tv Squawk Alley CNBC August 4, 2016 11:00am-12:01pm EDT
good morning, it is 8:00 a.m. at square headquarters in san francisco, 11:00 a.m. here on wall street and "squawk alley" is live. good thursday morning, welcome to "squawk alley," carl sl on assignment in rio, he'll join us live from there tomorrow. john court is also off, here we many web mike sanle toly and andrew, good morning to both of you. >> nice to see you. >> distinguished fellow and professor at carnegie melon as
well as eric jackson of spring owl asset management and an outspoken critic of management teams, including yahoo and viacomm. earnings in revenue beat expectations. a big win for ceo jack dorsey who, of course, runs two companies. the stock of square down more than 20% so far this year. prior to today's move. i did speak to dorsey last quarter about the path to profitability. >> square has been a very strong and really predictable business for us. and we're really happy about that because we feel like we have a real understanding of how the business grows and what it takes to move it forward and can really understand what to do next. >> predictable, of course being the keyword. how much of a victory is this quarter for jack dorsey? >> short term it's a great victory, long-term it's a
problem because square catches mass of competition from everywhere. and not only is card readers now, you have apple pay and new infrastructure. a lot of new technologies that could be developed that could really hurt the company in it's core products. and then the other business getting into also us is september to believe major competition. so i'm not that optimistic as just because of one quarter. >> mike, a lot of people look at a move like this, up 12% for a stock that's been beaten down and say it's probably just short covering. hold up of that is this? >> short covering is always an element of when you have a better than expected result in a stock that people really do did have a lot of ammo aimed at, i think. 14 and change just a couple of few months ago. so it's not as if this move today really undoes a lot of concerns, but it definitely was better than feared and at least kind of showed some fundamental momentum. >> and it's exactly eric the opposite move we saw in twitter after the quarter which was done 14%, but this is the first time
that analysts did not have any questions about the way jack dorsey spends his time and how he runs two businesses on the call. >> well, investors and analysts are funny that way. if you surprise expectations, you beat expectations and you put a few quarters together like that, saw right with the world. people want to believe in jack dorsey, people want to believe in square, and so, there was no question this was great quarter, great results, if you can keep doing more of these, putting more of these on the score board, what's not to like? >> i like this, i like this company, i like this company for a lot of reasons because it's going to own the small business world which it's doing quite well in and even if you think it's going to struggle competitively in the future, don't you look as a takeover target? don't you have to look that way? a year, two, three from now, somebody whether it's apple, american express, paypal, you name your guy who wants to take it out. >> well, they would have bought it by now if they were
interested. it's not as i maizing technology for apple companies that are benefit themselves. yes, there's an issue of getting the card readers everywhere. but that's what it is because some of the other large companies have others to take advantage of, apple really now has massive distribution and with apple pay, it's now done deals with all the major credit card playerers and with the banks. many other big companies coming in from a different perspective and if square was applied, it would have been done by now. that's my view. >> interestingly on the call they talked about the fact that they have larger merchants signing on, institutional investors participating in their lending product which is up sharply and they will be profitab profitable, at least on an adjusted basis this year, mike, that's got to count for something. >> it means that, you know, they are potentially gaining a little bit of share in this very crowded space. and i guess there's excitement over the sort of contacted solution for the credit cards,
which has been a point of frustration for the entire industry and consumers everywhere. >> meanwhile, we have a strong game for viacomm. comes ahead of a key ruling tomorrow where the red stones lawyers must defend his move to oust five viacomm directors. on the flip side, 21st century stocks, that stock falling on a miss on revenue. profit did top analyst estimates said the company wants to protect fox news's unique and important voice. eric, let's start with viacom, this is a company you've been critical of. it was thought that the quality of the quarter that the company put up would possibly shield them from having to ink a settlement sooner. what happens now? >> i think there's still an enormous heat on phil leap. they preannounced a bad quarter a few weeks aegs. they beat those lowered
