mark: i'm mark crumpton. you're watching "bloomberg west." elite civil protection agency says the death toll from

today's earthquake stands at 159. the country's health minister told the associated trust that many children are among the dead. the magnitude six wake reduced three central italian towns to rubble. a magnitude 6.8 earthquake shook myanmar earlier today, killing at least three people and damaging at least 100 ancient budist temples. militants attacked the american university of it -- of afghanistan earlier today. at least one person was killed and 18 others wounded. afghan police are unsure about the number of attackers. a new report says many donation -- many donors to the clinton foundation met with hillary clinton while she was secretary of state. more than half the people outside government who met with secretary clinton during that time gave money to the foundation. the clinton campaign calls the report a distorted or trail. donald is urging african-americans and hispanics living in inner cities to give him a chance. speaking in tampa, florida, trump said democratic policies of only led to -- to poverty and crime in urban areas. pull show minority voters overwhelmingly favor hillary clinton. global news powered by more than 2600 reporters and analysts in over 120 countries. i'm mark crumpton. ♪

ramy: i'm ramy inocencio in for emily chang and this is "bloomberg west." investors ditching hp. plus flying to apple's defense in a tax dispute in europe. and what are public market investors looking for when they decide to back a startup? we will look at our weekly investing roundtable. first to our lead -- shares of hp are lower in after-hours trading. this is the side of the company formally known -- formerly known as hewlett-packard and is known for its printers. it beat estimates and sales of computers were flat. guidance for the full year missed analyst expectations. joining us to dig into the future of hp printers as computers is our bloomberg contributor editor david kirkpatrick and are senior analyst.

let's talk about the earnings -- how bad was this? guest: the quality of the numbers was very next. there was a lot of inventory reshuffle in the channel. i thought execution is getting better and they are focusing on the right thing, but q3 was ok and q4 guidance, i thought the pc business performed well and they are focusing on the right thing, they are focusing on the right thing and in the printing business, they are taking a different tack in that they are willing to place weaker profit printers for the supply contract in the long run. i think it is all the right focus there's a lot of messiness near term that shovels out.

ramy: ubs came out with a note pointing out 80% of its profits came from printers which i found quite surprising because when you think about hp -- i had hp computer years ago and i was thinking of that. what do you think in terms of diversification? david: they are not a very diversified company at the moment. i think they are in a fitting from the separation of the other part of hp and we can focus on these businesses and the that they are having growth in the pc business now and get credit for that. i was out there just last week by coincidence and they have some pretty cool technology coming out of their printer business, a lot of which is related to going toward digital printing which is extremely sophisticated. they have technology for digital

equipment that is state-of-the-art and could generate great growth opportunity. ramy: you were talking earlier about 3-d printing and semi-conductors. david: they have 3-d printing technology they claim is superior to anyone and can bed then into the devices they create. they use the same printer heads they use for their big industrial printers in the 3-d printers, so they are able to leverage technology they already have two get into what could be a new business. ramy: do you think this is the future? guest: i have a lackadaisical opinion, to put it mildly. i just don't think it's a big enough market. 3-d printing generally. what they are doing, going after the office printing market, the big machines in offices, on the third floor in the corner, that is a market heavily cornered by japanese office equipment makers. that is an interesting market because the device is possible and the supplies going to them

have a faster refresh rate or consumption rate and it makes for a profitable supply market. that is a very interesting market but i'm not sure the 3-d printing market is anything more than a small market. david: i was intrigued by some of their technology for product turning labels and printing jobs and they now have the ability to embed unique codes into an individual unit of a product or magazine that can be read with a camera. it is an interesting new slant on what you could do with digital printing and they claim there is some growth there. what do you think? guest: the technology is cool and need but is it a big enough

or get? the market needs to be large, profitable and growing. hp needs to develop technologies that are not really cool. it needs to attack three prongs of any market goes after. ramy: we have seen migration from consumer to business. let's move to pcs -- in terms of leveling off, take that. guest: we saw numbers from the market research firms suggesting that the u.s. for the first time in years had year on year growth. easy elements of the pc market doing well -- gaming is doing well, convertibles, confessional pro consumers, it's a small segment but these are priced at $1200 or $1500 and up of. there are segments and hp has

done a better job focusing on that segment and it's one of the top three from a share perspective, so it is doing well for the question is is it sustainable and we saw some strong gains in 2014 in commercial pcs, whether the consumer is ready to take the baton and replace these very old pcs with new ones. ramy: i want to pull back on the entire focus. we were talking about hpe as one entity. do you think the spinoff is working for them? david: they need clarity on these is this is that were muddied together into one compound hole. hpe is in many ways a software company. i think the fact hp is gaining market share on lenovo which is number one in pcs is significant and sometimes focus can really benefit a company and i think they have more potential focus. i would be mildly optimistic

