tv Squawk Alley CNBC April 26, 2016 11:00am-12:01pm EDT
and not a bad return. >> i wish my father had put in $1,000. thank you, sarah. and it is 11:00 a.m. on wall street and 8:00 a.m. in san francisco, and we are live on "squawk street." ♪ welcome the "squawk alley" this tuesday morning. and jon fortt is live at the collision conference in new orleans and he is going to be speak to the ceo of roku, and also, terry is joining us from
san francisco, the information founder of lesson, guys. apple is the big story, after the bell, analysis is going to be out, and a lot of people are liking to hear that they are going to have down year, and a lot of people don't want to go into the paper with expectations so high, but this is the opposite. >> well, talk about negative sentiment of a company with $50 billion in revenue. but we have seen the device, it is a device with huge sales and hard to repeat. but people are ultimately talking about there is going to be a new phone or the device or the car or the tv or something. >> and jessica, we often hear the ceos of the smaller tech companies try to invoke the law of larger numbers, and so with the recent law of numbers, how
much does it apply to apple and the earnings each quarter? >> it absolutely does. this is the same story every quarter whars is going to be happening to the iphones sales, and the long de-klining growth, and it is going to raise the question of what is next, and that is a big question, because what else can you go to the phone? you can make it smaller ore bigger and that is the interesting question, but quarter to quarter, everybody knows the story, and everybody who watches apple, and it is about the story, and it is all about cycles. >> and the new narrative is the e ecosystem and not the hardware, and the bullish calls over the past several months are looking to double the service revenues by 2020, but how do you value the ecosystem so big and broa broad? >> well, historically, apple has been terrible at services. their own applications have not been well run. there are rumor that they may be
interested in the drop box which would be ideal, and all they have have to do is to look at the sister company amazon to see what they have done in the services, and how big of a division that could be for the hardware and the vertically integrated hardware company. >> and terry, the fact that we have not heard the investors talk about buybacks in previous years, and is that a success with the cash? >> well, i would not characterize it a success when you consider how much is in the till. it is an enormous amount of money for the company that the scale here, and the dynamic space, you would think good uses for the money other than what they are doing with it now which is earning close the zero percent interest. >> >> and also tonight, shares nose dived after twitter reported
shares down, and they are still down 25% so far this year, and so, jessica, is there a camp for that user growth to reignite, and not in this quarter other quarters? >> well, the campp is still skeptical about the user growth igniting, and with the nfl deal they ignited, there is a question of streaming the games the online is going to ignite the fundamental use of twitter. people want to see different o product innovation, and stuff to compete with snap chat and other companies. >> and when we look at the stock of dorsey and the rollout of periscope, are we looking at the incremental progress or treading
the water? >> somewhere in between possibly, because they are interesting moves, and jack is a product guy. he has good ideas, but moving the ship in that direction, and keeping up, because stuff is changing very, very fast now in the mobile app consumer experience. i think that it is not just video in the periscope form. there is a lot more that can be done. even if twitter were to launch a product in that space could they scale it faster than a facebook could, so a lot of the pieces need to fall into play, and still look at the talent of the company, and we saw a lot of the executives leave, and interesting today if jack talks more about the bench. >> and the stock has been higher in this company, terry, higher than any other tech company, and so can they afford to keep people? >> well, all of the people need top people, and this is a factor
of life, but the narrative here is wrong. the comparative narrative of twitter and facebook and the user growth story. and facebook at 1.6 billion, and mark zuckerberg says he wants to triple it, but it is not the right company to compare it to. >> and who do you use? >> well, the comparison of the consumer growth is a mistake, because they have enormous growth off premises which is to take their signal, and earn a revenue not necessarily on the twitter platform. it is not to say they should not keep innovating on the product, but the more opportunity more so than the other companies is off premises. >> but it is not a new idea? >> no, and quite frankly, the two acquisitions in this area, they have proved very, very good for them, and they are helping to drive the revenue growth. this is a company with more demand than supply, and having a strategy that gives them more inventory is a good thing. >> yes, right.
and five east coast states are holding the primaries today, and speaking of the elections, this op-ed from "wall street journal" is getting attention, a third-party candidate who can channel the innovation, and what do you think, terry? >> well, i love the innovation, and the nation needs a third r party, but we have to be careful not to apply what the digitrazzi think. because we have seen the popularity of trump, and the masses think differently than we do on the coast. >> and so we have heard some rumors that cheryl sanberg may have political leanings with the book "lean in."
