nasdaq up 1%, over to "squawk alley" and continue. >> thank you so much. good morning. 8:00 a.m. at twitter headquarters in san francisco, california. 11:00 a.m. here on wall street. "squawk alley" is live. best day for the dow since the end of may. up 120 points. good morning. welcome to "squawk alley." with us as always, kayla tausche here at post nine. jon fortt in silicon valley. dennis, we'll get to you in a moment.

start with twitter today. the social network naming anthony noto its new cfo replacing mike gupta moving to senior vice president heading up strategic investments. n noto, goldman's lead guy on twitter the ipo last year. wall street likes the move. crossed above 40 the first time in a while earlier in the week, currently at 4276. bring in evan wilson, senior research analyst for internet and games with pacific crest securities. evan, good morning to you. >> hi there. >> obviously, anthony's a familiar name to the company. what does it mean to have him in the cfo spot to the street? >> well, first of all, i think you'll see a lot of happy cell side analysts this morning. anthony is a former competitor of ours and his $64 million equity signing bonus this morning i think makes us all very happy about our future prospects. seriously, i think the cfo role at twitter is, i don't think ever been a real strength behind the story, and i think naoto has

t -- noto understands how to deal with the cell side, has that cfo experience from the nfl. seems like a great hire. >> but also, evan, experience on the buy side. done a ton of deals, his mall mark from time at goldman sachs. does this poor tend more m & a for twitter, which has done small dealing in the past few years. could we see something bigger now that they have a rainmaker at the helm in that role? >> it's hard to comment if we'll see something bigger, but twit hear been active in terms of m & a over the last two years. smaller deals. we saw one with tap commerce announced last night. you'll still see them do that. twit sir in the process of building out a full ad tech stack and noto is a great guy to understand and help them gelt there. they've seen their engagement not grow to the extent they've wanted it to and are focusing on

that. i think that's why you're seeing the role change in terms of the coo. at the same time trying to generate more revenue per monthly active user. that's something you'll see a big focus from noto. >> we have seen -- go ahead, jon. >> if you can deal with this sort of negative case here that twitter's executive ranks have gone through so much turnover. just got a new product chief back in april, shake-up on the media and marketing side. one could arlg goo, the cfo maybe not a big name, outgoing cfo, usherrd them through. it's not his fault user growth isn't keeping up. is it a sign twitter still has a lot of gelling to do in its executive ranks before we get a clear story from them? >> absolutely. i think that the amount of turnover in the executive ranks of twitter -- this is not just in the twlooft or through months, but in the mystery of

the compaof -- the history of the company. relative to valuation. you should understand when you talk to people on the street and analysts, you look at the, you know, the number of buys versus the number of sells on twitter, i think that that's something that's very well known. and the amount of change we've seen in recent history isn't a surprise to the folks that are following the company closely. i think that it certainly is a sign they're not where they need to go, and so we're trying to see with the new people, are they potentially having a higher probability of taking them to that spot. >> you have a now perform, evan. price target 45. do you step in front of the quarter on this? >> we do. i think twitter has become a lot more aggressive in terms of attracting direct response advertisers to generate revenue in the near term. so we're not sure twitter is fixed its user engagement problem over the longer term. very focused on user focus in the near term and you'll see that in the consensus estimates. >> important time for the company. evan willis at pacific crest.

thanks. dennis berman, your take? >> i have a different view. executive turnover suggests to me some real operational quarter problems for twitter. the ceo left, gumt pta today. the board knows the numbers for the quarter. knows they're poor again. this is a hypothesis. they say to themself, we need to do something here. so i don't understand why the stock is trading up, if you believe this thesis, that it's a sign of weakness all these executive changes are happening. >> nice to nope the company is willing to step in and make change, they have the cahoots to do that. the fact it didn't have a key man risk, didn't have a zuckerberg or samberg on someone so integral to the company that if they left it will be

