Transcripts For CNBC Squawk Alley 20240714

You can see behind me, 35 to 36 is the indication. The Market Makers here are yelling out a number of prices and levels and number of shares. What theyre doing right now is trying to get down to a price that can clear the most number of shares out of here. Were getting close to that number right now at 35 1 2, which is the midpoint of this indicated range as of this time, youre still talking about an approximate market value range of just around 14 to 14. 5 billion. So very much higher than the 15 to 17 and the 17 to 19, the 19 to 21, and the 22 open. And then the 26 to 29 indication that we first got when this came to the floor. So as things stand right now, theyre yelling out a bit more well bring you more details but 35 1 2 is the midpoint of the current range. We could see this stock opening up sometime in the next few moments depending on how quickly they can get those orders together to find the one price that clears the most number of shares for the opening trade back to you guys thank you very much, dom. Leslie picker is here. Jay, what strikes you as interesting about this name and your flexes on the week weve already had . With chewy, unlike, say, crowdstrike from earlier this week, the barriers to entry arent obviously there and a great company, but as with many of these issues, there are questions about the valuation that the market is talking about, is it going to be a good investment on a point forward basis. And the answers are i wish i knew you know, i could have retired long ago if i knew that. Leslie, your thoughts on where we are and given the indications this morning. Oh, i think whats remarkable is the valuation here. Just to put things into perspective, dom was quoting 35, 36 a share petsmart itself, the Parent Company of chewy, that was acquired by bc partners in 2014 for 8. 7 billion, thats half the valuation were looking at for the opening trade today. Blue buffalo was acquired by General Mills about a year ago for 8 billion so thing is coming out at 22 per share, 8. 8 billion. Opening trade is looking at, you know, 60 higher from those levels soremarkable what were seeing today, especially since this is an ecommerce company. They sell pet food theyre in the right space at the right time looks like theyve begun trading. 36 and change here, guys, which is about 64 gain at the open again, as leslie pointed out, priced to 22, which was above the range. Jay, have you developed a model to see how day one puts you in good stead or not in the weeks to follow . Yes and the model is that there is not a lot of predictive color. If it starts trading down, theres a tendency to drop a little bit but for those that jump on the first day of trading, theres no easy trading rule to predict how it will do in the next few weeks or even the next year. Jay, im wondering, with chewy in particular, its still majority owned by petsmart which has a whole lot of debt. People who are buying the stock today will not really have any say votewise in the direction of this company. So what are the dangers, what are you really getting if youre buying chewy, and dont really have a say in what petsmart does there is that Corporate Governance issue but on the other hand, if the Parent Company does something thats obviously harmful to the chewy stockholders, theres also the legal avenue plaintiffs lawyers sometimes overreach, but they do offer minority shareholders a lot of protection in a case where there is a Parent Company or a private Equity Company or dual class shares that does not give Public Market investors control lets check in with dom over at post 5. Dom . Reporter what weve got right now, guys, is a high intraday of 38 after pricing at 22 per share and then opening at 36 per share so as we talk about the movement that were seeing so far, remember, we did see a 26 to 29 opening range when we first started quoting the indications on price as of right now, what we are seeing is, again, a new high, again, 38. 50. Youre talking at this stage about a 73 increase in price. To many of the points that you guys have brought up, this does kind of call a little bit of attention, not necessarily negative or positive, to the idea that there is a healthy amount of demand for certain brand names out there in terms of private companies on the ipo side of things, chewy, which does have competitors out there, is now valued at north of around 14. 5 to close to 15 billion at this stage, making certain assumptions for the number of shares, the green shoes and Everything Else that will happen still, on an estimate basis, this does really kind of raise some flags about whether or not the ipo market is near level some people were skeptical about it i would also point out this has been a decent year for ipos in terms of Price Performance remember, prior to today, Renaissance Capital says that weve had about 26 billion raised in 65 initial offerings and generally speaking, 60 of those offerings are trading above ipo price. I would also point out one of the etfs, they manage a smaller etf that tracks the ipo market, has more than doubled the performance of the s p 500 this is certainly a big day for many chewy shareholders, especially their private equity owners, petsmart and everybody else but the idea is that beyond meat and now this has raised a lot of questions about, to professor ritters point, the valuation of Certain Companies in this marketplace. Back over to you dom chu, thank you. Leslie, i would add fiber to that, given the fact that we saw those shares surged 90 yesterday. Crowdstrike