the new york stock exchange and san francisco, this is "bloomberg west." today we are covering alibaba. alibaba has officially gone public on the new york stock exchange, has gone up to $100 a share, down to about $90 a share, but it still gives it a 223 billion dollar mark cap. i spoke with cofounder jack ma as well as the ceo and chairman of softbank. you will see those interviews over the next hour.

first, i want to talk about what is happening here. i want to bring in leslie picker, who has been on the floor with me every day leading up to this idea. we also have one of the earliest investors in alibaba. cory johnson is an san francisco. leslie, i will start with you. does this mean they let multi-billions on the table? >> i was watching the price discovery process happen and i was with some of their underwriters going -- that was higher than we expected. saw this coming. people thought maybe $85 on the first day, not this. this is pretty high. especially on such a big deal. if you are a big mutual fund and you take a billion-dollar stake in this company, look at what you have made in one day. ipo, not just $100 million where you have a million dollars

here, trading up 75%. these are big gains for those investors and money left on the table for the company. >> still the largest ipo in u.s. history. any concern that money was left on the table today? >> i think the successful ipo is somewhere between 10% and 20% increase on the first day. this is a little bit high, but from the benefit of having long-term shareholders that stay with the stock long-term, i think they did the right thing. it has, it looks like gone smoothly, we did not see the hiccups like we saw on facebook's day of trading. it seems like everything is going as planned. >> a viewer sent me a bizarre trade quote from the nasdaq, the first trade at $150, and then later said it was canceled. we will see how the dust cleared. there is a room in the new york ,tock exchange, in the basement

where the questionable trades happened. sorting out what happened today. even goldman sachs did a great job with this today. they will be busy until the wee hours tonight. we will see how the straight overtime but there is clearly an appetite for the growth that alibaba suggested it may have, even though the numbers show us growth is slowing down, and an appetite for the risk of alibaba's structure, the fact that it is a cayman islands pieces company, holding of a bunch of companies in china, and the fact that investors do not have a clear stake in all the entities that make up alibaba. today, investors do not care and people are jumping in with both feet. >> one of those people is jack ma. when i spoke with him today -- leslie, you have been speaking about the company. there is still some time to share additional shares. >> this mean that they will

likely sell on the green shoots, just to help the underwriters. buy will buy it back short, it back at the offering price, helping to provide some stabilization in the market. they do not have to do that today though. they can do that tomorrow or in the week. the timing is uncertain. if they decide to do the overallotment, which they likely will, it will be the biggest ipo ever. >> you got into this company earlier than almost every other investor. ink about ali baba's journey with the company was like when you invested compared to what it is today? >> we have had a long history, we have known jackson's 1999 when they started the company. one of my cofounders was one of the investors and in the first round of the company, and we have known them for a long time. in 2003, when the opportunity came to invest, it was an $8 million investment.

at around $180 million valuation, we were scared. we thought it was a fairly expensive deal at the time but it has worked out for us. the thing that struck me the most was the opportunity for growth at the company. is doing something interesting, allowing chinese manufacturers or the first time to show their goods online. it was a hard process and took a lot of tools and technology around that to help these manufacturers get their product catalogs online, but jack saw a vision of helping these manufacturers trade with the rest of the world. we saw a big market opportunity. the second was how jack ma was running the company. he is one of the first chinese ceos that we have seen that actually wanted to hire really smart, talented people that would challenge him. very few chinese ceos at that time were willing to do that. it was really hard for many chinese companies to get control of their business, but jack did from day one.

