tv Squawk Alley CNBC November 3, 2015 11:00am-12:01pm EST
good morning. 8:00 a.m. at activision head waters, and it's 11:00 a.m. on "squawk alley." >> good tuesday morning. kayla live at the "new york times" dealable conference in new york city. here at post nine for the hour. sarah eisen is joining us, and dan rosen -- the president and ceo -- the former coo atta hue.
it's great to see this morning. >> always a pleasure. >> first up, netflix ceo reid hastings speaking at the conference today, and, man, did he come to play. kayla has the highlights on that. hey, kayla. >> hey, carl. wide-ranging conversation between andrew ross sorkin and the ceo of netflix talking about staying power. how netflix faced with bumpy growth and employee culture that has had to evolve along with it. he said he needs to be able to tolerate chaos. any company needs to be able to tolerate chaos to be able to build for the long-term. he says in the meantime it's not productive to focus on the market. here's what he said. >> you're dead if you do that as management. if you start trying to manage the short-term stock price, you're chasing your tail. the key in management is you got to have your stable, long-term successful picture and motivate people both employees, investors
towards that picture. >> it's reallytively ease where i to say that, though, when your stock price doubles despite the fact that you are barely profitable, you are running negative free cash flow, and you have a slew of competitors coming out to play. he said it's important to build a dna within the company siting netflix's expense policy and the new policy of unlimited parental leave as a way to motivate your employees, and also help withstand losing them to competitors and making sure that you build products that compete against your competitors. speaking of one of those, he says hulu is not only a competitor, it's a successful one, but that their models are slightly different. whereas hulu is peegt with day after content from the big networks, netflix is necessarily going into original content. finally, speaking of cannibalization, hastings said don't worry about wireless or about broadband. eventually killing cable. that the pipes laid underground are entirely too powerful.
they are not going away any time soon, and that they will remain the backbone of media, despite how much the landscape is changing. certainly an interesting conversation and a lot more to come from the dealable conference, guys. >> the afternoon line-up is just as strong as the morning's, kayla, thank you for that. we'll come back to you. >> interesting course in management theory. >> when you are in the business of destruction, recreation, invention, at some point when your company gets to scale, somebody is going to do that to you. the difficulty with some of the companies that we've talked about in the past, like hp and others is they never invested in their future, and people like reid are understanding that if you don't constantly invest and constantly did hes rupt other people, that you can lose the entire franchise. he is right. you know, there's 2%
unemployment in silicon valley. you need to treat your employees well. >> do you offer an unlimited parental leaf? >> we have expanded it. we offer it for parents of any kind. unlimited vacation days, which we did that years ago before others did it, before linkedin did it. we are a much smaller company, and we offer parents the opportunity to take extended leave and all paid extended leave because it's important that you engage with your family. i mean, like i said, we need to keep these people happy. i'm a father of two daughters, and i would have welcomed it back in the day. we welcome it now. >> we're going to continue this in a moment. in the meantime, we're getting toyota crossing. let's get to phil lebeau really killing here. phil. >> beginning, toy oit up much more than people were expecting. an increase of 13% last month. you combine that with gm being up over expectations, and it's ease where i to see where why
general motors has hand increase in sales for 18.2 million for the month of october. back to you. >> amazing month. a major deal in gaming. making games like call of duty agreeing to pay king 5.9 billion dollars. >> also, attracting women to game issing an important part of our strategy, and with king 60% of the odd wrens is female. that's a great expansion opportunity for us, and they're in 196 countries around the world. >> is this expensive snl i think you said it was going to be creative next year. wrovl it's wanted expensive for
what he can pay, but i had the good fortune of working for bobby when i was ceo of guitar hero, and even guitar hero franchise was looking to expand to women and looking to expand more casual. >> they have a channel fries that everybody uses, but who knows three years from now. >> it's the play for digital and mobile gaming. that's something that king has. it has one of the top apps the in the app store. if you look at the stock prices of king digital and an activision. king digital has strulgled to skwins investors it is a valuable investment, it's not just a one hit wonder. it's interesting to see those stocks going in opposite directions. how do you see the merger of these two? >> he has become a patient krp to these divisions, and he invests in the studios, and he
