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tv   Squawk Alley  CNBC  August 14, 2014 11:00am-12:01pm EDT

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and managed to climb the ranks as one of the top providers of servers. when you've been as successful at cisco was in the dotcom era, it's hard to replace that revenue once it stops growing. how aggressively do they need to move into some other area? something as crazy as chips? or consumer hardware, which they backed away from, or something. if you really want to see explosive growth in the future. >> chambers himself has said, look, look at the big players in our business. the five big i.t. players. nobody is growing. there's going to be massive consolidation. so it wouldn't be surprising to see massive consolidation of cisco at some point. >> to see the majority of its business still switching and routing and yet switching down 4 4% routing down 7%. buy side, not convinced they can diversify product mix over the next decade to completely change their profile to be a company with a product that stays relevant, competitive and current? there's not that belief there. >> classic disruption, the
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spending is going to cheaper software based players, and even if cisco plays in the marx, they will. hard to, again, take the old existing business and grow it. >> this is potentially google and apple's problems five years from now. ten years. you see revenue profit coming from the iphone. what happens when that's not growing anymore. not hard to imagine. it's so important for these companies to invest in things that might seem like pipe dreams now. trying to make sure they continue to have fuel for the future. >> henry mentions that speech that chambers gave where he said in five years look at ibm, look at h.p., us. a lot of us are not going to be around. how ironic would it be if he was the one not around in five years? >> certainly possible. all the little guys will get scarfed up. >> planning to be ceo five years from now. in a sense, won't be around but
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protecting his leg sand the margins they have are a nice mode. >> and in that power point we should note, cisco was still around, by his estimation. >> next up, an interview with the "wall street journal" today. ceo of la nouveau claiming the smartphone market is moving away from xpexive phones saying the smartphone's focus is shifting from premium products to main stream and entry level products. we've seen it before in pcs and we have a lot of experience in these kinds of transitions. pcs not exactly the example you want to point to in terms of finding answers, jon? >> maybe so. apple took a lot of flak for not really being able to significantly grow market share in pcs. bottom line, never really did. the thing they was the high-end. the profitable end of the pc market. so perhaps the smartphone market and the tablet market by extension, are bifurcating in a similar way. not market share but profit share and value of the customers these companies have. >> doesn't he have to say this?
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given they just bot motorola? have that unit coming onboard, need to integrate it and grease the market for something good to come out of their product lineup? given they just spent billions of dollars on that deal that didn't work out for google? yes, you want to say that low-end smartphone market is a positive. that emerging markets will be the boon to growth. that's what you just invested in as a company. >> yes. but the smartphone market, to jon's point is going through exactly the same transition most hardware markets go through. which is prices and margins come down. they're in a good position for that. so low priced to begin with. samsung has been hammered by this transition. they're losing a lot. they are the first company that's getting picked off. but apple is sitting out there and apple folks talk like, oh, no. they'll never get to us. we're the high-end of the market. it's just tough to imagine that that ratio between the low end and the high end persists at the market share that apple has. >> but the way --
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>> bmw doesn't have 35% of the market. >> people asking whether the ipad is the cat nary in that coal mine. look what at&t is trying to do? big discounts if you buy a phone at full price. >> you protect those margins through smart software and sometimes service integrations. oracle did it with its hardware strategy. able to take their middle database and make them work better on hardware. it's software that manages to bolster hardware margins. what apple still has, why they're able to maintain at the high end. ease of use and functionality. probably not at much as for the ipad they should have. probably one of the reasons ipad sales aren't growing, i would argue. >> because the tagt by definition is something that is a rich experience? is it possible to make that low end on the spectrum? >> i am not obviously an engineer. in the engineer, any engineer will tell you, i talkeded to bunch of them. >> you can fool some people--
