Activist investors to push out jack dorsey from twitter. An interview with the impossible foods cfo on plans to enter china despite the spread of the coronavirus. The Global Smartphone market has been slowing down for some time. The coronavirus will only make it worse. Smartphone shipments will drop 2. 3 to around 1. 3 billion units. Paul allen and emily chang spoke with the ibc president on wednesday. We have a number of analysts looking at this. We would say the tightest ingredient in this is the people. People are not fully back to work. With think the manufacturers in china are mainly 30, 30 5 35 of capacity. They are slowly starting to ramp back up. China also has been a place where many components are manufactured. From that standpoint, what we have now is we believe the tightest components will be pc base and screens. That would fit with the story we have today, that if you are having trouble with replacement parts, what is one of the biggest parts . You drop your phone and you break your screen and you need a new panel. The idea that displays and screens are already starting to show up in short supply fits that story. Thats what we are going to see. Everything is generally tightening as we get deeper into this. Emily we have heard tech conferences are being canceled. You canceled a conference that was supposed to happen today. Down in santa clara. Emily there is all this loss of productivity. Employees working from home. Employees may be not working at all. How do you begin to assess the impact on the technology on the industry . Crawford we are living in this time where we have seen gdp and tech. The rate of tech growth has been over 2x that of gdp. In 2009, we were shipping dog food banks. That was 1. 6 x. Tech was growing at twice the rate of gdp. The first thing we look at is the gdp growth rate going forward. We have put together a number of scenarios. We have an optimistic scenario, a probable scenario and a pessimistic scenario. We think in the optimistic scenario, gdp goes to two and a half percent. In the probable scenario, it goes to about 2 . In the pessimistic scenario, it goes to 1. 4 . And then, of course, we would look at all of the different components that are tied to gdp as well as overall demand and what verticals will be impacted. We believe from a probable standpoint and from a probable standpoint, we are talking about if china starts to come back online in the springtime, but faces headwinds into the middle of the year going into the second half of the year. The probable scenario says the virus spreads around the world, which is what has happened. We are out of the optimistic scenario. We think it comes down to how much it spreads into other regions of the world. It is taking us somewhere between the probable scenario and the pessimistic scenario. That takes i. T. Demand from where we thought it would be to somewhere between 3 and 1 growth. We could, in a negative scenario, get 0 growth. We do not think that will be the case. We think it will be between those, lets call it two and a half, maybe 3 growth. Paul i am wondering, to what degree are Cloud Services insulated . Crawford great question. When you look at the Overall Services market, those tend to feel the impact a lot later. As a service business, we think to answer your question, not nearly as much as the people making the tangible goods. It is a lot easier to say, i will put off my mobile phone buying. The actual people who are at the top of the stack in service or cloud applications, in this marvelous time where technology is eating the world, if companies are going to be in business, they are using a Cloud Service provider. That means they are likely not to back away from those Cloud Service providers. Kurt that was ibc president crawford del pratt. Despite trumps claims that his administration is ready for the coronavirus, the cd says that cdc says they will not be able to meet his goals of one million test kits by the end of the week. We spoke to a professor of epidemiology at the Johns Hopkins school of Public Health. Things are ramping up. Im pleased that diagnostic capacity has increased and will continue to expand in the coming days. More cases might feel alarming but it is us just getting a better understanding of the situation. Paul are enough kits available . Yes. They are coming online and about half are already online this week. Well be up to about 1000 a day if things run smoothly. Emily tests have not been available. We are looking at cases going back two, three weeks in the united states. Whats your best guess . How Many Americans actually are infected by this virus that we dont know about . Dr. Rivers it is impossible to say and that is what it is so that is why it is so important we have testing capacity. That is why i think we will see more cases in the coming days and weeks, because there has been transmission likely happening that we have not observed. We are going to go out and find those cases and get a better handle. Theres no way to really estimate what the current status is. Emily what is your longterm outlook for just how serious this is and how many lives it could claim . Dr. Rivers i think the current risk to the average individual is low. For communities that are seeing transmission, i think the state and local Public Health departments for those jurisdictions are communicating about what risks will be. I do think there is reason right now for the general public to take steps to reduce their own personal risk, regardless of what they are seeing in the community. The best ways to do that are hand hygiene and respiratory etiquette which is covering your cough and staying home if you are sick. Paul i ask this question to a number of guests, because you see a number of people Walking Around with facemasks. Are they actually effective . Dr. Rivers they are effective if sick people wear them to contain their coughs and sneezes and so on. They are not particularly effective for well people to stay well. We are concerned about supply