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tv   Street Signs  CNBC  March 12, 2014 2:00pm-3:01pm EDT

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♪ welcome to welcome to "street signs," everybody. we are jam-packed today with big-time stock stories and a hot debate on how real adhd really is. but we begin with that big story. breaking moments ago, the federal trade commission opening a probe into herbalife. it is whacking the stock. it is down nearly 10%, off $6.50. let us bring in herb greenberg, who has been following this herbalife story for a long time. what do you make of this ftc investigation? herbalife coming out and politically correctly saying we quote, welcome the investigation. who welcomes an investigation?
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>> well, you welcome it if you really believe you can prove that you have done nothing wrong and nothing has been done wrong. i have to tell you something. in this case, this is a long overdue move by the ftc. they really haven't taken a look at a large multi-level marketing company in many, many years, since amway. since then, there have been a lot of smaller cases. there is an academic paper that was just published, i have written about it on the street.com, co-written by the ftc's pyramid scheme chief, the person who knows the most about pyramid schemes that the ftc as an economist, who would weigh in on this stuff. this is very important because you look through this and you can see where the ftc actually may be headed. >> you say this might be a long time coming, but herb, in terms of the timing today, how much do you think this is a direct result of the agitations, particularly the political agitations of bill ackman? >> what i understand is that the
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ftc has sort of been in a pressure cooker with this thing because the s.e.c. has been in there investigating, the ftc has been kind of mum, so they haven't enjoyed being in this pressure cooker but at some point, where it's not just what bill ackman's saying, it's the political pressure, it's people saying wait a minute, we have to take a look. i think the ftc in the end, in the very least, will end up -- could end up revising some guidelines as it relates to herbalife and the entire multi-level marketing industry. because this industry has skirted regulation for many years. >> herb, you are not the only person who has been very closely covering this stock. scott wapner has been following the developments as well and has breaking news on the story now. scott? >> well, i'm just going to tell you, looking at the stock, happy to get herb's input here as well, it is clear that the bulls so to speak in this name are helping to support this stock, because the fact that herbalife is still trading above $60 a share after an announcement like
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this, to me, it says something. let me give you some other color as you have very interested parties here in carl icahn and bill ackman watching every tick of that chart on your screen right now, just like the rest of us are. the best we know is that carl icahn was buying initially in the low 30s, then the low 40s. so he is well above water at this point as this stock is so active right here. bill ackman, from what i understand, had been buying about 45 to 50 or so when he launched that short and the stock was knocked nearly in half before it recovered. a stock that has traded north of $70 not all that long ago, which was an all time high. there are other big names in here, some big hedge funds have been in here. bullish names who have continued to support this stock. one can only speculate as to whether they have used part of this news, part of the downtrend in the stock over the last 20
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minutes or so to buy more stock. those are all questions that need to be considered. but i'm sure even you have to be surprised that this is a stock at $60.50, some 15 minutes after an ftc investigation was announced. >> well, i'm not surprised that it fell further first because you have the weak-handed bulls in this thing who just leap out at the sign of anything because they were in there just almost like a trade. but look, i think you have to believe if the big holders genuinely believe that this was a great stock no matter what, that there would be no investigation, and by the way, an investigation could take years, just so people understand that, that they come back in. hey, it's a gift to them if they genuinely believe that. >> guys, let's not get caught up too much in the weeds of this and that. let's talk about ftc and what they may say. i know you have gone into this kind of stuff. isn't the ultimate concern and ultimate outcome in a name like this, would the ftc force a change in the business model for
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the multi-level marketers, all the criticism seems to be around who is selling what to whom. is there a chance the ftc could say you know what, you can't sell to quote, unquote, distributors, you have to sell it like this? if they change the business model, wouldn't that be a far different story for herbalife, nu skin and others? >> well, you have two things going on. you have a potential investigation but what you're talking about is actually an excellent point. it gets to clarifying some ambiguity that has been out there for years, actually since 2004, to be exact, where the ftc has sort of allowed the companies -- the companies sort of pointing to a certain letter the ftc wrote saying we sell to our own distributors and count that as retail sales. in the end for this entire industry, the key will come down to what are retail sales, where are you getting your revenue, where's the revenue genuinely coming from, is it coming from distributors making money off recruiting or really selling to unrelated parties.
