♪ riggs in san francisco this is bloomberg technology. highest price the and 18 months after the company reports earnings. we will break down the numbers. plus a culture of recklessness. of guardns of a lack for consequences, harassment at a vision fund. what is going on?

2019, the year in review. i'm content moderation, acquisitions, data privacy to plans for cryptocurrency, facebook felt it all. what is there strategy going into 2020? first to our top story. shares of micron are up. this is after they reported better-than-expected top and bottom line numbers for their fiscal first-quarter and the forecast strong numbers for the current quarter. gross margin is something i have been eyeballing all day. they are coming in more than 27%. ludlow is your to break in the numbers. what is your key takeaway from this report? at the optimism you see across wall street that the memory chip market is going to rebound. probably at some point in the second half of next year. when we talk about dynamic

random access memory, we are talking about the memory chips that go into computers. trips tradesse like a commodity. they have been falling as new technology comes into the market and capacity comes in. look at the blue line which is micron shares. they have been gaining despite the low prices. despite their positive numbers for the second quarter, wall street is saying look past that for the second half of next year the demand is going to be driven by spending for data centers and smartphones. dram has beenof trickling down but we could see a much more positive second half of 2020 which would mean more profit for micron. my issa been on the stabilization of gross margins coming in at a better-than-expected 27%. or we getting the stabilization analysts wanted? margins are interesting.

chipmakers like micron could boost profit is to make sure they are profitable at the low prices but micron has been talking about the fact that margins have been boosted by prices on the flash memory and they have been able to sell this chips into value add markets. we want to hear more about that. micron's strategy has been to cut costs. areas weekk to other as they have been vulnerable to the cycle for chips and supply demand equation has been fluctuating for them in recent quarters. they are looking for how to diversify their business offerings and constantly throwing chips two different business areas. taylor: thank you, ed ludlow. the vision fund best known for its outside bets on tech startups but in the latest

business we cover story, sarah mcbride brings to light the environment of harassment inside the famous fund. what i loved that about your story was to get to know them we have to get to know the founder. is he? >> he is an incredibly interesting guy. is a korean immigrant to japan. he grew up in a hardscrabble way. supersmart. he attended berkeley, moved back to japan and started softbank. one of the things that stood out about his background for me was, alibaba he invested in and that is now worth $130 billion. he's a smart guy. taylor: what do we know about his management style and how it has fueled the environment for these? >> he is a go big or go home

right. he wants his investment professionals to keep thinking bigger bigger bigger. likeimes that is great when a young entrepreneur comes to him and he tells them you're -- your be the next company is going to be even bigger than you think. have you thought of this business idea or that one? sometimes, he gets impatient. we have this detail in a story about how during a conference call, he was talking to one of his investment professionals about a chinese company and was saying why are your outlooks for this company so small? this company can be big and he was berating the sky on the phone -- this guy on the phone and a way that make others feel embarrassed. taylor: woman talk about these outside bets, we would not be focusing on the company if it weren't for we work.

the big debacle for wework, do we know if they have structurally changed anything within that culture of softbank? derailedthe wework ipo, he had to rethink things. expressed, he said he regretted how everything played out at wework. how it had created some changes in thinking inside the fund. they are still going to think big and press people to grow their company as hard and fast as they can that i don't think it's going to be growth at all costs. how has some of that changed as we take a look at the new vision fund they are trying to raise? the vision fund one, very successful, some of it bleeding

into vision fund two. what do we know about the differences and the challenges with the second asian fund? >> -- vision fund. >> most associate the vision fund with wework. wework was just a $4.4 billion commitment out of a $100 billion fund. they have all these other investments, some of which have a lot of potential that are wework. when they go out and pitch investors on vision fund two, it's not all about wework. yes, that's the headline company but there are so many other companies. of these areuch the bigger losses like we work, , masked or upset the other successes? even wework, that was a

