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tv   Street Smart  Bloomberg  April 30, 2015 3:00pm-5:01pm EDT

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al alix: welcome to the most important hour of the session. stocks around the lows of the session. small-cap shares really leading the way lower. we are expecting a slew of earnings. we will bring you those numbers as they cross. manny pacquiao joins me from las vegas to discuss his fight with floyd mayweather. you do not want to miss it. "street smart" starts now.
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alix: here are the top stories we are watching. consumer spending climbing in march, enough to keep the u.s. economy from drinking. purchases rose .04 points are -- .04%. the labor department reporting that wages for a private sector employees climbed 0.7% in the first quarter. wages were up nearly 3% the biggest gain in more than six years. shares of omnicare arising. the company said to be drawing interest from potential buyers. potential bidders also include walgreens, boost alliance, and mckesson. we have less than an hour to go on the close. scarlet fu is looking at the action.
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scarlet: right around the lows of the session. trading is picking up. selling is picking up. i'm looking at volume and nasdaq stocks notably higher. 11% above the 10-day average. the nasdaq is for it at -- is falling for four straight day. it has been downhill. look at the 10-year yield. it has now turned around pretty much. it was unchanged earlier. prices were declining and yields were higher. treasuries were mired in the longest losing streak since february. as stocks continue sinking you are seeing some buying of u.s. treasury's right now. let's talk about the dollar. what happened to the strong dollar trade? the losses are accelerating this afternoon. the euro strengthens. that is the plus side to this
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trend. europe's economy is improving while u.s. growth is slowing down. let's take a look at oil. second biggest monthly gain since may of 2009. inventories are also declining. that is having an effect on oil prices approaching $60 a barrel. nevertheless, we are seeing pressure on energy stocks, down .6% of 1% -- down .6%. alix: what is going on in the markets? the year's most popular trades are unraveling. we have the euro climbing against the dollar, which is facing its first monthly decline since june, even though europe is still limping along. we have european stocks selling off. we have the german 10-year bund seeing its worst loss since 2011. have the 10-year over 2% even
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though the fed is still dovish. lisa: you are the one who brought this to my attention this morning. you took a big picture of the markets. what is the deal? lisa: that is what everyone is asking. some of this probably is speculating, crowded trades being pushed out of small really exits. that is a only explanation. for some of the massive moves. without a real catalyst. yesterday, such a bizarre move. treasury yields going up even though there was bad u.s. economic data. today, there is pretty good economic data coming out of the u.s. and treasury yields are recouping some of the losses. what a goat -- what is going on? people are looking at the international correlation in all of these things, the dollar oil, those that are inversely correlated. all of these correlations are
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kind of unwinding. for creating tension. alix: what do you see when you take a look at some of the bizarre movements happening? rich: i think those are excellent. you have had an improvement in sentiment from best for europe -- in sentiment for europe. as lisa mentioned, usoc stocks:. there is -- you see crowded. trades i don't think it is a huge deal. but we do see these in markets occasionally and a repositioning now of trades that have made money. alix: have we seen the bottom for yields? have we already reached the trigger? are the negative yields just getting too much and investors are revolting? rates: we are certainly above the levels that we saw earlier in the year. it is hard to see a scenario where we go back to the baseline.
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there is growth in the global economy. so, yeah, barring a catastrophe. alix: you are saying they were overcrowding and they are heading for the exit in one tiny door. but what is the trigger? lisa: some speculate that some bombastic comments with jeff gundlach -- alix: we have that for you. a lot of these the above are saying. you have bill gross calling german 10 year bund the short of a lifetime. gross: it is 200 basis points lower for germany. equal quality? yes. but 200 basis points lower in germany.
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u.s. treasuries are a whale of a buy or german bunds are a whale of a sure. alix: then there was jeff gundlach. good luck: i wonder why people don't leverage up negative yields? it seems to me there is him is no way to lose. let's say you leverage up the german two-year a hundred times. we get 20% return. what is the downside? if you can hold it for the two years, even with price volatility along the way -- erik: are you doing that? gundlach: i'm thinking about it. alix: we said to your point,? is this it lisa: it doesn't help. it doesn't make you want to go out and buy bonds that managers are looking to short every which way they can and leverage their bets. rich: the interesting dynamic about when central banks do qe when it starts to succeed, bonds
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selloff because you're trying to reignite optimism into the economy reignite inflation citations. generally, if you do that bonsall selloff. part of it -- bonds will selloff. out of of it is the comments and part of it is the qb starting to work in the u.s. they are not going to short-circuit. they are not going to stop early. they are going to keep buying. that shift the psychology that this is starting to work. alix: we have seen money supply in europe certain to pick up. and we see lending increase for the first time in years. not a lot, but it is starting. raise: sentiment is sensitive around infection points. the news out of europe has been pretty lousy. you are starting to get good news. at the margin lisa: maybe the good that is also a wake-up call. imagine i wanted to borrow a mortgage. would you pay me to borrow money from you? at a certain point, the only reason you would do that is if you fight you would lose money
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everywhere else in the world except by lending to me. alix: maybe you will. lisa: when there is a real catalyst, something that actually happens either here or in europe and what kind of volatility -- and might we continue to see this? rose: i think i was on your airy couple of weeks ago and said we are in a goldilocks situation, specially inequities. this that is doing what it is doing and equities are looking good and we are worried about the dollar. was going on it -- what is going on in global equities is that you are moving away from the goldilocks a choice and -- goldilocks situation. the markets are really sensitive to news on both sides. if the economy is really good that puts the fed them play. if the dollar is really good that affects the markets. alix: rich, you are sticking with me. much more to discuss including
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oil and emerging markets. and later, a slew of earnings -- linkedin expedia. in the coming hour, manny pacquiao will join me from las vegas to discuss his fight with floyd mayweather. if it is the fight of the century. you do not want to miss this interview. ♪
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alix: oil is floating with its biggest drop. my favorite topic. what is driving this rally when there are so many negative fundamentals out there? dan: this is financial inputs that are chasing the oil trade.