by the evidence of his partner. really excited about that investment, and having the trust in jack overtime has been great. >> one of the great questions for me -- jack ma talked about how we think about shareholders. he says customers first, hareholder second, -- for investors, all of us that follow the company, what does jack ma think about the investment? does he feel that he has a responsibility to the people that gave him the money or does he need to take care of his company, tough luck investors? >> you have to separate the issues. that particular alipay situation, there are some

circumstances with regulation that you have to take care of. they did a good job trying to address that issue with the spin out. a good job for jack ma but i do not know about the rest of the shareholders. >> this morning he said just wait. i cannot say what i will do, but just wait. it will always benefit you as part of my triad. customers, employees, shareholders. when we first invested, jack said, you do not come first. you are third. i want to take care of my customers first, employees second, and then you will be taken care of if i do my job right. it has always been the same story. obviously, we have done great and investors today will do great. would you like to see ali baba do next? it has been a 15 year journey, but what happens after this? >> three major efforts going on right now. continued attrition in china. as i said in another interview,

china's consumption per gdp is 1/10 of the u.s.. in the last 15 years, the chinese people have moved 15 million people into the middle class. these consumers are just now learning how to consume. if you go to china, they are still trying to figure out what to buy, what to wear, and they look to the west or a lot of these influence. it is a huge potential for the chinese to consume more. they may not consume as much as the u.s., but more. so there is still growth in china for alibaba. the second piece is international expansion of e-commerce. i think they will do that well, given that they have the global market manufacturer in their backdoor. all these manufacturers now have direct access through the ali baba network. the biggest losers are the retailers, whether walmart or

target or other stores that sell goods. many of these retailers sell chinese goods. they will be facing some margin issues because you can buy the same thing on ali baba much cheaper. the third piece is the vertical position of where they will go. you have seen them invest in media. they will do investments in search and mobile technology, and gaming companies. you will see more investments across the digital media landscape as they try to get more vertical. i also expect them to get bigger into advertising as well. says he is also open to a joint venture with amazon. thank you all. we will hear from alibaba chairman and founder jack ma coming up, and it is iphone day. i got my iphone 6. we will talk about apple as

well. ♪

>> welcome back. floor ofve from the the new york stock exchange where alibaba has made its public a view. i spoke with chairman and founder jack ma. a big day for him. his closestome of friends, alibaba customers, jet li was here, whom he started a tai chi school with, as well as and chairman, ceo of softbank, the largest alibaba shareholder. jack ma had a vision for this company back in 1999 before the internet really even existed. he thought the company he was creating could be big. people at the time thought he was crazy. i asked him earlier today what he had to say to alibaba doubters. thisthink, as we give souvenir today, that everybody

should have a dream. what if that dream comes true? i believe that 15 years ago, that the internet would change china, would improve the world, with you believe it or not, whether we would succeed or not, but somebody would. if you do not work hard and do not work every day, nobody has a chance. i never knew we would be here today. >> what do you do with all the new capital, would you buy yahoo!? >> i do not know if they would sell. >> would you consider it? >> we want to build up a company , not a buying company, we want to make sure our ecosystem he lps the small guy. anything that can help small business grow we will consider. >> have you spoken to marissa mayer? couple months ago and yesterday she sent a nice e-mail to me congratulating me. what are the biggest challenges of being a global company and dealing with the

chinese government? >> being a global company dealing with any government is difficult. it is a great opportunity if you deal with the government well and communicate with them, listen to their problems, solve their problems, tell them your problems, that is an opportunity for communication. that is how we have survived the past 15 years, always trying to say in love with the government but do not marry them. that is our philosophy. making sure that you solve the problem they want to solve. >> you said it is important for u.s. expansion. when will you expansively to delete -- expand significantly in the u.s.? inwe have started already some places. we want to sell more things. we are coming here not to compete but to help small business, which i think, a lot of things need to be done. >> someone suggested a joint venture with amazon. would that ever happen? >> really?

you are the first. that would be an interesting talk. as always, anybody that involves helping small business we will be excited. >> you have a lot of u.s. companies trying to expand into china. many countries have failed but ceos and tech leaders are going there to get a leg up. what are they -- what mistakes are they making? >> every market, if it is a market economy, you have to make sure you have the entrepreneurs. not only the professional managers. my view is to try to make your customer happy instead of your boss. making sure people have patience and have the time to do that. what we want to do is help small guys it has the big guys are already in china. the small guys need help like us, and this is what we are excited about. is successful in part because it is so diverse.

