Good friday morning. Were going to kick things off this hour, of course, with tiktok as the president orders downloads of the platform and we chat to be blocked beginning on sunday does this put the oracle deal into jeopardy . We have every angle good morning. What we know right now is the e commerce officials is that as of midnight on sun theyre going t stop people from using the apps. The quality will be degraded pretty quickly it is after the president ial election, carl of course we chat is used for Many Americans to communicate with family back home, also for payments, logistics, and i know you were talking about this perhaps being a bit of a climb down, but we dont really know the implications yet yes there are 19 million we chat users here in america versus 1. 2 billion in china, but we dont know how many of the 19 million users are businesses meanwhile the app will continue to operate as it is. Does it not protect some of the bigger american businesses like starbucks and disney that rely on it over there we could see a real crack. I think youre absolutely right. The Business Community here, and a lot of the lobby groups in washington had been pushing very hard for the Trump Administration to recognize the importance of we chat here in china. It is a super app, you cant live without it in china, and Big Companies use it for payments and marketing and reaching out to chinese consumers. They want to make sure theyre able to hive off of the implications of the ban so that if it is only affecting the u. S. We chat, as opposed to the chinese version, then that would make it so much easier for a lot of these Big Companies but you know you mentioned some of the Smaller Company thats do cross border work. I have been talking to a bunch of those folks and they have been telling me they already started making changes to try to communicate with their chinese users or suppliers in a different way. Changing the communications to use email, to switch to other messaging apps like signal, telegram but for the most part they say that a lot of modes of communication like getting on the phone really are not as efficient as we chat im not sure i buy what the president seems to be going here he seems to be pressuring china but he could be bluffing didnt we think the deadline for a deal was the 15th, then the 20th, then it had to be told, maybe it doesnt it could be an elaborate luf i think the deal was the 20th the president was referring to it as if it was the 15th, and i think what is happening in this congress department. I think they are pushing out the deadline for tiktok in particular i think we will get much more information today. I think it is possible that bitedance could file for a stay. They could ask for they already have a lawsuit filed on august 24th. A judge could grant a stay preventing this from going into effect and the other option is that they could offer more concessions. They could try to see what the president does need to approve this deal. And we could see a deal approved there are various outcomes people could still download the app next week and well see what the president decides. One thing that is important here to point out is that tiktok, bitedance, oracle, everyone believes that the deal on the table has Extraordinary Security measures including not only u. S. Approval, government approval of the board, but also having someone that has top security clearance sitting on the new tiktok board so the question really is what more could the president ask for. Perhaps bitedance selling a greater percentage of the ownership stake of this country. Still a lot to be sorted out yeah, julia, he could ask for a outright sale, right which is where we all thought this was heading a week ago. So aman, back to you, we talked about the broader implications that this executive ban, or a Trump Administrations attention could also turn to chinese cloud providers. We have not heard anything there. Tiktok and we chat sucked all of the air out of the room. What are you hearing about what is next . Yeah, sure, a couple updates. We might get more detail on this today. The white house as we are standing here, they told the press pool that the president will brief the press at 2 00 p. M. Today you can expect he will have quite a bit to say at 2 00 p. M well get more insight into his thinking about his approach for the weekend. In terms of u. S. Scrutiny of other companies, commerce officials were asked about that on the call that they held for us reporters this morning. They refused to go beyond the four corners of the document theyre putting out today. Theyre not saying what other Companies Might be under cru scrutiny here, but it seems plausible that the United States be looking at a whole range of other concerns there are concerns about massive amounts of data of every type. Financial, personal, some of the stuff on tiktok, all of that beib being collects to understand American Society at a micro level. That is the broad concern. Over laid on that is issues on economics, and of course the american election. On the china side, do you feel like they have a good sense of what the Trump Administration wants here i think they are very concerned about and the way that beijing really viewing the tiktok saga is the way for u. S. And the Trump Administration to try to contain china that has been the big narrative overall. Post people have been