with robert mueller. they need assurances the questioning would be fair and limited in scope. ty cobb's will be replaced by the clinton impeachment lawyer. mike pompeo attended a swearing-in as secretary of state today, promising his administration will not repeat the mistakes of the past. he replaces rex tillerson who was fired by trump in march. black men arrested for sitting at a starbucks without ordering settled for a symbolic one dollar each and a promise from officials to set up a program for young entrepreneurs. on april 12,ested leading to protests over racial profiling. five members of the national guard were killed today after their cargo plane crashed in georgia.

they had recently left the u.s. territory for a mission on the mainland. global news 24 hours a day on air and at twitter. in new york, i am mark crumpton. "bloomberg technology" is next. emily: emily: i'm emily chang. up, tesla reports results and says it has overcome the botchedbottleneck that its earlier goals. cambridge analytic are shattered. how it can still be in legal trouble after closing down operations. shares of apple turned in the best performance in february on earnings results. where the tech giant goes from here. first to the lead, tesla shares

flat after initially spiking. revenue that beat estimates and produced the model three at a rate of 2000 cars for three weeks in april. the electric carmaker forecast it will generate cash in the second half as production of the critical model three gains traction. tesla is on track to make 5000 sedans in about two months, according to a letter to shareholders. joining us is max chafkin, and in portland we have ed niedermeyer. max, bigger goals. a weak000, 5000 car target and they will generate cash in the second half of the year. do you buy it? >> this has been the online tesla has been putting forward the last couple of months. i think many people have 5000 unitsat the goal is a big if.

it is more than double where they are right now. get thataying if they goal, they will be profitable. this would be a huge jump and tesla has had trouble in the past revising these targets. we will see. meh announcement. that is why the stock is not moving much. emily: what is your read? >> i think they are counting on the deep reserves of optimism people feel toward this company. people feel like anything elon musk puts his mind to they can accomplish. i would caution that manufacturing experts, it is harder for them to be optimistic on a fundamental level. when you go into manufacturing without doing the testing the auto industry does, you figure it out and you go along, it is

difficult to make these big jumps. i feel like they are a year into the production of this vehicle and are struggling. rule impossible to anything out. i remain skeptical. emily: i want to talk about the executive turnover and reports that elon musk has taken back charge. who really is in charge of tesla right now? >> elon musk. broad sort of grand pronouncement sense. if you look at the memo he sent, it is very specific saying that musk is going to mid-level managers. he wants them to be able to justify very small expenses. that is an approach that has worked for him in the past. spacex, he is the main rocket

designer at this company. it is what he did with the previous cars, the model s and the roadster. making a car is a complicated process. there's a lot more automation than any other manufacturing endeavors that he has been involved with. forget we areot expecting other tesla vehicles to be unveiled. how will tesla pull back on to produce 5000 cars at the same time we are expecting to see the semi and the model y? can't.an, yeah, you you can't expand when they are pulling out automation they put in. they are pulling that out. they are putting in new manual processes. they are changing things as they

go along. you want to buy once. tesla is bringing this iterative approach and i think you can iterate around the margins, but if you are doing it fundamentally, the costs add up quick. gonehave also really headlong into these projects. from what i understand, they are working on plans to open plants elsewhere around the world. that is worrying if they get ahead of themselves trying to without vehicle lines getting the one they have on solid footing. who is inaking of charge, we are 25 minutes away from the earnings call and elon musk has tweeted about spacex, should shipragon and about three months. he has a lot on his plate. >> not just spacex and tesla,

there are the side projects. some of them are quirkier than venture thatomedy has been rumored. the thing is, this is part and as investors are concerned, elon musk has been doing this a long time. while there could be questions about folk is, he appears to be focused on production right now. automation, about in the earnings that has come out, the earnings is the idea this human surge, these additional workers they added to supplement whatever problems have come with automation is temporary and the hope is the automation vision will come to fruition, which is key to keeping expenses low. meantime, tesla is dealing with service complaints. what are you going to be watching over the next few months to see if tesla can, you

