tv Squawk on the Street CNBC April 30, 2014 9:00am-12:01pm EDT
tell everybody coming up at 10:00 today, "squawk on the street" ebay ceo john donahoe will join the crew immelt and costo costolo. >> and sir mix a lot. >> right now time for "squawk on the street." ♪ >> two major players at the center of things this morning's biggest stories and we've got them. good morning and welcome to "squawk on the street." i'm david faber, that's jim cramer, we are live from the new york stock exchange. carl quintanilla, wondering where he is, he's in san francisco and he's going to be interviewing twitter's ceo dick costolo in a few moments. a live interview with ge's chairman and ceo jeffrey immelt on his company's $17 billion -- actually $13.5 billion and they
get cash too. it's a big deal for the energy business and we have a very big morning on tap, carl. >> it will be just as the sun comes up. >> yeah, guys we're coming to you from a conference room called aviary at twitter headquarters. dick costolo is with me. in a moment we'll talk about the quarter, talk about everything that happened in the course of that quarter and, of course, stock poised to open lower today as people are focusing on -- on that user growth. we'll get to it with dick in just a minute. >> yes. in fact, an important interview. twitter reporting better than expected first-quarter results. revenue more than doubled but as carl referenced stock down sharply after user growth short of wall street forecasts. jim, we're going to hear from the man himself and entertain many of the key questions investors have this morning. in speaking to a couple shareholders or former shareholders user growth continues to be at the center of concern. we've been mentioning since the company went public which wasn't that long ago. >> right. >> with dick costolo when he was
on set that day when it went public behind us, but there is -- people want to know, what was the growth rate in users in terms of during the quarter, february to march, trying to understand that and model it to figure out their discounted cash flow models. the engagement numbers some say when you look at old users versus few users the same that's a positive. where do you come down? >> okay. there are people who are arguing this morning that the peak of the rate of growth, not the growth, because the growth is still up, the peak of the rate of growth may have occurred right before the underwriting. what's funny is or ironic i should say, no one is laughing this morning, this is similar to the facebook quarter when facebook didn't get it right. i happen to be a big fan of facebook, they went back to the drawing board, but this is a carbon copy except the deal was done better. >> although this is still the highest multiple stock out there.
>> right. >> in the internet arena. >> and i can tell you, carl's out there, but one of the most disturbing -- three disturbing points in this conference call. one was we talked about seasonality. when right out of the shoot i don't want to hear about seasonality, the second eventually. i see no clear path for that at all. it's geared towards events and aren't enough events to create a lot of twitter -- a lot of tweeting this quarter. i didn't know it was an oscar super bowl play. i learned that. and then finally the timelines, views versus monthly over month -- monthly average users, david this is the first time since the dotcom period that i've had to learn new metrics that i'm supposed to value companies by. well, i brought a dotcom public and i tried to explain to people why eyeballs mattered. >> didn't really work? >> the stock went from 63 to $1. this isn't going to do that. they have lots of cash from the underwriting. >> and they also have lots of users. they have significant revenue
growth. >> but they haven't even -- they said look, advertising, we're not going -- remember there's a line in the conference call about how advertising we don't want to mess the site up. zuckerberg has found a way people like the ads. now this is a company that i think has much untapped value. because if they get the site looking right and if they get people who don't tweet but make it their news service, but they didn't even talk about that, i would like them to get a do over. they need to do-over this conference call. not unlike what sandberg got to facebook. >> maybe that can happen right now. of course -- >> you need a do-over. better company than the call. >> carl joining us from san francisco. the lockup a concern for some people. >> mentioned by jordan rohan. >> given that. let's let carl take it away and see if we can answer some of those questions. carl? >> guys, thanks very much. good curtain razor on the quarter and twitter ceo dick costolo joins us at twitter headquarters. >> thanks for being here. >> a lot of things went right with the quarter. revenue adjusted ebitda, the guidance for the year, but
people are zeroed in on user growth and they want some wow. >> yeah. >> how do you sum up how user growth was in the quarter? >> yeah. well, you know, date we opened, the day of our ipo, i was on your show, or your program, as my grandmother would have called it, and i said to you and jim, we have a lot of work to do. and we knew what that work was at the time and we set out a very clear plan for growth and how we wanted to attack growth. we talked about engaging new users more quickly, bridging the gap between awareness of twitter and engagement on twitter, et cetera. and we laid out a path and it started down that path and i'm happy with the work we've done and how that work has translated into growth in the first quarter. few things, one, the kinds of simplifying of the new user sign-up process to be much more mobile phone based and connecting to people you already know who are on the platform. that's worked well for growth.
that's been a driver of growth. two, the recommendations we send you when we see activity happening on the platform that we think might be relevant to you. that's worked very well for growth. and then three, in the very early stages of starting to make sure we organized content for new users, started to work well. so as we continue to tie those threads together over the course of a year, and better organized content for new users when they jump into the platform so they get engaged right away, increase the value of each view that we show to make sure people are engaging with the views more, favorites and retweets were up again 26% in the first quarter, so making sure we get the engagement rpms and engagement engine going so every time someone views twitter they're more engaged with it, those things are working nicely. we have threads for each of those throughout the year and i think that it will be a combination of those changes that we make over the course of a year that will really result in a change in the curve. >> you see it as not a
multimonth story a multiquarter story but when people look at timeline views per monthly average user down 8% year over year, you don't think people are beginning to find some alternatives some place else? >> no. in fact, engagement is well up on the platform. in fact, so timeline views per mau for our net new users were just as strong as our existing users in the previous quarter. that tells us that every net new user signing up is as engaged as our existing user. the reason you're seeing the year over year decline, we made a bunch of changes in the second half of last year to make sure that each timeline view, timeline view is just when you come to twitter, a list of tweets you see. we wanted to make each timeline view more engaging. we collapsed a bunch of things that were across multiple timeline views into a single view to make that single view more engaging. and timeline views multiplied by the engagements per timeline
view are way up. so i'm really happy with engagement. i don't see any issue there. >> the quarter had the super bowl. it had the oscars. and the incredible marketing power of ellen selfie which i think we'll get a look at. you had the olympics and ncaa. should you think the quarter should have shown more power because of those high profile, high television, highly tweetble events? >> the beauty of twitter is that every day in countries around the world, twitter is front and center and almost ubiquitous, everywhere in front of people every day. it doesn't take some special event to draw people into twitter. yesterday, during adam silver's press conference, there were tweets on air under his press conference from players and other athletes and commentators about the punishment that was meated out and millions of tweets about that event while it
was happening. so it's not -- it doesn't -- we don't need moments to drive people into twitter. they see twitter and come to us every day. so the platform is already mainstream. we have people around the world -- 3.3 billion views of the tweets about the oscars, 3.3 billion of tweets just about the oscars, in the 48 hours after the oscars. if you compare that number because it's a big number, to some of the youtube content networks with thousands of video channels, those content networks will get 3.3 billion views in a month. we had that in 48 hours. the platform is already mainstream. it's just showing people the increased value that they receive when they log into the platform and create their own timeline. >> we've had this discussion before about whether or not there's something about twitter that is archaic -- intimidating and alienating and you're telling me somehow mainstream is going to discover that it's
easier to use in the coming year? >> well, they're already consuming it all over the place on tv, in print, on websites and mobile sites around the world. they're seeing tweets every day and consuming them. what we want to do is improve that logged in experience for them and make that easier for them to engage with. >> right. >> by bringing the content forward and pushing the scaff d scaffolding of twitter to the background. >> the lockup expiration, everybody is talking about that. you filed the ak that says you have no plan to sell your shares, jack dorsey, ed williams, who else is on board with that pact? >> benchmark announced one of our early investors announced they have no plans to sell and frankly after speaking with most of our major investors that were with the company since prior to the ipo, many of those investors have declared that they have no intention to sell. so we feel great about that. it's frankly one of the reasons, probably the primary reason, we have decided and announced we
wouldn't -- we have no current plans to have a secondary offering. you've seen most of the other companies in our space have those fairly quickly on the heels of the ipo. we have had no plans to do that because most of our major shareholders have no desire for immediate lickety. >> is there a timeline on the promise, the selling of the shares or the secondary? >> there's no current plans. i would say vis-a-vis the timeline of selling specifically, when i do, when jack does, those will be in a accordance with a 10 b 51 plan and even under filing that there's another 90 days of a cooling off period before we would sell. >> on top of all this and the quarter, alan wert zell the head of research at nbc, our shop, this week in the "financial times." >> your own people. i invite you into my home -- >> argues that social media in general, not just twitter, is not game changer and his general take is, if i'm social media, of
course i'm going to promise you a tool that boosts ratings but so far the numbers don't show that. don't webear that out. what's your response? >> i have a different perspective. >> i kind of it snooshs here's -- look, when we developed our twitter and tv strategy it was because of a wealth of data that we had that showed us that there was a complimentary two-way relationship, not just that twitter made tv better and twitter drove tune in and agated attention to what was happening on tv but also that television drove engagement on twitter. again we saw that just yesterday in the adam silver announcement. a wealth of data that showed us that. as we took our twitter and tv strategy to market there has been an ever-growing wealth of third-party research from fox research, from nielsen and others that show causal relationship between twitter and tune in to tv.
in fact, the nielsen research showed specifically that there were three things that drove tv ratings, programs ratings, those were last year's ratings, ad spent for promoting that program and twitterp. >> so he's wrong? >> i would say that we feel very good about the strategy since the third-party data backs it up and nbc is a great partner of ours and continues to work even more driving even more unique content into our platform and twitter reinforcing that content back to nbc. >> the focus on the twitter element -- on the tv element and the user growth element, i think has drawn attention away from mo pub. how do you make that easy for people to understand? >> mo pub is our mobile ad exchange. i'll make it this simle. if you're an advertiser and you come to twitter we can get your ad in front of 1 billion mobile smartphone users 1 billion across ios and android. in q2 as we integrate that mobile ad exchange with our own
twitter inventory, if you're an advertiser and you come to twitter, we can get your ad in front of over 1.25 billion people using mobile phones. it's that simple. >> do you feel the need to buy anything big? are people pressuring you? >> people talk about it because there's been activity in this space. we're focused on strengthening our core product, twitter and vine i don't feel any particular compunction to go out and do something differences just because other people are doing that. we have a very clear focus on strengthening our core and focusing on three specific things, growth, operating leverage and operating efficiency and as we strengthen our core and service to growing our core products we'll be fine. >> are valuations right now, i'm thinking what's app are they taking your breath away? they're significant. how's that? >> that's to the point. >> yeah. >> but does it make you feel
things you would want to buy are otherwise out of reach? >> i don't think so. we look at the landscape and have a consider aate approach t m&a, the services we want to do with strengthening our core like the acquisition. >> we're in a period of growth names are under pressure now to show promise of things other than revenue growth. >> yeah. >> other than cash flow. do you feel pressure to start putting some -- demonstrating some tree eps power in the traditional sense? >> i mentioned specifically i'm focused on three things, growth, operating efficiency and operatioperate ing leverage. that second and third are in service to steadily improving margins. steadily improving margins. so as a high growth company what i want to make sure we're doing is not starving the growth engine while constantly focusing internally on getting better and better at operating efficiency and operating leverage in service to margins. >> we did solicit questions on
twitter, #asktwtr. >> good. >> i'll skip the first. the second one is -- >> you can ask me the first one. >> no. is dick friends with zuckerberg on facebook? >> i'm not friend with zuckerberg on facebook but i am friends with mark. i think mark is -- mark is just super insightful about thinking about the market and the industry and platforms in a different way that be other people do. he kind of looks at it from a different angle than other people do. i think that's -- i always find those conversations insightful. >> could you ever see any strategic partnership with cash rich companies such as apple, google and microsoft. >> we have them. we're embedded in ios with apple. our partnerships with google and microsoft are growing so we already have those and those continue to grow. >> and finally, will punk ways ever be able to be a part of the hashtag? >>. >> like the apostrophe if you will. >> yes. >> i put apostrophes in my own
hashtags and back space over them. i don't think that's coming soon but something i do myself. >> you got a lot going on. we appreciate you having us in the house. >> thanks for coming. >> shedding light on the quarter. dick costolo, the ceo of twitter. jim and david, back to you guys. >> thanks. great interview. thanks very much, carl. >> better than the conference call, carl. this cleared up a lot of -- i'm not saying go buy it. i am saying this was better than the conference call. it was the do-over i wanted to hear. it made me feel the last question that carl asked the most important question, never asked in the conference call, are you driving toward postibility given the fact there's been a giant sell-off in the companies that really aren't and he said yes, two of the three metrics are. this call made me more confident -- >> this interview, not the call. >> the call itself was a difficult one. >> the call was difficult. i went over it a couple times and i like twitter. i use twitter. so obviously i was in the camp of -- and dick costolo impress mess as a very good man.
