Transcripts For CNBC Squawk Alley 20240714

But youve got to imagine strategically the fact that theres an impeachment inquiry now open on the president and at least in theory there is some statistical chance that theres a removal of a president , although everyone reviews as extremely unlikely here, if youre the chinese you might think lets wait and see what happens. Flip that and look at the incentives facing the president. Hes facing a situation where he wants to prove that he is delivering on the economy for the american people. He may now need a deal, need a victory here politically and economically more than he did a week ago, so the pressure on him might be to get a deal even if its not as good as he might have set out for initially but this president has been very focused on this and said hes only going to take a deal if he feels its a win for the american people. Eamon javers outside by the flags doing great work today keeping our viewers attuned to the news appreciate that. Good morning once again, everybody. It is 8 00 a. M. At juul headquarters in san francisco, it is 11 00 a. M. On wall street and squawk alley is live good wednesday morning, welcome to squawk alley. Im Carl Quintanilla along with morgan entrepreneur an and jon fortt. Well turn to tech stocks to start. Rebounding after losing billions of dollars in market cap after the president s speech when he called out social Media Companies immense power they lost 58 billion in value with the nasdaq falling more than a percent it is now the time to buy. Joining us Jeffries Brent phil and brent singerling guys, appreciate the time today. Good morning. Brent, did you hear anything new or unique in that u. N. Address . Brent, can you hear me yes, i can hear you fine. Yeah, no, i didnt hear anything new. I think we have increased scrutiny and regulation happening across the tech sector the big platforms are not immune weve seen other sectors be scrutinized in the past. You know, its difficult to predict the outcome. It certainly widens the range of what could happen and i think investors need to take that into account. You need to look at it on a casebycase basis some Companies May prove to be more regulated than others and some outcomes such as breaking up assets, spinning off assets could be positive for the stocks youve really got to look at it individually brad, i mean we could talk about regulation and what that means for the big cap tech names and the faang names specifically, but the one name that isnt necessarily exposed to those potential headwinds is netflix and thats the one that has been falling the most and underperforming the most i realize theres a competition component there as well but are the fears and i guess the selloff overblown yeah, look, theres a wall of worry on netflix but theres an opportunity to look longterm. And the longterm reality is that people are consuming more streaming video. That will go up even higher with 5g the longterm opportunity for streamers is billions of subscribers not hundreds of millions of subscribers. If you dont lose track of that, you can see theres really an opportunity to look past this wall of worry. In the short term theres more products coming out, more competition. Netflix has some things they can do such as the content slate they have coming over the next six to 12 months to offset that. But consumers have budgets to spend on multiple streaming apps i understand thats the reality that were in. I wonder what you think is going on here with some stocks that had been hot, including some recent ipos i mean lyft is off 12 for the week it hadnt been performing that well to begin with roku is off 19 for the week look at shopify, stitch fix, a lot of stocks pretty close to if it were a broader index close to what would be called correction territory. Is there revaluing around growth going on and whats the impact then on investing in startups in Silicon Valley i think theres been a lot of money thats been sloshing around Silicon Valley and private market valuations for several years now. I think theres a little clash as some of these assets have come public. I think theres a little bit of an underestimating of the rigor and frankly the intelligence of Public Market investors thats taking place by a private Market Investors are seeing that clash come together and seeing a resetting of expectations. But i look at it on a casebycase basis theres a lot of Excellent Companies that have come public, a lot of Excellent Companies that are coming public but the scrutiny and rigor and assessments of the valuation of those companies will be what it always has been for public investors and i think that reality has to be faced and is being faced and were seeing that in some of the recent headlines that weve seen, such as with wework and some of the other valuations that are being adjusted. Do you think wework is a Tipping Point in terms of that assessment in the private markets . I just wonder how much is going to change given the fact that we have now a situation where its lower rates for longer in this ongoing quest for yield . Yeah, so i dont know that i would call it a Tipping Point. I think each example should be looked at independently. There is still we are still in this low rate environment theres still a lot of money sloshing around Silicon Valley in the tech Startup Space and that probably wont stop i dont see any reason for a run on the bank or a rush to the exits. But the reality is that ultimately as these Companies Get bigger, they do need access to the Public Markets and you need to mesh the views of public investors with private investors and recently those have been out of sync. I think there will be a healthy reconciliation of that and well get back to seeing a lot of great Companies Come public, which