Month but just shy of expectations. Facebook getting an upgrade. And Tokyo Electron is forming a 29 billion chip giant. And Chrysler Group reluctantly preparing for an ipo. But first, shares of facebook are poised to open at new alltime highs, boost being its price target to 55 a share from 38. They see facebook continuing to boost the total is even up here it is socially acceptable and they talk about even potentially being added to the s p by year end, jim. Look, this is one of those this evenin things, when i talked to bob iger at disney, everyone is talking about this term in the future, its the way to get the demographic. My trust does own it, we own it for almost a double now and not selling. Why not selling . Because this is tv of the future. Explain that. Okay, because you read all these articles about people, a big production companies, the cbss, viacoms are all searching for a way to reach younger people, a lot of advertisers searching for a way, another channel, a second way to get people. What people didnt realize is that mobile is pretty much going maybe 80 a year from now. Wow. And theres a solution on mobile for with facebook in order to be able to reach them. People are watching. When bob iger tells you everyones watching tv on my device its still fascinating because we have aols Tim Armstrong on yesterday, i reviewed the numbers. 200 billion will still be sprint on Traditional Television and about 7 billion on digital. Theres more. I think its a share take. Its a second way. I like the stocks of time warner very much. I like via come. We work for comcast. This is not against comcast. At the end of the interview with bob iger, hes talking about making making, producing for devices. The analysts who were way ahead of this and then they fell behind it, facebook has developed the right product for 1. 1 billion people tv is domestic. This is not a domestic product, its a cocacola product. In the meantime citi does say theyre talking to advisers and agencies and seeing sudden growth, which they admit they missed, including quarter to date, video ads, ads on instagram. Say it does get added to the s p by year end, is this a six handle or 55 target . On an earnings before interest, taxes depreciation, there was no ebidta before you coined it, d. A. . Isnt that how ebidta favored. David. Its expensive, its not even fully loved yet in the s p is rocket fuel. Rocket fuel. Rocket fuel actually went public on friday. That was fire eye. Both of those, wow citis target is 25 times ebidta. 25 multiple on ebidta is a big number but given the growth rate, many can justify it. Perhaps when it went public, that was not the case but now it has a new phase of growth. You remember something akin to what google had where you realize, holy cow, this is a real engine of growth. I think zuckerberg, the most abject thing he ever did was on this Conference Call say we blew this but you give me faith, we will figure it out. And they did. They did ahead of everybody. I think that google has stalled here because people feel that google hasnt had the right response. I dont know. I think googles got youtube. I dont want to bet against google. They still have a lot of the Online Market locked up. Theyre 600 billion in advertising worldwide. Lets say youre mcdonalds and you have an unsatisfactory fry. You want to be able to advertise. Suddenly can you do a worldwide carpet bomb with facebook. Worldwide. I mean, thats not viacom is still very domestic. Very much so. Time warner. Domestic. This is an International Advertising medium where people are going to say dominos is international. Dominos is using social media very quickly. Theyre trying to embed. Lets say you decided you really want to reach france, which believe it or not dominos is becoming a dominant pizza player in france. We had patty doyle on yesterday. India because of the vegetarian aspect. But with a native embedded and suddenly you have this demographic that is really watching tv on their ipad their device. I watch it on my device. Thats why bob myer comes out and says thats how people are watching it. Especially when you own espn. Do you know they get payments on watchespn . I think i pay the 5 a month. Nobody really knows what they care and nobody cares. Midamerica lacrosse game is on the high school and im paying make sure to get your dodge ball highlights. Talking about globalization and facebook, we have a deal today that certainly reflects it as well. Applied materials is going to be up in trading. Its going to be up sharply in the premarket. That company is entering into a merger of equals, essentially with Tokyo Electron of japan. Applied materials holders will own 68 of the combined companies, but theyre splitting the board of directors, splitting the ceo. But it is an interesting deal. It lab roughly 29 billion market value, if you will, when you combine both. Were not talking about a big premium, 3. 25 shares of Applied Materials for each share of Tokyo Electron. But again, 68. 