neutrality changes ahead. snapper wrapped up its first day of trading thursday. shares closed of 44% from its listing price. it reached a high of just over $26. the maker of the disappearing photo app ended a long tech ipo drought. we caught up with our bloomberg technology reporter and sarah frier. about the range, typical ipo, 20% to 30%. this one will have more buzz baked in. twitter was 70 plus percent on day one, facebook less than 1%. when i look at trading and how the stock was around that $25 mark all day. , it was stable. we saw it selloff towards the end of the day, but it seemed decent way to go out. no one is complaining about the ipo for investors. >> it has almost tripled its ipo value, facebook down 31% after one year. twitter, down 10%, now down 65%. the managing of expectation and, the roadshow was not all smooth. many questioning the user growth. >> absolutely. this is a company trying as hard as it can to not set up those comparisons to facebook and twitter. does not company that want to be judged on its user growth, but it will be judged on its user growth, a metric that slowed in the fourth quarter, and if you don't have the users, you can't make the money off the but the argument is the user engagement on its app is so frequent, it is freaked wen a matter so much quantity as the quality. >> that is a pretty amazing statistic. goldman sachs have the roll cut out for them. stabilization for the entire trade, and they took their time. >> they did. they did take their time. you sawan to you now is bobby and evan ring the bell. i disappeared of that obit chasing them down because they went to goldman sachs to watch the first trade happen. they had to work through that, and the shares finally started trading at 11:19, so you can see the gap to between the nine: 30 open, and it was so important to find that sweet spot to get this pop. you saw them price at $17 a share, even though the deal was 10 times oversubscribed, so maybe they could have priced a little higher, that if you think about the company's impetus for pricing it at $17 instead of making $200 million more at $18 a share, doing that kind of reward for shareholders willing to take a bet on them on listing day, saying we will give you more for your return -- we can ease her way through that trading going forward. >> you were out there and silicon valley. on the hope was writing success of this ipo and how it is because there are other companies waiting to into the public market. had he think it has been digested in silicon valley among the investor base? is a high-stakes ipo because there are so many private companies that have ballooned into the billions and and of billions like uber, people have been waiting for these companies to go public, but it has not been necessary because there is so much capital available to them on the private market. also, the markets were volatile. they are looking at this snap ipo, the biggest social media ipo since twitter and saying if they can do it, there is an appetite on the market for these kinds of deals and for highly valued stocks. >> you are talking to sources already. what are they saying? snap is younger.nt, the they would go public when they were less mature. that hasn't been the case these days. snape is going against the grain by going out as early as it was, and there has been these arguments in the past year where the buy side in equity markets has been risk off. they want to see more stability, but snapped is coming out with an unprofitable company whose business model is probably about six quarters old, and the deal itself did well. there are still questions about the long-term returns, where the stock goes, how the company fares, but this is a proof point privateay be staying forever is not necessarily the best thing. maybe having your judgment day in the public market is just as good as doing it privately with basically the same investors, big crossover names. airbnb -- sara, you also cover facebook. one of the questions is they can copy what they do and do it better with a bigger user base. and half.n instagram copied the stories feature, where people can create daily reality tv shows of their lives. this is a product people are now using on instagram now as much as snapchat or more by this point, and this will continue to happen. app's app is a popular chat . they had a similar feature earlier this year. doing itis considering too, so this is a constant drumbeat of copying snap. yes, it harms the potential. we never know how much faster they could have grown if it weren't for that. the company does not attribute their loss of growth to instagram, but it is interesting. one positive side come i want to point out that advertisers say it is counter intuitive, advertisers say they can justify buying snap ads because the format is now the same as ads they can buy on instagram. alex barinka and sarah frier. is still ahead, the story of the week, and catch up with one of the first investors in snap. lightspeed venture partners. the new york stock exchange president discusses snaps trading debut. take a listen. the take great comfort stock opened at 24 and is trading smoothly around that number. that is what you want on a first day. ♪ caroline: now back to the tech story of the week. silicon valley venture capital firms will make a small fortune from their investment, like lightspeed venture partners. as a $485,000 investment. we caught up with jeremy liew and asked what made snap such an attractive investment. take a listen. >> when we met evan and bobby and heard about their business, they talked