about this companies prospect as an independent unit. guest: when we went in to the security analyst, everyone said hbt was the entity to own and hpe was going into the cloud where it had weaker positioning. fast forward one year and the exact opposite has occurred. it is interesting to see where we go from here given that hp queue has taken a beating. if they are doing the right wing and printers, there could be a story here. david: and the stock is up. not today. ramy: we have to leave it there. our bloomberg intelligence reporter and david kirkpatrick is staying with us. garvin falling almost 6% today after goldman sachs downgraded the stock and hold to a cell

amid increased competition. their biggest competitors are fit and apple, both expected to amid increased competition. release devices later this year. coming up, tim cook marks five years at the helm of apple. we will take a look back at his tenure, next. ♪

ramy: a milestone for the top man at apple -- tim cook marks his five year anniversary at the helm of the world's most profitable company. we take a look back at his tenure.

>> in august, 2011, tim cook was taking over from a legend. many investors feared that without steve jobs at the helm, apple would be headed for decline, but five years on, cook has defined apple in his own way. first off, business has boomed under his leadership. apple's market cap doubled, surpassing exxon mobil to become the world's most valuable company, but the stock has lagged the as -- the nasdaq and hundred. in march of 2012 under pressure from carl icahn, cook granted shareholders their first dividend in 17 years plus a $10 billion buyback scheme. company data shows apple cash holdings nearly doubled from $121 billion to $232 billion. but with 93% of that money held offshore, he has taken heat from regulars and the u.s. senate,

accusing apple of using subsidiaries in ireland to reduce its tax bill. now to product -- under tim cook, apple's tory is all about the iconic iphone. in july, apple sold it billion unit and the category accounts for nearly 57% of apple's revenue. but investors are waiting on another major product win, especially since the company has seen iphone revenues to climb for the first -- revenue decline for the first time this year. some think apple is over dependent on the iphone and worry about the impact of cooling demand and china. then there is tim cook, a person. tim cook became the most high profile openly gay executive in the u.s. and has become a public advocate for the lgbt community. just taken a stand on privacy,

facing off with the f the eye in a very public confrontation over encryption. and cook is pushing clean credentials, funding renewable power sources for the company's data centers and setting ambitious recycling targets world apple devices. with tim cook hitting his stride, let see what apple's i've years will look like. john: great reporting there. as we just mentioned, 93% of apple's cash holdings are held offshore. it has sparked investigations by the european commission. at stake, possibly billions of euros in unpaid taxes. they are now calling the european commission a tax authority that threatens global tax reform deals. joining us to discuss this is alex webb from san francisco. still with me in the seo is

david kirkpatrick. do you want to talk about this criticism here? do you think in all honesty and fairness as a journalist, is it warranted? >> it seems this is to some extent a play between the u.s. treasury and authorities in europe to see if they are going to pay the taxes where they are going to pay them and this is the treasury saying we want this to be paid here, not in europe and they suggested is an either or scenario, not us. ramy: should apple to be allowed to do that? david: one of the things that amazes me is they have so much profit to deal with and they have this extraordinary amount of profitable revenue he has created. it is an amazing problem to have them probably no company has ever had before.

ramy: treasury secretary jack lew has said the european commission is unfairly targeting u.s. companies, including apple, starbucks and fiat chrysler and amazon. are u.s. companies being targeted unfairly? guest: from a regulatory point of view, i would say yes. there's not a real understanding of the global technology and what the eu is trying to do, the way they handle personal data, storing everything locally, it's not reasonable these companies to operate the way they do and structure their data that way. there's a very parochial national and regional approach i don't think really serves anyone well. ramy: do you think this is something easily wrapped up? is

the next cap here? john: -- alex: i'm essentially biased because i am a brit but air in mind that europe is not a single nationstate, it is 27 states and alan think of those if you are the commission or relevant authority is very difficult. the atmosphere on the mainland is clearly to tax hell out of them and britain, it's a bit more lackadaisical. the balance in those interest is a priority for them and that leads to that on a regulatory level. ramy: as a bridge and an expert, do you think some of this is because these are american companies question mark is there an element of that kind of discrimination?

