tv Street Smart Bloomberg April 22, 2015 3:00pm-5:01pm EDT
alix: welcome to the most important hour of the session -- we have 60 minutes left until the closing bell. stocks are climbing toward the record as investors weigh quarterly results from coca-cola to mcdonald's. we have treasuries sliding on speculation interest rates will climb this year. and we are counting down to earnings from qualcomm, facebook and ebay. "street smart" starts now. here are the top stories we are watching ahead of the closing bell. goldman sachs is seeking to raise about $3 billion for a
fund in infrastructure. the fund will have a mandate to buy a variety of assets. goldman plans to complete the fundraising by the end of the first half. double line capital's jeffrey dunlop bought $20 million of puerto rico's junk rated bonds this year. puerto rico securities have traded at distressed prices for more than a year under speculation it will not be evil to pay it $73 billion of obligations. a group led by tony ressler winning the bid for the nba's atlanta hawks according to a person with direct knowledge of the matter. the sale price was $730 million the second-most ever paid for an mba team, behind steve over par's purchase of the los angeles clippers. the person requested anonymity because the sales process is tried it. we have less than an hour to go
until the close of trading. scarlet fu has an overview of the trading. scarlet: you have u.s. stocks within spitting distance of a record high. .5% shy of matching it personal best set on march 2. the earnings we will be bringing you after the close -- facebook qualcomm and ebay -- a little positive momentum heading into the earnings release will stop for facebook profit is seen rising to $.40 and sales are set to increase to just over $3.5 billion. add revenue is seen to increase with mobile ad revenue making up 72% of the pie. for qualcomm the big issue will be about margins going forward because of pressure from rising cost and the mature market. we are still looking for earnings per share of six point
$2 billion. some kind of split up between the chipset business -- we will wait to hear what kind of response they give on the conference call. from ebay, more details is what investors are looking for at the timing of the paypal's been off and the agreements between the two come -- two companies. cantor fitzgerald is looking at what kind of impact that will have on the second-quarter forecast to stop first quarter total payments 22% versus one year ago. alix: lots of numbers coming out after the bell. officials are meeting with comcast representatives today and they are not likely to be swayed by promises to change its behavior. that is a far cry from back in 2011 when the doj allowed comcast to buy nbc universal.
what is so different right now? i'm joined right now by our washington correspondent, peter cook. any new developments? peter: i do have some breaking news, but the meeting has begun. we saw a short time ago our crews saw the comcast attorneys arriving for these conversations. this is an opportunity for comcast to make a place to the justice department. it does not reduce competition and there is no overlap between these two companies and the deal should be able to move forward. there are concerns about the scope of this combination, so the question is what is happening in that room? what is it the justice department wants to see in terms of letting the move go forward. alix: what is the next process
in this? peter: we need to find out the $45 billion question -- what is it the justice department would like to see to give this deal the green light? what they like to see a divestiture of certain assets? high-speed broadband customers would be under this combined company. would they be asked to get rid of some of those subscribers in chicago, new york or l.a.? we just don't know at this point. comcast making the argument that this deal should meet the test of the government and move toward. alix: and the lawyers are meeting right now. for more on the prospect on a comcast and time warner deal, i'm joined by law partner that deals with m&a and cross-border deals. and joining us over the phone is a founder and partner that
covers cable companies. you put the odds of this deal getting done at 60-40 in february. what are they now? guest: they are certainly no better than a coin flip and they look like they are getting worse every day. i think what peter said is exactly right. doj generally prefers structure revenues to behavioral revenues. if they would like to find something comcast could spin off to satisfy antitrust concerns it's not clear in this case but that would be. this may be a tough one for them to satisfy. alix: you have some great perspective on this because you represented anheuser-busch when they were dealing with something very much like this. the doj had a suit to block the deal but there was a settlement. guest: that was in the
acquisition of modello. in bit of --inbev was already going to sell that to constellation. what the government was unwilling to accept was the structure originally put in place, so we were able to redo that and come up with a permanent fix. i think the biggest issue is we are dealing with the sec and unlike other industries, there's a view in washington and a good reason to view that that when you are dealing with communications, there's a high level of public interest. the government in effect owns the airwaves. to a certain extent, you have a much higher hurdle. the example i would put is when directv, my client, was trying to -- when dish network was trying to purchase directv 14 years ago we felt we could have
gotten it through the doj but we cannot get it through the fcc. that may be where they end up today -- they can get it through the doj but not the fcc. alix: is the fcc the real sticking point? guest: it appears the doj is leading the charge, but they are both protests. the doj is a rule of law test and they may simply decide the vertical antitrust issues here cannot be remedied. it's a much more subjective public interest test and that opens the door to all kinds of general and specific terms. they got to fight this battle on two fronts and it's exactly right -- you rarely get these kinds of telecom mergers contested in court because if
the doj or fcc decides not to move forward with the transaction, you have to fight both of those battles. you ultimately have to declare war on your own regulator and there will still be a regulator after you win a case. often, the companies will decide it's not worth the price of fighting. alix: if you are a comcast lawyer, what would you tell them now? guest: the issue they have is they are a content provider. they are a broadband provider and they have a big stake in hulu. they are in a lot of different roles and they will have to deal with the doj again no matter what and they will certainly have to deal with the fcc again. i believe it is more likely if they were just dealing with the
doj, they would come up with a settlement. it's the combination of having to deal with the fcc and the doj that makes it a harder task. alix: the rhetoric out of this is if the deal fails, charter will make a bid for time warner. do you agree and at what price? guest: the $64,000 question at this point is the price rather than the if. they have made it clear they are interested and they were pursuing time warner cable everson's june of 2013 for a good six months. it's not exactly clear time warner cable will be anymore interested in being acquired this time than they were last time. what investors have been struggling with is where does that initial bid come in and if and when it does, is it going to
today, what kind of comeback does that tell you we are seeing in the market? guest: it's just a frenzy right now. it's driven by low interest rates. i think once the rates increase, you will see a step back. people are trying to get a deal while they can. alix: the housing data we have seen has been pretty yucky. guest: there's not enough supply and demand is pretty strong. we saw a soft winter but demand is up 50%. we track how many offers they are writing and demand is up about 50%. we have turned off all advertising because we cannot handle the volume of demand and still serve our customers. in the past five weeks, people have started to hear the tick talk of the clock. alix: who are those people that
are buying? are they looking for their second home? glenn: there are all sorts of people. we're seeing regular homebuyers people buying second homes, i would say anyone who can get the credit right now is trying to get in on the action, but the leader is the first time homebuyer. alix: we have too much overseas money flowing in their. glenn: overseas money, it varies market. what is interesting is the overseas market he's to be focused in san francisco and now it has moved inland. the chinese buyer, the indian buyer are really active. alix: let's talk about redfin. you have raised $166 million. "forbes" has ranked you as the next alien dollar company. what is your exit strategy?
