power and they will have nuclear weapons much sooner than you think and they have plenty of money and they have plenty of everything now. ripped hillaryo clinton, telling supporters she should receive an award as the founder of islamic state. mike pence is breaking with mr. trump by endorsing paul ryan it has primary fight. the move comes after donald trump said in an interview, "he is just not quite there when it comes to backing ryan who has been critical of trump." commutingobama is sentences. almost all were serving time for nonviolent drug offenses. most will be released december 1. michael phelps, the most decorated athlete and olympic history will carry the american flag for the opening ceremonies in rio.

he is headed into his fifth olympics with 18 goals and 22 medals overall. i am mark crumpton and this is bloomberg. "bloomberg west" is next. ♪ emily: i am emily chang and this is "bloomberg west." coming up, a major miss for tech club but investors do not care. shares are square. surging. we asked to top-tier vps about the appetite for risk amongst a gloomy, global outlook. plus, what they think about peter thiel backing them up front. but first, to our lead,

investors shrugging off the day quarterly miss from tesla. loss andker posting a share of $1.06 much wider than most analysts had estimated. shares rose 32% but also missed estimates. they have missed on deliveries the last two quarters but says it is still on track to deliver 50,000 cars in the second half of the fiscal year. that and improving gross margin is encouraging tesla goals after hours. joining us from our perspective, auto analyst and bloomberg do you columnist in portland and cory johnson with me in the studio. would you call it the e lon musk affect? >> today is the day we can look at what the company is doing. i think one of the interesting things they can do is look of the number of cars they have sold in the quarter, for what they delivered in the quarter. we already thought we knew the numbers but they change them on

the weekend release before the fourth of july holiday. they released him when the market was there to see them. they changed the numbers little bit, just a few more here and there. you see the number of deliveries. you can see the numbers coming down. in the fourth quarter, bunch of tax deals that expired at the end of last year. the fact is, the numbers are coming down. when we look at a year-to-year basis, it is going to be one way to look at it. there is a year-to-year numbers. that is sequential. year-over-year numbers show the numbers, the growth numbers getting bigger and then smaller and smaller to worse. i think it helps sequentially when you see the decline in sales quarter after quarter. the bottom line is that growth for the company and the number of cars they sell is not happening. they are selling fewer and fewer cars every quarter. they made 27% more cars they could sell -- then they could sell over the last quarter.

that is disconcerting when it comes to an operational efficiency standpoint. emily: and yet, shares are going strong after hours, investors pretty excited about the potential delivery numbers for the second half of the year. they did miss the last two quarters. do you believe it? >> well, look, i think this is a company that if you really invested in it, you are investing for the long-term. that is why, for me, i tend to this and a different way. i do not think a miss will really shake or several in a row will really shake the confidence of the people that believe in the long-term vision. i think what is important is that there is 18 months before model three is delivered. i think everyone acknowledges that is the key tipping point. if you believe in elon musk, that is what you were looking to maintain your bullishness. when i look at what the company

said in its releases today, and also the last quarter, the issue is not so much, did they make their in less estimate, but did they build credibility? they have 18 months of what the questions are going to continue to increase, even amongst people that really believed in the vision and can execute it. or me, i think things like sticking to the old number for the model three deposit, and they were asked about it on the call today, they did not give a new number. it screams credulity to believe that number has not changed and they have not given an update. for me, the real issue is credibility and i think the earning reports are an opportunity to become more transparent and build credibility in the company as it goes toward the model three launch and that is the opportunity i think they are missing. emily: the part about the bay, long-term vision is of course elon musk's master plan where he laid out for new vehicles, as in

my, a pickup truck, a small many bus. let's get back to what exists right now. one of those cars, the model x. what have we learned about this model in particular and how the new was model is actually selling? >> model sales sold about a dozen more than they told us, when they give us the numbers in july. he has not been gangbusters for this company, and they have not been growing in the first couple of quarters. it has not really been fantastic. what i do want to know, it points to the issue of gross margins. the gross margins, the more cars they may, model s and x in full production, and yet the collapsing gross margins are a concern. you would think, the more they run the factory, the more efficiently they run the factory and this would show itself in the gross margins. the gross margins are actually coming down, basically flat the last quarter, which is ok but a lot worse than what they were. you can see the effect of the fact that they do not get subsidies for the government. some of those have expired.

