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Transcripts For CNBC Squawk Alley 20161027 : vimarsana.com
Transcripts For CNBC Squawk Alley 20161027 : vimarsana.com
CNBC Squawk Alley October 27, 2016
The banks and the tenyear breaking out but we start with twit they are morning, moving higher, posting its ninth straight quarter of slowing sales growth and announcing it will cut 9 of its workforce, about 350 people. Top of the
Bottom Line Results
did come in bovis mates and the service adds 4 million monthly active users. Jack dorsey on the
Conference Call
earlier this morning. Were focused on building the most useful, open, and co comprehensive news network on the planet. This is the fastest way to see whats happening. Our product is already revolutionary and were focused on improving it every sing dale. Weve been making hundreds of small changes as quickly as we can that will continue to compound in more usage. How do we divide the conversation between evolutionary, revolutionary in terms of the core business and the m a, which he just refused to answer . Jack dorsey said extremely important. That is the first time ive heard twitter recognize what it is, which is a news and live events network. Incredibly strong in that. Look at all of us. Were all addicted to twitter. It is a much smaller niche of people than twitter originally thought it was going after. They said were going to be another facebook, this huge mass market colossal thing when in fact they are a news and live events network, but theyre already good at that, and with small evolutionary tweaks, not revolutionary, they can be great at it. That is worth a fair bit of money. I think the sentiment has gotten too negative. Do they want to be valued like a news network . Im not saying
News Networks
are a bad business but theyre not often seen as a
Growth Business
technologywise. The words you choose, i think, are important. If theyre going to call themselves a news network, if theyre saying thats a category that theyre disrupting, dont they have to do something really revolutionary and grow . I think they already have done something revolutionary. The big opportunity for them to grow is video. Theyve just started to roll it out. I will suggest to you that in a year or two twitter will be an incredibly important
Distribution Platform
for cnbc. And they will be able to monetize it very effectively. So, again, the value ligs, its not cheap by any means here. Were talking about a 13 billion valuation, a company with no content costs, just a distributor. If they can right size their cost structure, which they have a lot of work to do still and 9 probably will not get them there, you can see earnings, 500 million, a billion dollars in a few years, okay, then the valuation is reasonable. Weve seen
Companies Like
jpmorgan last quarter releasing their earnings on twiter,
Business Wire
utilizing twitter more. If it is a news network and a
Distribution Platform
, how much of the innards of the product need to be completely retooled . If theyre not trying to go after main street and your mom and your brother. This is the point. Very little. What they need to do is a couple things. They need to get rid of the troll problem. It is still unpleasant to use for a lot of the big contributors. Jim cramer talks a lot about this. This is a relatively easy fix, i think. The ore thing they need to do, they need to make it easier for people who arent really technically savvy and they need to make them think, hey, i need to find out whats happening in the world, i just open twitter and its super easy. Thats not hard either. All they need to do is get folks in the
Product Organization
who think like normal people instead of
Silicon Valley
genius engineer who is often think in a different way. Fascinating, the evolution of this story. Far 10yearold company, you forget how long theyve been around. They still own something that nobody else owns. You try to switch, say im going to go to linkedin for my news or facebook, you get a little of it but its not the live news that twitter is. Twitter needs to accept that, double down on it, and make it great. Is that a problem, though, if it disappeared tomorrow, somebody would recreate it instantly . Would it be that easy . No. It would take some time. Youd have some of the bigger players vying for it but right now theyre fending everybody off. If they became a pay service, how much would you pay to have it at your fingerprints for a year . I think its highly unlikely that would happen. Just theoretically, hypothetically. How much would i pay . I dont know. I would see what else is out there. But i dont see that. People dont pay for news. News is everywhere now, general news. Maybe niche news people will pay for, its important to their profession or something they cant get anywhere else, twitter doesnt need to pay this is a company thats already about a 3 billion run rate with no costs. You can make a business out of that. You just have to right size everything and embrace what you are. Another earnings winner this morning is tesla, a surprise profit, 22 million, thanks to record sales of the s and the x. Its the second ever quarterly profit in the companys history as a public concern and they promise to raise annual production to half a million in 2018 from about 50,000 last year. Musk on the
Conference Call
last night. A
Bigger Picture
that were designing the program to be a cash generator. The stronger our cash position. So this is another curious one today. 3 billion in cash. Trimming their cap ex, saying they dont necessarily need to raise money anytime soon. Trimming their cap exfor a quarter. Yes. Using some nice credit to, quote, throw a pie in the face of skeptics, which is great. Elon mus sk a marvelous salesman, incredible entrepreneur, all power to him, but theyre pretty much obviously going to need cash again. Basically, the scenario i described is
Everything Grows
perfectly we might not need cash but we want to raise it because otherwise well be inches of going bankrupt, not a place you want to be. So of course theyre going to raise cash. And im sorry, solar city . It still doesnt make any sense. It is hard to build a global car company. Why are you saddling yourself with a company that puts solar panels on peoples roofs . The solar city vote takes place on november 18th so they had to put up a profit this quarter on selling investors voting into it, but does elon musk need to send more emails to rally the troops . Remember september 2nd he sent that email saying were on the razors edge of profitability. Wouldnt it be great to see the headline not saying tesla loses money again . Lets do this for our investors. He has the power to do that. Absolutely, and thats good. But to ramp up to the kind of production theyre talking about in terms of cars per year, just huge
Capital Investments
have to be made. And that has been part of this story from the beginning is that each time we think weve got on the a place where, okay, theyre fully funded, its billion ls of dollars more have to go into the company. It doesnt mean its worthless, it wont work, but it does mean likely a lot more capital goes into it and a lot more distraction. Focus works. And they are about to defocus in a major way. Going to add to his plate. Qualcomm buying nxp. The biggest chip deal in history. Nx spshgs the numberone maker of chips for cars in the world. Take a listen. If you look at the larger context of whats happening in the industry, the car and the internet of things, the technology roadmap and amount of technology and technological hang chaipg will occur in both industries reminds me of what the smartphone looked like before there was a smartphone. Everybody was trying to figure out how do you assemble all the assets to be successful in that huge transition. That imsaim thing will happen in automotive and were happy to have the big pieces to be able to drive it. Coming on the heels of a major apple unveiling later today delaying the release of its air pod headphones. Samsung rho reporting the lowest operating net in two years. Nxp, qualcomm, a big deal. Three times the size of intels altera deal. Im going to kind of put my bet down and say this has the potential to be the most
