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tv   Best of Bloomberg Technology  Bloomberg  April 14, 2017 9:00am-10:01am EDT

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caroline: i am caroline hyde. this is "best of bloomberg all ofogy." we bring you our top interviews from this week in tech. president trump met with ceos on his infrastructure plan. how tech could be playing a bigger role. toshiba warns about its futures on the heels of a earnings announcement. we will discuss if the company can recover. 23 and me clears a regulatory
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hurdle. our interview with the ceo on the future of the genetic testing market. president donald trump's message to corporate america? job creation is at the top of the agenda. he made this announcement after a meeting with 20 ceos focused on the $1 trillion infrastructure program and tax .olicy going forward in attendance? pepsi, ceos. tech ceos were noticeably absent. how is silicon valley's relationship with the president evolving? theosed that question to cofounder of silver lake partners. >> staying alive is the only thing they seem to care about.
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the infrastructure thing is a headline. it is not actually a plan. relative to silicon valley, the actions are extremely destructive. it head of the fcc made clear he will be hostile to the needs of consumers, and by extension, entrepreneurs who are trying to create businesses in technology. i am not optimistic. the opportunities for any president of the united states to build great value through technology are there, but the industry needs help now. it got its self a little out of joint. are great opportunities, but also challenges. the industry has been too focused on getting rid of jobs. technically, the economy is at full employment, but tens of millions of people feel left behind. i would like to see silicon
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valley have a new challenge to create industries that employee people in good jobs. if you had that kind of challenge, silicon valley would rise to it, and great things would come out of it. silicon valley created great jobs. there is no reason we could not do this broccoli. broadly. automation is e-voting jobs in factories. should we not look for a paradigm shift in how we work? is fullyel everyone employed in a job or you can't be creative? >> the economy requires consumers. consumers spend two thirds of the money. it doesn't work if a large percentage of the population
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doesn't hurt in economic recovery. goal has to be to make jobs more fulfilling so people have more money to spend. was that he would pay his employees enough to buy his cars. that one of the challenges in the country as we have been doing the same things for 40 years. cutting taxes and getting rid of regulations. there were benefits at the early part of the cycle. the benefits have been accruing to fewer and fewer people. ime to try something different. >> is there a net? >> i'm not confident to make that call. it doesn't have to be the way it is now.
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you saw american airlines with the horrible situation. we have had increasing news about wells fargo. those are a result of deregulation going so far that companies have no regard for their customers, and no fear of repercussions if they treat them badly. in my mind, we have to make changes. those things are not working and are not healthy for the economy, to have customers treated that badly. wherever theyrs, be based, to create long-term gainful employment. >> that was the model until 1980. companies view themselves as not only having customers and shareholders, they had the communities in which they operated. >> efficiency has eroded that.
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>> why is efficiency the only thing to focus on? it has taken us where we are today. a good thing. some efficiency is healthy. >> slow it down? >> just reprioritize. we will reward people for creating jobs. we will reward for industries -- .> trump did trying to get people back in -- >> the economy is basically at full employment. there is nothing he can do on jobs. we have to qualitatively change that jobs out there. to have jobs were they can take care of things like health care. i don't know about universal income, what i do know is that universal health care would take away one of the biggest fears people have. make it possible for the economy to do better than it is doing now. theave hollowed out
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economy, eliminated the middle class in ways that are not healthy for public companies or private companies. if you want to be a business person, ask is there a better way than we are doing it now? the answer is likely to be yes. carolyn: at&t is buying a at $1.6in a deal valued billion. straight path is one of the largest holders of a certain is used toctrum that power services. at&t hopes to compete with verizon and t-mobile with faster internet. this is the second such acquisition for at&t this year. their sheep reports earnings results after delaying the report twice. toshiba displays earnings reports after delaying the report twice. to a former google
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employee who says the engineers in silicon valley are creating an obsession. this is bloomberg. ♪
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caroline: toshiba reveals doubts about its future after months of dealing with the fallout over the bankruptcy of its nuclear westinghouse unit. this westinghouse nuclear powered business is so interesting. it had so many problems, many of their own making. not really coming clean. we have a development where toshiba says we will publish our financial results even though the accountant will not sign off on it. and, by the way, we might go bankrupt. >> sledgehammer that in. history in chips, they
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used to roll a roost. -- rule the roost. >> i will never forget the late 1980's. they were so dominant. the only american company that was intel.innovation he said you don't have to be a semiconductor analyst, it is over, we have won. look atempted to google, facebook, apple, that way today. what is going on at toshiba gives you a sense that in technology nothing is forever. >> and they made really dumb that's. -- dumb bets. vetting on nuclear power was a bad business decision. businessies make bad decisions frequently. that comes with the territory.
