Transcripts For CNBC Squawk On The Street 20131104

Minutes. They are raising another 1 billion in capital which we dont want to get lost in the shuffle. 28. 7 conversion premium. A 6 cue ton. Thats pretty rich stuff for a company that many say, jim, didnt necessarily need to raise money or had plenty of cash, that cash being part of it. Any potential appeal that it might have had. As for the process itself, we all know it was a difficult one. I had pointed out many a times, the letter of intent that was signed by fairfax back in late september didnt obligate them to anything and financing a potential deal from them was going to be extraordinarily difficult as we reported right here at squawk on the street at 9 a share. They step up for 250 million of this convertible the company is issuing today. They are becoming the lead director, correct . Correct. Major turnover here. This seems to be one that every month is doing worse. So i know you said they dont need the capital but, to me, i look at it. They said they dont need the capital. When you have that spiral down, capital becomes king until you can come up with something. Every month, we sit here. We can talk about apples 5s and 5cs. Corporations are moving far away from this. Is there some intellectual property that would be interest of a private equity company. There were pieces that would be of interest but they were unable to cobble together any sort of deal. They have not pursued because they were unable to get the financing for a deal at that level. That became the broad number, 9 a share. We are going to be well below that as you see trading this morning. Your point is a good one. It brings to mind a jc penney which raised money when they didnt need to. As for this guy, chen, he is credited with having helped to turn around cy base from 2007 to 2009. That was a nice trade. And he is fairly well regarded. We will see what he can accomplish at this company. And thorsten hines, those of us who met him, he approached it with an elon. He was one of the nicest ceos i have ever met. The stock has reopened for trade. You can see down about 20 odd percent. Take a listen what Thorsten Heins said about the company. We have a vision for our future that spans the next 10, 20 years. We believe in the power of black berly 10 as a platform for mobile computing. I am thrilled to continue on that journey. Our own Leadership Team on behalf of our dedicated employees, they share my excitement. Interesting. That recently, they were still making a run at the device market, a consumer device. Remember that blackberry 10 was supposed to revolutionized. Left them with 1 billion worth of devices. The tsunamis that come out of nowhere. The tsunami hit this company and it just never recovered. Yeah. Interesting as well. There was that potential bid from the former founders. At some point, you have to say, it is time to go on. They took over that company in 1998 and helped to turn it around. That was a company that was left for dead. This company does feel left for dead. I know. I talked to someone who tried to put together a deal for this company. It is still kind of aghast that they didnt see there was something worthwhile there. This individual was a wealthy individual. There is so much intellectual property that if you think motorola had better intellectual property for google, in the end, the market spoke. Is there anyone on this planet or alpha century that didnt have a hard look at this. Vulcans . Everybody that wanted to look looked. There were plenty of visitors to the data room. Why not take a look . It doesnt cost much of anything to do that. They did not follow through with any bids and, again, the financing for that fairfax thing, which was only a letter of intent, which we pointed out on day one, never came together. Looks like twitter is raising its ipo. It gets higher and higher. It is not a surprise they would start lower and move up. Thats the way you want to do it incompete instead of facebook. I said, over 20 billion and then you get into that situation where you might be surprised to the down side. We all use twitter. We all think it is important. There are questions. There are questions and at the same time, the public loves the product. You can buy. We saw that with the container store. They love the container store. They can buy a lot of good articles by where the bubble actually is, which is an ipo. You want to be very careful. There isnt any price i wouldnt pay. When did we hear that last . Facebook again. Talk about twitter, we should point out it is facing a dose of skepticism ahead of that ipo that will take place now on thursday. According to a new poll, 47 say buying twitter stom wouck would be a good investment. 52 of people between 18 and 34. 56 did take a positive view. Im not sure what that will help you with. The other percent said, whats twitter. Carl, when you did your excellent documentary, what was the feeling of the trajectory of growth in facebook . We talk a lot about their international market. Today, the journal says, threequarters of their users are out of this country where montezization will make that. The journal has another poll that is the highest of Companies Going into their debut since 2000. We are in a moment here. This might be the cryst crystallization of that moment. It is important for everyone to do a little skeptical reporting, a little skeptical thinking here. That range that we see may turn out to be overrun by public enthusiasm. Thats not what anthony know no the banker wants. The expectation means nothing, because things are overrun by retail. They couldnt get in on the deal. They hear nothing bad that worries them. Look, take the other side and say, look, when they get some salespeople up, it is really going to ramp, ala what yelp has done. Facebook, 50 international. Goodle, 50 and more international. You never hear problems with them. There are three analysts, all buys, 44. 33. They are almost doubles from the ipo. I dont think it is our job to say, it can go wrong. Even the best can go wrong. Those guys have not the question if it opens at 50, are they going to take it by the hope. I would assume they would immediately. Now, you see them raising a price target. At 60, you think they might go to sell or just perma buy race target. Why target. Why not inform your investor and your client base. Thats what has happened in the world. It doesnt help people at home. The first full trading week of november getting underway. The dow and s p in the midst of a full week waiting streak. Fridays jobs number among these. Same for the fed. St. Louis fed president , James Bullard, says the central bank should not rush a decision to scale back its Bond Buying Program because of low inflation. We could site substantial process. We have other things going on, low inflation. Thats why i have been willing to be patient about this. Whats your hurry . You dont have to be in a big hurry. We have room on the Balance Sheet. Some others dont think we do. Interesting. Last week, he said he was dissaturdays fitd di dissatisfied of the reiterations of qe. Work on the Housing Starts this weekend when i wasnt watching nick fuld set the record for passing touchdowns. I missed that. Wrong answer. I was struck that the housing stocks are all back. The housing is in line. If you were the fed and worried about housing, something they use to get things going, it is clearly not working anymore. It is a lot of that because we had that rate rising and it has come back down. Fed was targeting housing as one of its ways to restart the economy. Housing is not working anymore. I understand why they needed to keep it up. I think that the confidence was really hurt by the budget talks. The International Companies that we trade, not hurt. Europe, once again, pmi over in europe, so good, talking about ireland, spain, italy turning. Those were the three. If portugal turns, holy cow. Ireland has 5 Million People in it. Italy is a little more important. Remember the big market. Speaking of the bond market, people still watching the tenyear at 2. 6. It has been argued if it does go higher, at what point can you say the fed has lost control, in the bond market. There was a huge gap, between 3 and 2. 5. People expect 2. 99. If you watch stocks like home depot, they rallied as rates came back down. That will be my canary in the coal mine if home depot starts going down. The housing stocks have all just floundered here. We are going to get there, time warner cable, of course. Kellogg out today cutting 7 of their global workforce. You know whats a shame . The market loves firing. Wow, they fired the firing per share was extraordinary here at kellogg. Thats a new metric, firing per share. A lot of different metrics being used. Car reviews per share for tesla. Candles per share for solar city. As long as it is not a risk per share, these stocks are out of the woods. We are going to get tesla tomorrow in terms of numbers. Holy cow, a busy one. We could have a settlement between the government and steve cohaans capital. That story is coming up. Are more people trading in their old tablets . We will talk to the ceo of gazelle. Back with squawk on the street live from post 9 in just a moment. Nes Investment Management investment servicing, giving us unique insights which help us attract the industrys brightest minds who create powerful strategies for a countrys investments which are used to build new schools to build more bright minds. Invested in the world. Bny mellon. Easytouse platform. No, thank you. We know youre always looking for the best fill price. And walk limit automatically tries to find it for you. Just set your start and end price. And let it do its thing. Wow, more fan mail. My uncle wanted to say thanks for idea hub. He loves how he can click on it and get specific actionable trade ideas with their probabilities throughout the day. [ male announcer ] open an account and get a 150 amazon. Com gift card. Call 18882800149 now. Optionsxpress by charles schwab. A a settlement expected between the government and sac capital. The firm has already paid a fine s. A. C. Was plead guilty to one count of security fraught. Th fraud. This will be a longtime coming. S. A. C. Will become a Family Office managing the assets of mr. Cohen and some of the senior employees of the firm. It will be reduced. It was 1,000 employees at one point. You had 83 different portfolio managers. You will still have a lot of people managing his assets. Not to mention the senior employees there. For cohen, will he ever return to trading. More or less has stopped trading stocks entirely while this has been going on from what i hear. Will he continue to pursue his hopes of owning a major league franchise. This could complicate that. That continues to be something he wants. Other owners may not want that. Face ball, the standards of conduct they have. It is still kind of a club. Why did they not pursue this . Do you think they might not have had the case . Maybe he was more innocent. We still have steinberg coming up very seen and martomo. Many think he is an easier case for the government. Ste steinburg could be more difficult. They want to get it behind them, move on to becoming a Family Office. His desire for a franchise in baseball is something he continues to want. With the mets as an ideal target. Sign me up. I too would like to buy the phillies. I am probably not going to be able to do it. You are getting your head around it. He has one difference with you. He still has 9 billion. I thought he was going to buy a team better than the phillies. Good to know. His relationship with prime brokee brokers has remained, constant, steady . Yes. There had been concern would those that finance all of those trades, which has been a very good year at s. A. C. , would they stand by them. They have stood by them. Given the numbers i hear at s. A. C. And when you do the math and figure out steves actual percentage increase of his capital, then still his take as a manager of outside capital, because, remember, they still had a lot this year or some. You may end up with a number not far from what he is paying overall this year. In other words, he could pay for the fine. In one year. In one years personal gains, art sales. Ekt k. Correct. Lets just assume 1. 