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i think they are out racing the puck. there are big influxes into dedicated commodity funds. we have seen a huge influx in space but if buying. that has been collected in the cftc reports. a lot of people are rushing to belong oil for obvious reasons. fundamentally, we cannot say under these prices forever because oil doesn't come out of the ground for less than $60 a barrel. but that doesn't mean that oil should be lower than it should be right now. many fundamentals are still against oil right now. for at least for the next several months they are out racing the puck. i don't want to be long oil yet. alix: but when you look at prices near $60, what does that do to the global economy? rich: the global economy has benefited from oil. i would say roughly at these levels, it is in the positive for the global economy.
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you get concerns about the collapse of the oil patch if it is much lower. if it comes much higher, that was the fed into play. . this is probably a pretty good range for oil prices. alix: it is enough to pick up capex from companies yet? rich: i don't think so, but it may slow down. if we get zero decline in rigs that is probably a positive. alix: $140 billion in cuts? dan: these are phantom cuts. you say you are going to cut. if prices make it worthwhile you say you are not going to cut as much. if you get over $60 and if you get towards $70, you get financially able to hedge against offboard production. then you get to put back into the budget. alix: oil shuts down, prices,. dan: best prices go up.
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dan: if they get close to $60, we won't see much higher. we are going to see some moves back in oil prices back down into the mid-50's. alix: what kind of volatility is are you expecting going forward? and what is the impact for the global economy when you have to deal with this unpredictable oil? dan: i have been surprised about the volatility. as we have got close to $60 that is what i was talking about, money chasing oil prematurely. and the dollar that has finally decided to show a little bit of weakness here. i think those of those things have complied to make it go higher -- have combined to make it go higher than it should be. at the top of it, let's see if i am right. alix: is the volatility dangerous? ridge: oil -- rich: oil volatility is a fact of life. we are in a period where i think
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there is excess supply of oil and other commodities relative to command -- to demand. i think the experts agree that we are probably not going back to $100 anytime soon. i think there is a fundamental supply-demand factor that is relevant, a net positive for the global economy. alix: i can see one $100 per barrel prediction. dan: i saw one at $200 out of opec. alix: let's talk about the company's. what was surprising from exxon is that they beat estimates by so much. the production did not fall, which is pretty impressive considering we have seen the oil price come up. what is the difference between the companies? dan: tomorrow, we will see the beat based not upon oil prices
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but because they are fully integrated. the downstream assets have saved them from a disaster, where the emp players do not have that secondary business to look at to save them from a disaster. refining is doing well. chemical will do well. transport will be well. storage will do well. it will not make up for oil prices being what they were six months ago. alix: will oil stocks have to reread their pricing if we see oil come off? dan: again, a lot of the players are really pricing for $75 a barrel oil. again, i see investors out racing the puck trying to get somewhere where they think the puck is going to be 6, 8, 10 months down the road. i think they are getting too far ahead. alix: thanks so much for the insight. always a pleasure to have you. richard is sticking with me. coming up next, a new push to get a deal done by sunday.
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the great finance ministers is the government will not discuss pension reform. is the sunday target wishful thinking? elon musk, the man behind the electric car race and the seller race and the space race, he wants to get behind another field, batteries.
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alix: greece and it'ss european partners are hoping to face an agreement on sunday. is a sunday target just too ambitious?
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good to see you, jamie. what is your take? is that really go to happen? jamie: that is probably slightly too early. you have to have the figures, the details come although that has to be fleshed out. i think there still enough impediments in concepts before we even get the numbers. i think it is a little bit optimistic. but i think they will get a deal eventually. alix: when? jimmy: they have a payment for the imf on may 12. the real thing comes back when they have to pay the ecb. alix: can they really make it to june? you said it was an easy deal to get done. rich: i know a deal can get
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done. i don't know how easy. it is very tough for the greeks. the great people don't want to leave the euro. they are negotiating with folks who know that the greeks do not have a strong hand. that is why it is a game of chicken right now. eventually, a deal gets done. it is one that the greeks are not going to like her much but is probably the best deal on the table. alix: investors surveyed said they are addicting 52% will actually leave the euro that greece will leave the euro. the answer in january was 31%. are we seeing a high-end event wrist -- event risk? jamie: there hasn't been enough change in the past few weeks to justify such a big change in view. the fundamental principle in greece, while it has not been written off, the debt has been restructured. they will never have to pay back part of it.
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they're debt position is relatively sustainable. i'm sure they will get a deal. alix: the bigger issue though is even if the ecb can contain contagion to other markets, how do you hope business spending? how do you keep young people in greece to work there? how can it be fixed? richard: that is an excellent point. the optimistic case is that greece has made significant adjustments. if you can get the turmoil behind them, they can begin to recover. but you are absolutely right. this has been a depression in greece. it is an enormous into the economy. that they have already defaulted twice in 2012. their debt payments are to creditors with very low rates. the negotiations now is how big a surplus does the greek government have to commit to.
