>> live from bloomberg headquarters in new york, this is "market makers." >> the u.s. justice department accuses the chinese military of an organized cyber espionage attack against western companies. addressder will reporters at a new moment.

we will take you live to washington dc. danica rejects the takeover bid from pfizer. >> we will be taking a look at the health care industry. big food companies are behind the big rise in childhood obesity. welcome to a very special edition of "market makers." not just because katie couric is here. julie hyman is here. i just came from baltimore, your hometown. i went to the preakness this weekend. there you go. let's start with the breaking news out of washington dc. higher in just got the cyber war between the united states and china. justice department will announce

the first criminal charges against members of the chinese military for cyber espionage. phil mattingly is with us. peter cook as along as well. the justice department just unsealed charges against five individuals rectally tied to the chinese people's liberation army. they were targeting multiple industries according to the documents and charges that were filed. thenuclear industry, solar, companies they were targeting alcoa,cally were westinghouse electric. this is a significant escalation. there is a battle behind the scenes and in public by both countries. the idea that they would identify specific individuals and then go as far as to charge them, this is a very big deal. it is going to make the economic

dialogue in july between these company -- countries awkward. >> is this for show? things have escalated in a big way. what do they really hope to get out of this? thatere is no expectation these five individuals will see the inside of a u.s. courthouse or the inside of a u.s. jail. the justiceion is department has been working behind the scenes for the better part of the last two years at earning these types of cases. the hope was that the conversation between senior administration officials and chinese officials would more or less stop the economic espionage or at least bring it down to a level where they felt like they could move past it a little bit on the depomed excited. the justice department has not seen a major reduction. this was the step they needed to take to protect u.s. companies.

it is anybody's guess if this will be a big impact. chinese military officials that were involved, there was a sharp reduction after the report came out. will this have a similar impact? it is the hope. >> i am going to toss it over to peter. the report that phil mentioned, there was a sharp reduction but then it came up again. you have spoken with chuck hagel about this. how big of a priority is this? what do they want to accomplish? what are you hearing from him on that front? >> this is been a big issue for the defense department and the u.s. government for a long time. this was long before that report. they have been talking about this for some time. the former head of the nsa has been talking about this publicly or the last couple of years. this is a very big eel and an

escalation. there is an important audience here, the business community. they are looking after your trade secrets. there has been a lot of criticism of the surveillance program. this is a big picture and complicated picture. not all businesses are thrilled with the government. they should be interested in the notion that the government is stepping in to prevent further trade secrets from getting into chinese hands. >> has there been any indication that the chinese know what is coming? have they been given a heads up more broadly to soften the blow of all? not commented publicly on this news. you would think this kind of stuff would be discussed. from what i know of the administration, they have spoken about this over time.

something like this could come have been given. these are closed-door conversations with top officials from both sides. that this surprised is something the administration would be able to give a heads up for. these documents and charges have been sealed in a court in pennsylvania and just unsealed today. partysing these with any is not usually the way things go for the justice department. is how jarring this is going to be for chinese officials. were they prepared for this? it will be interesting to see their first public statements and reactions. >> this is a big issue. thisresident spoke about himself. this has risen to the top of the conversation between u.s. and chinese leaders. the government has not been

satisfied with the chinese response. >> what is promising about it? you can be assured that statements with congress will say this is long overdue. that has been criticism the administration has not been tough enough with china on this front. china is stealing our stuff and it should stop. bipartisan will see praise for doing it and why it hasn't happened sooner. >> thank you so much. we will head back to a just a few moments when eric holder starts speaking. we will stay here in new york for just a few. there is big news today to tell you about. a rish a bit of the cable and broadband industry. directv $450 to i billion. it is one of the biggest media deals ever. cristina alesci is here to tell us what it means. explain why this makes sense. when this was talked about a few

weeks ago, it was a head scratcher. >> all of these major players are trying to get their heads around how to survive in an environment where demand for their basic services has been on a decline. that is voice and pay television. we have seen a consolidation. analysts are saying this doesn't amount to that much innovation for consumers at the end of the day. biggerlayers are getting so they can negotiate better programming costs for their customers at the end of the day. both stocks are down. that is unlike every other deal we have seen this year. a little bit of negativity is around the steel. that can be and to regulatory concerns whether or not it will be approved. at&t is some overlap with

universe and directv's product in some markets. have 6 billion subscribers. they could not possibly compete when it came to programming time warneromcast deal. i will create a mega-giant with 30 million subscribers. there is no way that you first can compete with only 5 million. this gets them up to 26 billion subscribers. they will be number two. >> this sounds like a win. >> at the end of the day, the stocks are down because it is a head scratcher. what this deal does in the short term is let's at&t provide bundling services. it does not push the envelope forward on developing a product that is over the top. everybody wants to watch television over the top. talking abouto

developing an over-the-top product. that is long-term. in this deal, unlike the deal we saw would at&t went after t-mobile, there is no reverse breakup phase. at&t is not on the hook if regulators do not approve this deal. they are confident that it will be signed off on. it could also signal that directv was desperate and willing to accept those terms which are more favorable to at&t. making consensus moves to get that approval. they are talking about best features. agreeing to the principles of net neutrality for the next six years. there is no requirement to that

