banks higher and higher everyday 500, 2906, 1.5 points. higher volume, but no real commitment in the direction. call it 45 the last minutes of trading, we saw the indexes take a leg lower and then claw back. a a lot of movement, but in the and the net gains are fairly modest. caroline: interesting that netflix rallied so much ahead of its earnings. jason: it helps to be underweight health care on a day like this. one hospital company down nearly 10% today. scarlet: and deutsche bank upgraded netflix heading into the results, but looking at the performance overall, it has been 500's 24rsus the s&p percent rebound, so quite a divergence. caroline: and today qualcomm

leading on the back of the apple news, at last. scarlet: sorry, let me jump in. netflix results. eps, not as important as a typical company, but $.76 versus the estimate of $.58. revenue higher than anticipated as well, but the numbers everyone is watching for, the subscriber numbers. 9.6 million. analysts looking for 8.5 million, so overall the number bigger than anticipated. joe: q2 streaming is estimated at 5 million, versus an estimated 6 million. the selloff after hours, the nearly 9% decline now, might be on the back of the subscriber forecast, which looks a little short of estimates. scarlet: and don't forget that netflix had a price hike in march, so this is a reflection of that. of hboe: and plenty coming out with "game of

thrones," a lot of competition. everyone wanted to look at star wars, even though joe has never seen it. [laughter] joe: i have never seen "game of thrones." caroline: this is one we have to keep on being aware of, the international growth versus u.s. growth, what we will be digging into. but let's get some instant analysis now on netflix, our media analyst for bloomberg intelligence joining us from princeton. what did you make for the bigness in the second quarter? >> the q2 guide was really important. a lot going into this earnings report. for that number, the fact you mentioned, the 13% to 18% price hike going into effect in q2, asnd the announcement from does with and what it streaming competition. but we have to bear in mind that

think the second quarter the contents late is not as robust as it will be into the second half of the year, so probably a little reflection of all the different factors. joe: looking through the numbers, free cash flow is projected to be for the first quarter of 2019, $460 million,, negative wider then we have seen in the past. ,f course there's concern there when it comes to netflix and the ability to make sure it has the funding it needs. joe: obviously it is a volatile stock, and we are used to seeing earnings reports with surges, drops. all the stuff about the contents late or the timing of what competitors have, this is all stuff netflix investors have seen before, right? geetha: absolutely, absolutely. this is really a battleground stock, that kind of pushes investors to extremes. competition is something netflix has anticipated for a long time now,

which is why they have been slowly but steadily moving away from licensed content and have given so much importance to originals. they have built out a nice roster of originals, with returning series of some of the most-anticipated titles, "the things," soanger they have built that up nicely. are you you -- scarlet: concerned about cash flow? -406 to $4 million in the quarter, versus -$270 million a year ago. is this something investors will fixate more on? geetha: absolutely. cash flow has always been an issue. they will spend something like $15 billion in content costs this year, about $18 billion next year. so they are using content expenses to build, but it comes at the cost of free cash flow. the one thing, they will be having negative free cash flow of about $3 billion this year,

but it is supposed to improve after that, at least according to what reed hastings has told us. caroline: we thank you for all that immediate analysis on the back of the netflix results. still with us, jason from ubs global wealth management and sarah ponczek. how important is it for netflix to set the bar for tech org munication's? scarlet: we just got ibm, sorry. revenue, $18.2 billion, missing the mark that analysts were looking for of $18.4 billion. ibm reaffirmed full-year eps and cash flow views, so i suppose that is good news, but you are seeing the immediate reaction of a decline here, perhaps because of the miss on first quarter revenue. $2.25, slightly higher than the expected $2.22. caroline: a company still trying to make inroads into cloud computing, trying to fend off the winners, amazon at the moment, microsoft doing well.

