In the delivery payoff latest Earnings Report . Thirdquarterssed revenue estimates. Why Revenue Growth did not translate into ad sales. Facebook dominated the week with Ceo Mark Zuckerberg defending his social network before u. S. Congress on wednesday. Scheduled included a huge antitrust and privacy. What is this association. Its a complex project. Do you consider libra to be money . I consider it a Payment System. Its like me having my money in Wells Fargo Bank . You could think about it that way. We are not applying for a bank charter. That is the problem. Facing mywe are commitment is we are not going to launch the libra Payment System until we get the approval from federal regulators. Cooks the competition with china is a National Security issue. In china especially. They kicked off their Publicprivate Partnership in systemo raise to build a like this quickly. Will it be possible to conduct anonymous transactions . It is an open question. Its pretty hard to stop anonymous trading. Have i missed something there . I think this is more of a policy issue in question. As your code currently exist, can you transact anonymously with libra . Congressman, it certainly would be possible to build a system that would allow that. I will ask you a simple question, are you a capitalist or socialist . Congressman, i consider myself the capitalist. Frankly, im not sure we have learned anything new here. Emily bloombergs kurt wagner was at wednesdays hearing and had this to say. People still do not trust facebook that was the overarching theme from a lot of the questions weve heard and feedback from members of congress, basically pointing out things that facebook has done wrong in the past and asking given your track record, why should we trust you with a new cryptocurrency . At the end, it was representative mchenry, after almost six hours of questions a testimony, said im not sure we learned anything new here. It was a little bit of an unfair blanket statement but at the same time, despite the fact that we had all this time to hear from Mark Zuckerberg, we did not walk away with a bunch of Big Questions answered. Taylor when pressed on why we should trust facebook, what was his response . Facebook is just one of 21 Different Companies that are overseeing the cryptocurrency. Facebook is putting out there that we are not the only people making a decision here. We want to work with regulators. We want you to tell us how this is going to work. It is not going to be only our call. That is obviously a very important element of all this because for the people who think facebook has too much power or it cannot be trusted, the idea that they are bringing others into the fold or that they are following rules that someone else creates, that will give them a lot more flexibility to get this thing off the ground. Taylor we heard him also bring in china and say if we dont do this, china will so we have to do is to get ahead. We have a sound bite from what zuckerberg was saying about china. Take a listen. As soon as we put out this white paper on libra, we saw in china especially, they immediately kicked off this Publicprivate Partnership with some their Biggest Companies in order to race to try to build a system like this. A digital renminbi that they could use as part of their belt and road initiative, their foreign and Economic Policy to grow influence throughout asia and africa and other areas. Taylor is zuckerberg right in bringing in china here or is he just playing to all of our fears about china taking over . I think there is probably some validity to this concern. This idea that there are companies and the government in china that really wants to accomplish a similar problem. They have the technical ability to do Something Like this areas this. I do think this is a very convenient argument to make, especially right now and especially in front of this congress, given the issues we are dealing with with china. It seems like now is the time to play up this fear that china is the real threat here. We heard him say this last week. When he gave a speech at georgetown about free expression, he talked about the internet rules they have in china and if Tech Companies like facebook dont support free speech, you might look up and see that is gone from the internet because Chinese Companies are controlling it. So he has played on this fear before. Taylor that was bloomberg technologies kurt wagner. For more on this in general, i got insight from an analyst and sara miller, Deputy Director of of the open markets institute. Nothing was answered other than the commitment that libra will get regulatory clearances before launching. But from whom, how, and whether the product exists after that i think is still very much to be determined. It was a promise but not one with any specifics, any timing, or in my opinion, any clarity. Taylor sarah, are the problems here not about libra but the fact it is libra and facebook and that facebooks name is attached to the project . I think that certainly does not help. From the hearing today, there are two takeaways in my view. One is that libra is toast. Number two is that Mark Zuckerberg got roasted. Like, you know, he did not do himself any favors here. The idea that regulators in the u. S. Or around the world are going to allow Mark Zuckerberg to potentially undermine the entire u. S. Financial system is highly unlikely at this point. I dont think he did himself any favors at all, and a just open it just opened him up to being a punching bag from both the right and left on a whole host of issues that went far beyond libra. Taylor karen, you chuckled a little bit when sarah said that libra was toast. Do you agree that libra feels a little bit dead on arrival . I said before that i think this is the worst Product Launch ever, and that is counting