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tv   Squawk Alley  CNBC  April 27, 2016 11:00am-12:01pm EDT

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bring you an exclusive interview with irene rosenfeld, and now over to you for "squawk alley" carl. >> yes, thank you. it is 8:00 in cupertino and it is 11:00 a.m. on "squawk alley." ♪ ♪ they are running the streets ♪ ♪ and running my streets up to my knees ♪ ♪ and she is running the street s down to chicago ♪ >> welcome to "squawk alley" for wednesday, and joining us is kayla tausche and jon fortt and also joining us from out west is guy cow sake. and oil is rolling over, and apple, with the shares taking a hit after posting the first
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qua quarterly sales drop for 13 years, and the guidance is coming in lower than expected. and this is tim cook talking about it on last night's conference call. >> as we continue through the june quarter, i'd like to remind you that remeasure the health of the customer demand in sell through, and despite the q2 channel of the inventory in light of the macro economic environment we plan to loe wer e channel inventor ris in the june quarter to impact the revenue in q3. >> apple is the biggest laggard having a 44 point downside, and let's bring in dan morgan who is the portfolio manager of sinovis. what are you seeing? >> well, it is a monumental quarter where they quit growing
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in the huge pace they were in the past, but it doesn't really change, carl, our opinion going forward on the stock. we have a big profit in it, and we are not go to the be making a change right now in terms of selling it. we are hopeful with the iphone 7 coming out with the previous history of the other instances of the other releases like the iphone 5 or 6, the stock has traded up in anticipation of the release and we are hoping it is going to happen again with the iphone 7. >> is the capital return losing the luster, because in some of the previous quarters the dividend hike and the buyback increase would pacify the inv investors, and what happens now? >> you are rite. they increased the dividend by 10%, and announced another share repurcha repurchase, and that kind of the financial engineering that companies like hp and ibm had done for years to drive their stock has gotten to the point where the investors are like, hey, we need to see some growth, and increasing the dividend or splitting the stock is is not going to drive it up like it had
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in the past. >> and guy, is this just time for investors to accept a new normal in apple? i mean, it could be argued that the iphone is a once in a generation, and maybe once in a two generations sort of product, and everybody needs their own smartphone, and the revenues were high, but hidden from the consum consumers for a long time, because of the carrier subsidies, and the profits were off of the charts, and eventually the thing had to slowdown, and that time is obviously now. i see no reason why it should accelerate to the growth levels of before just because apple has the world pretty much covered now, and should we just accept, hey, it is a great par i the, and now it is time for the hangover? >> i hope that the party not over, jon. again, we have to kind of look at the multiple, and we have talked about that before, and 10 or 11 times earnings and low, and not like it is trading at a huge multiple and so if they can scratch out 15 to 20% growth
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going forward on the 10 or the 11 multiple, it would be a valuable stock. >> right. let me toss that back to you, guy. >> yeah, back to me. how about to me. all right. so i have worked at apple obviously and i have been outside of apple, and my observation is that things are never as good or bad as they seem for apple. so right now they seem bad, but not as bad as we think. the fundamental issue for me is are they making products that make you lust for them, that make you want to upgrade? so i have used the macbook pro since 2013 and not switched. i used to switch every year or year and a half, and i have not switched for three years and the iphones and the ipads i switch all of the time, but i have to be psychologically at the cutting edge, but for many people when you look at the iphone 6 and the 6s, is it that different? and the iphone 7 or the rumors of an iphone 7, it is going to be looking the same, and you can't plug your headphone into
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it? is that a tradeoff for a better camera strong enough? the question for me is at all times with apple is, you know, are they making us lust for something that basically we want to give our atm cards to tim cook and say, tim, leave us enough money to eat, and otherwise, take everything that you want. >> and guy, what is the answer to that question? >> yes. the answer is that apple has to create a product that was, you know, mcintosh to apple 2 and we need a product to leap to the next curve, and i don't know what it is, but it is not simply making the iphone smaller or the ipad, you know, bigger or sma smaller, and so what is the next leap? that is the toughest question of all. with steve jobs, you know, you were in a reality distortion field so you could believe that making an iphone smaller was a big deal, a revolution. ah, not so convince anythingmore, and so we need a leap.
