♪ ♪ emily: i'm emily chang. this is "bloomberg technology." in the next qualcomm falls. hour,shares plummet on weak smartphone demand and a downbeat forecast. we will discuss the impact of trade tensions. plus, spotify says that its podcast bet is paying off but shares fall on a subscriber

miss. while streak drills wework, facing questions about its finances. we get a read on investor appetite ahead of a potential ipo. first, shares of qualcomm falling in after hours trading after the chipmaker gave a downbeat fourth-quarter sales forecast. at the high-end, qualcomm is looking at $5.1 billion sales. analysts predicted that is in $5.7 billion. line with a warning issued back in april. demand for smartphones, particularly in china, would be weak ahead of the introduction of 5g. joining us is mike regan and sarah mcgregor. explain whatf all, we are seeing driving this drop. how much does it have to do with china? mike: the revenue forecast for the current fiscal quarter was very light. the eps for the quarter also really light, and adjusted eps of as much as .75, and the

street was looking for $1.10. it boils down to qualcomm's basic business model. it has a controversial practice selling chips to manufacturers, they license chips to them, and they want royalties equal to a certain percentage of the value of the device. caused a lot of litigation problems for qualcomm. they settled earlier with apple this year. there are a lot of questions about similar case brought by the federal trade commission. a judge in the ninth circuit actually ruled against qualcomm. they are waiting for an appeal and there is not a lot of clarity in today's earnings reports. they may be getting into it on the call as we speak but not a lot of clarity about when they can expect resolution on this idea. that means, you know, qualcomm was very upbeat about the prospects for 5g in their earnings report, saying their design wins have doubled. but investors are not sure what

that revenue stream is going to look like because of this unsettled issue with the ftc. they also came out and said until they get a deal with huawei over the same issue, it is unclear if huawei will make additional payments to them. also saying that huawei is taking market share in china , which sort of has ramifications for the entire space. so qualcomm has been on a roller coaster ride this year. it is down 18%. more than 20% now if these declines hold tomorrow. still up 29% on the year. so quite a wild ride this year. emily: quite a roller coaster for qualcomm,, over the last couple years given the attempted broadcom takeover over as well. they also had to cut off supplies, or at least some, to huawei after the trump administration blacklisted it in the midst of the trade war and national security concerns. sarah, give us the latest on talks between the u.s. and china.

we know they have ended, and there's a new set of talks on the calendar for september. do we know if they agreed on anything? sarah: we were left with very few clues about what was actually discussed in this meeting. what we do know, officials really just met for about half of the day, and they said they will reconvene in september, which is weeks away. beyond that, they described the talks as constructive, but no real indication of concrete progress that was made. if we listen to the analysis coming out in the hours since the talks ended, it seems like the sides are sort of settling in for a slow burn in negotiations from now on. the fact they are not doing a lightning round of negotiations out of these meetings in shanghai that just ended suggests things aren't at an accelerated pace at this point. there was speculation, even from trump himself, that the talks

could extend up to or even past the 2020 elections. that doesn't seem like an unlikely time horizon at this point. emily: mike, what does this mean for qualcomm? more uncertainty something i assume investors will not like? mike: absolutely. especially in the chip space. there was a rally in chip stocks since the g20 meetings when it seemed like there was some progress being made. it doesn't seem at there was a huge selloff in chip stocks because of these recent trump as sarah indicated make it sound like these negotiations could drag on past the election. i think that's largely because, while that's happening, tensions aren't exactly escalating. he's not made any new threats of tariffs -- new tariffs at the moment, but obviously that's something that could change day by day. chip stocks, it has been a noisy quarter for chipmakers. because of the trade tensions. , some customers

accelerated purchases of chips earlier in the year to get ahead of what they consider to be an escalating trade tension situation. so it is definitely causing noise in the earnings report. it is not the first thing companies are talking about but that could change if it looks like tensions are going to ratchet up, that more tariffs could be in store. emily: what is the likelihood we are in for the long haul here , and this drags into 2020 and past november? sarah: increasingly, it looks like there is no quick solution to this trade war. if there is a provisional or halfway deal, it's not clear that the trump administration would go for that. it has promised to get tough on china. it's hard to imagine trump would go back on his election bid and say he got anything less than widescale reforms to china's economy and brought them to their knees. so it might be a safer bet for trump to continue the negotiations and hope that the economy ticks along.