Important Technology
deal of the decade. And the reason why i say that, its similar to oracle peoplesoft back in the 2000s where
Larry Allison
made this bet on consolidation and
Enterprise Software
and named it a hostile bid. This isnt hostile. This is qualcomm, won in the smartphone chip architecturarch trying to extend that into the internet of things, specifically into cars. Intel tried this with the pc into the phone and failed. Qualcomm beat them there. This is qualcomm trying to beat all other comers into this internet of thing, opportunity, into kind of this network planet. If this deal works, it positions qualcomm to extend its dominance the way the likes of google and amazon had from original web kind of into the cloud era. The chip folks have had trouble doing that in the past, but it has that potential. So this is one to watch to see where the entire industry is going. Agreed. I think very rare to have a tech ceo possibly understate an opportunity, but suggesting that chips in things could be bigger than smartphones, highly likely it is way bigger than smartphones in terms of chips in everything. Zillions of chips in a car and all around your house and so forth. There is a massive opportunity there. Any
Regulatory Risk
. The stocks trading about 10 below the deal price. Jon . One of the questions i was asking steve and george, cfo, you see what oracle is going through trying to get net sweep. Whats the complication here . The fact that the nxp is trading below the offer, i dont know if that indicating anything regulatory. Theyre getting to use overseas cash here. I dont see it as being, you know, overly difficult, but qualcomm has had a lot of trouble regulatorywise in various jurisdictions, asia, specifically, all kinds of issues that different jurisdictions could raise. Maybe that has something to do with it. I really dont know. I saw a list of the top 20
Media Telecom
deals of all time. Six were canceled after subsequent to being announced. Were in an era where now skepticism around at t. Same thing. Huge. This is another vertical integration play, but its the kind that people dont feel like they understand, so maybe those are easier to get through. If youre not paying a cable bill or a wireless bill to that company, youre like, qualcomm, nxp, sure, go for it. Henry blodget, great to see you. . Thank you. We are going to check in on the markets. The dow has gone positive, ibm and dupont helping to cancel out negative weighting from boeing this morning. S p still negative as is the nasdaq, eyeing their
Third Straight
decline for those two industries. Well keep an eye on that. Shares of groupon under pressure, posting a quarterly loss of 38 million or about 7 cents a share, but thats not the biggest news. Its buying onetime rival living social, which was once worth 6 billion buhbying it for an amount it doesnt eve havent to disclose. Watching financials, barclays and
Deutsche Bank
beating analyst estimates and bark clays rising sharply. Deutsche banks ceo promising to speed up restructuring efforts but it is still bracing for that multibilliondollar fine from u. S. Officials. It added about 550 million to reserves saving up for that. When we come back, at ts bid to buy time warner facing that uphill battle on capitol hill. Senator richard blouumenthal isn the antitrust committee. Hell join us. And we caught up with ken burns. Well hear his take on everything from steve jobs to donald trump. And more of sara eisens exclusive with david taylor. Dow almost perfectly flat. Squawk alley continues in a moment. Vo sitting at a desk all day can cause neck and back pain, high blood pressure, it even slows your ability to burn calories and lose weight. Man 1 fortunately, theres a solution; inmovement, the affordable standing desk. Woman 1 an inmovement standing desk lets you move effortlessly between standing and sitting throughout your day. Woman 2 inmovement standing desks come fully assembled and fit right on top of your existing desk. Man 1 inmovement standing desks are heightadjustable. Woman 2 and, unlike many standing desks, inmovement desks come in a variety of colors. Woman 1 and once you experience the energy boost you get from standing more, you wont go back to just sitting. Woman 2 people using standing desks report less back and neck pain. Man 1 . Lower blood pressure, more energy, higher productivity and better concentration. Vo and for a limited time, get
Free Shipping
on inmovement. Com every inmovement desk comes with a 30day moneyback guarantee, so you can try it riskfree call or visit inmovement. Com and use promo code freeship. Also
Available Online
at these fine retailers and at your local inmovement dealer welcome back to squawk alley. The chair of the u. S. Federal
Communications Commission
declining to say whether he thinks the agency will review at ts proposed purchase of time warner. Take a listen. This is one where the nature of this deal is unique. Its a vertical integration. Its a big merger but its a vertical integration. As you think about the areas that have been really contentious over the last few years in our industry and jeffs industry, theyve been horizontal mergers where the government was concerned about a competitor being taken out of the marketplace. That this has none of that. We compete nowhere. The fcc comments were not televised. That was at t chairman and ceo
Randall Stevenson
on squawk box earlier this week. Richard blumenthal, a member of the
Committee Investigating
the deal and former attorney general of connecticut. We just heard
Randall Stevenson
say we compete nowhere. If thats the case, how do you expect the antitrust committees review to proceed . I think there will be a hearing and very rigorous scrutiny by the antitrust subcommittee of the judiciary committee, which i sit on. And i think that fcc review is appropriate too. This merger deserves very rigorous scrutiny. It raises alarm bells because it is a vertical integration with potential impacts on competitors. It may not be taking out a competitor, but it may severely constrain competition and harm consumers. The past precedent, though, would have been comcasts purchase of nbcuniversal. Of course, both of those are cnbc parent companies, but in that situation, senator, there were limits that were placed on the company by the government in order to get the merger through. Do you think thats an appropriates predent and could you see the at t deal going through the same review . Very good question. One of the key questions here is whether those conditions have really worked. The danger is that a company like at t, if merged with time warner, could leverage content to restrict distribution by other competitors or raise prices. And even cut the supply of certain content from time warner. And so the question with respect to the comcast nbc merger is whether the conditions placed there are really working. And more generally, whether conditions can be sufficiently enforced or policed so that they really make sense for the companies as well as for consumers. They are very, very serious questions here that have to be answered about potential impacts on competition and consumers from this gargantuan merger. And it is a different merger that that previous bun. Senator, are we reinventing the definition of antitrust here . I mean, i understand that there are a lot of people right now who dont like