i'm curious what kind of business ideas have you said no to? >> a lot of ideas. as a ceo, i have to say no to opportunities. if i say yes, i would get 5000 a day. whether yes or no, everything is based on the mission of doing business easier. it is on that that we will consider. says, we can make a lot of money, i'm not interested. down as ceo a few years ago, now executive chairman. are you still the ceo? >> no, i am the chairman. i focus my time on developing people, on the government relationship with all the nations helping small business, focusing on global expansion. that is strategic thinking. i do not do any of this operation work. >> you surprise us all the time. what is the next prize? >> it is coming. >> how will you celebrate with your cofounders? >> we had a big dinner last

night, everybody cried, we said, well, 15 years, we never knew. who should we thank? customers, the people. it is not us. that is why we put the young people there, the customers. years, we, after 15 want to make sure that these people are successful. when they are successful, our success is a result. ma, cofounder and executive chairman of alibaba. after they started trading today, he went to lunch with several high-profile u.s. ceos, jpmorgan, larry think, blackrock , tim armstrong. also coming up, we spoke with some egg chairman and ceo masayoshi son, alibaba's largest shareholder. we will also be talking about the iphone release. tim cook visited the apple store in palo alto.

much more from the new york stock exchange and san francisco, coming up. ♪

>> welcome back. made itsba group has official public debut. the stock soared to over $100 a share, now trading at about $90. either way, a massive start for alibaba. 100 million shares changed hands in the first 10 minutes. joining me now is the head of global listing for the new york stock exchange. in regulations. so far everything has gone as planned. how would you describe it it has been -- how would you describe it? we have been focused

this morning on making sure the process was transparent and that everybody knew exactly the time and the breath that we would open the stock. i thought barclays and goldman sachs did a great job signaling to the market where it would open. i thought it was seamless. nobody wanted to see what happened with facebook on opening day. what kind of tests and preparation did you do to make sure that it would come off? >> we had three different industry tests designed to allow market participants to send in a high amount of orders to make sure that an opening auction goes well. we traded nearly 400,000 orders at that time. that is significantly greater than we did in the twitter ipo which was close to 20,000 orders. well over orders of magnitude greater than that. thoset to make sure that tests allow market participants to be able to test our system. everything went well so far today. >> are you surprised by the price how far it has gone up?

>> i did not have an idea that we would be at the levels, but as you started to see the morning open up, you realize that when we started to indicate in the 80's there were no sellers. early on i said that this was a chase to find sellers. 90 $2.70 the beer at did you find sellers in the transaction. >> how long have you been working on getting alibaba to list here? >> we have been working with them for about two years. that is pretty typical with a process that we have for companies. for this company there were a lot of issues just getting the company to consider the united states. the early parts of the process we were focused on governance, issues that we would be focused on here in the u.s., and as we got closer, once you get to the u.s., your choice of where to live. >> you met jack ma and masayoshi son. what were their concerns going into this? washe entire process

designed to be transparent and very methodical and they were ont focused this morning executing it flawlessly. they hired a tremendous team of advisers to surround themselves to make sure the execution was perfect. you said it properly. the entire market and world was watching for this ipo and we wanted to make sure that there was confidence around that process and that everything would go well. so far we have done our job. >> you are ahead of global listing, so what other companies are you watching? >> all eyes have been focused on alibaba today. we are already looking to the next couple of weeks, anticipating over two dozen ipos, 10 billion dollars of ipos coming in the next couple of weeks. everybody in the tech space was looking at this deal to see how well it would do. now that this has happened, it opens up the floodgates for others. we have deals coming in from outside the u.s., financial

groups, a number of technology groups right behind him here to the nyse. we are pretty optimistic about the next couple of weeks. scott cutler, global listings at the new york stock exchange. the day is not over but good luck and congratulations. coming up, we will talk about apple and the new iphone. i love mine already. a new iphone just feels so good. when we"bloomberg west" return. ♪ >> it is 26 minutes past the hour which means bloomberg is on the markets. let see where the indexes are trading. a down move on the s&p, only .1 %. the dow jones also little changed but with a green arrow. the nasdaq, the biggest loser. down half a percent. i want to highlight jet blue. take a look at their shares after a season we'd shake up.

dave barger is retiring in february and will be replaced by current president robert hayes. the airline also announced it will be charging passengers for their first checked bag and squeezing more seats onto the plane. ♪

>> welcome back to "bloomberg west." i'm emily chang. alibaba has started trading on the floor of the new york stock exchange today but it is also a big day for apple. the iphone 6 and iphone 6 plus are in consumers hands. i went with the six, gold, i am loving it. i change from black, felt like doing something different. joining us now from minneapolis is gene munster. is with us from san francisco with our editor at large cory johnson. i want to start by asking all of you, which phone are you going to pick? gene?

