>> rudy giuliani who joined mr. trump's legal team says his lawyers are open to him saying withfor an interview special counsel robert mueller company is assurances that the questioning will be fair and limited in scope. giuliani spoke as the team loses its lead lawyer in the probe and he will be replaced by clinton emmetchment lawyer flood. and will not repeat mistakes in the past and pompeo advises rex tillerson was

fired. trump in. march to black men arrested for sitting at a philadelphia starbucks without ordering settled with the city for a symbolic one dollar each and a promise from officials to set up a $200,000 program for young entrepreneurs. on 8:00 look to protests in philadelphia and iraq the u.s. over racial profiling. members of the national guard were killed today after their cargo plane crashed in savannah, georgia. the associated press reported that the u.s. territory for commission on the mainland. 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. this is bloomberg. "bloomberg technology" is next. ♪

emily: i'm emily chang. coming up, tesla reports results and says it has overcome the battery bottleneck that botched its earlier goals. cambridge analytica shuttered. 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. they reported 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 a week in about two months, according to a letter to shareholders. joining us is max chafkin, and in portland we have ed

niedermeyer. max, big goals. the 5000 car a week target and they will generate cash in the second half of the year. do you buy it? max: this has been the line tesla has been putting forward the last couple of months. i think many people have observed that the 5000 units goal is a big if. it is more than double where they are right now. musk is saying if they hit that goal, they will be profitable. this would be a huge jump and tesla has had trouble in the past frequently revising these targets. we will see. sort of a "meh" announcement. that is why the stock is not moving much. emily: ed, what is your read? ed: 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 as 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. it is impossible to rule 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?

max: elon musk. not just in a 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 even very small expenses. that is an approach that has worked for him in the past. spacex, he is the main rocket designer at this very large 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. emily: let's not forget we are expecting other tesla vehicles to be unveiled.

how will tesla pull back on capex to produce 5000 cars at the same time we are expecting to see the semi and the model y? ed: i mean, yeah, you can't. you can't expand when they are pulling out automation they put in. they are pulling that out. they are putting in new automation and manual processes. they are changing things as they go along. you want to buy once, cry 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. they have also really gone 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 open new vehicle lines without getting the one they have on solid footing. emily: speaking of who is in charge, we are 25 minutes away from the earnings call and elon musk has tweeted about spacex, saying the dragon crew should ship inabout three months. he has a lot on his plate. max: not just spacex and tesla, there are the side projects. some of them are quirkier than others, the comedy venture that has been rumored. the thing is, this is part and parcel as far as investors are concerned, elon musk has been doing this a long time. while there could be questions about focus, he appears to be focused on production right now. to the point about automation,

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. emily: 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. ed: on the service side, he is the number one boss. musk 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. they 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 talent they need to turn the situation around. that is troubling. emily: another tweet from elon in response to a tech crunch article about the results, la, la, la. we will be listening to this call and will bring you headlines. ed niedermeyer and max chafkin, thank you both. the political consulting firm at the heart of the facebook scandal is shutting down. in a statement, cambridge

analytica says it is beginning insolvency 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 accepted as standard components of online advertising. joining us from london, caroline hyde. him we reiterate they continue him 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 insolvency proceedings. they are no longer viable. emily: are they facing potential criminal charges? caroline: they are, if they have done something illegal. this is what the information 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. clearly there is potential for legal ramifications, if they are seen to have done wrong.

they did hire a queen's counsel, that is a very high lawyer in the u.k., to do an independent investigation. they say the q.c. the evidence 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. ♪ bloomberg.com, and on sirius x. this is bloomberg. ♪

emily: nokia announced plans to sell off a health business to capitalize on the popularity of wearable fitness trackers.

since then, wearable makers have struggled as competitors introduced more similar features on their smart watches. nokia is selling the business to 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? alex: i don't 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. they are taking this opportunity to potentially 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. emily: that is the question, will spotify have growth of some kind in the future? or is this the norm now they have gotten to this size, will growth plateau? caroline: 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 expectations for q1 before it