chain and making sure healthcare workers have access to those masks, because they are at high risk, being in contact with people who may be sick. We want to make sure they have access to the supplies they need to be healthy. Kurt that was dr. Rivers of john Hopkins School of Public Health. Why some activists want changes at the top of twitter, including pushing out jack dorsey. And if you like bloomberg news, check us out on the radio, on the app, and in the u. S. On sirius xm. This is bloomberg. Kurt shares of twitter surged after reports that Elliott Management is pushing for changes after taking a stake in the company. This includes moves to replace jack dorsey. Its hard to talk about somebody elses position. Twitter is a position we have looked at for quite some time. We have a lot of respect for elliott. Having a ceo who is the ceo of two Different Companies is highly unusual. Is jack dorsey unusual enough to be that special . He might be. He might not be, i dont know the answer to that. I think it might be a discussion among jack and the board, as well as elliott in the sheriffs to determine whether there is a better construct to manage that company. I have predictions, but i dont think it is appropriate to share those. Is it a Better Company with or without jack dorsey . Im not sure i can answer that, and it depends on in what capacity. I do believe jack is a visionary, a unique leader. But i dont actually know how involved he is and how he is doing at the company. One you have been active on his ebay. Last month, you wrote a letter berating them for not having done their Strategic Review fast enough. What do you need to see happen to be satisfied. Ebay is one of those terrific businesses that should be able to handle the situation well. They did sell off stubhub, one of the things we were asking them to do, we would like them go further. On the operational side, we need them to perform better. Theres more that needs to be done and it needs to be done faster, with more focus, and we care. There is a ceo search process and we care. We expect them to hire a bestofread see. Bestofbreed ceo. The talent of the ceo is important and we believe ebay can attract one. It is something you are working on currently . We have conversations with them frequently and its around this time of year when it makes sense to talk about board representation. That is not always the answer. It may be, in this case, but not always. In every company we look at, its not about the board to start with. A company has a board, but the board is overseeing management. At the end of the day, the important thing is the ceo and strategy. When you hear us talk about how companies can improve themselves and create value for the benefit of all, the ceo is incredibly important. We will talk about that or the plan when it relates to what can be done differently. With ebay, we can have a conversation about the board, but the most important decision is a superstar ceo. Kurt that was jeffrey smith. For more reaction on the surprise push for change, lets hear from the partner and chair of an activist shareholder who spoke with ed hammond. Is very important to understand that founderled companies are just different. And jack dorsey is one of the most iconic pioneers. He has founded one of the most influential Media Companies of all time and has started to do really good. When he joined, he started to right the ship. Numbers were good relating to Audience Growth and retention. You look at the board you have the former president of the world bank, of google. Senior bankers, the ceo of salesforce. It is a great list of executives and so it is strange elliott would choose this time and this company to go after. And not huge tenure on the board either. Do you think they have bitten more than they can chew . I think so. Elliott does not have much experience in running proxy fights the last proxy fight they ran was several years ago and i think they have misjudged the situation. Kurt that was a partner and chairman of a Shareholder Activism process. Up next, we hear from this german automakers ceo. At later, and its lucid interview with the ceo of impossible foods an exclusive interview with the ceo of impossible foods on disrupting Global Supply chain. Kurt once the go to brand for luxury buyers, bmw is facing pressure from tesla. The answer to the electric threat is a sleek, batterypowered car. The cfo spoke with matt miller in germany on the launch of the new electric concept vehicle. A real bmw does not compare to any other brand. That is where it comes to the heart of our brand. That is the first real dynamic car from bmw. It has an acceleration of only four seconds to 100 kilometers an hour and it looks like a real bmw. The range has been the hardest to nail, but it has also got 500 horsepower. How do you achieve that . We started in 2013. That is when we started to ponder the future. We thought our architecture has to be able to be flexible enough to cater for mobility and combustion engines. That is the result of our thinking. You dont think electric cars are the future . You know, the World Mobility market is highly fragmented. There will be situations where you can have only electric cars, but for bmw, we need all of the dynamics. Its much more than just the engine of the car. But there will be other segments with only Pure Electric architecture. I am a motorcycle rider. Will you have an electric motorcycle on the market . There are no decisions on that yet, but we have time. But motorcycles are a different Market Segment then cars. Full mobility has arrived in the car market. Everybody is working on it and we have sold thousands of vehicles last year and we will accelerate that expansion. Initial investment is obviously huge and you have done a lot of investment in production. Will the costs after that start to sink . You need fewer parts in an electric motor. Im not sure the complexity is diminished. There are sony components, and to have flexible components gives us a huge advantage