tv Squawk Alley CNBC October 6, 2014 11:00am-12:01pm EDT
good morning and welcome to "squawk alley." joining us roger mcnamee co-founder of elevation partners, great to have you back. john steinberg ceo of the daily mail north america, kayla tausche is back. welcome back. john fortt as well. the big story, hp announcing it will split into two companies and cut 5,000 jobs. shares of hp rallying on the news this morning. hp will split into two publicly traded entities. the pc and printer business using hp inc and services with hewlett-packard enterprise. david faber talked to meg whitman in an exclusive interview this morning. here's what she said. >> another enormous change. everything about how compute is being bought, paid for, sold, how applications are written, from, you know, a licensed model to a sas model. how employees and customers interact with technology. and you can just see the pace of change. and there's technology that is enabling that change that wasn't
even available four or five years ago. whether that's cloud or the ability to take huge data sets and gain insight, we have to take advantage of those changes. and if you're not careful you'll be disrupted and you have to stay on your toes and be able to respond much more rapidly when the industry is in a more normal state and you have to remember continuity of leadership is an important thing here. i'll still be the ceo of hewlett-packard enterprise and the non-executive chairman of the board of hpinc. where there are synergies we can take advantage of, supply chain or other things we'll take advantage of. where the companies are better served to go 100 miles an hour against their respective markets they'll be able to do that with us as well. >> david faber, we're talking about the benefits of being small and agile versus big and with scale and wondering who's next? >> yeah. of course small in these terms has to be taken into account for
the fact that they still will be -- represent roughly number 48 and 49 in the s&p top 50. still huge companies but back to the theme we've heard for the last week, we heard it last week from john danaohio ceo of ebay to split that company and meg whitman talking about needing agility in the marketplace to respond to seemingly these new changes, some question, of course, whether any of this is new. technology seems to be changing at a fairly rapid rate always and yet you do have these two ceos, interestingly connected by the fact that donahue took over for whitman at ebay, saying things are changing now. >> good interview, david. i think backs to last quarter when i said hp's reason for being is in question. this whole idea of the scale play that was going to get you lower costs and a bigger share of wallet in the enterprise levering the consumer, it didn't work. what's not clear to me now, is
whether this can work even as two companies going forward on the pc and printer side, yes, the pc is having a nice moment in the sun now, but the replacement cycle has probably been lengthened out, so what happens a couple years down the line when tablets continue to at least maintain where they have been and smartphones as well, how does that business do. printers, had a bad quarter. on the enterprise side, what do they have. they have lenovo coming at them which just got the industry standard server business from ibm. you've got contract manufacturers increasingly pressuring that business. they're not number one in networking, in storage, in software, where do these businesses go? >> what's interesting to me, it really is these established companies finally listening to their peers at the smarter startups who they work with. every book that's coming out, ben hor wits or the new book with jonathan rose berg, the two pizza rule that jeff bezos enforced. $50 billion companies, but what
do you do with two $50 billion companies in one split them into logical groups that make sense. when we were discussing paypal and ebay, wouldn't paypal hustle harder, be a little more focused if they didn't have that ebay pressure on them. i think ultimately that is what we are seeing happening now. the big companies are becoming silicon valley startups. >> you can make that argument. it's a cogent one that says you're going to have a more incentive work force when they know they're working for their stock price and not to deal with some stumble that's taking place in pcs or the fact that consumers no longer buy them. that being said i thought it was interesting earlier we interviewed tony sack nagy who seemed to be at pains to understand the full strategic rationale for it. one thing to hear meg whitman describing why they believe this will succeed although the question as to why now, why not having been a year ago or a year from now, although i think few would argue that this was going to happen some time. >> i think that's a fir point but to take the bernstein
analyst, the bernstein analyst doesn't see the rationality. when you run a company and see how hard it is to focus on one or two things, if the pc can focus on pc and printers, send out objective key results every quarter which rally the company around a few key things can't do that if you're doing these businesses. >> what's the view from the valley and who needs to do this next? >> you know, to be honest i think by doing this, hp has gone from having, you know, two boat anchors tied together each trying to float in the water to two separate boat anchors trying to float in the water. they have all the agility of a bag of cement and, you know, honestly it seems to me they've been at least two, maybe three years behind every important trend. i mean, ibm divested pcs, servers, years ago, figuring out that these are businesses that not only don't have growth potential but almost certain to shrink steadily over time. >> so what are you saying? the third -- the tough
decisions -- >> the executives compensation is going to be absolutely terrific because whatever their comp plan is i'm sure this deal will improve it. >> the 5,000 people being let go won't get a higher paycheck. >> i'm talking about the meg and the team at the top. >> is this part of just inheriting a dysfunctional legacy knowing what we know about the succession, rapid succession of ceos, turmoil in the board room? >> yeah. i mean in fairness hp has been horribly managed for 20 years and so meg whitman didn't inherit a great situation, but i don't think there's any evidence she's gotten control of it, that she has any idea what they ought to do next. i don't see any plan for either side of these things that's going to make a difference to shareholders could we get a blip in the short run? yes. could there be product cycles in pcs? of course. but the long-term outlook for both sides of the business is terrible. >> but a lot of questions for the future of hp.