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that's why i think a deal gets done. but you are right for the greek citizen, it is an awful situation. alix: the greeks cut pension cuts. jamie: he is already doing a different job than what he was doing initially. it's a subjective decision, isn't it? alix: do you think it will have some kind of snap elections that will force them? jamie: it was relatively close last time. there is a possibility that reforms the eurogroup insists on are so different from what they were elected on. alix: more and more and more. i guess we will keep our eyes on sunday and a potential deal. thank you so much for joining us. coming up, let's go to -- will
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he hand floyd mayweather his first defeat? ♪
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alix: here are the top stories. george soros may be facing a monster tax bill. one of the world's greatest investors used a loophole that allowed him to defer taxes and reinvest them in his fund where they continue to grow tax-free. at the end of 2013, he had amassed $13 billion through the use of deferrals. that is according to irish real tory filings. oaks street capital group is evaluating parts of general electric's finance business. the firm has "some serious interests" in a few things. and bernie sanders is running for president.
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the independent senator from vermont saying he will run as a democrat. sanders gives hillary clinton her first official rival for the party's nomination. 30 minutes to the close of trading. scarlet fu is looking at the notables of the session. we are seeing a triple digit telephone the doubt. skyler: at least -- triple digit changes all the dow. scarlet cord on the care is drawing interest from cvs and other groups. ed and jeff spoke with people with knowledge on the matter. other potential bidders for this company include walgreens, boots aligns, and mckesson.
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i also wanted to mention yelp which is seeing its biggest drop ever. last quarter rose 55% but missed analyst estimates. blake harper. best when he said there is not a lot of forgiveness when it comes to tech companies right now. they are valued well and there is the expectation they will perform well. a new company based in san francisco, you have to show that growth of 55%. the remarkable -- glu mobile gettingteaming up with britney spears for in your game. it was profitable last quarter when analysts were expecting a loss. alix: get ready for another taper tantrum.
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not here at home but at markets around the world. black is warning that history will repeat itself. every time the fed hikes interest rates, markets tend to face severe tension. we are better prepared for today but it will still be a major shock. what do you think about that? true? rich: historically, the facts are correct. the fed is doing everything it can to try to avoid or minimize that. it will telegraph the rate hike. by the time it happens, we will know it well in advance. in addition, many folks think that we had this back in 2013 with the tapered tantrum, when the fed hinted it would start to slow down the balance sheet accumulation. so no one knows. my sense is that there will be some dislocation.
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it will be a head wind for economies like brazil and russia who are now facing their own had when. but -- their own headwinds. but my sense is that it will not be cataclysmic. there will be some. breakage along the way but i think they are exaggerating. alix: alex, you manage equity mutual fund with $1.1 billion under management. you just heard rich talk about it not being as bad as black rock is talking about. alex: it has been very well telegraphed. i don't think it will be too disruptive. the other issue is not so much are they going to raise interest rates but what is the magnitude ? if you look at the forward
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curve, will be 25 basis points? most emerging market economies can handle that. this will renew the focus on the current account deficit countries. perhaps indonesia, turkey, which have large current account deficits, they may be more vulnerable. alix: it might have a bigger impact on brazil or russia. where do you see the biggest risk in emerging markets and the biggest opportunity? alex: the biggest risk is countries that don't have their macroeconomic house in order. i would so that in there with indonesia and turkey. when it comes to opportunities. we don't look so much at countries but more at sectors and individual companies. still one of the great opportunities is the internet or
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software technology. as we see in developed worlds and a lot of these companies whether it is amercado libre or alibaba, they are disruptive and breaking down not only old business models but old in a sense business oligarchies, the old guard. we are seeing that demand is strong for those services. alix: take a look at the global picture here. what is the single biggest risk you see in the next six months? rich: the single biggest risk is geopolitical mistakes and tensions. we have six or seven wars in the middle east. if you had said this two or three years ago, oil would be a $200 a barrel. oil is at $60. russia has invaded a sovereign state.
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and many of us have become complacent and said this is going to happen. at some point, i begin to wonder if there is some shock that will break the camel's back, geopolitical tension or turmoil? but so far, it has not happened. alix: complacency warning from rich clarida. always a pleasure to have you here. after the break, she is oblique heads to silicon valley. why the leader of a new economy is looking for tech inspiration. ♪
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alix: this is "street smart."
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salesforce.com is working with the bankers to field takeover offers. the shortlist is really short. apple, microsoft, ibm. give us some perspective. what would a salesforce.com take out mean for the tech world? beau: it would be great. we sold a company to salesforce for $80 million. we hate to see them go, but a big deal would be great for the overall tech market right now. alix: why? bo: there are some companies that have really made a commitment to the cloud. to have them make such a statement about the whole shift that is happening, we all know it's going to happen but accelerating the timeline of it happening for little companies
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would be great. there is this big statement that someone is willing to look down however much it is going to be to do that. i think it would accelerate the whole movement to the cloud. it would be great for everybody. alix: salesforce made five $3 billion in sales last year. then you have uber worth $41 billion. we do not know what kind -- $41 million. we don't know what kind of turnover they are bringing in. bo: i don't know how much money they are making for you. when i look at my statement it's hot. alix: well played. bo: these funds do not want to be left out. they are playing the same game we play. they are going to make 15, 20 25 of these bets. not all of them has to go right. . uber is one of those companies
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that has a large enough playing field that they can make a bit like that. alix: we have to talk about secret. that company is shutting down. it did have a. valuation of $100 million. it was getting vc money. then it went belly up. is that a good thing for the private market? bo: it is a reality. it is not the sign of trouble ahead. $50 million valuations, $100 million valuations, $40 million valuations, they are not all going to make it. it went sideways. it is not that different from snapchat or whatsapp which are huge successes. i think it is below the bad product and a bad team. . they just didn't execute. alix: what about interest in startups here, especially in the silicon valley.
