Skip to main content

tv   Closing Bell  CNBC  April 27, 2016 3:00pm-5:01pm EDT

3:00 pm
>> i'm a simple -- simple person sflp. >> bcbg, you know what it sondes for good style, good attitude. >> you know what bv stands for? bon voyage because the show is over. >> "closing bell" starts right now. ♪ hi, everybody, welcome to the "closing bell" i'm kelly evans at the know. and i'm bill griffeth. you know, the tech wreck is real and not just because it rhymes. results from netflix, alphabet, microsoft, apple and twitter have all disappointed. and investigators are going to wonder whether facebook is going to follow suit or buck the trend tonight. we'll tell you what to expect from the social network when it reports its earnings after the bell tonight. apple is the biggest loser on the dow. over 100 million shares have traded. it's down 6.5%.
3:01 pm
while many investors are selling we've got an apple analyst holding ton his rating and we'll explain why. while tech is weak, energy is outperforming. remember, this was the opposite last year. we're going to debate whether this tech weakness represents a buying opportunity. also joel ackman along with michael pearson will get grilled on capitol hill. they're scheduled to testify after the close. we will have live coverage of that in the next hour. let's tart with the tech wreck, an outperforming rating on apple but just lowered his price target from 130 down to 120. julia boorstin spoke with twitter ceo jack dorsey. he said ball street doesn't understand his company. and dominique chu looks at the role reversal between tech and energy this year. let's begin with you, on apple,
3:02 pm
a loss on the open, at least, this morning of another $46 billion in market value for this stock. as it experiences its first sales decline in 13 years. why are you hanging in there with this outperformed rating right now? >> yeah. i'll say three factors that kind of lead us to remain bullish. one valuation. it's a very attractive stock. trading at eight times -- absolutely, right. there was truly an issue that they're having right now.
3:03 pm
the question is, is the appetite of consturms buy apple products degraded? or is it just the fact you that have a very successful iphone 6 and there's less of a entire to buy an iphone 6, is that what happened as you get to 7, you'll see a more traditional upgrade cycle and ideally better of app. >> you're not expecting a game-changer out of the iphone 7. that's been their problem. the inclination in it, not revolution? >> absolutely. the 7 will be, we can see that it will be more of an evolutionary product. you have the reality, an iphone 6 of grade cycle you have part of this base sitting on a product that's two years or more older. historically, what's happened in
3:04 pm
the 26-month cadence. the math strongly suggests it should be getting upside. >> we used to have those phone contract where is you'd upgrade at the end of the two-year contract. we don't have those anymore. amit, thank you. sharing thoughts on apple. taking a look at twitter tanking, julia boorstin did speak to ceo jack dorsey after the company reported results but julia, the shares don't to lag? >> that's right. with twitter shares off about 16% today after disappointing guidance and advertising softness, i asked jack dorsey if he's disappointed he's not improving twitter's business faster. >> we did have a lot to fix on the fundamentals, and we are doing that work. and we're moving really, really fast. we're doing a lot of small simple changes in a very fast way. those will add up to big engagement. we think we can continue to provide value faster, especially
3:05 pm
in terms of wide news, entertainment and conversation. >> dorsey hinted that he's interested in making nor acquisitions like periscope. and that there are more deals like the one he struck with nfl to stream thursday night games on twitter. we might see more of that in the works. you can find my whole interview with dorsey on cnbc.com. guys, back to you. >> i was quoting him earlier, he was saying he doesn't understand that wall street understands his company. any idea what he was talking about that? >> well, i kept on asking them when he was talking about the potential in twitter, all the different ways they're going to grow and expand if they thinks twitter shares down and does he think that wall street is mig something. he said twitter, you know, has an immense impact on the world. it's part of the conversation. there's nowhere like twitter for finding out what's going on and for participating in this global conversation.
3:06 pm
and it sounds like he thinks there's huge official there. and if they can make the service a little easier to use which is what he's working on, then it's really going to unlock the potential and get a lot more people on the service. so he's immensely optimistic about the potential of twitter, not to just add more users but nor value to advertisers. he was relentlessly optimistic. >> we have a lot of fun with twitter. we love it in what we do. but, bill, just because a company is changing a world doesn't make it good business? >> exactly, just because you're famous doesn't mean you're automatically rich. they've got to figure out how to make money even as they're changing the world, right? >> right. >> that's pretty clear. >> they are making money, they did grow their revenue this quarter. it just wasn't growing as much as everyone had anticipated, both analysts and the company itself. it came in on the lower end of guidance.
3:07 pm
the question is can they convince their advertisers not just to switch their ads to video but can they convince the advertisers to spend a lot more every quarter on their twitter ads. >> you'julia, thanks. energy stocks moving higher as technology goes lower, dom chu, what's going on? >> we're not going to call it a rotation yet it's perhaps not long enough mature enough to be established as a move out of wholesale, let's pick up where julia boorstin left off. twitter is definitely on the side of that technology thing. on the heels of microsoft and alphabet and also of course with netflix and if you take a look, twitter does trade down, this is post gts. these guys trade about 71.5 million shares so far. you can see already it's still
3:08 pm
down 16%. certainly on that conversation, on the technology side of things here on the floor of the new york stock exchange. i also want to point out, you guys made a mention of that whole energy trade. crude oil prices up big. that's obviously going to have a tailwind type of effect on stocks like chevron. also exxonmobil. you can see both of those stocks north of 1% higher. if you take a look overall, it's not just the mega oil companies that are in play here as well. you take a look at the more levered plays. about moving companies post-5, kcg, noble corporation, c-drill, diamond, all from 4% to 10% for seagrill. as the oil prices play into it you're going to see whether or not we're seeing a rotation out here. remember, as we talk about this kind of a rotation, it's going
3:09 pm
to be interesting to see whether or not we do get data from that. ubs told us it's hard to say whether this is whole said sasaf that. >> as we all know, it's not a rotation until art cashin says it is. >> thanks. injoining us today, jeremy segal from university of pennsylvania. steven grasso so far at the big boards. and rick santelli is checking in as usual. steve, you and i are friends. you know i would never pick on you, i would point out before yesterday you told us before apple stocks you were long on that. blah, blah, blah. we know what happened to apple a twitter which are also long, now what? >> yesterday i was saying i was thinking of being a cowboy and
3:10 pm
fwieg ahead. print but if you wanted to be more prudent, you should be like me -- i didn't add to it in apple. but i did add to it today. when you say now what. i think longer term for apple. i don't think the stock is going away. $92 technically is the low from august 2015. that's the next layer of support. what are you getting on treasuries? what are you getting as far as return on apple? so i think there's a lot of sheep in this business that want to -- that smell fresh blood. i think they're going after apple right now. >> yeah. >> that's the story du jour. and can it get weaker and that monster that we know apple to be. it has say buyback bill. >> professor segal, i'm interested. which is the better investment or less speculative one.
