>> welcome to "lunch money," where we tie together the best stories, interview, and business news. take a look at the menu today. what's the big deal with what's app? how about facebook's $19 billion purchase? if a tree falls in the woods, will google see it? in nation, the gap answers the call for higher wages. is walmart next? in startup, the biggest online publisher you have never heard of. look at the original g.i. joe. stay with the times. let's kick it off with what everyone is talking about.

once again, it is ukraine. the cease-fire declared last night failed to hold. the independent square was covered in fire and smoke. the list of casualties is growing long and the international call for action is growing louder. >> we continue to stress to the ukrainian government, they have the primary responsibility to prevent the kind of terrible violence we have seen. to withdraw riot police, to work with the opposition. >> it is the regime that created this, by undertaking positions that went against the nature and aspirations of ukraine. for that reason, we hope the government responsible. >> it will be necessary to discuss specific sanctions to

show it is important the political process start again. we cannot accept what is happening. >> those who committed violent deeds, those getting ready to commit more, must know there will be sanctions. there will be a meeting of foreign affairs in europe and the question of sanctions and their degree and the targeting, this question will be asked. >> those ministers from germany, france, poland, met with president viktor yanukovych for six hours. no outcome. the u.k. also echoing the need for sanctions but the threat has not made much of an impact. ukraine forces have been authorized to use live ammo according to a statement. police have been using batons, teargas, and rubber bullets against the crowds. now they can use combat weapons to protect themselves and civilians as well as recover hostages.

dozens of police are being held by opposition fighters. one officer was stabbed and others are being held in a building that serves as a makeshift headquarters. the opposition leader denied officers were taken captive. this is not just key. a western region declared its independence from the country. protesters attacked and ransacked several government buildings overnight. they set fire to the command of interior ministry troops. it is known for its steadfast opposition of viktor yanukovych. in the region just north, the main city also saw its share of violence as protesters marched through the streets with shields and clubs. they marched through windows and government buildings, including the police headquarters. here it is. [yelling]

>> that brings us to the police station. after an hour-long standoff, police surrounded the building. -- they surrendered the building. they forced him out of his office and into the streets after he refused to resign. he was handcuffed to a pole at the local square. the group again demanded he step down, trying to force him to sign a letter of resignation. it is a different story in the east half of the country. yanukovych has strong support in those sections. did the planned -- they depend

on russian gas supplies. this gets to the crux of why ukraine matters. alix steel can tell you about it in 46 seconds. >> responsible for transporting 25% of natural gas from russia to europe. ukrainians make a big chunk of change. it is about $3 billion. it gets 70% of its own natural gas from russia despite the fact it is ranked 29th in the world in terms of its own reserves. that puts a very intense debt burden on the country. it now owes russia about $3 billion. the state energy company missed the recent deadline to repay that. part of that financing deal from russia was cutting the gas price in the ukraine by 1/3. the ukraine is very necessary for russia but it really is held hostage in some ways by natural gas. >> we want to point out it is not just energy markets. bonds and currencies are suffering from the crisis.

russia's ruble barely rebounded from what was an all-time low yesterday. the polish 10 year bond, little changed today after climbing the most in a week. facebook puts big money on the table for what's app. we will discuss why. plus, elon musk in an exclusive interview. his new factory and car and what exactly he has been discussing with apple. this is all coming up on "lunch money." don't go anywhere. ♪

>> welcome to "lumch money." we are streaming live on bloomberg.com, your tablet, and your smart phone. i am adam johnson. facebook is buying the instant message service, what's app. the price tag, $19 billion. >> that is a lot of money.

>> no question. it is the largest acquisition of a venture capital company. >> $19 billion is a lot of money. that is more than the gdp of iceland, jamaica, bermuda, and fiji combined. this is all for an instant messaging service that has 450 million users. who is counting? >> we believe it will be incredibly valuable. our focus will remain on connecting more people in increasing engagement. for the long-term, we look forward to see what people can do. >> mark zuckerberg explaining the deal on a call last night. one billion users is not bad. >> a potential competitor they just eliminated. it was a very expensive deal, but it reduces competition to