-- do that up front. gives at&t a big footprint in latin america where directv has a lot of business. that is a growth area. that is a positive for this deal. they are agreeing to keep cash on hand. the majority of this deal was done in stock. they wanted to keep cash on hand because that would please regulators. they won at&t to take part in the fcc auction. they want a frothy auction. they will be part of that by keeping cash on hand. they are trying. we will see if they are successful to appease regulators. >> i talked to an attorney to figure out what the real perspective is. >> thank you for breaking down the big deal of the morning. it is time now for the news. deutsche bank is raising $11

billion in capital. they are selling shares. will have a healthy buffer for future regulations. hopefully at some point that will stabilize. we are not counting on it. convergence of many dynamics that could develop. i am speaking very broadly about any number of challenges that could come. >> there is assignment tensions betweenight ease ukraine and russia. president clinton -- vladimir putin has ordered troops to return to their bases. the real wolf of wall street wants to make $100 million this year making motivational speeches. that will allow him to repay victims of his financial fraud.

he was a stockbroker who spent two years in prison for money laundering and fraud. hisin scorsese turned memoir into a hit movie. that allows him to repay people who lost money? it does not say if he is going to do it. they need to hold them accountable. toon't see how he is going make $100 million? who is paying to see that guy speak. >> i did really great and then i went to jail. up, how we are getting it wrong when it comes to our diets. we will talk to the executive producer of the well-known documentary, katie couric. this is "market makers." on applereaming live tv. ♪

>> let's turn to news on another huge deal. this one looks like it may not happen. beenfizer takeover has rejected. bid are saying the undervalues the company. drew armstrong is covering the story. >> i don't know if this is all the way dead. summoned toas been the bedside and the deposit has been taken to the funeral home. where not would hundred percent there yet. we're getting close. you guys saw the headlines this morning. pfizer put things out and said this is their final opera. astrazeneca said we don't see a way that this gets done before the deadline. 58.5.ere looking for

it is difficult to see how much further this can go. pfizer is at the point where it gets tricky. you have these handle rules in the u.k.. if astrazeneca deals with an offer, then they could come to the table and work something a little bit higher. is at a place where final does mean final. we are in the final stages. unless something dramatic changes. their shares are down 15%. it looks like they fell off a cliff this morning. if you look at what they were pfizer wasweek, barely moving. they are up about two percent. pfizer shareholders have been steady on this thing the entire time. astrazeneca has jumped up and down. after zeneca shareholders is thinking this doesn't get done. >> do they need this more than

pfizer does? >> they said all along that they don't need this. >> if you look at the stock price they did. to jump back up to where it was, they need it. saying.what they are they were happy before and can do it on their own. they don't need a big company to be a partner like pfizer. they will go alone. pfizer will not be able to do this. we will see how all these big claims about astrazeneca plays out. >> is there any place else for pfizer to turn? what will he do with all that cash? >> there aren't that many places for them to turn. they were looking for three different things. they wanted big cost synergy. they wanted to invert themselves and get out of the corporate tax rate in america. they wanted to find somebody that had a pipeline they could use.

there are not that many big pharma companies that have those three things. there aren't that many candidates. astrazeneca was probably the best option for them. >> thank you so much drew talking to us about pfizer and astrazeneca. we will hear from astrazeneca today at 11:30 a.m. eastern time. >> we will take you to d c. phil mattingly is on hand. eric holder is about to take the podium. what do you expect to hear from them? >> strong words. they have made it clear this is an escalation in this kind of ongoing cyber war between the countries. we will hear the attorney general say what officials of said a behind-the-scenes. he is coming up right now. it will be interesting to see what he has to say. >> we will toss to it now. >> good morning.

i am joined by assistant attorney general john carlin. in the state of the union address, president obama called the theft of corporate secrets by foreign countries a real threat to our security as well is to our economy. we are here this morning to discuss a matter that proves this threat warned about by the president is all too real. we are announcing an indictment against five officers of the chinese people's liberation army for cyber security breaches against six american victim companies. these represent the first charges for infiltrating united states commercial targets by

cyber means. these officers conspired together and with others to hack into the computers of organizations in the western pennsylvania area. the victim entities include westinghouse electric, alcoa, united states steel, united steelworkers union, and solar world. economic espionage. stolen in thists case is significant. aggressivean response. these officers had unauthorized access to steal information that would be helpful to their competitors in china, including state-owned enterprises. they stole trade secrets that have been beneficial to chinese

companies at the time they were stolen. they stole sensitive internal communications that would provide a competitor or an azeri with insight about the american entities. the hacking appears to have been conducted for no other reason than to advantage state-owned companies and other interests in china at the expense of victims here in the night it states. this is a tactic that the united states never meant that ounces. president obama has said on numerous occasions, we do not collect intelligence to provide a competitive advantage to our companies or to the commercial sector. economic security and our ability to compete fairly in the global marketplace are linked to our national security. the success of american companies since our nations founding has been the result of hard work and fair play by our

citizens. this is how it ought to be across the globe. success in the international marketplace should be based on innovation and competition and not on a government's ability to spy and steal secrets. when secrets are obtained, for the benefit of state-owned companies, we must say enough is enough. this administration will not tolerate actions by any nation that seek to sabotage american companies and undermine the integrity of fair competition in the operation of the free market. as acase should serve wake-up call to the seriousness of the ongoing cyber threat. these charges represent a groundbreaking step forward in addressing that threat. this indictment makes clear that state actors who engage in

economic espionage on the internet from faraway places like shanghai will be exposed for their criminal conduct and sought for apprehension and prosecution in an american court of law. it is my pleasure to turn it over to john carlin. thank you, sir. divisionnal security protects our security by using every legal tool of that'll to confront and defeat threats to our country. that tool is an indictment back by the credibility of our criminal justice system. the threat is from members of unit 61398 of the chinese thetary who have targeted private sector for commercial advantage. >> i want to stay in bc and turned to phil mattingly. what is your take here? what i was expecting

going into it. the attorney general called a wake-up call. thealled out china and people's liberation army. he called out these five individuals. there is no other way to look at this right now. it is a blatant escalation of what is going on. the only thing you can take away fbi has created wanted posters with pictures of the five individuals on them. there is no real expectation that the chinese are going to send these individuals over to the u.s. to face charges. they are making a show of this. this issue has been discussed at the highest levels of government behind the scenes has blown out into the forefront. the implications are very large. it will be interesting to see with the chinese say later on today when they make public comment on it. >> this is big news.

