Proved to be the new Magic Kingdom while the apple kingdom apple card cant shake its controversy. First its all about our top story, we work. Theyre set to face the securities and exchange inquiry into possible rules violation into the runup of its failed ipo. The agencys review was said to be preliminary and may not lead to an enforcement case. The company at one point was worth 47 billion dollars before it fell out of favor and needed a bailout from softbank. More outlets bring in congratulations on the story. What we know so far about the inquiry . An inquirythere is happening. It is early, preliminary, we dont know what might come of it. We do know that we work has taken steps to respond to it. They have hired who used to be the head of the Sec Enforcement Division who now works in private practice coming on to help them respond to this. This is also coming from the Sec Enforcement Division, the part of the sec you dont want to hear from. Although we dont know exactly what is prompting the probe, we noted in our story this is something that is somewhat expected given all the coverage happening around wework, you might expect acc to kick the tires and see what is going on expect the sec to kick the tires and see what is going on. Taylor is it expected given highprofile the company was or more indicative that something more serious is going on . This is more predictive that it is a failed ipo and it was a prolific ipo. That being said we all know that adam runs an aggressive styler when it comes to management. There might have been may be some aggressive accounting going on within the firm. I think that is as far as i would want to take it at this particular junction. About aggressive accounting. One thing that caught my eye was Community Adjusted ebit. You know more than i do, what the heck is Community Adjusted ebit . Barry being a read analyst im used to nongap measures. That is kind of par for the course. It is just a way for wework to get the investors to concentrate with the individual units are throwing off. Then they said lets look at the other cash being spent to bring new ones on board. Is it straight down the middle type of accounting or the way to look at things . No, but to be honest i did find it a little helpful. Not that i was relying on it, but i did find it helpful. Talor are the financials the biggest concern for the sec at this moment . It is interesting to look at the evolution of the s1 document. Community adjusted ebit was one of the more intimate adjustments that showed up when they started selling bonds. It came out with documents associated with the bond sale. If you look at the past early drafts of the s1 on the sec website, Community Adjusted ebit a is there until may or june, and then it is cut from the draft and not in the final perspective made public in august. Seems a hind the scenes behind the scenes they prepared for what they thought was an ipo they were adjusting some of their metrics as well. I dont know what the sec is the most concerned with, but that could raise eyebrows. Catch did anything else your eye . The valuations, the conflict of interest . What other potential violations, for lack of a better word, stood out to you . We have been over the Corporate Governance and the way adam was paying himself 5 million he was trying to get personally for the wework name. We saw that in the document. With the revised this one, that was not there. We see aggressive things kind of going on within the document that is that investors want to see changed. Taylor what would you like to see from the company next . Barry i think with a new Management Team they need to really hone in on showing a profit. I think in order to do that with a need to do is kind of stop the signingte and stop new leases. Maybe not cut it to zero but pulled back on signing new leases and concentrate but pull back on signing new leases and concentrate on projects already in the pipeline and getting those units to stabilization when i was looking of thes11 about 1 3 units were stabilized. That is another 2 3 in a process trying to get to stabilization and full occupancy. If they can concentrate on that they will show profitability. Like anything in life, theres no such thing as a free lunch, but by doing that what youre going to do is slow the future growth rate of this company. Thats why the valuation got a fairlyecause you had big company doubling revenues every 12 to 18 months. There arent a lot of Big Companies doing that. The valuation will have to come off given the fact they arent going to have that growth rate Going Forward. Taylor you just heard the focus on profit if you look at the chart in my terminal. We know that bondholders are not happy the way the company is being run. What do you need to see from the company about their Spending Plans and profitability . Ellen people are going to be watching that. Goingexpenses have been through the roof. The company on wednesday gave thirdquarter earnings, which they shared with bondholders, something theyve done for the last year and a half, and we were able to get some of those numbers and it showed wework lost 1. 