Now the ceo of juul is out and tobacco giants Philip Morris and altria call off their merger talks. The Political Risk for stocks, futures pointing to a muted open House Democrats move on impeachment and what the turmoil will mean for ongoing u. S. china trade talks. New products driving sales and double digit growth in china. Big news regarding Philip Morris international and altria. The two companies deciding to end merger talks juul is announcing that kevin berns is stepping down as ceo. It will suspend all broadcast, print and Digital Advertising in the United States as regulators have launched this crackdown on vaping products. Meantime, altria tightens their guidance for the year. Reaffirms domestic cigarette volume down 5 to 6 but it does seem like juul is entering a new chapter here as they try to get fda approval. I think if the fda cares about where was gottlieb on this cnbc contributor why didnt he shut this thing down we cant get cannabis passed in this country we let juul go through this is a very this is a reckoning moment for altria. The numbers were horrendous, going the way of coal. Juul was the way out it is going to fail. And Philip Morris didnt want anything to it was last thursday, you and i were on set at delivering alpha that my last update indicated, of course, the talks between Philip Morris and altria were going slower. And that less progress is being made and that vaping and the recent moves to ban it in various places had figured in as a significant factor in the talks. That only worsened over the last few days people close to the situation telling me when i had reported it was maybe a 40 chance of what happened. Then it fell to a 10 chance and then, of course, it was yesterday, more or less, they decided this is over and done with the key here, guys, is to why this deal is not happening now between Philip Morris international and altria is because of this recent move toward banning vaping in various places now, remember, the product, it is not vaping, that is the Philip MorrisInternational Product that also is they share it with altria here in the u. S. But they were looking at this merger as an opportunity to pursue what was the open window in innovation in a more aggressive way and certainly that might have included other products. And would have included the relationship with juul it wasnt about economics anymore. Even the declining value of the ownership that altria has in juul, it was about the inability to see ahead here in terms of navigating this whole idea of new problducts and where things would go and how that would impact the combined company. Is it possible one day this deal comes back absolutely but for now, they just couldnt get there. Philip morris growth company, was a growth company, overseas, they smoked more than we do, two Companies Split up, people may not remember, one was supposed to be the growth vehicle, one was the income vehicle it is very hard to be an income vehicle when youre wasting asset, youre a company that literally is losing customers keep dying and you cant find new customers because the country built a consensus against tobacco. And then suddenly they came up with a new way to up end the consensus to do it in a very subrosa way, many addes saying were not appealing to anyone under 21, what everyone knows is if you want people to start you want under 21 to do it, you got t i was opi it. I was open minded until i watched your documentary you cant be objective your documentary made it so these two things are not theyre connected. The juul change in leadership and the altria Philip MorrisNational Talk burns replacement is casey crossweit, chief strategy growth officer. Does feel like theyre going to try to make iqos the new swing and try to do it the right way through regulation that they managed to pass. I wanted if you feel it is a great way to be able to stop people from smoking, make it a prescription product, what gottlieb should have done. It means that altria overpaid for juul if juul is that effective at getting people off tobacco, you make it like it can kill chantix, it is not worth what juul thought it was. And the juul people were, you know, im not saying they were incredibly arrogant. Im saying they genuinely believed that by having flavors that were appeal to children but said you shouldnt use it if youre children, they were very disingenuous and burns said in an interview, i have two kids, i dont want them to use juul great, how about my kids how about my kids . Juul did try to go on an apology tour which began with our documentary in the spring. This is what kevin burns told us at the time. If we did this tour today, with a parent, right, of a teen who had been using, who had been addicted, how would you sort of defend all this, all this scale . All this production, all this growth first of all, i tell them im sorry that their child is using the product. It is not intended for them. I hope there was nothing that we did that made it appealing to them as a parent of a 16yearold, im sorry for them and i have empathy for them in terms of what the challenges theyre going through. So, just ended up being a bit too late here, jim. Look he did scale the business i heard him say that, i mean, i watch your documentary many times, carl. And when he said he had empathy for others, i dont want him to have empathy for others, i want him to stop killing them it is amazing. Your documentary laid it out they were very smart and you could put a subtext on everything, listen, we knew exactly what were doing and they came to us and they all had all the charts and i said, these charts clearly show you can stop smoking by going to the fda and getting a prescription license but you cant make billions. You cant justify the valuation with that. Sometimes you just got had altria got had. You blew it open. You a empathy for the people hes killing . It is killing. Can we just make that point . When my fatherinlaw died from it, it wasnt like he was, like, living he was dying and i just cant get over this stuff is happening and people what has to