>> live from bloomberg headquarters in new york, this is "market makers." >> herbalife shares are tumbling. who is crying for argentina? the country is once again on the verge of defaulting on their debt. peace in gaza, we will hear exclusively from a leader about what it will take to end this fighting. i amme to "market makers" stephanie ruhle.

off, i could spend my time weeping, but very -- ritzholtz is with us. into the dig right newsfeed, we have a lot to talk about. from the short side is don't announced you have short a billion dollars in anything, you just get squeezed to death. >> they with us. what else are we focused on? the real estate market taking a breather. home prices rose at the slowest pace in more than a year which is according to the case schiller index. prices were up 9.3%. anyone-time high flying stock sync technologies is back

to where it started. its shares have officially sunk. it felt to $.60 a share. earlier it rose to $.22 a share. is despite having no revenue. regulars halted trading for 10 days. donald sterling is one step closer to losing his la clippers. a california judge ruled that sterling's estranged wife could sell the team to the former microsoft ceo steve ballmer. two doctors had found that sterling is mentally incapacitated. from dick hearing parsons at 3 p.m. eastern. another big name, you just mentioned him, bill ackman who lost a fortune on herbalife last week after his poorly received presentation sent the stock soaring. he has his famous short on the

making some ofis that dough back. shares are tumbling after the earnings missed estimates. let's bring in cory johnson who has been following the story for us. claims, accusations, grand presentations. >> ivan spent a lot of time on herbalife and some called last week and said if i would take a look at it. when i look at the business, the numbers of what is going on, we started to see some trends that show themselves farther. the sales growth is really slowing in this company. saw seven percent year-over-year growth, over 12%,

after 19%. if you were to go back a couple of years, you would looking at his this is growing at 30 or 40% year over year. the sales growth is rapidly declining. >> could this be because of bill ackman's claims, they have been forced to clean up their act? they are not trying to expand into more emerging-market countries, into latin america. could this be one of the reasons? maybe they had to improve their standards. >> do we think that people in emerging markets are a attention to bill ackman's short? >> maybe, at the parent company level, they are realizing maybe we need to stop our recruiting tactics because we are getting found out. >> that is the whole business. >> it is likely that the people in venezuela and mexico are not watching his presentations. >> we know that they are in los

angeles. >> a change a lot of these. they think they are becoming less. the numbers for mexico were disappointed. just revenue. they are not growing at all. some material slowdown in the business. >> i will be speaking to their cfo. thing that is so bizarre .bout this whole dispute

this is not a walmart or target. this is a niche player. how do you make this a substantial company. is player of back eddy water. >> do they need to be something bigger? >> if they want to see their stock price continued to grow him a yes. >> what do you think about the fact that we have seen senior insider selling their shares? >> you cannot always make something out of that. when i was a short seller, when i was looking for happenings, bad things going on, sometimes it look like it was stumbling but it is not always clear. >> you cannot jump to any conclusions. bit toers a little

revenue, especially when you're talking about high profit revenues, like what they're doing in venezuela. this is a very important market for these guys. they took a $67 million charge last quarter to revenue because of the exchange rate wasn't what other companies were doing. you've seen big companies change their currency valuation for venezuela. if they were to just in the way that tupperware and avon did, they might actually lose a lot of revenue or might have to take an going back. i would love to know why they decided that the goal of our trade is 10 below with other companies that no that it is actually -- >> i can go to lunch before the interview. he just stopped me running. you want to tune in with us at 12:45.

i will be speaking to the herbalife cfo. there are a lot of other stories. spent so much time in .he last few weeks talking >> whenever we see these major mobile disruptions, not to bypass the human tragedy, the real human tragedy in the ukraine in the middle east. when we look at these countries from a market perspective, what is the impact. now, when the middle east starts .o affect oil prices,

>> the results have been mixed. >> they are off 100 55%. that is a tremendous set of games. markets have recovered their losses and a little bit more beyond that because markets have recovered their half it losses and be on that. >> this is being driven by money printing. >> i would disagree. 150% inot ignore earnings. you cannot ignore a market that gets cut in half. >> you don't see the point that they're making that you not seeing analysts do their fundamental research when it comes to the fundamental economy because every banker has said, we will do whatever it takes. >> the analysts are supposed to be looking at specific companies. the strategists are supposed to be looking at macro perspectives.

the article yesterday showed how completely gob stopper they were by the rally last year and the recovery this year. >> the corporate earnings from the big leaders in tech, oracle, ibm, cisco. the biggest companies, hewlett-packard. they are not seeing sales growth despite spending billions of dollars in acquisitions. >> what about google, what about apple? you cannot talk about tech and ignore those companies. >> we will talk all about tech. morgan stanley jacking up what they are paying their junior bankers, improving their comps 25%. the youngsters are in leading from private equity firms. they are making that trade racing to go to the tech side. what do you make of this pay increase? let's this is and eat what you kill side. if they weren't making profits for the cup is that the higher salaries.

