emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, president trump cancels the summit with kim jong-un. and may order new tariffs on foreign cars, inflaming trade tensions as a result. we will discuss state of play with a former u.s. trade representative. plus, highlights from the the tech from paris as president macron gathers the biggest names in technology. we will hear from the head of

the european operation. and elon musk is in hot water after another tweet tirade. why is the tesla ceo taking aim at the media? first, to our top story. president trump canceled the june 12 summit with kim jong-un, pointing to tremendous anger and hostility from pyongyang. mr. trump: based on the recent statement of north korea, i have decided to terminate the plan -- planned summit in singapore on june 12. while many things can happen and a great opportunity lies ahead potentially, i believe this is a tremendous setback for north korea, and indeed, a setback for the world. emily: the decision is likely to have far-reaching geopolitical implications and comes just as trade negotiations with china and the u.s. are in a state of confusion. the u.s. is now investigating if auto imports are a risk to

national security and may impose new tariffs on foreign cars. joining us now, the former deputy national security adviser for international economic affairs. he is currently the vice chair and president of strategic growth at mastercard. michael, thank you so much. let's talk about north korea more specifically. what do you expect to be the business fallout and the fallout for the technology industry more specifically? michael: the challenge is to -- challenges that north korea has posed to the international system have been in during and have been there for several administrations. i think the trump administration is coming to terms with the fact that this is a very difficult issue, a very complex issue to solve and it is not a linear problem that can be dealt with. thedds to uncertainty in

overall region and creates dynamics between ourselves and south korea, ourselves and china that could have spillover effects in the broader economic and geostrategic relationships, but it is going to be one of those context problems that takes a lot of hard work to get back on track. emily: take a look at what mike pompeo had to say about the talks with north korea a couple of days ago and what is in it for kim jong-un. secretary pompeo: he would find american technology and american know-how of real value to his people. it is something he and i had a chance to speak about generally. emily: michael, how optimistic are you that we could see a reversal in decision or that this could at some point eventually happen? michael: i am no expert on north korea. it has been a long-standing, complex -- it has been very difficult to get forward movement on. previous administrations have worked very hard to keep north korea from becoming a global

nuclear threat. i think the trump administration has got a lot on its hands if it is going to try to make progress there. you have a very unpredictable leader on the other side and a lot of interests that are hard to reconcile vis-a-vis china, vis-a-vis the security of having a nuclear weapon, and the concern that giving it up might lead to regime change, and the challenges of regional security vis-a-vis south korea, japan, and china. all at the same time. emily: china had supported the summit from the start. could this give the u.s. and president trump an opportunity to take an even harder line on china when it comes to trade? michael: well, previous administrations have really tried to keep these issues separate. it was important to convey to china that we are going to defend our economic interests regardless of what is happening on the national security side. it is in china's interest that there be stability on the korean peninsula, that to there not be nuclear escalation.

therefore, in our view, traditionally, the administrations have said we should not have to pay china vis-a-vis trade for them to do their own interest on national security. this administration has taken a -- thist view and said administration has taken a different approach. i think this just shows how complex it is when you mix the two tracks, economic and national security issues. we should be focusing on the trade issues in and of themselves, the national security issues in and of themselves. emily: do you think that these frictions, if they continue to escalate, could undermine the technological progress of the united states it self and create a domino of trade protectionism?

michael: you could perhaps second -- separate those two issues. there is a chance there will be an escalation of protectionism. we have seen threats of tariffs go back and forth and those be put on hold while the china and u.s. continue their discussions from last week. today and yesterday, we heard the announcement of the initiation of an investigation, a national security investigation into auto imports and the import of auto parts. all of that could lead to an escalation of protectionism. i think that is different than the role, or this and trout a -- or the centrality of the u.s. in technological development. we have a great ecosystem for promoting technology development and we will continue to make progress on that regardless of the risk of protectionism. emily: what do you think -- what is your take on the official car -- on these potential car import tariffs?

