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tv   Closing Bell  CNBC  September 18, 2014 3:00pm-5:01pm EDT

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chances. and also, the human being, people, people just make a different kind of whisky. >> have the scots been annoyed you have been winning all these awards? >> thanks to the drinkers in the world, you see? >> you're welcome, as one, you're welcome. >> thank you very much. thank you for watching street signs. "closing bell" is coming up next. great, thank you. >> thank you. welcome to the "closing bell." i'm kellen evans here at the new york stock exchange. >> they vote for independence, stop selling scotch? >> alibaba. >> we are going to talk about a lot of things today. good times just keep rolling for the stock market, both the dow and the s & p poised to close at record highs, all the major averages are in the green in the aftermath of the fed yesterday and ahead of the scottish vote
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for independence. and, among other things, i mean, tomorrow is a perfect storm for the market and for market geeks like you and me. you have the scottish results. >> right. >> you have the alibaba ipo. >> and? >> you have index rebalancing. >> quadruple. >> a quadruple witching expiration tomorrow. all on the same day. >> the excitement. >> it just builds here. >> i am going to be lurking in the morning while all of this happens. >> won't we all? >> keep a sharp eye out. we will get reaction to the market and the fed from david winters, winter green advise others, he is coming up, also continues to be at odds with coca-cola and warren buffett's berkshire hat away, he joins us exclusively in a little bit. >> as we said, zero hour for alibaba. the energy really is palpable here on the new york stock exchange floor today, more so than normal, eagerly awaitedism po due any time, the pricing will be due any time after the bell tonight. you will hear that news here first and we will prepare you
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for what should be an eventful first day of trading tomorrow morning right here on the floor of the new orleans stock exchange. already talk whether there's an alibaba effect in the markets. the dow up 95 points, 17252, pretty much at new intraday highs here. meanwhile, the nasdaq's up half a percent. that's the one that has some people thinking perhaps there's money being put to work in the broader market that couldn't get a pest of alibaba. that index up half a percent today. the s & p, 2009 trading up by four-tenths. and again, pretty close to all-time highs. >> so much to get to. we have a good group today on our "closing bell" ex-chicago. here we go marg guy patel from wells fargo funds management, john pal is lan zahn any from gfi, peter costa on the floor, uri landsman and rick santelli. peter costa -- >> yes. >> why is the market rallying today, something the fed did or
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did not say yesterday or what's going on? >> i think it's a continuation of what everyone knew was happening, you know, with the -- they are putting this interest rate rise off, they are not gonna admit that they want to raise interest rates until some time in, you know, mid-2015. i think that's taken a little pressure off the market, people have been looking for a little bit of an interest rate rise early, myself included and i think it's just, you know, could be more people just focusing on the market itself with the alibaba ipo tomorrow. >> dipping into the punch bowl? >> we did have great news on jobless claims this morning. >> bad news on housing starts. >> although the revisions were higher. >> that he is a true. >> rick, let me put this to you, what david had to say about the fed effect here against these markets, perhaps no one really care what is they think, referring to the dots a little bit more hawkish, all know janet a dove, all have our back if it goes wrong and know the fed has
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a terrible record when it comes to economic forecasting. >> rick santelli? >> yes. i'm sorry -- >> that was for you, buddy. >> i wasn't sure. you know, high fast balls. listen, i can't tell you -- i can't tell you what's gonna happen when the fed does its exit strategy. i can't tell you what's gonna happen or the day it's gonna happen with respect to the end of rates but i think personally that what's going on in the stock market is exactly what's happened every other time,et specials -- especially the last markets, the rates go up, stocks go up, the new mantra out here does it really matter when they are going to raise rates? i will tell you what, hugely matters when. harkin back to may of 2013. matters when you're long and short, don't have a position in the fixed income or equity markets, in a way, all americans have a position in this market and i believe that markets are
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in such a realtime algorithmic kind of fast trade that it is going to be right up to the end, when the rate rise looks imminent is when you will really see who is swimming with and without bathing suits in the high waters of liquidity from central banks. >> yes, we have that to look forward to. m mar guy, what do you make to the fixed income yesterday? hfrnlt i think it is focused on long-term fundamentals. inflation is very low.
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i think right now, steady as she goes, janet has our back. dr. yellen did know once again. i think in terms of what rick was saying, i think that you know, it doesn't really matter as much now when the fed hikes rates because the way the yield curve is shaped, you know, we have two trading at 1% and 30s at 3.3%. in the past, we automatically had a big rate cycle priced into the curve. now, we can't do that h so, i think at the top, you know,
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initially, the fed's only going to be able to hike to maybe 75 basis points, where the market is now december 2015. i don't think they are going to try to invert the curve right away after they take away this qe, going to go very gradually and because the curve is shaped the way it is at 1% and two years, not gonna want to go over 1% level real quick in order to invert the curve. i don't think that's gonna happen. i think stocks know that the g-20 coming up this weekend. i think gonna say once again that you know exhaust ter sit off the table. prosperity is what we need. we have been saying that for a long time,s officerity versus prosperity, what do you want? you want prosperity, i think drag guy, ecb, full bore, china just eased again, stealthy, i think right now, the market is still flush with liquidity, regardless of what the fed's doing, cpi negative and i think -- >> just so people know, the what jones is referring to there, a sign the cycle is ending, that or recession could be the next event on the horizon, may be one
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reason why the fed wouldn't want to encourage that development. >> yet the stock market continues to rally and ari landsman, you think today is a very important technical day for the s & p. tell us about it >> i think if we close at this level somewhere around 2010, you see 2045 probably within the next few days. you know, we -- >> the next few days? >> yeah. >> wow. >> yeah. it's an important level. it will have taken out, you know, about a ten-day ceiling. while i continue to believe this market offers a little bit more risk to the downside than to the upside, you know, the trend is your friend. clearly, this is the most accommodative fed ever. it is hard to fight the tape. we will see something in the 1700s the next few months, but also see 2300 by mid-2015. so, about 50% up, 50% down,
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those respect very attractive odds. so i'm fairly negative longer term. >> the scenario that you're laying out, putting the 100-year flood scenario, all that coming in the next 18 months or something. >> said three months. >> much sooner than that. i think you could see something like 1700, 1750, you know, within the next three, four months. >> all right. well, hey, peter, what do you think the market does with alibaba tomorrow? overall? i mean, obviously, highly anticipated, expected to be the biggest ipo ever it will trade right behind us here. right. >> how do you think the whole market responds tomorrow? >> i think it's still a market of stocks a lot of focus and attention on alibaba, where it opens, the timing of it, we have a pool on the floor. you may not want to hear this, a pal on the floor when we think the stock's gonna open. i think that by and large, the average is after 11:00. so, still going to have almost an hour and a half of trading prior to alibaba. this is just our speculation.
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>> and we have been hearing 10:30. >> 10:30, 11:00, think that gives you an hour, hour and a half of trading that has nothing to do with alibaba. i think a lot of focus is going to be on it. it's more about where the money's going, where the money's flowing out of and in and i think a lot of money will be flowing into alibaba and out of other stocks. i do think there might be, you know, might be a little bit of a whipsaw tomorrow. >> the fact we have triple -- quadruple witching, rebalancing and a lot of cross currents. trade soft bank tonight, too. >> yes. >> you could trade yahoo! right now. >> trade yahoo! as well. i think plenty of people already have. >> yes. >> thank you all. great to see you. >> thanks, everybody. >> thanks for joining us today. >> true, as john points out, soft bank will be one indication what's happening, get that price, after u.s. mark lets close, japan does open a few hours after that. any case, as we head toward close, the dow is up 103 points, near the session highs, 17260. again, these are all-time
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trading highs, same for the s & p 500, 2010. the question becomes where do they close the nasdaq, adding 25. >> a phrase we have heard all day, great scots, today's historic vote on independence could alter the course of europe's history as we know and alter the direction of your investments. our michelle caruso-cabrera is live in he hadden borrow with the latest tally what they are expecting the vote to look like, plus hear from a british official who is so disliked in scotland that last year, he was chased out of a pub. yeah. nigel fer raj, almost a global name already in financial markets, we have got him coming up. also ahead, alibaba, as we said, expected to price its initial public offering after today's close. the second we do get the size, the number, we're gonna tell you. that's all coming up hopefully here in about an hour or two. plus, the pros say that ba ba could add a few billion dollars to yahoo!'s cash pile. we will find out how ceo might put that to work. and up next, as customers line up for the new iphone,
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apple ceo tim cook is saying its new mobile operating system will shield text messages, e-mail and photos from the police. is this a good development? we will debate the pros and cons. we will be right back. wait, wait, wait, it's wait, wait, wait...whoa, does she have special powers when she has the shroud? no. guys? it's the woven one the woven one. oh, oh that gives her invincibility. guys? no, no, no... the scarlet king is lord victor's son!! no don't. i told you! you guys are gonna be so surprised when you watch the finale!!! you're so lucky your car has wi-fi. yeah...i am. equinox from chevrolet... the first and only car company to bring built-in 4g lte wi-fi to cars, trucks and crossovers. e financial noise financial noise
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logically day on wall street, whatever reason, the respond to the fed or what, but the dow is up 101 points right now the high of the session, 17,258, record territory, s & p, record territory, up 8 1/2 points, 2010, the nasdaq is up half a percent, 4586. >> a bump of companies, 52-week highs on the s & p 500, dominic chu rounding up the big numbers. >> good afternoon, kelly and bill. start with conagra, moving high, the market posting better-than-expected first quarter profits, conagra shares up 4 1/2%. also, kohl's gaining ground, citi upgrades the retailer up to 5 from neutral, citing improved product mix and raised the price target $7 to $17 a share. kohl's up by 1.5%.
