he was notrump: doing a good job, very similar. >> did it affect your meeting with the russians today? me?ident trump: excuse "rk: earlier, trump tweeted comey will be replaced by someone doing a far better job, bringing back the procedure of lost to thend " confidence of almost everyone in washington, republican and democrat alike. when things calm down, they will be thanking me!" russian president vladimir putin said his country had nothing to do with comey's firing. he was about to take the ice for a hockey game. wasaid president trump acting in accordance with the u.s. constitution when he fired director comey. the president met with russian foreign minister sergey lavrov in the white house today.

they talked about anything public in syria and discussed iran and the violence in ukraine. the president said the firing of director comey did not have any effect on the meeting. of. may see one last wave job seekers from poland before brexit. a recruiting company says that the u.k. beat out germany and in more than calls survey--more surveyed the poles said they want to get the u.k. before brexit and what may be tighter rules on immigration. global news 24 hours a day powered by more than 2600 journalists and analysts in over 120 countries. crumpton. this is bloomberg. ♪ julia: live from bloomberg world

headquarters in new york, i am julia chatterley. scarlet: i'm scarlet fu. joe: and i'm joe weisenthal. we are 30 minutes from the close of trading in the u.s. julia: u.s. stocks near all-time highs. joe: the question is, what'd you miss? scarlet: an abrupt termination --president trump fires fbi director james comey in a move that raises questions about interference by sitting presidents into political investigations. markets barely budge on the political events. we will hear from sam zell about why wall street just doesn't care. snap reports strong sales on its mobile app platform. can it maintain its young user engagement to compete with facebook? joe: now let's look at where the major averages stand as we head to the close. abigail doolittle is standing by. abigail: once again we are looking at a quiet action for the major averages heading into the close. dow down .25%.

the s&p 500 and nasdaq up slightly. than two00 is less points away from a new record close. the nasdaq is already there. -- in fact for the s&p 500, if it closes at its current territory, it will be the 10th out of 11 trading sessions less than .2% up or down. .oeing down 2.625% it to collect lower in midafternoon after the company -- it took a like lower in midafternoon after the company said it suspended the something seven max. -- 737 max. shows of snap are trading lower on the report. investors are looking for $159 million of revenue. a bloomberg intelligence analyst is confident they will hit that but it comes down to the daily active users growth, and looking

for 170 million daily active users that represent 70% quarter over quarter growth. we will see if that happens. whole foods down about 1%. the shares were high today after it was set for the company is looking to shake up the board. a bloomberg intelligence analyst expects it to be another difficult quarter. interesting to see whether the potential for jacob highlights -- potential board shakeup highlights that. i know you love this chart. vix near record lows. in blue, the economic uncertainty index. the last two years they've been highly correlated. there was a big emergence with real-world uncertainty much greater than the vix. they would doaid whatever it takes to save the euro. it will be interesting to see whether it bleeds into the vix

and stock market trading action as well. joe: thanks, abigail. what'd you miss? let's go right to the latest on the shakeup in washington and who is on the list for a replacement for the fbi director. washington correspondent kevin cirilli joins us from the white house. what is the latest on the fast-moving story? kevin: busy, busy day in washington, d.c., and the news firing fbit trump director james comey reverberating inside the beltway . listen to what lawmakers on capitol hill told me earlier this morning. >> absolutely laughable. fails to pass any smell test. >> both what is adamant times have called for the dismissal of mr. comey. -- not not what a watergate. the clinton investigation by any measure was politicized and it is time to take a new direction with the fbi and the president has made a wise

decision. >> the timing raises questions, because of the interference by the russians in our election. >> the idea that you take a person who has every other responsibility, taking him away, and that all falls apart from that is not how organizations work. >> i don't believe the system has been compromise, but at different times, for different reasons, people ask for a new fbi director. now they are going to get one. >> there needs to be a special independent prosecutor who can be insulated from politics, conducted the investigation, and follow the evidence wherever it leads. kevin: i am told that the senate intelligence committee next week will hear directly from mr. comey, who is scheduled to meet with them behind closed doors. just under an hour ago, sarah huckabee sanders, the white house spokesperson, saying that "surests are having the

form of hypocrisy" and they would have been "dancing in the clinton'sf hillary decision. movementwhat kind of or action is there in terms of finding a replacement for james comey? kevin: i'm told that they are looking at appointing someone who is a career bureaucrat with -- inside the fbi. president trump is scheduled to meet with acting fbi director andrew mccabe in a closed for meeting and go over -- closed-door meeting and go over to the jay gruden for building to meet with you -- j edgar hoover building to meet with fbi officials at a later date. clearly the white house looking to scramble to get together a messaging strategy. the big takeaway is whether or not this white house will lose any political capital that it perceptionally felt it had gained from passing health care

