tv Tech Check CNBC August 2, 2021 11:00am-12:01pm EDT
>> i did not know the correct responses to any number of clues that i was actually dealing with of course, they give them to you on a big thing i tweeted out a picture -- >> giant all there. so i did know them going in. >> look forward to it david. >> please, hope everybody will tune in. that will it do it for "squawk on the street. "techcheck" starts now good monday morning. welcome to "techcheck. i'm carl quintanilla with jon fortt and deirdre bosa back at one market today jack dorsey decides to pay now more on square's $29 billion acquisition of after pay then more disney drama as streaming continues to up end the hollywood establishment. later on, a controversial new book on tesla is out tomorrow.
and the author is going to join us this hour, d. >> happy to be here, back home in a revamped one market with the bridge and the embarcadero to my right. square paying $29 billion at an all stock deal for australia's after pay, pushing further to the growing buy now, pay later market that price tag about a 30% premium to after pay's last closing price. the ceo was on "squawk on the street" earlier. have a listen. >> with after pay we have the opportunity to strengthen and closely connect our ecosystem which serves millions of merchants and cash app which serves 70 million active consumers on an annual basis, together we can create an even more powerful commerce platform connecting the two >> square's up big off of that announcement more than 10%. and, of course, the surprise of its earnings, record growth
profit for the quarter up 91% from a year ago. jon, what i found interesting is part of the key attractions was a growing wariness to traditional credit from younger consumers. i got to say, i have lived in the u.s. for five years, i have not had a credit card or felt the need for one with the debit card i understand this movement and how a lot of folks, especially in a millennial and gen z demographic don't need the credit cards anymore. >> you got to build credit if you want to interact at a certain level in the consumer marketplace. home buying, car buying, that sort of thing. and that credit score becomes important. but these companies includining klarna, affirm, up 10% with square, have a different take on this market. it seems what square is off here is perhaps relationships with larger sellers, right? square started off appealing to small sellers, but get larger
sellers with some of these relationships and bigger deposits from the consumers that they interact with but, you know, investors should be aware that these buy now, pay later companies specialize or focus in different areas of the market, interesting after pay is in those smaller e-commerce pay for transactions if you look at, say, affirm, who we had on this show, lots of times, they tend to deal both in that level and in larger ticket items like peloton, which has been their largest partner for a while, carl. so i understand why square wants to move into this area i think as economic conditions shift over time, perhaps interest rates go up, we'll see who has got the best approach to this market. >> yeah. the peloton affirm thing, which we mentioned in the last hour, has cut both ways. it has been a great business for affirm, but also led some to believe they're too lopsided on the one vendor it reminds me of coming off of last week where so much of our
discussion was about robin hood and this age divide within financial services this is one more chapter of that. >> there is a lot of, you know, companies in this space, buy now, pay later we'll talk to klarna our next guest says that square's buy now pay later play could set it up to be the jpmorgan of the future joining us now, dan dolav. he covers the buy now pay later company affirm, mastercard and visa we talked to a few weeks ago, but here is my question, it is not like the traditional players like jpmorgan don't have these products jpmorgan launched its own buy now pay later. i believe last year. has it gained any traction why aren't they really part of this conversation? >> i think that's -- you're hitting the nail on the head this is the issue. some of those legacy guys, you know, like the so-called guys
that -- the old world, they don't really understand the pause needed to get these customers. you talk about the gen z and the young millennials. they're combining rap music as part of their cash app they bought jay-z's title. they're creating a ecosystem that is more than payments, more than a solution, it is the buzz and the appeal and it makes it really sexy and that's why people want to use it. that is the story of square. they make it -- they make people want to use it, not just having the solution is not enough >> so, dan, do you think any of those legacy players were looking at an afterpay or could be looking at an affirm now? >> i think this is really interesting and we're seeing the move and we have a bio on affirm as well. i think that the -- it is going to start, i think in m&a interest in the space, right people realize that following this deal that, you know, buy now pay later is a huge secular
