Happening in the markets. The shanghai had a very good day and machine orders, not particularly strong, jim. May have pressured that mark down as much as 1 . Tenyear note yield on all this news about selling by Central Banks around the world to a certain extent. It is hanging in there 2 . The chinese continue to do some selling. Crude has been much of the story this week when it comes to our equity markets and even the highyield market. It is creeping in there. Thats some new highs. We havent seen edging towards that 50 level in quite some time. Lets get to our road map this morning. It starts with dell and private equity firms silver lake partners. They are in talks to buy data storage link company, emc. I will have details. A strongly worded response to millers rejection of its latest offer. Alibaba is out with a company update. They are launching a site called alibaba defined, trying to clarify whats going on at the company for those that dont know it as well as they would like. It includes a long letter from the chairman. Now, lets get to a potential deal that is being worked on that could be, i would rg argue would be one of the largest leverage buyouts at this time. Emc and dell are in talks for a deal under which dell would acquire emc at a price above 27 a share. However, i dont have any more details on price, except it would be above 27 a share. It would be a purchase of the entire company. In other words, not a public not a way to use to get dell public again by issuing shares but essentially a leverage buy kro buyout counting on them to purchase a huge stake of it. There would be more of a stub of that left out. It becomes difficult given the conversations i can have. I am not exactly sure how that would work. There is currently a 17 public stub of vm ware. I know that dell wants to maintain control of vm ware. It would not be a wholesale sale of the vm ware stake or a spin to shareholders. A key to why they want to own this is to own vmware. Dell was a leverage buyout. Still has an eye norm must amount of debt, 11 million on its balance sheet. The cost of the lease to buy emc, 50 billion. There is a lot of cash there. With we are talking about them having to access the debt market for somebody near 40 billion. You might be right to ask, how can they get that done . Understanding it would not be just a highyield offering. There is a way to do hybrid Investment Grade high yield. This is something that comes into play when they access that Capital Markets. They already are having those talks with banks about that financing. I am told this deal could be as little as one week away. Although, the credit markets have to come into play here even with a hybrid structure. Im not sure how that, would. Investment grade and high yield. We are talking about a huge number. They borrow enormous amounts. They buy emc. They maintain control of vmware and that is the deal at least above 27 a share. Im told price is largely dealt with, i dont know what it is. The research is saying the deal is too big. This is against the grain of every piece of research i have read. No one thinks it can be done unless they sell vmware. The worth is very little versus vmware. This is a way for dell to boost its value if they can get it. It is no tt a way for dell t go public or a wholesale spin so they can dpet tget the storage business. David, it is so big. I am calling it an lpo. It is not necessarily by a private equity firm. It is by a private Leverage Company in dell. I have to admit. It is curious in some ways. They believe they can get it done. They have been talking for months. This is not something that has just popped up. It was reported by the wall street journal and bloomberg, which brought it to our attention. We are giving you a lot more details. All the reports are sketchy. I have been saying, listen, until you have this story, i dont believe it. It is too big. It is enormous, jim. It does appear to be something they believe they can get done. It will change the valuations of both companies. It could be as little as a week away in terms of a deal. Whether you get to the finish line and all the different things, there doesnt appear to be an interloper with emc. They had talks about hewlettpackard. They are occupied with their own split and cant do that deal i dont know if there are other names that come to mind. Vmware has been terrific. Being Virtual Software thats very high growth. Emc being storage that is literally being challenged by the company that came public yesterday. There is emcs disc. It is an oldfashioned technology. Remember, it used to be the greatest growth company, challenged ibm, challenged hewlettpackard. We have admitted defeat. We cant grow. To get vmware, dell looks like a company that has much higher growth. Listen to Carly Fiorina and this whole debate. Dell was doing a little better than we thought. Couldnt michael dell have a company that is much better off than we realized and it is private. We know that sales of pcs have been a struggle to a certain extent. Everything i have heard about the performance has been extraordinarily positive. They have already taken a lot of money out. It is generating Free Cash Flow or cash flow significantly. So their investment, both dell and the server has gone up dramatically in value since they took it private, which means carl icahn was right. They got it too cheap. He tried fighting against it. It was two years ago that they had the shareholder vote an went tlon way. This would dramatically increase the size of dell. It would make it such a better company. Vmware is such a fast growing company. It would be a huge tax hit. This is no tax hit. And emc strategy has been to keep it together and dells would be as well. It might not be an 83 ownership that comes