the story and breaking it into smithereens that it's too big to fail. hedge fund manager dan lobe who is babealicious is calling for the breakup of the company. >> it's part of its investment of its entertainment arm. thanks for joining us. mandy, thank you for being here. >> not at all. always a pleasure. >> see you tomorrow. >> "squawk on the street" is next. and you won't be here. ♪ ♪ >> what a show. congratulations to squawk on a great couple of hours of staff of it. i'm carl quintanilla, jim kramer and david faber. david 10er which you heard on squawk earlier this morning as the dow now gunning for its 18th positive tuesday in a row. meanwhile, take a europe, the continent is mixed here today. you have some right action in

spain. germany is in the green. our road map begins with the hedge fund manager, david 10er in no uncertain terms brushing off those worries about the fed. >> another outspoken hedge fund manager dan loeb calling for the breakup of the technology and entertainment conglomerate. >> sony citing some slowing sales. >> and the blackberry live developer's conference kicking off at this hour as rumors of a cheaper device or new mobile platform abound? we'll begin with those comments from david teper who earlier on squawk box said he's bullish on the market and there's $4 million worried for a place to go. >> if there is a true taper, there better be a true taper unless you may be in the last half of '99. so guys that are short they better get a shovel to get themselves out of the grave.

>> interesting way to turn the debate and tapering as a positive, that you would rather have sooner than june 19th. >> whether spain takes cnbc. germany obviously does. look, tepper is a brilliant man. i've known him since the early '80s. he's been right on a lot of things. i do believe that there is a lot of money looking for home. i was saying last night on "mad money," everyone is waiting for gaps to be filled and everyone waits for a stock that goes up on good news, but 10% is just not going happen this time, but the fed better cool things eventually and when it does it will be even better. i don't know. maybe you think that that's too much of a good thing. >> i don't know. what i heard him say is if they don't we'll have a second half like '99. of course, you and i have sat here remembering it to one of the grater periods to follow the stock market. >> right.

it was too short. he's giving you a chance to have this bull spread out if bernanke does the tapering. it was supposed to cause a 10% decline. we can get in. we were able to buy walmart at 65, david. >> we talked about the influence on so many different parts of the markets broadly speaking and i would agree that there's potentially a lot of deleterious things that could occur with with it spiking. >> citi likes the banks. it doesn't have a lot of commodities and talks about multiples going from 13 to 20. >> i know. >> once the rates normalize to 3% to 4%. >> so bullish. >> citi michael corbat, people may not understand this man. he happened to reorganize the organization and he was at a festival with a lot of citi people. these guys are now talking like they're on a winning team.

they feel like the yankees. the yankees are doing okay and they have a good feel about corbat. is someone a cheerleader in chief? people feel this guy resurrected -- i'm sure, it epper likes him, too, but i think city is being reinvigorated. new guy comes in. >> doing a great job. >> yeah. >> to be fair, tepper was in a number of years ago and lightened up and admitted that he got it wrong this was another sign of tepper. he's not a joker. tepper admitted when he's wrong. he's caused us to rally the whole way. >> people trying to put his comments into context saying he doesn't overthink it and he's giving not overthinking the market a good name because you don't think yourself into

various corners. >> he's so commonsensical. he's not trying to sell you his mutual fund. listen, carl, on the one hand we can go to s&p 17, but on the other hand, david, we can go to 14. i really like the cyclicals, but they can go down. he's just saying, listen, buy it, and i find from people at home that guy is not confusing and they gave him a fortune to build his own business squad. whitman, where was your business school? ? i'm working on it. >> i don't quite have it yet. >> we're going to -- >> journalism -- >> i'm not sure. i think journalism in queens. journalism is hot these days and it's going to be a very big school. >> even the justice department wants to know more. >> that's true. yeah, that was nice. the a.p. >> i always liked the a.p. >> i didn't need the justice

department. that's worrisome now. >> people who could really -- i mean, move the market. the justice department hacking the a.p. i like the a.p. and maybe the justice department doesn't know. >> they're not really -- >> it's not 1963 anymore. >> the united press international that you wouldn't believe and let me tell you, you know who should be worried? it's vestia and pradiya. >> we'll talk about tepper all day and how his comments will sustain us throughout the course of the nation. >> geez, the market is going to -- it's us. cool! >> it is cool. it is. >> another story reported by our own andrew ross sorkin. think, it was on the front of the new york times. sony up in the pre-market. >> he's co-owned. >> we got half of him at least.

>> dan loeb is calling on sony to spin off its entertainment division through an ipo saying it could result in sony shares being up 60%. he owns 6.5% of the company. he hand delivered a letter to sony ceo today. third point would not have made the substantial investment if we did not believe in a bright future for sony's global brand, superior technology and dedicated employees. >> we are confident that by acting as partners sony will grow stronger. for sony to change, sony must focus. in response, its entertainment business is important to the growth strategy and are not for sale. certainly not the first time we've heard about the possibility of that. in fact, in the m and a circles comes up and if you talk about potential deals you often talk about would they sell it to another media company, but this is interesting for a variety of reasons. it's a significant stake for

loeb and he's going to japan and he spoke recently at the salt conference and overall he's got a thesis that seems to be relatively bullish, but activism in japan is not always something that mixes that well. >> a group of very good managers came to me and suggested a break-up analysis. >> yes. >> it could be worth 72, the insurance division and the entertainment division and the console division and then the stock would go to 19. there are many people who would like to break this up and now with the yen at your back it's actually worth a look at it. i think it is well timed by loeb. it wouldn't be the first time loeb was well timed. >> the company just had its first profit in four years and there is this sense is corporate japan ready to restructure and maybe it's an activist's time? >> it's worth taking a shot, but it's not the united states and it never will be and there is

this larger, cultural phenomena of everybody wanting to try to get along and so i'll be curious to see how he does here and for his part he's not writing flaming letters. he went over there to present it. >> it's a kinder, gentler loeb. >> very much so. so this is the new statesman, dan loeb and much more constructive. that doesn't mean that there won't be potential fire behind it and it's only an $18 billion market cap company so you can't move things around there. the guys have not had that long to try to get things moving. it will be interesting to watch. >> you have the wind at your back. look at toyota and that's even with not great news about their cars. >> look, japan, the policy's working and we had dan on "mad money" and said look, japan's on fire, japan's on fire.

when was the last time you heard japan office fire. >> the nikkei is 43% and the dollar in yen terms is not far off from that. >> remember, it's 1988-89 and you would come in and say what are you guys doing today? so you probably want to buy 100,000 shares? how do you know that? i took up tokyo railway, and listen, you're going buy, tonight you're buying 50,000 and it would be something like mitsubishi. it didn't matter what they were pushing and it would go up. >> they have a consensus stifle stock ownership. >> the boj have not said -- they're buying reits over there and other securities in japan. they have a lot of -- >> they're pushing out other buyers who are looking for yield. >> this market, they worked 48,000 on the nikkei in the late '80s and we were --

>> now you're celebrating 14. >> they used to come in and they were buying everything and there was protection about how the japanese were going come in and buy. >> pebble beach and rock center. >> right. i remember there was a lot of buzz in the congress about how they were taking over our good technology companies and suddenly intel emerged and when it became a microprocessor company instead of a dram company it went from being in the top 20 to being number one. the top companies were all japanese and now they merged and gave up. sony, think, which introduced the walkman in 1979, we talked many times about it. >> sharp, pioneer. >> jvc. it was betamax versus nbc, they were kings. >> i don't think loeb is looking to take that kind of a mantle yet again and there can be a lot of value that could be created if they were trying to spin entertainment. they say they're not interested. we'll see.

it's not a battle yet, but it will be interesting to see if he ratchets up the pressure. >> it's just part of this whole -- the world is a better place to invest because of what the japanese are doing. flooding the world from liquidity. return to tepper again. >> when they asked him where is the best place tobacco? he said everywhere is the best place to be. >> and then the deflation of toyota being able to sell its automobiles for less and therefore forcing prices down. that's having an impact on the fed potentially and its willingness to go into qe and not worried about inflation. >> i have a house in mexico and david likes to joke about it. when you go down to mexico your plane is filled with japanese engineers and they're building factory after factory in mexico to lower the price to take over the united states again and believe me, they can. they offer superior product that a lot of people still like.

the country has been wayward, and i'm saying japan is no longer waivered. >> a lot more to talk about. when we come back, blackberry's ceo addressing his conference this hour. what does he have to say about the smartphone future? we'll stay on that. the tv signal streaming service as the company remains in legal battles with all kinds of broadcasters. take one more futures in the implied open and up about six points. we'll talk about walmart, j.p. morgan and others when "squawk on the street" comes back. onjou♪ ♪ je t'adore ♪ c'est aujourd'hui ♪ ♪ et toujours ♪ me amour ♪ how about me? [ male announcer ] here's to a life less routine. ♪ and it's un, deux, trois, quatre ♪ ♪ give me some more of that [ male announcer ] the more connected, athletic, seductive lexus rx. ♪ je t'adore, je t'adore, je t'adore ♪ ♪

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shares of walmart moving lower in the pre-market. sales are moving the retail giant from the top picks list saying february sales got off to a weak start adding the trend continued into march and april. they're throwing everything into the kitchen sink, poor weather, delayed tax, tax refunds and the lack of food inflation and other things. >> jefferies has a note out today and they say we think sales improved over q-1. they're saying the opposite and they're saying march and april were probably good months and continuing to see gains in food. short walmart at your own peril, okay? i like other retailers more, but

we're in a period where i have tepper's words ringing in my ear, carl. he's talking about shorting as being a sucker's game. shorting walmart, a great american company may not be the right call right now. you mentioned you have to get shovels to be able to -- >> the shorts will shovel to dig themselves out of the grave. home depot goes on 85 on that call. >> look, they sold the bobcat. who bought the bobcat? this is stanley works and now stanley, black & decker and they have tools. >> deere. >> deere. tepper's given you a whole menu of places to carry shorts. i do not want to go against walmart. the age of aquarius/walmart, would you go against this company? >> not over a long period of time. it's a company that does have the ability to change and respond to changes in the marketplace. as big as it is, it communicates

fairly well. >> "the new york times" investigation, they called that the botd. the buy opportunity of the decade. >> it turned out to be. it turned out to be. >> talking about buy opportunities, morgan stanley, meanwhile, raising its price target on tesla from 47 to 103. >> i thought that was interesting. >> the stock already more than 170 here today. >> let's go into the strategy session. we're in the morgan stanley research group. >> carl, i'm thinking about taking it to 97. do you come back to 107 and settle it at 103. >> that sounds good. >> maybe they see something they like. >> this weekend at the inn the guy says listen, where's my charger? he's got a tesla. >> how do you jury-rig a thing? what do you do? >> is it a long extension cord?

