apps guys. >> they said the same thing when netflix rolled out. >> i don't want to watch nerds developing apps. >> they're doing deep data to analyze every celebrity a person likes. it's a no-brainer. >> jon steinberg, thank you very much. that's it for today. join us tomorrow. now it's time for "squawk on the street." good morning. welcome to "squawk on the street." our special coverage of twitter's initial public offering. i'm carl quintanilla with jim cramer and david faber at the

new york stock exchange. twitter finally going public today, pricing 70 million shares, $26 each. that's above the expected range of 23 to 25. company will raise at least $1.8 billion and trade under the ticker twtr. the ipo values twitter at 14, $18 billion that, number still to be determined. we'll talk with twitter ceo dick costolo right after the opening bell, a lot of other special interviews throughout the morning. you've been tweeting. how meta is that about just how overallocated this is? >> i did just about ten minutes ago, speaking to a number of hedge fund managers this morning, who all of course are disappointed in their allocations but not surprised. but for 2 million you get 5,000. you put in for 7,000, you get 10,000. but they've also been providing color buy as you might expect the underwriter goldman sachs. i've heard the deal is about 30

times oversubscribed, which is a nice amount. and that the top, you know, ten holders got 50% of the deal, the top 30 accounts got 75% and 300 were shut out entirely. that is you put in, you got nothing. we'll see how the allocation goes. it certainly speaks to a very tight deal and one i would assume when you hear those numbers, jim, that's going to probably go up after it prices. >> let me ask you because you've got data i don't have. did anyone get enough to be a starter position so they will come in the aftermarket and buy more, great quarter position, half position, buy the other half or did everyone just get a flipable amount and it's not worth it and retail is going to get fleeced? >> the people i spoke to this morning all got what i think they're going to just flip. they all seem very kind of depressed and unhappy so i'll just sell it back. what's the point of 5,000, 10,000 shares, what am i going do with that? >> no offense to anthony or

twitter, we have to see what happens. you wanted to get a fidelity, fido, big dog, to get them to have enough to come into the market and buy and have a steady after market. you do you don't want a 1995 situation -- >> these are such small allocation, jim, we're talking about such a tiny amount of stock that it wouldn't seem to matter when they're selling that. i don't know what the fidelities of the world are getting. you're talking 35 million or 40 million shares going to top-ten accounts. they very well may not be selling. >> so can we draw any early guesses as to how the stock will behave given what david just said? >> i think they wanted to open at 30, 32. what has so often been the case when you have retail -- i'm not

slagging retail, is they lose control. when goldman loses control because of retail orders, then it's just free for all. we don't want a free for all. people at home should recognize there is a place that is too high. a lot of bullish people this morning, a lot of people saying this is the new new. linkedin is a new new it still went down after a few months later, zillow was, google because they priced it in some bizarre way of auction was not a hurtful offering. is it wrong to say be careful? >> didn't facebook end up in the hands of a lot of retail? in this case, isn't it a good thing if it doesn't initially? >> the last this evening facebook, the big retail offices, if it put in for stock suddenly got ten times allocation in some cases, when i look at the things that killed our business, and, by the way, our business is a little more

bund except for days today, it was flash freeze, it was facebook, it was flash crash. that said this is a damage asset class, it means nothing. i'm not going to risk my money on an asset class where i can lose this kind of money in a day. >> from an optic standpoint, for those who don't normally watch the stock market, today is the day. exchange for capital markets in johnson, for equities. >> one of the things you've brought people attention to is "usa today," which is on the coverage here. "usa today" has unbelievable coverage today, twitter or fool's gold but twitter got on the front page today. and that says everything. >> yes, it did, along with blockbuster closing all those stores yesterday. >> the irony wasn't lost, which is blockbuster in the 80s is no longer an extent in terms of bricks and mortar and now you have another unascended --

>> don't invest in irony. i got in the business at dow 1,300. when we got to dow 1,500, it was a great top. then we went to 1,800. top, top, top! let's be careful of that, too. >> it's going to be an interesting day at the exchange. bob pisani joins us i think from post 8. >> carl, i'm excited. this is an historic day for all us. you've seen me reporting from the crowd, from the outside. not today. we are inside the twitter post where it's going to be trading. scott cutler, the head of ipos is going to join me for a blow-by-blow description, how do you build a book for an ipo, how do you determine the price, how do you determine how many shares you're going to sell? officials are sitting around trying to figure out some

things. at 9:30 we're going to step outside, cultler and i and stand here next to the crowd and explain exactly what's going on throughout the day. they've asked me a lot about when it's going to open. nobody knows. the general feeling is likely some time between 10 and 10:30. if demand is much higher, it could be later than that. it going to be a great day. >> i look forward to talking to you a lot more in a few minutes. let's go to the left coast. our julia boorstin is outside the company's headquarters in san francisco. julia, good morning to you. >> good morning to you, carl. right now dozens of twitter employees are gathered in its cafeteria, they're eating breakfast and watching cnbc on giant screens that have dropped from the ceiling. you're seeing some twitter employees walk in now. this is unusual. it's only 6:00 a.m. here. usually employees don't really show up, the office doesn't really fill up until around 9:00 a.m. they're coming in about three hours earlier than usual because they can't wait to see what's going on. now, the company says it does

expect to be pretty much business as usual but based on a tweet that we saw of the employees already congregating in the cafeteria, we expect a lot of the morning at least to be spent watching those giant screens to see the stock trading and also ceo dick costolo's live interview here on cnbc. now after costolo leaves you carl at the new york stock exchange, he's hitting straight to twitter's offices in new york to meet briefly with employees there. then he's going to jump many on -- jump on a plane and head back to san francisco and he should be here at 4 or 5 to meet with employees. we haven't seen anything from the chairman or other members of the team. but jack dorsey's dad tweeted a congratulations and richard branson, an investors, tweeted a

congratulations to the whole team. i'm very surprised, carl, by how many people are already flooding into that office. >> julia, we'll be coming back to you as well. >> we'll also listen in by tracking the hash tag twitter ipo. we'll be streaming some of your tweets throughout this program this morning. we invite you to join in on the conversation. use that conversation, it's a good one. #twitteripo. what is the best harr tag you'd use to describe street? >> the ecb cut its interest rate to a half to a record low. and here while jobless claims fell last week, the news flow in

the past hour has been unbelievable. >> this is the number of disappointing quarters that i followed last night and this morning, and this is the number of better quarters, okay? >> wow. obviously a lot more disappointing ones. >> and it just a parade of disappointment, whether it be whole foods, whether it be qualcomm, fairway, gees, noodles and company. >> yeah, what happened there. >> that's the day that jcpenney has comparative comps. >> tree house, beezer, home away did well. that's really it. >> you mentioned whole foods, did beat by a penny. same-store sales, misses estimates. this repeated notion that anything less than perfection is disappointing.

>> whole foods, they said cannibalization and competition and people are going to say it's trader joes, it's fairway, it sprouts market, it the fresh market. you can't get your arms around it. cannibalization, they're talking about the boston extension and how boston put up so many stores and suddenly numbers are down. in the meantime, the bar was so high here set by themselves, these are people as the great water robb said at one point, we are a no-excuses company and they're mad at themselves and i would not bet against these guys. contrary, qualcomm, inconsistent, comes up 12% today, whole foods up 42%. two different animals. >> qualcomm, they have 4 billio in cash. >> they have 2% yield. that's not going to keep anybody from selling the stock. you got to wait till -- i don't

get it. i don't get what they're doing. i don't get it. >> i just mention it because -- >> carl icahn. >> i think he's busy. he always seems to want to add more to his plate. >> you think he's had any more meals with apple? >> i don't think there's been any more meals with apple. >> coming up, we'll hear from twitter's ceo dick costolo. he'll join us after the opening bell. live from post 9 at the nyse when we come back. [ bagpipes and drums playing over ] [ music transitions to rock ] make it happen with the all-new fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity.

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to go the distance with you. call now to request your free decision guide. the number one focus, the thing that we wake up every single morning doing is let's create the best experience on the planet. let's make sure people can tweet wherever they are and anyone can see and take action on it immediately, anywhere they are in the world as well. >> twitter co-founder jack dorsey talking about his company's vision three months ago. this year's most anticipated ipo is a big win for the new york stock exchange. our bob pisani is at twitter's post, with the head of global listings. >> scott cutler is joining us now. excitement is building. traders are starting to move here, starring to gather outside the post. we are inside the post, not

outside, we were inside. scott cutler is joining us, head of ipos here. there's the team putting together the book. can you explain what's happening now. how is this book being put together and determining what the opening price will be? >> we're inside post b. the designated market make extheemaker, their role is to run this and the lead underwriters will get this at the right price. >> they are going to be interacting with the designated market maker. this is a collaborative process, right? >> that's right. this is going to be the first time where the public has the opportunity to buy into the ipo. all of that order and interest is going to be represented right here at the post and they're going to be collecting all that

information, price and volume and try to found the riprice supported in the after market. >> they have 70 million shares but that doesn't mean they'll release 70 million shares. >> 70 million shares plus the green shoe were sold last night. nows at stock opens up, a certain amount will be released -- >> how do they determine how much will be released? >> the art of the allocation is trying to determine how much will be allocated out of the stock. >> you mentioned the overallotment, the green shoe, that's 50%. there's really not 70, there's 80 million share potentially? >> correct. that was sold last night and that position will be closed either by exercising the green shoe after the deal or if the stock were to drop below the opening price, the underwriter has the opportunity to buy and support that price.

>> when are we going to get some idea of roughly where the price might be and when it might open? there will be indications, when will we find out about that? >> probably about 9:28 barclays will post an indication of interest, which is the price range they expect at that point of time and then they'll be updating those price indications. >> bob, want to interrupt you. this is dick costolo, ceo of twitter on the floor, followed by mike gupta, cfo, getting some nice shoutouts in the journal for making this happen. >> i like the behind-the-scenes book. every single aspect has been different from facebook. >> he doesn't want anybody to sell any stock. he's not going to sell any, he doesn't want his board to sell any ever. he also didn't want to distribute stock that widely through the organization, though i think he was encouraged to do

that. >> they want currency to be able to do things, not to be able to liquify their own holdings. that would be welcome. >> there is a feeling, david, am i wrong that the creators of this ipo want this to go to longer term tech investors. right? >> i think that's fair to say, yes. that's what you're looking for, a stable investor base as you might expect. without that many flippers and at this point given how few of the allocations have been to the large hedge funds that may very well be the case because we'll see. >> you see anthony talking to duncan niederauer right now. >> mike gupta, one cfo who has been around the block a couple of times, a history with zinga, we know this can turn against you, if your audience declines,

that's one of uncertainties analysts are trying to bring to the story today. >> is it a fad? we always have to worry something is a fad. it tends to not be a fad if you have big corporations behind it using the product, which we all know they are. >> there's jack dorsey to the right of your screen, one of the co-creators of twitter and arguably the best known on the cover of fortune, being called the next steve jobs, now the head of square, which ironically of all weeks to see reports that square has plans to go public in 2014, some have argued that was a little bit like stealing the bride's thunder. >> again, this is what i worry about. oh, look at this, this company, square, has no this, no that. it's multiple revenues. we all remember when you get in trouble, multiple revenues, linkedin is multiple revenues. >> it is interesting looking at costolo but when you think about

google, it's sergei and larry, who still run the company, facebook founder zuckerberg running the company, bezos, running the company. the big names running the company. >> we like that. these are not managers. this is not scully. >> no. we like that but here that's not the case as much. these are not the original guys. and we do like that, i think, having the founder with the vision that continues, they give you the nice letter at the beginning of s1. >> but schmidt did bring order to google. >> costolo, the ceo and mike gupta, the cfo, are not in the balcony. typically when people ring the opening bell, they make their way to the balcony and ring the bell. the fact that they are on the floor looking up i think suggests that this opening is going to be a little bit different. >> it sounds like if there is an

analog, it is democracy. perception matters. different from facebook. got to keep pointing that out because facebook was a disaster. >> it makes you wonder if not them, who is going to ring the bell? that's something we're going to have to wait about eight more minutes to find out. but leave it to twitter it do something a little bit different, a little bit disruptive. of all the traditions, jim, you go public at the nyse, you ring the bell. >> yeah. the wall street journal is priced at 26. that letter on your keyboard, did you ever think look at these letters, they've brought these letters to life, those little things when you were growing up, what is that ampersand, what is that hash tag, my friend? hash tag. what was that? always thought what was that? >> you guys are good at hash tagging. i'm still trying to figure that out. >> jim, you must have gotten

