how are they able to diversify the company? more importantly, we understand mobile is a very fast moving industry. we have seen nokia rise to the top and follow. faceng is going to challenges, but the question beyond leadership is how does the government transition work? ,amsung is about to go public it is essentially the holding company for the samsung group. that will lead to governance changes. how this will work in the future. thanks soangarone, much. sam grobart, you are sticking with us. we will have more of this special on samsung, from jay-z, coming up. ♪ >> welcome back to "bloomberg west." i am emily chang. samsung has spent heavily on marking and liens on hollywood. oscar fans will recall its win wheith ellen's selfie. we are joined with jon erlichman. still with us is cory johnson in new york and sam grobart. has not left anything to chance. they have pulled out all of the stops getting the biggest stars in hollywood to promote them. >> it is very true. it is a strategy that involves spending a lot of money, but it g

on that, the company cut the shipment growth forecast and the stock tumbled, down more than 9% to $20 even. >>> shares on caterpillar, they agreed to repurchase $2.5 billion worth of stock. it will buy it from another company. it sent cat up a fraction. >>> shares of wind stream popped after the telecom company received regulatory approval to convert some assets into a real estate investment trust or a reet to minimize taxes. that approval made other telecom companies look attractive and sent shares higher. >>> the federal reserve begun a two-day policy meeting and will continue winding down the economic stimulus, part of the great monetary policy experiment following the financial crisis. the fed has begged interest rates at 0 and put about $4 trillion worth of extra cash into the banking system and on its balance sheet. so what happens when the central bank tries to bring rates and its balance sheet back to normal? will it end badly or well? steve liesman reports. >> reporter: the market expects the federal reserve to stop buying assets this year and around this time next summer to

the company tried again. the project was problematic in large part because in order to construct the mine, they were going to drain very highly productive lake, which was full of rainbow trout, impact streams and another lake, which is part of the greater system -- ecosystem there. and the taking of a diverse and ecosystem wasuctive lake very controversial. but for the government, and for the chilcotan people, especally iacially. >> susan and her team made a film. their aim, to preven present th. >> making this film was something that was one of the hugest privileges of my filmmaking career. it was obvious that a film needed to be made. there needs to be a film shot anyway that they are comfortable where they can tell the story of what is at stake, because only by hearing their story, only by understanding from them what really is at stake, could people empathize, could people connect, and could we perhaps get the change that was needed. people at first could not believe it. when it heard about it -- you heard

the company posted a $62 million lost. tesla told -- sold nearly six is 700 cars in the second quarter cars in the second quarter. it is teaming up with panasonic to build a so-called giga-factory. the plant will produce lithium iron batteries, which has been a challenge for tesla. cory, what is your take on the numbers? are they good, not so good? >> yes. there were some numbers that were good and some numbers that were not good. there were some things that were weird. let's give tesla credit where credit is due. they showed a revival in sales. the company has seen a decline in sales in a quarter over quarter basis. march quarter going into june, you thought maybe in the early parts of summer they would sell even fewer cars. tesla saw an increase in the number of cars sold. se sold about 1200 more model cars, and that meant a 17% quarter over quarter increase. they need to do that. they have had a big target out there for annual sales in terms of units of 35,000. even the revenues are really hard -- a lot of times we look

the company had the strongest wireless subscriber growth in five years. they had the most subscribers staying on and not leaving the company, as you mentioned, ever in the history of the company and yet, we saw profits down and the reason is because -- >> why? >> because you have t-mobile and other competitors slashing prices and putting pressure on at&t to slash prices. it's also been moving away from subsidizing smart phones and in return for two-year contracts from customers to having customers pay for smart phones but pay less for services and all of that is weighing on the profits for at&t. this company is transforming itself right now. we have to see what happens in the second half of the year. >> morgan, thanks very much. >>> telecom is the smallest sector in the s&p 500 accounting for 2% of the total weight but has some of the biggest companies in the country in it like at&t. there just aren't a lot of them. are any of them worth your investment dollars? to answer that question today and verizon yesterday is craig moffett. craig, welcome. good to

