>> you are taking a look at live pictures, that would be five -- vice of samsung chairman of samsung being taken to the prosecutor's office to be questioned. he was handcuffed as he was walking to the office from jail. involved in the bribery and corruption scandal ongoing in south korea. live pictures out of seoul. australia has sold $8.5 billion -- debtyears of dealt notes. rampingrnment has been up issuance and trying to rein in the budget deficit to finance a growing debt pile.

china's is the potential housing bubble may be paying off beard -- paying off b. tightenedrs have restrictions on property lending appeared shares of developers rose after the data. former hong kong chief executive donald song has been sent to jail. he disclosed a conflict of interest when he was negotiating with a landlord who was applying for a broadcasting license. beard -- appeal. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. ♪ cory: i am cory johnson in this is "bloomberg technology."

snaps roadshow rolls into new york and is facing investor concerns. what investors are saying, head. and uber was into damage control unit we're looking into her -- allegations of sexual harassment. and the $350 million compromise. the new terms of the verizon-yahoo! deal. first to our lead. first u.s.g off its investor roadshow in new york with a planned ipo next month. a have a lot of work to do. they have slower user engagement . sarah frier caught up with a portfolio manager who attended the roadshow. at $20ink anything billion you have to justify the evaluation four. the questions are user growth and moderation. they dance around user growth, alluding to issues with android,

and monetization they touched on it lightly, but as the story progresses, they will need to see more metrics. cory: joining us from new york is alex and jennifer. how did you get these guys on the street? alex: we were outside in new york today trying to grab investors to hear their take. to his point, the top thing when ,sked what is your take away user growth was the first thing a lot of potential investors said to us. like you said, the executives of on android, but i heard a lot of instagram being called out by investors who point to the stories feature they recently introduced that very much mimics snapchat. others brought up the new whatsapp feature rollout where you can send images that mimic snapchat. there are internal issues like

needing to bend out on the -- platformon the android to its non-core market, but investors question the competition factor and it will surely be on their mind. cory: jennifer, the monetization issue is a euphemism if there ever was one. tons of people are using snap. not a lot of people are generating revenue for snap. what you think is a monetization halfway? i think the opportunity is around the data and audience. they appeal to a much younger audience, they are a content creating machine, they have to tap into that and use that data more effectively than a lot of their peers. advertising the only real opportunity for these guys in terms of revenue?

there is nothing wrong with an advertising only model. has been thet historic approach. there are a lot of different ways you can monetize around advertising geared marketing dollars are getting more segmented. i think the larger opportunity would be around how they use the data and selling that data to different applications. advertising being the largest bucket and the new scale down from there. cory: the evaluations for the business are -- valuations for the business are astounding. it is a lack of gross margins. basic concept is to sell something for more than cost. did you get feedback that this might be a good or bad business, but high-priced? alex: we have seen the price come down. since october of last year, we are looking at valuations at around $35 billion. they have a market value of

about $18.5 billion. they have come down as more information about the company has come out. when you look at where they are spending money, obviously the profitability is an issue. they talk about that as phase three. phase one was development, phase two was user growth, and phase two will be profitability. the conversation around their technology infrastructure today, they said they expect the cost of infrastructure to eventually its two providers compete on rising. they also said they are opening bash open to building their own ever structure. there is some conflict around that right now. jennifer, i bet you would have no complaints if any of your investments could go public

at 17 times sales beard that sales. awesome: that is an number. they are betting on of the monetization and the massive amount of users and content. it is their game now to prove that out. it is common for startups to prove that out on the public markets when they feel they can start to build productive ability into their business, and that will be the name of the game. the public domain cares a lot about stability and predicting growth and building that into business will be key. cory: the gross margin issue is a serious one, jennifer. the negative gross margins and the last year, i know the last two quarters look better. maybe a former investor would have discounted that in an ipo grow sure. were generally horrendous. we're not talking about operating margins, what was

