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tv   Tech Check  CNBC  August 24, 2021 11:00am-12:01pm EDT

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watching today but bernstein says a large retailer doing local deliveries is a different business than they have. david, back over to you. >> all right, frank, i'll take it, thank you. that will do it for us on "squawk on the street. let's get over to "techcheck" which starts now good tuesday morning welcome to "techcheck. i'm carl quintanilla with jon fortt and deirdre bosa benchmarks bill gurley talks some prop 22 and uber. that's just a couple of moments away then ten years of tim cook, apple in the last decade, in the theory on cult capitalism. later on, shopify's partnering with tiktok. president holly finkelstein on investing in social commerce, d. >> and, carl, we also have
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another rally on our hands here. the nasdaq and the nasdaq 100 hitting new intra all time highs. the nasdaq, 15,000 for the first time ever, led by chinese internet stocks amazon and alphabet today the clu up a full percent and as i look at some of the chinese names, they are roaring back alibaba up 7.5%. pretty remarkable come back, but still what a world of pain they have been in this year. >> yeah, those chinese names worth watching so is palo alto networks take a look at that name it is up nearly 20% post earnings i'm looking at it now. just right around just shy of 19%. had some stumbles earlier. this puts it solidly in the green, carl. it is an interesting market, palo alto and the networking side around security has some products that are relevantto
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what investors need to pay attention to speaking of what investors need to pay attention to, we talked about this yesterday, we're going to start today with uber, lyft and the ruling by a california judge that prop 22 was unconstitutional sure to be an appeal here, but this puts labor costs and maybe even some gig business models back in the question mark column just as some investors thought this contractor versus employee issue was in the rear view mirror former board member bill gurley of benchmark joins us now. good morning. >> good morning. thank you for having me. >> i want to talk to you about this tim cook ten-year anniversary thing. you guys -- you and i were going back and forth over twitter and dm talking about the significance of that first, let's talk about this gig economy issue. it is a sticky wicket, isn't it? how do you end up solving this aside from years and years of litigation and, meanwhile, you know, the issue of how drivers
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get paid and having enough drivers, that's been tricky for uber too. >> yeah. i think the really important thing is for people it put this in the right frame of mind and there is one big issue that i don't think is talked about enough, which is, you know, if you pull the drivers, they're not looking for any changes. they're really happy with the flexible work product. if you look at the voters of california, they stepped up and voted and made it very clear, in a state that voted 2-1, you know, in favor of biden, they came down very strong, 60-40, they didn't want this to happen. and there is one entity that is really been pushing this the whole time, going all the way back to '85, that's the sciu it is a single union, but to call them a single union understates it because they're the granddaddy of special interest groups. i sent along some data, maybe you can put it on the screen they spend more money lobbying than any other organization in our country.
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and have for many, many years. they only represent 2 million members, but oddly those members are in hospitality, healthcare and government services. they're not even in this industry so they're taking the dues from their members, and using it to fight these battles because they want to expand their footprint, what they're really after is putting $400, $420, which is the minimum member union fee for the 2 million they have, they want to expand that to these drivers, so they don't actually want to help them, they want to add to their costs. but they're the -- they're the one that has been pushing this the whole time. >> i think there is a bigger issue here, because you talk about the sciu and the gig economy issue here with prop 222,22 makes me think of the teamsters taking on ware houses as well. that vote in alabama was defeated, but the fight continues. jeff bezos and now andy jassy and amazon set up that they need to be the best employer in the
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world for safety and for workers in general doesn't tech need to get ahead of these issues to innovate when it comes to labor, just as much as they have innovated on the revenue and convenience line >> yeah, well, the truth of the matter is i would say they already have so if you poll drivers for any company, you know, food delivery or ride sharing, the thing that they love the most is the flexibility they have. they can go to work whenever they want, they can go to work whenever they want look, we are in an environment where there are massive job opportunities everywhere amazon is paying $3,000 signing bonus, if you go to work there mcdonald's has a $300 bonus. there are 50,000 jobs availabl at taco bell if any of these drivers were completely upset with their current situation, why wouldn't they just go take one of those jobs and i'll tell you why, those are shift jobs and those shift jobs mean you have to be there at a certain time and leave at a certain time