3:11 pm
do you go into big tech, knowing the disruption that constantly happens in that sector or do you go into energy which is more or less where oil prices are headed? >> i think a lot of the increase we've seen in stock prices we've seen is the reflation trade. that oil had on the bottom $40 a barrel, finding support between 40 and 50. i think all of that is good for the market and i think anything that has a decent dividend today is going to do well, because, hey, we're not going to get any yield in the fixed income market. janet yellen just told us, hey, we're keeping interest rates low. i think those kind of stocks, income producing stock, whether tech or energy, a little less than usual but given the situation, not bad. i think those are the stocks that will do better. >> rick, we're going to dwell on the fed announcement next
3:12 pm
segment. we're not going to do a whole lot here. but you have to look at the market response to all of that. you were highlighting it earlier. the dollar lower. yields back in the way. what do you make of what's going on in the markets today? >> you know, i think the market's a little nervous. investors generally are a little nervous because the view down the road is going to be impacted by central banks. and nobody is exactly sure what central banks are going to do or not do. i do think the bank of japan say huge variable. as i've been saying all day when does minus five basis points look like 50 bonus points. i think that's very significant. i know there's a lot of shooting the messenger. the messenger being the gdp number and how it messengers us information on growth. but i also look at that as a macro. you got to look at a couple
3:13 pm
quarters, four quarters and tafrg out. in that regard, the information is probably pretty solid. tomorrow, with so much smaller trade deficit today that didn't have a 60 handle, we're looking at .6 on atlanta gdp as we get ready for the first look at 8:30 eastern. i think that will be an important die nam take the stock market will have to deal with before it's official opening where it's going to also have to digest the bank of japan or digest what we learned or didn't learn today with the fed. >> professor segal a, just to go back for a moment with the discussion on the big tech names with twitter, twitter's cash is about a third of its market cap. in apple's case, you're talking about a very low multiple and a lot of cash. from that value point of view, is that argument for those two names here? >> yeah, it's interesting how tech has migrated from -- it used to be only a growth stock to paying dividends to having
3:14 pm
lo low pe ratios. i'm not an analysts that says you should trim or buy apple. when i look at the sector here that's going to be blown to affect the market going forward. >> we've got to go here, steve. i've got to get your levels as we head towards the close. 29.97 on the s&p. where are we going. >> 2116 is that near term high. we actually topped out 2111 just show you of that. that's your upper range of s&p cash. and 2193. that's your flat on year. it's range bound now for. >> wide range there. see you guys later. appreciate it. about 45 minutes to go in the session. the dow up 76 points now. again, we have moved firmly in positive territory in the wake of that federal reserve meeting.
3:15 pm
the dollar a little lower. s&p is up about five minutes. transports higher and nasdaq, bill, is still down 20. >> yes, it is. when we come back, as kelly mentioned we'll do that deep dive on interest rates and when will the feds raise them next. if we can figure that out. after earnings today, facebook the highlight today. the shares down. and we'll tell you what analysts are looking for and break down the numbers as soon as they hit the street. you're watching cnbc, first in business worldwide. tokyo-style ramen noodles.
3:16 pm
freshly made in the japanese tradition. when you cook with incredible ingredients...you make incredible meals.
3:17 pm
get your first two meals free at blueapron.com/cook.
3:18 pm
welcome back. huge diversion in a couple of the major averages today. the dow's up 88 points about 0.5% at the moment. nasdaq down 0.5%. way down for technology. technology is the only sector in the red today and it's down nearly 1%. >> if anybody in the research department is watching and i know you are, you're glued to the television set telling us how much apple is taking out the dow today. that will be fun. then we'll know how much higher the dow would have been otherwise. >> especially going back when
3:19 pm
apple was included. >> that's a whole other fun story. the other fun story, the fed today as you have heard probably by now, leaving interest rates unchanged today. but igniting yet another debate about the future. steve liesman joins us. >> there was change in the technology statement prompting that whether the fed could change it in june, september, once this year, twice this year. let's think about the changes, it eliminated concerns over global risks. as definitely downgraded that concern which is in the prior statement. it says growth appears to have slowed. that's the opposite. then jobs have improves but it also limited inflation picking up two hawkish and two somewhat dovish statements. the meeting is pegged for august for the next fed hike so it seems to be in line with a market that's having a post
3:20 pm
meeting debate. path theon economists over there saying june is in play, but we still think that brexit referendum just eight days after the meeting is a serious barrier to action. speaking of data, two more jobs for the next meeting, but the real question is the growth data turn around. tomorrow, the government is expected gross domestic product 0.4% for the first quarter. ahead that at 0.8. we're looking for half of the growth. so what is that? another weak first quarter after a string of weak first quarters. and once again, investors face the tough question on whether or not to count on the second quarter rebound. kelly, you, me, janet yellen, we're all in the same boat here.
3:21 pm
>> thank you, steve leishman. >> art cashin, he was watching the dow was taking about 44 points out today. if we didn't have apple we'd be up 44 points ode. >> nice rally. more analysis about the economy and what the feds might do. >> we have dorothy weaver former chair of the miami branch of the atlanta fed. and jim bianco is president of bianco research. good to see you both. >> they admit growth and activity has appeared to have slowed. do you suggest that they wait on another fed cycle to raise the rates here? >> yeah, i don't think the fed is going to be in any hurry to raise rates because they're never going to have to well it back. once they go forward, they'll have to keep going forward. i don't see them racing into june. there's just too much
3:22 pm
contradictory information coming out, nothing that's actually pushing them to have to react. now, it's data-driven, things can change. we can have a lot of action between now and june but i see them in no hurry. >> jim do you see them with the british votes that the fed would raise rates ahead of that? >> conceptually, no, i do not. there's always going to be something somewhere down the line. i agree with dorothy, i think the fed likes to talk about a live meeting, june is nearly dead. to use a line from "princess bride." and based on what we've seen out of corporate earnings so far this season, i'm going to hold my breath. >> jim, how does the boj meeting tonight complicate thing? >> it doesn't complicate things
3:23 pm
as much as it could be very telling -- it could actually be the most important central bank meeting this week because they might go into negative loans. they might go further into negative territory. the whole experiment with negative interest rates might be doubled down in just a few more hours by the boj. >> dorothy, where does this leave us on the financials and the prospects for profitability there? >> the real issue, you just got to get the economy growing. and we're not seeing it. we're not seeing it. we are seeing that people are more optimistic. the consumer sentiment is going up. there's more money in people's pocket, but they're not spending it. and until we see consumer spending really increasing, it's not going to filter through. we need to have it come, you know, throughout the whole economy. so lots of talk. positive signs. but we're not seeing it translate into action. >> dorothy, is this our economic problem? or is this the global problem
3:24 pm
that janet yellen was wringing her hands over several months ago that is causing our economy to slow to some degree? you know, job growth is still here. and oil is coming back again. those would seem to suggest those would be conditions that would lead them to raise rates but we're still not there by any means? >> no, absolutely. the u.s. has got the best news coming out but we are in a global economy, and we cannot ignore that. and there is a drag coming from the rest of the world. so, energy is going in the right direction. job growth is going in the right direction. and yet, you're still not seeing it in terms of more investment coming out of domestic companies. you're not seeing it in terms of spending. you're not seeing the things that are actually going to lead to that growth in the future. so the global situation is absolutely important. we cannot ignore it. >> thank you, folks. good to see you first.
3:25 pm
jim bianco, dorothy weaver, thanks for joining us today. we've got 35 minutes left in the tradine ing session, the dow up points. >> and apple taking six cents off the first quarter s&p earnings. a big impact here, whether or not you particularly own it. >> it takes a village to do this show. thank you all for your cricks there. up next, when will uber go public? our andrew ross sorkin will join us with highlights, with the "squawk box" gang earlier. also, will facebook turn the tide of these negative techers we've been talking about. we'll be previewing the so many giant's numbers and break them down on "closing bell" that's coming up.
