tv Squawk Alley CNBC October 20, 2017 11:00am-12:00pm EDT
helped by the financial sector, which is on pace for its first close in a decade, led by synchrony financial reporting upbeat results, that stock up nearly 5%. also worth pointing out shares of the big bang's jpmorgan, goldman sachs, and bank of america are up in early trade. now back downtown for the start of "squawk alley." hi, carl >> seema, thanks very much good morning, it's 11:00 a.m. at ge headquarters in boston, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪
welcome to "squawk alley," i'm carl quintanilla, john fortt, sara eisen at post 9 with reaction from the interview with flannery thanks for spending extra minutes with you >> david faber, our colleague, is commended for doing exactly what he's done all his career, asked all tough questions. i was impressed with mr. flannery, very impressed he did a bill parcells, bill belichick thing. he didn't need to tell you how bad it was and how the previous coach didn't do a good job he's focused on the future he used words i have said to him, you know, horrible, horrendous he was much tougher on ge than i was, and i commend him for that. and he will say he is underpromised that doesn't mean he can overdeliver initially, but i was very pleased i thought he killed it, frankly, i thought he killed it, and he
made you feel that this was going to be a new broom sweeping clean, and i think that's just what has to happen, but going forward we're going to speak about flannery's ge, but he has to take some tough action. cash flow is not good. i was saying, boy, i bet he says cash flow is just okay no, he says cash flow is horrible this is my kind of guy >> for the viewers that missed it in the last hour, this is sound from what flannery told david faber. we'll get cramer's reaction after this piece of tape >> the cash flow for 2017 is horrible, $7 billion number, it's way off of our expectations, anyone's expectations that is not a -- that's not the new normal $7 billion is not the new normal there's a number of steps we're going to take to improve that significantly in 2018 and beyond >> couple things didn't make any promises on the dividend, and seems to want to get operationally things into a place he wants before you start talking about portfolio optionalty >> i think that's great.
you kept bringing up a point that's really important. the whole shareholder base is indeed turning over. like i said, i'm not saying bottom, because he didn't say it was, but when people say wait a second, maybe they can only pay a dividend that requires a 15%, 20% haircut, but what i liked about what he said was, at the end, two things he said at the end were great really, the problems are concentrated in power. he did turn around health care, didn't give you an exact time how long it took him, but he did it i liked the fact it seemed it was somewhat ring fest, but what i really love, yes, we haven't been accountable and the board has to chase usually, a ceo does not say the board has to change. >> jim, jim, correct me if i'm wrong here, but this seemed to me to be extremely unusual for this level of -- i don't know if you want to call it candor, short of a scandal this was almost wells fargo level talk about what had happened prior to this ceo coming in.
made me wonder is it even worse than it looks? because normally you're trying to be nice to the previous guy that wasn't happening here >> thank you this is extraordinary. this was an extraordinary moment in business. what he basically did was a complete repudiation of the past without being personal >> it was almost personal, without saying the name, it was personal >> mr. flannery is an honorable man, and i think he doesn't want to devolve into that, but yes. that's what makes me think the stock's not down big, because here's a man who came on tv and told the truth about how horrible things are, so, therefore, he did not sugar coat it had he sugar coated it and we were just in chapter two of this charade, the dance that is ge, we would be -- that stock would be substantially lower, so yes, he did it the belichick way. little bit of a smile. i wouldn't be surprised if he shows up with a hoodie on the sidelines. this guy is tough, but he's funny, he's a sports fan, but
he's tough and he is going to demand a level of rigor how many times did he use the word rigor this guy is going to make this company over in a way that we're going to like, but it's going to take a long time >> so what now, how as an investor do you look for signs of progress on the big issues that he's already changing, culture, compensation, re-examining the cost control, that sort of thing >> i would say look for one thing only with him, which is cash he's about cash, cash accounting, he's not about the kind of accounting that the company used to use. he's about cash and cash flow, and when you talk about -- it's about operating cash flow. that has to get better the idea they had negative cash flow in the first quarter was an abomination. who said it was? he said it was an abomination. i like the fact he doesn't sugar coat how bad it was. it's going to be good. >> tactically here, if you're not in, do you wait for the 13th >> yes, i think you do >> you do?
