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tv   Squawk Alley  CNBC  December 23, 2019 11:00am-12:00pm EST

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happy holidays to you both >> thank you you too. it is 10:00 a.m. at boeing headquarters, 11:00 a.m. on wall street "squawk alley" is live ♪ ♪ ♪ good monday morning. welcome to "squawk alley." i am carl quintanilla, with morgan brennan, julia boorstin joining us jon has the morning off. a remarkable morning boeing is the news of the day, dennis muilenburg is out at ceo. phil lebeau has more >> the decision reached to fire
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dennis muilenburg, replacing him will be the former chair, technically chair, will step out of chair, become president and ceo, david calhoun he becomes president and ceo effective january 13th what was the final straw that broke the camel's back in large part, the relationship between boeing and the faa which is completely broken down over the last several months. i learned from sources that this morning david calhoun called the head of the faa, steve dixon it was a short but amicable phone call in that call calhoun said to dixon boeing welcomes rigorous oversight. he also said boeing wants to be regulated. this is a big change in tone for boeing compared to where it was a few months ago but in terms of whether or not dennis muilenburg was not going to be in the job for long, it was expected for some time his tenure would be short. this is our conversation with
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him in the halls of capitol hill just a couple months ago >> have there been discussions with the board maybe once this is certified and the plane returns to service, time to transition out of the ceo job? >> phil, those aren't discussions that i'm involved in or is that my focus. my focus here is on the job at hand we have important work to do for the world. we know that the work we do matters. safety is at the very forefront of that. we have always been focused on safety, quality, integrity that demands excellence in how we do our work that's where my focus is. >> those comments on october 29th a couple of weeks before really things went south for boeing that's when the company put out guidance that it expected the 737 max to be recertified by the end of the year. that guidance was put out november 11th. almost immediately we heard from people within the faa, both in an official capacity as well as
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people within the faa working on regulation of the 737 max that are like what? they don't tell us what to do or when to have it done by. there are a number of steps that need to be cleared, they're nowhere close to that. that was the beginning of the end, guys. then you had the decision about a week and a half ago where the faa basically came out and said it on "squawk box" to me, said we have no time frame for certifying the plane it is not happening in 2019. will happen sometime in 2020 week and a half later, boeing decided dennis muilenburg is fired, and david calhoun has to repair that relationship and get the max back in the air. >> phil, is the reason to expect more management changes subsequent to the news now >> not major management changes. i think you're going to see perhaps changes within people a level below. they already made the change in terms of boeing commercial airplanes, stan deal was brought
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in, kevin mccallister let go a couple months ago. stan deal will be in lock step with david calhoun in terms of approach to doing the job, the way stan deal is described to me is detail oriented, not somebody that will try to run before he can walk in terms of the commercial airplane and the 737 max and getting it recertified i think we're not going to see major management shifts here at boeing i think for now what you're going to see is david calhoun will have his team put together a game plan and start executing it as quickly as possible. one thing you won't see, morgan, you will not see projections in terms of when they plan to have the plane back in the air. >> yes as you've just reported. phil lebeau, thank you joining us at post nine, sheila kyalu. has a price target on boeing
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and aerial reporter leslie josephs. long time no see >> thanks, morgan. two hours. >> stock is up 2%. >> i think the starliner was the cherry on the top. it was calhoun has experience with ge. he led the infrastructure, has big industrial experience. maybe the engineering precision isn't as tight as it should be at boeing. i think it signals this is the end of it and end of communicating on when return to service will happen. >> phil mentioned he doesn't anticipate other big management changes, maybe some movement one level down do you think the company has the management structure in place it needs? do you feel confident about the leadership at this point >> you saw stan deal took over from services business to commercial aircraft, kevin mcallister was the first resignation, dennis the second