michael: the section 232 law this is being discussed under was really intended to be invoked when there was a threat to our national security. we go back, the last time it was invoked prior to this administration had to do with machine tools, when we were losing our capacity to build machine tools in the united states that were critical to building munitions. tos administration has used 32 to prevent the import of steel and aluminum, arguing that our steel and aluminum industries were weak and that we needed them to be strong if we were to remain at global power. that, i think, will be challenged by most of our trade partners since we import most of our steel and aluminum from military allies like canada or south korea or germany. when you bring it to cars, it is even a more difficult argument to make. it's hard to say we have a weak auto industry. we have a very strong auto industry, some of which is owned by u.s. companies, some of which is owned by foreign companies,

many of which build their cars in the united states for import and export. i think the challenge here is we have always tried to limit the use of this provision in law because we were worried other countries would use it to say anything is a national security issue. if we open to the -- the door to that, if we open pandora's box two countries invoking national security as a way to getting out of trade obligations, my sons is -- senses we are going to find ourselves in a very difficult position with other countries closing their markets because they think food is a national security issue or other manufactured products are a national security issue and we won't you able to get our products into other markets and that hurts jobs back here in the united states. emily: take a look at what the us trillion prime minister had to say about the onset of a potential trade war. >> i certainly think we need to be vigilant and do all we can to minimize the threat of a trade -- the risk of a trade war.

i don't think it is likely at this point in time. i think the united states and china have indicated pragmatism. they are having discussions, and that is a big positive. emily: michael, having been through this before, how likely do you think a full-blown trade war is? michael: i think the most likely outcome is that we avoid a trade war and that there is some sort of agreement. the question is what that agreement will look like. the administration has sent two messages to china. one is that we care about the bilateral trade deficit and they should by more goods from the united states. the other is we want them to trade their policy to protect the theft of intellectual property from u.s. companies. those are two very different issues. the first is the one they have been negotiating over with the

chinese delegation in washington talking about what products they might buy in greater quantity. the second one is much harder to get that because -- to get at because china has doubled down on their 2025 objectives. they have made it clear they want to be globally dominant in a number of key technological sectors. it would require backtracking from that in a way that might be difficult to negotiate. my sense is if they promised to -- can give president trump a win on the bilateral trade deficit by promising to buy more soybeans from the u.s., airplanes, tractors, that that -- and less of all that from other countries, that will be enough to avoid a trade war. that remains to be seen. emily: i want to ask you about zte, the chinese smart phone maker's fate hangs in the balance. president trump had talked about looking for alternatives.

this was not received well in congress. which line should the united states take on zte? michael: i think it's difficult to take a law enforcement issue, which is what the zte issue was initially almond this is a company caught violating export control laws with contraband and documentation talking about how they were going to mislead the united states and other governments to avoid being caught, to now say we are willing to pull back on punishment of zte, on a law enforcement matter, in order to make it part of a larger trade agreement sets a very bad precedent. it sends a strange message to law enforcement officials that the laws they are working to enforce could well be put over to the side for some other economic gain in the trade area. i think we have to deal with the zte issue on its own feet, but -- whatever the appropriate

punishment is, whether announced or revised, but not make it a chip to be traded away as part of a broader trade negotiation. emily: and yet, president trump has several times talked about his strong relationship with chinese president xi jinping. in the same breath that he is talking about zte. what do you think about the signals we are getting from the chinese government? they have cut import duties on a range of consumer goods. what message is that sending to the united states? michael: i think china wants to reach a deal with the trump administration and with the united states. i think they are being pragmatic about it. as one official told me a year ago, they understand how important it is for president trump to have tweetable deliverables and they want to live him those, but they want to know what -- give him those, but they want to know what the price actually is.

