Hollywood gold. Find out how it is all done. But first, headlines. From my radio cohost carol massar. Carol . Thank you. Fourth quarter earnings rose beating analysts estimates. Shares are soaring in the after hours trading for netflix. You just mentioned carl icahn. Are sent ofred. 8 ebay and is moving to of his employees to join the board. Paypal shares jumped in extended those are of the x his stakes. All right, we mentioned carl icahns stake in ebay. Trish regan spoke with him. And she is joining me now. A short time ago. We chattedn and about ebay. He wants to see them spin off paypal. Its not aay terribly new idea. People have talked in the past about paypal being an opportunity for ebay as it goes forward. This is the first time you have the likes of carl icahn sending a letter to the board saying, i think you need to do this. The boards response has been to not spin it off. He was also critical, or slightly critical, of management there. He did say that the management at apple, tim cook is doing a great job. I dont know if the same can be said of ebay. We can share some of this now from that interview. First of all, me asking why ebay . A listen. We have done a lot of work on ebay and we believe without question it is a nobrainer that paypal should be spun off. He has done a lot of work on it. I just want to say, maybe give a little background about carl icahn as the representative in this case. Apple, dell, herbalife. This goes all the way back to a corporatetwa as raider. Yes, he has quite a history being an activist and being incredibly successful at it. He has had the steps two. Clorox did not work out all that well. But he has mostly wins. He can throw his weight around. This is a guy, if you get that call thats right. Its interesting. The haines ceo, he said the day he got that call, he picked up the phone. His assistant said carl icahn is on the phone for you ergo on the phone for you, you thought it was a joke. Its no joke. Its your Worst Nightmare to get that call. He has been active and he is very public and what he does. He uses twitter to communicate to the various he isies of which invested sometimes. He is now on twitter. That happened in the last year. He did suite the news about , saying he was upping his stake. He had what, half 1 billion added over the last week or so . Pushing for 50 billion in buyback. On bloomberg tv, he said that he likes management. That it is the board that is the problem. He is not fond of management over at ebay. You spoke to him i think he made the case that there should be a different Compensation Structure for paypal versus ebay . Differente really two businesses. Obviously, there is the difference in shareholder values. He thinks that it could get bonded. I asked him where it would ago, and he wouldnt answer that question. But lets share with you folks a little bit more from the interview with carl. Theres no reason they should be together at this point, in our opinion. In fact, i think it would be helped by the Management Team that is separate and can go the wrong way. I think the multiple would go up dramatically. Also the health of the company would be better. Ok, he wants a different Management Team at paypal. And he thinks that is what will deliver value. I want to bring in cory johnson. He has been following the story. Corey. Ways speak to all right, cory johnson. What is the reaction so far from ebay and how bad is ebay really doing . What were the results today . They did not show the steady, consistent growth weve seen from ebay, but there were pockets. Theres a lot of testament in this quarter. In analyst to is a big fan of bloomberg west, on with us all the time. You said that the polling compared to amazon show the ebay was going to be a lot weaker, that they were losing some steam. Indeed the quarter came in with strong growth. The thing that jumped out at me was the paypal business, just as carl icahn noted. Businesses looking very strong. It could get a different kind of multiple on wall street. Its also interesting as was reported just an hour ago, they are really showing an. Ccelerated growth from 1. 4volume is up on the previous year. Also 18 growth. Thats more than me growth of the last quarter. Why is that important . Because it means it is a reacceleration of growth. So, its about an increase in the multiple. You split the two businesses and the faster growing business get the and you can see why management is not necessarily like that idea at first glance. A good thats probably point. You want to be in a business thats growing. Businessperceived your is the failed one and you are left behind not going with paypal, you can imagine there would be pushed back there. I i was going to say, cory, can look in our past as someone named sam gannon who worked at the Citgo Pacific belt. It could be the same kind of thing. Faster growth indeed, but the best move overall. The company is poised for a very. Nteresting growth rate we did a full day of bloomberg west at ebay. I thought that would be my gotcha question. We see a slightly better growth rate with paypal. We see a difference in the infrastructure is not just in the u. S. , but also worldwide. Takel is positioned to advantage of that. Its interesting. However, his son and his sons partner still have a derivatives stake in the company. He has been active in apple, now in ebay. These are very