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>> and the question though, guy, of whether the revolution now comes from outside, and now tim cook saying on the conference call that we are always looking in the market about things that could compliment the things that we do today, and the features that we do or allows us to accelerate into a category that we are excited about, and we would definitely buy something larger than we have bought mus the far, and is this a company that is going to be doing some acquisitions? >> well sh, he is hinting at th but although, you know, i could make the case that not invented here was invented at apple. so we shall see, i guess. >> and so, i wonder about the prospects for growth, dan, because some fundamental things have changed over the iphone's life. they are not expanding geographically as they were before, a before, and they have the world covered and the retail stores have much more coverage than before, and there is not that opportunity to take care of, and early on, they would change skreep sizes from the four size
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-- the screen sizes from the 4 size to the 5 size to the 6f size. so the resolution was getting better, and so even if you liked the phone, you wanted to load it more quickly and you had to upgrade from the 2.5 to the lg to the lte and none of that stuff is happening anymore and so should we not see a slowdown because of that and all of the maturity. >> well, jon, that is quite a question. but anyway, if you are looking at the big macro scale, and do you feel that there is any opportunity at all in china? i mean, 13% of the market share, and the average selling price in china is 299 or south of that? >> i am concerned then -- >> and a possibility to bring up something in that market share just based on the pure population to give them the opportunity to get the next leg. >> yes, but tim cook is saying that the demand for the se which is starting at $400 is larger than they expected and they have to sell three ses to make up for two premium-priced iphone, and
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even if the volumes go up, the revenue may not in china. >> right, the average selling prices are fall iing, and that a key in following the stock in terms of the gross margin, and that is the conundrum, jon. can they do iter or pull it off or a losing game not only selling into china, but india, and the emerging markets where the average income is much less than the u.s. and they don't have the subsidies that we have or starting to extinguish here in the u.s. in terms of the carriers. so that is a big conundrum, and another thing that you is not talked about is services. they did a little bit over $5 billion, and 10% in the apple pay and the itunes and tv and could that eventually become a bigger picture in the product mix and sort of like ibm where the services were 50% of the revenues and i'm not saying that they are going there, but could they use the leverage to expand in terms of garnering more
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dollars per user so to speak, and that is something that could be on the table also. >> dan, big questions being asked today, and good to have you with us. >> thank you. >> dan morgan talking about some apple. >> thank you, carl. and up next -- thank you, guy. and here is jack dorsey talking about the user growth with an exclusive with julia boorstin. >> the total audience is massive and we have 8 million people experiencing tweets on a regular basis. that is immense and you can't go to any media or the television screen or outdoor space or the billboard space with seeing hashtag or twitter space. that is everywhere and we want to see that strengthen and improve. >> normally, guy, the user growth is challenged and the sale side makes up for it in twitter, and that didn't happen here. >> but they have good user growth, right? >> sorry. say that again.
