This about their production schedule . Well, you know, i think, carl, that everybody out here cheers for tesla. I think that the notion Silicon Valley could revolutionize the Automobile Industry is something that i think people out here take great pride in, and i think everybody cheers for them. I think the challenge really comes next year, because next year is the year that the old guard, which is to say General Motors and other major manufacturers really come into the electric car market in size, and i think they are going to come way down market from tesla and thats going to change a lot of things, and im not quite sure whether tesla is ready to handle dozens of competitors with products at much lower price ints, but its going to be fun to watch, because in my experience at least, tesla has built one of the finest brands i have ever seen, and i think the story that you mention with the fatality really proves that point, that, you know, the customers want to believe in this brand, and thats a really unusual thing. Roger, one thing thats got me raising an eyebrow over the last couple days is this report about teslas targets being kind of aggressive and perhaps some employees offering discounts where they werent supposed to, elon musk putting out a memo we dont want that. Heres my concern about that, he set some delivery targets that seem impossible, and these tesla cars with their autopilot and some of the other technologies can have life or death implications. Couldnt we have, potentially if things dont go right here, a combination of wells fargo if he doesnt get realistic about what the targets are, what he can expect from employees, and manage that really closely . So, carl, i think youre pointing to one of the core sort of founder issues that we have in the culture, not just in Silicon Valley, but really in american industry, this notion that we have a handful of titans who by force of will can bring miracles to reality. And, you know, i think elon musk has a well deserved reputation for innovation, but also a reputation for being extremely hard on the people who work with them, and, you know, one hopes that there are no calamities that result from this, but i do think they are a sub Scale Company in an industry where scale matters a lot, and i think its going to be a big challenge Going Forward for them if the expectations internally dont map to what their capabilities are and so i think youve picked the right issue. My fingers are crossed. I really hope they are going to come through this okay, because i love the notion of what tesla is. And i want them to be successful, but i do think its going to be a tough year for the shareholders and potentially a tough year for the company, because of the issues youre talking about, more importantly, the competition that makes those issues more relevant to the stock. Either way, it is, of course, as you point out an impressive quarter for tesla, but can this one quarter alleviate the laundry list of challenges that tesla is facing when it comes to production, capacity, cash flow, and its acquisition of solar city . For at least 90 days, right . Then we have another quarter and they have to do it again. They are suggesting it would be about the same kind of thing next quarter. If it is, thats actually a tremendous accomplishment, but again youre going to have people coming in next year whose expectations are going to be ten times the unit volume tesla has been doing at much lower price points, and i think thats going to change the way wall street looks at the electric car market. To me, electric cars are one of the great triumph of this period that were living in right now and its about to get real. And tesla can take credit for all that, but like apple in the early 80s, they are at risk of being outflanked by people who are prepared to operate at a larger scale. Interesting. Makes you wonder what were going to be telling our kids in ten or 15 years about how cars used to be. Moving on to google, hosting hardware event tomorrow where it expects to launch branded phones bearing its logo. Htc rumored to be the hardware maker. Separately, the e. U. Orders alphabet to stop the android practice, accordg to reuters. Back in april, said the android case was a high priority. Take a listen. The thing that has concerned us is that in some markets android has become very, very big, and we have had people coming to us with concerns saying there is a risk of timing, that you can only have the operating system if you also have a full suite of google apps, and, therefore, it becomes a oneway street. That we are investigating and, of course, making it a high priority, because these are fast moving markets. I wonder, roger, most google and apple have had lingering e. U. Regulatory shadow over them. Hows that weigh on them in Silicon Valley . I think this is really hard, because they are being accused of being good businesspeople, right . This is a philosophical no, im serious. No, roger, they are not. They are not. They are being accused of giving their own products unfair priority in the Search Engine where they have monopoly power. Thats not come on. Im sort of sitting there going, as a share holder, what is your problem with that . Obviously, they have been well, im not a share holder. Bundling all these things together is something they perceive as being in customer interest and customers get to make a choice to buy their phone, not buy their phone. I think whats really difficult about this is globalization for years was based on trusting people to do a great job across markets, and the assumption that unleashing the whole world as a market would produce adequate competition. Weve now reached a point where at least in the tech markets there have been a lot of winner take all situations, so people are having buyers remorse, and i think in europe there is a philosophical conflict and American Companies are going to have a challenge because we are not in this country we do not share that same level of concern about monopolization, and i dont think theres a great defense. Ive got some sympathy