$20 billion valuation. it never invested at the higher valuation that other parts of softbank. their losses haven't been as bad as the other headline numbers. uber, the company is down from its ipo but softbank, vision fund invested long before the ipo. the results aren't great and they are dragging down some of the other results but a lot of the results are on paper only. they are marking up the valuation of some companies that haven't gone public and haven't had an exit yet. that's typically legal but it's just a paper increase. if silicon valley knows anything, they know the difference between paper money and real money. thank you for joining us. you can read more about this on the summer 23rd issue of bloomberg businessweek. shares of tesla closing at a

record high on wednesday after reports the company is considering cutting the price of their model three sedan by 20% or more share. tesla is betting that it will lower buyers. -- lower buyers. stock is searched since the company reported a surprise profit october 23. coming up, overbank doesn't want to be known as just a car booking service. they are taking the gig economy model one step further. check us out on the radio on the bloomberg app, bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

taylor: with just one week

before christmas, amazon has been assembling a shipping machine. the commerce giant is beefing up its own delivery system to prepare for the holiday orders and expectations. discuss, our analyst in seattle. we know this is always a big test for the year. what is the big test for amazon in the next few weeks? isthe big thing for amazon it is handling more of its deliveries than ever before. it has estimated about half of all amazon packages will be delivered by the system that amazon has created. independent contractors who start their own businesses by leasing a bunch of bands and hiring people. it's also flex drivers who do and overbank type out.

do deliveries for amazon. we have some hints about weather coming. that is always the big wildcard. if they want a system that can work great for decent weather and breakdown in bad weather. a lot of it is going to be depending on mother nature. those are things outside its control and there are things inside its control. have they mastered the last mile delivery? >> they are spending a lot of money on it and doing a decent job. there are and an expert they are hitting 90% plus on par with fedex and ups. doing things differently than ups and fedex. big part of it is having these drivers have the same neighborhoods on the same day. aen you think about seeing

postal truck, you might see it once a day then it is gone. amazonht see multiple vans and vehicles crisscrossing your neighborhood on the same day riyadh that is considered an efficient and legit expect amazon says this is necessary to provide the capacity we need and get everyone their packages in time for christmas. taylor: am i correct or jumping too many hoops saying we should start looking at amazon and logistics company not an e-commerce company. >> they have been in -- a logistics company for years. it's always been the warehouse and storage is. we're just seeing them increasingly branch out from that with the airplanes and the last mile of delivery. be used to seeing the postal service truck and the big

brown ups truck. now you are likely seeing the blue amazon prime vans as frequently or more so than anything else. taylor: thank you for joining us. despite pressure from governments worldwide to give its drivers employment benefits, uber is expanding the gig economy. it now has a program called overbankworks -- --uber works this andere testing we are gettinger getting drivers that we can hire thers independently important thing is here they are

a platform. they are just going to deliver rides, they are going to deliver food and other things. it they don't want to deliver the other side of the platform where they are provider of jobs can we provide other jobs? about: anything special uber works? to say're always going it's their technological know-how. they obviously just have this huge brand to recruit workers and their existing network of drivers who might want to look it over -- other types of jobs. >> you mentioned that they want to be the platform. analysts.i talked to theirike uber because of

diversity. is there a key winner including a diversification strategy? >> i don't think either company is winning according to their ipo price. when uber went public and today there losses were huge. the way you can get rid of those losses is to say we are using it to fund all of these ambitious projects. we heard about fruit, the growth of food delivery, this seems like another example. i don't think it will allow them to escape the challenge that it needs to prove that the ridesharing business is a good one that can generate profits in the long term. day,nk at the end of the right then eats are going to define their business for the foreseeable future. it's nice to be about to say we

have these other projects so you should invest because of growth opportunity but when the fundamental question about the core business, that is driving the stock down. i think 30% over the course of the year. taylor: some of us fundamental questions are about regulation. here in california, it was seen as a huge headwind for the gig economy. any threats of regulation on the other sectors of the gig economy where uber wants to enter into? the business world, there was a sense that there are startups now and everybody is using independent contractors and they will figure it out. from governments like california, we are seeing clear signs that governments are just slow to move and there's still plenty of scrutiny on independent contractor status. is still playing out. the law takes a long time. like one case that was a piece of case law for the independent

contractor and it took years to play out. this is a long, slow process and i think it's interesting that intois diving headfirst independent contractors while there is all this pressure on their core employment model. taylor: coming up, instagram making serious changes to its influence or policy. how the company is cracking down on vaping next. bloomberg is livestreaming on her. check us out at technology. also quick take on twitter. this is bloomberg. ♪

>> that a dog started with a high rating.

