The Changing Face of Tech: Taking Stock (08/12)

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Aug. 12 (Bloomberg) -- On today's "Taking Stock," Pimm Fox helps you to think like a professional investor and discover the next "big thing." (Source: Bloomberg)

This is "taking stock" for monday, august 12, 2013. we are going to opus on the facing chase of technology from transportation to smartphones.

Elon musk is set to speak at his hyperlubed transportation system that could revolutionize how we travel.

Blackberry might be putting out the for sale sign soon.

They are failing to convince customers to buy the new blackberry.

A record return for breaking bad.

A are changing how people view their programming.

All that and more over the next hour.

Take a closer look at headlines.

Let's go to olivia sterns.

The feud over jp penn and ey is becoming a dell level of evidence.

They support mike oldman in the battle against bill ackman.

They told the retailer they would support the current management team after ackman criticized the executives in letters last week.

The deal d valuesole -- values dole@two point $1 billion.

They will raise this in cash.

A 13 boost.

Neither he nor his family already own.

Blackberry is considering putting itself up for sale.

This comes after the lackluster debut of the anticipated blackberry lineup.

They are looking into ways into enhance the values and scale.

Those are the top headlines.

Thanks very much.

Elon musk has revealed his hyperloop transport system that would run along interstate five in california between los angeles and differences go.

The total travel time or the minutes.

It would consist of a double barrel elevated pipes . with some guidance, i am joined by esther dison.

Also joining me is erin aaron goossen.

I want to start with you.

What exactly is this hyperloop project supposed to do?

Likes it is supposed to offer a new paradigm in transportation.

He likes to say it is the new mode of transportation.

Is solved a lot of problems for what we thinks in terms of the transportation.

Right now you have to take a train between new york and washington.

It is limited by speed.

Geography.

It takes a long time to get to these perry says -- places.

This hyperloop aims to solve a lot of these problems.

Becky weighted tubes, going at really high speeds.

Not much land use.

When i heard about this whole idea of these two is a reminding me of old apartment stores.

He put the receipt in a tube and off it would go in a vacuum tube experience.

This is an application of similar kind of technology.

Like i would really love to hear more of what he said exactly.

If you're going at the speed, it may look pretty straight at but if you are 500,000 miles an hour, you cannot do the curbs.

I do not know what he has in mind.

There's also the earthquake restrictions.

We're going to listen into his conference call when he begins.

. in addition to the technology, we cannot forget the cost of something like this.

You have to balance the cost of building something new with repairing what already exists.

The energy costs will be very low.

The costs of building this thing will be humongous.

It will be late, even space x was not on its original schedule, wonderful as he is.

Then it gets interesting.

If you are a business person and you want an half an hour, you will gladly play 2000 dollars at a peak time.

Then we can let students or whoever going to :00 a.m. -- 2:00 a.m. it is going to be interesting.

It will certainly be arena green if they design it the way they intend to.

I am glad you mentioned energy.

It is not just about the infrastructure in the change in time between travel of los angeles and san francisco.

This could be a no way that travel -- new way that travel is done all over the world.

There is very little energy use.

He wants to put solar panels on top.

I think he is thinking that this will initially be smaller, spans between smaller cities like san francisco, los angeles.

There is the potential that it could be a new york/beijing trip.

Pretty cool to go on the other side of the world in two hours.

There is the practical side of all of this.

Elon musk is a dreamer.

He is a dreamer and a creator.

He is not simply a dreamer.

This one is a real challenge.

In space, you are not dealing with existing highways.

Trying to do stuff on earth where you have two go to the downtowns of each of these places or you might as well -- it takes only 40 or 50 minutes to fly between these places.

If you are really rich you can anyway.

You go downtown.

My god, you are passing bakersfield and not stopping.

The people of bakersfield will get very upset.

The value is for longer it instances.

The political side is probably.

-- easier in a political state.

That is what you need someone like elon musk can get people excited and get them rallying.

Can you stick around a little bit?

We are going to have a more.

More on elon musk and his hyperloop technology.