approached a lot this week as we see jack dorsey. people are saying their margins are beneath their peers, they don't make money, their revenue is dwarfed by facebook, why would i want to pay up for these gu guys? >> okay. there is one example where it did work and that is amazon. that's one of the things i want to ask dick. the amazon model, i call that the world domination model, does not require people to demonstrate any earnings. you just needed revenues. we could all sit here and say that's outrageous but i could drill amazon right now, you can drill it for 357 bid for mill probably down there. let's not forget, there are two classes of equities. there's the dream equity/cult equity and then there's the apples, totally constrained by

earnings per share. >> that's what happens when you have earnings. you get constrained by them. >> maybe you don't need to show them. i've been with some people lately in retail saying it's unfair, the world is unfair. doesn't amazon senteventually h to show a profit? no. no. it's on world domination watch. >> you read amazon's first s-1, the original letter from bezos, he told you right then i'm going to spend a lot of money. and the google guys, don't be evil but -- and zuckerberg, too. >> and when we talk to costolo, that is the key question. when is the moment you want to start maximizing your margin? >> ceos a lot of times i need an answer. it's not like a courtroom, never ask a question you don't know the answer to, but i want to know! this is going to be major! >> watching those founders on your screen, you just can't help

but think about how this company came into being being benefited from a lot of serendipity, it's been said it's the work of guys who drove their clown car into a gold mine. we'll get the opening bell and then the opening trade. >> why are we not talking about how rich they are? do you remember the facebook discussion? why have they not had -- why does this not have like this kind of fat cat capitalist this evening -- thing going? >> it's shares but it's not -- >> it's not big money. >> twitter goes public and a sitdown with dick costolo in a moment. [ male announcer ] what if a small company

became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. . you're watching cnbc "squawk on the street," live from the financial capital of the world. in just about a minute, minute and a half, the founders of twitter are on the floor today and dick costolo, the ceo sharing a laugh with ed dorsey,

the co-creators of the second biggest social network in the world. >> out of nowhere, changed everybody's life, changed our lives. any time you have this disruptive seismic shift and only the paranoid survive, look out. this is a tsunami. call this a 10x tsunami. >> we'll look closely for the opening trade. you might be wondering why the founders are on the floor. that is sir patrick stewart, patrick pickard, as you might know him. to the left is sharon fiandaca, these are users of twitter, we're told, guys, who were pivotal in the evolution. platform, who used it in a way that sort of changed perceptions of how powerful it could be, certainly in the case of boston we know. >> my daughter was in boston at the marathon. she was looking at it. i discovered it from twitter. 18 minutes of just pure pain while you waited to get ahold of

her. would never have known. twitter. >> vivian harr raised a lot of money for child slavery with her lemonade stand. and with that -- [ opening bell ringing ] >> that is the opening bell at the new york stock exchange. as we said, sir patrick stewart, sirpatstew, his twitter account. over at the nasdaq, i'm not sure who is ringing the bell there. >> says it all. >> the bell has run at the nasdaq as well. we got the opening bell, the race is on. duncan niederauer on with pisani in the last hour said he expects the first trade if he had to guess between 10 and 10:15. >> again, that's different. we are on different watch. in other words, everything that facebook did wrong, nasdaq did wrong, whoever, we still don't know.

i think that there is -- duncan niederauer has promised this going to work right. his neck is out there. i like that. i've known duncan for a long time. i look that he sticks his neck out when he knows it going to be good. >> speaking of duncan, bob is at post 8 and might be waking his way inside that post. >> i'm outside here. >> 35, 8 million to buy, a million pair. >> this is the early look we're get hearing at $35 for twitter in is the early look. it is not the opening price. again, there a lot of people here that are putting in orders to buy and sell right now based upon the orders that they currently have the indication, the recall look is $35. this is not opening yet, it's going to be a little bit of time here. not clear where it's going to be but right now that early indication is 35. we're right here. there's the books, runners, the people involved in the trade. there's the designated market

maker, you can't quite see him. the key point about all this, nothing happens unless this man over there, glen, says it happens. the stock does not open until he says it does at a price that everybody agrees to -- >> $35, 10 million to buy -- >> early indications, $35. i'll give you the blow by blow. if it changes at all, i'm kol ba -- i'll come back to you. we want to bring in dick costolo, he joins us here. dick, congratulations. welcome. >> thanks very much. thanks for having me. >> this has been a long road. how does it feel? >> if i had to summarize it, i would say we're all very proud of the company, of everything that we've accomplished. one of the reasons we had our users up there front and center because it's been our users that have gotten us to where we are today. but we know we have a lot of

work out of us, a lot of work to do and i'm looking forward to getting back to the office and getting started with all that. >> you are a notoriously open company and notoriously open man. when anthony noto from boston, what was it like? >> everyone's painting it like a locker room before the game and everyone huddled up together. it's a much more lengthy process with lots of papers moving around the table and decisions being made. over the course over the last couple of weeks, we met with an extraordinary number of potential investors in the company. we want to get an understanding and a feel for how they think about the company, how we're all thinking about the growth of the company and future plans of the company and trying to map out our future of our very public shareholder base and how we're thinking about our going forward plans. >> to me this deal sounds like something where you want money

for the company. i'm not hearing it's a big liquifying event for the insiders. >> it was all primary. all the capital raised today is going into the company. i think that was part of the way we thought about this entire process we went down. a single class of shares. we tried to have a very clean process. the team that worked on itt i inside the company was very methodical and particular and i'm ecstatic about the work they did. >> dick, the one concern i pickup from those considering investing in your stock, it's the new growth, what are you going to do about it? >> we've had 230 million monthly active users. we have thoughts and strategies to increase the slope of the growth terms. i would consider some tactics.

in service to bridging that gap between the massive awareness of twitter and deep engagement on the platform. >> so what does that man? >> there is an entire set of strategies like the onboarding experience into twitter. from that moment you hear about it and you come to the surface and sign up to getting it, understanding it and becoming active on the platform. one of the fascinating things about twitter is that the language of it, the scaffolding within it really is an evolution of how users have learned to navigate within that 140 character space. but that language and that scaffolding can be confusing and opaque to users who come to the service for the first time. it about developing processes and capabilities that allow the flexibility and power for users to navigate within that space. making it clear and simple the new uses are who come to the president oba platform. >> you're saying the platform will look different a year from now, materially different? >> what i'm saying is it's all

about making it very simple and easy for new users to come to the platform and understand what's going on in the platform, engage with content easily and immediately with the platform while still enabling that architecture and language that's developed from the very users who we have on stage today. >> if users are involved in an ipo where a stock opens at 40 and up fear another facebook, what can do you about it? >> look, as i mentioned earlier, we've gone through a process that i think has gotten us to this point with a group of investors we're excited about bringing into the company, all of our users being able to be investors in the company, that's nothing but exciting for us. it's all about now the very long, long-term business we're trying to build. we have an absolute perspective on the long-term kind of company we want to be, in service to being the public conversational realtime distributed platform. we believe we're the only company that is all of those in scale and in service to

amplifying those characteristics and growing the business to really enable the 2.4 billion connected people in the world to all become users of the platform. if there's one thing that everybody in the company believes, it that we all have examples in our own lives of why this service could be useful and valuable to every person on the planet and it's our goal to achieve all that. >> again, back to this new user growth question, i understand the value in twitter for me. i'm a journalist. it made sense early on. but for my mom or for my kid, what's the conversation that gets them to say i want to do this? >> there's so many people you talk to who say just what you just said, i get the value of it, it indispensable to me. it's all about -- it's all about for us helping people bridge that gap between i've heard about twitter to getting exactly where you and so many other people here today are. >> there are many companies that would kill for your growth, including some old line behemoths, like a microsoft.

which of these companies approached you and said we'll pay $20 billion, want to own you? >> i think we made it clear along the way we had every intention of being an independent company that, we felt we had so much work to do to achieve the goals we had in front of us and that sort of clarity of focus and clarity of purpose on board through the company made it easy for us to make the decisions we made. >> we talk about amazon and zillow all the time. household names, they're big -- >> all the time. last night at cocktail hour we were talking about zillow. i have a laptop in front of me that doesn't actually do anything but it looks wonderful. >> you think this is real? >> yeah. >> there are models where profit is not a priority, right? do you envision going without profits for an extended period of time? >> there is nothing structural about our business that prevents us from achieving the kinds of margins of the other kinds of companies in our peer group. i have every intention in the

near term in continuing to invest in the kinds of strategies that have worked so well for us. it's twitter in tv. as twitter becomes the second screen for tv. it's all of this onboarding work around the world, making sure we've got people on the ground in countries around the world, driving unique regional content on the platform, in service to making it the public realtime conversational distributed platform. we will continue to make those investments as long as we see tremendous growth there. >> is profitability an impediment to your growth? >> i don't think about it that way at all. i think about our investments in the growth strategy we're pursuing around things like twitter and tv, the regional content partners, we want to drive unique content into the platform as serving growth. we'll continue to do that songs we see the opportunities there. >> sorry. the mo-pub deal you did not very long ago in terms of -- i think it's the largest mobile ad,

change. it hasn't gotten the most attention. is that an important component of strategy at twitter? i've been hearing it was an important deal for you. obviously it was large given the size of the company at the time. >> i would say that acquisition, along with some of the other acquisitions like blue fin labs in boston were about accelerating the growth of the company. in mo-pub it was about bringing realtime bidding into twitter and just as interestingly thinking about as we develop this notion of the native ad unit, a piece of content, the tweet that, can also be an ad and promoted to other users, it's thinking about the opportunities to leverage that native ad unit across the entirety of the mobile ecosystem. >> in terms of the great businesses i've seen, they start -- you don't even need salespeople because advertisers want to be involved. do you need salespeople right now? >> we had the good fortune to start out with the large brand advertisers, typically the hardest to attract to an

advertising platform and we have 94 of the top 100 already working with us this year. so we have a very high touch direct sales force that works with those folks, works on crafting solutions and strategies over the course of a year or more with those folks and we'll continue to invest in that. >> facebook has adopted hash tags, they've put video on instagram. do you feel like they've copied you, stolen from you, does it matter? is copycatting a risk going forward? >> i mentioned this earlier and i'll say it again. when i think about our platform as public realtime conversational and distributed, as long as we invest in the things that have gotten us here and we invest in amplifying those characteristics, in service to making twitter the indispensable companion to life in the moment, to the live experiences are then our success will be determined by our ability to amplify those characteristics. we don't feel like we need to

pivot from those karcharacteris or invest in a fifth kaus characteristics. it's about amplifying the ones we have. >> many have complained about migration from desk top to cell phone so quickly. are you make more money on cell phone than desktop? >> mobile is already the primary source of our total revenue. >> would people pay more for an ad because it not happening anywhere else, is it with your model? >> i'll say this. because our ad unit is content first, the advertiser tweets it out organically to their own followers. it goes out to free to their own followers and they then can make it an ad. they're particularly resilient to being spammy ads because they don't want to send something annoying or interruptive to their own users. the fact that it content first and then made into an ad makes our platform particularly resilient and suitable to the

mobile advertising platform. >> by the way, we're expecting a price indication in the next couple of minutes, i think around 945 -- >> there's no sellers to speak of is what i keep hearing out of one ear. >> dick, 75% of your users are overseas or not domestic, yet most of your revenues of course come from the u.s. will that change and how will you go about changing it? >> we started in the u.s. with our direct sales force. in fact, our self-serve platform is still only available in the u.s., significant opportunity obviously to invest in our international business. there are many countries in which we -- we don't have any sales efforts yet. we just haven't begun them. so we'll do that, again, as we have over the course of the last couple of years, deliberately, thoughtfully take success that we develop here in the u.s. and start to, you know, copy, paste that strategy around the rest of the world. >> the product that appeals to a domestic product as opposed to

international? >> no. it is simply a function of investing in the u.s. first, again, having some of the small business market capabilities like the self-serve ad platform up and running here in the u.s. and not having launched those yet internationally. >> how many people do you follow and who do you love following? >> i change accounts all the time. i'll give a shout out to my buddy bill simmons, the sport journalist because i love following bill simmons. he's dynamite. >> still waiting on a price indication in a few moments. >> you're doing good job of both monitoring the price and thinking about the next question to ask me at the same time. >> and he tweets, too. he's tweeting. he's incredible. >> there are three of you guys and i feel like i should have two other people up here so we could really kind of like -- >> your posse.