phil mattingly is our white house correspondent. when we come back from the break, katie couric will be here. she has a surprising documentary. ♪

>> this is "market makers." >> welcome back. i am stephanie ruhle. erik schatzker is out today. 26 past theit is hour, we have to do it now. shares are dropping. is saying to get hold area there is a conflict of interest. they want to hold the company and board of directors to close. acting -- asking.

he has requested a call with the lead director. is asked for a subsequent meeting and the lead director has said no way. his fiduciaryt is duty. the shares are down off of this news. when bill ackman speaks, some people listen. if they don't listen he writes a letter in the media. >> he is on both sides of this and. he represents the company on one side. he is a shareholder of the other side. there are some competing interests. >> stay with us. , katie couric is here

to talk about the documentary "fed up." stay with us. ♪

are rockingack. we the car and taking a look at the foods revolutionizing the industry. monitoring --nd documentary argues that what we have been told about diet is wrong. you know our next guest. katie i -- couric is the executive producer of "fed up." people are buzzing about this movie. >> we decided to take a look at the obesity epidemic. i was talking about it and have been for 35 years. we have a steady here or a

statistic there. it did not seem as though we understood the root causes of why this was happening. we examined it. we found that obesity has skyrocketed as you all know. there are a number of factors of things that have come together. we are consuming so much sugar or sugar like substances. corn syrup,e dextrose, it comes by a million names. americans have doubled their intake of sugar. a lot of that comes from the low-fat craze and they had to pump in the sugar to make things taste good. it is hidden in so many foods. there are 600,000 products and 80% have added sugar. >> who is to blame for this? >> food manufacturers, the government for not getting a handle on it. it did not go through.

the sugar lobby is so powerful. there are all sorts of reasons. many people are to blame. some people say it is personal responsibility, but we are so inundated with marketing. it is so confusing. four grams equals one teaspoon of sugar. nowhere does it say the percentage that is recommended for a safety threshold of sugar on anything. you have to go to the grocery store with a calculator. >> who is responsible? is it the food industry? pepsi has tried to diversify their product, but people just want to buy soda. responsible for satisfying? >> the bottom line is a big consideration. this is business. people need to be educated and understand what they are buying. some people think that you can work with the food industry and

it is not necessary to demonize and industry. many of our experts say that just like the tobacco industry, we need to call out the food industry. they may reengineer the product and make it lower in fat, usually it is the same amount of sugar. as one person in the film says, they are making junk food less junky, but it is still junk. >> i have seen the film and i have heard you talk about it. it is a call to action. people should make changes to their lives. when you talk about being inundated with various messages, if you think about the last 30 years, now that is good for you again. calories in, calories out. when you come up with a newer way of thinking, how you cut through all of that. i know what you mean.

the story for 35 years and every week there is a different study. the science backs up that a calorie is not a calorie. we metabolize things differently. mucha is metabolized differently than a handful of almonds. we are just trying to educate people so they can make smarter choices. never eat saying sugar. we are saying be aware of the sure you're eating. it is added in a whole variety of foods you did not anticipate, like spaghetti sauce or tomato sauce that has a 11 grams of sugar per serving. i think people need to see the documentary. they need to take it in and make decisions about how they want to be and feed their kids and the kind of food they want to buy. >> this is not an easy thing to do. one of the interesting vehicles that the movie uses is following several obese teenagers as they

struggle with their weight. they are trying to make changes. there is one family that you convinced to start eating healthy and cooking more meals at home. the kid in the movie ends up backsliding. it is such a difficult thing to do. he gets a job at a fast food restaurant. >> his mom lost 100 pounds. his father was able to get a kidney transplant which he could not because he was too obese before we approach them to be in the movie. brady was working at a fast food restaurant and selling candy bars at school. it shows how difficult it is to ino the damage that is done 17 years of unhealthy eating. 21 imagese child sees of marketing and our, led by junk food. if you have a bowl of goldfish, you need 45% more if you are

exposed to food commercials. this is a jumping off point. we don't have all the answers. he only to be aware enmity to start talking about this. by 2050, 1 of three people in this country will have diabetes. years, people0 will be obese. something is going on that requires our attention and action. >> i want to share what larry robin said. he agrees, he is thinking from a business perspective. this is not going to solve world hunger. >> in a utopian world we would all be able to shop and pay whatever we wanted at whole foods. we do need to increase the food supply. o'sowes him luck -- gm

unlock that. >> he says it is a good thing for the world. >> that is a totally different issue. i think it is apples and oranges to use the food analogy. we are talking about being the bread basket to the world. we want to be able to find food for healthy and hungry people. i think that is something that requires our attention. we need to have convenience. there are ways to bail to prepare foods that are not forcing us to eat some of the things that we are eating today. in the film we show side-by-side chicken anderved on beans and things that are real eating fast people food. we have to be honest about it.

