emily: i'm in san francisco and this is "bloomberg technology." shares drop on its first day with escalating trade tensions with its valuations. plus electric scooter has a global expansion with a massive new funding round. we will speak to the co-founder. for the company

trying to turn things around for years. to our top story. falling as much as 6% on the first day in trading in hong kong as a escalating trade war dampens the biggest offering in two years. the weak opening made that the chinese tech company but it was highly unanticipated i.p.o. >> we are a new species and a we can do e commerce. i don't think there is anything like that. >> what can you do with the device. i think pushing away from the hardware back grouped into a diverse offering makes a lot of sense. i commend them for doing that. that is a good move. >> indiscernible]

>> you really got to be local specific when you develop services and i'm not sure it is that easy to copy and paste it. emily: the managing partner from m.s.a. capital along with mark who covers consumer technology. what do they have to prove? >> they have a lot to prove. they are very localized to china and some of the more developing markets like india and doing very well in india and china, but that is one portion of the world. there is the whole trade war tension right now and the ability for china to get their devices in the u.s. and europe has become a difficult problem.

emily: our tech reporter, shelly, how much of a disappointment is this? >> it is a disappointment because of how much expectations were built up. if they wouldville come to the market. as it were, it was a big accomplishment, eight years in existence and becoming one of the biggest smartphone companies. instead of saying this is who this is who we are and what we make, we are this $100 billion company that is an internet businesses. that is where the mismatch lies. emily: would you be a buyer? >> i am. emily: at twice the price of apple? >> i am. the business is underestimated and misunderstood. this develops a delivery device for multiple services.

they have to really disrupt and destroy an entire business and this is i.o.t. they put the devices in the hands of everyone not just in china but in multiple merging markets and gives them a platform to deliver services at a high margin. emily: mark, you cover apple. if you look at unit sales that apple is selling at, it is unprecedented, but if you go in terms of delivering that apple is services across the world, that is where the lucrative macts are. you see them all shifting. they are a china-based company and have so much companies and everyone else trying to get a piece of the pie. it is a whole different world, and it is not ahead of the pack. emily: you heard the company make the argument that they are a new species, are they really

different? >> there is nothing new there. >> in the i.o.t. space, you had these makers, like fitbit, they wiped all of them out by making a product they can sell at a tenth of a price. it is in their early days. things like health care, insurance, finance, all kinds of other apps they can plug you into, it is unprecedented. but when you buy their televisions, you are forced to watch their tiesments. but it is superior quality, you have to take their services. emily: how much is this being caught up in a trade war? >> that's the line we are going to hear from a lot of people, that this is bad timing. this isn't great timing for the macts if you look at china and

hong kong. both markets are down. there are a lot of jitters about the trade war. they are not in the u.s. their business isn't going to be affected by anything having to do with the trade wars. so it won't be that impacted by a trade war at least in the near future. emily: mark, you have done a ton of reporting including new iphones, what is the hardware that they will be up against? >> i think there is an opportunity for a player whether u.s.-based or china-based to come in with a higher-end phone. we have seen companies like one-plus. and apple is working on a cheaper iphone. no one has nailed it that is good and cheap that people are going to buy in high volume. they have this opportunity. and in this climate with this administration, it doesn't seem

plausible is going to be able to have that success in the u.s. emily: you are an investor in other chinese companies that are planning to go public soon, do you think they could change plans? >> i don't think so. i think it's tough timing. they were out the first gate with the dual structure. it is a difficult position for them. and global investors understand it because it republically indicates models under one platform and shows how it integrates more than this new species. the combination of multiple business models under one roof really difficult to understand. emily: they have the mainland china half of its listing to come and how is it going to work and could the company recover? >> that seems to be seen. and they tried to push for it.

they want to be part of it, but there is a big disconnect what regulators want and customers want. it is going to take six months and the regulator or a year or could never happen. there is this new thing that no one has been able to figure out and they were supposed to be the test case and that didn't happen. we'll see if other tech companies, established companies, come forward first and might lead the way for a company like them to come after that. emily: the speculation about its attempts to enter the u.s. market with phones has been going on for years. do you think they could be the one to offer that lower price, high-end handset, what are the chances? >> it could be and should be them. but the political climate isn't going to allow it.

there is a big emergens of the u.s. not wanting china-based companies wanting their products in the u.s., et cetera, et cetera. it will be difficult right now. it will be seen as difficult years, seven ur years or even longer or if this administration changes their stance. emily: thank you mark and years shelly and ben. there is a new sign the long struggling recording music industry is renewing its come back, china plans to spin off its music business. it will let investors bet on the market so services have brought new life to a new industry. for the second year in a row, there is double digit growth. music lovers spent $8.7 billion, up 17% from 2016.

