Good thursday morning. Im Carl Quintanilla with jon fortt, sara eisner and with us is henry blodgett. Amazon officially closing its acquisition of whole foods google and walmart are teaming up on a voice shopping nasdaq slightly up this morning looking to avoid its fifth negative session in six. A retail analyst on yesterday who called the day of that announcement amazon whole foods a day that will live in retail infamy now getting one step closer to theyre going to close this thing in the second half. Yeah, which is great. A lot of us amazon and whole food shoppers are exited another bold step from amazon. Well be excited how they do it. How your characterizing the responses companies have you take your hat off to walmart. Theyre being very aggressive. They made a huge bet acquiring jet. They are being superaggressive its a smart idea with google. Does it immediately counter amazon no but the whole idea of ordering stuff through your home voice device, walmarts are Something Like an average of 10 miles or fewer to pretty much every american theyve got this network in place. Theres a lot they can do together we should salute walmart for being as aggressive as they are. Its interesting on the fringe but i dont think anybody would argue that ordering with your voice is the battleground its the logistics, things like prime they need to figure out and Neither Google nor walmart has that right now and getting together isnt going to make it any simpler i think there was a lot of this antitrust chatter out there around amazon, even though the way the law has worked up to this point, it wasnt clear to me how that was going to play out. The fact this is off the table and were talking about giants clashing again, that is interesting. And at least, for me, somebody who likes to see competition and markets work, its a little bit of a sigh of relief. Absolutely. The antitrust argument never made any sense you look at the percentage of commerce amazon has, its tiny a big percentage of digital but not commerce in general. And thats really the market here i think the big opportunity for walmart and google is going to be in grocery because walmart is the largest gro esst grocer e country. Something amazon hasnt mastered they are trying to figure out the grocery delivery of the future when it comes to logistics and changing Consumer Habits around this, this is something that amazon is not light years ahead of walmart on. Walmart has the food capability there. I think the grocery war aspect of this will be key. And very interesting. Big opportunity. Amazons now down 12 since late july. Well watch that call me when its 50 you want to be an amazon investor, take the long view the stock has gone straight up since the fire phone disaster its a Good Opportunity to load up . This is a very expensive stock, seemingly youve got to be in this for a long haul, not a quarter to quarter stuff. Uber continues to show growth even as it suffers through some pr trouble and that extended search for a new ceo. Gross bookings up last quarter while increasing more than 100 year on year we were just talking about whether or not there are issues in the media, the press have any bearing on how willing a user is to press the app i think thats the real message here theres a huge scandal around uber in corporate circles, business scandal investors it is not affecting the Business People love this service, clearly. Theyre growing 100 net revenue year over year they have a huge loss on the bottom line. Its still 2 plus billion a year the next project for the company will have to be to actually slow the top line growth, move toward break even its a very different phase of both and the new ceo question saul around that who is best to do that but the big message here is people love uber yeah. They are losing 7 million a day. 645 million in the quarter. Which is a narrower loss but its still 7 million a day. I dont think the issue was ever so much, people thought they were going to stop using uber but the momentum that not only lyft but also Global Services like dd and grab have. It seemed crazy when carl icahn invested in lyft several months ago because, you know, it looked like uber was running away it was a winner take all market. I dont think many people think that anymore this Global Network that lyft is a part of and it seems to have some real momentum i think its an open question how uber is going to answer it its not the winner take all market a lot of people expected where you shut everybody out of the market and uber does have to act fast they are in limber they need a clear leader, have to pick the new ceo. May even be travis coming back but youre right absolutely its not a winner take all its all a question of how you value this company theres so much talk about how the valuation has been marked down amid this series of corporate scandals, lack of a ceo. When you have bookings growing 17 in a quarter, what happens folks are, obviously, reporting that some Institutional Investors have marked it down but call me when its 70 down, not 12 . Its a Company Going through a terrible scandal, uncertainty, limbo and the stock is marked down 12 so what. Still 70 billion trading at ten times its run rate of revenue which somewhere is reasonable. You have to figure out what they can do when they cut that 2 billion loss how fast are they going to be going . Who would you like to see run it jeff immelt is a great name really . We hear hes the frontrunner or one of them that would be great. I think travis can come back even though garrett says he is not coming back yes, everybody says that. But clearly