S p slightly in the red, nasdaq off about 30. I want to start with at t. Inseem like the numbers came better than estimated because more people are buying prepaid plans through at t. They are playing paying full price for smartphones on the plus side. There are concerns about the profit outlook at at t down the road. We are seeing the shares lower today. We got some earnings news from intuitive surgical. A very rocky road for that stock recently and the company letting its forecast for procedure volume. The ceo making some comments about margins that are of concern to investors. We are watching netflix today, relateduse of netflix news, but amazon has signed a deal with hbo. What thisoncern for might mean for netflix. Thank you very much. Time for the big story. Facebook and apple both report after the bell. You have facebook, which is on an acquisition spree. The Company Bought instagram for 1 billion. Its most recent purchase for 2 billion. Apple has been in a bit of an innovation slump. Tim cook said consumers would see new products delivered by the end of 20 thing. End of 2013. E have not seen anything yet that is not to say that apple has not been busy. Us, johnson is here with jonathan galler, and brian marshall. Gentlemen, welcome. Someve been looking for kind of big product that would incentivize people to go out and buy. In the absence of that, what else to investors need to watch . I do not want to criticize the analysts. Their expectations are for no avenue no Revenue Growth for this company. The iphone tells the story. The slowdown was adding geographies and customers have about really adding geographies. You saw growth upwards of 50 on a year yearoveryear basis. Last year, it was only seven percent. The addition of china mobile might help things a lot. The concern has been that the products are too expensive for the chinese consumer, right . If you look at what the market likes to spend money on, i do not think the product itself is too expensive. A larger phone would be a big hit in that market. Ask because of competition from the likes of samsung . He do not need to go out and buy a tablet. This money on of r d, do you think it will pay off . Later this year. If our numbers prove accurate this quarter in march, thisll be the First Quarter in 40 four quarters that apple has declined revenue yearoveryear. Put that into perspective, that is 11 years. The last time they did that, they were only doing 1. 5 lien dollars of quarterly revenue. 1. 5 billion of quarterly revenue. Year is half of the going to be pretty powerful with the iphone 6. That will be the mother load of all apple upgrade cycles. Nearterm, i think apple gets a pass. Innovations, when they come up with new things, the bar keeps getting higher because the revenues are getting so much bigger. Add an incremental 2 billion would be amazing. When they added the ipad, which is an incredibly successful was a substantial part of revenues. It would not be so if a watch or a tv the hurdle just keeps getting higher. 170 billion dollar company, there is only so much room a company can grow. Comparing apple to an oil company in terms of the enormity. It will be slower and it is more of a value stock. If they can add great new products. Who could imagine that the company who created Something Like an iphone would come up with the ipad . What have you done for me lately, right . What we are hearing from apple employees, it is hard to get projects greenlighted right now. If you could get steve jobs to commit, it would be great. Is that a management problem . It is a lot different than what we saw in the past. They have gotten off the innovation cycle. Every three years, they are putting out a revolutionary new product. Later, 20 2013, we did not get anything. We are waiting for the i watch, some new streaming tv device. Either one of those products will not move the needle. So many categories apple can get into and hit a home run and feel confident about it. They will not get into the car business. The watch and the tv is a great hobby or third leg. It will not be a game changer. I also want to get to facebook. Has surprised so many people in the Tech Community with its ability to turn itself into a revenuegenerating machine. Continueeally going to at the same kind of pattern customer kind of pattern . I am negative on facebook and negative on twitter. Think people are that personal about sharing anymore and people are getting tired of it. I see twitter as more of a company that cannot figure out what they are and what they want to be. Because is interesting i do feel the cool factor is gone and there is only so much money facebook has to go and buy another whatsapp. This is crazy. It almost feels like monopoly money. Mark zuckerberg does not really know, he has been a billionaire since he was in his 20s, so why not . What is 19 billion . He is paying for these things largely in stock. It was still 400 million in cash. A lot of cash, but the rest in stock. Instagram, the final deal is under a billion dollars because the stock declined. It was a brilliant purchase in hindsight. Facebook, i love paring facebook with apple because you have seen facebook is an amazing thing. When they went public with no revenues for mobile, and now they will be doing over a billion dollars a quarter in mobile, it is incredible. It shows you the beauty of the public markets, right . How wall street can help a company because he can discipline facebook to start making money. Perhaps. They were not doing enough on the mobile lap. Mobile app. They had a come to jesus moment. I do not know if wall street propelled them to do that or not. When you look at the numbers, the increase in revenue per user. Not only do they add revenue, it increased the amount of revenue per user. They were able to get more money out of everybodys pockets. Abouteo, they talked video advertising and they want to command a pretty high rate. Is that going to be a model that can be successful . It goes handinhand with instagram. It is very native for that type of user. For facebook on the web, i think that is just annoying. I do not mind it. I cannot get into it. We will leave it there. I know you will be