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and driving for uber or lyft does not have that this is the equivalent of the -- we see zoom and talk about people that don't have to hybrid work environments, live wherever they want, that's white collar flexibility. this is the same thing for entry level jobs and it allows people to go through school, to pay down debt, to work as a stay at home parent, and all those things are happening and that's what they love and the sciu wants you to go back to 20th century shift jobs which is really dumb there is so much more innovation coming >> bill, they are taking those jobs amazon hasn't had a worker supply problem, the gig economy has. amazon has been on this incredible hiring spree and they say it is because they provided benefits and better pay, but the ride sharing companies in particular, they're having to spend hundreds of millions of dollars to try to get drivers back on their platform and the drivers aren't going back in enough numbers. >> well, look, there is massive
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unemployment everywhere. but 15 million people in the country -- >> that's not what you just said. >> 15 mm pillion people that th country drive for the platforms. did those people just -- were they forced to gunpoint to take those jobs where did they come from why are they choosing them they could go take those other jobs they could go to mcdonald's, starbucks. if you go to starbucks, you have to work exactly when they tell you when to work what if the sciu spent their time trying to get flexible work opportunities for their hospitality workers or their government workers but why isn't that feature something that people should be allowed to want? >> my point, though, is that they are taking those jobs, especially in the case of amazon, which touts those benefits either way, bill, i want to move on you did point out that union efforts have been aggressive, but you leave out the fact that the gig economy companies have spent so much money, $200 million on their own campaign,
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making it the most expensive ballot initiative that we have ever seen here in california and regardless of what happens, in california, whether prop 22 is overturned, this is their playbook for other states in places like massachusetts and new york doesn't this complicate the legal picture and potentially increase those costs, especially for a company like uber, which still hasn't achieved positive adjusted ebitda where its rivals have >> i think it is a super interesting time, especially if you look at california so the voters as i mentioned came out overwhelmingly in support of prop 22 60-40. they're sending a message to a state where you had a single party rule, and a whole bunch of people catering to special interests. ask any california parent how they feel about the state teachers union right now in the middle of the pandemic i don't think you're going to get a very positive view i think the state voters of california are sending a message and look at the governor recall
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effort, to the legislatures that say, look, you don't get to just cater to your special interests. you don't get to just do what the sciu wants you don't get to just do what the california teachers want there is change happening here and so i don't actually think this is going to spread. i think you're going to see some very interesting things happen as people want to have their voice heard on this. it is really -- what is amazing is, like, the technology is going to allow for such amazing things for people to be able to pursue their passions and to work as flexibly as they want. the entire creator economy is going to open up this isn't like about one company or one industry. there are going to be hundreds of these opportunities we need to wake up and quit trying to force everyone into a job type that came from the 1950s. that's not where we are. >> i mean, i think, bill, arguably, we have made progress on that front. a few years ago if you said the word gig economy, no one would know what you're talking about and now it is a pillar of the
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labor force. we'll look for that. i want to get you on markets and valuation. you were with us in june, if you recall, that was back when options on amc were utpacing the spies and the triple qs. you said at the time i would not expect that kind of behavior to be durable and arguably it has come off the boil but what do you make of where we are right now? >> there is a massive amount of speculation, you know. it is not just in that area. i think you can look at a lot of the crypto tokens and nfts and see that there is a massive amount of speculation going on i don't know what would bring an end to it. most of the people that look at the macro environment, you know, point to the low interest rates, which we have talked about many times before but there is a lot of cash looking for a return and a lot of people willing to play with the level of risk that we haven't really seen since the late '90s. earl 2000s