the largest u.s. wireless company reported nearly 6% rise in quarterly revenue and earnings per share of 91 cents. but the sector this year has been lagging behind the broader market, morgan brennan explains why and whether these stocks are now a good deal for investors. >> reporter: despite perceived safety and high-paying evidents, the telecom sector is under performing. so far this year, the sector gained 4.5% while the s&p 500 is up seven. analysts say telecom is trading at the biggest evaluation discount in more than a decade. >> there are a lot of concerns going on with a broader industry with respect to competition, with respect to some of the transactions that are taking place in the marketplace and so that's adding an additional layer in terms of overall concern that's keeping valuations where they are today relative to the market. >> reporter: but key trends could make some telecom companies more attractive to investors, and they were apparent in verizon's earnings. first, the growing popularity of tablets.

numbers will come down for the companies. but all of these estimate cuts will be telegraphed, and russia, again, isn't that big a driver to the earnings of u.s. companies. not that big of a country. most of the s&p 500 would not be directly impacted by tougher sanctions and the vast majority won't notice something's happened. people are reluctant to slam down the s&p futures knowing that a lot of companies in the s&p, by the way, a lot of the russell 2000 companies, they don't know where russia is. but europe would have boat load of companies that will miss the numbers if sanctions get too tough. i believe many european companies could be kicked out of russia starting with the oils, namely bp. plus, it's possible that europe's recovery could reverse entirely. throwing the continent back into recession. >> the house of pain. >> anyone that believes that europe's getting thrown back into recession irrelevant to our companies truly hasn't been paying attention for the last couple of years so many of the multinationals i follow di

define what's important for the company. one of the areas is focusing on how big the company is and you ho big it should be and whether they need all of those people. and keeping employees that are motivated to be there. sort of a warning shot. those employees, a lot of people, it's called rest in best in microsoft. and so they're thinking about that they need dynamic employees going forward, and a bunch of other things that were important. including organizational changes and how it's the company's going to be organized. >> rick cherilyn, you know, kara, the company has covered the company a long time sounds disappoint disappointed. he said today, not sure where focus comes in if you're basically ay agreeing to keep all of the existing businesses. a fair criticism? >> he wasn't specific. i'm not sure what he's going to do. he did talk about keeping the gaming unit. a lot of people want xbox spun off. something rick has talked about. a lot of people feel they shouldn't have bing, the xbox. focus on enterprise most of all. but

"bloomberg west" last year was the host company. came in and saw how the sausage is made. >> i enjoyed that. you have some of the biggest technology companies in the world in silicon valley signed up to do this. you're going inside. >> google, adobe, salesforce, you name it. it's interesting to see the companies that are not tech companies, they are also changing how business is done. >> you also founded a number of media companies and you have a thought about the future of media. first i want to get to our lead story of the day, a federal privacy watchdog gave the boost to nsa surveillance, saying its surveillance of foreign internet usage is not only legal, it's also effective. in a new report, the privacy and civil liberties oversight board said that prism and upstream collection programs show no trace of illegitimate activity and have helped improve the country's security. the board is concerned about the incidental collection of american data. the report urges the nsa to put in more safeguards to protect the rights of u.s. citiz

we'll get more information when the company reports earnings next tuesday. josh lipton, "nightly business report" silicon valley. >>> for more now on whether the massive layoffs will help reshape the future of mike soft, we're joined by david garrity. david, welcome back, good to have you with us. >> thank you. >> is he on the right track? >> i think so. bear in mind nedella came avenue getting the cloud operations up and running and to the extent that he had the great success there, it certainly positions him well from a vision standpoint to lead the company going forward. taking the costs out and investing in areas of higher growth certainly should get the company up to where earnings right now are going to be down 10% year over year but ref knve is growing. the stock probably moves higher than now. >> so talk to us a little bit about what is microsoft going to look like, let's say, five years from now. a lot of talk about mobile, about the cloud, about restructuring. what is microsoft going to be? will we say about it? >> the cloud operation will prep sent

