In china. Would this give another boost to Companies Like xiaomi . And technology is making a big mark on the language. Watching our are added to the online dictionary. Alibaba has been on an acquisition spree in its runup to its ipo. But now, there are concerns about one of its deals. A film company now known as ali baba pictures has uncovered some possible accounting flaws. The unit may not have made enough writedowns for some assets in the first half of the year, according to a filing. Moreba has taken stakes in than a Dozen Companies this year, ranging from video sites to the singapore postal service. Will these Accounting Service issues raise red flags for investors . Fastnk wiring too much too are they acquiring too much too fast . Grid crid, ill start with you. Did you ever do a deal in 15 minutes . They said they were on a phone for 15 minutes nailing this down, and it was done. 15 minutes as fast. Because weate, thought chinese businesses are fast and loose. We been watching, and finally, they had a hiccup. If you are acquiring at the pace that ali baba has, you are about to hit a speed bump. Is a too fast . Compared to what . They have been on an acquisition binge. When we talked about this earlier this year, they had spent 4 billion. That pace has continued. I think they have a deliberate strategy to place a bunch of bets. I dont think they will slow down. I think they will be more careful. This raise a red flag . I think it does. It is pretty unavoidable. The pace of acquisitions, i understand the strategic intent here. 10 billion doing in acquisitions in the first six months, he will always make you nervous that there are things that will fall through the cracks, in respect to do diligence. This is that a small scale, these arent hugely material numbers in terms of the companys Balance Sheet or income. But is the notion that where there is one, there may be more. Were here has to be what other issues has escaped attention . Its of course, the case because of the whole structure of the company, which is been the fundamental red flag that has made investors nervous from the beginning. This notion of variable interest entities during the entire allows you to split things down. Should investors be nervous . They should think about what this means. We talked about alibabas ipo. Most of the document was around the ecommerce business. Its creating Strategic Value in the long term. Its probably not going to be that material to these acquisitions alone. Alibabas Balance Sheet and income. It will be a different matter if theres something wrong with the core business that has not disclosed. What about the breadth of the acquisitions . The buddiesquired ranging from pharmaceutical Data Companies to department stores. How would you advise investors, given the wide variety of companies they have their hands in . Its a long history of companies and technology have tried to put together conglomerates. It almost never works. It is hard to believe that this will be the one that finally does. I understand the argument, with respect option element. Standpoint, we are worried about positive and negative option allete optionality. If you have a diverse range of acquisitions done very quickly, there is a high risk of material ity. Tive optionala it makes me much more nervous. Know a bit about alibaba steam it. They have been active. How they actually work . I dont know them personally, but they have been active in the valley, especially in the last three to four months. They have taken a big stake in a Gaming Company based in san francisco. They took a big stake in tango. They were said to be in talks with snapchat. This is hundreds of millions of dollars in investments. We reported those talks have stalled. As far as we know, they have stalled. I agree that investors there is Downside Risk in the sense that you can place all of these beds, and even if they werent Due Diligence problems, how do you execute on something this brought up . Im bullish on ali baba. Together,ing these they make sense. They are about mobile, commerce, or engaging users. How foolish are you . This is on track to be potentially the biggest ipo in history. Not the largest tech ipo, the largest ipo in history. After wildly nervous . Im that. This is a dangerous ipo in many ways. Its unprecedented in terms of size and scope, its unusual structure. There is so many things. And the new cv small red flags beginning to accumulate. I applaud the innovation, but as an investment vehicle, im whatever comes after wildly nervous. From bullish to wildly nervous, we have both sides. Stick around, we have more after this break. Smartphonee cuts subsidies. Could this spell trouble for apple and samsung, and who stands to win . We discussed, next. Welcome back to bloomberg west, im emily chang. Impactbsidy cut would higherend phones like Samsungs Galaxy line. It comes back to the Chinese Government telling three carriers to lower marketing expenses. Who stands to win . Yu, andth me, crid paul. How bad is this for samsung and apple . Im torn. On the superficial side, it has to be bad news. Sold are of phones sold with the subsidy. It goes to the most expensive phones. On the other hand, one of the issues is that they are selling to very affluent customers. Its untested how much of a difference it will make when you are ready spelling and expensive phone selling an expensive phone to an affluent customer. I dont think it will be as dramatic as people are making it out. How big is this for the lowercost guys . Its adjusting, because this comes on the heels of a great i and lenovo. Iaom they have overtaken samsung. Everybody in front of them are local chinese manufacturers. This would only accelerate how quickly these midend domestic chinese suppliers are doing. Particular, to sell all their things direct. They dont sell any subsidies anyways. This can only help them. Apple fought for years to get to be sold by china mobile. It just happened six months ago. This is something they have been working hard on, and the relationship with the