for for fortt -- kayla tausche, jon fortt. trading up as much as 35% after earnings easily topped expectations. our julia boorstin joins us this morning. hey, julia. >> carl, better than expected results across the board, higher full year guidance, dick costolo was bigger on bullish to catch up to facebook. >> we don't think there's anything pleechbt preventing, us structural from preventing us having the kind of results from other players in the space. >> i asked him if he thought they'd be able to have the same size audience at facebook. his goal, have the largest total audience in the world and reach every person on the planet and the nothing less than that. for the first time, costolo delved into the potential of twitter's audience outside the 271 million saying hundreds of millions of additional people come to twitter but do not log in. responding to a question tweeted in, how he plans to increase the

user base, costolo talked about improving the experience for both kinds of users. >> if you look at the, our apps on ios or android now and compare them to what they looked like a year ago, you would see that they're, frankly, extraordinarily different. and yet we've been able to make those changes as a cohesive set of product changes over time, without disturbing or disrupting this growing core now over 271 million monthly active users and i'm proud of that. >> costolo talked about potential of a number of areas creating ads to target visitors who don't log in and liked the opportunity in app install ads, wouldn't reveal how much they 3w50689ed results and called the potential for commerce on twitter enormous. carl? >> julia, thank you. great stuff last night as well. talk about this, jon. your general thoughts about the quarter? >> relatively bearish on the company when at 70. thought it was expensive. i think the results were fine. a pivotal analyst on "squawk

box" this morning basically said fine is well. these guys set very low expectations for themselves. guided 270 million to 280 million and 312 million. now up to 1.3. they always put numbers so low. the hurdle so they can step over it, basically. >> the key, though, that 16 million monthly active user gain. higher than it had been in previous quarters. there's still a question about growth. i think this is answering the critics but not silencing them. with facebook, we saw a period where they had an ideal product, people had this kind of absurd notion that youth were fleeing for twitter and snapchat, and a question about whether they'd be able to monetize mobile. for facebook, simply a matter of turning on a mobile spigot. twit hear to prove it can diversify product 0 to spur on more growth. harder than facebook had to do year over year growth in terms mp users, flat. from 25% year over year to 24%

user growth. facebook added 41 million users to get to 1.3 billion. law of large numbers is not hurting them. adding 16 million users to a base of 271. so it's just not that exciting to me. >> i wish that those were the real issues. to me, with twitter, the problem was they went public in a real hurry, with the wrong management team. they had to do an on the fly change of essentially many of the key positions in the management team at a time when the product was not right for monetization. incredibly stressful. the good news in this quarter, costolo has his team in place, had a breather here and a chance to figure it out. the problem is, this was also a quarter with the world cup. unless we start to see the world cup of pizza followed by the world cup of bowling and the world cup of windsurfing, he's got a problem with the big events. >> events happen all the time. >> but the scale of the world cup was a huge deal for them in part because it really emphasized mobile, because there were so many games and all the

things going on, and went on several weeks. >> olympics in the first quarter. world cup in the second quarter. two events that happen once every four years. olympics every two. they're not quarterly events. i talked to investors this morning, long and short twitter who said they all don't buy the world cup did not help user growth. when costolo said it helped advertisers engage but not user growth. they said it's not true. >> yes, great to have a ton of it. >> audience equals spend. rig right? >> no. the product isn't right. trying to advertise in the ticker going across the bottom of the cnbc screen. it doesn't -- that's not -- >> not a bad idea. >> that's not the right way. >> i completely agree, on the call asked dick, another product equation, following up on comments on non-logged in experiences what additional products could we see noor cohort of users? punt on that question. road map, road map, world cup -- >> much simpler than that. there are plenty of tools.