also going public earlier this week, up 70 in first day of trading venture capitals came out on twitter and said, what youre seeing is a broken ipo, whether its crowdstrike or zoom, that basically these companies have mispriced going into trading, and theyve left a lot of money on the table you bring up a good point, morgan, including chewy, we know where its trading right now well have 14 companies trade at upwards of 50 on their first day of trading 14 companies are doing essentially what chewy is doing right now. I was speaking with sources yesterday about that gurley comment. Theyre saying its really hard to price these things. When you look at what they did with chewy, they raised the range because they saw the high demand they priced above the boosted range which is pretty rare, usually you see things at the top end of the boosted range, but they posted above the boosted range and up 77 right now, thats remarkable it makes the job of a banker challenging to assess demand you dont want another uber or lyft but you dont necessarily want such momentum and mania as youre seeing with a lot of these companies. Jay, petsmart itself sold for 8. 7 billion back at the end of 2014 and its sales have not been growing. The brick and Mortar Retail. Meanwhile chewy now is owned by petsmart but worth, in the Public Markets, a lot more than that petsmart has a lot of debt i imagine those debt holders are going to want to get paid. How does that factor in to what shar shareholders of chewy should expect Going Forward they may sell off shares over time to pay off debt typically what happens in situations like this is the Parent Company eventually either buys back the company that went public or totally divests. It would be surprising if petsmart still owned part of chewy five years from now. Jay, really quick, we asked the ceo why this is any different from pets. Com two decades ago. He said the internet is more mature, Data Collection and synthesis is more mature and the consumer is more mature. Do you buy that . I think theres some truth to that 20 years ago, ecommerce was in its infancy, whereas now almost everybody gets things delivered. And thats one of the problems that brick and Mortar Stores have been having jay ritter, nobody knows more about ipos than they do. Maybe leslie picker is tied i learned what i know from jay. Thank you both. It curse occurs to me, guys, ifr chewy, youre looking to get into brick and Mortar Retail but i dont know if you want to get into it the way petsmart is into it, these big, huge stores in strip malls and whatnot maybe you want more urban or Smaller Stores how they navigate the petsmart ownership will be interesting. Its a good question. They mentioned in the perspectives, their big competitors are not just the amazons of the world and the other retailers in the pet space. Its the costco and walmart and places that have capital that would enable them if they wanted to be competitive in this space to lower prices and put additional pressure on chewys margins. Sounds like a question for the cofounder, who is coming up next ryan cohen will join us right near at post 9 we have a big show still ahead dont go anywhere. Chewy . Were home y. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Will transform not the mjust the automobile,rrow from the day youre born but mobility itself. An autonomousthinking vehice protecting those inside and out. And its the mercedesbenz of today that will help us get there. The 2019 eclass, with innovations that will change the way we drive from this day forward. Mercedesbenz. The best or nothing. But were also a cancer fighting, hiv controlling, joint replacing, and depression relieving company. From the day youre born we never stop taking care of you. Frombe go[ laughing ] gone. Woo hoo. Welcome to my house mmm, mmm, mmmmm. Ball. Ball. Ball. Awww, whos a good boy . Its me. Me, me, me. Yuck, thats gross. You got to get that under control. [ dogs howling ] seriously . Embrace the mischief. Say get pets tickets into your x1 voice remote to see it in theaters. Welcome back to squawk alley. Pet product retailer chewy began trading just a few moments ago stock is up 78 right now. Joining us at post 9, chewys cofounder ryan cohen, ryan, congratulations. Thank you im glad to be here. So youre not a shareholder in chewy no. But i would imagine you have a lot of feelings about seeing this company you built starting in 2011 go public taoday its a very emotional day, its humbling. A culmination of its years of sacrifice, dedication, lots of hard work, an amazing team it was far from an overnight success. To see it today is just incredible im very proud one of the things thats been coming into focus in terms of this ipo is how much capital is being raised and how much of that capital is going to go back to paying down debt at petsmart versus back towards operations at chewy what do you think about that yeah, i mean, i cant speak to exactly the capital structure, but i will say its a capitallight business and requires very little to engender growth the company has gone from 200 million in sales in 2014 to 3. 