Challenging the industry. We hear from a top lawmaker who does not think big is necessarily bad. First, to our top story. Apple has a backup plan if the trade war continues to escalate. They are manufacturing partner says they can make all iphones bound for the u. S. Outside of china if necessary. They make most of apple smartphones at its chinese factory. Our text editor joined us with the details. An executive who was talking to investors and other people in taiwan. Our reporter in asia was there to listen. This is more of a plan. They did not ask foxconn to do this yet, but they are saying they are very capable of doing it. It has raised a lot of questions. Analyst and he was saying that if you are ,alking about final assembly which is what foxconn does, if you are looking at that, it might be relatively easy to move your move. If you are talking about the whole manufacturing process, that would be a lot harder. Vonnie we know that politically china and taiwan are at odds. Is there any danger that china would retaliate against the company if apple would move all were to move all of its production to the Taiwanese Company . Alistair that is a good question. Apple has to be careful in general with this kind of thing. Some of the activities going on with huawei in the u. S. , where the u. S. Government is Encouraging Companies and consumers to steer clear of huawei. That has really raised concerns about what happens to the treatment of apple in china. There have been a lot of concerns that there has been an unofficial recommendation that chinese consumers not buy iphones. That market is really important for apple. It is a big risk. Vonnie hon hai, of course also known as foxconn, had a plan for a wisconsin plant. That would have employed 13,000 people. Does its plan for wisconsin changed materially at all . Alistair the executive who was speaking yesterday seemed kind pretty bullish about the wisconsin plant and he kind of placed it in the same strategic realm, this idea that you could move the iphone assembly out of china. India is something to consider, too. Foxconn has plants in india already and was dealing with similar types of restrictions from the indian government. So it certainly does have a lot of options around the world. Emily bloomberg techs alistair barr. Wave of antitrust scrutiny is not stopping salesforce from gobbling up the competition. This week, they agreed to buy Tableau Software for more than 15 billion. Tableau helps customers turn raw data into easily understandable charts. It is expected to give salesforce even more ways to help customers. It is salesforces biggest acquisition to date and means they have now bought more than 60 companies in the last two decades. For reaction, we were joined by an analyst and a correspondent from bloomberg tech. This makes a ton of sense. Upmarketas been moving and they have always had the best r d and the best product. Was ant they lacked. Nterprise salesforce i think it is a loop huge opportunity for salesforce to cross tableau into their existing customer base. It also makes sense for the companies in terms of their mission. To digitize and help customers go through a digital transformation. The challenge salesforce has had his not having the existing systems outside of their crm. Tableau can really provide that. An analyst out there thinks this is not one of salesforces Core Competencies and does not help expand the core business. Of course, you have got other competitors out there like google. Talk to us about the range of reactions. It has been diverse. Microsoft is out there and they have just been very dominant. Particularly because they can Sell Cloud Services and power behind power vi at the same time. One analyst has told me that microsoft is eating tableaux lunch. Tableaus some said the deal was quite extensive, but others say all Software Stocks are valued pretty richly these days. What it shows is that marc benioff is not afraid to buy companies that he covets. He said he was interested in the company for a long time. And as you said, salesforce is really benefiting because it is not on the governments radar. The Enterprise Market is so competitive. And because consumers are not involved, it does not seem there is a huge power imbalance. Emily what do you have to say to the skeptics year . Eating their lunch, tableau was about to be in competition with google as well. Now they will be a bit more protected under salesforce. But this is not necessarily additive. I think the skeptics will say a couple of things. That this was a defensive move on the part of tableau. I do not think that is true. In q1, they landed a 100,000 seat deployment seed deployment. If you are landing customers e walmart, some of that the most advanced companies are already using tableau at sale at scale. They are growing recurring revenue almost 40 a year. Expensive,ay this is but if you look at the mulesoft , i believe that was 16 times forward sales, i believe this is about 10 times forward sales. For something growing recurring revenue 40 a year, they could have even paid more. And this is a very valuable asset. Without looking into all of the different silos, it is impossible to digitize a company. At o think while it is outside the core competency of salesforce, it will be synergistic in what they want customers to do. Tableau also has customers like verizon and netflix. But this in the context of salesforces other acquisitions. There have been a summit there have been similar products which salesforce admits have been a flop. But they are on a trajectory of moving from a customer relationships powerhouse to more of a generalpurpose Information Technology company. Coming up, the year of the tech ipo continues. Well talk to crowd crab strikes ceo about going public next about goings ceo public next. And if you like us, check us out on the radio. This is bloomberg. Emily the year of tech ipos continue. Shares of crowdstrike soared in their first day of trading, jumping as much as 97 . Raised 612 trillion dollars, giving them an 11. 