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you outgrow your market and you look for something else that looks like it will replace it. inevitably, they are not domain experts and what they buy, so something goes wrong. >> japan a long time ago versus the u.s. now, we have a lot of access to shareholders. garnering ofa control, the purchase of instagram, do you think the safeguards are there for shareholders to reign in bad behavior? >> there are certainly frauds in public traded markets. that is how i've made my trade for many years. if you look at the problems with what toshiba has done, the nuclear power business is one where the contracts are so long and the financial guarantees
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they must provide to their customers is so great, that it doesn't have the wherewithal to recover. they don't have the financial backing, the guarantees, they can provide to the companies doing the work for them. our next conversation on a growing global addiction to smart phones. perhaps you are concerned about your addiction levels. engineers at silicon valley are creating phones and social networks to get people fixated. it is a phenomenon some are calling brain hacking. we dug into the long-term consequences. an interesting problem. all of the technology companies are locked into the attention and economy. whether it is a meditation app,
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arelix, bloomberg, you competing for attention. aat i wanted to create was conversation about the advertising, the attention economy, whether it is creating the kind of world we want to live in, how it affects children with increasingly persuasive techniques that into apps like snapchat that go public on networks like this. targeting with the not-for-profit movement, and the people listening? minutes" with"60 anderson cooper. people in the industry agree, but it is hard to accept what is at stake and how to get off the train. if you are a product manager at facebook, how you are measured is to maximize engagement. you'll leave the company two years later saying i increased this metric. the increasing usage doesn't add
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up to what we want our world to look like. it is a world that is increasingly persuasive, and leaves us having to show someone the most engaging things that are not necessarily best for us. >> good to see you. election season, over the course of the summer, i was alarmed by my perception that facebook had inadvertently become a tool being used to distort democracy. first in brexit, then here. talking to the team, there was a to accept responsibility. to dismiss this as we are running experiments, some don't work out. is this something you think can be addressed in the industry, or will we need a regulatory thing from the outside to get the proper attention brought to it? >> we need more attention brought to it.
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where will it come from? from regulation, consumer pressure when people realize these companies are not building products just to serve us, they have to serve advertisers are you are right to be concerned about how this is affecting the elections. one of my deepest concerns as well. they spoke has a team of engineers working on the fake news problem. are they going to be doing enough? how are we going to know what they are doing? how do we know if they will put ifthe resources, especially it conflicts with their business interests. we don't have any public ris representation. apple, google, and facebook run this city, and we have been inside for a long time, but we need representation.
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relationship where we have representation in the city? one challenge is that the consumer has no way to become aware of the problem. i look at the so-called filter bubbles around google and facebook where you only see things they believe you like already. you build walls that are essentially impervious to all outside influences. against that, they created add tools allowing advertisers to discriminate. that business auto has been so successful that the economic argument has been compelling to those companies. it is hard to admit that you caused brexit or contributed to trump being elected, if your business model is doing those things that enabled those outcomes.
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>> i agree. if you look through history, there are often times when we discover something is morally repugnant, but our economy is based on it. there used to be slavery. it took 60 years when the britis -- it took 60 years. when the british wanted to get off of it, they had to get rid of 2% of their gdp every year for 60 years. our economy is propped up on advertising. when the costs are too high -- on facebook i have one news feed that has filter bubbles that confirm your beliefs, and another that doesn't. if the one that doesn't confirm your beliefs doesn't hook you, everyone else will get the attention, so i chose the one that confirms your beliefs. a >> is it best to target the
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consumer? is it for facebook to hold the executive to account? is it employees that you target with efficacy? of havingthe idea more shareholder control and influence when we realize the cost on democracy and children. that is a fantastic way that has moved industries in the past. the threat of regulation is another one, though it is hard on the current environment. there is option analogy in california, because of the legislature you can go to their. that is what i'm trying to create. up, and: coming exclusive conversation with one of the well known genetic testing startups. from theny's big win
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fda. bloombergdes of " technology" is live streaming on twitter. this is bloomberg. ♪
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caroline: the dna testing has cleared ae hurdle with regulators. the fda gave the company the green light to sell genetic testing kits directly to customers. the first and only company in the u.s. to provide such reports without a prescription. there was previously at testing kits,the while the u.k. and canada anne wojcicki embraced it. and canadath --
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embraced it. we spoke with anne wojcicki. >> the fda wanted us to make sure the data is accurate. so if i tell you a result, that is reproducible. the second thing is the comprehension. country and prove that all different education levels could understand the data. one thing that is core to thedme is that we have believe everyone can be a scientist, to learn about themselves. we designed the product and experience so anyone of any education level could understand the information. and so far, how did you select these first, and will you be adding to them? >> that is part of the process, we want to keep consumers up to date as genetic discoveries are
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happening. we focused on parkinson's and alzheimer's because they're the most commonly requested reports. one thing people don't fully realize is the medical system doesn't have those. you can talk about if there's anything you can do, a clinical intervention with alzheimer's. consumers want the information week as they might be making a lifestyle change. 2013 they have been able to find out ancestry, history, certain caffeinated beverages they may react to, and what their children might inherit. test, can youne a the out your reliability in 10 conditions? >> if they have gotten a report in the last few years, they will get the reports.