32 but structured as an moe, meaning a merger of equals and incorporated in, get this, the netherlands. Why . The tax rate will come down from as much as 22 right now over time to 17 . Big synergies here. Very interesting, when you get to the heart of this, jim, youve got an industry in which there are more suppliers than customers. When you think about that. So that would argue for consolidation amongst the suppliers. While these two companies delivered a similar customers, they dont deliver the same products those customers so they do believe theyll be able to attain a great deal of synergy in the deal itself. Theyre talking about 250 million, if i recall. I got a 250 million annualized run rate by the end of the first fiscal year, 500 million by the third fiscal year, bring that tax rate down, this is all about making smaller chips and devices for smaller chips for smaller devices. Its all about tablets and smartphones, the proliferation of those devices, everything becoming more complex. Its all about antitrust. This deal with not go through. Really . This deal will not go through. Jim, theyre talking about not similar products. Overlap. Deposition. Thats tunxton. This deal will be stopped. It is a Gary Dickerson fantasy. My Charitable Fund owns this stock. Unless holder and obama are on the board of Tokyo Electron. I dont have great insight on the antitrust side. Its interesting you bring that up. The way it has been argued to me is that the overlaps are not that great. Intel and samsung. Why should you have fewer customers than you do suppliers . Thats the wrap. Qualcomm, nvidia, theyre going to look at this deal and fight this deal. I have to tell you youre going to see every single supplier go it wasnt until us airways that we were going with the antitrust thing. I think i would be furious. I would see big screen tvs go up in price. I think this deal does not go through. Very interesting. And certainly something to watch. Applied material shares are going to be up again, more efficient tax structures, synergies if in fact the deal does occur. It you wonder why they didn just do it as a purchase, youre dealing with japan, dealing with a cross bored. If it does go through, its not that easy to pull off a crossborder merger of equals and do it right. Agreed. In this case, this is supposed to be the most westernized. It would be a great deal for shareholders, if it goes through, because they can raise prices. Thats why i think the intels of the world will go to washington and say this is just a killer for our Gross Margins and its going to raise prices to the consumer. Now, the administration has turned on these issues when they hear the consumer gets hurt. Thats my takeaway of the us airways amr. I think we have to watch these deals. When we come back, Robert Shiller on where home prices are jumping the most and his take on the state of the recovery. Later on, jim mentioned satisfries. They are come hearing to post 9. And take another look at the futures. September still on track for the second best month of the year, despite this threeday losing streak. Were back in a minute. Building animatronics is all about getting things to work together. The timing, the actions, the reactions. Everything has to synch up. My expenses are no different. Receiptmatch on the business gold rewards card synchronizes your business expenses. Just shoot your Business Card receipts and theyre automatically matched up with the charges on your online statement. Im john kaplan, and im a member of a synchronized world. This is what membership is. This is what membership does. Whatswithout the thinking capitathat makes it real . . Whats a vision without the expertise to execute it. And the financing to make it grow . Whatever your goal, it can change more than your business. It can change the future. Thats why, at barclays, our ambition is to always realize yours. Our house in the middle of our street i want to get back to the key housing data out this morning. The latest s p case shiller numbers showing all 20 cities seeing monthly gains for the fourth straight month. Robert shiller is the cofounder of the shiller index. Professor, good to have you back. Good morning. My pleasure. I think the most important line, maybe you disagree, since april, all 20 cities up month to month. Are we in a Second Derivative kind of situation here . Thats an interesting point because we dont look at the Second Derivative in other financial markets, but in the Housing Market, yeah, it has this smoothy look to it. So if you start receiving it slow down, thats a reason to worry that its going to accelerate slowing down. Im not being alarmist, im just responding to your point. Right. You say so theres a reason to worry. Are you worried that we would start to see a more material slowdown . Im not worried. I think that would be a good thing. Im still worried im starting to worry more about bubble. In some cities its looking bubbly now. Las vegas, year over year, 27. 5, San Francisco, 24. 