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i think management changes are over when you look at the board, there are 13 to 14 members average age of 63 years old, 7 years of tenure on the board maybe looking at ge, had the entire board shift in the last 24 months. maybe you see the board change maybe some changes there >> calhoun has been on the board since '09. >> ten years of board experience quite a bit. >> he has been there for most of the max development, i'm assuming is that enough fresh thinking? or does the company want to err on stability and experience within boeing rather than bring in someone completely new? >> i think he has a lot of experience the press release doesn't signal he is interim ceo. seems like he will be ceo for the next five years or so or whatever it is and you've seen another head of board of directors another chairman role, three and four months. quite a bit of change already on that front
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>> my question is you think he is the right person to carry this forward >> i think you need somebody with industry experience and company experience this is not like ge where you're bringing in somebody with operational experience, you need somebody fairly close to the situation. i think this is the right bet for now. >> bring leslie in as well for the work force, you have that halt of production last week what does the leadership change do for morale in the company >> so far nothing has changed. the stoppage to production is not going to take effect until january. we have no idea how long that will last, even when the faa got news of muilenburg's replacement, of course they don't comment on personnel changes, they reiterated we are in charge of the process they're not going to rush it through. we have no way of finding out how long this could possibly last which will have impacts on suppliers like spirit that makes the fuselages and down to
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airline pilots which are missing overtime and complaining about that >> sheila, you and i talked about this before. and you mentioned starliner, we had the launch did not go as expected over the weekend, although they had a successful landing sunday. there have been issues with kc 46 tanker on the defense side, decided to opt out of bidding for the new icbm contract as well there have been other things plaguing the company throughout the year, too, perhaps overshadowed by the 737 max. how should we take them all together, how do investors need to think about that? >> we talked about this this morning. there's a reason there are only two oems there's a handful of defense oems development programs are always
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delayed. investor perception and credibility have gone out the door as we have been optimistic about return to service. the board signals there needed to be change i think it is fairly difficult we have to kind of honor that. >> leslie, in terms of messaging, i saw some reporting this morning there were internal notes about the leadership changes as well, right >> yeah. greg smith, cfo, moving in as inter interim to calm everyone down. we felt this was the best way to restore trust. that's one of the biggest challenges it is not just the faa although that's probably the biggest hurdle they have airline customers whose compensation is growing every day as this goes on. restoring trust is what the main message is. >> sheila, what's your perspective looking to 2020, issue of restoring trust and looking at the note, halt
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production with no time line creates timing abyss trust in terms of planes getting delivered on schedule and trust in the company's products themselves what's your outlook? >> i think the press release last monday when they stopped production was basically to signal we are no longer commenting on return to service. for now, we don't have a time line what we have from the european regulators was suggesting a february time line in terms of aircraft returning to service. we'll see. you can make the bet that the 737 max return to service, we think it is within 2020, and it is about how quickly boeing can get through inventory and what kind of challenges are associated with that >> i am sure more will be revealed thank you for joining us with the latest on leadership changes at boeing. stock is rallying. mention tesla hit an all-time high of 420 pulled back a bit, but hit that
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number you remember in august of 2018, elon musk tweeted i am considering taking tesla private at 420 funding secured. he tweeted in the past few minutes saying whoa, stock is so high lol. elon is well aware of the shares hitting this milestone >> too soon for that i don't know. breaking up amazon we will talk about that. why one of the first employees says it is time. and fall of skywalker. the numbers of the highly anticipated "star wars" movie that opened to what some say is a disappointing opening weekend. "squawk alley" is back after this we offer commission-free online u.s. stock and etf trades. and, when you open a new fidelity brokerage account, your cash is automatically invested at a great rate -- that's 21 times more than schwab's. plus, fidelity's leading price improvement on trades saved investors hundreds of millions of dollars last year.
