>> live from pier three in san francisco and new york. welcome to bloomberg "west." i am emily chang. ahead this hour we're just hours away from learning alibaba's ipo price. the chinese e-commerce company will buy shares this afternoon in what could become a record-breaking ipo but ahead of the offerings still concerns about the corporate structure and risk to investors. apple ceo tim cook takes a shot at competitors like google and facebook as he affirms the commitment for the use of privacy. cook says apple does not scan

your e-mail, messages. telling customers up front what exactly will happen to the personal information. applying the internet of things to wheelchairs. we will speak with the 16-year-old inventor and in turn to find out how they are hoping a chipmaker design a wheelchair commended by stephen hawking's. >> alibaba pricing the record-setting ipo in just a matter of hours and ahead of tomorrow's trading learning at least six big institutional investors including lack rock antiroll price will be among the shareholders. not everyone is so enamored with the idea of investing in china's largest e-commerce company. senator bob casey has written to the sec saying the review of the corporate structure has been inadequate. the senator says he is still worried about the risk to u.s.

investors and the senator joins us right now from washington. thank you for joining us. cory johnson also with us from san francisco. what risks in particular are you concerned about? >> i am concerned that disclosures alone would not be enough. i think there is significant risk that investors should be protected from. part of that is making sure the sec can do everything they can. i wrote to them in july to make the point and even as we are in the final hours before we learn more about this deal, and also, whether or not investors will be protected from what i think is a risky proposition. >> there are plenty of chinese countries -- companies trading. what is it that makes alibaba unique or are they not unique? >> part of the problem is we

have seen a similar concern layout over the past couple of years. we have seen not just concerns raised by this particular ipo had a lot oflready work done in the aftermath of perverse mergers and pointed to all kinds of problems with that. i do not want to see a repeat of that in this circumstance, even though i am sure there are some that want to go forward and make money. that is fine. i am just asking for a substantial measure of disclosure. i am asking the sec to tell us whether they have the resources they need to do the kind of oversight and enforcement in the event there is a problem. i think that pretty substantial risk here and i think the can -- sec can do more.

>> are you suggesting that should not be done and the sec needs more funding and resources. the sec should tell us that. if they say they need more resources, i will be the first one to advocate for the resources. the main thing in the short run is making sure any risk to investors, any information in front of them that it the information be presented to them. i do not believe, i should say, we are at the point where i feel confident that they have adequate information to guard against a pretty substantial risk. >> you raised the issues initially back in july. what kind of response have you gotten from them so far? >> you may have seen the letter. it was responsive but i think not responsive to the extent that i would be satisfied that

investors in the united states would be fully protected. might be a difference of opinion, but i think the letter speaks for itself is responsive in terms of some of the questions i raise but not responsive enough in terms of the sec taking the steps i would hope they would take and if they do not have the resources or authority to come to us and in theor help here legislative branch of government. >> what exactly do you want them to do? they need to clear the offering before it starts trading but there is no indication they want do that. what exactly are you asking for? contained in not just the letter i sent yesterday but the july letter that i still believe they are not guard against. from alibaba's own filing that notes it chinese regulators deem variable

interest entity to be noncompliance with chinese law, the company could read forced to relinquish our interest in the so-called vie's. that is a myth filing. fears willome of my not come to pass. i am concerned. this is the kind of structure, and this kind of an ipo. document, the sec filing is an incredible thing, many hundreds of pages. page 11 of the document there is an amazing graphic that shows the organizational chart of what you are buying when you buy shares of this company and it is so convoluted, the structure yuan, cayman islands holding company. thatns things in china

have partnerships in contracts with but not ownership of other things owned by the ceo that i try to simplify and another chart but the complexity is the kind of thing we have rarely seen in recent public offerings. does this risk remind you of other things that have blown up with u.s. investment to? >> certainly it has the concerns that i have and the parallels are what i mentioned before is the sec had to spend a lot of time and investigative work and in a sense, oversight in the reverse merger situation. a problem that exceeded $18 billion as a result of those perverse board -- mergers. we do not want to see that play out. i hope that a lot of my concerns are turning out to be not as

significant as they -- as i believe they are but i worry some of the risk that folks do not understand in some of the complexity in these kinds of structures, and therefore, the transaction that you point out, that kind of complexity is one element of the concern that i have and i think heightens the risk for investors. >> senator bob casey in washington, thank you. continuing to wait for ali baba ipo price. will the ipo itself set a new local record? we will speak to a tech investor who has worked on 100 ipos in nearly 35 years in silicon valley. ♪