sticking with us because we have those earnings coming out. Liu is going to sit down with Warren Buffett. It is next. Amazon prime subscribers can now binge watch episodes. The Company Announced it has reached an exclusive deal with hbo to stream select tv shows. German me now is alex and jon erlichman. What is this going to mean . Think this is an interesting towards netflix. The folks at hbo would like to position this as a new version of what they have always done. Take previous seasons of their content and find new homes for it and get paid for it. They have done it with channels like tbs and a any, but, on come on. E, but, o it means something. This is old material. Is it really going to be that successful . You could ask the same question of netflix a few years ago. That was old material, too. Punch is this to the paytv operators . Before you could not get any hbo content unless you are a cable subscriber. This is the first time that hbo has gotten out of that box. We will not give you the new stuff. This is such tricky waters. Hbo gets paid so much money by the Cable Operators to stay in that world so that they could say to the cable customer, pay little bit more and you get hbo. It is almost like they are paying hbo to stay in that world wall netflix is available outside of that world. If you are hbo, you know so many people want to watch your stuff. That is why they launched hbo go. The picture into and says, what if we take some of the older stuff . How can you say no to that . Hbo that thet by quality of hbo go is not going to decrease in the minds of customers. They feel enough people want new hbo content that this can be an incremental step. Only to the customer is willing to cancel cable to watch three seasons old material. Hbo thinks not many and they are probably right. Comcast potentially streaming their content. Dish. Into a scenario and stream bundles of online programming and put it online. We reported yesterday that they are looking at summer release for this bundle of packaging, which would include espn. They already struck a deal with disney to include espn. Now they are talking to cbs, time warner, trying to get their content into this bundle with a target of late summer to offer some product for about 30 a month. Do you think it will succeed . Is more willing than most to try new stuff. The truth is we spend a lot of time this week talking about aer eo. A hypothetical situation that you have amazon video, you have netflix, and you ereo, do you really need to be paying dish . Dish, it asst directv, at t. Everybody is thinking about this stuff. A lot of these Companies Used to be one in the same. Time warner used to be the same company as Time Warner Cable. The content and distribution were one. Now that time warner is a Different Company than Time Warner Cable and there has been a bifurcation between content and distributor a few years ago, when they were one company, it they would have been unlikely to do a deal like the amazon deal where they are prodding people away toward getting paytv. My head hurt i just want to watch tv. It is changing so fast. Thank you so much for breaking it down. It is not just hbo. You can watch bloomberg tv on amazon fire. President obama just kicked off a threeday visit to japan and a worldfamous sushi restaurant. President obama is in japan, the first stop of an eightday trip designed to underscore americas commitment to the asiapacific region. Megan hughes joins me from washington with more on the travels. The trip began with a worldclass sushi. California rolls, i do not think that was on the menu. Ets step back a little bit we are talking about a four country tour. He will be back in the united 29. Es on april he met with the Prime Minister last night at this very fancy tokyo sushi restaurant. It charges 300 a meal. Tomorrow, he will be visiting the imperial palace. Then he will have a more formal meeting and a News Conference with abe followed by a state dinner in the evening. The goals, a lot about reassuring our allies. Pact. Cific nations trade the Auto Industry in the United States this has been going on for years. There is some optimism that it will lead to some kind of progress, at least regaining momentum. We will be on the lookout for some kind of announcement of progress. The second goal for the white house is to reassure japan and south korea that the United States will back their security interests, particularly in territory battles with china. Japan is the recognized administrator of the islands in question. He said that to a japanese newspaper. You can expect them to reaffirm that commitment in his conversations. Are those issues going to be front and center . It is a very valid question. Especially with the system the situation in eastern ukraine. The president has threatened more sanctions against russia. And then look at the countries he is going to. South korea, still dealing with the fallout from that ferry tragedy. The president is going to have multiple things on her plate. Malaysia, authorities faced a lot of criticism for their handling of the disappearance of malaysia air flight 370. That could be a trickier situation. A lot of opportunity to move the story line away from what the white house is trying to accomplish. Robert kennedy juniors clean water push. He is here to tell us why he is partnering with a tech company to combat environmental contamination across the globe. Welcome back. In honor of earth day, we decided to look at the world water problem. Not a whole lot of this is actually clean. Robert kennedy junior is working hard to change this. Setoins me right now on along with the founder and ceo. Robert, i know you have had a long career in environmentalism. What drew you specifically to this company and to water . Sued the my groups California Department of transportation a few years ago there were thousands of storm drains along the california coast that were. Ischarging toxic water kids were getting sick. We sued them. We won the suit, a multibilliondollar judgment. The settlement required us to look at technologies that would allow the state to remove the toxics from their beaches. We surveyed a number of technologies that we