they go it alone. you said last hour, it takes three companies to make a trend. we have ebay and then we have hp and had then didn't take you but minutes to get another example with liberty interactive. do you think this is the set we're working with or do you think a microsoft or ibm which is up on the day on this news, could be the next contender for something like this some. >> i mean the folks at liberty are constantly shufflings assets. they're not necessarily an example. your point is a good one. amazed we don't get another one and you have to consider the shadow of activism here playing a role. certainly did at ebay. and to a lesser extent at hp. you had an activist chairman of the board that being ralph whitworth who stepped off due to health issues but no doubt i think these boards are more aware than they might have been two or three years ago that if they don't act, they're going to get involved in a nasty potential proxy fight and so -- >> seriously, it's much less complicated than that. these guys have no clue what to
do with these businesses and when you don't know what to do, you transact. you buy or sell. they've been buying for a bunch of years and now going to sell for a few years. >> it looks that way. let me make the bull case because there usually is one out there. i would say the cash flow on hp's pc and printer business is fantastic. it kind of is bad for the enterprise business they could lose that. look at apple several years ago when steve jobs first came back, people said look at the things they have running against them, using the wrong chips, they're bloated, have all the things going wrong. if hp can figure out how to slim down and do some creative thing, particularly in that business, which is right now well res sourced they have a couple years to do that and the enterprise business could be a more attractive takeout target because it has little seeds of things that another business -- >> for who? who would be crazy enough to buy it. >> for radio shack run for cash flow too. >> i'm not saying i believe it. i said there's a bull case to be
made and that was my best stab at it. >> a bull case to be made for anything. the truth of the matter here is that we're really late in the cycles for all the businesses that hp is in. it's not that they're bad managers or bad people. it's that these cycle is over. it's generally going to run against them for a really long time and there's a lot of areas of tech which are promising and not very expensive from a valuation point of view and people should focus there. hp has told you they're throwing in the towel. >> roger, if there is one more old school tech name that needs to do something similar, transact in your words, who is? >> going to have a wave of it, right. going to see one set of people who are becoming portfolio managers, you know, yahoo! is a great example, where they're essentially buying things because they have a ton of cash. a whole bunch of people divesting things. and, you know, it's -- for the most part they're both going to be unsuccessful. to me what you want to look at for the people with -- if you're an investor people who have
organic growth, that's going to be google, apple, facebook, and there will be lots of other people. but to me, you don't want to waste your time looking at the parts of technology that aren't happening. i mean it just -- it's crazy. we don't have enough time to be experts on businesses that don't really have a prayer. >> david, thanks so much. david faber joinings us this morning, staying longer. roger and jon going to stick around after the break. all day we've been unveiling the next list of rebels, leaders and innovators who will change the face of business over the next 25 years. lot of big names including dick cost lo, elon musk, kara swisher putting the list together will give us her take later this hour. >> we want to get a check on the markets. the dow still holding on to strong gains, up 32 points, though far from the volatility and the triple digit swings we saw last week. s&p was unchanged earlier when we started the show. now up by two points. the nasdaq has fallen by about 7
points. that was lifted by many of the tech names, hp, ibm we mentioned earlier on but now has gone to the downside, of course. 29 of 30 dow components had been steadily into the green this morning. shares of tesla, meanwhile, rallying as the company gets ready to, quote, unveil the d. supposedly that's going to be a new car on thursday and the stock is running up in advance of that announcement up nearly 2.5% this morning. also, check out shares of nike it's unclear what the story is behind the stock today, but it's down 1.5% nearly its currently the biggest loser on the dow jones industrial average where ibm had been, carl, the biggest gainer on the dow this morning. >> when we come back, $10 billion for snapchat, $6 billion for square, if those companies are worth new multibillion dollar valuations. is this paypal meets facebook. behind reports the seshl network is moving into mobile payments. reed hastings speaking out on
global expansion. what he had to say later on this hour. "squawk alley" is back in a moment. yo, bro, you on woo-woo? are you kidding me? everybody's on woo-woo! [elevator bell rings] woo-woo? lock and load, people! we're going all in on woo-woo! ok? mark! comp us up a profile page! copy! susie! write us some posts! ready! grace! upload some videos! uploading! i want sponsored woos. i want targeted woos. we want to be all up in your woo-woo feeds! gordon! register our woo-woo handle! janice?! we need an ethnically ambiguous woo-woo mascot. we're cashing in the q4 budget, people, and we're buyin' some followers! hahaha! yeah! [applause] woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo! woo!
