>> welcome to lunch money where we tied together the best stories, video, and business news. i'm adam johnson. here's what we've got today. candy crush, the maker of the cap had a rough day on its first day on the stock market. and the federal reserve tells secrets. this is a bloomberg exclusive. and in motors, we will show you how the ford builds its pale selling truck, the ford f1 50. it's awesome. dining, we've got it all.

we are kicking it off with another good deal for the world social network. >> facebook making another multimillion dollar -- multibillion-dollar acquisition will stop this time, buying oculus for $2 billion. >> you heard her right. facebook, where people log on every day to share celebrity and actual news like the malaysia airlines search, facebook is trying to bring virtual reality to the mass market. trying because it doesn't actually sell anything yet. >> it's one thing to make a prototype that is in a room that cannot be moved. it is another thing to make a few hundred dollars in the mass consumer eyes market. -- in the mass market. have a number of challenges ahead, but we are getting

closer. withat was an interview brad stone of bloomberg businessweek a few you -- a few weeks ago. $2 billion for a company whose product is still in development. paid $19 facebook just billion for a global messaging company whatsapp. even that deal was question because of the number attached to it, 19 giants -- 19 times projected sales. but it has one billion users worldwide. you can see why facebook would like whatsapp, but why would it clunky goggle? >> virtual will be the platform of the future. they are willing to that $2 billion and a lot more in shares -- $2 billion, 400 million in cash and a lot more in shares betting on that future.

>> that was the take from cory johnson. here is what the experts are saying. >> to medication is obviously a big, important area surrounding the whatsapp. it's a very exciting place to be. >> this is hardly competitive. like usual, when facebook spends what seems like a huge amount of money, it's probably because others were spending. >> facebook has always made a lot of gains. i think they feel they can win with this purchase even if the long-term visual reality does not pan out as long as they have a better platform for games as a result of buying oculus. the long-term vision is to create a new platform that could, in effect, compete with the facebook as we know it today as a platform for future interaction. >> it is a long bet. you got to look at this over a long-term horizon.

there will be more experiences that are virtual. around for 25n years, the whole idea of virtual as the next big thing. and it has just never happened. i think that is what cracked it here. >> how far virtual reality has come. as we told you earlier, bloomberg businessweek paid a visit to oculus headquarters. brad found. >> right now, i'm wearing a popular virtual reality headset. i'm flying off into space with asteroids around me. i now see my enemy. i'm firing my machine gun. this is crazy. >> the maker of the oculus headset is making a big promise that virtual reality will finally feel real. virtual reality were perfect and we could experience of the full body language, full presence, feeling like we are in the same state, like the matrix except everyone realizes they are in it. >> he created this in his

parents garage and started showing it in 2012. that was only the beginning. >> now you are the cofounder of the company that just earned 75 million dollars earning toward a commercial product and you get to live your passion. >> it's pretty great. it is great to work with a lot of people that are a lot smarter and what they do. >> one of them is gaming entrepreneur brendan every day. >> i was always skeptical because i grew up in the 80's of 90's and there was a lot expectation, but the technology was not ready. now it luckily is there finally. this really has the potential to change the world and that i find, works. >> when the player leans forward in the headset, his virtual character leans forward as well and take the digital world to a new perspective. >> we are finally able to deliver on the promise of a synthetic environment that is

werly photorealistic, which could never do before. andt is very seamless, unlike other systems, i'm not feeling any nausea right now. it's almost like a nest. hashe buzz around it brought up competition. sony has launched project morpheus. executives at oculus are not worried. >> i think people will jump in because we have now proven there is a market for vr. i hope that they deliver something great and it makes vr that much bigger of an industry. >> but both companies have many hurdles ahead of them. it's not clear whether the biggest gaming software developers will ever embrace virtual technology. i will buy one when it's ready and not a second before that. >> is that in 2014? >> we will see. >> you heard the ceo talking to

brad stone about sony. we went back in the raw footage and found a little bit something more. >> i'm a huge sony fan. what they have done on playstation, hope they take it seriously and are ready to do what we have done. >> i would come by you. >> not for sale. well it looks like anyone is for sale at the price is right. is the price right for king digital? maker ofy popular kenny crush goes public today in its ipo. and later, general motors message, hitting the web again to try to reassure customers. -- a dramaticanic video to show you. the fifth floor of an apartment complex when this fire broke out. incredible images. the blaze was rolling in intensity when he swung himself over the ledge and dropped down to the next floor. he was ready to jump just as firefighters reached him. after some maneuvering, he scrambled onto a ladder and that

was just moments before the upper floor collapsed. absolutely incredible. ♪

>> this is "lunch money" on bloomberg television and we are also streaming live on your tabletm and and smartphone. and adam johnson. king digital is the company behind the popular mobile game kenny crush made it trading debut today. it was priced at $22 $.50. that was the midpoint of the range. stocks fell 10% right out of the gate.

