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tv   Tech Check  CNBC  September 16, 2022 11:00am-12:00pm EDT

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broader market we thank you, dom. we should tell you this as well. we got some exciting news for our team monday morning, morgan brennan is back. she will return, join us right here at the new york stock exchange but not before making a pit stop in montana on assignment for a big story that you will see next week looking forward to welcoming morgan back. that's going to do it for us on "squawk in the street. "techcheck" starts now >> good friday morning today recession warnings abound as the ceo of fedex says the consumer is slowing. what that means for an already battered tech market later this hour plus a big tech check on amazon, down double digits the in a month. now facing a lawsuit from the state of california. we'll talk to the a.g. about the move there shares are down of news of the widespread hack on uber and some say the profitability picture is
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not as clear as it seems, john, as the market is rerating to 38.50. >> fedex plunging this morning after the company blamed macro weakness for its disappointing forecast issuing a strong warning on demand with our jim cramer last night. >> the u.s. consumer has definitely been spending less. but the u.s. has been somewhat insulated because the u.s. dollar is the currency of choice for the world. there's some insulation there. but i do see the u.s. is slowing down too >> seems to be getting cold despite the insulation macro concerns hitting names like apple, down just over 2% today. despite that, iphone 14 launch, other big tech laggards this month, meta down, microsoft and alphabet not far behind. the latter tracking for its worst week since early july. we've been talking on this
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program about beyond interest rates, it's time to start talking about demand and here we have a clear warning on demand, not just at the kind of working class, lower salary consumer, but across the board and across the globe >> and there's been so much concern about the earnings season that we're going to be heading into have estimates come down enough? i guess the question for fedex, it's an economic barometer is this a fedex problem or is it indicative we will be getting a full blown economic recession. his comments, in contrast to what we've heard over the last few weeks, conference season here in san francisco. we've heard from uber and air bnb who said demand remains strong they weren't overly optimistic, but i might say they were steady on the other hand. fedex said that this kind of downturn was quick and caught them off guard so, that's exactly what the market's trying to work through right now. >> yeah, the simple read this morning is that it is about
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asia, asia pac to a large degree, and somewhat europe. on a day where, as you say, dee, jetblue has an upside earnings tree announcement. joining us today -- talks about obviously it's a huge story. it might be a pole on the overarching discussion of the overall economy. how are you processing it? >> morning, carl i think i am processing it in that way if you look at what was mentioned by the fedex ceo and in general what you're hearing about tech ceo talking about how they're being more cautious and spending money i think everybody is being cautionary at this time and it's rightfully so. if we're seeing with the early bellwethers demand slowing, i think that does trickle into other areas, especially the tech sector we already know where valuations are based on what's going on with interest rates. that has to play a part, especially myself. that's something i'm heavily
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looking into and how that's going to affect especially the tech sector. >> really? is that -- would you -- i'm looking at meta today. 146. this has been a very tough week for mega cap tech. does that change your long-term view on a lot of these names >> no, it doesn't. it doesn't change the long-term view i would maintain that the next two to three quarters we're going to see a lot of struggle and volatility in mega cap and growth and i think we'll see the cpi come up for august we're still seeing inflation relatively hot and i think that points to a hawkish bet. i think for growth with tech, we knew that. but the course of action for a lot of investors is looking at opportunities when we see a big move of 5% to 10% like we're seeing over the last couple of weeks. those are opportunities. but rather stay patient and not be emotional to get out of the long term positions i think is the play >> so, part of the fedex story is this deterioration that they're seeing in demand another part of it, though, is
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how well-equipped is the management there to deal with that when you look at amazon, shares are down in sympathy today they've been looking at this problem all year they started the year early on saying they had overcapacity issues, overhiring they've been adjusting for that. could amazon kind of be more insulated from this? and that's important, of course, because the mega caps make up so much of the s&p and the nasdaq >> exactly i definitely think amazon is more insulated i have positions in both and obviously more position in amazon i think that's not only because i feel like the management will be the in a better position to handle supply chain issues and to handle obviously weakening demand and to make sure that supply gets to the demand that is there they also have diversified business that's something that plays a part here. if you're dealing with cloud in different areas of business, that is still going to hold steady, maybe more steady than something that's really tied to the consumer and discretionary that is going to bode well they're trading down in sympathy but i think they'll weather this
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storm a little bit better than say a fedex. >> better than the fedex, sure but maybe we can take a step back for a moment because it seems like the narrative really has shifted in a significant way over the past few weeks. we're two weeks away from q4 i'm wondering if we're going to have tougher comps because a year ago, supplies were tight and the holiday season started early. you know, everybody was saying, go out and buy yourself early while there's supply make sure you buy. people were buying earlier not necessarily going to do that this year. and plus from the enterprise side, even enterprise software where it's seeing relative strength i'm hearing from ceos in our sales pitch now. we're going to have to argue rip out and replace. rip out your expensive stuff, replace with us. it's not that the pie is getting bigger it's that we feel like we're growers and we can still grow somewhat in a perhaps even shrinking environment. isn't that significant >> very. it's very significant. and you mentioned just the rip out and replace. the people -- the tech companies
