>> welcome to "lunch money."

let's kick it off with what everybody is talking about. something is afoot in the twittersphere. the stock open down more than 20% after a stock report that left investors stunned. wife that is for sure. twitter's first earning report disappointing analysts and investors. it is important to remember -- >> this is about a stock, not a company. 41% was slow going into the call. as i said earlier on bloor today, short sellers are probably covering but they're keeping the stock from falling further. so they are potentially thanking the short sellers right now. >> ok, so that if the stock, what about the company? >> the user growth numbers were not that strong. in fact, all of the user engagement numbers cannot kind of week. just the user growth alone at weak.han 6% alone is just 5.9% growth.

all of the activity they got in the u.s. alone. you have growth at less than 2 person on the user base. i think that is disconcerting for a business that is so much smaller than other companies like facebook. >> acoma so tiny twitter trying to live in the big shadow of facebook. the comparison probably inevitable since they overlap in the social media universe, but it is not a company in my opinion that really deserves the comparisons that are so frequently made to companies like facebook and google. it is not a relevant -- it is a relatively small business but not a massive global powerhouse. >> twitter ceo dan costello is aware of that, but he put a positive spin on the earnings call -- >> hundreds of millions of users continue to flock to twitter every month to experience moments in their lives and in moments in their world. we believe the changes we are making will create a much more satisfying experience for users in the first few days, weeks,

and then months and years on twitter and ultimately lead to higher engagement and user growth over time. i talk frequently about twitter being this global town square, and when you are walking through the town square and observing something, you often want to whisper to the person next to you about the thing you are both observing, so that notion of private messaging that we , and see anard increase in 25% and one quarter, using service to enhancing that back-and-forth between the public and private conversation. >> the words of twitter ceo c costolo are not enough. another media company is heating up things to a -- thanks to a little ice. we are formatted about is a. is one of disney's biggest pictures. does that mean we could see

another "frozen" and our future? >> i do not want to relive a thing of about the future of frozen. we are probably being even more specific than we typically are at this point, but we are very excited about it and there is great demand for it. when we talk about franchises, we talk about something that is businesses,cross across territories, over a long period of time, and i think this checks all of those boxes. >> disney ceo babob iger. he does not want to focus on one movie. >> it is also important to point out that the quarter was impacted nicely by this fantastic success was also affected greatly by business success at every one of our operating units or success at every one of our operating units, so we had a double-digit

improvement at every one of our recorded segments. >> disney parks, gains, and consumer products hosting higher revenue as well as profits. that just means more boats -- more business. just a hugen i increase in mobile and. btremendous increase. it is really where the games market is was that we have shifted our strategy dramatically. >> did you pick up his excitement on mobile? if youve mobile because think about it, if you wanted to watch tv before, you had to watch tv on a fixed screen, typically attached to a wall or shelf or cabinet of some sort in the home. not watch tv elsewhere. you now have the ability to do that and that is only going to grow. so if your ability to access products grows, then your consumption is going to

increase. that is a great thing for creators, a great thing for distributors. >> the third media company competing with disney and twitter for those mobile users -- aol. revenue beat estimates of ad sales grows. what is out there that aol wants but does not yet have? >> our strategy overall just as a refresher is to be the leading media technology company in the world, and within that, we are focused on three big areas. one is rebuilding a well service, the second is the contact brands dass content branscomb in the third is a platform that scales not just to a world across the world. if you think about the huffington post, everybody needs news every day come if you think about techcrunch, technology is probably the biggest cultural trend in society. the third one his women, and we think women are underserved on the internet. you have been involved in this,

but the makers project, and we l.a.the conference in i am a big believer in brandon i would love to have more content brands and more platforms to serve content brands, not just the ones we own but across the internet. >> a world made some gains because of deep cuts at its local network at neighborhood never called patch. ceo tim armstrong talked about it with betty liu. >> it is $150 billion space. we have almost 20 million --sumers andthe product consumers in that space, and the product, how to get structured. we are going to hang with it and we are big owners of the property, and we're going to work for a closely with them. i was a also one of the things we have been able to do both with hail and the rest of our content robberies as we just purchased gravity, the -- all of

these are going to get more personal. >> what is hail going to do that aol could not do? >> hail is very focused on the community aspect of the product, which patch struggled with. we have great editors they're producing a lot of contents, but the focus on the technology for what hail is going to bring to the table, i think they're going to bring a faster way to restructure that product. >> just aa few more -- few more seconds, talk about a tie up with yahoo! >> we are already tied up with yahoo!. >> a further merger perhaps? >> that is above my pay grade. we are focused on turning aol around, and we had an olympic performance in q4, so that is what i am focused on right now. >> above his pay grade? he is the ceo.

