thought it was different than 38. you educated me. >> that post is fabulous. it's a great way for investors really to understand what will happen in the marketplace. joe is going to learn a lot. >> dick, thank you. >> thank you for being here. wonderful two hours. make sure to join us tomorrow. "squawk on the street" begins right now. >> music fans around the world mourning the loss of robin gibb who died over the weekend at 62. another loss for the world of music. welcome to "squawk on the street" for a monday. i'm carl quintanilla along with jim cramer and melissa francis. it's going to be an interesting day and interesting week after the worst week since november for the dow. we're looking at that modest pop. it looked better earlier this morning. jim was tweeting about a potential squeeze. we'll see how much that holds.

you always say be aware of the up open. in europe, a relative lack of news because so much is being centered on the united states. mixed picture with ftse up 29. >> our road map starts with facebook fallout. despite the bid higher in premarket, shares breaking premarket trading below 30 bucks a share. nasdaq ceo saying the exchange is embarrassed over the system glitches that delayed trading and caused confusion on orders on friday. >> yahoo! gets a $7 billion life line selling up to half its stake to alibaba. a mass downgrade of u.s. banks ahead of jamie dimon speaking at a conference in half an hour's time. they cite a 90% chance of a greek exit. >> facebook shares falling below the 38 ipo price in premarket after less than stellar debut on

friday. nasdaq ceo says the exchange is embarrassed by its bundling of the debut as a public company on friday adding this was not our finest hour. he told reporters there's no indication a nasdaq delay contributed to the lackluster display of the stock. the nasdaq stock board met on saturday. the question this morning is how much ammo do the underwriters have to keep it at 38 and how much does that matter? >> my experience is they have unlimited ammo. at the same time everyone knows they have unlimited ammo so they will wait them out. for today. they can just keep doing it until finally it just -- >> it's embarrassing? what's the line in which they can let this thing find its true price? >> i don't know. maybe two days, three days. the stock went up so there is firepower there. a report on friday there's potentially as much as a billion dollars after that. every trade that occurred on

friday of 38 was probably the underwriters stepping in. they already used some cash to support this stock. >> i know that bob said that it did not have anything to do with trading. my understanding is the short was large because of what happened. everybody got a lot off. >> that initial fall that we saw after the open from what's called 41 to 38 was in part due from what i heard and we reported at the time, the cancellation of orders, the inability to understand what you owned and didn't own and backing away. why wouldn't that affect the trading dynamic in the stock for the rest of the day? >> people can disagree with what bob said. >> even if it's a psychological impact, when you see the stock go up to 42 and then trade lower, what is the psychology of the trader then so there is an impact no matter what. even if there's no direct impact, there is an impact on stock. >> i was with people this weekend who don't know if they are long or short. these are relatively

sophisticated people who said i tried to buy some and tried to sell some and didn't get any reports. what am i going to do on monday? do you think i own it? do you think i don't own it. >> we did that at noon we told people about those problems and it was two or three hours later people still were tweeting me and i know you saying that i have no idea what i bought or didn't buy. >> total fiasco. >> there is a liability here. i understand already there are going to be brokers filing claims no doubt about it. your liability would be the difference between what you should have got and what you paid but nonetheless it's money. >> tommy joyce will be on to talk about that. they lost a lot of money. >> this morning mom and pop is reading about this autopsy, right, regarding this open. they are reading about the reconstruction loss at jpm.

what is there to be excited about? >> i think i can get 20 basis points. >> if there's an investor that doesn't lose money, i don't know. i got to tell you, this is like flash crash and mf global and jpmorgan, it's rich people run amuck. >> high frequency trades and the way trades are executed these days, this really goes to question whether or not these exchanges can handle this sort of trade. we saw this happen in march. there was a software glitch that derailed that ipo. and then we see this. another software glitch. you have to start thinking, are we equipped with this? are we equipped for this? >> do you think this whole episode has dealt the machines a blow? >> the machines will always win.

they are not that sophisticated and doesn't really understand and lobbying effort is so great for machines that machines do -- this is like world war i. you send 60,000 british soldiers and 100 machine guns wiped out all 60,000. >> and we're watching world war i. what's going on? >> bigger than ever. >> it's better the second time. >> machines versus horses. >> i watched the preakness. another big win. that's how people feel after facebook. i'll have another. let's bring public another five ipos that don't work. >> you have to think retail investor this morning is feeling a little bit burned. they get an allocation of what's supposed to be the hottest ipo ever and it's a fiasco and it trades below syndicate on the first full day of trading. >> i put in for 2,000. i got 10,000. i was trying to put it back at

the last minute. the desk didn't want it back. this was the holding the hot potato. >> some people i know did only get 10% of their allocation which is much more typical and then others got hit entirely. i don't know why. they got everything they asked for. >> so blame spread around between morgan stanley and nasdaq, who has the blacker eye? hard to say? >> i would still say let's see. it hasn't yet broken syndicate in actual trading. as of now nasdaq. >> i'll say nasdaq. i was wondering if you weren't waiting to have that in the form of a question. i do believe that nasdaq is going to be the one that gets fingered. >> the one that gets sued will be nasdaq. >> i thought it was part of facebook's management team the

way greifeld was standing there. >> jamie dimon set a tremendous precedent. i hope it doesn't go from $2 billion to $5 billion. once you own up -- there are warriors that say don't own up. it will hurt us in court. you always have people who never own up. it helps them in the civil discussion. >> they put a statement out and apologized. not just embarrassed. humbly embarrassed. >> in terms of morgan stanley, one can argue they did exactly what they were hired to do. they priced it at perfection. didn't leave much on the table. delivered the money to facebook. what else are they supposed to do? >> they should make sure is doesn't break syndicate bid. they did go up in size and price. that's a dangerous thing to do for any ipo. >> i'm hearing that cooper industries was just bought stock and cash for 72.

good news. cooper is humble. this is just something -- i've been waiting for a deal forever. i want to get it confirmed. if you have confirmation, let me know. i like to break up facebook gloom for 20 seconds. how about that wedding? >> it was lovely. she look eed fantastic. he looked nice in a tie. >> the great story about how they got married after the ipo meant that she will have harder time arguing for those assets in the event of a divorce if there's no prenup. happy honeymoon. two days and we're writing about the breakup. >> they are the big winners. facebook. everyone connected with facebook is gigantic winners here. so far the public once again sorry. it's pathetic. >> maybe we can go and do this cooper deal before we get to yahoo! because it's fairly large. don't know if you are following around back in the control room.

it's a $39.15 a share in cash. they are calling it a 29% premium. putting a transaction value on this again for cooper at $11.8 billion. eaton electrical equipment supplier. cooper industries purchased by eaton or they are calling it a transaction where they will buy it again. it's stock and cash. one of the larger deals we have seen. in terms of dollar-wise, this is one of the bigger numbers. 29% premium. you'll see the stock up sharply. >> the stock had fallen last week. i had sandy cutler on. the terrific ceo of eaton been on over and over again. yielding 3.5% on friday. i would imagine that eaton gets pressure again or is this a deal that says, you know what? this combination is fabulous. >> we'll see. we've talked so often when it comes to mergers and acquisit n acquisitions about this being an

environment you would expect to see a lot of deals. stocks go up. keep an eye on eaton. 35 cents in 2014. 45 cents in '15. we know so many corporations have cash on hand and know borrowing costs have never been lower and yet we have seen a dearth of substantial deal activity. you never know. we'll see if it actually brings others to the floor. it is an important one. >> it's turning higher in the premarket trading. nice pop actually. >> two companies that make things versus facebook. eaton has historically raised that dividend over and over again. they are obviously in a lot of different areas, the economy including trying to keep the cost of fuel down. cooper is everything from tools to parts of the electricity network that create and able to move power. this reminds me of cooper that used to be the great acquirer.

they would buy things. eaton has been a great acquirer. nothing big. this is a transformation deal that's like a cleveland deal. it's like a big heartland deal. >> eaton shareholders about 73% of the combined company and given there's a stock component to the deal, current cooper shareholders will own the remaining 27%. eaton is bowoirrowing from morg stanley. financing is there. we'll keep an eye on eaton stock price. it probably will hang in there given the potential deal in 2014. we'll see. important milestone. >> global power company in an industry where people have tried to figure out how to handle all of the power needs of the facebooks of the world and also be able to build out the grid. i think that this is a good deal for eaton because people feel that eaton has been caught with too much europe. anybody caught with too much europe is in a bad way although

sandy cutler come on time and again on "mad money" saying europe is okay for them. obviously germany which is on fire. germany is the strongest economy in the world. >> let's touch on yahoo! selling half of 40% stake in alibaba. yahoo! will get up to $800 million in new alibaba preferred stock. yahoo! brought the stake in 2005 for a billion dollars. not a bad return on investment for yahoo!. >> they have been trying for quite some time as we know to do a tax efficient deal. this is a fully taxable deal and a conference call begin at 8:45 a.m. eastern. they have said the ultimate proceeds from this $4.2 billion. 7.1 billion for 21% stake and you tax it and end up closer to 4.1 billion after taxes. you see that at the bottom of your screen here.

that was on the conference call. something unexpected was $550 billion lump sum payment for royaltiies to yahoo!. they had that in place until the ipo not getting it but they redid the royalty agreement. >> is this something that they would have fought and -- >> i don't think so. this is moving along in the works under thompson and now being adopted by the new interim ceo. i don't believe he's become permanent ceo. it's resulting in the stock prices you see behind us going up nicely. we'll see. there's 20% more of it behind it. this is a significant modernization of their stake. they are going to use the proceeds to increase share buyback which they moved up to $5 billion. >> they need to grow. we don't want companies that buy back stuff. facebook is at least a growth

vehicle. the stock is obviously obscuring the greatness of facebook for the moment. >> share down seven straight months for yahoo! in terms of engine shares. we'll keep an eye on it. we should mention scott thompson stepping down from the board and it was announced that he stepped down from the other board as facebook was about to start trading on friday morning. he buried that news. >> that's a new world for me. there was a great article this weekend about how when you say that you know computers and you don't. a great piece over the weekend. >> that's not a small brag. finally later this hour in about 15 minutes, jpmorgan's jamie dimon set to address the conference and what he'll say about the multimillion dollar trading blunder. and jpmorgan is downgraded to

market underperform calling five banks uninvestable. they say a 10% chance that greece stays in the eurozone and 90% chance it leaves and 30% chance there's severe capital market damage. >> a lot of work is coming out now. jpmorgan private capital private services putting out a piece saying that before we decide that it is bad that someone is kicked out, look at argentina. big, big push on the economy and then come back. iceland. started to come back. i no longer fear this separation as much as i did before. i think obviously everyone gets hurt initially but it ain't working. it ain't working for spain. it ain't working for italy. we got to start -- unless they do euro bonds tonight and announce tomorrow morning euro bonds and print 2 trillion euro bonds -- >> why are you no longer in

fear? >> they have to print euro bonds. this is germany win, everybody lose right now. >> this is one of the big theories. let greece go and rest of us will issue euro bonds. >> that would be positive. >> some are rooting for greece to take the leap and go their own way. >> if they had firewalls in place already or a semblance of them to protect against contagion they would a harder negotiating position with greece. greece knows it could cause problems if it goes whereas if they had those in place, we would say go ahead. >> bottom line, jim, this group overall is uninvestable. uninvestable given that they say 60% of the exit with no contagion and 30% chance of exit with contagion. >> jpmorgan has told us we know that jpmorgan integral to europe. i didn't think it was integral. i don't know who else is integral because if jpmorgan didn't have controls, i have to presume other guy is not as good. i would love to hear a complete look at all of the balance sheets but we're not going to get that.