has had incredible success. is he one of the best that there is. >> some sort of almost the facebook conglomerate model, right, where you have a core, and then you start adding on to it. >> look, it started a couple of years ago when disney did it, and they kept pixar separate. activision was let's keep them separate. they invest in the people, hire people passion wrat for that the and synergies are around growth and creativity. not cost. >> i wonder if this makes zinga an attractive target? we're going to talk to the founder later in the hour. how does this change the whole video game dynamic? does it -- >> it will be interesting. ea did this years ago, and he got roundly criticized for it, and those -- clearly if you are going to be in the gaming and entertainment space, if you are
not in mobile, then you're not going to have the same kind of future than if you remain screws ill on the console? >> do you think we're on the cusp of a new era in gaming as vr comes on and apple tv starts to agregate some tools? >> you think the -- it breaks into two busy buckets. i'm busy, and i'm bored. instagram is i'm bored. there are more people that use the internet because they're board and are looking for things to do, so game willing, casual gaming, virtual reality, you know, these experiences, i think, are going to be massive. i didn't think that two, three years ago, but i've really come to the conclusion that's where it's going. >> zinga was also clever. activision used $3.6 billion of its overseas cash. we have to talk about that. having overseas cash. they can't bring it home because of tax code. king is baseed in dublin. >> it's free money. look, you guys know this from following bobby for years.
>> went through and dvd's going to digital. you see all of our digital businesses growing extraordinarily fast. they grow faster. they have higher margins. we're looking at a company that two, three, four years from now will have more content at higher margins with higher growth and lots of cash flow. >> does that mean you'll be out of the textbook business? >> the ingram business we did puts us out of the textbook ownership business. two years ago, a your ago we were using $100 million a we're to buy textbooks and then get a return on them. now ingram uses their money we're we're just a reseller. we take a 20% commission. our gross profits are 6% to 25. we've become an offerer of them as opposed to an owner of them,
which means no risk, no use of capital. we close the warehouse. we're just -- we're going to be pure digital company by the end of 2016, and i think faebl people will take a look and realize when you look at the growth rates, you look at the margins, you look at the potential for cash flow, this is going to be one of the biggest companies in the education space if we continue to execute. >> 5%. will get your attention today. >> just the beginning of the day, i hope. >> good to see you, man. >> dan joining us today. >> let's take a look at the broader markets right now. pretty splat. the dow seeing the most gains. we'll take a look at where we are. the dow up 58 points. chevron, leader, visa is a leader. the s&p and the nasdaq slightly lower, but barely moving. holding on to gains recently, importantly. want to show you shares of fit bit. even though earnings and revenue topped estimates last night, but the company did lift lockup restrictions earlier than scheduled. it also announced the secondary share offering of 21 million shares. that, carl, is weighing on the
stock. >> when we come back, ibm's judy live at the deal book conference in new york city. plus, a major vote today is pitting the city of san francisco versus more quack alley in just a moment. here at td ameritrade, they're always working. yup, we're constantly making thinkorswim better. like a custom screener on your desktop, that updates to all your devices. and you can share it with one click. wow. how do you find the time to do all this? easy. we combined every birthday and holiday into one celebration. (different holidays being shouted) back to work, guys! i love this times of year. for all the confidence you need. td ameritrade. you got this.
auto desk. phil lebeau live. phil. >> this news comes from washington where dow jones is reporting that the department of justice will be fining takata, the airbagmaker, $70 million. that's for safety defects related to millions of defective air bags and failing to notify owners in a timely face. they also face an additional $130 fine if it violates a settlement with the national highway traffic safety administration. again, this is coming to us from dow jones. we're going to be hearing from transportation secretary anthony fox a little later on today to give us further details about the takata settlement. we want to transition to another bit of news in the auto industry today sxsh it comes to us from tesla. later on after the bell tesla will be reporting its third quarter earnings. we should point out it's not earnings. it's actually a loss that's expected. 50 cents a share on revenue of $1.26 billion. it's not really those numbers that people will be focussing on. the key number is that a lot of people on wall street are going
to be focussing on cash burn. they've been burning through a lot of cash as they've ramped up production of the model s. operating margin. finally, delivery guidance. this is going to get the most attention primarily because tesla has already guided down its full your delivery expectations once. we've already gotten the third year delivery numbers. we know where they stand. it's a little over 32,000, 33,000 vehicles. they need to get to 50 thousands, and to get there look at the column on the far right there in orange. >> we'll ramp up in the production on the model s, and a delivery schedule they've had so far on the sales. >> that's going to be the big story after the bell when tesla reports.
