And this thursday morning, it is kayla tausche, and jon fortt, and joining us is hep ri blodget. Tech is up 0. 75, and the nasdaq is still down 2 , and not that far off, henry, from nasdaq 5,000. Is this what is going on with the buy in may and go away. Well, we who own the indexes are happy about this. And looking at apple, we went through the period of where all of the bad news was priced in and now looking forward to the iphone launch in september, and lot of excitement about that, and probably not revolutionary or anything, but in the buildup of that, people are excited, and so i am not surprised to see the stock move. But it is about enterprise, and the ipos working and the consumer hanging in there, jon . Well, it is about the winners pulling away. I think that there is a lot of fear in february that the whole story about cloud, and the whole story about everything, and even smartphone, it was falling apart, but adobe touched the alltime highs today, and that is for me in tech is a poster child for the transition from Package Software to software as a service. They have todone that absolutel very well. And blazed a trail for the service, and pure play, and that stock is doing well, and you can see a number of names like that, and rebounds in other names that have not been doing as well, and hp, inc. Is up 5, 6 this morning and that is in a different category. And the other thing going on is the valuations were fine and got to reasonable. Apple 11 times earnings and you can defend that as the upside to that if you have a good longterm outlook, and that is part of it, and the bubble talk was in the private market where companies were getting the massive private valuation, and the Public Market valuations are more reasonable. But what is taking a bite out of the stocks is earnings, and what killed the story around cloud and enterprise earlier in the year is earnings, and getting the Fourth Quarter earnings for the company, and we have two more quarters to report. Nobody is declaring victory on the year yet. And the gdp trackers it is going to be looking better than q1 . Yes, we hope so for the sake of the e kconomy if not for the market. And it is guidance that hit the markets and not the earnings themselves, and maybe some sandbagging, and over reaction on the part of the investors and if you are saying that the next quarter is not going to be great, but it is terribleer and maybe in fact, it is not terrible. And interesting in the period of memorial day to labor day, the s p has alternated gains for the last ten years, and positive negative positive, and since the crisis we dont know what the summer brings certainly within the election year, it is will be crazy as goldman has suggested. Apple shares are rebounding. Down the i da, but finishing higher for the last four sessions with the stock up close to 6 in may, but down 5 so far for the year, and then the repo report saying that eddie q. Of apple raised the idea of buying time warner, and apple did not enter serious negotiations, but the Company Still wants to spend several million a year on the original content. Netflix and time warner are rising on that report, and how seriously do we take the pieces, henry . Well, apple is trying the figure tout content business and they want to offer an al te alternative to television. Lots of companies are trying to figure it out, and verizon is going in the same direction and everybody is wanting to figure tot new cable model on all screens, and does time warner make sense for them . I would say absolutely not, in part, because if you are going to be buying time warner not just the content library, but they monetized themselves in the old world by selling to cable and movie, and you have to keep doing that, and you can get a easier deal, and much smarter to fund their own content or by netflix which is much more generous. And it is a 16 billion company, and they want to spend several million on original content, and there is a lot of room between a few hundred million and a 60 billion company . Yes, there is. And we could start a people of fun things that eddie q has thought of buying. When you that much money, and in negotiations with anybody, you could say, or we could buy you, ha, ha, ha, and sip of wine. That is not necessarily meaning that they could do it, and apple in the past has looked at not want ing ing to be bogged dhoun the relationships that it cant control. Whether those are regulatory or why they havent gone into the medical devices, and limited what the apple watch can do and they dont want to jump through the regulatory hurdles to bring something to the consumers, and that is involved in media, too, and they have a great relationship with disney and good for them, but if they buy time warner, bob iger has to get off of the board and that is going to go south, and might remove some of the string pulling. And we talked about the string pulling yesterday, and you said it is a big ball of string at apple headquarters, and do you find that the timing of cooks comment in india or wherever that comment was made and this report, do you think it is coincidence . I dont think it is a coincidence and i think that apple has gotten themselves into a corner here, and they have goep as far as they can with the current strategy. They have to buy Something Big in the arena and bust it up as they have traditionally or do a leap and do over the top cable evenb though they would have to do it at a higher price than they want to do, because the people who own the content are not going to give it for cheap the way they did with music. And people tend to overcomplicate the apple story, and dive into the stories, but the story is that it is the most profitable product in the history of the world. When they e introduced it the market did not exist, and now, five to seven years later, the market is mature and it is going to go through the same hardware pricing model that all hardware goes through and relentless pressure over prices over time, and you say, yeah, but apple has the ecosystem, and it is good and true, but if they want lever