the truck campaign. the afl-cio will sue the government if it waters down a boost in overtime pay eligibility. they were blocked by a federal judge. we will say goodbye to the raiders. the team moves to vegas after a vote of 31-1. the team could play in oakland while the new stadium is under construction. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. i am alisa parenti. this is bloomberg. "bloomberg technology" is next. ♪ cory: i am cory johnson. this is "bloomberg technology." coming up, snapchat wins on wall street but the real reason analysts are bullish. whatsapp creating a backdoor for intelligence officials. the new debate over privacy encryption. a self driving car accident grounds uber's autonomous cars. some are now back on the road. first, some investors had a rocky start for the failed health care vote on friday. we have abigail. there was a lot of pressure over the weekend. what do you see? abigail: the worst open for the s&p 500 for the year. the worst week for stocks last week. some bearishness. some expectations of seeing strong selling. we saw some recovery. the nasdaq slipping into the positive territory. at the end of the day, an unchanged close. the dow down eight days in a row, the longest bearish street steak since april 2011. still some bearishness there. as for the nasdaq and why the tech heavy index finished modestly higher, it largely came down to biotech. it was up more than 1% on the day being helped by big names. these stocks, companies are not really affected all that much by the affordable care act. the fact the republicans failed to get that bill through not so much of an impact. these stocks rallied last friday and rallied today. a little bit of a relief over all. the big story related to the markets, is it coming to an end? i'm talking about the big rally we have seen out of the election on hopes that president trump's policies will stimulate the economy. when you look at the five-day chart of the nasdaq, it is down about 1% over that time period. it could be the start of a reversal of the trade. only time will tell. you can see that jumpy ride in that chart. that really bearish open as well. cory: watching the open this morning. it is interesting, even in the biotech field, and the nasdaq not participating as much because the suggestion is the administration will not get done the things it wants to do. the infrastructure and tax cuts are as hard to pull off as health care, maybe changing of drug pricing will not happen. abigail: only time will tell. the uncertainty that the idea, these policies, i think that is creating some of the volatility. not the volatility for the nasdaq. here are some of the biggest losers, including intuit. there were not really any fundamental causes that we were able to determine. intuit was down from a cut of goldman sachs. it could be a more difficult tax consumer environment. the big winner, the biggest point lose, alphabet shares. the concerns that big advertisers were pulling ads from youtube. there were many supporters. it is too early to panic which is the early consensus. alphabet rallied on that defense from wall street. cory: our friend having similar comments that it is not a big deal. thank you very much. shares of snap closed up 5%. snapchat's parent company with a cooler reception from analysts. today's analysis comes from firms that received investment banking fees from snap. maybe a coincidence, maybe not. joining us, one of the analysts. talk to me about your research and what you saw. you want to play good cop and bad cop? jason: we came out with a perform rating. a range of 21 to 26. we can work up to 26 but that is not enough for us to give it an outperform rate. cory: what do you think investors do not adequately appreciate? jason: clearly, the stock has performed well since the ipo. investors like it. it is a very interesting company. 75% of the 18 to 24-year-old using the platform. there is a question, can you get everyone else? we have put that in a report that we think is insightful. really, if you look at the history of tech ipo's, it comes down to the initial ipo. yet there is a double-digit gain today, we think investors would be better off waiting for lower prices. cory: you wrote a great piece looking at the analyst community. they trying to be more bullish. some great numbers showing the average target price is much higher than the underwriting price. what else did you find? shira: it is interesting that now since the dot-com bubble we have this pattern that sometimes pops up. the underwriter banks seem to be more bullish. 