Chinese Government, now this. Mobileflipside is china really wants the new iphone product line in september to be available immediately in china. It hasnt changed the emphasis on iphone products. Its really a question of economics rice electricity. Elasticity. History tells us not that much. Less than you might think. It will benefit the lowend customer, and a matter what happens. Apple also now storing user servers in china, which is sort of unorthodox for u. S. Tech company, which is part of the reason u. S. Technology companies have had so much trouble breaking into china. I think it will be very interesting. Thatood news for apple is they are not even in the top five. There really a niche player in china. I agree they will see some downside effect, but not too much. I think the fact they put servers in china mean they are more committed to being a chinese player. It could be interesting. I wonder, paul, will we see other u. S. Tech companies laying by playing by these rules to get the foot in the door . Is brutally clear. You can look back over the last three or four food fights that the blood had with the Chinese Government. In the end, you are forced to do something because it is becoming such a huge share of Tech Companies business. Of increasingly forced to play ball, which is further involving the Chinese Government to do more. Its a nasty cycle. I wonder, beating about samsung, we talked about their market share flipping worldwide. Been challenged by the lower end players. They just came out with a new galaxy also phone. Alpha phone. Is that the wrong strategy in china . Its hard to say. They are certainly under siege on all fronts. That is something that has played out over the next asked the last four quarters. Her member nokia remember nokia . Everyone is wondering about that. Samsung has been very nimble in the chinese market. Uplove to see public shoring of the mid and business. Lets see what happens on the highend. They are quite vulnerable. All, how much do samsung has story have to worry . A lot. They have very little bright halo in terms of being able to support brand price. Apple has that going for it around the world. The same kind of aspirational luxury product. They will face price pressures and branding pressures. That will happen more and more as subsidies come out of the business. Thank you both. Speaking of samsung and apple, can synthetic sapphire be the answer to cracked smartphone screens . We will be back with apples latest material moves, next on bloomberg west. Welcome back to bloomberg west, im emily chang. Apple wants the strongest most glass most scratch proof for the new iphone. They are looking at sapphires. Apple invested 7 million to produce synthetic sapphire screens. We may see this glass used for the large screens of the two new iphones releasing in september. Ryan joins me in the studio, and this is not like the jewel crushed up. This is synthetically produced sapphire. Is it really going to be that much better than gorilla glass . It has the potential to be. It is one of the strongest materials out there. It would be kind of a classic apple move. To use a different material that really only they have access to, and this level of quantity, in order to differentiate it from anything else. But 700 7 million, million they are investing in this collaboration. Really glass actually came about on a mass scale because steve jobs wanted it in the iphone. Potentiallyle is raising the bar. But it will add costs. And it could potentially add weight to the phones, write . Right . Essentially. I doubt it will be noticeable to any normal user. It might show up on the scale. When you have a screen substance that is actually much more durable than gorilla glass, you might be limited center as well. So you could counteract that weight. This is text but apple textbook apple. Withve cornered the market memory and cameras. Anytime they can create a technological or materials advantage for their phone, they will go after it. How manyt tell you iphone screens i have cracked. Im very excited about any sort of advancement. Gorilla which produces glass, says it out forms sapphire glass. Were corning, i would be saying the same thing right now. Would you be worried . Im not too worried. If apple is going to make that move, they will do so for a reason. If were talking about just pure sapphire versus gorilla glass, maybe. But there is no reason to believe that sapphire can be treated with everett substances to make up for some of the differentes substances to make up for some disadvantages. Its use in plain windows and armored vehicles. Thats pretty cool. There is no question, it is probably going to add cost to the phone. Andwill it be worth it, will it create a Customer Experience that is better . If there is one thing on the entire phone that you literally cannot have rogen or cracked, it is the screen. Broken or cracked, it is the screen. Up,case can be scratched the camera could be two. This is a focus for apple, it makes a lot of sense. What about the reflection . It might be more reflective than gorilla glass. I think it is possible for sapphire to be treated. We have seen different kind of of phones. All kinds how excited are you about these larger iphones . Im always excited for the new iphones. Im really looking forward to it. Im not entirely sure it is going to be two different sizes. I think a small, medium, large will be a few too many choices. I think a regular sized iphone and a larger iphone might make a little more sense. When you think about all of the t things they have to manage, when iphone is really 30 to 40 areas. Thats a lot of product to manage. If im going to take a guess here, i say they will introduce one new model, not two. Something sub five inches. Fiveandahalf is too big . Thats kind of ridiculous. We were talking yesterday about the Samsung Galaxy alpha, which is this new phone they released stealthily. Looks a metal casing, it five, the effects arent as good as the Samsung Galaxy. Are we seeing samsung just throwing things at the