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>> they had pretty good user growth, and higher than anticipated user growth, right? >> well, 1%, quarter e on quarter, and flat in america, i think that some people might have been looking for more? >> yeah, well, we are always looking for more. for twitter, the issue is that they have to add greater yutiliy to people's lives, and maybe they are peaked out at this ubiquity of the hashtag and the ubiquity of the tweets, but fun damt ally, it is a useful service. it is a challenge for them to monetize that. that is the question for them. it is not really, you nknow, obvious how you monetize the tweets. >> jon, in the meantime, they are adding the value to the employee's pocket, and so if you are a share hoeholder, you shou apply at the company to get some of that. >> yes, and that could happen if you can code. i think that twitter continues to have a couple of challenges. one of them is to me the twitter product itself, an unless, you
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know, you have a tv show like we are on here now, and you are trying to communicate with an audience, it is kind of clue ji and complicated and i view it as more being the infrastructure than the actual product. periscope is more like a products and why tont ta build more things on top of twitter? >> el well, to be fair, the emphasis is live video, and coincidentally, it is also facebook's emphasis right now. >> and this is another piece that is not ringing true. on the earnings call, and before, and they were talking about the prince dies, and you have to go the twitter to be a conversation, and facebook is where i had the richest interaction of around prince and people who appreciated the music and posting videos off of youtube like the old george harrison remembrance and i saw it pop up time and time again on facebook and not twitter. and so they don't have a monopoly on the what is happening now that they project
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they have, not any more. >> and guy, you have 1.5 million followers on twitter, and would you find richer engagement on the facebook? >> well, i have to say that i think that you are right. just the simple 140 character limit, and the difficulty of adding the video if possible at all or the pictures and facebook is a richer environment. i have noe tticed with periscop and facebook live, i have more followers on facebook, and 5x on twitter. so for one fifth of the amounts of fol lores on facebook versus twitter i get 20 to 30 times more interaction with 1/5 of the followers and so the emmel fa sis is on the facebook live video than periscope because i get so much interaction with the facebook live, and i can't do both at once. >> so that is the issue, and to
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their credit, they are making the changes moments, and to the board and adding the gifts while you were away and nfl, guy, they are going to say that is the turning point once the season starts in the fall? >> i guess so. i'm not that big of a football fan, and i like to have my brain when i die. that is -- they is a big bet. i'm not so sure i would make that the bet. that is certainly an american bet, right? nfl is an american phenomenon. so it is kind of scary that, you know, the company is betting on a professional sport. that is, hmm. i think that, you know, the b bigger bet is utility. how does this really make people more creative, productive, more entertained, more informed and it has to with be a bigger picture than football. >> yes. and guy, you have such a sharp eye for these thing, and to hear the skepticism in your voice is illustrative to some viewers i am sure. we love the guidance and we
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talked about before the print and good to get your take after it. take care. >> thank you. >> guy kawasaki. >> and now, carl mentioned a drag on the dow which is now down by 48 point, and apple is dragging the nasdaq down for as it has been for several weeks at this point, and remember that you have inventories for the oil and the gas coming in a touch higher and we have been tracking tha that, and we have a fed meeting to be the determinant in how we go from here, and the averages are in the negative territory, and the nasdaq by more than 1%, and the yahoo! shares are mixed after they added four new mem r members to the ceo including jeff smith, and marissa mayer is calling it a constructive resolution. and ebay shares are rallying after that company's revenue beat estimates and the company is seeing the first sales increase in the past five quarters, and you can see what the investors believe of that with the stock up 4.5%.
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>> and mondelez is on the rise, and the chairman and the ceo is going to join us in an cnbc exclusive. and plus more on the apple miss, and we will get more from tim cook, and the rico mossberg. and plus speaking out about the plans of an ipo with uber in china. more on that when "squawk" returns.
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five states holding primaries and leading to a big win for are donald trump and hillary clinton. and john harwood with more. >> it was a great night nfor th frontrunners and donald trump swept all five and topping 60% in delaware and rhode island and over 50% in maryland, connecticut and pennsylvania, and he immediately declared himself the presumptive republican nominee, and turned his fire to hillary clinton thinking of the general election. >> well shgs, i think they the card she has is the woman's card and she has nothing else going, and frankly, if hillary clinton were a man, i don't think that she would get 5% of the vote. the only thing that she's got going is the woman's card, and the beautiful thing is that women don't like her. okay. and look at how well i did with
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the women tonight. >> and democratic voters liked her plenty well last night, and hillary clinton won 4 of the 5 and losing only rhode island to bernie sanders and she is pulling away from the democratic nomination, and she fired back at donald trump. >> mr. trump accused me of playing the quote woman card. [ audience boos ] >> well, if fighting for women's health care and paid family leave and equal pay is playing the woman card, then deal me in! >> deal me in, hillary clinton's very close to the democratic nomination now, and it does not appear that bernie sanders can catch her, and bernie trump has to get to 1237 the number ta you need for the first-ballot nomination, and it is possible that the opponents could deny him that, and he has to do well in california which closes the primary voting in june and indiana is next week, but donald trump's chances at the moment look good, guys. >> interesting to see what ted
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cruz has to say now as he is planning an announcement later today. and up next, mondelez ceo is coming up after the break on the back of better than expected earnings, and plus, another look at twitter, and the shares are falling hard, down more than 15% at the moment. and jack dorsey is speaking to cnbc exclusively when we come back.