charging up for an electric scooter turf war. and if you like bloomberg news check us out. ♪

mily: joining us to discuss is toby. thanks for joining. this partnership with uber, how will it work? investing start and on top of that, they will be co-branding and make our scooters available on their app. emily: are we going to see the uber sign? >> we are figuring out the details. emily: how much business will this drive for you? >> it's a good question, that we don't know, but the privilege of this partnership. this is a new space and thrilled to have uber as our partner and test it out. emily: $1.1 billion valuation is significant. what are the numbers to back

that up? >> this is a massive market. transportation, mobility. and first and last model transportation has been a challenge for a lot of the high-density fits. so we have seen a lot of people starting to use that for fun. but now, a lot of people are using that for a commute and adapt it into their daily life. we look at 2013 when uber was first around. and then, now, look at uber -- i think the most important thing is we are creating a movement that changes people's behavior. emily: how many rides a day? -- would say we are going we have already done over six million so far in eight months. emily: it has been said this

business could be more profitable because you don't have to pay drivers. is that a fair assessment? it's hard to believe you could get more money making bikes and scooters. >> we don't know about their economics, but not paying the drivers and cars is a big cost reduction for us. but more importantly, we are solving the higher frequency use case. part of people, most of the transportation needs every day basis. so i think that is a big foundation of our potential market. emily: there are challenges in every city and every city is unique and in san francisco there is a freeze on scooters and will be going to pick size companies that can have it out and you are applying for it right now. what can you promise the city

and the residents who got pretty annoyed? >> we share the feedback and one thing that we get from the other, we take the city relationship. before going into any market, we talk to the city officials and the department of transportation and we hear the feedback from operating about 10-12 weeks in the past. and implementing a lot of exciting features. after each ride we ask the riders to take a picture so people are held more accountable and hiring locally and we have an operation team on the ground to make sure things are in an orderly manner. emily: you are taking a none-uber approach? >> we want to do the best for the city. emily: and there are several different companies that seem

to provide the same thing. what gives you an edge? why isn't this just a commodity. >> every major player move here and say this is a huge market that we need to have more actors and help solve the problem. we are excited about potential competition and working with the cities and making sure that we are always customer first. not looking too much on the competition but more focused on the product and customers. emily: speculation that you might provide a two-seater electric car, is there anything to that? >> we can't share too much about that. anything that using that and not available now and says something that we can do better than everybody else, we will share more. emily: this is a lot of money you are raising.

>> we are ambitious. we want to serve more cities and more users. we are more live in more density markets with bikes and scooters. by the end of the year, we will enter and serve over 100 markets. and we'll keep focusing on the products. emily: you doll bikes, scooters and e-bikes, are they all manufactured in china? >> yes. emily: this trade war, is that impacting you? >> we are analyzing the impact, but so far, nothing. but the impact could be minimum, because the business model just works very well. emily: thank you so much for stopping by. i will be watching and i will be watching the streets. it could be a massive week for media. we'll discuss as disney, comcast and fox jockey for

power and assets. this is bloomberg. ♪

emily: samsung electronics opened the largest mobile phone on monday. it will produce 120 million smartphone units a year like the galaxy x 9. it was inaugurated by the indian prime minister and south korea's prime minister. it became the second largest smartphone market after china. they are the following. a major week ahead for media. the biggest industry names will gather in idaho for the allen and company conference and we

could get it from comcast in the bidding war for fox assets or a higher bid from fox as it competes to buy sky in the u.k. jerry, what is comcast's next move? >> that is what everyone is looking for. one of the combattles going on is between comcast and disney over the fox entertainment assets. and disney has the upper hand and has the higher bid and i think a lot of people are waiting to see what comcast is going to do and come back with a higher bid. emily: what do we expect in does disney or comcast have the upper hand? and rob have the upper hand. >> i think a lot of people are expecting comcast to come back and top disney's bid. and we could have a bidding war

that continues on into the summer. emily: so what does james murdock want? looking to maybe do his own firm. but rupert is calling the shots and there is a lot of speculation that he would prefer to sell much of his empire to disney and not to comcast. there is a history of blood blood that goes back years. these are twore media moguls that have been duking it out for decades when the cable industry was in its beginning stages. disney has a higher bid. and there are tax considerations and the murdocks -- we reported they would make more money by taking a disney bid than a comcast bid because of the tax considerations. so there's a lot still to play out. brian roberts, the c.e.o. of