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customers on a pre-existing platform may have the old experience and we will wait for them to upgrade. those that bought a year ago will get these reports. giving education, making every a scientist. to useowered are they this information? will people run to their doctors because they have more exposure to these genetic conditions, or can they go to their insurers and show that they are more safe than anticipated? notne thing people do understand, there are a lot of aspects of health care in the prevention world that does not tap into the traditional system. people find out they are at risk and want to make lifestyle changes. exerciset want to more, change their diet, have a coach of sorts. when we did studies in the u.k.,
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we found people were not running to their physicians. some do ring it up at their next appointment, but it is not generating more visits to physicians. but people do want to make lifestyle changes. when i think about the big picture, we want to embrace a consumer health care movement. or consumers think about their health care, not episodically at the doctor, but every day. what am i eating, exercising, what are the choices i am making? when we think of other online consumer-focused companies, they will help make the behavior consumersat we know want to make. >> will 23andme provide coaching? links.rovide .ur expertise is genetics
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we want to enable other companies to help customers take it to the next level and execute in that way. reach of yourthe business and where you take it next. you have been using the data, the privacy of 23andme always comes to mind for many users. how is the data used, and what could the data due to push forward research into certain diseases? >> data privacy is first to us. we base our ever see on customer choice. if you want to share with no one . we never share data without consent hereplicit people with a specific disease often want us to partner to do research with other companies. it is a matter of choice. ceoline: that was 23andme anne wojcicki.
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spotify may have an answer for exodus we hearor from an investor, next. comcast looking to take on netflix and amazon. plans for an online video service. this is bloomberg. ♪
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caroline: welcome back to "best of bloomberg technology." i am caroline hyde. a bloomberg scoop. comcast is taking on netflix and cbs. they will offer hit shows from the universal tv network in the next 12 to 18 months. comcast is still determining details, like if they will have a live feed, and if they will include sport. a traditional media company, comcast, cbs, fox, disney, down the line, you have watched netflix and amazon
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attract huge audiences with on-demand services and dealership for live, traditional tv go down. there is still making billions of dollars, but we need to do something for the future. a couple ofd with services. time warner has one with hbo now . comcast has done smaller ones. a network for comity sands, but this would pull together programming across the comcast network. football, this is us, reality programming, and maybe sports as well. >> advertisers could love this. they have a demographic which is slightly younger than the rest of them. which has a product in the marketplace called all access. feed, onine, a live
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demand. the average viewer for that is significantly lower than cbs. if you look at the trends in tv viewership, it is only getting older for live tv. most young people are not watching live tv. if you want to reach them and not sacrifice that demographic, you have to come up with something new. >> something of their own, talking to a man who has come up with something of his own. it breaks my heart. he decided to pull his music from spotify. he pulled his whole catalog from spotify with the exception of 2 records with r. kelly. half of his catalog is off apple music. if you want to listen to classic cannot gets, you
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them anywhere but spotify, or song by song on youtube. universal music group just made a big deal with spotify last week. over the weekend, his music disappears. kind trying to send some of message. maybe he is trying to send a tidal.o dude be helpful if someone in his camp would call me back. >> tidal was a european-based company he bought. how is it doing? it wasn't a huge success. getter forattention them has been exclusive windows, early chance to release new music from several of jay-z's friends, proteges, and partners. most analysts think it has 3 million to 4 million
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subscribers, the third or fourth biggest in the market, but behind spotify and apple music. the owners did manage to sell a stake in tidal earlier this year. caroline: speaking of spotify, and they made waves after reports it is considering an unusual way to satisfy investors. thinking of a direct listing. it would not involve underwriters and would sidestep price speculation that precedes a tech unicorn. we spoke with one of spotify's backers along with bob o'donnell . on the direct listing is positive. we think it signals confidence. the company reflects the idea that the business is financially
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they have enough cash on their balance sheet to fund their business. they do not need to raise billions of dollars in an ipo to be successful. it challenges the notion that a business needs to go through the traditional ipo to market the story. our view is a great companies do ipo roadshow necessarily to have a following from the investment community. we believe in management's capacity to do the right thing for the business and shareholders. we are not convinced the ipo roadshow is the de facto route for companies to go public. has been taken on by spotify. it confused me why they would not want to take on more money to pay down that debt. the terms of the debt are in some ways pushing them to go to a direct sale listing sooner
