though. >> the fed did far better at keeping the libor rate low than the banks manipulating it by giving those folding entities access to liquidity. >> a scandal about a scandal. doug dechille, thank you. "squawk on the street" begins right now. made it to friday. good morning. welcome to "squawk on the street." live at the nyse. cramer is enjoying a long weekend. futures pretty weak on the back of export data out of china for july. up only 1% for expectations of 8%. exports from china to europe down 16% year on year raising concerns about the chinese economy. europe, they're down as well.

>> the road map starts off with jc pney. as a conference call gets underway. comps and margins came in below, but is ron johnson convincing the analyst community that perhaps there is hope? >> the most valuable sports franchise goes public. manchester united, price is at 14. we're going to talk to the ceo. >> yahoo! says it may change its mind about returning proceeds to shareholders. what will they use the money for instead? >> and faber with interesting details on facebook, that is all we're going to say. >> that's enough. tune in. sorry. we start with jc penney six months after ron johnson launched a turn around. reporting a bigger than expected loss. the second straight quarter of declines since the plan was introduced. david, i'm curious as to what

you think because the call got underway this morning and the stock has had quite a turn around. >> looking down as much 6, 8%. i think we saw in the early going, you don't see losses, or i should say, declines like this in same store sales. >> 22% decline in same store sales. >> we thought 19 was bad in q1. >> only got worse. the general theme has been we thought that was bad. it got worse. >> it is stunning, but i guess at this point, the shareholder base is going to be one that believes he can transform this company. if you look at where the stock is and he's speaking now, he perhaps is regenerating some enthusiasm. the most important constituency he has is bill akman. together, they own 75% of the company's stock. he has been strongly behind mr. johnson, talking about it will be a turn around that will take

time, but when the time is up, the stock will be a lot higher and it has not seen that $20 mark since, i guess. >> it's down 35% in the past three months and it's not just the same store sales decline that's troubling. it's also internet sales. down by 33%. so the bleeding continues and it's still yet to be seen whether or not these sre within a store, he said on the call, they do seem to be gaining traction. still early days though. >> it's a name a lot of traders love to hate. a lot surrounding the call. a lot of jeers at some of the metrics. for instance, gross margins. say you don't have a billion in catch by the end of the year, the balance sheet's never really been a question for this company. will it be in the future?

>> giving away so much share and then coming back to try to recapture those customers or new customers, it's a difficult undertaking, but he seems to have his support of large shareholders and for today, it looks as though the market's going to give him a little more time although this is a stock that went from 43 to 19. it ran up sharply after his appointment. last fall, we saw it it those highs and it's been coming down ever since. >> we should warn you about that. and also, as soon as we got macy's earnings, the alarm bells went off for the shareholders. let's get more and bring in stacy, a cnbc contributor. where do you stand on this stock? >> hi, melissa. you guys talked about the main

points. comps were down 22%. ron johnson is on the conference call saying he's still confident. they're tweaking the promotions a little bit here, but i think they're just bleeding share. they've sent away their cu customers. taken away coupons. they're talking about gross margins, inventory markdowns. this is rim nis of what radio shack did. >> the big difference is that they have a powerful big shareholder in bill ackman and they probably have more cash. $88 million at the end of the second quarter. for those reasons, do you see where a hope perhaps for jcpenny? >> this is really and they've made some mistakes. you've scared away your core

customers, so now, you have to get them back in the store. they're trying to bring in the new customer. agen vendors are getting nervous. that's not helping the situation. i think you know, they're bleeding share to macy's. to the off priced retailers and it's going to be very tough going forward and the question is, do they end up back where they started, becoming the promotion drug again going back to coupons. >> do you apply johnson for staying the course? it takes some nerve to go against all the criticism. is that attractive to you in any way? >> i think at some point, you have to look at the rumts and say it's not working and you have to tweak your promotions and go back to offering that promotional drug here. when we go to our holiday and you see the retailers buying for share like last year with gross

margins getting clobbered, jcpenny's going to be forced to do that. you pull the annual guidance. which they never should have issued in the first place, but in the end, i think they're going to go back to a more promotional stamp. >> do they continue to gain off -- >> they do. you have macy's. they've been taking some share. then, the off price retailers. tjx and ross stores. tjx has some international exposures in the u.k., which is a good thing. that's a new outlet that's working. kohl's should be benefitting. they're not. they've had some self-inflicting issues, but they could potentially. so that's really the the group to watch out for. >> finally, obviously, some shorts are a little nervous here today. if you were short the name, would you be a little leery

going into the regular session? >> well, i think there is some short covering. the news was much worse than expected, so everybody's piling on and covering their shorts here, so it's probably played out for now. and once we get into the quarter and the stock does rally, sure, you can look at it as a shore, but for now, i would cover and say thank you very much, this has been one of the best shorts out there. >> a quarter of the shares are health. thanks as always. >> meantime, a big day here at the nyse. soccer power house manchester united is set to make its debut. below the 16 to $20 range the company was seeking. i wish we could give you a look at what the balcony looks like. there's astro turf. there are nets around. not just inside, by the way, on the trading floor, but outside

where there's a huge crowd as well. >> jerseys playing soccer against each other and they're handing out jerseys. almost everybody's wearing one. >> still, a lot of discussion about the blazers, fans, ticket prices. bob pisani's here to wrap up -- there's a look at what's happening outside. >> that's a big part of this. the soccer acrobats. they've got a rock star stage out front. the nyse's going all out. there's goalie nets in front of us. people are going to be kicking balls around on the floor of the new york stock exchange. the question is what's going to happen to the shares. the price, 16.6 million shares at $14. that's well below the original price. perhaps more important is the voting structure. offering at 16.6 million. 39 million class a shares, but there's 124 million class b shares that have ten times the voting rights of the class a

shares. we've seen this story before. so management essentially is going to keep about 97% of the voting power. this may be one of the reasons the attempted listings in hong kong, singapore, were not successful. the firm is taking pride in a deal, the family also owns the buccaneers. i think the important thing is the good news is they're priced at a discount, below and it may open with a pop. we know they did this successfully elier in the week. it was a bit of a dispoint. 13 to 15. they priced it at $11. it opened at 12. i think it's at 13 now. 13.49, so it was a successful strategy. we'll see what happens. i love to ask the ceo, they're using money to pay down debt. i know why they're doing it. why they're going public. that's pret the obvious it's a very tough business, the the

sports business. we saw what happened, celtics, indians. >> and none of those have been particul particularly good stories for the shareholders during the time they had them and deleveraging in general has not been a theme that embraces a lot of investor's excitement. we've seen it time and again from a lot of the private equity firms. they did lower the price and as you point out, it's done okay so far in the aftermarket, but deleveraging ipo. >> i remember sports in general is a tough business. if you win a title, it's a huge plus for the company. they did not win a title last year. if you lose a big star, it can be a disaster. you can hinge on a lot of tiny factors. where you back the big money is when you sell the company. >> is there any scuttle, we'll see wayne rooney or anyone here today? >> i called and asked, whether wayne was there, david, i forget

his name. the goalkeeper. >> rooney's the guy. that guy is a monster. >> there are rumors, they have set up for a rock tar to show up o out front. the stage is immense. not saying springsteen is coming. >> and traders and their jerseys. >> they're handing them out around the side and keep asking us if we we are them, it will be a fun open. the nyse, they're doing this a good job of making this a fun event. >> and the fan base is -- >> unusually large. >> 159 million fans. 27 million friends on facebook. this is a franchise. >> far beyond its hometown. it's really in a sense a global franchise. >> which is what makes a difference from the cleveland

indians and celtics. didn't even try to throw in the mets. >> mets are barely a franchise for those of us who grew up in queens. >> soccer is a truly global sport unlike baseball. >> there's plenty of people in the major leagues from a lot of other countries. we're not going to debate sports. let's move on to facebook. facebook is looking for some friends. friends, that is, with deep pockets. the cfo is in new york today meet wg what i'm told are ten large investors. it's an effort to try and create demand for stock given what will be a great deal of supply as shares of facebook become unlocked. it's the first meeting of its kind since the company emerged from its period following that what's called a poorly executed ipo and melissa, you've talked a lot about the unlock period. i think it's the 19th we get 200 million or so shares and roughly

1.4 billion shares in total over the next few months. but what's interesting here is they have a hand picked group of institutional investors, very large from what i've told, david evers is going to try to answer some questions and convince them to start buying the stock. these are not necessarily holders now. these are potential people to come in and buy it at $21.38. >> any sign of erosion between facebook and morgan stanley in terms of a relationship? >> you know, i do know that the bank sponsoring this meeting today is not morgan stanley. and so, that is kind of interesting. in fact, it is jpmorgan from what i am told, which was a co lead, but clearly did not take the lead on the underwriting. it's not uncommon to see this to a certain extent. i mean, some companies are quite aggressive about meeting with institutions, however, facebook certainly has not been.

they had a road show. evers led the road show. zuckerberg showed up, but this has a long time past that period. >> and seems like it really missed an opportunity in the fact that a lot of shareholders have already said good-bye to facebook shares. got the report they started dumps shares. as a shareholder still in the stock, you've got to think where was the cfo then? were they on the phone trying to support the stock? >> i think the key question is what kind of questions will they be willing to answer? is there going to be a level of more discourse that's going to give them a better sense as to what's going on? if not, it's going to be a lunch. >> the stock is up by the way. >> when we come back on this friday, the latest data on what the real impact of the drought might be on company's bottom lines and your wallet. later as we said, manchester united gets ready for its first day of trading. we will talk to the ceo live. one more look at futures.

the dow could not make it five straight updays, but the s&p did. if it's higher today, it's the first full not holiday week with noninterrupted monday through friday gains since september of last year. back in a minute. hi. i'm henry . and i'm here to tell homeowners that are 62 and older about a great way to live a better retirement. it's called a reverse mortgage. [ male announcer ] call right now to receive your free dvd and booklet with no obligation. it answers questions like how a reverse mortgage works, how much you qualify for, the ways to receive your money, and more. plus, when you call now, you'll get this magnifier with l.e.d. light absolutely free. when you call the experts at one reverse mortgage today, you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home.

and here's the best part -- you still own your home. take control of your retirement today. ♪ ♪

this morning's crop report gives a look at what the true impact of the drought might be.

jane wells has the details. not encouraging, jane. >> no, it isn't. for the second month in a row, the usda has slashed its corn outlook. a little lower than some predicted. john told me he's not that surprised. the corn crop is now expected to have, be coming at the lowest total in six years. 10.8 million bushels. the price raised to the high-end inching close to $9. what happens when prices go up? well, demand goes down. the usda is also cutting demand projections. 400 billion fewer going to ethanol and demand being met. 750 million fewer bushels going to feed livestock. that's mostly being cut from cattle feed. ranchers are already paying high prices for hay.

range land has dried up and that means more cattle will be going to slaughter early. >> short-term, we're going to see a lot more beef on the market than we expected. which will drive prices down. not much. but it will drive them down. >> and that means next year, prices will spike because there will be less beef. now, here's the bigger story maybe this morning. soybeans up as the surprise by the usda slashing its crop p projection by 30%. now 15 to 17 bucks. the usda has also predicted a 360 million bushel cut in soybean export demand. john doesn't believe that number. he believes there's some inelasticity in demand and demand is going to have to be cut to really meet these projections. he says especially with south america now needing to import

soybean. >> thanks so much for that. a lot more on the drought later. we will have full coverage of the drought. take a closer look at the effect on the economy all day next wednesday. on the networks of cnbc. be sure to tune in. >> as you know, one of the world's most popular soccer clubs heads to wall street this morning in search of fans. tell us something you are passionate about, but would never buy stock in. tweet us. coming up next, we get the word from the street to see how you should be positioning yourself for the weekend. another look at futures. we are looking at lower across the board. we're going to snap the winning streak. much more "squawk on the street" straight ahead. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 gives me tools that help me find opportunities more easily. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer.