i'm a chairman of a company called reverb, tools allow a company like twitter not only to have a better user experience for advertising, more importantly, understand what all the members of the audience want. 271 million is a lot of large numbers, positive thing. >> it is still a growth issue. it's not necessarily growing the existing product. it's a question of, what is twitter at its soul, not just skin deep right now, and how can to grow? is it realtime or is it just the conversation about specific topics? if they can figure that out and roll out the right products -- >> i would like to suggest it's a lot of different things. the problem is that having a single news feed running by it 100 miles an hour all day long is a really hard platform to monetize. there are lots of ways to take the information out of twitter and present it properly. as i said, again, as the chairman of a company who does this actively i'm certain it can be done. >> costolo is open to that of

course, he's a really smart guy. >> a gdp, growth accelerating in the off platform, flipboard, tweet deck, they own. reverb, they can't monetize that, and the acquisition there is in the ad network is differ than people consuming -- >> all happening in the context of sum valuation. >> a market doop play with, it's beautiful. play everybody out there this week if he wanted to, and the important thing is, he's done the hard part. he's create add one of a kind broadcast network that is deeply embedded in our culture prp that was a really hard thing to do. now he just needs to put the layers on top that make it more user friendly and better for -- >> bmo has out, at $48, a little below now. 16 times gross revenue. facebook, 12.4 linkedin 7.4. too expensive. >> cramer's point as well. >> hang on. that market goats make that call. he's supposed to use the stock

to buy the things he needs. >> who would be first on your list? >> oh -- >> say no more. >> i say flipboard for months. i think it's obvious. >> flip board doesn't get it done for him. doesn't solve his core problem. it's again, you've got to get people engaged in deeply using. its directionally the right idea. >> the counterargument to all that is that twitter doesn't have the perfect product. we don't realize it's potential. so it deserves the multiple, because if you're betting on the people who have gotten them this far, i guess you're not betting on the people that -- >> betting on new guys. >> they got fired. the new guys, believe they'll figure it out, much more potential. >> a great underlying product, i think it's a good bet. not as a stock. a good bet as a company. >> good bet days ago i. couldn't believe when dick was interviewed by julia, he said majority of users create content. that blew me away and i don't think that's a good thing. i don't think many want to create content on twitter.

>> the notion of creating content on twitter, 140 characters is not a big hurd's. >> why do it publicly? >> who knows? what difference does it make. 271 million people on there. so many businesses successful monetizing 1 million people. 271 times that is such a big deal. >> vice is purported to do $500 million this year. $1.3 million off this many user, number two social network out there that strikes me as underperformance. >> agreed. i make the observation the market hasn't cared. that gives him time. that's all i'm saying. a great business opportunity. now, stock, i think cramer is probably right, but the -- the business is really there. >> roger, several mentions on the call to being a complementary platform, not a stand-alone platform. they've been working with tv partners. >> who cares? >> other businesses, what others, could they work with? where could they go? >> a great question, but my

basic notion here is that what twitter created a a communication system allowing anyone to broadcast a message to people who are interested at no cost. that should apply so broadly. right down to school groups and all that stuff. >> sure. >> they just don't have the right user experience for anybody other than news organizations to do it. people have really -- >> fair point. i'd love to continue this conversation. i have to tweet out what you just said. so we'll do that. roger, jon, don't go far. over to bertha coombs for a market flash. >> noble simultaneously tweets like you do. watching sodastream, spiking. soda making reporting better than expected second quarter results. the stock today, spiking about 9.7%, but also bear in mind it is off about 35% year to date and kayla harks just about that much in terms of short interests. so a lot of the shorts today appear to be getting squeezed. >> interesting stuff, bertha. good quarter on top of them and

look at that move in sodastream. and watching broader markets now only a matter of time before that extremely positive second quarter growth number up 4% gave way to traders and investors talking about what that means for the fed this afternoon. of course, we're hearing from janet yellen and company at 2:00 p.m., and many believe that we could hear some news about a possible rate hike earlier than expected. you're seeing the dow down by about 70 points after sharply into the green at the open. s&p down 4. nasdaq up just about 9 points. biotech, solid earnings and drug results from several companies in thisgenreon on the move. company had positive results from a trial of a cholesterol drug that it's producing sanofi. amgen, positive earning and sympathy across the sector. carl? max levchin, founder of paypal, early investor and chairman of yelp and

