delaying ipo of australian mortgage insurance. >> no. not that. australian mortgage insurance. >> you tease. 20% to the downside today. taking a bit of a hit. >> that will do it for the australian edition of "power lunch." >> "street signs" begins right now. and welcome to "street signs." i'm brian sullivan. ibm and intel throwing cold water on our recent rally. forget the big cap techs, we have two five-star fund managers coming up with off the radar stocks they love. coal and gold both prices tumbli tumbling. is that about to turn and turn into a profit for you? we'll mine the data. and why facebook's mark zuckerberg has some explaining to do. and much more on the continued

delicious baconization of our nation, kelly. >> thanks, brian. mandy still out. we hope she'll be back soon. the dow is lower for the first time in three sessions. it's about 1.5% gain for the week. the s&p 500 is also falling today. and it's in danger of posting its eighth losing day in 11 sessions. the nasdaq is the only major average -- try to mount a rally attempt for a few moments this morning only to fall back. goldman sachs raised price target on apple and estimates for the company. and we all knew apple stores were money making machines, but today's stat of the day shows just how profitable they really are. in dollars per square feet, apple stores 17 times more efficient than the average mall retailer. the top five, tiffany, coach, lululemon and, gamestop, whether that's halo effect or crowding

out effect. in any case, down to bob pisani at the new york stock exchange. seems we're back in risk-off mode today. what gives? >> a three-to-one declining to advancing stocks and the very sloppy closing in europe, spanish bank stocks ahead of the 10-year auction tomorrow i think is part of the problem. not a lot to get overjoyed about. i'll tell you something i am very happy to see. put up a chart of brent crude because brent is dropping. here we see it moving up all throughout the year-to-date. and in the last few weeks look at that. we're at the lowest levels for brent since going back to february. brent is really the global benchmark. not west texas intermediate. this trend line is important. that means gasoline prices should be coming down. those wondering why they're high, they should start coming down. what does it mean? a little about iran perhaps hostilities less likely and a lot of oil coming from the bakken into the east coast. we're seeing that influencing west texas price.

bottom line here is that negative here is for energy companies. so all of the exploration and production companies like eog have been trending down in the last couple weeks as brent has been trending down. they trend with oil. that's the downside. the good side is this is great for the overall economy and generally for equities ex-energy. you can see the s&p 500 year-to-date. bottom line, yes, we have worries in spain. but they buy the dips still. not seeing any kind of wholesale selloff for now. >> we'll see. bob, thanks so much. >> so far 2012 has been a good one for stocks. the s&p 500 already up more than 10% this year. and your next guest says he sees at least another 5% gain for the broader market. and even more over three stocks that he loves right now. ceo and cio at rnc judger capital management. joining us now. dan, what is it going to take to get to your s&p 500 target of 1450 to 1475? >> brian, frankly, i think it just takes more of the same.

i think what we have to realize is this is a market that really is poised to go higher. people want to invest in this market. they're tired of getting 0% on their cash. you know, they're waning returns they're getting on their bonds. and they're looking for an opportunity and excuse to get in. what's happening is we're seeing all those catalysts are put together. we have moderate economic growth. it's slow but it's positive. you're seeing the same thing with earnings growth. still going to see 5%, 6% increases this year. and trading at a very reasonable p/e. i think the problem we have is not the longer term. i just wouldn't bet against this market for the full year. i think the problem is really one more short-term. i mean, we're up 26% since the first week of october. we're up 10% this year. we've literally seen 2.5 multiple points of expansion since october. so people are just going to have to be a little patient. let the earnings catch up. they can be greedy. greed's good, just don't have terminal greed in this environment. and give it a little bit of time. have the earnings catch up and go to the next level. >> dan, what are the catalysts

from here? you mentioned we've seen multiple expansion, it seems we would have to have a lot of things go right here to hit that price target. that seems really aggressive given everything right now. >> the key is earnings. i think you're right, kelly. i think multiple expansion is going to be hard to come by. this market has shown in the last three years basically it wants to trade in a 13 to 14 p/e. every time we get down as we did in october to 11, 11.5, we have a very strong rally. frankly, every time we hit 14 or a little above, we pull back. multiple expansion is not going to be the key. the key is going to be just tracking middle to upper single digit earnings growth, which is why i think from here if you're looking at a 1450, 1475, a 5% increase from here. which is still nice. i'm not looking for another 20% push. we want to track the earnings going forward. >> we promised our viewers three picks. so three picks is what we shall bring our viewers. and we have the ceo of a mid cap ceo of a pharmacy benefit management company coming up who made a big deal today.