social network at about $10 billion. square raising $150 million, led by funding from the government of singapore. that would value the mobile payments company at about $6 billion. by the way, our ari levi reported that news back in august. roger, raise any eyebrows over there? >> we're at that point in the cycle where the burden of proof is on those who believe you can make good money from those valuations and now that yahoo! has kind of become a mutual fund like a closed end of mutual fund of interesting tech positions, they're going to be one to watch and i don't honestly know whether snapchat is going to turn out to be incredibly valuable or not or square will, but what i know is there isn't any precedent for paying those kinds of valuations for companies at this stage. there have been a handful over the years and, you know, facebook worked out really well. twitter has worked out pretty well. the rest of them harder to tell. >> i don't get this one.
>> i would be cautious. i would not be running out to buy some at these prices. >> this is not like yahoo! buying 30% of alibaba for a billion dollars. this is putting in $20 million at $10 billion which means that if twitter goes on to be worth as much as twitter $30 billion you would make $40 million and that's not a good mutual fund to be part of. the only logic i can come up with, either the report is wrong or just a pass your hat around, where perkins will go in, yahoo! wants to learn from it, have the innovation internally, bear in mind she dropped 30 to $40 million on thursday for message me. messaging app she's shut down. this is not a great mutual fund. >> we don't know how much is driven by the companies versus by the investors. cliner perkins put a couple million in a couple weeks or a month ago. th maybe only smaller portions. these look like two different fund-raising routes. you have a strategic yahoo! which all reports say yahoo! could find an important
strategic partner in snapchat, not the other way around. it could be an interesting way for yahoo! to distribute its own news and learn from it on the innovation side that you spoke to. square going to a sovereign wealth fund. you never want to do that because you have to travel far to meet with them, only in it for returns and don't get any strategic advice. not like a vc partner that will sit on your board. >> you're calling it a low quality. >> it is a bigger one and that shows they're dipping from the bottom of the barrel. >> the big question here is do you believe either company, square or snapchat, will be a platform like facebook turned into, like microsoft was, do you think that snapchat is going to become some messaging platform better than whatsapp for the next generation. then these valuations really start to make sense. but there's an argument to be made that i would make that we're beyond that stage with this type of company. square you've got apple moving in, others in the payment space, very much lined up, paypal
getting ready to be independent. it's going to be tough. >> meantime -- >> i would say it's past tough. i think extremely unlikely is the right way to think about it. >> yeah. netflix is not anti-movie theater, that was ceo reed hastings message in an interview with the telegraph over the weekend. movie thesers have come out swinging against their plan to simultaneously release originals like the crouching tiger hidden dragon in imax theaters. movie theaters are upset with us because if everyone gets the choice they might enjoy it at home. maybe theater owners will refuse to participate. we want consumers to have choice. how does he make both happy? >> i don't think he cares about both happening. i think the theater owners are crazy which is given as choice some people will choose to go to a theater. given no choice everybody is going to watch it on netflix. they are the ones not in the leaders position. netflix is in the leader position as change is coming. why you would want to fight
change, be yelling at the storm, that never works. you cannot yell at a storm. >> sure it works. look at the valuations with so many media companies right now that were supposed to get steam rolled the way the record companies did with itunes. if you can lock up your supply ins just the right way, control vertical integration right, you can. >> on this one how is that going to happen? there's zero on this one. >> but if they can figure it out, it's not like technology always wins. >> roger some. >> yeah. i think that the core point here is that the movie theaters are not able to lock up the content. i think what we've seen in cable television and increasingly on netflix itself is the notion that the best content is not actually going through theaters as as first pass. it's showing up elsewhere. and the form of the content changed because the channel of distribution through movie theaters was no inflexible. i think this is a sign of tremendous weakness for the theaters. i think they're way past the
tipping point of being able to come back. i do think theaters last for a long time because going to a theater is fun. >> roger -- >> but the notion that it's going to be a great business from here is laughable. >> you're right. the thesers have not adjusted culturally to what's going on with people's lifestyles. everybody wanted to see "gone girl" but everybody has kids you're not going to get a babysitter to go to a movie. it's too expensive. they should allow for the window to be in the theaters and on-line at the same time so they have a fighting chance. >> steinberg, i bought the babysitter, it was expensive but the movie was great. >> don't you think netflix has to play nice because the day might not be far off where netflix produces and launches its own movie and wants to put it in the theater as well. >> because they want to get an academy award. >> given the choice everybody would rather see it in imax. if you can have that screen in your house and not spend $50,000 you would rather see it that way.