it is important to note that the trump administration, in flagging the issues china poses to the world trading system, these are real, legitimate issues, and the trump administration has been successful in building a broad consensus in the united states and around the world that these are issues that merit attention. the question is how to deal with them and whether we can channel chinese efforts in a way that doesn't impose a distorted affect on the global economy. for example, make sure they meet their wto obligations. obligations where, even when they have been found to be in violation, they take action to put in place policies that bring them into compliance. those are the sorts of things we ought to be doing with our allies, in collaboration with our allies, to put pressure on china to live by the rules of the open rules-based system. emily: michael froman, former ambassador for the united states, thank you very much. an in-depth conversation. a story we are watching, the

cryptocurrency market is facing further regulation scrutiny. an investigation into whether spoofing, or flooding the market and being used to trick traders into buying or selling. people familiar said. coins being examined include bitcoin and ether. coming up, green sky hits the public market at a time when online lenders aren't getting much love. we will hear from the ceo next.

emily: online lenders have not gotten much love from investors in recent years. but pimco backed greensky is banking on a different trajectory. it just went public on nasdaq. it raised $871 million in its ipo. the online lenders sold at $23 a share, driving its market value up. bloomberg's ipo reporter caught up with the greensky ceo. is a digital commerce power source. we power commerce at the point of sale for a growing ecosystem of merchants and banks. we now serve almost 2 million consumers. there is a large and growing opportunity to accelerate commerce at the point of sale. when i think of what the public

market is used to in terms of past lending platform companies, lending club and on deck, those stocks effectively spooked the market for your industry. how did you differentiate yourself and distance yourself from the two narratives that have not been well received by the street? david: we are about commerce, not credit. we enable over 12,000 businesses the ability to offer instant credit to almost 2 million consumers. >> so, you got your start mostly in the home loan business. for consumers looking to do home improvement, you are moving into elective surgeries, that is where you are focusing now. where can investors expect you to push next? david: we have tremendous opportunities for growth. we have our he had tremendous success in home improvement, we now have a rapidly growing

elective medical business, a growing e-commerce business. expect to see more verticals and more announcements to come. david, your company is based in atlanta. i grew up in dallas, i know how folks love to improve their homes. being outside the valley, being outside new york, was that a strategic decision for you? did that help you in terms of how you thought through your company's development of a product over at greensky? david: i am grateful to the people of atlanta, georgia. i moved their 22 years ago. what an incredible place to do business, to build a culture of service. i am really pleased that when we started this company, it was all about creating value for our customers, our constituents come our people, and i really am gratified that after all these years, that is being recognized. we look forward to the years ahead. >> when i take a look at your

financials, you had about $140 million in net income last year. profitability continues to be a surprise for some startups, but you managed to get there. what was the thinking like? we see a lot of spending for growth at the expense of the bottom line. how did you manage your company in the past years you have been operating to get to profitability pre-ipo? which again, seems to be a rarity these days. david: we think that cash flow never goes out of style. when we started the company, my -- 12 years ago, my partners and i bootstrapped it. we took every dollar we ever had. we borrowed money for years and years, so every dollar mattered. we were not spending someone else's money. we were investing our own. we were dedicated to creating value for our constituents and our customers. but when you have a technology

platform, which is what we built, and you create so much value for each member of our ecosystem, you can build a business, grow a business dramatically and generate profit. >> that ecosystem being customers, the banks that are lending, and the emergence. -- the merchants. as you think about expansion and e-commerce, how much manpower, how much people capital and sales and marketing do you want -- have to spend to get more of those three counterparties onto the platform? david: what is wonderful is now we are experiencing a tremendous network effect. frankly, a majority of the businesses businesses that join our network are referred to colleagues, friends, and sometimes competitors. we are certainly gratified by that. we spend less than 5% of our revenue on sales and marketing. that's what happens when you

have an ecosystem, a network, and a volume proposition that really creates value for businesses, consumers, and our bank partners. continues about the potential turn in the credits article -- cycle. how do you think through where we are in the cycle right now? what are you doing to prepare greensky to keep running your business if we see a negative turn in the credit cycle? greensky greensky is not a lender. we are not a balance sheet. we are a technology platform. we know not if, but when a recession happens, commerce will continue, purchases will continue, and in fact, credit will become even more important to consumers. our bank partners are committed to growing through the cycles a quality, profitable, durable business. emily: that was our bloomberg 'sality reporter with greensky ceo. coming up, the world's second largest pc maker posts the biggest jump in sales in almost two years. we will hear from lenovo's ceo next.