the new coke. The reason for that as they did not understand a very fundamental fact. The payments system, currency, financial transactions, its about other peoples money. Social media raises a lot of privacy and other issues, but youre putting economic quality the quality equality on the line when you start dealing with other peoples money, and i dont think to this day Mark Zuckerberg or facebook at that. This is different. Congress told him that today from both sides of the aisle. Im not really sure they get it now. Taylor that was part of my conversation with karen, managing partner and cofounder of federal Financial Analytics and sara miller, Deputy Director of the open markets institute. Coming up, and earnings bonanza. We begin with the path to profitability. Tesla roars with surprise profits in the Third Quarter. We hear from an analyst. Plus, wall street expected growth from amazon this earnings season. Did they deliver . And if you like bloomberg news, check us out on the radio, the bloomberg cap, and in the u. S. On sirius xm. This is bloomberg. . Taylor tesla shares spiked after the Company Reported a surprise Third Quarter profit. Ceo elon musk took to twitter, less then one hour later, saying he was super proud of teslas team. For great execution and the support of tesla customers is greatly appreciated. With more on the earningspershare picture, margins, and what the company says about china, i spoke to dan hives, an analyst from wedbush securities. If you look at the margins of profitability, that is the feather in the cap, and i think that is the surprise. This is something where, if they can maintain this, this could be a potential game changer for them Going Forward. Taylor the problem is you cant cut your way to growth. If you are seeing a topline decline for the First Time Since 2012, is it sustainable to cut your way to growth . In our opinion, that is going to be the challenge for them, to navigate profitability while they are trying to get to growth, given what is happening in china. That is going to be the key in the conference call, majors major shortcomings, but that is really the key Going Forward. Taylor part of the profit picture and revenue picture has been the competition we have talked about between the s, x, and y, and the model three, which is the lower margin. How do you feel about the composition . With model three, given where margins are it is going to be difficult to get there from a margin perspective. Y is going to be key going into 2020. That will be a big focus on the conference call, as well as china and the gigathree buildout. Taylor amazon reported thirdquarter earnings thursday. One of the big indicators of growth was expected to be the free oneday delivery. For more, i turned to our guests. There was a lot of angst around cost. We knew it would bring costs to it, albeit for a couple of quarters, and the variability played out. They are also spending a lot on content and aws. So there is a spending cycle going on which makes the next couple of quarters the anxiety quarters from a cost perspective. But you are clearly seeing a sales impact. It will pay off longerterm in terms of market share and Revenue Growth but as far as cost of variability is concerned, we think that will continue for a few quarters. Emily are you concerned about the rate of spending . Or is this one quarter and we should brush it off . I dont think it is one quarter but it does not concern me. What you saw was amazon prove to the market they could drive profitability. They pulled unprofitable products, they emphasized aws. When you have seen is increased spending on the things that will drive customers to you is amazon all over the place. Oneday shipping getting products back on the shelf. What you see is their strategy is world domination. Anywhere you can buy a product, they want to offer it to you and figure out how to monetize it. Emily and is market share dominance the right strategy . I mean, they have proven it works. If they want it to work, it will work. It is a rate of 36 billion. They are market share leaders in infrastructure services. That adjustment needs to be happening in terms of expectations for that revenue size. If you actually look at the advertising division, you saw growth acceleration this quarter. What we feel happening is advertising will slowly take center stage as aws takes a central role. Taylor we have a chart showing Revenue Growth for aws. How concerned are we that this is slowing . It is slowing multiple quarters in a row. There is concern, but i think there is a big market out there for them to go after. I believe microsoft is doing a good job and google is investing heavily in web services but amazon has a big leg up. Taylor i was speaking with a jefferies analyst who brought of microsoft yesterday. He said microsoft and their as her azure products will benefit from the shift to the cloud more than handson. Are we seeing Amazon Web Services lose some of the market share . Im not sure about that in terms of amazon losing. Microsoft winning, yes. That is the hybrid strategy they have been successfully executing and it should continue to benefit them. The market here keeps growing at a healthy pace. There is enough room for three players. Google has also stepped its gave up quite a bit in the last couple of quarters, really. At the same time, i think amazon can hold growth in the 30 plus range but advertising, disclosure of advertising is going to become more and more critical. This business can be significantly bigger than what is right now. They have the opportunity and better targeting in many ways because they are almost just before the decision. They have a very good roi potential. And as this business gets bigger, they might pull the disclosure card. Rubber have eight of the u. S. Was