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tv   Squawk Alley  CNBC  December 29, 2014 11:00am-12:01pm EST

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street, "squawk alley" is live. ♪ an welcome to "squawk alley." joining us for the full hour jon steinberg, the ceo of the daily mail, north america, tanned, rested and ready. good to have you back. >> kayla tausche. >> john forth out today. dow up only about 11 points, but eight straight days it's higher. if it closes at these records, nasdaq has gone within 5% of its all-time closing high that will take you back to the dotcom boom in 2000.
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s&p intraday high around 7 points or so. less than that. from 2100. sony's "the interview" a big hit over the holiday weekend generating about $15 million in on-line sales over four days of availability. according to sony, the firm was purchased or rented more than 2 million times making itted studio's number one on-line release ever. apple which had been holding out says it will make "the interview" available to buy or rent on itunes and jon called it, called it days ago, saying google should do this, arguing hackers can't take down everybody. >> everybody put it up for itunes now itunes is putting it up. netflix is in the wings. i think it's a watershed moment. only about 300 thesers have it but people will look out and say $15 million on-line, $2.8 million from theaters i think it's going to break the vod on-line comes way after theaters paradigm. this has really been an advantage moment. >> because both can coexist. >> been so successful going
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on-line right away. so much money so quickly. it's going to break the paradigm of the theaters holding out and holding back on-line for weeks and weeks. going to break the window. >> you could argue this movie enjoyed a historic publicity push. >> yeah. >> not necessarily something that they had planned, despite a pretty hefty marketing budget for the film. do you think a film that does not have the publicity intended or otherwise that "the interview" had could do what "the interview" did in sales. >> this is leading up after a lot of things have happened. snow piercer was released on itunes and did well. "krouchg tiger hidden dragon" will be launched on-line. we've seen on-line taking more and more shares from theaters already. whether it was something bound to happen or the timing coincideses or caused by this, i think it's a moment where it's going to change the way things work. >> if i'm a theater chain owner what interest would i have in doing what you suggested. >> the theater owners will not have the power anymore and movie distributors will look out, the smaller ones and then the larger
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ones, see how successful this was, able to line up all these on-line channels, how well, it worked with google play and youtube and see they have another option. >> the distributors, despite how well they may try to manage the release, stats out saying 750,000 illegal downloads by bit torn and other platforms. if you have almost half of the downloads that are happening legally also happening illegally, you have to reform that or you can say this is bulletproof. >> over time they make the way to pay easier. people have less of an ability or reason to pirate. we saw that happen to napster. napster went to itunes. people don't want to spend all the time on bit torent. you had to enter a credit card, google play account. i downloaded it first from watch the i couldn't play it on my ipad, that day it wasn't set up -- >> what about all the illegal copies, 700,000 plus and counting, right? >> yeah. but the illegal copies when
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people pirate stuff it never really hurts the core business model look at hbo password sharing. this tends to be trialing and sampling and ultimately the best marketing these methodologies can have. >> i don't -- it's odd it would take all of this, this weird confluence of circumstances, to change the model in the way you're suggesting. >> it was already coming along anyway and this will be viewed back as a tipping point, regardless of whether or not it was, it will be looked back as a moment where something went on-line first. >> i think we saved that tweet from the 22nd or something. >> chinese smartphone maker xiaomi the most valuable start-up. the company confirming a new $1.1 billion round of funding, valuing xiaomi at $46 billion. that's more than urber. kaye la has more news on this front. >> it's not just overseas investors betting op xiaomi's success, though it is those overseas investors who did
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participate in the equity round. wall street is getting involved and sources tell me the company has inked a billion dollar loan from gold man sacks, jpmorgan and morgan stanley and what this is, it's different than when other start-ups like chobani or square raise debt. usually that is a type of bond or convertible bond that is high interest, it's fairly speculative, it's an option of sorts on the company. what this is, is a syndicated loan the banks are taking on. they're usually low interest and they signal a bet that wall street really sees low risk in generating strong cash flow to hedge for xiaomi to pay it back. despite the fact that profits at this point are only slim, bankers i talked to say the fact it's profitable after four years is a hugely promising sign for this company. the fact that it's been able to get market share in what was a traditionally lock and loaded business for other giant companies in this space, this shows they can build some serious momentum. >> 500 million users.