and also, more that could be potentially siphoned into a political idea? >> it is farfetched. silicon valley has d.c. where it wants in that figures out here can have a ton of influence through money and policies and their company, and they think bigger than washington in terms of the platform-influenced way. i can't see it happening, but i like the name innovation party, and maybe the name of a facebook conference room might b and it has the ring to it. so i have to chuckle when i read jim's op-ed. >> and it is funny, because we were talking about the job growth with cramer in the 9:00 a.m. hour, and if swrou a kyou computer science degree right now, it is golden, and if not, it is harder. is there a part of america that resents the dijirati group and
the success? >> yes. it is going in the world of where the tech is important, to a world of where tech is important to everyone. and the innovative technologies can help pretty much everyone in the country for day-to-day tasks. >> but the jury is still out whether their policy views actually applies to middle america. >> although, i did read another piece of how many meetings barack obama has had with google executives, and it seems that the technology world has had significant influence on the white house. >> yes. >> and jessica, any read on how v vandaheiss' piece has? >> well, it is a subject of what comes up at cocktail party, and
people are not sure how the improve anything including politic politics, but as it has come up, it is back to the w well, i could run for office or i could build a company that people all around the company are using and invest in philanthropy, and people are going to be choosing option b. >> yes, that is the track record so far. thank you sh, terry for taking hour off. and now, we go to jon fortt who is at the collision conference. >> we will have the ceo of in i intoit brad smith coming up, and we will go on the stage to talk about technology change, and it is interesting, because they just announced this morning that online revenue turbotax is up 15%, and it controls the
direction of the revenue overall all year, and the stock is up in the early trading and close to all time highs, and so it is is going to be interesting to talk to him about the recovery of certain mistakes that he made, and remember last year turbotax and the small business and the blowup that almost happened. and here at collision, it is enterprise, consumer, and social is a part of it, and a few people doing the live stream here on facebook, and periscope as well. and so this conference from the same people who brought us web summit has gone broader as the int internet has gone more broader. >> and now, we will look forward to that, jon fortt in new orleans. >> the markets at this hour are losing steam. we saw consumer confidence and durable goods in march come in light, and the dow down a fraction by 1%, and the s&p 500 has managed to go into the
positive territory, and the nasdaq is down by 0. -- 0.30. and now, the stock is down on whirlpool, and the same for dow as they are planning with dow chemical. the ceo of roku is going to tell us as well as more with the exclusive interview with nike founder phil knight, and what he is looking into. and we are getting more news on the credit rating of exxon mobile, and so with more on that we go over to you. >> well, sorry to break n but
they have had the aaa rated company dropped down, but it is stable. the reason it is important is because exxon mobile is only one of three companies in the u.s. who had that aaa rating and the only two remaining are johnson and johnson and microsoft, and so, again exxonmobil's rating cut from aa to aaa. they are also going to have weakening commodity prices, and also, they are going to take a look at whether or not those issues remain through around the 2018 time frame. guys, that is a big deal when s&p cuts exxonmobil's rate. >> yes, that is
a big read. don't go to paris.
