Google doesnt want employees talking about politics, but federal regulators that you can prevent that. , we talked to two innovators changing the fertility and baby tech industries. But first, our top story. The Trump Administration is considering a new tactic in its trade war with china that would be a limited trade deal. On the u. S. Side, that would be delaying or rolling back tariffs, and in return, commitments from beijing on ip and agricultural purchases. ,o discuss, is Sarah Mcgregor covering all things trade war for us. The markets on thursday seem to like the idea of a limited trade deal. What does it involve . Mark one of the biggest breakthroughs in the impasse since may when the two sides had a deal in the u. S. Accused china that reneging on those agreements. The u. S. Would stop the escalation or rollback tariffs if china agrees to some fundamental reforms on ip, buying more u. S. Farming goods. ,his could meet chinas needs because their number one demand is the u. S. Rollback these tariffs, stop the escalation, and get rid of the tariffs. Would get. S. Side, it ha some of those things it has been asking for, ip theft and narrowing that trade deficit. This is a big if. We have midlevel talks next week, and that could pave the way for senior level talks in early october. Taylor you mentioned ip theft, what other conversations about the tech sector are they having . Areh the tariffs predicated on the ip theft question. Tariffs int these place because it identified this ip theft as a National Security risk. That is meant to protect u. S. Tech companies, but u. S. Tech companies are now caught up in the tariffs. Hitdecember 15 tariffs will major apple products with the iphone and other products, so there is a give and take on this. The tariffs have been predicated on helping u. S. Tech companies, at the same time they have been caught up in this with tariffs on products they are bringing in from china so i think Everyone Wants to see a resolution to the trade war and away for the u. S. And china to get back to business without this threat hanging over them. Taylor we got a trump tweet yesterday about delaying the trade tariffs from october 1 to october 15. What did that signal . Sarah trump has delayed tariffs before on chinese goods, then went ahead and gone through with them. We have heard Peter Navarro and Steven Mnuchin say today that this delay is really about the politics in china. The u. S. Out of respect for china does not want to hit tariffs on october 1 symbolically, so they are waiting for october 15, but it opens a window for these u. S. China talks to take place. The head china negotiator is supposed to come to washington meet with Robert Lighthizer and Steven Mnuchin and, so it leaves a window for a deal to potentially avert those tariffs altogether, so there are a lot of balls in the air. Taylor Steven Mnuchin is saying huawei is not a pawn in the trade talks. Can we say that for sure, or is that clearly a separate National Security issue . Sarah trump brought it up himself when he met xi jinping last. He promised to get through the licensinggh despite remaining on this blacklist, but those have not come through. We have hed tied to how trade talks are going with the willingness or nonwillingness to get the special licenses, so it is hard not to interlink those two issues at this point. They are not an official part of trade talks. We would not expected to be addressed as part of the trade deal, but it is part of the relationship between the two nations, and definitely an irritant at this point. Taylor a dcussion that will continue. That was Sarah Mcgregor. Thank you. I want to look at a company impacted by the trade war, specifically broadcom, which just reported thirdquarter results. It says even though it did beat analyst estimates on earnings per share it reiterated the bearish annual forecast to three months ago. Shares were slipping and post market trading. Joining me on the phone is jim mcgregor, a principal analyst at one research firm. Give me your high look at broadcom and how it fits into the trade war. They did come out with earnings, any broad thoughts you can give to me . It is ironic. They have been hit on two aspects. One, the proposed acquisition of qualcomm last year that was blocked over National Security concerns, but now they are getting hit because they self a significant amount around the andd to chinese vendors, with that chinese door being shut in chinese vendors told to look elsewhere for parts, that is impacting him greatly, especially huawei. They sell almost 1 billion to huawei. Taylor is it correct to fold broadcom and huawei into trade, or should they be separate National Security issues . Jim they should be considered part of the trade issue. Industrye electronics is a global ecosystem. Companies have developed that system over decades. I can think of a single u. S. Or european or western company that does not have facilities, engineers, people located in other countries, including china, taiwan, india, other places. It is the same with a lot of Chinese Companies with locations around the world. It is a major issue, these wars, a major issue for every hightech company right now. It impacts their ability to trade with partners, but do business amongst themselves or operate their business with having entities around the world. To show her i want tv audience what we are looking at. I want you to look at this chart inside the bloomberg terminal. We are looking at the price of broadcom, then