The worlds Biggest Social Network collecting information from its users. Car affect the Auto Industry . Now to the league. You do have to take into account low Trading Volume in the u. S. The trend is still clear with Technology Stocks failing to join this risk on mood. Winning a sevenmonth streak. Isnt a longterm trend for technology . Lets ask our guests hop posts today. I will start with james. Now is at a record today. Nasdaq is lower. Volatility is low. I will quickly show you a chart i got on the bloomberg if you type in btv 859, volatility has continue to elevate itself within the stock market. James, what does this mean . James it is interesting that tech is up 16 this year versus the Broader Group of 8 . This is a situation where replicating the performance in the second half is difficult. At the same time, you can break it down into smaller components, tech continues to be doing better than it was in historical highvalue. The times during bubbles is also lower. You can make a fundamental argument that the next move is up. Our clients continue to remain long and strong. I do think you have to think about the operating of this new paradigm of the digital world. The antitrust risks and things of that nature and what is happening in europe. Are these Companies Getting to bake . Too big . G that does add another element. Tooline it is a good time invest in the market when you see evaluations coming down . Always been that is the case with technology is you have it inflated from the public markets. Uber and the like have state private first long as they have. You can be insulated from what is happening in the public markets. At least from what i do, in the early stages of investing, and other stage investors were largely inflated from what is happening. What we care about our am opportunities and how much cash these companies have to acquire Smaller Companies coming through the pipeline. Caroline does that bode well . Eileen yes it does. Look at how much cash outside of the United States for investors in london and europe, outside the United States. Not beencash has repatriated yet they can be used for m a. Caroline james, what about the outlook and what isnt happening and what is coming out of the market for the hope for tax changes to be happening anytime soon . Believes that the new administration brought in has been slowed. Has that been affecting things . James absolutely. When you think about the regulatory progress we were expecting to see, it wouldve been a lot more than what we have seen. 39 bills or something to that effect. At the end of the day, the big agenda items have not passed including health care and tax reform. He talked about the potential repatriation if that will happen, a lot of . Question marks, it does open up the opportunity for a lot of m a. We will learn a lot here from amazon whole foods as we rest of the year on how the sec is going theseapproaching megadeals and putting the cash to work. Caroline that is interesting. James is talking about u. S. Companies buying u. S. Companies. But talk about coming to europe. We saw a Payment Service provider eating bought out by a u. S. Private equity. Will that be affected in europe . European regulators are taking a more active dan regardless of where companies are based. I dont think that will give companies Smaller Companies outside of the United States any greater protection. I think we are seeing a lot more productivity from regulators across the board. Caroline do you expect choices at times like this when we have valuations potentially not spilling into the private market. Has that changed in the 2017 period . Eileen what people are starting to avoid are capital intensive businesses where Customer Acquisition is expensive. The only ones really attracting financing have already taken out the backf and are in stages. Youre seeing more dollars going into delivery companies. It is all a cycle. Youre seeing a lot of money going to deeper tech, research and development, artificial intelligence, machine learning, even Autonomous Vehicles to the extent that there is underlying ip. For a while we were not seeing that. Wherene james, that is the seed money is going and where a lot of Big Companies that you focus on are focusing on at the moment as well. Apple, facebook i know you cover facebook, and amazon is always deep within ai as well. Kenny tells about those Companies Like ebay . Where are your clients particularly worried about . James our clients are not that worried. The thing you have to think about is networking. As these Companies Get bigger, the services get better. The user experiences get better and better. The bigger the company, the better it is for you and me in terms of the services. Think about amazon. Caroline the regulators do not always think that. I reallyat is why focus on the regulatory angle. When you look at europe, the regulations there are about how do i approach promote competition . Might not align with the end user. In the u. S. It is all about the enduser. If it gets better for me and you, i think the rules have to change. That is why im anxious to see how the fcc caroline react. We will be looking at more