glenn: we don't have an exit strategy. we partner with real estate agents to pay to put the customer first. wall street has been waiting forever for a new way to buy and sell homes. this is the disruption the industry has been really excited about, so lots of folks are piling into invest in the company because they feel not that we can sell it to someone else but because we can be a great independent, profitable business. alix: at what point would you go public? glenn: right now, there's such a premium investors are willing to pay in the private market. we are basing that analysis on what kinds of experiments we want to run when we stop learning and when we want to focus on purely execution. alix: i know you don't disclose
your sales revenues, but can you give me a hint of when you are profitable? glenn: we have been profitable in the past come but you don't raise hundreds of millions of dollars without investing it. we've got into markets across the united states and we have invested in scaling out our on-demand service so people can get into homes in a moments notice. these are investments that have taken the company pretty far away from profitability, but we feel confident it will come back because revenue is growing so quickly. alix: you are going to release an apple watch app. what do you think the demand will be for a device like that? that's a pretty small screen to look at a home. glenn: sometimes you are just walking down the street and you think it's a pretty house and you want to see how many beds and bathrooms that has. that's the kind of information you can discover on the watch. two thirds of our demand is coming through mobile channels,
so we have decided to bet big on the watch and apple decided to bet big on us, being a great development platform and partner to us. alix: thank you so much. the ceo of online real estate brokerage company, redfin. coming up, we are celebrating earth day by talking about making your art folio a little bit reader. we are watching facebook and ebay shares before the bell. we have a slew of tech earnings coming out after the closing bell. ♪
i will be speaking with new york giants'steve weatherford, who has agreed to donate his brain to science to assist with concussion research. what have you done for me lately? that is what the oklahoma city thunder said to its head coach. he failed to get the thunder to the playoffs this season. no word yet on who will replace him. half of the 41 fracking companies operating in the u.s. will be dead or sold by year end because of slashed spending by oil companies. this is according to an executive with weatherford international. the demand has left wells uncompleted because of low prices. happy earth day. if you care about the environment, you can invest in it. sustainable investment accounts for 30% of sustainable assets and is worth about $31 trillion worth -- $31 trillion worldwide.
my guest is from the forum for sustainable and responsible investments in washington, d.c. what is sustainable investment? guest: first, thank you for having me on on earth day. sustainable investment is using your investment dollars to both get a return and make a difference on environmental, social or governance issues. alix: what types of products can everyday investor buy into? lisa: individuals and institutional investors can look at separately managed accounts, mutual funds, credit unions and community banks, fixed income bonds -- the range of asset classes is really open to anyone interested. alix: how did sustainable investing go mainstream?
lisa: our numbers show in the last two years, sustainable and responsible investing has increased by 76%. globally it has increased by 60%. there is a range of elements that contribute to the growth and development. it's really important to talk about climate and there's tremendous interest in addressing climate change and a broad range of environmental issues through the investment process. that is true for retail investors, pension funds, and money managers. it is across the board. alix: how do you certify if an investment is green? how do i know that money is going to word a great investment? lisa: the same way you would look at any investment you're going to put your dollars and. you have to do your own due diligence. there are mutual funds and other kinds of topics that talk about
doing work in the climate space and clean energy space but you have to read the prospectus and do the due diligence. you can go on websites like ours and others and find out where some of those products are. alix: harvard students protested the university's investment fossil fuels. they were not successful, but what roles does something like this play in sustainable investment fields? lisa: what is interesting about fossil fuel investment -- divestment is it has a broader range of issues like human rights to ceo pay among investors who never thought about their invest vents as having anything to do with environmental social government issues. you can say it has been a broad catalytic conversation but the divestment movement what hasn't had a huge impact on university
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fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business. alix: welcome back to street smart. here are the top stories we are watching ahead of the closing bell. goldman sachs ceo lloyd blankfein says an interest rate increase by the federal reserve is unlikely but possible. life i was speaking at an event in south africa and says the u.s. economic recovery is further along than europe. and google is unveiling a u.s. wireless service project called -- it will be available in certain areas around the country and being offered a partnership with sprint and t-mobile network. it will cost $20 per month for basic features.
