tv Bloomberg Technology Bloomberg November 14, 2017 12:00am-1:00am EST
>> it is 1:00 p.m. here in hong kong. i'm getting less. -- i am david ingles. retail sales slowing but industrial output rising, 6.2%. it is below forecast. retail sales more important rising 10%. president trump and his philippine counterpart have called on the south china sea nations not to escalate tensions in the disputed waterways. they repeated their commitment to hold up freedom of navigation but the result. the chief house tax writer says he is confident that he is
enough republican votes to pass tax legislation. kevin brady says he doesn't need to exclude any major changes and president trump will speak about taxes and a full conference thursday morning. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries. markets.heck of the australia is just wrapping up its day. , i cant hour of trade tell you briefly, it is not very eventful right now. we have a penalty place later on in frankfurt. watch out for that. this is bloomberg. ♪ ♪
>> i am emily chang and this is "bloomberg technology." up broadcom ceo says the company remains committed to the acquisition of all,, despite the rejection of the history making $105 billion offer. we will look at what is next. uber has set the stage for one of the biggest private start of deals as softbank enters the picture. together.eal came things are heating up in the discussions between at&t and the government. with a deal had to court this month? first to our lead. qualcomm projects broadcom's offer taking off the largest tech takeover battle in history. the chairman of qualcomm's board saying, it statement is the unanimous believe that broadcom cyclically undervalues qualcomm. what are the next steps?
, ed hammond and ian. i want to speak to you, ian. what did he have to say echo just say? >> i have thought about this. i'm aware there might be issues and there might be pushed back. i have talked to their customers and investors. i can see a path to getting this done. emily: what are the details of the bid and what happens now? ed: what happens here is we knew that broadcom was going to get pushback. the fact that qualcomm rejected -- and it seems on price rather than scorched earth. that was seen as positive by the market. you have seen that and qualcomm shares. -- in qualcomm shares it what
happens next is going to be in broadcom's court. i think we see a continuation of that strategy. they are now going to launch a slate. they have to do that sometime by december. how much money can they put on the table for this? they are going to go above this initial $70 a share. some talk about whether they can go into the mid-80's per share but a lot of it depends on the feedback that they are going to get. emily: ian, if he wants to keep negotiations friendly, what happens now? ian: the assumption by the market is this is about price. we need to talk about how much more broadcom can offer. you look at what qualcomm's management is saying. there is a difference. hoch says the good time is over
-- hoch says the good time is over. we need to ban down the hatches. that is not what he does. emily: hock tan has gotten a lot of what he wants. could this be the one thing he cannot make happen echo edward: -- happen? has built the company up through acquisitions, most notably the deal with broadcom he was there. this is a different corner of magnitude even if he does get the shareholders at qualcomm on board, i think one of the real issues is going to be whether this past with the -- this passes with the regulators. this deal their time to put through with nxp in europe is being held up. if he does go over the line in terms of the two companies deciding to dance, whether it
gets to the regulatory hurdle is another story and one that will play out over the years. emily: how much is qualcomm worth this point -- at this point? ian: it depends on who you believe. if you believe qualcomm's management, what apple is going to get solved, it is going to take a little bit of time. we did that revenue back per year, 5g is around the corner. we are worth much more than this , especially if we are bringing nxp. emily: if it doesn't happen, how does it reshape the chip landscape? >> qualcomm has to prove itself. management, if they fight this off are on the hook. chipmaker, largest and have stick their reputational growth. -- they have staked their reputation on growth.
emily: ed, what are next steps? ed: they are going to go direct to the shareholders. qualcomm, one of the interesting s.ace they can increase with the offered for nxp to get it over the line. comes unattractive for broadcom to assume that brought density. the problem is if they do that, it is the shareholders that are going to turn around and say this is ridiculous. you overpay for something. -- you overpaid for something. i suspect you will see both parties do something that will affect the outcome of this deal. ed hammond and ian king, thank you both. alphabet continues to face more antitrust scrutiny, this time in missouri. the attorney general announces
that he opened the -- to benefit its own products. he is looking into whether google scraped information from competitors like yelp to use for its own search results. ben affleck comes two months after yelp sent a letter complaining about google's coming up, will speak to will hearst about his decision to launch a new print magazine. bloomberg technology is live streaming on twitter. this is bloomberg. ♪
emily: vanity fair has named its next editor-in-chief. she will succeed at the home of the politician. jones comes from the new york times. she is well known in the literary community but less and hollywood. she'll be the first female editor of vanity fair since tina brown's tenure in the 1980's. will hearst, the publishing magnate has unveiled a new onazine that focuses culture, politics and the big issues impacting california. traditional print publications have been facing headwinds. conde nast has announced it is closing teen vogue and limiting issues like glamour.