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that's what it really boils down to. >> the other key point to consider here, herb, i know you have heard it from some of the bulls in this stock, who say okay, let's assume there is an investigation. now we know there is. what happens if part of the u.s. business is shut down or whatever happens, a big percentage of herbalife's business, a greater percentage is overseas. that rests largely in the bull cases as well, that people always mention, okay, so what if something happens in the u.s., this is a company that still operates with a huge business overseas. >> nonetheless, i'm sure a lot of mlms are watching what happens. sorry, herb. i want to get to kate kelly, who is in the cnbc newsroom, because you also have news for us. >> thanks, mandy. i have just been communicating with hedge fund managers, some involved, some not involved in this name. it's been quite a battle, really, since bill ackman announced that he had this herbalife short in december of 2012. on the long side, you see some of the biggest players in money management, including some major hedge funds. you have obviously carl icahn in
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the lead position, also george soros with a significant stake. capital research and management. v vanguard, fidelity, traditional old line institutional managers. on the hedge fund side, from what i'm told, those in it on the long side with one or two possible exceptions are in it for personal reasons. because they disagreed with bill ackman and disagree both either with his thesis or tactics in terms of trying to launch this long awaited investigation. at least long awaited by him. in terms of the merits of the ftc probe itself, one thing i'm hearing is herb mentioned this, it will be key whether the ftc reconsiders its 1979 ruling in terms of amway which gave basically a safe harbor to a lot of multi-level marketers and provided sort of safe cover for companies with a model like herbalife's. whether or not they reexamine that will be the essential issue. right now from what i'm hearing, a lot of fund managers are on the sidelines, just awaiting a little more clarity before they see this as a buying opportunity or a chance to agree with
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ackman. >> let's read something from the ftc. we don't meaneed to dance aroun the topic. they are incredibly specific about this. this could be the crux of the ruling. here is the direct quote. i will read it from the website so i just pulled it up. forgive me for looking down. this is direct from the ftc website. not all multi-level marketing plans are legitimate. if the money you make is based on your sales to the public, it may be a legitimate multi-level ma marketer. if the money you make is based on the number of people you recruit and your sales to them, it's not. it's a pyramid scheme. pyramid schemes are illegal. that direct quote is the crux of what bill ackman is claiming herbalife is. it seems like this should be a pretty doggone black and white ruling by the ftc. >> again, i think, brian, personality has become so dominant here, perhaps too much so, rather than the merits of the issue that i think many people are surprised simply
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because ackman is such a galvanizing figure and we read in the "new york times" this week that he had really become -- he was lobbying at the grassroots level and spending money to kind of get political support for this effort. i think many people in the hedge fund world at least didn't expect it to actually happen. >> bottom line, herb? >> very important. this is very important. that is, there is equal to that 1979 ruling, though, is a 2004 letter written by the ftc, the direct selling association. this has been thrown up in every critic's face including mine when i was doing research for the cnbc documentary "selling the american dream" and it was thrown up to basically say it's okay to sell to our distributors. that is also going to be critical if that is refined. i can't stress that enough. >> we have to leave it there for the moment. great commentary, everybody. at this stage, the stock is down about 8%. it's bouncing around a little bit when it first resumed trade it was down as much as 15%. we will keep a very close eye on the story as it continues to develop. up next, the market top o'meter may be sounding the alarm. we have a couple big headlines
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back to back to the markets now. three somewhat troubling headlines for three publicly traded companies. first of all, gm and the
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continued drumbeat from law makers to get clear answers on that sweeping recall. second, tesla planning to fire back at new jersey after the state banned direct sales of the electric car. and number three, troubles continuing to mount for boeing 787 dream liner. let's kick it off with general motors. shares down nearly 15% this year. the company facing congressional heat over a delayed recall. now there is a criminal probe into the company. let us bring in senior auto analyst at morningstar, dave winston. though this is not exactly the same thing as ford grimshaw, the famous pinto case of the 1970s that cost ford hundreds of millions, it does seem like gm could face that much or even billions in lawsuits. what's the risk here? >> yeah. the risk is really from a lot of different directions right now and is very complicated. it's a very fluid situation. as an analyst, i focus more on the financial risk, and in a worst case scenario, certainly