>> is there a prescription for working moms? there are many mothers again home at 6:00 at night. i want my kids to eat kale. there are nights when i am embarrassed when i am feeding them chicken figures and macaroni and cheese. is there a shift we should start when i? there are nights just want them to eat food and i don't care what it is. >> i think that being embarrassed is the first step. i should probably spend more time in my day planning what my kids are eating. maybe on sunday make a big thing of lentils. i am not perfect. i am not saying this is the best way to do it or that my kids never each other. we have to make it a priority. think of the legacy we are leaving our kids. this is the first generation of kids expected to live shorter lifespans than their parents. they be it is our priorities. maybe it is figuring out what you can do at the end of the

week to use throughout the week. maybe it is not about giving a two-year-old and oreo cookie. and starts the addiction developed the taste for junky food for the rest of their lives. i don't know all the answers. you don't want to feed your kids this way. the notion of the key eaters is something that we are enabling. it is a selfless owing prophecy. my mom said he the peas or you can't leave the table. parents need to try some tough love. try this and you might like it. it. you havete for to try things six or seven or eight times to get your taste buds. your taste buds are malleable. developget your kids to a taste for healthier items. >> i am a working mom also. to me it is logistics. you can argue about the price.

the convenience factor is huge when you are a working parent. so many people in this country are. struggling on the income side. the movie does give a lot of great facts and makes a strong argument, how'd you give people those tools? >> this was just the beginning. we can't cover everything in 90 minutes. it took a long time to methodically lay out why we are in the situation we're in. we hope this will spark a movement that we can all talk about ways to help families eat healthier. maybe you buy chicken breast and it does not take very long to put those in a pan with a little bit of olive oil instead of throwing the prepackaged, aocessed chicken pieces on cookie sheet and throwing it into the oven. you're smart women, you can figure it out. we do need to educate people. this is the first step in what will be a movement to educate

people first and foremost. we will help them make healthier decisions. >> you are an extraordinary force. we appreciate this. we have to ask you, you were the first female solo news anchor. we watched what happened at the new york times. this woman is an extraordinary force. we think you have been extraordinary. it would you watch this play out with the new york times, what do you think? >> i have not read everything about jill abramson. she is a remarkably accomplished person. to opine until i understand exactly what happened. you hear things from all different perspectives. point thattand the women get higher and higher and professional life, sometimes they are going to get fired as

well. it goes with the territory. we can't expect to be treated differently. i don't know all the facts. i don't like to have an opinion without knowing a little but more about what happened. >> have you gotten pushed back with this movie? big food companies are massively powerful. the people in government and agriculture types, they have to be feeling shame here. >> we want to start a conversation. many of them have been willing to listen. it is a philosophical choice. can you team up with the food industry? can you change things? if so, how? if it just these reengineering junk, probably not. if there is an interest in changing the way we are marketing and the way we are the optionse way

are offered, i say bring it. i don't think they are thrilled with the movie. hopefully, it will spur them to take a look at themselves and make some changes. >> it is a call for action. katie, thank you so much for being here. katie couric is executive producer of "fed up." changingpermarkets are and handling the market. ♪

>> the hell the food movement and new technology are changing bricks and mortar grocery stores. let's look at some of those changes that are rocking the industry. both studied the latest trends in the grocery industry. -- to startpart with you, john. this?s driving

as a demographic change? is it cultural change? >> if you look back over the last several decades, there've been a lot of disruptors. some of those are things like whole foods. some are walmart from an economic standpoint. some of this is demographics. a lot of it is economics. when you think about what has come out of the recession, beyond that you think about income. moneyink about how much lower incomes have to spend on food. they have been pinched. boxes save people money. it is demographics and economics. it is people being time stressed.

those are not going to change in the next -- if the gdp grew, that is not going to change. millennial's?the how do they shop that is different from their parents? they are very concerned about how much they are spending. they are very burdened with debt. they are very conscious about health. they have changed their patterns. they are looking for things that are fast and easy and things that are good for them. they are using technology. they are smarter about the information about where they are shopping. that is just one thing that is having an impact. >> how to the grocery stores handle this product -- pressure. if i'm running a grocery store, i have to make dough.

>> you have to give people a choice. you offer them organics if they want that. you offer them cookies if they want that. that if your nutrition standards are as high as whole foods. you can do that if you are safeway. are increases on the perimeter of the store. >> you let the customer lead you. if that means that over time you expand the size of your perishables, which they have see doing, you might even supermarkets selling more nonfood. this might be apparel. you have the traffic coming in the door, what do you do with that space? >> is kroger tried to turn into

walmart? >> not in a retail way. they will take the best sellers and put them in their traditional supermarkets. bakes like rubbermaid or ware. you can do the same thing with apparel or toys. you have to do something with that space. nonfood isof selling the gross margin is much higher than food products. when you think about nonfood been, they have always more profitable. >> when we think about changes in stores, what are coming from outside the store? >> there is tremendous competition. everybody is looking for that one a trip. everybody is selling food.

if you go to the drugstore, they are selling food. if you walk into walgreens or cvs, they have got fresh produce. have to go sandwiches. they have sushi. they are cutting it in some of those locations. >> what about other places to buy food that are not in a store? how about amazon? >> to the point that you were talking about, the convenience for easy -- busy moms. i had been away all weekend and i ordered my groceries from fresh direct. am i willing to do that? can i pick and choose what i want? that is another opportunity. >> thank you so much, wendy and john. we will be right back. ♪

>> live from bloomberg headquarters in new york, this is "market makers." >> the final word. it is now up to regulators to decide whether at&t will be allowed to buy a him -- directv. start spreading the news. -- we are still rocking the card. a growing threat to the additional grocery business. companies who deliver meals ready to cook. welcome back. i am's -- i am stephanie ruhle.