them ast to keep opposed to engaging in this sort of prisoner exchange. >> is this a signal that the ?treet is making a comeback >> how much are they spending on a few hundred. >> this is bankers, not the sales from trading, not the return -- >> no, it is as grinders they need to be putting together pitches at 4:00 in the morning left insane, why the hell do i want this job where i am working ?20 hours a week >> or go work at twitter, and i think that we are seeing a chairman this boom in the numbers of ipo's weather is a technology companies or a lot of other companies.

this is what you see in this stage of a market. bankers, they want bankers. the businesses are changed. i joined credit suisse in 1987. half of my trading program quit. going to california or to try to work intact because that was going to be the big gold rush. , they are trying to weasel their way back. could this be another sign that we are approaching the bubble? >> i don't know if they do a comparison. you companies that have been in 1999, no business model, revenue. , we are seeing mature companies go public with huge revenues, you journeys, and a reasonable team, very very different set of companies that are coming out today than 15

years ago. >> certainly more reasonable. look at facebook. observe the expensive now. see a lot more mature companies coming out but there still is that land rush to get deals out, to get public. >> we need to take a break. you will not be back with us, too bad. we're talking about your favorite restaurant. >> darden restaurants is looking for a new ceo. are currently leaving. argentina is making one more

attempt to avoid its second default. unlucky 13 years. this is "market makers on bloomberg tv. see our stories and interview online and bloomberg.com, on your tablet and phone.

>> welcome back to "market makers." restaurants finalize the sale of red lobster. the embattled ceo is officially stepping down. it long been under fire from the company's second-biggest shareholder. alix steel is here. love all of guarded. >> i've been there once.

so, this is a huge win. a couple of things happened. one, clarence otis is out. they are separated a the chairman and ceo role. the are giving seats to star board. they were unhappy with the fact that they would sell red lobster. they wanted to something tricky with the real estate assets. they had actually launched a proxy fight in may and they did not do anything to stop the sale. is this enough to stem the tide? of theyhe instead cup are upset about this. they are launching a proxy fight again filing pre-luminary materials with the fcc. they want the whole board. you think? >> i really have no idea. i cannot tell you. >> what do you think of this aggressive action?

>> for guys like carl icon, it has been enormously successful. there have been other managers that have achieved not quite as much success as carl, and this kind of hard to step in and say that we want every board seat, that is a little absurd. >> they would settle for a majority. the issue is that they are really invested. they have an eight percent stake. >> and they are entitled to every last board seat. >> part of the reason why they had to cave because of the board seat a cousin if a proxy battle lost in the entire board changes hands, they risked defaulting on their debt. they kind of got beheaded this in a filing last week and they came out and said, ok, we will approve your nominees. that's they kind of got ahead in this enough time in last week. they also said we will approve them, but we still don't like them. instead of constituting support.

>> they were protecting themselves. they are protecting themselves from possible default. they are not trying to get in bed with star board but nobody wants to default. >> what is the inside ownership for this board? are they about the same size as the activists or are they just running summary of his company? >> that is a really good question. we see a lot of these boards and they are supposed to be there representing the true owners and having a substantial stake. board has, the neither. >> you have got a ceo that has been sitting in that seat for what feels like an attendee. there is a good chance that that board is this crony board all on the same agenda and the only way you will get this company in another direction is if you truly clean house. >> a new ceo would not take that job of star board, why would you

take a job where you have the eight percent stakeholder campaigning against you? by de facto, they will wind up having more input. what do they want to do with the company? darden restaurants has been struggling. not only do you have slowing sales but they have not been able to turn all of garden around which is why they need to make the most changes, so will it make any difference? can have two must that they do it. >> they have a real macroeconomic problem that we have seen in this middle casual. when things go bad, people go down market to wendy's and mcdonald's. when things get better, it is nicer. they have to have a soft but not full recession. that is a weird niche. >> that is why you are seeing them want to get in. they probably want to sell all of garden real estate and rented

at which probably met about $2 billion or a want to split the company altogether, either keep their specialty restaurants that .ave been doing really well >> which restaurants? >> bahamas restaurants, longhorn. there are more like the theme restaurants. maybe split the two, split the difference and maybe that would be enough. >> thank you so much. we will have more "market makers" after the break. dairy is here today.

>> welcome back to "market makers."

there approaching 26 past hour. let's take you there. ups, a mixed picture. slipping after cutting their forecast as costs rose for holiday shipping. they actually beat their numbers for the quarter but when you think about what they will do year and, that is their big moment and the fact that they will spend upwards of 100 $75 million just to get ready for is aoliday season, that big knot. >> why do you think they will fall short? will be what, you and i interviewing him later in the hour. now you know the zingers will hit him with. time running out for argentina. tomorrow is the deadline for plane off creditors. -- for paying off creditors.