reform in the house of representatives last week. it remains to be seen. kevin's really, thank you so much. that's get more insight -- let's get more insight on the probe. bloomberg view columnist jonathan bernstein is with us san antonio, texas to firing an fbi director is well within the president's power, but how donald trump executed this has prompted criticism. as you think back to what happens, does this reflect, in your view, incompetence or conspiracy? jonathan: that is a good question. probably the answer is both. conspiracy is a harsh word. -- or conspiracy is a complicated work, let's say. the question is whether it is a piece of power or obstruction of justice. we don't know the answer right now. difficultf the

things to understand is why it took the administration so long to do this, particularly in light of the fact that much of the criticism of comey were things that happened a long time ago, in relation to clinton's e-mail practices. what do you make of the gap between when the president took office and the decision to remove comey? jonathan: what i think everybody should take from it is that the stated excuses by the administration are bogus. we don't know in fact white he was five, but it seems ordinarily unlikely that it has to do with the clinton investigation last summer. jonathan, senate minority leader chuck schumer said we need a special prosecutor to look at us now. the problem is, in order to get that involved, republican senators have to agree to it. do you think that will be enough support in the senate from the republicans in order to appoint someone to do this? jonathan: well, that is the big question right now. or more republican

senator's desire they want to hold up everything, working with 48 democrats, they could get what they want. they could put heavy pressure on the department of justice and on trump himself to appoint a special prosecutor. they also could force mitch , if enough republican senator's decide to do it, do have the senate select committee. both are needed to investigate this whole affair. julia: can the administration said the issue aside or do they believe it will be a distraction for them if they try to bush had with the other things they need to do here, via tax reform, health care reform in the senate? they have many things they want to do. is this going to be a distraction? jonathan: it is not going away. it is very, very difficult to imagine this whole thing going away, unless at some point well into the future it has been fully investigated and it turns out that there is less than

people worry about. whether they can also move legislation forward, that is a more complicated question, and it is very possible that republican senators and those in the house can still move a legislative agenda forward, even despite this. or going on. it's even despite this whole scandal going on. it is easy to say they cannot do both, but they can do 2 things at the same time. scarlet: a bit of a challenge for washington but we can be optimistic. julia mention what chuck schumer said, but aside from making noise and going to the media, what options are run democrats' disposal? jonathan: very few. democratic senators can tie up the senate. there are procedural things that individual senators can do to slow down the senate. if the minority party abuses it, though, the majority party can shut it down. republicans are not going to be

eager to change the rules or procedures of the senate, but if democrats do what republicans would consider to be of use, they would do so. the truth is, democrats can make a lot of noise. they can highlight things. the one thing that they can do is provide a path, soft landing for any republicans who want to join with them. other than that, there's is not much. it is on the republicans right now. joe: jonathan bernstein, bloomberg view columnist, thank you very much. soming up, president trump' firing of james comey may raise eyebrows, but it is not clear if anyone in the markets care. for more on the markets and what is going on in a d.c., stay tuned next. this is bloomberg. ♪

joe: what'd you miss?

firing of fbip's director james comey adds to political uncertainty in washington, along with health care, tax reform, infrastructure, north korea. but there is little evidence that the market is concerned with any of it. why not?for more on how political risks interact with the market, george, welcome back to the show. it has been too long. why doesn't the market care about any of this? we get extraordinary headlines, everyone would have to admit, since election, and people think it is going to matter. it never seems to matter. answer that question is to ask in response, why should the market care? andets like stability strong institutions, but those are the things you could frame the comey firing through 10 to matter in the long run as opposed to the short run. the markets don't have any doubt

that the u.s. institutions remain strong and we have an incredible democratic system and so on. we are nowhere near to the point where something like the comey firing would be relevant in that sense. joe: still, markets, in theory, discomfiture policy and economic changes, and does not seem like any development on that front seems to matter to health are going one way or another, outside of a narrow set of stocks. infrastructure and taxes, which could have significant macro effects down the road, doesn't seem to matter much. it feels a bit discordant. noise: there is a lot of in markets, and how you frame what happens now depends on what markets did after the election in response to policy in washington. what happened in november and anember and january was effort to price in a big tax cut, huge infrastructure package, then yeah, it might make sense. but if it is oil bottoming and

things are looking ok maybe the expedition is -- explanation is that policy from doesn't make much sense. scarlet: but supporting the gains in supporting the index from falling, when you have negative political headlines? george: our viewers is that tax or from is not what is driving things. sentiment around the election -- president trump unquestionably helped the market at various points between november and march -- scarlet: but that is linked to the policies he would take it george: i know we like to think of a vision markets but the way we think about it is people who expected benefits from cash flows got more optimistic about the world in general. you saw this and a lot of surveys --high income folks who voted for trump. the white working-class thing gets a lot of attention, but it is the high income folks who wanted lower taxes.