ramential. they're willing to step in and make a change, i think that's a good sign. >> the market seems to be giving the company every benefit of the doubt. what we saw about core user engagement as evan described is not so great. if they're going to start putting more direct response ads, he mentioned, is experience going to get worse and worse? all i know, again, might be my own experience, kayla, the less time i spend on twitter, the better i think. [ laughter ] the better i think. >> the more you get done and so on and so forth. >> i will argue the more time you spend, the smarter you are, but we don't see eye to eye on that. >> carl is the best. >> carl is great. amazing. but you understand? >> feels like -- doesn't it guys? at $30, people started saying twitter is a bargain. now well above $40. got another executive shift and i think a question that people investors maybe should be asking what exactly are you buying here? if you don't believe twitter is the product it can be into the future, have they made the right changes that they need to make in order to get where they're

going? who is the visionary who's going to pull the product into the next phase? and do they really need to change the cfo? is that going to be what does it? >> we'll see, jon, and obviously see when they announce earnings how they describe this and talks leading up to this and what exactly they expect noto to do in his role and mike gupta in his role previous executives weren't able to do. personally i'm interested in the buy side of this. noto supposed to go elsewhere. a nasty trade in the tech sector, giving money back to investors. he was supposed to save that and launch a new fund to help invest in private companies. he didn't even start there. was supposed to start this week, i'm told. got contacted by twitter, the rest history. what happens to that fund and where is its future in tech investing now that they don't have this figurehead. >> very odd. you have to get anthony on it maybe to explain it. raise a perfectly good question about the fund, and i wish i had an answer.

i think maybe anthony will be able to explain it. >> more, of course, on the noto move and on twitter. later this hour, kara swisher joins us later on. meantime, shares of netflix rallying after getting upgraded to buy at goldman citing international expansion, opportunity tony crease margins as the main reason for the upgrade and more online content news. yahoo! ordering a new season of the cult tv comly "community" distributed through the company's video service. nbc, of course, our parent, cancelled community a few months ago due to declining ratings, but, jon, i'll throw it to you. it feels like just about everybody wants to be over the top in some form or fashion? >> yeah. not too long ago doing the opposite of what nbc is doing would be seen as a good thing. i'm not so sure now, because the mother network is doing a bit better now. it's interesting. it's just like a conan moving to tbs-type move for them? on the netflix angle, too, talking about gopro up, what is

it? 15% at one point this morning. talking about twitter getting a bounce on another executive shuffle. you wonder, what exactly this netflix, is it grounded? sure, we've known at the international expansion possibilities for a while now. how do you really value this stock at this point? talking about the best arduous second half since 2011. are we getting a little exuberant here is my question? >> jon, seems goldman is taking's company's word at face value. you heard the executive team say international will be profitable at least by the end of this year, possibly early next year. goldman is piggybacking saying, yeah, we believe that, think it's true. >> yeah, but how profitable? the stock is now at 466 buck as share. exactly where is the fair value of that particularly if we have some of the macro issues we will earlier in the years, tend to cause momentum stocks

indigestion. seems investors and everybody watching the companies just have to be careful. >> an amazing run. looking at that chart. incredible. i do think, though, to speak perhaps in the bull case for netflix, what we're seeing now in the world cup, people crashing their corporate web servers watching streaming video, the change is happening's it's been happening a few years. but the real mass change of people watching video via online streaming is here and netflix should benefit more than most. >> goldman has a $590 price target. better than $100 upside even from here, even taking aing who at that chart, which is amazing, but yahoo! the community move, it's a little peculiar. you see declining ratings. you wonder. ned flix paid nearly $200 million to develop and hire and produce "house of cards." yahoo! is basically getting the rights to that content without having to do any of that. >> here's -- the thing, kayla, i don't really understand what yahoo! is. is it a media company?

