nearly $400 million deal would provide pentagon and domestic programs with huge spending increases. white house press secretary rob porter will design after a british tabloid reported he emotionally and physically abused his ex-wife. he called the allegations outrageous. john kelly defended porter, calling him a man of true integrity and honor. railroad executives are now f trainpositive trends o control not be in place by the end of the year. it was not be installed until 2020. the ntsb says it could have prevented sunday's and track collision in south carolina. another recent derailment in washington. in all, five people were killed newdozens injured in two

crashes. we have live pictures we would like to bring you from the house floor on capitol hill. new nancy pelosi is setting the record for the longest continuous house speech. pelosi topped the record speech of five hours, 15 minutes. we will stay on top of that and much more. this is bloomberg news. ♪ emily: i'm emily chang and this is bloomberg technology. tesla ticking to its script after reporting fourth-quarter earnings. it still sees the model reproduction of meeting weekly goals. our exclusive conversation with sheryl sandberg and why she says they m me too movement is not far enough. day two of the uber court battle. first, to our lead. tesla jumping around in

after-hours trading after reporting fourth-quarter results and revenue that beat analysts expectations. it burned through crasash at a slower clip. tesla reported negative free cash flow in the fourth quarter, the least in more than a year. joining us now to further breakdown the results is in stinet director romit shah and our editor at large cory johnson. break it down. i know you have been digging through the numbers. what do you see? i see a company that has been barring a lot of money, of customer deposits for cars they cannot build. of customer deposits for cars they cannot build. it is striking that a company that was once growing cars produced at 60% year-over-year clip is now less than 1% growth in terms of the number of cars it can build. we are hearing from the first

model 3 -- i posted one on my twitter page that shows car guys looking at the engineering and finding real issues. they put their thumb through the trunk on one side and can barely look through the other. it looked uneven. it does not close quite right and glued onto the door coverings. they are clearly struggling with the production of this model 3. it is more than they can handle right now. when we see in the earnings release is a lot more promises about production as we always see and lots more borrowing and poor free cash flow numbers. emily: taking a look at tesla after-hours on the bloomberg. shares not changed much right now. romit, what do you think? are the things cory is talking about a concern? at theif you look results, what you are seeing is real progress. they built 220 model 3 cars in

the third quarter. they built over 1500 model 3 cars in the first quarter. based on their guidance for the first quarter, they will build probably north of 15,000 vehicles. if they can continue on this trajectory. i think it was important they reiterated their production guidance from the start of the year. you have a company that will grow thebased on their guidancee first revenues roughly 100% to about $25 billion. very hard to find a multibillion dollar growing at this rate. emily: let's take a look at the chart, production. tesla cars produced each quarter over the last several quarters. we are seeing it holding steady. what does that tell you? cory: it tells me they are producing 1500 cars and a quarter and a couple hundred in the previous quarter is not what investors thought they would get involved with. i would be surprised if they

will really produce what they say they will produce since they keep missing their own estimates. this whole world wants this company to be a great success. we want great cars that don't burn a lot of fuel, look cool and safe and fun to drive, but the problem is tesla cannot build it. emily: do you believe it? romit: no, i just look at the numbers. they increased the production of the model 3 by a factor of 10 in the fourth quarter. they are targeting to increase it by another factor of 10 in the first quarter. cory: do you believe those numbers? are you going to sit here and say they are going to have those it by another factor of 10 in the firstnumbers? romit: yeah. we have these production numbers in our model. if you look at our price target of $500, it is predicated of growing revenues 100% this year. emily: what makes you so

confident, when this is a company growing revenues 100% ts and ceo that has admitted is facing production hell, and has missed many targets? romit: it is true, but you have to think about it this way -- the world is moving towards electric vehicles. andtesla is really the only gan town, and will be for the next two years. so, whether they get 4000 units by the end of q2 or 5000 units, i think really misses the point. you have a multibillion dollar company that is growing at a very significant rate. if you look at the reviews, the customer reviews of the model 3 -- and we have driven one ourselves -- they are phenomenal. i think for most people, it will be the best car they will ever drive. you see that in the backlogs. they have a backlog of over 500,000 reservations that continue to grow. it is a premium car in the right segment of the automotive market. all they need to do is get a