expectations. if you compare this quarter to a year ago, period, it's obvious this kbaen is still in, you know, difficult position and on the call, tom the coo indicated there was a chance that revenues could drop mid to high i thinkle digits next year and also pointed to the leverage ratio which is a big concern for investors as being high over 2.5 times. so there's still pressure and to me to listen to them talk on the call. you think nothing was wrong. he was boasting about love and hip hop atlanta being a juggernaut for viacom. who needs walking dead and game of throws when you have love and hip hop atlanta. >> don't you think to yourself, okay, something is going to happen in terms of a catalyst until the next several months, new management or ultimately it's a takeover target? are you looking at the operations of the business anymore? >> as an investor. >> no, i mean, you know, you
listen top phil leap and you say what's the end game here? obviously how much it's going to take for you to leave this company basically is what it comes down to. there were settlement talks reported on last week that apparently broke down. i would expect that those would continue. he's got to go. i mean we said in our 99 page report, this is a bankrupt culture thanks to him. so yeah, something will happen, new leadership or into cbs, both of those could be wig bins for shareholders and so that's why we are in the stock and why we think there is still a lot of upside here. >> be back on the story of 21st century fox, executives on the call last night talked about moving quickly to stem the fallout from the roger ailes situation. i'm wondering, on the report card for crisis management, what grade would you give fox here? >> they haven't done it too well. the media followed this one immediately and take an lot of action. done a more severe clean-up. everyone now wonders about
what's really happening within fox. so i don't give them high marks. but nevertheless, i think fox has a very loyal, stable customer base, so they'll get over it because the people they are appealing to watch their channels religiously. so they can survive it. >> eric, you think the fact that the murdochs talked about the fact that the voice of fox will not change, is that meaning that there is going to be inherent stability in the business to you? >> well, i think so. i mean obviously that's been the big moneymaker for them and the company, and so it makes sense not to change it. i think the most promising part of the call last night for them was that the murdochs indicated that they're going to fulfill their remaining stock buybacks, but they hinted they're going to slow those in the future. and instead reinvest in the creative part of the business. and i think that's, that's note worthy. i think that's unique if the
immediate world, that's the right thing to do. we've all seen across a bunch of companies, not just media, they're that they're waning shareholder and buybacks as pooded to recreating the business. so viacom and other media companies would learn a thing or duofrom that point. >> mike, they've been a buyback machine though. they're raising the dividend too. >> they are, and i think there was sort of a modest but disappointment that in fact they didn't down scale a little bit their buyback intentions. i think off lot of investors in the big old media stock is that just one capital return, steadiness and capital return. even though eric says they're going to reinvest in growth, not every investor -- >> is it reinvesting growth or take somebody out? >> building a device. that's what this is and where you think they do it in a disappointed way or not is the question. >> finally, tesla shares, take a look where the they are this hour. they've been flirting with the flat line throughout the morning. revenue missed analyst estimates but ceo elon musk still
optimistic about the second half of the year, take a listen. >> reporter: we're aiming to do internally is to do better than 2,000 in sales and deliveries. and combined estimates. you know, i feel fairly optimistic about achieving that goal. yeah. i think so our core business is actually doing quite well. >> we are reminded every quarter that this is a company that operates by trial and r ror, musk saying he was in production hell until june. if you're an investor, what would you take away from the call? >> well the call sl saying the right thing, you've got to realize that this is the offer that we talked about about square. now elon has a vision, he has a long-term strategy. wl his announcement in massive plan, if you think about it, he could only be in the energy industry. he's a tesla consumer. i know what he's talking about.
