Transcripts For CNBC Fast Money Halftime Report 20240714

The day. Halftime report starts now. Welcome g good to have you with us our Investment Committee at the table today. Also with us on set today is cnbc senior economics reporter Steve Liesman in a few moments, as you heard, joined by adam bain stocks focussing on the fed. The twoday meeting underway why they expect to cut rates tomorrow the question is as we asked at the top, is it the week that sets stocks on a course for a new milestone or not its possible i want to be constructive here so if youre looking at if youre looking at technicals, you can say, okay, for the First Time Since last september, youve now got 72 of the s p 500 above the 200 day, which means more than twothirds of stocks almost 3 4 are in their own structure bull market. That happened last october i dont know how forward looking it is. It is a positive especially when you consider the fact that were getting participation from across the market its not very narrow its very broad. That being said, theres junky retailers that had a monster move over the last couple of weeks higher all of that is now falling apart rolling over the big energy boom we saw yesterday, those stocks are now softening. So its not as good as you would want it to be. Youve got maybe a buyable pull back in the home builder look around the market and say, all right, yes we look good yes, were close to a new high but some of the stuff that has gotten us here is starting to back of. So i want to be constructive i feel gun to my head, i think we get a new high. I dont know how meaningful it will be absent strength in some of the key areas. Its been, you know, fed induced. A large part that has gotten you knocking on the door of a new high not that far away at all is this the week that pushes you over or pulls you back because we didnt get what we thought we were going get come tomorrow well, i want to focus on the economic data. In the last week and a half, i feel better in terms of today we got industrial production, we got good housing data, we had great retail sales, Consumer Confidence so those recession fears that we have been talking about for the last month and a half go away. Bond market. Yeah. That helped change the narrative a little bit. Yeah. Right. We were thinking recession was coming in the next six months. And i think youre looking at 2 growth not booming not 3 growth but 2 thats fine. Given where Interest Rates are and evaluation are maybe we could see new highs bigger question, does the rotation continue . Weve had growth into value for the last month does that continue i actually think you need a 3 economy for that continue to work maybe to joshs point, we rotate back into some of the secular growing names over time. You know its an interesting point of view. Because, you know, theres a reuters story on a survey value fund managers. Even they dont think its going to last. Yeah. And theyve said how many times have i heard it before theres a run into value stocks. Yeah. It hasnt materialized for any great length of time. It doesnt sustain. It happens. Because of why youre going there. Right. Why are they going there theyre looking for a safe place. Not necessarily high but a safer place. I think when youre talking about the speed of the rotations were seeing in the market, scott. Thats the amazing thing now take a look at Oil Yesterday on the huge spike to the just side. Now a pretty significant move to the downside i think somewhere close to 5 . Yeah, this is the market weve been all year. 2019 has been this incredible rotation that has gone with velocity at all times. Moving from one area to the next to the next. I think the one area you can stick with is even though weve seen somewhat of a pull back when you talk about growth sometimes over value, i look to these Growth Stocks because there are so many that give you value with the growth with great management with a dividend yield and a low pd theres a lot of different ways to dissect what we talk about when we talk about growth. Im not talking about those with the 200 pe im talking about the names that continue to work to the upside with slight pull backs here and there. Whether its apple, microsoft, intel. Theres all kinds of different areas of the market now that continue to be the places to be, i think, going forward. All right. I agree, also i think you have to think about the growth and value weve had the discussion for decades. We have. Yeah. They were saying jpmorgan saying theres going to be a more meaningful move from growth to value. I think if you look at individual sectors like financials which are in the value sector. Energy. I think financial specific think gets tough to get multiple expansion if rates consistently go down over the next year and a half i think in momentum you look at the individual names, you know, is mastercard and visa a momentum name or financial name . Both and momentum and mastercard have been doing well. I think for investors, they need to understand that tomorrow, after the fed raises or lowers rate, it will be managing expectations and im quite sure that algorithms will i did second every single word that jay powell says and markets will react accordingly. I think tomorrow is important for investors just to be patient and sit through and dont try to trade around the words of the algorithms will instantly do because thats how investors get whip sawed. The words that Steve Liesman is paying close attention to as we said, hes with us where are we heading