Big Companies
and the prospect of
Big Companies
getting together. Scares them. But how is this an antitrust issue . You say theres the potential to restrict competition. Theres tallas potential for it to enhance competition. Is there not sometimes when one big xaenl incompany integrates vertically, apple going into chips after buying a semiconductor company, for example . You get more computing choices, end up with the iphone, which competes with pcs, an ipad that arguably couldnt have existed if they hadnt done that. What is the antitrust standard given wireless is a competitive industry, content is as competitive asitis been in a long time . What standard do you apply . The merger here is very different from nbc and comcast in this respect it involves wireless. Its a national platform. And it involves more than just one platform. There are several platforms. Whereas comcast and nbc really involved one platform and it was limited to certain parts of the country. So the dimensions here, the magnitude, is very different. And the potential imp lications for competition, negative harm to consumers are very different. These mergers are always just y justified by potential promises of benefit, the unknown technology. And ive heard that promise of potential before. We all heard it, on the airline mergers, not really all that beneficial for consumers. A lot of those promises have proved to be unfounded. So rigorous scrutiny is well founded here. Senator, when did the antitrust lines politically get blurred . Because conventional wisdom would tell you that the republicans would want less government, less regulatory involvement, they would want to let companies do their thing, and that it would be the left that would actually have the heaviest hand in
Something Like
this. But were seeing everyone from republican senator david purdue, who sits on this committee with you, saying that its important to maintain a level
Playing Field
to the candidate for
President Donald Trump
saying it should be outright blocked. When did this happen . How did we get here . Consumer protection and antitrust enforcement never has been and never should be a partisan issue. To go back to the question of standards, antitrust standards will evolve as business and markets involve. Now we have vertical integration, which raises questions about the standard that should be applied there. And the antitrust department of the department of justice is going to have to answer some of those questions. Heres whats important. The s. E. C. Should be involved because there is a
Bottom Line Results<\/a> did come in bovis mates and the service adds 4 million monthly active users. Jack dorsey on the
Conference Call<\/a> earlier this morning. Were focused on building the most useful, open, and co comprehensive news network on the planet. This is the fastest way to see whats happening. Our product is already revolutionary and were focused on improving it every sing dale. Weve been making hundreds of small changes as quickly as we can that will continue to compound in more usage. How do we divide the conversation between evolutionary, revolutionary in terms of the core business and the m a, which he just refused to answer . Jack dorsey said extremely important. That is the first time ive heard twitter recognize what it is, which is a news and live events network. Incredibly strong in that. Look at all of us. Were all addicted to twitter. It is a much smaller niche of people than twitter originally thought it was going after. They said were going to be another facebook, this huge mass market colossal thing when in fact they are a news and live events network, but theyre already good at that, and with small evolutionary tweaks, not revolutionary, they can be great at it. That is worth a fair bit of money. I think the sentiment has gotten too negative. Do they want to be valued like a news network . Im not saying
News Networks<\/a> are a bad business but theyre not often seen as a
Growth Business<\/a> technologywise. The words you choose, i think, are important. If theyre going to call themselves a news network, if theyre saying thats a category that theyre disrupting, dont they have to do something really revolutionary and grow . I think they already have done something revolutionary. The big opportunity for them to grow is video. Theyve just started to roll it out. I will suggest to you that in a year or two twitter will be an incredibly important
Distribution Platform<\/a> for cnbc. And they will be able to monetize it very effectively. So, again, the value ligs, its not cheap by any means here. Were talking about a 13 billion valuation, a company with no content costs, just a distributor. If they can right size their cost structure, which they have a lot of work to do still and 9 probably will not get them there, you can see earnings, 500 million, a billion dollars in a few years, okay, then the valuation is reasonable. Weve seen
Companies Like<\/a> jpmorgan last quarter releasing their earnings on twiter,
Business Wire<\/a> utilizing twitter more. If it is a news network and a
Distribution Platform<\/a>, how much of the innards of the product need to be completely retooled . If theyre not trying to go after main street and your mom and your brother. This is the point. Very little. What they need to do is a couple things. They need to get rid of the troll problem. It is still unpleasant to use for a lot of the big contributors. Jim cramer talks a lot about this. This is a relatively easy fix, i think. The ore thing they need to do, they need to make it easier for people who arent really technically savvy and they need to make them think, hey, i need to find out whats happening in the world, i just open twitter and its super easy. Thats not hard either. All they need to do is get folks in the
Product Organization<\/a> who think like normal people instead of
Silicon Valley<\/a> genius engineer who is often think in a different way. Fascinating, the evolution of this story. Far 10yearold company, you forget how long theyve been around. They still own something that nobody else owns. You try to switch, say im going to go to linkedin for my news or facebook, you get a little of it but its not the live news that twitter is. Twitter needs to accept that, double down on it, and make it great. Is that a problem, though, if it disappeared tomorrow, somebody would recreate it instantly . Would it be that easy . No. It would take some time. Youd have some of the bigger players vying for it but right now theyre fending everybody off. If they became a pay service, how much would you pay to have it at your fingerprints for a year . I think its highly unlikely that would happen. Just theoretically, hypothetically. How much would i pay . I dont know. I would see what else is out there. But i dont see that. People dont pay for news. News is everywhere now, general news. Maybe niche news people will pay for, its important to their profession or something they cant get anywhere else, twitter doesnt need to pay this is a company thats already about a 3 billion run rate with no costs. You can make a business out of that. You just have to right size everything and embrace what you are. Another earnings winner this morning is tesla, a surprise profit, 22 million, thanks to record sales of the s and the x. Its the second ever quarterly profit in the companys history as a public concern and they promise to raise annual production to half a million in 2018 from about 50,000 last year. Musk on the
Conference Call<\/a> last night. A