>> who knew lime disease could be that disruptive to capital markets. always the lyme disease. when we come back this morning -- >> it's the deer. get rid of the deer. >> facebook's photo-op from the ipo on friday. we'll talk to tom joyce on nasdaq's handling of that offering and impact on the firm. take one more look at facebook shares. 36.59. we'll see how the dow rebounds from on track for the worst month since 2010 when we come back.

what happens when classroom teachers get the training... ...and support they need? 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.

>> there's a look at facebook at

36.39. a lot of discussion that will continue all day today as to how much the underwriters can support this name. jim, a lot of people commenting the market will determine a fair price. >> i think -- let me back up. they have to do something. first of all, they have to do something. second, just because it's trading at these prices doesn't mean they can't stand there and buy it. they're going to make money if they really are shorted. the opec nature of all this, we talked about this on friday. warning people and warning people. this is just one more part of the difficulty. without the banker there, what the heck is this thing worth? >> who knows. you also don't have any short horses in the market. you don't have options trading yet. you don't have the ability to short the stock itself yet. and then you have looming lockup aspirations. two are coming and first one will yield 55% of the flow into the market and second one will double the flow of the market. >> no underwriter has enough muscle to prop up the stock when

the float doubles. >> they'll be there today. they'll be there tomorrow and try to be there on wednesday but after that it's over. it comes down to 100 billion or not. >> no one has enough money to stay more than a couple days. >> do you like it or not? >> i don't like it. it was a trade. now it's like greece again. how is facebook doing or spain? >> the trade barely happened. if you bought the stock at the allocation price, you were fortunate enough to get that allocations we thought you would be if you got the allocations, the window to make a profit was so small, so small. then it went away. that was it. >> if you walk in you have to be careful when you walk outside because you'll get hit by facebook shares. sorry. >> like frogs falling from the sky. >> let's not forget it's a company with 900 million use

weers with incredible margins and incredible growth rate. that's facebook. and not having turned on engines to monetize that traffic. >> it's a stock in an environment where stocks are not super unless they have nice yields. what the yield of facebook? >> zero. >> it's all about yield? >> it's one of the ipos of social media. how have they done after the initial print. >> in general not good. you know, it makes you wonder. if the trade had been executed flawlessly, the "times" said it could have been worth 20%. >> no one knew what they had. orders cancelling back and forth and maybe tommy joyce can help us. it does feel like the late '90s where the first price you go up a little bit from first price and downhill from there. story was obviously -- the stock was not placed well. retailers got stock they didn't know they would get stock and didn't know where to put stock

because they didn't sell stock not knowing if they would get stock stock. >> you have to wonder what the impact. some degree of transparency as to where these shares would trade. you had big investors with the ability to get in very early on in a lower cost base than $38 a share and you have to wonder if everyone in the stock was in the stock pretty much. >> windfall. sometimes it's better to be a seller than a buyer. there were different ranges. a lot of demand. some have demand and some have supply. they let more sellers sell in the last minute. suddenly you had savviest sellers. that's classic of what pandora was. last i looked pandora not that great and opened that box and it's been going wrong ever since. >> we criticize firms for going public with a sliver and now we criticize because they put an

allocation out there? where is the line? >> there's no goldilocks. >> i have seen a lot of deals work over time. sometimes you have to be smarter. it's okay. not everyone is smart. what did jamie dimon say about his intellect on this. dumb. stupid. we got some more guys at morgan stanley that are stupid and humbly embarrassed. when will they issue that release? let's see that release. >> we have to think of terms other than mea culpa. >> i know. >> you are tempted here at a certain price. i think we talked about this a bit last week, right, on facebook? >> yes. facebook has -- let's say david is very much interested in alibaba. you have $2 if you give it google. you talk about a price you may want to buy it at a discount. maybe 30. 15 times.

give it a google. >> time stamp. >> once it's broken -- >> you mention google. do you remember the trading on google, didn't trade well. >> nobody could figure out what the whole thing meant. >> then they started to figure it out. >> go back to zynga. obviously they are not profitable. facebook is profitable. if i want to use a $2 number, there is a price. just happens to be not this price. >> it happened to be below even the original range even though lower end of the original range. >> most have the idea in the end this company is hostage like every other company stock. they have been shrinking and won't expand multiple of facebook. 900 million users. wow. >> we'll talk about facebook for

years to come and watch growth quarter to quarter. i will tell you what impact that is apparent which is retail invester. they finally get something and then they get another reason so say why in i investing at all? >> to be a part of history. a different kind of history. >> we lost money again potentially. >> and the ipos in which retail investor got a sizable chunk. the retail investor was led in a bigger way than normal and all those ipos have not done well. that's one where retail investor was brought in. >> general motors was one and now facebook. >> the lesson to retail investor is that you have to do some sort of valuation analysis. somewhere this weekend -- i did my daughter's pre-prom party.

what a blast. i want a piece of facebook. that's super. i have a share of goldman sachs when it became public on my wall. i don't want wallpaper. i want profits. okay. if i want wallpaper, i'll go get that contact paper that they have at home goods but i really feel very strongly that you have to use multiple analysis in the end and this is overvalued. >> to that end we're talking to analysts whose coverage will get initiated over the next few weeks. coming up in the next hour, one analyst whose rating -- is it a hold? but that's going to be the process here over the next few weeks and months. one of my favorite tweets of the morning was that anyone who owns facebook is just going to go on the site and click on ads all day long to get that number up. >> i was playing with scramble with friends. i was in the dark. on a train. i almost clicked on an ad.

i stopped at the last second. can you imagine if i clicked on an ad? doesn't that defeat the purpose of playing? >> let's get going here. there's the opening bell in just a few seconds at the nyse. right on time as usual. lockheed martin. and riverbed technology. >> lockheed martin, there's a company with a dividend. >> facebook price syndicate. >> where is the syndicate? morgan, step up. maybe they are playing coy. >> they are waiting to draw people in. i don't know. maybe they won't let it close below 38. >> are they in there right now? >> i'm going to go make a phone call. >> who are you calling? >> i can't tell you that. maybe i'll try to get some answers. >> this is an avalanche. this is an avalanche. it feels like k-2. it's always hard to climb that

slope. >> speaking of avalanche, shares of ndaq. that stuck suffered a drop on friday in light of glitches and this morning opening down 1.3%. suffering after issuing that mea culpa over the weekend for its role in the facebook ipo. >> one thing we haven't talked a lot is the role of a human being market maker and if that is somehow today more relevant than it was on thursday. >> great call. i know people that work in the surroundings of post nine were adamant that this was egg on the face of the nasdaq that would not have occurred here. i say by the grace of who you got, i don't know. one thing i would point you the is this is similar. >> i can't say it's the same glitch but it is a software glitch that caused a lot of confusion that happened on friday. >> we did raise that question

around 11:15 on friday if you remember. you said this is no time for amateur hour. >> it was amateur hour. they had a lot of time to try to figure out what would happen and perimeters and had ability to deal with people who changed their orders. people in retail apparently still didn't get any reports and we're all used to at least getting a report rather than quickly if you are a retail investor. >> if you put an order in, you get a confirmation of that trade almost instantaneously if it isn't market order. it didn't happen for hours. how can you possibly even think about selling to make a profit or buying more shares or whatever it is if you don't know what you have on your books. that was a problem. >> that's why it's natural that this stock is breaking syndicate bid because now people are really concerned. wow. i can't wait to see if i have any. i have to sell it. there's vast mass confusion right now. >> psychology of the retail investor here, this is just the

conversation i had over the weekend. i got in on this thing and i want out now. >> getting in on the ground floor at $104 billion market cap. it's a tough argument. we should point out, jim, your call broadly has been for advertisers. they will be educated about marketing on this platform. a big player one day may come in and say we are in. and that maybe then somehow sentiment on this name does change. >> we know gm pulled and that was devastated and then gm pulled from the super bowl. we think gm really smart. they got out of facebook. i don't know anyone that doesn't think the super bowl is a terrific place to ad. pepsi loves to put ads in and have had a good run in the last few months. we know bud obviously uses the super bowl. i think that -- >> you think that may have been exclusive to gm. >> we need to have someone who says all that data i want to be on the mobile. it's big problem is mobile revolution. it's not desk top.

on facebook you look at the ads. it is very hard to look at the ads. i know younger people are so smart at fast forwarding ads on tv and not clicking on ads. over and over and over again you hear from younger people. i will not pay for anything. >> you also hear them say i don't want television. i don't read a newspaper. they do consume media. somehow. right? >> they do. >> this is one way for the past few years they've done it. >> if the company is profitable, go back to what david said. it's not a joke. this is not a joke of a company. it was a joke of an ipo. >> the low 39.47 on facebook so far. we're entering the point of the low end of the original end. >> maybe this is where they come in. maybe this is where they make their stand. they didn't make a stand at the open. >> no, they didn't.