>> only because there are people who didn't watch today and will say wait a second, i bought that for a way to be able to stay calm and i get frightened when there's a dividend cut we had dividend cuts before, and it's not a value stock yet, but it sells for 20 times earnings, so it's more expensive than honeywell, eaton, lockheed martin, boeing, so you have a stock that's expensive, but i love he did talk about other divisions that are good. i need to find out how much he can cut off in the long-term care policies that they are stuck with aig had to make a deal with warren buffett and i know he knows it he pointedly mentioned it it in his letter >> right, so incremental bad news on that front or the dividend front takes him to what, 21 >> yeah, i think there are people always surprised, but 21
seems right. if he's correct about how the other businesses are doing, and this is not a man who overpromises i felt better. that was another takeaway, frankly. i was worried about more than just power health care he's got under control. it's got to be more like dan non. en he understands that. aerospace is pristine and wasn't ruined by the previous administration >> yeah, couple other bits of sound here from flannery talking about both the internal review and what he called capital allocation, one of his three big priorities >> i spent really 90 days exhaustive review of the whole company, the businesses, our culture, corporate spending. everything that the company has been up for examination. every stone turned no sacred cows so that's what we've been doing. as i looked across the company, really three things that keep coming up that we need to work
on, culture, our operating rigor, and capital allocation. if you look at those three things, more candor, transparency, execution, tighter operations, more focus on where we're investing, putting money, concentrating the capital. when i look at all of these capital allocation quite rationally, if it makes sense to pay a dividend, pay a dividend if it makes sense to buy a stock back, buy a stock back, so i don't view it emotionally, really, it's all around what's the best use of the company's resources, management capital, financial capital, and how does that accrue to the benefit of the owners >> he called himself the insider's outsider, because although he's a 30-year vet, not a lot of people knew him and he's coming in with a set of fresh eyes >> those who do know him say, one, he's funny, and, two, that he's tougher than anyone who's been at that company in a very long time since jack welch he'll get rid of the bottom 10%.
he will cull he will get his team he will have his team of spartans in there. i'm not kidding. each division will get a team of spartans that believe in flannery and everybody else is going to go that's his style you either believe -- it's get on flannery's team or go home. and i like that, too >> so you think he is welchian in that way? >> yes, yes. i know people who swear by this man, but he's going to do root and branch, because he knows he has to you talked about the bears with sells on the esearch, he has tremendous respect for their work he's not in denial you know, he's in the bleachers. he's not in the front row. he's not at courtside, this man. he wants to earn your respect. i thought he -- again, he killed it today >> jim, that will work to fix what's wrong perhaps, but will it work to build what's next right now we're so focused on the parts of ge that are gone
wrong, cash flow that needs to be fixed ge wants to be talking about the internet of things, they want to be talking about how they are working in the cloud and doing commercials with nerds and drawing software engineers can he do that >> i think that's the old guys i think he's realizing he has a couple businesses that are good he's got to get the cash flow. he's a long way from being able to do any of that talk he's not going to repudiate the notion that it's a next generation industrial company, but he knows that it has to be done on a cash basis he has to take huge charges, i think. that was a very ill advised acquisition at the top i don't know what he can do with that he needs to sell locomotive there isn't a lot of business in the world these days he's got some orders he needs to figure out how to do accounting better for turbines so it's more transparent he has a year's worth before he can think about trying to buy. i thought it was interesting, technologies swooped in and
bought rockwell collins because flannery would buy rockwell collins. that's what he'll do he's going to get back to being a great american industrial. >> you don't have a shopping list ready to submit to him? >> no, no, no. he has got to get draft choices, he's got to rebuild. he has to put the past behind him. can he be andy reid, sorry, tough loss last night where he goes 2-14, 14-2? no this team is what i talk with ge i say, you know, you're a last place team and he says his goal is to get into the playoffs. and until he gets in the playoffs, we're not going to be able to change the company, but this man is going to get into the playoffs he will get them to the playoffs >> they are not cheering for you, i don't think >> i like that interview >> thank you for coming in >> thank you >> jim cramer on ge. we're going to take you back to post 5 in this case and sea, that's ticker se >> good ticker