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♪ we built our factories here because of a huge natural resource. not the land. the water. or power sources. it's the people. american workers. they build world-class products. and that builds communities. and a better future. for all of us. because making something in america means so much, to so many. weathertech. proudly made in america.
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snack maker mondelez is out beating the quarter. we go to sarah on the floor with more. >> and they are applauding the bert than expected sales behind or rios and ritz crackers, and with us to discuss the results is irene rosenfeld of mondelez. good to have you with us. >> good to be back. >> and the organic growth is rising more than 2%, and beter
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than we thought, and is this an inflection point where you don't have to worry about the rising costs? >> yes, and we had to teal with the rising cost of cocoa and the volatile environment, and so we priced a number of the businesses understand iing full well that there would be short term dislocation in the top line, but as we exited last year, we started to see the recovery, and i'm very pleased with the start to the year. it is another strong quarter, and we are executing well. the metrics are ample evidence of that. >> and another bright spot for the investors has been and continues to be improving margins, and something that we have heard from big hedge fund inv investors like bill ackman even though he trimmed the stake, and also, nelson who sits on your board, and what can we expect on the margins as you continue to reform your supply chain and open up new factories? >> well, without a doubt, the margin is a critical part of the
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story, and we have a critical target this year of 15 to 16% margins up about 200 basis points, and well on track to do that with the 15.1% margin we delivered this quarter, and good visibility to get to 15% to 18% margins by 2018, and lot of it is coming from the number of initiatives in terms of reducing the overhead costs, and investing in the supply chain around the world. >> and you mentioned that the currencies are a pressure for you, and you are uniquely exposed interfashlly with a majority of the sales coming from abroad and why didn't you boost the guidance for the year given the weak nness in the u.s dollar, or is it just too early to do that? >> well, simply, 40% of the revenues come from the emerging markets, sarah, and it too early to make a move. without a doubt, we see the currency is looking more favorable than we had thought, but we are seeing the
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significant volatility in markets like brazil and russia, and we just want to be prudent as we look at the outlook for the whole year. >> that is where i wanted to go, and markets like brazil and china and what are you seeing on the ground in terms of the consumer spending, are things worse or stabilizing and disappointing? >> well, look, there is no question as we look particularly at the markets like brazil and russia but to some extent china, and overall demand is clearly softer than it was, and the focus in the markets is to continue to execute well, and to grow our shares, and we are seeing that we are able to overcome some of the fundamental macro economic issues with with the strong execution. the good news is that 60% of the revenue comes from the developed markets, and there we are seeing a much more stable environment, and in fact, it is gradually improving, and so we are seeing the strong performance in those markets which give us a good foundation for the full year. >> and yeah, a lot of people were encouraged by the european results which is your biggest market, and have things turned a
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corner in europe? >> yeah, we feel good about the momentum in europe. we took a modest growth in the quarter only up .22%, but it is the first growth in eight quarters and the growth was high quality and driven by volume, and strong mix as well as some of the actions that we are taking in terms of the investing in some of the key franchises, so it is going to set us up with a good foundation for the continued strength in our european market. >> we did find out today that a key lieu ttenant of your marc klaas is going to be leaving, and leaving pinnacle as the ceo and it did come as a surprise to investors as he was a growth driver and potential successor to you, and can you give us more color on why he decided to go? >> well, rehappy for marc, and he is a strong operator and seasoned executive who has made significant contributions to our company over the course of almost 20-year career. he has an opportunity now to lead another company, but
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fortunately, we have a strong bench here of highly talented leaders, and i have ever i are -- i have every confidence they will continue to execute. >> and congratulations with the stock outperforming the consumer staples. >> all right. thank you, sarah eisen for us. simon is back at the post. >> and you can see that they are inching higher up to the fed meeting. and the gdp for the uk came in at the slowest rate of three years and annualized for that quarter of 6%. you can argue that is structural, and the boost that you have is had from lower savings and higher employment, taand the tax situation may hav influenced that, but of course, everybody is piling in, and saying that george osborne the finance minister saying that this is a further sign that the economy is beginning to slow ahead of the votes to potentially to the european
