>> live from san francisco, welcome to "bloomberg west" where we cover innovation technology in the future is this. alibaba getting more than 38%. also setting a record as the largest u.s. ipo ever. what is the future of the company? jacke an interview with

ma. huge lines around the world rated the arrival of the apple iphone. plusny locations the six completely sold out. we will look at supply concerns and whether the large iphones could cannibalize the ipad. oracle has been billions on acquisitions and has seen modest gains in revenue. now that larry ellison has stepped down we look into the challenges the co-ceos will face as they try to adapt into the cloud age. .irst, to the lead a historic day on the new york stock exchange is ali baba group started trading in the largest initial public offering and u.s. history. trading began two hours and 23 minutes after the stock exchange opened and when it did shares were a hot item. over 100 million trades were reported in the first 10 minutes

alone. shares nearly hit $100 before closing at $93.89. is sitting on a market cap greater than $231 billion larger than amazon and ebay combined. also bigger than facebook ready. -- already. the do you make of giganticness of that market cap? i just made that up. thet is interesting that market digested the so well. from the market machination perspective the ability of the near stock exchange and the special [indiscernible] is apparentlyff an amazing thing.

they had a lot of scrutiny at the time. i remember when oakley went public area the chose the ticker oo. written andets were people spent hours trying to figure out if they were zeros or o's. the market was able to tolerate this. >> does this put alibaba into context, you have apple the most viable tech company and google and ali baba. it is worth more than facebook and amazon and ebay combined. worth more than oracle. what does that say about the business? it says more about the investors. the business itself, the revenues and prospects -- profits are less than all those companies you list on any metric. what it says that the investors right now today and the numbers

can change is the investors thing because it is chinese and internet and because it has been well sold by the investment banks and the charismatic ceo, he is an incredible story and great salesperson. it is an amazing story. right now the investors in that deal think that the growth can reignite. the growth has slowed down and slow down considerably. thiscan reignite and if company can grow into the evaluation they are giving it today. >> we will have a discussion about what does alibaba do with the capital it has raised, what does ali baba do over the next several years to live up to this valuation but what do they do in the next week question mark -- in the next week? been's to the

employees because it is a distraction. the payoff they have worked some years for by taking smaller salaries and stock option risks seems like it is closer. they might not be able to sell it but at least the own it but in the case of alibaba it is a little bit different. i do not think we have the broad ownership of employees and it might not have the same distracting effect but the goal is to pretend like the ipo never happened. to use whatever financial leeway they have more of today and go on with doing the things that can make the company grow faster and make more money because they're going to have to to keep the stock price where it is. much more about alibaba to come. it's blood buster debut has propelled the founder to the top of chinese -- of the chinese rich list. past,ke about the present, and future. sayked him by what he would

-- about what he would say to people who doubted this would become this big. >> everyone should have a dream. what if that dream comes true? i believe that 15 years ago that this would improve the world, whether you believe or not, whether we will succeed or not. hardu do not keep working and working every day. if we will be here today. >> what will you do with this capital? well -- will you buy yahoo!? >> the important thing is we company,uild up the not the buying company. we want to make sure -- anything that can help small business grow we will consider. >> have you spoken with marissa mayer? talked a couple months ago

and she sent a nice meal -- a nice e-mail with congratulations. >> what are the challenges of being a global company and dealing with the chinese government? any government is difficult. if you do with them well and listen to their problems and solve it -- solve their problems, that is what we survived. in love with stay the government but do not love them. making sure that you solve the problem they want to self. u.s. expansion, you have said it is important. when will we see this expand? sold -- we want to sell more things. we are coming here to help a lot of small business which i think

a lot of things need to be done. it is not a competition. >> someone suggested a joint merger with amazon. >> that would be interesting. anything, anybody involved in helping small business, we will be excited. >> you have a lot of u.s. companies trying to expand but ceos are trying to get a leg up there. what kind of mistakes in the making? >> every market if it is the market economy you have to make sure you have the entrepreneurs, not only the professional managers. happy.make your customer have patience and have the time to do that. what we want to do is we want to help a lot of the small guys because big guys are already in china. small guys need help like us and

that is what we are excited about. >> alibaba is successful because it is so diverse and sprawling. what kinds of business ideas have you said no to? >> i am saying no to a lot of ideas because as the ceo i have to say no to opportunities because of i say yes i will get 5000 opportunities every day. everything is based on the mission. helping ewing business easier. it is that we will consider. if someone says we will make a lot of money, i am not interested. >> houston down a couple years ago and you are now executive chairman. i am the chairman. i focus my time on developing people and government relationships with all the nations that are helping small business and focus my time on expansion. i do not do this kind of operation work. >> what is your next surprise?