disclosed in 2015, and suddenly, the profitability perspective was changed . Now, weight will shift more and more on advertising as aws plays a defensive role. Taylor if that were true, why are we looking at low forecasted Topline Revenue if they have that advertising powered muscle . They are probably looking at Consumer Spending and making sure they are conservative for what is a big holiday season. But i agree that when it comes to the areas of market share they are growing in the investments they are making, then their ability to juice more revenue, i think they have a lot more opportunity. Emily that was jumpshot ceo deren baker. Snap said there were 210 million daily active users of its photo messaging app snapchat in the Third Quarter. Shares of snap have more than doubled in value so far this year. A Research Analyst joined us right after the call. There was maybe a little bit of disappointment from shorter term investors with regards to being a bit of deceleration relative to q3. I feel like the company addressed it pretty well. This still viewed as a largely u. S. Centric story was very strong and they are adding more users in the rest of the world. Theres a little bit of a lag, but it feels like they are getting the right pieces in place in regards to monetization. Taylor are you happy with the updated guidance you are getting from management . I think they are fabulous results. There has been a wall of worry with regards to user growth. The user numbers were fabulous for the quarter. Outlook was very strong as well. And, i think when you talk to the company at this point, ownership has probably been a bit more hedge fund centric in nature. They have been spending a lot time with the community. The feedback i have heard is it is great. We love to own stocks when they jump 20 . We dont like owning them when it goes down 20 . I think they are doing an effective job tightening up the range of expectations. I look back objectively and im like, 50 Revenue Growth, that is fabulous. Those are terrific numbers. Taylor im showing a chart to our audience of the growth really in this daily active users. Now hitting 210 million. What else do you need to see from this company to take on bigger Companies Like the likes of twitter or instagram . Michael what i have been seeing in terms of the proprietary research that we do, i would like to see a continued adoption of advertisers. Where if you look at twitter, pinterest, snapchat, they are more niche by way of comparison versus lets say google and facebook. Seeing that continue to move in the right direction, continuing to see new ad Product Innovation is key. One of the things where i feel like i have gotten a lot of questions from investors is they want to understand what is the opportunity in terms of advertising . It is a slightly harder format to monetize in verses discover lenses snap select. I think the message you heard pretty loud and clear on the call was this is a function of growing demand. There is more than ample supply and i think there is a lot of headroom for the story. Taylor that was Michael Levine a pivotal research. Coming up, things get fiveyear for wework. News of worker layoffs and a softbank rescue plan. Details next. And the New York Stock Exchange president joins me to talk ipos and the rising inquiries around direct listings. This is bloomberg. . Taylor it is the end of one of the more dramatic business debacles in recent memory. Softbank has come to the rescue of wework with a 9. 5 billion package. The japanese conglomerate will get 80 of the start up. Adam neumann will walk away with 1. 4 million. The company is now at less than 8 billion. Ellen huet provided the latest on where things stand. Ellen there are three parts. A 5 million debt package, about 1 billion of which is available for adam neumann to use if he would like to sell back his shares. And 1. 5 billion of an accelerated warrant in which softbank will be taking even more ownership of the company, buying more shares. Taylor the key here is softbank is coming in at a lower and lower average price for their transaction, so if there is a payoff, they could win big, but what do the other investors feel, who still bought in at these high prices and are not participating in this lower round of shares . Ellen this is going to be an ongoing conversation for wework and the details, figuring out the nittygritty of this deal. Softbank is doubling down on its ownership and buying at a lower and lower price, in particular this 1. 5 billion of the package is coming in even much lower than the tender offer. So they are snapping up shares. They clearly believe that, in the future, this could end up being valuable in they could come out with a win. At the same time, a lot of employees and other shareholders are looking at these prices thinking how they will ever get what they expected this equity might be worth . And in particular for employees who joined when they sold out options, many of them are underwater. This is something that even came up today at an all hands meeting with marcelo claure, the executive chairman of wework. Employees are really concerned how this will play out for them. Taylor describe some of the reaction you got from employees when they heard about some of these bailout packages and some of these golden parachutes, if you will. Ellen yeah, one employee even called a platinum parachute for adam neumann. They feel like him walking away as a billionaire to them, it hurts. It feels painful the company did not even have enough cash to pay out severance packages for the thousands of employees they plan to lay off. And meanwhile, adam neumann walks away with, on top of his tender payoff, a 185 million consulting fee. Marcelo explained to employees that fee was something they had to pay adam to get him to agree to