tdd#: 1-800-345-2550 and with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 until i choose to focus on something else. tdd#: 1-800-345-2550 trade at charles schwab for $8.95 a trade. tdd#: 1-800-345-2550 open an account and trade up to tdd#: 1-800-345-2550 6 months commission-free online equity trading tdd#: 1-800-345-2550 with a $50,000 deposit. tdd#: 1-800-345-2550 call 1-866-294-5373. heart of every innovation. wow. that feels really good! and now, sleep number introduces our new memory foam series-the only memory foam beds with exclusive dual-air technology that adjusts on each side. memory foam just found its better half. sleep number. enjoy introductory savings of $500 and two free coolfit pillows! plus, a special financing offer. final days! only at the sleep number store, where queen mattresses start at just $699. [ "the odd couple" theme playing ] humans. even when we cross our "t"s and dot our "i"s, we still run into problems --

mainly other humans. at liberty mutual insurance, we understand. that's why our auto policies come with accident forgiveness if you qualify, where your rates won't go up due to your first accident, and new car replacement, where if you total your new car, we give you the money for a new one. call... to talk to an insurance expert about everything else that comes standard with our base auto policy. [ tires squeal ] and if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. call... to switch, and you could save hundreds. liberty mutual insurance -- responsibility. what's your policy?

six minutes before the bell. the crowds are going in anticipation of the ipo. let's bring in art cashin. art, five straight days of gains for the s&p 500. the first time that has happened in five months. what do you think of this climb we're in. >> i think we've had kind of a bipolar five days. we had couple of strong days and really some consolidation. it was good you didn't get much of a pullback. i think everybody would like to tiptoe into the weekend. hold those gains and talk another look next week and see where we're going. some signs of fraying begin to

show up in europe. we had former ecb head came out and said you can't blackmail germany. so we'll see what happens. >> people talk about the transports not keeping up. oil's been up a lot this week. is that a real concern or not? >> it's not the only divergence. the advanced decline hasn't been quite as strong. the russell 2000 has also lagged. you worry a bit when the rally is being pulled by the defensive horses, so it's a divergence to be watched, but not necessarily a great worry. >> so, where is true resistance today? >> i would think you're still going to go through 14.06 through 09. and then if you get to the 14.20 area, things would get serious.

>> we would notice that. have a good weekend. opening bell just a couple of minutes away. two big ipos getting ready for their first day of trading. we'll get that action after the a break. [ male announcer ] if you believe the mayan calendar,

on december 21st polar shifts will reverse the earth's gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans?

there's a look at the crowded trading floor. i can't remember a morning where it's been more crowded or louder in here. it's hard to hear. we've not talked art yahoo! yet. some reports, david, they might be changing their minds. >> one of the key ones being returning cash from the sale of their ownership of ali baba. we'll go through some of the numbers after the call because of man u. and see how the stock

opens. applause for the most high pro file name to hit the floor in a few weeks. manchester united. manchester united celebrating today. we'll talk to the ceo in a few minutes and at the nasdaq, a new york junior tennis and learning organization. let's back up and discuss yahoo! one more time because the idea was this sale would provide about $4 billion. >> after tax. you've got to remember for the longest time, they were trying to do a deal that would be tax free and so at the end of the day, you're talking you know, over 20% stake of a $40 billion company, that being ali baba. if you tax that stake, 7.2

billion, then you get about 4.4 billion after taxes. which is not bad. there's also preferred, you throw that in. 400 million and carl, don't forget, this company has 2.5 billion in cash on its balance sheet, although much is overseas. you're a new ceo. you've been brought in by the new members of the board led by daniel lobe, the largest shareholder. maybe you want to see if you can create real growth using some of that cash as opposed to just returning it to shareholders because when you do the math and if you put a reasonable multiple on it ebita, you get 8.5 or 19, maybe you do give miss meier

that cash. >> your guess is that he would have been okay with this? >> i think so. so. >> so, the stock down 4%. they should take their disappointment with a grain of salt. >> there are analysts who are disappointed by it. it's not as if they're going to return the expectation. they will still return some cash to yahoo! but it appears they're going to give their new ceo an opportunity she feels will advance that stock. it's kind of been stuck this this range for quite some time. >> it's been an interesting week for the name. little earlier this week, decisions she's made in her first few weeks. as we look at these pictures from the floor, i want to try to find bob pisani and melissa lee because they're in there somewhere, guys. >> i think bob pisani is lost in

the crowd. you cannot imagine the number of people, probably about ten tede where man u. is going to start trading. latest indication is 14 to a quarter. we're looking just about 14. this is the fifth ipo, priced below the range. below the expected range, so it will be interesting to see how this opens for trade. right now, we're not looking for the huge first day pop, but maybe this is pretty good. even some analysts had priced the the shares at about $10, so they're saying it is closer to ten. so, we're going to wait for this thing to start trading. we're going to find bob and we're going to hand it back to you in the meantime. >> don't get lost. if you do, we're at the big, huge set in the middle of the room. we'll see you in a few moments. let's take about rim. david, if you don't mind. some reports that even with all the rumors about samsung

possiblily taking an interest, the rumor is ibm wanting to look at the enterprise services division. stock was up 6%. unbelievable. >> there are a number of bankers out there aggressively trying to give the company some sense as to what might be out there, but it's unclear whether you're going to give the company an agreement, sell certain assets of significance or the entire company. that's a psychological barrier perhaps they have yet to fully come across. i don't know specifically, but we'll continue to hear these rumor, stories and debates among investors about whether there's real value there or not. >> whether it's jcpenny or rim. >> shorts are frustrated because it seems like a clean bet, but it's hard to tell. these network centers trying to make this a stand alone business and that was one of the reasons he was pushed out of the

company, so the idea that it becomes its own self-standing unit, either for sale or not is interesting. ironic. >> i think we're going to wait until the introduction of the ten, right, until we really sort of, until they are willing to make a judgment on what they are willing to do. each day that goes by, some would argue it is still a wasting asset. the same way you might argue best buy for example. something else we saw where the shorts might have been disrupted for a brief time, but it doesn't necessarily mean the trajectory's going to change. >> melissa, bob, you guys saw each other yet? >> we have. >> $14.10. >> tight range. >> i have to say i'm a little surprised because they priced it at a discount and wanted to price it smart. we're still checking here. i think i just hard 14, 14.10.

14.10? very, very tight range right now. i think the big thing here is what the ceo's going to say about shareholders. >> they're at a disadvantage. the glazer family still owns majority control of the company. >> 97% of the voting share. voting power is essentially in the glazer family. >> also, they're not required to file quarterly reports or be subject to the same -- >> local jobs act. >> thank you. exactly. they are filing, they're raising capital as the merging growth company until the jump-starter business start-up, or the jobs act, which requires them to not file as much. >> look, small companies, the idea here is small companies should not be subject to the rigorous requirements of reporting that more mature companies are. >> this is a small company, yeah. >> the con side is that it's easy for companies to sort of slip under the radar important financial information that

shareholders want. there are very much two sides of the debate on the jobs issue. for the week, we've done very well here. spain's up 4%. hong kong. we've got a nice run this week as europe has calmed down. this draghi has emerged. now, things are quieter. >> the ring is tightening even further. 14 to 14.05, so real tight. not the huge pop we've seen with some of the other ipos that have come, but still. >> and remember, 16 to 20 was the price talk. >> although morning star said it's worth ten. we'll see. >> almost up 10% here at the opening. couldn't do much worse than this. 22%. i understand ron johnson is very much talking about the the store store in store concept about new businesses opening within the stores themselves. they want to have stores herb

essentially. they want a shopping experience, food courts. >> 14.05, 14.10 is the latest. >> interesting. there are some factions, fan bases who want to see the stock go to ten so it can be bought by someone closer to their interest, not just the glazers. meantime, check out the latest moves in energy and metals. sharon? >> we're looking at lower prices across the board for oil and many of the metals as well. we had the trade down from china that was a lot weaker than expected and the fact we're looking at a lackluster picture here for china's exports overall, that is weighing on markets as well as the fact that specifically looking at china's oil imports. they are down to the lowest level in about nine months in the past month. we're also looking at what is happening in terms of the copper market because that's where the global growth story is and that seems to be where the biggest percentage of losses are today in the metals market.

separately, talk king about oil demand, the international energy agency has lowered its outlook for demand growth 2012 and 2013. this is on the heels of opec saying its own demand growth forecast maybe to be lowered by 20% next year due to the weak economic outlook. we're also looking at the spread between brent. there's a lot of chatter now. a lot of chatter earlier in the year about the impact that had on the wti price. now, the chatter is is about the north sea production and how that's been hampered and whether that is affecting the brent crude price to the point it's not a great global gauge at the the moment either. natural gas, definitely the biggest mover. a lot of volatility in natural gas. you saw that big spike. bullish and much more bullish than expected, but didn't really

last above the $3 mark and now, we're seeing a sell off as we close below 2.88, traders tell me we could see a wash out to 225. back to you. >> thank you very much. still waiting for man u. to start trading. we're going to talk to the ceo as soon as it does. you can barely move in here. before we go to break, look at this morning's early movers. okay, here's the plan. you have a plan? first we're gonna check our bags for free, thanks to our explorer card. then, the united club. my mother was so wrong about you. next, we get priority boarding on our flight i booked with miles. manchester united, i

believe, did open for break. 14.05. the good news, it opened below price it was priced at. 14.05. that's what happened and they want o a positive open. of course, price talk $16 to $20. they did get it open and a big cheer go up. you see a lot of people wearing jerseys. a lot of people came down to spend the day. you can see their families and others standing around. there's david gill, the ceo. >> there was a real desire to get this thing opened when it was close to the deal price. >> when that happens, you want to open it quickly because you want to eliminate any possibility it will ever open below the deal price. you want that first one above what the price was. 14.05, now trading at 14.o9. >> back to you.