♪ bloombergom headquarters, this is "market makers" with erik schatzker and stephanie ruhle. welcome back to "market makers," i'm stephanie ruhle. now, he has a new show on bloomberg radio. masters in business. on to some big news, argentina on the path to default once again, but this time around it is not that it can't pay but that it won't pay. it is scott until tomorrow night

to get that money to bondholders. click sometime tomorrow. it is unclear because different time zones and whether the government or the clearinghouse bank that doesn't pay. sometime tomorrow, does not look like they will make it. >> why, they don't have the money? what they don't want to pay. in 2001, they defaulted, 93% agreed to restructure. seven percent led by paul singer and elliott management. out and they have sued and gone through the supreme court. they have held that because of equal treatment, they have to be paid what they were owed. the argentines are holding out for payment. they call them bulges, say they are trying to destroy the country. >> how can a sovereign debt

issuer be forced by the u.s. to make a payment hedge funds? can't they say, thanks for your opinion but we are not paying them, best a lot? >> they were issued under new york law in the u.s. sup and so they are subject to u.s. law which is why the seconds court of appeals had jurisdiction. >> i hate to defend the hedge fund. how come they aren't great investors when they are willing to buy your dad but when they want to get paid, then they are awful pollsters? -- vultures? they held the bonds were purchased at par. >> wasn't elliott management a later poster? >> so what if they were? >> even if they were, the law is the law and you're supposed to live up to it. the argentines don't want to pay

it because they don't like the law, not because they can't pay it. >> if you want to restructure a debt and everybody but handful of people are willing to do it, why would anybody agreed to restructure if you could just hold out and get paid 100 cents on the dollar. you are making debt restructuring impossible going forward if the current law is applied as it is. >> is not the current law anymore. these have been dropped from most sovereign on contracts and most contracts now include what is called a collective action clause. , 75% agreed to restructure, then you can force restructuring on the others. that is not the case for these bonds. so, it probably won't have a big knock on effect on others sovereign on issuers. ecuador went to market with new york bonds and sold them all out. ofi would guess that a lot

qualified institutional buyers that might've been distressed hedge funds. we are not calling them, whether it is ecuador, venezuela, or herbalife, when you're doing a roadshow and you're going to see all of the big investors, you're not calling them falter is, how do you do that now, that is what i don't get. it's one of the big issues that argentina has is that there is other clause in here. rights upon future options. if the argentines were to strike a deal with the holdout, they would have to give the same treatment to the restructured bondholders which argentina said would cost them $120 billion. expires december 31. legal analysts say there are many ways around it. the judges forcing them to do this, this doesn't even apply. this is what argentina is claiming is the problem.

>> there was a leaked memo in maine to the argentine authorities that said, you should default. that is probably your best option if the supreme court rules against you and then you go back and you issued new sovereign bonds in argentina, not under new york law. so, you can set the parameters and the rules. option.a possible >> you are working overtime tomorrow. what are you looking for? >> i'm looking for nothing tomorrow. they might make some minor adjustments about the state of the economy but they will not do anything. the discussion over these two days is really going to be about the exit shut ag, how do we start raising rates when it is time. >> are you focused on said day? >> the key thing that we're

his defenseis expectations being met, normally their predictions, not especially good like the rest of wall street, not particularly good forecasters. reducehey continue to qe, 10 billion a meeting said that by october, november, that done, will they begin to normalize towards the middle of 2015? >> the interesting thing to watch for this fall, it will not come out this time but maybe at the next meeting is that the fed has a statement that says, we will maintain low rates for a qesiderable time after the purchase program ends. well, it will end in october, so they will have to change that language. does that trigger a market reaction that raises rates even before the fed starts? >> thank you for breaking down all of the big stories here and abroad. stay with us, what will it take for the violence to officially

and in gaza? we will be hearing from the political leader.

>> a warning from israel's prime minister in two minutes and yahoo!. he told his country to prepare for an extended military campaign. havel says that its forces hit 60 targets. meanwhile, the political leader of thomas says that palestinians are not to blame for the outbreak of violence. -- the political leader of hamas says that palestinians are not to blame for the outbreak of violence. >> they started shooting. it is not gaza. defenseets were as a against the aggression. those who started the aggression , netanyahu and the israelis.

the question is, what follows. gaza responded. leaders, whynd the are they surprised the 70 the and was a possible for them to live here. >> palestinians cannot trust israel. >> do you think the solution is us? they are the occupiers. we are enemies. the solution starts with international communities galician to say to the israeli that they should stop, enough is

enough. they ought to compel israel to withdraw. ? we had a number of negotiations and the negotiations were failing. >> you can watch all of the interview tonight at 8 p.m. and 10 p.m. eastern right here on bloomberg. to bring in our middle east editor who is in our tel aviv bureau. give us an update. day ofas been another attacks inside of gaza and rockets being launched. there's also been further reports from the army of the mosque militants infiltrating into israel through the subterranean tunnels. the death toll exceeds 1100 palestinians and some 53 israelis as well. >> can you tell us about these tunnels?

