8 30 a. M. , the allimportant must Pay Attention cti. We are paying attention to the inflation rate. 945 a. M. , Bloomberg Consumer comfort. Doing what mortgage shes was that we have earnings before the bell. Walmart and toms favorite shoes crocs. After the bell, nordstrom, hewlettpackard, and groupon. Rogers moment. It matches your iphone cover. They do. I have got my girl iphone cover here. It goes with my pink crocs. Lets do a pink data check. Were looking at equities, bonds, currencies, commodities. Futures negative two, yield comeback. There is a relaxation of from the tragedy we see in kiev, we 2. 72. 2. 68 back to nymex crude still elevated above 103. More in surveillance today. The ruble, two measurements dollar ruble and the ruble basket, which is a mix of euro and dollars. That is with the pros look out. 41 70 four cents. And there is nymex crude front and center with the Ukrainian Oil hub in the pipeline. Heres a chargt on inflation. A core ablation number. That recent disinflation critical for a core deflation number. A big deal, but if we see take down there, that becomes far more important for chairman yellen and others as well. It took hours. We scour the front pages of the papers and the web this morning. A lot of stories. Preks tom, really only two stories everyone is talking about this morning and you know what they are because you are talking about them. Pilots in the ukraine overnight, and facebooks violence in the ukraine overnight in facebooks purchase of whatsapp. Starting with ukraine, 11 dead overnight in kiev. This is the last six hours. Correct. 25 official yesterday. These are the official numbers. So god only knows at this point some of the other numbers. You are looking at a live shot right now of Independence Square in central kiev. There does not appear to be any violence at the moment. The president has effectively declared martial law in the ukraine. Meanwhile, the western side of the region has effectively declared itself independent. President obama spoke in mexico yesterday. Here is what he had to say. Along with our european partners, we will continue to engage all sides and we continue to stress to president yanukovych and the Ukrainian Government that they have the primary response ability to prevent the kind of terrible violence we have seen, to withdrawal riot police to work with the opposition, to restore human dignity. Everyone is worried and focused on putins reaction. Remember, this is a crossroads of oil. We talk a lot about this, the idea of sanctions and we see the president began to nudge toward that. That is front and center of the euro. Here are the bloomberg headlines. The review crane the Ukraine Ministry shows you the cacophony there. 35 dead since the classes resumed. Convertedtoll today seven. You gave us a bigger number 12. I do want to point out the Ukraine Ministry as saying 20 police were wounded by sniper fire in kiev as well. A live report is coming out. Difficult to say what the definitive numbers are. And the official ministry did say that a number of people had gone into various defense department, stop aids, taken out guns and weapons, tens of ckades,ds stoc taken out guns and weapons, tens of thousands of rounds. The other big story we are talking about is purchase facebook acquiring whatsapp to be aat appears large number 90 billion. 12 billion in facebook stock, billion dollars cash, 3 billion restricted. They are effectively at facebook paying 42 per person which compares to the 5 for instagram and that is only half the valuation of twitter. Analysis, now we have gone on to a new analysis, which is more of a Balance Sheet affected we will talk about that through surveillance today. Did you know about whatsapp . I did not. I did not. Nope never used it. I do not think there was a core audience. Remember, the big incentive is not to just compete against google, which was rumored to be but also by whatsapp, teens and trying to recapture that as well. Let me point to the number here, the trade of the century, tom, Sequoia Capital took a 15 stake in whatsapp that cost 8 million a couple years ago. They got 3. 5 billion. That is like you and your super bowl betting. At is your front page, these two big deals, situations rather. We need to talk to somebody smart on whatsapp. David kirkpatrick is a bloomberg conserving editor, author of the wonderful facebook affect, and i thought really on a twitter feed, you got a lot of play last night. With your perspective here. What is the key distinction of mr. Transaction for ou zuckerberg. Preks i have it here on my iphone. Im surprised you do not have it because that is when people start using this, when they are outside the u. S. For americans. What was the question again . I know youre tired. What is the distinction for mr. Zuckerberg on this . What is the why . The most interesting thing i have not heard talk about yet is the sheer aggressiveness that he continues to show. As a leader, as a determined leader to keep the service in front at all costs with a long term vision that he is known for, that i have always talked about, i think this shows that he is willing to pay whatever it takes to keep on the cutting edge of what is going to be important down the road, and i think actually despite the shocking price that everyone reacted to when they first heard it, it actually begins to make more and more sense when you think about it. 11 billion in cash, no long term debt, has full positive, 2 billion a year, 3 billion a year, cash flow positive. This is the critical thing, folks. I went to a net analysis, and my question to you, david people are looking to the future discounting the value. Ego to the future, seven years arbitrarily, and you pull but that value, facebook and the others are not playing with the matthew and i are used to. Theyre not discounting at 3 or a lofty number, they have got a much higher number which makes this transaction makes sense. At negative the nature i think it