growth driver in the u.s., $10 trillion online payment. i think this is a game changer for square, but also for the entire industry and on the other side of it, for the traditional credit cards, right? no one is thinking about that. what is going to happen with this traditional credit as young people don't really use it we mentioned we have been here five years, we don't have a credit card, i think that's really interesting >> yeah, and it leads us into what jamie dimon has said about the threat of fintech, dan, to legacy banks and this makes perfect sense when you think about it that way. i guess the question would be are you on the lookout for a large response in -- through m&a from the big banks or whether or not regulatory guardrails will keep that from happening the way they want? >> i think the large banks are going to be probably trying to get deeper into this space i feel like it is more of a me too thing. i think that is that train that has left the station and it is going to be very hard for the legacy incumbents to come back
and compete with the squares of the world and the paypal, we didn't talk about paypal but they're doing a good job too their volumes are up 50% quarter over quarter in the second quarter. so the new age guys, the fintech apps, the jpmorgans of the future are clearly winning and i expect that gap, the bifurcation to be bigger and bigger over time. >> what happens when interest rates eventually rise and the cost of capital for some of these buy now pay later payers goes up and the demand for their services also goes up as some of the millennial and younger consumers who you were talking about don't want to pay high interest rates on credit cards, unlike the kind of deal that these companies offer. >> right, and that's a good point. when you think about the journey of square and the reason we're so bullish and we published that note of buying jpmorgan and 1871 a couple of weeks ago and talked about it is because they're going to become a full fledged bank offering different services on the one hand, you're lending
and the interest rates are high, but on the other hand, you also have the deposits with higher interest rates it balances itself out and i feel like that having that, you know, multitude of offerings is going to make it very derisk when it comes to interest rates. after payments on its own has a lot of credit or more credit risk than other companies. but with square, with all the other solutions and, remember, the closed loop system basically -- the rivalry to the incumbent networks, that's the holy grail and that's what square is going after. the sellers, the merchants and the users. it is more than just one single product. it is the complete set of products that makes it so attractive and not as risky as people think >> yeah, and, dan, on that point, talk about the data collection aspect of this or how sort of that proposition is changing, the buy now pay later companies are looking at a different set of metrics, that's
my understanding to reduce their risk in case we do see larger amounts of default does that put them in risk from regulators the bank of international settlements said fintech should be more regulated and has to do with the data piece. >> there is always a concern there. i feel like the data is so important and i actually think that the data should be good for regulators because it, remember, the regulator is looking to prevent another financial crisis and the data, this very granular data, both on the seller side and also on the consumer side with cash app is essential to reducing the overall risk of the consumer defaulting. so i think that if i were them and i'm sure they're doing the same thing in d.c., they would be pushing to say, hey, the data makes us better for the economy because we're reducing the risk of these people creating another bubble like we in 2008 that's a good thing, not a bad thing. >> that's an interesting point why it is so unique, because
square brings together both of those. great to hear have you we'll talk to you again soon thank you. >> my pleasure thank you. the ceo of klarna, a $46 billion competitor in this space, is coming up. plus, affirm's max levchin will be on closing bell this afternoon. "techcheck" is back in a moment. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.