wall streets price reaction. They downgraded that stock in price target in june when the company cut its annual forecast, so i wonder as you look at the company, is the worst behind it, or do they still have a lot of headwinds ahead of him . Theem . M . Jim they definitely have a lot of tradewinds. Not just because of the trade war, but they have been through this massive wave of acquisition after acquisition, so it has been hard to get a baseline on that company. I think we are trying to find out what that baseline is, but they are facing this same headwinds that every other Semiconductor Company is facing, the fact they are losing market share in china, and we may be pulled into recession for the industry and overall economy because of the trade war. Taylor jim, within your broad analysis of the tech sector, chipmakers, how is sentiment . Do you see Companies Pulling back from tech spending funded back from tech spending funded global uncertainty . Jim absolutely, especially in the enterprise. Every time you get a hint of recession, i. T. Personnel start pulling those funds back and delay those purchase and acquisitions based on what the outlook of the business is. With fear of an Overall Economic recession or slowing of the economy, that is causing concern among buyers, so we are definitely saying and you will see that by the end of the , so with consumers as well it is pushing our industry toward slower growth, if not if weve growth into 2020, dont see a turnaround in the trade war. Taylor hey smart recap on broadcom and all things around the chipmakers, jim mcgregor, thank you for joining me. Meanwhile, google will pay 1. 1 billion to settle two investigations. The company has faced years of outrage over the small amount of tax it paid in europe. When case is a french criminal probe into fiscal fraud allegations, while the other concerns back taxes. Google acknowledged the facts, but did not plead guilty. Coming up, the tech ipo roller and others make their way towards the public markets, but should they expect yft same things as uber and . This is bloomberg. Of peloton cofounder went from kickstarter to the verge of a 450 million fortune. The Company Started making its exercise bicycle after raising 307,000 in a 2013 crowdfunding campaign. Now he is hoping to raise 1. 1 billion in pelotons longawaited ipo. Peloton is not the only tech ipo we are watching, cloudflare is expected to price shares as it seeks to raise 490 million in its ipo. Investors will be watching the Companies Trading debut in new york on friday as another indicator for other Tech Companies in the pipeline. Meanwhile, anxiety continues to offeringnd weworks among a plummeting valuation. Joining me now is our guest. Clearly a lot to digest. I wanted to start with cloudflare. What do you make of the fact they are looking to boost the price range . Truly amazing. We have been reporting they boosted the pricing from 12 to 14. We had a lot more optimistic sentiment two days ago among these ipos. That boosted their pricing did well. Taylor talk to me about peloton. What is the tone . Sonali two days ago, everything was ok. Market, theoing to nasdaq was up. Hasthem to fall so much cast a cloud over a lot of these listings about to happen because investors want to see a stronger bottom line. Revenue growth is not enough, and you have had ceos and investment banks saying so, which is something we are hearing for the first time this year. Taylor what changed . , aali Investor Sentiment lot of people are saying they want to invest in stocks that are big and steady, value stocks , instead of growth stocks. Cloud is over everything now, and people are looking for company showing stronger revenue growth, stronger bottom line, and governance they feel comfortable with. People are worried about the overall environment and are starting to at some point get more cautious on what they are investing in. Cautious, talk about but you were talking about how the nasdaq was higher. We saw another ipo, smiledirectclub. Sonali they ended up down more than 25 , which is something we have not seen since 2008, a company that priced above its range and then went to market and dropped in the first day of trading. You had uber drop in the first day of trading, but it priced at the lower end of the range. We are waiting for cloudflares pricing tonight, whether it is in a range that they have already increased, that doesnt indicate they would trade well tomorrow, which is scary for investors. Taylor another thing scary for investors is all about wework. What happened . Sonali we will see if they kick off this roadshow monday. Bloomberg has been reporting the valuation could be as low as 15 billion. Earlier this year, Goldman Sachs were thinking it could be worth 65 billion, which is over the 47 billion in valuation earlier this year. We are watching valuation go down. Softbank is considering more private capital injected into this term to help it turn around so it can go public in a way that would be more pleasing to investors, but that is still up in the air and it is yet to see how they will get this ipo done. Taylor there is news that wework is considering changes, including removing the founders wife from their succession plan. Is that enough . Sonali they still have the voting shares which gives them 20 times more power than other investors. It depends on how they change their Corporate Governance. It will be a big deal for how investors view the stock. If softbank takes a bigger stake in the firm, what