in the Tech Community here as well as on the official side, they have been looking at it as a way of not losing its algorithm on social media a lot of nationalistic sentiment has been brought along that point. Beijing made a couple tweaks to its expert controls that was really herolarolded asa smart move it was a negotiabling point for bite dance to say that the Chinese Government is not going to allow me to sell this algorithm. It has to go back to the chinese. That was really a way in which the chinese were quite pleased with what the government had done interesting eunice, julia, thank you guys. A lot of people working over the weekend on this one. Lets bring in benedict evans. It is always good to talk to you, good morning. Good morning, youre very good at sifting through the clutter and there is a lot of political noise around this. Do you see it more as transactional . More tactical maneuvering, or is it an internet world war i think we have to unpick two things first is the particular process around tiktok and to some extent, we chat, trump, executive orders, and the chaos that has been going on for the last couple weeks around this. Listening to all of your correspondence and that is not, you know, really an ideal way of running this stuff i think there is a deeper general point here we are experiencing an end of the world where all of this stuff came from america. All of the interment was controlled everybody else just had to suck it up. Now the internet is a systemically important part of this side of the eithearth meanwhile it is not just coming from all of america any more i think tiktok crystallizes all of that. I think if you were to kind of have this argument about how much information does it connect. Could you really read your email, but if you were to generalize this and say what would we think if tencent wanted to buy netflix or youtube. If they went off and started fox news so there is a fundamental question here of what does it mean for the app to be controlled by Foreign Government or made in a foreign country or in a foreign country where the government controls everything but looping back to the process question, you need to have something that is repeatable here you need repeatable consistent projects there will be 20 more of these things i was going to say what does it say to you that were having such deep reflective thoughts about the future of accessibility when really the story of tiktok is something that is highly discretionary, right . It is cat videos and something our kids play. You can imagine a situation where it gets replaced by another a thpp that is just as trendy in a few years. Rather than calling it a social network, i think it is much more interesting to think of it as a tv channel. What would we think if they wanted to buy netflix. We would not think about that as espeonage. Were going to be playing whack a mole you need to think about privacy. Whackamole, that is what strikes me about this. Whackamole is worst when youre the mole. If you have the hammer it is kind of fun. It seems to have taken this position, but the president gets the gladiator style to do this or this and it maximizes his leverage what does that do for business we have a sense of what the rules of what th algorith algorithms. It raises a question for anyone who wants to reach u. S. Consumers. We always have australia putting in laws about taxes and subsidizing. This is the eu providing gdp, california passing privacy laws. They have accelerating regulation of the internet in very overlambing extpping an territorial ways kind of the question here is, yes, this process itself is chaos and chaos is never good for business there is a deeper problem here how will you address what it means when 100 million americans are using an app that is not made in america. The rest of the world has to think about this american thing. So now america is trying to think about what that means in a new way. So different regions have their own rules and were trying to apply them to Global Companies i cant help but think that perhaps thats is like a best Case Scenario right now. What else could it be . We could be closed to some of the biggest apps and Technology Companies like china is to us. The United States is supposed to be open, are we trending toward their two separate and i think you can expect that china is supposed to turn off all internet sensorship. That would be a fundamental threat to their existence. What is the opponent in asking, youre not going to get it youre not going to get them to let google into facebook and china. What is the actual design outcome here i feel like a more useful way to think about this is how do we think about what gets recommended to kids on their phones how do we think about what information is collected on their phones that is my point, though, it seems like their ban is over there and were banning them here yeah, and thats not going to work if they start panning more, i saw them saying this is not good for facebook you would think it is kind of good for facebook, competitors being removed, but its not good for them, for anybody, to have a bunch of arbitrary rules being thrown around. This is kind of the way that 18th century france was run. They have rules and they can plan finally, benedict, interesting comments this morning from the head of instagram saying this was no good for anybody what about