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people forget in the uber deal and this one as well, the preference. you put $1 billion in. you have at least the right one times your money out, maybe multiple times your money out. when someone says it's a $40 billion company whether urber or xiaomi it's a bit of a misstatement in some ways. >> if uber and xiaomi came to you for capital which would you choose? >> oh, my god. that's a tough question. i don't think i would be comfortable with either one at $40 million. it depends on what stage of investor you are. if you can put that much capital at risk and looking for double digit returns over multiple years and you have to deploy a lot of capital i get it. if your a an individual investor it's risky. >> we talked apple early in the morning. interesting to see someone posing a competitive threat to apple outside the united states where they appear to have no competition. >> devastating samsung. samsung took the market share hit. look at idc, gardener report, it
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was mostly samsung that dropped from 32% to 24% while xiaomi had the run in market share and apple stayed constant between the past two quarters. >> what's a threat i think about xiaomi is the fact that it has from the get-go been an extremely low margin business. when you have a company like samsung or apple, where investors get used to pretty fat margins, they want that profit coming in, but investors in xiaomi, they know that that is the model the company is running. >> buts there's been a lot of confusion around the margin, really around 13%. some were saying they only did $56 million in profit and a lot of article say that was from one subsidiary it's $560 million in profit. 13% margins, competing to win market share and move up a little with media, maybe they get to 20 or 30%. >> tiny bit of breaking news. haven't been able to read it but got an alert that shake shack has filed an s1. this has been speculated for some time. they were in talks with bankers.
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i believe if memory serves me morgan stanley and goldman sachs working on that ipo. this is part of danny myers union square hospitality group. consumers around the world have been introduced to the burgerings, crinkle fries. we'll be looking through the s1 to bring you the news. >> first five or six pages of the s1 are photos of their various locations and even photos of just a couple burgers. if you're not in new york you probably can't appreciate the cult. >> that has investors salivating. >> danny myers, one of the most well-known executive chefs in the country and the chain that has spawned cop py cats. >> i'm sure they'll put them in supermarkets and bottled beverages and shakes as well. >> shake shack, five guys, these are among the various threats to mcdonald's business model. people want to go to the boutique burger chains than the bigger box fast food
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restaurants. >> shake shack is a modern day roadside burger stand serving a classic american menu. first few lines of the s1. finally gmail blocked in china and many are pointing fingers at the chinese government, almost all of google services have been disrupted since the summer but until late last week people still had access to gmail. fwoog spokesman addressing the issue saying we've checked and there's nothing technically wrong on our end. google closed its search engine in china in '09. you remember saying it would no longer cooperate with the country's censorship. new page? >> a multistep blocking by china. first the website was blocked and people were still able to get their gmail through imap and pop. that is shut down too. not a big story for google. google has no business in china since 2009. i can't imagine means residents and people who are citizens of china are actually using gmail knowing how volatile their acs ses could be. not a big story. that's why there's no market reaction. doesn't matter for the wise one
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of the most interesting comments i saw in reading about this was some experts and professors here in the united states say, chinese millennials who are here in the u.s. studying abroad or overseas in other countries, likely use gmail as their de facto e-mail service and if china wants their young people to come back after studying overseas this is not a good way to entice them which i thought was an interesting argument to make. >> seems a relatively minor type of thing. they could switches easily to another provider or something like that. to me the market moving type thing to think about the fact that facebook we talked about two weeks ago is aggressively considering going into china or aggressively courting the chinese. this shows you how volatile this access is. facebook could go in there. something which becomes a big business which could be shut off overnight. in the ace case of google this is not a big business for them but imagine if it was. >> you're going to be here for the hour. in the meantime the search for the missing airasia plane continues as the indonesian
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government says the search area will expand tomorrow. the big question with all the technology out there, how is it possible to completely lose track of a plane? phil lebeau joins us on the news line with more. phil, i'll tell you what, the tracking technology, unfortunately, as a result of all these disappearances over the past year has become the story in aviation. >> it has been. what's interesting is whether or not you have two incidents now, although this one is is certainly different than the malaysia airline airplane that is still missing and presumed to be somewhere in the southern indian ocean, while this is different, it does highlight the need for the next generation of airplane communication to be advanced, to be built, to be funded, by government, by airlines, by the industry, around the world. because right now, the main problem is that airlines around the world are relying on old, old radar technology and as much as we will sit here and say that
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shouldn't be the case, we have gps in our phone, we have other ways of tracking people in this day and age, that should be in every airplane. it's going to be up to airlines and government and well outside of the united states, particularly in asia, to say you know what, yes, let's pay for this, upgrade so we have the satellite technology on every plane to track every plane. >> in terms of the recovery or search for flight 8501, phil, there is some discussion that it theoretically, of course so little we know at this point, but theoretically where it disappeared is much shallower water than it was for malaysia flight 370. any sense of how quickly the search may go on? >> well, that should make it easier. theoretically you get the devices in there that can track the pinging of the black box, the cockpit voice recorder and those should be able to be tracked relatively quickly, if it's shallow water.