4 trillion market cap billion dollar market cap. We are really focused on going public when we were ready. From our perspective, we have given a longterm view. Today is one day will be raised a financing round and will continue to focus on the future. We should look back at today and celebrate it, but tomorrow we are back at it. Focusing on Customer Success and preventing breaches for large and Small Companies around the globe. Emily how much are you following what is happening globally . And how much exposure do you have to china . George we dont really sell in china, so that has not affected us. , we a china perspective typically see a lot of activity around geopolitical tensions. That activity tends to manifest itself in cyberattacks. With the unrest we continue to see, with the unrest, we continue to see attacks and we help nations around the world against the state actors. Isly certainly, what happening with the trade war is impacting u. S. Companies. The cybersecurity landscape changes, the Threat Landscape changes. How do you stay competitive in an everchanging world . Big part of our success is the fact that we have built a crowd platform. There has not been a security crew cloud. Part of our overall approach has been to collect a lot of endpoint data, Security Threat information. That has driven a lot of the Artificial Intelligence algorithms we have. The more data we consume, the smarter our technology tends to get. That is a big part of the overall story. What we focus on is really the platform approach as opposed to building yet another point product. That has resonated well with customers. Emily what are the biggest trends you see on the horizon . We are headed into the heat of a new election season and the last election was certainly not here secure. It is elections, property theft, or destruction from ransomware, these are all Cyber Threats that organizations have to deal with. It underscores how vulnerable organizations are to these sorts of cyberattacks. Unfortunately, they have been burdened with Legacy Technology that has been in capable of identifying in capable of identifying these breaches. We focus on creating technology to stop malware and breaches. What friends are you seeing and company decisionmaking . Seeing inare you company decisionmaking . Are they broadly very vulnerable . George broadly, they are all vulnerable. Unfortunately, there is a tapestry of Security Products that have had given them protection that they need the protection that they need. From an awareness perspective am a the good news is that boards of directors are taking this seriously. And when you look at some attacks we have seen where ransomware literally took companies off the map for many weeks, in some cases months on end, it moved from just purely being infected to being a Systemic Risk for the corporation. Worstcase, they are spending hundreds of millions of dollars trying to recover their company. Reportedantime, we that cisco has held talks with crowdstrike about a possible deal. The deal did not happen. Why did you decide the right course was staying independent . Comment onannot rumors, but our goal has always in to be an independent company. We built the company and operated it as it was a Public Company when we were private. Our growth and our financials are of a size and scale of a Public Company. We went public when we wanted to come and i think we have seen a warm reception from institutional investors. Emily george, ceo of crowdstrike. Be valuednspected to between 16 and 17 billion when it list publicly next week. That is more than double the last evaluation less than one year ago. Unlike many companies, they are forgoing the traditional ipo route with a direct listing. Investors will be allowed to begin selling shares immediately. It is coming from people familiar with talks about the deal as they are getting ready for the direct listing next thursday obviously, the people involved are the company, bankers, investors, thinking about how much will the company be worth when it lists next week. What is interesting is they are doing this math based off of some projections about the companys expected revenue for next year. So they are looking at this years projected revenue, the expected growth rate and forwarding to fiscal year 2021 , because of the way the fiscal year calendar works, and expecting basically a 20 times revenue to make the valuation. Emily this brings to mind the headline in which uber was targeting a 120 billion valuation, which i understand was floated by companys bankers and had nothing to do with actual demand. That is far out from the ipo. We are now one week from slacks ipo, so this feels specific. This will be different simply because it is a direct listing rather than an ipo. My understanding is that an ipo, theres a little more control over where the bank and the company, where everyone will agree where the stock will open. They will set a price and set boundaries around that. With a direct listing, its a little different. What is going to happen is, at some point, there will be a Reference Price will come out either from the exchange or the bank. As we found with spotify last year, the reference range was quite large. Somewhere between 40 per share up to 130. Pretty wide, not very specific. And what happens on the morning of trading, the exchange and direct market maker, which in this case is citadel, will collect, buy, and sell orders from a bunch of different groups and then try to figure out based on those orders where to open trading. That may take several hours. Emily the skeptics say slacks financials do not appear to be as positive as, lets say, dropbox or docusign when those Companies Went public. What is the response to that . Ellen slack has not been talking a lot. But it is true. If you look at the growth rate of its revenue, it has been declining over the last few years. What is interesting is when we talk about the forward projections for the valuation of the company, they are based off an assumption