Also, the details on the faltering business of blackberry.

The mobilephone maker, is it up for sale?

We have details next.

? breaking news from bloomberg.

Elon musk has unveiled his plans for the new hyperloop transport system that he calls a technological breakthrough.

A conference call has started.

Let's listen in.

Thanks for taking the call.

Could you walk us route through, i've not had time to read it all, the whole process of how this accelerate the pod up to speed?

It is a linear connection -- conduction motor.

It is in the model s. this is a pretty lanced on -- long-standing technology.

It was basically invented by tesla back in the day.

It creates an electromagnet, turned the air into an electric omagnet.

You can induce magnetic force.

Then it sends a pulse down the motor and the rube tube chases the pulse.

You gradually excelerator in a smooth way to around 800 miles an hour a. you would not be using the electrician -- the electric for the limitation part erie it like right.

-- for the levitation part.

Yourright.

A linear conduction motor.

I will let the next person to the next question.

Your next question comes from justin pritchard.

What do you see the likelihood of this actually being built?

I heard you say it could never crash.

How could that be in earthquake country?

Never is a rather strong word.

It is just extremely difficult to crash it.

Unlike an airplane, it is not really moving in three dimensions.

It is not like it will blow out of the sky.

Nor can it move as a train can.

In the pylons to which the tube is mounted, there are the sort of things you happen buildings in california.

They are like shock absorbers.

You have two laterally mounted x, y movement and one vertically mounted in the post.

There will be intentionally -- potentially be in earthquake that is so big that it overcomes it, but then we have the same problem in buildings.

And relative to a train, where you cannot really do that on the tracks, it will be quite a bit safer.

What about the prospect of being built?

I have been thinking about that.

I am somewhat tinted to at least make a -- attempted to at least make a demonstration prototype.

I think you would have to put it out for a little bit of time so it is not immediate.

It come around to my thinking here that maybe i could just do the beginning bit and create a subscale version and then handed over to somebody else.

-- hand it over to somebody else.

The difficult thing will be ironing out the details.

I think i will probably end up doing that.

It just will not be immediate.

Sorry.

Just to clarify.

In the past he said it would be open-source.

Is that still the case?

It is still the case.

This is not from the standpoint of me trying some sort of, i am not trying to make a ton of money on this.

I would like to see it come to fruition.

I think it might help if i did a demonstration article.

I think i probably will do that, actually.

I have somewhat come around in my thinking on that part.

Hi, elon.

I wanted to get a little bit of background on the technology, how this was fleshed out by you and the space x crew.

Some of the tesla people had a hand in it.

Can you explain how you are using tesla and spacex to collaborate?

As i have described on paper, what is the best way to go from la, make it as good as possible.

I narrowed it down to that one must have a tube in a special environment.

What sort of special environment?

What would work?

I bounced around a bunch of ideas with spacex and tesla aerodynamics teams.

A few guys at tesla's motor group.

At first i can we make something which is like a pneumatic tube work?

Like a big version of the mail tube.

We ran the basic calculations and energy it was truly in or ms.

-- enormous.

There we try lowering the pressure and is still required huge energy.

If you go in a vacuum it can work.

I said what if we put the fan on the front?

How much energy would it take to pump the inner cheek -- air from front to rear.

I asked the spacex and tesla teams if that would work, how much energy did they think it would take and would it actually solve the conduit limitation?

That was the final breakthrough that was needed.

Then we try to figure out what the right pressure level was in the twoubes.

It is probably somewhere around [inaudible] it is a happy medium that is manageable . it does not give you so much drag that it becomes untenable.

Can you talk at all about energy consumption?

How are we talking as far as power is concerned?

I know solar power was mentioned.

How much energy do you think you can reap on the other side?

Elon musk answering questions about his new hyperloop transportation system.

We are going to have more on technology and how it will change the way that we look at transport.

You can hear the rest of this call by heading to bloomberg.com/tv.

There is a special edition of "risk takers" tonight on elon musk.