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again as you mentioned, this is a large area that they're searching. so you got to get relatively close before you have any picking up of the ping. >> very difficult for that. especially that part of the world. phil, good to talk to you. hope you're enjoying some vacation. see you soon. >> thanks, guys. >> phil lebeau joining us, talking about the airasia flight. >> take a look at the markets at this hour. we're still on a fairly narrow range. major averages losing steam out of the gate this morning but turning positive in just the last hour. take a look at the dow, 18,062. nasdaq up about 0.1%, still within 5% of the all-time high on that average. take a look at ibm meantime. that stock, the worst performer on the dow today. down over 1.5%. ibm is also the worst performing dow stock in 2014. it's fallen about 15% so far this year and pretty incredible to think that despite all the volatility in oil, that even the downturn in shares of chevron and exxon, carl, ibm is still
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faring worse than those companies in the dow. >> unbelievable. the worst of the year, i think. >> yeah. >> when we come back, shares of gopro down today but the stock is seeing a nice 15% gain over the last week. should you be buying or selling headed into 2015. we will talk about that in a moment. pinterest taking a page from the competition when it comes to one key area. details on what the company is doing to try to make money in the new year. finding the next nba super star by looking at his face. a facial coating expert for the milwaukee bucks tells us how he's trying to change the game this hour. s&p intraday high about 6 points from 2100. "squawk alley" is back in a minute.
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welcome to "squawk alley." we brought you the news a few minutes ago shake shack has filed for a $100 million ipo through jpmorgan and morgan stanleyp. the company saying it intends to list its shares here at the nyse under the symbol shack, sha kshk-h-a-k what it calls its stores saying it has expanded to 53 as of september 2014. that's up from 21 in 2012. they've been expanding beyond manhattan where they were founded, my hometown of atlanta just got one in november, but growth is slowing along with that growth, same shack sales as of september september 3%, down
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from 7.1%. $79 million in revenue so far in the first nine months of 2014. certainly an interesting s 1 we are still working through and we will get you more news on shack which could go public next year at the nyse. >> i like some of the risk factor s fail yours of landlord to deliver timely and we may experience a decline in the popularity of our markets that we operate as other restaurant chains have done. those are fun to read. some of the things that could go wrong. >> so far they have seen broad-based pick-up of that concept in dubai, in istanbul, in russia. they are expanding at such a clip, it will be interesting to see the international demand for the stock when it does come public. >> $81 million to $140 million, that's not same stores but solid revenue growth for, you know, a burger chain. >> true indeed. >> our next guest says the gopro heros has been hard to find in stores and on-line from retailers like best buy, target and amazon.