seem to believe they cannot hit these goals. >> on the service side, he is the number one boss. sk took his position. he is in charge of that. it is easy, elon musk is a brilliant guy. he is also a human. he has limits. given the extent of the manufacturing problems, there will be some more reporting coming out about that that illustrates those problems. service is important. a have to keep customers happy. manufacturing is the challenge. his track record is not great. the other key point is with the stock continuing to go sideways, it is hard to offer the plush packages of stock options, it is getting harder to bring in the turn theey need to

situation around. that is troubling. emily: another tweet in response to a tech crunch article about , blah.ults, blah, blah we will be listening to this call and will bring you headlines. ed niedermeyer and max chafkin, thank you both. at political consulting firm the heart of the facebook scandal is shutting down. in a statement, cambridge analytic a says it is beginning in solvency proceedings. they cite numerous unfounded accusations about its role in the facebook fallout. it says it is being vilified for activities that are legal and components standard of online advertising. joining us from london, caroline hyde. they continue to say it did nothing wrong. caroline: precisely.

it says due to the siege of media focus, which we are adding to, it drove away their clients. they stand by the fact they did nothing illegal. they were accused of improperly gathering data on 87 million people and they said we have not done anything illegal. we have confidence in our employees, that they acted lawfully. as you say, they say they are vilified. this is notable they are therefore commencing in solvency -- in solvency proceedings. they are no longer viable. emily: are they facing potential criminal charges? they are, if they have done something illegal. information the

commission office is investigating. they got a warrant to see how they managed to acquire the personal data of 87 million people. did they do it in a wrong fashion? did they do it illegally? the ico does have the power to bring them in for questioning. potential foris legal ramifications, if they are seen to have done wrong. counsel,hire a queen's that is a very high lawyer in the u.k., to do an independent investigation. the evidenceq.c. was not borne out by the facts. they think they are in the clear. we will see. emily: caroline hyde for us in london. you're sticking with us to talk about spotify. they reported earnings a month after its listing. we will break down the results. check us out on the radio,

bloomberg.com, and on sirius xm. this is bloomberg. ♪

announced plans to sell off a health business to capitalize on the popularity of wearable fitness trackers. wearable makers have struggled as competitors introduced more similar features on their smart watches. toia is selling the business the cofounder of a french startup they acquired in 2016. streaming music giant spotify reported 75 million premium users in the first quarter, leaving investors disappointed. for more i want to bring in caroline hyde. here with me in san francisco is alex barinka.

shares are down. why are they disappointed? know if it is disappointment. it might have to do with how the company got public. spotify went public in a direct listing. they said all of our shareholders can sell their shares now on the open about a month ago. not as many holders sold as expected in the early trading and now the stock is up from its open price. i have a suspicion the good old-fashioned profit-taking is going on here. this opportunity to intentionally selloff. when i dig into the numbers, everything is in line with company guidance, analyst estimates. i am left scratching my head as to what they are disappointed with unless they were expecting astronomical growth. that is the question, will spot if i have growth of

some kind in the future? or is this the norm now they have gotten to this size, will growth plateau? if you look at premium subscribers, up 45%. monthly active users continuing to grow. this is a company that is going to continue to deliver, as it promised. my mind boggles. we got these numbers that were 1 before its for q was over. what did they expect, they were going to ramp up phenomenally in the last couple of days and be able to punch the lights out of these expectations? really have delivered up to expectations. theysts have decided wanted a little bit more.