regulatory decisions in a moment area and your viewpoint, is a continuing ofthe facebook, apple, the u. S. Juggernauts because they might be putting money to work for the European Companies that we are seeing come through the ranks and starting to get m a . Outlines . Eileen to the extent these companies are trying to build their services, they are trying to improve enduser experience. A genuinetors have interest in promoting regulation. They believe competing services generally force it to offer better services. That is intense, it might not be practically true today, but that is the goal. To what youre saying, there are a couple things. We would like to see continued m a up activity, but we would like to see them start to list and become behemoths of them all. We would like to expand the acronym a bit and build. One company was acquired by google early on but already has 2040 engineers. Artificialleading Intelligence Center in london and the world at the time. If we could see Something Like that continue to progress, i think it will be a better force for everybody. It probably does improve services. Caroline we will be digging much more into the ipo landscape later on. You are both syncing with me for the entire hour. Now a story we are watching. According to multiple reports, Technology Funds is in talks to acquire a stake in a u. K. Delivery start up. It would launch a new funding round. That is less than a year after it raised 210 million pounds. It was thought to be valued at more than a billion dollars. The 93 billion Softbank Vision Fund have backers like apple, qualcomm, andy and Saudi Arabian wealth fund. Facebook might be the next target for european regulators. What is next as the eu continues to put on the pressure . We are Live Streaming on twitter. Check us out weekdays at 5 00 p. M. In new york. This is bloomberg. Caroline the parent of google says a European Commission antitrust fine will cut secondquarter profit by 2. 7 billion dollars. It will charge of the full omar im out net income. They were fined last week for using their market dominance and shopping results. Facebook could be the next target for european antitrust why stocks. Examiningoffices whether facebook takes advantage of its popularity by pushing users into agreeing to terms and conditions they might not understand. York,g us for you new james and eileen, they cover facebook. Others at their point of view. Alastair, lets pick up things with you. Has germany looking into them saying they are more bullying when it comes to certain things. Alastair this takes the google charts to a whole New Territory in europe. Important a lot more in europe, especially to regulators. There are a lot more rules and regulations in that region than in the u. S. This really combines antitrust and privacy in the one charge. If youly they are saying want to get on a social network, facebook is your only choice in the western world. Ist dominance over data basically forcing anyone who wants to do that to sign up to all of these terms and conditions. James, here it commences. Sometimes scale and size is good for the consumer. Sometimes here it seems as though the german antitrust it isities are feeling too pushy. This investigation was announced back in march. Does it mean anything to the company from your perspective . James at this point what is happening, anything can go right now. Toy just find google, who is say they wont back down on facebook . At the same time you are hearing her encourage other companies to sue google. Anything can happen with facebook as well. It is interesting to go after the privacy angle. , it is tough to say it is a wildcard out there. Caroline eileen, when youre looking at it from here in london, this is a German Antitrust Authority looking at facebook. We also see other commissions looking at google and telling people to start suing it. Matter, but dot they change their way of doing business . Eileen im not sure that the monetary values of these finds make a difference. The one goal of the regulator is to signal. It signals to the rest of the market that there is a watchdog, somebody that is paying attention. That theres somebody trying to preserve competition and trying to preserve user privacy and benefits for consumers. A lot of this is perception. 2 billion, 3 billion, 20 billion, what will really make a dent in naked company carries arbitrary. That the industry and the sector knows that small up,anies trying to come dont think that you cant compete, dont think that there is not a level Playing Field or that it can be relevel even later. Caroline alastair, talk to us about how the tech giants are dealing with the European Commission and the German Antitrust Authority. That this isstand about increasing competition . Alastair they feel like they are being targeted. The facebook case in particular in the u. S. Some people realder it to be a overstretch. Taking an antitrust argument and is quiteit to privacy a large leak. Side, there is an era of regular resignation with the company. Consideringthey are an appeal. The comments they put out this time versus a year ago were a lot less combative. Is a bit ofe resignation when