>> i am emily chang. this is bloomberg 'w"west." return to alibaba.

joining us now from stanford, sandy miller. than has worked on more 100 ipos and focuses on investment in tech, internet and digital media companies. welcome to bloomberg "west." curious how big of a deal you think this is in the grand scheme with everything you have seen in the past decade? >> it is really important, one of the biggest of all times in a variety of ways. it will be likely the biggest ipo ever in the u.s.. perhaps globally the only bigger one would have been another chinese ipo price outside the u.s.. really a dominant position in the u.s. and what will be the largest market in the life -- in our lifetime. we all know this is kind of the final confirmation of that if

you will. this is a really thought after ipo for a non-us company. i think it is important thing. it also points to the preeminence of the u.s. capital markets. alibaba could have gone public in hong kong. they chose the u.s. maria affirming the u.s. is still the dominant capital market in the world. >> you also said not the be all end all. what do you mean by that? >> a lot of people say if it does not go well there is no tech ipo. i think it is wrong because it is truly of special case. it is big, going to appeal to a broad holding of institutional investors. really a core holding for any equity money manager globally. certainly here in the u.s. and all around the world. ishink if it goes well, it obviously better for future tech ipos near term but i do not that it paves the path

guarantees their success. and conversely if it trades disappointingly, and i do not think it will, but it would have a near-term impact negative on the ipo market. .gain, it is a special case >> we will talk about upcoming tech ipo in the moment. do you truck the leadership -- trust the leadership did in the complicated structured? >> we are not an investor and i do not know the company in that intimate way based on what i have seen in the market, it seems like company extremely well-positioned to compete not only in china but here in the u.s. and around the world and doing well in other countries. i have no reason to have any other different opinion than that but i am not an insider. alibaba is a very complex company. do you think investors really know what they are buying other

than china's largest u.s. company? >> i know the corporate structure is very complicated, and i think investors are relying on the bankers and lawyers to sort through that in the proper way to make sure the vehicle they are buying will work fine, and i have a fairly high degree of confidence in that. i think investors tend to look at the economic substance of what they are buying, and i think alibaba is a very substantive company and i think it is priced in a way that reflects good value to investors. it is a complicated business so there is no real direct comparables him a but if you look at their growth rates and their positions and the various sections in which they compete, it looks like they would trade at a discount initially to are companiesicly held and they are a leader in great scale and growth so it seems like a great opportunity. >> what other companies are you

watching coming to market that we should be watching, to? >> there is a whole bunch coming. they are all well short of the scale of alibaba. i would rather not come -- comment on any specifically. be on theem happen to near-term calendar. i am excited to have the alibaba deal get past, because everyone has been waiting for it. while it is not the be-all, end-all, it has dominated the roadshow schedule in the attention of investment banking firms and so on so getting it out of the way will be a good thing for other tech ipos. >> we will be watching tomorrow and after that, sandy miller, thank you so much. remember to catch the alibaba special tonight, documentary. the alibaba store -- story airs pacific andern and

10:00. stay tuned for the half-hour bestial. hits storesphone tomorrow, tim cook has a message for customers. find out what he says about apple privacy sectors and how they differ from other companies next. ♪

>> welcome back to bloomberg "west." i am emily chang. apple has updated their privacy policy in an effort to reinsure users they are safe. they updated a statement on the website. feasible toly not respond to government warnings for the retraction of the data. privacy has become a key issue

for apple as they prepare to roll out new payment services that will require people to trust it with sensitive information. joining us is cory johnson. andhiggins who covers apple joining us from san diego, general partner paul could draw straight -- paul could kidoskry. >> one reason is because of privacy issues and the league of photographs. whether involved that involve the hacking of the servers, it did not really matter because there is a perception they have been lacking in security. secondly when you alluded to this author top, a whole bunch of new services are a part of the new iphone 6 launch all require you to agree to sharing of data, specifically health data or just adding a new keyboard that allows you to have data flow out to other servers

and people are understandably nervous that it all will fall apart. >> earlier this week tim cook spoke to charlie rose and use the word offended when talking about how other companies use our data. take a listen. are not in that business. i am offended by it. i think people have a right to privacy. i think that is going to be a very key topic over the next year or so. will reach higher and higher levels of urgency as more and more incidents happen. >> more from the letter today, we do not build a profile based on your e-mail content or web browsing content and do not monetize the information you store on your phone, do not read your e-mail or messages to get information to market to you. what do you make of the town of