>> don't pull that one out, that's the tesla. >> it's a three-prong versus a two-prong. you go to radioshack and that's how you fix it. >> when i see 47 here's what i think. someone is short tesla, okay? they're, like, hoping that they can bring in some stock, that maybe there will be some stock for sale and the stock has doubled. no, they come in today and they want to stick their fingers into the socket that the guy used the tesla for my end. that's what you want to do. this thing -- the success of this car if it is as good as they say and it sells as well as it may, could it change the dynamic for the charging stations. >> is it finally the chicken? >> i know eating does charging stations. they were trying to move toward the natural gas charging stations and the guys, there's the -- dave crane. dave crane's company also does

charging stations. >> does he? >> yes, and rg. that's what i call a derivative play. in the meantime, there is some hedge fund right now saying you have to take me out of my pain. you have to take me out of my pain. you can haver is quill and the preferred drugs of persons everywhere and you still cannot deal with the pain of tesla. >> you said this could be the end of some funds. has to be. who can sustain this? right now their brokers are saying do you have tesla? >> unless you've done a poor job of risk management. you shouldn't let one short take you out. i mean, come on. >> the same risk management and let's just say that you can't gain. you never know. solar city was down today. a huge percentage of that. >> yeah. >> i come back to the tesla conference call. this was one of those calls where the subtext was listen, weir doing so much better than you realize. weir unbelievable.

if you're short a stock it was like -- kruschev, and over geriatric and people are mad at me to make historical references. when kruschev said we will bury you. kruschev! >> yes, i remember. i was not alive in 1960, i believe it was or '61, but i'm aware of it. >> i was in the kitchen. >> were you? >> i was in the kitchen. >> tesla, by the way, bigger market cap now than fiat and peugeot. >> how many divisions do they have? we'll get jim's "mad dash" after a short break. it's as simple as this. at bny mellon, our business is investments. managing them, moving them, making them work.

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you're watching the ceo of blackberry speaking at the company's meeting in orlando, florida. the developer's conference. we'll get to the "mad dash" now. we is six minutes to go before the opening bell. here's the music. >> sprint seems to have come alive. lots of talk that maybe there's more, where there's smoke there's charlie yergin. >> massasan. looking forward potentially to that day coming and today dish comes out with the strange thing. i don't want to call it strange, but let me rephrase. we'll offer a 2.5 principal senior notes and we'll put it in easco, but it will help finance our potential bid for sprint.

>> they are able to raise money. >> yeah, but it's $2.5 billion. they say they need 9 billion, but some people say if they'll backstop the debt that has change and control provisions at sprint and they need 20 billion and you still have no financing commitments in dish at this point and that's got to be a key issue between dish and the special committee. >> by the way, for its part, jim says they provided information and documentation in response to all of the questions from sprint's special committee and they're unaware of any items that remain outstanding so we'll see, but it's still a conundrum wrapped -- and an enigma wrapped in a riddle. >> people want to buy sprint because there will be a bidding war for sprint. >> they thought there would be a bidding war for dell. i think these are not great bets and i think can dish raise five times that?

and a lot, it depends on what they need to, but at least nine or ten. if sprint were not a $7 stock. >> it seems to be animal enthusiasm for dollar 7 stocks is incredible right now. >> the dow's posted gains. you know how many tuesdays in a row? 17. >> will today mark 18? ? never on a sunday. we're back after this. changing the world is exhausting business.

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♪ all on thinkorswim. from td ameritrade. you're watching "squawk on the street" live from the financial capital of the world. the opening bell set to open in a minute. we haven't had a down tuesday in, oh, four months. >> maybe we should start thinking about why that is. what kind of money comes in from foreign lands on tuesday. we used to have mutual fund monday. it can't be either. there is nothing idle about a pattern that is that -- >> data goes back to about 1900 and it's never been matched. we've never had a streak this long for a tuesday win streak on tuesday. it's mind-boggling in a way. >> it's an oddity that has to be

explained that some margin clerk knows or someone in the cage, someone in the mutual fund office says hey, every tuesday morning you get this money coming from -- i don't know, and then you name a region. [ opening bell ringing ] >> there's the bell. nyse and invesco celebrating the 10th anniversary of the init willidex. and at the nasdaq, american capital agency, a mortgage reit doing the honors. >> how about sony? look at that, you send a letter. >> in this case, he did more than send a letter. he hand delivered it. that's class, man. that's class. dan loeb's evolution in many ways which i've watched over a 20-year period, in fact, has been fascinating from those nasty letters that he wrote some time back to now being sort of a

statesman. >> the king, henry the -- let's bring in andrew soshgin and he broke the story on the front page of of "the new york times." there he is. >> we are also breaking the story on cnbc, like, 2:36 on cnbc your honor. we've been going all night. david, my sense on all of this and i'm curious where you are, when you think about dan, and i agree with you, there's been a huge evolution as to some of the poison pill letters he wrote or poison ink letters he wrote, rather, to what he's doing now. is your sense that there's going to be enough pressure and enough western shareholders that pile in to the stock that he's going to be able to have sway and be able to get himself on the board or pressure for some of these changes? >> andrew, that's the key question. you are in a better position to answer it than i am having done

more reporting than this, certainly. i think you're right. i don't know the japanese market in terms of activism or the responsive board. sewny is an international company and its had international leadership and howard stringer, recently. all of that being said, it's still a japanese company. what do you think? >> i don't even know the composition of the shareholder base to understand the power that he may be able to bring. >> he now owns 6% of the company and over $1 billion in the company. he is the largest shareholder by a factor of two, if not three. if you don't consider a number of japanese trusts owned by individuals in japan who still have sway and some of those may trade hands, of course. unclear how much sway he will have unless people do come in. the reaction overnight, and there were sort of two camps.

look, the american billionaire, wall street guy is coming and this is not good news and the other one which is in look at the stock and what may happen to the japanese market tomorrow that says, look, this is great news in japan and we're finally moving to the last leg of the stool that abe talked about which is the structural changes that need to happen. ooh a question of how many people come to the fore. i also understand from sources close to sony that the board, despite putting out the statement earlier today saying that the entertainment business is not up for sale that they are going to take this very seriously. they will meet and discuss it next week on may 22nd and sony is preparing to make a presentation about its strategy and it will be interesting to see if any of that strategy presentation is influenced by this letter and of course, what dan loeb's reaction is on the other side of that presentation, and i think we're going to see a sort of long, drawn-out process similar to yahoo.

these things don't happen in a day. they happen over many, many months. >> these are campaigns that take a lot of time with many twists and turn. if you were going to see japanese entertainment, u.s. assets that were bought years ago when the japanese, of course, and sony were in a much stronger position. >> the biggest problem that i see is internally within sony there is a clear decision that they want to keep the entertainment business. they want to keep sony financial which is the insurance unit which doesn't have much to do with entertainment and tvs or anything else. they're not using it for vendor financing because they throw off a lot of cash. the company was profitable in part because of sony financial, the entertainment business and big business supports the rest of it. if you take away those things and stip it down to the core electronics business, that is a challenged business. >> they've resisted for years,

spinning off this insurance business. there have been very many american accounts that suggested doing this and suggested that this was the cream of the insurance and they completely ignored them and said forget about it, and we are, in the end we are from western. they've always believed that they're western and that's an old style pass tisch, if not mosaic of companies. >> there are interesting comments and howard stringer gave a speech back in march. he's the outgoing ceo and chairman or outgoing chairman now of the company and he talked about the challenges of running the company and more importantly restructuring the company and making some of the hard decisions that i imagine dan loeb wants them to make, but he, howard stringer knew he needed to make them, but felt he couldn't given the cultural issues. in japan it isn't just about shareholder value and it's about stake holder value. some people say stake holder

value is that you're not working for anybody in some ways because you have so many different constituents and that is the central tenet which is japan moving toward a system focused more on shareholders than stakeholders and what that means in the larger scheme. >> andrew, great reporting as always and we're watching sony up 14.5%. by the way, up 93% year to date. so there was a buying opportunity in those shares when they were suffering after so many quarters and losses. >> the japanese government has decided, listen, we're taking this market up. we're doing what's necessary to get this economy restarted and it had a lost decade and they don't want another lost decade. >> we got to speaking of consumer electronics and torsten heinz, q-10 hitting u.s. store shelves in early june and unveiling what they call the q-5

and this is the mid-tier device and people are looking at a lower-priced option and this is a physical keyboard that launched this summer and emerging markets available in a range of colors. that sounds vaguely familiar. he's delivering on some expectations out of this conference. >> this is sounding like torston, he needs conspicuous consumption to get this going. this is what apple and steve jobs -- i remember when my daughter came to me and she had a blue ipod and she wanted another ipod. he wants this to be a fashion statement. i don't know if blackberry can leap to the michael kors level, i don't think it will happen, but this stock has got so many people wanting it to go higher in this tape. >> wow! i don't know. >> it does raise the point, jc penney, tesla, first solar, the classic short positions. >> best buy. >> how many are left?