came across aptbtech. It is a Sponge Technology that you put into the pipe. Glenn has a demonstration for us. This is a sponge that soaks up all of the bad stuff in the water . This is a smart sponge. We mold it and into can mold it into any shape or size. It is a simple test tube demonstration. I will take some new york city water and some motor oil and diesel fuel and contaminated so that you could see what would be happening running off of our streets. Facility an industrial , anywhere where there is contaminated water. The idea is to clean that water well enough where you can swim in it, bathe in it. This is a test tube demonstration. It is a simple demonstration where you can see the oil and water going into that smart sponge and the clean water passing through. What is absorbed is permanently bound. You cannot squeeze it back out. It can go to a wastetoenergy facility and burned as a fuel. You can use the power at the end of it. The residue stayed at the top. Is the final frontier for clean water because when we passed the clean water act of 1972, it made all pollution illegal. Its energies on industrial discharges for the first 30 years. The biggest source of pollution is storm water discharges. People are looking to these kinds of solutions. It is a fascinating solution and we appreciate you bringing it here. Thank you. How much would you pay to have lunch with Warren Buffett . Every year, we get an answer. Anyone can log on to ebay to bid for a meal with mr. Buffett. This year, the winner paid more than a Million Dollars. The proceeds goes to the foundation. The lunch was held here in new york city steakhouse. That is where we find our very own betty liu who is with mr. Buffett. Trish, thank you. Great to see you. How did lunch go . We had a good time for 2. 5 hours and we were going strong at the end. What did you talk about . These were people with diverse backgrounds. We went around the table and brought up all types of subjects and i asked them about themselves. During the lunch, a big piece of news came out. Cocacola, Shareholders Approve the compensation plan, which is something David Winters has wanted you to oppose. Why did you not vote on this . I abstained. I voted enthusiastically for the directors and i am enthusiastic about the ceo. Plan was excessive in that it talked about 500 million shares and using them up over four years. It is excessive, so i abstained. I could never vote against cocacola. You are a shareholder. That is the way i feel about the people. Did you let your views be known . Yes. I told him ahead of time. Did you tell him that you opposed this . Reaction . Is we had a good conversation. We are good friends and we will always be good friends. He can run any company that we owned stock in. Does that change your view on cocacola . No. I love the company. I think the plan is excessive, but i think it is a Great Company and has a great future. David winters wanted you to speak publicly ahead of the vote so that you could speak to shareholders. Why didnt you . I was not interested in taking up that campaign. I do not disagree with him. He has been a shareholder for a long time. He feels it is a plan that is excessive. I would not have waged a campaign against them. Thought he thought there was a conflict there because you had criticized other companies. I have not named companies. I have written about compensation generally, extensively over 30 or so years. I have never said i am against options. And i voted for cocacola plans in the past. I thought it was excessive. But David Winters is joining a group of people David Winters is joining a group of people who have become more public and active. Bill ackman, it David Einhorn, is that a good trend . I do not see anything wrong with speaking out. Do not think i would put David Winters in the category with activist. He is a longtime shareholder of cocacola and he has a big position and he does not like the plan and he decided to go public with that fact. It is perfectly proper to do. Think he was right in terms of the plan being excessive. I do not agree with some of the numbers. Another major shareholder rings another major shareholdings of yours is heinz. They have closed down plans. Pretty effective results. We own have to stop. The warrants are pretty small relatively. It is the Stock Ownership that we have had his big. Would you increase your stake in the company . We do not have the opportunity to. That is held privately. Her sure has roughly half Berkshire Hathaway has roughly half. There has been no trading. There will not be any trading in heinz for a long time. Dont they expire in 2018 . They do not cost us anything. They will be exercised for sure, believe me. Are you any closer to an acquisition . We are working on some things. You said that last time. We may be working on more things now. They are not very huge. There is enough going on that i would hope one or two would materialize. David einhorn said has said that tech stocks are in a bubble. Is that a warning to you . Very few tech stocks i would want to buy at the prices they sell for, but it is not remotely like the bubble that existed 15 years ago. Craziness oreing anything of the sort. We are certainly seeing some companies go public at very high valuations and some private transactions at some pretty fancy prices, but i do not know those companies well. We are not there, but i do not find myself tempted to buy anything that is coming out. You have been very vocal about the housing recovery and you have been optimistic, but when you look at fannie and freddie, do you think they should be liquidated . Government has to play a part in housing and i think the 30 year fixedrate mortgages is very good for the American Public and i think you will need government participation in some way to bring the cost down. The American Public will do way better with some kind of a government guaranteed instrument in the picture. Whether you start an entirely , perhaps with some private participation, maybe having the private market set the price to some degree and have the government be the insurer of last resort. Maybe the private sector would take five percent of the risk. Ask do you