>> of course, our question today is related to man u. one of the most popular soccer clubs heads to wall street today in search of fans and investors. so our question is what is something you're passionate about, but would never buy stock in? ken writes, my keurig machine. shares, no thanks. i would not buy stocks in the hot dog stand business. and peter writes airlines. you have to be nuts to invest a dollar in them, but i love landing at newark. finally fred writes, well, i've heard some people enjoy concern corn, corn, but i would never invest in friend finder networks. a lot of times with sports, it's more about winning trophies than having a share price that goes up. >> no, they haven't. i think the hope is that you get your fan base to become your shareholder base, but that doesn't always work out well either and fan base certainly i think carl, feels much better

when your team wins. >> bob and melissa, you're going to come back to the set, yeah? >> i'm looking at her right over there. there she is. >> i'm over here, carl, actually. >> it was a crazy crowd there, but you can hear the people. there was a real push to get that thing open. just so that it would not open below the offer price. big crowd there still, so it will be interesting to see. we've seen it test, here we are, 14. we're seeing it test the open. yeah. the opening price here. >> all right. we look forward to talking to the ceo once he makes his way over to post nine. "squawk on the street" back after a break. se to do.

sometimes investing opportunities are hard to spot. you have to dig a little. fidelity's etf market tracker shows you the big picture on how different asset classes are performing, and it lets you go in for a closer look at areas within a class or sector that may be bucking a larger trend. i'm stephen hett of fidelity investments. the etf market tracker is one more innovative reason serious investors are choosing fidelity. get 200 free trades today and explore your next investing idea. it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology.

we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.

checking on shares of man u., 14 unchanged here. you see it just floating around there, but this is one that priced below the range. below the the expected offering range at 14, but so far, in terms of an ipo going public on the first day, a success

considering it opened above and is holding firm. >> david gill joins us first on cnbc here at post nine. congratulations. welcome. >> thank you very much. >> you've lit up the room in ways few companies do, so congratulations for that as well. does it feel like a long road here? there was a chapter where it look like you might list in asia, that didn't happen. now this coming in at the price last night. what does that say to you about demand for the name? >> you're right, we did look at other market, determining that new york was the right exchange to list off. the sports business model i think is understood in the u.s. the strength and demand for the shares is very apparent. we're looking forward to a wonderful association with the new york stock exchange. >> why would you say in terms of the demand is strong considering you had price below and cut the number of shares offered. >> lot of demand.

we looked at it and we wanted to have long-term holders. we were pleased at that level and determined that was the appropriate sort of way to go. it's important to note we still at that level, camp is roughly $2.3 billion. biggest sports business in the world and so that's what we did. >> do you think it's right for $2.3 billion company to be exempt from filing quarterly reports? you went from a company under the the jobs act which does not require companies to file as much financial information as others. >> it does, but we will be filing quarterly accounts. we had that question, we got great partners in the states from sort of nike to chevrolet and got great aspirations here as soccer or football grows. we're looking forward to those associations continuing.

>> what's the growth construct here. some would say you've sold a small part of this company, it's still controlled by the glazers and it's a deleveraging exercise. using the proceeds from some of the proceeds to pay back debt. what's in it for me as the shareholder? >> you'd be sort of flying into one of the world's most iconic brands. i know the olympics are on at the moment, but football is the biggest sport and we can demonstrate it across all our revenue streams, great growth opportunities. we've announced a deal with chevrolet, which kicks in this 2014. a major deal for us. similarly, a big deal with nike and then our broadcasting site, the value. i think you've seen that in the u.s. at the moment with the nfl. premier league, the champions league. those sort of top line levels. i think football can show

extreme sort of -- if we look at premier league rights, they're up by 70%. we've announced a major deal with chevrolet. 45 to 50, sterling, not dollars. i don't know how you define it. i think what we can show, we've clearly showed on the road in the last two weeks to potentially invest. we are very much a great story. in our current economic climate we face, i think it's a very positive thing and people have bought into it. >> what do you suggest that football has truly cracked the north american market and i know soccer fans will crucify me for saying it hasn't already, but is this the year? is it a five-year phenomenon? >> i think what we're finding is that what the mls are doing, i think they invest in the soccer in the u.s. is continuing.

the soccer specific stadium. the following for the game. the u.s. women's team won the world cup yesterday. so the olympics yesterday, which was great. i think it's a gradual process and speaking of the mls, they've got great plans and if you build rom the bottom up, it will become a major sport. clearly, nfl, the mlb and those will be the main ones, but room enough to be a very important sport. >> for a sports franchise, obviously, players make a huge difference and recently, there's been this chatter about robin van persie and whether or not there was a deal and usain bolt trying out. conspiracy theorists would say this is floating around before ipo. >> robin van persie, we are interested in acquiring him. we wouldn't do that just for that. i think the the important thing

about manchester united is we understand football is the key and what we do there is very important. we're aiming to bring some players in between now and the end of august. whether it happens, we have to wait and see. it trades that interest and sort of dialogue and we're not surprised those stories are put out, but i know it's not true. >> a lot of critics back home for you argue that the debt load has been so onerous you've had to keep ticket prices elevated. will there be relief on that front now that this is taking place? >> we have kept prices up for the last couple of years. we're conscious of that. demand far exceeds supply for tickets at old trafford. we have general admission prices, then executive fan base and they pay a sensible amount. what we're doing today is for the long-term of the club.

>> what is the fastest growth market for you right now around the world? >> it's interesting. about 659 billion fans. that's free -- setting up at agent with people with local language skills and understand the culture, so we think they're global. we're very excited about the opportunity in america. we've got great partners here and are looking forward to developing the business over there. >> there's been some controversy of late that some of the debt may not be, some of the proceeds, excuse me, may not be used towards paying down debt. in fact, there was a protest from the manchester united supporters trust. what percent is going to be used for that? >> 14 versus $16. roughly 65 to 60 million will come off that level. it's important to know that even at that level, we were comfortable they weren't infren

nlg on what we were doing. we're investing in training facilities, et cetera. the owners have been there for seven years and this is an opportunity to realize capital, so as i say, as a management team, we're very comfortable with the level of debt. we haven't particularly given the growth opportunities we've explained previously. >> sometimes, they use an ipo not to sell and to the future. have the glazers, are there any disclosures you can tell us about in terms of their plans to sell further? >> that's a private family matter. they're locked in for 180 days under the deal. we don't know that. my job is to run the globe. we're doing a good job. great opportunities and we'll see what happens out of that with the results. >> finally, it's a great day. it would be a great day to say we're going to spend money on talent and to guarantee a champi

championship this year. can you do that? >> we're looking about a challenge, but we'll never be arrogant enough to say we're going to win the championship. we'll have a great season. the team are really looking forward to it. that's the excitement of football. we don't know what's going to happen. that's why people want to be associated with this great sport. we're delighted to be here today and thank you for your time. >> thank you very much. the ceo of manchester united. >> all right. well, from that, of course, and by the way, already traded 12 million shares. a couple of things, want to follow up to that story we brought you at the top of the 9:00 hour on facebook. meeting's not just today. by the cfo. but in fact, part of a larger effort by the company that will go on over the next several weeks led by the cfo to try to generate real interest among institutions that are not invested. perhaps looked at the stock at 38 or above and decided not to be, but might be inticed at 21.

the hope is that the beginning of these investment meetings today will start to answer some questions that at least some of the investors i've spoken to don't feel were adequately answered in the past. but this is part of a concerted effort by the company since going public to really connect or connect with investors out there and demand given what is a large overhanging stock that may come to market. as many as 200 million shares on the 19th of august. over a billion shares by the end of the year. talking about shares, i did want to note the latest notes from trend tabs because they are interesting. outflows from equity and mutual funds. this trend we have seen forever continues. one chart tells the story. take a look. it is bond funds versus domestic stock funds versus international stock funds and there it is. it continues in fact, 5.7

billion came from u.s. equity funds last of the week ended august 1st and the outflow of 1.2 billion funds, the biggest since the week ended january 4th. the big trend continues. even though we got a nice rally. once those outflows hit. >> yeah. sort of keeps the volume where we are. expectations of news. as cashin said, we'll tiptoe into the weekend. when we come back, two very different retail stories. invest and a turn around there will p put your money in a high-end name like nordstrom. . . and i'm here to tell homeowners that are 62 and older about a great way to live a better retirement. it's called a reverse mortgage. [ male announcer ] call right now to receive your free dvd and booklet with no obligation. it answers questions like

how a reverse mortgage works, how much you qualify for, the ways to receive your money, and more. plus, when you call now, you'll get this magnifier with l.e.d. light absolutely free. when you call the experts at one reverse mortgage today, you'll learn the benefits of a government-insured reverse mortgage. it will eliminate your monthly mortgage payments and give you tax-free cash from the equity in your home. and here's the best part -- you still own your home. take control of your retirement today. ♪ ♪

humans -- sometimes life trips us up. and sometimes, we trip ourselves up, but that's okay. at liberty mutual insurance we can "untrip" you as you go through your life with personalized policies and discounts when you need them most. just call... and speak with a licensed representative about saving on your policy when you get married, move into a new house... [crash!] or add a car to your policy. don't forget to ask about saving up to 10% when you combine your auto and home insurance with liberty mutual. security, coverage, and savings.

all the things humans need to make our beautifully imperfect world a little less imperfect. call... and lock in your rate for 12 months. liberty mutual insurance. responsibility. what's your policy? we start with a big earnings story. the stock sees a dramatic revers reversal. we'll talk the latest comments

and see if ron johnson is anywhere near turning that struggling retailer around. >> nordstrom reporting earnings falling 11% related to e commerce. >> and as you probably saw, m manchester united opening for trade. what's the inside story behind the owners? got a sneak peak look at their life you will not want to miss. but of course, it is the big ipo. bob pisani is on the floor talking to somebody. >> so, we open. important thing is, 16.6 million shares at $14. the price range so far, 14 to $14.20. two things that are important to note about this sport. we're now hitting 14 million shares changing hands. why is that important? because 16.6 million is what was sold to the public. essentially, the the entire amount sold to the public has turned over in the first half

hour of trading. number two, this is a classic syndicate bid. what's that? it means the the book runner, jefferies, credit swuisse, some of the others are supporting at 14. i understand there was a 2.5 million share bid at 14. right now, we don't know what will happen. but obviously, it's being supported right now. what do you get? an iconic brand. arguably, the most popular sports business in the world. a valuable sports transmission rights. what's the downside? i think david pointed out the correct downside. this is a deleveraging story and investors have not taken kindly to that. the other biggest problem is the sheer weight of sports history. this has not been a good stock investment. sports franchise investing in general. the real value of these teams come when the owner actually sells them and that is not x completely happening right now.

14.025. actually getting sub penny quoting coming up here. again, just past the volume. the entire amount has already turned over. >> thank you. jcpenny trading back from the green after another decline. courtney reagan is rounding up the numbers for us. >> well, the it's second quarter in the transformation and ron johnson said it would be one tough year. today's stock movement is decidely more positive. now x for the quarter, they report a loss of 37 cents items larger than expected. revenue also fell short. same store sales, that key metric for retailers, fell 21.7%. traffic down 12%. last quarter, jcpenny dropped its full year gap earnings guidance. now, vacating for the year, but intended to return to growth in 2013. no specific numbers were given.

financials tell a story of consumer behavior. jcpenny's march inis up stharply, but with heavy markdowns, clearance items are up to 17% of sales from 15%. that current customer wants her sale. in today's earnings presentation, johnson explained in june, he made the decision to go dark with the marketing. he and ceo say it adversely impacted overall sales. >> we're quoing to do a lot to communicate this pricing message. i'm confident into next year everyone will understand we have great every day value, they trust the value and find it to be a different way to shop. >> he divulged details of the town square, noting it will be a seasonal experience offering

visits with santa and even yoga classes. back to you. >> thanks so much. >> want to get more insight on the numbers. chuck grom has a neutral rating. unless that's changed today. >> no, it hasn't changed yet. just getting back from a meeting, so not changed yet. >> your reflections on the call and the middle of the morning. >> yeah, i think you look at the numbers for the first plus, obviously, pretty bad numbers in the second quarter. the tone of the meeting was you know, somewhere to the tone back in january where they did a good job explaining the store on the street and what they're going to be doing. they also addressed liquidity issues that had come about and i think the biggest thing is, i

think they took off the risk of sales being lower than what they've done so far year to date and up 20% in the back half of the year, which isn't very good. but if you're short and there's a lot of people that are short, i'm not sure the real negative paddle over the next quarter, so i think there's a lot of stock that you talked about. >> yeah, are you convinced that comps have bottomed for the year? >> no, i'm not. i think as you get into next couple of quarters, typically, the most promotional time of the year, i think where penny's could be exposed from the likes of walmart or those that have gained share. there's going to be a lot of remols, so i'm not convinced that you know, down 20 is the floor. but i think for the most part, you know, i think people are a little bit more encouraged in terms of what they saw on traffic trends, which is why i think the stock has kind of

downsized here so far. zpl chuck, they've lost a lot of share during this transition period. how quickly if at all can they regain that share if they are able to you know, gain some traction on store within store and new pricing model. >> that's the million dollar question. how quickly can comps bounce back in 2013 starting in february? and that's really going to be the big unknown. they've lost so much share and even if you have comps of 5% next year, they're still not as a level they were in 2011. but i have to admit, the store within store concepts, if you look at other retailers have been successful. the prospects can be good. >> you just hit the nail on the head though. you said the store within store concept. they're not really doing anything new. just looking like other retailers at this point and is that going to be enough to turp

thin turn things around? >> i think they need to really regain their customer and there's still a lot of retailers who have tried to go from certain pricing strategies to others and during that transition, they lose that customer, so it could be impairtive that they keep their core customer in the store and if they do, it's going to be difficult. you can look at talbot a few years back. they changed their stripes and wound up seeing a pretty big -- over the past few years. i think that's the risk. can they keep their core customer? so far, i think the jury's still out. >> chuck, does anyone need to worry about cash? i mean, is the figure they gave today reassuring or not? >> frankly, it's the number we had already modelled. we didn't think even if comps were down 15 to 20% they would run into a liquidity issue.