3:26 pm
the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down
3:27 pm
on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
3:28 pm
have you seen shares of dreamworks animation, a source saying it's could be acquired by comcast. and separately, by the way, comcast reported better than expected earnings today. that stock is up about 0.5% right now. when will uber go public? the social car company's ceo travis calvinic shared his
3:29 pm
thoughts on "squawk box." andrew ross sorkin joins us. >> we did get to spend some time with him and arianna huffington. and lots of questions of whether arianna was getting on that board ahead of an ipo. however, he effectively desueded us that that is what is happening here. anybody expecting the company to go public anytime soon may be sorely disappointed. by did talk to him about a comment that the capital venturist threw over twitter bringing a bit of heat saying that he needed to go public and do it soon. here's what he had to say about it. >> yes, we have a number of investors who put money in. there's a moral obligation to find liquidity, right? >> right. >> that's part one. part two, i have a number of employees who have put heart and
3:30 pm
soul blood and sweat into making uber a great company. a lot of that is sweat equity. we have to find a way to get that liquidity at some point. but we're 5 1/2 years ago old. and it's a little early in our life psych to gcycle to go ther. >> we also talked about the chinese market where travis is trying to make uber a great success. given how competitive that market is, we talked about whether that market is a winner take all market. and effectively, whether he was willing to be a number two in china. here's what he had to say about that. >> when you go to china, you cannot go there sort of halfhearted. you have to go all in. and the opportunity for uber is to say if you have a chance to be amazon and alibaba at the same time, you should most definitely try. >> and finally, the other topic that came up over and over again, autonomous vehicles.
3:31 pm
he spends a lot of time talking to policymakers on how uber is bringing new business and invests millions. some people may lose their jobs but it's five, ten, 15 maybe 20 years out. google says it's coming much sooner. we'll see where that ends up. i'm still hoping for the autonomous cars. >> the guessing game continues. andrew, thank you. breaking news on the valeant drug pricing. hi, meg. sfwlt fol >> the folks testifying include outgoing members. bill ackman testimony is available to us since the gavel just went down. he's planning to testify maybe an hour from now.
3:32 pm
there's currently another panel testifying. he said in this testimony among other things, quote, valeant has been appropriately criticized are these issues worthy of inquiry. he goes through to say, a lot more oversight has been added from both him and other people at pershing square and other board members added to valeant recently. and he talks a lot about their relationship there and why they invested in valeant and were passive investors until recently. he urges congress to look the another one of his investments. this one, a short investment in herbal life, guys. so a lot more coming today. they're expected to be sworn in probably an hour from now, just from the written testimony. back to you. >> meg, didn't michael pearson yesterday or previously apologize for raising the price
3:33 pm
of hard drugs? >> yes. in his written testimony that we were able to read earlier today, he did say that mistakes were made specifically in are requiring companies to raise the price of drugs to those two you mentioned in particular. >> is this all about valeant today, are they looking at the whole industry? what's the scope of this into strugg drug pricing right now? >> others have focused on companies on former companies. and this one is all about valeant. it's actually called valeants business model. the first includes people from the patient and hospital community. and the second panel is the one that has ackman, pearson and schiller on it. >> as we see, the hearing is under way. the first panel there is testifying, being questioned by the members of the special committee on ageing there. and as soon as the second panel gets under way, we'll take you live there. >> and, meg, for now.
3:34 pm
meg terrell, we'll see more of, of course, hopefully next hour. time for a cnbc news update with sue herera. >> hi. here's what's happening, presidential hopeful donald trump giving a rare formal speech on foreign policy. the republican front-runner criticizing the current white house policy. >> it's time to shake the rust off of america's foreign policy. our foreign policy is a complete and total disaster. no vision. no purpose. no direction. no strategy. >> trump's sweeping the northeastern primaries last night and now holds 77% of the delegates needs for the gop nomination. a trust company will temporarily oversize prince's multimillion-dollar estate. a judge makes that decision six days after the musician died.
3:35 pm
a pilot getting busted for driving drunk out of jfk airport that happened last april. the pilot failed a random test and tried to blame it on gum he was chewing. the pilot is no longer employeed by the airline. a new study suggests hugging your dog is bad for your dog. psychologist today finding that dogs don't like hugs and can actually raise their stress levels. the best way to show affection, including patting and giving them treats. that's the cnbc news update. i don't know, my dogs love hugs. they do. >> i love giving a dog a hug. can't just pet them on the head. >> i agree. we have two pups, 18 months old. there they are as a matter of fact. >> aww. >> they don't like being hugged.
3:36 pm
nic nicki, especially -- >> i have two golden poodles, they love it. >> nick and nora, belle and beau. >> how can hugging be bad? >> i think it's therapeutic for both parties. >> thank you, sue. >> sure, see you later. >> does buddy like to be hugged? >> no, you he likes to initiate -- >> yes? >> yeah, yeah. the. >> affection. >> he's a cat by e way. >> love that little guy. 25 minutes into the close. dow is up 79 points today, nasdaq going the other way, down 19. although it is moving higher. we'll see if it joins the other two in positive territory. coming up, the heat is on facebook to turn negative earnings center attempt around. up next, a special report from iran. live on opportunities for u.s.
3:37 pm
companies to do business now that nuclear sanctions have been lifted. stay tuned. the heirloom tomato. intensely-flavored. colorfully-diverse. beautifully-misshapen. cultivated for generations, it's the unexpected hero of any dish. when you cook with incredible ingredients... you make incredible meals. fresh ingredients. step-by-step-recipes. delivered to your door. get your first two meals free blueapron.com/cook. quite like the human foot. introducing the 241 horsepower lexus is 200 turbo. with almost twenty percent more base horsepower. once driven, there's no going back.
3:38 pm
one...is all it takes...... ...to turn the tables. crest 3d white toothpaste... ...removes 5 times more stains... ...than the red box. for a smile like that, crest 3d white... is the way to whiten.
3:39 pm
welcome back.
3:40 pm
iran is one of the world's most isolated economies. with sanctions it's now poised to enter the global world of business. >> cnbc's michelle caruso-cabrera traveled to inside tehran to re-enter various markets. she joins us there live tonight good evening, michelle. >> good evening, bill, hi, kelly. yeah many countries interested in getting back to iran now that the nuclear sanctions have been lifted but it won't be american companies. the vast majority can't do sanctions, because the american government believes the iranian government is involved in funding terrorism engaging in money laundering, also abusive when it comes to rights. still very interested in oil and gas from investments from other countries. as a result, they're going to offer at least 49 contracts. it looks like this summer, they tried to do them when it comes to the oil and gas sector.
3:41 pm
that, they hope will bring in more than 150 billion worth of investments. the other industry where they're getting a lot of interests, believe it or not is automobile manufacturing. intense amount of automobile manufacturing here in iran. in fact, the largest auto plant in the middle east is here in tehran with the capacity of 166,000 cars per year. they were deeply affected by the sanctions because they couldn't get parts. they had to shut down lines for a while until the local suppliers could step in and provide parts that they used to get overseas. now with the sanctions lifted, that started to go away. they're still having trouble funding those purchases because many international banks even though they could get back in here, guy, are afraid to do so again because of concerns of money laundering and also concerns about u.s. sanctions. >> michelle, that's exactly what i was geeg oing to ask. even though we've seen a lot of
3:42 pm
european businesses march in to capture this market and very little growth elsewhere, you got to have the financial system, right? you got to have access to the banks? >> right. absolutely. remember, iran still cannot use the dollar. and as you know, the dollar is the world's currency. the biggest transactions in the world, they generally get done in dollars. and if they didn't dollarize, if somebody can't do that for them, they can't get things done. so, banks have been very unwilling to help out even in the wake of sanctions being lifted. secretary john kerry has actually been campaigning on iran's behalf to try to get european banks to do that for them. what that means, getting the corresponding bank accounts. actually getting monies transferred, incredibly difficult. and those are political tools to international business. >> right. you know, you can't turn the economy around on a dime. i know earlier today, you highlighted their attempt to get back up to speed on the oil industry to get their quota going within opec.