think they have do you think they have aided in the recovery . Think it has anything to do with the housing recovery. It was built into very low levels of Housing Starts following the crash in 2008. Household formation eventually demands more housing. Is there a role for Berkshire Hathaway . Role forot see any Berkshire Hathaway in fannie or freddie. Or could be summoned some housing arrangement that gets worked out in the future. There could be some housing arrangement that gets worked out in the future. Why was it so hard to find . They must be in hibernation. I put out an ad in the annual report and i did not hear from anybody that had a substantial short position. We wanted a real bear. That is how you separate the real ones from the ones that would just like to have a seat at the meeting. You wanted somebody who actually had a position. Did you yourself go out to look for a bear . I just wrote that in the andover port. I did not get a i just wrote that in the annual report. Does that concern you that shareholders will not get the full picture . We will have three journalists and three analysts. Among those six, they will get a chance to ask 36 questions. They can ask anything they want to ask. I hope we get questions that probe at our weak points. Ofby the way, in terms acquisitions, i heard a rumor that you might be interested in buying the chicago cubs. Is that true . That is the only rumor i will deny. Zero. Would you get into biting uying into b offered sports teams for years. I have no interest. Why not . I do not live in a majorleague account. I owned a quarter of the minor league team. You sold it two years ago. I owned it for 20 years. There is no reason to do it. I would get no big ego kick out of it. There is no reason. Make is no reason to money, no reason for ego. Will just sit and eat hotdogs it was great to see you, thank you so much. Buffett, the Berkshire Hathaway ceo. Thank you so much, that he. Betty the Biggest Discount broker in the u. S. Posting record numbers this quarter. The man in charge will unveil the key drivers, next. Hello, everyone. The Retail Investors who were accident were active to start 2014. Td ameritrade reported a 35 jump. Joining me to discuss and break all of these numbers down, we have president and ceo Fredric Tomczyk always great to see you. Congrats on these numbers. We are looking at client trading which climbed to record levels. What was the main driver . Retail investor has been reengaging now for about six months and we have seen that through november, december, january, february. It was still very strong in march. We have seen record trades per day of 492,000. The highest activity rate we have seen in a decade. Does this suggest that the momandpop investor is back . It is very broadbased. Momandpop coming back. 30 more accounts trading during the quarter. Index istor movement at a very high level in terms of bullishness. The Retail Investor has been reengaged. About michaelyou lewiss new book. Your stock took a hit, down about 10 , after the book was released. A lot of concerns that your average momandpop Retail Investor is very disenfranchised. What is your reaction . I read his book and i am not sure i buy his thesis, but it is a very good story. I will tell you that we listen to our clients very carefully and we have had 70 phone calls and 120 emails out of our 6 million clients on this issue. This is a wall street issue, not a main street issue. How do you view highfrequency trading . We look at what has happened with the markets in the last decade or so, whether it is the electronic vacation of the is no questione the Retail Investor is getting the better deal today with lower transaction costs and quicker response time. This is not an issue the Retail Investor is engaged in. Highfrequency trading, you do not see it as having an effect . Not having an effect on than average on the average Retail Investor. It is not to say everything is perfect. There are some aspects to highfrequency trading that we think should be addressed. Is all of those things ought to be think the fcc should let that, but highfrequency trading in general has been good for the Retail Investor. Let me ask you about how people are trading right now. Mobile accounted for 13 . People are trading off their cell phones . Their cell phones and their tablets. This trend has been moving in this direction at quite a clip. Look at the number of people using mobile devices on our platform, that is about 300,000, up 50 year over year. Let me ask you how much it cost to trade with tedium there to. Ameritrade. How do you keep people coming back . We have a robust front End Technology platform and we deliver a lot of content and education, lots of tools and information. When you are getting down to one or two dollars on a trade, it is not that important in terms of relative to the robustness of the platform. We think we have the best one. We will be back with the close of trading and your top 10 stocks of the day. We are heading into the close. Number 10 thomas facebook, down two percent. Number 10, facebook, down two percent. Keep it right here for the very latest when earnings come out after the bout. Number nine is netflix, down four percent. An exclusive deal with amazon prime and hbo. They are expanding their service to france. This holster or eight, this the ceo says he expect to expand to at least two more European Countries by this year. What is taking him so long . It is so frustrating. Annoying, it has been years. Number eight is amgen. Firstquarter sales came in lower than expected. Coming up on number seven is at t, down three percent, investors are shying away as customers are opting to pay full price for smartphones. Number six is amazon, down one percent. To its be adding hbo Online Streaming Service amazon prime. I know i heard it from jon erlichman. I just set it 15 seconds ago. I just said it 15 seconds ago. I am from maryland and i have never seen the wire. Previous seasons will arrive three years after airing. None of the good ones. Onese old ones and the bad. Number five, starbucks is up about one percent and soda stream is up over 10 . This has been talked about before, but this is the latest report. Moving on to number four, it is boeing. Firstquarter profits beat estimates. Totaling 19 billion. Number three is a elizabeth almostalmost up 12. 