Surveillance: Twitter Is Improving, Sena Says

of course, on the Bloomberg. David Gurry here with Tom Keene on Bloomberg Surveillant's Good morning, everybody. It's a Thursday, October and a lot of news, suffice to say this morning, let's tick through some of it. Twitter expected to release third quarter earnings this morning at seven o'clock. Wall Street Time will bring you those numbers as they crossed the Bloomberg and I want to bring in Paul Sweeney. He's

the head of North American research at Bloomberg Intelligence. Paul, A lot to talk about here, but give us what you're gonna be keeping an eye on here when the numbers cross. Well, I think for Twitter it's um just a question of is there any evidence whatsoever that Jack Dorsey has been able to find the secret sauce that will try to reinvigorate the user growth at the company, which could give investors some lifeline to kind of hang on too, to see about whether there will be any

kind of revenue growth in the future for this company. Really, over the last uh several quarters, we haven't seen any evidence that they've been able to find a product fixed, a technology fix, a marketing fix that can reignite user growth there. And so the really question is if they can't do that, what does the company do? It just went through a round of m and a speculation and a lot of the potential buyers walked away. So investors are really left with, you know, what what do I

do with this name? All right? Those numbers crossing the Bloomberg now looking at third quarter revenues six and sixteen million dollars, third quarter adjusted earnings preciere thirteen since the estimate was nine cents, and an announcement here the Twitter is cutting up to nine percent of jobs. Will continue to go through those those numbers series. There's one statistic here, David that just sticks out. In fall Sweeney advertising revenue, an increase of six percent year over year is Twitter

and industrial company. I was gonna say that kind of sounds like a radio company or a TV company. Uh, you know we're used to seeing you know, you think about it. Uh, Internet advertising in general is growing about fifteen. Advertising on social media is growing upwards of thirty and so you see numbers coming out across Facebook and Snapchat just put out some more numbers in terms of and they're putting up some huge numbers. So when you see a six percent number out of Twitter, that just really

tells the story. What is that? What's been the fallout from Twitter putting itself up on the block and having all the suitors walk away here, What's what's the what's the company's next step in light of that happening. Yeah, that was extraordinarily disappointing for them. I mean they actually kind of engaged in the process a little bit. They hired some advisors. Uh, they put out a little bit of a process out there, so a number of players

were able to look at it. So it's clearly from their perspective disappointing that that no one really stepped up here is interesting. When salesforce dot Com was reported to be the leading bidder, Their stocked sank dramatically, and a lot of their very big investors went right to the CEO and said, this is not a transaction. We want you to do up six right now and very early trading post. There's a sentence in here which goes to

your decades of experience. In light of the reorganization of the company's salesforce, the company is not providing specific revenue guidance for the fourth quarter and for the full year two thousand and sixteen. How does the sell side guy do his job if he's not getting top of line guidance. Well, they have to go back and do some roll up to sleeves and try to figure out what's going on here. And I suspect that you're gonna see estimates come down

on the street. Typically analysts will take the most conservative view they can. UM, and you know so and again it's it's it's not so much about the numbers for this company. Almost at this point, UM, I think the next you know question for investors and and and for management is there is there a price, any price, that

you will sell this company. And I think when the initial round of M and A speculation came around the stock was much higher level UM and you know, you could have been a twenty billion dollar price tag to

get this company. Uh. Now the stock is down around twelve billion dollars in terms of equity valuation UM and so I think at some point there may be a buyer here, simply because there aren't that many social media platforms out there that are up and running, uh and that have the impact that Twitter does in fact have in the marketplace. So I think it's some price this will be of interest to either tech buyer like a

Google or you know, some somebody else. Color for us, the hype and hyperbole with you and your team measure every day with the fact that this company makes twenty eight cents in the dollar adjusted EBITDAL margin off of gap revenue to be somewhere in the vicinity of a lot of our listeners are going, wait a minute, these guys are coining money. Amazon isn't. Why is Twitter dog of dogs? It's uh yeah, simply, Uh, this is a tech company. And if you're a tech investor, uh, you're

looking for top line growth. It's as simple as that. And and most tech investors feel like we can grow our way into profitability. What we're looking for, and what we're paying for is unit growth um and it's top line revenue growth and so and you know, uh, Twitter had this coming out of the I P O and we saw the stock trade. Well, Facebook still has it, Google still has it, Amazon still has it. But this is a name that's kind of run out of steam.