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stock is down today. what could this mean for the camera company. joining us this morning, michael packtore, managing director at wedbush securities has a $98 target on gopro. good to see you again. good morning. >> thanks for having me. >> does this explain what's happened to the stock in the past ten days? >> yeah. i think our channel check note got investors looking at it again and clearly it's expensive, it's trading at 40 or 50 times next year's consensus estimates and i think people think that's very rich, but i think that earnings growth is going to justify that multiple and that kind of a premium and i think you're seeing camera sales just way above their guidance. i don't think that back in october when they gave guidance they anticipated that they would sell out consistently. i checked this morning, the hero is still not available anywhere. best buy says it's available for in store pick-up and the nearest store to my zip code is 400 miles away. best buy has a handful, target
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has none, walmart has none. that low price camera is selling out. the medium priced camera is selling very well. limited inventory. the expensive one still in stock but i think with giant camera sales we've seen giant accessory attach rates and these guys are going to crush it in december and have a very good march quarter as well. >> michael, i read in your note about the accessory attach rate, it's one of the ways to solve for the much lower price, the $129 model, but there are so many generic accessories. i bought my head mount as well. how worried are you about that as impacting the attach rate? >> well, you know, there's twos types of consumers. there are brand conscious consumers and there are cost conscious consumers. you're clearly in the latter. as soon as your camera falls off your head mount you will lose it in the snow and regret that purchase. i think a lot of people perceive the quality of the gopro accessories is great. you're seeing them discounted on-line even the gopro brand, which means that the margins are
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really fat in the on-line discounters are eating the margin by offering them cheaply. i bought six gopro brand accessories for half price from amazon. so again, big fat margins for gopro and on-line retailers. i think most people don't trust the off brand accessories. it's an issue and clearly there will be imitations over time. >> michael, in your early channel checks last week, you were saying that as of the 22nd, a lot of the stores were already showing very low inventory that they might be sold out of these, but you said we had limited information about the channel and i'm wondering at what point, what you think we still need to know about the channel for gopro produ products? >> what we don't know is the mix. we don't know if gopro shipped intentionally shipped a low quantity of the $129 hero and a lot of the 399 and 499 silver
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and black to skew the mix higher. i don't know that. i do know that we talked to literally 30 best buys and they told us that they were, you know, they were getting hundreds of the low priced cameras each which implies that the sales are going to be well above the 2 million units implied at the high end. i think even there, i think they're going to ship 2.3 or 2.4 million units of cameras and i think that means 15% upside to the high end. >> do you believe they're going to have a consumer drone, mike until. >> i do. i think it's -- drone is probably the wrong word. it will be radio controlled and line of sight where drones tend to be out of sight. these will be legal like those little amateur helicopters you can buy. and it's kind of a cool concept if you can park the drone in front of the ski mountain as you ski down and get a panoramic view of yourself coming down, that's cool. i think a lot of people will want something like that. >> one of your concerns in your note you write that company will take meaningfully monetize its
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advertising revenue opportunity. in your price target, 70 times forward year '15 eps, how much advertising revenue roughly do you think they need in the out years? what do you think they need a billion dollars in advertising revenue to justify that kind of multiple? >> i would bet that number is well below $100 million in 2015 and probably well below $50 million. so a billion is not conceivable for probably four or five years. i don't see that. i don't actually think that the social media channel is as big a driver of revenue as a driver of free advertising. i think it's the foregone at spending that is more important than the ad revenue that people -- some people expect them to generate. i think this is going to be like "america's funniest home videos" via broadcast gopro cameras. they can run that channel and get people aware of the channel. they don't need to drive that much advertising revenue from it to justify the price target a. you will see estimates go up to
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well above $2 in the next year. so i think that this multiple kind of contracts. >> and does this do anything to your price target on best buy which is up almost 30% for the seconds half? >> it's the only bright spot in the best buy portfolio. some information from the national retail if federation and from mastercard the consumer electronic sales are flat, so the bet that best buy will gain share in the context of amazon is clearly gaining share pretty bad bet. i don't think the mix of 4k and large format tvs helps best buy but i think gopro sales help best buy probably at about 100 basis points of their comp but a seriously negative comp to begin with. probably down 200 basis points and that means best buy stock will go down when they report. >> michael, we will talk to you soon. happy new year. >> thank you. happy new year to you guys. >> michael patcher from wedbush.
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>> starters are trying to simply our lives and pets are no excepti exception. something that can only be described as airbnb for dogs. .