into tomorrows decision . Overplaying our hand a bit how the market expecting a lot . Will they get it all i mean, they want rate cut they want signals youre going to get more. If the markets expectations are aligned with what i think the fed told us theyre going to do, i dont think anybody has a reason to be disappointed, scott. I mean, if youre sitting theyre going to bring the rate down to 0 or 1 , youre going to be disappointed tomorrow thats not the guidance youll get. Pretty sure one of the questions is going to be, mr. Chairman, is this still a mixed cycle adjustment somebody might ask that question it might be an interesting way how he might answer it it was the phraseology that caused people to run for the hills. For the record, the market came back the next day as people started to realize it could be up to three rate cuts that happened pretty quickly. People ended up being cool with that so the thing i think tomorrow is youre going to get a quarter point cut and a well see. Remember weve had the dilemma for the fed which is still out there theyre happyto address the fallout from the trade war and trying not to enable it. And i think thats the kind of dance that powell is trying to do here. Not to give a green light, go ahead, mr. President , put on more tariffs only if there are clear and obvious repercussions or fall out to the economy from the tariffs, we will expost address them. The repo story people are talking about today. Yeah. What do you make of it . It seems to be the market is taking it as its more technical maybe than worrisome. Right. But worth paying attention to. Right so there are some of the reasons. Rates in the short term overnight repo market spiked there was a big Corporate Tax payment on the 15th. Theres been some treasury stuff on the back end. And the concerned about the year end Balance Sheet funding is out there. Let me try a simple analogy here you ever call the plumber. You got a leak then he comes over and he lets a little air out of a system and all of a sudden everything works fine thats what they did the fed came in and did a liquidity operation this morning. Put 53 billion into the system. Things may have settled down they may be okay the pipes are okay. Or it comes back and says, no, you need a new pipe and theres stuff all over the floor in the basement. Thats what happened to me theres two oungs. First, its like a 75 fee and the other is like 4,000 in the financial crisis, it was the latter it was there was stuff all over the basement floor. Theyre there for like three months. Yeah. It was a sign of real concern in the market and people werent trading with leeman and all of a sudden this looks like a technical thing that has to do with where the treasury keeps its money, the tax payments, and the fed operating with a lower Balance Sheet. Stay tuned, folks. I cant tell you to run for the hill. When do you run okay. So tomorrow were going to look at the overnight funding that the fed fund rate sets again its set toward the top end of the range. The fed came in and maybe moved that down. Well see what happens do they do another operation tomorrow and the next day . When the inner plumbing seizes up, its when you worry. You got to go over to your neighbors house take a shower. Its probably going to be powell thats when you got to worry. Im trying here, guys no. I dont want to Corporate Tax payments and the treasury general account. Powell will be asked about it tomorrow, more than likely so, you know, someone will ask him. He takes enough questions. You might have two or more tomorrow stefanies ideas are not stefanies alone in the sense im sure they are shared by several members of the federal Market Committee they look at the same data step and they come up with a similar conclusion i got retail sales and record low unemployment rate. I got stock markets i got stock markets knocking on the door. I got wages rising on 4. 2 over the last three months and cutting rates . Are you kidding me youve been pounding the table. Yeah. And calling for that and, steve, you know when rick said a couple of weeks back on the show, rick said, hey, the two year is what the fed moves the market is out there on the 10 but the 2 year is what they can control with this kind of movement we expect tomorrow and i expect they will and i expect itll create greater distance. Thats when i was saying when they inverted and finally are getting closer to addressing that, scott. But to petes point, at the top, as far as, you know, you had this huge unprecedented move out of crude oil weve never seen a 20 percent move out of crude oil before in a single session like that from sunday night until yesterday. And, obviously, it bled off quickly. There were folks that were talking about buying into that and thats ludicrous to buy into Something Like that. It makes a historic move and youll buy crude based on that thats a great way to, you know, might as well set your money on fire or send it to me, instead better idea yet. Im thinking that theres a lot of folks out there who were much are many nervous a few weeks ago, scott theyre less so now. And i dont think powell will give them a reason to be more nervous tomorrow. Last point. Last point josh is sitting over here saying what do i need to know about this do i really care and i think the story is this, is the fed going to screw it up and i think the answer is no. Screw what up announcement tomorrow i think it gets your quarter and you get your possibility of more, if the data comported okay. You