Companies that develop smart car technologies. The investments will be made by a new nokia fund. It is trying to rebrand itself after selling its hand set business to microsoft last month. Twitter and amazon have teamed to let customers buy by hashtag. Twitter has been looking for ways to boost revenue and User Engagement to our lead story of the day, the head of target has resigned after that massive data breach. Greg steps down as president , chairman, and c. E. O. Of the retailer. C. F. O. John mulligan will be interim c. E. O. While the Company Looks for a replacement. The changes come about five months after hackers broke into system gaining access to personal information of millions of customers and two months after a Bloomberg Business week report found that target ignored warnings about the hacking. We have more on the data breach that rocked the retail industry. The first time the public heard that target had been hacked was on december 18, 201 when a blogger revealed that the company was investigating a massive breach. The breach itself actually began sometime before then. What did target know and when did they know it . Hackers began capturing credit card data on november 27. Three days later, a sophisticated security tool spotted the malaware. Target paid 1. 6 million for firize because of its ability to detect hacking in real time. It was sent on to the minneapolis operation center. The alert is overlooked. On december 2, security tools detect another version of the malaware. This red flag also goes undetected. Had target acted on the alerts at this point, they would have been able to prevent one of the biggest data thefts in history. Instead for more than two weeks, the hacker software collected credit card information and bounced it around the globe to places like moscow and ukraine. Federal Law Enforcement knives target saying they are seeing suspicious activity. On december 15, target confirms its been hacked and removed the mall aware. Target issues its first Public Statement about the data theft on thus, december 19, revealing that up to 40 million cards may have been compromised. 22 days later, on january 10, target knives customers that in addition to the credit card theft, personal information for up to 70 million customers has also been stolen affecting as many as 1 3 of american consumers. That was Bloomberg Business weeks brendon greeley. For more on the breach, we bring in our editor at large and Michael Riley from d. C. Michael, youre the guy who wrote that indepth investigative piece in Bloomberg Business week about target. Whats your target on the c. E. O. Leaving. Was it inevitable or was it a surprise . I was one of four reporters who worked on the story for several weeks. On one level, its a surprise. Its really hard to come up with a data breach, even a really, really large one that has gone all the way up to the c. E. O. In terms of the costs to jobs. Target as we know had already fired their chief Information Officer and thats a typical move to try and deflect any of the problems. You can basically just stop there. What it seems to indicate is that there may be more to come. We know that there are a couple of investigations that the result of which arent public. One is an investigation that target and its consultants are doing itself. Another one is being handled by audience authorize who are looking to see if the Security Issues that target had or problems that they had contributed to the loss. If so, the banks are going to be looking at shifting as much liability as they can to target. It could be that the result of those investigations when the board looked at them meant that the c. E. O. Had to go as well. Cory, this may well have been the biggest retail breach in history. What do you imagine continued followout from this could be . I think, there is a reasonable expectation there is a customer fallout. We have seen an impact of people unwilling to hand their credit card over when they get to the checkout at target. I have a Second Thought about it. I do. That Lasting Impact really hurts this business which has been a struggling business for quite a while. I also think that this is just a big wakeup call. Today is the day that every c. E. O. In the world should be thinking about the issues of Cyber Security in a very different way, in the same way that the i. T. Guy that ran a company, down the hall, and its next to the c. E. O. , the c. E. O. S have to take Cyber Security as an issue that is going to keep them in their job or in the case of target, force them to lose their job. Michael, how confident are you at this point that target now has its ducks in a row, if Something Like this were to happen again, they would be more prepared, more responsive . Thats a good question. Obviously time is going to tell. One of the things we can tell is they have learned at least one lesson is you dont skimp on security. They are already in the process of upgrading all of their Payment Systems to a chip and pin system which is what europe uses and which is much more secure. The problem with a system like that is it actually one retailer cant change the game themselves. The cards that the banks issue or the card issuers issue actually have to have the technology in them. Target is putting an advanced system in and has to wait for everybody to catch up with them. What happens in that space, again, well have to wait and see. Right, dont hold your breath for Something Like that, right, cory . Its taken years for the credit card industry to get to the place where it is now, even though the rest of the world is operating differently . Their system with credit cards is one of those, most developed credit card business itself is very important to target. Its also worth noting that this company has had struggles. They have gone into canada recently and theyre losing money hand over fist in canada. They predicted revenues over 400 million in canada and theyre losing 2 for every 4 of revenue