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tv   Squawk Alley  CNBC  October 7, 2015 11:00am-12:01pm EDT

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♪ welcome to "squawk alley." welcome to the summit. "new york times" columnist nick vilton with us as always kayla townsend. john is giving us a fascinating inside look at amazon's plan for the cloud business. amazon web serve is the conference in las vegas. john is live where he spoke to the head of web services andy jassey this morning. john, good morning to you. >> good morning, carl. yeah, it's kind of amazing. when you think about the scale
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of amazon's cloud business, we don't talk about the details of that often, but i was remind odd a trailing 12-month basis, this has been in $7 billion growing more than 80% year-over-year. i asked him, why not spin it off? i mean, it's clearly not cutting into coram zon. it's so separate that netflix actually runs on amazon's cloud. even though amazon prime instant video also runs on amazon's cloud. he said we're not looking to spin it off. i asked why not? here's what he said. >> there just hasn't been an impetus to do so. to date it's -- we got a lot of value as being part of amazon. one of our largest customers is amazon the retailer.
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>> this always comes up because not only do you have tyist investors, but, you know, we saw it with ebay, pay pal, with google alphabet. different methods of showing people how different segments of the business are doing. some of the spinoffs, some not. you seem to be saying that despite the separate nature of the business, it's -- >> we thought it was the right way to give people visibility into the business, but we don't have current plans to spin it off. >> this is the first time we have heard directly from andy jasy going in depth on the cloud business for amazon on tv. a couple of things struck me. one, the scope of amazon's ambitions is well beyond just the web. i mean, they're looking to take on all of enterprise technology from what it sounds like. big players like your oracle's
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need to continue to watch their backs. also, i asked him about acquisitions. he said they haven't been too inquisitive up to this point, but didn't count out the possibility that they might make a big move in the future. carl. >> completely fascinating look at a part of the business that everyone wants to know more about. our thanks to you. john ford in las vegas. nick bilton, it begs the question if we should be thinking of amazon as a retailer or a cloud player first. which is it? >> both. one of the things that's really interesting about the cloud services is that they're preparing for something that's going to be actually bigger than all of their products now in the cloud it service, and that's -- all these companies are completely aware of this. you're going to have billions of products and services and device that is will be connected the cloud, and i think amazon is acutely aware that that's going to be a big part of their business, and they're getting ready to grow that, and they don't want microsoft or or abbing alor anyone else to take that from them. i they it's really -- i think it's really going to be a huge
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thing in the next couple of years, and they know that too. >> yes, they're getting capital from amazon, and they started to break out the results. there wasn't really a meety argument for why not. >> well, i don't think that there's a reason to yet. there may be in the future. you know, it is a huge company within amazon, and it's going to continue to grow, but i don't personally see why they need to yet. i think what's really fascinating is the amount of reliance on this product from
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both within amazon and externally, and i think they a lot of things to solve. there's a lot of concerns about security. there's a lot of concerns about, you know, when amazon web services goes down. pretty much the entire internet goes down. you can't watch netflix or access your nest, go to amazon. i think they're going to have to solve those problems before they spin something out and make it into its own business. >> wrau. we've been through those episodes where netflix is down on a christmas eve, and we hear from amazon web services the next day. it does -- i mean, for those who have watched amazon for a long time, though, nick, it's the same old playbook of relentless plies price cuts, relentless grabbing for share, the promise of incremental margin growth and profitability down the road. >> jeff basos has said it's the goal to get to zero. it's the same -- i don't know how they do that. i guess you can give data away for free. you can give storage away fo for free.
