Deal with cbs. The bmw m3 we will see if it can still hang in the sports car jungle. All of that and more over the next 60 minutes. Lets check out bloomberg headlines with su keenan. Two hits and a miss. Amazon did indeed post a loss, posting the Second Quarter loss of 126 million wider than the loss. This comes as revenues climb to 19 billion. Amazon stock is falling in the afterhours trade. Starbucks reported a profit that exceeded estimates. Seeing a change in fiscal thirdquarter profit after selling more food in the u. S. Finally, pandora posted secondquarter profit that beat analyst estimates. As it raised its forecast for the year, sales rose to more than 200 million at the online radio service, but its talk is moving heavily in extended trading. Visa lowered its forecast for the rest of the year. That talk is lower. As sue mentioned, amazon reporting its orderly loss, it against since 2012. Here to talk more about it is our bloomberg west editor at large, cory johnson and here to talk about pandora earnings is our senior west coast correspondent, jon erlichman. Weve been talking about amazon numbers, anything we can hang our hat on here . Just find the valuation. Unless you believe amazon is surely a Revenue Growth story and you want to be here for growing revenues a big retailer for a big number, then i guess youre happy. Thats the whole of this company and you can see it everything jeff bezos said in a Conference Call and the note to the press release shareholders he talks about how trucks and new ways they are selling things, but and mentally, its not a company throwing off a lot of free cash flow. Theyre spending all the cash they are getting and lost money again this quarter. We could have sat here and had this conversation 10 years ago when you would have strangely looked the same and i would have and blonde here below my lower lip. That has been the is this model reinvest, reinvest, get a grant build this to be asian centers. Lines are important, the web services, while not roque and out in this quarter, their Service Business doing over 4 billion in revenue. Very impressive numbers from that is this, but they are growing and reinvesting and its becoming a Monster Company that loses money every quarter. Ask you to depart these companies and look at the balance sheets. At what point do we say enough investment, you have to show some growth. Investors seem to be going along for the ride and by the story that they are investing for a payoff down the road. When do you say enough is enough . Ask youre talking about tolerance, not temperance. The temperance of the business is sustainable if they can pick it up and make enough half it to survive. But could the stock fall by 90 . Yes. Its happened twice before and could happen again, i dont know. But what they are building off of it is increasingly a bigger mode. They are doing sunday deliveries in 20 of the u. S. They dont call them Distribution Centers, they call them Fulfillment Centers because we are meant to be filled by their existence. They are coming closer and closer to major cities and that business is growing dramatically for them. Spending all the money they get to grow a giant business, but its open as to what kind of possibility it might ever throw off all stop backs we know amazon down in the afterhours trading and pandora also out about 11 stop that Company Raised its forecast and yet he stock is down. Any idea why . They are also spending, may be in different ways than amazon. This is one of the biggest players in mobile advertising. We spend so much time talking about facebook, but pandora has done a really good job of building a business thats largely mobile. A lot of people using pandora on their phone. In the same way you have to think about ads that come across on your phone that you not disrupt the experience, pandora is doing the exact same thing. To make it successful, they are investing a lot of money and investing heavily in their Advertising Sales team. There were some nearterm concerns and maybe at the same level of growth to justify, but this is a stock that has had a lot of lovers and haters on wall street and maybe they are jumping on the opportunity to see something that they are slightly unimpressed with. But they are raising their guidance for the full year and could end up with revenue of 915 million. One question that has been around for a while is that its a competitive story. A lot of players are essentially can eating with pandora, including amazon or google, spotify, youve got apple beats was just acquired by apple, so pandora is on stilly on the defensive trying to explain what their strategy is and how they are going to fit into a world of streaming music. As you mentioned earlier about how some a people have been calling for the death of pandora. But there are other folks out there, whether it is he or spotify, do they need to be worried about these folks . Could the dynamic change that quickly for pandora . I think pandora likes to stick to a simple script, to say we are not a subscription service, so unlike spotify, there has been a lot of ipo buzz around the company and it needs to have a lot of subscribers paying a set amount of money to get access to a lot of cool music. Theyre going to say no, we are Internet Radio and we are trying to use the best tools weve got to deliver a cool radio experience. Our job is to go out and get advertising dollars and we see ourselves competing with traditional radio. We are going to try to grab as much of that money as we can it be a big presence not just when you are on your phone doing errands, but when you are in your car. I dont think they are going to shift from that script. We have pandora down about 12. 