woelcome back to "squawk alley." i'm jon fortt. and talking to the ceo and founder of roku anthony wood. and i want to dive into the tvs because we were talking about how from zero to 8% of the smart tv market being r oshoku tvs, a tell me how it is going to the affect the business overall, and how many of the tv buyers are
taking advantage of the roku service? >> well, it is the platform for tv, and we monetize it through the large margin licensing iing services, and with wep want to get as many rokus out there, and we have the player out there, and stream more than three times as many hours compared to the biggest competitors like amazon or google for example. and one of the big goals is to drive up the streaming hours, because as many people are streaming as possible, and stream $5.5 billion contend which is up from the year before. and we started with the players, and of course sh, the tvs is a h for us, and we license the platform to tv oems and they sell the roku tvs and have five manufacturers to build the tvs and six models will will ship this year, and what is happening
in the smart tv is that all tvs are smart tvs and manufacturers are switching from the homegrown solutions to the license solutions like roku, and we are leader there, and the business model is that we don't stream the tvs b ow on the billing system to monetize that installed base. >> i wish i could get granularity on the conversion rate on the buys, and maybe you can tell me that, but what about the streaming sticks, are they a thing of the past, or less interest, because less people are using them? >> no, there are multiple ways that people get streaming, and tvs are increasingly the big growth engine for us, but the streaming players are important, and we just launched the new streaming stick, and so we will sell millions of those, and it
is still an important way for us to distribute the platform, but 39 million tvs sold in the u.s., and they have an operating system like phone, and many of them are going to be roku. >> and we were chatting before break that we were surprised that we were talking about the new fcc regulation where the set top box makers are going to be required or the cable companies are going to be required to let boxes connect into cable, and comcast, our parent company is not in favor of this, and i think you are opposed to it? >> right. we are opposed to fcc and the op-ed in the "wall street journal," because there are so many ways to get the cable on the box that is not cable. you can buy a roku for under $50 and get time warner cable as an app, and espn, and every major piece of content on the cable, and in fact, we signed a deal
with x finity to roku app. so tons of competition with the set boxtop tv station, and there are a lot of the unintended consequences to the rule. we believe it is going to be driving up the prices of the video services for consumers, and it distracts from the real i issue. the e real issue is that there is a revolution happening in tv right now, and really the only thing to stop it is broadband access or, you know, so it is require requires that free access not in the sense that you don't have to pay for it, but there are zero rating where a broadband provider can preference their service to a third-party service, and that is the real throat stopping the streaming revoluti revolution, and that is what the fcc needs to focus on. >> and thank you for telling us
shares of t-mobile are sinking nearly 2 shares despite the company reporting stronger than usual subscriber growth. and there was a prediction that the wireless industry will see new consolidation going forward as john legere spoke to jon fortt. >> there is a broad gaming on in the next few years, and we do all of those things well. and so in the next five years,
what is the issue? because at&t is trying to migrate, and time warner comcast, and so i still retain the belief that in five years, it is going to be hilarious that we thought there were four carriers in the wireless industry, because it is not wire le less, but the core way that you access wireless entertainment and everything else that you do. >> and along with t-mobile losing, so did yeah and verizon. >> and the net ads would be higher than they previously guided, a his comments about consolidation though are so interesting, because sprint is the natural partner, but if you even so much as look at the twitter words between marcella clarrier and john legere, there is no way that is going to
happen. >> and now, tax day may have passed, but the turbotax intoit is going to tell us why they have done away from the pcs. and the stock is down, and we will look at that. good. we scale on demand. hybrid infrastructure, boom. ok. what if 30 million people download the app? we're not good. we're total heroes. scale on demand with the number one company in cloud infrastructure.
cruz's 26%, and john kasich's 17. bernie, and clinton is leading bernie sanders by 42% to 32%, and both increasing the e leads from the previous poll. and johnny manziel has been indicted by a dallas grand jury on a domestic violence charge according to court records. he is facing up to a year in prison if he is convicted. a new study by brigham and wom women's hospital says that women who work overnights may have increased risk of heart disease, and researchers followed 2,000 female nurses over a 24-year peri period, and women who spent five years working the night shift were more likely to develop heart disease. and apparently, all is forgiven, and kelly ripa returning to the daytime talk show to gather the thoughts when learning that co-host michael strahan is leaving for "good morning america." and her bosses have apologized
for not letting her know in advance. kayla, i predict more drama ahead with the search for the new co-host. >> and she just joked the long national nightmare is over. >> yes. >> and now we go to simon hobbs for the results over in europe? >> one is that the banks are do doing well, in the ur and spain. and the sterling in the pound is behaving well with strong gains going back to where we were in the beginning of the year, and attempting to erase some of the losses. we have a new poll, and the first big poll since the obama intervention on the brexit vote showing that # 56% of all voters believe that they should stay in the uk, and only 14% believe they should leave.