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>> talked to a bunch of them over the years. amazing what companies can do when they put their minds to solving the problems real people have. plook what microsoft did with office. continued to succeed because of the quality of that software and the margins are really nice. if apple can continue to do that, and do a little bit more of it with a device like a tablet, maybe they can -- >> picking up on that, the saving grace for apple now is the lock-in you talk about. their fastest growing business is actually software and apps because of a huge platform out there. if they can keep taking pricing down. it's headed down. that's good. they're playing. they continue to build the base, a nice business to build o. the danger for la nova, back to smartphones and samsung, a lot of home-grown chinese players at the low end of the honey badgers of hardware. they don't care about profits. they are selling for zero margin, and how do you survive in a market like that if you're a business that actually needs profits to hire people and return to shareholders? it's tough. they've got to fuger out a
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solution. >> and adding to that, you now have a couple of chinese companies, one in particular, that has a religious following around it. creating the same brand magic that apple is. it's not just low-end knockoffs. people say they're knockoffs, but boy do they have a fan base following them. >> and if you're getting great software engineers to build those solutions we're talking about eventually you got make some money. finally, time for a verified safe zone on twitter? vowing to improve policies after robin williams daughter zelda left twitter and instagram days after her father's death saying she couldn't bear all the hateful messages and would stay off twitter and instagram for "a long time." twitter announced new features for verified users. with a blue check mark next to their name, twitter trying to address the large volume of conversations often experienced on the platform. a tough one, henry. one hand, trying to protect people who deserve protection,
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but the two tiered classification of twitter, a healthy term? >> takes something already too complicated and makes it more complicated. what happens is, just appalling. i'm glad twitter is standing up and glad the problem is getting an issue and even leaving aside the people who are truly hateful, which is what happened in this case, the problem is, that the internet, twitter comments everything else, seems to take decent people and just turn them into douche bags. get on twitter, it's suddenly, rude, mean, nasty. things you'd never say to anybody in person. even if you didn't like them all that much, and it would be great to find a way to control that for at least incent people to be nor polite. >> a new button. >> yes. i'd lie if i said i never used it. a floob the newspapers had to deal with, too. anonymous commenters, the "wall street journal" went to a policy where you had to sign in with your real name. if you weren't willing to say what you wanted to say under your real name you shouldn't be commenting. i wonder what would happen to
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twitter's user base if they took away the anon imtty people are afforded on a network like that? that's often the cloak they hide behind when willing to share these comments. >> maybe a two tiered system they need. one more of a safe zone. people use their real identity. this conversation makes me think of that phrase, you kiss your mother with that mouth. if your mother got your comment every time you made it to someone, you would think differently about what you say to people. so shining that light of day, people with their real identity, with their actual real life community, aware of what they're saying is probably what twitter needs to get closer to and there's advertising value in that, of conversations more genuine. might not be all bad. >> and your mother presses, unsubscri unsubscribe. >> a different topic. >> people on twitter impressed with your use of the english language just now. a story for another time. kayla? >> no. it's certainly an interesting debate. i'm sure this is not the end of the road for twitter. it's been an issue that's come
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up far aaway. henry, talk to you later. a check on the broader markets steadily in the green. dow up 27. nasdaq up 9. s&p up 5, shrugging off that flat economic growth over in europe on the back largely of a speech that russia president vladimir putin made in crimea earlier this morning saying we will do everything in our power so that this conflict in ukraine is ended as soon as possible. that giving way to easing some of those geopolitical tensions. you can see the result in the market on the back of that. shares of coal is rallying after second quarter earnings beat estimates. same-store sales falling more than expected but were positive in the month of july, and the ceo of that company made sure to tout that. you can see that stock is up 3% on the back of that figure. take a look at boeing. rallying after the company's cfo said it may need to boost production rates for the 737. boeing is the biggest winner on the dow this morning. gains of nearly 2%, carl, for
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b.a. at this hour. when we come back, the largest venture debt company in america giving a huge boost to the start-up scene. he'll join us. and despite a bad review, tesla shires soar. four in a row all-time highs today. behind elon musk's success and see if the stock continues to rally. netflix making a big bet on comedy. champion stand-up stars are making specials exclusively for the streaming service. and who could forget this moment yesterday? >> go. >> i accept the challenge. >> that's me outside the big board. today t-mobile ceo john legere taking the challenge. legere just committed $100 grand if we can find nine other kre ee ceos to commit.