Bigger Picture<\/a> that were designing the program to be a cash generator. The stronger our cash position. So this is another curious one today. 3 billion in cash. Trimming their cap ex, saying they dont necessarily need to raise money anytime soon. Trimming their cap exfor a quarter. Yes. Using some nice credit to, quote, throw a pie in the face of skeptics, which is great. Elon mus sk a marvelous salesman, incredible entrepreneur, all power to him, but theyre pretty much obviously going to need cash again. Basically, the scenario i described is
Everything Grows<\/a> perfectly we might not need cash but we want to raise it because otherwise well be inches of going bankrupt, not a place you want to be. So of course theyre going to raise cash. And im sorry, solar city . It still doesnt make any sense. It is hard to build a global car company. Why are you saddling yourself with a company that puts solar panels on peoples roofs . The solar city vote takes place on november 18th so they had to put up a profit this quarter on selling investors voting into it, but does elon musk need to send more emails to rally the troops . Remember september 2nd he sent that email saying were on the razors edge of profitability. Wouldnt it be great to see the headline not saying tesla loses money again . Lets do this for our investors. He has the power to do that. Absolutely, and thats good. But to ramp up to the kind of production theyre talking about in terms of cars per year, just huge
Capital Investments<\/a> have to be made. And that has been part of this story from the beginning is that each time we think weve got on the a place where, okay, theyre fully funded, its billion ls of dollars more have to go into the company. It doesnt mean its worthless, it wont work, but it does mean likely a lot more capital goes into it and a lot more distraction. Focus works. And they are about to defocus in a major way. Going to add to his plate. Qualcomm buying nxp. The biggest chip deal in history. Nx spshgs the numberone maker of chips for cars in the world. Take a listen. If you look at the larger context of whats happening in the industry, the car and the internet of things, the technology roadmap and amount of technology and technological hang chaipg will occur in both industries reminds me of what the smartphone looked like before there was a smartphone. Everybody was trying to figure out how do you assemble all the assets to be successful in that huge transition. That imsaim thing will happen in automotive and were happy to have the big pieces to be able to drive it. Coming on the heels of a major apple unveiling later today delaying the release of its air pod headphones. Samsung rho reporting the lowest operating net in two years. Nxp, qualcomm, a big deal. Three times the size of intels altera deal. Im going to kind of put my bet down and say this has the potential to be the most
Important Technology<\/a> deal of the decade. And the reason why i say that, its similar to oracle peoplesoft back in the 2000s where
Larry Allison<\/a> made this bet on consolidation and
Enterprise Software<\/a> and named it a hostile bid. This isnt hostile. This is qualcomm, won in the smartphone chip architecturarch trying to extend that into the internet of things, specifically into cars. Intel tried this with the pc into the phone and failed. Qualcomm beat them there. This is qualcomm trying to beat all other comers into this internet of thing, opportunity, into kind of this network planet. If this deal works, it positions qualcomm to extend its dominance the way the likes of google and amazon had from original web kind of into the cloud era. The chip folks have had trouble doing that in the past, but it has that potential. So this is one to watch to see where the entire industry is going. Agreed. I think very rare to have a tech ceo possibly understate an opportunity, but suggesting that chips in things could be bigger than smartphones, highly likely it is way bigger than smartphones in terms of chips in everything. Zillions of chips in a car and all around your house and so forth. There is a massive opportunity there. Any
Regulatory Risk<\/a> . The stocks trading about 10 below the deal price. Jon . One of the questions i was asking steve and george, cfo, you see what oracle is going through trying to get net sweep. Whats the complication here . The fact that the nxp is trading below the offer, i dont know if that indicating anything regulatory. Theyre getting to use overseas cash here. I dont see it as being, you know, overly difficult, but qualcomm has had a lot of trouble regulatorywise in various jurisdictions, asia, specifically, all kinds of issues that different jurisdictions could raise. Maybe that has something to do with it. I really dont know. I saw a list of the top 20
Media Telecom<\/a> deals of all time. Six were canceled after subsequent to being announced. Were in an era where now skepticism around at t. Same thing. Huge. This is another vertical integration play, but its the kind that people dont feel like they understand, so maybe those are easier to get through. If youre not paying a cable bill or a wireless bill to that company, youre like, qualcomm, nxp, sure, go for it. Henry blodget, great to see you. . Thank you. We are going to check in on the markets. The dow has gone positive, ibm and dupont helping to cancel out negative weighting from boeing this morning. S p still negative as is the nasdaq, eyeing their
Third Straight<\/a> decline for those two industries. Well keep an eye on that. Shares of groupon under pressure, posting a quarterly loss of 38 million or about 7 cents a share, but thats not the biggest news. Its buying onetime rival living social, which was once worth 6 billion buhbying it for an amount it doesnt eve havent to disclose. Watching financials, barclays and
Deutsche Bank<\/a> beating analyst estimates and bark clays rising sharply. Deutsche banks ceo promising to speed up restructuring efforts but it is still bracing for that multibilliondollar fine from u. S. Officials. It added about 550 million to reserves saving up for that. When we come back, at ts bid to buy time warner facing that uphill battle on capitol hill. Senator richard blouumenthal isn the antitrust committee. Hell join us. And we caught up with ken burns. Well hear his take on everything from steve jobs to donald trump. And more of sara eisens exclusive with david taylor. Dow almost perfectly flat. Squawk alley continues in a moment. Vo sitting at a desk all day can cause neck and back pain, high blood pressure, it even slows your ability to burn calories and lose weight. Man 1 fortunately, theres a solution; inmovement, the affordable standing desk. Woman 1 an inmovement standing desk lets you move effortlessly between standing and sitting throughout your day. Woman 2 inmovement standing desks come fully assembled and fit right on top of your existing desk. Man 1 inmovement standing desks are heightadjustable. Woman 2 and, unlike many standing desks, inmovement desks come in a variety of colors. Woman 1 and once you experience the energy boost you get from standing more, you wont go back to just sitting. Woman 2 people using standing desks report less back and neck pain. Man 1 . Lower blood pressure, more energy, higher productivity and better concentration. Vo and for a limited time, get
Free Shipping<\/a> on inmovement. Com every inmovement desk comes with a 30day moneyback guarantee, so you can try it riskfree call or visit inmovement. Com and use promo code freeship. Also
Available Online<\/a> at these fine retailers and at your local inmovement dealer welcome back to squawk alley. The chair of the u. S. Federal
