Finally, in pop, they will not let it go. Disney is driving kids and moms crazy. We will kick it off with everyone what everyone is talking about. Could it bp is with carl icahn and ebay . An agreement has been reached with carl icahn, ending the fight before the shareholders meeting. Icahn has been pushing two separate ebay from paypal. Im well aware of carl icahn plus push to separate ebay from paypal. It is a nobrainer that paypal should be spun off. I do not think in this case that they should be together. There is no reason they should be together in our opinion. By act, it would be helped Management Team that is separate and can go their own way. The multiple would go up dramatically, and also, the health of the company would be better. It is going to be an argument. The phoneerviews over and daily letters to ebay shareholders have made his mission abundantly clear to the investing public. He was also not too keen on the leadership of john donahoe. Skype was going to be sold by think is either naive or just asleep at the switch year. Nsthat was mr. Icon icah side of the story. This is mr. Donahoes. The board and i have been looking at these alternatives for the past five years. Ebay makes paypal stronger by helping them grow faster. Provide more data and to provide a Strong Financial foundation that will ultimately make paypal more successful as part of ebay, then separate. Commerce and payments are converging, not diverging. Commerce companies are trying to get into payments and Payment Companies are trying to get into commerce. We are looking at how they can be most successful and the board and i believe the best way is together. That was ebay ceo john donahoe in february. This is him today. What carl icahn has done is seen the potential and opportunity in our company, so he is becoming a longterm shareholder which is a winwin. Positive spin from the ebay ceo in his interview with erik schatzker. Carl icahn, who has accumulate in two percent of ebays january, will get an independent board seat now. Of cvsants the chairman caremark and armor chairman of at t to take the spot. Is coming off as an independent director that i respect. I think it is a good addition to the board, one that i think will allow us to continue to execute on the enormous opportunities in front of us. This proxy battle that has been playing out in the board rooms and through press releases, how did that potentially hurt ebay in running the company . We were executing just fine, but this allows us to quiet all the distracting noise and focus on the opportunities in front of us. And relatively straightforward opportunity to do this. It is a clear win. It is what the investors want and what we as a company want. Now we move ahead, focusing on the enormous opportunity paypal has to capitalize on mobile and digital payments, the opportunity ebay has to capitalize on the commerce opportunity in front of us. We have been driving strong growth and we will continue to focus on that with another strong, longterm shareholder in carl. Tell me more about the confidentiality agreement. What are you giving to carl icahn that other shareholders do not get . It is something we would offer to any large shareholder, relatively straightforward. You directors and i are free to share any confidential information with carl. If and when we do so, that makes him an insider, so inbounds and by the restrictions that any insider would have. He will be longerterm in his orientation. It is relatively straightforward. I will periodically get together with carl and this into him as i would any large shareholder. It any of your other large shareholders, blackrock for example, wellington, t rowe, you would give it to them . Absolutely. If they want confidential information and abide by the restrictions that come with that, then we would be happy to provide it. In this class in this case, that is what he wanted to do. You know that many see carl icahn as a bully. To those folks that still feel that way, explain to them the value of letting the fox in the hen house. I do not think it is a fox in the penthouse. From the beginning ive had direct conversations with carl. In all those conversations hes been respectful and thoughtful in our oneonone conversations. But nasty and accusatory in public . I have not negotiated with carl icahn, so i do not know if that is the way he rolls. All i know is in my direct conversation hes been thoughtful. What has happened in this case, and jimmy lee, the vice chairman of j. P. Morgan, all the last week. He was meeting with carl on another topic. He said, i think you and carl should spend some time together. We did over the weekend and we talked repeatedly on the phone and focused on separation we did not focus on the separation, but we focused on the business, we focused on the enormous opportunities in front of our company. Had common that, we ground, and will continue the dialogue, going forward. Did you hear him say that this is a winwin for shareholders . This is a clear winwin for shareholders. It is a clear winwin for our company. He is becoming a longterm shareholder which is a winwin. It is a winwin for ebay shareholders. Im sure mr. Icahn will feel good about it, too. You can hear about it when he takes to us on bottom line at 2 00 p. M. Everything that you need to know about the latest Cyber Security threat, known as hardly. And what does it take to get congressmen together . That is coming up in motors. We have breaking news. Cbs has named Stephen Cole Berta the next host of the late show. Will be replacing David Letterman who will be retiring in 2015. A quick announcement by cbs in a story that many thought would unfold over a period for several months. Olmert has