>> lockup expirations -- >> my computer doesn't -- i don't have a functioning thing i can do research on like you guys do. >> there's one in april. have you made a commitment not to sell shares for a given period of time? >> we have an investor. our investors and employees base has agreed to a lockup of i believe it's the 180 days. again, i think that's all in service to, especially as i mentioned earlier, a primary offering today. we just want this to be a clean offering and take it forward. we haven't made any plans yet at all about how we're thinking about things like what a secondary might look like, when it would be. we'll look at obviously the entirety of our -- how we're thinking about our future growth, how we're thinking about next year as we think about those things, they're not front and center in our mind right now. >> we're hearing 30, 34, which is a big price. did you pick the new york stock exchange because you were worried about the facebook deal went with nasdaq.

>> we picked the new york stock exchange because they've been working with them closely, they've been a great partner of ours. we like the way they think about the future of the twitter platform, we like the way they use the twitter platform. that was i would say the central to our thesis in using them. >> how much is the platform going to change over the next five years? because i asked that because so many people i think who are believers here are just simply believers in the power of your platform but don't necessarily understand what it's going to look like in three to five years. >> i think that we talked about this briefly earlier. it's already the case that so many people understand that it's this indispensable companion to the live experience. whatever that live experience is, whether it's a football game, an nfl game i'm watching n now and i get the nfl replay of the bengals sacking the quarterback the end zone four seconds ago or what's happening right now on the floor. for us it's all about investing in the opportunity to help everyone in the world understand

that. >> wow. >> last question, dick, as we await the open here in a few moments. perspective, right? you've come public at a time where there have been books written about the early days, about the back stabbing, about the in fighting. has that been frustrating? amusing? is it part and parcel of creating a new business? >> i'll say a couple things about that. these startups, they always evolve from the beginnings and the people who were there in the very beginning to what they eventually become, particularly the successful companies of which there are so few that make it as far as this company has come. but for me specifically we have so much work to do and so much work ahead of us in service to meeting the goals of the company across all the sort of kinds of opportunities that we want to fulfill for these connected people around the world. i don't have any time to sort of look back and think about what happened three years ago.

i could fill all 24 hours of date with all the work we have ahead of us. >> and you do. you're going to fly back today to try to be in san francisco for the market close. is that right? >> that's correct. i'm going to fly back today to try to be with the team in san francisco for the market close. i've got a bench unch of things want to talk to the company about and the team about. all these things i mentioned this morning, i want to make sure we all understand that enormous responsibility that we have now to both our shareholders and our ongoing commitment to our users and make sure the team is focused and ready to go. weep got a big game coming up against the packers next week. >> i just want to be on the record. this laptop does work. >> i know, it's just -- >> i'm so tired of reading tweets during this interview. >> carl tweets with his feet. that's really what goes on. >> dick, congratulations. thanks very much. >> thank you. >> dick costolo, the ceo of

twitter. let's go to bob pisani. >> we're here with scott cutler. the first indications, $40 to $44 are the indications, $40, 10 million to buy, 2 million paired off. explain what that means. >> this is actually telling the market that we could expect right now the stock to open between 40 and 44. we indicate out what is the pair trade and how much is left on balance. and right now it showing there's a balance to buy here at this level. >> so 10 million to buy, 2 million paired off. explain what the paired off means. >> i believe at $40 you've got 2 million shares on both sides buy and sell with an order and balance of 10 million shares to buy, which is a signal that there's support above $40 at this point. >> so almost certainly the stock will be opening above $40 as of now? >> that's what it's indicated. people have the opportunity to put in their interest, that's the process of price discovery

we're going to. >> $40 to $44 is a wide band. will we it to narrow? >> if they do lock it up, to likely go from 44 to 48 if that were the case and we will narrow that as we get closer to open. >> it play not open between 40 and 44. there may be other indications. and again, in this crowd here, there are people with millions of orders to buy and sell, millions of shares to buy and sell potentially, they could continue to put in orders so it may not open between 40 and 44? >> that's right. the orders are coming in from the floor brokers, as well as everybody who may want to participate in the ipo, sending their orders through the retail accounts and all of that is reflected and the underwriters can determine what is the right price to open. >> they are behind us, they're in touch with their desk building the book, a designated market maker here, glen, who is

going to open the stock is in touch with them. there's a collaborative process going on to try to determine the correct price. >> it's very transparent to the market where we think the stock is going to open. there's no uncertainty now. and that communication is key to a nyse open and part of building the confidence that this is a fair and transparent process for everybody who wants to anticipate. >> looks like we're getting new indications. >> $42, 5 million to buy, 4 million paired. getting a little bit closer still. >> starting to narrow a bit. that's the paired off at that price with the imbalance of orders -- >> so the imbalance is a little smaller than it was a few minutes ago. >> correct. >> based on your experience, is there any indication when this

might open? >> we're at 9:51 now. we could still have a period of time before we open. we're not rushing that. that is the decision of the lead open here. >> once open, trading will be fast and furious. one point, there's a small possibility that we may see trading walls. can you explain that? >> after the may 2010 flash crash, the s.e.c. put in place regulations that essentially work at circuit breakers in the event the stock trades 10% below or above where it last traded. in the event that we open, if we trigger that, the stock would be halted for about five minutes and there would be a reauction to open up. importantly the underwriters and particularly the dmm would be layering the books on both sides to make sure the price moves smoothly through this process. >> your point is it's unlikely there will be a trading hold but those circuit breakers are in place and have been in place for a while now in the event that happens. >> they're essentially built to,

again, establish confidence in the market that, hey, when the stock moves a significant amount, we're want to be able to pause for a second and go. >> once again, the indications right now are 42 to -- >> 5 million to buy 42 -- >> a little bit of a band. we'll be here with scott all throughout this morning until this opens and even after that. back to you. >> you might have seen sir patrick stewart help ring the opening bell, a prolific twitter users with over 7,000 followers. it's great to you have. >> thank you. >> what did you think when they asked to you ring the bell? >> in fact, that was not my finger, that was vivian, the young lady there who rang the bell. but i'm here at the invitation of dick costolo and the people at twitter. it's a little bit late in the day for me to become a poster boy for any organization, but after only 18 months or less of

tweeting, that is now my relationship with the organization. >> sir, when you first heard about it, did it capture you at all? did you say what is it? a lot of people are saying if they're not on it, how do i do it, why should i be on it? >> it was a mystery to me and it also sounded somewhat silly. and i was sat down by my p.r. people for breakfast one morning and i was told, honey, it's time. and i said, please, i don't have time, time too busy. maybe i'm too successful. >> and when did you turn out to love it? do you regard it as an obsession? >> an obsession might be a little strong a term to describe, but it has now become one of the most significant aspects of my life. but most importantly of my career. because it has changed the public perception of who patrick stewart is.

from being a rather serious, upright, noble, honest, decent person to something of a clown. and i -- already that is affecting the kind of interest that people show in me professionally. and further to that, i can represent organizations that i am passionate about and that i believe in. >> would you have any interest in buying shares in twitter? >> maybe. >> or have you -- did you get an allocation on the ipo as a -- >> i think that's what that twinkle says. >> twinkle. >> i think this is very exciting. this ipo is terrific. >> and with the new price indication, 42-46, as we get even closer to this first trade. would you argue -- you talk about it benefiting your life and your career. have you made money because of your ability to reach someone who offered you a job down the li

line? how did that work? >> here's how we are making money at the moment. ian, my co-star on broadway, we are promoting the production through twitter. we have all the conventional modes of promotion but i and and i have been traveling around new york city going to all of the landmark sites and taking an ordinary iphone twitter photograph of the two of us wearing the hats, we've been at the tom of the empire state building, we've been at nathan's out at coney island and we release one photo at noon every wednesday and that is promoting the show. so as producers of the show, we are benefiting from people that buy tickets. >> sir patrick, it's great having you, welcome. congratulations. thank you for stopping by. sir patrick stewart, on this day where twitter's ipo happens. stick around to see how it opens for trade. and that case, 42 to 46. "squawk on the street" is back in a moment. my customers can shop around--

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the street" on cnbc. it's an exciting day on the program as we wait for twitter's first trade. we continue to get price

indications, the last one was 44 to 45. we've already chatted with dick costolo, the ceo. simon hobbs and kelly evans joins us on the set. it's been a whirl wind. >> we thought it was worth $12 billion, $15 billion. be careful. >> the process becomes more and more elongated from goldman as stock from the institutions. are they willing to sell. it's a very complicated process behind the scenes. >> apropos of facebook, people who paid up, live to regret it. >> with 700 million diluted shares, we're talking about a valuation approaching 30 billion, let's call it 28 billion at this level or more. that's a bit, as we reported at

the top of the hour, the deal is 30 times oversubscribed. ten accounts. the hope is they'll be holders not flips are. a lot had very small al occasions. not going to make a difference whether they flip it or not, frankly. we'll see what this thing really is. >> remember facebook not only increased the price before they listed but they increased the size. twitter has not done that. that may help a little. >> it's important because it's a sliver deal, meaning you only have a certain small percentage. keep this in mind, market cap of

linkedin, company with 2 billion rev, profitable company, this is going to be bigger. >> it's all primary shares. di dick costolo mentioned that. it matters. >> it matters. the pattern is if you want to buy the stock, wait six months time. that is the pattern of these ipos. >> you're talking about pandora being down 38% a year later, groupon down 85%, linkedin up 5%, yelp down 6%. that has been the historic case. the first price typically is not the high, the second price people say i want in, too, and we try to maintain that price. anything below the opening price will be regarded as a severe disappointment. >> for all those at home, jim, just coming to the story, is this something you wait a month to take a nibble at if you get a chance? what is the -- say the six-month strategy, if you believe social

media is going to be around for a long time and twitter will be a player? >> if you wanted 200 shares, i don't sanction buying 100 here because it's already higher. another chance comes. >> let's go to bob pisani with an update on the pricing as we continue to wait for the open. bob? >> we're here with scott cutler. current indications, $44 to $45. it's now only 2 million to buy but still the price could move up a little bit from here. >> as the band gets narrowed, we're getting closer to the opening price and what you will hear is that the book is frozen. when we communicate out that the book is frozen at a certain price, that's a ten-second before we will open and that's when we'll know we're ready to go. >> and only the designated

market maker, dmm, will make that statement. are we getting any closer? >> we're getting closer. the band is start ing to tighte and we're seeing the human play to open. >> and tony noto and others are standing behind me. they're huddled with the designated market makers. and both have books they're building collaboratively. findly we' finally we're getting an indication of where that might open. >> 45, 46 on 7 million. >> so now there's a new indication, 45 to 46 -- >> they are not close! >> i wonder if they're close or not. this is the beauty of the old fashioned system. you don't have to wonder what's going on. the man is yelling in our ear

what's going on. there are still additional buyers coming in. this process is very fluid. it's not frozen at any time. other buyers or sellers may come into the process and change the price indication. >> this is the technology and interplay with the people. people have the opportunity to see exactly what's going on and know where this stock is going to open and whether or not you're a buyer or seller at these prices. >> the important thing is the town cryers are standing here behind us and we're standing right in front of the dmm post here. we'll be here all morning until it opens. back to you. >> not a good day for growth. regenorr -- regeneron down. >> the u.s. and europe setting a

tone of weakness this morning. by the headlines sounded okay and ecb responding to extreme deflation concerns. >> but europe has bounced very strongly on that surprise move by the ecb. a broad base rally, two very big banks going in different directions. the ecb getting more dovish, the fed here arguably getting -- >> you have to wonder how much more hawkish they can get. consumer ipos, how strong have they been? the container store doubling, you have a wendy's this morning disappointing and same store sales figures, comps up. >> and noodles disappointing that numbers were poor. fairway, i thought that number was -- enough is enough. that's just an expensive stock. and that does matter. by the way, the oils are getting

killed here. eog has the best growth of any major growth i follow and it's being annihilated on a great quarter. >> why? >> i think there's just the belief that oil's done going higher. >> look at wti, just above the $94 mark. keeps going down, it's not going to be good news for those companies. >> let's bring in -- i want to bring in the co-creator of twitter, he joins us this morning from san francisco as we look at price end cases around $45 or $46. good morning. >> good morning. thanks for having me. >> how does it feel out in san francisco? >> it's an amazing day here. >> can you elaborate on that? >> you know, it's so interesting to be this close to an event that we've anticipated for over seven years. i saw this coming on day one

