>> i'm taylor riggs in san francisco. this is "bloomberg technology." space up, the office rental company's initial public offering conditions, is it enough to calm investors nerves? flare.uch fan in jumps in its trading debut after raising $25 million.

who says all unicorn ipo's current magical? and, the genetic code of ethics. in our medical technology series, we sit down with the coinventor of crisper to discuss gene editing technologies and the future of fighting disease. but first our top story. nasdaq as theked venue for its listing. the startup is making changes to its corporate governance to address investor concerns. no member of the cofounders family will sit on the board. at one point wework was valued at $47 billion. now it is expected to be worth $15 billion. we were joined by the ceo. has beenrk, jillian covering the story for us. let me start with you. how shocked where you that they are doing this ipo?

>> if you read bloomberg, you shouldn't be shocked. i'm losing track of days. this week is crazy, but we broke this week that the company was weighing corporate governance changes because tepid demand from investors had caused investors to rethink how they could improve things. not shocked this morning. were maybe more drastic than we were thinking. i'm not sure if you want me to rattle through them quickly, but there's going to be a lead director, and the votes from adam newman will go from 20, back to 10, and one in the event of his death. the board will be able to choose his successor. taylor: so you heard jillian talk us through those corporate governance changes. from your perspective, is that enough? >> that is the question that investors are going to be

asking. is this a step in the right direction? the key thing to think about is the responsibility to the board once the company goes public. taylor: what more would you like to see? >> the big issue that is on people's minds is the level of control that adam newman still has. if you look at the three classes of stocks, he's got super voting. d bring it down from 20 to 10, he has extra voting, and he will still be able to appoint who is on the board. taylor: what else would you like to see? what other changes do you think would be appropriate? >> there was some talk about diversity. but until you see how they are going to do that, it is still a? for people.

taylor: jillian, we talked about corporate governance changes being enough for investors. a lot of the concerns on our end were an income thing. is it a corporate governance problem or a financial problem? >> i think it is a little bit of both. we've been reaching out to investors. some early feedback has been that these changes are not enough for some investors who are focused on financial performance, who can't see a roadmap to positive cash flow. sense ofillian, any what investors this does not go far enough for? yous soon as we get some, will be reading about it. if anyone wants to get in touch with me, feel free. my twitter dm's are open. seen in ourve

reporting today that socgen is in talks to invest in the ipo, which would represent 25% of the ipo. taylor: right. abby, you are nodding your head when we are talking about if this is a corporate governance problem or financial problem. which is it? >> it is a bit of both. ,f you think about the board and this is something we talk about all the time, it is first and foremost oversight and accountability. as i said earlier, adam newman will still appoint who is on the board. how much can they do their job and push hard on that oversight and accountability responsibility? second is risk management and third is their contribution to's tragedy. -- to strategy. taylor: you mentioned the roadshow. what is the biggest question you

have on the roadshow on monday? >> where the valuation stands and where it is going to rise. they will have five to nine days if they try to go public by the following week. i know it is a jewish holiday and he is quite observant. the time crunch is interesting. it is a shorter roadshow than we have seen. they are raising a lesser amount of money, but it will be probably longer than the wework roadshow. we are live on the next nine to 10 days. of a look at sort the composition of these boards. you mentioned the board holds the ceo accountable. you don't have that with elon musk in tesla. you don't have that with mark zuckerberg in facebook. is this a tech problem where you have these visionary leaders, but is the board really holding them accountable? >> it is interesting that you

are associating it with the tech industry. that is the heart and soul of the san francisco bay area. what is driving this are the relationships these ceo's have with investors before they go public. more, theho needs who venture capital investor or the ceo. or maybe it is just on a less cynical note a trusting relationship. however, these governance problems and these challenges that we are seeing are born out of the relationships that are established when the companies are private. taylor: we await the roadshow monday. that was abby and bloomberg's jillian tan. i want to stay with wework and talk about how it has impacted softbank. softbank has spent more than $10 billion in wework and is a key financer. on tuesday the california