there were really excited, and that helped stocks. just because the market may see that we get slightly lower on detection from here and there, that will not materially -- lower odds of tax reform here and there, that will not materially change their behavior. julia: what do you think of markets are getting it wrong, and i don't just mean on the politics? given what else is going on in the world, fundamentals, the macro. george: i don't think low volatility and implied volatility have been trumped up -- julia: we love that. george: and that is due to market inefficiency. i think we will talk about that a little bit. to me, 2 think suspect me as innovation is how energy is being treated. energy equities, but more importantly, high yield bonds, basically where they were in 2014 come in a world where the optimism of 2014 is much less

justified. the other thing that is worth looking at is how europe is reacting to the french elections. they continue to see positive upside around the corner for europe, unlike the united states and other parts of the world. the flows we have seen into europe have been much smaller than we expect, given the events we have seen. julia: why? we talk about distribution from u.s. to europe. 2016,was politics, and china, and this year it was le pen. is there a cautiousness about europe that people have to get over? george: the steps we are seeing, but from macron and german politicians, if you look at scholz, who is going to compete leadangela merkel to germany in the september elections, they are talking about deep or integration throughout the euro zone. the surprise -- americans and

brits will look at italy, and italy is a problem, but they will not look at what will happen from fiscal integration. we just see that from a different lens. not that europe is guaranteed to r, but we look at where is the surprise going to come from, where is the marginal move going to come from. joe: you mentioned the vix and do have a chart here. it shows the vix, the measure of implied volatility, versus realize volatility. 0, and it what it shows is that easy i ask is a function of what we have in the markets. that this chart is a tautology and doesn't tell you much. but the vix as a forward-looking indicator, it is important to keep this in mind. markets don't trade the vix is

something that is going to predict the future. more often than not it is looking backwards and at what already happen. here is how the stock move and how it is implied to move. these two things have to be related. if the market is low for years and years and years, of course vix is going to be lower. that is all this is. about whylk volatility is low or why we think it might change, we think it is important to keep in mind that you have to come up with the nation for white realized volatility --, with the next donation for why realized volatility is low. fretting aboutn the ultra low vix, people should acknowledge that there is not enough volatility. george: and it is counterintuitive but that is how it is. scarlet: thank you so much. coming up, after the closing bell, snap is set to give its

first earnings report as a publicly traded company. this is bloomberg. ♪

scarlet: i am scarlet fu. what'd you miss? snap we releasing its first public earnings as a publicly traded company after the close. the company went public in march and is trading above its offering price. valued at almost $27 billion. let's look at it in "numbers don't lie." when you look at getting active users during the quarter, snap has 158 million. the number has doubled since the fourth quarter of 2014. when you look at growth, there has been a did in daily -- dip in daily users in the first half of the year. it could be attributable to instagram. the app launched a similar tool

to snapchat last august. 200 daily users -- 200 million daily users, already topping snapchat. snap's argument to advertisers is that its users are unique and the base of young users is not accessible to instagram had that might be true. 35% of snapchat daily users are not reachable on facebook on an average day. 46% cannot be found on instagram. of snapchat fans are not watching youtube the same day. snap revenue is dominated by north america compared to the rest of the world -- north america in white hair. snap is estimated to report revenue -- adjusted loss per share of $.19. we will be following the results when they are released after the closing bell. julia: yes, we will. staying with tech, i will give

you a quickly at a chart, apple's market cap touching $800 billion. this is a chart of the market value of the five biggest stocks. the usual suspects -- all about, amazon, facebook -- out for that, amazon, facebook, microsoft. if there was a stock market for just these five companies, it would have more value than all but five equity markets worldwide. the u.s., china, japan, hong kong, and the u.k. joe: that is a mind blowing stand. i knew that through chilean number was big, but putting it in perspective, extraordinary number. julia: there was europe? scarlet: i thought apple on its own would be bigger than the u.s. stock exchange. julia: and of course, the rise this year -- scarlet: nasdaq trading at near

record highs. julia: would you invest in it? let us know. when you invest in that market? scarlet: market close next. this is bloomberg. ♪

