Higher density battery, greener, but the technological breakthrough towards that are still speculative so the market reacted negatively to that news. Right the bull case is that were seeing built today say that if you were to be able to cut the cost by 56 in three years, it would have enormous ramifications on volume, implications for margins and ostensibly positive for the stock. Cramer said it best this morning, if you were a believer going into the event, you remain a believer and if not, maybe youre not. Fair enough its absolutely true that the Battery Technologies worldwide tesla and everybody elses will continue to get cheaper and better thats a given thats just the all laws that support Technological Breakthroughs support that theory so thats already baked into the price. You know, all the disruptive capacity of the technology is already baked into the price theres Everything Else is just sexy brand, elon cult personality who of course deserves all the credit in the world he admitted before the stock split that it was too expensive. This is all the disruptive potential is already baked ibrahim, i think we may have lost him carl, it was interesting he just said the disruptive Technology Already baked in but a lot of folks are looking at the fact that tesla is bringing that technology in house. Ibrahim, are you with us again yeah. Im right here can you see and hear me . Yes you cut out for a moment let me pick up where you left then you said the Disruptive Technology is already baked in but as i was just saying to carl, the fact that tesla is aiming to bring battery production inhouse, sort of streamline that supply chain, that supply channel like other Tech Companies have done, does that build into the bull case especially three to five years out . I mean, let me quote elon when i say that he said, what is it, 1,000 to 10,000 times harder to build the machines that make the machines, that make batteries. So this is if anybody can do it, tesla can. But unfortunately and i hate to be down on elon, but he usually does not always meet the time lines of which we expects technology to be market ready. So you know. It will happen i dont know if it will happen any time soon. Ibrahim, he can be modest on occasion he said that he thought there was, you know, little chance that spacex and tesla would ever succeed when he cashed out of his shares of paypal is this another case of him being modest he is already beating the competition. Where does battery day place tesla in terms of that competition with volkswagon and others coming out with ev autos over the next few years . Not just one year but a few years further than that. So thats the Biggest Issue is volkswagon. Volkswagon after their issue with diesel gate had all this lead time to start pivoting towards ev so they have all this technology, all this momentum, all these models that are going to be entering the market, which some of them already have and more and more as the years to come so tesla had this entire landscape to itself. Now its going to have to start competing with these legacy players who also have a lot of money, a lot of experience building really great interiors. People are used to them. They love some of these brands its going to be a lot harder just to its going to be a lot harder to compete when theres a lot more choices for consumers in the market. Right although weve been talking about that legacy competition for years. And there hasnt been really anything substantial what makes it different this time i go back to my point, tesla bringing battery production aims to bring it inhouse is that a game changer that vertical integration that the other auto makers arent thinking about so lets not listen to me for a second lets talk about the 33 different brokerages that follow tesla. They have the price guidance 100 less than what its trading on today so the general consensus around this is this is a wonderful possibility. We all want it to happen were all cheering on the clean, green revolution and we want tesla to lead it, but like i said, theres a lot of froth around the stock it will eventually get there and warrant it maybe not this year. Maybe not next year, but definitely some time in the next decade so theres not a lot of place for theres not a lot of space for it to go any higher because from now on its all speculation and its all finger crossing hope. Right i wonder ibrahim, youre talking about the competition finally getting their act together to some degree at scale i wonder of the recent examples that weve covered whether its volkswagon, whether its gms strategy and maybe specific to nick la, whats the biggest competitive risk that you have seen surface say in the last 12 months well, the biggest competitor of risk to tesla is theres other places for Car Manufacturers to start buying these carbon credits that make up teslas profit. Because tesla loses money on selling cars right now and has made 428 million just off these regulatory credits that they sell to other manufacturers so they can meet their mileage objectives and you know, theres going to be more and more technologies that these Car Manufacturers can buy these Carbon Offsets from. And thats going to really hurt teslas free operating cash flow because thats