5 billion in sales in 2018 its burned through money thats gone into investing in acquisition. At any point we could racheting down the spending and been profitable for us its always been about scale and market leadership and building a big business. The governor of growth has always been Free Cash Flow so weve always been very disciplined about that you yourself had a nice exit a couple of years ago, got some free cash. Are you investing in ipos this year not any yet another question specifically about the pet business omni channel is big right now, blending physical and Digital Retail given whats happening with Premium Brands and treating pets like people, if you were doing that, would you do it in urban areas or would you do it kind of in the suburban strip malls were the petcos and petsmarts have been in the past i think its all about creating an experience for the customers. If youre going to invest in physical stores, it needs to be focused on the experience so people want to bring their pets into the score it depends on the category, but to the extent that retailers want an amazing instore experience, omni channel strategy can make a lot of sense. You got a 14 billion market cap today. Did you not sell for enough or has there been enough growth since then to validate todays market cap i think we were at the time we were running a dual track process. It felt like a fair deal to us at the time. It worked out really well for the team at chewy, it worked out really well for the shareholders at chewy, and im grad to see its working out well for petsmart im very happy i love the story, your original idea was jewelry. Yes what switched you to pets and are you glad you didnt go into Online Jewelry we werent passionate about the space. I was in a neighborhood pet store one day with my poodle and it was an amazing experience i had an epiphany that if i could recreate that experience but do it online and at scale, think about all the small things weve been doing, the handwritten holiday cards, the pet poportraits, the flowers, is bringing a face to ecommerce. We were able to different shiate ourselves and build the largest pet retailer in the world. A lot of folks like to point to the illfated pets. Com in the late 90s and early aughts why did you move into this model . Im a contrarian. There werent a lot of people in that category so it created an opportunity for us having said that, it was a low margin business. How much does fast delivery matter in this category . Because youve got heavy bags of pet food, often. People know when theyre getting close to the bottom of one and for chewy, the subscription delivery has been important. Does it really need to be that fast yeah, i personally think so i think within ecommerce today, its protecting that flywheel of fast shipping, competitively priced, and having that selection. We differentiated ourselves by being the category experts and really bringing a face to ecommerce at the end of the day we happened to sell pet products. Frankly, if youre in the business of delighting your customers, you can be very successful i think we would have been successful, frankly, in any category talk about what you know about, say, my pet you probably know how much he eats per day and thus when its time to order more food, when his next checkup is due. Is that wrapped up into various algorithms you have back home . Absolutely. We try to create an experience thats really frictionless so when its the onepage checkout or just all those things, we dont want to inundate you we figure if we deliver an amazing experience, youll come back to us then we go and do all those small things that create that wow experience you tell your friends and family, this is the best experience, this is where i need to shop. Its not a shower of notifications and taps on the shoulder exactly youre looking for the consumer to touch back themselves totally, exactly. I want to go back to the delivery piece of this for a minute, because one of the things i found fascinating in reading about the history of the company is that you built out fulfillment centers. A lot of ecommerce retailers outsource their delivery facilities why did you go down that route and how does that set up the company for future scale its really hard to scale the vision since day one was to build a multibillion dollar business we werent experts in fulfillment in the beginning we were using a 3pl. It wasnt scaleable. So we had to become experts, we had to make it our core components we brought fulfillment inhouse in 2014 and neverlooked back when you think about fulfillment of chewy, its world class operations weve got seven fulfillment centers. What part of this business is sensitive to the economy do people i mean, theyre not going to stop buying food for their pet. But do they buy more expensive food or maybe more treats when the economy is good and then scale back how does that work i think we really have the tail winds of just the shift from offline to online then the humanization of pets, the market moving up and average selling price moving up. If you look even during the great recession, the industry grew and its 70 billion amount today thats growing at 3 to 5 . The last thing people will cut back on, even during a recession, is their pets whats even more durable is really the consumable part of the business which makes up a big chunk of revenue, the majority of chewys revenues its a consumer staple. Exactly in the lifespan of investing in the business, focusing on cash flow, to the period where profits are important, where are we it really is a function of how quickly we want to grow the business we could have been profitable many years ago but for us, Free Cash Flow is that governor of growth. I think its up to the new management to decide exactly how quickly they want to scale the business and would you expect the Public Markets to nudge them along faster or maybe not obviously theres plenty of examples of Public Companies who have a long leash, so to speak i think once investors understand that