Company and address investor concerns. The stock is down 30 since is ipo. And stake out digital ad fallout after democratic president ial candidate Elizabeth Warren posted a deliberately false ad on facebook. More on social medias role in separating fact from fiction. But first, to our top story. Wework is considering handing over control to softbank. Bloomberg has learned that the Japanese Investment bank is convinced they can turn around the once highflying startup. Wework is also weighing 5 billion Debt Financing led by jp morgan. To discuss, i am joined by my guests, ellen huet and michelle davis, and, ellen, let me start with you. I want to separate the different deals. First, softbank taking control. What can softbank do that the other coceos cannot do . Ellen this discussion going on between wework and softbank, it is, look, the outlook is not good. We like that you have two new coceos we are interested in , but doing more. And if they did take a larger stake in the Company Maybe that , could change the company, so i think the discussions on the table are about mid to longterm plans around profitability trying to get expenses under , control, all of the things that wework has been criticized for the last couple of months. Taylor michelle, if something if something comes down to the need for cash and if softbank were to come in and take control, do we know how much money they would invest, loan, put up, whatever the sort of term is here, to get wework to 2020 . Michelle all of that is pretty much still in flux, and it comes down to between the jp morgan debt package and the situation with softbank, who can get everything together quick enough for wework, because at the end of the day, what it needs is cash. On the jp morgan side we know , there are talks for a package that could be about 5 billion, and a lot of it is going to come down to how much softbank can pull together and if it can do that faster than what the banks are doing. Taylor so, ellen, you heard michelle mention that 5 billion deal from jp morgan. Is that a separate issue here, or are those two tied together . Ellen even though they are different plans, there could be some overlap, so it sounds like the board of directors and other people with influence are meeting this week. We do not know exactly when, but it sounds like discussions are ongoing, and we expect to hear more about it, maybe in the next few days. With things on the table, there are going to be decisions coming up. Taylor michelle, i want to show you a chart that we made for our bloomberg audience, having a pretty good day, trading at 90, 91 cents on the dollar. Four bonds. That there were to be Debt Financing what is the appetite , right now for a junk deal . Michelle it is interesting. If you look at that graph or chart, the bonds are trading at pretty distressed levels amid the turmoil related to the ipo and last week there were reports that wework possibly having assumed than expected cash crunch. Possibly having a larger than expected cash crunch. And then the bonds did rally, and that actually helped their borrowing costs, but it is still to be seen how much appetite there is from Bond Investors for a deal like this. You know, going into the end of the year, sometimes it is hard to get risky deals like this in a highyield bond market done, unless there are some pretty lucrative or sweetened terms offered to them. Taylor and, ellen, i want to take a look at another chart, which shows this about 10 relative to uber and tesla, some other Risky Companies we talk about, and on friday, we talked about terms of the conditions, 25 plus libor. Any sense we do not have the appetite for the yield . Any sense about where they are commanding a 10 yield . Ellen the problem could be next month if they do not get money. This is a company that spends a lot and doesnt have control over expenses. We have seen them trying to cut certain parts of their business, layoffs, just trying to get expenses under control. Taylor michelle, our colleague at bloomberg, tim, pretty much said that the damage to softbank by backing up wework again would be much more than any billion dollar investment. What is the damage to softbank if they stepped up to the plate here . Michelle it is an interesting opinion, but at the end of the day, softbank has already put a lot of money into this company, so they will not just walk away. Probably, you would have to weigh the hit if they did that with the amount of money theyre going to have to put into help turn wework around. It is kind of the same story with jp morgan. They have already put a lot of money in and have taken a reputational hit, and at this point, they may have to bite the bullet and help turn the company around, putting good money after other money. Taylor where does the company stand . Amid all of the background noise, do they continue to push forward, selloff investments, save cash . What do they do in the coming weeks as the rest of this gets had out . Hashed out. Ellen it seems like last week, they were going to close in private elementary school, wegrow, and they are selling the gulfstream jet. There were some reports that they were maybe freezing the opening of new locations. My sense is that they are really hunkering down and trying to get expenses under control while they figure out how to move forward, and i think any major cut they are likely to make, as the coceos told staff, they are likely to cut a lot of jobs starting this month, so very soon, just trying to get the core business under control. Taylor that was bloombergs ellen huet and michelle davis. Bloomberg has learned that investors including softbank and jack ma has a company that is valued at 16 billion, a top Online Financial Services firm. The company is indias top Online Financial Services firm. And coming up, this week starts earnings season. What you need to look at. As