♪ >> "what'd you miss?"

u.s. stocks barely moving after donald trump fires james comey. another day, another record for the nasdaq and s&p. joe: if you are tuning in life on twitter, we want to welcome you to our coverage. bombshell,political but no reaction when it comes to the markets. moveses, small considering how significant the news was for washington. dow down 35, the nasdaq and s&p 500 at records. joe: laughingly small. scarlet: import prices rose more than expected. when you look at the second or have eight out of

11 groups higher, but a couple of sectors barely moved. consumer sectors a sickly unchanged. industrial the bigger likert come off .4%. ,n terms of individual movers you can see the pop their after the washington journal reported it is exploring a sale. we will keep our eye on that one. ,> some breaking news from snap their first earnings results since the ipo. adjusted loss of $188 million. was 170 $6 million, so a wider adjusted ebitda loss than expected. to know about user

growth. scarlet: revenue numbers coming million dollars, lighter than what analysts had been looking for. million.ive users, 166 analysts were looking for 168 million. it does represent an increase from 158 million. what they are focusing in on. they want to see active user growth to justify these stock price. the stock plunging, off 17%. it has to be that daily active users number. >> absolutely. scarlet: let's get more analysis now. everyone is looking at those daily active users numbers. we are seeing growth, just not

as robust. >> that's right. year over year for the quarter, fourth quarter 48% increase. yearis only 36% year over from the first quarter last year. when this company listed two months ago, user growth was a concern. what management wants the street to focus on. stories,of the big facebook keeps topping every snapchat product and doing well with those copies. is that potentially one of the headwinds? is.t it is instagram in particular, where they have copied stories and brought advertiser dollars in, which they hope drives revenue. late 2016, that

is when instagram introduced stories and we saw a falloff in growth for snap. it did have some issues with its android snapchat app, but we will see if those are alleviated this quarter. scarlet: i'm looking at the $2 million ofs, stock-based compensation expense. this quarter marks the quarter where they decide to go with gap earnings rather than adjusted earnings. why does this matter for a small company to look at stock compensation. >> a lot of small startup tech companies are cash light on compensation and equity rich. that is held the wealth is created. this first quarter out of the box is a tremendous

disappointment for snap investors. you take the risk of buying an ipo, you expect one or two or three quarters of them beating expectation. they missed on everything. there is not much to like. are moreram stories popular on google trends, but what can they do? popular looking less than their competitors who are replicating everything they do. back and working and they say to convince they are? search tool added a within snap where it looks more like instagram. try tothink they will convince wall street is these user growth numbers are important, but you should be looking at revenue per user. average revenue per

180%,$.90, an increase of but a drop of 14% from the fourth quarter when it was $1.05. >> i think the sequential move is important. this company has only been making meaningful revenue or a year and a half, so that sequential move will be important in terms of judging the company's continued growth. joe: you mentioned this is the company's first-quarter off this ipo. roadshow, there was frustration about the lack of detail, pretty ok, and now investors get hit with the news of slowing growth, so how much does this damage the credibility of the company after that disappointing roadshow? >> management will take a

credibility hit. where thecompany ,nsiders control all the votes so a super control aspect where public shareholders are getting less representation than they would in an average u.s. company. investors are willing to take that risk for the expectation of great execution and great stock price performance. they are not getting it here. they missed on every single metrics the street has out there. the question is, facebook, instagram with the deeper pockets and greater resources, so do they have new products in the pipeline to fight back. than $3raised more billion in the ipo, so they have money. you mentioned street expectations.

are we being too tough on them? >> a lot of these tech a companies that want to get tied at seven, 8, 9 times revenue, the expectations are very high and a lot of these tech stocks ,re priced to near perfection and investors do have companies that deliver every quarter like amazon, google, facebook, so if a small startup tech company evaluations, the expectations are they will not miss numbers. >> down 19%, 18% now. what do we know about the investor base? who are the investors in this company? >> they tried for long-term investors. the majority of the book were longer term investors. holden to a lockup of a year, so volatility might

be from smaller players not period.n to the lockup ipo's, thecklog of unicorns, this probably does not help. >> it doesn't. it was seen as investors willing to take a bet early on in a company in the public market. moneye that doesn't make on the bottom line, this could cause a pause. the ipo went well. we have seen enterprise tech companies come out, but for snap specifically, they don't give a lot of forward-looking guidance, so when you are waiting to hear what the management team has to say on the call, that will be important as you think about the health of this business. scarlet: snap went public at $17

