emily: a technical glitch cripples the new york stock exchange. his high-frequency trading to blame? ♪ -- is high-frequency trading to blame? alix: i emily: i am emily chang. this is "bloomberg west". investors pouring money into uber'ds chinese operations. we will look at what microsoft ceo has plan next.

bret taylor is here. all of that is ahead on bloomberg west. to our lead. the biggest interruption and stock trading in two years. the new york stock exchange shut down for hours today on a technical glitch. there is no indication of a breach. orders were forwarded to other exchanges. the exchange opened the head of the closing bell. big concerns about china and greece, a selloff. was the malfunction a natural outcome of high-frequency trading. i am joined by cory johnson. matt miller and cohead of equity trading, as well as joe greco. walk us through what happened. >> at 11:32 a.m. they have proms

with the financial exchange system that it uses to allow buyers -- they had a problem with the financial exchange system that allows us to speak with buyers. it didn't work and they had to stop trading. they canceled all orders, sent them back to brokers. they did not reopen until three hours 40 minutes later at 3:10 p.m. it was the longest halt on the new york stock exchange for a technical glitch i have seen. although, it has happened before and they have had longer stoppages. not in recent memory. a real blow to confidence. the good thing you can take away from this is -- there was a lot of price stability, not a lot of discrepancy. and volume continued as brokers

were able to route orders. they route orders to a dozen other exchanges around the country. because of that, they did not have issues with volume or price. emily: let's start with the joe. it high-frequency trading play a role? >> i can't say they did or did it. i don't know the postmortem. this was a technical issue at the new york stock exchange. whether a flood of orders came through or what caused the outage, we will find out later on. we do have an equity market that is complex, and unnecessarily complex. some people argue the fragmentation of stock exchanges and dark pools was a good thing. that is false. competition is a good thing, but excessive fragmentation creates unnecessary arbitrage opportunities.

maybe you don't need one stock exchange, but you don't need 11. if you look at the numbers today, volume migrated to four other exchangers, and for different exchanges did not pick up volume. i would suggest that any exchange it has 3% market share or left does not deserve to be a protected asset. >> what joe is alluding to our systematic changes. there's a reason the new york stock exchange has engaged in this massive technological upgrade to chase after the revenues provided by high-frequency trading. they gone through in almost changes in the hardware software, and the physical infrastructure, to try to bring high-frequency traders into that exchange. alix: isemily: is it up-to-date? >> the systems are needlessly complicated. they've added so much technology and software and hardware in a

short amount of time, fighting against this title wavedal wave of high-frequency trading. their goal looks to be secondary to finding to high-frequency traders. they are spending so much time and money to deal with his high-frequency trading that the average trading of stock and equities are not the first order of business down there. emily: matt -- >> there is no evidence to support a link between high-frequency trading and the mess we saw today. >> that's what they do. they make technological changes to respond -- i can't say there's no evidence. >> they are still online. the only problem was the floor volume. >> totally fair.

the floor brokers are responding to that same thing. the reason the systems are obligated is because of high-frequency trading and nothing else. emily: hang on. joe greco. is there a role for human beings in a world where the new york stock exchange and other exchanges are relying so heavily on technology? >> absolutely. humans represent that insurance policy they can be explained when people don't know what's going on and they need to wonder if my order is marketable, am i going out to other marketplaces? or my order is away from the market, am i just going to get elected all of a sudden, am i still protected? having a human looking at that is a significant value today. most importantly, you've got leadership at the nyse that is

young and fresh and tom foley. they understand that the market is free. sorry, cory, the market is dictating where the exchanges are going. don't throw it on the back of the nyse. facebook ipo, a face plant. the leadership of the nasdaq is in california high-fiving each other. they did not know the opening platform and continuation platform were on different servers. every exchange has an issue. what rises to the top is when leadership takes control and rules out all the things that make everybody run into the panic room. is this related to the wall street journal? probably. is this related to united? not at all. china?

no. they said they would not turn the power on until they isolate the issue and ensure that the systems are going to run until close. that would be any day, in particular when it means stamping the price for nyse in dow jones indices. you know you can't get that from an algorithm. you not going to get that when you are pure electronics. having that element present even a small market share, is really important in times like this. emily: i will let you guys continue the debate off the air. >> it could draw the line. it does not have to do everything the market wanted to do. emily: thank you. coming up, a story we are watching. a software glitch delayed travel

for thousands of united flyers today, all u.s. departures were halted for two hours this morning due to an issue with a router. more than 800 flights delayed almost 60 flights canceled. this is the second setback united has face since june 2. up next, chinese stocks in nosedive what it means for silicon valley. ♪

emily: chinese markets are still in turmoil, despite steps to stem the losses. 30% of value has been wiped off chinese stocks since mid-june, and more than 50% of companies

have halted trading's. how is this hitting u.s. chinese traded tech stocks, implications for silicon valley companies and investors here? joining me now is shawn rya brett taylor. he is the former ceo of facebook. i want to start withh chinese u.s. traded companies have seen big hits. >> when we are speaking with retail and hedge fund investors, they want to get out of china. there is panic in asia and hong kong, and hedge funds think there will be a drop in the american listed chinese companies like a jd.com, which trout 4% yesterday. in the next week or two, it might be worth taking a look.