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>> let's talk about leadership on the ten had--year anniversarf tim cook at the helm it was a sad moment. it was clear that steve jobs was in decline as he handed over the r reins. look, i mean, the rap was on tim cook, he's an operator but no steve jobs apple added more than $2 trillion in market cap, so many products including apple music, icloud, the apple watch, all these -- even though people say, you know, tim cook is not a product guy, boy, for not a product guy, they have come up with a lot of products, double revenue, double net income, what does this say both about the supposed law of large numbers, where people thought apple couldn't get much bigger, and about how you should evaluate leadership, even at these big companies, potential to run from here. >> yeah, look, i think the most important thing is to
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acknowledge the amazing job that tim has done i went back and found an article from the day he was announced and the stock was down 5% in the after market and said all the negative things you're talking about. and, boy, talk about shoes to fill, right? like the expectations couldn't have been higher the -- i think a lot of people were just looking for them to fail for the reasons you brought up but in addition to all the amazing things you talked about, you know, he's one of the most successful fortune 500 american companies in china i think he's done a really amazing job, kind of navigating the political waters with both sides, you know, both parties. he's hired well and he's taken the market cap up $2 trillion from when he took over i think it is at 10x so there is no way to say that he could have been a better job. this is one of the most amazing ceo ten years of all time. >> what does it say, also, about
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valuation? we keep talking about valuation. i think there is a good reason for it but sometimes the potential in a company, in a stock, in a market, is so much bigger than history can even frame so i mean you look at this from the earliest stages, how should investors think about the potential of some of these technologies and some of these companies right now that might seem richly valued, but might also have a lot of potential from here. >> yeah, i mean, the -- if you look at the faangs, i think they all have, you know, while every valuation is high and once again everyone will tie that to the low interest rates and say that's fine and okay in this environment, if you look the at the faangs, april until part apple in particular, there is a ton of value in cash flow that helps support the valuation they have. and while it looks, you know, certainly historic from a -- from a lookback perspective
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because of the 2.4 trillion, we just crossed that trillion concept just a few years ago, and so it all seems quite new. it is one of the most successful companies on the planet. we all use their products. we all like their products and once again i think the biggest point to make is just how amazing a job he's done and i think you brought up earlier, how do you know when you're hiring a ceo what prototype is going to be best no one would have said, hey, get the supply chain guy to run apple. no one would have expected that to work. and it just goes to show you how hard it is sometimes to make those types of decisions, but kudos to the apple board and to steve himself for putting tim forward. >> and the way he's course corrected. i still remember the biggest hiring mistake that he seems to have made, the first head of retail that he hired didn't work out, and then he went back and got angela aarons, and even without johnny ive at the
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company anymore, it continues to move forward and do so well. bill gurley, great perspective, thank you. >> thank you >> great conversation there. still on the show, shopify president harley finkelstein on the other side of this break a big hour of "techcheck" is just getting started 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. jerry is here! j! mate, how are ya!?
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gut check on coin base needham initiating buy this morning. price target of $420 sees the stock returning to highs from the first day of trading and says it sees future opportunities beyond just exchange services. shares today up a little more than 1%. p but, carl, lower from the april peak of $429 >> yeah, although needham's target is 420. we'll see if we get back there. shopify announcing a partnership with tiktok today, pushing further into social commerce the move allows consumers to shop directly in the tiktok app for first time from what shopify is calling mini storefronts. shopify prices harley finkelstein joins us this morning. they're saying this is the beginning of a new chapter in in app shopping
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i want you to talk about the program and when this becomes available to all merchants >> great to be here as always. i think to begin with, creators are absolutely the next generation of entrepreneurs and merchants. i've been on the show and we talked about this. in today's retail landscape, merchants need to be where their customers are to build a successful brand that means they have to grow their social presence but they also have to create some seamless connection between content, community and commerce. said to we're announcing shopify is bringing a new in app shopping experience to tiktok. we also talked about in the show before whether around instagram or pinterest or facebook, but social commerce is becoming one of our fastest growing set of sales channels and marketing channels for merchants as more retailers migrate online, social commerce will continue to grow social commerce on shopify has already grown 76% from february 2020 to february 2021. and if you just look at the simple #tiktokmademebuyit, this