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300,000 robinhood users bought shares in the company's ipo last thursday that's about 1.3% of its funded account base robinhood shares are up nearly 4.5% this morning, though still a few dollars shy of that $38 ipo price. >> yeah. and just days after scarlett johansson filed a lawsuit against disney over the release of black widow, jungle cruise sees more than a third of its revenues this weekend come from disney plus. julia boorstin has more on hollywood's streaming strategy and the backlash julia? >> well, jon, this is all part of a complicated battle over the future of film distribution. "jungle cruise" which cost an estimated $300 million to produce and to market, it grossed $34 million in the u.s. box office, plus $28 million overseas as all those markets
feel pressure from the rising delta variant and it grossed $30 million in digital sales from disney plus. now, the question is how much those ticket sales were cannibalized by the film's availability at home, and how much that at home availability drove piracy move et nathan son warns this will all lead to a negative cycle, lower box office, leading to more digital distribution, that leading to more movies shifting to direct to consumer, which puts pressure on the box office again even with the streaming revenue, the film did fall short of pirates of the caribbean, which disney had hoped would be a model and would -- this will make it tougher for "jungle cruise" to reach profitability disney is focusing in on that $30 million streaming revenue number it is only the second time in shared streaming revenues because stars will share in that revenue as well is at the box office they're not set to share in the overall subscription revenue that disney gets from disney plus now, all of this is at the center of the lawsuit filed
against disney by scarlett johansson on friday. sources across hollywood tell me they are watching this moment as a turning point for streaming's rise that could potentially limit stars outside. one other key thing to watch is that "jungle cruise" is meant to be disney's last simultaneous release for a while now with marvel set to have exclusive theatrical windows so we're watching to see whether delta shuts theaters down and can push disney to reconsider that plan and release the films simultaneously if they're legally able to based on the contracts. the question is what kind of payments they have to make to those stars to deal with their frustrations speaking of disney, shifting gears, over to a deal with two former disney executives, tom stags and kevin mayer. they are going to run a new firm backed by private equity giant blackstone and that company is buying out a majority stake of reese witherspoon's "hello
sunshine" valuing that company at about $900 million according to a source familiar now, witherspoon and "hello sunshine" ceo sarah harden will join the board of this new company and continue to run hello sunshine, which produces and sells female driven movies and seriesacross platforms lik "the morning show" on apple tv plus and "big little lies" on hbo among others this speaks to the growing demand for content, particularly by streaming platforms as this whole battle in the transformation of the industry plays out. carl >> incredible, kevin mayer is everywhere as well julia, thank you julia boorstin. joining us to weigh in on the debate, cnbc contributor kara swisher good morning good to see you. >> good to see you >> i've been wondering what you made of the johansen lawsuit there was maybe some
liabilities. you said on twitter you thought it was a smart take. >> it was an essay in the hollywood reporter pointing out that a lot of the -- a lot of the stuff just because they have done things a certain way doesn't mean they have to and some of the legal language in her contract seems to suggest that disney could do what it wanted to do here, especially because of the pandemic. disney made that comment when they -- i thought their comment was a little classless when they were talking about her being, you know, using covid as an excuse, but covid is an excuse and it changed everything and allowed studios to accelerate what was already happening, which was a move to streaming. and this is something i said a lot, i wrote -- i interviewed jason kyler of warner bros. when he did it. people in hollywood find it irritating, but everything is going to streaming and so this would be part of the equation. not crazily unlike when it went to cds or to vhss. this was -- and it is figuring out where the economics is here is really where the rubber hits the road
that's what they're arguing about and not about previous ways people have done business for all intent and purposes, streaming is going to be at the center, not theatrical and that's how these companies get judged, you look at how much disney went up when it talked about streaming or when it talks about growth and streaming and that's what wall street's interested right now, not about how many tickets they sell at the box office though that's great. >> the flip side that i've seen lately is that the power of the agency at caa would allow actors to sort of collectively argue for perhaps more i wondered is that -- is this all going to get smoothed out. is it a natural growing pain as distribution changes so dramatically >> yeah, i think the agents are trying to show they count still. at some point they're fighting between agents and the stars too about what their value is. i think someone like brian lord, who is a really important agent in hollywood, he's going to fight for his client i watched all the seasons of "call my agent."