69% of the underwriter, the analysts of the underwriter firms were equivalent. that compares the something like 14% of the analysts that were unaffiliated. that is a pretty big diversions of opinion. cory: to be fair, there is a chinese wall. tell us how that works from your side, your perspective. jason: those firms who were dissipate in the deal do get to, to talk to the management. they get more access. as a result, they may have deeper opinions to get access to management. the road show works, the company meets with the big investors and they dig in. they don't meet with the sell side who are not involved in the deal. effectively, the firms who initiate who were not involved with the deal have a less of an opportunity to learn. cory: i wonder if it is sitting in your chair and dealing with those rules. jason: the rules are the rules. we get the perspective, the company asks questions. we do our own research. we do survey work. we go to the company, we ask them to clarify things. sometimes they can tell you and some things they cannot. cory: when i was on the buy side, they refused to meet. a short seller and reviews to meet with management. not such a bad guy. an interesting thing i thought about. i would be with management all the time. what you are describing is a long history. i wonder when you look through the notes if you see some thoughtful analysis? shira: snapchat, send people can look at the same suspects of the company and come up with 10 different conclusions. you are talking about a company that is creating a new way for people to communicate and become addictive for that young set of people. the big issue though is this is a company with a track record of modernization. less than two years. negative gross margins. a business model we have not seen before. i don't really fault analysts for having different views looking at the same set of facts. the people who are bullish are doing so kind of extrapolating growth either in their ability to generate ad revenue for the user or their ability to go from young adults to a more mature audience. cory: you talked about the bill that could accelerate it. describe that. jason: this is a way to buy automatically. up until now, it would be working with the company, with the ad agency. a lot of effort. it allows you to basically make an ad and the computer decides who is your target. if we look back to facebook, it took several quarters, it excellerated the growth from 20% to 80%. when twitter launches their api, they saw benefits one quarter later. it stabilized. as far as we can tell, it is still early. they were probably not see a significant benefit the first quarter which is why they talked about revenue being down and dollars sequentially, but we are very excited about what happens. remember, with facebook launched, it was a direct response. a direct response is typically seasonal. snapchat went right at brand. without api which tends to bring in direct response, that is the reason to be excited, but we don't know the timing yet. cory: jason joining us, managing director. shira, thank you very much. coming up, we will talk to roland busch and the rolling tech giant going digital. all episodes of "bloomberg technology" are live streaming. check it out on bloombergtech.tv on the twitter. this is bloomberg. ♪ cory: siemens is betting big in the u.s. engineering day. the company is empowering his push to add to investments in the u.s. since 2007, the german company has invested $10 billion in the u.s. software company and promise another 2 billion in hiring in the u.s. over the next three years. siemens global cto roland busch in princeton, new jersey. talking about how siemens will look different from five years ago and five years from now. roland: what we do see is digitalization is changing the sector. it is changing the way mobility is going. it will drive flexibility and markets. this is where investment goes. cory: when you look at the possibilities here, i think one of the most interesting things in this era of technology is when you look at the dot com era, that was about technology for technologists. this is changing everything throughout the enterprise. are there particular areas that you think this new digitization will help siemens change business operation? roland: it is the whole nine yards with the markets. let me give you an example in manufacturing. we drive productivity and manufacturing and your time in the market. creating a digital twin of your products. you can assimilate the product as well as how you manufacture it. you run your cycles and then when you are ready you can download it to your devices. you can skip the samples in short your time in the market. this is when digitization and domain teach each other and great value. cory: is rapid prototyping about that 3-d printing? it is very interesting. roland: absolutely. rapid prototyping and 3-d printing is something that helps you. if you want to make a quick trial on what you are doing, you can do that. it helps you also in the way on how you prepare for spare parts. in some parts, and we don't talk big volume, but some special parts you can design in a new way to use 3-d printing. that opens a new area for some of the -- we can change the design and increase the efficiency of a turbine. cory: let me ask you about robotics. talk about the importance of robotics in siemens processes. roland: robotics, we don't talk about the heavy lifting robots which you see currently in automotive. there are standards, visionary capabilities. it would replace a manual work. this is what we talk about when we talk about an autonomous republic. they would go into the manufacturing process and drive productivity there. access with our automation devices, the software