better get a clear message this time if theres criticism of powell and maybe you didnt get it just clarity give us your move, give us clarity. We have some big guests on the other side heres whats coming up. The big bet on space. Virgin galactic expected to go public later this year a meeting with investors today the companys ceo along with social capitalist join us live from mo vhave, california that exclusive coming up in two minutes on the halfte po imrert so servicenow put your workflows in the cloud, huh . Mmhm. Your employees must love you. Thank you. Ah, you could say that. So how are things with you guys . Great. Thank you. Thank you, sir. Lunch next week . Terrific. Say hi to the team. Will do. Call my office, i will. Sounds good. Alrighty. Servicenow. Works for you. Welcome back Space Company Virgin Galactic plans to go public letter this year after they emerged with Chamath Palihapitiya galactic is holding an investor day today. Were joined by Chamath Palihapitiya, Virgin Galactic ceo George Whiteside good to have you with us thank you for being here today. Thank you. Yeah. Give us an idea of what is happening out there. How many investors you have and what youre showing them well, this is an opportunity to sort of showcase the supply side of the business and opportunity to show some of the most important blue chip investors, hedge funds, mutual funds. What these guys have built spaceships and the ability to take people to space so were spending the day touring the facilities here and fly people to new mexico and show everybody the newly unveiled space port where theyll be running commercial operations and then, you know, gearing up toward the fall and beginning of commercial operations next year. We talk about the investors who have come out there to see the operation. Th they, like, everybody else, wants to know when the deal is going to close you know, when is it going public when can we expect it . We announced the deal in july, which is is a merger between social capital or ipoa and Virgin Galactic. Were in the process of closing the transaction and we think the mergershould happen within q 4 okay. And, george, you hit a milestone. Everybody likes looking at rockets over your shoulder theyre there for more than sort of design. You actually hit a milestone today in the development of your second spacecraft . We did, scott yeah today is an important day for the company. We announced the fuselage and wing box have been mated together along with the boom for the next spaceship the one behind us has gone to space and the one behind that is our next spaceship, which will bring additional capacity to the business, and were making a big step forward in the manufacturing process with the announcement today. George, last we heard, you had like 600 people in 60 countries, about 800 million in deposits can you give us an update where we stand today that was some months ago where are we today yeah, weve had a soft close on sales for the time being, but weve had over 3,000 people try to register their interest in coming to us and flying to space with us. Thats just since the December Space flight so its just been amazing the amount of interest weve been seeing just hundreds and thousands now of people who are interested in flying to space. George, theres a big debate on what the total Addressable Market is here i mean, obviously, you got to have a lot of money to buy one of these reservations to go to space. How big do you think it can be when i see estimates that talk 20 billion. Yeah, i mean, i think the market sizing theres a bunch of estimates. We thinkits going to be a capacity constrained market for years to come. Even if were wildly successful. Were only going to be able to service a small fraction we estimate roughly. 1 of the global Addressable Market in any particular year. The good news with the market, its a huge market basically everybody wants to go to space the number of people in the category is growing at 6 per an em its a very large and growing market and were feeling good. Chamath palihapitiya, you mentioned what youre doing today with these investors, you know, im sure its going to be a fun day. Theyre going to see great things, but at the end of the day, theyre going to want to know their investments are going to pay off this is kind of like an ultimate moon shot, if you will how do you convince them of that well, i actually think this is one of the safest and most interesting investments ive ever made. In fact, i felt so confident after doing the diligence i decided to invest an additional 100 million of my own money and the question is why. What i saw was a hardware business and you can see some of the hardware behind me but with margins that look like a software business. So Gross Margins approaching 70 . Its a kind of business that is rare and unique. Very difficult to build. Not a lot of competition incredible amounts of demand very constrained supply. Huge margins so i dont think its a moon shot at all. In fact, i think this is one of the most interesting value laden investments ive seen in a long time. George, your road to profitability is what . Can you give us an idea of what kinds of things youre taking your investors through today that leads them to believe this is going to be a good endeavor yeah, well, as he said, we expect to go into commercial operations next year and its a question of ramping up the flight rate and adding a few more vehicles we think were going have a tremendously profitable business within a couple