the underlying business is profitable, and that, you know, youve got these sticky customers where the revenues are so predictable, and so it makes sense to continue investing in growth, especially as that pay back period shortens, as the company gets even more scale. For us, we were always focused on scale market leadership is going to maximize share value over the long term the volatility of the markets, thats always been the case. Youve got to focus on the long term whats ryan cohen focusing on for the long term . Whats next . Retirement is overrated that hasnt been very fun. Im talking to entrepreneurs, different businesses, different corporate boards i dont know, maybe one day ill start another business i want to get your thoughts on the whole process of getting investors to buy into an idea, because your company was had d headquartered in florida, you had a hard time in the beginning raising capital. What would your advise be to other entrepreneurs . Dont stop, keep your conviction, keep your head down. We had over a hundred people that actually passed on us i think they were right in terms of how difficult it was to go head to head in this category against amazon but i think that everyone underestimated the execution and so we stayed focused we didnt get distracted by shiny objects. We were really good at doing a few things really well and ultimately, you know, we showed investors that this was a durable business and we got them to believe in us whats a shiny object whats an example 99 of ideas are shiny objects. We say we have operating principles at chewy and we say, you know, execution over ideation its just so important in a startup, where, you know, youve got limited resources, youve got limited time and capital, you have to stay focused i understand that, but bezos if he were here would say you have to fail often and you have to fail big. I think as you get larger, you really have that optionality. But in the beginning you really need to execute very well. And you really dont have the optionality to fail. I would say instincts and having strong today the company has more optionality than it ever had. But that happens over time all right ryan cohen, thanks for joining us thank you for having me chewy, your baby, goes public congratulations. A special day thank you for having me. Speaking of amazon, responding to former Vice President joe bidens tweeted challenge, the companys tax practices. Ylan mui is in washington with the latest reporter the fight basically sums up the entire debate over Corporate Taxes into two kind of snarky tweets. Joe biden started this hes now of course running for president. And he posted this tweet yesterday morning. I have nothing against amazon but no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers. That tweet linked to a story with data showing amazon paid zero federal income taxes last year despite earning nearly 11 billion in profits so last night, amazon fired back, saying its actually paid 2. 6 billion in Corporate Taxes since 2016 they tweeted, we pay every penny we owe congress designs the laws. Assume bidens complaint is with the tax code, not amazon. The company has a point here, Corporate Tax receipts have plummeted since congress lowered the rate from 35 to 21 at the same time leaving some key deductions and credits intact Government Data shows Corporate Tax revenue is down 11 billion so far this fiscal year, thats a nearly 9 drop and its much bigger than even some critics were expecting. No one is really sure why recepti revenues have fallen so dramatically maybe there is not as much repatriation as they thought maybe theres less tax revenue to collect in the first place. Maybe companies are really good at working the system to lower their rates. But guys, whatever the reason, this twitter beef makes two things very clear. One, those numbers dont play well politically, and that Means Companies like amazon will continue to be a punching bag on the campaign trail back over to you all right ylan mui, thank you. Meanwhile, lets take a look at shares of broadcomm, getting crushed after lowering its revenue guidance, seeing the, quote, effects of export restrictions on one of our largest customers, referring to huawei, and seeing other headwinds in the business as well we will discuss after the break. Every day, visionaries are creating the future. So, every day, we put our latest technology and unrivaled network to work. The United States Postal Service makes more ecommerce deliveries to homes than anyone else in the country. Ecommerce deliveries to homes feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. Welcome back to squawk alley, im are a harahel solom. The owner of the attacked oil tanker is cricket tontradictings on the source of the attack. Iran has denied its responsible. The u. S. Will get a chance to extradite wikileaks founder Julian Assange interim hearings are likely to be held this summer and fall new york has ended religious exemption to rules firing that schoolchildren in the state be vaccinated Governor Andrew Cuomo signed a new law minutes after it was passed by the state legislature in response to the nations worst Measles Outbreak in decades which has hit new york especially hard. If youre stuck trying to find dad a gift for fathers day weekend, how about some Plastic Surgery . A new report from the American Society of plastic surgeons says more than a million men had some form of cosmetic work last year, an increase from 2000. The most popular procedures are rhinoplasty, eyelid surgery, and liposuction. Happy fathers day thats our