is it a tv company? a katie couric company? >> is it nis? abroad? find the broadest appealing show they could. i don't know if this is it. i would love for someone, maybe make this a "squawk on the street" question what is yahoo!? >> yes. i know. a lot depends on what comes to market in august, as we all know. >> yes. >> great to see you again. >> great to see you. >> dennis berman joining us here at post nine. a look at markets now. dow up triple digits, first time it's happened since the end of may. up 120 points. s&p rising 12. nasdaq up 48 points. the best start to a second half in three years' time. triple digit move even on low volume. shares of green mountain in the green after striking a deal with nestle. thanks to the deal, green mountain brings the first k cup to market combining coffee and creamer in a single pod, as long as that's how you take it.

with all the green on the screen, urban outfitters one name struggling. shares down after the retailer was downgraded to neutral over at red bush. down about 2.5% on the week with the bulk of that downside move coming today. carl? when we come back, with this app you can turn all your old family photos and short videos into a full-length movie without ever stepping into the editing room. is it worth your money? we have a review in a moment. plus, talked about anthony 0 going to twitter. what will the role look like at the company? noto. kara swisher weighs in. and the battleground of technology. why he's working with both apple and google. s&p at 1972. an all-time high. back in a minute. and when i find it- i go for it. (announcer) at scottrade, we share your passion for trading. that's why we give you the edge, with innovative charting

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welcome back to "squawk alley." check out the casino stocks moving. gaining revenue since mid-2009, but analysts say the decline has been priced into the market. deutsche bank adding it thinks the worse is over, negative impacts from the world cup soccer will soon end. as a result, wynn, loss vegas, mgm all up on the day. more on the "halftime report," definitely stay tuned for that report. >> thanks a lot, dom. headed for vacation this independence day? what do you with all of the photo, what you do with the captured memories is a different

story. turning the snapshots into a video, but is it worth the cost? joining us from washington, thoughts on the new ipad app and walt good to see you this morning. >> good to see you, carl. >> i always come back from vacation, and i go straight to the desktop and i spend the next two days trying to assemble this into something cool. how does this work? >> well, it should save you two days, carl. more or less. here's how it works. so it's an ipad app. and you basically have three steps. you click create a video. it pops up a popout window where you can pick either photos or video clips that you've taken from your camera roll or photo stream. then it let's you pick a kind of overall theme for the video. there are ones tied to holidays or different styles you might want your video to look like.

and a song. they have licensed hundreds of songs that you can pick from. and then you click preview. in 30 seconds it make as preview of this. it can be in the paid plan. could be up to 10 minutes long, and you watch the preview. if you like it, you hit save. it renders it up in the cloud. you can actually go and do other things on your ipad, you don't have to keep the app up while that's going on, but that only takes a matter of minutes, and then you're done. and you've got a -- a highlight reel essentially of, let's say, your july 4th weekend or your trip, 0 are a wedding or whatever it is, that you can -- >> walt -- >> share on facebook, e-mail, whatever. >> hey, walt, i'm wondering how you see the value proposition of this ipad app versus where an mo animoto started on the web? apple's getting a cut, people

putting more money out front. does this feel more polished in the web experience? something people will feel better about using even in the web? >> that's a terrific question, jon. i think -- i do think it was more polished than the web experience. they started on the web. they also have a phone app that's a little more restricted, because it's a phone app, but this -- the ipad is kind of to me the right middle ground for this. it's not that you -- you can't go to the web. in fact, because it's cloud based, you can start itten 0 the i pad and finish it on the web or vice versa, whatever, but i really like using it on the ipad. it really -- worked well for touch, you know. you can swipe over and delete things and you can move things around with your finger, reorder them. it just seemed to work. if anything, more quickly. to me in a more satisfying way on the ipad, and the cost, by the way, is a -- there's a free

one. a free version, which, you know, gives you about a 30-second highlight reel. >> that sounds very long, walt. i know a lot of us have a lot of pictures and photos we come back from vacations with, but this product requires you to go outside the ecosystem you are already using, whether i-photo, google photos, flickr, whatever you use. i'm wondering if you think this is something that will become so popular or is so easy that it won't be commoditized by one of these other services? >> it certainly could be, kayla, but i don't think it requires you to go outside the ecosystem, because it picks right from y r your, for instance, from your photo stream, which is a cloud-based thing from apple, and they are in the process of adding things like dropbox and other things as sources. but i was going to say, that the paid version, there are two paid versions but the paid version most consumers use is $30 a year. $5 a month, if you want to do that, and only pay for it for a few months.