ties to the family of because the company has also in the back on business has ties to cbs. That is where Stephen Colberts show airs. We are looking for specifics on when he will take over but we can say cbs is describing this as a fiveyear deal between cbs and stephen colbert. Intent, we are focused on a real cyber threat known as heartbleed. It is a newly discovered virus using the inscription used by encryption used by two thirds of all websites. We explain how this works. The first point we should make is it was made by google researchers and by another company. It is a tremendous find. They found a really important bug. The flip side to that is they also coordinate the release of a fix for it, a software patch. They are tminus the important, there is a fix. Most websites have pushed up at six. This is a flaw in the Encryption Software used by two thirds of the worlds internet sites and it is opensource software, which means it is Community Created and developed. Beenact that this law has around for two years raises some interesting questions about who knew about it before. You put together some good visuals of what the information looks like unencrypted. It is not obvious. I cannot see my password. You have to be quite skilled to interpret it. There was a researcher from the netherlands who did some interesting stuff yesterday as soon as the disclosure came out, was able to run some tests on popular websites. This is what it looks like unencrypted. This is from the yahoo website. They were one of the sites that had not pushed out the fix right away. They since have done that. Usernames and get passwords from yahoo email. Like gibberish to the untrained eye, but within that, there is valuable detail. Burke has 15t years of i. T. Security and Network Management experience. This is what he had to say about the heartbleed virus this morning. There are a lot of different kinds of attacks out there. Unique in that it goes to the heart of the encryption protocol, probably not the last bug we will be seeing from that. Im told my iphone is very out toconstantly going servers, giving out data and bringing it in. How do i secure it . You could turn it off. Aside from that. Has anyone produced something that could legitimately secure my iphone or your galaxy . Its extremely hard. Galaxy phones have to some degree this problem as well. We recently saw this bug in the that causebrowser some problems with the ssl. That wethis protocol have to rely on but implementation calls are putting it such that it becomes extremely hard to completely trust these technologies. Betty liu spoke with a tech investor about how heartbleed could impact his ventures. I did not know that heartbleed existed until i got an email from our head of security after the news had broken that we have fixed the issue. He jumped on it, found it before most of the news broke. How did he get alerted to it . I dont know. His job is to be aware of the sort of stuff, so he was doing his job, but he wrote a note to the business informing everyone that this had been an issue for us. Like you said, six e seven percent of the internet is affected. We addressed it immediately but it is something that i would guess, of the 200 companies that are invested in us, almost all of them would be affected. How do you fix it . Prettyink it is actually easy. From what i can tell you, it is an issue with open ssl, and open source technology. Ultimately, you upgrade to the latest version of ssl and change a bunch of passwords. It requires some quick changes but i do not think the changes are particularly hard for the business. Was open for two years or something to that effect. Ever see anything funny . Know, and the businesses that are most at risk are the really Big Companies that are always getting targeted on a regular basis. Walmart, target. People with massive amounts of customer data, businesses that are always under the gun. Speaking of company like that, Digital Security company mandy and has released their annual report looking at the cyber landscape. The big take away from this report is modestly improved. The analysis of course is ndians own cases and hundreds of clients, and this was before we learned about the heartbleed bug. Underscoreindings the landscape of the 2014 threat challenges and have been made all the more evident by heartbleed. Overall, organizations are discovering compromises sooner than before. It took been two weeks less in 2013 compared to 2012, but you should know, hackers were still hanging out in victims networks 229 days last year before they were discovered. Organizations are still having a hard time adapting when they have been compromised. In 2013, only a third of companies discovered they had been breached on their own. One thing that has not changed, Financial Services is tilde top industry targeted, although threats to media and entertainment also picked up as well. The big picture there is that the list of targets has increased and the Playing Field has grown. Driving around the parking garage looking for spots. We have the details on the latest parking invention. That is coming up in motors. Director Christine Lagarde sits down with tom keene. Why does the madame director have such a soft spot for the u. S. . That is coming up in world. And speaking of, in north korea, a rally to mark the reelection of kim jongun. He won a predetermined election where no other candidates ran. Here is a look at their victory rally. Gm has placed two engineers on the with their role connected to the recall involved in deaths. Documents, he rejected a fix because it was too expensive and would take too long. He quietlymber two, greenlighted a switch improvement that others did not learn about for