Pickard. In san francisco, cory johnson. He has been digging deep into the filing. Also, gordon chang. Before we get started, i want to take a closer look at alibabas is this by the numbers. Business by the numbers. Leslie pickard is here with the details on my po. You have gone through the whole filing. What is different about this . Is a massive company. They talk about their ecosystem, maintaining their culture. Carehave taken a lot of and time to put this perspective together. They are trying to exemplify what this company is for american investors who do not use ali baba. They have taken a lot of care to lay out what their business is, how they monetize, and how they make money. Much are not sure how theyre going to raise. They have a billiondollar placeholder for now. Correct. The placeholders dont necessarily mean anything. Theyre just used for placeholder purposes. Market value right now, my estimate, it is at 168 billion. We are told by sources it should come out around that range. We will not know the exact price for another three months or so, at least. This process takes a long time. They have provisions with the ncc, they have a lot of planning to do. That stuff takes time. We cannot expect to see a final pricing for months. Do we know where the New York Stock Exchange or nasdaq . The jury is still out on that. They are telling me they want to focus on the perspective and get that out. With twitter, they do not list an exchange with which they were going to host their shares. We can expect to see that news come out potentially within the next month or so. Theyre holding final round interviews with the exchanges and then well make doesnt matter us and mark does it matter . The Business Models are the same at the New York Stock Exchange and the nasdaq. Yahoo ,ill say we have in which alibaba is invested in. They have Close Friends there. On the other side, theres the New York Stock Exchange, which will point to the twitter ipo and say look at the execution risk of that we can avoid. We had a solid performance with twitter. Thank you. Leslie pickard. She covers ipos for us at bloomberg news. Cori, you have been digging into this as well. Tell us the biggest risk factors. Is not just the structure that is strange, shareholders do not have a direct vote towards what the board will be or anything else. In the business, there are strange things buried on page 201. There is one sentence that talks pay business. It is not run by alibaba. It has a separate ownership group. There are little issues like thatthroughout this filing raise questions about how much shareholders are really controlling the business. They might enjoy that and good times, but in bad times, they will not have a lot of ability to make changes. It is such an amalgamation of these u. S. And Global Internet companies. It has pieces of ebay, paypal, pieces of amazon. It is like nothing we have anywhere else. And itpieces of twitter has its own business to business commerce aspect. I have spent a lot of time in the last 12 hours or so reading through this perspective. I cannot imagine how this business works. Thing itressive is profitable. These guys did 57 net margin last year. Just really incredible numbers. The likes of which you have probably never seen of the scale. Thank you, cory johnson. He is our bloomberg west editor at large. I want to bring in gordon chang. You can see where gordon stands on chinese companies. You have a lot of doubts about this ipo. Why . Foreign investors are not allowed to own alibaba. They have a complicated structure through the cayman islands. The Chinese Supreme Court has declared it to be illegal. Pay. Ard about ali ma used the illegality of the structure that he created to i pay away from the Alibaba Group into a company in which he owns 46 . The structure is illegal, but he is using it to his advantage. He set up a variable interest entity structure. Was he went to the Alibaba Group and said im pay. To take away ali he took that out of Alibaba Group and into a company which he owns 46 . Did that was that the variable interest entity structure was illegal. Yahoo on a portion of Alibaba Group. Quick you say he did that because i think he is being very sharp. Yahoo and softbank on a substantial portion of Alibaba Group. That is going to be a problem Going Forward. Are you calling him a control freak . Investors need to look at this carefully. We have seen were the Chinese Government has forced investment a Foreign Investors from sector in which they had no right to be. We are talking about investment risks. We may compensate you, we may not. That is going to be a big issue. I would like to see more of that. That is speculation. Foreign investors, if they are going to buy into alibaba, they will buy into the growth story. It is a growth story in china, is it not . It has 80 of the mobile market, where the growth is. There is another company out there which is a very good story. It will probably not carry the same valuation that alibaba will get. It is the social media player and china and it is easier for them to monetize and going to ecommerce than it is for alibaba. Right now, you have two internet giants invading the others turf. It is an easier path for . 