>> they didn't make a stand. >> maybe that last round where they took it 234.38 may have been going too far on the limb in terms of pricing? >> everyone wants democracy. no one wants to hear if you're a retail broker, you just got 50,000 shares. you say to syndicate, i only have demand for 10,000. you have 50,000. this is the night before. you can't even scramble fast enough. you get stuck the night before and can't call people and say i have facebook. that doesn't inspire confidence. that's what happened. late-night calls. you got much more stock than you need. how could they not have priced it better? how could they not have done more work? >> a lot of retail investors who got that tap on the shoulder who got that phone call late at night might have been thinking i just hit the lottery. it's quite the opposite. >> so easy to break sentiment when there's a feeling like

that's not a party woerth going to. >> i said 40 is the magic level. once you go below 40, people take their two bucks and run. it's a stock in the stock market that's unless you're cooper industries today, you're saying to yourself, i got this g-8 meeting. what will i do with facebook? not like facebook is going to report sharply better than expected earnings tonight. >> investors were on the sidewalk thinking about going into a club. do we pay the cover and go in? somebody comes out of the door and says it's not that good of a party. that sentiment feeds on itself easily. >> i think they have to make a stand somewhere. this is where they have to say we are going to be there. otherwise they are just not doing their function. not doing their function. >> we have seen underwriters defend ipos. look at the carlyle group.

remember when they went public? it didn't break for days. we look at the trading of that stock for the first two, three days, it was a span of 40 or 50 cents around 22. they didn't let that go until a few days later and now trading below. >> egos on the line here. morgan stanley doesn't want to be a laughing stock. nasdaq is going to have to see what people are talking about make goods. we'll have tommy joyce in a second. it's understood that knight securities did get hurt. i got to tell you, 35 is the line in the sand for morgan stanley. >> all right. we'll see if that holds. david and bob on the floor. good morning, guys. >> guess what we've been talking about as well? you were following this so closely. there was an expectation perhaps that they -- i guess to joe kernen's point at 8:50, you can't defend 35 to push it up to 38. >> there's misunderstandings on what this green shoe was from morgue jan stanley.

they have a reputational risk involved. i don't know how many millions of shares they had. 60 million shares. something like that. certainly they would have taken some of that to support the stock at 38. when it was obvious it was going below that, their obligation by the way, their legal obligation, is to have an orderly market. if it is going to 36 to take some of that 60 million or 50 million or whatever it is and support it down to 36, then take some more of that and support it down to provide an orderly market is the obligation. >> orderly at 35. down 8% on the highest profile ipo we've had in ten years. >> you know what's missing from this whole discussion? the new york stock exchange. nyse. officially they absolutely had nothing to say about what happened with nasdaq and obviously let's call it a fiasco if you want to. i saw larry on friday. he's the coo of the new york

stock exchange. i said do you have nothing to say about this? he said i have nothing to say. nyse has been completely silent. can you imagine what's going on behind the scenes? black slap iping. wouldn't have happened here. you have an auction process on an ipo. we've seen it. he would have gotten orders for the stock for facebook. he would have made a decision to open it based upon orders coming in from various -- >> it would have hurt nasdaq in terms of saying a time. >> why did they halt trading on the stock when they knew there was a problem with the order messaging system? arguments being made if there was a human being, they would have had an obligation at that halt trading on the stock immediately. nasdaq can argue we can do that. we can halt trading and they do but for whatever reason they did not and that caused confusion.

if we halted trading to figure out what was going on with order messeni messengering system. >> one thing for sure, you can bet that what happened on friday will be part of nyse's presentation process for ipos in the future. can you imagine? they don't have to say anything at this point because of what went on. eaton buying cooper. cooper opening at an historic high. many saying this is of course happening. as you know, this is your area, m & a has not been happening. we keep waiting and waiting. maybe this will be the start of something. >> 6.25 billion financing led by morgan stanley. back over to you guys. >> that's a great discussion. there's crowing by the new york

stock exchange and there was by the nasdaq when they were there on friday. >> there was champagne in the room. >> never drink champagne before 5:00 is a lesson. >> traders are very superstitious bunch. >> i had a green shirt from gap and i had a big day. wore that gap shirt for 14 straight days. took it off on day 14 because i was losing at the first hour of trading. always went through the same door. everything was the coffee had to be at the same time. >> so unlike you. >> that's why i outperform. i told andy reid, the eagles coach, i'm wearing the green shirt which is why you're winning. he said i don't think that has an impact on the eagles. >> how about a new line in the sand. we needed a new line in the sand. let's check out the latest moves

in -- whoa. line in the sand. in energy and metals -- >> don't cross this line. >> okay. we have energy and metals. we have sharon at the imax. >> you are talking about the traditional system over electronic trading and what happened on friday underscored many of the views of the traders here on this trading floor. keep in mind today we are looking at a little bit of a bounce here in energy sector for wtio and futures for brent crude as well. not as high as in overnight session but we are looking at slightly higher prices. we did get commentary from china's premeer. we have seen an oversold market. there are some that are looking at brent crude in particular saying we could see a slide

further toward 105 level if the bounce doesn't hold. we are looking at the spread continuing to be wide here even as that key pipeline has reversed course. back to you. >> okay. david, do you have comment? >> let's talk about deals. i have bankers to call. there's a lot of guys who are -- let's move from facebook quickly to one of the biggest deals we've seen this year in mergers and acquisitions. that's eaton's acquisition of cooper industries. that's large deal. cooper industries being acquired. it's $39.15 a share in cash. .77479 ordinary shares. 29% premium. you see shares up sharply. by the way, eaton will be

issuing about 37% of its share flow to get this deal done at the end of the day. eaton shareholders will own 73% of combined company. cooper shareholders will own 27%. they are borrowing from bridge financing. it is a large premium deal. one they are talking about significant synergy showing up. now -- >> dominant power company for commercial construction around the world at a time when power obviously in short fsupply everywhere. the big companies are up on this. >> given the size of the deal and i made one quick round of phone calls, not a likelihood someone will come in over the top and put that out there at this point. eaton shares are down ever so slightly. let's keep an eye on them. this has been a market characterized when we have had deals by good performance by the stock. we talk so often when it comes to mergers and acquisitions and

what's been a dearth of activity so many positives when it acquires due deals, stocks go up. they have cash on hand. borrowing costs are extraordinarily low to what we'll see they are borrowing at and there's been reluctance on the part of chief executives to make the decision and no such case here in terms of very large and even transformational deal for eaton in terms of cooper. >> let's talk about the fallout. facebook you can't talk enough about it. $34.38. i'm thrilled that we got the head of a brokerage firm who i understand was adversely affected by nasdaq's handling of facebook. tommy joyce, ceo of knight capital group. can you walk us through from your side a wholesaler what happened and talk about the size of the loss and whether anyone is going to make good on losses for knight capital? >> first of all, i want to point out that this wasn't in any way, shape or form an industry

failure. this is not a systemic issue. all of the financial services firms that were out there handling client flow handled it perfectly. this is not the first ipo that's ever come down the pipe. they understand the process and handled it perfectly. the failure was nasdaq. it was nasdaq's failure. >> you know they will say that's not the case. >> as you heard me say in not too distant past, this was worst performance by an exchange on an ipo ever. i say exchange. i'm not saying anything to do with fundamentals of facebook. i'm not saying anything about how the underwriters handled the deal. i'm talking about operational issues of an ipo. at 11:05, we'll do something. nothing happens. they go radio silent until 11:30. then a trade on the table. going into that trade they knew they had technical issues. they knew they had systemic issues. they proceeded to continue.

it's a problem. big problem. that created the second problem. for 2 1/2 hours we didn't hear a thing. we were trading blind for 2 1/2 hours. retail, institutional, everything. when we get reports there was plenty of shares, millions of shares unmatched. we thought we were short. we were long. we thought we made sales. we actually were long on the buy side. the information flow was completely skewed and it turns out that we owed institutions reports because they were trying to sell at 41.5. it opened at 42. you do a report. we ended up when the reports came in at about 1:50 or 2:00, we found out we were not net short, we were net long. it was just events i had not seen before and so that's why it was a failure. we got punched in the nose.

it hurt. i heard reports about overall street losses approach 100 million. i wouldn't be shocked if that was the number. we got punched in the nose. we're fine. it was not a pleasant experience because -- i hate to belabor the point, we did everything right. we are now sitting with a loss. >> is there a liability? >> feel file a claim. certainly we're in discussions with them. the best news about all this is that they were going to adjudicate the situation. the person overlooked by the s.e.c. is going to interject themselves into the adjudication process of who may be owed what. >> this is big. >> you mentioned this is not an industry-wide failure or system-wide failure. are the systems between nyse and nasdaq in terms of handling ipos

at the open so different to believe if it had gone public on nyse that outcome may have been different? >> they are different enough. gm was a pretty big ipo recently. we handled i would say hundreds of billions of shares on our desk. i think ipo itself was a billion and a half shares and big 8 billion overall day. we handled our flow on gm flawlessly. perfectly. i can't say the same about facebook. >> was this -- could this have been avoided by not declaring a time. by not saying 11:05? >> they had a sense that they expressed that it was a one and done trade. we'll indicate once and put the trade on the table. back in the day when i was trading ipos and you were a client, you give your clients as much information as you can. you indicate and indicate. >> minute to minute. >> talking all of the time. you can't stop communicating.

they fundamentally had an approach going into it that was maybe a little predetermined. were they stubborn? i don't know. when you know you have a technical problem of the size that they had, i think you have to take a step back and either delay the opening later in the day or perhaps they were lucky it was over a weekend. they could have gone after software issues they discovered over the weekend and opened this morning. >> greileld saying this had no impact on facebook's value. we're watching the stock trade down over 12%. do you believe that? i know that 12:00 time frame on that friday when we came on and said there were issues, people were backing away. we watched the stock move from that 41 level to syndicate bid. do you think that did have an impact and that perhaps is partially responsible why this thing is not trading where it is? >> it had a really short-term impact like in a day.

if you are a retailer investor or long-term investor, i can't believe you can get that concerned about what selling it at 42 or 41. having said that, it put artificial pressure on the stock because we sat there and our head trader saying i'm short 2 million shares and i'm long 5 million shares. >> it bid all of the way down. >> you have to react. you never trade an error. >> do you back away? >> you get position where you feel comfortable and then you back away. i think to your point on friday was their pressure because of the operational issues, yes. is it pressure today because of the operational issues, i don't know. i don't think so frankly. >> what about longer term impact on retail sentiment when there's a notion that it is you against the machines. why would i want to play at that table? >> this had nothing to do with you against the machine. it was you trying to be part of an interesting ipo because the company underlined as innovative and doing things it had never seen before. this was a technology problem.

