Transcripts For CNBC Squawk On The Street 20150507 : vimarsa

CNBC Squawk On The Street May 7, 2015

German bund got to nearly 80 basis points. Oil relatively flat. The tenyear hit 2. 30. The rising vix, some of these yields went bananas around 6 00 a. M. Eastern. Because of the percentages and how low they are in germany, you have a little change in germany, its a dramatic rate increases. People are losing fortunes. Now its 2 trillion in two weeks. When people say why are some of our stocks down look at the pain. People believe negative rates would get more negative even though there certainly was this risk. Yes. That was just dead wrong. We are seeing one of the things i think is just shocking to me is this dollar. The consensus was the dollar was in parity all these things you heard. Dollar you better get to europe quickly. Im booking that amalfi coast trip now we ought to hear about alibaba. They turned the s p futures. Lets do that. Alibaba shares are up in the premarket after the companys earnings did beat expectations. Also the Company Announcing its current chief operating officer will become ceo in a few days from now. Nixon joining us from hong kong is daniel zhang. We had a chance to catch up back in november during singles day, which was something you came up with any number of years ago, mr. Zhang. Let me start off on the quarter itself. Specifically the mobile as your gross merchandise value, but the take rate therefore, overall, coming down for the company because people dont buy as many or read as many ads on their mobile device. Is that the trend that we can expect from alibaba into the future . No. We experience a solid mobile transition in the past year. You can see actually in the last quarter our mobile take away went down a little bit because of a slack season because of chinese new year. We recorded a quarter over quarter growth about 40 while now 50 , 51 of our revenue from mobile. We recorded 45 year over year gross. And today 40 of our revenue of our mobile only 12 of revenue from mobile. So we made substantial progress. We think we will still continue it in the coming quarters. Right. The transition to mobile will continue, i would assume. I guess the question is what do you see then as the ultimate take rate on the revenue on the gnv brought in given more and more of it will be coming from mobile . Today more and more consumers in china use mobile for online shopping. We continue to increase and we are confident that we can approach that on pc and even higher. There was a belief heading into your quarter that alibaba is cracking down on counterfeiting on the site may have depressed advertising and or overall gmv. Was that the case . We always have zero tolerance policy on counterfeit products and spend resources to fight counterfeit. Counterfeit is an issue to those companies doing similar business. We have extensive experiments against counterfeiting and we will continue to do so because this is not only benefit for the customers, but benefit for this platform. Daniel, theres been headlines this morning about a hiring freeze and comments about a wouldbe hiring freeze being taken out of context. What is the companys position on cost discipline when it comes to hiring folks . Well i think the comment on the pollhong kong policy in the new year is in the market. We will adopt a zero policy in the coming year. This is to improve opt rating efficiency like what we did three years ago. We did the same thing, we get a very productive results. Its jim cramer. When i look at whats going on in your country, i think that consumption domestically is very strong and getting stronger. We in this country think all thats happening in china is constant deceleration. Where do you see it because youve got a book of businesses worldwide. From our platform we can observe that consumer demand is huge. Today the new trend is that people like high quality foreign products from other countries. So thats why we start our Initiative One year ago. We will help the suppliers all over the world to sell their products through our platform to chinese consumers. Daniel are you seeing more competition in your home market in china, particularly from jd. Com . Competition always exists. What we think is we have to focus on i coughed. I thought maybe my cough was that competition question. That threw everybody off. It is still a long way to hong kong. We are trying to reestablish the connection. The 40 gmv number was above what had been anticipated. The stock has been coming down sharply in recent weeks because people thought it would be potentially weaker than it was. Mobile now as daniel said 51 . Daniel, we reestablished connection with you. Why dont you continue that answer. We lost you for a moment. When i asked you about competition. Go ahead. Okay. As i said competition always exists, but we dont we always think about competition. We think how to create value for our customers, for our merchants. If we continue providing value for the participants, we will continue our growth. What are you going to do differently as ceo than what was done by jonathan lu the person you will take over from . Well first of all i have to say that jonathan did a great job in the past two years as ceo. He lead the company a series of very successful mobile transition. Now they hand it over to me and i will continue to lead the team the Younger Generation, to lead the company to the next journey. I think the focus will be first we have to continue to operate our equal system and extend our equal system. Second we have to continue to pursuing the opportunity in new areas, in new businesses. Last one, most important thing is we have to develop