cnbc. yes, i am wearing a hoodie. i'm andrew ross sorkin along with joe kernen and mandy drury. becky is on assignment. let's get you up to speed. facebook is the largest internet ipo in u.s. history. at an offering price of $38 a share, the company now valued at $104 billion. the stock expected to begin trading on the nasdaq at 11:00 a.m. eastern time this morning under the symbol fb. we'll have much more from kayla tausche in a moment. and european stocks are on track for their biggest weekly decline since most of. among today's catalysts, moody's downgrading 16 spanish banks including the eurozone largest bank, ban company santander. and citing risks the country might have to heave the euro.

jamie dimon has now agreed to testify before congress before the bank's recent trading losses. the senate banking committee will hold those ehearings. >> in other corporate headlines, yahoo! said to be in the final stages of selling a large stake of ali baba back it to the company. yahoo! intends to use gains from the sale for a share repurchase of its own. meantime yahoo!'s new ceo is dumping a recently created division. ross levinson is dismantling a consumer commerce unit signaling his ideas for turning around the trouble differ from those of the previous ceo. elsewhere, twitter says it will honor requests from it users who don't want their online behavior tracked. the company backing do not track heavily promoted by the ftc. business models of many web companies do rely heavily on collecting user data.

the legal team winding down mf global stemt fees reached nearly $25 million. today a coalition of former mf global customers will head to court to argue liquidations should be converted to a so-called chapter 7. chapter 7 liquidations let trustees sell off assets cheaper and quicker because there's less involvement with lawyers. which is always a good thing. >> not unless you're the lawyer. sfok stocks to watch. shares of sales force posting better than expected quarterly results that raised its full year outlook. a nice move after hours. also getting a pop, the shares of gap. raising yearly earnings outlook. but auto desk shares coming under pressure. basically in line with consensus, but then the outlook was disappointing.

vix closed yesterday at its highest level since december 19th. the fear gauge is up about 50% since its april 28th close. up 36 points so far on the implied open for the dow. nasdaq not much more than it that. oil has been weak. risk coming off for whatever reason all the way down to $92.62. and all time low in yield yesterday with the ten year at 1.73.

gold up almost $40 at one point yesterday. time for the global markets report. kelly evans standing by in london. she's still here. so it's going all right so far? you stayed through friday. whether we see you on monday, too, or do you have time off? >> the correlation it seems i started working at the "wall street journal" right as things fell off a cliff in the u.s. and i come over here and i start and it's been this really risk off week. so maybe it would be good for everyone if i just stayed home. >> we send you where the action is. if it wasn't for action, all the acts would be coming from -- >> a few people might be happy to miss facebook, right? >> yeah, i want to see mandy in

a hoodie. >> i ordered one, but they only come in men's sizes. i find that a little offensive. there are plenty of women out there who would like to wear a hoodie, as well. >> why couldn't you water a man's small? >> i ordered an extra small, but it still comes down it my knees. >> what color? >> i don't know. >> let me give you a sense of what's going on over here. when i hand it off to you lately, we're seeing the move to the down side. we've actually recovered a little bit. if you take a look at what's going on in stoxx 600, searching for direction all morning. surprisingly enough, a lot of the leaders today are the spanish banks. coming off again big moves yesterday and news of moody's downgrading the sector last night. but if you take a look at the ibex, up 0.2%. that's much better than thanhe .

you can see bankia up 23% this morning. the rest of the sector looking green, as well. bbva up 3.5% even as spreads are at a new high above 500 basis points. and that's happening with a lot of the sovereign spain included, as well, but cnbc hearing that we may have a ban of short selling of some spanish bank stocks. so that's contributing to some of the pounce babounce back. and this is what we call a gauge of what the ecb might be up to. ten year improved a bit. in the two year, just below that 4.2% level.

things have calmed a little bit for the moment, but of course as we've seen in the last couple days, it's really going to depend on how things hand off to the u.s. >> thank you so very much. we'll have to get her a hood diddy. you're not wearing one. >> i bumped in to cameron and he was wearing a cross between a sweater and a hoodie. and i think we have a new item of clothing. >> yesterday someone mentioned woodys early in the morning. i can't remember why. >> like 6:07 in the morning. >> yeah. woody, i had the same sort of feeling of -- it was an uncomfortable feeling. >> and you're feeling uncomfortable this morning. >> i'm going to foreclose any type of commentary -- >> until 7:00.

>> it isn't growing on me. i'm thinking of taking it off. >> like a fungus. >> the long awaited facebook icht po pricing after the bell yesterday. congratulations already coming into social media platform. check out this tweet that came in late last night. so proud of my brother on eve of tech's biggest ipo. hey, mark, now can you pay me back that $10 i lent you for our lemonade stand? kayla tausche joins us with more. more tweets or more news? >> it's pretty unbelievable the transformation of the hoodie from the trayvon martin case, it went from being an extremely negative symbol to being an extremely positive symbol and an iconic symbol. >> until now. >> and how what happens. >> i thought might work, but i

think -- tough to pull off with a tie on. >> when you're not wearing it anymore, we'll know you caved. >> you you may cave pretty quickly. >> what we saw yesterday, $38 per share, that was at the high end of the revised range. my sources were telling me that it was looking like 39 in the morning. they were really testing investors. that was the number that they had sort of circled as far as pricing. some investors were a little bit more excited about that actual than others. some saying it once you're in that range, it doesn't matter, your valuation is above $100 billion. and it doesn't move the needle all that much. but when you saw the nasdaq fall throughout the day, fell about 2%, overall market conditions really soft.

this was a heavily choreographed deal. priced at $38. and that raise the a total of $16 billion. it they have an additional $2.5 billion that they can raise in an overallotment. but right now it's the third largest u.s. ipo ever. if we get the allot the, it would be the second biggest. a conference call is to inform the market. you can ask questions about when it starts trading, if there's any volatility, they'll try and fix that problem. >> do they always start trading that late? 11:00 seems late to me. maybe hark doesn't get up that early. >> and so many orders in the book. once you process all the shares

getting to the market. >> when you hear stories about brokers getting calls from retail clients saying i want facebook at any price because they don't want to miss out, do you feel there could be some kind of client backlash if essentially this does not perform as well as people are expecting? people will say, hang on, i was duped because they pout into all the hooip. >> yeah, will that's definitely a possibility of that. there's all these reports about morgan stanley allocating 500 shares to each retail client or upping that to 5,000 shares for each retail client. you really don't know. that's such a qualitative staff. it depends on what kind of client you are. you can't really know. but i think that there is a real risk. there are going to be skeptics on any side of a deal and depending on whether people really valued this right, i think there could be -- >> also kind of difficult to

gauge given recent other ipos in the social media world. linkinkedin doubled on the firs day of trade. >> zynga should trade in tandem with facebook, so that's an interesting offshoot. joe was talking about aol time warner yesterday. and i want to bring this up. he was talking about how it was a little disconcerting that facebook was using its own currency to do a deal, was it valued at the top. and i went back to some of the stats of the aol time warner deal and $350 billion combined market value. $182 billion deal value when you consider the debt there. but aol at the peak only had 27 million users. and that says 27%, but at that time it was actually 7% of global internet users before facebook has 901 million users.

>> and growing. >> and growing. and is roughly half of the world's enter threat users. >> what's the attrition rate? how much do they use? >> a lot are dormant. >> that was one of the big concerns of the sec. they said you're pitching this number actively to advertisers, but how many of those are false accounts, how many of these are fake people or people's dogs. >> how many do you know who are not already in the ipo that say they're jumping in, retail parents? >> besides my parents? >> i've talked to people throughout the week. random people, should i get in, what are you supposed to do? >> people even asking like should i buy facebook. and that's not really a question for me.

>> people ask me if i am and of course the answer is that we can't. but i think that the way that this is priced, it appeared that demand was this for a higher price. i think they did want something that didn't have sticker shock. they had a little bit more room to run begin whgiven what they and certainly for sellers it's a great price because a lot of the investors got in at extremely early stages. goldman sachs got in just over a year ago and it was half the valuation. i think $38 is somewhat conservative. if it trades at a narrow range, i think you'll see a lot of volatility after you see it trade in the narrow range because people will say, oh, this isn't going crazy, i should get in. if you see it spike immediately at the open, you'll know a lot of retail investors are have tried to pile into the first trade and maybe it will pull off throughout the day. >> the parallels that i was trying to draw i guess is where the combined market cap of aol

and time warner are today. >> 2.5 billion for aol and 33. >> so it went from 350 to 33 basically. and my point with the deal for instragram, i wonder what instragram with any real valuation, what is that worth and then what if you were to then look at the number of shares that facebook -- what would that value be if you valued -- if you went the reverse way. >> if you reversed it? >> find out what instragram is actually worth. in other words, if you're going to trade two $50,000 dogs for a $100,000 cat, both -- neither the dogs nor the cats are worth anywhere near that unless they're pretty special i would think. so my question is if you look at what instragram is actually worth and look at what the value of facebook is based on it that, you're valuing instragram at a

billion because of where facebook is valued. facebook would a be a 50th of wt it's worth. >> there's a lot of criticism that when google buys a company, it goes there to die. four square sold an earlier version to google and everyone ended up leaving and google closed it down. if facebook doesn't really capitalize on instragram, doesn't integrate it to the platform, doesn't help it grow, i think that's the problem that you face. but if it does -- >> i'm dormant on twitter. all twitter has done for me is allowed people that have two followers to write in about my hair or- >> the hate. >> they have two followers and they -- >> twitter is a lot of hate.