the ecosystem they need the prices to come down and drive the volume, but the idea that one gadget maker is going to be selling 700 and everybody else at 100 forever, not going to happen. There is a question of whether the next leg of apple strategy including m a in a big way. And cook said on the Conference Call they will be looking at bigger acquisitions and the they have in the past and i have spoken to a major investment ba banker who said look for the m a to rev up. It could be transformative and to jons point, we could buy you, you 60 billion company, and that is a tenth of the market cap, and they have a boatload of cap, and they could swallow time warner easily if they wanted to make a huge bet like that, but it would not be a smart bet. So they will do a transformative acquisition like that, it should be something else. Gives us something to talk about. Along with the snapchat valuation that we started to talk about earlier in the week, kayla. Yes, there was a tech crunch of the additional round of fundraising that snapchat did, but we got a filing about the series fround so there is no additional fundraising, but it is going around since last year, and in total 1. 8 billion in pure stock that the company has been raising from investors, and some them existing in investors and the valuation on the round is 18 billion. So it is a slight increase from the last round which is 16 billion. As far as the series f goes, they raised 650 million last year, and the rest of it 1. 15 came in this year, and the interesting part of this round is no protection for the investors, and all of it came around from the existing inv investors, and henry, we have been talking about the down rounds, and the companies marking the valuations down, and what does it say for snapchat, and no ipo ratchet at all in this. And very important if there is no downside protection, and if this is not preferred stock, that is something that is fundamentally different. It is not. Than most of the valuations, where they are not as risky as they seem, because you have downside protection, so snapchat has the opportunity to build yet another facebook effectively. This is a company that is building a network and took hold with the young teenagers, and they have a new model to build the platform that people are addicted to, and they are jumping into the video and the different forms. You mean by that 1. 4 billion users . Maybe not in terms of the size, but everybody is looking at twitter could be the next facebook, but twitter seemed like a niche market, and snapchat is a segment of the population loves and uses and loves remarkably, and they are aggressive on the development, and it is a media property, and aggres ive with the publishers and talking to them and cutting nice deals with them, and so this is a company that has the potential to be large. Here is what is not clear to me about snapchat and i have a horrible track record with them, and so when i say it is not clear to me, it does not mean it is not clear to somebody else, but the big value of facebook is the social graph, and knowing the relationships of people, and mobile era of foeing where you are not only physically in the real world, but where you are going online and able to triangulate all of it, and deliver an advertising experience that is thus more targeted in the era that is more important. I am not clear on what snapchat has that is going if be raising it to the level of value besides a large audience. It knows where you are. And it does take into account. Well, it could if you want to. And it is starting to move towards a feed basically, and it is visual. One of the problems with twitter is that it is words. This is visual, and it is video, and the addictive quality of it to the people who use it is not to be believed. And to the early years of facebook, and remember around the ipo and people thought it was dead, they have the ads on the side, and my goodness, the most hyper ever. And snapchat is just starting on that revenue model. And there is some question if facebook would see the 18 billion model, and want to make another run at them. Well, like mark zuckerberg, seeingle is not tempted by the wealth. He was offered amazing wealth, and he said, no, goodbye. Sometimes it is hard to persuade those guys to sell. Henry has a good laugh. Meanwhile, we will see you in the mixed action here in the market now, and the dow is lower and the s p is lower and the dow which had been in positive territory earlier is below, and oil did break 50 a barrel for the First Time Since october, and energy earlier on in the day was leading the utilities and the telecoms have taken the reins. We have six ipos in the market, and so it is a busy one for the equities and we are slightly into the negative territory in this hour. And hp, inc. Is giving weaker than expected guidance for the Current Quarter and cut the high end of the full year stock, but still up 5 . And costco is in the green sh, the profit is beating the expectation, and the same store sales were flat for the first time in six years, and that stock sup 5 and change as well. And when we come back, fitbit is under fire for lawsuits and studying saying it is not as accurate as claimed. We will will check out the wearables. And we will look at the ceo of pure storage joining us live with the dow down 35, and near the session lows. We will be back in a moment. And now much of that same advanced technology is found in the new audi a4. With one notable difference. The allnew audi a4, with available traffic jam assist. Off of the highs for the year as the music streaming market is brutal and almost exactly two months ago pandora decided to bring back the cofounder to lead the company into battle and sending the shares higher since the then, and how does pandora plan to beat back apple, spotify, google, amazon and, and, and. And here to join us is the companys cofounder and ceo tim we westerman, and tim, thanks for being here. And great to have you. So recent financial findings are suggesting that spotifys costs to get the music are rising faster than revenues