our people, our young generations. Not only on the leadership level but also in all levels in the company. Thats the foundation that we can continue our growth in the future. Weve been joking its a good day for folks born after 1970. This is where they will command the troops. Can you explain this dynamic, at least in china among, for leaders born after 1970 like yourself . No, you cannot. We just lost connection once again. Thats what happens with satellites trying to work halfway across the world. End of the cultural rovell ugs. Revolution. I think he was born 1972. Jonathan lu is only 45. We are not talking about an old Leadership Team there to begin with. Its not the communist party causing it. Is the communist party disrupting our transmission . I think weve got daniel back yet again. You heard carls question. Feel free to answer. Alibaba has a commission we want to live for 112 years. That is a long journey. We need young generation to take over the leadership and lead the company to the next part p of the journey. Now is the right time for us to do this. We are in a good condition, good finance condition. That is the right time for us to upgrade. Not only upgrade our business but also upgrade our Business Team on the leadership. Daniel zhang, we appreciate you being with us. We apologize for the interruptions there in our transmission, but are glad to have had a chance to speak with you. Daniel zhang incoming ceo of alibaba after the Company Reported better than expected numbers that had the stock up sharply this morning. This stock was pronounced dead by technicians and people were shorting it thinking it had to be a tell and things were weaker. That was not the case. Again, youre talking about down from 100 points. 40 overall year over year growth in gmv is significant. Of course they do have china. Growth there you asked the question about consumption and they are benefitting from that. The key consideration has been as you move more and more people to mobile your take rate of the overall number goes down because its simply a more difficult to act on an ad. We know this from google. Yes. You go back over to trip advisor reported last night. They are working very well on mobile. Whats incredible to me you would judge this man, hes an operator. He is not trying to get the stouk stock up. I had time with him over there in november. This has been in the works some time. His taking over as ceo. Its not sudden or based on this latest quarter or anything like that. This seems to be what jack ma likes to do. Jack ma is chairman. Ive got joe tsai as executive vice chairman and jonathan lu. This guy running the business. As jack says in his letter i believe within five years by 2019 alibaba will become the First Company in the world to facilitate gmv over 1 trillion. Fiveyear plans are all the rage in china. A thousand orders. Boom. This is a remarkable company. 80 coming in this morning. Im getting a lot of different messages about turning the market around. Those who follow this particular part of commerce are heartened. This social segment taking it on the chin no longer. I dont know whether fed chief yellen will be happy with this. Its unclear. Shares of yahoo will be up. Yes. What is that word when you back out, the new alibaba . Minus. Minus something. Minus something. Looks like negative Interest Rates. If you own yahoo, you get your statement and it says youre down you have 1,000 shares youre down 2,000 . Minus 2,000. She may get a break there. Weve got more to get to this morning, including reaction from tesla. Keurig Green Mountain. Whole foods coceo walter robb will join us. Take another look at futures. We mentioned rising rates around the globe. Claims came in around 2. 65. Fourweek average is the lowest since november 2000. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. Tesla shares falling despite better than expected quarterly results. The electric automaker ramping up spending on new products. Last night on the Conference Call elon musk says response to his new Battery Storage systems has been overwhelming. We have 2,500 requests from companies that want to distribute it and install the power pack. We cant even respond to them. We have to triage our response to those who want to be a distributor. Its like crazy off the hook. Crazy off the hook. All that said Morgan Stanley today says q1 cash burn was eyewatering. Musk makes the business exciting. He is entertaining as all getout. A lot of the conversation did go right to battery. If you go to the site talking about batteries being a worldwide phenomenon. Its an interesting thing thats going to come out. People are making this story into much more of a battery story. Now, most of the commentary i read, people said why is the stock down if everything was better than expected. Yes, everything was better than expected. It is because of the eyewatering cash firm its 550 million. The Morgan Stanley guy has an overweight on it. When you read that analysts say the Company Needs to raise money. Musk is saying by the Fourth Quarter theyll be fine. He is throwing cold water on it again. 400 basis point improvement margin. One of the funniest moments was when he said hope apple comes into this business we are not losing engineers to apple. We are taking engineers away from apple. Again, entertainment, but disquieting cash position says jpmorgan. 