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and the mega caps that perform well are the places that are being more aggressive with sales and are able to meet the bigger deals. microsoft and amazon, they're in those conversations. and i think everyone in this area, in this environment, is looking at, you know, how pledges are being slimmed down so, that's going to play a part. you know, the next couple of quarters is just going to still be rough but that doesn't change the long-term valuation, i believe, for tech in the long term. >> yeah, i just wonder where it bottoms out. what's the next major data point that you're watching for to give us a sense of what kind of q4 we have ahead >> i think you kind of talked about earlier, it's not always about interest rates but looking at what the fed is projecting for where interest rates will be at in 2023 that is actually a good thing for investors to look at i feel like the market has been a little bit too -- the market
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has been hawkish, and i think investors are not seeing everything so far and having names come out i think seeing what the fed is saying in this next meeting is important for investors. looking at other earnings. we're getting into q4. q3 is going to be pivotal to see how we perform for other companies, what their demand is, what they're projecting for the future, for the rest of the fiscal year, is going to be very, very important >> i wonder how you think about -- we've been rained upon with negative news this week but there's a report today that google cloud division is going to unfreeze hiring next month. obviously adobe making huge bets on the future of the software business i mean, how are you trying to reassure clients that the news is not homogenous? >> exactly right you know, if you look at the fed survey that was released, the new york fed survey that was released, it shows that households were expecting inflation to come down a year
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from now they're seeing an annual run rate of about 5.7% that shows me some people are looking out to the future. you mentioned big tech companies on google releasing their hiring freeze in the deal that was 40 t dollar a share, which is a huge valuation. there are some pockets and i think there are some pockets of hope and glimmer. so, we're telling clients, especially the younger ones, to stay pad on their goals. a lot of people are coming back when it comes to different things and i think that's superimportant to do in this situation. but no one's really discouraged about long-term investing. this is a bear market that we've seen since the beginning of the year, and they've been expecting it to kind of bounce around this range for a little bit more. >> yeah. actually now the s&p has closed below the 200 day for the longest time since the financial crisis as of this morning. delano, thank you so much. good to see you again. meanwhile, guys, take a look at shares of uber. they're falling alongside the broader markets and the company reporting a widespread hack over
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there. >> that's right. uber still dealing with the fallout from this hacking incident not clear exactly who the hacker is here. the new york times is reporting that they're in contact with somebody who claims to be an 18-year-old individual who said he did this because uber's security was so light. we'll see if that pans out and ends up being true but cnbc has obtained a memo that went from uber security to uber employees this morning. they are telling employees at uber that slack is still disabled zoom is available for employees inside the company, but interestingly, security is warning people inside youtuber to keep their cameras turned on during zoom calls in order to verify the identities of all the participants they are worried about imposters jumping onto their zoom calls, keeping the cameras off, using somebody else's name, maybe recording those calls or messing with uber in some way. we're seeing intermittent access
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issues employees are told they can go to any uber office globally and conduct work in the office so, that's not a concern so, it sounds like they are able to conduct some business over at uber from what apparently is a very distracting hacking attack. not clear what the long-term ramifications are for this we reached out, deirdre, as you know, to uber, and they have no comment on this at this point. back to you. >> we're getting reports that so far the disruption that it's causing are things like obscene pictures and messages being sent to employees of course uber holds a lot of credit card data for many, many people around the country and around the world this could turn into something bigger we don't know that yet but of course security is very top of mind, especially for us as we look at twitter and the whistleblower there. how seriously should we be taking this? you said it's an 18-year-old, right, who has already come forward and said this was him. >> that's according to "new york times" reporting we just don't know whether that's true or not
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the persona, who is being presented to the world as a hacker, is coming off as an immature person, sending obscene pictures to people inside uber, calling problems inside uber that's a projection to the world, whether that's who this is or not, we just don't know at this stage we're going to have to wait for more reporting you can see a more scary or nefarious scenario where some threat actor is using that persona to deflect attention from what they're trying to do or you can see a scenario where an immature 18-year-old gets access to this uber stuff and realizes he can sell it on the dark web we'll see what happens here. uber clearly having difficulty getting people out and if you're on a zoom meeting at uber today, you're going to want to turn your camera on and make sure everybody else has your camera on so you know who you're tacking to. >> all right yeah, amon, we operate with cameras on here at cnbc. >> all mics are live >> amon, thank you meanwhile, the state of california suing amazon this
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week their attorney general is next "techcheck" is just getting zarted ♪♪ welcome to life in the new open web. where innovation keeps pace with imagination and the future arrives daily. viant is pioneering a new approach to media combining ai with human insight. creating new ways to reach customers and new standards of measurement, both on and offline. viant. built for the new open web. built for now.