the remarks that seemed to take direct aim at other companies like google, facebook? >> definitely trying to differentiate themselves. there is concern among customers that the data will be mined and how will both be used especially if you put health data out there. interesting today that i just got back from the apple store in san francisco where a dozen people are lined up and not one person mentioned concerns about privacy. >> to the point, none of those have found themselves hacked recently. at the same time, offering of othersper is less and with more intrusive things that get deeper into people's wallets. you can imagine the concern is very different. and my mother has an iphone likes it but concerned about

what information will be there and who will be able to access it. we saw the attorney general earlier this week. seeing in the new updated policy more details on that. >> let me ask you about this section. there is a talk about something is different where they took out the section 215, the notice they have not gotten the privacy request from the federal government or nsa. that is not part of the privacy statement. a lot of people reading between the lines that they have been asked and cannot talk about request they have gone from the government. >> that is right. people treat them as footnote canaries. if it ever comes out of the document again, they cannot talk specifically about the request that has been made that the review -- removal of the footnote tells you all you need to know.

some sort ofy in requested cannot talk about. yet another reason why you should be very conscious about what that apple privacy policies are. even some of the other stuff is just marketing bafflegab. did not mean anything at all. >> what about users being more concerned about other things, like people complaining about ios8 taking up too much space in the have to delete and the big gathering initiative that they were not able to release because those are>> both of entertaining issues. the former in particular. the fact that you cannot install it on many devices. that goes back to the facebook and google problem. the reason they collect data is because they have free products. apple does not collected because asbury products. gigabyte version of the iphone knowing full well you cannot install anything on

it. that is way this loops around. >> they said they're working on it and hope to have a fix out by the end of the month. bloomberg news and tim higgins inky very much. what lessons are security firms learning from the home depot breach? the icloud hack? find out the plan for tracking down hackers behind attacks like these next. ♪ the hour,tes past which means bloomberg television is on the markets. i am julie hyman. taking a look at where stocks are trading. we have a rally being led by financials today. better than expected data on jobless claims in the fed meeting yesterday fueling gains. an individual stock we're watching is right eight cutting the full-year forecast comes saying lower reimbursement rates and higher drug costs are eating into the bottom line and also blamed lower profitability for newer generics and a delay in new pills coming to market.

aooking at shares of conagr with first-quarter earnings that beat estimates. keeping the forecast. more coming your way next. ♪

>> you are watching bloomberg "west" paris focus on innovation, technology in the future of his. i am emily chang. cyber security firms are seeing the attacks as opportunities. announcing two new products and that stopping attacks like these. information about the actors and malware behind the attacks. also rolling out an adaptive defense security model. so how exactly can these tools stop the attack? we are joined now from martin

view, california. you have been following these attacks and learning from them. you the mostt to about the jpmorgan and icloud hack? anything surprise you in particular? >> thank you for having me on, emily. we did learn things obviously in a number of the recent breaches going on. probably two things that jump out at you is number one, the security breaches are inevitable . we continue to see them not just and retail sectors and thinking retails -- sectors that health care, transportation, legal industries. the offense has become very strong. not only seeing the attacks from china but seeing them from russia, from the middle east. the tools and techniques the end-user very complex. of the most hardened companies in terms of security

posture are getting breached. breaches are inevitable. introduced isas trying to develop a new model, bari adopted to help the companies deliver a better solution. >> let me talk about the technology of what you are unveiling. how does this take into account and what is new? >> we are introducing what we believe is the first security as a service. because weword believe there is no silver bullet with just the product. there is a fantastic rod that. we really help with protection and capabilities to find the breach. where some of the companies have learned as well from their recent breaches, you need to be able to respond to the breach. you not only need technology but experts as well. packaging of technology, expertise and offering it as a subscription, service to the

clients. we are doing it from the smallest to the largest, around the clock and around the world as a utility, if you will. that can help companies who do not have the expertise or technology to create a better posture him help them respond faster and detect faster. we think it is the first of its kind. ?> is it fail roof >> it is never fail proof, but i think the current model we are seeing are blacklisting any virus top -- virus type model is really yesterday's type of model. most companies still rely on that as their primary defense. we have developed virtual sheens, service capability and have really improved the detection but most importantly improved the response as well. if we can cut down the breaches which is measured in hundreds of days to minutes, we had decreased the risk most

companies have. if we can get it down to minutes, we can really help companies like the ones you mentioned not have any issues or vulnerabilities. i think this is the architecture of the future. you have to apple trying to ensure customers about their privacy and security. what do you make of tim cook's note to customers and taking aim at other companies like this book and google based on the way they collect information? i am a big fan of what apple is saying. i think privacy is really important. i love their ability to authenticate and cryptic the information related to observers is important. i would caution over -- about over pivoting towards privacy. this creates full mobility. we need to have a balance. not too much security. not too much privacy because

