tv Bloomberg West Bloomberg July 29, 2016 6:00pm-7:01pm EDT
in ddressed a rally colorado. mr. trump: i liked the republican convention better. i did. i liked it better. [cheers and applause] mr. trump: i thought we had a far more beautiful set, like not even a contest. how about the first night, they had no american flags up on the stage. mark: mrs. clinton and her running mate kick off a three-day bus tour in pennsylvania and ohio. mrs. clinton's september teans speech drew 28.million fewer than the 30 million that tuned in last week to see donald trump's speech. turkey is escalate its crackdown. the government has canceled
50,000 passports of the they have fired or suspended soldiers, bureaucrats and academics. powered by more than 2,600 nalysts. emily: this is "bloomberg west." coming up, amazon and facebook neck and neck with berkshire hath away. we'll bring you all the latest numbers. one more tech i.p.o. for the books. we sit down with a data tech company after shares topped at 45% out of the gate. and will russian hackers help donald trump get hold of hillary clinton's missing emails and
cyberhe comments mean for espionage. and amazon and facebook moving into the top five companies with the largest market cap. exxonmobil was at the top. apple, amazon and facebook reported strong quarterly earnings. we have chief analyst with us and our stock market reporter. oliver, i know you have been following these companies. when it comes to the stocks, which moves were the most interesting when it comes to the top four tech companies? >> it's tech. we are talking tech and that was an interesting development this week because this has not been a group that led the market throughout this entire year. getting a boost on the back of earnings was very important and interesting as we look to get
some indications as to where equity markets in the u.s. are going to go. and dividend payers, the value stocks that are going to do pretty well in the midst of petering along economy. when earnings come in and beat estimates by the biggest margin compared to the rest of the s&p 500, people got bullish and you saw the rally. the fact that the information technology group was beating s&p this week, it was leading the most in the earning season since 2008. you are seeing a pull-away there. and the bottom line, they like to see when tech leads. you are looking at a chart why this isn't happening and the bottom chart shows it leading. and there is a gap between valuations and one of the most popular groups which is the consumer staples, they are getting expensive trading 20 times earnings.
perhaps that's possibly why investors were ready to buy into some of those stocks. emily: bob, one of the things the companies have in common they are trying tomon advertise, with a.m.a zon and alphabet, they are looking to the cloud. and they are trying to experiment. apple services, who is doing the best job? >> so far you have to say apple is doing the best job. they have been doing it longer. tim cook has been talking services for the last -- emily: services is 20%. >> exactly. i would say from that perspective, they probably are. the question is longer term who can do more and that will be interesting to watch. amazon is doing incredibly with web services and retail services are doing. google and facebook. how much can they do on cloud
services and how about the other moon shots. they have discipline with the new c.f.o. but the bottom line is i think it remains to be seen, while apple is doing better now. emily: when it comes to the cloud in particular, not just amazon, but they are fighting for a piece of the cloud market. how much does a stronghold do they have on the market? >> microsoft is the biggest threat clearly to amazon. google much further behind. the trick is a lot of these guys are moving towards analytics and deep learning and the futuristic means of discovering information and if google can offer that capability as part of their cloud services, that's where they start to become unique.
microsoft is pushing hard on that. you will see effort from both google and microsoft against amazon but amazon has the benefit. mily: amazon trading at $758 a share. one analyst put a $1,000 a share. he thinks amazon could have a $3 trillion market cap and a better chance to pull ahead of the pack. what is the street saying? >> you brought up the projection, because not too long ago, there were similar types of expectations for apple and it shows you that is a company that has been volatile the past year. if you are a portfolio manager, you cannot afford to own apple in the past. when you look at amazon, what is interesting about the earnings, this is a company -- people aren't buying for the profits because it is a powerhouse in
terms of turning out earnings. if you look at what is happening with the valuations, it has come down but you are paying hundred times valuation. when you look at the p.e. level, there is no real e on that equation. and you have a quation there are a lot of questions. you see the feds staying doveish. so that might be redrawing of the economy. investors want to find growth. they are willing to pay a lot more for it. a company like amazon that is growing and saying we don't need to turn out a profit but put it back in our business. investors like that and how far it has come and disruptive and how fundamental to the company, higher valuations aren't out of line at all. emily: which company is the most vubble right now?