authoritative voice, joins "squawk alley" today. and mark mahaney, upping his target along with the rest of the universe. joining us later on. texting your friend a smell. it is real, and it's coming up, right here on "squawk alley." ♪ [ bell ringing, applause ] five tech stocks with more than a 10%... change in after-market trading. ♪ all the tech stocks with a market cap... of at least 50 billion... are up on the day. 12 low-volume stocks... breaking into 52-week highs. six upcoming earnings plays... that recently gapped up. [ male announcer ] now the world is your trading floor. get real-time market scanning wherever you are with the mobile trader app. from td ameritrade. with the mobile trader app. the ca♪illac summer collection is here. ♪

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some very strong words from best biceo on tablet sales this morning's in an exclusive interview conducted by re/code,

the tablet s boomed and are crashing. volume has gone down. it's not clear you have to move on to the next generation. jon a surprise or the magnitude of his language calling it a crash? is that a surprise? >> issue with the magnitude of language and probably a difference between what's happening in android tablets versus ios tablets. numbers from apple, the only ones who consistently report them. down to flat a bit, not exactly crashing. on the android side, you wonder n netbooks and over again. >> the other thing, best buy is in a horrific position relative to consumer electronics in the tablet market right now. so their experience is going to exaggerate all of this. they have a poor mix, and the notion that pcs will come screaming back i think is ex-treenlly unlikely.

cyclicly they're rising but not blow things out. >> and we saw apple numbers for two quarters. the stump speech i give to advertisers i say, mobile is not mobile. it's phones. not tacts. tablet usage, major publishers, pales in comparison to the phones. for most people, the phones especially the big phones fill the need. >> that said, i will be upgrading to some tablet later this year. it will probably be an ipad. i'm waiting for touch id. i use my ipad as a laptop. >> i know, but we're not -- we're people -- we're people in the news and it's not a -- >> he's right. >> this san ipad 3. it's old. >> getting away from pcs is what tis is all about and people are figuring it out. keyboards are getting better, and i'm with jon on this one. this will go up, go down. it's a longer product cycle than phones. >> and julia said laptops are more versatile. phones getting bigger and better. you also have laptops getting smaller and quicker. >> and intel with that, they

systemically went into the logistics chain, used their size to push down the cost of push screens and gave that benefit to their oems because they wanted exactly this impact. i was skeptical they'd pull it off, but they have. >> surprising the corning ceo acknowledging we did not see this coming. this pause in tax, whether temporary or not. >> a brand new category. from 0 to 50 million in a heartbeat, right? the next thing you know, 0 to 1 billion. huge, huge business, and we just haven't been there before. >> even chromebooks still small. they sold 1 million to schools. that's a pretty decent number for just the school segment. there's a little return to kind of lighter weight computing. people want the keyboards and certain functionality. i don't think it will come screeching back but more light in notebooks than we thought there was. >> we'll see. my guess is that pc architecture makes lower highs every time and lower lows every time. >> notebooks --

>> this will be volatile but doesn't make lower highs. >> and when tablet came out, cd, dvd drives, didn't have touch screen, couldn't flip them around. today's laptops are entirely different from what was on the market three, four years ago. >> the hasbro, battery life, stupendous. you have the battery life you used to have on your blackberry in 1997. you can never charge this basically. >> roger, you can talk about anything. thanks for coming by. >> hopefully out to new york city. playing tonight. at the baseball hall of fame on saturday. >> you're buying the first round for everybody? >> no. just for you. >> i'm grog oing to stop by now >> a free poster by stanley mouse to anyone who shows up tonight. epic poster. when we come back, max levchin of paypal fame is with us and also on the boards of yahoo! and yelp. here for an extended interview on his new venture.