cnbc news update. Lets get back to squawk alley with morgan. Youre getting a hard and chocolate, matt, honey, thats it thank you, rahel dom chu is on the floor with a breakdown of todays action overseas morgan, markets across europe are set to close lower as weak industrial data out of china over heightened trade tensions german dax has its second straight positive Week Technology stocks are dragging the markets to the downside on the european side of things. Look at shares of europes biggest chip makers after broadcomm warned of a global slowdown in technologies, infineon technologies, st microelectronics, and ams. The onetwo punch of trade essentials and weakness in the bond market has pressured some of the biggest lenders in europe amid that uncertainty. European investors continue to move toward safe assets. The yield on the benchmark tencareer government bund in germany, a fresh record low today moving deeper now into negative territory, all of this happening as gold prices hit a 14month high as well. A lot of those macro headwinds featuring heavily in the eastern trade, jon thank you, dom. Dom, as you were mentioning, guest dan niles was right when he joined us yesterday, broadcomm leading a chip stock plunge this morning after missing revenue and cutting guidance their shares now down 6. 6 broadcomm cited uncertainty in the global trade environment inventory drawdowns because of that, oems arent sure how this is going to play out theyre being cautious of course that u. S. Pressure on one of the companys largest customers, huawei, broadcomms ceo, called the environment very nervous. Our jim cramer tweeted earlier that the Earnings Call was truly depressing guys, there was so much in the chip sector about how good the second half was going to be. And of course, you know, we talked about it here, i talked about here there are people talking about the second half in january im always a bit skeptical, because who knows, theres a lot of living to happen between january and july but this puts it on a whole different trajectory we have to be careful about drawing too many conclusions is there any readthrough from broadcomm to apple i would say be careful, because youve got inventory issues on both sides you dont know how much inventory apples got of certain chips. And you dont know how much inventory its building up of new iphones or even who the component makers are in that as people are trading, keep that in mind. What a story out of broadcomm. And the effects that these trade tensions are having. As we go to break, major averages here, pretty tight range. But well off the opening lows. Were down 24 points on the dow. Chewy at 37. 5 is now the fifth best debut of the year were back in a minute driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. Do you think the company has become too big that it should be more closely regulated, has google become another tech monopoly mike, if we are going to focus on some really hard Computer Science information problems, like being part of the google really helps us because were able to use dish signals and technology that they have to be able to figure out whats the right way to do our recommendations. You need to be this big to solve the scale of the problem because youre so big . Well, having having having enough scale does help us build systems that are world class, to be able to address this and that was youtubes ceo put on the spot on the issue of googles size, a big theme from the code conference this week. And as calls to break up big tech have grown louder, sully c c Silicon Valley has stepped up its defense. Is a potential breakup better for stock prices thats the thesis of our next guest who joins us with mark mahaney. Yusef, you have this note arguing that a breakup could be good for stocks. Is it kind of a weird conundrum where the threat of a breakup is bad even though a breakup itself is good . On the possibility of a breakup, dont hold your breath, it would take years to have visibility into that, thats number one the issue is very complicated both on a domestic as well as an international level. We believe a breakup would unleash accretive it would be accretive to shareholders over time, because you would allow these businesses, which are already very much at scale, if you take facebook, its four or five different businesses already have over a billion users. Even if broken up, these businesses will be at scale. Theyll be able to compete and be more nimble, get their own financing, et cetera, and will not be in the crosshairs of reporters. If you look at a pure sum of the parts analysis, look where these things should trade, look at comps, and thats what the note we published this morning was about, making some relatively conservative assumptions about what these businesses should be worth separately in the case of facebook, for instance you look at somewhere between 25 and 35 upside to current shares over the next 12 to 18 months. So yes, we think a breakup is going to take time it may not happen, ultimately. If it does, it will still be positive for the stocks. But mark, thats the trouble, isnt it, is that you could end up with one type of regulation that restricts the business practices. That would be bad. And maybe a breakup is the least likely scenario. But that would be good how is an investor to parse it let me try two points on you. I largely agree with yusef on this, i think he nailed it are there assets within these companies that investors would love to get their hands on that they could buy and sell them independently or individually . Absolutely