what the resttly of the planets and what we are made up of. goodis will give a indication and unravel a lot of the mysteries about where -- how formed andystem maybe even where we came from. >> what are the biggest this -- the making
biggest problems this could face? >> well, other than the sheer some of they, biggest obstacles have to do with massive amounts of radiation that surrounds the planet itself. radiation is very damaging to electronics as well as people for that matter. but it's so much higher intensity at jupiter. our mission, our spacecraft, ofl be going in and out these radiation betle at different -- belts at different which will be absorbing this radiation, which its demiseally be once the mission is over. >> remind me when this off.craft took >> we launched it in august 2011. technological advances that have ensued in years that you wish you could have taken advantage of? >> well, we haven't run across yet.f those things there are certainly, every time we make a new build for a spacecraft, there's new
technology and better ways of doing things. low-power electronics is key. of the key things for jupiter is to be able to run on power.small amount of the solar rays, although they're 500ive, only generate about watts on average in jupiter. >> you talk about radiation jupiter. the magnetic fields on jupiter unusual.cularly >> yes. it is the largest magnetic field of any of the planets in the is theystem, which subject of the interest of some of the science going on, while we are there. magneticstudying the fields and its origin, how it gets there. highso is a place for energetic particles like electrons and pro tons, running at speeds much higher than what they normally do or closer to the speed of light. new questions do you think we'll be prepared to start looking at, after we get some of thatnswers to the science this is expected to give us?
to haveurse we're going to get the data first, before we see what the next questions are going to be. we certainly, after understand more about the formation of jupiter, we'll start thinking more about, what mean for some of the other planets? for does that mean maybe exo planets in solar systems beyond our own star? >> well, lockheed martin's juno project manager. coming up, we'll hear from one biggest venture firms on venture vesting in a brexit world. check us out on the radio, in boston, new york, washington, d.c. and san francisco. and anywhere! the bloomberg radio app, bloomberg.com. this is bloomberg.
he was fired over world cup ticketing and broadcast scandals by the ethicsed committee. the transportation security's administration says it plans to on luggage and could cut wait times. donald trump could announce his running mate as early as next week according to cnn. previously said he would announce his vice presidential nationalhe republican convention which begins july 18. the estimated mega millions jet -- theup to 450 more estimated mega millions jackpot .s up to $454 million global news 24 hours a day powered by more than 2600 .ournalists and analysts
this is bloomberg and it's just .fter 6:30 p.m. in new york i'm joined by paul allen with a look at the markets. good morning. new: we will look at zealand first. 30 minutes into the trading day and currently off ever so slightly. shareholders will vote today on a merger with vodafone, the mobile phone company. "japan be looking at post," today. the ceos indicating more expansion in asia and says the company will be looking for mergers and acquisitions that complement their business that may be possible. after japanar holdings took over. in australia, a sx futures showing weakness.
the big story is the vote counting from the weekend election continuing. the ruling coalition picked up one more seat. they are now on 70. the opposition labor party on 67. 76 is the magic number needed to form a majority government. the former treasurer is warning of risks to us trail you struggle a credit rating should a minority government need to be formed. that would mean fiscal reform would be pretty near impossible. i'm hall alan for bloomberg tv in sydney, australia. allen, for bloomberg tv in sydney, australia. cory: global markets try to brexit from the shock of
just wanting to get back to business as usual. likeon valley giants facebook, dropbox, have headquarters in london. those works throughout the eu with a san francisco outpost just a few blocks from here. >> there's no sugar coating. it has been a big shock to everybody. it has created a lot of conversation on a daily basis. everybody talks about brexit, and this no denying there will be some impact, and i guess the greatest is uncertainty. >> how is it changing your behavior? are you changing how you think about companies you invest in? >> the advice we are giving our entrepreneurs is stay calm. continue building businesses, continue building products. our business venture is a long-term play, and certainly, these greg's discussions will
take at least two years of negotiation -- these brexit discussions. we do not know what the impact will be other than a lot of uncertainty. the best thing we can do is carry on and business as usual. >> does it make you think about a company based in berlin for another region more favorably? does it give you pause about investing in the u.k.? >> as investors in startups, we had to be optimistic and we support entrepreneurs who by definition are optimistic and thrive on change. if anything, we would probably think that, certainly with the decline of the currency, britain has become a lower cost base. it might actually be advantageous for entrepreneurs to set up here. more generally, we invest wherever entrepreneurs start their companies.