i guess we will just have to watch the news. we are going to get the ceo's reaction after the company gives a grim outlook for sony. and a new mercedes. and a rough time on the high seas. a spanish cargo ship's planned -- and into a jetty off the france.tern coast of rescue the 12-man crew. be ship snaps into. no one was on board on that moment. here is the rest of it in the brawl. ♪

>> this is "lunch money," on bloomberg television, and we are streaming live on bloomberg.com, your tablet, and your phone. general motors ceo has got her work cut out for her. the carmaker saw across the board declines internationally except in china. kind of curious. north american profits help to offset some of that weakness. meanwhile, dimer delivers -- daimlerchrysler delivers. class.also revamped s the ceo says we can expect even more from the automaker in the year ahead. >> we will have basically every quarter and we are very sure the

momentum we have been right now will further increase. we are about to launch the new c class. the delivery starts right now. so far the media has directed newemely positive that this car in that segment, which lifts the level in the segment altogether. for theseen fantastic s class. we will see the coop and that segment as well. our compact suv is the next step. we are really hitting on all cylinders. dimer ceo also addressing the current volatility in emerging markets. >> the volatility is that of today's world, so we have got to live with that, the focus points are changing around the globe. right now we are seeing negative impact from capital outflow of some of these markets.

we react like we do everywhere with product, which is so attractive that the demand is even relatively constant in the total market is negatively impacted by the economy altogether and we are gaining market share. so of course we cannot be totally immune again the -- against those influences, but we have a strong position. we do believe that china will continue on their significant growth path. brazil will find its way through the current troubles. , whichse, other markets is in a much more difficult situation but much more relevant for business. we are expecting this year, including these troubles, and byrall growth of the markets four percent or five percent on a global basis. and that is a good environment to grow even more than not.

largesteurope's second- carmaker, coming out with a new model to serve customers seeking cheaper businesses. citroen will be unveiled in spain but the company is looking at other areas around the world. the ceo explains. >> the actual zone of the car is going to be right in their, with many companies outside of europe, over the industrial base is limited to europe. >> cactus goes on sale starting in june. all right, breakfast cereal sales are feeling a little less of a crunch what we have the top sellers for the kid in you, and later, we are nuts for doughnuts. forget about bulky camera gear. apple showing off the results of a shoot it didn't last while doing nothing but -- using -- it

did last year using nothing but iphones. the video can be found on apple's youtube channel. about a month after that show, jointed apple as ceo of retail. imagine that. ♪

>> this is "lunch money," on bloomberg television, and we are

streaming live on bloomberg.com, your tablet, and your phone. i am adam johnson. depthe going to take an in- look at sony. the stock is up today in spite of some very disappointing earnings. ofbefore as a surprise loss $1.1 billion. surprise loss of $1.1 billion for the four year versus an earlier profit forecast was opposite even with a weak yen, so you really have to scratch your head. the company is cutting 5000 jobs on top of the 10,000 jobs and had already cut, so the ceo is not really getting the job done. >> don't expect the ceo to bow anytime soon. electronics,ound entertainment, and financial operations is my important mission. i do not have any intention to step down. , turnaround, that is why the stock is -- >> turnaround, that is why the stock is down. we will get more from the

bloomberg contributing editor and author of the "facebook effect," ava kirkpatrick. >> it was not an internet business really. if sony is going to thrive, they have to drive in spontaneity facebook,twitter and and however good playstation is that he created and built into a multibillion-dollar franchise, he did not really have the connection to the internet, but it is not give him the time of seven -- the kind of savvy that he really needs. and analyst pointed out that the prophet as sony is higher than the group operating profit. we don't even know about the insurance because it is very domestically focused. when you think of sony, you think consumer electronics. where is the value in the company's consumer electronics business? it is worthis that zero. >> the value have to be found in innovation we have not seen yet. i am afraid you do not feel a lot of value in it right now.

tv's are a commodity. 4-d is going to be cool but how many people are going to feel like they're going to rush out and buy that, and how quickly will the price low anyway? push to cuteb's 5000 jobs. ave about should ssav 230 million dollars, which is necessary after the film unit posted a loss. the white house -- and the box office flop of "white house is not allit bad. the company is betting on a sequel to the "amazing spiderman." another company feeling the pinch -- credit suisse. in addition to a weak performance at the investment bank, results were hurt by a $572 million cost for legal fees for the ongoing mortgage litigation and there is a tax dispute as well here in the u.s. the ceo discusses where the

company stands right now. made good we have progress on that front. we have gotten a number of issues resolved. we do have one of the larger issues, the fha issue, but we do for like we obviously have taken significant reserves over the course of the last couple of years and we have made good progress in working through them, and also i think our profile in this area is obviously a lot smaller than a number of other banks. so it is hard to say. it is difficult to say that to the end, but i do think we're making good progress in working through. >> all right, here is on the you can snack on -- kellogg reported higher profits. as for the core cereal business, sales declined about 3%, and that brings us to our "lm" top five, the best-selling kellogg cereals for 2013. ♪