Communications Commission<\/a> declining to say whether he thinks the agency will review at ts proposed purchase of time warner. Take a listen. This is one where the nature of this deal is unique. Its a vertical integration. Its a big merger but its a vertical integration. As you think about the areas that have been really contentious over the last few years in our industry and jeffs industry, theyve been horizontal mergers where the government was concerned about a competitor being taken out of the marketplace. That this has none of that. We compete nowhere. The fcc comments were not televised. That was at t chairman and ceo
Randall Stevenson<\/a> on squawk box earlier this week. Richard blumenthal, a member of the
Committee Investigating<\/a> the deal and former attorney general of connecticut. We just heard
Randall Stevenson<\/a> say we compete nowhere. If thats the case, how do you expect the antitrust committees review to proceed . I think there will be a hearing and very rigorous scrutiny by the antitrust subcommittee of the judiciary committee, which i sit on. And i think that fcc review is appropriate too. This merger deserves very rigorous scrutiny. It raises alarm bells because it is a vertical integration with potential impacts on competitors. It may not be taking out a competitor, but it may severely constrain competition and harm consumers. The past precedent, though, would have been comcasts purchase of nbcuniversal. Of course, both of those are cnbc parent companies, but in that situation, senator, there were limits that were placed on the company by the government in order to get the merger through. Do you think thats an appropriates predent and could you see the at t deal going through the same review . Very good question. One of the key questions here is whether those conditions have really worked. The danger is that a company like at t, if merged with time warner, could leverage content to restrict distribution by other competitors or raise prices. And even cut the supply of certain content from time warner. And so the question with respect to the comcast nbc merger is whether the conditions placed there are really working. And more generally, whether conditions can be sufficiently enforced or policed so that they really make sense for the companies as well as for consumers. They are very, very serious questions here that have to be answered about potential impacts on competition and consumers from this gargantuan merger. And it is a different merger that that previous bun. Senator, are we reinventing the definition of antitrust here . I mean, i understand that there are a lot of people right now who dont like
Big Companies<\/a> and the prospect of
Big Companies<\/a> getting together. Scares them. But how is this an antitrust issue . You say theres the potential to restrict competition. Theres tallas potential for it to enhance competition. Is there not sometimes when one big xaenl incompany integrates vertically, apple going into chips after buying a semiconductor company, for example . You get more computing choices, end up with the iphone, which competes with pcs, an ipad that arguably couldnt have existed if they hadnt done that. What is the antitrust standard given wireless is a competitive industry, content is as competitive asitis been in a long time . What standard do you apply . The merger here is very different from nbc and comcast in this respect it involves wireless. Its a national platform. And it involves more than just one platform. There are several platforms. Whereas comcast and nbc really involved one platform and it was limited to certain parts of the country. So the dimensions here, the magnitude, is very different. And the potential imp lications for competition, negative harm to consumers are very different. These mergers are always just y justified by potential promises of benefit, the unknown technology. And ive heard that promise of potential before. We all heard it, on the airline mergers, not really all that beneficial for consumers. A lot of those promises have proved to be unfounded. So rigorous scrutiny is well founded here. Senator, when did the antitrust lines politically get blurred . Because conventional wisdom would tell you that the republicans would want less government, less regulatory involvement, they would want to let companies do their thing, and that it would be the left that would actually have the heaviest hand in
Something Like<\/a> this. But were seeing everyone from republican senator david purdue, who sits on this committee with you, saying that its important to maintain a level
Playing Field<\/a> to the candidate for
President Donald Trump<\/a> saying it should be outright blocked. When did this happen . How did we get here . Consumer protection and antitrust enforcement never has been and never should be a partisan issue. To go back to the question of standards, antitrust standards will evolve as business and markets involve. Now we have vertical integration, which raises questions about the standard that should be applied there. And the antitrust department of the department of justice is going to have to answer some of those questions. Heres whats important. The s. E. C. Should be involved because there is a
Public Interest<\/a> standard that should be involved here, and there is nothing partisan or should be about the
Public Interest<\/a>. Does it do any good for consumers . Does this merger result in positive gain . Thats the standard that should be applied under the federal communications review. All of us sitting here are just armchair antitrust attorneys so well leave it in the hands of the government. We appreciate your time, senator richard blumenthal. Thank you. We are watching shares of twitter, up about 22 cents. Jack dorsey says the board is committed to maximizing shareholder value. Well talk about that next. Plus, we sat down with legendary documentary filmmaker ken burns in our latest episode of binge. A sneak peek of that after the break. Bingewatching is an interesting thing and i think its us trying to control our own environment. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. The movie and documentary business has changed a lot since ken burns started making films more than 30 years ago. For binge, we asked him if things like smartphones are a good or bad thing for business. Heres what he told us. This instant documentation of events on phones, that we see in news all the time. Mmhmm. Yes. Positive or neg fif. Hugely positive. We just cant mistake everybody for a filmmaker, right . Because telling a story is not getting
Something Like<\/a> that. Its putting together shot after shot after shot and sustaining your attention for an awfully long time. Thats hugely difficult. What it is is raw material for us. The issue will be curation. Absolutely right. There is a huge danger. I do not want to discount this. We are using fewer and fewer words. In an age where youre omging and loling, youve contracteded your vocabulary, which is a terrible thing. That contraction of language is that what you mean when you say mobile devices are evil or suck the lifeblood out of us . There is an aspect of them thats evil. They do suck if we allow them to control us, ill tell you what, im showing this film last night at the holocaust museum, filled with survivors of the holocaust. As i looked, the person next to me could not keep the sfoenl off for even a half an hour. You can find our full interview with ken burns on cnbc dot bo cnbc. C cnbc. Com binge. Also apple tv and hulu. I dont think this will do anything to reverse our contraction of language and use of these things anytime soon. Nor do i think hes going to go out of business. We dont have enough memory on our phones to shoot a tenhour miniseries to compete with him. I remember when it was tv that was the thing that was causing all this distraction, but now catching ken burns documentary is the high culture. Whats amazing, though, is he continues to draw tens of millions of viewers to his tenhour projects. Hes booked i think through the year 2030 in terms of product n production. Hes doing country music, vietnam. He is cutting through, slicing through this sort of contraction of attention spans, at least among americans. Well see if it continues to work. But fascinating talking to him. Well count down to the close in the uk and across europe. Seema mody is back at hq as the markets are stuck near the flat line. A mixed session in europe as market there are digesting everything out of china which showed a sharp slowdown in industrial profit growth. An extended selloff in eurozone