comcast is not easily deterred and a lot of people are expecting him to come back with a higher offer with the fox assets. emily: fox sky situation, how does that add a wrinkle here? >> while this whole battle between disney and comcast is happening over the fox assets, over sky battle which is arm pay-tv provider. comcast has the higher bid and have a deadline of this friday to formally make their offer to the sky share holders. fox is lining up financing to potentially top comcast bid for sky. emily: i do want to ask you about another story the "new york times" obtained a recording a town hall in which the new nth executive is

speaking with hbo's and insisted that hbo needs to make more money and scale its la netflix, is that possible? >> they want hbo to make more content. really, if you think about it, hb omp is competing with netflix and you have to have enough content so people just don't watch "game of thronse" and when the season is over and then re-up again. you have to have a steady diet of good quality content to keep people on a streaming service different like a cable company if you want to cancel, it is a pain in a neck. that hbo t realizes

does a lot of quantity but increase quality. emily: will they have the bottomless budget? >> at&t has not put a number on how much money they would like hbo to spend on original content. they said they would like to see them spend more but we haven't seen the details of how much they want to spend. netflix has very deep pockets and hard to imagine that at&t would be willing to compete on the same level as netflix. hbo has been competing with net flicks and hasn't put out much content but seen growth in their streaming service and the amount that emmies won is not going down. they have put a premium on quality and now at&t is coming in and saying ok, we need you to make more.

emily: thanks so much. we will be watching. coming up, a company new species different from any other, but are investors buying it? that's next. this is bloomberg. ♪

♪ this is "bloomberg technology." i am emily chang in san francisco. our top story, hong kong's biggest coming out as xiaomi makes its public debut. it's public value is $50 billion, the world's third biggest publicly traded smartphone maker. stephen engle has more from hong kong. >> xiaomi shares fell out of the gate on its ipo. of uncertainty about this company and its lofty valuation, more than apple, facebook, tencent. low-margin handset manufacturer, or is it like the

chairman lei jun says, a broader internet services company? and also there is the growing backdrop of a trade war between the u.s. and china that has dampened sentiment. the company says it is a tough one to pigeonhole. >> we are a new species. we are in internet company that can do e-commerce at the same time. >> xiaomi is now a $50 billion company, the third largest in the world for handset manufacturers, but a far cry of an earlier estimate last year of a valuation of $100 billion. the size of the ipo also scaled back, down $3.1 billion from an initial estimate or aim of $10 billion. one dampening prospect was the elimination of a corresponding listing in china in shanghai of , china depository receipt.

regulator in china shared concerns about the lofty valuation and true nature of its business. of stephen is more engle's conversation with xiaomi they discuss the outlook for u.s.-china relations. >> we are and new species, and internet company that can do e-commerce and hardware at the same time. going to go from 80% of your revenue right now in hardware and handsets, lower margin handsets. out thehas spelled vision, the ecosystem of services, video, music and other things. how will you and over what time frame see -- internet services is to

provide a better user experience. on top of this, there is a able source.ize by the first quarter, close to 10% of revenue. the trend is this is becoming a bigger part of revenue going forward. >> lei jun said he wants eventually more than 50% of revenue from overseas markets, not just selling handsets, but services. you are doing well in india. what is the party and how would you crack at the u.s. market? is the userity expenses good. we are trying to do this internationally, including india and indonesia. will expand this toxpand other countries as well. >> how are you affected by the negative trait sentiment? >> we are long-term positive. right now, we don't have

operations in the u.s.. the impact is minimal. had to scrap that could without be resolved over time? -- that. without be resolved over time. >> -- >> was it a matter of you had to list now? the last round of financing was 2014. how critical was this for you? >> it is important and a company's evolution. we need to focus on is the long-term value of what we can deliver. short-term fluctuations and tightening of the market are important, but not the party. cfohat was xiaomi's speaking to stephen engle and hong kong. twitter,rning now to the cfo trying to dispel

concerns that a crackdown will impact company growth. shares fell 10% monday after a washington post report that the rate of suspensions had more than doubled. afterock compared losses the cfo tweeted, "some clarifications. most accounts we remove are not reported in metrics because they have not been active for 30 days or more or they are never counted." joining us is selina wang. what is happening? >> a delayed overreaction on the part of investors. it confirms what twitter said themselves two weeks ago. i reported they are tripling the accounts they are identifying, so about 10 million accounts every week. they are stopping more than 50,000 spam sign-ups a day. this will have a marginal impact on monthly active users because most of these automated

accounts are not active every day, every month. in addition, a lot are stopped before they join the platforms of they are not counted towards is metrics. emily: that is a lot. iswhat should be concerning the great improvement does bring into question just how much of twitter is actually fake. it 5% of active user accounts that are fake as twitter said? or is it higher as independent researchers say? why didn't the company do more to stop this earlier? the actual disclosure of these numbers should be a relief for investors, not a cause for concern. emily: how are they purging these accounts? is it ai, human? taskey created an internal force ever since they had escalating concerns and criticisms from lawmakers that y did not do enough.

