Joins me. Dent his new venture. And, the head of colibra, david marcus, joins us for an exclusive interview. Continues to, continues to captivate investors. Easing weoptions for works cash crunch. Continuedon the turmoil at we work is bloomberg s leon a baker who has been covering all the facets of the story. Talk to me about the softbank side of this. They are hiring some bankers with the restructuring. What are they hoping to get . It doesnt seem like there is an investment banker right now who is not on the we work situation. They are working with houlihan loki, soft , restructuring specialists. They want to make sure that the assets are ok, that they understand where the leases are, what is the value. They are brought on to help softbank figure out if it wants to plow more money into we work. The we work board has hired another boutique investment bank, advising Board Members on wework should take. Should they take a risky highyield bond package that j. P. Morgan is organizing . Two options,ose what does it seem like wework is weighing doing more at this point . Liana we have reported they are leaning more toward the jp morgan debt package because it is less onerous for some of the investors in wework. If softbank were to invest more, i have heard some people describe it as crammed down financing, where the terms would hurt the early investors in wework and some of their employees. That might be one of the reasons why wework is leaning toward this jp morgan 5 billion debt package. Nothing is certain. Wework said they are talking to investors. There is no package on the table. Taylor amidst all of this, we did hear that the communications chief officer did resign last week. Is that a oneoff situation or is that more of the broader turmoil going on . It seems there is ongoing bad news. Earlier this week, there was a story about formaldehyde in the phone booths. Losing a Communications Officer is a bad sign. But there are plenty of pr advisers out there im sure to help the company. Also crept into some of the Bank Earnings calls tuesday but not in a good way. Jp morgan, which is crafting the roughly 5 billion financing package, said exposure to wework. S not material our private investment portfolio was burdened by certain negative valuations, including a 80 million mark in our physician with the we in our position with the we company. Goldman, i think the key is writing down their investment by 80 million. Do i have that right . You do have that right. It could have been worse. Jeffrey had a small stake in wework and they wrote down their investment by 100 million. A much bigger write down when you take uber and trade web together. Jp morgan would not really give us any color on the size of the writedown, but remember that jp morgans exposure was a lot different. Thathad funds invested made them all together one of the biggest investors. Taylor i want to take a look at jp morgans exposure. Some of the bonds were hitting a record low on this. 13 had yields at about percent. When you tie in jp morgans exposure, and that deal, what is the appetite for any deal that has a 15 coupon or so attached to it . Debt, no5 is risky doubt about it. Right now, pretty weak at this part of the year when the markets overall look pretty choppy. With that said, it is crunch time for jp morgan to look out. Dozens of investors here willing to buy these bonds at a much higher yield or to get into this debt at a much higher yield. The idea is to compensate these investors here for what they are taking on. Welor you mentioned, as were talking about goldman sachs, not only their investment in wework, but also some of the investments in uber as well. Walk me through that right down, 270 million or so on uber. Sonali these are marked to market investments. They have a part of the business, called inl, that seems to be a pretty opaque part of the business. I think investors will want more clarity into the next year as goldman gives investors more idea of the overall strategy. These investments really matter. They have private equity and debt investments. So, uber, trade web, this is a big part of their public equity portfolio. It is a very specific part of their holdings. It goes to show you, these investments are volatile. Investors knew that they would be. It worked the other way when investments were up. Taylor we have a quote hear from David Solomon of goldman sachs, who was mentioning apple card, really highlighting what a success it has been for them. What do we know about apple card as goldman looks to pushover a little bit into that consumer side of the business. Sonali it just launched, it was only this summer. If you know anyone who has it, it is a pretty sleek looking card. We dont know anything really about the profitability metric but it has been one of the best launches of a card out there. The credit card space is enormously competitive. Jp morgan has their own rollouts. The partnership with apple is quite significant. Thanks for joining me. Coming up, where are the laughs . Standup specials on netflix are about to undergo a massive change. The new approach to comedy. This is bloomberg. Are scrolling through your netflix queue, chances are pretty good you will see a ton of comedy specials, but that is about to change. After pouring hundreds of millions of dollars into programming, netflix is cutting back. There will still be comedy specials, but just not as many with names like Jerry Seinfeld and patton oswald. I am joined by bloombergs lucas shaw in los angeles. Why the change . Netflix funded really and unprecedented amount of standup comedy over the last few years. Aboutf this was just banking a huge library so people had something to come and watch. People are looking at the roster, perhaps they realized that they dont need quite so many or now that they have that library they can slow down their spending. Last year, they were releasing more than one a week. Taylor the strategy, is it the right move for the company . Lucas i do think it was an effective way of bringing in big talent. Ellen generous, chris rock. The companys response was not that they were abandoning standup comedy but that they were reevaluating or reassessing. More investment in things like sketch comedies. Then these collections of shorter standup episodes of upandcoming comics. They were investing in new areas they thought might bring in new customers. Netflix is always looking for ways to optimize their spend and bring in new subscribers. If they feel like they have a lot of the new standup comedy fans, maybe they feel they have the opportunity to bring in sketch comedy fans given that that is a different audience member. Taylor this is a company that spends 15 billion on content. Any idea what the priorities are Going Forward . Lucas international is the biggest one. They already have a ton of comedies, dramas scripted programs in the u. S. All of the growth Going Forward, or most will be international. 