Always is a dumb idea. Youre watching Market Makers on Bloomberg Television. Thursday in new york city, i am Erik Schatzker. I am stephanie ruhle. How do you feel . I feel great. Im not sure how i feel. These are the top business stories from around the world. Barclays will cut 7000 jobs in its investment bank, about one fourth of the total market. Trying tonkins is reduce his dependence on fixed income, which has been its biggest source of revenue. A big jump in homes being sold for cash according to the tracks 43 according realty tracks, were all cash in the first quarter. Mortgage lending has plummeted because rates have been rising and lending requirements have become stiffer. Macdonalds best month, samestore sales were up 1. 2 . Mcdonalds has been struggling to attract consumers because of growing competition like talk about like taco bell. There is a Consumer Confidence problem. Show deal ora game no deal, top executives from comcast and Time Warner Cable are back on capitol hill defending the proposed 45 billion merger. Lawmakers are concerned about what the tie up would mean for prices. Yang yang is monitoring the hearing. N arekind of receptio they getting . It is still early, about 30 minutes and. Neutral reception. For the most part, the chairman of the house judiciary subcommittee on antitrust said their role is not to approve deal or no deal, the Time Warner Cablecomcast merger. Instead, this is a public forum, will consumers be better off . Take a listen. The structure and economics of the industry continue to rapidly change. The challenge for policymakers and antitrust regulators is to determine how the consumers interest is best served and the evolving environment. That environment changing technological environment is something that Time Warner Cable and comcast will try to strike today. The witness part of the panel underway now. For Time Warner Cable and comcast, we have david cohen of comcast. And robert mark, ceo of Time Warner Cable, representing the merger. They are here to really stress three points. Pro competition, proconsumer, and propublic interest. The three ps. They actually submitted the same exact written testimony as they submitted last time around when they made their case before a Senate Committee last month. No major changes on that front. Is thing they are stressing that there is no overlap of the geographical coverage of Time Warner Cable or comcast. They say this is not an issue of competition. We will hear from those who are opposed from the merger, we have three groups. American cable association, the rural media group, and another group. Each representing a different stakeholder in this today. An internet provider, a small media company, and then a rural network. All stakeholders will be represented but lawmakers are really looking to see what this will mean for consumers. The big question they will have is will americans see their cable bills rise. They are not here to make any sort of approval for the deal at this point in time, the consensus seems to be that the deal will go for it. What it will look like is something still to be determined. The update. For tune into a request special, comcast tune in to a bloomberg west special, comcast everywhere. With senator al franken, opponent of the deal. And Time Warner Cable threatened to shake up the internet and cable landscape, talk of another deal in media. At t in talks to buy directv. Jeff mccracken has more details. That directv known or dish might be in play. Bloomberg reported that. And it sounds like these negotiations are proceeding to the point where it is getting serious. The driver seat here. Theres a good chance you will see at t do a deal. The question is whether it ends up with a dish or directv. This that lot about is appealing. It has a lot of spectrum. I megahertz is the number have been told. That spectrum is worth somewhere between 12 billion and 1 billion. That iswhy a tub why they want to get into the tv business. It is a National World where the phone companies and the Cable Companies and Internet Companies are together. We face the real possibility that in this calendar year we will have a comcasttime warner tol, the comcast sale charter, a sprintsoftware, and whatever, happened with dish and directv. How will al franken and the fcc handle it if all this comes together at once . What does it say about what is going on in this industry . Does directv have i guess so many questions come to mind. At t is interested in dish or directv. Is charlie ergen, founder of dish, interested in at t . Hei is. This is a dance. Two of these three will end up together and the other will be on the outside. There is no possibility dish and directv could merge first . I do not want to rule anything out. Purely speculative. The driver seat and they will pick one or the other. Partially the question out there is from a regulatory standpoint, what will regulators allow. Dish and directv tried to come together before and it was blocked. At t could have done this years were at 40 and now shares are north of 80. They did a decision to go after tmobile, regulators blocked it, now they are talking to directv at a heftier price. Another eel, tmobilesprint. We heard from the ceo of ceo,che telekom, parent of he does not think regulators will let this happen. Someone is negotiating through the media. Through the bloombergs and the journals and the fts. I get it. When these tru sit down for talks, Deutsche Telekom got burned when they did a deal with at t but they walked away with cash and spectrum. If they cannot get certainty it is going to get through Regulatory Approval upfront, they are going to want a lot of money up front a termination fee if the deal falls apart. s preference