is the nature of the internet. If you get the right service, the amount of money you can make it spectacular over the long term. And it is not necessarily important even to look at how much whatsapp will make it is a channel that can lead and feed to a lot of other Facebook Services where they may have a far better margin. It is also just a way of keeping allront of the switches the people of the planet. I want to say this is the group of users that zuckerberg wants everybody. He wants to own everybody. Right ram, all i dont know phone is the right word, by the way. He is presenting his turf and for filling his vision, which is to be a platform for vacations forring for everyone communications and sharing for everyone who lives. He has a defensive element because lets face it, google wanted this, yahoo was trying to talk to them, too. The thing about zuckerberg, he started hanging out with the two years ago, took them to dinner, the times said how many times they went walking above the hill in Silicon Valley. I have it on my phone. Did i think it would sell for 90 billion . 19 billion . Simply make at new rulebook of getting a bunch didnt simply make a new rulebook of getting out of front of each other, apple and samsung and others . I think there has been a new game plan for a while. Yvon microsoft paid 4 billion plus for skype, people were like oh, that is a lot of money. I do not think it needs to be a new game theory. People have already recognized the scale of opportunity on the internet is almost unlimited if you can have the right services and go to a massive scale, especially at a global business. By the way, i want to throw in another idea. Wechat, another service very similar to whatsapp, coming out based. Na, shenzhen that service has roughly this amount of global users even though most of them are in china, 40 50 million plus. We will go back to David Kirkpatrick. We will go beneath the headlines of whatsapp and facebook and give you a little more on bloomberg surveillance. And are toward her question of the day, actually. Whats your take on facebook buying whatsapp . Tweet us bsurveillance. I also have some company news that i want to update everybody on. Kite moynihan if they pay gets a pay hike. 12. 5 million of that were stocks. The remaining 1. 5 Million Dollars was in salary. Morning and not receive a cash bonus. Nihan did not receive a cash bonus. Nelson tells is pushing for a break in pepsico. 37aid 837page letter a page letter. Nbc universal ceo declares the sochi game and tremendous success. Isbc is averaging nbc averaging 23 million viewers. The primetime audience is doubled what nbc had before the sochi games. Viewership is really bad. No one is watching it. I would watch if i did not do it about a 6 00 p. M. I am watching tesla. In 20 earnings we saw last night with plans to raise the model s 56 this year. Can tesla become a large Global Player . This is bloomberg surveillance. On Bloomberg Television, streaming on your tablet, your phone, and bloomberg. Com. Good morning, everyone. Coming up on Bloomberg Television, Stephen Joyce, the chief executive officer of Choice Hotels international in the night 00 a. M. Hour, in the loop with betty liu, with Stephen Joyce. This is bloomberg surveillance. Im tom keene. With me adam johnson and alix steel. It is on an automobile. 35,000 is the number you need to know. That is how many model s cars tesla plans to sell this year. Stock is trading 150 times earnings full support 11 times. Albertine covers tesla. He joins us on the phone from washington, d. C. This morning. Good morning, james. What does tesla have to deliver to be worth its valuation . Good morning, to what for having me. I think the shift has really moved to the week of great excitations for tesla and that is really what is heading into the 200 territory. It started this week with the ipo, take out by a tech company, now i think the focus is shifting to this idea of a giga factory. I believe management will have a call next week to get into more essentially it is bring either battery production inhouse. That is not as much about the car, it is warm up the ancillary opportunity to get into the Energy Storage market, where i think investors may be focused again at these elevated valuations. James, i read your report that came out just yesterday before the earnings. The title was value exceeds fundamental reasoning we question take out. Why did you phrase it that way . I think as a car company, it is significantly overvalued. It was a beat really driven by lower than expected r d costs, which i think is dangerous at this stage in development for a company like tesla. Units, which is 1000 a week versus the gate hundred. We really do not know much about the adoption or uptick level at the 50,000 price point, with a thick is the biggest looming risk. To get to that point, there are significant investment, infrastructure, retail, and now giga factory related next two year to three year period, which poses risks that we do not think are being appropriately valued. One of the shortterm risks could be the model x and when that is going to start reduction. Elon musk spoke with homeworks with bloombergs betty liu. Quite steep artist the hardest part with the x is looking greatt functionality. It is easy to give up on one of those, and it is dam hard to is beautifulhat and incredibly functional at the same time. Bright, so when youre taking a look at that, what kind of negative is that in the short term. I think, just to be clear, i visionary and it is a luxury price point based on a tremendous job. I think the x extent that full sub again, at 211 or so for i think the x extent that. Again, at the 211 or so for sure, it extends. For have a market cap of 60 billion was about the guys seen six teslas on the road that has a market cap of 24 billion. Why is this thing overpriced, and as a greater order the go flat for years like say ebay used to do . Again, i think we are sort of bridging