of years. Guys, its been good having you. Chamath palihapitiya, you sit tight. George, well talk to you soon enjoy the rest of the day. Up next, well be joined by adam bane joining the conversation with Chamath Palihapitiya when we come back on halftime. Do you have concerns about mild memory loss related to aging . Prevagen is the number one pharmacistrecommended memory support brand. You can find it in the vitamin aisle in stores everywhere. Prevagen. Healthier brain. Better life. My Car Insurance to geico. This is how it made me feel. It was like that feeling when you pull your green sock out of the dryer and then the very next sock is the other green one. And then you pull out two blue ones. And you keep going till youve matched every single sock in perfect order. And the owner of the laundromat is so impressed, he hangs a picture of you next to the dryer. Geico. Fifteen minutes could save you fifteen percent or more on Car Insurance. Welcome back everyone. Im sue herrera. Here is your cnbc news update. Saudi arabias king is holding the weekly Cabinet Meeting today. He called on the International Community to shoulder its responsibility in condemning the attackers of its oil field facilities the government repeated its accusations that iranian weapons were used in that attack 26 people were killed in that bombing target Campaign Rally of afghan president ghani in northern afghanistan. Another 31 wounded ghani was not hurt but this is coming just before 22 more people were killed in a taliban suicide bombing near the u. S. Embassy in kabul Nbc Universal direct to Consumer Streaming Service will be called peacock in homage to the Networks Logo when it launches in 2020, it will have more than 15,000 hours of content, Nbc Universal is the Parent Company of cnbc and jeopardy host alex trebeck said he had a set back in his battle with pancreatic cancer and undergoing chemotherapy again. He made the announcement on abcs good morning america. The 79yearold Game Show Host announced in march he had stage iv pancreatic cancer we wish him the best of luck that is the news update this hour scott, back to you. All right, we do, sue were back with Chamath Palihapitiya from mohave, california joined by adam bain the former twitter coo and Virgin Galactic board member and investor. Good to see you. Great to see you, scott. Could have invested in a lot of stuff but why this one . Well, its great to be back on cnbc and probably one of the better backdrops that youve ever had on Halftime Report. Not going to argue that. As an investor, one of the things i look for is Iconic Technology centric businesses. You cant get anymore iconic than virgin and richard branson. You cant get anymore Technology Centric than putting people back into space and coming back down again safely so from my standpoint, this is a no brainer because its such an interesting company. As we started looking at the company, the opportunity for revenue. Theres over 600 people that paid money already for their ticket Chamath Palihapitiya and i are two of them. Its a really compelling company. Let me ask you, lets broaden the conversation out to some of the things weve been seeing in the valley with evaluations and the obvious story to ask you guys about is the delay in the wework ipo you first, Chamath Palihapitiya. When you see wework, and what happened over the last couple of weeks, what is your take well, i think if you play the narrative of wework backwards, it is a tale of three Different Things i think its undenial theres incredible market fit for people who want Flexible Work space but then the problem starts to get a little bit kgrayer the second part of the story is the Business Model trying to make money from the Product Market and thats unclear and dubious. People will say it can get to scale. I think thats a little bit tpd and the profitability is unclear when you look at the competitors. All of that you can probably overcome the thing you cant overcome is the third part of the story. Its a tale of failed governance and almost at the highest order, short of something project thats something quite a shame in something i think we have to address as an industry if were going have credibility with the Public Markets. Safe to say you wouldnt be investing in wework . Well, i think that if i were investing in a business like that, i would want to see levels of control where theres fiduciary responsibility on behalf of the executive team and the board and the investor base. In the absence of that is a Public Market investor, i feel like making a bet that has too much risk or not enough return so from my perspective, im watching from the sidelines. Yeah. I mean, adam, i wonder if you agree. I mean, you know, when youre in twitter, its not like you had the same level of governance scrutiny, obviously, but youve been with the Young Public Company that had to endure investor scrutiny. So im wondering for you can sort of opine on that and what you see from the weworks situation. What is your take away from that well, my big take away is that the news today just means that the Market Conditions werent right for elevated consciousness. So, look, both are not Technology Companies so i think this is a real estate company. Its got an interesting comp of Profitability Company that has been around for awhile its got about a 3. 