>> look, if you're a hedge fund manager you always have to have shorts in the book and people look at what's overvalued and they say i'm short tesla. there are probably guys that are short tesla, long ford. i'm not kidding. >> oh, yeah. and you would go and meet with your investor. i'm short tesla, okay? and i'm long warner. okay. that's great. at the end of the month i want my money back and so they have to cover tesla to send their money back. at 14, everyone wrote it off and at 26 there will be a $40 deal. a 12 and 14, everyone said sell it. i don't want anything to do with it and all of a sudden they're having a good couple of weeks. this is the short's worst nightmare. it's looking terrible, but now that it's 235. how do you like that? i gave up on that at 250.

black rock is being a great proxy for money in. the money in. >> one of the big stocks you recommended on our new year's eve special, i believe, right? >> yes. because this, look, larry fink. smart guy recognized somewhat on tepper. let's seize the moment. those choosing not to seize the moment will have their assets seized by the end of the quarter. s&p is at a new all-time high here. 1638 and the dow is up almost 28. bertha is on the floor. >> hi, carl. we're watching the tuesday stroke. 17 tuesdays in a row since january. we'll see if this one makes it 18 and even as the market has melted up and we've gone up to the record highs, retail investors continue to sit on the side line. schwab out with its trading volume with april saying volumes were up 2% year over year and they declined 2% from march. investors on the retail level just not moving to the inside

and meantime dean foods this morning getting an upgrade over at gianni. it's set to spin off its interest in white wave later this week. gianni upgrading it to a buy from a neutral and blackberry not the only one unveiling a new phone and nokia unveiling the 925. this is an upscale version and that's about 600 in europe and set to debut later in europe and asia. it will debut here under t-mobile. nokia, meantime, according to gartner lost some five points in market share from the first quarter of last year to the first quarter of this year. the big winner in the first quarter in the smartphone is no surprise was the android system with folks over at samsung gaining 13% market share during the first quarter. ios market share actually fell a couple of points down to 18.2%. gartman saying apple faces a tough two quarters ahead with no

expected new item on the market before the third or fourth quarter of this year. >> take a look at oil stocks, though, the iea confirming what people know that the u.s. is becoming a powerhouse with oil because of the fracing revolution. oil stocks are higher this morning and a little bit of relief for hospitals. president obama saying it will not penalize hospitals by cutting reimbursement for uncompensated care for the first couple of years. >> rick santelli at the cme group. he has been on the yen and called it the whole way. go ahead. >> we have to share credit with harris. yes, that was the thanksgiving special gift that keeps on giving. the proactive range, the rumor that proved to be true in the afternoon of thursday seems to be rung out of gas. look at a two-day chart and it's

fascinating because as you open the cart up on a year to date basis, a couple of things jump out at you. year to date and everything is closing basis and everything is at 2:06 and the low yield is at 162. if you take the average it's at 184. yesterday we saw the yield and it was 188. i imagine that you'll be bumping up against lower yields or higher prices as it's in the new trading range. if you look at the dollar index it wins for the day and not only are we making new high prices for the yore. these are the highest levels going back to august 8th and this chart starts on august 1st and why is this occurring? exhibit a. look at the pound versus the dollar. granted, it's up on the year. the behavior the last couple of weeks and same is true for the euro versus the dollar. exhibit b is now under 130, but the greatest contributor of all

dollar yen and remember, this is flip-flopped and this is in dollar terms and it is just up, up and away, if there was a staircase like that they'd write a song and called it stairway to yen instead of stairway to heaven. >> thank you. i made a joke at the robin foundation and no one got it. what's going on there i had same feeling. >> i think elton john laugh. >> i think i heard elton laugh upon. >> didn't you love the fact that timberlake i want what that guy's on. >> the latest news in energy and metals. let's go to sharon. >> opec has no longer been the main driver of oil supplies in the global marketplace and this is something that we've known, as bertha mentioned, the international agency out today with the medium term report saying that it believes that north american oil will be transform tiative over the next

five years and just like chinese demand was a main driver over the last nine years and it will be north america and the supply boom that we're seeing right here. the supply shock that many are experiencing that will be transformative for oil prices and the oil market. we're seeing a little bit of pressure the oil market right now, but this is something that has been well reported and well known, the iea underscoring this fact in the latest report. we're also watching what's happening in the gold market. they're below a key technical level and the 1426 level is one to watch carefully and we're continuing to see the let'sest cftc report that there has been more negative sentiment on goal and that is what barclays is noting. we're also noting what happened with silver prices near a technical level there and $23 will be key and copper, carl. keep your eye on it and copper is the worst performing commodity and a lot of concerns about the data coming out of china.

back to you. >> thank you so much. when we come back, mobile security firm is advising warning about smartphone theft. they're protectioning from what they call apple picking. take a look at the early movers. s&p up five at 16.38. back in a minute. thank you orville and wilbur... ...amelia... neil and buzz: for teaching us that you can't create the future... by clinging to the past. and with that: you're history. instead of looking behind... delta is looking beyond. 80 thousand of us investing billions... in everything from the best experiences below... to the finest comforts above. we're not simply saluting history... we're making it.

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welcome back. i did want to talk about a bit of hess as we are near in or close in on the company's annual shareholder meeting that will take place in houston on thursday and interestingly, over the last 24 hours we've gotten a few different proposals, one from hess saying hey, elliott, if you let our five guys get seated that we want to replace our five directors that are up, we'll let two of your guys come on, and then this morning elliott responds saying how about five and five. we'll let your five on if you let our five on and of course, that would create a potential

board of 19 people, though they do go on to say that we'd figure that out later on. theria a look at the hess slate. by the way, elliott's hess slate. elliott did change compensation structure there because they'd come into some criticism about how they were paying those directors and what their incentives really were. the key here is are we going to if get face-to-face talks between the two sides designed to come to some sort of true resolution? it does appear, at least that last evening, john hess and paul singer who ron elliott may have had a brief conversation. >> really? >> i am told there was nothing substantive discussed during that conversation if you look at mr. hess who is proposed now splitting the chairman and ceo roles and there's a look at paul singer, who is not running this, he has a couple of other guys running this campaign which, by the way, has been brutal and it's at the meeting if not before, but jim, you do get the

sense and i certainly do from my reporting that there's a possiblity of some sort of resolution in the next 24 hours. we'll see if it happens. you have the elliott side which i believe is feeling fairly confident and it has four, maybe all five of its directors and so what are they willing to take and they're getting closer to having real talks and whether that will occur is still to be determined. >> i'm confused, david. if you want the stock higher, you sell the company, you don't add directors. what with am i missing here? what is an adding of directors to the minority mean? >> to the extent that the new slate proposed by hess to replace five directors by exiting is a better group of directors and it's a much more constructive group. you have ten new board members and you get rid of five almost immediately. we admit we had hack directors and we're bringing in real

directors? >> kind of. >> really? >> as to why you buy the stock here that's a good one -- [ en discernible ] >> here's the problem with this. i think hess is worth substantially more and they're not doing anything to bring up the value that elliott really wants meaning sell the company and they have the greatest assets. >> these things do take time and if, in pack, elliott is successful in seating the directors and say they get foe talks at all and the composition of the board changes significantly and then that kind of a conversation becomes something that takes place at the board level in a more meaningful way. >> that is one argument that can be made and just improve the company anyway. >> they're so desperate for u.s. assets and that's not been the case and there are companies that are undervalued. >> i'm just blown away by the iaea stat today. a third of oil output will come

from the united states. >> we'll be doing 9 million barrels very soon. mark papa, the ceo, soon to retire eeog which has been the leader is assuring me about north american independence by that point. we are brimming with oil and core labs is the company that's been fighting a lot underneath and beginning to just discover. i think that the delaware basin that eog has and no one talks about that basin yet could be as big as bockinand prudhoe bay. >> what about california? there's a lot to come there. >> they can drill in california and it is going to be gigantic. the governor is not as anti-drilling as he used to be when i met him and he wanted to brake up the interstate highway system and wanted to shut down the grid. i'm not kidding. i used to cover him when i was in sacramento. he hated the interstate highway system. >> first time around, you're talking about the '70s.

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six stocks in 60 seconds

with jim. >> morgan stanley said buy it and jerry sign fell was talking about five-hour energy drinks and monster, and they're thinking it's undervalued. >> clorox. >> normally they raise 6.7%. they shot you with an 11%. he just says his company is doing very well. >> too much of a hike? >> no. >> regeneron. >> celgene, biogen and enron. >> kroger, target hike. >> there's kroger and whole foods and they are just carving up the nation. >> upgrade for all scripts. >> i have to tell you, when i see this pattern of insider buying and i saw it only in akamai and they all go higher. >> p & g. >> people were worried procter & gamble would not reaffirm and it's got the company going in the right direction. >> what's coming up tonight? a a theme that everybody love, water. we have aqua america on and this is one of the more popular

themes in the world. we are shot water and the controversial thing with the french there and he's a leading industrial. >> that got spicy a few weeks ago. >> yes, it did. it was showed. >> we'll see you tonight. >> thank you. >> thanks, jim. when we come back. laszlo barini, as the s&p hits another record high. don't go away. [ kitt ] you know what's impressive?

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the street." let's get the road map for the next hour. >> tepper laying out a definitive bull case. we'll talk to another iconic heavy weight laszlo birinyi and see if he agrees. >> dan loeb hand delivering a letter to sony's ceo calling for a breakup of the japanese giant. we will head to tokyo to get reaction from there. >> blackberry unveiling a cheaper phone. we'll get more from the develope developers' conference as it continues to orlando. is this a tepper rally? the s&p opening at yet another all-time high. david tepper was on squawk earlier this morning more bullish than ever and says he

does not see much downside in the equity markets. take a listen. >> we are very similar to an early stage economy. we don't have inflation and you have capacity utilization is low so you have room there. labor and unemployment's high so you have room there. no inflation and we have more room to run. >> laszlo birinyi, the president of birinyi associates and his latest s&p target was 1600. he does see some potential for a year-end target of 1900. laszlo, good to have you. good morning. >> good morning. >> i wonder what is your thought of tepper if you guys are speaking from the same school, if there was anything he pointed out good or bad about the market that you have not looked at yet. >> i agree. i come into the market from a different angle which is the market tuesday. the positives are only temporary and we've now seen a rotation to the cyclicals where people were

not as exposed as they were in the consumer stocks and we're looking at it from a market perspective and it can go higher. >> how about this notion, laszlo of tapering not necessarily being a rally killer? >> you know, we've heard this all for the last three or four years. again, i just keep looking at the fact that someone downgraded it on friday and it's come right back and those are more important. >> walk me through your guidance at 1900 and i know you put your note out a week or so ago. this 1900 will get played as our target. it's not, but what dpktly are you calling for. why put the number out there if it's not a hard target? >> it's the guidance. we looked at historical lows and it was 82 in some of the markets. the real number we want to look at is 1700.

it was only february when we were buying the december 160 s&p calls and now we're buying the s&p 170 calls. if you're going to hold me to a number that would be it, and i suggested when we spoke a couple of months ago that to us, it is a cross-country trip and before -- that's the first stop in cleveland, st. louis or whatever and we're just part of the way there and the next stop is 1700. >> if we do get to 1900, if that were possible, that would be 30% upside for the s&p, would that be abnormal in the historical sense? >> absolutely. >> it would last 35% gain, and i did not say 1900 in the end of the year. i just said that's the number again that was similar to the markets, and i think we will make it, but i wouldn't hold it

to december. let's get to 1700 and quite frankly, i would like to see a little bit of hesitancy. this market is very strong, but it's fine. i take it one step at a time and i want to get to 1700 after this. >> you mentioned the fact that the cyclicals have come back to an extent. how do you expect us to be propelled higher. in other words, what sectors will gain the most in your view? >> people don't realize how strong the market is. this has been the strongest decline in the s&p over the last 20 years in the advanced decline basis. it's a net gain of 4,000 stocks in the last quarter. what that means is you want to be picking stocks. i think that's the key here with sectors, perhaps, but we'll focus on picking stocks and even

utilities and con ed is up 14%, 15%. you want to pick stocks and not worry about sectors or themes. >> laszlo, a couple of final questions and one that tepper's concern this morning was the fed is failing to withdraw accommodation quickly enough? we are left with what he called sort of a hypermarket, echoes of late '99 and we know how that ended not too long after that. >> how much of that is a concern for you? >> so far it isn't because when i look at the market i look at what individual stocks are doing. i don't see these things happening and where people have been concerned about things like inflation and they look at the inflation-sensitive names and they're not reacting the way you would expect them to if that was an issue. so again, i just sit there and i look at the market on an inside out basis and the things we talked about for the last three or four years is still there.