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ship in that incredible? "squawk alley" continues in a moment. [ male announcer ] don't just visit miami. [ jackhammer pounding, horns honking ] [ siren wailing ] visit tripadvisor miami. [ bird chirping ] with millions of reviews, tripadvisor makes any destination better.
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welcome back to "squawk alley." red faces over at red robin. stock hurt. plummeting as a fast casual burger chain reports a surprise drop in profits for the second quarter hurt by higher food and beverage costs. although sales increased, increased less than expected. stock down. you can see there. 21% down on the day's trade. back to you. >> dom, thanks.
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as start-ups grow and begin funding rounds they face a dilemma. how much to give up. venture backed companies providing debt and equity growth capital to growing companies. the co-founder, chairman and ceo, and he joins us from palo alto. manuel good to see you. thanks for being with us. >> good morning, carl. thank you for having me. >> we've had this discussion a few times. what do you do if you're in the early stages of trying to raise money and run your own business? you've got to get capital. don't want to give away the store. is there a good rule of thumb? >> yeah. actually, the good rule of thumb for a prudent ceo and founder is to always supplement capital structure with anywhere between 20% and 30% of capital he needs in the form of debt. or venture debt in the form of a market. that way continuing to grow his company. goes public at $500 million, gets to preserve your ownership for him and his employees and
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really motivate his people. >> how do you keep enemployees happy, manuel? a question of, compensate with stock? how does that dilute, and those could end up being your shareholders when a public company. a cautionary tale from facebook. what do you advice companies to do with their employees? >> facebook is a good example. the company had prudent stock transfer rights in it. called roafers. what that means, basically that the issues company, facebook in this context, has the ability to buy back the shares before making to the secondary market. you control who has access to your stock. as to the first part of your question, you always want to motivate employees. especially in silicon valley. to take more chances and take risks giving them stock for capital appreciation or you're compete wig large corporates like an hp or ibm of the world, not stimulating that creative talent for them to leap and start a new company. stock ownership is a critical
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part of motivating employees. >> manuel, debt always sound great when things are going well. a lot of cash flow. save equity. when things turn down, suddenly saddled the company with a huge burden you can't get out from under. what are the terms like in most venture debt and what start-ups are actually appropriate? all of them or some of them? >> you know, one of the most important things about putting debt in your company is if you don't believe you're going to be able to sustain growth or have milestones of achieving value for your company, you should not be putting debt on your company. so oftentimes, like the metaphorically speaking, when you take something that's really good and overabuse it it's going to come out and feel bad like a hangover. you need to know when to apply debt to a company. oftentimes where a lot of people end up looking to debt is at a point of desperation. at a point of desperation, if you can't find equity dollars to come into your company, the last thing you should do is put your company at risk for putting debt into the company. even though we're in a debt
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business, we turn down a lot of companies looking for debt, because we don't think they're at the right stage of development 57b9d putting debt on the company would be a bad service to them. some of our competitors in turn -- sorry. go ahead. >> continue, manuel. >> i was saying, some of our competitors who may be new to the asset class may not be able to discern the difference of when is the appropriate time to put debt on a company and, therefore, allocate debt to a company at a time and point where they shouldn't be taking on debt. it's a very critical issue you have a right relationship with your lender and your venture capital partners to find the balance. >> that being said, do you put $11 million in debt on box. awaiting the ipo of box. expecting it sometime this fall. did you it in 2011. obviously, growth skyrocket for that company. profits haven't. what did the process look like for box to pay you back and are you happy with that investment? walk us through the thought process there. >> absolutely. i think box continues to be a very, very well-run company and continues to be a company with great market share and continuing to grow market share.