>> way before tony the tiger, kellogg's was founded at the toasted corn flake company. year was 1906. the island of enchantment has become the island of debt. how did puerto rico get

downgraded to junk? we will tell you. see how onel company is not letting a mountain stand in its way, and if that is not high enough for you, watch this go pro footage of a world record in october 2012. this they freefall for more than earth's above the surface. ♪ >> is 26 minutes that the hour, which means bloomberg is on the art -- on the markets. stocks are rising today, bonds are falling for a third day in a row, yield coming up a little bit, this after a laborer report shows that jobless claims dropped a little bit more than forecast on a weekly basis.

the three main benchmark indices is trading higher at this hour. a couple of individual stocks we're watching for you, the biggest laggard, chesapeake after posting a $1 million funding gap. ♪

>> this is "lunch money," on bloomberg television, and we are streaming live on bloomberg.com, your tablet, and your phone. i am adam johnson. today's moving pictures now where the video is the story. which city has the worst air pollution? new delhi or beijing. airborne articles that hazardous levels recently. the biggest culprit? it is omissions and burning garbage. after traveling more than 139 miles, the olympic torch finally arriving in sochi. thank you have had long trips? it travel by plane, train, car,

even in a reindeer sleigh. at one point, it found itself in space on a trip to the international space station. david beckham is getting a team of his own. he retired bidders -- the retired british soccer star bought the miami pro franchise. the team does not exist yet, and still no word on where it is going to play, but beckham is not concerned. >> it is hard to put a time on it, but we want the team in the league when it is the right time for the team, when it is the right time. >> beckham had a clause in his losrasct with the mls angeles galaxy allowing him to buy an expansion team. it cost of about $25 million. congratulations, sir. the island of enchantment is looking a lot more like the island of death. 70 billion with a 15% unemployment rate and eight year reception. economics editor michael mckee is digging into puerto rico's and economy all day on bloomberg

television, trying to get to the bottom of what is happening and what is at risk. >> the problem is this could seriously damage the bond market because almost two thirds of bond funds own puerto rico debt and a lot of people do not know it is in there. the hedge funds can take advantage of it but the average will not be able to, so they could be facing a possibility having a lot of their portfolio default. >> mike, what the policymakers do to help puerto rico? obviously, one of the comparisons between puerto rico and greece is the value of the currency. >> there is not a lot of good options except rate for time and take steps to fundamentally improve the economy, which the current administration has been doing. they have raised taxes significantly, they are trying to stimulate growth and cut spending as much as they possibly can, which of course is always politically difficult. bringing down their deficits, while at the same time hoping that the market hangs in there for them. >> is congress therir imf?

forn theory, you could ask a bailout. detroit went bankrupt and congress did not do anything for alabamafferson county, -- so how would you do that politically? >> in what possible scenario could a puerto rico be like greece? >> the problem is many of the muni bond portfolios, headquartered in virginia, for example, that is supposed to be unsaturated and virginia bonds, 31% is in puerto rican bonds. if those default, those muni market started to fall, we have a row problem. >> you and i have been talking about this for at least five years. are we near where mom-and-pop watching the show who have a aa tax-free portfolio need to start working about this -- need to start to worry about this? >> yes, we need to worry about this. >> how did puerto rico even get

to this point? >> this is a story and part of easy money back in 1947, post world war ii. operation bootstrap gave taxes than it is to companies that would locate in order ago. in 1976, there was another tax companies towed repatriate earnings tax-free. manufacturing flooded into puerto rico, particularly companies like pharma. 16 of the top 20 drugs in the u.s. were made in puerto rico. that let the government go on a big spending binge. they kept increasing the size of the government sector, hired more people, spend want of a structure, and to do all that, they borrowed. and we started to see the economy go downhill, some of the tax breaks were taken away, some companies moved out, and they cannot pay their bills so they borrowed again. they continue to borrow and borrow and borrow until they got to this rather huge debt pile that they have right now. moved awaysinesses