when you start to account for turnout, it is 46%, which is fine if everybody turns out to vote, but the problem with a ref remember dumreferendum is that not turn out to vote if they don't believe it will have any influence. so on that note, it is a tight bound. spani spanish, and italian banks, and there is a report that the italian prime minister may resolve the decree which established the 20% basis tax on their transactions which would help with the probability. and the standout today is the charter on the non-loan condition, and losses are down
1% ax and the capital ratio is rising, so people are clearly cheering because it is going to be moving positively. and on both sides of the atlantic, b.p., british petroleum, when you strip out the one-off index, you will get the underlying profit figure of half a billion, and many people thought that they would report a loss w u for the oil major, that is not bad almost up 5% on the session so far. back to you. >> thank you, simon hobbs. meantime, apple is reportedly o going to see the first quarterly sales drop for the first time in 13 years. we go to josh outside of the head quarters in cupertino. what to expect, josh? >> well, the street believes that apple will report 52 billion tlrz which is a drop of 10% on the top line. the reason for that de-kline,
and you can pin it on the iphone which does account for more than 60% of the company's total sales. in q2, the street believes that apple is shifted to what would amount to 18% drop. and in part, they say that apple is a victim of the success. the iphone 6 was a blockbuster, and in q2, apple shipped more than 61 million iphone, and the unit revenue jumped and now apple is struggling with the tough comps, but concern of the performance has investors pushing the sell button, and that stock is now down 20% from the recent high, and the analysts are seeing the pace of the decline in the iphone units moderating and flipping back to growth with the launch of the iphone 7.0, but bulls like munster wonder if we will be seeing the roller coaster there, up some and down others and what
that would mean for the stock. back to you, guys. >> thank you, josh lipton in cupertino, and that is going to be very interesting to watch tonight. and now, we go to jon fortt at the conference for us. >> and this is the ceo of intuit, and you have given the detail on how that went, and the tax online, and the whole tax unit up 15%, and the desktop growth is down, but the growth is online. and you have raised the guidance from that, and far cry from last year when you is had the stumbles with the tax and the legacy customer, and what worked so much for you? >> in a line, product innovation. they put out 22 innovations, which is versus six that we would annual get into it. to do-it-yourself, and the
cloud-based units grew, and the units grew, and so we took 3 more points per share, so it was a strong season. >> people are buying the estate, and others because they say, what the heck, give you more money for the state, and other product innovation? >> well, that is the second step, and the first is to convince people that they are capable of doing the taxes on their own. so if you saw the innovations, and the commercials that it does not take a genius to do the tax, and if you have a finger and a phone, take a picture, and you are done. and a lot of people were given a shot to do it themselves. >> and so your stock is up about a third of a percent, and so you have been die vesting the businesses more than anybody. you have cut the command force, and you have others associated
closely with the brand, and so what led you to the point where you decided to focus on the things that i spent money on, but i want to cut them, because a storm is coming? >> well, because we saw a brighter future ahead if we narrowed the focus on a ecosystem to have a platform where they all work together. all of the other businesses were good, but they did not make a certain part of the portfolio stronger and they were better stand-alone, and so we have leaned in on the consumer tax product, and the small business portfolio all move ing ing to t cloud, and all of them open platform, and interplay with each other. >> do you see more cuts coming? in tech, ibm talked about making cuts overseas, and intel domestically, and have you made all of the cuts that you believe you need to take? >> well, we took john f
kennedy's quote that the best time to fix the roof is when the sun is shining. so we did that so that when our financial products will help to put some money in your pocket when the times are tough, so no, we don't see any more divestitures. >> and i had asked you privately when we met about the zenefits, and how is the environment right now, and might you make more acquisitions give n the divestitures? >> well, right now, the market is very vibrant, and trying to solve important products with new techniques, and whether this comes from another competitor that we have known or someone that we have never met before, we allow the platform the work
with our products just as our own would. if they become a viable entity we will invite them into the family to result in an acquisition. >> and tell me about the mobile, how many people are getting value out of the the mobile, and more phones than ipad, because the smartphones are continuing to grow in the usage over time. are people doing the taxes on the phones, and are you seeing the increasing dollars on the mobile phones? >> yes sh, and in fact, mobiless one of the key catalysts on the on 15%, and this year, we made mobile available for any simple to most complex. and it drove the adoption of the turbotax online. and small biz usiness is more prevalent, because 60% of the small businesses move on wheels, and paint houses, and clean poo pool, and they don't want to go home at night to press in the receipts at accounting, and they
want to push the button and move on, so mobile is playing a e key factor in the innovation strategy. >> thank you for joining us. key insights into the overall environment're in silicon valley, and repairing the roof while the sun is shining. i love those little sayings that you have got. back to you. >> thank you, jon fortt in new orleans. and now, sarepta therapeutics, and we don't usually say plummeting, because that is what that stock is doing. we will tell you why. >> and if you look towards japan the notion of the bank of japan buying stocks, and towards europe, the american companies are benefiting from the corporate securities buying in the ecb, and all stimulus is fungible, and what we will talk about after the break is the stem cycle, and central bankers, and don't forget to show up.