and i would be the first to line up to buy his new product. very bumpy ride because that's the way it goes in the tech industry, especially when you're innovating like he is. but long-term, i see an amazing future with tesla. because i looked at the long-term technology brand. >> eric, the company did reiterate 500,000 vehicles in 2018, but that's a milestone that's quite a way's away, what does tesla have to do between now and then to shore up vers confidence? >> well, there's going to be a big gap between now and when they deliver the model three. some time next year, we don't know exactly when. and they have a history of slipping their dates. they spent a lot of time on the call talking about production, they didn't spend a lot of time talking about demand and basically they've had two quarters in a row where they haven't met vehicle delivery number expectations. and yet, they are still predicting delivering something like 50,000 cars between now and the end of the year. that would be sort of a -- you know, considering what the
trends have been, an astronomical jump in demand. so, you know, we're skeptical, we're short in the stock and we think if there's no risk to the downside here than upside, especially over the next year. >> they also dangled the carrot of the model live of those playing at home, pa spells out sexy, very musk-esk, is that enough for investors? >> well the investor is short term, this is why my friend is going to lose his shirt. it's like the short sellers had, you have to look at grand vision, these people are talking about technologies that could change the world. we're talking about impacting the transportation industry, impacting the energy industry and on the side, elon is actually on mars. so that's a vision and the amazon and the facebooks now. >> i want to -- look, i want to root for elon as much as anybody, look at the sew already city situation, have to raise a ton of money at some point.
so potential regulation coming up with the idea of automation, he says we're going see a fully autonomous vehicles that not only blow our minds, but blows his own mind. that may be coming. don't you think we'll see head wind before we get there? >> the question is whether you can get through those wins. >> yeah, short term, lots of bumpiness. long-term, you're looking at just like amazon, we were pessimistic, look at the tlerm vision that they had. facebook is the same story that long-term investments they were able to manage their way to it when you're producing hardware like elon is, it's hard. but long-term, he could, you know, really dominate many industries, and this is why i consider the lot more value able and the stock price shows. short term not, i agree. >> it's always about balancing a long-term vision with a short term reality. we'll see how this plays out. thank you both for joining us today.
let's get a check on the markets here. we have most markets holding pretty steady it looks like, dow barely up at all, about the flatline and treasure yields olding steady and oils as well. waiting patiently for the jobs number tomorrow. after earnings and revenues both my the estimates. expresences along with lower revenue from hotel books. >> and when "squawk alley" comes back, hawaiian banks opening. the company's ceo will join us live. new polls show a big bounce for hillary clinton after the democratic convention. but can that bump last until november? and nice game for shares of godaddy, revenue beating estimates. the company's ceo will join us in an exclosive, that's later on this hour, "squawk alley" will be back in a moment. hey gary, what are you doing? oh hey john, i'm connecting our brains so we can share our amazing trading knowledge. that's a great idea, but why don't you just go to thinkorswim's chat rooms where you can share strategies, ideas, even actual trades
first hawaiian bank, it's the largest bank ipo in nearly two years. and they are priced at $23 a share, that was the top end of the price range for the company. joining us now from the nasdaq and first on cnbc interview is bob harrison, the company's chairman and ceo. bob, welcome and congratulations on your stock pricing at the high end and just about to open, people are wondering though, what is a nice bank like you have in hawaii doing being owned by france's bmp in the first
place? >> we got a great relationship for many years. so the last 15 years, they've been a terrific owner of ours. >> it's mainly bmp i believe that is selling shares in the ipo today. what's the reason for that? is it just a strategic need to sort of realign it's portfolio or does the bank need capital? >> you know, i'll let them speak for themselves, they've been for 15 years now and really let us run the bank as we see fit. >> you know, i see you wearing a lei right now, you're probably one of the coolest heads in midtown for that fact. we think of hawaii as surfing, talk about where your demand is coming from, where people are borrowing and the state of business in hawaii. >> sure. hawaii is doing very well. we have a core market and also operations, but the economy has done well for many, many years, and really underpinned by three things, tourism, of course, the military, and government as well
as construction and real estate prices. >> bob, you know, i wonder what your growth prospects look like given that off strong market position already in hawaii. you have more than a third of the state's deposits for example. what is the growth outlook look like? >>ive with been able to grow organically for a long time. we feel the strategy and taking care of customers is really the difference that allowed us to be successful. in fact, we're 158 years old this month. >> you're the first bank going public in nearly -- not first, but the biggest going nbl near if two years. a lot of banks have said, you know, we're going to hold off for now or the demand isn't there. what were investors telling you when you took your story on the road? >> we really enjoyed meeting with a lot of new people and we
really have a great number of successful media. and i think the what we seen is a really good response. so we'll see where trading is later today, but we're excited. >> life as a public company, as a ceo and chairman, how are you preparing for that? >> well, i've been getting not a lot of sleep, i think that's the first criteria and spending a lot of time on arps. i think with those two out of the way, it's only upside from here. >> interestingly on the campaign trail, here in the continental u.s., we've had one side of the aisle talking about how the economy is doing so poorly that it needs to be shored up, on the other side, the last eight years have been the best in recent memory. since you are approaching the u.s. economy from sort of an outside observer standpoint, what are your thoughts? >> well, i think the economy and focussing on hawaii has been very strong. about 60% of our business is coming from the mainland u.s. and about 40% from the international locations.