the vast majority of where it comes from sure. Sure is that why you think they were not included in the s p . You know, i think they werent included in the s p because the s p doesnt want stocks going up through the roof because of a lot of retail excitement and then have stocks plum met and then go up its a very cultbased stock. Its not based on fundamentals you know, the value of the company is based on decades ahead projections. And thats going to have a lot of volatility through the years. S p is not interested in having those types of volatile stocks in its index yeah. Whether its the positioning and the momentum whether or not the Committee Looked through the financials and decided the credits were too much of a crutch we just dont know but it was interesting decision, certainly will be in retrospect. Ibrahim, thanks for that yesterday was a big deal and its good to get your take thanks. Good to be here thanks for having me after the break, shark tank robert on the security behind oracle and roberts tiktok deal. Dont go my where. Squawk alley returns in just two minutes. Well, the deadline has come and gone for the tiktok deal but conflicting statements on ownership from both sides continue to cloud who owns what of the new global tiktok thats on top of the security concerns the Trump Administration continues to emphasize. Joining us now is the founder and ceo of Cyber Security firm the Herjavec Group robert herjav herjavec i want to get to the chinese tutorials that slammed the proposed deal. Give us your views what this looks like theres so much confusion around this is this a cloud deal, glorified commercial ecommerce partnership. Does it address any of those concerns that weve been talking about for the last few months . Well, i think thanks for having me. I think theres two components to it. Theres the political component of it and theres the data residency component of it. As a security person, i think what we really want to know is where is the data residing and i think the oracle walmart microsoft, whoever it is deal having the data reside within the United States is good for us. Its good for me its good for you. Its good for everyone its good if somebody bad happens. So i really like that. And most people like that aspect of it. Its really no different than the gdpr regulation in the uk and so on having our data there. The political deal is robert who owns tiktok but what does where the data resides even matter if these u. S. Companies dont have access to the source code isnt thats whats important here thats the ability for a Chinese Company either to sensor or leak in propaganda . Well, theres two elements of it the first one is the security aspect of it they do have access to the data if it resides in the oracle cloud. I think thats important do they have access to the algorithm, i think thats a secondary issue. And that goes to the influence of it. I think whether oracle or walmart owns tiktok, theres still going to be the challenge of influencing, the media in the United States. Lets not forget that current tiktok, facebook, social media is the new commercial tv this is how we influence america and this is how we influence votes and other things so the concern of the chinese influencing america doesnt go away but the data residency is an important step forward. The data ma by protected if its sitting in the oracle cloud. Does it address the National Security concerns if u. S. Companies dont have access to the algorithm, the deal as it stands right now, whats your understanding . Does do these companies have access to that, the algorithm . My understanding is that theyre going to get certain access to the algorithm. I think you make a great point i think its better than the deal before, but does it address the overall concern that the chinese cant influence social media here or tiktok no, i dont think it does that but is it better than before yes, because i think its really important where my data is residing the influence issue doesnt go away but i think realistically no one is expecting that to go away with this deal hey, robert i wonder as weve watched this oracle tiktok thing come together, if we can call it together, what kind of implication it has for other tech mna, how executives are thinking about a prospective deal that could come down to the whims of either President Trump or president xi at this point . Well, isnt it incredible that were living in a time where the political driver is influencing this large scale tech i think it also goes to how important tech is to america right now. I mean, look at most of the growth its all been tech driven. I think in the future what this tells us is you got to be very careful when you enter Foreign Countries in terms of how you handle the data, where the data is and how you go into these markets. I mean, i really think that weve got to be careful about where were sending our information. And i think this speaks to how quickly tech is becoming a political influence for so many companies. I agree my point is the Companies Might have done the math and the diligence and decided the security concerns were satisfied. But, at this point, the bar to get the government clearance on that same point of view is just so much higher than