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that's their plan. it's the same thing. they're going to try to get as much customers as they can. they're going to continue to grow their market share. they'll continue to chippewa at their competitors that are not trying to get to zero that are trying to make money, and then maybe they'll figure out how to charge people then. it's the same playbook, the same thing that amazon has always done. >> yeah. bedevilling the likes of google and ibm and a lot more. next up this morning, nick, it's twitter. saudi prince wallid and his investment company kingdom holding doubling their stake in the company. together they own more than 5% of twitter now. it's 35 million shares. it's more than jack dorsey who owns almost 22 million shares. you understand the history between the company and the prince pretty well, nick. what do you think is behind his thinking? >> i don't know, actually. i think maybe he actually has been swayed. you remember when twitter was doing the ceo search, the prince came out and said, you know, that he doesn't want someone in there that will be running
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twilter and square. now we have someone in there that's running two companies, twitter and square, and he went off and bought all these shares. you know, maybe he knows something we don't know. maybe wills just a huge amount of confidence he has in jack dorsey or the company. >> it was novel that insiders were not just selling, but they were buying more shares going into the ipo. two years later they should have an environment where insiders should be able to sell stock. what do you think it says that people are having to double down to inspire confidence? >> well, i think that there's, you know -- people are looking at what the stock was. it was the valuation right after the ipo popped up to a little
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over $40 billion. in august of this year the valuation was down to 16.5. that is a huge, huge drop. anyone that bought at that price is not going to make their money back on their investment for quite a while. i think that there are people that are buying low to try to even out a little bit, and i think that there are people that are hoping that this time, you know, the company will be able to turn it around. what i think is really fascinating is in the history of twitter, there's never been a time that jack dorsey has had complete control over that company. it's always had some sort of interference from the board or he has been on the board interfering with the current ceo, which was dick. for me this is the final true test of whether twitter can make it, and that's it. it's just what it comes down to. >> finally, nick, we've gotten some reviews on moments. we talked to chris sacca yesterday. he likes it. he thinks it's video-based. advertisers will like it.
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>> moments he is really fascinating. it's a great product. it is -- it's something that people have been looking for. they want a more period experience. people come to twitter and they don't know where to go. the challenges you have apple news. you have facebook focussing on news. you have all these news app on your device. what is going to make moments different. i'm not sure if i've seen that yet. i think it's a really neat product, and i think that having human curators is going to be key to this. the goal is to get the 90% of people that are on twitter that don't tweet to start using the product, and i think this is a step in that direction. >> nick, good to see you. have fun at the summit. sounds like a blast. nick bilton, the "new york times". >> pure storage was the biggest venture-backed tech ipo this we're. it is trading down slightly
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4.3%. ceo scott deeson this morning told cnbc, he called it a sideways market for ipo's and said the goop good companies will still find investors and that for pure storage, the transparency of being public was important for its clientele. that's why he said they went out as a public company when they did. it is in good company, though. a majority of companies going public this year are trading below their ipo price. the average return is down 4.2%. pretty much exactly how pure storage is trading. >> we had over five ipo's. there were 11 scheduled. there were a lot that chose to delay. of the 11 on tap for this week, we have one that's already
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pulled out, and that is digi sell. it's a telecom company, and during the global road show, the company saw tepid demand for its emerging market assets. according to the company's chairman and majority owner decided to wait. >> we didn't hit our price target, so we decided, well, we don't hit our price target, we're not going to sell our shares. why would you sell your front garden when you know it's worth a lot of money? >> of course, he is in a different boat, carl, because they don't have any pressures to go public. they're not first data. they're not albertson's with private equity owners, expensive debt to pay down. of course, those two are coming to the market next week. large cap companies, they may have to offer at a discount to get investors to buy in. >> pressure. where is our exit? we want our exit. >> exactly. let's get a check on the broader market right now, which is still hanging in there. the dow up by just about 19 points. most of the early day gains evaporating.
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we are also watching shares of young brands getting hammered after earnings and revenue came in below expectations. down 19%. carl, of course, china, the big story. despite the fact that kfc and taco bell, same store sales, came in better than expected across the board. >> pizza hut apparently the problem over there, which i found interesting. we'll talk more about that later on. when we come back, he was rated the number one analyst in 2015 by institutional investor from burnstein. he will give us the top picks. for a good read on iphone sales, check out four square. ceo dennis crowley will join us to explain why, and he is a legend in hollywood working on projects like a beautiful mind and arrested development. oscar winning producer brian grazer will join us live. don't go away. icine icine without checking the side effects. hey honey. huh. the good news is my hypertension is gone. so why would you invest without checking brokercheck? check your broker with brokercheck.
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institutional investors is out with its annual list of the top sell side analysts today. number one in his category this year, carlos kershner, analyst at bernstein, who joins us now. carlos, first of all, congratulations, and thanks for joining us. >> thanks for having me. thank you. >> you are a former consultant in the tech and telecom space. you know your way around a balance sheet. what is your take on the strength of u.s. tech and internet companies right now? are we driven by real earnings, or is this still a momentum market? >> well, i think certainly the large well-established internet companies are highly profitable.