investor interest in an asset like a spinning off of aws would be enormous. Investor interest in a spinning off of instagram would be enormous im sure interest in a spinning off of youtube would be enormous too. Theres already been preregulation impact, thats the inability of these companies to do large scale acquisitions. I think these kind of acquisitions are off the table, probably have been for the last two years. Its probably one of the reasons why google didnt attempt to buy twitter. They knew the reporter pressures they would face. I think thats the dog that isnt barking or whatever the expression is. The ability of these companies to do large Strategic Acquisitions is off the table and they are having increased expenses because of regulation the last thing, to yusefs point, absolutely, this thing would take ten years to play out if any of these companies were to be broken up. Yusef, it looks like in your note, youre making this argument for upside in alphabet and facebook what about amazon . I would say the same theory holds there. Clearly, as mark just said, rightfully, aws alone is probably worth somewhere between 300 and 500 billion, its a business thats generating this year about 35 billion, growing at 40 , generating very healthy margins. I think if that were to be trading as a separate entity today, it would trade effectively at somewhere between 40 to 50 even of amazons overall value. So clearly we think theres value in potentially breaking up amazon but i highly doubt anything happens short term or even medium term. Given all the charter, certainly worth pencilling out mark, yusef, thank you thank you still ahead, chewy unleashed. Shares surging this morning following the debut here at the exchange theyre currently up 68 dow meantime down 33 were back in a few. Im scott walker coming up in halftime report, could the feds hand be forced earlier than expected . Plus chewy surging more than expected well find out whos buying the stock. Stephanie link has been busy buying shell tell us the names you need to know when we see you at noon jon, were about 15 away, its less than that see you then, scott still to come, backed have i visa, mastercard, uber and others well discuss facebooks venture into cryptocurrency ahead of its debut next week. And next, the supplier to Companies Like beyond meat and tom bradys own protein line the ceo of pureis joins us on the other side of this break driverless cars. All ground personnel. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. No matter what you trade, at fidelity be go[ laughing ] gone. Woo hoo. Welcome to my house mmm, mmm, mmmmm. Ball. Ball. Ball. Awww, whos a good boy . Its me. Me, me, me. Yuck, thats gross. You got to get that under control. [ dogs howling ] seriously . Embrace the mischief. Say get pets tickets into your x1 voice remote to see it in theaters. Welcome back lets get a check on chewys shares, you can see up about 69 . 37 and change priced at 22. So doing quite well, guys. Meantime, tyson foods the latest to enter the alternative meat business, announcing theyll use pea protein as a chicken substitute where are these Companies Getting all this pea protein here is pea farmers in the u. S. To service Companies Like beyond meat and also tom bradys protein line, tb 12. Tyler, great to have you on, thanks for joining us today. Its great to be here today to talk about pierces role in the plantbased movement what is your role great question. We are a u. S. Based company that develops seed and also manufactures pea protein and that system is an end to end model where we can develop a plantbased protein that can be used to make foods out of to feed people. Is there enough are there enough peas . Are there enough of these crops being grown and capable of being manufactured right now to meet all of the growing demand . Its an exciting time, especially for farmers and for food manufacturers and food eaters alike when it comes to peas. Peas are a necessity for farmers when we look at biodiversity of crop and different Crop Rotations and i certainly believe theres enough supply and a growing demand and need for nitrogen fixating legumes like peas to grow on land across the United States and in north america. When you look at it, theres over 4 million acres of peas grown just in north america alone and that keeps growing year over year to build soil health on farms across the United States with the farmers that were working with on a daytoday basis to then build foods that we feed people instead of animals with. So, tyler, why is beyond meat importing pea protein from europe and i believe canada if theres enough in the u. S. Yeah, great question. So, with puris, were the only u. S. Manufacturer today and so theres certainly a lot of investment going in the space to build actual manufacturing facilities that can produce the food theres a shift between the way food has been eaten in the past from meat, eggs, and dairy to the way people look to eat food for the future, which is powered by plants, and theres an a significant amount of investment to build the infrastructure to make that happen puris has believed in this for over 30 years now so weve been at it for a long time and with our plan, weve taken investment from car gil to allow ourselves to build more manufacturing capacity to supply players like beyond meat and others so they wont be limited on high quality, greattasting plantbased ingredients and its important because i say greattasting because weve all had healthy diets before and ate healthy and it didnt taste so good so how do we build