legislature passed a labor bill that could force gave economies to incur substantial new employment costs. that affects softbank's investment in uber and doordash. to discuss the rough week that softbank has endured, i'm joined by lizette chapman. walk me through this. let's start with wework. what was softbank's reaction to this wework ipo? >> that is not something i reported on in my story. that is something jillian talked about. definitely not going to be good. if you invest in a company at $47 billion and a few months later it looks like it is going to be worth $10 billion to $15 billion, that is not a good look. it is especially difficult for softbank right now because it is working to raise a second mass

of funds. time to go toeat investors when some of your initial bets have fallen so flat, not only we work, but all companies.g economy ultimately the cost could be significant for softbank. taylor: talk to me more about softbank's reaction to uber, ly ft, assembly bill five, any concern about how that could affect them? >> there is a major concern. some analysts have put the price yft atse to uber and l around 30% for additional payments for health benefits and maternity and paternity leave and the like if they are forced to reclassify their employees.

there's questions around the valuation and some of the financial assumptions around wework. as you discussed in the previous segment, a lot of people having trouble getting comfortable with some of those assumptions, that there is no path to profitability or it is a sketchy one. another one is the looseness that softbank have played with emerging business models that rely on things like the gig economy, the classification of workers. definitely affects the way they value it and they approach their oordash,nt in uber, d and the dog walking app as well. taylor: lizette chapman, thank you for joining me. coming up, huawei. the message to the u.s. government as we look at their

plea, next. this is bloomberg. ♪

taylor: u.s. chipmakers have a message for donald trump. hurry up and let us sell to huawei. the lobbying group sent a letter asking the president to make good on his promise to ease the ban on sales. that is because american companies need special permission to supply huawei. joining me to discuss in los angeles, sarah mcgregor, and with me in studio, our own ian king, who covers the chip industry for us. sarah, how likely is it from your perspective that we could get maybe in easing from that

ban? >> we reported that the trump administration is considering an interim deal with china, something that could unfreeze the conflict right now. what is not clear is whether that will still include huawei special licenses. that himself has promised he was going to try and ease that ban. he told chipmakers the same thing in july. we haven't seen a single special license issued to a company. it really does look like the trump administration is holding this as leverage. it is hard to see right now if they are going to give up that leverage so easily. companies arehat involved and what do they want? >> any number of companies.

china is the largest market. you name it. companies that you've never even heard of, they need this access. huawei is a big customer for them. that is not to say they haven't been supplying huawei in the interim. there was the initial shutdown, then they looked at the rules and regulations and found out, we can sell quite a lot of what we have regardless of this clampdown, but this would make the situation more stable. taylor: sarah, aren't these companies worried about ip theft? doesn't this get around that issue of protecting your data? >> what the chipmakers are arguing is the products they are selling to huawei or international security concerns. huawei is on this trade blacklist for these concerns.

there's links potentially to the other activities like spying which the company denies. these companies are saying they are not caught up in these allegations. so i think for them it just doesn't make sense. according to this letter that they've written to secretary ross, the longer that they lose their links to huawei, their profits are lower, they have less money for research, and they lose some of their global dominance. it is really chipping away at these companies' dominance in the global marketplace. taylor: that brings me to my next point. we were on the earnings call. they hinted at what sarah was pointing out. they are being hurt by huawei, but apple is a bright spot.

how can you see companies overcompensate some of the losses from huawei? >> they can and they can't. this company is the third biggest buyer of chips in the world. it is getting chips from somewhere. to echo sarah's point, the biggest concern -- micron can't sell huawei. if it can't do that, huawei buys it from samsung. it is not hurting huawei, not strengthening the u.s. position against china. that is something they really can't make up for. taylor: you had another great story about the funding environment for startups. do they avoid china altogether? >> i was interviewing someone and he was saying he had taken investments from china and there was nothing wrong with that, just another investment. now you have to be careful.