8 billion is not much of a year. When we come back, well count down to the opening bell. Cramer has some ideas to help you hear the sweet sound of profits as the mad dash is next. A lot of news. Well get to that and the opening bell in ten minutes. [ laughter ] [ female announcer ] each one of us is our own boss. And no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. At a ford dealer with a little q and a for fiona. Tell me fiona, whos having a big tire event . Your ford dealer. Who has 11 major brands to choose from . Your ford dealer. Whos offering a rebate . Your ford dealer. Who has the low price tire guarantee, affording peace of mind to anyone who might be in the market for a new set of tires . Your ford dealer. Im beginning to sense a pattern. Get up to 140 in mailin rebates when you buy four select tires with the Ford Service Credit card. Whered you get that sweater vest . Your ford dealer. His day of coaching begins with knee pain, when. [ man ] hey, brad, want to trade the allday relief of two aleve for six tylenol . Whats the catch . Theres no catch. You want me to give up my two aleve for six tylenol . No. For my knee pain, nothing beats my aleve. Its monday. Its monday. Its november. The leaves are all falling off the trees. We have a mad dash here for you. Lets start off with british petroleum. This is very interesting, david. This is a company that may, in retrospect, have reported the best quarters of the majors. They are doing disposing and a lot of finding and the claims have gone done. Morgan stanley goes to sell at a whole. Dividends can be boosted. Keep track of this one. It is well behind the majors. It is doing better. You have kept track of it throughout. Close track of it. The claims diminished drastically after they won a Circuit Court ruling. Thats made the stock come back. People are saying, you know what, they are not going to be put into bankruptcy by these additional claims. They have louis freeh, former fbi director. If the claims come back down, bp goes away up. What about the actual management of the company . Such a long history of ineptitude. I think they are doing a remarkable job. They are able to dispose and at the same time grow and that means higher distributions. It has become a catchup play to chevron and to exxon. Lets talk a little groupon. Not too soon to buy. Deutsche bank says the quarter is going to be good. They changed management right here. Thats when andrew mason decided to move on. And spend more time with his family. Right. That groupon then became goldman, confident on the numbers. Remember when we had ted on. They have done a fantastic job. This is going to surprise. It is a mobile and social play again. It was always a good idea. It just was poorly executed. What do you think we are going to be saying about twitter . I remember the groupon. I fear it comes at 25 billion. People at home understands you have to use a market capitalization figure. You dont know how many shares and the price. Try to take a look at the all limit market capitalization. Thats the best way to look at that company. We have a lot to watch, including blackberry and a number of other stocks. Squawk on the streets opening bell coming up that have break. [ male announcer ] what if a Small Company became big business overnight . Like, really big. Then expanded . Or their new product tanked . Or not . What if they embrace new technology instead . Imagine a companys future with the future of trading. Company profile. A Research Tool on thinkorswim. From td ameritrade. You are watching cnbcs squawk on the street. Opening bell set to ring. Twitter ipo, we believe will happen. A jobs number on friday. A lot of earnings. A lot of fed speak. We have had four weeks up in a row. We even got the first day of the month as we have almost all day long. The statistics are amazing when you have the market coming in. It is kind of interesting that 100 of the time we have been up 20 . We do finish up. There was one december that was bad. November december was good three out of four. I come back to the protection of your leads. You are getting the most money in. You tend to believe in your stocks. They have been winners. Interesting financials have not been winners at all. You will see some rotation. I am astonished that kellogg is up as much as it is. There has been this subtle rotation into that group again. They fire a lot of people, the stock goes up. You have these rotations. You are waiting to see them go into finance and go into tech. They havent done that yet. But if they do you talk about 40 , 35 of the market. That means there is so much more room. That has led to some of the targets in 2014 that are aggressive. 1800 and up. Look at the s pme. The winners of the 2014 new york city marathon. Congratulations to them. Well talk to a few in a few moments. Over at the nasdaq. Did you watch any of the race . Yes, a little bit. Nice job by the city overall. Logistically complicated as it is. I think the headline in the times is off without a hitch. Thats how you want to see it done. Goldman, down, they take it to neutral. Off americas buy list. They are not going to make the holiday great. This is the quintessential apparel sell versus the best buy buy. Gap is late. The stock has been in a viral. The ceo says apparel is selling well. Its a bad time if you are a bad time. At the same time, ups does take up to a buy. Wasnt that something. They had market expansion. That has wallowed. When i go to kohls, its a little bit lower price point. I like their sonoma brand. What does that comprise . Like Everything Else, socks are extremely good at kohls. They have the best sock department in america. You sound astonished. You can get socks at kohls, reasonable, this is a problem with jcpenney. I was appalled i was rejected for credit at the register, which was quite embarrassing, given how long the line was there. Capital was a component of the news. We have talked about blackberry not going to be acquired. Its current ceo is now outgoing, Thorsten Heins will be leaving the company. They are raising 8 billion. 6 is the coupon conversion premium. Up 28 . So you are actually not making money on the equity. You want to convert 10 a share. Thats where they convert. If they were, it would be 16 dill lieu tiff overall. I did want to mention another name involved in telecommunications. You remember the old bell labs. Most widely held stock, alu. What a hit it has been. There is a big Capital Increase there. 955 million euros, 750 million. They are raising high yields. Doing a Rights Offering to their existing shareholders to raise equity. Worth mentioning. It has been a turn. Like the old days. The new ceo. He lost that contract in brazil. They havent had a profitable year in a long time. It is early, that term is early. People laughed at nokia when that was at 34. This company has a lot of orders. There are a lot of companies that are redoing, going to another g. The ability of these corporations to manage to continue to raise money, to keep themselves going thats an important theme. We dont talk enough about the idea you can fire people, you can raise money cheaply. You can move from having a lot of employees to having more machines, artificial intelligence, intellectual property. This is a continual theme making much more with far fewer. Even though the revenues dont jump, you find that because of low rates, lots of good happens to stockholders. Meantime, something good happening to stockholders in the steel sector as goldman ups the entire sector. They upgrade a. K. The Conference Call is very interesting. They talk about the idea. Time to kick butt. We have not delivered. We have been very protective of our workforce. They are slashing and working profitability. At jpmorgan, he goes to sell. There are a lot of issues there including the fact that competitors to the major m. S. Drug. The turmoil there is ceo who thought was brought in to be able to right the ship, see you later. This is a very tough stock to own. There is not enough jenary ricks owned. If you want to play the patent, you play para go. It is going the opposite way that they are going. The dow is up about 42. Lets see if pisani is ready. There is a lot of excitement about i. P. O. S, journals, twitter range, i. P. O. From 1723 dollars. I want to point out if you want to do that, an etf for i. P. O. They are the i. P. O. Experts. It is kind of flat. Twitter will go into this basket within knife days of it trading. Thats one of the rules. If you look at how the i. P. O. For the entire year did, they have a mutual fund that trades. That is done fantastically well. It has stalled out a month ago. This year, the stock market is doing well. I. P. O. S tend to do well and outperform the overall stock market. When the i. P. O. Is down, you have the same kind of problems you have with groups in other sectors that tend to follow how the stock market is doing. Im just saying, this is the moment of greatest excitement around ipos and they evaluate where the prices are. Let me go on to relate reported numbers much better than expectations. A 29 increase of transaction volumes. Thats the number of home sales times the price. That was well above the industry average. Higher rate for sales. Maybe it didnt for them. Obviously, it hurt from some other people. I would note that their stock price basically is flat for the year. It had a great little run. They went public a year ago, had a great little run first half of the year. The second half of the year has struggled rather notably. Closed out 2012. I think of 41 and change and friday, it was just about 41 here. Let me move on and talk about vulcan materials. Thats another one big in the real estate area. Particularly in new Home Construction and highway construction. They had great numbers as well. Their numbers were up right across the market here and in the key markets. This is what was interesting. Arizona, california, georgia and texas, those are the five states they are biggest in. Those five states are onethird offer all Housing Starts. Their numbers, shipments were up 16 year over year. Thats one reason some people are hopeful we are going to continue to see moves up in the market. Vulcan was positive about new home sales continuing to do well in 2014. Higher rates hurt these companies. The bottom line is, were still seeing good overall numbers. Guys, back to you. Thanks very much, bob pisani on the floor there. We are going to do a quick faber report today. Even though i will reference an unsolicited bid, this is more a story about the growing breath of hedge funds if you will, than the underlying story itself. Lets start with that. We are talking about chat ham lodging trust. It is a half billion dollar company. Today, Blue Mountain, offered 21. 50 a share for it. Wants to buy the whole company. Put a dfrnlts out d out. He is supportive of that. This company owns a lot of limited service, extended stay hotels. Also, the market cap can be a bit deceiving. They also get a promote on that as well. That entity happens to open a lot of residence day hotels in silicon valley. Whats interesting here is Blue Mountain and its ambitions, jim. This is the company, if you recall, that helped jpmorgan unwind the whale trade. It is an enormous credit hedge fund. About 16 billion plus in assets just daley. Senior executive from jpmorgan went over there not that long ago. What is interesting here, clearly, they want to move into potentially the private equity business with what would be a real estate transaction where they are uncovering or believe they are uncovering value. Well see how it goes. But you are seeing this a lot. This is incredible. We have seen activism from hedge funds and a hedge fund decide they want to be in the hotel business. They want to be in private equity. What you are seeing is a number of these funds that get so large they find different disciplines in which to allocate capital as opposed to just one credit that is so large that typically, 16 billion, you can find plenty to do. Worth mentioning, worth watching this situation unfold also. Well see how the shares you saw, of course, were up this morning, 21. 50 a share, offer from Blue Mountain capital. Hedge funds know no bounds in their aspirations. A lot of people win. Lets head over to the bond pits. Check in with Rick Santelli at the c e group in chicago. Rick . Interest rates do have a slight drift today. Maybe it was Steve Liesman with his fed talk this morning, because obviously, you know, cheese in front of a mouse, you keep talking about no tape or qe forever. Specially on a quiet day with a little bit of nervousness maybe more importantly, you could see that it looks like a wave pattern to move higher. Say technicians, lets switch gears. When you talk about q. E. , there is a shiny light. It has an economy much smaller. That, of course, is japan. Lets look at their nikkei. If you look at this chart, it really jums o really jumps out at you that midmay, they had their high watermark ket. Here, they hovered 142. In that pattern, pretty much. If you put that chart on top of another and hold it up to the light, you will see the dollar yen pattern is pretty much identical. A lot of sideways action going on. Lets look at the dollar index. A twoday chart will reveal it has a staircase pattern going on and if you open the chart up to a month, you will see it has turned very similar to Interest Rates that would be the highest since midseptember. Carl quintanilla, back to you. Thanks a lot, Rick Santelli. Fresh from ringing the opening bell, we want to recognize the winners of the new york marathon winners. Winning the wheelchair division, marcell hood and tatiana mcfadden. Jeffrey, i think we spoke a couple of years ago, last time you won. How good is it having missed last year because of sandy to have this victory again . For me, first of all, for this moment, i am back again. It was not my will. It was the will of god. For me, it was not easy. For me, this is my good moment because in my life, i have never won like this marathon. It was pretty good for us watching you win. Watching you pull ahead in central park, around mile 24 or 25, what was that like . When did you know you were going to take that lead . That was my first time i was very happy. I did yesterday, because after that 5 kilometers, i knew that i will make it because i train well and i wanted to start slow and i had time to go. After five, i knew that i will make it. We were all watching that gap between you and the lead person at the time clothes. Marcell, was the wind a factor at all . It had been talked about in terms of the runners. Because of the cold or the wind, was that a factor in the race . It was definitely a factor. It was a lot of head wind. We were a group of five athletes. We worked together. So we had an opportunity. It was very important to save energy. Tatiana, for you, the grand slam, huge news obviously and just being part of the team that win ons a t wins on a day where it is so important for the city. How does it feel . It feels incredible. It was great closure for the year. Everything went perfectly and smoothly. I couldnt ask for a better day. You have a lot of fans here today. I hope you are ready to sign some autographs. Congratulations to all of you, marcel hug, tatyana and jeffrey smith. Great news. U. S. Attorney, Preet Bharara to held a News Conference to discuss a settlement of the charges against the large hedge fund. Coming up, an interview with Michael Milken of the milken institute. Keep it here. The ocean gets warmer. The peruvian anchovy harvest suffers. It raises the price of fishmeal, cattle feed and beef. Bny mellon turns insights like these into powerful investment strategies. For a university endowment. It funds a marine biologist. Who studies the peruvian anchovy. Invested in the world. Bny mellon. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back. Im Sharon Epperson at the imac. The natural gas is a low. A lot of folks are looking at forwards not just today but looking ahead to above normal temperatures and the fact that we are seeing near record levels of dry gas production, Something Else that is pressuring Natural Gas Prices and has natural gas looking at the september lows to see if we will retest that area. We are also watching whats happening in the oil market. Oil prices are lower this morning. We have seen rising u. S. Oil inventoririe inventoriries. We are seeing supplies from libya. This is pressuring oil prices on both sides of the atlantic and gold getting a little bit of a rebound. I will send it back to you at the nyc. Shares of blackberry plunging today. Thorsten heins, the ceo is going to step down as they look for a replacement. Write the help wanted ad for blackberrys ceo search. Tweet us and well get to your responses later on this morning meet me at waterloo. Its their headquarters. The fact that waterloo is a phrase in this story is not a good thing. Some people cant believe we are still talking about it. I guess well take a break. Here is whats coming up next on squawk in the street. Coming up, take a look at this. Those dolphins know whats happening next and they are rushing to make sure they dont miss it. Six stocks in 60 seconds when squawk in the street returns. Im beth. And im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. I want you to know stuff i want you to be kind. I want you to be smart. Super smart. I want one thing in a doctor. I want you to be handsome. I want you to be awesome. I dont want you to look at the chart before you say hi. David. I want you to return my emails. I want you to keep me doing this for another sixty years. At kaiser permanente, we want you to choose the doctor thats right for you. Find your Perfect Match at kp. Org and thrive. Welcome back to squawk on the street. Im kate kelly. Standing outside the federal courthouse where we are expected to see documents of the case u. S. Versus s. A. C. There is a proposed resolution we have word in the Insider Trading case thats been going on for months. We will get more details from bharara. We have a confirmation that the settlement with a 1. 8 billion settlement, a record Insider Trading amount, as well as a guilty plead to securities fraud from s. A. T. Capital will be forthcoming. We will bring you the Additional Details as we get them. Our kate kelly are a busy day there watching the s. A. T. Story. Six in 60. Lets start with time warner cable. Deutsche bank says to buy it because it is not likely to be acquired by shorter. You usually dont get that level of certainty. Oxy . They say the company is going to divide itself up. That would be worth 30 more. Consul energy. I mentioned this because we had the ceo on. They are getting more into natural gas, less thermal coal. Well see. Earnings from sisco, not the tech one. What a nice surprise. This is the restaurant distribution company. The beginning of a big move. Lumber lick qui day tors. This is a breakout level and it looks like better than expected. Finally the companies that do a lot of business with the federal governments get killed. Whats coming up on mad . This is one of my favorite companies. They kill the super bugs that we are all susceptible when we go to the hospital. Scott cutler will be there to say why the New York Stock Exchange is ready for twitter. I want people at home to not overpay. You can but the system may not do what facebook said. A big week. A huge week, carl. See you tonight. Simon is here to tell us whats coming up at 10 00. Were going to have the very late testify on the stunning developments of blackberry. What does it mean for shareholders now . The billionaire Michael Milken will be here for an exclusive interview on the future of biotech and the latest on the physical tradeins of apple products with the ceo of gisele. Tdd 18003452550 trading inspires your life. Tdd 18003452550 life inspires your trading. Tdd 18003452550 where others see fads. Tdd 18003452550. You see opportunities. Tdd 18003452550 at schwab, were here to help tdd 18003452550 turn inspiration into action. Tdd 18003452550 we have intuitive platforms tdd 18003452550 to help you discover whats trending. 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[woman] off to hawaii what if you didnt know that as the price of gold rises, so should the coverage on your jewelry . [prospector] ahh what if you didnt know that kitty litter can help you out of a slippery situation . The more you know, the better you can plan for whats ahead. Talk to farmers and get smarter about your insurance. We are farmers bum pa dum, bum bum bum bum welcome back to squawk on the street. We are playing catchup data we are releasing august and september factory orders together. The number, darn close at 1. 7. Are we are now pretty much quaut up. Last week, we have the intraday low at 247 to give you some context. Thanks very much, Rick Santelli. We have been watching shares of blackberry. The stock is down as you might have expected given that announcement on what was deadline day for the wireless devicemaker. Deadline day for bidding parties to step up to the plate. None did. Including fairfax, a significant owner of its equity, which it said it would make or had a letter of intent to acquire the company at 9 a share. There was nothing that obligated fairfax to follow through. As i reported previously, there was a great deal of question surrounding the ability of fairfax to finance a 9 a share bid for blackberry. It did not come with that bid, nor did any other of the parties, many of whom visited the data rooms. So blackberry tells us Thorsten Heins will leave the company in a couple of weeks. A 6 coupon. 28. 7 conversion premium meaning you can convert to 10 a share. Thats a lot up if you will from there. All of this setting up an uncertain future for our company that will now be run been an interim ceo who turned around the base. Thats being viewed by many as positive. We have the stock down and an uncertain future for this company. Want to bring in one of the journalists covering that story, boyd joins us on the news line this morning. Good morning. Good morning. Tell us what you think this means and specifically what prem watson does strategically. I think he waits until he gets in the chair and sees what he brings to the table. I suspect you will see a little bit of quiet time where mr. Chen comes in and figures what he thinks is the current plan and what he wants to keep and what he wants to revisit. He is not an active investor but i think it becomes a little bit of a waiting game. Blackberry now has 1 billion of extra money. They can have a little bit of runway to do that. I think people are focusing on the fact that this means the auction is over and the company is not getting sold. If you look at this through the other end of the telescope, i think this means that blackberry can get on with what it needs to do right now. You had an acquisition. It might take months to close. You might have security reviews. This company would sort of be hanging frozen for a while. Where as at least now they can get on with things. You take that. You look at the terms of the convert, which are very friendly to current equity holders. Some would rather have a safe e r offer. The terms are very friendly. I dont think you could find blackberry borrowing at the bank or the highyield market. It is not the company we are expecting. Blackberry is canadian company. If they can pull this off, it doesnt get broken up. I think there is certainly an up to this scenario. We tend to see a little flag waving when it comes to the company and certainly canadians. Should people be paying close attention to who john chen is or is he really just a placeholder for now . This is the guy. You never know. I think this is the guy for the turn around. He is someone that turned around sybase. You talk to people that know that company. I dont know the file that well but people i trust told me that. Its an enterprise company. That will do something about where blackberry is going. They need to decide what to do with the handset business. Boyd, what about Thorsten Heins. Prem watson renewed his contract in the spring. We believe he has a 33 million payout if the firm is acquired or if he is fired. Is that payout about to be triggered . I couldnt honestly tell you at the moment. Maybe we will know that by days end. It hasnt been a top of the list thing to find out. Well see what happens. It could end up being that he had some of the right ideas. I dont think you can bring the turnaround guy. If it ends up being 32 million to pay it out, that will be an expensive bump in the road for blackberry. If you look at it on the other side, if this works out for fairfax and the stock goes to 15, i dont think people will worry too much about that. Finally, boyd, any idea whatever happened with serberus or qualcomm, some of the headlines we woke up to this morning . No, not so much. Anything like that, you have to unless they were there this morning with cash, with underwritten bank lines, i can see why the board of directors would have opted for this as opposed to the uncertainty. We have seen what the uncertainty has done to blackberry sales. Boyd, thank you for your time today. Blackberry has had its losses since the beginning of the section earlier today. Speaking of blackberry, focus of our twitter question today. We want you to write the help wanted add for blackberry ceo search. Tweet us at squawk on the street. Be kind. Well air your responses later the fifth annual partnering for the cure underway in new york today. Partnering for cures brings together leaders from across the various disciplines of the medical sector. Our own kelly evans is there with some special guests. Hey, kelly. I am here at the grand high at in midtown manhattan. Two of the most deeply involved figures in this conference. That is National Institute of health director, Francis Collins and mike milken, the adjunct bond infamily, one of the leading figures investors are going to give the gdp report telling us how much an impact it had on things. What impact did it have on the National Institute of health . I had to send 14,000 scientists home who were doing Cutting Edge Research and were told not only they couldnt do their research, they couldnt look at their email. During those 16 days, experiments languished that could have been pushed forward. Patients that wanted to come to our Clinical Research center to be part of protocols were turned away. I sincerely hope this never happens again. This came on the heels of the sequester which took away 1. 