Is valued at almost 8 billion but the question everyone is asking is it worth it. Well talk to the ceo after the opening trade. And facebook is jumping into a new arena, Virtual Reality, they are buying oculusvr in a deal worth about 2 billion. So what can virtual do for social . Well try to find out. Blackrock Ceo Larry Fink sounding the alarm about the recent popularity of dividends and buybacks. In a letter this morning well tell you exactly what he had to say. First up, though, King Digital Entertainment set to debut on the New York Stock Exchange, the maker of candy crush saga saw its ipo at 22. 50 a share, gives it a valuation of about 7 billion and ticker will be king and well speak to the ceo right after the companys first trade this morning over at post eight. Jim, you have said you like the way the deals structured so far. It is not an expensive stock. Those who compare it to zynga, zynga was trading at 58 times earnings. This is sa very well multiple stock versus that. Now, where they are similar is and im using renaissance capital, i think they do the best ipo Research Point out in terms of bare insights, monthly unique payers only 4 of user base but fell 7 in the Fourth Quarter of 2013. On candy or all games . For their for their games. For the games. But candy car saga was 78 of fourth q bookings. Lets say you were buying a band, okay . Lets say you were barry gordy or youre ed sullivan clive davis. Wow. Can i be clive davis . The coolest man in the room. I want to know are there more hits. When you sit with zelnick who understands the hit business at taketwo and you recognize how well hes done and the valuation is one times sales i question whether this company has that second hit. Although activision and Electronic Arts i believe trade at revenue multiples that may be a bit higher than this may go out at, well see where it actually opens today, where its been priced. You know, whats the difference, then, when you look at a company like this which at least is trying to develop new games, of course, new hits. And more established names such as Electronic Arts which to be fair relies on hits as well and new franchises or refreshing the old franchises. We knew that zynga had to keep buying, they were overpaying once they got the money. You are making a bet on the gentleman were going to interview. Youre making a bet that they have dna which allows them to be able to come up with game after game after game. I just know that people at home are saying 7 billion . No. 7 billion this is the beginning of the end of the ipo market again. That is the subtext. The one thing i would point out is that, geez, you know, the company is not being priced at a wild high multiple. Its just not. But at the same time i know how people viewing this are saying, i knew it was going to happen i knew it had to end and it ended with king vision. Yeah, that an easy right . Its an easy conclusion to make. The companys ten years old and although threequarters of the revenue comes from candy crush saga, they have 180 games and three of them if you put candy together with pet rescue and farm heroes, thats 95 of revenue. So, well ask them a lot about farm heroes is that as you said the next step in the diversification of revenue. Were worried about it generates a majority of its revenue from a small percentage of its user base, how do you get more users to pay. And basically, well be able to do that the stock had a very big move. I dont want to draw any conclusions that are larger exteistential about how this de marks the end because it would if it were trading at where zynga came. Its just not. I feel that people are going to say 7 billion, oculus, facebook, whatsapp, the decline in these high Growth Stocks that goes on every day. Id love to stop and talk about it briefly and ive only been back this morning and made my phone calls as i tried to and thats the theme that came up from a number of the people ive been talking about, Growth Stocks have been crushed since you went to italy, values are hanging in there. You dont know the pain. Thank you for saying that. Im telling you what im hearing this morning especially on the short side were getting our faces ripped off, too, whats been going on here. And by the way, if growth is suddenly being penalized or the multiples are starti ining to c down, it cant be a good thing for new ipos. They are selling workday and veeva. Selling netflix. Priceline. Selling tesla and theyre circling into these deals where q2, paylocity. Amber road. You may have an amber road on the plane home. But amber these are all, like, data, you know, look, i dont want to generalize too much, but software as a service. So you sell the ones on a day where google is cutting prices on that. You sell the ones that are not giving you any performance and you get into the companies that are giving you a pop and its worth it if you are a momentum guy. Ibm was up six points yesterday. What does that say . I dont know. It says weve got a huge cloud business. Weve got a Huge Software as a service business. And were not a growth company. But people just like they like hewlettpackard look at microsoft. You talked about all these last night. You talked about cat. Caterpillar. Schlumberger, celgene. This is incredible. Celgene has lost 32 straight points its now gotten to where its 12 times 2013 earnings but it was perceived as junk, right . Because what people wanted to be in is bristolmyers and now its come down, too, one of the things going on you got a lot of biotechs that are Development Stage biotechs. People are selling the celgene for the biotechs that dont have actual pipe. Theyre circling back here. I dont know if we have the iwn, the Ishares Russell value versus growth over the last week, but if this keeps up and you start to see multiple compression on some of the growth names isnt that going to put a lid on the ipo market to a certain extent . Actually i would theres the ishare value, one year. Not what i was