probably about half of that 40% from japanese travelers. so we really see a nice balanced growth in our economy. and i think the national economy continues to do well. >> are there any policies beyond a simple rate hike that would make your business better? >> all bankers were looking for your option, but no, i think we work well with our regulated and don't see any issues with that. so business as sushl fine. >> well bob, we wish you the best of luck today when you open for trade. we'll keep our eye on the shares when they open. we appreciate your time this morning and congratulations again. >> thank you very much. appreciate it. >> bob harrison from first hawaiian bank. >> i think we should all be wearing leis this morning. major setback for intel and plans for wearable tech. the full story when we come back. ♪ but what's it cost to modernize a school district? what's critical thinking worth? a basketball costs about fourteen dollars.
what does it cost to build a new sports arena? what's team spirit worth? a telecommunications system isn't cheap. what's it worth to talk to your mom? what's the value of one more tree? a forest? a walk in the woods? what's the value of art? art open to the public. the value of capital is to create, not just wealth, but things that matter. morgan stanley. capital creates change.
because of overheating issues. customers have been complaining of discomfort, blistering, even burns. the company tried to fix that with software updates but nothing solved the problem. intel acquired the company behind the smart watch back in march of 2014 for a reported $100 million. the watch failed to capture even 1% of a wearable fitness tracking market in the two years it was on sale. and you're look at shares right now of intel, up 27 cents. >> do they know how many are out in the market? >> i was wondering if this measure was just a survey. let's see how many people actually bought one of these. >> i've seen a couple out in the wild. >> not a lot of luck with consumer hardware. >> internet of things -- >> the internet of things is what they're going for. >> here we go. >> so if you have a peak smart watch -- >> and the irony being heat management is one of the selling points. >> yeah. >> must not have intel inside. >> that's right. well next, when we get back,
machine guns in an attempt tom dislodge the militants and made it their main base of operations in the country. the aerial fight against zika carrying mosquitos has begun in florida. the first plane carrying insecticide left a miami airport earlier this morning. that plane will spray a ten-square mile area in miami's winwood district. power outage left much of anaheim in the dark last night, including disneyland. park goers posted to social media. thousands lost power, but it lasted less than an hour. and the oklahoma city thunder couldn't hold on to kevin durant, but star guard russell westbrook listen sticking around. he accepted an extension worth more than $85 million and expected to sign that deal today. congratulations to him. that is the news update this hour, let's get back downtown to "squawk alley," kayla. >> thank you, sue. markets in the uk and across europe are about to close in a
few seconds. london leading higher after the bank of cut interest rates for the fist time in seven years to try and stem some the of the damage post-brexit. lower them to 25 basis points. stimulus measures include expanding the bank's bond-buying program by about 60 billion pounds. at a news conference in london, mark kearny saying the bank would take quote whatever action it needed to achieve stability in light of brexit. party also warning that offsetting the economic impact of brexit would be challenging. >> we can immediately or fully offset the economic impacts of of a large structural shot. however, monetary policy can support the necessary adjustments of the uk economy during a period of heightened uncertainty. >> although the central bank hasn't yet had to step in and intervene in the currency market though, today the pound sterling sinking to an eight-day low on
