But youve got to imagine strategically the fact that theres an impeachment inquiry now open on the president and at least in theory there is some statistical chance that theres a removal of a president , although everyone reviews as extremely unlikely here, if youre the chinese you might think lets wait and see what happens. Flip that and look at the incentives facing the president. Hes facing a situation where he wants to prove that he is delivering on the economy for the american people. He may now need a deal, need a victory here politically and economically more than he did a week ago, so the pressure on him might be to get a deal even if its not as good as he might have set out for initially but this president has been very focused on this and said hes only going to take a deal if he feels its a win for the american people. Eamon javers outside by the flags doing great work today keeping our viewers attuned to the news appreciate that. Good morning once again, everybody. It is 8 00 a. M. At juul headquarters in san francisco, it is 11 00 a. M. On wall street and squawk alley is live good wednesday morning, welcome to squawk alley. Im Carl Quintanilla along with morgan entrepreneur an and jon fortt. Well turn to tech stocks to start. Rebounding after losing billions of dollars in market cap after the president s speech when he called out social Media Companies immense power they lost 58 billion in value with the nasdaq falling more than a percent it is now the time to buy. Joining us Jeffries Brent phil and brent singerling guys, appreciate the time today. Good morning. Brent, did you hear anything new or unique in that u. N. Address . Brent, can you hear me yes, i can hear you fine. Yeah, no, i didnt hear anything new. I think we have increased scrutiny and regulation happening across the tech sector the big platforms are not immune weve seen other sectors be scrutinized in the past. You know, its difficult to predict the outcome. It certainly widens the range of what could happen and i think investors need to take that into account. You need to look at it on a casebycase basis some Companies May prove to be more regulated than others and some outcomes such as breaking up assets, spinning off assets could be positive for the stocks youve really got to look at it individually brad, i mean we could talk about regulation and what that means for the big cap tech names and the faang names specifically, but the one name that isnt necessarily exposed to those potential headwinds is netflix and thats the one that has been falling the most and underperforming the most i realize theres a competition component there as well but are the fears and i guess the selloff overblown yeah, look, theres a wall of worry on netflix but theres an opportunity to look longterm. And the longterm reality is that people are consuming more streaming video. That will go up even higher with 5g the longterm opportunity for streamers is billions of subscribers not hundreds of millions of subscribers. If you dont lose track of that, you can see theres really an opportunity to look past this wall of worry. In the short term theres more products coming out, more competition. Netflix has some things they can do such as the content slate they have coming over the next six to 12 months to offset that. But consumers have budgets to spend on multiple streaming apps i understand thats the reality that were in. I wonder what you think is going on here with some stocks that had been hot, including some recent ipos i mean lyft is off 12 for the week it hadnt been performing that well to begin with roku is off 19 for the week look at shopify, stitch fix, a lot of stocks pretty close to if it were a broader index close to what would be called correction territory. Is there revaluing around growth going on and whats the impact then on investing in startups in Silicon Valley i think theres been a lot of money thats been sloshing around Silicon Valley and private market valuations for several years now. I think theres a little clash as some of these assets have come public. I think theres a little bit of an underestimating of the rigor and frankly the intelligence of Public Market investors thats taking place by a private Market Investors are seeing that clash come together and seeing a resetting of expectations. But i look at it on a casebycase basis theres a lot of Excellent Companies that have come public, a lot of Excellent Companies that are coming public but the scrutiny and rigor and assessments of the valuation of those companies will be what it always has been for public investors and i think that reality has to be faced and is being faced and were seeing that in some of the recent headlines that weve seen, such as with wework and some of the other valuations that are being adjusted. Do you think wework is a Tipping Point in terms of that assessment in the private markets . I just wonder how much is going to change given the fact that we have now a situation where its lower rates for longer in this ongoing quest for yield . Yeah, so i dont know that i would call it a Tipping Point. I think each example should be looked at independently. There is still we are still in this low rate environment theres still a lot of money sloshing around Silicon Valley in the tech Startup Space and that probably wont stop i dont see any reason for a run on the bank or a rush to the exits. But the reality is that ultimately as these Companies Get bigger, they do need access to the Public Markets and you need to mesh the views of public investors with private investors and recently those have been out of sync. I think there will