tv Bloomberg Best Bloomberg April 24, 2016 5:00pm-6:01pm EDT
erik: coming up on "bloomberg best," the stories that shaped the week in business around the world. a meeting in doha disappoints, brazil's political crisis turns more contentious and investors mull from the ecb. >> the ecb has now done enough. erik: intel's cutbacks and alphabet's outlook. we cover the week in tech from a to z. >> for the most part, they are only appealing to people who speak english and can have profit growth. imagine that. >> no, they are growing. erik: and we cue up the week's best interviews.
business leaders and policymakers held nothing back. >> i don't want to talk about brexit. i do not want brexit. erik: plus, we don't miss a beat as earnings season rolls on. it is all straight ahead on "bloomberg best." erik: hello, and welcome. i'm erik schatzker. this is "bloomberg best," a weekly review of the most important business news, analysis, and interviews from bloomberg television around the world. last week ended with high hopes that a meeting of petroleum producers in doha, qatar would result in a deal to freeze output and bring stability to the market for crude. but talks fell apart and this week began on a familiar note, uncertainty for oil. >> the much touted meeting of top oil producers.
ended without agreement, no deal. we are seeing crude and brent tumbling this morning. what comes next? >> we are moving towards a balanced market. demand is still relatively strong. the markets are on a natural rebound. as we get towards the end of the year, we will be in a much more balanced market, regardless of what opec does. >> is something major happens, the next get-together of oil ministers will be at the next opec meeting on june 2. in the meantime, iran will try to boost output to claw back the lost market share. it is aiming for 4 million barrels a day. the saudis, the russians will continue to produce record levels. the financial consequences will continue. ever since the oil summit began in november 2014, they have flitted away $4 billion worth of financial reserves.
infancialllion of -- financial reserves. that has been more people for some than others. >> what happened in doha was a fixation, saudi arabia with iran and iran with saudi arabia. are we ever going to have an agreement between the two countries? who is going to give in first? >> cartels, as you know, require a degree of trust. there are many things between saudi arabia and iran, but trust would not figure on the list. the saudis are worried about market share more than anything else. they are worried if they pull out, the iranians or any number of others will fill that space. i think it is going to be extraordinarily difficult, particularly where there is depressed demand and low levels of economic growth. no, i don't see opec coming together for anything like its historic role. betty: the crushing defeat for brazil's president dilma rousseff. they voted in favor of her impeachment, a decision that
could bring down the curtain on 13 years of leftist rule. but she is defiant. calling the vote a coup. john, tell us what is next. >> the main avenue for her is to challenge, to fight the impeachment motion in the senate. what we are hearing is right now to doesn't have the numbers to win there. the other avenue she can take is to go back to supreme court. and of course there is a third option as well that no doubt she will be considering. that is holding earlier elections. >> if and when she is impeached, the big job remains, tackling the fiscal and economic issues. who is best placed to do that? >> certainly the man in line to do that according to the constitution is the vice president, michel temer. he is seen as being a more business-friendly president. he is seen as being someone who
will try to tackle the gaping fiscal problems that the country has. but also important to bear in mind, he will have a relatively limited mandate. he inherits a country split down the middle. it will be quite difficult to push through for meaningful reforms that investors are looking for in brazil. matt: goldman sachs just out with numbers. talking about the worst performer in the dow this year. down about 1% in the premarket after reporting a 60% drop in first-quarter profit. revenue fell to the lowest since the ceo took the top post in 2006. >> the fact that process was down 60% and we look at those revenue trading numbers and go, wow, ugly. >> you start with the trading. you had lower legal expenses, you had a couple one off here, but overall it was a cost story on the beat.