>> by focusing on the long-term, we create shareholder value. i think we are in an incredibly strong position. is the place where you need to be because games are the number one category in terms of apps and mobile. with more than 70% of time spent oftablets on games and 90% revenue generated through games. we have been around for 11 years. we found out in april, 2011 when we launched our first game on social networks that if you take one of the games we have developed before as a one level only game, and we proposed this game with many more levels, then it becomes a very broad deal. -- wee been in profit in

have been profiting from 11 years of work. these games cover a very wide range of different genres. when you talk about the long-term and you talk about the the portfolio, as we know, there is one that is most popular, kenny crush. it accounts for about 78% of your revenue, according to your filing. when you talk about the long-term, as you well know, people are fickle. switch from game to game. what will be the next big hit for you guys? >> it is interesting what you just said. but it is very true. grossingok at the top charts, those are the ones that really matter. those are very stable. for example, last year in 2013,

there were only three new games in the top 10 grossing charts. android, three new games. we have two of the three. facebook, only one new game, and he came in the top three. year, ity of last became a top grossing game in 11 days on android. have 2.5 games really available. and each one is a success. of picku have a sort from the other games for what you could have as the successor as -- of kenny crush echo another big hit -- as the candy crush? hand

>> the strategy is to build a portfolio. the mix of appeal of kenny crush is on emotional triggers. just the right balance of to keepion and success people playing for hours. i won't even go near this thing. i'm bad at solitaire. testd someone actually this thing. >> why is kenny crush so addictive? there are 97 million of us playing this game every day. kenny crush is the latest in a long line of games that follows the maxim, a minute learn, lifetime to master. previous games have included angry birds, tetris, even twister. it is you anhat immediate sense of the compliment. a new levelels and being added about every two weeks, total mastery of the game

is elusive. and it keeps people coming back for more. after you have used up all of your lives, kenny crush can prevent you from playing again for up to 24 hours. that lengthens the game's appeal. since you cannot binge on it and get tired after a week. but if you are speaking in code, you're probably already addicted. most games require both hands, which means you cannot do anything else. kenny crush lets you multitask. you can eat while you play. you can talk on the phone while you play. you can go to meetings and not pay attention while you play. whyof this is like -- is king digital, the makers of kenny crush, hope the games successfully to bigger prizes. the gaming industry is full of hit -- one hit wonders. you cannot live on candy for ever, so they are working on new

titles. >> will investors be as sweet on candy crush? or just say, one half wonder? ?- one cap wonder >> how can you be a machine that cranks out lots of interesting games and then there was an obvious problem with zynga with just a couple of hits. is not creative accounting, but creative game making. what you have seen from this company is they want to convince you that what they've got is, in fact, a great game making company. but when they talk about what they are doing in the ipo statement, they say they have a 180 ip's, intellectual property. not 180 games, not 180 patents. got more than one great game.

but revenues for the company went from 167 million in 2012 to 1.9 billion in 2013. this is great evidence of the fact that it really is about one game. >> we will take you inside the fed. it's our exclusive interview with the st. louis fed president james bullard coming up next. and they are the world's best-selling truck, and we will show you how they are made coming up and motors. and michelle obama wrapping up her weeklong trip to china with to canada. ae first lady a long -- to panda preserve. the first lady along with her daughters watched a panda munching on bamboo. ♪

