>> i am brad stone in for emily chang and this is "bloomberg technology." we just became a real car company, those of the words of the tesla ceo after reaching his goal of building 5000 model 3s the final week of june, reaction and analysis. again, going public offering a cash and stock deal. entering a new stage of a

multiyear turnaround plan. more institutional investors diving into crypto. how one of the world's biggest --hanges plans to sign engineeredry, tesla a late quarter production first for the model three, it delivered fewer sedans in the second quarter than expected but the late surge has thousands more cars buyers. tesla for the first time exceeded the target of building 5000 model threes in a week. ivan and max. someone -- somewhat muted reaction on monday on the news of tesla even though it across the benchmark, why the understated response to the tesla news today?

>> the stock is down because of the trade issues, more than meeting of the milestone. they have now produced 5000 model threes on the week is very powerful and positive. >> the big question is -- is it sustainable? cars is ars, 5000 great accomplishment but can they routinely make 5000 model threes every week? >> i believe they can and the factory has enough capacity to produce the cars. they are in a facility that wants to produce over 1,000,300 cars when it was a general motors factory in the 1970's. they have one of the most advanced auto assembly lines ever made. i think they will be able to

sustain the production level and this does take tesla to the next level of taking it from a niche car producer to a mainstream auto manufacturer. >> max, you have covered tesla four years, elon musk said he spent the night in the factory. they can't take a break? a lot of pressure on the company , can they keep it going, is this the turnaround tesla watchers hope it is? >> you hope the way elon musk has been living, seems like he has been up all night and sleeping in the factory, you hope you will take a day or two and rest. because all of the tesla working that been have been working nonstop to hit the milestone. -- have been working nonstop to the milestone. what they are doing now is not sustainable but as time goes on they will improve the robotic manufacturing line and that will

get them up to around 5000 cars. they want to get the same production number without looking and feeling like you have been punched in the face. which has been what is happening to tesla. emailed elon musk employees, we just became he real car company, ironic considering their market cap exceeds other traditional companies like ford and general motors. why? >> because the model three production level is a transformational car for the company, it takes them from a producer, which started producing and selling 20,000 cars a year and now 100,000, 12 months from now, if they maintain the model three production rate, 600,000 cars per year, which makes them a real company. they will fill strong demand.

and add two production of the truck next. aey view themselves more of technology company than a car company because they sell solar panels and the battery. customer are a tesla who has had an order for a model three for a while, does this concern you that your automobile was made in a tent outside the primary factory? have they cut corners on the quality of these automobiles? >> only time will tell. overall quality of tesla cars are very high, customer satisfaction is very high, there's yes and of the car is very high. is verysiasm of the car high. it is the complexity, power, design, they have had very few mechanical or technological

issues. carsfix and monitor the and 60 software issues by pushing software update from satellites. they are always adjusting cars to -- that had been on the road for a long time. >> elon musk's twitter feed has been a circus over the past few weeks and months. does the company have to grow up or will we be entertained by he and pushed back on some of their critics? >> the railcar company thing, i think he was joking -- the real car company, i think he was joking, that was a dig at skeptics. one thing noteworthy about this timef 5,000, the first elon musk has paid attention to what wall street and outsiders are saying. they said you have to hit the milestone and he said, ok, i

will do whatever it takes the -- whatever it takes. we will build this giant tent and do everything we can. that is interesting. it strikes me as a concession he has made to wall street and the outside world where he has to start acting more like a conventional publicly traded company. >> ivan, you mentioned upcoming milestones, the benchmark they will have to meet. well they have to go back to capital markets and raise more money to do things like a truck? >> absolutely. they need to and they should. however, the meeting of the 5000 car milestone will make it easier. if they become profitable by the end of the year or on track by the end of the third quarter, it will make it easier to raise capital. but yes, building cars is a capital-intensive process and

they will have to, and they timed raise money, every they have come to the capital markets, they have been well received. i think they will come at the end of the year. question, we started talking about the underwhelming market reaction to tesla meeting its goals, past glowalo, -- has the halo, faded, are the markets looking at tesla differently these days? >> i do not think so, the reason for the muted reaction was the 5000 milestone was a secret and by design, tesla through emails from elon musk, and they were telegraphing this for about one week. people knew they would hit it. a question of how they would do it. we still do not know how they got to the milestone. you have to think this is a big

moment for elon musk and tesla. and electric vehicles in general. 5000 cars is nothing to sniff at. chafkin, thank you both for joining us. a story we are watching in an effort to cut costs, hbc laying off employees in taiwan. a quarter of its total staff, the scaling down comes as the smartphone maker struggled to hold onto market share from apple and samsung and newer players. htc offloaded 2000 engineering jobs to google as part of a larger deal with the company late last year. coming up, what is old is new again, michael dell telling the company he built back to the public, next. if you like bloomberg news, check us out on the radio, listen to the radio app on