just about 11 minutes until europe closes for the day. simon is here to wrap that up. >> oil is bouncing just below $50 a barrel for brent. a lot of the oil majors have surged during the course of the session. we still have a big problem clearly with the bank. there gu. oil majors, make gains. spain is the top gainer there. we still have a major problem on the earnings season with the banks, what remains of it. ubs, of course, which is three years into its restructuring today announced that it's going to push back et cetera profitability target again. ubs down a quarter of a percent. standard chartered embarking with the new ceo with a $5
billion rights issue and jobs worldwide. an aggressive push into management and banking. a discipline within commercial. the stocks down. interesting questions over volkswagen now. in particular, of course, the new ceo and what he knew of emissions within porsche before he got that job. this, of course, after the epa last night issued a second joe of violation. this time against three liter engines for porsche and also audi. it's a very worrying development for many people. stocks, of course, are still very much -- both volkswagen and porsche, the parent company, the holding company, if you like, not least because the fabbing that the eps asaying, look, maybe 10,000 more cars are affected than we thought. it's an indication that vw is not there, and they -- that is bad news moving forward if you are trying to clear this mess up. clearly, although, if you look at the statements from the volkswagen spokesman, he is getting nationalistic about it. do you want competition within
the american market? let's leave that there for now. just want to mention finally where we are on the u.k. housing market. today liberia came through with three big sells within u.k. housing. they think these guys will not be able to maintain their profit margins as the u.k. housing sector comes under great pressure moving forward. they argue because not least you're changing regulation, and how mortgages are issued in wrurp. for the last two weeks there have been maybe three negative reports on the u.k. housing sector that i have not been able to bring you, but if you are exposed to it, do research kicking off with deutsche bank. back to you. >> simon, thank you very much. when we come back, ibm's ginny rometty live. after a short break. there's a difference when
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good morning, everyone. i'm sue herrera. >> iran's ayatollah khamenei. the country's leader said the slogan was aimed at american policies not american people. he made the comments while meeting with iranian students ahead of the anniversary of the takeover of the u.s. embassy in tehran back in 1979.
>> the department of transportation to announce today its decision on a revenue program for takata air bags. dow jones reporting it will fine takata $70 million for airbag lapses. it also faces another $130 million in fines if it violates the settlement. transportation secretary anthony fox will hoed a news conference. >> between the ages of 8 and 12, it's six hours a day. basketball star lebron james making nba history last night at the age of 30. he became the youngest player to score 25,000 career regular season points. james's
james's. >> took the stage to restructure and rename the company. here he is at fortune's global forum in san francisco last night. >> my job is to create the scale that we haven't quite seen from other companies. >> i think something i guess it's part of our job and it's kind of warren buffett managing. >> some philosophy there. sort of comparing the alphabet to brookshire hathaway, the focus on tech, science, and --
we've been doing. they've been doing, and the analysts have been doing ever since they announced it. >> definitely their time horizons are in the same ballpark. things they've been working on for decades. >> yeah. meantime, we want to talk about -- obviously impacting 2,000 shares between digital soaring this morning. up 14% or so after news that activision blizzard will buy the candy crush maker. that came at $5.9 billion. what does the deal say about the state of mobile gaming and video gaming in general? we have on the ceo newsline the ceo of zinga. tom, thanks for joining us. >> thanks. nice to be on. >> if anything, what do you think about the marriage of call of duty and candy crush? >> it's kind of like ferrari buying a bicycle company. loo what do you mean? >> one of these things isn't
really like the other. you have a company that based on world of warcraft and call of duty, and then are you going to put in, like, a puzzle game. >> isn't that the point? isn't that the point that activision needs a female user base, which king digital has. it needs more growth in mobile is digital gaming, which king digital has. the idea of combining them would help grow a stronger conglomerate. >> i would disagree, actually. i think you are going -- when you try to make a game that's both for women and men, it comes out with something that each like. >> way more sense for activision for -- who made lash of lanes. that would have been an amazing buy. >> they are getting it for cheaper than the initial offer. the throw-back to the ipo. tom, back then we wondered whether king was a one hit wonder, whether or not the strength internationally would hold up. what do you think the answer is
to those two questions? >> can they make something really cool and mobile. that's the wrong form bah between those two companies. super cell would have made way more sense. >> they could have taken the backlog and said here's ae game that was raised ten years ago, let's take it mobile. >> so is your point that call of duty is not conducive to being played on mobile? >> it would be a 23450i9 mare, an absolute nightmare. >> what do you think of a bigger video game company going after zinga, which also has the mobile and social presence? >> yeah. i mean, it's -- honestly, the dream marriage there i think honestly would be nintendo. nintendo -- >> nintendo and zinga? >> oh, my god. that would be, like, off the charts.