i mean f they could figure out how to solve the problem of time and space they would have a great business. >> roger, before we go. >> kind of like hp. >> i was going to say i saw parallels there. you sent us pictures of your band playing at a bluegrass festival in san francisco over the weekend. >> yeah. guess what, we have fans. >> this looks like fun. >> swe have fans that hardly strictly bluegrass. the parents of david rawlings of the dave rawlings machine one of the great folk artists in america came up after our set at the festival in san francisco and said, i watch you guys and i love whachg your show. i thought you guys would want to know, the folks out in the music scene are interested in what we're doing. they couldn't have been nicer people. >> we got to get you out on the plaza in the stock exchange and you on for the a block and go out there for bluegrass in front of the exchange. >> smash your guitar like in that photo. >> john never stops marketing. >> roger, we'll see you soon.
>> take care. >> roger mcnamee joinings us from elevation. >> when we come back, move over paypal, facebook reportedly set to make a big move into mobile payments. how they plan to do that. that's coming up next on "squawk alley." in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you. so if you're ready to see opportunities and see them through, we say: let's get to work. because the future belongs to those who challenge the present. requires precision and anattention to detail.g
it takes knowledge, hard work and a plan. at baird, we approach your wealth management strategy that same way. as an employee owned firm we have the freedom and resources to create customized financial plans built to last, from generation to generation. we'll listen. we'll talk. we'll plan. baird. and cialis for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives,
welcome back to "squawk alley." i'm morgan brennan. check out h&r block moving lower after the tax preparer said regulatory approval to sell its banking unit to b of i will not come through this year. the stock trading down a little more than 6%. b of i holding moving lower down about 3%. back to you. >> the market had been hoping for that. thanks. in case you missed it facebook could be moving into mobile payments. hacked screen shots from a student at stanford university supposedly found a mobile payment option for facebook messeng messenger. users will apparently be able to send money in the same way they would send a picture or file through messenger today. facebook has yet to confirm the feature but did hire former paypal president david marcus to
run the messenger app earlier this year. jon, they have it as stand-alone app. do you think it stays a stand alone app, a payment app or do you think it becomes more broadly integrated with the facebook ecosystem. >> i think it stays where it is. mark zuckerberg said several months ago they don't see going into e-commerce and payments in a big way any time soon, but i think what this does, facebook payment, facebook currency didn't take off at the time. if they can get people entering their debit card information, payments back and forth between them, it doesn't turn into a big business but it lays the groundwork for what they can do in the future. >> the tech story on this said the feature appears ready to launch as soon as they press the button, meaning this is fully developed waiting to go which would seem to me the only obstacle would be regulatory. they've been trying globally to get regulatory approval to be an e-money institution. >> on a day they closed the whatsapp acquisition. that happened this morning. >> hurdles in europe in ireland
where they're applying to do this. we'll see if they get the green light from the necessary regulators. it would seem that's what they're waiting for. >> we've been talking to hp all morning long. you've gotten comment from others in the space. >> i have. let me call it up. a statement from dell i'll read part of it to you guys. dell singularly focused on its customers and partners and committed to providing end to end solutions. hp's decision to break apart its business is complex, distracting and appears to benefit hp and its shareholders more than customers which is ult macely the wrong priority. goes on to say other good things about dell and then at the end the hp separation will be complex, takes time to unwind the commingled business and customer accounts. other separations have often taken years to complete. when i talked to michael dell a couple weeks ago i asked him about the statement hp and meg whitman announced when they were
going private saying dell will be confused come over to hp. >> water is fine. >> what's good for the goose is good for the gander. >> we'll keep an eye on hp. i'm sure there will be a lot of companies coming out with either, you know, this is a welcomed move or shots across the bow be they as they will. thanks for bringing that. a couple minutes ahead of europe's close. let's bring in simon hobbs. >> mixed bag at the close of europe. some of the big banks doing reasonably well not least because of the fall in the euro we've had. bad data out of germany on the face of it at least. factory orders down 5.7%s in august. this is a volatile series of data and actually rose 4.9% in july. it's basically to do with the timing of the holiday. things are bad in europe, no question, and indeed we got the retailing pmi today well below 50 yet again, it's worst rate of decline for some time. the moves off the disappointment