>> it is coming. >> how will you celebrate? we had a big dinner last night and everybody cried and we said 15 years we never knew, who are the people we should thank? it is not in us. that is why we put the young people there. we believe after 15 years the purpose of working hard as we want to make these people successful because when they are successful our success is a result. alibaba'srview with founder jack mock -- ma. keep up with the hype and continue to grow? that is next on "bloomberg west ."

>> i am emily chang and this is

"bloomberg west." we return to our coverage of ali baba's big debut. apiece a raised a u.s. record, 21.8 billion dollars in the offering. what will it do with all this new cash? our guest is with us from san diego. we heard about how to off feels -- jack ma feels. they are making strategic investments. what do you expect it will do with all this money? >> i cannot imagine how they will not be going out and aggressively acquiring. there has not been organic growth. acquisitionseen and an incredible number of acquisitions.

give them more cash and a fairly liquid stock, it is hard to imagine how they can do otherwise. if you look at get their track or ad they will be health field they stray in terms of dealing with acquisitions and then you look at the deal they written about a lot. it is not how -- clear how they benefit and we will have to watch for those transactions as well. cory, where do you think they put this cash to use? >> the should -- they should by all the companies that paul has invested in. one of them will be good. if not all of them. including the drones.

put cashpect them to back to work and then the question is open. do they make acquisition in the states and take those -- take those back to china or do they double down in some of the other things they have got going or in other places? has trafficna investments in africa and that is a place where innovation is touching down in a lot of mobile areas and they might want to have some focus their. india also a very interesting place. they could have some natural advantages. is a lot ofnt there interval companies that jack ma owns 90% of. they had to list them in the prospectus. mans not just the richest in china today but will be for a long time to come. a joint open to

venture. what did you make of that? >> i think you caught him by surprise. he did not -- maybe he is a great actor but he sounded like that was something they did not give a lot of thought to. this is a basis that big mix of general electric and chipotle. and you ringmodel it to markets. like africa and it is well-suited. it is much less well-suited to her during with advanced companies in north american markets. >> what you think investors and the public will want to see if they are to succeed in the united states? >> the u.s. is a little bit of a red herring. i know they talked about it and has aw that jack ma

special affinity for this country but when you look at the , international business as a percentage of revenues has gone from well over 20% three years ago to just 9% in the quarter they just reported in. international is a smaller part of business every single quarter. it has been a very consistent trend. that is because china is growing so fast for them but the notion that they will be a big player in the u.s. is to look in the wrong place for where they are growing and is likely to grow in the near if not far future. >> should international become a smaller portion of their business? want toying that they focus internationally. there is gross to be had everywhere. is -- thes but this

project is an interesting experiment. things that do not happen much in tech. gross by geography. -- growth by geography. like sub-bullets. those are the strategies to watch. china will swamp everything else but in the long run you will see the geographic pickup but it will not be in the u.s.. >> we are continuing to talk about alibaba throughout the show. one of the biggest winners in the ipo was softbank. the biggest shareholder. coming up my interview with the thinksking about what he is in alibaba's future.

>> welcome back. the biggest shareholder is japan's soft bank areas the same company that bought sprint last year. the company owns 32.4% of ali baba and made the decision not to sell any of its stake. i had a chance to talk to the ceo about why he made the long trip to new york for today. historic moment and i am happy to celebrate. >> you're not selling any shares today. how did you make that decision? >> this is only a beginning. >> you have had a years long relationship. what is that like? >> he is my best friend, best earner. it is a lifetime partner. >> what do you want to do next?

>> they continue to grow inside china but also [indiscernible] york makes ain new good entry to the global expansion. >> he is open to a joint venturer with amazon. what would you think of something like that? >> i do not know what he said. thinks [indiscernible] and anything can be possible. it makes sense. >> how would you like tm to expand? technologyhas great and a global market. they want to grow.