3:43 pm
how are they doing? what's your assessment of that right now? >> well, it's been faster than people expected. not as well as the iranians claim it's going, according to the skeptics. so before the sanctions went into place, they were producing roughly 4 billion barrels a day and they were selling more than 2 million on the international markets. they claim they'll be up to that level at the end of the june. most people are keptal of that on the outside and analysts. they do believe that they have ramped it up quite a lot they're at 1.75 million when it comes to exports and above 3 million when it comes to production. so they're getting there. eventually, they want to do a lot more. they want to get to 6 million, for that, they're going to need a lot of investment. >> and the blessing of opec as well. michelle, great work.
3:44 pm
it's bpaying off big time. can't wait to hear about the rest of it. >> michelle caruso-cabrera live. >> my aunt is iranian, she was remarking you can now get sushi in iran. we've got 17 minutes in the trading session. holding ton most of the gains we've seen this afternoon. the dow up 84 points. the nasdaq, the laggard, down 18. is it a facebook world and we just live in it? we're going to find out when earnings are released in about a half hour's time. we'll tell you the numbers to look for in this key report coming up.
3:45 pm
3:46 pm
3:47 pm
welcome back. less than half an hour to go in the session. i'm on the floor here with peter cossack from empire solutions. ohio about the value in apple? >> yeah, we're looking at value as opposed to what we have here. 15% of the volume on the nyse. that's some serious volume. i think it's a little unexpected to be honest with you. >> we also see huge volume in twitter. i just wonder what this means. the tech sector was the story of 2015. was this is a healthy rotation? >> i think it's absolutely healthy.
3:48 pm
people rebalance their portfolios. you're starting to see it right now. the tech sector is getting hit pretty bad. there are bright spots. look, cisco is up. it's a mixed bag in the tech sector. a lot of what we're seeing, financials obviously have done great today. i think that's where probably a lot of money is moving into it. with the fact that we're probably not going to see rising interest rates until the second half of the year. i think the banks will do fairly well. >> peter costa, thank you. art cashin just walked by. the market, $300 million to sell going into the closing, the dow up. it's not been a great season for tech companies so far. up next, we'll look at whether facebook can change that trend, after this.
3:49 pm
i'm in vests and as a vested investor in vests, i invest with e*trade, where investors can investigate and invest in vests... or not in vests. this is my retirement. retiring retired tires. and i never get tired of it. are you entirely prepared to retire? plan your never tiring retiring retired tires retirement with e*trade. i'm spending too muchs for time hiringnter. plan your never tiring retiring retired tires retirement and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. (announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer6
3:50 pm
3:51 pm
welcome back. we know that twitter's earnings last night disappointed and yet another technology company that came out with disappointing numbers that sent the stock down. we get earnings from facebook tonight, julia boorstin joins you now with an assessment what to expect on that. first, you have breaking news on dreamworks animation, what's
3:52 pm
going on there? >> well today, bill, we've been monitoring the story, the report telling that comcast is in talks to buy dreamworks animation. that sending the shares 17% higher right now. the latest is, sources telling me if comcast does buy dreamworks animation that jeffrey cakatzenberg the ceo wod depart. that's part of the deal. and citing the proxy statement in the fact that katzenberg would receive a total payout of $22 million if the company is sold and he leaves the company. so, certainly, a hot merge tore watch. we expect to learn more over the next couple of weeks. and my sources do tell me that these are fairly advanced talks between the two companies. now, moving on to facebook which we'll be hearing from after the bell it's expected to continue with its mobile ad growth. it's starting to report that it's making money on instagram
3:53 pm
and video ads. with facebook shares up about 32% over the past year, the bar is high for ceo mark zuckerberg. facebook is projected to go revenue 48% to $5.52 billion. while earnings are going to go to 62 cents per share. and how oculus, what's app and live. >> julia, thank you. we're going to talk small caps here if the economy is slowing as the fed suggests in their latest announcement, what does that do for the little guy? i know you've been making the case for them because they're not as exposed to the global economy slowdown. but if we're slowing down, what
3:54 pm
happens to them now? >> well, that's a good question, actually, i run a small cap growth fund, i think that's actually where the people want to be. if the economy is slowing they're going to want to buy slowing growing company. they're going to be targets from larger companies trying to find growth. >> like imax. >> imax, i don't know if it's the target but it is one of our favorite names. it's got a great global brand. they're growing incredibly well in the u.s. and china. and they've got the best slates of movies. >> we have the breaking news on dreamworks animation, we're following that as well, which by the way is not a small cap. >> not anymore. >> mike, thank you. we'll come back with the closing countdown. >> art bell, names coming up,
3:55 pm
marrio marriott, facebook, netflix. it all starts in a few minutes here. you're watching cnbc, first in business worldwide. erectile dyn and the urinary symptoms of bph, erectile dyn like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. ask your doctor about cialis and a $200 savings card. hi... i'm pamela yellen. you may have read my bestselling book "the bank on yourself revolution". over the last 25 years, i've researched more than 450 financial products. i found that one of the best-kept secrets to help
3:56 pm
you plan for your retirement is the home equity conversion mortgage. it's a line of credit for homeowners age 62 or older. and it's offered by a company you can trust - one reverse mortgage. call the experts at one reverse mortgage now, find out if you're eligible, and get your free information kit! the home equity conversion mortgage line of credit... can help your retirement savings last longer; strengthen your retirement plan improve cash flow; give you access to extra money when you need it and i recommend that every homeowner who qualifies consider getting one now. call one reverse mortgage right now!
3:57 pm
i am benedict arnold, the infamous traitor. and i know a thing or two about trading. so i trade with e*trade, where true traders trade on a trademarked trade platform that has all the... get off the computer traitor! i won't. (cannon sound) mobility is very important to me. that's why i use e*trade mobile. it's on all my mobile devices, so it suits my mobile lifestyle. and it keeps my investments fully mobile... even when i'm on the move... ahhh. about 2 1/2 minutes left. let's recap here. domenic chu is here with me. we had the fed announcement at 2:00 eastern time today. can you tell, on the chart,
3:58 pm
where that occurred, yes? >> yes, we can kind of see right there at 2:00, we had that dip lower. the quick reaction, we're finishing at the best levels. even though it's up a third of a percent it's something the bulls will hang their hat on. >> and apple is a bit of a drag. we would have been an even higher -- ten-year yield. we saw a flattening of the curve, down 1.86. the dollar index went lower as well. them not raising rates. that is down. just coming off the lows today. now, we get the earnings out tonight. here they come, facebook, paypal, first solar, mare rriot. we didn't even have room for cheesecake factory. >> this is just an 'appteaser.
3:59 pm
this is a big one tomorrow, a slew of them, again, amazon.com is probably the one that a lot of people will focus on tomorrow. that's after the bell. we'll see if that kind of changes the sentiment that apple has put into with the whole technology sector even though amazon is technically a consumer discretionary company. >> another fun feature today, did you see exxonmobil increased its dividend today. >> it did. >> a day after s&p downgralds i it. >> a little in your face there to the regulators, huh? >> which is interesting because part of the s&p thesis on why they cut the rating from aaa to aa, is the capital return program, whether or not it might be a heftier than relatively average dividend. thank you, sir, almost say pleasure. >> my pleasure as well.
4:00 pm
dominique chu going out. stay tuned. here comes the blizzard of earnings reports with facebook headlining the way. we'll see if they can turn the tide there. ishares from arca bringing in t new york stock exchange. welcome to "closing bell" everybody, i'm kelly evans. dow moderating its session on the gain going out 54 points, the s&p 500 only up three points, the dow was the outperformer. the nasdaq was the laggard. all sessions couldn't do it on the well. giving up half a percent. we know the big drags on that index include the likes of apple with the big earnings disappointment last night. but we've got big earnings on tap. a barrage, in fact.