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california taking aim at amazon it is accusing the tech giant of using anticompetitive contracts with its merchants causing price increases across california and boosting amazon's market power joining us, california attorney general who opened the lawsuit thanks for being with us i do want to start more broadly. we've been watching attorneys general and regulator bring cases and complaints against amazon and other big tech for years. the market, their stock prices, tell us that investors don't believe anything substantial will come from them. maybe they think it's political gr grandstanding. what would you tell them and why would this be different? >> this is unique in the nation and unique in the world case where we are bringing for the first time causes of actions of this type, violations of california's law, the cartwright act, the unfair competition law.
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we have one of the most worked up and fact-specific complaints that we have ever seen in this space. so, we believe this is a unique first of its kind case we are very confident in our case against amazon. investors and others can do whatever they wish but we are confident in this case we believe that amazon has been manipulating the market, price fixing, violating the law. and we are holding them to account with this case >> investors and others don't think this is unique though. the d.c. ag filed a similar case this year and it was dismissed on the grounds it lacked sufficient evidence. what is different with yours and what makes you think a judge will view yours differently? >> it's entirely different, entirely different causes of action, different law, different court, different complaint, far more thorough with its allegations and levels of specificity. we've talked to vendors and
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businesses we have taken their testimony. we've talked to amazon's employees. we've taken their statements we feel that we have them very much on lock with respect to the case that we've built and the cause of action that we have all you need to do is look at the case and the complaint and the law and the cause of action in d.c. and put it side by side with those in california and you'll see that they are very different i know it's a talking point for amazon, but they're dead wrong on that. >> explain to us then what's different. >> well, first of all, the washington, d.c. case did not claim violations of california law. they cannot do that. we can in california with california causes of action. there is a very unique law in california called the unfair competition law. that was not an allegation in washington, d.c. it is a central allegation here in our case in california. there's a very specific antitrust law in california called the cartwright act. that is not something that was available in washington, d.c it was not claimed in
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washington, d.c. it is claimed and is a central cause of action in our case in california we did two and a half years of workup and background and gathering of documents and talking to witnesses and taking their sworn testimony. that was not done in washington, d.c. we have put together a very long, thorough, comprehensive complaint in california. that was not done in d.c so, they say that this is a similar ways at their own peril. they can say whatever they wish. but the case, the complaint, the causes of action, speak for themselves >> attorney general, it's interesting. historically, big players who allege to have monopoly power demonstrate that by being able to raise prices in their stores without consequence, even if prices are lower elsewhere and still pocket that profit but you're alleging that amazon is improperly insisting that prices be low. to someone out there who's just
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observing this might say, well, how is that a bad thing for the consumer, a, and wouldn't the merchants' margins be higher if they could distribute their product directly on their own platform why this bad for them if they build their own distribution outside on the floor amazon? >> let me be clear we are alleging that amazon's conduct, their market dominance, their market manipulation, their price fixing, has led to artificially high inflated prices so, we're alleging the first thing you said, not the second and the way that this is done is that amazon requires exorbitant fees for their vendors, for their businesses to use their incredible platform, a platform where almost half of every dollar on the internet in america goes to amazon, where 74% of americans go to amazon when they want to make a purchase it is a must-have distribution channel for vendors. but they charge exorbitantly
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hyphaes, which, in turn, becomes higher prices for consumers. and then when these very same vendors seek to provide a lower price for the same product off of amazon, like with walmart's online platform or target or ebay, they are punished for doing so they are kicked out of the highly coveted buy box on amazon's platform or they're otherwise deprioritized on the platform where they're forced to pay the difference of the money that amazon sought to gain and had in their monetization calculations and lost. or they could be kicked off the platform altogether. so, lower prices are being prevented with being offered to californians and californians are getting hurt because this is an everything site from school supplies to diapers to food. people buy everyday things on amazon this has happened for a decade so, this is billions of dollars in overpricing over that time.