5 billion market cap its iwc and i think that, you know, when investors took a step back and looked at youre paying for a huge amount of growth at wework, which is certainly delivering on, but it looks like theyre pouring money into the funnel and not getting it out in turns of return yet. One thing i would say yeah one other thing i would say is what he touched on which is it is interesting this is probably one name where the investors and the customers are so far in disagreement when you talk to customers at wework, they love the product. So they have Product Market fit from a customer standpoint the Public Market investors, so far, have begun to speak out both around things like governance. Its an interesting thought im wondering at some level if you think what weve witnessed with wework is in the context of whether the market itself so overvalued in the valley if this is the way its supposed to work. That its actually good there was so much scrutiny about this before the company went to the Public Market that its the Public Market investors, maybe in this case, are not left holding the bag. The market has shaken this thing out. In fact, i think it has actually a good thing what happened i think it allows us to actually see Technology Investing in private companies for what it is which is a popularity contest, essentially, at the end of the day. When theres so much money to be put to work by so many different pools of capital, at the end of the day, founders can pick the people who are willing to basically give them exactly what they want. And what they dont generally want is the truth and sometimes really tough advice and sometimes really tough guardrails and so in those kinds of environments, we seize only on their ability to be popular in the eyes of a founder. So itspretty natural that you would have seen a decaying of governance democrat last five or six or years as the amount of money going into venture has quadrupled so the thing we have to ask ourselves is what did we expect to happen . This is probably what was going to happen anyways. Now the question is, how can you course correct if you cannot, as you said, its up to the Public Markets to draw a hard line in the sand and say enough no more. I wonder about what it says about where we are right now, adam i want you to listen to your twitter pal who was on with me last week and had this to say about the current environment. You can react to it on the other side. Frothy. [ laughter ] yeah. Word association frothy. Just think late stage private evaluations are quite high its just too crazy now. And, you know, its got all the sort of hallmarks of that 2000, 2001 which youre like this is getting crazy. Cant keep going. Yeah. It does it feels like that with just the prices youre seeing being paid for things that dont even feel like theyre working at scale yet. Adam, is dick right well, look, i would hesitate to say the four magic words that this time its different what i will say is taking a step back, the lead into the conversation was around wework ill give you a twist to that today, which is data dog, i think, lifted the price on its offering so i think you are seeing strong Technology Companies with strong go to market, good Revenue Growth it was 100 year in year Revenue Growth for the first half last year of this past year is about 86 growth or so so youre seeing strong Revenue Growth Good Opportunity for profitability. So i think for software companies, you know, theres still a long runway ahead. You look at zooms another great example. A company i think has performed well over the metrics, even though the market hasnt respond responded yet. What do you think about what was said about two years ago, i started to take a hard look at private market investing and made a difficult decision to basically do fewer deals and more concentrated investments. And the reason is because i just saw the rates of return in private investing decaying very rapidly. To give you an example, from 2011 to 2018, had you just invested in the s p, and reinvested dividends, thats almost 16 a year rate of return theres some leak data yesterday about some very prominent venture funds. What you saw was their returns in the low to mid teens. You have to ask yourself a question why would you block up your money for ten plus years in a very turbulent private market investing ecosystem to generate twothirds of the return of a highly liquid public Stock Market Index i think the answer is you would. So you know what it says is is privati private investing is difficult even now theres so much money at play, evaluations are out of control. From my perspective, it was pretty clear that the best days were probably behind us and you had to be much more selective and much more concentrated if youre going to have a chance of generating a reasonable rate of return. Hey, adam, i left an elevated consciousness joke we thought it was funny here. Thats josh brown for you. Thank you, adam. I wanted to i wish i could see the kicks today, adam. They are cut off at the bottom i want to ask you guys about something that Chamath Palihapitiya messaged which is too much money thats the root of the issue i dont think adam newman would have gotten as far as he did if he didnt have an entity like the vision fund using saudi money to basically bid themselves up. They invested 10 billion and then invest again at 20 billion and say were up 100 on the wework investment. If you dont have dumb money coming from, lets say pensions, making their first ever venture investments, and the big pools of capital from sovereign wealth if the money doesnt exist, nobody gets enabled to the point where they can resell the name of the company back to