about how there was something missing from social media, how it had almost become a highlight reel for your life, that was creating performance anxiety for people. unless they looked pretty or perfect, they were not putting themselves on social media. we were just getting this tiny little sliver. was tot snapchat did by bring back the spontaneity, authenticity of communication. then committed to two subsequent rounds, $8 million. what did you see in terms of the that nowhat potential the market is questioning do still see in terms of growth potential? >> when we first met the company, they had less than 100,000 daily active users. most recently it is when 58 million daily active users, so it has grown a great deal. what we saw the time was amazing engagement. many people using the apps many times a week many times a day. people are now opening the app 18 times a day. when you see that become a habit for people, and when you become a habit, you can build interesting companies. >> many feel the growth has fallen below 60% in the last quarter of last year. is that some you think will read accelerate? part of dr.become culture and see that user base aging up. off with mostly young women, mostly teenage women, teenage girls i suppose, but today, you see that has been spreading to people in their 20's and 30's and beyond. and as you see that broadening come you gain a lot of confidence. >> what about geographically speaking. they have committed to the developed world only. they said you need high-speed, powerful phones. we are almost hitting saturation point when it comes to the u.s. is there more room to grow in the united states, where else geographic? >> if you think about the place with high-speed internet connections today, the u.s., north america, which has 70 million daily active users. yoeurope is also big, and the rest of the world encompasses more developed telecoms, middle east as well. need to extend past gen x, millennials? >> if you look at norway, back in the fall of 2012, snapchat hit the top three in the app store and that was the one place it got big faster than the u.s., and there you see it being used by people all across the spectrum, age, gender, and it has become embedded in society, so it gives you confidence that this is something that can become broadly used by everybody. >> what about hardware? how does that become an important factor? >> the spectacles are fine. i went skiing with my kids. it was the perfect way to be in the moment and capture some of those memories without it being , sormediated with the phone it has been a terrific experience. >> there has been a lot of reporting about your own relationship with evan spiegel. how is your relationship with the business? was it in part because of some of view owner's point you put on as seed investors? course of five years, there will be friction and every relationship. what is more important is whether you can work through it amicably and find a decision you feel good about our work towards a common goal, and we did that with snap. an in goal, but an important milestone for the company. >> do you think the restrictions you put in place were onerous? or is that part of being an investor in these companies? >> we were clear that we were interested in what they were doing and would love to invest in the company in the future, and that is what we have been able to do. caroline: that was jeremy liew. fighting battles on many fronts. this we started off with the senior vice president of engineering resigning after learned of sexual harassment allegations from his previous job at google. he has denied the allegations. bloomberg obtained a video of travis atlantic berating -- kelantan berating the driver. >> you know what? >> what? >> some people don't like to take responsibility -- good luck. caroline: travis come lannett an apology an enemy mail to staff. -- ravis clinic it is clear this video is reflection of me and the criticism we have received as a stark reminder and i must fundamentally changes a leader and grow up and this is the first time i have been willing to admit that i need leadership help, and i intend to get it. it is the latest in a series of embarrassing incidents for the ride hailing giant. we caught up with one person to discuss. uber's corporate culture has been in the news ever since susan fowler wrote a pretty scathing blog post about the company. we received basically a -- video from a long time uber driver who is unhappy with the direction the pay for drivers has been going. have a listen. in this conversation, travis is talking to some friends about the culture and how the company is doing. have a listen. -- hen you're coming up >> [indiscernible] ryan, you have had to counsel many as ceo and founder through these unflattering moments. what do tell them when they are in the board tax -- the vortex of bad news. ? >> how do you get to the root of what is going on, and know that most of the infrastructure and the company around you is there to hold that information away from you, so you have to be aggressively looking for that, so we been trying to figure it out as quickly as possible. >> i can't say we thought a lot about whether to write this story, but it seemed to me that travis's personality is central to all these questions. that has company changed the way cities were crude he is showing some of his five nation his personality. have a listen to the second clip where the driver challenges him about issues around driver pay and he responsible it forcefully. >> you know what? >> what? >> some people don't like to take