Coming up next, more from "taking stock"." ? elon musk has been speaking about his hyperloop transport system that would run between san francisco and los angeles, linking the two towns with a total trip time of 30 minutes.

Hyperloop would consist of double barrel elevated pipes.

Here to tell us more, esther dison.

She is an angel investor and sit on the board of export arrow space.

Here to us the science behind all this is erhan goossen.

Did you understand all the things he was talking about?

Quite i think that is what they use on some of the tesla cars.

It was definitely pulling from some of the companies he already has.

He has a lot of engineers on staff.

It is nice to lean on people for some of this technical expertise.

A little bit on the actual technology of moving people from san francisco to los angeles, dual pipelines, compressed air technology, solar panels on top.

You keep going around, it is kind of like a ski lift.

You go around and there is a plate you can it off while the system itself keeps moving.

-- there is a place where you can get off while the system itself keeps moving.

It avoids creating too much of a vacuum or too much compression.

It is clearly extremely well designed.

The challenges are going to be to note this thing.

You mentioned security.

Their security to get on it and the security of the thing itself which i hate to say is a huge target.

If you say 30 minutes, but you have to stay 20 minutes in a line waiting to get on -- i want to thank aaron ehren goossen and esther dyson.

The dow jones loses 5. the nasdaq gains or the nine points.

This is "taking stock" on bloomberg.

? like this is "taking stock" on bloomberg.

I am pimm fox.

Let's go to mark crumpton.

Quite elon musk tom a the chief executive of tesla motors and spacex has revealed some details of buying behind a new mode of solar transportation.

The plan is to enable travelers to move from la to san francisco in 30 minute for $20 using hyperloop.

The charges would pertain to their alleged involvement and attempted to conceal losses from 2012. the us is according to a person familiar with the matter.

James whitey bolger was found guilty of murder by a federal court jury.

Bulger ran a criminal enterprise for 20 years and will likely spend the rest of his life in jail.

He had invaded it ortiz for over 16 years before being captured in santa monica in 2011. those are some of the top stories.

Do not forget to catch "autumn line" coming up at 7:00 p.m. blackberry, the smart phone maker, the board has formed a special committee to explore strategic options here it in the real world, are they going to sell the company?

Let's find out about the struggling filmmaker.

I am joined by brian hamilton, an expert at looking at the world of privately held companies.

He is also the chairman of stage work -- sageworks.

We also have cristina alesci and esther dyson.

She just happens to own a blackberry.

Tell us.

What is the deal?

The company said strategic options.

They said they would explore strategic options.

When they announce that last year they said that a sale was not on the table.

Today we now know that is our ocean -- is option a. the launch of the own is not going as planned, maybe a little more dire than they expect it.

It is not selling as well as they hoped.

What would be the benefit if by gary was privately held company?

Fax--blackberry was a privately held company?

We have two companies that are startups.

What they want to do is go private so they can reengineer their whole business model.

We definitely need to do that.

If the reengineer the model, what is different if they are privately held or not?

It is true.

We are not focused every day on the stock price, the quarterly earnings, the estimates.

You have time to plan your business and try to bakemake a run at this thing.

They have to start again.

They have to reengineer the products, get them popular again and to reorient the entire thing.

It will take time.

Can't you read engine a company like blackberry?

-- can you re-engin a company like blackberry?

I do have a blackberry.

I could not find it.

That is the problem.

People do not talk about them.

They do not share apps on them.

Avella for student develop for them.

The phone is a piece of technology, an ecosystem with things people want on it.

They use it for certain things.

It is not selling it to users.

It is getting the whole thing around.

The reason i have one is because i had a fixed price international data roaming.

That does not take you very far when samsung, apple, android are all doing amazing things.

What about the actual keyboard that many people who have used blackberries in the past find very enticing.

Most of the phones do not have an actual keyboard.

Is that an area that blackberry could still be successful in?

I think they discover it matters less than they thought.

There are also little pointing devices.

There is flexy, which corrects your tight as you type your rate -- are yuou type.

They might not miss it as much as they say they do.