the shareholders for 6 million or lease their own buildings to, you know, like, i think all of those abuses stem from this idea theres too much money you guys agree, though, that its mostly due to the fact that everyone is looking in the rear view mirror and theyre saying, well, we need to hit this 9 bogey and were not going to raise taxes or anything so the Investment Fund has to do it where can we get that . Oh, look private equity ten year returns. So thats enabling and driving all of this money into these conversations about first and second round what do you think about that i want to be clear, a lot of 10year returns are actually still not realized the great fallacy about this, all of these are paper returns, for the most part. This is the game that one can play with irr internal rates of return and, you know, a great investor bill gurley has a great phrase, which is you cannot eat irr. And you know what hes trying to say is until the money is realized and in the bank, anybody can make up anything in the last five or six years, weve literally begin it upped the amount of money going into private money investing. So the average question would be, well, is the number of outcomes buy backs, is the amount of money in value created buy backs . Unfortunately in the five year window, its improbable thats the case so what youre going to continue to see are paper profits, marked up gains, and funds that quickly become not about generating profits and realizing profits, but about generating fees by raising new funds. And thats why you have things like soft bank play out. You have them invest and the Parent Company able to market up they look like they have huge paper gains. They can raise another fund. Almost 2 on 100 billion is 2 billion. Thats a lot of money per year you can take off the table why wouldnt you do it adam . Yeah. The other thing that were seeing in private space is incredible barbell on both sides of the equation. The super early staging have so many investment firms that have been fired up to go after early stage. You see evaluations there all of a sudden get very overheated and now at the ultra late stage, first, with the vision fund and all the follow on with that. Raising other large found try to match. You now have are sitting in on a situation where do you find value . At the early stage its overheated and the late stage, as were seeing, is overheated it puts the private market in a peculiar situation i think theres an opportunity for the gap in the middle between the two barbells its, you know, when these Companies Hit Product Market benefit and theyre just starting to scale. It seems like that is the one opportunity that exists right now in private tech markets. You mentioned bill gurley a few moments ago he struck a nerve or a cord, really, about the comments he made about the process of going public whether an ipo or direct listing, as you did with slack lets listen to gurley and react on the other side. I think Silicon Valley has been on the bad end of a bad joke for about four decades now. In terms of the way the traditional ipo process works. Over 39 years theres been 171 billion for Silicon Valley companies. Its been increasing lately. Just year to date, we were at 6 billion in underpricing. No one questions who the two best investment banks are. It turns out if you go with the best investment bank, you get the worst execution. I dont know if he made many friends with that comment there. Do you agree with him . Completely 100 if you add more precision to what bill said, the specific data, i think, is roughly the following. The two big underwriters of tech ipo are Morgan Stanley and goldman sachs. They misprice one in three times. They leave about, you know, a lot of money on the table. I think its approaching a trillion dollars over the last 20 years collectively. When you factor in the fees that people pay, so if you think youre underpricing a third of a time and paying 7 fee to go public, you have a 40 cost of capital. That 40 cost of capital for a tech company is probably more than north korea or iran or venezuela. So you have to ask yourself, like, what is going on here . What is going on is that Tech Companies and founders have thought they were the customers of wall street but theyre not the Real Customers are the long only funds, all the folks who are repeatedly buying stock over and over again and what Tech Companies are is so unless you break that system. What youll have is a repetitive underpricing and the people that pay the price are the employees of the companies and the founders of the companies and investors of the companies are going to constantly be leaving money on the table and the people who will be getting it are the people who showed up at the last minute who had a completely different relationship with these banks that you know nothing about. Its not as though the companies that have gone direct listing have just, you know, shot to the moon, though im wondering what you make of the performance of the companies that have gone public through direct listing versus some that have gone through a traditional ipo process. It hasnt been all, you know, roses and birthday cakes. None of this is to excuse Business Model quality and performance and discipline and Operational Efficiency and doing the right thing and extrapolating Product Market this is nothing to do with that. This has to do with how do you make sure that you, as a company, are properly financing the business and the whole point on ipos that bill is