couple percent, gain a couple percent market share in the automobile industry and they are going to be doing more than $100 revenue.n i think the stock will be quite a bit higher. emily: cory, i know you have been digging into the free cash flow situation. what are you seeing? cory: here is why this matters. the company is going to run out of money if it does not get access to money. if it does not build cars and sell them, customer deposits are only going to last so long. free cash flow number got better this quarter. check out the chart on the s creen. this tesla free cash flow number, you can see it in yellow. y're interestingly spending a little lesson capital expenditures in terms of their factory, but they have positive cash flow from operations. you wonder, if they only improve the creation of these new cars

a little bit, what happened? you have to dig into the numbers. tesla does not tell us. one of the great things about the bloomberg terminal is you can instantly pull up company filings. i pull up the most recent company filing. when they get into the actual balance sheet of what they are actually doing, they share this combined consolidated number of changes and operating assets and liabilities. i don't know if we can pull up that chart or not. it is strangely a positive number of $500 million. the question is how do they do that and what was the change in the positive? i guess we can pull up the number. the number has been negative most of the recent quarters. they don't give us the full of statement. they have about a $500 million improvement in positive cash flow operations and virtually all of this comes from from a likely non-cash changes in

operating liabilities. that is why free cash flow looks better but ultimately will not mean more. emily: cory johnson. you can find that chart. thank you. , thank you for joining us. a stock we are watching -- snpa afterhares soaring reporting its public numbers. it rose to a better than expected 72% and the number of daily active users rose 18%. these results prompted at least five analyst upgrades. coming up, former google vp megan smith joins us to discuss around improving diversity in the workplace. check us out on the radio and listen on the bloomberg radio app. this is bloomberg. ♪

emily: the winkle boss brothers are not giving up on cryptocurrency despite bitcoin plunging below the $6,000 mark to the lowest since mid-november. >> we are long on the space. we don't sit there and watch the price day-to-day. we're in this for the long haul whether it is a decade or many decades. like i said earlier, we remember when big one was a dollars. as far as our concern, it is all gravy. emily: the twins early bitcoin investors and at one point their value was $1 million each last winter. say increasing regulation is good for the cryptocurrency space. over the last few years, big tech firms and startups have this the gender and racial makeup of the workforce is, but

for many companies the numbers remain stagnant with no signs of improvement. i covered the topic in my book, breaking up the boys club of silicon valley, and my next guest has also championed diversity. under president obama and as a vice president as google before megan smith joins us now from washington. great to have you back on the show. you have been on a tech job tour to get more people into technology. i'm curious of what you are diversity ofms of the people who want to come into this industry and how it compares to the diversity of people that are ready here. megan: we have been all across the country, diversity of the people who want to come into this industry and door and there were milwaukee -- we

were just an oakland. we had lines out the people thad love to be part of the tech sector. -- wene, denver, atlanta get the word out and running an evening career fair. the companies are showing up, people are showing up. a lot of people want in on these higher-paying jobs, that pay 50% more than the average american salary. hundreds of thousands of dollars. eall companies are software tech companies at this point. emily: women make up 25% of computing jobs. the statistics for blacks and latinos are downright depressing. why do you think that is still? megan: extraordinary sexism and racism, ageism. evohave really have to b lve out of this culture. your book is wonderful, i am halfway through. i know so many people in there. we got ourselves into this let's pattern map the person and

profile. it is a huge challenge. over 90% of money from the venture world is going to men. it is the tech job, really going to silicon valley, new york and boston. a lot of the country -- we were in columbus, and ohio is getting in one year what silicon valley is getting in a week. diversity of location, of people. we have so much talent in america. i'm encouraged because i saw also many entrepreneurs from all backgrounds that we really need to get behind and lift this country. i write in the book that google founders larry page really focus on hiring strong women in the early days. lots of incredible women i like sheryl sandberg and yourself. if you look at the numbers today, google's numbers are simply average and facing this big lawsuit from the department disparitybout pay