>> laszlo, it's good to have your voice on a day when we have tepper making news from the broad market. thank you for coming to us on the show. >> morgan stanley shares are down 12% since ceo james goldman took the helm four years ago and with no clear signs of's turnaround, how will shareholders react about that annual meeting? we are live from morgan stanley's agm, plus the guy who closed at acquisition of mobilemedia. liontree's ceo will join us live and we'll find out where he sees opportunity and daniel loeb heads to sony.

if there is a story of morning it's likely to be tesla. the stock is up 3% today and morgan stanley taking their price target from 47 to 103 which is a bit of a u-turn that has now a bigger market cap than either fiat or peugeot. a quarter of the market cap of general motors and morgan

stanley saying what tesla has done is not luck. it's real. those are the words of morgan stanley as some continue to have their doubts about elan musk and the model. >> and the ability to manufacture the car at a real margin that makes sense. but 37% of the stock was short. this is what you get. it's how you spell pain is being short tsla. why they don't sell stock and raise cash. i know they don't potentially need it. that's when you do it, when you don't need it to have a nice little bit of income or cash in the bank for what will be a bad time one day down the road. >> do you know anybody who drives one of these, by the way? >> anybody that you know? >> did you test drive one? >> i've not, but i just wondered if we'll start hearing people start using these in their daily lives? >> i do not. i'm happy to test drive one. >> take it down broad. >> exactly. >> when we come back, christie's auction house to put the

101-carat mega diamond nicknamed big mike -- >> because you would wear big mike, wouldn't you? >> on display tomorrow. how much could the pricey piece fetch? we'll get the details on that straight ahead, plus mobile security firm look out, teaming up with google to ensure a higher level of protection against theft. we'll talk to the co-founder and ceo straight ahead. all business purchases.

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big news overnight. daniel loeb is calling on sony to spin off its entertainment division to an ipo. loeb writes third point would not have made this substantial investment if we did not believe in a bright future in sony's global brand, superior technology and dedicated employees. we are confident that by acting as partners, sony will grow together. third point owns 6.5% of sony. joining us on the phone from japan is dai wakabayashi from

"the wall street journal." what exactly does loeb want to do here? i know he handed personally the letter to sony's ceo today, and what effect do you think it will have on shareholder value? >> yeah. hi. mr. loeb wants sony to basically take its entertainment arm public and float 15% to 20% of the shares. he thinks that the entertainment arm is worth about $10 billion and therefore, by letting it lift that that will unlock the value that is probably that mr. loeb is not being properly assessed on sony's current market value. >> how is this likely to go down in japan? mr. abe, the new prime minister has made it clear that he wants the country to get rid of the strict hierarchy, but sony is a

commanding height of the japanese economy. what are they going to make of a foreigner coming in and trying to shake it up? >> interestingly enough, i think it's exactly the right company. sony is, you know, probably the most international among the japanese conglomerates, prior to mr. harai, howard stringer who was the first foreign ceo to run sony and so the company is quite international by japanese standards. i'm not sure how this fits into what the general government is trying to pursue in terms of reform and that type of thing, but in terms of -- in my discussions with people at sony it seems as though, and the ideas that mr. lobe's proposing is actually seems to be in line

with kind of what they've done in their financial business. >> and yet, you note if your article, mr. harai, the new ceo was specifically asked about the consumer electronics show in las vegas in january and he dismissed it then and he's got his own plan to present to the board next week, hasn't he? >> yes. >> he's got a big strategy meeting on may 22nd that lays out kind of where he has the company and yes, sony and mr. harai has been adamant that they're not going to sell off the entertainment business, but what mr. loeb is proposing is not really a sell-off. a lot of the headlines are saying it's a braeak up, but wht he's trying to say is you lift the entertainment arm and, you know, we'll get the market to assess what the value of it is, but you retain majority control and you control the company in some ways.

it's a little bit different than what sony has been saying that they wouldn't want to do which is to sell off the entertainment business. >> is loeb likely to get other shareholders onboard with him? what's your judgment on that at this stage? >> i think that might be more difficult in general japan shareholder activism is not a very friendly place for it and retail investors tend to side with management even in situations where companies have not historically returned very well to investors. and so i think that if mr. loeb is successful he'll be successful on the merit of his argument and not by winning over too many of the other shareholders. >> i'm sure you're aware, there's a lot of japan in general, loeb may not just stop, but sony. what are who is the rise that we

see today in the share price. >> i can't give you a specific fame and the interesting thing is the companies have more outside shareholders and sony has more companies in japan where they have more outside directors on its board than there are internal directors. japan is still very much a closed japanese corporation is still very much closed to outsiders and therefore, you know, you have to have at least a fighting chance, and. >> thank you very much for joining us from japan. >> dai wakabayashi from "the wall street journal." despite the shares' performance during his tenure. mary thompson is live in purchase, new york, that is where the meeting finished up and she has clsa's mike mayo. mary?

>> hi there, david. the meeting just completed and just to give our viewers an idea of what happened, all of the directors were re-elected and the proposals put forth by the company were passed, as well. during the meeting mr. gorman did take questions. he promised to get it to 10% by 2014 and he also talked about the fixed income commodities and currencies business which has struggled lately calling it a work in progress and one that is undergoing what he classified as a long-term turnaround. >> as you mentioned, david, i'm joined by mike mayo. thanks for joining us. you had the chance to add the lead director bob kidder about how they were approaching return on equity. did you hear what you wanted to hear from him? >> first, i was very encouraged and this was the first annual meeting that i know of among the banks where you had not only the chairman and ceo talk, but you also had the lead director bob kidder speak and the head of the governance and management committee erskine bowles.

fantastic. three directors speaking at the annual meeting. >> the new main information is that the company says they'll have a 10% roe by 2014. that might have been implicit before, but now it's explicit. so now we can come back to next year's annual meeting and say if you're not getting that roe, why not? you can hold them more accountable and that's why i came to the annual meeting today is to hold management's feet to the fire more and make sure the directors doing that. >> you also asked erskine bowles about compensation. you talked to employees who are concerned they're not getting paid enough and management says they're not getting paid enough. what's the right balance? what did you find compelling? >> you know, it's a tough balance between paying your employees enough so they can stay, and not paying them so much that the stock price doesn't perform well. morgan stanley's chair price has

been horrendous. it's been an awful share price performer and it was reassuring simply to see the directors' faces and hear them speak and make sure someone else was on the scene besides management. how do we on the outside know that the directors, the independent directors are not simply rubber stafrms for management proposals so i was reassuring that they had a chance to answer that question. >> gorman was also asked questions in a bit of a huddle that we had with the press afterwards about the fixed income business which has been a tough one for morgan stanly and it's been undergoing, as he mentioned a long-term turnaround. he said the key to this is reducing rwa or risk-weighted assets which he said would get to under 200 million by 2060. do you think that's enough for that business? >> i'm not sure. on the one hand, ubs is pulling back a lot more and they're reducing assets by 90%. on the other hand you had big

players such as j.p. morgan and goldman sachs. i'm not sure the directors showed how tough they could be and holding management's feet to the fire and on the other hand they were consistent focused on return on equity and they said it's about returns and not the size. the focus return on equity and if they achieved their target by 2014, i think their stock could go higher. this is one of my top ideas in the bank space. >> david, i believe you have a question. >> you know, mike. fixed income is the key here, i would think in some ways. we talked about it being a wealth management company and if you're going to get the roe up there they're still suffering from a year or two ago. can can they really turn it around on fixed income? >> first, i would say the

percentage of brokerage and wealth management has gone from one-third of the crisis to one-half of the company today. your point is well taken of the fixed income business being a drag on the roe, and i call this addition by subtraction, subtract your fixed income assets and that should be added to your returns and that was one message i heard today. >> mike, just before i let you go. simon hobb, i want to ask you about the note you put out on jamie dimon as to whether j.p. morgan splits the ceo and chairman. it could potentially be bad for investors. >> well, my issue is not the chairman and ceo split. my issue is having board accountability and management accountability for transparency and oversight and holding their management's feet to the fire. so can lee raymond go toe to toe with jamie doimon? i'm going down to tampa next tuesday to hopefully find out.