5 . What should folks be pressing jeff as is on at this point . This is an old game. I think what they will be listening for is a big Capital Expenditure plan. Whats he going to say about pricing Amazon Web Services . Are they going to add Distribution Centers . How many more mike they want . Amazon has embraced opal sales taxes and has decided to move Distribution Centers from nontax places or lightly populated places like nevada to places like telephone you and new jersey. Are they going to do more of that . Thats going to be an important question because that will determine what cap texas. Thank you so much. Our bloomberg west editoratlarge, cory johnson, and our bloomberg west senior correspondent, jon erlichman, raking down pandora in the afterhours. Bloomberg television is available on apple tv and amazon fire tv. Coming up, the European Union is preparing to hit Vladimir Putins government with new sanctions. We will look at what it could mean for russias economy. This is taking stock on bloomberg. This is taking stock. Im carol massar in for pimm fox. Russia facing new economic sanctions, but not from the united states. Added and the eu announced new sanctions in response to russias failure to deescalate the crisis. Peter cook has the latest. It is the canadians turning up the heat now. The canadians jumping on board, at least for this idea for tougher sanctions. They are targeting specifically ukrainian separatists, both for visa bans and economic sanctions him and they are for the first time imposing sanctions on a number of Prominent Russian companies, including some companies the u. S. Has already targeted. That includes gazprom bank, nova tech, gunmaker kalashnikov, and the development bank. There are others on the canadian list as well. Canada is effectively responding to the support and its handling of the Malaysian Air shootdown. Eu officials formally agreeing to extend their sanctions target list. They will release the names officially tomorrow Vladimir Putins top spy chiefs that could make the cut. It includes the head of russias federal security service, the head of the foreign intelligence nervous, the chief of the Russian Security council, and others all of those potentially on the final eu list. Notably, no Major Russian Companies on the list but eu officials are did aiding Even Stronger steps and they include barring any europe he in futures of debts and arms embargoes, and and drilling equipment. The u. S. Is pushing europe to adopt tougher sanctions and the administration is not ruling out the possibility of tougher u. S. Sanctions as well. They big push is to get the europeans to show a united front and step up sanctions because that would have a eager impact on russia. Eu and canada turning up the heat here. We did also have the Prime Minister resigning today. Is that a surprise or not completely . Not a complete surprise. The timing is a surprise but his departure from the scene is not totally unexpected. The Prime Minister announcing his resignation late today in kiev after two parties quit his ruling party coalition. The Parliament Still includes lawmakers loyal to the ousted president. But with the government fighting separatist rebels, the timing ads to a level of uncertainty in the ukraine. You had poroshenko welcoming the new parliamentary election, saying it will allow for a reelection. He held to negotiate the 17 billion loan from the imf. He saw himself as a caretaker and now he is out as Prime Minister. Thank you you so much. A lot going on in this moving situation. Peter cook, thank you. We want to get a little more on whats going on in this situation. Joining us with more insight is michael ohanlon, director of research for the Foreign Policy row graham at the brookings and duchenne. Welcome to taking stock. Things seem to be escalating, putting more pressure on russia. Will it make a difference . This is exactly the kind of game putin does not mind playing and hes constantly weighing cost and benefits and he is looking for cracks in the coalition and seeing what he can get away with. The main reason i say this is if you observe what he did in crimea versus what he has done subsequently in Eastern Ukraine, he has ratcheted wings down about half a degree or one turn on the dial but is basically playing the same game. He is just trying to get away with it in a context where people now know what he is up to and its not easy to grab a piece of