with my prophetic tweet number 38. seeing it flour, ish on the market, it's a rush. >> there are a lot of people justs d s didiscovering as it c the public. but they're saying i'm on facebook, i don't get it. they're saying the symbols are confusing. is that going to change over time? >> those symbols are a factor of the community, this came from the parlance of the users. as folks found them confusing or onerous, i'm sure there's a way that the creators, the current engineers and designers can adapt. but i think it's a fairly simple process of symbolic language, symbolizing language that is akin to programming. as people become more comfortable with the process of

programming, you're creating hyper text by using these very simple symbols. i would say to anyone confused, simply take a look at how can you use them to your advantage. the pound sign is great for searching, the "at" sign great for -- >> it's all about bridging the gap between those people that have heard about twitter and actually starting to use it. so does there have to be a major simplification? do you perhaps have to abandon the way in which it's organized by time so that it is easier for people to catch up on what they've missed? will there be different incarnations to get those every day folks on to twitter? >> that is a great question. i had that experience yesterday as i was catching up with my news feed. i usually pop right to the top and try to find out what's happening right now. and i happened to pause at a conversation that took place

between several of the co-creators and myself actually. it was references me but i just popped into that one moment. it almost a feeling of serendipity when you find that one message that has some meaning to you. so what i would say is to those folks getting it for the first time or trying to understand it for the first time, don't feel overwhelmed. even those of us who have been around since the beginning find time and have to make time to get that meaning. and, you know, it sort of a process of using the right tool, using it at the right moment and putting some limits and filters for yourself. and i think that is a key lesson, how do we filter this news in a way that's meaningful to us? >> dom, it was interesting last night when twitter itself tweeted it had priced and some of the details. they had to use a user hack to get around the 140 character limit for the tweet. is this company not doing enough to be innovative and keep up with some of the demands from its users? >> that's a wonderful observation.

i noted that tweet myself and i think the lesson here is that there are ways to move beyond the 140 character limit. 140 characters is the topic of my book, it's the title of my book and in that are ways to use the medium to your advantage. one thing i've noticed in the past say year or so is a sort of switch between the big screen and what those who produce on the big screen call the second screen. here at san francisco, we call the second screen that bigger screen. that first screen is really our mobile device. it really the first access that we have to information. and so in terms of innovation, i see twitter and the systems of social networks providing the first access to news and information on the mobile, on the tablet and having that bigger screen be the second screen itself. so i would say stick to your guns, twitter. definitely continue to innovate and push your own medium and let the rest of us catch up.

>> finally, dom, not to put too fine a point on it, is there any sour grapes or bitterness that you're there and not here today in. >> i am a -- let's see, that's a good question. i would say i feel blessed to have had the past seven years of experience, i wouldn't trade anything for the ability to travel around the world and speak on this topic and help people to find the best use of the system. i've made a career of educating people on how to use social media for the best good. i've spoken for princes and kings, addressed thousands and i have a following that i cherish so i wouldn't trade anything for that. >> dom, it's always good to talk to you, of course on a day like today. thank you so much. >> my pleasure. >> dom sagolla, one of the co-creators of twitter. >> we are focused on twitter, waiting for that open. but will is a lot of other news to follow today. i wanted to share breaking news on an ongoing m&a situation involving men's warehouse and joseph a. banks.

joseph a. banks along with the private equity fund of golden gate has offered $48 a share, it has been stiff armed by men's wearhouse. it could in fact at least will try to move this along. that shareholder is eminence capital, a fairly large hedge fund. it will report a 9.8% position in shares of men's swaz wewearhd solicit a leverage recap, to create more value for that company which is trading right around $43 a share, rejected 48, did not allow joseph a. banks in to do due diligence in which they said they might be willing to increase their bid.

we'll see if this is something that gets this process moving perhaps in a way that joseph a. banks with like but, jim, men's wearhouse does have the ability to act by written consent and could go to the board of directors. people have been waiting for an activist to get in here. >> it's a necessary combination in a very difficult industry. i'm surprised men's wearhouse has been giving it the stiff arm. >> guys, let's cram in a quick break if we may. they're obviously waiting for the first trade in twitter, could open up with a valuation of $30 billion u.s. dollars. we'll be back in a minute. tdd#: 1-800-345-2550 life inspires your trading. tdd#: 1-800-345-2550 where others see fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help

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>> is that how you view it? in the mean too matime we'd bei talking tesla and solar city. i'm not saying that's wrong. there's a collapse of the highest multiple stocks going on when we're seeing a stock going to revenue is extraordinary. >> the past few days have seen hints on this on various individual names. >> you don't want to talk top, you don't want to talk bubble. there are lots of stacks thocks down today that would signal deflation. the ecb is worried about deflation. >> this is going to ignite wars, coming under more and more pressure to lower their rates. the extent it puts pressure on u.s. dollars it will be a

headwind for oil -- >> somebody more masterful to talk about the dollar, to equal the gravitas of draghi. he's a master of talking about his currency. >> i'll talk currency and go yield curve. let's go to bob mipisani. >> very fluid situation. we're talking 45 to 46 for a good 15 to 20 minutes. suddenly new indications 43 to 47. so it's widened a bit. how does that happen? >> this is a normal part of the process. this is essentially that scale where people are trying to test at various, where is the buy and sell interest. people are trying to tease out that interest. they're slowly hiking that range but essentially this is the testing ross eprocess and the m knows where it should be.

>> a normal person would say it's 45 to 46 and now it's narrower, now you get 45, 50, 45 around there yet it blows out. explain that so people can understand how it suddenly gets wider rather than narrower? >> when they first established the range, it was a $4 range. that will allow them to hike that up in $4 increments. what they will do at some point in time is tighten that pricing indication. even once we get within a dollar range, we'll start to argue back and forth or at least the underwriters will in terms of 10 cent, 5 cent increments. >> essentially what's happened when we were talking 45, 46 on the floor is more potential buyers came in as well as more potential sellers -- >> 45, 46 on 8 million, looks toward the higher end. >> this is nick the town crier here and now the floor talk is

45 to 46. >> at 45 to 46, that allows everybody to sort of put in their order, buy or sell at those levels. and then on the other side again, the dmm and barclays is working to understand where is all of that order flow at that interest and communicate that to the underwriters? >> how close are we to open? >> it doesn't feel like we're close until we get to those dollar levels. >> behind bob is duncan niederauer, who is in the thick of the crowd. >> more special coverage when we return. stay with us here at "squawk on the street." le le go to a mattresle le le go to a mattresle store and essentially they

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we're still awaiting the first trade on twitter this morning in the wake of the pricing overnight. 54 minutes, 27 seconds since we rung the opening bell. the indication is the stock will open at 45 to $47 a share. that's what the nyse is trying to match as trades at the

moment. let's bring in mark mehenny, managing director and lead internet analyst with rbc capital markets. mark, good morning. if we open at this sort of level, that would be an indication that the company is worth in excess of $30 billion. is that a fair assessment of what the business is worth? >> that's an awfully aggressive but potentially achievable valuation level for this company. to put some con dex around that, that would put this stock at trading 20 times forward sales, which would be two times the mutt many of any other internet stock. it's possible that it builds into that valuation but the odds get smaller and smaller. >> i think your price target is $33. >> that's right. >> $10 shy of where we may be at the moment. what do you do as an analyst? will you up rate it, so much interest or put a sell recommendation on it? >> i try to avoid the one-day price targets.

i want to be fully respectful of deal dynamics with something of relatively small flow comes out. what we do is therefore indicate whether it's a good asset or not, whether it's one that could be a long-term long, we think it is. i think there are better plays. i think there are better ways to make money over the next six to 12 months, amazon, netflix, priceline and google are better money makers right now. >> i lived through the street.com open in 63, goes to 67, was at $2 not long after. 300 companies went under between '98 and 2000. we saw what happened to yelp, what happened to groupon. shouldn't we just be cautionary? isn't that our only role right now is just to be cautious? >> jim, i think you got more perspective than anybody on this. look at what's happened with all of these internet ipos. even the ones that have nicely

succeeded and worked, today facebook, linkedin, they all created much better entry points after the first day. your point i think is very valid. this is a very good internet utility, we think it will fall into that category along with names like amazon and google, but chasing the stock in the mid 40s, it's awfully risky. you have to have a very long-term time horizon to make money buying in the mid 40s. >> a $30 billion valuation for this company, what would justify that kind of size? is it comparable to a facebook? do we have to think about it in a completely different way and compare it to broadcast companies? >> well, actually, to put some context around that, that's still about an eighth of the market cap of a google and it's still about a quarter market cap roughly of a facebook. so if this thing over time generates a broader user base than those two companies, that's

probably unlikely but it's possible. if it can generate the monetization levels of that company, it's probably unlikely but possible. you do have a business model that's been proven. they're a great play off of mobile devices. those are the two biggest issues in internet stock land. there's a check next to both of those problems. >> when you say next to awfully aggressive, people get that. when you follow saying potentially achievable, what is it going to take for an analyst to put a line in the sand and say no more? >> well, can we wait more than 1 hou -- 12 hours of trading volume? there have been almost 700 internet ipos. the first day of trade isn't

that representative of what will happen over six to nine months. we'll see. we'll lead with the recommendation, which is buy. it's offlbviouobviously a tiny . my job as an analyst is to indicate where better money is to be made and i've signalled that with amazon and priceline. >> we are officially in another tech bubble. is he wrong and why? >> jim cramer was talking about earlier about the companies and the blowups we had in '99 and 2000, and some of us lived through those painful times. the internet ecosystem is dramatically bigger than it was and most companies are trading at reasonable multiples, modest premiums to the market, look at google and price line. i'd strongly disagree with the idea this is similar to '99 bubble. look at how people interact with the internet on a daily, minute

basis. if you pick the right five or six companies, that's how you as a shareholder or a stock broker can make money. >> it's good to see you this morning. it's an historic day. stay with us, if you would, on the west coast. we'll come back to you as we await this first trade on twitter. >> do you know what's fascinating as well, so much attention on twitter, it's not extending to the rest of the social media space, nasdaq isn't doing that well. why is it there's not more of a bid? is it because twitter's competition for these names? are there other macro factors going on weighing on the market? >> i think a lot of smart people are saying we don't like what's happening. if there's this kind of nuttiness, we want to take something off the table. >> is this nuttiness, though? >> this deal, yes. this is nuttiness. >> when a company starts aggressive, this takes them

years to catch up but they're ultimately good businesses. >> good businesses and price tags are different. mark mahaney talked about google is a good stock. i love the philadelphia eagles. would want to pay 40 times sales. maybe just tweet and don't own. green bay packers, you can have a share, put it on your wall. just go watch, don't own. >> does it come back to the company that's only put 13% of the shares out there? >> yes, it's a sliver. >> is there an implicit criticism there that if you're going to take a company like twitter to market, you've got to let more of the insiders sell? or not? does the price mean nothing six months afterwards? >> anthony noto is a responsible guy who lived through this, a goldman banker. the buyers in the end have to be held accountable. this business is a caveat emptor

business. my boss came in and said, jim, you're not selling vacuum cleaners. you can't take it back. >> but they remember google at 85. >> but google was done in a way that was so advantageous for buyers -- >> that we never saw again. we thought that might be a new template but it didn't, luckily for wall street. >> how about mahaney's point that day one tends to be -- how about revisit in a week? >> a few weeks ago i said it could be worth $20 billion. now they're talking double that. say ing okay. no! no! >> these are very hard deals. i know the people involved are super responsible, but in the end we're dictated by the rest of the market and the rest of the market ain't so hot. >> we'll have plenty of coverage of twitter's wall street debut. here's a look at just how many

tweeting about the twitter ipo right now. we'll be right back. 'm beth... and i'm michelle. and we own the paper cottage. it's a stationery and gifts store. anything we purchase for the paper cottage goes on our ink card. so you can manage your business expenses and access them online instantly with the game changing app from ink. we didn't get into business to spend time managing receipts, that's why we have ink. we like being in business because we like being creative, we like interacting with people. so you have time to focus on the things you love. ink from chase. so you can. [ horn honks ]