>> that's an interesting question. in some ways, perhaps apple is as well because so much of the business is still dependent upon the iphone. if we look at the core businesses, that's where the question becomes because we have the iphone 7 in the fall. a lot of expectations that it's not going to be dramatically different. if that's the case, we could have modest sales and could have continuing declines in 60% of their business. that's obviously a concern, i think. so that's why i would say there is some potential concern there. facebook and google, they have concerns with sat you areation, price drops on the ads, but there is a lot of growth there and they are experimenting with new forms of advertising and snap chat filters and all this kind of stuff, that will be interesting. emily: a big test for apple in september which we presume will
be the iphone 7. always glad to have you both. emily: facebook may have to pay up to $5 billion to the i.r.s. a potential tax liability in a filing on thursday. bloomberg news reporter explained how facebook got into this situation. >> in 2010, facebook decide todd move its global operations to ireland. so that's everything that doesn't include the u.s. and canada and when they valued the transfer, they asked e.y. to fix the price. the i.r.s. said the valuation was too low and off by a few billion dollars and this is what we think the valuation is and billion.illion to $5 >> what are the next steps.
it hasn't shown yet. what's the company's next move? >> they said they will challenge the notice. they will go to federal tax court and say, we have our experts and told us this is our valuation and the i.r.s. will come up with their own experts and say, this is the price tag that we believe you should be paying on and probably they'll end upset willing between $3 billion and $5 billion but depends what the i.r.s. comes back with and play on an issue that is on much broader theme. emily: that was bloomberg's reporter. h.p.e. that private equity firms are contemplating a buyout. apollo global manage nt and carlisle group are sticking
around. they had talks with representatives of the firm and the deal could be worth over $40 billion. still to come one of the rare tech i.p.o.'s the french big data company. and we take you to the heart of the mojave deserts where they play with fire. he c.e.o. of virgin galactic gives us a tour. ♪
but besides the uncertain market environment there has been a spike in activity. our i.p.o. reporter sat down makes c.e.o. and what this company apart. >> what we find is a small number of very large legacy incumbent players and those players haven't done a great job of tracking the changes because the market is moving strongly to the big data technologies into the cloud and the players have a business model that doesn't work well there. that business for us is going 100% a year. that is pouring our top line. >> those legacy players who don't have the capability to do what you do, what is keeping you from snatching them after you have a value placed on your company? >> the beautiful thing for us right now is a couple of them
have been taken private themselves and they are in very, very tight financial constraints much more so when they were public companies. we will have a nice long. >> speaking of ack which situations, you did say that acquisitions were something on your mind as well. are there certain parts making more rights to acquire rather than grow? >> there are two categories. adjacent markets are close to what we do. and the second one is deepening our solutions in areas we already solved. accelerating to solve a bigger part of that. that is broadening and deep yeening the two main categories. >> you were at rapid 7 which went public recently last year. you have been at the helm of two private pre-i.p.o. companies.
what are you seeing in the funding marks and what would your advice be to other executives who are considering the public market? >> what we found is the late-stage private funding market has changed dramatically in the last 12 months. 12 months ago, it was a full risk-on, very aggressive late-stage market and as a result, the markets that did late-stage rounds are finding that the valuations they got in the private markets aren't sustainable and aren't that investors are willing to do. i would suggest that the companies need to think hard about do they want to become a public company in which case they may want to do it sooner rather than a late-stage rounds which would make it harder for them to become public. >> that pressure on private valuations that we are seeing because there has been a slowdown in private funding, did that play into your decision to go now? it has been a choppy year in
ght being shed on the tech startup scene and might be the top tech hub now that they are leaving the e.u., cheaper living arraignments and unhibted access to the e.u. and uninhibitted that they have going on here. they have 2,500 startups. .-- 2.4 billion euros but one of the complaints and perhaps what stopped berlin growing at such a pace is the lack of access compared to london but could be one on the horizon to put money back into the system. with a bloomberg scoop earlier this week, the music streaming company could be up for sale. the investors looking at a price tag of $1 billion.
