Productions. We will break down all the numbers for you. And microsoft stopped making phones years ago and now its back with a new model that will run on googles android system. Is now the time to get back into the slowing Global Smartphone market . But first, to our top story. On monday, wework pulled the plug on its ipo, at least temporarily. The new coceos of the Office Space Company say they want to focus on the core business before going public, which they still plan to do sometime in the future. Wework has been burning through cash and now plan thousands of job cuts. Kurt wagner spoke to an analyst and bloombergs alan hewitt, who covers the company. It is official. The ipo will be put on hold. So they said this morning theyre going to be pulling it, that confirms a lot of the reporting we have had in the last week or two which is that the ipo is unlikely to happen in 2019, likely to be pushed until next year. So theyre going to be spending the next few months with these show walls, trying to street, we are going to cut back on expenses, we are making changes at the company, it is no longer a company with this wide variety of businesses alongside its main core business, which is renting out office space. Kurtz is there any one specific moment you think gave the officials there the idea that they should pull back on this plan . Ellen i think it seemed pretty clear from the time last tuesday when adam neumann, the ceo and cofounder steps down, that there was going to be a lot of changes at the company. All of a sudden you have two new leaders. People who were both wework insiders but also had experience at other Large Companies outside taking over and immediately i observers, including myself, were thinking how are they actually going to continue forward with their plan as they had said earlier to finish the ipo in 2019. There is just so much to get done, there has been such a change at the company, and they were already talking from the first day of new leadership about difficult decisions that they were going to have to make in order for the company to go forward. So i think we were not surprised to see that theyre putting an official pause as they called it on their plans. Kurt dan, i want to bring you in here. I know that obviously there were some other elements of the ipo, there was some credit financing, for example, that was going to come when the ipo happened. Can you give us a sense of where weworks financials are right now . I am sure the Company Needs some money. What is the business like . Dan right now, this has been a black eye obviously for wework, as well as the ipo market really putting up a white flag, showing investors arent going to buy some of the business left ear valuations, but it really hits on cash burn profitability. They have to go back from a financing perspective to next steps here, it is the fork in the road situation. You talked about the thing, they first have to cut costs, invest some of the pieces and really put this car back in the body shop until it comes out maybe healthier for an ipo later this year into next year, you think about best case 2020. Kurtz i know that kurt i know that softbank is obviously heavily involved in this company right now. Dan, can you give us a sense of what their involvement might be moving forward . I know there is talk of maybe them providing some of that capital to wework, what is softbanks role going to be . Out, they havenn to roll up their sleeves and a hands on deck, in terms of just not the financing piece, but the business operations. Especially when you look at a lot of employees who joined the wework ipo with some of the calm perspectives and now are at least temporarily off the table, theyre really going to make sure that the house is in order, look at the Business Model and really right now what ambassadors are saying, you started seeing it with uber and lyft and wework and others, pellet gun peloton, its about profitability. There needs to be a path to profitability as risk starts to come off in this market and its a fork in the road situation for ipos. Beyond the zooms, the meats, but wework continues to be the poster child for what ultimately is investors saying no more in terms of these Business Models that lack profitability, at least the path. Kurt ellen, dan mentioned path to profitability. You mentioned tough decisions that need to be made. What actually happens next at wework . Ellen yeah, so we reported on some of the things they started to do, notably, a symbolic gesture more than anything else, the new ceo says the Company Wants to help sell the 60 jetion gulfstream company they bought last year to help adam neumann fly around and do travel with his job. That obviously got a lot of headlines, 60 million, they need more than that to keep going. They have also discussed selling several side businesses they acquired in the last few years that includes meet up, managed by q, and conductor and there are also talks about job cuts. As we reported, the company will probably cut maybe in the thousands of jobs, they currently have about 12,000 or 12,500 employees, so pretty serious. So i think theyre looking around to see where they can make changes and well have to see if that comes in different parts of the business or maybe also some trimming in the Main Business as well. Kurt you mentioned job cuts, what does this do for morale . I mean, you have employees who, just a few weeks ago, they were seeing a big payday on the horizon and all of a sudden the ceo is gone and their jobs may be on the line. What is the morale in the company, how do you move past Something Like this if you were if you are wework . Ellen yeah, i have talked to a couple of people who are still there. Obviously its tough times. You cant imagine how difficult it is to know that there are going to be these things going ahead at your company and not knowing exactly where or going through the change over the last six months. As you said, they really thought that the company was going full speed ahead to an ipo. I think for a lot of employees, theyre reassessing how much