5 billion from our budget last march and a 10year decline in sfoert at the nih. It has been a pretty tough tough decade. Funding for the n. I. H. In real terms is down about 25 over the last decade. As we are looking at all different kinds of funding models for health care innovation, does it seem as though some of these Biotech Companies are seen as doing quite well in that regard. Does the private sector really have to step up here. There are numerous opportunities for funding. Thats one of the things we are discussing at this conference. I think we need to remember that only 10 of the health care spent is really related to prevention and wellness and research and cure. Still, 90 is on cure and treatment. If we are going to solve these issues of health care, and we need to focus on prevention and wellness, we need to focus on research and cure, i would say people always think it is the worst of times. This is the golden age of sigh ent science. People forget that 50 of Economic Growth can be traced to advancements in the bio science. Will obama care help or hinder that development. Does it get in the way or does it mean more access will drive Better Outcomes . I think the issue you are talking about obama care is focused on care and treatment. The largest part. If we are going to solve the problem, it really isnt care and treatment. The issue is really prevention, wellness, research cure. There are more and more people talking about this on wall street. The lines between a company like apple and some of the names that you are talking about in this conference are blurring, because, frankly, Wearable Technology and personalized medicine sounds like the next big wave. Whats going to be the next facebook or twitter for this space . I dont know that i can make that prediction but there is a very rapid evolution naary proc going on here. What we need is a healthy ecosystem, that involves phrma and biotech and special Device Companies and computational companies that are dealing with big data. Also, academic institutions which tend to be where the basic science gets done that undergirds all of this. Right now, the ecosystem is struggling a bit. If we want to see americas success story, which mike just mentioned over the last many decades, come back to the foreshlgs we hafore, we have to think about that. When you look at the rest of the world, they have read americas playbook and have seen how success lapp success happened and they are trying to become what we may be. To the point, are there some companies, a bunch of names h e here, a lot of small, private companies, names that could be the next exciting Investment Opportunities for years to come. What do you see here that excites you . I see a lot that excites me. It is really the cooperation and the efforts we have in convening and parting for cures of government agencies, government leaders. Last night, democratic leader, pelosi, chairman upton and congressman fata, tomorrow, erik cantor and the combination of Academic Centers that are here. The four profit companies, the disease specific organizations that i think people dont fully recognize their importance in investments. The investors and philanthropists that are here. I would say, i want to come back to the point you raised before, people always say it is the worst of times. Well, the best time to invest was in 08 and 09. The same it was in 74 and 74. Health care valuations today. They are higher. So you are saying now is still a good time to invest. A lot of these names still look expensive. Yes, it is a great time to invest, because this underpins all world economists. Just like when sputnik went up in 57, people said it is the end of the world. It woke up to the United States if we focus or interests on physics and mathematics. Sequester and these other issues have rea quakened the focus here that these are the areas. When you say, what are the best companies . Thats a micro, shortterm look. In the 1960s, Merrill Lynch put out a report that said, computing day that will be the great place to invest. They listed 30 companies. They were 100 right but only one of those companies was still in the computer industry 30 years later. So many new companies are being formed today. Want to get to an issue in the news right now, this very instant. Our kate kelly has been doing a great job following whats happening with s. A. C. Capital. So many people focused on the specific hedge fund, the degree of Insider Trading and forgetting that at the center of the case was a lot of Insider Trading with doctors and health care specifically. How do you make sure an Institute Like the n. I. H. Or the industry more broadly is not turning over Important Information to wall street on investors. How do you tighten security . How do you tighten regulation, if thats what it takes . How concerned are you about what weve learned in this context . Most of nihs resources go out in grants given to our nations finest universities, Small Business and other concerns. 85 of our dollars. Thats how we spend them. Thats when you hear a breakthrough at stanford or m. I. T. Or the university of virginia in some area. It was probably funded by n. I. H. We have conflicted guidelines that are expanded and much more rigorous than they were a few years ago. Were you surprised about some of the doctors that were given information and getting paid for it . Thats a deeply troubling revelation. Institutions where those doctors are employed have a role here as well, as does n. I. H. And occasionally, things really, seriously go wrong. I hope that is not seen as a reflection of the ethics that people operate under who are part of medical reserve. I would say categorically, most of the people that work or n. I. H. Doing grand efforts are dedicated to public health. They are not out there on the take. Important question, though. Do you think a 1. 8 billion fine, 600,000, which is already paid for a hedge fund the size of s. A. C. Capital is going to deter people going forward. I am not familiar with this specific case but i think you are not focusing on the big picture. Seven of the 10 Fastest Growing economies are there in africa. 98 that a woman doesnt pass aids on to their children. You dont think this is a cancer on the Health Care Industry . The challenge for a person now is, how do we move science along . Are we allocating our resources i think there is a bigger queral government. We have provided subsidies for housing totalling hundredis of billions of dollars. There are these issues that come up from time to time. This is an important one but relative to hundreds of millilis of people on this planet, are they going to live long, healthy lives . How do we move research along . These are not the focus of attention in sub sa har ra africa, east asia, south asia, where most of the people live. They want to know if they have a disease, how we can solve that problem today. The worlds economy is driven by extending the length and the quality of life and by providing knowledge and education and the technology. While cracking down on elicit behavior . That is the end of the sentence, i would hope. That is one, for sure. But i would start with another point. I dont know if we have time. If we talk about behavior, how about the fact that the change in weight in america cost the United States 1 trillion a year. How are we going to get people to focus on personal responsibility for their own health . It sounds like it is changing and it is going to create exciting opportunities. Mike milken, Francis Collins, thank you for your time this morning obama supporters would argue that the administration is known for being tech savvy. How did health care. Com end up with so many problems. The former while house chief Technology Officer will join us live. Is twitter really worth all the hype . Find out what investors have to say when squawk on the street comes right back. Little old fashioned. I love chalk and erasers. But change is coming. All my students have the brand new surface. It has the new windows and comes with office, has a real keyboard, so they can do real work. They can use Bing Smartsearch to find anything in the world. Or last nights assignment. And the battery lasts and lasts, so after school they can skype, play games, and my favorite. Do homework. Change is looking pretty good after all. Change is looking pretty good after all. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the allnew fidelity active trader pro. Its one more innovative reason serious investors are choosing fidelity. Get 200 free trades when you open an account. I am scott cohn, cnbc newsroom where we are waiting a conference by eric holder. A significant settlement, a 2 billion settlement involving Johnson Johnson and the antipsychotic drug, ris pra doll. We have reported it is being overly or improperly prescribed. This may be the resolution of that case. Dow jones reporting a 2 billion settlement, including a guilty plea over the antipsychotic drug. Risperdal. Scott cohn back at h. Q. Twitter raising the price range to 23, 25 a share. A new cnbcap poll shows that investors are still skeptical about whether to invest in the company. It is a seminole time for any company just before it goes public. It shows the investing public isnt ready to jump in yet. Only 40 of respondents believe that twitter is a good investment. That compares to 54 that thought facebook would be a good place to put their money in may, 2012. A larger percentage of higher income and mel inal responses believe that twitter would not be a good investment. They believe the company will be successful in the next five years. Respo respondents dont view the industry all that high. 47 for facebook. Only 19 said twitter was favorable. Pinterest and instagram got similar marks. The problem is valuation. 2325. It would be valued at 13. 6 billion. 14 times 2014 sales. When they polled them, 62 of active investors believed a similar evaluation at 100 billion was too high. This gauge from our poll is that of the Retail Investor and the investing public. It is unlikely they will have any in the i. P. O. , placing those shares with sophisticated buyers on wall street prepared to take on the risk to reap that reward. People around the globe standing in line to get their hands on the new ipad air but has all the hype really led to big consumer demand. When we come back, we will talk to the tradein company about who is trading in their old tablet to get their hands on an air. [ bell ringing, applause ] five tech stocks with more than a 10 . Change in aftermarket trading. All the tech stocks with a market cap. Of at least 50 billion. Are up on the day. 12 lowvolume stocks. Breaking into 52week highs. Six upcoming earnings plays. That recently gapped up. [ male announcer ] now the world is your trading floor. Get realtime market scanning wherever you are with the mobile trader app. From td ameritrade. With the mobile trader app. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum. New from philips sonicare. So so just how many people traded in their old ipads to get their hands on the new ipad air this weekend. The online trading company, gazelle says they saw a 275 increase in total trade in volume. Israel gano is the president and cofounder of gazelle. Good morning. Good morning. Thats a fairly strong trade you are seeing there. Describe whats happening . We are seeing a dramatic increase in the ipad tradeins over the last couple weeks. I think it starts with the product. I havent gotten my hands on the ipad air. It seems to be a phenomenal product and a real upgrade from the last generation. It is 20 thinner, 29 lighter. Were seeing a lot of people upgrading. You see what apple Share Holders would really like to know is how many new products apple sold over the weekend. At this time last year, it was about the ipad miniand the fourth generation of the ipad. They sold 3 million in the first weekend. From what youre seeing, do you think they have sold less or more than 3 million airs this weekend . Yes, i think you have to separate the two. The ipad air was available for sale. Thats where we saw the big jump in tradeins. We havent seen as much in the ipad mini. I suspect they have done really well. I cant obviously know the specific numbers that they sold. Israel, the spread between a retail price and a tradein price, where is it fat es, thinnest . In tablets, phones, apples, android . We still continue to see apple devices retaining volume much better than any other device. Thats true for smart phones and tablets, clearly. The surprising thing is that some of the higher end android devices, galaxies, the 3s, the 4s, may not retain as much value but they retain the value pretty well. Whats your strategy for insuring that they remain sound and you can maintain where you are . Weve seen a lot of competition in the last year. I think it is all great news. It just continues to validate the opportunity here. We talked about the 14 billion adjustable market in the u. S. Over the next few years. As far as our positioning, it is very clear. We are the online precommerce leader for any consumer that purchases devices online. Thats about 20 30 . Were the goto guys. We have no string attached to our tradeins. You get catch. You dont have to go to the store or sign a twoyear contract with the carrier. We give you cash and you can do whatever you want with that cash. We see our Customer Base coming back to gazelle year after year. With the growth rates you have just shared, 275 growth rate in ipads, our business is pretty much intact. Its nice to see you, israel. The president , cofounder, and c ce. Of gazelle. James bullard speaking out. Find out whether we mign we mig taper. Back after a quick break. Im a careful investor. When you do what i do, you think about risk. I dont like the ups and downs of the market, but i cant just sit on my cash. I want to be prepared for the long haul. Ishares minimum volatility etfs. Investments designed for a smoother ride. Find out why 9 out of 10 large professional investors choose ishares for their etfs. Ishares by blackrock. Call 1800ishares for a prospectus, which includes investment objectives, risks, charges and expenses. Read and consider it carefully before investing. Risk includes possible loss of principal. Im bethand im michelle. And we own the paper cottage. Its a stationery and gifts store. Anything we purchase for the paper cottage goes on our ink card. So you can manage your business expenses and access them online instantly with the Game Changing app from ink. We didnt get into business to spend time managing receipts, thats why we have ink. We like being in business because we like being creative, we like interacting with people. So you have time to focus on the things you love. Ink from chase. So you can. More than a new interior lighting system. It is more than a hot stone massage. And more than your favorite scent infused into the cabin. It is a completely new era of innovation. And the highest expression of mercedesbenz. Introducing the 2014 sclass. The best or nothing. Thank you. Were just over an hour into trading. Here are the stories we are squawking about. 