they have beenmon advertising this business and the revenue isn't that consistent. and hey have this for $175 see one of the key investors including twitter and union square will be cashing in. there are plenty of op timism coming from others and there is an online bank launching new products and getting itself a banking license in europe. and i spoke about the growth in the company and the growth in berlin. >> we aren't working with banks. we see the opportunity in the market. a lot of customers don't feel connected to the products that banks are offering. so they are far away from great mobile experiences. want to bank on
this with a simple click and taking the opportunity. today we have 220,000 customers. a we are growing kind of at fast pace and there is a lot of opportunity. >> united kingdom makes you think post-brexit. there a more difficult decision to be made now? >> i think we are much more used to answer. if the u.k. decides to leave nformally on top of the i. pfment, then we have two years of periods and in two years from now, we will know if the u.k. market is going to be interesting for us and if we need to get a new banking license, we could get it. still an interesting market and
take a decision. >> was there a decision when you decided let's take on the banks rather than partner with them. did any banks approach you to bring in your technology in-house? >> we partner with banks and building a platform where we try to leverage the best products, we also talking to traditional banks and maybe they have a superior product in the credit space and have mortgage rates and experienced staff that looks at the house or whatever. mostly today we are partnering with startups and talking to more traditional players but sometimes it's very difficult if you are talking to a company that has maybe 100,000 employees. it's very -- it's just the difference between the pace of
startups and the very big corporates. and for those, we are looking in partnering. >> investors are interested and peter thiel is interested in backing your company. > all the investors, we have ermany early birds and peter thiel and then we have a couple of others. the important thing is there is a long-term vision. all of our investors agree with us that retail banking is one of the last areas that hasn't been disrupted by online and by mobile. and i think that's what they see. and all of them have a long-term vision and they expect us to take at least 10 years, but they have the financial power to bring us through that and really
work on bringing mobile banking to consumers. >> how important do you think you are based in berlin. many would have thought munich or london. >> we have tried not to be -- i think it is positive that we aren't the center of finance. as we are contracting our products and if you look at our products, we always try to build it from a perspective not coming from the inside of a traditional bank or traditional player. rlin has created a sense and best people in europe and happy to be in berlin where we can actually accelerate the city and get the best minds to work with us. i think berlin is now more attractive for any company oving to europe.
>> tim cook is hosting a fundraiser for hillary clinton. if you want to go, it's going to cost you. tickets will run between $2,700 nd $50,000 while apple lobbieses, this isn't the first. cook hosted a fundraiser for paul ryan. he will be accompanied by lisa jackson who heads up the environmental policy. how is the russian hacking ommunity of donald trump's calls to hack hillary clinton's emails? this is bloomberg. ♪ [hip hop beat]
♪olympics 2016, let me get you on my level. ♪ so you never miss a moment, ♪ ♪miss a minute, miss a medal. ♪ ♪ why settle when you can have it all? ♪ ♪soccer to wrestling. track and field to basketball. ♪ fencing to cycling. diving to balance beam. ♪ ♪all you have to sa♪ ♪ is, "show me," and boom it's on the screen♪ ♪ from the bottom of the mat, ♪
♪ to the couch where you at? ♪ ♪ show me the latest medal count♪ ♪xfinity's where it's at. ♪ welcome to it all. comcast nbcuniversal is proud to bring you coverage of the rio olympic games. your first word news. after hillary clinton accepted the democratic presidential nomination she and tim kaine are on the campaign trail.
they spoke at a convention rally in philadelphia before beginning a bus trip through the battleground state. mrs. clinton picked up where she left off thursday night, going after donald trump. >> i find it highly amusing he talks about make america great again. he doesn't make a thing in america except bankruptcies. --k: the campaign campaigning in colorado springs, donald trump says he is taking the gloves off. court hasappeals ruled a voter id law in north carolina was enacted with discriminatory intent and must be blocked. it required photo identification to cast in person ballots. it reverses the lower court's
ruling. six more state in ploys in charges in the plant water crisis including misconduct and office, willful neglect of duty and various conspiracy counts. state regulators were charged with official misconduct and other offenses. 4 have been suspended without pay. save the children says a maternity hospital it supports in syria has been bombed. a hospital -- the hospital opened in 2014. mosquitoescials say have begun spreading the zika virus on the u.s. mainland. four people in the miami area are believed to have contracted the virusce -- locally. >> over the coming weeks and months we will see isolated cases of mosquito borne zika.