on thirns with the european central bank failed to give great detail on its asset backed security program an draghi seemed to walk back on that. it's become apparent the bank of france governor is against the abs purchases in addition to the bank of austria. what's interesting in this is you've got the rest of euro-pro pelling the ecb through private qe over paris and berlin an important dynamic to understand. on the budget side, it's reported france will have its budget rejected by europe towards the end of the month. the greeks came out, remember the greek market year to date is down 11%, the greeks came out forecasting a primary surplus of 2.9% this year. that's before the interest payments. huge issues about the politics of greece and extra money they'll need moving forward and whether their insider bailout program or not in order to get that. finally i want to mention to you, euro disney which is, of course, the theme park just in the suburbs of paris.
today, the california parent disney itself has announced a $1.25 billion bailout effectively. the stock absolutely smashed as you can see because this is only -- this company is only worth about $100 million. at the heart of what the money that's coming through from california is a $600 million debt for equity swap which dilutes out the shares or value of the shares. back to you. >> thank you very much. when we come back, cheryl stand berg, eli musk, tim cook, a few of the names on the next list of names that will change business. kara swisher one of the judges and she will tell us who to watch for and break down today's news on hp in just a minute. opinions. there's no shortage in this world. who do you trust? whose analysis is accurate? how do you make sense of it all?
a simple, unbiased stock score consolidated from the opinions of independent analysts... is that too much to ask? nope. equity summary score, powered by starmine, will help you execute your ideas with speed and conviction. and it's only on fidelity.com. open an account and find more of the expertise you need to be a better investor. revolutionary by every standard. and that became our passion. to always build something better, airplanes that fly cleaner and farther on less fuel. that redefine comfort and connect the world like never before. after all, you can't turn dreams into airplanes unless your passion for innovation is nonstop. ♪
radio with you in the car, it's with you on an app, television with you on your phone or your pad, your tablet, so i think that to the extent that we're creating better quality content for all of these different outlets that's where it's going. it's just going to get better. >> that was ryan seacrest, one of those who made the cut for the cnbc next list talking about the future of television and radio. all day at cnbc we've been
unveiling the next list of rebels, leaders and innovators who will change business over the next 25 years. it includes elon musk, tim cook, dick costolo, and others. kara swisher co-executive editor for re/code one of the judges so to speak on the advisory board. good morning. >> hey, carl. >> everybody approaches this from a different viewpoint but for you, what was the test of someone who should be on this list? >> someone that's really disrupting. someone who's really doing something that's unusual and not sort of the same old, same old. that's what i was looking for. things that could be promising even if they don't work that are interesting. >> some of these selections seem to be about more on a sector or product because we had a couple that overlapped. bill ackman and dan loeb, drew houston and aaron levie. seems there are several bets on industries too. >> absolutely. there are certain things like elon musk doing all kinds of odd things, moving to mars, building
cars and that's to me very interesting in terms of innovation but in general it is product oriented with the cloud, for example, such a big thing, storage is such a big thing. and, you know, i don't know if edge funds as well but all sorts of innovations going on too. >> a number of people might underestimate jessica alba, not understand what she's done with the honest company. you've had her at your conferences. tell me what impresses you about her. >> she's got a great partner too, brian lee. they're doing really interesting stuff in terms of commerce and commerce that they send in terms of commerce that is sort of a definite brand of, you know, things that are around ecologically, safe things for children, smart move. interesting to see how big they can get or get bought actually is what i assume. sort of like a snapple for cleaning stuff for kids and stuff like that. it's interesting. it's innovative. >> kara, we get push back for putting people like tim cook or mary barra of gm, people say