i think everybody will continue investing, if it's in the u.k. or in mainland europe. >> if i'm coming to you for advice asking to set up an outpost in europe. my company is growing. i had been thinking about london, but now what should i do? should i think about going somewhere else? >> the key decision criteria for foreign corporations or startups is availability of capital and availability of talent. certainly on the capital side, no change so far. it would be a very strange thing that the government would put up obstacles preventing investment. as far as pools of labor, so far, nothing has changed. we will be watching carefully for new restrictions on movement but the factors that
would lead to a decision between london or any other european hub are the same so far. >> are you worried about recession and the effect it could have in europe and elsewhere around the world? >> we are worried about recession. givesnly, the unknown cause to consumer behavior as well as company behavior to , to maybe notions make that incremental investment or purchase. it is probably realistic to expect that there will be an unexpected negative shock. having said that, startups are not driven by the same factors as multibillion-dollar multinationals. the growth rate is not necessarily affected by plus or -1% change in growth.
>> do you think companies will be going out of business as a result? >> we do not know. the entrepreneurs we back our nimble and adapt their businesses and business models. >> should european startups be thinking more about m&a as a result? >> i think that is a realistic scenario, especially with the currency decline. cost you have denominated in british pounds has become cheaper for you, so britain as a production base has become more attractive, so for european companies to acquire u.k. targets, it has become overnight cheaper. >> where did things go from here? what are some things you keep -- what are some things u.k. policymakers could put in place to keep things growing? >> there's a lot of influence and a lot of force being gathered by venture capitalists,
tech startups, and the broader tech community to protect the current framework and environment. two key tenants are free movement of goods and free movement of labor. ofy will clearly be subjects the article 15 negotiations, which will take long years to play out. we do not know how that will plan out, but it is fair to assume that it is some sort of .ersion of eea type membership in the long-term, behind -- beyond this economic gdp impact, the rules of the game are not going to change dramatically. >> do you think we can get back to a point soon where it is somewhat business as usual, where some sort of normalcy will set in? >> i hope so. every business meeting -- i hope
that every business meeting we take does not begin with, "what do you think about brexit?" unproductivet of time being spent in the economy right now, so i would encourage everyone to go back to what they do. facebook's former chief technology officer has joined the board of twitter. in a statement, he says, "i hope to bring my knowledge and experiences to help jack and the board push services forward." twitter stock lost about a quarter of its value so far this year. coming up, it's like the end of an era. blackberry dropping its classic model as the company transitions.
cory: the latest in yahoo!'s search for a buyer, the deadline for the third round of bids is tomorrow. leading bidders include verizon and a group led by the founder of quicken loans, dan gilbert. it is the end of an era for blackberry, which will no longer , a winnerlassic model for the company until apple introduced its iphone. this is another step toward eliminating its operating system and a pivot toward newer phones running on android.
when it comes to this slow pivot . i am constantly amazed results of sales are down and down and down. -- look, weem is have a smart phone market -- smartphone market that is already mature. we have a company that has lost its direction in terms of the hardware business and just needs to let go. it is interesting philosophically, the letting go of the classic, which was the ultimate blackberry for those , butoved blackberrys ultimately, what they have is security software. otherwise, they risked becoming another android smartphone player. cory: what do they have if they get rid of the keyboard? >> exactly.