that the revenue will grow 50 next year because they have just seen that it is expected to grow 50 this year, but if you look at it, it grew near 80 the year before and over 100 the year before that, so it has actually been declining. It is unclear to investors and people observing and deciding whether to buy this stock that the growth rate slack saw in some of its earlier years will continue at the same rate. Emily because they are doing the direct listing, it means investors and employees can sell their shares right away. Should people buying into this company for the first time be worried about a talent exodus if employees can suddenly cash out . Ellen we have already seen there has been some trading happening on the private market ahead of time. It has been pretty consistent with the expected price for the valuation of this listing, somewhere around 16 billion or 17 billion, and volume has been as expected. I think people are looking at that as an indication on if they of whether people are expected to sell a bunch. At theotify, if you look first few days of trading, there was not a lot of volume, and in the end, people will probably have faith that slack is a company to be held in the longterm and will not have a big selloff. But you are right that investors and employees, unlike in a traditional ipo, can sell the first day. Emily spotify was very quiet on the day of its direct listing. Do we expect to see slack executives in new york on the floor of the exchange celebrating . Ellen im not sure if there will be banners and all that, but the ceo will be in new york. Doing something that morning on the new york stock exchange. When you talk to experts about what they expect or what they hope will be a win for the slack listing, i think no news is good news. If it is quiet, if it stays stable, if there is some trading and nothing crazy happens, it will probably be seen as a pretty big win. Emily bloombergs alan hewitt ellen huet. As a reminder, bloomberg is an investor in slack. Hong kongs falls into chaos as citizens protest and extradition bill, but what does it mean for investing . And later, dropbox is coming after microsoft and google. Aw they aim to evolve from file storage system to a collaborative workspace. This is bloomberg. Emily in hong kong, chaos in the streets. Thousands of protesters demonstrated against a proposal to allow extraditions to china. This as Hong Kongs Legislative Council attempts to debate a controversial legislative bill best extradition bill, saying it would blow up the legal wall intended to keep Hong Kongs Justice system separate from chinas. What does this mean for chinas business climate, especially at a time when wall street is lending billions of dollars to chinas hottest tech unicorns . We explain why exactly u. S. Banks are interested in tech in china. We have seen that the arenology startups in china tapping into the syndicated loan market at an unprecedented pace. A lot of wall street lenders are taking their playbook into china , lending these startups billions of dollars and hoping they will get further mandates in the future. What we are seeing from this particular protest in hong kong did have some impact on the market. We have seen that trade has caused some of the ipos to pause. They have decided to wait until the environment clears up. It is still unclear, no deal has been pulled because of the extradition protest, but we should monitor very closely whether these companies that will be looking to go public in the next three, six months, if they will change their mind or have any other sort of other contingency plan. Emily these Companies May have a lot of potential, but they are assetlight. They are unprofitable. What is the attraction for investors . Investors are looking for highgrowth when they look at Chinese Tech Companies. That is generally the theme for tech in china. As you said, these are assetlight companies. They do not have a track of profit making, but it is not an unfamiliar notion. It is happening in the u. S. For a long time. I think wall street banks are looking at this as a Good Opportunity to build relationships early on with these companies in the hopes that further down the road when they go public, if they become, like, a billiondollar company, they would get the mandate for more lucrative fees. Emily give us an example of specific deals. Your story mentioned bytedance, a big and growing company, but also a company that has run into challenges, specifically with the u. S. Government. Crystal several companies have raised fixed loans in the past. You mentioned tiktok, a popular streaming app. They have raised billions of dollars, and that includes big names like goldman sachs, morgan stanley. We have seen some auto financing deals. They have all raised big tickets. This is probably the trend, instead of raising private equity where you would dilute investors at a lower price, you are raising private loans instead, so you keep that valuation and still achieve the goal of raising funds for further growth. Emily we have seen many u. S. Tech companies wait many years to go public. Is that the trend with Chinese Tech Companies as well . Crystal it is increasingly going that way. Tiktoks mothership has been talking about raising funds, but nowhere close to going public yet. We are seeing other big unicorns such as alibabas financial affiliate. They have been private for the longest time. These are the big leading Tech Companies in china. Really taking their time instead of rushing to the public market, unlike their other peers in china. Mily bloombergs crystal t our conversation with congressman a doug collins of georgia is next. On we are Live Streaming twitter, check us out and follow our global breaking news network tictoc on twitter. This is bloomberg. Emily welcome back to best of bloomberg technology. I am emily chang. The house held hearings to find out if tech has gotten too big. It looked at the detrimental effect tech has had on journalism. More American Adults get their news from soci