They need to figure out something else for them to do rather than resurrect a blackberry.

They need to take those resources and recycle them.

Is there any value on the balance sheet?

There is cash available.

There is some cash for sure.

The problem will be as far as strategic, may be interested.

They have all had a look to take a look.

It is not news that blackberry is willing to entertain discussions.

They said they were reviewing strategic options.

Presumably if you are in microsoft and you wanted to make a run at blackberry you would have artie done the work.

-- you would have already done the work.

There is not much from the strategic standpoint.

It is unlikely that you can add more debt on this company than is necessary for it to take riot.

There is a fair amount of speculation around this one director that stepped down today because a conflict of interest.

He became the number one shareholder last year, surpassing even one of the founders.

That has generated speculation that he may be part of a group goes ahead and takes blackberry private.

That is purely speculation on the part of some analysts out there.

We have one of the largest pension funds in canada last week.

You could see a situation where maybe some nationalistic interest comes together.

He is known as canada's warren buffett.

He is obviously a national figure.

You can maybe see some national players coming together.

Even if lenovo would want to come in and buy but area they would have to get clearance in the canadian reg -- canadian regulators who look at or in ownership of the companies's rate closely.

This is what library has with the department of defense.

You cannot discount that.

Library shares are higher today by 10.5%. thanks very much.

Speaking of investing in a technology company, next we will talk to a chief executive who is looking for the next big thing.

That is next.

? as the media landscape adapt to consumers who want to view programming anywhere and at any time, does this spell dominance for providers such as netflix, time warner's hbo?

What are the next steps that media company should be looking to take?

Peter is the chief executive of digital ventures and next are on the entertainment and digital media industry.

What exactly is this?

It is great to be here.

It is a one-stop is still media services business.

We provide early stages of venture -- capital and then connect them with advertising contacts.

How did you come to run this organization?

What is your back row?

Like i had been in the media business for 25 years.

The first has to lf was traditional and then i went into the brave new world of digital media at the turn of the century.

In 2000 and started with my first digital media startup company.

Then i joined manatt.

What characterizes a smart digital media company today?

A digital media company that understands the value of content and understands what i believe is that content ultimately drives the opportunity to monetize and really create new customer experiences which lead to the promised land of the monetization for everybody in the video ecosystem.

Be promised land can be very expensive.

Many people do not necessarily want to pay a lot for content.

A lot of newspaper and publishing firms have found that out to their peril . true.

At the end of the day, customers will pay for great content and great customer experiences.

We are seeing a lot of disruption with traditional business models.

I also think there is a lot of opportunity for content creators to experiment and try new forms of packaging their content.

New forms of monetizing them, whether it is advertising, pay for view, there are multiple ways they can really create deep value.

The customers are out there and willing to pay for it.

Any given some examples of the kinds of companies you are looking for right now?

We are focused at early stage companies.

We are looking at both coasts.

We are really looking for new ways to content companies to utilize new technology to drive this kind of demand that i am talking about.

When you are talking about traditional video, you mentioned netflix and the large scale video service providers.

What we are seeing is this the liberation of netflix then amazon been hulu and these companies that are understanding that a can monetize your distribution.

Can you give us some examples of companies you have already invested in?

Absolutely.

We cannot announce what it is exactly.

We are looking at companies in the ad tech space.

We recently made one investment in such an act tech company.

It is taking new technologies and new ways to reach customers while they are engaging in content and being able to market to them more effectively than traditional advertising.

We see there is a lots of instruction having -- happening in that world where you have new ways to engage income in customers in a more meaningful way.

Is this a lower margin business, connecting to people by mobile or online algorithm that connects marketers with customers?

When you are targeting as specifically as you can with a new technologies, it is not lower margin.

It can be much higher margin businesses.

Then the marketers are reaching directly to the base they would like to market to.

That is the power we have been talking about with the internet for quite some time.

We are now being able to do that with some of the smarty and companies we are seeing.

Is it better to invest in companies that are doing video and content on a local level or doesn't all have to be national?

-- does it all have to be national?