>> i'm julie hyman in for erik schatzker. at&t agreeing., regulators will have the final word on whether the deal will go through. critics say it will mean higher prices for consumers. what are the factors the government will consider in making the decision? in a former bring lawyer for the federal trade commission. she represents companies defending the deals. at&t may defensive moves here. does this make things easier for them? regulators will look at two things.

between at&tverlap and directv and does the acquisition somehow increase --t's rrr or tip the scales at&t's or tip the scales. >> is there pressure from regulators to not let something through here? there are some in a different approaches and opportunities. our regulators saying, i cannot let everything go through? quest typically, an antitrust two inwatching, you have front of the federal medications division and antitrust regulators, comcast time warner, which was announced last year, and you have got at&t and directv. both deals, they will be

evaluating the competitive playing field. the announcement of directv is really a game changer, a whole new team coming both deals, thee .valuating the out antitrust regulators will have to take that into account. >> to get back to what you're saying earlier, is the whole point of this acquisition to have more bargaining and negotiating clout? how much is too much? how do you quantify that? >> more consolidation does not necessarily mean a deal is that. . in something like this, where you have comcast time warner already working its way through the regulatory process, the fact that at&t is now buying directv can help in the way that antitrust regulators can look at how many players there are in a market. versus of having david , the combination of at&t

and directv makes this look more like goliath and goliath. a notion that the bigger they get, the better they get from the public interest standpoint. >> the public interest standpoint is interesting. there will be several different reviews on here. you will have the federal communications commission looking at the deal under a public interest standard. it is a fairly broad standard that takes competition and other factors into account. on the antitrust side, you will have a more narrow review focused on this deal on competition and consumers. the broad standard rule -- will really be more of an fcc focused and antitrust regulators will be

more focused on the more narrow effects on competition of the hummers. >> when you look at another potential telecom merger, sprint and t-mobile, do the other deals have any bearing on that? in other words, if you give the green light to these, does that mean that one will get more scrutiny? >> it is interesting to see how all the deals will play out and how they will interact with each other. what is important for the antitrust review is how the playing field changes overall. regulators will look at all the teams and how they interact. the question will be, for any future telecom deal, do the providers interact with pay-tv for broadband providers, and where do regulators see the industry going. there has been a lot of diversions in cable television

and broadband. really, these deals could all simultaneously, and under the same competitive playing field analysis. >> very interesting. whetherto us about regulators will say yes. >> we need to cover another deal i cannot handle. we will bring in a man i can also not handle, on the verge of why videogames streaming company $4 billion, we're talking about broadcastlets players and watch live streaming of video gaming action. the startup has 45 million users and generates more web traffic than hulu during peak hours. , when they say you

,ave been doing research explained the company to meet. it sounds read to kill us. >> is my personal twitch experience. guys will -- they were telling us the numbers of viewers they're getting and i swore they were a decimal point off. there is no way they could be talking about 400,000 users, a really big network process death broadcast viewership. ago, i wastly a year at the xbox one announcement at e3. a big gaming commission. he rented out a facility where they played a basketball games. 13,000 people, packed full of hard-core gaming people. xboxthe head of the announced xbox one would be fully interactive with twitch, the place went nuts. >> who was in that place?

i need to understand, attendees at comic-con? >> no. these are people advertisers cannot play -- find anywhere else. they are hard-core gamers and are dedicated to the games. a very attractive audience. also, yes, during peak hours, bigger than facebook and hulu. report on thea backbone of the internet and how changing, and youtube and netflix account for about half of all internet traffic. down the list, you see facebook at 1.8%. is field goal is 1.2%. and twitch tv is 1.4% of all internet traffic. it is one of the top things, a huge phenomenon. .> we had after -- advertisers what kind?

>> mountain dew. other players, masters of the games they are trying to play, look for tricks like a sporting event. >> when i am watching this, when i am watching twitch, do i see the person playing, or just see what they see, the screen there looking at and what they are doing? >> they want to see the way someone else is playing the same game airplane. less they want to see the person with the controller or just the screen? >> the tricks the players play, how to fight a certain fight on the game. >> i can understand that. chess players want to watch another player. >> gaming exists in a parallel universe in people who are not gamers do not recognize it. you can see why this would be attractive to a company like google. the valuation sound crazy town?

google kind of traffic, is in a position to lower a lot of their and with cost. they have their own dedicated and with on the backbones. they have got the tools to get to the advertisers and recognize real-time advertising on the site. it is an intriguing matchup and makes a lot of sense. nobody does those anymore. it is fascinating. >> i will follow you on twitch. cory johnson, our own bloombert ust editor-at-large giving the skinny on twitch. i just cannot believe it. i cannot believe snapchat here i am so old and out of it. >> we are supposed to say, no, you're not. school coming up next. really old school. new york times, the editor, taking the high road. remarkser first public

since being ousted. look here. the online companies shaking of the grocery business and the supermarkets rising to meet the challenge. this is "market makers." your phone,ming on tablet, bloomberg.com, apple tv, and kindle fire. ♪

thehe spoke today since first time since she was fired last week. she is the editor of new york times. asked him a job you love her is but the work i revere, powerfulm that holds

