tv Bloomberg Technology Bloomberg October 20, 2017 11:00pm-12:00am EDT
alisa: i am alisa parenti from washington. you are watching "bloomberg technology." president trump says the united nations has tremendous potential that has not been used over the years as much as it should be. the president spoke during a meeting at the white house with the u.n. secretary general today. mr. trump also praised his leadership in the organization. damage estimates from california wildfires are rising. officials said today 7700 buildings have been destroyed by the blaze. the number has gone up as they assess damage from the series of fires that broke out earlier this month. the fires have killed 42 people and caused more than $1 billion worth of damage.
yes house speaker paul ryan says the republican tax overall plan includes a fourth bracket for the wealthy. it has not been decided whether the top bracket will remain at the 39.6% rate. he says it will be finalized in a number of days. it has been one month since hurricane maria devastated puerto rico. only about 20% of people on the island have power. the governor is pledging to get that to 95% by the end of the year. the hurricane struck at a bad time. electric power authority their file for bankruptcy. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i am alisa parenti and this is bloomberg. emily: i am emily chang and this
is "bloomberg technology." coming up, s&p 500 on a six-week winning streak. tech helping to ignite the boom. is it sustainable? we will identify potential eadwinds on the horizon. tech ipo's are back on the menu southeast asia's most valuable startup leading the charge in ew york. tech earnings on tap with major players lining up reports for next week. we will preview the biggest companies. u.s. stocks closed out friday's session at record highs, new record highs, the fourth straight positively for the nasdaq. what can slow down the gains? michael regan and david kirkpatrick joining us from new york. michael, does the tech rally have room to run?
>> i think if you look at the forecast growth rates for your main tech companies, they are so strong that the valuations almost seem reasonable in most cases. i like to look at the peg ratio which compares the p/e ratio to the long-term forecast earnings growth. if you look at anyone from facebook to apple, google, they all look reasonable. amazon is kind of an outlier. i don't think you can find a valuation metric for amazon that looks cheap. the high valuations are not necessarily scary when you look at the forecast growth rates. the one risk people are talking a lot about now is regulatory risk, especially with the hearings coming up on capitol hill about russia's involvement with facebook and google and twitter during the election. i don't see it being a big risk to their business. but i do think it will be something interesting a lot of people will be curious to see how it pans out.
emily: on that note, david, as they get ready to appear before congress, that has not seemed to impact the business at all. yet they are answering serious questions about russian meddling on their platforms, the advertising model, as well as fake news. david: i have been surprised here has not been any response from wall street on the regulatory scrutiny directed at facebook and some of the other companies. i will say i think the russian thing is just the tip of an iceberg. the real issue has to do with the nature of targeting on facebook and whether or not it is a media company or not, given it is funded by advertising and will allow any ads to run that somebody wants to pay for. if that were to change, it could affect facebook's revenue. hat could affect profits and
valuation over time. the question is the scale of hese things. they are hard to analyze from ere. i think there will be economic impact of the regulatory onslaught. it is not just scrutiny. it is a building onslaught facing facebook and google. emily: that will be in the spotlight november 1. do you think we will see reaction in the stock as we get closer? >> i think it all depends on what comes out of the hearings. it is the lawyers for the companies appearing. the c.e.o.'s are not on the hot seat. i would be curious to see if congress says we do want the c.e.o.'s here, to hear their side of things. a lot depends on how these lawyers perform, if they give ongress the information they need. if there are surprises that come from the hearings. i think russia is just one of several regulatory risks you have to look at when it comes to big cap technology. president trump has made it no
secret he is not a big fan of jeff bezos and amazon and feels they are not paying the taxes they should. some lawmakers have brought up the idea of antitrust when it comes to amazon. you read what the antitrust experts say and it does not sound that there is a strong case for that because they are not dominating any single business within retail. they are not dominating the cloud. we do have a president who has made it no secret he is not a fan of the company. if i were to pluck out one major regulatory risk for any of these stocks, i would look at amazon especially because it has been sort of ignoring valuation metrics. investors don't care with the p/e is. they don't care what the price to sales is. they are in it for the long haul. there watching amazon gross sales and market share. it is an interesting time to come up against that sort of risk. emily: amazon, that has been the story of the company the last several years and it comes to investors. the amazon/whole foods deal did not get scrutiny at all. david, mark zuckerberg and sheryl sandberg will not be
testifying before congress because that is also the day facebook is holding its earnings call on november 1. we also have google earnings coming up. do you expect to see any impact on the actual business when we look at the numbers for this quarter? david: i don't expect to see any impact on the numbers for this quarter to speak of. as i said before, i think we will see economic impact on these companies, particularly facebook, long-term. i think it is a mistake for zuckerberg not to be appearing before the senate intelligence committee. i think to send the lawyers is diminishing the significance of the investigation. i would almost take a bet that within six months, zuckerberg will be testifying in front of congress in some fashion. probably larry page as well. that is the way things are headed. emily: next week, what are you looking for when it comes to the stocks? >> when i look at big cap tech, far and away the leader of the stock market this year, the s&p technology index is up 37%. facebook is up 32%. there are some jitters around the stocks. we have seen big pullbacks in tech stocks this year only to see them recover quickly. the market is on edge for whether the theme of reflation, higher inflation, higher interest rates will take hold. that could cause a little rotation in the stock market. i am not sure it would cause a big drop in tech stocks. but it might cost them that leadership position in the
market. investors seem to be on edge trying to decide whether it is a good time to rotate into the more value stocks, financials, energy companies, out of ech. that has been a back-and-forth drama we have seen all year. i suspect it will continue. emily: mike regan, i know you will keep us apprised next week. david kirkpatrick, c.e.o. of techonomy, you are sticking with me. u.s. stocks were not the only thing setting a record on friday. bitcoin also closed at a record high. at one point, crossing $6,000. the digital currency has gained more than 500% as investors continue to shrug off the potential for increased regulation. coming up, are tech stocks overvalued? we will post the question to the light street capital founder. "bloomberg technology" is live streaming on twitter. check us out. this is bloomberg. emily: a stock we are watching, paypal rose to a record after beating estimates for earnings and giving a strong forecast for the end of the year. the digital payment company has been campaigning to expand the service beyond websites and is getting a boost as more retail sales look to compete with amazon. users can now send and receive money via facebook's messenger app. tiger cubs are some of the hottest hedge fund managers around and have become influential tech investors. light street capital is probably he hottest of all.