many shareholders are taking profit, as alex said. there are heavy expectations going forward. ngs, if youuy rioti look at the expectations. hardly any sales. you've got 12 buys. and the price target is getting close. many of these banks are saying, buy into this stock because of the subscriber growth. it is just at the beginning. 1.3 billion smart phone users, 75 million premium users and in 100 70 million users in general. we've got room to grow, as tim cook was telling you. shares are down 6.5%. i did speak to tim cook yesterday about spotify as the other competitor in the streaming music race. it has turned into a two horse

race globally. i asked how worried he was now that spotify is public and they are posting this kind of growth. he said i see it differently. if you take all of the streaming services in the world, you get a very small number relative to the world population. the challenge is not competition with each other, it is convincing people that do not subscribe to a music service to subscribe to one. i think we are in a great position to do that. certainly a great way to spin. do you buy it? potentially. spotify is a market winner. it is a nice thing for tim cook to say. tractionee a bit of with what spotify has been doing, if you look back, they have a deal with hulu, and they are selling that as a combined premium offering. when you think about the generation it makes sense for

them to target, the smart phone users, having a slew of services, that take from tim cook does make sense. whether apple is winning, they might need more content which is where you have seen spotify try to push in outside of music into podcasts and now video in the spotify app. shows righth hulu's now. have exclusive radio content, interviews they do with artists. are there particular global territories that spotify expects to grow more in particular? is were analysts are focusing. one of the biggest investors is tencent. i was interested in a breakdown of premium users.

the bulk are in europe. about a third is in the u.s. and then it is latin america and the rest of the world. you will see more emerging markets. africa, we are going to see an expansion territorially and more innovative ways of cashing in and making money. emily: caroline hyde in london, alex barinka in san francisco. coming up, now that we are in the final stretch of tech earnings, some charts that you need to see. this is bloomberg. ♪

emily: we have been covering the big tech earnings here. now that most companies have reported, i want to get to our reporter for some insight and highlights. we have been following the on tesla,live blog making some big promises this quarter about production and cash generation later this year.

teslaeresting because announced relative to the actual adjusted earnings, but as you mentioned, a few big announcements. before we dig into one of those, let's take a look at an ongoing thing for tesla, the bulls versus the bears. at in blue,looking the tesla stock right around 300 and in white, the short interest. ago, the tesla short interest had been 35%. then dipping down more recently, of the stock ahead dropping. recently climbing again. those bears back out in full .orce, up about 30% the bears are betting that some will not beets

pledged. and cash flow, elon musk saying that for the second half of the year, they may actually produce cash. the other story is the cash burn . let's use the g tv and take a look at the cash burn because it build in a big way. what we looking at is free cash flow. outside of this quarter, back in september of 2016, we see that tesla has been burning through cash. that is one of the themes for the bears. it has really moderated. once again they burned through $1 billion in cash. it is difficult to see how they are going to be cash flow positive by the end of the year. who knows, with the model three. delivering that electric vehicle to the masses. maybe that will work. emily: apple has been the other stock everybody is talking about. shares up on the back of strong,

or stable earnings. what did you see with apple? your characterization of stable earnings. it was not the disaster people were looking for. it was stable. something that stood out to me, it is not just about the iphone. something they are trying to ramp up. let's use the dtv function. this is the services revenue for each of the quarter. high, $9.2ord billion. itunes, all of those services they are providing, that is out ofg to make a dent the quarter overall. more than 60 billion dollars, $9 billion contribution and growing. and quickly, the broader tech sector, just a couple of weeks ago we were talking about bubbles being burst and now all

of these stocks seems to have recovered. >> to some degree. have not climbed back to the all-time highs. if we jump back into the bloomberg, what we are looking at in the bottom panel is the s&p 500 tech sector relative to the s&p 500. tech is outperforming overall. we can see that in white. up 5% on the year. the s&p 500 down slightly. doolittle,abigail thanks for the update. another deep dive into tesla's report, comparing it to its peer s. more on that next. this is bloomberg. ♪

mark: you are watching bloomberg technology and here's a check of first world news. the president of the red cross is that syria is at a tipping point to stop the war or

things could get more dangerous. impression that we interesting threshold moment. nearly 2000 people have been killed in the seven-year conflict. withio guterres help talks resume in london and discussed a range of issues, including working closely to reestablish international norms against the use of chemical weapons. the dutch prime minister says the european commission's proposed new seven-year, $1.36 trillion budget is unacceptable because the netherlands will pay a larger share. the netherlands contributes more to the eu that it gets back. in spain, and melted group says it has completely dissolved and considered in a letter that it failed to resolve the vast political conflict.