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have strong balance sheets. some have lots of excess cash. i don't think it's momentum. i think we're seeing many of them have real earnings power. >> but what seems to be the wild card are two things. number one, users and how some of these companies are able to grow the people who are using its product on a monthly basis or perhaps subscribing to something like prime and then you have expenses, which have just been earnings killers. how do you go about predicting the affects that those two metrics will have on a company stock? >> for most internet companies i think the top line growth is most important. that said, investors have usually underestimated how much of the investment is discretionary and how much control they have. for a company like google, again, top line ease.
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particularly in search and google on sides is the main driver. margins, a lot is skraergs. it's hard to predict. do you give the company credit for investments they are making or not? how much credit do you give when you think about the value of the enterprise? >> you make this argument. your notes a lot about chess, which is a fascinating parallel. the idea that the likelihood of the billions and billions of cap x and innovation failing them given what they have already done, you think it's a slim possibility. >> i think take a company like google. the note you refer to is a google note. they have, by far, the largest most distinct computing and communications infrastructure in the world. they are probably better off -- they are among the top if not the top entity in the world when it comes to computer science capabl capabilities and knowledge. they have a tremendous business. they have taken youtube, which
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was a small acquisition, and it's now one of the largest media companies in the world. you see some of the new products that they're rolling out based on machine learning and a.i. that are just the tip of the iceberg of what the company can do, and investors want to punish them for margin compression. generally they do not give a lot of credit for what the future can bring. in part, to be fair, because google is not very good in communicating that future and, two, because there's very low visibility. i think it's important when you think about investing for the long-term to ask the question, this company that spent $10 billion on a basis last year and is on its way next year to spend $15 or 20, do you think they're going to come up with new value streams and revenue streams? i think the likelihood is very high, and i do not believe that that up side is reflected in the stock. >> if you had to buy google, netflix, or amazon right here, given how much each of these companies has risen this year, what's your top pick? >> google. >> google. all right. we'll leave it there.
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we'll have you back. we'll talk more about it. carlos kershner from bernstein. we appreciate it. >> we have a news alert on swret.com, and we'll go back to hq and court any reagan. >> just 11 weeks into operation, and jet.com is already rolling back its $50 annual membership fee. in a blog post by founder mark laurie, he says the response so far has actually been better than he expected, saying the average number of units per order is twice what they had expected. they're rolling back, cutting out that $50 membership fee that had been free for the first several months, so if you were one of those customers to sign up for jet in the beginning, you would begin to start paying soon. now you will no longer have to pay a fee. very interesting, though, because that was one of the key paths to profitability for the company when founder mark laurie discussed how they would become profitable right here on cnbc. kayla. >> yeah. interesting. seems pretty bizarre to think about its business model in
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light of that rolling away that fee. we'll see how that plays out. courtney reagan, thanks. >> wonder what bazos is thinking now about his former proet swra. >> that's a race to zero. >> we're currently up ownered 19 after that oil inventory comes in with the bill. a little bigger than we expected. bearish for crude, which is almost back to the flat line as well. >> when we come back, rack space is making a major deal with amazon as its business model continues to move towards the cloud. the ceo will join our john fort from vegas when we return. you pay your car insurance
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for all the confidence you need. td ameritrade. you got this. >> the cloud is expanding. among the partners announced yesterday major enterprise cloud for rack space that provides support and security to amazon web services customers and also become an aws reseller. here's what amazon senior vp abandonee jassy told us about the deal. >> there's a high need for
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enterprises to have systems integrators and partners. both help them do the migration as well as once the migration is complete, to be able to do the managed services and i think rack space is one of several system integrator partners that we have that are really good at manage aing top of the infrastructure. we expect there's a robust business there too. >> let's get back to our own john fort in vegas where he has joined exclusive i feel now by taylor rhodes, rackspace ceo. >> how big is the market opportunity? how do you measure it? >> great question. if you just do some envelope math, amazon they're $7 billion plus growing at 81%. if they maintained a simpler growth trajectory in three years or so, they'll have $20 billion to $30 billion business. very high growth. historically it services has splitted into do it yourself as well as managed services models.