>> mike, we want to thank you. >> if jamie dimon was to leave, then the stock could fall 10% perhaps with a huge market loss. >> yeah. i put out a note yesterday saying that j.p. morgan market value could decline by $20 billion, if not only jamie dimon was stripped of the chairman position, but if he also left as ceo. is this bluffing? partially, but it goes to the point if you strip to the chairman position, maybe he doesn't stay as long. >> meek, we want to thank you very much for joining us today. >> we've been speaking with mike mayo and an analyst at clsa. here at the morgan stanley analyst meeting i want to keep you with one last thought. he was talking about the financial industry and he said higher bank capital requirements could hurt the economy because it would restrict lending. he encouraged regulators basically let dodd frank get finished first before he started talking about new capital

requirements. guys, back to you. >> thank you very much. mary live from the conference. >> today marks the annual commissions for charity day, an, vent that draws dozens of celebrities to work along with traders in order to raise money in our own celebrity televisions. bob pisani is live on the trading floor with two other special guests. good morning, bob. >> good morning, simon. we're having a lot of fun down here. here is the founder of btig and a great guy and a guy i've known many, many years. give us ten seconds. >> this is our 11th abnaul charity day for children where athletes and celebrities band together with wall street to support a bunch of really worthwhile causes and today is the celebrities day on the playing field and we've raised $25 million over the last ten years and looking forward to another great day. >> we'll talk to one of those celebrities. >> before i let you go. >> this is guy is one of the

great market watchers and this is the most hated rally that i've seen since i can remember. how much higher can we go? >> i think we're up 22% and mutual funds, we're still getting massive inflows and rotations from bonds into equity and short games are really being squeezed and you're having to stair step higher and everyone is being looking for a pullback that doesn't happen. >> we have miss america. mallory hagan, sorry, folks. >> mallory hagan is here, the new miss america. >> thank you. thanks for having me. >> she won six months ago. barely six months ago. what's the job like of being miss america? >> oh, my gosh. >> it's a full-time job. >> it is, it's very intense and day in and day out i travel and live out of two suitcases and i was coast to coast. i was in l.a. yesterday and in new york today. it's intense, but a lot of fun. >> you're still a student, fashion institute of technology.

what are you going to do with yourself after this is over? >> studying, advertising, marketing and communications and i'll go back to school in january and my hope is to become a tv personality. >> i know nothing about any of that, but the important thing is what is the charity? >> i'm here with children's miracle network and i'm an ambassador for cmh. may is for miracles so if you stop by costco, walmart, and it goes to benefit cmn does. >> tell us about what the charity does. >> it makes funds for children's hospitalses around the country and makes going to the hospital free of charge for kids around our country which is really great. >> where are you going go from here after you get your degree? >> what's the plan, what happens to miss america after the reign is over. >> i'm done in september which is great. miss america is moving back to atlantic city. i have a very short reign and i'm going to take a few months off and relax a little bit and in january i'll go back to

school. >> you were in las vegas for seven or eight years. >> coming back to atlantic city. >> coming back to the east coast. >> you're an alabama girl. >> i moved to new york four and a half years ago. >> how big this was for your hometown in alabama. >> it was huge. i'm heading back to alabama tomorrow. i have a homecoming celebration that will happen and it will be a 16-hour day and friday i'm back on the road again. >> it's amazings how widely watched it still is. what's the message of being miss america these days in this kind of era be, this kind of age. >> we're a scholarship-based organization. we give away over $45 million in cash and income scholarships each year. we are education-based and we promote science, engineering and math and children's miracle network. i change onfor child sexual abuse on the days that i'm not working for cmn and sponsors. >> the poise and professionalism. we're like a person, we work every day and we have to show up and be poised and professional.

you do the same thing going out on the road. >> mallory hagan. so nice to talk to you. >> thank you for talking to you. >> you don't a pick. >> have anyone for us? >> no. thank you for having me. >> i think she's just happy for having me. >> guys, it's a tough job and someone's doing it. >> bob pisani with the assignment of the day and thanks so much, and we'll come back to you later on. >> back to hedge fund titan david tepper who just a while ago on squawk said he's bullish on stocks, tapering the massive boshed buying program. steve liesman is here to walk through some of tepper's math on the fed. good morning, steve. >> do you remember the song "don't fear the reaper?" here's tepper saying don't fear the taper. i want to show you the quick math. the overall idea i want to tell you about is the fed will be buying much more picked income paper as far as the quantitative easing program that is being

made available by supply either the mortgage market or the federal supply. let's listen to why he says this is true. >> because of budget cuts and because of growth and economy and also because of fannie mae paying back money from the government, the deficit over the next six months is shrinking massively. >> the fed is not reducing its purchase. here ate plan right now for what the fed is going to do. it's going to buy $270 billion in treasury over the next six months and 270 billion of mortgages. and this is demand the fixed income of $510 million. we'll show you supply here and take a look at the next chart. new supply, zoom in here, 142 billion of new supply and no new net mortgage, man a little from fannie mae or freddy mac. their 5 ten bell onof demand

means there's going to be 368 billion of cash. if you could just zoom in on that number and that's the number that taper says is going to be money looking for a hope in the market these days. the result is a lot of money having no place to go, but perhaps the stocks, and the fed will be dropping down further. the next screen is the equity risk premium. this is the measure over the risk-free treasury rate. you can see it's already at a historic high now according to tepper's math, this number will go higher which means there will be more returns for stock investors than there have been over the risk-free rate. tepper says the taper won't matter. the math will still work if the fed buys, let's say half of what it says it will. so let's say it's not five or 10. say it's 250 billion, carl, tepper says there's a lot of excess fed were purchases out

there above and beyond supply. carl? >> that chart behind you though, steve, people earlier this morning still pointed to that 2,007 equity premium. >> 209. >> right here was the number at 2,009. a very good market buy, but by the way, it's not automatic because back in '74, there are different reasons why the equity premium may go up. alan greenspan has talked a lot about this number and something he follows very carefully. so he thinks it's all clear, at least for a while now. it's interesting if you get into the detail of what tepper's saying, he's saying the fed is going up and down and there are a lot of reasons the fed won't go with that. >> equally as important is that the fed will not be tapering. if you look at the journal and the minutes of the last meeting may won, they're clearly talking about having almost a creative

white noise with purchases with one month so there was never a clear signal as to what they're doing and they're changing the rules of the game, aren't they? my concern with tepper's ideas and the fed would not go up and down with the amount of supply with bills or coupons in the market. the fed will go up and down relative to the long and the medium term outlook for the economy. >> i mean, citing blue oyster cult. >> what other economics reporter does that? what other economics reporter does that? come on. >> we'll see you later. >> steve liesesman. >> blackberry ceo taking the stage at the blackberry world conference explaining what is in the pipeline now for his company. cnbc's seema mot dy. blackberry unsealing a new blackberry q-5 and listen in on what he had to say.

>> today we're unveiling this new blackberry 10 device. it's the blackberry 20537. >> blackberry calls this a youthful, fun, blackberry 10 device that will have a keyboard. it comes in a couple of different colors. it will be available this summer beginning in july in selected markets including europe, middle east, africa and asia, but that's not it, guys there was another big announcement that blackberry made as well. announcing it's makering an update to the mobile computing platform called the blackberry enterprise service 10.1. it's a solution that provides a dwiegz and application management including ios and android phones and that's huge. this platform will allow corporations to upload corporate email to employees' personal mobile devices which is a

growing trend and bring your own device to work. analysts say that this platform could be an even bigger opportunity than the smartphone vertical for blackberry? >> it's anywhere between 20 and $100 per person. what you're looking at is around a their 50 billion market and when you see everything associated with it. just a huge market. blackberry shares down on the day and keep in mind, shares had gained 5% ahead of the blackberry live today and the stock has gained 102% since november in 2012, so we'll see if heinz can continue to bring momentum. >> we saw it with new york twra and blackberry. >> seema mody at blackberry lives. nearly 10% of folks has had their phone stolen. they sent out letters to apple,

samsung urging them to find a solution to lower the incentive for phone theft. kevin mahaffey joins us from san francisco. kevin, good morning to you. >> good morning. >> walk me through what you think the a.g. is trying to do here. >> certainly. the overall goal is how do you reduce the incentivist deal-a-thon. there's no magic bullet and nothing we can do to solve the problems completely, but number one, educating people. make sure that when you're walking on the subway, down the street you effectively have the equivalent of several $100 on your hand or up to your ear, so making sure people are aware of surroundings. number two, the carriers in the u.s., so that a stolen phone in the u.s. can't be used on any u.s. networks. the problem with that is when a phone is in the blacklist in the

u.s., not all countries use the blacklist. so you can simply resell a stolen phone abroad and so what the a.g. wants to do now is to make it so phones can be remotely disabled so devices can be rigged remotely. so even if you take it to another country they can't work. >> that's where lookout comes in, i imagine. lookout produces tools that we work with carriers as well as users to allow them to remotely look at that device. make sure fa if the device is lost or stolen, it never gets taken out of the country and you can work with local law enforcement and get your phone back, but we've been working on this problem and i don't think this is the entire industry working together. >> apple already have a find iphone app that you can use to locate exactly where your phone is. isn't the bigger issue here and it was championed by the a.g. in

san francisco so you know this better than i that what we really need is a kill switch. nor, the big manufacturers not just being able to locate where your phone is, but to instantly essentially destroy it and therefore if you can do that, people won't steal it in the first place. the san francisco ag met with apple. my question to you would be is that because it cost $30 billion to replace stolen phones in this country for a year and the hardware makers are making an awful lot of money from the status quo? >> one thing we found in the mobile industry is great user experience is profitable. bad user experience is unprofitable. >> if it's easily stolen or even if it gets malwear that you are likely to switch care ors or search from an apple to motorola or motorola, and create the best business as possible and

building such a kill swith is a remarkably good piece of technology. the same kill switch could be a way that people can hack in and disable millions of devices. we have to walk, not run and do something like this carefully. >> apple does not make up the majority of some of these steps, right? >> i can't comment on the exact numbers, but android really is the big gorilla worldwide when we talk about mobile devices. >> probably a function of market share, but i've seen statistics saying apple is a third of the thefts. interesting. we'll keep our eye on it, too, kevin. thanks for your time. >> thank you. up next, we're tracking the media landscape on everything from gooing toll netflix from the mash who advised on the two mead why deals. head of banking investment and current lion tree.