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also, sears continuing on the other side to move loser. credit suisse issuing a negative note suggesting the department store should liquidate assets while it still can. it has an underperformed rating, $20 price target on the stock and end with am, which is moving higher, its new iphone 6 models go on sale tomorrow and people are already lining up outside their stores in anticipation of being one of the first to actually get their hands, physically buy the phone itself and hold it. you're looking at the apple store in new york city, where people, again, already waiting, it just goes to show, bill, kelly, that the cult of apple, no matter what they do, is still alive and well. back over to you guys. >> that was the other thing. >> does it make it quinn tunnel witching? >> i don't know. one of those days it all came together on one day. >> incredible. speaking apple, ceo tim cook published a public letter saying apple now encrypts the contents stored on the new operating system, ios 8 devices. if you downloaded it, it means
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apple will not be able to unlock your phone, even if the government issues a warrant. >> while it may sound great for individuals, does it pose a broader security threat? joining us now, edmund hartnett from bronson risk consultants and former nypd deputy chief, also joe loomis from signer spawns. welcome to you both. edwin, start with you, general question here is this interfering with legal police probes as far as you can tell from what aing has said? >> on the surface, it seems like it's good news for the bad guys and bad news for law enforcement, more restrictive, to get a search warrant, robbery warrant than in the past. bad news for law enforcement. >> you field feel it is shielding the bad guys needlessly. joe, you don't think so? >> give it a month, i think um see circum vision of this type of encryption technology, an example of what happened with the android operating system,
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where they have the frozen hack in order to break the encryption on that mobile device. i see teams like rocco grillo at pro-tivity, his team is called in by forensic s teams in law enforcement to do these type of hajjs to get into the phones under warrant. >> now, i truly don't understand. so, if i have a warrant, if i'm police, why would they currently now need hacking to get information that should be legally obtainable and should it matter what barriers a company uses if the police say that they legally have the right to go after the information? >> get tricky because i would think that the court could potentially issue an order and put someone under con tempt, don't provide the password to up lock that device, they could be put under contempt of court and fined by the court, it has happened in the past. do you want to be fined by the courts and district courts for disobeying a court order, the
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worst case scenario, have to circumvent the endescription and break into it kicking the door down in your house, they have a search warrant remark open the door for them or they can kick the door down. >> what about that, ed, is it a bit disingenuous for a toll claim they have got this cryptic -- this cure in place now that will keep the police out even if they have got a warrant? there are work arounds and legal ramifications here, too. >> certainly r seems like it's getting harder and harder, this seems to be more about profit and less about privacy, in my view. law enforcement right now jumps through all kinds of hoops to get search warrants to get eavesdropping warrants and rightfully so. we should not be able to eavesdrop on people. this just seems to make it even more difficult and apple seems to be kicking the can down the road on this one. >> joe, what about that? >> well, i think, you know, there are going to be more hoops but i also think that people shouldn't follow -- fall into the idea set that by being encrypted that it's all safe, it's a bunker, they can do things they shouldn't do.
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because, you know, there are going to be compromises out there, this isn't going to be the catch-all, bulletproof environment where i would not be putting things on my phone that potentially law enforcement shouldn't see. >> who is it that -- and if you want to weigh in on this as well, who would be held in contempt here? is it the individual if they don't provide their password? is it apple if they are basically out there advertising, they are trying to, you know, put up -- basically trying to make your house impossible to break into without your consent. >> it's complicated. is it the carrier? is it the server? is it a itself? very complicated. i think it is being made unnecessarily complicated by apple doing this now. >> how would you get into an apple phone? let me just point this out. i'm the blackberry devotee here. blackberry has had this kind of encryption forever and this was a draw for people to want a blackberry. >> absolutely. by the same token, does that mean you cannot get a warrant to get information.a blackberry? >> you can. that's why law enforcement using
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blackberries today. in my mind, i think people need to understand that there are going to be too manies that can circumvent this type of encryption. although am doesn't have the keys to the kingdom, it doesn't mean you can't actually circumvent those keys or pick the lock. >> it just -- it all sounds so odd to me because, again, if the point -- just thinking sort of a simple reason why police might want to get information off an iphone, say there's a child kidnapping, they suspect they have the guy that did it and there's information on the guy's phone, you know, how does this change their ability to get access to the device? >> delay the process of getting the type of evidence and the information required. i would not be surprised if there are going to be specialized groups under classified or top secret clearances working on circum visions to this in order to aid national security. >> a lot to think through, guys, thank you. appreciate it this afternoon. >> thank you for joining us. the close here, got about 40 minutes left in the trading session.
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and the dow is up 107 points right now. >> these right. coming up next, mobile's operating system has encryption the police won'ten able to penetrate. we have been debating that issue. >> yes, we have. >> think also talking a little alley ba barks aren't we? >> yes, we will what yahoo! ceo marissa meyer could do with the billions of dollars reaped from alibaba's initial public offering tomorrow, a special report coming up from silicon valley. robert frank running through the winners from alibaba's ipo. this time tomorrow, the forbes ritualist will be a little bit longer. >> you would think. cute little guy, huh?
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welcome back. looks like it could be another record setting day at the close here. already intraday, the dow adds another 104 points on the back of that federal reserve meeting and janet yellen yesterday, trade agent 17,260. s & p a banner day, level of 2010 now and the nasdaq, 4587, up 25. >> as i said before, you can feel the extra energy on the floor of the new york stock exchange. looking around at the groups of traders, you know what they are talking about, alley ba barks expected to price this record ipo tonight, some time after the bell rings at 4:00 eastern time, the chinese e-commerce giant kicking off trade tomorrow right over at that post here at the new york stock exchange. >> an listens say yahoo! will reap a few billion from its ba
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ba stake and our josh lipton is looking at how ceo marissa meyer could be putting that money to work. shall? >> kelly, it's $6 billion, to be exact. what yahoo! will rake in after taxes if the ipo price s 68, according to analysts. two broad options about what ceo marissa meyer does with that money, one, capital return, up a clear whether they would see a special dividend buy back or both, but the idea is that a bigger buy back makes sense, in part, because what if we do see, aggressive selling post-ipo, at least the stock could have some potential support, analysts say. the other option, an acquisition. meyer has made a lot of acquisitions since she became ceo two years ago. jean munster of piper jaffray telling me he would like to see meyer make a play in content, maybe similar to what we just saw amazon do with twitch, although munster says it would be hard for my we are 1 to 2 billion to make an acquisition and have a big long-term impact.