you don't want to risk have somebody investing and you get put on a list with anti-security concerns. in his mind, that changes the whole equation. you have to go after domestic money. andor: and outside domestic china, are there other countries that take advantage of this? there is a lot of sovereign wealth funds out there, that have-- countries interesting relationships and reputations. you have to be careful of those. maybeample he gave was, we are going to japan. taylor: for all things china and trade, ian king and sarah mcgregor. thank you for joining me. coming up, year of the tech ipo continues. ceo,onversation with the

next. and bloomberg technology is livestreaming on twitter. check us out. follow our global breaking news network at tictoc on twitter. this is bloomberg. ♪

taylor: now to a developing story. disney ceo bob iger has resigned from apple's board. this happened on september 10. iger is stepping down as apple is becoming a direct competitor to disney in the streaming space. cloudflare rose as much as 30% in its trading debut, improving momentum for unprofitable withnies going public other large ipo's ahead. bloomberg spoke with cloudflare 's ceo from the new york stock exchange. >> we really had a great team behind us, both at cloudflare

and in the advisors and investors and bankers that we were able to work with. you are always nervous going from a private to a public company, but we were well prepared and we are in this not for any short-term performance, but how we are going to build a really enduring business that can fulfill our mission of helping build a better internet. >> investor perception, how did you find that during the roadshow? >> there's been volatility in the market during the short term and there will be volatility that we live through. that is the nature of the markets. it has been fun for me today because my dad was a stop ruger and i watched -- a stockbroker and i watched the floor of the new york stock exchange my whole life. i think we have a really big opportunity and we want to build an enduring company over the long term.

>> you've been following money into growth, but at what point do you turn to profit? >> the year before you go public is a special year to make sure you've got all the systems and processes in place so you can have real stability. g&anvested a lot into our resources to make sure we had stability and infrastructure to be a public company. so we are confident that we will be able to continue to execute and that this is a really big market, and we will be able to be a company that can thrive in the long term. >> you have a tough job with some of your customers, protecting the public from white, terrorism. what is the decision-making process behind that? wewhen we started cloudflare realized that what we were competing with was on premises

hardware by companies like cisco. the reality is that bad content flows through those boxes all the time. it would be strange if they were making a determination. we've always been reticent about playing the role of internet content arbiter. but sometimes there is content that is so aberrant and there are platforms that are designed to be lawless. in those cases, sometimes we have to step in. largely, our team is dedicated to working with public policy officials, law enforcement officials. the fbi has been a customer for a long time. they have great data on who the bad guys are. than 44 billion cyberattacks on a daily basis. in 90 countries around the world. negotiations are coming up next year.

are the trade talks and tensions between the u.s. and china affecting that? >> we have renewed and they have been a terrific partner for us. i don't think that we've seen any challenges from the u.s. or the chinese side. i think what we've proven is that we can be a good partner in china. for a company of our size and scale, very unique. if you care about any market in the world, we can provide you a consistent platform. what i thought has been interesting is the chinese economy has slowed down. that has resulted in chinese companies looking for ways to expand outside china. we have worked with brands to make sure they can sell to india, brazil, and other markets. while there might be tensions countries, the

u.s. is an and or mass-market. china is an and or mass-market. i think there is a real opportunity to help facilitate trade. in the long term i think it is going to be fine. ceoor: that was cloudflare matthew prince. thing that is changing the auto industry, volkswagen is unifying its units with an investment of as much as $8 billion. that will make it easier for the world's largest carmaker to share parts and technology across a dozen brands. coming up, it was a big week for tech. the u.s. government cracking down on silicon valley's giants. those stories, next. this is bloomberg. ♪ devices are like doorways

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>> this is "bloomberg technology." i am taylor riggs in san francisco. u.s. lawmakers are not letting up in their investigations into whether big pack is too big. bloomberg learned the federal trade commission was looking at amazon, trying to figure out if it is squeezing out smaller businesses. we got more details on the probe into google. letters committees sent to google, amazon, facebook and apple.