this is bloomberg. ♪

emily: in the latest quarter, lenovo posted its first digit percentage increase in sales since 2015. that's smartphones struggled for relevance and rivals like hp. bloomberg's stephen engle caught up with the lenovo cfo and asked about its presence in the smartphone market. >> we are aware we did not do as well as we expect. nevertheless, i think we saw a solid q4 this year. when you look at the business, i think generally, the numbers show a decline, but if you look at the core markets, latin america, we see top line with profitability. north america, we see significant growth in units. emily: twitter has rolled out stricter rules on advertising in a bid for transparency.

this ahead of the midterm elections in november. the company will require advertisers running political ad campaigns to identify themselves and certify they are located in the united states. coming up, avoiding the valley. where to look for stable tech investments outside of the obvious. int is next, and later paris, we hear from bloomberg's head of europe about the company's operations in paris. and we will hear about discussing the plans for driving tests after a fatal accident in arizona last march. >> for us, it brought home the idea that safety has to come first. as it relates to that tragedy, we have grounded our autonomous fleet. that was a decision we made. >> any sense of when you will start driving again? >> it will be within the next few months.

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emily: this is "bloomberg technology." i am emily chang in san francisco. it has been a volatile year so far for big tech. at the performance of the typical tech stalwarts like facebook, amazon and alphabet. my next guest says silicon valley is not as attractive at f the typical tech stalwarts an opportunity, given the volume and overvaluation of investments already. instead, he is looking at long-term investments that can determine and weather volatility. his portfolio has companies like lyft, magic leap, fan dual and more. david walsh is here with me in studio. thanks so much for being with me in the studio. why not silicon valley?

lenovo -- david: there are great tech companies being formed and there will be for a long time. as we have looked at it, there are a lot of companies and other areas in the u.s. and abroad that are starting to produce great technology companies, too. to your point, we have been spending a lot of time on planes getting to know those other geographies and businesses that are there and learning there are great entrepreneurs looking to build long-term business through multiple cycles. that's one of the things we really look for in business. emily: where, specifically, do you see potential? david: we have been spending time in areas like denver, salt lake city, seattle, even down in l.a., out in the east coast of florida, austin, texas. places that have traditional good tech depth in the environment there that are starting to build a bigger businesses.

emily: what are you investing in? you are not doing early stage, pre-ipo. david: we are looking for three key attributes. one thing is, we want businesses we have seen for a while and have seen them execute through multiple cycles up and down and have had an opportunity to watch them show good product market and fit in with what they do. what we are also looking for our businesses where the management team and existing investors want to build something large and are not trying to do a quick flip. with that ambition, we want people that are disciplined. we want them to be able to look at a business model and say not only will this business model work when things are going well economically, but can weather a storm if there is an economic downturn. we apply those across multiple industries, multiple technology types when we are looking for things. emily: you have been doing this for about a year and a half. any specific learnings -- it's

not an incredibly long time. success is challenging. lenovo sure, i think the learning, the way we are looking at things seem to be resonating with other entrepreneurs. when we find the right team that wants to partner for the long haul and described to them the things we can bring to the top of the platform, we realize we -- they realize we can help them accelerate potentially and solidify their ability to be a big market leader. the learning for us has been find the right teams and the right businesses going through a long haul and focus energy there as opposed to what some investors have done and try to time the market or be a quick return. that has never been kkr's way and that is not the way we are doing our fund. we are really trying to partner with businesses for a sustainable long outcome. emily: you invested in lyft in 2016, this was before uber exploded. now, uber is coming back and new leadership. are they losing market share now