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this alibaba ipo coming at a critical time for ya a who in which its core ad business remains chad legged. yahoo! will claim just 5% of the u.s. ad mark threat year, versus 10% for pace facebook and 30% for google according to e marketer. >> we do have a vote, we want people to participate in as alibaba looks to price today. >> the question everybody is asking all week. >> want to know about you buy alibaba plain and simple when it opens tomorrow? go right now to let us know at cnbc.com/vote. >> joining us right now with his thoughts on alibaba, chris from the street.com sitting, waiting patiently a long time to tell us about alibaba. what do you think? going to be the largest, here we go again. we have been through facebook, been through twitter, now alibaba, just keep getting bigger. this is a monster, bill, the biggest ipo we have seen in the u.s., going to be 66 to $68 a
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share, right now, the pricing talk, i would expect probably see around 68, starts to open tomorrow, probably around 80 i have seen. alibaba is the biggest company in china and jack ma has all the intentions to take on the world. >> also a big day for yahoo, a lot of cash because of the shares they are going to be selling and heard that eric jackson on the program saying he is concerned by what marissa meyer is going to do with that pointing to acquisitions like tumblr, rather have somebody else in charge of yahoo!'s strategy at this point. you just weigh in on what you think yahoo! is likely to do? >> i have talked to a lot of analysts, investors on the street a lot seem to think this windfall, she is going to be inquisitive. the core business is stagnant. last quarter, a downturn in the core business. marissa needs to do something to turn the core business around. she said, you know, take about three years and tumblr doesn't seem to be working out right
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now. the other acquisition she has made are smaller, not really helping out. she needs to do something big to get investors on her side. >> we talk so much about yahoo! and what they will do with the money. we talk about soft bank and the position that they have. we don't talk much about alibaba itself. what are they going to do with this money is a lot of the insiders are selling, going to cash in on their early investment from this company that was founded 15 years ago. now they are going to be a publicly traded company. now what? >> they are going to continue to do what they do. this is for general corporate purposes, acquisitions, been pretty inkiss sive in the u.s., taking smaller stakes in companies like lift and shop runner. so, expect to see more of that. then just continuing to build up their struck having it, that cost a lot of money to do especially in a country like china. the $20 billion they are going to raise a lot of it is just going to go toward growth and continuing to build that stuff out >>. >> a lot of this will ultimately depend on at what price these shares trade and whether you can make an argument for it being a
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good investment over a five or ten-year period. let's for the sake of argument say it's $70, again, it's not -- just to pick a round number. what price level to you -- is that itself too high? facebook opened significantly lower. >> yeah, $70 sounds about right, about 30, 35 times earnings, give or take a little bit. so, alibaba really growing, alley pay restructured the deal with, incredibly important part of alibaba's future, e commerce business is strong. $70 doesn't sound too high to me. i can see $100 a share by the end of 2015 or so. >> kayla following this story for us pointed out the other day that as we all know, for chinese people, the number 8 is a lucky number. and they probably would want an 8 in the number, maybe 68 would be the price just because it is that lucky number there i would point out also our vote, we are asking viewer whetherthy would
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buy alibaba, 60%, unscientific, 60% said they wouldn't buy the stock now, wonder how much this will carry with the average public out there the investment public. >> a little bit different, we you a the average investor with face back, really into it because i think that's lot because of the domestic company, alibaba not really known in the u.s. they opened up this site called 11 main but not a big site yet. gonna see more institutional buyers, investment banks, hedge funds, and not going to be for the retail investor now. >> a tiny question before we go, this report from bgc on the options side of this is circulating about a yahoo!/aol tie-up. can you comment on the likelihood ever over that happening? >> i've seen reports that alley -- that aol and yahoo! could tie up. that's always been spec lateded about. i can't see that happening. i do know that marissa and tim
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strong, aol ceo talked. whether that leads to anything, who knows. both at google, stranger things happened. i wouldn't put my money on it. >> all right. and there it is closed the poll and it is roughly 60/40 of our viewers, 60%, 59% would not buy alibaba shares tomorrow when it opens. see what happens there. chris, good to see you. thanks for stopping by. >> the keyword there might be when it opens. most people gotten in at this point. >> maybe we will be covering the opening. on "closing bell" tomorrow. >> let's hope not. got about half an hour to go here before the "closing bell" today with the dow up 109 just about. >> we could come back, huge story from this week, will scotland wage tomorrow as an independent nation? we will go live to edinboro for the latest count on this historic vote. plus, we will talk about what could change immediately, will especially with your money, if the yeas carry the day. that's coming up.
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rally day on wall street, three of the four averages on record territory, the dow industrial average, the s and p 500 and the dow transportation average, which has been there for a while anywaying the nasdaq higher as well today, we have got a pretty good rally going into tomorrow and some of this may be the resulted of expectations for the expiration tomorrow, an index rebalancing, all kinds of technical stuff going on in addition to the ip of. >>ed financials, goldman in particular helping the dow today. >> du pont a big lalrier for that. >> scott land holding the historic vote today. michelle in edinburgh with how the scots are turning out at the polls, looks like participation is high. >> very high turnout expected today. the polls close in an hour and a
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half. we know that there's been a steady stream of voters all day long. we expect millions of people to have voted, because 4.2 million registered voters. the yes vote was definitely the passionate vote. we saw the yes voters bringing their children, taking pictures, thinking that they perhaps on the verge of something quite momentous and hist toirk. the no vote was very much one of fear, worries about the economic consequences, the economic fallout, separating from the united kingdom. the markets are acting like they believe the last surveys that showed the nos in the lead and that it will likely be a no vote tomorrow. take a look at what the british pound did today. nearly two-cent move in the last 24 hours. crossed 1.64. that's two-week high. it fell as low as 1.60 we saw the first polls which showed that the scots could vote yes for independence. as we have seep those numbers fade away a little bit, the british pound has come back, take a look at what the london footcy, the major index here in
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the united kingdom, trading at the london stock exchange, moved higher into the close, the vast majority of the scottish stocks traded there ended the day higher. that means that if tomorrow, we actually do get a yes vote, the markets are set up for a lot of volatility. listen to english economist, jim o'neil. >> if it is a yes tomorrow, the pound will probably fall substantially. and there could be some discount applied to not just scottish-based stocks but also british ones relative to where we are today. >> some discount applied. so prone to understatement. that means that they would fall and potentially sharply, totally contrary to expectations, the time you wake up in the morning, probably, unless it's too close to call, have an answer. >> michelle, we are on the edge of our seats for that one, stay with us. we here want to bring in a special guest as well. >> nigel fer raj, the leader of the united kingdom independence party who is in favor of
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scotland staying as part of great britain. as a result is quite unpopular inside scott land. do you worry, the fact that it is so close, what has this done to scottish saturday? do you worry that -- i mean, no matter which way the vote goes, since it's so close, half the populace is going to be ticked off about this result, right, nigel? >> the last time i saw real strife and division within parts of our community here was during the miner's strike in 1984, you know, where families, towns and cities were divided over the issue of that big strike on the british coal fields. this, i'm afraid, whatever the result, and i isn't it will be a no and perhaps even a more slightly comfortable no than most people are predicting, it won't just die here, see, what the leader of the scottish national party has done, he has bred in many of the young people in scotland a real nasty
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loathing hatred of the english. he is bitter. it is nasty. it has manifest itself the last few weeks in intim days and in violence. i'm afraid if there is a no vote, i would not be in the least bit surprised tonight, probably tomorrow night particularly, to see some fairly up pleasant scenes in some scottish cities. so, you're quite right. after this very, very contentious campaign, i don't think anything of the uk will ever be quite the same again. we are heading after a no vote, heading for quite a big constitutional change. >> nigel, the irony of hearing this from are you, you are the man many say is stirring up a lot of the british anti-european feeling that is similarly tearing apart society. >> do you know, if any of my supporters voters had behaved as alex salmons had, i would be the biggest pariah ever seen in this country. we love europe. what we don't love is the european union and undemocratic
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bureaucracy governing us, we want to be free, the rest of europe to be free. >> you said we want to be free r you know, you can hardly blame them for giving voice to a feeling that we are seeing not just in scotland, not just in england, but frankly, across much of the world. >> well, they don't want to be free and the reason why salmon is a false prophet is he is saying, divorce ourselves from westminster but sign us up to brussels, so actually, he doesn't want to be independent at all, he wants scotland to be a province of a new european state, he would be left, if he wins tonight and gets the yes vote, with no option but to sign up for the euro and frankly, very little end pep dense at all. but i repeat the point -- his supporters, his supporters have behaved badly, behaved with violence and intimidation and he has refused any point to condemn such behavior. >> michelle, what have you witnessed while you've been there this week ahead of the election, in terms of the passions and the political rhetoric that's going on there?