i'm in that mode but one of the things that is important here is this is the way it is going. new economic models have to be shown. there was a very interesting thing in the interview with matt damon where he talked about movies not being the same they were and they're going into superheroes where you can interchange the actors and star vehicles don't necessarily -- matt damon movie is not what people want. it is a -- it is whatever it is. it is not robert downey jr., it is "ironman. you can switch him out i hate to say that he's charm and great in the part, but he's not what makes the stories. that's where it is going that's what's worrisome. if you go even further out, i tweeted a story this week about youtube stars that are completely fictional like their stars, stars on youtube that are voiced by real actors, but they're made up in a virtual world. you can see where this is going. and so stars have every right to be concerned, they should be paid for their contribution to this, but it is -- the advantages with the studios and
the technology companies at the same time that are making these things and, you know, the technology companies are moving in here relatively soon, i think, in a couple of years. >> i don't know about the robert downey jr. thing i know it is an ironman mask and who cares who is behind it but i think he's adding more value than the studios are recognizing and that leads me to this question, kara, i have, which is that studios don't seem to be valuing actors' contribution to streaming and the dtc model and kind of overall power that that is going to create the way that wall street is. so maybe the answer is to instead of just cash, structured deals where they give these actors equity, right, so that if these platforms really do gain value over four or five years, then the contribution that they gave at this point will also be worth that much more i don't know if the actors will go for that. >> i don't know. are you worried about your own contract some day it is going to be a virtual you and me i'm teasing. i don't. i don't think.
i think -- they're important but not as important as story telling in the end i watched the scarlett johansson movie this weekend actually, it is a very good movie, but i -- i wanted to watch it in streaming and waited to watch it in streaming and i enjoyed it that way. i didn't think it would have been better in a theater necessarily. so what is the contribution? i think that's going to be hashed out it will all depend what does well and what doesn't do well and as they figure these things out, the advantages in the hands of the studios it just is or the makers of these things, not necessarily studios, the makers of these things the reese witherspoon thing, she's very entrepreneurial whatever that number is, i don't know if it is 900 million or whatever it is, she's done something entrepreneurial and every single person, you and i talked about this, the reporter, whether they're on tv, whatever they do has to be entrepreneurial in everything they do. she's a good example she's a star she makes things, she creates things, she's indispensable. if you're indispensable, you do very well in this new system
if you're not, you're interchangeable, you got some problems there i'm sure you'll milwaukake a lof money but it won't be the same thing. >> you're living proof of all that fascinating showdown between a huge star and huge company talk to you soon. >> yeah. thanks a lot >> kara swisher. coming up, the author of a book that has some anecdotes about tim cook and elon musk the author of "power play" is coming up next stay with us competition beat us again. how? they have a better finance system than we do. i feel like they might have a better finance system than we do. workday. how do they make better decisions faster? workday. it's got to be something workday. i think i got something. work... hey, rob, you're on mute. hello! hey, rob, there he is. workday.
it's all included with 2 lines for only $70 bucks! only at t-mobile. welcome back to "techcheck." we're resetting at the bottom of the hour i'm carl quintanilla with deirdre bosa and jon fortt the $46 billion payment firm taking on square the ceo of klarna is going to join us in a moment. first, a news update with rahel solomon. >> good morning. and here's what's happening at
this hour. stocks are starting august with solid gains, that's despite slowing growth in the manufacturing sector and only a small rise in june construction spending. rise in private sector projects was mostly offset by shrinking spending on government building programs andrew cuomo mandating that transit workers get vaccinated or submit to weekly covid tests. also recommending businesses make sure that their customers get their shots before letting them in the door >> private businesses, i am asking them and suggesting to them go to vaccine only admission. i believe it is in your business interest to run a vaccine only establishment. >> and u.s. air travel hitting another record on sunday the tsa reporting over 2.2 million travelers going through its checkpoints, the most in a single day since the pandemic began. it is the first such record in