if you look at the year-over-year change, you can see the climb and decline in decline. maybe that is getting a little bit better for these guys, but i think it is a concern that the pace of change in the gross margins is on the wrong side of change. emily: we have been listening in on the earnings call and musk has proposed a merger between tesla and solar cities. he just said there was no reason for tesla and spacex, the other .ompany he runs to merge investors that may have been worried about that, they can rest easy. he also spoke about autopilot cars, self driving cars. take a listen to what he had to say. >> we estimate a truly enormous number before any demand saturation. basically the only car that anyone wants to buy. emily: sticking to this idea edat the tesla autopilot

car could be the safest car on the planet. it is a very differing view from the self driving cars over at google or they are focused on fully autonomous cars and tesla is focused on semi-autonomous cars where the driver can remain engaged. as we know, there was an accident in florida where someone died. safety investigators are looking into that. do you think that was a one off or could we see more issues to come? >> yes, i think google has made it very clear that they do not with semien mess autonomous, want to go to fully economist because the research that is out there shows that anytime there needs to be a transmission -- transition between the vehicles, autonomous control is a very dangerous situation. the driver is impaired at the level of a drunk driver. that is really dangerous. i think the tesla has created a

lot of questions about the true capability of its autopilot in the way that it presented it, and the way the media sort of took some of the things they said about it and ran with it. i think there are issues. i see we have to wait for the investigation to understand the situation better. emily: we are anxiously awaiting the results of that investigation. joining us from portland. and her editor at large, cory johnson with us as well. thank you both. coming up, square reporting better than expected second-quarter revenues. we will look at the numbers in the news it may extend its partnership with starbucks. plus, a billionaire entrepreneur that this may seem -- making space history. and no, we are not talking about elon musk. it is an interview you do not want to miss. this is bloomberg. ♪

emily: turning back to tech earnings, shares of square popping 10% in extended trading. the company reporting a loss of shares but revenue beating analysts expectations. they were up 54% year-over-year and increased its yearly outlook gross payment valium by $12.5 volumes by $12.5 million. on -- $4.5 billion. what are investors reacting so positively to? >> the numbers were pretty good across the board. this was a very good quarter forsquare -- square. importantme of their

data and software line jumping a considerable amount as well. that number is important to analyst and investors because they see that high-margin business as the future driver of growth for the company. emily: profitability has been the goal, loss of eight cents a share but positive investments. how important a milestone is that? >> it is important because public markets have changed their perception. they're measuring stocks. ppen looks like it will ha next quarter. emily: what are the big takeaways for you? you have watched the business grow from afar. they have launched new businesses and are getting into food delivery. what is the real promise of square? >> i think the market is beginning to appreciate the unique aspect of square. the only company in the planet

that has more pain small t.sinesses is intui square over time turn these relationships with small businesses, running their most important part of the business on square and just add services. the pain of running a small business is still there and there are plenty of opportunities to make life easier if they are business owners. emily: how does the delivery fit into the picture? >> that is a good question and i'm not going to answer that. emily: what do you think? increasek they had an in large businesses. this is important because their numbers get better, and their numbers increase with bigger business. addressable market, the fact the larger businesses appreciate them as well, integrating software and

hardware, it shows that their total market is larger than what had been previously thought. emily: they said they are working to extend the starbucks partnership. this has been a kind of controversial deal. some have disputed whether it was really a good business deal for them to get into bed with starbucks anyway. what do you think? >> i think it had a lot of benefits. one, it increased the viability, safety, security perception of square because obviously one of the largest companies on the planet were using square and that had boosted in various other places in terms of brand. secondly, i think it was a shot to make square wallet successful, which turned out not to work but there is no problem with it being a risk. if it had worked, it would be a more viable company. third of all, i think actually the process of serving a large customer is not paying

dividends. i saw the earnings call that's where is moving up market. it was a lot of work that went into being able to serve starbucks which will not pay dividends to some customers. i noticed the margins are increasing and the revenue rate is also stable and slightly increasing even though the customer segment is getting larger, so that is a promising sign. emily: it was a strong quarter foursquare capital. they extended when hundred $89 million in capital, up 123% year-over-year. this is a new business growth, but what more can we expect? >> this is the young company. there are a lot of different levers they can pull. are they going to extend their software, looking more internationally? i asked this question to the cfo and she said, yes, you should be expecting more types of products that will help small businesses grow and they're also looking at global expansion. there were rumors about the u.k. but she is not commenting

