For the time being. Our road map with the markets under continuing pressure after logging their worst day in more than a month yesterday. Jc penney reporting a smaller than expected First Quarter loss and nordstrom reporting a better than expected firstquarter profit. The seafood lover darden selling red lobster to Golden Gate Capital for 2. 1 billion in cash. A whale tale, the money swimming into verizon. Well explain that later on. All right. Futures as you said, you saw relatively stable after the stock markets worst day in about five weeks. The dow posted the 167point drop. S p fell almost 1 and the nasdaq is now in the midst of a threesession losing streak. During our program yesterday you saw the tenyear note fall below 2. 5 for the First Time Since last october and the russell intraday hit that official correction territory, managed to claw its way out by the end of the day. A lot felt that bounce was significant. You know what, i think that dave tepper really this was a dave tepper selloff and the bonds certainly complied with what tepper was saying. On tuesday will we remember what tepper said . I dont know. Last night we were looking at teppers holdings, buying stocks that would indicate what he was saying, listen, dont be double long. Lot of hedge funds at that conference. It wasnt like there was people who were not 140 long. Saying i would get off margin, i wouldnt be levered here. Well go back to picking stocks and so much good news today, im talking nordstrom, jc penney, rack space, darden, the only one being bad was wwe which i think now i realize was a short squeeze, so you end up saying to yourself, i dont know, i mean should we be as negative as we were . Lets do some of those retail numbers. You mentioned jc penney. Smaller than expected loss. Comps 6. 2. It is the Second Quarter in a row pennys reported higher sales after nine straight quarterly declines. Nordstrom beating expectations with the firstquarter profit of 72 cents. Comps 3. 3. Dillards not bad with comps up 2. Thats a tough place to shop too. Lap customer is back. Quotes from mike alman in a gad quarter. Homes the Home Business was strong. Thats certainly contrary to everything weve been hearing. Two call outs, pvh and nike selling very well. I guess what im dancing around the travel trust i have which is macys which did not say good things about shoe, did not say good things about home, about traffic frankly. Although at the end of the month things were good, but this was a good, clean quarter. Were in the go forward phase. Congratulations mike. Who is going to stay ceo by the way. Yes. No talk any longer at all about a replacement for him saying that sales started to accelerate when the weather turned in april indicating that momentum has continued into may. Yes. Thats important. Which is important. Remember, they went from clearance back to promotion, private labels very good. I think he can resurrect it. Ive always liked mike. I know you have. You thought there was a chance it could be resurrected. I pointed out they are coming from a low base. Fair. You have that 30 straight months of bad comps. I think he refers to it as a 5 billion thats what the ackman thing, the johnson era cost him. About 5 billion. Hes had a clear out, lots of merchandise. Se forera, of course, was his initiative. A store within a store. Ill go there this weekend, go back to jc penney this weekend because i think mikes real deal and if hes got bargains that are promotion a. M. With product that i like, im going to be a buyer. Dont forget they have a third more shares, Something Else to keep in mind. Theyve got when they did when they bagged everybody. All right. Thats true. See cash flow break even. 2 billion in cash. Right. This quarter is a pull through quarter. Theres a lot of tone in the Conference Call that indicates for me, hey, walmart may be walmart, execution problems. Okay. Kohls theyre trying to do a reimage, dont have a chief marketing officer. Jc penney and nordstrom have the pulse. Nordstrom in particular. I pulled up with Blake Nordstrom not that long ago and blake was talking positive, doesnt do much tv, talking about rack and the look. These were extraordinary. The stock is up largely because of the credit card sale, but this one of the last retailers to have that inhouse. They need the money. They spent multiple billions on their omni channel, live across the street from amazon. Right. They have a very good omni channel. Rack, Fastest GrowingRetailer Division in the country and people dont talk about it much at all. No kidding. Put up a thousand of them. I had a question as well. Kohls, what to what extension is kohls contributing to pennys . Or is that notp part of this. Or target . Dont know about target. Thats going to be very important. Kohls by itself is saying listen, we are going to embark on a new journey here to fix up the stores. They need help because the stores to me, versus my kids, my kids think stores look great. I think they look the same. But kohls is not a short. Kohls could be a long. Circling back to penny, mike ullman asked about succession. Heres a brief listen as to what he said. As for succession weve made it clear that the 2014 is the go forward phase of our strategy. Were all together with this. The team is very aligned about executing that strategy. No major changes on the horizon. When i pulled up with mike he looked great, crisp, strong, forceful. Where was this mike ullman prior to his leaving . Right . Thats a good question. Second time around. Thats a good question. I think he has it in him. Look, mike is can be an inspiring guy. 117,000 jobs were saved. I think thats important. Darn right its important. Right. Its important because thats an actual portion of the country that obama does not need to go down and its not going to go down. I urge everyone to listen to a Conference Call that is really about a company that has recovered that most people thought couldnt recover. No. Customer count going up. Move on to a company that employs about 200,000 people, darden restaurants, announcing its selling its red lobster seafood chain to Golden Gate Capital for 2. 