>> this is "lunch money." we are right here on bloomberg television and also streaming live at bloomberg.com, your

tablet for my and smartphone. i'm adam johnson. james bullard is the head of the st. louis federal reserve and is known as one of the hops on the border of the central bank. he and others have called for a quicker and to the quantitative easing, or qe. today, we sat down for an interview with him for an exclusive from hong kong. here's what he had to say. >> i think there is a bit of ambiguity around the notion of when the qe program ends. what does that mean, october, december, january echo and some -- january? and sometimes in markets you see a reflection of that. the committee has not talked about that, frankly. that is getting the timing a little bit off for different people. but i want to stress this is not a calendar based policy. it's a databased policy. this is just some kind of timeline the people have in their heads, but that does not

mean that is what the committee is going to do. what we're going to do will depend on the data. >> that's an important distinction. the three, mr.... bob -- mr. chair janetss, fed yellen, said around six months after ending the bond purchases. but mr. blue -- mr. bullard said that does not necessarily mean that policy will shift. >> i don't think the policy has really changed. the committee said explicitly that while we are changing the language, we are not changing the intent of the policy. i think that message is getting through to the markets and that is the right way to look at it. economy, bullard thinks it's looking pretty good. >> it's hard to predict the u.s. economy. it can go in a lot of different directions. i do think we are set up for a good year. and in 2014, even though the data was a little bit soft in the first half, tracking estimates -- i'm sorry, the first quarter, tracking estimates for gdp are a little bit low.

in position to grow at eight percent for the remaining three quarters and probably hit eight percent for the whole year and better the year after that. forre still in great shape 2014. >> he had plenty to say about china's economic situation. you can watch the full interview on bloomberg.com/tv, or on our award-winning tablet app. new reforms ahead for the nsa. will this be more of the same? we will talk about it. of gm saying it will not happen again. how the company is fixing an ignition problem coming up and motors. and look at this. an underwater natural gas pipeline caught fire north of corpus christi. the fire burned for hours and knocked out gas service in nearby towns. the anchor of a boat may have caused the rupture. that is some kind of image out there. ♪

the hour,minutes past which means bloomberg tv is on the markets. i'm olivia sterns. we are about halfway through the trading day. let's get you caught up on where markets are trading. you can see the benches are mixed at this hour. stocks did rise as we got a better than expected report on durable goods rising more than forecast. the nasdaq is in the red by about one third of one percent. we are also watching a couple of individual stocks. america will -- american apparel is struggling. selling 51 million shares for $.60 apiece.

it will cover debt payments due next month. american apparel has not made a profit since 2009. thespeaking of retailers, company behind tommy hilfiger and calvin klein brand reporting shares are up about 5.5% right now. we will be back on the market again in 30 minutes. ♪

>> this is "lunch money" on bloomberg television and also streaming live on bloomberg.com, your tablet and your smart phone. i'm adam johnson. now to pictures were -- where it is the story. crews are working to clear the mudslide in washington. 15 people have been confirmed dead and authorities have located eight more bodies still to be recovered. more than 100 are still missing. authorities hope that number drops as they work to eliminate duplicate names. president obama is that flanders field in elgin. he says the lessons of world war i are so relevant.

syrianlights the use of chemical weapons, which were used the first time at flanders. violationsights protests in brussels. they also protested drone strikes by the u.s. the group wants european leaders to raise the issue with president obama to ring the eu meeting coming up in brussels. and in the nation today, nine months after we first learned that the u.s. had been spying on allies and close american citizens, president obama says changes are on the way. >> we think we have found a way to end the government bulk collection of telephone metadata and still provide a mechanism to protect the united states and track those terrorists who are calling in to the united states to commit acts of terror. >> now you've got my attention. what sort of changes does this proposed? >> what lawmakers are proposing

is the nsa will no longer be responsible for bulk collection of phone records. that will stay with the phone companies and carriers. the nsa will need a court order to get that information. it's very similar to what the administration is also planning to propose them according to be blessed open with inside the white house. to theropose, according people i have spoken with inside the white house. >> obama administration is expected to release its own proposal this week. here's the president speaking at the g7 meeting in the hague. >> i'm confident it allows us to do what is necessary in order to deal with the dangers of terrorist attack, but does so in a way that addresses some of the concerns that people have raised. i'm looking forward to working with congress to make sure that we go ahead and pass the enabling legislation quickly so we can get on with the business of effective law enforcement. >> the biggest difference lawmakers need to resolve with

the obama administration, whether the fbi should be required to first get a warrant before going to the phone companies. the new fisa bill does not require a court review until after the fbi makes its request. but what will it do -- what it will do -- >> what it will basically do is there will be a subpoena and there will have to be a suspicion test to show that there was reasonable suspicion that we needed this information. for example, a terrorist in yemen: the united states. that would be a reason to check a terrorist in yemen calling the united states. that would be a reason to check that out. act proposes,a one, the government cannot just collect and keep your private data in bulk. and two, if the government wants access to it, it will eventually have to get a warrant. already theis was law under the privacy act of 1971. >> it takes it a little bit closer to the legal precedent as