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american bank ubs before opening lion tree. it's made a name for itself in the last few month with the recent upswing in media m & a working with liberty media with john malone's to way back into cable with the charter communications and of course, advising on one of the biggest deals of the year, liberty global's buyout of media. aryeh bourkoff. you're off to a good start. i don't know if you can keep that up. >> it's a lumpy business and things ebb and flow, but thanks for having me. ? listen. there may be another opportunity that may be sewn pep we have dan loeb goes and hand delivers a letter to the ceo in japan today saying, the entertainment business, we think, could garner much more value for this company

if it were spun off in part giving value to it. does that make sense? >> valuations have moved up a lot in media and across the whole market and a few companies have lagged. sony being one of them and others like vivendi as well and those valuations are significantly lower than the rest of the media conglomerate, when you look at sony with the valuation levels for three, four, five times. what would be the comps for sony? >> sony is a combination of a lot of different companies. >> i'm talking about sony entertainment, i'm sorry. >> you look at companies that have music profiles like warner music and the stone studio that looks like a paramount or universal studios and you also have the tv production business. so those are very attractive businesses and could have a much bigger private market valuation as getting reflective in the stock today. the stock's trading at 20, $21 per share and it's worth $12,

$13, their 14 per share. >> when you at least pencil it out based on pure multiples, that's possible. that's taking the market multiples and the stock is trading like the consumer electronics business is trading. people have talked about sony enter inment being -- you know more about this than i do. is there a possibility? >> it ultimate owe is what the board and the company wants to do and what's best for their shareholders. the board has a new board that has possibilities with what dan lobe. sony overall may be part of that team. viven vivendi, iac, you believe, are also similar? >> these are companies when you

look at the overall landscape and companies like time warner, discovery and news corp. and viacom, liberty, all trading at very good valuation. >> very high multiples right now. ? double-digit multiples. look at the companies that are trading in and lagging on valuations like iac and aol and sony and vivendi, you wonder what the catalyst is to get those stocks moving and some of that could be a break above the assets and vivendi has six different assets inside that are all different, telecom and media don't necessarily belong together and that is the viacom, cbs split, news corp. split and liberty split all trying to find different valuation truances. >> you sound like you're trying to start to get an activist campaign going in vivendi. i haven't heard a name although there has been activity in the past. the french are difficult and so are the japanese. it's not easy as looking at the math and the sum of the parts saying things will correct themselves based on an activist. an activist was trying to get

into japanese companies in the past and france and it's know as easy with u.s. companies so we'll see how this all panned up out. ? i remember you back then and the adelphia days where you helped to unearth was fraud there. what are you seeing in terms of balance sheets? we talk so often about cheap money. i know that motivates john malone who i sat and talked with recently who is an important client of yours in terms of buying now and being able to lever up. is that becoming more of a theme that you're seeing? >> yes. i would say that there is a certain cycle to the deal flow in the marketplace and obviously, john malone is one example of someone that is being opportunistic around that dynamic. the equity markets are at very strong valuation levels and the? flows are coming and rates are very low. default rates are at all-time lows right now for the markets, but we haven't seen markets

really push the envelope in leverage levels and being aggressive in capital structures because of a certain level of caution since 2008. >> wouldn't we want that, though? >> we may start to see that pre-2007 and you may see companies go back to seven, eight, nine times leverage ratios and you can see that given the robustness of the marketplace. >> do you think they will? should i want that as an equity investors? shouldn't i hope that they continue to learn the lessons of '08 and '09? >> of course. it's about being company specific and situational specific, if there are assets that could be accumulated with low interest rates that you can deleverage given the good trend lean. >> so media companies do produce a lot of free cash flow. those companies do have some strong, predictable growth around broadband and you can take on that and deleverage off of that growth.

other companies like digital media you would never see it leverage that month because of technology companies and maybe less out, but certainly there's a lot of room between the equity market valuations and where the debt is currently levered and there's cushion there to be levered a bit. >> we're there. >> we're still trying to figure out the winners and losers in this new media world that we're a part of now. some people looked curiously at mr. malone's decision to invest in charter. broadband went over the top. it really seems to be something that may emerge when you have netflix and other who is wonder if the consumer will be able to buy past the cable plant entirely. >> the cable have faced a wall of worry around the future of the business for 20 or 30 years between the satellite threat and the telephone threat. they're always reinventing themselves with new products. i think john, on your interview, talked about how cheap it is to

upgrade the plan. i think it can be utilized in many ways we haven't seen yet. >> is it a consolidator? >> we'll see. >> takes a pass on the the key question. they have been as busy as any investment bank out there. noir not as big as the other guys. simon, back to you. >> thank you, david. we'll pick up the theme of oodles of cheap money with the san tetelli exchange up next on . everything. everything. everything. everything. everything. everything? [ all ] everything? yup! with the new staples rewards program you get 5% back on everything.

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. welcome to the santelli exchange and "squawk on the street." everybody is trying to handicap the way of the world and how the central banking activity will affect markets. everybody loves him. many people on here were glued to the screen early in the morning doing outtrades. but i liked his reference to the

movie "my cousin vinny." i remember being a pontiac car guy. as soon as i saw the skid marks i knew the movie was wrong. that ended up being the key issue of the movie. but people that were familiar with the trad marks early in the movie knew early. it's similar to the game central banks are playing. some out there know two things. if you put v an unlimited supply of gasoline the fire will get bigger and bigger. there's others who say it's more about where does the gas come from? who pays for the gas? how long do we have it? how long do we get to fire the bid? and if you don't have an unlimited supply of gasoline, what happens next? i think that's very appropriate. one area of the globe that i think that the fire is very important to watch is japan.

we all know what their stock market st doing. we all know what the currency is doing. i want to concentrate on the jgbs. you'll see it's rushed up to 86. boy, you talk about markets in a bull run tjgb is it. okay. now let put on information from the bank of japan. from the bank of japan we learned the end of last year they had close to $950 trillion of outstanding jgbs. that's 9 $.3 trillion equivalent. okay.

the economy is roughly 4.5 trillion. now i ask you this question. what happens in japan where you have households probably own 3%. insurance companies are big. banks are big. think about it. banks are big as well. what happens if the market starts to tip and see 1% or 1.2. i think there will be a big liquidati liquidation. the money has to go somewhere. no matter where it goes, it's sfil a game. i don't know about the ultimate outcome. we know in the process it seems easy. we don't know what day the process ends. >> nor do we know where the money is going. great point, rick. thanks so much. we'll talk with the ceo of

aereo. they remain in legal battle with broadcasters. straight to the source a little later on. my mantra?

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>> sure. >> it's so overwhelming. the economy is getting better. autos are better. housing is better. they can't find enough people to work in housing is the only thing holding back right now. >> april import prices fell 5/10 of 1%. exactly as many were expecting. >> everybody is waiting for gaps to be filled. everybody thinks if it goes up further it has to go back in. but the fed better cool things eventually, and when it does it will be better. the japanese are flooding the huge economy. flooding the world of liquidity. >> they asked him what is the best place to be. they said every plals ask the best place to be. >> like to see a little bit of a

hesitancy. taking it one step at a time. >> not sure the directors showed how tough they could be in holding management's feet to the fire. they focused on the return of tangible equities. they said it's about the turns, not the size. >> good tuesday morning to you. we'll start with some breaking news from the new york fed on household debt. hampton pearson is in washington. hey, hampton. >> how you doing, carl? in the first three months of this year americans continued to improve their household balance sheets. household debt declining $110 billion from the previous quarter with reduction in housing-related debt and credit cards leading the way. total debt falling to $11.2

trillion. down over the previous quarter. more than a trillion dollars below the 12.6 peak in the third quarter of 2008. home equity loan dlin kwinsy rate falling to 3.2%. ditto for c.c.s. 10.2% is if first quarter delinquency rate down from 6%. the most significant increase, student loan debt rising to $986 billion total. the new york fed also saying more and more of the housing mortgages 30 to 60 days delinquent are becoming current and mortgage originations are up. >> that is mostly good news, hampton, i would have to argue, as we take that into account. thank you very much, hampton

pearson. the dow is up 84 points. moving to apple this morning and the growing smartphone reports. apple still lags samsung. they also fell to 18% in q1 compared to 22% in the third quarter of last year. this as david this morning on "squawk box" talked about apple needs to do better on innovation. >> a little bit below 400. i am waiting to hear what they have to say as far as do they have something revolutionary in the horizon? or something evolutionary? if you don't have the jobs around for the revolutionary sort of thing, do the evolutionary sort of thing and you can still have a very good company that gets better. now if they done do either, we have a problem. >> let's bring in tony.

a columnist for the wall street journal joins us as well. he's essentially asking the same question we all are. is this evolution or revolution? >> absolutely, carl. i think that's the key question. apple is probably a pretty good investment. meaning maybe the stock can get to 550 if they don't really create new markets for themselves. if they do, if they're able to create new markets or move into adjacent markets, then we could see little material from there. think could see growth over the last two or three years. >> we are a few weeks away from the developer's conference.

another opportunity for them to give us a clue as to what the fall will look like in terms of products. >> we have known for a while there may not be great revelations in the near term. they have to come up with something this year in 20 #. when you look at the budget it's really under $4 billion. which is greater than years previous. still relatively small. i would love to know what tony thinks about this. the real opportunity is less of the smart watch. which is perhaps a good novelty and really getting into the living room with the cable tv box product. we've heard so much chatter about it. nothing ever appeared. absent thater we are stuck waiting for evolution or revolution. >> dennis, you make a great point. come out early with a product

and end up with maps, right? which was a huge black you. wait too long and you're essentially called, but we're calling them now. it's slow to innovate. where is that balance? >> i don't think there's any one perfect point on the scale. apple got it wrong on if front end and wrong on the back end so far. they know how to develop products. they're trying to get into new areas that require a range of cooperation on the eco system that we're familiar with. when i think about new market opportunities for apple financially i think they're addressing the low end of the smart phone market that is 400 million units a day growing to 800 million units over the next three years. the second opportunity is coming out with a device.

much like the iphone combined the functionality of digital cameras and navigation and music. through the financial lens that i look at, those are the biggest opportunities for apple. from a strategic perspective, something in the living room would be important. because it's really reaffirming for the entire eco system. they have people's music. they have people's ipad. they have folk's computers and they have the iphone, but they don't control the living room, which from market data we know is where the majority of households spend their time today. and so whether that's a physical device or whether it's an apple tv box like they have today or whether it's a cloud base service that apple could offer through icloud, i'm not sure it

really matters. i don't think the financial impact is that large. but i think that lock in and strengthening of the eco system would be significant. >> yeah. the stickiest part of their business, some may argue. that consumer who will do anything but divorce himself completely from all of that material and all of that content. guys, we have to wrap it up here. a busy morning. thank you so much. got news this morning on blackberry. seema mody has that. >> blackberry is making bbm popular to all users. it will be free to download. bbm channels which is basically a social engagement platform. they were showing videos. it looked like facebook and twitter version. >> thank you so much for that, seema. and billionaire hedge fund

investor calling for sony. good morning, john. >> good morning, carl. this push to get sony to sell some shares in the entertainment business, not necessarily spin the whole thing, becomes pivot l pivotal. i spoke tw the head earlier this year about the tension japanese firms are facing. in a rare interview he said many of his peers will try to figure out how to transform from manufacturing to more software and service companies. and a big part of that concern. >> -- quite good in japan. especially our corroboration skills is quite good. but the difficulty is the communication skill. especially in english. that's where we have to somehow make it better. >> exactly as he was saying.