If you're looking at broad-based new , you are looking at netflix.

If you're looking at micro- targeting you can still get very high rates because you are getting precisely the kind of audience you want to reach.

It depends what you are looking for.

On a grander scale, it is the large-scale offerings that are coming in and disrupting the traditional business market.

I went to thank you very much.

For a look at what wall street has on its agenda for tomorrow, let's go right to olivia sterns for our bloomberg reef report.

Let's start in europe.

Angela merkel will be interviewed by public broadcasters 1:00 p.m. eastern time.

She's gearing up were elections that gear up september 22. in the u.s., and sales will also be released.

Retail sales have risen for the fourth month straight.

Tomorrow we will also get business inventories for the month of june and earnings from sea world.

Investors will be looking eagerly to see signs in "empire at the penguin" has paid off.

There is a live penguin cam.

You can always head to bloomberg.com.

How can you compete with that?

Coming up, raking bad -- "breaking bad" said a record for its return.

How is it breaking the mold of viewing patterns?

That is next.

? "taking stock" this is"taking stock" on bloomberg.

" breaking bad" kicked off the second half of the idol season with a bang last night.

5.9 million viewers tuning in to cable and satellite.

It is also breaking new ground when it comes to online.

The risk and catch up on all the media seasons on services such as netflix, binge viewing.

Here to discuss the concept is brad agate from horizon media.

I want to start with you.

We have this ongoing dispute.

If you want to watch a local cbs row grammy on time warner cable in new york or dallas, you might be challenged.

Time warner cable is not broadcasting this.

He was going to win?

Time warner or cbs?

The winner here is going to be cbs.

The problem is that the fight here is going to make viewers go other places.

Now there are options.

Time warner does not have the leverage that it used to hear it i'm not just talking about putting the rabbit ears on our television.

It is really that content is keening.

There is new leverage and new medias and medium in which we can access and watch the show was.

That is the problem from time warner.

I must themselves into a phone company, their business cannot last on media content alone delivery wise.

Come in on this.

You have time warner cable blacking out cbs in some of its delivery areas.

That is that they end up being time warner cable for their internet service so they can watch it on a tablet or computer or you can get it through the verizon system?

It gets more complicated.

Knowing that cbs would lose leverage if their contents were freely of their -- available everywhere else, cbs has also blocked their content on cbs.com four time warner content subscribers.

The real winner here is netflix.

Not in the sense of this is driving customers to netflix but in the sense that what has been made clear here is cbs is now completely addicted to the incremental revenues associated with digital.

Where a couple of years ago they were willing to grant a gentle right to time warner cable and subscribers, they are not anymore.

They want to resell them to someone else.

That is the game netflix has always been playing, get the content companies addicted to this third revenue stream.

Does this cause cbs to demand more for each describe her?

It is also a battle over mobile.

Time warner wants to participate on the mobile experience by having you use their app or software in order to watch television.

Where is it going to come from?

That is where the money is.

Cbs want to keep it.

There is a danger.

You start down the slippery slope that i'm going to charge you for everything you do.

The old world equivalent would have been i'm going to charge you separately for watching in the badger room and living room.

Now we are saying your tablet is really a separate viewing experience, different device every what you to pay for that and pay for out of home as well and the video-on-demand.

Suddenly you are going to be paying for lots of different windows.

The problem is already that the bill is too high.

I want to ask about "raking bad," 5.9 million viewers.

This has been going on for a number of years.

They got an awful lot of publicity and social media content.

I think if you look at the numbers, it has gone up each and every year.

That is very unusual.

Usually a show peaks after two years and starts to drop.

A perfect example is warren buffett.

This is his favorite show.

He pinched -- binged watched on netflix.

Were you one of them?

No.

i haven't gotten to season five yet.

I want to thank you all very much.

It is 56 minutes past the hour.

The s&p 500 today losing a point -- .689. the nasdaq gained 9 because of apple.

Shares of apple higher by 3% today.

They won a patent infringement suit against samsung.

Thank you for "taking stock"." ?

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

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