on the fixed trading, they were down almost 50%. you saw some of their peers down in the teens percentagewise. so this is significant underperformance in that area. and analysts have kind of expected that. the business that goldman is exposed to and they kind of predicted it would be an ugly quarter, and it came in as an ugly quarter. betty: the european union took another shot at a u.s. tech giant, this time it is google, over the company's android software. the argument is that their strength restrict them with tablets and phones that expand google's command in internet search. what is google saying in response to this? >> google is saying that it has an open-source system with android. there's a lot of choice for manufacturers and what they do. european commission says that while that is true, in practice, most manufacturers are required
to take google search and google browser and that brings users into the google ecosystem which is important as a source of search advertising. in practice, there is not much choice and that means rival app makers, rival web browsers are really not allowed to get onto the android phones that most europeans use. >> at the urging regulators to break up the company? >> they would ask the commission to break up, they would ask for a breakup of the commission did not do anything. they are really trying to get the regulators into action. i think we have seen action in the last year and a half. we are seeing a very active european commission looking at google that could order google to change things. they can order and have ordered microsoft and intel to pay huge amounts of fines. this is not something you can ignore very easily. it can have a real effect on their business.
>> the ecb staying the course, leaving its rates at record lows. bond buying program unchanged. is it time, that mario draghi said, do we give it time to bear fruit? >> i think it will bear some fruit. but when you look at the impact of the policy measures that the ecb has put into place over the past year or so, and think about where we are in terms of growth and inflation now, i think you would have to be quite confident suggesting that the ecb has done enough. i think mr. draghi acknowledged that today. >> some central bankers this week saying that we have reached the limits of the effectiveness of central bank monetary policy. do you concur, or is there more to be done, and can more be effective? >> i certainly concur that the marginal efficacy of each additional dose of monetary
easing is declining. i would disagree, i think, on that we have reached the end. in the press conference, mario draghi brushed off those questions about purchasing equity or helicopter money. what he did indicate was that they are willing to purchase more assets and keep on doing that, and that is where i think if more stimulus is needed, that is for it will come from. >> tech stocks take a tumble. microsoft and alphabet deep in the red in the premarket, missing earnings forecasts. look at the tech earnings we have had so far. it is a story across the board about valuations and investors getting a little too excited last year about the prospect of some of these companies. >> you can make that argument from one hand. i think it is probably too early to tell. my firm studies prices and microsoft and google are in the
area of what they were forecasting. david: microsoft, they came out with their earnings yesterday. they are still growing. but that is all associated with the cloud at this point? >> the cfo is sandbagging a guidance -- lowering guidance of the can beat that. he saw that in their pc business which did good in the quarter. doing a lot better than expectations, but that is because guidance was set so low. francine: he does seem to be turning this growth. >> profit growth. imagine that? [laughter] >> and growing. >> biggest profit growth they had seen in a year. >> how about alphabet? their stock was down. boy, they are growing. >> this was a really strong quarter for google. in the secondary strong quarter across all things. there were a little bit more losses in the other bets
erik: this is "bloomberg best." i'm erik schatzker. on tuesday, argentina returned to global credit markets in a big way, selling more than $16 billion of bonds, the biggest one-day issuance on record for a developing nation. we dug into the details of the sale and its implications going forward. betty: after sitting on the sidelines for more than a decade, argentina is back in the global bond market in a really
big way. the company boosted its planned bond sale to $16.5 billion. it marks the end of its status after it defaulted on $95 billion in debt back in 2001. they are selling more than they expected. >> absolutely. on the street, you are hearing that the subscription for the bonds were five times oversubscribed, which is a lot. of course, the majority of this money is going to go towards repaying the holdouts, those who have helped bonds for the last 15 years and have been waiting for a payday. 2.5 billion goes to them. the rest will be for government spending. >> what was the cost of this 15 year bond market isolation for argentina? >> the finance minister, when he was in washington, was saying the whole mess has cost the
country about $120 billion. it is not just about, we have not tapped markets. it is about the policy measures that the last government had to implement because they weren't tapping markets, because they were avoiding tapping markets. because they were not tapping markets when the commodity boom ended, they started printing money to finance themselves. when you print money to finance yourself, you start accelerating inflation. when inflation starts blooming, money does not want to stay in your currency. then you start putting currency controls. that limits foreign direct investment because nobody once to put money into your country if they cannot get it back out. all of this was a very brutal cycle just because they would not sit down and finish what they started with the default in 2001. erik: another national government made business headlines this week, the kingdom of saudi arabia moving forward with plans to take its state owned energy firm public. that story begins our roundup of the week's top company news.
