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tv   Squawk Alley  CNBC  September 12, 2014 11:00am-12:01pm EDT

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happy friday. back to sidewalk alley. joining us carah swisher. always great to see you. good morning. with us here of course john and kayla. let's start with alibaba. one week from the ipo. kayla who's been following since the beginning getting more information on the book. >> we're getting new details how it's shaping up. these details come together in the last week but now hearing that the ordered books are going to be closing about a day early, two days early for u.s. investors. so if you are in new york or baltimore or here in the u.s. you will have to tell underwriters and salespeople how much you want in the stock by tuesday for international investors which are still in the process of meeting, the deal well-being wednesday. in the second day of meetings i'm told my sources that nearly 40 large institutional investors
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have put in for orders o over a billion dollars. they won't get it but it's indicative on the demand of a stock like this. retail will get a small potentially negligible portion of. this potentially zero because there is a friends and family portion of this deal wrsmt figure heads of the company will be giving some shares out to friends and family. i'm told that is going to be roughly 6% of the deal or about a billion and a half dollars. so what potentially could go to retail will instead go to friends of the company. season interesting wrinkle in the deal. but if you are someone who's supported alibaba for the last 15 years, this could be potentially very good for you. >> and we're learning more about the network that supported prealibaba and into his creation of this company and all the various tentacles. >> such a complicated story though. unusual for an ipo. not the way you are used to seeing this play out.
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if you are used to watching ipos. normally we know a bit more about the people involved. but that makes this pretty fascinating. and from what you are saying about it closing early, being oversubscribed. sounds like it is going as you would expect. right? there are certainly casting the image that this thing is popular. everybody wants in. not everybody who wants is in is gonna get in. like the iphone launch. >> interesting comparison. kara, how much of this is going to be on your radiator in the next week. >> we're going to pay attention. we are not going to sell it quite so much. but they are generate iing awareness to get the price up. analysts are saying it will get up to 90. creting the typical hype so everyone feels insecure and must in it. and it's your typical overhyped thing and then all of us like go crazy. so we'll be covering it too.
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>> what is your general impression of the ma? >> i think he's terrific. a terrific entrepreneur. i think it will be interesting how much he's involved. they have a lot of people on their team, including a lot of women which is great. i think it's interesting to see what they do afterwards. i'm more interested in that and will they live to the hype of the growth. they have grown quickly but these things can hit a wall. i'll be looking at that. and i i think friday is when they are going to be doing it guess and we'll see what happens. >> investors are impressed because any questions they have had about corporate governance or the strategic lead, he's tackled those questions before they have had to ask them. he knows that's in the mind of investors and of course as we talk about the valuation and the interest it's important to note the underwriters manufacture
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this to be conservative from the beginning so then they can say this is pricing above the range or going better than expected. that is typical not only in tech deals but in deals of any size and any sector. >> yeah i think the question is do they want a facebook or a twitter? if they price it too low they will get in trouble. too high they get in trouble. so i think it will be interesting what will happen. right now i think it is in the 60s. they will probably move up. they have to. if they price it too low that will be all the stories. and people will say they left money on the table. so we'll see. >> i this i the float is not even comparable. because you have 16 billion versus 1.8 billion of stock. the structure alone is going to have a much different effect on the market. 320 million shares. >> not much. >> like turning ab aircraft carrier in the market. >> not much. it will be interesting to see who he gives it out. and there is going to be a lot
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of excitement around this stock. everybody wants it. >> and won't stop us from talking about it for the next seven days. >> no. please do. >> also up today, the iphone 6 as john mentioned officially available for preorder. it was available as midnight pacific. but the demand was so high, there were slow load times and some sites not working at all. josh? >> announcer: apple and major carriers, demand strong enough actually you are now seeing shipment times getting delayed for the iphone 6. and we tried ordering the phone this morning. and here apple is saying three to four weeks. delays for verizon, t-mobile. at&t saying 45 to 42 business