six years after columnists and customers complained last year a rate he denied under oath that he knew that part had been changed. Have hadnd toyota negative press recently with all these auto recalls. Toyota is trying to convince lawmakers that its cars at least are good for constituents. How is it doing it . It is taking members of congress in a test drive in their coolest new toy. Motorcycle, golf cart, part futuristic pod mobile, this futuristic car was enough to pull lawmakers away for a test drive. Big plant in my district in indiana. I wanted to see what it could do. I think there are some potential opportunities for it, especially in urban settings. I was fascinated by it. Iroad. Oyotas powered by aer is lithiumion battery, giving it 30 miles per charge. It is yet not yet approved for u. S. Roads. Toyota is pitching it as the perfect car for city dwellers. We see this fitting into a Transportation Network where they can be shared between users and play a role between Mass Transportation such as trains or buses to him. Why washington . When you have a new technology and you are considering to take it to u. S. Roads, you may as well show it off to the decisionmakers. The car uses but the Company Calls active lien, on balance computers that counterbalance Centripetal Force when the vehicle turns. We were testing to see what public reaction would be. Is there actually a market for such a vehicle in the United States . How did the show go over . Compared to other hearings, way more exciting. Fastly when you have objects coming at you, it is not in the form of an automobile. Living in a big city certainly has its challenges, and parking is one of them. Fortunately, for the less racially aware, there is a robot that can do it for you. This is the First Time Ever that we present the robot to the public. I am one of the founders of serva transport systems. We founded the company in 2010. We developed a robot that can park cars in a park garage. , and the with a car goal of the transfer station is to have a very bright and large area where you can park your car comfortably. Then after you have locked your car, you take your key with you, and our robot comes and parks for you in the garage. This is the technology of the serva transport system. You can fit up to 60 more cars in a garage. Our First Installations are at the airports in dusseldorf, germany. Since we have information on every car, we needed it for our system, and we need the length, width, height of any car, position of the wheels. To make sure that we do not damage your car. He is one of the kings of luxury brands, and he is also married to salma hayek. You will meet him after the break. It is 26 minutes after the hour which means bloombergtv is on the markets. Lets get you caught up on all the market actions right across the board, the s p is slipping lower after it posted its lowest largest gain in five weeks. Thedow falling the least of three indexes. The nasdaq is leading the charge lower. Meeting thes been swings recently and some investors are questioning the high multiples of tech stocks. Onthis is lunch money Bloomberg Television. Im adam johnson. An australian search plane has picked up a signal that could be coming from the missing malaysia and jet. In thenal was detected area where search boats have heard similar transmissions over the last several days. Crews have narrowed the search zones in an effort to pinpoint are cominge pings from. In athens, a car bomb explodes outside greece central bank. No injuries were reported. In the Early Morning explosion coming as greece returns to the International Bond market. Fiveountry sold more than Million Dollars of bonds. Demand was stronger than estimated. The first bond sale since company was bailed out in the financial crisis. Secretary of defense chuck hagel arrives in mongolia to strengthen ties with the country. As he wraps up his visit, he was given a parting gift, a horse. We are serious. It do not exactly catch them by surprise. His was before he left for asia. Your way ton mongolia, the first offense secretary to go there since rumsfeld. When he left, they gave him the gift of a horse. My question is, are you prepared for a similar gift and is there room on the plane . I dont know if they would consider giving me a horse, but i be privileged if they gave me any recognition of a partnership with the United States. There is probably no place for livestock that ive seen on the plane. Named the nineyearold horse shamrock after his high school mascot. Finance ministers, central bankers, and other officials are gathering in washington for the imf and World Bank Spring meetings. Let me start by saying the main message of the report that is thatresenting today we have begun to turn the corner from the Global Financial crisis , in the Global Financial stability is significantly improving. I like good news. Please tell us more. It is too early to declare victory because there is a need to move beyond liquidity dependence by overcoming the remaining challenges to global stability. Despite a strengthening u. S. Economy, increased confidence in eu banks, better policies in developing markets, there are still plenty of challenges. We summed up thus challenges for you. This is our mashup starting with the usa. Strong issuance of highyield bonds and leveraged loans. Weaker writing standards, a sudden rise in yields. Emerging markets, rising interest rates. We can earnings. In ordinary deleveraging of the financial system, in particular, the shadow banking system. Let me turn to the euro area. The challenges to complete the job of repairing the banks and repairing the corporates. Then enter fragmentation between the brief and the court continued. Soft