public companies. Nother good example herbalife. What you think of him getting into the tech space like this . To me, this is like a discussion of Warren Buffett not being involved in tech or is he involved in tech . We are in an era right now are we see recent names from the last bubble, big names for ebay or google coming even going further back into apple, and they trend into kind valuation that are not representative of the growth rate. Look, the growth rate of some of these Countries Companies come up high doubledigit growth. Earningshe price growth ratio. To look at an company that also has the lbo korver b o greater attitude to break up the company and be involved with a discounted stock like ebay when he looked to price to earnings growth, you can understand. It does not matter if it is tech. Its a financial opportunity. Is it for analyst to figure out what is going on with the company. I want to bring in Jon Erlichman to talk about netflix. They reported their earnings as well. This is a Business Model that says if you are one of 33 million subscribers you pay eight bucks a month, soon to be a tiered pricing structure. Theyup with netflix . Are testing that. Netflix had a big quarter. Rallied after hours when they came out with better than expected results. Netflix, ink about this way, here is a great laugh form, but wouldnt it be better look at this . T its costly for them to do this will out. Wouldnt it be better to do that with a larger Media Company . Netflix has shown the ability to continue to grow. Now they are talking about having 40 million subscribers in the first quarter, which would be more than 30 growth over a oneyear stretch. Thats big gross for a company that is big and growing. Thats big growth for a company that is big and growing. For the world we are living in right now, the world of the active investor, this positive spin we are seeing, and active is sort of a good thing. Will tell you all about this. This is an opportunity to represent the smaller shareholder and give them a voice. We have really seen this rise. It may be in part because the activists are working with the big Pension Funds to get things accomplished. Andhing, i found, pimm, you know the story very well, jon, he came out and said someone needed to get carl icahn involved. I laughed and said he will be the white knight for ralph nader. It really speaks to how people are looking to activists to throw their weight around. Maybe they will make a movie out of it and it will be on netflix. Thank you, and trish regan. Thank you very much, Jon Erlichman. And our editoratlarge, cory johnson, in san francisco. Coming up, bitcoin pushes his luck in las vegas. What makes casinos different than others . They accept bitcoin. That is next. This is taking stock on bloomberg. I am pimm fox. Breaking news. Berkshire anhaway is said to face investigation on systemic risk. Bearish on bitcoin. 47 of respondents say to sell the online currency. 11 said by, and 35 have no idea. My next guest has an idea. He is bullish on that on bitcoin. Takeasino and hotels now bitcoin. You with us. O have explain a little bit how you can use bitcoin in a casino. Well, good afternoon. For us, we are going to do this for both hotels and our restaurants and our gift shop. Up and todayirst is opening day. Can you describe what the steps are if someone walks into one of your restaurants and tries to pay the bill and says here is my bitcoin . No problem. You will out your electronic wallet, it matches up with the system we have. That way you can complete it really quickly and very efficiently. How long ago did you plan to take this . Really for us, but the golden are locatedas vegas in downtown las vegas. For what we noticed, more customers were walking in and frankly they were asking do you take bitcoin . The frequency was much lower year ago. Six months ago it started sticking up and it has been almost a daily occurrence. To looknt team decided into what it would take to be able to accept bitcoin, and really it was not all that difficult. So, we really could not find a reason why not to take it. Derek, is it different from using a credit card . In some ways is actually easier. The transaction is efficient. We use a qr code off of an onto an ipadphone in the transaction is done in a couple seconds. How do you then monetize that payment . Y as oure bitpa processor. Were not taking any valuation risk the cause we are converting to u. S. Dollars immediately after the transaction. As part of that conversion, do you have to report that transaction . Is that an electronic ink transfer that has to go anywhere . The way the transaction works, it is converted to u. S. Dollars and in our system we converted to a normal sale. Its similar to a cash transaction or credit card transaction. Tax or rooml sales tax all caps paid in a regular course of business areas course of business. Derek, are there any financial benefits to taking bitcoin . Does it just cost less . For us, it is transaction fee free. There is a modest transaction fee when you convert back to dollars, but the fees are far less than credit card fees. So, there is an advantage from that sense. Thealso the advantage of fact that revenues are going up. All right, want to thank you very much. Thank you. The derekfrom stevens, from the Golden Gate Hotel in casino and las vegas. I will talk to an Academy Award