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union or the brexit. and atop is adidas with the german come ppetitor competing h nike and under armour, and this stock chart is a thing of beauty the. look at this up 48%. they have come from behind and raise ed the forecast profit twice within the same quarter partly because of the world cup, and the soccer world cup happening and the euro 2016 in europe, and the olympics as well, and the higher margin sneakers they are selling ahead of a new ceo coming from hinkle in august, and so that stock is doing really well. look at some of the others reporting today, and with the st microtronics is more gaining with their industrials. and the drugs of tole tall on the way to bp and bar clays is slightly higher as well. and meanwhile, mentioning what is happening in greece.
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the stock market is in negative territory, and there should have been a meeting tomorrow where the finance ministers of the rest of the eurozones would have signed off to give greece more of the emergency bailout, because it is meeting the targets, but they canceled the meeting because of the standoff between the two is so great, and the germans are requiring the greeks to inkrecrease the austey and so they called donald tusk the head of the council asking for a emergency leader summit, and he happened to be meeting in brus sells today, and the president of al bainia, and amidst the meetings he effectively replied to the greek prime minister saying no emergency meeting of the leaders, but the finance m ministers needed to get together again, and there is is a payment due up again in addition to the salaries and also, spain is having a general election. >> always something, simon. >> yes, a lot of them. >> and now, up next, apple shares are continuing to slide down 5.5%, and comments with the interview from tim cook and the
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reaction from rico's tim mossberg. and more on the losses of google, facebook and microsoft all down close to 1%. "squawk alley" is back in a moment. let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim. td ameritrade. igoing to clean betteran electthan a manual. was he said sure...but don't get just any one. get one inspired by dentists, with a round brush head. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque and rotates to sweep it away. and oral-b delivers a clinically proven superior
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good morning, everyone. i'm sue herera and this is the cnbc news update at this hour. there is word that comcast is in
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works to buy dreamworks animation for more than $3 bi billion, and if they make a deal, it could make the cable giant a major challenger to walt disney, cnbc's parent company. and now, ford is recalling more than 200,000 vehicles due to faulty transmissions that. i can suddenly down shift to first gear. and ford is recalling explorers for a rear suspension issue, and no deaths are reported in connection to that issue. and the key terrorist suspect in france is going to be transported from belgium to france. he was arrested after four months on the run. and historic gang bust in the bronx, new york, and more than 120 people were charged today in con nnection with the narcotics trafficking, robbery, and attempted murder, and murder. and officials are calling it the largest takedown of gang
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activity in that city's history. that is dramatic news this morning. now we go back down the kayla. >> and now, thank you, sue. apple posting the first ever drop in iphone sales, and josh lipton spoke to ceo tim cook, and joins us with more on that conversation. josh? >> kayla, apple stock is under pressure, but ceo tim cook is c confident and when i spoke to him, he outlines that why he says that the iphone is going to return to growth is that cook told me that we are still in the early innings of the iphone, and implying more exciting innovation in the works, and noted that the demand for the iphone se is off of the charts and at tracking a new group of ou ousers. he also said that apple is getting the traction in new markets like india where the sales jumped 56%, and apple is taking share from the rivals, and there is a record number of android fans that are making the switch to ios, and cook conveyed a tone of optimism, and confidence, and once that he did
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reiterate on that call with analysts. >> iphone sales come from three sources, customers who upgrade from previous iphone models, customers who switch from the android and other operating is systems, and customers who purchase a smartphone for the first time. as we are look agent each of the three sources of iphone sales, we see a business that is healthy and strong. >> investors clearly are not convipsed give n the disappointing q 2 results and the q 3 guide, and also the worry of growth in china where the revenue slipped and cook told me that the chinese economy appears stable, but he acknowledged that there is a real change there. a year ago you had the wind with at your back, cook told me, and now, that wind is not blowing anymore. jon, back to you. >> thank you, josh. certainly not blowing at his back it seems. following that reported slump in iphone sales, walt mossberg was writing about the greek gadgets