Public Market investors are eager and excited about. Weve talked for so long about Companies Staying Private for longer, elongating the window before they come public now that the market seems to be insisting more on a path to profitability, does that window get even longer than it was . I dont know that the market is insisting more on a path to profitability but i think weve always insisted on the fact that that path exists, and so you do need to have some proven economics. If we can see that path, if enough data is provided by the companies as they come public, if the oversight of the companies and the governance are in good shape, then i think were willing still to give the same leadway we always have as investors but if the governance is not there, the data is not there, we cant do the analysis, thats going to make it really hard i certainly think there is still room for companies who are not profitable to enter the Public Markets and eventually make their way to profitability by partnering with public investors and giving the data that people need to make their assessments of the valuations of those businesses. Each new issue is definitely a test of that thesis. Well see how it goes from here on out thanks for that. Good to see you. Thank you and a day after the wework ceo stepped down from that role, another chief executive also resigning, ebays devon wenig who had been in that job since 2015 deirdre bosa has more from san francisco. Jon, he is stepping down as president , ceo and member of the board. The company, which is based here in the bay area, announcing his departure this morning and staying the cfo will step in as interim ceo while it conducts a search for a successor ebay noted it is moving forward with the potential sale of stubhub and its classifieds group. Activist investors elliott and starboard unveiled ownership stakes in the company. Elliott pushed for the sale of those two assets, arguing that they could bring in more than 16 billion. Now heres whats interesting, guys wenig agreed on a Strategic Review and shares have actually climbed nearly 40 this year, far outperforming the broader markets. Its not clear that the market at least initially sees wenigs departure as a didnt thigood tg shares this morning lower. But, guys, there are still plenty of concerns about ebays Growth Prospects here. It has struggled to compete with amazon and its gross merchandise volume is a key metric for this company. Thats the total value of goods sold on the site that has been declining. To offset slowing growth, ebay is looking to advertising and payments so who they choose as its next ceo, potentially if they could come from one of those spaces, that could tell us a lot about where the Company Wants to go next back to you. So the change in leadership here at the top, i mean is the readthrough that maybe wenig was i know theres this strategic portfolio review and the company has been under all of this and activist investor pressure is it that maybe he wasnt moving fast enough like i said, the stock is up 40 year to date so the markets think that he is doing a decent job with that Strategic Review i think the problem is much broader. This is a company that is seeing sales decline on its website when you have a competitor like amazon just go from strength to strength, growing at a much faster rate. So i think that that is it and perhaps the board felt that he just wasnt the right person to do that huge overhaul that perhaps ebay needs maybe the strategic sales of those assets just arent enough. Yeah, and if you look at etsy or shopifys performance the past couple of years, its harder to make excuses thank you. Up next, vox media acquiring new York Magazine and a bunch of other properties along with that the chairman and Ceo Jim Bankoff will jn oius right here at post 9 after the break. Stay with us at fidelity, we believe your money should always be working harder. Thats why your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than e trades, td ameritrades, even 9 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Some more media consolidation headlines this morning. Vox media acquiring new york media. The Company Behind new York Magazine and others, its an all stock transaction. Joining us exclusively here at post 9, vox chairman and Ceo Jim Bankoff. Jim, good morning. Good morning. Good to be here. Last time you were here i was asking you if you were making a call on consolidation. I guess you were making a few literal phone calls on consolidation. Some people will look at this and say its a 51yearold magazine that youre buying, but theres more to it than that how much did the Digital Properties really make the value here a ton and im glad you led with that. A lot of people know new york media for new York Magazine particularly but if you live in new york and all over the world now its relevant, is iconic and has a great history. It will continue to have a great future in printi, of course. What you may not know about new york media, its Digital Business is really its primary source of revenue, its primary source of growth they have done an outstanding job of growing and its not just by taking the great journalism thats in the pages and putting it onto the internet, its about creating new properties, new businesses one, fracor example, is called strategist that has a great lead generation business attached with it but its just entertaining, fun stuff to go through. Whether its that or the cut or vulture or grub street, these are great properties. If im being cynical looking at this space, i say, look, google and facebook are squeezing the heck out of Digital Advertising profits. At the same time, you guys and new york media just unionized. You have to deal with unionized work forces so your costs are going