between men and women. what do you think went wrong or what is the lesson? megan: it is in all the companies, we just have extraordinary bias built in. has to justeally make this a very top priority. the leaders of all the tech companies -- all companies care about diversity, but it needs to move from number 20 to number one. it is shareholder value opportunity and important for everybody. there is lots of stuff that most companies are not doing. we wrote a piece in the white house called raise the floor and we listed all the things that leaders, and practices could do if most people pick them up. we have a reckoning. this is part of time's up. we have tons of history that brought us to this place, but none of us created this problem. once we know about it, let's go. emily: you mentioned the tim'e

e's up movement, the me too movement. we will hear from sheryl sandberg later about the me too movement. there has been a backlash against it. i asked her if it has gone too far. sheryl: i think the question is not if me too has gone too far or a day has gone far enough. because it cannot just be a moment in time where people raise their voice. these brave women who have voices, they want long-standing change. change that is not just for the day or with a month but for the years and the decade. that means we have to have the right institutional policies and those policies have to include due process, investigation. things need to be investigated and swift action needs to be taken. importantly, we need to end the culture of complicity. we need to end the practice of looking the other way and it is not your responsibility because it is all of our responsibility. emily: this rumination is one thing, sexual-harassment is another. what do you think about the

criticism of the me too movement that it has crossed a line? megan: sexual-harassment is rampant. it is clear from the brave people speaking up, many men are shock learning how rampant it is. we really need women and men to come together and push forward. sister-in-law, when she was young engineer in the 1970's, used to have a hustler centerfold above her lab. you open your book with sister-in-law,photographs thats the photograph people were using to bench test all the different screens and it was a picture of a woman, but actually it was a completely naked woman from playboy. when i was at google, i found out about this and i asked don eustis who was part of engineering if we can stop using it and he said of course. men and women can work together. none of us created that problem, but it is long-standing.

you also write about eight a ada lovelace. she took a piece that sheyou ala was translating and added a 55 page thesis of what martin computing -- modern computing. she is the founder of what has become computer programming and coding and we did not even know about her. not even know about her until i was at 10 downing street. emily: i am so glad to here about that story and how receptive men were at google. you mentioned things companies can do. i'm curious, your work at not shift7, what are the top three things that people want to make this a priority can do whether the companies are big or small? megan: i think what is exciting is there are very good things to do. -- lou example, leaders gerstner at ibm prioritized

this transition in the 1990's. the lgbt groups, the women's groups, the veterans group, all these different groups of talented employees and he connected his executive team which was not as diverse and graded not only -- created really knowing. he added that to the agenda of the weekly meeting. adding the voice of some of the more employees. he asked those people specifically how to get more employees, more customers and more suppliers from your community and how i can make you thrive. it really made a huge difference. i think the move is a structured, broad conversation and look for what is working and share that and make that broader. emily: i appreciate sharing what you have learned with us. megan smith, former cto of the usa. thank you for joining us and stopping by. congrats.

it is fabulous. emily: coming up, day three of the case in uber is through. we take a look at what went con. it is fabulous. emily: down in the courthouse and what is yet to come. this is bloomberg. ♪

emily: travis kalanick's time on the witness stand during the uber-waymo trade secrets trial has come to an end. uber'smer ceo of waymo's lawyers went after him, painting a picture of someone obsessed with winning the race of self driving to privacy. joel rosenblatt has been in the courtroom for the last several days. give us the play-by-play of the testimony. joel: the waymo lawyers came at him kind of hard. not as hard as you might expect. on cross examination, uber's own lawyers were asking him questions which were clearly, he was very well-prepared for.

