Great to have you here. Time for theis newsfeed, the top stories from around the world. In india, a historic defeat for the family that has governed the country for most of the past several decades. Outsition bloc led by modi that the congress party. Raul gadhi conceded defeat. Modi promised overhaul of the economy. Uber in talks that could end up tripling its valuation. According to people familiar with the matter, it is trying to raise more money in a round that would value the company more than 10 billion. Uber thus far rolled out its service in 115 cities around the world. Los angeles clippers owner Donald Sterling is fighting back. According to sports illustrated, he reportedly told the nba he will not pay the fine from last month and may sue the league. Nba banned him for life for racist remarks. Leagueow shot the itself cannot force them to sell the clippers, only the owners can. It is amazing, his resistance on this. Really interesting to see if he will succeed in fighting that fine that they levied on him. Another big story we are watching this morning has to do with the restaurant business. Darden restaurants is throwing my lot the back into the sea. He is selling the Seafood Restaurant chain for a private equity firm after two of its biggest shareholders pressed darden to keep the struggling brand. Lets bring in a Restaurant Industry analyst for miller stay back. Is the big shareholder that pushed the company to keep red lobster but to restructure in other ways. Is this a loss for them that they succeeded in selling red lobster . Whats i think for star board i think for starboard the battle is lost but i dont think the war is over. There are still call for a special shareholders meeting. It is supposed to close in the august fiscal quarter fordarden. I suspect the focus of any special meeting to replace Board Members of garten. A peer firm bob evans and i would not be surprised to see something similar happened to darden. Getting good value for the franchise question mark fair valuation is in the low to billion dollar range we were looking at for potential sale price. Roughly eight to nine times trailing ebitda. Within that, and includes a little over 800 million in implied real estate value from the companyowned restaurants. You see a lot of the red lot theres may be shut down or sold . They have experience in the restaurant area. They own california pizza kitchen, on the border, macaroni grill. They will go through all the Company Assets and see which ones will be closed and engage in its own turnaround operations. The good news is darden already completed a lot of the requirement. D restaurants over the past four years. But it has not turned around and sales. Really abysmal sales. Eight of the last minute quarters. And red lobster, it is not exactly a desirable brand in terms of its image. That is absolutely right. If you look in relation to some of the other darden brands, red lobster is the one failing really to attract younger customers. As well as those who make higher incomes. Starboard explicitly said it wanted darden to hold a shareholder vote on a sale or spinoff of red lobster. Why would the darden board and management turnaround and effectively pulled them in the eye and say we are doing it whether you like it or not. I think darden was facing thature to show up with balance sheet. Their focus right now is really trying to turn around the olive garden brand which, i mean, it is the flagship brand. It really has to rely on olive garden to help finance some of the newer brands. Those all fair points, of course. Sale to golden gate would not have been possible after a shareholder vote . They need to shore up capital, sure, but presumably there is interim financing available. If golden gate was interested today presumably it would be interested two weeks from now. That is also a valid point. Ard was what star bo after with a more comprehensive break above darden. The larger brand of specialty restaurant brands. But our concern but that proposal is restaurant food brands if they had gone their own separate ways they would have to arrange their own financing in their growth would have been compromised. I want to ask a broader question this is a segment that has is troubled broadly as well. Of fastthe upper end food. Weve seen rapid growth of chipotles and five guys of the world. What can the olive garden red lobsters, what is the outlook . What you really have to do is focus in on value and some core menu items to keep customers coming back. But also what you have to do is try to attract the younger customer as well. Things like having post dinner entrees or small plates, that gain younger people. What chipotle has done over the past couple of years that is something they have to look at as well. Stephen anderson from miller quebec, thank you so much. Appreciate your time. Retailtime, talk about therapy. Some good news for the folks at jcpenney. The struggling retailer reported its first Quarterly Sales game in three years. Jcpenney are still losing money, but less, however, van analysts expected and investors this morning are rewarding management with a 16. 6 increase in the stock price. Lets bring in an analyst with imperial capital. Mary, you have been very bearish on jcpenney, 2. 50 price target. Based on the results, are you thinking about changing that . Well, actually, to be fair, we have been very favorable on the turnaround at jcpenney. Unfavorable on the shares. That is absolutely true. When you look at the first order, the First Quarter came in in line with expectations in the sense that we were expecting the company to gain traction. Our comp sale estimate was up 4. 