happen to people to realize what this stuff does do you have to literally die yourself to understand is it really that is it really like that i dont know. Im dead. Do you remember the ads they used to have, the guy, theperry. Hi, king and i, yul brynner, by the time you see this, im dead from smoking by the time you see this, ill be dead. What do we have to do. Im sorry to be so angry about this my wife lost a child and it is a bad thing. And i know that sounds really soporific but it is true we know it is, jim. Final thought on altria and Philip Morris specific to the performance of the stocks. Remember, they embarked on this, not necessarily to create efficiencies but more so really as a recognition some would say that their business perhaps was weaker than Shareholder Base even realized it was there is a question here as to whether or not theyre ever going to regain the lost market cap. Neither one went up on this. At the end of the day, just a loss of market value because there seemed to be a dawning on the part of some shareholders, wait a second, maybe a little tougher out there than we think in terms of people giving up smoking, thankfully, but turning to other alternatives that they felt they needed to go to. Want to stop there and get to a news story that just hit, which is another company that we have covered fairly closely, ebay, devin winnic stepping down, they named they name scott shankle, Senior Vice President , chief financial officer, interim chief executive officer. Ebay has elliott theyre involved on board they had initiated already the Strategic Review of key units including classified and most significantly stub hub, which jim has thought is as significant value. They have been moving forward with that is my understanding. Not clear here exactly unfortunately because not a chance to really talk to anybody since this just hit as to why mr. Wenig is stepping down, given it did appear they were moving in the direction that the activists, they already were representation, and all they say is theyll conduct a search, continue to focus on Strategic Plan and product initiatives at ebay, and mr. Wenig is no longer going to be president and ceo or director hes out. Hes out. Wow. Hes really out. Just see you later. Hes really out thats incredible. How about the fact that theyre going after henninger elliott, did you see that . I did all guns. Training on him. Elliott between at t and then marathon, where they showed up three years ago, asking for a split into three, the Company Initiated a review, but they feel like now perhaps that review is not as fulsome as it should have been they come back three years later. They said, basically, gary, the ceo looked like he would adopt the elliott plan to split up while he was talking about buying endeavor. While he was talking about buying a huge refiner. The opposite of what elliott thought they had we want to get to marathon. Isnt that amazing . He was there for about four years, took over for john donahoe, service now who fought off carl icahn, but split company into pay pal and ebay and the Key Marketplace has been doing theyre not changing their they reaffirmed their full year guidance, guys organic growth, nongap eps growth of eps, says growth here, 270 to 275, check your in both these cases there is something commonal yit aalitycoy the ongoing review looks to be a stone wall of elliott. It has taken a long ebay has moved. Moved at a glarbs pace glacial is rite do you know what it is called when a Glacier Falls caved off. Elliott got caved theyre coming back more to this ebays stock dont let the door hit you on the way out. Kind of thing . Yes, it is. Not an elegant retirement. Like, when like when tom hagan was told to go back tom hagan was told to go back. I was thinking what a week it has been for the ceos of wework, ebay, juul, volkswagen, comp score and nissan thats just this week. Volkswagen is the worst that was manipulation, they nailed those guys. That is a huge slate of people who did not do what we thought they do. Ebay, you want to call devin devin is always he always takes your call. I got him on speed got him on speed dial. We got some breaking news on boeing at well to phil lebeau in chicago. Good morning, phil. Good morning, carl. Five months ago, the boeing board of directors as the 737 max situation was unfolding, they said, well have a Committee Formed on the board of directors to analyze our safety practices. Well, they have now decided they will have a permanent Safety Committee on the board of directors, and not only that, but in the future, when directors are chosen, safety and experience in safety related matters will be one of the criteria for choosing directors in the future. That was one of the criticisms the company also out this morning with a whole list of suggestions from the Safety Committee that may be implemented. We wont run down all of them. There is an article up on cnbc. Com, outlining those. Dont forget, were coming up to that critical point of the year, the fourth quarter, when dennis says the max will be recertified and flying again well see. Were almost here and this is the time when well see if it actually does get certified and is back in the air all right, phil, important on boeing let me ask you, i know youre not the stock buy. But, phil, this stock has youve been unbelievable in the reporting of it. And it just seems that there is just this inevitable approval coming down the road because this is one of the strongest stocks in the market there is i got to believe in undercurrent from the gary kellies of the world that well be back in the air with this, it may be back in the air by the end of 2019. And am i being too optimistic with that narrative . No. If you listen to the commentary, the new head of the faa, from those in the airline industry, ceos, whether it is gary kelly, oscar munoz, the expectation is at least in north america that the max will be flying by the end of the year. Now, are they too optimistic thats the big question here, jim, but i think that most people believe this plane is