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you pointed out, growing tremendously and now cognizant of the cost of that growth on revenue by managing their bottom line more effectively. i think that's very important to point to the fact that they recently ended up raising $150 million of equity out of a -- at a $2 billion valuation. so certainly validating the business odle. our debt has actually been repaid back as a scamp of a company doing well. paid back about a year ago and continued to do well on the gloeth trajectory but are very focused on managing the bottom line as a position. wall street now is having a little bit of a challenge at looking at what is is a multiple to sales that a company should have versus on the gross trajectory they're having. seeing a lot of valuations changes going on in the market today. >> manuel, how well do you make out when a company pays back in case like that? >> in a case, for example, our investment in box, public
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filings, on box investments, up around $27 million, $29 million in unrealized appreciation based and investment in that company. as you said, we started off way small venture loan to that company, and because we were very comfortable with management and execution of that company, throughout its life cycle, provided more layers of debt into the company with the eventual repayment of debt we had and now basically long only equity on that investment. >> finally, manuel, mentioned your early entry into facebook. anything you do differently about that play? >> you know, i stand very much by my comments when i was interviewed on another network and on facebook. which is never short market zuckerberg and he was going to solve the issue, mobile platform, he did. it's quite effective. facebook is doing quite well. >> you could say that again. we remember when it didn't look that way. certainly does now. please come back. great stuff. of hercules technology growth
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for throwback thursday. dug into the archives today. found this gem. president gerald ford playing a round of golf in some retrored pants. president obama's golf game becoming a topic of conversation. spotted this week with a rather modern round of golf. he is tracking his progress with a wearable game golf. this photo from around on martha's vineyard. if that red button on the bottom of his club, see how you did, route your progress. did you know about that? >> i did. those pants are coming back. >> what do you call that? >> nantucket --
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>> yeah. salmon look. >> dark burgundy. >> ron burgundy, as we like to say. >> i wonder if the golf game tracks how much grass you pick up which you hit the ball? that's what i do when i play golf, at least. we mentioned john legere tweeting a moment ago about the als challenge, ice bucket challenge, so many people are learning about quickly. here's legere. take als challenge to new level and get ceos to pledge cash. i commit $100,000 and ask you to find nine to join in. >> are these nine additional ceos? we have zuckerberg. we have twitter's costolo. >> at&t's ralph day la vagde la well. most say contradicted money. could be getting there. we'll see. >> henry, put a word in with bezos? hard to reach. >> absolutely.
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chambers is on later. ask him, and others. >> we certainly will. ask everyone we can get our hands on. for all ceos, a call to you. $100,000 from john legere, should you participate. >> henry, good to see you. >> great to be here. >> business insider. the president announced he will speak at 12:15 p.m., in about 45 minutes. in edgartown, massachusetts. not a lot of detail what he'll say what the statement is about, but we'll certainly when he speaks at a quarter after noon eastern time we'll bring that to you live. when we come back, take my wife's account, please. the story on netflix and it's big move into stand-up comedy. plus, yahoo! a major new initiative with the help of facebook and google. yahoo! will tell us what that's all about in just a minute. if energy could come from anything?. or if power could go anywhere?
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markets in europe close in just a couple minutes after a big day for data, michelle. what are we looking a the over there? >> as you mentioned, kayla, certainly the huge story of the day, decline in germany's economy. europe's strongest economy in decline what does that mean for the rest of the continent? german gdp fell 0.2% in the second quarter, before the most's reasons round of sanctions went into the effect. france flat, too. the data originally sent german stock market down. also pushed the german ten year yield below 1%.