billion, cloud revenue up 10% over the last 12 months, down from a 12% gain. people are worried about the slowing growth. joe: the deceleration. sarah? sarah: when you think of netflix and ibm, they are both companies, you think of communications services, big companies, tech. but netflix, the story is really about subscriber growth, more specific to netflix and competitors like disney plus, hbo, et cetera. with ibm, this is really about cloud growth, and a lot of people are focusing on the redhat acquisition, how that will potentially help them dominate in the cloud space. netflix and ibm, large companies when you think about market sentiment, but dealing with very much issues of their own. and jason, thoughts on tech e-cig begins of these players? jason: netflix is more of an

idiosyncratic story, and ibm isn't quite the bellwether it once was. the point about enterprise and cloud spending, we still think that will be strong. that is a big part of the tech sector. as the macroeconomy improves, that's a positive for the big part -- a big part of the tech sector overall. the cyclical aspect takes over. you can get it in tech, in companies like netflix, and the cyclical component supports enterprise spending. that come sort of a double-barreled support for -- that becomes a sort of a double-barreled support for tech to go higher. scarlet: we want to recap the earnings for the last couple minutes. netflix shares falling in after hours trading, after the second quarter subscriber estimate trailed estimates. resulting in a 4% drop in after-hours trading. for ibm, also a decline there,

because of a revenue forecast, or a revenue print that trailed analyst estimates, $18.2 billion. the outlook is putting much intact. joe: something on netflix quickly. in the announcement, they directly addressed the competition from apple and disney, which we know will be big and we will talk about more. they say, we don't anticipate these new entrant will materiallys affect our growth, because the transition from linear to on-demand entertainment is so massive and because of the different nature of our offerings. they know they will get questions on this, so interesting to see it addressed. scarlet: they want to frame everything. jason from ubs, thank you so much, along with bloomberg's sarah ponczek. that does it for the closing bell and for me. romaine bostick is stepping in for "what'd you miss," where we will continue to focus on netflix with our guest. this is bloomberg. ♪

♪ ♪ caroline: from bloomberg's world headquarters in new york, i am caroline hyde. romaine: i am romaine bostick. joe: i am joe weisenthal. caroline: stocks closed in the green, but only just. romaine: the question is, "what'd you miss?" caroline: what netflix earnings mean for competitors like disney. settlement reached. qualcomm and apple agree to drop all litigation between the companies worldwide. and the biggest health insurer in the u.s. wades into the medicare for all fight, saying

such proposals would amount to "wholesale destruction of american health care." first, netflix. of course, we have seen the numbers, and 9.6 million subscribers added in the first quarter, the most-ever, but the second quarter forecast is the key concern here. an's get to our guest, investment banker in media and tech for more than 40 years. are sour experience, we worried about the second quarter growth. that, givenecting the slate is a little quiet and perhaps hiking the price? >> nothing will deter netflix from continuing to grow and grow. most of that growth is coming from outside the u.s., but they have virtually no competition internationally. for the moment, netflix will look very good, very strong, and disney is not a netflix-killer. joe: explain why. porter: we are in a

transpiration on -- transformational moment in media as entertainment, which is important and cataclysmic for a lot of players as was the entry of cable against network television, linear television, 45 years ago. everything is going to be streaming five years from now. the cable industry will be on its last legs. they are the real victims of disney and amazon and apple, time warner and comcast and everyone else getting into the streaming market. romaine: in order for netflix to maintain its position, it is having to spend a lot of money. porter: $12 billion this year. romaine: and a lot of that coming from debt financing, so how does it sustain that? a few years ago, it was the only game in town. porter: they were the pioneer. they went from sending you dvd's in red 00 -- envelopes to streaming, and broke the mold. but

nevere business model has been sustainable. $3 billion negative cash flow for 2018, and they will lose more into any 19. it's not sustainable, but as the only game in town, they couldn't lose. they are continuing to do that, and they will do better on the revenue side because they jacked up the prices a couple weeks ago. joe: forgetting whether disney plus is a netflix killer, will disney plus be a success in its own right? porter: if you are a parent, and you haven't subscribed in the next six months to disney plus, your kids will beat you over the head. it will be a huge success. i think bob iger is a little light. he says by 2024 he will have at least 50 million paying subscribers. i think that is light. it could be double that. caroline: this is becoming such a mes. -- mess. i feel so torn over whether i want to spend seven dollars in one direction, or --