territory. Is there a Tipping Point when something is done and there are too many sanctions or too Many Companies that dont want to do business with russia that will get putins attention . I dont think we know where the Tipping Point is. I certainly dont predict it would be due to his conscience or moral uneasiness with the violence he is stoking, but the way you framed it is just right. He is going to watch what investors to and watch what happens to his economy. If we can force them to choose between slicing off a piece of Eastern Ukraine and having a decent economy in russia, think weve got a good chance to force him to make the right decision. It is obviously still in his hand and we dont know if hes going to back off and try again in a year. We have to be concerned about that ill stop that is very much the kind of game hes playing. He sees it as a game. I hate to use the word fun for him, but its not something that scares him at all. He is up to the challenge. Right. I think he does enjoy it but he justifies it to himself as a proper defense of great russias inherent right to be the most important power in central eurasia and it has the right to have some special influence and hegemonic influence on the ebers and he makes no apology for that. He thinks we do the same thing and just do not admit it in this hemisphere and elsewhere. He thinks it is only fair russia would act in a similar way. In terms of the tactics and backandforth, trying to lick the coalition, this is a lot of gamesmanship for him. Its almost a bit of a sport for him. The Prime Minister resigning in ukraine, not totally a next button but the timing was a bit unexpected. How does that go into what going on in the european situation . I dont know if it does because we will see. I dont have a great risk football for anything that happens in ukraine but if we hope the inauguration of president poroshenko would give putin a reason to try a new leaf, that maybe he was willing to work with a strong fresh leader who might take things in a different direction, that hope has been disappointed already and we see gave poroshenko may be a week and then he decided even with a strong president , hes not going to try to get along particularly. If a strong president doesnt help the situation, does a weak or absent Prime Minister hurt, im not so sure. Definitely a fluid situation. Coming up, why burger king is run by children. How i35 ceo is cooking up a new strategy for the giant fast food chain. Later on, we will sit down with the professional bull riders. The new frontier is china. This is taking stock on bloomberg. This is taking stock post quote im carol massar in for pimm fox. Burger king may be a whopper of a company to run but you might say its being run by children. That is the focus of our cover story on Bloomberg Businessweek magazine. Joining us to talk about it is the writer of the story come up bloombergs own seven letter. This is a great story. Talk to us about daniel short. Essentially, you have this company being run like a startup. You have a 33yearold ceo, a 28yearold cfo, and the head of north america is 36. Hes the one guy who actually side a of the 70s, but the average age last year for an incoming ceo was 53. In the corporate world, these guys might as well be children. Daniel schwartz is a young guy, the ceo of working. Is he doing a good job . This is a chain that has had its ups and downs. A lot of them, actually. They flipped the whole franchise model around. Its typical for Companies Like mcdonalds or Wendys Wendys owns 18 of their restaurants and the ideas it you own a bunch of restaurants and operate them come you can see what is working and what is not. Burger kings model is we are going to sell off all of our restaurants under three g, the brazilian private equity firm. Theyre just going to collect royalties. Theyre not going to make money selling burgers and fries. But you dont have any of that overhead. They need to remodel their restaurants. Its all on their franchisee dime. They say its a lot of work for the franchisee restaurants, so their profits have gone through the roof and their revenues have gone down but they are growing the number of restaurants around the world and thats happening on someone elses dime. In that sense, it is really an and has done wonders for their stock. Daniel schwartz has a financial background and helped sell burger king to the private equity firm . He came in with a private equity firm but helped orchestrate the deal and came in as the cfo and came in with all of this talk of cost cutting and had no experience in cost cutting. Then he worked to learn the ropes. Including bathrooms and all of that stuff. Working the drivethrough window and everything. Look at you pull a going gangbusters. They do it differently than mcdonalds or burger king who have been struggling. That is the big issue. Burger king, mcdonalds out and wendys are all having a hard time in the u. S. Because people are migrating to chipotle and panera bread, and everyone is trying to figure out what to do about that. In the midst of