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both markets reversed after russian president vladimir putin made very dovish comments about the situation in ukraine, during a speech in crimea, which goes to show there's still huge focus on the situation with russia. in fact, today the german chamber of commerce said that german exports this year will be lower than originally thought because of the sanctions due to the rue containian crisis. the group now expects 3.5% export growth rather than 4% but could get worse. head are forren trade saying, "we're on a dangerous path." today's russia food safety agency will increase sourcing agriculture products from colombia, in the last hour, now allowing pork imports from china. they're clearly hunting for substitutions for the agriculture products from europe and the united states, which are now prohibited. waiting to see what happens, of course, with the large russian convoy supposedly humanitarian aid headed to the ukrainian border which the west worries is actually a group of tucks masked as a possible invasion into ukraine. finally a story that hasn't
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gotten a lot of attention. the danish pension fund will no longer guarantee a lifelong return for the pensioners they serve. instead, anyone born after 1964, returns guaranteed and then reset every 15 years. one of the reasons they cite, lack of liquidity in long-term bonds. carl a story that keeps coming up. gapping down in the high yield market trying to get out over and over again. so much liquidity from the fed and yet so little liquidity in trading. >> wow. they say we're living in an era of the broken social contract. that's one more example. michelle, absolutely incredible. >> yep. >> thanks. michelle caruso-cabrera back at hq. jon steinberg joining us. good to have you in. >> good to be here. >> talk about yahoo! here. trying to do its part to help aspiring small business owners. today the company's introducing yahoo! stores. a next generation ekmert platform will help anyone start, build and grow a successful
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business online. for forea cnbc exclusive interview, the business chief. >> good morning to you. >> walk us through what this is all about. >> yeah. absolutely. and i'm glad to be talking to you, talking with you about this. you know, over the last 15 years, yahoo! small business has helped over 1.5 million small businesses start their entrepreneurial journey helping them get a domain a website, an ecomass presence. they've processed over $65 billion in transactions so 1.5 billion customers so far. what we're doing today, taking the next step in the evolution of this platform. ten years back when people wanted to get online, sell stuff online, all they needed to do is get a website up. not true today. now you have to be available on the mobile surface. you have to be able to make it
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really simple for the consumers who are becoming pro-sumers. most importantly -- yes? >> if i recall, yahoo! had a big small business push and then scaled back from that. now there's so many players jumping into this market, from amazon. you know, google. in intuit. what is going to virally spread yahoo! into this? you don't have to make small business owner all over country aware you're doing this? >> excellent question. you're right. anyone and their daddy can help you get a website but only we can help you make sales and be more successful. the way we do that is by helping you get to a marketing channel, marketing channels. for instance, soon as you set up your store through any of the providers you mentioned, the question isn't really, oh, can i sit back and rake in orders?
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the question, how do i go ahead and go advertise across all the different channels? and that's where yahoo! speciali specializes. after you set up your store, within minutes, literally, and i don't mean literally figuratively. i mean literally in minutes, start advertising your products across the yahoo! ad network using yahoo! gemini. pulls it all together and also able to advertise on google, facebook, amazon within minutes. this puts us apart from competition. >> why is this interesting? it's funny. i worked in google local five years ago. we did the same thing with reach local and yodel och erg up advertising solutions. why not just do more national big budget ad sails type sufficient as opposed to this with all the support complexity and hassles? >> excellent question too. the way to think about it, every small business is different. if you think about the case of local marketing, if you happen to have a bricks and mortar location that is nationwide, you might want to do national
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advertising. if you're con traded in one location, that doesn't work. you need someone who is an expert at your local area. in fact, if you don't have a local presence, things like yodel and, just will not work, because you are, in fact, not off-line. so you would then need to have online advertising. our approach is like an app store. just like facebook has an app store, apple has an app store. we have created an app store we call com central for small businesses to pick and choose which marketing channels might work best for them. >> the advertising flplatform, e you offering perks to get businesses to switch from etsy, amazon, other platforms they've already set up shop and could be potentially not swayed to go through the red tape of switching? >> absolutely. in fact, the way we think about it, and that we've seen the market evolve is, you might start your entrepreneurial journey on etsy or the amazon
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marketplace and find yourself constrained a little bit, because when you talk about etsy and amazon, even if you know you're buying from an individual, the brand that's in your head is etsy amazon. when people reach a certain skill and they're ready to grow to become a million dollar growth merchandise a year, $10 million gross merchandise a year, they're looking for a platform where they can have their own presence and be known for it. that's where we come in. we love to help our merchants get listed on etsy, listed on amazon but help them build their own brand, their own presence. >> small business recovery is key to this economy. we look forward to seeing how this product does. for now, yahoo!'s chief of small business. thanks for joining us. >> thank you. chelsea peretti, jim jeff 23ris, chelsea handler and the one and only bill cosby, all performing for you exclusively on netflix. julia boorstin joins us with details.