that gap between my expertise is value waiting a our company and others who look at it more for Pure Technology perspectives. So there are some out there that view it as the next sort of amazon or the next big tech stop. Bringing it back to reality for the moment, that is anticipating a much bigger shift in their core business. Remember, they sell cars. They do not sell into the Energy Storage market yet. There is this great sort of fuel of High Expectations that have not really been checks to an extent by rubrics around cost of returns. James albertine, thank you so much, with stifel nicolaus. David kirkpatrick with us, our bloomberg intervening editor. People want to sell this of a tech company. Tesla a tech company . Well, elon musk is a technologist. I would say yes. I think it is a lot of Different Things, and that is the nature of modern companies. I think every company is looking to become a tech company. Tesla is a great example of a company that is an old industry but truly is a tech company. But i would say what he was talking and i quote just now about beauty, you know, when you pick about the rumors that apple might try to buy it or something, apple needs a new steve jobs. They have Johnny Isakson all, but what like are you saying but what are you saying apple should buy tesla . Theyre trying to buy the key thing, which is using globally, then apple may be willing to pay 20 billion, 30 billion for a guy who can help them do what they want to do, which is make the most beautiful, functional tech products. I think youre crazy. All right, david. Is David Kirkpatrick crazy your twitter question of the day. On the show tomorrow, on the cover of the new bloomberg businessweek, and indepth look at the Transportation Company uber. This is bloomberg surveillance. On Bloomberg Television, streaming on your tablet, your phone, and bloomberg. Com. Good morning, everyone. Stitches futures 2. I am tom keene. With me adam johnson and alix steel. Adam has our top headlines. Every go with a truth in kiev, tumbling and clashes. Been killed in the violence as protesters drove right police from Independence Square. Tv images showed activists leading captured uniformed policeman away from the square and demonstrators regained control of the area. That is a scary concept. Shifting to china, a gauge of manufacturing their fault to a sevenmonth low. February ratings were adjusting manager index look from januarys level. For customers were calling for it to be unchanged most of economists say the recent trade figure shows manufacturing dropped off at the country celebrated the lunar new year, the year of the horse and china. In sports, syracuse perfect season comes to an end against Boston College. Orangemen, 6259 in overtime. This was in syracuse, which rubs assault anyone. The team suffered its first loss after 25 straight wins. Wichita state now the only eaten team in biscuits will never forget that. Lets go to our morning must read. Mike line of Bloomberg View , matt klein of Bloomberg View has to say a specter is haunting the u. S. The flow of information seems to be getting choked by a lack of highspeed data connectivity. That will not change unless new investment becomes more profitable or the government intervenes. David kirkpatrick, also of Bloomberg View, the eight most dangerous words in the english language, i am from the government and im here to help. I do not think that is crazy. I think the u. S. Is falling behind in a times in terms of broadband delivery among developed countries. I think that number was like 19 in terms of broadband speeds, average citizens can access. It is the lifeblood of the modern economy, broadband. If you do not have it, you are in trouble. David, you are sticking with us. Coming up in the next hour, bill george of harvard will be talking about facebook. Good morning, everyone. Bloomberg surveillance. I am tom keene. A lot going on. Inflated inflation data at 8 30 this morning. Dow futuresteam. Lets look at the data stream quickly. It is an improved data stream. Unrest in the ukraine has some effect. The yield comes back 2. 68 to 2. 72. Elevated,e still pipeline still key to russia, ukraine, and to europe as well. Kiev burns. Of course renewed burning this morning. Ukraine leaders began a nationwide antiterrorism operation. Europe and washington stand aside, washington consensus is a consensus of ineffective words and platitude, simply cant say can sanctionsy work and can the american and administration have the will to affect immediate sanctions . Richard falk and roth is with us. A former White House Security advisor, bloomberg contributing editor. En richard falk and rath is with us. Theyre going to little effect other than to reinforce the symbolic protest of the west because russia can come running. Simply supply the press of gas. What is it will we can do . Job, brussels has a statement, i do not get any sense of a two dude list for the west. It is not at all clear what they can do other than take a position and maintain it to the best of their ability. This is a crisis that is going to be settled by ukrainians and maybe russians but nobody else. The role of the outside world and this crisis is really rather modest. This is in an area where we are regarded to intervene militarily. That is absolutely clear. Enormously west have have already been established. There are no effective effectiveness of state. From the bloomberg terminal, ucd concerning the ucd continuing stream, you have got key of meir talking about the kiev mayor trying to get to some sense of reality. Lets share with the president had to say. The u. S. Proach oas is not to see this as some cold war chessboard in which we are in competition with russia. Our goal is to make sure the people of ukraine are able to make decisions for themselves about their future, that the people of syria are able to make decisions without having bombs going off and killing women and children richard, i understand the