betty: the ipo in saudi arabia is almost to big to imagine. jpmorgan and michael klein, a former citibank investor who runs his own boutique has been suggested to run his own ipo. what is the latest on the ipo? >> the latest is that this seems to be going forward. there has been a lot of skepticism on whether the saudis are for real about this because as you mentioned, it is such a huge company and is so unprecedented. this is more evidence that they are for real about this. they are bringing in jpmorgan in what seems to be the lead banker on this and underwriter. michael klein, he is a longtime energy and industry banker, investment banker. he was with citigroup for a long time. this is a strong team, and more evidence that the saudis are serious about doing this probably before the end of 2017 they say.
>> china may be looking to get control of the most popular fast food chain in the country. sources say the consortium, backed by southern fund chinese investment, wants to buy majority stake in the yum brand local business. why would they want control of yum china? >> this is, as you said, the most popular fast food chain in the country. >> kfc, pizza hut. no taco bell. >> 7000 restaurants and owned by a u.s. company. they had been proceeding with a planned spinoff, but it opens a door and gives a chance for buyers to come in. in this case it looks like cic is very keen. yum had only wanted to offer a minority stake. >> let's talk about who else might be involved. >> other sovereign funds including assets. they have also expressed some interest in considering
acquiring a minority stake. >> we are focusing on mitsubishi motors. this after they admitted to manipulating the test results of 725,000 minicars produced over the past three years. this brings into question, can they afford it? can mitsubishi survive? or is this just the tip of the iceberg? >> what we have seen so far, it is limited to one particular model. mitsubishi is not really in the pinkest of financial health, but i do not see this as a question. it is only a question of how they come out of the crisis and regain customer confidence. >> it is mitsubishi's fault.
it harks back to the days when mitsubishi at this scandal back in 2004. apparently around that time they also started cheating on the fuel consumption. >> is it fraud, is it not? >> it is. it is not going to be as big as the volkswagen scandal but in the end, it is fraud. i don't know how the japanese regulators will handle this. but regulators around the world will say is that a good way of self certifying. that is what happened with mitsubishi. they were doing their own tests and certified themselves. everybody says, we trust, so i think that part of the trust will go away. and this will not only be in japan, this will be in the u.s., europe, japan, and also in china. betty: we just got news on volkswagen this past hour. the company and u.s. government agreeing to a degree on principle to settle the charges that it rigged its software to cheat emissions test.
the monetary part of the settlement has not been finalized. how much does this put to rest, the claims against vw on the diesel emissions? >> it helps to set aside any risk for investors that this is going to really blow up and total loggerheads with the regulators and turn into a nasty lawsuit. but for consumers, if you own one of the 600,000 noncompliant vehicles in the u.s., and you thought ok, today, finally seven months after this all came out i am going to know what to do with my car, you are going to have to wait two more months. >> vw set aside $6.7 billion. we have carried this story all day. the deal struck today was for $10 billion. there has been all sorts of theoretical figures on what the total costs could be for vw. some ranging as high as $42 billion. are we any clearer on that?