10 than it is for alibaba. They have seen their stocks fall about 25 since march. You have consumption, which is stagnant and china. Retail sales number do not correlate with what were seeing in the chinese economy. Alibaba is a consumption story. Facehave been able to out consumption, question is whether they will be able to do that over the long run. It is unlikely. Mentioned tencent, alibaba is like an amazon and amazon is trying to go into social media it is like amazon going into social media. Nt, which is like twitter and facebook all rolled into one. Theyre trying to monetize that. You are saying it is easier the other way. T doing a lotcen better . They are starting on a lower base in terms of ecommerce. It does not get as much in the way of attention because it is listed in hong kong. When you look at all the other risks, i think it will be a difficult sell over the longterm. Great to see you. The author of the coming collapse of china. Aol surprises wall street with its firstquarter revenue. We will hear from Tim Armstrong in a moment. Boeing looks to the stars. It wants to build the next space shuttle. We will be back. Thisl reported earnings morning showing revenue hit 580 3 million, beating wall street estimates. It announced a purchase of convertero. Tim armstrong joins us now. It is always good to have a quarter when you can speak about an acquisition and growth. One thing i want to focus on is aol properties. The revenue they are is down about two percent. Tos that mean youre going continue to restructure some of the properties . You see is the Company Growing for the fifth consecutive quarter. When you dig into the financials, which you will find is that you have strong growth on the Platform Business and we took a number of restructuring charges and if you take those out, the brand group would have grown. Overall, the theme is growing very important markets. Administrative costs going down. If you take the charges out, the quarter was a strong worker. We are focused on where we are going to be over the next couple of years. We told investors we would regrow the company and we did that. The next set of objectives is how to make the company grow above market rates. We are focused on that execution. Much of that has to do with s you bought gravity, and now convertro. Are they increasing ad rates for aol . Pricing has been stable to increasing overall. It has had a substantial increased every year. To focus on isng we are filling out strategy pyramid. Really refurbishing the aol brand, those of the areas when you boil them down, it is building a great video experience, great programmatic experiences and building wonderful and delightful content experiences for consumers. Convertro fits where . Between the first two. It is an important theme for the future of the internet, the Advertising Industry and doing hundreds of billions of dollars over the next 10 years. Saw, youad you said see a billboard in units to a retail store, that billboard gets all the attribution value for the ad campaign. Let you go back into keyconsumers and the soundbite out of where the interbyte is going as exposure to conversion versus the last click to conversion. That may sound small, but it is as big as the Auto Industry going from horses to cars. This is about building the future of advertising. You cannot attract advertisers without good content. You have been going full force into original content. You unveiled 16 new shows. We spoke with nancy dubuque. She pointed out one concern about all the content coming online. It is not just skyrocketing cross costs that are being paid for content, but also for Production Companies and dont own axis. There is an appetite for content in general in the market. We see that with a lot of the deals that are being cut. Are you worried about content the skyrocketing cost of content . We were the earliest investors in content on this phase of the internet. We know what the cost structures are. You have the creation, the cure ration, the distribution and the monetization of content. They have separate economies attached to it. Higher see happening is Quality Content getting done at better efficiency over time. The mechanization of content is happening as well. What youre looking at is a much larger global scale distribution. Before we go, what do you think of the alibaba ipo . Really exciting. The internet has been a big impact. It, thehink about global economies, what i was growing up and you were growing up, they were a mystery to people. The fact that they are coming to the u. S. To do their ipo is about the full access of globalization. It is exciting, the prospect of countries coming together and the internet bringing them together. It is a game change moment for all of us. Great to see you. Coming up, from english teacher to billionaire. We have that story. We will look at the controversy involving the psalm of brunei. The sultan of brunei. You are watching in the loop. Live on Bloomberg Television. Good morning. I am betty liu. 286 Million Dollars that is how much a group of paintings sold for at a christies auction. The impressionist of modern art sale netted 80 more than last year. Canvas thats 20 million. Another sold for 22. 6 million. It is 26 minutes past the hour. We are on the markets. We are watching the alibaba ipo, months in the making. Equity futures are pointing to a higher open. We are in the midst of earnings season. Aol better than expected. As senti futures up about 3 10 of one percent. S p futures up about 3 10 of one percent. Canadas largest gas producer is buying shares. They will pay 3. 1 billion dollars to buy oil rich land in texas. Girls of oil barrels of oil. Bank thegest company which makes most of its profits in asia had muted consumer activity in april. Patrick said that running the company has become more difficult as ge and possible siemens pursue bids. They want to wrap up sales quickly. Nine Entertainment Industry related events. Two hotels are owned by the brunei sovereign wealth fund. It is over islamic criminal law. It is a story we brought you yesterday. Of aotel is part collection and bloomberg spoke with the ceo yesterday, who had this to say. The reason for being here is to support our employees through this situation. The right to make comments, but i ask them to direct their comments, if it is of a religious or political nature, which this is, the channels for communicating that are directly through the state department and the president of the united states. Not to boycott the Beverly Hills hotel, where they are going to affect the livelihoods of the 650 people that work for us. Case for keeping those events at the Beverly