come on, they're running huge multinationals, billion dollar companies, why do they belong? >> well, i don't know if i picked tim cook or mary, but tim is going to be running one of the biggest and most important companies in the mobile space. mobile is where it's at. what he does will have reverberations everywhere. even though he's been around a long time he still is going to be impacting the next 20 years for sure. >> i remember some of the people who didn't make the first list it was hard for us to figure okay the past 25 years, we end up putting on steve jobs, not tim cook, but when you take a look at what's likely to happen over the next year, the platforms, wearables, the watch coming out, plenty of ground certainly to be. >> when we think about media, we entered the segment with a sound bite from ryan seacrest talking about how the content companies will still be in the drivers seat, even 25 years from now. there's almost no one on this list that is a distributor of content. >> well, you know, interestingly
i mean ryan is right, i don't know if they will be in the driver's seat. they will be important and creators like him will be important. i'm not so sure the networks are quite as important going forward. i think they're not going to be at all. and i think that people like ryan and others that make content and contribute them on all kinds of platforms will be the big players. that said they need the platforms, googles, amazons, apples and that's where the action is going to happen. you know, netflix obviously has been an important precursor of what's going to happen. it will be interesting to see what happens to the company by the way. >> anyone on the list in your space, kara, that you think is under the radar so to speak? >> no. i think everybody's pretty well known. i think it's an interesting, you know, group of people. i think evan spiegel is interesting. we'll see kind of person. we'll see how that works out if it doesn't become something that kids get tired of or if he can innovate it. i don't think he's under the radar. just a lot of pressure on him to create a company that lasts. >> kara, stick around.
we want to get your thoughts in just a couple minutes on the big story this morning, hp announcing it will split into who companies and lay off 5,000 workers in the process. josh lipton outside hp headquarters in palo alto, california, with more. josh? >> well, hp's ceo meg whitman used to say her company's business lines worked in her words better together, not any more. hp now saying it's going to split in two with one company called hp inc. devoted to printers and personal computers, the other called hue lit enterprise, enterprise hardware, software and services. whitman will be the ceo of enterprise. dion wise her will take over hp inc. she was talking about how the two companies will be focused and agile she says in a rapidly changing marketplace. >> today is only possible because the turnaround has
succeeded. think about what we have accomplished over the last three years. a rebuilt balanced sheet, innovation pipeline that is significantly improved over three years ago. i would argue best in class in the industry now. but we have to gather ourselves as one hp but now we're in the position to take advantage of what's going on in the marketplace and position these two companies for growth. >> now there's another reason whitman might have acted now. re/code reporting that the company tried to sell its pc division but rivals like lenovo and dell were not interested. investors, though, cheering the news this morning. that stock up about 70% in the past 12 months. some financial analysts, though, who cover this company do have questions. they argue that these business lines remain challenged for growth, that they face real long-term structural head winds so whether a spinoff really addresses those concerns and unlocks value is the open question. carl, back to you.
>> josh, thank you so much for that. kara, that re/code report is interesting and sort of dovetails with what some analysts have told us this morning that is that this probably was not their first choice, right? >> no. this is a well organized mess. sounds good. the turnaround is working so we're going to split it up. this is a mess. i couldn't agree more with roger mcnamee they didn't know what to do and even splitting up, they face enormous challenges and so, you know, the hp way is not the way people are doing computing now and so maybe it will be better smaller. i'm not so sure. we'll see. >> kara, sometimes formally announcing you're splitting is a way of publicly hanging the for sale sign. do you think of a prospect for either of these businesses is possible? >> i think the pc division, dell would be a buyer for that i would think. there's several others. several others in asia. i think the enterprise division has a few buyers, but that probably will be run separately. you know, trying an ibm thing it looks like.