>> we are not since the report of last night. the $10 billion lines up somewhat with that original $7 billion. that was set aside as a global number for fixes. the other costs, that could be criminal penalties, shareholder lawsuits in europe, that will still be hanging on after we get the california thing settled. which again, we do not know what that is going to cost. the 10 million dollars that our source said for the repairs, there is also another big chunk that will come out of the california case, which is the remediation. ♪
with morgan stanley. >> shares of morgan stanley climbing in premarket in the fourth quarter. -- after first quarter. thanks to cost cutting and trading revenue that fell less than expected. bloomberg intelligence says the was worse than its peers but was expected. and a headline, the ceo now, we will be more aggressive on cost cuts if revenue falls. what is left to cut and how bad can that get? >> there is always fat to cut. the focus as you pointed out, that fixed income business across all of wall street is really struggling. it has been a liquidity story, a story with credit markets freezing and a lot of overindulgence in credit during the qe era, which is trying to find its way as we moved out of the qe era in the united states. that is a problem for a lot of these banks that built up huge
businesses in underwriting, corporate loans, corporate debt and finding the new equilibrium, which is less of that in an era where we are not going to expect as much during a 2009 period. >> we have had sales figures this morning from europe's biggest pharmaceutical company, roche. third-quarter sales rose by 5% narrowly beating analyst's estimates. steady as she goes. >> that is the best way to describe it. we have a 1% beat versus consensus. as expected, the key engine is the breast cancer portfolio. i think perhaps on a relative basis to consensus, it is coming through sales, which is a drug which is aflu sales
drug used for helping deal with flu outbreaks. although they are lower than last year, they beat estimates by quite a bit, so that help them make up for some other drugs that did not quite make it. >> we had a good or a bad influenza season? >> the numbers are good. the diagnostics business is doing very well. david: johnson & johnson sales are up in premarket after reporting earnings a little while ago. strong pharmaceutical sales boosted the company's. you beat on your earnings per share and certainly did below the estimates for revenue. take us below that. tell us what is going on beneath those topline numbers. >> we had a very strong quarter with all of our businesses picking up momentum. pharmaceutical sales have been very robust. the pipeline continues to build, which is going to be good for continuing that string of excellent performance going
forward. the consumer business is making steady progress and is always improving its margins. the medical device business continues to show signs of improvement. we are pleased across the board. >> what do these numbers tell us about not just johnson & johnson but about the health care industry and particularly, pharmaceuticals? >> it has been growing at a very fast pace. conversely in medical devices, they got some of the segments that have been historically low growth likes hips and knees. today, the actually reported 8% growth in the u.s. and that raises the question, more people getting coverage through obamacare and the aging population. maybe we are starting to see growth. vonnie: investors may have been hoping for a stronger turnaround. coca-cola shares fell in the premarket after the company posted first-quarter earnings that beat estimates. sales were down 4%. >> they put up good bottom line results. they beat consensus by a penny. macros slowness pressuring volume.
drove the top line to come in about a point light of where consensus wanted it to be and about a point light of what they expected to be for the full year. they clearly expect to make this up over the year on the top line on the back of incremental marketing over the key summer months. vonnie: these foreign markets, are they targeting the wrong type of consumer with the wrong product, or is the consumer weak? >> i think it is more the consumer is just weak. we heard similar commentary out of pepsi a week ago. specifically in eastern europe and in china, we have seen incremental decelerations since the start of the year. matt: general motors up more than 3% in the premarket after reporting earnings that beat analyst's estimates. it is a record profit. it is the most money per share you have ever earned. what was the big driver of that?
>> broad-based improvement around the world. europe was up. south america improved significantly year-over-year, between the two almost $400 million. we are very pleased with the broad-sed improvement across the business in the first quarter of 2016. >> are you expecting u.s. auto sales to plateau or come down a little in 2017, 2018? >> we think the fundamentals in the u.s. from an economic perspective will support a strong industry level for the next number of years, not only us, but other industry observers. 17 and a half million, 18 million, and that is where our baseline plan is. it is driven by credit availability, low interest rate, strong household balance sheet. that is what we are operating towards. >> ge out with earnings, beat estimates showing an effort to transform the company seems to be paying off. shares in the premarket are lower.
down .25%. this is potentially a margin story because most of the segments beat estimates, including oil and gas. >> they held up quite nicely, considering the environment. margins were flat about a year ago. overall, they have been doing a very good job. vonnie: targeting 17% and the total industrial market came in at 12.8%. i want to read a quote, from the statement. "a transformed ge is well-positioned. our portfolio is simpler and stronger. ge is on track to meet its investor goals." you say things are getting simpler. >> let me correct that the 12.8 is compared against a different number. it was 14.5. the first quarter is the lowest quarter in terms of margin. they can still make that 17%.
