tv Lunch Money Bloomberg January 28, 2014 7:00pm-8:01pm EST
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>> welcome to "lunch money," where we tied together the best stories, interviews, and business news. i am adam johnson. tomcon valley veteran perkins invokes class warfare, nazis, and rolex watches. when great is not good enough. there is one company that knocked the cover off the ball for investors and then ran for the exits. in motors, record profits, but at a price. in media, the triple play. comcast, charter, time warner cable. and meatloaf unplugged. talking music, acting, the super
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bowl. kicking it off with the thing everybody is talking about. president obama going in front of the senate chamber tonight for his fifth state of the union address. can we get a sneak peek? >> we know from white house officials, the president tonight will announce that for federal contractors he is going to sign an executive order mandating the increase of a minimum wage up to $10.10. >> $10.10, the federal minimum wage right now is $7.25. that is $14,500 a year for a full-time worker. these federal contractors -- how many are there? >> about 200,000 people. this is the start of the first push as he tries to pressure congress to pass a broader federal increase. >> how many federal contractors to say would be affected by an increase? >> maybe a couple hundred thousand. but the president is leading by advantage -- example. last year he called on congress to raise the minimum wage.
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he supports the bill that would not only raise the minimum wage to $10.10, but would also provide for a cost-of-living increase periodically. >> a couple hundred thousand. that is .06% of the u.s. population. it's a start. but some republicans are not buying the minimum wage mission. >> we are going to see a lot of the same themes in this years state of the union as last years state of the union. there has been an inability to get anything done on tax reform, entitlement reform, fixing our economy. the president has to resort to the small measures to circumvent the congress. >> so the issue is not that the president wants to raise the minimum wage but how he wants to do it. >> we have seen the challenges of getting much done through congress. even though we have been able to get major pieces of legislation through, what the president is unwilling to do was simply wait for congress to act and work with them. he will continue to work with them, but he is also going to take action on his own. he is going to sign executive
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orders. he is also going to use the telephone and bring people into washington who want to make progress, create jobs, and grow our economy and provide opportunity to hard-working americans who just want to succeed. >> no surprise, republicans are not too supportive of this management style. >> welcome to the real world. it is hard to convince people to get legislation. it takes consensus. but that is what he needs to do. not taking his pen and creating law. >> times of divided government are frequently good times in terms of achieving things for the american people. this president, it seems to me, after the 2010 election when the american public issued a restraining order, the president has hung out on the left and tried to get what he wants through bureaucracy as opposed to moving to the political center. we are anxious to help him create jobs, but we are not going to go over and endorse more spending, more debt, more taxes and more regulation.
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>> got the picture? republicans are not buying it. they want more face time. >> he has reached out to republicans time and time again. he has solicited their ideas. there is barely a speech he gives where he does not say if you have suggestions for how we can improve legislation, ways we can move our country forward, i want to hear those ideas. he does not just want to hear what they are against. he wants to hear what they're for. that arm has always been out reached. you will hear that again, a call to work on both sides of the aisles. but it takes two. >> that is not what republicans say. >> i have not talked with the president or democrat leaders about this issue because i have laid out what needs to happen , and they have yet to come forward with any plan. it should not stop reasonable democrats from working with us. the president and democrats refuse to discuss changes to those programs unless it
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involves raising taxes. dealing with the white house is like dealing with a bowl of jell-o. >> that has gotten hurt. but surely republicans would never do what the president is doing, going around another body of government or something like that. >> if the president will not do something with the debt, we will take it to the american people. >> we need perspective from the man who has covered of dozens of state of the union speeches. talking about al hunt. >> harry truman was sick of having economic advisers say on the one hand, on the other hand. this is going to be that. he is going to say, the state of the union is getting better, but it has got to get a lot better. he is going to allude to executive action, but that is small ball. he cannot do much there. he is going to lay down markers on income inequality, but also seek some accommodation.
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i don't think it is going to be a defining speech, but it is nevertheless an important speech. >> important how? >> this is one of the rare times there is a semi-shared experience in america. the president gets to address 33 million people on television and so many more millions online and on social media. eventsw of ants -- attract as big of an audience, -- it is a real opportunity. >> we asked this question every time there is a state of the union. our that many people really paying attention? are that many people tuning into social media, twitter, whatever it may be because they care about what the president has to say on this one night of the year? >> they are interested, but not passionately concerned. >> year by year, more dispassionate. >> he will have half the audience bill clinton did? >> why?