>> zinga could take nintendo's backlog and make it into a big viral game. way more so than nintendo could ever on their own. >> "mad money". what do you think is the future of video game? do you think there will always be a world where there are xboxs and other consoles in our living room and that's how people are going to play video games? it sounds like that's what you predict even with the growing mobile and digital gaming? >> oh, yeah. it's going to be -- you're going to be playing games in your head, frankly. that would be our -- with all that. that brings up a whole new market for especially makers like zinga to come into. >> they're really great about coming into a new field and owning it. >> so, tom, if you look, i mean, one thing about king, sure, they're way off from their highs in terms of equity prices, but, i mean, there's still a growing
concern, which is saying something in the competitive world of gaming. if you had to be as honest as you can be, what have they done right? what's in the win column for them? >> they took an old game, a match three game, and turned it around and it's been around for 20 years, 10 years, and they took it and made it into something big. >> the game mechanics have been around forever. people underestimate how hard it is to create a new game mechanic. it's like invent aing through drug. it's insane. it takes a very long time. that's why, frankly, zinga is pretty well positioned right now because they the cash to weave through the dust. all you need is another hit. >> yeah. well, we'll see. here reporting earnings later on this week. it is why bubble witch and farm hero has been hard to be a hit for king digital.
thanks for joining us with the perspective on the industry. zinga co-found wresh. >> ginny rometty speaking to andrew ross sorkin. athletes a listen to that. >> andrew says we are 104 years old. people many people don't know what ibm first did when it was first created. actually, it wasn't ibm at the time, but it was meat and cheese slicers, right? to be the only tech company to survive all this time, it means you do have to transform. you fundamentally have to change what you do, particularly in tech, but i'll come to other industries as well. when you say how much time and rate and space, it is really important to have a clear view about what you are and for us this is always about to be 100 years old and more in the next 1 100, you have to keep moving to what we call higher value, and it doesn't mean that have you something that you price gauge. if t means what you do for someone is of more value. i always say to clients, like james, i am part of his fast and part of his future, and i also
have to form that bridge between those two wrrz i say it's important that i have a strategy, tell you it, and that there be investments and returns that support it. as you see that, what is important is that we grow in the right areas because this is kind of topical right now, i would say size is not a strategy. it's needed for certain things you do, and it's important, but it's under a strategy. if you kind of step back and whether you look, andrew, this year, you look last year, the we're before, our company over say a decade and you look at it, our growth has been all in's, all out says, basically flat to 1%, but profit has doubled and tripled in that time. that's a sign of what's under the surface, completely keeps changing. you know, i -- you were asking about how do you help a work force through this, right? we'll talk a little bit about it. i always say to my work force, you have perspective, right? you're a $90 billion company
making investments. margin is up. already the portfolio is a third transformed. you just keep your eye on that, and you keep going. >> here's the difficult part. as you know so well, we are now, i believe, 14 straight quarters we've seen. >> i thought that would be your first question, actually. >> so surprised you held off. >> and so the question is when do you see -- when do you see those numbers go back up? do they go back up? does it matter? let me say this, warren buffett, who is a huge fwlooefr in you and ibm, says in the end the success of our ibm investment will be determined primarily by its future earnings. >> yeah. >> do you agree with that? >> he is talking about you keep moving to higher value, and i do agree with that, right? even this year as you described, it you know, our margins are up. they're up 80 basis points already, right? 50% of those profit margins up 80 basis points. the important part is about what we do under that. because tech is littered with areas that you could have high