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trying to decide what to do with your pets on vacation. a few start-ups that might help you out. josh lipton live in san jose to explain. josh? >> kayla, there are 83 million dogs in the u.s. and when their owners go on vacation, they need a place to stay. traditionally that's meant going to a kennel. but now there's an alternative, called rover that connects pet owners with sitters. go on-line, find a dog sitter near you and book a reservation at their house or they can come to yours. they are now 25,000 sitters available across the u.s. and rover's ceos says every sitter is verified and reviewed. >> we only accept 15 to 30% of
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sitter applicants. so there is a really high bar to get into rover and we're really focused on maintaining that. we're pretty active about managing the marketplace if we think someone is not a great fit. >> reporter: rover makes money by taking a 15% commission from its sitters who typically charge about 30 bucks per night. the company has raised $25 million from investors such as menlo ventures. rover is not alone in this market. there's also dog vaca which has 20,000 dog sitters that raised $47 million from top investors. benchmark's bill gurley sits on its board and by the way, the service isn't just for dogs. fans have looked to rover, for example, to find sitters for their cats, pigs, horses, and even their pet shrimp. guys, back to you. >> as a cat owner, i regret that, you know, it bothers me these services are always about the dogs. you need your cat sit too. you can't leave your cat alone
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for a week. >> mental image of you with 20 cats in your house. >> someone can go to your house and feed your cat. you don't have to exercise them. >> not for a week. my cat stays with my in-laws. >> josh, thank you for that. pro vocative story. europe is about to close about now. simon hobbs here to wrap up the day. >> who would have guessed that john had a gregarious cat of tall. this rapid strong comeback despite the thin volumes in europe, the third vote in parliament in greece to gain a president has failed and therefore there will be snap elections january 25th. greece was down over 10%. see it's come back. italy has its losses. the banks fell in sympathy. in greece following that announcement around 5:00 a.m., some of the greek banks were down. perais was down over 21%. the way despite the fact that it's holiday thin trade you've come back strongly.
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for those tuning in take you to athens and show you the scene as 16 greek pms backed the prime minister's candidate. less than the votes required. you have to have the snap election. the fear the far less party will take over, they want to renegotiate the deal greece has with everybody else and might threaten some sort of exit from the your row zone. however it's different this time for two reasons. one the ecb is supporting bond yields with the threat to buy across europe and it if you look at what they're trying to do, trying to renegotiate the government debt, 80% of which, and the 80% they want to negotiate with is held by other eu institutions or governments. it's not necessarily a market factor although clearly there is some uncertainty as to whether ser reza will win moving forward. this is where we are on the greek bonds. 9.6%. the biggest movement was at the short end of citi european
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notion that the five year spreads to germany were over 100 basis points wider this morning. they believe that wider contake john is unlikely. there are a number of elections this could happen. eric shaneny over at acsa saying the worst case scenario could lead to grease defaulting and leaving the euro, but preventing contagion and self-fulfilling consequences would then be in the hands of the euro area governments in the ecb. ser reza sits across the negotiating table if it's able to win and the polls aren't sure and they know the consequences of not giving them what they want which is the haircut obviously on the debt. the only complicating factor how can the ecb have public qe and buy everyone's sovereign debt if they're not one sure one government is going to demand a haircut. that's risk and the ecb refusing to take risk through the
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program. >> answers in the new year hopefully. thank you, simon hobbs. when we come back "the interview" was a big success on-line but more for google than sony. says our next guest anyway. he will make his case. >> would you pay big money to analyze someone's face. the nba's milwaukee bucks did. the team's facial coding expert will join us live later this hour. oil is about to go negative. see if that has an impact on the market when "squawk alley" continues. about that. about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach,
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back to the news that shake shack is filing a $100 million ipo through jpmorgan, morgan stanley and a handful of other bankers. the company saying it intends to list its shares on the nyse under shak. i asked danny meyer back in june when we were celebrating the tenth apers havery of shake shack about the success of that shane and whether he would take it public or spin it off. >> i think our feeling about that is just one burger at a time. we never open a shake shack without bringing in experienced managers from one of our other shake shacks and that's what's our pace. >> nonetheless it was a question that was on analysts mind as well as his mind just a few short months later we're getting that s1 and we could see that ipo early next year. meanwhile, on demand sales of