it will begin at an invitation-only basis. customers can request an invitation through google's website. and trust officials are meeting with comcast representatives today. officials are airing their terms about the proposed $45 billion tie up with time warner cable. officials are not likely to entertain comments is that the merged company would change behaviors upon approval. here's some breaking news in omnicare. let's get to achieve good correspondent scarlet fu. -- go to our chief correspondent scarlet fu. scarlet: the company is exploring a sale. omnicare, which is based in covington, kentucky and has just over 12,000 employees overall, is working with advisers to work with by best work with buyers. we can tell you if you look at the shares right now in trading
you have the pop on the headlines and then there was this slight leg lower. these headlines trickled out and now has resumed trading. it is now up 7%. i'm going to change it to a long return chart. of what you will see there is omnicare is trading at a record high. certainly had this egg steve up -- this big steep up. a partial victory in ruling over investor lawsuits regarding disclosure of information. legal problems not exactly over the supreme court decision. it pushes things back to the lower court. omnicare still has to battle it out. it doesn't have to defend itself in that lawsuit at the supreme court level. alix: thank you so much. turning now to greece. the ecb raising its cap in emergency funding to greek a desk greek banks as -- to greek banks as talks drag on.
default is necessary. reading from the financial times -- there is no eu ruling saying you have to leave the euro zone you default from your debt. wolfgang joins me now from the phone over london. thank you for staying up late with us. what scenario does this look like if we do have a default but not an exit for greece? wolfgang: it is possible greece does have a default and exit. what i am saying is it is not necessary. they will probably default a little bit. they may not pay the imf. they have to pay little bit of money to the imf in a. they may not do this. this may be a default. this is payments to do in july and august. some of this debt is coming due.
that will be classified a default. it depends if the european central bank may not call the trigger, as you said in your news report. the ecb has increased the emergency landing assistance. it may just do the same again. it a gift greece a bit more time to pay the debt. this is all negotiated. there is not an immediate threat of an exit. nobody wants it. it is bad for the greeks and that for the others. it is a terrible thing for the euro zone one of its members were to leave. it is not what anyone really wants. alix: what does this do to the leading party in greece? is it internally divided and where it is a it out altogether? wolfgang: that is exactly the issue.
when they got to power they campaigned to stand up to the creditors and to be tough on the creditors. obviously that did not work. the creditors have held firm. the party will now have to decide whether they will accept the terms of the creditors or not. they promised not to do it. he will have to decide if they will accept default and an exit from the eurozone or are they actually going to make a compromise and accept some of their reforms in exchange for more money? my guess is there will be another month or two a very strong and very hard negotiations. my guess is they will accept the terms. this is by no means assured because the party is split internally. there are people in the party
who do not want to make a compromise at all. alix: thank you for joining us. he is the president of the president of euro intelligence joining us from london. -- he is the president of euro intelligence joining us from london. regulators are accusing -- it went up $1 trillion from stocks in minutes. why did it take five years to catch him? joining me is bloomberg's keri geiger. give me the definition. keri: it is simple. you flood the markets with security, cancel those borders, and it creates artificial increase and decrease because of the activity around those orders. you just manipulated the price of a certain stock for securities or futures. alix: cmb wrote to the trade on
the day of the flash crash telling him to stop it. why did it take him five years to get this guy? keri: is the question we are all waiting to find out if there ever is a senate investigation into the somebody is going to get grilled very publicly. for prosecutors and for people investigating this case, this was an incredibly data intensive case rhythm to come up with with a really high bar to do criminal cases because they have to prove all sorts of things you don't need for a civil case. my guess is that is probably why it took so long. alix: and eight days after the flash crash the traitor did the same thing. it did not cause a flash crash. why is that? keri: he isn't the sole cause of the flash crash.
i think the complaint was clear in saying it was a conjuring factor and not the sole factor. there was a lot of other factors. it was a perfect storm of things that were happening that basically led to this. he traded 800 days using a similar type of algorithm. and there was no detection. this goes to the question of how is our market structure set up in a way to attack this kind of agree just trading? there are a lot of things slipping through the crack's and regulators aren't able to see. alix: carry, thank you so much. i would recommend everybody read matt levine's piece on this. coming up, playing defense. we are going to survey the news that survey the new landscape of this threat.
alix: large-scale publicized hacks has convince companies to invest in defensive measures. a network security provider is being bought from private equity firm vista. it will help down to break down and brought in capability is e.on serving the u.s. government and capitalize on emerging threats to private data. here to discuss how the red test to discuss the red-hot security market is the managing director of a pc firm turning cyber security investments. how much money are we seeing flowing into cyber security startups right now?