credit is particularly depressed. Geopolitical risks and main elevator. Finally, failure to adequately address any of the challenges i had mentioned could have a Significant Impact on Global Financial stability. Spoke with imf director Christine Lagarde this morning on the banks 70th anniversary. The question, what is the next mandate to bring the imf into the next decade . I would hope before the end of the calendar year we complete the reform of the imf, which means we make it more credible, better resourced, and a bubble of jumping on urgency issues like in the ukraine. Within that, the issue is, the support of the u. S. , in the Financial Times was quote today , someone argue the founder of the g20, they are scathing about the u. S. Congress. I would ask you to comment on what you need from republicans and democrats. I need the United States of america, my main shareholder, to exercise its leadership in the institution. Where the imf is best is in a situation like ukraine. We can send a team right away. They are experts. They have been doing this Crisis Management for decades. They can immediately identify the issues, do the due diligence, put together a , around 15 billion, which is a big chunk of money. Why do we do that . Ecause membership is behind it they have an interest in stability around the world. To do that we need the entire membership supporting us and saying, yes, the imf should do it, and should do it with full support of its main shareholder, the u. S. You are one of the few people in this world that have a unique regard for america. Your time in washington, chicago. What would you say to isolationist america that continues over many centuries to want to push away from International Affairs . What would you say to the americans that do not want to engage with the imf . France, aorn in country devastated by two successive world wars. When the United States withdraws, everybody loses. When the u. S. Engages and exercises legitimate leadership, things improve around the world. I would say, exercise that leadership. It is there, it is yours. Also in attendance, World Bank President jim yong kim. He has been criticized for being not as aggressive and not controlling the perception of the institution. I came into the institution and we realize the world was changing tremendously. , 100 25 billion dollars, that may sound like a lot, but africa needs 100 billion a year. Official Development Assistance is small. The key for development in the future is to bring all the public moneys, money that we have, together with the private sector, to really develop economies. It is a completely different game. The reason we are going through these changes, we now have to be fit for the future. We think we are getting there. Behindng up, the ceo kering. They are behind Fashion Companies like gucci. Mcdonalds is pulling out of crimea. Burger king is moving in. The beef monarch has been making a big push in russia. As for mcdonalds, they are siding manufacturing reasons. When it comes to the good life, it is hard to top francois henripinault. In addition to being married to salma hayek, he is the ceo of kering. This company has a huge portfolio of highend fashion labels. He spoke to Bloomberg Television about how he will grow the business. We do not believe luxury and france can take advantage of all the price segments by stretching the brands, like very lowpriced, 200 euros, 5000 euros in the same category. We need to move upwards. The number of customers buying Luxury Products is increasing in the world. Next 20, 30 years, in terms of Economic Development around the world, to keep markets are young people, very much attracted by brands, very aware of health, sports for the young generation. Those markets, because of their fastgrowing pace, are generating more and more numbers of rich people for the luxury side. He also spoke about plans to elevate one of his biggest brands, gucci, which has lost some of it with customers lately. The gucci brand, in terms of creativity in the fashion category is what it should be. We need to work much more on the communication side of the brand. We have been a little too much focusing on the product side to raise the brand. This has been done marvelously well. One the bottom fell out of the european auto market, penny farina had to look elsewhere. Re . 1963 per it sold for 52 million last year, making it the most expensive car in the world. Ferraris of dozens of design right here at headquarters in the northwest of italy. Ferrarielationship with produced a number of cars with which my designs father had been working on for more than 100 models. It is a legacy that nearly did not continue. They strut real trouble five years ago with the rest of the european auto market. ,t shed hundreds of workers restructured its debt, and was forced to look elsewhere for revenues. Only this year will he return to profits. The architect seems to be promising. It is the right expression for a longlasting elegant design. It is very much a promise for the future. Luxury apartment tower in singapore bears the same curves that are seen most at home on a per re . Those curves are in the design dna. Here on aot them trophy for a dubai cycling event. And here on its latest creation, a pen. A this is not a pen, it is pen forever. You can draw and write forever. The pen and pencil hybrid has has an alloy that leaves a mark on paper, like graphite, but it cannot be erased. We put a lot of passion into everything we do, from a macro point of view, and micro. We must never stop to innovate and explore new areas, staying close with quality and excellence. If there is something that we should do in the next year, it is to go back to the root even more. It