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 expectati