Dell Deal: Market Makers (08/02)

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Aug. 2 (Bloomberg) -- On today's "Market Makers," Erik Schatzker and Stephanie Ruhle use analysis, insights and A-list guests to help set up your daily market trades. (Source: Bloomberg)

Where we have come from from the first half of the year, i would like to think that, during the second half, more profit taking will take place between 1700 and 1800. any pullback more than 2% or 3%, that is going to prompt action from us.

That does it for on the markets.

We will be back in 30 minutes.

Michael dell screens his bid to take the company private.

Will this be the offeror that finally wins the day?

Unemployment hasn't been this low since president obama took office.

Mixed signals about the economy.

And spread the word and hummus is hot.

Good morning, happy friday.

This morning's top company started by far, nothing comes close.

Michael dell will sweeten his offer to take the company private baby has -- private.

He has reached a deal with the board.

Offering $.13 per share special dividend.

The shareholders meeting was supposed to be started right now.

When will a have a chance to vote is deal up or down?

That will be the day the shareholders will do a deal.

We will see carl icahn and can you to press delaware judges to intervene here.

Because what he will argue is that they made two major sessions to michael dell on his voting.

One that allowed short-term holders to become more of a bigger position and a potential voting pool.

Then you have this relaxation of the voting requirements.

Both of those factors will make this easier for michael dell to win the vote.

The big question is whether or not our icon will be successful in stopping that.

-- carl icah n will be successful in stopping that.

I just heard and there will be an announcement about an annual shareholders meeting.

That sets up a proxy fight between her like on an michael dell.

-- between carl icahn and michael dell.

It is up to a door court to determine whether or not michael dell is or not successful.

We should point out that the market is as good of a place as any to find it will happen in the future.

The market is effectively saying that the deal has a good chance of getting done isn't it?

Yes, but the market has been quite wrong for some time now.

It was trading down just a couple of days ago significantly thinking that there would not be a new deal on the table.

This is not the typical series of events that unfold in these kinds of deals.

Delaware, under delaware law directors can move around and adjourn special meeting dates.

They do not do this multiple times because it supports the idea they are just doing it to give some leverage to potential buyers.

And that is not something they like to see and it really supports carl icahn's point that you can't do this and were these concessions legitimate?

Why couldn't you increase the price of the deal without those very special shareholder protections being removed.

I should point out that the meeting has been officially adjourned a couple of minutes ago.

It isn't happening this morning, we've seen this play out before.

Let's talk about what carl icahn does next.

Does annual meeting need to happen before september 12 and if that is the case, can we assume -- can we make the ascension -- kerry make the ascension?

The companies by was a set of the expedition at the annual shareholders meeting has to be held within 30 months of the last one.

The last one was july 13 so that means they have to have one on august 13. they actually do not have to do that.

What will likely happen is that carl icahn will go to court or other shareholders will go to court and say we want the shareholders meeting to come before the vote because we would like to launch this proxy fight.

Then the court decides when the annual meeting will happen.

Like i said earlier, we will know by the end of today when the company decides to hold the meeting whether or not that passes muster with the court is a different question.

Yesterday we were talking about a deal fatigue if people were tied about this, can you imagine how they feel about it now?

Cristina alesci covering the data at the latest on dell.

Let's bring in a guest that owns four point -- 1.9 million shares of dell.

Great to have you here in the phone.

You have called michael dell's previous offer inadequate, what do you think of the new one?

Does it change her mind?

It doesn't change our mind but it does change enough shareholders depending on recent discussion, depending on how the judge and dell rules.

You say it's not enough to change your mind, but it could change enough people's minds.

Do you believe that this is at $.13 a share in a dividend enough to put the ball over the goal line question mark -- over the goal line?

If the ruling goes in favor of dell in delaware than this will put it over the line, yes.

Is that just a perception you have or have you actually found it out in discussions with other shareholders what it would take to get this deal done?

I just don't think they would have done it otherwise.

They would've thrown in the sponge.

He on recent feels there is a high probability or else he would not have done it -- he obviously feels there is a high probability or else he would not have done it.

I think that is in the cards.

In other words, carl icahn already said what he was going to do.

In fact, he has filed suit.

Does that cause more legal headaches for dell?

Again, now a lot of these things are left in the hands of the judge in delaware.

So, carl icahn has filed a suit and they have to respond set a hearing date.

If you were carl icahn right now -- and we know that you feel similarly about what della needs to do and to value the company should have -- what would you do if you were carl icahn?

Ask carl icahn.

Do think the dell special committee is working in the best interest of the della shareholders?

I think the last several years has been an indication of not very effective capital allocation.

I do not think the record speaks very well for either the management or the board of directors.

The board of directors -- there is something called cya in the board of directors clearly wants to be in a position where they minimize the potential legal hassle they might have.

I think that is one of the reasons they have gone through this process so they can defend their position.

If that is the case and you believe the board is guilty of cya, would you encourage carl icahn to wage a proxy fight to take control of the board and ultimately determine the future of the company?

Again, talk to carl icahn about what he's going to do.

It doesn't matter whether i want him to do something or not, he will still deal it -- he will still do it.

If he is trying to solicit the support of shareholders, he will need support of people like you to win a proxy fight.

We have been on record as to where we stand on that for a long time.

We have not changed our position from the very first time that this was announced.

How much higher would michael dell and this overlay cap to bump of this offer to get you on board?

That is irrelevant.

What is relevant is has he gone up enough to get enough votes assuming the court approves the change for him to get in.

He obviously thinks that he has.

All right, thank you so much for joining us.