the group is blamed for killing more than a third of 50 people in its 60 year campaign to establish a vast homeland in northern spain and southern france. global news, 24 hours a day, on the air, and at tictoc on twitter. powered by more than 2,700 journalists and analysts in more than 120 countries. i am mark crumpton. this is bloomberg. it is just after 7:30 p.m. in new york and it is 7:30 a.m. in sydney and that i am joined by paul allen in sydney. good morning mark, health and markets,weight on u.s. and the fed holds, as expected, and we have the s&p and dow both off 7/10 of 1% and the nasdaq -- 4/10 for tens of 1% of 1%, and tesla reported in will have that story in a little while. and we have asx futures pointing

a lower, andke japan closed today with the aussie dollar hovering above $.75 u.s. below $68l slipping as u.s. crude inventories buildup. elsewhere we look at the australian trade that is expected to widen, and steven mnuchin is in china to talk trade. i am paul allen in sydney. more from "bloomberg technology" is next. ♪ emily: this is a technology and back to our top story. tesla out with first-quarter revenues and elon musk saying he is targeting 5000 model threes

in two months, but it is difficult to predict production. if the company cap up its production the company will be profitable in the third and fourth quarter, and aside from s anddel three, the model model x are hot, and joined us now from detroit is david welch. we are waiting for elon musk to a few minutes from now, what is your overall take given the promises and the fact that they have been broken a few times over the years? david: it sounds like we are on the way to getting 5000 units in the second half. then you read more closely in this letter and he says it is difficult to predict production. we note yield on come at the has been the case all along, and getting to that cash flow , andivity -- we know elon

there is a lot of ifs and butts here, and with tesla, if it all comes the past there will be a payoff. if not, the bears and the shorts will have a field day with it. we didn't learn a lot you here looking at all of this in terms of the high line and what is going to happen with the model three. that is white issuance went up because there is positive direction, and then people read the fine print and gave it back because it says, there is still variables here that tesla as and perhaps could be figured out. emily: tesla shares down slightly at the moment. what new tidbits of information are you hoping to get on the call? i know there's excitement he mike duke teasing on a new model ir an suv, and automation -- note there is excitement with elon musk teasing a new model. david: details on production and

where they really are. and you look at question by analysts on the call. said he is just excited talking about this rapid increase in production that he has planned. david: maybe he has good news on the call. one interesting thing is he said capex will become down. are they ratcheting back on the timeframe for model y and the semi trucks they promised in the past? if you what those vehicles out you need to spend on r&d and do some engineering spending and getting things in place to get those vehicles out. to getare still trying to 5000 units and eventually units, yet to spend

capital to get those lines up and running. units, yet to spend capital to get those lines up and running. maybe we'll get more detail on that and how quickly it will get there. emily: elon musk continues to talk on the call saying they are improving production with dramatically less capex. david welch, thank you for joining us from our detroit bureau. apple sold 52 million ipods in the first quarter of this year, any nits are up 3% despite global smartphone market rolling 2% in the last year. and that has this investor making predictions. of thes a new phase iphone story, and that is the face of predictability --the phase of predictability, and lower growth. that is because they have this with a800 million base broad line of products. emily: joining me to discuss

everything apple is mike olson and bloomberg executive editor, tom giles. michael, tr increasing the price target for apple, why? thatat is just chatter iphone sales were not as bad as feared and it provides a far better picture than any printed in the next several months. we are raising the price target to 214 on an eps and we recommend a coming anticipation related to a wide array of next generation iphones coming next fall. iphone.till come at the $28, which signals the mix isn't tilted towards the hundred $99 iphone x. 1400 new phone could cost