here, roger, isnt the danger that once you get huge in one area you can expand that dominance into other areas and dont have to be that good . You dont have to be the best at local. You can stomp out yelp using your Search Engine. No, no hang on, i totally agree with you, carl. This is john. You dont have to be carl would never speak to you this way, roger. John, of course, carl would never do that. But thats the argument, isnt it, they are mediocre in certain areas, but they can still win and stomp out the best, because the best dont have the strength that google does. So, john, i think youre completely correct. The point im trying to make here is, in the united states, we have tolerated that kind of behavior. In europe they are no longer tolerating that kind of behavior, and that conflict, i dont think, can be resolved by google or by apple successfully. I think its a place where they are going to have a real problem and its going to be an issue for the stocks. And the question is, is europe going to come down hard on these things, and so far the answer seems to be yes, and i just dont see a way around it, because that is the way these companies do business, and the truth is, theyve gotten to a scale where some of the products they make are mediocre. At the end of the day, roger, do you think the regulatory headwinds, these fines from the eu will be enough to rethink the European Growth strategy . Well, i think they are going to be forced to over time. In the short run, no, because the reality is, the ecosystems in each of these companies is still very successful and they dont need to have all this bundling t remain successful. I think much as we saw in the 80s with microsoft, this is going to be a drag on them, make life more difficult, but i think they are better positioned for it than microsoft was in the 80s, so i dont expect the earnings to be hurt as much here, but it is going to mess up their strategy. These guys obviously want to bundle and take shortcuts and want to, with all due respect, they want to ship products that arent the best of breed and leverage the things they already have. That is their business strategy. I tell you, carl, if they want to buy twitter, this is a big reason why that could be difficult, right, if the eu is putting pressure on them. Imagine the breakup youd need as twitter. Way back when we were playing the twitter acquisition game, somebody said that the eu would remain not a disqualifier, but if you were putting them on the list, pushing them down toward the bottom as opposed to the top. One more thing here, roger, facebook is launching a craigslist and ebay competitor, the new product is called marketplace, lets you buy and sell items with nearby users. The social network is piloting in the u. S. , uk, australia, new zealand. Up to 450 Million People already use facebook to buy and sell used goods every month, ebay is under pressure on that. How committed do you think facebook is to Something Like this . So i think it starts out as an experiment. If theres any traction at all, they are going to get very committed very, very quickly, because to some exte, you know, it doesnt matter whether they make any transaction fees, they are initially not charging any. What they want to do is get more of the attention of all of their members, and i think this is likely to work really well. Notice, carl, that in this case they are doing it on a mobileonly product to start. That is actually a pretty significant departure for facebook, continuing a trend of finally getting mobile apps, slow to get on it in the first place. The feature im looking for is whether you can do the transactions without making eye contact, without talking to another human being, can you actually meet facetoface and do a transaction entirely on the web with two people staring at their phones, thats the real test for facebook Going Forward, but i think initially its just an experiment. I expect it to work, and i expect to actually be a big deal and youll see them going to transaction process and things like that. The danger, isnt it, whenever youre dealing with real people using their real names, real locations, and actual money, you know, weve seen this on craigslist and other places, there are going to be criminals that seek to take advantage of that and you hope facebook has that in mind, because the stakes are higher in a way. Craigslist your identity isnt as much at stake. People dont know who you are and your friends, but theres the possibility of that at least in a facebook transaction platform. John, dont you believe that facebooks argument, which is to say that in facebook, identity is real and not phoney, does, in fact, provide some form of protection against that . I think it raises the stakes, roger. Im not sure if it provides protection if somebody, you know, is bent on doing something criminal. But they actually know who you are, they potentially know where you are, and they know that youve got money, so even if that person isnt the actual person that shows up, if they tip off somebody else who shows up and robs you, its still pretty darn dangerous. John, i think were close enough to digital exchange, which is to say, you know, things like apple pay, Payment Systems that dont require you to use cash, i think were close enough to that, that one could easily imagine that kind of Payment System being enabled and empowered by what facebook is doing here. The way that paypal, you know, grew on the back of ebay, i think youre going to see somebody provide a cashless transaction system to support this, because if 450 Million People are actually going to go into this marketplace more or less right away, thats an even bigger Business Opportunity than ripping people off. A note out this morning saying you could use oculus to help people do discovery on products, a whole bunch of fly wheels in there. For sure you dont have to look at anybody when you do that. Heaven, right . Roger, always good stuff. I like the back and forth with john, too, that was good. See you next time. All right, lets check in on markets as the Fourth Quarter kicks off. Markets are looking for some direction here. The s p is off by 8 points, dow jones down about 76 and the nasdaq lower by around. 