wall to see what sticks . That a samsung strategy. It has always been their strategy. Thats why they are in every industry in the universe. They have the means to just throw products out there and try things, and see what works for them. I think they are not only feeling threatened by apple, but midto lowend. They will be trying a lot of different things. Do you think we will see a strategy shift from them . Thereve been reports that their head of mobile is under a lot of pressure right now, given all the market share that they have lost. I think it is likely they will try to read group on the stuff. As long as they are in control of their own destiny, and google is with android, they will have a really hard time differentiating. This is the same play we saw in the pc space. They have some real work to do if they want to be able to properly differentiate. Ryan block, as always, thanks for stopping by. Sharkscks are damaging underwater fiberoptic cables . Thats what google says. And we will at why, look at plans to prevent a sharp rknado from attacking the internet. Its 26 minutes after the hour, which means bloomberg is on the markets. Im julie hyman. Inhave had declined today concerns on tensions between ukraine and russia. We are not seeing huge declines, the s p down about one third of 1 . Individual stocks, were watching monster beverage and cocacola. A 70 stake in the company, and both are stopping swapping some grand. Under this agreement, the two companies will combine marketing, production, and is region of the drinks. Monster, which are really relied on coax for distribution, will get their access now to international markets. Story,ng to a recent this is something that coke had considered in the past. They decided that the owners were asking too much at the time to buy it outright. Bloomberg west will be right back. Bloombergwatching west, we focus on innovation, technology, and the future of business. Im emily chang. Tech related words getting an entry into the dictionary included binge watch, catfish, dox, listicle, and subtweet. They will be included in the official Oxford English dictionary. Does that mean you can use them on scrabble . Everyone is doing it, from your friends, families, all editions, and top tech ceos. This is the ice bucket challenge. A Viral Campaign raising alseness, and donations for come also known as lou gehrigs disease. The premise is simple, dump ice in your head, and challenge others. They complete the challenge, or make a donation. Take a look at microsofts ceo getting iced. 1, 2, 3, [cheering] he threw the challenge to other tech giants. We will be watching to see if they accept. Is the medications a marketing officer for the als society. Success of this campaign, the viral they sure of it, has been pretty incredible. How please with you how please are you with the success of this . It has been amazing. We are incredibly thankful for the tremendous outpouring of support. Tell us how this got started . Its an incredibly important cause, its a disease that is not well researched, not necessarily wellknown. Started, i wish i could say i was the pr genius behind it. Really, they got started by families and individuals in boston and new york, two of them have the disease. One of them is a 29yearold, and he and his family really got things going, and to give viral in massachusetts. Middleek, it was in the of boston common, this week it is all over the country. Where did they come up with the idea . Im not sure. That is a good story, we will have to investigate that one. How much money have you raised, total . The Als Association has million, as of this morning. Thats compared to about 1. 5 million in donations during the same time span last year. We started noticing an uptick on july 29, and from there, it has grown every single day. , ifhe way it works is that you do the ice bucket challenge, technically, you dont have to donate money. Isnt that a little counterintuitive . I think the numbers speak for themselves. I think what people are doing is taking the challenge, they are challenging others to dump ice on their head, or donate. But what people are doing is dubbing eyes on the head, and donating. We says a lot about the commitment that people have towards this exciting campaign. Said why paye have money for ice . You just give that money to the Als Association . The monetary contributions are so incredibly valuable to all of the als charities in this country. But what is incredible valuable as well is the visibility that this is generated for disease week, onlyto this about half of the American Public even knew what it was. Just so incredibly grateful because awareness is such a big hurdle. And finding treatments, and a cure for the disease. Special to me suffered and died from als. The process was so fast. Can you give us an update on where research stands when it comes to a cure or treatment for als . Research has never been more promising, when it comes to als. There have been more breakthroughs in last years than ever before in the history of the disease. Back to the late 1800s, when it was first really identified. Of course, we just celebrated or recognized the 75th anniversary of lou gehrigs famous farewell speech. That awareness moment was really significant. The awareness that this is generating, in 2014, i think people will be looking back on this for a long time. Its a real game changer. Wheres the money going . I know there are various Clinical Trials and experimental drugs out there. How are you guys actually using this money . We have a three prong mission at the Als Association. Research is inequitably important part of our association. We are funding 98 Research Prospects project. We announced 3. 5 million in added funding. We are excited about what this means for the Als Association to move research forward. We are very active in Care Services and working with patients and their families to ensure the very best multitudes multidisciplinary care. Public policy effort advocating for change on capitol hill and in states across