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all right. for all of those out there who are saying let's get this show on the road, there's a look at the elapsed time since the opening bell this morning, as we await twitter's first trade. we're getting some indications around 45-50, 46-50.

the average tech ipo this year has opened 28% on day one. this is going to be more like 70, 73%. >> you don't want a facebook here. tremendous retail enthusiasm. facebook there were many shares. they unlocked a huge number of shares. i don't want to compare in terms of what the bankers did and fabz -- facebook insiders did. in terms of valuation, it's worrisome. >> the big names on wall street are locked into this process. we don't know what analysts who spent weeks talking to the company actually think about this level. when they're able to start publicly commenting, they'll comment negatively because the stock is so high. >> rob peck, i laughed. he said listen, $50 valuation. i said, come on, peck! you're getting people too excited. $50 valuation in a couple years,

why would you recommend it in 30 years? does he go sell tomorrow? peck is good. i initially ridiculed peck because i didn't like that kind of talk but now that it's $2 from his price target. his target was insane. >> so you've used the term nuttiness in the past few minutes. >> i do. >> are you using the bubble yet? >> there's a bubble but the stock hasn't processed yet. >> are we talking specific to internet companies or more bradley the ipo tech world? valuations outside of this, outside of tesla -- >> it's tesla, amazon, netflix -- >> what insider is not going to sell in 180 days at this level ? >> i don't know.

you know the level. >> we just asked costolo. said would you agree to an extension, the way zuckerberg agreed to hold until september. i think he was a k.g. after that. >> you do a sliver now and 180 days they dump a huge amount and it turns out to be you get a little on the deal and buy it lower on the big secondary. that's happened a bunch of times. >> it's funny making a couple of phone calls. you're at levels now where if you make a broad brush argument that this company has great success and does $3 billion to $4 billion in ebidta in say five to seven years and you throw an 11 multiple on that, which is roughly equal to facebook, you were get to a $44 billion market value, you're already two-thirds of the way there to a market value that would require complete execution over five years. >> where will we be wrong in they could make billions in three years. >> or equally not.

you doesn you don't know what the shape of it will be in six month. we know subscribe are growth is slowing, particularly in the u.s. >> costolo has said this is not a company, it's a cult. and i don't like cults. >> if you are a believer in true social, there are not that many publicly traded companies to invest in. there's facebook, there's linkedin and now there's twitter. >> this has the social mobile cloud holy trinity that salesforce.com talks about. that is the big issue. yelp has got it, zillow's got it, facebook has it. there's eight or nine companies that have figured out the holy grail. and this one is ground zero. >> the best time to buy zillow was when it was beginning to prove it could monetize and grow more rapidly. that's when the stock went up to 24. >> that's right. and stocks were halved. a lot of stocks were halved during that time.

>> bob miss ipisani, you say we getting close. >> 45 1/2 on 10 million. getting close is the word. we have been in this range for some time now. what's taking the time? >> we're focused on valuation. in this dollar range between 45, 50 and 46.50, this is where buyers and sellers are coming together. remember econ 101, the value is where those two intersect. we're saying now the value is expected to open in that range. >> we're talking 10 million to sell at the open. 70 million is what was sold minus the green shoe. we're talking about less than 1.5% of the value of the company being sold at the open. in other words, this is a pretty small amount of stock. >> these are shares being sold for those people that bought last night, that's essentially where the liquidity is coming from and the buyers are coming

out from the marketplace as a whole. that's what we're seeing right now. >> getting close, what does that mean? >> that means we feel like we're getting closer to a tighter range. like i said before, we will slowly start to tighten that now into 50 cent and 25 cent increments and we're hearing we're getting closer to that. >> five minutes? >> i don't know. >> it could change. it's oddly fluid. >> 45, 46, right in the middle. that means 45.50 is where a lot of the bids -- >> we're in the hands of mission control. the underwriters are looking at the process. everything is working fine. this is textbook. you do have a lot of demand. we typically see up to the amount of shares sold last night trade in the day. >> when you say "mission control," so everybody understands, the book runner, goldman, they are interacting with the designated market maker

here and collaboratively building a book. there's a couple mission controls. >> they have the stick on this flight until we start to open the market and then we open it to everybody. >> collaborative market. >> 45.50, 46, we're getting close. >> great coverage from inside post 8 today. and it does raise the question, jim, of, givagain, we hate to d parallels to facebook, what happened here on the floor and what happened to the computers a year ago. >> each level they blow through, that's more retail coming in. that is never wise. it could be just today and it is just a sliver deal, but that is never the right thing to do. if you're at home and you're saying buy it, i don't care, $50 top. no, no, no, no. >> the mechanics of this deal are working fine, as opposed to facebook, day one, which was a disaster when all these orders

came and nobody could get a confirmation, everybody pulled back. >> cutler's right. >> that may be why it's doing so well. people are learning they don't have the al olocation and peopl think, hell, let's by 1,000 or 2,000. >> the retail investor got nothing. >> i can't think of a situation where this opens at 48 and goes to 60. maybe this is the one in a million -- >> if they've only put 13% out to begin with, of that 13%, how many people would be willing to sell to insiders -- >> no insiders are selling at all. >> and there are hedge funds. >> if you have 10,000 shares, they're selling right now, they're selling to you. >> i've talked to a guy who is wouldn't offer a million shares and i'll short it. you're not supposed to do that.

>> no. dick costolo is seeing deceleration in user engagement and user growth. doesn't mean they're not going to be able to bridge that and he explained how. >> the question to him this morning was how do you reacti reaccelerate that? >> but it's not facebook, where there was a degradation of facebook's business. the process is working but that doesn't mean the buyers aren't too enthusiastic. >> how ironic the chair of the s.e.c. said investors have a clear view of the ipo and faith in the process, sort of details that they put out, there the eyeball detail does not necessarily follow through to profitability or to income. and see believes that her staff have made that point clear to

the general public. and i wonder if that has a slight air of irony. >> biz stone and dick costolo have been extraordinarily patient, waiting for this to happen for the past almost hour and a half. >> product crushed! >> it's like a subway car out there. i wouldn't want to be on the subway for an hour and a half. you got some well dressed people. >> in the meantime, we should point out more broadly the dow is close to the session lows, down about 40 points. if you're just waking up or just joining us this morning, the ecb did have a surprising rate cut to a record low 25 basis points. i saw a survey, 3 out of 70 economists saw this coming. >> no. it had to have been -- maybe officially. >> one survey that i saw. out of 70 economists polled.

>> maybe the whisper survey would have put it a little higher than that. this goes back to last week. cpi data out for the eurozone, 7.7% on the year. try being in european right now. >> it's a big deal when the europeans by the bundis bank are going to move as fast as they are. that's an indication that things are rough in europe. >> i heard a commentator say we're waiting for a surprise ecb cut. a little irony. >> you've been positive on europe -- >> did you see spain today? >> the fact that they're doing this concern you? >> they live in -- they live in the past. they know 1920 deflation leads to 1923 inflation, which leads to hitler. >> they pointed out they've got $760 billion of cheat money stuffed into the banks. they haven't embarked on qe,

there's a lot of cheap money around as banks delever. >> at the know how important culturally and socially it is to stop deflation, not because of hedge funds but what happens to people's lives. >> don't want deflation. that's why they're being very forward. i think draghi is very responsible. i think he's being very responsible. you may disagree but i fear 1922. that was a bad time. >> we're still waiting for twitter to open of course here on the floor of the new york stock exchange. let's get back to bob pisani, who is right at the center of the matching action. bob? >> it's finally getting a sense it's getting a little closer, 45 to 45.25. we've been standing here for an hour and a half it seems like and they're going to bring the deli service because dick costolo, anthony noto from goldman standing right over here, the whole crowd has been standing here patiently trying to figure out when we're going to finally open.

this is getting close now. >> this is the price discovery process we talked about about an hour and a half able we're trying to match buyers and sellers. they want to make sure once we start trading there's support for that price. that's the arc they're trying to balance, making sure you can open at a price they can sfaustn throughout the day. >> they don't want to open at 45 and suddenly drop to $30. >> right. again, this is the opportunity for retail investors to come in that didn't participate in the ipo and any institution underallocated last night, they wanted the opportunity to buy here, we wanted to make that orderly. >> how do you control that? >> 45.25 on 11 million. close. >> 45 to 45.25 is the indication now. this is nick, the town crier saying it's getting close. it looks like a matter of minutes now. i want to get back to this prior

point. how are they going, to one, make sure that if it opens there it says around there and doesn't drop? what control do they have? >> this is the visibility they have at the post to understand what sort of levels the shares are ready support on the buy and sell side. they know that and they're trying to make the determination what the best triprice is. now it's getting close. 45 to 45.10. >> the book is now frozen. >> the stock is going to open in ten seconds. hold on one minute. don't go away. where are we? $45.10. twitter opens at $45.10. scott cutler, your thoughts. it took a while. >> we're already seeing it trade

up at that level. we'll be watching how the stock trades here in the next five minutes to make sure everything operates smoothly. >> the key point here, nothing happened until that man over there, glen, said the stock is open. and of course there's the ceo, dick costolo over trying to walk away at this point. we're all fairly exhausted. i think the key point here -- congratulations, anthony. i think everybody's ready for a little belly break at this point. >> exactly. >> definitely need some food. >> a nice, smooth open. >> i'll be here to be watching this thing trade. right now, $45.93. fairly smooth right now. >> yeah, absolutely. this is really what you want, a textbook open. >> all right. guys, we'll be standing over here. let's see if we can get dick and few other people. but a lot of people chatting and high-fiving quite frankly. >> the same pattern. the first price is not the low. then it spikes. and then sellers come in, who bought it at the open. >> two weeks ago the bottom end of the pricing range was $17. we are threefold that, three

times higher. >> went from buy to hold to s l sell, between 9:25 and -- [ laughter ] >> and with that, twitter, the second-largest social network in the world, 232 million users, is officially a public company. available to be bought or sold, $45.80 or so, about a 76% gain. higher than the opening trade, jim. >> you could argue, apropos, what simon talked about, mary jo white, head of s.e.c., maybe they should be thinking the sliver deals aren't a good thing. maybe they should say, there's a liquidity problem. sticker it. sticker it. say a sliver is a real issue. >> or alternatively educate people and say don't buy ipos at the beginning. >> do you believe this will set off a wave of new ipos? >> no. well, let's -- let's put it this way. there are people who are always wanting to see this, say i want to be next. but if this doesn't work, it will be a freeze the way facebook was, although, again,

this -- i hate to -- the mechanics here are so much better than facebook. i applaud the way the new york stock exchange handled this. >> textbook, as they said. >> adding twitter to my group of stocks that includes facebook, google, amazon, ebay, yahoo! all of which i saw actually go public, but not live. >> right. very exciting. >> twitter's market cap is not far off yahoo!'s. >> by the way, funny you mention that, because the projections, at least, show twitter surpassing yahoo! and add dollars in 2015. aol next year. yahoo! the year after that, assuming this all happens. >> they don't own 24% of ali baba. >> yeah, right. >> it will be interesting to hear rod on scott wapner's show, the pie in the sky $50 price target out a couple of years. well, now out a couple of minutes. >> you wonder if 50 will be the next stop. but $35 billion, is that what we're roughly talking for market cap at these kinds of level? >> 700 million. diluted. >> yeah, this is, again, we don't have the -- this is the

process where you open -- it does not open at the top. that's the way all of the deals work. they go a little bit higher. everyone gets excited and then overexcited and start getting a little sell-off. even go you want to own it even today, you might get a better offer. >> why isn't there a halo effect around other, i don't know, portal platforms? other social? why the hole in the doughnut, so to speak? >> my fear is people are selling some of these for it. >> do you think that actually happens? >> sometimes it does. >> i want to buy twitter, so i sell yahoo!? >> the same kind of pete might own netflix, who aren't constrained by valuation. >> the interesting thing, though, do you now own twitter as an institution, because the company at this size and valuation is going to be as mainstream as an industrial? >> that's hard to say, because -- >> do you have to do the indexing -- >> -- justify not buying it. b again, on a valuation basis. i'm sure professionals are saying this is lunacy. i'm saying it's the way the market is. it's a very popular product.