alex: i'm wary of stepping in to stereotypes but if you are french, that might be the case. if you are german or rish, perhaps less the case. there is a feeling that if money is being earned in europe, it should be taxed in europe in order to pay for the services europe is good at providing for it citizens. ramy: tim cook and donald trump, a lot of people in silicon valley do not care for donald trump and tim cook has said he probably doesn't. there is an open letter from 100 tech leaders that says donald trump is a disaster. even know the republican nominee did propose slashing taxes from 35% to 10%, he's still not getting traction. what more can he do? can he do anything? david: a trump about tech? i don't think either candidate talks about the catalytic role of tech in the economy and i don't think they show a tremendous understanding.

frankly, hillary's policy proposals are impressive. does she ever talk about that stuff publicly question mark hardly at all. from a policy proposal review, trump has almost nothing. i think he could do a lot more, but i don't expect it from them. ramy: what do you think he could do, if anything? alex: as much as any company says they want to go out and change the world, ultimately, they are a profit-making machine. if you are balancing that against the appearance of your customer base, someone like apple in particular, they tend to go for the more premium customer, the high earners. perhaps as a calculation balancing that against who the potential trump demographic might the. that seems to suggest there's no

way they would sacrifice any moral standpoint they have on policy for a quick buck because the downside seems to be a lot more considerable from a reputation standpoint. ramy: tim cook is reportedly hosting a fundraiser for hillary clinton on thursday night. what appeals about hillary clinton to silicon valley folks? alex: this is where we like to say they are out to change the world and the sensibility in terms of the democratic party around the town. there are a few prominent republicans, but if you drive around san francisco, it's hard to see a hillary poster until recently. it was ernie supporters throughout the city and that speaks to the nature of the political landscape. ramy: in that piece, our colleague talks about that apple

needs to have a new product. under the watch of tim cook, the only thing that has come out is the watch. are they leveling out with some kind of innovation curve? david: they supposedly have a car -- they are a very secretive company. the watch was clearly not a home run. it is hard to fault tim cook given the extra grayscale of growth he has done as an execution all leader, keeping the iphone business growing. have they innovated in any fundamental way? no. i look at them in comparison to amazon and they have come out with a catalytic, new device -- it would have been nice if apple would have come out with something like that, but they didn't. ramy: we have to leave it there. thank you for joining us. speaking of apple, check out these stocks we are watching --

they surged 10% in trading on wednesday. it's believed to be linked to apple winning a patent for visual taste in her shoulder navigation -- in plain english, that means augmented reality technology. apple also bought a startup called fly by media earlier this year. maybe you might be seeing that. we have gamco investors on bloomberg surveillance. that happens at 6 a.m. new york time. more "bloomberg west" coming up. this is bloomberg. ♪

ramy: in this edition of out of this world, scientists have announced they have found an earthlike planet right under our nose -- that is in cosmic terms. it is 4.2 light years or 25 trillion miles away. the planet orbits our send's nearest neighboring star and is in what is called the goldilocks

zone where it is not too hot, not too cold but just right for liquid water and life to exist on its surface. there are no pictures. its existence was discovered by math calculations. this one holds particular promise because we may be able to reach it just decades from now. coming up, private equity and mutual funds want in on tech startups. we will hear from the red rock capital cofounder, next. if you like bloomberg news, check us out on the radio. you can listen on the bloomberg radio app and on sirius xm. this is bloomberg. ♪

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>> petro china shares are lower in hong kong after the first income plunge. sina is also lower -- cnooc is also lower but still paid out a dividend of 12 hong kong cents. if a proposed deal in sierra leone may be clouded by tax disputes. 76%.year earnings fell

it will pay a final dividend. we saw the biggest aluminum , saying outside china second-quarter profits grows 10% and sales diversified away from europe. $344ted earnings hit million eating estimates. aluminum has climbed 9% this high demand and tighter supply china. let's get the latest on the markets right now. david: let me just talk about the news that just came in right now. shanghai, authorities are said to be planning more restrictions , more limits to curb what has

been a surge in property prices. so have a look at how we are doing here. we have an intraday chart. we are looking at the shanghai property index. there we go. keep in mind that we are at halftime at 2.6%. just a few details, regulators are planning to include higher down payments for homebuyers to 50% for first-time homebuyers and 70% for those buyers with. he is borrowing records. they are planning to meet and discuss those things come among others, to perhaps look at cooling this resurgence in property market. something to watch out. the bloomberg markets are looking like this across asia-pacific. very thin trades. .ost stocks are heading but let me and on a bright note.

