emily: i'm emily chang. this is bloomberg west. salesforce ceo tells me he has seen danger ahead for unicorns. as netflix shares bounce, tech leaders fireback on immigration. first to our lead. in other wild ride in the

markets for u.s. markets erasing gains made earlier in the day. tech stocks faring better than the rest. straight to matt miller for the latest action at the close. matt: apple, netflix, facebook, amazon, best buy, these were the big winners on the s&p adding fractions of index points at the close. close. we were up 3% on the s&p after the huge drops we've seen in the last five trading days in the tech stocks out rally after the close. old economy companies like gm, merck, johnson & johnson, those companies along with microsoft, which some would think it is an old economy as well, way down on the index. [inaudible] [no audio] we were up 3% on the s&p after

the huge drops we've seen in the last five trading days in the tech stocks out rally after the close. old economy companies like gm, merck, johnson & johnson, those companies along with microsoft, which some would think it is an old economy as well, way down on the index. now we are in in a situation where today is the sixth trading day. the dow jones industrial average was up 540 points. slowly chipped away at that gain until we finished down at a loss of 200. it is anybody's guess as to what happens tomorrow. maybe they think we are too pricey. emily: we will be watching that. i want to bring in my roundtable. glenn kalman will be here throughout the show. robert, i want to start with you, you know a lot about what is going on in china. netflix holding onto gains made earlier in the day. facebook, all ending in the green. google ending slightly down. why is tech doing well but not

as well as the broader market? guest: the situation in china is something that is just coming to the forefront with liberalization of the currency. there has been a tinderbox brewing. the length of the dollar has been a juggernaut. with the economy slowing and moving to liberalize the currency, it has created a huge imbalance. the backdrop of the falling stock market and slowing route has been underling for the markets. emily: you say now is the time to buy. why? guest: the fundamentals are disrupted from the markets. there is no single news item that is jolting -- that should be having this kind of a jolt. when you see other periods, where you have this massive spike in volatility and quick

selling, the market tends to snap back relatively quickly. what is important is those companies that have lead going into the downturn do well in the one week, one month. for six months after the market turns around, even if you miss the bottom, investing in those previous winners tends to be a winning strategy. if you look today that is what happened. emily: i love that you are here. you see the big picture in the real estate market but you know what is going on in the private tech community. how is volatility affecting you? guest: there are two dimensions. the first is the housing market, volatility scares people. they worry they should put off this big purchase. a lot of them are selling stocks to afford houses. we saw over the past four months demand starting to falter. the housing market has been the mainstay of the u.s. economy and has topped off over the past

four months. in the tech markets, we have seen people seeing month after month this is crazy. this is crazy. private valuations have been so far from public valuations. with some money coming from asia driving the valuations higher, you're going to see rationalization with unicorns in particular are going to be affected. emily: let's talk about that. a big morning earlier last week, he came on the show and talk to more. guest: i think we're seeing a sentiment shift. we have been for 12 months if you were to judge the internet investors, have they been optimistic or pessimistic, i would argue they have been tagged to the right rails. whenever you are there there is only one way to go, which is down. whether it is the chinese economy or the fed is going to raise rates, they causes the sentiment to drift back to

center. emily: do you agree the investor sentiment is starting to shift? guest: absolutely. you talk to investors today paying more for the private markets, the same investor would pay less if that company were public. they don't have to mark the offset to its current valuation. that creates that mentality of why are we doing this? when you see volatility in the market everything starts to take a step back and think about who is going to be the winners, who is going to generate profits?

that is the dictator of what is going to be valued. emily: what does this mean for public tech stock? guest: the appetite for growth is in norman's right now. the big issue is if we are in a slower economic growth environment, whether it is because of china or other issues, the amount you pay for a company able to deliver faster revenue growth should be substantially higher. health care companies, new tech stocks that we could argue whether microsoft is new or old tech companies, even innovative consumer brands, these stocks are undervalued even if the trading expenses and a lot of names are trading at a discount. even though they have substantially faster growth. emily: all right. down 7% yesterday. what is going to happen with the markets there? guest: we've had a break in the chinese stock market. it was consolidating. it looks a lot like the crack's in chinese stocks 10 years ago. they are trying to take steps to aggressively, cutting interest rates last night, cutting the reserve requirements.