>> digital e-commerce entertainment company out of east asia with its ipo >> yeah, this is a play on online gaming. they license the ten cent online gaming, also other businesses and e-commerce they are trying to expand, but more than 90% of revenues is actually gaming and it's based out of singapore. we've seen a few big high profile and seemingly successful ipos out of asia here at the new york stock exchange. we're also going to talk to tom farley on this resurgence. remember the drought in ipos >> as jim said in the 9:00 a.m. hour, no froth until you start seeing a wave of secondaries in your view. >> bothers me, ken fischer with a fabulous discourse this morning on "squawk box" about the notion of when the investment bankers start pumping out junk we're not there yet. >> we're going to hopefully talk to the ceo over here at post 9 >> shares of apple in the meantime moving higher the stock's coming off its worst drop since late august, today lifting the curtain on a new
retail strategy and flagship in chicago. let's get to josh lipton for more, josh >> good morning, carl. there are nine apple retail stores here in the chicagoland area the one you all are looking at behind me, this is the newest. it's going to open its doors for the first time at 5:00 p.m. local. apple also says this is the most ambitious store ever, so let's take a quick tour. on top of the store you have a carbon fiber roof, designed to be as thin as possible some people say it looks like a mac. this store is actually going to replace an existing apple store here, which has attracted more than 23 million customers since it opened in 2003. inside, granite stair cases lead down to this riverfront retail area, where the products are going to be displayed. there's also a gathering place around a giant video wall called a forum. apple now has 497 stores in 19 countries and they are very productive relative to others,
generating more than $5,000 in sales per square foot, and that is way more than any other retailer that e-marketer tracks. retail chief angela ahrens now refers to the stores as town squares, meaning they are places you're going to meet up with friends and family, listen to musicians, maybe take a class on everything from photography, to entrepreneurship retail consultant yann niffen agrees with the overall strategy and says apple does have some advantages in this retail fight. it basically has unlimited resources. you're talking about a company that sits on a cash mountain of more than $260 billion, also a loyal fan base limited in some sense of what she can do, after all, a compelling in-store experience can support great products, but it can't in the end create demand for them. guys, back to you. >> amazing, the architecture there out of, i think, it's foster the architect i can't wait to see more of it, josh, thank you for that josh lipton in chicago
still a very busy hour ahead on "squawk alley." we'll talk exclusively with sacramento kings owner and investor on why he thinks amazon should build its headquarters in his ohm city tom farley will join us. and later an exclusive mind the scenes look at kobe bryant's new career when "squawk alley" continues. at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
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our steve leishman is back at hq with more on the results who is it, steve >> here it is, two different names. wall street predicting president trump will pick jay powell, but who does it want it wants the current fed chair, janet yellen 47 responses we got from economists, fund managers, strategists. 44% saying that he should pick yellen, but about 45% saying he will pick powell john taylor in third place on both the will and the shoulder and then taking a look at the next rung here, former fed governor kevin warsh and gary cohn now let's look at this, what's it mean for monetary policy and interest rates
we asked the question, what policy would the candidate have relative to current policy warsh and taylor both seen as more hawkish, powell right around neutral, gary cohn also, as well, seen as neutral relative to current policy now, in 8 of 9 categories yellen judged to be the best choice, including best for thoughts, growth, managing a financial crisis, the exit policy, and best for unemployment. taylor judged best for keeping inflation stable one more thing i want to show you here, take a look at the predictive markets we have powell in the lead in terms of people putting money on there. pretty close to our results. warsh in second place, cohn higher than before, and yellen and taylor now at the bottom sara >> seems like a politically palatable choice, as well, pleasing the democrats as a yellen ally, pleasing the republicans because he's republican, has private sector experience we'll see what happens, steve. the intrigue is building >> watching and reporting
well, it's earnings season once again. >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.