what is going on is travis rethinking it now that hes saying, look, had a lot to learn. A lot to change. I think there are roots back and the worst thing for the company would be in limbo for the next six months do you think the battle between benchmark, the big investor on the board and travis gets won by travis i think its possible travis is playing brass knuckles here clearly hes going to do whatever he has to do. He has to sign off if a new ceo comes in and hasnt totally backed that person, the person is a toadie travis is still ceo even though hes not ceo in name tra travis has to be on board. A ceo coming from the outside has to be assured thats not going to happen. You have to have travis agree that if immelt is going to be ceo, hes going to be ceo. Its a very interesting situation that has to get resolved fast. Thats the key fascinating example, a case study in corporate life. Finally Investment Firm social capital files an s1 for a new business that looks to help emerging startups go public without the help of big banks or a traditional ipo. Former facebook executive behind the effort that could change the way Tech Companies go public they like to bust open old models this one looks interesting facebooks original Growth Hacker i dont want to discount anything hes planning a lot of people are comparing this to what Warren Buffett has done with Berkshire Hathaway a lot of the businesses he really looks at are mature businesses for this to work, chemothen and his team have to look at businesses that need a lot of growth and this is what reid hoffman was talking about yesterday in linked in were going to hear from reid later. Businesses that need a lot of capital to grow and compete but grouping them together in the structure, i wonder, are they going to have enough capital to deal with all the uncertainty that comes with being a tech company. Can the berkshire model work this is all about the story that he tells and whether Institutional Investors will give him a 500 million blank check to buy stuff we have a problem with the ipo market in the 1990s, Companies Used to go public with 10 million of revenue. You had the ability to invest in a much earlier stage if you are right and the company worked, a huge up side now you have to sit around waiting while the private markets capture all of the value. Whb the Company Goes Public when its completely mature thats not great for investors either how much of it is the traditional bankers versus one of their own take them public . If chamath is good at selecting the right companies and buying a nice chunk of them and nursing them along and keeping the Founding Team in place, suddenly you as a Public Market investor can have the ability to invest in those companies or a group of those companies. Almost like a public firm. These things in the past can be complete disasters so you really have to trust the guy running it berkshire would be a disaster if it werent for Warren Buffett and Charlie Munger its all a bet on the intelligence of chamath and the team there will be appetite for this. That 500 million, enough to fund ubers losses for 72 days thats the thing. 500 million in Silicon Valley right now is couch change. Its a start, but not much you talk about the old days like its a golden age. People who bought globe. Com thinking they were getting in early, too it depends what you think the purpose of the Public Market is. If the idea is to protect savings, of course, have companies go public later. Theres a lot of demand for investors that can afford to speculate in startups and smaller Stage Companies to actually do that and not have to go through the hassle of private investments and so forth so for those investors, being able to Access Companies earlier, is a positive well see where it goes good stuff today, henry. Henry bl rery blodgett, busi insider. Paul ryan set to tour a boeing plant were joined with more ahead of her exclusive interview with the House Speaker this afternoon good morning, ylan good morning. Paul ryans tax reform road show keeps getting interrupted. First by fears of a Government Shutdown and now by the potential of a debt ceiling crisis President Trump blaming ryan and his counterpart in the senate, mitch mcconnell, for failing to attach a debt ceiling increase to a v. A. Bill, as he says he requested them to do now President Trump says everything is a mess lawmakers are facing a september 29th deadline to raise that debt ceiling. Thats just a day before the deadline to keep the government running. So these are some of the political land mines facing ryan once he gets back to washington, d. C. Out here in washington state, ryan will be touring this boeing facility thats behind me. Hell be talking to employees and also be joined by boeings ceo Dennis Muellenberg as well the whole idea is to show that businesses are getting behind the possibility of giving up some of their special tax breaks or reductions in the hopes of getting the Corporate Tax rate brought down but tax reform could be a moot point if republicans cant keep the government open. Cant raise the debt ceiling if they cant do the basics of governing. Im going to be speak with speaker ryan about all of this very timely conversation, ylan when we return, what linked in executive chairman reid hoffman has to say about vul valuations, diversity and gender equality in Silicon Valley first a quick check of the markets. Up about 14 points on the dow. The s p and nasdaq about at break even fading up and down above that break even line at this hour as we approach noon on squawk alley. Well back in a moment the president flatout