it stands right now. the details will be very interesting to see. the white house is interested to forif there is an exemption security issues. however it is laid out right now, what the justice department and intelligence would have to is go to the secret surveillance court and say they want a specific phone number or numbers, they want to query that from the phone company and then they would have to go in and get that. the problem i've heard from the intelligence community about the last six months about this idea is that it takes time. >> what about those who have been critical of the nsa status quo? will this legislation appeased them? the general american public, mom and dad and everyone else has been very concerned about phone data collection, because it is kind of the most invasive of our personal

privacy. perhaps, striking a bit more of a balance where we can maintain national security interests, but perhaps be a little less creepy to the individual, certainly will help politically. on the other side of it, we are looking at businesses and organizations and economics, i'm not sure this will have much impact at all. >> in your opinion, what are some of the parts of the nsa surveillance program that will be looked at or attacked next, if you will? >> certainly, the biggest concern of people i talk to have it around the economic impact of foreign companies being willing to trust their american counterparts to buy services. we have heard of brazil telling google they do not trust them theire, wanting to set up own infrastructure for e-mail and all these types of things. been a asleep, there has lot of fallout in germany. the american -- obviously, there has been a lot of fallout in germany. the american tech companies

are affected by this. magazine,ng to wired web traffic has risen fourfold in the last few years. the security issue will only get eager. matt will give us a tour of the f1 50 assembly line. he just bought a 150 himself. hear also from godiva's president. ♪

>> this is "lunch money" on bloomberg television, also streaming live on bloomberg.com,

your tablet, and your smart phone. i'm andrew johnson. ceo goes to the internet again to reassure customers. >> we will not let it ever happen again. we will learn from this and we will be a better company. thank you for your patience. the gm team has done extensive analysis to make sure that if you only have the key or the ring, that the vehicle is safe to drive. when they presented this to me, the very first question they asked is, would you let your family, your spouse, your children of drive these vehicles ? the answer to that question is, yes. >> onto ford. for more than three decades, the f-150 has been the top-selling truck in america and worldwide. matt miller just bought one himself.

>> this is the room, and his toric assembly plant in dearborn, michigan. i'm here to live out every gearhead fantasy, watch it roll off the line. and as an added bonus, i'm going to watch how they bill -- how they build every ex-150 top-selling vehicle in america. >> i just bought a raptor. how many people does it take to build one? >> it takes about 1000 people about 20 hours. >> on a daily basis, how many trucks roll out of your? >> about 1250 units. we do that on an equivalent of about six days a week, so about 7000 units a week. robots workhe 375 at the start of the line, molding steel from the 7000

pound truck from the bottom up. and in a case of my truck, that is how it is black on black. more than half of the people on the line work on the assembly. here they do the integral work of installing the guts. for the raptor, that means getting a next or large engine and special shocks. the last step is quality control. but for my raptor and other specialized trucks, they go through modification, or the mod section. >> they put on a graphic that differentiates them visually, helps them stand out. >> i opted for $2000 of hand laid the house. after a getting -- after getting a firsthand look at the manufacturing process, it was time to have the reason i flew out to michigan, for my very own f-150. >> is that it? oh, my god, i cannot believe it.

i've never had the ceo brigand car to me. >> unbelievable. i did not expect this. >> you picked a really nice one. >> thank you all very much. >> that was cool. f-150ch revenue does the bring in at 40? apparently, it is a lot. >> it is an absolute monster. they sell so many of them and it will consistently be their profit driver for the company. >> what do you think the margins are? cars of people that cover don't realize that carmakers will not tell us. >> if they were to do that, then you could quickly figure out what the profits would be like for the year. >> but because of how many options are provided on those trucks, you've got an opportunity to be able to start at a very low price and then get up into the $40,000, $50,000

really quickly. has a great seller with the tahoe and the yukon and the suburban. dived outody else has of that market. >> there are many reasons for that. ford has realized they are going after enthusiast markets and that is extraordinarily important. it is sort of like a built-in he basease -- a built-in fan that can act like a third-party brand. but there is also a manufacturing issue for why they might not be able to provide that. ,> nobody else builds a raptor according to the guy was talking to. he said they just don't have production why -- production lines wide enough. >> people are serving to realize they can get smaller crossovers that have the same utility as the larger ones, or they find they do not need the utility divided by a larger suv. they are turning to downgrade and go for something smaller.