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interesting stuff from netflix. >> absolutely. really netflix' latest push to launch more original content and become a destination for comedy specials. netflix announcing four new exclusive comedy specials from bill cosby and others. the special premieres on august 29th. those four comedians join chelsea handler, signed a deal with netflix to do a show in her comedy special that launches in october. netflix appeals to comedians as creative flexibility, no commercials and ability to air specials of any length. with the addition of comedy specials it announced in june, netflix is now in every major tv category except sports and news. comedy has the advantage of being relatively low cost per hour to produce why comedians have the devoted fan base who could sign up for netflix just to see their favorite star. just ut latest way netflix is bolstering its battle with hbo, which who a long history of comly specials with the likes of billy crystals airing now.
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kayla? >> all right. thanks, julia for that. we'll continue to watch netflix. an interesting development given all of their various vores into that space. kayla, watching a company calmed new link genetics. stock moves higher. iowa drug developer ready to start human testing for a possible vaccine for that deadly ebola virus. the company saying the vaccine 100% effective in preventing ebola in non-hugen primates. shares up 10%. another hat in the ring for a company looking to cure ebola. back to you. >> thanks, dom. when we return, if you've been watching cnbc this week you've seen me, scott wapner, ceo of twitter, dick courtlow, all take the ice bucket challenge for als. so far the association has over $7.5 million in donations. last year, just over $1 million.
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we'll do our part to keep it going. you'll see the challenge a little bit later right here on "squawk alley." and legere's challenging fellow ceos to give more. just tweeted he'll donate $100,000 trying to get nine other ceos to do the same thing. first up, rick santelli, what are you watching? >> i'm watching gdps, around the globe, but we're going to pick out the important ones. the ones that use a lot of this. we're going to discuss what that means for the united states, because on a relative trailed we all know we're better, but what does it mean for the global economy? and more important, what does it mean for interest rates? all after the break. i'm only in my 60's.
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and learn more about the kinds of plans that will be here for you now -- and down the road. i have a lifetime of experience. so i know how important that is. coming up flex on the "half," fighting in iraq and ukraine. and stocks not far away from hitting all-time highs again. is the u.s. really the best place to be? joining us live, weighing in on that question. plus, first of the one-hit wonders. king digital and noodle taking a big hit. and tesla and sell general motors. should you listen to that call? keel debate it at the top of the hour. kayla, we'll hear from the president at about 12:15 eastern. we will take his statement live as well. back to you. see you in a bit. >> and the we'll be there with you at the top of the hour. thanks, scott.
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if it's thursday it means the cnbc crown is one more day to vote for the 3d printed product most likely to fund. here's the first choice. cree oh pop, it's a naen allows users to create their own 3d objects up against own phones 3d peer buds. headphone custom fitted to your ear and wire-free pap heated battle so far and the polls close soon. make sure to vote now at norm we will announce this week's winner and that uk willy winner will join us here on the show, tomorrow. >> you got a pick? >> no. we're impartial journalists. >> i see. got it. got it. >> we let the crowd choose. get to the cme group. check in with rick santelli. >> hi, carl. like to work on old cars in my spare time and there are many issues where an old car will run good for a while, then bad, but it isn't consistent. the whole trick is to get the old car returning consistently well. well, when it comes to
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economies, there's very little difference. as a matter of fact, transition comes to mind, because much of the containsian central bank activity is trying to accomplish something that may be impossible, because the transmission of what they're trying to do to the end result, trying to create -- there's something broken there. and i think that is very significant. and back to the old car analogy. when i look at what's going on in the german economy, or the europe ozone in aggregate, i understand that much of the recent activity is being blamed on geopolitics. but like an old car if it was running better, the impact would be much less. look at the recent data. 2014. two quarters. 2013, 2012. going back in time and looking at some of the countries whose gdps have come ot recently. remember, cover this with a blanket. first of all, eurozone's aga get unemployment 11.5.