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the sec reportedly investigating slack and other listings after the last five years, looking at how trading was handled the first day. will the probe deter startups and other companies from going public in 2020 joining us, cnbc contributor kara swisher good morning good to see you. >> good morning. >> what do you think about this. how much attention does this deserve? >> well, i don't know. it seems like it came, the complaint, from floor traders on the price of the stock on the first day. slack like a lot of companies like spotify did a direct listing, is handled differently than other listings that bankers do, more traditional listings. i think there's dispute about
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the price, lower price on the first day. i am not a technical wall street person, i think it is looking how it was happened by citadel, direct manager of the listing, and how pricing was done, and whether people got advantage due to pricing i'm not sure it will be the biggest deal or deter ipos, i think that will be how it is being done, whether direct listings will be done directly by tech companies which several have. >> looking forward to next year and the fact that companies like airbnb could be in the ipo pipeline, do you anticipate an airbnb ipo what are the other big ones, do you think they go the route of direct listing or traditional ipo? >> i suspect airbnb has already talked about doing an ipo, the ceo has talked about it quite publicly he was trying to get the talk away from it from the past year to say we're doing it in 2020. i think it depends how business is going, obviously, how the
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market is. i think all of them depend on that i suspect that will be the biggest ipo of the year, and i guess they go a traditional route. there are lots of choices here it is a question of how much money they need, how much money they need to raise, and other things to pick which one they're going to do. if i had to guess, a traditional listing. >> looking at the sec probe and looking at the performance of some of the ipos this year, what do you think will change with the ipos or direct listings next year >> whatever happened with slack, this case it is slack and other direct listings, the market has spoken about the companies, and stocks are what is it, slack opened in high 30s, now is in the low 20s. a lot of these ipos like uber and others are really in the
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do - if they took too long to go public, didn't have the businesses wall street is looking at now, i think wall street is doing a forcing function on a lot of companies to think hard about the economics of their business. and that's really the story here this might be just a dispute between sellers on the first day, i don't think it indicates any larger thing i think the larger thing is whether the companies are ready for prime time or if they're too highly valued. that will be a big debate, given performance of a lot of unicorn companies. >> i mean, kara, i can't help but think it is push back to what's been a big push to more companies doing direct listings overall. >> yeah. >> the other thing that happened this month, nyse did paperwork for a hybrid direct listing to raise capital, the sec said we're rejecting this comes after what was seen as a tipping point in silicon valley in terms of rethinking the way
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companies come to the public market so what does this do to that trajectory >> well, i think it is something that companies have done many times. it has a long history in silicon valley tech companies were some of the first to popularize these listings i think a lot of people have a problem with the way public offerings are done, including how these stocks are priced on the first day, how much money is left on the table for the company. so i don't see there's not a change in how listings are done, you know, banks have a strong constituency on wall street, have a lot of power, can't be loving something that has less fees, but i think they're going to continue, silicon valley will try to find new ways to do new listings, especially if they don't need the money necessarily, don't want to be doing this dog and pony show you have to do as part of a public offering i don't think that's going to change much. i think there will be push back as more and more of them do it in terms of how they're done and rolled out
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i don't think there will be decline in them due to this necessarily. >> yeah. you have to consider what role the investment banks and underwriters have in all this. kara, piece out of row code, one of amazon's employees said the company should be broken up, has echoes of things we heard from other first employees of other names in faang how is this any different? >> well, i don't know. this is an early employee critical to building the website, made a comment on a "new york times" article that jason delray that writes for row co -- recode did, he is echoing what a lot of early employees who benefitted well from being there have with the companies, a lot of the stuff they're doing, even if doing amazing things, this employee said there's also culpability for damage this employee thought that the
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marketplace should be separated from the retail business of amazon it gave amazon undue advantage to be monitoring sellers and selling against the sellers. and he has a point i think this is not anything that elizabeth warren hasn't pointed out, i haven't pointed out. most people, and the "time" series was about it as well, what are the advantages amazon has by owning the marketplace, selling the marketplace, running the marketplace. it feels like the casino that's what he was talking about. >> kara, we are hearing so much concern about the way amazon is exploiting data from third party sellers and it is not just early employee of amazon, the ftc is looking into business practices, house of representatives scrutinizing the business practices when it comes to third party sellers. do you think we see regulatory action or does amazon make changes to avoid regulatory