surge in the philippines in manila.company out of the president saying that he is open to having [indiscernible] ramy: this is "bloomberg west." today, we are looking at nontraditional investors in growth stage investing and private equity funds wanting in on tech startups. it's not entirely new. fidelity owned shares of facebook before it went public in 2012, but it's becoming more common recently as more startups achieve towering valuations. especially in the case of snapchat, dropbox or airbnb, more than $10 billion. my colleague is standing by with our guest, the soaring capital managing director who, after 14 years is expanding the growth holdings in the tech space and the red rock capital cofounder.

take it away. >> we're talking about the space of investing in investor capital. it changing to medically and we see a lot of new entries including places like yours. there's so much money and even know there has been a little bit of a downturn, what makes you so convinced we need non-conventional players in here when there is already so much? guest: you have companies raising a lot more money, 40 million, $50 million, and you have a convergence of early-stage investor inc.. you need to have some of the other aspects for the company and i think coming at it from a couple of different angles is

important or it to mature into a billion-dollar company. >> we hear about how silicon valley is so relationship driven and it's all about who you know and how silicon valley company can say to an entrepreneur that we can introduce you to investors. we can bring you the coo and we have the expertise. do investors have in-house expertise that is needed? guest: i think some are working toward it. i'm a little skeptical when i see mutual fund companies writing big checks because is it the lore of the return or have they done not only the valuation work, which is the easy part, but the analysis? we recently had a client ask us not to invest any money

specifically in private companies because it comes with the ongoing valuation this and it depends on the structure. maybe if they put in on a collective investment trust, it may not be appropriate if we have a downturn and people are knocking on the door for liquidity. >> we have seen a lot of people coming in reevaluating how they use tart ups and we have seen valuations dumbing down. where do you stand on that? how out of whack have things gotten and how comfortable are you valuations are where they should be right now? guest: you had a lot of nontraditional money come into the market and usually when that comes in, valuation goes up. there are other deals that

should not be funded that are. at the beginning of the year, that healed back and valuations became a little more realistic. if you look at the number of funds raised, it was a bumper year which to me says this is an investor led downturn and i don't think investors are disappointed for too long. guest: i think when we take a step back and you look at my that equity, focusing their money right now, you see it through a slightly different lens. we see it as the lower turn environment has left investor lands that have not lowered return rates to some degree chasing the return and that sometimes does not end well, same thing for the sovereign wealth fund. >> we have heard from regulars and washington that they have weston's about nontraditional investors.

is there enough -- enough exposure which by nature are very close to may want to grow and do not want the scrutiny from outside. if you are bringing in a mutual fund, should there be a mid-tier of regulation or we need certain disclosures we are not getting because there are so many nontraditional investors? guest: i think the question is whether mutual fund holders should be invest ring in that market. with the question of regulation, it can hamper growth and do you want that implication? >> you talk about growth stage a lot. talk about how it's distinguished me earlier stages and later stages and why is that important? >> we don't have a lot of data when it comes to customers and revenue profits. you have an idea and a product you are trying to chase after

and it is really the numbers. you are looking at profitability margin ratios and i think you do have companies that have a bit of a proven track record, but it is still very people oriented. if you don't have all three parts, you are not going to make it to the next job. i think it is an area where you don't want to repurpose talent in areas that are only looking at numbers. i think you can make a lot of mistakes there. >> you have then a pioneer in enlisting private equity. tell us how your risk appetite is distinct from other types of investors. >> we got inadvertently caught up in this alternative investment craze and private equity is an asset class. we are investing in terms that are feeder funds to top firms

trying to give the investor that buffer and i think the sec should be more concerned about proper disclosure and these companies are public so they have to meet that disclosure hurdle which helps protect the investor. i think if you are private, you need to tell someone that something material is up because that impacts traditional lps.

we have tried to create a product that has that transparency because they are governed by traditional regulatory bodies in the u.s. and outside the u.s. >> looking at the ipo market which has had some rough patches this year, we've seen a little action this year. what is your outlook as we head into the end of the year and for both of you, what do you see as the trade-off between ipo's and like the big publicly trading -- traded company coming in and cleaning up some of these startups that they've just got so much cash and they are worried about this guy coming in eating their lunch? guest: we are less concerned about whether they are going to go public or be acquired. we are concerned that they are going to develop and deliver a

quality product and make quality earnings off of that. whether we are acquired ago public is a secondary thought but i think the market is opening and the tech ipos have really performed well in the market. >> in the last couple of seconds before we go to commercial? >> we would prefer to see strategic acquisitions, but as a general rule, earnings are not growing after share buybacks are abated. you have to ask what is their real motive? are they buying revenues or a strategic it for their business? stay with us. ♪

tom: welcome back. i'm still here with rob rickard and mark sunder hughes. thank you for being here. coming from several years at in turn -- at intel capital, we are talking about long-term investing in venture capital. one could argue companies and their growing venture capital

funds are somewhat of a nontraditional player here. tell me what kind of expertise you bring from intel capital and how you see that changing and more companies feeling like they need to have a venture capital firm. guest: i think if they want to go into the venture space, you need to have that talent. it is different asset classes and each one requires a different way to look at the company and evaluate whether that is a quality one or not. what sorenson decided to do was bring them into the environment as opposed to repurpose thing talent. i think you have to go through different growth curve for learning curve and that can lead to mistakes. tom: what kind of impact do you see them having on the testing environment?