>> why did i let people with two followers come into -- >> so you can share your daughter's blog post. >> right. >> let's take a poll to see if you should be fired, po-o-l-p-o. >> yeah. talking it would have to be a pretty special cat, they are worth thousands of dollars. >> i'm allergic to cats. >> i am and my son is. >> my dad is allergic to cats and i made him get one anyway. >> times also allergic to their attitude. >> yeah. >> you always know where you stand. >> i always want to come back as a really spoiled upper east side cat if i had the choice. or dog. cue the music. coming up, our facebook conversation is just getting started. okay, yeah, we understand the hype has been huge.

but our next guest says buyer beware why the ceo of one social news website is worried. but first mark zuckerberg in his own words throughout the years. >> when we first launched, we were hoping for maybe 400, 500 people. we're already at more than 90 we're 200 million people using the service. >> 500 million years. >> we want to make sure that the next billion people can get on. but not how we get there. because in this business, there are no straight lines. only the twists and turns of an unpredictable industry. so the eighty-thousand employees at delta... must anticipate the unexpected. and never let the rules overrule common sense. this is how we tame the unwieldiness of air travel, until it's not just lines you see... it's the world. high schools in six states enrolled in the national math and science initiative...

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looking at about a 0.2% increase on the implied open on the dow. making head wlinss, an experimental cancer drug showing promise in an early trial. it may add vital months to the lives of melanoma patients whose disease has spread. >> the northeast going to enjoy a fantastic weekend. not it too bad across the rest of the country. just a smattering of showers in the carolinas. most of the heavier rains

remaining offshore. upper midwest around the great lakes seeing rain and also pulling out of the rockies, a storm system. that's the one that we'll be watching here in the coming days. warm and dry in the plains. we'll follow the storm system in the rockies heading east friday and saturday, eventually getting into minnesota. looks like the twin cities for saturday could see some storms and then rounding out the weekend, also stormy conditions trailing all the way back down into portions of the southern plains. but the northeast, enjoy the sunshine and southwest over the next couple of days. >> thanks so much. investors awaiting facebook's highly anticipated public debut, but is the stock set to take off? that is the big question. and our next question says he's holding off on buying shares.

he's co-founder of the social website red it. why would you not touch it with a long pole is this. >> well, i've got some reservations. in part because the facebook business model is one it that relies on display ads. sort of like google. but doesn't have the same purchasing that google does. with facebook, you're looking at photos from your dad's fishing trip. and i'm not convinced that they can continue to grow this business in a way that still treats users well. that's the concern. >> one of your issues is privacy. >> yes. the other crux of this is mark's view, mark's perspective on privacy is a rather different one from many of us. and i worry that as they do more things, they expose more and more things about our individual privacy that could turn users

away. >> a lot of companies do that. >> yes, but none to the stepext of facebook. they've done a brilliant job at growing the business. but it's also one it that unfortunately sometimes it x. things. >> are they exposing it to advertisers or are you shared they're sharing it with the government? >> my concern is that >> there's a flimsy network and there's a good reason people want to switch. >> is it your worry that the user runs because of the price

provide vasey issue or that the regulators run to facebook? one concern i've heard is that the whole world will be regulated in a completely different way than it is today. >> a little bit of both. we still have yet to see -- the value of a user driven website is entirely in the users. and it is then the onus is then on these websites to make sure that there is an incentive. >> but people seem to be willing to give up just about all of their personal information as long as it's free. >> are all of you okay with that? >> you do it, right? do you use g-mail, for example, or hot mail? >> >> i use hot mail. >> something, right? think about all the private information it that's on that e-mail service. and you do it because it's free. but the privacy issues are huge. >> i think the difference is when we share things on facebook, we're sharing a very

different type of personal information. we're sometimes publicly or inadvertently sharing things being seen by our peers. >> if facebook did not support the cyber security intelligence sharing protection act, i had to look that up, would you invest in them, would they be a good investment to you? >> it would be helpful. i certainly would rather they didn't support this bill. even the president has spoken out against. but the bigger concern is that this is indicative of decisions that i think in the long term could hurt facebook. >> thank you so much. >> thank you. coming up, beyond facebook. a number of big stories this morning including a g-8 meeting at camp david. former goldman sachs execs robert hormats will join us with a preview. [ wind howling ]

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welcome back to "squawk box." it's past 6:30 on the east coast. becky will be back from assignment on monday. a lot of conjecture, a lot of rumors swirling. you seem to be on assignment at the same time a lot, but we're not allowed to say where. so all very secret. >> here on live tv on the spot with the lights shining in your eyes. are you willing to divulge? >> just think whatever you want

to think. >> well. >> with you in that hoodie, mob's thinking anything has gone on. >> zero? >> not your type. not that there's anything wrong with that. >> the most amazing part is that the executive producer in the show is in our ear right this second. just think about that. >> the voice of god, what is he saying? >> is he mad at you? >> i was about to make a horrible joke that i will not make. >> don't do it. >> becky's husband is what you're saying. >> that's what i was going to say. >> it's official. you want to listen closely here. facebook was priced last night. >> was it? >> yes. $38. >> hold on -- >> $104 billion. >> who is the ceo? >> zuckerberg. >> what kind of clothes does he wear? >> hoodie. >> are you wearing

flip-floppers? >> is he a flip-flopper? >> he used to wear adidas flip-flops. >> he sort of grew into the hoodie. the richer he got. it's weird how they do it, i'm with you, i don't really understand, most ipos, maybe it's just -- >> it's building it up, making people excited. they want to do it differently. >> i hope we're not overdoing it. >> too late. >> there is one thing to say. it's a great american story. this is a milestone in terms of american innovation. >> we haven't talked about -- julia will join us. maybe what's not such a great story is spiderman.

>> let's explain a little later -- >> yeah. he'll save a lot in capital gains. a couple of senators say that they want to nail him before he leaves. but then the journal makes the point if you just make the country a place where people want to come like it's always been instead of where people leave because of a punitive tax policy -- >> i think we have to do that, but nail him on the way out still. >> i can understand how he -- i don't want to give money to harry reid and nancy pelosi. i can see his point. >> i hear you. >> president obama welcoming -- if it could go to the deficit, then i'd do it. welcoming g-8 leaders to camp david. the ongoing euro crisis and

shakeup of global leadership likely to take center stage. joining us now is bore h ocbob hormats. could i talk to you about jpmorgan and greece and spain and tax policy and what he tries to do about tax policy. but why don't -- you've been in the business a long time. let's start with facebook. how many shares you were able to have allocated to you and when you plan on blowing them out. >> the key point is i was in that business, i'm not anymore. so i have really not spent a great deal of time over the last several months addressing this issue. but i enjoyed your conversation. >> it's fun to watch. >> it is. >> let's draw on your international and wall street experience and give us a run down of the last couple of days in greece and then spain.

>> i think what we're doing here, commenting on the actual financial markets is secretary geithner's job rather than the job of the state department. but regarding what's going on in europe very important to the united states. important trading partner, investment partners. allies. and one of the basic elements of the g-8 meeting will be the opportunity for the presidential leader to lead a conversation among the leaders of the g-8 on the kind of issues it that europe is facing, comprehensive discussion which is aimed at looking at ways in which they cannot only strengthen fiscal consolidation, but also strengthen opportunities for jobs and growth. so i think there will be a good conversation giving the president and other leaders an opportunity to thoroughly discuss the issue. >> but how much leverage, with all due respect, how much leverage does the united states really have here considering that the united states has already opted out of help to go

bailout europe, it's basically saying we're not going to interveneg think it's a matter of leverage. the president and secretary geithner have had very constructive conversations with the leaders of europe on the issue. europe is taking the lead. we think europe has the political will and the resources to address this issue. so it's not a matter of leverage. it's a matter of our engaging with them at very high levels. the president and secretary geithner, chairman bernanke and others, on the measures that they're taking, as i say not only to deal with questions of fiscal consolidation, but also to get things moving in terms of job creation and growth creation. so it's not leverage. it's more engagement and ongoing discussions directly with european institutions and in conversations in the imf. >> do you really have confidence that europe has the political will and that that political will is one in the same considering that it feels like

in recent weeks that the european countries are kind of going their own way with regards to what they want to do with europe? >> i think we should not jump to any conclusions. the europeans certainly are having lots of conversations. as you know, hollande made his first trip after he was sworn into berlin to talk to chancellor merkel. so it there's a lot of conversation, a lot of work going on. it's a serious issue, but -- >> your new job and everything, i guess -- i wanted to ask you about should the volcker rule be tightened to disallow those jpmorgan type trades, bob? see, i call you bob, i'm going back -- we go way back. >> you've been calling me john

for 25 years. >> we go way back. just answer. what do you think, should -- they might ask you. >> we go back as to far you'll know that i can't answer that question. >> all you can do is just answer state department type questions. there's a big piece on hillary in the "usa today." a glowing piece about her dogged determination and just how focused she's been for the last 3 1/2, four years. >> she is great to work for in is variety of ways. first of all, she's a terrific leader and very inspirational as you know. second, she pays a great deal of attention to the kind of issues that we're discussing. she is very, very effective in addressing issues that relate to american business. she's been a very strong supporter when she goes abroad. >> what do you think she would say to do with the volcker rule? >> i think she would give you the same answer that i'll give you and that is let secretary geithner and chairman bernanke and others address the issue.