3 , the company came in better metric,but the ebitda more important, came in 79 million, a big improvement, and theestimate was 119 and consensus was even more negative, negative 170. We were more bullish and certain respect on the turnaround from that perspective. And we do, we still expect ebitda to recover significantly this year. We see good traction in q2 and q3, but the key is when you look out to 2015 and you assume ebitda improves from a run rate right now or i should say ltm of negative 434 million, with the thinking we could get close to 600 million. But even if it gets to a billion, then where the shares are trading today, the company is being valued at right around point ofebitda at that time. If you look at macys, which execute very well and generates they ebitda margin nearly twice the what jcpenney could get to at that time, 2. 3 times consensus estimate for 2015 to me you would have to say jcp citrate actually at a discount. That is why our underperform rating and we are looking at option value on the shares. Is to clarify and i am glad you made the point when i say bearish, you mean on the stock price. And you remain in that camp that mike ullman is doing a good job, jcpenney is turning around, but it is just a valuation problem. That the stock is not worth as much. That is correct. That is because the company has a hefty debt load. Foure about 4. 6 billion to point 7 billion net of excess cash on the balance sheet. However, with the favorable operating momentum we are seeing, we think the company, if the shares continue to rise, could take advantage of the increase in the share price and do another secondary offering and reduce the debt load. I think that would be a very favorable move for the company. I want to move away from the finances of the company in a moment to the store. Who is shopping at jcpenney now . Who are these customers question mark are they people who are coming back . Are they new customers . And is jcpenney just turning back the clock . Back there turning clock, the Business People forget, it was not so fantastic free ron johnson. It got worse obviously. But it was not like they were doing so well before he came on board. They were say probably treading water before ron johnson came on board. The core customer is a woman who is about 55 with a Household Income somewhere in the 35,000 to 50,000 range. And so, the core customer has come back. I would say that is where the majority of the sales are coming from. But as the company indicated on the call last night, yesterday afternoon, they did see some new customers coming in. So i think the company is starting to attract a new work customer. And again, we will continue to see the traction. But this is a very moderate consumer looking for value. And this could explain why we saw that the client at coles. Ank k ohls incipientplains this turnaround most clearly . Is it the ability of mike ullman . Is it the enduring allure of the jcpenney brand . Or is it may be mistake that so many people made calling this company among the walking dead just 12 months ago . I think the really key point here is the companys private brands resume in a very well with consumers. And because they brought the private brands back st. Johns bay, worthington, and also with their exclusivity with liz claiborne, they own the brand now. Now that they are improving the assortments, they have the right sizes, the consumer has come back because both the brands that resume. If you look at the composition of their sales, about 50 is private brand and or exclusivity. That is what is driving the traffic back. But remember, we are also going against some very easy comparisons. And the first with the comps of 6. 2 , that is against twoyear stacked the kleins totaling about 36. 5 , and for the balance of the year the comparisons would be easy because we are going against two years stacked declines of over 30 . A great perspective on jcpenney. The turnaround is underway. The stock, however, overvalued. Bullish. Ome back we will talk about some big names that are still betting on the embattled company. And some new ones. We have been learning this week about what some of the biggest names in finance of buying so far this year. Hedge funds have to disclose their positions each quarter. So we now know what they bought and sold in the First Quarter. Though we dont know exactly when they traded, and what they have done since april 1. But still, lots of interesting stories pop up and stocks tend to react or do to help us break it down lets bring on our friend, a former fund of funds manager and bloomberg contributing editor. Good to see you as always. Interesting thing stuck up. Herbalife shareholders adding to their positions at a time the stock was falling. During the first order, it was down about 27 . We got a lot of Regulatory Risk hanging over it in the form of a probe from the fbi, various states, etc. Why take on more shares of the company at this point . I think at this point it will crystallize into the true believers and the momentum players, the guys who are looking for short covering, rally, and the generic sort of quick traders are in and out. By now youve got the true believers, those who believe it will make its way through the end. I think to prove they are the true believers, if you look at the last earnings, not much in the way to price action. It is really not about earnings anymore but whether this is a going concern, will they get shut down, are they owing to end up in a situation likenuskin in china where the chinese act on pyramidunder chinese rules. There are all of these regulatory issues globally but at the end of the day, if youre in it now, you are into the end. I am fascinated because herbalife is also indicative of the trend you see. There are so many stocks out there, so Many Companies and so many stories and you see people piling into particular names. Especially one like this one, where there is such an overhang and a potential risk. Why do you think this you get this sort of mentality on the part of some Hedge Fund Managers where they all cluster in particular areas . They often have done their due diligence. They have done a deep level of due diligence. You can speak to 10 lawyers and five of them say they are all going in orange jumpsuits and another five will say, you know what, the ftc brought 23 different actions on various pyramid selling situations and they have not acted on any one of these. They couldve easily at the herbalife. There is nothing new there. Why now . And it is a great buy, you are selling powder through a distribution force that loses money. And we do not know what they were doing during the quarter. This just shows a point in time, march 31. It would seem to me that a stock like herbalife, from top to bottom, 40 move during the First Quarter is a great Training Opportunity for an active long short equity manager. An interesting point for viewers of that are interested in the use of these sorts of silence. There is the 45 day limit. What youll find is, any manager has got over 100 million has to file one of these reports. You will see different kinds of names. When you see Something Like stevie cohen is in there, that is a different situation than saying Richard Perry at 7. 