it comes to more pure antitrust cases like the one about google shopping. Caroline james, i want to get your. On looking at potential value cases for these companies. The facebookowed antitrust investigation, the senate you worry about the price target for these companies . We put a noteek out on google saying this is overreach. I agree with the privacy even more so with facebook. I always joke around saying if you dont like the privacy rules, dont accept them, but then you cant use the services. That is what we do here all the time. Ultimately, what i am most is i will worry we see in action from the United States. If we are in a position where we see a pattern of going after and trying to change the way these companies do business. With absolutely no recourse or any response from the United States government for that. At that point i will start to caroline you think that the european regulators are completely overstepping the mark . Tore is no reason to try level the sorts of accusations that facebook and google . James i think they are picking the wrong battles. You can make the case that all of these companies have done something wrong at some point or another. What they are trying to win with the vertical search and with Google Google has done a lot yelp when they scraped content and used it as a row ist is a lot worse than it what the eu regulators are going after. It would affect my ratings and target. ,s of now, i agree with eileen it is more a signal than anything else. Caroline always about picking battles. Alistair, thank you for joining us from san francisco. James joining us in new york. And eileen joining me in the studio. Coming up, teslas model three will stop production after it passed regulatory requirements ahead of schedule. Can it keep up with ambitious manufacturing plants through the years . This is bloomberg. Caroline spacex scraps its latest lunch. It was killed with less than 10 seconds to go before last up. The computer automatically stopped because something in the Guidance System was off. The private but he been ramping up its launch schedule. This wouldve been the third rocket that the Company Launched in less than two. To tesla, we are sticking with elon musk. Model announced the three will begin production on friday passing requirements two weeks ahead of schedule. The beginning of the ramp up where tesla expect to make 500,000 vehicles in 2018 and one million in 2020 as it pushes into the mainstream. Now joined by dana, a Bloomberg News reporter who covers tesla. First of all, talk to us about this announcement. Model threes were meant to be rolling off by july, is this sooner than we thought . Dana slightly sooner. What he said in the tweet last night was that the first vehicle should be rolling up their production line this friday. There will be a handover event on july 28 for the first 30 customers. That is good news for customers, investors, and the many fans have been eagerly awaiting details of what july would hold. Caroline im looking at the bloomberg chart. Quite amazing how much we continue to see a ramp up in mac market apple is nation versus gm and ford who had their numbers out today for june sales. He 7t out at that billion in terms of Market Capitalization. Can they live up to this when they have such a hefty ramp up and production being built into this . Dana it will be interesting. They are supposed to release secondquarter sales today. That number could hit at any moment. I will be curious to see how their sales are. Ofot of the Market Capital tesla is based on the future of this company as it hits the mainstream and expands beyond cars to solar roofs and Energy Storage devices. Really making good on its promise to accelerate the transition to sustainable energy. Caroline lets look at this chart again. Btv 6161. You will see the white line is how much higher we are starting. The yellow is gm terry ford is in the blue. I want to get eileens take as an investor. Do you have the belief system to think this is a company that can achieve that . Eileen if i was investor, absolutely. Chart makes more sense to me than uber, which is also zippers surpassed the market cap and does not have any asset value. They made 70 million companies. Uber does not own any vehicles and does not have any production. It has nothing in terms of assets. I can see where tesla, the future value of Energy Conservation and what we are going to see with efficiency. I can see that that makes sense. People like the design, they are efficient the, the storage, seven seater cars in the body size where cars of traditionally been five cedars. Theres lot of future value built into the stock. Youre someone who tweets to elon musk and report on him. How crucial is the model three. How is it being interpreted by the market because elon musk felt it had not been accepted by the market in the way he wanted it to be . Dana the model three was teslas hold goal for being here they wanted to bring unAffordable Electric car to the main stream. On Affordable Electric car to the mainstream. This is the reason for the company to be. The model three is make or break. They have to be able to sell cars. They have