but the areas where the state department does have a strong role and that is strength then efforts in the area of exports, working with other countries to improve the rules of the global system to make sure they're fair, particularly focusing on issues like intellectual property protection which is a big problem. we had an opportunity when i went with her to china along with secretary geithner to discuss this issue this is a big problem for american companies. making sure it's a level playing field it for private companies vis-a-vis state owned companies. these are the kind of issues that we're focusing on here and she's very effective, focuses like a laser. >> have you ever heard anyone question whether the corrupt fair practices law, whether it needs to be updated or whether there's some way to streamline it? if we call it a bribe here, may have a totally different name in

india. do we need to spread our morality around the world our do we need to try to win? >> i think the question of corrupt practices is something very important here because it gives credibility to the american business community, enables them to resist pressures around the world when people ask for bribes and other things. i tell you, more and more countries are beginning to realize that subscribing to tougher measures on corrupt practices give them as governments more credibility with their people. one of the it things that a lot of people resent around the world is when they see corrupt practices. and i think you've seen for instance the russians and bribery conventions. so things are happening that are moving the direction which makes for better business which is eliminating or reducing

dramatically corrupt practices. >> good there's no more bribes going on in russia. >> i'm not going that par, bu f but there is a lot of pressure on the government which they have recognized for deal with some of the issues. it's true it in a lot of countries. for american companies, it's a big problem. i think leveling the playing field on bribery, corruption, transparency, is a positive thing for american companies and ultimately more are moving in that direction, although much too slowly for our tastes and therefore we make a big point of it. >> all right, bob. you always wore those white collar type thing even when you were -- >> very european. >> those go back and forth between the government and -- we were expecting a hoodie, but you didn't play along. >> you haven't even asked him about facebook. >> first question i asked. >> when i'm on your show, i have

to look right. >> you do. and you do. but you look right but talk left. thank you. >> thank you. >> very clever. comments, questions about about neglect y anything you see here, shoot us an e-mail, tell us how much you hate the hoodie. bob hormats outlined the big issues. up next we'll turn to a trader. ♪ why do you whisper, green grass? ♪ [ all ] shh! ♪ why tell the trees what ain't so? ♪ [ male announcer ] dow solutions use vibration reduction technology to help reduce track noise so trains move quieter through urban areas all over the world. together, the elements of science and the human element can solve anything. [ all ] shh! [ male announcer ] solutionism. the new optimism.

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now let's get a check on what's happening in the markets from a currency perspective. david woo is joining us from new york. great to have you on the show. and considering the facebook has

been sucking the air out of the room, it's nice to talk about something else. euro continues to go down. how much longer do you think this risk off and pro dollar situation will continue? >> i think we're getting to the end of it. very short term, i think investors are going to be waking up to the possibility of the next few weeks that maybe greece doesn't matter after all. i believe euro will be stronger without greece. i think greece has been blackmailing europe for too long and potential greek exit from the euro is actually going to strengthen the euro. >> my feeling is if there was a greek exit, particularly disorderly, there might be a knee jerk reaction to the down side for the euro and you're saying up side. to where? >> the way we're looking at this, maybe a messy exit of

greece from the euro could take euro down to 120 and then after the thing is done,ic we can pop back up to 130, even 140. i think the point here is unlike a year and a half ago, greece has the framework to ring fence the other companies against potential contagion and i'm not sure to what extent the market is right to assume that a greek exit makes the exit of other countries much more likely. if anything it would be so ugly that it sets a good example not to go down this path. >> i understand a plan b is being worked on by the european commission in case greece does leave. so fil so my question is how much is already in the euro at this level. >> we look at positioning data, the short euro position. a record high. i think investors are very

underweight european assets. the market is much better prepared this time around plan thas year. i think a lot is already in the price. and from that point of view, the potential resolution of this thing is potentially supportive for the euro at least medium term. >> very interesting. thank you so much for joining us today, sir. >> coming up, we're back on the subject of fb, that facebook ipo. even more important than you might think. >> the air is leaving the room. >> unlocking the social network secret secrets. this are pictures of the ceo giving a speech last night. they'll be showing up on his public subscribed facebook page.

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i think they bled everything they could for this ipo and done a great job of getting the price up as high as they can. i don't think anybody can complain. i'm not expecting a big pop. i think the last was chipotle. it was a no brainer for us and hasn't looked back since. >> what would make you more positive towards facebook? what would make you want to be an investor? do you want to be a better

business model, monetization of mobile? what would change things for you, howard? >> you said it there. there's good social and bad social. facebook falls in the category of good social with great plumbing as a utility company but i don't think it has the soul that i look for. you know, they bought some soul with instagram when that deal finally happens. i think the world will now fragment with facebook's ipo into much more microniche verticals. i think you're seeing the biggest of the big and what you will see now are more unique and social networks like what we are doing. whitstream, comedians. ability for people to take that social graph and grind it and fine tune it and do magical things. >> real quick, you have a lot of things in the early stage.

tweetdeck, i use, which do you think has the most potential? >> good question. they're all very different. buddymedia. i was in a room with mike on cnbc yesterday morning has incredible potential as basically training wheels for marketing departments and ad agencies on to facebook. life lock and the identity theft market i invested back in 2006 is one of kleiner's fastest growing companies still. that's a big theme as facebook and twitter and these companies grow. tweettech was already purchased by twitter. i think based on today's prices, twitter is the most interesting. >> thank you, howard. appreciate it very much. hope to see you soon. i will put a little dollar sign. you don't even know what i'm talking about. >> no idea. coming up, facebook and beyond.

>> lee cooperman. he's right here. it's very important to understand how math and science kind of makes the world work. in high school, i had a physics teacher by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies.

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finding real value with your investment. millionaire hedge fund lee cooper man, where to put your money and the biggest ipo in history. a facebook frenzy reaching a fever pitch. >> apparently they have priced the ipo of facebook. >> now, the first trades a few hours away. why venture pioneer is worried. >> meet the man who launched the fastest live ipo in human rights weighing in how to profit from start-ups and social media. the second hour of "squawk"

starts right now. >> good morning. welcome back to "squawk box," here on this facebook friday. i'm still in the hoodie. becky is off and will be back on monday. facebook's ipo, pricing at $38 per share. it will be the biggest internet ipo ever. more on that in just a moment. let's get you up to speed on other headlines this morning. the unit responsible for the trading loss reportedly holds $100 billion in high risk bonds that says those are similar to those that triggered the 2008 financial crisis and g8 leaders set to meet at camp david as they come up ways to contain the

european debt crisis. president obama will have his first meeting with mr. francois hollan hollande, and verizon customers, i am one of them, who use large amounts of data will be paying more one way or another. customers who upgrade to a new phone for a discount won't get the unlimited data but can still get it if they pay full price for a phone. dow opens up 41 points higher, and s&p 5 points higher and nasdaq as well. >> thank you. facebook headquarters are really abuzz this morning. employers are in the missed of the all night hakkathon. joining us from facebook headquarters in california. what is the feeling over there, julia? >> reporter: mandy, it's only 4:00 a.m. the facebook headquarters behind

me are packed with over 500 employees in there right now, with facebook's 31st-this is a facebook tradition -- audio difficulties -- and outside employees day jobs. they take some breaks, i hear, to play some street hockey. it was all-nighters like this one that produced the like button, facebook chat, the precursor. one product we hear was created last night -- >> okay. we do apologize. we seem to be having some of connection problems. we'll try to get to julia as soon as we can. >> one of the world's leading value investors, lee cooper man, chairman and ceo of naked advisor of goldman sachs asset chairman and ceo. great to see you, especially today, lee. looking forward to the next hour. when we talked to warren,

another great investor, he's like, internet, stuff like that, i really don't understand it. he finally bought some ibm, one of those newfangled companies. how about you? do you have something on facebook? >> i do. it's not generally my wheel house. i think they could turn out to be the gateway to the internet. it's speculative to valuation. >> 500 million users. did you ever buy google or apple? >> i own apple three or four years. i owned google. citrux. we invest in technology. >> are you going to participate in the ipo of facebook? >> we indicated an interest and

hopefully got some shares. >> will you buy it when it opens. >> if it opens at $55, would you buy it? ? no. >> what's your number? >> i'm not the guy with numbers. generally speaking we're more value oriented. if you ask me would i buy google at 13 times earnings or apple at 11 times earnings or facebook at multiple revenues and earnings, i would be inclined to go with the lesser valued companies. setting value is an important ingredient in open position. i would not -- >> you're smart. you remember the internet bubble and this is not the same. you know we have a guy coming on today, lycos was his company. remember what it was like back then? 900 million users, $4 billion in revenue. this is totally different. >> just look at apple. >> but they make things. >> no comparison in valuation

now, the bubble period. >> with regards to apple, you loaded up on more apple stock. since the first quarter it dropped 6.5%. >> i noticed. >> how do you feel about that? how does he feel? he feels -- >> i would say apple -- we like companies growing at a rate well in excess of the multiple we pay for earnings. apple $110 billion in cash, 12 is kind of multiple. we think over the next three years, probably grow 17% per annum, much lower than they've been growing, very respectable valuation. that's one of the many stocks, the market is growing because of what's going on in the world. there was a comment i came across a while ago, a good friend of mine, joe rosenberg in business 50 years, thoughtful insightful fellow. you can have cheap equity prices and good news but not the same at the -- at the same time.