and drug manufacturers started to close down businesses. so the country is now at a point where people are saying -- with interest rates where they are, can they continue to pay their debt? because it is very hard tfor them to go to market and continue to borrow. >> puerto rican governor was on "market makers." >> what john paulson is seeing they areago, what seeing in puerto rico that they are investing so much money down there, there is something to worry, people like paulson, amgen or abbot or ge or j&j or general electric, what they are doing, why they are expanding their presence in puerto rico, it is just an example of why it is really happening down there. and doesn't invest there, it

shows the world but that is the place to go right now. that you have to take a look at puerto rico in a more conference of way to see the opportunities that the world can have down there in puerto rico. as part of the united states offered to the world. >> for more of bloomberg's coverage of puerto rico's economic woes, you can go online at bloomberg.com/tv, or visit our award-winning ipad app, btv+ . there is no mountain high enough for this ceo. we will discuss his business coming up next. and a donor prince of wall street. we will introduce you coming up. ♪

>> this is "lunch money," on bloomberg television, and we are streaming live on bloomberg.com, your tablet, and your phone. we are everywhere you are. i am adam johnson. we kick off our new biweekly series of small to big. about ceo's that it had to clear some big hurdles. adrian is a ceo of a company that takes adventures of the most dangerous mountains in the world. lpenglow take them all the way to the summit of their dreams whether that is any others.or we go to a place where nature and the mountains to really are in control. it is very powerful and there is a lesson for everyone to learn out there. low exhibitionsg

after climbing for myself, and for the first four or five exhibitions, every that i was with every exhibitions, so i wasn't traveling full-time. the hard part was learning to let go and allow other guides, to let them run trips. there is obviously risk involved in what we are doing, and potentially an accident could happen in the mountain. in 2011, we were tempted -- we were attempting to go to the summit of mount everest. the weather completely turned. avalanched a large ice fall collapse i completely shut down the route and we were forced to cancel with the group. we have had challenges. they can be hard to sleep, it can be hard to lead when you just do not know what is going on with your team. going through that and just willing to give a little time, give trust is hard but it is a process that i learned a lot

about. as we allow other people to begin running our trips, it has really allowed us to offer trips to so many more people. when i began the company, i ran around six or seven international exhibitions. in 2014, we expect somewhere around 40 expeditions, and 300 clients, all on a path to potentially go to a much bigger future. in the near >> will of another small to big in two weeks. we will look at the biggest online menu for -- magazine publisher you have probably never heard of. it is called issue. ceo joel her again without about 80 -- to go from a few users to a few million. dunkin donuts beats estimate details. finally, it is called a vertical marathon. this is a race up 1500 stairs of the empire state building.

11 minutes and 57 seconds. it was her friend win and that is a record in the women's division. the women -- the winner of the men's, he raced up 86 floors in 10 minutes, six seconds. ♪

at big b for dunkin' donuts. the donut chain beat fourth- quarter estimates. the donut maker is expanding its footprint on the east coast with 22 new stores. meanwhile, just one it's good enough for another donut shop owner. he opened one back in 1964 long before he realized he would run a wall street brokerage firm and sell that for nearly a billion dollars. he has held onto his donut shop. our own matt abelson dropped in to find out why. >> some of the people give very

wealthy on wall street, spend the rest of their days on small islands in the sun. iners find whole towns vermont or the middle of america. this would have a donut shop opened 24 hours a day. turns --, it >> i could actually come back and know my rent was paid. bought000, merrill lynch the company for over $900 million. more than a decade later, he had the pub. one reality of owning a donut shop is that donuts have fallen out of favor in the sense of the health craze. >> first of all, it lubricates everything. public believe, they're actually pretty healthy. >> do you know that donuts were sold as a nutritious food for u.s. soldiers in world war ii? >> i would think so.

why do you think we won the war? >> that is an interesting thing. you have got some formidable competition. dunkin' donuts opened one avenue away. dunkin' donuts right here. one on 7th avenue, they did not make it. we had won four doors down on 14th street, and they did not make it. it was david versus goliath, and david one. >> when i think of competition, i think of one of the biggest phenomenon like the american dormant -- to the history. ineverybody wants to stand line at five in the morning and spend for five dollars for donuts. they are smarter than that. every once in a while i sit down with a box, a couple of glasses of milk. >> how many donuts are we talking? ori certainly could do six eight at one sitting, but just the insides. >> do you mean the donut holes?