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>> i was surprised at how left-leaping i would say sometimes verging on socialist a lot of the scots, especially the yes voters r i think the real division has come down to that the scottish mps had made very clear that they want to continue the welfare state. that's why they like the european union. and that's why they are against a lot of the conservative and the conservative government down in london. . they don't want means testing for benefits. they don't want to privatize public -- anything in the public sector. and so, that's another reason why they don't like nigel fer raj. >> nigel, response to that before we go? >> well, i agree with that, and i respond by saying what we've seen from this campaign is the near-lethal combination of socialism and nationalism. it's a very, very nasty mix. >> all right. well, it's all coming down to the polls close, what, a little over an hour, we will see what happens.
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nigel, thank you for joining us. michelle, good job as always. checking back with you as news warrants. heading toward the close, 18 minutes left in the trading session here. art cashin told us that the bias was the side on the close, evidencing itself, the highs of the day, the dow up 111 points. >> s & p 2011. alibaba ready to price its initial public offering. after the bell, we will bring you that figure the second it hits wall street. don't go anywhere. don't miss our special report on student debt surging among an unlikely demographic, that would be the retiring baby boomers. former massachusetts congressman barney frank, our own larry kudlow will weigh in during the next hour of our show. how would they fix the growing are student debt crisis? they are not exactly shy, as you know, with their opinions. we look forward to that conversation coming up on "the closing bell." chces in retirem. know that proper allocation could help increase returns
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172617269. 17269. >> nasdaq a good day overall, look at some of these numbers here, the important thing is we had a great open, all ten s & p sectors up. some talking about the alibaba effect. bottom liner what you saw is a lot of hedges unwound, a lot of guys bought protection ahead of the fed meeting, afraid the fed might be hawkish. they weren't, they are unwinding that position. also the options and futures expiration, quadruple witch. some affect, difficult to sort that out. explain what traders are calling the alibaba effect. look at the nasdaq, five days ago, monday, rather, a lot of people sold tech stocks, people thought people to buy alibaba tomorrow. people didn't get the
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allocations. i think that's very minor affect, maybe a little bit -- look at the vix, volatility index, the fear index. yesterday, it collapsed at 2:00 when the fed meeting came out. what that means, traders stopped buying protection, what's happening today, follow through to that one. by the way, everybody keeps asking me, gonna get allibaba te indic indices, not. not going to include in the s & p 500, not eligible, in the united states and not going to be in many of the other etfs, will be in a couple, ipoetf, have kathleen smith down here tomorrow to talk about that, ipo the symbol there. guys, back to you. bob, thank you. we have got only about 12 minutes to go before the close. watching the key levels on the major index. later, activist investor david winters will be along, choice words recently for warren buffett and coca-cola the last time he was on. wait till you hear which companies he is looking to shake up right now. when fixed income experts
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joining me right now, courtney ratliff from luke capital. what do you make of this run? is this all sort of a sigh of relief after the fed meeting yesterday, do you think? >> i think a sigh of relief. i think investors are excited about that wonderful ipo coming tomorrow. i think that some companies are probably oversold earlier in the week simply because different investors were actually trying to raise capital in order to put alibaba into the portfolio. i think who is complaining about an up market these days? >> we are at these record levels. absolutely. >> are we getting ahead of ourselves, the old thing that we have been talking about forever, haven't had a correction in a couple of years now. inclined to put new money to work? >> absolutely. in the u.s., might end the year around 21 00, i don't expect a correction to come until probably after rates begin to rise next year, with the
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assumption that they will either raise rates in march or during the first half of the year. so, i don't see a correction coming until this time in 2015. i think different investors, especially institutional investors are positioning their portfolios for that correction, but i think it will happen in the u.s. and then see rallies in other areas, other markets. >> do you invest for growth or are you investing defensively in the class, you would think at these levels here, after the bull move we have had the past five years, people would start investing defensively here, just in case? what are you doing? >> in the u.s., i'm investing defensively. i think the rest of the world, clearly in global marketplace these days, you can find growth in a lot of different markets right now and beginning with the ecb and japan or doing right now, we are going to continue to see monetary easing there and what that's gonna do is cause potential buying opportunities in both europe and japan are as well as a lot of emerging markets. >> do you care about the scottish independence vote tomorrow, from a market
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perspective? do you think it has an impact? >> absolutely. i think i read somewhere that, you know, scotland leaving the uk is like texas leaving the united states. i think that was the -- what i've seen there. >> what we have seen so far is the pound continues to rally, anticipating a no vote. doesn't seem to be a lot of hemming anywhere. in other words, people are leaving themselves exposed for the possibility of a big surprise if it turns out to be a yes vote tomorrow. >> if scotland leaves, i hate to say it but like i said, like texas leaving the u.s. you move on. you figure out what happens. i think scotland will be more at risk than obviously the uk at the end of the day. you have salmon coming in via the british channels, so i think at the end of the day, scotland leaving the uk has more of an impact on the scots than it doesen at uk, they wouldn't like it but the end of the day, less of an impact economic loin them, which is a larger economy. >> let take a break, shall we? come back with courtney and look at the market as we head toward the close, the count down here.
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also, get ready, here it comes, alibaba pricing, highly anticipated initial public offering moments after the close tonight. you will get that figure the instant it hits the tape. we will find out how big it's going to be and how it might trade tomorrow morning. you're watching cnbc first in business worldwide. firm's mob. and "minus" our expenses. perfect timing. we're offering our best-ever pricing on mobile plans for business. run the numbers on that. well, unlimited talk and text, and ten gigs of data for the five of you would be... one-seventy-five a month. good calculating kyle. good job kyle. you just made partner. our best-ever pricing on mobile share value plans for business. now with a $100 bill credit for every business line you add. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 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
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2 1/2 minutes left in the trading session here. major averages, dow, s & p, russell -- not the russell, supposed to be the transports, that's my bad, not yours, any rate are the dow and the s & p in record territory, the nasdaq doing smartly, even the russell, which has been suffering lately, as we know, a big laggard here, that has come back to some degree as well today. and i tell you what, spin around, i want to show you the post where alibaba's going to trade tomorrow. you can walk around there now, but bob pisani, come tomorrow morning, you won't get a seat here very easily. >> that's glenn, by the way, the designated marketmaker, the dmm, who's going to be in it. we will be standing right here on the post. where it's going to be trading this morning, get the whole view of everything, give you a blow by blow, play by play description of what's going on. >> mark joining courtney ratliff
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and i here. what think the impact of alibaba is going to be on the market? >> i won't comment directly on them but the sector overall the financial markets, i think we are going to have a really good impact, impact the tech sector favorably and clearly, i think you're going to see the markets react and seeing it now, priced into the markets this week. >> what was the index you were talking about? kweb? >> very few etfs include alibaba, most excluded because the indices won't allow it in. one of the only, the crane shares, china, etf, kwet is the cymbal. very heavy volume in that today, see another one, another one called ipo, the rehn sanction capital etf, symbol is ipo. >> you're investing defensively. do you like technology at this point? >> i absolutely like technology and i love apple right now, as a matter of fact. i feel like it's oversold. i like it at that price and i will continue to like it. >> all right. very good. got to go, folks. thank you. >> thank you. >> see y'all later.
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going out with a gain of 108 points, an all-time high for the dow and the s & p. stand by. here we go. we will get the pricing on alibaba coming up in moments on the second hour of the "closing bell" with kelly evans and company. i will see tomorrow. buckle up. buckle up and welcome to the "closing bell." i'm kelly evans. where do we begin? go out with markets closing at all-time highs here, charge he can in, the indexes, dow add egg 107 points on the session, 17, about 265 that is going to be the new high-water mark. same for the s & p 500, trading up 7 points, closing at 2011. nasdaq adding 31 points for its part. and we are going to go straight to our dominic chu with breaking news. what can you tell us, dom? >> what we have is important developments on the oracle front here. earnings numbers not out yet but
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what we do know as of this time is that current chairman and ceo, larry ellison of oracle announced that he will step down from the role of ceo of the company. in his place, oracle has promoted ceos current presidents mark heard and sap practice katz ceos of the company. so, again, larry ellison, current chairman and ceo of oracle has announced that he will step down. he will have safra cat. >> and mark hurd, both co-presidents of the company right now ascend to the role of ceos of oracle. ellison one of the most public ceos in america, also one of the highest paid ceos in america. he, again, stepping down from his hole as ceo of oracle. he will remain the chief technology officer, so, still play a role in oracle's operations, but the ceos' roll
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will go to current presidents, mark hurd and safra katz, kelly, back to you. >> dom this is huge news, larry ellison, one of the most high-profile ceos in this country. oracle, the second biggest software company in this country. the shares down 2 1/2%,ity produce a panel and get their thoughts, robert wolf from 32 advisers, cnbc contributor, carol roth, very own robert -- with us for more on today's market, also christian goop and "fast money" trader, john najari najarian. welcome everybody. and talk for a second about safra katz, somebody you know. >> i went to college with her. i haven't seen her in probably 30 years. he was bright then. he she must be a lot brighter today. >> he is also one of the highest paid typically executives in this country.