we have this issue of the debt ceiling, which will come into play in december, the fiscal cliff of 5 or 600. >> and we have some debt. >> and it will define the future of the country. very important. on the republican side, not all the time, in this particular case, to be honest with you we need a unified government, decision making and leadership. right now in the current system, these guys don't talk to each other. it's a real problem. >> we've been in election mode at least a year and a half. >> we don't know what any outcome will be. i think i'd almost -- i want a republican sweep. i'm not sure what's worse, a democratic sweep or divided government. everybody says divided government is good. i think we need decisions to be made. these folks can't seem to make decisions. in the united states we have a

lot of issues and europe we have the issue of grease and eu. the fact that europe is in recession. then you look over at china, everybody's focused on greece and china is so much more important than greece, a hard landing or soft landing, a lot of these issues are played in the market. the only good news i see is it is largely reflected in the stock prices. >> yes. you will be staying with us the whole hour and we'll hit on some issues you brought up. in the meantime, let's get back to julia. apologies, outside facebook headquarters. take it away. >> reporter: that's right. despite the fact it's 4:00 a.m. feels like the middle of the night. there are over 500 employees at facebook headquarters behind me. they're participating in the 31st annual hack-a-thon, a tradition, that's fueled by red

bull. and they're trying to couple with new creative products and ideas. it was all nighters like this one that led to the production of the like button, ideas like facebook chat and the precursor to facebook's timeline. one of the products we hear was created last night was an app called lunch roulette. employees can submit their name to be invited to lunch with a random assortment of their colleagues. we'll have to see if that is something facebook decides to roll out more broadly. this whole hack-a-thon is something that goes back to mark zuckerberg's college days, when they would have a lockdown pulling all nighters ahead of the rollout of their product of facebook to college campuses. zuckerberg kicked it out in front of a new jumbotron called hacker's square with an employee

q & a and hosts one every friday and doing this early. some people on facebook commented zuckerberg's remarks reminded them of an inauguration. between 5:00 a.m. and 6:00 a.m. pacific, employees start to gather. we will see a lot of employees not here last night coming in very early this morning in order to watch zuckerberg make more comments and at 6:00 a.m. pacif pacific, in the countdown to the bell ringing itself will be broadcast in new york and also at facebook's offices around the world. andrew, i hear that zuckerberg is here right now and would not dear leave an event like this one but ceo cheryl sandberg has gone home to catch some shut eye, which is what i expect many employees to do this morning. >> thanks very much. >> if you have comments or

questions on "squawk," including the hoodie, is not getting a terrific reception, we may have to take it off. >> very tough. stay tough. >> joe, you knew from the beginning. fiscal us on twitter. i've been told i look like a homeless person. still to come this morning. >> did you steal it from a homeless person? >> grim indicators from the markets as of late. where you should be watching and putting your money to work with our guest host, leon cooper man.

welcome back, everybody. let's look at the futures. interesting picture, looks like we could get an open to the upside and futures have been climbing over the past half hour or so. could be a gain of 5% or 10%, i guess, if this sticks. andrew. >> our next guest is a pioneer in the capital business.

helping to build global companicompan companies on the apple computer and is concerned about the public's overex-suberance on th facebook ipo. i know you were going to wear your hoodie but you decided to -- >> i'll let you be the star. >> i'm losing points already. you're a bear on this. why? >> that's not fair. i'm just being realistic. i think if you're going to get stock on the ipo, highly unlikely with all the hoop law you will see with this decline on this short period therefore. there are a lot of people we all know are traders will get allocations and will flip it. the question is how fast they can flip it. >> they increased the price in the last minute. what does that say to you? >> they've done everything they can. i think the underwriters have to be complimented. put every bit of news they can,

put out information about mobile and asked gm to put out an announcement to say they are withdrawing $10 million for advertising. >> what did you make of that timing. one thing they're pulling for very good reasons and paid advertising isn't translating into vehicle sales. at the same time, timing literally days before the ipo. do you think there's symbolism to stick it to facebook or put out a warning sign or what? >> i doubt that. i was joking about the coordination of the two events. i think there are a lot of large advertisers putting a lot of money in facebook. it's what i've been saying, people are going to measure the results of their advertising. analytics have become more and more important today in the internet. what you can do with gross rating points on television and a lot of other places, you can measure. >> the price increase is one thing but size, 25% more from guys saying, i like this price,

please, you can have mine, take it, please, that doesn't mean anything? >> you're forgetting something. the underwriters, i'm sure they would have considered selling at the original offering price but the underwriters wouldn't take it. what you're seeing is typical underwriter action. if the markets are overheated, you satisfy that wby changing te price and reducing the ex-un brans. i think the company is saying -- >> with goldman sachs getting out even more, does that say anything one way or another? >> i don't think it does. they would have been out six months later. everyone knows there was a large overhang. they had a chance during the last six months to get out, the last years in the second market. >> what would constitute success

for you. anything more than 50% would be -- >> making 50% a day? >> the real world. >> we're talking about it. this company is worldwide significance. i'm sure people are up in the middle of the night and other parts of the world watching this. we haven't seen this kind of thing. i've been around and so has leon and seen many other issues that had enormous excitement. >> handicap it. a year, two years from now, facebook looks like what? its stock looks like what? >> revenue, all the things we're looking at. >> the end of the day, this company will be measured on its growth rates compared to the companies leon measured, google, apple, linked in, put them in a chart and say where are the growth rates. that will determine what type of multiple will sell it. in my opinion, i do not facebook is a -- i think facebook is amazing. think of a company with $200

million in revenues in 2008 and is now going to do probably, i don't know, certainly close to $5 billion in revenue. it's unbelievable. we haven't seen this in a long time. i think the company has a very good future. i would not bet against the future of the company. >> are you confident they can arrest what at this stage seems to be a slowdown in the growth rate, for example their online ad revenue. >> you're giving exactly the answer. a slowdown is going from 50% growth rate to 38% growth rate. we're not talking about companies exactly flat. >> does it justify this high valuation? >> that's the question. i was saying a few months ago, where do we see the first quarter, after it was public. we got the first quarter. it wasn't terrible. most of the companies i know would love to have that growth rate. most companies measure quarter to quarter. we know one thing about the

stock market, if there is disappointment, stock can change overnight. >> where are you on mobile, facebook and mobile? >> mobile is the most exciting area, the most penetration of advertising, everybody is trying to figure it out. everybody thinks this is the year of mobile. this is the third year i thought it was. >> you think facebook has figured it out? >> they haven't solved it yet. >> that has to do with configuration of mobile page and layout. >> everyone i know wants access to facebook on their tablet and smartphones. >> half their audience is accessing it on the mobile phones. >> having to get the ads on those as well. snow that is the challenge. >> is that the challenge. >> when everyone talks about it, it's very true. that's their first biggest challenge. the second is they have a very high penetration in this country. they're now, i think i recall 7, 8% in some areas of the world.

can they increase penetration. the big question, china, will they get in there, where they need to get the growth rates. >> we were talking a moment ago about some concerns with companies like facebook having access to huge volumes of personal data people overshare these days and could get into the hands of the government and china and opens up a whole new can of worms. >> it adds up to challenges, you have mobile, advertisers measuring responses from advertising and market growth rates. these are the challenges ahead. they have prized this ced this pretty full price. i am certain there will be a pop. if there isn't a pop, i will go on record, i will be shocked. before you cut me off. it's a question where people who have this exuberance in the

after market and say, i want to own facebook and don't care what the price is. what you will say. >> people who are true believers will hold on to what they've got or buy and those who don't believe cynical and don't usually traffic in 20 times revenue companies are cynical. when you're saying 20 times revenues and god knows what type of earnings, high expectations. i don't want to sound like a sexistnalogy, like a beautiful woman with a blemish and all of a sudden there is a blemish and downside. >> i love that. the graphic says it all. >> you see a lot of emerging companies and have a lot of disrupters on the show. is there anybody you've seen who has a product comparable or better you think could emerge to try to compete with facebook? is there anything out there at all? >> the answer is, no. on the other hand, i will tell u you we have a lott of elot of e

companies in our portfolio. it's hard to conceive somebody having that valuation. there are a lot of companies with growth rates. >> thank you. we will get to exuberant. you can be ex-sub rant. >> overex-sub rant. >> keep it calm. coming up, former lie cycos ceo turned venture cap litalist and venture insider to talk us to about facebook ipo. where do you think facebook will close on its first day? you can put your comments on facebook.com/cnbc. winners will be announced on the closing bell today and receive a cnbc prize pack. all entries must be submitted today at 2:00 p.m. eastern. like in a special ops mission?

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november. moody's down grading 16 spanish banks including the eurozone. not a wholly unexpected move. and greece downgraded from tripbbb to c minus and yahoo intends to use gains from the sale for a share repurchase of its own. a dividend depend is also sent to be possible. new hope for melanoma patients with brain tumors. a glaxco experimental drug may add months to the lives of such patients according to the results of early trials. it shows shrinking of tumors treated with that drug. if you have any questions or comments about anything you see on "squawk," keep them nice. e-mail us and you can also fiscal us. we're all on twitter. sidewalks cnbc is the handle for the show.

and futures info in a few minutes. it seems to be climbing ever higher. just nine months from the inception of lie cos to its ceo, the man behind the transformation, bob davis and now promising ventures. we'll speak to him about facebook and the -- rd." then there was a moment. when i decided to find a way to keep going. go for olympic gold and go to college too. [ male announcer ] every day we help students earn their bachelor's or master's degree for tomorrow's careers. this is your moment. let nothing stand in your way. devry university, proud to support the education of our u.s. olympic team. if you made a list of countries from around the world...ucation ...with the best math scores. ...the united states would be on that list.