Qualit Calm. Money's cheap. I think if I add eighty billion in fifty billion, I get over a tenth of a trillion dollars just two big mergers. I mean, it's just chasing the low interest rates. The money's here, let's go. Let's go to your end, isn't it. Yeah. I think you know this qual Calm deal, the A T and T Time Warner deal. It's interesting here. I think these

are real transactions. These are strategic transactions. Uh you know, in the case of a T and T really recognizing that they need to put a content uh pipe into their distribution system. And I think in a case for Qualcom, they're looking for distribution away from the phone market. So these are strategic driven trip transactions. But you're right, they're absolutely fueled in very large part by the low cost of capital. In the case of a T and t

half of that transaction will be funded by debt. And you know, it's just amazing that JP Morgan and Bank of American Maryland stepped up with a forty billion dollar bridge alone, the biggest to be done in the marketplace. UH So they feel very confident that they can refinance that money on that. That's you know, the bridge loans carry very big fees because they are the banks are assuming a lot of market risk, so they will get

paid on on the fees on the bridgeland. Plus you know they will be part of the uh the group that will underwrite the bonds that will put in more permanent financing to take out. In the old days, it was a six percent business, So you made six percent on onether and six percent of forty gazillions a lot of money. It's not six, but it's still do they make a stick in the parlance, do they make I'm not sure exactly what fees are gonna get here, but

these are very profitable instruments for the banks. When they step up and put capital, they absolutely will get paid for, particularly now that they have to put so much capital side on their bouncy from a regulatory perspective, So they

will certainly price their capital accordingly. And these are still very uh attractive deals for the banks, but because they are assuming a lot of risk here in case of JP Morgan to be of a but you know they will also make fees on the back end by doing coming to the bond market and taking out this this bridge. So well, not a whole lot of room here for consolidation in the social media space, as you say, the same thing holds truing the semiconductor space and that right, yeah,

I think so. Um you know on Entrini of Austin, who cover semis for US, has been extraordinarily busier the past couple of years has just been a tremendous amount of consolidation in that space. Um So, you know, again a lot of strategic driven tran transactions here. It's not just because of cheap money. Um So when when you when you start to see the private equity players come into the marketplace, that's when you know that these are

more financially driven deals versus strategic. Real quick here snap announcing it's going public yesterday, the parent company of Snapchat. Why now, and what do you make the numbers? Yeah, it's the numbers over that we're seeing. Uh, you know, there's not a lot of public numbers out on Snapchat, but what we've seen are just some extraordinary growth rates in terms of, you know, the kind of the metrics

that investors are used to seeing from these social sites. Uh, user growth, daily user growth, mobile user growth, and then top line advertising. So the valuations that Bloomberg News reported yesterday of thirty five billion dollars huge valuations because their last private round, I think about six months ago value the company at eighteen billion dollars. So again the valuation numbers in Silicon Valley, if you still are putting up the top line growth, you can get the valuation. You're

working a strange we do. Mr Graham and Mr Dodd and Mr Coddle wouldn't know this world. Yeah, they they don't think they were aware of, you know, kind of the capital that would be a massed at in Silicon Valley searching for the next big They wouldn't be snapping Mr Rubens starting over to Carlisle Group looking for another raise. Here as they say, Paul Sweeney, thank you so much.

Just brilliant here with Twitter, David Gurroud's a great deal of seth masters with us, would they be alligned spur Instein uh in the in the idea that we've been talking about yields and yield dynamics into two thousand seventeen, and it's an interesting linkage of everything we talked about in economics and over into foreign exchange and over almost into our politics as well. Absolutely seth looking at your

most recent note ALIGNE stood out to me. You said, you've got to have only the bond exposure you need nothing more easier said than done. That's a pretty difficult thing to figure out, it really is, and of course it very much depends on exactly what your objectives might be. I think the problem is in the past, it wasn't such a sensitive variable. You could afford to take a little bit more exposure and things that were safe, especially in bonds, and still get a reasonable yield and not

have to worry a lot about risk. But today having too much in bonds can be a big risk for people, both because the yields are so low you're not getting a lot there, and because with interest race likely to rise over the next several years, you have price risk too. Looking at these super long term bonds, fifty year bonds in Italy hundred your bonds in Spain. What do you make of that? Is that trend going to to continue? Well, I think those issuers are selling those bonds now because

they can, and from their perspective it's rational. The question is the buyers and why are they doing this. I think in some cases their institutions that are trying to lock in a long term mas set to match a long term liability, or at least that's what their their intention is. The risk of this creates for everybody else is that those issues go into the indices. And now if you're if you buy a bondy TF, you're getting a decent amount of exposure to very very long duration.