it is not clear the fire is out. there has been continued pressure on the currency in the longer data. no clear sign of a change yet. emily: all right. i do want to drill down a little bit more into what is going on with netflix because it has been one of the most volatile stocks this week. at one point sinking 18%. what is going on? in the middle of yesterday's market meltdown netflix announced a deal with the japanese mobile network softbank, a partnership to help netflix launch in japan. users will sign up for the service at retail locations and

pay for it in monthly mobile bills. still to come, my exclusive conversation with mark benioff. we discussed the global market selloff. that is next. ♪

♪ emily: now to salesforce. marc benioff says startups may struggle in these tougher market conditions. i sat down with him for an

exclusive interview. mark: the devaluation of the yuan and the currency, you have a six year bull market. it has been an unbelievable market run. there has been slight shifts in our gdp in the united states downward the last two quarters. those three things said it is time for a normal market correction. i am a long-term believer in the stock market. you have to look at the long view. emily: what does it mean for salesforce? mark: we didn't have a good quarter. we had the best quarter we have ever had. it was amazing. i can't believe salesforce performance. we are the fastest growing in software company ever. we made it to 6 billion. we can see 7 billion by the end of the year. i have a short-term horizon to get to 10 billion in revenue. we're what to do it faster than

microsoft. the funny thing is, next year we will be the fourth largest software company in the world. only microsoft is bigger than -- microsoft, oracle, and sap is bigger than salesforce at that point. our job is to be number three by market cap and then by revenue. emily: no plans to sell? mark: i've never been more excited about salesforce. after that quarter you can see why. everyone looks at what is happening. emily: you tweeted all my friends want to be a unicorn, many are just not ready. how worried are you about everybody else? salesforce is doing well. mark: i don't like the unicorn mantra. it is dangerous for entrepreneurs. it gets very dangerous. i invest in a lot of startups. when i see them all of a sudden get more focused on being a

unicorn than being a company with a high level of customer satisfaction, employee satisfaction, giving back to the community, i knew it is a problem. at salesforce we have never been focused on market cap. we have a healthy market cap. we have been focused on making sure we're doing it the right thing to build a great business. the unicorn mantra is dangerous. i tweeted that we are going to start to see a lot of dead unicorns because what i see is businesses raising money at high market capitalizations who are not focused on fundamentals. when you see a big market shift, you saw one today, the people who are going to have to get ready for this, the smaller companies and startups who aren't a strong public company like salesforce. i remember those days. it was long ago we started our

company in 1999. there is a correction and i was nervous. i remember what that was like. we had to make a lot of changes in our business and double down on customers. emily: i spoke to benioff at a middle school in san francisco where salesforce announced a donation to the city's k-12 program. its third big gift to sf schools in a row. i talked to him more about salesforce's commitment to education. mark: we have not valued our k-12 schools in the united states as highly as our higher education system. everyone knows we have the best higher education system in the

world, but we should have the best k-12 education system in the world as well. the way to do that is very easily, all the stakeholders have to get involved read the government has to be involved. the school district has to be involved. the kids out be involved. businesses have to be involved. the model is happening in san francisco. emily: what about the rest of businesses that are at salesforce. is the rest of silicon valley being generous enough? mark: silicon valley has an incredible history of stinginess. [laughter] we are fighting the tide there. we have seen more generosity from san francisco-based tech companies than we have ever seen from silicon valley-based tech companies. you see that across the board. the largest companies in san francisco giving more than ever before. we're encouraging not just to give money, technology, get employees out there and work in schools, hospitals, homeless shelters, given the community and let's build a community, not just a tech community. emily: you have everyone trying to reform education in their own way. how would you describe your approach? mark: our approach, it looks like it is a hands-off approach, which is interesting. i don't think of it as hands-off

because we work hand in hand. we offer a full package. money alone isn't going to solve anybody's problems. it is about the money, technology, and people. emily: apple unveiled plans to give $100 million to public schools. what do you think of apple's plan? mark: it is great apple is going to give $100 million. apple should be giving billions of dollars to public schools. apple has reaped a huge harvest from public schools. if you go through these public school classrooms and open up their closets you find old apples, macs, ipad3 apple has built a lot of this history on the k-12 market and it should be giving back in a massive way to the public schools.