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>> because there are so many alternatives. don't forget. you didn't have some of these cable outlets 20 years ago. having said that, you also didn't have facebook, twitter, all of that. so it has changed, but it is still an opportunity. i don't think the president's approval rating is going to change all that much. first, the country is polarized. i don't think you can change people with one speech, but you can play a role in setting the agenda for discussion for the next couple of months. >> so, what can we expect tonight? the president mentioned 41 proposals in his last eight of -- state of the union. two were passed. we will have full coverage of the state of the union tonight at 9:00 p.m. on bloomberg television. the whole issue of income inequality got tom kurt -- tom perkins filed up -- fired up. we discuss recent comments regarding the holocaust in attacks on the one percent.
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>> this is "lunch money" on bloomberg television, streaming live on bloomberg.com, your tablet, and your smart phone. i am adam johnson. the founder of one of silicon valley's most prominent venture capital firms wrote a letter to "wall street journal that" he compared the nazi war on the then-one percent the jews to the current progressive war on the one percent. he wrote -- mr. perkins, your timing is
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impeccable. yesterday was international holocaust remembrance day. countries around the world commemorated the 6 million jews who died in the holocaust. perkins did send a letter to the anti-defamation league apologizing for using the word tallnacht and explained it to emily chang. >> the use of the word was a terrible misjudgment. i don't regret the message. >> what is the message? >> any time the majority starts to demonize a minority, no matter what it is, it's wrong and dangerous. and no good ever comes from it. >> but why even mention kristallnacht? >> i used the word because during the occupy of san francisco by the occupy wall street crowd, they broke the windows in the wells fargo bank, they marched up to our
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automobile strip on venice avenue and broke all the windows on all the luxury car dealerships. i saw that. i remembered that the police just stood by, frozen, and i thought well, this is how kristallnacht began. so that word was in my mind. >> more than 90 jews were killed in kristallnacht, 30 thousand people put in concentration camps. what were you going for with this analogy? >> the jews were only one percent of the german population. most germans had never met a jew. and yet, hitler was able to demonize the jews. kristallnacht was one of the earlier manifestations. there had been others. and then we know about the evil of the holocaust. my point is that when you begin
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hatred against a minority, it can get out of control. >> let's just remove the holocaust analogy and talk about income inequality. again, impeccable timing. tonight the president will address this tonight in his state of the union address. raising the minimum wage and closing the income gap will be at the top of his agenda. perkins says stop with the class warfare. >> let the rich do what the rich do, which is get richer, but along the way, they bring everybody else with them when the system is working. >> perkins mentioned an article that highlighted his point that class warfare had gotten out of hand. >> they got into the discussion of the idiocy of rolex watches and why does any man need a rolex watch? it is a symbol of terrible values, etc.
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well, i think that is a little silly. this isn't a rolex. i could buy a sixpack of rolexes for this, but so what? >> that comment caused a small explosion on twitter. here is some advice perkins has for the 99%. >> i think the 99% across america should pay attention to politics, follow where it is going, do read the newspaper, don't try to get everything over twitter and facebook. it's not there. and worry about the future, because right now, i think america faces a very, very troubled future. >> quite a jump to assume the 99% doesn't read newspapers. in the end, he says being an object of scorn is just part of life. >> i am an old man. i look back on my career with great happiness.
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it i think i have accomplished a lot. if i had to do it again i don't know what i would change. and i'm at peace with myself. the fact that everybody now hates me is just part of the game and i am sorry about that, but that isn't what i meant to do. >> you can watch more of emily's interview with tom perkins on bloomberg.com/tv and on our free mobile app, bloomberg tv plus. when great is not good enough. there is only one company that knocks the cover off the ball and then investors run for the exits. that is coming up next. and meatloaf unplugged. the rocker talks music, acting, the super bowl, and fight club. also, we want to tell you folk singer pete seeger just died. "if i hadt known for a hammer" and "we shall overcome that" he inspired generations of musicians, from bob dylan to
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>> in tech, when great is not good enough. we are talking about apple, the maker of the ipad, which sold a record 51 million iphones in the final quarter of last year. profit and revenue beat estimates. and yet the stock fell. cory johnson, what is going on? >> they reported full-quarter sales. the iphone unit sales were 51 million. only six percent or seven percent over the previous year. growth of six percent is not a spectacularly growing business. margins were a little better. interestingly, there was a 14% increase in the number of ipads sold.