4:01 pm
julia boorstin will be highlighting facebook results just as soon as those are out. ka ka ka kayla tausche. and michael pearson said to testify later this hour. now the panel, cnbc contribute carol roth and before we dive into the news, we want to take a amoment to announce exciting news. cnbc have essentially entered into a date-driven content partnership. we'll be seeing more with earnings estimates, proprietary analysis across all platforms. it represents cnbc's commitment to bringing the audience dynamic new testing tools and actionable intelligence and insights. that was a long way of saying
4:02 pm
welcome and we're very excited. >> thank you for having us. we've been thankful contributor foss cnbc. the cnbc viewership has participated in making us part of it. and we're excited. >> don't screw this up now. we're counting on you guys to get it right. let's start with the market today. we had the fed decision at 2:00 p.m., how much was that a decision? >> far more about the earnings. you look at the nasdaq that was all about apple. a little bit about twitter. mostly about apple. you take a look at alphabet as well, playing into that. that's, of course, next week. looking forward to what lee's going to be talking about and the relevant of us about facebook, can they be the one that stands out from that crowd. the rest of them all worn.
4:03 pm
could this be the one that actually does very well. >> we can till on your screens there, carol, facebook looks like it's dumbing out wi icomin beat. but thoughts as well, not necessarily in this just yet, but a number of big technology companies at this point? >> absolutely. and i think it's very caste of the broader concerns that we have going on. >> actually, you can see facebook shares. i don't mean to interrupt. they're popping on the results. let's get straight to julia boorstin. >> oh, i lied. julia, go ahead. >> i'm ready, kelly. just getting the numbers in. that's right, revenue coming at $5.4 billion. that rose past estimates. earnings also beating expectations. earnings coming in 15 cents better than expected at 77 cents per share consensus expectations
4:04 pm
were for 62 cents per share. last year, a year ago quarter, earnings came in at 42 cents per share. this is a beat load on the top and bottom line. now breaking down some of the different numbers here. odd revenue came in at $5.2 billion. that's up 57%. mobile ad revenue, 82% of total ad revenue. user engagement increasing as well. 1.5 billion monthly active users. daily active uses increasing to 1.9 billion. the notably, 66% of the monthly active users visit the service every day. and in the proxy filing the company announcing it's introducing a new class of shares. a c-class of shares. these are going to be nonvoting
4:05 pm
shares. owners of a-shares will also be given two c-shares as well. this is designed to allow mark zuckerberg who has an announced that he's giving 90% of his wealth to charity to sell some of those shares while keeping control of the company. zuckerberg does control facebook because he owns the majority of those shares. we do expect this to be appro approved. this proposal is up for a vote at the company meeting on june 20th. now, the purpose of this is to maintain the founder-led structure with marks the controlling founder while allowing him at the same time to follow through on his promise to donate to shacharity. that note in the proxy filing facebook shares up 7% on the better than expected result on the top line, bottom line and also in tellers of user growth. back over to you. >> julia, thank you. it looks like this class c
4:06 pm
capital stock is say one-time dividend, carol. interesting stuff. >> it is incredible. but let's go back to the earnings numbers and we used to talk about being momentum and now just the momentum. and this is a stock that's in a class all by itself. if you looked at as we were talking about before, kelly, with all of the tech names and revenue misses across the board and for facebook to come out this strong with this kind of growth. given the huge user base that they already have. just unbelievable management and execution all in all. and i guess, even though you may have some arguments from some people on valuation, if there's one momentum name out there this is the one. >> lee. >> i'd like to say this is a surprise, but it really wasn't. you know, for the last couple weeks we've been seeing the hedge firm independent trader estimates move north significantly. >> even after the last couple of
4:07 pm
days. >> yeah. after the report, they're at 66 cents 1.5 billion. that makes it more accurate on facebook. the biggest thing when you see them revise the estimates up into the print. that's a very good sign that the company is going to report good numbers. >> we saw facebook selling off after alphabet's earnings last week. and here it's interesting they're talking about 82% mobile ad penetration. >> well, if anything, that's the place where people start to worry. again, they're so dominant right now. they seem to be so far ahead along with google, facebook really ahead. i think that's the place where they say are they ever going to be at this level of domination. granted, a digital ad business that will continue to grow. the correlation with google held the stock back going into this number. like everyone who spoke before
4:08 pm
me, it's hard to blow holes in this number other than to say the comps get a lot more difficult. in a world where growth is not being rewarded in this marketplace, this is the one stock. it pulled back a little. that's the place the stock mass peaked at two different times. >> let's have a quick check on amazon shares which are also moving higher after hours. again, we're talking about fame, we're talking about the big place. they weren't just a momentum place. they were kind of the market last year. amazon, you can see, moving up there. it reports after the bell. tomorrow, john brennan, the alphabet numbers weren't as encouraging. >> no, alphabet wasn't, apple wasn't. twitter. those were horrible numbers in many cases and this one is a blowout. so, in other words, the folks that thought there was no advertising, everybody just rolled it all into the end of 2015 and there would be nothing left in this quarter.
4:09 pm
they were exactly wrong. or at least they were wrong about where the dollars were being spent, kelly. clearly, facebook, to carol's point, they were executing exactly as they hoped and as a shareholder had hoped and this is about as good as it gets. >> contrast to twitter which at the end of the day closed at under $15. under an $11 billion market cap, it just shows the difference between the management and vision of the platform. i think you and i can both agree in terms of the business model we are huge supporters of twitter but when they do not have the eye on the ball you can see the difference. >> let's go back to julia boorstin for more on facebook. julia. >> hey, kelly, i'm just right now looking at the letter from facebook's general counsel colin stretch talking about the new shares. titled preserving founder-led to focus on the long term.
4:10 pm
he explains how facebook has been managed for the long term and they've been able to do that because of mark zuckerberg's leadership and control of the company. they say the company's future is successful. because allowing the company to maintain mark's focus on the long-term vision, rather than managing for the short term, encouraging mark to remain involved in facebook. mitigating successive risks and future dilution. they go into great detail here about how issuing these new shares is the best way to maintain facebook on this path of growth and focusing on the long term rather than managing quarter to quarter. >> julia, to that point that you were just making, tim, i want to go to the point about the shares. the class c shares, this one-time special dividend they're talking about. can you recall a similar instance of a company doing something like this? >> no, actually, in fact, i
4:11 pm
think about it more in other companies where you've got oil and research that has created a new structure because they've got a new asset that they want to dig out. but i think it's one of the things that makes the story at least a little more complicated for people. it's not so complicated that the share structure, i think people get that rather quickly. with zuckerberg, if people feel he is less focused on this company, i'm not saying that's what's going on now. obviously, i commend the guy. this is unbelievably generous. it's a sign of leadership that i think corporate america would be great to show all over the place. >> that's on facebook, the shares are up 6.5%. let's check on a couple of movers here. courtney reagan with the numbers. >> kayla, that is kayla -- >> no, problem, kelly, we are having a beat for paypal.