$100 million is great but i hope it is a start. emily: salesforce ceo marc benioff. staying focused on san francisco, new data shows homeowners are moving to other tech hubs. with me now, there is a lot of stuff going on. let's go to what is going on in the real estate market. san francisco in particular. >> you have run out of room. there are these great companies and great ideas. cost of living is out of control. people are leaving. the fact they can build software anywhere in the world because of all these other technologies has opened up the rest of the united states and the world to technology workers. emily: seattle, portland. what is data telling you? guest: 13% started their search in the bay area. 6% of people who are buying homes in seattle started search in the bay area. people who live here are moving. we looked at this and thought maybe they are just daydreaming of a different home. now we see they are actually

moving. emily: what is happening in san francisco? guest: demand is still strong, there is just not enough homes. they are not able to build single-family homes in the city anymore and yet you keep having more money come into the city, more starting and flourishing here. the city has a plan for it. to some extent we put our head in the sand we could have been building more developments. we have been anti-growth. we want to keep this city the way that it is and it isn't going to work. emily: what about prices? can they continue to rise? guest: i think they have to as long as the market keeps roaring along.

you're going to see prices go up. emily: last time you said it is a bubble. what do you say now? guest: if i was nervous last time i am more nervous this time. it is still a bubble in valuations. when you see those come down i think are going to see prices flatten. they can still go up. emily: housing prices. guest: they can still go up. they are not going down. emily: always great to have you on the show. thank you for stopping by. coming up, we talk about immigration. forward u.s. taking on donald trump. ♪

♪ emily: time for the daily byte. today's number is 27 million. a las vegas man, known as the spam king, has pleaded guilty to fraud and criminal content. he admitted to accessing half a million accounts in 2008. he is annoying consumers since the 1990's, sending junk faxes which violated laws in 1991. he has racked up lawsuits for spyware scams and myspace phishing. he faces three years in jail and a fine when he is sentenced. tech may be taking on trump. mark zuckerberg forward u.s. attacked donald trump that called mass deportation absurd.

the president of the organization joins me now with more. why now? guest: with immigration reform in the news and false information out there we thought it is a great time to remind people of the role immigrants play in why we need to fix a broken immigration system. sensible security provisions, having a system that works for today, and for the 11 million immigrants who are here, giving them the ability to go through a background check and come out and get legal status and a pathway to citizenship. emily: to you have said trump and scott walker don't have the best stance on immigration. what candidates do you like? guest: let's say exactly what it is. when you talk about rounding up and forcibly deporting 12 million people, that is creating a police state.

that is costing $600 billion. that is not just not being good on immigration, that is against american values. it is important to put a pin in that inside this is not about arguing at the margins. we believe we are not going to go into this horrible thing being proposed. emily: what candidates do you like? who was closest to what you like? guest: there are a number of candidates who on this basic question, are we really going to roundup 11 million people, are we going to say we think we should radically restrict the ability of the united states to have the best and brightest come here. you will see people doing great in the polls. they are in favor of that. these baseline questions, it is an important one. secretary clinton, you look on

the republican side, someone like lindsey graham, governor bush. these are people who are willing to say the obvious to us, the idea we are going to round up these people is wrong. emily: quickly, how involved is mark zuckerberg at this point? how often does he check in with you? guest: mark is one of our really high profile founders. he is passionate about this issue. we actually just crossed over having 405,000 different people speak out in favor of immigration reform, to contact their congressman. it is hurting the technology industry and families. every day we go along it is we are getting stronger. emily: all right. the issue will continue to divide the campaigns. thank you. thank you all for watching. do not miss donald trump on bloomberg tomorrow on all due

respect. ♪

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