be a healthy reconciliation of that and well get back to seeing a lot of great Companies Come public, which Public Market investors are eager and excited about. Weve talked for so long about Companies Staying Private for longer, elongating the window before they come public now that the market seems to be insisting more on a path to profitability, does that window get even longer than it was . I dont know that the market is insisting more on a path to profitability but i think weve always insisted on the fact that that path exists, and so you do need to have some proven economics. If we can see that path, if enough data is provided by the companies as they come public, if the oversight of the companies and the governance are in good shape, then i think were willing still to give the same leadway we always have as investors but if the governance is not there, the data is not there, we cant do the analysis, thats going to make it really hard i certainly think there is still room for companies who are not profitable to enter the Public Markets and eventually make their way to profitability by partnering with public investors and giving the data that people need to make their assessments of the valuations of those businesses. Each new issue is definitely a test of that thesis. Well see how it goes from here on out thanks for that. Good to see you. Thank you and a day after the wework ceo stepped down from that role, another chief executive also resigning, ebays devon wenig who had been in that job since 2015 deirdre bosa has more from san francisco. Jon, he is stepping down as president , ceo and member of the board. The company, which is based here in the bay area, announcing his departure this morning and staying the cfo will step in as interim ceo while it conducts a search for a successor ebay noted it is moving forward with the potential sale of stubhub and its classifieds group. Activist investors elliott and starboard unveiled ownership stakes in the company. Elliott pushed for the sale of those two assets, arguing that they could bring in more than 16 billion. Now heres whats interesting, guys wenig agreed on a Strategic Review and shares have actually climbed nearly 40 this year, far outperforming the broader markets. Its not clear that the market at least initially sees wenigs departure as a didnt thigood tg shares this morning lower. But, guys, there are still plenty of concerns about ebays Growth Prospects here. It has struggled to compete with amazon and its gross merchandise volume is a key metric for this company. Thats the total value of goods sold on the site that has been declining. To offset slowing growth, ebay is looking to advertising and payments so who they choose as its next ceo, potentially if they could come from one of those spaces, that could tell us a lot about where the Company Wants to go next back to you. So the change in leadership here at the top, i mean is the readthrough that maybe wenig was i know theres this strategic portfolio review and the company has been under all of this and activist investor pressure is it that maybe he wasnt moving fast enough like i said, the stock is up 40 year to date so the markets think that he is doing a decent job with that Strategic Review i think the problem is much broader. This is a company that is seeing sales decline on its website when you have a competitor like amazon just go from strength to strength, growing at a much faster rate. So i think that that is it and perhaps the board felt that he just wasnt the right person to do that huge overhaul that perhaps ebay needs maybe the strategic sales of those assets just arent enough. Yeah, and if you look at etsy or shopifys performance the past couple of years, its harder to make excuses thank you. Up next, vox media acquiring new York Magazine and a bunch of other properties along with that the chairman and Ceo Jim Bankoff will jn oius right here at post 9 after the break. Stay with us at fidelity, we believe your money should always be working harder. Thats why your cash automatically goes into a Money Market Fund when you open a new account. And fidelitys rate is higher than e trades, td ameritrades, even 9 times more than schwabs. Plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. Just another reminder of the value youll only find at fidelity. Open an account today. Some more media consolidation headlines this morning. Vox media acquiring new york media. The Company Behind new York Magazine and others, its an all stock transaction. Joining us exclusively here at post 9, vox chairman and Ceo Jim Bankoff. Jim, good morning. Good morning. Good to be here. Last time you were here i was asking you if you were making a call on consolidation. I guess you were making a few literal phone calls on consolidation. Some people will look at this and say its a 51yearold magazine that youre buying, but theres more to it than that how much did the Digital Properties really make the value here a ton and im glad you led with that. A lot of people know new york media for new York Magazine particularly but if you live in new york and all over the world now its relevant, is iconic and has a great history. It will continue to have a great future in printi, of course. What you may not know about new york media, its Digital Business is really its primary source of revenue, its primary source of growth they have done an outstanding job of growing and its not just by taking the great journalism thats in the pages and putting it onto the internet, its about creating new properties, new businesses one, fracor example, is called strategist that has a great lead generation