. ge lowering its outlook, big miss on the bottom line. john flannery joining cnbc exclusively in the last hour with candid comments, including on belt tightening when it comes to the company's use of private planes take a listen. >> it's not an insignificant cost, but clearly a message of, guys, we're not performing for investors. that's our task. so we don't fly around, you know, planes and company cars. so, to me, it's pretty straight forward thing that we have to tighten the belt, lead by example, and we have to run the company like we own it for the benefit of our owners. >> let's bring in research founding partner and ceo scott
davis, ranked as the number one multiindustry analyst on the street since 2010. scott, welcome so, you're buying what he's selling, you think the worst is behind us with ge? >> i'm buying, buying today. i heard jim say wait, but i don't think you wait stock is acting great, flannery crushed the cnbc interview, did a great job on the conference call any employee of ge hasn't got the message today they need to step up and get the job don't isn't going to be around too long >> what do you compare this to have you seen this before? >> dave cody, 2003 honeywell, almost identical similarly broken story, had to come in and throw his predecessor under the bus, had terrible cash flow, had to grow the cash flow faster than earnings stock price was almost identical, honeywell bottomed, and from there an eight bagger >> what are we going to see? he says everything is on the table. are we going to see businesses
spun off, besides the cost cuts and cultural changes, what does this look like >> look, we spoke this summer. i said you have two choices, either fix it or fix it and kill it or kill it call it three choices. right now he's fixing it, but he really needs to -- this is $135 billion conglomerate that's archaic, i think you need to spin off health care, i think you need to sell off transportation, all these other businesses that are ancillary and just focus on being a global infrastructure company >> so, this morning quoted as saying the pressure to break this up just went through the roof is that not true after hearing what he said on the call >> i think he bought himself a little bit of time, but not a lot. the health care business alone is worth around $65 billion and the market cap is down to, you know, well below $200. at some point putting an actress on your board it's a value creating step, right >> but you would give him 18 and 19 >> i wouldn't give him that time give him six months.
>> really? >> this is the new world ceos don't get two years to prove themselves anymore you know, this is six months >> and health care you would put first on the list? >> absolutely. it's a great business. it shouldn't be within ge anymore, though. >> so in six months we see if this is honeywell or hp? >> yeah. exactly. >> they split it up. i have lost track of how many times hp has split into different pieces, but i'm not sure that did investorsthe mos long term. >> underlying assets have to be good if they aren't, you're in trouble. ge has good assets, it's just been underperforming for a really long period of time you can't make decisions overnight, but in six months, i think he's got six months to really show a lot of progress or really you think ed garden is going to sit around on the board and say nothing? >> what's going to happen to the dividend >> i almost don't think it matters. >> really? >> look, you're generating $7
billion in cash flow, $8 billion dividend we need to grow cash flow to offset the dividend, exactly what we saw in 2003 in honeywell, but the stock is already discounting a cut already, and i don't think you need to cut it, but if he does, then so be it. >> if you're buying today, 12-month target? >> if he can do anything at all to create value, it's a $30 stock. it's really as simple as that. similar to honeywell was the same way beelined from 20 to 30 once dave cody got the train back on the tracks >> big story, you're getting it exclusively here on cnbc scott davis, thanks for joining us >> you're welcome. when we come back, sacramento kings owner vivek ranadive on the bid to lure amazon's second headquarters to california's capital city. as we head into retirement. it's why brighthouse financial is committed to help protect what you've earned and ensure it lasts.