The duration of all of the bonding disease has been creeping up over the last few years, especially outside of the US, but here in the US two at a time when we would say it actually makes sense to be on the shorter side a little bit of the duration spectrum. So we think that this is a great an example of why you don't necessarily, as an investor, necessarily benefit just from being passive just looking at the bond space overall. Going into the ECB meeting last week,

there was a lot of talk of bond scarcity. How's that playing out in your world? I think that the fact that there is bond scarcity in some parts of the world where central banks are buying up, literally vacuuming up almost everything that there is, especially the Eurozone and uh in Japan, that that's one of the reasons why yields have remained so incredibly low. There are also, I think some investors who are still much more worried about

deflation risk than inflation risk. But when the sentiment changes, I think that we will start to see a shift in the investor behavior. And we know that many of the central banks are now trying to figure out how to extract extricate themselves from this posture. And it's interesting, your south is not only the great bull market and bonds price up, yield down in the extraordinary years of ONA and in twelve, and certainly this year looks to

be the same. You look at where bonds are turning just looking at one major bund index from the Lehman bottom, or you look at the Bloomberg Barclays Global Aggregate Index, you know, the old Lehman index. I mean, most people don't realize the bullmarket in bonds is equivalent or superior to the bullmarket inequities. Right. Well, the the total it turns, of course to aren't as high as the bullmark in equities, but then again you wouldn't expect that. But you're absolutely

right in terms of it's how unusual it is. Um it is extremely unusual, and it's been going on for a very long time. It's been if you really think about it, it's been about a thirty five year bull market, and it's mathematically impossible for it to continue. Because okay, what is your advice to an institutional portfolio forget about a retail clients and our retail listeners who are in financial repression. What do the pros do? Do they buy

dividend paying stocks prefers? Well, I think that they that's what they have been doing, and that's a trap because here's the problem. If you buy a stock because it has yield, that means you're buying a bond like stock that tends to have more inflation interest rate sensitivity than the average stock. And I totally understand why people might do that because the yield on stocks today is higher than the yield on most bonds, and there are many stocks that have yields that are in the four four

and a half percent range. But the problem you will have is when in fact interest rates begin to move up, those are the stocks that will be most at risk. And here's the way to think about that. Um. In general, stocks have to be sensitive to interest rates because the interest rate is essentially the way you discount future cash flows from any investment. So in the case of a stock that is mostly trading on its earnings and how much you value those earnings, that effect is significant, but

not determinative. If a stock is trading on its yield, though, how much of those are paid out, then it's all about what that interest rate is. And if the interstrate was even a slight it up, many of these yielding box will get crushed. Seth, thank you so much, Seth. Maisters who maybe this morning greatly greatly appreciated Who you put your trust in matters. Investors have put their trust in independent registered investment advisors to the two and of

four trillion dollars. Why they see their roles to serve, not sell. That's why Charles Schwab is committed to the success over seven thousand independent financial advisors who passionately dedicate themselves to helping people achieve their financial goals. Learn more and find your independent advisor dot com. David Bring in Iron Jersey. He helps us out pretty much every six weeks or so with our FED showing interest rate that's coming up. By the way, we should say, there's a

meeting on the horizon, right, Yeah, they haven't. I don't go. They won't let me go to the there's a meeting, but Bloomberg doesn't let me go to the meeting meetings to get ready for the show. Just keep the spontaneity up. Anyways, I Jerseys here, here's a portfolio manager at Oppenheimer Funds. As you say, we talked to him a lot about US treasuries. He's going to talk about Brazil a little bit to them. Excited to hear your thoughts on on

that as well. Actually, let's let's start there. Let's look look at emerging markets. And we've had a change of power here. We have an interim president Michelle Timmerson. He's not going to run in two thousand and eighteen. Uh, there's been the political crisis. They say that now they say that. Now I was gonna say, we'll see what happens there. But he's made a lot of promises about cleaning things up, and there's a lot of cleaning up to do. Are you optimistic that that's going to happen