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several billion dollars or more could happen. it's important to remember gm still has plenty of liquidity with over $38 billion and the size of the recall relative to something like toyota is a lot smaller in terms of the number of vehicles. however, there were fatalities which makes it all the more serious. >> what would be the impact on the stock? >> hard to say. obviously yesterday we were down 5%. i think that's a bit of an overreaction. you have to look at the liquidity, you have to look at how much legal risk is there, which is up in the air right now. gm is claiming they're not liable for accidents prior to july 10 of 2009 which is the date new gm was created out of old gm's bankruptcy. if that holds true in court, that could drastically limit the liability. >> let me phrase this differently. if the news is going to get worse before it gets better and we continue to see any damage to the stock, is it a buying opportunity fundamentally going forward? do you think the company is in good order? >> for the most part, yes. they have a lot of work to do in
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their international segment, gmio to continue to turn around. they made a lot of progress in europe cutting their loss by roughly half last year. they still have a lot more economies of scale to realize. they can adopt more common platforms. they just have to get past this recall crisis first. 96% of volume by 2018 would be uncommon platform compared to 29% in 2010. that's a lot of scale. >> pfizer halted. i want to jump in with dave. sit tight. pfizer halted for news pending. we don't know what it is. that's why they call it news pending. we will bring it to you. down 13 cents. to follow up on mandy's excellent question, given the potential risk and the product makeup, is there any reason to buy the stock? are they going to sell enough cr cruzes to make up for the loss? >> absolutely. it's on our best ideas list. >> still on your best ideas list? >> yes. obviously that could change if the recall risk were to get
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severe, really depends on that criminal probe. you just don't know. but gm today is making much better vehicles than these cobalts and saturn and pontiac don't even exist anymore. look at the j.d. power rankings and consumer reports ranking on the new impala. these are actually small cars that detroit makes now. they are cars people want to buy rather than buy just because they're cheap. >> thank you very much for your comments on gm. let's move on to tesla. the story we broke right here on "street signs" yesterday. that is new jersey banning direct sales of teslas but tesla out today saying it will fight back. how does that impact the stock? joining us is craig owen. you don't care, even though we were saying yesterday that all the other states are obviously going to be watching what happens in new jersey because this could set a precedent, other states could go and vote to ban tesla sales as well. you don't care. >> no, i don't care. there is a lot of back and forth
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on this issue. i think that if we look at the situation, you can still order a model s on your iphone, go pick it up in pennsylvania, new york, connecticut, wherever you like, all the buyers in new jersey are still going to have access to the market. it makes zero difference. >> is this, though, and i think personally you are minimizing a bit but you know more than i do, is this tesla's alamo, so to speak? if they fight and lose, auto dealer associations in every other state might feel very emboldened. how important is it tesla wins? >> well, you know, it's going to end up being very important but there's a history of capitalism in this country, competition, and the auto dealerships have not proven the benefit for tesla to go out and use their model. they sell direct because they see this as a more efficient, more effective way the reach their customers, where the dealerships can't do that effectively for them. they see them as conflicted and you know, this society we live
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in is based on capitalism and competition. it's a good thing. >> you've got a price target of $295 with an outperform currently sitting just below $240. craig, thank you very much. two down. one more to go. story three. let's move on to boeing. the once teflon stock now down about 8% this year and problems keep mounting for its 787 dreamliner. just a few days ago, the company reported cracks in the wings of some 787s in production. let's bring in carter copeland. every time there has been an issue with the 787, it seems the stock just continues to go up, in part because of the huge backlog of orders. we get it. but are investors finally starting to get a little nervous about boeing? >> i think to a certain extent they are. this all comes back to why do investors own boeing. all of these issues, whether it's the battery issue, the cracks, the recent 777 that's gone missing in asia, all of these things impact sentiment
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but ultimately, the reason that investors own boeing is for that relative growth and the visibility afforded by a very large backlog and oh, by the way, for cash as well. so to the extent that these sorts of problems weigh on near term cash flow, i think that sort of weighs on investor sentiment and i think that's what you've seen so far this year. that's really the cause of the stock being down year-to-date. ultimately the question is do you put those problems behind you and deliver the airplanes and see the cash at a later day and will people continue to believe in that. >> carter, to your point, year to date it is down about 9%. would you be a buyer here? >> yeah. i think it's going to take some demonstrated progress on the cash front. i think the big underwhelming moment for the year was guidance for 2014 was lower than the street was expecting and i think that's really weighed on the stock. i think it's not likely that we get big cash flows in the early part of the year and people really want to see progress on the 787 cast curve but i think that materializes as you make your way through the year and