institutions and people accountable, is what makes our democracy so resilient. this is the work i will remain very much a part of. journalists risk their lives frequently to bring you the best news reporting in the world. it is an important and your replaceable institution and it was the honor of my life to leave the newsroom. >> taking the high road. we will stay on the new york times beat. newspapercovers the industry for us. clearly on the defensive here. does a feeling they're winning the pr war? when you watch her speak right there, you want to say, "you go, girl." question is winning. since she was fired, she is a quiet effort that full-time. she did not say anything

negative. she talked about how great the new york times and how important it is and how she cherished her time there. she is taking the high road at least publicly. behind death behind closed doors, she and her allies helped to frame the debate around her firing. it is a gender issue. she claimed she is getting paid less than her predecessor. whatever the truth of it was in terms of how and why she was fired, everyone is talking about it. women in positions in power, are they being too pushy or getting paid the same, she has that out there one way or the other. >> she and her allies have been able to shape the debate, due in out overo -- he came the weekend trying to repair the damage, saying, he heard repeatedly about a series of issues, including arbitrary

decision-making, a failure -- the public mistreatment of colleagues. saying it was not a gender issue or a pay issue, but a management issue. >> it is very carefully worded to focus on her management and job description, and how she felt. nothing to do with her demeanor and attitude. >> if you look at some of these words, failure to consult and hold on,colleagues, did jack welch bring in colleagues and consult when mickey jax or is on his speaker, be the this is going to job business? i think there are a lot of extraordinary leapers out there and, are we holding them to the same standard we are holding jill? >> you're pointing men who have operated the same way, were they fired for similar reasons, no.

it is a very good point. previous editors they bring up as rosen -- rosenthal, famous for being difficult and hard to work with. he was not fired. he retired. >> maybe she should have been fired, but maybe those people should have as well. he modernizes approach to how he holds onto managers one where the other. we do not know. >> i am lady myself on fire right now. you're talking about -- these are ceo's is that get books bewritten about them for being these leaders, and we think they are champions of the world. when a woman does it, she is a pushy broad. i do not get it. >> i do not get it either. i just think it is still not clear. how he really

thought of her, or how he approached the interpersonal relationship they had. it was not a good one. >> i just think there are a whole lot of devices able out there and i wonder if they get fired. >> one of those people may also be arthur. bring alex in on this. she has been looking at the management structure of the new york times. this is the second executive editor that has flamed out spectacularly. following the jayson blair scandal. do the chickens come home to roost? company and he makes the decisions. an awesome article." on the company, because this is really where it comes from. on the one hand, you have class b shares, and they have about

70% of the board they can elect their it about nine of the 13 members. they make all the decisions and are not public traded. we have sound decision-making. about 30% of the board. we would get to pick about four people. the board makes the decision. who will be the ceo? what acquisitions will they look at? pretty much ultimate control, which is nothing new in the media industry. >> right. a lot of other companies have this, especially media. >> right. google is doing the same thing. facebook is doing this year -- the same thing. syria, it is a great idea. you get to have editorial integrity over a product. you want to be able to separate the two. >> so that places that much those shares, the

ones that can control the faring, is a leadership well and doing a good job figuring out what to do and what to do next. >> they own 80% of these shares. you need six of eight people to make the changes. basically, you are seeing the big decisions that the decisions made by a people. on the one hand, a smaller group of people are talking and working things out. on the flip side, you get shareholders angry they do not feel like a stock is valued enough. we know the newspaper industry is struggling across the board and it is hard to expect those kinds of returns when you have that situation. >> those members would have had this.rove >> in terms of major changes

the the company, it is eight members of family trust that made the decision. we should point out it is still not clear how these people are elected. by the family only. it is sort of like a shadow board with the new york times. the fact that it is a public traded company and they have no idea what the process is or what credentials they have, or how they think about things. -- >> morgan stanley fired back at this, tried for over a year and a half and completely failed. he even got institutional buddies to prevent this from happening. it did not work. >> there are the ones who wanted to buy the shares. >> shares are up a lot this year.

investors are not too bothered by the shares structure. >> overall, media and tech companies have done well. >> thank you. will --a story that we that will keep on giving. giving us headlines. there you go. sometimes, it is great when ugly truth comes out. to rockp, we continue the car. we are looking at how traditional supermarkets are changes in athe transforming industry. we will speak with the ceo of one of your's biggest change -- chains. ♪

collect the grocery industry's worst nightmare. people quitting because they can get what they need. . ♪

with.s is "market makers" chester and stephanie ruhle. >> i'm julie hyman come in for erik schatzker. >> we have been rocking the car tomorrow morning. continuing on this main topic, what are we continuing with. chester and stephanie to. we're looking at some of the trends revolutionizing the business. help youtartups that shopping and pushing. ice boat with the chief of one of new york's biggest chains. the newall about

competition brick-and-mortar stores are facing like online shopping era take a look. wants to sell groceries, whether it is kmart, walmart, drugstores, everybody is looking at it. people have to eat every day and three times or four times a day. let's sell it to them. as a leader for the people who come in. so's give away our groceries people can come in and by our hardware. the industry is going through broad changes. this will be a shaking out someplace. that arehese people going by computer, a fresh direct or an amazon wants to do a complete loss. >> what do people want to buy?