>> kara -- >> so i don't know. probably. the pc division. >> kara, if it's possible, strain for us for a moment and try to figure out the bull case on either or both of these split companies, how it could work? >> i don't think i have one. i honestly, i heard yours but i think it's ridiculous. sorry. no bull case. they're behind in lots of areas, especially in the pc area. when -- did you go out and by a hp pc any time recently? i just don't -- >> the bull case on apple in the '90s was ridiculous too. >> that was 25 years ago. whatever. that's a million years ago and steve jobs. >> the next 25. >> i don't think so. i don't know. i don't think so. i think it's really a troubled company and it's cutting itself in half to cut in half the trouble presumably. >> but driven -- troubles driven by excuse, kara, or just reality? after watching dell and ibm and all the others go through what they've gone through? >> i think roger was right, bad managers in there for 25 years. you know, hp is such a storied
company, we want it to work and it's sort of like yahoo!. not working. so let's try doing crazy stuff and so whatever. it's just a good idea. i guess. but we'll see what happens. it just creates an -- first they thought it was great together and now really what we want to do is put it apart which is different than ebay i have to say. that made more sense to pull that division out. but, you know, these people like to conglomerate things and deconglomerate them and conglomerate them and shareholders pay the price. >> unlike ebay where john donahoe will be departing meg whitman is sticking around to run one of the businesses. do you think she can have a second act at this company some. >> maybe. i don't know. it's a tough business. that's a very hard business where she's competing in and a better -- she will have more focus and a very adept executive but hasn't gotten her hands around this problem. again, she inherited a lot of problems al those lawsuits with autonomy, very fast to say it's changing fast is like saying,
you know, ten years after the light bulb came that people are using light. of course it's changing fast and can she keep up with it and that's hard. it's a tough job. >> yeah. i'm trying to remember the last hp ceo who didn't inherit a lot of problems. >> you got to go through her, fee reneny. maybe hewlett-packard, those guys that was a good one. >> fantastic. >> kara, always great to see you. thanks again. >> thanks. >> kara swisher from re/code. >> former ceo hang greenberg's trial versus the government is under way. hank paulson wrapping up his testimony where mary is live with the latest. mary? >> hey there. you know we're in a little bit of a tizzy because hank paulson we were given guidance he would be testifying for six hours today. his testimony wrapped up very early. he was only on the stand about two hours. and then he was dismissed.
so tim geithner, his successor suz supposed to follow him but mr. geithner can't come until about 4:00 today. we'll see if his testimony is pushed until tomorrow. now keep in mind, this court case is about whether or not the government violated aig's fifth amendment rights with the $182 billion bailout the plaintiffs allege was unfairly punitive to aig shareholders. david boies during his question of mr. paulson was asking him about the loan rates which mr. paulson said on those aig loans were partially punitive. they were over 11% during the financial crisis. other companies received loans around 4% rate. and paulson said his reason for such punitive rates was to sell this rescue of aig to a public an american public and politicians who basically didn't want to give any more money to the government to help save the financial system or more specifically, the companies that had caused this problem so he
ne said you needed to do something to get congress and the american public to believe. on the cross, he said he was more concerned about stability first in the financial system, get the money to the companies that need it and then worry about moral hazard second. again paulson concluding his testimony quite a bit earlier. we were expecting six hours, only took two hours and we'll be back whether mr. geithner testifies today but we are expecting him on the witness stand tomorrow. back to you. >> all right. mary, thank you so much. mary thompson covering that for us today. when we come back a slam dunk for the nba. a look at the league's mega tv deals and the focus on mobile and what it's going to do to the salary cap, that in a moment. we'll be back. dow has gone negative down 23 points.
where the reward was that what if tnew car smelledit card and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at buypowercard.com so i can reach ally bank 24/7, but there are24/7branches? it's just i'm a little reluctant to try new things. what's wrong with trying new things? feel that in your muscles? yeah... i do... try a new way to bank, where no branches equals great rates.
coming up at the top of the hour, halftime is live today from liberty national golf club in jersey city for the harlem rbi celebrity golf classic presented by morgan stanley. today we're going to be joined by morgan stanley's colbert narsis, blackstone's david blitzer, new york, yankee mark teixeira and economicer elect of major league baseball, rob man fred. talking to one of cbs's next 25 honor inries, the co-founder of paypal, about his new and next venture straight ahead from this gorgeous golf club, special
edition of halftime at the top of the hour. >> that is a lineup, cannot wait. thanks. meantime the nba renewing deals with turner broadcasting and espn and it's not just about traditional broadcast anymore. julia boorstin has details for us. good morning, julia. >> good morning. the nba's nine-year deals will pay about 2.5 times as much as the current deals bringing the nba about $2.5 billion a year. those broadcast partners are paying for a lot more digital content. espn announcing it's working on a an over-the-top streaming service to give access to regular season games live. among other things. the details haven't been worked out yet but it could be open to people who do not pay for cable or satellite tv which would be a game changer for espn which is the highest paid cable channel and help them move towards an a la carte model. the nba commissioner says this new model and over-the-top option would not cannibalize its core business.