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the stock ultimately trades at a higher level. >> carter, thank you very much. you have a target of $147 and rating of overweight. we are keeping an eye on pfizer. the stock has been halted pending news. we will bring you that news as soon as we get it. still ahead, game stocks gone wild. will the next hot stock leave i a belly ache? two big headlines that might see hearing the stock market talk. you be the judge. huh, fifteen minutes could save you fifteen percent or more on car insurance. everybody knows that. well, did you know pinocchio was a bad motivational speaker? i look around this room
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the dow and s&p are marginally lower but the s&p is still less than 1% away from its record closing high. pfizer is the stock we are watching. this is because it is currently halted. as soon as it starts trading or as soon as we get any news, we will of course bring it to you. we are working the phones here. we want to know the news and bring it to you as soon as possible. and we also promised you an incredible stat to outline how hot the stock market has become. we like to keep our promises. here it is. check this out. t.d. ameritrade's average trades per day hit 501,000 a day in february.
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so more trades per day than ever before. here's a bonus stat. the new wells fargo investor and retirement optimism index also just surged. in other words, people are optimistic and they are getting involved. let's bring in wells fargo's joe reddy. i love the stats. i love the optimism. god bless america. here's the problem. we tend to know retail investors get in at the wrong time. do these stats make you in any way nervous? >> well, you mentioned investor optimism is up for all investors 12 points. when you really take a look at it, what's behind it is retiree optimism. they surged from plus six to plus 41 in just three short months. so the overall optimism is up but it's really driven by retirees who have a good outlook in terms of their ability to maintain current income or generate higher income rates from their current accounts, really driven by favorable stock market outlook and i think the prospect for higher rates. >> to brian's point here, at
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what point would this indicate we are reaching a peak? what are you looking for that would perhaps put the warning sign out there? >> part of the survey really got to what i would say is a fear from investors. 62% say their current gains, with a 30% increase in the dow, has not changed their fears about another correction. in fact, 58% said they believe a correction will occur over the next 12 months. so clearly, there is a hangover from the '08 -- >> will they pull out or are they also saying they stay in? >> the good news is 70% say there's a market correction, they will stay in. 20% said they would take it as a buying opportunity. we really view that as a positive sign. but clearly, investors are nervous in terms of the long term prospects for their retirement accounts and growth in their plans. >> interesting findings from joe ready. thank you very much for your time. with this growing optimism from retail investors, should we be getting nervous about the markets? let's bring in michael cogina, matt mccormick, who made it all
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the way here. great to have you with us. are you nervous? >> a little bit. i think when you look at certain aspects of the market, particularly nondividend paying stocks, people seem to be paying large and excessive premiums for 81 stocks in the s&p. when you look at valuations from a trailing p.e. perspective, non-dividend paying stocks are roughly 30 times. this is exactly what it was back in '07. we all know what happened in '08. certainly areas, i would be a little nervous. the blue chip companies, i'm very optimistic about. >> gray point. matt basically saying you got to differentiate the names. plug power yesterday traded 250 times its float in one day. that doesn't mean ge or ibm are overvalued. we will go back and forth. ping-pong interview style. >> no, it doesn't. i think investors need to temper their expectations. we have had a heck of a five year run and i think the market's going to be challenged given the current restraints on the economy right now to match
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that five year run going forward. that's not to say it couldn't happen. i know we are all optimistic. i think the likelihood of the next five years will be as good as the last five will be hard to achie achieve. >> what does temper mean to you? sell stocks and buy guns and gold? >> i do like gold in the long term for different reasons. no, what it means is i think you can still make money in the stock market. corporate earnings are growing. they are growing at single digit rates. as long as the economy holds up at this sort of goldilocks low growth mentality, i think you can still make money. i wouldn't expect 30% returns like you had last year. >> if we are going to get picky, what would you pick? >> i like technology but i like ge. i like companies that pay me to own them. i think technology is the best sector out there with the second lowest payout ratio, strongest free cash flow. >> like qualcomm? >> i was just out in san diego last week. they increased their dividend 40% last year, 20% last week.