that can create security phone abilities. i think apple needs to be in the middle. it's sure they're working with governments. we want to eliminate terrorism, crime. we need a cooperation. privacy only can also have a shortcoming as well in the form of security. i think there needs to rebalance. >> the icloud hack. a lot of attention even though the system was not breached. seems like they were able to try get in a passwords and very traditional way. is apple more or less secure than some of the other technology companies out there? >> what i would, and on is you can see how easy it is to breach the environments. icloud is no different than a large corporation, retailer or bank. there are so many phone abilities -- former a

vulnerabilities because of the innovation. but as a result, the other side of the coin is all of the ofeated random packing passwords against icloud proves it is pretty easy to get in. that is where n think it is really important, balance between privacy and security, hardening the security architectures are critical in making sure he prepare for the future because now the critical infrastructure -- the very things we believe are essential and vital to operate the world and the global industries have to be protected. the terrorism we are seeing, crime we're seeing. it is making it really important to manage. i really encourage everyone to think security as well as part of the equation. you saved the new technology can identify actual hackers. how close can you get to catch a great question.

i think this is where fire i really offer something unique. not only do we offer intelligence about what the threat actually is in the form of an advanced persistent threat or malware but we tell you who is doing it. we have been able to inventory and chronicle all of the adversaries around the world and track 300 different groups. we respond to incidents is happening around the world and we knew who they are. he put out a massive report that was all about the chinese intrusions. we check -- track the russian intrusions as well. just aoffering not threat to score but contractual information about the risk. who is the adversary? and chinese military group or russian organized crime group? this is really important, too, because you need to respond, this pending on who it is that

is attacking you. sometimes that can be the difference between a very small incident and a very large scale billions of collar -- billions of dollar cost incident. this is important intelligence we think we can deliver that is important in industry. back thank you for joining us and unveiling new products today. google, mercedes now allowed to take self guiding cars to california streets. wind out why the dmv chose these three companies to leave the vehicle testing in the golden state. ♪

>> i am emily chang. this is bloomberg "west." california preparing to share driverless cars. california's dmv also released a set of guidelines for testing. these include ensuring the cars for $5 million each and using specially trained drivers.

for more i want the story from the deputy director of the dmv. cory johnson with us. i have ridden in a self driving car in california. they are are ready on the roads. what does this actually mean? this stuff is just to put in place regulations to allow autonomous vehicles on the public roadways here in california. prior to september 16, there were no regulations that govern how testing would occur so we developed these and just became effective tuesday. >> how did you pick these three companies including google that is not actually an auto company but a technology company? >> we have been working with all of the automakers, google included and they have been very open. we put in place the regulations to allow them to apply to us for the testing permit. those three companies were the

first to apply to us. audi received the first testing permits followed by mercedes. there are others working with us on completing their application. as soon as they are done and we get a chance to evaluate them, they will receive them as well. >> what is the economic impact you imagine this decision will have? >> there have been a lot of reports about the different economic impacts that autonomous technology will bring. from our standpoint, the reasons they are important to us is the motoring public. we want to ensure the public is safe as they are tested and more importantly, as they are deployed. so we want to put in some really good rules, rules that make sense and rules that will keep the motoring public safe.

>> what do you think the biggest challenges you are facing getting self driving cars on the road? >> there are a few. of them is the acceptance of the technology as a whole. moving forward in different ways. they have their own technology. they have proprietary systems they are working with. and we need to have some insurance that they are states as they are being deployed. with that, we have to work closely with the automakers to gain an understanding, , toamental understanding ensure it is safe. charge.our the automakers by and large have been very open and accepting of sharing the information with us. >> why should this be a state issue and not federal in terms

of testing these vehicles on the open road apco >> that is a good question. it is a federal issue. actually an international issue. a have been working with number of foreign governments that have contacted california about what is happening in california and we have been working with them. australia, canada and sweden just to name a few of the governments that have on talked at us and have been interested in what we have been doing. this is typically done at the federal level. highway traffic safety administration typically develops regulation at the federal labor -- federal level that develop safety features within the vehicles. they admit they are a number of years away from developing regulations so there is a lot of pressure on states to develop their own regulations because carmakers want to move forward with the technology. that is the reason states have