7 . All of which is true but which may not be you have to know something about the managers and not just recognize the name. Some are quick traders who are in and out. Relatively quickly out with a good slab of his position but Richard Perry actually, of the Hedge Fund Managers, as reported, he is the largest percentage holding, larger than icahn. What does it tell us about ebay, or, speaking of carl icahn . People follow him into there you see is a fascinating prospect this crosssection of people who followed him. It is not just the day traders. It is not just the activist. It is really a combination. Youve got carl icahn in the obviously. But you got jim chanos on the long side, and he knows an awful lot about stocks. Youve got the activist Barry Rosenstein as well as Richard Perry longterm holder. Leon cooperman, tremendously, but. He has taken it up taken up to a two percent position. It means something in his portfolio. These are longterm guys. When we look at a guy like jim chanos him a can we assume we can certainly askcan we assume that that is just a genuine long position and not tree. Ind of a pear you can assume it knowing his per fully over the years which is overwhelmingly short. When he goes long i will tell you this in the general case. And this is not to offend my longonly managers, but the guys who know the stocks best of all are the short managers. They have tremendous conviction. They know their stuff. And jim among them says im a look, it has been tough to be a short manager in this space. When you get the 13f filings, people chase it. You get regular investors chase it which is why we see the stock reactions. Is that a good idea . It is a snapshot. Is it a good idea if you are an investor to come out and buy when you see the guys are buying . Ison the 13ds, which followed ever they go over five percent, much more alive. If it is a stock with good momentum and you see a bunch of Stock Traders going into it, 45 days later that moment it may have already petered out. It is a bit of a waste of time. Look at activists look at a his per fully about two percent of the company but over the course of the same quarter we saw steve mandel take two percent, john griffin, leon cooperman. Longterm holders all moving into that name. It looks a lot like the name that was held by it looks a lot like being allergen position. There might be something going on. There might be something going on but also could be herd behavior. Are we seeing too much of that in the longterm managers . In general, among the retailer and you will absolutely see herd behavior among activists because theyre all after the same thing. Exposed has been sell paypal. Not a dumb thesis. In that respect it makes sense. Following day trading and Hedge Fund Managers, bad idea. Psa from savio. Former funds of funds manager. A hot horse. We will see if California Chrome can give a boost to a sport that badly needs one. Coming up, it hasnt happened here in more than two decades. A big bank pleading guilty to criminal charges will settle an investigation. Plus, something that is happening. Glacieroppable melting in antarctica. It may not be too late to stop some of the potential disasters. We will talk to the head of the Environmental Defense fund. On Bloomberg Television and streaming on your phone, tablet, bloomberg. Com and streaming live via amazon fire tv and apple tv. Live from bloomberg headquarters in new york, this is Market Makers with Erik Schatzker and stephanie ruhle. Welcome to Market Makers, everybody. Im Erik Schatzker. Im julie hyman in for stephanie. On the verge of a multibillion dollars settlement with Credit Suisse over allegations it helped americans evade taxes and in addition to go quickly it would pay two . 5 billion to the department of justice and other regulators. Our reporter has been following this story from the outside outset. 2. 5 billion, that is new. That is new. It is a lot of money and it seems to be welcomed be the starting point of pretty intense negotiations going down. Although we do expect it to be coming around the corner really soon here. These settlement negotiations appear to be very complicated and of course, we dont know everything that is going on behind the scenes. There he incremental progress. All of a sudden you have a number, right. We have seen with some of the other cases where we are really close to getting a deal and one of the regulators in the department of justice decides they want to change something or throw kind of a wrench in the deal. Than expected. Er but these negotiations are tough. There are a lot of people at these tables want to see certain things happen. One of them is google to play. What is and just think about what we found that recently is what we might be asking for the Parent Company the kind of shield the bank from larger damages. At the same time, there has been so much criticism that no banks have been prosecuted broadly in the wake of this financial crisis. Is this the thing that satisfies critics . It definitely seems like a tertiary issue, right . Definitely not something directly related to things that hap