whether they are pushing their in the immediate future but she says it is a very interesting markets will keep my eyes on that. emily: keith, another question that always gets asked and probably will be asked quarter after quarter, obviously, you know how hard it is to run square. how long do you think he will continue to do this and do you recommend it? >> square is obviously performing well, up 80 metrics. twitter is a different story. i am not in the next word on twitter but a user of twitter. emily: an avid user. >> an avid user. i think twitter has a couple problems. if they fix the adoption aspect, twitter has more impact in the world than facebook, snapshot, instagram combined. it is fundamentally, can you get new users on board that is easy and does not feel like a chore? if not, twitter is like a

quagmire and they are not fun. we just witnessed it with yahoo!. i think that is more of a drive then square. square looks like it is finally on all cylinders now. of square,er ceo you'll be with us for the second half of the show for our special series. thank you so much from bloomberg news. be sure to tune in tomorrow for my exclusive interview with the cfo sarah frier. we will have the full interview at 3:00 p.m. specific -- pacific. up next, the billionaire entrepreneur making space history. this is bloomberg. ♪

emily: a milestone for space history. they granted the first private company permission to leave earth and land on the moon.

remember, we see space ask watches all the time but -- space ask launches all the time -- spacex launches all the time. owner of by asking the all of the milestones he is aiming for, which is most important? >> going to the moon is least symbolic of what a small group of people can achieve. yes, of course, we are going to the moon and yes that is a literal moonshot, but it really means is that the thing that could only be done by the superpowers, to imagine there were only three superpowers that a verb or landed on the moon, and no private company has ever done it. when we land, we are not the first company to ever do it, but we become the fourth superpower. say, ifpires people to the man who grew up poor in india can come to this country and achieve the big dream of

landing on the moon, what is my moonshot? emily: you have your eyes on elon musk, don't you? >> they are still doing some orbitals. when you go down, leaving the earth, orbiting and going beyond that and become the first company ever to do so, so what we are announcing today is really interesting. we became the first company and the only company ever to have the permission to leave earth's orbit. think about that. people think everybody is going to space, what they do not realize is everybody is coming to a space station and we will become the first company to ever leave earth's orbit as a private company. emily: what do you plan to do once you get there? >> we plan to go next year, the second half of next year is when we plan to go to the moon. it will be sometime near fall of next year. there starting to look for

platinum grade material, the rare elements. as you know, the helium tree is the best resource for clean energy. the small quantity could power the planet for billions of years. emily: why is it important for space exploration and the future of humanity? >> you have to learn to live off of the planet. if you if you want to go to mars, the best place to get your training is living on the moon. once you learn to live off of the planet, you have to learn how to live without radiation and the structures we have here, and want to learn to live on the moon, you can go, go beyond the moon to mars. we know there is plenty of water on the moon, so what if we can take the water and hydrogen and oxygen and that becomes feel for the rocket and fuel for humanity? emily: do you want to start a

colony on the moon? >> we want to learn to live on the moon, create a colony on the moon and that becomes the basis for living on mars. more than that, we also want to create and reduce the cost of going to space, and one way to do that is getting all of the fuel from earth, what if we had a few people in the earth orbit and a few people on the moon orbit see you do not have all of the fuel you need to get to mars. you can refuel on the way. emily: you plan to send robots but you also plan to send humans? >> we initially went to send a robot. think about what we are doing as opposed to driving -- building a self driving car. obviously, the next 10 to 15 years, we will be able to send a human to the moon. emily: tommy had how you got government approval for this? >> there was never a government

agency granting approval for this because no one ever asked or ever imagine anyone would do this. emily: you say they did this because no one ever asked? >> know, every department was going to say no but nobody could say yes, so ultimately we had to go to the white house which called a meeting of all of the departments and essentially found a solution and they gave us an exception because we are the only company asking for it. based on all of the things that we want you to follow, you actually followed to the guidelines and we want to give you one time approval. in the meantime, we need to figure out what happens next. emily: do you think you can get to other planets? >> there is no doubt in my mind. the moon is just a stepping stone to mars and beyond. emily: sounds pretty convincing. is interested in jet.com. the deal would give walmart e-commerce efforts age-old as it goes beyond brick-and-mortar to

