Welcome to squawk alley for thursday. Joined today by the founder and ceo. Good to have you back. Great to be here. Watching a pretty descent rally here. Its being overshadowed by the top story of the morning. That of course is testimony or lack there of on capitol hill. Do you wish to make an Opening Statement . On the advice of council i will not be giving an Opening Statement. On the advice of council i respectfully decline to answer your questions. I intend to follow the advice of my council. Not yours. On the advice of council i invoke my fifth amendment right and respectfully decline to answer your questions. Meg has been covering that all morning long and she joins us from washington. His face one quite as see len. A lot of facial expressions including representative cummings. Listen to what he said. Like a scheme, it appears that maybe using revenues to research and identify the next drug and then impose massive bryce increases on victims. Its not funny mr. Shkreli. People are dying and getting sicker and sicker. So repeatedly addressing him as he was looking away and smirking during this calling the money blood money. He pleaded the fifth so many times. In a press conference after shkreli left the hearing his lawyer making very brief statements. Its extraordinarily unfair that he has been singled out with a type of unfair publicity that they have received and with all the facts are ultimately disclosed i think everyone will recognize that mr. Shkreli is not a villain or a bad boy. At the end of the story he is a hero. So say he will be seen as a hero reiterating that hes confident that he will be cleared of all charges. He has federal charges against him and expected to appear in court on may 3rd. Hes been very active on twitter this morning. Putting on a few shots about congress to find out whether theyre monitoring those and let you know what we hear guys. Well be watching that as well. Thank you very much. Lets turn to henry on this one. If you can separate it all aside where does it leave us in the debate over regulation of pricing . Thats a good question. This is a forum where you could have both sides very clearly. Youre talking about drugs that are utterly unaffordable except for a tiny percentage of the population. Then you have to be okay with that and it would be interesting to hear that point of view but yes, overall its a strange strategy. Not so much taking the fifth but just being so obnoxious and disrespectful while doing it. Hard to see how that helped. The interim ceo and other drug executives are there. How happy do you think they must be that so much attention about todays event is going to be on the reaction and the fact that he pled the fifth despite the fact that theyre trying to tell him that if he ever encroached he had the right not to answer those questions. I am sure they are thrilled. Anything that takes the spotlight off him is helpful. This a serious debate we should have. Theres such political argumentation. Anybody can get to them. Again if you dont want regulation, theres an issue. If you cant afford it go ahead and die. And some people are totally fine with that. So it will be interesting to have that argument in a public space like this. Theres one piece of maybe the rest of the industry that isnt going to be happy about. I feel like this just gets a tacked a lot. Very seldom is there a singular villain. Everybody talked about the banks did such a bad job. Very seldom do you point a finger at one executive at a bank and say that guy. We hate that guy. But here is Martin Shkreli and hes igniting people in congress in their disdain for what he did. And most people watching and thats why again its just an odd tactic. Implications for the entire industry. That would be terrible. Another question, whether or not he really is an outlier or whether he represens the Business Model aspirations of a lot of other companies. A lot Bigger Companies as well. We do have breaking news here on viacom. As we reported the last couple of hours and as expected i guess, dauman is the chairman of viacom. Replacing redstone. He is the companys chairman and over the objections of board member and vice chairman Sherry Redstone that made it very clear in her announcement that she wanted someone that she called an independent voice to become the chairman of the company. Not someone thats the trustee of mr. Red stone. And he is now chairman of the board in addition to being ceo of viacom. This does not mean that this battle that really broke out into the open yesterday is resolved. Sherry redstone who i am told with her father frequently and in his home and helping him in terms of dealing with many matters and communicating is going to continue to be on the attack in a certain extent with trying to assert her power here. Importantly its is the health of mr. Red stone himself. A number of people i have spoken to over the last 18 hours indicated the failure to communicate has been seriously undermined or by deterioration of his health so it does raise the question of his ability of continuing his role as the Controlling Shareholder of viacom and control the votes in both. And whether the trust that i just spoke about which includes mr. Dauman and Sherry Redstone, a couple of other Board Members and two other outside attorneys whether it will start to make decisions with regard to that controlling stake in both of those companies. But we do know he has taken over as chairman and ceo. Similar to another that places cbs as its chairman and ceo. How much has to do with the pressure of time. Wanting to make a decision quickly and also wanting to choose someone that has expertise within the company. The cbs decision would appear more clear but the perform in viacom itself has been struggling. On one hand you have the fact that they would want to make an announcement relatively quickly but on the other hand there should be a discussion over other people coming in to this company. A number of the people have been agitating at viacom. Disappointed by the performance of the