growth and make no money in. that just has never been us. it's been about the enterprise and what we do and where we bring value to the client and where, in fact, it brings value to shareholders here. in part, that has been obviously we're the most global of all of these. as an example last quarter, nine points of currency. that's part of being a global company. the other thing, as you know, others have said you're quite brave that the world is dying for revenue, and we've divested a lot. i have divested $8 billion of businesses. they are businesses either better in someone's hands or they had growth, by the way. they all have growth. the point was they weren't about the future of where we were going. i think those are the things you do if you have to manage for the long-term. you do divevesdivestatures. in some difficult areas. if you look at the profile of the company now, some people think hardware. we do an important piece of
hardware in technology, but it's 10% of ibm now. 30% is software. 60% is services. in fact, when you look one of the most recent divestitures was making semiconductors. that's an example where size does matter. the world is consolidated. we are subscale. we did it for 60 years, right? i do rnd, but i have a partner to do the manufacturing for that area. i think when you say -- those kwaurtsz of decline, we've divested not only semiconductors, but you probably forgot we did point of sale. >> you say so when? don't get me wrong. >> people have to be patient. the question is how patient? >> i always say -- if i'm flip, i say when those lines across.
it is -- it's worth accepting back to second and why should someone be patient? what i would say is just look at the results. if you look at this industry -- if i could just two seconds back up on this because i think it makes sense to sort of paint the picture of our industry. there is no doubt if i said to a group of clients -- i just did this yesterday -- how many people want to be a digital company, almost every hand would raise. that's part of what they want to do. that means have you to have the data, you have to have cloud and mobility, and i would assert you have to is have security too, which we can come back to, and so we set those things out, as you know, because they form the foundation of a company. for us already those businesses, as we exited last year, they were 25 billion, 27% of im through three-quarters of this
year. they grew at 30%. those are big contributions into the business. now, that -- that's why i say, by the way, margins -- higher value. then we have a core business. i think that's important that, you know, what do we do for people? core doesn't mean commodity. i like to say we actually help rub the core systems of 90% of the banks in the world. we do 80% of the airlines. >> that is ginny rometty responding to andrew's question about that string of weak revenue, talking about the divestitures of over time, the challenge of being a global company. ow kayla has been watching the conference all day long and has a where-up of all that and what else we've seen. >> it's interesting to hear rometty on the defensive from the very beginning. of course, andrew ross sorkin asking her about those 14 sec
controversial quarters of die dee clining revenue. she says some of that is engineered and spent time defining exactly what ibm as a company is today. she described the fact that they run the core systems of 90% of the banks. le 0% of the airlines that ibm years and decades ago had call center labor. it had point of sale systems, and, of course, they've been divesting these empty calorie businesses as she calls them, and she spent a lot of time according to this conversation describing the efl use of the work force. she said that size is not a strategy. it's not ibm strategy. she agree with warren buffett, an investor in ibm, that the move should be to higher quality earnings not just to revenues across the board. certainly an interesting conversation. i expect that andrew sorkin will be asking her about the company's strategy around buy-backs. it's something he has written a lot about. i also expect that there will be some discussion around this new inquiry from the s.e.c. about
how ibm has been recognizing its revenues over the years. certainly interesting in a conversation throughout the day where it's all about the long-term strategy. a company like ibm, 104 years old. juxtaposed against the netflixs. we had max of affirm talking about the evolution of financial services having ibm right in the middle of that mix is quite an interesting contrast in studies. guys, back to you. >> kayla, thanks. thank you for that. a reminder, of course, you can watch the rest of the interview over at cnbc.com. >> an important vote happening in san francisco today that could mean big changes for airbnb in that city. we'll talk to a city supervisor who opposes the measure next on "squawk alley." vo: know you have a dedicated advisor and team who understand where you come from. we didn't really have anything, you know. but, we made do. vo: know you can craft an investment plan as strong as your values. al, how you doing. hey, mr. hamilton.