he got a rate cut today. whether it is big enough or not, that will help keep the economy chugging. i think this might be a safe for strategy but we will have to see day by day how things play out. in the meantime, the trump administration is still moving forward. they have export controls area there are a lot of other strings they can pull that have impact on china that may put them in the corner as well. emily: all right. thank you so much for the additional context. coming up, apple looking at life beyond the iphone. les, wherend wearab those businesses are going next. this is bloomberg. ♪

♪ emily: apple generated less than

half of total quarterly revenue from a iphones for the first time since 2012. is it a sign that the company is moving beyond the flagship product? the move is not as easy, for life beyond the iphone to be successful. apple will need to keep selling the smartphones, or make the services good enough for those on rival mobile devices to switch. for joined -- we are joined by an analyst, who has a buy rating on apple. tom, what is your take on the now shrinking part of the pie the iphone has? tom: the good news for apple, they have investors to focus on what's next for apple, and you touched on a lot of it. but as we saw today in qualcomm's earnings, you have a mature market for smartphones, and you have seen it in the iphones with declining unit sales the last couple quarters, and i anticipate that will be the case until we have a 5g

device, likely next fall. for apple, it is really about payments, about financial services beyond payments, health care. as you talked about, premium video content. advertising, but in a way that protects the privacy of the consumer, too. i think the story for apple, either the service of story or the non-hardware story depending you want to phrase it is a good one, and investors are warming theo it, which is why stock is up after the earnings announcement last year. emily: they do go hand-in-hand. for people to use the services, they need to use the iphone, and for more people to use the services, may be people need to use the iphone. how does apple drive in the midst of a smartphone slump? tom: the key for apple has been the install base. iphoned news, fewer users are switching to other devices, but they are holding

onto their iphones for an extended time. to the extent we have a catalyst on the horizon, what would inspire them to upgrade? a 5g device. that looks like it will happen next year. so long as they can maintain their install base and key people -- keep people using apple products, it is easier to overlay the services on top, premium news, premium video, et cetera, and that has the stock well-positioned here. emily: we were thinking, yesterday a guest said many apple services are pretty mediocre. there are some doing increasingly well, like apple pay. do you see apple being able to apple-ize some of these other services and make them great, like they have done with some hardware products? that is an excellent question, and b, we certainly don't think mediocre when we think apple. the premium video content, they lined up a plus hollywood

talent, oprah winfrey, steven spielberg. you bring up a great point with apple pay. some years ago, my expectations were really low for apple pay, and they have been far exceeded. part of what they are doing in hardware is more than the smartphones, to the extent you see strength in wearable devices like the apple watch. so i'm a believer that generally speaking low-quality and apple don't go hand-in-hand, so i would never think of their products or services as low-quality. i think of the a plus hollywood talent they have. i think of the success they had with apple pay. i expect that to extend to some other products and services. emily: looking out into the future, do you see the iphone continuing to be a shrinking part of the pie? and how long does it get in terms of a percentage of revenue share? tom: another excellent question. and absolutely. for apple to be successful, five years from now smartphone sales

may have to be less than one third of total revenue. we had thestion, if conversation six to 12 months ago, where is apple in the smart home? the concern was, and there still is today, that alexa or google assistant devices will dominate the internet of things within the connected home. the homepod i think was disappointing for apple, so we will see if there is another way for them to go after the connected home. but a healthy apple five years from now generates less than a third of total revenues from smartphones. emily: less than a third, coming down from two thirds. tom forte, always good to have you here for your insights on the show. coming up, spotify, second-quarter earnings and a miss on subscribers. the ceo said "that's on us." we discussed the. streaming company next this is bloomberg. ♪