over the competition. What about the headcount . A lot of your competitors have already started reducing headcount and you have yet to do that. Do you need to . Bmw is a growing brand so we need our workforce. We have started to invest more heavily into electro mobility, so there is no need for us to reduce our headcount. I have to ask about the coronavirus. There was a case here in munich. Is it likely you will have to shut down any facilities . I can confirm that, as of today, we had one case in our center. What we immediately did was put the temporary worker into the hospital. The hundreds of people who met him have been asked to stay at home and be placed under quarantine. But currently, the measures are not necessary. With our measures, we have the right strategy. What is the biggest impact beyond the people . As far as the business of selling cars, when we hear things like fiat chrysler, when we hear about empty showrooms around lunar new year, is it a demand or supply problem . You refer to china. We had the new years celebrations, and afterwards, customers did not return to the normal routine. It does not impact our markets in china. Now, the world is normalizing and we dont see any serious effects on our supply chains, but that is something we have to watch. It is quickly evolving, obviously. Youre cfo said bmw still expects sales growth in china. Can you confirm that is your target . We expect growth in china and over the whole world. Whether that is true over the coming weeks, i would not be able to confirm. But it is far too early to make prognosis for the full year. Its only the beginning of march. Its also the beginning of your tenure here as ceo. Congratulations on that. What strategy do you want to do differently . We have a set strategy. What we have pondered about will not change rapidly. We want to be faster than the competition, expand more quickly. I think we have created a very specific strategy which fits perfectly and we are rolling that out now. We are quite confident about this. You didnt make a plan to build minis in oxford. What do you expect for the future of the brand . For three years, we have been pondering what the effects would be but there has been nonwhatsoever on the production, supply chain, or brand in the united kingdom. We will also see what happens until the end of the year. I would be a little more optimistic than the public. At the end, everybody will make sensible decisions and industries and markets can develop further. Many i could envision being built somewhere else. I cant imagine building a rollsroyce coach anywhere other than england. Absolutely. Rollsroyce is an english brand with english origins. That will stay. Is arguably a peerless product. We are by far the market leader. We own 50 of market share and that is evolving rather independently of the rest of the world. I think we have set the ground for further growth. That was the bmw ceo. Coming up, why hp rejected a takeover offer. We are livestreaming on twitter. Check us out and follow our global breaking news network on twitter. This is bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Kurt welcome back to the best of Bloomberg Technology. Im kurt wagner in for emily chang. On thursday, hp rejected an unsolicited takeover approach from xerox. Saying it quote meaningfully undervalues hp and disproportionately benefits xerox shareholders. They said they have many routes to value we are not dependent on a combination with xerox. We spoke to hps ceo on thursday. We have rejected the offer for two reasons. First, it undervalues the company, second, it creates a risky balance sheet, and third, it is unrealistic. Because of those reasons, have rejected the offer because we do not think creates value. One of your complaints about xeroxs you have said they are a company in terminal decline. How can you be confident of that . We can see the devaluation of the company and we can steer clear. The best way to estimate that is the total contract value. It is easy to predict where the business will go and this will be Key Information to understand the performance going forward. One would assume that information is to put an offer on the table and get due diligence. When i do that . We need to make sure the value exchanges right, whatever the combination from the capital structure needs to make sense. And third, he needs to be realistic. This is the conversation we need to have before any discussion can happen. In terms of the pure logic of a combination, the printing business is a part of hp. To think it would make sense to combine an extended platform . We see logic and consolidation in the market area there is an opportunity there. We have been the first Market Driving consolidation. We took a market that was losing company and it will help us to grow into spaces where we are not operating. We have seen consolidation make sense and we are open to exploring that opportunity. You came into this role in november. Immediately, you find yourself in a hostile situation. On the others, what have you learned from it . This has been the key thing we are driving in the company. We need to continue driving the business forward. We need to make progress with our partners. The results really show the ability to not only stay focused but continue to make progress in our businesses. We are so focused on the potential deal, that we lose sight of the fact you are running a significant company. Lets switch on to whats going on there. How is the coronavirus affecting hp . It is a big company and we have many parts unrelated to the recent actions. We said the virus is impacting our business. Even on the manufacturing side, after chinese new year, manufacturing ramp in china was slower. We expect to recover in q3 and q4. Kurt that was hps ceo. Turning to gender equality in the workplace. Women have been told to change themselves and be more assertive to succeed at their jobs. But the director of inclusion at netflix thinks thats not going to close the gender gap.