well, israel says it has discovered about three dozen of them so far, we have about-different entrance shafts, they have some journalist allergies on friday and this extended two kilometers into gaza underground and emerged under greenhouse in the southern tip of gaza. what i was chatting with the finance minister, before we interviewed him yesterday, he was saying he would take another week to destroy these tunnels and that is the thing that is warring israelis most. much more than the rockets, the making deal with, the potential of a surprise attack with militants from these tunnels. >> this is very, so, we have the following the story, it looks like those tunnels are what makes this such a different situation than the previous israeli gaza version. the one before that, is the expectation that this is going to continue until the idf manages to track down nearly all

of those tunnels and destroy them? >> i think that netanyahu said that the objective of this mission, the prime minister says that the objective is to destroy these tunnels and extending that same that this is to have the gaza strip demilitarized. certainly in previous conflicts, they lined their missile-defense system, they have done an excellent job of keeping the vast majority of israelis and strategic infrastructure out of harms way, and if anything, they have been so successful that you can point the finger of blame at the iron dome for pushing thomas to take the war if you like below where it is much harder for israel to strike at will. >> doesn't that iron dome sort of allow the israelis to make these incursions with very little fear of repercussions, it has been 90 plus percent of those numbers. in terms of stopping incoming missiles.

>> the army does talk about a success rate of 85%. when i was speaking with the inventor of the iron dome just the other week, he was saying, there are a few reasons why it was set up, not just to protect israeli citizens and infrastructure from missile attacks but also it gives the political leadership time to decide what to do. it also can forestall a ground invasion. it was only when those tunnels were discovered and the israelis realized what a threat they posed that the ground invasion happened and that has led us of course three weeks later to where we are right now after a lot of fighting and as i say, no and inside despite the persistent rumors that a cease-fire might take place. agreeo saying that they to a cease-fire only for moss to say that had agreed to no such thing. >> you aren't tel aviv, do you feel safe? >> well, i have to say that at

half pace to when they sounded, the first time they sounded at night here in tel aviv, i wasn't feeling particularly great but by and large, you do see that they are continuing, people are aware of the people are perhaps going out with their children, less than they used to where the children might be sleeping in the shelters so they don't have to be woken at night, but overall, life is continuing as normal as you could possibly expect. when more than two and half thousand rockets have been lobbed at israel over the past three weeks. >> he want you to be as safe as possible from a thank you so much for the update and for joining us. coming up, betting that americans still love their staycations, we will be speaking to the head of a reit that invests from everything from movie theaters to water parks. stay here.

"marketme back to makers," i am stephanie ruhle. plenty of edge it minded americans are staying close to home. that invests in movie parks, family entertainment centers. we are joined now from kansas city. give us a snapshot of what the like based onooks your sensors. good shape but not wildly robust. we are experiencing very good traffic, very good spend, but at a lot oftime, honestly the more staycation type properties we have don't do as

well in the most robust of the economy but they are seeing very good utilization. good but not great. >> are you getting hurt in your movie theaters? this has been somewhat of a flop. >> the home viewing isn't much of a conflict is going to the theater. people like to go out and they don't like to stay home all the time. this is been a fairly weak release calendar. we are not sure how hollywood stacks this up or whether they are too conscious of the world cup. sometimes they will thin the release calendar. the calendar or media added by problems. it has been weaker we have seen this before and we had to record years in a row. with a little bit of summer

weakness, the industry is still just fine and the holiday season and 2015 is looking strong in terms of the release calendar. >> he mentioned the economy is pretty ok but not great. what happens to your numbers when the economy improves and we see last staycations and more people traveling to take the europe someplace warmer, , what have you. what does this teach your business? >> well, it moderates the growth. we see four percent sign -- six % growth in other aspects of the business in fairly modest economies. -6% growth inr other aspects of the business. you have a regular compound growth rate of three percent-four percent.

we are ok with that. it is fine, it is not a drag. it is just a little slightly the economy is slightly slower. >> in terms of your expansion plans, what else are you looking at, what areas do you think are hot, and what parts of the country are you looking to expand into? >> besides entertainment and recreation investments, we also have a significant amount of portfolio in the education sphere, notably with charter public schools. really part of a school bond, so they cannot finance their real estate well otherwise and we have almost seven hundred million dollars invested in that area and growing that by close to $200 million a year and it is a way of doing very well and doing a lot of good. >> help us understand how your expertise in entertainment, mini

golf, and water slides would translate into charter schools. squawks we are -- these are all attendance are parties. that is exactly what a school is. they might not look a lot the same on the surface or bring the mind, theyn your have a lot in common. they are driven by attendance and utilization. >> do you get any preferential tax treatment? >> no, generally not. in some cases, it is a state-by-state, there is some property tax exemptions because of educational purposes, but generally not. >> right are your most valuable properties, where are you making the most dough? ini would say probably more percentage rents, in some of our recreational properties, our golfpark, and our top