this was like server going down except on a massive scale and instead of stepping back and rebooting, they kept plowing ahead. >> you don't see if in the same family as a flash crash? not that kind of -- >> this was is a single plane of failure that should have been resolved and will be very solved going forward. this had nothing to do with a systemic issue. >> we had the same sort of point of failure with a software issue very recently in march. this really raises the question can software we have in place right now handle the flows of ipos and tremendous volume of shares? are we truly equipped? the nasdaq to the conference call on sunday said we tested our system and tested over and over and over again and we were ready to go. obviously they weren't ready to go. >> they didn't test it enough. that's what it was as you indicated a different price. you canceled the order and put in a new limit. the communication and technology that was taking place on that just continued to fail. >> we talked a lot about --

>> systems can handle the flow. that's one of the best things they have done is ramp up for the data they process and trades they process. the system can handle the flow. this particular software issue couldn't and we should have stepped back. >> we talked a lot about the retail investor getting an opportunity to participate here in a way perhaps now with the stock down 13% that they wish they hadn't. i'm curious as to your perspective overall. we mention the flash crash. it was a confidence killer. does performance of this stock and fact that retail was able to participate at this early juncture also hit the market confidencewise? >> nobody likes to lose money, right? this is a very short-term event. it came public on friday. we should have come public this morning arguably. the stock is down. if i recall, jimmy may have a better memory of this, when google went public, it broke quickly.

is facebook google? i don't know. that was a good buy with when it broke issue price. this may turn out to be the same thing. >> didn't someone get short? didn't someone have a great trade on friday? >> well, that someone happened to be nasdaq. >> you are telling me that nasdaq got short on the open and were cleaning up on this? >> not on purpose. give the devil his due. unmatched trades came through and they looked up and said we have a short position. they will tell you exchanges have a specific set of rules as to how to deal with an error. when you have a position, there are rules around how you deal with it. they covered it on friday. as far as i know. they were short at a higher price and covered at a lower price. error account out there somewhere. >> don't have a lot of insurance, the nasdaq did. maybe policies i don't understand. you think there will be goods that you expect to make goods. >> i think they understand how

important it is because dozens of financial services firms were affected here. i'm sure that mr. greifeld understands the gravity of the situation. >> what are they going to say about how you wanted knight to be more involved? someone is going so slide yto s. you came on the show with guns blazing. >> i just told you what happened. >> you know that someone is going to say knight has an ax to grind. >> i'm sure bob is not too happy i'm on your show right now talking about it. >> i'm glad you came on. >> these are data points that i'm relaying back to you. i'm trying to be as factual as possible. will they say that we had a bias? we were biassed against having an ipo go awry. we're bias against showing up with a long position when we thought we had a short position. i have no doubt that they have a lot on their hands but the friday will look at them. they exported their problem. they had a software problem and

knew it and exported their problem to the industry and it's time to export a solution to the industry. >> when you say $100 million of losses across the street, you read that. from what you understand the losses that your own firm endured, do you think that's a conservative estimate or that could actually grow? >> i wouldn't be shocked if it got to that neighborhood. >> last question from me. from a reputation standpoint, will they be competitive for new issues in the future, nasdaq? >> i would think the new york stock exchange feels like their position right now is pretty competitive. they'll have to make the case to iss issuers there was an anomaly. i wish them well. >> thomas joyce, thank you for explaining your side. >> a few seconds before we have to lock up this hour. talk about what's coming up tonight. >> we're obviously going to do facebook. we will have atlas energy on. nat gas, is it the future? facebook isn't. they are trying to hold the deal

at 30 now. >> see you tonight, jim. >> the nation's second largest public fund holds facebook shares. we'll hear what jack ehnes has to say. more to come in just two minutes.

today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers.

how do you know which ones to follow? the equity summary score consolidates the ratings of up to 10 independent research providers into a single score that's weighted based on how accurate they've been in the past. i'm howard spielberg of fidelity investments. the equity summary score is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea.

welcome back to "squawk on the street." the facebook fallout continues to dominate the headlines. shares heading sharply lower. what's to make of friday's sobering debut and how to you play this at this point? we have your facebook play covered from all angles. and jmp downgrading big banks this morning. we're talking to the analyst behind that call in just a moment. >> sitting down with deutsche's global head for the deal on landscape. and neil smit will join us

to talk about cable's big push into the cloud. we'll start off with facebook shares trading below the ipo price this morning down by 11.25%. how should you play? dani daniel, i am curious to get your initial reaction to what's gone on. >> i was on here two weeks ago and we just discussed valuation. i said 100 was feasible. it was rich. i think the market says it is rich. today's pullback is due to the glitch on friday and what part is fundamental? they raise the range. after they gave the revenue warning, we said we like the bottom of the first range which is 28. i think what we're seeing here is markets converging back to reality. >> at some point with 11.5% decline, you don't have a price target on the stock at this

point. at some point it's a buy. what is that point? >> like i said, when i was on two weeks ago, we liked it at the bottom of the first range. in the lower 30s, high 20s. i would be more interested or if we see growth reaccelerating later in the year. right now we sit on the sidelines and watch it. >> if 100 billion is rich, what's fair? >> well, i think 80 billion. we're kind of splitting hairs a little bit here. no doubt this is a fantastic company. 53% operating margins. 901 million users around the world. they can provide detail targeting to advertisers. it will reinvent digital advertising. he don't want to pay 70 times earnings for that when we see earnings grow, they'll grow into the multiple or the stock will pull back. one of those things have to happened for me. >> with some lockups expiring, if you want to own facebook, you

probably already own it. do you have to wait for those lockups to expire before you buy? is that the obvious thing to do now? >> right. maybe you get some gifts in the market like today where if you were interested in having this, for a big fund if you want to play digital advertising over the next 20, 50 years, you have to have facebook in your portfolio and hard to buy it in size. you nibble away at it. there are 2.2 billion shares coming out of lockup over the next year. a lot of those are marks. i don't think he's selling. a lot of them are actually owned by people who are not part of facebook. it was such a liquid secondary market over the years. we don't know who owns those shares. >> how concerned should we be about the way in which management of facebook is disengaged from this process? they priced and left nothing on the table for wall street. no member of senior management did a media interview as we came out of the pricing and into the

trading. they disappeared on both sides on both coasts as soon as they rung the bell. not available for comment. you have events on the west coast with hack-a-thon through the night and then marriage on sunday to make it look like the last thing in the world they are actually focused on is the investor. >> so what they call a hack-a-thon is product building. they like to nail out a product really fast and everyone is working together overnight. i think there is a very, very few times in your life where you can say i'm not reachable. waiting game. i got to say, i have to hand it to him. his girlfriend finished med school a week ago. went public. >> deliberately choreographed in this way down to the sort of camera moves that you had over nasdaq opening on the west coast. this is a carefully thought through media campaign from a man who said explicitly, i will not profit maximize for my shareholders. >> the other thing is he's

playing for long-term. if you're going to be ceo for 50 years, right, what does it matter that he took saturday off to get married? i don't actually find fault with that. and the man wore a tie. took a couple steps in my book anyhow. >> not even a tuxedo hoodie. i know that you're not a trader necessarily but you have seen many stocks go public and plenty of stocks trade. given where we are now down 12% on the first full day of trading for this newly issued share, given all of the hurdles that are to come, the short selling that will happen and lockup operations that will increase the flow on the market, what is your prediction in terms of low on the stock? we have not seen the lows? >> i do think -- i talked to a lot of really big funds during the preipo process who want to

own the stock. we'll see large funds -- >> what's thinking just because it has dominant position right now because it will be added to indices so therefore -- >> i really think that we're in inning one of facebook's growth. now, i don't want to pay a lot for that because i haven't seen them execute on those ideas. i can take a long-term approach and sound disinterested. i have a hold sitting on the sidelines. i like to see it play out. i really think facebook has something here. i do believe that. for me it's a question of price. so many other stocks that you can buy. i mean, amazon, which i think is expensive is going to grow even at 24% this year. google, 18%. trading at 14 times. i know a company that has not as big a global network as facebook, they have about 300 million fans around the world, they are growing revenues 75%, earnings 85% and they traded 11 times earnings. apple. it is growing significantly

faster than facebook. they have a dividend. they traded a fraction of the multiple. over the last month we seen apple shares with a gift to the market. >> ironic that people were selling apple to a large degree to get a piece. >> they should buy apple back. >> they started eon friday and continue today. >> that's the right move. >> thank you for your time. appreciate it. for more on the nasdaq situation, let's get over to kayla tausche back at hq. >> good morning, simon. as you can see i'm not at hq but in front of the nasdaq with all eyes are where that facebook stock is tanking in the premarket. with premarket volume at 9 million shares, that is roughly just a handful of transactions if you think about fact that some institutions were given a million shares a piece. that is just a few transactions trying to get out ahead of what is expected to be waterfall volume today in the market.