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days. and at&t telling that demand is actually higher than either of the past two years. with strong demand, the carriers are all upping the ante to get your business. verizon and at&t are offering trade in programs. get credit to a new one. and t-mobile is saying they will beat any trade offer. and throw in an extra 50 bucks. for 70 bucks a month at t-mobile you can loose the iphone six and upgrade every two years. the initial demand very strong. we're going all start talking about opening weekend. how should we be thinking about that. >> the same thing. can you have your iphone? can you not have one. everyone will have them in a couple weeks. i don't think demand will decline. i think people who want these
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things, want a bigger phone, are going to wait for them. i'm waiting for mine. so we'll see. i'm not going to not order it because it's three weeks versus four. i think it will be a popular phone. more interesting is the watch. that's really the new product. this is just a bigger version of what they have. >> this is interesting. should be our operational debut. the online store used to be in a separate division. now it is together. and we have a hiccup here. they are planning to do different things with the queue making it more digital. you get a text message when you are actually physically waiting in line next week. we hope that goes well because it's tied into inventory. so the definitely challenging here. especially now there there is a signal for demand so high for this. people are upgrading even from
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4s and 4-ss. this is going suck in so much demand from people upgrading. so this is a big event in the wireless business and you got to hope apple is ready. >> you mentioned had watch being more interesting, kara. and are you thinking that we are undercounting the demand? or over counting the demand for that? >> i'm interested in the battery life. that is really whether -- >> and you broke the story yesterday. that it is a charge nightly kind of thing. >> yeah. well it could be even less. that's the issue. i mean aside from all the website doesn't work and you can't order it. that's a one-day story. these are, can these devices work the way they want? and that is the one that will be interesting because they are putting a lot of wood behind that arrow and let's see if they can get to it place. if it can't charge enough it will be an issue. and that is a significant issue i think. >> that is true.
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my suspicion is based on what the other smart watches out there can do, that they are pretty close to a full day if not a little above it now. >> i don't think so. >> but they want to do even better. the moto 360 as long as the phone is close will last a full d day. apple is got at the battery management because they have the chip t software and design the hardware. i'd be surprised if they have real problems with this. and of course they tuning the software and services so they are not necessarily going there completely today. but i feel like this thing is going to have at least 24 hours. >> i think it's a big issue inside apple right now is the battery life. >> that's interesting. to be fair you have been hot on the moto, right john? >> it's good device. my problem is again battery life. i had a really long day. and i realized after about wearing this and not using it
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very heavily for about 16 to 18 hours, that if you keep the phone too far away from the watch it really drains the battery much faster because it is calling out for the phone. if moto can hit 16 to 18 hours, i really believe apple can too. the question is how far beyond? >> interesting. kara's instinct or concerns. as they are may or may not be telegraphed. >> but they have time still. >> it's clearly an issue. i think and it's one they better solve for hur. >> kara don't go anywhere. the dow. close to the highs of the day. >> let's stay on the theme. we're watching t-mobile. the company's ceo is telling investors at a new york city conference that the company added 552,000 post take customers in august. more than any other month in its history.
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it also added 208,000 prepaid customers in that month as well. due in part to a promotion that allows customers to add four lines to their plan a month for $100 total. it also got an p grade over argas along with the $40 price tag. >> with some data this morning we saw a slight up tic. consumer sentiment at the highest in 14 months but you are see yields on the ten year and elsewhere jumping. and stocks are down. into the red. though off the lows of the session, the dough down 20, the es s&p is down 5. and take a look at the goldman sachs rallying this morning. goldman is one of the biggest winners. up a little more than a%. and shares of the ebay are
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rallying as well. the company announced it will begin running ads on the mobile app. that shot up 4%. and e bay is one of the biggest winners this morning. >> why did the government threat on the fine yahoo a quarterback million dollars a day? plus a paypal spinoff could be sooner than expected. we'll tell you why. and the first ever game for the apple watch. all about arm wrestling. there's a difference when you trade with fidelity. one you won't find anywhere else. one-second trade execution. guaranteed. did you see it? in one second, he made a trade, we looked for the best price, and the trade went through. do the other guys guarantee that? didn't think so.
