We dig into the details. Digital currency regulation. Adam pozen of the Peterson Institute weighs and on whether Central Banks should be issuing their own guidelines on cryptocurrency. Netflixur top story reported thirdquarter earnings on wednesday, the shares stopping in after hours trading after International Growth eased investor worries. The streaming giant also talk to earnings per share projections. New subscribers did fall short of estimates. Revenue went to 5. 2 billion. Bloombergsbring in lucas shaw in los angeles. Shares rising 10 in the postmarket. Is it really the new subscribers overseas that are allaying our concerns . Lucas i think the story is investors were worried netflix was going to have another bad quarter. They disappointed in the second. They added a few million customers, fewer than analysts expected. One analyst i spoke to this week said sentiment was awful. Instead, they come in around expectations. They missed in the u. S. , but were above internationally, and that is where netflix has been telling people their future is. It is a sign that while they are going to have one of their worst years of her in the u. S. , they are going to have their best year ever internationally, because they have shows registering in europe, latin america, asia. In a sign of confidence, netflix is going to start breaking out its subscribers by region, which suggests they now feel confident enough in the numbers to talk about it which they have not previously. Taylor lucas, talk to me about the domestic numbers. They are reversing a decline. Is it enough . Sophie i dont know lucas i dont know. I dont know how concerned people are. Netflix has cleared the 60 million threshold, which is what Ceo Reed Hastings said. He projected 60 million to 90 million in the u. S. That was a while ago. They cleared 60 million, but only at about 2. 7 million this year. They historically have added 5 million year. They say it is because of a price hike, and maybe next year they are up to 3 million or 4 million, but they are facing competition from disney, apple, at t, comcast. I think we are setting into a new reality for netflix in the u. S. , where after years of growing at 5 million year, they settled to three or 4 million. If they can keep that going, they will be ok because they would get to 70 million in the u. S. , which is a pretty good number. They are generating money from each of these customers, so there revenue per customer is up and margins are up because the price increases have worked without costing them too much. Taylor thank you to lucas shaw in los angeles, covering all things netflix. With more, i want to turn over to analyst eric from new york. What was your biggest take away from todays report . Ultimately subscriber growth is slowing in the u. S. They missed slightly on their previous guidance after a negative q2. What this means going into q4 and 2020 is they are not growing as much as they have in the past , partially because half of all households subscribe to netflix at the moment. This is concerning for them, moving into the new reality of competition with disney, at t, apple. Previously Companies Like disney and at t provided a lot of content for netflix and they were partners. Now they are turning into competitors and this is a difficult problem for netflix to solve moving forward. Taylor you bring up the competition. Lets go there. All we heard from the company was next quarter would bring some modest headwinds to the company, given the competition. Themuch can they withstand fact that in the Fourth Quarter they are getting Companies Like apple tv plus, disney coming out . How strong is not competition . Eric there is a lot of excitement around disney in particular. The thing to realize is a lot of these other services, disney, apple, as well as other competitors like amazon that are still very strong, they dont have to turn a profit on streaming video itself. Apple is using their service to sell more iphones, amazon is using it to sell more of everything, and disney is using it to draw people into their entertainment ecosystem. This means netflix has to be more careful on price moving forward. When apple is giving out there apple tv plus service for free with a new device purchase, what this means is netflix is going to have to be more careful moving forward in raising prices, especially if they want to keep their current subscribers. Taylor although the price hikes are trying to help offset the negative cash flow, this is the story we know about the economy. If you look at a chart in the terminal, it is the classic negative cash flow that we see from the company. The Current Quarter has yet to be pulled into that, but it is a negative number. Thats all we need to know. What are you hearing from the company about potentially flatlining to eventually a positive Free Cash Flow scenario . Eric they raised prices to improve profitability as well as cash flow. But subscriber is the base of their business. When we Start Talking about profitability and cash flow, it all starts at the subscriber. If they lose subscribers and their largest market, the u. S. , that is going to be difficult moving forward. I dont think they will lose, but it is going to be difficult to grow moving forward. Lor Companies Like kinsey disney, there is a lot of hype. What company has the best Balance Sheet to take on a company like netflix, spending 50 Million Dollars a year . Who is in the best position to take on the original, which is netflix . Eric apple and disney are positioned very well. They have lots of money to spend and are both very serious about this. Disney views disney class as the future of the company. Everything works off this new direct to consumer streaming service. Apple as well, iphones are very profitable. If they can create a service that helps them sell more iphones, thats going to be huge for them moving forward. If they view this as a serious area of growth, they will have a lot of money to spend and will continue to spend that