if comps are still down 5 to 10% next year, then they'll need to dip into the revolver and that starts to raise liquidity issues. by cutting the dividend, that helps solidify. 500 million bucks or so in cash and therefore, have a better cash position to end the quarter. >> all right, so the neutral rating remains at 18 price target remains as well. chuck, thanks for coming to the phone today on a busy morning. >> now, let's hit nordstrom. the company raising its full year outlook also boosting its same store outlook. let's bring in ed, a key bank capital markets retail analyst. great to have you with us. >> hi. how are you this morning? >> great. so they actually raised their forecast. was this what you had expected, that they would have enough visibility to say we're raising? >> well, they went through one

of the most important periods of the year, the anniversary sail sale. that gave them enough confidence. >> when you read through nordstroms' numbers, what sort of lessons do you learn? for instance, they said their top performing categories were handbags, women's shoes and cosmetics and that the south and midwest were the top performing regions. what other retailers show up as maybe seeing strength because of this? >> the accessory trend continues to remain strong. one of the names we like, coach, while there are some concerns about weakness at outlet, we think will continue to take decent market share. when you look at some of the reasons nordstrom has been successful,s it's been the non coastal area. that can lead to some strength there as well. >> you mentioned coach and the weakness they saw in the quarter in their outlet store. for nordstrom, rack was actually

a bright spot. rack sales were up 19%. same store sales at rack were up. much stronger than the overall store. is there a disconnect? is it just that rack which is a superior outlet offering? >> i think one important thing with rack is it focuses on strip centers. you might see a best buy, a walmart and they are less focused. they make share shopping convenient versus coach, which is more of destination shopping. >> margins in the back half of the year, up or down? >> we think they'll be up. they've got a will the of momentum. we've seen nice margin growth in the back half of the year. >> in terms of the revenue mix and i'm curious because they are increasing their plans to open rack stores in 2013. they're going to 24 new stores. what do you see as nordstrom being the shift in revenues?

do you anticipate a time as being a bigger driver? >> we think the full price store, but clearly, rack is going to grow in terms of importance. quite frankly, there are fewer and fewer places to open some of those nordstrom boxes. >> thanks for your time. >> good morning, mary. >> taking a look at shares of monster beverage under pressure after an unnamed attorney general is looking its into margin of its flag ship brand. shares down 8.22%. the company saying the probe is still in the early stages, but any relief sought by regulators could be proof to the company. back to you. >> story that was broke last night. interesting. when we come back, team usa racking up those gold medal wins from soccer to water polo and wait until you see the medal breakdown of the u.s. women versus men. all the highlights after this

short break.

one of the last days we're going to get shots like that. day 14 and no shortage of dramatic moments. we have the latest on soccer,

water polo and carly lloyd. >> oh, yeah. it's been so great, carl. let's first give you the medal count. u.s. still number one both in total and number of golds, followed by china. great britain third when it comes to gold, but still behind in total medal count, but not by much. three more and they'll be in third place. the big event last night, usain bolt becomes the first man in history to win gold in the 100 and 200 meter in back-to-back olympics. watch as he and his teammates turn this corner. an all-jamaica sweep. as bolt crossed the finish line, he put his fingers to his lips and after the press conference, he told everyone it was to silence his critics. he says you can all stop talking now because i am the greatest in the world. he did it in 19.32 seconds. when he finished the post race news conference, he said quote,

i am a living legend. bask in my glory and if you don't print that in your papers, i won't talk to you anymore and then did a bunch of push-ups. i know when i say these words out loud, it's a real huge egoand he dus, but it's so funny and cheeky about it. he's really a total showman. also in track and field last night, u.s. men brought home the gold and silver in the decathlon. long dominated by americans. still very famous bruce jenner and jim thor. women's soccer. such a huge night for them. the u.s. team vindicating themselves of the gold medal win against japan after losing to them last year's world championship. nike has given them all new shirts that say greatness has been found. by the way, the women's some soccer team has huge financial incentives to winning. the u.s. soccer federation gives

them 1.5 million on top of the bonus all the gold winning athletes receive. women's boxing. taking home gold against her 33-year-old russian opponent. this is the first time women's boxing makes it into the olympics and i have to tell you, it was a big thumb's up. the u.s. women also taking home gold in water polo. this has been the olympics for the women. on the u.s. team, women have brought home double the number of golds as their male teammates. 26 for the women versus 13 for the men. they far outstrip the total medal count. now, tonight, huge event. the u.s. women compete in the 100 meter relay. they nearly broke the world record last night in the preliminary. they were flawless. they are hoping to break the record tonight, which is held by a country that doesn't even exist anymore, really.

east germany set it in 1985. two years before ronald reagan said, mr. tear down this wall. it's been great, carl. aren't you sad you didn't stay? >> i wish i were there. something about the relays too. it's like four times as exciting. so, when do you come home? >> there's drama when they hand it over, too. >> are you going to work through the weekend? see gorge michael at closing ceremony? what's your plan? >> i have plans. i fly home on monday. >> can't really talk about it? >> i'll be at some events, make, you know. >> that's enough. michelle, thanks so much. what a fun week talking to you from london. we'll see you back home. michelle caruso-cabrera in london. while in london, we brought you the story of a haitian triple jumper. the former roommate of mark

zuckerberg. he made it to the finals. competed on thursday. unfortunately, did not medal. missed it by 12 competitors. next up for him, he has a law degree from georgetown and an offer on the table from a large new york firm. our thoughts are with him. all the best, just to make it to these games, it's unbelievable. as one said the other day, it's one of the few things where you can be 12 best in the population of 6 billion and people think you're not that great. that's competition. sports. coming up next, they are one of the most powerful families in sports. we're taking a look at the glazers, owners of manchester united. back after a quick break. it's something you're born with. and inspires the things you choose to do.

you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.

we are still in the red, but we have managed to pare our losses. that happened on the nasdaq. we are seeing apple struggling to go into the green. it is in the green at this point and intel had been in the green as well. so there's a will the of stocks trying to turn it around. take a look at shares of manchester united.

has broken the offer price of 14. 14 was the lowest price on the day. 14.20, the heist price on the day. this is worth noting. fully, it's entire quote has changed hands in the first half hour of trading. 17.3 million shares have changed hands. 16.7 were offered, so in terms of landing in the hands of a strong investors, well, seems to be a lot of flipping going on. >> some may still be the original shareholders, i guess the idea is you sell to institutions and they sell to the fans who perhaps will be longer term shareholders. >> tried to press david gill on the plans to sell, not my job. my job is to run the club. he says. >> this is an opportunity for them over time. now, they have a public arena in which to sell shares. >> let's get more on the glazers. the powerful family behind this sports team. robert frank with an inside look

at the dplglazers. >> from the moment they bought manchester united, they have been one of the most unpopular men and families in british sport. the reason can be summed up in one word. debt. let's look at this family. the man we know as red beard started in the 1980s building a mountain, an empire from the mountain of debt. he started with junk bonds and used leverage to expand in everything from trailer parks, local tv stations. he moved on in 1995. buying the buccaneers for 192 million. that was the largest amount paid at that time for an nfl team. he used taxpayer money, more than $200 million to build that stadium. the team is worth more than $1.5. the biggest deal, around 1.5, the loan from that deal however

saddled the team with more than $600 million in debt. now, man u.'s fans say that debt has forced up ticket prices and threatened old british institutions. now, man u. has been winning. the family has p put a lot of money into the team, but they may just have a pr problem. he is fiercely private. never granted interviewed. the family rarely attends games. malcolm suffered a stroke in 2006. the three guys have really become the face of the company. they say the team is truong stronger than ever and that revenue and profits are growing rapidly. half of these proceeds are around $100 million are going to pay down the debt. has given more fuel to critics who say the glazers are better at extracting wealth rather than

growing. >> wow. thanks so much for that. >> thank you. back to mary thompson with the market. . >> this is the maker of storage drives, up 28%. the reason the company is forecasting strong revenue growth between 45 and 50% next year because of strong demand. volume is heavy. more than four times its daily average rate at 9 million shares. back to you. >> thank you so much. want to take a look at rim this morning. up 4%. i think it was up a little bit more than that earlier today as the rumors continue to swirl around. earlier, it was regarding samsung's interest. today, it's about ibm reportedly taking interest in the enterprise services area, which one of the former cofounders wanted to break apart. >> again, this is, we don't, we're telling you this because it is moving the stock, not necessarily because it is anything beyond a rumor, so.

>> straight ahead, drought worse than ever. one of those farmers is going to join us and tell us how he's dealing with this historic weather pattern. plus, the ipo, a warning sign for food stocks with commodity prices on the rise. we'll see if we can find the value in the value meal after the break. ttd#: 1-800-345-2550 ttd#: 1-800-345-2550 let's talk about market volatility. ttd#: 1-800-345-2550 in times like these, it can be tough to know which ttd#: 1-800-345-2550 way the wind is blowing. ttd#: 1-800-345-2550 at charles schwab, we're ready with objective insights about ttd#: 1-800-345-2550 the present market and economic conditions. ttd#: 1-800-345-2550 and can help turn those insights into ttd#: 1-800-345-2550 a plan of action that's right for you. ttd#: 1-800-345-2550 so don't let the current situation take you off course. ttd#: 1-800-345-2550 talk to chuck. ttd#: 1-800-345-2550

this morning's drought reports gives us a look at what the report will be. >> melissa, i want to put this in perspective for you. just how quickly things have turned down. in june, the usda predicted 14.8 billion bushels, now, it's saying 10.8 billion. in june, it predicted 166. that's down to 123. the lowest yield since bill clinton's first term and the number one song was julio's gangster's paradise and pricing, now they've got it up to 7.50 to