remember on friday over 570 million shares traded and a lot of people didn't get to transact and we're expecting that volume to be heavy today. those numbers are important because sources estimate that morgan stanley burned through half of the allotment on friday so what does that mean? that means they will likely spend between 25 and 35 million of those shares to cover an established short position to stabilize that stock. if what they have left is just half of what was 63 million share overallotment, no matter how many shares they put to the market today, the volume could be too great for them to stabilize in any real way and as we're seeing that stock is headed straight south today. one other criticism of what morgan stanley and other lead underwriters have done on price is they priced at the top of the range but what nasdaq is responsible for is any potential glitches in the stock on friday as we know issuing a maya culea

over the weekend. the real crisis is one of confidence. people not getting executed trades. i could have traded more but i won't. that's a confidence killer going into today's trade. >> all right kayla tausche, thank you so much for that report. we want to send it over to mary thompson just outside of jpmorgan for the latest with ceo making comments from deutsche bank conference. >> these are highlights from jamie dimon's keynote address here at the global financial conference. he talked about losses in chief investment offer saying they are make advancement on risk reduction. he wanted to make sure they maintain the dividend and won't impact that at all. they are suspending stock buyback program. the reason for that is yahoo! says they have a glide back so they are going to suspend the buyback program until they reach that. they will resume it at one point but won't tell us when. he said we won't griff a running

tally on the losses. he does hope they are basically out of the way by year end. a couple of other things. he said one option is to take some unrealized gains that they have in the cio totalling $8 billion but says they may not do that because it won't be tax efficient. just commenting on the market environment in general, he said that jpmorgan continues to be worried about credit as well as europe. when asked why they disclosed losses, we're trying to do everything by the book because some people asked why did you disclose them? that's something a number of people have been asking. melissa, back to you. >> thank you very much. let's take another look at facebook shares. down over 11% at this point. haven't had a chance to talk to a couple guys who run capital market bets and weren't involved in the top ranks of underwriting to this deal. a couple of them point to blackstone as perhaps not a great shining example of what

happened here. there is blackstone. you may recall this company came public in 2007, i believe it was. amazing to think over five years ago around the same time period. and priced at 31. open opened 35. traded down to as low as $19s a share. never recovered from the ipo price. we'll see whether that's in fact the case for facebook. of course some people say at this point given this breakdown in the shares, you're going to have to wait until the next quarter, until the actually quarterly report to get back to focusing on fundamentals of the company and seeing momentum because that momentum out of the gate was never established with this stock. many would put that fault at the foot of nasdaq. nonetheless, no momentum. a broken issue at this point. and as kayla well pointed out moments ago, they probably worked through the green shoe. and then you get to underwriting

fees, don't forget they can put the profits that they are making, let's assume they came into support the stock at 33 and stock is now trading 34, well they can put profits back into the market to try to continue to support those shares and as bob pointed out early, obligation on part of the underwriters to keep an orderly market and not get that stock back to 38, which we may not see for some time. we'll see. >> don't go anywhere, we'll talk about facebook's sobering debut. i want to bring in a reporter at "the new york times" and a reporter at the "wall street journal." the thelma and luouise of facebook coverage. on spectrum of ipo's from flawless superstar ipo to disaster, where do you put this? >> it's not quite a disaster. facebook is worth according to my calculation $90 billion. this is still valuable company. obviously friday was a

confidence issue. i think when you look at the first hour of trading and traders can't really make a market, they don't know if they have their shares, that's going to be really troubling for traders. i talked to people who are looking at this feeling there's not enough valuation support so despite the wildest optimisms and confidence that people had coming into this, i think it's very hard to trade at it at $38 a share. >> do you think underwriters are at work at 34 or is that done? >> they could be. as david pointed out, they need to stabilize the stock at this point. it does feel like we reached a point -- i talked to some traders who tell me they would like to buy at this level. i think people are waiting for catalyst on the horizon. their next earnings report. if there's going to be other analysts reports that will explain why the stock should be worth. i think people are trying to find where there is the floor and where there is going to be support for valuation for facebook. >> those kind of clues could be

off. they could take a while too get here. >> it will take a while. one thing that people are forgetting is the bad news that came in right before the ipo and gm decision they would pull ads from facebook and people think $10 million is not a lot of money. it's the third biggest u.s. advertiser. the fact that a few days before the ipo they decided to announce they wouldn't advertise on facebook, that's as confidence shaker. after that you had early investors deciding to sell their stock. those two things together already put some pressure on it. >> there's also a difference in that this traded on secondary market for some time. what role do you think that had in how this is trading right now? >> that's a really good point. one thing i spoke to somebody at the second market who is responsible for all of the facebook trades and he sort of said, you know, i don't think it's a big deal. another day in the facebook trading stock market. facebook has been trading for several years now. so it's just another day. i don't buy that.

>> another factor that's important to point out is retail component here. several weeks ago we talked about how facebook really wanted to get more shares to the people and they ended up at 20% to 25%. that's a large component for typical technology offering. that introduces more volatility when you feel like there's not support for facebook and a very high valuation, these retail investors run to the hills more quick rly than institutional investors. >> they increased price and sale of this deal. those are two things to get away from. it may be a while until we hear from them. what are people going to be focused on when we get the first quarterly report from this company as a public company? >> i see the biggest issue for facebook and when i speak to investor is mobile. something that everybody keeps talking about. it's mobile. it's diversifying revenue and advertising. advertising made up 85% of revenue and now we have

questions about whether advertising works on facebook. that's one question. next problem is they have all of this mobile growth. users are going to mobile. no way of monetizing mobile. all users are shifting to a forum where they don't have a way to make money. >> in the meantime, in the more immediate future, there are problems for mutual funds that have shares. they could have gone towards 44. now they got to mark to market in futile funds at 34. so presumably they now if they didn't do it on friday, they'll do it today. they have to show substantial losses on facebook holdings. >> i think the thing that facebook feels is they were looking for long-term investors for people who will hold this stock for a long time. you know, that sort is how they decided to make up their book and what they chose and maybe that will save them at the end of the day. i mean, that's really all we kind of have or they have at this point. >> story is not over. it will continue to get written largely by you two ladies. thank you for your time.

other big news this morning, jpm on a downgrade of several major institutions. we'll speak to the analyst behind that call next on cnbc. we have product x and we have product y. we are going to start with product x. the only thing i'll let you know is that it is an, affordable product. oh, i like that. let's move on to product y, which is a far more expensive product. whoaaa. i don't care for that at all. yuck.

you picked x and it was geico car insurance and y was the competitor. is that something you would pay for year after year? i, i like soda a lot but for a change of pace...

take a look at shares of facebook. it had dipped down to 33 earlier in in the session now down 11% on the session. moving on here, jpm making a

bold call downgrading major banks. the analyst behind that call joins us. david, great to speak to you. >> good morning. >> i want to get to that major call you made but i want to ask you about retail brokers and impact they have seen from facebook. we had ceo and chairman of knight capital on earlier on the show and estimated that industry wide losses could be about $100 million. what are you hearing in terms of impact on these three brokerage firms. >> the retail brokers would not get a whole lot of allocation on the ipo itself and retail investors are obviously often buying in secondary market after the stock opens and they have seen a decent amount of activity and obviously been a fairly popular ipo but in the grand

scheme of things i don't think it will have a huge impact on trading activity this quarter. >> not even a net positive in terms of increase volume? we did see a tremendous volume on the nasdaq on friday overall. >> i mean, you know, it's a positive but if you look at charles schwab, they have $1.5 trillion of assets. it's a pretty big institution. >> all right. want to move on to your call on brokers. you cut jpmorgan, citi, bank of america to market underperform and call the group uninvestable at this point but no differentiation of jpmorgan based on trading losses and share buyback. does it in your view, can it be lumped together in the same way in terms of downside trading risk or greater risk to jpmorgan? >> well, you know, we downgraded all five of the firms based on confluence of event. europe started to spiral beyond the point of recovery in our

view we're going to have some damage there of some sort and it could be potentially severe. hopefully not. we have bush tax cuts expiring here in the u.s. at least the risk of that. we have our own deficit issues that could reach ahead in a few months. we have presidential election and then with jpmorgan fitting in making the volcker rule implementation far worse than we expected. >> a lot of this call is based on expectation that greece does leave the euro and that at least some problems ensue as a result of that, correct? >> yeah. you know, we had previously viewed a greek deficit as plausible and not probable and we have now looked at the scenario and looked at the consensus view of people that are closer to that than us. greek exit now is alarmingly

high probability and when we look at the withdrawal data from the greek banks it's worrisome because it has potential to spread to italy and to portugal and it's a very heightened risk period right now and the group has fallen about one quarter from the peak. as we have seen in recent years, we could fall further and that's unfortunately going to happen over the course of the summer. >> could you spell out what the transmission mechanisms would be from greece and big american names because we've been told by many people they may not be that badly impacted. >> well, you know, our biggest case scenario is we have a greek exit and greek bank failures and i think in that context we probably have single digit billion dollar losses. but capital market activity not unlike we saw second half of last year, it can sag quite a

bit and revenue can be weak. we slashed estimates as well. that's our base case. it doesn't mean down the road we're going to have significant damage but it does mean that group is probably going to underperform quite a bit. now, you have to add in the possibility that if european citizens see greek banks collapsing, they'll withdrawal from their own country's banks as well. it's easier over there. the different region is not that difficult for spaniard to take their deposit to a local bank and put it in a german bank. we really don't have that dynamic in the u.s. >> can i just talk about jpmorgan for a moment and of course we have the news from jamie dimon within last few minutes that stock buyback is being suspended from now. i witnessed real anger over the weekend from people that work within jpmorgan. they feel that the stock market

move on their bank has been overdone. they feel that the events there have not been put correctly in context and that it could have a real impact on stock base and ability of the bank to function in certain key areas of the u.s. economy. are you aware of that anger? do you have any sympathy with it? >> well, you know, i think on one hand they feel like it's been overdone on that specific issue. $2 billion loss even if it becomes $6 billion is not that material. i can understand that part of it. as an employee who you always like to get stock issued at a point where you think it's cheap. you don't want it to be issued to you when it's expensive. there's a blessing in disguise there. in terms of hurting their activity, you know, i think a big dealer in particularly in fixed income needs to have flexibility to take risks and to absorb bad times and also to hedge and there's an execution

mistake here that was fairly egregious but obviously it's not good for that company and it's not good for the system and it's not good for the country to throw the baby out with the bath water. >> great to speak with you. thank you for your time. david trone. we should note that we have a turnaround going on in the markets. all of the financials pairing their losses significantly including jpmorgan down by less than 1%. and the nasdaq is up by almost 1% overall. watching some strength here in the market. >> still ahead this morning, the president and ceo of discovery communications david zaslav will join us to talk about his empire and oprah's strouggle with the own network.

are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need. siemens. answers.

in your fight against bugs. ortho home defense max. with a new continuous spray wand. and a fast acting formula. so you can kill bugs inside, and keep bugs out. guaranteed. ortho home defense max. ♪ 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. a hangover for people that lined up to get facebook on friday. be a part of history. stock about almost $5 clr lower than on that morning. 33.87 the last check. one of the names we'll pay attention to today, tomorrow, for a while. >> yes indeed. when gary kaminsky said it could

break syndicate, i said what are you crazy? and well -- >> it didn't that day. not even a cent. >> so close. and then of course it certainly has now. still to come, we're going to sit down with the president and ceo of comcast cable to talk about the push into the cloud and surging costs for sports content. stick around. ♪

[ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪ and no matter where you are in life, ask your financial professional how lincoln financial can help you take charge of your future. ♪

material stocks have put on decent gains. this is very much in general market terms the reaction to a rough couple of weeks. the dow down 3.5% last week. we have come back quite nicely. financials are doing well. let's have a look at the move so far as we embark upon another week's trading and you'll see that here at the nyse it is three to one and over at the nasdaq, the much troubled nasdaq, again, three to one advance to decline. >> let's get a quick market flash from brian shactman at headquarters. >> take a look at herbal life. got eight new licenses for direct selling in china. already in 24 provinces. they are off a little from initial pop but up more than 1%.

the other one herbalife to get healthy and krispy kreme to get unhealthy. we thought this company would go away and i do have a good trick for day old krispy kreme. wrap them in a paper towel and nuke them for ten seconds and they'll be good. >> thank you for the tip. a little over an hour into trading. sharon epperson. >> it was an incredible move at gold last week and this week we'll look to see whether we'll see the same type of performance. gold prices almost broke through 1,600 an ounce overnight. dropped off a bit and now rallying back a bit holding steady right here as the euro has gained a little more ground as well. we're continuing to watch what happens in terms of the support that we have for the market. they see invest flows with a price target on gold for the

second quarter. they are looking at the fact that even though we saw that sell-off at the beginning of last week and rally, we're still looking at holdings for gold etfs and still less than a percentage point shy of their all-time peak. holdings are steady. look at the natural gas market. natural gas is seeing the biggest sell-off that we see in the energy space but that is after rallying to highs we haven't seen since the end of january. natural gas prices still up near those levels we've seen highs for the year. back to you. >> thanks a lot. now that facebook ipo is in books, what other ipos may be on the horizon and what's to make of friday's big glitch? brad miller is over at deutsche and over the past five years has priced over 200 lead managed deals helping raise over $100 billion. he joins us from the deutsche bank global investors conference in new york. thank you for being with us. >> good morning. thank you for having me. >> i know you can't talk specifically about facebook.

do you think the environment for new issues changed on friday? >> i think investors may take a pause just given how ultimately the facebook transaction has traded but i think more importantly one of the met ricks we looked a is overall market volatility. it's gone from 15 a few weeks ago up to the 25 level before the markets opened today. and that impacts individual investors and repositioning portfolios and how individual investors will look at 401(k)s and money flow. one thing we look at is april was the worst month as far as money flows that we've seen since 1984 and may is already trending in that direction. we need to see a turnaround in volatility which is obviously impacted by some of the global macro issues pushing the market around. i think that's more of an important metric than any one particular company. >> that's a number that will get

your attention. so to the degree there is still a sweet spot, is it in tech? >> i think so. i think when you look back at least for the class of 2011 and 2012 ipos, the best performance has been from the small and microcap tech companies. most of the ipos is where you get pricing tension and transactions well over subscribed and investors that build those positions in aftermarket and create that aftermarket performance. anything that has a growth component to it, potentially some companies in the energy and natural resources spaces can create some of that demand necessary to get that pricing tension you into ed to flow to successful ipo. >> you just had one of the highest profile of all time. terrible in its debut.

great growth company by the way. does this bring in perhaps price expectations for those that you would bring public? >> that's a very good question. i think one thing that is interesting is when you price in ipo, you have to have a class of already public companies that we call the comparable companies and normally you put an ipo discount on those type of companies. it's hard when you get into large cap situations to find a true publicly traded competitor and put a discount to that. i do think that investors will look more narrowly when a company is coming public on who they are going to compare them to and as long as there's a value proposition, i think investors will come in. i think where we'll take a pause here in the new issue market especially as we face the memorial day weekend but i am optimistic if we see volatility in the market come down, we see some of these macro issues subside, we're confident that back half of the year can be as robust as we've seen in the front half. >> am i reading between the lines to infer that you made it

sound like because facebook didn't have a direct comparable in the marketplace there's no direct competitor and more difficult to value and therefore trading might have been more choppy and sol volatile than expected. is that fair? >> that's a fair point. it's often difficult when you get into large cap situations where you have companies that are 25 to 100 billion in market cap to truly define publicly traded competitor. it's unfair to look at a situation like that and give them and peg them to a competitor that could be more positioned into a small cap growth or mid cap growth versus a large cap growth or value orientated portfolio. it does create a bit of an issue. >> isn't bigger distinction the fact that it is one thing to bring a small tech to market with a very small float and see its price double on the first day to facebook where the volume of stock that has to be assorted

by whichever is investing but investigated by investors more broadly. >> it's a function of supply and demand when you get dollar float in a particular transaction. you can build out over a longer period of time when you have a micro or small cap company going public and the need to build out that position in 48 to 72 hours after an ipo prices before the liquidity dries up is two different dynamics when you look at micro and small cap versus large cap. >> final question. people are out this morning saying not nice things about the nasdaq. i'm wondering if your enthusiasm to work with them in the future has been tempered? >> you know, i think large transactions that have a tremendous amount of aftermarket activity. i think we have to go back and stress test the hardware and

software involved in opening up an ipo. and i think that recent transactions have been an anomaly and one thing that happens is when you open a stock, there is a window of 15 minutes where institutions are able to put in aftermarket orders and buy and sell orders and then there's a process called a spin which is usually a minute to minute and a half prior to opening up the stock where it is basically an auction where you find a clearing level where the stock will open. i think on transactions where there are millions of shares balanced on either the buy or sell side, it's harder to find where to open the stock. there should be stress testing on large situations like this. but in general we're very confident with both exchanges and how they handle opening up ipos. >> good stuff, brad. always good to have you. thank you so much for your time today. >> okay. thank you for having me. >> enjoy the conference. brad miller at deutsche. >> i want to take a quick look at shares of our largest m & a transaction in quite some time.

you see eaton shares are up actually. they are talking about it being earnings in 2014. cooper industry, which we can look up over 26% on this cash and stock deal, is incorporated in ireland and in fact eaton will now be an irish incorporated company in order to help get much more favorable tax treatment. interesting point there to note. we should also point out cooper industries itself was the object of a hostile bid many years ago. that went away after the 9/11 attacks but they had been an aggressive foe for cooper industries trying to acquire that company back in early or mid 2001. eaton will be the new company, eaton, it will be an irish incorporated company. >> ireland or switzerland at the moment seems to be the location of choice to pay corporate taxes, not the united states.

>> up next, the trial starts this morning and we'll talk to the judge who resided over the insider trading trial. that's next. listen to what the man has to say. we got married. i had three kids. and she became the full time mother of three. it was soccer, and ballet, and cheerleading, and baseball. those years were crazy. so, as we go into this next phase, you know, a big part of it for us is that there isn't anything on the schedule.

the teacher that comes to mind for me is my high school math teacher, dr. gilmore. i mean he could teach. he was there for us, even if we needed him in college.

you could call him, you had his phone number. he was just focused on making sure we were gonna be successful. he would never give up on any of us. welcome back to "squawk on the street." want to take a lack at shares of apple near the highs of the day. we have talked a lot on this show about how maybe money was rotating out of apple to get liquidity from facebook. maybe you are seeing the opposite happen now near the highs of the day for apple. back to you. >> it was called the atm effect. we're certainly seeing opposite today. thank you for that. the criminal trial former goldman sachs trial is set to begin this morning. mr. gupta accused of providing inside information. gupta pleaded not guilty. the next guest who is the judge who presided over the insider

trading trial. judge, it is a pleasure to have you with us. >> good morning. >> what are likely defenses of mr. gupta will use in this case? >> you can't determine until you hear opening statements but from statements by his defense counsel, you have to think one defense will be you have the wrong guy. that there are other people at goldman who were leaking information into the marketplace and there is no direct evidence of conversations in which illegal insider information has been passed. it's a circumstantial case and it's not enough to convict is the contention. there are wiretaps but there are no wiretaps that contain direct conversations between a tipper and a tippee. there are conversations that part of the public record from the trial where he was referring

to a goldman director and there are circumstantial indications that they had conversations immediately after board meetings but there is nothing quite as telling as the types of direct trading of inside information that you found in the case. >> he can be convicted with evidence and not necessarily a smoking gun in this case. >> one of the most difficult charges for defendants in these conspiracy cases is every judge will charge the jury that a defendant can be convicted solely on the basis of circumstantial evidence and indeed before the advent of wiretaps in insider trading cases over the decades, that's precisely what defendants were convicted on and frequently the prosecutor just came back with a win. >> having served on a number of juries beyond a reasonable doubt still stands here. >> it's a very important charge. i always talk to jurors at the

end of a trial after they have finished their deliberations. if there's one charge that causes them to slow down in a criminal case, it's the charge beyond a reasonable doubt. >> does prosecution have a harder burden than they would have or would have given it is circumstantial as you say and they have to paint a different picture in some way or approach it differently in some way? >> it will be a more difficult road to hoe for the prosecutor and the chances that mr. gupta will come back with a defendant's verdict are heightened. of course in the past as i said people have been convicted on circumstantial evidence and the timing of trades and the timing of telephone calls will be all important in the trial of the case. >> we're told it could take three weeks to get the jury established there. the jury selection. what is dumbing down of the jury and they might -- can you just explain what they attempt to do and how you view that or how you

viewed that as a judge? >> you would take it all with grain of salt because the defense and the prosecutor are entitled to seek whatever jury they want. and obviously in a case like this, the defense counsel are going to want a >> did you ever get pulled into one of the endless meetings that never gets anything accomplished? sometimes you get tricked into

attending. >> look, donuts. >> you don't want those. >> yeah i do. >> they use them as bait to trap people into pointless meetings. >> wow, that's cruel. hey, ice cream cake. >> glad you could make it, todd. >> i will see you in about eight hours. >> once you're there, you know what's next, listening to people who can be difficult to deal with. dana brown is a president of professionalism matters. we have tips for managing difficult personalities. i can't wait to hear your solutions to these problems. first let's talk about the types of people that drive us all crazy. first, the rambler. >> i think every meeting has the rambler. that person who goes on and on. they're giving you the war and peace version when you really

want the cliff notes version. >> how do you make them stop. >> one technique that i really like, ask them to summarize their points for the meeting notes. it is a chance to compliment them and speed them up. say you are making great points, but i am worried we might not capture it all. could you boil it down to one key phrase. >> i always want to say please shut up now. the next person is the multit k multitasker. >> not only are we frustrated with them, but we have all been that person. they are on their pda or ipad. one of the things we can do is try to develop a ground rule right at the beginning. don't just ignore the problem. bring it up. we're all busy and checking our

e-mail. let's develop a ground rule about how we will handle devices in our session. >> do you say the person's name like hey, joe? >> that's another recommendation, actually. you can call them out. bob, what are your thoughts on this point? it not only startles them and gets them engaged in the meeting but it sends a signal to everybody else. >> interesting. okay, the dominator. >> yes. a lot of times we are so afraid of the dominator. that is the person sucking up all of the wind in the room. they are really dominating and not letting people get a word in edgewi edgewise. one technique i highly recommend, compliment, document, then pivot. you might say, carol, these are really great points. i had not really thought about that. let me be sure we get that down on our flip chart and i'm wondering, mark and greg, what

are your thoughts on the inventory issue. >> so you interrupt? >> yes but i interrupt with something positive. >> you are so much nicer than i am. okay, so meetings in general, because i have found that most meetings are pointless. maybe it's my imagination and i'm too hyper active to sit down for an hour and listen to a bunch of people talk. >> you are exactly right. it's funny. in my training class when i am teaching people how to prepare, i tell them to ask the who what why where and when. but ask the why question first. if you can't convince yourself that you really need to have a meeting, you don't need to have it. >> why do businesses require so many meetings, then? >> i don't know that they are requiring them. we have gotten a little lazy.