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the world's largest private tech company is going public, again, dell planning to return to the public market i find it stock in a cash and stock swap deal at $22 billion. in january of this year, the ceo and founder michael dell preach the benefits of remaining private here. >> as a privately controlled company, your time horizon is different. you start -- you think about

your business in years and decades. reconceptualize how you are investing at what is the real priority. koad: bloomberg technology mi joins us in the studio and opinion columnist brooke joins us from new york. how is dell going public? >> a direct listing more like a spotify. dell gets the benefits of going public with none of the drawbacks, not seeing michael dell going on a roadshow show and convincing investors you should invest in my company. it gives him a tremendous amount of control. it helps simplify the corporate structure because tracking

stocks are unusual, they are meant to mirror the value. that.s rid of it has more direct control over vmware and gets to flood on the public market and get evaluation benefits, share benefits, without traditional drawbacks. brad: you call this in your opinion piece, the path of least resistance, why? >> the thinking among the m where shareholders, they want this to remain the same independent, publicly listed entity and they got that. the special dividend that will fund the cash for the tracking stock. they pushed hard for that and were very vocal and wanting vmware to remain an entity they could invest in as a standalone. that, it is not the best

outcome for all involved. i think this is more of an intermediary step. it helps them simplify the structure but does not go far enough in my opinion. vmware -- as much as push backrs wanted to on being a part of dell but it is a part of dell and a majority shareholder, it calls a lot of the shots of the company and most docs with that dynamic trades at a discount. dell we heard michael singing the praises of being a private company law long ago, what changed? nico: he was singing the praises in april of being a private company. what has changed, if we consider the timing, comes five months after dell said it was considering the strategic options and about five years after they started the turnaround, when it decided to go private. it's all the hardware landscape was changing around it and needed to figure out how to catch up. it saw the easiest way to do it

with the least amount of scrutiny possible. michael dell is feeling more confident that he has an inquiry. the last quarter, they saw double-digit gains, particularly in servers and storage. it has been a good i.t. spending environment after years middling or declining. companies.s by he thinks now is the time to get all of the benefits, which could include m&a benefits. he could do a share swap in the future rather than paying cash. that is a precious resource and they do not have a tremendous amount and may have to pay down about $40 billion of debt. brad: it seems like we have seen this movie before and dell ,ellyflop as a public company particularly as the crowd transformation swept over the enterprising computer space. are you confident it is different this time around? brooke: i think the proof will

be in the results. we have to see how they handle this. this does not solve a lot of their problems. a lot of the reason they were looking at these types of transactions in the first place is because the company is burdened with significant debt from its buyout, from the 2016 c and needs to deal with that, thinking was it was used the m where balance sheet do shoulder the burden but that is not happening. not without it is an option -- this is more of an intermediary step than a long-term solution. brad: what is the next step? a potential merger with the m where, direct ipo -- the m wear,, direct ipo -- vm direct ipo? >> you are talking about a material discount to where the shares -- elliott is one of

them, carl icahn says he is a holder of a tracking stock, will this lead dust be good enough for them? brad: talk about the competitive environment dell faces with h.p. clouds -- now hpe, the cloud. nico: hpe is one of the closest companies, dell in the short time, should he get past the investors and get this done in the fall, trade higher and with more momentum than hpe, which has been challenged. part because of the close integrations with the software makers. dell leads the market in so many categories, when you think about hardware. they are leveraging the vmwear as much as possible.