>> had to you make sense of the acquisitions in the strategic deals they make in the sometimes unrelated industries like a soccer club or a football club. how does that make sense to you? -- they allonverse converse and they'll need to have the internet content, .nternet delivery, >> what are you going to be doing? japan's first richest man. how do you plan to spend your earnings? of dreams. lots this is the beginning. journey.ginning of our >> you do a lot of philanthropic efforts. tell me about those. >> there are many people who need help.

earthquake and nuclear accident. i feel we have to contribute something for that. friendis your [indiscernible] doing? .> he is a fighter he is like me. we start from nothing. he is an odd printer. winning.to fight for why did it not work with t-mobile? >> we cannot make the decisions. some the else makes the decisions. >> i asked what he was going to , would hes capital buy something like yahoo! but

someone -- would you ever consider something like that? >> that is a dangerous question. softbank -- the ceo of softbank. ♪

watching "bloomberg west." am emily chang. shoppers waited in long lines outside of stores to get their hands on the latest iphones. police officer's had to put up your kids as the line stretched more than 10 box. the stanford apple store got a special visit from tim cook where our cameras caught him posing for selfies with customers and employees. can the new iphones live up to the hype? i get to try it out this

weekend, i got the iphone 6. phones they're going with. six plus.ing a 64 gig are not nervous about the screen being too big? rexam looking forward to the change. >> color? >> slate gray. >> it is very important. whatever you choose it makes a statement. one ago 128? these phones are a steal. i do like the color choice. >> i got 128 as well. memory question. i want the biggest one possible. i am going with a 128 and the

six plus. -- both of ust sleek aprised at how phone of that size could we. the phone works for me. i think it is interesting the way the offering of this six loss and of all the memory for theelps raise asp's product create the average price could be quite high because of the offering at the high end of it. let me ask you what do you make of the potential of that as a phone that drives the business? >> all the indications are that is the case. they have extended lead times and into october. it bodes well for people to advocate up in memory density. why not get the more loaded

phone question mark apple make margins on its components. this is good news for apple. >> the line was 13 blocks long at the fifth avenue store and there were lines in san francisco and palo alto. at this point do you know what is more popular, the iphone 6 or the iphone 6 plus and what is supply looking like? >> in terms of popularity we do surveys so we have been at six stores and i have not seen the results but it looks like the six plus has been more popular. in terms of capacity we will have a good read on how that has been trending. cory has hit the nail on the head in terms of profitability. on supply-side it is a total wild card. we will get a better read as the weekend progresses and we call stores.

>> in terms of the next few days what sort of flags are you going to be looking for in terms of how well the phones are doing? question we are starting to see the upside. we have been doing checks in the supply chain and they cooperate and we do anticipate upside for a lot of component manufacturers. we like prospects were qualcomm les.for kno read what is supply versus demand but both phones look like they're doing well from a component perspective. >> where it -- what do we know about the tentative demand with phones that are off contract and consumers who are able to buy a new phone in ways they were not

in previous grades? u.s. have looked at the with verizon and at&t. that pool that is upgrade eligible is 20% bigger this year so all -- that is a nice tailwind. iphone sales were relatively flat. they need that tailwind. that is a benefit that the iphone will have over the next couple of quarters. >> apple is planning to unveil the new ipad in mid-october. how concerned are you you about -- are you about cannibalization? ipado people need a many ipad, will that be more popular? rex we think the six plus will cannibalize the low-end ipad and we have asked that question our surveys so we should get a

better method -- mathematical read but it is safe to say there is no reason to get an ipad many. -- the big picture is this. cap novelization is good because asp's.igher important swing factor is china. jean is right. prospects are very good for the iphone in addition to the unit volumes. we are talking about the larger screens that can eat into that category. china when the phone goes on think iti don't -- i is a win and we will be opening up the floodgates. this week china mobile announced they are increasing their

installments. i think china mobile is getting ready for a flood gate of iphone sales. ipo has brought in billions but who stands to gain? that is next on "bloomberg west ." ♪

>> welcome back. ma is not the only person celebrating newfound wealth. many of the companies' workers are getting a big and well after

selling their shares. have could this affect china's economy is to mark -- how could this affect china's economy? i know a few employees who sold early and are kicking themselves right now but how many employees do hold shares and how much do they have? backs we know it is over 5000. probably as large as 6000 and the total amount is $8 billion. that is a lot of cash. >> the structure of dealing out equity, is that different from companies like facebook and google that we are more familiar with? >> most have not done what alibaba did. they took a page out of the playbook of western companies to employees ando

even past employees. that is with this group came from. >> what does it mean for these employees? we know that many people in china are getting richer and there is a rising middle class but what impact do you see this having on the chinese economy? of --y will be a lot there will be a lot of mai tais consumed. people who do vested and started startups. a lot of the people once they have finished will think about sports cars and luxury items and some of this will go back into startups. >> we also saw 4000 current employees and 1000 former employees in the offering.

what does that tell you? interesting. it is unusual to have the lockout and a large chunk of the shares that are being held. they are know how many selling. sold that speaks to the strength of the shares. it could still go up on the open. >> there are lots of people -- reasons why people sell. i do not know what that means for the chinese ipo. how different is it and what might it mean given where these people come from and what their family wealth is and what kind of bump this might mean to their personal wealth or standard of living? >> this is unprecedented.

it is like a mini stimulus package. a billion dollars goes a long way even in my neighborhood. -- $8 billion.rs we talking about a very widely amount of money. it will be interesting. it has never been seen before in china. the place where alibaba is based. what does it mean to have some -- in oneh and one concentrated location, with that change the area? >> this is not a poor part of china. it is pretty well off but this is a shock in terms of stimulus to the local economy i am sure. it is very happy lace today.