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? they really have delivered up to expectations. analysts have decided they wanted a little bit more. many shareholders are taking profit, as alex said. there are heavy expectations going forward. we've got buy riotings, if you 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 excess of 100 70 million users in general. we've got room to grow, as tim cook was telling you. emily: 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? alex: potentially. spotify is a market winner. it is a nice thing for tim cook to say. where i see a bit of traction 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. you can watch hulu's shows right now.

emily: they have exclusive radio content, interviews they do with artists. are there particular global territories that spotify expects to grow more in particular? wherene: china is 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. israel, south 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 now that most companies have reported, i want to get to our reporter for some insight and highlights. we have been following the bloomberg live blog on tesla, making some big promises this quarter about production and cash generation later this year. >> interesting because tesla 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. what we are looking at in blue, the tesla stock right around 300

and in white, the short interest. about a year ago, the tesla short interest had been 35%. then dipping down more recently, closer to 22% ahead of the stock dropping. recently climbing again. those bears back out in full force, up about 30%. the bears are betting that some of the big bets will not be 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 built 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. him what did you see with apple? abigail: i love your characterization of stable him 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 g tv function. this is the services revenue for each of the quarter. it is a record high, $9.2

billion. itunes, all of those services they are providing, that is starting to make a dent out of the quarter overall. and more than 60 billion dollars, $9 billion contribution and growing. emily: 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. abigail: to some degree. have not climbed back to the all-time highs. if we jump back into the inif we jump back into the bloomberg, what we are looking at in the bottom panel is the and 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. emily: ok, abigail doolittle,

thanks for the update. another deep dive into tesla's report, comparing it to its peers. more on that next. this is bloomberg. ♪

china won't succumb to before talksde, begin the delegation of the trump administration officials. the official told bloomberg patient want except any u.s. that knows the trade gap by $100 billion. stimulus planp's is adding to the debt overload issuance ofo a long-term debt this quarter to

$73 billion and investigating adding another five years cells regular calendar and issue a new tomb of bill later in 2018. rudy giuliani says the president repaid his lawyer michael cohen winner thousand dollars in hush porn actressto stormy daniels. trump was aware of the planet but did not institute a camping violation. to keep she was paid quiet about the sexual relationship with donald trump. 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. this is bloomberg. markets, somehe relief as aussie shares extend gains for the fifth day.

but banks are tumbling in singapore and singaporean stocks snapping a for the rise threatening its top spot in asia. hong kong shares underperforming after an ipo filing expected to liquidity, of supporting the hong kong dollar, while the session low of the hong kong dollar steps a four-day decline. the indonesian rupiah getting punished and heading for the $14,000 level, longest losing streak in 16 months. there cautiously supportive amid dollar strength and elections. the year to date high with dollar falls disappointed that the fed was hawkish less than expected. coming inade surplus wider than forecast for the month of march, but the aussie dollar remains exposed to

downside surprises aspects on an r.b.i. rate hike will see the rate hike perspective forecast for 2019. is a look at the markets in asia. ♪ elon musk is saying he is targeting 5000 model threes and admits it is difficult to predict production. if testing can do to 5000 cars per week the company will be profitable and cash flow positive in the third and fourth quarter. aside from the model three, other models are hot and orders rose in the fourth quarter. we await elon musk to speak minutes from now. but as her overall take given the promises and the fact that

they have been broken a few times over the last year? david: it is more of the same. 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 know elon. the has been the case all along, and getting to that cash flow positivity. if not, the bears and the shorts will have a field day with it. we didn't learn a lot new here looking at all of this in terms gavee fine print, they

some of that back because it seems tesla has not figured it 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 is some excitement some teasing on a new model for an suv, and automation. david: details on production and where they really are. look at question by analysts on the call. emily: elon just said he is 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 be coming 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. if you are still trying to get to 5000 units and eventually 10,000 units, yet to spend -- you have 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. the day of small portable digit growth is over, but that isn't stopping apple as they sold 2 million iphones in the first quarter of this year, and

revenue is up 3% despite global smartphone market rolling 2% in the last year. and that has this investor making predictions. >> it is a new phase of the iphone story, and that is the phase of predictability and lower growth. that is because they have this large $800 million base with a broad line of products. emily: joining me to discuss everything apple is mike olsen and bloomberg executive editor, tom giles. michael, increasing the price target for apple, why? mike: that is just chatter that iphone sales were not as bad as feared and it provides a far better picture than what many painted.