business attached with it but its just entertaining, fun stuff to go through. Whether its that or the cut or vulture or grub street, these are great properties. If im being cynical looking at this space, i say, look, google and facebook are squeezing the heck out of Digital Advertising profits. At the same time, you guys and new york media just unionized. You have to deal with unionized work forces so your costs are going higher what do you have to do to make this work businesswise you raise a great point about the nature of advertising, which is scale matters, quality matters, Performance Matters this merger accelerates all of that for us. Vox media alone with our Outstanding Networks and our ad tech and everything we can bring to bear for clients was already in a really strong position. Importantly its not just scale for scale sake weve seen mergers about that in the digital space. This is about quality, its about relevance, but also about scale. You get the best of both worlds. We think thats a really appealing Value Proposition for marketers who are looking to build brand. You know, top of the funnel marketers in particular who wanting awareness, who want to be associated with engaged audiences, who want to capture that zeitgeist. We will be able to operate more efficiently but the big upside and synergy is from the revenue side we have very little overlap in terms of clients and customers so hope to bring more value to them but there are new business lines too. Theres the Commerce Business line, theres dij stal subscriptions, which is a fastgrowing area that we can piggyback and renleverage we bring a lot to them we bring a television business, we bring a podcast business, we bring a concert and live events business together we think a lot of revenue opportunity will come from it. No one would blame you for going to, say, a less frequent paper copy is that a possibility . You look at what ew has done and how si has changed, the actual physical magazines. Thats not necessary, in the case of new York Magazine, theyre doing well like all printing publications over the past decade they have seen a decline but they have stabilized so we dont need to make any changes there. A couple of years ago, somebody would have expected for you to do a video deal perhaps, because everybody was rushing after video ad dollars has something changed that youre going really in the other direction . Heres very much a property thats strong on the written word but that has pivoted toward subscription and has a print product . This is a video opportunity and ill make the case for it. Our company has been really good at video we have the leading Youtube Channel in news, we have probably 15 million youtube subscribers and tons of views. But even better, we have Companies Like netflix and hulu and pbs and cnbc working with us to create Television Products as well new york media is less mature there. Theyre starting to do that stuff. They have some shows on tv as well we could bring their intellectual property, their talent into the digital video age. Thats how the value is created and where the upside is. When you see paying for shows that are 25 years old, is this crazy . Its definitely a race. Crazy is probably a strong word, but its great for audiences, its great for content companies. Will it find its level absolutely, like any other industry but i think thats a Long Time Coming the streaming wars are just beginning and the competition is now on netflix clearly had a huge head start. Were partnering with them we have a partnership with hulu. Thats a big deal. Thats an opportunity to create a food Network Within hulu so were going to work with all these partners theyre going to bring Something Different to the table and consumers will choose. How is the ad market . Do you see any weakness either because of uncertainties or just seasonally right now right now the ad market is in a good plarce, its strong. We benefit from having a good Value Proposition. Its a cyclical business so well keep our eyes on that, but were having a good year. I guess on the heels of this deal, how do you think about media and how folks are consuming it in the future whether its the podcast, whether its print, whether its digital, how much can those different types of media be leveraged and cross pollinated and is there a point at which consumers i guess get sort of tired out . Because there is so much out there. Im so glad you asked that question i call vox media the leading modern Media Company the reason i use the word modern is because audiences want to consume across all these platforms and they dont want to think thats my magazine thing, thats my tv thing, thats my facebook thing, thats my netflix thing. What were building are brands that seamlessly travel across all those things so if youre a consumer, you dont have to have your head spinning, what is this thing, can i trust it, are they providing me quality content, whether i see it on my tv, on my phone or on a newsstand. I know what it stands for, i know it has a voice that i love or that i trust and it means something to me. Quality is the signal to the consumer that you can trust and that you can enjoy it. Is more consolidation coming . Yes, i think so in our case were going to look to be a smart acquirer that means that were not just going to buy things for the sake of buying things but if other quality opportunities come, whether theyre capabilities, i think youll see the trend across the industry you see too many of these things are done for Financial Engineering and generally those are not sustainable types of opportunities. We believe a Company Built on