referred to with expenditures on the cloud, but the basic pieces of what they sell. jennifer: i think it comes back to some issues, one is the fundamental cost infrastructure, and they haven't been on a tear in terms of users and content growth. that has forced them to not focus on costs yet until he got to a size where they can take advantage of scale and really think about creating a competitive dynamic in creating their own in for structure. google had a similar exercise when i started out and they built a phenomenal, low-cost infrastructure as they started to focus on gross margins overtime. cory: what is next for the roadshow? be in boston.l we will continue to be listening before they head to the west coast. the process will continue, they will keep pitching their wares, fielding questions from investors. they mostly just did q&a for now

it was not a lot of presentation. it seems like they might feel like they have expressed their shares areore scheduled to price next week on the first of march. that would put a testing day on march 2. that would be where i am putting my focus for the next two weeks. cory: you do that, alex. we appreciate your work. alex finally has something to do with an ipo. and jennifer, cofounder of aspect ventures. think you very much. an insider gambling -- trader case will go to trial next month. they want to show jurors the have a history of illegal trading and apple. prosecutors did not reveal the details of the trade, but walters was accused of trading by former chairman tom davis. coming up, walmart benefiting big time, but is it enough to

take on amazon? all episodes of bloomberg technology are live streaming on twitter. check us out on twitter. 5:00 in new york and 2:00 on the west coast. this is bloomberg. ♪

cory: u.s. tech giants continue to face regulatory hurdles in the eu. microsoft is facing privacy probes over windows 10. regulators from seven countries are concerned that even after making some privacy related changes, microsoft is not in compliance with fundamental privacy rules.

microsoft saying it will continue to cooperate with national data protection unit. walmart posted fourth-quarter earnings that tells you more about analysts and the company, it sent the stock up 4%. the world's largest retailer benefiting from the acquisition of jet.com. posting 29% growth in the u.s. in the fourth quarter. helly covers walmart. i'm not struck so much with the amazon coarison but macy's, kohl's, all these companies reported poor sales growth in the fourth quarter and walmart was different. shelly: this was definitely a surprise for walmart. they had been struggling for some time. they have been the world's

largest retailer and a thought was why can't it catch up to amazon? this was a step in the right direction. cory: to that, we don't know the actual numbers of how big the businesses. a give us the percentage of year-over-year growth, not the actual numbers. google never tells how many clicks they have, they just tell us the change in clicks your of the year. this seems like the kind of number they should be breaking out. shelly: i think you are right. we know a little bit. we know that last year they did a little bit around $14 billion in sales. the bulk of that does come in online sales. the bulk of that comes from the u.s.. it is a tiny number when you think about the fact that walmart is almost half a trillion, with a t, in sales each year. cory: we heard from the walmart ceo. check this out. continue to invest in

e-commerce to accelerate growth. we are gaining traction and moving faster. we are the second-largest u.s. online retailer by revenue, one of the top three online retailers by traffic and our walmart act is one of the top three apps in retail. cory: no joke. thet the suggestion that overall revenue is less than 5% of sales? shelly: the characterization of them as the second largest retailer is also up for discussion. it doesn't take into account apple, for example, or hewlett-packard. traditional about retailers, walmart is the second-largest. cory: to that, what do we know about their traditional business? is that going the way of the other retailers that had a tough fourth-quarter? shelly: one thing going for them is this confluence of physical and online, the online grocery.

that is when someone orders online and they pick the groceries up in-store. you are starting to see walmart start to benefit from brick-and-mortar, which is something they have always said is an asset compared to amazon. no matter how you cutt, they are still much smaller than amazon. they are taking e-commerce much more seriously. cory: i'm sure it is the responsible thing to help investors understand the business. they need to tell us what happened with jet.com is that of the showing the revenues. shelly: we still don't know what jet.com was doing. there were only a year or so out of the gate. we don't really know the exact numbers but we know they weren't that big. what is more important than jet who has ane new ceo