>> full -- four has sold over 760,000 f series pickups last year. is the chevy truck silverado, about one third fewer than the f-150. coming up, we are taking your run the world, starting with breakfast in britain. and we will take you to where chocolate is on the rise. ♪

>> we are eating around the world today, starting in england. for brits, wearing a full english means a breakfast that is traditional and greasy. and it is also very expensive. just ask jonathan ferro. i get a full english and a black coffee? that is all. with inflation in the u.k. and europe pretty low, what does

that mean for you and i? one way, up.gone for any self-respecting bridge, this is breakfast. allow me to present to you the full english i'm a saturated fat, carbs, and caffeine. pork prices are pushing higher in the u.s. we've got a drought in the u.s., southeast asia, india, and even australia comes in. then you've got coffee. people call it an early morning

drink. i call it a necessity. the world'sterally biggest producer of the stuff and there is a drought in the country. the next time they tell you it is not forow, the british -- for the full british. >> chocolate godiva is landing -- expanding big-time in the far east. >> in the u.s. and europe, we are very well established and we are experiencing growth. however in asia, our growth is much more robust. dynamicsriven by the of the economies in asia, but also our increasing presence in asia, particularly china.

>> linning comes to making chocolates, it could be cheaper to make it in china, but you have chosen in fact, to keep making chocolate in belgium, despite the cost. why? for chocolatey making is to keep it as authentic as possible and to ensure the highest quality. we produce our chocolates in belgium where the company started in 1926. our plant produces a chocolate that we serve to almost 80 countries around the world. that allows us the consistency and quality that we need to present to our consumers in the end. >> what is the oddest chocolate that you have created for a shy? my check, ory green tea, is probably the most or green tea,a, is probably the most unique. it happens to be my favorite of all the chocolates we may, but also very asia pacific. >> not the only brand of

chocolate that is rising in the mideast. -- in the east. here are the numbers. ♪ >> let's watch this all down with the little mystery meat. the classic american corndog, thousands of them, spilling onto a louisiana highway after an 18 wheeler turned over. the driver was not hurt, but,

oh, all of those lost corndogs. ♪

>> it is 56 past the hour, which means bloomberg television is on the markets. i'm olivia sterns. let's get you caught up on where the market is trading right now. in a mixed picture, the s&p is now climbing, but the nasdaq is in the red. it is being dragged down by

technology stocks today. one we are watching in particular, king digital, which began trading early this morning. you,re is a question for which is more addictive, candy crush the game, or candy crush the stock? ate is the ipo, priced $22.50. just 9.2 times earnings. that is very cheap. cheaper than the s&p 500. the only problem is that it is down about 10% today. it turns out king digital gets about 78% of its revenue from that one game, candy crush. it is not just relative to the stock market, but also to technology. we look at the 150 stocks in the tech sector of the s&p 500 and only four are trading less than 10 times earnings. king digital is one of them. if it is trading that cheap and it is also down, do we need to find some other companies out

there that are cheap, but and are not necessarily going to be quite so much the burden in the portfolio? we took those 150 names and we sorted them by pe. we wanted only stocks trading under 15 times earnings, so they are cheap. and also where earnings are growing at least 15%, or forecast to this year. we found about 14. we are calling these the anti-candy crushers. maybe they are going to crush candy crush. some of these names you know. corning, the maker of gorilla glass on your iphone. some of these you may not. bottom line to my put all 14 tickers on my twitter handle. are trying to find growing technology companies, because the market is not very happy with candy crush maker, king, today. >> this morning on the loop

julie hyman spoke to king digital's ceo. she estimate the share price was too high. >> my focus is not on the price. we have long-term synergy. by focusing on the long-term, we create shareholder value. we have been in this for 11 years and we have shareholder value. we are an incredibly strong position. >> and julie also asked the question all candy crush attics want the answer to as well, what will be their next big game? we are not focus on finding another candy crush. it has been an incredible success. we have 100 million players now playing everyday. the synergy is to build a portfolio. high quality games where we retain the user through the portfolio. and on king's birthday in

trading, we also want to look at how other mobile companies are faring today. here is the thing that and grew mobile, also in the -- the zynga both also down, today. "bloomberg west west" with emily chang is coming up. ♪

>> live from san francisco, welcome to "bloomberg west," i am emily chang. startsrush maker king trading the shares are getting crushed, we will look into why investors are having reservations about the ipo. his firm was one of the main companys in oculus, the facebook is buying for $2 billion. spark capital founder santo politi will be joining us.