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rather than later. would you like this to come in 2017 rather than 2018? love for the business to go public. management determines the right time for an offering. the triggering for an ipo is not the debt, it is not driving the decision to go public. rather than the appropriate timing for the company. this past week they solidified negotiations with universal, a huge milestone to the company's path to going public. those are the drivers, rather than a financial instrument that we believe the company can support. >> does this reflect a changing atmosphere around tech ipos in general? you could argue that what we saw with snap and now with spotify, is there a sense that tech
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companies are trying to take more control to themselves away from wall street? what does that mean for wall street or investors? >> it is no surprise that as innovative as spotify is, they are taking an innovative approach as they contemplate a potential direct listing. the ipo is historically roadshow is led by the investment banking community. be underpriced. in snapchat, the stocks went up 40% the day after it was listed. we let the market determine the price of the stock. it may come at the expense of some investment banking fees, but it is better for shareholders and the company. we believe it is a viable route in general.ies if spotify can successfully
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execute a transaction like this, they can generate investor have liquidity in their stock, this could be a template for companies in the future to do a direct listing versus than going through the traditional ipo route. china's farmers looking to the sky. replacing the annual later with automated farming. -- replacing manual labor with automated farming. this is bloomberg. ♪
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caroline: on the latest tech funding board, real matters is gearing up to be canada's first tech ipo in two years. they issued regulatory filings on tuesday. real matters is looking to raise
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$94 million for evaluation of $750 million. the last canadian company to go public. shares after tripled since then. artiste is planning an ipo. looking to exploit potential stock market gains to fuel expansion. a preliminary regulatory finding did not reveal how much stock isellin -- is selling. -- ebay is investing half $1 billion in flipkart in a targeted move against amazon after jeff bezos vowed to spend $5 billion there. ebay is handing over its local business to flipkart in exchange for a stake in the company and
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eating able to offer flipkart's products on ebay. it was a down round. that valued the company at $10 15 billionwn on dollars in 2015. what does it mean for global e-commerce competition? >> internet market is a little overheated. you are seeing consolidation. you are seeing companies rush and. it is an opportune time to get an on the e-commerce leader consolidate.ey venture capital will not be pouring into other startups competing in the space. >> we spent all of last week
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talking about opportunities for investment in india. it seems that apple is going in. many tech giants understanding that india is hot while china cools down. is it all about indian e-commerce? >> india is the number two largest population, behind china. 320 milliontates at people, to give you the size of the opportunity the countries are chasing. investors are realizing that amazon is positioning to take the marketplace. consolidation is happening from the remaining companies defend off amazon. ebay handing over assets in india with the infusion of $1 billion in cash from microsoft, tencent, and ebay, they are competing against amazon. they are consolidating around flipkart to have a viable competitor to amazon. a steppingld be
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stone in the saga that is the consolidation involving flipkart . , another e-commerce player in india, could be teeming with flipkart in the next couple of weeks? lot of thea speculation. sources are even saying that deal is in the works. ebay has wound down its snapped deal ownership, but still has 5% . you are seeing a global coalition building around flip rt to fight amazon in this critical market. mentionedguest population. it is also internet access. internet access in india is growing quickly, along with wealth. the if you just limit it to connected people, it is still larger than the u.s.
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>> a global coalition. i like that phrase. the global coalition's farming, do you think it is enough to that is the question. we want to see softbank's involvement and snap deal and flipkart consolidating 2 of the players. the thing to remember about the market place in india is that it is relatively mason. when you move in tier two and tier three with a growth will be, there is going to be a need for investment. amazon can fund investment from its own cash flows. flipkart will have to rely on money from external sources. this is an industry that is burning a lot of cash. negative growth margins, billions of dollars being
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invested every year. amazon is well-positioned given its capital base to succeed. they lost in china to alibaba. they want to prove they can win in foreign markets, like india. alibaba,nner, being taking another leap out of its playbook. it is think the money -- interesting he is willing to sacrifice some of the valuation in snap deal which could merge with flipkart. there are rumors we could see and 85 cut in valuation in snap deal if we see a consolidation of the two. willing to take a hit. >> correct. that will be an interesting transaction to watch. they might be willing to take that loss on snapdeal if they can get a larger stake in flipkart.