it's half the company. both drugs are priced very, very high. they generally provide high benefit to the patients and therefore there is limited pressure to controt the prices of the drugs. it's a very attractive business on the perspective of drug companies. >> reporter: drug makers from several companies have potential acquisition targets. it spells more deal making. for "nightly business report", i'm meg terrell. >>> shares of abbvie and shire rose today. abbvie up 2.5%. >>> our market monitor has a list of stocks he says could double in price over the next 12 to 18 months and he's going to share them with us, next. >>> the calendar says july, school was just out a few weeks ago but retailers are already gearing up for back to school sales and just today the national retail federation predicted parents will spend nearly $8.5 billion this year on tablets and other electronic devices for their kids. that's about 7% more than they spent one year ago. >>> fedex says it will fight charges it helped internet pharmacies distribute drugs illegally. a

someone at the company. in an entry about aviation, health danger information caused by airplane noise was deleted by someone at lufthansa. and that page on daimlerchrysler on the lobbying act about the company was deleted by someone at daimler. multiple attempts at manipulation have been exposed and corrected by other users. wikipedia insists it was not involved, but the website comes under fire constantly from public relation firms and lobbyists. until recently, this man was the executive director of wikipedia in germany. he says since wikipedia has gone, so have attempts to manipulate articles. >> wikipedia is more than a website. it has become a widespread tool for all of us. the more widespread it has become, the greater the number of attempts by ideologues and pr agencies to insert their views and ideologies into wikipedia. >> and they are getting better at it. we met a consultancy insider. he will not talk about his clients but he will talk about tricks used to bypass editorial controls. >> there are l

the company had some weird inventory problems early. ey were sitting on inventory that went stale. that is one of the secrets about running a successful technology business, and one thing that apple does not get enough credit for. how they never really got stuck sitting on product that was not hot. they somehow engaged demand accurately, made enough customers happy, without sitting on top of these things. look at microsoft, writing done down hundreds of millions of dollars in inventory with the surface. xiaomi is doing this quite well in an interesting and different business model. regardless of how successful this company is, a lot of people will look at their ideas and see if they can run with them. >> a deeper dive into the business model later in the show. right now, i want to bring in crid yu, a former executive at google in china. he is with us from london. as someone who has worked in china, building technology company, what do you think of xiaomi's rise, how impressive is it? >> very impressive. one thing we need to point out is,

we rebranded the company to reflect the spirit of the hotel chelsea and our company. >> what are you o do at the chelsea hotel? >> we are going to restore it. it is quite a task. it was built in 1884 and neglected for decades. it is a true gem. in many respects, including its history, but also architecturally. we have very ambitious plans to restore it to its former glory. something better than its former glory, hopefully, but still true to its spirit. >> tell us about the hotel industry in new york and the northeast. >> in new york, the hotel industry has come back quite a bit. we are close to the peak of 2007 before the market crashed. we just got there recently. we have not surpassed that, but business is strong. we are seeing more group and business travel coming into the mix which bodes well for the next couple of years. we are very optimistic about new york. >> your career in the hotel industry, tell us about that. >> i have owned different hotels. i guess related to this, the first thing i got involved with i ran a hotel in miami beach , back in 1994. there was nothing really i

>> the car company. people here right away and think oh my god, he is going from a car company in detroit, about as old economy as you can get to google headquarters in california, which is about as new as economy gets for people your age or my age. if you thinke about the way allen was responding the last few times. ford is about mobility solutions and bringing people together. they are going to be part of the new way that people get around. about onealways person in his or her car but whole bunch of different systems. he was saying these things a lot. now i am finally saying i'd can't believe -- i can't believe i didn't get it in the first place. i asked him all these things all the time and he doesn't tell me because he is trueblue. he is on the level. this is not a guy who leaks things to the press or tells his buddy certain things before he tells other people. >> you couldn't tell anyway. >> he didn't even give me a heads up. >> not a wave of the hand? >> i was e-mailing him this morning, sitting at