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is huge because it is the first time merchants can tag products organically without running a paid program i think it is going to be something that consumers are going to love, and also creators, makers and brands are going to love. >> speaking of creators, kylie jenner, her tiktok account has 35 million followers what does it mean for accounts that don't have as many? >> that's sort of the best part of this idea of social commerce. if you look at tiktok, one of the fastest growing entertainment plat formzforms oe planet we're getting shopify merchants this new way to reach those audiences. we have been experimenting with tiktok for a little while now, october 2020, we began with a paid video ad experiment for merchants. we extended that channel, but this is the first collaboration that brings organic discovery and new shopping experience for merchants. in terms of the creator economy, in the year that ended in june 2021, a record 5.4 million
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business applications were filed in the u.s that is huge that is an increase of almost double the relatively stable prior 15-year average of 2.8 million business applications. and a lot of those business applications, they are creators, and so i think that the fact that the creator economy is estimated to be 50 million strong and has -- is reportedly worth $100 billion, it means that creators can now begin to monetize across more service, more channels. but it also speaks to the future of retail. the future of retail is not online or offline or on social or anywhere for that matter. it is all about consumer choice and more and more you're watching shopify build a retail operating system which allows for the future of retail to happen everywhere. >> right, more consumersare choosing social commerce good morning it is deirdre, by the way. live stream sales forecast to generate more than $130 billion there in social media this year. why do you think that the u.s. consumer has been slower to this
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kind of shopping h how closely are you watching what the chinese companies are doing? >> you see live shopping happening at an incredible pace. you have the super apps where shopping, but also everything you do day to day is done in that one single app. i do think that more of these integrations where it doesn't feel like you're interrupting the content, but rather you're embedding commerce into the content, that's going to create for a lot more sales when a consumer who just -- a fan of someone like kylie cosmetics wants to watch a kylie video where she's showing off her new lip kit in a very organic natural way is able to purchase right from the video, you're going to see more traffic and more sales i do think social commerce is still very early again, our largest channel on shopify, the thing we're best known for is e-commerce, the online store after that, the offline store. more and more we're seeing more merchants asking and requesting to start selling across social media platforms and consumers are beginning to do so at a much
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higher clip than ever before. >> arley, what kind of data will tiktok itself retain from this partnership, and is it possible that china will end up with a great new real time trove of data on global purchase patterns there are questions about to what extent the chinese government itself has access to tiktok data. >> yeah, it is a great question. so, first of all, shopify, the data, our merchants data belongs to them. we take data protection privacy very seriously in any partnership no matter where the company is based so shopify we do not provide tiktok access to consumer data and we give merchants the tools they need to abide by every regional privacy regulation necessary. this is not about china. this is about data and privacy and fraud. we take those issues very seriously as a company, and expect our partners do so as well this partnership is really not the tiktok in china, we're talking about tiktok in the rest of the world working on this. >> you know that under a prior
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administration in washington we were asking existential questions about the future of tiktok is there any reg risk behind associating yourself so closely with a platform? >> there is very few social platforms or any surface areas on the planet that have nor engagement, more creators, entrepreneurs, and consumer spending time there. so we think we can do this partnership in a way where we protect privacy, protect data, but also we create a brand-new channel for entrepreneurs to monetize and i think in the next couple of months i'll be back on the show and we'll talk about not only some of the large creators, some of the large brands like bieber, taylor twist, mr. beast, serena williams using the social commerce channels, you're going to see more of these makers find ways to build a real living, to make real money and support themselves through these social commerce integrations. i think this is a great thing for entrepreneurship >> harley, always good to get your take. retail continues to evolve shopify up 5%. appreciate it very much.