eye toward e-commerce and as someone who could really change things up for walmart. ,ory: we are showing this chart it is showing that the online in the last quarter acquisition at all. maybe there wasn't uptick in sales online for the next three quarters. shelly: jet.com is not yet included in the comparable sales. we will see that in the upcoming year. what this shows you is and does reflect a few changes they have made to e-commerce. that is the global chart, but what there's trying to break up now is the u.s. e-commerce growth. we don't know where the numbers are coming from, but it goes to show you what walmart is reorienting to. global growth might have been a focus for us before, but we are now really focusing on the u.s.. when walmart puts out a number, is just like amazon, a do it

very intentionally and they want to draw the markets attention to. that is the focus going forward. cory: maybe more focused than amazon when the press releases have 40 different objectives from one quarter that may be gone the next quarter. shelly: into their profits good -100 to a lot. cory: great stuff as always. check her out on gadfly. uber is scrambling in light of a second er crisis in a month. details on how the company is responding to sexual harassment claims. and we would like to direct you to our interactive tv function, .v you can see previous interviews or dive into the functions we talk about. messagesend us instant

during the show, distracted me while i am on the air. do it. only bloomberg subscribers get that privilege. check it out, tv this is bloomberg.

cory: for the second time in a month, uber is facing backlash. the ceo sparked controversy for participation in president trump's business council. when the immigration order was and he stepped down from the group. more than 200,000 people did indeed delete the app. this is an old problem for uber. employee blocked about gender discrimination and harassment of the company. this sparked an urgent investigation led by former u.s. attorney eric holder. this is not a new issue for

uber. this has come up quite a bit for this company. isthe issue of whether it misogynistic culture has dogged it for a while. travis's comments have not helped the company, he called it "boober" at one point. the specific sexual harassment allegations and how the human resources team handled it, that is new in moving the conversation forward and through the company in a bit of shock. cory: tell us about the blog post and what it said. it was an interesting read. eric: this is susan fowler, a software engineer working on site reliability, and basically she said that one of her joineds, as soon a she the team, had messaged her and basically propositioned her, said he was in an open relationship. almost more troubling, she set

you took the claim to human resources and they said he was a high performer so they would not do anything about it. she could change teams or deal with it. pretty troubling allegations. there is a lot more in the post. "ory: you mentioned the "boober thing and what is happening with the company's response to allegations against drivers and what they have done with that. eric: with the driver side, there are millions of them. drivers they have to deal with. we don't actually know the incident, which confuses the whole situation, but there have been questions about how they handle support, whether they do enough ground checks on drivers. 11,000 orhave the more employees they're working also worried about, but the millions of drivers with allegations there. cory: i think that it is a

startup belies what is happening there. 11,000 employees and drivers all over the world. this is a big company that seems babyve some aspect of company behavior. i don't mean this in an insulting way, but going through a cold role definition in the business even though it is on a large scale. eric: it is nearly eight years old. our best guess last year was $5.5 billion for revenue. it is a big business. it grew very quickly. the majority of the 11,000 employees joined in the last two years. a lot of the processes are getting created and there is a historical silicon valley, we don't need hr, and boomer is trying to build the processes, but they don't have everything they need. cory: there are things they cannot control. when i was an investor, i used to go around -- if i visited a

company and i saw employees had their stuff in a cardboard box, that meant they were changing the i didften that not -- that i did not want to own the stock. it does improve that the allegations are true. travis did apologize for the company's problems. their companies to grow fast and break things but you don't want to have problems like uber is having right now. cory: travis addressing the team, hiring over the course of a weekend. these are very big moves. addressing the team is hard to do. i think it is hard for countries to figure out what they do need to do. eric: this is a company that has had a lot of pr nightmares. they delete bloomberg, realized they needed to respond

quickly. i also think they realize how serious this is. they need to be able to recruit from google and facebook. google is known as one of the happiest places to work. airbnb -- cory: also paying top dollar. eric: right. if engineers leave because it is a hostile environment, that puts them in a bad position. cory: do you think they will respond to these things more quickly than in the past? eric: eric holder is about as top gun as you can higher, so i , so i think were will have to see. cory: thank you for making the long trip here from the other room. coming up next, teslas drive shares at an all-time high. cash flow burn could be a nightmare. we will discuss, next. this is bloomberg. ♪