which is helping the top line of the company. is helping the sale and revenue, but it's not translating into great results in terms of earnings. that's very disconcerting. they have taken a lot of the money, the cash cushion that marissa mayer had when she took this job to years ago, and spent that in order to gain better revenues. >> can we turn your attention to ibm and apple. you talk about increasing revenue. they have new applications for what? enterprise customers? business customers? >> this is another one where the headline is ibm and apple using the best of their watson technology -- >> i don't want them to use the worst. of their watson technology. >> indeed. according to sources familiar, by the way. but the big deal here is not the app. it's the fact that you will have all of these ibm sales people and service people on their feet on the street knocking on client stores and saying you have to check this out. it's an ipad, and iphone. corporate customers are going to access this -- >> don't they download stuff from the

department often with the help companies like hewlett-packard and, yes, like ibm, the most dominant company in all of the technology will services company. services did $59 billion selling uff and how to implement it. this announcement was all about apps, apps, apps. the news is you will have every single person in the ibm sales force will walk into the customer accounts with ipads and iphones available for corporate distribution, deployment as well as developing ibm maps on these devices that are favored by u.s. consumers. we saw a lot of competition coming from android in the corporate market. success of the windows phone taking the lace of blackberry, really bad news for blackberry and probably bad news for microsoft and android. >> that was going to be my next question. what does it mean for the others -- blackberry, google, microsoft? >> he's right. this makes apple much more powerful in an enterprise sense and it goes beyond blackberry, in my view already a dead man walking. amazon, google, competing for the soul of the enterprise. i'm not sure that it is all one-sided here. ibm had b

this is a company that on the surface looks like many companies. on is to build the world's largest mobile shopping mall. a few things make it different. one is that the prices are cheaper than what you can get pretty much everywhere else. >> even on amazon? >> generally. that's correct. if you are someone who lives in a rural area, rather than having to spend money on gas and drive , you can go online, get close, get things affordably shipped to you. >> how does wish afford that? the argument is that amazon is eating their lunch. >> it's through overhead. amazon, the product categories are different. the technology under the hood is very different as well. about the merchant model. in wishes case, it is all driven by technology and machine learning. you go to the market strategy on service, it is very different from amazon. >> what is the latest with left and how concerned are you about it? >> i strongly believe that regulation ultimately follows consumer demand. i think we have seen that play out. day, peoplef the need low cost transportation. peo

today the court ruled closely held companies have a religious right to opt out of the general health care law requirement that companies provide contraceptive coverage for employees. the owners of oklahoma retail giant hobby lobby with 600 stores and 13,000 employees took the lead on behalf of 50 for profit corporation seeking a religious base exemption from the health care law. even the attorney believes this is a narrow ruling. >> we think today's decision was very careful. the majority was careful to say this would not decide other kinds of cases, other kinds of options that employers might have. and they were right to keep the focus where it belongs which is on the green family and their religious freedom. >> at the white house, a pledge from the administration to begin looking for alternatives. >> they will, of course, respect the supreme court ruling and we'll continue to look for ways to improve american's health by helping women have more, not less, say over the personal health decisions that affect them and their families. >> a second ruling was a setback for organized labor.

the companies have very similar business models. they generate the majority of revenue from online advertising. >> the combined company is going to have a lot of advantages. there will be one platform. >> an estimated 90% of americans now begin their home searches online. zillow and trulia's revenue is 4% of the estimate $12 billion. experts say there's plenty of room for the company to grow. it could even streamline the search process for viewers. >> there are risks. one will be making sure distill low can develop stronger relationships with real estate brokers rather than alienate them. another issue? the deal could make it harder for smaller companies to compete in this space. for nightly business report, i'm morgan brennen. >>> still ahead, how long will funding for medicare and social security last. we have the details coming up. >>> trustees who oversee the financial health of the government's two benefit programs have released their annual report. there is some positive news from medicare. the report shows its funding outlook