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of the past, and how a maturing smartphone is sparking a new jep ration of digital devices, and how does apple fit into the picture? well, the executive editor at recode walt mossberg joining us to explain. and tim cook i is as the early beginni beginningings of the smartphone, and i don't know if anybody outside of apple would put it that way, and maybe the seventh inning stretch or something, i don't know, but it seems that the iphone was the perfect gadget as i read through the coll lum, and high volume, and hard to monetize, and true cost in the beginning, and pretty much at the end of the once in a jep ration, or maybe once in two generation-type phenomenon for apple and we have to adjust to the new normal? >> well, i think that is what could very well be true, jon, and not just for apple. i think that in the overall
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premium smartphone market, this amazing idea and we should not for get this of a powerful computer that you can put in your purse or the pocket. i think that we are not in the early innings of that. i would respectfully disagree as you did with tim cook. having said that, i don't think that we are done either. i think that there are the smartphone has runway, and it may have to be at a lower price, and one thing that you know that i know that you have discussed this is that there are new lower priced upgraded four-inch model se was not in the numbers and they claim that they can't keep up with the demand on that one. but, so there are price changes, and there are feature changes, but i don't think that -- u tyo think that the big leaps, the big product amazements are
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mostly done. >> walt, i am thinking of the very broad strategic shortcomings that people are alleging at apple to today. they underestimated the impact of the subsidy with traul. they underestimated the elongation of the cycle. they were not innovative on the product, and unimaginative in m&a and do you agree with some of those things or disagree with this them? >> well, i disagree with most of th them. as you know, i'm a product guy. i think that these are all really marginal business complaints. they have done a ton of m&a and particularly when you look toward towards the future, the new era of the gadgets that i note d in and that we have been talking about the verge website all this week, apple has done a ton of m&a in augmented reality, and the virtual reality, and
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autonomous driving and other things that we may not even know about. i don't think that you can, unless you want to have for purely financial reasons to see them go out to buy twitter or something, in terms of the future and the future of innovation, they are spending a ton of no knee, a-- a ton of mod in the earnings call, somebody said, well, why don't you cut the expenses, because you are having this drop in revenues, and they said, because we're going to do more r&d. we need to move towards the future. so i don't buy that those particular set of criticisms. >> walt, innovation is the mother's milk for these companies, but it is hard to imagine a device, a smart-type device other than the phone that is as basic as crucial to our everyday lives, and that is what apple was a able to the create
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with the iphone, and why it was so successful, and just because the company can't produce a year over year sales increase, i am wondering if you are thinking that the company is not going to be able to create a iphone 7 to sell 65 million devices in a quarter. is the jury out for the iphone? >> you know, it is great question. i don't want to seem like an apologist here, because i think that i have been critical of certain things they did or didn't do in the iphone. i wrote a column in march saying that the iphone 7 better be spectacular and this is the headline and i was not talking a it from the investor point of view, but from the product and innovation point of view. so i stick with that. i think that the iphone 7 had better be spectacular, and i
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don't know what exactly that is. i think that i gave seven thing s that i would like to see it in, and i would love it if they thought of something they didn't and amaze me as they have so many times in the past. they need to keep stepping up the their game on the phone while they work on other things. that is theirle challenge, and i would say one other thing, and again not to be an ap pologist, but it is an awful hard compare against the iphone 6, and not 6s, but gigantic leap when they finally had big screen phone, and everyone bought them. >> indeed. they have got in a way, a lot of the really hard comparables looking at the trajectory of the iphone own the years. walt mossberg, always great to have you. thanks. >> thank you. when we come back, we are going to be watching the shares of twitter, and within a dollar or so of the lowest close ever.