responsibility -- >> good luck. brad, that was some pretty surprising stuff. what do you think this reflects in terms of uber's culture? is there a trickle down of fact. when you have a ceo who says dawgnation's things like that, went to mean for the overall company? >> this is why the company has been successful. doesn't suffer fools. he has rolled over every regulatory and competitive challenge in his way. he has to be a politician now. he has to deal with these sensitive constituencies. curious to hear what you think. you have no travis for a long time. do these ceos and founders have a responsibility to the less pug nations and more politically astute? . is a point you are fighting as an outsider for a long time. some make it and some don't, and there going to that transition now. i'm curious to see, you guys get something like this dropped on your doorstep. how do you think about the process of assessing that and whether you publish it or not? >> uber is the utility. it has changed the way cities operate, and travis's personality and uber's culture is so very much in the news right now, so it seemed to me that we did not have any choice. it is very much topical, and it is another one of these unscripted glitches about the man in the company. had toe: still ahead, we barcelona and bring you our secrview with the commissioner ajit pai. this is bloomberg. ♪ caroline: now to barcelona where we reported live this week from the annual mobile congress. it was notches tech leaders. regulators were there too. including ajit pie. we caught up with him and asked for an update on the at&t time warner deal. is limited to these particular facts, and as i understand it, the parties have structured the transaction so it will come before us. that is.s what the market is already expecting it. to see more m&a in 2017 question mark will you allow that to go through? >> this is a decision for the private sector to make. my job is to review the papers put before me and take a look at the facts and make a decision bait on the law and precedents long-established. we spoke with tom wheeler, your predecessor at the fcc, and he was of the view that four four players is what is need for the market. i wonder three would be enough. >> i can't say what the structure is. it is extremely competitive. started itsc investigation of free data offering, all for now have unlimited data plans. that is a good thing for consumers. if it is in the public interest, then we would be more favorably inclined to approve the deal. see t-mobile was sprint, would that still allow for a competitive space? >> i can't find any papers that present the facts before me. >> you move to roll back some of the privacy rules surrounding broadband at the moment. this being where customers would have to opt in into certain internet service providers to use their data. the question is this going bigger? will we see a rollback of net that type ofd protection no longer in force? >> this is one of the rules that was going to the coming into effect on march 2. the only question is what regulatory framework can we preserves a massive incentive to invest in infrastructure across the united states. caroline: europe's top tech execs were making the case for less regulation on the continent. the ceo of europe's biggest phone company by market value, to ache telekom, he called transition to a fifth generation of wireless services that would spur growth. >> for me, it is more important across the globe, for this global connected industries. we are connected to people across the globe. we need the same standards in all markets where we operate. it can't be we have 28 regulations in europe. have a harmonized market, a liberal market, so it is better to operate there. it is easier for the networks to get filled, so i think the u.s. model is a good one for the world. >> what about m&a in europe? there has been pushed back against some m&a across some continents. how much is that frustration? do you feel consolidation is needed in europe? >> consumer prices, which are significantly lower than other markets, there is this huge competition we have. in most markets, we have four mobile operators, and if you're trying to build another network and build synergies, we are not allowed to do so, so it is a quite difficult ecosystem, and if we could congregate more in the european market, there would be a reconditioned of investment. up, snapscoming shares soared during its trading debut come up at the company still has to address slowing user growth. we will dive into the metrics next. if you like bloomberg news, check us out on the radio cover you can listen to us on the bloomberg radio app, bloomberg.com, and in the u.s. on sirius xm. this is bloomberg. ♪ caroline: welcome back to the "best of bloomberg technology". i'm caroline hyde. now back into the top story, 44% fromes closing up its listing price, yet the company still has some things to prove. one big concern is slowing user growth. companyoadshow, the told investors it was due to an issue with its android product, but some were skeptical. we dove into it all with cory johnson and bloomberg intelligence. cory: fundamentally for this company come of this process, to grow, it will have to be a better business. it is priced as if a lot of things will work. when i looked through the filings, statements, one of the rapidt issues was this decline in user growth. we discussed it a little bit. they have acquired a lot of users, rabid users. base isn't the user actually huge yet. it is half of twitter, fraction of facebook, but may be more importantly, the