--buy rating. the firm issued a target of $50 while saying the devaluation reflects what the highest multiples and highest revenue growth rates in the software universe. twitter's price target was cut to $36 per share at city. updating the model to reflect the third-quarter results. they say we remain largely concerned on the near term. peloton's price target was raised to $39 per share. suggest that the profile might be higher than previously forecast. i want to move onto instagram. finally making rules to govern content and influence or advertising. the apps most followed users

will no longer be allowed to promote products related to vaping, tobacco and weapons. more.est joins us with instagram is taking a hands-on approach. it has been a wild west and marketing were influences are making their own deals. instagram itself is not a part of that discussion. however, there has been a lot of pushback from regulators. the u.k. advertising authority, the ftc, saying that there needs to be some reflection on influencer advertising specifically in vaping which is been targeting teenagers. this is really the first rule that instagram has ever made to try to regulate that community. taylor: how much of it is pushback from the regulations, from the health officials given the concerns about vaping and facebook and instagram saying ok now we need to do something? sarah: instagram is not just

talking about vaping reedit they are saying they are not going to allow ads on vaping on weapons or tobacco products. this is a widening of the role. that being said, there has not been a lot of enforcement bite instagram on these rules for influencers. a few years ago, instagram said all influencers had to disclose they were getting paid. often, we see influencers still not as required by the ftc. taylor: a few weeks ago, we spoke and we said instagram says it we pay for your content you aren't allowed to talk about politics. is this along the same lines of expanding the category? it gets complicated because you have the regular advertising system, advertisers buying at the facebook and

decided to put them on instagram. then you have regular branded content which is advertisers working with facebook and instagram. then you have an influencer advertising market which is outside the visibility of instagram and instagram in many cases and is operating as a relationship between the user and those brands. increasingly, that content is very popular in making up a lot of the content on instagram itself. taylor: how do advertisers feel? sarah: advertisers were looking at this as a place where they can do whatever they want. now they will have to be more careful. instagram just started asking its users with their birthdates are. and another portion of this restriction, rolling out sometime next year is that they will start to limit who can see ads about alcohol, i have products and other things that

should be age restricted. taylor: clearly, we know that europe has been much more strict. u.k. advertising standards authority this week came out with their ruling on tobacco. how much is the u.s. playing catch-up to what we are seeing in europe? sarah: the ftc has been very interested in juul marketing to use. that's the question is who is getting this message and how influencers play into that quite a bit. taylor: thank you for joining us. coming up, we dive back into microns earnings as the street looks for bob -- arming out in which it prices and a stabilizing growth margins. i guess to gives us the latest from the analysts call that is currently underway. this is bloomberg. ♪ here, it all starts with a simple...

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taylor: this is "bloomberg technology global link," where we join "bloomberg daybreak i australia -- daybreak ." let's take a look at the top global tech stories of the day. shery: tesla may take a big step to ramp up sales in china. bloomberg has learned the company may cut the price of its model three sedan next year. new york city is waiting on apple. a year ago, apple announced it was bringing hundreds of jobs to

the city, but now new york's real estate industry is wondering when the company will make its move. apple has a limited presence here beyond its retail stores. meanwhile, google and facebook have become two of manhattan's biggest tenants, a sign the companies are tapping into the educated workforce. apple, google, amazon are joining up with the zinc b alliance which promotes standards for the internet of things. the goal -- a way to come up make smarthomes easier to use. taylor: thank you. micron reported a strong showing wednesday when the chipmaker reported first-quarter earnings. in impressed wall street with a strong outlook of between four point $5 billion to $4.8 billion in revenue.