that rate decision. the yield on the ten year uk guilt also falling today. look at where that is. currently at 0.65% on the ten year gilt. despite both moves have been moving higher today. led by standard chartered up by about 5%. lloyd's at loan one down by about # 1.5%. andrew. let's talk about politics. the post-convention bounce and lead over trump, john harwood has more on this story, john. >> reporter: andrew, donald trump and his aids say everything's doing fine with the campaign. donald trump said we've never been more united to a rally audience in florida yesterday. if you want to know where other republicans are panicked about the state of the campaign, take a look at these polls. first of all, national poll from fox news post-conventions, donald trump is down ten points to hillary clinton. 49, 39. then go to the state level,
these are swing states, states that donald trump is targeting, new hampshire, he's down 15 b s percentage points. look at a poll in pennsylvania, he's down 11 points. go up to michigan, detroit news poll, he's down nine points. and beyond those numbers in the presidential race, you've got the down ballot races republicans are concerned about. that new hampshire poll shows kelly ayotte down by ten points. governor hassan there, that's a state that republicans desperately want to win to hold on to the senate majority. pennsylvania, pat tumy is behind democratic challenger katie mcginnty only by a point, but that is an indication of the potential drag of a significant donald trump deficit and right now, we don't know that these numbers are will hold, it's very soon after the conventions, things may settle back down but the numbers now are consistent with republicans losing not only the senate, but possibly also the house. guys. >> okay, thank you for that,
john, we'll continue the conversation. we're joined by former senior advisor to the obama campaign and also cruz campaign spokesman, rick tyler. rick, you first, try to understand this, lots of talk about about an intervention that is supposed to happen. people inside trump's campaign saying it's not really happening. who knows. this is newt gingrich, he can't learn what he doesn't know because he doesn't know he doesn't know it. is it worth even trying, rick? >> well, it's always worth trying. and donald trump would be wise to listen to newt gingrich and giuliani. my understanding is that both of those gentleman had a conversation with trump. i don't know if there was one singular meeting. it's not particularly unusual that people would try to win in the campaign, but this seems to be more than that. it seems to be a course correction. and so look, this campaign is in real trouble. you're seeing donors now looking at the senate, the rnc should be looking at how they're going to keep the senate as a priority because the trump campaign and
look, i think this trump is probably ir remedial and will not change course, he's incapable of changing course. he's not proven that he can show discipline on the campaign trail and that's why you're seeing the poll numbers. and they are likely to hold if he doesn't change. >> rick, before i go to ben, there's been an idea floating, and i know trump supporters will say that somehow he will decide on his own to withdraw. do you think that's even plausible and what does the rnc do? >> it seems unlikely. there is a way to replace the nominee, it's under rule nine. it is unclear if they could intervene and replace him. i think he would have to do it voluntarily. rules are like legislation are written and they can always be stress tested, but in all likelihood, donald trump will remain on the ballot. the question is whether he's going to drag the whole ticket down in which case protecting the snats and house races are going to become extraordinarily expensive for the republican party. >> now the democrats have
smelled weakness on the other side. and there is some sense that hillary clinton's camp has been making calls to republicans to see which they can win over. we saw one high profile defection in meg witman this week. who else is up for grabs right now? >> off republican member of the house recording an ad saying he's going to stand up to donald trump. another retiring member from the state of new york making clear he'll support hillary clinton over donald trump. a bunch of former national security officials saying they don't want donald trump's hands on the nuclear button. something he's been callous about throughout the campaign. i think there's a real opportunity to reach moderates, to reach republicans. if you look into these polls, donald trump has identified his path to the presidency as being through the rust belt. the polls show he's down about ten points in the states of pennsylvania and michigan. he's losing many of the reagan democrats that went to the republican party while ronald reagan was president. >> and ben, let me take the