porter: but remember how much you are paying the cable company. caroline: precisely, but eventually we will end up with a cable company. we had t-mobile basically offering a new one. porter: bruce springsteen said it right, about 20 years ago. 167 networks and nothing on. that's the problem. cable will lose the content, all going over the top and streaming, so there will be almost nobody but the five basic linear networks who can survive, and they will soon go over the top as well. romaine: what happens to hulu now? porter: that's a good question. my sense is comcast doesn't want 30% of whotheir they own, but they are vulnerable, because disney can spend as much as they want on hulu. they can not allow hulu to make profits. it will be a struggle between disney and comcast. comcast is launching its own over-the-top universal nbc streaming network, and they

don't want to put content into hulu when they have their own streaming network, so sometime in the next six months he will probably see that resolved. disney wants to use hulu as an adult, sophisticated counter to netflix, and having tens of thousands of programs, mostly netflix has television episodes, not movies, that's not meaningful in the marketplace. it's what you have that counts. that's why they have gone to original programming. that's why they are spending billions of dollars to create content, but they can't compete. for every 10 movies a studio made over 50 years, two broke even and one made a profit. the hit ratio is impossible to overcome, and netflix is caught up in that right now. romaine: we saw in the netflix press release, they say the big

beneficiary of the new entrants will be content creators and consumers. creators, because they know there has been all this spending on actors. porter: a golden age for film production. romaine: will that keep continuing? the prices people are willing to pay and the amount of work for people in the production business? porter: i think it has to, until the shakeout of streaming networks begins to occur, and then some of them are not going to survive. some will go all ads. viacom, pluto, they have big hopes an ad supported, free, no streaming will work. i think it will for a while, but it depends on the content. even if it's free, you won't click on pluto if you don't like what they are showing. romaine: talking about the competition. in my household, a lot of the competition is coming from videogames. [laughter] reed hastings addressed that last quarter. porter: he said he doesn't worry

about over-the-top streamers, but about games, about fouor tnite. he's right. the gaming business is bigger than the entire entertainment industry in revenue generation, smart, theyx were might pick up some games and add those in, keep the younger players, the millennials and kids, coming back to netflix. caroline: so five years from now, who are the survivors? we have youtube on one side, gaming on the other, you have potentially disney-plus and netflix. who else will be up there that we will all be paying for? porter: it is hard to say what at&t is going to do with warnermedia, but they have the content to be a winner if they operate it right and price it right. i don't ever want to underestimate comcast and brian roberts. nbc universal is a really important cache of library

content and good new production. there will be really serious competition for everybody. not just disney. the really interesting thing that nobody paid much attention to. reed hastings earlier this week resigned from the board of facebook. he said it was a conflict of interest, because facebook has secretly decided they are going into video production as well. they want to do what google is doing, what amazon is doing, what apple is going to be doing. they don't want to leave that space to the streamers. they have the audience, they have people hooked into facebook, and why not sell them and let advertisers support the programs? romaine: fantastic to have you here. capitalibb, mediatech partners. quick breaking, other earnings out. ual, parent company of united airlines, adjusted eps of $1.15 per share, beating the estimate

of $.95 per share.the company says it will hit it s goal for 2019 and 2020 for adjusted eps. this is bloomberg. ♪

caroline: a recap of earnings. ibm down after hours after results reflected a slowing pace in cloud unit growth. overall, ai not as strong as they hoped. joe: netflix sliding after hours, although it was down much more before. a slightly weaker than expected outlook for subscribers. romaine: and ual beating first-quarter eps and reaffirming profit goals for 2019 and 2020. let's get to our next story here. after complaints from investors about liquidity, finra might

postpone block trade disclosure for 48 hours. here with more is claire boston and brian chappatta. claire, over the last couple decades the market has moved to a more transparent platform. but now you have a group of market makers who seem to have effectively lobbied the industry regulators to provide more opacity on how to do business. claire: this is a trade that has been asked for for a long time, by some of the biggest the corporate bond world. they argue that the corporate bond world has gotten so illiquid since the financial crisis, it can be hard to execute bigger trades. when a dealmaker takes a chunk of a bond issue, that can moved the market and make it harder to let go of the bonds. joe: how weird is it to see in your view the shift away from