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there will be a lot of dividend increases coming from technology. that's the best sector to be in right now for income growth. >> you are an old school guy yourself. some of your picks are old school. you like the oil names here. i haven't heard 66 mentioned in awhile. >> yeah. i would mention i agree with matt on technology, but i would say other growth industries as well. i see the u.s. energy industry is a growth area. we are looking at the refiners, holly frontier, phillips 66 as well as freeport, which i know all the negativity on gold right now which is making a stock attractive from an entry standpoint but it has a 4% yield so that would temper the risk in that stock related to copper. if the concerns in china are real. we do like natural resources. we like growth areas in natural resources and energy definitely fits that bill. >> right now, natural resources like copper are getting slammed. absolutely slammed. china with the slowdown there and the concerns coming out of china, we have to watch what's happening to the miners. got to leave it there.
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thank you. still ahead, we will change gears here. a $9 billion myth. that's what one veteran doctor is calling adhd. it's a conversation that is sure to stimulate debate. first, we will be talking magic kingdom. ♪
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youwe told we told you earlier that pfizer shares were halted. here's why. the company coming out and saying that it will appeal a ruling that was just made in the eastern district of virginia that invalidates the reissue patent for celebrex. let me put it into plain english. pfizer wanted a reissue patent for celebrex. a judge said no, you cannot. pfizer was planning to sue companies using what they believed was their patent, names
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like teva pharmaceuticals but a judge saying no, we will invalidate that reissue ruling. pfizer saying we are going to appeal. it's a big lawsuit, children all go to law school, lawyers always win. disney could be gunning for one of facebook's top executives. according to reports, media giant wants sheryl sandberg to replace bob iger in 2018. she holds a seat on disney's board and reportedly had talks about her interest. does this mean anything to disney stock? it was already trading at an all time high. let's talk numbers. zach, do you care? >> well, 2016 is an awfully long time away, even in the world of blockbuster marvel disney movie releases being planned years in advance. i think the reality is if you think disney is firing on all cylinders as a robust multi
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media theme park, movie, entertainment company, and i believe that it is and i have owned the stock for awhile, that's a good reason to own disney. speculating about who the ceo is going to be in a bunch of years, i understand why we're talking about it and it's not a bad news peg, but it's not why one owns the stock currently. >> do the charts care? take a look at the technical side of things. >> yeah. there's really no surprises at all. the stock has been in the uptrend for a multi-year period now since 2011 and what that uptrend tells us is that the company's building value and the stock price is reflecting that. current holders don't want to sell anything and people who don't own it are trying to buy it and accumulate it, pushing the price higher. we would think that it continues to climb that trend. >> so climbing the trend means buy. >> it usually does until we see a really strong signal that the trend is at risk or ending. we haven't seen anything like that and in fact, the price action thus far continues to depict a stock under
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accumulation. >> zach, would you also then say buy? >> you know, i own this because i think it's a really good proxy for consumer entertainment spending in the united states and globally. i don't think the stock, you know, it's done better than i thought it would and i'm perfectly happy with that, but you know, at some point i think this is more like an attractive way of accessing if you think that kind of consumer entertainment discretionary spending is going to continue grow and be strong both in the united states and globally with a well-run company. but it's that kind of stock, it's not high beta, it is not unbelievably sexy. >> maybe a little bit of magic left but certainly not a treasure island for most investors. >> very good there. >> that was unpracticed. thank you, guys. appreciate it. be sure to check out the online edition of talking numbers, part of our partnership with yahoo! finance. next, the maker of candy crush is hoping wall street is a big old sweet tooth. we will decide if it will leave investors with a belly ache
