Investors question the path to of things. Profitability. Sidelines, a step toward and, many state and local elections are taking place the Company Generating some cash tuesday. In our electioneering series, we. Low examine free speech versus falsehoods when it comes to political ads. Competition at this it is pitting facebook against twitter. On tuesday tanked point . Rohit i would take the other after failing to prove itself to wall street. Side. While the ridehailing app is there is nothing like the peloton bike on the market with projecting profitability by 2021, it did just not seem to be butintegrated ecosystem, enough. Shares hitting a record intraday loss. An more, i want to bring in when you look at consumers, mkm partners executive director. Thinking, can i work out today, where am i willing to spend walk me through the share price action tuesday. What is your take . 100, 150 per month and what can i do . Thank you for having me. There are a lot of connected was,nk that what uber did products. And of its three ipo lockups, if you take a broader view of options that consumers have, it they should have recorded a is getting more and more saturated. They had higher take rates which fitness, you have not led to a beat in revenue. Seen a very longterm yet. It was a mixed quarter. Maybe peloton is the one that forwilling to stick around will show that up but we have tomorrow, an given not seen that yet. Taylor Rohit Kulkarni of m km partners, he is the executive estimated 800 billion shares director. Thank you. Coming up, we hear from the ceo will be for sale. Because iar with me of goldman sachs, David Solomon, know you are on the phone, but i about what he is doing differently following stinging want to show a chart you are losses from wework and uber. Bloomberg terminal audience that is showing the market cap of the Company Versus the value of the and, match shares plummeting free float. Released aompany right now, it looks like there is only about 5. 5 million of disappointing forecast, citing free float outstanding. How much seems to be a technical conditions like brexit for part of its sales problem. The ceo saying the company is issue around the lockup ending versus the fundamentals that you embroiled in two or three big were also highlighting . Lawsuit. Rohit it is both. Last month, match was sued by i would add a third factor. The federal trade commission for ulation there are issues allegedly deceiving consumers. Shares down 15 in afterhours regulatory overhang. Trading. This is bloomberg. There are issues in london and new york. Three issues the company is facing. Technical, somewhat fundamentals, and what is happening with the regulatory environment. They will be more shares coming investors bailing out on the stock today. Taylor do you think there is so much pressure on these recent companies that are ipoing to be profitable, that no matter what they say, nothing is good enough right now . A factorthink there is of how much you are going to thesee in the story, also names. They have been great stories. Story, we want to see execution. A clear pathway. Steps, uber is taking but baby steps right now. Some numbers trending in the right direction. Taylor rohit will stay with me because i also want to pivot to another company out with earnings today, peloton. They are projecting Strong Revenue growth as they reported a narrower loss than expected for the quarter. We met up with ceo john foley and asked about the report. John it will be profitable over the next couple of years in the u. K. And canada. Our trend is this is subscale so it has lower margins. As it gets to scale, the Unit Economics goes up. We dont need to launch more. Roducts or more platforms we choose to invest in those things over time but it not needed for profitability. Lor free trident Taylor Goldman sachs stung by caroline free trials being offered, how important is it losses in both uber and wework that when the scaling these markets such as the u. K. And but ceo David Solomon has a germany . John right now, we dont feel message for investors in growth we have a true competitor, a stocks, that profit does matter. He spoke on the current state of likeminded competitor. The ipo market including what it has always been the question could be the Worlds Largest of, should you lower the price aramco. , saudi arabias on the peloton bike . It has been incredibly academic david we are involved in the to think about lowering the price. When you are doubling the company in size every year, aramco ipo. Not, on an ongoing transaction including last quarter, 103 like that. We have been involved in the ipo topline growth, it is somewhat academic to think about lowering the price when you are cellaring market. Generally speaking, we are fortunate to be in a position to that that you are selling them as fast as when you are help our clients. Selling them as fast as you can it seems difficult to value and ipos in general. Make them at the price point. They can buy them for 58 per month and you can divide by two people were talking about wework because your living partner also as a 60 billion, 65 billion rides. Than 50sehold, less company. Day, at the end of the per adult for unlimited boutique fitness classes with the best when the rubber hit the road, bike, software, instructors in what are investors willing to pay for a company when they have the transparency of the real the world. It is a pretty good value Financial Information that has proposition at the current price been vetted and presented in an point. Ceoor that was peloton appropriate way . When you have that, the market john foley. Will speak. Using wework as an example, give me your thoughts on the share price reaction. There is a lot of hype around you have a stock today off that. When they were able to provide almost 8 , decent fundamentals from the company. Feedback and work with an what do you make of it . Rohit i agree. Underwriting, there was a pretty clear view. The