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welcome back to "squawk box." investors looking to 11:00 a.m. business time. the largest internet ipo in history. pilots union leaders at united continental following a strike vote that has a new contract. negotiations going on since 2010. jpmorgan ceo jamie dimon agreed to testify on the $2 billion trading loss. the panel has scheduled a hearing for next tuesday and another june the 6th.

in the meantime. time for something off the beaten path. the largest fishing tournament in the northeast. the manhattan cup kicks off today and proceeds go to wounded warriors fund. joining us with another top notch fisherman, wade boggs, is that right? >> reporter: that's right. i'm here where 200 crazy fishermen will head out on the pier into new york waters to raise money for the wounded warriors project, cystic fibrosis and awareness. i'm here with one of the greatest hitters of all time, wade boggs and one of the greatest fishermen of all time. frank. what are we going to do? >> bass, strike bass, we will raise money for cystic fibrosis and we will do it all here in

new york city, steve. >> you've been giving your time. tell us about it. >> any time you can have conservation of fish iing i is -- and also the wounded warriors, i'm -- i grew up in a military fa. these guys that serve our country and come back from these wars and put a little smile on their face and take pictures with them and get them on the water and have them catch some fish. >> you're one of the greatest two-strike hitters of all times. what can i tell my kids to do at 0-2? >> don't have the fear of striking out. >> reporter: speaking of guys who don't have the fear, guys friends of cnbc, wilbur ross helped us out. anthony, gary came out big and a lot of the guys from "fast money" helped us out. joe, guy, tim. i will toss it back to you,

mandy, we're having great fishing and doing good things for the charities. >> good for you. we've been watching all week and now doing fish watching. let's get back to our guest host. lee, thank you for sticking around, chairman and ceo of am -- omega advisors. why did you want to talk about these chats? >> basically, a new environment, where if you like to buy low, you get excited. i want to share with your audience some things i look at in arriving at a conclusion. i would say something, a 1.7% 10 year u.s. government bond rate and 1.4% is giving off a message none of us should ignore. we're in a world of lesser returns privilegely than we've been used to historically. that doesn't mean the stock market is unattractive.

i look at the alternatives available to me, cash, government bonds, high yield bonds, equities, i've been of the view and continue, equities represent the best wheel house of the neighborhood and we don't know if it's a good neighborhood or bad neighborhood, important point. there's a tremendous amount of uncertainty incorporated in prices. i think the economy is okay, not great, okay. it's not a feel-good economy, as i say. with the united states, the labor force grows 2% a year and labor force itself grows 1% a year and need 3% growth to dent unemployment and not getting that, getting 2%. 99% versus 1%, that type of dialogue continues. the economy is growing, 2, 2 1/2% per annum, looking over the next four quart e, profits rise 5%, dividends rise. i think the economy is on the

plus side. secondly, i don't know if you have these charts available, we're in an environment of near zero short term interest rates. low long term interest rates, have central banks all over the world. historically they said the central bank writes the market for wall street. and the head of the central bank is telling us, he wants more growth and inflation. >> money supply versus fed funds. >> that's not my chart actually. >> you didn't even order that chart? >> no. exhibit 3, if we can coordinate here, i guess we're uncoordinated, basically, valuation, if we can give you a little glimpse, if we can get it up, i don't know, the last 50 years, the s&p multiple has averaged about 15 times. when the multiple averaged 15 times, the 10 year u.s. government bond rate average, 6.67%. we're sitting here now, the

multiple on the market is under 13, around 12.5 times our estimate earning somewhere arou around -- >> could you finish? >> for 50 years, the multiple on the market was 15, the multiple in the market was 15, the 10 year government bond was 6.67. the 10 year government bond is now 1.7% and the multiple in the market is 12.5. over half the s&p companies today yield more than bonds. that condition has not existed for over 50 years. investors are booking into their expectations very conservative expectations. they may have a very optimistic set of expectations for facebook but for the market as an a whole, they're quite depressed expectations. for the last five years, the public has been a significant liquidator of equity holdings and significant buyer of bonds. i step back and look at 1.7% bond, to me, like picking up

dimes in front of a steamroller, very very inadvisable policies. historically, the 10 year u.s. government bond normal times has yielded in line with nominal gdp. what does that mean? if real growth is 2-3, inflation say 2-3 as a number. that means nominal gdp would be growing 4-6%. that means basically in a normal environment we'll get to over the next two or three years, the 10 year government bond could gravitate to 4 or 5, 6%. at 4 or 56%, you have a significant capital loss in your holdings. i don't think people appreciate that. right now, it's a fear factor driving them towards fixed income. equity values are as attractively valued than anything i've seen. there have been 39 deals of $300 million or more of market value. the average premium was 35, closer to 40% over the last sale. we have to understand, when you buy a share in business, you're buying your share of brick,

machine, building power and that's been more expensive in the market today versus history and interest rates. >> you want individual names. what do you want? >> it's almost a to z. we'd like to find companies in two categories, multiples of earnings, less than the growth rate you will get or selling at a significant discount what we perceive to be provide market value. our touchstone has been most publicly traded companies have two values, market values at a thousand shares and private values that a potential strategic investor pay for an entire business. we like to find private companies to discount public company value for discount for change. we missed 39% of takeovers and got two. one is 100% and sunoco.

we had a decent sized position there. >> sunoco. >> takeovers we only had two put before the takeover is done, we will have more than two. a name we like, apple, 11 times earnings, growing, we think, at 17%. aig, selling around nine times our estimate of earnings. we think a growth rate camble to that. -- comparable to that. capital, seven times earnings, growing about that rate. interesting health care business, express scripts selling at 13 times earnings, we think 20% a year. google. we talked this morning about facebook, google, 14 times earnings growing, 18% per annum. halliburton, growing 12% a year. no shortage of names. >> metlife? >> metlife, right. metlife -- >> qualcomm. >> qualcomm. >> i think you bought more

jpmorg jpmorgan stock. we didn't have time to go into. that is something we need to go into. >> it was a bad bet. wasn't bet your company bet. they earn 15, $20 billion, a $2 billion loss, maybe a bit more. stocks at six times earnings. you know. jamie was on a pedestal, got knocked off the pedestal, still a hell of a ceo. you have a decent yield. the yield is probably 3 1/2%, i'm guessing presently. the alternative is keep your money in money market earnings, earning zero. there's no shortage of stocks. not an environment to be on margin, borrow money to buy stocks. there is an amount of uncertainty around the world. you have to make certain assumptions. our assumption is the u.s. does not have a recession and china, hard landing and growth decelerates to 7, maybe 8 opposed to higher numbers you have seen previously. ultimately, the ecb, with the

imf, with germany, with france, with the united states, with china and japan, they will deal with the problems in europe. greece will ultimately exit the euro. when they exit the euro basically, they will have put in place a wind fence to protect the system. those are judgments you have to make. if those judgments are wrong, then you have to rewrite your script. >> we'll be back with you. there was an interesting piece in ft, either have this union or you don't. and the minute greece exits you don't have a strong union anymore. >> all or nothing. >> all or nothing. coming up, historic event, andrew and the hoodie. no. facebo facebook, hence the hoodie. >> sweater of the month? >> maybe sweater of the month? the next hour, henry blodgett, ann winslet --

still to come, he started the fastest ipo in nasdaq history, a mere nine months from inception to offering, bob davis, former lyco ceo is in the business of investing in start-ups with a focus of digital media. this internet pioneer sounds off on facebook ipo and future of social media, when "squawk box" returns. ♪ i can do anything today ♪ i can go anywhere ♪ i can go anywhere today ♪ la la la la la la la [ male announcer ] dow solutions help millions of people by helping to make gluten free bread that doesn't taste gluten free. together, the elements of science and the human element can solve anything. solutionism. the new optimism.

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what happens when all your employees becomes millionaires overnight? what changes once the company becomes public. bob davis hosted the former internet giant lycos. sounds bittersweet and served as president and ceo, an old friend of "squawk box" and currently a partner with highland partners. what we need to know, what's similar to what is happening today and different happening in the heyday. >> funny as much as things are different, they remain the same. good to see you again. here we are with the big bang. in 1995, netscape and 2012

facebook. the offering that allegedly changes everything and we look how the market evolves as it relates to internet stock, on to something new and powerful. and we will be talking about years and years to come. >> we stopped talking about netscape. >> we did. peter says, buy what you know. 900 million users around the world right now, no facebook. that's a number that increasess a stronnomicly everyday. a powerful phenomena that doesn't show any signs of letting up. you're hard-pressed to find a person not on facebook in some fashion or another. that's a pretty strong statement. >> what would you give in terms of advice to mark zuckerberg so he doesn't go the same way as facebook. but you think it could not happen but history shows it does. look at yahoo, in 2002, people would have sadia hoo will hold its crown a long time. what should facebook be doing,

take out competition? what would you say? >> in 2002, no one would have believed yahoo! was not invincible. that tells us how fleeting the market is. first, facebook has to get mobile right. the achilles heel and i believe they will get it right. a hole in two fronts, the user, they tried to do that with instagram. we'll see if that succeeds. from the revenue standpoint the amount of inventory that sits there to put an ad on a mobile page compared to what i can do on a web page is much smaller. to make that revenue stream click is a big test. and to maintain a fun factor or cool factor. how does facebook remain the hip go-to see it years from now? in 2002, it would have been incredible to say yahoo! is struggling the wait is today but it is. as we look several years ahead, is facebook that strong. does it have or will it have

this afternoon anyway is $16 billion in cash. $16 billion in cash can take out a lot of threats. i think the move they pulled with instagram was brilliant, by far the largest online mobile network that exists today. in one quick stroke, they took out a potential competitor and turned that into a potential asset. >> who else do they take out? >> that remains to be seen. with the market cap these guys have, anyone is vulnerable or an opportunity. you have to look at, as hot as the marketplace evolved, what do they need? would facebook like to own zynga some day? 12% of its revenues? i think not. it's more likely to see a whole host of smaller players successf successful, one or two things, either audience, facebook doesn't really need a lot of, they're doing a great job on their own building audience. two, more importantly, revenue,

something that can help facebook drive their top line will be very important. >> we saw what happened to lycos. co competitors come and eat the lunch of other businesses we didn't think could be eaten. is there any other business out there either individually or collectively you think two, three, four years out, you think of the world of social media somehow takes the place of facebook? >> i wish i had a pithy answer for this but i don't. facebook right now to me is indestructible for the foreseeable future. i have struggled to see how something could displace it. that's not to say it won't. it's happened again and again. it's been rare over the history of this country anyone has stayed on top for a long time. for the foreseeable future, i don't see how anyone displaces that. the deciding thing, is there no meaningful momentum anywhere. there isn't a close second or third in the marketplace. no one even comes near what

facebook has been able to accumulate in terms of audience size. going along with it, there aren't many meaningful market trends that says something is moving that way. if you look to see what might be, it's not there. as i said a minute ago, instagram was a threat but instagram is now facebook. >> very interesting making an observation. multiples are a function of confidence. on the one hand, the stock market is trading at a significant discount to historical multiple, substantially different interest rates than ever sold at. we're back to pre-1958 world. prior to 1958, stocks yielded more than bonds and now we have a situation stocks are yielding more than bonds and facebook at 20 times revenues. i for facebook to be successful, we have to have a world that's rational and grows and disposable income. >> is the valuation rational at

all on a relative basis? >> there's risk associated with the valuation. as i said, beautiful women without a blemish, if something goes wrong, for the foreseeable future, we're discounting many many years into the future. i assume zuckerberg will pull it off, be successful. i'm in the business of trying to pull it off, whether facebook from the opening price today, if you're lucky enough to get it on the offering is apple form of google or a basket of other companies remains to be seen. there is a lot of risk associated with that 20 times revenues. >> google, when it initially came out with its market cap was perceived as not being rational. a lot of fear. lycos, when we had our initial public offering, trading at $250 million the end of the first day and sold the company for 2 of $5