take on amazon. it may result in a strategic avestment as opposed to complete acquisition. time warner has a 10% stake in hulu. they paid $583 million for the share. .hey face increasing pressure shares of time warner rose 3% at one point, its biggest gain. coming up, is this the right time to back consumer internet startups? we will cover a lot of ground next from the changing appetite for big risks to peter thiel backing from. ♪

mark: you are watching "bloomberg west." let's begin with a check of your first word news. democratic presidential nominee hillary clinton is campaigning in colorado and she accused

donald trump of some questionable business practices. ms. clinton: donald trump would not pay people who did work, painters, plumbers, glass installers, marble installers, architects. we now have a very long list. what kind of man does business by hurting other people? mark: at an earlier stop in denver, crichton -- clinton criticized donald trump of outsourcing his products to other countries. texas has agreed to loosen restrictions on voter identification rules. people without proper id can vote as they provided utility bills with their name and address. footie restrictions in north carolina, wisconsin, kansas and north dakota have all been blocked in recent weeks. tropical storm earl has been upgraded to a hurricane.

it has top sustained wind of 75 miles per hour as it bears down on belize. forecasters say it could bring flooding rains, high winds to mexico and honduras. this is bloomberg. david, good morning. david: after a rough couple of days, things to be looking up a little bit in asia this morning. new zealand up 1.1% and futures on some of the other indexes are looking better in australia. futures up 4.5% and japan's nikkei is up. today, we are looking at some of the carmakers, a lot of japanese carmakers over the past few weeks that without a tough time with a stronger yen. some of that seems to be improving. we have seen honda having some

better results. today, the big one, toyota motor, the world's biggest -- third-biggest company. theill be looking at biggest gambling destination that has had a rough few years. as a teat in 60% 2014. peaked in 2014. a lot of the gaming companies have had pretty good share pose performances over the last few weeks. sense china up 50%. sans china up 50%. emily: this is "bloomberg west." it is time for our weekly

roundtable when we take a deep look at themes in tech investors. with us jesse lewis, partner , new bank and has efforts to legalize marijuana. i want to start with politics. on wednesday, meg whitman announced her support for hillary clinton. despite running for governor of california as a republican in 2010, she said, this year is different. to vote republican other party loyalty alone would be to endorse a candidacy that i believe has exploited anger, xenophobia and racial division. donald trump's demagoguery has undermined our national character. her comments, the heels of a national convention where peter

thiel took to the stage to endorse republican presidential nominee donald trump. take a listen. >> i do not pretend to agree with every plague in our party's platform but state culture wars only distract us right economic decline and nobody in this race is being honest about it except donald trump. emily: he is one of the original founders of sanders and you have worked alongside peter for many years and you know him going all the way back to paypal and stanford university. i want to start with you. do you agree with his support of trump? >> first of all, i have immense respect for peter as a friend. concurrently, i personally have a different view. i am very strongly against trump as a person. i think he is not fit for the presidency. i think he lacks basic human decency and i want to be crystal clear that personally i am very

strongly against trump. that said, one of the things i think makes us a really good team is we have diversity of thought. we have people with a lot of perspective on a wide range of issues, really good debates internally on things and sometimes we end up at different places with the same facts. emily: you have been tweeting up a storm about this election. do you agree with peter's position and? you understand it >> i understand it. if you believe the status quo is unacceptable, voting for hillary clinton is not going to fix it. that said, i believe donald trump is a sociopath. as i would point out, if trump was the ceo of any of our companies, we would probably fire him. it is hard to vote for someone that you would fire if they were a ceo and you were on the board. emily: have you had conversations with peter about this? >> yes. >> as a colleague and friend, i

would not share personal conversations i have had. i think they're somewhat striking about the silicon valley culture where you have someone with a differing opinion and it is so different from everybody else, and everybody agrees that to say something different is right hard to do. this is a specific position i have a different view on. i am very strongly against trump but i think politics is personal. emily: we heard from meg whitman and you have more than 100 meters that sign a letter calling donald trump a disaster for innovation and people have speculated that he could lose entrepreneurs because of this. what do you think? >> i think that letter was signed mostly by democrats. k 100% people on that letter voted for obama. globalization was this conventional view that everything was becoming globalized, and that may not be