the key is going to be figuring out a way to license their security capabilities to other much-needede give security strengthening to the platform. that will be interesting. we will see if they do it, but clearly, that will be a way forward for them. cory: the turnaround is so slow at lack very our last interview with john chen is still relevant. we are really designing hardware. we do not make them anymore. that's a very crude way of saying it. then we take the software component in those phones and license it. gradually, we are really more into the ip business than into just making a device. cory: as we hear that notion of
being an ip company, is there -- security software that good? >> i think it is quite good. there's a reason all these government services held on and continued to use blackberry phones this long. that's a sign that it is important and valuable to a certain group of people and potentially even more if they can figure out a way to license it. blackberry was king, apple was king. analyst suggesting brexit concerns are serious enough that it will cause a pause in the market, notable enough to lower numbers. we saw that play through to apple suppliers as well, so it seems investors are taken this note seriously. >> the pound is down about 20% from this time a year ago, but analysislso seen
coming out of the supply chain suggesting they are trying to for what theywn are paying suppliers. clearly, that is affecting suppliers, but it is also a sense that volume is not so great, either. apple is feeling the heat. if apple is trying to squeeze into that space, it has to reduce costs cory: for the consumer. apple garnersory: so much of the industry that anyone else who wants to take do not go to the makers of the handsets. >> absolutely. that is a conundrum everyone is trying to tackle at the moment. a couple of players are coming , and they say they want to take some of the market .hare apple has right now
chinese regulators are pushing back against apple a little bit. some international property debates in china. one wonders what sort of role they are playing in helping some of their homegrown companies push back. that might seem to be the most likely source of competition. it does seem like apple is putting in a trough of sales and sales growth, from which it may very well him urge. >> the challenge you has is the smart phone market in general is slowing down, and that is impacting everybody -- the challenge you have is the smartphone market is slowing down. everyone is holding onto their phones longer. this is exactly what we saw in the pc market. the growth is stopping. the bottom line is when you extend the life cycle on a
device that people have been churning on a two-year basis, that changes the dynamics of everything, and the other act of the matter is there is nothing anymore.elling i want a foldable screen. i want something radically new before you will get me to change over. that is something all these guys face. >> there was some analysis scing out that the iphone has been cannibalizing sales of .he higher price iphones a lot of people are expecting an apple watch with direct cellular and that could force some parts of the market if you have the money, be a differentiator. >> i'm not really convinced on that front. the watch has been out there long enough and cellular or not,
it is just not as compelling a device as people tried to make it out initially. you see more and more people who had them for a long time abandoning them. cory: they sold more watches in the first 6, 9 months than they did in the first two years of the iphone. fare, but there are other signs to me that indicate that there are still challenges. you did not see them lower the price of the iphone in the first two years. my guess is the people who buy that are the ones who already have an apple watch. i do not see convincing new people, and that is the challenge. cory: thanks a lot. ipo's may be all dried up, but the asian ipo's are happening. we will explore the hot asian
cory: the pentagon is going all in on cleantech. the u.s. department is the of greenrgest buyer electricity, beating only google. my noble power has become cheap placesto compete in many in the u.s. navy lead theand armed services and commissioning clean energy projects. the u.s. ipo market cooled, asia is heating up. two major asian companies are making big ipo moves. foxconn, maker of iphones, has , and thego public maker of japan's most popular instant messaging service has
increased its ipo price. talk about what is happening in terms of demand for shares when we do not really see that happening in the u.s. >> the story here is that there are ipo's happening, and it's against a backdrop, as you mentioned, a drought of sorts, the volume of global ipo's plunged 52% by the middle of this year, so it only takes a couple of even minor sized asian ipo's to make that needle looked like it is moving. coming,foxconn and line and it's grabbing a lot of headlines. one other factor to consider is brexit. there was a rush of ipo's in europe, and now investors are trying to find some semblance of stability somewhere else in the world, and it just so happens
you have a couple of good, compelling stories and ipo's coming online. cory: what is it about these -- is itour companies that companies are desperate enough to get out or companies are so desperate for yield that they are willing to out raid each other to get these shares? >> you also have to remember there is not, like, a fitting frenzy going on -- a bidding frenzy. we are talking about going from $1 billion to $1.1 billion, so again, it is indicative of demand. i just do not think it is wild demand. as you mentioned, it is investors i think just hunting and pecking or some sort of sortt return -- for some of decent return back to buy probably what they consider a decent corporate story. in the case of foxconn, it is
probably linked to demand in the cloud sector. for a line, there is a different dynamic going on. it is one of the few messaging platforms that has proven it knows how to make money, and a think investors are also finding a lot of appeal in something like that -- i think investors are finding a lot of appeal in something like that. investors seeing the appeal in that? >> one indication seems to me there's a lot of retail investment interest in these ipo's, and that is probably what is supporting the floor in terms of pricing. , for example, will
price on july 4, and that's when we will get a sense of what kind of investors -- to what extent we are seeing institutional versus retail demand. cory: all these unicorn companies not going public. we will call it warm from japan. that does it for this edition of "bloomberg west." tomorrow whene in we talk about investing in china . that is all from san francisco. this is bloomberg. ♪
♪ >> from our studios in new york city, this is "charlie rose." >> the glorious ideals and ideas of the declaration of independence, which we celebrate, as we should, every , and as we know, our secular faith would have been nothing more than words on it not been for the people who did the hard slogging, against all suffering terribly. one of the r