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see you next time. >> thanks so much, carl. and as we mentioned, it has been ten years of tim cook as ceo of apple when we come back, a closer look at apple's opportunities and challenges [swords clashing] - had enough? - no... arthritis. here. new aspercreme arthritis. full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. (vo) unconventional thinking means we see things differently, so you can focus on what matters most. that's how we've become the leader in 5g. #1 in customer satisfaction. and a partner who includes 5g in every plan, so you get it all. when traders tell us how to make thinkorswim even better,
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welcome back to "techcheck." i'm deirdre bosa with jon fortt, carl quintanilla and julia boorstin cult capitalism, the key to a great company? from elon musk to tim cook, we will discuss, but, first, a news update, let's get to rahel solomon. >> good morning. here's what's happening at this hour new home sales increased in july after three months of declines median price of a new home is over $390,000, that's up more than 18% from a year ago. best buy says that demand for work from home computer equipment will remain strong the retailer raising its annual sales forecast and posting strong q2 profits, best buy shares up more than 6% this
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morning. cigna on the rise. the insurer will spend $2 billion on accelerated stock buyback plan shares still down 20% from their may highs, but the stock is positive on the year. and mcdonald's announcing a slew of promotions including a new global chief marketing officer and some new heads of their international markets. the moves come a month after mcdonald's created the position of global chief customer to try to improve its digital and in person customer experience carl, back to you. >> rahel, thank you very much. it has been ten years since steve jobs stepped down and tim cook took the helm at apple. a historic run for tim cook. if you bought shares, you would be up more than 1,000% and a few other faang names. here with a look at the legacy he's already built is josh lipton josh >> there are fewdifferent financial metrics we can use to judge tim cook's performance one would be the stock price as you mentioned. apple named tim cook ceo on august 24th, 2011. since then apple stock is up more than a thousand percent
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that's versus a gain of about 280% for the s&p 500 revenue is growing more than 150% to 274 billion through fiscal 2020. apple's market cap skyrocketing from 346 billion to nearly 2.5 trillion and net cash position of 72 billion, dividends paid at nearly 103 billion and counting. adding to this performance, think about who tim cook had to take the baton from here steve jobs himself american icon, a creative visionary who could take this stage and wow an audience. cook has been clear here he didn't try to be the next steve jobs instead, he focused on being the best version of himself, he says, and analysts say he's put his mark on this company, proving to investors that this is a strong, sustainable business, and launching new popular products as well watch, airpods, music and video and other subsubscriptions cook will have to continue navigating this ongoing chip shortage which is a head wind
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and longer term, china could be an issue given the behavior of the authoritarian regime and the increasingly tense relationship with the u.s back to you all. >> josh, we talked to bill gurley a few moments ago about the idea that who would have thought you would name the lo logicstician to replace steve jobs >> there are certain questions when tim cook took the reins there, arl, certain investors who were worried about that. they looked at cook and there was an engineer, a supply chain guru, i've been thinking ahead of this about my own relationship with cook i've been speaking to him for years now for this network, every earnings report we speak, we speak about the print, we talk about longer trends and themes as well and no matter what the stock is doing, i sometimes talk with
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cook, the stock is ripping, other times it isn't, but he's always calm, cool, collected, unflappable. i think you see some of that steadiness in his financial metrics as well there. >> josh, remarkable to me is the cultural continuity from the jobs era to the cook era, given there is such different personalities, in a way with different approaches and steve jobs, the new apple headquarters was largely designed, you have the idea of apple university that would train employees in the culture and the ways of apple, but they have gone through different technical leads, different design leads, different retail leads, but apple has remained apple it strikes me as unusual you? >> i think too, i look at some of cook's lieutenants as well, john, you know the names, some of them are still there, still tested veterans. i think of eddie q and phil shuler and jeff williams, it is interesting on this day as cook celebrates ten years, i