-- like a jd.com, which dropped 4% yesterday. internet players will continue to do well in the coming months from a revenue standpoint. most of the people who buy on jd.com or alibaba are not invested in the stock market. thing tend to be low income middle-class chinese. emily: what about what is going on with chinese stocks and tech stocks there being hit particularly hard? some people are saying they will fall even further once trading resumes. >> great to be here. you have to look in the broader context of that question. the chinese indices were down for the last four years leading up to 12 months ago. they had a huge run over the last 12 months. part of that is strong underlying economic growth. part of that was driven by leveraging the system new

regulations around margin, and rapid participation among retail investors in the markets in china. what you are seeing now is a blow off of a lot of those gains over the last 12 months. amazingly, on the a share market , you would still be up if you bought 12 months ago and held them until today. there has been a big decline, but you have to look at the broader context of what is going on. >> a lot of companies in silicon valley have been expanding rapidly into china, like cisco and apple. do you think this will impact u.s. tech companies as well? >> a great question. i don't think it will impact u.s. tech companies. cisco and apple are in trouble because of rising protectionism and real fear dealing with american tech companies. i think apple will come out strong for this.

the chinese are lining up to buy their products. i was in hong kong two weeks ago to buy an iphone plus for my wife. i had to wait in line for two hours. you will see a hit on consumer confidence that will hit some of the american and european companies. i would be negative on nestlé louis vuitton, or product. i think apple and starbucks will come out strong from this. emily: is there a bigger systemic riskier? how big is the problem? >> i have always been a bull on the chinese economy. now i'm getting concerned about the systemic risks. so many chinese companies have brought money and use their stock is collateral. that is quiet dangerous right now. the second part is really what the chinese regulators are doing right now. it is similar to the greek banks. you can't take money out of the greek banks, more than 60 euro's, and now 50% of chinese

shares are suspended and retail investors can't exit. that is why you see the hit on hong kong. a lot of them are selling off hong kong shares to get liquidity to pay that margin calls. we don't know how many companies are using their shares as collateral, and we don't know how much the financing is going to hit every day retell investors. i am getting more concern especially because the regulators seem to panic and i think it has triggered the fear in china this week. emily: glenn. gdp invv in chinese startups like hoover's competitor. -- uber's competitor. uber raising $1 billion for its chinese operation despite what's

going on. >> i can't comment specifically on gdv, but the underlying chinese economy is strong. there is a decoupling between what is going on in the stock market today with underlying economy in china. i don't expect the economy to turn anytime soon. investors see that. they see what's going on with the underlying growth in new economy companies companies that are participating in markets like transportation, but many others as well. they are seeing huge growth in those companies. that is what is spring demand for those equities. i don't see that abating anytime soon. emily: all right. always great to have you guys. brett taylor is sticking with me. now, which smart phone makers set a company record for selling out a flash sale in record time?

the details next. microsoft taking a write-down on gnocchi a. -- on nokia. ♪

emily: it is time for the daily byte. 2. that is the number of minutes it took chinese consumers to buy out a new huawai smartphone. the next chance will be next week when they hold another flash sale.

more cups coming to microsoft. the tech giant planning to eliminate 7800 jobs this year after the company said it would lay off 18,000 employees. microsoft taking a $7.6 billion write-down on its nokia handset unit 14 months after the finnish company was acquired. how do that changes fit into the ceos restructuring plan. we are joined by skype from seattle. microsoft partners, and he has met with the ceo himself. also, brett taylor, ceo of quip. your company competes with microsoft. what is medela doing he doing here? >> i also thought the

acquisition was weird. the microsoft legacy was about making software. buying a hardware maker was an awkward market position to be in. they were an apple, android. i don't think it fit into the new ceos vision. a lot of us on the outside expected this to come. the biggest shock was white event they buy -- was why they did it by their mapping division. this isn't surprising to me. it's consistent with the new focused on software and services as a primary part of microsoft. emily: we are getting details. steve ballmer wanted it. bill gates argued against it. would you think of the bold move that he is making. is he moving in the right direction. is he on doing some of the

mistakes that microsoft made? >> it has been a $7 billion headache from the day it was announced. he's willing to make tough decisions, cut the cord, wave the white flag. the last thing he needed was this. they needed to quarantine it lay off. it's a step in the right direction. it's a start contrast to what we saw with steve ballmer. emily: matt, how confident are you that he can execute on this plan, the shifter productivity and restore microsoft to greatness and win in the places

where it can? >> he has to figure out a mobile strategy. this is not an exit from mobile. it highlights that it will not be about mobile handsets. most important, how do you manage and allow people to safely access the devices and applications on them. he is asserting his leadership more and more within the organization because -- emily: looks like we have lost a mat there via skype from seattle. how confident are you that nadella can bring this company back? >> there's not a tech leader who does not respect him. he has changed culture and strategy. that said, i don't think they have proven they can sell productivity software without owning the operating system. they have not done that before.

the network effect between windows and office -- i don't know if anyone really knows what one looks like without the other. they are doing it. they have released ios versions, android version and one of the best enterprise sales forces in the industry. i still think he has a lot to prove that they can make one successful without the other. emily: were going to let you go there. brett, i want to talk to more about quip. you started it as mobile first but not your releasing a desktop version. why? >> it is to compete. the interesting thing for quip is that we've grown from 10,000 companies to 30,000 companies now. our desktop business has exploded. in january, 2014, 20% desktop 80% mobile. now we are 50%, 50 percent

driven exclusively by business users at their desk. i think it's not about being mobile first. it's about having multiple devices that work well together. you can beat your desk, get up, open your phone and what you're working on is still there. working on these applications makes it the best productivity suite on any devise, including laptop. >> you hear about companies where the evaluation goes through the roof. google drive, why use quip? >> we think it is the way clout software should work. if you are in an i.t. department , you have to choose between collaborative legacy, and quip accomplishes both. you can work off-line or online and work with multiple people at the same time. emily: brett taylor.

thank you for joining us. thank you for watching this edition of bloomberg west. ♪

>> with all due respect to donald trump, maybe take a day off some time. on our trading floor, puerto rico billions in debt and hillary has money quotes first, $1 million. backing john kasich's bild is going up tomorrow. a seven-figure ad buy is known as the syrup.