as well. we are working together with customers to help them really drive and optimizing the process lines. cory: it seems like we are seeing rapid innovation. it will not be roombas running around. roland busch, thank you for joining us. another week, another controversy in uber. backlash from recent crash in arizona puts the company's self driving program on hold. check out our interactive tv function. you can find it on tv on bloomberg. watch old interviews or stocks. this is bloomberg. ♪ cory: amazon's futuristic new grocery stores not ready for prime time. the cashier free store has been delayed. the store called amazon go uses machines and cameras to detect your cards to charger amazon account. it was supposed to launch at the in of this month but after beta testing, there are some trouble keeping track of more than 20 people at a time and had trouble to track movement on shelves. uber's self driving cars are back in the streets of san francisco. a crash in arizona but the testing program on hold. one of the self driving suv's was involved in a high impact crash when another vehicle caused the accident. it is another controversy the company is dealing with. eric is getting used to dealing with these controversies. this seems pretty freaky initially. even with a person in it, it is disconcerting. eric: pretty terrifying to see a self driving car tipped over in the road. i think anybody who saw that was definitely nervous. now as we have learned more about it, it seems like the uber vehicle was not responsible. the other vehicle failed to yield. that is why they are getting back on the roads. cory: i would argue it is more terrifying to see a self driving car actually moving on the street. maybe they saw this car and plowed into it. eric: maybe, i don't know. this plays into the whole self driving argument. we have these crazy human drivers out there ramming into self driving cars. we need perfect machines to do it so it does not happen anymore. that would be the uber spin. cory: i was with a venture capitalist yesterday. we were having this conversation about, imagining how self driving cars may rollout. 15 million cars in a year and how many would be some driving -- to get to that point where most cars are self driving would take decades and decades if technology could even work. eric: right. there is going to have to be a lot of coexistence between human drivers and some driving cars for a long time. the replacement cycle alone would take quite some time and then getting the technology ready to argue can actually have cars without any human drivers present still seems a long way off. people talk about sort of maybe we will need particular cities to try it and build the infrastructure of the self driving cars interacting with the roads, stop lights. it seems like the actual rollout is some time off. uber is aggressively trying to make this work. cory: they are backed up in san francisco where they have been clashing with lawmakers in the state in a very public way. eric: they are going back up everywhere now. in san francisco, it was just a test. in arizona and pittsburgh, they are doing actual passenger trips. of course all of these vehicles have two human drivers in the front. one ready to take the wheel and the other monitoring what the car sees about the world. in some cases, helping with lane changes. cory: there was one part in front of the san francisco bureau. i put it on my instagram. it is amazing to see. eric: when they were first launching in san francisco before they got kicked out, i went on a ride in one of them. there were lots of human interventions. i can see them around, mapping, and getting a sense of the landscape. the lidar pictures to understand what the world looks like and the environment. cory: do you get a sense that after all of these pr problems that the company's responses more grown up in the way they are responding that make them look bad? eric: i think they were smart to take them off the streets, figure out what happened. when they realized they were not at fault, redeployed. it was a mature response. every scandal requires a different response. a lot of the pr problems have been more substance than optics. cory: what matters is the substance not the optics. you have this hashtag. it led to a substantial problem. eric: in that case, i think we both agree some of the story behind the protests and everything is suspect. the underlying issue, the closeness to the trump administration, i think people were expressing dissatisfaction on that front. cory: eric newcomber, thank you very much. tensions between tech companies and government officials rise as the u.k.'s home secretary had facebook have backdoor data from whatsapp. the debate over encryption. if you like bloomberg news, go to bloomberg radio. you can listen on the bloomberg app, bloomberg.com, sirius xm. we are all over the place. this is bloomberg. ♪ careful joe, they've got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. something for everyone is awesome. find your awesome with the xfinity stream app. more to stream to every screen. thank you so much for that down home welcome. show me female