25 billion in the third quarter. This is at a time they only had a revenue of 970 million was not that is astronomical losses. People are going to see if the company can turn that around. Our sources say part of the reason for that big loss comes from hiking up their expenses in anticipation of going public. They wanted to show strong topline growth in the First Quarter or two as a public company. They set in motion a lot of things like getting new leases and buying out furniture, but it was hard to stop that halfway through was that we may see bleeding losses into 2020. Foror thank you both joining. Softbank has quietly completed its initial push for its Second Technology fund. The Japanese Company has raised roughly 2 billion for the Second Vision Fund so that it can start backing startups. At this stage is known as the first close, and softbank will continue gathering commitments. A spokesman declined to comment. The probe into googles Business Practices is getting wider. Details on what new areas regulators are focusing on will set thats next. This is bloomberg. Taylor the probe into possible antitrust behavior by google is about to get bigger. Multiple u. S. Attorneys general are looking into the companys ad business, and they will put the lens to Google Search and android software. The search into ads. Joining us in d. C. s ben brody, blogging efforts. What do know about the additional probes going on . We know the attorneys general divided responsibility for these probes at a meeting early this. Eek on monday in denver basically the attorney general wanted to expand some of these. They were staffing questions, so they decided they were going to expand and did deeper into the issues. It is an interesting issue set. Search and android are issues where google has already faced problems in europe. There are cases that have been made, there are known complainers. This is an issue google has been fighting for many years. Its a playbook i know how to do. On the other hand this is a well trod road by enforcers, particularly the android stays there are echoes of the microsoft case. They are going to go down that road now. Taylor which is ou alphabet most worried about when it comes to antitrust . An interesting question. Theyve already faced a lot when it comes to android in europe. The ad tech one, it is a system where google has done a lot of acquisitions over the years. You can really trace googles dominance over ad tech. It is something that even those who invest in Companies Like trade desk are fuzzy about what is going on. When i asked people in the states, explain google dominance in ad tech they take a deep breath and say how much time do you have . It is something that will be complicated for regulars to wrap their head around, and that complexity makes it tough to punch to the heart of the matter. When you look with the states sent to google asking for information, you can tell the person that wrote that was very wellinformed. The states are bringing their big guns to the battle. Google needs to be careful, because in some parts of the ad tech market they have up to 90 market share. Taylor in your opinion, is this multipronged probe, different probes by different attorneys general helpful, or does it appear not targeted . It is the same here in washington when you go after people on a lot of different ily. Es regulator something shakes loose. Its not necessarily what you want. I dont think the attorney general are worried about the optics of the probe. They will want their document demands Going Forward to look as specific as the ones they issued on ads. They have to buckle down and learn how theyre going to do that. We will see how specific it is when it comes out. Taylor what is alphabet and google saying about how they are interfering with search algorithms and not Fact Checking local searches . Alphabet is not saying a lot about some of these criticisms. There was a report in the wall street journal. A lot of those criticisms are longstanding competitors of google had said they feel the algorithm is sometimes unfair, its a black box they cant understand how it works. Google says it needs to be a black box so people cant game it and get ahead of it in ways google and users wouldnt want them to. They have cues without proof that google is suppressing political viewpoints and toning things down. Will has talked about these things when theyve come up, and they said google has talked about these things when theyve come up, and they said our policy is to keep things fair. Regulators really want to look inside the black box, and google doesnt want them to at all. Its going to be a tough fight Going Forward. Taylor thank you both for joining. It was a tumultuous thirdquarter stirred by escalating trade war with china. Hedge funds made alibaba a top by. Spending big on the fund that tracks the s p 500. For the Second Straight Quarter uber was among the most favored stocks, while disney and microsoft shares saw heavy selling. If you want to look at the chart im showing in my terminal it is alibaba continued to advance against competitors like tencent , expanding that market share. What is your take on alibaba and the buying behind it . It is a nice sign. Alibaba was the biggest buy by volume. Very popular with hedge funds by that tiger club, which is very tech savvy. Uber was another big buy, but they are buying off of lows. With alibaba they had a record single day. Its interesting to see a chinese stock that high up given the trade tensions. With that said its a good sign for alibaba, which, as we know, is doing a humongous listing in hong kong as well. Taylor is it notable that huber was a favored stock right before the lockup expired . It was. You had so many people buying. We had it as the favorite stock the Second Quarter when a lot of the tiger cubs, Big Technology funds, they are very heavy on technology, bought in the second endured and declines. Its not that everyone loved it, but in aggregate it was loved and people do love to buy off the lows. Whether they stick with that stock over time and where the bottom is will be an interesting question. Taylor where there are winners there are losers. Microsoft a big seller given how much gain it has made in its cloud azure products. Just as people like to buy the lows they like to sell the highs. What is interesting is its the Second Quarter in a row again. At what point is this a trend, and at what point does it become an unfavorite . That is something people didnt love too much. Disney, something they didnt love too much. There isnt