money. Netflix is still spending a lot of money to keep up and are not increasing their content spent, so that is a good sign for the future. Taylor thank you for the dig down into netflix earnings. That was eric haggstrom. Ibm also reported earnings on wednesday. They reported revenue that missed the lowest analyst estimates falling nearly 4 in the fifth period of declines. Total revenue was 18 billion. In july, ibm completed the purchase of open Source Software company red hat for 34 billion. Analysts had looked for signs of signs that that megadeal would drive growth. Shares were lower in afterhours trading. The u. S. Ban on huaweis not making a dent in the companys sales. Chinas largest tech Company Reported a 24 Revenue Growth in the first nine months of 2019. Huawei alsos also reported Global Smartphone shipments for 26 in the first three quarters. The company also expects u. S. Export restrictions to reduce annual revenue at its Consumer Devices business by 10 billion. And coming up, tossing out a lifeline. Softbank is said to plan a 5 billion rescue package for wework. We have the details next. Taylor softbank is said to plan a 5 billion rescue for wework, funds coming directly from softbank rather than its vision fund. What do we know so far about this . Ellen this is one of two plans may be in the works that are subject of a lot of discussion going on this week with the wework bored. They are scrambling to figure out how we can keep this company going, when they reported in the past wework was set to run out of money as soon as next month. We have new details on a potential proposal from softbank to invest around 5 billion in the company. That would give them a much larger stake, though not a majority stake. Taylor do we know if this is in lieu of the jp morgan deal, or instead of . Ellen it seems like these are both on the table. They are pretty different. One of the major decisions the board is going to have to deal with this weekend and next is which one is better for the company . Which one is going to provide a better fastforward . The jpm deal is around the same amount of money, 5 billion, but in a complicated debt package. Taylor with the softbank deal, do they get control of the company . Ellen they do not, as we understand, get majority control. Adam neumann, even though he is no longer ceo, is still a board member, still owns a lot of stock. In a transaction like this, the ownership could change, but he still has super voting shares. Softbank could be looking to get nonvoting shares or a combination of different shares. They will be taking on his stake , control not necessarily guaranteed. Taylor what would be the new evaluation . Ellen definitely lower than this 47 billion high water line that came up earlier this year. It seems the ranges are all over the place. It could be as low as under 20, maybe under 10. Taylor we talked a few days ago about the reputation of softbank by putting up this money, what that says about the whole deal that fell through. What is the downside for softbank in this . Ellen if it goes poorly, it could be seen as good money chasing bad. They have already invested more than 10 billion in this company. They are obviously attached to the outcome of what comes out of wework, although this plan makes weworkt is almost like becomes a softbank company, something where they would have a great say installing potentially a new ceo to replace the coceos who came from we work. It could be something where we feel very responsible. The narrative suggests softbank becomes responsible for whether wework ever makes it out. Taylor i have a feeling we will be having you back to have the latest. I want to switch over to bank earnings, bank of america. Shares have been growing after betterthanexpected earningspershare. The company showed its discipline in managing expenses. Here to tell me more about bank of america and the Digital Banking status is chanel he vasek in new york. What do we know about the initiatives from bank of america . Something that wall street realizes about these big banks but i am wondering if Silicon Valley has caught onto is that the banks are under pressure to rake in more money at a time when Interest Rates are low and getting lower. Bank of america is highly exposed to that, so they have to figure out how to bring in more money when their Net Interest Income is under pressure and their expenses are flat. You see a race to figure out how to spend more money, especially on digital initiatives, almost 3 billion quarterly, at a time when their main driver of revenue is under pressure. Taylor it peertopeer payments the way bank of america tried to push forward . Sonali when you look at bank of america numbers, dell is the most compelling chart, transactions almost doubled from a year ago. However, the users are about the number of users it has do you quantify by the number of users, the number of transactions . People are using it more. It is a weird thing because you have bank of america and j. P. Morgan investing in digital branches at the same time they are investing in technology. It is trying to get consumers in two ways. Taylor you mentioned jp morgan. Jamie dimon talked about this, saying tech is always trying to eat your lunch. It is called american capitalism. We have to stay on our toes to compete. From these earnings from Companies Like b of a at jp morgan, have they done enough to take on the competition . Sonali you see them wanting to pour in the billions of dollars it takes to compete here. When jamie dimon says fintech, we do see record numbers going into the community, but is he talking about these smaller upstarts or the apples and amazons of the world that pose a threat to the banking community, in terms of whether they get into Financial Products or steal talent from the banking industry. Facebook has said they are willing to hire hundreds of engineers in new york. Coaching from the Financial Community is not rare for them to do. Taylor within the discipline express management, we