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oversight of the area? >> i don't see how they can avoid regulatory oversight something is coming. i talked to people at the justice department, ftc and elsewhere, i think they all feel the marketplace, even though amazon tries to put it against a backdrop of all retail which is a good point, there is a lot of retail, they dominate online retail, in a similar way how people felt about microsoft in the software business a long time ago people feel about amazon, you can't compete. there are enough stories they're going to have to respond to the idea that they can't -- you can't run the game and own the game and play the game it is a difficult one for amazon to do, even though they talk about using aggregate information, when they get into businesses if you're a business and selling a product and they sell a similar product suddenly, it is visually problematic for amazon, even if they're not using the
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data in ways people think they are. i think they have to figure out a way to assure sellers, not just small ones but big ones, too, that it is a fair marketplace, people are getting their due and are not pushed down in listings seems clear it will be one of the issues they face in the next year and where they're very vulnerable. >> not sure if you saw the report from "the wall street journal" over the weekend about walmart secret weapon, the supercenter, in which it talks about the fact that the retailer is thinking of getting into edge computing to counter amazon, be able to fund its own efforts to take on amazon it really struck me, the fact that you have the retailer looking to become more of a tech company. >> you know, it is funny it is walmart that's sort of prone here they're going to fight back with walmart, used to scare retailers around the country when they moved into an analog store next
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to main street, they were blamed for killing off main street. all of the companies have to think about what they are, how they use data. walmart was well known for using data better than other retailers back in the day. now of course they're competing with amazon, so they have to have the advantages of using massive amount of data that walmart gets to better sell essentially. the fact that walmart is the one that's the number two here is fascinating. and acting like number two which is unusual given their size. >> absolutely. meanwhile, disney is down almost a full percent, "star wars" hits the box office with muted sales after under wewhelming reviews >> this is the 12th biggest opening of all time. for any other studio, compared to any other franchise, would be
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a massive opening. for "star wars," expectations were a little higher of three "star wars" films released, this has the lowest opening. prior two were 220 million, 250 million. this is the lowest of the three, weighed down by negative reviews. it is considered a rotten score on rotten tomatoes audience response hasn't been as positive as the other films disney released from the film. all of the other lucas film movies at least a minus, this one was a b plus fans and critics not as enthusiastic interesting to see what happens after the fairly significant opening weekend over the next week when we see if fans return to see it a second time, whether people on the bubble decide to stay home, watch the man da lorian instead
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>> did you watch it? >> i did i went to the premier. it was interesting i love the franchise i didn't love these films as much as the prior two films. i thought it was good, it was worth the trip to the movie theater, i thought the force awakens was a spectacular movie. this one wasn't quite as good. >> my kids wanted to see ju jumanji. >> my kids had the same response as julia they talked about it incessantly when i got the download and read the spoilers, that's what i do, kara swisher does. but it is interesting. it is an enormous amount of money it made. from reading spoilers, it looked eh what's interesting is that the mandalorian people are loving. one thing i noticed with my kids, a little older than yours, carl, they like disney plus,
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were watching the mandalorian, watching movies on disney plus even though they went to see this movie, they were not impressed but then used the disney product i don't know if you can think of things in the same way that just because it is a big movie opening that it is a big deal. big deal might be somewhere different. i am not worried for disney in terms of that. >> no question this is a very profitable product for disney. it just speaks to the changing box office where you don't have the same box office power when investing so much in content you can stream at home of all studios, disney is winning it >> you would agree, from here on out, ongoing role of lucas film within disney is an interesting question, right? how much can you use it without overdoing the franchise. >> three years before they do another theatrical release, but
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are investing a lot for the streaming service. have two different live action series in the works and and mated series for disney plus kids like kara's kids can continue to stream "star wars" content on disney plus. >> it is a great franchise has been a great franchise, amount of change it had in movies, in terms of how we think of movies is great just peopleare watching differently. i don't know if i am going to see it this week, interesting you talked about whether people will go this week, there are a lot of other movies you would see. what do you want to see in the theater versus somewhere else. i think wonder woman, i want to see in the movie theater, excited to see it. this one, maybe i'll wait for a plane. i can't tell we'll see. eh >> jp morgan had predictions for 2020, thought wonder woman, top gun maverick would be the biggest. >> carl, you and i are going to
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top gun maverick i can't even >> all right >> i feel the need for speed >> kara swisher, thanks as always when we come back, boeing ceo is out more on fallout and the new ceo and future of the company overall. plus, he has been calling for muilenburg's removal since day one. consumer advocate ralph nader is with us. "squawk alley" is back after this don't go anywhere.