facilities which are golf practice facilities, the technology laden golf practice facility where you actually can, is a driving range but it is with very high and food and beverage, a lovely facility, it has technology for you to track your hitting and play competitively. those new innovative recreational properties in our portfolio that are using some level of technology are probably the ones doing the best, you are not only good bass runs but also participation rents because utilization is so high. >> what is the next great entertainment activity that is coming down the pipe? what will families be doing five years from now? >> i wish i knew completely the answer to that, i know what they are doing today than five years from now. as a finance company, really for great operators of entertainment and recreation. we tend to follow our clients lead in the dance and we are not the innovators as much as we are the financial partners, for

great innovators and operators. i have to tell you, we spent a lot of time diligent about great operators and great properties that replicate and expand them and help our clients. we are not as much the innovator and i will leave that for some of our great clients to figure that out. >> thank you so much for joining us this morning him in next time we will need to do this interview at a waterpark. properties,tr "market makers would back in just a moment, keeping up with the silicon valley joneses, we will see if twitter can do that when it comes to this out with their earnings after the bell. stay here.

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> something to tweet about. out in a few hours when weather comes out with their second earnings report what the numbers really mean. >> uber is going corporate. they are going after business travelers and big corporate accounts. erik schatzker is off today so we have a special treat, barry

ritholtz. morning we are digging a deep dive into what is making the tech sector tech. ick. the founder of softtech vc is with us the entire hour. jeff, you're a man who knows how to invest in tech. you tell us what is hot right now. >> it feels like everything is hot in silicon valley. you have marketplaces and the sharing economy which is really going across the number of different use cases. we talked about uber, have another number of joy that like home

will come and clean your house for $30. >> $30? give us the rationale. there is a market for everything. there has been a market for housekeepers for the past year. how did it suddenly start to cost 3$30? just an example of the utilities, getting a car, getting your food delivered, getting your food cooked to that is on-demand. >> a loss leader for people to find and get involved. what does that price eventually go to? keep these price cuts forever. if you have an apartment in manhattan it will cost them $100 or more to come and clean the

bathroom. >> you can drop prices and still make money. i think there is a price war on uber, and we will talk about lyftlater about uber and trying to capture the mind and heart of the consumer. supply and demand. ride for a a uber few dollars and still make a little bit of money. ? >> the key is scale and organization? >> and software, which as we know is better and better. they are the third largest company with a fleet. that trucks, couriers deliver food or anything that

you want. >> what is it called? >> postmate. >> is that your favorite investment right now? extremely well. what we have measured is that as the company scales the number of deliveries which is about 20,000 per week, we can start thatizing the direction the couriers will take an move from one part of manhattan to another. there really optimizing all of those trips. the few dollars they for each segment is actually earning the money. >> they can become more efficient. what is the next great area of unanticipated disruption? if there's know anything to anticipate because there is so much going on. at 400 to 700

opportunities, and europe for five investments that you can place a bet on what will be the next unique one. >> unicorn? decacorn? >> like airbnb. you figure out what is at the early stage, an interesting idea that has potential market for ur or five years down the road. >> i want to turn to twitter. reporting earnings a week after facebook wild investors -- wowed investors. can twitter keep pace? been the most

bearish analyst on the stock. tweet?'t you want to like twitter. i am on twitter. but it is a narrow cash splurge. urge. when barely profitable facebook was widely profitable at the same point in time. we have slower growth, lack of raw foods, and trading at 132 times ebita. without the profitability it is hard to recommend it. >> you're a shareholder of twitter. should we be comparing twitter to facebook and google, they are different countries that do different things. they are not burger king and mcdonald's. >> that is a great thing.

the biggest issue with twitter is not twitter itself, it was the market expectations. you recall, the original pricing range on the bankers was $70 to $20. $17 to $20. the thing is how they monetize. it is not their real customers, it is their advertisers. engagement love the idea that both facebook and twitter have, but at the end of the day global brands use twitter with her tv linkages, and they reach much more than they like engagement. that made change over time as the tools around it gets better. it, but in the

public markets, when we do not have the opportunity to invest in the early stages, we to tell investors what do you do with it here? two daysty is that after the ipo, it has been a pretty good bet to sell it. people realized it was not going to be as big as facebook. relative to the mass-market engagement, with as much time as theirr is talking about engagement on television, facebook killed them on the world cup. not just in reach, but engagement. it was twice what it was on twitter. talk a lotes not about this real-time tv engagement as much as twitter does, but they are actually doing better. the good news for twitter is that they understand this. they have changed the cfo, the

product manager, and so the good news is that twitter understands . >> the question is what will they do about it? >> yes. we will not see it this quarter. theyquarter is when did those changes. >> they are smart, they have fired a few people, they have hired a few people. the people who aren't -- are in charge of the advertising projects are very smart people. i believe that the acquisitions they made between mobile and the investors are actually very smart. they have advertising products and better data. i am long on twitter, but in the short run i agree that the forecast is not that great.