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what's the relationship here between asia -- bo: it's been fantastic. it has been really good to them. i think it is a sign that chinese companies and the chinese government realize that a lot of the innovation taking place here can benefit them. and they are going to cover it from all sides. i think it's great. alix: is this a talent stock? do we want ages to come in here and suck are talent or is this a genuine investment? bo: i think it is more an idea stock than a talent stock. they come over and they take the idea and bring it to china and
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it works. we have been doing that with korea and others and it happens a lot in the television business. these trading of ideas globally is always going to happen. china is as big a market as there is. so it's great that it is happening more and more. alix: we have a lot to talk about because linked in is coming up. you can catch glu mobile ceo on "taking stock" tonight. can linkedin top wall street again? ♪
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alix: here are the top stories.
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elon musk things he campaign the way to a better energy future by transforming the batteries in the tesla car into a battery that could be used to power homes, businesses, and even utilities. they new generation of batteries is to store volumes of wind and solar energy. since exiting bankruptcy in 2009 gm has spent $2.8 billion on its facilities. the european union is planning a wide-ranging probe into u.s. tech companies, including amazon and google. it is out of a draft plan to establish a unified set of rules for the digital world. the new rules would cover everything from streaming services to telecom. networking site linkedin reports earnings after the bell. the company just bought online educator. linda.com analysts are looking
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for tangible results. what is the significance of this online market that linkedin is betting so heavily with in the next year years? bo: we were at the front and sold them pulse. they had a whole thesis on how to keep people on ling in longer -- on links linkedin longer. i think it is great for media companies that there is somebody out there that is not a traditional media company that is eyeing up a content provider. alix: what kind of more startups are you seeing in the education online content world? bo: way back to a company called babel that we sold to disney. the ceo there is starting a new
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company called helium. is doing the same stuff like lend of the intellectual stuff. there is this notion that you have personalities out there that give speeches that cost $40,000 and have books that cost $20 but there's nothing in between. and there is a lot of hunger for people to learn from these personalities, to learn the type of skills that are on linda. i think it is a trend where you will have more and more people who are willing to pay $10, 20 dollars, $40 to access some of this higher education content. add companies who will buy enterprise licenses for all of their employees. alix: why does this work now? bo: this is going to sound old school, but a lot of it has to do with just bandwidth and the ability to have wi-fi anywhere that really works and to have access to phones with screens that are great and video players that work and all this stuff. i always a technology does more
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in 10 years and less in two years than you think it is going to. we can really watch video pretty reliably on our phones and it looks great. i think that is why a lot of the stuff is starting to work and a lot of the content companies in the video space are making real headway. alix: when you look at companies like linkedin, what are the real risks? bo: all you have to do is look at the last week in the market with twitter and yelp. these guys have got to continue to make the numbers. that is the macro risk. you see have punitive the market is when they miss their numbers. for linkedin, it is similar to facebook. how many more people can you get onto linkedin? if you can't get that many more people on, how can you get more dollars out of each one? and that is the linda idea. let's get more dollars out of each person and not rely just on new people coming in. alix: thank you for that preview.
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always a pleasure to have you here. we will be back. ♪
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omberg television and you are watching "street smart." we had treasuries falling and the dollar rising after data shows signs of improvement in the american economy. we are moments away from earnings family dan and fire i. scarlet, set up the picture. scott: the smp -- scarlet: the
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s&p 500 did eke out a gain for the month. the s&p 500 has cut its events to 1.1% while the dow has given up its gain. they are as line is the 50-day moving average. for the 10th time so far this year, you can see the return of volatility will right here. there has been a lot of generation. we reached a record high in early march. then we got to it again in late april before coming back down. if you look over at the treasury market, treasuries were lower but they have erased to their declines. deals are little changed on the session, but a much -- yields are little changed on the session, bumpy much holding up. we had a week -- wages are
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picking up a little bit more than what economists had been anticipating. it is a big question as to when the fed moves next. june is probably off the table. september still there. the dollar is unwinding. the first monthly decline since june. alix: it is a very confusing market. i am here with lisa and carl. it is very confusing. we still have a dovish fed. we still have the ecb pumping money. we still have the boj pumping money as well. lisa: the people i spain to say this is the unwind of a lot of crowded trades. you have some capitulation. you have people getting out of overbought -- the dollar, for example. if the fed is going to hang
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out for longer it doesn't make sense to think the dollar will keep appreciating, especially on the other hand over the pond over the atlantic, seeing european data coming out stronger than expected, giving the euro a boost. people say the reason why the treasury bounceback today was because you had somewhat of a rotation back into bonds from stocks from pension funds and other big institutional investors who are looking to get back into those safe havens as stocks sold off. alix: does any of this reflect the current economic impairment? carl: the eci sold us way pressures. the economy growing just put 2% in the first quarter we have to focus on the next couple of next key data releases. it will provide some guidance to
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the degree that the private sector is stumbling into the current quarter. coming up next week, we have a jobs report. if we get another lousy jobs report let we saw in march, that is really going to put a big question mark on when the fed will actually be able to raise rates. alix: we just heard the closing bell. let's see where the carnage settled we just heard the closing bell. you do see the dow off the lows of the session. at one point the dow had fallen to 60 points. that was the session low. the s&p down for the fourth straight day. the nasdaq was down over 2%. in terms of the s&p all 10 sectors in the s&p were lower. we did have the fix also touching a one-month high. a little volatility as we have the stock selloff today. we are moments away from earnings.