Government Bond<\/a> yields on the prospect of more hawkish polities and tighter rates. We told you about that report that says the
European Central<\/a> bank may limit the amount of bonds it purchases if the
Economic Data<\/a> out of europe continues to improve. Some investors seem to be pricing in that tail risk. The tenyear german yield now at its highest level since may 31st of 2016. Yields also rising in italy and france. Bank earnings also in the spotlight. Barclays leading uk lenders higher after posting a
Quarterly Earnings<\/a> helped by an uptick in bond trading. Deutsche bank posting a surprise profit despite what it calls a tough environment. The lender also setting aside money for litigation costs as it tries to reach a settlement with the doj. Shares higher by about half a percent. Fosterwheeler, thats one of todays biggest losers, down about 20 after the
Oil Service Company<\/a> said it continues to see weakness in key marks. Again, a big laggard in european trade. Finally, the uk economy growing faster than economists expected at 0. 5 . In the three months after the brexit vote, which resulted in the pound, the uk currency, losing 17 against the u. S. Dollar, some say, though, its still too early to assess the damage of the brexit as it hasnt officially happened and once those trade deals get renegotiated, only then will we see the true impact. Jon . All right. Thank you, seema. Still to come, disney, alphabet and sales force all walking away from the table when it comes to a deal for twitter. Whats next for jack dorsey and company . Well dig into that next. And later more of sara eisens sitdown with david taylor, approaching his oneyear anniversary that job. His take on advertising and social media when squawk alley returns. T . Is it a caregiver determined to take care of her own . Or is it a lifetime of work that blazes the path to your passions . Your personal success takes a
Financial Partner<\/a> who values it as much as you do. Learn more at tiaa. Org sharing a ten by ten room,ng threestruggling. Nding, i rent this place and then i started home sharing. My roommates help out all the time. They are glad to meet the guests and that opportunity that airbnb has given me is such a priceless gift. I was able to take three months off to take car of my family during a family tragedy. The extra income that i get from airbnb has been a huge impact in my life. Hello, everyone. Im sue herera. Here is your cnbc news update at this hour. The federal
Communications Commission<\/a> is rolling out new rules aimed at protecting consumers. The change will force
Companies Like<\/a> at t, verizon, and our parent company, comcast, to ask customers permission before using their information in advertising or marketing. A big bust over phony irs phone call finance
Justice Department<\/a> says its charged 61 people for scamming over 300 million from consumers. The group used call centers in india, having the callers pose as irs agents who demanded money from victims. In some cases, threatening arrest or deor the anticipation. Deportation. Looking for a company with great perks . Glass door is out with the highest rated companies for vacation and paid time off. Topping the list is biotech firm amgen as well as ikea and google. And maybe this guy was just hungry . Well, hes being followed by the police, but the man behind this pickup truck made a pit stop at the drivethrough. He was later arrested by authorities. Youre up to date. Thats the news update this hour. Back downtown to squawk alley. Jon, over the to you. . Thanks, sue. Twitter topping estimates in its first
Earnings Report<\/a> since acquisition interest in the
Company Reportedly<\/a> fell flat beating on the top and bottom line, jack dorsey cited optimistic about the companys video streaming potential. Take a listen. We see people watch tv with twitter for ten years and comment about it, which makes whatever theyre watching a lot more interesting, a lot more entertaining, and a lot more insightful. And were looking at that and trying to remove friction in every way that we can. And thats what the
Live Streaming<\/a> initiative is about. All right. Lets parse dorseys comments and twitters earnings. Were joined by a couple internet analysts. Good morning. Good morning. Neil, when twitters earnings are bad, that matters. Not just because of acquisition rumors but also just because of the growth that folks want to see. Do these positive results matter as much as bad results matter . Its a good first step in the right direction but its one quarter. Were still skeptical they can turn the business around. Some of the underlying trends in terms of dau, engagement increasing, acceleration, seems positive but hasnt transferred to real
Revenue Growth<\/a> on the advertising side. I think there could be a little more downside, especially a
Sales Force Restructuring<\/a> just before we sb enter into the fourth quarter. Well have to see. This is at least a good first step in the right direction. Thats the way we characterize it. Collin, jack dorsey referred to twitter as a news network during this earnings call. I wonder how you parse that, give than theyre airing nfl games, theyre doing a number of other things that arent exactly traditional news. Does that help clarify twitters mission, do you think, or is it just yet another explanation that needs backup . Well, i think that twitter is trying a lot of
Different Things<\/a> to reengage with users and accelerate growth. I mean, certainly from its origin, twitter has been a broadcast platform, so that would include news as well as other activities and content. So i think thats mostly consistent with what twitters message has been. Obviously, live events, live video is a new spin on what twitter is doing to engage. And so, neil, i wonder, as you look at the res rest of the year and into next year for twitter, assuming this acquisition rumor mill dies down from here, what are the specific metrics we should be watching . Back to maus and daus . Are we past the point where squeezing the most revenue possible out of a slow growth or no growth user base is the story . Yeah. You know, ultimately if these guys want to really be in a position to reaccelerate their advertising revenue, theyre going to have to show mau and dau growth and increasing engagement. And, you know, in the face of facebook and now, you know, instagram having a
Larger User Base<\/a> than twitter, i think and now you also have snapchat, which is becoming a much more, you know, more popular site amongst
Younger Generation<\/a> people and amongst advertisers, i think, you know, theres a lot of competition for that social media dollar, and if twitter cant show meaningful reacceleration this their user base, those dollars are started to flow outside of twitter and will continue to flow i think at an accelerated pace. So this is a very critical juncture for the company. If they cant show user growth through all these initiatives on the product side and the
