And, libra drilling. Facebook Ceo Mark Zuckerberg is anticipated to face lawmaker questions on the controversial cryptocurrency on wednesday. We cover what to expect. First, our top story. In latel as much as 10 trading after reporting thirdquarter earnings. Revenue and user growth beat analyst estimates. It has been boosted by an increase in downloads to the revamped android version. Questions remain about longterm monetization. Someone fromng in bloomberg intelligence. I have a chart here that i am showing in my terminal. Seems like those daily active users knocked it out of the park. Were prettys strong. Q4 guidance fell short. The stock is up 154 year to date. Evaluation, to sustain that valuation level, it fell short. The user number is the hardest one to really beat. Everything else is in their control. Monetization, cut costs if they want, but the user growth is the harder metric. The fact that they are projecting better than expected user growth in 4q as well, it is showing that they are getting results and fundamentals should follow. A mismatch in what the expectations were going into the quarter. The reaction,f expectations had really gotten ahead of themselves Going Forward . Jitendra yes. The biggest question for snap is one of longevity. Expectation for the next three years, revenue is expected to more than double. Especially given ongoing competition from come from facebook come from tictoc, obviously the user numbers are telling us they are fighting back pretty well. Thenstill faith in longterm expectations, User Engagement remains and continues to grow. Instagram came out with a competing product called threads. Tictoc is increasing competition. How much is competition a real headwind . Jitendra in some international markets, it will be a real headwind. They have been fighting with facebook, instagram, and have been pretty resilient. Daily snapchat users opening the app 30 times per day. It shows you that the core audience engagement is still there. Content, focus more on adding more features, kind of to keep this engagement steadily increasing. The monetization level is still below twitter, much below facebook, and things like that. As far as keeping a steady pace in user numbers and User Engagement, they can fall back on the monetization side. Taylor longterm revenue looks good, the margins, you said they are pretty effective at costcutting, not profitable yet. There is a possibility on an adjusted basis. Margins, negative gross they are showing progress towards some of these things. The overarching number to watch for, even longerterm, remains the user number. All the fundamentals follow that trend sooner or later. To keep that up through original ,ontent, these types of things then the longterm confidence in their longerterm growth story was Jitendra Waral of bloomberg intelligence. Thank you. Ceo adam neumann leaving ceo adam neumann leaving the board but he is not going away emptyhanded. He is expected to sell stock to softbank. He can also assign two board seats and will get a 185 million consulting fee. We are joined by leanna baker. Is this the beginning of what looks like the new wework . Werea for weeks now, we wondering how wework would keep the lights on and it looks like softbank is coming to the rescue. Adam neumann, the charismatic ceo and founder, is also stepping aside from the board. Board seat, up his he will have an observer role, but that handson role, he will be giving up. Taylor can you talk to me about how realistic some of these numbers are when it comes to adam neumann . 1. 2 coming away with billion, a 185 million consulting fee, a credit line extension. Is that fair and normal . Raises somefinitely questions of governance, but remember that adam neumann owned a controlling stake in the company. To get him out gracefully, they did have to pay up. This was the company he founded and he did have that steak. It is unclear how the negotiations went down. Wework has not confirmed on the record any of these numbers. We are still waiting to hear what the company has to say. For sure, neumann has put in his work and he is getting a pretty package to get him out of the picture. On Bloomberg Taylor on bloomberg opinion, a pretty scathing column, talking about where is the board of directors and their accountability on management, because they chose the softbank deal over the jp morgan deal. The board of directors . Liana they were sure to sign a law firm and bank over which package makes sense. Jp morgan tried to put together a compelling rescue package of their own. Some outside investors had been reported like starwood. The board did decide that this was the better route. Some might say that softbank is the more stable outcome for the company. Softbank had already invested 10 billion and they are coming to the rescue again with another almost 10 billion. The board did higher all these advisors to make sure there would not be any lawsuits. There have been so many crises already at this company. Pushing this company for pushing this forward, what can a new ceo and chairman do that adam neumann could not do . Liana there is another executive coming in, the ceo of sprint who executed a turnaround there. He will come in as chairman, replacing neumann, and he may lead a search for a new ceo. The coceos running the company right now, they were there during neumanns era. The company could still have some major changes Going Forward. Softbank, if they ever want to exit this investment, they may have to figure out how they would do that. Taylor my thank you to liana baker. Now for some developing news out of the u. K. A official has said the latest brexit delay means there will be in election as a result. The same official says this is the only way the country can move on. Now Prime MinisterBoris Johnsons plan was derailed as members of parliament dramatically blocked his plan. Earlier, European Council president donald tusk responded by saying he would recommend the eu