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sony's "the interview" nearly five times that of the physical box office over the holiday weekend. what does this mean for the future of film releases? joining us is contributor jason lynch and editor of box office gentlemen thanks for being here. >> good morning. >> gatesh, start with you at post nine, when you think ate the comparison of what it did in the box office, albeit limited box office release, to what it did on demand, do you think this is a signal that this could pave the way for future on demand releases? >> i think that this is a strategy that has been used in the minor leagues a lot with smaller films but never before in the major leagues with a big studio and their back was against the wall why they did it, but i think for the major studios are not going to be doing this any time soon because their relationship with the exhibiters is so important that, you know, exhibitors are furious over how this played out. they're not going to really e th model any time soon. down the road something to think about. >> when you think about what some of the other releases of --
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over the four-day holiday period did last week "the hob bit" $54 million, "unbroken" $47.3 million even "night at the museum" did better in the box office on a widespread release than "the interview" did on demand, jason. i'm wondering if you think we still have a big gap to close in terms of actually profiting off of these internet releases? >> we absolutely do. i mean this was the moment for premium vod the studios have been waiting years for. this is opening the door a tiny crack and it's going to take years to kind of make that gap up. but this was a good first step. >> how many years do you think, reading your article this morning, i thought we agreed quite a bit, you said however long it takes premium vod to become a reality "the interview" will be seen as one of the format's early watershed moments with ticket sales down 4% for the year, 15% amongst groups 12 to 24, how long is years? >> well, i think -- as we just mentioned earlier, the exhibiters are the ones who are
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really, you know, holding up this process and it is inevitable. everybody, you know, whether it's music, whether it's books, whether it's tv, people want these things on demand and they want it now. and i do think that the exhibiters are going to get to a point, at least for some of these releases, where they're not going to be able to stop evolution, to stop change. and, you know, i think these numbers for "the interview" were positive when you consider the fact that the cable vod is not on board, apple not on board until yesterday. 2 million people were still able to seek out this film on vod without the usual suspect leading the charge. >> does it make it -- do people talk about say an imax now as having even more leverage than they had before because people will seek out, if they are going to go to a theater, they will be looking for novelty, experience? >> that's what imax and 3d offers. a first-class experience, premium experience, a major way
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for exhibiters to get bodies into seats if you can do something the small screen at home or your device or phone cannot give you, the content is the content and the one thing about things business is that the bigger films like "the hob bit" and special effects movies you want to see them in the big theater. how do you translate that to the smaller screen. certainly the younger people, young adults under 25 are leading the way. a whole generation used to getting their content on their small device right now. >> when you think about what's going through the minds of producers, content developers, writers, directors, do you think that now premium on demand is as viable a channel for project that might not have had big screen potential before? >> certainly and that has been the case with independent films for several years now. you have been seeing premium vod or day on day releases for a few years. some of them have been successful like this year. "the interview" was the first big budget film to go this route. and i think that, you know,
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certainly has a lot of potential but one of the big onfalls right now is -- downfalls is revenue. sony made $15 million the past four days but now 90 days from now when they would normally be putting "the interview" for vod, they haves lost that revenue stream right now. you're going to have to recalibrate how the movies are able to make money long term. >> now you have apple on board. >> you do have apple on board. it's odd to me. apple had a chance to be on board from the december 25th. they declined. and they're back on now, but, you know, apple has always been an innovator and now they're suddenly a follower which is an odd position for apple to be in. >> how big of a deal is this for google? eric schmidt posted on his facebook page it was available and go to youtube or google play. he doesn't usually promote many things on social media. your thoughts on that. >> he's promoting the future, something which is exclusive at that time to google and, of course, they're competing with itunes all the time. itunes is the bigger player.
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when you have this content, this front page story, this hot pop culture item on google and not on apple that's something to really brag about, at least for a couple days. between google play and youtube, they really had a lot of sales there that were able to capitalize on again without any cable vod, itunes on board and it might make consumers think google play is the way to go and not itunes. >> an early leg up for google. we'll leave the conversation there for now. jason lynch joining us from headquarters thanks to you as well. >> when we come back, pinterest looking to make money in the new year. we'll tell you how when "squawk alley" continues.