i wanted to hear about other modernization ways, hear a little bit more about the idea they want to be profitable and carl's interview gave us that. does it make me want to sell the stock anymore? goes back initially to the underwriting price. but there are a lot of people -- >> goes back where are we 26? >> 26. >> but it was a reassuring interview for those who think twitter has lost its way. >> you still think it's going to go down another 11 points. >> facebook is going to -- is selling -- >> percentage wise that's a lot. >> facebook is selling at i could argue 22 times 2016 earnings. >> yeah. >> this is selling at 100 times monthly average users over a timeline divided by paid views multiplied by uniques talking about how many people tweet and the oscars. >> got it. i'm going to watch that metric show. i am going to keep a close eye. >> until the oscar comes back, i'm worried about the growth. world cup. >> don't forget the grammies. >> they said the world cup will
not generate -- >> why not? >> i don't know. >> why not. >> adam silver saved the day for the next quarter. >> don't want to become like cnn where you need an event to get anybody to watch. >> this is a company that's driven by programming of others and the -- i've known alan wert zell since -- i'm really old no offense, that makes you old too -- since 1996. his numbers -- he never says -- he only speaks when he has the data. that was called the emperor no close conference call question and they come back with fox says they like it. i don't know. i always know who i play for. but i know alan when we worked at abc together, there was no reason for alan wert zell to say anything other than the fact that here's the facts. >> we talked twitter for a long time here. we've got so many other things to talk about whether it's ebay or ge. >> we'll tweet those things and be on air with the twitter. >> i mentioned both those companies because we're going to be talking to their ceos coming up on "squawk on the street." that is right.
of course, general electric ceo jeff immelt live from france, talk about the company's bid for an energy unit and an exclusive with ebay's ceo john donahoe, they're paying $33 billion -- $3 billion to bring back nine. getting six, bringing cash back from overseas. we have to talk about this. >> why didn't he in dublin for heaven's sakes. >> futures, down open. more "squawk on the street" right here from post nine when we come back. aflac.
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♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. you're watching cnbc's "squawk on the street" live from the financial capital of the world. the opening bell is set to ring in about 6:30 minutes. we're going to kind of -- everything will be a mad dash. >> yeah. >> you and me, carl is in san francisco, so let's dash ahead for the next six minutes and start with ebay. >> the numbers were okay. >> really? >> they were okay. >> they're okay. >> okay being tepid. >> not great, not terrible. >> right. >> but what i've been focused on this morning and what a lot of other investors are is they're
paying $3 billion, they're taking a discreet tax charge of $3 billion, jim, to bring back $9 billion in cash that they have overseas. >> why didn't they do an apple bond deal? >> thank you. great question. i don't have the answer. perhaps johnc donahoe will furnish that answer. >> the treasury was the winner and the shareholders the losers. >> why not take on debt if you want to repatriate this cash. >> at this level of interest rate goldman would have done that deal. >> it's very odd and raises questions as in what are they doing with the money. some might say listen, $9 billion doing nothing is better than -- is not as good as $6 billion they will use in some way. >> did carl icahn want that? >> by the way, in the midst of every other company doing tax inversions, apple not using $150 billion in cash they have, instead doing bond deals did you see the pricing of that bond deal? >> if i were the treasury secretary i would say you get me the united states apple on the
phone. i want to know how to do a deal like that. >> that was incredible. >> 30 year paper from apple. >> we have russian railroad bonds coming due soon from the czar. >> wow. >> are those paying off? >> i don't know. i don't know. the israeli bonds you got for certain holidays paid off. maybe the russian bonds pay off. >> should have got u.s. savings bonds. so that's ebay. we'll obviously -- >> it's not ebay. there's the big three in ebay. >> give it to me. >> if you go to sporting event theirs' cutting the price for stub hub because of competitive reasons. i hate competition if i'm a shareholder. ebay is being competitive and i'm coming to you with a question that was not asked on the conference call but we're going to answer it now like carl did with dick, where is amazon figure in for web services? is ebay cutting prices to be able to combat amazon?
because it wasn't clear from their -- their business -- >> i don't know. >> right. >> i think it's hidden in the call. >> amazon web services are cutting prices every week it seems. >> right. >> which is great if you're running on web services or cloud. >> i was surprised gross margins. paypal did hold up okay. >> 19% top line is not bad. >> john will be on the show and a stand-up guy and paypal i like. i was very surprised about the need to spend. it's pretty obvious that -- auction value, decline of 9%, david, in the united states, they used a term i never want to hear on a conference call ever, competitive dynamics. david, they're competing. we like monopolies, like utilities that buy each other this morning. we like exleen buying helpco. >> we do have a fairly large deal in that part of the world. i'm looking for the press release. probably not going to find it jim.
>> i have it memorized don't worry. >> you have it memorized. >> they are -- the combination here, between pepsico holdings as you said and excel lon acquiring pepsico, is acquiring the -- pepco at this point. rate base of $26 billion all cash consideration, 2725, which is representing a 24% premium to pepco holdings price on the 25th. >> the beginning of a new wave. >> they're doing value. i don't know. we see continued consolidation in the energy sector. >> pepco is joining the old baltimore gas and electric. they fill in delmarva peninsula, fill in virginia. it's a really good acquisition. they can cut costs. not a fan of excel lon's management but this does make strategic sense. excel lon one of the few you don't have to woiry about, the supreme court ruling the death
of coal in "the new york times," the epa will never allow -- mark my words, another coal plant built in the united states, never, ever. >> in light of the fact that we just got q1 gdp that grew 1.1% annualized. >> making france look very good. >> let me add one positive note here, which is, for example, excel lon is going to borrow $7 billion to do this deal. >> right. >> ebay for whatever reason is at least doing something with its cash, bringing it home, we were's not sure why. -- we're not quite sure why. we have more activity. we seem to have more of a willingness of corporations, i would argue, recently with some of the transactionionses we're look at, to do something other than buy back stock. >> astrazeneca i think is going to happen. i think someone's going to come in and buy that. the allergan. there's companies that are saying there are values here. >> pfizer will be the one that buys astrazeneca if anybody does. >> i'm saying these deals,
energizer, there are so many ways to make money here that those who are simply thinking when fireeye bounces i'm going to do great, i want you to refocus yourself. if you're really in software as a disservice to your portfolio stocks, called s.a.d. no longer called s.a.s., rethink go into oldline technology or company like energizer we have minus 6% organic growth, we're going to split the company in two, we're going to make shic corporation which does well, energizer bunny to do quite well and the next thing you know like merck splitting up and selling consumer products business, they're going to get a fortune on their consumer products business two years use -- >> you know what they're doing. they're shrinking to grow. >> shrinking to grow. energizer we'll keep an eye. >> they're shrinking to grow. audience loves that. >> as they should. >> and we haven't talked ge at all. >> what the heck is that about? >> we haven't talked ge. $13.5 billion.
siemens may be in there at some point trying to do its due diligence. we're not sure where france's government comes down. they did the deal. they've at least agreed in principle although we'll. >> alstom, say you are a major power plant company, utility in this country, an you get that epa rule wag you're doing right now is calling alstom and saying i want to be retrofitted, they are the retrofitted company, they own 25% of the retrofit business by my calculation done by alstom. ge is a winner in this deal if they get it. >> because of the epa and alstom has carbon coal. i don't think the technology is a bargain. the recapture, but i have to tell you, there is no doubt in my mind if you think the world is getting tough on coal you better call alstom. it's like calling sal. >> we should keep an eye on the coal stocks. you heard the opening bells. we are starting trading on wednesday. 37 seconds in. you can see the real-time exchange at hq.
more red than green. here at the big board that was arc la gistics, ringing the bell. at the nasdaq, vanguard natural resources developer of oil and natural gas properties. a look at what i have in front of me -- >> david, can we talk weather for a second? >> always. >> everyone is talking weather. great company talking weather. i had eaton last night talking weather. but, lumber liquidators, i mentioned this because you and i both know those growth stocks, talking easter not good. easter shift. easter shift and weather. so how bad is it? express grips is talking weather. i always find it somewhat -- how about raising eyebrows, raise eyebrows here because isn't that -- >> they don't go to get your -- >> do not get your -- do not fill your prescriptions during the winter? it's really cold out i'm going to skip that prescription an not take avapro, lay low from the statins? no. >> you're not buying the
weather? >> no. i'm not buying the weather as. n i'm not buying the fact that obama care sign-ups weren't so great. time for feet to the fire. don't blame weather if you're a prescription company. >> right. >> that's the one -- rain, snow, sleet, prescriptions. all right. there. made my peace on that issue. >> twitter as we knew is down sharply. not quite 12%. again, i come back to this comment you made, jim, even though you sound positive. >> i'm nice. >> down further from here. >> i didn't use a price target like callan did. i'm still more bullish. look, i didn't like the call. if you want me to detail, look, seasonality, they just came public! >> put the interview with carl add that in there an mix it all around. >> the problem is that call is a little more -- i mean carl's interview may be more defining, frankly. i don't like the fact that they
are not talking about a personalized news service. i mean i would like to do the call with dick, go back over and say listen, we are now starting it to think about people who don't need to tweet who use us as a news feed. younger generation like they went facebook to stain gram, going twitter to redit. redd-e-d-d-i-t this is where yoo to talk about trending. 18, 19, 2021-year-olds. they look at twitter see what's trending or go to reddit. reddit is better than twitter. >> twitter should buy reddit. >> with the money from the deal. >> maybe ebay will beat them too it. that's a joke. >> i didn't like jordan rohan's questions talking about the idea of how many total shares canning locked up. look, on the conference call, said it is a meaningful portion of the supply that could come to
the market. i didn't want to hear that. that was bad. that was bad. >> i want to do a re-set in terms of some of the news. i did mention that first quarter gdp number, 0.1% annualized, well below expectations which had been 1.2%. nominal gdp up, the estimate had been 2.8%. >> the driver is -- the driver of wherever there is growth in this country is oil and gas. more growth in oil and gas than there is na any -- than in any of these softwares or service companies in terms of earnings. unbelievable -- hess was an unbelieve quarter. phillips 66. trinity, maybe the best growth of all, railcars. >> okay. >> phillips 66, ordered 2,000 railcars to move oil and natural gas. >> they will not be moving a lot of coal. you referenced it earlier. that supreme court decision. we haven't taken a look at the stocks in question. what should we be focused on when you say coal is dead.