threatened a Government Shutdown over his border wall the story of the year so far has been distraction after distraction from policy. With profits growing the way theyre expected to in the abence of any trump agend athis market is fully supported. If it only supports about 20 of taxpayers, why is it so linked in founder reid hoffman sat down with me yesterday. Take a listen to what he had to say about diversity in Silicon Valley, valuations and the next big thing in technology that isnt being hyped enough as you get to more and more of a Network World we get to larger and larger companies. One of the things thats interesting if you contrast the top five most valuable companies now versus ten years ago, ten years ago it was more Oil Companies. Now its more Tech Companies in terms of how the whole thing works because they benefit from this global scale in a Network World. Like Oil Companies have always benefited from but as the technology companies. So then you get to all these other valuations and the question is, are they going to be one of these huge ginormous companies that benefits from a Network World. High probability than they are, theyre probably undervalued moderate probability, theyre probably valued appropriately and low probability, theyre probably overvalued. What it does mean is probably most of the valuations are probably too high because only a small number will be defined the next platforms, next Tech Companies. When that risk adjustment, i took a portfolio of 100 of them, probably 90 or something, were overvalued and 10 are undervalued or 5 are undervalued and thats the challenge for being a professional Venture Capitalist investor and so forth in trying to discern those companies. When you look at various ethnic groups, when you look at women rising up and saying, hey, the system as it works right now, whether its in public universities or in Silicon Valley, with Venture Capital isnt working for us how do you think thats likely to play out . We have more africanamericans in prison than were under slavery it is a set of things. And so you have to start with a recognition that we are not yet the meritocracy we want to be or the diverse and Inclusive Society we want to be and we should all work towards that together then you go its the right technique in order to make that work what are the right kinds of things in order to make that happen you were part of the paypal mafia. What we call people like you, elon musk, the youtube guys who came out of that really pretty Phenomenal Group of people youve also said that because of your paypal experience, even though youre in charge of making payments released investments at greylock, you havent made any because you see all the things potentially wrong with payments companies. So not yet not yet. What is the range of benefit and i guess problems that your experience has brought you the specific problem with paypal is payments is a very difficult thing. Its most of the payment infrastructure was built decades ago. Fundamental to all business. If you could build a Payment Center from scratch youd build it all kinds of different ways but getting them established is really hard. You have to get to a minimum of a billion dollars of transactions to even have an interesting payment. Its a billion dollars of transactions flowing through the system thats a lot of money. By the way, people dont want the payments to screw up they want to go with whats tried and true they want to have it very reliable and so knowing all of the ways that paypal almost died in getting its creation makes me know what the checklist of is, well, how are you on all these mine fields, and, you know, so i didnt invest in square, which is obviously a mistake i didnt invest in stripe which is obviously a mistake great founders great, Interesting Companies and it was my own ptsd from paypal be sure to check out the ft. Knox podcast coming up over the weekend. Im going to post the full conversation with reid talking about his path to get to where he is. Some of the most interesting comments he made in the debate earlier with tim oreilly, around this topic of diversity im hearing a depth in the types of solutions that people are thinking about, and the familiarity with data in Silicon Valley among titans like reid hoffman that i didnt hear a decade ago the comment about incarceration rates for africanamericans and how the conviction rates for things like Marijuana Possession are so much higher than other groups yes, hes a scholar. Almost an academic before he decided to go into business. Theres a real focus being put on some of this data and how does he bring people into the community and into companies with a diverse lens. And greylock has a lot of work to do on that front, but hes working on it. For a company that says data leads you to the best choices and outcomes, certainly youd expect them to lean heavily on it he certainly makes Startup Investing sound intimidating trying to find 5 out of 100 that are undervalued. Amazing. I certainly couldnt do it but glad we get to sit down with folks like that and get the view the ones i should have done the miss jon, well check out ft. Knox to see more check at shares of amer kb r abercrombie and fitch. Its called the netflix of emerging markets the cofounder and chairman of iflix will be joining us next leasely picker has some news on this adp battle one of the most contentious going on a new letter from bill ackman to Pershing Square saying there have been misunderstandings over the past weeks which have clouded what should have been a productive relationship from the start. This comes