8.90. they're not talking about corn on the cob or sweet corn. that's actually holding up better. this feeds hogs, chicken and cattle. hogs and chicken don't have a will the of choices. cow ranchers have other choices and just because this video is so pretty, i'm showing it again. i wish i was there. but crosby says even his alternatives for feed are expensive. >> we don't have much hay. we don't have much corn. we don't have much of really anything. over half of the pastures in the united states are rated poor to very poor in condition. >> now, the new numbers are probably not dire enough to put enough pressure on the epa to lower that ethanol mandate. they say they expect 400 million fewer bushels of corn to go to ethanol. quickly though as you see what's happening with corn, the biggest mover is soybeans. november soybeans way up as the

usda slashed production by about 30%. there was some hope that soyb n soybeans might be okay if we got more rain. guess not. >> thank you so much, jane. tough story. as jane just mentioned, the severe drought having a big impact on the cattle industry. want to talk you to strong city, kansas, where we're joined by guy picker, owner and operator of picker ranches. thanks for being with us today. good morning to you. >> good morning to you. thank you for having me. >> i assume you heard jane talking about the crop report, but can you walk us through what's happened to your own costs over the past few months? and walk us there it is you buy, this protein pellet. >> state of kansas is in a severe drought. we're probably 88% in

exceptional, extreme drought and about 17% in a absolute disaster. so, our -- >> one of the challenges of getting a tv signal in certain parts of the country where there's no direct fiber line. we'll see if we can get him back. the networks of nbc will host live cross platform coverage of the drought on wednesday, an unprecedents team event. the state's hardest hit, impact on food and commodity prices and the long range forecast is coming up wednesday on cnbc and the networks. can't even get forward contracts because the suppliers are just not going there and planning for next year, almost impossible because a lot of this is just getting through the rest of this year. they had finally gotten some rain in the last few days, but much too late. >> i thought it an interesting

point jane made as well. cows don't typically eat corn, but the hay as well is not available in part because of the same reasons the corn isn't. >> and in terms of a longer term impact, you've got to wonder about spending on next year when it comes to equipment, farm equipment, there are a lot of analysts who think that because of the tough season farmers are having, they're going to be con serving, so even though they see high prices, right, they're not going to be spending. they're going to pull that in and not be spending on the new tractor. all right. one of the sectors being left in the dust here from the scorching weather are the restaurant stocks. carls jr. pulled out today so where can investors find value in nicole miller is a senior analyst on the news line as david palmer, senior analyst at u b ubs. when you think about quick serve restaurants, you think about mcdonald's and the quarter they

put up was not necessarily a good one. does that mean things are bad across the industry? >> the answer is yes. mcdonald's is definitely a leading indicator. that was more of a top line pressure which we think they lost some share. to the child awareness of burger king especially on the east coast with their new menu platforms. that being said, commodities are up across the board. it's not good for anybody. >> david, what's your take on the commodity impact? im sure some chains will feel it more than others just because of the success they may have with hedging. which are most exposed? have have little exposure? >> cost pressure for these companies is going to get much worse in the second half of calendar 13, which is pretty far away. the interesting thing is that p input costs will be less of a

pressure over the next three or four quarters partly because it's more expensive to keep the cattle around. because it's more expensive to feed them. they'll be killing them in greater numbers. which actually will be causing things like hamburger costs to be coming down in the near term, so you'll see some for instance, brinker, that just gave the guidance yesterday, for fiscal 13, which ends in june, they're going to have pretty benign costs. really going to have to think further out to get more worried about these costs. for the fast food guys, they tend to do well during inflation. they have franchise businesses. they're global. they'll do, they'll probably end up doing better for a couple of reasons. the input costs coming down and the fact they tend to outperform when food costs are going up. >> but nicole, i'm trying to remember what the deal was with the recent quarter, but assuming costs do go up in the longer term, would you expect them to raise their prices and risk the

traffic or try to let margins compress a little and keep people in the store? what's the smarter choice? >> i think they're going to try to find the perfect balance, but investors need to look at those companies with brand equity, with an ability to license their brand and they're going to have more resiliency to input costs. the fact of the matter is those tied to any one basket item like a panera with wheat are more at risk versus a starbucks where coffee's going down or those that have really wide variety of baskets, items in their basket of goods sold. >> david, you had mentioned that at least for now, you know, a lot of the quick serve restaurants had been doing okay because prices are already until next year. at the same time, everybody's operating on this notion that you have to add value to the consumer. so, while prices remain lower,

it seems like their margins would be more challenged because they have to offer these more value oriented menu itemed like the dollar menu and in the long run, their margins will be challenged because prices will be going up. it seems like a no win situation over the next couple of years. >> you know, with regard to restaurants, they do operate at the lower end of the food cost range. even on a per serving basis. they're competitive with that meeting, so if food costs are going up more at an exaggerated clip, they're still locked in. you're going to see fast food start to gain share and that could help them at least deal with the inflation relatively well. casual dining tends to be more at risk because they have more expensive calories, over $10 per serving, so they have less pricing power and tend to own their restaurants.

so casual dining would be an area that would be more at risk than say fast food. >> thanks for your time. >> got breaking news here this morning. kay? >> thanks so much, carl. there was some headlines out about b of a, which has been in talks for several months to sell their business to julius bear and those are close. they have a deal in principle, just in the process of papering in. we may see an announcement of a deal as early as monday. the terms are are on the high side. i am told it will be between a billion dollars and about a billion and a half dollars. essenti essentially, what he's getting for this could be transformtive. they're getting about 80 to $90 billion in aum and the real strength in this business lies in the southern cone of latin america as well as asia,

particularly places like hong kong and singapore. they will keep its united states wealth management business as well as its japanese wealth management business and there are folks who focus on offshore clients and will remain in the fold as well, but this is part of an effort for them to invest itself of noncore assets. more details as i get them. >> tcw yesterday, this today. you've got to watch this space. thanks a lot. when we come back, we're going to sit down with one of london 2012 team usa sponsors. the company expecting sales of more than a billion. en mariel zs first took up fencing, the u.s. hadn't won gold in over 100 years. but thanks to them... and her... and especially this guy, all those years were just a prologue to this.

♪ it's amazing how far you can go with a little help along the way. td ameritrade. proud sponsor of the 2012 u.s. olympic team. we asked total strangers to watch it for us. thank you so much, i appreciate it, i'll be right back. they didn't take a dime. how much in fees does your bank take to watch your money ? if your bank takes more money than a stranger, you need an ally. ally bank. no nonsense. just people sense.

you want to save money on car insurance? no problem. you want to save money on rv insurance? no problem. you want to save money on motorcycle insurance? no problem. you want to find a place to park all these things? fuggedaboud it. this is new york. hey little guy, wake up! aw, come off it mate! geico. saving people money on more than just car insurance.

it has not dropped below the $14 ipo price. want to bring in the chief operating officer for the nyse on a day when the marketing department outdid themselves. we haven't seen that before and is that a sign of things to come? >> i think there is room for creativity even in promotion and the it's great activity in the front of the exchange and even here with the astro turf. >> the way it's priced and the way it's traded since. is that a sign of efficiency? discipline? what does it say to you? >> well, certainly, it looks like it was priced right, but also, i think the opening looked good in that we've got volume and it's traded in line. we didn't see it trading up from there. >> when judging an ipo and whether or not it is successful, is it the fact it hasn't broke below 14, is that a success? total growth has already changed

hands in the first 40 minutes of trading, is that a good or a bad thing? >> i think not breaking prices is critical in a lot of ways. i mean, that says to the people who bought the deal, you didn't make a mistake or there isn't a lot of nervousness about the deal. it has helped in there pretty well despite a lot of volume, there's a lot of turnover. it is a big name deal. and so you're seeing a lot of people trading that may not be trading these often. >> for the average retail investor, what they may not realize, you say it hasn't broken below 14 and that's a good sign, but behind the curtain, there could be institutions supporting this price. >> absolutely cht what people get on the beginning of the deal is just a small piece of what they want to do in the aftermarket and what people price the deals for is that there will be a significant demand. that's really the art of pricing the deal. >> have you felt more pressure

since facebook to show your meddle, i guess, as an exchange? zpl i think there's always pressure on us. the fact your studio is in the middle of our trading floor, obviously a great thing, but also means if things go wrong, you're right there. we always feel that glare and the responsibility to the public market to do the right thing and in the right way. it's something we feel every day any way. >> why won't speculation about facebook coming here die? what would you say about that? is there any grain of truth to rumors that there's been even the slightest discussion? >> i think it won't die people people don't want it to die. people want these stories to live on. there's a lot of media paying attention to all of these stories now. they don't tend to die after one day anymore. there's a follow on, a follow on. look, it's going to pick up again at the lawsuits play out and other news hits the tape.

that's how stories play out. you guys see it more than anyone. >> how would you characterize the year given what you expect coming? >> i think that there have been causes in ipo. some is seasonal. we saw that in the summer. you would expect in the wake of a giant deal like facebook where people don't want to go in the wake of mary. you don't want to suck up the capital before or after the deal. we've had a pretty active year. 63 deals along raising $16 billion. we've got a very big backlog, over 100 deals so far. so i think as long as the market holds in, doesn't get really volatile, we're beginning to see an active deal cal der from here to the end of the year. >> do you feel like the deutsch

deal, better off it didn't happen? >> i think as an exchange, i don't think it's had an impact. clearly, management is more focused on our existing business rather than integrating a large merger. as soon as that was determined, we've got to get back to business, create value for our shareholders and show leadership. >> mentioned the public glare, just because our set is on the floor of the stock exchange, right next to us is the post of nat capital. what's your take on what has happened, regulators most certainly will be taking a look at the situation, trying to propose new regulations. what do you see as a best outcome of this? >> i think as the market relies more on computer, it is surprising that more errors don't happen. i think that we have a responsibility as players in the market to try to find ways where the market acts in a way that people feel has integrity, so

people feel they can trust their retirement dollars and i think you're going to see the round table has announced for september. there will be a lot of good abo market, i think the s.e.c. enacted the circuit breakers post flash crash. i think that helped. but i think we have a responsibility to continually ask ourselves are we doing the best possible job, are we acting in the most responsible way, and what do we collectively do as a industry, and particularly we as the new york stock exchange and we as exchanges do to show the market in the best possible way. >> you mention you're surprised that more glitches don't happen given the amount of computerized trading that goes on. it seems like we only hear about glitches here in the united states. is it just that we are more attuned to our own markets and that they actually happen to the order of magnitude that we've seen in terms of the flash crash and facebook around the world and we're not privy to it for some reason? >> it's a great question. i do think that first we have a

more complex market structure. we have more exchanges, we have more dark pools in not -- nothing about market structure in that sense but it is complicated and complexity leads to more technology issues. on the other hand, tokyo stock exchange had a problem with a network router earlier this week. >> ivex. >> had a problem. it does happen. what i will say is there is more media glare here than anywhere else. probably justifiably so. it's the largest market in the world. >> before we let you go, do you guys project out in terms of volume? do you see volume going lower the rest of the year, lower next year? >> well i guess that's the magic question, isn't it? i think we don't have a crystal ball with respect to volume. in my heart what i believe is that if people feel better about the economy, if people have more certainty around business climate, tax policy, political climate, more buying will return, as investors start to determine what is their outlook for the future. more uncertainty means less volume. and i think that we have seen that consistently.