but you love the big daddy in that space, new express scripts merging to become the behemoth. why do you like it? >> i think you're see ago strong tailwind from a macro standpoint regardless of what happens with obama care, you'll see increased health care in this country. certainly the first place is pharmaceutical application. as you have more generics coming online, you'll have more from a presip prescription basis. you'll see 20% growth with the merger. when you look at that 20% growth rate, it brings you back down to about 12.5 looking at 2013. so i think that you're in a position to where you have the two things you need. you have very strong earnings growth. and you have earnings predictability and visibility, which i think is just as important. and you're going to get it at reasonable value. >> all right. let's go to number two then.

slumber jay. do you like them all? >> there's a number we like. but when you look with schlumberger, we're going to see a significant increase if not an explosion with regards to exploration and drilling. that's going to happen domestically. it's going to improve in the gulf of mexico. it's going to improve internationally. these are not wells easy to drill. they're not what people were doing 10 or 20 years ago. there's a lot of technology involved. the risks are high. they need what they have to offer from a technology standpoint for a success rate. earnings growth will be about 20% for the next three years. it's not cheap as a 15 p/e, but, again, on 13 earnings you pull back again to about 12. >> dan, we got to jet, but i want to mention your third pick

was mollson coors also likely to be acretive to earnings. we'll see if that 1475 target looks more achievable than it seems from right here. dan genter, thanks so much. >> and mollson coors a name i slammed on that show and got an e-mail from the company. dan liked one oil-related name. schlumberger. international name changers. there are huge investment opportunities right now in u.s. energy. let's talk about them and bring in another all-star investor. good to see you, again, thanks for joining us. you just heard dan make the case for the equity side of schlumberger, you're buying corporate debt. >> we like a lot of enp companies as well as pipeline assets. what's happening is amazing in the united states. you're growing oil at high

single digits, gas at high single digits, the high volume growth is benefitting companies like plains, all american pipeline company which has tremendous assets in the bakken as well as gathering and processing facilities. and also key is really low cost energy oil producers which have very good acreage positions in the shale regions. names like continental, eog, pioneer as well as an dar co. >> how nervous do you get on a day like this? the price down 1%. concern going forward we're going to see flaring up of issues in europe the same we've seen in the last couple years. >> well, this is more day-by-day trading. i'm looking at the long-term secular. and the united states has the ability to get our foreign oil in the next 10 to 20 years. that's revolutionary. we're now one of the lowest cost gas producers in the world, which is transforming our chemical fertilizer sector as well as manufacturing industry. so these companies that are close to the shale regions, for

example, oil, a company like eog can produce all-in cost of oil $32. oil is selling for $100. these companies have incredible ability to produce free cash flow, pay down debt as well as benefit equity holders too. >> do you buy partnerships having to do with them? >> we own plains. that's an mlp. we also own kinder-morgan which is acquiring el paso. these companies basically do pay high dividends,utey also own long-term basically an economic toll booth on energy. and the key is volumes because what's happening with pipelines is there's not enough capacity even natural gas capacity. and so what's happening is the higher the volume growth that's going right to the bottom line. that's why those equities have performed. that's why the bonds have done well. >> mark, i want to quickly ask you how you feel about bank debt. >> well, bank debt was an overweight for our funds. and we've brought that overweight down because basically the valuations have

come in. and we still think europe is going to be a headwind. banks and brokers are high beta sector. i see more growth in energy, quite frankly, as well as in pipelines. so in my funds for example whereas banks were the largest overweight a year or two ago, now energy and pipelines are the largest overweight in the funds i'm running. >> morgan stanley ceo james gorman by the way is going to be on cnbc tomorrow morning. what should investors -- what can he say i guess to placate investors the reports he's been trying to meet with moody's to avoid a credit rating downgrade? >> that's an interesting one. they trade at 6%. and this is a to a minus company. they've made great progress at improving capital. they have 13% tier one capital ratios. $180 billion in liquidity. the reality is the market doesn't care and they're linked to europe. so i would ask, quite frankly, what are you doing for bondholders? i would like to see them merge with a bank. because quite frankly jpmorgan

and wells have a 2% unsecured funding advantage versus morgan stanley. morgan stanley -- 22% of their equity owned by mitsubishi ufj. i would like to see morgan stanley partner up with a bank and let our clients benefit through tighter bond spreads. >> all right. you heard it. mark, thanks so much. >> thank you. >> all right. up next on "street signs," why the world's automakers could see the recovery stall because of one explosion at one plant in germany. >> it's amazing. plus, coal has been beaten up by cheap natural gas. but could coal miners actually be ready to turn a corner? we'll find out next. >> you should know as a coal miner's daughter. and you should know, is the wild west out west? silicon valley ceos going rogue. is it time for investors to worry? [ mujahid ] there was a little bit of trepidation,