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big news out of washington, the senate passing a budget resolution late last night along party lines. senator rand paul was the only republican to vote against it. this is a crucial step towards the president's goal of passing a tax plan this year new video game is going viral and it's related to china's
party congress in beijing. tech giant has a game called "excellent speech: clap for xi jinping. it asks users to clap for the chinese leader by tapping on their screens as many times as they can in a span of 19 seconds. the game had been played more than 400 million times in a span of about 24 hours, and as of yesterday, users had logged more than a billion claps the los angeles dodgers won the national league pennant last night. they drubbed the chicago cubs in game five with a score of 11-1 the dodgers head to the world series for the first time since 1988 they'll face either the new york yankees or houston astros. this one's hard for me to read bad news for the finishers of sunday's pnc milwaukee marathon. the race course was about eight-tenths of a mile too short. that means runners won't be able to use their times to qualify for more prestigious marathons like boston's. the race director apologized for the, quote, human error, but this is the second year in a row
the measurement was off. last year it was a mile and a half too long. sorry, half mile too long. that hurts so much that's it for your cnbc news update at this hour. back to you, carl. they had one job >> good luck getting entrants next year. thank you. let's get to seema mody with the european close hey, seema >> stocks mostly higher in europe, but the broader markets are on track to snap a five-week winning streak today's two big winners are out of sweden, starting with volvo, trading at a record high quarterly earnings beating forecast on stronger demand for heavy trucks the company also boosting full year guidance for truck markets in both europe and north america. volvo shares, keep in mind, up 55% so far this year meantime, telecom equipment maker erickson getting a much needed lift, despite posting a steeper than expected quarterly loss and another decline in sales amid heightened
competition from chinese rivals. ericsson's ceo says the company is on track, citing slight sales growth in its networking business that stock up 8% and check out the banks today. news of the u.s. senate passing a budget resolution last night and moving a step closer to tax reform is providing a global lift to banking shares in the uk, standard chartered, barclays, royal bank of scotland all in the green we're going to end with spain. likely to be a pivotal weekend in the standoff between spain and its catalonia region, which is seeking independence. prime minister rajoy is calling for an emergency cabinet meeting tomorrow to reveal measures stripping catalonia of its autonomy earlier today in brussels rajoy said he's gained support from opposition and centrist parties across spain and industry experts say tourism to catalonia has slumped by 15% in the two weeks since the region's referendum vote.
guys, back over to you >> all right, seema, thank you very much for that sacramento narrowly beat the deadline to submit its name to host amazon's second headquarters the effort is being led jointly by the sacramento mayor, darrell steinberg, and the owner of the kings, vivek ranadive. we're joined in an exclusive by the kings' owner vivek, good to have you back good morning >> good morning, thank you for having me. >> we've been hearing the pitches all week, all month long from chicago we've had new york reps here on our set. what's the case for sacramento >> it's really simple, carl. as a guy that founded a tech company, you asked three questions, one, do we have the workforce, and our megaregion has the largest s.t.e.m. workforce in the country we also produce the most s.t.e.m. graduates every year. the second question you ask is, is it a good place to live and within our mecca region, sacramento is the best place to live housing costs are a quarter of
what they would be in the bay area or san francisco, but number three is the most important, which is can we execute, and i used to own the golden state warriors and then bought the kings to save them and keep them in sacramento, and i have to give a personal guarantee to the nba that i would have a new arena built by 2017 now, the state passed a law for me, the city provided financing and fast tracked the permitting process, so i was able to get an arena built in two years, one year ahead of the deadline, so we got the workforce, we're a great place to live, and nobody can execute like we can. >> vivek, i used to live out in the bay area, so i'm very familiar with sacramento a lot of my friends moved up there for some of the regions that you mentioned, but the one strike it seems against sacramento is the issue of a thriving urban center. people tend to move out there into suburbs and exurbs, not necessarily into the city. is that something that sacramento can address or does address in this bid?