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>> amazon has also been spending billions of dollars on a logistics network that stretches certainly coast to coast within this country, taking losses on shipping in many of those cases, and offering very quick -- some would argue -- very quick and convenient delivery. given they don't seem to be wracking up profits in the process of doing this, what's the argument, if there is one, within amazon's own financials that they are charging exorbitant fees versus just building out infrastructure that they're making available to multiple other merchants to use. >> the facts and the basis is the actual fees, the contracts that amazon has with these vendors and these businesses we see these contracts we've talked to these vendors in these businesses we've talked to amazon execs we know what the fees are. we've compared them to the fees on other platforms they are exorbitantly high they have incredible monetization techniques that they use on their website. they are making money. let's not make any mistake about
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that let's be absolutely clear, billions and billions of dollars in revenue every year that the biggest retail in the world outside of china they could make prices lower for everyday consumers who are struggling to buy food and diapers and school supplies for their children, including backpacks and other things but they're not. they're choosing monetization and artificially inflated prices instead. >> well, attorney general, we appreciate you coming on to lay out your arguments for us. thank you. >> thank you for having me meantime, adobe inching from ending the week down 25%, but the ceo still bullish. why he says the company's $20 billion acquisition brings immediate value after the break. t kind of wireless company... ...running on a big impressive wireless network. how are we different? we exist only on your phone. so you get unlimited data for just $30/mo, taxes and fees included.
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fedex is warning of demand weak pss. the dow transport, down 5% now, hit a 17-month low this morning. fedex stock is on track for its worst one-day loss since the company went public in 1978. general electric is down more than 4%. the company says supply chain issues are hurting production and making it tougher to deliver goods to customers on time choels had downgraded to junk. department stores will limit profits. meanwhile, consumers are getting a bit more optimistic, thanks in part to falling gas prices and lower inflation expectations consumer sentiment is up in september to its highest level in five months john >> so, thank you adobe meanwhile down more than 20% this week
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i spoke to ceo shantanu narayen yesterday to get a sense of whether he thinks the open new markets for adobe like the macro media acquisitions did take a listen. >> both of those previous acquisitions that you talked about, whether it was macro media or whether it was amna chur, we've changed the aperture by which we look at our ability to serve a broader set of customers. to your point, the future of work is something that everybody's talking about. i heard you earlier today talk about your views in the hybrid work environment and in this hybrid work environment, i think the biggest challenge that hasn't been solved yet is the brainstorming and ideation when people are not in the same place at the same time if there is one aspect of that where technology hasn't yet solved the problem, it's brainstorming and ideation and if you look at the jam product and what you can do, it makes all meetings incredibly
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more productive. and if you couple that with what we can do with adobe acrobat, where, you know, the acrobat and reader presence is available on every desktop, now you can think about with every document, with every presentation, you can suddenly add this ability to collaborate and collaborate in realtime and white board and ideate and we just feel like combining creativity and productivity is really the holy grail. and, you know, we have this innovative set of products right now that enables us to address it so, i think both those moves were transformative. i would certainly use the word "transformative" or "game changer" for this one as well, john >> all right so, what's next for m&a in the software space our next guest says to expect more consolidation ahead but not at prices like this. joining us now,ing manying marter in martin to bias martin, this adobe deal is special in the sense that it's the type of deal that generally founders only get to do.