when it comes to public clouds, dell probably will not see their and should the i.t. spending environment cut back for the hardware vendors, dell stock will take a beating. brad: ok. thank you for joining us. coming up, e-cigarette maker jewel is seeking more than $1 billion in a funding round, how they are expanding want traditional tobacco fades? a programming note, tune into the boston pops fireworks special this fourth of july, watch live in the u.s. at 8:00 p.m. eastern on bloomberg tv. listen on bloomberg radio or catch it anywhere on bloomberg.com. ♪

brad: electronic cigarette starter jewel is targeting the global market according to people for me are with the matter. the funding round what value the company at $15 billion, making them more viable than some of the biggest names in some of the valley, huge jump for avalley, y that is less than three years old. thank you for joining us, libya. -- olivia. what is this company and quite are they raising so much money? >> jull was a replacement to the tar burning cigarette, the people out of sanford said they will create this -- stanford said they will create this which is better for you than a traditional cigarette and does not have the tar. it has a vapor and you inhale the nicotine. they thought they were doing something great for the world that teenagers love jull and it is popular in schools,

especially among high school students, a controversial product. a lot of investors not willing to invest. because they are post money2 billion, over $16 billion. 68% ofull has captured the e-cigarette market, something philip morris is trying to get into, what did juul direct? -- do right? >> they have 68% of the date market and replacing -- vape market and replacing traditional cigarette with the moorestown, british american tobacco down, japan tobacco down about 15%. e-cigarette are growing, the group 3.5% this year. cigarettes are going down, they went down 4%. people are not quitting

traditional cigarette, replacing them with vaping. is asking them for more information about how juul markets to teenagers. what are there regulatory challenges? >> fda said we need to know more about the product, what are the health concerns, provide us with your research, and tell us about your internal marketing materials, what were you talking about in meetings and are you trying to target children? that is an audacious act. they say they do not target children and you have to be 21 to purchase. brad: even though they can be colored flavors? olivia: they have tapered that down, other companies, one called candy pen. juul is successful but other vague and companies -- vaping

companies have more kid friendly flavors. brad: the health questions they will get? they could say this was a healthy alternative to traditional cigarettes. olivia: some health experts say it is not that and much better that -- not bad and much better than other cigarette -- traditional cigarettes. some people say it causes popcorn long. -- lung. but it is a new product and there are a lot of questions but it is extremely popular. this company is on a rocket ship. brad: they are raising $1.2 billion, what will they do with it? olivia: expanding outside the u.s., it is sold in israel but they will expand further, they want to go to asia and south america. brad: thank you very much. coming up, back to tesla's newly released production figures,

hitting the milestone could be a double-edged sword. we are livestreaming on twitter, follow our global breaking news network at tic toc on twitter. this is bloomberg. ♪

this is "bloomberg technology." i am brad stone in san francisco. elon musk reached the goal of building 5000 model threes in a week, he constructed a giant tent within a similar life and that has the challenges of winning over doubters who say this is not sustainable. joining us is liam. are you among the doubters? >> some skepticism, yes. brad: they have hit the threshold. elon seems like he pushed the

company almost to the breaking point to get there. is it sustainable? their 5000 pert week target like they said they would. bulls will take comfort. it misses the bigger picture. carmaker,ofitable which they have yet to prove they can be, they need to have sustained high volume, high quality production. reaching the target in one week at the end of the target -- quarter, a repeat of what they did at the finish of the third quarter and does not prove that. it is a moment in time but it does not prove they are on sustainable footing. brad: the week at the end of the corner -- first week at the end of the corner -- are you confident they can do that now at the 5000 model three per

week? >> tough to say. going on the last three quarters, they have hit burst weeks at the finish of the quarter and it says the average for the next quarter. based on that, you think they may be able to reach 5000 per week. they talked about getting more to 6000. the issue is -- can they do it profitably? highlighted, the second assembly line, made up of 1000 cars in the last week and if they are working 24/7, which they seem to have been doing, that is one car every 10 minutes. nowhere near what you need to be getting for a profitable mass-market carmaker. brad: tesla was so focused on the 5000 cars per week goal, it

came to define what observers of tesla were looking for. what is the next milestone or benchmark they will grade elon's performance at tesla? in a month.t we will see the cost of the burst in terms of profitability and cash flow. the big one is, they insist they profitability and positive cash flow but not clear what appeared that is the key. it needs to show it can turn a profit, produced a mass-market car, and become self funding. self funding is the key. brad: profitability and self funding. thank you for joining us. is starting aer

new chapter with his new company, he uses similar a.i technology as mobile but for those with visual impairments. mark barton and vonnie quinn talk to him to explain how the company came about. >> we found it this company eight years ago -- founded this company eight years ago and we wanted to assist visually impaired people and built a small device, the size of a finger, touches to the arm of any glasses. it can read to you, identify faces, credit cards, millions of products. test,prince william had a what did he think? >> he was amazed. we try to identify his face and it worked perfectly. bek: you think this could bigger than mobileye.