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they introduced a more dramatically different ipad in the same quarter, the ipad air is very thin. >> it doesn't take an analyst to figure out there is a disconnect between wall street and apple. the surveillance team tried to figure it out. >> apple is about profitability. a decision lots of people have criticized, that is with a cheap iphone is. we talked about honda. they are kind of moving into the bmw model. they are a smaller percentage of the market, but they will maintain their brand and reputation for excellence. you look at their overall market share and it has gone from 182% to 18%. they are growing, but at a much slower rate maintaining higher margins. was it the right choice? hard to say. >> i have this phone, it is a miracle. >> here is the thing.
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tim cook said there was a product problem they had. too many 5c's, and not enough 5s's. and the challenge was to focus on -- was it the right approach? >> apple has a very narrow focus strategy. we will build only a few products, only a few models. it has great advantages. one thing people don't talk about quite as much is because they have a very narrow product line, it is very easy to design apps for it. it is easy design -- to design add-ons. that helps the other line of business. >> i don't share the gloom. i think the new york times did a more balanced approach than others. i know they missed it, but if you took the name apple out and called it stearns, everybody would say it was pretty good earnings. >> if you look at increased revenue per quarter. >> and profitability, right? >> it is not a great sign. that combined with the other
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struggles since tim cook took over. there is a lot of pessimism. >> you look great on instagram. nick thompson, ask what you can do -- >> imagine what you can do when it becomes your wallet. >> here is the other question. you can pull up another phone that can do that now. a couple years ago there were things you could not do. >> from high-tech phones to high-tech cars. the auto industry loves showing off. how many of these things make it to the streets? we will tell you, coming up. and, time warner, charter, comcast. we will break down this potential blockbuster deal. ♪
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>> this is "lunch money" on bloomberg television. also streaming on bloomberg.com, your tablet, and smartphone. i'm adam johnson. in today's moving pictures, where the video is the story, the prime minister of the ukraine has stepped down. he says he hopes his resignation will diffuse the country's political crisis and put an end to two months of violent protest -- clashes between protesters and police. our slater, lawmakers repealed anti-protest laws put in place by him. 50 workers marched into a wholesale market in hong kong. the mission? keep local cases of bird flu from spreading. they were ordered to cull thousands of birds, mostly
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chicken, after authorities in eastern china announced a ban on live poultry sales. finally, a centuries old treasure has been returned to italy. a stolen manuscript was found in florida. it will be repatriated to the italian government. it is taken from a prayer book scripted in latin, with a small, colorful portrait of st. lawrence. ford reporting record annual profit in north america and asia. f-series pickups in the u.s. and ford focus compacts in china led gains. here is the ford cfo with the market makers team. >> what we got into is profits of $7 billion-$8 billion this year. compared to $8.6 billion in 2013. gives you a feel. >> $7 billion versus 8.6 is almost 20%. is it really that expensive to roll out new models that it would cut your pretax profit by 1/5? >> yes, because we have so many
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different products we are launching and tripling rollouts in america, including the all-new f series. it can have that effect. we announced today that we will have 13 changeover down weeks, if you will as we prepare for that launch in the fourth quarter this year. >> jamie butters of bloomberg news explains what the record profit means to forward. -- ford. >> we saw a pretax profit in north america. ford runs their business using a pretax profit, the number they like to use. the important thing about that is that is also the number the uaw is using. that is the number that sets off profit sharing. along with ford's record profit in north america, in this final big moneymaking year on the old f series design, the uaw workers are going to get $8,000 on
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-- a piece on average as their share of that. that is part of the new model that has made detroit so much more profitable. rates and higher profit sharing for workers. >> ford has introduced a number of new models recently. where did all of these ideas come from? concept cars. matt miller checked them out at the detroit auto show. lines and radical designs defined concept cars. most will never see production. so why build them? to gauge customer reaction and create that all-important buzz. here are five concept cars. from pure fantasy to near-term reality. what you see behind me is an example of both what is amazing about concept cars and the problem with concept cars. this is the toyota st one. it was a bomb dropped on the detroit auto show.
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it might be gorgeous, but the car doesn't even have an engine. execs tell me there are no plans to build this beauty. this is a honda concept. although they will make a fuel cell vehicle in 2015, for the u.s., this has a completely ok plastic greenhouse. you can't get in and out, and you definitely can't drive it. expect the real car to look not nearly as cool. some concepts like this audi are made to display a certain aspect of future cars. in this case the showcases on the interior. there is no center stack, and all the gauges will be in the display right in front of the driver to keep his eyes on the road while operating the vehicle.