>> continue to see those mutual funds. >> absolutely. >> every single month more or less with occasional blips. but otherwise -- >> larry, happy friday. go kick a soccer ball around. thanks very much. >> thank you, larry. >> larry leibowitz. >> we're sitting down for president and co-founder of one start-up strife which might become paypal's biggest threat. you won't want to miss what stripe's president has to say. that's straight ahead.

at sleep number, individualizing your sleep is at the heart of every innovation. wow. that feels really good! and now, sleep number introduces our new memory foam series-the only memory foam beds with exclusive dual-air technology that adjusts on each side. memory foam just found its better half. sleep number. enjoy introductory savings of $500 and two free coolfit pillows! plus, a special financing offer. final days! only at the sleep number store, where queen mattresses start at just $699.

welcome back to "squawk on the street." taking a look at shares of big lots. the discount retailer shares down about 4.6%. jpmorgan cutting it from underweight to mutual. the reason they're concerned about the company's clients who they say are stretched and also the firm's focus on consumables which jpmorgan says is going to be pressuring its top and bottom lines. shares down 4.6% off the lows of the day. cutting its price target to $34 from $41. coming back we'll be more with

"squawk on the street." choose t. you do what you do... because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.

friday morning. what do you say we do some squawk on the treat? imagi manchester united headed to wall street today.

we're asking what is something that you're passionate about that you would never buy stock in? sunny writes i like wrestling but i would never invest in world wrestling entertainment. and facebook. that is the snark. yeah. >> that's -- >> it's true. >> of course, facebook this morning hitting the street. >> they are. they are. stock is up 3%. going to be making the rounds. three meeting today from what i understand and part of a concerted effort now as we reported by the company to try to re-engage perhaps with the institutional investment community. sell themselves yet again in the face of, of course, a lot of shares, potentially coming to markup -- market, excuse me, as their lockups expire. >> they'd like them to come to markup. i mean, we just asked larry leibowitz of the nyse about the speculation between facebook, would they ever come to the big boards, i thought his response was pretty honest. it won't die. the speculation won't die

because the media doesn't want it to die. and it's going to continue to be reinvest itted as these lawsuits tomorrow to court. >> we did ask the question again. >> and morgan stanley is a part of these meetings that facebook is having. jpmorgan today, morgan stanley and other banks as well. >> good weekend, guys. >> see you next week. >> here's what you might have missed earlier on this morning. >> welcome to hour three of "squawk on the street." here's what's happening so far. >> certainly i think everyone on the open market commit would think the marginal benefits are diminishing significantly. what do they perceive as the marginal costs? what are the potential detriments? >> import prices down 0.6. that's actually, you know, we were looking for it to come back on the to the high side after a big oil move down last time. >> 22% decline in same store sales. >> versus -- >> we thought 19 was bad in q1.

>> it only got worse. >> the general theme has been you thought that was bad, it got worse. >> right. >> it's not uncommon to see those a certain extent. i mean, some companies are quite aggressive about meeting with institutions. however, facebook certainly has not been. >> the opening bell this morning. >> we clearly showed on the road in the last two weeks to potential investors is we are very much a story and as i say in a current economic climate we all face i think it's a very positive thing and people have bought into it. >> had a pretty active year. we've had 63 deals before this month on the nyse alone, raising $16 billion. we've got a very big backlog, over 100 deals with nyse named in the deal so far. i think as long as the market holds in, doesn't get volatile, we're going to see anctive deal calendar till the end of the year. >> live at post nine at the nyse, let's check on the markets

before we hit the weekend. the dow down some 20 points. s&p with what would essentially be its first decline, i think six sessions. hasn't had a full week, nonholiday week without a down day since last september. we'll see if we can turn that around. meantime, lloyd, you're in luck. th u.s. justice department saying it will not pursue criminal charges against goldman or its employees related to accusations the firm bet against the same subprime mortgage securities it was selling to clients. from banks to a big earnings story, shares of jcpenney seeing dramatic reversal after initially sliding over 7% this morning. retailer reporting q2 evgs that did miss the street's expectations. revenue down 23%. internet sales down 33%. road map for today looks like this. it's the public debut that's got the street all excited. manchester united below the range. with the fans cheering the debut, should investors also be cheering? with the dramatic reversal after this morning's conference call got under way what did ron

johnson say to move the stock and should investors start cutting him some slack? plus paypal, pay attention we've got stripe joining us live. could this new one-click payment system soon become paypal's biggest competition? we'll start with the ipo mania. bring back in bob pisani for the latest on manu. >> they are in heaven with the high frequency guys. here's manchester. prices at 14. opens at 1405. it's trading between 14 and 14.04 all throughout the morning. and we're almost hit 20 million shares. wait a minute, they priced 16.6 million which almost trade at 20 million. how did that happen? because it's a high frequency trader's dream. there's a syndicate bid at 14. they're supporting it at 14. so the guys who are high frequency traders know they can buy it at 14, 14.01 and sell it at 14.02 and they collect a rebate. if it goes below 14, it's not at least in the short term. it's very, very limited downside.

so you just keep doing this, turning it over time and time again this morning and that's how you get up to 20 million shares changing hands. bottom line, though, the company did make it public and you get the iconic brand. you've got one of the big sports franchises in the whole world. you've got the value of very high level sports transmission rights. the downside, and i think david made the key point this morning. it's a deleveraging story. that's not going over well with investors. and the historic experience with sports franchises, in terms of ownership of stock, has not been particularly good. that's because the big money in all these deals comes when the sports owners sell them to another owner, not when they sell them on the public through shares. but the bottom line is, we've got a real story going on with high frequency traders in manchester united this morning. >> talk about turnover. thanks so much, bob. the soccer club's ceo joining us this morning on post nine. here's what he had to say about their public debut. >> very pleased with the range of the institutional demand,

sort of at that level, and determined that was the appropriate sort of price to go in. i think to note, still at that level, market cap is roughly $2. billion. the biggest business in the world, and so that's what we did. we've been out on the road for two weeks and we're very comfortable with that level. >> so is a good team a good bet for investors? dennis berman is marketplace editor columnist with "the wall street journal" and michael zanian at forbes. happy friday. >> hey, carl. >> dennis, i'm almost afraid to ask what you think about this? because there are a few flags, right? historically, sports teams, the duel class structure. >> bob mentioned a number of them. i can't call this a great day for capitalism. i know there's a lot of fanfare down there at the new york stock exchange, and people are very excited. but this one, as david mentioned, it's a deleveraging story, and two, it's an enrichment plan for the glaser family who put the initial leverage on the compa in the first place. this is not a great day for capitalism. it's just money moving from one

pocket to the other. and in a lot of ways the public shareholders are kind of the dupes here. they have no real effective ownership control of the company. the glasers deleveraged, got the money and still have control. that's not a good deal. >> you want to root for a long position here somehow, right? i mean there is something in the global nature of the sport, or growth trajectories in asia that would argue that this might be a good bet? >> i think it would be in the next television deal if you were looking for a straw like that. they just reupped their international deal and it was about 80% higher than the last deal. they're going to get to redo that deal in three years. you probably see another significant increase. i think on the downside, this stock valued the company at a enterprise multiple of 16, which i think is rather rich. if you look at other global marketing and entertainment firms, whether it be google, apple, disney, they're all between 9 and 12. so it's a reach multiple on a global, really entertainment and

marketing company. >> sure. >> and carl i do think you raise a good point. everyone's so negative, there has to be a positive thing you can talk about. and we've seen across the board, be it in u.s. transmission rights or european transmission rights for the premiere league in the uk, we have seen some incredible numbers paid because cable operators want to keep live television in front of people's screens and keep people subscri subscribing. so there is the upside there. i just don't know if 16 multiple is relatively crazy for a company that really has no dividend, and the profitability, that's okay, but not substantial. >> yeah. and we should point out, too, they have some vocal critics who are not investors who would love to see the price go down do 10, make it affordable to another bidder. do you think they're long for public life? >> i do, because i think that the glaser family intends to own this team for awhile. they lik having their float. there could be a secondary offering. this was a very small offering

in terms of percentage of the company. there could be another one like this for the very same purposes, if you will. and i think that if you look at their recent marketing deals, the 500 million plus deal they just signed as a shirt sponsor with chevrolet for example. they have a great deal with nike, this shows that to a certain extent a lot of the big deals have already happened. so it's like, what's the next deal going to be? and for them to get and mix their tv money, don't forget, english soccer is capitalistic. the more you win the better you do, the more money you get. it's not like u.s. football where all the tv money is split evenly. you have to believe that this team is going to do well. and they have done well under the glasers. english premiership four times. the champions league once and been runner-up twice. that tv money from the champions league and from the tournaments is going to continue to grow. so if you believe they're going to win, it could give you a little bit of reason to invest. >> right. we tried to get gil to guarantee

a championship but they've got some money to spend. he said we would never be so arrogant as to do that. but clearly you've got to think they're going to be a little more confident, certainly if you're a player, you're going to ask for a little bit more. >> it really helps. arrogant to stage an ipo and even more arrogant to stage a secondary offering. the play for this stock in my mind is four, five years down the road, a sheikh from the gulf states wants to have fun with his buddy who owns manchester city, and can take them on. in my mind perhaps the best equivalent really isn't sports and entertainment but buying thoroughbreds, buying horses. it's a fun thing to play around with if you have the money to do it. that's the next play. >> although it does raise an interesting question, mike, i'd love to get your take on this, if, of all the franchises out there that are richly valued is there one most appropriate to go public? is it manu? is it the yankees? dream a little bit.

>> i think it's outside the u.s. we've seen in the u.s., for example, the packers, they sell stock but you can't even trade the stock. >> it's a novelty. >> it's a pure novelty. i think if you want it to be in europe in soccer, because you don't have the revenue sharing to the extent that you do with the u.s. team. and in the united states, if you're the yankees, for example, at arguably the second or third most valuable team in the world, i've got a share of 34% of my local revenues with the rest of major league baseball. so that's even worse than, you know, a situation like manu. so in the national football league i'm sharing everything equally. so there's less of a capitalistic incentive to make money in the u.s. >> but carl i'll give you a provocation here. what if the national foot ball league were to go public? there's little incentive right now for them to do so. but maybe there's a path for them to monetize things even beyond where they have. they've done such an incredible

job of squeezing the money out of the contracts. but that to me to be interesting and perhaps a much more sustainable business from a public market standpoint. an actual league that were to go public. >> i'd like to be here on the day that issue takes place. can you imagine manning, tebow, all on the floor. the turnover in shares that we saw on the facebook went public, today with manu, what does that say? what does that mean? >> well, bob really has some nice reporting on that. the underwriters have to keep their client happy. at least while they're on the floor of the stock exchange there. you have to think that before too long that stock's going to drop below $14. it was quite remarkable that they got it out at $14. high frequency traders we've seen them largely come back from the market. when there's something that's so ripe for the taking, an ipo where underwriters are giving their guaranteed support, how can they not play? >> you say it as we look at the chart of 14.01. up a penny.