>> alstom. that's how you get -- you call them up, if you're american electric power, a great company, say look we have to retrofit quickly or the epa will shut down our plants. this is by fiat, government by fiat. epa, this ruling -- they were studying this rule when i was in law school. this is about acid rain. remember that concept. >> i do. >> and e pa won and the epa will call every utility in the country and say shut it down. shut down those coal plants. >> haven't talked time warner, earnings out, this morning. 20 million shares bought back. there's a theme for you, of course, that we've talked so often about. spending 1.3 billion. spin of time will take place in the current quarter, "time" the magazine, print division, includes a lot of internet properties as well. you know what i'm talking about. which will leave basically a movie studio and cable network including, of course, hbo which had a good quarter, turner
ratings perhaps not as strong as people hoped for at time warner. >> that's right. because i was saying good quarter. you're right. the stock is down. >> you see the stock down 1.5%. we've been talking a bit about the large deal in which alstom has accepted at least ge's offer of $13.5 billion. that for its energy assets. mary thompson joins us at post nine and going to bring on a special guest. >> a special guest indeed, david. jim, nice to be with you this morning. we have the pleasure i guess of being joined by general electric ceo and chairman jeff immelt who joins us from paris to talk about this deal $13.5 billion for alstom's power assets. thanks for joining us. i know you've had a busy day already. >> hey, mary, how are you? >> i'm well. >> great. >> tell us what this means for ge? >> look, mary, i think it's an acquisition that's very consistent with our execution skills, our ability to drive
synergies. it's in a market we understand. i think it's got relatively low execution risk for investors. it's going to increase our earnings growth rate and it's going to increase the industrial mix up to 75% of our earnings by 2016. i think it really accomplishes most of what we've laid out as strategic opportunities for the company going forward. >> what's plan b if it's not approved? >> look, mary, we -- the underlying growth of the company has been fantastic. we're quite confident in the strength of our industrial businesses in '14 and going forward, but we're confident in our deal. we've done a lot of deals in europe over time and we're pretty experienced in this kind of stuff, so i think we got a good offer and i think it will be executed. >> done about 50 deals in europe during the time you've been ceo and you emphasized that on the call. do you anticipate you might have to make any further concessions on this? there were reports that you might have to add a french
director to your board and there are concerns about the nuclear assets of alstom as well? >> look, mary, i would say we've been doing a ton of business in france for a long time. it's a country we know pretty well. so a lot of what we have talked about we've envisioned and how we think about synergies and what we've committed to do. i think france will be headquarters for some of the divisions of our power business. we already have a big operation in bellford which will grow. this is one that we acquired in 1999 and it's quite competitive on a global basis. in many ways we're adding. >> the focus has been on the fact you're acquiring the assets of a french company but in essence this is a bet on the emerging markets too, isn't it? >> you know, mary, so like many companies that are in this space, the footprint is largely outside of europe and in the emerging markets. so if you think about ge, we
have about a $45 billion footprint in the emerging markets. alstom will add another $13 billion to that. ge will be close to $60 million in the growth markets around the world. that's a presence that no other industrial company in the world has, so we think we can do a lot with that as you look at the company going forward. so, you know, i would just emphasize again, mary a lot has been written in the press this week, but we're kind of experienced players in this space and we generate a ton of investor value by acquiring european asset at the right time and transforming them into globally competitive industrial enterprises. >> jeff, jim cramer, good to see you, sir. >> hey, jim. good to see you. >> okay. when i look at alstom's website and when i talk with the utility companies which i have often on "mad money," it's very clear that coal is in danger, you need to retrofit. when you want to retrofit you call alstom. if you once to avoid what the supreme court said last night, which is that epa now has the
rules to be able to make it so that we're not going to do coal, we're going to do natural gas, that's ge and alstom, is the world not going in alstom's direction when it comes to the kinds of plants and retrofitting they do? >> so jim, what i would say is that first and foremost, this adds 35% to our installed base. we know how to do these retrofits on both coal and gas plants. we think this is the foundation on which investors economically are going to be able to really cash in on this deal. and we see great opportunity for coal retrofits, particularly in the developed world. and then in the emerging world, places like china, india, africa, places like that, there's still going to be super critical coal plants built. still probably for the next decade the most dominant technology around the world will be coal. it's just not going to be in the u.s. and europe. so we see a big service play here and we see, again, a good
growth opportunity in the emerging markets as well. >> jeff, david faber. you said -- >> hey, david. >> nice to see you. you've referenced, of course, with this deal if it, in fact, does go through, a larger percentage of your revenues and the business essentially is focused on the industrial economy. what about financial services which continues to get smaller? is there a point at which you will simply think about jettisoning that business or is it sort of at the size that you would like in ge capital? >> look, the way i would like at it, david, the businesses we're in like aircraft leasing, mid-market lending and leasing, these are good ge businesses where we have competitive advantage versus banks. to me, it's really about can we generate good returns for investors and do we have competitive advantages versus banks. but make no mistake, david, i would like the company to be 5% industrial, 25% financial and i
think at the end of the day that's what our investors want to see as well. so more industrial and then financial services, we're going to be in the businesses where we think we can generate good returns and have a clear competitive advantage versus banks. >> and when you look back at some of the deals you've done, i'm thinking in health care, for example, amor sham and the like some have said you may have overpaid in the past. a, do you agree with that, and b, what lessons have been learned perhaps as ceo and the deals you've done that you're applying in terms of the current potential deal? >> look, i think, david, deals, you know, no matter how long i do this and how many deals i do, i always learn something every time i do it. i think as you think about buying businesses for technology that positions for the future like am mer sham did, we feel good about the core technology. if you look at a deal like alstom, you've got a ton of cost synergies that are right in our
wheelhouse. all these things are about taking risks, but i think increasingly and as we learned over time, take the risk in places you can control. focus on cost synergies first. pay a good multiple and generate and execute and you don't get them all right, but over time, i think we've gotten more right than wrong and that's how we can continue to transform the company. i heard jim talking about oil and gas. i mean we stand here today with a $20 billion oil and gas business. it's one of the best in the world. it's in all the right niches. we did single point acquisitions to build that business as well as organic growth and that business in 2000 with was a billion dollars. we've done a combination of acquisitions in organic and we like that. you know, so i think when you look at that, i think we get them more right than wrong. >> jeff, as david pointed out this goal will get you to a
place where it's 75% of your earnings will come from the industrial sector and that has been a long-term goal of yours. once this deal is completed do you think that basically opens the door for your own exit and new leadership to take over at ge? there are been reports out there about -- >> no. >> what your future might be. not that we want to see you go, jeff. >> what i would say, i found that to be an interesting article until i read some of the other names and then i knew it had to be b.s. in there as well. look, what i would say, i bring incredible passion and heat to the job. i completely love the company and what i do. i have incredible energy for it. you know, i read jim's transcript the day that article came out and what i would say, jim, i agree with you 100%. i've always done this job like i had a one-day contract. i've always done the job like i
got to produce and deliver every day. and i have tremendous excitement and passion for that today and that's the way it should be and that's the way ge is and that's where we're focused. i love how the company's positioned and i love our future. >> jeff, it's david, to be clear then, that article, these were your words, was b.s.? >> listen, i -- david, here's what i would say, i think i've got a fantastic company, i love the way we're positioned and there will be a right day for a transition of ge but that's not today. >> all right. jeff, we want to thank you so much for joining us today from paris. >> thanks, mary. >> we've been speaking with jeff immelt the ceo of general electric. >> he did it. look, synergies -- >> there's a delay. >> that was great. we have to get to rick santelli, breaking news on midwest manufacturing. rick? >> april release of chicago purchasing managers survey, 63. we were expecting 57.
57.5. 63 is a solid number. it's the best number since october's read of 66.6. so maybe april is being used as an excuse regarding weather to the 0.1 gdp. the midwest where it was hit hard, augers a different tale at least based on this number. david, back to you. >> all right. thank you very much, rick santelli. well coming up the ceo parade continues. we'll have an exclusive with ebay's ceo john donahoe talk about his company's outlook which disappointed the street a little bit. the stock is down 5% and also talk about that decision to repatriate a lot of cash. ahead later ceo of cbs leslie moon ves we'll talk about a lot of different things. wonder what he thinks of twitter and the aero decision a few months away. "squawk on the street" is coming right back. right back.
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we've been talking about natural gas. if you've joined the show regularly you know we talk about it an awful lot the export, a key for shahnear, building this enormous facility. you got to go down there. >> i'm trying to. i'm going to do the show -- they're known as trains. >> right. >> the largest -- maybe the largest project going on in america today if exactly. in terms of infrastructure.
it's incredible. but when it comes to the pay for the ceo of the company, that also seems to be a bit incredible, jim. $142 million. in 2013. the proxy came out last night. >> it's the most -- the biggest -- i'm going to do something i know -- before i say this. >> shahreef sueki -- >> when were you a trotski? can we date that? >> the workers united should never be defeated. you need some production. >> did you sell your czar bonds. shareef zu ki you're going to defend $142 million a year. >> yes, i am. when the stock was at 8 bucks the man had a vision. >> yeah. >> the man had a vision. i'm not talking about mo green. i'm talking about a real vision. he came on at 8 bucks and told everyone buy my stock because i'm all-in with you. everything that happens in this company i am going to benefit
from if i can get the stock price up. he was looking at the camera and said, you by cheniere people. it was at 8 bucks. he let you in. i never hate ceos that make you money and let you join. i will not turn against him who had a vision we were going to have a glut of natural gas and export it. when people thought we would have a shortage of natural gas. shareef suk ki is my man. let you know. >> 1800% since august -- >> and came on this show in 2008. he said jim cramer, i want all of your viewers in cheniere. we're going to benefitp. that's how i'm paid and buy it with me. i looks at him and i said, you are the most committed to a stock price i've ever heard. it's okay. he made a lot of money. i've come from every party imaginable. except for the pajama party. i like that man. >> if that wasn't enough for you we have stop trading coming up
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covering. >> one of the greatest shorts i've had was lvlt. level three. remember when everybody is talking about march 15th of 2000, that was the peak of the nasdaq. that stock traded at 1,965. how is it doing now? what happened today some. >> it's up a lot. >> what percentage? >> 11%. >> there you go. lvlt is the company you need to get netflix faster. >> right. >> this company finally broke out. i remember jim crow was the ceo then said couple years ago saying one day this will come through. david, this is about high-speed internet. >> it is. >> and finally working. >> also about a company inflecting to free cash flow positive which is a key and that has a $7 billion to your references to the tougher times, net operating loss. a $7 billion net operating loss when you get cash flow positive can be a strategic asset. investors are liking it. >> what i'm saying it's not done. that it can go still higher because when this company gets it right, this is a huge provider with a fiber company, they did the build out and
entered the web crash and tellco crash, but they are back. it's just that it was substantially higher, 1,965. >>s who's quibbling. what do we have on "mad money" tonight. >> you know i've got concur. why does concur matter so much? david, concur is one of those companies that is a software as a service company and we know that those have been the enemy and the stock is down 7 on what looked to be a good quarter. we're going to have to study that. concur. >> i'm still working on my expenses. only another through weeks. >> charifsouki is my herop. he saw the glut, going to export. only man that will export natural gas in this decade. >> that was jim cramer. a number of ceo entires, including exclusive with ebay ceo john donahoe and leslie moonves. we're back after this. e back afs for the climate.
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us first on this show saying he's very happy with its level of user engagement. we'll bring you more from that interview. >> plus, the ceo of ebay, john donahoe, joins us live for an exclusive interview following his companies's results. >> a read on the housing industry from someone on the inside track. the ceo of true leo will talk to us. we start with twitter the stock curbing as investors worried about user growth, profitability and the lockup on monday. ceo dick costolo joining us live earlier in the program saying he's happy with the path that the company is on. joining us now, from san francisco, is carl who conducted what was a great interview. over to you. >> thanks so much, simon. as you pointed out twitter is on pace for the third worst day since going public, down some 11%, 12% at the open. down 49% from that all-time high of $74. a lot of things about the quarter were pretty much in
line. revenue was a beat. adjusted ebitda was a beat, guidance for the year was good, advertising revenue up 125%. it was the inability to blow away those expectations on user growth that left some investors disappointed and we asked dick costolo with so many high profile events in the quarter, the oscars, olympics, super bowl, ncaa, why wasn't user growth more of a victory? >> the beauty of twitter is that every day in countries around the world, twitter is front and center and almost ubiquitous everywhere in front of people every day. it doesn't take some special event to draw people into twitter. yesterday during adam silver's press conference, there were tweets on air under his press conference from players and other athletes and commentators about the punishment that was meated out and millions of tweets about that event while it
was happening. so it's not -- it doesn't -- we don't need moments to drive people into twitter. they see twitter and come to us every day. so the platform is already mainstream. we have people around the world -- 3.3 billion views of the tweets about the oscars. 3.3 billion of tweets just about the oscars in the 48 hours after the oscars. if you compare that number because it's a big number, to some of the youtube content networks with thousands of video channels, those content networks will get 3.3 billion views in a month. we had that in 48 hours. the platform is main stream. it's just showing people the increased value that they receive when they log into the platform and create their own timeli timeline. >> we've had this discussion before about whether or not there's something about twitter that is archaic -- intimidating and alienating and you're telling me somehow mainstream is
going to discover that it's eyeeser to use in the coming years. >> they're already consuming it all over the place on tv, in print, on websites and mobile sites around the world, they're seeing tweets every day and consuming them. what we want to do is improve that logged in experience for them and make that easier for them to engage with. >> right. >> by bringing the content forward and pushing the scaffolding of twitter to the background. >> the lockup expiration, everybody is talking about that. you filed the ak that says you have no plans to sell your shares, jack dorsey, ed williams. >> benchmark announced one of our early investors, announced that they have no plans to sell. and frankly after speaking with most of our major investors that were with the company since prior to the ipo, many of those investors have declared that they have no intention to sell. so we feel great about that. it's frankly one of the reasons, probably the primary reason, we
have decided and announced that we wouldn't -- we have no current plans to have a secondary offering. you've seen most of the other companies in our space have those fairly quickly on the heels of the ipo. we have had no plans to do that because most of our major shareholders have no desire for immediate liquidity. >> is there a timeline on that promise, on the selling of the shares or the secondary? >> i think there's no current plans. i would say vis-a-vis the timeline of selling, specifically when i do, when jack does, those will be in accordance with a 10-b-5-1 plan and we would have to file that and even under filing that there's another 90 days of a cooling off period before we would sell. >> obviously, guys, that promise in the a.k. and the promise last night in the conference call, the promise in our interview, not convincing a lot of investors. technically on may 5th, hundreds of millions of shares are open for trade so that's clearly got
some of the shorts interested in bringing the name down a little lower. interesting to see if they can get beyond the skepticism as to whether or not there will be a lot of selling on may 5th. we did ask him whether or not he felt the need to buy something big. he said he was focused on growing the company as he is and we asked about the valuation of whatsapp which he said was interesting. over to you. >> yeah. i saw his eyebrows raise a little on that. carl, on the business, i thought it was notable that he used the word mainstream twice in his answer to you. ubiquitous is another word that came up in the conversation. the point is, 241 million monthly uniques in q4, 255 million in the latest quarter. they don't have the scale that facebook does and they may never do that. does this issue come up? this seems to plague investors. >> it's clearly the challenge, is to -- and they will make the point here at twitter, that twitter is not facebook.