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mentioned i was talking to tim baharan, he says, listen, one thing investors start thinking about in next couple of years you want to hear about who possibly now takes the baton from tim cook and already we're seeing some talk about that. right now there is a lot of talk about jeff williams, the coo and you can understand that, there is like cook a supply chain master, oversees the apple watch business, product chops as well. ben was saying we also would look at another lieutenant, craig fedarigi, another tested veteran, kcharismatic to watch o stage. >> interesting the successors being talked about are also operators, experts in supply chain management, josh i was reading one former apple exec said that under steve jobs there was more excitement, more intrigue, that may be the case, but it is pretty incredible what cook has done, even when you
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look at the services business, which grew from 3 billion in 2011 to 54 billion in 2020 >> yeah, you'll hear that knock, for sure, you know, we heard people say cook is not a product guy. i've always thought that was kind of tough to get my head around i try to give traders and investors and business people the metrics i thought told the story. to me i look at the products and i see cook as continuing to evolve the iphone. that continues to wow a lot of people around the world, the iphone 12 was a hit. then you look at the other products too, think about the watch, think about airpods, think about that wearables business, you look at that idc now says apple dominates about 30% of that global market. coming in second is samsung, 10%. >> josh, what a story. what a tenure. a good day to pay attention to it josh lipton on ten years of tim cook shares of netflix have seriously underperformed this year, trying to close the gap,
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take a look at shares of
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airbnb, they are moving sharply higher up nearly 8% it wasn't a financial announcement, but the company did say today that it would house 20,000 afghan refugees that has got the company trending on twitter. shares up nearly 8% at 160 bucks a share, carl. >> yeah, best day for airbnb in five months. mean time, call it the upside down, netflix shares on a tear since early august. up more than 8% gaining seven sessions in a row. shares still under performing since january. is a massive fall lineup what netflix needs to jump start growth here to break it down is julia boorstin their calendar is crazy. >> 42 films scheduled between now and the end of the year. and, carl, just to put that into perspective, that's double the number of films that a traditional studio would release. it would be interesting to see how this fall plays out. there is so many questions still about the delta variant and how
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that might impact the box office, but also when you look at this packed schedule for netflix, big stars, big name films coming out before the end of the year, you also have a box office with a lot of films that have been delayed from the summer films like the matrix, films like top gun, the kind of films that used to get big audiences into theaters in the summer. it will be interesting to see what kind of audiences the box office gets and whether the fact that now there is so much more content available at home, maybe that serves as another reason to keep movie fans from leaving their house and going and buying movie tickets. >> and in some cases, julia, watching very high quality pirated versions of content, journal has a big piece about it today. very soon after these projects are released i wonder how much of that is driving the studios thinking that we need volume. >> yeah, this is just really a striking fact here, carl
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what you're seeing is the increase in the amount of piracy of films right after they have been released in theaters. in fact, you look at black widow, there is a big drop over the course of the weekend at the box office from a strong opening, first few days and then the numbers trailed off and they think one of the reasons that dropoff happened is because people were pirating the film at home so the question now with piracy is not only what is the impact on the box office, always been an issue, now it seems the piracy is more robust than ever. also what is the impact of the piracy on subscriptions and on revenue from selling these movies so if you have a company like disney that is trying to sell films like black widow for an additional $30, does the piracy eat into that or does it eat into subscription growth of services like hbo max, which are simultaneously offering films in theaters and at home piracy continues to be an issue and we'll see if it starts to impact the studios' impulse to want to maybe short than window and do simultaneous release.
