Good monday morning. Jon fortt is back. Sar sarah eisen at the New York Stock Exchange the dow setting up an all time high a seventh straight gain for boeing the other major averages are lower. The market is on base to conclude best month since february financials are the Strongest Group in todays mixed trading youre watching media m a. Well talk to the ceos of the companies later. Boeing is helping out the dow. Were 100 points from 22,000. Best month for stocks dow and s p 500 since february best for nasdaq since january. Other big milestones, crude oil up is 8 that really helped fuel some gains on wall street dollar is set for the worst month since back in january. Losing another 2. 5 . How does it all add up well, earnings are doing better. And thats certainly help stocks commodities are doing better copper made two new two year highs to day and the Federal Reserve is taking its slow and easy the question is do all the factors continue Going Forward, there are wobbles in technology. Thats what i was going to touch on take a look at big tech. Pretty much all in the red except for intel which is up very slightly. Pretty much flat a lot of the earnings looked pretty g its an interesting week as we look at apple and the others to come down the pike to see if that shifts sentiment on big tech. Tesla i think is reporting earnings this week wednesday thats right apple go pro, its a pretty big week for tech and media earnings. Well keep our eye on all of that the big story of the morning is discovery. Buying Scripps Networks for 12 billion in cash and stock. Our david faber is standing by on the floor with special guests. Yes, we have them, in fact. Thats right david. The ceo of discovery and ken low, the sikh of scripps you have been long time friends and have talked about doing a deal like this in the past so, ken, the question to you, why now . Why did you decide now is the right time to sell scripps and to followthrough and get the deal done . I think since the last time we were together, fortunately our Companies Continue to grow and we expanded internationally. We also very much like discovery. We pivoted from a Linear Television company to more of a Digital Content origination company. And now just seemed like the right time and i have to say its a historic day for the stake holders, Scripps Family, publ public investors most importantly, david, for our employees. This gives them a Much Bigger Company from which to operate. A platform to reach more consumers around the world so its a great day for scripps. When you say it seemed like the right time, i mean, we all know is a tumultuous time in your business. There is concern that despite what you talk about as the popularity of your networks, they might not be part of these skinny bundles, the over the top networks that are being there. Is that part of the reason why now is the right time . Look, i think david said earlier this morning, bigger is always not necessarily better. But the quality brands that our two Companies Bring together, 8,000 hours of content were producing a year 300,000 hours of content we collectively own, and then the fact that seven billion streams and video short form are doing this is a powerful combination and one that we i think sets up especially scripps for Great Success in the months and years ahead. Youre going to be running this combination which is great. We have spoken before and we said maybe the third time is the charm. Eight or nine years ago we took a look we love the company. We love the quality of the brand, the management. But the family wasnt ready. Three years ago what happened then four years ago. We looked. I think both of us were not sure it was the right moment. But now i think is a great time. Why we all have the same strategy were about Quality Content and producing shows and brands for super fans so whether for us its discovery or oprah, africanamerican women, id within crime, tlc, one or two channels from middle america. Its not about getting biggest audience its about getting an audience that you can nourish that really loves you. And nobodys done that better than scripps with home and garden and food. And you put that together with us, we have 20 of the viewership in the u. S. And we have a huge amount of women that we can take to the market but more importantly, we have most of the quality brands on cable. And so as this industry changes, whether its different kind of bundling, entertainment bundles, we have not just passionate super fans for each of our brands, but we have some of the highest quality brands, maybe most of the quality brands in cable in the u. S but also as we look to the future, its about the seven billion screens out there. And from our perspective, owning ip that we can take around the world and all languages and having that ip something be something that people love and, you know, as ken said, we may be the largest Media Company in term of the quality and the quantity of ip that we have. We rent almost nothing we will own everything david, when we we talked in the past, of course the story youve been telling for quite some time has been about international. It hasnt been about Domestic Networks as much as its been about, hey, 50 of the revenues come from overseas thats where youve been focused. This seems to be a departure, a doubling down on the domestic market i know they have operations in poland and uk tv really its about here, isnt it it does two things for us our u. S. Business, despite the decline, it is still a Growth Business its been growing mid Single Digits now we think with the synergy question even grow it faster but more importantly, versus four years ago, theyre much further stage internationally. They have a very big business in poland, tbm. They own 50 of uk tv. Those are two of our big markets. So were much bigger now we will be in the