When we come back, the president economist -- the chief economist will be with us.

Can he defend a disappointing jobs report?

And we will talk to one of the taste making ceos.

? you are watching "market makers." at 830 this morning, 162,000 jobs were created in the month of july.

Less than economists were expecting.

The estimates ranged widely . they were looking for 185,000. on top of that, the june number was revised down.

That is a disappointment.

Not a total disaster, but not what you want to see going forward with the recovery.

One city 2000 is not on pace but it is still -- 162 ,000 is not on pace but it is still on trend.

Trend.

That means tens of not hundreds of thousands of people that are not in the labor force.

Let's get more on those figures.

We are joined by alan krueger, he is the white house chief economist and this is his last day on the job.

And graduations, but it is up to you to defend the -- and congratulations to you, but it is up to you to defend the jobs number.

What is the weakness?

Over the last year we have added 2.3 million private sector jobs.

Given how deep the hole that was created by the great recession, there is a long way to go.

Then how do you account for some of the disaster warnings of sequestration?

Do you think you over exaggerated a bit?

I think there is no doubt that the sequester is a slowing economic growth.

There's another estimate that could mean 900,000 fewer jobs than we would otherwise have.

I can tell you it is horrible policy.

It is -- we are hurting the vulnerable.

On one day this week i went to visit the genetic brain injury ward at walter reed hospital and they have been cutting back 20% on the patient's they can treat.

That is why the president proposed replacing the sequester with a much more balanced deficit reduction plan.

The president said earlier this week that without sequestration, the unemployment rate would be 6.5%. is that your math?

The congressional budget office gave the most authoritative adulation about how sequestration is affecting the economy.

On top of sequestration, also the state and local governments that have cut back.

If you look at what happened to unemployment in this recovery, it is inclined at an unprecedented rate.

I think there is no question that if we saw the kind of growth in state and local government jobs -- teachers, and police and so on -- the unemployment rate would be at least a percentage point lower.

174,000 were surveyed and 92,000 full-time.

This gets straight to the republican response about obamacare.

Taking a more difficult for people to find full-time work -- making it more difficult for people to find full-time work.

It's creating part-time economy.

How do respond that the new healthcare restoration -- legislation is creating a part- time america?

Since the affordable care act past it has been higher over the same.

In the last recovery.

We are seeing strong job growth in the sector that of the lowest health insurance covered -- coverage rate.

There is no evidence that that is having an effect on the job market.

I would add we are seeing much slower growth in health coverage premiums than we've seen in the last year and that will help job creation and wages.

What is the relationship doing healthcare reform and the strength of the economy?

We were told yesterday that none of the people understand what healthcare reform is doing or are aware of the exchanges that it is creating.

If that situation is not rectified, what does it mean for the economy?

I think there's been a tremendous amount of disinformation about the affordable care act.

We sent four times opposing the law then what it will cost to do . i think we will particularly see the states that have taken it seriously and have him committed the changes are seeing health insurance premiums go down.

We have seen in new york state premiums go down by 50% or more pre-i think -- 50% or more.

I think as the law is implemented well people will learn more about it and he will have a beneficial effect for the economy.

We're not seeing 200,000 job growth per month.

The trend is better but we are not seeing the critical numbers.

This administration continues to get chris is him of an unfriendly -- criticism of an unfriendly toward business attitude.

How you respond to that criticism?

The nature of the economic crisis back in 2008 which saw $1620 of wealth destroyed had a horrible effect on the balance sheet.

We're seeing slow growth in spending on discretionary items because so much wealth was destroyed.

On top of that, the housing budget led to over build -- over-billed homes.

We have added 2.3 million jobs over the last few months and we are seeing progress.

Alan krueger, best of luck to you.

We will miss him being with you on these jobs days.

We will have a chance to get a few questions for the new man just confirmed yesterday.

Will this next smartphone make anyone forget about apple and samsung?

? . . we are approaching 26 past the hour.

Time for bloomberg to go on the market.

We are seeing the climbing dow and the nasdaq.

Nothing really disastrous.

Remember, they've reached a record high yesterday.

The s&p and the dow jones industrial still holding about 1700 for the s&p. that is a klee -- a key psychological level.

Disappointing jobs, but maybe that means the federal reserve will stay even longer.

Let's talk in linkedin.

Stock up.

$26 billion company.

Bh sales and earnings per share every corner -- every quarter since its ipo.

Investors don't seem to care.

They are focusing on things like membership, for example, which has doubled since 2011. i just joined.

There you go.

Brought, cut to neutral that ubs -- broadcom has received seven downgrades after reporting the second quarter owning your the stock has dropped 18% over the past month.

There you see it down 2%. quite i want to mention time warner cable shares are plunging . they hit a circuit breaker.

This may have to do with a report here on bloomberg.

We will give you more detail.

Cox may be in talks with charter.

Charter backed by none other than john malone here at we are back in two two.

Live from bloomberg headquarters in new york, this is "market makers," with erik schatzker and stephanie ruhle.

Two years and $12.5 billion later, google close's motorola acquisition finally answers.

The moto x was revealed yesterday here in new york city grid we are asking how does it stack up to the cap edition -- the competition you go to tech gurus are joining us, nicholas thompson and sam grobart, both are packing the moto x. sam have a white one.

It matches my parents.

I'm fairly impressed by.

What am most impressed by it they try to do something new.

They integrate google now, which takes your entire search history, everything you have taken into the google, and makes recommendations for eager to tell the but what traffic, flight records of -- flight reservations, all that information.

It has taken a good it harkens the power of big brother.

Absolutely.