greater transparency? brian: really weird. this is a big market of corporate bonds. let's try this one-year experiment, some control groups, test subjects, see how it all shakes out. it is an interesting proposal and gives an opportunity to get some hard data on how disclosure affects liquidity, because this has been a huge complaint for a long time. caroline: i can see who is complaining, and therefore who might we now. who loses with a lack of transparency? claire: a lot of smaller investors, saying they don't know how they might be able to keep up with larger players, especially if the dealers already want to call them before they call me for these trades. romaine: i thought we were sort of moving to some sort of area where it would all be electronic trading in the bond market and fixed income. we still haven't quite gotten there, despite the fact equities figured it out quite some time ago. claire: that is the dream for the corporate bond world, but it

is still a market where you are on the phone with the dealer, very opaque. some investors say that electronic trading works with smaller lots. doing a little rebalancing, a couple hundred thousand dollars put that onto one of the electronic trading platforms and that will probably work. bigger trades, still dealers. romaine: brian, what is your view on the electronic occasion electronification of bond trading? brian: what is interesting, there is such a proliferation of etf's at this point that provide a real-time view of how a brockport -- broad portfolio of bonds are trading. obviously a single bond versus a portfolio is different, but you have seen these credit portfolio trades among goldman sachs and similar dealers, where they can effectively take bonds in or out of etf's. that will be more of a trend going forward. you will see folks with a set of portfolio bonds replicating an

etf to a certain extent. caroline: so this playing around, do we have any details how long it will take, what they will look at, how they will analyze it? brian: next up is requests for comment. i've already gotten feedback. i sent a letter to finra. all things are welcome. 60 days, it seems that it will be implemented, go for a year, and see how it shakes out. romaine: and what happens after a year? what exactly will they assess, and what will be the benchmark to determine whether this can continue beyond a year? claire: that's a good question. some key things they will look out for, any movement in spread. can we see that bond prices moved less because of this 48 hour period of no transparency? we will see. romaine: is it sort of weird that this is also happening at a time when he a lot of folks feel the market might be on some sort

of precipice of a crisis, and you are running this experiment at a time where if you do have a liquidity issue, you might have the opposite effect of what was intended? claire: you do wonder about that, right? at the same time, if this helps dealers trade better, that could be good news in a crisis when you need to move fast. caroline: love this conversation. claire boston, shining a light on the bizarre world of piloting things within the bond market, and of course our opinion columnist, brian chappatta. allng up, the medicare for debate isn't just happening in washington. one major health insurer is picking a side and sticking with it. more on that ahead. this is bloomberg. ♪

mark crumpton with bloomberg first word news. in colorado, columbine high school and about 12 other schools are on lockdown as law enforcement investigates what they say appears to be a credible threat possibly involving the schools. the lockdown is just days before the 20th anniversary of the mass shooting at columbine that killed 20 students and a teacher. there was no immediate indication the lockdown was connected to the anniversary. french president emmanuel macron says he wants to see notre dame cathedral rebuilt within five years. in a televised address to the

nation, president macron said, "we will rebuild notre dame even more beautiful, and we will once again mobilize to do it." firefighters,d police and donors who are giving money for renovation. meantime, in the united states the president of the university of notre dame said the school will donate $100,000 toward the renovation of notre dame cathedral. the reverend john jenkins theunced the bells of basilica of the sacred heart on the university campus in south bend, indiana will toll 50 times tonight to her present the 50 hail marys of the rosary and mark the start of the paris cathedral rebuilding. a united nations spokesperson says it is too early to they could help french authorities in the wake of the devastating fire. they told reporters that the has's cultural arm, unesco, already made what she described

as a spontaneous offer of expertise to help french authorities. >> we are already in contact with experts and ready to send an emergency mission to assess the damage, preserve what can be preserved, and implement short and medium-term measures. mark: she reiterated comments from you and secretary general -- u.n.'s secretary general, who expressed horror at the images of the cathedral in flames. on pace to set a record for most illnesses in 25 years. 555 measles cases have been confirmed so far this year, up from 465 as of a week ago. 20 states have reported cases, and new york has been the epicenter. nearly two thirds of all cases have been in new york, and 85% of the latest cases came from the state. the centers for disease control