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instead. we will debate that. we will introduce you to a doctor who has been studying adhd for generations and says it's a scam. sure to generate debate there. first, a very interesting "closing bell" with one of my top all time favorite musical artists. he has seen the needle and the damage done. >> yes, he has. we will get to that in just a second. we have a lot to cover with the herbalife and pfizer and everything else going on here at the big board. meanwhile, the senate is inching closer to a plan that would replace government-sponsored entities fannie mae and freddie mac. national association of home builders ceo jerry howard joins us to tell us what that deal would mean to an incredibly important part of our economy, famely housing. also, we are checking in with tyson food's ceo donnie smith about rising prices and the company's expansion into the china market. yes, sullivan's favorite, neil young. that neil young launching a new music player which he says will move digital music finally into
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quick quick update on the markets for you. the nasdaq there slightly above water. in fact, it's really trying very hard to avoid a five day losing streak. that is something that did not occur for the whole of last year, can you believe that. as for the s&p, slightly lower but still less than 1% away from its all time closing high. it's only about .7% away from that. candy crush maker king is hoping investors have a big sweet tooth for it. the company says it is seeking to price its ipo in the $21 to $24 a share price range. that puts an equity value at more than $7.5 billion. the company expects to go public later on this month. unbelievable. >> yep. your next guest says there may be a big red flag here that is not being taken into account not only in king's ipo valuation but perhaps with already traded stocks like zynga. let's bring in tony wybell.
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i loved your research report this morning. you did a survey of a couple hundred multi-generational gamers. what did you find? >> basically one of our concerns has been that time and attention as well as money rotates from casual games going back to some of the console games. what we found is that 60% of the people who end up participating in this system end up playing these social games and an overabundance of them actually end up paying. so when we asked them if you are going to continue to pay the same level going forward, 73% said they were going to spend less. so my assertion is that there are these whale gamers there. when you look at the active payer base for somebody like zynga, they have 1.3 million people who pay all the bills, there's a disproportionate amount of those people who are hardcore fanatical gamers. >> to put this into play, what does it mean for the social game stocks like zynga which already lost about half of their value since their ipo back in 2011, as
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social games, the popularity has waned. >> it's like investing in '80s rock bands. te at the end of the day you hope to find a van halen but a lot of people have been searching for that. think about a company like disney, lots of capital, lots of great brands, a great track record of churning out great management but they just had to fire 25% of their staff. they just can't make it work. electronic arts can't make it work. even zynga, when you look, they have been losing about 300,000 active payers every quarter. when you have 1.3 million left, there is only so much runway. they literally bought more time by taking cash off the balance sheet and buying more. that's not necessarily a reason to say you are going to succeed. >> you want tesla and end up with winger. that was a bad analogy. any reason to own zynga at all? >> if management is true, and mobile ends up catching on and they do have another hit game, absolutely. >> what are the odds of the hit
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game? as somebody who flies a lot, they are neat at first and then they all seem completely derivative of each other. >> "gone with the wind" was a great movie at one time, too. it's the case of time. take a game like candy crush, 8% of king's revenue is tied to that. i think it's a dicey proposition which is why we stay away for now. >> they are going down to $4.25. game stop is a buy. people going back to the gaming consoles. have to leave it there. thank you. still ahead, adhd does not exist. that's not us saying it. you will meet the veteran neurologist who is making that controversial claim, ahead. one good investment, just read the tea leaves.
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attention attention deficit hyperactivity disorder, more commonly known as adhd, does not exist. well, that is at least the controversial claim in a new book, "adhd does not exist" by dr. richard saul, a behavioral neurologist who has been practicing for 50 years. we will talk to him in just a moment's time. you can see him on the screen.