vonnie: talk about the shift to digital. it announced a partnership with oracle. >> i think that is a big deal. it is hard to move the needle on ge, but it is growing at 20%. we have done work on it with a software analyst and he believes they are going to be a player. i do, too. erik: you may have noticed, no tech companies. erik: you may have noticed, no tech companies. we will get to them later in the program. that is after we reviewed the week's best interviews. the ceo of mexico state and oil company is looking for private partners and the former chief of the fbi -- has thoughts on big banks and living wills. coming up next on "bloomberg best." ♪
erik: this is "bloomberg best." it's time to replace some of the week's most interesting interviews on bloomberg television-- it's time to replay. we start with the e.u. economics affair officer. he discussed greece's debt problems with mark barton. mark: greece has to pay the ecb a payment by july 20. how can you assure us we will not have a repeat of last summer when greece got the third bailout but the paths of that bailout was so much financial market uncertainty? >> we need to avoid that. there is no need to have that. we are not in the same situation. the situation is much better. they are excepting now that we are and they are on a reformed path. i don't want to hear anymore, anytime about grexit in any kind of meeting from the euro group. and july, july is way too far
way. we absolutely need to find a deal in the weeks to come. mark: what is the bigger risk to the e.u.? project is it a deal not being struck between greece and its creditor or is it the u.k. voting to leave the e.u. >> i don't want to talk about grexit. still not want to talk about brexit. we need the u.k. in. that is precisely what we are supporting. >> the purposes to get us closer to a point where we are not jeopardizing the financial sector. is this process getting us there? because some people are campaigning for present now seem to think it isn't -- some people who are campaigning for president. >> title i says those agencies say these plans are not credible, wish that determination has been made,
they can do a lot of things, including overtime ordering a breakup or a to register -- or a divestiture. to deal without taxpayer support and without disrupting the financial system. it is another reason why congress wanted to agencies involved in making the determination. i think hillary clinton is talking about that already. if they failed a living will process over time, they can be broken up. david: hillary clinton talks about that. bernie sanders her opponent, says -- we're going to break of the banks. what do you think? have we fixed the to be to fail problem in this country? >> i do think under title ii, if you had to, you could deal with it, a failing institution. you could do it without systemic impact. in the longer term, he wants someone -- yeah, i think this
process needs to play out. i think the market would accelerate that if they increase the capital requirements. it is hard for them to make a return on equity. it discloses some of the inefficiencies of the very large conglomerates. you are already seeing shareholders putting pressure on these large banks to start analyzing whether they would be worth more in smaller pieces. >> we are prepared to put on table -- assets. that makes a vertical integrated monopoly for 75 years. so there are a lot of things that within the rules, they don't necessarily need to be run by -- erik: i can imagine that might be a fertilizer company. it could be some midstream assets. >> that's something to, two partnerships, yes. erik: but not outright sale? >> we are going to want to repay part of the equity but we do not have to repay the majority. we are open to have a partnering
-- erik: a majority operator? >> majority operator. erik: in refining and where else? >> in the entire structure, from upstream, to refining, to downstream. everything. erik: are you in talks with any potential buyers? >> some of them. i like to call them partners rather than buyers. there are both of those. i like to call them potential partners. erik: when we talk about potential partners, or you were talking about financial partners or all come to this -- or oil companies? >> both. they are from everywhere. oil companies tend to be all over the world. and it is interesting because they are very interested in mexico. but they are very interested in pemex. oil companies do not like to go into a country without a domestic partner. pemex is a good domestic partner. >> what is even spending your
time crunching the numbers on? >> we have been looking at a german advertising company. and this is a company that had been a billboard, out of home advertising company till 2013 when it announced this digital strategy. and since then, it has just bought a lot of different businesses, patchwork in the online and digital industries. david: it appears there rather dramatic growth is 100% due to digital. >> it is interesting because one of the things we point out is the way they calculate organic growth, we cannot get the numbers to tie. for example, they announced in 2014 at the organic growth in digital is 34%. using their methodologies, their numbers, we get 2.2%. david: my question is, who cares?