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on deck at the top of the hour, only 2 1/2 trading days left in the year and we are going to get the final plays from our team. what retailers were naughty and which were nice? holiday winners and losers from. and one stock up big as carl icahn pushes for change. jim cramer has been recommending this one for months and what are other companies he thinks should head for splitsville? he is here. it it's straight ahead on the halftime report. >> thanks so much, brian sullivan. ins case you missed it pinterest is expanding its promoted pins program after the success of the beta version the company will open all advertisers to run pins based on things such as consumer's age and location and all of that begins on new year's day. pinterest said promoted pins were shared an average of 11
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times during its beta program, which began in june. jon steinberg, i know pin strte is a company you watch closely and think the ad platform is powerful. >> let me quote joanne bradford the head of revenue. you think about what you want to do, where you want to go and what you want to buy. there is so much intent in pinterest the only thing that has more intent is google search. this will be the second most directed product out there and going to be huge. they have a long way to go. they have to first grind their way to $100 million in revenue, grind their way to a few hundred mill innen in revenue. these businesses are ground oriented in terms of the going to the agencies. no short steps. >> the early part of that quote was facebook is for friends, twitter for news and basically pinterest is for commerce. >> absolutely. they're doing the pinstitaout for businesses to learn how to buy, promote pins on pinterest. the training programs are
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effective with agencies and brands. i've always used it at every business i've been part of as well. so i think it's going to be a juggernaut. hopefully they can get to the revenue they need fast enough to justify that giant $5 billion valuation they have now. >> >> i played with it because i want to know about it but it's not my thing. too much time on twitter. >> many men's thing for that matter. 90% female demo. it's been great run for stocks, a new record for the s&p today. both the nasdaq and s&p on track for their eighth straight quarter of gains the longest streak since the late '90s. there were losers this year. morgan brennan live at the nasdaq with a closer look. good morning. >> good morning, carl. that's right. this morning we outline some of the winners in "squawk box," those included airlines, chip makers, pharma companies. now we do the flip side, the losers. we combed through the russell 1,000 for these names. topping that list of the biggest of the worst performers is cliffs natural resources.
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it's been a tough year for steel stocks, soft iron ore prices as well. there's a large structural issue going on with this company. this number could go down as far as a dollar over the next couple years. this stock has lost about 74% year to date. another loser losing close to 74%, aqua financial corps. this company one of the biggest weights has been its mortgage settlement with new york regulators that's playing out. seeing that play out in the stock as well. another name to keep an eye on, c dri sea drill. that's been the case for this name as well. it also slashed its dividend and youen see that playing out in general. oil and gas producers have been hit by this. sandrij energy, oasis petroleum losing 60% as well. back to you. >> thanks so much, morgan brennan at the nasdaq. up next, trying to draft the next nba super star, just by looking at his face. we will take a closer look at
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facial coding and see if it's really the future of sports it technology. "squawk alley" is back in a minute. l your brand new car. nobody's hurt,but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do, drive three-quarters of a car? now if you had a liberty mutual new car replacement, you'd get your whole car back. i guess they don't want you driving around on three wheels. smart. new car replacement is just one of the features that come standard with a base liberty mutual policy. and for drivers with accident forgivness,rates won't go up due to your first accident. learn more by calling switch to liberty mutual and you can save up to $423. for a free quote today,call liberty mutual insurance at
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finding the face of a franchise is a difficult task for many sports team but one team, the milwaukee bucks, is taking that phrase literally hiring a facial coding expert to help determine if players have the right emotional attributes to help the team. joining us dan hill, president
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of sensory logic that worked with the milwaukee bucks and joins us live. good to see you. >> good morning. >> how exactly are you bringing this expertise which has worked in the worlds of psychology and business, to the court with the milwaukee bucks sp. >> sure it's easy for general managers to get seduced by a player's attributes, height, speed, arm length, but the heart of the champion means you have to go to the emotional dimension. facial coding is a great tool. even a person born blind emotes the same way as your eye. this is universal. as the nba exed. as and takes players from eastern europe and south america, it goes across boundaries, language barriers, gives you a chance to really capture and quantify what's going on. what's the character, the resiliency, emotional drive of a player. >> when does that me oceanal drive over -- emotional drive overshadow the given development of a player?