down in Brazilian? Yeah, we are. Um. You know, one of the things that that we look at when we look at the politics of the situation is what's the likelihood that you're going to have a friendlier congress where they're going to be able to get their fiscal house in order. Um. There is there is some optim is hum that that that's going to happen. Some of the promises that were made might be a little bit of a stretch, but if they can get most of the

way there, then that's very positive for them. Um. And And you know, from a bond market's perspective, it's things like what's going on with inflation. Inflation is coming down there, what's going on with bond issue once? Will they be able to actually hit their fiscal targets? We think they'll come close. Um. So, so all of those things make the environment for buying bonds that are still trading at

double digits UM pretty pretty attractive. Now. It's not for the faint of heart, you don't want to you know, jump in with both feet, UM. So you need to manage risks and and make it part of a larger portfolio UM, which is uh, you know, diversified um broadly speaking. But but we do like Brazil and we do think that uh, you know, we're overweight in both our emerging markets local debt fund and our and our international bond funds. Well,

let's return to the interimness of this presidency. As an investor, does that make things easier or harder? If this guy is able to right the ship knowing that he's gonna be out in two thousand eighteen, doesn't that interes do some some new uncertainty? Yeah, it does because you don't know necessarily who's going to be the next who's gonna be the next leader. There's no air apparent necessarily, so

so we watch those things. But you know, it is it is the elections two years away, so we're still looking for at least a little bit of stability in the interim. And like I said before, you know, you never know, if all of a sudden he becomes very popular, there is the possibility that there could be a um, you know, that we could know, at least one candidate who might run for run for office, and and quite frankly, it's you know, will we see stability in places like Congress?

Is corruption over in Brazil? You know, it's it's hard to know that without being in the inner workings. But but at least there are some positives. You know. One of the things that we've always liked about Brazil is that the governmental institutions continue to be a positive and they continue to operate the way you're supposed to. I mean, you don't have a president, you know, the the Justice Department um going after a sitting president with weak institutions.

So because they're strong institutions, we think that Brazil is likely to get through this in decent order. You mentioned inflation. What else are central bank policymakers wrestling with in Brazil

right now? Well, well, both growth and inflation. You know, one of the one of the issues that they had for a while, and one of the reasons why they had been hiking interest rates was to try and fight inflation and get inflation down and to try and make sure that the real which really their currency, the Brazilian real, was the kind of the big stabilizer and really was the instrument that was hard hardest hit by the politics

of Brazil. Um, you know now that you have a situation where the politics is over now the central bank and focus more on growth and inflation. Inflation is coming down. Inflation was double digits, it's likely to be you know, highest single digits now. But um, but that means that you've already had one rate cut and you're likely to get more and that should bring interest rates lower. How do you and this is so great with your experience a credit suite. See now you're over with a good

international people at Oppenheimer Funds. How does an investor know that his manager is managing the currency risk? If you look at the Brazilian equity markets, it's stunning the difference if you're in Brazil real or in US dollars. Yeah, so, so you know that's that's a choice and a preference. Um. You know there are um, some investors who fully hedge their portfolio as other investors who don't. UM. In our in our international bond fund, we actively manage our currency exposure.

So UM, we say, okay, what is the dollar cycle? So we first look, okay, what's the dollar broadly doing? And then if we think that the dollar is going to be appreciating against most currencies as it as it quite frankly has for the last couple of years, um, then we say, okay, well, which currencies are likely to do the best and worst? Because one of the things

about currencies in particular is that it's a relative game. Uh. You know, you can say, oh, the dollar is gonna do great, but then you know, I'm you know, this might be that one currency out there that actually does better than against the dollar. So so you need to make sure that you do your homework, that you look at every country, You look at all of the crosses, you look at you know how, um, not only is is the U S faring, but how are the our

counterparties faring? Um? So you know, how is Europe doing visa vi the US? You know, And and with currencies, a big theme had been for a long time this policy divergence idea where the FED would be hiking and the Bank of Japan and a lot of other central

banks would be easy monetary policy. And and that's kind of fallen a little bit by the wayside, which is the reason why you've seen some stability actually and currency markets for for the last six months or so after after the dollar was very weak in the first quarter, there was so much exuberant surrounding Argentina's returned to to the bond markets. Do you do you share that? Are you excited about the prospects in Argentina? Well, there's so