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welcome back european markets are closing seema mody has today's action. >> hey, julia. stocks struggling to build on record highs even as china announced overnight they plan to cut import tariffs on 800 plus products look at the sectors. banks in europe are trading lower, commerce bank, deutsche bank, ing down between 1 and 3%.
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one bright spot, ftse 100. trading at a five month high, driven by the weaker pound that's been the story played out in the past two weeks. uk bench mark is over 5% since the uk general election. some analysts caution that this will fade as the next brexit deadline draws closer end of january. switching to boeing, the european supplier is rallying in the down market, including engine maker saffron with general electric these names are still underperforming amid the turmoil. senior down from february highs on news of the 737 max grounding. heading to 2020, no sign of relations between the u.s. and russia the ambassador defending against the 10 billion euro pipeline
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that brings natural gas from russia to the baltic sea a lot of lawmakers in d.c. see the pipeline as germany being held captive by russia this will be something that we have to watch in the new year. back to you. >> huge story in politics and energy. let's get a news update. >> here's what's happening south korean and u.s. forces conducting drills as tensions with north korea ratchet up ahead of the year end deadline north korea setting a deadline for the u.s. to soften stance on stalled talks. russian president putin inaugurate rating a bridge to crimea they annexed in 2014 rode a commuter train for the opening of 12 mile bridge. a barge carrying 600 gallons of diesel fuel sank in the gallon app goes. workers were attempting to load a container on the barge with a
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crane, and both somehow tipped. sling tv raising the price of basic packages, adding msnbc, fox news, and headline news to the blue based service it and sling orange are $30 a month. you can get both packages for $45 a month. that's the news update this hour back to "squawk alley. karl, back to you. boeing fired dennis muilenburg for his handling of the 737 max crisis that angered lawmakers, airlines, regulators, victim families. joining us to talk, jeff sonnenfeld i have to get your thoughts on this it is something you have been thinking about a long time >> yeah, thanks, carl. this is obviously an unspeakable tragedy. i'm glad you'll have ralph nader at the tragic loss of his wonderful 24-year-old niece has strong, well informed positions
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on this. we have probably been expecting that dennis would not be surviving much longer as ceo many thought it would be the return to service in the spring in april it is unusual to have a ceo basically shot at sundown so he is removed immediately when there's no gross malfeasance in office, no deception or integrity issue, and also to have it in the holiday season, to have it in the middle of an unwinding crisis, usually they have somebody steer us through it, then make the change, unless the person was truly corrupt there's no sign of any such corruption here. the timing is noteworthy. >> at a point in which we thought the crisis for lack of a better word was closer to resolution than its origin, right? >> yeah. we thought we were making good progress and i do think we saw the recent announcement from the director of dixon of the faa that once
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again boeing through dennis mule enberg seemed to get in front of regulators, not a wise move to be telling them what the deadline is. we had a deadline in the late spring we had blown past, deadline in summer, deadline in fall, and dennis was pretty sure it would be before end of the year, but the faa didn't see it that way, and the joint authorities technical review board didn't have the same review either. somehow getting in front of the authorities was not great. we have also a problem of course that morgan has been reporting on on the ground last week, amazing she was there to see this, loss of credibility with the spacecraft, that they couldn't get it to orbit, despite successful launch and landing, is that these things added up we saw the loss of credibility with major air carriers hurting us, hurting boeing that is, that
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southwest airlines and ryan were disappointed that united was making other equipment choices, even american that was loyal was getting pretty frustrated. leadership changes i think will be reassuring to investors and to the flying public and air carriers that they've got a great crew coming in now >> certainly that starliner was focus over the weekend as well one of the comparisons made on the show earlier was to ge and obviously very different companies with very different circumstances. both companies in crisis where a chairman was brought on, then the chairman subsequently became the ceo. what do you think of david calhoun? is he the man to turn the situation around >> it is an interesting parallel, analogy. in both cases, we draw a ceo off the board who is dressed up, ready to take over some differences though, the board that hired the ge ceo that