all of this, burger king had better samestore sales for the First Quarter of this year than mcdonalds or the u. S. , so they are doing something right. Its a great read, but check it out on Bloomberg Businessweek. You can read the full story in the latest issue. Its available now on newsstands, web and mobile devices. Coming up, the real housewives of new york. This is taking stock. Im carol massar in for pimm fox. Below is said to be seeking to acquire rival truly a. This move would combine the two most visited u. S. Real estate website. Shares of both Companies Jumping on the news today. Bloomberg newss managing editor, stefan bracken, helps to break it down. This would create quite a powerhouse. Its interesting to see both share Prices Higher on the news. Investors like the idea of this combination. Ask someone joked that if it wasnt true, then zillow ought to go out and do it for that reaction their shareholders gave them. They are number one and number two in the online real estate space and im a pretty big fan myself. They are really convenient and they would control roughly 90 of this space and its a realization by truly a that they will remain the number two and rather than get passed by number three and number four, its better to team up with number one and try to create a powerhouse. X they control 90 of the space, i think about regulatory concerns. Will that be regulatory concerns that could stop it . I think the expectation is they could be pushed a bit and you could get to a second stage inquiry. If they make some concessions of run to appease regulators, theres also of you that this is a growing market lace. They may be number one and number two right now but next year, there will be two entries and they could quickly come together and be competitive. Ive seen estimates of the online real estate world at 20 billion and together, they have less than a billion dollars in revenue. Some room for growth. X absolutely. You can see amazon or yahoo come in and decide they want to get in and quickly create a competitor. Both of them have tremendous growth in terms of revenues, but neither are profitable on an annual basis. Where are they in this process . Could the deal, undone . The deal could definitely come undone. The deal is not done and the expectation is next week, the deal gets announced. Its like a mostly stocked deal, two thirds or one third with stock and cash, but they are pretty far along and thats why we picked up on it. It was getting down to the final strokes. Thank you very much. Lets get a look at some of the other market moving headlines and head over to su keenan. Thats not gaining any afterhours trade. Today, d. R. Horton stocks held the most in almost five years. The company reporting its net income fell to 103rd teen million dollars, short of estimates. And ken griffin, the founder of citadel filed today for divorce from his wife were 11 years, citing irreconcilable differences. Those are the top headlines. Back to you. Heart ache to my husbands and shopping are just some of the ingredients in the real housewives franchise on rob o. T. The. The new york installment just wrapped up its installment with a memorable moment from our last guest. Shes also the author of a recent book entitled leggy blonde a memoir. She joins us now on taking stock. The housewives. Why do Something Like that . I joined the housewives to raise awareness for amputees. I knew i would be a caricature, i knew i could really raise awareness and give hope to amputees who need help and guidance. Did they seek you out or did you go to them . What they sought me out. They came to me and asked if i would mind the show and i said absolutely not, not joining those crazy women. That you did. I did and realize you cant really beat the system. When you are on one of those reality shows, you become one of those crazy women. I have to play that crazy moment of stop lets go to this moment on real housewives of new york. [crosstalk] you say you have never lied to any of us at the table and find us really hurtful and find that laughable. The only thing that is artificial about me for those listening on radio, that was a clip from real housewives of new york. You take off your prosthetic leg and throw it. Its a very big moment. It is. I got to breaking point with the ladies. I had asthma and could not go on a trip. I just wanted to make a point. I tend to overdo things, side probably overdid it, but i want to make a point and i did all stop i think when we watch all of these shows, we wonder how much is real and how much is him. When you see the edited show, does it surprise you sometimes . I think all of television, whether its the news, whether its a documentary, and certainly reality shows, there is always an element that is produced and planned. We dont have scripts. We are not told what to do. We are creating a show. We cannot just sit around all day and talk about our children stay at school. That would be awfully boring. We know what we are doing. Are you surprised at the success of this franchise . Im not surprised because