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linkedin, visa, fireeye aig dreamworks. we will bring you those reports as soon as they cross. also investors focused on earnings, but economic data as well. as carl mentioned, we will get the isam manufacturing for april tomorrow. tom keene would hate this chart. it is all over the place. the ism is the real dollar pain gauge and did provide early clues that exports would follow into contraction. did you want to say something? >> it just goes to show. that confusing chart -- carl: they are running every direction. if they were consistently moving one direction, that would take some pressure off. since we are getting this very
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disparate signal, the probe will be in the putting tomorrow in the ism. we have seen this long decline in the export orders component. also new orders for production have been steadily slowing as well. they are just slightly in expansionary territory, but as long as new orders are slipping, that tells you it is when to follow as well. alix: hold on, guys. gilead science is up. scarlet, what do you have? scarlet: they are declaring their first cash dividend. profits beat analyst estimates $2.60 for the adjusted -- you know what? i have a new number. $2.94, where the consensus was $2.32. the first quarter revenue as well, topping the consensus. $7.9 billion.
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analysts were expecting something shy of $6.9 billion. all of this after the gilead blockbuster hepatitis drug. there has been a lot of concern about the sale profits there. nevertheless, the sales 970 $2 million. that does appear to be shy of the consensus element of $2.4 billion. the hepatitis c drug again that gilead science has put out a breakthrough lock buster drug for the company. company is raising its net product forecast. alix: all right, thanks so much, scarlet. cory johnson joins us in san francisco. break it down for us. cory: yes, the stock is cratering.
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getting quite a haircut -- get it, alix? you look great. linkedin numbers, the guidance, i think is like here for the fourth quarter and for the year. but that said, their business group fantastically on a year-over-year basis. the reporting earnings per share of 57 cents and revenue of $638 million. the business is still growing fantastically. or is still a lot of stock options and non-cap expense. so you take up a stock options of the depreciation of some of their acquisitions, we see the company had non-gap profits. the business is growing, growing very well, but the guidance going forth is even less than the analysts were very excited about, so the like of excitement
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has the stock down 19%. alix: scarlet, you have more for us? scarlet: that's right. cory davis the numbers on revenue and profit. $.57 matches the estimate, and the revenue is basically in line with what analysts were looking for. the theme here for some of these tech companies, i am thinking yelp for instance, expectations are so high and they start to price so richly that anything that is not a noticeable, clear beats rings disappointment and that is why you see the stock tumble in after-hours trading down 17% following the latest results. so yes, while it has, inx peck did for the first quarter, this light forecast for the full-year profit and revenue is causing the stock to tumble right now. alix? alix: and the second quarter really does include the effect
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of the lending.com deal. cory: what is amazing to me is how they write about the future of the publishing business. magazines are so thin and television revenues are down. linkedin has created a publishing business out of nowhere. that is 30% -- 30% year-over-year business. it is the fastest-growing other businesses. but their fastest growing business is their publishing business, which is $119 million in revenue for the quarter. i think we have the difference the tween the wall street expectation of growth and growth being so divergent in this quarter. alix: have you seen any strong dollar effect for linkedin? cory: not yet. i would not doubt that we would see that. they did not credit the strong
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dollar when it was to their benefit, or vice versa. currency is what currency is, but i think if you look at what is going on for the business it's growing fantastically. when you look at salesforce, you look at other companies, linkedin, facebook, apple, google. they really stand out as companies growing in making a lot of money unlike a lot of the other flavors of the month. alix: we will give you time to dig through some of these numbers. we have visa crossing. scarlet? scarlet: topping analyst estimates by a penny. $.63 versus the average analyst estimate of $.62. revenue pre-much in line with what analysts said been looking for. the $.4 billion when the consensus was for $3.34 billion. visa has reaffirmed its full-year sales forecast and offered a cash flow -- just to
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give you a look at their core business, they say the total transactions increased 11% slightly stronger than what analysts were looking for. also, headlines out of aig operating earnings per share the dollar $.22. that is higher than consensus. it is also increased its share buyback by $3.5 billion. boosting its share buyback by $3.5 billion. even as the first quarter profit increased -- particularly for a unit that sells casualty insurance to commercial clients. alix: we also have expedia. cory johnson is those numbers. cory: stop of 6% in after-hours trading. why is it up so much? strong results are. expedia -- reporting to us -- a
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little bit better than expectations. it is a lot better then. so, the analysts got this one wrong and the company generates free cash flow of $90 million. losing less money than expected, making more money in terms of revenues than expected and it looks like a pretty good quarter for expedia. alix: gross bookings also up 19% of the company. cory: pretty good quarter for expedia. alix: all right. lots more to come. do we have more? cory: let's do more. alix: with got a lot more coming on. lisa, cory, you are sticking around. guys, thanks. can linkedin's performance justify the market cap?