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people who matter most to you with guaranteed acceptance life insurance. call massmutual today at this number. call now! coming up on the halftime show, stocks for six weeks in a row higher. now professor jeremy siegel says why he thinks the rally is just getting started. not running out of gas. plus, our call of the take. why the number one analyst in this space says it's time to buy exxon and chevron. it's a stock-moving call today, and we'll talk to him live. take unders. after king digital deal, we'll talk the names trading below the price. we'll see you in about 15 minutes or so. >> have a fwood one. see you then. >> today voters in san francisco will cast their ballots on proposition f, which is being called the airbnb initiative. it would limit the use of homes as hotels through short
home-sharing start-up wrshz joining us now to discuss is scott wiener. i just want to be clear about what proposition -- what this proposition does. it limits of number of nights a unit can be rented out each year to 75. also puts them through some other regulations. why do you oppose it? >> sure. thanks for having me. until last year or really this year short-term rentals in san francisco was the wile west. there were no regulations at all. we adopted late last year strong regulations that require registration insurance, paying hotel taxes. that went into effect this year, and then in the budget we adopted this summer we dramatically increased our enforcement resources to go after abusive short-term rentals. we all want to get rid of the short-term rentals where people remove an entire housing units from the market, and so that's in process. we just put it in place we're increasing enforcement. prop f is really unnecessary and
is a sledgehammer, and it will hurt a lot of san francisco residents who live in their homes, who aren't being abusive, but who rely on short-term rental for spare bedrooms to make ends meet in this expensive city. we have a lot of house-poor residents who need that income and prop f throws the baby out with the bath water. sfroo how much do you think is being driven by the evolution in tech that abnb is bringing, and how much is just because of the plain fact that san francisco is in a housing crisis? >> i think that -- well, we are in a real housing crisis in san francisco. the average one-bedroom apartment right now is renting for about $3 5shgs00 a month. >> there is a lot of very real and understandable -- i think part of that is driving prop f. short-term rentals are not even
close to the primary cause of our housing crisis because we don't have enough housing we should be focused on the real solutions instead of punishing san francisco residents who need the income from short-term rentals in their spare bedroom who aren't harming anyone and yet, prop f would really undermine them and prevent a lot of people from earning needed income. >> i get the income argument, scott, but if this is really an inventory problem in the san francisco housing market, doesn't proposition actually help free up a lot of rentals or housing units to make it more affordable out there for people instead of just letting them rent them out? is airbnb nonstop all year long? >> it doesn't. our current law in place today completely bans taking a housing unit and converting it into a full-time short-term rental. you cannot do that right now.
it's illegal, and we have been cracking down on people who have been doing that. we don't want to see housing units be turned into short-term rentals, and we've been aggressively enforce it. we just increased our resources for enforcement. prop f would have changed that. it's illegal now. it will remain illegal under prop f. what prop f would do is go after the people who have been living in their homes for many years and have the spare bedroom and need the additional income. we have a lot of house poor people in san francisco. it's an expensive city, and for a lot of people, particularly retirees, this is the only way of earning additional income. >> you don't think it's driving rents higher in the city? >> some of the opponents have been using that argument. what's making rents higher is that we are growing by 10,000 people a year. and producing little housing. it's hard to build housing, including affordable housing in san francisco. that is the root cause of our
housing crisis. that is the overwhelming cause xshgs we need to focus on real solutions instead of trying to persuade people that if you just crack down on short-term rentals, the housing problems will be fixed. where. >> it's a controversial one. we'll see how it shake out. thank you for joining us to discuss. scott from the san francisco board of supervisors. >> meantime, angel investor swrason opposes prop f. he joins us this morning from one market in san francisco. jason, it's good to see you again. >> it's great to be back. pretty controversial issue. >> what's your take on it? >> this is something that's been put together as a balance et measure as opposed to sort of the city managing issue. >> it's very punitive that they get $1,000 fine and that is payable to their neighbors.