higher what do you have to do to make this work businesswise you raise a great point about the nature of advertising, which is scale matters, quality matters, Performance Matters this merger accelerates all of that for us. Vox media alone with our Outstanding Networks and our ad tech and everything we can bring to bear for clients was already in a really strong position. Importantly its not just scale for scale sake weve seen mergers about that in the digital space. This is about quality, its about relevance, but also about scale. You get the best of both worlds. We think thats a really appealing Value Proposition for marketers who are looking to build brand. You know, top of the funnel marketers in particular who wanting awareness, who want to be associated with engaged audiences, who want to capture that zeitgeist. We will be able to operate more efficiently but the big upside and synergy is from the revenue side we have very little overlap in terms of clients and customers so hope to bring more value to them but there are new business lines too. Theres the Commerce Business line, theres dij stal subscriptions, which is a fastgrowing area that we can piggyback and renleverage we bring a lot to them we bring a television business, we bring a podcast business, we bring a concert and live events business together we think a lot of revenue opportunity will come from it. No one would blame you for going to, say, a less frequent paper copy is that a possibility . You look at what ew has done and how si has changed, the actual physical magazines. Thats not necessary, in the case of new York Magazine, theyre doing well like all printing publications over the past decade they have seen a decline but they have stabilized so we dont need to make any changes there. A couple of years ago, somebody would have expected for you to do a video deal perhaps, because everybody was rushing after video ad dollars has something changed that youre going really in the other direction . Heres very much a property thats strong on the written word but that has pivoted toward subscription and has a print product . This is a video opportunity and ill make the case for it. Our company has been really good at video we have the leading Youtube Channel in news, we have probably 15 million youtube subscribers and tons of views. But even better, we have Companies Like netflix and hulu and pbs and cnbc working with us to create Television Products as well new york media is less mature there. Theyre starting to do that stuff. They have some shows on tv as well we could bring their intellectual property, their talent into the digital video age. Thats how the value is created and where the upside is. When you see paying for shows that are 25 years old, is this crazy . Its definitely a race. Crazy is probably a strong word, but its great for audiences, its great for content companies. Will it find its level absolutely, like any other industry but i think thats a Long Time Coming the streaming wars are just beginning and the competition is now on netflix clearly had a huge head start. Were partnering with them we have a partnership with hulu. Thats a big deal. Thats an opportunity to create a food Network Within hulu so were going to work with all these partners theyre going to bring Something Different to the table and consumers will choose. How is the ad market . Do you see any weakness either because of uncertainties or just seasonally right now right now the ad market is in a good plarce, its strong. We benefit from having a good Value Proposition. Its a cyclical business so well keep our eyes on that, but were having a good year. I guess on the heels of this deal, how do you think about media and how folks are consuming it in the future whether its the podcast, whether its print, whether its digital, how much can those different types of media be leveraged and cross pollinated and is there a point at which consumers i guess get sort of tired out . Because there is so much out there. Im so glad you asked that question i call vox media the leading modern Media Company the reason i use the word modern is because audiences want to consume across all these platforms and they dont want to think thats my magazine thing, thats my tv thing, thats my facebook thing, thats my netflix thing. What were building are brands that seamlessly travel across all those things so if youre a consumer, you dont have to have your head spinning, what is this thing, can i trust it, are they providing me quality content, whether i see it on my tv, on my phone or on a newsstand. I know what it stands for, i know it has a voice that i love or that i trust and it means something to me. Quality is the signal to the consumer that you can trust and that you can enjoy it. Is more consolidation coming . Yes, i think so in our case were going to look to be a smart acquirer that means that were not just going to buy things for the sake of buying things but if other quality opportunities come, whether theyre capabilities, i think youll see the trend across the industry you see too many of these things are done for Financial Engineering and generally those are not sustainable types of opportunities. We believe a Company Built on quality work, quality finance, quality culture and thats what were going to stick to. Given the success youve had in live journalism, conferences and events, can you extend that in this brand . Absolutely. They already had a great conference, different from the code conference which we welcome our partners at cnbc every year. Their conferences are more consumer based they have a great vulturefest which will happen in november right around the code Media Conference so we definitely think theres more opportunity for live events. Jim bankoff, come back when you buy Something