hong kong.30 p.m. in i have an update of the top stories. president loretto mester says policymakers don't want to suppress the market on interest rates while staying nimble and adjusting their outlook. in singapore, they said uncertainty over fiscal policy from the u.s. administration should not stop the central bank from raising rates. >> you don't want to wait too long because you will be behind. i don't believe we are behind the curve yet but i do give we continue to make progress on the goal and delaying, we will get behind. why is that important? we want the expansion the last. >> opec and russia will need to

prolong their six-month deal to curb oil outpatients -- output. an exclusive interview, he says he plans to lower the break point because it is not convinced tough times for the industry are over. >> if they wanted to have an impact on the market, which is to see the investment is down, ,t will be to have extended that is when they should be compliant with what is announced. it is good for the industry. >> to former currency traders from deutsche bank have been jailed up to 15 weeks in singapore for cheating the banks by making false trades. two were convicted in january of using their banks accounting in 2009 to get preferential rates

on the dollar. the judge says the men were motivated by it self interests. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. you are watching bloomberg. that's get a check on the markets in the asia-pacific. we haven't seen much asian markets -- we have seen the asian market bouncing back after yesterday. we are seeing the property players really lead of the gain in china and hong kong markets. property stocks and hong kong, that index ranging all over after the movement coming through in terms of poverty curving with the new harm price started. -- home price starter. the yentarting to see strength and the dollar after a couple of losses. we are seeing some other movers coming through in the region, as

well. keep an eye on the us trillion bond note, $11 million worth sold. this is bloomberg. ♪ cory: our top story this hour, snaps investor roadshow in new york. they have an ipo slated for next month. they have weakening metrics. sarah frier caught up with a portfolio manager who attended the roadshow and was troubled with the slower user growth. >> that was a bigger concern amongst people in the audience going into this, and i don't think the actual roadshow addressed it, pointing to problems with lower end android is not addressing the elephant in the room, instagram. thatnk he needs to clarify

. certainly there are more questions than answers and that regard. in new york.s the other reporter covering the roadshow is alice franco. sarah, we talked on bloomberg radio in you said the sentiment from investors was pretty strong. sarah: it was a packed room. referred to was evan spiegel. he got really good ratings from the people at the roadshow. they said he was polished and confident. there were concerns about user growth. he is not the only person who thought that instagram needed to be mentioned a little bit more by snapchat as a threat. they were mentioning it was all android, and a lot of the people leaving the meeting. they needed to be a little bit more clear about exactly how much the facebook competition impacted growth. cory: what is all android referring to?

sarah: they explained the slowing user growth was a problem with the android version of their products. that is something they have since worked on. that implies it is a one-time issue. if the issue is in fact something to do with the competition from other players, it is going to become clear in the next couple of quarters when we see the user growth, if it is still slowing. cory: it was not the slow in one quarter, it has been slowing quarter after quarter. that isn't normal, but they're coming up with a new excuse for it. -- that is normal, but they are coming up with a new excuse for it. sarah: they want to say that they-- can change the way that media consume media in a broadway, not just among a younger set of users. other questions, people were

asking snap if they had been able to break into a broader market and snap was explaining that their users are very broad based. other questions were about infrastructure. snap have high losses compared to its revenue. they are reliant on google and amazon paying them for cloud appage just to sustain the growth. they said eventually they think the price will come down and they will benefit. $890,339 is how much the company spent on personal security for the ceo of the company. on top of that, you have a class shares for lead investors with no shareholder rights in terms of voting rights. is that a concern you heard? was a concern we heard more at the london roadshow which was on monday.