they get in the next year. They got really big issues. They couldnt weather this massive data breach. As difficult as business is, you cant screw up on the Cyber Security efforts when you got other business problems as well. The c. E. O. Certainly had that. What do you imagine, michael, that other businesses have truly learned . We cant even say target would be ready for this to happen again, what about everybody else . Again, i think every other, not just every other retailer, but every other Large Corporation in the u. S. Is looking at this and the c. E. O. S especially are taking note of the impact that this can have, not just on the brand, on the business that everybody has been concerned about for years but on their jobs. As cory said, this is a watershed when this goes all the way up to the top, it indicates that Cyber Security has gotten to a different level in terms of the impact that it can have on a company. All right, well, Michael Riley, a story we will continue to follow for sure and our editor at large, cory johnson. Alibaba gets ready to file for one of the biggest tech i. P. O. s in history. How much control will they maintain . Well explore the options later this hour. You can watch us streaming live on your phone, tablet, bloomberg. Com and amazon fire tv. Welcome back to bloomberg west. Im emily chang. Alibaba could be one of the biggest i. P. O. s since facebook. The chinese e commerce giant is expected to file for an u. S. Offering any day now. As we wait for the official filing, were looking at the unique way that the Company Plans to structure its Share Ownership which is different from the structure of recent tech i. P. O. s like facebook and linked in. I want to bring back our editor at large cory johnson, also with us is leslie joining us from new york. Cory, ill start with you. What exactly is alibaba doing here and how is it different from google, facebook, and other structures that we are used to in technology . The structure is uncommon in the market widely with the exception of a lot of media companies, newspaper companies, companies with a history of family ownership like a copy like berkshire hathaway. You see it in the New York Times and comcast. Theyre much more common in tech. Lately we have seen this with a handful of technology companies. Google kind of introduced ha to the world of technology when it went public in 2004, as far as i recall standing on the lawn covering that story. We had a lot of these stories going public had crummy results. Outside investors have been unable to get active and force zinga, groupon and others to change their behavior because the insiders dont control the majority of the company, but they do control the majority of the voting shares. Alibabas situation is a little bit different. The board will have separate power than the regular shareholder class, that was not good for the listing in hong kong. How will this situation actually work . The partnership basically what were told is that they will be given an unequivocal right to nominate the Board Members for the i. P. O. Which then the shareholders vote and approve. Thats for the majority of Board Members. So shareholders will still be able to put up a majority of shareholders and vote on all other measures related to this company. There will be essentially a single class of shares except for that one, that one privilege that the partnership gets to keep. Well, its interesting, t. Rowe price did a study that dual class share structures actually arent performing that well . Thats interesting, because the investments in some of these fields are private. Its interesting that theyre going against their own best advice as an investing company. Think of yahoo , a couple that has had a lot of problems for a long time. Activist shareholders get involved because they can take large positions in the company. They demand some board seats in ways that arent possible at alibaba and fix a company that isnt broken. Alibaba and yahoo are joined at the hip. Investors would think at some level, historic performance of dual class shares or the notion that the shareholders willfully have control of the company they own, there is additional risk with a listing like this, its more difficult for them to go public given their adding this risk to the company. Leslie, what are you hearing from potential investors, how do they feel about this structure and is it going to deter them from investing . So i hear two sides from jefferson. On one hand, you have the investors who are growth oriented and say i dont know what the Corporate Governance structure is. Look at the returns i have gotten from google and facebook. Im in it for growth and growth alone and capital gains. You have the other side, the people who like to dig deep and look into these companies. Some investors tell me theyre concerned about the transparency related to alibaba. This is one other aspect that is kind of a red flag to them. Cory, how do you see alibaba faring in the current environment . We have been seeing a selloff in tech stock. Is this tech stock immune because theyre so different or not . There is going to be so much in this filing that will answer a lot of these questions. To leslies point, how obscure are the finances, we dont know yet. How is the Investment Banking fees different, something im looking at a lot, we dont really know yet. Theyre probably going to try to take a lot of money out of the Public Markets. There is not a lot of money racing into the Public Markets right now. On some level, their ability to show a lot of growth and a lot of profit might help them a lot. If they go with an offering like a much smaller offering, a very different dynamic. And an offering that was delayed or appears to have been delayed. Didnt at least rush out the gates that they would have liked to have done. It suggests this market is not immune to all risk. This deal is going to suck a lot of the wind out of the sails. Its also coming now after may, a time when the famous saying for tech investors is sell in may and go away. The notion that people are not wanting to pony up for a lot of risk because its now may and no longer april also will have a headwind against the offering. Facebook sold in may. It worked out for them in the longer run. Cory johnson, our editor at large, leslie who covers i. P. O. s for bloomberg numbers, thanks so much. Well stay in touch to watch the filing. 