vocalist of the year. thank you so much. thank you so much acm's, i appreciate it. show me acm best moments. i could never have wished for, asked for and dreamt of anything more than this. catch your favorite moments from the acm awards and an exclusive encore performance by kelsea ballerini following the show on xfinity x1. the acm awards. live on sunday, april 2nd 8/7 central on cbs. >> this the latest first word news. a $6 billion investment from softbank. it must balance the interest of existing investors. apple and tencent may join the new investment. it is not clear if the money comes from softbank or from its vision fund. iners have halted production thousands leave their homes as a bears down ony queensland. it is expected to be the most powerful system to hit australia since 2011. pastross the coast in the hour as a category four storm with the risk of significant structural damage. confirmrean prosecutors they requested an arrest warrant for the former korean president saying it is reasonable to detain her because her is a risk she will destroy evidence. park is accused of forcing big business to pay millions of dollars for government favors she denies the charge. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. >> stocks in sydney rising over looking to retest the year to date high. japanese stocks also gaining elsewhere tie when he stocks on the decline. taiwanese stocks on the decline. markets are fairly home today. calm today. bonds and commodities are stable with chinese iron ore futures barely budging. a check on hong kong ahead of this evening earnings report from ag bank. financials setting .6%. 2.9% from a property stocks falling in hong kong. that is a look at what is going on in asia. ♪ cory: this is "bloomberg technology." we continue to watch the markets. stocks lower for the seventh day of losses after the publicans failed to pass the highly anticipated health care bill. worries that the administration cannot give me the done after this. the nasdaq is managing to outperform snap. picking up a handful of buy ratings from analysts have helped their share at 5%. amber rudd says whatsapp should open its encryption to intelligence services. the london attacker used it shortly before his attack. it was access to the encryption data. corporate customers, last year, rocking the iphone tied to the terrorist attack in san bernardino. it was without apple's software. joining us is michael, partner at the privacy and security practice. talk to us about the desire of government to get into the messaging -- especially the architecture to make it impossible. michael: what they are trying to do in the united states and europe, they have been trying to do with the issue of whether or not they should legislate some type of fix to require companies to install some type of backdoor into the technology of course, that has raised serious questions in terms of the technology manufacturers about whether a backdoor is truly safe. does that leave their clients vulnerable to other malicious actors out there, and this is a serious problem. cory: it seems like whenever there is an attack, parts of governments whether it is the u.k. or here, they are ready to go out and say this is why we need access. this is why we need a backdoor for a hardware or software device. they have lost the argument in the course of public conversation. michael: they are always ready with the argument, but when you get down into the details, that is where things bog down. the fact of the better is that companies have gotten better about data immersion like whatsapp where you are talking about messaging information that is going from a software application from one device to another. but the issue of when you actually are able to get into the phone and actually get the information that may be sitting at rest, similar to what was going on with the apple phone in riverside, there are certain technologies that may not be "backdoors" but may give access to the certain password defeating technologies that would allow law-enforcement actual access to the data that is stored within the phone. the interception of that information is of much different question. a much more daunting question. cory: there is this new technology, what is it called? it is called a warrant from a judge that exists as a matter of law in the u.k. and here. that does not seem to come into discussion at all. michael: it does not because what you were talking about in the u.k. circumstance is a situation where it is a national security investigation. in those types of contexts, they may not be seeking due process to get access. they are looking at it from purely an intelligence perspective, not something that could be used in court, especially like here where the individual is now deceased. what they are interested in what does it provide in terms of leads. other individuals that may be involved. in other contexts, of course, the warrant is a very critical tool that in the fbi versus apple case, they were looking for other individuals and it did prosecute someone. even in that context, the fourth amendment order, it does not necessarily mean that that type of