7 33 on the west coast. 10 33 here on wall street. Twitter boosting the price range of its ipo to 2325 a share. The previous range was 1720. Shares of kelloggs up about 4 , better than expected Third Quarter earnings and announcing it plans to cut 7 of its workforce by 2017 to further reduce costs factory orders rose 1. 7 in line with the consensus estimate. The president of the st. Louis fed, James Bullard, spoke to us this morning saying we have made substantial progress in the market. There has been, quote, substantial progress in the labor market, would be a clear signal he is ready for the fed to reduce or taper his prices. They have gotten what they are after on the employment front. Every tickdown does place the chance of a taper. He is concerned about inflation. We could site substantial progress at any meeting. However, we have other things going on. We have low inflation. Thats why i am willing to be patient. Whats your hurry . We have room on the Balance Sheet. Where as maybe some others dont think we have room on the Balance Sheet. A percentage of the u. S. Entire economy, the feds Balance Sheet is lower than the europe, United Kingdom and japan using the same metrics there. His takeaways show that the fed has room to grow the Balance Sheet without creating runaway inflation. The most important Economic News is the report of low inflation in europe and he challenged those who have forecast runaway inflation from the feds policies to rethink their views on how prices rise and on the economy. He did suggest that he was less likely to not taper, because of concerns over budget battles and shutdowns in washington. I dont think that we can afford to wait until the political waters are completely calm before we decide to make decisions. So i kind of hate to put too much emphasis on partisan bickering in washington as a special variable or a special situation. If it is really out of control, we might pause for just a minute but i dont want that to be driving fed policy. Bullard added he didnt believe the Government Shutdown had much of a big impact on Economic Growth and commenting on the nomination of janet yellen to succeed ben bernanke. He said, quote, she is an insider who has been there then tire time and forecast continuity in fed policy. Before we let you go, bottom line, at the end of last week with the strong data, people start repricing in the possibility there would be a taper, perhaps sooner than people had expected. We saw the yield on the tenyear go from below 2. 5 to above 2. 6. What does this interview mean for that discussion . I think it means that bullard, who is sort of a dove but more of a centrist dove wants to see that inflation number go up and is not a hurry to reduce q. E. Until he cease that come up. December is not likely but it is possible. January becomes more likely for the fed taper listening to jim bullard this morning. Lets get back to blackberry shares which are trading sharply lower on use the company is abandoning the plan to sell the company. The krechceo is also being repl. James is an analyst. He joins us now. What is your reaction to this news . My reaction is that nobody really got what they wanted. The people that wanted to take the Company Private obviously couldnt raise the debt they wanted. Those that wanted to see it stay public and continue on its track or an attempted recovery track, they are going to be die luted if it is successful. I think it was maybe the best possible outcome. At the end of the day, i dont think anybodys expectations and hopes were met. Can blackberry survive . I think it depends. Some of their products could be good standalone products. We see so much change and so much value going out of the hardware. Frankly, what they provide on the service side is difficult. I think you are going to have to see massive changes in their business structure. If it is going to survive, it will look much different than today. James, there is a fascinating article on the front page of the journal for its timing an positioning. It basically says that Thorsten Heins made a key decision not to split the company into smartphone and is he advices business and there were other people around like hp and ibm that were willing to do some partnership deal. Not only did he say we are not having that conversation but he doubled down on the new launch of the hardware and there was a 1 billion doll writedown on thats a result. Is Thorsten Heins the fall guy for this . He is clearly the fall guy. He is leaving. Depending upon what they have negotiated will probably get paid pretty well. While on paper, it looked like a good solution to separate the hardware from the service business. The contracts they had with the carriers and others may have made that difficult to achieve. So he could get blamed for his bad strategic decision. My suspicion is the structure is locked in place from years and years previous. You have an interim ceo coming in who has a good history of turning around the base. Do you have any guesses as to where he will try to reorganize this company and focus . Well, based on what their cash has been recently and that they are raising additional money, my guess is he is going to try to further reduce the size of the organization and end up focusing more on services. One of the hard parts may end up being what their agreements are with carriers and what they have agreed to supply them. All that ultimately is the subject to renegotiation. I think it will be a lot more difficult and complex than say, lets fire a lot of people and focus on services. Finally, james, you talk about the challenges in montizing the i. P. How much value is sheerly in the patents at this point . Thats a really good question. Thats the question in the didu a whole. It is like baseball trading card business and value. At certain points, it could be worth a lot. Recently, we havent seen a lot of awards given in legal cases. That may be tamping down the value of the i. P. Ultimately, it is what somebody is willing to pay ayou for that. We are looking at the stock at 6. 82. What is your advice to people watching . For us as we are assigning 11. 5 billion worth of value to the i. P. , we think the stock is worth 2 to 3. If they had been able to escape without having to do this debt offering, it would have been worth about 2 share or more. We still think there is a down side. James, thank you for your time. James is joining us from Pacific Crest security. Still ahead, Carly Fiorina will join us live. Plus, u. S. Attorney, Preet Bharara will hold a News Conference at 1 00 eastern. We have the details on the settlement and a live interview with former s. E. C. Chairman, harvey pitt. Thats coming up. Weekdays are for rising to the challenge. Theyre the days to take care of business. 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Your money needs an ally. Welcome back to squawk on the street. Shares of ryanair are getting grounded after they lowered their profit forecast for the last couple of times citing Competitive Pressures and the weaker, bigger economy. Ryanair is europes biggest airline. Off to chicago where Rick Santelli is standing by. Thanks. Everybody enjoyed James Bullard on cnbc with Steve Liesman. I have basically one observation. People object the floor talking about the notion of Balance Sheet. Here is what James Bullard said on air. We have room in the Balance Sheet. Some think we dont have room in the Balance Sheet. I guess thats about as subjective of an approach to their Balance Sheet as one could state. As we approach 4 trill and approach on the feds Balance Sheet, the size of the japanese entire economy, whether there is room or there isnt room, is such a puffy statement to make. Consider, where is the Historical Perspective on this. The Balance Sheet has never been this big. And, i dont know that there is any rules written anywhere regarding Federal Reserve act that created it that has any limits to it. Zero Interest Rate policy known as zerp, could stand alone at this point. It really is the amount and the fact that there are so many unknowns as regards to the exit. Is this like a tarp a, or a bailing out of g. M. . Some of these things didnt turn out half bad. It is about the risk and the question. It reminds me of Ben Bernankes statement that you dont have to worry about subprime. I dont understand where the statement comes from. Lets switch gears and go to tech corner. We spent a lot of time on this and we will continue to do so because it is important. We talked about the five and the tenyear. We did the retracementes for the big move it made in september. That yielded in 139 , 2. 47 and it was hit right on the nail on october 30th. Considering the street is ennam merd, we see we missed the mark. We hit 2. 62 on friday. We hit 138 in the fives, viewed under the context of 1. 39. If you want to know when to start selling or looking for more dramatic curve steepening, you want to do it when we get a trade above 1. 38, 1. 39. You are going to have to play that as a bit of a zone. Simon, back to you. The u. S. Attorney, Preet Bharara is holding a conference in a couple of hours. Harvey pit will join us live to weigh in on that perspective settlement right after this break. K. For for all the official rules and details, go to cnbc. Com. You have until 8 29 eastern friday morning. Good luck. announcer at scottrade, our clients trade and invest exactly how they want. With scottrades online banking, i get one view of my bank and brokerage accounts with one login. To easily move my money when i need to. Plus, when i call my local scottrade office, i can talk to someone who knows how i trade. Because i dont trade like everybody. I trade like me. Im with scottrade. announcer scottradeproud to be ranked best overall client experience. [announcer]. If you think the best bed for one of you might be a compromise for the other one. [woman]ask me about our tempurpedic. [announcer] theyre sleeping on the newest tempurpedic bed. The new tempur choice. [man]two people. Two remotes. [announcer] firmness settings for the head,legs,and back. And with tempur on top,that famous tempurpedic comfort comes any way you like it [woman]ask me about the lumbar button. [man]shes got her side. And ive got my side. [announcer] tempurpedic. The most highly recommended bed in america. [woman]dont touch my side a settlement is expected to be announced today between the u. S. Government and steve cohens multibillion hedge fund, s. A. C. Cal capital, expected to pay 1. 2 billion. Want to bring in harvey pitt, joins us from washington. Harvey, good to have you back, good morning. Good morning. You cant have a settlement without some people saying its a witch hunt and others saying it wasnt enough to truly hurt. Where does this within fit . I think, a, its not a witch hunt, although i have concerns with all of the preindictment publici publicity. And, second, this is going to hurt dramatically, i think. This is a significant settlement. I think the documents are out officially now. You call it significant, harvey, in what sense . The size and scope of the deal the way in way you think hell interact with his prime brokers, what . I think, first, just the size and the magnitude are unprecedented. Thats a starting point. But more importantly, and i havent seen the papers, but the reports of the papers suggest theres a concession of rampant Insider Trading and that concession on the part of cohen is going to have a dramatic effect in the one remaining governmental case, the s. E. C. s administrative proceeding for his failure to supervise. Theres now no way he can defend that action. So how that change the way he does business, harvey . Well, it i think its going to change it in several ways. First of all, the sanctions for failure to supervise can be bar him from the industry. More importantly, wall street had previously decided that they would continue to do business with s. A. C. At least until there were some verdicts. But now, knowing about his admission to rampant Insider Trading, i think theres a serious concern about anything doing business with him going forward. I want to follow up. Were getting the papers now. 1. 