and prevention recommends all children get two doses of measles vaccine, which officials say is 97% effective. >> there's a lot of information out there around measles, and the measles vaccine, and unfortunately a lot of it is untrue. i really urge parents to talk to their health care provider. their doctor is the one best equipped to answer their questions about measles and the measles vaccine and help them make decisions for themselves and their families. also on monday, the world health organization reported that globally there are four times as many measles cases so far this year as at the same time last year. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in over 120 countries. i'm mark crumpton. this is bloomberg. romaine: and we have breaking news right now on t-mobile and sprint, the two wireless

carriers in the u.s. that were seeking to merge. intoeale has run resistance from the doj, according to a "wall street journal" story. you can see shares down on both companies. caroline: a stock to watch, arconic block, as morgan stanley manages a blocked rate of 8.7 million shares, offered belowate of $20, slightly where it closed on the day. we are currently seeing that particular company in the red. health-care debate is not just taking place in washington. the biggest health care insurer in the u.s., united health care, drew a line in the sand earlier today on a conference call with investors. after months of quiet, the ceo said "the options are clear between a government sponsored or government run system and the one we have.

the cost of medicare for all would have an impact on the economy and jobs without fund mentally increasing the access to care." let's welcome in our analyst, who has an outperform on united health care. thank you for joining us. how much of your view of the recent weakness in companies like united health care and others can be directly attributed to the growing debate and perhaps looming possibility of medicare for all in the united states? >> thanks for having me. yes, i think a lot of it in the last few days, maybe even the end of last week, is attributable to medicare for all. tweets from senator bernie byders, town halls hosted fox news, and the united ceo as we pointed out, kind of refuting the claims of what the value is for medicare for all. the other driver that i would point out, which has been perhaps more predominant in the

last month or month and a half, has been around drug pricing reform. this is more from executive authority, and perhaps more real, from the health and human services secretary, azar, on the redirection of rebates and how they might be deployed at the point-of-sale to reduce out-of-pocket costs for seniors, and what that means for the commercial market. romaine: any time you have major regulatory or legal changes to an industry like this, usually the industry players are pretty involved in the process, lobbying congress and helping to drive the ship so they don't lose out. what do we know about united companies,se other and how involved they are in trying to address these issues that have become political hot buttons right now? was the hot buttons, one medicare for all, the other was drug pricing reform. i do believe the medicare for

all proposal that's coming from senator sanders and some of the very liberal house democrats is more a populist message. it really doesn't have teeth to it. i'd be very surprised, and i think the industry would be, if any of that ever passed through legislation at this point. it's more about the democrats, the democratic candidates trying to go against president trump in the 2020 election. as far as the hhs proposal for drug pricing reform, theres been a a lot of involvement from the private industry, and i think they are working very closely with the executive authorities, cms, hhs, and even legislators. there were hearings with the senate finance committee, and also energy and commerce with the house, on insulin pricing. clearly there is a lot of partnership. caroline: of course, we know sometimes the medicare for all

is thrown out there to swing the pendulum to a certain extent, so the discussion happens. it draws in republicans as well, with trump discussing how he would want to see a change to health care in the united states. what is your base case of what health care eventually looks like in whatever way it is rewritten by 2021? you talk about drug prices perhaps coming down, but what areas could realistically change, and how would that change business models? ana: i think that's a great question. i think that is what the debate should be about. i think we will end up with employer-sponsored insurance for 160 million to 170 million americans. i don't think that's going to exchange -- to change. while there is clearly some angst from employees and workers on the margin about how much out-of-pocket costs should be, i think that's a message being heard loud and clear by the private industry, and it will be addressed. on medicare, we will see much

more of a move to public-private partnerships, like medicare advantage. we currently have a little over a third of the medicare population, american seniors being insured by the private industry. i think that will end up being somewhere north of what we have now, closer to 50%. and states, that is really critical as well. the private industry is taking on the burden of managing the fiscal constraints that states at's on budgets, and th driving privatization. i think that is where we will end up. thingshere's a couple on the margin, perhaps 55 to 64, early retirees, there might be a change where you could have potentially a buyout to medicare or medicare advantage for those people who want to retire early