>> there is a millen nall consumer out there who has a different approach to the traditional cable or satellite package, but we think it will be supplemental. we think there's a demand to get live games on mobile devices but it will ultimately supplement the premium content that we're providing through cable and satellite. >> before that service launches we can expect more digital content across espn. espn will increase its nba focused programming with 750 new hours of nba content on both linear and digital platforms. turners deal in addition to expanding tnt's regular season coverage to 64 games annually will give turner more nba content for bleacher report as well as team stream app and rights for nba on tnt games for tv subscribers. today's high priced deal comes as sports content which viewers want to watch live is more valuable than ever. these agreements show that value starting to be realized in streaming deals as well.
who work with portfolio management experts that's when expertise happens. mfs. because there is no expertise without collaboration. the ultimate arena for business. hour after hour of diving deep, touching base, and putting ducks in rows. the only problem with conference calls: eventually they have to end. unless you have the comcast business voiceedge mobile app. it lets you switch seamlessly from your desk phone to your mobile with no interruptions.
i've never felt so alive. get the future of phone and the phones are free. comcast business. built for business. first ebay and now hp. could these splits of tech companies have some fallout for other big names that the market is following. dominic chu has a look at who might be next in splitsville. hey. >> so right after those
headlines came out from hp's breakup, rbc capital analyst mark sue came out with a note to compliants regarding cisco. he says the company could split or spin off parts of its business to kickstart the stock. specifically splitting off the data and cloud business from the traditional i.t. infrastructure like routers and switches. that move ensues estimation could propel the stock to 40 bucks a share. he also compared cisco to industrial congom glats ge saying both have become too big and slow to deal with smaller competitives and now that's one thing. now speaking of mega cap companies when it comes to tech there aren't that many bigger than microsoft for that matter. the company is more famous for its windows and office franchise but also has huge presence in the fast growing cloud computing business as well and has two hardware businesses also. xbox video games and everything there and the nokia telephone hand seth business will be a big deal. check out sony, another target
for possible spinoff. dan loeb and his hedge fund have been agitating for change and a possible spinoff of that company. sony has appeared reluctant to carve out the profitable and entertainment part of the business interest the consumer electronics. in the end for all of these companies it's about trying to maximize shareholder value the stock price and how compelling a case can be made for tearing down what took a lot of time and money to put together in the first place. carl back over to you. >> that's an interesting point and i'm drawn to it. pepsi or dupont as nelson tries to argue for the same thing in a bunch of industries. >> to a lesser degree of success, but quite a long gestation period. the idea of hp is not new. they tried to do it a couple years ago. wanted to build up the company. now seems like it's the right time. cramer has been talking about microsoft, the one he thinks is the next candidate. >> it's harder to do these
splitoffs in technology than separate chips from soda. underlying technology tying it all together. >> intellectual property things they have rights to, valuable assets. >> we'll get more spinoff news, breaking bad fans finally getting their fix as amc releases a preview of the show's spinoff, better call sal. a look after the break. see things in a whole new way. it's in this spirit that ing u.s. is becoming a new kind of company. ing u.s. is now voya. changing the way you think of retirement.
as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. 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 and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers;
go to ziprecruiter.com/offer2. ghave a nice flight!r bag right here.; traveling can feel like one big mystery. you're never quite sure what is coming your way. but when you've got an entire company who knows that the most on-time flights are nothing if we can't get your things there too. it's no wonder more people choose delta than any other airline.
a treat for fans of about the "breaking bad." amc is releasing a series called "better call sal" take a listen ♪ drink one two three long island iced teas but your buddy is worse off and throws you his car keys ♪ ♪ blue lights are blinking 4:00 in the morning the trooper makes you wish you had never been born ♪ ♪ better call sal >> you guys "breaking bad" fans? >> no. >> didn't watch it. >> wow. >> you're alone on this one. >> maybe i'll catch up in time for the spinoff. there is life after "breaking bad". >> make up for it on "homeland". >> since i had kids -- >> i spent quality time with sal bernson last night. >> i can't handle certain amounts of tension. >> but you'll go to "gone girl" over the weekend. >> a different tension.
>> how was it? >> it's fantastic. >> very good. >> yeah. david fitcher fans rejoice. meantime lows, dows down 35. see what afternoon brings. the news flow continues like this it's going to be an it interesting week. does it for us at "squawk alley." time for the "fast money halftime" starts now. all right. thanks so much. welcome to the halftime show. we are live today from liberty national golf club just across the harbor from lower manhattan. it is a truly spectacular setting for the harlem rbi celebrity golf classic, event that benefits the organization's youth development program and charter school which serves 1500 kids and young adults with year round sports, educational programs and social services free of charge to the community. we're going to bring in our first guest in a moment. first check where the market stands. it's been a squishy d