attention on facebook. especially in newer markets. facebook has not really penetrated to that extent. >> it is very popular. >> it is the nature of the economy and the change pace we are in. the amount of money you can make over the long-term is spectacular. it is not necessarily important to even look at how much what's app itself will make. it is a channel and a way of keeping in front, which all of the people on the planet, i want to say this is a group of users zuckerberg wants. everybody. >> it says a lot about mark zuckerberg. >> the sheer aggressiveness he continues to show as a leader

and as a determined leader, to keep your service in front at all costs with the long-term vision he is known for, that i have always talked about. this shows he is willing to pay whatever it takes to keep on the cutting edge of what will be important down the road. despite the shocking price everyone reacted to, it makes more and more sense when you think about it. >> not everyone is on board. it is said it is hard to justify the price tag, so he actually downgraded facebook. >> you have to account for the fact that there is an 8% or 9% dilution. if you are not replacing that with some amount of cash, how can you not change your target? i was in the middle of raising my expectations for their advertising revenues, which is why my target went up. given where i was, six dollars

in a price target that will not be a buy recommendation, so i had to downgrade. >> facebook was paying $21 per user. $5.50 for instagram and twitter is value that $120 per user. by some measures, it is paying $42 per user. that is a lot. next up, elon musk says he knows how to do driverless cars better than anyone, maybe even better than google. and for more than twice the price of a model s, you can buy a vintage spiderman comic book. we will tell you about all of these valuable collectibles going up for auction. for the syracuse basketball team, boston college is the number one ranked, 62-59 in overtime. we had to watch this thing again. the loss in syracuse's perfect season. perfect season fans, do not spare. the wichita state shockers are

still undefeated, 28-0. ♪

>> this is "lunch money" on bloomberg television. we are also streaming live. we start with walmart. earnings are not so good. it barely met lower guidance and guided lower for next quarter. blame the struggling consumer. julie hyman breaks down all the numbers for us. >> it met its lower forecast but the forecast is below estimates. the problems at walmart, we have

been talking about them. we know about most of them. the economy is weak. snap benefits got cut. 20% of costs related to various tax and restructuring issues in brazil and china. >> going into this new role. >> a lot of headwinds. what do you do about it? they're trying to remain aggressive on price. they are offering different packaging on some items, a smaller package, a smaller amount of stuff, so someone does not have to spend as much and can buy a little bit less. one of the other interesting things walmart is doing is opening smaller formats. you think of a walmart. it is a huge store. except they are now planning to open 270-300 more of their smaller stores as well.

walmart express, a big convenience store. there are only 20 of those so far. >> struggling over at walmart. very different story at tesla. elon musk announcing quarter results that beat analyst estimates. tesla is gearing up for stronger model sincreasing production. also building a massive battery plant. betty liu asked the company's founder about this gigafactory. >> it deserves his own call. we will do that call and answer questions as much as we can next week. it is likely panasonic would be part of it. that is not 100% confirmed. since they are our main supplier right now, that seems like a good likelihood. we could pay for the factory in

more than three years -- from earnings if we allow the time to extend beyond three years. if we want the factory down in three years, we would probably have to raise capital. >> tesla's new model, the battery-powered suv. >> the hardest part about it is achieving great form and great functionality. it is easy to give up on one of those two. it is hard to make an suv in particular that is beautiful and yet incredibly functional at the same time. >> what about the reports he has been talking with apple? >> we had conversations with apple. confirm whether those revolve around any cognac was it in. -- any kind of acquisition. >> are you for sale if there is a right price?

>> that is very unlikely. we stay focused on creating a compelling mass-market electric car. i would be very concerned in any kind of acquisition scenario, whoever it is, that we become distracted from that task, which has always been the driving goal of tesla. >> will we ever see a driverless tesla? >> tesla has built up a significant expertise in autonomous driving. i would not necessarily use the word "driverless cars," but i would use autopilot. like an aircraft has. you still expect someone to be able to pilot the plane, but it improves precision and safety and reduces pilot workload and that kind of thing. that is the way we view autopilot in a car.

at this point, we have probably got the strongest autonomous driving engineering team of any car company. maybe any company. we are continuing to build on that expertise. we do expect to be the first company to market with significant autonomous driving function in the vehicles. >> let's talk about google developing a lot more than just driverless cars. it is using its big data to save the rain forest. it is unveiling a new mapping tool that may help environment groups track deforestation. it might help avoid a pr disaster. megan hughes has the details.