>> it is priced as if it is already there. if they were to grow their ebita 10 fold would have a similar evaluation. in 2018, it could be not as vague but have similar room of raw foods relative to the multiple you apply on them. >> there's both the business model problem, and the valuation issue. it does not sound especially enthusiastic, even though you user.u are an active unfazed, 22earnings ebita for twitter.

earnings,14 times seven times evebita. as public market investors you have to, they all trade together. a product.e sells me everything that i think is cool but apple, i pay them hundreds and thousands of dollars for. everything i like about twitter i get for free. for it by are paying lending your eyeballs to the advertisers. the business models are different, but i'm looking at the broader ecosystem of public market advertising. and google are very long-term looking, and a five to recommend between one share and another, i am going to say i , and you take

something that is an expensive look, where it does not expensive and its pieces. netflix is growing like weeds. there is a lot of other things you could do, and we have to make our bets. we say we like netflix and apple, with the google and facebook are starting to look interesting, the valuations are not egregious. priced,is egregiously and is not growing fast and is a bit narrow market opportunity. i do not see any ads on twitter the same way i do on my facebook feed. >> i block them immediately. that the good news is, probably twitter has more the page empty room on

to add more ads. i think facebook would add more ads. it is a big ad market, there's a lot of opportunity, a lot of people, and i will take my chances where i have better suite certitude. >> facebook ads hurt my feelings. nd botox.tening abou >> that is called targeted advertising. >> right there. >> that is what they call it. you -- >> he might have to leave, and i will take you to the seat. russia, the eun has agreed on a new round of

sanctions. peter cook as details. >> these are the stiffest sanctions yet from the european union. we have talked about them in advance over the last couple of days. this is them delivering on what the up provost for the last several days. a ban on russian owned bonds and shares. that french deal to sell the russians those two helicopter carriers, those will be allowed to go through. on energy sector are, a ban sales of technology that might help the european energy said sector. this is by far the toughest move by the europeans yet to impose sanctions on russia, and they go beyond what the united states has done so far.

do not be surprised to see the u.s. move as soon as today to match with the europeans have done. >> thank you. back among the nightmare before christmas. anothertries to avoid one this year. ♪

>> welcome back. is thanking e-commerce for strong revenue growth in the second quarter. the shipping company missed on the bottom line. shares are down more than 3% off

the news. the chief financial officer of the company joins us now. forholiday season is major you, but why do you need to drop $175 million to get ready for it? interesting time for us. we are actually seeing the strongest growth in our u.s. decade. in a are ramping up both capacity and investing in technology to handle the current growth and make sure we are ready for a seamless peak. >> what do you need to do? that seems like a big number. >> it is. but in our business these are great investments. we have said that 2014 is the year of investing for the customer.

we are enhancing our capabilities to linked electronically with e-commerce shippers. customers have availability whether it is on the road coming to us, or in our network area we are investing in expanded capacity, temporary operations to handle this existing growth in commerce. totalt percentage of your business comes from e-commerce? >> in the u.s. it is the strongest, about 45% of raw volume. .n europe it is about 25% that is retail in general. >> hello. competitorsthink of who are also clients? amazon drone and other things? are these concerns that ups has going forward, or do you look at this is kind of a niche him a small, future issue?

there is always going to be explorations and testing new market solutions. we think drones fitted to some of that. on the other hand amazon is a great customer of ours, and the goal is to stand in our customer needs. continue toe reinvest, create new capabilities, then we are confident that our customers will not need to build their own network. >> does that mean you're going to get into the drone game? yearsmay be a couple of until one delivers to your house, but drones may be a specialized niche at some point. right now we're focused on b the old-fashioned way. i love the old ups driver, but everybody loves jeff bezos. what happens if jeff bezos says

we are no longer using ups? wuhan much of a hit would that be? -- how much of a hit would that be? 10last year our top customers were 10% of revenue. we are big enough and rot enough that the concentration is not overly intense. make sure that there is no need for customers to build their own networks, that is not their focus. and that is why you see is investing in technology and automation, signing up our receivers so you can see what is coming when you order them. i know you're not going to be needing botox. i told you how much i love ups? [laughter] they make themselves more and more efficient and what else can we expect from ups in

terms of improving efficiency from gas mileage, hybrids, what are you looking at on the road? >> there is a laundry list. we are in engineering and technology company at heart. andre investing right now rolling out state-of-the-art technology on routing and scheduling. or 300y it takes 200 packages that a driver has and allows him to deliver those in the appropriate order, there is a tremendous amount of different things we're coming down the line. >> thank you for joining us. "market makers" will be back in a moment. ♪

yourming up, technology on

wrist. a breakthrough, or a gimmick? plus, bloomberg is putting on the pinstripes. ♪