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we are staying on earnings after the break. ♪
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alix: more breaking news on linkedin earnings. scarlet fu has more. scarlet: linked in shares tumbling in after-hours trading. often when he percent right now because it second quarter forecast to shy of analyst estimates. that forecast disappointing, a big reason why the stock is tumbling so much. the first quarter earnings per share was pre-much in line with what analyst had been insisted -- analysts had been anticipating. one number that people look at with the social media websites are the numbers -- the number of members. they into the fourth quarter with reader 32 members. -- 332 members. i was trying to look for an
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exact number and there does not seem to be an indication. it just says that linkedin has 350 million members and offices around the world. they are choosing to deemphasize that. that would represent an increase of 5.4% from the previous quarter. i don't know if corey can speak more to that -- cory can speak more to that. that might be another reason why investors were so disappointed with this performance. alix: thank you. also, cory johnson, bloomberg west editor at large and on a phone, robert what do you make of this massive decline we're seeing in the stock and the quarter? robert: while they hit the revenues on the dot basically for q1, the buy side is a little bit higher. probably $750 million on ebitda.
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but they were way below. the midpoint, 672. on the profitability side, there is a question as well. much lower. should be about $200 in q2. the full-year was also narrow with the eps. almost three dollars, below two dollars was their guide. and the emphasis would be on revenues. alix: robert, isn't this the analysts missing the boat? cory was pointing out, look, the company is growing. they were up 30%, $638 million. there is growth. they are making a lot of money. isn't this an analyst issue? robert: you did see in the core business, you saw palette solutions, you saw international slowed dramatically. i think that will be a question mark. u.s. is ok, mid 30's.
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to your point, yes, it is more a question of what do you want to pay for it? alix: fair point. cory, you heard scarlet mention members. have you heard anything about their growth of membership? cory: i think robert is fair. if the game is beat and raised to keep these stock price flying when you stop beating and raising, then the stock keeps changing. that is the game, when you put the guide is up like this and start to lower the bar, this is what happens to the stock. maybe investors playing that momentum game does not like the stock anymore if it is not when to keep the momentum it had in the past. i think international is a big part of that right? linkedin can be so much more across the world. their recent expansion into china that has been very successful for them, the notion
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that there may be a limit to that here it i'm sure there will be a lot of focus on the conference call to try to understand what is going on, why are we seeing the slowdown in the growth of the international business? alix: robert, you have a buy rating on this stock. do you need to think that now? robert: we do every quarter anytime there is new information, new financials. after we digest the information we will be able to revisit that. alix: what is your biggest concern? robert: i think the biggest concern is what is happening on the cost line going forward. also lending.com their acquisition in these numbers as well. is the deceleration of revenue worst organically than what we -- worse organically than what we're seeing so far? alix: you mean the new businesses they are buying to grow our hurting, not helping? robert: yes. alix: cory? cory: yes spending for growth.
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everybody looks at amazon and says, if they can spend like crazy, why can't we? salesforce following the model. linkedin is another company that spins like crazy. they generated a lot of free cash flow. they were the darling of these companies, seeing double-digit growth. again, the question is, how far can they go? how big is it? how big can this thing ultimately be? alix: robert, when you look at where this company is in growth phases, it has two growth phases creating scale and then evolving that connected space. where are they in that strategy? robert: they are in the middle of being a transition where people found jobs and listed jobs to more of a professional platform and that is what the lending.com acquisition rings to the platform. there is a lot of new businesses
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and hoping to expand in this professional platform arena. alix: all right guys, thank you so much, cory johnson and robert peck. thank you for your insight. scarlet fu is that the breaking news desk with my to sancho. scarlet: the earnings are faster. as. bloomberg learning monsanto has approached's argento of germany at about a takeover. this after a year -- this a year after a bid did not take hold. monsanto discussing its interests with the company in recent weeks. and syngenta concerned about antitrust issues, some hurdles. if you come inside the terminal you see the shares of monsanto in after-hours trading.
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we drifted lower with the broader market here. i am going to zoom in for you just to show you what happens -- it moves higher in monsanto following that. they have approached syngenta about another common nation after the previous efforts fell flat. alix: the combined company would be the largest player in the world for seed and crop chemicals. a huge deal for the industry. thank you so much, scarlet fu. after the break we will take a deeper dive into the online industry and white linkedin is bullish in this growth market. plus -- remember five-time champion evander holyfield? and minutes manny pacquiao will join me from atlantic city to give me some pointers. we will be right back. ♪
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alix: linkedin just reporting earnings and a big part of their strategy is acquisition in the online space. what makes this basic potential growth market for tech companies? dennis is the ceo of another online educator. what have you noticed in the industry and your business and how it has changed? guest: yes there are a couple things we have noticed. first this whole notion of continuous learning. if you have a diploma, if you are lucky enough to have a degree, it does not mean you can stop learning. if you have been working in marketing for the last 10 years,
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think about all of the different things that have happened since then. facebook was barely born at that point. there was no twitter, no android. a lot of people understand they have to learn things constantly. that is one of the biggest changes in awareness. alix: what kind of revenue growth have you seen in the last five years? dennis: we are growing 200% year-over-year and that's faster than last year in previous years, but we have consistently grown hundreds of percent since we started. at alix: what is the exit strategy? what is your inend goal? dennis: we are focused on what we're doing and the reality is we have millions of students around the world. our courses are taught in 80 different languages. we are excited. alix: an ipo maybe?
