Why Tech Companies in the United States are hoping president trumps political problem could be there again. It is official. Wework is pulling the plug on its ipo, at least temporarily. New ceos coceos of the company want to focus on its core business before going public, which they still plan to do at some point in the future. Wework has been burning through cash. It is now planning thousands of job cuts and will put several of its businesses for sale. Ellen, i want to start with you. This story has been evolving dramatically over the last few weeks. What is the latest from this morning . It is official it is official. The ipo will be put on hold. That confirms a lot of the reporting we have had in the last week or two, which is that the ipo is unlikely to happen in 2019, likely to be pushed until next year. They are going to be spending the next few months with these new coceos, trying to show wall street, you know, we are going to cut back on expenses. It is no longer going to be a company with this wide variety of businesses alongside its main, core business, which is renting out office space. There one specific moment that gave officials the idea that they should pull back on this idea . Clear it seems pretty from the time last tuesday when the ceo and cofounder southbound sat down. Who had these leaders experience at other companies outside taking over. Immediately, people, including myself, were thinking, how are they going to continue with their plan to finish the ipo in 2019 . There is just so much to get done. There has been such a change at the company and they were already talking from that first date about new leadership and difficult decisions they were going to have to make for the company to move forward. Im not surprised to see they are putting unofficial an pause official pause on their plan. Kurt there were some other elements of this ipo, there was some credit financing that was supposed to come when this ipo happened. Can you give us an idea of where weworks financials are right now . This has been a black eye for wework and the ipo market putting a white flag, showing that investors are not going to buy. Now, they will have to go back from a financing perspective, figuring out sort of next steps here, a fork in the road situation. You talk about the first thing, costs, and to cut ultimately, really put this car back in the body shop until it comes out healthier for an ipo later this year, maybe next year. You think about best case, into 2020. Urt i know softbank is heavily involved in this company. Can you give us an idea of what their involvement is . What is softbanks role going to be . They are going to have to roll up their sleeves. Its going to be hands on deck, and terms of not just the financing piece, but just business operations. Especially, when you look at a lot of employees have joined we and now that is temporarily off the table. They are going to need to make sure that the house is in order, look at the business model. You started to see it with uber and lyft, and now you have seen it with wework and others, peloton, path to profitability. It is a fork in the road situation for ipos. To be thetinues poster child for what ultimately is investors saying no more, in terms of these Business Models that lack profitability, at least a path. Kurt dan mentioned path to profitability. You mentioned tough decisions that need to be made. What happens next at wework . We have noted some of the stuff they have started to do. The new company ceo says the Company Wants to sell the 60 million gold stream jet bought last year. That was something that obviously got a lot of headlines, 60 million. They are going to need more than that to keep going. They have discussed selling several side businesses, including meet up, managed by q, and conductor. Seems like the company will also cut maybe in the thousands of jobs. They currently have about 12,000 or 12,500 employees, some pretty serious. I think they so pretty serious. I think they are looking around to see where they can make changes. There might be trimming in the Main Business as well. Kurt you mentioned a job cuts. What does this do for morale . The ceo is gone and their jobs may be on the line. What is the morale at the company . How do you move past Something Like this . Ellen i have talked to a few people that are there. It is tough times. You cannot imagine how difficult it is to know that these things are coming ahead in your company and not knowing exactly where. Just going through the change of the last six months as you said they really thought the company was going full speed ahead towards an ipo. They are reassessing how much they think their stock is worth. They are worried about their job. I think it is going to be really difficult and i feel for them. For what does this mean the broader ipo market right now when you see wework have these kinds of struggles . What do you take away from this from a big picture standpoint . Has been acture, it black eye, no doubt, for the broader market. It also shows that the companies with the strong Business Models, profitability, there is an appetite for those names. Er thats more frothi continue to have issues, investors in this market, those are not names that are going to get through, especially in valuations that are not down rounds from when they went private. Singlet, we are not going to saying look, we are not going to take some of those private valuations and we are going to command valuations that we feel comfortable with. Ultimately, i think a line in the sand was drawn here with rework wework. I think we will see the ramifications for months and years to come. Kurt i assume that means we will see you both here in the weeks to come. Dan ives is sticking with us. After a tumultuous year, Softbank Group is back where it started. In february, the Japanese Company gave its company a shot in the arm by announcing a buyback. The investments have dragged the share price down below where it was on february 6. Softbank has been hurt by ubers orks valuation and disastrous attempt to go public. Thatmusk tells staff 100,000 deliveries is doable this quarter. We discussed the numbers