growth has slowed down dramatically. they had only 5 million users in the fourth quarter of last year. even the quarter before, the user growth was quite slow compared with historical numbers. the few quarters before, there was an acceleration, then the growth rate fellow dramatically, and it coincides exactly with the launch of instagram stories, and that is the most disconcerting thing. despite the cool filters and other things that snapchat has, instagram is eating their lunch when it comes to storytelling on the mobile app, and you can see it i think in the user growth numbers. caroline: the copycat is a key concern. looking into the bloomberg, we are looking at analyst recommendations. aree, only three, but two ls, won a hold. give us what the opportunities are for scale. you have highlighted that we have seen the revenue perhaps grow, but perhaps a more overall increase in user base slowing, but the potential to exceed its current form. so if you actually look at the user growth issue, and they are blaming it on the andriy performance issues come up but if you split it by geography, the rest of the world, not america,nd not north show the slowdown. so they have to show they can be resilient in the face of increasing competition from instagram. if they have bad numbers, there is a serious problem there. theline: what are opportunities for growth? critically outside the age millennials? with a look outside the current age group? don't really think so. this is a millennial-focused platform. if you look at their strategy, it has been very millennial-focused, and they have shown they get this audience better than most social networks out there. having said that, if you look at the last couple of months, there has been an uptick in 35 plus audience. that is interesting, so maybe bringing in celebrities and followers they have under the platform to get some user base could be one of the strategies. caroline: they are already celebrities and their own way. we are looking at this demographic breakdown. they are already hitting saturation when it comes to the united states. others say look at the rest of the developed world. internationally, the company has been growing. it appears the service has become suddenly expensive to provide for u.s. users, or the international users just cost a lot more for them to provide for. mightinternational growth offer some opportunities for them, it is coming at a great expense. has hadbusiness, and it negative gross margins for every quarter of its business, so on a training bases, you have negative gross margins. there are 552 stocks with over $10 billion market cap. only snapchat and one other have negative gross margins. the very essence of any business, oil wells or selling snapchat, you have to sell something for more than a cost. these guys are and able to do that. caroline: when we look at your bloomberg intelligence and analysis, you have look at the market capitalization in terms of the ratio of the users they have the user base they come and they say it is significantly less than facebook and twitter. is one way of looking at it, but if you look at the big picture and compared to all the key ipos in the last decade snapchat is coming out at the top of most of them. valuations bring outsized expectations. revenue growth is not a worry to me. they just started monetizing it, but user growth, if they show any weakness, that would be bad news for the company. is interesting, we just had sarah frier on saying it is a bit like when apple went into music streaming, sport of spotify's own business model was vindicated. be?his where you want to >> that is why it is a wait and see story. initially, you have the budget that advertisers spend on facebook, andgle, snapchat as well, but longer-term if they prove they can hold the engagement among the score millennial group that they have and they continue to make it easier for marketers to advertise on the platform, then -- so it is really a show me story at this point. caroline: a quick update on yahoo!. filed its 10k, an annual report required by the sec measuring a company's financial health. ronald bell resigned as general counsel, and marissa mayer offered to forgo her award and bonus given the 2014 security breach occurred during her tenure. bloomberg news received a statement stating, i am the ceo of the company and since this incident happened during my tenure, i have agreed to forgo my annual bonus an annual equity grant and expressed my desire be distributed to a company's hard-working employees, who contribute so much to yahoo! success in 2016. a reminder that all episodes of bloomberg technology are live streaming on twitter. check us out at @bloombergtechtv , 5:00 in new york, 2:00 p.m. in san francisco. this is bloomberg. ♪ caroline: an update after a massive internet outage in the u.s. earlier this week, amazon said human error at its cloud business forced those outages that lasted for hours. amazon says an employee accidentally switched off more service than intended, causing errors. this service is used to house data and manage out and software downloads by 150,000 sites. youtube going prime time, announcing a service called youtube you tv and delivering an assortment of channels to paying customers for $35 a month. lucas shaw spoke with the ceo of youtube at an event in los angeles and asked her about the details of the new service. youtube, we have demand for tv content, and we think it is a great opportunity with mobile phones because everyone is carrying a tv and their pockets, but not using it for tv , so we saw