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first, this story has major business implications as well. sheila dharmarajan reports on the big business of treating adhd. >> i will let you talk to the doctors about whether adhd actually exists or not but there's no argument that it is big money for big pharma. cdc data actually shows that adhd diagnosis has been made in 15% of high school children and if you look at the number of children who are on medication for it now, we are now at the 3.5 million mark. that's up from just 600,000 in 1990. when you look at sales of stimulant drugs used to treat these children, now, $9 billion, more than five times than just a decade ago. when you talk about players in this space, you talk about scheier pharmaceuticals, the company's number one drug by sales has seen sales nearly double over the past five years. even adderall which raked in
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nearly $200 million. you talk about novartis with its ritalin drug. another player in the sector which brought in $600 million in sales last year alone. both companies have come under fire for overmarketing the drugs. in fact, recently, shire reached an agreement in principle to pay nearly $60 million in fees to resolve allegations of improper sales and advertising. here's the thing. when you look at these numbers, there is no doubt that the business of treating adhd is a big one. the question, though, of course, is whether it's thanks to the doctors and their diagnosis or the drug makers and their marketing. back to you. >> thank you very much. now let us bring in dr. richard saul who after 50 years of studying attention disorders says that adhd itself as we know it necessarily does not exist. doctor, welcome to the program. obviously this is going to be a highly contentious subject. mandy and myself both have young children. our friends, our parents, they all talk about this. what makes you so certain that
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adhd is nothing more than perhaps a scam to sell drugs? >> not really a scam, but it exists only in its symptoms. all of the impulsive distractible short attention span are symptoms. i don't think the condition exists in itself. >> what does that mean? the symptoms? >> so there are 20 or 24 different conditions that have those symptoms, and they're not adhd. they are whatever they are. so if it's their thyroid, their thyroid medicine, if there's anemia, there's iron to take. if it's an emotional condition like depression or bipolar disorder, those have to be treated. they're not adhd. they say frequently they are comorbid, in other words, they go with the condition, adhd plus depression, but if you treat the
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depression, the adhd goes away. so i don't believe they are comorbid. i believe they are what they are. >> dr. saul, we did reach out to shire, the biggest drug maker of stimulant drugs, as sheila was saying a moment ago. i will read a portion of the statement they gave us in a moment's time. in the naturally the drugmakers who sell these drugs like ritalin and adderall, they have a big vested interest in making sure that kids, adults continue to be diagnosed with adhd. do you believe that the drugmakers are either largely or in part responsible for pushing the diagnosis of adhd? >> in part, yes. they're in part. the doctors are also in part because the drugmakers can't prescribe it. the doctors have to prescribe. >> okay. we have the response from shire here. it reads, again, in part, adhd is world recognized and accepted in scientific and medical communities as a very real and
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treatable psychiatric disorder. in clinical studies in clinical practice, these medications have proven to be effective. we recognize drug treatment may be appropriate for all patients with adhd. if it's prescribed, it should be done under the care of a physician and may be used as part of a total treatment program that may include counseling and/or therapies. dr. saul, on the back of that, you say that two-thirds of the kids that are on adhd drugs respond poorly to them. in other words, they are taking drugs that are doing nothing for them. >> that's right, and the one-third that do respond to stimulants respond partly to stimulants and partly to other medicines that are not stimulants that are used to treat neurochemical problems. those are the ones that should be, if there was such a thing as adhd, that would be the smaller group, and it's not quite two-thirds. >> you know, doctor, i actually
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spoke with my doctor this morning. i asked him whether he believed what you were saying. he said i kind of do, so i do believe adhd exists but here is where he said the problem lies. the standards for being considered having adhd are so sort of amorphous, right, and subjective, that people can come in, and he's had people come in and say, well, i have these issues and i want some adderall because it's a stimulant. is there any way to tighten up the standards so that people can't game the system if they're trying to? >> absolutely. and in the book that i wrote, one-third of the book is how to make the right diagnosis, what tests you can run, what questionnaires you can download from the internet, and then bring that group to your doctor. but what i'm saying is that there are medical conditions other than so-called adhd that mimic those symptoms. so if you have a checklist, and
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a lot of the big pharmaceutical companies give out the checklists to the doctors, you're going to have adhd, and now this last year the psychiatric association made the checklist shorter. you only need five things of their list of things in order to make that diagnosis. so talk about gaming the system, people would like to get adderall to help them at work, so they can focus, to help them do better -- >> very quickly, you mention part of the problem, the internet. too much information, a lot of misinformation. if my kid has adhd or i think he may have adhd where do i go for the best information? >> you have to go to a doctor who knows about adhd as opposed to a general doctor for pediatrician. you need to find one that is into behavioral health. >> okay. >> dr. richard saul, it was a real pleasure to have you on. certainly a controversial topic
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here. i think some more digging needs to be done on the standards that have come down and who is making those determinations. doctor, thank you. appreciate it. up next, it is one of the most successful "shark tank" investments every. . no two people have the same financial goals.