>> i am getting the 64 gigabytes x plus -- 6 plus. >> not nervous about the screen being too big? >> no, i checked it out last week and it feels like the right anger looking forward to the change. >> color? >> slate grey. >> it is very important, the color makes a statement. >> i don't know why you would short yourself on the memory. why not goes for 128. i like the color choice as well. >> cory? memory question, it's interesting. i went for the biggest one possible because i never have enough memory. i am going with the 128, 6 plus. gene and i talked when we saw the phone, we were surprised at

how sleek a phone of that size could be. i have big hands and the phone works for me. it is interesting the way the offering of the six plus and all the memory helps to raise asp's or the product. the average price of an iphone for apple could be quite high because of the offering at the very high-end. alex, specifically, what do you make of the potential that that is the phone that drive the business? >> all indications are that that is the case, the larger phones have extended leadtimes into october. so many of them are selling out bodes well for people to gravitate up in memory density if they cannot get the more affordable one. why not get the more loaded one? we know that apple make some pretty attractive margins for its components. so all of this is good news for apple. >> i want to talk about demand.

i know the line was 13 blocks long at the fifth avenue store in new york, lines in palo alto as well. gene, what is more popular, the iphone 6 or the 6 plus, and what is apply looking like? >> we have been at six stores today and i have not seen the end results but it looks like popular.s is more in terms of capacity, we will have a good read on that. we could compare the two past years. --s the nail on the head hitsit's the head -- cory the nail on the head with the supply side. we will have a better read once we begin calling stores. >> [indiscernible] >> i was going to say, over the next few days, what sort of flag will you be looking for in terms of how well the phones are

doing? prior question, from a supply-side perspective, we are already starting to see the upside. jmp securities has been doing checks on the supply chain. they corroborate a sellout situation for the phones right now. we anticipate upside for a lot of component manufacturers in the december quarter. we like prospects for qualcomm, sky works, so the iphone is off to a great start. let us not forget as well that started manufacturing later, so it is hard to read what is apply versus demand, but both phones look like they are doing well from a component perspective. -- >> in terms of upgrade, what do we know about those phones our off contract, consumers that were able to buy a new phone in ways that they were not in previous upgrades? >> we looked at at&t and verizon in the u.s..

the bottom line is that pool that is upgrade eligible is about 20% bigger this year versus last. so all things constant, that is a nice tailwind. iphone sales last year were relatively flat, so they need that tailwind. theyis a benefit that iphone will have over the next couple of quarters. >> we also know apple is planning to unveil the new ipad in october. how concerned are you about cannibalization of the ipad mini if the iphone 6 plus is the most popular? it is reported that the 13 inch ipad is coming out, will that be more popular? will think the 6 plus cannibalize the low-end ipad. we should get a better mathematical read on that today, but it is safe to say there is no real reason to get an ipad mini. the larger screen you are

reporting, that is a different segment they are going after, so that's ok. the big picture is cannibalization is good for apple because that means higher asp's on the 6 plus and higher gross margins. >> what is the biggest question that you might have to answer after today, when we see sales numbers from apple over the weekend? >> one important factor for apple is china. ne is right, prospects in north america are very good for the iphone, edition the to the unit volumes, the largest brains are eating into that category of android phones where they have not played before, higher asp's. but when the phone goes on sale in china, we will be opening up the floodgates. let's not forget that this week china mobile announced they are increasing their base tuition installments. i think china mobile is getting ready for a floodgate of iphone sales. curious to know exactly

when these iphones will start selling in china. i have not even gotten to use mine yet because i have been so busy but i will report back on monday. , everyone. coming up, i will be speaking ceo andayoshi son, chairman of softbank. and the largest shareholder of alibaba. ♪