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-- for refusing that hand over data to the tsa. many documents related are still classified but yahoo says it is pushing the court to make them public. interesting the general council posted yesterday we had to fight every step of the way and they eventually lost. >> well, you know, it was the previous administration. jerry yang's administration when he was running the show. and it's lovely he was doing that. it's interesting to see how much they fought that. i'm interesting interested in what they are doing now. but at the time jerry faced strong head winds from the government it looks like.
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>> what is the general sense from the valley right now as toe whether they gave it their all? whether they were up against -- they couldn't compete against the government obviously. >> i think the valley folds all the time. i'm of that camp. certain company, twitter and others are resisting. and the government will tell you behind the scenes they are working very hard. but i think they could be a little more public in terms of what they are doing. i like that yahoo released this and that it is talking. but i want to know what they are doing now because the issues will be worse and worse going on. and i think the valley has the power to talk about the issues loudly and make changes. >> amazing story. the lead of virtually every daily paper today. and quick as it relates to alibaba. what should they do with 8 billion bucks? >> good question. there are a lot of rumors what she's buying attachment possible ad tech company. is something i've been trying to figure out right now. >> big deals? >> big deal, yeah.
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there is going to be something big yahoo buys. you never know. she likes the tiny little deals but i don't think she can get where she wants without doing something different. unless the shareholders demand something back. >> they said at least half back. >> yeah. >> and a couple billion dollars, wouldn't you say? >> i'd say so. the shareholders went dividends back. i know she's been in meetings and they want all the money. they don't trust her to spend it i think. and they want the cash back. and that is a question what happens to yahoo after that. it will be interesting. what happens after alibaba will be very interesting for yahoo and others. >> just got to get through in next week. >> yeah. but she gets a lot of money. >> great weekend you do. thanks. >> when we come back, ebay could be spending off paypal sooner than you may think. "plus" our accounting firm's mobile plan. and "minus" our expenses.
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as apple rolls it its new mobile payment service, just what will the app mean for competitors and could it force ebay's hand to spin off paypal into a company sooner than expected? joining us now is yousef squali. good morning. >> thanks finish having me. >> we had bill ready on the show yesterday. he said this lounch doesn't really worry him. what do you think the impact will be on paypal. >> i see how some can be really excited about apple pay given the expected lower levels of the fraud and improved security. but for end users, many and you i'm still not convinced that tapping a cell phone on a counter is more convenient than a credit card. so paypal were able to resolve
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the big friction point of trust online and that is just not the case offline. means there is not much or the impact is not as much felt offline as online. so that is why, you know, i don't think there is a major threat. essential not in short or medium term. >> but yousef the company hasn't been shy about transitions in brick and mortar. they have been trying to get on point of sale terminals and working on desk top platforms with third party as well. does this basically cutoff the revenue stream more the company? >> not necessarily. the jurists are out on that. you are right, i think in the last couple years they made a big deal about their point of -- their physical solution. they have even cut deals or were running tests with some of the largest brick and mortar companies.
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but that said if you look at estima estimates, if you look at wall street estimates and guidance for management, none of that includes any revenues or profits associated with the physical store. so does apple potentially create a viable competitor in the point of sale? absolutely. but it was never a reason frankly we were recommending ebay to shareholds. >> most don't have iphones and chances are most people won't any time soon. so what is the impact on everybody else? people with eandroid phones and doesn't that open up opportunity for somebody? >> yeah. the big question is will apple ever expand this to android somehow through a licensing or something? and if it does then it will
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change the dynamics. but today ios on the global basis has 15% of the market share and android has something like 70 to 80%. so while clearly you never discount what apple can do, we don't think it is going to do have a material impact on competitors. and to your point, it could actually help, you know, some android-based players to actually come up with an interesting solution for that platform. >> i was just going to ask, everybody is talking about this commerce c, which walmart is on board of. a rival platform. kit use on any smart phone. should we be taking them more seriously? >> honestly people have been talking about nfc, a whole slew of platforms ever since attending the first barcelona world mobile congress four or five years ago. and we are still where we were.