ron: i think we saw $2.4 billion coming from the cyber sector. clearly starting to gain some additional intention -- additional attention. alix: that is a huge number. ron: it is going to go up. i think we will continue to see that rise. we will be closer to $2.5 billion by the time we're done this year. alix: have you week through the companies that have potential from those that are not? ron: you see traditional providers, mostly firewall fs cell, encryption technologies -- fsl encryption technologies, and then there are more companies around data unrest. we are seeing energy what is happening in that of the network
versus primitive-based technology. alix: what is it like to get talent? is there a talent competition? i can't imagine everyone is well-versed in cyber security. ron: absolutely whether you are in silicon valley or insult lakes city -- or salt lake city the demand is huge. people who can successfully commercialize these products and turned him into viable enterprises as they go forward. technology is important, but just as important are the people who can make customers come to life for those companies. alix: you so much. founder and managing director at signal peak ventures. google takes the wraps off another new venture. the company unveiling a u.s. wireless service called project fi it is being offered in
partnership with t-mobile and sprint. we are joined by an analyst at pivotal research, who says there are plenty of reasons to be negative on google but he's still favors the stocks. brian, what do you think of this deal? brian: it is hard to say until you see the product in the field. nobody really knows what customer service will be like, for starters. know that you have to have a nexus phone which will limit the market. it is easy to over read into this. you can just as well spend time tried understand the balloons over new zealand initiatives or anything else that is unrelated to the core search business. alix: is this really unrelated yet help more people will eventually by phones that run on android because they want to pay just for the date of the use and then all of a sudden --
brian: you can make a case for a lot of things to be connected for court business. google is going to invest in what google is going to invest in. at the end of the day this is a pretty small venture by comparison unless they do have some sort of special sauce that makes everyone drop their career. -- job their carrier. i don't necessarily think you'll see this in the field. alix: does this mean i won't have to pay for verizon or time warner are my internet at home. brian: it doesn't sound like that will be possible. there are other carriers offering similar plans. t-mobile and sprint are competitive in different ways for the lower end. on the higher end verizon and at&t are going to be competitive in different ways. alix: and making you stick with me because we have facebook coming up and i want to get your take you coming up, facebook earnings after the bell, we are
alix: here are the top stories we are watching ahead of the closing bell. amazon customers will be able to order packages delivered direct to the boot of their car. amazon says this could be a first step toward allowing i'm customers to allow goods to their vehicles. tesla motors is allowing a customers to become a leader in storage. tesla is making a deeper push to be on the car business. facebook is testing a new app that will act as a caller id and allow users of the social network to block calls on their
mobile phone. it will allow users to see details about callers who aren't saved in their phone contacts. the company reporting earnings after the bell. still with me is brian wheeze or, -- brian. what is the number you need to hear? brian: fixed revenue growth is the most important thing. are they able to sustain momentum which i think they will. they have a difficult comparable . even a number below expectations could still be a very good number. they grew at 71% in the first quarter. right now i have a 45% total revenue of expectations for the quarter. whatever the number is, i think sustained momentum is the main thing. alix: facebook got about $3.4
billion in revenue from europe. what is the impact hear? -- impact hear? brian: they're hurting companies left and right. by virtue of having so much exposure, it is not just europe. every market around the world you are exposed to is really hurting your topline results. i think the market will be forgetting to some degree for that. alix: what is the biggest question you have had to answer on the call? brian: it is more about what they want to tell us. they are usually pretty forthcoming about their plans relative to a lot of their peers. google, for example. i think they give us a lot of nuggets. people are clear in understanding that facebook is here to stay. that is the question some had two years ago. alix: we have to go now
should be an intriguing political season. it has been a slow drift higher in u.s. stocks for the day. we have the big lift off just after the existing home sales report and we moved higher throughout the day. the high market came about 30 megan -- 30 minutes ago. we are basically stuck in a range here alex. since march 2 the s&p 500 and dow have approached a record high two previous times but a old each time -- but failed each time. the s&p 500 was eight points shy of setting a new all-time high. dow industrials about 200 points away from its best. the nasdaq has been a 15 year high now. the dollars little change. you can see 98.02 on the dx why.
-- on the dx. home sales rose more than expected. some say that makes it easier for the fed to justify a rate increase later this year. and we'll stuck in the $56 per barrel range. alix: as you pointed out we are minutes away from the closing bell. we are counting down to earnings from qualcomm facebook, ebay at&t, texas instruments, and las vegas sands. i'm here with lisa abramowicz. investors are focusing on u.s. housing data. sales of previously owned homes jumping by the most in four years. what can we say about the comeback in the housing income in march? >> i am optimistic.
credit terms are using for the term purchasers. it is not the ultra wealthy who have plenty of access to bank credits who are buying homes now. we are seeing a democratization of the housing recovery. we can't get too excited about just one month but march providing a glimpse of what the spring buying season will look like. it was strong across the board. we saw price appreciation, acceleration of the price appreciation, so we are growing a percent year on year now. six months ago we were growing closer to 4% or 5%. we saw broad-based gains. single-family homes were up. alix: sales were only 10%. part of this didn't play in the yield rally that we saw you go -- what part of this play the yield rally that we saw? lisa: it is more of an inflation story.
as carlson said it is too early to tell. -- carl said it is too early to tell. alix: the s&p up by 10 points. the nasdaq up by 20 points. as you take a look here at the s&p, we want to look at where we are in terms of a record. we are close. near about one percentage point here. we are looking at the highest level at one point since the beginning of march. we are moments away from earnings from qualcomm, facebook, and ebay. you will bring you the reports of those earnings as they come across. tomorrow's home sales figure -- also tomorrow we are going to get initial jobless claims. why is tomorrow different? carl: tomorrow matters because it is a reference week for the april employment service period. was it a hiccup or the beginning
of a more nefarious trend? claims have backed up over the past couple of weeks so we have to watch to see if that continues. easter is a noisy time of the year for jobless claims. as economists we are trying to discern whether this is just noise related to the floating holiday or whether it is actually a material backup in claims. alix: i do want to go to scarlet fu at our breaking news desk for some breaking news on cme. scarlet: cme, the home of futures trading, putting out a statement regarding the charges that the department of justice has levied against the damp. demands that the death against then. -- has levied against then. they go on to say the flash crash was not caused by the futures market. if there is new information that comes to light we will share it with the commission.