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all right. coming up on the "halftime report" why apple's earnings is more critical for the market than ever. and we will break it down for you. and plus the goldman's commodities guru is here with a new call on crude that you cannot afford to miss. and with twitter expected to reare port earnings tonight, josh brown's surprising answer of what he is doing with the stock. and we have more straight ahead, and we will see you in 15, carl. >> and he has interesting sell
in may quotes. >> he is always interesting. >> thank you. and now we go to rick. >> and when the fed normalizes rates, i am surprised they do anything, because i believe that the markets is in charge, and jim bianco talks about the fed fund futures which is really gone way beyond the callf of duty in terms of how they have changed the philosophy of central banking in general. i read the story, and hear smart people allude ing ing to the fe future, and alluding to meetings down the road, and talk about the notion that the markets always give you the best answers. i agree with that, but the fed fund futures is a different animal, and what we talk about the markets polling better, and variety of measures, that is why
we do the spots on the vetting sites where the actual money is used to predict the outcomes of the primaries and elections is polling, and yes, and it is true, but it depends how realtime you are. if you are looking down the road in drawing conclusions, there are bad conclusions even in the day when the policy was normal, and the rates were market driven and always the next meet iing tt you put the highest credibility and the outcomes demonstrated by the action of the fed fund futures, but all of it has changed. right now it is all about stimulus, and the stim cycle. we have had bederman on several times, and he understands it more than anybody, charles bederman, and he knows that it is supply and demand, and buybacks, and taking out, and higher demand, and the constant lickety o li
-- liquidity running there 24/7, it is going to drop the price prices. and now, patty dunn was talking about the apple revenues shrining for the first time in 23 quarters the underpinning of the market, but we are not far from the 18,000, but within 50 point, and how do you reconcile it? it is easy, but what i want to know if we can't normalize rates and entitlements, and no discretionary spending, how about the stocks off of the money, and what happens when the bank of japan owns so many securities and stock market, and who is the buyer of the last-last report, and who is going buy that from them, and who is going to be sponsoring retirement? these are the questions, and nobody seems to know the answer, because it is only about the next meeting, and this right now, and nobody is looking out for the longer term, and i think
it is the bank of japan or china, we are going to be reaching the nexus which means normalization without rules. meaning, it is going to happen. a dynamic that going to cause t it, and it is going to be uneven, and surprising. better to surprise now while we have the reins and the horse, and within striking distance of the court. kayla, back to you. >> rick santelli with a well heeded warning in chicago. thank you. and meanwhile, the shares of therapeutics is getting hammered, and we have meg in boston the tell us why that is. meg? >> hi, kayla, yes, it is a tough day for therapeutics shares that are declining, and even tougher for those who want to get on a drug that is going to be if there is enough data to approve a drug for duschenne's disease.
there are no approved drug on the market for it, and even though it was a small study with 12 patients, and voe kates believe that the drug is working, but the fda is saying, not enough evidence, and the panel voted negatively in support of the drug. we talked yesterday with the interim ceo ed kay about just that decision, and what happens next. take a listen. >> what we are going to be doing is to working with the fda and try to see if this new information helps them to make a decisio decision, and we will continue to work with them, and make sure that they understand everything about the pril. -- about the trial. >> and it is important to know that it is a recommendation outside of the advisers and the fda is set to make the decision by the end of may, and dr. kaye said a lot of testimony and patients at the event yesterday. we talk ted to the mother of tw boys with duschenne, and that is what she had to say. >> the scariest thing is that
the boys are hanging on a cliff. if they are removed from the drug, and if there is a not a path forward and the company is going to fry to keep the kids on drug, and if there is no path forward, there is no reason to develop an expensive drug. >> so we will get the decision by the end of may, and right now, the wall street analysts are bearish if it is going to be approved this time around. >> it is so hard to see the faces of the parents and the news, and you have to remember the human side of the story knowing that there is a company side to it, too. up next, the company that phil knight admires the most. one of the rare moments of our interviewing coming up. sic play♪ ♪ uh oh. what's up? ♪
♪ ♪ does nobody use a turn signal anymore? ♪ (ee-e-e-oh-mum-oh-weh) (hush my darling...) (don't fear my darling...) (the lion sleeps tonight.) (hush my darling...) man snoring (don't fear my darling...) (the lion sleeps tonight.) woman snoring take the roar out of snore. yet another innovation only at a sleep number store.