there are 350 million visually impaired and blind people over the world, not good news but a big market. ,ecause it is a reading device it connects people, 3%, 5% of the population can use it. can still bens who that get tired quickly can use the device. we combine the populations. over one billion people can be assisted. vonni: it has a small camera and microphone. what is your immediate -- intermediate term goal, race more money, -- raise more money, sell the company? build the company to make it a real company.

we plan to do a round a year from now. round, weafter this will start preparing the company for ipo as we did mobileye. it is a process of building a company as a real company. vonnie: what is next for the product? you have this down, do you expand on that? what are you working on technologically? >> it is endless development. we have just done the basic features. the next development will be facial recognition. you hold a document and will ask the system what is this? they will tell you it is your phone bill. the system will tell you. you put the document and that is it. it is endless development and we

will improve more features and more intuitive interface the user will be -- the reputation of autonomous drivers has taken carnt after a self-driving killed equestrian. does that -- killed a pedestrian. does that damage the future where we have driverless cars? anymore.ot in mobileye devotedpert who has most of my life in mobileye, i vehicles areomous so big nobody can stop it, maybe some delays. the benefit is so great it will eventually be part of our lives.

20 years. i believe some of the country's it will be illegal to drive. drivers are responsible for 90% of accidents. >> that was the mobileye co-founder. the global solar market could be something that could do something this year it has never done before, shrink, solar 95 gigawatts,made down 3% from a year earlier based on the most conservative of three scenarios monitored by bloomberg nes. one potential reason is in june, china decided to hit the brakes on new solar installations for the rest of the year. coming up, one of the world's largest cryptocurrency exchanges is going with with another service. details on the new customers next. this is bloomberg. ♪

lyft is buying a company behind the new york bicycle 'srvice, it follows uber purchase on a similar coming. it is extremity with electric bicycles but faces increased competition from scooter companies. terms of the deal not disclosed. coinbase last week accepted its first deposit and is now open for business. the cryptocurrency exchange says can hedge funds and family offices have begun using the

service, the goal to safeguard digital tokens in a manner similar to traditional securities. to have 100 large institutional customers by the end of the year with as much as $5 billion in assets. joining us with more details is white, and inam new york, our executive editor and host of what do you miss, joe weisenthal. everyoneine terms, not is familiar with what custody means, what cold storage means, talk about what you have made live today. >> coinbase custody launching today represents a way for institutions to store their cryptocurrency in a safe and compliant manner. when people look at the space, there is a history of security incidents, but at coinbase security is our number one goal. as we moved into the institutionalization of the space, large hedge funds,

brokerages said we cannot begin trading cryptocurrency until we have a safe way to store it. we announced at the end of last year, we would build coinbase custody and we launched it today and already serving 10 hedge funds. >> cryptocurrency prices have had a tough time, have institutional investors stayed out because of the absence of this kind of service? will this rectify the rough waters? >> i think it is the opposite. with the recovery, we saw price of bitcon billy tubbs $20,000 at the end of last year and market cap -- reached $20,000 at the end of the year -- last year. what organizations once thought as a train they may have missed, they feel they have an opportunity to get in. we are watching that. brad: do you agree?

if you are a big institution, have you lost your appetite for cryptocurrency? joe: i find that answer to be interesting and one of the most important questions or important themes for the whole space. no doubt that the second half of 2017, the last few months particularly, so much interest in that institutional money that was supposed to be coming in, and it does seem like platforms like the coinbase platforms, was missing, when there is custody, legal clarity, things like that, the money would be coming in but i was fascinated to see that this year we have not seen that buildout of institutional infrastructure, not only coinbase's and other relentless selling of -- no news has boosted the price of any cryptocurrency for any time.

the exact opposite of the second half of 2017 where it is clear the infrastructure is being built out and the capacity for the institutional money has expanded but not done anything to boost the prices. brad: has the demand from institutions, the same now as when you announced at the end of last year? adam: greater than ever, institutions do not move fast, they are thoughtful and deliver it. we have spent a lot of time with our institutional coverage group headquartered in our new york office, meeting with institutions, educating them on who we are, the processes we use. they dig into cold storage and say how do you do that and make sure my funds are safely secure? here is how we use a case to make sure the random number generator used to store these funds safely west military -- was military grade.