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>> speaking of disney and windows, it has been a few days since we have taken the temperature of the dispute with scarlett johansson talk of arbitration, elizabeth olsen weighed in where are we on the back end evolution of the comp? >> disney is pushing for arbitration. you have the scarlett johansson legal side pushing to take this to court but one thing is for sure, the studios are all very aware of the fact that if they want to have ongoing relationships with talent, they have to be very thoughtful about how they manage these issues i thought it was really interesting to see that we're going to have emma stone do a cruella sequel she did not weigh in on the issue. that indicates disney sees this as an opportunity to build a long-term relationship with her and perhaps maybe pay her more for the first cruella with an understanding they're going to be working with her over the long-term. this compensation issue, you think about issues like piracy and the fact that simultaneous distribution might be here for
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longer than many had hoped because of the covid pandemic, there are all these different factors at play when studios are trying to figure out how to make the most of their intellectual property. >> so much happening, julia, thanks julia boorstin bitcoin is back below 50k. latest in a controversial part of crypto that is up next. and keep an eye on china tech stocks today they are certainly regaining some life here cathie wood finding some value there. we found out she bought shares of last night on the back of their earnings some are calling the bargain prices look at the recent moves tencent, the biggest laggard, down 70% since march "techcheck" is back in two
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(upbeat music) - [announcer] introducing the grubhub guarantee, our promise to deliver your order on time within the delivery window and for the lowest price compared to other apps, or you'll get back at least $5 in perks. gut check on shares of palo alto networks. john mentionedthe stock at the top of show. it is surging today after beating estimates thanks to accelerated revenue growth and momentum in hardware sales shares have almost doubled off their lows for the year, up nearly 20% today take a look at another security name, crowd strike, up almost 8% today, getting added to the nasdaq 100 and perhaps getting a tailwind from those palo alto numbers ast if you missed part of our
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interview with bill gurley at the top of the hour, follow and subscribe to our podcast, listen anytime, anywhere, wherever you download podcasts. we're back just south of 15k on the nasdaq "techcheck" back in a moment we . 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. the finance, hr and planning system for a changing world.
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that's because you all have xfinity mobile with your internet. it's wireless so good, it keeps one upping itself. stable coins which are cryptocurrencies that are supposed to be pegged one to one to the u.s. dollar have become one of the most scrutinized corners of the crypto ecosystem. now there appears to be a race among several of them to prove
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which is the most legit or at least the least sketchy. the world's second largest stable coin circle says that it is changing the makeup of its reserves to only cash and u.s. treasury bonds paxsos is claiming the same and renaming its crypto to the pax dollar this comes aed my more calls for more regulation and more transparency from coin issues after circle and tether revealed reserves were made up not by the u.s. dollar but various forms of debt securities and bonds. tether or ustd the largest stable coin in circulation, revealed earlier this year that less than 3% of its reserves were held in cash. and the vast majority held in commercial paper, which the details were light circle's latest disclosure may put more pressure on tether for greater disclosure in a statement to us tether says we applaud our friends for embracing the transparency that tether has pioneered, but,
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quote, we are comfortable with the assurance opinions that we have provided to the public. meantime, jon, we continue to await the audit that tether skydives pr executives promised was coming in the next few months they have all the info they need to choose the stable coin right for them >> we'll see if the community votes with their crypto. and speaking of crypto, "techcheck's" crypto coverage coins. hackers are walking away with hundreds of thousands of dollars of stolen seasts that cnbc exclusive story after one more quick break stay with us 5g on us. get it on magenta max with unlimited premium data. no trade in required. no worrying about having a phone that qualifies. you can keep it or pass it down. it's that easy. unlimited premium data, iphone 12 on us and no trade in required.
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the crypto craze has boosted investors looking to cash in as the price of bitcoin soared. but it led to a rise fl hackers taking over and draining accounts, leaving investors with little recourse. many customers of coinbase for example, the country's largest exchange are taking aim at the company's customer service saying coinbase left them hanging. eamon javers has a cnbc investigation. crypto nightmare >> tanya and jared discovered
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crypto currency through a coworker a few years ago and thought the boom attracting so many would give their young family a financial leg up. >> it was going to be a way to retire and be secure. >> so the florida couple started buying bitcoin and ethereum using the coinbase the largest cryptocurrency exchange. >> how did it go at first. >> until recently it was great. >> but earlier in year they say their account was hacked, investment which had grown from a total of about $45,000 to some 168,000 was essentially wiped out. going down to $$587. >> i sign on the computer and i see a ton of security alerts, password changes and i saw the crypto was gone. >> to their astonishment they couldn't get coinbase on the phone. just email turns out they weren't the first to have that problem more than 11,000 complaints since 2016, mostly related to customer service have been filed with the federal trade commission and