it was even a year ago i mean, its incredible a year ago would we even be talking about stuff like this . I did a speech a while ago for the government around security and i said the governments never going to go into china and take care of our security. We have to take care of it ourselves. Here is government is actually stepping up and doing that for us and i think thats a major step forward. I think in the future the government is going to take a much more active role in how the algorithms are written, who has access to them and which countries they can play in really no different than tv stations today and controlling larger media at the same time, robert, what we may get falls far short of what the Trump Administration itself said were the concerns just weeks ago but i also wanted to ask you about wechat we spent a lot of time focussing on tiktotiktok some argue wechat is the bigger threat should the government be doing more but american companys use of it abroad in china . Well to your point first, im not sure what this deal looks like anymore i think the road we started down is definitely more secure, but im not sure what the deal looks like anymore im not sure the government is going to get out of it but i think they are going to close something from a political gain perspective im with you on Wechat Tiktok is a lot of dance moves my good friend howie mandel is a big star on tiktok with dance. I do see where it could go, but its not there today wechat is an actual Communications Platform that many, many people are using. I think the government is going to turn its eye just quickly to wechat it has already to some degree, but my Security Issues are actually bigger with wechat today than it is with tiktok today. Obviously a much larger platform right then why didnt the administration go further with those wechat restrictions . They seemed very, very scaled back when we actually got them there were fears they would be much more stringent when actually they only affected what about 12 million users here in the United States . Well, i think that the issue with tiktok is it has a much wider influence. I think that this is so politically driven that tiktok can influence a very large scale of people. And it just simply the number of users. I think the current view from the government is that wechat is a communications media, less of an influence media and with the election coming up, i think theyre very concerned about influence a little more than security today. Thats a great point and well leave it there, robert well also make sure we go check out Howie Mandels tiktok account. Youve intrigued me now. Thanks for being with us and hope to talk to you again soon thank you big driver of the morning today is obviously nike. Were going to break down whats driving that stock as it is off session highs as you can see but still an alltime high going back to the ipo 40 years ago and a 45 gain so far this year. Dont go away. I felt like. I was just fighting an uphill battle in my career. So when i heard about the applied Digital Skills courses, im thinking i can become more marketable. You dont need to be a computer expert to be great at this. These are skills lots of people can learn. I feel hopeful about the future now. 82 jump in online sales the rebound in china, nike shares up almost 9 this morning after the earnings last night. Ubs nike analyst jay seoul is with us on the quarter jay, thanks for the time this morning. Thanks for having me. Where do you think the street was slow to raels just how the quarter was shaping up i think one area in particular was the amount of leverage that nike got on fixed costs. Nikes guidance said theyre going to have about 300 basis points or so of improvement in their operating margin on the sga line thats unusual for nike. They said their sales are up 10 but expenses up basically flat that was a huge surprise and a big driver of upside attorneyings i think the big reason the stock is up this morning interesting is that how novel is that cost discipline and could it translate to other areas that we might not be as material, for example, but that weve talked about in the past, the acquisition of new talent contracts, endorsements, that kind of thing . Well, i think its going to be very sustainable type of leverage i think they are going to continue to see efficiencies i think one reason were seeing the big expense leverage right now is that nike is finally realizing the benefits of the many years of investment they made in ecommerce platform, supply chain and thats what got the market pretty excited is all of a sudden where people are wondering where is the margin story going to happen, all of a sudden its happening now. Thats interesting. For those out there who were trying to hold out hope on the wholesale model, on the physical retail model, was there anything in there that gave you promise gosh, you know, thats a great question not that much because nike is basically telling us that in a quarter where they actually actively tried to reduce their exposure to some what they call undifferentiated wholesale channels, they were able to capture that demand online through their own apps and own stores nike is able to actually get the consumer to buy where nike wants