>> live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle. >> welcome back to "market makers." erik schatzker is out today. the battle for your wrist. it is being waged as tech giants unveil smart watches that do everything from monitor your sleep to stream music. but is this more really worth it t?

is that enough, or is the next evolution smart watch? >> it is a very specific device that is a small version of your cell phone. there is a very specific audience that wants to have some of those features available on this wrist. >> the same people wearing google glass? that is who i feel is wearing the smart watch. >> it depends on the price point you want to pay for the gadget. you look at the samsung dear, success inome good terms of sales, but not much market product. iwatch something that will sell in the tens of millions of units? to replace this watch, which i consider to be a

piece of men's jewelry with a tech gadget? i am definitely an apple fan boy, i have way too many apple gadgets, but i will not wear and iwatch. the ability to know what sort of exercise i am doing. >> the one thing i had to say about the iwatch, i want to reserve judgment until we see it. , whenhe iphone came out the ipad give out, they were panned. people do not understand what these things can do until they learn how to adjust their behavior, and once they do that, you go back 10 years and you say you can carry more computing power than to the apollo to the moon in your pocket and it is touchpad and voice-activated command people would not believe it.

i do not know what the iwatch is going to do, we do not know what the killer app is. i'm willing to give apple the benefit of the doubt and say apple will not put this out until they're pretty confident. a very specific audience. very niche. ofwas announced in september 2008 at a conference, and they had 3000 pre-orders. time, they have the advantages of manufacturing for startups, it was very hard to win a over product on the market . >> i feel like that is almost the same description you just given of the smart watch. >> there was no connect the available -- connectivity available at the time.

a lot of people were using the fitbit, and it is scaling really fast. apple has all of this data on how people actually use their iphones, just like google does with android. they have the ability to say here are what people use the most, these are the top five most commonly used apps. it is more than the alarm clock and the weather, it is the run keeper.e run can they make this a compelling products that will make this the same sort of attitude -- sort of adaptation? >> to the millions who use these wearables actually use all of the functionality?

sleep, thecking my only thing i'm looking at is to have all of my lights illuminated by the end of the day. >> it gives you feedback on the one metric which matters to you, which is having on your 10,000 steps today? >you do not need to track calore intake if you do not want to. a little you to do bit, a lot more, or the whole s.t of function recall that mass market mess field devices we think about investing. my target is the appropriation even though i know in part it to that level of penetration. >> this is not a single purpose

manual, why would i want something that only does everything ok, while i could have a really good phone, camera, or laptop? don't you want something that is excellent that each thing rather than pretty good at everything? >> it was a compromise in terms of the first iphone. really good,ually there's no reason for you to have something else. i agree with you. what is the price point? is a luxury where there is a lot more gross margin to go around? or is it something which will be in the $50 range which is $99? >> there is a portion of the market that says i am not wearing a room or band on my arm for 24 hours a day -- a rubber band on my arm for 24 hours a

day. on social media, for you, what do they get the most valuable company out there? , because you 20% of the world's population on planet earth logging in on a monthly basis. all of these companies have unique engagement with their say theyd i'm sorry to advertisers.t as >> you think they are overvalued? >> at the end of the day, and the private market, it is supply and demand.

someone wanted to buy that $1.2 billion worth of shares, and they paid $10 million for it. >> yes or no? >> no. on uber.sed >> why? >> because when i looked at it and i not as successful, said no in june, and i said yes in september. >> stay here, we have more coming up. -- roade word warriors warriors will have a new ally. we will be talking to a talk secular from -- top executive from uber in a moment. ♪

>> uber is raking into the corporate market.

new have created software to make their business more service friendly. business rolls out today in the u.s. and canada. congratulations, this is big news for uber. when you think about who uses black cars most here and you nor in new york city, and his corporation. you have to win over a lot of accounts. >> we do. with the good start we have, people are already using uber , so it is going to be easier for them. greg so this was just a housekeeping issue? >> two issues. ernst we are going to make it easy for the employees to get their received from their system

directly into the expense system. travelwill give the cordon made her a -- word that coordinator aavel ashboard that they can use to coordinate all of their employees. ofit is just an endless pit money they are spending on car services. tens of thousands of dollars on weeks time they cannot get to the bottom of. >> if you are an expense manager at a company, you have dealt with paper receipts, vouchers, credit cards statements. we will simplify all of that and consolidate on uber. then they can see how much money they are saving and what better their employees are

getting. we are cheaper than taxis. mike steve need to branch out into this kind of business because you cannot be cheaper than a taxi forever? you can actually, when you do unique things with your business model to allow drivers to drive and ensure cars, we can bring it down pretty low. going tocan do that is be great for the corporation. >> are you going to kill the corporation when it comes to search pricing -- surge pricing? surge happens a really small percent of the time. >> i am not going to give you that. i'm happy to pay it, but it happens a lot. >> would you rather ruin your