72 million of the projected million new customers are supposed to come out of the u. S. Latin america, even africa and the middle east. Shaw, bloombergs lucas thanks for joining me. I want to stick with netflix because as we talk about the new content strategy, we look ahead to third earnings with dan morgan. He joins me from atlanta. A chart i am showing in my bloomberg it shows a drop off in subscriptions. Is this your biggest concern when it comes to earnings . Dan in the second quarter, a bit of a disappointment in terms of missing estimates. As your other guest was saying, looking at 7 million on this upcoming quarter. Aboutllion international, 800,000 domestic. Really the driving force in subscribers. ,e dont have the competition apple at 499 a month, disney at 6. 99 a month, they will be releasing those services in the month of november. After this, it will be full on in terms of competition. Taylor when that competition comes online in the coming months, what do your estimates say about the drop in top or bottom line estimates when you look at the fundamentals of netflix, given the new competitive environment . Know if they change quite yet. We have to see of people will drop netflix and go to disney or pick up apple and so forth. It could be kind of a soft change, which is that most people will maintain netflix and maybe add disney or another service down the road. Either think it is an or. We have to reduce estimates in terms of subscribers, earnings. I think it is more just, lets see how this impacts the numbers and go from there. I still think you are intact fundamentally with the netflix story. Taylor how worried are you about cash burn . You are looking at a company that, on an annual basis, goes through 3. 5 billion of negative free cash flow. The reason why cash flow is important, and coming into this quarter, the numbers about 9 billion cash burn. If they are burning through cash, and a lot of it is going into content, 15 billion for the year, 17. 5 billion for next year. Burn,think about the cash they have to have money on the Balance Sheet. The issue debt. Theyve got about 12 billion in debt right now. As they work through the Balance Sheet and pull money out of the money market or cash area, then they have to come back and issue more debt to counter that. It is a fierce cycle. We are obviously focused on how much they are burning on the quarter, will they have to issue more debt, how long will the cash and Balance Sheet sustain themselves. Taylor i take a look at your notes and i will also look forward to ibm, earnings which will come tomorrow. You are looking at a top and bottom line decline on the yearoveryear basis in the quarter. What are you looking for that drives those declines. We are looking for a2. 7 drop in revenues, about 22 drop in earningspershare. Someone said there is a slowness in the International Finance area. Again, and this red hat acquisition gets fully integrated, we are looking for negative impact earnings for 19 and 2020. Really not until 2021 do we start to see the blossoming of the red hat deal supposedly. Until then, they are still kind of stock in that enterprise mainframe server business which is very competitive and they have been, negative growth on the top and bottom line. We still have kind of a wait and see attitude on ibm. Taylor if the stock is undervalued, why has it not been rewarded by cash . Why arent they being rewarded for that . Dan you would think they would be because they pay a huge dividend. The Technology Sector apple decentthat has a dividend. I think what it is kind of showing, even though they are conserving cash, there is skepticism on the street of whether this hybrid will pay off for them. You are still seeing a massive dividend without a lot of value guys going to the name and driving the stock up. Taylor thank you for joining me. It is never too early to start your holiday shopping. Ingle unveiled new products its annual event in new york. Join us for a conversation with the google Vice President of devices and services, next. This is bloomberg. Unveiled itse has newest smartphone alongside several new smart home devices at its annual hardware event in new york. It comes on the heels of other product announcements from rivals microsoft and apple. Westin spokeavid with sarah spoke with rick osterloh. Rick we are focused on building the best possible experience. We bring the latest innovations. Have always been great with cameras. We have the awesome photography experience that we added to that today with a great zoom experience and another number of tricks we are doing with machine learning. We also have a new google system running on these devices. The speech models are running really fast. Ui that is easy to use. We think this will bring help to our users and we think a lot people will like it. How much will you compete on price with some of those competitors . Atk pixel 4 will start 799. We also offer a new range of whichts called pixel 3a, offers a much lower price point, starting at 399. We think that portfolio appeals to people looking for a great Affordable Phone and a premium flagship phone. David the google ecosystem, how open or closed will it be . He works with nest phenomenon, i