joining me to discuss this and all of the other topics in this week in tech is the chief investment strategist at securities. let's talk about antitrust. do you feel that regulatory scrutiny is justified? >> absolutely. these companies are the time,ast networks of our except they can see through the tv into our home. somebody said facebook doesn't need to get your resume because they already know everything about you. there is clearly an issue here. the problem i am finding is there are so many different by ftc,eing looked at by the state attorney general, the house judiciary committee. there are all kinds of different levels. there is anti-competitiveness,

privacy, et cetera. there are a lot of things to juggle from a legal standpoint. you mentioned the legal standpoint. can you talk about the lease of fees, or is there a real threat to this business that could impact the bottom line? >> if you are talking about facebook and google and apple, they are generating so much cash that the legal fees are going to be a pretty minor impact the bottom line. most are buying back their stock every time it dips so they are able to make that up. i don't think we will see legal fees being a driver. qualcomm has been fighting with apple, not as much anymore, for years, and that didn't really have a huge impact on the bottom line. i don't see legal fees being an issue. you are probably going to have

payments you have to make. facebook's $5 billion payment they had to make was lower than a lot of investors were expecting. that was why the stock rallied when that was announced. taylor: tuesday was apple's big event day. announcement was more surprising than you thought. you reiterated your by on apple. what was your biggest surprise? we haveto set this up, seen apple for the last couple of years transitioning from being a hardware sales company to something selling services. this is a slow transition, but they want to keep attacking and sell services into it. this announcement on tuesday was more pleasantly surprising and positive for that methodology. they did have the high-end 11

pro, but they kept a cheaper the xand they also kept are, and the eight. there really is a spectrum of devices you can buy to get into the apple ecosystem. you also have apple tv and the apple games platform being offered for five dollars per month. but, apple tv is being offered usersee for qualifying buying new phones. into getting more people the platform, selling more services, and generating what i would call and annuity revenue stream. it is much more stable and could be higher margin. taylor: another big issue this week was a preliminary look at assembly bill five, which would require -- required gig economies to treat contract

workers as employees. how much of a hit is that? >> that was not necessarily surprising. they had been going through the california senate and the house approval and i don't think of it -- i don't know if it has been signed into law. hoover -- uber and lyft and the other gig companies have been coming out and saying that drivers are not employees. they are customers. uber is just a service which connects the writers with the drivers. both are customers and both are paying service fees for the use of the app. they are going to make that case as strongly as they can. the truth is, it could add to 30%r driver fees as much as if it actually is pushed through just in california. be years and to

years of appeals. it is not something that is going to happen quickly. both uber and on lyft, because we don't see them generating profit anytime in the near future. taylor: quickly talk to me about that. i was fascinated by your research. you look at social media companies. why? >> we look at them kind of the way they look at themselves. we measure new users the same way we measure a new user on instagram or twitter, by looking at, is the app being downloaded? our whole philosophy is measuring fundamental things so it can tell us what to do rather than us deciding what the theme is and coming up with an answer. we look at what happens on a weekly and monthly basis as far as new app downloads, page views, ratings. the week in tech, that

was a great recap. eric ross, thanks for joining me. are medical technologies -- wrap up the future of gene editing and sequencing. that is next. this is bloomberg. ♪

taylor: all week, we have brought you stories of innovations and investments in a medical technology series. today, we focus on jennifer crispr, a we focus on powerful tool for editing genomes. it has also brought up science and moral considerations. take a listen. >> 2012 is the year of a

landmark discovery. .t is called crispr there is a dispute over who discovered it, but now scientists can cut out faulty sections of dna and replace them with healthy ones. >> is cheap. it is easy to use. i have watched people use crispr in a laboratory and there were no more scientists than you and i. it gives you all kinds of power. the concerns are that people would use this to increase the strength of their offspring or try to affect personality. of gene editing advances using crispr is growing worldwide and soon china steps up its efforts to dime night the sphere. in 2018, this happens. >> irresponsible, inappropriate. that is how to of the inventors