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dennis: we are not focused on what the exit is, but rather building a big business and a come pushing our mission, which is to help anyone learn anything. alix: is that a big number when you see this quadruple here? dennis: two thirds of our students originate from outside the u.s. and it's fairly even growth across all the different markets. notwithstanding the fact -- because of the fact that most of the courses are still being taught in english, the strongest scores of the day go in non-english speaking markets india, singapore, things like that. alix: thank you so much. dennis yang, ceo of udemy. coming up next, before the fight of the century we well be speaking to none other than manny pacquiao. we will visit with him right after the break. ♪
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scarlet fu is that the desk with a look at some of the casualties as earnings rolled out. scarlet: not looking good if you are a linkedin shareholder. it is down 26% in after-hours trading. cory johnson was telling us linkedin has done this in the past, but it failed to do that. earnings matched estimates. to give you an example, revenues
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increased last year. that is the first time it has come in below 40% since going public. the outlook for this quarter also falls short of estimates and in terms of why, linkedin says you've got the strong dollar, the impact on adjustments to operations. i don't know what that means. it sounds vague. membership grew 23%. i was looking for that number. in case you were wondering. visa is also lower down 2%. profit and sales came in higher than anticipated. payment was better than what people were looking for. visa is looking for earnings to grow at the low end of the mid-teen range whereas previously it had said mid-teen range. alix: thank you so much, scarlet.
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here are the top stories we are watching. university of florida coach billy donovan has a new job with the nba. signing on with the oklahoma city thunder. he will replace scott brooks who was fired last week. shifting from the court to the gridiron two players who challenged cleveland's tqaaxax want a refund. and from the football field to the rink, boxing fans can go to theaters to see the fight between manny pacquiao and floyd mayweather. it will show the fight to two thirds of its restaurants. buffalo wild wings said it would not air the fight because of the price tag, $5,100 per location. it has been called the fight of the century. mayweather versus pacquiao.
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there is a ton of money at stake when the gloves go on saturday night. we broke down the numbers. >> floyd mayweather versus manny pacquiao was not just one of the most anticipated boxing matchups of all time, it is also the richest. the fight is projected to shatter records. it is pay per views most expensive match ever costing almost $100 to watch at home. estimates for how many will watch range from 2.5 to 4 million people. the fight will be held in las vegas which seats 16,800 people. tickets range from $1500 to $10,000. although the $10,000 seats were not sold publicly. the gay revenue for the fight will reach $72 million. for comparison, that is 3.5 times more than the current
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record. 20 million set by the alvarez-mayweather fight. fewer than 1000 tickets for the fight were sold to the public at face value. they sold out in 60 seconds. the resale market will be extremely lucrative. when you factor in other revenue streams like closed-circuit viewing, sponsorships, and merchandise, the fight will bring in at least $300 million. that would make it the most profitable boxing match ever. while it is not clear who will win, both fighters will pocket millions. if they are splitting the purse 60-40. mayweather is projected to make $180 million with pacquiao walking away with $120 million and with money like that
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everyone walks away from this fight a winner. alix: this saturday the fight of the century gets underway in las vegas. floyd mayweather, manny pacquiao, fight years in the making and will be the most lucrative night in boxing history and joining me now is evan williams and none other than that pride of the philippines, manny pacquiao. thank you for joining us. manny pacquiao:, hello, thank you. alix: how are you feeling? pacquiao: feeling good. especially for the fight. alix: what do you do to prepare yourself for what people are calling the fight of the century? pacquiao: right now i'm resting, relaxing. waiting for the fight. alix: are you nervous? pacquiao: no no. alix: we can call this a regular
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fight. but this has been six years in the making. this is not just like any other fight. pacquiao: yeah, six years in the making. finally it is happening. i'm excited. alix: evan give us some perspective on why it took so long. evan: it has been six years of conversations on and off. talked about, drug testing revenue and finally we are here. it is a bigger fight financially. with the u.s. economy in a better place than it was with social media and the height fans have given it. it is more profitable. alix: hey manny, is this going to be your last fight? pacquiao: i don't know yet.
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we will see. after the fight. eben: you obviously know the amount of money we are talking. floyd has been very vocal about wanting to make nine figures in a boxing match. looks like you will do that. is that something you have thought about? has money been a goal for you? pacquiao: the money is part of the event, but my focus is how i can win the fight and perform to the people and how i can make them happy and bring honor in the country, the philippines. i believe that millions are looking for the victory. the money is the second part. alix: we are still dealing with
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some pretty big price tags. how come it was not 50-the and what do you say to those who say 40-16 means mayweather is the more important player? pacquiao: [inaudible] for the sake of the fans i said yes to everything he wanted. alix: it is crazy loud. what is going on behind you? i can barely hear you. pacquiao: yeah it is noisy. they are fixing the ring for the fight. eben: manny, i know it is not a
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decision you make, but a lot of people said the $90 price tag is a betrayal of the blue-collar roots of the sport. are there any concerns when you look at the $100 pay per view tag, you're creating an event that may be too expensive for your standard boxing fan? pacquiao: it is kind of expensive, but that is why we are training hard, working hard so that people enjoy it. that is what we want to do. to make them happy. alix: can you do me a favor and hold up your hands for me? pacquiao: me? alix: yeah. i noticed there was a bump on your left hand. are you feeling ok? any injuries?