a share. trading above that, but not -- >> a bit deflated today. i want to bring in fox's well, 21st century fox. the cable network programming billion, missing the consensus estimate. , $7.6 billion, adjusted earnings per share, $.54, topping the estimate of $.48. you look at these numbers, the overall climate of advertising hangs over 21st century locks. >> it does. this continues similar numbers out of other media companies, so investors hope to sing on the revenue side of the equation because there are longer-term

secular concerns about cord cutting and what that means about surprise her growth. do i have to worry about advertising, subscriber fee revenue? a revenue miss continues the narrative we have heard this quarter, so the media stocks are significantly underperforming as our concerns about cord cutting resurface, so -- so i reset here. bring you up to speed, the real disappointment, 160y active users up 36% to 6 million, but not what analysts were hoping, q1 revenue $149.65 million, consensus was $157 million also a miss on the revenue numbers i'm also announcing a loss per share, $2.31, the first quarter,

clearly disappointing. in the share that price, not hearing what they were hoping for. let me bring you up to speed on what we are seeing from u.s. steel, announcing their ceo is set to retire. this follows disappointing results at the back end of april, the ceo criticized on the earnings call regarding the strategy of the company, shortcomings. we were talking about this a couple of days ago, the fact u.s. steel did not monopolize in the quarter. it seems having been criticized about the strategy of the company, the ceo is stepping down. scarlet: u.s. steel trading below $21 a share. ago come earlier this year, it was trading much

37 point 33 at the start of the year, so a precipitous drop. have a replacement name for u.s. steel, replacing the current ceo. breaking news on whole foods out with earnings, the company of $.37, adjusted eps in line with estimates. the stock rising a little bit. store sales down 2.8%, that are than the three point 1% estimated, and sales of 3.74 billion dollars slightly ahead of expectations. bloomberg news reported that the company may replace seven out of 12 board members amid an activist fight. ans is not part of

agreement with the fund. nevertheless, an attempt to push up that fight. scarlet: headlines indicate they have named five independent directors, so some of that has started to happen. >> the response boosting the quarterly dividend to $.18 a $.14, soe estimate was trying to respond to some that criticism. authorized a share buyback program. this is the response to activist. stay with us. plenty more to come. this is bloomberg. ♪

>> breaking. the u.s. feel ceo breaking down affected june 30.

he was embattled and criticize after the last earnings report for taking too long to shape the business. he said the adjustment strategy would take 3-4 years. investors saying it was not soon enough. the coo is named as the replacement today. longhi stepping down. scarlet: the lowest since it went public. anyway you look at it, revenue, user growth, missing analyst estimates for snap. analysis, we bring in and sarah frier.

, after looking at these numbers, which stands out most to you, which metric is most disappointing? >> the user growth is the main thing people are looking at because snap this not have a .table business the future is in the growth. the future is and how many people can add to this app that they can make money off of? the growth rate is not what investors were hoping for from this young, hot company. back at when we look facebook and twitter come of those companies when they went public also came out with numbers that did not excite investors, but they recovered. twitter not as much as facebook. for twitter, it was a

foreshadowing of a negative for that business. for facebook, it was a question of can they move to mobile, and they did that. down 10%, facebook down 12% on the first earnings, but snap, the shares don't have voting rights. it is something we talked about in the equity capital markets world. will this lead to more volatility, because there is no lever for change from the shareholders. if the only way to fix management is to get out and communicate with your money to. -- your money there. joe: now down 21.5%. the mostrobably not be pleasant conference call for the new management team. what do you think the big questions are that analysts will hammer them on. >> product.

what products do you have in the pipeline to drug user growth and revenue. your advertising products to attract advertisers? th the challenge it is all ad dollars are going to google and facebook, so you have to establish yourself as a credible platform for advertisers. snap has not done that today. in, it is about users. that is the issue that always , ited twitter -- in the end is all about users. that is the issue that always dogged twitter. >> snap, to their credit, we they said we are not a growth story like facebook. we ,re focusing on a small demo but it is an attractive

demographic for advertisers, so we will make money not on fine, but quality. that is a tough argument to make when sheryl sandberg is telling you that if you don't have one billion users, you are not relevant to digital advertisers. >> how do go to her advertisers and say we don't have that many people, but the quality of our engagement is that much higher to justified you giving us your ad dollars. how do they do that? you getting cornered. scarlet: it is about keeping them on the platform. product.about the it is about snap coming out month after month with new ideas for advertisers, where they can say we were the first to try this, try that, big-name brands, and then bring that down to the rest of the brands that one to buy things more automatically,