them to buy. Thats really surprising not a lot of brands figured that out yet and bodes well for the future of brands being able to sell directly to consumers it doesnt bode well for the wholesale players across the retail landscape. Nike took its products off of amazon, everyone thought that could hurt the company in fact, we did see direct sales pick up and in the same sense talking about tesla bringing more of its production inhouse. Nike brought some of the sales, direct sales inhouse. Do you think other retailers will try to imdaitate that model can they i think they will it will take a lot of money and investment to get there. People dont realize what a huge advantage nike has digitally Ubs Evidence Lab study that weve done shows the Nike Training Club and the Nike Running Club app are actually more downloaded than the peloton app and wide margin. Theyre in the top ten of all apps that are downloaded in the United States. Thats been true for over five years. Nike has incredible amount of Digital Engagement that theyre turning into sales thats hard to do for other brands but theyre going to try no doubt. Thats interesting. Kind of reminds me how lululemon acquired mirror, right maybe thats a play for digital channel to increase sales. Do you think that we could see more mna in this area . What about nike . Could it acquire a connected Fitness Company to follow that model . Well, you know, i think lululemon, a lot of the companies have the same idea they want to connect digitally with consumers and build their own audiences. They cant rely on the mall to bring consumers and Department Stores to bring them consumers they want to do it themselves. They are figuring out a way to connect with consumers beyond having an instagram feed or twitter or Something Like that and so i think were going to continue to see is companies try to build it themselves really what nike has done whats amazing is theyve done it themselves i think that youre going to see other companies maybe theyll try to skip a couple steps and buy something but in reality it will be better if companies try to build their own apps and figure out what their Consumers Want and build whats right for their own brands. Jay, a couple years ago, actually four years ago i think it was when kaepernick became a real story in the nfl and we were trying to figure out whether companies would try to hedge their consumer bases in the face of rising polarization, nike was one that you knew where they were going to go. And certainly they followed through on choosing a side and at the time we thought is that going to be a liability for shares i just wonder why you think its been virtually ignored at this point by the street . Well, i think the most important thing are the earnings and whats the biggest driver of earnings over longterm is Product Innovation what we dont talk about enough when it comes to nike is how great their Product Innovation has been this summer and its not just footwear where you have things like the vapor fly 4 , great things in apparel and new womens maternity line has been a new thing for nike and some of the consumers have really liked. Thats whats driving the business nike is an amazing brand one thing about it it is culturally relevant. Nike says something, people take notice thats a sign of the brands power. But the most important thing and what the street is responding to is the fact that they have great products, taking share, they have a tremendous marketing machine and great distribution model. And naturally whats going to drive a lot of longterm growth even beyond what we saw this quarter. Right jay, great insight especially on the operating leverage which obviously is one of the key stories across industries and sectors going into q4. Thanks a lot see you later. Thanks a lot. Appreciate it. Well, the street is a bit mixed on tesla this morning after a battery day that some say was two to three years ahead of its time. Go to cnbc. Com for everything that was announced yesterday stay with us, the seventh employee at tesla and chief designer of the roadsters battery joins us next. Were back in ju aewst f i keep working my way back to you, babe with a burning love inside yeah im working my way back to you, babe and the happiness that died i let it get away servicenow. The smarter way to workflow. Welcome back, everybody. Im sue herrera. Here is your cnbc news update at this hour. Cindy mccain, the widow of republican senator john mccain endorsed Democrat Joe Biden for president , saying he is clearly the best candidate she has not voted for a democrat since she was 18. A report from two Republicanled Senate committees work done by joe bidens son in ukraine constituted a conflict of interest for the Obama Administration the report said it is unclear whether there was any impact on u. S. Policy towards ukraine. Russian Opposition Leader alexi naf lanny posting this picture out of the hospital. Al vanny said he will return to russia when he is well enough. The International Space station moving to avoid orbiting debris nasa says the maneuver was successful and the objects only got within a few miles of the space station. Space trash. Who would have thought thats the news update this hour ill send it back to you