5 . It is said to be considering a bid. Rivals. To buy more number two is yum brands. Firstquarter profits that rose 18 . Sales in china, that is what people have been watching, rebounded. It expects to open 700 new restaurants in asia. Ok, number one stock of the day. We are talking about apple, down one percent. Seen a five percent decrease on that a slowdown in the smart phone and tablet market. Stay with street smart for all of apples earnings coming up in a few minutes. Here we are at the close of trading. A market is ending the day lower. We got some housing news that was not the best. You have all of this earnings news coming our way in terms of apple and facebook. We want to get some additional context with julie. Part of it has to do with earnings because Telecoms Services stocks did the worst today because of at t. We also had technology as a big weight. , notd six days of gains unusual for us to have a positive. A pause. That is the longest streak since last september. Good days and down days. Energy stocks did the best today. Cory johnson is standing by for those facebook earnings. Matt, you have the honors. Ask i want to talk about airlines. The biggest nonunion airliner, but jetblue pilots have voted to join the airline association. Collective bargaining may drive up costs as jetblue negotiate pay rates and work rules. Investors do not like the news. Gainse shares erased following the announcement yesterday. The question is how far up it will drive costs. Short term, it is really not an issue. It is more cultural than it is with having to do with costs. The pilots already make more than american. They get 189 an hour. I do not know exactly what was on the union agreement. We do want to get to the facebook numbers. A beat on the earnings per share. . 34. The analysts were wrong again on the guessing that it would be . 24. The cfo is going to step down later in the year. You see that after an ipo, someone gets the company away. Hape and then walks as long as he keeps all of his options. Indeed. Revenue, 2. 5 billion for the quarter. I will pour through the numbers some more. There has been a lot of concern. This is a company that has become somewhat staid and older people are using it and the kids are flocking to other things. This is a global company, one point two 6 billion users and a lot of them are broad. 1. 26 billion users and a lot of them are abroad. Facebook is huge around the world. Growth is being driven by the continued growth of smart phones around the world. There challenges to monetize that. To monetize instagram. Well. Tsapp as that is the other thing, it looks like a Holdings Company now. Whatsapp is an interesting acquisition. You can no longer message through the facebook application. Messaging as a separate feature. So annoying, by the way. I still tell you inside the facebook app, you have two messages. If you push the button, you have to go to the app. Because it isiant forcing you to change your behavior. I use something else. I just go to text messages. They are looking ahead five years and realizing they need to separate peoples usage from just the facebook application. Messaging is huge. Whatsapp is the global platform. Mobile really smacked him in the face. They realize they had to have a very different approach. Very silo different kinds of companies within the overall facebook. If you have a company that is so revenue. More that is fantastic growth on a very large scale. 70 of their users accessing facebook via mobile applications. That is just getting started. Quite a growth story. We are waiting on apples numbers. They will be delivered quite shortly. Do we want to move on to some other stories . Want to get to one. We are going to take a break, apparently. You have a story about the irs. This is unbelievable. It is an unbelievable story. I do not want to skip it. You get the irs story next. Ipo is such a big deal. We will be discussing it with the roundtable. We are back with the roundup. Matt and julie here. We are anticipating those apple numbers. Lets move on to the other stories were covering. David einhorn is betting against the cool kids. Greenlight capital says it is shorting a group of tax cops of tech stocks. S itfirm says the companie is betting against may fall by 90 . That light sided tech ipos did little more than attract the right venture capital. I think he makes some very interesting points. We did a lot of fundamental work. , this letter,me that he was just taking small positions without doing all of that fundamental work that we would normally expect of David Einhorn. He points out that it is not a good idea, but he is doing it anyway. I do not think we have a lot of Tech Companies that trade at insane valuations. I think that is an insane statement, are you kidding me . Apple, qualcomm, these are trading at below 20 times. Not it is not widespread across technology stocks. Innot the same way it was 1999. He also points out that he did not want to take too big of a risk in any particular name. That is why he is doing this. A lot of this seems to be on the private side. Is whatsapp worth 19 million . Wait a second. Software is ag, service, electric cars. Tesla is another one. Being seen ononly the private side, but lets not forget these are Public Companies buying them. Facebook is using stock. That starts to make you a little bit nervous. That is right. Like aol time warner. The argument makes sense when you read it, but it is not as bad as it was in 1999. You will not see the crazy rise that you will see and and what did not make sense to me, 90 drop . Do you really expect to see a 90 drop question mark i could see a correction 90 drop . I could see a correction. The way that ipos are performing has changed a lot in the last two or three months. These names that have jumped 30 or 40 in the days after the ipo. Not the big ones. You are seeing a lot of that the company that sold three printers, a company that has a , theyillion market cap sold three printers in the quarter after they went but after