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consumer financial protection bureau ant better business bureau in alert says coinbase has not responded to a pattern of complaints from consumers who state they are locked out of their accounts even after providing required information or updates and customers have difficulty reaching the company >> this not only was our future. this is my kid's future. >> you wrote them and said you lost $170,000 and they didn't call you back. >> still haven't. >> here is how the crime work. hackers get into the victim phone and redirect texts and confirmations to themselves and respond as if they're the victim giving them access to the crypto accounts tanya's last communication with coinbase came in late may. when coinbase gave her back access to her account after she was locked out for a month. >> there was always a struggle with customer service. >> former coinbase part time customer service employee jason rose says the customers needed reassurance in taking the plunge into crypto. >> they need that touch of somebody being there while they're going through the
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complex transaction. >> rose worked at coinbase from 2014 to 2016 and he says the company was phasing out live chat. >> the decision to do that was disastrous because the time that it took to respond back to emails took a lot longer than it would for a live chat. >> unfortunately most people who contact me would tell you it's poor customer service. >> david silver an attorney specializing in crypto currency cases represents the couple. >> they're being almost victimized twice. >> while the company was happy to go on camera to talk to the ibo and earnings repeatedly declined to sit down for an interview on customer service instead sending a statement saying in part we grew from 43 plus million users at the end of the 2020 to 68 plus million registered users as of june 30th 2021 through all of this growth some of our customers unfortunately experienced challenges and delays reaching our support team
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the company would not disclose the number of accounts that have been taken over. but a spokesperson said only a small them less nan 0.1% of customers have been impacted by takeovers. law enforcement officials see crypto account takeovers across the country. fbi analyst ali told us these crimes are dinner from the real world in an important way. >> one of the difficult things about crypto currency transactions is they are irreversible at that point when the atacker withdraws the funds from the kpnl, that's not a transaction that you can take back. >> how big of a problem is that, that the crypto exchange accounts being completely deleted? >> it's obviously a huge impact on the victims which is incredibly difficult for them and something that, you know, we're always looking to help out with. >> a coinbase spokesperson told us it eliminated live chat in early 2020 to long the long wait times. as we asked questions the
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spokesperson told us cannabinoids will roll out phone sport for take yoevrs this month. plus live chat coming later for the year as for the couple coinbase reached out to them saying the company would not reimburse the couple because the breach on the account was due a third party and therefore not coinbase's fault. back to you. >> eamon, a really great investigation. and look at the pit falls of investing in crypto at a time more and more people willo are doing so is this sort of a coinbase problem? does binance deal with these complaints or hacks better as we talk about robinhood looking more like a crypto trading platform, have you heard they take customer complaints any better >> we do see this problem across all the different exchanges. coinbase had the most when we looked into this and that might be just on account of their size if nothing else but, you know, this is an unregulated area and a very new area, a lot of
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the companies as coinbase pointed out in the piece are growing at an incredible pace. and so some of this might be the growing pains of a brand-new industry as it struggles to get its arms around its responsibilities and what aren't its responsibilities a lot ever this comes from sim card fraud where you get into the phone through the sim card, the hackers are. so in -- to some respects this a phone company problem as much as a crypto exchange problem, jon >> yeah, such an important investigation, eamon thank you. and one more thing before we go, big tech is headed to the white house, major ceos including tim kwook, satya nadella and andy jascy attending a meeting with president biden tomorrow afternoon to talk cybersecurity. white house officials saying executives plan to discuss how to protect infrastructure, including banking, energy and water utilities from cyberattacks googleo sundar pichai and jp
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morgan jamie dimon also reportedly received invitations. carl. >> see what that looks like tomorrow in the mean s&p, nasdaq, shooting for four straight gains. record high on both, and the nasdaq continues to tread above 15 kp let's get to the half. and welcome to the "halftime report." i'm frank holland in for scott wapner stocks hitting all-time highs and major milestone for the nasdaq and new call taking the s&p 500 target for the year to a new street high. what's taking us there of course we debate the next money moves with our investment committee today. that includes downtown josh brown. stephanie link, michael farr jon najarian co-founder of market and kate moorehead of the mattox strategy for blackrock global allocation team. let's check the markets. nasdaq hitting an all-time high reaching 15,000 for the first time ever. th


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