guest: if they have a dedicated group with expertise in the area they are pursuing biotechnology or medical devices, that makes good sense. times where capital is cheap, key to what their shareholders want to see, it may be an enjoyable adventure. tom: you have a lot of cash sitting in these locations and growing pressure from investors to find a way to put it to work. to what extent are we seeing this kind of investment as a response to investor pressure? guest: he saw this in the 90's and as got close to 2006 and to the seventh of they put their capital into venture deals. the by high and sell low strategy, it's not worth it. tom: give us a sense of what right now is hot heading into the end of the year. how do you see that changing?

>> i'm not sure i know exactly what is hot. real assets including startups, i will say stable cash flow is getting a premium. people are understanding valuation may be stretched and could they stretched for a while, but if people can show they have class -- have cash flow business models, their cash flows they stable, those are getting premium multiples, those are justified. tom: how much do you find

yourself advising in becoming an activist yourself? we see the venture capitalists having to advise and all kinds of areas where maybe they haven't had to as companies stay private longer. how much do you see your self inserting yourself into management? guest: being a part of his more the correct way to put it. when we are in the boat and rowing in the same direction, i have full my weight as well. as the business becomes more complicated and an entrepreneur is doing it, it's good to have people who can augment the company.

tom: are there areas you are concerned about heading into next year? remind me how much you have in emerging markets? guest: oftentimes, we have a holding base but most assets are in north america. i'm not sure if we are so concerned geographically as we are with certain sectors and sectors are starting to feel frothy in those sectors, be it cyber security. too much money chasing too narrow and opportunity, much like storage that will become commoditized unless you have the expertise to pick the leader for up tom: how much of a wildcard is the election in november?

how much do you see that bringing caution to the market? guest: i think when you are investing at the stage that we do the exodus four or five or six years outcome it's less of an issue. we are concerned about a company that can weather multiple storms. guest: i think people are generally ignoring it. they are tired of the law and good investors look past things, particularly in private equity and injure capital, they keep their head down. tom: thank you so much for being with us on "bloomberg." -- "bloomberg west." ramy: did you think gamestop would go the way of what buster? we will explain what's behind the company's summer stock surge, next. this is bloomberg. ♪

ramy: gamestop shares have an on a tear, gaining more than 20% since mid-june. the results are out thursday. head of that am a scarlet who has this edition of "numbers don't lie." scarlett: scherzer gamestop have risen since june. some have thought the video would go the way of us are, coming extinct in the digital age, but the numbers help to

tell a friend story. a big reason for that is pokemon go. online domestic sales for pokemon branded merchandise, whether clothing, toys or games, they are capitalizing on that game with its stores being ok stops -- eating houck -- being poke stops. strong consumer interest in virtual reality helped big gamestop stock. they are offsetting declines in new video game sales, a 29% drop last quarter by diversifying. this other category includes the technology brands unit which is at&t's largest authorized retailer. gamestop has waited same-store comparable sales declines but that may change this quarter. same-store sales fell between four percent and 7% in the three months ending in july. not everyone believes new

consoles and a connection to at&t can turn the tide. gamestop was the most shorted stock last year and was taken out of the benchmark index. it remains one of the most shorted stocks on the new york stock exchange. we will watch how these trends play out after it reports on thursday. ramy: that was scarlet fu looking ahead to gamestop earnings tomorrow. and the race for smarter cars continues -- russia asked largest search engine is expanding a deal with toyota to expand services including internet browsers in some cars sold in russia. the thinking is that connected cars will be the basis for self driving cars which we have seen nearly every carmaker announced efforts to get into. that does it for this edition of "bloomberg west." we will take up the issue of the

future of driverless cars tomorrow with our guest transportation secretary anthony foxx. that's all for now from new york. this is bloomberg. ♪

♪ holds a week long low. hurting china's energy giants. federal china profits fell by 98%. endures a wintry reception. >> > thailand's top energy compy looks for more