Live Streaming<\/a> side i think we could see, you know, the stock fall pretty meaningfully from these levels. Im just surprised. I mean, when a debate happens or when the cubs win game two, you dont hear about people going crazy on snapchat, at least not yet, neil. And i wonder whether or not you gave lot of credence to some of these sell side surveys that show marketers with decreasing spend plans going into next year on twitter. Yeah, you know, weve talked to a number of agencies and, you know, theyve become quite lukewarm on twitter. Some have definitely pulled some money away from twitter as well. So, you know, i think the
Live Streaming<\/a> is a unique opportunity that twitter has kind of grasped, and, you know, maybe its a way for them to enter into a meeting with agencies and then be able to upsell and talk to agencies about
Everything Else<\/a> thats going on. But, you know, i think that will this will take some time to play out, but if, you know, advertisers want a big bang for their buck, theyre going to go to where the audience is, where the eyeballs are and, you know, still live video is very small. The nfl was about 3
Million Viewers<\/a> versus, you know, 300
Million Viewers<\/a> on twitter. So its still pretty nascent. Still a company to watch. Neil, colin, thanks for joining us. Thank you. And speaking of twitter, our own sara eisen is in cincinnati where she spoke to the ceo of what happens to be the biggest ad buyer in the world,
Procter Gamble<\/a>. Interesting to see
Procter Gamble<\/a> continue shrinking even while other of these conglomerates are acquiring companies. Yeah, and theyre looking for growth and doing it by ramping up advertising, kayla. They have had some big hits, like a girl campaign, when it comes to viral video. You remember from last years super bowl and the rio olympics. Went crazy on social media. I asked ceo of
P G David Taylor<\/a> when it comes to allocating the dollars, where is he getting the biggest bang for the buck, snapchat, facebook, or twitter . The area where weve got bigger investments would be google and facebook. If you look through the u. S. Or maybe alibaba in china, and then it varies in other countries. And its typically ones that have a broad enough reach and enough inventory and interest within their users to be able to communicate our key messages. And those two would be the ones im probably most familiar with in terms of differential benefits. And on this topic, how much of your ecommerce strategy right now and selling the products is dominated by amazon . We focus starting with the consumer back. Amazon is the largest pure play in the u. S. , but if i go to
Different Countries<\/a> theres a different answer for alibaba and others. In every market we want to reach the consumers when and where theyre receptive to our message and wherever they want to shop. A lot has been made also recently of p g deciding to spend less on targeted ads on facebook. So i did talk to taylor about that issue, and he makes it preti clear while theyre not decreasing their money spent on facebook, they are looking away from target. Theres such a thing as overtargeting when it comes to going broad and selling household products. Listen. One of the things we have learned, though, is and youve probably read about it, we need to make sure that we reach enough consumers to achieve our objectives. One of the watchouts is with
Digital Media<\/a> you can be incredibly precise and targeted, but in doing so you may narrow the audience down to not have enough consumers to be aware of your grand message, and thats one of the learnings and weve learned a lot about that. Its not about not using social media. Its just about recognizing social media has to be able to reach enough consumers to make a difference for the brand. So. So the takeaway from taylor when i asked him about where hes spending money, snapchat, facebook, fall bet, he brought in alibaba, talked about china. When i asked him about where hes spending and focusing his strategy when it comes to selling products, he also brought in alibaba, and it goes back to what he told me earlier when i asked about the chinese slowdown, he said yes, youre seeing a slowdown in the monitored data when it comes to
Consumer Spending<\/a>, but its all shifted online. Youre still seeing 20 , 30 , 40 growth in
Consumer Spending<\/a> in china. Its just happening digitally, which is not being tracked, which is clearly why alibaba is on his mind. Now kayla, i noticed earlier on squawk box, your parents made a cameo on the show. I did want to share with you that my mother is also here as we are here in cincinnati. It is family day on cnbc. Shes brought us breakfast after coming from the gym. I just thought you would like that. If you didnt see kayla, that was a great moment when your parents joined andrew in swing state georgia. Now were in swing state ohio. Nice to have some moral support, the early mornings. My parents surprised me showing up at andrews live shot just a few minutes away from where i grew up. So i know that our parents really love when we come home. So on the cincinnati beat, for good, sara eisen. And mrs. Eisen. Absolutely. Yes. Getting feld along the way. Very important. Always very important. Nice, warm, homecooked meal. Sara, see you soon. Our thanks to her mom as well. Coming up, new
Wikileaks Revelations<\/a> link the
Clinton Foundation<\/a> to paid speeches delivered by former president bill clinton. Eamon javers has that story in washington up next. First, check out shares of zto express making their market debut on the nyse today. And trading down. Down about 7. 5 after pricing at 19. 50, opening at 18. 40. This is a
Package Delivery<\/a> company that delivers goods sold on alibaba and j. D. Com and its down about 8 in its debut. If youre on medicare, remember, the open
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Medicare Coverage<\/a> begins october 15th and ends december 7th. So call unitedhealthcare to enroll. In a plan that could give you the benefits and stability youre looking for, an aarp medicarecomplete plan insured through unitedhealthcare. What makes it complete . It can combine medicare parts a and b, which is your hospital and doctor coverage with part d
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Healthy Living<\/a> and earn rewards, too. Remember, medicare open enrollment ends december 7th. Call unitedhealthcare today about an aarp medicarecomplete plan. You can even enroll right over the phone. Dont wait. Call unitedhealthcare or go online now. Coming up on the halftime report, a new trade pegged to the election from mr. Wonderful, kevin oleary. He says it goes up no matter who wins on november 8th. And new warnings on bigname stocks in the health care sector. Well tell you what they are. And one of the most powerful entertainment moguls ever on media consolidation, the next industry he is searching for star power. And the top movers on this, the busiest day of earnings season. See you in about ten. 12 days until the election, the clinton camp continues to play defense against the daily onslaught of these
Wikileaks Revelations<\/a>. Eamon javers is at the
Nations Capital<\/a> with details. Good morning. Good morning, carl. Thanks to the stolen emails were getting a look inside the clinton money machine including a really astonishing note that was penned by doug band, the personal aide to bill clinton over a long period of time, back in 2011. Thats one of these leaked documents. In it he sort of describes just how closely intertwined all of the clinton personal business and