looking for but let me go let me look at it another way. You need the ipo window to close before the other stocks can go back up. Right. This is just a shuffling of shareholder base. They are leaving the momentum names and not going to ibm. They dont do that. What theyre doing is going to ipos. You need the ipo window to close which is why lets go all the way back to king digital. There are a number of people at hedge funds i talked to saying i hope king digital fails. I hope the ipo window closes. I hope drop box and box dont get to go because we need to have the concurs and the workdays snap back. Right. Look at splunk. I know you look at splunk all the time. All the time. Its the key to the market. Thats his nickname around here, hey, splunk. Look at yelp, holy cow. Priceline. Look at facebook, you know, i mean its dr. Ocularis here. Its performance has been good but lately its a clunker and not a splunker. They are horrendous. But youve been away, its been going on day offer day after day. You dont want to say holy cow, look at that. Maybe its running its course. Yep. But the plug powers of the world thats what people are. They are in plug power. Theyre in the most frothy and theyre also in the least frothy, hewlettpackard, ibm, microsoft. Hewlett almost hitting a new high recently. Not that far from its alltime high. Ibm may not have Revenue Growth this year but it has great cash flow. Warren buffett stuck by it. Cash flows are king not king digital thesis is running through my head. I mentioned facebook lets move on to that, facebook strikes another deal the social network acquiring oculusvr, 2 billion in cash and stock is the consideration. Last night on a Conference Call discussing the deal, Facebook Ceo Mark Zuckerberg spoke about how oculus positions his company for the future. Mobile is the platform of today and now were starting to also get ready for the platforms of tomorrow. To me by far the most exciting future platform is around vision or modifying what you see to create augmentative and immersive experiences, its a longterm debt on the future of computer. I believe oculus can be one of the platforms of the future. Wow. Just buying whatever appeals to them. In any way regardless of what the future thats the knock. Spending like a sailor, my shiny objections. Immersive gaming is the first big opportunity. Now, i mean, this is im quoting from the man. Okay. Going to make me sick to my stomach. The opposite. So, you dont. Its dramamine, its kind of go pro meets dramamine. Still. Somebody said its a gamestop you strap on your face, i think thats what josh brown said. Its one of the ugliest thing ive ever seen. And youd be arrested the moment you walked out with it. If you look at youtube 2006, right . Google bought youtube. 1. 6 billion who the heck knew what it was about. Its probably worth 15 times that now . This is google, facebook is late to mobile and were trusting them to get this right . Google did buy motorola which hasnt worked out as well. Like joey brown, nobodys perfect, partner. No. Bear with me, okay . Now, you are microsoft. All we ever wanted microsoft to do was to go further with the xbox, it has the most momentum of any product. Do you know its only now that xbox has been saying brought to you by microsoft . All of their money has been spent on windows. Windows everyone hates windows. Your kids hate windows your kids will hate windows. Im making a promise that your kids will hate windows. But microsoft, dr. Ocularis which is a reference to a wild wild west show when i was younger. Yep. If they did it two years ago theyll own gaming for good. They owned connect dos but it turned out apple bought connect but this is what you want versus what larry fink says is which, you know, he doesnt Want Companies staying in there and buying back. This company is thinking. Ill make the point ive made a number of Times Companies like facebook and google have dual class share structures that means no activists and well get to larry fink in a minute will ever get to be involved and they can do whatever they want and they can think about the long term and completely dismiss those who might say, what are you doing . Worrying about what might be shortterm but they are profitable. They are. Facebooks profitable. The dual class structures do enable them to make these kind of decisions without worrying about a chorus of naysayers. Lets fill people in. Too Many Companies have cut Capital Expenditure and increased debt to boost dividends and increase share buybacks when done for the wrong reasons at the expense of Capital Investment and can gem diz a companys ability to generate sustainable longterm returns. Hes saying think for the long material. Your point is thats exactly what mark is doing. Yes. This note is basically saying this whole idea of cutting back on capx in order to broost yoo stock price is shortterm thinking. I think what zuckerberg is saying five years from now this could be the way. Ill place a number of bets. Im not going to be like steve balmer who did two 26. I am going to be better than ballmer. And i think that what larry fink is saying thats how you have to think. You have to think like zuckerberg. Im going to focus on investing in continued growth instead of generating free cash and returning it in the form of dividends. They are controlled companies. Rupert murdoch controls fox. Red stone controls cbs and viacom. Very interesting. Look viacom has been an amazing stock. Time warner has been amazing. Right. Now, time warner not controlled. Yeah, true. There is that point to be made that there are companies that are not subject to any pressure from activism that have chosen to return capital to shareholders in that way and their stocks have done extraordinarily well for fairly long periods now. When we come back the home of candy crush goes public. Well talk about the ceo of king digital at post eight behind us and stick around to see how the stock opens for trading. Find out what manny chirirco told jim. A lot more squawk on the street is back in a minute. Pvh reporting a quarterly profit of 1. 