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all right. check out csx, the railroad operator earned 43 cents a share for the first quarter, that was a nickel above estimates. coal volume may be down, coal pricing may be down, but csx is seeing increases in intermotor volume like moving freight onto rails. earnings have been up even as coal prices and volumes decline. well, speaking of coal and to quote our friend, the honey badger, it's been a nasty year for coal and coal stocks.

fallen by 40% and the average coal stock down about 18% just this year. that's in an otherwise up market. but is it about to change? today morgan stanley upgraded pate reit coal from underweight to overweight. does this signal a big shift for coal stocks? joining us, bbnt capital markets, mark, you beg to differ with the morgan stanley upgrade. you are not upgrading patriot coal, why not? >> not upgrading but agree with the thesis and premise that met coal prices have seemingly bottomed. if you go back to january of last year 2011, met coal prices peaked about $883 metric ton on the stock market. they've been going down for the last 15 months or so. several months ago, march 26, 27, prices seemingly bottomed at 2.07 or 207. today they sit closer to 220 a metric ton.

what has changed i think primarily is the strike situation in australia. the bma, which includes bhp and mitsubishi is the largest global exporter of met coal by a wide, wide margin. and they've been striking over there really since june of last year. those strikes went up another notch when bhp declared force majeure in early april meaning customers were not going to coal deliveries they had expected. i think that has gone a long way in terms of changing buyer attitudes towards coal. >> what's it going to take for patriot coal to generate this year and next? >> that's one of the issues. you need a mass i move in prices above where we are at 220. you need 2.50 or above type prices. patriot is incredibly levered to coal prices. i think you can accomplish the

same thing as patriot and an upswing through alpha natural resources. three times the met reserves, better balance sheet. and they control nearly 25 million to 30 million tons of exports. it's very much the same concept as patriot. but i think you're doing it with a name that is probably a little less binary. >> and you have a buy on alpha natural resources. mark levin, thanks for being with us. >> thank you. take care. >> just as carmakers getting back on their feet from the recession and japanese supply problems, a plant explosion in germany could hurt production of autos here and around the world. phil lebeau is here to explain. phil, what's going on? >> kelly, this is one of those situations where people are saying are you kidding me we're going through this again after all the problems in japan? here's what's happening, there was an explosion in germany late last month at a plant that makes a key ingredient that goes into a resin used in making certain auto parts. a resin used for a nylon like

coating talking about brake lines, fluid lines, key engine components. and because of that, the industry is bracing for a possible shortage of those components because there's not going to be the resin necessary to make those components. now, some of the automakers and some of the parts suppliers and leading executives got together yesterday in detroit and talked about is there a way around this situation? ford is certainly looking at this as are all the automakers. earlier this week ford's ceo said that the industry is all working together to solve the resin shortage. it has not yet altered its production plans due to the expected shortage in that resin, which goes into key components. general motors also had production people along with shipping people working with the company where the explosion took place also looking at whether or not there are some solutions. the bottom line is this, kelly, when you look at this industry, it's a just-in-time manufacturing situation, this explosion has the potential over the next couple of months to

crimp the supply chain. and if that happens, you could see production altered. what they'll try to do first is alter the production of those vehicles that are not selling as well as others. >> can i ask another one of my famous glaringly obvious questions, captain obvious here. >> go ahead. >> how does the auto industry to have themselves held to one resin plant -- like a certain county in that part of germany. >> it's not the only plant that make ths resin. it's the plant that makes a majority of a key ingredient that goes into a resin made at a number of facilities around the world. this is not the only place where it's made, but the primary supplier of the key ingredient that goes into that resin. we should point out there are some possible solutions. dupont has a possible product that might work. they need to check will the coating on these parts hold up and do the job and do it safely? it's not just a matter of whether or not it works within the engine but whether or not it meets all the safety