coat in the range? in? saying iat is why i am am ok with surge. but will you be attracting these companies with this? >> they can give people an option. are thedo not feel we best in the most efficient at the time, they can use someone else. our mission is to provide the safest, most reliable ride. at any time we want you to get an uber in under five minutes. for a's talk regulation moment. cities like new york, chicago, and san francisco are where you're going to have the biggest corporate accounts. what is a bit like former regulatory perspective? done very well with big need forave a

efficient transport nation. we have a long relationship with the tlc in new york and have done a really good job complying with their regulations and getting them to understand the technology we bring to bear and how that might improve the city's transportation options for new yorkers. we have found the same thing in chicago with the mayor and the city council there. the same thing in san francisco. those are three of our earliest markets and they have done well. >> do you see yourself making an acquisition of a corporate car service? they're going to be susceptible, and that is a fleet of cars and drivers sitting meeting -- business.needing the business of enabling small business owners who own the cars themselves and want the freedom and the flexibility to work on the rubric technology platform --

the uber technology platform. >> is that tricky in any way? when it comes to having corporate riots, they want accountability. if jamie dimon does not depict them, they want a bat phone that they can call. if you can provide pickup in five minutes or less, than you can look on your phone and see the car coming to you, that is really good even for jamie dimon. >> for corporate accounts, what kind of cars will you be offering? will it be toyota camry's or the navigators? card types will be available to every employee. employers can set their own business rules if they want.

seeingy one what we're is that every corporation wants to offer every car type to their employees. >> how are your other new ventures going? tons of people are talking uber beauty. isn' it a success? uber beauty, uber ice cream, we are having fun. >> what is hurting? upi think we are, as a start of a are only four years old. we are learning every day how to improve what we do. we're also learning how to get into new markets that we have not been in before. we are trying to educate regulators to understand what we do, and why it is important for citizens and rides a better service that is cheaper and faster.

we want to do that not only in the u.s. but in the 41 countries we are in. >> what about a different form of transportation, like planes? >> we did have uber helicopter in new york this summer, so stay tuned. >> congratulations, good luck . you have some corporate accounts to go get. thank you. what do you think? minutes.ed seven it was faster than the taxi. relativelyst, reasonably priced. anytime you have more competition in a marketplace, you try to get a cab at 5:00

p.m. in new york, it is impossible. >> what do you think about the barriers to entry? do you think lyft is a true threat? >> uber has raised $1.2 billion, and they mentioned they will raise another $200,000. there is a price war on two fronts. for much do they pay their drivers, and how much do they charge to the consumer? and has a lot more scale, they can really compete with lyft in any geography they launch. unless lyft can raise the same amount of capital, it will be interesting as to who wins. >> do you think they can? so many people have uber mva. enfvy.

not invest in lyft? t not aiming downscale and uber is upscale? it is a volume question of any margin question. could both companies be very successful? i do not see why not. the question is, is there one company willing the entire ?arket -- controlling the entire market? the big question is can lyft raise the additional capital? on -- not want to bet there are other horses.

in the past, with all of the deals, groupon was the one to bet on. >> thank you for being with us. we will be back with more. ♪

>> that will be yet for "market makers." facebookve to had to

to see what direct marketing has to say about me. you can listen to barry here on bloomberg radio saturday 10 a.m. and 6 p.m. tomorrow i will be joined by a hip-hop mogul. to a special program recognize multicultural artists. for now it is 56 minutes past , and we are on the markets. ouright now it is time for options in sight. we have to look it were markets may be headed. been an interesting day, we started off higher, a little

more positive, and now stocks are coming off of that. how did we see the options andet react to that change in the equity market? >> we saw a little bit of a move but not much. ukraine,he war in the war in gaza, as collating tensions between the united states, western europe, and russia. i would expect to see a little more out of the markets than what we are seeing. point, we have a lot of investors saying they are buying volatility, betting on it going up. is anything going to move it?

it will have to be a catalyst within the united states or some real change within the overall crisis internationally. it is not expensive to hedge. the cost of going to cash is greater than going to the options market and buying a long put. >> let's move to individual s.ock indication on where twitter may go? >> it has been mostly bearish. close to even. buyer expiring this

friday. they are placing and near $4.45, moving around four --lars and a quarter $4.25. to anking further ahead event that may or may not happen, walgreens buying the rest of line foods -- lion foods. talk to me about your strategy. >> walgreens in blowing volatility is off the chart -- in employing volatility is off the charts. they have popped between 71 and

75. they're at the low end of that range from and think it will probably pop, and if they do the texan version it will go to around $70. 8. you buy the $72 call spread for under a dollar. that is a good risk reward, and that is the trade i would go with. >> great to talk to you as always. we will be on the market again in 30 minutes. ♪

>> welcome to "money clip," where we'd tie together the best interviews, stories, and videos in business news. i am adam in -- johnson. in companies -- the ceo of ubs talks to bloomberg about moving multiples tuples -- troubles. and tangling a timebomb of that. -- the most luxurious private jet and even billionaires cannot buy it. finally