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could the scratch and sniff concept finally be entering the digital age? the first international scented text message was exchanged between new york and paris this summer using an app called osnap and an ap prit paratus called t ophone. with me, founder of osnap and ophone, founder and ceo of vapor commune caucuses. good to have you. >> thank you so much. >> explain what this apparatus is here you have with you? >> the fir aromatic talelephone.

bring scent into communications. made for a boutique, like a cafe or retail setting. the next generation, small in your hand and works with an app that allows you to take a picture, stick a scent to it, send it to whom you want. you receive it, play it. if you've got the ophone you can smell it, too. >> like snap smell chat basically? >> yeah. >> i got it. >> 10,000 notes with nobody having the ophone. take pictures, see and experience it without the ophone. collect your own and later play them at home. you don't need the ompltphone to make, create and share onotes. >> how long before you actually put it in a phone? >> demoing a very small handheld when this is commercializing in the

wanted to test with the first version, because it's so new. >> i smell now. is it tobacco? >> i think it's the streets of new york you're smelling. >> the scent transmitted this summer between the american museum of natural history and paris, how was it structured and what was the scent actually transferred? >> actually we had one of the major noses in the business. so he took a picture and associated the scents of a bottle of champagne and sent it to me. i was at the american natural history museum here in new york and we experienced them here in new york. you take a picture, choose the scent. in this case he chose several, up to eight scents. 327 based scents, a palate of

aroma, you compose it yourself and try to get an actrecurate r. >> i would think for an ad campaign, for something like that applications right away. inbound from those guys? >> absolutely. even more related to products with a very strong aromatic value. imagine going into a cafe, seeing lots of coffees and able to play onotes getting primary notes and understanding and make a better choice. for anything with a big aromatic content, communicate it bet around people can choose better. >> have you done branded products yet for a particular fast food chain or for a beverage company or something like that? >> we're working with the primary specialty coffee house in france, and we're right now entering into important deals with major food and beverage, transport and entertainment companies. >> seems like a high-level product. hopefully it can go mass market. we'll watch as you continue to make money and make this device a little small perp thank you for joining us it's a the stock exchange. ceo of vapor communications.

inside to simon for a check on the european close. >> extended losses through the session. the bank lending day for europe today isn't bad. easing. a problem with earnings, with the sanctions and a problem with the lack of inflation as well. even in the strongest economy in the eurozone, 0.8 inflation rate in germany. spain tipping back into negative territory, which obviously makes their huge debt load more onerous moving forward. it's one of the reasons why the euro continues to be sensitized now to the difficulties in europe, and, in fact, today fell down to a nine-month low partly because of what the ecb may do and a fear there may about dollar drain. once yields begin to rise in this country, that money may flow out of europe or indeed that trillion dollars parked in emerging market assets as well. let me show you some of the companies that have disappointed today, partly because sterling or the euro or the swiss franc

is strong pnd in the lighting manufacturer having to cut 8,000 jobs there as a result of people moving more rapidly to the newer type of bulbs. barclays reported above expectations today in a radio interview, its ceo seemed to support new rules coming through from the bank of england meaning any bank, even american bank, with an office in london will have to rewrite contracts for a seven-year clause, on bonuses for those that brat financial conduct rules. arp buss admitted it has a problem with its super jumbo double-decker a3-80s, cancels a six plane order to japan over the weekend and now says many of those that it has on order, that people have on order, may not actually be delivered. although in an exclusive interview with cnbc, the cfo played down the significance of that to the overall group. >> we are at a normal level of cancellation. for sure we're monitoring the order book closely and tightly,

but i don't observe an abnormal level of cancellation. >> the view from airbus. guys, back to you. >> thank you, simon hobbs. twitter stock up now only 21%. mark mahaney upped this price target. and matt levchin, the dow is down 120 points from session highs. back in a minute. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running.