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so i think this is much of an efgsry process. not revolutionary. i don't expect anybody to come witho out of the wood work with a silver wult. i think this is going to take a while to evolve. and unfortunately we don't know whose going to eventually win. my best guess is this is too big a market to be won by one or two players. we think there are going to be a number of large and successful players over time. but it will take the next three to five years, probably. >> and the number one question yousef is in that meantime do we see one of the competitors being paypal as a stand alone? >> that is a million question. and we've said numerous times in prior notes, considering where ebay is trading,ing about eight times cash flow in 2014. that valuation is so attractive that for a google, for a
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microsoft, even if r for even a facebook, there are a slew of companies that have been trying to build an online payment platform that have not been successful. and it would make a lot of sense to maybe take a run at it. and if they don't want to own the marketplaces business which has its challenges maybe, then just spin it off. >> challenges for competitors before, possibly more so now. but we'll continue the debate at a later time. >> yep. >> yousef squally of gainer fitzgerald. >> we talk about 1% on west european equities for the week. mixed so far today. we're watching events in italy. a euro zone nns ministry there. governments say please change what you are doing. the -- trying to get a bigger
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spending. public spending or at least from the european investment bank. we are watching it. major event next week is the scottish referendum on thursday. a second poll now indicates that the nationalists are losing steam. so yes vote for independence is less likely. but it is way too close to call. throughout the week you have had this drum beat of ceos telling the scotts it is in their business interest to say no independence. one crow on cnbc in london stood out. the pub chain, weather spoon said these are talking non sense in the arguments they are giving the scotts. he believes the prices could fall if the scotts were to cut a 20% national sales tax in the u.k. listen. >> i think there is no reason in theory where scotland should be able to do very well. new zealand has its own currency and hasn't joined up with australia.
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and switzerland does pretty well and the singapore is the wonder of the world. so it is a question for the scotts. can't see why we shouldn't earn a buck in scotland. right even reduce v.a.t. we'd be laughing. >> again a big issue for next week. where the cat lans were autoin force. they will start discussing whether to have a bill to put forward a consultation in their region towards a referendum on the 9th of november. they will vote the same day as the scotts vote on independence on thursday. the question then becomes whether the government in madrid will use the constitutional court to kill that. there is that market implication here particularly obviously for spain. spanish stock market is down 2 1/2% this year.
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>> next week will be crazy. facebook changing the way it posts advertisements and could mean big changes for your news feed. plus live play-by-play commentary for arm wrestling. the first game on the apple watch. and we'll be right back i make a lot of purchases for my business. and i get a lot in return with ink plus from chase. like 50,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards, even cash back. and my rewards points won't expire. so you can make owning a business even more rewarding. ink from chase.
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apple iphone 6 and 6 plus three ordered started at midnight. people were left waiting till 3:00 or 3:00 a.m. to place an order. is this rocky start a bad sign? you had you were going to stay up. >> i did it. i can't believe how many normal people it did as well. >> you are including yourself. >> i'm not normal. 3:00 at the time. not just super geeks. and the plus. the form factor was sold out by this morning. they took time to get live. by 4:00 therm they were not up. i was able to get the plus. but people don't care. any other company this would be a major issue. >> are you picking it up sunday. >> the air drop is the way to go. put the order in, drop shipped a
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week later to you. >> are you a available for hire for the next model if people want. >> >> i did advising but it's basically the capitalist buying tickets wait online for this. this is what we do. we wait online and complain that the apple store is not up. it's happening. >> so far this is a fantastic sign for apple, right? >> yes. >> there is they're trial balloon. they get to see what skews are in higher demand and can use that to plan what they roll out and where. but you know it was rock. not as bad as it was three or four years ago. they need to make sure on launch day, inventory wise this now queue works smoother than this. >> and we always see this with web sites and the web services. if people really like something it is amazing the pain they will put up with. people want this product. and the fact that apple said they would have the store live
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at 12:01, i think i gave up at 12:40 time pacific. it still wasn't up. what other company can get away with that. >> did you get the plus? >> yes. no question. and the plus sold out by this morning. so my bet on phablets and the cargo pants is looking very good now. >> you saw the phone on tuesday. you waited online last night to get it. what about the multimonth gestation for the watch? do you think people will lose interesting. >> i don't think so. o there is so much to come out about it. we don't know how the applications work and the navigation how it's going work. the fact that the little things that are leaking out. like as you walk you get turn by turn signals to go left or right. there is a lot they can add later to keep people excited. >> why users are using to block ads from their feeds and why this is your bread and butter.