numbers companies, thef unicorns, that have had ipo problems or have not performed are postipo, like uber, tell a very good story. The company is growing revenue year on year, five quarters in a you concerned that we are seeing row, having stable Gross Margins raflections of the dotcom e with rising Gross Margins on the subscription side. Things are trending in the right when nobody focused on making money . David these are real companies. Direction. The company is peddling in the we can debate the evaluation right direction. Investors want there certainly real debate the valuations, but these are to see profitability. Certainly real companies. Bubble, therecom i think the story here, what peloton is telling the investors, look, we will invest were companies in a different state getting to markets. The Monetary Policy that has every fifth year. Next year, we are going to show been rampant around the world has basically forced people out a real progression. On the risk curve, forced people to look for other ways to drive i think it is just about returns. One of the things they are chasing is growth. I think there has been a sentiment that if you can hook your wagon to a company focused on growth, that something good will come to that. Lots of incented companies to take the capital they are raising from investors and spend it aggressively without understanding how that can translate to profitability. It is important for people to , but there has to be a clear and articulated path. Aam a believer that over time company can only be worth the future discounted value of its earnings. It is important to have a Business Model that can generate profitability. Taylor for more, lets bring it bloombergs should nelly bostic in new york. Have you ever heard them talk so much about that growth, about the market starting to discern between the path to profitability . Sonali as we get into the next leg of the central banking irrational type behavior that is driving these skyhigh valuations has to come to a reckoning. Everyone is not amazon. It only took one major flop for people to turn around quickly. We have had the head of Investment Banking and citigroup tell us that for Bloomberg Television as well. People are already starting to tighten the reins earlier this summer. The talk is getting a lot louder for banks like goldman sachs, j. P. Morgan, that stuck with a lot of these companies through very tough times. Taylor talk to be more about , sayingmons comments that you dont really have a price discovery, you just have an investor telling you what it is worth. Sonali jamie dimon is saying something similar to David Solomon, that a market of investors sets a valuation. Jamie dimon also said something that softbank is also addressing, ic in corporate governance. That is something we have been waiting for forever here. Softbank, right now, according to the financial times, is thinking about tighten the reins in terms of corporate governance. That is something you heard jamie dimon also address. Thatr another story caught our attention here as we look at the tech landscape has been robin hood markets. There was a story coming out that said basically, put down a little bit of a deposit on margin and you get infinite leverage. There is a glitch in the system. Sonali basically, you have a certain set of robin hood users who are selling calls and that money is being counted in that users capital. This is such a timely story. Meetings of people were about the future of fintech. Once we are borrowing from a firm, youre becoming a bank and a personal hedge fund. You are to deal with issues as you scale and grow. Robin hood is not only trying to grow but has considered a. Anking charter the users that have been doing this say they have levered a 4 Million Investment a four dollars investment into a Million Dollars investment. Taylor going back to derivative coveredo learn about calls. Bloombergsore from tesla model three survey. We dive into how many users feel safer with the autopilot feature. Bloomberg technology is livestreaming on twitter. Be sure to follow our global breaking news network at tictoc on twitter. This is bloomberg. Taylor it is the biggest survey of tesla drivers ever conducted and lubricants polled nearly 5000 and bloomberg has pulled 5000 model three owners. It turns out, more than 90 say the feature of autopilot made them feel safer. So, autopilot, hopeful or hurtful . The answer tos that question. Such a simple question but such a complicated answer, as is the case with all things autopilot. This is a system that tesla has generated so much buzz with, that elon musk has invested so much money in, so much reputation in. There are sort of data points galore in here as you would expect with a survey as big as this was. Whohave a lot of people system witht the saving their lives. Six within the survey also claimed that autopilot contributed to a collision. You have more than 90 of people say that they feel like this system makes them safer. A running joke covering the car , many people thinking they are above average drivers. The findings of this survey oflect the messiness automated driving and they will be times that these systems save us and there will be times that as they are ironing the kinks out, that they put us into dangerous situations. Taylor describe for me distinction between autopilot, i can take a nap in the backseat, versus auto assisted, where i should maybe be paying attention and not just snoozing in the back. Be in ae should not position of just napping in the backseat even with autopilot, the name is so controversial. We have seen these videos people and taken on the highway where they see people who have fallen asleep at the wheel of their tesla and rely on autopilot to continue to drive them. At the point where you can safely do that. That is why it is so important that tesla does emphasize that people should be paying attention at all times. But you do get these mixed elon musk ise