they are prohibited by law from releasing any individuals trading behavior including -- they are not able to comment further this time. cory johnson has facebook earnings. corey: i do. facebook reporting 3.5 billions of that alien dollars of sales on the -- $3.5 billion of sales on the corner. compare that to just a year ago when they had 2.5 billion. in one years time they went from $2.5 billion to $3.5 billion in revenue. earnings per share, $.42. they thought it was $.40, so it is better than what wall street analysts had predicted for the quarter. operating margins at 52%, that is good for any business. that gave the a net income of
$512 million. that is less net income than the previous year, but that is actual number. the non-gap number, the adjusted number taking out stock-option expenses $1.2 billion in profits are you a very strong quarter for facebook. -- in profits. a very strong quarter for facebook. i should also mention headlines crossing for qualcomm. cutting forecasts for the second half of the year. i think you have some of that. scarlet: this is something a lot of analysts were expecting from stockton. welcome is making it official by reducing its outlook for the chip business in the second half. when it comes to the quarter that just ended, this was a better than expected financial result. earnings per share was adjusted of $1.40, beating the consensus of $1.34. $6.98 billion in revenue last year. you know the forecast is what
everyone is fixated on. the earnings per share for 2015 is seen at $4.60 to five dollars. this is certainly at the lower end of what analysts are looking for and it is a reduction from a previous range. if you look at how the share front is reacting, we're looking at a leg lower in qualcomm shares after trading higher during the day. alix: thank you for the roundup on facebook and qualcomm. want to go back to facebook. any word on the dollar impact? we have been hearing that quite a bit from tech income -- tech companies. cory: i'm still just going through it. i think the more important thing for facebook is not currency related but the pace of growth. the financial results are just fantastic. to go from $2.5 billion to anything bigger would be
impressive. but to go from $2.5 billion to $3.5 billion in one year's time is a really impressive thing. i'm going to go through it a lot more, particularly about user metrics, engagement levels. i promise i will have that for you. alix: go get it, corey. at&t earnings are just crossing and scarlet has notes for us. scarlet: this is a better story for at&t when it comes to earnings per share. 63 that that $.63 beats the consensus by a penny. revenue increased by 3/10 of 1%. it was little changed for the period. those 32.6 billion dollars lower than what analysts had been looking for. at&t making comments about its bid for directv. it says it sees final approval of this deal in the second quarter and it is on track to close a separate deal.
it also season annual savings rate by year three after that deal closes. it is talking up this merger with directv. that all depends on what happens with comcast and time warner cable. at&t says it's these cost synergies -- basically cost savings because they are able to cut done a lot of operations because they have so much similar things. as the standalone view is on track. it is not changing anything when it comes to outlook. this was just first quarter. it expects everything to go along as projected for the rest of the year. alix: i want to go back to cory johnson, bloomberg west editor at large. more talks on facebook. have you got any sort of feel on the most -- on the mobile users? cory: facebook has a couple of really interesting data points. they tell us monthly activists
-- tell us about monthly active users. daily active users are the attics, on facebook every single day. then the mobile monthly active users, those are people using facebook on their phones or tablets, away from the desktop, which a lot of people believe is the future of computing. some pretty impacts of -- some really impressive statistics. all of the rates are growing at faster rates than they were in the fourth quarter p.m. in the fourth quarter daily active users were up 3% sequentially. -- fourth quarter. in the fourth quarter daily active users were up 3% sequentially. of 5% this quarter. monthly active users was 3% now 3.4%. that is a faster growth for monthly active users. and the mobile daily active users, these are people on their phones every single day.
that was 7.1% growth. up 1.2 5% growth -- 1.2 alien people, 5% growth -- 1.2 5 billion people, 5% growth. that is a china business they are continuing to monitor. alix: we see -- we want to get -- scott who is looking at that. scarlet: it is about 100 $80 billion shy of what analysts are looking or. the adjusted earnings per share -- the consensus estimate -- and all these other casinos. they relied on quite a bit on the cow for the revenues. -- on macau for the revenues. we know china's anticorruption campaign has meant a lot.