a special guest this morning who founded paypal in the late '90s. a firm ceo matt levchin with our own josh lipton in san francisco. josh? >> carl, here with matt levchin, paypal co-founder, yelp chairman, yahoo! board member and serial entrepreneur near silicon valley. talk about your company, online lending start-up, matt, in the business of making loans to consumers, right? and already raids $50 million, but i know you're ambitious and want to take on visa, wells fargo, the banks and lenders, so you've got to raise a lot more capital, max. how will you do that and who will you raise that capital from? >> i think i don't measure our success by raising capital, but it is a very important part of the business of lending. you have to borrow to lend.

there's absolutely no shortage of funding today. people love what we're doing. they seem to believe in this mission of transparent credit. we lend to people rimt at point of sale. let them take a purchase debt that sits on their credit card, 29.99 apr and split up payments with a much smaller 6 to 10% apr. lots of people see that with opportunity. want to supply us with capital to put to work. >> talking about bar oes, max, how do you gauge their credit worthiness? i know you do it differently, your methods, than it traditional banks. explain your methods and wipe you think it's better than how traditional lenders do it? >> we look at both traditional metrics such at fica score and other things banks use today as well as information that changes more rapidly. fica only updates want quarter or every six months. life moves faster than it did in 1989 when fica was put to work and many things can be found that tell us, hey, you're much better than your fica score

suggests you are. so that's where we can create that additional capacity for people. >> right now lending to consumers, ultimately guessing you want to lend to small businesses as well? >> love lending to consumers. i think we're helping people manage their cash flow, become more responsible. lending to small businesses is a little bit of a soft spot for me, because it's lending to entrepreneurs. i think of myself as one of those guys. so we'll lend to both. >> let me switch gears a little, max. paypal co-founder. i'm interested to get your take on that mobile payments landscape. changing very quickly, reports that amazon may take on square, apple may enter this space. what's your take on that landscape right now, max? and who you ultimately see you're going to be the winners and losers there? >> it's a fascinating time to be alive certainly in the payments space. there all kinds of cool stuff happening. we're finally approaching a moment to where the complexity of using your phone to pay for things is, it's easier than to

use a credit card. credit card is a pretty amaze method of paying. swipe, you're done. the phone has to clear a very, very high bar. that's changing. on the other side, the plumbing side of payments, we have companies like our, company like lending club, they're completely revolutionizing the issues side of credit. you have devices. you have enormous databases, such as apple, amazon, paypal, of stored payment instruments that should in theory enable an enormous amount of seamless transactions. things are coming in fast and fushs, and it's great. >> as you seat landscape change, max, mentioned here, what do you think that means for your old friends at paypal? how do they fit in? >> having lost their innovative ceo most recently to facebook, one wonders whether facebook will start innovating on payments, but they've got to step up. there's a lot of new games in town. people are still enormously at advantage. a huge network, growing

extremely fast even ten years after, but it's going to be challenging. >> jon, you had a question there? >> yeah, thanks, josh. max, you're on the board of yelp and also yahoo!. two companies in the valley bay area, where in1re6vestors have really high hopes for growth. what do you see as the main trend that's going to drive growth or not, and if you can, get a little more detailed than just mobile. >> i think looking at the growth of both companies and obviously there's only so many things i can say being a director, i think press ismarissa has dawn b at apple tripping away at things people do every day on their mobile phones. the daily habits a mobile user has, a number, five, ten, in every single one of those has a yahoo! offering that really

works at this point. yahoo! has a strategy relatively well ash tick lated. on the yelp side of things, it's an amazing opportunity, because jeremy and the team have figured out how to become the router of consumer interest in local attractio attractions, local food, local theater, local services, anytime someone is thinking, hey, where do i go to get "blank" accomplished in my neighborhood, they pick up a yelp app. you can start transactions, bringing people together as a community. company's been around ten years and there's just -- way more to do today than there was ten years ago, feels like. >> let me ask you, going back to yahoo! for a second. you think of alibaba and one if not the most anticipated ipos this year. you're on the board there. how do you think of that ipo in terms of what it means for yahoo! going forward? >> to be honest, i don't think very much about that ipo. it's a company that we have the