more on the analyst call, wedbush securities analyst matt bryson, who has an outperform on the stock. and he was on the call. what was your key takeaway? what did you hear from management? >> i think there were a couple of things that were important. one is they are seeing tightness in certain areas. also, they are calling a bottom for memory in general. they think this current order is going to be a bottom of the cycle. nand pricing move up in the quarter. it very much parallels the guidance they gave for flat gross margins, which again suggests pricing is normalizing finally. : pricing normalizing finally, sons of tightness. does this have any implications for tax -- for capex or expansion of capacity? this point, they

are remaining conservative in their capex outlook. they are keeping their guidance steady. i think that is the perfect thing to do, to wait for demand to come back. they did note there was a point of uncertainty in terms of how much inventory china has accumulated. just coming back from asia, that ,s something i continue to hear so i think they are taking the prudent course right now and not yet investing capex. if recovery continues, i expect memory in general will look to support their customers and expand capacity, but that is not happening yet. taylor: i'm showing a chart to our terminal audience right now, which is as you describe, the share price of micron, and the lower and lower dram and nand prices. we've been calling for a bottom, really, a lot of 2019.

are you confident we have finally hit a bottom? i am.hink on nand, looking at pricing moving forward, i believe contract negotiations have concluded favorably for calendar q1, so micron's fiscal q2. when you look forward in the nand space, you have a huge driver in demand in new gaming consoles, and you also have an added boost and a better handset outlook in part predicated by 5g . on the dram side, it is slightly more difficult to call. having said that, starting to hear the server dram contract is moving up, so in my mind, that's the first sign we have really bottomed on the dram side. spot pricing the last couple of weeks is starting to rebound. large cloud customers, who are an important point of demand for

dram, have increased their buying. while there's not quite as much visibility there, yes, i think we have seen a bottom. upl: we have micron shares 60% from their july. what is your expectation for the share price? low. 60% from their june >> i have a price target of 65, which is about nine times my prior eps estimate. that, however, only assumes gross margins in the mid-40 range. last cycle, the margins topped out at 60%, so i would say there is certainly room to move up in the mid 60's, and if you have a relatively strong cycle this time around, i think my estimates could certainly go up from where they are right now. wedbush.att bryson of

thank you for joining us straight from that analyst call. plenty more global stories when we return. this is bloomberg. ♪

taylor: now to our weeklong series, big tex 2019 rewind, where we look at the biggest technology companies and the challenges they faced over the last year. facebook ended 2019 much as it began -- over political and .egulatory pressure the social network's news feed proved no longer the loan crown jewel it once was. acquisitions of instagram and became more interesting. >> instagram and whatsapp have

been the breakout successes for facebook with ad revenue and record-breaking app downloads, but facebook plans to integrate eye of theught the ftc. this is not the ftc's first look at facebook. this past summer, the social network was slapped with a record-breaking five alien dollar fine as part of a settlement over consumer rights. >> facebook betray the trust of consumers and deceived them about their ability to control their personal information. >> data privacy is the focus of the european union's commissioner of competition, who is investigating how data may be used unfairly to stifle competition. nowhere was more focused on competition then washington, zuckerberg ceo mark appeared many times. he defended his decision not to fact check ads. >> i believe people should decide what is credible, not tech companies.

>> it was zuckerberg's congressional appearances that most interest.d >> is it a currency? are you a bank? >> it's a very complex project, and, as you say, it's risky. >> so facebook enters 2020 in a risky place. the project is now under review of the u.s. justice department, the ftc, and nearly all the states' attorneys general. with that kind of pressure, we will have to see if facebook investors stay or shy away. here with no shortage of perspective is techonomy's ceo and founder. arguably, what is shocking to me about this entire thing is the .rice share despite all of those headwinds we just discussed, facebook is

up 54% year to date. what do you make of this? it really creates some cognitive dissonance for me and makes you realize wall street just does not care about anything except growth and earnings and revenue. a $5year when facebook got billion record fine -- gigantic we greater than any company has ever been fined by the ftc for a privacy matter, and their stock still performed beautifully well for the year, you really have to say we are not going to get any help from wall street in reining in a company that really needs to be reined in in ways that, frankly, are hard, but let's face it -- somebody's got to do it. taylor: i want to take a look at a chart that i also made especially for you. it is the forward p/e ratio of facebook. i'm charting this relative to the other big competitors. facebook, frankly, still undervalued according to that metric. is that part of why shares saw