except of the u. K. s request for an extension. Coming up, Texas Instruments tumbles. Not looking kindly at the chipmakers forecast and the numbers are knocking down others. Later, zuckerberg is headed to capitol hill to protect his cryptocurrency dreams. Something secretary mnuchin has said he has had multiple meetings about with representatives from facebook. I have met multiple times with the representatives from facebook. We have told them we thought their launch was premature, that they have not addressed fundamental issues around money laundering, bsa requirements and others. Taylor shares of Texas Instruments are tumbling in after hours trading on tuesday. At one point, they were down more than 9 . Posted the chipper maker a weaker than expected forecast for the quarter. It is another sign that rebound in demand for semiconductors will take longer than investors hoped. To tell us more, i bring in bloomberg technologys ian king. You have been covering this chip sector for us. So, coming into this, we will look at top and bottom line declines through the end of the year. Does that look like it is playing out . Ian we were expecting things to continue to decline but at a better rate, the declines would be smaller. What we actually got from Texas Instruments was the reverse. Instead of being 3 , 4 revenue decline in the fourth quarter, predicting as bad as 14 . Taylor we thought a lot of their sales, 56 , came from stable markets. Industrials, auto sectors. Did any of that stability help them . Ian absolutely not. Communications equipment was arguably their worst market, down 20 . Arguably their worst market, down 20 . Automotives was one they cited as being considerably worse, pretty much across the board. Taylor they do also lead some of the sectors into medications in communications. That is the one area they dont have a lead. What can we expect from the company in the sector moving forward . An their chips are important component of cell phone systems. If you are looking for a readthrough on whether the big telcos are spending on their network, this would not be a good sign. Taylor i want to pull in some conversations we had about the trade tensions. We did hear from the cfo of the company. I want to take a look at what was said. Events, due to macro and specifically, trade tensions. You think about when there are tensions in trade and obstacles to trade, what do businesses do . They become more conscious and pullback. We are at the very end of a long supply chain. When the ones of the front pullback, it becomes a traffic jam. Taylor clearly, putting a lot of the blame on trade. Is that valid . Ian two ways to look at it. Up until now, they have not done that. They have been reluctant to assign blame. Now, they are saying the evidence, you cannot ignore it. On the call, they were getting a lot of questions along the lines of, look, the markets are not that bad. How can you prove to us this is not you losing market share . Market share takes a lot longer to shift. Of course, it is the economy. It is the trade tensions. Taylor given the stoxx index, all of these chipmakers have been a bellwether for sentiment on trade. I want to take a look at the chart here. Its the forward pe ratio. The stoxx surprisingly is looking overvalued at 17, 18 times forward pe. How much more do we need to see to push the sector forward . Ian very good question. You have one of the worst years for more than a decade for what is going on in terms of the fundamentals. Yet, money has come flowing it on the expectation that we have seen the worst of it and things would get better. The actual analysts have not been believing that. Many of them have been scratching their heads and saying this does not make a lot of sense. I think we are at a point now where we are going to see that money come tumbling out. Or we are going to see other Companies Come in and say no, this is a Texas Instruments specific thing. We are fine. It will be interesting. Taylor latest thoughts on all the chipmakers. Thank you to ian king. Now, embattled e. V. Startup is aiming to raise 850 million by the First Quarter of next year. The ceo told bloomberg the company will use the proceeds as a bridge to an initial public offering, but did not set a timeline for a listing. The chinese founder filed for pet bankruptcy last week and put his stake in faraday under the trust of creditors. Faraday is protected by debt but needs to go public to secure his longterm future. Also exploring a joint venture in china to Scale Production and shielded from tariffs. Coming up, big banks versus banks versus fintech. Who do you got . That is the question we will ask the head of u. S. Largecap Bank Research as well as fargo security. Our conversation with mike mayo, that is next. This is bloomberg. Surged tuesday after executive said the company would turn a profit by the end of 2020 1, 1 year earlier than analysts expected. Lyft has been cutting back on subsidies for riders and drivers that have been racking of costs. Now, the Digital Banking revolution is hitting one Financial Institution pretty hard. U. S. Bank will cut several thousand workers at its branches. Bloomberg has learned it is part of a digital push by the bank. Here to tell me more about that digital push and how banks are keeping up in the digital age is mike mayo, wells fargo security heads up u. S. Largecap Bank Research and senior bank analyst. Mike, is now the time to finally believe that banks are embracing and integrating this digital revolution . Mike absolutely. We think that u. S. Banks are on the cusp of the biggest impact of technology on their business in history. That should be a winwinwin for the customers that are serviced, for the employees. More time to do what they want to do. And for shareholders. The most efficient banks in history at least a few years out. Taylor you are wearing a hoodie. If you are a bank analyst, you wear a suit and tie. Are you now i tech analyst . Mike i dont