everybody is making this massive all organic push. is that what they actually want to buy in the store? or do they want to buy macaroni and cheese? people with suspense -- dispensable dollars and people who want to be able to afford it , and people who reached an age where they say, i want to live a little longer, i think organic foods are good. less chemicals. through the 1940's 1950's and 1960's, all of these companies, all they wanted to do is, how long is that product going to last on the shelf and how good does it taste? if it kills you, you are collateral damage. i think that is terrible. >> what about people not in the financial position you are in? should they be buying organic and should you be trying to buy your product at lower prices for

people who are not at the one percent can afford chicken? >> i started a promotion in one of our supermarkets. supermarkets are the lowest cost area, that we are selling organic foods at supermarket prices, not at whole paycheck prices. connotationsain that people do not like, but it is a fact that we were able to sell it for a lesser amount. we were buying it better. we are well connected with one of the largest co-ops in the northeast. shoprite, and they have started a private label organic program. what does that mean? foodsuld buy organic coming from a company like shoprite, who is very reputable

at supermarket prices. >> at the end of the day, you need to make a profit. that is important to you. owner haveery store the social responsibility to try to push people to eat healthier food? >> traditional food prison for the last 30 years, that it has worked for some of the big companies, or these big super -- supermarket chains, not really. companiesget, the have done nothing but put chemicals in their foods. things, youthose sell kraft macaroni and cheese. you sell wonder bread. >> we make the organic food available for our customers. >> when you look at what sells for these stores, is it or your cookies were killed? i like both.

>> these cookies always sell. changed in the last 20 years. sellingpened is we are twice the fruits investable's we used to sell. we are selling twice the chicken we used to sell, and half the beef we used to sell. going, especially to other people, away from beef to chicken. they are going for fresh vegetables. instead of the traditional canned vegetables on the shelf. as we remodel our stores, what are we doing? we have canned foods is shrinking and

shrinking. this is permanent. people want to live longer. when you hit 60 years old like i do, i want to live longer. i've got to spend some money. >> will the growth look different in 10 years? >> and will -- it will look different in 10 years people people want less soda. week,x is changing every every month, every year. >> does that mean less money for you? will you make more money selling tale than soda? >> not necessarily. you have a rule and you mark it up, whatever it is, 35%. no matter what the product is, it is the same markup. >> same markup, whether it is soda, kale.

julie, it is a difficult balance. i want to hate kale. but it is religious. out -- i decided i like that as well. too much kale. there are health risks. >> i am not quite there yet. not there yet. coming up, we will talk with some of the people transforming the grocery industry and changing the way you've inc. about getting ready for dinner. ♪

>> welcome back. got ceo'sday, we have is of two companies changing the way we shop and eat your these are two men truly rocking the card. matt is the ceo of a company that delivers -- of apron.

let's start with you. city restaurant delivers. why do i need you? >> the restaurant delivers but may not have an online presence. the way you would access a restaurant in new york's traditionally would be by phone. for a host of reasons, it is easier to do so by way of internet, especially on her mobile device now. >> and from grocery stores, not just restaurants. yes that is right. u.s., 5000 inthe the metro area. >> that can only work in certain --ces, given liquor lawrence liquor laws. delivery.com, if i've got grubhub, if i have got

seamless, why do i need blue apron? you will bring me the best meals to my house and 15 minutes. why do i have to bust out a frying pan? >> we are trying to make incredible bunkum -- home cooking successful. we're giving you everything you need to put them in the right amounts. we are trying to teach people at home how to use ingredients they have not cooked with before. >> do you still go to the grocery store? >> i pretty much cook exclusively blue apron now. >> i'm curious about the scalability of your business and the broad appeal of your business. i do something like that as a luxury product. what do you really see as the bigger demand? >> that is a common misconception about the business, that is his -- that it is justin irving -- urban business. -- justin urban business.

>> where is your audience? >> our audience is representative of population university in the country. .ew york that is because their big markets. we started in new york. we have been around new york longer. people are interested in having convenience. in suburban markets, people do not have access to the same ingredients they have access to in urban centers. you havengredients do any urban center than you do in the country? >> not every -- there are areas of the country that are called food deserts. they do not have access to grocery stores close to their homes. they do not have something quite as high-quality as a farmers market or hold food. we provide access to those ingredients in ways they literally could not get on the wrong.

do not measure our business specifically like that, but just like in the city, is pretty representative across the country. >> generally speaking, the majority of our customers are urban centers. the sameff -- often day price. some of the biggest players do not necessarily provide. you are supporting the business, but at the same time, they are giving you a variety in and around what -- where you live. this truly rocking the traditional grocery store industry? even if you are delivering all over the country, new york, l.a., one percent, and we are not people going to shoprite and superstore anyway. >> yesterday, the owner and chef of blue apron. he was talking about the duality of the revolution going on in the fact is people for the most

part are being served by the same farms that have always served them. one percent of farms -- one percent of produce is -- serves about one -- about 50% of the partisan the u.s.. the issue is, how do you get access to more people. it is the places that allow that kind of discovery. our website, things like that allow that. >> one of the things that is disruptive at our business is that we are a membership-based organization. we have direct relationships with our customers and allow us to manage our supply chain so tightly there is no parish ability. you think about the grocery store, buy the food, hope that somebody comes and buys it before it goes bad. we know because we have direct relationships and our customers. exactly how many are purchasing from us. it also allows us to aggregate their combined power and purchase in bulk what they can

get at the grocery store. >> i'm curious what they can -- what traditional grocery stores can learn from you two. >> what do they need to do? immobile, people have access to more information. as a result, they want choice. you spoke with graffiti recently. they are servicing a particular customer. going to get in front of those people? >> what are the costs? >> nine dollars per nine cents per person per meal. so itave a family of four would cost me $40 for dinner. compare that to, what if i want to buy those groceries? what would that cost me? >> 1.5-2 times as expensive if

you were to purchase them. higher ingredients than you would normally cook with. these are examples of recipe cards they have. we cook with seasonal items like france and spring onions. deliver theg to higher and experience. >> for delivery.com, what is your biggest challenge question mark >> for us, -- challenge? is to act asr job a lead generation business for the global markets that do not have an online partner. it is explaining to them how easy it is if they do not pay on our website, the way we make money as merchants make money -- getting over the hump that the internet is probably in this case their friend. >> what is the next industry you're getting into, the next business you might be offering? vertical, dry cleaning and grocery will be two of the verticals we will start spending a lot of time in.