true. we may be anti-globalizing. that may lead to a lot of investments, a lot of traits that are very interesting. i think that may be driving some of peter's perspective as well and he will probably be proven right on the substance of part of that -- substantive part of that argument. an analogy, if you are someone that works for a public company and you are sort of concern about things, you would have to research what everything to one of your investors in your public company thinks politically. i think an entrepreneur that would not want to work with founders fund is probably not an entrepreneur we get from an investment standpoint. that would be my intuition. emily: do you agree that the decline of america is real? >> i think there is not enough

growth in the united states. terrorism.lot of i think violence is increasing. i think there is a lot of that. i think it can be turned into an advantage in america can be the shining city on the hill that i do not know if trump is the right person to do it. i do not think the status quo is any better. i think hillary clinton will lead to a disaster in silicon valley. emily: what does that mean for silicon valley, innovation? >> just cancel the election. [laughter] emily: that is not going to happen. >> there is no question this has been a uniquely insane and scary number of months in the united states and also globally, and to not acknowledge that fact, to ignore it and pretend everything is ok would be really, really crazy. you have to it dollars things are really deeply off. the part of peter's rnc speech that designated with me was when he talked about the

technological stagnation. we are focused on this day in and day out, trying to back founders that are trying to do new things using technology solving some of the really big problems we are going to have in the u.s. and hopefully around the world. not every problem but some problems and i do think you could do that for technology. emily: how is this impacting your investing? are you changing your strategy because of this crazy macro economic environment? in series a round's come a series b round. rounds.ies b roun series b >> i think different partners have different strategies. partner, an incredible

investor, and the company is literally working to cure cancer, and brian's view is all that matters is the micro. he is a micro investor. my own personal view, there is some comfort -- combination of micro and macro. there is some stake in biotechnology where you can withstand crazy macro cycles. i do think that the macro volatility prevents these one-time opportunities to really do interesting things, so we invested in airbnb in 2012 and that was a time when consumer net was out of fashion. it was a one-time opportunity where you can actually make investments based on the macro. emily: consumer internet seems to be out of fashion but you do not believe that is true and we will talk about that next.

we will be right back. we are going to dive into your higher risk investing strategy next. this is bloomberg. ♪

emily: welcome back to "bloomberg west." our weekly tech investing roundtable. i want to start by talking about your investing philosophies because there is this idea, the black swan. investing he has been talking about where you invest in things that have extremely high risk of failure but also if they succeed, a high risk chance of saving or changing the world. how would you describe your philosophy? micro.hilosophy is more i believe it is the right founder with the right product

at the right time so i'm looking for a very specific idea and founder in the combination leads me to personally invest. just like jeff mentioned, we have different views on this. he is looking for specific stem see asians -- substantiation's of that. he predicted health care would be more about math than biology in the future. if your son or daughter wanted to be a doctor, they would be better off learning statistics rather than biology. fan of that view and not made several investments on that basis. the reason i did was because the right founder walked in with the right background in right product and i said, yes, this makes sense. emily: founders fund motto is, we want to flying cars and we got 140 characters. how would you compare your philosophy? >> i think we want things that

are going to lead to radical breakthroughs of the world and we are willing on our end to back the truck up with things , spacex.nb tend to be time, we pretty agnostic on the areas where we will find those things. the collection of people on our team of really different backgrounds. added someone that was interested in film, technology and media. we have someone that is nearly employed at spacex. it is a very diverse team of people, so we are open to doing anything and rethink the only role to finding these incredible breakthrough companies is you can really have no rules. emily: does brexit change anything for you guys globally? >> i do not think so. >> i do not think it changes anything for us as investors.