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we want to say a huge thank you to lee cooper man for spending the last hour with us

and more on the biggest ipo ever. henry blodgett joining us along with "squawk" master. do stay with us on cnbc. if you're just joining in, you're two hours too late. >> the facebook model relies on display ads sort of like google but doesn't have the same purchasing that google does. when you go to google, you're se seeking something out. facebook, you're looking at photos from your dad's fishing trip. i'm not convinced they can still grow this business in a way that still treats users well. >> you ask me what i'd buy, google 13 times earnings or apple at 11 times earnings or facebook at multiple revenues -- >> you can't really -- >> i would be inclined to go with lesser valued companies thinking value is more important

than position. >> it's a powerful phenomena that doesn't show any signs of letting up. and can you say hi to a person not on facebook, that's a pretty strong statement. and development. some new members of the team will be introduced. the chairman emeritus will distribute his usual wisdom. and you? well, you're the chief life officer. you just need the right professional to help you take charge. ♪

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since the dawn of time, humans have felt the need to share milestones in their lives with others, victories, achievement, photos with their pets. >> then came facebook, the social network set to trade at 11:00 a.m. eastern time today and second markets and tumbler. >> aour guest host, henry blodgett, business insider. the third hour of "squawk box" starts right now. >> welcome back to "squawk box." first in business worldwide. i'm joe kernen and mandy. becky quick is off today. futures are off 33 points. we're all waiting for 11:00, as all of you are for that first

print for facebook. >> we are counting down. it is the largest internet ipo in facebook history. facebook will be pricing its ipo at 38 bucks per share. we'll get to that in moments time. first, other stories we're following. the unit responsible for jpmorgan chase's $2 billion loss has bonds that are similar to those that helped trigger the financial crisis, and the stock dropped to its low of the year, ceo jamie dimon has agreed to testify before congress about the bank's recent trading loss. as for our global headlines, what's happening in europe, the biggest weekly decline since november. moody's down grading 16 spanish bank banks partly expected. the largest bank and down

grading it from triple c to b minus that it may have to leave the yoeurozone, a contingency p in place by the ec as we speak. >> let's get back to our story of the morning. it is the facebook ipo. everybody has been talking about it. kayla has pretty interesting information. before it was offered, facebook traded on the second market. you have exclusive data. >> i do. the trade won't be its first. four years ago, a former employee wanted cash. and contacted a second market private platform for exchanging deals and struck a deal for $3.50, valuing facebook which had little or no profit and $8.1 billion in 2008. then came cheryl svanberg advertising and facebook unlike any other stock sunk to a low

changing hands just over a dollar at a valuation of $2.5 billion. in 2010, facebook started making a profit and entered into a contract with zynga causing it to hit $9.82 and that's when bono's elevation partners got in and it split its stock 5 for 1 and started happening weekly and caused prices to skyrocket and valued it at $50 billion even as second market investors were bidding $16 billion higher. pandora and others knocked their value at $80 billion, a price of $31.46 per share. in the last year of its private life, it was range bound, a valuation above $80 billion and until the final auction, investors knew those new facebook shares would be hard to come by and clamored in to get in at $42.72 a share or $107

billion. she shares originated from former employees leaving the company and looking to cash out on stock-based compensation. on the other end of those trades were asset managers and hedge funds representing half of all buyers. in the mix, microsoft and sovereign wealth funds and secondaries created for shares like facebook only got 0.1 of 1% of those shares. perhaps the most eye popping is this one, apple and google and s&p 500, apple up 300%, facebook is up more than 1,000%. andrew. >> let's get more now on facebook and the craze going on. second market vice president, boydstein off, oversaw facebook's auction at second market. our guests host for the next hour, henry blodgett, ceo. he has written extensively on

the facebook ipo. thanks for being here. where to begin. some people will lose money on this deal, right? they got in too late. >> it will be interesting to see what it prices at today after it starts trading. the public market will continue to value this company the same way the private market did, the prospect to monetize 900 million users? what does ipo mean the second market itself. some said you had quite a reliance if not overalliance from commissions on facebook and now that big chunk of revenue will be taken away. what will make up for the loss of the facebook revenue is the q question. >> sure. the facebook market was a catalyst for us to get into private companies and we see this as a dramatic shift and how other public investors view the private market. this is the access to growth public equity investors are

looking for, experienced it in the facebook market and i think will experience it in other companies. >> i have a question. facebook in all these traced had a right of first rerefusal. if a buyer said i want to get these shares and they said, i don't want you to own our stock. what kind of buyers were they turning away at the door? >> in the beginning was the 500 share rule and they didn't want to eclipse that early on and forced to go public. they're utilizing it early on. in the last year and half there was no right of refusal through second market transactions and are not picking off investors. >> this is exciting. the truth is mark zuckerberg never wanted to go public and happy going private. when can companies go pub like in the seconds market and raise money? >> second markets is trying to mimic what the ipo used to be for small cap companies back in

the '90s, when the ipo market was rather successful and a good opportunity to get capital for growth and liquidity for smaller companies. but i think companies will begin to stay private longer, continue to stay private longer and only go public when they're seasoned and capable of being a public company and being publicly traded. >> in other words, public investors miss out on massive gains. when the companies are ready to move sideways, they go bub liq. >> we have seen a dramatic shift how public investors view these opportunities. the facebook market, over 50% of buyers were institutional public investors. i think they will, just like in the facebook opportunity continue to look for other opportunities in private companies where they can get in earlier. >> when people are buying in the private market, what kind of data and internal numbers were available to them relative to the numbers that came out publicly everyone now has.

investors had different access to information with the facebook opportunity. it was an extremely consumer facing name. they understood the product, most investors utilized the product and able to value it based on their access? the distinction between being public and private today. if you're private, how much data? were there revenue numbers? did people know the profit numbers? were there metrics made available as a part of buying into these shares or totally done on a blind basis? >> throughout the market's four year history, there was certainly information disclosed politically about facebook and their operating success and investors were able to rely on that and other information they were able to get directly on their own. >> obviously, facebook was the biggie. am i correct understanding you still have twitter, foursquare, dropbox. where are you seeing the most investor interest there?

>> facebook was a unique situation for us where investors were able to value the business based on publicly available information. in every other company, we see it as critical for them to disclose financial information to any investor trying to participate. that's what second market has created for private companies to be able to do. >> going back to andrew's point, it's incredibly important. facebook everybody got lucky, opens much higher, everybody in money je money, happy, stampeded wanting to get in early. others, it hasn't worked out that way. the big risk, insiders, know exactly what's going on, full financials, just reading a revenue number in the paper. >> there were so many shares it was happening, maybe you can speak to this, other actions don't happen as frequently and change. twitter, how afternoon do twitter shares change hands?

>> we will not talk about our trading activity and any other issuer. what's important to know is that second market is set up so the company can actually come on and control their market, decide who can buy and who can sell, when that can occur and what information is disclosed to those investors, all company controlled. >> a different question. the other companies that have traded on your market before going public, 12 months after they've gone public, the price has been higher or lower? >> it's been a mix. one perfect example is linkedin. when we traded linkedin, pretty active. the last market was 35. it priced at 45 and later on in the day trading at $20 a share in the public market. >> when you see big wigs like goldman sachs, would you see

this ahead? you have to ask yourself, what do they know we don't with the eyes of the retail example. >> twitter is a classic example. there have been reports of revenue, and all anybody knows and lots of folks say you have to get in with twitter and get you in with the fund, we are taking fees and will go to sicked market and buy it. shouldn't there be information symmetry where buyers and sellers know the same? >> absolutely. investors purchasing second market have the same access as sellers. >> full financial information the way insiders do? >> that's correct. if we're running transaction on second market, the company is blessing that transaction, providing financial information and sellers getting access to the same -- >> i apologize. i thought you said on facebook for example they didn't provide the information you had to just rely on public information. whatever you read in the papers.

am i misunderstanding? >> you're not. in facebook's case, that was our first market that we created. it was the catalyst to get in these other private companies. >> you changed it for the other private companies. >> absolutely. >> is facebook a screaming buy or screaming sell? >> depends where it opens. >> he will stick around and you're taking off. what will facebook trade at? >> i'm not going to say but it will be very exciting. >> true avoider. >> thank you. what should we talk about next? >> maybe facebook. >> let's look at facebook. through the eyes of a venture catalyst. ann win blad will look at the effect facebook will have. and facebook. plus, we will hear from the vice president of another popular social media company about

facebook from the popular blogging site, tumbler. as we head to break, check out the "squawk box" market indicator but be thinking, please, about facebook. no, i'm not wearing that. no. come on. >> please.