is it whales or sharks that a big gamblers? alix: we don't know. scarlet: big gamblers are not showing up at the tables quite as much as they used to. that is affecting bottom line for all of these casinos. adjusted earnings per share misting -- missing the consensus. alix: thank you. we will be coming back to you on facebook and just a little bit. thank you to lisa abramowicz and carl riccadonna joining us. we are minutes away from ebay's earnings as well. we will be right back. ♪
scarlet fu has those numbers. what do you have for us? scarlet: the important thing is qualcomm has reduced its outlook for the semi conductor business for the second half of this year. the reason why is for a decline in share of customers. earlier this month we had reports that the samsung galaxy s six did not use qualcomm chips. instead they use samsung's own chips. that may be a precursor of samsung using its own proprietary chips. there also some commentary -- there's also some commentary in this to improve operating margins. the second part of that is the usual talks from management. this is interesting because there happened pressure from activist investors are at split of its business separating the chipset business from the patent licensing business, and unlocking some value in that
way. qualcomm's responses in the statement for now. alix: thank you so much. facebook earnings also out. the company did miss on the top line number. joining me now for moore is paul sweeney, internet analyst on bloomberg intelligence. and cory johnson from san francisco. it is flat in after trading hours. what did you think? paul: they were pretty solid numbers. the eps a little bit of a beat. slight miss on the revenue that on the revenue line. -- on the revenue line. and in the mobile users, all right in line with what they were looking for. the number that is probably the most important for a lot of investors is a percentage of revenue coming in from mobile users. that was slightly above what the street was looking for. showing continued upward trajectory from revenue coming from mobile users. that is key for facebook and for
social media companies, because that is where usage is migrating from the desktop to the mobile devices and companies that do not have a five mobile strategy are getting left behind. alix: you're pointing out the monthly, the daily, the mobile active users were all good sequentially. why isn't the stock booming right now? cory: it is an expensive company as it is. the movement after hours, i would be surprised of than doing what they do, which is generating a ton of the cash flow and invest in the back. the number that jumps out at me right now is the rmb numbers. -- the rmb numbers -- the rmb&d numbers. think about spending $1 billion in 13 weeks. even with a gold amex i cannot pull that off. there's some bigger than they ever were.
they spent 30% of revenues on r&d in the quarter. a year ago it was only 13%. they are putting a lot of money back into this business to innovate for the future. alix: ebay earnings are just crossing right now. scarlet fu's looking at this numbers previous -- those numbers. scarlet: it is higher than the consensus of 70% and marks an increase from the same time last year. $4.45 billion. the consensus estimate was for $4.42 billion. this is a higher number than the same time a year ago. we have some commentary on paypal. ebay says paypal gained 3.6 million new active account in the quarter. that is the senate for the eventual split. in terms of the full-year outlook, it is real earning its forecast for the earnings-per-share. the revenue outlook looks a
little bit higher than what was expected. i'm going to continue to this because what everyone wants is some kind of detail on this upcoming split. alex thank paul, you are looking at the numbers here. if you take a look at the full-year revenues on the high-end it looks about $18.85 billion, which is lower. paul: there are a lot of area lily numbers. a lot of volatility around ebay earnings. the fact they were able to put up some numbers that were better than what wall street was looking for in the forward guidance, most investors will take that. the key issue is what is the timing and structure of the split? alix: you have that for us? skeleton john donahoe says they
are looking for a separation in the third quarter. we now have a timeline. that would be the third quarter of this year that a separation of ebay and paypal will take place. paypal total volume grew 18% in the first quarter. e-mailing was down. paul: they were talking back half of the year so some people were thinking third quarter. that is really key for this company because it's takes a lot of value creation on separating the payments business, which is the faster growing part of ebay, from the traditional auction business. alix: what did you make of that spin off in the recorder for paypal and ebay -- in the third quarter for paypal and ebay? cory: they want to own the
growth and paypal and consistency and ebay. how long is the growth going to be there? can this company continued to be on the innovative edge of payments? the world of payments is going through genetic change especially in the u.s. with a lot of laws taking place in the third quarter. there is a little look at all that says all merchants -- they will accept the liability for fraudulent credit cards unless their new crash it -- new cash registers register payment with a chip in it. these new payment systems at retail outlets also except wireless payments like google wallet and apple pay and paypal. paypal has an awesome opportunity coming to it right now. the longer we wait for the split out the less likely they will be the bissonnette. alix: coming up after the break lots more on ebay.
alix: ebay seeing the paypal separation completed by the third quarter. for more on the company, ebay's shareholder -- obviously you own the stock but there were a lot of concerns that ebay wouldn't be able to recover after this marketplace had a purity breach. what does this quarter -- had a security breach. what does this quarter due for ebay? bill: we would agree with corey that paypal is wonderful and only going to get more wonderful.
we greatly disagree with him on the other side of the transaction. the currency, the negative effect of a huge move in the united states dollar covered up significant improvement in the business. i think people drastically underestimate what a company with $3 billion of free cash low end a group of mary -- of very motivated employees will do to compete in the online marketplace with a standalone ebay. companies had split themselves up in the mid to late 90's. cognizant is probably a much more successful company than it would be if it were held under the umbrella. everybody looks at the big brother paypal and says they are so wonderful, they are just trying to get at that.
they are going to reinvigorate and energize both companies. alix: what do they do to invigorate ebay with all that cash? what do they have to buy? bill: that is a good question. i was watching a sports event last night and somebody said that is going up on ebay. there is unbelievable yet unadvertised brand awareness of ebay that is not being capitalized on right now. amazon is the 600 pound gorilla and they are doing a great job if your object is not to make a profit and to generate free cash. the object of the business -- the thing a business was due to generate remarketing cash flow. ebay will generate 3 billion and
free cash flow in 12 months which is 2.5 million more than last year. if you are owning the entire ebay marketplace business, you have to figure out what to do with $3 billion per year. that can be used to advertise to improve technology systems. it can be used in every way. alix: how about buying at sea -- buying etsy? bill: there are all kinds of things you can do. if you are just gushing cash all over the place and you are very motivated -- the management team of ebay is being treated like a lonely stepchild. once they get split and start doing things on their own, you watch how aggressive they are attacking this marketplace. their customers don't get their
alix: welcome back to "street smart." we had a slew of earnings after the closing bell. activities desk. scarlett is looking all caps or hours action. -- looking at after hours action. we now have a timeline for the separation of the business from paypal. scarlet: it will be the third quarter as ebay put it. the top just -- and thus far was for the second half of the year. also ebay cutting its full review by people not responding to that so much. qualcomm is seeing a drop of 2% in after-hours trade.