deirdra. Sue, thanks very much for that lets stick with tesla one day after its battery day. With us now is the seventh employee hired at tesla. And the chief designer of its original roadster battery. Gene, good morning and thanks for being with us today. Now, critics we mentioned this before the break say that perhaps battery day was two to three years ahead of its time. But hasnt that really been the story of tesla back when you were helping design the battery for the roadster what do you make of comments that battery day perhaps underdelivered well, i think theres a lot of pieces to battery day i think the most impactful things we saw were places where tesla is traditionally really strong where theyre using engineering innovation to drive down the cost of manufacturing. Very little talk about performance. The conversation was really about cost and if you look at things like the new cell design that they unveiled and the improvements in the vehicle, the Vehicle Integration that they showed, those are going to be major drivers of cost reductions in the future other pieces that were certainly further out. And a little less innovative a lot closer to what everybody else is doing particularly on the chemistry. So elon musk putting cost ahead of performance, is that the right focus . I think it is when you look at electric vehicle penetration, the key driver is the cost of the battery. And so every percentage point you can take out of the cost of the battery is half a percent on your bottom line on profitability. So, we do think that in the coming five to ten years were going to see just amazing breakthroughs come together to get the up frontcost of batteries down into the 50 per kilo watthour tesla laid out its plan for that over the coming, say, probably more like five years than three in my view okay. So five to eight to ten years out. Is it fair then, do you think, for people to be somewhat skeptical of the big things that elon musk promises, especially as someone who has worked with him in the very early days i think these innovations have to come together. We as an industry really have to bring it all home. Whether it takes three years or five or eight. I think as elon said in his talk yesterday, manufacturing is by far the hardest part so its one thing to show a prototype. I think when we start to see deliveries of these innovations and production thats when we know we have got something so i think the focus has to not just be on cost but on actually getting it into production i think the things well see first will be that new cell design and that cell to Vehicle Integration that they showed as were talking, gene, theres a couple different headlines on tesla the first one that crossed was about a report of a lawsuit against some of the tariffs that the u. S. Has applied to china. For that were going to turn to phil lebeau. Phil carl, this is the lawsuit right here filed in the International Court of trade and basically what tesla is saying that the tariff that is in place on imported goods from china, which would, in fact, apply to a tesla vehicle built in china imported to the u. S. If that were to ever happen they are saying that that tariff should be invalidated thats the gist of the lawsuit here but we should point out, carl, right now tesla does not import vehicles from china. So it raises the question is this now in the offing because you wouldnt file a lawsuit if you didnt have plans to be importing vehicles from china. And as it is right now, theyre ramping up their production at the plant in shanghai to supply the china market theres enough demand right there for that but this lawsuit brings up the question, do theyed a some point plan to import vehicles from china here to the United States . Right although chinese Manufacturing Base increasingly, phil, is being talked about as an export site, whether its to the u. S. Or germany or other countries, right . A possibility i mean, the idea is that the gig factory in berlin will take care of germany and also take of european vehicles and yesterday elon musk said during battery day you want to have a manufacturing plant theoretically in every plant, every continent, excuse me and that way you could supply that continent doesnt make a whole lot of sense in the auto business to not build where youre selling it becomes very expensive. Phil, well watch for that. And some of the other headlines that are crossing about tesla today. Obviously the shares have been under pressure all morning, Still Holding down about 8 . Gene, i was interested in your previous point and that is theres an old joke on wall street and that is you dont say when and what. You just say what. And let the time line settle out for itself i wonder if you think musk is coming around to that point of view given the scale that hes now operating with well, theyve announced very aggressive plans i think they said 100 big watthours by 2020 of their own cell production in addition to what theyre going to be buying. So i think theyre still aiming big. When you look at moving electric vehicles from 1 to 2 penetration to 20 penetration in the market, thats what you have to do we have to build a tremendous number of gig factories. Were expecting maybe 2 terra watthours by the end of