joining us is will hearst. thank you so much for joining us. will: great to be here. " you have launched a new using. why launch a magazine now in this environment? will: when you're starting a new business, particularly in the area of culture and the arts, you don't want to be in a super crowded field. announcing a new blog our new website would've been lost, whereas a publication has a certain permanence. we don't have to keep up with news. we reflect on things that are happening. maybe a little bit of vanity fair, maybe a little bit of new yorker. they come up a bit more often. where interested in the things that last for longer time, , politics, technology, trends, large-scale movements at we just thought print would be an easy way to do it.
nowadays a print allocation is most electronic anyways. -- the printing is the last step in the process. we are very ready to do anything that we are doing in a magazine online come almost simultaneously. emily: what do you think of the fate of the magazine business? people are getting laid off, magazines are being canceled? will: it depends on what you're doing. it want to do a mass, hot magazine, it is difficult. if you have a very focused audience in your delivering something of value to them, think of a magazine like the economist. i don't see that as a failing business. the new york times has had a surge in business because of politics. washington post, most publishers were thinking, jeff bezos has some secret technological idea. jeff bezos had an unusual idea,
run it like a newspaper. report the news, get it straight . underneath the nose of the washington post is washington and politics. the newspaper in the old days wanted to be the new york times. they were opening bureaus in singapore, trying to cover the world. under bezos, there covering what is under their nose. the l.a. paper should cover hollywood. san francisco should cover technology. if you are not covering what is under your nose and trying to be somebody else, you're entering a crowded field. emily: what do you think of pretty good jones -- what do you think of radhika jones? will: i am interested to see what happens there. they will continue to have very good writing and maybe a little more culture and less politics.
emily: you wonder what she will bring to the political -- will: she had great instinct about what is happening, all those criminal crisis and desk criminal cases and molding them into a very unique combination. great in himself fell like things are going to be changing it i don't know if i want to be a part of the change. emily: budgets are being cut. maybe the big, glossy pages will not survive. black cards will: for everybody, fancy restaurants, the hearse companies in the magazine business and we run a more businesslike operation. that is where conde nast will trend. emily: what will your advice to jones? will: i think arts and culture
are very enduring arches -- enduring interest areas. vein -- why doep people who work in silicon valley to live in san francisco back up it is not because of hewlett-packard, it is because of restaurants, arts, museums, hospitals, the whole texture of a city. that is a part of life and that is the part that our magazine is addressed to. emily: we have been talking a lot about digital platforms. what do you think is the responsibility? will: every the term -- i hate the term fake news. news is news. fake news is made up stuff. the terminology is wrong. i don't believe in the trump terminology. i believe there is opinion and commentary which is very much what modern news has become.
people sitting in a studio discussing things come as opposed to reporters going out. emily: some of it is actually inaccurate. will: some advertising is inaccurate. those things have to be right. if it is not accurate, it is not news. opinion can be wrong. opinion can be interesting. it is a completely different genre. if you let everybody's opinion be the same, then you are in the commentary business. news is the business we have to get everybody's name right. emily: what is the responsibility of facebook? will: you have to pick. has to pick.s you can say you are a news business. emily: they say they are a tech business. will: that is a dodge and a vocabulary.
they are better tech business than most media companies are. there are natural business boundaries but the thing i think has gotten facebook in trouble is there selling advertising. want to sell advertising, then you have a very different set of rules. fox is mostly commentary in false advertising. they have to account for where these ads come from. they are taking political ads. if you added transparency, and facebook can decide whether to be a news organization, but in the advertising, you have to pay by those rules -- play by those rules. emily: will hearst, and have you on. just great to have you on. coming up, things are heating up the at&t and the justice department over the time warner deal. we will take a look at what is opening up -- what is holding up the merger.
emily: at&t's fight with the just apartment over the deal is headed for thanksgiving showdown. according to people familiar, officials have told at&t to address the concerns about the merger before the november 23 holiday party. if not, the government could file suit to block the deal. bob spoke with bloomberg about politics, possibly extending in the mergers way. bob: with this administration, anything is possible. look, as you know from your own experience, people who populate these agencies are well intended, hard-working people. they see something. i don't buy the political angle, despite the comment that president trump made about this deal.