so if you are a facebook user and that's your sense of what social is, twitter is not necessarily that. it's trying to convince those people to adopt something that is different and in many cases is new and that's the only way user growth is going to get turbo charged in the near future. >> okay. thank you very much, carl. we'll see you later in the show. carl quintanilla from twitter's headquarters. >> digging the no tie silicon valley chic look with carl. the markets reacting to the first read on first quarter gdp. also the adp numbers out on private sector jobs. also we'll get a fed statement at 2:00 p.m. eastern time. a lot to digest. thank goodness we have steve liesman with all the details. we have to start on gdp. simon walked up and said is that a joke. >> i thought it was a misprint. i thought we got the data wrong. >> it was below what wall street was looking for. >> i've had long my questions
about simon's sense of humor. two reports guys ending in dp. adp and gdp. gdp as these guys were talking about a shocker at just barely positive. 0.1%. could have been a misprint because they were compared to an estimate of 1.1%. just missing a digit. how did we get to this awful number? consumer spending not too shabby at 3%, but that was driven by the way by health care spending, likely the affordable care act for the first quarter, playing a big role. housing, another second quarter, second quarter a very bad numbers there. business equipment negative. government. no rebound from the shutdown negative number in the fourth quarter. inventory also down as well as real trade. but here are the comments. it says bmo, american economy stalled this year in the face of severe weather. capital economics says we've already seen a market improvement in the monthly data for march which suggests there will be a big rebound in the second quarter. gdp growth.
and rdq, we do not take this report as a serious representation of the state of growth in the economy. and the reason for that optimism is the other dp number, adp, which continues to show good job growth in the economy. here's what we got. 220 on the estimate -- sorry 220 on the number versus a 210 estimate, march revisions to the upside. goods producing not too bad, strong service sector growth, that compares with an estimate for the friday government report of both private sector and government hiring of 215,000. what about the fed? i think what's going to happen, i think the fed takes the number with a grain of salt. stays on course to taper. doesn't change its expectations for upping the funds rate some time mid next year. they will keep an eye on this report. any sign the weakness is confirmed it's more than weather will raise red flags inside the fed. >> can't you say it has to be more than weather? you can't possibly blame it all on the weather. the expectation was 1.2%. >> right. i mean you can say that a large
part of it is weather. it's certainly more than the weather estimates of most economists, sara, but we have problems in the economy. i think housing is a problem that we need to start to think more about. and some questions in the economy, i think capital spending is one of them. but other things are going well and the general thought, sara, is that the head winds from last year are diminishing and a big part of the negative or the detraction from the economy was the weather in the first quarter and also the march and april data so far has been more robust. >> we'll see what the fed statement says this afternoon. steve, for the meantime thank you very much. up next on the program, an exclusive interview with the ceo of ebay, that stock in the red today after its first-quarter results. find out what he has in store for the company as they repatriate cash and pay tax. and later, cbs ceo les moonves will tell us what he thinks about the arroyo battle with the broadcasters. "squawk on the street" will be right back. right back. ♪
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and file downloads you'd take that test, right? well, what are you waiting for? you could literally be done with the test by now. now you could have done it twice. this is awkward. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. check out shares of ebay down 6% after first-quarter results disappointed wall street. john fortt is live in los angeles for the cable show with an exclusive interview right now. john? >> thanks there, sara. want to bring in john donahoe, ceo of ebay. stock trading down a little bit after this report. results generally, though, better than expected. john, thanks for joining us. want to dive right in. first, with this cash question,
why do this repatriation or at least prepare to repatriate? is it because you want to maintain that, a, credit rating, versus taking on more debt, and exactly what sorts of companies might you invest in or buy with this money? >> well, john, this is just a simple extension of our capital allocation strategy. it doesn't commit us to repatriate the cash. it's not triggered by any specific m&a or anything specific. and it doesn't preclude us from issuing more debt. it gives us more financial flexibility over the medium to long term as we look at our u.s. cash needs going forward, be it buyback, acquisitions, gives us flexibility that we think will be important in the medium to long term. >> okay. so something set aside should you choose to do it but not putting a specific timetable for it. second question is about alibaba. we expect ipo documents from
that company any day now. there are rumors that the market cap expected could be twice ebay's. it's a global e-commerce player. what's the argument going to be for investors to put their money into ebay instead of a company like that? you know, whether it's ebay's growth direction, whether it's -- what's your argument going to be? >> ebay has a strong global platform. we're present in 190 markets around the world. we have 150 million active consumers roughly in the ebay and the paypal business. we have two globally known brands. globally respected brands. and over $200 billion of commerce volume safely trades through the ebay and paypal platfo platforms. those platforms have built up over years. consumers trust them, merchants trust them. 20% of those transactions are cross boarder. we'll continue to invest in the two strong global platforms and
continue to invest in leading edge technology around mobile technology, around ways to bring commerce to the local market, so we've got a strong global franchise and we'll continue to extend and grow that franchise. >> all right. sound good. simon hobbs, back in nyc has a question. >> john, a lot of people are struggling with this decision, to double back, to repatriate most of your foreign cash, $9 billion, back that this country and pay a $3 billion tax bill as a result. i mean, why do that? why not do what apple has done and borrow the money here against the money that's held abroad? why pay -- it's great you're paying more tax, but why do it? >> well, simon, to be clear we're not -- we've not decided to repatriate the money at all. all we've done is take an noncash charge that gives us the flexibility to do that down the road if we so choose. it's just driven by looking at our future needs for cash, internationally versus our future needs for cash in the u.s.
as we look going forward, we've announced a $5 billion stock buyback, which obviously has to be financed by international or domestic cash, our m&a needs over the medium to long term, doesn't preclude us from issuing more debt, we issued that last year or two years ago, it's a way to give us more financial flexibility over the medium to long term. >> john, david faber. hate to belabor the point what does that mean? if we can follow this through. i'm getting a lot of questions from your shareholders trying to understand it. perhaps it hasn't been communicated as well as it should be. this is a chance to do that. why do you need that financial flexibility? you're not particularly levered. you said you could issue more debt. can you give us some sense here as to why now, understanding it's noncash bs but nonetheless, the idea of financial flexibility? >> you know, david, it's just prudent planning. there's really nothing specific around it other than when we look at our u.s. cash today, versus our international cash,
we have significantly more cash outside the u.s. and if we look at our needs going forward, this was simply a way to take a one-time, non-cash charge to give us the flexibility, if and when we need to repatriate cash down the road we can do it easily. it doesn't preclude our ability to issue more debt, not driven by any specific event other than what i would call a continuation of good, medium to long-term capital allocation strategy. >> by doing it you clearly signal that you are likely to repatriate, correct? >> well, i wouldn't say that. what we're signaling is we have a lot of cash outside the u.s. that we look forward -- we have significant needs inside the u.s. and we want to have the flexibility down the road if we completed our cash or completed our repatriation and saw a major acquisition a year or two years, three years down the road we would have the flexibility to move quickly if we needed to. simply getting more flexibility. >> john, i have a question. clearly you got past all of the drama around carl icahn pushing
you to split the businesses, but if you go through some of the results clearly the growth when it comes to sales growth is in the paypal unit. when it comes to ebay marketplace growth, some investors are disappointed. in fact, sales growth is slowing. i know guidance disappointed a little. how do you plan to speed that up and build on those synergies which you emphasized so much during the fight with carl icahn to increase the sales growth in the marketplace. >> we feel good about the first quarter. we got through it distracting proxy fight, outperformed on the top line, outperformed on the bottom line and reaffirmed our annual guidance yesterday. so as we look forward in the second quarter and rest of the year we're going to continue to drive strong growth, strong growth in the ebay core business. we accelerated growth outside the u.s. we had strong fixed price growth inside the core ebay business. we'll continue to drive new user growth and expand that global franchise. and then paypal continues to accelerate growth. accelerating merchant services growth in the first quarter. we're expanding internationally.
and mobile technology is driving both mobile commerce and mobile payments. mobile up 70% in the first quarter. so we'll continue to drive the positive fly wheel that gets created on ebay and help that accelerate paypal's growth off ebay. it's a formula that's worked over the last several years and one we'll continue. >> john, let's take it macro for a moment. we had a weak gdp number this morning. you had good results for the quarter. but didn't raise your full year guidance at least not yet. how much of that is being conservative, how much has to do with uncertainty over how you see the overall macro economy performing, whether it's here in the u.s. or internationally where you seemed, as you said, to have some pretty good growth last quarter? >> you know, john, i wouldn't say it was macro economically driven one way or another. only 90 days into a year, one quarter into the year. we feel very good about our annual guidance. we reaffirmed that yesterday.
again, within any given year you have pluses and minuses. international growth is strong, domestic growth is about where we thought it would be. we think we have good opportunities in the second half of the year and we're investing in the second quarter to capitalize on those opportunities. so we feel good about the year and the macro economic factors didn't really weigh heavily one way or another. >> all right. john, thanks for joining us exclusively after this quarter and investors have a lot to digest from your preparation to potentially repatriate that cash to your outlook for the rest of the year. thanks again. sara? >> good to get clarity especially on that issue with so many questions. up next on "squawk on the street," housing data, going from bad to worse. we'll talk to the ceo of trulia about what he cease in the industry and his first reaction to the company's earnings results right after the break. te
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good morning. >> good morning. that weekly mortgage number is the current gauge of what's going on in housing right now and the volumes were down nearly 6% week to week with rates not moving an inch and the weather warming up nicely. repsis have been disastrous since rates popped up last summer but mortgage applications to purchase a home down 4% week it to week and down a striking 21% are from a year ago. they should be improving. last year wasn't exactly a housing boom. these numbers are an indicator of sales because most folks need a mortgage to buy a home. you may be asking, why the numbers are so bad if home prices are rising so nicely as we saw from yesterday's case-shiller report up around 13% from a year ago. those prices were juiced throughout 2013 by all cash investors at the low end of the market. today, those investors are slowly moving out and leaving those high prices and the market to regular buyers. buyers who need money for a down payment, need good credit scores to qualify for a loan. they need enough equity in their
current home to be able to move an they also need to have confidence in this housing market. now clearly there are not as many buyers as the market might like. the census just reported in the first quarter of this year, the nation's home ownership rate fell to the lowest level in 19 years. just below 65%. now there are still some investors in the market at the low end and all cash buyers are actually still over one third of the market before the rest affordability is the culprit this spring. more analysis on the dotcom, go to it realty check.cnbc.com. >> we know you've been all over the slowdown approach in the market. we'll stick with housing. shares of trulia are trading higher after reporting a mixed first quarter in terms of results, the company's revenue beating estimates but missing on the bottom line. here is the company's co-founder and ceo. good to see you again, pete. >> hi. good morning.
good to see you. >> before we get into your company's numbers, want to follow up on diana's reporting there. all the data is adding up to slower growth in the housing market. with your unique vantage point, how slow does it go? how much worse does this get for housing in this country? >> so i think what we're seeing the housing market is finding an equilibrium. the investors are stepping out of the market and regular home buyers moving into the market. we're seeing just a balancing act and trying to find the equilibrium. we're quite happy about that. i think as we look back at 2012, 2013, we saw growth in the metrics an we're thinking it's achieving some sortle for of modest growth over the next sel several years. >> if you look at some of the other factors, home ownership rates are at the lowest level in 19 years. i mean we're nowhere near back before the financial crisis.