the decade musk said 3 terra watthours by the end of the decade. So, the scale of transforming the transportation sector is big. You dont set Ambitious Goals the next few years youll be caught flat footed i know we didnt bring you on to talk about the lawsuit that phil just brought us, but do you have any thoughts on whether or not tesla is trying to get in front of some potential trade head winds i wouldnt know i would say that phil mentioned about manufacturing locally. You want to make the cars close to the customer as possible. You want to build the batteries as close to the car as possible because theyre such an expensive component and so heavy. So i think well see battery manufacturing around the world on every continent, everywhere where calls are sold, at least and i think thats what were seeing with the big berlin factory. With the texas factory and it wont just be tesla. It will be volkswagon, toyota. They both announced tremendous plans to scale up battery e manufacturing to meet their own demand. Gene, one of the most interesting things to me about battery day was the intention of laid out of bringing battery production inhouse and perhaps that vertical integration. Does that give tesla further leg up on other competition, auto makers that may not be thinking of producing evs in that way. It does tesla is marching steadily further and further to integrating every layer of the stack. So theyve done a tremendous job integrating the power train, which is the most efficient on the market today with the battery pack which is very well packaged and designed now to the cell and designing the cell themselves allows them, again, better integration to the pack and even into the chemistry, which i think thats really the next battleground is going to be the differentiator between different vehicles, different electric vehicles will be what is the chemistry that is in each one of those of course, thats where what we work on is pushing the limits of that chemistry to make much higher performing and lower cost electric vehicles. Gene, thanks for your insights we appreciate you being with us today and hope to talk to you soon. Thanks for having me on well, they got a nice bounce at the open. Dow is up 170 but we have gone into the red lost 3,300 on the s p but this is continued chop after that monday intraday low. Well watch it closely nasdaq down almost 1 . I see an unbelievable opportunity. I see bestinclass platforms and education. I see awardwinning service, and a trade desk full of experts, available to answer your toughest questions. And i see it with zero commissions on online trades. I like what youre seeing. Its beautiful, isnt it . Yeah. Td ameritrade now offers zero commissions on online trades. At cdw, we get theres thats why cdw experts, partner with apc by Schneider Electric to keep you up and running with a full range of Edge Computing solutions, including the new lithium ion smartups u. P. S. , with two times the battery life and cloud enabled remote monitoring. So you can deploy data center like resiliency, with a performance and certainty you expect, and the ongoing support you need. For i. T. Infrastructure and uptime, you need apc by Schneider Electric. An i. T. Orchestration by cdw. People who get it. Over the summer. They include drawing bright lines around categories of protected content. Tightening the definition of an information content provider creating clear carve outs for federal Law Enforcement and making it easier to file civil claims over cyber stalking and abuse. Now in a statement, barr said for too long section 230 has provided a shield for Online Platforms to operate with immunity and he called on congress to hold them accountable when they unlawfully sensor speech and knowingly facilitate egregious criminal activity online however, the Tech Companies say this is all over the white house what they see about bias against conservatives on social and the Internet Association defended the current law saying it is because of not in spite of section 230 that so many voices from across the political spectrum can voice their thoughts online. The reality is that the president cannot act on his own. He is going to need congress to get behind him if he wants to make good on any of his threats. Back over to you right theres that conservative angle, perhaps, but misinformation certainly bipartisan issue how likely are we do you think we are to see anything and how soon reporter yeah. I think thats a good point. You have seen bipartisan backlash against big tech, but the event thats happening at the white house today is a partisan affair. Its only the Republican Ags who are going to be there. Some of the legislation that youve already seen start to move on the hill have not had any democratic cosponsors. Thats a signal that even though both sides do agree there is a problem, they do not agree about how to address it. This is a tactic that the president is taking all on his own. Right those regulatory pressures certainly heating up elsewhere as well. Were expecting something from the doj regarding its google investigation any day now. Thank you so much for that and later today, do not miss salesforce ceo mark ben offon closing bell at 3 00 p. M. Eastern. Stay with us were back in just a minute. Give you my world how can i, when you wont take it from me you can go your own way go your own way your wireless. Your rules. Only with xfinity mobile. Shares of twitter at a twoyear high today not far from a fiveyear high as pivotal goes to buy and says the ship is moving in the right direction. Your Julia Boorstin has more hey, julia. Yes, thats right, carl those shares surging up over 8 on pivotal upgrading twitter shares with a price target of 59. 