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historically the market is somewhere between a quarter and a half of people who want help, making the technology more valuable for them. we think this is a very big market opportunity. we are the leader in managed services around cloud models. it's a large market and growing very quickly. >> it should be high margin, right? how much of that high margin business since you don't have to make the capital outlay yourself, do you think rackspace can grab? what's going to determine how much you bet? >> i think ultimately last time we chatted we talked about the main its stream market moving quickly to cloud. what you heard mr. jass wr talk about yesterday is that enterprises are now out of excuses. they want to get into cloud models, but they're constrained by having the right partners that can help them get there and run it effectively and add value to it. we see the adoption we talked about last time even increasing at greater pace, and so that really fuels our opportunity here because this partnership, you know, sort of unionitis the leader, recognized leader in managed leader for cloud and the recognized leader in public cloud platforms and bringing those two together will be compelling. >> it's not just amazon that
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you'll be working with. managing cloud should be working with microsoft as you are also with google, with open stack as well. how much room do you think some of those other platforms have to catch up with amazon? you take a look at the magic quadrant. amazon is well ahead, but microsoft and google are a little bit behind. what do you think? what's going to take for them to catch up, if it's possible in. >> i think first the data shows it's a multi-cloud world. you know, today most of i.t. still runs on the corporate data center, but it is i.t. that is diverse. all applications are not created equal. some has been developed for the microsoft technology stack. some are greenfield apps where aws is leading today. we think over the next ten years this shift down to traditional i.t. model intuz the cloud will create space. it's going to be a multi-cloud world. when we talk to cio's and cto's, they're looking for a diverse portfolios because not all their applications are created equal. we think there's room for microsoft to compete. we think google has great technology and will compete as
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well. clearly, aws is the frontrunner today. they have taken the lion's share to date. we think this is a great opportunity for us to participate in that market leadership. >> why won't the traditional southwests providers crowd you out of this market? >> it's just a different business model. excentra focus on business consulting and publication replatforming. we help to run, operate, and secure and manage those environments. they want to play in a different part of the market. we often partner with those s.i.'s because we have a complimentary business model to them. >> is this a new major business model for you? it seems attractive, the idea of having to put up that kind of capital investment. are you going to invest less in capital and more in this kind of thing? >> think about our heritage. our strategy has been built on two things. one, when we call fanatical sport. the second element has always been doing that on the world's leading technologies and providing that choice. the way this is consistent is that this is adding the world's leading cloud platform to our portfolio. the way it's different is it is
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a capital light model for us. when we think about operating this for our customers, it's clearly amazon's infrastructure, and it's rackspace's value and product development around it. capital light, different margin profile for us. it will take some time for this to get big enough to move the needle on the overall economic structure. >> certainly interesting strategic move. taylor rhodes, ceo of rackspace. >> very cool. in the meantime, dow has blown 173 point lead and then some. >> a net weighted out tip intoing negative territory, and the oils -- the oil majors have held this market up really for four sessions of gains, through much of the session. as you see, it's eroding towards the end, led presumably by what's happening here. morgan stanley has an important note it boo with appear for price action saying it's time to buy emerging markets and commodities. morgan stanley thinks that the kicker in the fourth quarter will be good news from china on
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the policy front and also on the economic front. that's what they think that will reinvigorate the emerging markets and challenge the consensus overweight that has overmarket and defenses. they're going overweight on the materials and many of the miners, and those stocks today have gained during the course of the european session as you can see. the other area is automotive area. the automotives have also done well. you have the supervisory meeting for volkswagen. the chairman has confirmed. they're going to start around the world january. of course, on capitol hill tomorrow, the sparks will be flying then. then you see the other automotive sectors doing well on the session overall. volkswagen, incidentally, that's the third day of gains. presumed to buy by barron burg bank in germany. a lot of the airlines are down. not sure if that's a reaction to
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oil. i can't see any other news flow that in particular would have been for those down with carnival, the big cruise operator, and, of course, the other big news is the s.a.b. miller has gone public on the deal that was offered by anbev or ab inbev of $10 4 billion. they can't get the columbian sanity wroe domingo family on board. they say it substantially undervalues the business, as you might expect. these guys right back doing a deal unwinding two of the brewing operations, the net of that, heineken. there's a lot of other asset sales that will occur around the world. not least in this country or for this country. that's news for another day. guys, back to you. >> simon, thanks very much. simon hobbs. getting the latest iphone sales estimates from four swear. it's a new program that dennis crowley is pushing. he will join us to explain. s&p was close to 2,000. now 1,976.