the big banks start reporting this week. This is bloomberg. Thats next. S next. Taylor earnings season is underway with banks reporting drugs week, including citigroup and wells fargo reporting tuesday, Morgan Stanley thursday. Here with a look at what to watch when it comes to technology is our bloomberg reporter, sonali basak, so talk to me first. What are the banks technological priorities here . Sonali you have banks spending the most money on technology, jp morgan and bank of america each spending more than 10 million, annually, even when we see them keeping a big lid on costs. Why are they spending the most money . Because they are the ones going after the millennial consumer, in terms of Digital Banking and Digital Payments so you can see , this really doubling down, while the other investment banks will focus more on electronic trading, for example. Taylor yes, so with technology, what are we looking to hear from them specifically in terms of hiring, Digital Payments, all of their technological advances . Sonali sure. We have been hearing that banks are hiring more coders, and you can see in this chart that Digital Banking is the number one thing that people are looking at. With that said, i would not get too scared, because they still have a lot of branch networks, and something not high on the list, watching a relatively ablockchain still relatively small percentage on what people are looking at in terms of hiring and expenditures here, and the same with biometrics and a. I. , even, even though you hear a lot about Artificial Intelligence taking over other parts of the industry, like investments. Taylor and when you see Digital Banking there, 53 , a lot of these come from peer to peer. Payments. What about zelle . How much will be the future of banking for Companies Like bankamerica. Sonalil you can see the figures in their Earnings Report that the zelle figures are a Straight Arrow upward for bank of america. And it is pretty significant in exponential growth, so it is pretty big, including not necessarily for zelle but Digital Payments, and bank of america does highlight its relationship with zelle, and both banks highlight this with younger customers in particular. Taylor as revenue remains uncertain, in such a volatile environment, do the analysts you speak to think it is a good idea that these banks are continuing to invest in technology, increasing investments in that space, even though Topline Revenue growth can be elusive at times . Sonali it is true. Investors and others know that apple is a threat and that facebook is a threat, so they like to see these banks investing more in technology to prepare themselves for the future, because the traditional business lines are really pressured. If you look at trading, there has been pressure all year. Loan growth is growing, but rates are low, and people are going to want to see these banks transition into a new era while also attracting new customers in a competitive environment. A lot of investors compare that to the chinese counterparts who have seemed to crack the code in terms of Digital Payments and attracting people to more online methods. Taylor and is it just the big banks, or what banks are poised to outperform, given the transition to being more of an Online Company as opposed to a traditional Banking Company . Sonali the visas, mastercards, the Global Payments of the world that are outperforming versus the banks are the same structural headmans women talking about. So you can see them betting on technology and winning. A lot of them are investing and not seeing a lot of growth, but payments, if you look at the stock chart, it cannot be denied that they are winning in the investment race. Investors are going to things that can be transacted online. Taylor the banks and the increase over into the technology space. That is bloombergs sonali basak. Thank you for joining me. And i want to transition to uber, ceo firing about 350 employees, hitting a handful of divisions including selfdriving car develop mid and food delivery. More thandismissed 800 employees over two rounds of cuts in july and september. Joining me to discuss is bloomberg technologys lizette chapman, who covers the company for me. So, first, start with the 350 that we heard about today. What do we know . Lizette the way it was described in a company email, Dara Khosrowshahi said this would be the last in a wave of cuts that he promised last spring, so as you mention, they had some cuts affecting marketing, product engineering, and now with this, it extends to uber eats and autonomous driving, so it increases the total number of people laid off to around 1200 or so. Investors seem to like that, and the stock which has been trading 30 down from its ipo since may bumped up a little bit, about , 4 , today. Taylor you mentioned this was the last wave. We also got the 800 in july and september. Those cuts different allyrtment and geographic from what we got today . Lizette this is part of a larger strategy that the ceo laid out over this spring. If you were to design uber, what would it look like, and they Went Department by department, and they said, hey, we have to seek profit, and as we have talked about on the show, it did deliver a 5 billion loss during its first quarterly report, not a good look. Your question was how is this different, it is a continuation of what was set in motion back in the spring, and he said this would be the last wave of cuts. Whether another will come who , knows . We just know we are able to report and confirm. Taylor the 5 billion loss number, if you look on the essay function of the terminal we see , they are projected to lose 6 billion by the end of this year. Are these cuts enough to offset that, or is it just a step in the right direction . Lizette yes, they will not touch the 5 billion or 6 billion, but to be clear, the 5 billion loss reported