people were worried about, why are we buying into this company if we are going to have no voting power or control? amongs almost unheard of stocks listing here. is really just starting out doing what a lot of his peers have ended up doing after listening for a few years. remember mark zuckerberg took some voting power away from his shareholders last year. the same happened with google. cory: it is hard to get my head around those numbers. that tells you a lot about the company, i think. sara, thank you so much. tesla stock has been flying out of a q4 earnings report on wednesday. the company announced its $2 billion deal to acquire largesty, elon musk the shareholder for both of those companies. you did a great piece on how the

analysts on wall street have thrown up her hands in how to include solarcity result. of people are waiting for more guidance, because the deal closed in late november, so you have a month of financials to incorporate and some analysts said forget it, i will sit this quarter out. cory: i think that is insane. solarcity was a public company. they have financials, very detailed financials going back for years. they know exactly how the business works, with the cash flow and metrics were. theyshouldn't need -- should be able to tell what is going to happen in the future. dana: only three analysts covering a tesla have experience covering solarcity. ice cream at the heavens, that is what i do. dana: one of the other

questions, is not clear how solarcity fits into tesla. is it its own business? are they going to break both of the divisions out or are they one division? no one really knows. cory: the numbers will be greatly affected by that, not least of which is the cash flow. had negative and noticeably poor cash flow results, burning billions of dollars in quarters. dana: elon musk's promised there thed be millions out of to balance sheet. i think investors want to know what is happening with the factory in new york, what is happening with the solar storage they're trying to do. cory: the notion that the buffalo, new york factory, that is the panels? dana: into the solar roof they

unveiled last fall. cory: it is interesting in terms of how these companies come together because it gives them something else to focus on them the actual shipment dates for the model three. where do we stand? they have been falling back and falling back over the course of the year. production is supposed to begin in july with shipments slated later this year. the big question is where are they on the timeline, and what are we talking about in terms of volume? at one point, elon musk said they might sell 2000-3 have those -- 2000-3000 this year. we are trying to find out if the factory is ready. cory: it is interesting, not that everything you say isn't interesting, but it is interesting that you are suggesting that because elon musk has not been able to live , thatthe predictions

nobody even believes it anymore. dana: i think he routinely makes comment on calls or publicly -- wildlyidely ambitious, and then he scales them back. people want to know where we are on model three, but i don't think anybody expects them to sell 200,000 model threes this year. cory: we really appreciate your time. thank you for your work. get intuition, we will talk to a vc that uses data. that is next. and we would like to bring to your attention interactive tv. .ou can find tv dive into securities on the bloomberg functions we talk about and become part of the conversation by interrupted me -- interrupting me during a live broadcast. check it out. ♪

cory: facebook and transfer wise -- it is an international money startup. it lets users sign up for foreign exchange transactions over the chat platform known as messenger. they have canada, u.k. and europe and they hope to expand. come signifiers data at levels they have never seen before. a screen top engineering talent. me a fewmer was with

weeks ago. i was blown away. chronologically, how to other companies do venture capital? how did you do venture capital before signal fire? big around firms different markets, they will meet with influencers in different domains and run around , be redirected to potentially interesting companies. needle in the haystack. by comparison, we start from first principles on what we think are the most import things in a given market and we actively and practically track those things in real time. cory: give us examples. chris: everything from consumer engagement on apps, those types of things, the movement of talent in tech. cory: stop there, tell me about that. chris: talent is the lifeblood of the tech world.

engineering talent in particular is the most fluid commodity. people vote with their feet every day on what copies they join, what they think will be value options, whether they stay with the company. it is a variable that is critical to building great companies. cory: how do you track to see how the engineers are going? chris: we don't get into the methodologies we do -- cory: i can't ignore that one. chris: over 10 million different sources. things all over the internet from a webpages to fundraising profiles to regulatory filings and social networks and everything in between. -- whend you have this i log into this computer right here, i've a special launch that looks like this. it shows you a time of information. 500, red isthe s&p down and green is up. details on some stocks over

there, some earnings stuff. i have earnings growth of different companies. i get that in a second. this your screen look like that? chris: a lot like that. we have over 6 million companies. cory: 6 million companies you are tracking. you change your investments aced on that kind of data that is popping up on your screen? chris: it is different from the hedge fund industry that is able to trade life on an exchange because you have to be invited. you have to see things early and the system helps that. we also have a network of about 50 advisors that serve effectively as scouts. then we have to analyze the companies that make the right investment decisions. that is the judgment element, the human element. cory: that is not a data thing. chris: you use it to do , to see ifanalysis this is the best team in the industry, how downfield the commentators -- competitors are.