other side which is to say, maybe it's great that she's probably reaching out to republicans and they're taking her side, but when you see the billionaire class, if you will, whether you put meg witman in that class or michael bloomberg or the hedge fund manager announcing his support for hillary clinton at 24 hours. there's a whole group of people in this country if thubl sort of anti-establishment thing that's going on that may actually look at this and it could backfire, no? >> well, i think those are the only, not the only people who she's had supporting her. look at the convention, the most compelling testimonials for hillary clinton were the people who behind the scenes she's helped over the years. the 9/11 family that was devastated by the attacks -- >> oh no, i'm not -- i agree with you, i'm not suggesting that there's not support from her in other areas that are beneficial, i'm wondering whether the public display of support from what might be described as the establishment, wall street billionaire class
helps her or hurts her and whether she is would be better off getting their support and telling them to talk about it in a closet somewhere? >> well, i think people like warren buffett are very well respected. and he's made clear that his secretary shouldn't pay higher taxes on her income than him. so the question is, ideological alignment, and i think she's picked people like mike bloomberg and warren buffett who you are very well respected by the public to make that case. >> rick, just to build on andrew's question there, you know, a month ago, the big question was could hillary clinton appeal to the people to her left, the bernie sanders supporters, does this kind of movement toward republicans and moderates jeopardize that group for her? >> well, look, she seems to solidify her base. i believed that bernie sanders supporters might look at donald trump, i don't believe that today. i really don't think they have a choice other than to even not vote or vote for hillary clinton. she's making moves to the right. i do think andrew is right, that
being attracted to the billionaire class has an anti-establishment backlash, here's the problem. what would we be talking about today is the $400 million that it was sent to iran the same day the hostages were released. we'd be talking about the fact that hillary clinton said that the fbi said she was truthful and the fact that they did not. we'd be talking about the e-mails that are missing and the one thing that could happen in this campaign to really shake it up is if there are more e-mails to drop and depending on what's in those e-mails. that could change in the direction of this race. other than that, i think it's going the way it's going. >> well speaking of e-mails, rick, senate democrats have asked reportedly asked your former boss, ted cruz, to take up a hearing on trump's comments about russia suggesting they should hack into clinton's e-mails and find all of those missing e-mails. what's the likelihood he takes that up? >> you know, i think it's fairly unlikely. i mean, in a sense, i mean it's a serious issue. i don't know that trump -- my only opinion is that i don't know that trump understood what he said what he said, how
serious the issue is. i think he was being a little bit, as he said sarcastic and flippant, but it's dangerous to be sarcastic and flippant about those things. putin is watching. putin is already taken crimea, something that in ukraine which trump seems to be unaware of. i think putin is looking to gain more territory in ukraine and elsewhere, and he's sending direct signals to the russians that he would not stop them. and that could be very dangerous. >> final question for both gentlemen, paul ryan in all of this, getting sort of stuck in the middle. if you're paul ryan, what do you do? at this point? do you withdraw your support from donald trump? >> i don't endorse. that's the only thing left to be done. he make clear he'd speak out when he disagreed. donald trump attacked a gold star family. if that's not reason enough to unendorse, i don't know what is. >> well paul ryan's district is in in wisconsin, donald trump lost that district by 19 points to ted cruz.