that was unusual. a lot of things about this president that are a bit unusual. i think there's an issue, but in their mind. whether or not that leads to a remedy, hard to tell. it is a vertical transaction and i cannot think of a vertical transaction that has been blocked. >> it has been a long time. the concern is they would use their position to give an advantage to other suppliers of programming. bob: that is hard to tell. i'm not involved. from the outside, i don't have any better view than anyone. you would think that basically a nolanam wouldn't pick on ryan in his prime. you would pick on somebody on a decline. there's a lot of talktalk. the ceo of at&t was pretty tough. we will see it usually vertical
deals are solved with just we will see. it usually vertical deals -- we will see. vertical deals are usually .olved >> a monster october for m&a, some better -- some record-breaking deals. if you're a ceo of a large company and the tax bill hasn't gotten the stamp of approval yet from the government and you're sitting there watching this deal layout and the politics around it, does that make you hold back? are you seeing things pick up? bob: things have picked up in the last four or so weeks. it is a pretty long period of time. things are very active. this was a very active year. it is under the -- hate to say it -- under $1 billion, they don't make the front page of the wall street journal. things are very active in the
financing markets. i don't know if you look at what news reports are in broadcom, no problem financing that thing. that is $100 billion. that is like a nation. the deal financing markets are great because banks to really make money. they hope to loan it. >> broadcom and qualcomm on the table which could be the biggest tech takeover ever, that looks like it has some time to play out. the tax reform tax-cut story is interesting. are you expecting that money to come home and be used beyond just dividends and buybacks? to be used in some big transformative deals? bob: the big part is there is nothing exotic in them. we can talk about the individual rates. things like border adjusted tax.
that was a big negative, because how do you value and auto-parts company or anybody that has been hit significantly? repatriation, we have been talking about it for years and i have been in a few board, people are starting to think it is real. i do think it will have some -- it will be some of all of the above. -- you arehat stuff, somebody who probably needed to put some equity in a deal. from a deals guy point of view. do people want to wait in till tax reform is then down -- is pinned down. is a concern that that market might not always be favorable so they better rush and get the deal done now. bob: the latter.
repatriation could have an effect on rates. as people turn out the treasuries and bring the money back, that will push rates up. who knows? eliminating the uncertainty is the big thing. after all these years talking about repatriation, we are not going to have tax reform but some things will happen. the repatriation seems to be one of them. that was at jones day global chair of m&a, bombproof you sick -- bob proof you sick. we will check out one of the largest private startup deals ever. softbank's multibillion-dollar deal investment in bloomberg next. if you like us, check us out on the radio. this is bloomberg. ♪
david: i'm david ingles and here's an update. let's get things rolling with data out of china. dialing back in october as factory production is falling slowly. leaves industrial production looking at growth, freshly below forecasts and down from 6.6% back in september. retail sales rising 10% and slightly below forecasts. saws had -- new home sales china falling last month. .ales value dropped 3.4% we're looking at 137 believe
dollars -- $137 billion. now britain's lead brexit negotiator is said to put the chances of a december deal at 50-50. david davis told bloomberg that it was the figure he would put on a breakthrough pick a spokesman said that is categorically -- breakthrough. a spokesman said that is categorically untrue. struggling commodity trader falling to the lowest level since may 1999. ubs has reported to have cut support for the company. has gone $3ee billion just this year. global news, 24 hours a day, powered by 2700 journalists and analysts in more than 120 countries.
i am one of them. to -- we have oil falling here. petroleum that is leaving losses in sydney but it is a broad-based selloff for aussie chairs. -- shares. chinese stocks are being led by consumer shares. that is helping a six-day rally but despite this drop, the reaction to this chinese data is fairly -- the biggest concern is the slowing credit growth. we are seeing chinese 10-year yields pick up. bond yields climbing for the first time since 2016. aussie bonds and we are seeing the aussie dollar popped up by better than forecast business confident. the kiwi currency market and japanese stocks, they are fluctuating ahead of tomorrow's gdp print. the nikkei adding .2%.