this giant opportunity to take this amazing tv content and make it available to a generation that let's content, but want their content on demand and want to watch it on any device. they want to not have the commitments currently required for tv, so we saw a big opportunity to bring the full tv experience to our audience. >> with these networks, these thatwned by companies youtube has had a relationship fighting piracy and things like that. did you have to make any reassurances about that? >> we actually work with all of the large rod castro's and networks to bring that content on to youtube now. shows, so we have had a good relationship with them, and the opportunity to use youtube as a mechanism to get more promotion for their shows, to have time shifted versions of their show on youtube, so this is taking it to the next level. >> you have experimented already and people think about youtube as this place to get video for free. you experimented with paid with you to brad last year. what have you found about youtube users appetite for paying for something and what is the future of youtube read now that you have this full tv service? we think there is an opportunity for users to be able to also have a subscription service, and so while the free ad-supported model is a wonderful model and we are we see anin that, opportunity with tv content to offer that to our users for the , soa month for the accounts that is an exciting opportunity to expand to a new type of content and make that available to our users. >> do think this service then helps to boost business, increase your chances of generating profits, advertising revenues? an opportunityis to be able to all current tv content to our users and away they are used to consuming content, and so if you look at the generation of the accord nubbers, cord cutters, court millennial, they expected to be on demand and cross-platform, so bring the opportunity to this amazing tv content to this generation and connect them to content and the way they expect to consume content. networks.e broadcast you don't have some of the big cable networks. is that something that will change? service, soew always evolving, but we feel happy with what we have now, and ofthink we offer a great set content available for a low price of $35 for six accounts. bigould you think is the differentiator between this and other live services out there like the ones coming from hulu and directv and slaing? >> we hope the big differentiator is that is a great experience and everything works the way they expected it, seamlessly across devices, unlimited dvr storage. you can quickly and easily save everything. you have no commitments when you greatp, and you have search, so these are all things that we as a technology company have spent years developing and now we are excited to bring this youtube tv. >> where do the normal youtube spend timeat people watching a ready, where do they live in the service? youtube creators, we will have some youtube content as part of the service, episodic content, also the trending on areube available, and so we excited to bring those to bring parts of youtube to the service, and of course your original content youtube is creating as part of youtube read will be available on our youtube tv product. theill it be available for $35 monthly price or do you have to be a youtube red subscriber? the youtube red originals will be included for the $35 price for our youtube tv product. >> right. in thing you have stressed this service and a lot of new live services stress, sports. you have highlights on youtube. you don't have live sports. you see yourself bidding for sports rights in addition to what is already available on youtube? >> the goal of this product is to be able to offer tv content and have a great tv content experience, which includes lives courts. the our partnerships with broadcast networks, we have a comprehensive sports offering for users with this product. speaking youtube ceo with shaw. we heard some of the biggest names while at the mobile congress, including ericsson. it is aiming to capture some of the $1.2 trillion market for a broadband services. we caught up with ericsson's chief executive officer for more. >> in order to be as successful company you need to make money. you need a bottom line. that is a hygiene factor as i call it. we also need to invest to stay ahead of the game, but it is only by being profitable that we will be able to invest for the future. huawei no longer putting pressure on the market? >> pricing pressure will always be a factor to deal with. we can only combat that with innovation, new business model, new service offerings, etc.. that is what we will continue to do. >> much anticipation and analyst notes that you will sell the services side of the business? i'm starting my sixth week, so i would need some more time and then we will start to communicate what we do. >> when you are communicating what you are doing, many have been focused on the credit rating of erickson at the moment . you look like you are prioritizing the cash talents, the bond market, curtailing dividends. alan portman is it to get investment grade? , it is important. we like to make sure we have the rating and a strong balance sheet. we are doing really long-term investments and long-term bets. that can only be done if you have financial stability. >> i'm going to dig and more to the potential partnership, because looking at some of your lower margin areas of the business, is this the time you could be working with other companies rather than a standalone basis? we will