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>> he is. also has, i think, the biggest lifestyle of any ceo that i've ever followed. he just bought the island of lan knife. he -- of lan knifai. the india wells tennis tournament, the america's cup. doing all that, such a micromanager and so competitive in his business, in oracle, that, i mean, this is a blockbuster. i have no idea why he would step do down. curious what's out there. not the ceo who steps away from things lightly. >> a culture standpoint interesting, two big heads of sales who left in the last three months, head of north american sales who stepped down and asia pacific seams as well. now three really major people, including the ceo of the company who was a legend stepping down.
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want to ask, interest j, your thoughts and knee jerk response to this? >> my knee jerk response is these are hand-picked people by mr. ellison. and in particular, he came out and just reamed the hewlett packard board when they got rid of mark hurd, saying he is the closest thing to steven jobs in silicon valley. that's high praise, now putting his money where his mouth is, kelly, by basically making these co-ceos, mark hurd being one of them them. the stock will settle in here around the $40 level when people assess what is going to be the future of the stock and likely to be moving up distributions of cash through dividends as well as share buy backs. >> thank you, dr. j. stay there oracle's earnings have hit the tape.
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looks like a slight miss on the bottom line. they are also increasing the buy back. let's bring in "mad money's" jim cramer now. jim, great to have you here this afternoon, with your perspective on this huge transition. mark hurd now assuming sharing the ceo role at oracle. >> i'm gonna take the other side of the trade here. mark hurd, i think, has been running oracle for some time. i think that larry talks to him a lot. i think that larry always has him on the phone when he thinks it's necessary, chief technology officer, as we see, he and ms. cat >>, the finance side, are a good team and i don't think there's anything wrong with larry. hurd day care the lion's share. you want to sell the stock down, sell it down hardware, sell the stock down, not as clean a quarter as i would like acquisitions, sell the stock down because we are all so used
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to seeing huge huge numbers coming from cloud like adobe two quarters ago, i would not -- not huge. not human for anyone who follows the company like i do. what is not great is you want to see their earnings per share blow away and you didn't get it. >> dr. j, your response, you caught that? >> i did catch that. and i don't disagree with jim. i rarely do. i don't disagree with that assessment, i think you're spot on, the guy, like i say irk hand picked by larry ellison to lead the company and i think they have got two strong leaders, so, the -- we have all seen, though, jim, what happens when you have two quarterbacks. i don't know that you're gonna stay with a two-quarterback system, but nonetheless, this is something that i think is not a big negative for oracle, but i do think it signals a different oracle going forward. that's why i said, jim, that i think under mark hurd, they are more likely to push more cash back out to shareholders than
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larry ellison was willing to do. >> that could be. >> assume that they are very lucky to have a succession plan in place they could do a spur-of-the-moment announcement. and as a shareholder, you know, larry ellison's one of the most invested guys in oracle and the world by a multiple. so my guess is he is picking people in safra and mark he has the utmost confidence in because no one's more vested than he is. >> jim? >> i think safra finance side, look, this is co-ceo, saw co-ceo at sap, that didn't work, i think this is going to be an office of the ceo, they have different divisions. i agree on the notion -- i agree on the notion it is a hand picked crew and it's all set, but again, i come down to the numbers and i wanted to see more. i want the company to win in the cloud and also beat the top line and the bottom line and sometimes that's hard to do, we know when adobe, for instance,
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did their shift toward the cloud, you saw the numbers not look good but want the breakout of the cloud. breakout of the cloud here looks pretty good. i think that's why the stock's not down a lot. the buy back, they have been buying back stock consistently, but again, headline number is what matters. you will see other companies that report numbers in tech that we have just loved, whether they be companies like sandisk, western digital, they just blow it out. techs, got to blow it out, got to blow it out, even the stock, this low expectations, this is the smallest quarter of the year, least important quarter and got to see the hardware break down, but i don't -- not a great quarter. >> whoed that thought for one second. bring our dominic chu into the conversation with more details on the quarter. what can you tell us? >> get you up to speeden at numbers, obviously, the conversation is very much around larry ellison stepping down here. the profit numbers for oracle, like you said, kelly, 62 cents per share on an adjusted basis that misses the average analyst
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estimate of 64 cents. so, a narrow miss there on the bottom line. as for sales, sales come in for the quarter at 8.6 billion dollars. the estimates were for 8.78 billion dollars, so a narrow miss on the sales side as well. they also, like you said, added an additional $13 billion to their stock buy back program, so those are the three headlines on the numbers front. i will add this to the conversation that jim cramer was just having with you guys about it it's interesting that oracle did not call safra catz and mark hurd co-ceos in the statement, rather, they made specific mention to the fact, again, that the company has promoted oracle ceo safra catz and oracle ceo mark hurd, all sales, service and vertical industry global business will continue to report to ceo mark hurd. all finance, manufacturing and legal functions will report to oracle ceo safra catz. all software, hardware, engineering functions will continue to report to oracle
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chairman and cto, larry ellison. so it's interesting, you would think that co-ceos is implied but they make no specific mention of the co-ceo title, rather calling each of them individually, kelly, their own ceo in their own right. back over to you. the >> and dom, thank you. carol, your thoughts on that? >> you know, it's interesting. i heard what jim was saying but for me, i like at this company, almost a tale of two companies here. their coulder business, off business where pricing trends are going in the wrong direction, i think they will have continued competition for folks like salesforce.com. so even though they are a cash flow machine, the core business is still struggling. what do you do in that standpoint, jim? you think that free cash flow is going to be used for an acquisition or just return to shareholders? does the stock really go anywhere from here? >> i think the cash flow's going to be used to be able to be more, aggressive in the cloud, which therefore means that earnings per share won't be as much of a focus as i would like to see, because as we know from
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the cloud companies, that's not exactly what they focus own. they focus on real estate. they focus on mine share, taking away from each other, a land grab in the cloud, oracle has to shift over to the cloud in a way that doesn't hurt the earnings per share. that's the tug-of-war. but i don't think it's gonna mean more money return to the shareholders. and can i just say, look, larry ellison, great businessman, this company has had inconsistent quarters for a long time now. and we are not used to that from the old oracle. maybe we will get a little more consistent now. even if it's not necessarily in the eps number, but let's -- let's not minks any words here, it's not like oracle's been, like, great. it hasn't. >> far from it jim.
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it's so darn cheap, even if they screw it up, a chance to come back, what you're seeing, why suspect the stock down more, the answer, not a expensive stock, not priced for anything that good. in is not that important a quarter. i think mark is -- look, i would tell you if you didn't know any better, mark's been running the company and larry's been checking in, not larry been running the company and mark checking in, but they are behind in the cloud. they got to catch up. i want cloud revenues to be blow away, adobe three-quarters ago. is this the breakout quarter? no they did an acquisition, hard to read the number also, real currency, real currency issues here, got to become out, this is going to take a lot of time to be able to understand this
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quarter. larry ellison not delivered a consistent quarter in how many years? go for consistency, even if it means land grab cloud. >> jim, hold that thought, everybody stay where you are, a quick break and come back with more on the bombshell news, larry ellison stepping aside as ceo of oracle, the company he helped co-found and went public for $15 a share back in 1986. we will be right back.