they went public. But we have never heard of them. The market bidding is up like crazy. There are not very many of those. Are still trading below 20 times earnings and that is not outrageous. There may be pockets. We will revert to the mean at some point. Julie is bursting at the seams. To followst trying directions. We only have a minute. In his First Television nothingw, pimco ceo had but praise for bill gross. He is one of go worlds best investors. I had the privilege of watching him in action. Someone who is able to differentiate signals from noise and someone who is very committed to deliver value. Bill is part of a talent pool at pimco. At thereus bench is an enormous bench at pimco and that is key for the firm going forward. The resignation was a mystery to him and he may have been premature. Tospent he left pimco spend more time with his daughter. That was a central reason for his exit. These guys were working crazy hours. His daughter presented him with a list of 22 moments in her life that he had missed. Why wont you brush your teeth . His daughter came up with a list of 22 things that he missed. It was heart wrenching because we have been there. I think it spoke to a lot of people, especially in our industry. That is exactly why i got out. We always have this debate about women trying to balance everything, but men have this issue, too. It is a challenge for everyone. Makes me want to go home right now. And i do not have any kids. Are you going to do the story . Politicians are hot for the company that makes the spicy sauce. It has received more than two dozen invitations from officials to relocate to their district. The reason it is so interesting is because where they already are, there have been so many complaints that there was congressional action against them. It is making me cry, i cant breathe. Can you imagine working in the plant . I cannot imagine living around it. I have driven through the garlic production spot of california. Apparently, some congressmen are like, i dont care, i love the smell. I want that factory. Sell 60 million worth a year. This is a huge product. There is a fan base around this sauce. Foodie. S a for normal people, i do not know. It is cheap sauce. What does that mean normal people . The irs story we promised you. Still owe the irs taxes . If you are an employee, you may be getting rewarded for it. Million in bonuses between october 2010 and december 2012 went to employees with disciplinary issues that includes a Million Dollars that went to more than 1100 employees who still owed back taxes. How is that fair . 1. 8 million he went to employees who got in trouble for getting high on drugs, who abused the Company Credit card, abusing company property. How do you get bonuses . It is a terrible headline and it looks bad. Brokenere no regulations. How do you like that . Ryan blair wants to make sure that he does not get audited brian blair wants to make sure that he does not it audited. Looks i would imagine i would imagine they have some interesting returns. Know. Ont it is a fun story because Everybody Loves to hate the irs for obvious reasons. Thank you for being here. I cannot wait for those Apple Earnings. Alibaba is getting set for its big debut and we will tell you why this ipo could be bigger than facebook. Apple earnings are just around the corner. Back with more street smart after this. This week, Chinese Internet Company alibaba will file for an ipo. Potentially the biggest Public Offering since facebooks debut in 2012. It is critical to tech giant yahoo . Alibaba has a lot of users, 5 million at last count. The ipo is worth paying attention to. At a market that is a wash in tech ipos, this one really is different. The debut has a lot of significance. Forill be a critical test the chinese economy, the supremacy of American Capital markets, and Investor Sentiment amid another potential tech bust or boom. It is my new usa today column. Here with additional perspective, we have cory johnson. There is a lot going on. One of the most important things is we have been so concerned about this potential bubble. The David Einhorn news today. Could this be a barometer of some sort or is this one different . It is actually profitable. This is a company that is actually turning a profit. Time. Could come any is a deal like another. Talk about bigger than facebook, this could be the biggest tech offering ever. The biggest ever right now is visa. People say they will sell about 12 stake in the ipo. , itn the recent estimates could look to be about 20 billion. I have seen numbers upwards of 200. It just depends on where you are coming out. One of the trends we have these numberss get out about how big the deal will go be will be. Ive never groupon i remember groupon. A lot of accounting issues that came to the floor throughout the filing process. It will not be able to use the new jobs act. That is a way that a lot of companies have filed very quietly until 21 days before the offering. Pretty critical for china right now. It is a testament to the ability to have real entrepreneurship in china. Usa,hink silicon valley, but this could start to change that thought process. Companystarted this in his apartment and look at what it has grown into. The sheer force of his will and personality helping to bring this along. This could mean a lot for entrepreneurship in china. Look at the pipeline of Companies Going public right now. It is majority chinese internet companies. You have a Chinese Company looking to go mobile, we have four Chinese Companies already go public this year. We are seeing this russia Chinese Companies. Managers go toey learn about these companies, in theink, they follow same way. Thank you for being here. You can read more about ali baba in my usa today column. That is online, check it out. We are talking about Apple Earnings, next. We have some breaking news. Seccomm is getting an notice on china bribery allegations. Cory johnson and brian blair still on set with me. . Hat is your initial reaction notice is a big deal. Charges may be coming. We also know there has been thatleblowers allegations the Company Investigated itself and found nothing to it. This may be that same thing. It is a terrible headline, bribery allegations something you never want to see. We do have Apple Earnings crossing right now. Apple earnings Second Quarter 1162. In i know what you are going to say. A great big quarter. I thought you were going to tell me how wrong the analysts were. Big beat i want to see the rest of the numbers. Better on the bottom line. The big change is the Buyback Program will go from 60 billion to 90 billion. s voice getting listen to. Paulist joining us from the west coast. Paul is joining us from the west coach. He is a lubricant shooting editor. Contribut bloomberg ing editor. 