waymo, the big surprise was that waymo did not come at him very hard. there were a lot of details that waymo dug up that are very troublesome froor uber. and they really did not ask travis kalanick about very many of those and that was a bit of a surprise to me. emily: does that make you think that waymo does not have that strong of a case? joel: i was kind of wondering that, and then as i state in the courtroom after travis kalanick left, you saw what was going on. offered a lot of kind of i don't know's, i don't remember about a lot of the more difficult pieces that they asked about, as you predicted. i should have taken a better cue from you. after he left -- i think wayma as figured out that is what they will get from him. after he left, a forensic

expert, a computer forensic expert that evaluated the case and the most damning evidence came in and offered testimony about all kinds of data and the technical issues, technical kind of problems that uber had. it got very damning, very problematic very quickly. it was kind of an interesting contrast in travis kalanick's testimony. emily: what is next? hopefully, fewer i do not recalls. joel: fewer of those. larry page is still up. that is kind of later, but it will be interesting -- he is a very quiet person. he has been a bit awkward. i think he has the kind of show up and be better in court that we have seen him, as a result of kalanick's good performance. now, we are going to see some very difficult evidence, technical evidence.

we are going to learn just how deep into the weeds this jury is willing to get. i think that is the real question. it is kind of a dicey proposition to guess what juries are going to do or what they are thinking. experience, juries have taken the effort to dig into stuff. if they do that, waymo is still very much alive. emily: joel rosenblatt, i'm larry page is preparing for this. thank you so much. coming up, has the me too movement gone too far? our conversation with sheryl sandberg and her new call for action. this is bloomberg. ♪

>> let's start with a check of first world news. white house press secretary sarah sanders says they will the nextertainty for

two years and criticized nancy pelosi, who gave him earth on speech today in support of young immigrant dreamers. >> the next two years and criticized nancy the budget bill should be a budget deal and members of congress like nancy pelosi should not hold our military hostage over a separate issue. the losey has spoken out for more than five hours and has set the record for the longest house speech. >> that is a live picture you are looking at. jong-un is sending his sister as north korea's official representative to the winter olympics. she will attend the opening ceremony tomorrow as world leaders including mike pence gathered to the event. the death toll from the earthquake in taiwan has risen to seven, nearly 200 people have

been arrested so far from for buildings that nearly toppled, but dozens more remain unaccounted for. military personnel and volunteers are assisting with the search. global news, 24 hours a day, powered by more than 2,700 journalists and analysts in more than 120 countries. i am a alisa parenti, this is bloomberg and it is just after 5:30 p.m. in washington and it is thursday morning in hong kong where we are joined with a look at the markets. >> good morning to you. the mood right now, if i can make an analogy, it is like jaws. the shark is in the water, and you go back in, what we saw yesterday afternoon in the asian markets, who basically what out all of our gains -- wiped out all of our gains.

looking at futures, australia might open weaker and japan might get support from earnings, but that being said, it is an early story. south korea collapsed yesterday into the close, the biggest for they drop for south korea which opens up in 90 minutes. going back to 2012, and also some key data coming out of the region. japan ands out of china, and a right decision out of new zealand is putting pressure on the kiwi dollar. later this afternoon, a focus with a look at the philippines. ♪ emily: back to our top story of the day tesla stock isn't

changed, revenue beating analyst expectations. pace, elony red hot musk making progress of model three sedans and took deposits for new electronic cement trucks and sports cars. david welch joins us now, david, what do you make of the results. >>

emily: if there is one thing we have learned about bad behavior is notcon valley, it just about the people who crossed the line, it is about people who enable it. ants justifythe the means, but can that be an excuse anymore?

take a look at people who can have a bigger impact, the people who fund the vc's who fund startups. is limited partners -- your traditionally very press shy, so i will come you to speak lp's are handling it. the issues of bad behavior and vc's, and somebody who fonts vc's, how have you received this news of bad behavior? it like everyone also, through the press, social media, has been the primary way we have seen it. it is shocking and disturbing, and that is the primary way we

have seen the information. spoke with your colleague, and she told me that of course she would like to see more women around the table, ultimately you guys invest on returns. you a think that should change? you think maybe there should be a focus on who the people are versus what money you are going to get out of it at the end? >> our primary mandate is on hasrns but diversity returns -- it can be gender, race, or even background experience. over the decades you have seen the operating work diversity implemented where some firms have financial investors and people with operating industry experience. the operating work diversity implemented where some firms in this environment you are seeing more emphasis on gender. more today than ever before, an active discussion