showing the system around with his hands on his lap. In the handbook on you should be using the system. This is a company that talks about a full selfdriving package with tesla and yet this is not a system that could be relied on for selfdriving in any situation. This is a system where you need to be paying attention and that is why it is technology that is so controversial. Theor quickly, describe two different packages that tesla offers within autopilot. There been updates and packages you can or cant turn off. Craig they sell a higher level of capability. Some of that capability, they have not delivered yet. One of the sort of features within that suite of technology, for instance, it is a feature that allows you to call your car to you in a parking lot. Just with that, we have seen sort of near misses. You do see people that are very excited about it and like to show it off. But again, back to the word controversial. Taylor bloombergs craig trudell, not controversial, thank you for joining us. Coming up, our conversation with the excc chairman. What he has to say about huawei being caught in the trade war crosshairs. This is bloomberg. Taylor this is bloomberg technology. We now join bloomberg daybreak australia to bring you the latest in global tech news. Im taylor riggs in San Francisco. With shery ahn in new york and haidi stroudwatts in sydney. Lets take a look at the global top tech stories of the day. Haidi . Haidi Masayoshi Son is paying the price from wework to uber. The sopping founder has seen his fall after his strategy of aggressively backing Technology Pioneers backfired. Tumble to roughly 13 1 billion a. That is according to the bloomberg billionaires index. Facebook has expanded its production to vietnam and will manufacture its oculus rift virtualreality headsets in the country, according to the facebook asiapacific Vice President of policy. Facebook is seeking partners to manufacture other products in vietnam. And, huawei expects shipments to grow 20 next year even if it is blocked from the google software. This suggest the trump administrations efforts to contain the companys rise may not be working. The president of Corporate Strategies says the company can rely on its massive home market and inhouse software to keep the division humming. Those are the top global tech stories of the day. Shery more on huawei as the u. S. Trade with china plunged in september following fresh tariffs. Both countries aiming to ease tensions with wilbur ross saying licenses to sell to huawei will be coming very shortly. Earlier today, i sat down with ajit pai who warned chinese tech firms pose a threat to u. S. National security. Take a listen. Mr. Pai we have seen a Great Variety of evidence with respect to particular chinese vendors of behaving in ways that are not consistent with the rule of law with free markets and the like. Earlier this year, the department of justice announced an indictment against huawei in which case the indictment specifically States Huawei officials offered bonuses to individuals who successfully stole confidential information from certain businesses. More generally speaking, this is part of the overall Chinese Government effort we fear to leverage their influence over global commerce. Shery no wonder they have to see has about coming up to prohibit companies of receiving federal subsidies from buying equipment from huawei and zte. Will this banning of firms of selling to huawei or carriers not be allowed to use cheaper tiny equipment of an impact on the u. S. Firms and jobs . Mr. Pai i start with a bedrock principle. When it comes to the security of Americas Committee case and networks, we cannot take a risk and hope for the best. We have to get it right, especially with something as transformative as 5g. When we rollout the proposal, we make very clear we dont want federal funds coming from the ftc to be spent on untrusted vendors wherever they may be located. In this particular case, we have serious concerns with chinas National Intelligence law requires companies to comply with requests and not disclose that to any of their customers. Shery beijing argues the 2017 National Intelligence law you are alluding to is defensive, it does not authorize spying. Why are you not convinced . Mr. Pai partially because the Chinese Government has made clear they want to leverage their influence in any particular area, especially when it comes to telecom networks. That is a risk we cannot take. We have seen evidence the indictment from earlier this year, but that vendor in particular has engaged in certain practices we find problematic. We want to make sure the equipment and Services Going into Americas Committee case and networks are secure. That is the base level every regulator and consumer should have. Shery the small and rural carriers have bought chinese equipment because they are cheaper. If you tell them they have to remove them and replace them, what would be the financial cost and would you help them . Mr. Pai the only problem with cheap is sometimes it can cost too much. We are talking about national security, that is a risk we do not want to take. Later on this month, the fcc will be voting on my plan to evaluate which equipment from chinese vendors are in the network and think about ways to fund the replacement of it. That is a conversation we will be kickstarting in a couple of weeks. Shery wherewith the money come from . Would it come from the University Fund . Mr. Pai there is legislation to fund the replacement and removal. Shery with that happened before they go through the process . Some of these carriers do not have the credit to do it and then get refunded. Mr. Pai that is one of the things we will explore in this conversation to how to make the conversation from the current state of the network to the more trusted framework we would like to operate under. Shery the reason we are focusing so much on security is because of the launch of 5g. Two companies that ha