people have problems and issues and instead of figuring out the best way to tackle it, they say let's have a meeting and they invite everybody. it has become the go-to solution and we need to question that going forward. >> it has been very interesting and enlightening. the one. the accord. smarter thinking from honda. at bank of america, we're lending an in communities across the country. fro omrevi htalielzeping t a neigbrhbooklyn..or.ho financing industries that are creating jobs in boston... providing funding for the expansion of a local business serving a diverse seattle community... and lending to ensure a north texas hospital continues to deliver quality care. because the more we can do in local neighborhoods and communities, the more we can help make opportunity possible. we have product x and we have product y. we are going to start with product x. the only thing i'll let you know is that it is an, affordable product. oh, i like that.

let's move on to product y, which is a far more expensive product. whoaaa. i don't care for that at all. yuck. you picked x and it was geico car insurance and y was the competitor. is that something you would pay for year after year? i, i like soda a lot but for a change of pace...

>> okay. we just got word. you are looking at live pictures now from a new jersey courtroom. just a short time ago, tyler's father made an impact statement. as you know, his roommate is about to be sentenced for hate crimes in the suicide death of tyler. i want you to hear what his father had to say.

>> he had no pull to do what he did. tyler never did anything to make him dislike him or to cause him to retaliate for some wrong-doing. no, he did these criminal acts because he saw my son as not deserving basic human decency and respect and because he was different than him, below him, and because he was gay. >> he could face ten years in prison. wi should know later today what that sentence could be. he could also be deported to his native india. >> sobering numbers about the damging effects of teen aged obesity. a number of young people with diabetes more than doubled from 9% to 23% in a span of less than

ten years. that does it for me. thank you so much for joining me. cnn newsroom continues right now with ashleigh banfield. >> hi and thank you. i am stepping in today at 11:00 on the east coast, 8:00 on the west coast. and the fighting is not over, not by a long shot, but a formal end to the war in afghanistan is within sight. as we speak, the 28 member states of nato and many no non-members are planning their pull out. day two of the nato summit began one hour ago with the president, our president presiding. >> today will decide the next phase of the transition, the next milestone. we will set a goal for afghan forces to take the lead for

combat operations across the country in 2013, next year. so that they can move to a supporting role. this will be another step towards afghan's taking full lead for their security as agreed to by 2014 when the combat mission will end. >> and police are certainly hoping that their mission is a lot easier today. easier than it was yesterday. what a mess. protesters opposed to the war mu among other things, vow to be back out on the streets again.

>> we're not expecting that protest to get out of hand. yesterday we were not expecting it either. and of course you see those images and it did, following a planned protest. that's when the clashes started to begin. 40 plus arrests and several injuries to some protesters. one guy lost some teeth, another was hit in the head and was bleeding but there were also injuries to the chicago police department. four officers injured. one of them apparently stabbed in the leg. he got a little emotional when he was asked why the police officers were using their sticks on protesters. take a listen to what he said. >> these officers were highly trained and highly skilled. if you think it's easy to ask people to do what they did, it's

not. asking people to put themselves in harm's way, knowing they were going to be assaulted and to be able to stand there and take it? these guys are amazing. >> they are ready for the worst, hoping for the best again today. it was a long day. a lot of the businesses including folks are urging their employees to work at home today and not come down into the city. >> so ted, the protesters often want their message to be seen by people like you and me but they also want world leaders to see what they are doing. but as far as i can understand, the leaders are a long way away.

>> a red zone or security zone was set up around mccormic place. they felt like they were not >> john edwards jury. back at work. you will probably remember at this point. >> it's all in the hands of the jury. all of this stemming from an affair that he was desperate to keep secret back in 2008. they got that case back on

friday but they had the weekend off. so they came back this morning. he is facing decades in prison if found guilty. we will bring you the verdict soops it happens. >> and a judge has made a decision. no extra time for the defense to prepare the case. the defense team had asked for a continuance. they wanted more time to build this child sexual abuse defense. this trial is going to go ahead as planned. >> a bethere was a charge that

attempted to rape a new york hotel maid wu that was dropped. we are monitoring developments now in london. this is starting to get somewhat repetitive. it is hard to keep some of this straight. if you could clear this up for us. bring this story in for the prostitute and tell me why it is connected to the existing investigation. >> if you might remember, the existing investigation is called the carltop affair and it's based on a hotel.

we don't know exactly what the women have testified to. that investigation is still ongoing. at least one of the women has described a violent sexual encounter. and that's where the gang rape allegation comes from. however, the other woman who was there also as a witness has slightly different testimony. she does not recollect that violent we are in this process of investigation trying to see what other facts are coming into light. they are investigating it. we will have to see if there are more details that come out. >> he has been forced into battle on a number of different legal fronts. criminal, civil, shore to shore. is he saying anything? or is his wife saying anything

either? >> neither his wife nor himself have said anything. >> now, what we have heard >> his lawyers did not deny that he attended tex parties but did not know they were prostitutes. >> oh, well there is that. one more thing we should let people know as well involving the new york hotel made, she did

>> on thursday. >> i think it's probably less competitive and certainly a black eye. it is all about the degrees of materialalit. . it is a very mature business with nearly 10,000 issuers. the number of new issues will be 100 or 200 in a good year.

>> here we are seeing the other side of it where nasdaq will be receiving the disproportionate amount of shame. >> buying on weakness. your rating is now perform. target is 34. >> what do you expect to hear over the next couple of months? >> well, we will be reassured as ipos come to market in the pipeline. and if companies have already committed to ipo.

>> we don't think lit lead to a disproportionate shift in share. >> all right. we will have to wait and see. thanks very much. joining us. >> we have got talk. >> let's get to capital markets looking at the winners and losers. >> good to see you. i want to do that in a second. but let's make a point this is a developing story. the facebook story is still developing. what is happening now. they are being told right now. let's remember this is a developing story. a lot of people as we pointed out when this was all more or less happening live in this hour on friday, it continues. people are being told they get stock. what we call, i don't want to get too technical.

i don't know that trade this is happening as we speak. and it will continue to happen throughout the morning. initially morgan stanley, a big winner. they got the deal. and also as i the fact that morgan stanley was able to distribute this retail was seen as a very good thing. yearly a loser here. how much. >> i know we have got speed it up here. some people say the new york stock exchange and the specialist or transaction system.

the industry is a major loser here. when i heard on wednesday morning that the sides of the transaction have been increased, you knew the deal had been upsized too high. who was the ultimate winner? you want to take a guess? you know why? they now can tell all banking clients. if we had led this transaction we would have not upsized a deal. whether that is fact or not, that is how the banking business

works and i can assure you that's what is going to happen in the months to come. >> always hard to know what would have happened if. >> people are still being informed right now. >> thank you very much. it is interesting. a good tweet on the goldman sachs. win win. western digital announced that they are moving to the nasdaq.

>> when we come back, a facebook investor who has serious concerns about the company. with us live to talk about facebook, walmart's bribery scandal and a lot more when squawk on the street comes back.

>> mark zuckerberg owns 278 percent of facebook. the second largest us pension

fund. the california state teacher's retirement system. >> given the events of the last hours, diversity is not high in terms of priorities. your reaction. >> i would probably say that the word performance is never more important than it is. i think we got through a honey moon period here that is pretty euphoric. now we're waking up on monday after the marriage, the investor marriage here.

given the dual class structure and the dispart structure. these thing will start to weigh on stock price. >> how much pressure are you willing to bring on that front? >> in the period that we are in, that has legal constraint about the conversation now that we're through that period and i think there is a lot of issues being put on the table this is the time to open that conversation strongly. the three points we have made from the beginning was concerns about dual class ownership. this is not unique to facebook. but it is always a cloud for investors to have that ownership structure. secondly the dual position of ceo and chairman of the board and diversity. i will not give that a secondary position. we believe that diversity is

fundamental to board performance. >> will you propose to end the dual class. >> simply to buy shareholder resolution and throw your hands in the wind at that approach. the first step is always engaging the company and having a conversation about how investors see this issue. that is where we will always start with this. so we will. >> i know he is always about the long term. you must have some reaction to a 33 pript today given the hopes for the stock on friday. as i said, it is after the

marriage has been con sue mated and the reality of revenue generation and all of those factors weigh on investors. it's not surprising to me that there is going to be a lot of volatility around the stock for some time. people really scrub it. i mean, they have handed the sec rule book and they are in a different league than they have been in before. i am sure there is going to be some uncomfortableness with investors looking over your shoulder every day and valuing the work that you do. >> finally switching gears to walmart, you own 5.3 million shares. i understand you have made some decisions lately about non-support for the board there. >> several things. there continues to be growing insights into the walmart situation that would suggest that the situation would be broader. so that clearly is disheartening to think that that would be

true. when there is break down in internal controls, that is not surprising. but given that the meeting is coming up shortly, we all have to make decisions. our confidence in the boards of directors in the companies and we have made our decision to go gengs the entire board. >> in line with what a lot of funds have bp doing in new york. >> and we will be able to be there in person. >> i hope you will come back soon. always a pleasure. are you still sleeping? just wanted to check and make sure that we were on schedule. the first technology of its kind... mom and dad, i have great news. is now providing answers families need.

siemens. answers. 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. i'm making my money do more. i'm consolidating my assets. i'm not paying hidden fees or high commissions. i'm making the most of my money. and seven-dollar trades are just the start. i'm with scottrade. i'm with scottrade. i'm with scottrade. and i'm loving every minute of it. [ rodger riney ] at scottrade, we give you commission-free etfs, no-fee iras and more.

come see why more investors are saying... i'm with scottrade. [ technician ] are you busy? management just sent over these new technical manuals. they need you to translate them into portuguese. by tomorrow. [ male announcer ] ducati knows it's better for xerox to manage their global publications. so they can focus on building amazing bikes. with xerox, you're ready for real business.