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>> very much. >> how important is this. >> great for facebook and investors. it is basically a quality sore score on advertising. google made bad advertising and ads play more. facebook is saying we're going to let people bury ads and get feedback on why they don't like the ads. >> often we talk about social media as they are in the same pot. but the more i look at number numbers it seems like feedback facebook is only pro team throughout and everybody else is j.v. basically to tune the quality of ads. >> completely agree. i've been bullish on facebook all along and negative on twitter, right? when you lock look at the scale of innovation in the advertising product. but i completely agree, john.
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thises t is the protein. this is the google of social. >> why wouldn't you opt out of ads? >> it's not just opting out. it's bearing individual ads you onto don't like. and the people who use that more. people who complain more will take leisure of a signal. people who complain less they will take more of a signal. so people are going to weight that. >> and they can afford to do this in your view? margins are so fat and so much growth they can basically turn away food. >> that's my view. and it's cruise you'a user firs thing. i can't see facebook we're going to let people complain about ads and show less. if wouldn't be something they would do. and when they hadn't krozed had chasm to mobile they wouldn't have done this. >> cbs outdoor had some
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favorable can comments this week. do you think the overall market is soft? or is this just new players coming in? >> what i always say about this business which i think not everyone likes to admit. a phenomenal grind. you always have to innovate. and always have to cover the brands and agencies one by one. it's a ground war. no air cover. and i don't think it differs much if you are cbs or abc or daily mail. you have to constantly do that. so if there is any weakness you are not innovating or going where the audience. outdoor is no longer part o the conglomerate but if they are seeing weakness in the television, push online. >> any dark horses out there. >> pinterest, tumbler? >> the interesting thing about pinterest is there much intent there. people go there to look at things they want to buy,
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furnishes they want to do. when you are a media you have to the generate content. when people go to pinterest they are looking to buy, to execute. so pinterest is very interesting. when they turn on their montization ek we can see a fast inflection like other sites. >> thank you for being here. come back soon. >> after my 3:00 a.m. stay up i had a couple cups of coffee and i'm doing all right. >> the first game ever for the apple watch pits users against each other in an epic match of arm wrestling. after the break
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this week played head to head two bluetooth security products. no key, the world's first bluetooth padlock. and mogul. the vote is in. with 63% of votes no key has become the latest tech crowd leader. fuse designs. >> thanks for having me on the show. >> and congratulations on winning the vote from our viewers. what is no key? and where did the idea come from. >> the world's first bluetooth padlock. came from our creative team thought of a way to really enhance the experience that people have with padlocks. they have been around for hundreds of years and people are
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always losing keys. the technology hasn't changed for combinations and we thought wouldn't bit great if we could have your phones to unlock devices. >> for bike, valuables. what other types of the products? and how exactly does it coordinate and communicate with your smart phone. >> it's great for shed, gates. a lot of the commercial applications. big garage doors and want to give access. it uses bluetooth 4.0. you walk up to the lock and press a button. it's looks for your smart phone and simply unlocks and gives you access. the nice thing is you can share it with other users. you can give them keys electronically. you can revoke those electron click ically too. >> this must have a battery in
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it which must run out. what happens then. >> our team has really kind of always thought of creative ways to solve problems like that. and what we've done is we have contacts on the bottom so you can take the replacement battery, push it against the contacts and give it power to open it. and then you can unscrew the back of the no key and replace the battery. >> how secure is it? that's always the question when you have a technologically enabled lock of some sort. >> it's interesting with apple talking about the nfc this week bringing attention to security. bluetooth 4.0 is very secure and we've also added security on top of that. rolling codes and we also have it so you can only reach a few feet. so somebody can't pick up the frequency and try and copy it. it's been known to happen on garage door openers. so very simple and security and