43 a share above estimates but the apparel retailer says its being cautious in its Current Quarter outlook. Heres what pvh ceo and chairman manny chrico told jim on mad money. We continue to be optimistic that once the weather breaks well see pentup demand and an uptick in business but right now as were working our way through it, it continues to be uneven. The trends we saw in december and january have continued into february and march. Fair enough. Its forcing us to be more conservative in our guidance particularly in the first quarter. Talking about some 4x headwinds but its not impacting the stock this morning. What happened in that interview, he said, listen, were turning the corner. Goldman is saying they have 10 in earnings power. Lets say they do 8 its a double digit grower. It can go up substantially from here. This is a company that was relly hurt by an acquisition that they made in order to get all the calvin klein brands and warneco hurt manny and his team. The jeans businesses is turning up all over the world and this stocks needs to be bought. I wonder if they are benefiting from five today which comps came positive even after they warned negative. Some analysts are saying if thats the playbook, maybe its time to get long exposurexposur. I wont disagree. The five below Conference Call was uniquely, listen, when it was sunny out we did well and when it wasnt, we didnt. I know we shouldnt blame the weather but, boy, they did they all want to blame the weather but there are those who say they are desperately clinging to the one excuse they still have instead of recognizing that retail has changed in a fundamental way and it aint never coming back. I disagree with you. I didnt say it was my opinion. I said it was an opinion. You want to see my receipts at my Mexican Restaurant when its cold out . I might as well just shut down. Im telling you that right now, between that and the high price of guacamole. Its avocado related. When the weathers nice, cha king. Five will open up 17 . I think five is back. Weve got the big things around us. Give me some alka zelts seltzer. Do you recognize these guys . Pet rescue. Farm heroes. Have you played popup pear or bubble witch . I played scrabble. Scrabble. Okay. Obviously this is what the tone is going to be down here at the floor today. Thats called marketing. Look, i think that this is a branding event. And there will be people playing this game not unlike omg pop without a doubt. Ipos are a very big branding event. Thats one of the selling points that the nyse uses to say, hey, come over here. Wouldnt it be great if the ceo popped out of one of those and came to the set . That would be remarkable. Not expensive stock. Its not expensive. The market cap is big but you got to price it somewhere, david. You got to price it somewhere and well see if they priced it well. Youre critcriticized either wa. Thats what the box ceo said. And the box ceo, he must know, he graduated out of middle school a couple days ago. Did he . Hes been around. I talked a number of makeup artists he wasnt alive during he wasnt alive during the dotcom public. I need a ceo right now who is embryonic. The oculus founders 21. Yeah, now youre talking. Youre talking youth. Well get jims mmad dash. Because ive been acting like like [ bagpipes play ] make it happen with fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. Tastes like candy candy can candy tastes like candy candy candy all right. Were a few minutes away from the opening bell. Jim, you were threatening to give a beatdown to a couple of these plush toys over there. Theyre annoying the heck out of me and i got to tell you something, i think i could take them. Even at 59. I could give them a beatdown. You, you, oh, yeah, yeah, you look oh, yeah, youre fine. Carl and i are right behind you if theres any trouble. Dont you worry. Go right into that crowd. Its a Richard Sherman that thing. Its a kids nice game. Lets talk about sirius satellite. While you were away you said a lot of stocks have given up the ghost and this one has been horrendous ever since they walked away. Ever since liberty said were no longer to acquire it, right. In fact, well sell down a bit sell into a buyback thats turned back on thats big and significant. Yes. I agree with the barclays call. I think enough is enough. The cash flows great. Its a story based on new cars. Its a wellrun company. I wanted the liberty deal because i wanted the liberty stock. Its overdone to the downside. I like it. Right. And liberty did, again, move into tracking stocks but paving the way for what could be a reverse morris trust which was the original thought perhaps down the road yet again for sirius. But the business its good. You think its okay . Thats the point. At this point you want to own the business and those who are throwing it away dont seem to understand that it is a cash flow story. And its bountiful. The barclays call is right. You could give that guy a very big black eye because hes got some very big eyes. I dont like the way hes hooking at me. Who does he think he is . I dont know. Look at that eye. Thats a big target. Theyre coming to wall street, you see them right here at the nyse and king digital making its stock market debut. Making the first trade and well have the ceo as well. The opening bell is coming up. [ male announcer ] what if a Small Company became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. That is the candy crush theme. Youre watching cnbc squawk on the street live from the Financial Capital of the world. The opening bell in about 90 seconds and, of course, a big day down here. Where the s p begins the morning within 1 of the alltime intraday high. But, of course, all the pictures today, jim, and david, are going to be about king digital. The ipo at post eight and whether or not investors, traders feel this has the color, the