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facebook's ipo expected to be -- why is everybody laughing? don't come over here. >> i am. >> don't get that -- i don't want your cooties. get away. get away from me! i'm not wearing it. it's expected mack -- i have muscle. i have muscle right here. >> just put it on. facebook -- >> there we go. you've been anointed by t the -- henry, you wouldn't wear it. mack, put it on. you wear that white belt. it's supposed to be very bullish

for innovation. that's not a cnbc hoodie. you actually own that. >> i own that. >> is it expensive? >> i call it my airplane hoodie. >> a zennia hoodie. we're going to a serious interview here. bullish for silicon valley. ann winblad always looking for the next big thing, partner and co-found co-founder and i'm very interested in knowing where you come down on facebook? buying it at $38, probably sounds good. buying it two or three years ago, as a private investor, that would have been even better. what about buying it on the open today? >> i think anyone buying the open today is investing in the long term future of facebook. that future looks fairly bright to me. if you think about facebook as the core of innovation in silicon valley, there already are 8,000 facebook app vendors,

about 150,000 employees. that represents hundreds of other software companies being created around the facebook ecosystem to drive innovation around social, mobile and cloud, all of which facebook represents. they're really the gateway of all the innovation temples. >> wow. it just -- the mobile problem, you look at all these -- the entire universe. will they solve that? $900 million is such a big number you don't even need to connect the dots between monetizing the advertise iing. just because it's $900 million at face value, it's worth 500 times revenue? >> you have a couple questions there. one is mobile. nobody has really cracked the advertising challenge for mobile. as a venture capitalist, we look at challenge as opportunity. will facebook be able to

monetize mobile? i think there is a very high likelihood they will be able to. the number of small vendors out there working with facebook to monetize mobile is very high. facebook has already acquired a couple dozen small software vendors as well as large software vendors. i think they have the ability to actually look at all of the thousands of innovators around the systems to pick and choose who is innovating faster than them because they are all facebook partners. that's the beauty of facebook as platform and facebook as core innovator and company with lots of money, ability to innovate not only on its own but to own the ecosystem itself and that includes mobile. >> you're obviously seeing a lot of smaller companies, everybody now wishes they had gotten in on facebook three or four years ago. what about smaller companies.

everybody in new york thinks you are going insane paying valuations for smaller companies that won't work out. is it silicon valley again? >> silicon is a unique bubble here. we believe in innovation. have a unique platform for innovation. facebook will drive increased innovation. australia these young facebookers will become investors themselves. it will stimulate the angel investor segment. you will see more what you see as bubble effect outside silicon valley. it's very darwinian as well. we expect not all these companies to succeed. many will not. lots of them will mildly succeed and some will become the next facebook. maybe one, two, three, four or five. that's what innovation is all about. not about guaranteed success, innovation itself and ability to

lean into the future. right now, with social, mobile and cloud, we have a lot of future ahead of us. >> it really is survival of the fittest. you said there are a number of small companies out there innovating faster than facebook, can you identify who those fast innovator are and who could potentially be not a rival to facebook but something big, as big as facebook? >> it's hard to imagine something right now as big as facebook. could we build other public companies? the answer is yes. you already heard about buddymedia, hearsay, marq eruet acquired cloud factor and helping drive the value out of social. there are tons of analytics companies out there that will really be partners with facebook to help marketers derive and realize our --

>> there is nothing you've seen today that has the potential to be as big as facebook is now? >> if we looked seven or eight years ago and someone said, hey, i met this young guy in a dorm at harvard, is this company going to go public in eight years at this valuation, no one would have anticipated that. our job really is not to predict the future as i said before, it's actually to find the future. we found a lot of great contenders for the future. we'll know in three, four, five years, if we have a facebook or not. definitely, this is the company of this decade. >> you talked earlier how if you invest in facebook you have to take a really long term view. in the history of this industry, there's been extraordinary leadership changes aol comes along, looks like it's the next generation, yahoo, google, now facebook. do you really think facebook has 30 to 50 years of world

domination or should we really be expecting in three to four years it's old news and there will be huge companies coming up underneath it? >> i think it has many ingredients to be long term like microsoft has been, like google is becoming, like amazon is becoming. its young leadership is a real benefit here. the intellectual stamina and capability of this company is very high. their talent base. we're all competing in silicon valley for talent. they're getting some of the best and brightest. those people are wanting to work for facebook. they have tons of technical acumen. they are an open innovator, willing to innovate themselves and innovate with their partners. that is a very important quality of tomorrow's winners. they're right on the precipice of not just one innovation capability, social, but mobile and cloud, we talked about earlier. that allows them to lean far

into the future. i do think also they've done a very good job picking their lrn team. it's -- leadership team. it's not just zuckerberg. cheryl is a huge force here in the valley and in the industry. their leadership is respected. all those capabilities really do make for a long term company. i think they're playing for the long term, not just for the instant. >> wonderful. ann winblad, thank you for your insight today. appreciate that. coming up, more of today's top stories and the facebook effect on other social media sites. the vice president of tumblr will be joining us at 8:40 a.m. eastern. like in a special ops mission? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade.

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coming up, the risks of buying into the facebook ipo. we'll talk to an analyst excited about long term prospects for facebook stock. still ahead, another social media site generating a lot of buzz. we'll talk to the vice president of the popular blogging site, tumblr in the next half hour. is anything going on today?

welcome back to "squawk box." some non-facebook news. okay. they will make me do it. let's look at other stocks that could move in today's trading. footlocker, a first quarter profit, check out their facebook page, though. 83 cents a share. same-store sales increase of 9.7% was also above consensus.

salesforce.com, three cents above estimates and raises the full year forecast. growth is strong and morgan stanley upgraded buy from neutral and says much of the downside from potential moody's down grading is part of the stock and didn't pension dollar part of -- >> facebook. >> talking of which back to the top story of the morning, we're logging pros and cons of buying facebook ipo. the partner of co-rise focusing on digital media, it says here my friendly and very helpful notes, number one, you have no stake in facebook but are pro facebook, actually a refreshing change and generally talking to skeptics here. why are you not skeptical? >> a couple different things. you need to look a couple years out, the optionality, revenue streams we don't see yet. not only will you see

advertising continue to grow -- >> i thought growth was decelerating. >> growth is decelerating. in my piece, you will see line items come in, new businesses and modernization. about 50% of of their users don get monetized, coming in on the mobile platform and just in march started to monetize that and the sponsored stories have 50% improvement in click through rates. you're just starting to monetize afl your base and it is still growing around 30, 35% or so. users are growing, monetization is growing and new business lines from payments we already know and other ones as well. >> let's get to specifics, you have laid it out very admirable. you say the stock could be worth $80 in three years. >> yes. >> where does it open today. 45, 50%? >> agreed. deceleration and mark zuckerberg saying i don't care about

business, for the social. is it still really a buy? >> a great question. the way we get to that $80 is throw it out there. see $20 billion of revenue is in a couple years and $2 bps and m amazon and others, et cetera, the memorandu multip multiples placed there are reasonable. there's a lot of scuttlebutt in insiders getting out and selling to the pansies -- the muppets. if you actually look at the s1, you'll see all the insiders, executive offices not selling including dustin, cheryl svanberg, david evan son, none of these guys are selling one share. that gives you insight what they see down the road and why they think it's too cheap for them to be selling. >> is it really something for the individual investor? something they should be wading into? there are some financial

advisors, if you do want this, wait a few weeks, please, until the dust settles. >> a great question. short term movements of the stock, people can get hurt because supply-demand curves are off and it's based on the curve. >> you do nothing? watch and rate? sn>> depends where supply and demand goes, the stock could hit $60, you don't know. so much volatile. >> there's so much fomo, fear of missing out. i missed out on google, damn, i missed out on apple, damn, i do not want to miss out on facebook. >> exactly. >> some people like sean parker did take money off the table in the second market and a number of employees have done so, just as we're talking. i appreciate what you're sayings in the s 1 and people have taken money out. >> and they have 900 million users, to 2, 3, 4 billion in the

next few years and all these revenue possibilities that have come along but you're saying it's the new magical new businesses. they've had five years to come up with those and haven't yet. that's a concern to me. one more on specifics. $2 a share in 2016 in earnings, it will trade at 40 times that. google is trading at 15 times, apple, 11 times. >> yes. >> why, when facebook is no longer the shiny new object we're all used to it is it going to trade at 40 times earnings, apple, sexiest tech company in the world, 11 times. >> it's in the multiples today, amazon is greater than 40. the difference is even out there, i think you still see earnings growing north of 35%. google is not doing that, growing 15 to 20% or so. you look out. it's the growth you're paying for. in my piece, i talk about the higher multiple i put there is to try and capture a little bit of the unknown.

facebook has applied for money transmitter licenses in the u.s. what is that? we don't know what that is. there could be a whole payment monetization scheme we don't know about. that's the one they talk about in the s1. >> in your former life, you were a consumer internet analyst. forgive me for moving away from facebook for a couple minutes and maybe someone will thank me out there, within that world, what else do you like or dislike? a lot of players and a lot of them garnering interest. i'd be interested in which look like quality now. >> it's a tough question where i am no longer with bear stearns where i was an internet analyst eight years or so covering the internet sector. it's difficult for me to go out of the lines there and the only company i can talk about is facebook, as a firm. >> thank you. henry is sticking around. >> i take it back. they're not all haters.