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i'm sue herrera. here's your cnbc news update at this hour. house speaker john boehner says discussions are underway to deal with the november 5th deadline to raise the federal debt limit. no decisions have been made. he 345id the remarks at a news conference earlier this morning. the faa is taking new steps to accommodate advanced drone technology that is widely viewed
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as necessary for package delivery. at a house aviation subcommittee hearing, an agency official said it and industry players have demonstrated technology that would enable drones to detect and avoid aircraft. the super pact urging joe biden to are run for president, releasing its first ad. it uses audio clips of biden talking about his family and a car crash that killed his wife and daughter in 1972. in the end it ends by saying run joe run. a woman who lost her student id has been found. this after tom hanks tweeted the photo of the card after find it in central park. lauren whitmore says if hanks wants to return it, she surely would be willing to get it. that's the story. that's the cnbc news update this hour. back to "squawk alley" and carl. >> maybe they can monotize the lost and found element of twitter. thank you, sue. the start of the crown user, the mayor of their local coffee
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shop and restaurant is now putting all that information to use in a new way. look at this video. four square used its data to predict a number that many on wall street were closely watching. that's the number of new i phones sold in the first weekend. how does this predicted data work? here to explain it, ceo dennis crowley joins us and the company's coo jeff glick. seems like a natural for what you do. tell us about how the iphone deal went down. jeff. >> right. well, we took a look at the data from china to the u.s. and 100 more companies, and it turns out that walking into an apple store is a pretty good barometer of interest in buying an iphone. wall street had it closer to -- >> basically the topic -- and
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you guys ended up being right. do you sell this as a service? >> sure. everyone knows us for these two consumer apps, four square and forum. the big thing we've been working on this year is how do we package the data insights we're getting from those two apps and sell them back to businesses and enterprises? we just launched a product called place insights, and that's related to the things that jeff was just talking about. we have an ad platform that we built called pinpoint that allows marketers and advertisers to target people based on where their phones have been in the real world. >> what data is used to develop these insights, for people that aren't familiar with this suite of products you have? does it require an actual check-in by a user to then figure out exactly how you can extrapolate from that? >> that's a really great question. that's one we get all the time. we still are getting millions of check-ins every day from users, but what we've been working on the last couple of years is a piece of technology that we call pilgrim. that's baked into four square and format. do they go into coffee shops?
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how long do they stay there? where do they go next? do they go to a clothing store or bookstore? just by having this piece of technology in these apps, we can understand the way that phones move through the real world. >> as retailing migrates over the long-term. >> the case is that 93% of consumer spending happens off line. e-commerce is 7%. while you can get data sources about how e-commerce is trending, no one is really brought to the equities markets or financial markets, insight into the 93% is trending. this sort of picture, the world's largest panel effectively enough, foot traffic, is our user base. millions and millions of people going to 65 million different businesses and that gives a great insight into how this 90% of the economy is trending. >> wee i don't understand apple and the biggest company in the economy, how could small businesses use this data to drive sales, for instance? >> yeah. a lot of what we've been thinking about is how do we give
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it -- how do we leverage it for big brands, big retailers? how can financial institutions, how can folks getting small business loans, and how can folks looking to visit a new retail establishment in a crowded neighborhood, how can they benefit from the information we have about the ways that people are moving through the streets and neighborhoods, moving in and out of these places to help them make smarter business decision? >> is there anything about -- the fact that it's four square users supplying the data, does that give any statistical quirks, or is it still a view of how americans are moving around in general? >> we look at that and we have ways to adjust the panel, but we have people from all over the world and over 100 countries and all ages, and so we're able to do some adjustments to more closely match the population. whether it's twitter data that many hedge funds are starting to look at or other social data, there may be a tiny amount of bias in it, but it's proving
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time and again that where millenials and people in their 20s, 30s, and 40z is going is a good indicator of sales. >> that's all people care about anyway. >> and starting to have more disposable income too. since this does rely on users, what's the strategy to grow users, to make sure that you have a captive audience that's continuing to supply data for your end business? >> a big part of it has been investing in the computer apps. four square has been better than ever. swarmat has had the biggest day ever last saturday. one of the things you might see us doing, we're using our location technology to power the go and location features and other apps, such as twitter and pinterest. when apps are using 90,000 are the developers that are using our platform. when folks are using the -- building on top of the four square problem, we're able to listen in on some of the sigma, and that's our understanding of the real world that much smarter as well. >> i can't wait for the next example. you'll come back next time. there's a big market moving event like this.