people love the product. they want to own a share. people love the tesla. it went to $20 billion. people love to use -- >> but i mean -- >> -- to buy netflix. >> it has to get in the s&p, right? >> not with this -- with this float, they won't let it. >> it took google 20 months from the time it went in the s&p. facebook is still not in the s&p. >> right. >> looking at dick costolo in the lower frame a minute ago. you have to keep in mind what he brought to the company. >> right. >> right? this was really the work of a bunch of guys who were still battling it out over ownership and direction. and he brought in discipline, so much cost discipline, his nickname within house was "dick, keep the costs low. ". >> i wouldn't be surprised, by the way, now that we're out of the woods here, some buyers come back in. there was a lot of fear this thing could open even crazier than it did, and i think -- >> going down, yeah? >> but a lot of good news ahead of this. the ecb cut. remember last night, again, we had the whole foods, qualcomm,

the solar city, wendy's which i'm speaking to, and about to have bacon pretzel burger, but i've taken my lipitor, because i know the -- >> you pretake the lipitor. >> i took two lipitor before, right? >> yes, of course. or it's a torvistatin. it's generic. >> i want the best before i have a bacon cheeseburger. >> speaking of pharma, the only ipos bigger this year were zoetis. if you remember that. and flames gp, which nobody ever talks about. >> flames gp. >> how about plains exploration, and that stock is down 9. again, you know, there was this kind of commodity boom because of the dollar. people trying to figure it out. some of the oil companies are growing well -- they have better growth almost better than twitter. >> what will you be looking for after europe closes, with regard to twitter? >> i don't want to see people get hurt, obviously. if they don't get hurt, obviously, everything clears, then it will just be a cold stock like some of the other colds, and that's okay.

as long as the colds are contained. don't want to see a whole lot of -- they see this. you know, at any given time, there can be four, five colts and it doesn't wreck the market. it's all right. >> so if your druthers, where would you like it to close at 4:00? >> i'd like to see it close here. i don't want anyone to get hurt. >> yeah. >> i just don't want anyone to get hurt. is that all right? >> some perspective, looking quickly at the stocks that typically follow, it's roughly the size of directv's market value. it's $10 billion more than dish. it's three times the size of charter. it's roughly the equivalent of time warner cable. in size. again, its market value as of right now, up 80% on an ipo priced at $26. >> content costs are a lot lower. >> but i'm on twitter, not directv. you know what i mean? >> i do. i do. it's a lot bigger than netflix, by the way, and tesla. >> if you own it, you own it. understand, like, it's still a stock in the end.

it's better to be on twitter than to own a share of twitter. i understand the love is powerful. >> you stuck around for an extra hour today. thank you for that, jim. >> thank you, guys. >> we'll see you tonight. tell me who you got. >> eugene wendy's, until today, formerly growth stocks. [ laughter ] >> wendy's. yeah. okay, 3-2, at least a positive comp. >> they're killing the stock. no indication, by the way, that the bacon cheeseburger is not good. >> don't tell kelly. >> have you ever had anything that's fattening? >> are you kidding me? >> no. >> we'll see you tonight. >> thanks, guys. a lot more special coverage of twitter with the wall street debut. stock is up 82%. 47.52. back in a minute. (announcer) scottrade knows our clients trade

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a better than 90% pop at the open. went public, by the way, opening trade $45.10, as they said at post 9 a few moments ago. and since then, has found some legs here, kelly, it continues to trend higher. >> interesting. because i think people would have expected it to either struggle at the open, given that rake, or to pop and give up some of the gains. this is the opposite. there, it just hit 50. it just hit $50 a share after pricing at $26. >> amid a relatively week tape today, we should point out. >> a great point. >> with some big earnings disappointments last night. some concern, among some at least, given the ecb cutting rates this morning, and even the high-multiple stocks we know, tesla and so forth, not getting a shine off of the ipo, but as for twitter, it is doing okay here. >> and continuing to retest the $50 mark. look at that. bob pisani on the floor of the new york stock exchange where he's watched the open. bob, are you surprised, as well, by this action? >> it's quite a move up. i want to point out, at the open, they sold about 10 million shares. right now, twitter has sold

38 million shares, changed hands here. remember, the deal size is 70 million. a good general indication of this is how much they sell right at the open. that was about 10%, more than 10% of what was being offered. a good offering. already, more than half of the stock has changed hands that they are offering. again, opening at $45.10. one key fact, i checked with the new york stock exchange, all of the confirmations have come back. remember one of the issues with facebook, they couldn't get confirmations of people buying and selling stock. you need the confirmation to know you bought or sold stock. this time, i asked the nyse, they have confirmed all of the orders have been confirmed. so the system is operating fine. there's, of course, the man who's actually in charge here, glenn parell, the designated market maker. you can see how fast he's moving the fingers there. those are orders to buy and sell stocks he is manually putting in. of course, there's electronic

trading going on, as well, but a very significant part of the market, as this point, the dmm, particularly in the ipos at the open. you can see how busy and concentrated they are. the crowds may be go, guys, but the barclays dmms are still here. back to you. >> if they leave, we have a problem. thank you, bob. great stuff from inside post 8. that's bob pisani. we want to bring in john steinberg president and ceo of buzzfeed. did two hours of hosting this morning on "squawk on the street." >> thank you so much. >> welcome. this is how it's supposed to go? >> let's dig into the numbers. let's start there. we have a $35 billion market cap. that equates to basically a $32 billion enterprise value if you take out cash. and i'm using rich greenfield's numbers. we're now trading at 30 times revenue -- price-to-revenue, right? for a comp, facebook is 10.6. going in to today, when i thought it would be a $20 billion, i could find yelp at 14, 15. but we're expensive now. i think this company's got a big future, but it's expensive.

>> it's expensive. >> too expensive. >> at this price right here? >> too expensive, absolutely. >> despite growing at three times their peers? >> you know i'm a bull on this whole sector overall. i think when you look at the social companies like facebook, linkedin, twitter, youtube, which we should actually talk a little bit about today, they're changing all of the consumption of media. i think twitter will certainly beat revenue drastically compared to what people expect. it's already adjusted ebitda profitable. but here today, too expensive. >> if you think it will beat revenue, it makes it cheaper than it would otherwise appear? on the metrics alone. >> when you put in the fact you get 78% revenue growth next year, say they hit 18% ebitda margins, it's still -- it's still tough. >> is it about three, five, ten years down the road? >> you could find any justification. >> all i'm saying is that that's what the trajectory's going to be. >> yes. >> it's not so much are they going to do okay in year five. it's going to be, are they in

year ten, on a par with google, where you're paying for that kind of growth -- >> look how cheap google is. google trades at five times sales, right? so we're in the outer limits here of rationality. >> john, it won't be long now, we'll get a quarter. we'll have a conference call. >> yeah. >> a 10-q, an earnings release, an income statement. what do you want to see first? do they need to roll out video ads in the next six months? >> i want to see sales force productivity. that's what always driving the businesses. we have three companies in the world now that buys ads. omnicom merged, them, wpp, and one other one, right? basically now, we need to see is twitter building up the international sales force? are they innovating in products? do they run out an app-install ad? do they dramatically simplify this product to get beyond the 230 million users? do they make something that can be broad? >> great point. >> john, great to see you. >> thank you so much. thanks for having me.

>> with buzzfeed. joining us at the desk. >>. >> next guest was an early backer of twitter and saw the company grow from the early years to the ipo. ez he's a general partner with smart capital. good morning. >> good morning. >> i know there's a bunch of things you can't discuss specifically. but how does it feel watching this all happen today? >> you know, it's incredibly exciting. i mean, this team has worked very, very hard to get here. they've always had a long-term view of the company, and the opportunity. and i see that continuing. it's very exciting. this is a great milestone for the company. >> how is public life going to be drink, bijan, than private life? >> i do know the culture of the management team has always been long term. i suspect they're always going to maintain that as a philosophy. and that's what's going to really guide them.

>> bijan, i wonder if you ever thought we'd be talking about a $30 billion, $35 billion valuation, and whether that seems excessive, going back to the conversation we were just having? >> yeah, i mean, i'm not prepared to talk about the stock price. you know, these things change quite a bit. i think, like i said earlier, it's about the long-term picture and opportunity. i think this company is all about, you know, before things, dick talks about all the time, around public, realtime, conversational, distributed, at scale, it's just a tremendous opportunity. and that's what the company's all about. >> bijan, i'm sure a lot of things crosses sparks' desks, so what did you see in them early on, and did this turn out to be a success story different from the one you envisioned or not? >> yeah, i mean, we fell in love with the product first, even before we met the founders back in 2007. you know, joined the service, became addicted to the fact it was so simple, had this utility

end kind of fun element to it. the idea that it would democratize media and competition, and we got with the company in 2008, less than a million active users. so it's very -- you know, very proud to be a shareholder in the business, and, you know, but it is -- to be fair, i did see this level of, you know, where it is today, in terms of being a global phenomenon. you know, we all had very high expectations for this company. that's why we wanted to build an independent, durable business for the long term. >> hey, bijan, it's john. congratulations today. >> hey, john. nice to hear your voice. >> a question for you. what do you think are the product tweets? you're a product junkie. you live and breathe this stuff like me. what would you like to see happen in the product to broaden it out a bit and drive growth beyond the core 230 million user base? >> yeah, i kind of -- what i really admire about this company is the product keeps getting better and better without messing up user interface.

they're very disciplined over at twitter. you know, the mobile product keeps getting better. i like how they added photos to the inline timeline. did that recently. they had conversationable capabilities were added to make it easier. the company is patient rolling out new features and capabilities without cluttering the experience. we'll see a continuation of that. i see them continuing to refine and improve and delight the user. >> bijan, what about this idea of twitter user fatigue? and coupled with those people who feel bullied about too much exposure, i goes, on social media? we've seen a number of high-profile examples, whether it's some of the biggest celebrity users, people just kind of engaging less on a platform, losing interest. did you experience any of that yourself as a user, or have it as a concern as an investor? >> yeah, i've been tweeting every day, or nearly every day since 2007. i don't suspect that'll change for me. you know, the data that the

company shows is a company that's growing. i mean, you know, you look at the s-1, the publicly filed documents, you hear dick talk about what's happening with user growth. there's a lot of people around the planet using twitter every single day. they use it with television. they use it to complement their daily lives. you know, i think that's where the focus is right now. >> bijan, can you comment on the acquisition and what you think twitter will do to monetize beyond the core platform? to my mind, to speculate, you could put a vastly superior ad product in mobile apps and experiences, using tweets in there. is that something you thought about or can comment on? >> yeah, i can't comment on future unannounced products, as you know. but i think the thing to realize with twitter is that when they rolled out their initial ad product, it was very methodical. they rolled it out to only brands you follow, only a small number of advertisers. they continue to, you know, refine and make that advertiser product better and better for users, for advertisers.

that's why we've seen such a great response from users and advertisers. this is not about maximizing some short-term opportunity. it's about methodically and, you know, refining and refining the user experience, and that includes ads. that's what this company is all about. >> bijan, thanks for your time. great to talk to you, especially on a day like today. >> yeah, thanks so much. very exciting. >> as we look at the stock, we'll see a little bit of movement here. now back to $46.18. but incredibly active -- i think a moments ago, 35 million shares traded. that's more active than any stock in the s&p, at least. even more than ge, which is saying something. john, thanks a lot. good to see you. by this point, you've seen what twitter is doing this morning, but where does the stock go from here? we'll talk to morgan stanley's vice-chairman, who's spot on when he was here for facebook's ipo. [woman]ask me...

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welcome back. earlier this morning we spoke with twitter's ceo dick costolo and we asked him him about his plans to generate twitter growth. take a listen. >> we've had tremendous growth across the world. over 230 million active users now. i think we've got a tremendous set of thoughts and strategies to increase the slope of the growth curve. i would consider them some of them tactics, broader

strategies. in service to doing what i refer to as bridging that gap between the massive awareness of twitter and deep engagement on the platform. >> all right. by the way, jack dorsey has been active on twitter, even since the open of -- at least the opening bell. here's his first tweet here. as the shareholder of a public company, a thank you and congratulations to @dickc -- and the twitter team. gabriel stricker, head of the communications, and mike gupta head of the twitter. >> and i want to know if they do anything with the disclosures as a publicly traded company, emphasizing it more via twitter. >> it has worked for netflix and zillow, yes, absolutely. he was with us the day facebook went public. as cnbc's capital markets editor and providing our audience with the most correct insight, joining us for the twitter ipo is none other than gary kaminski. welcome back.