75 for that stock the stock hitting its highest level since 2018 today and on track for thirdstraight month of double digit gains. Pivotal saying it likes the potential upside from the olympics next year the hopes for direct response advertising revenue to kick in as well as the potential subscription business. Pivotal saying they expect Third Quarter earnings and forward commentary to act as catalyst for the stock. This comes as twitter along with facebook and youtube negotiated a deal with the World Federation of advertisers on harmful content including setting a common definition of hate speech and harmful material that should be removed when found. Twitter also committing by the end of this year creating a road map how to give advertisers more control other what their ads are next to. Those twitter shares up over 8 . Yeah, surging and interesting on the back of what we just heard from elon in terms of potential maybe farfetched regulation but still always that question about these social media stocks julia, thanks so much for that as we go to break, take a look at shares of Aurora Cannabis they are going up in smoke today or maybe down in smoke after the Company Reported a 2. 5 billion loss for its 2020 fiscal year. That stock down 90 over the last 12 months other pot stocks have also seen massive declines well keep an eye on that space. Squawk alley iba itws ckn o. United wholesale mortgage announcing it will go public after announcing it will merge with Gores Holding in what will be the biggest deal ever leslie picker has some of the Players Behind it. Hey, leslie. Thats right 16 billion makes this the largest spac deal ever in a year thats seen the largest number of spac deals come to market im joined by alec gores, chairman and ceo of gores group as well as the ceo of United Wholesale mortgage thank you both so much for joining us to talk about this transaction today. Matt, i want to start with you what were some of the incentives to go public this way . Were you considering other methods of going public before this opportunity came along . Yeah, absolutely. We realized going public was going to help put fuel on the fire of our business as weve been growing and really helped our Mortgage Broker clients grow and build their business we looked at ipo, at spac. Once i met the gores group, this is the right way to go if youre only going public once in your life, ride shotgun with the best in the business thats what it was were excited about it and think its a great opportunity we hope to really put fuel on the fire of our business looking at the stock price for Gores Holdings right now down about 2. 6 , which we dont often see when these types of deals are announced. What do you think the market doesnt understand about the announcement you made this morning . I think this is a great company. We have a great track record on the spacs. Weve done five spacs, 25 million. Weve been doing this for five years. Ive been involved with k companies for 30 years were excited about this transaction. In terms of what the market might not see here, the way that the transaction is structured is that you are providing 425 million of cash from Gores Holdings youre also doing a concurrent 500 Million Private Placement in exchange for about 6 of this company. What do you hope that capital will be used for as the Company Begins trading mat, you can go ahead and answer that. Yeah, well, the way well use the money is really helping educate consumers the best way to get a mortgage. Were the second largest Mortgage Company in the country and growing, and we plan to continue to grow and be the number one Mortgage Company in the country. Growth to helping Mortgage Brokers at mortgagebrokers. Com, helping know about Mortgage Brokers, and that lwill help us grow how to make the mortgage process faster, easier and cheaper thats how we got here and how were going to get there alec, in terms of the industry right now, your ceo, mark stone, said in a press release they evaluated a number to go spac this way. Why did you see this industry, this particular company, as the right partner for you especially with the ticket price of about 16 billion in terms of valuation . It starts with mat. When i first met mat, hes an amazing ceo, built an Amazing Company with great culture, a very fastgrowing company with lots of revenues were very, very impressed his ability of being a great ceo and the numbers weve seen to back all that got us excited this company has a lot of growth in the future as well. You said alec gores played a major role in your decision. How much ownership in the deal and walk us through how you thought about fees was it more or less than going the traditional ipo route . Was that a major factor in your decision no, not a factor at all first off