specifications. i know what you're saying. shouldn't they have foreseen this? in this day and age, it's not unusual -- >> when you look out at the risk spectrum, i'm not going to pick on ford, you go out and say where do we get our parts, okay. that's taken care of. where do they get their stuff? whoa, one guy responsible -- >> brian, i guarantee you within manufacturing almost every industry has a situation where you go down the tier line, tier two, tier three supplier that they're probably the only supplier of a key ingredient. that's what you're looking at here. i know it seems absurd, but that's the way it's manufacturing. >> we get all our moon rocks from one orbiting planet. i've put a request in hr to change that but so far haven't heard back. phil, thank you very much. >> thank you. >> it's not actually a planet. on deck, another five-star fund manager here with three under the radar stocks that he loves. >> all right. we're going hog wild on "street signs." sizzling double dose of bacon news. god, with extra whip cream and a cherry on top. that's coming up.

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all right. now for something we bring you every wednesday, your retirement equation. first, living off commodities, a

new report by etf securities says $7.5 billion went into commodity funds in the first quarter of this year alone. investors are fearing metals like gold and copper over other commodities like cotton and corn. and have student loans become the new mortgage? americans now own more than $1 trillion in student loans. that's more than our total credit card debt outstanding and many will spend decades paying those loans off. finally, if you missed yesterday's tax deadline, you're not alone. the irs says about 10.5 million taxpayers filed for extension last year. that's more than 7% of all filers. brian. >> kelly, thank you very much. on a rather sour note for pandora is our disaster du jour today with all due respect to herb, he's not here. i'll do it. the streaming music site down a little over 1%. down more earlier today. but yet another new low. pandora down about 50% since it ipoed about a year ago. spotify ceo presenting at a conference today the move in pandora likely reaction to some of the big plans he laid out for

his still private competing music service. all right. meanwhile polaris is popping up 3% as the alter rain vehicle maker beat expectations. also raised outlook on stronger than expected sales and the stock is up 74% over the past year. polaris ceo scott wine will be on tonight at 6:00 p.m. eastern. i wonder who will be driving that segment? >> driving that segment? >> did you like that? >> i liked that. scott's a good guy. virginia boy by the way. >> is he? >> grew up with him in like nowhere grottos, some place like that. >> oh, yeah. >> take a look at priceline shares. look at that number, folks. that's 3%. but the dollar value's more than $21 a share. wow. >> they may be first in that race to $1,000. >> exactly. they got a low float. ceo jeffrey boyd will be on

"squawk on the street" tomorrow at 10:30 a.m. up next on "street signs," is it the new wild west? mark zuckerberg making $1 billion deal really on his own. is it fair? or foul? we're going to debate. plus, everybody into the pool. why our five-star all-star putting on his skib s and takin a giant dip. greetings from the windy city of chicago.

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all right. welcome back to "street signs." time now for street talk. and we are going to begin our three quick stories with a check on the markets. and indeed with 90 minutes left in today's session, stocks are lower after today's big rally. the market though again bouncing off the lows of the day after recovering some of today's losses earlier in the session. also, number two, number two, there we go. shares of chesapeake energy tumbling on news that ceo aubrey mclennon took out over a billion in loans. the participation in the loan program does not present a conflict for the company and that his interest remains squarely aligned with shareholders. another loser by the way, ypf,

shares of the oil and gas producer plunging after they resumed trading today. ar general tina's government announcing plans to take control of the company. ypf was halted earlier this week. spain says, yeah, there will be reprisals for that. the final oil trades of the day happening now. prices lower on the heels of the eia inventory report. let's get now to courtney reagan at the nymex. >> hi, good afternoon, brian. that's right. looks like we're settling here just below $103 a barrel for the wti crude. we're also watching that spread between brent and wti continue to narrow. we've got a couple items at play here. geopolitics pretty much in neutral right now. we've got the pipeline reversing. that's also putting downward pressure on some of these prices. barclays noting oil volatility lowest since about 1985. moving on to the gasoline complex, barclays saying gasoline could see first year-over-year decline since 1985 for the month. see exactly how that shakes out. back to you. >> thank you very much. and a hot mid cap stock in a big

