We break down the numbers. And microsoft stopped making phones years ago and now its back with a new model that will run on android. Is now the time to get back into the slowing Global Smartphone market . But first, our top story. Work pulled the plug on its ipo temporarily, saying they want to focus on the core business before going public, which they still plan to do. They have been a burning through cash and now plan thousands of job cuts. Wagner spoke to an analyst and bloombergs elliott hewitt, who covers the company. It is official. The ipo will be put on hold. Theyred this morning going to be pulling it, that confirms a lot of the reporting we 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. To theyre going to be spending the next few months with these new coc. E. O. S showing wall street were cutting back on expenses, making changes, the company is no longer a company with this wide variety of businesses alongside its main core business which is renting out office space. Kurt any one specific moment you think gave the officials there the idea that they should pull back on this plan . Ellen i think it seemed pretty clear from the time last tuesday when adam newman, the c. E. O. And cofounder stepped down that there was going to be a lot of changes at the company. All of a sudden you have two new leaders. People who were both wework insiders but had experience at other Large Companies outside taking over and immediately i think observers including myself were thinking how are they actually going to continue forward with their plan as they had said earlier 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 the first day of new leadership about difficult decisions that they were going to have to make in order for the company to go forward. I think we were not surprised to see that theyre putting an official pause as they called it on their plans. Kurt dan, i want to bring you in here. I know there were obviously some other elements of the ipo, there was some credit financing, for example, that was going to come when the ipo happened. Can you give us a sense of where weworks financials are right now. Im sure they need some money. What is the business like . Dan right now, this has been a black eye obviously for wework, as well as the ipo market putting up a white flag showing investors arent going to buy some of the Business Models with lowestier loftier evaluations, it hits on cash and profitability. They have to go back from a financing perspective to next steps here, it is the fork in the road situation. First thing, they have to cut costs, invest some of the pieces and really put this car back in the body shop until it comes out maybe healthier for an ipo later this year into next year, you think about best case 2020. Kurt soft bank is obviously heavily involved in this company right now. Dan, can you give us a sense of what their involvement might be moving forward. I know there is talk of maybe them providing some of that capital to wework, what is soft banks role going to be . Dan with newman out, they have to roll up their sleeves and a hands on deck, in terms of just not the financing piece, but the business operations. Especially when you look at a lot of employees who joined we work ipo with some of the calm perspectives and now are at least temporarily off the table, theyre really going to make sure that the house is in order, look at the Business Model and really right now what ambassadors are saying, you see with uber and lyft and wework and others, peloton about its about profitability. There needs to be a path to profitability as risk starts to come off in this market and its a fork in the road situation for ipos. Wework continues to be the poster child for what ultimately is investors saying no more in terms of these Business Models that lack profitability at least the path. Kurt ellen, dan mentioned path to profitability. You mentioned tough decisions that need to be made. What actually happens next at wework . Ellen we reported on some of the things they started to do, notably, a symbolic gesture than more than anything else, the new c. E. O. Says they want to sell the 60 helpon gulfstream jet to adam newman fly around and do travel with his job. That obviously got a lot of headlines, 60 million, they need more than that to keep going. They have also discussed selling several side businesses they acquired in the last few years that includes meet up, managed by q and conductor and there are also talks about job cuts. As we reported, the company will probably cut maybe in the thousands of jobs, they currently have 12,000 or 12,500 employees, so pretty serious. Theyre looking around to see where they can make changes and well have to see if that comes in different parts of the business or maybe also some trimming in the Main Business as well. Kurt you mentioned job cuts, what does this do for morale . You have employees just a few weeks ago, they were seeing a big payday on the horizon and all of a sudden the c. E. O. Is gone and their jobs may be on the line. What is the morale in the company, how do you move past Something Like this if you were wework . Ellen its tough times. You cant imagine how difficult it is to know that there are going to be these things going ahead at your company and not knowing exactly where or going through the change over the last six months. As you said, they really thought that the company was going full speed ahead to an ipo. For a lot of employees, theyre reassessing how much they think their stock is worth, theyre worried about their job. Theyre worried about Going Forward. I think its going to be really difficult and i feel for them. Kurt dan, one more for you, what does it mean for the broader ipo market right now, you see wework have these kind of struggles. Is this a signal for other companies thinking about ipoing, what do you take away from this from a big picture standpoint . Dan big picture, a black eye , no doubt, for the broader market. I think it also shows that the companies with the strong Business Models, profit ability with a secular trend, there is an appetite for those names, but the