other players that were competing in the space. Well, you know, on one level, you know as i said, the naive person would stay is great but what they suspect an environment in which they have a clearly understood frame work. It is entirely possible that tomorrow the government will come and say you must carry political content. Or laws on content moderation. And they will be random executive orders and it is an environment when the president runs around bashing things with a hammer because people applaud when he does it. If you bash a opponent, you dont know if he will bash you the next day thank you, that is a nice view at 30,000 feet even as were all trying to figure out what is happening. Yeah, in the next five minutes. Thank you now we turn our attention to gaming and a hue ipo thge ipo c, that is unity. music anncr give customers access to precisely what they want, when they need it the most. With adyen, the payments platform that delivers convenience for all. Adyen. Business. Not boundaries. The big events are back. Xfinity is your home for the return of live sports. Looking for a 12 bill market cap that is kind casing to open a lot higher than that 50 higher, the unity ipo comes during a massive q 4 app stores from apple and google wrestling for control of mobile distribution and control makers bulking up for battle. Todays player one for unity, josh investors are eager to capitalize on the industry unity soft wrar making their public debut the company was found in 2004. Now nearly 4,000 employees rising to 351 million with losses narrowing they are a Gaming Technology company, they use their Software Tool cooled a unity engine to create 2d and 3d content they generate revenue from a service. They are monetizing their content including through advertising. It includes hit titles like pokeman. He says a big question is how long long sere it available. Doug, very confident that it can, he bets that unity is the best auto desk and if they execute the next adobe one risk though . Competition from epic games that remember, offers a very popular, sophisticated game engine of its own analysts say the companies largely operate in different markets. At least for now with unity serving mostly mobile game developers. Back to you all. That is where there is so much need for tools in this Cross Platform era of streams, console games, pc games, right yeah, youre right. So many more people are working, learning, and playing at home. Theyre looking for more inhome entertainment and that benefitted a lot of the companies. They playing that broader theme and trend. One of those is active vision. They have been under pressure this month, but if you just pull back the chart here to date, the broad gains, now today well see how investors react to a new way to play that broader trend and josh, a new way of going public in a week when we have 12 ipos were looking ahead to the direct listing next week and a question for jon as well i know we have been talking about it so much this week the coo and cfo have control on pricing and allocation i believe last time we looked at the indicated range it may open even higher than that. What does that tell us about the ipo process and josh, do you think we could see more companies, particularly in the video game space, take perhaps a nontraditional route to going public yeah, it is an interesting question one that you guys could pose to rick it is a great question for him when he comes on later he is an interesting guy to watch in this space. John took ov jon took over this company a few years back he is known as a guy with very strong opinions that understands the industry, the trends, the themes here. So a great question for him. What i love about this one is that the company is letting employees sell up to 15 of their Vested Holdings from the time the stock opens today through september 30th ari levy has more on that. So often employees get left waiting and holding the bag as it were, but apparently not this time it is such a good point you can pick and choose. If you see that first day pop there is a lot of reason to believe that management can do it as well as the investment bankers. Well see. Even as the tape remains soggy here, guys, the s p for the second day in a row hitting at the 50 day were back in a moment motorcycle riders love the open road. And geico loves helping riders get to where theyre going, so to help even more, geico is giving new and current customers a fifteen percent credit on their motorcycle policies with the geico giveback. And because were committed for the long haul, the credit lasts your full policy term. The geico giveback. Helping riders focus on the road ahead. This was the theater i came to quite often. The support weve had over the last few months has been amazing. Its not just a work environment. Everyone here is family. If you are ready to open your heart and your home, check us out. We thought for sure that we were done. And this town said not today. Still up some 80 from the ipo price, is now an opportunity to get in . Do your homework first and go to cnbc. Com for historical precedence on what happens to ipos when they double on they debut. And yuanty, a leading platform for video game developers. We will talk to the ceo this hour right after the first trade. Dont gonyer awhe. Welcome back, everybody u. S. Under secretary of state holding talks with taiwans minister