1 billion in cash. The deal addresses key issues shareholders have raised including the need to preserve the companys dividend and regain momentum at olive guard wherein samestore sales fell 5. 4 in the quarter ending january. An interesting transaction for a rare isty of reasons. 2. 1 billion sold to golden gate. They do dabble or have a presence in a number of well known names, california, pizza, zales, but their focus on technology, enterprise software. Theyre separately doing a 1. 5 billion sale leaseback with American Realty capital properties. Most aggressive reit. Buying 500 red lobsters and giving 1. 5 billion to golden gate. Golden gate separately is borrowing the money to pay 2. 1 billion to darden to own red lobster. You could kind of net them out and say theyre spending about 600 million to buy red lobster. Buy a money loser. Right. Theyll be paying rent on these locations obviously to theyre calling it a cap rate at 9. 9 . Thats what this will yield to arcp. Theres a number of plays in here whether arcp or darden. I have tried to call jeff smith from starboard this morning, i have not spoken to him. I left a message. Havent spoken to him. To see if you recall, the big activist investor saying do not spin this off, do not do anything, lets have a special meeting, and figure out what to do with you. He got 57 which was an incredibly high number to agree to call that special meeting. It ir still saying at darden they will call the meeting but this does not need a shareholder vote. And otis keeps his job. Otis keeps his job even though theyve put out a lot of stories he does too much work away, private jet, all this stuff. He keeps his job. A strong transaction for darden. The buyback will be aggressive. People tell s selling have to understand olive garden still has a great crowd. Why is that some. It tastes good and inexpensive. Why is red lobster tired some. People are tired of the oktoberfest, same old same old. People associate that food with a not great healthy for you. The deadliest catch guys when i pull up with them, they hate red lobster, say thats the price generator of everything they bring in. If you like the guys which i happen to on deadliest catch i never went back after they went back. Ive never been. The trouble when they are all together, is red lobster is not large enough, if you were to turn it around, to offset weakness in olive garden. Red lobster, geez, when i go there, its like wow. Its i just find that i want seafood that make mess lose weight, not gain weight. What gave it away, the cup of butter or the fried shrimp. The schooner . The cup of butter thats a good call. I think that chipotle where they how do you like the way they slap those guys down, but, you know crazy. Yes 75 vote against on the compensation plan. May be overcompensated but some would argue hey, theyve delivered an enormous amount of shareholder value. A surcharge on guacamole. Theyre putting food price increases ever so regina my executive producer got slammed with a 2 surcharge. Raising prices. Numbers are coming up. That stock you know what as Kevin Kingsbury pointed out on dow jones. Red lobster 2, cmg is 15 in terms of billion to market cap. Cmg has other irons in the fire and roll things out slowly. I was shocked so many voted against their pay. Was that not unbelieve smbl. Important story not getting quite enough attention. Especially paying it some right now. Thats an important story in the compensation pay. Theres going to be more. One im looking at closely well talk about it next week. I have to keep doing my work. Youre still focused on the work. I am. You always let the facts get in the way of the story which distinguishes you from so many others. Try not to rush it. Just rounding out on darden, just they are using a billion of the proceeds to retire debt and another 5 to 600 million for new share repurchase. Right. Up to 700 million in fiscal 15. Theyre also talking about g and a being steady at 5 of sales at what remains, of course, which is essentially olive garden to sort of well keep an eye on that stock. If i hear from jeff smith what he had to say as well. A rather remarkable transaction. The spinoff thing i thought was flawed. Could be a fraudulent. You were against the spinoff. Now they do the sale. Wouldnt have been bad. Regulatory filings show buff let, lobe and paulson have added those stake ps in verizon. Should you do the same. Also ahead, Electronics Arts founder, former strategy executive trip hawkin, Silicon Valley entrepreneur has a unique take on tech. Stick around to find out what were talking about. One more look at the premarket. S p on track for a down week. Know what that means. First backtoback losses since january on a weekly bases for the s p. Squawk on the street live from post nine at the nyse when we return. Shares of verizon on the rise this morning. Buffets Berkshire Hathaway dan loebs third point, paulson and company have added new stake in the dow component according to Regulatory Filings as it applies to berkshire. About 528 million and talk about how todd combs is evolving the portfolio, maybe deep near tech. I mean