It is kind of creepy, but you wake up and start talking to your phone, and starts doing the things you wanted to do.

Ok, google.

What do you think you ? i'm impressed with the configuration options.

You can change the color of the back, the front of the details.

They will have a what it back, on -- online configurator.

It is like buying a mini when you pick up the colors you are for the roof and everything.

Let's be honest, the wow factor is gone.

There is no wet when it comes to smart phones.

These are kind of old phones.

Quite the phones of the same, they do the same thing.

Right.

It is available on the iphone, and it doesn't pretty well.

Not the same kind of the voice activation.

They try to have a little while, but your point is correct.

The format it -- the phone market is competitive right now.

There have been a lot of chatter about how much motorola and therefore google is going to spend to advertise this phone.

The figure is about half $1 billion.

That is a lot of money for a single product.

Bear in mind that last year, samsung spent $4 billion in advertising, plus $11 million and other marketing expenses.

It is one thing to make a products, lots of product that's company that made the products, but to get people to be aware of it in to change their mind about it, that is a whole other challenge.

Perhaps they like the made in the usa factor.

I'm just wondering if google has proven that that $12 billion acquisition of motorola was worth it.

No.

they suggested that maybe without a colossal bust.

They spent a lot of money, it has been bringing down their bottom line.

It is not clear that the patents are even worth the $6 billion they said the patents are worth.

This makes me feel a little less bad about the acquisition.

It certainly does not prove that it was a good acquisition.

Sam, the account that i've seen up how this phone was developed, inside motorola as part of google, are that inspiring, really, the lack of cooperation -- of the pretty ugly thing from what i heard.

It really did not go over it well.

A lot of people were let go, new people were brought in.

Could this, should this phone have been better?

It is hard to say.

Right now, it seems to be as good as any fun we would come to expect.

It doesn't have any particular thing that makes me go oh, my gosh, this is amazing?

No.

but it is totally competitive.

And the price is competitive at $199. but that is what they'll cost.

Listen, the palm pre came out a few years ago and everybody thought that was great.

It tanked.

Nokia's lumia is a good phone.

Kind of thinking.

It is not enough.

I do think that google has a lot of market power.

They have people that use all of their services, they're starting to integrate more fully, and if people believe that this is the true google phone, the phone that will provide the best services.

-- the best services for people who love google profits -- products, that is great.

How else do get them to believe?

The smart people at google, serbian larry, what can they do to wake the world up to the possibility of moto x? if people start using it and taking it into the wild and love appeared.

We were pumped when theory came out.

-- when siri came out.

Quite i think i'm the only one who still uses that.

It turns out siri does not work in the wall.

If this works in the wild, and you can talk to your phone without holding it, fill it a completely new thing, people start to share it, yes, it will sell.

Is there enough here that will make me convert from an iphone?

It is hard to break people out of that inertia.

Once you have gotten used to it of -- a device and you have your stuff on, that barrier to change, it is like an switching bank accounts.

You are not going to change your billing and everything else.

It is very hard to make people budget out of what they are already entered there is the apple cult with the ecosystem that will be challenging.

Google is getting -- is quite an android cult.

Sam, you spent a lot of time in korea with the fans on not long ago.

We heard and seen reports of samsung working to break its dependence on androids.

Where are we with a samsung mobile os?

They have a mobile os called baidu.

The relationship between google and samsung is very complicated.

Ever more so now.

Absolutely.

It was collocated when google was releasing nexus phones with other orders.

But now with this owner performed internal -- preferred internal help, who are getting most of the profits because they're selling the actual hardware.

Wife can you break the addiction?

-- can you break the addiction?

We will see.

Sam grobart and nick thompson.

Good to see you.

Coming up on "market makers congo could it be the next salsa?

That is nexon "market makers -- that is next on "market makers." some breaking news at this hour.

On the cable business, bloomberg has learned that cox medications is in merger talks with charter communications.

The shares of two of cox's biggest risers, -- rivals, time warner cable and another.

Admittedly, we will be out of the newsroom to discuss exactly what this is about third john malone is a very critical player here in the charter.

He has been looking to try to consolidate the cable business for a while there.

Cablevision, time warner cable, this is the first we have heard that he is looking at x cox, which is privately held.

That will give him leverage when he goes for in licensing fees.

News corp., 24 century fox at this point.

That is the reason why all of the household in america that want to pay for television already do.

You are not going to grow the market anymore.

Consolidation -- 's share from the satellite.

Some share from satellite.

In addition directv, there have been discussions about them merging to paddle -- two battle against the cable guys.

It is happening at all sites.

This is not tuesday say the malone is looking supposedly at cox.

He could be playing cox off time warner cable.

Or you want both.

Why not?

The bigger the better when it comes to negotiating with the cable network.

Is there anything that cox has deservedly that's malone media, liberty media would want?

Cox is privately held.

Recently james entity, part of the family that founded the company, he -- james kennedy filed a trust held by his aunt, ann chambers, who hold this event chair of cox enterprises.

Once you sell that share common makes it easier to sell the company.

Do we have any idea what cox would be worth?

No.

since it is privately held, cox communications being a smaller provider, a lot of those are not public.

Not his biggest time warner cable or cablevision, but within the range.

Talk about john malone and some of the other moves.

You said this is a big theme and big goal of his to consolidate the industry.

He also has looks to europe as well.

Yet taken a stake in virgin over in the uk.

Pay television and europe is still a growing area.

Not everyone has -- paid for television around the world that we do in the u.s. that strategy is to grow.

Where is in the u.s., it is really consolidation at this point.

