Election and has not reached a conclusion. That is according to the Committee Chair and the vice chair. They also warn tougher measures needed to be taken ahead of the 2018 election. White house budget director mick they also warn tougher measures mulvaney says there will not be a federal bailout for puerto rico, even after President Trump mentioned wiping out that red ink as part of hurricane recovery. Mulvaney says the administration will send congress a disaster aid package. Global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Im alisa parenti. This is bloomberg. Bloomberg technology is next. Cory im cory johnson. This is bloomberg technology. Coming up, facebook, twitter, and google all under the spotlight as the Senate Continues to probe russias influence in the election. What changes could be underway for tech giants. Plus, google unveiling a Second Generation of its most popular devices along with new gadgets, but can they catch up to apple . And sonos, a speaker company, rolls out a voicecontrolled device. First to our lede, members of the Senate IntelligenceCommittee Said they will not be releasing russian financed ads turned over to them by facebook. They issued a stark warning as well. The russian measures did not end on election day, 2016. They were not only geared at the United States of america. We have seen russian measures take place in france. We have seen concerns raised in the netherlands. Weve seen concerns raised in germany. And we need to be on guard. Cory senator warner also stressed three changes that he wants to see when it comes to social media political ads and stories. Disclose if the ads come from foreign backers. Know if bots are the cause for stories. Find a place for the ads to live so they can be reviewed later. Kevin cirilli, so good to have you on the show. This is fascinating stuff. Fascinating as it is, its disturbing. Kevin it is. I think, quite frankly, that that press conference i just got back from the capital. That press conference, really, i think is sending a signal to Silicon Valley that this is just the beginning. Senator mark warner, the top democrat on the committee, went so far as to call on facebook to release those ads. The Committee Chairman, senator richard burr, a republican said, quoteunquote, were fine with them doing it, when asked pointblank if he believed they should release the ads. The only reason the committee is not releasing the ads is out of respect of precedent for those who hand over documents and give interviews, classified interviews to the committee. But the signal coming out of this committee, from this press conference, is, get ready, Silicon Valley, because google, facebook, and twitter are all going to be have been invited and will likely now all testify on november 1. Facebook saying they will be participating in that panel. Cory its remarkable to me also that how focused these efforts were, how technologically savvy these Russian Hackers or emissaries of Russian Hackers were in their ability to target use the very latest in Advertising Technology and get these things out there to have an effect on the u. S. Electorate. Kevin 700 increase in digital social media ads from 2012 two o 2016. Those numbers only expected increase ahead of the 2020 cycle. Two points that i would make. First and foremost, i remember on the campaign trail, every time an ad was released, you had to know who was paying for it. The notion that these ads can be published on social media sites and no one has knows who is pushing for them raises a lot of questions. We wouldnt accept these ads on billboards on interstates. The second point i would raise just quickly is that Vladimir Putins propaganda arm, rt, was essentially bundled into an advertising package for youtube. These are the types of questions that not just democrats are asking, but also republicans. Quite frankly, big social Media Companies are at a turning point right now. They have spent decades trying to craft a perception of being transparent. Now is the test. Cory finally, a final question, its interesting that you got Robert Mueller in his probe looking at connections between the Trump White House and russian groups, including Paul Manafort and rt Michael Flynn and rt, i should say. At the same time, youve got congress trying to understand the technology, what was happening in Northern California with the fake ads and fake news and and so on. Kevin absolutely. Aside from the social media angle and these big social Media Companies angle, i can tell you the investigation is very much ongoing. The president s personal attorney will be testifying toward the end of october, october 25 or 26. Theyve had nine months for this investigation. They said, quoteunquote, theyve hit a wall with this dossier, the controversial document from the former mi6 officer. He has not agreed to testify. Public pressure trying to urge them to quarry. Cory great stuff, kevin. Kevin cirilli in washington, d. C. We appreciate your time. Coming up later in the hour, we will talk about some of the developments in the russia probe with one of the members of the house intelligence committee, michael quigley. The European Union slapped amazon with an order to pay 294 million plus interest in back taxes to luxembourg. This is the latest in the eu pushing back on the sweetheart tax deal that it claims tilts the balance in favor of a few select big businesses. The eu announcing it is suing ireland for failing to recover a single penny of last years record 15 billion tax fine on apple. Coming up, a bloomberg exclusive. Shopify shares sent tumbling today after it was called a getrichquick scheme. This is bloomberg. Cory the notorious short seller andrew left has a new target, shopify. Shares fell bigtime wednesday after his Citron Research firm issued a stinging rebuke to the company, calling it a, quote, getrichquick scheme. He called it dirtier than herbalife. He spoke with our own julie hyman in an exclusive interview. Andrew a provider of Ecommerce Solutions to small and mediumsize businesses. Shopify says it has 500,000 businesses. 