>> i can't say it's a natural price. that's a bit of an artificial price. >> guys, thanks so much. >> thank you. >> dennis and mike. want to send it back to mary thompson for a market flash. >> samsung today, it's ibm. shares of rim, research in motion, up 4.5% on the report that ibm is reportedly looking at acquiring the company's enterprise business. this is a business that supports its iconic blackberry. so its shares responding to that up, 4.75%. i have to tell you as a crack berry addict myself i certainly hope someone buys that business. it's easier to type scripts on that. >> you know from experience. i know, mary. he we come back we'll take you back across the pond. sit down with one of the biggest sponsors of the olympics of team usa chobani yogurt. the founder and ceo will join us from london.

greek is going global. chobani is the official sponsor for the london games. michelle caruso-cabrera is in london with the ceo this morning. >> hey, there. so good to have him here. hamdi ulakaya is the ceo of chobani yogurt, carl. listen, normally i don't start with this softball windups but i want to tell people your story. your started a boutique yogurt

company in 2005. through a financial crisis you built it not into the number one greek yogurt in america, but the number one yogurt in america compared to market share with yoplait, dannon and colombo. you beat the big guys at their game. congratulations. >> thank you. >> you are a hero of capitalism. that being said, you're still relatively small, why spend precious marketing dollars sponsoring the u.s. olympic team? >> it's a perfect fit. we found out last year that most of the athletes were eating chobani, after workouts, on their training. so it's a perfect fit for the spokes people, for the athletes. so i told my marketing team what this is going to cost and if they would like -- >> what does it cost? >> well, i still don't know yet. i'll find out after i go back. but this has been amazing. not only the product, which is natural, full of protein, 16 grams protein per cup, tastes awesome, it's natural, but also

our story really fits with the olympic story. started with a small plan, closed plan after 90 years. start with five people from that 55 people, and we we started october 2007, and in five years we became number one brand. >> it's amazing. >> so it tells you that in america, still, if you work hard, if you believe in a small city, you can make it. >> this is a perfect segue to my next question which you is are an immigrant from turkey. i have traveled to greece many times in the last year. and it struck me when i was there, wow, the greek economy is such a mess that the greeks themselves cannot even control the world greek yogurt market. it took a turkish immigrant in the united states to make it this huge brand. so congratulations to you. but tell me, how important is it that a government not get in your way, not impose so many bureaucratic hurdles so that you

can grow. >> absolutely. and are we worried about that in america? >> one thing i would correct, michelle. the greek yogurt is called greek yogurt in america. in turkey we call it string yogu yogurt. look, you've got to leave people alone, let them do what they know the best. the government role is to make sure businesses or entrepreneurs, they can go further, and without any explanation. i don't believe in economy or business the government controls you, just help you, if there is anything. right now we are struggling and we need the federal government, the state to come together to make sure we have enough milk -- >> enough milk? >> absolutely. >> you're facing a milk shortage? why? >> chobani really pulled a lot of milk. it's the first time a product is cool. and we have 4 million pounds of milk every day.

and right now in new york state and that's why we're going to idaho >> where you're going to have another huge production plant the biggest in the country when it comes to yogurt. how many people you going to play there? >> we're starting 400. that's phase one. this plant is about 1 million square feet. we built it in the one year. and you know, we look forward to it. >> you mentioned the milk shortage. i assume that means much higher milk prices. what is that doing to input costs, commodity costs, et cetera in your margins? >> you know the sad part is everything else is happening, the farmers are struggling. this issue has been around for ray long, long time. we lost sight of manufacturing, and also the farmers. you know, it's an opportunity to tell you that we need to look into this and make sure the farmers can see not only one year but five years ahead of them so they can invest in their farms, buy new equipment and the kids, and we find out t kids really want to come back

and continue their family's legacy. but there is really a revolutionary solution needed for the farming industry. and that's what we see it. the milk, they all wanted to do it but who knows what's going to happen next year. right now the milk prices are very low. there's a drought in the summertime. but the yogurt, you know, what we believe, the pure, simple, nutritious yogurt, if we all make it we are just the beginning, there is so much to go. and iake sure that especially the yogurt, keep it simple, take stuff out of it, don't add it to make it pick, and americans are loving it. >> yeah, we are loving it. absolutely. mr. ulakaya thank you so much for joining us. you hope turkey wins it for 2020? >> i'll be shooting for it. >> all right, carl, back to you. >> great stuff, michelle. thank you so much, michelle caruso-cabrera in london. when we come back, video game sales calling for the eighth straight month in july. is the industry bank being on new equipment as the cure to its dismal sales?

at sleep number, individualizing your sleep is at the heart of every innovation. wow. that feels really good! and now, sleep number introduces our new memory foam series-the only memory foam beds with exclusive dual-air technology that adjusts on each side. memory foam just found its better half. sleep number. enjoy introductory savings of $500 and two free coolfit pillows! plus, a special financing offer. final days! only at the sleep number store, where queen mattresses start at just $699.

not every day they bring in the astroturf and the nets on the floor of the nyse. npd is out with july video sales data. julia boorstin joins us with the latest on that.

>> good morning, carl. well, july was yet another terrible month for retail video game sales. down 20%. and that's the eighth consecutive double digit drop, shifting to apps and ditch tal downloads. hit the cardest were consoles. down 32% as smart phones and tablets steal market shares while people wait for next generation xboxes and play stations. game sales were down 23%. these sales are just about half of the total consumers spend on games. npd estimates that digital formats, social, mobile games, downlloyds and add-on content like world of war craft, angry birds and farmville generated another $439 million in spending in july. now there is one bright spot, nintendo's handheld 3-ds grew sales. electronic arts are relying on digital. digital accounted for nearly

half of nongap revenue and about two-thirds of gap revenue. today that digital focus was problematic for activision. the battle dot net online gaming network had been hacked. there is a bigger problem for the whole industry. digital revenue from the likes of social mobile games isn't compensating for the physical game declines. zynga's performance has raised concerns that people are just simply resistant to pay to play for games like farmville. and when it does come to the physical games the big question we'll have to watch is whether a new round of consoles which will be due out in the next year or so can compete with the gaming device we all carry in our pockets, which is our phones. >> julia, i know you got some breaking news as well regarding an atreatment between the ftc and facebook, too, right? >> that's right. the ftc has settled with facebook over some concerns about their privacy settings.

it has accepted a final -- settlement with facebook resolving charges that facebook deceived consumers by telling them they could keep their information on facebook private and then allowing it to be shared. this settlement does require facebook to take steps to make sure it lives up to its promises, giving consumers clear notice about obtaining their information, and sharing that information. beyond their privacy settings. and also having a really comprehensive privacy program in place. now this final vote was approved. there were public comments on this. but this is a sign that facebook does take these things seriously. facebook has obviously taken a number of fremeasures protectin privacy and ftc will be endorsing these changes. >> we all know about the concerns over privacy when it comes to facebook. i thought this was interesting. part of the settlement, as you know, involves getting biennial privacy audits from an independent third party. >> yeah. i think that, you know, there are i couple of things here. obviously they need to have audits by a third party.

but it's also a lot about communication with users. facebook does have these privacy settings, but it's not clear people are really interacting with them, or people really know what their options are. so the idea of having a third party come in is a really a way to make sure that facebook is doing everything it can to communicate with users, to make sure users know what they're sharing, how they're sharing it, and that facebook isn't putting things up on its site and getting people to sign off and click yes without really knowing what that means. >> yeah. you just walked us through a lot of news. thank you so much, julia, julia boorstin out in los angeles. jcpenney missing the street's estimates but should investors cut ron johnson some slack? we'll talk about that. also the bell is about to sound in ump. we'll get their close for the week. people like options. when you take geico, you can call them anytime you feel like saving money. it don't matter, day or night. use your computer, your smartphone, your tablet, whatever. the point is, you have options.

oh, how convenient. hey. crab cakes, what are you looking at? geico. fifteen minutes could save you fifteen percent or more on car insurance. it's something you're born with. and inspires the things you choose to do. you do what you do... because it matters. at hp we don't just believe in the power of technology.

we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter.

all right let's get a look at how europe is going to close out their week. shares falling after a five-day winning streak, as this weak economic data out of china, which you may have seen regarding their exports way down. that pushed markets down. china's trade surplus narrowed sharply to about $25 billion in july compared with $35 billion forecasted. as we said, exports up just 1%. we were looking for an increase of about 8%. meantime, declines in bellwether swiss food group nestle weighing on the markets as well. nestle was the biggest drag on the market as the stock was cut to hold. barclays gaining after confirming that david walker will join as its new chairman after the libor scandal saw all

those senior departures. the china data showing its effect on the commodity space as well. a quick check-in with sharon epperson over at the nymex. >> has had a negative impact on oil prices and some metals prices as well. but the fact is that this is showing slower growth and of course a key consuming country for many commodities, and that is a big reason why we're seeing the down. oil reports were down to the lowest levels in about nine months acarding to the chinese data. the fact we're seeing the dollar weakening a bit has taken oil prices off the lows and in fact we've seen some of the metals turn positive like gold and silver. we're also looking, of course, at what is happening technically with the gold market and the fact that we're looking at gold that is above the 100-day moving average. traders are looking at 1640 as the key level on the upside that where gold prices must go to to get toward that 1700 level. but the commodity actually was the most momentum today, definitely momentum to the

downside, is natural gas. and in the last 24 hours, natural gas has fallen about 10%. we saw that big spike, 6% right after the eia storage data in yesterday's session. it was a bullish report but it really couldn't last through that $3 mark. now it's come down sharply. we're below 280 and there's some traders behind here that say if natural gas closes at these levels we could see natural gas prices fall toward the $2 level going into the fall. >> wow if only we had that kind of volatility in stocks, sharon. >> thanks so much. >> bob pisani is here on post nine. i've been told, for the week, dpau is in 120 point range. the narrowest range since 2010. >> but we're up and it's been a pretty good weak. up almost 1% in the s&p 500. sitting not far from 4.5-year highs. a dozen points maybe on the s&p 500. put the s&p up, there we are. yes, you could say we're sort of moving sideways here. but this is sideways in a very high level. the important thing is the whole global markets have calmed down,

really since mr. draghi spoke last week and there's been a re-evaluation up. spain's up nicely. most of europe is up. you can see brazil up which had a tough year, china. even germany is up fractionally. laggers like spain and brazil moving to the upside. you always want the laggers to be moving up, sign of a healthy market. here in the united states, again, better signs of a healthier market because laggers like materials and industrials have been doing better this week, and the dividend payers, your more defensive names, for example, your reits and utilities, they have been underperforming so again this is a good sign of sector rotation. most of this has occurred since last week, when mr. draghi was speaking. want to move on and talk about the ipo of the day because we're just hitting 20 million shares right now, and manchester united and i'm calling this a high frequency trader dream come true. why? because there is a syndicate bid. it's when all the syndicate

guys, get to the say price is $14, we don't want it to drop below 14 we're going to support it at 14, put bids in at 14 and everybody sees this on the street. so if you're a high frequency trader you can't lose money. you buy at 14. at 14:01, every time you might get a bit at 14 i buy. and i sell at 14:01, i make a penny and you collect rebates, at these different exchanges as well so almost can't lose any money. so over and over and over again, 14, buy. sell, 14:01. 14, buy! sell 14 point 01. how do you lose at this game and remember you're collecting rebates. that's why there's 20 million shares. they sold 16.6 million and already two hours later we sold 20 million. that's why. >> the surest bet we've seen in awhile. >> this is high frequency trading. >> how long does it last? >> we don't know what the syndicate bid is. we don't know the volume. earlier i understood it was a 2.5 million share bid at 14.

that means every time you get down there, they're bidding up to 2.5 million shares. if it goesver that we don't know if there will be more bids. they don't put out a press release on this. it's pretty obvious it's there and the street knows about it. >> talk about downside pro-section. what a day. the excitement over manu is be buying into the et. most valued sports franchise? ken perkins is an equity analyst over the morning star joins us this morning. good to see you this morning. >> thanks for having me. >> reading from your note, you think the brarnd image is important but the unpredictable nature of sports gives you less confidence that they'll consistently earn excess returns on capital. characterize the size of your concerns on that. >> you would think that manchester united, they have a long history. their team has done extraordinarily well. to their credit they've got a great growth story in terms of the revenue with the commercial contracts. but it was also the cost

component of the business is quite high, especially when you k-9 for the fact that they've got to purchase players and there are tons of other teams out there with a lot of money to spend. and in order to maintain a winning team and monetize the brand they're going to have to keep winning and we're just concerned that the cost going forward could continue to go up and weigh on the growth story. >> right. you say the mid point of the ipo range overstates the economic opportunity. are you saying 14 is overvalued? >> yeah we still come out with 10. our valuation is based on free cash flow basis. you still look at the multiples on the company, and it's just you're paying a lot of risk when you don't get a dividend, you have zero voting rights, essentially. you're paying quite a high price to take on a lot of risk, both 07 rationally and financially with the high debt load. >> then you've got the issue of potential secondaries down the road. who knows how much the blazers are going to sell.