two weeks. deirdre, i can personally attest to some very busy airports right now. at least over the weekend. back to you. >> i can attest to that too, rahel. thank you for that back to the square after pay acquisition news, let's bring in a major payer in the buy now pay later space, $46 billion, joining us now is klarna co-founder and ceo sebastian siemiatkowski. it is great to see you again especially on the back of this news what do you make of this deal? does this stiffen competition for yourself growing your footprint in the u.s. >> well, i think, look, i think it is very natural we're looking -- we believe strongly and i believed for a long time this decade is going to be the upheaval of this banking industry we're going to see a lot of new player coming, finteches are growing. banks are trying to reinvent themselves and we have as also recently announced the big tech fair is trying to move into space. this is an extremely exciting time
i'm a little bit surprised to see consolidation happening this early at this level. but from that perperspective, b think it is directionally what we're going to expect to see banking industry is a trillion dollar industry and it is -- has been stuck this is the decade of the destruction of that. i think this is some early indications of what is going on. >> sebastian, you said you're surprised to see consolidation this early you're a big player, you got a big valuation, north of 40 billion. have you guys been approached, what are your thoughts in terms of m&a activity and going public and what you ultimately want to achieve at klarna? >> well, we have done acquisitions of some size and we know how difficult it is and how time consuming it is and to get companies together and so forth. right now with the trajectory in the u.s., getting close to 20 million users, growing at 150% rate, we're seeing credit card debt drop in the last year, due to covid
transformationally everything is moving to debit, which provides the opportunity for us to grow massively. so we're very, very focused on scaling and growing in the u.s. market and globally and adding more markets so we're very, from that perspective, we're in the necessarily sad that some other people who will be stuck with figuring out how to work together for a year or something. >> sebastian, give us your assessment of what the most important strategic capability is here for a buy now, pay later player is it the ability to assess credit worthiness better than your competitors is it access to capital as interest rates perhaps rise? is it relationship with key retailers? >> good summary. i think at the very end it actually comes down to very simple question. you go to a check out, there will be all these buttons, apple pay, google pay, klarna, paypal, whatever, visa, mastercard, which button do you pick and
why? why would a consumer prefer one button over another. that's the key question to answer we have been trying to add as many reasons as you can. once you select, like, yes, you know, low financing costs, we're at fully regulated bank as we have access to deposit and low rate, that's important, being really great at underwriting is important. but beyond that, it is even more things like we, for example, every transaction we process has skew level data. we have the full digital receipt, meaning you as a customer compare your credit card statement, you understand what you purchased, you can see images of the items you bought these are the things that driv that preference and is going to, you know, decide which button people come to choose when they come to that checkout in the future >> it is interesting, sebastian, the growth right now at least is happening in a period where household balance sheets are relatively pristine, right relative to history. savings rate is double digit or was until a couple of weeks ago. do things really change in the
industry when we start to see stresses at the household level or not >> well, i think that, like, not necessarily, so people tend to forget about buy now pay later the traditional credit card industry is built on the idea that, like, hey, we stuff credit down your throat and try to make you max out on that credit card and use as much as possible and then unfortunately you may default on it. buy now pay later works differently. we give people credit. if they do that well, we give them another $200. every transaction is a new decision it is much safer from an underwriting perspective and we turn around thebalance sheet 12 times a year it is a very different type of length of the lending and all of these things makes these companies much, much better, well suited for any type of issue from a financial perspective in that sense. and i think, again, consumers here, they are tired of the credit card industry they're tired of these overdraft
fees, the studies in u.s. suggesting 17 -- it is one of the most affected -- in the u.s. currently. >> i want to go back to what you were saying about which button the consumer picks i understand that from the perspective of volume you got coming in the door but it seems to me that of all of these buy now pay later players, once you've got that volume, you got to be able to handle it in a profitable way. you've got to be able to deal with the loans and defaults which are going to happen at some rate. so at what point do you expect the pressure really comes on, the whole industry to show who has got the best data, who has got the best technology to actually do this profitably? >> it is a great question. but, look, i think, you know, from my perspective, what is interesting with klarna, we were very different when we started the company. we were profitable for the first 14 years of our existence. we are profitable on the gross