deal today. sxc health solutions buying catalyst in a deal for about $4.4 billion in cash and stock. catalyst had a good run already up about 30% on the news trading at all-time high levels. sxc has been hot as well up more than 50% this year. this deal follows another big one in the pharmacy benefit management space as express scripts recently reached a $29 billion agreement to buy medco. joining us now is ceo of sxc health. mark, thank you very much for joining us on cnbc. was your deal for catalyst in direct response to that express medco deal? >> no, it wasn't. there are a lot of things going on in our industry right now. pretty big dislocations. we've been doing this roll up in the middle market as part of our strategy for years. we weren't really reacting to the merger that happened earlier in our space. but instead some of the big dislocations on a broader scale going on in health care. >> mark, how does the overhaul

or possible supreme court move against the health overhaul effect this deal going forward? >> well, we actually think that sxc is a really good hedge against any eventuality coming down through the supreme court decisions. so in the event they repeal the law, we're in a good place because we're already working with states and health plans to implement exchanges and pcmh models in the event they keep and uphold the law, we'll be in good shape because we have fee for service medicaid, medicare part d and individual based plans. we're really a unique player in this space. we have bets out all across the board. >> we talk about deals and cost sin ner jis and it's never fun to talk about it, but are there going to be layoffs because of this deal? >> well, look, we did this deal for strategic reasons. there will be cost synergies as well as cost expense savings. in any deal this size there will be some layoffs. but when i look at the team and talent that catalyst health

solution put together, we'll have a best of breed operating model with some of the best and smartest in the industry. >> how fragmented is this industry? >> you know, i think the industry's very fragmented. i do expect to see continued consolidation. obviously we just had a big merger in this business. and it was approved by the federal trade commission. i think that's a statement that we have a very, very fragmented industry. and where competition is hot, we like our chances. and i do think there will be continued consolidation in the space. >> if there's continued consolidation, how do you see it shaking out? obviously you've just done a deal. express and medco doing a deal. what will be the deals that you see if not specific companies, mark, do you see drugstore companies getting deeper into the space? how are the deals going to shake out? >> well, what i see happening actually in health care broadly is health care service providers are very well-positioned to help contain costs. so in our space we've been very deliberate about rolling up the

middle market and acquiring smaller competitor who is run on our operating platform. more broadly, i see continued consolidation in the medicare part d managed medicaid space. this has been a hot space and you've seen a lot of consolidation there. capital is cheap. many of these companies are good values. i think many of the major players are going to be moving on with acquisition strategies relative to retailers. i think the retailers are central value proposition in the provision of pbm services. we've got an open network model, great relationships with companies like walgreens and others in the retail channel. and it's our job to bring that channel together and offer members and the payers who are sponsoring their plans great alternatives. >> mark, ceo of sxc health solutions. mark, thanks for joining us on such short notice. >> thank you. >> next all-star investor, managing niche markets. the five-star fund up over 84%

and the fund's portfolio manager joins us now. sandy, is the contrarian strategy still paying off? >> yeah, it is. i think that's what we got to do. we have to find companies trading at p/e multiples lez than their growth rates and try to find things maybe wall street hasn't picked up on yet. we like that style. >> i think if i check something like up 4% over the past year. what gives? >> i'm sorry, you said europe? >> i said your fund. it looks like you guys are up about 4% over the past year. is it that this is still a macro market? is it too binary, what's going on? >> we're trying to find individual stories that they could take sometimes two, three, four years to play out. but we want to be right on our investment thesis. we want to stick with it. we think that's going to turn around and really benefit our shareholders as these companies come to life. >> we mentioned before the break there something about investing in pools. so where do you guys see opportunity right now? >> sure. you look at all the issues in europe, look at all these spanish bonds are and all the

stuff going up to 6%, 7%, we like to stick domestically. we're looking at pools really the largest distributor of swimming pool products. as long as you believe people will continue to maintain their swimming pools, put the chemicals in it and fix the pieces that are broken and not let it turn green or black or fill it in, we think it's going to do well over time. if you like companies that we do that dominate their niche, these are bigger than all their competitors. spoke to the ceo recently, he said they're going to grow earnings at 20% over the next five years and no recovery in housing. my chicken way of playing the housing recovery. >> yeah. they are up 27% already this year. i would imagine that means that some optimism and something you mentioned there are priced in. >> another company called luminex. they sell to the life sciences industry. they can do five different types of test on one drop of blood.