ones more frothier that continue to have sort of issues, investors in this market, those are not names going to get through. Evaluations that are not down around from when they went private. This is a shot across the bow from wall street to the valley, especially on the private side saying, look, were not going to take some of those private valuations and were going to command valuations that we feel comfortable with. So i think this was, ultimately, a line in the sand was drawn here with wework. I think we are going to see the ramifications for months and maybe years to come. Taylor that was wedbush analyst dan ives and our own kurt wagner. Coming up, tesla misses the mark. Third quarter deliveries of set a record, but its not enough for investors. We will have details. And if you like bloomberg news, check us out on the radio. You can listen on the app come on bloomberg. Com, and in the u. S. On sirius xm. At, app, bloomberg. Com, and in the u. S. On sirius xm. Taylor tesla news dominated the week as elon musks 100,000 livery goal went unmet. They reported 97,000 deliveries in the Third Quarter on wednesday. Earlier this week, analysts mentioned the delivery goal put forward by musk may have been talk to divert attention from a less flattering trend, falling revenue. I was joined by a guest, and from detroit, david welch. It is a record for them, but not a record by much. They couldst say probably get to 100,000 vehicles if they pushed. I wonder if they would be shaving saying anything if shares have reacted better. The more alarming thing is that most vehicles are lowerpriced, lower margin model threes. You are starting see a lot less on the expensive vehicles. The question is where are the profits going to be coming from if you are selling these smaller, cheaper, lower margin vehicles. Taylor jean, what is your take on the 97,000 number . Gene it is a good number. I am in that camp that it would be perceived better if not for that email. There are two topics here, what is going on with the fundamentals, and what is going on with communications intesa. Elon musk continues to say things that are not good for the stock. In this case, and separately, if we look at the fundamentals, the most important is the fact that they got a record. The 97,000, to put that in context, it puts them on track to hit the low end of a range of 360,000400,000 vehicles for the year. Originally, investors said it was absurd today that. But they are tracking toward that lowend. So i think it is, despite the mix of the greater model 3s, the 82 , that is consistent with the june quarter. My simple read is i think that this is a sign that the demand question, which is no longer about production, this is a demand question and continues to question continues to be answered. And it seems the u. S. , and parts of europe are ready for evs. Taylor what is your take that on what david was mentioning, that they are sacrificing price for the sake of market share, selling the lowerpriced vehicles . Gene it is true, that is a fact. But my view is the sweet spot is going to be in the lower cost, lower margin vehicles. And it is still 2 of vehicles in the u. S. So i think that even though that is at a high level, that is not a good trade from highermargin to lower margin, but the size of the market is so massive that i think this is the right thing for the company to continue to aggressively pursue. Taylor david, how is demand in china . David there is Strong Demand relative to other markets. The government certainly helps that with a lot of programs that make manufacturers sell these vehicles for certain credit systems. And there are a lot of incentives to buy them. In certain cities, you cannot get registration for vehicles unless it is a plugin car. So there is good demand in china. Two genes point to genes one, tond it was a good get scale they will have to sell more lowerpriced vehicles, and there is an appetite for it in china and in europe. But the question Going Forward is still one of margins, because tesla will have to lower costs and show a profit on the se vehicles. They have a very big staff at their plant, they are not the most efficient manufacturer. They have been trying to lean things up in their new factories, but they need to show they can make a profit on these vehicles as they ramp up volume. That is going to be a matter of building up their systems and Getting Better scale. And proving that they can really operate this company. The shares are no longer trading on the hope that they will grow, they are trading on whether they can execute the business. Taylor any path to profitability . Gene i think eventually, yes, the scalability that david was talking about, they are taking this approach of the fit to factory ine giga china and europe, the markets more recently have not been favorable. That is not news to anyone. But what is important is when you have these massive opportunities, and electrification falls in a group of undeniable truth, i think that investors will be, despite the trend in the market toward profitability, i think they will be more lenient toward it tesla. Toward tesla than they have been. They will continue to give the company room as long as the man is there and there is a path to profitability. If i am wrong and they continue to burn cash, i think that if the demand continues to be there, they will be successful at continuing to raise money. They do not need to raise money for a few years. I do nothing profitability is the critical question right now, i think demand is and they are doing a great job. Taylor facebook also was in the news this week as Mark Zuckerberg appears poised to take on the u. S. Government if senator Elizabeth Warren wins the presidency. That is from leaked audio obtained of zuckerberg with a july meeting in a july meeting with employees. With Elizabeth Warren, if she is elected president , i would bet we have a legal challenge and i bet we would lynn legal challenge. Would win the legal challenge. Does that still suck for us . Yeah. A major lawsuit against our own government . That is not the position we want to be in. We care about our country