profit level and the only reason we're -- because we're investing so heavily in growth and new markets. i'm not too worried about it from my perspective. but there are other players out there that you can be a little bit more worried about whether they will be able to sustain their margins and how it is going to look going forward. i would agree with that. we're the second largest, 100 million users worldwide. it is not necessarily something that i worry for us, but i would agree with you that it is something that could come to question in the coming years >> sebastian, a few moments ago you mentioned big tech is moving into this space. there was that report a few weeks ago we talked to you about apple moving into the buy now pay later space. you didn't mention traditional banks or legacy players that are also rolling out these products. do they worry you? do you think they can gain traction in this space or what are they doing that maybe isn't making them part of the conversation >> well, yeah, i think, look, it
is typical i think people tend to underestimate just how different these products are and what value it brings to consumers it is always -- it gets a label like buy now, pay later and everyone thinks it is -- it is so much more around hat. and i think that some banks obviously with this massive transformation that we're going to see in the banking industry, i think very similar to what we have seen in retail when e-commerce kind of loan, there was ups and downs on the stock market, how fast that chamber was going to come along. today it is a fact of life i think we're going to see similar shift here, when some banks are going to try and maybe some of them will be successful, but the problem is the business models are broken, the business models are built on trying to get consumers to pay late fees, and overdraft fees and lure you into high interest bearing accounts that's the key fundamental problem. it is not that they cannot deploy the products. it is that these products are actually challenging the very core of their business models,
which is not that dangerous to the consumer, but in interest of themselves that's a big challenge for them, you are to reinvent yourself, challenge your own revenue streams. that's tough that might be difficult. this industry is too large it makes too much money. >> yeah, that's why ceos like jamie dimon have their eye on square and some other incumbent finteches. sebastian, thank you for being with us as always. >> thank you want to stay with the story, reality check on square. specifically the stock price market cap is now well over $100 billion. can the company justify that kind of valuation? dom chu is looking at the numbers. >> well over it is closer to $130 billion with today's price moves here. but that conversation with klarna's ceo highlights this notion when we talk about financial technology companies like these payment firms like square, klarna and others, it has become much more of a conversation about the financial
side of things we heard a lot of mentions of margins and credits and loan losses and that sort of thing in the last conversation with sebastian siemiatkowski. how does it compare in terms of overall valuation with the overall market square with a doubling over the last year is now again worth about $130 billion in today's trade give or take a little bit based upon the market movements. that's a massive move for square if you take a look at that in comparison to some of the other parts of the market you will see with it, check it out versus some of the others, say, in the industry overall if you look at it versus pay pal, over the last year, handily beating paypal interms of over the last 12 months, the performance, and that gap here is just about growing. so paypal very much the large, large cap player here. it is up 330 plus billion dollar company at this point. paypal is the benchmark right now. it is still worth a lot. but square is catching up pretty quickly. it has a lot of room to grow, though market valuation wise. let's look at the financial side of things. how does it stack up market
value wise to some of the biggest banks on wall street well, jpmorgan is currently worth just about $465 billion. goldman sachs is about $130 billion in terms of overall market value just putting it square right beneath it and u.s. bank one of the major banking side of things worth about $83 billion, to give you relative context to where square would be as it becomes a little more of a lender each day. and then from a valuation perspective, carl, john, deirdre, it traded at a rich premium. right now, square is forward priced to earnings ratio what next year's anticipated earns are going to be, currently 140 times or so next year's multiple if you look that the square versus paypal, paypal closer to 50 so, yes, there is a lot of room for this kind of thing to grow into, but the valuation is going to be a key concern. it is not as bad as it was a few months ago north of 200 at that point
still, though, a huge thing to watch trend wise for valuations and fintech. back over to you guys. >> great charts. great work thank you. dominic chu. a controversial new book on elon musk's tenure at tesla is out tomorrow the author is going to join us today in a moment when "techcheck" is back in two age before beauty? why not both? visibly diminish wrinkled skin in... crepe corrector lotion... only from gold bond.