is your ten valuation, would you characterize it as a price target? do you think that's where it's going to end up? and if so, when? >> i mean, it's more -- it's not necessarily a price target. although that's what we think that the company would be as a whole if you were to purchase into it today. i will say that in the near term obviously you'd expect supply and demand to be pushing the stock price one way or the other. but we think long-term that fundamentals will trump any of the short-term trading metrics that may be influencing the stock. and as the company continues to generate its results we think that the market will reflect that. >> right. and then, of course, people always talk about risks to your model, right? the risk here is that they actually do win. what happens if they do start to collect another uninterrupted string of championships? >> sure, i mean, i think that if they're able to do that, and they're able to monetize it, obviously, it would be worth in

the midpoint range. that's what we've done as a sensitivity analysis. when you're paying that price you're basically paying for a team that's going to continue winning year in, year out, without having to spend significant costs on players. and i think that the risk is to the downside when you buy shares in a company like that. again, they've got a great brand. they're able to monetize it hopefully with the gm deal and some of these other contracts. but it's the earnings growth side of the story that may be weighed upon. and it's how much are they going to have to spend in order to keep generating the growth that they are and generating a winning record. >> somebody said it's kind of a form of legalized gambling in that you are veryly betting on them to win and if they do win you might collect some money. ken, thanks so much for your time. >> sure. back to the big earnings story of the day. jcpenney missed estimates but the conference call began this morning at a dramatic reversal in the stock followed. so should investors cut ron johnson some slack?

herb greenberg has more on that. i saw you on twitter bright and early on a week where you've had a bunch of stories to watch. >> this has been quite a week in my world, as i would say. on twitter i was actually pointing out either this is the big, really big disaster story, or it's the ultimate value stock. and you have to look at it either way. and by the way, carl, i just seem to want to channel gary kaminsky here. i want to make that accent come through but i can't do it. >> yo bro, but you know what you've got here. you've got an interesting timing of things. remember, the economy for retailers is so-so. if you go back and look at companies like starbucks, they did their transformations when nobody was watching. i don't think you can really make that comparison here. though it is interesting to watch. but what we know in this case is, you got to give the guy time. he made that horrible mistake of giving guidance right out of the chute which made absolutely no sense. i had been a fan. that took me right off the fan base at that point. and now, you know, you look at companies that have activists like acton backing them or in

the case of yahoo! and you can say these activists who are rattling the cages, they're not going to be rattling the cages any longer so they certainly will have a long road. but it's interesting, because when you and i talk, carl, to any of these retail experts that we know, and there are so many of them, it's so hard to find one who's willing to say it's going to work. they're all betting against it. >> people made fun today, herb, about some of their metrics. gross margins, x markdown. did you laugh at that? does that -- does that ring like something very dangerous? >> i don't -- you don't want to look at this stuff. are you making money or aren't you making money? are your comp store sales getting better or worse? this is a transformation. this is a turnaround. you can throw any metric out there you want, it doesn't really matter. what matters is what happens in the end. and what the end is, in this kind of short-term thinking market is very different but

about than what the end might be. and that's what gets lost in the translation here so much. in this market, the stocks are moving every you know we have these 10% swings. look at this stock, a 20% swing in the span of premarket versus post market. and so you know we're judging everything by tick by tick by tick. and so is he going to succeed? i don't know. i put him on my list as a nominee for the worst ceo of the year. which really was hard to do because i think he's really talented but i think he's made some real blunders but we'll see. because you know what we know, carl? we know that we don't really know. and no one really does and we may come back here two years ago and we will say, boy, was that the, the was that the deal of the century. >> good stuff, herb. one to watch. thanks a lot. when we come back we're going to sit down with the president and co-founder of one click payment start-up stripe which just might become pay pal's biggest threat. with peter teal as a personal investor. you don't want to miss what

stripe's president has to say. you know what i love about this country?

trick question. i love everything about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn. [ "the odd couple" theme playing ] humans. even when we cross our "t"s and dot our "i"s, we still run into problems -- mainly other humans. at liberty mutual insurance, we understand. that's why our auto policies come with accident forgiveness if you qualify, where your rates won't go up due to your first accident, and new car replacement, where if you total

your new car, we give you the money for a new one. call... to talk to an insurance expert about everything else that comes standard with our base auto policy. [ tires squeal ] and if you get into an accident and use one of our certified repair shops, your repairs are guaranteed for life. call... to switch, and you could save hundreds. liberty mutual insurance -- responsibility. what's your policy? coming up next on "halftime report," another disastrous quarter for jcpenney. why is the stock up? wall street seems to be believing in ron johnson. should you be? plus the countdown to facebook's lockup expiration. is another massive selling wave just days away? and china and europe aren't helping the markets. so why are stocks still in striking distance? another market mystery solved at

the top of the hour. >> thanks a lot, scott. in the 14 years since paypal was started the internet has changed but not much has changed in the mobile payment business until now. start-up stripe lets companies build a one-click payment system into their websites and mobile apps. among the investors in stripe, three out of the five paypal co-founders. john colson is the president and co-founder of stripe. john, good morning to you. happy birthday, by the way. i understand you just turned 20. the ripe old page of 22. congratulations. >> that's correct. >> walk me through sort of the strategy here, and the degree to which you are a threat to paypal, given that a lot of the people who created that company are now with you? how do you see yourself up against the competition? >> so, what we're building with stripe is the best way to accept payments online. if you're building a product or service on the web or a mobile app and you want to accept credit card payments from your users, stripe is the best way to accomplish that.

and the reason we started stripe is we saw you have this legacy banking infrastructure that had grafted the old way, the brick and mortar way of doing payments onto the web and you had a peer-to-peer payment system with paypal which is also being applied to business, and so there was this clear need for production-grade payment infrastructure at four businesses. >> peter teal is in, as we've mentioned already. co-founders ee lon musk. can you give us a clue as to where this puts your valuation? >> i cannot. but i think that, yeah, it's really great us having peter and max and elon on board. i think they believe in this idea of the economic infrastructure for the internet hasn't happened yet. and the companies that will create that, it's not going to be a bank taking the same strategy, and you know, opening it up to a sales channel on the internet. it will be a company that builds payment infrastructure purely

through the web. >> why don't you think paypal has already pushed this revolution farther in the way that you're now trying to do? >> paypal has slightly different roles. with paypal you can logon, you can pay your friends or logon and pay a business. with stripe, we care about building infrastructure for businesses and their needs. the huge advantages that come with that, like we care about giving businesses complete branding control. it's about taking formerly a structural advantage for the very largest companies, you know, if you're a walmart or amazon you have this phenomenal payment experience and giving that to everyone. >> i know you do not see yourself as a competitor to square which we talked a lot about this week given their new deal with starbucks. but i wonder if you think the online payment space and the point of purchase payment space are going to converge? can someone do it both? or do you have to be one or the

other? >> it's interesting. i think it's mostly a question of focus. square is a phenomenal product. and what they're really doing that's so revolutionary is taking actions that previously would have happened with cash and moving them to cards. so if you're paying at a hair salon or buying coffee, now that can go with a credit card through square. with stripe, the thing we really care about is those online -- those online transactions where a business is hundreds or thousands of miles away from its competitors. and that's the kind of newcomer that's enabled by the internet. >> i don't know what's more charming the fact that you're 22 or your irish brogue. either way, great conversation. i hope you'll come back. >> thanks very much. >> john collison joining us from stripe. when we come back, youth is served. we've got the 20-year-old student who won the $100,000 tooel fellowship.

billionaire venture capitalist peter thiel has launched a competition to find the next silicon valley superstars. 20 innovators under the age of 20 will win a two-year fellowship, a $100,000 prize. but there's a catch, they need to drop out of school to focus full-time on their big idea. on monday's premiere 20 under 20 transforming tomorrow we get a look at the competition and hear how those teenagers describe their parents' reaction to the news. >> i think a lot of people are really horrified at the idea of students going and dropping out of college and going and doing crazy things. >> high dad was quite proud of it. he realized that potential this could change is quite drastic. my mother on the other hand was quite against it. >> my parents at first were kind

of skeptical. >> we want you to stay in school. >> christopher is ruining his life. >> don't drop out of school. just -- don't do this. who the heck is peter thiel? >> and there you heard thiel fellow spencer hewitt talking about his skeptical parents. he joins us from palo alto. good morning to you. >> hi, carl. thanks a lot for having me. >> i got to imagine, parents would be a little skeptical when they heard about this deal. given where you are right now, have they changed their mind? have they changed their state of the union? >> absolutely. they're fully supportive of it now. they did the research and they have really proven the program. >> talk about your project. you got the inspiration when you were standing in line at, of all places, victoria's secret. what is it, and why -- what were you doing there, and what about that space gave you this -- this -- this idea? >> i was dragged in there by some girls after work. i was not there of a own volition. i just want to make that clear.

and the line was so long, and i was so uncomfortable that i actually thought of the idea to eliminate checkout lines. so that's what i'm working on right now. >> this is involving a microchip, right? >> yes. >> so how does it work? >> if anyone's ever used easypass like in a toll booth, it works exactly like that. you just put your stuff in your cart, and you walk out and you get charged automatically. you won't have to wait in line again and you can't steal because i track each item using a microchip, and i basically invented a better method of scanning all these items and tracking them. >> how is the project coming along? >> really well. in the prototype stage right now. right now i'm just reaching out to strategic partners, investors and clients trying to build some relationships there. >> you said, at least it's been written, that you wanted to be an inventor since you were 3 years old. you're 20 now. i have twins who are 3. i don't think they know what they want to be. are you exaggerating or has your career aspiration, does it actually go back to an age that

young? >> it really does. i was inspired by one of my dad's friends who is an inventor when i 36rs years old and i followed that passion throughout my life. >> well, we're going to watch closely, spencer. it's a pleasure meeting you, and of course best of luck. joining us there, spencer hewitt. a thiel fellow. logon to cnbc's facebook page, by the way, at 12:00 p.m. eastern time. spencer is going to answer some of your questions live. catch the two-part special 20 under 20, transforming tomorrow, premieres on monday, august 13th, with the finale on tuesday, august 14th at 10:00 p.m. eastern and pacific right here on cnbc. one of the world's most popular soccer clubs, manchester united headed to wall street today in search of some investors. brings us to our question on squawk on the tweet. tell us something you're passionate about but that you'd never buy stock in. we'll get your responses in just a moment.

it's something you're born with. and inspires the things you choose to do. you do what you do...

because it matters. at hp we don't just believe in the power of technology. we believe in the power of people when technology works for you. to dream. to create. to work. if you're going to do something. make it matter. squawk on the tweet for a friday morning. one of the world's most popular soccer clubs manchester united on wall street today trying to actually did go public looking for some investors and some fans. so we're asking you, what's something you're passionate about but would never actually buy stock in? sunny writes i like wrestling but i would never invest in

world wrestling entertainment. gary writes, passionate about politics and religion but never talk about them nor would i invest in them. and trade for profit writes as we heard earlier as well, facebook. interests responses to a big story today as a lot of marketing happening for manu here on the floor. jcpenney, what was clearly a short covering rally this morning has evaporated. sit look being at gains of almost a little bit more than 3%. 22.82. the stock got down to 19 or so is the turnaround story regarding ron johnson continues. they did say cash is not the problem. billion expected by the end of the fiscal year and in ron johnson's words we will stay the course, even as gross margins were down more than five points to 33.2% on sales and of course earnings did miss a loss of 37 cents, estimates were for a loss of 25. there's a look at yahoo! the other big story as marissa meyer