the big gains this year? he haderms of the gain, awful performance in 2018, a couple of quarters in the back half of the year where they .issed numbers i would say if i look at even the reaction to conceivably trying to block the integration, which could be obviously a precursor to trying to break up the company, i think you actually are seeing a reasonable amount of conservatism factored in. since we launched coverage on the company, one of the tenants of our initiation basically was we have never seen a more hostile regulatory environment. i think truth be told, a lot of people were initially surprised stop did not react more negatively to the headlines, but there is an element of sort of them playing through if you look at the other names and big tech and the move they have had this year. taylor: comment on some of those

antitrust issues michael was alluding to. is there a case to be made for breaking up this company? >> i'm not an advocate for breakup, but there's no question the regulatory pushback this company is facing all over the world is not like anything any company has probably ever seen. there is movement against google and to a lesser extent amazon, but facebook is the company regulators are looking at in the eu, parts of asia, the united states, both parties here, and it is true, despite the fact they had a pretty good year on balance in their stock, that they are still below their highs. they have in hurt by all these controversies that never seem to leave them -- they have been hurt. maybe michael is right, that it is factored into the stock. it is just such an incredibly profitable company, and they have such an incredibly good at adiness -- add business -- business.

analyst who covers the company, do you like what the company is doing in terms of trying to integrate all these platforms together? >> ostensibly, why the government is conceivably trying to go after them, yes, it likely does. they have definitely not had a lot of success to date monetizing messenger and monetizing whatsapp, and a big part of why they have been so successful monetizing instagram is they've got this phenomenal targeting engine and they've got the strong ad base in place, and do aust -- they just better job monetizing these anyone else. taylor: instagram stories was effectively copied from snapchat. do you get nervous when the big engine was- ad

copied and not innovated from within? >> if you look at what they've done, they've done quite a bit of innovation. i'm trying to remember the expression, the ultimate form of flattery is emulated. it is something that has classically happened in tech for years. have i been consistently blown away with what they have come out with in terms of new platforms? no, i have not, but, you know, david mentioned they have built a very good, durable ad business that performs for advertisers. that keeps the dollars coming in the door. taylor: i want to look upon over to libra. dead on arrival? -- i want to flip on over to libra. >> i think they made a mistake announcing it when they did. it's a very complex thing. why bring a new complex issue into your public relations and government relations strategy when you are already under

incredible threat of government regulation for a bunch of other reasons and why you have basically very little public approval? i think that was very foolish and i think partly because of that, there's no chance libra will get launched any time soon. plus, zuckerberg has said he will not launch unless he has regulatory approval both in the united states and eat you, which to me means for now it is dead. taylor: i'm curious about your take on zuckerberg's relationship with d.c. you mentioned it is one of the most hostile regulatory environments. yesterday, we talked about apple. tim cook arguably has a great working relationship with the president. he has his ear. what do you want to see from mr. zuckerberg in terms of improving his relationship with d.c.? >> i think it is pretty tough to do. i don't know if i have a magic answer for you on that one. like he isfeel hearing from some of the troops as they were under assault last

year from the press, and it's not like it wasn't warranted, some of the things they were getting attacked for. i felt like there was this bunker,everybody in the and he has gone out and tried to tell a story, and i think they have certainly learned from this. i think they are being proactive. i think they recognize they are under a greater degree of scrutiny, but i understand d.c.'s opinion, and it is certainly going to be a political year, no doubt. taylor: your thoughts on zuckerberg's improving relationship with d.c.? >> i actually think there is a real similarity between how zuckerberg and cook are treating the president. they are both cozying up to him, doing what he wants in order to keep him off their back. it is a president who is fons well to flattery. who knows what mark said when he was in the oval office with board member peter thiel who spoke on behalf of the president

at the republican convention? but that was a pretty friendly thing to do, to go and schmooze with the president secretly, and let's just face the reality that to regulate refuse political advertising is exactly .hat the president would like i think that is fairly savvy, especially if he believes, which he seems to, that the president will get reelected. taylor: one quick question to both of you. a top hit?be where do you see the stop going after a 54% run out this year? 2021, asoll forward to a general rule, i feel like that is where the buy side is going, i think you could get to 50, 260 two the upside. what makes it a little more challenging -- there's not much of an element of surprise. street is around $11. the buy side believes it is more like $12. in general, you want to see