it is hard to know what the impact is going to be. emily: what about in silicon valley, following the story very closely and what is going on with evaluations. i wonder, do stories like that change the appetite for risk or you see this sort of spectacular implosion of a company that had so much potential? >> i'm sure it changes it for other people. not for us though. we tend to be pretty focused on our own. ebates there are a lot of things we are thinking about internally and what is happening externally we try not to get overly distracted on that. more broadly, yes, people are viewing more risk with diversity today. emily: i know you are close with david fax who has been pushing back on this idea that you are in the same boat. are there any lessons? >> i think that we similarly tried to be as lack of consensus

and lack of derivative as of the people's views when making investment decisions. if you follow other people's views, you will return the same yield, see you cannot get trapped into what other people think. it is ray dangerous and seductive. risk isd, where basically priced out of a lot of rounds, we are effectively people applying a risk discount to the evaluations they were offering companies, it is hard to compete in an environment with the same view of the company where no one is applying are many other people are not applying risk discounts. i think right now there is a lot more risk discounts. they are applied to most rounds, so i think where we are interested for our own reasons in the company, i think our offer is pretty competitive where two years ago it might have been 50% less than what people were willing to pay. emily: you tweeted, now is a great time to start a commuter

-- consumer internet company. >> i think people's words are, ai, machine learning, a range of buzzwords. we invested in ai second 2011. i think things not being done are things on the consumer side, the dollar shares club, look at the companies eating big portions of incumbent businesses. things like pokemon go, that is not a startup but that is something that really captured a lot of imagination. i think there are still big online areas in consumer internet. emily: we just saw the china business of didi waiting to white flight. what happens to lyft? folks thatthe first once they switched, they had a lot more money and focused on black cars, and that story is true at the time.

they have been underestimated every step of the way. they have had a great july and we are proud to invest in them. emily: does lyft get bigger? >> i invested back to the original. i think lyft should be a sustained, independent business. they have grown while uber was distracted. i think lyft has been able to sneak up on uber and has a 50% market share in san francisco. i think lyft is pretty permanent. emily: all right. i am going to quote you on that. we will be right back after this break to talk about where you guys think the areas for most disruptive innovation are. also tomorrow, do not miss bank of america ceo on the low rate environment among other things

at 7:00 a.m. new york time. this is bloomberg. ♪

emily: welcome back to "bloomberg west" and our weekly investing roundtable series. peter thiel has given us so much material that i have to bring the conversation back to him. what you think of his decision to back lawsuits against gawker? i had a very devastating result on the company and the people involved. >> one fact they cannot be ignored is that a judge in a jury are deciding a fate of gawker, and the journalists that were involved here. know howlly, i do not people can defend folks who post revenge foporn.

that is not my value system and i do not view those people as real journalist. emily: what about the freedom of the press? >> absolutely vital. i think we would all say that freedom of speech is critical and vital. what do you think? >> i used to be a litigator and i do not believe in the general idea of funding other people's losses. as far as it is permitted and authorized will use, i think other people should use it to pursue whatever they want to and if the law works, it works for everybody. i do not think there is any threat to the freedom of the press based on this decision. accountability has always been a part of the freedom of the press. there's always been a role about what triggers the vitality of the media? there has always been rules. the idea that this is some novel or new thing is just ridiculous.

emily: ironically, the story ran in gawker and other publications but that peter is interested in blood transfusions from younger people to prevent aging, and then wonder, people make fun of it, but it is also exciting if it is possible. do you think that silicon valley and humanity needs radical iconoclasts like peter? >> i think humanity needs people that are willing to have original thoughts and do things that other people are not willing to do. i do not know about the biosis stuff. >> i agree. there is a study from 1954 at harvard taking blood from young --e and mixing it from blood with blood from old mice. this is not as crazy. there is a book called "living gracefully" or something by a doctor that cites the whole

history of the research. there is raw science that could give insight into avoid people aging and avoiding various diseases of aging. you can satirize this stuff, but this is how you get breakthroughs. the joke about how this is designed to be a foolish product but it becomes the solution, this may be one of those cases. emily: last question. which area do you think are most right for truly disruptive, flying car, black swan innovation? >> eye images did and mental health. -- i am interested in mental health. i think it is very important. >> i am interested in life extension. i think with current science it is possible to extend most people was he lives by 10 to 15 years. if you want to go 50 years, that his breakthrough, science-fiction stuff. kind of crazy. i am looking for founders,

startups, critical research to take to the market and i similarly and interested in health care. the data is not digitalized. that is the first fundamental precept low -- so i think how terrible be improved for most people. emily: i hope that works out. thank you guys so much. we could do this for hours. i really appreciate you stopping by. that does it for this edition of "bloomberg west." do not miss our exclusive conversation with square cfo sarah frier tomorrow. that is all from now -- for now from san francisco. this is bloomberg. ♪