♪ "lunch money," and i am adam johnson. taking a look at the menu, here is what we have got today. a rough first day. and when will it end? this is a bloomberg exclusive. says it will not tap our phonorecords, but it still has a way to find them. we will show you how ford builds its best selling truck. it is awesome. and around the world dining for breakfast.

in the far east, we have got it all. lunch money. all right, we are kicking it off, another deal for the world social network. >> facebook making another multimillion dollar acquisition, is done by a virtual reality company for $2 billion. >> yes, you heard her right. facebook, where millions of people log on every day, like chris martin and gwyneth paltrow's breakup. yes, it is true. i say, they are trying to bring virtual reality to the mass market, trying because it does not actually sell anything yet. >> there is a lot to get it out there. it is one thing to make a prototype in a room that can be moved. it is another thing to make it a few hundred dollars in a mass market, mass consumer rise situation that you can show to the world, so we definitely have a number of challenges ahead, but we are getting closer.

>> that was an interview with brad stone of bloomberg businessweek a few years ago. he is the ceo and cofounder of facebook iscompany buying. the company has a product that is still in development. remember, they split just bought a mobile messaging company, at 19pp, and that was times projected sales, but whatsapp, well, at least it adds one million users a day, and it is on its way to one billion users, so you can see why facebook like whatsapp, but why would it like a company that makes a clunky videogame goggle? >> ultimately, what facebook has decided is that oculus and the rift will be the platform, $4 inlion in cash -- $4 billion cash. it is a huge decision for a company to try to determine what

this will be very far out and to put that that down there. >> that was a take from our bloomberg editor, cory johnson, and here is what they are saying. >> this is an important acquisition for them. >> you have to imagine this is hotly competitive. seems likeends what an auto mount of money, and it is like a bunch of people are detting i believed -- eye blee plus a lot of money. >> i think facebook thinks they can win, even if the long-term vision of virtual reality does not pan out, as long as they have a better platform as a result of buying this. this is basically to create new platform that could, in effect, compete with the facebook we know today, as a platform for future interaction. yout is a deep bed, and have to look at it, but there

will be more experiences that are virtual. >> somebody did this in a way that is compelling. they are round for 25 years. this, ie idea about think that is what happened here. >> so how far virtual reality has,? as we told you earlier, brad stone paid a visit to the oculus business. >> right now, i am wearing a oculus rift virtual-reality headset. i now see my enemies. i am firing a machine gun. >> they are making a big promise, that virtual-reality will finally feel real. >> what a virtual-reality happens? this is like the matrix, except everybody realizes we are in it. >> the 21-year-old created the headset in its -- in his parents

garage, and that was only the beginning. virtual-reality. now, you are the cofounder of a company that just earned $75 million, moving towards a commercial product, and you are able 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 and 90's and there was a lot of 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 nearly photorealistic, which we could never do before.

>> it is very seamless, and unlike other systems, i'm not feeling any nausea right now. it's almost like a nest. -- i'm there. >> the buzz around it has 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. >> oh, well it looks like anyone is for sale at the price is right. is the price right for king digital? the wildly popular maker of candy crush goes public today in its ipo. and later, general motors message, hitting the web again to try to reassure customers. we have a germanic -- a dramatic 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 bloomberg.com and your tablet and smartphone. adam johnson. king digital is the company behind the popular mobile game kenny crush made it trading debut today. $22.50.

that was the midpoint of the range. stocks fell 10% right out of the gate. riccardo zacconi. >> by focusing on the long-term, we create shareholder value. i think we are in an incredibly strong position. this 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 on tablets on games and 90% of 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. we have been in profit in -- we have been profiting from 11 years of work.

more than 180 games. these games cover a very wide range of different genres. >> when you talk about the long-term and you talk about the portfolio, as we know, there is one that is most popular, candy 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. they will 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. if you look at the top grossing 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 came in the top three. in january of last year, it became a top grossing game in 11 days on android. we'll may have 2.5 games really available. and each one is a success. >> do you have a sort of pick from the other games for what you could have as the successor for candy crush? >> the strategy is to build a portfolio. we have 100 million playing

candy crush daily. >> the mix of appeal of kenny -- candy crush is on emotional triggers. just the right balance of frustration and success to keep people playing for hours. i won't even go near this thing. i'm bad at solitaire. we had someone actually test this thing. >> why is candy crush so addictive? there are 97 million of us playing this game every day. 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. the idea is that it is you an immediate sense of the accomplishment. with 544 levels and a new level

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 can lives, candy crush 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. candy 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. all of this is like -- is why king digital, the makers of candy 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 is this a one-app 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. it 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. they've 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 a visit to canada. panda preserve. the first lady along with her daughters watched a panda munching on bamboo. ? that is what pandas do. china has been using the cuddly creatures for diplomacy since the 1940's. ♪

>> 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 board of thehe 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? 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. bullard's boss, fed chair janet yellen, said around six months after ending the bond purchases. 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. >> as for the 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. we are still in position to grow at eight percent for the

-- 3 percent for the remaining three quarters and probably hit eight percent for whole year and better the year after that. we are still in great shape for 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. plus, the ceo 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. ?