are rising. So what is the business here in the streaming game at this point . Is it notal issing the music, itself . Is it selling advertising or the o onestop shop for music lovers and merchandising, concerts, et cetera . Well, there is a saying inside of pandora that you have not built a great product until you build a great business. A and so in the arena, we are a unicorn in that we have a business that is profitable. We made an agreement to go more expansive, and if we had not made the move, it would have generated 60 million or so in profit, and so it is going to set us up in the industry to be more healthful, and so we have been doing it for ten years. And is there going to be one app to rule them all . We have had others on before you bought them, and in the download arena versus the radio arena that you have been in, and are we getting the whole experience to where you can hear something on pan dor rashgs and tag it, download it, and save ut for later or maybe even own it, and all of it together in one experience, and is that where it should go . Yes, you are laying out the product road map there, and that is the ambition. We are starting with the foundation of 100 million listeners every month on pandora and the ep gaugement is growing more and more and we know a ton about them, and making money on the business, and we say, okay, lets expand, and hence the expansion of reo, and the ticket fly, and so start to flow the ticket discovery and purchase some of the platform, and the idea is that if you want to do music, you can do it all on pandora, whatever it is. That is one side of the marketplace, and the other side is the artists. So we are working on the tools and the relationships frankly so it is kind of the crm platform for artists, too, and you wake up in the morning if you are a musician on pandora and the person says, what can i do on pandora today . That is what we are looking to build. How can you change the perception of the consumer for a long time thought that pandora is a radio and the music genome product and produce something that i have not heard of before . Well, that is the challenge of the Product Design which we are good at. What you will see with the product is not a me, too, subscription service, but it is based on what we foe about you and which we know a lot about you, and we can bring you into the interactive space in a low effort way, and it is going to be differentiated. Is marrying the two worlds mostly an engineering challenge, marketing challenge, is it a royalty challenge a what are the economics behind it . Bundled into one, and starts with the music experience, and part of what has made man dor ra so successful is that it is drop dead easy to do. And we can nail the easy experience for you. And we will broaden the product, and we are well down the path, and it is promising a, and the business has to come along, and set up the deals to make sense, and we are in a position to do that to strike deals that are good for us and the industry. But music is like the lost industry, and like the milk at the convenient store, and how much do you to change the culture around recorded music to be successful . The fact that you are profitable in the core business is a good thing, but of course sh, the investors they want more and big growth and huge opportunity over time. That is the great promise of p pandora, and so i am a musician where i spent my youth playing in the bands and part of the world and i understand the industry and been there, and we bring the sensibility to the business and the products, and so we are in a business to align with the Music Industry to solve their problems ark and we have a gigantic user base, and 10 of all radio listen ing ing in the, and huge service, and still growing, and this is an audience to market to and educate about the products and the Interactive Services in a way that i dont believe anybody else can. How long do you give yourselves to deliver on the road map, because you have an activist in the stock who wants you the sell yourselves . Well, i started eight weeks ago. Welcome. It is good to be back in the seat, and im very excited, and look, we have laid out and you founded the company, so is you are not an outsider. No, i know the business like the back of my hand, and not just our business, but the world we live in like the back of my hand, and part of what i am excited about is that we have identified a cogent strategy for the coming years, and building what is like a generational marketplace for music, and with have great team, and fantastic team who knows what they are doing, and so my job is to tell people about it. I am going to be externally engaged with the ceo with the music, and wall street and advertising industry, and so you are going to be well represented and narrow the narrative gap here. And isnt it hard to go to the musicians and the songwriters and say, i get it, and i understand why you are complaining of the new paradigm, and hit the operating targets that you have given the street . Well, we can do both. That is the magic of pandora, we can build a business that is succe successful and driving the value for the musician, and we have tried it already, and so there are a host of products that thousands of musicians are availing themselves of, and to be able to log in and communicate with the fans, and drive real value, and sell tickets and fans, and drive fan engagement, and the results from that are quite extraordinary actu actually. And tim westerman, i and i love the underdog. You guys, i cant wait to see what you come up, and i am a user of pandora as we talked about. Thumbs up. Up next, putting the fitness tracker s trackers to the test. Are the devices really providing accurate results, and we will find out in a moment. So when i found out medicare doesnt pay all my medical expenses, i looked at my options. Then i got a Medicare Supplement insurance plan. [ male announcer ] if youre eligible for medicare, you may know it only covers about 80 of your part b medical expenses. 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