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welcome back, more news, reaction now to the news that larry ellison stepping aside as ceo of oracle. joining me now is david againny from gva research, cnbc contributor, jeff seinfeld, very own jon fortt and rejoined here by jim cramer, welcome, everybody, jon fortt, first to you, your response, what does it mean, indicate for oracle's future? >> disagree with a lot of what's been said up to this point. i think it's important to remember, larry ellison was not technically the chairman before. now he is executive chairman. he is still at the top here. i think a lot of people are discounting safra catz, more than finance. she doesn't talk publicly a lot, been out saying she didn't want the ceo role. i think it's important pa she
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has that title here, shows she is very much involved, perhaps in the running to take even more of a role down the line. as far as oracle's performance, doing really well compare to their enterprise peers, particularly in this cloud and mobile environment. if you look at a cisco, if you look at even an ibm, yes, there's been inconsistencies in their technical numbers but their growth trajectory to, how they have done with expanding the hardware business and for rays into cloud have been relatively solid. operating, i think, from a position of strength. mark hurd has done well there since his transition from hp. do not discount the impact of safra catz a the fact that larry ellison is the executive chairman. and though those two will be reporting to the board and not technically to him, larry still ounce about 20% of this company. he is still in charge. david as well talking, goes back to the quarter as well, jim cramer says they got to blow it
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out on the cloud. jon fortt saying their cloud forays are pretty solid. sought sharesed trading down, company losing about $4.5 billion in market cap on this news alone. is that warranted, in your view? >> i think what people should be encouraged about here is the fact with respect to ellison's change to be an executive chairman, he is also chief technology officer for the company. he is going to be very much focused directly on the engineering resources of the company and on research and development and innovation r people may have been about critical of hurd when he was at hewlett-packard and prior to that at ncr for perhaps cutting too deep in terms of basically paring back on r&d. i would argue that the moves here give us a triumvirate and really have ellison focusing very much on the core of this company and what innovation they have and how that's going to reaccelerate growth on a go-forward basis. so i would say this realign.here should actually serve to encourage investors, that along with the $13 billion increase in the stock buy back program should speak volumes. >> is this encouraging news from
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your point of view, mr. sonnenfeld? >> no, it's not. a number of fact our erudite panelists are missing. i'm disappointed it's no the come out so far. nobody can argue that is a planned succession. every single person that's in this discussion right now has to look at the camera and admit, this is a disruption, this is a surprise, this is not what the market is expecting, there's not a single analyst on the street, nobody will call into the show and say we knew this was going to happen. this was a shock. why that's not good management. ing going on here. second, this is a very unstable management arrangement. companies only do this on very rare occasion it is there's some degree of a board battle, some degree of a transition, of something's taking place. or if they have grown up together, like they did at goldman sachs and frankly, goldman sachs, one of these co-coeo arran-- co-ceo arrangem
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didn't work with hank paulson, and corzine. >> points well taken. let me just get jim crimer to respond to those, everybody. >> the third is they are losing market share, kelly, really critical h a mass exodus in sales management. they have had two dozen people leave in recent weeks at the top. they have been fighting over loss of market share in the cloud to salesforce.com and this is a shrieking irony, 24 years ago, management conferences, larry ellison was possessed, facilitating debaits, talking about the cloud. for him to be losing market share here now to sales force must drive him crazy, nobody was talking about back then what he was talking but netbooks and things like that something sales guy just left, lost the number one asian sales head. something going on here. >> okay. jim cramer, what about these points here about the timing, about the succession, about the top executives leaving? >> jeff is the succession expert, but larry got his head beat in on the cloud. i mean, he -- whatever he was
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doing was not the cloud. he is anti-cloud. i mean, the cloud -- i know that mark benoff has made -- larry knows mark well and i think larry built a great american company but they have been trying to play catch up in the cloud forever. frankly, under -- if this was their cloud under larry, then they caught a doubt get out from under the cloud, because larry did not do a good job on the cloud. i think that's what everybody knows. i think mark's come in, i don't know about the relationship. i understand that you could argue it was shotgun. but i also know that frankly, mark's been running this company for a long time now. and larry doing a lot of things. everybody who follows oracle knows that h >> why not give him the job? why split the job? >> i don't know why they didn't do that i agree with that, jeff, that's an interesting question, but larry's doing a lot of different things besides working at oracle, mark hurd and so is safra catz. [ overlapping speakers ]
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>> the r&d organization has continued to report up to larry for quite a while now, when the strategy took off and oracle took over sun microsystems, larry took a very strong happened in that as well. so not saying he is in there every day. but -- >> that's been a disaster. sun micro has been a disaster. [ overlapping speakers ] >> the margins on the hardware business have been fantastic. now the growth rate haas not always been what they projected, take a look at the struggles that all manner of legacy enterprise companies have had transitioning to the new data center model, cisco being a prime example, oracle has not had nearly the types of struggles that those others had, no, not been a completely smooth transition, hard to think of one company that has had a completely smooth transition, but oracle has done pretty well. a different type of company. remember how much of this capillary ellison still ounce, the fact these executive chairman is significant. and i have to think you have to see this coming, he is no spring
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chicken. he is pushing 70 right now. [ overlapping speakers ] >> got to leave it there, so sorry, love to keep this going, so much else to get to this hour as well, really appreciate your thoughts, that was jeffrey sonnenfeld, jon fortt, jim cramer, david geraghty weighing in. we have got another ceo change at a big company. dominic chu, what's happening? >> so much news, kelly, so from the technology side to the consumer staples side of the equation, check out what's happening with clorox, clorox announced that they have promoted ben know door from the executive vice president coo role to become the new ceo at clorox. in addition, the current ceo and chairman will stay with the company and remain as chairman of clorox. so, again, don news, staying as the ceo of the company -- staying as the chairman of the
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company and ben know dorer elevated from coo to ceo and dominated to the board of directors. again, dorer has run about every division at clorox at some point, from glad products to household cleaners to cleaners. again, so he is a veteran of this company and now gonna be the ceo, kelly, back over to you. >> so, a couple of major changes in the c suite this afternoon. there will be much more on oracle's coming up on "mad money" at 6 p.m. with jim cramer around reminder as well as people talk about what happens with the legacy of this megacompany with $185 billion market cap it went public within a day of microsoft going public in 1986. since then, oracle up, 89,000%. microsoft up about 64,000%. i don't think anyone holding shares since then either one of those names crying too many tears over that performance. coming up, alibaba's ipo could price any second now, gonna get instand analysis when we get those numbers, plus, tell
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you about the million and billionaires this debut will also instantly create. also, is invest -- activist investor david winters a believer in this record rally? is he getting cautious? join us exclusively late other the "closing bell." you are watching cnbc first in business worldwide. act i. scene 3. open port twenty-two-oh-one-seven on the firewall for customer db access. install version two-point-three of db connector and ensure verbose flag is set in case of problems. (clapping sound) isn't the cloud supposed to make business easier? get the one that can connect to the systems that you already have. today there's a new way to work. and it's made with ibm.
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who's going to make it happen? discover a new energy source. turn ocean waves into power. design cars that capture their emissions. build bridges that fix themselves. get more clean water to everyone. who's going to take the leap? who's going to write the code? who's going to do it? engineers. that's who. that's what i want to do. be an engineer. join the scientists and engineers of exxonmobil in inspiring america's future engineers. energy lives here. welcome back. alibaba could price the historic ipo any time now. robert frank is here. robert, we do know whatever
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dollar price we get here, it's probably going to create several instant billionaires, isn't it? >> going to be huge. this ipo not only one of the biggest in history, one of the biggest wealth creation events in history. jack ma the biggest in history. his shares set to be worth between 13 and $14 billion. now, that's based on the conservative price of 66 to 68 bucks a share. he is selling more than $850 million worth of shares but his remaining stake, get this, will be more than the entire net worth of rupert murdoch and elon musk. the second winner, joe si, worth 5.5 billion, selling 300 million of shares, get this, the sounder of soft bank, a big indirect billionaire boost, owns 34% of alibaba which ounce 20% of soft bank, his proportion at stake worth around $10 billion. alibaba will make jack ma the richest man in china and son the richest man in japan. what will he do with the money? bea longs to society. a couple million, a rich guy, 10
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to 20 million, it's capital. over 100 million, he says, that's society giving it to you saying you guys run it so it's not my money. >> wow. >> wow. >> a lot of that going to charity, which is great news. >> for those charities, absolutely. and meanwhile, as we should remind people, we have a sense of the range for this thing, don't know exactly the dollar level. we have been polling people trying to get a sense from our panelists even. we asked whether people care what the price point is, such a frenzy in some spaces, but nathan also saying out in the midwest, his clients, they respect so keep. they didn't get in. >> that's what could make this so well done because there isn't that retail sort of boom, just institutional. >> we are hearing on twitter around facebook went public, everybody was talking about it and saying, how i do get in? how i do get in? you're not hearing that about alley ba barks really more of the institutional investors. >> the first choice is you have to decide do you want to play in china. >> right. >> then you decide consumer, retail, tech. the first place, china. >> a lot of people say right
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there. >> correct. >> thanks, robert. student debt isn't just for young people anymore. a surprising number of people that aren't too far from retirement age are still saddled with huge student loans. up next, barney frank and larry kudlow discussing possible solutions to what many believe is a looming student loan crisis. perhaps a taxpayer problem as well. when change is in the air you see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. one that helps you think differently about what's ahead, and what's possible when you get things organized. ing u.s. is now voya. changing the way you think of retirement.