that uber is back on its feet? david: we haven't seen that. i won't give specific numbers, mostly because i don't have that, but we think they are doing fine from market shift gain. what we saw in them was a management team that was very dedicated to continuing to grow a lot and wasn't looking for a quick exit. that has really played out. we have had fortunate tailwinds behind us in different ways, but i would say the thesis of them coming and working with us and other investors to build the business in the long haul was a big thesis and that has been working well for them. emily: what about a company like magic leap, which has raised a ton of money, but has no products on the market yet and it has been a few years? david: that was a little bit of an anomaly investment for us when we started getting into growth three or four years ago. it did predate me. occasionally, we will do something where we think there is a huge market and a transformative technology where we might take more of a passive role.

that was really more of a historical investment. most of the things going forward, we would you less likely to do that and we would look for things that have better already product fit. emily: if they looked so good, why haven't we seen anything from them? david: not close enough to the inside of magic leap to give you insight, but they continue to make improvements on the product and the technology. i think they rightfully wanted to wait to expose something once they were sure it was consumer ready. emily: you are also an investor in sandal, which had a huge victory with the supreme court ruling that the ban on sports betting is unconstitutional. billionompany at one dollars plus. is that a good exit for you? david: that combination is not about the exit. that is about building something that will have long haul rule being the

overturned, and the daily fantasy market continues to grow. we are not exiting the business with this merger. we are joining together, holding the stock as a combined entity and looking to grow it over time. then, we will have an exit when the markets value that business where we think it can go given tailwinds. emily: talking about volatility, does this mean you would be allergic to crypto? david: i don't know about allergic to crypto -- probably a little skeptical of it being a long-term investment that would be right for us. that is mostly because when we look at things, we are mostly looking at fundamentals and where is the business based day today on fundamentals? with all of the ups and downs, crypto's toof fundamentals -- it's tough for us to get our heads around that being a core asset. emily: how is the competitive landscape changing for you? there are the typical hedge funds, competitive funds, mutual funds. they are also looking outside silicon valley.

david: for us, it is broken into three parts. the early venture that is starting to go later stage, the crossover mutual funds and hedge funds, and then there are more traditional growth players. the early-stage guys, we don't tend to see much. they take more product risks. crossover guys tend to time and exit may be a year or two before hand and don't really take an active role in the business. we don't actually see them very often. core ofe there is a investors trying to invest in larger businesses that still have a lot of runway. that core set is not as big as people think. especially those who want to provide real value and added services in the way we want to do with our businesses are pretty limited. there are competitive steps and they are all more geographically dispersed. we are actually finding we are competing pretty well on the core set of firms we see as our competition. emily: you talked about staying away from particularly high valuations. do you think the tech industry is reaching a plateau?

is it a bit bubbly? is it going to pop? david: i certainly feel like valuations are probably on the higher-end than the lower end of where they are going to be in a cycle. whether we are at the top of a bubble, i don't know that i am the best person to guess on that. what we do know is we stay true to the fundamental metrics of valuing businesses. we look at things like the right ratios of where businesses have been over the long haul. in some of those cases here, in the silicon valley in particular, those have gotten out of whack. that has driven us to go to other geographies or to be disciplined in the other areas we have looked at and develop a relationship with companies where yes, you will be elegant higher valuations, but does that matter? what matters, is can you build the best value over time. we will come in with the right investor and who can give us the best outcome over time. emily: dave walsh, take care. thank you so much.