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sedans the nissan sport concept. it is a rolling concept which means there is powertrain inside. it does have a transparent glass roof. a lot of people find the design really striking. people are saying this could be the next nissan maxima, so it could actually see production. on the spectrum of concept cars that will never be made and those almost in production, this one falls at the lucky end for consumers. if you want a long coupe with 500 feet of torque, the mercedes is about to become a
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realization. they will only change little things, like these mirrors. motors designer, generally credited with inventing the idea of the concept cars. the media triple play. time warner, comcast and charter. we will explain what this big cable deal might actually mean for you. and how did meatloaf become the love? his answer later. ♪
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>> this is "lunch money" on bloomberg television, streaming live on bloomberg.com, your tablet and smartphone. i'm adam johnson. we have a connection with some of the biggest names in the business working on a deal. first, the headline. comcast reporting a 27% profit increase in the fourth quarter and adding 43,000 subscribers. its first quarterly gain in nearly six years. it will raise its annual dividend by $.90 and plans to up
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its stock buyback by about $7.5 billion. comcast is bringing muscle into a big cable deal starting to take shape. here is how it will work. acquirewill potentially new york and new england subscribers from time warner cable if charter can buy the rest of time warner cable. alec sherman broke the story. >> there is an ongoing saga. a hostile bid. a bearhug letter sent a couple weeks ago. charter saying we are going to speak to shareholders directly. i also learned from people familiar with the situation that a tender offer and a proxy fight may the a few weeks away. a direct offer to shareholders. initially charter put in a bid $132.50. time warner thinks it is too low. >> obviously a lot of moving parts, and the latest development is? >> what we learned yesterday is that comcast has made a deal on the side with charter saying look, if shareholders except
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accept your deal at whatever price, we will offer to buy certain assets, give you cash -- >> which charter needs. >> they are raising about $20 billion in debt. this way they could add more cash to that offeror and maybe convince shareholders to do the deal. >> is that what is going to happen, ultimately? >> that is what shareholders want at this point. i would imagine the price will be higher. but this development, by doing a deal with comcast, probably takes the number down a little bit because comcast had been sitting out there as a potential competitor to charter. they could make their own bid for all of time warner cable and -- >> that might bring the price down a little bit. >> so again, who are the key players here? >> comcast has been the largest cable company since john malone got out of the game back in the late 1990s. now malone has bought back in to
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charter. liberty media is charter's biggest shareholder. between charter, john malone, and brian roberts is really john malone's aim to brian, to do a deal we need your help. he is coming to brian roberts and saying, if we will get something done, we need you. brian roberts is sort of the kingpin in all this. >> what dates to we need to mark on the calendar? >> in the next couple weeks we should get a sense if charter will bump up the bid. time warner is likely to mount a defense, saying they have said $160 is what they are looking for. we will see. will time warner cable come down in their asking price or are they sturdy at 150? if they are, the process will continue. charter will nominate a slate of directors and put it up for a vote for time warner shareholders. >> to we have a deadline?
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>> february 15 is the deadline for a nomination of new directors. that is the day that charter will name a slate of directors, a few days before. the annual meeting is not until >> duly noted. may. the first publisher of rolling stone magazine says there is one detail people are forgetting? >> this is the aereo case before the supreme court. if aereo wins, and the consensus looks like they will, there goes $5 billion or $6 billion of retransmission fees the cable companies are getting. that will have an impact on the earnings and the value of time warner cable. >> to the positive side, because the cable companies no longer have to pay. >> remember what happened with cbs and time warner during the blackout that cost time warner all the subscribers. >> good point. the aereo decision is expected
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in the first place. getting the attention of a new york agent. >> i went over to jeff hunter and jeff hunter sent me down to the public theater. he said if you are going to do anything in new york, you need to meet joe papp. i walked into the room, and sitting in the room was jim steinman who we had done bad out -- bat out of hell with, bat out of hell two. things from three. i don't do concise answers, so if you are forgetting that, forget it. i sang a song for him called i would like to be as heavy as jesus and jimmy stopped and got up and started walking out of the room and he stopped me and looked as me and said by the way, you are as heavy as three jesuses, and he laughed. and he brought back joe papp and this army of people. i started singing again, and joe stop me and said i want you to go to this other room, learned -- learn this song and come back.