how much longer is it going to take until the housing market gets back to normal? >> yeah. so we see it's -- you know, some measures it's getting back to normal. home prices are up 30% year over year. you see home sales, they have around 5 million a little stagnant over the last couple quarters. the couple of areas which have yet to grow is one is the new home sales construction. you've seen really disappointing data in the first quarter in new home sales. a lot of momentum in the next couple years. on the home ownership data, we're seeing incredible growth amongst a rental audience. we're seeing just a year over year growth, almost doubling in volume, doubling in inquiries. a lot of growth as you can see if they're not owning they're renting. we're actually one of the beneficiaries of that growth in consumers looking to rent. >> sure. i know that's going to be an area in which you will invest,
peter, moving forward. what would you say to investors about the earnings that you've just reported? you've clearly done well on subscribers, missing slightly on the bottom line. the stock really hasn't gone so far this year. how are you selling the business and business model at the moment? >> we're delighted with the fourth quarter. look at this in the real estate market in the u.s., $27 billion in real estate related advertising in its infancy. trulia's audience is growing rapidly. nearly 50 million in april. also we see revenue growth growing rapidly. this is a huge market this early on in the infancy. where we're excited to highlight in the first quarter, is both subscriber 7,000 subscribers, a record for us, significant record in our history, and it's also a mobile usage accelerating. we've been a huge beneficiary of transition to mobile and mobile audience growth accelerating,
able to monetize the audience and just an amazing experience using our mobile apps, looking at pictures, looking at maps, data, all the information, super valuable. >> i just want to get your thoughts here on recent comments made by rupert murdoch to "fortune" saying he looked at a potential acquisition of zillow, your competitor or you trulia to complement his australian business but these companies were, quote, overpriced. would you consider a sale to mr. murdoch or someone else? >> you know, the -- newscorp had has experience in looking at building businesses internationally in real estate. number one australia is owned by newscorp and a huge success when you look at that business. i can't remember the numbers but like 4 or 5 dlp market cap. >> is that a yes some. >> compare that to the u.s. and it's a much larger market and smaller valuation for us so we think there's a lot of potential for valuation growth in the
future. >> it's not a not. i don't know if that's a yes. he admires newscorp and what they've done in real estate. >> thank you. >> the company's ceo of trulia. >> breaking news to catch up on at the new york mer. >> we have nymex oil prices bouncing off of lows this morning. still trading here below $100 a barrel. we saw a rise in inventories of 1.7 mill be barrels of crude. gasoline up 1.6 million barrels. fuels up 1.9 million barrels. that increase was slightly less than what analysts were looking for and less than what the industry reported yesterday and still keeps our inventory levels just shy of 400 million barrels which would be a record high in terms of record keeping since 1982. since the government has been watching storage levels. that is ultimately what is weighing here on the energy markets. coupled with that weak reading on first quarter gdp,
participants will be watching this afternoon to see what the fed has to say in terms of its easing of those bond purchases. right now, though, we're still holding below $100 a barrel for crude. back to you. >> okay. bertha thank you very much. bertha coombs at the nymex. >> alibaba was expected to file for its ipo here in new york but more than a week later we're still waiting. what's the holdup? we'll have some details on that next. next. nd freddie mac have been there for america. helping millions realize their dreams of homeownership. and when fannie mae and freddie mac needed help, america was there for them. today, fannie mae and freddie mac celebrate payment in full to taxpayers. together, we've created one of the greatest comebacks in our nation's history. so, let's preserve and strengthen fannie mae and freddie mac. because without them there really could be no place like home.
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alibaba was expected to file its f1 this week but investors are waiting. kayla tausche has the details. you've been doing a lot of reporting on the delay. what's the holdup? >> as investors have been waiting for this document we had word last week it would happen as soon as potentially monday of this week. now it appears from the people that i've been speaking with, the filing is more likely to come early next week. these are massive documents, in this case an f-1, hundreds of pages in length and you can imagine a lot of normal procedural stuff behind the scenes going on. dotting is, crossing ts, making sure you have an auditor sign off on almost every single number. i'm told the delay in the ipo filing is not expected to hold up the timing of the ipo with executives and underwriters hoping for potentially the largest ipo in the u.s. ever to come to this market by labor day. now that could, of course,
change by a couple weeks depending on what the sec has to say, but at this point that's still the case. of course market conditions could change that valuation, but right now, upwards of $20 billion is what some advisors are talking about. of course executives are doing meticulous review of what is a very, very massive document, but some advisors i spoke with were talking about the idea that only recently was the document shared with the broader pool of underwriters and this recent buying spree by alibaba and its founder and chairman jack ma had shifted focus. in the last month alibaba and/or ma have done three deals, paying $532 million for control of a financial software company, buying $1 billion stake in an on-line games and entertainment company and just as of this monday, paying $1.2 billion for refly a one-fifth stake in youku. those are strategic priorities
for alibaba for ma, for the broader empire, but, of course, until you get some of those things out of way you can't sit down and hunker down and take a fine tooth comb to some of the important documents. david, sara, simon, i know that investors are waiting for this document, especially investors in yahoo! to see what these numbers hold, but it doesn't look like we'll get that until next week. >> 400 pages i hear, kay ta. it's not going to tell us more in terms of basic sales numbers than we got from yahoo!. eventually the amended filings may include the first quarter of this year. i don't know if you're hearing differently. we'll get a much better sense of margin and everything that goes into it, but we're not going to get updated financials at least in the top line that we got just from yahoo! reporting its last quarter. >> exactly. it won't have the first quarter until later on when it goes back and forth with the sec and then right before the road show will publish the most recent financials once it has those. david, we also won't know how big the ipo will be. i'm told and this is customary it will have a placeholder figure of how much it looks to raise, a small number but that's
not going to save $20 billion or $15 billion, but of course the talk in the market is that this could be the biggest ipo to hit the u.s. market ever. >> yeah. why they're going to bring it in august is beyond me. august 25th. everybody will be around then. we'll see what happens. >> kayla, thank you very much for that. joining us now is a tech entrepreneur who knows how to profit from social and gaming, dan port was the ceo of [ inaudible ]. and sold the business to zynga for $180 million two years ago and currently the head of digital for the hollywood talent agency william morris endeavor. good morning. >> [ inaudible ]. >> i'm excited. i don't think there's been a huge success of track record of companies from asia listing here or even operating their business here, but i think that the commerce business has turned out to be so much more defensible than i think anyone would have ever thought. >> let me pick up on that. kayla was highlighting the transactions jack ma trying to
do before he comes here and he's launching this battle with ten crept, the big china players. what does that say they're having this struggle, rapid acceleration on m&a, because china is such a great market or because as you say, there may be other factors? >> i think you're seeing this battle and you can actually see the same thing with amazon here where they're trying to combine content and commerce. so on the one hand you have ten cent connecting these people between kind of content and games, and then you've got alibaba on the commerce side and at the end of the day, they're all going to be fighting over the same people encroaching into each other's territories. >> the other topic everyone is buzzing about the f-8 conference from facebook. the first time we've seen that in a couple years. mark zuckerberg is set to speak. are you expecting any big product announcements out of facebook now that it has become a public company with investors scrutinizing everything it does? >> i don't think you're going to see anything as a facebook user that will be different for you,
but obviously facebook has moved to mobile, the conference will shift to mobile, and aside from facebook a lot of people are still looking to make money on mobile especially through mobile ads. so anything they roll out on that front that's going to help other developers is going to help app discovery, people think the app store is broken, can't get their app found, that's where the opportunities are. >> dan, your head of digital at william morris endeavor. what do you do? >> mostly roll back in my chair, put my feet on the desk. >> can i get that job. >> we're looking constantly at the way the entertainment landscape is changing. you know we are interested in and work in tv and movies and music and books and all those things are kind of undergoing a seismic shift. we make strategic investments for things that could be disruptive for our business. >> any big conclusions you can share with us? >> the at the end of the day it's going to be content driven. we get all upset are people
going to watch on their phones, ipads but the end of the day, good content is really what stands out. >> i'm not sure how up to speed you are on the fact that twitter is having another bad day in the wake of its results and questions over its ability to grow and engage people in the huge lockup, two-thirds stock becomes available on monday. >> yeah. >> what's the inside track, what are people saying behind closed doors. >> i think two things. one is i do think that, you know, traditionally people do sell, but i think that the people who are invested are very much in this for the long run. i think, you know, 10 to 15 years ago, companies would go public at $100 million revenue. that's when amazon went public. if they were at a billion like twitter is now they would have grown ten times and you wait a long time to go public, and you're at a slower end of your growth curve. what i like about twitter especially is vine. we see in the talent business a lot of kids on vine who are building tremendous audience, vine unlike be youtube or
instagram has this kind of revine thing where people can share other vines and they're really growing audience at a very, very rapid clip. >> and can you monetize that? >> i think in some ways you can more highly because if you're a viner you can crank out the six-second incremental videos faster than you can on youtube and you can have brand integration and stuff like that. we're looking and working with a lot of those people and i never hear anybody talk about it. i think it's really interesting. if you can argue that youtube as a standalone company would be worth $50 billion, even if vine is worth a 50 of that is there value there. >> good to see you, dan. come back any time. >> thank you. >> dan porter joining us. >> we need to be vining more. >> carl does a lot of vining. probably vining as we speak on the west coast. >> up next general electric making a multibillion dollar for alstom's energy business. hear what ge's ceo had to say about the offer and where it fits into ge's plans when we come back. on car insurance.
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welcome back to "squawk on the street." check out shares of royal dutch shell. the oil giant posting better than first-quarter results an boosted by gas earnings. increased its dividend to 47 cents a share. the stock up 3.5% just off of its session highs. simon, back over to you. >> thank you very much, dom. meanwhile the french conglomerate alstom is accepting general electric's bid for its energy assets. ge's ceo jeff immelt joined us earlier in the show. mary thompson here at post nine with the highlights on that. he's clearly engaged on a massive pr campaign within the french establishment now to get this through. >> that is right. you're correct in that. they have experience there. they know how to do it. remember the deal isn't final, that alstom called ge's offer compelling and general electric said on an analyst call its binding cash and debt offer did have the support of the board. as for immelt he sees the purchase of the company's businesses as a good strategic fit to its own power business.
>> i think it's an acquisition that's very consistent with our execution skills, our ability to drive synergies. it's in a market we understand. i think it's got relatively low execution risk for our investors. >> alstom's board, shareholders and the labor board approve the deal ge expects it will close in 2015, at 8 to 10% of earnings and result in 75% of its operating earnings coming from its industrial businesses. that's up from a goal of having 70% of operating earnings coming from those businesses. immelt wouldn't say if further asset sales and finance would account for the remaining 25% will be necessary to reach that ratio. lastly it is expected to bring about $1.2 billion in cost savings over the next five years. the cfo will be leading the effort to turn the costs. one question the investment community has about the deal why is ge making a bet on alstom's turbines at a time when the
developed world is increasingly opposed to coal fired anything. here's immelt's response. >> there's still going to be super critical coal plants built. it's still probably for the next decade the most dominant technology around the world will be coal. it's just not going to be in the u.s. and europe. >> during his 13 1/2 years as ceo, immelt has done 50 deals in europe. this would be his 51st and his largest ever if approved. now with recent reports saying he may leave before the firm's mandatory retirement age of 65 we had to ask him if the successful completion of the deal could pave the way for his exit and appointment of a new ceo. >> i think i've got a fantastic company, i love the way we're positioned and there will be a right day for a transition to ge but that's not today. >> not today. but remember the deal isn't going to be done until 2015. >> i believe he used the phrase b.s. when it came to some of the reports. >> he was talking about a report earlier and goes i knew it was
b.s. when i saw the people they mentioned as replacing him. he said that in guest. of course it's some of his top lieutenants mentioned in the report, people he looks on favorab favorably. >> should anybody mention the germans offer? >> yeah, we -- >> on the network? >> yes, you can. let's talk about that. alstom has knowledge that it received an expression of interest from siemens. siemens have reportedly set to sweeten an earlier bid, and alstom said it would consider all bids, during the month it's reviewing ge's offer. >> so it's not final? >> no, it is not. they have until june 2nd, then shareholder vote. the labor board has to approve it. >> and the germans have said we need four weeks to look at your books. >> until june 2nd. >> but they did sound pretty confident. all right, mary. good interview. thank you for bringing it to us on the heels of the ge bid.