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>> it's a long season. you might play injured. it's a team sport. you have to be coachable. i think it's always a balance between the two. that's the dimension. we're in a match-up bowl era. everyone has the same statistics and look at the same numbers but a new set of data and a chance to know where do i have the heart of a champion who will hang in there for me through a long season. in the end that's the key variable. lots of great players on paper who don't prove to be that champion that brings you success. >> dan, give me a practical example of how this might work. just run through a scenario. is this mostly in scouting, future players, college players or is this about whether or not you keep a player into the next season as you've considered his other statistics? wa walk me through that. >> sure. draft day is a big day, moving from the college to the pros. great point shooting but they were too happy, happy go lucky,
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didn't bear down on the details, and so they never hone their game and in the pro ranks, facing better defenders they didn't get the open shots. they really didn't have the fortitude to hang in there. i've looks at people being traded for. they've been in the league for a while, but maybe they played injured. there's questions whether their knees are holding pup up. i did work for a team where i said i wouldn't take this guy. every time he talks about his knees he's showing anxiety even though he's fine. the team overrode my suggestion, the guy played about six games, they played about 5 -- paid about $500,000 per game for the guy. not a good deal. >> back to how people use this in business. investors have used voice analysis or ex-cia agents to train them how to interview or listen to a conference call. can you do this when you see an executive present or in the rare case of reed hastings who webcasts his earnings call q&a.
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>> i'm glad you raised that. i had a large piece in "usa today" front page coverage looking at ceos and how they emote. i could tell that bill gates was going to step down even before he did. he was less engaged in the job than he had before. i have a father-in-law that ran a private equity firm, he said yeah, we can model market share, price point, operational logistic, we couldn't figure out what was the management team. what was their real drive. >> give us a big one now. what are you seeing now you want to make a call on, someone whose facial expression ceo or major executive isn't showing us something some. >> i don't know if i have an answer for you. i would still say that bezos is really, you know, very driven guy. i see very high levels of emoting for him. you know, he's got a lot of dreams he's going to keep pushing them. >> for the bucs, dan, obviously famed financiers like mark and
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wes, don't buy a team like that to not get a return, how long do you think they're willing to let the strategy play out to see if it works. >> they're doing well this season. they've taken themselves from the cellar to a .500 level team. parker may be rookie of the year possibly. i like a lot of the pieces they have in the puzzle. so it's their choice. but couple years, will get give them a good sense of whether they're making the right move. >> we will see if that proves to be true, but dan, a fascinating topic. >> thank you very much. >> dan hill of sensory logic. >> when we come back a lot more on shake shack filing for an ipo at the nyse. with the dow up 6 points. back in a minute. i take prilosec otc each morning for my frequent heartburn. because it gives me... zero heartburn!
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if the rest of the year is anything like this, it's going to be a slow climb higher. the dow not giving up anything, sill up about 6 points and the s&p gets closer to 2100 if people want to buy things like chipotle which if it closed right now it would have the highest close ever on the same day shake shack closes for an ipo. >> the eighth straight gain, the longest run for that average since march 2013. the s&p 500 and nasdaq are on
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pace for their eighth straight quarter of gains that hasn't happened since the late '90s. >> back to october thought we would be sitting here now after what went on in october no way. >> ebola a big scare. three years of double-digit gains for the s&p haven't done that sinces the '90s. over to headquarters brian sullivan and the half. all right. thanks a lot, carl. everybody, welcome to the halftime report. i am brian sullivan in for scott today. meets the starting lineup. john najarian, co-founder of option munster, steve weiss, managing partner of short hills capital, josh brown joins us from florida because warmth and mike san tilly, columnist for yahoo! finance. we are close to the finish line of what's been a huge year for stocks. 2 1/2 trading days left in the year. those are the trading hours, not all the hours, just the


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