Hills hotel. Joining us more is peter firesign four more is peter firesign. Peter, great to see. What did they do . He has done everything that he could do. Gunshave thrown all of the of Public Relations at this. They have done a good job. Unfortunately, this is not spendable spinable. They will have to affect some other solution for the people that are making life difficult for them. Why has this erected now . But why has this erupted now . The sultan decided to do this at this point. I am sure he had a reason. He transitioned his country into full islamic law. Thinking about the Beverly Hills hotel when he is doing this. One has to ask the other question what was his interest in the Beverly Hills hotel in the first place . Interested in implementing sharia law and a man that was interested in owning a piece of the Beverly Hills hotel. Little deeper, it is hollywood that was built by jews. It is a fascinating dynamic. Hotels goodese moneymakers . Just looks at the superficial dynamics of the situation and asks questions. He was aware of every dynamic. There are many investments he could make. I dont know the answer. Anyone that thinks this is not a big deal has not looked on social media. Looked at the tweets about the situation. For instance, richard branson, founder of the virgin group, that nothe other day virgin employee will stay at the Dorchester Hotels until the sultan abides by basic human rights. Ellen degeneres talked about this. Was on the street yesterday with protesters, protesting this hotel. And the sultan. Point, is anybody else in danger here . Is this going to spread to anyone else . Or is this sort of contained . It depends on how this works out. I dont think that the people going after the sultan at the Beverly Hills hotel are going to branch out globally, but at the same time, the world is watching, and all kinds of people with specific interests are looking to see what is possible here. Do you think that the hotel is in danger of closing because of this . I think he has a few choices. One, he could sell the hotel. The sultan . The sultan. He could sell the hotel. One what hopefully he could find a buyer for the clippers at the same time. Or, he could dig in his heels and say that he is not going to be forced to sell this and they will keep it as a property for some other purpose. Or as we were talking about a moment ago, one wonders how deep the conviction about sharia law goes with the sultan, since it took him 70 years to do this. It will be interesting to see what happens. Can you imagine if he did put in a bid for the l. A. Clippers . In any case, peter, what about this to me, i feel like if you go to any property, to any investment, if you dig deep enough among the investors, arent you going to find something that offends you . That is a conflict of interest . This is a unique situation. An individual who implemented sharia law, like the sultan of brunei, is also the individual who owns the hotel. This is not the same thing as boycotting apartheid, south africa, where it where millions of people were hurt over the decades. Boil this down to a single person. It is that even like going after the russian oligarchs. This is a person who implemented the law. But i was talking about a sort of gray line, gray area here. Take alibaba, the topic of the moment. You could be an investor who is for human rights and say look , i wont buy into alibaba because i believe the chinese human rightsouts laws. I am saying that there is a kind of gray area here. There is no part of this that ofnot gray, but that kind conversation is interesting. If it has to do with alibaba, with patronage of a legendary hotel, this becomes part of the social conversation. Peter, ray to see you. Thank you so much. We will be back in two minutes on in the loop here. For the man who founded alibaba, is not quite a rags to riches story, but it is close. 15 per month, not bad those days for an english teacher in china, now worth about 13 billion. Who, exactly, is jack ross . Take a look. Taking the stage in front of thousands of employees, jack ma is not your average corporate chairman. He flunked his College Entrance exams twice. That might be the last time he set out to do something and failed. He is 49 years old and is trained as an english teacher. He learned the language by listening to voice of america and working as a tour guide. Since then, he started chinas first intro one of chinas first internet companies. Give himded people to 60,000, the beginning of what is now known as ali baba. Known for commerce, he has broadened the companys interests. Alibaba is involved in cloud computing, banking, and even has an online music service. His personal fortune is valued at 13 billion. An empire seems to be his motivation. He told charlie rose that if alibaba cannot surpass microsoft or walmart, he will regret it for the rest of his life. For more on the man in charge, i am joined by matt miller, editor at large for our numbered billionaires team. He looks pretty in tune. Such an empire builder. You cannot discount how big a deal object model how big a ma isack mock jack to ecommerce. There are more people shopping online in china than the countries on earth. 700 mutual 700 Million People shop online in china alone. His ambition she has some quirks and we can talk about company, heis really is one of the richest people in the world and to probably be in the top 10 soon. Weiss what are his quirks . With started the company 60,000 from 80 people, not that quirky. He went to school with jet li tom of the martial arts scholar. 70 of male in china is somehow related to ali baba. 70 of all packages. 70 . Fascinating. The quirkiest thing we found on the terminal . He conducts mass weddings for some of his employees every may. Really . He officiates . He officiates mass weddings for his employees. That is so weird. To be married by her boss. Thats right. We have to talk about the other side, perhaps he