along with emc or that they maintain. They will maintain control is what i am told by people familiar with what is happening. Great reporting, huge. No one knew. When i look at every single thing i read, it made me think the journal was wrong, bloomberg was wrong. It makes a ton of sense if michael dell is doing much better. You and i both know from our sources, michael dell, it needed to be private to take the action he did. He is an honorable good man. He could not take the action as a public company. Well see where it goes from here, jim. I do come back to those credit markets. There has been no deals. They have been uncooperative lately. This is a number thats incredible. It is not all high yield. How that works, again, i have to tell you, maybe some people out there who are listening will be able to explain how they are going to be there for this hybrid approach. Thats the way it is explained to me. You couldnt get 40 billion done in high yield. Not in this market. I did feel there had to be some end game for emc. And joe tucci, the ceo, who was supposed to step down and didnt and they havent named a replacement. Fabulous reporting. Thank you z. Anheuserbusch was responding to sab millers rejection of its 104 million takeover offer. The second largest brewer lacks credibility. In its response, they said, notwithstanding our good faith efforts, the board of sabmiller has refused to meaningfully engage with us. Other proposal creates significant value for everybody. What are the keys here that needs to be said . Yesterday, because there was so much going on, this he say it is 42. 15. It really is not. 42 is an abi stock with a little bit of cash. All shareholders will have that available to them. That brings the overall value of the deal down. They keep wanting to somehow say it is 42. 15. They expect most will ex foekt take the cash. The Santo Domingo family will take the stock because of their need for a taxfree transaction. They could go up, jim. There is still room to make it really worth 42. 15 on a blended value. The difference between the two is roughly 10 . Abis share prices moved up. Well see where it goes from here. The abi side is trying to make it clear that they dont have that much money left. I cant figure out whether thats simply trying to scare investors and share hoholders o s. A. B. To pressure management. Thats the game. Everything they say is designed to get s. A. B. Share holders to come to the Management Board and say, what are you guys doing . Sell, sell, sell. This is the time. Right now, they are saying no and the clock is ticking. Lets overlay what constellation had to say. A fantastic call. Constellation is the Fastest Growing beer company in the world. They are talking about a stagnant category except for them. They are growing dramatically. This deal has to be done. These companies have no growth whatsoever. The only way they can do it is appeal to the shareholders. This is the way tobacco was at one point. I cannot believe how urgent this deal is for these companies this is a no growth category except for mexican beers. This deal has to get done. It will get done. If it does, it is going to have to go the way to make some progress to ask the panel to ex toned get more time to talk or they are going to have to reach a deal. It would be foolish not to do it. These are all very rich people. These are barrons. They need to do nothing. We can cut our cost away into greater profit but we are not growing. No growth category. In the old days, these were good breakouts. In terms of the back and forth, alejandro Santo Domingo and the person making many of the decisions, they only almost 15 of sab, still a key, certainly a key in terms of which way they go. They have maintained their two spots on the board which supports and had their members recuse themselves from whats going on. It is going to be very interesting days. I could tell you, this is the beginning of earning season today. No offense to pepsico. There are a bunch of them. Thats surprisingly good news in valuation. These stocks, the low multiple has been going up. This makes sense. I see sisco going down. My Charitable Trust owns cisco. The idea that they would want ems. Chuck robins in a growth mode. Inconceivable. We are going to have more on emc and sab and this news from alibaba. What is jack mau saying. A rough start for dominos and shake shack. We are going to fill you in on why. Volkswagens u. S. Chief who weeks ago said the automaker screwed up is heading to capitol hill to face a house panel at a hearing on the emissions scandal. Well have that live in an hour. As we get closer to this thursday. A lot more squawk on the street right after this. patrick 1 whats it like to be the boss of you . patrick 2 pretty great. patrick 1 how about a 10 raise . patrick 2 how about 20 . patrick 1 how about done . patrick 2 thats the kind of control i like. And thats what they give me at national car rental. I can choose any car in the aisle i want without having to ask anyone. Who better to be the boss of you. patrick 1 than me. I mean, you. Us. vo go national. Go like a pro. [get up to 48 monthsw interestfree financing on tempurpedic. Save 300 on beautyrest and posturepedic. Or choose 300 in free gifts with Stearns Foster. The triple choice sale ends soon at sleep train. Update on the company and it is also launching a site called alibaba defined designed to help audiences outside china understand the company. Here is executive chairman, jack ma in his letter saying recently signals of chinas economic slowdown have triggered widespread concern and overrea around the world. I firmly believe that for the future, the advantages of slowdown in chinas economic progress outweigh the disadvantage. They are no longer in need of increasing