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pacquiao: no. the doctor said it is like water. it does not hurt. this is a long time ago. alix: can you give me your best air punch? show me how it is done? punch the camera for me. pacquiao: like this? alix: all right. there we go. thanks so much. good luck this weekend. looking forward to it. manny pacquiao, good luck to you. pacquiao: thank you guys. alix: coming up, the nfl draft returns to chicago. what does it take for a player to hear his name called? ♪
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alix: tonight the nfl draft kicks off in chicago. who will be the first selected? regardless not all touchdown and praise for drafted players. joining me to discuss the pitfalls for rookie pro athletes is eben and on the phone andy. thanks for being here. what happens if you are not drafted on a day like today? andy: it is a cautionary tale you did the piece on the pacquiao fight and look at those hundreds of millions of dollars and football players are fighting for their life every day to make a. the fight of the century, for
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those of us who have been around for two centuries, in terms of the nfl, this is an incredible day. 256 players. and others have to try to make it as a free agent. it shows how hard it is to make a living as an nfl player. eben: to keep the boxing analogy going football who you are off the field has a larger ramification on your earning potential than a dozen boxing. it seems as though every draft we seem to be talking about what the players are alike off the field. is that the new era of draft evaluation where it might be equally important? andy: everyone can agree last year was not a pr win for the nfl. the off field the quality and depth of these players has been sliced and diced analyzed over
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the last few days and it is still working for teams to make sure they don't make the kind of bust like the raiders a few years ago for $60 million. alix: how do you prep players for the draft, and how has that changed in your decades of experience? andy: i call it the slider-ization of the nfl. you think about the combine, the schedule announcement, the draft as we have today. the preseason, season, the super bowl, think about the lost productivity of people that play fantasy football and what may get lost over the seven rounds of the draft. if you are an agent or a player you have to be able to handle what you can as a football
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player. your personality and marketability and who you are is more important today than it ever was. especially with social media. alix: great insight. thank you so much, guys. my right hand man for the half-hour and andy dolich thanks for joining us. reports indicate apple's watch has flaws that could impact sales. how will apple responds to the issue? ♪
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alix: apple is facing a new issue as a component of its watch was found to be defective and today shares were down nearly 2%. what could a flawed rollout mean for the future of apple? joining me to discuss is tim hagan.
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what does this mean over the rollout of the watch for apple? tim: it explains why if you ordered a watch why it did not show up last friday when watches were to be delivered. alix: what does that mean going forward? we have seen the supply and demand than amick -- dynamic. tim: they are estimating 20% of the customers who order they watch received it. the rest are going to receive it by june. when i was talking to the cfo of apple, he told me they are rushing to get more watches our tent he hopes to have the supply-demand balance by the end of june. at a point in time when apple hopes to sell them in other countries. alix: what was the main issue? tim: the tactic in gin, when you
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have the watch, some of the ways they communicate with you through notifications or directions, it will buzz a little bit. it will buzz in different ways. that is what the taptic engine is. they found an issue with that. they went to a supplier that was not having a problem. alix: are we going to see a recall? tim: there is no indication customers received these faulty parts. it gets to the explanation of part of the slow rollout. the bigger issue is apple is out with their first and new product in five years since the ipad and there is a lot of attention on how successful they can be. alix: tim, thank you so much. tesla ceo elon musk unveiling new products tonight. he called the missing piece.
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details next. ♪
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ling more than 20%. the networking site cutting its earnings and revenue forecast. first courting earnings were in line with us mitts and beat revenue. visa beat estimates but spending increased even as consumers spend less at the pump. lenovo is looking to double its market share in north america. the centerpiece of its planes, a new tablet at walmart. the company did not specify pricing, said it would be cheaper than the apple ipad.
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tesla is getting ready to unveil a new product tonight and it is not a car. elon musk has referred to it as the missing piece. a battery that could be used to power homes, businesses, utilities. joining me now is jamie butters joining us from detroit. this is being billed as a very large utility scale battery. what does that mean? jamie: i guess we will find out tonight. it is the same idea as in a home you might want to have a backup battery so you can charge it with solar power or even cheap energy overnight when the rates go down so then you have it to use when the demand is high. so the thinking is a utility could do a similar thing with a relay station where they would juice up a really big battery
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overnight when not as many people are on the grid and they can sock away some of that energy, a substantial amount so they actually have more energy they can push out through the grid especially industrial customers. all kinds of people are running air-conditioners in southern california. alix: it sounds like an awesome idea. what cost would be associated with this? the batteries are so expensive. jamie: right, usually more expensive than burning gasoline or coal. what we have seen some analysis, everybody is just guessing. some are projecting that this cost could be less than the peak cost for electricity. probably not as low as the most efficiently produced, but better than the peak.
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you think back a few years there would be brownouts through california. we had a multi-day blackout in detroit last decade and may be having these kind of systems on a home level or a system-level can really prevent that problem. alix: how do we expect elon musk to do this, going to consumers or another company like with solar city? jamie: it will be interesting. tonight, he is going to present this to utility executive types and media folks and other tesla loyalists. if they are dealing with utilities, they've got to figure out how to do business with them. that is a different customer base than the model s, for instance. and like you said, for the home business, the home battery and the utility battery, for the home customers, they have used
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solar city. they may sick with them or the tesla brand. alix: we've got to leave it there. tesla, that wraps it up for "street smart." ♪
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al: i'm al hunt. mark: with all respect to bernie sanders, if you do not have a campaign theme song, may we suggest "the master mash -- the monster mash"? ♪ he did the mash wawoo. mark: on the show, hillary clinton and john cleese. first, bernie sanders. walk outside your office, say you only have a few minutes and speak your mind. here is bernie being bernie.

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