uk and in poland we make about a billion dollars outside the u. S. You look at the synergy that we have, just coming together, we should be in the 125 or 13 range. That is before we start launching think content to all of our platforms and so and maybe finally, you know, the question for us is do we take food and home and garden and own and travel and all of this ip, do we take it on channels around the world . Or do we sell it directly . Exclusively. So what is it going to be is it direct to consumer offering something you are thinking serious about i think, david, the world is our oister in the sense that because we own all of this content, just because we necessarily distribute our content in the past in the manner we have doesnt mean Going Forward. We can do some direct to consumer, you know, if you take Something Like food and you take french cooking or italian cooking, there might be slices and dices of the food Network Brand that you can do that might be targeted to a passionate base it doesnt always have to be on a linear platform. The same thing can be said for the home category. Back to your comment about doubling down on domestically. Domestically, were going to have about 20 of the advertising market, 25 to 54 adults thats powerful. And david built this incredible infrastructure globally to take our brands and just speed them out. We Just Launched hgtv poland and that network is taking off to be able to take our brands, accelerate them, you know, plug them into davids infrastructure is real kly compelling. We could be in the very early stages eventually, i mean your kids, my kids, theyre not going to be paying for a cable bill most likely. Theyre going to be using over the top aggravations, skinny bundles. You feel like now you have the bulk and the necessity so to speak that will make you a player in that world thats quickly coming we have the highest quality brands when we close on this deal in the u. S. And theyre also low priced. Well have 20 of the viewership and 8 of the money. Sports on the other hand, you know, gets a multiple of what so were a great buy for distributeors. And to date only thing that if youre a college student, can you subscribe to cable or get netflix. Right 8. 99 we could put together a skinny bundle together with other programmers or other distributeors that is, as ive been saying for a long time, thats 10, 12, 15 as long as it doesnt have sports it in, youre fine. Right but if you look at the skinny bundles around the world this is the only country that has sports and other stuff in that. So eventually that will rationalize. Do the revenue numbers stay the same can you really grow throw . You end up on a lot of the skinny bunld skinny bunld skinny bundles there are two objectives, be on every platform, every bundle, platform, every screen and the second is to figure out how to monetize it effectively most is btob, it will be through the skinny bundles and some may be direct to consumer thats what were doing with sports in europe and our pivot is about not just content that people want to watch when they can watch anything but what do we have that people will watch when they can choose anything and what do we have that people will pay for before they pay for dinner and thats why we invested 6 billion to 8 billion in sports and leader in sports in europe thats why we invest in kids in latin america. When you look at the affinity groups behind home and garden and food and cooking and diy, those could be very deep verticals. I mean ken has been a leader in doing this but together as a larger company, you know, and the analytics that you get from knowing who all those people are and having them consume the content and being able to bring with scripps has done brilliantly, bringing in the advertisers that want to reach them and having them be in for a premium to play in that space has been very, very economically effective. Ken, viacom competed aggressively here. Im saying that you dont have. To im curious whether you were making a decision about whom to sell the company to, was it only price . Why not via come im not going to, as you said, im not going to speculate and speak on anything that may or may not happen in the past. Only focusing on the future. The real reason were here today talking about this merger is as i said at the top, its great for our shareholders this was approved by the Scripps Family puts the Scripps Family now back in business with john malone who they own Cable Systems with years ago. With the newhouse family who they were partners in the newspaper industry and also at the end of the day the family like me believe this was the very best home for our employees. The opportunity for our employees and our brands to do things with them frankly that we would have clalchallenges based fact we dont have the International Infrastructure its the best deal and the best partnership. The thing that makes can i ask one more question though financially go ahead. Let me ask synergies. 350 million is the number you using. Frankly, a lot of people think its low, david. It has to be a key driver. We think its low we did a short diligence period. Thats what we have our hands on now. Its a one over one company. We do a lot of the same things but when we look at this the thing that is really attractive is not just the cost synergy you put in this cost synergy and we think it should be higher, you get were buying this company for our multiple right it lowers the multiple although, frankly, investors dont see that you thissed the stock is down 6 . Were enthused. We think there is more cost synergy and more importantly, there is great revenue synergy for us there is great Strategic Value we may be the largest ip story telling content company in the world that turns youre not going to spend as much money as netflix on content . Well spend about 3. 