of a gene editing tool are describing a chinese scientists's experiment to make genetically edited babies. >> from what i read, he had high-minded ideals and i think his impression was it was going to be welcomed. the audience found it pretty horrifying and the chinese government turned against him. the interesting thing is every time a new technology comes along, everybody talks about it as a pandora's box. that is true. there is always risk, but that is the story of science. the whole idea is to open these boxes and see what is inside. open a box, there is another inside it and that is what is going to happen with crispr. the revelations and controversies will continue. that is just the way science goes. taylor: here with more on this technology as well as the

ethical and investment considerations, jennifer doudna, the coinventor of crispr. welcome to "bloomberg technology." how does this work? forifer: it is a technology rewriting -- it works by cutting dna and triggering cells to make a precise alteration in the dna sequence and that can propagate through an entire organism. taylor: how do you see this being able to be scaled? could we see it in large trials? jennifer: what is amazing about crispr technology is it affects all of biology. biomedicine, but agriculture, synthetic biology. able to affectly g&a sequences. -- dna sequences. taylor: do you see it in the coming years being marketable? being a product that people

could use? jennifer: the amazing thing about crispr is that within two years of the initial publications, there were companies founded. we now have several companies that are publicly traded, all interested in applying gene editing. verge of aare on the real transformation in the field. taylor: any timeline you think we could see that? >> certainly in the next five years, we will see clinical trials proceeding. we are hopeful about those. taylor: in the introductory package, and a lot of it is focused on china. do you feel that china is leading the way more on this stand the u.s.? jennifer: is really mixed. the amazing thing is it is being used globally, it is widely available. everybody can get access to it if they want to and deploy it for better or worse. taylor: do you wish that maybe

would be taking more of a lead here? jennifer: i feel that at the moment, commercially, that is happening for u.s. and elsewhere. taylor: talk to me about the types of businesses, where we could see this. we talk about cancer, alzheimer's, parkinson's. where do you think they would be a product developed? anyifer: essentially, disease that has a single gene that is the genetic basis could be in principle cured using crispr. the challenge is how to get the crispr technology into the cell or it is needed. i think the early ones will be led diseases or in organs like the eye, where we can deliver locally. taylor: you said using cells outside the body. is that where the technology is? you think we could transition to

using cells inside the body? jennifer: we are not there today, but that is absolutely where it is headed. taylor: a timeline on how long you think till we get there? jennifer: it depends on new technology for delivery. we are at least a few years from that. taylor: do you have any regrets, if you will? we talk about the ethics, hotly debated topic. any regrets or do overs? jennifer: no regrets, but i think it is important for scientists and everyone to be actively engaged in the opportunities and the challenges. taylor: what would you like to see from regulators to make sure we are using this technology responsibly? pleased that the world health organization and national academies have worked together to put together teams of scientists who are looking into the technology and its and makinges important guidelines that will

be the basis for future regulations. taylor: is the world health organization enough or do you need more local rules? like in china, he felt he went a little rogue. there were not controls on the local level. jennifer: i think we need both really. it is hard to imagine how you would enforce global regulations, but i think there are standards that will set the stage for regulation. taylor: have been some other ethical concerns. i'm glad you are here so we can talk about gene editing. what is the case against that? clearly, itll, very is premature to be doing that for multiple reasons. the science and technology is not ready and we have not had the conversations about the ethical implications either. taylor: where would you like to see those conversations go? jennifer: i would like to see them go in a direction of

transparency, discussing how this kind of technology could be used in the future to benefit human health and also may be where we should draw some lines. jennifer: can you talk about anything you are doing now? who invented crispr six years ago or so. any new technologies you are excited about? jennifer: i think there are two real important challenges in the future for this technology to be really impactful. one is figuring out the delivery challenge. how to beget get the molecules into the same cells? we are also interested in pushing the future of the technology by looking at ways to change the sequence of dna in a precise fashion to not only disrupt genes but also introduce new jeans. -- genes. taylor: so much in technology has been about ip theft and protecting intellectual property. from your perspective, do you see any concerns in health care