may be made of polyester but fans of the disney movie frozen are crazy for it. And called the 12 days of homer. Fxx will start to show every single episode of the simpsons starting on august 21, ending on labor day. We have confirmation. Nice use of the lingo, homer. On this is lunch money Bloomberg Television. You can also watch us streaming on your tablet, phone, and on bloomberg. Com. Im adam johnson. Feature latest animated recently became the highest grossing animated movie of all time. It has brought in more than a billion dollars in Box Office Sales meeting toy story three. If you have not seen it, here is a clip. Different. It is a good different. And this place is amazing. Thank you. I never knew what i was capable of. Dress . You see the it has fans in a frenzy. Fornts will have to settle the miniature version. The only problem is, stores are out of it and your best bet is finding it on ebay, and that may cost you 1600. Thehere are two stories on dress. Ive become an expert on this. There is a very specific one that you can get at the disney store which is now going for big bucks on ebay, and then there is the more modestly priced one through licensed manufacturers, which will sell at walmart, toys r us, but even those are hard to get. Highlight those examples because it helps to explain the Consumer Products business for disney, which generated 3. 5 billion in revenues last year. The stores themselves make up over a third of that revenue. The lines chair comes from the licensing deals that disney has, which ultimately generated the company 2 billion last year. Remember, they are only taking a percentage of what is ultimately sold. We are talking about billions of disney things out there and probably now a lot more because of this frozen phenomenon. Needless to say, disney hit the jackpot when it comes to merchandise on this one. Other ones have not been so lucky. Unit with established franchises, it does not go the way you thought. Take iron man. 3 the retailer said it would be a big film, but they may have ended up with too many toys on the shelves. That is an issue for upcoming films like captain america. Butzen has done well Everything Else has not. It has actually hurt some barbie sales. I think that is why disney chooses to be a licensor. You are taking some risk off the table. You are leaving some money on the table but you are also able to get a more steady business from that. Parents are scrambling for the elsa dress. Jon erlichman knows what it is like. I know. Im the father of two girls, so the insanity has taken over my home. Is not the only thing disney is celebrating. Today is the 25th anniversary of its famous world park. Its a small world. It is 56 minutes past the hour, which means Bloomberg Television is on the markets. Im cristina alesci. Lets get you caught up on where stocks are trading, another down day on wall street after rallying on dead minutes yesterday, the s p and dow are trading lower by less than one percent. The tech heavy nasdaq is once again hit the hardest, down by more than 1. 5 . We more on market volatility have been seeing not just this week but this year, adam johnson has todays insight and action. Real message to the market right now, protect yourself. Time for some insight and action. It is on the market is reacting to news that should be positive. Good news, right . But we are not trading that way. If u. S. Listen jobless claim since may 2007. That should be cause for buying the market but we are selling. John ipo market as the number of deals is up 180 over last year. Maybe that is the problem, too much supply. You would guess that that is a suggestion is a good market. Dovish fed signaling low rates for longer. User all good headlines but look what is happening to the markets. Is, chris says that you can see this anomaly in the data. Looked at me percentage the percentage of stocks that are up on higher volume in the s p 500, and it is way three percent. Only 23 of the stocks that were up yesterday were up on higher volume. That means there is no bread. It is too narrow. That is a problem. You want to think about buying some puts. Admittedly, when i priced these a couple of hours ago, the market was higher. Spysple hours ago, the were trading at 187. That is a cost of 1. 5 . 4. 20. E now trading at that illustrates the point. The dow is down 150 points and all of a sudden these go from 28 0 to 85 in a couple of hours . Time likect you in a this. It helps you sleep at night. Thanks, adam. We want to take a look at a couple of the big movers in todays session. Rite aid. Shares of the drugstore chain are certain to the highest level in more than a decade. The Company Forecast 2014 sales that topped estimates. They also announced that it acquired redi clinic, a Retail Clinic with 30 locations nationwide. And shares of bed bath and beyond are falling the most in three months. They posted firstquarter per forecast that trailed estimates. Bank of america downgraded their shares from neutral to buy on the news. And to commodities, oil futures are falling on we chinese economic data, but are still trading well above the 100 a barrel. Natural gas is trading at a onemonth high. Smallerentory increase than estimates. Gold is trading at a two week i. The precious metal is rallying after the fed showed a dovish rate outlook yesterday. On the markets again in 30 minutes. Live from pier three in san francisco, welcome to bloomberg west where we cover innovation, technology and the future of business. Im emily chang. Icahn settle their battle over paypal. The dropbox ceo says his company is entering a new phase what he calls chapter two. Check on her Bloomberg Top tech headlines. Facebook is discontinuing the messenger