>> almost 900,000 square miles of forest have been cleared since 2000. for environmentalists and corporations alike, it has been difficult to track the devastation. google is hoping to change all of that. google put its computing power behind global forest watch, the first real-time global deforestation map. >> it is big data that requires big analysis and it represents an information gap. no one has ever been able to. where would you go and find it out? >> nigel has been working with google and 40 other organizations. he explains the map will update every month using data from nasa's satellite, processed in google's cloud. >> you can now see a month by month where forests are being cleared. >> greenpeace targeted nestle in

2010 for endangering orangutans. a youtube video graphically showed someone biting an orangutan finger instead of a kit kat bar. pledges have been made, promising better sourcing. just last month, the world's largest palm oil trader followed suit. even girl scout cookies will only use palm oil certified as sustainable. >> it is relatively easy to say we are going to make sure there is no more deforestation. it is much harder to actually check it is the case and ensure it is happening, all the way back up to supply chain. >> the map is overlaid with palm oil and logging licenses for each company, you can see which ones are in charge. >> you can see in real time whether or not that supplier is doing what they promised. >> it is almost like a nanny cam. >> a nanny cam for forests. google turbocharged the entire system.

>> it would have taken 300 years on a single computer to make that forest global map. because we ran on 10,000 computers in parallel on the google cloud, you had the result in a couple of days. >> now, if a tree falls in the forest, everyone hears it. >> megan hughes, bloomberg, washington. >> being eco-friendly and conscientious. how this salad chain is making a difference, coming up. plus, corporate america is taking a lead on minimum wage. that is next. ♪

>> this is "lunch money." i am adam johnson. today's moving pictures where the video is the story. protests turned violent last night. five people were killed in clashes. the government blames an opposition leader for inciting violence. demonstrators in thailand targeted businesses tied to the prime minister. trying to put pressure on her to resign.

they have lost a social media campaign targeting business is also connected to the prime minister's family. in egypt, the government has put a group of journalists on trial. reporters for al jazeera and they are facing charges. egypt says they damaged the country's image by airing false news. the journalists are also accused of backing the muslim brotherhood. today, the minimum wage debate is reignited. gap told u.s. employees wednesday were told they can expect nine dollars in the minimum hourly rate. next year, the number will increase by a dollar. this includes employees at all sister stores. the move could cost as many as 500,000 jobs. it is why companies have expressed concern. as for walmart, the nation's private employer, it is assessing it. an increase would hike payroll

costs but it would also put more money in the pockets of some of its customers. president obama for his part praise the gap's decision in a white house statement. he wrote, in my state of the union address, i asked more businesses to do what they can to raise employees wages. today, i applaud the gap for announcing the intent to raise wages for employees beginning this year, a decision that will benefit 65,000 workers in the u.s.. jack lew spoke on cnn this morning and this is what he had to say about the minimum wage debate. >> if you look at the cbo report, it shows it would take almost one million people out of poverty. one thing about american people generally, if they're doing well, they don't begrudge other people to do well. it is not in our power to force congress to act, we will make a case for it and have the american people make a case for it. >> how small companies face the challenges, the ceo tells us how he wins over online subscribers.

g.i. joe action figure has been around for 15 years. we will talk about how he has changed over the decades and how he has not changed. ♪

>> this is "lunch money." i am adam johnson. today in start up, we are looking at small companies growing big. we will start with box, the online filesharing storing service that has about 20 million users spread out over 180,000 businesses.

here's the ceo with jon erlichman. >> we are trying to build a long-term company and that is the path we are on, staying independent. >> your focus on business. dropbox is another company in the area. that focuses on the consumer. you long ago decided that is not your market. i still get confused myself with the fact we have the two fast-growing companies. in terms of the competition between your businesses, i go back to the ipo question. >> i would say we think about that a lot less than people watching the industry think about it. it is not a huge priority for us to be in the financial market race. we think it is more important we build a robust business. >> comcast just acquired time warner cable. some people said this is in a