they think their stock is worth, theyre worried about their job. They are concerned about what might go forward. I think its going to be really difficult and i feel for them. Kurt yeah. Dan, one more for you, what does it mean for the broader ipo market right now . You see wework have these kind of struggles. Is this a signal for other companies thinking about ipoing, what do you take away from this from a big picture standpoint . Dan big picture, it has been a black eye, no doubt, for the broader market. I think it also shows that the companies with the strong Business Models, profitability with a secular trend, there is an appetite for those names, but the ones more frothier that continue to have sort of issues, profitability, issues with financial models investors in , this market, those are not names going to get through. Evaluations that are not down around from when they went private. So this is a shot across the bow from wall street to the valley, especially on the private side saying, look, were not going to take some of those private valuations and were going to command valuations that we feel comfortable with. So i think this was, ultimately, i think a line in the sand was drawn here with wework. And i think we are going to see the ramifications for months and maybe years to come. Taylor that was wedbush analyst dan ives and bloombergs ellen huet with our own kurt wagner. Coming up, tesla misses the mark. Third quarter deliveries of set a record of 97,000, but its not enough for investors. We will have details. And if you like bloomberg news, check us out on the radio. You can listen on the bloomberg app, bloomberg. Com, and in the u. S. On sirius xm. This is bloomberg. Taylor tesla news dominated the week as elon musks 100,000 delivery goal went unmet. They reported 97,000 deliveries in the Third Quarter on wednesday. Earlier this week, analysts 100,000d the car delivery goal put forward by musk may have been talk to divert attention from a less flattering trend, falling revenue. I was joined by a guest, and from detroit, david welch. It is a record for them, but not a record by much. Then you had musk saying they could probably get to 100,000 vehicles if they pushed. I do wonder if he would have said anything if shares have reacted better. I think the other more alarming thing for investors is the fact that most of the vehicles being sold are now lowerpriced, lower margin model threes, and you are starting to see a lot less take on the model s and model x, which are the really expensive vehicles. The question for the investors is ok, where are the profits going to be coming from if you are selling these smaller, vehicles . Ower margin taylor gene, what is your take on the 97,000 number . Gene taylor, it is a great number. I am in that camp that it would be perceived better if not for that friday emailed. There are two topics here what are is going going on with the fundamentals of tesla, and what is going on with communications intesa. Elon musk continues to say things that are not good for the stock. In this case, and separately, if we look at the fundamentals, the most important is the fact that they got a record. The 97,000, to put that in context, it puts them loosely on track to hit the low end of a range of 360,000400,000 vehicles for the year. When they originally came out without range, investors said it is a near absurdity that they would do that. But they are tracking toward that lowend. So i think it is, despite the mix of the greater model 3s, is model 3s generally consistent with the mix in the june quarter. My simple read is i think that this is a sign that the demand question, which is no longer about production, this is a demand question that continues to be answered. And it seems the u. S. , and parts of europe are ready for evs. Gene, what is your take on what david welch was mentioning, that they are sacrificing price for the sake of market share, selling the lowerpriced vehicles . Gene my view it is true, that is a fad, but my view is the sweet spot of electrification is going to be in the lower cost, lower margin vehicles. And it is still 2 of vehicles in the u. S. So i think that even though that is at a high level, that is not a good trade from highermargin to lowermargin, but the size of the market is so massive that i that the real sweet spot is the scurve. I think this is the right thing for the company, to continue to aggressively pursue that part of the market. Taylor david, how is demand in china . David there is Strong Demand in china relative to other markets for electric vehicles, and the government certainly helps that with a lot of basically make manufacturers sell these vehicles for certain credit systems. And there are a lot of incentives to buy them. In certain cities, you cannot get a new registration for a vehicle unless it is some kind of plugin car. So there is good demand in china. To genes point, and it was a good one, to get scale they will have to sell a lot of model 3s, a lot of lowerpriced vehicles, and there is an appetite for it in china and in europe. But the question Going Forward is still one of margins, because tesla will have to lower costs and show a profit on these vehicles. They have a very big staff at the plant, they are not the most efficient manufacturer. They have been trying to lean things up in fremont and they will in their new factories as well, but they need to show they can make a profit on these vehicles as they ramp up volume. And that is just going to be a matter of building up their systems and Getting Better scale, and proving that they can really operate this company. The shares are no longer really trading on the hope that they will grow, they are trading on whether or not they can execute the business. Taylor gene, any path to profitability . Gene i think eventually, yes, the scalability that david was talking about, they are taking this approach of kind of fit to print in the giga factory in china and what they are going to be doing in europe, the markets more recently have not been favorable to companies that are losing stories. That