>> well, we have changed that. we've invested a billion into the downtown employment is up 40% there's a hundred new businesses that opened up, and our downtown commons is the place to be it's the new global communal fireplace. that's where people come to celebrate, to watch sports, to watch concerts our arena is in the top five in terms of concert venues in the world. so in terms of food, in terms of entertainment, in terms of art, sacramento is the place to be now. it's the city of the future. >> i've got to ask you, vivek, there's a piece in "current affairs" that says this whole contest for headquarters 2 is a race to the bottom, that it gives bezos huge leverage over these cities and the more a city is struggling, the more they need outside investment, the more they are willing to give in terms of incentives. how fair is this >> i don't think it's true i think that it's all about
mega rejons now, and we have 50 million square feet of shovel-ready space, so i believe it's a win-win we also have a great mayor n in fact, our mayor was the president of the senate, passed a law that allowed me to build the arena. he also worked with amazon to help with regulations that were beneficial for amazon, so to me amazon is the first company of the digital age. i know you guys are an investment channel take all your money and put it on amazon, it's a great company, and double down on sacramento. >> can i just ask you, vivek, about another hot topic that you've been outspoken before on and that's still in the news very much so, the nfl. you said you support the players taking the knee and you would support that on your own team, but now that we've had this sort of two-day meeting of the nfl owners, we got the upshot, they want players to stand for the anthem, but they can't mandate it do you think the nfl is handling this right >> well, i think that i
personally love the national anthem, and i hold my hand to my heart and i stand, but we have amazing players in the nba and in the nfl, as well, and so to them it's a matter of free speech and i personally support our players and i think that if they want to kneel, then it's up to them. i don't think it represents how patriotic they are or love for their country. i do believe that the nfl is heading in the right direction i think our league, the nba, has handled this really well everybody stands up, but also speak with our actions and what we see is our players are very, very active in the community >> vivek, back to this issue of incentives for amazon, and i guess for any tech company, how far is too far you said you think this is a good deal for cities to woo
amazon, but what should cities not offer? how far would be too far >> i think it's an all-out war right now. you know, if you think about it, the new country is the city state. the concept of countries is new, and full nation states, we had city states, so this is an all-out war to get amazon. i believe that sacramento is the best place california buys more amazon products and it produces more amazon products, so we're extreme extremely incented to make sure amazon makes its next headquarters in the sacramento area >> i guess that makes amazon helen of troy. we can't wait to see the results of this highly public contest. vivek, thanks for coming on. best of luck to you. vivek ranadive, and a quick programming note "power lunch" will have houston rockets owner sitting down with brian sullivan in houston for a "power lunch" interview you do not want to miss when we return, we'll talk
to the nyc's president tom farley on the state of tech ipos in 2017, talk about these reports that lyft may plan to go public next year we'll find out watching shares of tesla, jpm cuts price target to 195 saying it's concerned not just about model 3 deliveries, but about margins and ofabity wnpritildo the road "squawk alley" is back in a minute feel that? that's the beat of global markets, the rhythm of the world. for most, the cadence of today. to us, the pace of tomorrow. it's people and machines uncovering opportunity. cloud computing providing endless capacity. blockchain making transactions safer and faster. new markets born where they weren't before. with ingenuity, technologies, and markets expertise we create the possible.