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that corporate trial by fire when every slacker gets his due. and yet, there's someone around the office who hasn't had a performance review in a while. someone whose poor performance is slowing down the entire organization. i'm looking at you phone company dsl. check your speed. see how fast your internet can be. switch now and add voice and tv for $34.90. comcast business built for business. he's all fired up about growth in our nation's economy. let's go to rick santelli with the "santelli exchange."
>> well, thank you very much. and what a professor to have on the fed day. we have professor john taylor. welcome, professor. >> good to be here. thank you for having me. >> it's our pleasure. all right, listen, i was in a discussion earlier today. tell me if i'm on point or off point. the fed being data-dependent to me is a twilight zone, rod serling statement to make. tell me if this is correct. we look at data, and if it weakens, we keep doing a strategy that gives us a .1 gdp, even though weather related, uneven growth. does it seem kind of crazy to hold out as data-dependent strategy that probably fails the litmus test of cost benefit analysis? >> i don't think it's been successful. i don't think it's worked. and i think it's good they're getting off of it gradually. i think you're right, the first quarter was largely weather, but it's still not -- even when you put that in, it's not that great, and a rebound in the second quarter most likely, but that's also coming back from the
weather. so i think if you look at this policy over the years since they started it, i don't see it as much signs of success. i think you're exactly right. >> if the john taylor rule was dictating overnight fed funds rate, where would it be at right now, professor? >> be about .25%, most likely, and it wouldn't have gotten into all of the qe in the first place, so the questions about exit and the uncertainty about that wouldn't be there. so i think it would have a lot of advantages to follow an approach like that. >> charles evans made the following statement not long ago. we'll put it on the screen. for me, there is a problem with simplistic approaches. simple tailor rules failed to express policy, intentions clearly. professor, where i come from, kiss is the rule of the day. keep it simple, or stupid, i'll say, keep it simple. what is wrong with simple where every player in the marketplace can tinker with your formula and nowhere fed funds ought to be.
isn't that a better way? isn't a rule-based fed policy preferable? >> absolutely. and it worked for quite a while while it was being followed more or less. in the '80s or '90s, a good time, economists call it the great moderation. you look back at that history, when the fed was most ruled-based of all, and now off of that. so i think charlie evans is dead wrong on that statement. >> all right. listen, with regard to imf policy, you've written great papers on the exceptional access framework. and what i see now is with respect to ukraine, the imf is going to be given the first part of what it called the bailout of $17 billion. here's the key. the u.s. has promised to underwrite a euro bond issued by eye crane. can you tie all that up together? is this a good idea or bad idea? >> i think it's a good idea to get in and help the ukrainian government get on better track with economic policy. the exceptional access framework which the imf i think broke the own rules in the case of greece,
that was a problem. they have to fix that, they haven't repaired the rules. they're intending to do it. in the meantime, a strategy to make sure ukraine's debt is sustainable so they can get out of the mess and actually give them some encouragement to follow some good, say, free market, if you like, policies, which would help that country tremendously. >> excellent. thanks for clarifying that with regard to ukraine. thanks for taking the time today, professor. simon, it's all yours, buddy. >> thank you very much, rick. we have two big interviews coming up. marriott ceo will join us with the group's results, and les moonves will be with us live. we're back after a quick break. passion...
around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look.
moonves and arnie sorenson. meantime, kayla is back in new york along with john steinberg, buzzfeed's coo and cnbc contributor. good morning. >> good morning. >> let's recap twitter. revenue in line -- actually a beat, adjusted ebitda, a beat, the guidance for the year good. investors today obviously disappointed that a monthly average users did not grow more than being simply in line. some weakness in international. the stock today is on pace for its third worst day since going public last fall, as investors worry about the lockup expiration, of course, on may 5 kt. we did talk to dick this morning. so many big deals in tech lately. we asked him, dos he feel the urge to buy something big. >> we're very focused on strengthening our core products, twitter and vine. i don't feel any particular
compunction to do that. we have three specific things -- growth, operating leverage, and operating efficiency. and as we strengthen our core and service to growing our core products, we'll be fine. >> are valuations right now, i'm thinking whatsapp, are they taking your breath away? >> they're significant. how's that? >> okay, that's to the point. >> yeah. >> but does it make you feel like things would you want to buy otherwise are out of reach? >> no, i don't think so. we look at the landscape and we have a very considered approach to m&a. the kinds of things we want to do in service to strengthening our core, like the quinnipiac acquisition, we're able to do. >> some argue growth names are under pressure, to show promise of things other than revenue growth, other than cash flow. do you feel pressured to start putting some -- demonstrating some true eps power in the traditional sense? >> so i just mentioned
specifically i'm focused on three things -- growth, operating efficiency and operating leverage. that second and third are absolutely in service to steadily improving margins. steadily improving margins. so as a high-growth company, what i want to make sure we're doing is not starving the growth engine while constantly focusing internally on getting better -- better and better at operating efficiency and operating leverage in service to margins. >> all right. so obviously there's the user growth question. there's the lockup expiration question. and on top of all that, guys, the question of whether or not twitter drives tv ratings, a bit of a debate between costolo and allen woertzle this week. john steinberg, i'd love to get your views. what's the stock reflecting today? >> i think the story they're telling on the call and what he's telling you is it's a good story. content is created and ultimately it doesn't need the consumption on the platform.
the challenge is, he said on the call, people are consuming tweets everywhere. they're not getting the full revenue benefit of that. if they had a tv network partner or mainstream media partner or had a way for people to consume it in a newspaper online format, i think the company would be better positioned. but they're changing the story. now it's no longer a social network. >> he described with you a relationship with tv where it's complementary, not just where twitter benefits tv, but tv should benefit twitter, too. you put the question to him about these moments -- the oscars, ncaa, and the olympics. even though he talked so much last night about the oscars, 3.3 billion impressions just from that single selfie, today he told you, look, we don't depend on those moments. but what sort of message do you take away from that flip-flopping, for lack of a better word? >> well, i think they would point to, obviously, the incremental steps that they're taking to try to drive that engagement, being more aggressive on notifications, make it easier to on-board, as
they say, changing that user profile, which we're going to look at later on this hour, making the image and the picture more of the star. it's no -- one thing about twitter, all this time, people have said what can i say in 140 characters? and a big part of the strategy here is to prove to people that it's no longer about those 140 characters. they talk about the envelope and the kinds of things you can stuff into that envelope, i.e. the tweet, and convincing people it's more than just a series of letters. john steinberg, the bulls this morning would argue they're keeping their add load light, they're being modest on pricing, and they're still going for scale. that will pay off long term. >> yeah, i mean, i think they have a full bowl story, actually. if they came out and leaned into the youtube argument, he compared them to youtube a little bit. if they said it's not about user engagement, this is a platform where a few celebrities, business leaders put the content out, and people discover from different kinds of places like
youtube, that's a compelling argument to me. the company has tremendous revenue growth, profitability growth on an adjusted ebitda basis. it's a great company if they just didn't have to keep seesawing back between being a creation platform and a consumption platform. >> carl, i know you'll have more on the platform and some of the new initiatives that twitter is rolling out later this hour. we'll look forward to that. and for more from twitter, carl, you may look casual, but you're all business this morning. >> battle of the buttons. >> i know. if dick did three, does carl do three? >> carl was very envious of jon fortt and i not wearing ties. he went out to california, said i'll take it up a level, two buttons. >> >> we'll see. he looks great, though. >> he always looks great. speaking of jon fortt, he has another tech story this morning. shares of ebay are down big despite strong revenue growth across the board. the stock, though, look at it. down 5%. the big question, of course, is this questionable tax
repatriation, and jon fortt is live in los angeles with some answers. jon? >> thanks, kayla. good numbers from ebay. 4.3 billion in the top line. 70-cent eps, but a lot of questions about what ebay has done accounting-wise. they really have taken a noncash charge that gives them flexibility to repatriate overseas cash if they choose to do that. but taking a look at the business in general, john donohoe struck an optimistic tone about the rest of the business, though the u.s. business performed as expected, but international did a bit better. listen to what he had to say. >> international growth is strong. domestic growth is about where we thought it would be. we think we have good opportunities in the second half of the year, and we're investing in the second quarter to capitalize on those opportunities. so we feel good about the year and the macroeconomic factors didn't weigh one way heavily or another. >> now, to take off on this
question about potential repatriation, it's important to understand ebay already has some debt. they already have a buyback program going. a couple months ago, donohoe said they're open to doing more debt, but only if it doesn't affect ebay's "a" rating. take a listen to what moody's said back then, also, however, they view the increased levels of share buybacks as marking a traditional shift in the traditionally conservative financial policies. so this could be just a hedge. if they find out that taking on more debt would affect the "a" rating, now they've already taken the noncash charge, they're able to repatriate that cash to do acquisitions. we'll see what they end up doing. but i think that is the issue here. they are not actually repatriating the cash. they're not actually writing a check to the irs quite yet. but they have the flexibility to do that if they need to, guys. >> no doubt. and investors are scratching their head, jon, even if they don't do it, what will they do? we may never know until we know. but we have jon steinberg here,
too, and i want to get his thoughts. we were discussing before the show the parlor game of what they could do. do they buy a company? do they maybe down the road split off paypal and want to make sure that each separate company has enough cash on the balance sheet? >> yeah. >> what do you think they need this cash for? >> when you look at the quarter, there was actually an acceleration in paypal, so the business is doing well. gross merchandise volumes decelerated, but in line, as well. i think they need an acquisition to basically make the company exciting and create an upside for growth to get out of the low multiple they're in right now. i would hope that it's for some kind of transformative acquisition in ecommerce. that would be my hope. i don't know. >> jon fortt, when you talk about the competitive threat to ebay, is there anything at the top of the acquisition list that would help the company's competitive position right now? >> well, i'm not sure, kayla. you look at mobile is clearly the area where they would have to make some kind of acquisition. they already did braintree and got vinmo along with that, and
that's important. you also have to look at what alibaba is doing. they're going to suck a lot of the air out of the room once they go public. alibaba is making all kinds of little investments in messaging, in video-type aps, that sort of create this ecosystem for them. even though they're not outright acquiring the companies, they're getting lots of data about what users are doing, and in, prospective ways of driving payments, driving audience. maybe ebay needs to do something like that. it might not even be specific to their core business, but something that adds and gives them information about where they should move next. >> i think that's a very good point that jon makes. if you look at what alibaba announced the other day, taking in investment in the youtube of china, you could very much see ebay doing something like jon said, not in the core, but in terms of the expansiveness of the audience. >> i know you put the question to donohoe about the threat of alibaba, especially as it raises a bunch of capital. he seemed to dismiss it while recognizing it as a good company. we'll see what happens when
alibaba goes public. jon, good stuff. we'll see you later, thanks as always for bringing us big interviews. up next, the arguments that the supreme court are over, and now we wait for a decision on aereo, one that could change the future of tv as we know it. cbs ceo les moonves is one of aereo's fiercest critics, but is he worried about what the future might hold? we'll ask him in a moment. plus, jeff immelt will weigh in on the bid for alstom's energy business. that's coming up a little later this hour. honestly, i'm pouring everything i have into this place.