to be able to make cars and so cars at high sellings high volumes. Caroline we will see if they can live up to the high volumes and the high profits. Great reporting. Eileen is sticking with us in london. Coming up, amazons deal to acquire whole foods is shaking up the grocery market. What sector will the tech giant disrupt next . This is bloomberg. Caroline whether you are looking to buy the next tesla or a less tech savvy vehicle, it is a debt laden business owning a car. 107 million americans carry auto loan debt. One car sharing platform is creating its own osborne earl ecosystem. Car owners are not only renting out their vehicles to help finance their rights but incentivizing some owners to invest in more car, and higher quality. I love porsche. I have five. Caroline this man owns 11 vehicles from porsche is to jaguars and alfa romeos. He uses this car sharing app, the airbnb for cars. I started in 2013 with the honda accord. I purchased that car specifically to rent out to test out car sharing models. It was really successful. Do it. Ed, why not so ive been adding cars to my fleet ever since. Caroline according to two row, if they have three cars, the owner can make 3000 or month. The vehicles do not have to be high and sports cars. The demand went off the charts. Caroline this woman joined four years ago with her 2002 crv. She has since purchased two additional vehicles to rent out. It is not my intention to run a car rental business, it just happened. O, acts as the middlemen. They take care of the marketing and back and support. Insurance is also the key thing that they take care of. Caroline car sharing will not be a true game share game changer. But still they predict 35 Million People worldwide will use this service by 2021. That is up from signaling users in 2015. It has become far more popular in europe and asia than in north america. If the car is rented out, more than 50 of the month, it is time to get another car. It is trying to meet the demand for highend vehicles. You see why i want to trade up. Caroline this is daybreak australia. Bloomberg technology. Amazons decision to acquire Whole Foods Market took many by surprise. Guess which market amazon will disrupt next. Amazon is encroaching into the territory of restaurants. Andentire prepared food delivery market, doubling up on the grocery opportunity. Theree an analyst with us a partner at passion capital. Talk us through your report. It is a fascinating one. You think this is a 1. 5 trillion opportunity for amazon. James, james the thing is, there is no way that my thinking s in line with jeff bezos thinking. He is probably several steps ahead. About how they could leverage the whole foods infrastructure. Here i couple things we know the Restaurant Business is an 800 billion industry. Over 20 ood sales is in china versus 2 in the u. S. The margins are right for the taken in terms of prepared food. A think we could be in situation where amazon could leverage their data and analytics and predict the type of taste preferences on the palate of each individual markets, leverage the infrastructure of whole foods to act as a commissary, the margins, and then deliver Celebrity Chefs tied in dishes for five dollars a pop for prime members. It could potentially open up a whole new array of Food Services beyond delivery and grocery. Caroline wow. Eileen, you were just talking about it not being the time to go into the food delivery company, even though it might be looking at delivery hero which is had an ipo. Do you see this sort of potential for the restaurant chains themselves . Eileen absolutely, i completely agree with james. That are other categories amazon might go into for brick and mortar stores, i do not think it will end with food. As james was saying, it was all about the infrastructure, logistics, and supply chain. There are a lot of other categories where amazon can go retail and bricks and mortar. So i predominantly tech, am less than an idealist and less visionary than james and jeff bezos, but i think about what was done on the back end of everything, not just logistics for good whether they are Food Products or otherwise, but everything they have done for storage and everything else. To be a business already into the billions a year. There is a lot they could do even on the back. Caroline james comer when you look at amazon, do you see the potential if price target can stand on the company . Talk about the restaurant area and some of the other sectors that amazon can disrupt. We are neutral, im not taking a position. Overhang that we talked about. The erratically, you can easily highercase to move 50 from here based on where the numbers are. Then you have theoretical margins on the Research Side as well. However, you do have that overhang. As far as the next avenues that they can pursue the on food, i think health care, personal Care Products that is right for the taking. That is another massive industry. Think about all the personal Care Products that you have. Beings partially fulfilled on amazon, but it could be taking to a whole another level. You can see how many ratings remain on amazon and have you sell ratings there are. There