all right, a disturbing story about amazon's alexa sparking privacy concerns. a couple's private conversation was mysteriously recorded by their amazon echo and sent to one of their contacts according to a report. the couple found out only when they received a phone call two weeks ago from one of the husband's employees telling them to unplug your alexa right now, you are being hacked. was "anold that it extremely rare occurrence." coming up, hear what the founder of ethereum thinks of cryptocurrency regulation. before that, take a listen to french president macron telling the crowd how he wants to level the playing field for startups competing with tech giants. >> a lot of startups are competing with large corporate and they tell me, i pay tax in france. we are increasing those taxes,

fine. but it's not fair for somebody else to pay no tax. that's why i am a strong supporter, and i will fight to the end for the tax of big players. i think it's fair. it's good for everybody. it is sustainable. ♪

emily: after years of losses, uber has turned a profit in the first quarter of the year -- sort of. boomer posted a $2.5 billion profit after accounting for the value of selling its southeast asia business and its russia business. without those windfalls, it would be a different story. uber had a loss of $3 billion before other expenses. speaking of uber's financial status, the ceo took to the

stage at the tech conference in paris to tell people that uber will be profitable one day, he just can't tell them when. he also announced two new initiatives, one involving a paris-based flying car research lab and the other one in passenger safety. we found out more. >> we wanted to make two big announcements, one that has to do with the partnership with the insurance provider that aims at bringing some of the social safety net to all the drivers and passengers using it uber. the second announcement we have made is an investment of 20 million euros in france, here in paris, in partnership with one of the leading engineering schools, that aims actually at developing a research center on the field of mobility and how we

take it from two dimensions to three dimensions with flying drones and flying taxis, as we call them. >> before we get into the excitement of flying cars, let's stick to the driver part of the business at the moment, because the you think this is enough to assuage the issues about the gig economy? will this be able to show that flexibility can be teamed with protection for the workers? >> my sense is there is more to do, frankly. it is not just something about uber, but the industry, but this is something i am very proud of at the moment. my sense is we have not done a good enough job when it comes to listening to drivers. we had a bit of an approach that was growth at all cost and we are trying to keep more responsible growth. that starts by listening to drivers. one of the things they told us is yes, we value the flexibility you bring to our lives. but at the same time, we want to have a social safety net that

exists in the traditional employment work. the growth of independent employment comic it is important to make that safety net and that is about as partnering with government and the whole sector so that drivers feel protected and have the peace of mind they are after. >> what about protection of the user, the passenger? because that is something that perhaps the u.k. called into question when the london tsl worried about safety standards. you are looking to appeal that particular decision on your license. are you confident about it? >> safety of the users is our number one priority as a company. this is one of the moves that our new ceo made when he joined the company a few months back. when it comes to the situation in london, i think the refusal of the license we got a few months back is a good reflection for us of some of the mistakes we made in the past and that was for us-- great catalyst

to look at ourselves and how we can be a better partner, rebuild the trust that eroded over time. with that in mind, we made significant changes to how we do business. putting integrity at the core of everything we do. i am hopeful that with those changes, we will be able to get our license back, but it's up to the court to decide and there is a hearing in june, very soon. emily: uber's head of ema there. while at the conference, caroline spoke with the ceo of consensus systems and the founder of the theory him eumptocurrency -- ether cryptocurrency platform to get his thoughts on the news that the u.s. department of justice has opened a criminal probe into the possible manipulation of bitcoin and other cryptocurrency. >> as the software company focuses on building infrastructure and software applications on the decentralized web.

we don't focus too much on cryptocurrencies. that said, it is really valuable to have regulators in the space taking a look at some of the in muchted practices less regulated situations, whether with respect to inptocurrency and they come my opinion, should remain unfettered because there are tremendous use cases, whether tokens representing equities are other kinds of asset, and how that maps into securities law. we are very happy to see the work that regulators in the united states and different parts of the world are doing. do you think there has been over manipulation? joseph: i am not deeply aware of the activities in the cryptocurrency trading space. we just don't do that sort of thing. there certainly are price swings. it could be just because the

total value of these monetary basis are small and it is very small and lots of news is coming out, but traders are sophisticated and traders will do what they can get away with. let's talk about the conversations you are having with the regulators at the moment. what are the ash -- questions being asked? what are the key issues you face and the challenges you have to overcome? joseph: we are mostly focused on securities law. we are able to issue investor tokens or tokenized securities. we are also able to issue consumer utility tokens that would not be considered securities. we are focused on getting clear definitions and helping regulators around the world understand there are network business model that benefit from membership tokens or tokens that represent consumption of various