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really locked down with the app. >> you have already reached 5 times the original money goal. we wish you the best of luck and offer our congratulations to no key and fuse designs. >> thank you so much and thank you for having us. >> in case you missed it. verizon setti inting sights on netflix. planning to launch its own video service middle of next year. they have a series of deals which are nearly complete as the content distribution businesses gets more interesting. >> reminds me of when at&t and verizon tried to come up with their own app stores to overwhelm apple and google. netflix has become a brand name of its own. they are going to be hard to chase down. >> something that mcadam has been sewing the seeds for a few
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months. but they have been building this for a long time. and i think a lot of analysts and people on the street wonder if verizon should be buying instead of building because they are so late. so we'll see. >> it is aiming high for sure. when we come back, beauty is in the eye of the beholder but one dating site doesn't agree. >> you need to be judged by the whole group. and beautifulpeople.com is helping you with a program called adopt an ugly person. i applied. we'll have it next if energy could come from anything?. or if power could go anywhere? or if light could seek out the dark?
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including a proprietary momentum indicator that makes researching sectors and industries even easier. because at scottrade, our passion is to power yours. online dating is a $2 billion business growing 5% a year according to ibis. which shows demand in niche sites is rising. one site is turning away more than it lets in. and they are now offering help. >> if online dating was a nightclub, beautiful people.com would be the vip room. to grow now they are offering a
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the program called adopt an ugly person. 750,000 members globally pay monthly subscription. to join you have to be voted beautifully enough by existing members of the opposite sex. >> beauty is in the eye of the beholder and by democratizing we've given a level playing field. >> you almost make it sound like it is not a horrible premise. >> we always get this. these outcries of this is shallow. this is discriminatory. it is certainly not shallow. >> what is the rejection rate? >> one in ten. over 7 1/2 million people apply. and this hurts me. you know. i see dollar signs walking out the door. which is one of the reasons with e created had mentorship program. >> who are the mentors helping other become beautiful enough. since i'm married i also dragged
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in the c producer who subjects to mentoring. hundreds have applied to be mentors. and there are many advantages to be a member. >> it wasn't just a dating site that attracted me. also the fact they have beautiful people hosting the company come in and it is a great networking site too. >> i see. it wasn't just to meet dates. also potential leads on work. >> exactly. okay. i wanted to hate her. i couldn't. she's lovely. so much more later on cnbc.com. including dos and don'ts. men, shirtless selfies are the turnoff and i don't think the site allows the shirtless selfies of women. that would probably be very particular. >> since when do beautiful people need a website to connect? can't that just go outside? >> you know what? it's hard when you are beautiful to meet other beautiful people, john. you should know that better than
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anyone. >> i've tried to meet many beautiful people in my time. and it's hard. >> you just scroll through and get to decide without something some third party sift through them. >> this way you get through the first hurled. that is what a niche site is for. get to the beautiful and then determine whether they are beautiful people on the inside. >> certainly gives new meaning to the word mentor, for sure. >> abercrombie for grown-ups. it's great. >> telling you, wait till you see what i'm going to put on cnbc.com later. it's hilarious. they say it is darwinism. . we might find it political correct. but when you look too date the first thing is whether they're good looking. >> jane, thanks so much as always. go pro today.
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they are above. strong momentum in the quarter. and as people start to pin more hopes on the holiday season. >> up 18% for the week. a strong move. and that's it for us. have a fantastic weekend. let's get over to the headquarters. >> welcome to the halftime show. let's meet today's starting lineup. joe turnovo and john and jerian are co-founders. and jerry. he had his teeth in the pits before moving up to run the place. good to see you. >> thank you. >> we begin with stocks for the first down week in six with much of the blame due to a sharp and sudden weakness in commodities. energy is the worst performing sector this week. are od

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