certainly things in Argentina have improved quite a lot. I think one of the you know, one of the things that we're looking at is how much issuance is they're going to be out of not only the sovereign, but out of prints, out of the municipalities and and out of a lot of other government institutions there and where. So we're a little bit worried on the supply side. Um. You know. One of of things that is is that you can say fundamentally we like it, um you know,

we the technicals might be a little challenge. The question is where are things priced. Are things priced for a heavy supply load or are they not? And you know what's going on in Argentina and lately with with spreads acting the way they have is we don't think it's you know, all of the risks are exactly priced in So there they are and probably will be some opportunities, but we were using more caution in a place like Argentina,

somewhat more so now than we are Brazil. Bring us back to our next section on the United States, we've been sort of devoid of the Dutch go silliness. I mean, any chance this November meeting, when we visit with you, is there any chance we get the mother of all surprises? I don't think so. Um, certainly the market doesn't think so. We're pricing in, basically, you know, as close to a zero percent chance as the market ever prices in for such things. Um. You know, the motus aprandite of this

particular FED is not the surprise markets. You know. One of the Janet Yellen's things is when she was the chair of their communications committee for the for the Board of Governors, was, look, we want to give the market

as much information as we can. They you know, in some ways it's probably too much information, um, because it's can it's confused and modeled the um, you know, moddeled the message somewhat, I think, But um, but the chances next, what's important about next week is how did they change the statement in their own nuanced way that they always do to prepare us for what might be coming in December. So do they do they upgrade their assessment of the economy.

Do they continue on the exact same path, which probably means that they hi in December at least I think so um? Or do they do they downgrade the economy and say, hey, some of the data has been a little bit, a little bit concerning um. So so it's that little bit of nuance that the markets are gonna latch onto and you know they'll be you know, one sentence, one phrase in there that can uh, that can change market perceptions quite a lot. Here we go again, exactly

every six weeks. It's the first time Ira jar Jersey has ever been with us for a dead meeting. It's it's crazy, but we'll do that. Well, we're looking forward to Michael McKee will be in Washington giving us perspective. And I think no news conference. We should say, yeah, no news conference. But but I would say to everyone where whatever you're doing that afternoon of November two, right, I would pay attention. I just never say I've been burnt badly not paying attention to FED meetings. So I

I really do look forward to it. I aroh, One of the things we talked to Seth Masters of ABE about this earlier is the idea of longer duration. Everybody is so desperate that the new five years is seven, the new ten years is twelve or fifteen, and critically the new thirty year piece is in the case of Austria's seventy years, that must end ugly. It did for Napoleon. I'm gonna suggest maybe it will for us as well well. So I think the the underappreciated risk, particularly by individual

and is how much duration risk is out there? Um So, to your point, like a seventy year bond actually doesn't have that much more duration risk than a thirty year bond, And you say, well, how can that be. It's a it's one of the one of the magics of bond math. But at the end of the day, um the fact that you have a lot more people buying longer UH maturity assets and there for longer duration assets, they're taking

more more interest rate risk. So when you buy a ten year bond and interest rates go up one percent, you can lose about nine percent of your money. If you buy a thirty year bond, it's more than double that. So you're you know, you really take a whole lot of interest rate risk when you are buying these longer

duration assets. But but basically, the you know, central banks are forcing you to do that because if you're yield hungry at all and you want some income from a fixed income investment, you need to go out there for to find positive yields in many kinds. It was beautifully explained why we love to have you, um, But the distinction there is because we're so yield hungry. When new bonds are issued that are longer maturity bonds, the yield is much lower than it should be, right well, because

demand is so strong and high for them. And that's and when you say should be, you know, we have all kinds of models. We say, okay, you know, nominal GDP should be where your tenure uh bond should be, which means that we're still probably somewhere like a hundred basis points or a hundred and fifty basis points rich. My model says we're closer to forty basis points rich on the tenure, so um, you know, not not so

so crazy far away. But but regardless, the fact is that supplied demand dynamics or such that you know, you you wind up having this this insatiable thirst for any yield anywhere when you know when I always use the WB function on Bloomberg every morning just to say, hey, you know how things moved overnight. And when you look at the United Kingdom with their tenure yield at one point to two percent, and then you go down and you say, if you're in Germany it's now four basis