profits beat estimates, but salesman. -- sales mix. qualcomm blames it on a decline in share at a large customer. we know that samsung was not using qualcomm in some of its galaxy s phones. that might be a precursor of who this a customer is. i like to add with facebook. for the first time since 2012 mark zuckerberg and company have missed wall street's revenue estimates which will lead to more scrutiny on how facebook is its money. advertising is what this is all about. advertising makes a 94% of facebook annual revenue. you can see how it is breaking down over the last 11 quarters. the green bars show mobile advertising. the orange show desktop advertising.
clearly desktop advertising has stagnated. it really hasn't gone anywhere, whereas mobile advertising has multiplied and expanded rapidly and is now more than double the revenue that desk top advertising brings in. alix: thank you scarlett. cory johnson, from bloomberg west is joining me from san francisco. what is the biggest standout? cory: a bunch of things stand out. one negative number, not just facebook cheerleader -- payments were down. other companies went public before facebook and a thought payments could be a big thing for these guys. they have actually went down on a year-over-year basis. the first time it has ever declined. when we were talking about where is facebook going to go, how
they can do business be largely dependent on other markets? first of all, the u.s. is not their biggest market anymore. asia is bigger. so is europe. but their growth in the u.s. was nearly double in the most recent quarter than the prior quarter. they went from 1.2% to two and a half percent. that is impressive they can accelerate in their oldest market. it bodes very well for them. alix: thank you so much. staying on tech many companies are looking into expansion into china. joining us now is a pulitzer prize-winning who studied china as a former reporter and is the author of the book and is now a senior managing director. thank you for joining us. one thing that came out in the qualcomm quarter.
the majority of its revenue comes from china. it still says it is not being paid for what it is owed on its technology. how hard is it for tech companies to work in china right now? guest: it's incredibly hard. but they are also very apprised of the situation. they have to know this is always a risk going into a country like china. alix: is there a better practice that companies can do when they want to expand their? food issues with sourcing chickens and such. guest: one of the most important things is for companies to build a relationship with the particular officials that are governing their industry. that still is not a safeguard because again it is ruled by man, not ruled by law. the top brass, if they want to say we want to look into the foreign market, we had a few
scapegoats. the foreigners are the ones to go first. alix: you are the author of a national bestseller. earlier today you spoke at the games for change. all dealing with the quality for women. it is a huge issue across the globe. you have a video game on facebook about this. why did he think that was going to help and what is it? guest: it is very unusual for a game to be about a very serious topic challenges facing women and girls around the world. what was in the book was tragedy, hope, fun and also inspiration. games can embrace all of that. games are powerful. they are tools to reach new people. we don't want to preach to the choir. we know that book reading is not america's favorite pastime. so it was very important to use different medium. games are way to reach people
where they like to be reached. alix: 1.3 plus million users. $500,000 in donations through the game. and you also raise other things like books, donating surgeries for women. what is your projection for the next 6-12 months? guest: what we are doing now is taking this overseas. the game was focused on the u.s. of course, you can access the game anywhere. but now they are deploying it faces like health clinics in kenya to teach people more about what goes on on the ground in those places. in india as well we have mobile games. in the local language to reach people and educate them about what happens when a woman goes through pregnant the. -- pregnancy. what happens each month. this game can reach a broader group of people, including here in the u.s. most people are not going to think about what is going on around the world. but maybe they will be enticed
into playing a little game that will teach them. alix: when you look at the global aspect of where women are, is there a country that has the best growth trajectory, and what is the worst? including women in their society and moving ahead. guest: we are talking about the developing world. so the developed world has done a lot. rwanda has done far better than in some ways, some developed countries have done, in terms of percentage of women in parliament and in leadership positions. we still don't have a woman president. there are a few women presidents in african countries. we have a ways to go. but they have a much farther half travel because on average, women are not treated very well in the developing world. china has made a lot of progress. it obviously has had a very tumultuous history that brought in there.
communism he everyone, but we don't want to go to that extent it but china has really lifted the status of women. they can work, they can run companies, they have not yet gotten to the very top, but they're getting there. alix: so great to have you. amazing perspective. thank you for joining us here. coming up next, the new film "ex machina" is changing the way special effects are brought to the silver screen. i will talk to the director and writer on the other side of the break. ♪
enter the building along with an outside lawyer, therefore about one hour. when they left by side entrance, she did not have anything to say. on the substance or whether or not they had made progress. the backdrop, real concerns at the justice department about the combination between time warner and comcast. the question is did the move -- meeting move the needle at all we have to see. alix: thank you peter cook. moving on to robots. for less and $12 million artificial intelligence has been brought to life on the silver screen. the new film "ex machina" with made on a tight budget and has been getting rave reviews for its portrayal of beauty and robotics existing as one. with me is to explain the films writer and director. congratulations. guest: thank you. alix: i saw the trailer over the weekend and it scared me to
death. what was it like to put it on film? guest: it was good fun. cheap movies had a good five around them -- vibe about them. we shot a chunk of the movie at bloomberg offices in the u.k. the opening of the film is set there. and little areas and killers, we used that. alix: what was it like to create that for $12 million? $50 million, still very low. guest: it is. it means you have to be very careful and you can't overspend. everybody on the film has to understand that is how you are making it weird that affects the actors here it they can only do it a limited number of takes. you have to pull it together. alix: your career has spanned
creepy topics. you wrote "28 days later. " " sunshine" which is a crew that goes to the sun. what is the fascination with this destruction of the world theme you seem to have? guest: for what it's worth, this particular film is slightly more positive . the ai is kind of the hero of the movie. the ai is the protagonist. alix: what are you working on next? guest: i just delivered a script to the studio, about a book called " annihilation" to try and get it made. alix:congratulations on your movie.