their earnings-per-share looks like they are going up. if they are making good acquisitions and ending to the earnings-per-share, why does it matter whether it is organic or not? >> the question is, how do we know whether they are making good acquisitions and what are they paying for these? they paid over 100 million euro in cash and increase the share count by 1/3. there is a lot of dilution there. what is falling to the bottom line, it is not really clear the quality of that. david: you are a researcher, that is what you do. if you do the pro forma, what does that mean in terms of overvaluation of capital? >> substantial. this company has, especially for europe, a real premium multiple. that is because of this blue sky story where the market believes that they are really good at executing this digital strategy and almost everything they buy turns to gold.
erik: you are watching "bloomberg best." so many fascinating questions swirling around tech this week. who will bid for yahoo!? can netflix sustain its growth? how strong is global demand for pc's and smartphones? bloomberg provided answers and insight. >> intel announces a major restructuring in its quarterly earnings.
it will cut 12,000 jobs or 11% of its workforce. these are pretty significant job cuts. what are your takeaways? >> -- acquisitions over the last few years but also really looking at a changing market. the pc market selloff will not let up. they have got to make some changes. this is a company that's loathe to lay off people. it is a company where people spend their entire career. this is a significant thing -- saying the cuts would be voluntary and involuntary. emily: some analysts are saying these job cuts were long overdue. would you agree, and why do they take so long? >> absolutely. one of the things with intel is that -- it's a pc focused company. it remains that way from a topline perspective. they have been able to outperform pc chip sales from intel have done better than shipment growth. at the end of the day, you are only going to be able to grow as fast as your underlying market,
and this is a hard pivot. and it is a long time coming, but one that has to be -- that is absolutely necessary. emily: qualcomm continues to get hit by the slowdown demand for high-end smartphones. thanks to weaker than expected appetite for the most expensive mobile phones. what are the takeaways? corey: if you have got a smart phone, you have a qualcomm chip in it. the growth of smartphones has been trenching. when you look at the revenue numbers, you can see this decline pretty steadily as the smartphone business, the growth rates have slowed down not just in china but all over the world. emily: the smartphone market is saturated. high-end smartphones do not appear to be getting any better. corey: this time yesterday we were talking about intel. intel finally decided -- they are going to have to cut a lot of jobs. i want to show you inside the bloomberg terminal.
so, intel, this is a stock chart of intel. what you see are times they have had lay-offs. these layoffs just announced. qualcomm looked at the same situation and did this -- they could see on the horizon, the issue they were going to happen they took some playoffs and now they are starting to get the benefit of that with a slowing sales, at least they are seeing profits increase, profit margins a little bit better. it shows the management of qualcomm grabbed the difficult decisions they had to make and made some of them to lower costs in an environment where they will sell less in chips. >> s.a.p. showed is first order sales rose less than analysts expected but said it had "high visibility for a strong second quarter." >> we exited 2015 on a high note. we had strong growth with 11%
growth as well as in our cloud business where we do very high double-digit's. so we are very confident although we see that in some parts of the world, especially and latin america with the brazil situation, there will be continued volatility but s.a.p. is a global enterprise -- which gives us confidence in achieving our full-year outlook. hans: is brazil the biggest challenge in latin america? it is not just volatility. it could be a downward trend in the economy there. >> brazil is a special story. and i would not put all of latin america into the same basket. overall, there is a negative investor sentiment. when you take a look at other emerging markets, we had a very decent performance. china do double digits. russia came back to double-digit growth again. so, overall, i would say i am not too worried about the global economic situation, with maybe brazil being an exception.