of 19,000 mosquitoes tested none were found to be carrying the virus. a minnesota judge overseeing pence's estate has ordered genetic testing people claiming to be his heirs and tossed out claims made by 30 others. dayal news 24 hours a powered by 2600 journalists and analysts in 120 countries. another hack attack on the democrats is being investigated by the fbi.
a person says a preliminary probe has begun into whether hillary clinton campaign was hacked. the security war world is comments from donald trump that russia should find 30,000 e-mails missing. some have dismissed the comments as a joke. donald trump says he was being sarcastic. many say it is an unprecedented move to see a politician asking for help from a foreign government of hackers. >> joining me now, a longtime counter intelligence and ,errorism operative for the fbi what do you imagine is happening in the russian hacker community over the last few days since
these comments? we need to change the way we are describing it. what i would like to say is the russian spy community. this is espionage. going after a political campaign, the dnc, hillary's server or her campaign, it is espionage. there are secrets a service would like to know. getting newe headlines about this new investigation into this additional hack on the dnc. the clinton campaign saying hackers did access at least one program. what are the implications of this? guest: the implications are high. one thing, this was foreseeable. campaigns have always been hacked, especially during a presidential cycle. campaigns were
warned this could happen. they should know about it. it was certainly the vegetable. i would like to look at this espionage. ,ussia and china and iran everyone is trying this by on us, to learn what policy the next president could want. what i like to say is what we need to be thinking about is how to prevent this from happening. what we can do to keep these things from happening in the future, to stop these in the first place. emily: the clinton campaign get intog hackers did the system. , these saying that comments by trump would not be seen as a call to action by the russian hacker community? guest: what i think is that
russian hacking community, or sponsoredn -- state active spies are already hacking. they are already trying to go after the dnc. i think it was a bad idea. i do like someone in a position of power like that to call for espionage against an american person. but we need to start thinking about is changing how we look at this. this was preventable. there are steps we can take. to give you an example, we are advocating a zero trust approach , a way the dnc and others could protect themselves. it is believed russian hackers used a phishing attack. an e-mail that someone trusted and believed it was a good e-mail. they clicked on a link that
loaded malware. i think that is important. it boggles my mind that if you were warned this could happen you would not implement the best cyber security you could have. we have seen this quite a bit. the state department was attacked. the irs was attacked. other see the dnc and campaigns could be attacked. emily: can you give us details on the tactics used by russia versus the united states? guest: certainly. russia is one of the top spy agencies. we certainly do it, everybody spies. it is part of their culture. i could see they are behind it. we don't have proof. let's say for the sake of argument russia attacked.
this is a good espionage attack. we can't prove they did it. they have deniability. they have stolen information that is causing pressure on the future president of the united states. we don't know what they have, we don't know what they have given wikileaks. what action should the u.s. government take? guest: the u.s. government is taking action in certain circumstances. we are protecting some of the major federal agencies. once again, using zero trust approach. encourage better cyber security. not only for the rest of the government but for companies around the united states.
moment, that is like having a doorman in front of your house who let's only those people in that you have on the list, no matter how good they look, how persuasive they are. if they are not on the list they do not get in. only the programs you say are good are allowed to run. it's one of the best ways to protect against these targeted attacks. all right we will follow this developing story. thank you. while we're on this topic, a milestone moment in tech. it has been 10 years since julian assange founded wikileaks. discussing it is
controversial mission to open governments has never been more divisive. criticizedden wikileaks for releasing information it receives in raw form. he tweeted it has never been more vital and wikileaks has ir hostility to cure ration is a mistake. guest: our conversation with marissa mayer after her deal with verizon. onspeak with sheryl sandberg the company's blockbuster quarter. still ahead. -- a walkthe desert in the desert. this is bloomberg. ♪
emily: many of america's top rocketeer's work in the middle of the mojave desert. ashley travels to the landscape to speak with richard branson and discover how close virgin galactic has come to commercializing space travel for tourists. >> they are testing rockets and then there is testing rockets. you need to test a lot. the focus -- >> many of america's top here inrs work mohave. this is where the big kids play with fire.