>> congratulations to both of you. thank you so much. coming up, shares of action zeneca -- astrazeneca fall. ♪

astrazenecaoday, said the $1 billion proposal is still too low. bloomberg's olivia sterns is in london where, moments go, she sat down with the astrazeneca chairman. what did your husband have to say about the latest reduction -- rejection? question is, is this the end of the road or could there possibly still be a window of opportunity to get the deal done before the may 26 deadline from the british

takeover panel. i tried to ask that several different ways. unsurprisingly, the chairman was very coy and scripted. me theheard indicated to ball is still in pfizer's report. have a listen to what he had to say. down the road at these terms. things that concerned us also that we did not get a resolution to because of the bid itself. as we stand right now, this is the final offer from fiserv. that is what the takeover panel says, and we have rejected it. >> what i'm hearing there is he is saying the agency is with pfizer -- it is up to pfizer to make an offer. him what the astrid

-- was the astrazeneca board unanimous and he refused to answer. he said his legal counsel in britain told him never to qualify a decision like that so he would not answer the question. i finally asked him also where he put any other big farmer -- pharma companies and he said no. >> what did he have to say about the price specifically here? >> it is interesting. uppedf the price -- they the price. it is now a 45% premium versus when the deal went public in january. he dismissed that idea that this was a much better officer -- offer. meaning, very promising oncology drugs. he says you should not think about it as a 45% premium. a lot of people right now are saying he should have taken 55 pounds per share. feel that isysts

what he should have in fact done. about 11% right now. he said, listen, some shareholders will be disappointed who are holding the stock for the short-term. he still believes astrazeneca an independente stand alone pharmaceutical country -- company. >> what the deal over there in the u.k.? >> it is interesting. it is front page news. takeover ever of the u.k. company. a lot of people talking about the cadbury takeover a few years ago. it has been the topic of parliamentary hearings. the opposition is saying they want to deem science and health and farm as a strategic industry so they would have the power to reject that. any moves like that would have to be approved by the european union. i also asked does he think what could happen in the u.s. might actually affect the value

proposition, meaning that because it is cause an uproar in the u.s. congress because of the tax aversions, what is the potential risk the u.s. might -- thethe tax policy value equation -- he said absolutely, that is something astra zeneca shareholders should not be compensated for, the potential risk. qwest thank you for bringing us the interview with the chairman of astra zeneca in the wake of the rejection. >> indeed. today, we had quite a few hours speaking to katie couric. she is taking the fed up challenge, no sugar. i will try. .omorrow, we will talk to a guy his request to go after chinese mobile service. it is only getting bigger. it has now delayed the filing of his annual report a second time. it is only getting hotter.

thank you so much for watching. it is 56 past the hour. blumer television is taking you on the markets. the chief markets correspondent has more. qwest thank you. cypher k's options insight. bit of a bounce back, currently leaving the market higher. indicate?tions are they ready to make another run in 1900? >> interesting developments in the options market last week, specifically volatility. sharp declines at the beginning of the week and toward the week, as equities sold off, there were prints expecting

volatility to move higher. interest as of this morning was at its highest level since january, just before the s&p sold off here it expecting there is an increasingly embedded expectation for some sort of volatility event i had dared >> how high are we talking about? we are not talking about 21 and february. qwest potentially. since the beginning of january, 2013, it is essentially 11 in change on the downside around 23 on the upside. that is a range we expect to remain intact for several years. there is an increasingly embedded yes, it would correlate essentially with the move up to the upper end of the range, pullback in the s&p, that could equate to six percent. that is the largest pullback we have seen since january 2013. we do not think that is imminent. qwest gotcha. about somealk individual companies. we are seeing increased action in options ahead of earnings due out thursday. what are traders expecting when we look at options trade?

>> we covered it with our internet analyst. what when up this morning is .5 this friday. it is very obviously a trade around the earnings report. typically, the stock moves only about three percent on earnings. that is what is implied right there. solidfirm it will be a quarter. at the very worst, it will be in line. he could be better. stocks come in. it is at the bottom end of its yes, it wouldrange over the pasl months. qwest lets the get -- >> let's get to your trade. qwest the guarantee, and institutional name. it is a strategy that works in other stocks as well. $35 price target. that represents seven percent. it's adjusted book value. plenty of value. up graduallyo walk

over time. companies find back upwards of 1.6 billion shares between now and 2015, about 40% of its market value. we want to create yield here by selling the 22, 26, bringing 2.5% in yields. , but we think works higher we want to create yields in owning this name and standing on the long side. qwest that is part of the search of yield everyone is watching. thank you so much. joining us from m km partners. we are back in 30 minutes. ♪

>> welcome. we trie the best stories and news. data breach at target? i thought so. shoppers from shopping. alive the world spying is and well. they charge china with corporate espionage. what about the nsa? better waydish, what to enjoy this. we