-- scarce resources, and as long as these projects are selling tokens to token buyers that make use of the token and they are not selling in large quantities to speculators who are hoping to make money by the actions of others, that is a good, clean definition of a consumer token. caroline: and that is what ether is? joseph: that is absolutely what ether is. we did about seven months of deep legal homework. it is crypto fuel, one of the the first crypto commodities in the decentralized web. you can do transactions, automated agreements, smart software objects in order to pay for all the shared resources, you need to pay with some of this crypto fuel. so that token represents essentially a way of offering

these shared resources to the world. was lenovo --consensys systems's founder. coming up, elon musk on another twitter tirade taking crack that the media and more. we will discuss next. this is bloomberg. ♪

emily: just weeks after elon musk's bizarre behavior on an earnings call, he is back at it on twitter. the tesla ceo is out with a series of combative tweets this week attacking the media over critical news reporting and more. here to dissect that, as well as what else musk is talking about, we have bloomberg businessweek's max jenin who covers all things tesla and elon musk. i want to start with a couple of these tweets. "the holier than thou media companies lay claim to the truth but publish only enough to sugarcoat the lie is why the public no longer respects them."

a public site where the public can track the credibility score over each publication. thinking of calling it pravda. what is your take? >> i have not checked my pravda score yet, but the bottom line here is this is part of a long-running pattern with the -- with elon musk that goes back to the beginning of tesla. he has often complained that the media was in the pocket of the oil industry and detroit. i think what is happening here is you have a series of news stories, none of which are super bad for tesla, but when they start adding up, and piling on the fact that tesla is in a mode that musk has described as production hell, it is creating pressure and perhaps leading to this kind of twitter rant. emily: some of the things he is not so happy about the media

scrutinizing, cash burn. in your gtv library, you can see a chart there that shows cash burn, which is quite extreme. also, cars produced not looking great. max, talk to us a little bit about the big problems elon musk does have to worry about. max: i would say the most significant thing that happened over the past couple of days was consumer reports, which was widely respected as a kind of arbiter of quality in cars, came out with a report criticizing the braking of the model three. it was kind of a small issue. tesla said they were going to fix it. that's one thing. there has been this continued back and forth with various labor groups over conditions at the factory. in fact, there was an nlrb complaint filed over an unrelated tweet. and as you say, on top of that,

they are trying to get as many cars outdoors as they possibly -- out the door as they possibly can. again, it's a kind of soup of stuff that creates pressure on the company. emily: he also seems to have picked a random date, march 15, to unveil top -- tesla's model y, and then he stuck with it. what do you make of that? max: the model y is the suv version of the model three. model three is there smaller, lower end luxury car so the model y, you would imagine, would be kind of a compact suv, which is a very popular class of car, and something tesla needs to have in the long rum. the march 15 date he said that it sounded good and decided to stick with it. has since put out statements -- or elon has, that it could shift a little bit but it is a pretty good guess.

what they have said is that production would start by 2020. you have to think that's around the time they would want to launch it and start taking preorders. i wouldn't make too much of it. one thing that has allowed tesla to maintain this very high value -- valuation relative to its revenue and lack of profit is the fact that there is this continuous stream of exciting new announcements that mask and -- that musk and his team have been able to put out there. model y becomes important because if they are able to create a lot of excitement around this suv, that gives them more runway. allows them to borrow money for nothing and get whatever production problems they need to get fixed, get them fixed. and hopefully down the road start making money. emily: all right. we will see you -- see what musk does tomorrow. that does it for this edition of bloomberg technology. tomorrow, everything you need to

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