better way for comcast. what has not changed is the people who feel like, ugh, cable. i'm curious what you think about the future of television? >> i do not know. it is interesting. the internet instinct within me says everything should move online. and at the same time, studios and production companies are making better content than before. that is exactly the right response. you need to ensure you have a scarce asset and resource nobody else has. it doesn't seem like that is changing anytime soon. >> the start up, they want to change the way you eat. this is an eco-friendly

sustainable restaurant chain. an investor has invested 22 may -- $22 million through his venture firm. there is the cofounder. >> we have a big focus on healthy and delicious food. if you eat healthy, you want it to taste good. that keeps you coming back. >> we invest in great entrepreneurs with big ideas that disrupt big industries. the rest run industry is ripe for disruption. >> competitive, you could argue. >> it is a competitive business. if you ask me 25 years ago, you could build pretty significant companies and you have a differentiated product. >> a salad is a salad. what is a differentiator? is it freshness, is it execution? is it planning, the music? >> it has to be all those things.

we are doing scratch cooking and fast food. the quality of the product, where we are sourcing it from convoy to use technology as part of the experience. >> what did you learn from chopotle? >> we learned a lot. they do a great job with their products and having them be consistent. >> i want to jump in the technology side as a consumer of the product. i was telling the guys we order it in our office every monday. >> thank you for your support. >> was that a shameless plug? >> no, it was for real. these guys have thought about the experience in the way most people in the restaurant business have not. i starts with quality ingredients but ends with the consumer. that matters a lot. >> they launched the mobile app and soon you readable to order on it. that will be one of the technologies that does disrupt the restaurant. there is no reason to stand in line when you know what you want already.

>> on thursdays, we have been featuring a series about how small companies are facing down big problems. today, we're looking at a little company growing its online magazine business and it wants to become the youtube of print publications. >> the issue where the world's is leading public platform -- globally to digitally read newspaper catalogs, magazines, pom-pom magazines, a magazine dedicated to women. one of the big challenges we have had is, how do we make sure the world knows about it? it is not something you could immediately overcome with pr. it is about making sure we are doing a number of things to facilitate ways to share it better. one of the things we recently

introduced, readers can go create stacks of contents they like. my kids are gluten-free. i have this great stack of recipes. i can share and watch and see who is following the content and who else is reading it. when you find people that share your same passions and interests, it makes the world a smaller place. we are now north of 80 million people coming to read issue content every month. we expect over the next two or three years hundreds of millions of people. we do not have apps yet. but watch the space. >> i am julie hyman with -- >> this is a company that makes robotic furniture. small in size but big in business. we will take a look at g.i. joe's 50 years on earth. more american heroes, the

vintage man of steel and comic books coming up for auction. all of that coming up in pop. ♪

>> it is all about the classics. lego setting sales records and now it has a hit movie. what makes this 82-year-old brand so hot? the lego president explained to matt miller and trish regan. >> when i was a kid, it was mainly lego bricks you're playing with.

today, the story dimension takes over a bigger deal. then we also make the experience blends very well with the digital experience. there are games out there. there is a movie out there. >> what does that mean? >> the movie for us is a fantastic celebration. it is about creativity and imagination. that is why we had the movie. it is very relevant. >> it seems like it is more than just a marketing tool and a giant commercial for lego building blocks. it has turned into its own thing. lego has a story. it must be almost as important as lego as a toy. >> i think it is. the story, there is a lot of nostalgia. it brings smiles to people's faces at all ages. it is not a kids' movie. it is equally appealing to adults. >> i love legos.

another classic, g.i. joe just turned 50. still going strong. stephanie ruhle has two boys and decided to have some fun and ask what makes g.i. joe so resilient. >> in the early days, it did not have a name. it was a man of action a boy could imprint any personality on there. it was easy to see why g.i. joe was so successful in 1964. every boy had a family member who served. >> there was a point in history where was not so popular to talk about the military. joe had to take a branding turn. adventure joe, talk about him. >> the 1970's was a very successful repositioning of g.i. joe. by the end of the 60's, hasbro the new it had to change.