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yaum time historic worse, 12%. right there, you have a head wind on this old car that is preventing it from really reaching an escape velocity, but its own internals are still impacted. look at germany. remember, quarter over quarter for germany, france and italy, japan is annualized quarter over quarter. some apples and oranges. as long as you stay with the right vernacular, it's the trends i'm concerned with. how is that german car returning? remember, q 4 of last year and 2012, down over q gdps and reached the 7/10. the problem. issues. look at their neighbors. second largest economy in france. the numbers are very small and you can see they've had problems. nobody has problems like italy. even though they may have their debt more under control. japan, under quarter over quarter annualized, we all understand that the taxation of
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late has probably pulled forward purchases to avoid some of these taxes, but in the end, this is the biggest canesian experiment in history we'll continue to monitor, but this is nothing to be proud of. what does all this mean in english? if you're an export economy like most of these are and have structural issues you aren't dealing with, the easy solution, which is what every country does nowadays, is going to be to try to export more. how do you export more? you lower prices. the central bank's going to call that deflation and they're going to do more of the same, which hasn't helped. that's the word you'll hear more you, but in the end, all of this is going to affect the u.s. aid through imports, maybe lower price, more dramatically, we're interconnected. i see boon under 1%. spanish rates where they are. interest rates aren't the fix. >> talking about that all morning.
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thanks. when we come back on "squawk alley," dick costolo took the ice bucket challenge. he challenged carl. you may have seen that on vine yesterday. carl then challenged zillow ceo spethser rascoff. never one to back down from a challenge and he'll join us up next on behalf of the als foundation. stick with "squawk alley." we'll be back in two. yeah, i'm married. does it matter? you'd do that for me? really? yeah, i'd like that. who are you talking to? uh, it's jake from state farm. sounds like a really good deal. jake from state farm at three in the morning. who is this? it's jake from state farm. what are you wearing, jake from state farm? [ jake ] uh...
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challenge. >> whew! [ cheers and applause ] >> multiple ice buckets for the ceo of t-mobile john legere. joining a growing list of ceos after doing the challenge ourselves yesterday, here outside the big board and twitter ceo dick costolo. he challenged zillow ceo spencer rascoff and he accepted as well. take a look. >> spencer rascoff and i accept the ice bucket challenge to end als. ah! >> i think everybody doing it -- >> ah! >> and spencer does join us on the newsline this morning. it's even better in slow motion, spencer. >> thanks a lot. didn't feel that good in fast motion. but it was worth it. a great cause. >> why didn't you wear your jacket, your suit and tie? i think you have to do it again
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in your regular rascoff outfit. [ laughter ] >> i dressed down for the occasion. but i mean, it's a great cause and it's so great when social media can be used for something important and impactful like raising awareness for something as awful at als. so -- for me, so much snarkiness and so much negative stuff, it's terrific when a phenomenon like this happens to raise money. >> spencer, only took you a minute or two to respond on twitter. you said, i'm in, soon as jon steinberg suggested you and then wrote, i lost a friend ant mentor to als many years ago. such a horrible disease i.d. what do people not know that they should? >> well i mean, bob packard, some of your viewers at "squawk alley" might remember. one of the most prominent and well loved investors, a colleague of mine at the time. and i watched him die in just a couple months. such an awful disease. it starts off by, by basically starting to lose control of your muscles.
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at first he thought he had carpel tunnel syndrome. down type. oerch the next couple of months, he passed. your brain stays strong as your muscles degenerate. an awful unmerciful disease and needs a lot more money and attention to research and there's a great foundation bob's family and friends set up at john hopkins. my family and i have been donors of, and this ice bucket challenge caused me to go back and donate yet again to it. that's why i'm so pleased. >> and the fund-raising is undeny blee strong. almost $8 million in the last couple of weeks. seven times what they gathers in years' past. and trying to get other ceos to match that, looking for nine, make it $1 million. you've committed obviously, you said, you've donated. but this is encouraging. right? amazing, the power of viral media and social media.