The cable guys, they have been having a harder time in their fight for fees with the providers -- we saw cbs, time warner cable, they're still in a fight right now.

But the expectation clearly was that malone would be doing something with camera cable, even though time warner had some disappointing earnings.

Yesterday, the stock traded up.

People think to be jumping to the conclusion that that earnings are a better likelihood of a takeover.

Exactly.

That is what investment others are thinking.

-- investment firms are thinking.

If you are looking at cox, we don't really know -- or maybe both.

Great stuff from our bloomberg media team, admittedly, to every much.

Breaking news, coxon talks with john malone potentially for a merger with charter.

Coming up on "market makers," you will meet the man for big hopes for a little-known snack.

Vco wants to make comments a household name.

-- the ceo who wants to make hummus and household name.

This is "market makers." i am their eyes and peered forget about tobacco, corn, soybeans.

The next hot crop could be the chickpea.

Markets reporter alix steel recently returned from a trip to richmond, virginia.

Chickpeas grown in the heartland.

Part of the appeal is diversification.

Innovative fertilizer, which is cheaper for farmers.

Demand is picking up your a killer recipe for some farmers.

-- demand is picking up.

A killer rep is -- recipe for some former third wife i have tobacco, i have corn, i have wheat, soybean, and this year, i haven't chickpeas.

James brown is doing something most farmers won't. look at that.

That is a pretty being.

Trying something new.

I think chippiesc kpeas, you don't need fertilizer, donate a lot of rain, and it is cheaper.

Sabra has partnered with a university to find the right chickpea.

Brown has to harvest the crop himself, but if you like the crop, he could replace more expensive and labor-intensive crops with chickpeas.

Tobacco is nice.

It takes a lot of money to raise that tobacco.

Andy labor is so high.

And the chickpea business, i can do all of that myself.

I can have my own machine, i can harvest it and everything.

Chickpea farming is 150 million dollar business, but compare that to $55 million in just two years ago.

The main booming regions in the u.s. are idaho and washington, now east coast farmers want to get in on the action.

The problem -- hot and humid weather leading some scientists to experiment with a new type of chickpea.

I'm very happy with this.

Price a research scientist from bs you it's trying to hone in on the right ready.

-- the right variety.

We started with 152, we're down to about 40 or so.

We can produce a crop next year.

Which could mean some big profits for the small farmers in virginia.

If it is good, maybe i will pack 50, 60 acres or more.

I think it will do really well.

I think it will be all right.

We were with former brown during form day one other former sid, check out the chickpea.

They had a lot of questions, they seemed interested but still cautious about going into a totally new type of plant.

What type of profit margin does former brand have -- former brown have?

Even get about 75 bushels of wheat . fertilizer costs $100. that brings your profit down to $410. chickpeas can produce about 1200 thousand to 1500 pounds, a profit of over $500 according to the dry pn lentil council.

It goes on nitrogen.

Not fertilizer.

It is a cost-saving method.

Perhaps any way of farming.

It is that define the right variety.

We are going to find out more about this, alix steel, thank you very much.

Erik went out to look at the new -- and erik, she went out to look at the new crop of chickpeas.

A snack made mostly of chickpeas is making its way onto american plates.

Here now to talk about the hummus revolution is adam carr, the ceo of try mediterranean feeds -- food.

Hummus is hot.

It is.

It is in a category that certainly has been on fire here in the united states.

If you look at the compounded annual growth rate of hummus over the past three years, it has grown at a 17% each and every year.

We do not see too many categories that have experienced such high growth rates.

Is a possible -- everybody asks the question when you hear a number like that -- is it sustainable?

It is a great question.

Certainly a question we ask ourselves each and every day.

I truly believe it is sustainable and we will continue to see such growth rate numbers certainly for the next 3, 4, 5 years.

Libido you why -- first and foremost, if you look at household penetration, which is a measure of how many consumers over the course of the year actually but hummus in their shopping cart, the number is only around 21%. when you look at the opportunity, if we compare it to other categories, chilled salsa for a sample, which is closer to 40%, we believe there is a lot more -- you think you could be the next salsa?

We really do.

We see hummus as a terrific snack.

It plays out the need for convenience and consumers' growing need for healthy alternatives.

Both erik and i are fans of hummus.

But weidner at how to go from a vegetarian little snack to mainstream into people's refrigerators?

Consumers are increasingly looking for healthy snacks.

We know that there was the old food pyramid phase to tell consumers what to eat.

It has recently been released of a healthy eating place.

What is very clear on that healthy eating plate if they need to have healthy sources of protein.

Hummus is a wonderfully healthy snack.

It contains a good amount of protein, cholesterol-lowering fiber, which helped manage fibers.

It is a very -- manage blood level.

A shopper helps to look for something that helps satiate her and her family in a guilt free way, and hummus does a before dinner.

It is a competitive market, how do you get a disproportionately large percentage of the growth that you see in the hummus market?

I know for fact that if i walk around the corner to my local deli, i cannot buy that hummus -- tried hummus, your larger competitor is on the shelf.

Tribe has 8% versus sabra, who hasn't 61%. quite ok, you name them.

It is a terrific opportunity for us to accelerate the growth of our sales figures.

We're going to do it by understanding what the consumer wants.

I have been with truck for one year now, and i've spent most of the time talking to consumers across the country of understanding what they want, and once you understand those deep insights, you are able to deliver what the consumer is looking for in terms of packaging, proposition, and most importantly innovation.

Part of it could be -- the competitor, sabra, is a joint venture with pepsico.