been tasked with developing their own regulations. is ensuring they are compatible with one another. so we're working very closely with the number of different states and what we're doing and what they will be doing. >> i guess california drivers will have to be a little more comfortable with the self driving cars. thank you so much. now a check of your top headlines with mark crumpton. so great to see you here in the flesh. so much.you chuck hagel says the united states will fight islamic araight -- islamic state stream excusing the thruway approach by kurds and iraqi security forces. he also told the members of the house armed services committee that the u.s. is prepared to invite increasingly sophisticated types of assistance to those group's. some air france pilots threatening to strike

indefinitely if the demands are not met. the airline in the midst of the most disruptive strike in 16 years with 60% of the pilots walking off the job. it is said to cost the airline nearly $20 million per day. boards as members of its improperly accepted watches valued at more than $26,000 each. the ethics committee says accepting such gifts violates rules. the members have been ordered to return the watches. $26,000 each. >> wow. what is coming up for the top of the hour? >> ukraine's president is in washington and addressed a joint meeting of the u.s. congress today. he asked lawmakers to provide legal assistance to the military . the president is also a jeweled to hold an oval office meeting with president obama within the hour. we will get analysis of the

situation in ukraine with john hirst, u.s. ambassador to ukraine during the administration of george w. bush. that is coming up at the top of the hour. >> we will see you in a few minutes. back to you -- back with more after this quick break. ♪

>> welcome back to bloomberg "west." the internet of things is being applied to just about everything including wheelchairs. cory johnson with more. crazy story about a robot up sus teenager and terrific idea to change the world for tens of thousands of people who live their lives in a wheelchair. i sat down and we talked about working with stephen hawking's about designing the chair. i asked him why he took this idea to a wheelchair? >> i thought why don't we connect a wheelchair.

>> what kind of connection are we foundbout here? >> out there were three colors of data most important to the user and industry. we collected data from the wheelchair insult through an intel gateway solution by plugging and sensors on the wheelchair. we collected biometric data using a harness the collective breathing rate and heart rate and things like that. -- that biometric data was the chair data itself. >> we have an app made for android. you can map the accessibility of different places to know whether there is a sidewalk that you can get up out of the danger of the street and crowd sourcing safety. lex you got to put this to use with an intel him fully. talk me you are quadriplegic,

correct? what does this mean for you? >> it promises safety for me. promises improved health as well. it doesn't in the couple of interesting ways. it monitors an acute problem so if i were to fall over onto my knees, it could tell if i am being across my knees and able to notify someone. currently it does not do that but has the potential to do that. it is a really big problem. i know three people personally who had died from it. >> i saw a statistic that 100 people die every year just not being able to find the right ramp to get off of a dangerous street and onto a safer sidewalk. a car is veryby common. >> talk to me about what else they were meaning. having high blood

pressure. something like that where people could take action on that immediately. it's actually quantifies. it actually allows the user to look back at the history of data problems mayhat exist so they can begin to tell where skin problems are beginning to occur, health problems and things that are not really a cute but may happen over time and be able to track those things and make adjustments to keep themselves healthy. >> are those issues that are more acute for people who live in a wheelchair? there are the acute issues where you fall over but there are picked problem's in health and your skin issue or blood pressure issue that happen and being able to monitor different aspects of your life and skin and your health and seeing what

correlates to other problems or in other areas can allow you to make adjustments and keep yourself healthy. >> i guess the way the chair is better, what doesn't mean for the internet of things? put, it sends the data to internet gateway solution. collecting the data that is already being generated by the wheelchair. people who can find value and create apps and doctors can potentially access the data live . maybe even something as crazy as a virtual checkup. are the sensors and chips so cheap and common enough that this is not a $100,000 device? >> this can be put on any existing wheelchair. we have three different wheelchairs we have been mounted on. just with the technology inside of it, just a few hundred

dollars compared to a $30,000 wheelchair it is a drop in the pocket. >> truly fascinating because it suggests the use of internet is not ge jet engines or wind turbines that makes lives better with regular people creating a much better industry. >> when you connect the device with such a small device, it is of the $50p that price point and only about this big. can- makers and developers accelerate items and not have to spend millions of dollars to sell a product. it is really cool. 19-year-olds can write code for this. isn't that wild that the freedom ceo chair is 19? >> what a great story. thank you for bringing that to

us. stay tuned to bloomberg television for all things alibaba. ♪

>> from bloomberg world headquarters in new york, i am mark crumpton. this is "bottom line." today, president obama meets with ukrainian president petro poroshenko. and we will have a sneak peek at jaguars new class. to our viewers here in the united states and those of you joining us from around the world, welcome.