of Foreign Affairs joseph wu in taipei on friday in an effort to strengthen relations with the nation. But they arranged for fighter jets to buzz the island during his visit. A firefighter has died while working to contain the eldorado fire the exact cause of his death is still under investigation. The fire has now scorched more than 21,000 acres. An author Winston Groom has died at the age of 77. He wrote a number of novels, but this one as well, forrest gump. He wrote 16 books, fiction and nonfiction. I am embarrassed to admit i dont know that was a book before a movie thats what the news updates are for. Now were going to turn back to ipos the latest indicates on pricing still between 74 and 76. Roger joining us now good to see you, youre very familiar with the man running this company right now with you on elevation when you first started. My question for investors here is in this huge q4 coming up, got these new consoles, the a store battles. We have unity now, where is the most profit value going to be Going Forward . Consoles, individual game franchises, or tools like unity . Well, you know john historically the highest leverage is the individual game if you have pokemon go or the equivalent that is the game opinion that is your highest leverage play. The core question here to me is among platforms is there a lift from new hardware. Has the move towards streaming, the engagement of platforms like apple, google, and facebook in delivering games, how does that change things . I dont know at this point one of the reasons that people like unity is that it is positioned to prosper irrespective of who wins for me what i find fascinating is what john is doing on this ipo is if it succeeds, and it sure looks like it will, it will really change how ceos look at the ipo process. I want to go back for a moment we want to talk more about the ipo process. What about where the value is for investors right now. What you said about the value traditionally had been in the game, isnt that a little like saying the value had traditionally been in the block buster movie but boy, wouldnt you rather own adobe right now that has the tools to make the movie, because more than any individual movie studio, the value has gone in the past ten years you asked where the leverage was. This is like going to a roulette table. There is more leverage there but it is a very high Risk Strategy these diversified played, i think, are really good in this cycle. Because of covid, all of the dynamics really favor games at the moment as an entertainment choice i think that if you will, the things that are broader based with lower individual leverage are remarkably well positioned you will always be better off if you can hit the direct play. The single game to wing vegas. I dont kn win vegas. I would tend to take a diversified play but your mileage may vary i want to highlight for our audience as we await that first unity trade that the indicated range is now 75. 50 to 76. 50. I know you were about to talk about the ipo process. What about when youre seeing the pop thats we have seen from other successful ipos this year and it is interesting to note the debate of course on one side you have bill gurley pointing to sn snowflakes surge, and you have them saying that ipo pops are a side show. Where do you stand so i believe theyre the lowest cost marketing that they can do it is really good for your brand to have your stock go up a lot you get a ton of earned media. Cnbc invites you back on a lot in many industries, and i would say this is nowhere more value than in things like Enterprise Software where it is really hard to build your brand without an event like this. You sit there and you say could you have gotten 72 or 74 for an ipo by pricing at whatever price, youre likely to lure in investor thats will get an incomplete position and it will be their attempt to fill out the position that drives the stock to 72. So i disagree on this completely i think it is very much in the companys interest to have a splashy ipo. This is, in my opinion, absolutely the right way to do it i would note we like the companies that fall below their prices as well like an uber, but youre right we do put more on that ipo popp. I want to get to the thing that is really profound about this sdael that we have been creeping to better information for years. You see people like facebook that attempt to do ipos with a twist. Where they really push the price very hard, or others try to do direct placements, there have been a series of efforts to try to take away the leverage that bankers have they historically were the only ones with information on buyers and sellers. But roger, how can you say we have become better at pricing them though. We have had 11 or 12 this year where we have seen the share price double nap is still leaving money on the table bare with me for just a moment lets talk about the changes going on in the market i believe this is the first time where the company, the issue has gotten the balance right so theyre gathers Market Information from buyers. And really, the bankers core function but in the last dozen of years, Big Companies have been getting more and more involved with requirement companies. The advantage that the bankers had, standing between the buyer and the seller, that is going away the issue of how you price these things is a different problem. And i would look