technology. alphabet sides with lyft and a showdown with uber. the value ly -- they value lyft at $11 million. they are in a better lawsuit. joining me to discuss this is tom and david, our guest hosts for the hour. what is your take that google is backing lyft after all these years knowing they have a big stake in uber? >> you can look at it as if they are hedging their risks. the ridesharing businesses are growing like crazy and they want to have a hand in both. obviously, they are not making a bigger bet on lyft than on uber. they had a lot of conflicts. there is a little bit of emotional subtext here. i think both companies will be
>> and what about the it. tigation and have seen is there anything. and money for the. > new technology and self five technology there are business risks. you look back to google and everybody bay and growing into its teenaged years there are people that weren't appropriate. and there were a verticals and dustries and didn't want advertising, so they filtered and protected the buyers and sellers from that kind of behavior. when we look at this from the
following. any tech companies that you are losing ut out? >> the great thing about the hedge fund there is creative destruction and not always market share but market opportunity. one example i would give, look at the rental car city and we ve talked to travelers about their ability to spend and they will use an ube are or lift of and they would go that way and this is a real opportunity to take market
and this after another debut earlier? week which rows 30% in its first day of trading. looking at this particular company, this is a company that licensed. what is your take? republicryompany can indicate in other parties fer rts of asia sha and it's a good bet. invented the mod will where you buy for free. and that is what they do. and they have other businesses and i think it's a very fast-
owing areeb after and onloin entitlement. you could not have a betteral eye. >> and a fairly quiet summer, should we read anything in to this? there is ambivolence of c.e.o. and not having wall treet breathing down their next. and i think you will see a lot f companies that have dragging their feet and end up going on public. the think that might shift psychology.
a look at the ve numbers. startuped it the eancht and no drma. i spoke with the c. efrlt o. numbers. revenues >> and making sure we are going o be in control and we warrant too serve it and right for our financial situation but being that said and probably other investments. a billion almost dollars and which there are machine. what are the prospects?
women and women. >> interestingly, uber, it was got aly investor and they lot of knows and difficult story to tell. do you think it is long-term, give wren what we are seeing? >> the reason i'm seeing it is long-term and aplonchinge the ought mation. he intersection of a. it and human work. and you have to have human touch. and patriotic the right cisions and there are is a country. billion
and johnson. on friday, sanders was asked about the president's call. >> and the expired fer spirit of which those were misunderstood and as the president has said, who i think has a deep understanding of what that individual would be go through, his comments were sympathetic, very respectful and that is the spirit. said this are ay
ong way and the european summit. >> and nime optimism hit ties about the future partnership because it is not om in the prettyish people pu the people of the people. >> they be depun what their discussions on tried so they could be made pf the next pormal sum pit. we are n said the talks far from reaching the commitments pf which can start talks. demrobble news, 24 hours a someday pured by journal iferts
>> and you are saying all options are on the table. >> i think what you are seeing they s bug companies, gm, want to pick a winner and it has come down to ube you are rer and lyft. bru the fortunes have changed. uber has could depon through the and big legal about the will and en uber and alphabet an't stay behind uber and lyft cooperateing in various ways down the road.
>> they have a problem. we have been writing about this. and not in their interest. knee want to be a marget place of ideas and want to be to have accounts that send out alerts. but it is historically it hack n their interest to get growth and so they have been late to the game. none of these groups want to be highly regular lated. i i do think we are going to see more regulation. affect ly is going to
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is great and we have been working with the arrangement with target for sometime and they got a meeting of the mibeds and e consumer landscape we think it is the third pillar when target nd asked us so grow our business and we got it around. is the goal to become independent? >> we think we have a large and ery bright future ahead of us. we are a young company and we think we have a lot of work to build our brand. >> and peg of the consumer