-- place today. valleyople in silicon might investigate other businesses. .here's that same spirit >> this -- these people suddenly find themselves with the footage he shot. it is known as one of the most enterprising areas in china as well as location in the south. they have the talent and the sea they -- it can be done. these are good things in terms of putting capital to where the talent is. your commentary throughout the day.

i will be back with you after this quick rate. larry ellison has stepped down as the ceo of oracle but does that mean he will be any less involved in the operations of the kind -- company he founded? onis next on -- that is next "bloomberg west." ♪

>> welcome back. i am emily chang. we want to follow-up on a story. on august 12 we spoke with john mcafee about his life after fleeing belize where he is wanted for questioning in connection of the murder of another american businessman. he made certain positions concerning the prime minister of the leaves and the government and said he intended to post videos and evidence that he claimed to show the government is trying to kill him on a web sight he started.

none of the evidence he claimed to have had has been posted on the site. he has not responded to our requests to provide the evidence. lawyers sent bloomberg a letter denying the claims and bloomberg has not been able to independently verify his accusations. we do not agree with or endorse his claims. a titanic change in one of silicon valley's most legendary software company. larry ellison stepping down as ceo of oracle. the only ceoeen in oracle history. can they share the role and successfully turnaround their declining growth? johnsono ring back cory and eric cantor bidding editor. now that we have had what he hours to digest this what is your take on how they can

actually work together? workthink they can together fairly well. my problem is i do not think larry is going anywhere. in a sense, larry is working for the people who work for him. he will be the cco underneath to people who work for him as chairman and if we know anything about larry ellison that means he is still in charge. lisonhad gone on here is el has never liked dealing with investors and never liked dealing with customers. he gets to focus on product. by handing off those duties he gets to walk away from two things he does not like doing and yet remain in charge. position.nique he tweeted that there

will only be one ceo, larry ellison. he may have wanted to the company do you think they will have any autonomy? both -- ata dig and them both. he picks up the phone and can call any ceo in america and try to convince them to buy some software and software wrapped in hardware. an amazing story. 10 or 15 years ago she was another banker and now she is the most powerful woman in the history of american business and technology. is in this dominant role and is an amazing story.

while mark has a focus on is the things, safra person who has long carried larry's flag into every discussion and every thing that happens. -- she speaks the oracle voice in that company and make sure things are run according to the spreadsheet. she looks at how things will functionally help that company and guy that company strong way. at least -- she is six years wenger than mark hurd and can look at how -- with that means. >> how will you assess whether or not this arrangement is working? is going to be a tough one. what you have to look for, we want to see some sort of re-energizing of the company.

it is kind of flatline. member of ther silicon valley rest out. -- rust belt. these companies have lost the plot. i would look for a sign that they have got the plot that. there are lots more jumping up and you seeut cloud a change in the company in terms of its temperament and your beginning to see a turn. i am hugely skeptical that this turn around.h will >> is it possible that this cloud computing world, throwing anything you want that is just a lower revenue business and that it will never be as big as the old world of software that oracle was the clear dominic

dominant king of? >> no. their business model is predicated on higher sales and it will always look like a toy to them. box oraclet of the finds itself in. newhe same time, most companies are growing up and cannot see any rationale for large-scaleore mega-database product. >> it is time for the bwest byte. so much as happened between oracle and apple and ali baba. the number is 32. 32 technology ipo's pending,

twice as many than a year ago at this time. 157% more. they are looking to strike while the iron is shot. chokeure the market can't town more tech stock. -- down more tech stock. >> anything you have your eye on? >> there is so much in numbers terms. in terms of the underpricing and issue.isis -- you about what they wanted to do and why. left moneydefinitely on the table. .

for watching. have a wonderful weekend. ♪ . .

>> this is taking stock. i am pimm fox. today's theme is historic. historicresh off a initial public offering. u.s.s surged in its trading debut. its founder jack ma turned the $60 dream into a stock valued