think i can be a bank analyst without being a parttime tech analyst. I dont think you can be a banker without having your tech analyst hat on. To have banking, you need to have technology. By the way, the biggest purchaser of Technology Services of all industries, the Banking Industry spent 150 billion over the past year just on technology. You know what . If it does not work for banks, it is not going to work for tech but we think this is the start of not only a beautiful friendship, but the most serious marriage that has ever taken place between banking and technology. Calls, on these analyst i think of bank of america highlighting the increased use of payments. Mobile banking. What area within technology is really transforming banks . Is it peertopeer banking . Mike bank of america, you could say who was going to win . Banks or fintech . Fintech is going to win. That is bankamerica mobile banking. In seven years, bankamerica took from nothing to mobile banking where they processed a level of deposits equal to the seventh largest bank. Equal to 1500 bank branches. That is a phenomenal story. In addition, bankamerica over the past few years has increased in a variety of ways. Mobile banking, ach payments by 50 or more. At the same time, they have reduced their Technology Expenses for their infrastructure by 2 billion. You are growing the franchise without growing expenses. And it is due to technology. It is a fantastic marriage between tech and banks, such as bankamerica. Taylor if bank of america is the winner, who is the loser . Mike a lot of banks are stuck in an old mindset, a last century mindset. You have the largest banks, scale providers jp morgan, bankamerica, citigroup, goliath are winning. You have the Smaller Banks which have specialized services, facetoface relationships. Friendly with the town council. I think other than that barbell approach, those banks in the middle have a lot of soulsearching to do because they dont have the scale to compete with the biggest banks. They dont have the one on one service of the Smaller Banks. Taylor we started off talking about a company, u. S. Bank, that is cutting back on some of its branches as it is transitioning to the digital age. Is that the strategy or should banks be increasing their presence, but hook me in via digital . Mike banks dont have a choice. The world is going in the direction of technology and banks are going along for the ride. They might not be leading. I think the Banking Industry, they have been a laggard. That is out of safety and security for the customers and dealing with regulators. We forecast a loss of jobs in wall street and the Banking Industry of 200,000 over the next decade. That is due to automation. Any job that can be automated should be automated. Having said that, jobs such as advising or technology or anything dealing with customers, those jobs should be expanding while you streamline the backoffice. Taylor you know we love running marathons, so anytime i can read a Research Note of years that combines the analogy of a marathon along with financial analysis, you are always welcome back. Saying that, why did you say we are only on the second or third mile on what is a marathon . Mike in new york city, we are about to have the new york city marathon. That is a very big event, as you can see. When you look at artificial intelligence, big data, banks are hardly scratching the surface. An archaeological dig to unlock the data they have on customers. Bankamerica, they took a number fromrtgage applications 200 down to 10. That makes your life easier but that is just the beginning of using big data to make customers lives more efficient and effective. The whole payments revolution, that is changing. The reduced use of cash. Generally, faster processing of computers should allow banks to operate much more efficiently. You have a combination of software driven changes such as a. I. And automation. You have hardware driven changes due to faster processing and more efficient data centers. Then, you have the whole payments revolution. You added up and you get the most efficient Banking Industry in history five years from now. Taylor 20 seconds, do banks acquire fintech or build out their own platform . Mike fintech, friend or foe, both. Banks will be buying more fintech players so they can leverage strategy, but they will compete a lot more inhouse. Taylor wonderful. Mike mayo of wells fargo, thank you for joining me. Coming up, he is the man, ben ben horowitz calls the best ceo we has ever worked with. We will talk to the chief executive of an a. I. Startup. That is next. This is bloomberg. Devices are like doorways that could allow hackers into your home. And like all doors, theyre safer when locked. Thats why you need xfinity xfi. With the xfi gateway, devices connected to your homes wifi are protected. Which helps keep people outside from accessing your passwords, credit cards and cameras. And people inside from accidentally visiting sites that arent secure. And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. This is bloomberg technology. Im taylor riggs. Brick isd startup data raking in the investment. Just eight months after securing 250 million in funding, it is adding another cool 400 million from backers such as microsoft and andreessen horowitzs. Along with that, a new valuation of more than 6 billion and that is more than double its price tag in february. To tell me more about this investment as well as how databricks uses ai to help companies organize their data, it is the ceo. Thank you for joining me. Walk me through your business model. Guest the Way Companies solve the Worlds Toughest problems using data. We take massive amounts of data and do Machine Learning on it. We do that in the cloud. Customers rent our service in the cloud from us and they pay us by the hour. Taylor congratulations on the funding. What are you using this for . Guest we will invest over 100 million on the european center. We ha