4:12 pm
top and bottom line. bottom line, 37 cents. earnings up 28% over last year. revenue, 2.54 billion. that's an increase of 19% from the prior year. no other company also beat on other metrics that are closely watched for the company. they added 4.5 million accounts to the quarter to 184 million. that's about 1.5 million more than wall street had expected. they also beat on the number of transactions they processed in the quarter by 100 million transactions. the company processed $1.4 billion in transaction, the amount of revenue that they register from those transactions was $2.4 billion. that is a beat as well. this is a company that is outperforming on almost every single line item. one of the reasons, kelly, you're seeing the shares up 3.6%. back to you. >> paypal, guys, what do you think? >> well, the numbers were good. the ebay numbers were good as
4:13 pm
well. i like paypal. it's just not a terribly exciting company right here for me. >> i'm going to daisagree. i'm usually the one on the other side of this. i think the whole apple pay thing as a headwind is completely overblown. i think this is a really great company in a really great space that is positioned in all areas. frankly, i think it would be a nice tuck-in position, whether facebook, amazon, google perhaps. i think this is a great company. >> and i don't disagree. i didn't think it was a bad company. >> i don't think they're going to sell out either. look, this thing is set up to run. look at the chart. the technical breakout is here. we sent out a note to clients saying, watch, this thing is going to drift heavily north post earnings. they're gaining massive traction on the bottom line which is
4:14 pm
important to those big long only investors. i honestly think they have a future where they don't have to sell out. >> they may not have to but somebody could get really aggressive here. if you look at other names, with a valuation there, i don't think you wouldn't want to own it. >> see, that's where -- i look to visa an as a competitor here. and seema mody has these numbers now. >> hi, kelly. shares for solar moving lower. the company did report earnings that beat expectations. revenue a big miss. the analyst consensus 960 million. the company citing timing saying the sales in the prior quarter was primarily due to the timing of systems revenue recognition across multiple projects. now, in addition to earnings, first solar making an update naming current cfo mark widmer
4:15 pm
ceo. in a press release, the company says leadership succession planning has been a joint effort between jim and the board. in addition to that, including its guidance, a lot to go through here. right now, we're looking at shares down 4% after hours. >> thank you. any thoughts on this one, tim? >> the competitive advantage for these guys, they're thin film going against silicone. they're certainly better featured in high-temperature environments and middle east. people have confused with some of thether solar plays that were destroyed. or financial structure plays that were almost put out of business. these guys have a real business. again, the stocks probably on some level on oil play when you consider the correlation to oil. i think they're doing their job
4:16 pm
and in fact this is a company you should be looking at. >> now, the other company that everybody will be looking at is facebook. a reminder of what's just document here. we've been waiting for the last biggie. we'll get amazon tomorrow, of course. not only the widely followed tech names, the companies that are important to the indexes. facebook comes out, nearly 7% on an earnings beat. had other metrics as well where it was able to share a higher traction than expected. you can see the earnings scorecard working its way through. when you get through that stretch with microsoft is and apple, guys, a different story than what facebook is telling us today and that actually makes their performance relatively more of a specific disappointment for them, doesn't it? >> it made it stand out for me as far as the alphabet. that was one i thought, with facebook, of course, doing so well with mobile, so well with video and so forth, i expected the same out of the youtube channel with google. and the searches. and i think in this coming
4:17 pm
quarter, it will be a different story for alphabet. however, this was just blowout numbers for facebook. absolutely every metric they could hit, they did hit. daily average users. monthly average. i mean just incredible numbers on the revenue number as well. very quick -- >> yeah. i wouldn't write off alphabet. >> no. >> google, whatever you want to call it. but i do think that facebook is the one that everybody's going to be watching and everybody's going to be trying to play catch-up with. >> we actually weren't that disappointed in alphabet, when you look at the estimates they're actually still very high. they did ratchet up or down that kind of percentage that they own. the thing that everybody was looking at was the cost. eps is a little low, but it's not something i'd worry about. >> good entry point. >> good entry point and rationality in the market. >> last word, tim? >> we know this is a problem for
4:18 pm
stocks. 48 buys, four sells, two holds. everybody loves these stocks, these are great numbers. at some point, the competition will come into play. they're never going to have digital ads like this one. >> lee and tim, thank you guys. be fewer to stick around and catch "fast money" in the next hour. bank of america head of high yield said there's something else that could determine the market's next move. he'll explain that. but those facebook shares are soaring after reporting better than expected results. we're going to debate whether or not you should buy the stocks following the report next. plus the ceo on the quarter and proposed cost of shares. and bill ackman and mike pearson set to take the hot seat any minute now. we'll bring you the highlights. you're watching cnbc, first in business worldwide.
4:19 pm
they found out who's been hacking into our network.
4:20 pm
who? 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. they've been defending things for a long time. [ digital typewriting ] it's not just security. it's defense. bae systems.
4:21 pm
welcome back. a big beat for facebook today. the stock popping on its earnings. the company also proposing issuing a new class of shares. this after disappointing numbers from apple, twitter, netflix and
4:22 pm
microsoft. let's get reaction from mike sorrentino. and scott kessler from s&p global intelligence. >> mike, here with facebook. >> always something fun to talk about. something now google and apple yesterday, i can't find a flaw in these numbers so far. >> so, what does that tell you, the fact that they're able to do well in an environment where few others apparently are? >> well it's a continuation of the story for years now, they continue to execute. facebook is a company that has arguably one of the most valuable assets. they know everything about everybody. every day we give them more information voluntarily. and they're going to continue to monetize this on, frankly, a daily basis. >> scott, how expensive is this company now as an investment? >> you read my mind, kelly. when i think about facebook, this is a stock that's been trading 35 to 40 time forward estimates.
4:23 pm
not all that extensive given the fact that the company just posted 52% revenue growth, and that's not accounting for currency. and then, of course, look at the backdrop that was just addressed in the context of other technology companies seeming to struggle. this is an indication that there is true value here. >> my question is, obviously, i love facebook. i love the management team. i love the execution. the question from a market standpoint. when you have a user base that is such a large percentage of the overall population of the entire globe, when that monthly active user number starts to low down a little bit, what's the lever? do you think it's more revenue per user? or what is that issue or that lever that they're going to pull to not get dinged by the market when they are that difficult cut? >> it's definitely more revenue per user. again, it's nice to see them get to 1.65 billion users worldwide. >> staggering. >> staggering.
4:24 pm
going forward, you're right, they're going to learn how to monetize that more and more effectively. not through araditional adverti. logins. they just need a few home run us every once in a while to get investors paid. >> what about, scott, this new class of shares, this one-time dividend that they want to pay in order to help zuckerberg keep control? how is that going to work? >> i remember when facebook was a private company and there was a lot of talk that it was actually going to go public as a controlled entity. essentially with mark zuckerberg being the person in the controlling position. the fact that he's looking for in liquidity really makes a lot of sense, especially given a lot of the other efforts that he's undertaken under other activities and -- >> right, but how is it going to affect the shares? >> i doubt it will affect the shares one iota, quite frankly.
4:25 pm
i think people will look at it and consider it and move on. and one that i've seen as comparable, remember when alphabet off google looked to split the stock that initially got some scrutiny. then people forgot about it, focusing on things that are important like the operation, performance and valuation, for example. >> it's funny, when things are going well, it is never an issue. only an issue if it's not going well. true for so many of the moves that are made here, mike. i guess as a parting thought, it's interesting that this company is coming at us at the time when there's proliferation of social media platforms. and every month there seems to be some new thing. and now messengering. i think facebook is trying to make that their forte. are you confidence as we transition from traditional use of facebook into something beyond that, that they can continue to deliver now above this high bar? >> i would say so for the fact that they are the market leader in this space in terms of social
4:26 pm
networking. people spend years putting the content into the facebook database of sorts. it's not like you can just one day just give it away. i can't imagine it's going to go away anytime soon. >> the advertisers really want this. >> that's clear. >> up almost 60% to $5.2 billion. so if you want to reach all of these billions of people that use this. there's really one way that's effective. and that is facebook. >> mike sorrentino, scott kessler, thank you guys for joining us on the facebook results. the big name reporting today but amazon will dominate tomorrow's earnings calendar. we'll tell you if wall street can deliver and what amazon can expect . >> plus, live tell me from bill ackman and mike pearson. the capitol hill drug probing.