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i learned it and came back. i had gotten about three lines, and joe said ok, and he handed me a script. it was the first time i had ever been handed a script. he said i want you to go home and read this. and he wrote on the outside cover, there are the soldiers. pick out which soldier you best relate to. i read the script and i had no idea what was a good script and what was a bad script, and i called a friend of mine who was a director and i said i am in a do this script and he said from where, and i said from the public theater and joe papp. he said is a real? i said yes. he says, did you read it all at one time? were you offended by it? i said, there were parts that were offensive. he said, was and still you would not do it? he said, was it funny? it was really funny. he said, it was a good script.
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>> how did you get on stage in the first place? >> i wanted to get out of study hall. in dallas. in the stone age, you would go to school for three months at a time. we had study halls, and i wanted to get out of them. >> what year was this? >> i don't know, like 1742 or something. i said i need to get out of study hall. is there an elective i can take? she said drama class. i said, put me in there. i don't have to be quiet in there. i went in not expecting to do anything. i sat in the back of the room like the old hoods, like fozzie on open -- "happy days" and that lit the fuse. >> fight club. >> david fincher directed. a remarkable experience. we played a lot of poker in the downtime and i took a lot of money off brad pitt. so anyway, fincher was amazing
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to work for. i would work for him in a heartbeat for nothing. if they called me up and said we want you to be in a movie and we are not going to pay you, i would say fine. i would do it for nothing. working for david expanded my horizons as an actor. brought out more. so youoes so many takes, have to continually be creative. >> you told me that instead of watching the grammys -- went on the internet, they were showing people coming to the grammys. they had 60 pictures already. i didn't know any of them. i said ok, well, i'm out of it, so i am not even going to watch. later on they had taylor swift and madonna and different people. i would have known who they were. i didn't know any of the first 60, so i said oh boy. i am out of touch. i am like my mother now. >> meatloaf will be in planet hollywood in las vegas from february to april.
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it is supposed to be a 90-minute show. however -- >> i don't know how to do 90 minutes. and wea show before, went on at 7:30. they were supposed to go at 9:30. one night we went on until 9:26. i don't know. it is improv. my indian name is never shuts up, as you can tell. i am not concise. i tend to ramble. >> today's mystery meat? what other than meatloaf. ♪ ♪
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dow jones industrial average up 90 points. 0.3%q composite index up 409 seven. rising consumer confidence higher than estimated, corporate earnings, helping to fuel the market today. 2013 marked a strong year for ipo's in the united's aides, from twitter to hilton worldwide joining the public markets. will that trend continue in 2014? our guest joins me in the newsroom. talk to me about the state of the market. >> looks pretty good. what i'm hearing from bankers is the pipeline looks even longer than it did last year at this time. we could see another extremely strong year in the ipo market. that said, any macroeconomic shock that causes stocks to fall even further could derail that. >> what is private equity looking at? what metrics are they looking at? they will jump in with both
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feet. >> they are looking at strong market conditions like last year , continuing into this year. a lot of these companies have -- were bought by private equity from 2004 2007. now would be the perfect time to monetize. they have had plenty of time to restructure the businesses, county of time to make them leaner and ready for public markets again. we could see a lot more companies coming through the public markets. heard talkwe have about money on the sidelines waiting for the opportune time to jump back in. economy being the main signal. can the same be said for ipo's? >> absolutely. deals on the ipo front definitely benefit from an improving economy as the stock market rises. that increases the risk appetite, which encourages investors to buy into ipo's, which are often seen as a separate asset class.
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they are the unproven story, where they attract performance-driven investors. that usually goes hand-in-hand with an improving economy. that said, with the fed taper argument, that could actually benefit ipo's as investors take money out of bonds and into equities and strive for that performance through ipo's. >> the giant in the move -- room is alibaba, the chinese e-commerce giant. when is its ipo expected? we are ready have dealmakers and bankers going to bob -- hong kong in anticipation. >> you see those numbers from today, with yahoo's increase in third-quarter sales. unbelievable growth. that said, timing is still not official. the difference between the alibaba ipo and other ipo's is it is not looking to be a capital-raising event. they do not need to raise funds
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to hire more workers or pay back debt. they have no official deadline except for yahoo!'s, which is 2015, when they said yahoo! could sell their stake through an ipo process. it could be tomorrow. it could be a year from now. it is still very up in the air. >> covering ipo's for us. thanks so much. that is it for "on the market start" i am mark crumpton. ♪ .
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