8. And even lenarz, 16 . Is that market to market or is this a nationwide phenomenon . The really dramatic cities tend to be cities that had bubbles in the recent past, california, phoenix, vegas. Its regional somewhat. The northeast is relatively mild. New york is doing nothing. Robert, im looking at kb homes headline. They say recent slowdown temporary effect but they say there is a slow down. Lenar, they come in with 14. Thats half of what i was looking for. Isnt it possible already this number that youve come up with is completely out of date . Well, its two months out of date anyway, but i you know, i think that it might be slowing down because the thing thats driving this doesnt seem to be new, real excitement about a new era. Thats what we saw eight years ago. But now its more its a rebound, Interest Rates are still maybe lower than theyll be in the year. Its that kind of thing. It doesnt really look like even though it looks very bubblying in sobubble y in bubbly in some places. Affordability has changed dramatically in the last three months. Historically when you see affordable go this way, what happens to your index . We tried Mortgage Rates in our forecasting models and they dont across as strong as you might think. The really big forecasting variable is recent price changes. So the mild slowdowns are a concern. The second biggest forecasting element is employment. Well, employment is slowly improving in this country, but its awfully slow. Plus, its a mixed picture. I dont know where home prices are going to go. This might be the beginning of a slowdown. It could be the beginning of a bubble but i dont know. Spoken like a true economist. On the one hand i know youre not a housing analyst in the classic sense, but a lot of people want to know if this continues at this pace, the slowdown of gains, is it because large scale investors are entering the market or pe investors migrating . One of our strongest cities this month was atlanta, which has not been a strong city. If you look at reality traty tr theres really a fundamental change in the Housing Market with the advent of professional investors. Part of it is just explained by a change in taste. People want to rent more so theres a new business, lets convert owneroccupied dwellings into rentals and thats happening. An Important Development to watch. Thank you for your insight on the caseshiller numbers. Robert shiller joining us from harvard university. Coming up tonight, lennars ceo. Coming up, cramers mad dash is next. And later future hall of Famer Shaquille oneal, who has become the newest owner of the nbas sacramento kings. Thats coming up in our 11 00 a. M. Hour. Back in a minute. Futures up 24. In todays markets, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Now get 200 free trades when you open an account. 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Whitehurst used to be ceo of delta, hes used to a lot of Different Things happening. This is disappointing. Piper does down grade it. I dont know what to say. We have to hear from the company a little more. Could it be a read into other parts or is it red hat . Its think its red hats problem, the way their model is set up. Greenway did this deal this morning, thats another cloud play, thats an attractive model. We saw adobe move into cloud and people love that. Lets find out more. People went went out of this because it is a momentum. Watch the stock, listen for the call. Chrysler we cant show you a stock chart now but we may be eventually be able to. Thats not something that Sergio Marchionne wants to do but we can show you some cool videos of cars. Hes in the position of trying to get the price down in one way so he can avoid going public, at the other hes going to have to actually promote an ipo. You tell me they have the rights unilaterally to be able to say we want to sell our stock to the public . They have the right if they cant agree on a price in which their stake in price would be purchased by fiat. We know the public would love this stock. Would it . I think so given where gm is trading, given the cash flow at gm. I think chrysler, there were some very good numbers in the paper this morning about how well theyre doing. I would think that the public would pay far more. This market likes the autos now. I think its a very important thing to watch. Chrysler is a stock, like the old days, people would love. Nothing says they cant reach a settlement with uaw that would prevent it from going public. Chrysler with or without an ipo has come a long way. The president doesnt want to take any credit because this was considered a bailout. There was a disaster for bond holder. They ticked off a lot of people about the rule of law. We have the opening bell just a few days away from this tuesday. Weve had some bad sessions, at least if youre long. Lets see if we can do any better today. The california teachers association. 150 years of making a difference that lasts a lifetime. [ indistinct shouting ] [ male announcer ] time and sales data. Splitsecond stats. [ indistinct shouting ] its so close to the options floor. [ indistinct shouting, bell dinging ]. Youll bust your brain box. All on thinkorswim from td ameritrade. Youre watching cnbc squawk on the street, live from the Financial Capital of the world. The opening bell set to ring in just about a minute here. Busy day shaping up, got some fed speak, the u. N. General assembly is here in new york city. The president speaks at 10 10. The white house reportedly saying theyre going to leave the deal open for potential talks with iran. Maybe thats why oil is going down. China, some pe