their numbers but of increasing their quality, jim. He has gone on to talk about something he has mentioned many times in the interviews we have done, which is ecology, which is a huge issue for him and china. This is something when you first read the letter. Thats a bit of a mea culpa. This issue of ecology is something i talk a lot about with klaus kleinfeld. China is facing 1 Million People dying every kreyear from respiratory illness. It is a lot about the manufacturing business. Where im confused, china is switching to a service economy. Why should that affect as much as the gdp should go to five. I find the note quizzical. I do believe the he can logical concern. They havent made the numbers. Nike made the numbers, star buck has made the numbers. Apple has made the numbers. I question the execution, anyone on the young Conference Call. Thats an open rebellion Conference Call that. Was a like a Banana Republic and a revolution against the analysts. When you dont make your numbers in china, i question. He is an earnest man, ma, he is earnest. He talks about that same middle class reaching half a billion people in the next ten years. Many people have used alibaba as a simple way to play the growth of the middle class from china and the growth of consumers there. It is the simplest way to do so. Stock at 120 a year ago may have been clearly overdone as the fervor of 1111 day set in and hit those highs. It has been cut roughly in half. I dont want to buy it after i read this note. You dont . Thats disappointing for me. Its a recognition that china has slowed. They came public at a good time. A lot of companies are not coming public. We had another one cancel today. Yesterday, of course, pure storage. That was not well done at all. It is expensive stock. Emc, so targeted by pure. It is very interesting to read the ma letter and come back with the conclusion of thanks for nothing. Thank you for explaining why your stock is going down. Whats the takeaway . Volkswagen headquarters invaded by german police. There is a lot of International News that is positive for our company. Maybe amazon is doing better than alibaba. Gm and ford are going to pick up sales. Weir spoke yesterday. They are using an 18 billion unit business in the United States. Voex w volkswagen is going to be losing shares. Mas letter says to me, maybe we are not doing as well. Thats not what he is saying. It is the way i read the letter. Ill talk to you more about the consumer overall. Were going to take a break here. We also got your mad dash coming up as we count down to the opening bell. Lets give you another look at futures. We are off the lows at least of the morning thus far. Well see where we start, though. Squawk in the street coming back. 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Some mad dash. We are going to talk dominos, lets get to it. One of the Great Stories of our era is the turn around of Dominos Pizza by patty doyle. He is on tonight on mad money. I have real questions. The comparable score sales, 10. 5 for the u. S. 7. 7. 7 international. The supply chain revenues are 56 of the revenues of the parent. Thats the money that the franchises pay to the parent. It wasnt as good as i expected. So weve got to learn here. This is one where if you sell it now, you havent heard what patty doyle has to say. That would be why the numbers would be less than anticipated. I hate to say to you, ive got to find out. Sometimes it is better to say, you know what, i cant cuff it. I dont know the reason. Thats why i want to speak to patty too. He has been most forthcoming. It is not what happened with pizza hut. Pizza hut could keep people going. And big price cutting in china. This is a separate issue about the way the franchise structure works. There will be people that will short the stock and bet against it more heavily. I am not happy with what i read. I need more. Pat doyle has been able to explain a lot to me. He will do it again. I dont want to bet against him until i hear. Tonight, on mad money, we will talk more dominos. Well check in on so many other things we havent gotten to. Shake shack, that secondary, well see how that stock performs. By the way, the opening bell, a few minutes away. Commissioner, gary betman of the nhl, which opens this season, will be doing the honors. We are back after this. [announcer] youre on the right track to save big during sleep trains triple choice sale. For a limited time, you can choose up to 48 months interestfree financing on a huge selection of tempurpedic models. Or choose to save 300 on beautyrest and posturepedic mattress sets. You can even choose 300 in free gifts with sleep trains most popular Stearns Foster mattresses. The triple choice sale ends soon at sleep train. Sleep train your ticket to a better nights sleep sup jj . Working hard . Here at the Td Ameritrade trader group, they work all the time. Working 24 7 on mobile trader, rated 1 trading app in the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of the other competitors do in desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivative pricing model, honey . For all the confidence you need. Td ameritrade. You got this. You are watching cnbc squawk on the street. We are live from the Financial Capital of the world. The opening bell is going to be rung in a minute from now. On these days, and it is just two of us, i would like to reminisce on all days together on squawk box where you would be the guest host and you would be sitting with mark haines. I would yell, whats the key to this market. I always like to do that on our days together. I am always interested in what your answer is. So, the answer is, google. Google is saying this is not doing anything for the company. It is going to clarify why they have all these gre