Else come back before you buy Something Else. Ill be here. Good to have you. Still to come, forget breaking up big tech how about a public alternative why our next guest says we need a pbs for social media for erli you were back after this break. Weve heard the calls to break up big tech ramping up our next guest says there might be a better way, how about creating a public alternative in the style of pbs but for social media. Joining us former tumbler executive. I cant work it out for a couple of big reasons one, security. I mean if everybody were on this public thing, it would be taking incoming hack attempts left and right. You saw how the government did with healthcare. Gov. Im not sure they could handle it the other thing is just keeping up with security, keeping up with just the tech that you need to evolve at the next level and content moderation i mean theres going to be all sorts of beheadings, child pornography that people try to post to this stuff if youre public, how can you afford to moderate that . All Great Questions i think the biggest way i try to solve that question is boy making it very local the idea is basically you are accountable and part of a local public network, like your library or your school or Something Like that. Remember, facebook started as a very accountable local thing that means you can only be there if youre an actual physical member of that community so that means to me that that helps provide a lot of how many people that you see are twitter are not people or twitter, theyre somewhere in ukraine or not members of the community. And it would cut down on fake accounts, cut down on the Access Points to that security is an issue, of course. We know its an issue for everybody and its something that, again, you hope to solve at the local level as opposed to making this big Massive Network that requires a lot of money and effort to maintain have you had any kind of conversation about this idea with lawmakers or officials . No, no. I mean id love to i think that from that point of view, again, its a public good in the same way that a Public Library is, a public water fountain is. So the idea that you make people accountable and you dont want to make it a surveillance thing for people, but lawmakers who make lawful requests should be able to get anything out of there like they do from any other private organization. I guess it also raises a question, what should be public and what should be private i mean when we talk about privatizing certain things, it makes me nervous people privatizing militaries or police forces, et cetera then we talk about making certain things public, i get nervous too because of worries about is it going to be run in an efficient way whats the incentive to actually do things right . What are the penalties if security i think the main principle is this idea that, like, first of all, this is not a call to say we should not have twitter, facebook or anything else. Those things exist like cnbc exists in the same media space pbs does the idea is more that there should be kind of alternatives to that platform alternatives that exist outside the kind of Business Models of the current platforms because i think that helps both sides. Markets are helped when theyre given little boosts sometimes. Things like opportunity zones help draw investments to a certain place, things like that. So the idea is i see a little bit of a market failure in some of these platforms and the idea is to help guide that in some ways rather than breaking up large companies. Mark and his thoughtprovoking piece, to say the least. I guess some people could say, facebook, if you think were doing such a bad job, let the government try it. Thank you. Lets get over to Contessa Brewer for a news update. Heres whats happening right now. On the sidelines at the u. N. General Assembly Meeting in new york, President Trump lashed out at the democrats for the potential for impeachment. Theres no pressure whatsoever and if you take a look at the democrats, they went down to see the president of ukraine and they asked him for all sorts of things. Its the single greatest witch hunt in American History, probably in history, but in American History its a disgraceful thing the letter was a great letter, meaning the letter revealing the call russian president Vladimir Putin met with venezuelan leader Nicolas Maduro in moscow amid the ongoing political crisis in the south american nation. Russia has been one of venezuelas most steadfast allies. Prince harry and wife meghan brought their son, archie, to a meeting with Archbishop Desmond tutu at the foundation in capetown its the third day of their african tour tutu is a nobel prize laureate thats our cnbc news update for this hour. Ill send it back to you, morgan. Contessa, thank you. Coming up, the crackdown on vaping continues as the ceo of juul steps down this morning former health and Human Services secretary Kathleen Sebelius weighs in next. Dot a u13p 8. Ngonywhere. Hmm. Exactly. Liberty mutual customizes your car insurance, so you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty by the way, shes the it wasnext mozart. G day. As usual we were behind schedule. But sophies enthusiasm cannot be dampened. Not even by a runaway donut. We powered through it in our toyota prius. Because a stars got to shine, no matter what. Its unbelievable what you can do in the prius. Toyota lets go places. Getting a market flash today on match group Julia Boorstin has that back at hq. Match shares tumbling on news that the ftc is suing match group, thats the owner of a number of Online Dating Services Including match, tinder, ok cupid and others alleging they used fake Love Interest ads to trick hundreds of thousands of consumers into purchasing paid subscriptions to match. Com