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was removed was not the board that fired him they had a transition in the board. yet the new board did sign off on the strategy in july, then removed him in september, so he had only until august to execute the new strategy, seems particularly unfair, but it was a loss of credibility there as well in this case, david calhoun, much like kul p, didn't want to undermine the ceo. calhoun is 62 years old, has plenty of run room left in his career they have a president there, greg smith, a decade younger who is beloved that would be a credible successor to calhoun. he is the interim now until calhoun unwinds a few things in his professional life and takes charge but that's a good pairing. then they also have larry keller, very good former ceo of continental airlines as chairman that person does a great job of reassuring the air carriers.
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that's also quite helpful because the air carriers are very discouraged they've got good opportunities to draw on strengths of each so i think it is a little different from ge where you had a board change this case, the same board. >> obviously there's a unique situation with boeing. but taking a look at all of the ceo departures this year, there was a record 1480 ceos that departed through november 1st. is there a bigger picture conclusion to draw about the ceo toepf turnover, whether they're held to a higher standard >> some cases it is conduct, intel, places there are people widely admired had dumb attacks, lost their credibility to lead or some that in fact lost the ability to lead for whatever reason, credibility had run out, and there were some retirements
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rolled into the pack this is a high water mark of ceo turnover it shows us that boards are less likely to circle the wagons and run cover for a ceo under crisis the crisis here was communications and credibility more than anything else. i don't think we see a major change in technology or in strategy or approach, but we're going to see perhaps a different approach to communicating, and three parties dividing it up will make a difference other cases, there was gross misconduct that led to changes that's not the situation here. piled up, what a battery year for the ceo transitions. >> it has been crazy the boeing story will be interesting in 2020 as well. jeff sonnenfeld, thanks. >> sure, thanks. as we head to a quick break, a check on where the major averages stand at this hour. we have green arrows across the board after the s&p 500 and
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nasdaq if all three of these indexes hang onto gains, record closes at the end of the day. a new all-time high for tesla. 4-21 watching that stock, "squawk alley" back after this
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tech in focus, the best performing sector, up 45% year
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to date. as 2020 approaches, should investors expect more room to run for the names. joining us with insights, and senior tech analyst. larry, my question as you look at facebook and google in particular, will we start to see real impact from the regulatory questions that have really been in focus this year but haven't started to hit results yet >> well, i think both companies have seen the activities of the regulators google on a piecemeal basis more than facebook. they have been periodically paying fines in various jurisdictions. i think with both companies the regulation is more or less a side show because at the end of the day the thing that's propelled stocks is three-fold
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the best way for advertisers to reach consumers and digital advertising is over 50%. and i think it is probably going to stop somewhere at 65% that's a powerful thing. the second is the marginal profitability model. these people aren't paying for content. when you get high revenue growth which you're getting, and basically very little marginal cost, the free cash flow ramifications are very, very compelling i think the thing both these companies ought to do is pay a dividend i think the pile up of cash is increasingly becoming untenable and they need to do what apple did a few years ago, distribute some of it to the shareholders i just think the regulation, i pay attention to it, but it is a side show. i think if you were to break
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these companies up, the sum of the parts would be worth more than the market is paying for them now i don't view it as much of a threat. >> do you agree, facebook talked about deceleration in revenue, but a lot of that is about a shift to new business model that's more about communication. you have a lot of questions about whether google will be breaking out more information about its youtube revenues do you think the regulatory threats are a side show? >> i do. i have been saying that all year facebook up 57% year to date beginning of the year, no one wanted to buy it, because of regulatory microsoft, did that impact microsoft? no nothing will impact facebook or amazon or google from a big regulatory perspective they all have the same risk. we have been saying the same thing the entire year. it will be the same issue next year, there will be headlines of lawsuits and issues, but i think you go back to the core, the companies are changing the way we operate our lives, and we