is not news to anyone. But what is important is when you have these massive opportunities, and i think electrification falls in a group of undeniable truth, i think that investors will be, despite the trend in the market toward profitability, i think they will more lenient towards tesla than they have been. I think they will continue to give the company room as long as the demand is there. I think they will give them room if there is a path to profitability. If i am wrong and they continue to burn cash, i think that if the demand continues to be there, they will be successful at continuing to raise money. They do not need to raise money for a few years. But i do not think that profitability is the critical question right now, i think demand is and they are doing a great job. Oflor that was gene munster Loup Ventures and Bloomberg David welch. Facebook also was in the news this week as Ceo Mark Zuckerberg appears poised to take on the u. S. Government if senator Elizabeth Warren wins the presidency. That is from leaked audio obtained by the verge of zuckerberg in a july meeting with employees. With Elizabeth Warren, who thinks the right move with facebook is to break up the company, if she is elected president , i would bet we have a legal challenge and i bet we would win the legal challenge. So you know, does that still suck for us . Yeah. I dont want to have to have a major lawsuit against our own government . Thean, that is not position you want to be in. We care about our country and we want to work with our government to do good things. The day, at the end of and someone is going to try to threaten something that existential, you go to the mat and you fight. Taylor Mark Zuckerberg also spoke on other topics, including cryptocurrency libre and chinabased app tiktok. I spoke to a representative who lobbies on behalf of Companies Like facebook and google and sarah frier, who covers facebook. Is not only a matter of regulating 20 different companies. Keep in mind, there are over a dozen different Government Agencies with oversight over the tech industry. But it is also the notion of having a centralized place where platforms can figure out what content is spam, what content are bots, what content is coming , andoverseas comprehensively address those problems. That is what mark is talking about. Since facebook is large, they have the backing and ability to see points of attack to prepare and protect american interests and american democracy. Talk to me about facebooks argument. I have heard this from several experts. You have heard it over and over, that being bigger helps them solve the problems more efficiently and with better resources. I just dont really buy it. I think that if you are facebook and you have all of these different services, certainly you can say that if you are finding this problem on instagram, you might find it on messenger too and you might find it on whatsapp, but there are also collaborations they have had with companies outside of facebook. A group to take down terrorist content. They share this terrorist content amongst themselves, they do the same thing with child explication content. So that all the companies can take it down at once. And so if the companies are broken up, you can easily have that same kind of arrangement where they all share information broadly. Taylor sarah, i want to pivot quickly to competition. Carl brought up the smart point about competition and facebook internally, talking about tiktok, social media and video platforms, facebook is responding to that competition by developing, i believe it is lasso. Did we learn anything today . Sara it is really interesting that zuckerberg wants to try and push lasso in countries where tiktok is not yet big. And i also found it interesting that he sees tiktok as instagram explorer meets Instagram Stories and that he is going to try to shift instagram in that direction. Look, he has tried this many times over the years, copying products, trying to push them out to a similar user base, but we really have not seen that take hold, except for with Instagram Stories. So its always a shot in the dark. We will see if it works. But this is it is very iktok is thethat t new existential threat on the composition decide for facebook. Taylor that was the general counsel for net choice and bloombergs sarah frier. Still ahead, President Trumps impeachment inquiry Takes Center Stage in washington. Will that affect the various antitrust probes . Probes into big tech . We explore the reach of federal resources. Also later, the big 5g rollout. We will hear from the verizon ceo. This is bloomberg. Taylor the millennial mainstay forever 21 has filed for bankruptcy. The fast fashion retailer saying it has to pay 350 million in financing to help it stay afloat, but the bankruptcy shows another sign of the punishing pressures of the broader retail apocalypse, in which the rise of ecommerce is siphoning away shoppers from brick and mortar chains. For more, i caught up with a bloomberg opinions columnist cyril hall stack sarah hall zak. They said in ecommerce comprised 60 of their sales in a court filing, and that would be a lower penetration then we see for the apparel business overall. You just dont have to look that far to see the companies that are sort of eating forever 21s lunch. Fashion know the fashionnova is a great one, tailored to instagram from the start, and forever 21 has suffered at the hands of brands like that. Taylor you mentioned instagram. Talk to me how has social media and instagram changed the way the marketing, really, and the way these fast fashion retailers can or cannot survive . A lot of these retailers have had to partner with influencers and fashionnova has gotten the likes of cardi b and kylie jenner to hawk their products on instagram. Forever 21 has maybe had a little bit less success in that realm. Instagram is also rolling out features like shoppable posts that all of these brands have to figure out how to try to master and keep up with. It is important for any Retail Branch to understand that ecosystem, but especially fo