Would you be open to some sort of order ship or an acquisition from a bigger player that is looking to jump on the hummus trend?

We are very proud of our corporate structure.

We have a parent company in israel which is co-owned have an opportunity to leverage the strength of a large parent company.

We certainly do.

We are will continue to develop innovation that is deeply rooted in consumer insights.

We recently launched a new package that really shows off the premium hummus that we make.

We call it the little black dress for our hummus.

It gives a very special feeling when they enjoy our premium hummus.

Spicy chipotle hummus is something we will try.

It is.

And it is a classic for people who like the old-fashioned way.

Absolutely.

A lot of consumers enjoy classic hummus just as it is.

Adam, good to see you.

Adam carr, the ceo of tribe mediterranean foods, part of the hummus revolution.

It is approaching 56 past the hour, which means time for a bloomberg to go on the markets.

We will take it over to olivia sterns who is covering the markets for us.

Here's a look at our markets are trading.

You see u.s. stocks are falling on the back of those disappointing jobs numbers.

The s&p holding above 1700. as their crossing through that threshold for the first time ever yesterday pretty economist surveyed by bloomberg were looking for a number closer to 185,000. and that -- instead what we got was 162,000. that is the smallest increase in for my spirit we're also seeing the dollar falling on the back of those numbers appeared all of this happening speculation that the fed will actually begin to taper any time soon.

Olivia, give us some specific stock movers with the nose markets?

-- within those markets?

Let's start with linkedin here we are seeing shares climb.

They were up today almost 10%. this despite lackluster sales.

One analyst put it "people pretty much ignore link then's guidance -- linkedin's guidance as they consistently crush it.

Oh sticking with -- crush its." sticking with tech, facebook is now over 40% in 2013. compared it to linkedin versus facebook, even before today's game, linkedin was valued at 144 times estimated earnings.

A premium to facebook's ratio of 53 and almost seven times and google's multiple.

Shares in time warner cable are sinking after bloomberg reported that cox communications is said to be in talks with rival charter communications.

Thank you so much, olivia sterns.

We were just talking to edmund lee about that.

Our bloomberg team breaking that.

Erik and i will be back in two minutes.

We will talk about the verdict in the tourre case.

Goldman sachs customers serving -- suing the banks.

Other indications of this big story coming up.

. . from bloomberg world headquarters in new york, this is "street smart" with trish regan and adam johnson.

-- live from bloomberg headquarters in new york, this is [market makers makers with erik schatzker and stephanie ruhle." making progress -- american manufacturing firms report booming business, growing faster than they have in years.

Industry's leading voice joins us.

Can six seconds really sell -- an explosion in social media video.

Advertisers are desperate to be in the mix.

We will beat the innovator working for some of the company's best-known brands.

Let's get straight to the newsfeed, which is the top story -- top stories from around the world.

A travel warning has just been issued for u.s. citizens around the world very the state department is warning of possible terror attacks, particularly in the middle east and north africa.

Several embassies in the region are closing this sunday.

Another sign of uneven progress in the labor market.

Employers adding fewer jobs than predicted great july's payroll increase was 162 thousand, the smallest informants.

The unemployment rate did fall to 7.4%. stocks are little changed on the news area toyota got a big boost from the weaker japanese yen.

Earnings soared 90 four percent in the fiscal first quarter and raised their full-year forecast by eight percent.

They were outsold by general motors but it's profit was three times as large.

Michael dell has sweetened his offer for the pc maker but the shareholder vote will not be held until mid-october.

That's the latest out of texas this morning.

We need to talk to bit more about michael dell and the deal he reached with the board not just to raise the price , but to tack on a $.13 special dividend.

Plus moving around record dates for shareholders.

It has been complicated for month end is getting more so.

Go straight to round rock come in texas where cristina alesci is standing by.

Why mid-october?

Why does everyone have to wait so long?

A very strict date because it comes not only after the shareholder vote, but it comes after the expectation of the closing date on this deal.

That is what is important because once this deal closes, you can't launch a proxy contest.

So what the expectation is from the michael dell and silver lake side that this vote goes ahead on september 12 and closes before the end of october, potentially before that shareholders meeting.

I think i had it confused as a matter of fact.

The vote on michael dell's sweetened offer will take place on september the 12th and then the deal closes and it mid- october, the annual shareholder meeting is held, is that right?

Which will probably be canceled because you will have a deal if the deal closes.

This is almost like a token gesture.

It may have been something michael dell and silverlake negotiated as part of this new deal.

That we don't know.

You can infer that it's usually when they have the annual meeting.

It is yet another sign they're going to special committee and they are going the way to help michael dell and silverlake seal the deal.

Not sure if it's going to fly in delaware but it is something carl icon is going to point out.

People have heard us talk about these dell bylaws and how they're supposed to have a meeting before the end of august.

How are they getting around that and scheduling of or october?

The bylaws say an expectation, but note technical requirement.

Shareholders can go to court and basically tell the court they think there is some funny business going on and maybe that court intervenes and has the company have the annual meeting before the october 17 date.

Thank you very much.

The latest from round rock texas.

Clearly that is off the table and everyone is waiting for september and october.

I know we will be seeing you very soon.

Let's talk more about the price tag in the business going forward.

Cindy shaw is a managing director and research analyst joining us live from san francisco.

She is also a former dell employee, so you are in a unique position.

Some of you wonder if michael dell and the company have overstated the pc market.

Some say they have understated it.

What is your take?

I think michael and silverlake and the position to influence people's perspective of the pc market and the company's prospects, the earnings report they held several months ago was surprisingly negative.

Have another one coming up in mid august the week of the 20th.