and i don't -- it doesn't seem prohibitive to me for the time you're saving and for the satisfaction it gives you. >> yes, yes. they're only young once, walt. we know that. right? >> that's right. >> walt, have a great fourth of july. thanks for the time. >> you guys, too. >> and a reminder, nbc news has a minority stake in recode and a content sharing partnership. when we come back, the surprise of the morning. anthony noto, moving to the social nedwork at the new cfo. what exactly is going on over at twitter? kara swisher has answers, a little later on. plus, this is the part of the program where we make you feel old. the original sony walkman celebrating its 35th birthday today. a look back that iconic piece of technology that moment. one more look at the markets. dow has its best gain since the end of may. s&p at an all-time high. we're back in a minute. [ radio chatter ] ♪

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all right. maybe it's the beginning of the month, new money coming into the market. the dow put together more points today than in the entire month of june. up 121. s&p, 1972. the best day, kayla in six weeks or so for the markets. >> even though low volume people saying the move doesn't merit much. first triple-digit move in quite some time. one to watch for sure. in case you missed it, prepare to feel old. the 35th anniversary of the sony walkman. released july 1, 1978. cost $41.95 when it launched. not cheap. inflation adjusted worth about $442 today. of course, carl, the precursor to the ipod a lot of people give apple credit for revolutionizing

music, but this was the first affordable music player. i remember going on jobs with that. skipped a lot. wasn't that effective but had it's time in the sun for sure. >> amazing device. i remember i got my first one as a kid. you were the star of the show if you owned one at school. >> it skipped a lot, kayla? what kind of walkman -- there was no tape in the walkman you were jogging with, if it was skipping. >> a cassette. when the tape came out of the actual spinners and it would get caught in the spindles, you had to take it out, rewind it and move it back and forth. >> that's not skipping. that's -- [ mumbling ] we all remember that sound from the '80s. >> and then the cd walkman. a little later. there was skipping there, too. >> absolutely. meanwhile, simon hobbs to talk about not 35 years ago but what happened in europe today. >> some of us remember the 8 track. a look at european markets. the sad thing, not got any pickup in the slack in the labor market in the united kingdom.

stocks slightly higher. unemployment for the year stuck at 11.6%. the jermtden unemployment numbers rose the last two months by 34,000. jpmorgan saying payback for great declines in germany over the winter. big news at the corporate leapt, the find that came through $9 billion. the mp stock up almost 4% today. they say they can maintain the dividend to what they had last year and no capital raising at moment. a lot of other banks rising across europe, partly because the european union has given money to the bulgarians. a credit line to stop the run on the banks there. huge gyrations on the portuguese market. they've had to ban short selling, naked short selling on the spirit of, a portuguese bank under investigation from the luxen borje authorities. fell heavily yesterday and again today. short selling for one day and it's bounced back.

yesterday, of course, impacted the sovereign debt of portugal. yields rising. that may be why the big utilities are lower it's a of aftermath of that and bcp made substantial gains during the course of the session. the mining stocks are doing well in europe today. you keep getting upbeat broker comment on rio tinto on the basis that the iron orr prices may stabilize. former president nicolas sarkozy, actually detained by magistrates in paris today. the first time in modern french history that a former president has been questioned in this way. it's over the dealings or investigation into the former president's campaign financing, reporting la mand had access he had access to information he should not have had, goes the allegation, when he was in power, and as result, he was retained by magistrates. obviously, we're watching that. no news what they will do.

i think charge him within 48 hours but i may be outside my brief here. >> a blast of the past. >> going to run for president in 2018. that's the issue. maybe he won't do that. is there anything that can stop gopro? stock rallying again. now officially doubled since going public thursday. is that enough to make "shark tank's" kevin o'leary a buyer? we'll ask. and more on the executive shake-up from the person who knows the company better than anyone else. kara swisher joins us live. dow up 125. we are back on 17,000 watch. we've been 50 points of that. back in a minute.