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welcome back. we're at post nine where david faber joins us with a cnbc exclusive interview. >> the fight between broadcasters and the start-up aereo, it made its way to the supreme court. arguments were heard last week. and now we await a decision, but that hasn't stopped a lot of people from commenting on what's likely to come when we get the decision in june. cbs has been one of the more vocal critics when it comes to aereo. of course, a number of the broadcasters, including our own parent company, has joined in that criticism. joining me is ceo leslie moonves. good to have you. >> nice to see you, david. good to be with you. >> let's talk a bit about aereo. >> okay. >> because many people do view it as a threat to your business, something you and i have discussed in the past. the recent quote from barely diller, vocal in his support for the company, given he's an owner, judge roberts asked a question, that being the chief
justice, which was you're only doing this to get around the copyright law. what we're doing is complying with the law, says mr. diller, what we did is constructed a technological advance within law as we understood it. why is he wrong? >> well, you know, number one, aereo would like us all to believe that if you're against aereo, you're against technology. and that's absolutely not the case. i think the broadcasters and other companies are very much pro-technology. we put a lot of our content online. we have deals with a lot of the people that are paying for our content, like netflix and amazon, that are online services. they provide the same thing as aereo does. the only difference is they pay for our content. aereo basically takes our content that we produce and distribute and steal it and deliver it to the public for a price. we're very happy to have them distribute the content, but like everybody else who distributes our content, they need to pay for it.
look, we're very pleased with our case. we're very pleased with how it went at the supreme court. but pure and simple, they're taking all the work of all the creative community and they're stealing it. >> you know, during the arguments in front of the court, the justices did seem to be trying to draw some sort of a distinction about designing to the law instead of breaking the law. and, also, had an understanding, leslie, it seems, at least, retarding technological advances, particularly when it comes to advances such as the cloud. you say aereo struck down, that's not going to stop technological advances. beyond what you just shared, what else can you share in terms of making that argument? >> by the way, aereo basically declared there was a fire in a movie theater. i.e., if you shoot down aereo, which is an illegal service taking our content illegally, then you're anti-technology. and that is just absolutely not true. you look throughout silicon
valley and throughout all the media companies, and we have a great deal of business with clouds. we put our content up there all the time with a lot of different services that always pay for it. what's illegal about this is they're taking our content, and they're selling it to the public and they're not paying for the content. so the creative community should be up in arms about this, because basically they're taking the content that every producer, writer, you know, actor, director, puts on the air, and they're basically taking this content, selling it, and getting paid for it without giving anything back to the people that produce the content. that's wrong. >> there are plenty of monday morning quarterback when is it comes to supreme court arguments. i don't know who will end up right or wrong here. certainly, many are saying, hey, given what we heard in that court, it is certainly no slam dunk for the broadcasters. that aereo is shut down here. leslie, you have to have a plan "b" and i'm curious if can you sort of share it given it may
not be that many months before we have to have a real conversation about that? >> no, by the way, the decision is supposed to be some time in june. we are very confident in our legal position. we're very confident that the supreme court will do the right thing. there is not going to be great financial harm to us if perchance we should lose this. there are a lot of things we can do -- by the way, not all of them are pro-consumer. so there are things we're going to do, this is not going to hurt us financially. our deals with the mvpds -- the comcasts, directvs -- will not be affected. we will be fine. this is just the beginning of people be able to steal content. >> well, why? what's it going to lead to? if, in fact, it's upheld -- >> if it's upheld, there could be a la cart. there could be a lot of ramifications about this, where the ecosystem won't be the same as it is now. >> right. >> and as i said, there are a
lot of companies that are paying us for our content, and we're very pleased with those relationships. and we have the ability to go over the top and direct to our consumers, which is one possibility as well. >> i know. you've raised over the top a lot. you mentioned a la cart. many would argue we're going there slowly but surely anyway, regardless of aereo, given the choices available to people in terms of what they can get over the broadband. you're helping that. clearly, you have an important netflix deal. you're one of the early adopters there. >> yes, exactly. >> so we're moving to that potential world regardless, aren't we, of whether we have an aereo or not, even though it may obviously quicken that pace? >> that's a very good question, david, whether we go a la carte or not. it's an interesting proposition. the world of a la carte, however, once again, people will need to pay for the content. you can't take somebody's profit and make a profit on it without paying them. if the world heads to a la carte down the road or some other form, a, it probably won't be good for the consumer, and b, it
certainly won't be good for our businesses. >> well, again, you know, diller simply saying, hey, we're just giving people an antenna they'd otherwise have top of the tv, we're putting it somewhere else. and judge roberts did at least sort of seem to give credence to that idea that they're just helping you do what you'd otherwise do yourself. >> no, judge roberts alluded to the fact this was a gadget and how was it different other than you take it for nothing. there were a number of points made in the supreme court arguments that certainly supported our case and led us to feel we're in a favorable position. there were a number of questions there about the legality. by the way, there's the copyright law. if you want to deal with the w law, we are certainly in the right. in addition, as i said, they have led you to believe that this will be the end of technology. we are very pro-technology. >> leslie, a couple of other things to quickly hit with you while we've got you. >> yes. >> twitter today, for example, down sharply. i don't expect you to weigh in
on their earnings, but i'm curious, because allen woertzle came out with this quote where he said it's just not true, that is that twitter drives tv ratings, i'm saying the emperor wears no clothes, it is what it is, these are the numbers. do you agree, does twitter not drive tv ratings? >> i don't quite agree with that. i don't know if there's a direct correlation between twitter and our tv ratings. but i think having a dialogue around our shows certainly is helpful. we like the relationship with twitter. we like people talking about our shows. so i wouldn't make this a bold statement like allen did. we're very happy having people talk about ncis and big bang and et cetera. >> so no clear evidence it actually helps ratings? >> it's hard to tell right now if there's a direct correlation. you know what? we're touching all our bases and that's why we're america's number-one network. >> yahoo! announcing it's getting into your business, too. scripted content seems to be all the rage these days.
does it make it more expensive for you? is that something else you have to consider as you look to the future? >> i don't think so. i think we welcome all the people that are trying to produce content. remember, we're not only a network, we're a large production company, both, you know, for cbs and for showtime and the cw, and all sorts of places. so we welcome everybody in who's getting in the original content game. you know, we're -- we're successful at it. and, you know, the more the merrier. >> and finally, one that you and i would usually start with instead of ending with, buybacks. the exchange offer, of course, will come later this year, in which you buy back a lot of your stock. talking about cbs outdoor, which went public here not long ago. but some of the shareholders i've been talking to say, come on, do near-term buybacks. give us more money now. lever up. what do you say? >> well, we just did a buyback in the first quarter for over $2 billion. i think that's a fairly substantial level of buyback, and our buyback program is continuing. we continue to be more aggressive. we won't borrow a lot of money,
obviously, when the outdoor transaction happens. we're going to continue to be aggressive about buying back our shares and the future seems very bright. >> all right. as always, we appreciate your time, leslie moonves. >> thank you, david. >> cbs ceo. interesting fight on aereo. >> yeah, covered a lot of ground there, david. thank you. >> sure, kayla. from one great ceo to another. this morning, france's alstom announced it will accept general electric's bid for its energy assets. ge's ceo jeff immelt talked about the deal in an interview this morning and mary thompson joins us with the highlights. >> the deal is binding and requires final approval of the board, shareholders, and labor board. on cnbc this morning, immelt sounded confident of the deal's chances despite the recent political uproar of france's alstom home country. >> we've done a lot of deals in europe over time. we're pretty experienced in this kind of stuff. i think we got a good offer, and
i think it will be excuted. >> if executed, ge sees it closing in 2015 and adding 8 to 10 cents by 2016. it means by 2016, 75% of ge's operating earnings will come from its industrial businesses, and it also expressed cost kufts of $1.2 billion to be expected or realized, i should say, five years after this deal closes. now, buying alstom's renewable grid and thermal businesses would be ge's largest acquisition under immelt, one done in france but with an eye on emerging markets. >> we have about a $45 billion footprint in the emerging markets. alstom's going to add another $13 billion to that. ge's going to be close to $60 billion in the growth markets around the world. that's a presence that no other industrial company in the world has. so we think we can do a lot with that. >> now, as i said earlier, the deal isn't final. alstom's board has until june 2nd to review it and can review any unsolicited offers until
then. siemens is expected to make one. alstom saying they received an expression of interest, and it would give siemens access to information. the news of the bid leaked and caused an outcry in france where politicians are concerned about job cuts. ge says it plans to add jobs to alstom's existing businesses and immelt said he doesn't expect to make further concessions to win the deal. >> france is already going to be headquarters for some of the divisions of our power business. we already have a big operation in bellfort, which will grow. we acquired it in 1999 and quite competitive on a global basis. so we're adding to strengths ge has in france. >> we'll have to wait until june 2nd for the final decision. back to you, kayla. >> thank you so much. a seminole announcement today, but it doesn't seem like the situation for ge or immelt is over for now. but for now, thank you, mary. from france to the broader european markets, we want to get you the close in the u.k., just
go five minutes to go in the markets. a mixed session so far, a day in which data showed euro zone inflation rising in april to .7%. that's below forecasts, which does raise the likelihood the ecb could act to ward off deflation in the months ahead. paribas one of the biggest losers, could receive a fine. this is in connection with alleged violations of u.s. sanctions against countries including iran. kate kelly at cnbc has been reporting that u.s. authorities are in an advanced stage in this inquiry, and, of course, we will see where those settlement talks are he assume. coming up next, over 1,000 rooms, 49 suites, five dining rooms and underground concourse and a 56-foot steel structure centerpiece. those are just some of the shy lights from the new marriott marquee which opens in d.c. the ceo of marriott is here to weigh in on that. first, rick santelli, what's on your mind?
>>kayla, we'll have to look at our first up one-tenth, the first quarter gdp, and i'll give you a number, 107th out of 117. does that sound good? we'll talk about what that means. it's actually a comparison of the u.s. versus other countries. you'll want to hear this one in about five minutes. ♪ ♪ ♪ ♪
welcome back. dow is holding on to slight gains. nasdaq and s&p are negative. we want to go to the cme group and see what rick santelli is looking at. >> hi, kayla. this morning, we had an important piece of data and that was our advanced look at first quarter gdp, and i understand that weather was an issue. keep in mind a couple of things. we've had now january, february, and march data. so economists, they get to look at all the data thus far for the entire first three months of the year, and they get to try to factor in what the number would be. and believe me, if you've been listening to the analysts and economists over the last several months, weather has been their big bane, okay? when they were looking at 1.2, they're looking at all of the available data and factoring it
in. in my opinion, this miss -- this miss can really be quantified by the disparity between what those economists expected and the .1 that we actually received. i'll take it a step further. i understand the weather was an issue, but i will tell you this, 70% of the u.s. economy is consumption, okay? what were the consumption figures? the real personal consumption was .3%. it was 3.3 for the quarter last year. the service sector, 70% of the economy, the service sector had a blowout set of data. they had the best level, 4.4% on service expenditures, that's a 14-year best. so if you want to weigh this out on a teeter totter of objectivity, there's a lot to be talked about here. now, we're going to deal with another issue. the big story yesterday is the house committee was trying to work on making some temporary issues regarding corporate tax code permanent.
and i'll tell you what. mr. camp had been working on tax code changes for years with the house ways and means committee. i doubt any of this will pass. it really does underscore, whether you're looking at ebay, apple, or how much is overseas, the corporate tax code, the tax code in general, is horrible. i want to give you a couple of specifics. 1986, a rewrite under reagan. 26,000 pages today, it's 70,000 pages. over the last ten years, 4,400 changes, so basically a change every day. since 1986, we've had 14,400 revisions. according to world bank, 61 nations do it better on tax policy than us, and here's my statistic of the day. out of 117 countries, with regard to efficiency of tax policy, we ranked 107 with the world economic forum. i tell you what, there is a lot to be said about making subtle changes. but when everybody in the entire world, including every politician, everybody on april
14th, everybody understands our tax code stink, we keep putting more band-aids on. if we can't get something so obvious fixed, it's a little bit depressing when you think about the future of any type of fiscal improvement with regard to what comes out on that side of the hudson. kayla, back to you. >> all right, thanks, rick. a lot of people trying to reconcile that number today. but you always, with your props, do it nearly bheft. thank you, rick. mean white, the lineup of major ceos continues. simon hobbs joined by a special guest. >> how do you follow that? how do you follow that? -- opens in washington, d.c., tomorrow, spanning an entire city block. the marriott marquee will boast 1,200 rooms and 60-foot steel sculpture as its centerpiece. they're announcing earnings that beat the street, raising its guidance for the year as the ceo accelerates its share buyback. joining us in another first on
cnbc interview is arnie sorenson, the president and ceo of marriott. thanks for being with us. >> you bet, simon. nice to see you. >> this is, as i understand it, the fifth marriott marquis in the country. i imagine you're pretty pleased to run it for the owners? >> we're so excited to see the marriott marquis in washington finally open. you know, a hotel like this, it's 1,175 rooms, obviously a deep involvement with the city and their convention center, is a decade-long project, to get from idea to opening. we're finally at opening, and we couldn't be more excited. >> you know, in preparation for this interview, i was going to ask you why anybody at this stage would open a hotel in washington when the market has found it difficult to grow, partly because of the federal cutbacks, but also, of course, because group bookings haven't returned in the industry. i saw the figures you've come through with today that actually revenue per available room across the country in the first
quarter is up over 6%, much better than people expected, and the outlook also is being raised for you guys. >> yeah, what we're seeing, both in the united states and around the world, is really strong same-store performance. and in some respects, it's a steady as you go message. we've seen rev par coming out of the recession at 5%, 6%, year on year, starting in 2010, continuing into early 2014. so we're a little over 6% across the united states, and a little over 6% across the globe. you go as far away as a place like asia pacific, we reported the best rev par growth since the second quarter of 2012. and that's a comforting thing, obviously. >> what everybody is talking about this morning, or lots of analysts certainly, is the way in which you're now accelerating the share buybacks. in the first quarter, you're now buying at an annualized pace of $1.4 billion of your own stock. that's in one year.