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>> the fact is we wouldn't be talking about als on cnbc were it not for this social media phenomenon. it's terrific and kudos for john for being so generous. incredible and inspiring. >> already had a few ceos do it. to get to the that magic nine number, anyone you want to nominate? >> yesterday i nominated jeff weiner. you're very own jim cramer. i would love to see jeff and linkedin and jim at cnbc take up the ice bucket challenge. >> jim did bring a change of clothes today, although steinberg has a thing where i guess you got to do it in your suit? >> in your suit. in your clothes. >> you didn't tell me that ahead of time, jon. i didn't know that. >> people should raise more money. in your actual clour your clothe amount. >> one more time for good measure here, spencer. nice! >> ah! >> great to talk to you. see you next time. >> thanks, everybody. >> spencer rascoff from zillow. when we come back, tesla stock hitting new all-time highs
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today. up over 70% so far this year. look at that. 262 now. we're going to ask a tesla expert the question, can anything stop the electric car company, when "squawk alley" comes back. where the reward was that what if tnew car smelledit card and the freedom of the open road? a card that gave you that "i'm 16 and just got my first car" feeling. presenting the buypower card from capital one. redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac - with no limits. so every time you use it, you're not just shopping for goods. you're shopping for something great. learn more at
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a bad review could give a company something to be shy about. check out shares of tesla today. new all-time highs. four all-time highness a low despite "consumer reports" saying the model s had more than its share of problems, quote. how long or will it ever run out? the problems. technology and operations managing professor, and author of "risk driven business model" a harvard business review, auv writing about tesla. great to you have this morning. good morning. >> good morning. >> this is a hard business. you've got to get the business model down. you've got to get the technology down. the distribution. we already talked about so much. the marketing. what do you make of tesla's prowess at this point? >> you're very right. it is is a very hard business, but tesla has done really, really well.
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tesla has been riding this highway far faster than any auto company ever has. in just about two years nailed down the business nodal and done the single most important thing no other electric vehicle maker could ever do. tesla grabbed the fascination of the consumer. no other electric vehicle maker could have done that before, and with this on their, in their hands, i think it's really about scaling up now on that, too, they've been doing really well. i'm very optimistic about the prospects of tesla. >> on that scaling-up topic, the fact they decided no the to litigate against patents because they need so much capacity and so much to come online, they're enentering what i think is a partner competitor-type model. as a business school professor, have you seen that before? we know about frenemy, what about samsung, apple what tesla is doing here? >> right. you are right. in the tech industry folks have done this all the time. open sources patents. tesla is also getting in there.
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to be fair, i think at this point they don't really -- they've offered patent portfolio, not that many other folks willing to grab on. also, let's not forget, tesla is a partner of daimler-chrysler. in terms of sharing battery technology. tesla is very much integrated into the ecosystem in a variety of ways that will serve them both as a hedge against problems in this market and otherwise also, some good karma for them in the future. >> what do you make of musk? is he the one who can lead this company long term, and what do you make of some of these analysts calls that say in the ind they're not really going to be a car company at all, but more of a battery company that leverages its business model off the global electric grid? >> that's a possibility, though let's not forget. the electric vehicle market is huge. it's possible. i think that's another option for them. they are developing some propriety battery technology.
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mercedes is already using some of their technology, and i think that's a possibility, but i do think the auto business is probably likely to be important for the next, for the foreseeable future. this is is a big market and i don't think they're going to walk away from it after having done so much to really make it, make a demo. >> we've got the market cap of gm and then some. you've got to stick with what you're knitting to some degree. thank you very much for your time. talking tesla today. you had interesting thoughts comparing musk's legacy to henry ford's? >> yeah. interesting, trying to think, how do you value this company, and goldman sachs did a good report at the beginning of the month. they say elon and steve jobs, one scenario. elon is henry ford, elon, the maytag repairman. talking from scratch, a single player gets an enormous portion of it. steve jobs, electric vehicles 4% of the long range vehicle market and tesla captures 68% of it,
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that's the steve jobs scenario, a price target of $466 on that scenario. >> which do you think he is? >> henry ford. of course. >> always good having you. >> good to be here. >> lighting unthe room again. guys have a good friday. hand it off to the jump and the "half." welcome to the "half time show," we're expecting to hear from president obama in 15 minutes and will bring you that statement live when it happens. first, let's meet today's starting lineup. jon najarian, co-founder of option monster. pete najarian also a co-founder. joe terranova, manager at partners and begin with stocks on track for the biggest weekly gains in six weeks. don't look now, even with all of the global issues weighing on the minds of investors, even with europe teetering on the edge of another recession, the s&p is only about 1% away from its alltri-time high suggestinge u.s. is undoubtedly the best place to put your money these days. or is it?


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