companies that are beating and raising versus expectations. where i struggle with it is i -- i hear from the buy side they should be trading you25 times gaap eps when have this regulatory overhang. what i've heard some of the buy side do is say if you break it up, there's revenue this energies -- revenue dis- synergies. that is something that i think will be extremely tough to do. taylor: your thoughts, quickly, facebook in 2020? >> the only thing that will hurt facebook from a stop perspective long-term is if real regulation begins to be imposed. i think that could happen. could happen this year. probably it is a little further out. the other thing is if statistics emerge that affluent users in developed countries are stopping their use of facebook, which i

think is possible. i think there's a trend that the most affluent customers they have as users are not as enthusiastic as they used to be. they are trying to make up for it in the developing world, but that is a problem. taylor: thank you. much more next. this is bloomberg. ♪

taylor: hotel chains and home sharing sites have an encroaching on each other's turf, and the latest player to bert -- to blur the line has a model with a mix of wework and airbnb. now they are making a move into traditional hotels. i spoke to ceo francis davidson on tuesday about the business model and how he plans to make it and out. works is byonder partnering with developers.

the idea that we make spaces really attractive for travelers is kind of a next-generation hotel experience, one which usually offers you apartment, studio, multi-bedroom apartment sometimes, and recently actual hotel rooms. we offer a wide range of accommodations, but always with a short and every design and use a lot of technology to make the experience frictionless. taylor: very competitive space. over anyone else? >> there's a wide range of choices consumers have and i think at the end of the day, what they love about what we offer -- they get a really attractive, sizable property for a cost that's usually a fraction of a hotel room. it's usually a better experience at a lower price. taylor: you mentioned marriott. it's interesting you made comments earlier that you wanted your revenue to top marriott's by 2025. how are you getting there?

where are you in that goal? >> the proposition is so attractive to guests that stay with us, it's quite easy for us to do a minimal to no-marketing spend, so growth is entirely led from the real estate that we can bring onto the platform. really supply-side limitations, so the mathematics is if we are capable of adding x number of markets and x number of properties in each market on a quarterly basis, we arrive at a really large business quite rapidly. taylor: how long are your long-term leases you are entering into? >> we are really careful about risk mitigation, so it's not just the lease durations we care about, but also making sure there's downside protections built into the leases. as economic conditions change, our lease goes down. yourr: how much of business is tied to the economic cycle? if we hit a downturn and you are on the hook for those leases and

no one is coming and renting from you, how exposed are you to that? >> absolutely, this is something that was critical to investors. we have looked at every recession that has occurred, what happens to hotel revenues, and we built into our leases a reduction of costs, of rent that was triggered by recession. we are carefully planning the downside scenario. for us to think about if there is a recession in 2021 or 2022, what do the financials of the business look like, and we make sure we are prepared for it. taylor: how many questions from investors did you get differentiating yourself from wework in the midst of the hysteria going on on the sidelines? >> it's no surprise to the world of venture capital that the wework business did not work quite well in the last few months. it was kind of a response to lack of focus on unit economics, or economics, things we have been obsessed about doing in the

right way the last two years. we have been extraordinarily transparent because in our view, we are quite proud of the kind of financial viability we have built. we think public markets are going to love this story. taylor: you make it clear you are not an airbnb competitor and you are not an apartment listing platform. do you consider yourself a real estate company? >> i think a tech enabled hospitality brand is the way i would describe the business. at the end of the day, we sell experiences for the consumer. taylor: you said you were looking forward to the public market looking at your. plan to go public? >> there's no set timeline, but within the 18 to 36-month horizon, it's a possibility. thisr: that does it for edition of "bloomberg technology," and "bloomberg technology is livestreaming on twitter, and be sure to follow our global news network @qu

icktake on twitter. this is bloomberg. ♪

paul: good morning. i'm paul allen and sydney. we are under an hour away from the market open. from: good evening bloomberg world headquarters in new york. i'm shery ahn. sophie: i'm sophie kamaruddin. welcome to "daybreak asia." paul: our top stories this thursday, house democrats lay out their case for impeachment. in outrage, president trump compares the proceedings to the salem witch trials. micron jumps on strong