winning snow maker on the big business of making flakes. Brooklyn real estate. Booming. Yes. Homes were up for the Third Quarter at a median sales price 570,000 dollars. It is the highest level in 11 by recordkeeping firms. Rents are also rising in brooklyn. Here to discuss this real estate the man behind the edge property on the waterfront. Jeffrey, thank you for being here. Much appreciated. I want to start out with a little bit of your history. Youre from brooklyn originally. He moved to queens. You move to queens. Now youre headquartered in brooklyn. Tell us about the company. In development as we graduated from doing construction for others to participating in Development Deals and then taking over the developments ourselves. I went to city college at night. I graduated from the new York City School system. Very proud of that. I started working with the agencies in new york. With very little capital, we were able to do larger and larger projects. Experience in growth in expandreas enabled us to into new market areas and we continue to do a blend of affordable and market rate development. We had the opportunity to do our relationships with various agencies to construct affordable and new homes in brooklyn, essentially in the area of williamsburg. Having been there on a dayto day basis, having been from parts of brooklyn myself and have experience to the growth, i saw the opportunity. We entered into the partnership with a gentleman who owns a swath of land on the waterfront off kit avenue, just two short blocks from trent. That, we worked with the city to do the rezoning, which involved the creation of significant units of affordable housing. The first it was major project that started the recognition of williamsburg is a residential community, although the hipsters knew about it. We let the rest of the world know. We look forward to having more detail. You have to spend more time with us in the future. I want to thank you very much. Jeffrey levine. We did not even get to do housing, assisted living housing, all the real estate projects you have been involved in. You must have something with trains. Oh, exactly. We are doing that in west chelsea. We are pursuing another great opportunity. Thank you very much. All right. Coming up, plenty of snow on the east coast, so where do americans go if they want fake flakes . My next guest. Set both this is taking stock on bloomberg. For todays headlines, i want to go right now to su keenan. Thank you. Shares of coach bill the most in three months. This is the biggest luxury handbag maker. They reported a 14 decline in sales in north america for the second order. They cited competition during the holiday season. Many retailers at promotions to cut into profits. Most in six the months, the maker of two way radios and other equipment missed analysts estimates. Analysts cited concerns over the Growth Strategy of motorola mobility, now owned by google. And after a record snowfall, the northeast is digging itself out. It caused multiple delays all over the east coast. In new york, temperatures tonight are expected to drop to seven degrees. Back to you. Thank you very much, su keenan. Not the rainmaker, the snow maker. My next guest has made a business out of making fake flakes for more than a quarter century. He has created flakes for movies such as planes, trains, and fargo. Es, he won an Academy Award for it in 1995. Fromr sturm joins us now chicago. Great to have you with us. We do not need any brandnew snow, but how does someone get into the business of making fake snow . A specialeffects company by trade. Im a special effects coordinator. My Business Partner is my wife. We have a Company Called sturms we do allfects, and the liveaction specialeffects. Including environmental, mechanical, pyrotechnic. Everyone in the Business Insight with a specialty. We kind of fell into the snow making category in the 1980s. Chicago guy for retired, and we were working under him at the time. Everybody started coming to us. What makes your snow so special . What makes it better for movies than Mother Nature . Control. Ll about we have the opportunity to place the snow where we want it. When weake it where and meet its. Mother nature, as you well know, is pretty unpredictable, and a you thinkes when youre going to have snow, she does not come through. We are standing by to make sure that is happening. Even mean the wintertime. That means spring, summer, and fall also. Does the snow you make feel different than the snow that drops from the sky . We have 25 different materials we use for snow. For example . We built aium truck call the snow maker truck. Chip ice at the rate of 100 pounds a minute. It comes bursting out of this hose. Snow is frozen particles of ice. When it is extremely warm and we need to hold it for maybe a couple days, we use Something Like a high expansion snowfall in. There are many different techniques and materials we use. Situation andthe the circumstances. A snowball machine. That must be fun to operate. Sometimes you have to be hit in the face with a snowball. You want the lightest and fluffiest type of snow so when ,ou get plastered in the head it is soft. It is not an ice ball. How about using snow in the movies . For example, fargo. That was an interesting movie. Probably about half that picture is manmade snow. We were up in minnesota. It was one of those