2 of a percent, but a lot of focus on tech and consumer tech. Take a look at netflix shares having their best day in nearly two months, higher by around 4 or 5 . Shares of wynn resorts up today on positive numbers from mckou gambling revenue and also chinese manufacturing data that helped shares in asia close higher. When we come back, the latest gopro cameras on sale over the weekend, bnick woodman joins us next. He made his fortune as a 21yearold hungarian immigrant, now the founder of Interactive Brokers is backing donald trump. Were going to find out why and what he thinks about the tax turmoil. Later, best ipo debut of the year, nutanix on a stellar opening day. Does that mean opportunity for others in the pipeline . All that and more coming up on squawk alley. Gopro releasing the latest cameras this week, most powerful and easy to use ever, featuring a waterproof exterior, voice controls, and extended battery life. Nick woodman joins us live from San Francisco in a first on cnbc interview to talk about that and the company. Nick, good morning. Good morning. Thanks for having me. Nick, in a way im more excited about the potential behind the cloud tieins you have with this product and the effort to manage video on the back end, make it easier to get that edited and then in a shareable form. Is this the product on the back end that youve been talking about for years now, saying youre going to make it easier for people to actually work with that gopro footage . It is, john, gopro plus and the hero 5 lineup finally make it easy for our customers to go out and capture their life, and when they come and plug their hero5 in to charge, it can automatically offload their photos and videos to the cloud, making it easier to access the footage later using their phone and doing a quick edit, share that experience, and quickly move on with their life and get out and have more fun, so weve finally made it easy. How long do we have to wait before we know what i imagine is a fly wheel effect youre working for is working, which is how long before were seeing the products of these cameras out there, people are saying, wow, how did you do that, i need to get a new gopro, as well. Is that one quarter, two, are we looking at, say, february, after the Holiday Season . I think its going to be exciting Fourth Quarter for gopro and for all of our fans and investors as we see our customers adopt gopro as a new easy story telling solution. I think the proof will be quite evident in the fabulous stories that we see people share, and i think after christmas we can expect a very nice postholiday uptick in the amount of stories being shared as everybody opens their gopros and shares their experiences now with this easy solution. Nick, if we look at the market overseas, theres been a lot of focus on dgi, the chinese fast growing camera drone player, does it make sense for gopro to partner or work with dgi in order to expand gopros footprint outside the u. S. . I think that we have a very strong vision for our future in drones and, frankly, beyond drones. Aerial perspectives are just one part of great story telling, and one of the things were doing at gopro is creating an end to end story telling solution that starts with the camera and then includes fabulous accessories like karma, but, you know, karma is much more than a drone. You can remove the stabilizer from the drone and plug it into the hand grip that comes with karma, and we find that we actually use the hand grip even more than the drone, because you can use the hand grip anywhere and there are some restrictions where you can use drones, and everything folds into that one backpack and is there easy to take with you during any activity. We think karma is going to weave itself into peoples lifestyles really conveniently and were not done yet. Theres a lot more innovation coming from gopro. Tell us, how do you look at the drone market and the pricing structure . Right now were starting to get drones around 1,000 like yours and cheaper. Im quoting that 1,000 figure, if you also have to buy the camera separately, but is there going to be a strong profitable market at 500 and below, and whats the model going to be . Is there kind of a Maintenance Program that you expect . Because people are going to crash these things no matter how good the intelligence is in them. How do you make money long term . Well, the drone market is in its infancy, so youre still seeing a lot of tip of the spear products out there at high prices, we think too high. Karma is priced at 799. If you already own a gopro. And if you dont own a gopro, you can get karma for 999 or 1,099, depending which hero5 you bundle it with. Youre right, drones will continue to be less expensive as Technology Improves and its important that gopro make this incredible experience accessible to consumers, and that means keeping prices accessible and making this a solution anybody can use. You probably arent going to play at the lower price point when drones do hit that point youre saying . Well, i cant share too much about our road map, but gopro is a story telling Solutions Company and if we cant make our products accessible to you, the consumer, so were focused on making gopro very accessible and i think that as people begin to capture and share experiences the way they can now with gopro, i think that story telling is going to become more habitual and share itself in this new way, so were really excited about it. Exciting times indeed. Well see what kind of a Holiday Season it is for drones. Nick woodman, founder and ceo of gopro, thank you. When we come back, keeping an eye on Deutsche Bank shares as new reports surface as a possible settlement with doj. How thats impacting the overall european markets when squawk alley comes right back. Welcome back. We are coming down to the close of the uk and across europe coming off a 4 gain in the third quarter. European stocks are mixed to start