and wants to work with our government. But look at the end of the day, if some he wants to threaten you, you go to the mat and he fight. And you fight. On othere also spoke topics, including cryptocurrency libre and chinabased at tictoc tiktok. Whooke to a representative lobbies on behalf of Companies Like facebook and google and sarah frier, who covers facebook. Is not only a matter of right living 20 different companies. Keep in mind there are dozens of companies with agencies with oversight over the tech industry. But it is also the notion of having a centralized place where platforms cans bigger out can figure out what is spam, what comes from overseas, and comprehensively address those problems. That is what mark is talking about. Since facebook is large, they have the backing and ability to see points of attack to prepare and protect american interests and democracy. Talk to me about facebooks argument. I have heard this. You have heard it over and over that being bigger helps them solve the problem more efficiently and with better resources. I just dont really buy it. Facebookhat if you are and you have all of these different services, certainly you can say that a problem on instagram is on messenger, to, too, but there are also collaborations they have had with companies outside of facebook. They do the same thing with child explication content. So that all the companies can take it down at once. And so if the companies are broken up, you can easily have that same kind of arrangement with they all share information broadly. Taylor i want to pivot quickly to competition. Smart point up the about competition internally. Social media and video platforms, facebook is responding by developing i believe it is lasso. Did we learn anything today . It is interesting that zuckerberg wants to try and push lasso in countries where tiktok is not yet big. It is interesting because he as instagram explorer meets Instagram Stories and he will try to shift instagram in that direction. He has tried this many times, copying products, pushing them out to a similar user base. But we really have not seen that take hold, except for with Instagram Stories. So its always a shot in the dark. We will see if it works. But it is interesting that tiktok is the new threat on the competition side. Taylor that was the general counsel for net choice and bloombergs sarah frier. President trumps impeachment inquiry Takes Center Stage in washington. Will that affect the various antitrust probes . We explored the reach of federal resources. And later, the big 5g rollout. We hear from the verizon ceo. This is bloomberg. Taylor the millennial mainstay forever 21 has filed for bankruptcy. The fashion retailer says it has to pay 350 million in financing to stay afloat. But the bankruptcy shows another sign of the punishing pressures of the broader retail apocalypse when the rise of ecommerce siphons shoppers. For more, i caught up with a bloomberg opinions columnist. They said in ecommerce comprised 60 of their sales in a court filing, and that would be a lower penetration then we see for the apparel business overall. You just dont have to look that far to see the companies that are eating forever 20 ones 2 1s lunch. Fashion anova is one nova is one, tailored to instagram from the start, and forever 21 has suffered at the hands of brands like that. Taylor you mentioned instagram. How has a social media changed these retailers can survive . A lot of these retailers have had to partner with influencers a has gottennov hawk theirugh to products on instagram. Forever 21 has had less success. Instagram is also rolling out features like shop goal post that these brands shoppable posts that these brands have to figure out how to master. It is important for all of these brands, especially one that courts 18 shopper a teen shpper. Shopper. Taylor enter stage right, you have ecommerce subscription models. List goes on, really disrupting this market. What is the difference . What are these models doing to disrupt the market . , in particular, is a data play. They are trying to amass data on their consumer and have built their brand on that idea. That they are not just thinking of merchandising as an art, but a real science. Thinking of everything from the measurement of a sleeve to the aesthetic of a particular garment. All of that is based on feedback they are getting from customers. The theory is that they will be able to manage their inventory in a smarter way and create a more pleasing experience for customers over the long haul. Been more of as let 1000 flowers bloom model. A company like forever 21 is getting five shipments a week. Some are hits and some are mrs. Misses. So these upstarts are bringing something new to the game. Taylor are these idiosyncratic stories or a general theme . That you have to be, like you said, more databased to succeed in this market . There are definitely idiosyncratic things about forever 21. They over expanded their stores way to quickly. Too quickly. They have stores that were huge. Those are things that are specific to the decisions they made. But to me, there is no doubt that data will play an increasing role in marketing and inventory. Even your merchandising decisions in your stores and websites. We are still at this place where retailers have a lot of data and dont know how to harness it. The ones that figure out how to actually use it, those will be the ones that win. Taylor that was sarah of bloomberg opinions. Still ahead, microsoft is getting back into the smartphone game. But is now the right time given the global slowdown . We get the details on its foldable phone in a bit. And we are Live Streaming on twitter but check us out tech nology and follow our global breaking news network tictoc on twitter. This is bloomberg. Welcome back to the best of bloomberg technology. I am taylor riggs. Attorney general across the u. S. Are keeping a close eye on bank tax. Had probes on Companies Like apple, facebook, and google. There have been calls from president ial hopefuls like Elizabeth Warren and senator sanders to break up some of these companies. But now there is