Foundation Business<\/a> was in terms of doing business back and forth with each other. Take a look at this note from doug band, in which he lays out what he calls bill clintons inc. President clintons business arrangements from have yielded more than 30 million for him personally with 66 million to be paid out over the next nine years. He also says that we have solicited and obtained, as appropriate, inkind services for the president and his family for personal travel, hospitality, vacation, and the like. And then band goes on to detail some of the amounts of money that bill clinton was paid for speeches including 900,000 to ubs, 750,000 from ericsson plus what he called 400,000 for a private plane, bhp paying 175,000, barclays 700,000 for two speeches. All of that gives you a sense of how intertwined bill clintons foundation, personal business, and a private
Company Called<\/a> taneo all were. The
Clinton Campaign<\/a> has put out a statement saying we are not confirming the authenticity of individual emails hacked by the russian government to influence the election by weaponizing wikileaks. Thats clearly part of whats going on here, guys. We are getting this hack that now gives us astonishing insight into the communications back and forth between the clinton aides over all of these financial arrangements. And you see some real disputes spilling out in these emails as some of the aides clearly thought it was inappropriate, needed to be spoped, some were pushing forward and saying there was nothing wrong with it. Well have more throughout the day, carl. All right. Thanks. Ill take it, eamon. Fascinating now bhp got a better deal than everybody else. Wonder how that worked out. When come back, apple unveiling new products and later today everybody expected a new lineup of mac books and updated chips across the product line. New details up next. We need to be ready for whatever weather may come our way. My names
Scott Strenfel<\/a> and im a meteorologist at pg e. We make sure that our crews as well as our customers are prepared to how weather may impact their energy. So every single day were monitoring the weather, and when storm events arise our forecast get crews out ahead of the storm to minimize any outages. During storm season we want our customers to be ready and stay safe. Learn how you can be prepared at pge. Com beprepared. Together, were building a better california. Apple is unveiling a new product lineup. What we might expect. Josh . Reporter morning, carl. So we are at apple hq where tim cook is expect ed to unveil som upgrades to the mac line. The star of the show could be the macbook pro. Were expecting a pc that is thinner, thats lighter, thats faster. Among the new features that people are at least speculating we might see today would be a new kind of touch screen keyboard strip, and the idea seems to be maybe the icons would change depending on what youre in so it would be different than in word versus whatever youre gaming. You can see how for pros maybe the keyboard shortcuts could be something theyd be looking forward to. Other things we might be looking forward to, new touch screen i. D. , incorporating apple pay, and also, of course, these new macs will be running on ciara, the new os, and the voice assist ant to the mac. The mac we heard this week from apple is showing some signs of fre pressure in q4, units down, revenues down. Now apple executives will argue they are going against tough comps. It was interesting because when i also asked tim cook about that he said, listen, when you have this many rumors about what we might introduce, that also, he told me, creates a pause in demand. I think for our audience, traders and investors, the mac does represent about 10 of the companys overall revenue. So can cook introduce a new machine today that excites consumers, get it out in time for the holidays . If its a hit could that provide maybe a positive financial tail wind that investors might not have been considering over the next few quarters, guys . Josh, thank you very much. Cant wait for that. Sort of got buried in the slew of other news weve gotten today. By the way, its not just twitter and it tesla, two names reporting results after the close. Well get more from google and amazon after 4 00 eastern time. The dow is up six points. A basketball costs 14. Whats team spirit worth . cheers whats it worth to talk to your mom . Whats the value of a walk in the woods . The value of capital is to create, not just wealth, but things that matter. Morgan stanley a lot more it tech earnings this afternoon. Amazon and google parent company, alphabet set to report after the bell. Amazon on a pretty good run of late posting five profit quarters in a row along with obviously a big gain in the stocks, alltime highs lately. As for alphabet analysts expecting a 20 increase year on year, shares of that stock up over 7 in the last three months. Its almost impossible to keep track of all the news that amazon has made even if its small stuff like buying a show from the creator of mad men. But 833 got some attention and i think four analysts have targets of 1,000 or more. A lot of eyes on the cloud number given microsofts
Strong Performance<\/a> in the category several days ago and then for google, a dependable voice on the call. We know theyve scaled down their fiber project so you wo wonder if that shows up in the cost line for them, sort of what the argument is that googles making for growth here and discipline. Or what comments they make about the pixel and any momentum that they are seeing in the wake of the
Samsung Galaxy<\/a> note 7 debacle. Its hard to imagine a better timed entree into hardware than what google was able to pull off here. Did they capture market share with that . Right. And do they have the supply constraints apple had to talk about earlier in the week. You cant ignore the ten year today at the highest level since the spring, and jpmorgan 30 cents from 70 is getting a lot of air tension along with regionals, getting a the lot of play as people are talking about a december hike looking more and more likely. And you have the front end of the curve really supporting that thesis, the twoyear yield is up about 2. 7 , so certainly something that were going to keep an eye on today. Also lets get a check on the p ipo, zto went public earlier this morning. It was down about 10 at the lows. Of course it is the
Package Delivery<\/a> agent for alibaba and is falling in sympathy with this name. Opened at 1840. Hasnt been able to hold those levels. Well see where it closes but it doesnt look like its going to get close to that price. Global demand, the
Company Listed<\/a> with the nyse because that actually helps awareness in other parts of the world being list ed in new york, so thats big part of their strategy all owe the pricing looked to be difficult earlier this morning. Lets get over to scott wapner and the half at hq. And, carl, thanks so much. Welcome to the halftime report. Im scott wapner. The earnings parade, it is the busiest day of the season, a pretty good one at that. The
Biggest Companies<\/a> beating expectations today. Stocks like twitter, tesla, bristol and ford on the move. Amazon alphabet. With us for the our joe terranova, steve weiss, the brothers najarian, and john ficktorn. Great to have you","publisher":{"@type":"Organization","name":"archive.org","logo":{"@type":"ImageObject","width":"800","height":"600","url":"\/\/ia803206.us.archive.org\/31\/items\/CNBC_20161027_150000_Squawk_Alley\/CNBC_20161027_150000_Squawk_Alley.thumbs\/CNBC_20161027_150000_Squawk_Alley_000001.jpg"}},"autauthor":{"@type":"Organization"},"author":{"sameAs":"archive.org","name":"archive.org"}}],"coverageEndTime":"20240626T12:35:10+00:00"}