good fortune and foresight to have a significant stake in. there are lots of complicated things in relationships to navigate there. i think, and hope, it's going to be incredibly successful as an ipo. we'll see what happens after. >> let me ask you, a big topic of conversation here, in silicon valley. bubble talk. when you see these valuations to some of these start-ups, whether uber at $18 billion or at&t at $10 billion, when you hear that does that excite you, concern that? where do you come out on that? >> a little more nuance this time than last time. i've lived in the silicon valley to remember the bursts and bubbles. in the past you could not discern a difference between great start-up and an overhyped one. to date, it's very clear that uber is an incredible force. it's steam rolling over the competition, expanding rapidly. i don't know exactly what it's valuation today is, but i'm

pretty sure it's valuation going forward is going to increase and not quite literally take over the world. i don't think that's a bubble. i don't think that has anything to do with overhyped or overheated investor interests. in the shadow of that valuation, there are many companies that try to define themselves in terms of, well, i'm uber from blank. that's a relatively easy way to get an investors to say, gosh, the next uber! so there i think there are pockets of overexcitement that probably don't belong. >> i think you had a question for max, kayla? >> i did. i wanted to ask another question about the payment space, max. i know that companies like a firm and like paypal have been able to benefit from the fact many big banks and credit unions are federally regulated, that's very costly for them. so other lenders are able to do what you do much more cheaply than some of these big financial institutions. i know you've been vocal in the past about trying to skirt washington regulation.

i'm wondering at what point their ears start to twitch about the borrower risk and financial start-ups in silicon valley and how they are trying to disrupt what traditionally was in a very heavily regulated and also heavily insured industry? >> so i think from the perspective of regulators these days, post-2008 collapse, you don't live in a world where you can avoid them, hope they pass you by, we made a clear commitment to having a relationship and an ongoing conversation wit regulatory bodies. we just hired our first chief compliance officer who came to us from consumer protection bureau. we are about as open and transparent with our consumer as we are with regulators. i think the primary reason large institutions today frankly don't stand as good a chance against start-ups like a firm and lending club is because they carry around hundreds of years of beautiful tradition, and

things like branch networks. we don't have branches, tellers, we don't have to deal with the inefficiencies that come with that. that's where the opportunity top disrupt and innovate is. >> maxx, thank you for your time. appreciate it. >> thank you. carl, back to you and the gang in new york. >> thank you, josh. josh lipton. shares of twitter in full rally mode this morning and rbcs mark mahaney says the stock could go higher. he'll explain how and why in a moment. first, rick santelli, what are you watching? >> of course, watching the markets. we're watching ten year rates in deference to the significant 244 low yield close on may 28th. and, of course, we're doing some forensics on gdp. and -- my numbers didn't match before and after the number. a lot of history. a lot of revisions going back a long time. it's going to be oranges and apples trying ever to compare new gdp to old gdp. talk about all that after the break.

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make the most of every moment. ask your dermatologist about humira, today. clearer skin is possible. coming up, top of the hour, is it finally time to show twitter some love? haters out in full force before the company's big innings beat. what do they say now? then the najarian brothers, yum versus chipotle in a savory smackdown. our special series continues today, nasdaq 2.0. a man who ran the tech company with one of the most spectacular boom and bust stories of the dotcom crash.