the gores are the leaders in the spac world. If youre going public to cash out you have to figure out every dollar but were not going public to cash out were going to grow this for a long time. Im 40some years old and looking to grow it for a long time and build it. Im not looking at counting every dollar i need fuel on the fire, access that my biggest compel totitorsa we compete with, were the number two overall Mortgage Company. If youre looking to grow its different than looking to cash out. I have no interest in cashing out. Im looking to grow going forward. Alec, youve been in this spac game for quite a long time, your fifth vehicle that you have pursued a reverse mortgage, of sorts. What do you make of 2020 which has been seen largely the year of spacs people say this is evidence of a bubble or too much speculation in the market. As someone who has seen the evolution of spac as a vehicle what do you make of all the activity youre seeing now activities have actually been good for us because it made people aware what the spac is. We did our first spac five years ago. We cracked the code in doing it the proper way, and other people are seeing it and doing it which is good for everyone what i see is the spacs are here to stay as long as youre buying highquality companies that have a lot of growth, youre doing your Due Diligence and doing it the correct we these spacs will be around for a long time. Mat, you just said that you were looking to grow and retain majority ownership im wondering why not a public fundraise. Doesnt staying in the private markets give this growth at all cost strategy a better chance, easier for you to accomplish no, i dont think so. I think its all about we have a great team of people around us and having access to resources from capital to many other things i think is really paramount. Weve grown this business to where were going to do almost 200 billion of mortgage this year thats a huge amount of volume, a huge amount of people that we can help from a consumer perspective. And so to take it to the next level we think this is the right step in the trajectory of our company and the key to taking it to the next level as we take a lot of market share in the refi and purchase market which is uw shines alec, whats the next step for you . Do you see the market for making these acquisitions via spac becoming increasingly crowded because of the popularity of that model this year does that make deal making more challenging in this spac model youve really been one of the pioneers over the last few years. Yes, i think competition will continue again, as long as youre doing highquality companies and youre looking at it like we are, the success will continue we also will continue to evolve as the market evolves with the market and, look, we literally have seen a hundred deals this year that came through our process, and we picked the best one with uwm here great alec gores as well as mat ishbia United Wholesale mortgage ceo. That 16 billion transaction carl, back over to you thank you leslie, thanks for bringing that to us were watching peloton today dipped yesterday but popping this morning after some clearing up of concerns over this new competition from amazon. So the controversy began when this Fitness Company echelon issued a press release on tuesday announcing its new prime bike calling it amazons firstever connected fitness product claiming it was developed in collaboration with the company. Amazon later denied any involvement in that product and reportedly told echelon to stop selling the bike and change the branding as of today the product appears to have been pulled from amazons website listed as currently unavailable. We had a brief discussion about it yesterday in that the price at 499 would have undercut a peloton by about twothirds, but clearly peloton responding to this continued, evolving story, the way products are marketed and positioned on amazon in this case apparently with too much zeal from echelon yeah, and the fact that so many folks bought into this didnt question that amazon was getted into connected fitness says something about the strength or at least the perceived strength of that amazon prime fly wheel that could also just take out an established competitor, established company in the space like peloton apple going into the space as well, carl it will be a busy one. I still wouldnt count amazon out in the future. Probably not a safe bet were close to session lows here, but obviously nowhere near yesterdays intraday low well keep an eye on the indices as the dow was up 170. Currently down 130 and then tesla remains a story was down 8 . Now down 9 . Im sure cramer will have some thoughts on the evolution of that story when we get to the half at headquarters right now. Carl, thanks so much welcome to the halftime report. Im scott wapner the true state of stocks and whether tech is still in danger of a more dramatic pullback. We will debate with our Investment Committee and joining me for the hour joe terranova, stephanie link, kerry firestone, Cnbcs Jim Cramer is with us as well, the host of mad money. To the wall, the s p nasdaq at risk for being down for the fifth time in six days tech is selling off again. Dow down 140 is this a sign, do you think