at this and go it doesnt matter if it is a banker involved or not. Ipos often pop they dont always pop, but they often pop. Generally speaking there is very few shares available and a lot of demand. This is one chance you get i do not think that taking the last mpen anypenny off of the as in the best interest of the issuer im not troubled by ipo pops i think im balancing that work pretty well, because roger, just wanted to ask i know you hold out of sapple awhile back. You know the ceo did you want or get any piece of the action here or did you just sit it out i sat it out for a simple reason john is my friend. I want to be his friend and advisor, and i didnt want any complications. I had to make a choice participate or be his friend, and you know it is much more important for know be johns friend i appreciate that, thats like a million bucks, or five or ten million bucks. Lets get to more news on tiktok yeah, thats right i just spoke to a Senior Administration official to get a sense of where we are right now in the negotiations and what the official is telling me in terms of oracle and tiktok is those negotiations are going through the weekend. Theyre on going and theyre trying to figure out a lot of major pieces how the software will be worked out. Those are the big pieces of the deal they say there is still a chance that there is a deal with a transaction before this implementation before the new rules go into place on monday and users are no longer able to down load tiktok off of American App Stores a chance for a deal. The official also saying here that we chat, however, is dead in the United States so tiktok might have a chance in the United States, we chat according to the Senior Administration official is dead in the United States based on this final decision. There is nothing to do to save wechat so a couple other points, one is that the committee on Foreign Investment with the United States the formal committee has not even met yet they are working out speterms oa special deal in has not been brought to the committee or the president and they say that no final decisions have been made yet in terms of tiktok finally, jon, the important point here that the Senior Administration official makes is that the Chinese Government did not weigh in they did not hear from the Chinese Government on whether or not they would, on their end, bless the sale of tiktok assets by bitedance to oracle for a u. S. Subsidiary. Until the Chinese Government blesses this, there is at least a potential scenario in which the United States could come up with a deal between oracle, tiktok, bite dance, that deal could be blessed by the president of the United States so a lot of moving parts there, but one point that i think is maybe getting lost a lit until all of the conversation about this is where is the chinese on this theyre saying that the u. S. Government doesnt know at this point. A lot of moving parts behind the scenes right now thank you, roger, your thoughts on the brinks manship here a stand off over tiktok and the u. S. And Chinese Governments what i just heard him say is i hopes at least they got the lunch menus in order and from where i sit, perverse outcomes, is that if youre an american and you have tiktok, and they shut you down on monday, that will not prevent you from using the product, just from getting security updates and other things that might actual i will be helpful and it does absolutely nothing but the fact that there is a giant data marketplace in the United States. Where china, or anybody else, can go in and buy all of the same data. In theory were trying to prevent them from getting it with this deal they can use facebook and google to get access to americans in ways that, you know, are what is going on with tiktok this feels like a performance, and it feels like a performance where they have not actually written the script yet theyre just winging it. And you know, listen to aman the list of things not done is essentially every deal point roger, taking that a step further, you know, when i lived in china and a lot of american apps were not available to me, i used a vpn i think we have not talked about that yet but could key see them surge. Theyre going to figure out is that going to cause more action, do you think the part that i dont get, that is clearly an option, right . I dont know how that gets you access to app stores overseas. It maybe gets you access, there probably is a way to do that without that you cant do the updates or get the security patches and all of that. None thof this is well thought out. The strategy in the United States for dealing with data, dealing with internet platforms, is in the early stages of moving from from these to help make them coexist this is essentially round one. What i hope is that there will be 25 more rounds of, you know, will we get progressively better ideas and progressively prodder implementation keeping we chat out of the United States in my opinion is a really good idea i think that im okay with keeping tiktok out as well i would like us to recognize that google out you tube, facebook, instagram, twitter, all of the data brokers are work arounds for china or any other country that wants to manipulate what raises questions with me is the decisions and the absence of rules that allow businesses a clear path forward stay with us the ceo is going to be with us in a moment. Indications now between 74. 