dollars, and i spoke to tim cook ahead of the call and he told me that about the price, i don't have concerns about the price, it is valued as it is within incredible product that sets us up for the next decade. you think that means a $1400 price target is realistic? mike: i think asp is going higher. we haven't modeled higher for that because want to keep estimates conservative, but investor fears related to the iphone's hype going into the quarter. they came in like with iphone x specifically, where investors were cautious. the company said iphone x continues to be the number one selling advice, stomachs continues to be solid and the asp was essentially in line with what we are modeling. more importantly, the june quarter guidance which calls for revenue above the consensus implies iphone units were ahead of estimates. looking to the fall, we expect apple will widen the iphone x

out into three versions. we believe that could drive investor anticipation around a better upgrade great and drive asp higher for iphones. emily: back to the question. we asked this every time the price goes up, but our people or to buy a $1400 iphone? that is a lot come and member how much they have disguised with the costs when you go and buy a new phone. know what does you the bottom line price, this is the monthly cost to you over the course of two years or whatever it is. it doesn't seem like quite as much. remember we talked about growth in the future, a lot of talk about india on yesterday's call. people in abn, there's a lot of growth potential there. that is your if high end phone, but that is where the strategy of the wide a lot of lower end,

features you find in today's iphone x are once you will see at a lower price device going forward. emily: you still think there is some sort of urgency around apple needing to diversify away from the iphone, despite the fact results were solid? we see services becoming a bigger piece of the pie, does that need to continue at a significant rate so apple can weather the smartphone slump that continues to happen? needs too think there be a next path of innovation that needs to be identified. is the wider range of iphones that we expect to come in the fall. and as you mentioned, services, diversification, and services 31% growthilarated in the march quarter from 18% growth.

a positive mix given the high margin of services that is now 50% of revenue. we believe services has the potential to be a $50 billion business by 2020, sully ahead of what we are modeling. that is actually more potential upside there for services. emily: a different rhetoric from what we have heard from apple where it was been all about diversify. is: that new product, when the tv coming, the car coming? homeidn't hear a lot about pods or ar. tim cook talk about health care and i'm intrigued with what is in store there. but is it going to be a game changing park along the lines of the iphone, the ipad, etc.? that remains to be seen. they are not sending that signal now, but what is interesting to me, and with our colleague wrote in a column where other

technology companies are poured money into r&d to be intrusive, gimmicky, and turning users into products. a talks about apple being rock of common sense come up with the supply chain all stuff that sounds good if you are an investor, but not if you are someone looking for the next thing. what is the big innovation that is going to come in the house that steve jobs built? we are going to return $100 billion to shareholders rather and by netflix or tesla invest in r&d to build this new big thing. idea, what isan apple and how are we going to think differently about apple going forward? emily: tom giles thank you, as well as mike olson at piper jaffray. amazon is preparing for a move that could be a new thread the payment services like paypal and card issuing banks.

goingcommerce retailer is to pass along the savings it gets from cap card fees to other retailers if they use an online payment service. the delay, merchants using but a pay is 2.9%, long-term commitment to the service could mean a lower negotiated price. despite but the latest move from amazon, square right in first quarter results and a look at what jack dorsey's company reported. this is bloomberg. ♪

emily: plenty of tech earnings to keep up with with square and

fitbit reported first-quarter results. jack dorsey's companies beat jack dorsey's companies beat estimates with adjusted revenues of $700 million and saw payment volume jumpedjack dorsey's compt estimates with adjusted revenues of $700 million and saw payment volume jumped 31%. . revenue was in line with analyst estimates of hundred $47.9 million and the company predicting smart watch is growing a percent of revenue next quarter. joining us to discuss is selina wang. what is the top headline? selina: top headline is despite outstanding results, investors have a high bar for this company. emily: and shares have been on the rise. selina: they rallied more than 40% this year, but we saw chairs get punished with an increase of 51%, down more than 6% right now. is because they are expecting perfection right now. the one concern is expenses are increasing dramatically, especially sales and marketing and product development.