it follows the same paradigm as the soap operas that everyone watches, so its the exact same model is that. People are voyeurs. People are lawyers, and i think they like it when they can get a glimpse into someone elses life. Your story is incredible and i know you have written about it all stop why did you write the book . I wrote the book for the same reason i joined the show, which was just to show my journey of navigating life as an amputee. Lexus has been a long life because this happened when you are six. Yes. Now im 43 and i wanted to show people how i got to where i am now. All of the strengths and weaknesses i have, all of the ways i was able to cope as a child and teenager wearing a prosthetic leg, i think helps all people who are going through physical challenges or any physical challenge, which we all go through. No one is spared. Im hoping they would gain hope from my successes. You have also helped i think about the Boston Marathon and those folks who are wearing prosthetic limbs, talk about your experience helping them out. I was asked to come to the hospital a few weeks after the bombing and i actually met with only women. Most and be tease in america are men do to combat. In the marathon bombing, more than half were women. Meeting them was incredible because i learned evil did not avail. I saw there smiling and hopeful faces. It was wonderful for me because i was able to offer them hope and let them know its not a sentence to be in a beauty. Life without limbs is limitless. What was the biggest question they asked you . This happened to you as a child and children are resilient. But for adults, it can be difficult. Very. But questions like how am i going to take a shower or can i wear heels or can i get a pedicure . Can you . You can. You need to go to the right prosthetics and went you get the right fit and your goals are being met, you can work on whatever cosmetics you want. I go to a step ahead prosthetics in new york which i have gone to for 12 years. I personally bring people to eric schaeffer. They work on a theory called form all is function. Do you want to ski question mark you want to run . Lets get you comfortable doing what everyone and if you want to have some icing or you want some skin that looks real or high heel leg, if you want telesales that look like you could get a pedicure you can have them customized. You can have whatever you want. Prosthetics today are really incredibly advanced and i did not have that as a child. One of our producers is a big fan and want to know if you are going to be back . At a good question. You dont know if you are going to be back because its like survivor. You have to be asked, and then you have to say yes. So you never know and the way the network works, they wait till the last minute to let you know and then you are going to be back. After that closing scene. We wish you well and good luck with the book. Thank you very much. Coming up, tv audiences are getting hooked on bull riding. Cbs reinforcing its partnership to bring pro old writers to your living room. More on the sports growing popularity, including in china. And we go from one adrenaline rush to another. We will speak to jason harper on bmws new 3m class car and why it set to become king of the sports car jungle. This is taking stock im carol massar in for pimm fox. There has been a surge in attendance at professional bull riding events nationwide, which means americans are buying a lot more bowl and bull riding is growing in popularity which is creating new business opportunities, including Television Broadcast partnerships, movie and even new interest from china. We are joined by jim haworth from the professional bull riders. Great to have you back here. Its great to be back. It is a big day for you. It absolutely is. Cbs, the Television Deal and this big deal in china, we are excited about the momentum weve got. Where do you think that momentum is coming from . I think weve got a great sport. When you look at the sheer raw competition, man versus beast, people want to see excitement. We are the original extreme sport. A lot of times, they get more exposure. I think america is looking for ways to see more entertainment. Our viewership is up about 27 , so we are excited about what is happening. They just extended the deal that we had. When you think about us as a sports property, what we think about growing a fan base and what it means for our sponsors, being a partner with cbs is exciting. We will have 14 networks along with about 100 hours on the cbssports network. Thats a lot of bull. And you talk to cbs, what have they said that they like so much about this content in a world where everyone is looking for original content . Theyve got the nfl, pga, but when you think about Something Different that catches people off i, theyll look for great content they can share with a broader fan base. Weve been very fortunate the way they have helped promote us and even our numbers are up about 32 . What is that . Thats how you measured viewership you get for sponsors. Sponsors like that, we know cbs takes note. Its bringing in viewers and ad dollars. Telly not china. This is a big day for you. I find that fascinating. You spent ive years living there. What is it about the Chinese Market that makes it fell able . We had an event covered in china, so we knew we had about 30 Million Viewers that on a regular asus watch the highlight show, so we know there is a fan base there with a propensity for bull riding. 