winters where it was not cooperating too well. Winter up and down streets, fields, and parking lots. Even the top of the Airport Parking lot. Five acres on the top of those parking lots that had to be covered in snow. We had to pump water, take snow guns, sit up all night braving the elements to get the snow lion. The crew shows up at 7 00 in the morning and everything is ready to go. The whispers snow truck, is that part of the arsenal . Yes. I think we use 10 or 12 firehoses that night because the temperature dropped 10 or 12 below. We were making good snow, but the water was not walk rate into well. Cooperating too well when the ground. T to the the academy of arts and sciences, when they want to make snow, i imagine they call you, because you got an oscar. What did you do for that . The only thing we had were materials for snow with things like styrofoam, plastic, things that just were not really great for the environment. So, there was a time in the early 1990s where we said, lets experiment in see if we can come up with something that is truly environmentally safe, something biodegradable. That dissolves over time. At thatup with bio snow time and that changed the whole direction of the industry, being much more conscious about what we put out there in the environment. Is it fun to make snow . Standpoint ofthe making real snow, realize. For three weeks when we were doing the Robert Redford movie hoe course was per the withinsperer, and three weeks, we went through six trucks of ice. It can get costly on larger motion pictures. But then, we work a lot of time tv commercials or still photography or even testing for a corporation where it does not cost that much. If you want to do something with the snow making capacity you want to do something called flex. Lacks snow what is that . Its an exciting new ebony in the united states. It is teaming up with Engineering Developments in the u. K. We are the exclusive sales and marketing for it in the united states. We are building yearround ski resorts. We have one operating in lynchburg, virginia right now. How do you do this . This is using the new High Performance serpas synthetic technology. It is called snowflex. On the ski and snowboard surface just like you would be replicating snow. It is not snow though, but the same characteristics exist. You can funride on snowflex. They are doing. Editions with rail jams and big air that mimic what you see in the x games. You must like snow. I love snow. During the 65 days a year im in snow. Think you very much, dieter sturm, sturms special effects International President joining us from chicago. Jim been making more headlines today. We will have some insight on the world of whiskey from a young lady who knows one of the top experts in the world of spirits. This is taking stock on bloomberg. First we reported from Bloomberg News that Berkshire Hathaway and regulators regulators will be scrutinizing Warren Buffetts company. Here to tell us more about this detail, our reporter from washington, d. C. What is this all about . Scrutiny over Berkshire Hathaway. Is it specific to Berkshire Hathaway . It is specific to Berkshire Hathaway. What regulators are looking at is the Financial Stability oversight council. It was set up after dodd frank to prevent another financial crisis. It is led by the treasury secretary jack lew. They look at companies that could potentially be a risk to the broader Financial System if they were to fail. Mean that they think berkshire is in trouble or anything like that. The part of berkshire they are looking at for the time being is the reinsurance operation. The Financial Stability board, which is that International Group easton switzerland, they are going to be based in switzerland, they are going to be looking at companies that are a risk for the global Financial System in july. That,ant to get ahead of the council here in washington. They want to get ahead of that, and not be caught having not done their homework. So, ian, if we are to understand, this scrutiny is taking place because they can do it rather than the cause of any specific instance or any allegation or any specific thing related to Berkshire Hathaway . They could do this to all of these large Financial Institutions . Absolutely. The firms named as systemically important so far are aig, ge capital, and prudential financial. They are notthat, saying they think those companies are in trouble. What they are saying is, these companies are so big, so interconnected to the rest of the Financial System, basically so tied into the broader Financial System that if they were to fail, it could be bad news for the broader Financial System. Like when aig went down and lehman went down. Thank you very much, ian katz reporting from washington, and ec santorini recently agreed to buy the whiskey giants beam. Some suggest the takeover is unpatriotic. Hereto joining us with here to join us with more on this, heather greene. Alesci, a bit of a whiskey aficionado as well, right . Absolutely. So talk about this takeover. Bourbon, which is really jim beams iconic liquor w is an umbrella term. When we talk about american whiskey, probably the most important popular right now are bourbon and ride. Have wonderfulam whiskeys they have been making for about seven generations now. A day after the deal was announced that there was an upper on social media. Why . Just because they can . Willey think that anything really change . Can you only make bourbon in a specific area . To be called bourbon it must he made in the united states, made with 51 corn, aged in american barrels, a whole bunch of parameters to call it bourbon. We do not have to worry about it leaving american shores. But i a lot of people were concerned about that. A little about that. And also education about what w is. But nothing will really change in the production of this whiskey . No change. And they are no strangers to making whiskey. They have been making whiskey since 1994. They have been doing it for long time and they do it well. And dont Japanese Companies have a long pedigree of making excellent, highquality whiskey . Suppose they do. There is another brewery they do. There is another paris, miy agiko. They do not have as much exposure in the united states. Is starting to fly off the shelves. When i went to get one of the Suntory Products for todays gone. It was they are starting to fly out the shelves as people recognize how delicious they are. And whiskeys, they are allocated. , they cannotl out you wantll be turning to whiskey. She can definitely convert you. Is japanese whiskey production any different from the u. S. Methodology . The japanese method is similar to the way that scotches made. An umbrella term. There are different types of whiskey. There is scotch whiskey. Type of scotch whiskey is single malt scotch. Zaki in particular has been studying the art of scotch whiskey making and bring that back to japan. They will continue to refine that process. Did they approach it differently though then say the traditional whiskey or scotch makers we think of . There is a slightly different approach. I was in japan about two months ago. I visited one of the distilleries there. They are different from the where ihiskey industry, worked for a long time. The philosophy in japan is about refinement, as i said. It meansly continuously fixing or changing or improving all the time. 12 today may not taste the way it does in 10 years. Scotch is not made that way. You do not want to mess with tradition. Which is fine, too. They are not going to change. You have written about the fact that there is a certain type of new york are drawn to whiskey. Right now it seems like that. Is that the geeks . I think i would call it the chic geeks. I guess for the lack of a better sm is really cool. How much would you spend for japanese whiskey . How much . About 70. All right. Appreciate it. Heather greene. In charge of whiskey education at the flatiron room. Aficionado whiskey cristina alesci. I like that title. 2, Peyton Manning is hoping for a super bowl win. Will another ring translate into a rise in the value of manning memorabilia . We will find out, next. All right, two ways to get hold of a super bowl ring. A super bowl ring. The Seattle Seahawks and the Denver Broncos will both try to do that. Guest,could call my next who has items of value depending on the outcome of the game. David, great to see you. Ring, i alwayshe think of the ring is the thing you get if you win the super bowl. Thats right. It should be 20,000, 30,000. Where does this ring come from . People who receive it from the team. Differenty have reasons for what they value in their collection what they dont. Sometimes it is the ring. All right, that is the ring. What time is the option . It is literally Live Saturday next weekend. Saturday before the game. What about jerseys . You can buy it at this Online Auction . Jerseysroceeds from the coming right from the players andused game used, the nice enough about this, the collectors really go after it. Charity. E, it is bert number two, they come right off the field. Theres no question about authenticity. The manning is already up to about 13,005 hundred dollars. For a used Football Jersey . Thats right. And its not even clean . Thats right. They love it. Its enjoyable. We see the fans come out every year. They see if they can outbid each other. On the field, you need a helmet. How much are moments . Autographs, game used, authenticity, very important. This should be about a 300, 400 item. Have some expensive things. There are a lot of things that are 200, three and her dollars, four hundred dollars as well. There is also an official game going. I did not know that there was a game point. The nfl will keep the items from last years super bowl. This is the official flip coin that millions of people watched and they did last year. This is the actual frame. To 4000. Be 2000 and you bring everybody good luck, right . It depends on what team youre rooting for. To thosek forward results. Thanks you very much. David hunt, the president of hunt auctions. Thanks for taking stock. I am pimm fox. Coming up next, bloomberg west for all things technology. Live from pier 3 in san francisco, welcome to the late edition of bloomberg west, where we cover the Global Technology and Media Companies that are reshaping our world. Im emily chang. Our focus is on innovation, technology, and the future of business. Lets get straight to the rundown. Newest targetis is ebay. The activist investor has taken a stake in the company, less than 1 . He is calling for ebay to spin off paypal into a completely separate company. He joined us on Bloomberg Television just a ce
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