>> welcome back to "bloomberg west." i'm emily chang. in addition to jack ma, the alibaba chairman, a big contingent from softbank was also here. of course, their largest shareholder. --lso spoke with base hit ceo and chairman masayoshi son. after today their state will be 32% and decided not to sell anything today because he believes in the alibaba story so much.

he is only in time for a few hours. i asked him why it was so important to make the trip today. >> this is an historic moment. i am very happy to celebrate. >> you are not selling any shares today. how did you make that decision? >> this is only the beginning. >> you and jack ma have had a year-long relationship. what is it like? >> he is my best friend, best partner. it is a lifetime partnership. alibaba toyou want do next, what else would you like to do? >> alibaba continues to grow inside china but also globally. this ipo in new york makes a good entry to the global expansion. today that hed me is open to a joint venture with amazon.

what would you think of something like that? >> i do not know what he said, always think carefully. anything is possible if it makes sense. >> how would you like to see them expand in the u.s. and abroad? >> alibaba has a great form, great technology. look at the global market, there are so many small that they want to grow. alibaba provides a great partner for them. >> how do you make sense of the acquisitions and strategic heels of they make in seemingly unrelated industries like a soccer club, football club, pharmaceuticals, film, how does that make sense to you? run, they all need to have internet content, internet delivery.

so it is all converging. >> what are you going to be doing? secondyou were japan's richest man, i believe the first richest now. how are you planning to spend your earnings? have local dreams also, so this is just the beginning. do a lot ofu philanthropic efforts. tell me about those. >> there are many people who need help. feel -- there was a big earthquake and nuclear accident. i feel like we have to contribute something for that. >> how is the new ceo of sprint doing? >> he is a fantastic guy, a fighter. is an underdog and he fights

back. he is like me. we start from nothing. he is an entrepreneur. he loves to fight for winning. >> why didn't it work out with john legere and t-mobile? make the decision, somebody else makes the decision. asked jack ma what he would do with his -- with the capital that he gets today. would he buy something like yahoo!? someone told you that sought they could buy a company like yahoo!. would you ever consider that? >> that is a dangerous question. [laughter] >> he did not want to answer that question. masayoshi son, chairman and ceo of softbank. again, only in town for a few hours. he did not even make the launch of the jack ma is going to with

several other high-profile ceos. he is already on a plane back to japan. it's been quite a day here on the floor of the new york stock exchange. to bea and masayoshi son quite approachable. of course, it is a happy day for them, but they were willing to take selfies. i got a couple, one with masayoshi son, one with jack ma. blurry,little unfortunately, but a good memory of what has happened here today. coming up, we will be talking more about alibaba and where they go next now that it is a public company. ♪

>> welcome back to "bloomberg west." i'm emily chang. live from the floor of the new york stock exchange where alibaba is now trading $91 a share, more than a $220 billion

valuation right now. we want to talk now about one alibaba does next, what do they do with all of this new capital? i want to bring in paul kedrosky, also an early stage venture investor. our editor at large cory johnson is back with us. paul, what do you think alibaba should do with all this money? i think it has to start doing some acquisitions. i don't see how -- you generate this kind of capital from a public offering, it's possible they could say they are waiting for strategic capital but the expectation among investors is that you will see acquisitions. you asked about yahoo!, probably the most widely expected example. i do not know if that is the one, but i'd expect to see a series of acquisitions over the next 18 months, which is what we

saw in the last 18 months, so nothing new. >> he did not give us a straight answer but my interpretation was not exactly the route they were thinking. charles, what is their next that now that they have more money to play with? >> i think they have been saving for this for a long time. keep in mind is not just a $22 billion in cash they raise today but they have converted their shares into something liquid. when they go on a shopping spree, they have at their disposal not only the cash but a new currency in the form of shares. >> charles, what do you make of the growth rate for the company? it has slowed down quite a bit before the offering. what do you think of that? whohere are a lot of people are concerned about a variety of things, and in particular, looking at $90 a share, you talk about a multiple in the 60's, relative to the trailing 12 months. >> 60 times operating.