they also say match has unfairly exposed consumers to the risk of fraud and engaged in other allegedly deceptive and unfair practices. You see match shares are now down nearly 6 we have reached out to match group for comment and have not heard back from them just yet. Back over to you, carl. Julia, well watch that, thank you. A lot of vaping news to get to as merger talks between Philip Morris and altria break down you have the ceo of juul stepping down. All of this comes a day after massachusetts bans sales of all vaping products for four months in the toughest crackdown we have seen from a single state so far. Joining us this morning in a cnbc exclusive is the former health and Human Services secretary under obama, Kathleen Sebelius, previously served as governor of kansas from 03 to 09. Welcome back, good to see you. Thanks. Nice to be with you. I wonder if you think weve seen a breakdown in Public Health regulation when it came to vaping in this country . Well, i think what you have right now, carl, are two things kind of colliding. The perfect storm, if you will we have this very Mysterious Illness that is killing people and two of them two of the deaths are here in kansas, about 530 people have gotten very ill. The cdc doesnt still know exactly whats causing it, but they know its very serious and they have about 100 people on the investigation, according to dr. Ann shugat, their Deputy Director so thats very alarming. To me its like a food outbreak where a voluntary recall would be a really smart thing to do until we figure out if its the devices or what exactly the ingredients are. But theres that illness at the same time theres a real focus on juul as the leading company in this marketplace who have, i would say, focused a lot of their marketing on kids, on flavors appealing to kids, on cool devices appealing to kids what you have is in 2000, about 28 of High Schoolers smoked and tried their first cigarettes that has gone down to 6 in 2019 but unfortunately we have 25 of High Schoolers who now are vaping addicting kids to nicotine is never a good idea. And i think that piece of it has to move much more quickly from the fda. And i have some thoughts about where they could go, but i think these two issues are now coming together so governor baker has said no more vaping products at all in massachusetts. I know governor kelly, our new governor, is looking with her health and Human Services secretary at what can be done as just a Public Safety outbreak here in kansas and i think that governors will follow suit very quickly you point to juuls marketing practices and thats a fair point. But dont people have the right to ask what were these products doing on the shelves without any research why are there still no restrictions on flavors or distribution or advertising when it comes to these products well, thats a great question and i think it has been a breakdown. When they first came on the market what juul said to the fda was we are just like any other tobacco product. And since you now have Regulatory Authority over the tobacco products, gather some information on us. We say we are safer and better and a good gateway for smokers out of smoking and into a less harmful product. But they put their advertising as if they are really a Smoking Cessation product. At that point the fda should have said very clearly come in, prove youre safe, prove this works as Smoking Cessation and we will then regulate you as a drug other Smoking Cessation products are regulated as a drug. Theres absolutely no reason that juul, if thats their point of being on the market, if they are better and safer and actually a good Smoking Cessation tool, they should be a prescription medication. They should prove their efficacy so you cant have it both ways and i think the fda has to move much more quickly. Secretary sebelius, i wonder if there are unintended consequences and what i mean by that is when you see a state like massachusetts come out and do a fullfledged fourmonth ban on the sale of ecigarettes and marijuana vaping products across the board, there are folks that are using those products, addicted to those products that are probably going to still find ways to get those products i wondering if it pushes them further into the black market which we know according to reports has been linked to some of those illnesses i wonder if there is a risk of cracking down too hard given addiction and behaviors around addiction . I think that there is always that risk. The problem is until the cdc really identifies what is the ingredient, the product, the reason that these very serious illnesses and deaths are occurring, i think we need some sort of ban to warn people that these are very dangerous, that you could die. And i am sympathetic to addiction, but there are other Nicotine Products that people can get, which have proved safe and efficacious and those are on the market we know that serious addicts could get those products right away what we dont know is why people are dying and getting very ill from vaping, so thats got to be determined i think governor baker has taken a wise step to just say until we know something more about this, we need to urge people just not to use these products at all we dont want to see more illness and death. At the same time, we have the longer term regulatory issue where juul is marketing itself as Smoking Cessation but has never gone through the reggigord the testing at the fda that would allow them to approve Smoking Cessation efficacy and approve safety we know that kids are getting addicted to tobacco, i mean to nicotine at very high rates. So the products are really not great. They may be a step more safe than cigarettes, but that hasnt been proven yet. And in the meantime they are being marketed like crazy with