making is companies who need money are leaving a lot of money on the table so i suspect that all these companies that went public probably would have found useful uses for the trillion dollars that they left on the table by working with the large traditional investments. Adam, your thoughts on the same question. The direct listing i feel like weve got this developi developing war is too strong of a word but the valley versus wall street well, look, i thought the gurley piece was some of the most compelling business tv ive seen in a long while it was sort of like the very end of the usual suspects where you, all of a sudden, see what is actually happening before your eyes he plays a lot of poker. Theres the line if youre at the poker table looking around and wondering who the sucker is, its probably you. And i think bill basically showed that with data. In fact, i texted bill after he was on tv and i said that was incredible what you said he actually said, i didnt say anything i showed data. Look, to your point around the performance of direct listings versus a traditional, i will use a company like zoom or a company like slack both of them beat their numbers, raised their guidance for the year, and still got crushed by investors the day after earnings so i dont see much of any difference overall in the Market Performance post earnings or post the First Quarter the fact of the matter is, both of those companies are super high quality businesses. They just chose to go out public in a different way i do think you know what you are seeing is this emergence now of traditional ipo, which, obviously, has a bunch of benefits to the company, including it actually brings capital on to the Balance Sheet for the company or direct listing which also equally has interesting benefits we also think, by the way, what we did may be the interesting place in the middle. Which has some benefits of, say, the direct listing but also brings capital into the business, as well. So it may be the case youll see a spectrum of these opportunities in front of founders and the boards to make. I think thats great news for them to have choice, ultimately. Chamath palihapitiya, ill ask you the final question i know you have to run to investors to do your thing today. We alluded to this earlier, and it plays into the wework story has soft bank been a force for good or force for evil in the valley i think generally a force for good reality is founders have been able to find a ready source of capital. From the perspective of innovating on things, they had been there the question about whether its going to leave a great Lasting Impact in the ecosystem once its under a billion dollars it put into the ground. I think theres a huge question mark and the problem that its going to create is we have created a whole class of capital hungry companies who because they could have raised, you know, 200 million did when they should have raised 50. Theyll find a way to spend the 150 million i suspect the product wont be 150 million better. I suspect there will be more fancy food in the offices and la croix i think thats the tragedy of what is probably going to happen and over capitalized companies will still spend the same amount of money and the same amount of time if you give them more, theyll be more wasteful because its hard to drive an amount of money through a software business. You can only write so much code. It can only do so much you can only hire so many engineers at a given rate and still be productive. So money doesnt change that unfortunately, what weve done is weve extrapolated the expectations of founders to expect to have 200, 300, billion dollars in a funding round when a lot less would have served them better. The real last question to adam you think as a result of this, adam, youll see companies go public earlier sooner were certainly not seeing that today were seeing Companies Staying Private much later the mope, of course, they come out with Higher Quality revenue stream and Higher Quality Business Model certainly jury is out on that. You know, it certainly is the case that if you go all the way back to the facebook ipo, there were a set of people that were hoping that they either went out much earlier or much later i think its really hard to time ultimately businesses. I do think there is an opportunity, if you go out in the earlier side, for investors to ride the wave with you. You made a lot of time for us today. We appreciate it we hope to visit with you again soon. Great to see you. You, as well. Chamath palihapitiya and adam bain joining us. Coming up, more big name guests ahead Tillman Fertitta on power lunch today first, though, your Energy Trades as Oil Prices Drop 5 ll have unusual ctivity, as we the guys getting ready for that. Halftime back in two minutes [beep] you should be mad your neighbor always wants to hang out. And you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Markets. The business of trading goods and services. Nasdaq operates among the largest markets in the world. And our Technology Powers markets from indonesia to chile. Great markets are built on a foundation of trust and integrity, forged through leading Edge Technology and a smart regulatory framework. As technology advances, regulation must keep pace to allow the markets to evolve. Today we see an opportunity to modernize regulation, to make markets more accessible to investors and entrepreneurs of all sizes. From the graduate buying her first stock, to an institution investing in thousands. The