grant not sing margins expand as much as have liked to seen. execute onn them their vision of not just being a payments platform, but it one-stop shop of getting loans come up with delivery, inventory management, and other business offers and services that we see them capture an increasing share of larger merchants commands merchants have more cash to spare her spending more on these products. food delivery, businesses, accounting, inventory tracking, which opposes going to be the breakout asked the thing revenues stream? driver is foodey delivery and they have a big base of food sellers and restaurants. many of their take multi-start retell her's the food services business. and also the square capital business is growing rapidly. a lot of the problem is small sellers is they are probably service by the big institutional banks and square can step in and

use their machine learning and ai to help get them the best loan and allow sellers to pay back through payments transactions so they don't feel this heavy burden of having a square back. that is another way today are able to keep the long default rate extremely low. emily: talk about the corn trading. selina: it contributed. emily: talk about bitcoin trading. selina: it shows they are putting an emphasis on their square crash at and they want to build a ecosystem for this. i spoke to the chief financial officer sarah frier on the phone, and after the question of what is the ultimate vision for the card, they see the corn trading as a way to draw in users and allow them to get into their square cash ecosystem and use other financial services. does a have rolled out a debit card that links to the app, so they have big plans for this. emily: investors not impressed by fitbit shares, and google

with no integrate and innovate in health care and wearables. talk about the partnership and what it means. stina: that is one part that is bright, and google is working with fitbit to integrate data deeply into the health care system. what does that mean exactly? the goal's health care providers will see data from the electronic medical records and dataned that data with sent from fitbit trackers so they can come up with better decision-making close with people with chronic illnesses that are useful to. see that data these trackers capture. as he said, earnings were lackluster and investors are not happy. at the end of the date is a company's is squeezed from all sides from competition, and they are barely hanging on. emily: is it mostly from apple, the competition? selina: isn't it always about

apple? fitbit has struggled to come up with a smart watched that appeals to consumers. they have a new set that is supposed to be a mass appeal smart watch, but we have yet to see if it is successful. james has said he expects smart watches to be a bigger driver a revenue, but not enough yet to offset the decline in the fitness tracker business. emily: selina wang, thank you for those reports. conversation with melinda gates, the current political climate, and her. the tesla call, elon musk talking about the production of battery packs. here's what he had to say. increase in output hours, in the last 24

the factory managed to achieve , per 2000 packs per day week. hour would be a rate of 5000 cars per week. ♪

ofly: than latest edition bloomberg ".0, i caught up with melinda gates. in their annual letter written every year, to express a wish president trump to more respect, when he speaks, and when he to tweets. president, no matter who he or she is, has a responsibility to the moral authority and be a role model. i think the views today coming out on twitter and this president don't represent our views of women in society.

i am in the school system a lot all over the country. and staff ands teachers are teaching the kids is what is important in this country, about not bullying and treating people equally and having respect. you have a role model at the top, and he has made their job a lot harder. bill'syour name and vicehave come out as presidential candidates. >> who want to work with whatever frustration that comes in the office, we need to come and the u.s. government is too important around the world and our role in the world is too important not to work with them. we feel we can work hand-in-hand with them in partnership through the foundation. said you willh continue to work for mr. shimkus working together is important continue to work

with this administration. what are your biggest concerns about this administration? >> this administration is making major budget cuts and the message that sense about the we care about others and our ability to create markets to from loweries move and middle-income countries and credit markets for ourselves? we are pulling back on that and that is a big concern for my husband and i. emily: that was melinda gates, cochair of the ill and melinda gates foundation. and one more highlight the tesla earnings call, must says getting the company cash flow positive is not a certainty, and he also mentions automation and thinks cost will decrease by getting rid of the election stations that are poorly suited to robotics.

that does it for bloomberg technology come a reminder we likes them on twitter and check weekdays at 5:00 p.m. eastern in new york and 2:00 p.m. in san francisco. this is bloomberg. ♪ retail.

under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver.

♪ >> the fifth these unchanged and sticks they graduatl goal. saw the dollar jumping that inflation may run hot. to submit u.s.ot threats hours before top-level trade talks begin. betty: in elon musk says tesla should