bubble gum flavor and very cool devices to lots of adolescents who were not going to start their first cigarette and now have moved to a different nicotine product. Secretary, are there readthroughs here, lessons for the cannabis industry . Lots of investment going into that right now and still lots of questions about what the impact of some of these cannabisrelated products might be on Public Health. Well, i think, again, we still arguably dont know enough about cannabis, and particularly what it does to adolescent brains and teenage brains. Im hoping that that Research Picks up steam there was a reluctance, frankly, during the Obama Administration to do a lot of research in that area i think states now have widely approved the use and certainly medical use of marijuana, whatever that means. But there hasnt been the kind of efficacy and safety tests across the board so weve got issues of cannabis, but the vaping issue i think is, again, taken off like nobodys business and i think Tobacco Companies, frankly, saw their market share dropping dramatically in the United States this market share increasing rapidly. Teen use is now, as i say, 25 of High Schoolers, doubled over the last two years they saw a good way kind of into the market so using exactly the same techniques that Tobacco Companies used in the early days to market to kids, to be cool to kids, to have products that really appealed to kids. Thats a very dangerous Public Health path for us to go down again and certainly we should learn lessons and move much more quickly. Thats why a lot of people are suspicious of altria having a stake in juul. You bet. Should that be a source of concern . Well, i think it is a source of concern because altria made their money and staked their company on selling legal products but products that we knew if you used them exactly as directed, they would kill you. And i think the United States has had a pretty effective Public Health campaign, and again doubled down in the Obama Administration to particularly convince young people not to use tobacco. Gave very clear warnings and drove down that first time teen use of tobacco by the use of taxes, by the use of Public Health warnings, all kinds of prohibiting advertising that was cool to kids so thats been very effective. But suddenly we have a new product in the market which is addictive. We dont really know how much harm its going to do. We dont really know what its going to do to kids. As i say, if its an effective Smoking Cessation market, then prescribe it through a doctor. Secretary, thanks for shining some light on it just so much to get to on it today. You bet. The story is moving very quickly. Thank you again. Sure. Good to talk to you. It really is. Meantime, what to expect from amazons product event this afternoon. Thats after the break stay with us david, the earnings bulls are back we had a fed rate cut, we have encouraging economic news. Are you on board i think im on board with respect to the Third Quarter but the Fourth Quarter of this year in calendar year 2020 were a little more pessimistic. You have consensus looking for 10 Earnings Growth. Were looking at 3 to 5 Earnings Growth next year. That is a big difference. What do you see differently . The two big driversof that difference are difference in our view on Revenue Growth so analysts are looking for a bit more robust Revenue Growth and the second is margins. A lot of looking for Profit Margins to expand and we think theyll remain more flattish in 2020. Youve got some assumptions there. What could go wrong . The big risk is that we see a deal on trade. Theres a tight relationship between earnings and Manufacturing Activity if we were to see forward progress, if we were to see Manufacturing Activity reaccelerate, that would leave us on the low ending of where earnings shake out next year is this the year amazon breaks free of the home and goes mobile thats the big question heading into amazons product event this afternoon. Deirdre bosa is watching that as well from san francisco. Carl, that is certainly the key question are we going to see that in the form of wireless amazon earbuds. The company well show you right now is setting up for its third annual device event. Its taking place at the iconic spheres in seattle about an hour from now guys, for months reports have swirled that amazon was developing its own earbuds to bring alexa beyond the home. They have the echo auto that goes in cars but earbuds that you can bring with you everywhere would be a major step in its smart assistant evolution. Heres the field amazon would be entering it is a very crowded one on the high end youve got bang and olufsen, sennheiser. Amazons are expected to be priced below 100. That would undercut all of the competitors here they could double as a fitness tracking device. It would be amazons first foray into the Health Monitoring space. We are likely to see upgrades to the existing lineup of devices and perhaps some new alexaenabled products the buzz about one last year was an alexapowered microwave earbuds, though, guys, would be an entirely new product category keep in mind if we do see them today, though, there is no guarantee they will be a hit amazon has a mixed track record with hardware. If you remember that failed fire phone. Finally, if we do not see earbuds or a mobile alexa device, that could raise some questions about amazons devic and alexa momentum in this increasingly competitive space back to you. Yeah, as far as i know amazon has never reported exactly how many of any piece of hardware they sell or how much money they make at it so well be watching that. We dont even know if its profitable, but i would guess not. Right, exactly. Coming up, the cofounder and ceo of allbirds will give his take on amazons latest shoes and what the company is doing to prevent other, lets say similarlooking shoes. We are bk tea icbrk. Acafr quk ea at verizon, were building the most powerful 5g experience for america. Thats why the nfl chose verizon. Because they need the massive capacity of 5g with ultra wideband, so more screaming, streaming, posting fans. Can experience 5g all at once. This is happening in 13 stadiums all across the country. Now if verizon 5g can do this for the nfl. Imagine what it can do for you. Markets and headlines. Ayith 24 1 st wus when did you see the sign . When i needed to jumpstart sales. Build attendance for an event. Help people find their way. Fastsigns designed new directional signage. And got them back on track. Get started at fastsigns. Com. 