technology exists to bypass some of the mechanisms in place to get access to that information. cory: it seems the consumer wants privacy. it seems that is the way the market will go. interesting stuff. great conversation. joining us from l.a. the latest tech revolving door, facebook with the oculus vr hardware division. hillman at apple is the head of hardware at oculus. try to take virtual reality hardware mainstream. that is after facebook hired another big name to oversee all of facebook's virtual reality products. we will talk to adam jonas to talk about tesla's production goals next. plus, some are calling the wright brothers spacex. we will explain why this rocket is a big deal, next. ♪ cory: to say that the tesla ceo elon musk s that a high bar is an understatement. tesla needs to build 430,000 model 3's by the end of next year. they have yet to build one. our next guest is quite bullish with the stock at 50% since the beginning of december. adam jonas joins us now. really glad you are on. you have followed it closely. talk to me about the model 3. it seems like it is the biggest thing for this company. when do you expect it to ship and what price? adam: our forecast are much more conservative than the company this year and next. we expect the company to go into a soft launch mode into the fourth quarter this year. our forecast is for 2000. not 20,000, not tens of thousands, but 2000 units to be delivered at the end of the year. that is a very small above zero number. the point of this year is to have the initial deliveries done to get the data and initial feedback from the community. next year, 80,000 units. yes, they have talked about 400,000 or that kind of pace. we are nowhere near that. a few more years to 2020, i believe the numbers are less than a third of what management wants. in spite of that, we are constructive. cory: the price of the car -- what do you think the price of the car will be? adam: an average transaction price of $60,000. i know -- cory: that is not 35. that is more than 35,000. adam: we think the kind of people that would fit in the order for that car will not want the $35,000 version. while they technically could deliver that, once it is speced up, the average customer, very few will walk out the door at that advertising price. we think it will be more like $60,000. cory: the acquisition of solarcity, that the impact, the bomb of solarcity's balance was really going to hit the cash flow burning tesla in a bad way. they saw that in the first quarter. how do you expect that to moderate? adam: that is going to be up to them to prove, right? they have acquired another cash consuming operation, one with a fairly sizable balance sheet as well, ok, which adds even more financial leverage to the story. a lot of investors thought we did not sign up for this. throughout the summer -- we were also on the sidelines as well and we digested it. right now, we have the cash consumption of that business in in the medium-term forecast. we have zero value of solarcity or tesla energy in the base. we still value the company as entirely as a transportation -- cory: you have battery sales going out and growing. and, where's the give and take there? adam: we think the battery business was a necessary requirement for them to achieve anywhere near their volume goals. we think they understandably wanted to secure their own reliable supply of high-quality batteries that they can have control of the cooling system and mitigate any risk of fire or any of problems. they needed to do that themselves. whether the battery business becomes separate, we have done work with stephen burr on some of the market opportunities for stationary storage. we can come up with a few percent of the value of the company, but on a market cap of $42 billion, even bullish assumptions, it is still a transportation company. cory: where are you in terms of natural? i was surprised of the recent stock option was not bigger because it seems like they will need more cash to get through this year. adam: so, they are targeting around $2.5 billion for the first half of the year. if you put anything, $2.5 billion for the whole year, i think on most people's models, the company will be burning somewhere between $1 billion, $2 billion in cash a year. so, on our motto, we end up with even pre-cap rase, maybe within $1 billion. yes, on paper, they can do it, but it gives a more breathing room. yeah, i would say anyone with a model on tesla has been burning cash this year and probably next year. we have them burning cash even into 2019 a little bit. cory: you have the bullish price. the tone of your voice suggests they have a lot of proving to do. adam: absolutely. the model 3 itself, even doing a handful of model 3's, the proving point is going to be 0-60 in two seconds, that is probably easy for them to do. it is going to be safety. this year is all about safety. can those initial cars, whether they are independent or by tesla, are they really 10 times safer? if that happens, i think that a lot of other members of the automotive ecosystem will really, really take notice and we think it is going to affect the used car market because the