That's another chance to influence the vote.

There's always an opportunity to influence how the quarter is going to come out.

If you were michael dell and silverlake right now, would you be raising the price for dell, adding $.10 and throwing this special dividend in?

Is this company worth that much?

I think any shareholder should take the money they're being offered and get out.

But obviously michael and others believe it's worth extra money.

The special dividend , it's not a significant boost to the price.

If they think they can turn it around, the two percent is insignificant.

The change in the record date is much more likely to influence the vote outcome.

Is interesting to watch the shares as all of of the sudden polls.

It is below that $13.75. what is the price movement telling you?

It basically tells me that the market thinks the deal is much more likely to give through.

That goes back to a change in the record date.

22% or 23% of voters didn't vote on the last opportunity.

And those votes don't count.

The change we have seen -- excuse me, those votes counted as no votes.

Those votes won't count and that in and of itself would have kept the last vote in favor of michael and silverlake if the votes are unchanged.

Or if the votes to more toward the deal with this extra $.10 , i would expect the votes to favor going private with silverlake.

As the last five weeks have taught us, it ain't over till it's over.

Carl icon has told us in writing and in person that there are lots of great person who could run dell and do a great job and do a better job than michael dell and this board.

Who could run the board and do a better job than michael dell?

Michael is not a turnaround artist.

I think somebody who is a turnaround artist who could get the business restructured.

Longer-term, they need someone who can transform the business, much like ibm was transformed 20 years ago.

That's a bigger stretch.

Someone like mark hurd could fix it up in three years and bring the public in and silverlake and michael could make a nice profit.

I don't think that permanently fixes the business.

Moffett who used to be with ibm, resigned after getting implicated in the insider trading investigation might be an interesting guy to fix the operation.

There are other people out there but in terms of transforming the business, i think dell is too far gone, which is why investors who hold the stock should take the money and let dell go private grade -- let dell go private.

What specific steps should dell implement to turn it around in an industry that has been in secular decline?

It's a battle of trying to make enough money from the pc business to fund a transformation.

They've been trying to do that for six years, really, and it's getting worse.

In that six years, the environment has gotten much tougher.

I think what we will see is restructuring.

In order to truly turnaround, there are two things we might see great -- we might see.

I think you could see dell and microsoft get much closer even to the point where microsoft buys dell.

We are seeing enterprise companies come hardware and software converge.

That's fascinating, but it's not about to happen, at least not tomorrow.

And the turnaround be done as a public company the way carl icon would have it done?

Or does it need to be done privately for the weight michael dell and others have cited?

I think you will get a little more wiggle room to do things privately but i don't think being a private company stops that from happening.

You have to be willing to let the stock be a bad performer to do it quickly.

But i don't think it's an impossibility.

There is a study showing private equity actions are largely no different from similar actions in public but it's just more likely to happen when the company is private.

Cindy shaw, formerly with dell.

With some interesting opinions about what the company needs to do to let the company move forward.

Coming up, fabrice tourre may not have been the only loser in this case when the verdict came down.

We will tell you who else has skin in the game, next.

? you are watching "market makers." the u.s. state department has issued a new worldwide alert to u.s. citizens, warning of potential terrorist attacks, especially in the middle east and north africa.

The alert specifically names al qaeda as a potential threat , a potential source of terrorist attacks.

We want to bring in our collie, richard falkenrath.

He's a former deputy commissioner in charge of counterterrorism with the new york city police department and was the top national security aide to george w. bush.

He is a rentable at the chertoff group and a contributor to bloomberg television.

Richard, what kind of information is the state department working with such that it would feel the need to issue an alert like this?

They did not tell us what the underlying information is, but there is usually to possible sources.

The first is an electronic intercept of a communication between al qaeda cells that indicates either final planning for an attack or the initiation of an attack or a plot grade the second is a human agent on the inside that reports out and says there's a plot underway.

Actions like this are very unusual because in part the first priority of the government is to stop the plot before it happens.

Once it does this, take a highly visible worldwide action, the plotters will note that the government has a source on the inside.

Yesterday, the state department issued a release at some of the embassies in question will be close on sunday.

They have escalated that to a worldwide travel alert three and what would have happened in the last 24 hours for them to make it much more serious?

Maybe they have an indication the closing of the embassies caused the plotters to change their target and they have an attack in place but now they know they can't get to and embassy or counsel but they can't go to the at -- so they will go for american travelers.

If they take actions to protect their own people, there are questions why they are not doing the same for american citizens traveling abroad.

Why do you think the embassy may be at risk and you need to protect the employees of those facilities rather than everyone else who is traveling around the world for tourism or business?

Ask how seriously should people , should businesses take an alert like this?

How often are they issued?

A worldwide travel alert is not at all common.

They're routinely issued for certain parts of the world, like libya or iraqi, yemen.

They have a permanent travel advisory in place.

Worldwide ones are quite unusual.

Does the fact that it is worldwide suggest the information the government is working with isn't as specific as we might like?

Right.

That's exactly right area the government doesn't like to do these in part because they are not really actionable.

What is a businessperson traveling or someone who has long tourism plans supposed to do if they are headed to norway, a place where there are no -- these things are not popular inside the government for the people who receive them.

The more specific it is, the better.

But this is not a step taken lightly by the government and the number of alerts that have been issued is -- have risen steadily since 9/11. are they going to try to prevent any attack or just try to keep people out of the way?

Both.

To prepare for the consequences of an attack that happens.

The government will be in a position to say we did issue an advisory.

There is no way to protect every american citizen traveling abroad at any one time.