that is big for a company growing at 20%. >> it is really big, although last order was 46 on the top line. >> we are talking about operating earnings, right? >> yes, but this is a high-margin business. the multiple is still very high, but the thing to keep in mind with these multiples is these are backward looking. these companies are growing at 50% a year, which means in a year or two, the earnings could be double. in that case either the multiple comes down or the stock price goes up. i think a lot of people are betting on the latter. >> there are so many different possibilities, jack ma has made it clear international expansion in the u.s. and europe is very important in terms of next ups. i asked about a joint venture with amazon, would you be open to that? he said yes, they would be open to that, so paul, what do you make of that? >> i think he will say yes to

almost anything today. probably sleep deprivation kicking in. biggerossible, but the problem they have when it comes to the u.s. market -- i keep making this point, and not to be mean-spirited -- but honestly, their product do not fare particularly well in paired with some of the category leaders that are mostly u.s. based in the markets in which they sell. the reason alibaba has been successful in their core market is, in part, the support of the chinese government, but also the absence of competition. on a head-to-head basis, it will be a different story competing with people that have been brought up in amazon or ebay. is different here. what do you think, charles, what is the likelihood alibaba could become a dominant force in the u.s. market? some u.s. businesses use alibaba.com, but still on a rather small scale. jack will have to see how

plays his cards. i think the two areas they would be interested in getting some help -- one is mobile. even in the chinese market they are behind $.10 -- tencent. they have a play with weibo, but they want to strengthen that. the other thing is global, you cannot walk into established markets and say that we are going to own the market. that is why they will be looking carefully, probably not organic. probably will want to find a partnership. paul, you talk about technology and the lack of competition. the company spent about 10% of sales, a little bit less, on what they call product element. they be we think of that as r&d. is that the kind of thing that they will spend more on, to have a better ease-of-use, or is that something that they will get used to not spending a lot of money on and stay where they are? willt only do i think they

not spend more money, i think if they did, it would be a huge warning sign. that is not the way they grew the business, not where the competency of the company positing executives are. they will continue to grow through acquisitions, not through organic growth, research and development, building next generation products. if they ever start head faking in that direction, it is time to take a closer look and likely run. kedrosky, charles lee, so much to watch with alibaba in the years ahead. thank you both. it is time now for the bwest by te. cory, what have you got? >> the number 52. is the new co-ceo of oracle. with that promotion, -- this is a great story. i will call her the most powerful woman in the history of

global business, not technology, not silicon valley, but she is now ceo of one of the biggest companies in the history of mankind as a woman. .o-ceo with mark hurd she has always been a very powerful person, the consiglio area to larry ellison for a long time, the enforcer down there at redwood shores. now she has the ceo title and it's worth noting. isco-ceo with mark hurd, who 57. still lots of questions about how well they work together. larry ellison recently celebrated his 70th birthday. i thought it was interesting, mark benny from salesforce tweeted that larry ellison is and always will be the only ceo of oracle. what do you make of that? on the one hand it is a compliment but on the other hand, doesn't mean that larry ellison will be rolling from the backseat? >> i think it is a sign of appreciation, if you want to read behind it. also suggesting that oracle is

old and salesforce ain't. catz is the person to watch in this whole deal. she was a banker at dlj, a top a person that has ever been in silicon valley, super, she understands deals. she ushered or call an insular company doing well through acquisitions, by understanding those acquisitions. she has a tight fist around how the company is run, ruling by spreadsheet, running their legal maneuvers. it is an impressive moment for her and all women in business, i think. inoracle a huge company but terms of market cap, not as big as alibaba is now. closing out "bloomberg west" trading at $91 a share. we will be following alibaba throughout the day. that is it for "bloomberg west."

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from bloomberg headquarters in new york, i'm mark crumpton. this is "bottom line." today, scotland's first minister follows -- resigns following the no vote for independence. lining up and waiting for a chance at an iphone 6. to our viewers in the united states and those of you joining us aroth