that increases pressure on the company to innovate constantly, as facebook is catching up and copying everything they do. thehe trend data is going wrong way, not helping them here. >> it is. my sneaking suspicion is investors don't get a lot. this is a secretive company. the company did not disclose any basic product roadmap. onus will be on the ceo, their cfo, their chief strategy officer. what will they tell analysts right now on this call? that will be the big question on how you keep these users on the product. if we don't get a lot of clarity, you can expect the stock dropped to continue. you talk about product being paramount, is it

which a product is if instagram can do it that are than you? >> instagram and facebook have pockets and more advertising infrastructure, so what snap brings to the market is their audience. they have a smaller audience, but a very attractive audience that instagram can't compare is canut the challenge you sell that younger demo as opposed to the industry, which is who has the biggest audience out there? we are not concerned about demographics. i don't have to slice it that fine, so instagram, whatsapp, if they give me one billion users, that is good enough for me. joe:, alex, paul, and sarah

frier, thanks to all of you, fascinating, huge, momentous earnings from snapchat, plummeting over 22% after hours, breaking $18 a share. at $17. the headline that stands out, 166 million active users versus 168 million expected. million versus $158.6 million. this is bloomberg. ♪

>> breaking news, u.s. steel ceo mario longhi stepping down

effective june 30, replaced by the coo. the stock was trading at a six month low, now up 1.5%. scarlet: whole foods as well. joe: that stock kicking a little $.37 onin line with earnings, and slightly beating on same-store sales. also announcing a board change amid its activist fight. scarlet: long awaited board change. coming under pressure from nus and other investors. all the stuff coming up next. we will dig through the numbers and give you the details on this board change. five independent directors added to the board. this is bloomberg. ♪

crumpton.rk first word news, buys president pence defending president trump decision to fire james comey. >> he took the action necessary through move director comey, and already this morning, the precedent is in the process of evaluating individuals who will fill that spot, lead the fbi, and restore confidence to the american people. this was the right decision at the right time. >> the vice president said the firing was not related to the investigation into the trump campaigns possible contacts with russia. the acting fbi director will be on the hot seat in just his

second day on the job. he will appear at a senate intelligence committee tomorrow in place of his former boss. that hearing is about current and projected security threats facing the nation. new questions are being raised about work done by president trump former national security adviser michael flynn. general flynn is at odds with a turkish former client over to by flynn'sade firm. he said the payments were consulting fees for unspecified work. the turkish businessman involved tells -- the veracity of his disclosures have been under scrutiny. in the fight to protect summer of the games, emmanuel macron's will be a boost to its bid.

the international olympic committee members are likely to meet with emmanuel macron during their three day visit the began saturday. the ioc is now in los angeles. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am mark crumpton. let's get a recap of today's market action. the s&p 500 and nasdaq rising to new records. the s&p closing below 2400. big roundose to that number. we will get there eventually. scarlet: all the focus now on after-hours earnings. we have a lot of those after-hours earnings. we have had a busy evening so far with snapchat. snap is plunging 22%. what do you make of this report basically missing on every

number? >> this is a company value to perfection. not everything went perfectly. the user growth number was lighter than expectations. this company shares will be inherently volatile, down 20% after hours. joe: getting close to that $17 price. >> that will be painful if it trades to that level. >> are you saying we are being too tough on them? we have come up with a host of reasons why they are facing , buttitive challenges difficult to turn around. how do they do that? >> is not a disaster. it is one quarter. they have been selling ads, generating revenue for two years, so it does not have a long track record. itger-term question is will

prove lasting with users and advertisers. a small this is company. daily active users come up hundred 66 million. twitter has more than 300 million users. facebook nation is more than one billion, so this is a small company. should they have gone public? >> that is a fair question. snapchat does not want to be facebook, the one billion user and googley facebook are. they feel like they can do better if they concentrate on a small number of users in the rich developed countries like the united states where advertising markets are very large, and that strategy is untested for an internet company, and the long-term question is there. be tested,ng to especially when someone keeps stealing your ideas. you're going to focus on one product, but unfortunate

everything you do gets copied by instagram, and they have more users. >> that is the issue. you look at user number starting from last summer when instagram rolled out stories, and the user growth started to slow down. they added 8 million users and the first quarter compared with the fourth quarter, and that is markedt slowdown -- slowdown. joe: you mentioned snapchat does not want to be in the same category as facebook. it described itself as a camera company, but if it is in the , partategory as facebook of the fear is that these are network effects, winner take all psall these big mega ca don't have a competitive number two bank layer. -- player.