price continues to escalate as we see and ease in price targets just slightly. Monthyou can see the 12 price target showing up on the bloomberg. The yellow line is where the price has been. This selloff is just chasing amazon slightly. We are still not seeing many sales coming from this. Worry withregular amazon, or do you think there continuing to grow . Eileen given everything we have seen, they are going to be in the eyes of what the regulators are looking at. It is obvious, they have so much consumer data, so much transactional data, they are getting into drone delivery, there will be privacy issues. There is a lot of fruit there looks. Ulatory the regulators are doing this to try to pick any battle to bring companies down, there will be a lot of material there for them. Caroline fascinating conversation. It is wonderful to dig into your report. Court ordered a freeze on 1. 2 billion yuan belonging to three affiliates belonging to on internet giant. They handed down the ruling after a china merchant back branch applied for an order on june 26. The freeze took effect june 29 and will last three years. The shen on news agency did not see why that bank requested the action. They have not made any immediate comment. No call representative was available. Coming up, there has been a slew of tech ideas in 2017. At the u. S. Market returns to form, we take a look at how they are faring and measure the outlook for the next Tech Startups waiting to take the plunge. This is bloomberg. Caroline toshiba is looking to its Energy Metering companies to raise cash. The Japanese Company is considering a swiss ipo by the in the september. It is one of several assets toshiba has up for sale. It is trying to make up for the multibilliondollar losses at the Westinghouse Nuclear power unit. Speaking of ideas, initial Public Offering parents offerings are almost up in the u. S. Was within 96 , almost doubling. The news comes on the heels of blue aprons lackluster trading to view last week and the more Successful Listing of delivery hero on the frankfurt stock exchange. What does this spell for the ipo outlook for the rest of the year . I want to start with the European Investor and the european take. Delivery hero did go well, a big sigh of release relief in germany. When you are looking at these figures, does that make you curious about more offerings from companies, and where are we likely to see them coming, and he particular sectors . I linktone it does give me a lot of encouragement. Seen itn as we have does give me encouragement. I think when companies have gone public, they have already been through extra rigor because there is not been enthusiasm that we have seen in the states. Thoughtance, even numbers were down in listings last year, we had cybersecurity, fin tech offerings that were more resilient. I do think it bodes well. I do think we will see a lot more coming from financial services. There will be other sectors. , but weuch ecommerce will start to see other sectors that will come into the public markets. Caroline james, your take from the slightly more meager blue apron . Has that shaken the rest of the ipo market or do they look across the pond and see how it is very in germany and think Blake Griffin is just a little off blue apron is a little off . James i do agree that there are many sectors Like Software that are more conducive to ipos. We were below where we were a couple of years ago. The industries that are hard, like the one eileen was mentioning, those will be facing greater and greater scrutiny. Is ifill really be a test you look into it, are they going to go direct . Is the game going to change . These are things we do not know yet. Caroline eileen, talk about the game changer. Snap change the game in terms of getting all power with the ceo. Then we saw spotify coming to the market. What are you seeing from companies coming through and how they are altering . Eileen what is interesting is generation of companies and it probably started with google and zuckerberg with facebook. What we are seeing is there is a huge appetite from the market for really solid Tech Companies that have fundamentals that people are willing to concede. They want to get value in those businesses. I dont know if spotify can pull it off. Comes to market, they are starting to look at underwriters, they will probably do something that gives them an incentive to list. We are seeing over and other companies, otherwise they will raise money on private markets. I think control is going to be a big thing. Liquidity options, preference rights. But also how much information rights they might have to yield, how much they might have to disclose, prelisting and post listing. There are other regulatory rules, whether they have to be as transparent. Maybe they do a few tweaks and shared social media without having to digest hundreds of pages of disclosures. Caroline how hard is that make your job . You had to sift through snap before its rating. What do you see when you look at the roles of the Game Changing and how hard does it make it to value these companies . A private company, i would not want to go public. It is not easy, but at the