welcome back could we be set up for weakness in video game stocks b of a seems to think so b of a wrote, worry about the app player engagement bubble bursting as it has for other consumer apps. atvi is down 12% in the last month. worst performer in the -- except for chinese stocks you can see some of the signs in the earning we got last week user weakness at pinterest, spotify and twitter. facebook's user numbers in the u.s. were below consensus. tower data shows app downloads are slowing. key question, will that softness cross over to the top gaming companies this week on the bullish side you can point to strong snap numbers and apple posting a big beat on services revenue. these stocks have already come
down a lot already there is that to consider on the valuation side >> you just did an on the other hand how did we miss that opportunity? nice one on the other side of the break, one new way to bet against cathie wood. we explain next. stay with us i think you're going to like it here. umm, why is everyone... throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday.
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alphabet best performing faang name over the last month, up over 10%, and the best faang name in 2021, july marking the seventh straight month of gains in alphabet's best month since april. worth noting as well, it was the only megacap tech name that was actually positive last week on the big week of earnings. >> yeah, and maybe one of the best earning calls of the group for the quarter. that's for sure. one investor planning to make a big bet against cathie wood and the arc fund, total capital management to launch the short arc etf which would take the opposite side of the $23 billion arkk innovation fund, which has been a big winner since the pandemic lows of march of last year up more than 200% top holdings include tesla, teledoc, zoom and square year to date, the etf is in the red. telling bloomberg they want to give traders access to the short side of a long list of unprofitable tech companies which they may not be able to bet against on their own the fund would trade under the
ticker sark, current short interest in arkk over 4.5% of outstanding shares one more tool to use, if you keep your eye on arkk flows now. >> yeah. well, one of them is going to win, that's for sure missed part of the show? how could you? don't forget to follow and subscribe to "techcheck" podcast. you can listen anytime, anywhere, wherever you download podcasts "techcheck" is back in a moment.
welcome back a new book out today or maybe tomorrow, not sure we'll find out the come from behind story of elon musk and tesla's bid to build the world's greatest car with us is the author, "wall street journal" reporter and cnbc contributor tim higgins is it today or tomorrow? >> it is tomorrow. tomorrow, on amazon or your local bookstore. >> first thing we got to talk about is the biggest controversy i've seen yet out of this, involving an anecdote about elon muskand tim cook and a conversation on apple's side of things, i'm hearing, they say, and tim cook has told kara swisher he and elon musk have never actually had a conversation elon musk is saying the conversation relayed in the book didn't happen. what do you think is the case here do you think elon musk told a story about a conversation that
didn't happen, what? >> yeah. what's important about that anecdote is that this is what elon musk was telling members of his team it is important for two reasons. first, it comes at a period when the company is in trouble yet again. earl again. early 2016, the production of the model x suv was a mess the stock was tanking. it's easy to understand that some people inside the company were hoping for a savior like aple to come in and musk's message to them was clear. they orp their own the company had to figure it out. second, it's important because, it's one of several examples in the book that illustrate how musk's ego and bravado were increasing with every public success, putting the company in greater and greater risk and that risk in 2016, he was making decisions such as acquiring solar city, making claims about tesla's autopilot capabilities and pulling ahead production of model 3 that put
that company on the road to potential bankruptcy those are decisions that people around him were warning against because of the risk. the company was already taking on a lot >> i don't have the book in front of me so i don't know 23 you presented this as something that definitely happened or a story definitely told. what is the reader, the audience to take from this given there's been time in the recent couple of years that elon musk had presented as the toughest of his life when his confidence and bravado didn't seem quite so strong >> elon musk says a lot of things, right? and in the past he's talked about having funding secured to take the company private something the s.e.c. has said was misleading he's talked about having a million robot taxis on the road which hasn't happened yet. in this book, i explore those kinds of things that the layout, how he was essentially trying to will into reality his vision for the future of cars