emily: spotify shares fell the most in almost five months after slower subscriber growth. the music streaming company reportedly ended the most recent quarter with 108 million subscribers to the premium service, a shade below the 108.5 million forecasted. lucas, what happened? see spotify ass a growth story, a momentum stock. that is what ceo daniel ek has said, so each quarter, they expect spotify to not just hit their numbers that to beat them considerably as another company like netflix has done quarter after quarter. the problem with spotify earnings, they tend to be pretty good at forecasting, so the numbers are either slightly above or slightly below, and investors almost always react negatively. down fivehas traded out of six times after issuing

earnings, although on the whole the stock has done just fine. emily: what does the podcast bet have to do with it? spotify says it is working, but clearly not enough to be the estimates? lucas: one challenge for spotify, unlike video streaming company, spotify has fixed costs. the $9.99, the six dollars that it collects from you, a majority of that goes directly to music rights holders. so spotify is trying a lot of things to reduce the cut that it pays right holders to be more profitable. one of those things, selling tools and services, and the other is podcasting, opening up a whole other area of audio programming. the issue right now, it cannot carve out podcasting from its revenue pool, so podcasting mostly just adds to cost, because there's not a good way to make a bunch of money for it, not good advertising technology around it, and subscription-wise it is not saving the money, so

it is just a good talking point for them right now, not anything making a difference in numbers. emily: how is competition shaping up? example music eating into the pie? lucas: they say no. apple music has grown quite a bit, but spotify grew 30-something percent year-over-year, and they say based on numbers from apple, they are growing half that rate. amazon, youtube have grown, but spotify's still clearly the market leader. the big question, how long can the growth continue? ofthis five years unimpeded growth, or will it slow down more quickly, and can they find a way to reduce costs they pay labels, by podcasting or other means? emily: lucas shaw, thank you for that context. after a year and a half of searching for the home of a second headquarters, amazon chose to split its campus between crystal city, virginia and long island city, new york. shortly after the decision, we saw the downhill of the new york

campus as local politicians pushback and amazon pulled out. since then, u.s. cities have upped the ante to persuade the seattle giant to bring new jobs to other locations. one city, nashville, tennessee. amazon announced its operational center of excellence would move to the city, to the tune of 5000 jobs. we caught up with tennessee's governor about the move and plans to bring other tech giants to the state. >> we are a state with a very business friendly environment. no income tax. very little business taxes. a regulatory environment friendly to businesses. so companies know that about states. we're very fiscally soundly managed. companies know that, sort that out, and then they look at incentive packages states have to offer. we certainly deal with companies that way, incentivize companies

to come there then they look at workforce development, and we made a tremendous push in our state to create workers for companies that are coming there. particularly tech companies and technology-based companies. our administration has done something, the future of workforce initiative, establishing the kinds of education, curriculum and pathways that create the workers of the future. emily: there are some tech companies already there. lyft, postmates, mitsubishi moved some operations there. what in the future can you offer tech companies? you are making the case here in san francisco this week, to put a bet on tennessee. governor lee: i think the biggest thing we can do, show to them our commitment for workforce. technology-related jobs require a workforce of the future, and

they require an education system, i believe, that understands the needs of that workforce. we've created something called futuree act, the workforce initiative. those are legislative initiatives that in fact create workers of the future, changing the way middle schools and high schools look, and ultimately changes the type of skills that people and workers in tennessee have. we need to be a place that when lyft is looking to expand their operations in tennessee, they know they can add the 1000 jobs they need. or amazon will know the 5000 jobs they will need to fill, there wo will be a workforce too it. that investment is important. emily: nashville overwhelmingly rejected a transit bill that would have brought light rail to