1 billion in outflow in the last two quarters is not necessarily what you get from ford motor. Your take in general is who knows . Cult status. Did anything make you think there is more ground to stand on here . Yes. Because i think that what would happen is they did raise a lot of capital, it would answer a lot of the objections to the bears. Theres two sorts of bears here. There are the bears who say his Balance Sheet cant sustain this and bears that say he is allege lid phony. I think the Balance Sheet issue will be controlling. They have demand for this car. There is demand. There is demand for this battery. People analyze the granularity, my friend going over the deposits. There are real issues here. If they were raise 1. 5 billion in this market if they did german bond offering, you would be hard pressed. They should issue a gigantic convertible bond. I know he is going to listen to me. Always. He listens very closely to you. I saw him at the vanity fair party. He was talking to tony romo about the big trade. Ing thats right. Well get cramers mad dash and count down to the opening bell in a moment. Stay tuned for our live interview with the coceo of whole foods walter robb. One more look at the premarket trying to recover after a wild morning in fixed income all around the world. Here at td ameritrade, they work hard. Wow, that was random. Random . No its all about understanding patterns like the mail guy at 3 12 every day or jerry, getting dumped every third tuesday. This happens every third tuesday. We have Pattern Recognition Technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. For all the confidence you need. Td ameritrade. You got this. At chase, we celebrate Small Businesses every day through programs like mission main street grants. Last years grant recipients are achieving amazing things. Carving a name for myself and creating local jobs. Creating more programs for these little bookworms. Bringing a taste of louisiana to the world. At chase, were proud to support our grant recipients and Small Businesses like yours. So you can take the next big step. Are. Time for cramers mad dash. Qorvo delivers a terrific quarter. This was the best semiconductor we have. They put it together and have Gross Margins going higher. They are intellectual power behind a lot of the cell phones, transmitters. What matters here qualcomm made you feel badly about cell phones. They should make you feel well. They are big sellers into china. Youre not allowed to say if you are a supplier to china. You cant say wow, we are doing well. They emphasize china on the Conference Call. When you see the kind of business they are doing, you start questioning whether this was the peak and whether you arent going to get another move in nxpi semiconductor, sky Work Solutions and qorvo. Selling into apple china is the key. Those are the two. Those are the best markets. I felt good. This was a great Conference Call. Typically you dont expect Gross Margins of this kind of product to go up. These two companies combined taking a lot of costs out. This had been the goto name for a lot of people. Obviously had a big run. Seasonably, this is when you are supposed to sell these stocks. That was playing out. This morning the script does not go with the negative thesis. All right. So many other stocks to get to this morning. Weve got the opening bell a live interview with whole foods coceo walter robb. Stay with us. My name is jamir dixon and im a locate and Mark Fieldman for pg e. I protect people. I protect our community. I protect our environment. 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And if me driving that truck means that somebody gets to go home safer, because now they know about 811, then ill drive it every day of the week. Together, were building a better california. The pursuit of healthier. It begins from the second were born. After all, healthier doesnt happen all by itself. It needs to be earned. Every day. Using wellness to keep away illness. And believing that a single life can be made better by millions of others. Healthier takes somebody who can power modern health care. By connecting every single part of it. For as the world keeps on searching for healthier. Were here to make healthier happen. Optum. Healthier is here. You are watching cnbc squawk on the street. Well get the opening bell in 90 seconds. Busy morning as we are watching a selloff in bonds all around the world. Then whole foods, well talk to coceo walter robb in a moment. Down 13 along with sprouts and a bunch of others. There is a phrase just really i think just frightened people. Comparable store sales averaged just 2. 5 . Thats up from 2. 4 during the last nine weeks of q 2. That is freaking people out. Second thing they announced a new concept. People said wait a second are things so bad you need to do a new concept now . When we speak with walter woo hell get a better sense, is there an overreaction here . I think people felt they had gotten back on their game and now they are off the game and there is so much competition. Comps in this space are maybe a little more volatile than other restaurant food type comps. We were used to this was Neiman Marcus nordstrom, they can charge what they want. But kroger beat them costco exgasoline. So people are concerned this is a defensive slowing and a change because of the competition. Well talk to walter robb in a moment. Opening bell s p at the top of your screen. Global Technology Subscription Council Holding its Investor Conference here today. At the nasdaq adapt immune therapeutics celebrating its ipo which happened yesterday. I guess well keep our eye on alibaba up 10 plus premarket. Some may be short covering. Expectations were not high going into the quarter, at least in terms of this reporting. The stock had come down sharply, as you can see right there it is up over 10 . 40 51 is from mobile. Take rate from mobile not that bad. According to those who f

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