is that it ultimately can't escape the facebook vortex? >> that is that the question. there are two companies, google and facebook. they eat all the advertising revenue available on the internet. they are one of percent of the growth in advertising revenue. is there room for a number three behind those two? joe: thank you very much. with us now is whole foods reporting second-quarter in line with estimates come and it looks like the fight back against its investor is now an action. so what do you make of where it stands on the fight and these earnings? >> the stock is up on the news. five new board members, new chair. they are accelerating programs we knew about, more cost-cutting , changing the way they purchase

products to centralize operations, so positive news there. i'm not convinced that this means janus excepts this and goes away, but it seems like investors are happy with what they are hearing from whole foods. >> dividend raise, share buyback, they are trying at the very least. the wagons here and are coming out with news to say we are on top of this and can turn it around, the ceo saying i am in control and i can do this. line. numbers also in what you think of the price action here? positive set of results, it could be a bad thing for investors. numbers, not a great report. they matched on eps, same-store sales down. they are saying we can get same-store sales up by 2018.

they are not out of the woods, but the stock is up this afternoon. authorizedole foods a new stock buyback program, increased their dividend to $.18 from $.14, not necessarily widely anticipated. are these moves enough to sway people like janus partners? ofthey said no to the offer the two-year standstill, so they want to keep their options on the table, so we will see how janus digests this. they are clearly throwing a lot of the wall. scarlet: are those specific requesting? was >> possibly a sale, the operations, so they have not been incredibly specific about what they want. talk about the big picture.

down 2.8% for same-store sales, not objectively good, but did beat expectations. what is the fundamental challenge that's causing people to shop at whole foods, competition, organics? everyone is into organics. you would think they would be in the sweet spot. you can getem is organic stuff everywhere. you can get it for kroger cheaper, at walmart. everyone noticed what they did with organic and plowed into that market, so a ton of competition, deflation has hit them hard, so that number needs to come up, and that's something people will watch going forward. location inconvenience. i do find them incredibly expensive. scarlet: $60 for three things. >> shocking. we have to thank you so much. thank you for speaking to us on

that. scarlet: coming up, buybacks can be a good way for a company to get around issuing new stock, but also an inefficient use of cash. which companies have made wise buybacks? or is it a matter of timing? this is bloomberg. ♪

scarlet: "what'd you miss?" a onefoods just announced point two $5 billion stock buyback program. our stock repurchases and effective use of corporate

money? -- -- tend to have a drop in their pe multiple, so they are looking at earnings per share, so buyback is not a good idea. we calculate roi based on what they paid for the stock. it is just like you think about a capital investment or acquisition. have you found? what kinds of companies are better? >> companies that do more buybacks tend to do worse. the companies that are investing in their future and the growing of their business, and they usually do it evenly over time, have at that are buyback r.o.i. because they're using

buybacks as a signal to make themselves look better? >> the signal is interesting. they are using investors money. the two big problems are the companies buying back more stock are investing lesson growth, and growth drives long-term share price performance. they tend to time it terribly. they buy a ton when the market is high and nothing when it's low, and that affects buyback r.o.i. is buying back stocks, and they are at record highs. >> apple is an anomaly to a degree. on --re above average below average on buyback r.o.i., but well above the buyback r.o.i., but their timing is better than most.

they don't seem to be like many companies buying back most of the stock when the stock is peaking. you talk about surplus cash, apple is a prime example of that, more than $250 billion in cash. one-timedthat 10% tax, it would have a war chest of $230 billion. i know you will not talk about acquisitions it could make, but that is a huge war chest. shouldn't it use it for buybacks? >> as long as they have the prudence to time it right, it is a good idea for them. they have had decent buyback r.o.i. historically. the companies that are basically borrowing to buy back stock, those have a harder time producing a good roi. cash oncould be using the balance sheets to do it, but they are borrowing to buy back. >> that's ok. that is backed by cash. joe: here is the part that

always kills me and i have always wanted to talk about this. dividends buybacks or , none of this should ever matter in appear of fission market world, moving my money from one pocket to the other, so why do investors care, why did they get excited, why did they demand buybacks in the first place? >> there is an obsession with eps that goes beyond what is healthy for companies. over the last five years, the companies in the study, dividends plus buybacks totaled 91% of the total net income of those companies, so they only had 9% invest to invest. the net income of the s&p 500 peaked over two years ago, and although it has been rising, the last 12 months of net income is down double digits from where it was two years ago.