50 and 75. 50. Well be right back. Good morning, mr. Sun. Good morning, blair. [ chuckles ] whoo. Im gonna grow big and strong. Yes, you are. Im gonna get this place all clean. Ill give you a hand. And im gonna put lisa on crutches wait, what . Said shes gonna need crutches. She fell pretty hard. You might want to clean that up, girl. Excuse us. When owning a Small Business gets real, progressive helps protect what you built with customizable coverage. And im gonna eh, eh, eh. Donny, no. Oh. That helps you master your backhand. Then you should be able to get a bank account that helps you master your budget. Virtual wallet® for Digital Banking from pnc. Its time to get more from your bank. Spread on the unity indication now as we await the owning trade, and the ceo on the other side of this break, stay with us welcome back be squawk alley. We continue to await another big ipo. The last of a very, very busy week that is unity. It was priced at the top of its range and indicated open a little lower than the last time we checked. Between 74. 50, 75. 50 join im sure youre looking forward to the weekend because you have been busy here. I believe its 12 ipos you have been watching this weekend its a great one to end on because it plays into so many of the themes we have been talking about this year. The stay at home trend, video, softwa software the ceo is an interesting story as well. We love this stuff. This is why we come to work ever day to cover these business stories and look out for investors. On this one, unity hits such an interesting time, an important time for the business of gaming where so much is changing. So much is influx. We have two big console launches from playstation and xbox. The first in zin seven years then youve got these tool makers like unity which is going public today and epic which has unreal engine and these tool makers are important to developers who are trying to make games that work not just on mobile, not just on pc, not just on console but across all of these different environments and a question is, do they represent an opportunity on the scale, carl, of an auto desk or an adobe. We like to say time will tell, remains to be seen indeed, john. Cautionary tales abound this week as snowflake got close this morning to taking out its low yesterday of 215 josh lipton is with us as well its becoming part of the tradition of the 11 00 a. M. Hour waiting for these opening trades yeah. I was listening to your conversation one investor said thats a big question on his mind not just in gaming but the quarters ahead he wants the see how much traction this company will get for the tools. The company talked about this, the traction it sees in film, in architecture, in auto. They dont break that out right now. This investor pegged it nongaming revenue i thought probably around 15 was his rough estimate that will be a bieg deal josh, i was digging through the s1 earlier this morning, i was looking through what proportion it gets its busy from the asia pacific i wonder if this could be a fact forward. Ten cent is wechats Parent Company now connected with an American Company going public. Do you think investors are looking at this when we see this so much higher when were talk about these rising geo political tensions, josh yeah. Im very interested. F and h if and how the Chinese Government did respond to this i did hear some guests saying they thought maybe apple had a bigger target on its back. I dont see that at all apple is a popular product in china. Assembling it employees millions of chinese that would be china making shooting itself in its own foot. China blocked some of our most successful pleamerican companies as for the gaming companies, that is interesting to consider. Talking with one gaming analyst this morning who did remind me, in china theres rules out there. Chinese have to approve new games. As he was pointing out, they havent been approving new games at the same rate since the trade tensions started its a risk but maybe one investors understand as youre talk, theres the opening trade. 76 just right around where the final indications were after pricing at 52. Again, john, another situation of which the trade took maybe a bit longer than we thought and sort of ran into schedule conflicts of trying to get the ceo on this will definitely be a conversation in next couple of weeks. Carl x carl, it is out. The bigger ones seem to take longer to come to us ive got nothing. I cant get that thought out of my head. Meantime, the overall markets, as we said, been a little soggy on this friday. S p came down to the 50day moving aver raj fmove ing average trying to hold the levels as it will be a busy weekend in headlines well takere oni bakpion well get the half on the other side dont go away. Now you can trade stocks and etfs for any amount you choose instead of buying by the share. All with no commissions. Stocks by the slice from fidelity. Get your slice today. Stocks by the slice from fidelity. Tmobiles new offer on iphone 11 pro is even better on our most powerful signal. Switch and get two new lines of unlimited for only 90 and 2 iphone 11 pros on us. Only at tmobile. Welcome to the Halftime Report the turbulent tech trade is more selling ahead for that sector what does that mean for your money . Lets go to the wall and see where stocks are trading spacin for the first winning week