technology about protecting your ip, protecting some of that property that you worked so hard to develop? jennifer: there always needs to be a balance between protecting ip so that advancements can be made and investors will want to invest in technology, but also making technology is widely available for future advances. that is what we see for a platform like gene editing. we want to see it widely deployed but we also want protection for companies. taylor: thank you. that was professor jennifer doudna, coinventor of crispr. biotech headed to wall street. trading on wall street. the company is designed to manufacture gene sequencing technology in signed to a thick research, allows think -- allowing users to visit -- to view gene expression. the initial share price dropped 48% to $57 by the close.

it settled today, but they are still above the ipo price. joining me is the ceo and cofounder in new york. great to have you. the first thing that stuck out to me was you are looking at a single cell basis. walk me through why this is important. >> the single cell is the fundamental unit of algae. all of us are made up of close to 40 trillion cells and they are all different, they all do different things. thetechnology has allowed world to take biological samples and analyze each individual cell with what is called gene expression profile. get allowed researchers to all kinds of insight that shows you the true complexity of biology, which is not possible when people are looking at mixtures.

the fundamental breakthroughs have been incredible. taylor: what discoveries have you made so far? jennifer: i should say it is our customers who have made the discoveries using our tools. it spans just about the entirety of biological research. one of the studies i like to point to just came out about a year ago where researchers did a foundational survey of human lung tissue and found all kinds of interesting insights. rarerticular, they found a cell type no one had any idea existed. expressesut that cell the genes responsible for cystic fibrosis. totally unexpected, totally changes our understanding of the disease. there are many other findings across cancer and newer diseases like alzheimer's.

it is actually hard to think of an area of biology where our customers have not made fundamental discoveries. taylor: you talked about parkinson's and alzheimer's. i wonder, how do you measure success? is success measured on when you can find a cure for those and other diseases? >> you are getting right at the core of the mission of the company. fundamentally, it comes down to how close we are getting to curing diseases. what we track internally is other scientific discoveries coming out of customers labs in terms of publications. taylor: we are bloomberg after all, so i would be remiss if i did not mention the ipo and the financials. congratulations on the ipo. how does your strategy change now that you're going to be

scrutinized quarterly? >> that is a fair question. as we have done from the beginning, we will keep our focus on the long term. that is my orientation in terms of years and decades. there might be challenges with the stock price being an fundamentally, we don't plan to change the way we operate. it is really about enabling the world to find these cures. suitr: there was a patent that hit you before the ipo. how did you respond to that? >> is an unfortunate fact of life that our space has a lot of patent litigation. portfolio over 600 patent applications. fundamentally, we will be driving the growth and execution and making sure customers are able to do their research. taylor: that was the ceo and cofounder of 10x.

tving up with apple's new streaming service, will it have a material impact on finances? we have the story next. ♪

taylor: apple said a new video service will not have a material impact on financial results. apple outlined a strategy that involves lower prices on several devices and services including a monthly cost of $4.99. cut the price of shares, saying the plan to offer a trial was likely to have a material negative impact on the selling prices and earnings per share.

broke mediaor strategy was on display this week. assignedhone giant has jj abrams company to a five-year deal. the agreement is said to be worth $250 million and it was made at a time when at&t and others were launching new streaming services to address the shift. oft does it for this edition bloomberg technology and "bloomberg technology" is live streaming on twitter. check us out and be sure to follow our global breaking news network on witter. this is bloomberg. ♪

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majors, which was the most of anybody. many people think that trying to be your record is impossible. jack: i don't know, tiger is pretty good. [laughter] david: in those days, the compensation was good, but not compared to today. jack: i was making as much money selling insurance as playing golf. i surpassed it, though. david: what makes a great golfer? concentration? physical ability? jack: i think winning breeds winning. >> would you fix your tie, please? david: well, people wouldn't recognize me if my tie was fixed, but ok. just leave it this way.