verizon is a yielder that has consisting cash flow that did a good deal. I know everyone is jumping all over the stock and by tuesday that will be forgotten. People say why did i pay up. What was going on. I happen to like verizon. You pay up 74 cents on a one of these statements the 13 that is filed and they sold it the next time you see it. I mean this is just stupid. Its stupid. I like verizon. Not going to hurt verizon. Ivan was the ceo. But you jump all over it because of these filings youre dumb as wood no offense to Louisiana Pacific which makes the best board there is. We point out the 13 fs are dated oftentimes. The vodafone transaction, the largest of all time, you know, great decision by them in terms of where they access the capital at the rates they did. Although they missed the bottom of it. Yes. You cant complain. You cant complain if youre verizon. You got it done. By the way theres going to be paying down debt for a while that may actually prevent them from participating in what seems to be this potential next rounds of consolidation. We get at t and direct, which i dont know youre right. Or whatever may happen. You know, also i wonder how many guys were in vodafone and end up from verizon. I dont want to draw its interesting a little. A little. Yeah. Right. But i mean look, verizon is not youre not buying salesforce. Com when youre buying verizon. How about icahn upping his apple stake. He kind of tweeted he was going to tweeting his 13 filings. Look i think apple remains an inexpensive stock. I know no one wants to hear that. They want to hear something is going to happen. Its not. Its just an inexpensive stock. 600 has proven to be resistance. Thats just wow. You cant get through that brick wall. Why is that . I dont know. The chart is telling me over and over again, the guys are telling me when is the split happening. Shortly. That will be interesting. That will do away with 600. Remember what happens is people get seven shares will probably sell three four. Not like an event you want to get ahead of. The Developers Conference is the beginning of june an rumors that somehow if there is news to be had it might come then. Well see. I tend to not like the situations where you guys celebrating they got a deal and then come in on monday and we didnt see a deal. Some people must know something and others dont. Thats not good disclosure just for the record. When we come back, jims mad dash and count down to the opening bell. The last one of this week. On monday an entire you do not want to police. An exclusive with the ceo of pepsico indra nooyi. Sara will have that. Another look at futures, more squawk on the street from the nyse is straight ahead. But what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. All right. Nine minutes before the last trading session of the week. Weve got two shockers. May in the works here. Two shockers. Start with rack space. Okay. Rack space on the call on may 12th and its like wow, its good. The cash flow is real good, starting to get better and jpmorgan said look, said listen, its time to buy the 15th. Buy rack space its overweight. Bingo. Theyre for sale. Come out and say theyve gotten inbound inquiries. Morgan stanley has been hired and now theyre considering selling themselves. I find this shocking. I mean did it really all happen within the quarter . Could they not mention on the Conference Call. How does it work . Well how is that possible . Well they make a decision to put themselves up for sale essentially is what they more or less have done. Just announcing the quarter. Is that right . The timing is a bit strange, i agree. I dont know when the inbound inquiries came in but i agree. Talking about going to a conference i like rackspace intelligent cloud whats it worth . Cisco is moving in. I think that cisco newly newly not energized. Rejuvenated. Cisco, i believe in you now. But emc is coming in. I was shocked at this. Shocked. I mean theres people short rackspace up the whatzoo. Theyre covering now. Saying like were 60 plus thats wrong little high the company does have intelligent cloud and everybody thought they could be amazon but they have value added. It shocked me. From up 20 to down i dont even know, wwe, certainly a body slam. Benchmark security telling you its going to happen two all my hulk maniacs take your vitamins and youll never go wrong. You better lean on the hulkster. The money from the new deal with nbc is disappointing. In other words, they renewed, what nbc already had. Domestic tv deal spoo but they kept it. They didnt find anybody else an didnt get necessarily a higher price. It was less than expected. The key is the costs having to do with the new network, the wwe network, what theyre going to get to in terms of operating income before appreciation and amortization given their cost structure which seems to be going like this. Right. I think its just deferred. I think its not destroyed. I think theres value here. I think this is an over react they feel very theres value here. Value right there. Im just kidding. Base camp two is always whatever. I dont think its so bad. You dont . I think they look there were do you have a thesis on why its not so bad . They still have a road pap. It road map. Its going to take longer. To get to the 125 million theyre looking for, they need to get to over 2 million subs instead of their credibility is completely shot. I hear you. But at nine bucks, i dont know. Waiting for eight months to see how they do, it might pay. This is a wild company by the way. Its been a wild trader. And its like electronic arts. 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