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pnc investments works with you to understand yours and helps plan for your retirement. talk to a pnc investments financial advisor today. ♪ [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪
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it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪ from td ameritrade. nascar is ab.out excitement but tracking all the action and hearing everything from our marketing partners, the media and millions of fans on social media can be a challenge. that's why we partnered with hp to build the new nascar fan and media engagement center. hp's technology helps us turn millions of tweets, posts and stories into real-time business insights that help nascar win with our fans. mr. wonderful, you've got a deal. >> congratulations, guys. >> if you caught "shark tank" last night on cnbc, then you
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already know our next guest. his company is one of the most successful "shark tank" stories ever. sales quadrupled after the sharks gave it the go ahead. joining us, talbot tee's founder, shane talbot. how instrumental has "shark tank" been in the boom of talbot teas? >> wow, charact"shark tank" was turning point. it was a monumental leaping over that mountain peak and we couldn't be happier. >> i want to ask you though, how do you set yourself apart. there are lots of various special newfangled tea places out there like teavana and those coffee bean and tea leaf and various other boutique places. what is it in this tin here which is called orange cream dreams, why would i buy this? >> i'll tell you, my background is in the spa industry, and what i wanted to bring to my passion for tea is that level of indulgence and premium luxury
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quality. so what's inside that tin is really some special, high quality ingredients, the tea leaves. they're whole leaf ingredients which gives you the best flavor, the best quality of the benefits, which we all know more and more about the great -- >> how much am i going to have to pay for this tin because some places charge through the nose. >> i'm telling you, we are actually not the most expensive out there, but we're fairly high end. it is a luxury product. that tin will run you $12, maybe $13. >> okay. so talk to us about what talbott teas would have been like without "shark tank." >> you know, it really was a turning point for us because we had been self-funding like most entrepreneurs out there. we were a small business founded by steven and myself, and we were at about the tenth year in the business, and we really were at that point where we tapped out mom and dad. we tapped out the bank. we tapped out everybody we could borrow money from, and it was about how are we going to get to the next level.
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"shark tank" came at the best time for us, and it took us to the next level. it really allowed the business to grow to that next level we would have been struggling along. >> what do you think clinched the deal when you were on "shark tank." >> i think it's mostly about expressing your passion for what you do, and i really think that i bring a lot of passion to tea, and i think it's also about having something of quality. i think it's not about bringing a gimmick to the table. it's about having a real quality, real business with some numbers and experience behind it. >> thank you, shane. i'm going to go off and have may caramel sundae escape. >> do they pay you for that? that was a heck of a promo. >> be sure to catch "shark tank" every tuesday night. people say we're too coastal centric. i want to give a shout out to
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ciao baby, a restaurant in illinois. outside the city of chicago. we're thinking about you, too, midwest. we know you're out there. we're paying attention. thank you for watching "street signs," everybody. >> "the closing bell" is coming up next. hello, everybody, and welcome to "the closing bell." i'm kelly evans down here at the new york stock exchange. >> i'm bill griffeth. a lot of drama. the market is doing one thing, but there are a lot of individual stocks that we've been following today. the stock story of the day has to be about herbalife. the battleground stock now officially embattled. a government investigation has been launched and investors have been punishing that stock. it was halted for a while. you knew the drama from a couple hours ago here live on cnbc. for a time it was down 15%. it's come way off that low. we're down 5.5% right now. we'll get more react

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