480 million twitter shares become eligible for sale tomorrow. Is the company doing enough to boost user growth and to keep insiders from selling. You can watch us streaming on your phone, tablet, bloomberg. Com, apple tv and amazon fire tv. Welcome back to bloomberg west. Im emily chang. More than 480 million twitter shares are eligible for sale tomorrow at the companys share lockup fires today. The c. E. O. And the cofounders have announced they dont plan to sell their shares. Is it enough to boost twitter stock which has plunked 39 this year . The chief economist max wolf joins us from new york. He wrote one of the first twitter reports on the street two years ago. Max, we actually have the c. E. O. , a company that is helping many twitter employees manage their portfolios on the show last week. He said, a. , the first day lockup expires is the worst to sell, and b. , most of the twitter employees that theyre working with arent planning to sell right now. Is that what youre hearing . Yes, always a pleasure for joining you. Thanks for having me, emily. A couple of things have changed in the market the last few years, nothing to do with twitter and there are specific things about the twitter story that makes us feel that whatever down draft is already in the shares, there is not a great selling opportunity, and the world has changed a bit. There is Second Market liquidity in a way there didnt used to be. I think twitter is a good story, a bit misunderstood lately. Twitter has been sort of buffetted around by the risk on, risk off market mood more than anything specific to the entities more specific to the last seven to eight weeks of trading. Shares are down, more than 38 since the start of the year. Theyre actually up today. How much of an impact do you think a lockup is really going to have on the stock . Lockups are law, they are not, they are a suggestion. Jumped writers release people from lockups all the time. Twitter had a weird lockup. They let employees selling 101 days after the i. P. O. There was an early lockup. They let employees sell shares covering their tax bills beginning on february 15. The initial early lockup, nonexecutives to sell to cover their tax bills, it was nearly half a billion dollars worth of stock. That came locked off or unlocked, lockup, whatever, that happened at this particular point in february when the stock was sold well over 50 a share. If you look at the performance of the stock, you can see the effect perhaps of those insiders selling to cover that tax bill and the stock got a really big bump on april 15, the last day they would have been able to sell to cover the tax bill. Its an interesting lockup strategy here that a lot of people who wanted to cover themselves get out to cover a tax bill that would have resulted from the i. P. O. Lets also remember they were able to sell on secondary markets before the i. P. O. There have been very fewer companies that let the insiders sell before the i. P. O. I spoke with the c. E. O. Last week, a lot of questions whether twitter can react sell rate user growth and the financials look good. Take a listen to what he thinks about the big picture. We have a very specific way of thinking about the Long Term Plan for the company. Its about balancing investment in growth and operating every ago and operating efficiencies. That combination is the way i think about how well build the business and how well build the company and paying attention to the market landscape. Max, how do you feel about the response to the critics, to the skeptics . To be honest, it makes little sense. Its a touch academic. Its not super effective at pushing back against the bears in the community. It makes sense. They need to be careful. Thats the 64,000 question for everybody with social, particularly for a mobile first and twitter is an 80 mobile story, how do you monday advertise your audience engagement without driving wie the trendsetters and younger engagers. That is always tricky. He has to do it. That is not a spirited rebuttal to fairly nasty commentary in the market focused dead center on twitter lately. I love his answer. We have a very specific way to look at these three things plus the markets and were not going to tell you how specific we are. The market was always on his periphery. Cory, when you and i looked at the numbers last week, we thought they actually looked pretty good. Someone made a point to me, if you took the name twitter off the Earnings Report and looked at it, you stripped out everything that was twitter, are they being held to an unfair standard . The stand they were held to is the market valuation they were able to achieve in the market. I cant blame twitter to sell the stock at the value at which people were going to pay for it. They have a really high valuation for a growth story that has really come apart. The fact that this quarter was a little bit better than last one is good for them, its good for the company, good on them. With this kind of valuation, you got to knock the numbers. You got to achieve growth rates and show a clear path to profitability and cash flow return that twitter is not able to do. Cory johnson, our editor at large. We will follow twitter. Max, thank you both. We will be right back with more of bloomberg west in a moment. Lets get you caught up where stocks closed at the session. We had a little bit of gain by the end of the day, a little bit of push and pull happening at the session between better than estimated data on the Services Sector in the u. S. And worse than es