or be sole proprietors, and very, very low-income families who don't or singles have subsidies in the individual markets, you might see some push to that as well. caroline: great analysis. ana gupte, we thank you for taking us through the health care perspective. let's update you on t-mobile and sprint. shares are falling after hours in both companies, after reports from "the wall street journal" that the deal is running into resistance. romaine: you can see the shares falling. remember, they got a big boost when the deal was announced over a year ago, and still haven't managed to complete it. caroline: more coming up from new york. this is bloomberg. ♪

caroline: shares of sprint and t-mobile, sliding after hours after the "wall street journal" reported they were running into resistance from the justice department's antitrust staff. let's bring in deals reporter nabila ahmed. this has been a tough quarter. do we know what the nitty-gritty is? meetingthey had a with d.o.t. staff where they laid out concerns and questions. what my sources tell me, the companies came away from that not super-nervous, thinking they could answer the questions and meet their concerns. and the things they would like to point out is that the review clock, 180 days, that is still within the timeframe period. they have stopped and started, but they are still within the initial 180 day period. joe: obviously one fewer player

in the market is not great for competition. what is the contrary view? what are the main issues that would prevent a deal from happening? nabila: well, that's the main issue. the states have come out and said that as well, that it is dangerous for the consumer. saidber, the states have even if the doj approves of the deal, they will challenge it at the state level as well, so this deal was already facing those hurdles. the other side of the argument, which sprint has made, and has also been criticized, is that they would really struggle without that deal. they have a lot of debt, it is a struggling company. so you could go from 4 to 3, but what if this doesn't happen and sprint fails? you go from 4 to 3 anyway. romaine: thank you. bloomberg's novella on it -- nabila ahmed. results, and you

can see shares slightly lower. intelligence's reporter will take us through the results. first, cloud grew 10%, but that was a slow down from where it was before? i am confused. i thought they were becoming a cloud company. >> they bought redhat, and it will take a while. but frankly, ibm growth has been in the 10% to 15% range, but if you compared to amazon or microsoft, they are much larger whichch faster-growing, is one reason they needed the deal. the bright spots look good. bad spots, systems revenue was down. caroline: why are we worried so much about a slowdown in cloud? anarag: that's why the stock is only down 2% and not more. one could argue it is already up 26% this year, so not as bad a

reaction as you would think if the deal wasn't there. joe: red hat, is it synergistic with ibm? out of it, ormore are they paying more for someone else? anurag: we have been saying the deal will happen. this is probably the last big effort for ibm to remain relevant in technology five to 10 years from now. it is a big issue. frankly, red hat has a different culture, ibm has a different culture, and if ibm isn't going to open up their mindset to be far more open to working with other clouds, whether it is microsoft or amazon, they will have a hard time, because that is what red hat was doing. romaine: why red hat? why was that one to take it to relevancy? looking at the cloud competitors, smaller competitors are getting more attention, software services. why didn't they go after those, which were probably cheaper? anurag: i don't think you would find many companies out there.

the more important part is the hybrid cloud strategy. if you want to be a public cloud player, you have three big elements, amazon being the biggest, microsoft, and then google. after that, everybody is much smaller. roll out pitch is tro to clients who were outsourcing, and tell them that we can help you move certain assets to the cloud, not everything. with hybrid cloud strategy, they needed an open-source company, which is why red hat makes sense. thank you very much. apple and qualcomm reaching an -yearment to end their two legal battle, sending shares of qualcomm soaring, 23%. bloomberg's apple reporter mark gurman is live outside the courthouse in san diego. thanks for joining us. huge move for qualcomm.

what does this agreement open up for them? gives thempple, this quicker access to 5g. i don't think apple would have come to this agreement with qualcomm if it believed it or 5gel could put apple on the map quickly, so they lost some confidence in intel and their own efforts. for qualcomm, this is a big help for them. we were in court for about two hours this morning before this thing totally came to a pause due to the settlement. qualcomm's lawyers were going things,different qualcomm laying off thousands of workers as a result of the situation with apple and lost revenues due to that. so for both sides, it made sense to come to an agreement. a permanents isn't resolution, but a deal for a few years that has to be renewed, is