points zero point one four percent. That's not very exciting. So you have to go to thirty years if you want any yield in Euro or take more more risk, like by buying a peripheral bond like like Spain or Portugal. I a Bloomberg dollars spout here. The strong dollar, how long is it going to continue? Well? So, so we think that the dollar might have one more run up um as the market prices for a few more fed hikes UM. But but generally speaking, we think we've probably

seen the end. We've probably seen the dollar highs uh in general. UM. So we're looking for the dollar to turn. You know, if if if the world had played out exactly to our forecast from a year ago, we thought that the dollar would have turned already because we'd have some central banks that actually, instead of easing, would be um on hold and maybe the next move would actually be tightening. So um so, so we think we're nearing

the end. We're probably at at a plateau here, so we don't expect a whole lot from the dollar generally over the near term. Very quickly. Cleveland FED service sectors three point two percent Cleveland FED as a core a curving up on a on a log y axis, it's quadratic. There's some acceleration to non goods inflation. Is that change

the dialogue in the next six months? So so services inflation was that one of the things that that was lagging for a long time, it's not known and and now you have services inflation picking up and that can be more sustainable and given that we are services based economy, we think it will if you look at core inflation, so you look at whether it's it's the feds UH preferred measure, the core PC deflator or the or core c P I. You're looking at at things that are

close to the Fed's target. Now the question is in in this you know yelling's optimal control environment. Do how long do they run that higher than their two percent target before they say, hey, we need to hike a little bit faster than we have been. Um. They're willing to do it a little bit more, um, but but it's gonna take some time. A Jersey, thank you so much with the Oppenheimer Funds. Look forward to seeing you here in a number of days with the dead Meat.

It'll be a live show November. David Girl, This is a really important thing in economics. In its Old world new world. There's level and there's growth rate. And as a general statement, Old world England, Europe are much more better at level analysis in the U S which looks at the rate of change for a second, rivet etcetera, etcetera. Ken set up lives in the same world in equity

research with ever core and Ken good morning. And what I look at is when I look at the level of Twitter profitability, anybody would say just shut up and buy it. But the rate of growth of core revenue build and I compare it to Facebook April up fifty something like that, and that number today just stunned me. Up percent, Twitter is basically a no growth entity, isn't

it right? And I think if you look at the North America ad growth it actually declined to per cent, so coming from International advertising UM, which is a smaller base UM, as well as some of their licensing fees and other spline. May I suggest is a heart and I think everybody knows I'm a hardcore Twitter user. You flood the thing with the ads like everybody else, and then you get clowns like me to pony up an annual subscription to make the ads go away? Is that

the dummest thing is that the dumbest things slice bread? Yeah, I think that would be tough because I think that what would happen is you'd leave an opportunity for Facebook and others who are trying to do more in the area of broadcast to say, just come over here. There's no ads, right, and there's no subscription price. Jack Dorsey on the call a few minutes ago, saying it's his goal to get to GAP profitability in two thousand seventeen. From what we've seen today, from what we've seen of

this company here over the last few quarters. How how likely is that to happen? Do you think? UM? I think it's I do think it's it's it's likely. UM. They announced the nine percent restructuring um and basically saying that they're going to narrow the number of sales channels

from three down to two. Now, maybe that sounds a bit like Yahoo and kind of you know, past years, but um, I think Anthony is bringing the experience that he has, you know, from Goldman Sax and looking into this business and saying, Okay, right now, it doesn't look very expensive on the basis of revenues right as as a multiple, but it does look very expensive when you're talking about earnings, particularly because of the stock based comference involved.

So I think, um, you know, part of them going through this process to drive that profitability I think would potentially make Twitter more attractive to a potential suitor. Can you bring up Anthony Noo, chief financial officer at Twitter when you're looking at the management of Twitter right now? He's playing an outsize role here. Of course, Jack Dorsey doing a number of things at once, but Anthony Nodo here is is really driving a lot of the changes

of Twitter. Um, maybe from from a you know, from an operational standpoint, but I think in terms of the vision, I think Jack is still very involved. He talked a lot on this call about machine learning and artificial intelligence and how they're applying it to notifications and home timeline and ultimately the onboarding and dissemination of tweets. Um. You know, they cited that as a reason why you know, their their daily active user growth has been able to accelerate