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and probably shantanu's track record in bringing adobe to the cloud, doing the forward on the deal gives him the creativity to pull it off at the board level why won't we see more like this given the big swings that we've seen private equity and the likes of microsoft taking? >> well, i think this is a great case of venture capital and capitalist system really working. what happened here is that the vcs gave figma is resources to compete with adobe and beat them adobe had a competing product called xd, and figma got all the mind share from the designers. so, adobe tried to beat them in the marketplace, and they couldn't so, this acquisition makes a lot of sense because it's in fact an existential threat to adobe's ability to keep mind share in their target market. and that's why i think, you know, they paid a premium. they had to.
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and because it was existential there are very few companies facing existential threats from new trends this feels a lot like facebook buying instagram or salesforce buying slack because they were competing for their core customers over the long term >> at the same time, though, i see a number of companies, some of who have already gone product that are making the case that they are existential threats to some players like smart sheet and productivity, pro core and construction management, logistics. isn't it possible -- speaking of logistics, look at what fedex is going through. isn't it possible that there are more industries where these cloud-driven, data-focused players could perhaps pose a bigger threat? >> well, they absolutely could and not all of them are going to be facing an incumbent with the foresight to make an acquisition or to continue to grow their
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business some of them will just actually get beaten by the competitors. and that's capitalism. >> hey, martin it's deirdre i was looking at your notes. you were saying that spacs actually offer good opportunities to invest now because targets are becoming more attractive in terms of evaluation is it better quality companies, though, or could you risk getting more desperate companies that don't see another exit? and if the incentives in the spac model haven't changed, how can you be sure they're good opportunities? >> well, basically spacs last year, in the last two or three years, were competing with late stage private equity guys, and those guys were fairly price insensitive and were bidding up prices so, spacs had to have prices which were even higher than the late stage private guys. all of those late stage guys are gone from the late stage venture market, which means spacs can get more done at regular public market cost. >> but, martin, there's a reason they're gone, right? there's a reason they're gone.
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>> yes >> it's not for lack of dry powder they have the money to do these deals. they're just not so, i wonder, are spacs going to come in as a way for their sponsors to exit >> i don't think it's going to be as great a deal for the spac sponsors, but it's going to be a very good deal for the spac targets, for the companies to get access to the public markets. my bet is the next 100 spacs you see complete are going to outperform the last 100 spacs by an order of magnitude. >> wow 100 spacs. >> it is a low bar, but it's going to -- you're going to see some very good deals because the deals that are going to get done are going to be done at discounts to public markets versus premiums to public markets, which is happened in the last three years so, public market buyers will buy them because they're going to be very good deals were public market buyers >> i just wonder how long it's going to take us to see 100 more spacs. martin, good to see you, thank you. >> thanks again. we continue to watch that
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warning from fedex last night, the ceo slashing their guidance, telling cramer we're headed for a global recession julia boorstin has more on how tech investors might be digesting that forecast. hi, julia. >> carl, investors and analysts are trying to figure out which tech companies are best and worst positioned for decline in advertiser and consumer spending google is down less than the rest of the bunch. it's down less than 1% bernstein writing that google is the most defensive of the ad-supported tech giants that's because of its diversified advertiser and user base bernstein puts meta in second place because of it's ad mix and low bar for expectations for next year. that stock is down over 2% after an article in "information" said instagram's tiktok problem continues to get worst bern teen this morning warning about the narrow ad base of snap and pins and saying that twitter
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ad mix is the least defensive of the bunch. that stock is down about 1%. netflix and disney shares are both down about 2% that's despite citi issuing a note this morning reiterating its buy ratings on both stocks, on expectations that streaming sentiment will improve, saying that both are positioned to capture both incremental subscribers and revenue. they think that netflix has the most opportunity in the space. now, got a point to paramount. that stock was in the green earlier. it's now down fractionally paramount plus is doing well, and the ad market isn't as bad as feared. he also talked about the opportunity to raise prices. also want to point to comcast. of course cnbc's parent company. it is a rare stock in the green today. it's now up just fractionally. it's up more than 1.5% earlier goldman sachs this morning writing about how comcast
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management is happy with how peacock is doing the big picture, they say the ad market is doing relatively well. ceo brian roberts made some comments about the value he sees in the company's stake in hulu, which of course disney said it was eager to buy out guys >> i'm glad you brought up bernstein because their note today argues that the recession, at least regarding internet stocks, in their words is probably priced in the relative underperformance of internet names this time around has been far worse than it was during the financial crisis. i wonder if we get to a period where companies say we're in for a global recession and the market says, we know, we've already been working on that >> yeah, i think when it comes to these tech companies, you have to think about the fact that consumer products companies, big brands, they're going to continue to advertise they just want to make sure that their ad spending is happening in the most efficient and effective way possible that comes down to targeting and also measurement google has the advantage of search people are looking for things. they can give them those things
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they're looking for. that's why amazon is also such a great advertising play right now and has such a great ad opportunity. of course some of these other players like meta and snap, they're navigating the targeting and measurement challenges posed by apple's operating system. a lot of head winds for some of those companies, whereas the likes of google is a little bit better positioned there. >> all about intent, right that's what bill ready, the new pinterest ceo, told us about his ad proposition julia, thank you so much still to come, a deep dive on uber and why things may not be as bad as they seem we're back in two.