2500 are big merchants probably really enjoying the platform, to give them credit. Lets say another 25,000 are shopify advance. Who are the other 470,000 shopify users . That is what has never been discussed on wall street beforehand. As i show and i proved, these are people who have bought into become a millionaire at home, get rich quick, and promises that completely violate every ftc rule imaginable. Its all in the report. The correlations and the parallels to herbalife. Its amazing that this has gone on. Julie when you talk about these ftc rules they are violating, what specifically because you allege illegality in your report, what law is the Company Breaking with its practices, allegedly . Andrew the Business Opportunities act. They are not providing websites to stores. They are telling people, you can be an entrepreneur. Second of all, they are making claims that they cant back up. With herbalife, they had distributors who were making bold claims. With shopify, on the shopify website itself, are you ready to be a millionaire, how many millionaires were created today, a sample Resignation Letter to give to your boss once you make enough money on shopify to quit. Just amazing that this would be an 11 billion company. These are all ftcbased violations. Lastly, shopify is able to support this business through what they call their partner program. These partners are bloggers, influencers, and they are compensated by shopify. Its not disclosed anywhere. That also is a major ftc violation. So, its not just one, its many. Julie lets take that last point first, because i spoke to an analyst today who likened that practice to a practice of a lot of sort of Online Retail companies or companies that are trying to sell a product and have various spokespeople or celebrities who are posting on instagram and what have you, who dont necessarily disclose their financial relationships. How is this different from Something Like that . Andrew you have to disclose. You have to. The ftc has very clear rules about bloggers, about instagrammers. Its very clear. Its funny. If a celebrity goes on and says, you know, i endorse this line of clothing or shoes, and they dont disclose it on the bottom, even though they should and they are required to, you could say, whats the harm involved . When a blogger writes how they can make 10,000 just sitting at home and its not true whatsoever and you dont know they are being compensated by the company, there is a problem there. For this analyst to say, well, other people are breaking the law, they can break the law, that means nothing. Julie what about disclosure . What if the company removes this line you are talking about on the website . As you yourself say, it has 2500 core customers that may be a ccount for the biggest chunk of its revenue. About half of its revenue, after all, comes from a percentage of what its customers tell. Sell. Andrew fair enough. Julie theres real stuff being sold here. Andrew out of 500,000 customers, lets say they have 50,000, lets say they have 100,000 you are looking at a company that is trading over 20 times sales. After snapchat, this is the most expensive stock on that per revenue basis. If i took this stock and gave it the same multiple that a salesforce these are topoftheline companies, the best of the best. This stock gets cut in half, shopify. Were not talking about dont forget, when people complained about herbalife, i think it was an 8 billion company doing 500 billion in net income. This is an 11 billion company that loses money trading at over 20 times sales that also is marketing illegally. Julie ok. Another difference with herbalife, i would say, is that this company these people are not selling shopify products. They still have to come up with their own business plan. Andrew no. Shopify, actually, and this is in the report you can make money on shopify by just referring people to shopify. Thats affiliate marketing. Its not multilevel marketing. You can also make money on shopify by writing blogs about shopify. Theres many ways. Herbalife the only difference is you are not selling their own products. Julie but at the end of the day, most of their revenue in other words, how much are they paying out to these people . Andrew this is even better, which is even crazier. So, 50 of their revenue are subscription fees. Its still trading at over 20 times sales. Julie did you short this going into you coming out with this report . At what point do you close out the short . The stock is down sharply today. Andrew im still short the stock, and i will stay short the stock. Every analyst can come out i dont care what youre going to say. This stock is illegal and expensive. They have heavy competition. This has a lot more way to go on the downside. Cory i love andrew left. Thats andrew left, founder of citron, with our own julie hyman. Shopify declined to comment on his claims. We are talking vr next. This is bloomberg. Cory as we get closer and closer to the holidays, we see product launches. Google has unveiled a new pixel xl2 smartphone and a new pixel mini speaker and a new laptop. Google is continuing to push its hardware line. Emily chang sat down with the head of vr and asked about what else vr. Two things we announced today, one is an update to a product we announced last year, which makes all the things people loved about it better. You can see more in virtual reality. Its all about taking you places, letting you experience things like you are there. Also on the new pixel 2 phone, we announced it has been optimized for