over the last three quarters. Um and and and to Tommy your point, you know, that's what ultimately would also help drive better click through rate and performance of the ads and ultimately drive what average advertisers are willing to pay for that traffic. I mean this the ideas of Bolton folks. Google eighty eighty billion dollars of revenue versus

three billion of Twitter. If you're rounding conveniently help me here, Mr Sena, with a very sensitive issue, which is a lot of people really upset with a tumbler like porn light, porn stuff we really don't want to see, except et cetera. What's Mr Dorse you gonna do about it? I've heard a lot about that from people in the last six months. UM, and it's seeing that flow into Twitter. You're saying, yeah,

I think there's been a tumbler. Yeah. I mean they spent some time on the call talking about safety as being a very important priority for them, and um and they said to basically stay tuned. By the next quarter, you're going to hear new measures if they're rolling out to address some of that, and I'm sure that will be included. Um. But yeah, it certainly didn't help Tumbler um when tumbler was looking to be sold, and um, you know, I think it's you know, yeah who still

still took the chance. Um but um but I think it is still a state. Why I'm gonna pick on Google, Why Google would buy Twitter. I mean, it's a it's an inconsequential bold on except in certain industries like what David and I do are addicted to him. Well, I think, you know, Google would likely face certain um anti trust hurdles because you're talking about a very large ad platform, even though it doesn't really compare to Google and scale.

You know, you know, once you after Google and Facebook, you know, everyone sort of drops down in scale quite a bit. Um. Plus, you could argue that Twitter is in some respects of search Engine because of the real time nature of it. I think though the messaging aspect is broadcasting messaging, all of those are sort of hard businesses to sort of just break into and I think Google has tried many times and has had kind of, you know, limited success. So if you know, Twitter is

very well known. You listen, you know, you watch the elections and people are talking about Facebook and Twitter and Facebook and Twitter. Right to have Google, um essentially have one of those two tools where people are essentially coming together and understanding the content all around them, UM, would be a good thing for for Google. UM. I just think that there's a question about price and ultimately you know,

regulatory can Your background is in media. Let me take advantage of that to to ask you for your reaction to the A T and T Time Warner deal. How much sense that makes what it says about the media environment right now? UM, it's interesting, it's um. Yeah, when I worked I worked at Time Warner years ago during when they announced the AOL Time Warner merger. UM, and you know, and I think, is you kind of fast

forward um today? Um, definitely that the industry is changing, and I think it does require a combination of content and distribution heft um together and to try and creating an experience for users is less complicated, UM, you know, less cluttered with you know, different packages that you have to buy, etcetera. You just want to clean log in, you watch the show that you want to watch when

you want to watch it, etcetera. I'm just not sure that that combination will change all that much, you know, given probably the concessions that need to be made from a regulatory standpoint where to go through, and ultimately just even the commercial agreements that are in place. UM, that would mean that you probably have years before you can enact really any real change for the consumer. Ken, Santa, let's go to arbitrage one and one. Mr Altmon would

like you to speak about that this morning. Can you acquire shares in Twitter for the takeout? UM? I can't know you, no, I know you come on Ken, you're restricted from everything including cars Indians. But should our audience acquire shares at this giveaway price pending an acquisition managed

by ever cor? Oh? Well, you know, it's difficult for us to speak on the acquisition element, you know, specifically, but I would say that coming out of this call and looking at there's results, they do feel improved versus the prior to quarters that we've seen. UM, even though you're seen improvement off sort of the lower expectation. Faith, But that was a fabulous no. You don't have to

say anymore consent. Your general counsel was standing over your left shoulder, answered that you did a really good job. Thank you, folks. I was busting ken chops because there's a lot of delicacies in the business about what a securities analyst can it cannot say. Did we do a good job there? With with Abercard on Twitter, that was really interesting. Thanks for listening to the Bloomberg Surveillance podcast. Subscribe and listen to interviews on iTunes, SoundCloud, or whichever

podcast platform you prefer. I'm out on Twitter at Tom Keene. David Gura is at David Gura. Before the podcast, you can always catch us worldwide. I'm Bloomberg Radio. Who you put your trust in matters? Investors have put their trust and independent registered investment advisors to the two and four trillion dollars Why Learn more at find your Independent Advisor dot com.