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a hack at uber not the only obstacle the company is is facing the pivot from growth to profitability. >> first order of business for us is to have big stock compensation >> can you get there >> absolutely. 100% we're going to get there. >> so, as a percentage, you think that nominally and as a percentage of free cash flow, you think that stock based compensation will decrease >> as a percentage of free cash flow, absolutely if we set a target for $5 billion for ebitda in 2024,
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usually free cash flow trails ebitda by about a billion. so, it should be 4 plus billion dollars of free cash flow on an analyzed basis so, math alone will get us to be well above stock-based compensation -- stock-based comp now we allocate that free cash flow, how we use it, is yet to be determined. i do think that stock buybacks, especially at these p kinds of prices, will be a very attractive place for us to put our cap. >> when the only source of free cash flow is compensation, it's hard to argue a company is profitable in uber's case, stock based price was higher than cash flow last quarter and is not offset by share repurchases in a falling market, companies could feel pressure to reprice options, grant more shares, or pay more cash, certainly something to watch out for in this market. uber is not the only company with this new valuation by these
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measures these stock based stocks compared to free cash flow to give him credit, if you push him, he will talk about gap profitability. says they're going to get there. net income i guess the question is how long they're still losing so much money in the bottom line and will the markets be patient? >> yeah, important factors that you're pointing out there well, dee, for investors to think about. i would argue in software and in high growth software, if you're picking stocks that you hope are going to be kind of platforms and growers for five years from now, stock-based comp doesn't matter, right? because it's -- done right, it's employees taking on the risk in the hope that this company will be much bigger in a long-term sense down the line. so, you know, if the company minimizes stock-based comp and doesn't grow, do you end up winning? not really but if they spend a decent amount of stock-based comp --
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who here cares that nvidia sent a billion on stock-based compensation five years ago or apple ten years ago? that was fine. >> yes because investors have then returned some capital i guess a key question here too is buybacks. you take the company like airbnb that is doing $2 billion in buybacks that have also given out a lot in terms of stock-based compensation carl, that restores the balance a little bit, but for companies perhaps in the gig economy like lyft and uber who are unable to do that because they are still losing a lot of money, investors get very diluted over time >> yeah. as far as employees go, there's a healthy share of netflix employees who are underwater on their stock comp, sometimes borrowing against it which gets them into trouble. our eyes are on the prize long term, john driver availability got better, and investment grade is still the goal those are the things that came out of the last quarter's
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earnings >> growth cures a multitude of ills for those who consider stock-based comp and ill bitcoin meanwhile perhaps going to end the week below 20k. it's at 19,600 and change right now. biden administration releases its first ever framework for crypto regulation. despite the head winds, one company still making millions and looks like it's growing. we've got that story next. don't go away. (vo) hi. we're visible. a different kind of wireless company... ...running on a big impressive wireless network. how are we different? we exist only on your phone. so you get unlimited data for just $30/mo, taxes and fees included. plus we have a new plan with 5g ultra wideband. switch today at visible dot com. this is evolving from gym to global media company. this is connecting your people and content in one place. this is the system you built to transform your business. this is how. airtable. businesses have to find new ways to compete
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a check on cyber security today. km partners getting bullish on the space. the firm says crowdstrike rallying more than 30% from where we are right now, saying the company's in a league of its own. as for palo alto, mkm points to three pillars driving the growth, network security, cloud. still trading on the south side of 38.5. back in a moment the ey entrepreneurs access network has a tremendous impact on my business because it's given me networks, access to capital, and access to opportunities. the level of coaching that i get has had a tremendous impact.