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built for business. the student loan crisis isn't just impacting young people. it's now starting to hurt people nearing retirement age and our scott cone has the details. hi, scott. >> hi, kelly. around 2 million older americans have student loans. that, in itself is not a huge number, at least not yet, but these people are much more likely than those in other age groups to be in default and the amount of debt is skyrocketing. take a look, from 2.8 billion in 2005 for ages 65 and older to more than 18 billion today. and that number doesn't cloud people like rosemary anderson. she is 57, with 126,000 dollars in debt, about half of it interest. she went back to school in her 30s, got sick, got divorced, hasn't been able to make a payment in eight years, so the interest piles up, older adults typically have other debts,
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fewer potential sources of income and the government can tap their social security if they default. >> there has to be a different structure and a different policy that is applied to people who are older going back to school than they are when you're 20 years old. it just makes perfect sense to have that change in structure because our life expectancy, a, isn't the same as a 20-year-olds and that you have different ways that you could pay it back. >> lots of ideas under consideration, the most contention, the interest rate, for roses mary, that's 8 1/2% and under current law, she cannot refinance. kelly? >> all right, scott. incredible stuff. thank you. and joining me now for more on what this means to the economy and what should be done overall about it, i am joined, as on every thursday, by cnbc contributor and former congressman, barney frank and cnbc senior contributor, larry kudlow. welcome to you both. right now, everybody, before we get into this, go to
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cnbc.com/vote and tell us, should the government stop making these student loans? and larry, what should be -- how do we fix a problem of somebody who 30, 40 years later still has existing student loan debt, they have much less income anymore to be able to pay back? >> well, look, i want to make two very quick points. number one, there such a thing as personal responsibility. you know, the example that you make, the woman hadn't paid any back in eight years. she had been working part of that time. i don't like the sounds of that at all. number two, there is a bipartisan bill, democratic senator mark warner of virginia, republican senator marco rubio of florida, that would reform something called the income-based repayment system which would allow individuals to work with the government loan program and establish monthly payments that they can afford. i think seniors would also be eligible. at least it will slow down this
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incredible government student lending bubble which has caused a tuition bubble. >> larry, is that something -- let me ask you something, barney frank, isn't that something like what the president has already done here, to begin to change the repayment plans to an income-based system? >> well, you have to do it on several levels. the most important thing we can do now as a society is to change the policy going forward, because it is important for us to be able, for two reasons, to encourage people to go to college who might not be able to afford it. one is it's a very important way to mention equal i. i asked ben bernanke and alan greenspan, given we have more inequality people thinks is healthy, how you do he will with it is controversial, what they propose, both said community colleges are an excellent way to transmit to people, particularly lower economic segments the kind of job skills that they need and
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you know, the community colleges teach the kind of job skills, nursing, tv technicians, et cetera that don't get offshore, hard to stick a needle in somebody's butt from india. >> and i apologize to joe -- for one second, sliding up and down the inequality scale here from the low end to the high end with the news on larry ellison, i just want to go back to our dominic chu at headquarters, dom, sounds like we have the third major ceo change in 35 minutes here. what's going on? >> that's right. a third one. so in addition to everything we have been saying, check out what's happening with jetblue, right now, we have learned that robin hayes, who is the current president at jetblue, will ascend to the ceo title, effective february of 2015. again, robin hayes, the current president, will become the ceo effective february 16, 2015. in addition, current ceo dave bar jer will retire, will step down as of that date. robin hayes, meanwhile, is expected to join the board of directors around that same time
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as well, so, again, a lot of management changes, first larry ellison, then what's happening with clorox, now jetblue, so again, huge announcements from the c suite this afternoon, of course, on the same day that alibaba expected to price its ipo. back over to you, kelly. >> thank you very much, dom. just so everybody sees what's happening here, jetblue shares responding to the tune of 5% higher on the news that the ceo is leaving, larry and barney frank, i'm so sorry, we need to give this student loan discussion its proper due, let come back to that if we can and get your thoughts here real quick on this rapid succession, if you have any specific thoughts on jetblue, clorox and oracle or a sense if this is an attempt at a thursday afternoon news dump or what's going on here? >> the most interesting one was the one you covered earlier on changing oracle. that's fascinating one. i know all the players there. we don't have enough informing. i mean, i was listening to your prior discussion. it's -- these things seldom
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work, okay? they seldom work, you are taking out one veteran guy and you're putting two more people in i happen to know the people, particularly safra catz, i don't know, i think there's something we will know about this in a few moments or some time, the people on the board of directors going to speak up. oracle hadn't done all that well lately. i think jim cramer, my bud, did i right, but there's something here we don't know. >> barney frank, sir, do you have any thoughts you want to add as well for some color this afternoon? >> well, i do want to congratulate the man who said that the new ceo was ascending, i think that's good metaphor. i think one of the advantages of being in office, i don't have pressure to tell people much more than i know and i'm not an expert on the internal workings of any of those three companies, so i'll pass. >> fair enough. we appreciate it and apologize again about the news. larry, real quick? >> i just want to say, i agree with barney frank about community colleges and technical
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schools. i just wanted to get that in. where i disagree is with senator elizabeth warren who wants to tack million -- tax millionaires to give everybody a break, okay? community colleges, technical schools and you can manage it monthly. i think that's the way to go >> all right. we appreciate what you do for the millionaires. >> we have to be careful about some of the -- we have to be careful about some of the for-profit schools, some of which have been abusive. i think elizabeth warren's argument that we should reduce the interest rate going forward is a very reasonable one and the other thing i want to say is larry's always been somebody i admired and now i have a new ambition, because i'm apparent lakers correspondent and contributor and larry's a senior contributor, so i'm going to work hard to get to larry's status. >> well, we will report when you asend to that role and appreciate the time from both of you this afternoon and for rolling with this news. >> i still call him -- i still call him chairman frank. i still call him chairman frank. >> as should i. my apologies to chairman frank
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and senior cnbc contributor, larry kudlow. we are on alibaba watch still. the potential laly largest ipo could price any time. we will get you the number shall the analysis when it happens and let you know what price we will start trading at tomorrow morning. plus, he blasted warren buffet for knot being critical enough over coca-cola's controversial executive pay plan and then sold all his stake in berkshire halt away. activist david winters telling us what his next move is and also his take on the alibaba listing. we will be right back. way to "plus" our so whata accounting firm's mobile plan. and "minus" our expenses. perfect timing. we're offering our best-ever pricing on mobile plans for business. run the numbers on that. well, unlimited talk and text, and ten gigs of data for the five of you would be...
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one day, factories will work with the cloud. one day... is today. we begin here at head quarters with our dominic chu. >> kelly, again, just to kind of put more news on the table here, home depot is confirming that the malware used in its recent breach has been eliminated from its u.s. and canadian networks. in addition, information on 56 million unique payment cards may have been compromised as part of that signer attack. home depot also said its q 3 sales are still on track. it reaffirmed its full-year sales guidance and raised its full-year earnings kind guidance above wall street forecast. see there, home depot shares down marginally hours. back to you, kelly. . >> thank you very much.