something has gone our ride there, the market seems to behind. as possible when we look like in a couple of years, we will look at these buybacks as having bad r.o.i.. opportunity to get decent return and decent investment is that much more scarce. say interest rates have gone up since the beginning of 2015, so this widening of the value gap is in the face of rising interest rates. your point about in a low interest of world that there are not as many good investments. companies still have return on capital well above interest rates. is much higher on incremental investments, so at the margin, they are setting their cut offs too high and leading them to plow money into dividends of buybacks. scarlet: if a company asks you for advice on buybacks, and you tell them all this, does it

trump than to do something differently with their cash? buybacks are not bad, but companies need a rule-based system. ofthey avoid this problem buying back a lot of stock when it is expensive and not a lot when it is cheap. >> thank you very much. we will leave it there. thank you for joining us. ,oe: let's take a look at snap which continues to plunge in after-hours trading. 25%,s at one point down just abovest 23.8%, that $17 per share they ipo'd at. the big number everyone is talking about is that daily active users, 100 66 main, shy investments 168 million. revenue one hunter $48.9 million, well below estimates. from new york, this is bloomberg. ♪

>> "what'd you miss?" the boston area is a global hub for life sciences companies. lead,p maintain boston's a life lab opened, joining a portfolio of innovations faces at the university, including the harvard innovation lab and harvard launch lab. it features lab space with specialized equipment at a discount to interbank life science startups founded by harvard faculty, alumni, and students. is a 15,000lab square foot incubator intended to support harvard found the life sciences and biotech startups.

startupshandful of commercializing material technology. >> we start with the same silk material used in textiles. we pull out one protein and are reengineering silks. michael schrader explains this ofch is made of hundreds vaccinated micro needles wrapped in a protein, making vaccines easier to administer and eliminates the need for refrigeration. compact,small, something i can self administer. stable,h is also shelf so we can ship it around the world without refrigeration. remain effective come all vaccines need to be kept cold from manufacturing to inpatient

patient, making easier to vaccinate the developing world. >> sales are in the $30 billion range from vaccine industry. the opportunity to go after that and expand access to products is a compelling goal for us. 2012, it has raised $13.5 million in funding, including grants from the bill and will indicates foundation to help in the eradication of polio and measles. >> they are funding us to develop a polio patch that is heat stable, compact come easy to administer, and combines three separate doses into two patches to get them appropriate vaccination levels. with is also partnering pharma companies on infection mimicry and new vaccines for

herpes and prostate cancer, and collaborating with m.i.t. on an hiv vaccine. as for life after the harvard life lab -- >> we are happy to call massachusetts home. it is unmatched in terms of partners, mentors, a unique ecosystem that we have. >> all this week, bloomberg technology is live from the tech , caroline hyde taking a look at regional innovation from biotech startups to venture capitalists and government officials. tune in live on bloomberg television and radio. thelet: it is time for bloomberg business flash to look at some the biggest business stories in the news right now. pershing square's new long position has gained 30% since the time of purchase. according to people familiar, the unnamed investment makes up 5% of the hedge funds capital.

is also evaluating to companies that could become "classic investments." boeing will temporarily suspend flights of its 737 jetliner as engine issues come to light. the engine supplier, joint venture between general electric and another company notified going of a manufacturing issue. the shares immediately fell on the news. fit --mbie and abercrombie & fitch to buy a struggling retailer, discussing a possible takeover. successful ande trendy, but have suffered years of declines. shares gained as much as 13% today. that is your bloomberg business flash update. joe: coming up, what you need to know for tomorrow's trading day. this is bloomberg. ♪

scarlet: "what'd you miss?" nasdaqocks, the s&p and

closing at record highs after political turmoil. joe: the political turmoil, no impact on markets. england the bank of making its announcement at 7:00 p.m. eastern time. joe: i will be looking at producer prices out at 8:30 a.m. tomorrow, another look across the u.s. inflation. reports, and calls nordstrom reports after the bell. scarlet: a week part of earnings season. that is all for "what'd you miss?" bloomberg technology continues with more coverage of snaps first quarter. joe: have a great evening. this is bloomberg. ♪

alisa: i'm alisa parenti, and you are watching "bloomberg technology." the white house says president trump had considered firing fbi director james comey since the

day he was elected president. the deputy press secretary said that the president had lost confidence in comey and acted on the advice of the deputy attorney general and others when he decided to fire him. russia's president says his country had nothing to do with the firing of fbi director. cbs news caught up with putin as he was about to take to the ice for a hockey game. he said president trump was acting in accordance with the constitution when he fired comey. a newbelieves it has weapon in its fight to win the summer olympic games for 2024. the city believes emmanuel macron's victory in the presidential election will be a boost to its bid. members are likely to meet with macklin during the -- with macron during their visit. turning to crowdsourcing to update decades-old software. nasa is offering rewards as high as