a more Sustainable Food system thats healthy for people and also healthy for planet you have to make it taste great so the sustainable choice is simply the easy choice to make tyler, growing up, health food was big in my house, we had rice dream and vitasoy so you bring up a key point what is it about the technology, the capability around manufacturing itself at this point in time thats so different that enables that to be the case . For puris, were unique because were looking at what is the taste, the functionality and the ergonomic profile of the peas themselves for the farmer so they work for our various farmers. We work with over 400 farmers in the United States and design proprietary seed varieties that they grow, its all nongmo, organic, and we want them to grow them so they can add nitrogen to the soil, sequester carbon, add to the Crop Rotation and then we buy everything they grow back and from there is when the fun starts, we take those peas and we use technology that allows us to separate the peas and make those ingredients taste good that then have the right use case so they can replace their animal counterpart into the foods that food eaters are looking to eat today, which happen to be powered by plants and for Peoples Health and also the health of the planet hey, tyler, a lot of our viewers really want to know, a, whats the besttasting product of the ones that are out there and b, if a Quick Service restaurant chain is going to do this at scale, not a test in a few restaurants, if mcdonalds is going to do this nationwide, who are they going to choose what do you think . Yeah, great question. When i look at it, it all takes place on whats the food built from and im going to be hyperfocused on that impact it has on the land and that impact it has on my diet. I choose clean label all the time i want nongmo thats my preference thats the way if were talking about burgers or sausages, thats the way beyond meat has built their products and i think as we go forward, there will be a lot more people coming to the space and it will be very interesting who leverages the right technology and partners with the right suppliers that can help create that future to give, to your point, that product that food eaters want to eat. Tyler, in terms of that supply chain, u. S. Farm incomes are down Something Like 45 from the peak in 2013, a key part of that is because youve seen depressed prices for some of these major cash crops like corn, like soy, et cetera. How much of that is an opportunity, i guess, how many farmers, additional farmers, are you now able to have conversations with to start growing more of these crops that youre manufacturing and how long does that shift over to some of these new crops take its a great question when you look at what you just explained, soybeans, corn, thats the agricultural system that weve come to recognize in the midwest and in the northern great plains and what were doing with peas is how can we add to that Crop Rotation . How can we break up the just the soybean corn rotation and add peas to it it plays a very impactful role with disease resistance, also sustainability and soil health of the various farms the time is now. Were partnering with farmers all across the United States and really for a different reason than the past where a lot of Agricultural Commodities have been developed to feed animals and which is fine, but theres a shift and were trying to bring that value shift, whether it be organic or regeneratively grown crops to food and if you can do that, youre building a sustainable system that not only the scale is needed, the scale can be done because it works for all stakeholders in the supply chain. Yeah. All right. Tyler, puris food ceo, thanks vr joining us today wee got more squawk alley in just a few moments feel that . Thats the beat of global markets, the rhythm of the world. But to us, its the pace of tomorrow. With ingenuity, technologies, and markets expertise we create the possible. And when you do that, you dont chase the pace of tomorrow. You set it. Nasdaq. Rewrite tomorrow. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. Keep your eye on chewy today, obviously big ipo here at the nyse, opened around 36. 30, got to 41. 30 around 11 30 this morning, east coast time, now back below 35, actually hit 34 a few moments ago which is obviously below the opening trade. Still 50 plus gain for the day which had been the fifth best day one performer of the year. Yeah. The puns are just all over the place. I dont know which one to go with so im just going to leave it alone dad jokes its ahead of fathers day. It was another major week for ipos, we had strong start out of the gate with crowdstrike and fivr as well and next week i think everybodys expecting to get that direct listing from slack as well. That will be big. Not to mention a ton of focus on the fed for obvious reasons and the upcoming g20 meeting so rest while you can this weekend. For now, lets get to the half and the judge at hq. Happy fathers day too. Im scott wapner front and center this hour, the broadcom broadside, the stock getting hammered did hopes of another leg for the rally just get pounded as well its 12 00 noon, this is the halftime report. Announcer five days to the fed, but economists are weighing in today we have new and exclusive information. A big question mark for the chips and tech after broadcom reports quarterly numbers. The technicals are saying something very important about this key part of the tech sector stephanie links making big moves in two big names i think chewy may be it