4:27 pm
it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen. todd spaletto, president of the north face, we are working on the prototype to match customers to gear. watson, let's give it a try. say it's mid-june and i'm backpacking in yosemite. of our 353 jackets, i can recommend nine. watson, what if it rains? there is just a 3% chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. a perfect choice watson. no wonder our customer loyalty numbers keep climbing. i believe we can do even better. i like the way you think. i believe we can do even better. mary buys a little lamb. one of millions of orders on this company's servers.
4:28 pm
accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of the at&t network, a network that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t.
4:29 pm
welcome back. some breaking news on ted cruz. john harwood has more. >> kelly, desperation time for the charlies, both on the republican and democratic side. ted cruz is in indianapolis right now trying to catch up to donald trump. and he did it today, the step that he took today was announcing who his running mate would be. take a listen. >> after a great deal of time and thought, after a great deal
4:30 pm
of consideration and prayer, i have come to the conclusion that if i am nominated to be president of the united states, that i will run on a ticket with my vice presidential nominee carly fiorina. >> of course, carly fiorina didn't do so well in they are own candidacy. this is an attempt that ronald reagan did to shake up the board and draw new supporters, especially women where donald trump is weak. and ted cruz is weak after those primaries last night. five of them. bernie sanders has just announced that he's going to be laying off hundreds of staff members, focusing all of his staff members on california and june.
4:31 pm
>> ted cruz has pinned a lot of his hopes on indiana, correct. does carly fiorina, is that a particular play for that particular state? or does he just state, broadly speaking, this is the best way to invigorate his campaign and the best choice? >> i think he's trying in a broad sense to get some attention, to draw some women to his side, to give a sense that there's action in this campaign. because he was beaten so badly in those five states by donald trump yesterday, he's got to do something. the cruz/kasich alliance announced earlier this week looked pretty feeble last night. that was one step that they took. now trying to announce his running mate to see if that adds zest to his ticket is the second attempt to do that. it is not focused specifically on in. >> john, thank you so much. time for a cnbc update. let's get to see herrera. hi, sue. a male employee was found
4:32 pm
dead at apple's headquarters in cupertino, california earlier today. a spokesperson for the santa clara sheriff's department said in a statement just moments ago. >> at about 8:35 this morning, deputies were dispatched to a person down at one infinite loop. when they responded to the campus, they found one individual male down, determined that he was deceased. and for further investigation, they determined that there was no other individuals involved. >> this is believed to be an isolated incident. and the sheriff's office concluded no one else on apple's campus is sat risk. it will be up to the corner to determine the death. former house speaker dennis hastert getting 15 months in prison in connection with his money paid for child molestations. hastert is also required to
4:33 pm
entire a sex treatment program. a new study saying people who suffered from brain injuries are at higher sleep issues later on. they're often unaware of their sleep issues making them difficult to diagnosis. general motors with aine initiative which would arrest 800 jobs. gm investing $18 million in michigan. it's part of a commitment that gm made to union workers last fall. that's the cnbc update. back to you. >> can facebook's blowout earnings beat help serve the tech sector after the tech wreck, as we've been calling it? plus, hedge managers bill ackman and mike pearson about to appear before a hearing.
4:34 pm
it's been shaken and pummeled. it's innovative enough to brake by itself, park itself and help you steer. it's been in the rain... and dragged through the mud. the 2016 gle. it's where brains meet brawn. lease the gle350 for $599 a month at your local mercedes-benz dealer. intensely-flavored. beautifully-misshapen. when you cook with incredible ingredients...you make incredible meals. get your first two meals free at blueapron.com/cook. herthey work hard.ade, wow, that was random.
4:35 pm
random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade.
4:36 pm
welcome back. you're looking at a live shot on capitol hill where the second session of the senate on valeant's business model is about to begin. let's listen in.
4:37 pm
>> -- and nothing but the truth so help you god. thank you, you may be seated and let the record reflect that all witness answered in the affirmative. mr. pearson, we'll begin with your testimony. >> chairman collins, senator mccaskill and members of the comphoo committee. thank you for the opportunity to appear today. i have served of valeant's ceo since 2008, with an announcement of the new ceo, i will be leaving soon. we're now a global pharmaceutical company with 22,000 employees and approximately $12 billion in revenue. in the united states, we are leading dermatology, gastro, intestinal, ophthalmology, with brands like bausch and laum,
4:38 pm
retton-a. >> and price increases have overshadowed our activities in these areas and i recognize that we therefore need to work to regain the confidence of congress, the public, doctors and patients. as we grow rapidly, we made many decisions of which i am proud, such as launching new drugs, investing in r & d, and manufacturing here in the united states. but we've also made mistakes including those that bring me here today. in particular, valeant was who aggressive, and i as its leader was also too aggressive in increasing the prices of some of our drugs. in hindsight, i regret pursuing transactions where a central position was taken.
4:39 pm
and we understand congress' and the public's concerns about drug prices and we have sought to respond. first, we did create a volume-based price rebate program for icy pro making the discounts widely available to hospitals united states the united states. second for prescriptions at retail pharmacies we announced a new program with walgreens that will provide substantial savings for patients. we will provide an average 10% list price reduction for a majority of our branded determine knowledge, ophthalmology and women's health brand products. we also have longstanding patient assistance programs including our programs for drugs that treat wilson's disease. the programs include cap co-pays for commercially insured patients. and up to zero co-pays for
4:40 pm
patients below certain income levels. these programs are designed to ensure that out of the pocket expenses do not prevent eligible patients from receiving the medicines that doctors have prescribed. valeant expects to spend more than $1 billion on patient assisted programs in the u.s. in 2016. moreover, valeant makes thoughtful processes in r & d. the spending was about 8% of the u.s. brand pharmaceutical last year. and we estimate that the told r & d spending will be about $400 million in 2016. we had 43 r & d employees and 461,000 r & d employees worldwide. our approach to r sand d speaks for itself. our r & d productivity is seven times higher than the companies with the most drug approvals. in the last three years, the fda has approved six new drug applications and issued 13 device approvals to valeant.
4:41 pm
among these are a number of drugs that valeant advanced from preclinical stage to final approval for example, jubilae. we have more than 22 phase two studies spanning. and the topical treatment for glaucoma. these innovations directly contradict the narrative in advance of those who sought to minimize our commitment to r & d. finally, i want to address one of my personal regrets. my public comments left the misimpression that shareholder interests were my only focus as ceo of valeant. that is absolutely not the case. and it is not fair to the 22,000 valeant employees who work every
4:42 pm
day to develop and make important medicines for patients, nor to the doctors and patients that we serve. i am grateful for this opportunity to seek to correct this misimpression from my tenure as ceo comes to the end in the near future. thank you for the opportunity to testify today, i will be happy to answer your questions. >> mr. schiller. >> chairman collins, ranking member mccaskill -- >> we can tell you we've seen his comments in just a paragraph or two with interesting remarks he made. meg is in washington with more. >> that's right, kelly, we just heard mike pearson's opening statements expressing his regrets that the company made in drastically raising the price of products. he's trying to rectify that by providing discounts to hospitals and patient assistance programs.
4:43 pm
the first part of this hearing is spent dismantling that approach by valeant. a woman spoke to the press about it and valeant contacted her. we also heard from a hospital who said they are not getting these discounts. it seems like mr. collins and senator mccaskill are seeking to dismantle this. >> meg, what power -- hang on. >> thank you for the opportunity to testify and to address your questions today. i'm the ceo of pershing square capital management, an investment firm i founded in 2003. pershing square manages publicly traded fund. public pension plans universities and endowments, foundations and individuals. pershing square is highly eye concentrated investor in ten or
4:44 pm
12 companies that are well-known north american companies. we're an investment company with a target holding company of four to six years. and we work to improve companies which have underperformed their potential. by do so by becoming a large shareholder and assisting the company. not every acquisition has been successful. the vast majority of companies in which we've played an active role have continued to improve. and years after we've exited. for the capital markets and for the economy more broadly. pershing square has been a valeant shareholder since february of 2015, a little more than one year ago, when we purchased a 5.6% stake in the company. initially, we were a past investor in valeant, beginning this fall, began to take a more proactive role in the company.