last quarter, a big chunk of it, 3 billion, was related to ipo costs, so looking at how their expenses are going to make sure that they are able to deliver all of the profit, which, so far, it has not been able to do. In light of that onetime expense. The pressure coming down since he ipo . Its not good to have your stock trading below where it ipoed, and there is the larger transformation that Dara Khosrowshahi is trying to do since inheriting this company from its previous ceo and founder, which is not growth at all costs as a mentality. It is a continued growth, but lets take a look at profit. As a public company. Taylor you mentioned growth. So, finally, what does this mean for expansion plans . We have talked about autonomous driving and uber eats. How do they fit into the core ecosystem . Lizette across all of the different lines that we outlined before and geographically, about 70 of these cuts were coming from north america, the other 30 spread out more globally because this Company Still needs to and wants to grow. Taylor lizette, thanks for joining me. Coming up, apple is surging on unexpectedly high iphone demand, but catching criticism for sending web browsing data to Chinas Tencent holdings. More on apple and its complicated relationship with china next. This is bloomberg. Taylor china may be winding down its fight with tencent games played outside china, they have told reporters about the nba issue. Tensions flared after the general manager of the Houston Rockets tweeted support for hong kong protests. The state run tv network which quit showing nba games. Meanwhile, apple coming under fire on monday for sending data, including ip addresses, to Chinas Tencent. This is the latest criticism of how the Company Operates in the worlds most popular nation. On. Ino populous joining us is mark gurman, who covers all things apple for us. Walk me through how this is different from what they were doing before. Mark to answer your question pretty simply, it is not really any different. This is more of a revelation that has come in light of the last week or two of discussion about the way china and apple had been working together and how apple has been operating, like you said, in the region. This comes down to a feature that is Pretty Simple in practice. Basically, they use google outside of china and tencent in china to figure out if something if the website is malicious to steal your data. As part of that time apple can send ip addresses, which is a way to get your location, to both tencent and google. The question is, is tencent receiving that location data and how big of a concern that is, and that is what people have been talking about this morning and what the issue comes down to. Taylor and how valuable is this data to tencent. Mark if they are able to get user location data, it is very valuable because they are known to have strong affiliation with the chinese government, which, here in the u. S. , that is not something people would be fond of, apple providing location data to a governmentaffiliated search engine. It does not appear anyones location data is in danger. This is just a lot of people responding and criticizing apple, following the nba revelations that you so eloquently outlined. Taylor mark, a really good story out highlighting the demand for the iphone 11. This this come down to it being 50 cheaper than the comparable model one year ago . Mark 750 is what the iphone ii starts at, but this year, a lot of people are due to upgrade, right . The average consumer tends to upgrade their iphone four years ago, and four years ago was when the iphone 6 and 6s were popular, where they changed the screen size. Four years is up. It is in was five years since those funds came out. Those are having batteries that are starting to give out. The processors are quite sluggish. They are losing compatibility with ios 13, and it is time to upgrade, and that is this fall, and you are seeing people combined with that 50 are price cut jumping on these new models. , taylor and the street has been really, really bullish on this. Given that we got a potential phase one trade resolution on friday, we know that some tariffs will not go into effect and to be determined on december 15. Any idea if that is also boosting demand if apple does not have to pass on higher costs to the consumer . Mark i dont think so. I do not think consumers are thinking about that. Apple is not impacted one way or another by these october 15 these 1015 tariffs foreign investor or analysts whether or not they were going to go into place or not, but to investors, these tariffs not going into effect, like you said, could give some optimism that the december 15 tariffs also will not go into effect. Obviously, we do not know that, but i do not think that consumers are seeing any impact, with the iphones. Taylor Credit Suisse are really bullish on this also because when you take a look at the average selling price, it also gives some momentum to that average selling price that is so key to earnings. What is the number one thing you want to hear about on earnings on october 30 . Mark yes, i sort of disagree with Credit Suisse. On that point about the asp rising. I think that the esp may go down quite a bit. One thing that is lost with this demand is very is it is still likely to be down yearoveryear, and the asp going down, so we will see, but to answer your question, the most important thing will be the Holiday Quarter q1 for 2020. Taylor bloomberg technologys mark gurman. And senator Elizabeth Warren is going after facebook again, warning of dangers ahead of the 2020 elections. We break it down. This is bloomberg. Next. This is bloomberg. Y95ooo taylor this is bloomberg technology. Im taylor riggs in san francisco. Democratic president ial hopeful Elizabeth Warren is taking on facebooks political ad rules, and doing it by buying ads on th