If there is an event and the government has information that might be about a threat to that person, if they kept it secret, it often does not go well.

How our airlines responding to this right now?

They're not typically in charge of their own security.

It's usually taken care of by airport operators who are likely to heighten the screening protocol.

You are likely to see longer lines.

I have not seen reports of cancellations of flights, but longer lines at security checkpoints are certain in this type of situation.

Richard, thank you for making yourself available on such short notice.

Richard falkenrath , principal at the chertoff group and security expert here at bloomberg.

A worldwide travel alert issued by the state department.

Very unusual.

Coming up, shockwaves from the fabulous fab verdict.

Goldman sachs may get rocked.

That story is next on market makers.

? the world's biggest spanish- language broadcaster is getting a little bit bigger.

That's the subject of today's latin america report.

The company has agreed to a $745 billion deal that would give it control of mexico's table column.

It is part of their move to raise their reliance on over the air advertising.

The company has been aliens onto cable carriers.

And the telethon humpy and wireless provider.

They already have about 8 million users in mexico and is gives it a hundred 40,000 more customers.

Just this year mexican lawmakers passed a law aimed at creating competition and telecom, so i guess it's not just media deal excitement in this country.

It's also happening south of the border.

There is something else happening up here -- the verdict is in.

The jury found fabrice tourre liable on fraud counts, one of which was aiding and abetting goldman in violating securities laws.

This is the interesting part.

Now it opens up again to encompass goldman sachs.

How much harder does this verdict make it for goldman sachs to defend itself against any number of other civil cases pending against the firm?

How much harder is not clear.

Do attorneys on the other side use this, absolutely.

It very unusual in that seventh count in which the jury found fabrice tourre was liable in aiding and abetting the violation of securities law in the abacus transaction.

You have never had a jury ruled on goldman, yet this if actively rules on goldman and raises questions about the lawsuit against goldman and the impact it could have on settlements.

The sec's settlement with goldman in 2010 was a record at the time to settle these charges.

There was no admission of wrongdoing.

The sec under mary jo white is looking at these on a case-by- case asus.

This clearly raises the bar of scrutiny.

Oldman this year confirmed that the -- goldman confirmed the lawsuit is going forward and other shareholder lawsuits have been going forward.

I spoke to an attorney specializing in the s.e.c. it says as a practical matter, the jury finding that he aided and abetted fraud exit far more difficult for goldman to dismiss any claim on a related matter.

We have spoken to one of the jurors and it seemed like people like fabulous fab.

Your number two said he was likable and -- juror number two said he was likable but some one else he was shady.

I was there on the first day of testimony went right off the bat, he had to admit an e-mail he wrote was not accurate.

This is the key question -- whether the decision was based on the merits of evidence as opposed to this notion that the jury was punishing fabulous fab 4 wall st's siddons and allegedly for goldman's since.

They said that they should have informed investors that billionaire paulson was betting that it would fail.

This is one of those stories that's not over until it's over.

Yesterday's verdict was a rare victory for the securities and exchange commission in these kinds of cases.

In a moment, we will talk with a former sec chairman.

Also, it's a commercial that would have driven "madmen" really mad.

How can you sell something and six seconds?

You will meet someone who's 26 years old and doing just that.

Breaking news -- we have just heard from karl icon on twitter -- we -- he also says more to follow.

Here he is responding to the agreement between michael dell, silverlake and they'll's special committee, raising the offer price, adding a dividend, changing the record date, moving the shareholder vote.

There is a lot in play here.

I wonder whether he has actually won the war because at least michael dell and silverlake have changed the rules in the voting.

The question is who is winning this war at this point?

At the end of the day, it may be for a judge to decide.

A judge in delaware where carl icon has tried to stop much of what michael bell and the board are doing.

Wait and see.

Right now, the verdict in the fabulous fab trial is a big victory for the government.

We're joined now by the former sec commissioner, royal compos.

Is this fair to describe this as a big victory for the government?

The sec wanted to and needed to win this case.

What does it say?

It is huge for the sec.

Imagine what you would be talking about today if the sec had lost this particular case?

It would be what's the matter with the agency?

Can it shoot straight?

Can they bring a decent trial?

Can't they put on a case?

This was a big win for the s.e.c. and they are almost immune to any criticism that this is not high enough or that fabulous fab was only mid-level.

They needed a victory and they got it.

Why are they immune to criticism that he wasn't high enough?

Why'd make a mid-level or junior employee executive at goldman sachs a poster child for what went wrong in the mortgage meltdown?

I'm not defending the choice of taking this particular mid- level person to prosecute.

The reality is is enforcement cases, the prosecutor or sec enforcement officer has the evidence, that is what determines whether or not to go forward.

I don't think anyone at the sec is thinking about poster child were not.

They found themselves with the case they thought they could win and they went forward with it and they are just happy to win one given their per -- given their very poor record in recent years.

One of the counts against fabulous fab on which the verdict came in against him was this idea that he aided and abetted goldman sachs in committing securities and violations.

-- securities violation.

You left by the time the settlement was -- no admission or denial of guilt.

In today's climate, what would you have done?

In today's climate, and i'm sure all the commissioners at the sec take all of this into account, they are very concerned about the agreements and they are very concerned about whether the evidence shows some culpability, some blame.

Mary jo white has issued a directive that essentially says that the sec will be looking for more admissions of fault.

I guess what i'm trying to get at is that's to say the agency was wrong to allow goldman sachs to make this go away for $550 million because the jury of peers says that indirectly, there was violation of securities law going on and fabrice tourre was part and parcel of that.