notice more movers include a group from msci. this is bloomberg. ♪ emily: this is "bloomberg technology." i am emily chang. uber has set the stage for one of the biggest private startup deals ever. it is approved softbank's offer to buy a stake. softbank will be allowed to invest up to $1 billion in uber and by up to $9 billion in shares. joining me now is never -- is eric newcomer. cory johnson is here with me. eric, what terms are done? what remains to be done? -- eric: -- caroline:
we have everything but the price . with the tellers are, we don't know that. we therefore know the total amounts that are up to be blocked. we had a slate of governance reform and we had softbank dragging year and a number of other potential buyers. the thing that we have been negotiating over the last many weeks is those governance reforms and also the process by which softbank would buy the shares. emily: talk to us about some of the governance reforms. there were contentions over chavis -- over travis callen's role. tell us about those. had wanted benchmark to put their fraud lawsuit against him on hold and then agreed to end it at the end of all of this. once the governance reforms goes through. benchmark had been unwilling to put it on hold and sort of
commitment publicly that there was going to be any sort of any other lawsuit. they came around and travis agreed to give the board the approval -- the budget -- the board has the majority of that he replaces his own board seats that he filled. that was the major compromise. emily: cory, what is your take? cory: think of this in terms of the ipo. could ben some ways the ipo for the long-term shareholders. this is going to allow a lot of shareholders to get get out of a billion dollars worth of stock. it also really clears up the corporate governance questions of who owns what and the company? and what classes of shares might be offered in an actual ipo? not only might softbank might be in their buying eight lean dollars worth of shares, by clearing up the government
by doing that, it sets the stage for these guys to be able to go into the market. is what we see happening is with valuation. something has agreed to buy a higher valuation for its first bunch of shares, then the subsequent shares. which is to say the existing shareholders can say they are paying what everyone else is
+++ down to a lower cost and require more shares. softbank is getting the best of both worlds. evaluation of uber doesn't officially decline but overall it will decline in this deal if existing shareholders sell to softbank for less than that top $70 billion market cap evaluation. >> we will all know it is less. the blended valuation will be lower and we are already seeing the positioning. we had an investor reach out to say, this can be too low. softbank put out a statement saying this is an done yet. the price positioning is really beginning. this isn't the last round price. how low it goes is going to be major point of contention. cory: this is why this matters, the reason it matters is because what matters here is once the valuations are officially set up. if they are wretched deals. valuation issues more shares automatically, a cascade of shares, to anyone who invests prefer the last round, they would have to do that. they can say evaluation hasn't gone down so we don't have to issue more shares. there is no wretched triggering,
no devaluation of earlier shares . they won't have to flood the market with new shares because they have not officially lowered are theation when they blended valuation. when we see the actual ipo, we will see it in the paperwork. " eric, a lot of unfinished business here, -- emily: eric, a lot of unfinished business here, what's softbank is on board, can they contribute to uber as a strategic partner? eric: they can stop investing in uber's competitors. i think uber would appreciate that. broker peacehelp in india southeast asia where it has investments. that is the hope. that is not an explicit part of this deal, but softbank has
invested and where. it is in everyone's interest to systemlobal alliance with of cash broncos down india and southeast asia and southeast asia companies can find a way to profitability. emily: cory, how do you think this will resolve? cory: if you were an early over investor -- emily: or an employee. there is a lot of employees who are waiting to sell the shares. cory: there are a lot of employees who have $1 million or more online -- on the line. this companies had so many disasters. this thing could totally skyrocket in private valuation and never make a dime. they are looking at that saying please, take me out of some of these chairs. softbank is coming to the rescue. emily: cory johnson and eric
newcomer. i'm sure there will be more news. eric, thank you so much. another ridesharing startup will launch inft toronto as well as ontario starting next month. it is pushing into a terry terry occupy -- into a territory occupied by over. -- by uber. manng up, we will talk to a who was one of the early believers in what is now china's biggest search engine. next. this is bloomberg. ♪
emily: a story that we continue to watch, facebook has asked the federal -- from political advertising disclosure rules, transparency they could've helped avoid crisis over russian ad spending. facebook has come out with a statement confirming it is committed to transparency in advertising saying, -- singaporean adventure capital firm has completed its largest fundraising to date. the firm raised $230 million in
october of which $190 million or consideredd -- singapore's biggest private fun. -- private fund. thanks for joining us. talk to us about your strategy, given your position in the southeast asian community. >> we are global fund. a very big pot and asia is growing like crazy and there are 600 million people in southeast asia it's everything that happened in china is expected to take place in southeast asia and india. emily: tech -- talk to us about deep tech. >> our global strategy is deep tech because it is easier to understand protection. emily: what do you mean you go >> anything that you can file -- it is not just a social network. don't have web for
zero -- 4.0. opened 0, 3 .0ve and 2.0 so the investment is there. you still have social networks and search engines. the whole broad-spectrum. in the u.s.,, cutting-edge. -- i'm interested in your -- what do you think about single> we don't like a drug company. we love the regenerative medicine space. mainly because nobody prays for an ipad. they prayed to save their life. people are much more willing to pay to save their life. anna: what you make of softbank coming into the tech industry
with $100 billion? how does that change the landscape? dr. tan: it is a game changer. emily: does it make it hard for firms like you? dr. tan: not really. committed and they put money to work. when we invest early, once they us. in, it is an exit for emily: how does it change the landscape? dr. tan: the whole world has changed. people are looking for return in the vast -- in the past could invest in fixed income and private equities. they have no choice. they put more money into equity. as a result in the likes of uber. there are 200 billion in unicorn today. this has never happened before.