joining us live to share his lessons learned. all straight ahead on the "half" carl. see you in about 15. >> sounds great, scott. thanks. twitter beat the street on earnings with the site's revenue growing 24%. revenue and user growth growing. what can we expect down the road? with us today, taking a price kargt target to 65. good morning to you. >> good morning, carl. >> the main stream of twit hear just begun you say and a lot more they can do, and also say that facebook provide as road map of where their p & l can go. are they really going to be the same animal? >> let me work backwards. a company doing eebitda. yes, and twitter's at an early

stage. yes a cop, a bogey where this p & l go over time. a given since ipo on twitter. the problem figuring out the user and usage mess trick metr. this company needed to get out of the hash tag world and make the site more intuitive for the rest of us and they've done a good job of that, but we're far from hitting that point. when we do the stock, we think it can go higher and user growth resell er a rese reaccelerating. one of the big way s personalization and the mainstream aspect you talk about. what is the value of the personalization, the real identityoffers? how do you see a twitter duplicating that, if they do need to do that, to get the same financial performance you talk

about? >> jon, from an advertiser perspective, where the dollars are coming from, a night and day difference from the companies and a corollary of google out there. facebook has actual accurate data on users and twitter offers advertisers in the moment, intentions. people know exactly what people are interested in when on twitter at a moment in time. facebook doesn't know that and the comp for that is google. generated $400 million, offering intentions in the moment. the advantage twitter has. a different pitch to advertisers but a powerful one for the pumped advertisers. don't think of it facebook. think google. >> you write that their metrics in the past conflicted with global ambitions. when you hear noda and costolo saying with a straight face they want to be with everyone on the

planet, do you take them seriously? >> materially below where facebook was at a similar level of growth. it gets to this company needs to mainstream its service. they've done things to improve that. incorporated more videos. gotten right-brained. they needed to do. incorporated more videos and images into the news speed. that's the right step. they need to do more. make it for intivt, the onboarding process easier and maybe 2x the number of people who use twitter, doeb don't sig for the service. they need to give them reasons to do that on twitter giving this company more information with which to offer advertisers. >> you believe twitter can become one of the utilities. look at a company like facebook and see user growth, instagram and messenger, primarily on mobile, nearly eclipsing twitter even in its age, compared to

those two apps, i'm wondering, how far do you think twitter needs to go? and's how much time until it actually does become one of those platforms? >> it's got a long ways to go. in order to get anywhere near there. for example, facebook has 1.5 million advertisers. twitter probably 1/10 that in terms of advertiser base. a sixth number of users on a day buy basis that facebook has. it has a long way to go to get there. remember, the use cases are different. twit sir the place increasingly over time we go for realtime news. outside of cnbc, it will be twitter that people, if this company executes well, that's where people will go for realtime news on all sorts of events. cultural, celebrity, sports, realtime information, financial, even. that's the pitch. these other companies i think have proven they're utilities. i don't think twitter has. it has the potential to do that. its market cap doesn't guarantee at $30 billion, at less than

1/10 out of google, 1/6 out of facebook a long on the stock, i don't have to believe the market believes it's got that kind of utility potential. we think it has it. the market doesn't. that's why it's a buy. >> is there any point there's a take-out option? >> no. highly unlikely at the size of this company. i don't think so. >> good to talk to you. thanks. from rbc this morning. when we come back, a surprising voice comes to the defense of drones. find out who when we come back. and after that, higher than expected gdp print this morning, markets reversed. up 70. now down 76. we're back in just a minute. the cadillac summer collection is here. ♪ ♪ during the cadillac summer's best event,

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shares of goodyear moving lower. weaker than expected quarterly revenue selling fewer tires to automakers in north america and latin america. the stock right now, down abbin 7%. that was about the same amount of percentage of the decline. carl, back to you. >> bertha, thanks. hop overer to the cme group, rick santelli and get "the santelli exchange." rick? >> hi, carl. well, any of you kind of wonky technicians out there? boy, you're going to have to take your list of gdp data and you're going to have to go through it. a lot has changed. today's number. hit the highlights. definitely more than expected. inventories added 1.7. i think that is huge. even the, of course, the