the city. do you see a risk that nashville or tennessee might not learn the lessons of seattle, which sought rising housing costs and a traffic crunch because they didn't move fast enough when amazon came calling? governor lee: we have to lean on this. what i think is most important that we have to do, and we talk about this in the department of transportation, other municipal leaders. we need to think about transportation is going to look like in the future. investing in a multibillion-dollar system that may be antiquated by the time it is built is not what we want to happen. i think transportation is rapidly changing. if you talk to some of the companies here about how people are going to move, that's what we need to be investing in from the transportation standpoint. we do have to stay ahead of that curve,. in our major cities in tennessee, we want to be ahead of the growth curve as much as theible, so we can not make

same mistakes other cities have had to make and have had to learn. we will learn from their mistakes and not remake them. emily: as we are having this conversation, you have capitol hill increasing scrutiny of big tech. the department of justice, ftc opening antitrust reviews into big tech, ftc looking at's facebook specifically. facebook, google, amazon, do you think these companies are too big? ,overnor lee: first of all washington has an opportunity and they have a role they play in the topics you are talking about. but i am a business person, who sees these companies primarily as an opportunity to create jobs. when the market allows them to grow and flourish and create more jobs, that's good for states like tennessee.

if they are in our state and growing and flourishing, i think that's good. emily: what would you say to those who say these companies are stifling innovation, or need more regulation? anernor lee: i think there's appropriate place for regulation in our world. safety, forof, for protection of rights, that's really important we look at that. but government needs to stay out of businesses to the degree they can. there's a right balance there, and we have to find that balance. but i am a free market person, who believes businesses when thriving are really good for the economy and really good for jobs. emily: our conversation with tennessee governor bill lee. well, if you want to short beyond meat, you will have to pay for the privilege. the cost for shorting the veggie burger maker is the highest among all u.s. stocks. beyond meat has risen over 700%

at almostipo in may, 45% of the free float has been borrowed for shortselling. coming up, testimony in age discrimination cases against ibm indicates the company may have 100,000 many as workers. details and reaction from the company next. this is bloomberg. ♪

emily: this is "bloomberg technology." well, it finally happened. the fed delivering its first interest rate cut in over a decade. here is fed chair jay powell, announcing the news. >> we decided today to lower the target for the federal funds rate by .25%. of 2% to 2. 25%. the outlook looks favorable, and this is designed to support that. emily: the news sent u.s. equities into the red, fueling speculation the central bank is not necessarily at the start

of an easing cycle. i want to bring in pimm fox, in new york. the president tweeting his displeasure, saying "as usual powell let us down, but at least --is ending quantitive quantitative tightening, which should not have started in the first place. we are winning anyway, but not getting much help from the federal reserve. [laughter] what does this mean for tech? pimm: it is that combination of times when economic news and financial news combined with technology news, particularly when it comes to president donald trump. as you mentioned, perhaps he was looking for more than just a 25 basis point rate cut. in the press conference that jerome powell gave after the federal reserve's decision, there was a little bit of back and forth in terms of the wording he used because he at one point talked about how this was not the beginning of a rate cut trend. so you started hearing the quote

around the newsroom and trading rooms, one and done, does this mean the federal reserve will not be cutting rates in a meaningful way by the end of the year? something the president has said repeatedly he wants to have happen. that also helped send stocks lower. but the notion being, if this is cut,one 25-basis point will that be enough to sustain stocks' move higher? plus, the comparison between rates in the united states and in other developed nations. in many cases, they are negative. so on a comparative basis, it is as if the u.s. is expensive. what was interesting, the dollar rose as a result of the rate cut. it was supposed to really go the the index oft dxy, the u.s. dollar, moved higher, and that's the opposite of what the president tweeted he wants.