that right? mark: in terms of the royalty settlement, the key issue we have been dealing with here in san diego, this is the main trial between the two parties. ,his seems to be an end-all be-all agreement. they said it is a six year agreement. six years is a long time. i think this will be a moot point in half of that, two to three years, when apple gets its own modem efforts off the ground. they have been trying to bring more components in house. despite what apple lawyers said, the modem is absolutely one of the most key components in an iphone, so they will want to build their own. caroline: i am fascinated by the innerworkings of this. the ceo taking the stand, and behind the scenes they hash out a deal they have probably been working towards for ages. why this moment? what was said that got this agreement over? apple's haven't seen

top executives testify in this trial. this trial ended before its first lunch break. we were in the third round of opening statements this morning when this thing settled. we heard from apple, and then the contract manufacturers, the consortium of companies that build iphones for apple, and then we were about 10 minutes away from the opening statements of qualcomm finishing when it settled. so we haven't really heard from folks in this specific san diego trial, but i am sure they were negotiating, or of course they were negotiating behind the scenes to reach the settlement agreement. joe: bloomberg's mark gurman, thank you very much for joining us. coming up, election woes in taiwan. we discuss the china friendly billionaire who might be mulling a presidential run against the current leader. this is bloomberg. ♪

romaine: a quick update here. pershing square's bill ackman speaking in new york, saying he sees huge potential upside in chipotle. he also mentioned fannie and freddie, saying it is extremely notresting and timely, exactly clarifying what that means. he also says pershing square has "forsworn" short selling. new entry in the taiwan little race as tsai ing-wen prepares for an uphill election bid. we bring in shery ahn. how big would this be? we arebig, because talking about a billionaire with a fortune of over $4 billion, meaning they could mount a for middle -- formidable challenge against tsai ing-wen. the president has already faced

challenges within her own democratic progressive party, given that her pro-independence stance against china, some say, doesn't go far enough. terry goun's founder says that he would run on the kmt party line. romaine: some of the criticism is that his ties to china appear to be a little too strong. shery: exactly. he's one of the first taiwanese business leaders who actually made a fortune by taking advantage of the mainland's cheap labor and land costs. we know that they are the top supplier for parts for the iphone, as well. production facilities are in china. they want to move into india as well. they have close ties. here's the reason for him wanting to run, he was saying at a conference in taipei. he says he has four grandchildren and three children in taiwan, and he is concerned about their future. caroline: that is the emotive

part. what about what the relationship is currently between president tsai and mainland china and the politics? shery: it has always been the case, ever since the separation in the 1940's, china has claimed taiwan as part of their country, right? and they don't want anything to relationship of setting them apart. we have seen tsai ing-wen being very vocal and being a china hawk, but never really putting up formal opposition against the mainland. that has frustrated some in her party who want more independence from the chinese. but if you ask the public in taiwan, they still sort of favor this ambiguous relationship with china. nobody wants to completely break to joind nobody wants china, either. it has been a very sensitive

topic for the longest time in taiwan. romaine: where is public opinion right now on the question? joe: i would imagine it goes back and forth, but what is the popular view in terms of what the relationship should be? shery: ambiguous. they are not advocating for a clean break from china, because we know china has been clear that if taiwan tries to formalize its status as a sovereign state, that would be grounds for invasion. so the public knows how sensitive this topic is, so they are not vocally wanting a break away from china. caroline: fascinating stuff. we will see how this unravels and how key a contender terry guo is. meanwhile, morgan stanley reports first-quarter earnings tomorrow. joe: and i will be watching the fed beige book coming out at 2:00 p.m. eastern tomorrow. romaine: and don't miss pepsico reporting first-quarter earnings

tomorrow. caroline: that is all for "what'd you miss?" bloomberg technology is up next in the u.s.. have a great evening. this is bloomberg. ♪ xfinity watchathon week has sadly come to an end.

what, what, what! no! but don't let that stop you from watching the best shows and movies from showtime, hbo, epix... jesus, what happened? ...and more. it's just the tip of the iceberg. upgrade now to get more into what you're into. thanks! just say "watchathon" into your x1 voice remote to upgrade and keep getting more of what you love. ♪

♪ ♪ emily: i and emily chang -- am emily chang in san francisco, and this is "bloomberg technology." a global battle that dragged on for years is over. apple and qualcomm have settled differences, at least for the next six years. and netflix gives an underwhelming forecast in earnings, saying price increases in some countries will slow subscriber growth. this as disney, apple and warnermedia