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he likes to have the more meaningful category of 25% to 30%. we saw them do that with alibaba. we will see if they can do that again in india. the future of farming on aaded to the sky southern china island. spring pesticides over crops with drones. moving from manual labor to automated farming. we have the story from china. it is 44 acres. he is trying new technology. operators toe spray pesticides over his crops. the team of 6 arrived at dawn
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and got to work. >> agricultural drones like these are taking off in china. the government encouraged farmers to move from manual labor to automated farming. right now drones are used on 2% of farms, but could be worth 4 billion u.s. dollars a year. a company introduced 2 drones .or pesticide spraying they use a microwave for a two maintain distance from crops. of pesticidestion
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by following a planned route. this system is doing a lot of work automatically. you can ensure more precise spraying. the drone is a small payload. the operators have to refill the canister every five minutes and change the battery every 10 minutes. they can only be used on smaller farms like this. faster, but cheaper and than hiring laborers. this is almost seven dollars cheaper per acre. caroline: still ahead, tesla tops general motors. the electric up stop eclipsed
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the american institution in market caps. if you like bloomberg news, check us out on the radio. you can listen on the radio app and in the u.s. on sirius xm. this is bloomberg. ♪
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isl worth seveny $.5 billion after af sixt hundred billion dollar round of financing. that is up from a $5 billion evaluation. who is investing in lyft. a handful of asset management funds and a canadian fund. a set of investors that frequently back public companies provide funding ahead of an ipo. quiete company has kept about its exit plans, investors speculated that lyft would be smart to go public before its larger competitor, uber.
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tesla surpassed general motors to become america's most valuable auto company. in my bloomberg you can see when tesla pushed past the competition. the white line is the creeping ascent of tesla, worth $49 billion, just tipping past gm in the yellow, and well past forward in the turquoise -- ford in the turquoise. depth thats more adds to their value. this is more of a symbolic moment where tesla crossed the line of being more valuable than gm and ford. as ators are seeing tesla dominator of electric cars, maybe a leader in automated cars.
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it has potential. that is what people are playing for. autoal motors and ford, sales are trending down. not by a lot. both will make a lot of money. investors see this as the best is behind us, maybe we will put our money somewhere else. tesla, there is hope they could grow and give a bump in the stock. ,> it is optimism freedom, defiance. what the car companies are struggling to replicate that symbolize where tesla is. the disparity in the cars they are pumping out? million cars.l 10 tesla got a bump when they sold 25,000 in a month. less thanr of 10, way general motors. it is not about car sales with
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tesla. it is about the model 3 coming out, the lower-priced car, and being a success. a vehicle that will sell that will prove tesla is a phenomenon. it ishas the chevy volt, showing a similar range to the model 3 tesla. it is showing a similar price point. though that is on the road, the optimism is higher at about the model 3 which has yet to come off of the production line. >> tesla has a couple of things going for it. the big car companies saw electric cars and hybrid electric cars as something they made to meet regulations. tesla made electric cars cool. the model s is sleek and extremely fast. still has the
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falcon-wing doors. you take it down scale with , itthing like a model 3 still has a design that makes it look like it is in the model s, but is accessible to people who aspire to drive a tesla or have a piece of the elon musk allure. has become very powerful because of the initial vehicles. people that can afford a $40,000 car can get a piece of it. there is a lot of enthusiasm. chevy, with a hatchback that looks like a compact minivan, not so much. >> number six in the world looking at auto companies. it could get to the number five place if honda doesn't look out. pass honda soon.
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getting to toyota is another matter. the real story is that tesla's stock has a ton of momentum. we are not even close to the model 3 launch. that is later in the year. a test forits, it is how much demand there really is. how quickly they can manufacture them, and can they manufacture them without defects and problems early on. if those become a problem, the stock could take a hit. it has always been a volatile issue. we are in for an interesting ride for the rest of the year. caroline: that does it for this edition of "best of bloomberg technology." big tech earnings rolling out here tonight in on monday when we kick things off with netflix.
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all episodes of "bloomberg " are like streaming on twitter. that is all for now. this is bloomberg. ♪
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>> coming up on "bloomberg best," the stories that shaped the week in business around the world. gets into the hot water. airlines hurting after a shocking video. >> the main street side is not as strong. >> janet yellen says the fed is ready to change its focus. james bullard's focus is on the balance sheet. christine lagarde goes over what keeps her up at night.

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