end of the day, i dont have to analyze companies that are private. Anecdotes and information flow in order to better assess the public companies. That comes from relationships and so forth. It does not change my life all that much. Caroline are you looking for dropbox this year . Can you give us any names that you think will be coming to the u. S. Market . James redfin is looking to come into the market. There could be some others. The one im keeping my eye on the most is spotify. Caroline we will see what that means for the rest of the European Tech sector as well. Both of the analysts are sticking with me. Coming up, instagrams latest partnership is bringing breathing new life into the idea of social shopping. Can it learn from facebook and twitter missteps. Bloomberg tv tomorrow, at 8 00 for eastern time, tune in the boston pop firework spectacular. This is bloomberg. Announced plans to sell directly on instagram. Retail luxury and Beauty Brands have salivated about selling over addicted millennials. So far nobody has gotten it right. Can instagram be the game changer for social shopping. I want to get your take on this, eileen. Youre someone that analyzes those coming to you seeking funding. Could this change the way in which you buy nike . Instagram did not give us that much detail on how it would work work, but assume it would be smooth. Eileen this is interested interesting, their whole goal is the sales directly from consumers. They are experimenting. Im not sure thats theres that much detail about how they will do this. I have not seen a clean technical or product integration to do this. They have a lot of work to do. It could be experimentation, which instagram can afford to do because they are part of facebook. Caroline where is the path for this . You know they wanted to get into ecommerce trade and wanted to see social media purchases flourish . James i can tell you from talking to payment companies, they are very bullish at opportunities at instagram. Who are the guys to look out for that will be powering this . James it is a prime example of a company that partners with the most mobile assets in the world. I am neutral on facebook. Ultimately, i do think this is more about experimentation from what we are seeing. Keep your friends close and your enemies closer. These companies do wield a lot of power. In order to keep tabs on amazon and what is happening. I would not read into it too much just yet because my understanding from facebook is that banks are still progressing extremely methodically. Therefore, eileen, you are a woman who looks at finn tech. You will be powering these sorts of companies. Area that is looking . Attractive to you . Eileen we are very bullish on that. We have invested in the company here in london. It is not too dissimilar to strike. All of these companies have a lot of growth potential. They are the companies that power all of these transactions. A threat for them comes not from banks or existing institution, but from alibaba, and the fact that facebook and apple have their own payments, youre seeing it come from the tech sector. But that is why i see an opportunity for new companies to emerge from that. Caroline will we see the likes of facebook and amazon . Eileen i think it is less likely they will buy payment platforms, more likely they will buy regulated activities from some of these companies that have achieved that. That has been difficult for Big Companies to do. Buying up internet platforms makes a lot of sense for companies that do not already have that. Maybe on ic or platform or Delivery Service that does not have its own and wants to redo its spending and cost side. Caroline james, you saw ebay split from paypal. He likely to see facebook potentially look to be building its own Payment System itself. They certainly seem to be cozying up to Financial Technology companies here in london. James i dont think so. I think they will stick to what they said. If you want to bring this back. Go to the beginning. Is enablinge doing Subscription Services for the publishers in order to extend an olive branch. At the same time they allow the subscription side, they will be collecting payment data. Then he has a whole privacy issues around what they do with that data as well. They have to tread lightly here. We have so much we could be talking about from a regulatory perspective, from a payment perspective. It is been wonderful to have you, james with us. Eileen, wonderful to have you joining me in london. Thank you very much indeed. Great discussions from you both. That does it for this edition of bloomberg technology. On wednesdayn after the Independence Day holiday in the United States. Twitter ataming on 5 00 p. M. In new york. That is all for now. If you are in the u. S. , we wish you a wonderful holiday for july 4. This is bloomberg. A mixed session for wall street. The tech selloff continues. The dollar strengthens on renewed optimism. Betty oil is extending its longest winning streak of the year. U. S. Drillers cutting rates for the first time in 24 weeks. Suvs and trucks give auto sales some hopes. We are not likely to reach last years record numbers. Betty china