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in just five years he went from buying his first bitcoin to becoming a multibillionaire >> how is it the case you guys are so much better off than your peers. if coinbase, for example, said trading is down 30% how are you
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guys immune from it? >> i don't think we're immune from it. one is just we put a lot of work toof to grow out our footprint we now have licensed offerings for our products in most of the world, japan, european union, australia and others and part of it we have less retail at the platform and retail tends to be more market sentiment dependent. >> who is your average customer if not retail? >> most of our volume comes from customers trading at least $100,000 per day of volume these are high volume, highly engaged users. it's someone went into the crypto ecosystem to a family office to day traders to larger trading firms to institutions. it spans a lot of different sort
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of demographics and countries and types of players, but they're all generally fairly sophisticated, fairly gauged, and fairly large volume. >> you say your company is really operating everywhere. what geography is most important and driving the most revenue. >> there's no geography that's more than 10 or so percent of it really the answer you take the world gdp weighted except for united states, north korea, iran -- if you want to know what fraction of our volume comes from japan i don't know like 6% would be a reasonable place to start as a guess >> some estimates that say a billion in revenue last year where's most of the revenue coming from, and how much of that was some of the acquisitions you did >> numbers are reasonable. they're the right ballpark this year obviously depends on
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what happens over the latter half of this year. we've generally seen market share growth between last year and this year contrast the market decline and where did that growth come from it's -- you know, the first thing to say is our core economics, and i'm sort of glossing over a lot of details here, but this is like correct for 80-ish percent of the revenue, which is that it's people trading with an average fee rate about 2 basis points roughly. and it's very different than what you get of the economics of the more consumer facing platform it's a way lower fee, higher volume you know, we have 10, $15 billion of daily trading volume on the platform. >> at this point >> obviously on different days, different weekends it'll be a bit less but what that means is most of our revenue is coming from high
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volume users it's a wide variety of market participants, but most of the volume and revenue are coming from the market participants, which for one reason or another are trading a significant size we've been working on building out our consumer product and as for the acquisitions, you know, the core way that we think about acquisitions depend on the acquisition. and i wouldn't say there are any which have today transformed the business, but there are a lot that have played a really important role in helping build out parts of it, and there are some that may transform business going forward. i think one of the biggest things we've been working on is getting ftx derivatives up and running in the united states and optimistic we'll be able to get there. >> too soon to tell if the crypto bailouts he's done this year will pay off. time will tell in most cases they had to get
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these bail out deals done in about three to four days he said they were able to move that quickly because ftx for one is a private company, and it's a coin flip. but it's important to stem potential contagious in the industry and instill consumer confidence for that full 90-minute interview head over to carl >> incredible. such a good chat, and you can't say he's not candid. he definitely brings candor to discussion these declines holding pretty steady here. nasdaq down a percent and a half, open down about 2% no weekend plans you can always catch up with tech check's podcast anywhere wre yheou download podcasts. subscribe today. we're back in a moment ife in the new digital landscape. where the future arrives daily, innovation keeps pace with imagination,
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♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪ ♪
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you look at tiktok it's got all kinds of things. it's not indoctrinating and sexualalizing children it's educational we're embracing tiktok as an educational tool because you're not going to touch -- you're not
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going to be able to communicate unless you use the way that kids communicate. >> producer, designer and entrepreneur kanye west closing the interview on closing bell yesterday. some chinese feel the same way, you've got to be where the american kids are if you want to be next. >> i find this a refreshing take you hear that all the time especially on our airways. what he said you've got to meet kids where they are on tiktok, there's a lot of creativity and educational stuff on there, i guess. the question, carl, you get down that rabbit hole and the algorithm is so strong and so big that can lead you to weird places interesting it went to some weird places but educational? >> maybe, we need a showdown on the metaverse. >> you know, i'm not going to try to go up against kanye when
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it comes to anything verbal, how about that >> he had great comments on america as the youngest startup. i thought it was kind of interesting. you know, he said there was apple, there was ford, and there was yeasy. >> busy week next week central bank of palooza, flash pmis have a good weekend. let's get to the half. front and center this hour the fedex fall out what it means for stocks and your money as another fed meeting looms large now. are the june lows almost certain to get revisited we asked the investment committee that key question. it's 12:00 noon in the east, obviously. i'll take you to show you what the markets are doing right across the board today the s&p is down 5.5. nasdaq dow


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