meriwether is expected to happen in just over one week at the mgm grand. who better to discuss this then five-time world heavyweight champion evander holyfield. he went 44-his pro career. 29 by knockout. such a great pleasure to have you here. guest: thank you. alix: does this site has the potential to give boxing a new life in america? popularity has been waning a little bit. guest: yes, i truly believe it can. i think that it is. everybody boxes back home, free television, a lot of people saying i would like to have one of those payday that mayweather has. alix: and you are going. you are working with an auction on ebay right now to get a seat sitting next to you during the match. tell us about it. guest: we have this fight, you get the opportunity to sit beside me, you get a free lane trip -- plane trip, and quest bars for a whole year. a lot of great things. alix: what about their work at the madison square garden? talking about crazy awesome fights, madison square garden will be home this weekend,
klitzko versus jennings. guest: this is a heavyweight championship fight. to get the chance to fight in madison square garden. this is a great thing. people should be excited about it. but this is the fight. so jennings has an opportunity to beat klizko. alix: are you going to be there? guest: yes. alix: mike tyson said he was cheating out of -- cheated out of earnings. what do you think do you feel that you were cheated with don king like my tyson? guest: no, it did not happen to me. unfortunately things happened with some fighters. that it depends on who they have in their corner a good attorney and all that. it is hard to let one person control everything.
alix: speaking of fighting, you are going to be fighting mitt romney? for what? guest: it's a hundred thousand people, may get the opportunity to get there i sent back. it is a charity thing. it works. to get their eyesight. alix: do you think he can take you? guest: he will do a great job. i am going to do a great job, but at the end we all win. we all win. you know, i'm not -- it's something that will work for both of us. alix: ok you're going to give me a boxing lesson if you don't mind. when i was fit i might have thrown a punch or two. guest: ok. the thing is, this way. the reason why you want to have your hands up, because if i
swing at least you can block it. either this job. this one. look at that. you're putting your hands into it! 12. . on. alix: what about undercuts? guest: you don't need the uppercut. you want the job and the right hand. you want to get them out there first. when you up or cut -- uppercut is for people have experienced. if you drop your hand then it will hit you. they could knock you out. alix: thank you for the lesson. ironed it today. you are going to stick with me. i really appreciate the lesson. more "street smart." after the break.
alix: this is "street smart." i'm alix steel. $1 billion is the settlement between nfl and ex-players with head injury cream -- claims. i judge decided on more time for former athletes seek compensation. joining me is an nfl star who has been willing to donate his brain designs. steve weatherford. thank you for being here. guest: big fan of the show. happy to be here. alix: what do you think about that? perhaps $1 billion. guest: you can't really put a
dollar amount on your health and your quality of life. but the fact that there is compensation being given the fact that it is not just athletes affected. their families and friends. i have been blessed enough to be in the nfl for 10 years. seeing what happens to these players and how their bodies get ravaged the most important organ you have in the body is your brain. a dear friend of mine took his last several years ago. they did not say it was because of the injuries sustained while playing 20 years in the nfl, but i know the guy and know what he was about he never would have done that if he was not struggling with issues. i'm glad to see this happen. the people that laid the foundation for what the nfl is today the most entertaining sport in the world, to see those people be compensated now is
good. alix: compensation sounds great but you really need to prevent the injuries in the first race right? what steps can happen to help layers -- players? guest: that is one of the reasons i decided to donate my brain. i want to inspire other players to do this same. if we want to make this game safer, there needs to be researched to figure out what the genesis is that this problem. als, memory loss, anxiety, depression. all of these things affecting these people. it is happening earlier on and what it would happen if you were not a ballplayer. it is a great game, physical game. i don't think you will be a bit -- be able to take the physical context out of football. it is entertaining and that is what people want. but the sad reality is, you cannot take concussions completely out of the game.
but the nfl commissioner is making the national football league a safer place to play. but it is one step at a time. more research we can do to figure out what causes these ailments then the safer this game will be for generations. alix: mr. good balance doing something. well be your number one message to him right now? guest: what if it was your son? i'm a father. i have a son and three daughters. it is a business but at the same time the commodities are not commodities. they are humans. he knows that and i think he is putting great effort forth to make the game safer. but it is a very large task to undertake. alix: great to have you on this topic and moving forward, and the potential settlement. thank you steve weatherford. i have to look at your ring. guest: i had to bring it in. alix: ladies like it.
>> i am evander holyfield. with all due respect to mitt romney, stay away. ♪ mark: on the show tonight, bill de blasio says he will not run, and the cook brother -- first, benghazi. we learned that the house investigation might not be released until next year, maybe before election day. on the house be