emily: where do you think the biggest opportunities are in emerging markets? in the global markets, it is in tech. butter is on the underside and you turn it around serving is up for grabs. in the u.s., all the simple things have already been done. markets, young have bloating for every year -- you have low hanging fruit everywhere. emily: what is your take on the rise of cryptocurrency? what are the risks? is no question that the percentage of contribution from cryptocurrency in the future will be much higher than it is today. it doesn't mean that there is a particular cryptocurrency that will continue to go up. trends anen these increasing amount of capital, how is that changing your approach?
dr. tan: we are always need to sexiest, everyt, time it otherwise, we are dead because we are venture capitalists. megatrends rvr, ar, there's no question. in the emerging markets, we invest in a payment company which is tracked to create a paypal like environment in india. as long as you don't have payment, you don't have income. it is growing like wildfire everywhere. similar event like that in the u.s. emily: if there is one trend that is overhyped, what is it? tough one.at is a there are many places in which we don't invest. frankly, a lot of these spaces
it overhyped and then under hyped. it doesn't mean that it is overhyped, we avoided. -- we avoid it. we wait for it to burst and then we come in. emily: dr. finian tan, thank you for joining us. coming up, another venture capital firm feeling the pain of misconduct claims. a quick programming note, kevin brady of texas will join a bloomberg tv to talk about the latest on tax reform. you can catch that conversation at 1:00 p.m. eastern time. this is bloomberg. ♪
emily: alibaba's singles' day generated a record in sales, this is the e-commerce giant works with more traditional retailers. company -- with dumpster nicole kidman and pharrell williams. another sexual misconduct case rocking the vc world. he venture capital firm cofounded after claims of misconduct against him.
although he has denied these allegations, george and is known for backing elon musk companies. he says he is leaving the vc firm to focus on personal matters including taking legal action. , ellen hewitt. ellen: we know that the of jay hired an outfit law firm to him after they heard indirect allegations about his conduct. they didn't say if it was sexual his conduct. we do know that the process is ongoing. as of today he has resigned. he is on leave on the board of tesla. i think we really don't know what comes after that. history about -- his tweet about going after those who have defamed him come we don't know what allegations he is referring
to. emily: there's a female entrepreneur who mention something. dfj.d get a statement from whatever happened had to be quite significant given that this is a firm that has his name on it. >> we don't know whether he is want to stay on the board from the other companies that he is involved with. some synthetic meets companies. he is a very involved investor and i think it remains to be seen sort of how this is going to fallout for him. emily: he was speaking at a tech complexly and washington state. this did not come up at all. certainly interesting given the long list now.
ellen: it is interesting that his firm seems to either have -- it seems reporting got the firm to give a statement saying that there was an investigation and that he stepped down, but it didn't come out of the usual pattern which is a media report. -- we are seeing the effects but we really don't know what happened between him and other people that he might have worked with. emily: you have a story out up yethe first domino you have six women saying that he sexually harassed them. start a second out. ellen: it is six month after the story came out. there were multiple women that went on the record that said he grabbed them. he made unwanted sexual advances toward him -- toward them. it is been five months. he has been off the radar.
he was the first big name in tech to go down for this reason. yeah, he is going to colleges. he went to duke which is his alma mater gave a talk in front of students, undergraduate students warning them about the dangers of "bro culture" and workplaces. he wants to work on advancing women. this is what he is going to be spending his time on. this was received with a lot of mixed response from women and men who care about diversity in tech. they think this is not a topic he should be talking on. line, theirad a sympathizers are not buying it. a lot of questions. ellen huet, thank you for joining us. that does it for this edition of "bloomberg technology." we are live streaming on
>> deal or no deal. brexit secretary david davis says he will be a 50% chance of a breakthrough during default talks this year. supply surge. shale becomings. the biggest oil and gas boom in history. the u.s. chief tax house votes. ads homet trump hed from asia. welcome. this is "bloomberg daybreak: europe," our flagship morning show in london. i'm anna edwards.