company and its stock price which is down 21 over the last three years. That did include this move up. I think they are unhappy with this and they would like to see somebody perhaps as chairman of the company. And what appears to be a very recent decision to step down to him as chairman. To see if there was anybody out there. Mr. Dauman also if he was not appointed chairman had the right to leave the company with another 88 million and it was aside from Sherry Redstone that made it public yesterday that he opposed this position. His appointment. You talk about the trust. Thats where the control is going forward. Do you have a sense of who controls the trust . Its seven trustees. Its beneficiaries are the last right now i think Sherry Redstones grand kids, anybody born from his line will be a beneficiary. To just for a long, long time. The trustees are phillipe and david and george abrams. Sherry redstone. Norman jacobs thats sumners loyal and sumners exwifes lawyer. Those are the seven directors. Now if he stepped down or any independent director steps down they have a right to appoint their replacement but this where the battle will start to take place in terms of Sherry Redstone trying to exert more control to the extent that she can. When it comes to the broader stock market and consolidation and whether or not its up to pursue some things it otherwise couldnt have its still very much unclear. Mr. Redstone is still on the team so it may be impaired in terms of his ability to communicate. By the way, on the half in about 50 minutes or so, theyll talk to mario, the second biggest holder of class a shares. To get a sense of how its playing in hollywood, julia joins us from there. Thank you so much. I have been talking to investors and analysts this morning, one thing worth pointing out is in terms of appointing a chairman of the board there one anyone else on viacoms board that was perhaps well equipped or positioned to take on that chairman role so thats one reason he was appointed especially today in the time con trants. And jumped yesterday on hopes that there would be the announcement of a new chairman. That would indicate that there was excitement and optimism that viacom is on the path to change but when you look at wall streets reaction to viacoms leadership over the past several years theres no confidence in the current leadership. So expanding his role. Its inconsistent with viacom. Theres a lot of concerns that viacoms board is not independent and im sharing a lot of criticism about the way viacom handled the new distribution feature. Surely in the case of leaving the board not too long ago and reflecting some dysfunction. A lot of things to deal with in coming months in terms of mr. Redstones health. In terms of the trust. The trust by the way does have the right to get rid of the board. Now thats not something that anybody expects is going to happen. But they can weigh in and nai can remove the board. So whoever controls that stake, thats Something Else that has to be thought about here. This is finally starting to occur. When i say this i mean the changes that many investors have been waiting for to talk with viacom but whether or not it was actually developed in anything significant. Strategically for either one of these companies. What are they hoping for . A break up or others will swoop in and buy up some of these properties that somebody will come in and invigorate this company from a streaming perspective. Perhaps the change in leadership at the top. Chairman and ceo. But also to your point maybe a larger transaction that involves viacom in some way which seems unlikely at this point. But more likely as a result of whats happened over the last 24 hours. And unless theres some unusual provision being appointed chairman doesnt change it really. If youre going to make a change at the top he is leaving regardless. Both positions and if Sherry Redstone brings pressure to do that that will happen regardless of the position hes in. She tried to bring that pressure so far unsuccessfully. Thank you so much. Meanwhile the markets have given up some of the earlier rally but because of oil prices being in positive territory, seeing that rebound we are still in positive territory on the major averages. Dow s p 500 and nasdaq all up if only by a fraction of a success. When we come back, get the latest piece. Walt is going to join us to explain what that congressional hearing continues. Martin shkreli took the fifth and left. Take a look at gopro down about 8 after earnings last night and that conference call. More on that when we return. Shares now down about 85 in the last six months below 10. We have seen some price targets of 750. How low is too low given all the commoditization that weve seen happen to this company. Well, this is the Hardware Company selling gadgets and when the stock was trading in the 80s and 90s everybody is going to talk about it becoming a Media Company and go up, up, up. Now its another Hardware Company and sells a single gadget in a market that will comod tiez itself. Its trading at one times revenue. Thats where a company is stable and growing a little bit would trade but theyre still shrinking. So if that doesnt stop theres plenty of down side left unfortunately. A number of problems that i saw with this quarter, first theres a fundamental flaw in nicks communication. Theres always a big problem that he claims to have already solved. First it was overpriced. We dropped the price 100. Now they had to drop it another 100. Then it was too little on marketing. Based on the new big problem he found marketing doesnt seem to be the issue. Now its the software. I have a question, the head of software and services, might be a great guy. I dont know. But hes a lawyer and a former consul constant. Maybe the head of software but the person really running it needs to be closer to the top of the organization. Thats the Way Companies that do well in Software Development and Ground Breaking stuff and structure the way apple has been structured for a long time