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shares of gopro continue to rise into the second half of the year. trading more than double. ipo price $24. not just gopro. best day for the dow since may 21st. on the cnbc newsline, "shark tank" investor kevin o'leary joining us on the phone. great to talk to you again. good morning. >> thank you, carl. great to be here. >> we were discussing one of your last appearances here at post nine. were you not believer in at least the monetization of gopro. has the stock's performance changed your mind?

>> no. it's getting close to being a short opportunity. this is a remarkable story and i think they did a great job in spinning what is basically a non-proprietary consumer commodity. the components inside this thing available to anybody. sony, and the chip and anybody can build one of these cameras into a social media story. i don't blame them for it, but i think monetizing, basically crappy treatment of home videos on a flat form, and to spin it into social media may be interesting in today's market is eventually going to come under the force of gravity. now, i'm not saying short it yet. i'm looking at the board. not available yet. this thing could get to $50 by next week and start to be interesting, because when the air comes out it won't touch the sides on the way down, carl. >> kevin you said a little over a month ago, i know i'm right on this one.

that the company shouldn't go public. that it will eventually come way down, even below the ipo price, and i'm wondering at what point you think your conclusion will be borne out? if you plan on boroughing it once it hits 50 or whenever the borrow becomes less expensive or even available, when do you think that thesis will prove true? >> you know, kayla, i was wrong on the ipo clearly. that doesn't mean i'm wrong in my investment thesis. you have to, when you go short on a stock like this take the pay. you never catch the high. you were talking about the walkman. i'm old enough to remember how that was a huge social ma noma and came under the wave of consumer electronics. same with ipod and napster, said it would change music forever. these days the trends come and go faster. in the end it's all about free cash flow. a very tough thing in consumer electronics. i could be wrong for the next few weeks or months, but i'll go

short this stock when it comes time to borrow, because i don't believe -- i like the product. i've used it. but nothing proprietor inside it and i really don't think in the long run can you monetize people jumping off the roofs of their homes. >> an interesting point you make, kevin, about some of the other technologies. sony with the walkman. certainly had an opportunity to build on that, apple had an opportunity with the ipod to guild build on it with the iphone and ipad and did. what makes you so sure gopro can't build a more proprietary advantage on top of what they've been able to do here? >> i don't know that with certainty. if you buy the stock today you have to believe it's a 100% probability to bring in the cash flow earnings over the next three to five years that you're buying today. this happens once in a while. a hot stock with a trend behind it, but in the end, the opportunity is not going long. it's going short. going short's not for everybody. you have to put your capital behind it. now is not the time to do it on this stock. the ale locations by mutual

funds is still happening. at some point every buyer that wants it has it and that's when gravity takes hold. i love to be there for that. upside, amazing. make 50% in a matter of a few weeks. you know i'm a cash flow guy. it boils down cash flow. >> your point well taken. kevin, have you heard twitter named former managing director at goldman sachs anthony noto at the new cfo. your thoughts? is this a sign they're shuffling out of necessity or out of strength? >> you know, there's two stories here. you have to go back and remember that this guy was a really big goldman brand, moved into the 2 and 20 hedge fund world and didn't stay long. shows you it's really hard -- >> didn't even start, kevin. >> i know. the whole pard, hard to raise capital and hedge guys are having a different time even with branded people like this. what he means to twitter is, in my view, adult supervision.