i like it because their business model is a razor, razor blade business model where once you buy the device or machine, you have to buy the razors through it. that's where the high margins are. they have a test in their essay segment called an rvp test which is a respiratory viral test can test for eight viruses of various strands. we like this one a lot $110 million in cash. no debt. >> i think the last one is pretty fascinating. who isn't automating online services at this point? this company seems to be one that helps a lot of state and local governments do that. >> that's exactly right. e government solutions. they're basically designing, operating, building about 26 states right now that covers a population of about 98 million, about a third of the u.s. population right now. they're also getting into a federal area. they have two partnerships there that i think are going to open the market even bigger. so if you believe that states are cash strapped and looking to stave money, eliminate costly

i.t. departments, this is going to be a good investment. they've paid $133 million in special one-time dividends over the last five years. and love the cash generation. $60 million in cash, no debt at all. kind of a little annuity stream. as long as people continue to renew their driver's licenses, we think this is going to do pretty well. >> sandy, thank you very much for joining us on "street signs." >> thanks, guys. thank you. >> appreciate it. all right. well, to quote homer simpson, mmmm, bacon, america's obsession goes global. >> terrifying. burger king going mobile taking its new menu on the road. my mon. i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. [ rodger riney ] at scottrade, we give you commission-free etfs, no-fee iras and more.

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we are just seconds away from revealing the true nature of those twin delights. and you will want to hear and see and smell like we do. what is in those babies? first, what's coming up on "closing bell," bill? >> bonn appetite, brian, burg king, which look more appetiz g appetizing. and best buy reportedly a

takeover? two analyst will duke that question out in a stock brawl on best buy. and here we go again tonight, an earnings extravaganza, instant analysis with results from american express, e-bay, qualcomm and yum brands. michelle and i will see you at the top of the hour from the new york stock exchange. kelly. >> bill, thanks so much. it's time now for bacon news. here on "street signs" of course we always want to keep you informed with anything having to do with the baconization of our nation, so to kick it off, look at this. deep fried hot dog -- i can't say it. this thing is topped with peanut butter, brownie bites, whip cream, chocolate and caramel sauce. it's sold at the cool dog cafe in new jersey. >> goes for the bargain price of $4.50. like kelly said, we like to get our hands dirty here.

so we had our crack staff recreate these puppies. >> tough try it. >> this is ad libbing. >> you have to take a bite. >> i'm not taking a bite. i don't know when this was made. i think bacon news will be a hit segment. there's peanut butter, there's chocolate. yeah. folks, the cool dog cafe. by the way, i drive down to virginia and maryland a lot. i know you do too. we're going to stop in next trip down south of the mason-dixon line. we're coming for you. >> you know that hamburger they put between two glazed donuts, i don't understand the point. they sort of pick off the top. >> i'm going to chow this darren rovell to an eating contest. >> i would love to see it. >> it gets worse. there's a special going on right now in japan that lets burger king customers bacon your whoppers. this is real.

15 strips of bacon to your burger for only a$1.25. that is five times the bacon that typically comes on a bacon whopper in japan -- i didn't know they had three pieces. >> because three pieces isn't enough. >> not for some. >> in producing bacon, raising pork, it's all very sort of resource intensive. >> by the way, have you met the gadzooks dogs? >> that's far too close to me. that's going on the far side of the table for the rest of the show. >> move on to the food and business -- we're merging bacon and business here every day. as burger king preps to go public, again, no word on whether they plan to offer the same delicious deal in the united states. but b.k. is rolling out new menu items like a bacon sundae. our own jane wells is in los angeles. why are you -- what is it? you're jealous of the dogs, admit it? >> the bacon sundae's only being tested in nashville. my only hope is it's better than

jack in the box's bacon milk shake. burger king fell number three in the last year behind mcdonald's and wendy's. so they have a whole food truck thing as part of the $750 million rollout. they've added ten items to their menu. biggest menu overhaul they've ever had. this is strawberry banana and mango. what do you think? >> amazing. >> it's delicious. i finally found something that i can drink. i'm allergic to the strawberries, but the mangos i can have. >> i'm sure the check's in the mail from burger king. part of the issue here is the company overall preparing to go public and embarking on this makeover, it's really important that the franchisees buy into it. it's costing about $250,000 on average per store to freshen up. they're trying to provide financing. deutsche bank says a sampling of those who have actually done it, they are seeing an increase in sales from a year ago, 15% to 20%. but they have to buy into it. this is a burger king right

here. i tried the chicken strips with some of the new sauces. one sauce was good. jalapeno barbecue. and one thing i noticed in here the staff is really trying to get up to speed on new menu items. salads, stuff they've never done before. that's going to take time, but they're working hard. we'll see if it brings people back in. >> interesting, you bring up a good point. burger king just lost the number two title to wendy's right? >> yes. >> they have been sliding. it's a serious thing if you're thinking about buying into the ipo, you've tried some of the menu items, you mentioned the chicken strips and the delicious shake, what else have you had that you like? and is that creepy big headed king dude still around? >> no. they got rid of him. now they've got david beckham, who's much nicer to look at. even though they have -- >> because he eats there every day. >> yeah. they've got ebitda this year supposed to be $615 million according to deutsche bank. but a lot is due to cost savings.