is if it comes to a higher termination fee at a lower price or a higher price at a lower termination fee, i want option two. I will pay you more but i do not want a big termination fee. In some respects he feels it incentivize as regulators to block the deal. A high termination fee, great, put more money into tmobile and made them a stronger number three or number four. Are regulators going to feel like they cannot have both go through . You have this dynamic where every once to draft behind the comcast deal. The thought is they cannot allow blockt to merge and then a merger with tmobile. If they block time warnercomcast, you know what your fate will be. Standpoint, it shows how one will cause or get other people thinking of another deal. We have been writing about at t doing a deal, we were looking at vodafone in europe. Not to roll out vodafone. They could do this deal. Atts cfo has told us the window of opportunity is narrowing. Vodafone is a costly asset, even for someone the size of at t. Jeff mccracken with the latest on the changing landscape of media. Were talking investing in india. Some say they are plenty of opportunities but plenty of pitfalls. Two emergingmarket fund managers. David einhorn told us why he is shorting the stock. You will hear from the ceo of why einhorn is wrong. This is Market Makers streaming on your smartphone, tablet, and amazon fire and apple tv. You are watching Market Makers, i am Erik Schatzker with stephanie ruhle. Five years out of Harvard Business school and sharing the stage with the likes of david tepper and bill ackman. Founder and chief Investment Officer of core investment presented on monday, it is all about india. The worlds second most populous nation. Is anotherand so india enthusiast, Portfolio Manager of a fund with 4 billion invested outside the u. S. What is the appeal of india right now . Why dont we start there. A lot of folks are watching who have heard about the tremendous prospect in india. No also there has been shortage of disappointments. Why now . Been aas always challenging environment. There is a host of companies. If you look at the number of listed businesses, 5000, more than you find 5000 . More than any other market in the world. Are they all small caps . Zero tohey range from several billion market cap. We can find options to do bottoms up research with them that. That is what we are excited about. Doit is important to bottomup research. You do not necessarily want to look at india as a macro story and just buy an index. It is a mix of the two, royce is a bottoms up stock picker, we are a longterm investor, buy and hold strategy. There is an appeal to the consumer story in india. You are looking at a rapidly growing population, a rapidly growing middle class. Bea years, they are will more indians with disposable income than in america or the euro zone. Currently the level of consumption per capita is 800 theyear versus 35,000 in u. S. You have a totally unlettered consumer. Household debt is at 10 . Mortgage penetration is at 12 . Those are in the 80s and 90s here. Savings rates are 30 of gdp versus 4 in the u. S. You have a long runway of growth. You look at penetration rates of consumer products, india wonder from zero mobile phones to 900 million mobile phones in a decade. The completely skipped landline infrastructure and went directly to mobile. It has huge implications for the economy. You now have less than 5 of indians with airconditioning or a car, less than 15 have a washing machine or refrigerator. We look at businesses in travel or health care and see a long runway for growth. A growing middle class. You have a specific trade you like, what is it . We were honored to present, we talked about indias 900 million cell phones but only 19 90. Ion smartphones exponential, we talked about a Telecom Towers business in india, it has a 7 billion market cap with 25 market share, it spun off about a year and a half ago. We think that business has gone from oversupply to every demand. There is an excess of demand but the market is not realizing that. That is an opportunity we think plays into some of the trends david mentioned but is driven by bottoms up research. It is cheap, people are not realizing there are good and bad businesses, this is an example of a business we think is going from good to great and we can buy it at an attractive price. Is there an american analog . Exact samen tower business. Different stage. Earlier stage of growth. Faster growth ahead. Discountedicantly valuation. It is a new company for the markets and we think very positively about what management is doing. Where you concerned about . Concerns we would characterize as Rearview Mirror concerns competition building new towers, data stops, regulation capitalintensive business. It was overbuilt, now we think it is supply constrained. The regulators have done their First Telecom option in february. A lot of the concerns have been dissipated and we can buy with a large margin of safety and own for many years. David, what do you like . Just a minute, davids ensemble. Office charts. Off the charts. Kedi have a wife who worde in fashion. Ootd, outfit of the day. That areia, things connected to the consumer theme. Ill try to avoid stuff that has heavy ties to the government. The government is not very reliable, there is more opacity and potential corruption. Stuff that is independent from thomasernment, i like cook india, a travel agency. A travel agency . I feel like that business could not be more dead. Things are different in the emerging markets, less than 1 of indians travel outside the country. 