government acknowledges that the first look at gdp is incomplete and gets more complete. always lots of revision, but it what it is. i find this fascinating. personal consumption up 2.3. core up 2%. here what i was talking about before. look at minus first quarter that we've had this century. okay? there's been seven minus quarters of gdp in this century. five of those seven have been first quarter numbers. now, if we look at the first quarter number with the second quarter number and average it out, comes out to basically rounding, 1%. now before all of the data, i did research on this topic, and before the data was all revised, q1 of 2011 was minus 1.3, q2, 3.2. notice the average, 95 is the same. it's not unusual for first quarters to encompass a lot of issues regarding euphoria and the holiday year-end and changes pulling business forward, but after all the revisions,

everything changed suddenly. now, they're not huge but they're definitely different. that number now is 0 .7. i did that to show, yes, basically weather events every winter, pretty much. what does this mean for the federal reserve? my guess, the federal reserve will take a very muted look at this data. in other words, they're going to look at it and walk it back a bit, because a sustainable 2, 2.5, maybe 2.75% economy doesn't jive with current policy. i think they'll walk it back. saying look overearer year. doesn't surprise me. quickly, at 253 making the big 244 hold, huge in the context of friday's number. an employment report nap is going to be the key as to whether this is a great buy or great sell indeference to that huge support level in yields at 244. carl, back to you. >> all right, rick, thank you very much. and add her name to the growing drone fan base.

martha stewart with an op-ed in "time" this morning writing why she likes drones. here are some of the photos she posted on martha stewart.com. and writes, it's hard to imagine andre lynonch laying out landscape designs and later the magnificent chateau with no high hill to stand on, no helicopter top fly in, and no drone to show him the complexities of the terrain. just imagine what we can design with the help of a drone? >> wow. >> i think the industry just took a light year forward. don't you think? >> your prompter reading as well. i was afraid for you, but you did it with the skill of a drone flying high above a house. >> it now has the martha seal of approva approval. >> drone a good thing. >> it is a good thing. >> with just a tiny bit of practice, even a novice can buy one from a store and take pretty spectacular and professional-looking aerial photographs of your property. those were her props in bedford,

new york, just north of the city. entering martha fashion all in arow. >> if steinberg were here he'd talk about how much he's crashed into the atlantic ocean, but that's a different story. when we come back, other social stories. dow almost, down 84 points and, of course, began the morning with nice upside on that gdp report. we'll talk about that and what the afternoon may bring in just a minute. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different - to give your customers every reason to keep looking for you.

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welcome back to "squawk alley." i'm seema mody. stocks put to the side at least for today after twitter reported better than expected earnings. stock in rally mode and so are some of the other social media stocks. look at waybo. catered to the chinese audience. that stock moving to the upside. other social media stocks getting a lift including king digital, facebook among others. yelp a standout. yelp reports earnings later today. the focus on local ad dollars.

how much money yelp makes off local merchants. and evercore is cautious citing competition in the space. something to watch out for. . carl, back to you. >> thank, seema. microsoft is a loser as well, back to below 44. i wonder if those comments out of best buy weighing on broader tech concerns on the consumer side? >> could bealitiesbealities -- little bit. spelunk, workday, up more than 4%. linkedin up 3.5. netsuite up 3. the love spreads. >> biotechs the breakout. earnings from amgen, and life sciences biggest gainer on the s&p 500. that's leading health care to be the actual, actually the top sector now. >> what's interesting, some of the stocks that report tonight showing a little enthusiasm ahead of the print.

whole foods, by the way, reports after the bell. up about 2.6% and tesla, later in the week, at 227 dollars, 62 cents. twitter a big mind share stock. another one for later in the week, guys. >> green stocks. there you go. >> with all that, dow down almost 90 points. the judge takes over from here with "the half." >> carl, thanks. "halftime report," meet today's players. pete and jon najarian, founders of options monster.com. steve weiss, managing partner of short hills capital. john terranova, and the stock a standout. you may remember, got into a heated conversation about that company yesterday, and whether it can ever really compete with facebook. >> twitter, you know, i think we have to kind of give them the benefit of the doubt. >> i keep coming back to, who has the faster growth, and who has the cheaper valuation? an