think you have cut back on, havent you . We are migrating all of our developers so we have one standard interface to how you interact with google services. Of course, android, the fundamental system our phones are built off of, has been opened since its inception. I think that is one of the key characteristics, that sony people can build a great product line off of android. Avid there is talk about possible acquisition of fitbit. Does the antitrust inquiry allow you to look for things to buy . Rick we dont comment on any speculation about acquisitions so i cant comment. David but you are not out of it. Rick we are always looking at strategic options. Privacy. Lk about as we move into this world with the internet of things. I have nest and things like that. Theres a lot of talk about privacy and how we can trust our data. How can you reassure a customer that it is not being used for things that should not be used for . Privacy and security are at the core of everything we are doing. Announcements on how we give users options to manage privacy. Google always wants to make sure that users are in control and have clear transparency for what is going on with their data. Now you can go to your google account, see what is happening with your web and activity, your youtube history, location history, there are really easy settings to delete data automatically, turn on any information that is collected. Users really are in control. With products in the home, there are products in your daytoday life,. Simple offoner switches so you can turn microphones and cameras off. We have indicator lights to let you know when something is recording. We also just added a great new capability with Google Assistant where you can delete data by just saying, please delete the data from the past day. It will do it for you. We are focused on engineering great privacy and Security Solutions for our users. Googleshat was hardware chief rick osterloh, spooking speaking with bloombergs david westin. Later, we will speak with googles Vice President of hardware design. Still to come, he turned around target and made apple the place to be. His new company. We hear from ron johnson just ahead. Later, the conversation with david marcus, the man leading facebooks foray into cryptocurrency. This is bloomberg. From the couldnt be prouders to the wait did we just winners. Everyone uses their phone differently. Thats why Xfinity Mobile lets you design your own data. Now you can share it between lines. Mix with unlimited, and switch it up at anytime so you only pay for what you need. Its a different kind of Wireless Network designed to save you money. Save up to 400 a year on your wireless bill. Plus get 250 back when you buy an eligible phone. Call, click, or visit a store today. This is bloomberg technology. Im taylor riggs. When you think of ecommerce, your first thought is you order a delivery from a company like amazon and the package arrives and that is pretty much it. But four years ago, the Company Called enjoy looking to change the whole experience. When you purchase on enjoy, you get a representative who visit your home, helps you set up the new technology with the goal of helping you get the most out of your purchase. Enjoy was founded by ron johnson who helped to make target a cool place to visit. Apple, he wasat the driving force behind the apple store and genius bar. Lets talk about enjoy. What is it, how does it work . Ron it is really simple. When i was at apple, we built a new channel for apple with the Apple Retail Store and it is a great way for apple customers to buy and created a Gold Standard for creating apple products. Amazonnow shopping on for about 25 years, but all it does is get to the door. What enjoy does is deliver a Retail Experience in your home. If you order a new iphone from at t, in the shopping cart, you used to pick shipping and now you pick ready to go, which is another word for enjoy. One of our trained experts will not only bring the product you want to buy, but they will bring a full Retail Experience into your kitchen, your family room. Taylor how does your Business Model work . Does the consumer pay for it . Ron it is completely free. Taylor how do you make money . Ron Retail Stores are extensive. With apple, you have to build out the story, you pay rent, hire employees. That cost a lot of money. We now focus on the experice encial part of of the shopping experience. It would be lower cost to deliver. For a lot of companies in the physical world, Premium Products invest a lot in their last mile which is the store. In the online world, we all have the same last mile. It ends up at the doorstep. The only question is how fast it gets there. Taylor you just closed new funding round. What are you doing with the money . Ron we are expanding. We announced last week, on a tober 29, we will be in toronto with a Great Partnership with rogers. The leading carrier for the canadian market. We now serve over 60 of the households in the u. K. Three partnership with through a partnership with british telecom. We are expanding to new countries, new products and it has been a lot of fun. Taylor you brought up apple several times. I would be remiss if i didnt mention the current concerns. How do you respond to that . Ron that has not been my experience. Two weeks ago on a sunday, i walked into my local apple store, knocked on the door, did i know the employees. I was able to get a new iphone, activated on the spot. Great accessories. Last friday in new york city, i got up early and went to the new fifth avenue apple store. The nicest door i have ever been to. Apple is doing really great. Retail is hard though. When you have busy stores, you are not going to be perfect. I dont apple is doing their best to deliver a great experience. Taylor you talk about retail, you are also with jcpenney, for example. What do you make of the general landscape as you take a look at the retailers . Companies like jcpenney are struggling and others like walmart are getting it. How do you differentiate . Ron customers are really savvy. They want newness and th