emily: netflix shares plunging in after-hours trading after forecasting weaker subscriber growth this quarter, especially in the where markets outside the u.s. what are the big themes you are pulling out? corey: the forecast is so important, in the midst of the price hike, they grandfathered in a lot of their longer-term customers. forecasting this is tough because we do not really know what the effect is going to be of this new price hike on their customers. the suggestion is perhaps netflix is getting closer and closer to how big it is going to be. emily: we are talking about billions of dollars on original programming. at what point do we know if it was worth it? >> reed hastings said that netflix would deliver material profits in 2017. they are profitable in the u.s., but if the growth does not keep up overseas or if currency markets hurt them, we might not see the profits next year that they have forecasted. they've been to 130 new countries. they are only appealing to
countries -- people who have international credit cards and can speak english. they cannot add on most of the local features. emily: just-in-time, amazon starts to announce its standalone video service. how does this change the landscape? >> netflix is the target for everybody. they are the ones who have been here the longest. they have established the model. they are going to be the target. in the united states they can take pages -- they can start doing live television, they can start doing news. by no means do i think they have reached the end. emily: big blue shares dipping -- whether we're going to see these investments ibm is making in different parts of the business hit the bottom line? corey: $10 billion in investments. ibm, 16 quarters. zero percent 17 quarters ago. and you have no growth for 17 quarters.
they said this is what we would see. the problem is we are not seeing that come to fruition. they have stopped their old form of delineating between the different business units. we do not really know how this quarter compares to the last one because they just did not give us apples to apples comparison. they have a new structure to report different business segments. as a result they want to start over and they will get the chance. the 5% decline looks a little better but they had some currency benefit this quarter. the dollar is a little bit weaker. the strong dollar they had been complaining about was not as much of a problem this quarter. emily: where do you see bright spots? >> you are seeing cloud business up 36%. some of the other areas, analytics, security, all of that is taking place. we have been talking about this for several quarters. that this portion is smaller than the legacy business, and this is why it is taking them so
long. it will be actually a few years when you see this thing get lopsided before you start seeing the revenue growth catch up to the decline. in the legacy stock emily: yahoo! shares dipping slightly after the company released earnings that slightly topped wall street's weak expectations. revenue excluding sales, declined 18%. yet, yahoo!'s call quickly turned to the company's possible sale with bids from verizon, private equity firm tpg and yp. what is your take on the bidders that we know of? >> from a shareholder perspective, verizon is head and shoulders above those on that list. i do not really see yp as a serious contender. they just do not have the resources to make a full bid. from an amusement point of view, i would be most interested to
pointing to a loss of half of 1%. erik: there are about 30,000 functions on the terminal we call the bloomberg. and every week on bloomberg we highlight some of our favorites. maybe they will become your favorites. here is one more. quic for quick takes. customers can check it out for fast insight into timely topics. take a look at a quick take from this week. alix: oil is one of the most-watched commodities and a $1 trillion market. the factors that set prices are much more complex than supply and demand. after opec and non-opec producers failed to agree on a production freeze, there are more questions. here is the situation. after four years, crude began to plummet in may 2014. prices dropped 75% over the next 18 months, turning oil producers into turmoil. instead of tapping the glut by pumping less, middle east exporters opted for a price war to defend their market share.
and, adding to the oversupply, iran is ramping up exports. here is the background. opec was formed in 1960 and members use their power for political and economic ends, jockeying the global economy with an embargo in 1973. and in the 1980's in fighting the -- gave rise to new market-based prices. here is the argument. oil prices are not expected to rise anytime soon. and some experts worry that bargain prices will begin a period of underinvestment in oil production that could set the stage for another surge in prices. opec members are torn over a long-term strategy. some want to protect their market shares. others want price relief. environmentalists worry that cheap oil will increase energy consumption and slow the shift to cleaner fuels that could help fight climate change.
♪ emily: i am emily chang. this is "best of bloomberg west." we bring together the top interviews from the week in tech. the president of didi chuxing, the leading player in china's ride hailing space and a competitor with uber. we hear how the company plans to keep uber at bay. the third season of "silicon valley" premieres on sunday. we will hear from dick costolo, a consultant for the show, what