a big part is getting majority and better input from cultures outside of japan. sony is ahead of a lot of japanese companies on the piece because the entertainment business in the u.s. and the gaming business sony does not want to completely leave them off sochlt a challenge is presenting this in a way that seems like a win-win. they don't want control from the outside. former chairman and ceo, it was rocky in part because he had an outsider's perspective. he couldn't communicate well enough to take charge. they have a new generation of japanese leader they hope can bring both. carl. >> yeah, and a central bank that definitely has their back. at least for now. thank you so much. john ford out west. david faber has returned to post 9. that can mean only one thing,

news. >> yeah, we have a little news on dell to share. carl icahn. we've also been awaiting earnings from dell that are expected to be released a week from today. sources say the earnings will be given out sooner than had been anticipated. dell will report the earnings this thursday. in part they have decided to do so because the bottom line that the company will be offering enough that they felt given speculation that has been out there against the nature of the earnings and the things we discussed here, it was better to get them out to the market as quickly as possible. it appears the bottom line will be below expectations. the top line will be consistent with expectations. dell has been fighting for market share. that's taking margin in, so to

speak. that is the case that will be reported on thursday. top line okay. bottom line off. if you were to annualize the income that we will see for the company to be reported we will get to a number well below $3 million. the fourth quarter is typically stronger for many pc makers. nonetheless, the trend points to below $3 billion annual income operator. well below, i'm told. that's a key number, carl. last july they were looking for 5.6 billion dplrz. it doesn't necessarily mean it will imimpact them. they tend to focus not on pcs but other businesses that thoef. it shows incredibly competitive era where they see the margins

erode. how often have you seen a model change the way dell's has as the deal is in the works or is it a matter, as you say, of icahn and others skating where the puck is going. as gretsky may have put it. >> they are doing that. your point is a good one. it's really a short amount of time since they took up dell's offer in the late summer. you have watched deterioration continue atted a rapid rate. we'll get another sense when that company reports earnings. >> a stock that kted differently than dell's so far this year. >> absolutely. and we still have two competing

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>> 25 products. >> we do have 25 products. it's about categories. we're building a brand. >> a small business needs to have a focus. i'm not sure that i can say that you do. >> have you ever heard of a term called overassorted? >> i didn't want to make the threat but -- >> that's a preview of cnbc prime's all new competition series crowd rules where three small businesses try to convince a panel of exp eerts that their business deserves $50,000. kendra scott joins us this morning on post 9. it's a pleasure. >> i know. really. i'm not that mean the whole

time. >> well, we'll see about that. we have a long segment to get through. the new york post reviewed it yesterday and they loved it. >> it was a nice review. that's all you can ask ahead of a news series. >> what is the challenge going into this? what mistakes are being made? how does it alter your own performance as a judge? >> you'll see the mom and pops. the family owned businesses and so many of them come and go into something that they love. they may not have a clear plan ahead of them. we've seen them change and say, look, i need to make changes. >> and they go for a passion of a particular idea, but they don't have the business skill set that you need to back them up. maybe they're not good at marketing. maybe they're not good at accounting. and we see entrepreneurs that

should bring in help. >> kendra, we have seen a lot of competition shows. how does the crowd dynamic change all of that? >> it changes everything. pat and i are only two votes out of 100. the crowd doesn't vote the way we vote. >> they call us experts. >> exactly. some people will vote with their heads. they're really going to look at the business, the numbers. others vote with their heart. they just fall in love with the people and they want to give them this prize money. >> maintaining that crowd mentality do they decide, everybody, sort of the largest vote wins? >> it's winner take all. >> you don't have an extraordinary veto power or anything? >> there's nothing like that. we steer the crowd a little bit by the questions we ask. we really want to hold the companies accountable. >> and there have been several times that i was floored a at

the results. you'll see me with my mouth dropping. >> 50,000 for the companies is a game changer. >> i know here we're talking about billions of dollars every day. when you take it down to small business. that's $50,000 they don't have, they can't borrow, they don't want to give away the equity in the company. >> i'm a small business owner. i started with $500. if somebody had written me a check no strings attached, it could have catapulted my business so much faster than i was able to do it on my own. >> it's that extra employee you can hire. the little extra expenditure. >> additional production. there's so many resources that you can use this for. >> the show is such a great fit for cnbc. the network speaks business and understands business. people in your family who are not as eager are going to enjoy the show. >> there's 29 million small

businesses out there. so to see that focus on these businesses is really awesome. >> i love it. we have a stack of papers here. >> the morning routine on tv. thank you so much. congratulations. we'll see you tonight on the air. crowd rules tonight premiers on cnbc. when we come back, aereo is planning to launch in two new cities despite threats to sue from big broadcast networks. the ceo will join us live to address the controversy and tell us what is next for the company when we come back. all business purchases.

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we're offering $4 million dollars in tech scholarships for qualified new students. learn more at devry.edu. welcome back to "squawk on the street." i have a guest, richard farm. welcome, richard. >> how are you, rick? >> very good. my last segment, i was really

talking about how, in my opinion, eye opening moves in jgbs, in a market that's been rather low volatility for a long time, once april rolls around and we get out the bazooka, we have one sex where the range is 32 to 65 basis points. we're approaching 90 basis points. can the japanese keep this animal contained in terms of rising yields? what are your thoughts? >> well, they still have a long way to go. you're talking very low yields in japan. but this goes to show you when a central bank wants inflation it may manifest in places they may not necessarily want it. they have debt of 200% of gdp and yields are starting to break out to the upside. on a 30-year jgb we still have a lot to go where qe is starting to get priced in. on're areas inside of five years, we're seeing multiyear heres in yields in japan now. no one knows where this is going

to go now and we haven't begun to feel the inflationary effects in japan yet. >> many of the real good market watchers believe that's what you want to watch if there's any type of fire alarm where you hear an early warning. now let look to europe. many believe the yen relationship strengthen iing an weakening, those currencies doing better will be a huge trade issue. what are your thoughts about the japanese yen and the economy and competition? >> that is a key view. first off, with all the money printing in europe and the bond buying, the european economy doesn't look much better at all. it looks like we're in recession in europe. it will take a few months to

year where you see the impact. but you're going to start to see yap these competition for manufacturing of the european countries. and i worry that's going to be another leg down for europe. and i would think that if you're the european central bank you're already planning some sort of response to it. it seems that they're letting japan get away with it longer. >> you know, there was a royal bank of scotland report not that long ago. there was an auction gobbled up like it was the last food on the planet. it seems to me the japanese and carry trade, all the issues are dpeflt finding their way into what was or did have cooties, do you continue to think that paper will be sought after the way we seek after corporates? >> so long as there isn't a default risk in europe, you can buy the paper. the question is when does this

reemerge? greece gets in and sends it back to europe. there's no benefit to greece to getting the bailout. it's just money getting circulated back to europe again. the question is really, rick, when do the greeks take a step back and go, wait a minute, does this deal really make sense to us? >> listen, rich, we have to run. we're always running out of type. the mns ministers of europe are meeting with topics just like you're discussioning. so viewers and listeners, keep an eye on the tapes. rick, more time next time. thanks for being our guest. carl back to you. >> bell are about to sound across europe. ooel get the details here. back in a minute. mine was earned in djibouti, africa. 2004.

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the european market is closing now. >> and that has lifted a little bit to the green, rather than the red. the industrial was better. it was the fact that wall street has made solid gains that lifted this market out of negative territory. back toward the highs. the other thing is spain had a successful loan offering of the 10-year debt. it looks like it are be closer to 7 billion your owes. and that's stopped the selloff that we had on certainly spanish

debt and other debt around the world. you can see the way in which the yields have been rising here. but that has now halted on today's session as a result of the auction. essentially they were making way, i guess, for that paper. you have seen a selloff in bond markets around the world here in the united states since the beginning of the month. we went from 1.63 to today's 1.91 in that period of time as well. when you close trouble banks it would go right across the euro zone. germany wants it solely at the national level. over 100,000 euros cyprus style. so bank of the union isn't

coming. the germans are not on board with it. don't get sidetracked. they are not going to go that far. >> they're talking it to death. that's for sure. bertha coombs on the floor watching the big board. >> hi, carl. tuesdays are continuing to be good. this one looks on track if we continue at this pace. we have a broad rally here. discretionary is strong. financials are a strong point in part because of david's comments this morning on "squawk box." he says citi today at a new two-year high.

and health care is very strong. biotech putting in stresh highs. after they accepted the application for a long term treatment. and today the whole issue of genetic testing for breast cancer on the front burner with angeli angelina joe's lee op-ed in "the new york times." myriad could see a challenge on the the front with the supreme court set to rule on its patent later on this session. >> there have been big patent rulings in the past 24 hours. that's for sure. when we come back, the trading form is swarming with celebrities. we've already seen pisani with miss america. not sure how we're going to tap that. first, despite the controversy surrounding the streaming company aereo, it's launching in boston. the ceo will join us live and

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is this stock's rally about to crack? carl, we'll see you in about 20. >> sounds good, scott. the bloomberg snooping scandal continues to widen. today the bank of japan is seeking details about which information bloomberg allowed journalists access to. we have the latest on that continuing story. >> the bank of japan joins the european bank. they are reviewing how the journalists used proprietary information. certainly the first one that brought this issue to light. the second is security practices and trade data traded across the various platforms. news yesterday that thousands of private e-mail messages were inadvertently published online by a former bloomberg employee. the messages were private conversations that were used in a effort to tailor the products.

the banks consented to bloomberg's using of the message but they were not to be made public. he called it a clear violation of our policies. it's also a variable trading platform, creating trade book in 1996, to service the transaction clients were making. it's registered but unclear what steps are being taken in washington to ensure the areas are secured. in the meantime, this ceo said today he would start a blog to combat any insecurity over breaches of data. the banks recreating the services in house are nascent at best. traders are going to be unlikely to give up the very valuable terminals. >> they do seem to be locked into the service. it appears to be frustrating to some if you read the time piece. thanks, kayla. there was another spy scandal brewing. that's the associated press

reporting the justice department spied on phone lines used by several reporters. >> hi, carl. the associated press executives are saying they never saw anything quite like this in their careers doing the first-amendment stuff. they're saying what happened is the department of justice went after about 20 different phone lines, including personal phones, home phones. cellular phones, main office lines at the associated pres. all as part of a leak investigation. here's the state from the president and chief executive officer. he say there is is can be no justification for an overhaul of the associated press and the reporters. these reveal communications with confidential sourtst sources across all of the news gatherings undertaken during a two-month period, provide a road map an disclose information about ap's activities and

operations ha the government has no conceivable right to know. a lot of first amendment critics here, carl, are saying this is an overbroad reach by the department of justice scene saying it as a chilling effect on reporter's ability to gather information about the government. but we're likely to hear more from the department of justice itself. eric holder has a news kompb scheduled at 1:00 today. you can imagine the reporters will try to get a statement from him about what exactly happened in all of this. >> between that, the irs all front page stories. >> it's really a weird week in washington. >> when we come back, the ceo of aereo will join us on cnbc and talk about their plans to expand to two new cities in the united states. buzz what does he think about the controversy surrounding his company? we're back after a quick break.