markets belong to everyone and stand as a symbol of economic advancement, social progress and limitless opportunity. Thats the tomorrow that we envision and to get there, well have to rewrite it today. Welcome back to the Halftime Report im see inma mody. Crude oil took a hit after the record that saudi output will return to normal more quickly than expected. Lets bring in our trade erstra. How quickly will the oil market get back to normal saudis are talking weeks rather than months and i tend to believe them because i think that they lose a lot of credit and before the aramco ipo if they cant and because much u. S. Fracking, oil prices were sliding significantly before this attack and so where do oil prices go from here in saudi production really does come fully back online within the next two or three weeks . We see lower highs being made in the market and these last few days is an example we saw the spike, couldnt get above 65, 66 and now falling below 60, to me it says hedgers are out there, u. S. Producers action there is enough supplies on the market. If saudis were to go away or there is another attack, there is enough supply to pick it up and sell oil above 60. So i think the geopolitical risks will put a floor so below 50, i dont see that happening anytime soon but watch the bear market here wti holding on to 60 a barrel anthony and brian, thank you catch the live show at the top of the hour. Well be joined by blackstones take on the market halftime returns with unusual activity right after this. This is my headquarters. This is where i trade and manage my portfolio. Since i added futures, i have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. In the human brain, billions of nefor people with parkinsons, some neurons change their tune, causing uncontrollable tremors. Now, abbott technology can target those exact neurons. Restoring control and harmony, once thought to belost forever. The most personal technology is technology with the power to change your life. Welcome back im phil lebeau. Take a look at shares of General Motors the company is shooting down a report out of politico which broke within the last hour, that report suggesting that the white house is looking to get involved in the uaw and General Motors contract negotiations effectively trying to end the strike or help end the strike by getting General Motors to agree to reopen the lordstown, Ohio Assembly plant but a spokesperson says there is no involvement in the white house in the negotiations and it is strictly between General Motors and the united a autoworkers. And we should point out that General Motors according to sources has offered the uaw the possibility of opening an electric vehicle battery plant in the lordstown area. That is far different than reopening the lordstown plant with a specific vehicle that would be built in that plant again, this is fluid, this is how it goes, but you gm shooting down this report from politico that the white house is getting involved in the talks. Appreciate that, phil thanks for the update. Tomorrow on halftime, it is decision day for the fed Jeffrey Gundlach joining us ahead of the decision. What he thinks the fed will do, what he thinks they should do and certainly what may happen next in the markets. And now options traders are gambling that two entertainment stocks continue to move higher and ill start with mgm it hit buying the october 11th expiring on the 11th 31 calls for 35 cents very large, about 8,000 were bought when we first cited it. And another one real quick, drop box also going out just one week we talk about short term, this is very short term but they are buying the 21st, maybe up to 50 cents i like both these. Ill be in for a week on the drop box at least a couple weeks when you look at mgm. Longer term and tweet those out too and a quick one on lvs, another gambling play of course. Just beneath 58 bucks, they are in here buying the january 60 calls. Paid about 3. 20, so because that is more expensive, im going to spread it off, but ill go be in these about two months. A lot of these traded 13,000 second one chinese play, sthr, just below 20 a share, they are buying 25,000 of the october 4th expiration calls at the 29 strike like that one a lot too. Ill be in those probably a week to ten days. Last thursday 25,000 ahead of these 25,000 and depot downgraded today. It is up 30 year to date you are only to getting about a 2 dividends yield and i think below story 1e9s up better from here i think there is more operating leverage but still a great company. Pro still in early innings good stuff. And lets do final trades. Cisco systems, we think that the market overreacted to it we think that it moves up into the mid50s. And keep an eye on snap. I think it is ready to break up through the up side. And fox a, unusual activity in that name and im staying on the housing. Best in class though an economic optimist. I am. It has paid off. Just stating the facts. And the pull back in twitter was viable, is now turning back up ready to make a new high thanks for watching the exchange begins now. Thank you, scott here is what is ahead. 24 hours to go before the feds decision on Interest Rates well debate what the market is expecting and what the repo spike everybody is buzzing about will derail their plans. And wework postponing its listing. Well get in to that and the latest comments from the Halftime Report. And plus hbo max coming out with a bang. Will this quarter turn things a around for fedex and reviews are in for the new