augmented reality. Weve made the optimization so the camera and the sensors, so that when you place digital objects into the world around you using augmented reality, they appear more realistically there. Emily thats one great example. Why is google interested in this across all of the various products . Clay well, if you look at some of our core products, search, maps, tools and education, we see augmented reality really enhancing and extending what we can do in each of those areas. We talked about the idea of holding your phone up and having it tell you what youre looking at. In Something Like maps or navigation, i think weve all experienced getting out of the cab or the subway and you look at the blue dot and you end up walking the runway. With augmented reality, more precise mapping, your phone will be able to overlay steps on the sidewalk taking you in the right direction. An area im excited about, education. Weve seen huge promise in both virtual and augmented reality to help students connect more with whatever they are learning about. Augmented reality, for example, can bring a scale model of the roman coliseum or a tornado into the classroom and let a whole classroom of Students Walk around it as if it is there. Emily in many ways, this hasnt gone as mainstream as some people thought it would. Do you think it was overhyped . Clay i think there is a lot of excitement around it. With any new promising technology, people tend to overestimate the impact in the do you think it was overhyped . Shortterm and perhaps underestimate the impact in the longterm. I think we are right in the middle of that right now. Emily do you think the same thing could happen with ar, that it could be overhyped and take longer to come to real reality than some people think . Clay i believe unequivocally in the potential for augmented reality, but, yes, in the near term, people may look at it, wow, and assume that everything will play out over the next 12 months. A lot of us, developers, users, Companies Like google we are going to be learning about how best to apply it in the near term and, on the other side of that, building more of the applications and underlying services, like mapping for augmented reality. Its only on the other side of that that you will really see real engagement and strong use. Cory that was bloombergs emily chang with that exclusive interview. Mark bergen attended the google event earlier, covers google quite well for us, id say. I hope your bosses say the same thing, mark. This is an interesting business for google to be in, because they are competing with giant Companies Like apple that are so good at Consumer Products and google obviously is not good at Consumer Products, as we can see from sales. Why do they persist in doing this . Mark its a twohour hardware event where they barely talked about hardware. They did unleash a fair amount of new products and talked about the capabilities, but the one theme they kept hitting on was we have googles ai here and we have the best software and services. As clay was mentioning, augmented reality is a good example. Google has a huge advantage. They have been working on this tech for a long time. Something that apple has been pushing in, and the way apple is advancing as a world in which the iphone can use augmented Reality Software and google has no touch point with the consumer. To push ahead these reference devices to show the world and consumers that google is leading on the software. Cory are they also showing other manufacturers what you can do with google software, so that their device doesnt have to win for google to end up there are more android phones out there than iphones still, because the software is free to the phone companies phone makers, i should say. Mark the pixel is a delicate handset. Why google started the pixel line is because they were frustrated with android that it wasnt moving in the direction they wanted it to move. They have things like camera capabilities for augmented reality, the voice assistant. This is a reference design where they can show android, look, this is what we think the best google is. Clearly, there are stronger handset makers that dont need to rely on google as much. Google, i think, with amazon, they are clearly seeing a threat to the home with devices that hit right at their core of search. Cory i guess what im sort of getting at is, is the Business Model here fundamentally different . Cory not to insult usa today, who say that they are slugging it out with apple it couldnt be more different. Mark its a smaller fraction of the market and an even smaller fraction of googles business. Analysts are excited about it, as the world is moving more towards echo devices, home voice computing, computing with gestures, this is a space where google needs to be they are looking ahead to see if they are being paranoid. They see a world where their core youtube, their play services, their maps need to adjust to the new computing services. Cory thank you very much, mark bergen, who covers google for us at bloomberg news. You can check it out on bloomberg. Com or on the bloomberg. Com or on the bloomberg terminal, which i strongly advise. Coming up, representative mike quigley, will give us his thoughts on the probe and russian interference in the 2016 election and technologys role in that interference. Listen to the Bloomberg Radio app. This is bloomberg. It is 11 29 a. M. I am paul allen. Trumps proposal to a race puerto ricos debt has been erase puertohis ricos debt has been rejected. Saysreasury secretary puerto rico will run out of cash on october 31. The number of Chinese Tourists visiting macau and the first four days are down. Overall numbers down 22 . Of 92. 5 Million People visited the city through october 4. Oftheresa may has apologized to supporters for di