10 billion short of what carl icahn was asking for. Your reaction . They are pushing every button they can. This is Financial Engineering and it does not have a lot to do with the core business. This is what you do when you do not have new products to talk about. I think the real question, what are the numbers going to look like . The margins were higher than people were expecting. The bottom line looks a little better. This is going to be significant. They are reporting a gross margin of 39. 3 . 18 months ago, apple started to see a decline. The company said all of their new products were at the top of the cost curve. Now they are seeing the benefits of a lot of their products they are cheaper to build. Take a look at the iphone, the components, the cost of building the ipad, those are a lot cheaper. This is a big surprise. Towardsgoes a long way management credibility. They said this was going to happen, dont worry. That is right. Philosophical choice by apple. They want to be where the profits are. This is a tim cook kind of business. These are the dials that tim cook likes to turn. He has 20 years of and proving margins. When he tells you he is going to do something on the margins front, that is what he has done for decades. This is a stock that has been largely ignored by investors for the last year and this is the kind of things that will help shift Investor Sentiment. It is going to be a question of what can the company do between the month of june in the month of november when they have their worldwide developer conference. What do we see in the fall with a large iphone 6 . What is this wearable that we all know is coming . Apple has an opportunity to shift Investor Sentiment and get the ball back into the name. A name and get people back into the name. We will wait and see until we see new products. It is going to be a key driver. The company has gotten to be so huge. Second quarter, 46 billion in revenue. When they launch the ipad, the company was doing 15 billion. Have we seen the actual unit numbers . I am looking for that right now. Funny that you should mention that. Billion ipads. Iphone is better than expected. A lot of people expected a number in the high 30s. The ipad is a bit lower. The street was closer to 20. This will be light for ipad, better for iphone. We kind of expected this this is much better on i found. These sales have been pretty much soft. On the ipad front, and nobody was expecting great things. It is still a miss. It will be a mixed read tomorrow. But her iphones, worse on the eye better iphones, respond the ipad side. We are ahead of a significant product cycle that will start in june. We could get a new payment platform announced. We will see new hardware on the mac side. Tomorrow, investors come back to apple starting tomorrow. The sales of the iphone were higher because the margins are so much higher for the overall business. It is mixed because the iphone 5c is a pretty cheap phone to build. They are the same parts for the iphone 4. I think it is a healthy mix. This is unbelievable, a 90 million buyback. It is a significant bump up i did not believe that carl icahn was going to have much of an impact. He was not the only one. He was the most vocal one and i will be interesting interested to hear his response. It is a massive amount. He is calling for 100 billion and he pretty much got it. He thought he was backing away from this. Though air, people need to be excited about the stock. Pocket have had this air of new products, one of the longest in recent history for the company. You had to do this kind of stuff and you can expect activist like carl icon carl icahn are emboldened. This is going to continue. Cook is willing to fold on these things. If you line up the key five things that investors care about, four of them are positive. The iphone is a positive. This buyback will be a significant positive. The gross margin story, i cannot emphasize how meaningful this is. , that is not acceptable to a lot of investors. Investors will ride this momentum tomorrow. I think this is going to mark a change. We will see a lot of positive commentary from analyst tomorrow. Villages its to to relative, 516 million iphones and 212 million ipads. Amazing. You have been positive on the despite theong chorus of naysayers. Do you feel somewhat vindicated . These iphone numbers are even better than i thought. I thought it was going to be a bit muted. The 5c has not sold that well in a lot of markets. Better and some of these new programs, where they are offering different types of rebates, it has worked. I was a little bit muted about the march quarter. Bullish on the rest of the year. I think that will be the right call going forward. Pretty good news out of apple. A big beat on the earnings front. Selling more iphones than people anticipated. Share buyback its to 90 billion. It is boosting its quarterly dividend. The stock is still halted right now, but we will be back as it opens, we will see how this fares in the afterhours market. Probably pretty well. We will see you right back here. Whats we are bringing you that breaking news on apple we are bringing you that breaking news on apple. A big earnings beat for apple and it is planning a 7for1 stock split. In 11. 