i like that part about it, because he's really good at what he does, and to me i look at it from the positive side. as some somebody who cares ar free cash flow, i know exactly that noto knows what i'm talking about. had this company gets adult supervision like this coming into management ranks, eventually it has to answer to me. show me the free cash flow. when do you pay a dividend, when does it become profitable until oh li o'leary furnds and i'll look at it. i lick it, i will, will r when it becomes investable. >> and texas instruments, cash flow. recurring theme there? >> yeah. i like adp and visa now along that in the funds because we like the whole global infrastructure click charge model, and we think they're going to generate a lot of free cash flow, increasing dividends. qualcomm, agnostic to brand. i don't care if apple or an broid win. 85% of the markets and lt markets. got to be exposed to that.

it's the future. texas instruments gave up competing with qualcomm and filled in all the rest of the space. in the analog space. very, very disciplined management there. i think they're going to have a target of 50% of the average free cash flow in the last four years meaning i see a dividend increase in my kind of thing. getting exposure for tech back end of the year and dividend potentials is what i'm all about. >> nice to know you don't hate everything. we'll have you back when gopro gets to 50 to hear your thoughts. >> i love cash. i'm in love with cash, kayla. >> kevin o'leary. famous words there. thanks so much. and over to dominic chu for a quick market flash. >> dividends, n nordstrom as session highs. maintaining a buy rating on the department store retailer citing in part its important anniversary sale this month. stock currently up a percent near session highs.

stock up 10% for the first half of the year. a solid start and, of course, carl, that 2% dividend yield. back to you. >> dom, thanks. when we come back, the inside story behind twitter's surprise executive change. kara swisher joins us with details. rick santelli what are you watching? end of a quarter yesterday. not long before the fed puts out its quarterly debt and credit report, and phil lebeau you four on the four lebeau, talking about car sales today. we're going to hit a big number in car sales and talk about debt in general. the big number -- 55 and 30. you're have to come back after the break to find out what those big numbers are. life with crohn's disease or ulcerative colitis

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if you're a current or former military member or their family, get an auto insurance quote and see why 92% of our members plan to stay for life. coming up at the top of the hour, pulling the tape and hitting rewind to check in on traders big calls from the beginning of the year. place bets on the casino stocks. impacting this sector. should you double down and gopro a huge first week of trading's find out what could possibly let the air out of this and other high-flying helium stocks. all that straight ahead on the "halftime report." carl? >> melissa, you might also have dow 17,000 to watch. kaurnlt currently within about 38 points are so of that level.

we've been here before and turned away, but we'll watch that again closely. >> a little over a week ago on watch for that again. we'll definitely keep an eye on that. meantime, get to the cme group. rick santelli with "the santelli exchange". >> thanks, kayla. i know there are certain things in our society that become synonymous, but they certainly shouldn't be. and i think that what i'm referring to here in an aggressive fashion is how debt and income seem to be interchangeable parts from the vantage point of central banks. i'll give you an idea. a consumption economy and the president early in his first term whatted to convert it into an export economy. i understand why and it's funny. china that is an export economy, doing its darndest to create a consumption economy. the backbone of a successful consumption kpip is that the consumption is paid for with actual income.

versus debt. give you examples. the big number we had before was 55 and 30. what those are is, the percentage of subprime in the auto sector. 55% for used cars. 30% for new cars. and i'm not saying whether we're going to repossess these cars or not. i'm just looking a the notion of where the horsepower in the economy is coming from. knop the even talking student loans. subprime for 2013 up tenfold from about 2 plus billion to 22 billion. all right. so we're going to talk a little bit about debt in its own words, and the reason i say, in its own words, one of the most common talking points on the trading floor, trying to rationalize, square, come up with the rationale for a 255 tenure and stock bomb and record stock prices. according to the fed, came out

in may, a little old. since we ended the second quarter yesterday, in another couple months we'll get the next report. what it told us is still important. for the first quarter, aggregate scooper de er keeper debt from the fed up $129 billion. the first time since the third quarter of 2008, and we never like to look back at '07 and '08, three consecutive quarters of increased debt. the total consumption of consumer debt, 11.6 trillion. what's the point of all this? you know, if we oversimplify, a period where females that normally stood home, in the marketplace earning a living, that helped. the real issue, if we continue as a country to fuel our consumerism with debt, there is no way the bond market's going to be wrong, because until we start to get the income equation moving, the central bavgs banks can't do enough. ultimately, end game, can't fuel