i question whether they have the right people to execute on software. The way they need to. Thats a good point and then the point is how big is this market of taking home video and jumping out of airplanes. It may not be as people thought. It may be that theyre good for most people and you dont need a specialized camera. Producing compelling video is very hard. Its not just a little software. We do it every day. I know. You have this incredibly difficult. This is the issue with periscope and all of these things. It isnt compelling. You need to know how to make compelling video. So jumping out of airplanes helps. You dont need to replace them every year. The action camera market is now fully saturated but theres a hope that some of the things the company will do in the next two squarts is releasing a drone that will get some pick up, whether its releasing this new software, cutting the lower end products. Will any of that help . It could. But how many people are going to buy an expensive drone for photography. Some people definitely but theres already a lot of competitors out there. Other cameras out there. Hardware tends to comod tiez. The company thats been able to stave that off the longest has been apple but even apple youre starting to see pressure because comparable stuff is so much cheaper now. Im going to come right out and say its not going to help. The Media Channels arent going to help. They figure out the downloading so it can compete with this. I took my kids out sledding a week ago and i took this and not the gopro because i can edit from two cameras in the phone. Shoot simultaneously with an app. I can upload directly to social media. Theyre competing this and they havent wanted to admit that up to this point. Thats the total adjustable market right there. A lot of white space right there. Thanks. Good to see you. And are apples apps in trouble in this weeks post . Whether the apple app echo system isnt living up to the premium hardware standard . And hes the cofounder of recode. The executive editor over there. Its really interesting because we talked about this before. You focus on their existing apps. Kind of getting down and not Getting Better fast enough. I criticized apple in the past. But not coming up with new software ideas at the clip they used to. Theyre arguably not doing as well. You think that their failure to keep the existing apps trim is the bigger issue . I do. I dont disagree with you at all, john. But even when they do new apps like apple news, you know, nothing to write home about. Maybe they need that two camera editing app. I dont know. But i think it a bigger problem that the things that people have come to town on on the trust and i use that word deliberately. You dont think about a trust but its apple and its just going to work. Whether its on ios or on the mac. That is eroding. I really believe its eroding because they are they are falling behind in the exiting, what i call the core apps like mail, like music, like photos and especially all the cloud stuff. It prevents aggravation so thats not apple quality. So i have a thesis about this moment in technology that were actually overgadgeted. Too Many Companies are focused oncoming out with stuff instead of figuring out how to help us make it better. We were in a similar position about 15 years ago when broadband was first taking off. Every pc had to have a webcam and a writing tablet and all of these things and then apple came out with itunes that hepd us manage it all. Is that part of whats going on here . Apple is too busy figuring out a smaller watch and not enough time figuring out better software. Well, they deny it, you know, i have good sources there and they deny it but i did say theyre taking their eye off the ball here on the Software Experience and i will repeat it, i think you cant repeat it too often, its not as flashy as the hardware and the beauty of whatever it is theyre going to bring out next but its the way, you know, its what we live with all day and we dont even think about it and thats a triumph for them. That we dont have to think about it. Now people are having to think about it. Do i really trust this . Wheres this email . Why is this not thinking properly. In my case, one of my ipads keeps telling me it hasnt been able to baung to icloud for five weeks. Do you ever think about your apple stuff backing up to icloud . It just doesnt. But, you know, you cant be sure anymore. So i think they have taken their eye off the ball on that. Those examples, i think anyone with recognize that happening in their own lives. My question, after the high profile misses, right, maps early on which obviously you say got better overtime. Even from a roll out has it gotten gun shy in anyway . You know, i dont i wish i could tell you whats going on inside the black box there. I have some ideas but i cant talk about it. Only because im not so sure and whatever. But i dont have good clarity and good visibility of whats going on inside the black box and but whatever it is, its not working optimally. And this is separate from the things you spend time talking about in recent days. I growth and phone sales and henry eluded to this a little earlier. Thats all important steps but i i think this is more important for them to continue to hold on to that special sauce. Yeah. Well, walt, thanks for your inside. A big job continuing to be cut out for him running apple engineering over there. Thanks so much for joining us. Right. Take care. Meanwhile, Bernie Sanders and Hillary Clinton taking the debate stage on msnbc tonight just days away from the primary in New Hampshire. John is live with more on what we should expect. Hey, john. Hey there, you know, we have a scramble of candidates in both parties running around New Hampshire in advance of the february 9th primary. I just finished attending a jeb bush town hall here at this Manufacturing Company that makes uniforms for firefighters across the country. One of the leading manufacturers and if you look at the polls in New Hampshire you can see what