iswants a weaker dollar, and concerned to china as well as the european union, the ecb, are in a way keeping their currencies cheaper than the dollar for competitive reasons. emily: meantime, a number of tech companies we don't talk as much about on the show, having company-specific reason. beyond meat, up almost 700%. a bit of a blip on news of a secondary offering. amd, fireeye, tell me about the individual stories. speakseyond meat almost for itself. beyond rational, to a certain extent. while sales are great and the company is generating a lot of positive publicity, and as you mentioned i believe the company came out during its earnings announcement, day before yesterday, that they were going

to raise more money by issuing more shares. of course, that ends up diluting the existing shareholders. but having said that, it is still a small company, when you compare it to, like, archer, daniel midland, conagra, any of the packaged food companies. but this has taken on a life of its own, and reminds some investors i spoke to of tesla. you have the big public excitement, but when you look at the actual numbers involved, it's not necessarily a company that should enjoy that level of market capitalization. on the other hand, we talked about chips, mentioning amd, qualcomm. let's begin with qualcomm, only because qualcomm and huawei are seemingly linked, because qualcomm is still waiting to get paid for a variety of products

huawei cells in china on behalf of qualcomm. qualcomm has made a bet on 5g, story has to do with everything from chips that measure battery efficiency to device to use the both high-frequency and medium-frequency spectrum, and qualcomm has a big advantage there but trade disputes with china, battles with huawei, that's not something that sat well with investors. qualcomm said they won't be able to meet earnings estimates. emily: all right. lots of big moves, pimm fox. thanks for breaking it down. good to have you with us. asl, ibm laid off as many 100,000 workers in the last few years, according to a recent lawsuit. big blue faces several lawsuits claiming age discrimination

against older workers. in one suit former employee , a alleges it was part of an attempt to make ibm appear cool and trendy as it tried to appeal to millennials. olivia carville joins us now, with more from new york. olivia, there are a number of lawsuits here. talk to us about the allegations. olivia: we have a class-action lawsuit filed in manhattan and different civil suits filed across the country in california, pennsylvania, and texas. the similar thread between all the cases, they are alleging ibm has been firing older employees in order to bring in and retain new, younger workers. they actually call these cases a fire-and-hire discrimination scheme, and they allege ibm has been carrying out this kind of which is thetion, term the company uses for layoff, since as far back as

2014. emily: ibm in a statement said, we have reinvented ibm in the last five years to target higher value opportunities for clients. the company hires 50,000 employees every year. tell us a little more about how the company is responding. olivia: ibm is a 108-year-old company, and for the last seven years straight has faced fading revenues. it has been trying to reinvent itself. it's kind of totally missed the mark in the cloud computing revolution, lagging behind the likes of amazon microsoft, and , google for about a decade, so the company is on this new growth trajectory, bringing in hybrid cloud and trying to become a whole different company that focuses on newer technologies like artificial intelligence and hybrid cloud, . $34 billionired a acquisition. part of the strategy of laying off older workers, bringing in younger workers, to turn the

company around and become, as we read in the deposition, a cooler, trendier company where young talent would want to work for ibm, in a similar way they would want to work for google or amazon. emily: all right. olivia carville for us, in new york. thank you. well, hulu is deepening ties with the walt disney company. in the wake of a disney-fox mercer, the hulu originals team is joining walt disney television. shares of disney tv studios -- the chair of disney tv studios speculation ofd whether disney can create compelling tv shows not tied to licensed titles. in may, bloomberg reported disney could take full control over hulu in a deal with co-owner comcast. coming up, while jeffrey epstein could be waiting up to a year to go to trial in the midst of sex trafficking allegations, silicon valley executives wasting no

time distancing themselves from him. we will discuss next. this is bloomberg. ♪

emily: jeffrey epstein facing charges of sex trafficking underage girls, has long claimed a social circle of powerful in washington and wall street, but a different group of elite now distancing themselves from even the previous encounters with epstein, the investors and entrepreneurs of silicon valley. the way these contacts came about is jeffrey epstein's little black book, his contact list, addresses included a lot of names we recognize here in tech. tell us. >> certainly. sergey brin, richard branson,