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roads and in the cross hairs why kevin o'leary says now is the time to buy it you'll first want to see the massive options activity, though, that just popped up in that stock plus, dan loeb is buying, it's searing right now should you get in, as well and a rare interview today with the woman in charge of apple's retail stores. and we'll reveal the sales strategy for the new iphone first on cnbc, first on "halftime report" starting noon eastern. guys, see you in a bit >> see you then. looking forward to that interview, scott, thank you. ten-cent backed c sea limited going public the e-commerce and gaming company already one of asia's biggest digital entertainment platforms and joining us here at post 9 the company's chairman and ceo, as well as tom farley, president of the new york stock exchange, welcome, gentlemen >> good morning. >> good morning. >> so you founded this company in 2009. we were just hearing a little bit about the history. mostly online gaming, but you also do e-commerce and digital
payments talk about what you built. >> sure, sure. my entrepreneur journey started with mypassion for online games, playing games with my friends late at night, so i followed that passion to build our first business arena, the game business in 2009. and the business became profitable early on and has become the largest online game platform in our region so as we like to build arena, build a strong foundation for our company, and more importantly, we acquired a crucial asset, our local knowledge and our local knowledge how to build and the skill in each of our seven markets. and this is the core, home court advantage. with that advantage we launched our e-commerce business in 2015, and the business has been doing great and we focus on three things number one, we went straight to mobile and number two, we chose the marketplace approach and number three, so we focus on the most profitable categories,
such as women's fashion, accessories, and health and beauty the result have been fantastic, and just reached over $1 billion u.s. dollar this year. so as we grow and realize we needed to provide a payment solution for our consumers less than half our region's population has a bank account and even fewer have a credit card so we turned that solution into a new business line pay. yeah >> i think you're the second newly minted billionaire founder from asia we've had here at the new york stock exchange this week but the ipo process in the u.s. was supposed to be broken, too much regulation, nobody wants to go public. why are you here >> well, i mean, this is, to me, this is a dream come true. and even very early in the company always had this picture in my mind one day i'll bring my company to list it on nyse this is very clear to me >> because >> being a public company, it's
wonderful for us number one, and for the new category we raised and we're going to separate our growth and also like being a public company, our stock becomes a currency for our, like, to do some acquisition in our markets. and the second is, this is great for our employees. our employees have been working so hard for the past eight, nine years, and this is the time to reward them. we want to motivate them and make them feel proud of our company. and moving forward, i know we're going to have a more flexibility to have a stock-based compensation for our employees and we want to attract more great talent for our company >> got to ask you, tom, about the environment we're in i think six asian/chinese ipos this year, right things pricing well. both overnight and in the morning. what's going on? >> you know, in the u.s. amongst the tech companies there has been this idea of it's better to go public later. that's not so with tech companies globally
and john mentioned we have the ipo on wednesday, we have the sea limited ipo today, and i'll tell you, we have a number of others in the pipeline, as well. i suspect you're going to see a coming around of american tech companies, as well i think 2018, touchwood could be a year where we have some interesting tech companies come into market. >> like who? >> i can't say, sara, you know that >> are you talking to lyft >> which makes the papers today, right? >> right, right. >> speculation about '18 >> lyft's a great company, and if there's a great company contemplating an ipo, we're going to have a conversation with them. i don't want to say anything more about lyft in particular, but -- >> at what point do you start to think prices are too enthusiastic, too frothy >> you know, it's not just an american story if you look at world indexes, they are at all-time highs, as well it is a little bit unique that not only are these prices at all-time high, but volatility is at all-time lows
in some respects as low as it was in the kennedy administration that's really good for the ipo market if there's a pull back in asset prices and volatility pops up, i don't think it will completely undermine the ipo market, because volatility is so historically low it is a good market right now. sorry, sara. >> we're seeing all types of ipos and some of them are still not profitable, including your company. is there a path to profits we have seen the losses accelerate as you've spent on marketing, i assume, and growing the business >> very optimistic if you look at our e-commerce business, we put a lot of investment because we believe this is a great time to invest into this business in our region, so we captured a window of opportunity in 2014 and '15, and most of the people in our region get their first-time internet experience through their smartphone with a data plan and start to buy and sell things on social media platform like facebook, and we created this platform and offered them the social media experience at