5 of chinese. This is a brand in india that is trusted. They are doing more, they also do foreign exchange, a very profitable business. Their brand comes from the travel agency. That is one that we like. A pharmaceutical company, one of the things indians do better than anyone else is pharmaceutical production, more than half of arefda approved facilities in india. It is playing into primitives and it is playing into rheumatism and malaria exports. These are Companies Generating 20 returns on investment capital, important for us. Growing at 20 per year. Proven businesses. Whoever wins the election, we have got the worlds biggest election ever coming up here. Mick would agree, we are trying to find companies that are going to operate well. How important is the election . The optimism is built in from a very low base, the last few years have been quite challenging. There is a triumph of democracy that democracy requires consensus. When we invest we do not rely on ourcy changes to drive investment return. It took us eight months to set up an office in india and i grew up there. That says something. We find individual companies that operate regardless of the environment. Terrific conversation. David and nitin. First time having nitin on. You outfit yourself with your look. Coming up, athenahealth striking back. Response tos ceo David Einhorn, who is shorting the stock. Welcome to Market Makers. I am excited, erik was beaming about how good on the markets is about to be. Hit it. Talking about tesla. This is a company elan musk is changing the world. Stock down about 4 . Why . Teslas earnings reported and the model s delivered 6457 cars, up from 4900 80 euro but it was not enough. A year ago. But it was not enough. But what of the century, rates tesla a buy. Beat but not by as much as beat. Pected them to these people the analysts who are coming up with the numbers. He was excited, it was worth the wait. When we come back, you heard David Einhorn talk about shorting athenahealth. Hear what the ceo has to say, he is not taking it. We will be talking politics. Live from bloomberg headquarters in new york, this is Market Makers, with Erik Schatzker and stephanie ruhle. You are watching Market Makers on live or television. A big morning on Market Makers, David Einhorns latest target is athenahealth. A company that provides outsourcing services to physician practices. Einhorn says it is a tech company that has seen its shares too big, too fast. This is what he had to say. It is a Good Business with a good strategy and a good product that is doing good things but its stock is at the wrong price. Here to defend his company, athenahealth ceo jonathan bush. Thank you for joining us. Thank you for having me. Walk us through your growth targets. In 2009 you said we could grow 30 a year and increase margins. Somewhere it seems like the narrative changed. You said we need to take that money and reinvest in our product. Why cant you keep growing, why the need to reinvest customer we believe we need to grow 30 a year and we can and should. To grow more than that it will be hard to build infrastructure and if you grow less you will not be able to build a network to be relevant. You have got to grow the margins of all products to make them scalable and reliable in a Software Service and a network company. Our margins have improved in product. When we add new products, those start at low margins and as we grow them and remove the work that is rotting the walls of go up. Care, the margins what do you mean rotting the walls . You have been to the doctors office, the clipboard is still there and the phones and faxes. It is like the movie brazil. The future where the internet never shows up. We have a Business Model that allows us to Bring Health Care onto the internet, the health care clout, to eliminate that work. About David Einhorns criticism is he likes your company and he likes you as a ceo. Like in the south when they say bless your heart. He just thinks your stock is overpriced. You are a valuation guy. How do you defend valuation . Do not. I know we are worth 1000 a share as some poor in the future. It is up to david and others to decide you are 100 a share. How do you come up if you do not know valuation davidt i know, what missed is that he does not see what a Software Enabled service is. We are not an Enterprise Software company. We are not even a sas company, we are a Software Enabled service. We give out internet native software to our customers for free. Then we use that software to deliver a series of complicated services. And then we start to realize this extraordinary Network Effect where the margins go up and up. Can i interrupt why did your growth rate increase why didnt your growth rate increase when you cared less about margins . Have high Gross Margins but i want to put the money into r d. What are you going to do, pay 40 taxes and stop growing . We need half of the doctors. Doctors. Of walk us through the Network Effect, an issue einhorn picked up on, he says it does not apply to athenahealth. Are 52,000ere caregivers who in their office look at an ipad or laptop with athenanet. They are all connected to one software, one database. Every time anyone gets a claim get to the analysts thee and build code into network and no doctor ever gets that claim denied again. The margin associated with following up an appealing the Insurance Company turns into a new level of profit. Wants to, a doctor send a patient to a laboratory. Athena will build a connection to that laboratory and any doctor in the country who ever wants to send a patient who that laboratory is enacted like a new cable channel. Margineates a huge arbitrage. What used to be a athena sending a fax becomes a realtime margin it is a beautiful idea. You had promised something else. You said net income was going to grow. I messe