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more of our exclusive interview with jack dorsey in a moment.
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all right. comi coming up on the halftime report, we have one analyst who downgraded apple, and we will talk to him. and also, adam parker will talk to us about where the rally is. and we will talk to michelle cabrera caruso and the oil
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mark market. we will see you in about 15, carl. >> okay. thank you, scott. and now, over to seema mody. >> thank you, carl. the move in twitter is down 16% on the day, and currently the worst performing stockton russell 1,000 and on track of the fourth worst day ever as a public company. not to mention heavy volume surpassing the 30-day volume as the the investors digest the social media's latest earnings, and keep in mind of the 44 analysts covering twitter, 18 have cut the price targets on the stock. carl? >> thank you, seema. and julia boorstin sat down with jack dorsey and she is here to wrap that up. good morn g ing to you. >> good morning, carl. the twitter shares are off dramt clishgs a cli, and i asked jack dorsey what he doing to get it back on track and to change the company's perception of the potential. >> and we have a development team, and engineering what we
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believe to be the best experience out there around life and what is happening now. i want to make sure that twitter is the place that you check the first thing to start your day. >> and let's talk about the advertising soft neness that yo saw. how concerned are you that you have not been able to grow the ad numbers as much as everybody has expected? >> well, we saw a massive shift to video, and, you know, the brand advertising growth was not what we expected, but it is because of the shift to video. we have been working on improving the video experience on twitter for past two years, and we are seeing the benefits of that. >> and facebook is now going after the live with the live streaming. and it is inherently built into the facebook app unlike periscope which is separate, and also going after the commentary of live event, and messaging and commerce and areas where twitter has been investing, and how do you teal with the competition when facebook is a bigger base? >> we have seen the competition over ten years, and we believe we have a leadership position in
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live. it is not just live stream, but around the live event, and twitter is better positioned than everybody else out there, because of the people tweeting every single day. >> on the call, anthony nota talked about the interest of m&a and what can we expect in terms of the m&a from twitter going forward? >> we have benefited massively from m&a and the company has been phenomenal of recognizing the talent before the world can see it. two examples are vine and periscope, and the company made the acquisition before each of the products launched, and phenomenal teams, and phenomenal product, and we will continue the look for great teams and products. >> it is beneficial for twitter to be out of the spotlight as a division of a greater company? >> well, the board has a fiduciary commitment to what we have presented them with the five priorities and they are going to hold us accountable to
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that? >> has anyone been trying to buy twitter? >> that is right. dorsey laughed, but he did not answer the question of whether there is any m&a activity in the works. >> and what wall street does not understand about twitter, he talked about the twitter's massive influence on the world and the potential for the growth if he could make the service easier to use. you can find my full interview with dorsey on cnbc. >> that silence speaks volumes. julia boorstin out west, thans.s >> and now, uber's ceo is talking about plans to go public and plans in china. that is next. lee. the championship game ball? that was sebastian diaz. good guy. and all i had to do was ask for their money and pretend i was investing it. their life savings is now my lifestyle. female announcer: don't let someone else live the life you're saving for. find out if you're dealing with
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they found out who's been who? cking into our network. guess. i don't know, some kids in a basement? you watch too many movies. who? a small business in china. a business? they work nine to five. they take lunch hours. like a job? like a job. we tracked them. how did we do that? we have some new guys defending our network. new guys? well, they're not that new.