>> what a very nice intro. thank you, guys. yes, crazy memories. [ laughter ] crazy memories, but ironic to say i'm here yesterday, indeed. >> what do you think about the atmosphere? >> i think the viewers saw the crowds, but i was talking to pisani. this is the most crowded i've seen this building since the stock market crash of 1987. because the excitement, the enthusiasm, and clearly because of the technology issues related to the opening of facebook, everybody wanted to see if this went off the right way. and so, the first thing is technology-wise, the system worked. the stock is trading fluid. and much like we had at the nasdaq that day at the facebook ipo, none of those issues seems to be an issue investors have to think about, whether they're buying or selling the security today. >> was it priced correctly, or not? >> i think the deal was priced correctly, carl. this is how it should work. there should be something left on the table for investors. there should be something that the company doesn't take all of the proceeds, given what the

size of the book is. and so, we have seen deals that have opened up higher than this. we have seen deals that have opened up lower than this. so i think all in all, it was a fair pricing. there will be a lot of people that will say they did not get as much stock as they wanted, but that's the way the system is supposed to work. >> very quickly, now that the plumbing seems to be working -- >> right. >> -- the discussion will shift to whether this stock is a good bias a value here at $45. what do you tell clients? >> well, i don't -- i will not be able to tell you whether it's a good buy. what i will tell you is the following, having spoken to people in the last several weeks for it, they bring up the 2-gs. and what the 2 "gs," not for gary, but google and globe.com. i think you had the globe.com founder/ceo on the show. if you bought google at the ipo, and a 10-year chart, which i think brenda has, a lot of people will think, forget about valuation right now. what can this become if? what did google become? and globe.com, which some will say was the first social media

site, what did it eventually become? it became a zero. so the mindset right now of people that are buying or selling this print at 46 is it's going to be one of the gs. >> it's not helping the broader market, gary. why is that? >> that is a surprise. when the ecb rate cut, which would have been the story of the day, had it not been for twitter call, i guess there was too many people, believe it or not, that anticipated this rate cut. so it's a bit of a sell on the news. it's not a shock given the easing the world is talking about the and the endorsement today out of the ecb, and what many believe will be out of yellen as soon as she gets the confirmation. it's sell on the news in terms of the rate cut. >> you think it's a disturbing signal macro-wise? >> no, i don't. >> you don't. you don't think dragi has anything to worry about? >> no, i remember being here in august when he said we'll do whatever it takes, and they didn't do much till today, and

the market reacted. i would say the overall market, you guys know i pay unbelievably close attention to composite indexes. i wanted to share with the viewers one piece of information. the dow jones is up approximately 2,400 points year-to-date. the guys who track the closet indexes for me, pointed out to me last week, carl, if you look at the gain of the dow jones industrials this year, one-third of the gain has happened on 10 days. do you know which days? >> the first days of the month. >> the first day. >> only two first days of month negative. >> exactly. what does that mean? that means the people that invest money by pressing a button, they come in, they see they're behind the s&p 500, they need to play catch-up, they come in, they hit the button, and they buy more stocks. that is why a third of the gains of the dow jones industrials this year has come on the first day of the month. i don't think that's going to change november to december to january, and into next year. >> hmm, all right. that means potentially a lot more runway here, gary. >> easy money continues to rule the day. great to see you on an exciting

day. >> thank you very much for coming by, gary kaminski, now morgan stanley. let's turn to the ironside capital founder, and a new dad, and ken, internet analyst at evercore, initiating coverage of twitter today. guys, good to see both of you. thank you for joining us. >> thank you very much. >> ken, walk us through the initiation. what do you see? >> yeah, well, we initiated a the 43. we put a range of 43 to 53. and there's talk about user growth and engagement, and those are important for the company. we tried to take a different look on the business. and focus on the selling. it's paid clicks, like google. when you look at the paid clicks, they really only monetize right now about one in every 300 page views for the platform. so we see that actually going to about one in 100, and i think on the price for the clicks, it's about 30 cents. so we see that increasing, as well. so really on small increases in the assumptions, you get to big revenue growth even without assuming huge opportunities where increases and engagement

or user growth over the next few years. >> yeah. and, eric, they would argue -- they would add to that their click-through rate is a multiple of the industry average. are you bullish on the name? >> well, again, it's a question of being bullish on the company and bullish on the stock. i love the company. i'm an avid user, have been since '07. and would have loved it at 20, loved it in the 30s. but it's just too rich at these levels, in my opinion. and i think we're going to see some drift over the next two to three months downward. you know, even at $25 billion market cap, that's an aggressive evaluation. that's $35, $36. so i -- it wouldn't surprise me a year from now to see the stock at 60 bucks. but it wouldn't surprise me in the next few months to see this thing drift down into the 30s. >> ken, i wonder if one of the concerns that john mentioned earlier isn't going to be the buildout of the sales force as it does look to become more and more active in terms of monetizing ad space. that's potentially a cost-intensive business. what can they do on that front,

do you think? >> i think they need to. when you look outside the u.s., they monetize one-tenth the rate. i think building out the sales force there will be important. when you look at the real cost within the business, they're not that high. so i think that you can assume that there will be nice margin leverage going forward. it's a question of what are the right levers to be looking at? it's not an impress model. they don't charge on the basis of impressions. they charge on the basis of clicks. when you look at the drivers, you see much more flexibility in terms of the levers and the ability for them to dry higher rpu, you know, revenue per user, over the next several years than most people expect. >> do you think they pose any kind of threat existential or not to an aol or a yoo-hoo, eric? anybody else in the portal space? >> well, they are going to benefit from the same trends that facebook is over the next little while. i think both of those two companies, especially, are going to ride a wave of ad agencies

and big brands, saying, hey, i just saw this twitter ipo on cnbc, we got to allocate more budget to social media. and so, i think the dollars will flow in. i think, you know, some of that is definitely going to come away from the traditional big display ad providers. >> and i would just add to that that i think that twitter is very strong in the area of branded, which would go after the portals. when you think about the super bowl ads that showed, roughly half of them had twitter. less than 10% had facebook. so i think that will be an area where given how open twitter is, that it will be critical for brands to be on the platform, and they're going to be thinking more and more about how can they actually use it to extend the overall message. >> yeah, that is certainly hoping what twitter hopes, guys. we are seeing a drift here, down to 45 and change. eric, ken, thank you so much. >> my pleasure, thank you. >> thanks. >> on the first day of trading, twitter is now bigger than some of the most well-known companies on the street. we're going to do a little comparison and tell you who when "squawk on the street" comes right back. dow's down 61.

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♪ tell all the people you see follow me ♪ ♪ follow me welcome back. twitter in just a few short hours, now bigger than some of the most well-known companies on the street. dominic chu has the details on this back at headquarters. good morning, dom. >> good morning, kelly. so again, obviously the trade's moving very fluidly. but right now, twitter is worth approximately $32 billion. that make it is worth more than 337 companies in the overall s&p 500. some big names that it's bigger than, it's about the same size as general mills. it's bigger than john deere, bigger than charles schwab, adobe systems and norfolk

southern, one of the biggest rail companies in america. for more perspective, look at this. if you look at twitter's valuation, it is, again, bigger than autozone and coach combi d combined. it is twice the size of ralph lauren, and get this, kelly, guys, three times the size of luxury jeweller tiffany. back over to you guys. >> incredible. and the same size of companies that have thousands more employees, as well. dominic chu at headquarters keeping an eye on it. thanks, dom. when you think about twitter, there's probably nothing more iconic than the hashtag. so where did the idea come from? we'll ask the guy who invented it, chris messina, when "squawk on the street" continues. stay with us. ♪ don't carry me too far away

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[man]two people.two remotes. [announcer] firmness settings for the head,legs,and back... and with tempur on top,that famous tempur-pedic comfort comes any way you like it! [woman]ask me about the lumbar button. [man]she's got her side...and i've got my side. [announcer] tempur-pedic.the most highly recommended bed in america. [woman]don't touch my side! >> announcer: welcome to "squawk on the street." here's what's happened so far -- >> the ecb is cutting rates. this is a surprise decision. it's cutting its refi rate by a .25%. >> it's all about getting it right today, and i think we've done everything we can to get ready. what we're going to do is we're going to make sure we're overcommunicating. we're trying to bring everybody into the crowd. the first look at third quarter gdp, better than expected, 2.8%. speaking with the number of henl fund managers this morning,

of course, all who are disappointed in their allocations, but not surprised. >> can we draw any early guesses as to how the stock will behave? >> you don't want a freefall. folks at home should recognize there are things that are too high. a lot of people saying, listen, this is the new new. [ opening bell sounds ] >> that is the opening bell at the new york stock exchange. >> i think it's all about now the very long, long-term business we're trying to build. we have an absolute perspective on the long-term company we want to be, in service to being the public conversational realtime distributed platform. we believe we're the only company that is all of those in scale. >> $45.10, twitter opens. ♪ >> that's a look back at the past couple of hours here at the exchange. quite a morning as twitter goes public for the first time. back in 2007, chris messina, a

developer advocate at google, started use using the hashtag to introduce fans, and that led to the use of hashtags on twitter. today, it is going public. we want to look at the beginning of twitter. chris messina, as we said, former google ux designer, father of hashtag, joining us from san francisco. the godfather thing. it makes you sound dangerous, chris. >> thanks. >> how does it feel out there? and more specifically, how does $45 feel out there? are heads shaking? >> you know, it's -- i think it's -- people are excited. this is something that i think people have been waiting a long time for. and it's great to see a bunch of my friends, like, do really well for themselves and build something great, simple, that people just love. and i think the market's responding. >> so, chris, to be clear, you suggested this tweet, but it didn't work for twitter. to some extent, the company has capitalized immensely on your idea. >> they have.

they're not the only company that's doing pretty well with hashtag so far. that was one of my original intentions and hopes for this thing, is it would be much bigger. the social web has grown up in an amazing way in the last couple of years, and i think twitter is one of the first to do a really good job of keeping something simple, straightforward, and building something that people have figured out how to use, and for both commercial purposes as well as for personal. >> well, this is a great point. it's something i'm surprised we haven't seen more of. why can't you, for example, put a hashtag into a google search box and turn up results across social media? as you indicated, it was meant to be something not just specific to twitter in the first place. >> yeah, you know, it's sort of a slight disappointment for me that that hasn't happened more. that's just due to competition. i think we'll probably see over the next several years is a lot more competition around companies trying to aggregate hashtags and aggregate social media that draws conversations together and makes more sense of the trends that are happening

everywhere. it won't be about any specific network or medium. though, of course, folks like twitter and facebook and instagram and vine and so on want to do a really good job of being the only go-to source for the content. >> it raises a good question. we asked dick costolo this morning, the risk of others copycatting, i guess, what is essentially public domain. as you say. facebook now uses the hashtag. they use at-replies. what will keep bigger companies with more scale from stealing the d the ideas that twitter brought along? >> my naive hope is the companies will provide a better service that's faster, easier, simpler for people to use. and people will go to the ones that cater best to their needs. that said, i think that there's an opportunity for all of the companies to try to figure out the best way of bringing people together around whatever content or media they're sharing. hashtags are a great, simple way to do that right now. and again, brands can basically

push out messages using hashtags across different mediums and channels, and that works. >> and usability is such an important point as twitter looks to grow and expand. do you think that the hashtags and the "at" signs, while they're revolutionary and a lot of fun for people are confusing, disorienting at first to those who aren't as familiar with the service? >> i think they're unfamiliar, like e-mail was unfamiliar to people a long time ago. when you see other people using them and other people doing it, you can emulate that behavior. it's a really, really important part of social media, is we learn by observing and seeing what other people are doing. that's part of where the design came from, sort of me looking across at what i saw my friends doing, and irc and other internet chat channels, and being, like, this is a good idea. but why don't we break it out and make it available to everybody? >> finally, chris, i just wonder, you know, obviously a big day for twitter. it's making national headlines. are you getting the sense that others in the valley are going to make a mad rush to try to start listing on the public markets?