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>> absolutely. >> jeff. thank you, guys. good to see both of you. >> thank you. coming up, a legend in the entertainment business, brian grazer, will join us live. first, rick santelli, what are you watching today? >> you know the old adage, kayla, time heals all wounds? it's a good adage, but i think it's for everyday life, for the private sector. for the economy. time heals all wounds. for housing, time heals all wounds. sometimes wounds created by government, well, time repeels healing of all wounds. what does that mean? back after the break.
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coming up on the halftime report, mr. wonderful himself is here. shark tank's kevin o'leary opines that everything from stocks to twitter, even to fantasy sports. he is your guest all hour. plus, the best of the best. the number one tech analyst on the street gives us his best three plays right now. citigroup goes shopping. the firm out with their best ideas in retail. all of that, plus me coming up in a few minutes. see you there. >> wow. >> saving the best for last. >> oh, yeah. >> see you soon, brian sullivan. let's get to the cme group. rick santelli with "the santelli exchange." rick. >> hello, carl. my biggest love is the markets. markets are -- they embody so much of what america stands for. free markets, open, transparent markets, price discovery, aggregate behavior. want one individual gets to make
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all the rules. but times have changed. just consider that adage time heals all wounds. i've said it 1,000 times. the government found seven year and ticking cure for a two-year flu. i know that ben bernanke oosh janet yellen and many economists saying the notion of what was done during the post-crisis times saved the world. maybe. maybe we just stretched out the pain. maybe we're swrap knees-like in that endeavor. time heals all wounds in real life. why? because real life you have to adjust. governments don't adjust. i had senator corker on today. he wasn't pleased about the activity of trying to reform the gse's. when it comes to government, time repeels all healing. it's engrained. the notion now of taxpayer backed government sponsored
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enterprises doing upwards of -- statistic in terms of guaranteed mortgage activity. crowding out their girth. their economies of scale just absolutely impossible. think about all of it. zero interest raits rate policy. it becomes engrained. businesses adjust. it isn't about whether the fed wants to recalibrate to more normalized rates. maybe it's lower. it isn't a question necessarily of direction. it's a direction of the market price discovery ending up with the rate versus the scale of the way rates are now.
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in the he wanted this is the most base of human behavior. accommodation is not good for change or repealing some of the wounds of the past. carl, back to you. >> rick santelli in chicago. rick, we'll see you in a little while. cnbc's andrew ross sorkin is at the "vanity fair" summit talking to some of the biggest names in media and business. right now he is sitting down with academy award winning producer brian grazer for a first on cnbc interview. hey, an true. >> hey, carl. thanks for tossing it over here. it's great to see you. brian grazer is here. talk about big names, by the way. you're going to be spending time on stage doing what i do, but you're going to be moderating. >> exactly. >> where he. >> and with johnny of apple. >> they're the two biggest people, i think. super excited. >> i want to get to what you
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want to talk with. in the media landscape, we're here with all sort of big wigs, and everybody is trying to figure out the winners and loseers and all these different platforms and film companies, and i just wonder as a producer, as a creator whether it matters anymore, whether you still look at one or the other as bigger and better. >> i don't look at one or the other as bigger and better, but there are certain platforms that are much -- the show or movie that you are trying to make. compatibility matters. on the level that people used to feel like in the 1980s and 1990s, and the early 2000s as it has to be seen on this convenient. those screens don't matter anymore. the screens don't matter. it doesn't matter whether it's cable, network, short form. it's ultimately about compatibility, scaleability, sexy hooks, and having content that is qualitatively better than other shows. >> we talked about compensation.
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from an artist perspective move back towards the artist now. sfroo four or five years it shifted from -- artists it was an excuse for the entertainment company to take compensation to artists, createors. now because we're seeing that the platforms are less important, but the shows themselves that are created by artists are the most important, and it's appointment viewing, either by movie or television show. it's the artist and the show, so compensation is shifting back to name brand artists. >> you made your name, of course, originally in movies, but now with "empire" and other tv projects, do you care about whether you are doing tv? do you like one more than the other? is there a cycle where the golden age of tv, is it ever going to come back to the movie business? >> i think -- you know, we were talking about this ahead of
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time, and i was going to say no, but i think it might because the movie business right now, the business paradigm is pretty biforcated in that they want to make under $20 million high concept movies, dramas and comedies, or big event films. the middle, like doing "the beautiful mind" or "a king's speech" character-driven movies that can be explosive, have now dropped out. they're now coming back. i think it's going to cycle back into those. the television shows that are really working are very character-driven just like the movies of how ashby and billy friedman of the masters. those masters are now going to television, and they're becoming character-driven shows. what's going to happen is movies are going to jump to that, and they're going to draw those master filmmakers and other filmmakers that want to make character driven material back to movies.