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aereo, the platform that allows you to watch live television online, currently just in the new york city metro area is expanding. the company, you may know, has sparked plenty of controversy with the network over the legality. just last week aereo filed a lawsuit with cbs, skl a federal court to declare the service

legal. here now is chuck, the founder and ceo of aero. it's good to have you back. good morning. >> how are you? >> good. out of new york, into boston and atlanta. characterize the size of the expansion right now? >> well you know about 15% or 20% into the expansion activity. hopefully we pick up the pace. we announced about 22 cities we were going to build out in the first half. so the team has been extremely busy building those out. and a lot of work. >> even as you do that the debate continues in the legal circumstance lgs. obviously had to direct a question about aereo to him. here's what he is saying. >> way too much has been spoken about aeroe and written about aereo. it's not a serious threat to us. we think it's an illegal service. we think it's taking our signal. they're not just passing it onto people.

they're charging people for passing on our signal without giving us any money. we think that's illegal. as they go into the marketplace we will challenge that as well. >> so it's not a serious threat. some allege your subscriber base is tiny. how do you respond to that? >> well, you know, i would submit that if it's not a serious threat, then people should stop caring about it. people obviously care, and i think for a very important reason. aereo is the first company to really create an alternative for consumers. these are the early days. we are extremely happy with the subscriber attention we get, utilization. the demand in all of the market is exceptionally strong. so happy all around.

that is one of the small luxuries that a private company has. >> enjoy it while you can. they have suggested they are willing, if necessary, to change their models, go to cable in order to run your model out of town. what would that do to you? >> before we go down that road t issue here is the consumer. the trend is towards choice. the trend is towards consumers picking and choosing what they want and areas of really interesting technology that starts the dialogue sochlt the idea you will say, well, sorry, the spectrum that we have granted by you, the consumer, we are going to abandon and not allow you the choice and not let you have an antenna pick that up

seems like a very weak argument to me. i think there will be significant challenges going down that road. not to mention a tremendous business challenge in doing that. so that's not something that i focus on and worry about too much. my goal is to create good technology that people like. make sure they are happy with it. and be on our way. >> and mention choice, chet. clearly the networks are not going to standstill. this week we got news that disney abc is going to launch watch a brk c. essentially a live streaming alternative to their network. doesn't that put severe strains on your own growth? >> so the important thing to note, the whole concept of the sacred cow, the important thing to note is the sacred cow is the bundle. all these efforts are still not consumer friendly from my per spect i have, because they still require you to have the cable bundle or any kind of bundle.

so until true choice emerges, which is the consumer has the ability to pick and choose what they want to pay for, i don't think these attempts are really true alternatives or credible alternatives for the consumer. consumers aren't stupid. they understand that if if you' going to have somebody pay $200 for a monthly fee and you watch seven or eight channels there's not a value proposition that makes any sense, whether or not you can watch on your ipad, right? the aereo is a first approach doors moving people away, creating an alternative, giving them the choice to say, hmm, if you watch less programming than average people watch, you know, seven or eight channels, why do you want to pay for 500. make a choice. >> aside from the bundle question, chet, is there any doubt in your mind that this battle between you and the big media companies is, in fact, going to go to the supreme court? >> i have no idea what the trajectory is going to be. i think, you know, my focus, and very stepwise person.

first step was make sure we could get the technology to work in new york. step two is expansion. deal with all the challenges as they come. and you know, if you keep your focus on customers and products, that is my opinion just takes care of itself. >> chet, good to have you. hope you'll come back soon. >> so do i, thank you. >> joining us from aereo in atlanta tonight. when we come back, we're live at the btig annual charity day where celebrity traders busy at work on the trading floor. there's one celebrity right there. mark teixeira and bob pisani. (announcer) at scottrade, our clients trade and invest

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btig is holding its annual charity trading day today. it's a star-studded event and our pisani is there with yankees first baseman mark teixeira. hey, bob. >> and so many fine people coming through here. michael j. fox, bobby valentine, mariano rivera standing behind me. joe torre, dwight gooden, rex ryan, eli manning is going to be here a few minutes from now. right now here he is mark teixeira first baseman for the yankees. pleasure having you here. how's that wrist doing? >> doing great. should be back in a few weeks. >> end of may? >> hopefully end of may. >> they're doing pretty well without you, i may say. no offense at all. 24-14. >> we're doing great.

so proud of the guys. pitching has been great, timely hitting. it's great to see guys stepping up. guys that some people want to write off but when you put those pinstripes on, magic happens. >> 24-14 is that right? >> first place. >> american league east. >> first place. >> where do you think we're going to get off the rest of the season? >> i think it will be better. we have guys coming back on the dl. curtis granderson, myself, derek jeter, alex rodriguez, kevin youkilis. a lot of guys that hopefully will add to the winning streak. >> you injured your wrist. a little tougher coming back now. 33 years old. takes a little longer. >> a lot of work to come back. but the wrist feels great. it's one of those, an overuse injury. i was just swinging too much in spring training, and injured it. but hopefully, like i said, be back in a few weeks. >> tell us about the charity. everybody, of course, every one of the celebrities is representing a specific charity. millions of dollars being raised today. tell us about yours. >> first of all, thanks to btig

for having us here today. i'm here for harlem rbi, a group that's been around for over 20 years. we serve 1200 kids in east harlem, school, social skills, tutoring, and we get to play baseball and softball, too, and that makes it a lot of fun. >> there's a lot of mentoring that goes on. not just give them a bat. >> mentoring is so important. educational program. we just happen to have fun, as well. and, you know, 95% of our kids go to college. 100% graduate from high school. and the statistics are great. especially in a part of east harlem where 50% of kids drop out of school. >> and you see them afterwards. you go after school. you not just teach them baseball but teach them life skills, philosophy, attitude. we've been talking about this for the last half hour here so you're summarizing. >> it's 24/7. it's after school, it's in the summertime. we're really building the leaders for tomorrow. >> thanks very much, mark teixeira. always a pleasure to see you. dwight gooding is here. mariano rivera behind me.

we'll talk to all of them throughout the afternoon. very good cause and a lot of charities raising a lot of money. >> that is a great cause. thank you so much bob pisani at btig. today's million dollar minute, size matters. you may have not have heard of the mega diamond nicknamed big mike. why this giant rock is expected to fetch more than eight figures. >> this is the mega diamond. >> also known as big mike. >> we started saying this is the michelangelo diamond like a piece of art that michelangelo would have made himself. then we started calling him big mike. >> shiny rocks don't get any bigger or better than this. >> this is a 101 carat d colored flawless, the best diamond offered for sale in auction. >> in its rough form the stone was a whopping 236 carats. >> it took 21 months to polish the diamond. the polisher had to lose 135 carr eds off the rough diamond to sculpt this rock. >> when big mike hits the auction block he'll command an

even bigger price tag. >> we expect it to realize $20 million to $30 million. >> because this will be the first time this mega diamond hits the market the winning bidder also gets to give it a new name. >> you can sort of christen the diamond, and it takes its place in the ranks of the most famous diamonds in the world. >> wow. robert frank joins us this morning from cnbc headquarters. we've done cars, big houses. i don't know that we've seen anything quite like this. >> definitely not a diamond this big. investors are now seeing what wealthy women have known for centuries. which is that diamonds are a really gore forrer of value over the long term. diamond prices more than doubling. and we've seen recently that diamonds have sort of been part of this huge collectible boom where people are looking for a place to put their money and diamonds are a big part of that. >> yeah. we had to give it a gender. any idea where the term mike came from? >> michelangelo. it was so perfect that it

reminded them of a michelangelo piece of artwork so they named it big mike. i guess whoever is going to buy it is going to give it a new name. >> comes with the price. you get to pick your own name. >> that's right. >> tell me this is not meant to be worn. is it? >> you would have to have a really strong neck to wear this necklace. i mean, it's 100 carats. it's just astounding when you think about on a necklace or i guess that's the only place you could put it. yes, someone will eventually wear this diamond and i'm sure we'll get pictures of it once they do. >> why, robert, we talk about assets that are not going to lose their value. real estate makes sense. cars sometimes make sense. why has the value of jewels held up? >> especially ones that are really rare. now white diamonds, this is a white diamond, usually are not considered like investable grade like pink diamonds or yellow diamonds or the color diamonds. this one is the size. they just don't find diamonds this big originally with more than 230 carats so it's the rarity, the fact that it's got

good provenance, it's been checked as the real deal. it's the rarity and the quality and collectors over a long term love those two things together. >> talk about hard assets. doesn't get much harder than that. thanks so much. great spot. >> thank you. >> dow is up 84. keeping eye on the vix as well. wapner and the halftime. all right, carl thanks very much. welcome to the halftime show. let me show you on the wall where we're in the midst of a nice rally on wall street. a look at the dow up nearly 83 points. s&p and nasdaq firmly in positive territory, as well. here's what we're following on the half. land of the rising trade, with so much smart money betting big on japan. what's your best way to play it right now? getting testy over tesla. two of our traders on opposite sides of this big mover. now they're going to square off in one big debate. first our top story the tepper rally. the hedge fund heavyweight betting big on the marke