average car on the road is 11.5 years old. practically no software. if this vehicle works, we will have a used car problem that can affect the nation market, rental cars, all sorts of interesting things. cory: one more question -- elon musk said he is looking into starting a third company. he's already got two companies. would you rather have a full-time ceo around-the-clock, not just part-time? adam: in an ideal world, we could clone elon musk. cory: we can't. adam: you tell me. seriously, in an ideal world, sure. having a very talented management leadership -- we never have good enough of leaders in any organization, right? i do believe it is true. he might be spending more time at spacex than tesla. up to this point, it is not that every other auto company we talked to had an enormous amount respect for. the proof is in the pudding. the next nine months will call for that. cory: adam jonas, thank you. spacex one of elon musk's companies. they will try to relaunch this falcon 9 rocket. spacex wanted to landed on a floating barge in the atlantic ocean and recycle it. maybe it is wednesday or thursday now. talk to me about this rocket. this is really proof in the pudding, right? dana: they landed on a drone ship last year, checking out all the engines. the latest i have heard is it is the launch is slated for late thursday from cape canaveral. cory: is it weather? dana: there is always a risk of the weather. you have to get clearance from the airforce to fly and sometimes people in luxury boats are looking. it is slated for late thursday. we will see how the weather holds. cory: the notion is this will alternately be cheaper, but how expensive are these launches? is it reasonable these rockets can save money? dana: ses, the communication satellite satellite, has said what the price is. the cto says they got a cheaper launch for being first in line, long-time customers willing to go first. we know from spacex's website that a typical launch is roughly $62 million. there is a discount if you buy in bulk. it should be cheaper. i would like to know what the price is. nobody has disclosed that. let me know. the goal is to reduce the cost for spacex customers and spacex itself. they want to send people to mars. in order to do that, you have to be able to fly a rocket, turn it around and fly it again. that is the step to that ultimate goal. cory: the falcon 9 is rocket science, but it is not the most cutting edge rocket rocket in the world's fleet? dana: nobody has reflow a rocket before. what happened with suttles is different. if they can fly this to space and land it again, that will be a big milestone. everybody is talking about re-sability. no one is actually doing it. all last year was about can we recover the rocket? can they land it on land? may have done it eight times, three by land and five by sea. they have to prove it is reflyable. you and i can imply from san francisco to new york, the plane lands, they refuel it. that is ultimately the goal for rockets. there are thermodynamic events going on. it will be interesting to see how does the engine does and how many times can you refly it? what is the lifespan of a rocket? cory: it is fascinating to watch. dana, thank you. up next, robots brave paper cuts. the machinery ramping up office productivity, next. this is bloomberg. ♪ cory: ripcord has created a machine that takes stacks of paper and scans it into the cloud. >> people need to have better jobs. we are not replacing people with machines. we are getting people more interesting things to do. i don't think people go to college to be a human staple remover. ♪ >> silicon valley started ripcord, a $25 billion industry. there's about 5 billion boxes filled with paper just from the united states. no one knows what is on the paper. a cure for cancer, some of these missing tax form? >> turning that paper into digital bits takes labor. >> when you have to unload every file, remove the staples. >> six hours of work. >> i ask myself of all the world problems, is scanning really that difficult? i will blast through this box. just broken. ♪ >> god. it is harder than it looks. this answer is a giant machine with artificial intelligence. we are going to use this machine. >> we don't care if there are staples. that is it for that folder. and that is it. it is ready to go. >> that is the green button. >> it separates all those papers and looks for all of it. it moves them one sheet at a time. >> our camera was not able to look under the hood but i was able to look. they are digitizing service for a fee and have over 100 machines running. the main competitors are real estate companies. cory: that was ian king. that does it for "bloomberg technology." do not miss tomorrow. bill nye the science guy right here on "bloomberg tech." ♪ ♪ theaudi arabia's masses hike -- smashes the hike preparing for the anticipated -- >> world's biggest refiner says it is talking about investing in the ipo. the idea was raised in beijing this month. >> brexit, what brexit? they plan to expand in the u k and the u.s. they are planning to spend billions of dollars in the process.

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