interests me here is they have a bigger stake than newman, so who controls the company, softbank or adam newman . The wife stepping back is one thing, but there are other Corporate Governance challenges they are facing in trying to clear up before an ipo. Atlor finally, if you look the landscape of ipos, who is to blame . The bankers come of the companys lack of profitability, the market . Blame theople like to banks for pricing to high. Institutional investors like the pop. D. C. Investors like it to be stable. This is a tough one. These ipos traded well, traded up, but now in the blink of an eye it is not working for them anymore, so we will see. Taylor we will. Thank you for joining me. Coming up, we look at how wall street reacted to the sudden announcement of oracles ceo taking a leave of absence. That is next. This is bloomberg. Taylor lets continue our coverage of oracles new power structure. The company struggled for more than a year about whether to disclose mark hurds illness. Oracle announced he would take a leave of absence for healthrelated reasons. The person who shares the chief executive role with mark hurd assured that it could work. Mark was extremely engaged with the business through the end of the quarter, but now he needs to focus on his health and taking care of himself. As the three of us have always worked as a team on managing , larry and i will cover marks responsibilities during his absence with support from the rest of our strong management team. Joined to discuss, im by the person who covers all things oracle for us. Quite wait so long . Oracle fought mark hurds health was a private matter. Larry ellison was Close Friends with steve jobs and him through the end of his life, never had any problem that was discernible as steve jobs did not disclose his Health Condition or severity , and oracle thought because it had such a deep leadership bench ceos in an executive chairman, they thought it would be sufficient. The company has not been known to be the most transparent and has always had a question of Corporate Governance because Larry Ellison is the largest shareholder in the company has premuch disclosed what it wants to. Analysts youhave have been speaking to been saying when you should be disclosing Something Like this . Nico there is a range of perspectives among analysts. One said this is a private matter. I certainly hope it is not true, off the record, they knew that something was up with mark hurd s health. In some said this is not a Transparent Company in the first place. They should let investors know so that they have the right to make a decision on how important this. Everyone agrees that mark hurd as one of two ceos is not the most consequential at oracle, and Larry Ellison come if he had been facing a similar condition, it might be more conseential for the fortunes of the company. Taylor like you mentioned, Larry Ellison, so talk to me about that deep leadership bench , which is why they were insulated from this given how many people can be in charge there. Nico you have these three people from all fascinating with different back stories. They set up the structure five years ago in 2014, and mark hurd has been with the company for nine years this month, and the idea is mark hurd, this consummate salesman, could oversee the Sales Organization from a marketing, a few Business Units organization, marketing, a few Business Units, backoffice things, legal, finance, human resources, and Larry Ellison overseas product and technology, so the idea is leveraging the strength of these three people, but over the last year they have made some changes , in that Larry Ellison took ofy mark hurds oversight the Marketing Department and put that under his own control, having his own chief of staff, as well as an outsider he brought in, manage a lot of marketing oracles efforts when he thought the brand image was languishing. Taylor outside the leadership change, the basic fundamentals of the company, where do they go next . How do their earnings and nets quarter look to you . Next quarters earnings look to you . Nico oracle made themselves a superpower in the technology industry, the worlds secondlargest software maker, by having on premise software. What we saw in this quarter is what we have seen in many others, when it comes to Certain Applications running on the cloud, the growth rates are healthy and in double digits. When it comes to hardware that they make some servers. That is shrinking, and this huge base of support they have had, that has been stagnant, so the company will have to accelerate its new database products. Taylor like you said, the cloud is all the rage, have to keep pushing towards that. Coming up, regulating big tech workplaces. Google and amazon getting an ear full from washington lawmakers on how they treat their workers. That is next. This is bloomberg. Im all about my bed. This mattress is dangerously comfortable. When i get in, i literally say ah. Experience deeper rest with the awardwinning leesa mattress. This bed hugs my body. Im now a morning person. 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Alistair google, this has been a longrunning thing for about two years, and i find it super interesting, personally, because company it isthe partly by letting employees all the way down the organization speak up and say things. That way, ideas bubble up and some of the great inventions google has made is because employees are allowed to talk. In the last year or so, that has spread into