they dedicated engineering resources to solving this problem. they want to stop these malicious accounts at the inception with these algorithms. thatorted a few years ago a former employee discovered a huge number of accounts that were dormant from russia and ukraine, and that at the time in 2015, the company did not do anything about those accounts. that shows that twitter has come a long way since 2015 when they were prioritizing user and revenue growth over spam and automation. had that employee come to twitter today, they would have deleted those immediately. emily: how are users responding? >> i think it is ultimately a positive reaction. emily: are any users, organizations behind these accounts? >> i have had tweet saying they are removing followers because of this, but others say it is

good. it is time. if they allowe the toxicity to run rampant on the platform. a big sign this is a positive move for the company as a statement account from unilever two weeks ago when i first reported the new account suspension. wasever in february threatening to pull hats off of also jeanette works because of the toxicity of them. after the new disclosures from twitter, they said this is great and we are happy about these moves to get rid of fake accounts on twitter. emily: twitter stock has been up 70%. could this dent the turnaround? will dent think this the turnaround. we saw a note from jp morgan that said this is a buying opportunity. there has been a misunderstanding about these disclosures and the impact it will have on monthly active users. this is a positive sign that jack dorsey is following through

on his vision to increase the health of the platform emily:. , thanks soa wang much. meantime, alibaba in talks with bt about a cloud services partnership as it challenges amazon's dominance in europe. alibaba has an arrangement with vodafone germany. it has become key to alibaba cloud success out of china. the company has pulled back in the u.s. as trade tensions have escalated under president trump. coming up, tech earnings and season around the corner. what to expect from netflix, alphabet, facebook, and more, next. could it be the end of groupon as a standalone company, and what tech giants are interested in taking it in? we will discuss later this hour. ♪

emily: the tech earnings season is around the corner with netflix and due out july 16. the company is on a roll and investors have high hopes it will continue its successful performance. guestsjoined by our next to discuss. netflix have had a breakthrough year. at&t wantsout how hbo to be more like netflix, but can the success of netflix and its trajectory continue? >> they are on this trajectory of growth at all costs.

investors are willing to give them a break. this is the same playbook out of amazon when it was growing its business, spend, spend, spend, and gain as much market share as you can and profits will materialize. the concern is how much they will have to keep spending to keep up this trajectory. g there is subscriber growth, it will continue to push shares up. doubled this year, the best performer in the s&p 500 and all nasdaq measures, and is the leaders among the tech leadership. as long as they can show they can sustain subscriber growth numbers, i don't see anything knocking it down in the short term. you?: do amazon has tried with this prime video thing. as a prime member, i am constantly reminded they have

videos. they are trying to push this to subscribers, but can they grow the business? there has been a lot of turmoil in leadership. can amazon gift netflix a run for its money? >> they're trying to get more out of content spending, attracting members, spending on prime, so we think they can coexist. at some point, amazon could outspend netflix. so maybe longer-term, it for now i think they can coexist. emily: talk to us about the broader tech view. we have earnings coming up. tech was on a roll, then a time of volatility. what will you be watching for to set some benchmarks as to how the rest of the year will play out? >> one thing a lot of folks have mentioned is that the technology

, large-cap technology, have become a safe haven play for a lot of investors looking to buffer themselves from the political, geopolitical, trade headwinds. they are looking to companies , as wellon, like apple as tesla, facebook, and others saying these companies are big enough to withstand these issues. they are still growing. wherere in a solid phase they can produce cash and profits as well. as long as they do that, more investors will flock to that. it is a crowded trade. andtions among hedge funds other investors, this is the place they are looking for safety right now. unless you get significant negative or pessimistic outlooks from these companies, i don't think this will change. emily: apple has been the one we have always talked about getting to

anyone trillion dollar market cap first. earnings just look at coming up, mobile ad demand is very strong. 20% plus growth in the industry. continueacebook will to benefit from that tailwind from the industry, and amazon, you see surprises from the advertising department, which is becoming a more significant profit driver going forward. that investors will watch for closely is the impact compliancein costs, and all the steps the ecosystem has taken to improve privacy and data issues. if that could eat into the profit cider pressure that, but the revenue growth should be fine. emily: you have folks like black