nike's founder phil knight is out with a new memoir talking about when he sold sneakerers out of the trunk in the 1960s. he joined sarah eisner, and man, he brought the fire. >> yes, and there are so many case studies written on nike, and never has the story been told by the man who made it happen. he mentioned the book to come
here on the stock exchange to talk about it and reminisce of the good old days, and while nike is still on top, i did talk about the intense competition between adidas, and others. and now, the founder of adee distalked about when he sold shoes out of his trunk, and did you have anything in common with him? >> well, no, not really. >> and he mentioned where the famous swoosh came by. >> when we broke out, we were a distributor for tiger shoes and when we broke off, we need eded graphic on the side and so we paid a graduate student at
portland $35 for the swoosh. >> and he handed the reins over to mark parker, and he is prepared the to step in as chairman and i asked him if it is hard to let go, and he said, get back to me in june. and we talked about a other companies that he admired and in the book, he said that he admired sony, but it is decades ago, and the company now that he admires most is apple. >> well, at the time, sony is what apple is now, and so we respect apple more than any other company. >> he also shares a kinship with apple who went public a week after nike back in december 1980 at $22 a share which is why knight wanted that to be the nike's ipo and tim cook is on the board of nike and they share a hot of the same cultural, and it is what i press the ceo of apple on, parker, and he always
hints stay tuned, something is coming. >> my thoughts of his thoughts on trade and, the, the -- and ttp and the sales standpoint, jordan is more profitable than when he was a player. >> yes, and the most highest selling and hottest sneakers are the sneaker for jordan and they have more of that jordan brand coming up. and he was not mentioned much in the book, and it covered the early part of the story. and jordan not until the 1980s. >> you talked about entrepren r entrepreneurship of whether the u.s. is the best place to start a business, and so were you surprised at the answer? >> well, he said that it is not the best place to do business, and he encountered pushback from the u.s. and the kcustoms burea right as they were about to go public smacked him with a $25
million fine for import duties, and something that he could not believe that he was fighting his own government with, and despite that, america is the best place to get into it, and he didn't want to get into the politic, but clearly, trade is a big issue for them as obama did go to lobby for the asian-pacific trade agreement. >> and on the floor for 20 years, since he has within here, and glad to have him back. about that. >> and netflix with a new service to make some news buffs happ happy. we will explain that in a moment.
and we will look at exclusive collections of turner movi movies, and it is the first streaming service expected to laupch this fall, and they say it is ad-free, but with a lot of the independent arthouse film tas are hard to find on netflix, and "seven samurai" and others as this market is carved up in smaller and smaller pieces. >> you wondered how long it would take the channels who have rights so many of the films and the titles to bundle it
themselves instead of licensing them to netflix in the perpetuity and they want the revenue themselves, but we don't know how much the customers are willing to the pay for it. >> and netflix has not had many good days in the past week. about a week ago 1.11 and a lot of the tech and the nasdaq name s are more punished than the major indices, and today is the first four-day loss for the nasdaq since january as tech is really taking it on the chin. >> yes, and nasdaq has been called an island reversal, and the rest of the market is relatively stable, but the nasdaq is led lower by the tech earnings last week, and notably apple, but they have potential to turn it around today. >> andf of the bell is going to be interesting, because apple is going to be getting the lion's share, and chipotle, and in their words panera and ebay, and
getting lost in this is the loss of the aaa over there at mobil exxon and they have is had aaa since the depression. that is a big story. >> and now, j&j and microsoft only have the top rating. that is big news. >> and we go over to scott wapner "the half." ♪ >> welcome to the halftime report, i'm scott wapner, and apple and the always important earnings report, and it could be critical for your money, and with us, joe terranova and stephanie link, and jon and pete najarian. and now, starting off with apple, expected to deliver the first year over year iphone decline in sales, and give n th recent ugly action in tech, does the market hinge on what apple says, pete? >> well, it is built n and why would thnt stock be