people with relationships going back a long time, but they were only marginal relationships. it wasn't they had seen him and hung out with him a lot. by the way, bill gates was one of his calling cards. he would say he did tech services for bill gates, and when you look at the financial community, they say this guy did services for bill gates, he must have been all right, but bill gates told us today that's not really true, that he may have spoken to him once or twice in a philanthropic context, but there was not any real work done for bill gates by epstein. emily: right. gates saying he never provided services of any kind, and discussions they had focused on philanthropy. sergey brin declined to comment. richard branson said there is no personal or business relationship between the two, nor has there ever been. reid hoffman hosted a dinner in palo alto for a famous neuroscientist, where elon musk supposedly introduced epstein to mark zuckerberg, so all three of them get pulled into this

discussion. reid hoffman saying he has had only limited contact with jeffrey epstein, always at request from academics and in the context of academic fundraising. elon musk denied introducing epstein to zuckerberg, saying he's "obviously a creep." a zuckerberg spokesman said they had only met in passing. and did not communicate again. but what are the implications, though, of even the hint of contact between these folks? >> by the way, the dinner you just referenced, that was only a couple of years ago. and that means that was well after epstein was declared a registered sex offender. what is atreally stake here. in new york as well, you have a massive private equity firm, apollo, whose cofounder had a deep standing relationship with jeff epstein, and their own investors now say this care is a -- carries a reputational risk. to say you are a venture capital

founder and you had a relationship with epstein of any sort. your lp's might be asking why. why, especially if it lasted past 2009, after he was a registered sex offender. as early as last year, one instance in a story by sarah mcbride, the founder tried to talk to epstein about andntially donating funds, then did research on who he was and decided not to take the money, because of who he was. but a lot of these relationships are well before 2009, so it is really the relationships after that matter the most. emily: saying that he turned that money down. but fundraising is tough. all right, i'm sure this will continue to evolve. thank you so much for joining us. erming up, samsung, anoth smartphone maker in the trade war crossfire. how the economic slowdown is weighing on the south korean

giant, next. this is bloomberg. ♪

♪ emily: samsung shares tumbled after the company said wednesday second-quarter profits more than halved from a year earlier. the south korean company saw net income fell more than 54% while revenue dropped 4% amid global trade tensions and a wireless industry slump. the u.s.-china trade war has rattled the global supply chain weigaid on the price -- hed on the price of memory chips. selina wang joins us to discuss. these are pretty dramatic numbers. and coming off apple's results which were not amazing but certainly not this bad. is this more of a samsung-specific problem than something that has to do with trade or smartphones in general? selina: they beat some estimates on some fronts, but they did see falling net income, operating profit, and revenue. the big story for samsung has been an industrywide story

around memory chips. the whole industry has suffered from low demand, falling prices, part of that because of the overhang from the trade war, economic uncertainty as well as slowing demand from new data center players. but we heard some positive news from samsung -- they are expecting demand to pick up in the second half of the year. a big sign was they expect these data center players to reconsider purchasing again. we also did see declines in their mobile business. 42% decline in operating income. the whole industry has been dealing with problems, but they did say profitability was eroding because of intensifying competition in these low to midrange markets. some samsung-specific issues, but they've also been dealing with a lot of global geopolitical overhangs. emily: talk to us about how the u.s.-china trade war, and the dispute between japan and south korea are impacting samsung specifically. selina: one of the biggest overhangs is how long this

u.s.-china trade war will drag on and how much it will affect global growth. which of course impacts purchases of smartphones, as well as all the components. the japan-south korea spat is also a huge concern for investors. there were a lot of questions from analysts on the call about how they would minimize the impact. we did not hear a lot of details from executives. we know they have enough components for now, despite the export curbs. but the problem is if these do drag on, if they become even broader, how will samsung find alternate suppliers? that's going to be difficult and could lead to production issues. and on the huawei front, that is a double-edged sword. on one hand, as huawei suffers from challenging demand abroad, that is a way for samsung to come in on the smartphone front, but in terms of their profitable chip business, that is damaging

if huawei is not able to purchase as many components from samsung. emily: samsung has also faced branding issues. they tried launching a foldable phone with much fanfare this year, and they were problems with the phone breaking down. they pulled it back. how are those kinds of issues impacting demand, for samsung phones? selina: as you mentioned, they have had a slew of branding problems, and have seen declining profits in their mobile division. they also made a statement that smartphone chips in the current quarter will be similar to april and june. that suggests the launches might not be as successful as some hope. but some bright spots in the earnings. one of them, the oled displays. we saw apple earnings with stronger demand than expected, so that's a bright spot to support samsung earnings in this display screen area.