i've only had two haters. >> talking about twitter? >> that's not very many haters. that's incredible. snow i just blocked the one hater. >> satisfying wasn't it? >> i never felt such power in my entire life. made my friday. >> i will get you on facebook and you can start de-friending people. >> are we allowed to do that? i blocked this guy. he had dr. evil's picture who he was. i blocked him. steve liesman. >> did you block him purely on his "avatar" or what he was saying to you? >> no. in fact, it wasn't dr. evil, it was actually a picture of him burt he looked like -- >> it feels good. >> steve liesman, buddy, gone fishing for a good cause, oolfe good. a great cause. the one day fishing tournament in manhattan. what have you got for us this time? >> joe, thanks. we have the real stars of this event. some guys in the wounded warrior

project, one of the main causes of this event to try to help the wounded veterans. we have jim, a colonel. tell us about the wounded warrior project. >> the wounded warrior project looks at thanking thousands of warriors who have come back overseas from iraq and afghanistan, their service and sacrifice and we want to say thank you to the wounded warriors deserving of everything they get. >> and cnbc helped contribute and sponsor this event. jackie, where did you serve and how long? >> i did four tours in iraq and pretty much most of 2003, 20 between. >> i asked you -- 2010. >> reporter: i asked you before, you left a little earlier than you wanted to. >> i was involved in a grenade attack and catastrophic ied attack, left a couple buddies not here with me today and me getting a couple of surgeries,

which put me here retired. >> one of the things we heard from the wounded guys is getting out fishing helps your self-confidence. normalize back in society. >> it really does. fishing is something did as a kid. being in the military, i was gone so much, don't really get a chance to reconnect with the things you did on a civilian life. good to get back on the water. >> thanks for your service. i'm here with bruce mel mac, the guy who holds the record for the most rescues on the water and you have 300 hours in space? >> that's true. >> 300 hours in space and fishing in "new york times," which is weirder? >> neither one is weird. i have to admit, fishing in "new york times," to go out here almost incite of the statute of liberty and catch these beautiful stripers in this beautiful clean water. being from florida, i never thought you could do that here.

>> from "new york times." >> in "new york times," amazing. >> reporter: wall street does come out to help this event. i want to show you something, maybe one of the new facebook companies, i-channel media, go to itunes, download the app and fiscal the leaderboard all day long to see who's on and make your own television channel. i downtown really get the technology, everybody is looking for the next great company. where would you rather be, trading your shares today or out here fishing? >> we'd rather be with you, steve. we don't know how you work these things sometimes. you are able on a day like this, fishing. >> you're fishing. >> fishing, gone fishing. >> want to go sphere fishing. >> somebody has to do it, guys, somebody has to do it. >> thanks for that. coming up, we're back to the subjected we've been with all morning. facebook set to begin trading in less than 2 1/2 hours.

we will take another look at a social networking company. this one is a little bit different. the popular blogging site, th b tumblr has attracted a lot of attention but can they cash in? after the break. well, if we don't find an audience, all we'll ever do is rehearse. maybe you should try every door direct mail. just select the zip codes where you want your message to be seen. print it yourself or find a local partner. and you find the customers that matter most. brilliant! clifton, show us overjoyed. no! too much! jennessa? ahh! a round of applause! [ applause ] [ male announcer ] go online to reach every home, every address, every time with every door direct mail.

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welcome back to "squawk box" on this facebook friday. it doesn't stop.

the blogging tumbler making waves on the social networking world. is it built to last? joining us, andrew mclaughlin. thank you for joining us on a day we can only talk about one thing, facebook and tumblr. it's about valuations. i don't know how you look at the facebook ipo yourself. you guys have $125 million into your company. any revenue? >> a little bit of revenue. >> no profit yet? >> no, no, not yet. we make a little bit of revenue off selling themes for blogs. we just announced what our new ad unit will look like. we're in the sales cycle right now. >> when you see facebook go public or buy a company like instagram, how does it change your perception of your own, and how you should think about it? >> i feel very warm and fuzzy inside. the real answer, it makes us incredibly nervous, like we have to work harder, do better, become a free-standing

independent company. you can't count on those deals to last forever, a grand acquisition. we have to sell stuff and grow the platform and make ever better tools for creators. >> what is the exit for you? do you think about that? does all this craziness make you think you have to get out? >> the best exit is to be the master of your own main, make money, be profitable, standing on your own two feet. >> obviously, you're extremely popular. i think you have what, 53 million blogs. >> 55. >> 55 million blogs. >> joe's daughter. >> it started with tumblr. aspiring shakespeare's, let's put it that way. you said you're starting to try and make some money here. when do you think you can be profitable? >> i don't know exactly when it will happen. we're just starting the sales cycle right now and will sell the blog post as an ad unit. we're saying come be bloggers,

blog, be active in the community, creative, get popular and we will give you tools to promote yourself and accelerate that. >> are people latching on to that, saying, yeah, i want to do that? >> so far so good. for us, the biggest opportunities are big brands with a national or global audience, entertainment, fashion, luxury, auto, that sort of thing. they want to tell a story and want to do something creative people will remember. that has the big thing that stinks on internet right now. most advertising is direct responses targeted to the thing you're searching for or the story you're reading or it's really unmemorable. we're trying to say tumblr is this very creative community and come and tell stories and so far the response has been great. >> tumblr is a massive hit. a lot of people don't know what it is. i think of it as pictures. huge growth over the last few years. are you a threat to facebook? everyone is now trying to figure

out facebook long term be around forever? companies like you threatening? >> i actually think we occupy a very different space. the big opportunity for us is people want to do things, share things, write about things, experience things outside the bounds of their facebook social graph primarily people they already know, friends and co-workers. you want to blog and share stuff maybe none of those people will ever see. when two guys in washington came out with a blog called "text for hillary clinton" a take on photographs of her looking bad ass and awesome, they did it without revealing who they were. they could go to tumblr and create a blog. what's interesting, the usual conventional wisdom is that you -- the farther you get away from identity the more flames and racism on the internet. we make it possible to create

aspirational identities, blog about what they want to be rather than who they are, which is facebook. there's this big opportunity for us to serve that need for creative people to experiment outside of their pre-existing social network. >> andrew, can i ask you. when you were at google, you worked on the china entry strategy. would facebook ever be successful? would you, tumblr be successful in china? >> we're blocked in china. here's the conundrum. censorship and surveillance. the only way to be present in china is do a deal with the chinese where you do senscensor and the trick for facebook, can they cabin that and the real thing is surveillance. once you're there, you have to turn over data and a social network- >> your data and friends' and family's data. >> exactly. if they get data about an individual in china could be anyone they're friends with, any messaging exchanged back and forth. it's impossible to me to figure out how they could limit that

surveillance just to people in china. i think that's why they haven't gone into china, this is a very hard conundrum to solve. >> i've asked this question to others. is there any company out there including tumblr, you see as a competitive threat at some point, two or three, five years out, maybe not one company but a collection that could somehow replace what facebook is doing? >> i think the opportunity for companies other than facebook in social networking is, for one, like customization of the world you live in. facebook has this relentless design everybody has to work with. companies that allow you to interact and join up with other people in a way that fits you more than mark zuckerberg's design team is an opportunity and the other is connections based around interests rather than your real word pre-existing graph and friends in real life. >> andrew. always. >> andy: drew? >> always. >> andy: drew. good name.

appreciate it. >> this has been my best day on twitter. i blocked two more people. >> block me. do it for fun. let's block each other. >> they're so obnoxious. now, they get to see that they're that they're blocked, right? coming up, the team that will count us down to the first public facebook trade. we're going to check in with the rest of the "sqauwk on the street" crew. . schools flourish and students blossom. that's why programs like... ...the mickelson exxonmobil teachers academy... ...and astronaut sally ride's science academy are helping our educators improve student success in math and science. let's shoot for the stars. let's invest in our teachers and inspire our students. let's solve this. uncer) most life insurance companies look at you and just see a policy.

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okay, coming up folks, the last 7 minutes of the show, we're going to get more from our guest host henry. stay tuned. [ donovan ] i hit a wall. and i thought "i can't do this, it's just too hard." then there was a moment.

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all right. stock of the day is facebook. no, actually, it's expected to be fb is going to be the symbol. it's going to be priced at 11:00. you do not want to miss because

we're going to know by then! where are you going to be? sfwl i'm going to a bar. >> you're going to a bar? >> yeah. >> is it a dedicated spot where everybody is going to go? you prefer spear fishing. >> and then you try to get me -- you took off the hoodie and you try today get me to wear it. >> where is the hoodie, come on. this is just as a -- thanks, nick. >> do you have one for me? oh, okay. they said we didn't have one. do you want me to put it on? >> just for the end of the show. >> i can't do it. if i had my own, i would. i don't like wearing other people's clothes. it makes me uncomfortable.

>> would it mean a lot to you? >> it would mean a lot. >> do we need to hear you say it again? >> step back for a minute. facebook was an extraordinary success for america. it was founded in a college dorm room eight years ago. it has helped topple dictator, it's a huge, fabulous, $100 billion offering. tremendous success story. then, the question is where do we go from here? >> we have to grow into the valuation where it is. and with 900 million users in all likelihood, maybe some day it does value. this is the problem because people say oh, amazon. and oh, goog. these companies were so much smaller. if they hit the ball out of the park, you get, in amazon's case,

75 times return between now and the ipo. and google gets five times return. facebook is going out at a hundred billion. >> are we giving him enough credit here? >> as a ceo, people completely under estimated him. people thought he was just a kid. didn't know anything. over the last eight year, he has learned a huge amount about leading. and he's done a phenomenal job. it is a bet on him. and one of the things i think people should be nervous about is he came out in the prospecks to and said it will frustrate shareholders in the short term. >> you stole my penn. >> i'm going to put the hoodie on. >> here's the question for you fo