♪ " alsos is "lunch money, streaming, and i am 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. he highlights the use of syrian chemical weapons, which were

used the first time at flanders. and human rights violations 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 new bureau propose?

>> 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 propose, according to the 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. >> 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 that out. >> the new fisa act proposes, 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. i thought this was already the law under the privacy act of 1971. -- 1974. >> 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 see if there is an exemption for security issues. however it is laid out right now, what the justice department and intelligence would have to do 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? >> i think 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 anymore, wanting to set up their own infrastructure for e-mail and all these types of things. i'll be asleep, there has been a 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.

this is scaring away people. >> according to wired magazine, web traffic has risen fourfold in the last few years. the security issue will only get bigger. matt will give us a tour of the f1 50 assembly line. he just bought a 150 himself. we will 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.

general motors's ceo goes to the internet again to reassure customers. faultyng faith after the switches. >> 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. >> gm expects the parts to arrive in dealerships by april 7. 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. -- every f-150. 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. >> most of the 375 robots work 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 extra 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 sector. they put on a graphic that differentiates them visually, helps them stand out. i opted for $2000 of hand laid decals. 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 -- deliver my car to me. >> unbelievable. >> i did not expect this. >> you picked a really nice one. >> thank you all very much. thank you all very much. >> that was cool. how much revenue does the f-150 bring in at ford? 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? a lot of people that cover cars 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. >> gm still has a great seller with the tahoe and the yukon and the suburban. but everybody else has dived out of that market. >> there are many reasons for that. ford has realized they are going after enthusiast markets and that is extraordinarily important. a built-in fan base that can act like a third-party brand.or for the 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 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. >> ford has sold over

760,000 f series pickups last year. the next best truck is the chevy silverado, about one third fewer than the f-150. congrsts, matt, on your new truck. 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 will tell you why. ?

>> 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. >> can 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?

breakfast time. the pr isice of food has gone way up. this is breakfast. allow me to present to you the full english i'm a saturated fat, carbs, and caffeine. bacon. pork prices are pushing higher in the u.s. we've got a drought in the u.s., southeast asia, india, and even australia, putting wheat prices under pressure. as then you've got coffee. people call it an early morning drink. i call it a necessity.

it is all about one place, lieterally. brazil is literally the world's biggest producer of the stuff and there is a drought in the country. the next time they tell you inflation is low, it is not for the humble british breakfast. breakfast in britain to chocolate in china. explainng why a luxury chocolatier is so much. >> 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. that is driven by the dynamics of the economies in asia, but also our increasing presence in

asia, particularly china. you need to chocolate or 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? >> our strategy for chocolate 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 asia?ou have created for or greend say maca tea. 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 east. here are the numbers. ? ♪ wash 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. the dow is off, and the nasdaq is the laggards of the bunch.

markets turning around earlier this morning when president obama said russia was testing the international order by annexing crimea. earlier this morning, there were durable goods orders that rose more during the month of february, and one of the big stories of the day, it was the debut of king digital, the maker of candy crush. debut for ahe worst newly listed company in the u.s. in nearly four months. adam johnson takes a closer look in today's insight in action. >> which? candy crush, the game, or candy crush, the stock? some insight in action. this is in the mid-point of the range. earnings,st 9.2 times very cheap, right, about 40% cheaper than the s&p 500, and it turns out that thing digital gets about 78% of its maker money from that one game, candy

cheap and it is actually relative to technology. looking at the stocks in the tech sector, and look at this. only after you are are trading less than 10 times earnings. yes, king digital, candy crush, is one of them. it begs the question, if it is trading that deep and is also down, do we need to find some other companies out there that are cheap but growing and are not necessarily going to be quite so much of a burden in the portfolio? here is what we did. we took those 150 names, and we e, and weem by p/ wanted ones that are cheap, and also ones that are growing at least 15% or forecast this year. as it turns out, we found about 14. we are calling these the ers, anddy crush

corning, the maker of guerrilla ands on your iphone, others. all 14 takers, i put them on my twitter ticker, and we are just trying to find cheap and growing technology companies, because, clearly, the market not happy with candy crush and king digital today. julie hyman spoke to king digital's ceo. they talked about whether or not they priced it too hi. -- 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 addicts want to know.

what is the next big one? >> 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 number two, also monetize. just onet's show you more time how king performed, the biggest decline for a newly listed u.s. company in nearly four months, even though it priced shares at a discount. king digital down. that is it for on the markets. ♪ .