spot, the growing demand for 5g chips, but that is still early stages and there's a lot of skepticism among investors of how that plays out the rest of the year. but worth pointing out as well, another reason why there was negative share impact after their announcement, they ended up delaying announcements in shareholder return plans until next year, citing some concerns to global growth and geopolitical uncertainties. emily: so what are you watching for samsung, when it comes to the second half of the year, the holiday quarter, which always tells us so much about how the company's actually doing? selina: we'll definitely be watching to see how the new smart phone launches unfold. they are faced with a lot of competition. they said that themselves, in the lower to mid tier market, a lot of cheap phones coming from china, and also watching for memory chip demand to see if it

starts taking off. there has been a lot of conversation that the problem might be reaching a bottom in the second half, the data center players accelerating demand playing out. the biggest issue for samsung right now are these geopolitical problems they can't really forecast themselves. analysts asked during the call, how are you forecasting the impact? they said that there's a lot of uncertainty, and they themselves are unsure the best way. however they execute on their own plans, there is only so much they can control when it comes to the global spats. emily: selina wang in hong kong. thanks so much for that reporting. analyst dayd an as the company prepared for an ipo, intending to go public in september, expected to be the second biggest public offering of the year. targetingsaid to be

a share sale of $37 billion. what do we know about this analyst day? ellen: we don't know a lot. we know wework has heard analysts from different banks come in and hear about the business model, tried to get a chance of how they might -- get a chance to assess how they might cover it, at the office in new york city. nda'salysts had to sign to agree to not discuss what was shared until after the ipo. emily: i don't remember uber or lyft hosting an analyst day before a formal roadshow. ellen: the s-1 for we work -- wework has not yet been made public. they filed confidential documents to the sec, and in april announced the filing, but we haven't gotten to see them. the company is aiming to do an ipo in september, based on our reporting.

so one would think there's a chance in the next month we might get to look at documents that show wework's earnings and losses, which many people are excited to look at. it's a company that has gotten attention for its unusual financial metrics, community adjusted ebitda, things like that. people will be interested. emily: let's talk about what analysts are looking for. what are the questions they want answers to? ellen: they are trying to determine whether to look at the company as a real estate company or a tech company. that is something wework has gone back and forth about. they want to be seen as a tech company, partially because they are interested in getting that multiple in the market, a much more valuable proposition for them to be seen as such. of course, many people look at them and think, this company takes on leases, rents out parcels of real estate and should be considered more like a

real estate company or an investment that is modeled more on how real estate models are done. emily: you mentioned to some of the unconventional metrics. there's some controversy around the founder, how much money has been taken off the table. what is the status of that? ellen: that is part of the story of wework people will try to get their hands around, deciding how to value the company. you mentioned founder and ceo adam newman took out loans against some holdings, and wework has sold some of his equity in the company. he's also been known to have personal holdings of real estate that wework then takes leases in. the company has made steps to try to resolve some of those perceived conflict of interest, but it is something i imagine is on a lot of investors' and analysts' minds, could this be a problem as it goes public? emily: and do we have a sense of how much money they are making, if they are profitable? ellen: they aren't profitable.

but that's why we talk about community adjusted ebitda, by which they see themselves profitable on a building by building basis, almost like the equivalent of a unit economic type of approach, looking at an existing building in place for 12 or 18 months. does that building itself make profit? removingyes, but it's a lot of expenses other people might think should be counted. huet, i know you will keep us posted, if we get that filing. thank you for stopping by. that does it for this edition of "bloomberg technology." we are livestreaming on twitter @technology. this is bloomberg. ♪

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