to offer tourists a chance at space. george was a nasa veteran and serves as the ceo of virgin galactic. a test area. >> nature does not like what we're trying to do. taking something that nature doesn't want and building it -- bending into an outcome. >> the spaceship will fire up its own thrusters and head for the heavens. it is a complex system and there are few places on earth where you can work out the kinks. >> if the only place you can design, manufacture and test a rocket motor and then fly into
space. frontier ofhe american aerospace. >> virgin things people visiting space will have a profound effect on how we see the planet. >> it's more than the number of people who live ever been to space in 50 years. able go back to communities all over the world and bring that perspective with them. i think that will have an important effect. >> it has been a story of promise and devastating setbacks. their first is spaceship crashed to the ground killing their copilot. restore confidence.
this has taken more than 10 years. how typical -- how difficult has this been? >> it is rocket science. we are reinventing the wheel completely. it has been tough. we now have rockets that will take us to space. we fill confident we are close to being there. >> he decorated the spaceship with his mother's likeness. he used the unveiling as an excuse to throw a birthday party for his granddaughter. >> after the accident, how close were you? >> i don't think i have ever given up on anything in life.
the important thing is not to hurry a program like this. tickets.return you can get the full episode at bloomberg.com. to tie up this space talk, in 19 the eight nasa was created on this day. -- in 1958 nasa was created on this day. nasa has sponsored human and mechanical expeditions and launched numerous earth orbiting satellites that health is navigation tom weather patterns. and three stocks on a bad run, europe's satellite companies in the red since may.
the problem is easier to make and send satellite into space. that has led to price competition. they believe ringing broadband to africa and four k tv services will rekindle demand. few shows are broadcast and four are looking to fiber and broadband to carry tv signals. is ticketing starbuck bucking the trend. -- one ticketing startup is bucking the trend. that is next. ♪
the case will go forward with the trial scheduled in october. he has been trying to reassert control over hi $40 billion empire by rearranging the family trust that will control the company. the fight over his holding has over overshadowed many things. as thousands prepare to descend helping togle is share the experience without having to leave home. it has launched its street view in the famous football us -- avellas. residents were hired to shoulder a backpack and a camera. david has more. showing meant to be
what they are really like to brazilians and outsiders. there is a lot of hype and rumor about what it looks like. there is a lot of curiosity. this is a white for people to see -- this is a way for people to see. charlie: sticking -- emily: major league soccer just had its first lead partner bucking the trend in the sports industry. joining from new york, thank you for joining us, what made you think this is the best strategy? >> we are thrilled to be partnering with major league soccer at an amazing time.
major league soccer is blowing up. the fastest-growing sports league in north america. mobile and other trends in technology disrupt major industries. that hasn't happened yet in ticketing because it is a slow moving industry dominated by legacy monopolists. we share a vision about how that is going to happen. opening the platform allowing great apps by allowing fans to buy -- buy tickets wherever they have broaderll access to the tickets they want and teams to sell more tickets. work for theis nfl? are you expanding? >> this can work anywhere. we believe it is the best option
anywhere. we are focused on major league soccer. it,g forward, think about openness is the future. i think you will see open ticketing for all sports, music across the board. emily: there has been talk about hamilton where scalpers have made millions. you had the musical companies themselves trying to counteract that. it is incredibly difficult. >> hamilton has been interesting. because the existing systems are closed, there is no good way for the seller to know who is buying the tickets. if the seller is look at a social media profile, they can make sure tickets are getting into the hands of real fans and not brokers. emily: tell me about your relationships with uber and
airbnb, and the partnership that allows customers to buy tickets. >> we just launched yesterday. it, any e-commerce channel can integrate with the platform and work with teams to sell more tickets. if you are looking at snapchat and see fans snapping about a game, if you bought a hotel and you want to see a game nearby, you can do that easily within the experience. we're bringing ticketing entertainment to people where they are shopping. emily: and you have some big-name investors. eli and peyton manning. intech am a political gifs. arepresidential candidates surging in popularity.
has generated half a billion views with numbers like these that can only be gifs will play a huge role in the election. that does it for this edition of bloomberg west. that is all today from san francisco. happy friday. had a wonderful weekend. this is bloomberg. ♪ -- have a wonderful weekend. this is bloomberg. ♪
>> from our studios in new york, this is "charlie rose." charlie: we are in philadelphia for the fourth and final day of the democratic national convention. it is the night hillary clinton accepted the nomination for president of the united states. we are taking this program before chelsea clinton introduces her mother in what will be for her mother the most significant speech of her life. >> there is something else my mother taught me. public service is about s