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. price for therage iphone fell, and maybe the mix thet tilted towards -- andd did $99 iphone x a new phone could cost 1400 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

going into was high 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 device, and the guidance the calls for revenue above the consensus implies iphone units estimates in recent weeks. looking at the fall we expect iphone will widen iphone x into three versions. we believe that could drive investor anticipation around a better upgrade rate 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? tom: that is a lot come and remember how much they have

disguised with the costs when you go and buy a new phone. what is 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. that is where the strategy of the wide range of lower end features you find in today's iphone x are ones you will see at a lower price device going forward. emily: do 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? mike: i do think there needs to be a next path of innovation that needs to be identified. we think the next path of innovation is the wider range of iphones that we expect to come in the fall. and as you mentioned, services, diversification, and services revenue accelerated 31% growth 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 -- slightly 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. tom: that new product, when is the tv coming, the car coming?

you didn't hear a lot about home pods or ar. tim cook talked about health care and i'm intrigued with what is in store there. but is it going to be a game changing 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. he talks about apple being a 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

buy netflix or tesla and invest in r&d to build this new big thing. i think it is an idea, what is 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 threat to payment services like paypal and card issuing banks. the e-commerce retailer is going to pass along the savings it gets from card fees to other retailers if they use an online payment service. merchants using amazon pay is 2.9%, but a long-term commitment to the service could mean a lower negotiated price. coming up, despite but the latest move from amazon, square rank 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 reporting first-quarter results. jack dorsey's companies beat estimates with adjusted revenues and saw payment volume jumped 31%. revenue was in line with analyst estimates and the company predicting smart watch is growing over the 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 -- shares 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. we are not seeing margins expand as much as we like to see riot we have seen them execute on their vision of not just being a payments platform, but it one-stop shop of getting loans , food 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. emily: food delivery, businesses, accounting, inventory tracking, which of those is going to be the revenues stream? selina: that they driver is food delivery and they have a big base of food sellers and restaurants. many of their take multi-start retail 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 bitcoin trading.

selina: it contributed. selina: it shows they are putting an emphasis and they want to build a ecosystem for this. i spoke to the chief financial officer on the phone and after , the question of what is the ultimate vision for the card, they see bitcoin 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. selina: 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 is that health care

providers will see data from the electronic medical records and combined that data with data sent from fitbit trackers so they can come up with better tools with people with chronic illnesses that are useful to. 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 watch 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.

coming up, our conversation with melinda gates, the current political climate, and her request for president trump. and the tesla call, elon musk talking about the production of battery packs. here's what he had to say. elon: the rapid increase in output. in the last 24 hours, the factory managed to achieve above 3000 packs per day, per week. reached a peak rate of 5000 cars per week. ♪

emily: in the latest edition of bloomberg 1.0, i caught up with melinda gates. chair of the bill and melinda

gates foundation. and in their annual letter written every year, they expressed a wish president trump to more respect, when he speaks, and when he tweets. melinda: i think the 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 from this president don't represent our views of women in society. i am in the school system a lot all over the country. principals and staff and 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. emily: your name and bill's name have come out as vice presidential candidates.

you have political aspirations? melinda: zero, not, but we want to work with whatever administration 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. emily: you both said you will , butnue to work together what is or biggest concerns about this administration? melinda: this administration is making major budget cuts and the ussage that sends about caring for others and help countries move to filter aspirations of moving from lower income countries?

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 bill and melinda gates foundation. and one more highlight of the tesla earnings call, musk 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 production stations that are poorly suited to robotics. that does it for bloomberg technology, a reminder we livestream on twitter and check us out weekdays at 5:00 p.m. eastern in new york and 2:00 p.m. in san francisco. this is bloomberg. ♪

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