paul ryan's numbers there are very low. look, probably helped him to have donald trump say he wasn't going to endorse him. here's the problem with conservatives like me, if we win the white house, what do we get? we won the house, we didn't get anything, won the senate, we didn't get anything, winning donald trump, who's in a fight with the speaker, what does that say about the prospects for a conservative legislative agenda going for? it looks like we'll get nothing. that's not encouraging. >> we have to leave the conversation here, appreciate the time, thank you. >> thanks. all right. when we come back, shares surging after the rest of the year. the ceo will join us in a cnbc exclusive. first, rick santelli, what are you watching this morning? >> i'm watching yields in every sovereign move down. somewhat the effects, the strangle hold central bankers have on markets. and in this case, bank of england seems to be causing a free for all that's going on. we're going to talk about everything that mr. kearny did today and what it may mean after the break.
huge victory for bill ackman. i spoke to the hedge fund manager a short time ago. hear what he's saying. big call on a stock we've been telling you about now for a week. you won't bereave why this analyst is getting on board now and on the eve of the olympics, halftime competition between underarmor, nike, and iowa dees who takes gold, silver, and
bronze. >> sounds good. meanwhile look at shares up first hawaiian which just opened for trading. priced at $23 a share. that was the high end of the range yesterday after the close. stock is currently up close to 5% after the open. just a little bit over a dollar and change. remember they raised about $485 million to honolulu based bank used to be owned by them and it is all shares being sold by them in today's offerings, still stock up 5%. >> and the redstone family and viacom soap opera continues. national amusement just out with a blistering statement and we have more on that story, julia. >> hey, andrew that's right, national musementings which is owns a majority of viacom shares coming out with a criticism of the company's earnings which were out this morning. the company reporting a 28.5% decline in earnings per share. the statement says, quote, the
performance continues to continue the highlight to need the leadership. the company is national amusement have called for. in recent years, the senior manager overseed the revenue growth earnings, operating performance, financial capacity and shareholders returns. rarnging at or near the bottom of industry across many of these metrics. now the two-pages release details many of the areaings in which they have fallen short of the media space. i want to highlight one key area here where they single out the ceo, this is all part of the many lawsuits that are job going by sherry and some of the red stones trying to unseat police as ceo of the company. they say he is the third highest paid ceo in the united states and among the worst as measured by paid for performance including his prenegotiated golden parachute. he stands for half a billion dollars for tenure that is seen a market decline of one of the
nation's greatest media companies. three laults ongoing. they're all going to be heard in the month of october. certainly a battle that's worth watching, back over to you. >> thank you for that, julia. interesting. crazy story. >> he has been handsomely paid for a long time, that's not news, it's only about ammunition because now they're sparring. >> the question is ultimately when this all gets resolved. >> this didn't seem like a step toward a settlement. >> exactly. >> which is some of the reasons. >> yeah. >> anyway, when we come back, more to talk about. strong move for godaddy. analyst estimates go daddy ceo blake irving is going to join us right here on "squawk alley" when we return.
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go daddy reporting a narrow loss with a revenue rise of 16% in their second quarter earn pgs. take a look right now at the stock. $3.52, up 12%. that's great. the company is getting strong guidance going forward. let's take a closer look with go daddy, with the ceo, blake rks iving, thanks for joining us. >> thanks. >> tell us what's going on here, you blew it out, seen the numbers, and more importantly you're guiding to much better numbers than people expected. what's changed? >> nothing's really changed, andrew. we did, we delivered above the high end of our guidance. we raised the guide towards the end of the year.
the business and strategy is working. so we've entered 56 new markets over the past three years. and i've really characterized it as we've been working hard over the last three years to build an international, global business that's targeted at helping the very helping the small business and that strategy is working really well. now it's time for us to start growing and setting the foundation and building on top of that for the next three years. we've literally doubled revenues and doubled our earnings over the past four years and we're setting out to do that again for the next four years. >> flesh out that strategy about serving small businesses in various ways. is that the way you will continue to pursue that market? >> we believe there's a very small business person out there, you can call them somebody that's got less than five employees and they have been served by companies that gave them enterprise software or consumer software and said this is fine for you.