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think they're critical stories with big moats with major competitive advantages that others aren't going to catch them we continue to believe these are still very valuation -- there's valuation support. some software names we cover are trading the stratosphere in terms of multiples this is why google is up 30% year to date they implemented a buy back, doing more shareholder friendly things we think the backdrop still looks favorable for large cap internet, and specifically if you're amazon, given how amazon lagged this year, in 2020, think it can recap tur lost performance relative to other names we cover. >> larry, netflix up 26%, over the last few months, down 9% are the fears overblown? >> i think the competition is very real. i'm looking forward, julia, to
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the fourth quarter release effort two reasons, one, get metrics from disney plus which will blow people away, and the second thing, i'm interested in amortization on "the irishman. it cost $200 million my best guess. wonder how much is going through the income statement the other thing that bothers me about netflix is that the market has been cavalier about valuing foreign subs taat the same valu as domestic subs this is a myth the revenues are a lot lower as new markets are entered, the necessity to con strulstruct lol content that doesn't have the scale economy of english content. foreign growth in my opinion is a much lower quality
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the multiple is still -- you pay three or four times as much for netflix to create a dollar's worth of content cash flow as you do for disney. i'm quite cautious about netflix from here. i think the odds are pretty high it continues to underperform, especially if god forbid we live long enough to see interest rates go up. if interest rates go up, all of the companies have problems. the valuation is a known margin of safety for most investors. >> bret, final word on netflix netflix saying it will break out more granular numbers about subscribers. what's your expectation. >> we don't cover netflix. we continue to believe money is flowing out of netflix into other large cap names from the trading desk, given overhang of other streaming services as you talked about, disney plus. from a trading perspective, continue to see money flowing into other stories that we
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cover. >> larry, brent, thanks so much. >> thanks. when we come back, he has been calling for resignation of the boeing ceo since the beginning. consumer aocdvate ralph nader joins us after a short break ralph nader will join us after a short break.
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welcome back to "squawk alley. in an open letter to boeing's quote mismanagers. ralph nader who lost his grand niece in one of the 737 max crashes wrote, quote, management
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was criminally negligent 346 lives of paessengers and crews were lost. you and your team should forfeit your compensation and should resign ralph nader joins us now on the phone line thanks for being with us today. >> thank you, morgan >> the fact that dennis muilenburg has been fired over the weekend and david calhoun is now poised to take on that chief executive role starting next month, your reaction >> there's several important things to say. i think the departure of mr. muilenburg was precipitated over a week ago when the new head of the faa, steve dixon basically warned him publicly to stop making rosy predictions about when the 737 max was going to be ungrounded it wasn't up to boeing it was up to the faa and that sort of signaled the end of the rubber stamp area by the faa and that it was going to start reasserting itself that sent an unmistakable message to the board
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people should realize that boeing is in very deep trouble, not just with the 737 max. it's continually in trouble with its contracts with nasa, the department of defense and what needs to happen with boeing is a change in the board of directors. there's only one person on the board with any aerospace engineering experience the rest of them are either trophy members of the board or crony members of the board, so what's happening at boeing is a gradual change of executive leadership, the head of the commercial air transport for boeing left a few weeks ago. the chief engineer left a few weeks ago. conscientious engineers are quitting and some of them are protesting or testifying publicly, so i have no idea, morgan, what these stock analysts are talking about pushing boeing up today because the change in leadership shows boeing is in much deeper trouble