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that's my prediction. >> what is it about "empire" that people love so much? >> it's character-driven. >> did you know it from moment one. >> no. >> did you think it was going to happen? >> no. i thought it was good, and it had interesting ingredients, and it was built on kind of classic paradigm -- a classic mythology. it was king leer and then in the world of hip-hop. in the world of hip-hop is a pretty big world. it's not a subculture. it's the culture. i just didn't know how -- we didn't know how juicy it was going to be. that it was going to be an addictive in the meantime soap opera like "dynasty." predominantly african-american living in a really glamorous world. no one knew that jesse could be that great a singer. no one knew that cookie could be that insane. you know, like really kick it out and do exciting stuff. a lot of it is unpredictability. whatever the art form is, whatever the form is or platform, if you can create mysteries that are
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unpredictable, people get -- >> do you care where people watch it? does it bother that people will be watching on their phone? >> i don't care. believe me, five years ago what it used to be is the overnight. you want to know if n your television show, first thing in the morning, how did it do? now it's live plus three. life plus seven. they don't care. nobody cares anymore. it's just about when is it seen and if is it seen? >> we have to go. 30 seconds. you wrote this book "a curious mind." most curious conversation you have ever met. you do have the curious mind. >> princess di. i loved meeting princess di. very unpredictable. took three years. i got her to share a bowl of ice cream with me. basically we were at a big black tie dinner. i said i need some -- can i have some ice cream. she said yes. unlike everybody else. i got her scoop after scoop. like a date. it was fantastic. >> one and only brian grazer. good luck. let's send it back to the east
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coast for now. >> thanks. andrew sorkin with brian grazer, character in his own right. up next, go pro shares falling hard today. we'll take a closer look when "squawk alley" returns.
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interesting action on go protoday. let's get a market flash. >> go pro hitting an all-time low. down about 8% as morgan stanley nearing half their 12-month price target. weak sales of the hero four
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session are an indication of future disappointments. the analyst cutting gopro's price target to $35 from $62 and reiterated an equal weight rating. shares, by the way, down about 55% this year. carl. >> all right. we'll keep our eye on that. when we come back, why there might be a lot more twitter jokes on the next season of hbo's "silicon valley" when "squawk alley" comes right back. important than your health.
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former twitter ceo is on to his next gig. he is the newest consultant on "silicon valley." costolo is in the writer's room. he used to be ab improv comic. he probably still does these days too. >> he has a lot of expertise to lend to that show on that front. >> we thought the plot lines were already too realist wreck. >> in the meantime, we continue to look at the rally that has been essentially erased after oil inventories came in a little bear i objectish with a bigger built than expected. go pro, the stock, all-time low. this price target cut over at morgan stanley.
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is breathtaking. they were at 62. now down to 35. sees a disappointing season as a harbinger of future disappointments. >> it's an important holiday quarter going for the company. it's getting close to the $24 ipo price from 2014. didn't think we would be saying that about a go pro, which is down 70% this year. we should also look at tesla. that's down sharply today. move to the sidelines. keep some is powder dry. very few near-term positive catalysts. especially with the model x already out. >> of course, comes a day after morgan stanley cut their target. they're still more bullish than bear. theiring target coming down to 450. i was interested to hear that jay leno, which has a new show "jay leno garage" got a model s because he thought it's an interesting variation on auto technology, and in his words, some in swaz superior to the existing auto tech. >> he is probably a little bit
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more knowledgeable about cars. >> than just about any human alive. >> where he. >> that's it for us here. brian sullivan will take over the half back at hq. let's get to brian. ♪ some kind of wonderful ♪ she's some kind of wonderful >> let's get -- here's the band. josh brown on drums, john and pete on pan flutes. >> oh, come on, man. >> mr. wonderful, kevin o'leary, is a -- chairman of o shares and all-around huggable guy. welcome to the halftime report. i am brian sullivan in for scott walker doing his civil duty today. well, your game plan today looks like this. for whom the taco bell holds. forgive had he. trouble in china hitting young brands hard. find out whether our panel is buying today's double digit drop. top of

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