take a look at the right hand side of the income statement. Any sense of what percent of total is going into investments in technology . Sonali let me give you an example in one noninterest expense for bank of america, about 15 billion. You take 3 billion, a little more than a order of the 12 billion they almost spend every year, you have about a fifth of noninterest expense. Jp morgan, bank of america leading the pack because they have big consumer arms that could use more Digital Banking services, which tends to be a leader in all Big Technology that big banks use. Taylor tech and banking, sonali vasek, thanks for joining. With the big names like uber and lift going public, we speak to a ceo who knows a thing or two about ipos. This is bloomberg. Taylor pinterest shares fluctuated on wednesday after a large block of shares one set to change hands overnight. Analysts are saying the deal probably doesnt reflect negative sentiment around the stock ahead of earnings this month. Sources say Goldman Sachs is managing the 4. 68 million share block trade on behalf of an unknown holder. This came the same day that selling restrictions lifted for insiders, and other preipo shareholders. While pinterest is a newly public company, there are still a bunch of private trying to ones make the leap. One such company that may have its eyes on a public debut is snowflake. It sells a cloudbased Data Warehouse service that helps organizations such as netflix store and analyze information. And it is valued at under 4 billion. Joining me from new york is the ceo of snowflake, frank sloopman. Glad to have you here. Let me start with some of the hot ipos that havent gone so well. Eloton whereke peo you think there is a Good Business and they dont do so well. How much of these are micro concerns versus a larger macro concern about the economy . I am personally very fond of peloton. I think they have a good product. The thing we have to focus on is do they have a Good Business . Whether the market is hot or cold from one day to the next is not as important as whether the company has real momentum and can sustain itself over the long haul. I dont have an opinion , butfically on peloton those are the parameters i would watch for for any company that is newly public. You want to blast through your first four quarters and have a good showing. Taylor how does the ipo market feel to you right now . Is it healthy because companies are getting shaken up if they are to profitable, or is it too volatile . I think it is healthy. There should be a high bar. It felt do you frank for a time. I would rather it felt too euphoric for a time. I would rather have investors be critical so when Companies Come to market, the public can be comfortable they are companies that are viable and have been properly vetted. There is nothing worse than companies coming to market, falling apart after an ipo. That is not good for anybody. Taylor how has the environment affected snowflakes plans to go public . It has not affected it at all. We are preparing the company to go public and we will find our window. Milestone, but life continues on right after, so we dont get too excited about it. Taylor would you prefer direct list or an ipo . , direct listing, really is an obvious choice when you do not need to raise money. ,f you do need to raise money then the choice between an ipo and a direct listing is not as obvious. There is a lot of evidence these days for direct listing and doing a private placement ahead of a direct listing. I dont find it that obvious. One of the great things about the ipo process is that it is a real price discovery process, whereas in the private placement, it is hard to know whether you are pricing the company had a market value. We have seen glaring examples where people have either under or overpriced private placements. The experience we have with ipos over decades doing thousands of them is that we are pretty good at discovering that price and having the companies go public in an orderly manner. Taylor i want to talk about the fundamentals of your business. You compete with amazon really well. What are you doing right . We are very focused on what we do. We are good partners with amazon, we like working with them. We compete with them as well. We are absolute specialists in what we do. Amazon has many other products. It is not always easy to compete with somebody who is very determined on succeeding in this business, and thats what we are. Taylor talk to me about the new customers you are getting. Are these new customers or are you cannibalizing them from another company . Business, it is in you are always taking somebody elses money. Often times we replace legacy systems, people that want to go to the cloud, that want to have the utility model, the elasticity, the performance at scale, all those good things. They always come from somewhere. There are also projects where there was nothing before. We do new things, but by and large, something gets misplaced by the entry of snowflake. Taylor you previously ran service now. What did that experience of taking them public teach you about current environment . Service now was a terrific experience for us. I took a company in 2007 public as well, so we have the combined experience of those two companies. What is really important is that when a company goes public, you have the philosophy and the momentum to really have a very good showing. First severale quarters post ipo and operationally, it means that you have to be very capable of forecasting your business. Not just at the top line but the bottom line. Cash flow, all those things. That will provide a lot of confidence in the markets. If you cant do that, if you dont have the velocity, the fidelity in forecasting, it gets to be hard being a public company. Thats what throws off the diving of people wanting to go out, going public, being public, things are not going to get easier. Taylor all things on the market, ipo, direct listing, great conversation. Frank slootman, thanks