who: warren buffett famously bases his investments on intrinsic value also says there is no methodology to intrinsic value. it also radically differs depending on the sector. a semiconductor company looks very different versus a social networking happening versus a transactional business like uber peered cory: this is also mean you have a more diversified portfolio because you need to wait companies differently the betting on the market? you have to take different approaches according to the sector. there is the weighting of what is important in the sector. cory: it has to help you in raising capital because you can go to pension funds and endowments and say we have a distinctly different approach. i can't get into the

details on fundraising, but i massivelyat being different from other venture firms is very helpful. , howe were very skeptical can data be used? you have to fall for that problem. in cap to add a lot of value to the companies. just start with sourcing and monitoring, a goes all the way to helping portfolio companies. we build systems that directly plug into the contraction systems and have real-time alerts of when people are likely to change jobs. cory: what you mean? chris: all the way out for chrome plug-ins so that the recruiters for companies can gain access to potential opportunities for creating that recruiting. .- for recruiting

cory: you are essentially giving this to the companies you are investing in? we have a network of 50 advisors that are all wired into the system, similar to how you would look at uber. there is an advisor version, a portfolio version. cory: you are more uber black men uber asked. uber x. than of yahoo! hacks. next. this is bloomberg. ♪

yahoo! isre sale,

nearly burning with hacks. been acquired for $350 million less after security breaches were revealed peered the company is valued at $4.5 billion in cash. chris joins us right now. this is a better deal for verizon. chris: i think people thought it could be a bigger discount. even a billion dollars. is billion -- $350 million relatively small. it is a haircut. cory: what is $350 million. it is a lot of money, especially because the $4.5 billion gets them everything. end of the day, that is what folks are thinking. we are looking at a discount. there were serious questions about whether they could make

this work. it was a big deal. not just one hack was exposed, but two. consumer trust was in question. cory: there were two issues, one was what did they know and when how did they it, keep the secret after they already knew about it? brian: i think we know a lot of this has got to have some kind of resolution. analysts were saying, look -- cory: my question is, did they tell verizon about the hacks before the deal went down? from what we understand relayedmber, it was well after that. many months of

negotiations and the we wake up one day and find out there was a massive had come over 5 million people. i assume you woke up at your desk, you're always the first person in the building. the relationships are certainly very important. the other thing is, what does this do to the yahoo! brent? and? did consumer say, i'm not going to use them? i don't want myself to be hacked. the very business itself could be heard. brian: exactly. that is something everybody was watching closely. it did not look as bad as some people thought they would. engagement came down and then came back up on some key metrics. cory: they were numbers they did not used to give us. brian: they opened up more than we usually see. they were itemized a little bit, not specific on everything, but

we got a feel for how things went after this was exposed. that said, we were not seeing snapchat-like growth or anything like that. yahoo! was still very much an asset with issues. they were trying to hold water. cory: mercer mayer, dishes day? does she stay or go? we reported last year that verizon would be replacing her with some executives they have. today she was all happy. cory: i bet she does, she gets out of there. brian, always great to see you early in the mornings here. thank you very much. that does it for this edition of "bloomberg technology." on wednesday, we have the ceo of on hold. .- armhold we will have a lengthy talk.

check us out on twitter. weekdays at 5:00 on the east coast and 2:00 on the west coast. that is all for now. this is bloomberg. ♪

bloomberg speaks with the ceo about donald trump, and threats to the price of crude. >> libya coming back to the market. august -- i strategy is for a breakeven event. anna: the central bank doesn't want to surprise markets. we await the fed minutes later today. immigration takes center stage. the trump administration out lots plans for sweeping deportation