about bringing in more gender diversity and you are seeing it. we have a number of managers and up-and-coming investment professionals were primarily women. an active discussion about bringing in more gender diversity and you are seeingit f the dialogue and action behind it from venture capitalists out there. lps haven'trically, cared much about it. is it ultimately your firm that is the exception? firm is the exception, we are focused on returns, but for limited partners, they don't fully get a sense of the type of behavior that was occurring in the industry. the didn't understand consequences of such behavior, they definitely understand it today. pc's today, more than ever -- lps more than ever won't tolerate that behavior. limited top of my for partners and this part of the dialect they have with vc's.

if there is an indication of continued bad behavior, i think they will get a rude awakening that they will be able to raise capital going forward. emily: i know you are invested into a wide range of funds, what kind of conversations are you having with them about this topic? many have established partnership groups, and there is a turnover on a regular basis. been movement is on the junior and up-and-coming professionals were there has been an emphasis on gender diversity. for some firms that are newer in nature, more of a nap this bring senior professionals that are female. with established firms where there is less turnover, there is less leeway, but they are active in trying to incorporate more gender diversity at junior levels and at some point those individuals below will become partners there. emily: how do you expect funding

to change over the next year given the backdrop that we are operating against? >> if there is any indication of that are questionable behavior, there will be little support for those types of managers. where there might have been leeway before, there is no leeway going forward nor should there be. it is that early on top of mind for the general partners themselves, so i am hopeful this type of behavior, given what we have seen over the past year, will be eliminated going forward. it is unacceptable and should never have been there, and it is apparent to everybody that it should occur going forward. i am hopeful. emily: thank you so much for stopping by and sharing traditionally not shared views from the lp community. coming up, explain why facebook

should change the business model and not for advertising. this is bloomberg. ♪

emily: we sat down with elevation partners and silver lake co-founder roger mcnamee, and where he thinks the social media giant is falling short. >> all i am saying to facebook is guys, you have one. you don't need to have this kind of business model. there is a way to have a business model that is actually better. my point is i would like to spend $10 a month and i would like to control my newsfeed and what to take the ads out and make it more valuable to them, and have one version that is politics, one version that is family, sports, health and fitness, work related. being able to toggle through them and control things, and i want them to be successful and they can be. they are hiring

10,000 people to handle the issues of fake news or abuse, is that enough? >> not only is that not enough, it is a relevant. you cannot fix this damage after -- byct by having police having people police it. it aave companies who make perfect platform for bad actors to abuse a platform. you can only fix this robin by fixing the algorithm. emily: how so? thatu have to make it so anger and fear are not the predominant ways that people are motivated to act on facebook. advertising, or if you are not dependent on advertising, you don't need people to be addicted or fearful. -- if if they don't pay they do make money on ads, how

do they make money? --i pay a prescription subscription, i am signaling the price. give me the option of having a different thing. what they are doing now is the lazy way out. these people are smarter and better than that. --ly: one about regulation what about regulation? >> regulation is a good thing. they have the power to fix it, but i suspect their lawyers have told them not to -- my point --e is that i would love to the way you know when people have a problem and are serious about fixing it is if they reach out to their critics to understand the issues. i am sitting here and i understand that people would be mad at me, i really do, but i would have everybody asked the question, what is actually in this for me? i don't need this. emily: if they don't do this,

what you think will happen? democracy is an extreme peril right now and we don't have a lot of time to fix this. elections are coming up in november and we don't have time it is not just-- the russians you have to worry about. emily: those elevations core partner and silver lake , andunder roger mcnamee you can catch the interview tonight at 930 eastern time. that does it for "bloomberg technology". this is bloomberg. ♪

7:00 a.m. in hong kong, and i am tom mackenzie, welcome to the brick asia. the top stories this thursday. another rocky ride as volatility returns with a vengeance. 500 raisedt, the s&p gains with the ups and downs drive. a 500 pointa a lower burning cash at pace and remains optimistic about the model three.