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my next guest called coca-cola's executive pay plan outrageous and excessive. he argued coke's buy back program was hijacked by the company and just last month, winter green's david winters went one step further by parting ways with another key partner, selling his stake in berkshire hathaway and joins me exclusively. welcome. >> kelly, great to see you. >>ky get your thoughts here, a series of newsy events since you have sitting down here about oracle, speaking of excessive pay, or rack raquel, clorox, jetblue, home depot now malware news, your thoughts on any or all of the above? >> the key thing is companies have to be run for the shareholders, the shareholders are the boss. and if the shareholders do well, management should do well. but management has to be aligned, kelly, with the underlying owners. >> do you think in the case of oracle, because i picked that because larry ellison's comp and executives are not just him has been a source of much focus, it's excessive relative to certainly what a lot of the
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peers -- peer -- ceo peer group is making. has that held you back from oracle as an investment? >> in general, look, we want people to do well. but if they do excessively well, especially the company doesn't do so well, we're not interested. at winter green, our investors have to do well and then the ceo can do well. >> so you now think warren buffett isn't running his company in a shareholder-friendly way? >> well, we are concerned the management at berkshire hathaway, which is laid out very clear principles over many years against excessive pay and that everything is for the share hold others, they seem to have thrown those principles out the window, so, for us -- >> the case of coca-cola or generally speaking? >> well, specifically in the case of coca-cola, we are very concerned that, you know, they have been so against excessive pay, especially when it wasn't deserved, and they have gone ahead and essentially sat on their hands and supported this whole, you know, travesty at coca-cola. we think it's a bamboozle and so
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therefore, you know, from our perspective, kelly, we have sold our berkshire and we want to move on to companies that work hard to make their shareholders rich. >> before we get to those companies, have you heard from warren buffett on this since the -- by the way, those b shares have continued to trade higher since you sold out of that position. >> sure. sure. originally, when this all came out, buffett came on cnbc and was very open that he agreed with our position, that you know, there was a problem at coca-cola. >> and yet, you haven't seen him do anything more, perhaps it's because he and others have often felt as though executive pay isn't the main reason why you should suddenly do a big management change. in other words, that could be more disruptive to a company that's trying to improve shareholder value. >> coca-cola, we think there's change coming to coke. one way or another. >> how big? how much change? >> could be very significant, again, with what's happening now with all the ceo change. they haven't done a good job
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running the business. they haven't treated their shareholders well, the business is a good business, everybody loves coke around the world. so we think with simple fixing of the underlying business and business and probably management change -- >> you think new tar kent could be the next go? >> we don't know next, some point, we hope that the board does make these changes, despite their comments, they have said that they had broad shareholder support at the end of the meeting, now with the s.e.c. filings, we know there was major opposition to their plan and see ultimately, around the world that unless the shareholders and the management walk hand in hand, eventually, there's change. >> i'm glad you raise this point, because this is a huge part of the reason why there's some concern about alibaba's listing tomorrow, what is your take on alibaba? >> a great story, for us, we are focused on valuation, kelly and i think there's still, though the markets have gone up, there's a lot of companies that have been left behind. and where the prospects are
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good. so, we don't want to pay at winter green big prices, we want to get a lot for what we pay for. >> and i understand alibaba probably doesn't fit in that bucket. do you have a problem with companies who are run through the cayman islands effectively or companies that do give their founders more shares? in other words, the new york model as opposed to the hong kong, one share, one vote model? >> we like hong kong. i don't think there's a fixed rule, but the key thing is that you've got to have that sense that management's working for you, that every day, they jump out of bed and they want to make money for everybody, that all share hold verse to win and it can't be heads, i win, tails, i win bigger for management and the shareholders get left behind. >> could you quickly rattle off, for example, four or five of those companies where you do think you see favorable conditions? >> we very much like canadian natural resources in canada, we think it's very undervalued. we like union pacific here in america. that's got phenomenal land
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bridge. we love the management and what they're doing. and then in malaysia, we like gentech a gaming company that runs aqueduct here in new york and they are very smart. >> and you have positions in all of these? >> absolutely. long term. >> okay, swatch absolutely. long-term. >> and swatch, is that your biggest holding? >> we love the watch business. despite the concerns, people love watches. >> why aren't you, you know, have a huge position in apple here then? >> well, it's a teeny piece of apple. and we think that swatch is a pure play, and we think when they come out with their smart watch, it'll be wonderful. but even, even beyond the smart watches, they've got a fabulous array of low, medium and high-end watches. and people want to differentiate themselves around the world by wearing a watch or beautiful piece of jewelry. >> david winters, i know we've hit on a number of issues. thank you so much for your time this afternoon. good luck in the myriad battles you are waging and please come
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back and keep us posted on them. appreciate your time. now, larry ellison stepping down oracle, as you can imagine, burning at the cnbc.com hot list already. we'll tell you what readers are looking for on the ellison move and how you can access more information with our new app. stay tuned. does she have special powers when she has the shroud? no. guys? it's the woven one the woven one. oh, oh that gives her invincibility. guys? no, no, no... the scarlet king is lord victor's son!! no don't. i told you! you guys are gonna be so surprised when you watch the finale!!! you're so lucky your car has wi-fi. yeah...i am. equinox from chevrolet... the first and only car company to bring built-in 4g lte wi-fi to cars, trucks and crossovers.
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welcome back, the big news this hour. we thought it might be alabi baba. larry ellison stepping down and it is burning up our website. for that alan wastler joins us now with more. and alan, a lot of people need to know about the new app today, as well. >> that's right. this is the new app. you can get it on the app store now. lots of new features, a lot of great interactive dudads to play with. lots of fun. right now, the larry ellison oracle story, burning it up for us. 30,000 people have already looked at the thing. it hasn't been on that long. the other thing drawing people, our scottish coverage. that's going to make it rough on the call. >> and i think i see -- do i see a kilt there, alan? >> yeah, you might see. this is my family -- so i'm
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doing it just to honor the vote today. not saying which side, but to honor the vote. >> all right. always full of surprises. thank you, sir. three ceo changes at major companies. how is that for an hour? we'll get more reaction to the big news this afternoon. oh, by the way, we also get alabi baba, the voresults of th vote in scotland. plus the iphone 6 goes on sale when we come right back.
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big day? ah, the usual. moved some new cars. hauled a bunch of steel.
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kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac. see you tomorrow, sam. just another day at norfolk southern.
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welcome back, time for a five-second final thought. we'll start with the wolf of wall street. >> i love that. thank you very much. so to me, the biggest news was when the fed yesterday revised the gdp down for the next three years and it looks like our v-shaped recovery that we've been speaking about for five years will no longer be talked about for the foreseeable future. >> by the president included? >> i don't think he's brought up a v-shaped recovery. he was more of a kind of, it's going to slowly continue to move forward. but the fed has talked about a v-shaped recovery post recession. >> is it "w," "f"? >> this is brought to you by the letter "u." >> just a dash? >> to me, the oracle news is so huge. and just the way it came out when you think about larry ellison as a micromanager and
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the way that he so meticulously controls everything ask to have this sort of dropped in our lap, i'm really curious to hear what the aftermath is going to be and what we're not hearing yet. i think as robert and i were talking about, there's definitely more to that story. >> yeah, look, there's something we don't know yet. i don't know what it is, i don't know how big it is. but something about this felt hurried, sudden and huge. it felt like a normal company and not a normal company would've plotted this out over a longer period of time. >> anything else in particular here as we look to friday? >> ali baba is going to be fascinating. it feels like such a disciplined ipo. i like this, good for markets, shows that ipos, we may be over the sort of facebook debacle. >> but an interesting challenge for the underwriter because there's no lock-up on a lot of the shareholders, which is really the first big ipo we've seen like that. so it'll be curious to see how it prices and trades. >> and how scotland votes. >> i think, i hope they stay part of the uk. i think it'll be best for the
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economy. >> and probably best not to upset financial markets. who knows anymore. thank you so much for this hour. so much to cover and really appreciate it. let's hand it over now to "fast money" and melissa lee. and melissa, take your pick. >> we got a lot of news. so we're covering all angles and one angle is yahoo. why yahoo could be a takeout target. the take -- the acquirer, the potential acquirer will surprise you, guaranteed. >> stay tuned, over to you guys. >> thanks, kelly. "fast money" starts right now live from new york city's time square, i'm melissa lee. our traders tonight are pete najarian, dan nathan, john najarian and guy adami. three key market events unfolding. scotland closing its polls right now. will it become an independent country? the latest as the numbers trickle in. oracle, meantime, getting hit after announcing larry ellison is stepping down as ceo. revenue coming in late in the first quarter. the call getting underway right now. we've got all the latest headlines, and any minute now, we will get the pricing on ali

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