an economy on debt. back to you. >> rick, thank you very much. rick santelli. when we return, forget gas mileage or that comfortable leather interior. technology drives the car industry. week talk about a big bet on tech, in just a minute. when he agreed to cosign for his daughter's credit card... he thought it was the end of the conversation. she didn't tell him that her college expenses were going up. or that she maxed out her card during spring break. when the satellite provider checked his credit, he found out his daughter didn't pay her bills. but he's not worried. now he checks his credit report and score at experian.com, allowing him to keep track of his credit and take a break of his own. experian. live credit confident. i research. i dig. and dig some (trader more. search. because, for me, the challenge of the search... is almost as exciting as the thrill of the find.

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we see the dow trading above a record close and the best month, sorry. the best start to a second half since 2011. a bunch of funds, statistics all over the place. >> august 2011, remember, the debt downgrade, it all was given up quickly. >> meantime, audi june sales up impressive 23% in june showing the automaker is becoming a force to be reckon pd with in the country. phil lebeau joins us with another exclusive guest. >> thank you, carl. i want to bring in scott keio, president of audi and joins us from headquarters in virginia. scott, heard about the percentage sales for the month of june. people can't fully appreciate how far the company has come over the last three or four years. give me perspective from where you stand now? where is the strength coming in terms of the growing sales? bringing in from other brands or bringing these people, existing customer, and bringing them back? >> well, phil, i can certainly

appreciate it. as you said, june, up 23%, and really, it is a conquest story. just to give you some perspective, in 2009, the entire year of 2009 we sold 82,000 cars. if you look at the first six month s of this year, 82,000 cars. the growth is staggering. seeing business come in from bmw, mercedes-benz, lexus as you expect, but the new car bringing in non-business luxury as well. it's really been a boom for us. >> talk about the a3 in a second. how much of the growth in sales is driven by leasing? by people saying, i want to move into a luxury vehicle i can't buy but i can lease. how much is that fueling sales? >> you know, phil, look at it, we've believed in a balanced portfolio. our release pen strags dramatically lower than many competitors. we think a balanced business.

apr, cash and leasing, our business is around 40% leasing. the rest comes from non-lease business, and we feel that's a healthy way to do it. i think the other important thing is the amount of incentives. if you look at our incentive spend, we're growing. incentive spend is down. our cars are transacting where they should. that is a sign of a healthy business. which we've always promoted, as you know. >> scott, talk about the a3. the 4g lg component in the tech package, one of those getting a lot of attention. are you finding people are saying, 4g is really going to become the standard they're rile require in vehicles in the future, we're getting it through our cell phones or other devices. we want it in the car as well? >> 100% phil. that's why we push for it. we want it integrated with the car. it's safer that way. allows you to use voice kmoonds, be hands-free, exactly what we believe in, as you know. we were the first brand to do

it. it's in our a3 and we are seeing the reception as huge for this. as you know, more and more information is coming into the vehicle from google map, the point of interest searches, to locations, and with that you need the speed. if you can't process all of that information, it's going to be slow, and we all know business is moving fast. customer expectations is fast as well, but we've had great success so far with it. >> scott keogh, president of audi of america joining us from the company's headquarters. on the day they reported sales gains of 23% for the month of june. carl, one other thing to keep in mind when you look at audi, compare audi sales this year with cadillac, audi passed cadillac in terms of sales this year. gives you sense of how they're continuing to move farther up the charts when it comes to luxury sales. >> wow. that number will get your attention. thank you, phil. our phil lebeau. when we come back, more on twitter's new cfo, inside the sea suite with kara swisher after the break. markets in the green and