8% of your outstanding shares. why are you buying so heavily when the market in general has stalled? >> well, we have -- we've purchased about $4 billion worth of our stock now over the last four years, and essentially the way our business model works, we're a management and franchise company. we're not a real estate owner. so we produce about $1.5 billion or so of ebitda -- or of fees, excuse me, and this year, we think our ebitda will be close to $1.5 billion. it's a cash machine. to the extent we have opportunities to invest in our business, as with the acquisition of the prodia hotel company in south africa which we closed first of april, we'll invest in the business. to the extent we can't find sufficient uses of that capital, we think the right thing to do is return it to shareholders, the right way to do that is buy back our stock. and while our stock has moved really well, we're up over 20%, i think, year to date, and there is some apprehension in the market about where equity values have moved, what we see is an
industry recovery that's in the middle -- middle innings, not towards the end of the -- end of the game. and that means healthy growth coming in the years ahead. the way that works in earnings per share means our stock, we think, is a really strong buy at this point. >> before i let you go, a lot of people in the industry for a long time have spoken about when they're going to be able to amazonize what's going on. i see it in the press release for the marriott marquis opening, you're talking about mobile check-in, check-out, mobile guest services, allowing guests digitally request everything from an extra towel to a wake-up call. are we there yet in your view with what the company's doing? or is there space for some of the others like expedia or trip advisor or price line to work with you and do it for you? >> well, it's an interesting space, obviously. we have one enormous advantage in the lodging business, and that is that the stay cannot be
milled to somebody. so we're not selling a product that can be wrapped in a box and sent by fedex. we still own that stay, and we still have a personal interaction with our guest. it doesn't mean it won't impact the way they buy. we've seen already that marriott.com has now for five years been one of the top-ten retail sites on the internet. we've seen in the last two years 40% of that business move to mobile as opposed to desk top, and we'll see that shift continuing to move. so we've got to make sure we invest in those channels so that we are as easy to use through a mobile device. we've got to also make sure we have the languages so that the bookers in china or the middle east or brazil can book in their own language, and we're doing all of that. but we're also working with folks like expedia and trip advisors and the others, some customers want to make sure they use those sites. and so, if they want to book through that site, they can book in our system, as well. >> okay, we'll leave it there. i know you have a busy day.
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all right. coming up at the top of the hour, with may almost here, we're looking for spring-loaded stocks that could pop in a notoriously tough month for stocks. we'll talk to the analysts who called it right back in december. where does he think the stock goes from here? and amazon is one of this month's worst performers. it's also down 25% year to date, but one of our traders is defending his bullish position. it's all straight ahead on "the half." kayla, we'll see you in about 15 minutes. >> thank you, scott. twitter made a lot of headlines recently when it unveiled this, the brand-new look to the twitter profile. if you're a twitter user, you would have been prompted to change to this over the last month, but why did the social network decide to make the change? our carl quintanilla is live with some answers. hi, carl. >> hey, kayla. for those of you who maybe have
not tried the new user profile, it's one of the tools they're using here to drive engagement and user growth. you saw it on the screen there. bigger photos. more emphasis on the image. it was announced on april 8th, gone to 100% of users as of last tuesday. we talked to carolyn penner, head of product communications here at twitter headquarters, and we asked her, why now? >> so here you can see at the top you have a really big image. it gives you a lot of space to sort of creatively express yourself. and to show people what you're interested in. >> i mean, definitely come up with a new picture. >> i was going to say, you're interested in the new york stock exchange, i'm not sure, but that's my sense. and here, you have a much bigger profile photo, so people can see who you are. maybe they've met you and not sure if this is the right account for you. they'll know that because they'll be able to match your face to the picture. and kevin durant. his image is more interesting than yours. you could take a queue from him. >> yeah, of the followers, i
could take a page from that. he has a future called the pen tweet. what it is, essentially you can take any tweet you've sent over any period of time at twitter and pin it to the top of your profile page, so that it always shows at the top of your profile. >> when you announced this, it didn't take long for people to make comparisons to facebook. does that bother you, or is that part of the plan? >> you know, the profiles team sheer, and actually with every feature we introduce at twitter, they're interested in making twitter better, so they want to make it easier for people to discover what's happening, learn about users, connect with people and express themselves. so in this case with profiles, they designed some, tested them with users, put them out in the wild, got feedback, shifted to a new version, and through that cycle, we ended up with this version. so it's really -- really the focus for us is making sure that we're introducing the best f
features to twitter. >> meantime, data obviously is a big piece of the twitter story. data licensing. tracking what people tweet, and how. even in realtime. we sat down with simon rogers this morning. he's the data scientist here at twitter, and we got a cool look at what the world looks like when people start tweeting about one then in a very short period of time. in this case, it was the nba's press conference yesterday. >> this is the response to the silver press conference yesterday about sterling. we know people go to twitter to talk about events like the oscars, but when news happens -- so, for instance, that was the reaction to the -- >> that's the moment he said ban for life. >> ban for life, people responded immediately on twitter. it's something unique. a place where people can discuss the stuff where it happens. >> the conversation lingers for the rest of the press conference. >> exactly. there's a tailoff, in that peak, that spike. >> and it's not a california story. >> not a california story.
in fact, if you zoom out, you get the whole world. you can see it's spread uniformly across america, even cuba and down here. >> interesting. this next map is -- >> so this is our regular beyonce chatter. she released her album online. but you can see what happened when the album struck. this is normal. and suddenly the album's dropped and the whole world is talking about it. not just in the states, but london, instan bu istanbul, sou. >> and this is people tweeting the word sunrise as dawn spreads. and there, it's just about hit america, tweeting the word sunrise. you would have turned to your friend, what a beautiful sunrise, and you tweet it. >> all right. so you got three examples there, a sunrise, beyonce dropping her album, and the nba press conference, jon and kayla, it
sort of begs the question, how reliant is twitter on big events when it comes to building new users, and what happens in those periods where big events simply don't happen? >> and, carl, i wonder what happens when "squawk on the street" comes on with you at 9:00 in the morning? i have to believe that that would look just like beyonce, but i know they probably couldn't go into that in the short time. it is interesting, though, to see how much activity -- >> yeah, we're very big in istanbul -- >> you don't see how much activity, right? you see a relative picture of activity. we don't really know -- the bulbs are getting bigger, right, but we don't know from what size they're getting bigger. and they're relatively small. it feels as if twitter had a tie-up with a cable network, a television channel, comcast, they could leverage all the conversation and put it in a place where everybody would see it. that's really the goal of the new profile pages, is to make something that a non-log-in user can go to to see a pin tweet, to see a statement that someone is making without having to be an engaged user. >> although, jon, there are those out there trying to make
the argument, if investors are trying to get twitter to be as big as facebook and hence as profitable as facebook, that's unlikely in some people's views, because it is different. it is so short term, it is so high frequency, and it's so reliant on big things happening around the world, that people need information on in a hurry. >> it's too bad that they just can't make a full pivot into that as opposed to sitting in the middle. i think that is the issue right now. >> but we've a lot to chew on, carl. only you have the power to get so many people up, so early in the morning on the west coast. so thank you for bringing all of this to us this morning. we'll get a little bit more from you later today. carl quintanilla in san francisco. >> see you later. all week here at cnbc, we've been highlighting the top people in business over the past 25 years. cher wang may not be a household name, but her chair of htc has made her one of the most powerful women in technology. we go through her story when we
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as the co-founder of htc, cher wang is one of the most powerful women in technology. she's also ranked number 22 on cnbc's list of the top 25 people who've had the most profound influence on business over the last 25 years. josh lipton spoke with cher wang about her success and vision for htc. josh, take it away.
>> yeah, kayla, you could say cher wang's entrepreneurial spirit runs in the family. her father was a self-made billionaire who taught his daughter about the importance of hard work. wang also credits her christian faith as a source of her success. >> the bible says that humility comes before honor. and once you humble yourself, you want to learn, because there's a lot of stuff you can learn from, the surroundings, the people, and the people that are different from you. so to be able to observe, to listen, to be humble is also very important. >> now, wang co-founded htc in 1997. that company experienced rapid growth. by 2011, htc controlled 9% of the global smartphone market, and wang and her husband were the wealthiest people in taiwan, worth more than $3 billion. wang says that her mistakes in business have proved just as
instructive as her achievements. she talks about the time back in the 1980s when she sold a product to a customer who was unable to pay for the merchandise. wang says that was a valuable lesson in the importance of knowing your customer. >> to understand your customer, to actually visit them, to really understand what they need, and really observe and listen is very important. actually, these characteristics, also this type of attitude should really -- customer service should really come with your heart. >> in recent years, the company has lost market share to rivals such as samsung and apple. wang is now putting her impressive skills as a leader in and technologist to work. she tries to re-establish htc as a major player in the smartphone wars. she tells me the strategy involves diversifying the line of smartphones the company sells and increasing htc's marketing
budget. she says the company needs to do a better job of communicating with customers about the value of its products. >> to tell the truth that when you actually view it and you see it, you love it. and the only problem with us is that we haven't really communicated very well. so it is very important. this year we're going to communicate very well. >> wang is taking a more active role in the company, now overseeing marketing, operationing, and customer service, and she tells me she's now working seven days a week to get htc back on track. given wang's track record, her energy, her experience, investors shouldn't underestimate her determination to succeed. >> josh, you cannot underestimate their impact on the smartphone market. it's an important company and an important face behind that. thank you, josh. we've been talking a lot about twitter this morning but facebook is also making news, doing something it hasn't done in three years. we'll explain when "squawk on the street" comes back.
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francisco with more on that. hey, morgan. >> hey, kayla. so it may not be on today's f8 agenda here, but at facebook's developer conference, everybody's buzzing about one thing. that's facebook's long-awaited, much-anticipated new mobile add network. they even estimate that such a network could create a brand-new $3 billion revenue stream for facebook. so what exactly are we talking about here? this would likely be a network that lets marketers use facebook data to better target ads in apps and games outside of the facebook platform, and reportedly it will be called facebook audience network, or f.a.n. this would mean that facebook could generate additional revenue stream from its treasure trove of user data without crowding the facebook newsfeed, and most importantly, that's not reliant on adding more users. facebook is keeping quiet about whether this will actually be unveiled today. but what we do know is that the network is, quote, very early
stages and the company sees it as a very big opportunity. now, that's according to coo sheryl sandberg on last week's earnings call. now, we've seen similar services rolled out by rivals like google and just recently twitter. but analysts say facebook is well positioned because of its 1.28 billion active users, provide so much personal information. so we'll have to see what ceo mark zuckerberg has to say when he takes the stage a little later today. in the meantime, what he has noted is that today's f8 event, which is the first in three years, is really all about developers and helping them to make money. we'll bring you more as the event unfolds. kayla, back to you. >> thank you, morgan. jon steinberg, final thoughts? >> a big-bucks idea. if they go with the mobile ad, it drives their business, 52% comes from app-installed ads, they can drive a ton of revenue for them and publishers. very exciting. >> do you think it's three more years before the next one? >> i don't think so.
it's a different company. they had a lot to do over the course of the three years. maybe a whatsapp integration for publishers. >> we'll see. for now, that's all for "squawk on the street." it's just about noon time on the east coast. scott wapner, you have soft earnings, soft data to send out april. >> yeah, absolutely. april wipeding down, kayla. thank you so much. looking forward to what may could bring for the markets. here's today's playbook. april draws to a close, what will an often messy month mean for your money with some big events looming? hashtag plunge. with twitter suffering one of the worst days since going public, we hear from an analyst who's gotten it right on what happens now. and batting over bezos, amazon shares is one of the year's worst performers, so why is one of our traders buying? let's meet pete, john, weiss, steve grasso on the floor of the new york stock exchange, and steve liesman with the nasty gdp report, what it means for the markets. we begin with