I don't know all of the back- and-forth and the public doesn't either that went into reaching a settlement.

$550 million is a lot of money.

By most accounts.

And there are risks of going to trial and there were a lot of risks with respect to fabulous fab.

This was a judgment call the sec made and they believe this was the best way to go.

I'm not going to try to use hindsight or look in the rearview mirror to say what they did was wrong, but they got a very big settlement and a lot of money for the public.

Do you think the upshot of this is that the sec will decide it will go to court more to prove some of its cases?

That is a good question.

I think the sec and the past has been very cautious.

They did not bring forth cases to trial unless the odds were extremely high that they would prevail.

I think with mary jo white, you have a person that really understands the trial dynamics and understands what it takes to try a case and win a case.

That reason more than anything else -- i'm not sure this matter will add much to it that it will give it some confidence and i think mary jo white will be looking to bring more cases.

I want to talk to you about this idea -- there is some evidence to suggest that ratings shopping is back.

Which is to say bond issuers are able to go to individual rating agencies, be it movies or standard & poor's, and shop for a more favorable rating because they are paying for the rating.

We at bloomberg has rep -- we had bloomberg have reported on this and the "new york times" as reported on this.

If this is happening, how serious is it and is exit just financial reform in the form of.

-frank is a failure?

-- dodd-frank is a failure question mark it's an interesting question, but i'm more interested in the overall ratings by ratings agencies and having more meaningful ratings issued for the market.

It seems to me the market goes to these ratings agencies and request ratings to be done.

The new york times article you mentioned accused s&p of having essentially lowered its criteria so that it could win more business and get higher ratings.

I looked at this carefully and saw s&p had posted a vigorous defense on its website.

I assume the new york times will run it at some point.

What they are saying is on the contrary, they raised their capital requirements and they are not getting as many lower rated types of deals and they put out another statistic that is very interesting.

They say 97% of the time, their ratings are the same or lower than all the other credit rating agencies.

It looks like this one incident is a discussion of interpreting data.

Good to see you.

Thank you for sharing some time with us.

Royal campus -- royal campus talking to us about that.

Coming up, we are -- where are the workers doing the making in made in america?

We will talk manufacturing with the head of the industry's biggest trade group, coming up.

? during the 2012 campaign, president obama promised one million manufacturing jobs to be created by the end of his term in office.

Earlier this week, he reiterated the pledge.

Over the past four years, for the first time since the 1990s, the number of manufacturing jobs in america has not gone down, it has actually gone up.

So the trend lines are good.

Now we have to build on the promise.

I want to offer new incentives for manufacturers not to ship jobs overseas, but to bring them back here to america.

In the past month, the country added 6000 manufacturing jobs.

But if the president wants to reach his goal by 2016, we need to increase the rate to 24,000 per month three with me now is the ceo of the national association of manufacturers and the industry group that represents manufacturers in the nation.

Is the president completely off with his target?

We have a lot of work to do if we are going to hit his target and we would like to see him succeed in this target but a lot of things have to be done to achieve that goal.

What would have to be done?

Your members want policy action.

What does it need to be on?

Does it need to be on taxes or anything else?

Wax taxes are clearly an important component of this, but when you look at the cost of manufacturing in the united states, its 20% more expensive to manufacture in this country than it is anywhere else in the world, and that's after you take off the cost of labor.

That's taxes, labor, energy policy and others.

There's a whole slew of things that need to be done and unfortunately, that is the -- the administration has not addressed any of those cost drivers and they have missed major opportunities to create jobs that would help the economy and help manufacturing.

How much more competitive as the united states to come compared to places like china where we have seen wages start to rise?

There are certainly some wage factors that allow us to be more attractive for investment and job creation.

Wage factors in other countries and developing economies.

But when you look at the base factors that make us less competitive, these are things that presidents of both parties and congresses of both parties have ignored for the last several decades.

We have the highest corporate tax rate in the world right now.

All of the things being talked about, all the plans and proposals being talked about in congress really don't even seek to achieve a competitive tax rate area -- competitive tax rate.

You are hearing concrete proposals from both sides of the aisle and the white house?

It is good that there is attention paid to lowering the corporate tax rate.

But we also have to think about our individual tax rate.

Two thirds of any factors play -- pay taxes at the individual rate.

To have this dichotomy of rates, 25% for corporate and 35 to 40% for media manufacturers does not make sense.

Who do you throw your lot in with?

Many people who want to reform the tax system, many of the large companies looking for tax reform are looking for an overseas tax repatriation holiday.

If you are concerned about small business, they are not concerned about that equation.

A lot of small businesses are getting involved in expanding operations outside of the united states.

They can be part of a supply chain.

But more importantly, if they don't have operation outside the united states, they are probably supplying manufacturers in this country.

The stronger manufacturing is overall, the better it is . it's not just taxes, there are also missed opportunities like on the keystone xl pipeline where we could create hundreds of thousands of jobs and we are just throwing those opportunities out the door.

Thank you for sharing your views and policy prescription on your wish list.

When we come back, the six second cell job.

How it may change the way we look at advertising forever.

The advertising landscape is shifting before our very eyes.

Facebook's push into video ads and a merger, companies are trying to find the consumer and the next big thing.

Major brands are calling on a 23-year-old from san diego to create these bite-size videos . he has been dubbed the most creative stop motion animator.

We sat down to create one of these six second ads.

We're going to show everyone what it looks like.

Talk about how you got into this business and who is knocking on your door question mark who is calling you to produce these ads?

Vine came

This text has been automatically generated. It may not be 100% accurate.

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