62. Ings coming ipad sales did coming week, but the iphone sales came in much stronger than expected. Apple has done three other stock splits in its history in terms for1 and that happened back in 1987. Also in the year 2000 and in 2005. Cory johnson is here. Lets talk a little bit about why they might be incentivized to do this. I think it is because it will bring the tale Retail Investors back in. It will look a lot more palatable. You will have momandpop say hey, i can buy a 40 stock. I believe in this company and the longterm. You could have this as a member of the Dow Jones Industrial average. They might now look at this and say, we can bring apple. That may have been another factor in the decision. In spite of all of the uses of cash, all of the money they have spent already, the dividend is going up, they still at about 4 billion in cash this quarter. That gives them the confidence that they can put this cash to use. Lets take a look at the stock, it is up seven percent in afterhours. Significant move. Paul, i think i heard a wow from you. It looks like investors like what they are hearing right now. These are all the right financial things to do to convince investors it is worth hanging on. Right dialsl of the and buttons. The remarkable thing to me, i have never seen a company do so many of these things so aggressively in a single financial quarter. Every trick in the book to convince investors that this is worth hanging on. I agree and the timing is not an accident. Were about to see this massive worldwide developer conference, a huge product cycle going from june to november. If you want to be a negative nelly, you could say they were light on ipads. What is important, if you have five other things to point to that are collectively going to shift Investor Sentiment i cannot emphasize the importance of Gross Margins enough. At the end of the day, they need to have the products. They need to have the products to keep the consumer coming back. You can do as much Financial Engineering as you want and maybe it keeps the market happy temporarily, but you need to have a fundamental reason to be generating sales growth. Is this a distraction of sorts . In some ways, it is. This further emboldens institutional investors. I want the same sort of sugar rush i got in the current quarter. You can only shoot this wad so many times. What you need to do is wean people off this drug. Up launch products that open new markets and that has to happen this fall. Know, what i have said the last couple of months, we believe they are making around 50 Million Units of some type of a wearable. What it does, we do not know, but i believe we are on the cusp of seeing a brandnew platform. I think there is a new product cycle coming. The large green iphone sounds very simple. The large screen iphone sounds very simple. Be appleg to will take that head on. This is my longterm gripe. So much focus on the stock and not enough focus on the business. We see a company that has shown an increasing failure to innovate and introduce new products. People inside the company say they cannot get ideas approved. But you see the machinations of the financials of this company. You see them using their financials to make the stock work better. What does this product cycle look like . Tim cook has promised us all. On. Ow the pressure is he has bought himself some time. Numbers, which no one is focused on, they show some of the slowest growth i have ever seen. Out one of the areas they have missed. They have missed the change to streaming music. Itunes is kind of dead. It is like the ipod. We will take a quick break and we will be back right after this. Big beat for apple, investors like it. We are approaching 56 minutes past the hour and that means lumber television is on the markets. I am julie hyman. , sales andg out profits topped analyst estimates, that are iphone sales in terms of the number of units shipped, that fewer ipads. Moore capital going back to shareholders, 90 billion more capital going back to shareholders, 90 billion share buyback. Facebook beefing up its mobile presence. Its cfo is stepping down later this year. Lets talk about apple. I want to bring in brian blair. He has been talking a lot about technology and apple. Do you buy the stock after all of this . Absolutely. It is not just about the buyback and what happened with iphones, it is because we are on the cusp of what i think is going to be a significant product cycle that will start in june and carry throughout the fall. They have not introduced anything new in four years. There is a whole host of things that could come. I do believe they will refresh the mac hardware. We think they will make about 15 million this calendar year. We could also see a platform a new payment form. It will allow them to go head to head with samsung in the global marketplace where large screens are in hot demand. You see a capital return to shareholders. It seemed to be a small quarter. Look at all of the money you will be getting back on the face of it, that would not seem to signal a lot of confidence on the part of the company in that product cycle you are talking about. Were listening to our investment base. After resisting and resisting and resisting and saying stock splits are not a good idea. This is a company that has changed its mind many times. Steve jobs said we will not come out with a smaller ipad and it showed up years later. That is part of the game. There were a lot of investors that did want to see a buyback. We just got a tweet from one of them. It was carl icahn. I agree completely with apples increased buyback. We will be happy when we see new products. Least shocking tweet ever. A lot of the same investors have stepped away from the stock in the last 24 months. It was 18 months ago that it topped out. Investor sentiment has shifted away, it has been very negative on the name. It needs to see a good product cycle follow. The only their Gross Margins bounced. They already have high margins. But that was a big surprise. This is a move back toward the 40 range. You wonder what will happen with those new products. I agree. Thank you so much. We are talking apple. I am julie hyman. This is taking stock i am pimm fox. Todays theme is acceding estimates. Apple and facebook both exceed estimates for the earnings. Apple expands its Buyback Program to 90 billion. We have an earnings roundtable coming up on these tech giants. I will introduce you to the chief executive of irobot. The company is the maker of the roo