♪ imagine a company's future with the future of trading. company profile. om td ameritrade. a research tool on thinkorswim. in a we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. my motheit's delicious. toffee in the world. so now we've turned her toffee into a business. my goal was to take an idea and make it happen. i'm janet long and i formed my toffee company through legalzoom. i never really thought i would make money doing what i love. we created legalzoom to help people start their business and launch their dreams. go to legalzoom.com today and make your business dream a reality. at legalzoom.com we put the law on your side. >>> first it was carla slim kelling us work three day as week. larry page saying, work l

shares of the company tumbled more than 11% today after ackman said he expects the company to collapse. ackman has long had a major short position in the stock, meaning he is betting that it will fall. >> more now on the international reaction to that downed passenger jet over ukraine. russia has been condemned by the west for its support of the russian separatists who are likely to blame for the tragedy. it is getting support from china. >> reporter: china is warning against rushing to blame russia for the downing over ukraine of malaysia airlines flight 17. since the weekend the chinese press has been highly critical of the west's approach saying in editorials the country like the u.s. are too quick to point fingers at russia and moscow-backed rebels without hard evidence. tiny state news agency xinhua has called u.s. and australian officials rash. a community party backed newspaper the global times said the rush to judgment in the west is not based on known facts or logic. the state press is also taking russia's point of view on the ukraine conflict saying the real culprit is a chao

>>> this pluming and heating company got into a rut, find out how the owners changed their company culture by emulating big name businesses. >>> and the owners of a company that makes new york's iconic water tanks thrive by finding other revenue streams. that's all coming up next on "your business." ♪ ♪ >>> hi, there, everyone. i'm j.j. ramberg. and welcome to your business. today we start the show looking at what it takes to build a company that lasts, one, where both the customers and the employees are fiercely loyal. i headed to new jersey to visit a service business, a company of plumbers and electricians who bucked the trends to be get his business to the top of its game. ♪ 20 years ago, mike was an electrician working seven days a week, 18 hours a day. >> first ten years, i always tell people, it was like a hamster wheel. it was me and rob, my business partner in a van, and we would just start early morning, end at night. >> today, gold medal service, that company that was once just mike and rob employees 128 people, has more than a hundred service trucks on the road, and brings in m

he promised evidence that the company is a fraud. vestors saw a lot of nothing and the stock gained 25% that day. he spoke about it with duane stanford. i know you just spoke to bill, but i want to jog your memory, one week ago when we spoke to him. this is what he had to say. >> the only clue i will give you is that enron, if you remember, had a fake training room. they were touring people around the enron campus to talk about the trading operation. they had people looking like they were trading. that is my biggest clue for tomorrow. his biggest clue. now, he is saying his presentation was overhyped. bill overhyping it? >> he is basically saying my bad, i overhyped it. i was trying to bring people to the webcast, trying to make sure they showed up. they got there looking for a body, looking for a smoking gun and it was not there. they got a three-hour regulatory presentation that investors clearly decided was not what they were promised the day before. >> he was successful in the fact that he got 11,000 eyeballs watching the presenta

in fact, the company notified the s.e.c.is year that it would no longer be filing financial reports at all. hasn't reported any revenue at all. the s krrks c filing lists one employee, that is ceo and president marlon sanchez at the time of the filing. we just talked to him. he told us he's no longer associated with the company. the company purports to run a business social networking site called intro biz. it is hard to tell looking around that site just how active it is. the stock was trading as low asics cents a share last month. today trading in the $16 range. we've been trying to determine just what this business is. that is not easy. the company purports to be based in belize but the phone number listed on the s.e.c. filing is out of service and under the supposed neighbors in the building where the firm is located haven't heard from it. we found another address for the company in las vegas but the building management told us the firm hasn't been there since last month. an attorney who wrote to regulators just last mon

, the high culture companies will benefit. lent will flow to that. overall, it it is massive benefit for the individual and the companies that have interesting opportunities and that is a good thing. >> you have a statement of alliance that people can't use as a guide. in the end is in a just a promise and a promise can be broken? >> promises can be broken and sometimes like a friendship ends, it happens. if you lived your whole life like friendships may answer will not have friends, that would be terrible. >> m&a companies have a founding myth that boiled down into legend. what is the myth of reid hoffman and what is the reality? >> who can't tell the difference? sort of a manifest destiny march toward entrepreneurship and technology. the reality is an instinct for how do we come together as people and what are the ways to help that. and software, entrepreneurship. as ways is discovering the path. >> let's take a break. we will be right back. ♪ >> you grew up in berkeley. what did your parents do? >> both parents are lawyers.