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than that company has been willing to admit. >> do you feel that there's another shoe to drop i mean, i think the lines in the company up at least until the last couple of days is that muilenburg should be the man in the job and also from the analyst community, he should be the man given the fact there's so much going on at the company already. the fact that he's no longer in that position, do you feel there's more to come out >> oh, yeah, there's more to come out just like your media and others have reported or dug in and exposed over the months it keeps getting worse when you look at what the statements were right after the deadly ethiopian crash that killed 157 innocents, the first thing muilenburg did was to say the 737 is safe and he called president trump and said not to unground it, and at the same time the head of the faa said parroting muilenburg that the
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737 max was safe so you can see it's been much more troubling news from boeing across the board >> ralph, our colleague jim cramer's point this morning is that the company now needs to bring in someone he suggests ex-military with a high level of experience in plane safety to advise and essentially produce a report that calhoun can then bless but that few people are going to believe anything from the company as it exists right now would you be satisfied with something like that? >> no, it's too little, too late they need a new board of directors with experienced people in aerospace, nasa, department of defense, civilian transport, human factors, engineering, aerodynamic stability. that's what the board is for for heaven's sake, they're paying each board member over $300,000 a year plus benefits. you know, what are they getting for it
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just someone sitting around the table, a board of director's meeting in chicago shuffling through briefing books jim cramer's proposal is too little, too late this is a very troubled company, and it's troubled in the key area of engineering prudence and engineering perfection the whistle blowing engineers are showing it isn't just the design of the 737 max, it's the production sloppiness and recklessness at their south carolina plant, with the dreamliner, john barnett pointed that out, a heralded quality control inspector of boeing and the testimony by ed pearson before the house transportation committee last week indicating similar sloppy production experience in the renton, washington, plant. this is not just a report here you got to have a whole crew of
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very experienced serious people who put nrmgiengineering safetyd contractual honesty with the federal government first. >> certainly you're raising questions that have been swirling around this company and for which hopefully perhaps we are now on a trajectory to get some better answers. ralph nader, thank you for joining us today we appreciate it. >> you're very welcome, morgan thank everybody. staying with boeing, it was a big weekend for boeing at 7:58 a.m. eastern on sunday morning, boeing's unmanned star liner touched down at the army's white sands missile range in new mexico a successful ending to a botched mission in which it failed to dock with the international space station. so hurdling at 25 times the speed of sound, that's what you can see happening right there. about a mile above earth in the dark, those three parachutes deployed, a procedure that challenged boeing in the past. starliner became the first orbital capsule to land on land. big question now, what happens
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next the malfunction on friday was software based, a clock error. still on a call yesterday, boeing officials saying once they gather the data, they expect 85 to 90% of test objectives to be filled. what does this mean for humans getting aboard we'll expect analysis to take months then nasa -- boeing would presumably pay for meantime experts say this puts spacex, and is also in nasa's commercial crew program in the lead depending on its own safety tests next month to become the first to take astronauts from u.s. soil to space in more than eight years, and guys, for betters or worse, right or wrong, too soon, more information needed, et cetera, one of the ties. one of the connections that has been made by folks in the aerospace industry over the weekend was the fact that this was, again, a software and automation issue again bringing it back to that debate around boeing and its engineering
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capabilitie capabilities that said, not a failed mission. just failed aspects of the mission. we'll see what kind of data they can collect and how nasa moves forward with this in general now. >> we did have -- sheila did suggest it had something to do with the timing of mullingberg's departure, but we're going to have to find out more regarding that maybe from phil >> i'll see you on "closing bell." >> yes, i'll see you thanks so much, i'm scott walker, front and center, the stocks having a december to remember and with a new year just around the corner, what happens next? that's what really matters it is 12:00 noon, and this is halftime report. >> the record rally rolls on stocks hit new highs ahead of the holiday with the nasdaq trying for its ninth straight day of gains. plus, the new call on apple. that stock getting a big price target boost one analyst says the iphone is on the verge of a super cycle. it's our call of the day


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