5 billion on content. But in after we acquire this asset, a year and a half to two years later well be an enterprise value of 40 billion and well have a Balance Sheet where we are leavered less than 3 1 2 times and real flexibility with that Balance Sheet to invest in more of our assets or to go out and buy more stuff that we need so that we come out of the terminal tunnel who is going to be the big winners . We think with this ip together with tlir creative team, everything you really reposition the company for the future day with this deal . We think we v we couldnt be more excited about being in business with ken. Im very excited that you guys made the trip down here so thank you great to see you. And you ken lowe, david zazlov joining us on the big deal day carl, back to you. All right david, thank you very much our david faber on the floor whnchts we come back, the first day of trading after snaps lock up expiration. Well tell what you that means for the stock next and its the last trading day of the movement take a look at the winners for the nasdaq so far. Were back in a moment for years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Snaps lockup on shares expiring over the weekend leaving 400 million shares available for sale in todays session. Were watching this development and joins us now with more from los angeles. Jew julia, good morning. With the 400 million shares now available to sell, snap shares hit an all time low this morning down as much as 5 they have bounced back the stock now off just fractionally but snap shares are still off about 50 from their all time high back in march just shortly after the ipo. Now those 400 million shares that became available today are owned by early investors including the Venture Partners and General Catalyst Group the floodgates will open even more on august 14th. Four days after earnings employees will then be able to sell 782 million shares. And then at the end of august, another 20 million shares will become available to sell according to j. P. Morgan now for some comparison, twitter shares dropped 18 on the day of its lockup expiration in may 2014 facebook shares actually jumped 13 on the day of its lockup expiration in 2012 investors are turning attention to snap earnings the pressure is definitely on for snap to show user and engagement growth in the face of facebook reporting better than expected results having successfully copied some of the snaps most popular features steve full with the 22 price target on the stock saying contrary to current sentiment, we do not believe the wheels are falling off snaps user growth story. Piper jaffray warns that instagram to reduce the uniqueness of snapchats offering and limit the user growth well have to see how that rivalry pans in and out snaps numbers next week. Back to you. Thank you, julia. Lets dig into that. For more on what this means for the stock, lets bring in michael graham, senior Equity Analyst and jason helfstein. He joins us on the cnbc news line lets start with you snap close to half of its ipo price. Are people assuming this is twitter all over again is the lack of shareholder rights kind of affecting hopes of a rebound here . Well, often you cant see these lockup expirations be more of a bottoming event for stocks than a negative event. You know, theres a lot of negative sentment going into an he vent like this it does take some time usually for the shares to get into the market. I think the more important thing for snap is to show some execution when they report next thursday on the fundamentals and the two most Important Fund t fundamentals are user growth and revenue. They disappointed investors with the q1 user growth numbers. It would be really good for the stock if the company could turn that around a little bit heading into q2 jason, youve got an outperform, i believe, still on the stock. 23 price target what is the bold case as far as what snap can say in the next Earnings Call that is going to get you closer to where you think the stock is going the question is consensus and expectation from down and up theyre looking for about 189 million revenue which we think they can beat. Maybe not by a lot but they can have the headline beat dau growth expected to sloechlt the question is it flat as opposed to just slowing . I think when you take a step back and listen to what facebook said on the call, shorter length video ads are more effective thats what snapchat needs to convince advertisers to create because theyre such a small player relative, theyre not going to be the one to move the market its really facebook and google. But we see initiatives happening at facebook and google that should cause advertisers to change behavior and then snap is a second beneficiary michael, as we look at this comparison that is growing between facebook and snap, is that at all avoidable . I mean so many of the metrics are going to be similar between the two companies and people want the stock to go up. They want it to be more like facebook, right . I think to augment what jasonjaso said, the advertising revenue will follow the eyeballs they need to get the user base growing again. One of the real issues in front of snap that facebook never had as going through the ipo process and going through building up the ad business is that snap has a really foremidable competitor in facebook and in instagram right in front of them as theyre trying to build their business Instagram Stories in a very short amount of time has 250 million daily active users relative to snaps q1 number of 166 or 168 so thats a real head wind, a competitive head wind that snap faces for audience yeah. I was going to ask about that, jason. And specifically as Instagram Stories grow the user base, are they taking the 25 and under crowd which was so valuable to snap chat and to advertisers and partst bull