>> we will talk more about the market action. back in a moment. [ male announcer ] the inspiring story

of how a shipping giant can befriend a forest may seem like the stuff of fairy tales. but if you take away the faces on the trees... take away the pixie dust. take away the singing animals, and the storybook narrator... [ man ] you're left with more electric trucks. more recycled shipping materials... and a growing number of lower emissions planes... which still makes for a pretty enchanted tale. ♪ la la la [ man ] whoops, forgot one... [ male announcer ] sustainable solutions. fedex. solutions that matter. welcome to the world leader in derivatives. welcome to superderivatives.

>> greece would leave the euro zone assignment and have a messy exit.

>> you have people cutting their risk positions. you have a powerful rally coming in for some of the markets. >> london doing well.

>> the european markets are closing now. >> we are still down in italy. it become ascii focus coming out of the g-8 meeting of the weekend. he is going push the summit on wednesday. we have discussed so much. i don't know that you will get that through. he is able to get the ejection from the savings funds. or promise that if greece does

go down the pan, there will be large scale buying. these are the types of things that they are now beginning to discuss. that direct passage of cash. if that was to happen without going through. that could really ease the situation that we have at the moment and that is doable. >> they have found ways to come to the rescue. >> and that may be to say okay. then we have to build the fire walls higher. so okay, let's say the ecb will buy bonds in that extreme situation. >> i like it a lot. thanks sigh mop.

let's get to the capital markets editor. >> get off the phone. we're ready for you. >> i didn't realize you were coming to me. but that was live. >> that's tv. >> it was about facebook. we will get back to you. the horror stories continue to come in. one of the largest domestic movie theater chains. just call about the type of

transactions one can imagine happening as a result of the fact that maybe the huge amount of money that is over there. u.s. domestic center of businesses. >> if it's -- one business that always generated a lot of cash. so the idea that it is not left for dead. if i wanted to try to come up with businesses that generate a lot of cash may not be trading at crazy multiples or that sexy, i can envision many, many transactions.

>> leave the ear piece in. >> did i say anything on the mike. >> it makes it look like you're not prepared. that's what we're supposed to do. we're working the sources. good for gary and what's going on. the street is all talking about facebook. there are two questions that everybody is trying to figure out. did nasdaq make the right call by not helping the stock shortly after the open. keep the stock open and a lot of

people felt that number one if it would have been down here they would have halted it. and then reopened it once everything cleared. it may have created a problem with them being able to open it. people are going to be trying to hash this out. would this have happened. how would this have been happening differently at the nyc? the problem was the way they process orders into the system. a couple minutes to give everybody a chance to settle

down. the book is frozen. he will announce this. no more orders. we're closing the book off. that gives them a little bit of time. there was obviously some problems with the messaging center. a little bit of the process. we don't want to actually close it off a few minutes before. we will go right up to the opening of the stock. i think there was a lot of debate about process and a lot of debate about what system is a little bit better right now. still no answers. i'm sorry i can't give you answers but that's the hot debate. >> fascinating discussion.

people are cancelling on levels that we have not seen. we have had a call here from a. >> i wonder if the sentiment is prevailing where you are in europe today? >> thanks. our economists have raised their expectations. it is more likely greece ends up leaving sometime in the next 12, 13 months. the risks relatively unknown in

many cases. >> you have written about evaluation and policy. >> your buyers have dips. >> either of those things is about to happen? >> if you look at european non-financial equities on a simple prospect. >> for ugs to believe that we

want to be bears and structural bears, we need to be big believers in earnings collapse. we even need to see a very severe european-wide recession. so one of our keys for the european equities for europe over the next months or so is where the u.s. goes into recession. we think the answer is no. >> in terms of regions, what do you think is the better buy on a relative basis. >> how do you break up the continent? >> we did some work rr investors

would have made more money in four of the top five year to date. europe lost a lot more money. there has been a clear north south trade that we have lost two or three years in the last few weeks. the south was d rated so price has fallen aggressively. so actually, the likes of spain is cheap relative to the dax and germany. we will stick to our tried and trusted themes. things like defensive growth. things like world champions. world leaders.

before this offering case most of the time. >> interesting. you don't want to be too clever. given the fragility of the situation. straight ahead, the word from the street on today's market moves. take a look at some of the winners times two. ♪

♪ i can do anything ♪ 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.

high schools in six states enrolled in the national math and science initiative... ...which helped students and teachers get better results in ap courses. together, they raised ap test scores 138%. just imagine our potential... ...if the other states joined them. let's raise our scores. let's invest in our teachers and inspire our students. let's solve this.

>> comek up in just a few, is the honey moon over for facebook? stocks see their best day this month and is the yahoo! turn around on track? a top analyst gives us the trade. lots to cover. now we will head down.

>> want to bring in our good friend. ubs head of floor trading. you have seen a lot of these things come and go. as best you can reconstruct this, who is at fault? do we know. >> he is a plain spoken guy. he doesn't pull any punches and he doesn't make things up. he was closer to the cockpit than anybody else. that may be a good telling of it.

>> because of that performance we are getting no premium here. >> people talked about it being 25 times simpler in asia alone. do you think they were too greedy at the end? >> you know, you go back and you look. the increase the size of the deal, you increase the price of the deal. that was pushing the envelope to some degree. then you have the technical problems on top of it. unfortunately, everybody is paying the price for it now. >> overall, it certainly led to a spike in volume. i think combined, best since november, something like that? >> there is good and bad in that. the volume last week increased each day sequentially. but we also had down days.

with had five distribution days in a row. we never had that before. that is certainly not recently. we went from 2007 to the march low in 2009. we never had five days like that in a row. you have got some relative strength indicators. >> we have got oversold and continue to be oversold but you never got that desperation

>> that's for sure. and people are nervous. they remember what has gone on over the last five years or so. caution is built in. and those stories as you point out are not necessarily upbeat so people are wary.

tdd# 1-800-345-2550 the spx is on my radar. tdd# 1-800-345-2550 we're hitting new highs. tdd# 1-800-345-2550 and i'm on top of it all with charles schwab. tdd# 1-800-345-2550 tdd# 1-800-345-2550 i use streetsmart edge and its tools like... tdd# 1-800-345-2550 screener plus - i can custom build my own screens tdd# 1-800-345-2550 or use predefined ones. tdd# 1-800-345-2550 and i can trade wherever i want, tdd# 1-800-345-2550 whenever i want. tdd# 1-800-345-2550 the kicker? tdd# 1-800-345-2550 i pay $8.95 a trade. tdd# 1-800-345-2550 that's a deal in any language. tdd# 1-800-345-2550 open an account tdd# 1-800-345-2550 and trade up to 6 months tdd# 1-800-345-2550 commission-free. tdd# 1-800-345-2550 call 1-800-790-7706. [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. ♪ the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz

financial services.

>> clearly disappointed in that.

linked in is down. carl? >> thank you very much. shares of lowe's lower this morning. reporting a higher than expected quarterly profit but lowering their guidance for 2012. daniel bender managing director with jeffreys and co. thanks for being with us. >> you write about a pairing of risks. some of the sales trends, the job picture in the country. not the best time to own a retailer. what is the compelling story if in? er. >> it is tough to fipd a compelling story. >> get tougher here. and the other piece is simply execution. lowe's looks like wile e.

coyote. >> did that get wider this time? >> the comp gap was over three points, which was a little bit higher than we have seen. you have calendar shifts. >> did we see any weather pull forward? >> we did have weather pull forward. i think what we ended up seeing is april gave back a lot of that. >> it has throne some for a

loop. >> there was the thought that well, okay, if people can't get a mortgage, fix up what you got. maybe the home improvement story was in tact. is that in question? is that absolutely wrong? what do you make of that notion? >> the fact that comp store sales are up means that it is improving but not as much as everybody thought. if you look at the counter top and kitchen business, both home depot and lowe's got less promotional and they were soft. the consumer is coming back a little, they still need incentive for big ticket items. >> we would remain patient. i think your price target's 21 unless changed. >> with turn arounds in retail.

you get out of the way for the hard part. >> they need to really sharpen up their strategy overall. maybe as we get later into the summer. >> thanks for your time both of you. . we love theme parks but with four kids, it can just be too expensive. yeah, so to save money we just made our own. oh no! what could be worse than ninety-foot swells?! typhoon!

first prize! it's a cheese grater. wooooo... this isn't scary. are you kidding me? look at that picture of your mom's hair from the '80s. there's an easier way to save. wooohooo... geico. fifteen minutes could save you fifteen percent or more on car insurance. [ male announcer ] introducing a powerful weapon in your fight against lawn weeds. ortho weed b gon max. with a new continuous spray wand. so you can kill invading weeds down to the root.

without harming your lawn. guaranteed. ortho weed b gon max. and somebody asks me a question about the volt. what really blows them away is when i tell them i almost never go to the gas station, despite the fact that they see me driving to work every day. i fill the volt up once every -- maybe once every couple of months. and that feels absolutely wonderful. i'm hardly using gas, but it's there when i need it. anybody that thinks that this car doesn't have solid performance, hasn't driven it. there's no other car like this on the road. ♪ 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. >> take away time before noon here. more to say on facebook. my question to you would be this claim that what happened did not affect their share performance. i wonder if you think that is ridiculous or not. >> i'm going to say it's silly. if i have to sum this whole thing up it's simple. all roads lead back to the nasdaq. and you know, again, you want to take everybody's input and try

to have a balanced opinion here. >> chilling, i think, to listen to joyce this morning at this table talk about flying blind for two and a half hours. >> yes. >> and having your position at the end of that be a surprise to you as well. >> that, in fact, happened to many, many people. . >> there is nothing worse than that. >> i am still getting contacts from people getting contacted now. in terms of buying on the ipo 38 dlrgs a share.