8 billion. Including the 616 million previously. Im looking here, as well, theres a fiveyear it says theres what is it fiveyear probationary period of some kind . Agreement provides no immunity from prosecution for any individual, does not restrict the government from charging any individual for criminal offense and seeking maximum term imprisonment applicable to such violation of law. I want to go back to the idea the banks will potential lil step away when they havent previously. Im curious why you believe that will be the case. Obviously, Family Office is what they will become. That, i think, is already was set in stone before we saw the paperwork here. Right. But why wouldnt i, if im goldman or Morgan Stanley or jpmorgan willing to finance the trades and leverage needed by the firm when it becomes a Family Office . The problem for you, if youre an Investment Bank firm or one of the types that youve indicated is, youll never know whether his trades are legitimate or based on Insider Trading. If you start to fund those transactions and give him the kind of back Office Support he needs, you run the risk that youre facilitating Insider Trading. Youre now on notice. I think theres going to be a long, hard, careful look by these banks as to whether they want to engage in that kind of risky proposition. That would be a big deal and a big change from what i think they expect will happen. Why that is different now, harvey . Weve already had other employees admit to Insider Trading. What is the defense between the charges that have already been filed and pled to, and this deal today . The main difference is you can always argue, although i think it was highly suspect, that these were oneoff situations where individuals were engage in misconduct. But here, you now have s. A. C. Pleading to the fact that it engaged in rampant Insider Trading. That changes the whole die nam ex. It now says there was a culture of Insider Trading at this operation. Final question here, harvey, theres a bit of an irony here, if he becomes a Family Office he no longer needs to be registered by the s. E. C. He wont have to be registered. But he will be engaging in transactions or at least he hopes to for his employees as well, and that may not be possible for him. He may be limited to his own money. But more importantly, given the size of his accounts and the size of his trades, if he done have the cooperation of other parties on wall street, his business is not going to be worth very much at all. Harvey, thank you very much for your insight, as weve got the papers in hand. Harvey pitt joining us in washington. Ahead on the program, more on the s. E. C. Settlement, for from kate kelly when sidewalk on the street returns. Welcome back to squawk on the street. Heres whats happened so far. I do think qe has been effective and if we had to we could do more. I dont think thats likely, but i certainly would not take it off the table. The toronto globe and mail reporting Blackberry Limited will raise 1 billion new funds and replace its chief executive in some directors. This is one that every month is doing worse. I know you say they dont need capital but to me they said they dont need the capital. To me, when you have that spiral down, capital is king until you can come up with something. Looks like twitters raising its ipo, expected range price higher and higher. Not a surprise, i guess. They could start low somewhere move up, thats the way to do it. Instead of facebook. Right. [ bell ringing ] should people be paying close attention to who john chen is or is he really a place holder for now . No, i think this is the guy. Well see. You never know. I think this is the guy for the taimoning for the turnaround. People also think its the worst of times. This is a golden age of science. And people forget that 50 of all Economic Growth can be traced to advances in the bioscience. Welcome back. Good monday morning. Live at post nine at the New York Stock Exchange. A check on the markets this hour. The dow just weakening a bit. Dropping by 20 points sense we last checked in. The s p 500 and nasdaq managing slight positives to kick things off this week. Steel stocks, u. S. Steel and a. K. Steel rallying after upgraded to neutral. Risks associated with oversupply priced in. Road map for the morning goes like this, blackberry, stock down big after the company will replace the ceo and abandon a plan to sell itself to a large investor. What does it mean for the company and ceo . Well talk to Carly Fiorina in a moment. Exchanges under obama care open under a month. Major glitches for the main website. What will it take to get obama care up and running properly . Well ask the former chief Technology Officer in a few moments. The department of justice announcing 1. 8 billion settlement with steve cohens s. A. C. Capital, the largest settlement ever for Insider Trading offenses. More in a couple of minutes. Straight to the blackberry news announcing ceo will step down as the Company Gives up efforts to sell itself to a large invest. When he leaves the couldnt which has weakened considerably, how much will he walk away with . Mary thompson with more on that. Good morning. You note size of his exit package depends whether the board sees the 1 billion investment as a change in ceil control. He he leaves without cause or good reason his payoff will be less. In april the firm gave heins a good equity grant, 55. 6 million hed receive if blackberry was bought and he was fired. The grant vested under change of control. If not seen as sale or change of control he walks away with far less, especially if he leaves before april 21, 2014. Now, taking a look at s. E. C. Filings, gary hewitt says bulk of heins severance pay two years worth of salary, 2 million canadian there and restricted stock units might be worth 5 million along with options to vest in the future. Shareholders sure to be angry given the stocks fallen 4 2 since hes taken over as ceo. Remember 25 million paid to leo apotheker. He engineered the acquisition of atonight michigan. Dunns ten tur, ended with reports of inappropriate relationship with a subboard ma subordinate. A number of people point to jcpenneys boss, johnson, received 12 million in stock to make up for what he left at apple. Shares are worth less today. While he holds warrants on jcpenneys stock, theyre under water, severance payout 149,000. Thank you. Mary thompson. Carly fee or reason na lly fior the news line. Good morning. Good morning. How are you doing . Were okay. Trying to make sense whether or not a turnaround is even within reach at this point. Well, personally, i think not. I can remember having a conversation with you and others on the desk about blackberry around a year ago and i said, you know, sometimes companies arent out of time. And i think this is a company that has run out of time in two ways. First, i think the time to make a big move, to acquire a company, to put yourself up for sale, is before its obvious to everybody when you have leverage left. Secondly, i think the companys arent out of time because when they launched their new product, they seemed to have lost track of that customers. The customers who remained loyal to blackberry loved the interface. They didnt like the touch screen of an iphone or samsung. Why they were still blackberry users yes they threw that out. The launch was a disaster. I think here we are now, a year plus later, theres not a lot of asset left in this company. And i think thats what youre seeing. Right. Whats interesting, though the case on blackberry messenger. Blackberrys done a decent job with the specific technology, rolling it out across other platforms, there is usage among younger people. Do you think with the Company Trading below 7 here, how much value could bbm unlock if it were to become kind of the thing that blackberry stands for . Well, i do think there are assets within this company that are worth something. Thats a different question than whether the company as it currently is structured survives. I think the answer is probably not. But certainly there are some assets in there. I think the question is, will they be cleareyed about getting the maximum they can for those individual assets. Carly, you know, it strike me, talk about losing focus with your customer. We have people, maybe we leave in some weird bubble, but we have people on set all the time who have both an iphone and a blackberry. I mean as of today. Im wondering if anything could that is a sign they could have made any tactical move in the past 12 months that would have made today different . So, its interesting. Im one of those people. You know, i i continue to use my blackberry for certain things because im one of those people who loves the interface. And so its people like me that i think blackberry lost sight of. They were so busy chasing apple and samsung by the way they decided to chase them, in my opinion, way too late but they were its not like the z did gang busters when it came out. Exactly, thats my point. Thats my point. Because the interface was not what blackberry customers really were in love with in the first place. Thats exactly lost sight of why they kept the customers they kept. They lost time in the process. By the way they lost a lot of customers. Ill ask you straight out, would you ever be interested in running this company as they now search for a longerterm ceo . What would you say to the person who does take that job . Well, first of all, the short answer, in terms of your personal question is, no. But i think whoever takes over this Company Really has to be cleareyed now about whether or not it is a Company Going forward. Are there assets in that company . Yes. One of the assets replanes whatever customers they have. But i think they need now to be focused on maximizing shareholder value. I dont think thats a Standalone Company, and clearly they had a great deal of difficulty selling themselves, perhaps it was because they were demanding too much, perhaps it was because they were unwilling to sell piece parts of this. But i think, sadly, their time as a Standalone Company is limited now. Good to get your insight. Appreciate it very much. Talk to you next time. Take care. Blackberry also the subject of this mornings squawk on the tweet. Write the help wanted ad for the ceo search. Tweet us. Well get your responses later on the hour. Now, breaking news this morning. S. A. C. Capital agreed to a deal with the u. S. Government. The details have just been released. Kate kelly joins us with more on that. Any headlines . Yes, were getting a first look at the plea agreement right about now. And essentially its as expected, a 1. 8 billion fine in total, which the government says to its knowledge the largest find ever in connection with Insider Trading case as well, it says that s. A. C. Will plead guilty to all of the four counts that were against it in the july indictment, thats two counts of securities fraud, two of wire fraud. More on details of the language as we go along. And finally, they will also agree to have essentially independent compliance monitor no late than ten days after the sentencing occurs. There will be a sentencing as part of the case down the road. A number of independent checks and balances, a very large fine. They are agreeing to give up their securities registration which will not allow them to manage public money once they lose it. In other words, likely to become a Family Office. Other option to shut down. Very large fine, as well as other checks and balances for the future. Which piece is most significant in terms of precedent, the guilty pleas or the size of the fine which as you said a third sounds like its been paid. You know, there are a number of firsts about this. One of them is that this firm is even still doing business right now or plans to in the future as a Family Office. Some no doubt will think its optimistic and returning to a hedge fund down the road if they get the registration back optimistic. The fine, certainly a record. The fact theyre pleading guilty to securities fraud, this was not the case the government set out to make they wanted to bring an individual Insider Trading case against steve cohen. Im sures that something they might still consider. Its a landmark decision for the government, a huge fine for the industry and oddly enough, theyll live to fight a few more days or another year or two. Well see. Yeah. I think theyre sponsoring a Balloon Festival in stanford, kate. Kate kelly with the latest detail on s. A. C. Capital. To get the obama website up and running, big problems exist. What will it take to get the website fixed by the end of the month . Well ask aneesh chopra. First, Rick Santelli keeping an eye on the record amount of money into funds this morning. Rick . Yes. We have just the man for that, charles beaterman and i will put a fine tip on the inflows into equities, outflows in bond funds and what both mean in the short term and long term. But thats not all. Well talk about public versus private employees, how they were affected on the shutdown, and what effects the shutdown will have on future data. Jam pack bottom of the hour. The American Dream is of a better future, a confident retirement. Those dreams, theres just no way were going to let them die. Like they helped millions of others. By listening. Planning. Working one on one. Thats what Ameriprise Financial does. Thats what they can do with you. Thats how ameriprise puts more within reach. Thats how ameriprise puts more within reach. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. Ask me what its like to get your best nights sleep every night. [announcer] why not talk to someone whos sleeping on the most highly recommended bed in america . Ask me about my tempurpedic. Ask me how fast i fall asleep. Ask me about staying asleep. [announcer] tempurpedic owners are more satisfied than owners of any traditional mattress brand. Tempurpedic. The most highly recommended bed in america. Now sleep cooler with extra cooling comfort on our bestselling tempurbreeze beds. Visit tempurpedic. Com to learn more, and find a retailer near you. Welcome back. Breaking news. Attorney general eric holders is expect to announce 2 billion fine against Johnson Johnson. Kelly, the Justice Department says this one of the Largest Health care fraud cases in u. S. History, involves Johnson Johnson and the offlabel marketing of the antipsychotic drug and a sister drug. U. S. Attorney general holder expected to address the media shortly to talk about that and perhaps many other issues on his plate in a News Conference scheduled to get under way now. The case dates back to almost ten years now. The u. S. Authorities began investigating back in early 2004. And involves again the alleged offlabel marketing of the antipsychotic drug marketed to dementia patients, among others. In the settlement now, there are criminal finds and forfeitures of 485 million including guilty plea by a Johnson Johnson janson pharmaceuticals. So that would make it one of the Largest Health care fraud cases and settlements in u. S. History. Johnson johnson disclosing the developments of this a at various times in the s. E. C. Filings back in august saying it reserved enough to cover settlements but could not guarantee whether some states would stay in this or opt out of it. So the reserves may not cover all of it. I believe we have a chart of Johnson Johnson, see how its reacting on this. A story thats been out there for a little while. So probably not that great of a surprise but Johnson Johnson trade down 69 cents at 92. 68 as we await the attorney general to detail the settlement. Thank you for that. Scott cohen at hq. Obama care live for over a moment and finally getting interesting information on the people visiting the new Health Insurance exchanges. Bertha coombs at hq with more on that. Good morning. It may be another week before we get any enrollment data from the Obama Administration and the white house is warning that the numbers will be small. But interesting indicators out today from a new Commonwealth Fund survey. Fewer than one in five americans who could be eligible for coverage under the Affordable Care act says they actually looked into enrolling at this point. 60 of those polled said they are aware of the marketplace, thats up from a third a few months ago. Only slightly more than half are aware of the avail ability of subsidies. Nose who have explored obama care, 21 have enrolled. Encouraging number as among those who have bought the plans. One in five, younger than 30. While more than half are between 30 and 49. 7 3 , good to excellent health. One in four says that theyre in fair to poor health. New Health Department notes released by a house panel show even as Health Officials encouraging americans to apply by phone and through navigators the system wide problems were impacting those paper enrollment requests as well. One notation from an october 11th meeting said, quote, the paper applications allow people to feel like they are moving forward in the process and provides another option. At the end of the day, we are all stuck in the same queue. From october 21st meeting notes, 3,000 people enrolled through paper applications at that point. Now the administration says, they will be giving out numbers in midnovember. So i guess thats next week. Kelly . Yes, the countdown begins. Bertha coombs keeping an eye on it. Former gop president ial candidate mitt romney sounding off on obama care yesterday on meet the press. In massachusetts, we phased in the requirements so that there was a slow rollout. That way you could test the systems as you went along to make sure there wouldnt be glitches. Perhaps the most important lesson the president failed to learn was you have to tell the American People the truth. And when he told the American People you could keep your Health Insurance if you wanted to keep that plan, period, he said that time and again. Right. He wasnt telling the truth. Governor on that point that fundamental dishonesty has put in peril the whole foundation of his second term. So, how did an administration that was expected to be the most tech savvy get the website to wrong . Aneesh chopra, he joinses n e u good morning. Were you surprised how poorly this was handled. Like everyone including the president we were frustrated by the experience that people have had. The good news is weve got a team in place to work out the challenges. And i think well have a strong showing in coming weeks. When you say we, are you still involved . No, i think about the country more generally. Speaking on behalf thats right. We did make the point that this was an administration that was supposed to be the most in touch with the tech world and most tech savvy and you know taking this into the digital age. Instead it seems like this is a class ic case of government bureaucracy the contractor, the process after that seemed like something straight out of 1990s. What should have been done differently . Any hope for salvaging and creating a different outcome here . Number one, theres great hope. I had the pleasure of working alongside jeff zions, he hired me a decade ago for the Advisory Board company. Jeffs going to bring relentless focus on execution to make sure each and every one of the identified challenges get addressed in a timely and focused manner. 90 days after the law was passed the first of the websites was required to be launched. My successor, todd park, and his team turns out an incredibly impressive healthcare. Gov system the large effort comprehensive catalog of public and private insurance plans ever assembled and built and deployed in 90 days and it is today powering private sites like u. S. News and World Reports Health Insurance finder. Weve had capacity to bring new ideas forward in a entrepreneurial fashion. Thats been the hallmark of many of the accomplishments in the president s first term. This particular challenge clearly theres a lot of review as to what went wrong and what we can do to fix it moving forward. But its one challenge amongst a large number of accomplishments that i think demonstrate the capacity of bringing technology and innovation to public problems. We always see problems when you try to marry various interface and databases, but what do you make of reports that say there were actual problems with code, we were using technology from five, six years ago in the coding of the website. An important point for viewers to know, the complex efforts to integrate social security, irs and databases, thats the data hub, thats been working effectively since day one. Thats the one congressional oversight committees were worried about back in july and frankly was the harder lift technological. Youre integrating legacy systems thats working. Its the marketplace, that which is most akin to ecommerce site thats faced glitches. As you know in public and private sectors largescale ecommerce projects have had their shares of difficulty. As a united customer, i remember the merger had a couple of glitches on the website which made it harder for us to travel but its a footnote in history. Do you think theyll have it up and running in november. Sure. Theres going to be a no wrong door approach. Always built into the law was the idea that webbased entities, in many cases forprofit, some cases publicly trade Online Ecommerce companies will be part of the effort. It will be a matter of weeks i hope the webbased entities will bring more choices to the public in signing up. Aneesh chopra with personal experience in some of the issues. Thank you. Thanks for having me. When we come back this morning, twitter raises the expected price for its ipo. A new poll finds some users are not sure the company will be around in five years. Details on that coming up. Squawk on the street living large in nyc literally. Take a look at our awesome billboard. You like it, dont you . Well, now you can have a photo version of it. Signed by the entire squawk on the street gang. All you have to do is guess fridays nonfarm jobs number. Tweet your estimate to squawk street. Nailthenumber. You have to be 18 years of age to enter. For official rules and details go to sots. Cnbc. Com. You have until 8 29 eastern friday morning. Friday morning. Good luck. Welcome back to squawk on the street. Shares of lin energy going higher. Raised Purchase Price for Berry Petroleum by 600 million to 4. 9 billion. Higher price follows a drop in the price of linn co, a holding company. It dropped 10 since the deal announced last february. Invest ors like the new price tag. With twitters ipo just over the horizon, investors are skeptical about social media. The bells are about to sound across europe. Well get their close in a few moments as europes trading day comes to a close. European markets are closing now. Welcome back. You wouldnt know it from the action today, what a ride for europe over past week. Yes. The big debate, and it is a massive debate, what is the ecb going to say about inflation thursday . What happens if you have the two major Central Banks of the world moving in opposite directions . But lets leave that for the moment. See the green on the screen at the moment. Thats in no small part the data from china was good. The basic resource and mining stocks up higher. Local politicians could be looking to raise the reserve requirement on the big Credit Suisse ubs stock towards 10 . Theyre at 3 or 4. Theyve had a bad session. Hsbc reported today, doing well in the wake of that. Ryanair, dom mentioned it earlier p earlier. Low cost carrier, second profit warning today because they have deflation in air prices across europe. To the point making about the ecb. Also because the other airlines have been much better at taking on these low Cost Carriers and competing with them on price. Ryanairs going to start allocating seating on its flights from february, they say. The others, easy jet, another lowcost carrier. Remember lucent in talking about blackberry here. This phenomenal gain up 200 since the new ceo took over in april. He has decided to take advantage of that and raise extra capital in the market, about 1. 3 billion of share equity at a 30 discount to what the shares were trading on friday. As they basically attempt to shore up the Balance Sheet. This is telecom networking. And sell bits off to the rump of nokia, once they sold the handset business to microsoft. Bob pisani, see what happens moving on the floor. Transports, historic high there. Sideway action. I want to show you sectors, riskier sectors, energy stocks, te stock, materials doing better, outperforming the market. Housing related stocks, a lot of earnings report, volca materials, great numbers. That tripoint deal buying the home Production Unit for 2. 7 billion. Warehouser shareholders own 80 of ittri pointe. Oil down again today, lowest since june, pushing airlines up. Nice moves up. D despited what with ryanair. Goldman upgraded the steel sector. Ak steel up double digits. Thats to upside. Solar stocks, all up today. These stocks move whichever way the wind is blow, thats not a joke. But important thing, Canadian Solar came out with guidance above expectations. All chinese solar stocks you see here are moving to the upside as well. A lot of debate about where were going in the Fourth Quarter and beginning of First Quarter of next year. Credit suisse, ubs, out with notes speculating whats going to happen in the next few months. Credit suisse sticking with 1900 for end of the year. They believe markets could dip as the Risk Appetite is at high levels, bull bear tapering likely in january, theyre arguing. They close, everybodys arguing this point, markets higher six months from now where they are. You get a bit of a pause here in the middle as we have earnings essentially done with. And thats what Credit Suisse has been arguing. Ubs out with a similar note. Great point. More insight on that potentially now from the floor as we look at fund flows. New data showing investors are pouring into equities at a near record rate. Rick santelli in chicago to find out why. Good morning. Good morning. Id like to welcome our guest, charles beaterman, thanks for taking time out of your busy day, clarls. Good to be with you. Clarlharles has i see the do, tenyear close to 260, it was at 247, can you go over stock inflows, bond outflows, what they mean, short term, long term . First, most people dont seem to get that qe is a zero sum game. The fed inflates the available cash by 4 billion a day, 85 billion a month, a 1 trillion a year. Price of Financial Assets go up. Prices of Financial Assets are inflating it makes sense for those who have assets to buy equities. 3 of the 6 biggest equity inflows ever have occurred this year. In october we saw huge inflow, 52 billion into equity etfs and mutual funds. Conversely, theres an outflow out of bond funds as bond prices going down because at some point people expect the taper and when the taper does occur the first impact is going to be on bond prices. You know, a lot is being made of the Government Shutdown, no doubt there are going to be some effects. But it seems as though every economist is listening to the tune of the feds pied piper tunes saying, you know, this is something to deal with in a large way. Your thoughts, how can you back them up . My thought is, is that this is a cover for the fact that the u. S. Economy is weaker this year than last year, nominal wage and salary growth at low point, too. Its 1. 