next. If you like bloomberg news, check us out on the radio. You can listen to us on the bloomberg gap, bloomberg app, bloomberg. Com, and on sirius xm in the u. S. This is bloomberg. Can ken tesla possibly tesla possibly test another vehicle delivery record . Elon musk seems to think so. And less flattering trend would be filing revenue. A revenue drop would be a downer for elon musk. They have a shot to deliver more than 100,000 electric vehicles this quarter. To discuss, we are joined by dan a whole dana holt and dan ives. We are hearing possibly record sales and yet a revenue decline. How does that work . Tesla sells the model three, model s, and model x. As the three has ramped up and is taking the world by storm, the sales of the s and x are following. Ing. Average falluin the average price is getting lower. Kurt tell us about the email. It was an mail saying email saying they have a shot at a record quarter of 100,000 deliveries. Today, there was some chatter that they are close to it, but there might be some glitches so logistical issues. The number to be is 90 5000, 3 95,356. Kurt obviously, no Company Wants to report a revenue decline, but it seems like that might be particularly harmful for tesla. Why do you think that might be . Dan it is a tale of two cities right now. You have to give them credit in terms of what they are saying 1q to toous get their 100,000 units. Can they show profitability . Tesla is a glass half empty view in terms of the street. Kurt i feel like we have talked about tesla for a long time as kind of having this vision for getting these electric cars into as many drivers as possible. Those you kind of weigh when they are selling the cheaper model. Isnt that kind of the goal they have had all along . Sh th goal is mass adoption ofure. Sure. The goal is mass adoption of electric vehicles. They have yet to show profitability. Year is down 28 this because profitability seems to be increasingly elusive. Kurt dan mentioned that 28 drop. What do you think tesla has to do to get things back on the right track here . Dan first, it is profitability. Talkneed to show not just the talk, but walk the walk with profitability going into next year. They also need to show sustainable demand in the u. S. They need to show it sustainably into 2020. Then, fundamentally, it is really, there are a lot of sideshows going on. It is more of a laser focus. To navigatesk through this nearterm period. Until they see that, this is going to be a range bound stock. Right now, the bulls are not necessarily popping the champagne yet until they see what the profitability looks like in terms of earnings. So manyn, there were Tech Companies that preached growth over profit. I realize they are different Business Models. When you look at google, facebook, and amazon, which for so long have been able to sustain business by playing that growth card. Is that something that tesla could do a better job of doing, even if they are not going to reach profitability . Could they play the growth up more than they are now . Dan the difference is, these capex models. Show they need to sustainable profitability. Otherwise, it is joyce going to be it is just going to be a capital read every 1824 months. For tesla, this has definitely been a step in the right direction, but it is one chapter in the book that continues to really be something that has not necessarily turned the corner in terms of profitability. That is why investors treat them differently. There is only one jeff bezos. When you look at everything elon musk has done, massively impressive, but ultimately as a stock, it needs to be about profitability. That is the key to the valuation. Kurt we talked about elon and that email in that email. He does a decent job of trying to instill confidence in the company. If they dont hit that number that we mentioned earlier, what should we expect from tesla in terms of employee morale . Im sure they will be close and there will be some speculation as far as how many vehicles are in transit. They will talk about logistics challenges. This is the first year they started delivering the model 32 countries like our stroll yet model three to countries like australia. People are tiring of this endoftheyear push. Kurt we will be looking for that number. Dana hull, thank you for joining us. Dan is sticking with us yet again. Also sticking with elon musk. He continues to have his eyes on mars. He has outlined plans for starship, the next generation rocket his Space Company hopes to use to eventually take humans to the red planet. Coming up, antitrust overload. The u. S. Justice department is launching its own facebook probe as the social network is already the focus of a federal trade commission investigation. We will discuss next. Bloomberg technology is livestreaming on twitter. Be sure to follow our global breaking news network at tictoc on twitter. This is bloomberg. Continues to be in the spotlight on capitol hill. The u. S. Federal trade commission is already investigating the social media giant, but it wont stop there. Theiam barr is pushing department of justice to start an investigation of its own. Will another antitrust probe make a difference in the way that facebook operates . With dan ives us is we are still with dan ives. I believe there are now four separate antitrust investigations into facebook. What does the doj offer Something Different than any of these others . In a certain sense, another investigation can be marginal. You will see things like these sort of me too subpoenas. Say, send us all of these documents and privacy claims, anything like that. In a certain way, it is marginal, but in another way, it is that much more of a distraction. It can certainly pursue a different line of inquiry, which would be another set of the battle tools that facebook would need to face if doj goes by them. Kurt you had a note recently and said that breaking up some of these big Tech Companies might be a tough argument to make. Im curious why you think that might be. Dan i go back to, even when we covered microsoft 20 years ago, keepsms of that really its keep. Do they prove any sort of anticompetitive behavior . That