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s&p 1973 at the market adds a few more points there in the middle of the session. back to the news of the morning -- twitter naming former goldman sachs banker anthony noto at as its next cfo. executive editor kara swisher, good to talk to you this morning. >> how are you doing? >> good'swe've seen the headlines. what's the story behind the story? >> a couple weeks ago when the coo left along with head north american leader, a story, in great shape, stuff like that. a lot of swirl around mike gupta, the cfo, and how well twitter's communicating to wall street which was not very well, stocks been down i don't know, 30% this year. and there is issues around that. and so i think they've decided, you know, either his decision, or they decided, he would be better in a new role in strategic investment, essentially like a venture arm of twitter.

it's not clear what the specifics are. they've brought in a guy who brought to public, an known n noto, and great relationships with wall street. >> kara, a couple weeks ago we had a conversation about the fact ali ra gani's duties would be split among gupta and adam bayne. >> no, no, no. not gupta. someone else. dave stricker, actually. gupta didn't -- >> but existing executives. i'm wondering if you think that that changes, and some of those go back to noto, now that he's in that role? >> no, because gupta didn't get more duties in the change. that was interesting, in the last change. he was simply the cfo. i think that the question is, where will business and development strategy go? possibly under a cfo, but there are several strong executives. the one that did well in the

last go-round, bayne and strick here took over media. mike didn't get extra duties. a question what kind of cfo he'll be? he's a strong-minded person and a close relationship with the board and also with ceo dick cost lowe. we'll see. he's an interesting and compelling figure and a much stronger cfo for sure. >> kara, the issue i keep hearing about from the wall street side is, user growth. that kept coming up. people expect more user growth. does adding a new cfo really change the calculus there much? >> i think one of the issues is how they explain themselves to wall street. i think internally at twitter, the investment relations team hasn't done the best job of developing relationships and explaining the twitter people to story. that's the story internally of twitter. whether it's true, that's what they think is happening. the issue is growth. how do they grow the company

that's done good in advertising? facebook and offered them a giant sum of money and other applications similar to twitter. will did it go? how does it grow? and get more distribution and partnerships especially? that's a key part. the partnerships. twitter integrating with a lot more, larger partners, and there's always the question out there, could someone buy twitter? could it become an acquisition target? that's something to explore in a piece later today. >> obviously, that's been always a possibility. they have rebuffed previous attempts to be bought, kara. do you think -- is that within your universe of possibilities? >> sure. absolutely. i mean, it's one of those companies. you know, you have to think bigger. these are large, large players 'ablying between facebook, apple, microsoft and google at the center of that, a lot of big players. twitter would be a valuable property attached to another

one. that said, it's a very independent-minded board, very independent-minded ceo. it's gone public. stranger things have happened. the question is, if they have to be able to create a management team and this is common among new companies, a management team that can take it to its next era. that's the problem. it hasn't gone into the new era in terms of growth. user numbers also product innovation. the product, let's be clear, hasn't innovated in a long time and they hired this guy from google to do that, but the question is what can they do to spur both product innovation and product growth? and that's a tough road, and anthony is a very strong executive in that regard and be able to explain what they're doing better to wall street and be more of a leader, i'm guessing. >> kara, appreciate the insight, as always. thanks so much. >> thanks a lot, kara swisher, an interesting view of the company and its potential future. $25 million market cap.

enterprise poor thmore than tha. a big deal. not the biggest this year but a big bet for one of those companies. >> absolutely. jon, see you soon. thanks for the help. and at 1973, the story for the "half," melissa lee where we go in the afternoon and whether or not we see dow 17k? >> could be in the next hour. we'll keep watch. getting ready, balloons, hats and confetti, all of it. thanks. welcome to the "halftime report." i'm melissa lee in your scott wapner. do traders agree with the call of the day? will the world cup mean a big score for ocker isn't the u.-- . and bold predictions at the start of the year. half way through it and rolling the tape, are they right or not? the lineup, they're all here.