7 in october yearoveryear versus between 2 and 3 this year versus 3 and 4 last year. And why are we Slower Economy . Because of higher taxes that occurred at beginning of the year. Higher withholding and income tax. So the economys making 50,000 less jobs a month now than it did last year all because of higher taxes. So the bottom line is, other than the phillip from very low Mortgage Rates that boosted real estate for a while in the spring, we have a nogrowth or slow growth economy, inflating asset prices, what more do you want . No, that pretty much sums it up. Final seconds, charles, your call for fridays number . Well, based upon our its less than 100,000. Anywhere between 50,000 and 90,000 is whats going on. Remember, this is a survey of 100,000 employers and 50,000 households the results of. It could be statistically any number they give could be 100,000 from reality but people look at each number like it means something. Its the white noise effect. Charles, were out of time. Thank you for taking the time. Were going to kick it back to squawk on the street gang. Rick, thank you so much. Rick santelli. Were days away from twitters ipo but according to a cnbc poll investors are skeptical about investing in the social network. Well tell you why when squawk well tell you why when squawk on the street comes right back. [ female announcer ] youre the boss of your life. In charge of long weekends and longer retirements. Ask your financial professional how lincoln financial can help you take charge of your future. To prove to you that aleve is the better choice for her, shes agreed to give it up. Thats today . [ male announcer ] well be with her all day to see how it goes. [ claira ] after the deliveries, i was okay. Now the ciabatta is done and the pain is starting again. More pills . Seriously . Seriously. [ groans ] all these stops to take more pills can be a pain. Can i get my aleve back . For my pain, i want my aleve. [ male announcer ] look for the easyopen red arthritis cap. For my pain, i want my aleve. Stick with innovation. Stick with power. Stick with technology. Get the flexcare platinum. New from philips sonicare. Up next on the half, wheres the love . Why is one of best rallies in recent memory searching for respect . What does it mean for where we go from here . The latest on the s. A. C. Capital fallout for steve cohen himself and the firm. Plus, ipo, twitter upped its price range. Why you should buy the stock. See you in 15 . Days abay from the much anticipated twitter ipo. The new cnbc poll finds most investors are skeptical of putting money in social media. Kayla tausche has more on that. Most Retail Investors cant invest in the wall street heavy deal from the getgo, a new poll looked to gauge whether Retail Investors would. Nearly half of active investors responded that they wouldnt. But the more surprising fact is more than half of millennials said no. According to august report from pew research 18 to 29yearolds represent twitters core user. Our poll showed they wouldnt put their money there theyre not ready to put money into any stock. A recent wells fargo stock found 52 of mill qulennials were not confident underwriters steering investors towards 2015 earnings as a turning point for the company. Now twitters advertising only makes money when people click on links, retweet favorite promoted content. Half respondents read or lurk on twitter. Its millennials twitter will be able to engage the most. But theyre a fickle bunch. 13yearold knows this, she prefers instagram, less intrusive ads, tons of privacy. Well have to see whether this core user gets more bullish on twitter in the near term. Absolutely. Kayla tausche with details on that. For more on the upcoming twitter ipo, mike vorhouse. Good morning. Good morning. Claire, im curious, if you hear what kayla said how the public isnt necessarily excited about twitter, should they be . Well i think she was talking about a group that is not necessarily very experienced in investing in stocks. Overall the usage numbers look fantastic. So in other words, if were talking about younger teens its probably not right group to survey if you want to know if people buy in. What about investing argument in twitter is a company you should own . Weve seen Great Results with facebook and linked in and the wrong run remains to be seen. Social media is a fact of life. Its no longer optional. Its become a core part of how businesses go to market. Mike, interesting question, though, whether twitter will have the scale of a facebook, for example, you know, as much as facebook is derided for having your mom or grandma on it that translates into dollars. And will twitter be as successful if it done have that reach . Twitters growing, nicely we see, in our data in the United States. Its continuing to grow abroad. International growths going to be hugely important. But what youve got to remember about twitter, its up to 4 of american internet user, its between two huge explosions in the Digital World. Because you have visual, you have photos, you have video, thats what people want. You have mobile. You have the tablet and the smartphone. These are powerful. Its early in the days of the power of the forces. Mike, what do you think it needs to look like if not the way it looks today . Well, i think youll see a number of other ways to monetize. The biggest thing youre going to see right away continued improvement in ad products. A number of introductions from twitter, theyve got a very big and qualified ad Product Development team. Theyre dev team in general is excellent. Other native ways, new cliche, today in the Digital World for advertisers to be worked in. Consumers find advertising on twitter relevant, interesting. Emphasis on advertising. There will be some peer to peer exchanging going on, theyve got a lot of monetization tricks they can work on over the years. Clara, is that what matters here . That that story is intact . In other words, people can see the path between now and ways theyll continue to monetize, or is it more of the metrics how many users they have, how engaged they are with the website . I think the former. If you look at trends that mike talked about not just mobile, not just the millennials and teen user but was whats happening with the multiscreen advertising engagement thats happening and with the super bowl being a prime example of this. Twitter is well positioned to not only capitalize on but take lead in these trends. Mike, the pricing here, you know, at the range that theyve outlined and also the early estimates weve seen from smaller shops, do you think that sounds reasonable . Is it on the conservative side . Is it right to up the range of the ipo if theyve gotten the interest . Well, i wouldnt be surprised there are a lot of people on wall street who dont fully get twitter. He think its all about an envelope with 140 characters and they dont understand that inside its actually pictures and video. So i think theres a misunderstanding about what twitter is today. So perhaps those numbers are quite right. Im lucky, i dont have to set stock prices. Im focusing on longterm consumer trends. Weve seen the service that twitter adds to the world. You dont have to open the envelope to show the picture. Mike and clara, thank you for your time. Appreciate it. You might not know our next guest but probably seen his companys products. The power strip that pivots or the trade that tells you when your eggs are about to go bad. Part of everyday products. Today you can find items closer to home. The companys ceo when you come back. Todays squawk break through, a crowd fueled invention plats form where users work on ideas together to create a product from concept to reality. Today, quiestioning,y and ge ar launching five products in a partnership called wink. Ben koffman found somewhere ceo and founder of mofi and joins us at post nine. Congratulations, ben. Thank you. Very big news. No bed, bath and beyond but home depot is retail partner. Good to flow. Lets go through a couple of them. Walk us through the power strip. A couple years ago a kid in u. S. Wisconsin came up with an requested of a pivotal power strip. This is a smarter version of that same product. So you can turn on and off each outlet with your phone. Wonder why theyve never been designed that way. It allows you if you have floor lamps or space heaters, want to turn it on and off at certain times schedule it with the app, get to it. These are all smart products. Quirky has a ton of different household i tips but whats u neeg, a unique they connect to your phone. All of these things are smarter because of their connection to the internet. How can you possibly make a piggy bank smarter. My favorite thing ever. This is porkfolio, the portion version. Put coins in and it counts how many coins you have. You can set a savings goal, this kid, being me, has it set to 50, you can see its 75 cents now but the graph will climb up to 50. Were training young cnbc viewers how to save for the future. You have to implant the video on the side as well. Exactly. Nimbus . Its a personal dashboard for your digital life. You want to track emails or instagram followers. Its a set of four dials you can track Different Things that are perform. This is off, its not doing much. Imagine each one of the dials moving based on whats happening in your Digital World. This is the internet of things manifested. When people talk about 50 billion connected devices were seeing the beginning of a trend in which household items, car, Different Things you might be wearing ultimately are all online. Exactly. Communitys coming up with ideas for things they would love to be smarter and controlled by an app and the internet. With our partnership with ge were able to create cool thing likes this. We kicked off this Partnership Six months ago and have a full product line in every home depot and best buy in the country. Egg minder . Funny one. This is a divisive product but its superawesome. At market, people want to know, do i need eggs . Pull up the app and see how many eggs you have left. You know whether or not you need to buy eggs. How does it know . Weight . Light sensors. How expense everybody are these products . Theyre more expensive than your average product. The piggy bank is 70. Its 50 sensor here called spot that can do all sorts of things in your home. Slightly move expensive. Were finding it costs an extra 20, 30 on a regular retail price to put the internet inside of something. What about your own business . If people like this idea and want to invest, tell us about how that platform has grown and developed. So our communitys a collaborative platform where anyone can create a product idea. If the ideas good, by sort of a jury of enough votes and stuff like that well did all of the hard stuff, right . We did all of the manufacturing, retail sales and stuff like that. You take a cut of the product after that . We own the communiproduct an Community Gets royalty. Well make over 1 million in royalties. Were making millionaires at quirky. A percentage of sales. We share 10 of sales back with the world. Love it. Certainly one way to get people, carl, innovating in the time when the economy frankly needs it. Good for ge for playing along. Awesome. Theyve been a great partner. We know them well. Ceo, founder of quirky with some products here which i dont think well keep. Ive got holiday ideas. Go ahead and buy them. Shares of blackberry plunging today it will abandon plans for a seal. Heins will step down as the Company Looks for a replacement. This mornings squawk on the treat. Write the help wanted ad for blackberrys ceo search. Well air your responses when we come back. Welcome back to squawk on the street. Check out shares of kelloggs the Consumer Staples cereal giant up in trading after beating earnings estimates but lowering its forecast. Wall street seems to like the idea that kellogg is getting its cost back in order. They are cutting 7 of their global workforce. Thats over 2,000 jobs. So, again, probably good newses is bad news, bad news is good news for kellogg shares. Up on the day. Tweet time. Shares of blackberry plunging as the smartphonemaker confirms it will abandon plans for a sale. Thorsten heins will step down as the Company Looks for a replacement. We asked you to help write the help wanted ad for blackberrys ceo search. Dan writes, hani mans dream here, real fixerupper. Kelly writes, searching for elon musk style ceo. Must be a miracle worker. John writes, blackberry position seek very interim ceo. Not bad at all. Well watch the shares. They were down earlier, almost double digits on the day. A couple of interesting moves in the energy space. Nat gas taking a hit as we see weather pat earns take place. Aaa saying yearend average should be about 3. 10. Wow. They dont see it cracking below 3. But at 94. 58 a tailwind for the consumer. What happens troubling the consumer confident isnt better. Reminded with food stamps, Everything Else going on, its a tough period. Americans lost their food stamp benefits as of the end of last week. Dont forget, the press conference with Preet Bharara 1 00. We get more questions answers regarding the settlement with s. A. C. Capital. Over to headquarters and collect in with scott wapner and the halftime. Thanks so much. What were following today. Sacked, steve cohens s. A. C. Capital in a record settlement with the feds, now kate kelly has the latest on what happens to the firm. And of course its founder. Tweet this, twitter ups its ipo range. Traders weigh in on whether theyd buy the stock when it opens for business. The markets heading into the final stretch of the year looking for more gains. Surprisingly, still looking for love. So, why is one of the strongest rallies in recent memory still searching for respect . And what does all it mean to where we go from here . Halftime. Pete, wheres the love in the rally . I think it doesnt really take a lot to find some of the