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. Amazon under fire. The tech giants new sneaker bearing a similar design to auburns flag ship product, the wool runner. We tested out both here onset yesterday but joining us now is the cofounder and ceo. Joey, thanks for being here today. Certainly quite a number of wool sneakers on the market but in terrors of this new one from amazon, how would you categorize the similarities. Yethanks for having me on. At a minimum, its at least inspired, but there are some striking resemblances that weve seen would you say this could fall under copy wright enfringement you know, thats a, its part of the business in fashion as ive come to learn ch we have probably a couple dozen copy cats out u there and the speed at which these guys come at us b has been startling. So you know, getting into the legal conflict is always a murk territory. Were a company of about 500 people total i would suspect amazon has more than doubled that in just lawyers. But its probably a risky territory to wade into but you know, were also looking. We look carefully every time this happens joey, im looking on well, amazon searching for wool sneakers. And i see red trade. I see urban fox. Theres a lot of folks trying to look like you. Does it matter if its amazon as big as they are, as powerful as they are you know, it does matter. You know i think, i think what the issue that weve had with some of these copy cats is co copying the look and feel of the product weve done is one thing and i wish people didnt do it we put a lot of work and craftsmanship and a lot of r and d that goes into making sheez shoes, but its different when they dont follow the same practices. We source the most humanely sourced wool from the most humanely treated sheep were 100 Carbon Neutral as a company and these knock offs are trying to siphon off demand weve created for category of product. Theyre not taking the same care on the environment not just dispoint, but when ewe look at what consumers care about these days, they expect companies to do more than just try to make money for their shareholders they expect powerful companies to use that. To take responsible action on things like the environment and were serply doing our small part were a small company. Were trying to lead the way and do the right thing and i would expect someone as powerful as amazon and probably one of the most powerful retailers in the world if not the most powerful, they could take that responsibility to heart. Sfl a small but growing company and certainly growing brand awareness. Have you been approached by other Companies Looking to potentially take allbirds over i mean nothing to the degree that weve really considered seriously. We see like a pretty big opportunity. Were about making amazing no compromise products and doing it with a light impact on the environment. We think were making an impact in terms of the statements were making one of the points about some of these copy cats, we have developed carbon negative, meaning its better for the environment that we make some of the components like the foam on the bottom of our shoe than if we hadnt of made that shoe at all. Weve open sourced this technology to the entire footwear industry. We think were on to something kind of special. We are happy to share a lot of what we do particularly that foundational rnd when its good for the environment. Wed love for these copy cats to take all that good stuff and preferably not steal the design, but for those reason, were not really a company thats for sale were having a fun time doing it how quickly is allbirds growing . Its been a good start. You know we only, we began selling to consumers back in march 1st of 2016. And we sold over a million pairs of shoes in that first two years. Were now an 18 countries im in berlin today because were opening up a store and we have a small team here we sell to about 1. 75 billion people can access us with Free Shipping and return in 18 countries around the world we have basically given consumers this incredible value because weve gone and served directly to the consumer instead of the wholesale model and that allows us to put the extra value thats reserved for the retailer, we pack it into these amazing materials and it makes a great, comfortable product thanks for joining us today appreciate it. Going to do it for us here n squawk alley as we continue to see stocks do well lets get to sully and the half. Thank you very much and welcome to the Halftime Report scott is out i am in. And d. C. Adding a new layer of uncertainty on wall street but it seems like this teflon r market is going to pull a swifty shake it off, at least for now d. C. Taking its first major step to impeach the president. What it means for this bull run and how to play this market from here faang out of favor another negative call on netflix. The stock down double digits in the past week. Facebook, amazon, alphabet and apple down, too. Should you buy on this drop . And a bullish new call on the home builders. Why it