>> that isn't the sense that i have. i still feel like people are pretty, you know, cautiously optimistic about what they can do with the public offering. i think there's a lot of people looking more towards building longer-term, valuable companies, brands, and products before trying to go public. at least, that's my sense of it right now. >> yeah, spoken like a true product guy. chris, appreciate that very much. good to see you again. >> likewise. >> chris messina, the hashtag godfather, as we like to call him. >> love it. speaking of the hashtag, it is the subject of this morning's, yes, there is one, squawk on the tweet. what's the best hashtag you've used to describe twitter? tweet us @squawkstreet. let's get back to bob pisani. what a morning he has had on the floor of the nyse. bob? >> i'm here at the twitter post. here's the guys, twitter may open, but the team at barclays, the guys are the designated market makers, very active, looking at the markets. bottom line, priced at $26,

opened $45.10, and traded in a very, very tight range from about $45, it got up to about $50. considering the amount of volume we're dealing with and, by the way, we're getting near 70 million shares changing hands, exactly the amount that was actually sold here today. so quite a turnover. normally, a good amount at the open. 10% to 20% of the volume. so that's almost exactly what we did, about 10 million shares at the open. a couple of important points. confirmations all came back okay. now, remember one of the problems with facebook was many people who put in orders to buy and sell couldn't get the confirmations back they had actually bought and sold. you have to have a confirmation. that was a problem. here, i made very quickly -- i checked, no problems. everybody has the confimrms bac. it took a while. this is the longest ipo ever. the long ipo record at the new york stock exchange was visa, went public about 10:17 a.m., about 45 minutes after the market opened. this was not until about 10:45, but as everybody on the floor

was saying earlier, including the book runners here, we don't care how long it takes, we want to get it open, and get it open right, and trading right, and the whole process while it took longer than people expected, was fairly flawless. bottom line, guys, here, twitter trading in a very, very narrow range. opened at $45.10, now trading at $45.90, and it was an historic day down here. a lot of relief, everything went just right. guys, back to you. >> all right, bob pisani, keeping a close eye on the trade today. right now, by the way, we should mention, as he said, twitter hit $50, but it has weakened a little bit. we're below $46. still a 75% gain from where the trade priced. so should you think about buying? we'll against you the answer when we come back. [ male announcer ] what if a small company became big business overnight? ♪ like, really big... then expanded? ♪ or their new product tanked?

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we'll find out what he thinks now, and we'll, of course, have the trade on all of the day's other big movers. whole foods, noddles, tesla, many, many more when we see you at the top of the hour. we'll see you at post 9 in a bit. i'm told we may even see you at post 8. looking forward to that. >> all right, scott, looking forward. thank you very much. back to twitter soaring in the debut. the question is, should you buy it at this price? dennis berman, business editor with "wall street journal" joining us and chris of the turner titan fund, good morning. >> good morning. >> good morning. >> chris, i'll put the question to you, what do you think of the price here, what it implies for the size and value of the company? is it still a good buy? >> well, i tell you, i think i wait to put fresh money to work here in the twitter story. we're discounting a couple ye years' growth, and the other peers are growing very fast. if you have fresh capital, it's in facebook. the stock trading about 8.8

times price to sells on 2015, a noticeable discount to where we are with twitter. so i'd hold off on the twitter and put fresh money to work in facebook. >> wow. dennis, what about you? are you surprised at how much the stock has popped this morning? >> well, actually, i am. they roped-a-doped it very well, it's 18, 20, then maybe 25. i think we have to ask the question, carl, did the underwriters screw this up? >> well, niederauer was just on a few moments ago and argues because we're basically within $5 of the open, not bad, right? would you agree? >> within $5 of the open. >> yeah. >> didn't they leave money on the table when they priced it at $26? they could have priced it at 35 and brought in a lot more money for the company to use. so this gets a really interesting philosophical question of the role of the underwriter. perhaps they priced it too high, or too low, left some money on the table. >> if you think about 17, it reveals how little people know how to value this company. how could you put a $17 price, just a couple of weeks ago, at

something that's trading at 45? >> right, right, a good point. chris has a good point. for 2014 -- for 2014 estimates for twitter, this now being valued at 30 times sales. >> wow. >> facebook is actually growing faster, better growth characteristics, so i think he has a good point. if you believe the secular changes are pushing twitter this high, then facebook is a better value. >> chris, are we going to be awash in these kinds of deals over the next 6, 12 months? is this going to be -- is this indicative -- prescriptive in any way? >> well, i think this is obviously one of the higher-quality products that we're going to see over the next 6 to 12 months. i suspect we'll see a lot more, yeah. and the thing about this offering, it's only 10% of the shares outstanding. so as far as the company raising cash, yeah, maybe they left a little bit on the table. but they wanted to make sure this went off well and all intents and purposes, this is a very big success. you look at the trading history of facebook, linkedin, groupon, zynga, all of the deals that came in the last couple of years, none of them traded like

this. they all traded pretty poorly the first few days out of the box. so, yeah, some left on the table, but overall, a pretty big success with not a big negative for twitter as far as capital raised. >> i like "the journal's" coverage today, dennis. >> thanks. >> reasons not to buy in. >> yeah, people watching cnbc, of course, interested in making money, and might not heed our call. you shouldn't be investing in individual ipos and buy index funds instead. there are big, strategic questions for twitter. the ad model, as you mentioned, kelly, is undeveloped here. the growth is very much in international markets where they don't have much of a sales force and not selling that many ad units there. you can either view that as a lot of potential or problems. kelly, as you mentioned, there's so much variability in the range of potential for this company. >> that leaves dennis and chris echoing jim cramer, cautious for the retail guy. >> cramer was cautious, okay.

>> yeah, he was cautious at these levels. >> i'm honored, i think. [ laughter ] >> enjoy the rest of the week. >> thanks. >> talk about focus. this is a photo shared by twitter's head of organizational effectiveness and learning. melissa daimler shared it under the #backtowork, twitter ipo. that's a sense of what's going on inside today? >> yes. very interesting. and a quick thank you to all of you who have been watching the special coverage live digitally. the live stream will run until the top of the hour. to stay with us, authenticate with your cable provider. just a programming note there. lots of different ways to watch the coverage this morning. >> i had no idea. great stuff. twitter's ipo going pretty well so far, but as we've seen with other companies, things can go wrong. take a look at the case of friend finder networks. that stock ipo'd at $8 a share. two years later, it plummeted to 30 cents. how can twitter make sure that doesn't happen? we'll talk to the ceo, marc bell, in just a moment.

♪ come fly with me let's fly, let's fly away ♪ ♪ if you can use some exotic booze there's ♪ welcome back, shares of twitter trading far higher than the initial pricing of $26. the question now is whether the stock has gone too far too fast. the next guest, a little familiar with the potential pitfalls of going public, and warns of a bubble within twitter

and tech start-ups. marc bell is the managing director of marc bell capital partners, the former ceo of friendfinder networks. thank you for joining us. and good morning. >> good morning. thank you for having me. >> you know, you aren't the only one to use the bubble term this morning. steve ratner was tweeting something very similar. what is it today that reminds you so much of the difficult period you went through back during the tech boom? >> well, friendfinder was a little unique, whereas we had great access to the debt capital markets as we rolled -- as we did our acquisitions, but really didn't have access to the equity markets as we had hoped. institutions just weren't ready for the headline risk involved in adult content. you see a lot of companies today, there's a lot of risk with the twitter ipo. if you look at groupon or zynga, whose revenue growth slowed dramatically, and the stocks have gotten beaten as they haven't performed. you know, twitter's got a lot of people looking at it right now, wanting to see it have huge revenue growth that will continue, and eventually income.

at the end of the day, the companies have to make money. >> so just to get this straight, you're saying that the problem back then with friendfinder wasn't the company? it was wall street? >> well, we had counted on -- you know, we had raised a lot of money to go ahead and do acquisitions through debt. we had hoped to delever with the ipo and to raise equity. but institutional investors just weren't ready for the headline risk that comes with investing in adult. >> the reason i ask is because, again, how do you feel as though the street is handling some of the ipos now? are they being too conservative? or are they pushing this stuff out there, and is that why you think the retail buyer should be wary? >> well, i think if you look at -- if you look at all four -- the facebook, groupon, zynga, traded down within six weeks of the ipo. and people are treating the stocks as commodity products. retail investors are buying twitter. they're not looking at the financials per se. they just want to own a piece of twitter. and the stock on its own has become a product. and now, it's up to the companies to deliver.

>> yeah, and that doesn't sound like a necessarily a bad thing, marc. i'm just being told by s&p that the average 2013 tech ipo price change from the first-day close to the present is about 3%, right? that knocks out that first-day madness. but i wonder -- i mean, doesn't it seem to you like over the medium term these are being priced rationally? >> i think today you see -- you saw a huge run-up today in twitter. i think you'll see it come back a little bit over the next six weeks. and then it'll be a buying opportunity, buy it sat a lower price, and hold onto it for the long term. like facebook. it dropped down a little bit and now doing great. >> to be clear, marc, what then makes this a bubble? why are you so worried about some of the internet companies this time around? >> i'm worried that, you know, if you look specifically, like, at groupon or zynga, the revenue growth has slowed dramatically. they haven't achieved profitability yet.

and, you know, at the end of the day, if you look at how the massive valuation twitter has gotten compared to some big companies, as you guys said earlier, it's larger than tiffany's, larger than coach, you know, big, old retail companies. you know, companies at end of the day have to make money. >> exactly. well, that's going to be important to how the shares do from here after the strong performance. marc bell joining us. knows a little something, again, about how the first day goes. thank you very much, sir. >> thank you for having me. before we take a break, one programming note for all of you who have been watching the special live coverage digitally. the live stream will run until the top of the hour. to stay with us, simply authenticate with your local cable provider. twiter is now open for trade, and it is the subject of this morning's squawk on the tweet. the question today is simple. what's the best hashtag you'd use to describe twitter? tweet us your though thoughts @squawkstreet. jackie: there are plenty of things i prefer to do on my own.

but when it comes to investing, i just think it's better to work with someone. someone you feel you can really partner with. unfortunately, i've found that some brokerage firms don't always encourage that kind of relationship. that's why i stopped working at the old brokerage, and started working for charles schwab. avo: what kind of financial consultant are you looking for? talk to us today.

if ever there was a day well-suited to squawk on the

tweet, this is it. finally opened for trade. basically where we're standing, kel. people became billionaires standing here. our question to you, what's the best hashtag you'd use to describe twitter. miguel writes, i think we can all agree that the hashtag is #winning. and #twittilating. and this is your brain on 140 characters or less. >> isn't that good. >> the people will be looking for it to hold at some of the levels here. scott wapner will walk us through the next hour of programming. incredible morning. and the afternoon is going to be just as interesting, especially on this one name. >> given where the stock is trading right now, based on where it finally opened, it's certainly going to be interesting to watch it over the afternoon hours. first of all, congratulations on a great three hours. we were all riveted watching the coverage. and it just doesn't happen that often down on the floor where you get an ipo of not only this size, but the hype and all of the excitement around the most

anticipated ipo of the year, certainly one -- one of the most highly anticipated ipos ever. >> not to mention the fact it happened at new york stock exchange, puts them this year ahead of the nasdaq for tech listings. it hasn't happened in perhaps -- ever. certainly this time around. >> yeah. you're going to continue to dive down with some analysts. where are they getting their projections? >> yeah. >> what is the optionality, the uncertainty of the ad dollars supposedly coming twitter's way? >> significant questions people are asking about the business model, the valuation, what some analysts are saying about the company. we have bob peck, who is the first analyst to put a buy rating on the stock. you guys have -- suntrust, you talked a lot about him and his call on the show today. so we'll take it right to the source at post 9. and roger mcnamee of elevation, early facebook investor, what does he think about twitter's business model? we'll find out, and also what he's looking at for the next big thing. >> and you have to love the

people, carl, if you look at the valuation, why not pick up facebook? but facebook is down, so are a lot of the other. the tech names are the weakest of the indexes. >> if it weren't twitter today, we'd be going to ecb and jcpenney comps. >> we'd be talking about whole foods a little bit more and maybe noodles. you know we'll talk about them, as well, with our panel of traders, too. so we're excited to be here. >> take it away, scott. >> guys, have a great weekend. again, congratulations on great coverage. we're here for "the half" at post 8, where over an hour ago, twitter did go public. the most anticipated ipo clearly of the year. the stock was priced at $26 a share. it opened at $45.10. it was more than a 70% gain. the stock now is trading at 45.60, about a 75% gain. we are covering all of the angles today, and in just a few minutes, you are going to hear from tech titan and early facebook investor roger mcnamee. what does he think of twitter's business model? what does he think of the stock?