will be extremely difficult to prove. We do believe this is something for facebook, google, and ultimately, i think apple is next. Fine,going to be more maybe some tweaks to the Business Models rather than pure antitrust where they call for a breaking up of the Business Models. Kurt what is the more likely outcome of this if it is not an actual breakup . Do you think they go after facebooks advertising business, for example . Theseere other parts of Tech Companies that might be more vulnerable than splitting them up . Dan they will look at the unified messaging platform, especially on facebook, instagram, whatsapps side. Facebook is aggressively going after some of their strategic plans in terms of the next generation messaging platform. Right now, a lot of these companies, from amazon, facebook, google, even apple, they are learning from some of the mistakes that you go back to microsoft and gates, they were on the defensive when antitrust was issued and doj was going after them. That really hurt them for many years to come. I think right now, these companies are continuing to go on the offensive. They are going to significantly need the legal and other issues that are going to be distractions, they need to contain those. I expect them on apple to look at the app store. We are going to look out 1824 months, the bark is a lot worse than the bite. Kurt facebook of course is not really, you know, holding back. They are pushing into new industries, including cryptocurrency with libra. Do you think any of that might pose challenges for them on the antitrust front . Ostensibly, you have to think their lawyers have looked at this really closely and talk to the top leadership and said, we are under antitrust scrutiny, we have to do these absolutely as carefully as possible. If lawyers were always right, there never would be any of these cases. I think it is the kind of thing that the ftc, the doj, and states will be looking at as it goes forward. I think particularly on facebook, the acquisition strategy. How did you get so big . Buying instagram, buying whats up whatsapp. These are key things investigators are looking at. It is going to be a part of what they are looking at. I think dan is right. Antitrust has not necessarily shown it has an appetite to go after these kinds of companies. That does not mean it cant prove a very damaging distraction for them. En what has the offensive push been like for these Tech Companies . How has that been different from what you have seen them doing in d. C. In years past . Ben you have a whole different kind of set of defensive. Facebook is what it always does. It likes to say that it is cooperating and finding everybody. Or if you look at a series of open record requests that we got here focused on Cambridge Analytica see veryyou aggressive lawyering. They are talking about violations of the eighth amendment and 14th amendment, due process, those sorts of things. You also see very slowly but surely, defenders in various political camps starting to rise up and echo some of these talking points. You see people on the democratic and republican side starting to come down on these companies, so the pressure is ramping up. Kurt thank you both for being here. Brody. Dan ives and ben thank you for joining us. Speaking of washington, all eyes are on the capital, may be on the impeachment inquiry of president trump. Could this be what keeps antitrust regulators off big techs back . We will discuss next. This is bloomberg. Kurt this is bloomberg technology. Im kurt wegner in san francisco. The u. S. Department of justice federal communications justice, federal communications, commission have all been keeping an eye on big tech. There are possible probes and inquiries into apple, facebook, amazon, and google. They have also been calls from president ial hopefuls like Bernie Sanders and Elizabeth Warren to break up some of these companies. But now there is an impeachment inquiry into president trump, big tech breathe a sigh of relief . Sally served as an assistant attorney general in the antitrust bureau. Thank you both for being here. Eric, i want to start with you. You wrote a great column on this last week. Give me a sense, do you think all of the distraction around this impeachment discussion could actually be a benefit to these Tech Companies . Eric i think in the short term, certainly in terms of the media environment, the fact that antitrust has become a political conversation and that attention has animated a lot more action than we have seen in years, so when the story turns to impeachment, there is a degree to which facebook, google, amazon can take a breath and ir strategy. He certainly, for this moment, impeachment has sucked a lot of the oxygen out of the room. Kurt sally, what do you think . Do you think this is a lot of distraction in the press and on the surface, or do you think this could help behind the scenes . Sally i think it might affect the press, the coverage, and the media, but i dont think it will help the actual investigations. At this point, they are really in the hands of the antitrust worker bees, staff attorneys who are working diligently. The political decisions were already made. Those were the decisions to investigate. Now we are in the process of document requests, document review, depositions. All that stuff takes time, and i dont think the impeachment is going to distract from the work that the attorneys are doing on the ground level. Kurt you know, theres a bunch of different investigations. The attorneyously general, the doj, the fcc. Are any of those impacted more by the impeachment than others . Bely i would say doj would the most impacted by the impeachment process, just because there have been some implications the attorney general, william barr, could get wrapped up in that whole mess. The doj potentially, but at the same time, we have a whole antitrust division and career lawyers who are already working away. In terms of if there is any affect, the agency that would be most affected is doj. I dont think state ags or the fcc will feel any impact. Kurt we have seen this play out, although it has been a while with big Tech Companies lik