your neighbors will be turned on each other to try to rat on each other basically for doing airbnb, and there's already an office of airbnb or an office of short-term rentals and there's already legislation here. this is trying to be sneaky, and this is where ballot measures are particularly ridiculous way to govern. once you set a ballot measure, you can't hang it at all. if you rent over 75 days, you have to take your listing off of airbnb. it's specifically designed to make abnb and other services, vrbo, it's designed to make them less appealing to consumers. it's not going pass. if it does pass, it's going to be met by the wrath of san francisco hippo anarchist and technological culture. >> is this -- >> you don't want to be on the other side of that, by the way. >> i understand. >> like uber, and as they fight
cities all along the cloes globe, is airbnb going to have to have this battle, or is it specific to san francisco? >> it's specific to san francisco. if you look, paris has embraced -- paris of all places embracing, you know, sharing your home more than anybody. the french have accepted this. something is at wroshg are. and that's your special interests. this is special interests trying to crush something competing with hotels. hotels now have to actually think about the service they're providing because young people under 30, not the people who are on the air right now with microphones, but those mill enwrals, they like staying in airbnb's. none of us are going to stay in an airbnb ever, but they love it, and it is cutting into the hotel business. that's why airbnb is a $20 million company. i don't think they'll have a problem like this in many cities. i don't think it's going to pass here, but san francisco is an amazing thing to watch, as somebody who watched manhattan turn into what it is today. we're going through that same manhattan-ization of san
francisco, and san francisco has an open attitude from the summer of love combined with anarchists and combined with technologists who are using san francisco as their own petridish. it's wild to watch it play out. >> what if the measure goes against them? you mentioned paris. that's actually airbnb's most important market. i don't know how big san francisco is, but this is a company that operates all over the world. do you think this is significant having this going the wrong way? >> actually, i think if this passes, it will be fantastic in the long-term for airbnb because it will expose exactly how corrupt the hotel lobbies are, and it will make it an international issue that somebody who owns a home can't rebt their home for a reasonable amount of time and has to face six months in jail. it's a ridiculous, you know, over shooting law. it's like the hotel industry sort of jumped the fence on this
one. if it does pass airbnb will have to high ground for some time to come fighting for individuals' rooi rights. the city has tons of problems. the transportation here is a mess. the city is run by incompetent people. you know, if you come from new york and you have bloomberg and juliany running the city, you would laugh living here at how incompetent it is and how they run the city. it's ridiculous. so this is going to, i think, create -- if it were the to pass, it would literally create massive headlines as well as protests all over the place. >> it's not going to pass. if it does, airbnb will get massive press. >> tell us how you really feel. >> we're definitely going to watch the returns as they say, jason. thanks again. good to see you. jason. >> good seeing you, brother. >> when we come back, some big tech names reporting after the bell today. we'll break it all dune. dow up 90 points. back in a minute. sure, tv has evolved over the years.
take a look at some of the earnings on deck in just a few hours after the bell rings. tesla will be the headliner for sure. etsy, fogo dechow. still about 85 points away. this is actually the dow's highest level since july 21st, which is also the day, by the way, that it last touched -- reached 18 k intraday.
. >> twitter swapping out favorites for likes, and the star icon is now a heart. the heart they say is a universal symbol that resonates across languages, couldn'ts independents and time zones. hearts, of course, are already integ brated in twitter's live streaming platform periscope. this is a topic of major dispute on the internet right now. >> it's not getting reception that's universal symbol of love. >> no. >> people hate it, although i like it. one of twitter's problems, which management has talked about and we feel constantly is the negativity and the trolling and why not put a symbol like a heart? >> some argued that the line beeen facebook and twitter is
getting more narrow. maybe they do need to go for a broader audience. >> maybe in the rest of the world a heart is a better symbol than a star. i don't know. people aren't impressed. they say twitter has big are problems, bigger fish to fry. what's a heart going to do? >> that does it for us here on "squawk alley." let's go back to headquarters and whopner on "the half." ♪ >> let's heat our starting line-up for today. steve weiss and joe teranova. our game plan looks like this. call of the day. why the top analyst and the integrated oil space says exxon and chef rob are a buy. >> stocks going for six week in a