the adventure team was equally as successful but it had tons of cool new innovative features like lifelike hair and kung fu grip. these things have become cultural touchstones. so many shows, guys who quoted kung fu grip, these are fun but are equally important in showcasing innovation and freshness. >> where is the innovation in g.i. joe right now? when i think of innovative when i think of innovative products, i think transformers, where is joe innovating? >> our g.i. joe line is the brand-new line where we showcase the innovation of g.i. joe. we're taking an iconic library. and we are delivering them in cool new constructible forms. this is the line we think has

buzz and excitement. it is a new way to express that core intellectual property. we will have new versions come out in toys r us. >> another american classic is superman. especially's vintage comic books. these things go for big bucks. greg stopped by surveillance to explain why. >> nostalgia is on a rebound. the resurgence of nostalgia bringing back muscle cars and tv shows and now the baby boomers at their peak earning years, they have kids out of college and are looking back to things that interested them when they were younger and are going back to the hobbies they had been. they are pushing the best item prices way up. >> here are some comic books, important here. superman, all the major movie characters, spiderman, are these museum quality? is this something the smithsonian would bid on? >> i do not know.

they would love one of the viewers to bid on it and donate to the smithsonian. >> just to get a price perspective, how much? >> the original comic book art is from 1939 from spiderman. we estimate that will sell for $200,000. >> the ones we're looking at, that is $600,000 worth of comic book right there? >> so i get these and i pay off my mortgage. >> the three comic books, at least half a million. >> is there an increase from years ago? >> a huge increase, especially from the top end. people have been putting a lot of pressure on the market for things that do not come along very often. the best items, they do not go -- the prices have gone straight up. >> what defines quality in a comic book?

rated fromoks are zero to 10. they are encased in these plastic holders that are hermetically sealed. >> how could you bring -- he sold babe ruth to the new york yankees. how about this? a 1918 red sox chicago cubs world series. what is this jewel worth? >> thousands of dollars. >> thank you so much. it will look great above the mantel. >> from the auction house to the grocery store, action heroes are everywhere. even vanilla ice. today's mystery meat. >> go, ninja, go, ninja, go. ♪

>> word to your mother. ♪

>> it is 56 past the hour. bloomberg television is on the markets. i am matt miller. let's get you caught up on where the markets closed.

take a look at the gains across the board. s&p 500 at a new record. almost 1840. the dow jones adding almost 100 points, 16,133. the nasdaq up more than two thirds of one percent at 40 to 67. it is time for this week's volatility report. stocks are trading at or near all-time highs. investors still have an appetite for insurance meaning the vix is not falling as it often does when stocks are on the rise. what could this tell us about where the market may be heading from here? joining me now is mark sebastian, director of trading and investment at swan welker advisor's. what do you make of the vix position? does this mean people expect a fall or they are being more cautious? >> they are definitely being more cautious. yesterday, we are down 12 points. the vix gains 1.6 points.

today we are back up 11 and begin away less than half of that on the vix. we are near all-time highs. the vix is a full two points higher. when we see the market rally and volatility rally with it, that is almost always a sign of a near-term top. the way i am looking at the market right now, we may test that all-time high at 1848. i don't think we are going to break it. i think there is something very quickly coming up that is going to amount to some sort of drop. maybe that 100 day moving average that we had a couple of weeks ago. >> so you don't recommend selling volatility here. you want to buy. >> if i was looking at the market, the types of trades i like right now are things like one by two call spreads, things where i am taking in credit but i am not short on the downside. i would not be a put seller here. i might sell calls. trades that may be make sense are buying and out of the money

put, selling and out of the money call to hedge out a long position. the disclosure, that is type of position we have at swan wealth. that is the type of trade i would be putting out right now. >> we like full disclosure. let me ask you about the situation in ukraine. does that kind of thing also regardlesstures up of their relationship to the s&p index? n outsides kind of a event. that can hold the vix higher. i don't think that is happening right here. we take the elevator down and the stairs up. on this last selloff, we took the elevator down and the elevator back up. i am wondering whether we sold off so fast that the elevator bounced off the bottom and flew us right back up to where we were and we are just getting ready to let gravity take its course. the way the market is shaping up

right now, i do not like what i am looking at. the vix is still under 15, relatively speaking to history, insurance prices are not that expensive. if i was straight out long, i would be looking to hedge right here via s&p 500 puts or some sort of long fixed plate. >> thanks so much for joining us, mark sebastian. i am matt miller. you can catch on the markets on every hour at 26 and 56 past the hour on bloomberg television. ♪