970 million more viewers out there possibly in china. Access we think about that opportunity, we know if you like us on tv, you are going to love it live, so we look for ways to bring this live event to china. We work with a partnership and we are going to do a three city stop in the next couple of months and we know its going to bring a big fan base. Im assuming youre going to get some fan base have a movie coming out. Nicholas sparks who did the notebook. There has already been a proof for a movie. Scott eastwood, Clint Eastwoods son is going to take the lead. We have a role in are going to help with the production and bull riding. Many bull athletes will be featured in it like ringo. We are excited about the exposure and the growing fan base we think this will bring. But how big do you think this is going to be . We know weve got over 26 million fans in the united states. If you had that from a global standpoint, we could have several hundred million fans who could get exposure to professional bull riders. You are here, youll have to have pimm fox to get on a bull. When we come back, i make sure we i will make sure we will get that set up for you. Any other regions youre looking at . We operate from canada to australia, mexico to brazil. We are going to do some event in new zealand in november. We are going to look for countries that make sense for us. Growth continuing. Thank you so much. Thank you. He is the chief executive officer of the professional bull riders. Coming up, do you want to be a professional driver and take a drive on a friday racetrack . Who doesnt question working a professional license. We will speak with our bloomberg auto columnist on what it takes to drive like a champion. Thats coming up next. This is taking stock. Em w has been in the business for making luxury vehicles for about 80 years and one of its most popular models just got a substantial upgrade for its m3 and m4 all. Here to talk about it is our bloomberg auto columnist, jason harper, who got to take these both for a spin. The m3 has been the iconic name since the 1980s. Its sort of the car the three series was very popular but if you want a faster version, you bought an m3. Now there is also the m4 which is a two door version. This is fifth generation. Is a better generation . In some ways it is. Everybody says back in the day it was better. The previous generation, it had a v8 engine and was a little more state. This one has a twin turbo engine and really comes alive. It is far more than zippy. You watch the commercials and it says do not attempt. You can do it preferably on a closed racecourse but it can make you look heroic. But whats the difference between a sedan or coupe . Ford wars two. The sedan is a little taller. You have to get smashed act their a little but. Talk to me a little about the drive. There is dynamic stability control. You can have it regular or you can ramp it up. You dont want 600 horsepower to kill you. You can leave it in normal driving mode. You can change the settings on this thing to the sort of alpha mode and it turns into an alpha machine where you can literally take it to a racetrack and do pretty heroic things. Then you can put it into conservative mode and go back home. What is the cost . They are around 50,000 to s 65,000 thats about 18,000 over the regular 30035i. It is a brag mobile. You just got your professional drivers license. I thought you were a professional driver. I drive officially, but im not a professional driver. All men want to be racecar drivers, so how do you do it . You can get your racecar license, which i just did. I talked to ferrari and they have a race series was just for our ace, with guys who come and race each other called the ferrari challenge. They are going to lend me a car and in september, go to a legendary racetrack and race all of these other wealthy guys in a very fast car. Im going to get a coach, learn how to do it and keep the shiny side up. What do you need a coach for at this point . You could be a normal guy. You dont have to have a background as a racecar driver, but its about 300,000. It can remind you that the team and support its different than just doing laps on a racetrack. They are serious . Theyre very serious. Well see what ive gotten myself into. Youve got this professional drivers license. What did you learn that you did not know . Im still learning. I have the provisional drivers license on the idea theyve got enough experience to get the license, but through the coaching, i will find out if im good enough to race. Are you nervous . Any smart man would be. Thank you very much. Thanks for watching taking stock. Have a great evening