>> for instance, if it is a jelly donut, you break it in half and you meet some of the donut along with the jelly and throw away the remainder do not have donut -- that did not have jelly. >> he really do that? >> sure. it is very dignified. inis one of the few things life that give zero present -- rope pleasure in it is not expensive. pleasure is what life is should be all about. >> a donut pub turns 50 years old this year, and he said down with erik schatzker and stephanie ruhle, sharing some lessons learned from both the donut business. in the early and i 1960's opened its doors around the city, i was not smart enough to know the word franchise, so we just built them, sold them as quickly as we could, and we kept 1968, i went in the

army reserves, and my brother went back to wall street, and started a very tiny firm. when i came out, i decided i would like to follow my brother's footsteps, so i sold off three of the stores, kept one just in case wall street did not work out, and i went to herzog and was there until 2000 -- >> wall street did work out. >> it is a lucky thing to have and you know you never know. >> between trading stock and making donuts, what makes you happier? >> i love them both. business is business whether it is donuts or wall street. >> really? to run aned how brokerage firm by owning a donut shop. it is clients, service, employees. you want people to come back for repeat business, and if you run a donut shop well, you can run a business well. it is just size difference. ,> what is the secret, but azzy

to make a good donut? >> good question. quality product -- >> you get out what you put in. >> and more importantly, dunki'' donuts are machine donuts. these are still handmade donuts. i think there is a big difference -- machine versus handmade. on 14thon, you are street between seventh and eight, nightclub capitals, you are in between the west village rents are skyhigh. do you ever think of i want to sell out? >> we're here to service our clients and put a smile on their face. >>, on, now. >> are there any one else's donuts who you admire? >> no. in the brokerage business, i admired many, but in the donut business, no. >> you do this for love, compassion, not money. >> no, not anymore. >> you cannot get rich owning a single donut shop.

>> why not open more right now? >> if you want to give this up and work full-time, you need a full-time person to do it, you would be terrific, either one of you guys. let's go. >> i decided to down a donut, you would be great at it, stephanie. >> those donuts good. today's mystery meat, girl on the loose, but do not worry, not real. zookeepers in tokyo are staging an emergency drill in k's a a gorilla in case escapes. only in japan. ♪

>> it is 56 past the hour which means bloomberg television is on the markets. i am olivia sterns. let's get you caught up on the markets. the dow is now on track to post the biggest gain of 2014, up more than 150 points at the moment. this comes after an unexpected drop in weekly jobless cla

ims. they fell a little more than forecast for the past week. let's take a look at individual movers today. branscum is dunkin a parent company of dunkin' donuts and bask in robbins. the company raising its 21%,erly dividend by shares up almost 3% on the news was up on the downs -- downside, general motors reporting third- quarter it -- fourth quarter aaron mize came in below quarter -- fourth earnings came in below "bottom line estimates -- today's report mexico the company posing new ceo mary barra has her work cut out for her. shares of pandora reporting better than estimated fourth- quarter earnings, but it is what i had towns and its current employer forecasts fell short of

what analysts wanted to see. while pandora continues to customers, the costs are rising, particularly royal payments. in the u.s., on let's look at what is going on in the rest of the world. starting in europe, the european central bank keeping interest rates unchanged today. ecb chief mario draghi signaling that the bank was ready to wait until march before taking any rate action. the euro strengthening the most in two weeks against the dollar on the back of that news. emerging market currencies are also rising or strengthening us it's a against the dollar went turkeys restaurant thing by more than 1%. for more, let's get out to adam johnson. >> so what is really happening with the emerging markets? time for a little insight and action. let me show you something, all right? two bad apples. argentina and venezuela. if you look at january bond returns, the sovereign bonds of argentina were down 11.8%.

that is painful. in venezuela, they're down about 8.7%. here is the incredible thing, if you look at the sovereign debt of all of the other emerging markets and average them together, the rest of the world was up about half a percent. in other words, too bad apples, argentina and that is where level drag everything down. especially given what happened for emerging markets struck -- stocks coming here is the proxy for emerging market stock markets, and a look at what happened in the month of january. i mean it was absolutely painful. nothing was unscathed. in the eem, they are not even in the top 10. i mean, this is china, south korea, it is russia, etc. bender., a real mind if you really do want to be in emerging markets, might bonds actually be the place to go? if you want the exposure, can you actually find something safely, and actually we found the one where we think you can,

we found an etf rod to us by powershares. it is up here today. here you have and emerging- market vehicle that is doing better than the s&p 500, up .25%. it pays a dividend up 4.7%. actually are places to go in the emerging markets. >> all right, adam johnson with his two bad apples, thank you so much. we are back on the market than 30 minutes. in the meantime, "bloomberg west" is up next. ♪

>> live from pier 3 in san francisco, welcome to "bloomberg west." i am emily chang. innovation, and the future of business. twitter's shares are having their worst day ever, down as much as 24%. a racing $8 billion -- erasing $8 billion. slowing growth in users and