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they've been defending things for a long time. [ digital typewriting ] it's not just security. it's defense. bae systems. uber ceo travis calvinic spoke to us this morning as arianna huffington reported ta its ipo still may not be imminent, and this is what he had to the say. >> i am your classic founder entrepreneur that is way more into product innovation and building a company than i am in like thinking of liquidity. so this is about building the company, and you guys, you is seen me over the years, and it is always been that way for me, and i have said it even on the cnbc that we are going to take as long as we can to go pub are
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lick. >> and the conversation didn't end there, about the ipo because it is not just the rider tas and drivers curious about it, but so are uber's own investor ss and many of whom got in years ago. >> yes, we have a number of investors who put money, and there is a moral obligation to find liquidity. >> right. >> and that is just part of the deal. >> right. >> that is part 1. part two, i have a number of employees that have put heart and soul, and blood and sweat into making uber a great company, and there is, you know, a lot of it is sweat equity. and so, we have to find a way to get the liquidity at some point, and we are a 5 1/2 years old. it is a little early in the life cycle to go there >> and as for uber's growth, and the expansion into chai fa has been well telegraphed, but also costly burning a estimated $1 billion a year, and this is how he addressed that.
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>> when you go the china, you cannot go there sort of half hearted and you have to go all-in, and the opportunity for uber is to say, well, if you have a chance to beat amazon and al a alibaba at the same time, you should try. >> and burn rates are one reason that the company does not want to release the full financials at this point. and it is interesting when andy ross sor kkin asked him to go public already, and just go public, and travis kalanik said, i believe he skipped out on the series b when we were valued. >> and then be ben wilson responds to you, well, he got the facts right on that at least. >> $300 million, and are return of 200 times at this point. >> and you wonder if there are specific dangers of uber waiting too long.
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he talks about waiting as long as possible, and mark zuckerberg after waiting a long time to the go public said, hey, it is a good thing for us to take the lumps when we did, and i guess it is a tough calculus, and i don't know when you do that and when is the best time to take the lumps. >> but that is the founder and the ceo brain, because the best days are ahead of you, and so it won't matter when you go public. >> and also some hillary clinton's criticisms of the economy pointing out the benefits they create to not just the cities and the pas ssengers trying to supplement income between jobs. >> and in new orleans, uber is huge. they have been able to pick up at the airport for a couple of week, but the cost of living is low enough that the drivers there, they just see it as an enormous opportunity. we will see what happens with the ecosystem around uber drivers and you need mechanics and all of that with the wear and tear, but it is a huge
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impact. >> and they are adding 2 million drivers to the service this year. >> that is moving the needle for sure. >> and when we come back a lot more tech earnings when we come back, and facebook and pay pal, and after the bell, we will talk about what to expect after a break. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs.
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earnings after the bell, and analysts are expecting $5 billion in revenue up 3.5 from a year ago, and the ad revenue is being watched es pepecially the video ads and the question is if they are a outlier in the social and the tech or as sandler said a few weeks ago we are look g fing for the possible growth reset. >> there are some positive things that you can take a wway from the google's report and even yahoo!'s report from the overall ad environment that you would expect facebook to do a little bit better than google did in terms of the how they performed versus the expectations. if they don't, boy, there is not a lot to be happy about in this the earnings season. >> i keep expecting somebody to check those three messages and the ten notifications in the graphic every quarter, but it never happens. >> and the company has more than those three and ten, but it is going to be one of the big stories along with pay pal tonight, and we will get texan which i might add will add some granularity after we got hilton
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today, and we got buried in at lot of news. >> and paypal is going to be interest, because it is the quarter to then monetize that we used for free? >> well, we all use it, right? >> yes. >> and now, ahead to the quarter and scott wapner in "the half." ♪ carl, thank you so much, and welcome to the "halftime report." i'm scott wapner and the trade is the apple aftermath and the stock hammered right now, and are the best of times over for america's most loved companies. stephen weiss, david lebenthal and pete and jon najarian. and now, after the sharp slowdown in china and the stock is tracking for the worst day in 13 year. and the market cap was wiped out right at the top, doc, and are you short the stock now? >> well, i was, but i have

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