♪ imagine a company's future with the future of trading. company profile. l on thinkorswim. from td ameritrade. >>> you're watching cnbc's "squawk on the street" live from the financial capital of the world, where the opening bell is set to ring in about a minute or so. more on the earnings front, jim. deckers beat. there is a footwear refresh. footwear stocks down for a long, long time, coming back. deckers is good. sketchers is best in show by the way. a remarkable quarter. dsw is cheaper now after what i'm hearing from the different companies. and i like the footwear business after being away from it. don't forget, under armour, major call, footwear. >> the driver there. >> yes. >> then pandora, which is down -- >> the competition. >> down 10% or so. >> it is finally there. the competition is just there. don't forget, sansa was qualified, google and beatz is a good acquisition. >> pan dodora forecast is light. >> the competition is tough for pandora and the cook wants to be in there and they pulled back the music in a big way. i don't want to be pandora.

they're playing diversified with the company. t the newfound pressure from the relational investors, who most always get their way, i think my proposed manitowoc breakup is more likely become a reality. it's what the market wants. here's the bottom line. if you've been riding this rally in manitowoc since i recommended the stock back in september of 2012, i suggest you have to ring the register a little bit, come on, at least half your position, cover the house's money you can, but if you didn't catch that move, don't worry. plenty of upside as manitowoc's crane business is heating up and we have activists pushing for the breakup this company so badly needs. remember timkin's management originally opposed relational's proposal to split their business in half. they ultimately got relational religion. i think manitowoc will too. why don't we start the questions with larry in minnesota. larry. >> caller: boo-yah, jim. >> boo-yah, larry. >> caller: question about qvi. bought it a while back when you recommended it. looks like it may h

that never goes into the company's financial stamens. it is weird where the website tells you they are selling relationships and making money in the financials don't say that. >> i talked to the auditor and he said the last time he was in touch with the company was october 2013. under were filing said they were not going to put in financial reports anymore. in that case, the company goes away or starts reporting on the pink sheets and it appears that is what happened. it just speaks to the fact that it is a little bit wild westy here. >> paul, does this remind you of 1999? is this a one-off or are there other "companies" out there like this. >> we have a whole marketplace where you can do this for the thing should you choose to, unfortunately. i am going to disagree with julia little bit. i think this is reminiscent in some ways of the late '90s. you had these experiences were people see if i can get the right narrative for the right thinly traded stock that nobody beganng to -- it happening more and more and more because you could make q

this one was not a problem, but it was the holding company it owned, the holding company that owned thethe company cha owned the bank. here inlies the problem. the fact it could be a default of the company at santo international and along the line that affects bankers, and it's worrying because we have a lack of regulation, a lack of clarity in europe about the banking sector. all these years along the line, i spoke to the former prime minister of portugal saying we're still don't have a regulator as of yet in control of banking regulations, and we have o passty in a holding company in luxumberg that creates that, real worries there, and santo raised a billion euros a month ago, raised 65 cents in the euro, and now lower, 50 cents to the euro. confidence is damaged aggressively. is it a sector that is stunningly overleveraged, still concerns despite money raising about levels of call in the sector, and they've got a lot of exposure to a nonfinancial corporate sector here in portugal with a debt of 255% of the size of gdp. we look at the public financing. they have improved, carl, really

and the company's done nothing. s points higher -- 1200 basis points more overhead than the competitive set. that's an incredible gap. and now they'll start to close that gap which generates an increase in earnings. but really what you're doing over the next several years is cutting out fat you should have cut out a long time ago. and the problem is while they can -- perhaps they can cut costs, and i think one of the analysts asked a question, there's a credibility issue, david, because you know, we've been asking you for this for years now. only in response to a bid are you saying you're going to deliver. how can we be confident that when it goes away, that you guys are going to deliver. that's the first point. the second is one of execution. it runs a very disciplined zero-based budget cost control operation. they run their business. that is a very, very different culture than allergan. and i think that, you know, our experience is as a shareholder activist, you take stake in a company that has underachieved on wha