the same time we solved the seller's pain, such as the logistics integration, payment integration. so we are building a great business now we have a 1.6 million sellers, and our platform and every buyer, every month, they buy from our platforms three to four times. it is a wonderful time to invest into this business >> does this smartphone buying season matter for you as much as it does for app makers in the u.s. >> no, not at all. >> the smartphone buying season doesn't? >> no. >> you hear certain buzz words when it comes to ipos. we wonder what it takes to get a deal done, we're hearing payments what else is hot right now in terms of investor appetite for new listings >> it's a hard question to answer, because the plain truth is very broad based. this year we've had 66 ipos nearly double last year already. the amount raised is nearly double and it's across almost every single industry, energy,
biotech, tech. i'm particularly proud of this ipo, because it's the 30th consecutive large ipo to select the new york stock exchange, so thank you, forrest, but even if you look at the list, only 12 of those are tech and the other 18 are split across many, many industries. well, we'll be here to talk to you as we get more, as you predict, and forrest, thank you very much nice to meet you. >> nice to meet you. thanks for having us. >> forrest li. >> thanks. >> up next, from ab all-star to business mannman we get an exclusive behind-the-scenes look at kobe, inc. with the man himself. back in a minute
basketball legend kobe bryant wants to be number one again, and this time he's trying it in business our eric chemmi got a behind-the-scenes look and joins us here at post nine to tell us about it. >> in the beverage business, no less ma'am bamentality translates to the business world, today. we caught up with kobe bryant, the third biggest investor in the body armor sports drink and talked about his plans to take on gatorade and power aid and make his brand number one. >> we want to see the success of this company in 2025 we want to be the number one sports drink, right, that means we've got to roll up our sleeves and get after it and make sure that the market and make sure that all the athletes understand there's a
better-for-you-option out there. >> body armor is the number three sports drink on the market with just 3% share but they are bullish after signing a big sponsorship deal with ufc a couple weeks ago and shown 110% year over year growth, and kobe's famous trash talking translates off the court as well >> innovation is the key to everything, all right. you come out with a great idea, but if the idea lacks substance and lacks originality and lacks innovation you're not going to get anywhere we have innovation >> and gatorade hasn't innovated in 55 years. the same beverage we drank in 1955 is the same liquid we drink today. >> they have all the colors. >> red 40, yellow 50, art official colors and who whabts to give red 40 and yellow 520 athletes and children. >> i can call you from a rotary phone but i'm probably not going to do it though. >> kobe says basketball has given him unique access to some of the world's top ceos. he counts nike's mark parker and apple's tim cook as well as elon
musk as business inspirations. >> elon musk is i think a genius by all accounts but his commitment and his work -- i asked him one time about how does he learn? and the amount of research and amount of study that he does is unheard of, but he'll always say the most important thing is imagination so you can learn anything that you want to learn. you can study all these things you have in a book if you don't have the imagination to take it another level it doesn't mean anything, and i think elop -- i sat down and spoke with elon a couple hours, it was really really great. >> would you buy a tesla >> i'd buy into elon. >> he's putting together sponsorship deals himself and pitch man on their commercials gatorade and power aid have been around for a long time but analysts so far are actually impressed with the growth that these guys are showing. >> when he lunched his vc fund at this desk last year, it's a
reminder, i mean, kobe was well-educated from the get-go, very worldly upbringing so the fact that he's well-versed in these issues is no surprise. >> and he's working really hardch not just that he's a pitch man. he have's writing copy, he's the one voicing it over and doing deals. he's like a true business man, not just an endorser. >> his partner is interesting, he's the guy that sold vitamin water to coke. has a good track record in the beverage business. >> smart water and witt minwater, never get back into beverages again and here he is trying to take on a new competitor >> who has the edge, kobe versus shaq voeb is relatively new to this game but shaq, man, has all the endorsements. >> shaq is more of an endorser where kobe picks and chooses his spots and goes all in in those spots. >> so successful in china, makes the visit, speaks the language when it comes to nike. >> that's part of the growth is taking advantage of him in china. >> great story. >> and great access to kobe bryant. >> "squawk alley" is back in a
>> an amazing turnaround and investors liked what they heard from john flabry in our exclusive with faber in the conference call. heard that from faber and jim cramer who has faith that he heel make these changes. >> let's get to wapner and "the half." and welcome to "the halftime report." i'm scott wapner our top trade this hour, electric shock ge tumbling on earnings today. its worst day in years, but is that drop finally, finally are the opportunity now to get in? with us for the hour, jon narnlg narnlg john and josh brown, kevin o'leary is with us, good to have him with us as well. we begin with shares of ge off the lows of the day. still getting slammed though, this after a