and that reality and that effort was messy. it's dramatic. and why i think the readers are going to have an opportunity to better understand why some of these dramatic things we saw over the past few years were occurring. you'll see the pressure that he was under. the pressure the company was under and it provides some insight into why he does what he does >> messy and dramatic but he's achieved so much i wonder, having studied what musk did and the challenges he overcame in terms of manufacturing and with batteries, what does it tell you about the legacy automakers trying to play catch-up in the space now? >> this is a remarkable thing about this book. when i started out in 2018 working to write this book, i thought it would be a story about the collapse and end of tesla. but in reality, it became one of the probably most dramatic corporate turn arounds in a generation and the one thing that becomes clear is that elon musk's vision for the future of cars has won the day. general motors, volkswagen,
mercedes and many others are betting their fortunes now to catch up to put electric vehicles on the roadway. >> tim, i wonder when we think about musk's legacy, even though he's got plenty of years left to work, if there are a generation of other ceos who are now trained, i guess, or at least comfortable with making grandiose projections about their businesses and whether or not they'll run into trouble or whether musk was just a singular talent in a singular industry at a singular time. >> yeah, a lot of people always want to talk to me about, why is it that tess low -- why isn't this a fraud and the key thing is the model 3. i've driven it you can go buy it. it helped contribute to a record profit recently more than a billion dollars. the company is on the road to making more money. now it -- has it had problems, raised eyebrows, is it methods questionable to some people? without a doubt. but getting into the autoindustry when this company began, the idea of a start-up
changing the global automotive landscape was rather improbable, if far fetched and now, you know, all of this time later, the company, the world's most valuable automaker is kind of setting the road for the future >> tim, have we figured out as a society as watchers of the mark w et where that line is for ceos between setting targets that are a stretch for engineering teams they think is impossible that the ceo thinks they can reach. things we've seen steve jobs, elon musk and others do and some of the things we see some companies doing now, which is saying things about the product, not just setting targets that are ambitious but saying things that just aren't true in a way that investors might, you know, is fraudulent. have we found that line? >> clearly a challenge and also an ongoing drama throughout the history of tesla that really, you know, in a lot of ways changed the culture in 2016.
readers will see that up until that point, a lot of elon's stretch goals were in some ways inspiring to people. they didn't know they could do it but they were going to try and they were surprised they could. in 2016, musk starts to talk about things that people inside the company don't think can actually occur i'm talking about the idea of fully self-driving cars in the timeline he's talking about. that left some people with a pause and concern that maybe he was pushing it too far and caused tension throughout the company. so it's one of those things that tesla has even struggled throughout for all these years and at this point, it has worked for tesla. it's worked for elon musk. >> and it has worked mostly for the stock as well. tim higgins of "the wall street journal," author of "power play: tesla, elon musk" out tomorrow thanks for being with us meantime, looking to avoid a dent in your portfolio this earnings season? these stocks regularly miss
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new calls on the street this morning. haskett initiating uber and doordash as buys a 50% swing to the upside. calls uber's freight division an under appreciated business for doordash, it's a price target of 206. more than just a covid winner. the firm says the dash is a long-term play on a secular change toward convenience. hasket not so bullish on lyft. keeps the stock in neutral for now. a lack of covid hedge the catalyst there uber is down double digits for the year, but both dash and lyft have risen by at least 15% one headwind that could turn that around and that's new york city our friend laura foreman at the journal writes this morphing that the big apple is looking to take a big bite out of food
delivery passing five bills recently that would shift some of the power away from food delivery platforms like grubhub, doordash and uber and into the hands of struggling mom and pop shops. one bill haved around extending the temporary caps on the commissions that uber, dash and others can charge restaurants until early next year. these are stocks we continue to watch. let's get to "the half." >> thanks. welcome to the halftime report i'm scott wapner what august will be to your money as delta cases surge and some say this sas good as it gets for stocks and the economy. we debate the month ahead with our investment committee joining me are the following -- brynn talkington, joe terranova, john lebenthal the ten-year note raising eyebrows 1.15 jim, your comment to our producers got my attention i'm all in, you say. all my chipsor