this universal view on technology that is interesting we are seeing in the stocks. We are seeing winners and losers, with alphabet being very in between. Taylor the winners and the losers is what makes markets. Thanks for joining. Coming up Financial Institutions in the u. S. Have been investing heavily in cybersecurity after facing foreign attacks in the last decade. This is bloomberg. Taylor lets look at the top tech calls. The company gave a revenue outlook that was slightly below consensus estimates. Wall street largely brushed they saw. A number of firms raise their price target wringing their average to 220 a share up from just over 200 earlier this week. Analyst at barclay think that huber is one major announcement from sentiment turning positive on the stock. Food delivery and ridehailing can be profitable, and we think that huber is one catalyst away from the market realizing it. That is what the analyst wrote. And analysts from bank of america on the black friday outlook raising the price target on the stock to 160 dollars a share. Average selling prices on smart tv offerings and a solid set up for Fourth Quarter account growth, the analyst wrote bastad that is your top tech calls analyst wrote. Tech calls. Your top Morgan Stanley believe cybersecurity is about people. She discussed her outlook in an exclusive interview with jason kelly at the 9 11 memorial and Museum Second annual summary on security in new york city. Take a listen. I see my mission as an extension of what ive done through my career in national security, which is defending our economic security, given that a big bank is so fundamental to national security. I think youre right. The Banking Sector is ahead of this problem, and we had to be because new york was attacked significantly in the 20132014 timeframe when a group of fighters later identified with the iranian government were doing distributed Denial Service attacks, launching mass data and websites so people couldnt get to them and it caused a panic. It illuminated the vulnerability of our critical financial infrastructure. On the back of that banking got ahead of this and put in the right programs, processes, and technology and started investing in that talent so we could strengthen the sector. Some things that we have none to come together as a sector and importantly share information, i was encouraged to come from the white house to the banking, to the Financial Sector to see how much sharing there is, both within the Financial Sector, big banks are super competitive about talent and business, they are not competitive about sharing information that will keep the sector safe. There is good sharing between the government as well as the private sector, and that will continue to grow and strengthen hopefully in the coming years. You talked about the k through gray. You talk about your own business and the talent gap, how do you fill that . We have been successful so far in recruiting the folks we needed with a fusion center. We have reached ready far afield. We had great talent from an engineering standpoint that we brought in to build the center, but we have gone to academia, the military, the intelligence community, we have built a village, because it takes a village to be successful in cybersecurity. Developers and programmers, but analysts that can help you understand the cyber threat environment. You need responders who can reverse engineer malware. You need crisis managers to deal with a major threat or vulnerability. It is building this fabric of talent brought in from places all around the world. We are in new york, baltimore, glasgow, singapore. We are truly mobile. My biggest challenge has not been recruiting, but retention. In a world where there are so many opportunities for cyber cultivate anave to environment that allows you to retain that talent. From my experience leading troops in peace time in combat, you need an environment of Psychological Safety where people can bring their imagination. They feel they are actively listened to, they can bring great ideas to the table. That is the key to retaining your best and brightest. The was the global head of Cybersecurity Center at Morgan Stanley. We look at this weeks top tech stories, including disneys massive launch of disney plus. Thats next, this is bloomberg. Taylor this is Bloomberg Technology. I am taylor riggs in San Francisco in for emily chang. Lets look at our weekly top tech stories. Disney is feeling the magic of the mouse. 10 million customers in one day of launching its streaming platform. The service just became available tuesday in the u. S. And canada. To discuss this and the other top tech stories, bloomberg businessweeks max chafkin. 10 million in one day, does this exceed your expectations . It was a job dropper. Dropper jaw dropper. This was them coming out. Somthis was a homerun coming out of the gate. It is part of a rerating happening with disney. Taylor rich greenfield told me this week that the loser is not netflix, that the loser is cable. Do you agree . There is something to what he is saying. Take a few steps back. We dont normally see these Old Established companies do something this big this quickly and suddenly seem capable of catching up to the new medium market leader. If this had happened in another industry people would be blown away. For sure, seeing disney, which was key, and is key to the cable business do this throws into question their business model. Taylor bear with me while i run through the list. I have hbo now, cbs all access, apple tv plus, disney plus, showtime, netflix. Is the joke on me . Is unbundling really saving me money . 55 is what the average Consumer Household will pay in streaming. Where it is today, about 30. There is room for one or two streaming players, potentially the third, but also a price point. That is why disney priced th