4:45 pm
and last month, we assisted the company. i first met the board in 20 between when pershing pursued a merger. with the client stake in april of that year, valeant and pershing square pursued a merger. in the course of our joint efforts pursuing the merger, pershing square worked closely with valeant. and in 2015, we became a valeant shareholder. we believed and still believe that valeant is a good company. leading positions in ophthalmology and determine knowledge, low cost in disciplined operating model and competitive advantage in acquiring other pharmaceutical companies. we also like the highly productist which focused on hire probability of drug market in the acquisition and licensing of new products. with drug products and aqkwqua
4:46 pm
acquisition licensing. it's mostly come from startups. bio technologies and startups. and we had much less interaction than we did with the allergen investment. then in the fall of 2015, as a result of press courts and substantial negative scrutiny regarding the price of two heart-related drugs, a specialty pharmacy also under scrutiny. the company's stock began to decline precipitously. a large share of valeant, i recognize that down investment was an implicit endorsement of valeant's strategy. and the strategy which we do not approve which is rapidly the large increase in certain drugs. we recently elected to take a much more active role at valeant. march 8th, steve graydon join
4:47 pm
the board of directors. and march 12th i also joined the board to help stabilize the company assist in the management transition and play a more active role. as a member of the board, i work with the board to recruit new management -- >> testifying before the senate committee, bill ackman there. meg, we expect questioning which could be interesting shortly to get under way. >> absolutely, kelly. expect some very heated questions to all three of these guys who are testifying now. as we're hearing from ackman, he's kind of recounting their relationship of valeant which they expected to be a passive stake, as they saw 85% of that investment get wiped out, taking a more active role. interestingly, he says there that their investment in valeant looks like an endorsement in the business model and says they don't agree with the big price increases. saying they're going to do everything they can now that
4:48 pm
they have seats on the board to make sure that doesn't happen at valeant. interestingly, his comments are abridge from what we saw earlier. he mentioned herbal life, we didn't hear him that say today. he's focusing on his relationship with valeant as, of course, the entire hearing is focused on, kelly. >> there are plenty of other investors who have been in it for longer. that's bill ackman wrapping up his prepared remarks. meg, thank you. facebook reporting earnings, earlier this hour, the stock is up 9%. up next, we'll hear from the company's cfo on these results. i could get used to this. now you can, with the luxuriously transformed 2016 lexus es and es hybrid. ♪ ♪jake reese, "day to feel alive"♪
4:49 pm
♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ real is touching a ray. amazing is moving like one. real is making new friends. amazing is getting this close. real is an animal rescue. amazing is over twenty-seven thousand of them. there is only one place where real and amazing live. seaworld. real. amazing
4:50 pm
aflac...e have aflac... and major medical? major medical boyyy, yeah! berr, der berrp... i help pay the doctor, ain't that enough for you? there's things major medical doesn't do. aflac! pays cash so we don't have to fret. something families should get! like a safety net! cents
4:51 pm
learn about one day pay at aflac.com/rap ♪ . welcome back to "closing bell." i'm julia boorstin in san francisco. with facebook shares trading about 9% higher, long-term investments are paying off mobile news feeds ads, he said facebook's continuing to invest in a range of tools to make their ads more effective and advertisers are responding. he wouldn't break out instagram specifically, but he said instagram is definitely making a contribution to that revenue growth. he also said user engagement is growing with a record number of users accessing the service
4:52 pm
daily. they believe they have the best mobile ad platform out there, to the target consumers as well as measure to add impact. that sounds like a lot of advertiser growth is coming from small businesses. wehner saying they have 3 million advertisers and 50 million businesses with great growth opportunity ahead. >> julia, thank you so much. again, the comments from the facebook cfo, the stock up nicely after hours. we've gotten earnings tomorrow. rounding out the results from the stocks. amazon will report after the bell. we'll tell you what's at stake next.
4:53 pm
owen! hey kevin. hey, fancy seeing you here. uh, i live right over there actually. you've been to my place. no, i wasn't...oh look, you dropped something. it's your resume with a 20 dollar bill taped to it. that's weird. you want to work for ge too. hahaha, what? well we're always looking for developers who are up for big world changing challenges like making planes, trains and hospitals run better. why don't you check your new watch and tell me what time i should be there. oh, i don't hire people. i'm a developer. i'm gonna need monday off. again, not my call.
4:54 pm
welcome back. it's mentioned amazon will be
4:55 pm
the last of the so-called stocks to report earnings tomorrow. facebook bucking the trend today with big beat after hours. what will amazon's results mean for the sector? questions about is amazon web services and competition in the cloud space, and people love amazon, to talk about how profitable is it really. what are you looking for? >> they're obviously spending in a huge way with these centers, these delivery centers across the country. however, they've been doing it smartly. so i won't be surprised if they can actually come out indeed tomorrow. i don't have a position right now, not long, not short, neutral on the stock. >> are you an amazon prime subscriber? >> yes, i am. i check out their videos on there, and i still say that's no competition for netflix. but i think everything else is good. >> this is certainly, i think, a revenue story. and i would expect given the way that they do their spending,
4:56 pm
that they will make the revenue number. the question for me has always been with this stock, can you ever justify the valuation, no matter what happens. is there a point in time ever where you can say we're going to curb the spending, and this company provides the earnings that justifies the valuation. i just say no. frankly, at this point, going into the next flix arena, going into these other areas, i'm not even sure what amazon does. if someone asked me to describe amazon, it would take me ten years. >> i don't know if you guys saw bill miller did tell us he thought, and he's been a believer in this name, effectively since day one, he thinks the stock could double in the next three years. >> wow. well, that's wildly optimistic. >> or just wild. >> or just wild. but it's down 10% year-to-date. it doesn't take a lot to get people excited about an upside over the next quarter. but they need to have some
4:57 pm
outperformance in one of these sectors. you mentioned web services. >> i think this is a name where they've gotten such a pass from investors in terms of being able to spend ad nauseam. i think that foo teague has started to set in. i don't imagine -- you can have it go up from here, but i don't think you'll see it double. >> shares negative, and we'll see how they do tomorrow when they report. facebook up nicely on the earnings. thanks for joining us. >> thanks, kelly. >> that does it for "closing bell." "fast money" begins right after this. understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.
4:58 pm
the e-class has driver-assist systems. it recognizes pedestrians and alerts you. warns you about incoming cross-traffic. cameras and radar detect dangers you don't. and it can even stop by itself. so in this crash test, one thing's missing: a crash. the 2016 e-class. now receive up to a $3,000 spring bonus on the e350 sport sedan. the call just came in. she's about to arrive. and with her, a flood of potential patients. a deluge of digital records. x-rays, mris. all on account...of penelope. but with the help of at&t, and a network that scales up and down on-demand, this hospital can be ready. giving them the agility to be flexible & reliable. because no one knows & like at&t.
4:59 pm
5:00 pm
"fast money" starts right now. the nasdaq market site overlooking new york city's times square. pete and tim, and guy, tonight on fast, facebook surging on earnings. a rare bright spot in tech. that call getting under way right now. we have team coverage with julia boorstin, and bob peck, bringing you breaking headlines throughout the hour. an interesting take on apple that might make you take a second look. first, we start off with the story of the night, that would be facebook. absolutely crushing estimates

43 Views

info Stream Only

Uploaded by TV Archive on