always work in partnership with companies. we have a partnership with cisco, for example. we have partnerships and new areas. so we would see in the future that it will be much more about ecosystem, partnerships, and collaborations. caroline: still ahead, we get back to our main story of the week, snaps first day of trading. just how big of a paycheck of the cofounders bringing home? we will hear from the bloomberg billionaires team next. this is bloomberg. ♪ caroline: its stock we are watching, apple hit an all-time high after research published a bullish report on the iphone maker. they joined bloomberg daybreak: americas on wednesday and reiterated his buy rating. >> there is a lot of anticipation building up for this new phone in september. we have not had a substantial difference since the six and six 6s came out. if they can deliver mid single-digit growth, you can get more run out of the stock. on thee: another stock move, snap. the company's public offering handed over $1.5 billion to the founders fortune. than 150 places on the bloomberg billionaire index. we have more now. >> if you look back at the course of their fortunes, they comenowhere in 2011, 2012 all of a sudden in 2014, $10 billion valuation. of the all-time fantastic growth stories. it is just whether it will continue are not. will see how much they start spinning. how does this rank them and comparison to the big tech billionaires. >> the classic names might be jack dorsey. he only has $1.5 billion. you have to feel sorry for him. he has bring jobs. ,long with the other startups it unicorn head honchos, the three airbnb founders with 3.6, just behind uber. behindly they are way jeff bezos, mark zuckerberg, and bill gates, 50, 70, $90 billion range. caroline: we were just looking at a screen there. talk us through it. made a lot of money, but venture capitalist that made big bets in the early days. made $900 million and got a $2 billion position, and lightspeed ventures, it was a growth story about how evan spiegel want to make sure he had voting control at snap, and they got $600 million gained this year. caroline: $613 million. what about the bounce we tend to see on the first day? it is up 44% today. these sorts of fortunes aren't always stable? >> the don't really point towards what will happen in the next year. 77 percent up 7 come announced down. facebook was flat, and now it is up since the ipo 260%. how have their fortunes changed in the founding of this company particularly? how it wasking about like a rocket ship and went up so quickly. is this now the point that they cash out? a lot of it will be locked in. >> they both sold 16 million shares in the offering, so they have taken home $272 million. that, they geton about $181 million. in terms of snap shares, there are restrictions on when they can sell it, and they each have 20% in snap. they started selling that, you assume the value they are holding would drop down, but no one can feel sorry for them. they have done very well and i'm sure they will be celebrating. we have been bring you interviews from snap investors there from the very beginning. scarlet fu and oliver renick talk to the general catalyst managing director, who gave his thoughts on the company's performance and the first day of trading. you areuccessful start seeing his reflection of two things. one is how popular the product and how well the company has executed over the last few years, and the second is there have not been a lot of tec tech ipos and there is strong demand to invest in companies like snap. it is great to see. >> the stock is trading $25 and change. at $17. where d.c. closing and training and a quarter from now? >> i can't see the future. the company has done a good job of setting expectations at the right levels. i think using strong investor sentiment behind the company. what happens in the next few days is hard for me to predict, but so far, so good. >> the reason i ask is that it could go the way of facebook where it did not have a great debut but the stock is done very well. or twitter, which did better, but fell below its ipo price. what is your confidence that evan spiegel and bobby murphy can guide snap to not go in the way of twitter? the key question everybody talks about in silicon valley as well. everyone one of these companies is different from each other. a 100 40s still character method for broadcast, but it is different from what snap does, which is communication for every day life. there are hundreds of millions of people use in multiple times, 10-20 times a day, so i look at how evan and bobby to your point executed over the last six years and have many interesting products they have launched, and that is a testament to how different the company is from twitter, and even facebook. caroline: that does it for this edition of the "best of bloomberg technology". we will bring you the latest in tech throughout the week, including our exclusive interview with the head of google -- tune in each day. all episodes of bloomberg technology are live streaming on twitter. check us out at @bloombergtechtv weekdays. that is all for now. this is bloomberg. ♪ carol: welcome to "bloomberg businessweek". i am carol massar. oliver: i am oliver renick. carol: can a ceo lead the u.s. state department? the odds for and against rex tillerson success. and how did one of the most liberal and welcoming places in europe become a hot head for anti-globalization. oliver: all that ahead on "bloomberg businessweek". ♪ carol: we are here with editor and in chief.

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