rock saying tech is not as overvalued as it looks. what is the consensus? >> there are two camps. some folks look at the p/e ratios. ratio of 250.p/e amazon is to 70. blackrock pointed out these companies if you look at them in the right way aren't as overvalued as you might think. we have a chart that illustrates this point. and how theys relate to the p/e ratio for the s&p 500 as a whole, and what you're looking at on the screen is the gap between the p/e ratios for the s&p 500 tech stocks versus the s&p 500 as a whole. it is showing you it is well below historical averages, where we were during the tail end of the tech bubble. basically his argument is that these stocks are not as

overvalued and he thinks they because thebuy growth story is stronger than what you're seeing from the non-tech side of this market. emily: i have to ask about facebook. not much of a dent from the controversy and data scandals. where we see that this quarter? >> it is difficult. you will see instagram growing rapidly. if you subtract instagram from core revenues, it might be slowing, but instagram is carrying the ball forward for marketk. because the end demand is strong, i think the revenue will be fine. but wets i did surprise, will still look at it in terms of regulations, is that changing the trajectory at all question mark i don't think facebook will surprise on the downside. emily: for court facebook service, will we see a dent in earnings and user engagement?

>> the time spent, engagement, revenue growth is slowing, but on an absolute basis is still strong. because of that, i don't think you would see that didn't yet. longer-term, the plan is to bank on instagram while holding the fort with facebook. emily: all right, thank you both. we will be watching. coming up, groupon could be waving the white flag as an independent company. which tech giant might purchase the voucher vendor? we will discuss next. this is bloomberg. ♪

after 10 years of running as an independent company, groupon could be looking for a buyer. reports say it has approached several public companies to drum up interest in a sale. investors have long expected and acquired this would been, apple, facebook, and amazon as

potential buyers. guest. us now is our i believe you are the biggest groupon bull out there. what is your take on this? there is a dislocation when you look at the play wishon of groupon as a public company. the north american business is in the best date it has been in its history, and they have internet operations well positioned for future growth. with this disconnect, i am not surprised management would consider selling the business as one way to generate more shareholder value than they are getting today. emily: who could the buyers be? >> a lot of people to think about. one could be a company that owns qvc, the john malone company. another one could be alibaba. they are the own a stake in groupon. ac, whose ceo is on the board

of groupon. so there are a lot of companies that could be circling around this company. emily: what about amazon, tom? is this something they would want? >> amazon is a special case. if you look at their historical by strategy, build first and second. sometime ago they had amazon daily deals, and they still have daily deals, but it is more about getting merchandise at a discount, so i don't know for amazon there is a lot of incremental value to the extent that i don't know amazon wants to do more in the local merchant arena. to me, the companies that make the most since are a google or wouldok, companies that leverage those relationships with local merchants of groupon, then overlay or so incrementally more advertising to them, so i

don't see amazon as the suitor groupon. emily: it is interesting to think about the history of groupon, a company that google almost bought for $6 billion. now the market cap is $2.6 billion. it was thought it could be a $25 billion company. >> their ceo now came out of amazon. it is interesting to think about the relationship between those two companies. he has put in place a lot of changes that make people interested now. for example, groupon plus allows customers to link their credit cards to the groupon accounts. they have a better app. the customers they have now are a lot stickier, visit more often , but that has not translated get into revenue growth for the company. emily: how important is it if the sale happens to maintain that local feel? >> that is the strength of the whole company. it is what makes them an attractive target. emily: tom, what do you think

will happen? >> ultimately they will sell the business to an acquirer, one who would be able to leverage this merchant relationships. i really feel like they are doing a lot to strengthen the value of the groupon platform. if you think about what they're price salesull coming you can buy major league baseball tickets at a discount and full price, then you mentioned groupon plus earlier. that makes this service easier to use. so when you think about the stronger, healthier groupon today, if the market does not value it properly, i think for one of these businesses it is a great opportunity to add groupon. forte all right, tom along with sarah mcbride. if you are planning to be in the sun, you will need spf. it is no different for nasa's new probe that is getting the

best solar protection possible. the parker solar probe has been given an altra ichiro to keep it from burning up as it attempts to get closer to the sun than any other vehicle before it. temperatures on the shield will reach 2500 degrees fahrenheit as parker approaches 4 million miles from the sun's fiery service. the shield will keep the probe cool at 85 degrees. install thers shield ahead of launch and are hoping to make new discoveries about how he from the sun affects life here on earth. that does it for this edition of "bloomberg technology." from san francisco, i am emily chang. this is bloomberg. ♪ ♪

>> wall street hit the highest in a month as the dollar advances while treasuries pullback. >> earnings season will divert attention from tariffs. traders seem increasingly comfortable with the u.s. economy. >> theresa may fights for her political life as tories quit her government. -- premier ligue