we've been building software that allows them to get a digital presence and run their back office and we're extending the depth of our product line globally and making it possible for them to reach customers, acquire customers and retain customers with software built for them whether it's from another provider that we've made for them or we're building it ourselves. >> this goes to the organic versus acquisition issue. to the extent there are no technologies you think you have to offer to continue the pace of this growth growing is it new stuff you plan to requegrow on own? >> it's a good question. there are a lot of companies that are doing pieces of what we do and our customers can say we'd like you to provide a second line phone service for me or help me with marketing with customers or do back office a
little bit better and there's companies that are doing each one of those things but their acquisition costs are so high it's hard for them to make a scale play. we can scale that software up with our low acquisition costs and our brand globally and take those things and they're not for customer growth, it's for grabbing technology and integrating technology across the product line and growing from there. we just acquired a company called freedom voice that will close in the third quarter that is an internet company and it provides second line phone service for a small business because small businesses are individuals that are trying do two different roles from one phone so they want to be able to tell if it's a customer calling or their junior high school kids' teacher and have the appropriate response for them. that kind of stuff is really understanding your customers so well that you're building software that's perfect for
them. >> to the extent you have a pretty good pulse on the small business owner, not just here in the u.s. but globally, is there any great surprise in terms of what's going on with small businesses around the world? >> we don't run a cyclical business but what we find is when the economy starts to shutter a little bit and maybe larger companies start to layoff employees, individuals tend to rely on themselves and say you know i've always thought i might want to start my own business and now i have another defensive reason to do it so they start taking that step. if you look through the last ten years when we've had up and down cycles in the economy, godaddy has done really well and has had consistent growth through those periods. so the economy doesn't effect the business that much. >> okay. we're going to leave it there. congratulations on the earnings report and we look forward to seeing you again soon. >> thanks andrew.
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of course everybody is just buzzing around every water cooler in this building regarding mark karney and his policy. there's one universal positive, there's one universal thumbs up he's getting and that's how he tried to differentiate those going on the path of negative interest rates versus his outlook which he doesn't believe in negative interest rates. that's great but here is the problem. the policy stranglehold and it is because policy is contagious, stimulus overseas gets reconstituted, it ends up everywhere and it has an effect everywhere. look at all global sovereigns today and bench mark them. it's more than that. the butterfly effects, so he's
at 25 basis points. i don't worry so much about the rate. i think the easing and the 10 billion in corporates which is deemed small, but it's not about being small, it's about the butterfly effect and it's quite strong. corporate land is hot, hot, hot. my people at cnbc tell me and they're following this closely in is the like the sixth largest week of the year and the sixth largest week ever in terms of corporate issuance. close to 44 billion. if you look at 2016 alone it's approaching 850 billion and we still have more on tap like cater pillar and others today. you can call it whatever you want but the notion that this money whether it buys back stock or pays dividend it keeps the gain going. investors don't complain loudly because all these things put
checks in their pockets but there's big negatives here that no matter what he thinks of negative interest rates or he doesn't like them the adjustment by everybody else to his policy and their policy to his policy their butterfly effect gives them more negative in countries where they're negative or it gets them closer to negative. what type of insurance does he have about a real problem in the future. this is coming from a group that totally miscalculated the outcome of brexit. it seems fine if you look at the markets post june 23rd. >> no one is wanting to buy this market. >> the markets get themselves into a neutral position before you have that big news. >> we have linked reporting after the bell. >> maybe more color on how
linked in is going to fit in with microsoft. >> we'll see how the afternoon trade shapes up. we have the jobs report tomorrow which everyone is awaiting. >> we haven't talked about the most important story of the day which is this new apple show that's going to have gwynn eth paltrow doing apps. >> thanks. we'll see you soon. for now over to the halftime report. welcome to the halftime robert. bill ackman's big win, the manager selling out of canadian pacific, an investment that will go down as one of the biggest windfalls of his career. i spoke with him a short time ago and he told me peshing squair made $2.6 billion on canadian pacific. he said it's a great example of