brad: what kind of competition do you see from traditional facilities like jpmorgan? adam: we do not focus on competition and more about what our customers want. we think there will be an opportunity for coinbase to work with others in the space. 11titutions do not just custodian and want a few best in class custodians. we are in conversation with others in the space just like we are with regulators and customers constantly. brad: what do you think of coinbase's competitive situation right now, maybe the traditional custodians that may be looking to get into the business? joe: fascinating the way you seem to have two different clusters of companies reaching towards the center. you have the upstarts like coinbase and others who, all the time seem to be making inroads to resemble more legacy banking institutions, more legacy

brokerage institutions, and you have circle and square. on the other hand, you have legacy organizations with for a long time were skeptical about the whole space and dipping their toe into providing crypto services. it feels like a bigger battle is coming and not clear which will win. i am curious, there is a debate about how this space will it centricwhether bitcoin or room for a lot of different coins. do the institutions that are signing up early on for the new coinbase service, how interested are they in holding a multitude of different coins? adam: great question. spot on. clients want us to expand to more countries and add more access. we have four assets, bitcoin,. , bitcoin cash, we plan to add

more. that is at the forefront of our monochromatic. -- model roadmap. but want toh four expand to asia and offer new assets. going --price of that bitcoin has been on a steady the going, is this needed -- steady, is this needed? alwaysarkets are not rational and you have to have as rational and you have to have a 20, 30-year-old vision and our ceo said, we have been working in the space for many years and the market reacts to rapid run ups and recoveries. when an opportunity to stay focused on the mission and create an open financial system and invest in the infrastructure and resources to bring this to asset class to mainstream. we look at other metrics like

the number of developers working in the space, new teams launching, number of daily transactions on any digital currency, those numbers are moving up and we are optimistic. brad: the vice president and general manager of coinbase institutional and joe weisenthal, thank you for joining us. coming up, he was a driving force behind amazon's kindle at alexa, now trying to bring music running to the masses using technology he pioneered. that conversation is next. this is bloomberg. ♪

brad: voice-activated speakers are becoming more prevalent part of people's lives and the king -- 41ports maker -- spark million americans will use one once a month in 2018. this puts amazon market share at 67%. that is expected to drop to 61% by 2020 but almost double its

biggest rival, google. more of the users are using smart sneakers -- smart speakers as a teaching tool. ian free was a former vice president at amazon where he led the teams that work on kindle, alexa, and i go, and the -- echo, and now the ceo of bamboo learning, teaching kids about music using amazon alexa. thank you for joining us. ian: thank you for having me. great to be here. brad: we met many years ago when you were launching the amazon kindle. what is bamboo learning? ian: bamboo learning is a startup that i cofounded. it is set up to create applications that are fun and interactive to teach kids as young as six, through teenager, and also adults, different

things they may like to learn. casually come in five minutes or less. -- casually, in five minutes or less. brad: learning music, it is very visual, you are reading music, hunting for the keys on a keyboard or strings on a guitar. by his voice-activated speakers the right forum for learning music? ian: that is a great question. there is a few things, one, it is supplemental to perhaps taking music lessons. one of the interesting things, my cofounder learned, music teachers often will not teach younger children how to play an instrument until they can learn to read. she and i both believe children as long as six should be able to learn about music. we have some examples.

with-year-old learning ambient music. -- bamboo music. after interacting with it and answering the questions, she wanted to take a lesson and now is learning the ukulele. not yet a strong reader but already learning how to play music based on starting with bamboo music. brad: bamboo music joins thousands or tens of thousands or other -- of other alexa for -- poor people -- how do you do these government really -- discoverability problem with echo with the new apps? we have to do our own job

of getting the word out about bambi music -- bamboo music. amazon created a new feature and your your echo and you just have to say to it, ale xa, and able than the music -- bamboo music. amazon is finding new ways to make skills much more available to customers. you can't just go to the amazon just god search -- can to the amazon store and search bamboo music. brad: you went from being an inventor of the echo to a developer for it, why leave amazon to do this? ian: i had an incredible time at amazon, i worked there for over 12 years. i learned quite a bit.

across the board, from business to technology. i felt it was time to try something new. i wanted to get back to coding which i have not done in a couple of decades. this was a fun project. my cofounder, an absolute expert -12 education and music, we thought it would be fun to educate. brad: cannot wait to try it, bamboo learning cofounder and ceo, thank you. we are off tuesday and wednesday for the fourth of july holiday but will return later this week. that is all for now. this is bloomberg. ♪ what's a gig of data?

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♪ >> wall street reverses early losses to shrug off trade tensions. the focus on tech. >> commodities saw their biggest tumble since 2016 led by the weakness in metals. silver fell almost 2%. turns up thefire heat again, saying the wto treats america unfairly and must change. >> the race