close to recertification doesnt mean it is going to happen next month, but they do believe by the end of the year theyll get this back in the air by north america, europe, china, thats a different beast altogether may take longer. Wow as were talking, phil, jim, tweets boeing is a buy absolutely. Ive been watching everything that phil says like a hawk and this is the beginning, with the stock crossing 380, of a recognition that this thing is going to be with us. I understand phil is phil, the foreign faa can do what it wants. This plane, once in the area, it will be in the air everywhere. Your story is getting to make me feel like this thing is going to be something were going to forget about 18 months from now because boeing is being incredibly responsible and i think theyre doing great things thats my view i may be a lone. I think boeing is doing this thing right, phil. The key here is that they are likely not going to are to drop production any further, they plan to ramp up production early next year. And you know that is the key here if you havent lost a lot of the backlog, which they havent, and you can ramp up production, there is potentially the chance to make this all up in terms of that backlog by the end of lets say 2021, in terms of those delayed deliveries. And when i talk about, phil, i talk about with big Portfolio Managers about this, what they realized is boeing stock was incredibly undervalued going into this. Because they may have the longest runway, no one else is coming in against them, they have an unbelievable safety record, they stumbled here they finally came clean, whatever it was, i think the faa held him up when this comes back, it is going to help the gdp and youre going to see people say i must own this stock because it has got the best tenyear trajectory of any major industrial. You got to admit, phil, nobody said that boeing is not going to be used to get 2020. Ive not heard a single bad word about what is going to happen with boeing. We havent seen the order cancellations. Thats the key look at that backlog it remains 4400 planes never saw a reduction in backlog. What does that say about that Great American company thank you, phil. Thank you for telling it like it is, the whole darn way all right well watch that in the meantime, well get cramers mad dash, countdown to the opening bell look at the premarket as we continue to Pay Attention to the president at the u. N. This week. More squawk on the street from the ny sait ea setrghahd. Tv announcer its just as powerful as the lexus rx. As many safety features as the rx, the new. The lexus rx has met its match. If theyre talking about you. You must be doing something right. Experience the style, craftsmanship, and technology that have made the rx the leading luxury suv of all time. Lease the 2019 rx 350 for 399 a month for 36 months. Experience amazing at your lexus dealer. A new kind of credit card. Created by apple, not a bank. With a better way to track where you spend. A new level of privacy and security. Daily cash you get back every day. And no fees. Not even hidden ones. Oh, and if you happen to be somewhere that doesnt accept apple pay yet, theres this. Nice. Welcome back well get to a mad dash. Ten minutes before we get started with trading here on hump day we spent some time dealing with elliott this morning elliott management, the activist fund, they do a lot of other things at t, marathon, and now ebay. All this morning. Cohn is on the board of ebay. And devin wenig the ceo out. This is unbelievable. When we speak to devin, he was, to me again, like when alcoa met with elliott, were much more aligned they always say that to us, david. Marathon, were really aligned david, unless it is aligned like invisalign, im taking a harder line. A characteristic of many of the activists, particularly the successful ones, theyre relentless thats something at t will want to keep in mind as well. It is not just once. It is it goes on and on and here, jim, it seems as though the board was simply unhappy as best i can tell with the performance of the marketplace wasnt about actually wasnt actually about moving the process along faster in terms of potential sale thats moving along. It was really about the performance of marketplace and mr. Wenig wasnt getting it done there. You look at shopify, the comps are hard to find when you look at shopify, when you look at etsy, you know, libra, this company was underperforming. Devin wenig, to his credit, said, listen, im trying to turn it i can argue that maybe it cant be turned t was n eturned are they going to have better execution with the new ceo, theyre conducting a search, theyre saying the cfo will take over for now and everybody is happy about that the stock is down a little bit could you explain to people at home that elliott is not some sort of fly by the night outfit, the work they do, when you read it, is the most in depth. They do a lot of work they arent always right in terms of at least identifying a lot of upside in their potential candidates sometimes things work against them remember the battle in hess. Cant fight the commodity. We spoke together and they walked me through it yes, you couldnt fight the commodity. But the work was impeccable. I was blown away by the work i admit it, i said, you know what, wow, i thought i did a lot of work on this, you outworked me i got the commodity right, you got it wrong we have a good relationship. Speaking of elliott, well get to marathon on the other side of this break this is reverse head and shoulders. This could go through the roof i have procter, david pay lohta know what head and shoulders is. Were back after this youre watching cnbcs squawk on the street live from the financial cap actual of tit world. A busy wednesday morning, jim. We covered juul, altria. Havent touched on nike yet. Mark parker last night, it was not just a clinic. It was perhaps one of the the great explanations of how to do business in a crazy world, whether it be tariffs, gross marg margins, china, dealing with brands, using Artificial Intelligence,