we have to see what happens with the actual fundamentals. >> jane, will we see the products in a local burger king any time soon? >> they're in there now. go now. >> go now. you heard it. jane wells, thank you so much. >> bacon sundae only in nashville at the moment. it's being tested. >> road trip. >> you better be a part of our bacon news segment, jane. thank you very much. and you can forget the royal with cheese and french fries, a new spin on french cuisine. this is real. mcbaguette. it's a crispy baguette served hot with beef, whole grain mustard sauce. launched today as a test product in the more than 1,200 french mcdonald's. mcdonald's also opened 30 restaurants in france in the past five years alone. they too, kelly, will serve the mcbaguette. >> let's just hope it doesn't come with bacon. up next, it's the new wild west at the facebook corral.

mark zuckerberg road alone on the billion dollar instagram deal. question is whether investors should revolt or rejoice. ♪ ♪ [ female announcer ] you're 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.

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facebook ceo mark zuckerberg made the instagram deal alone before conferring with the board of directors. it's the silicon valley behavior we seem to be seeing. who is in the wild west? john, i'll begin with you. if i was a board member of facebook, no investor or add vici would be -- >> i think this is the definition of a potted plant. if i were a shareholder i would be saying, what am i paying these board of directors to do? it's got to be humiliating for

those folks on the board. i would be going nuts. i wouldn't want to show my room around too many board rooms if this is the way the ceo is treating me. >> this is giving mark zuckerberg flexibility and acted on a transaction that would have taken a long time and possibly scared off the suitor. >> reporter: absolutely. he controls 57% of the shares. he does control this company and as he laid out very clearly, he's in charge. he's in charge. he has voting control and he will do what he thinks is right and i think that this is the kind of deal that would have taken weeks at least to close. he made it happen in three days. it's not like he didn't take it to the board. they could have rejected it but he did take it to them at the last minute. we should be surprised, this is in keeping with his way that he has chos t run the company.

and it is his company. >> i don't believe zuckerberg broke any laws. make a breach of fiduciary -- >> of course not. i don't think the guy is a criminal. >> but at the same time, right, if this happened with a bank and lloyd blankfein of goldman said we bought this corp over here for a million dollars, it would be a massive scandal. but it's just zuck being zuck. they get a free pass, don't they? >> they don't deserve a free pass. i think lloyd would be doing a better job than mark zuckerberg doing this instagram deal. julia is right. he has 57% of the voting rights but only owns 28% of the equity. 72% of the equity owners and shareholders are people who are

not mark zuckerberg. the guy pays $1 billion for a company with 13 employees and zero revenue. there are a lot of companies around the united states with 13 employees and zero revenue. i don't see them getting a $1 billion valuation. it wasn't as if there was a bidding war or valuation. he could use a little adult supervision, that's all i'm saying. >> look. he did consult with cheryl sandberg on friday and he had been interested in acquiring instagram since last summer. other companies were interested. likely twitter, google. i think the acquisition even as random as you might say. yeah, in terms of the valuation. listen -- >> where does the $1 billion come from, julia? >> so you're taking issue with the valuation.

getting back to the question over whether mark zuckerberg should have control over the decisions facebook makes, he does have voting rights. the valuation of facebook will speak for itself when it goes public and has a valuation of what i expect to be north of $100 billion, investors are comfortable betting on zuckerberg and his decision making. >> can i just mention what i think is the real issue here? putting aside all of this, depay too much? it was a good match. what we have to keep our mind on is in a few weeks, as you know, facebook is going to do an ipo and people are going to look at this and say, what is going on in this company? is there any constraint on this 28-year-old guy? >> jonathan, julia -- guys, there's a great discussion. my final take is this. if you want to be public, be public and live by the rules of a public company. otherwise, be rich privately. we'll get back with the spirited

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