welcome to "squawk alley" on this wednesday morning. joining us, larry chang. one of the first venture capitalists to talk with mark zuckerberg in the early days of facebook. lance, good to have you here. we have to start with facebook and i want to start with the head line from the "new york times" in just a second. but shares have been selling off today despite reporting third

quarter aerearnings and revenue that topped estimates. the companying warning it would be a major investment year for the company. here is ceo mark zuckerberg on that call last night. >> one thing i'm particularly pleased about is that while we're investing aggressively and making progress towards our big long-term goals we also continue to execute well against near term priorities. >> aggressive is possibly an understatement given the volume of spending they are expected. but what the "new york times" titled. facebook to spend billions on future. seems innocuous enough but what do you think is afoot here. >> their engagement is off the chart with 830 million daily active users and growing. so this is a stunning number. the revenue per user is growing. so those are the metrics to care about. they are spending to dominant. >> the payoff is way off. >> it's quite a ways off. but it is a smart move. they are blowing up on mobile.

they are achieving that goal. to slow down would be foolish because no one else in the space. twitter certainly isn't at the same level of revenue generation. they need to go fast. they need to spend the money to capture that opportunity. i this think -- i'm glad to hear it. let's see the innovation, more app, more mobile technology. and they will do it. facebook rooms just showed u. it's kind of empty right now but it's there. >> the bear case. the stock was down about 10% after hours. well off lows now down in the 6% range. but the wear case would be q one they grew revenue, q two and three 59% and 40 to 47% in q 4. but they sandbag a lot. do you buy they are only going

to get 47 approxima% if q four. >> the revenue is growing quarter over quarter. i think they are sandbagging. i think it's strong growth to continue. >> powerful conversion. they are not just getting people in the mobile devices. they are getting them to engage. constantly manipulating and changing the news feed and in ways that apparently are working. i think the other thing that's working is obviously the daily active user growth is outside of the u.s. and it used to concern me they were kind of flat. even looking at the numbers from this quarter. flat in the u.s. but growing significantly everywhere else. and if they mont iez that which i think they are. the skies feel like the limit. >> stock has plummeted to october 17th levels. >> oh dear. >> even the lowered guidance facebook is giving is far and away better than many peers in the space as well. so, you know, you have to really compare facebook to other companies butt when you think about wall street is digesting here, the sfokt fact the stock

is off 6%, goldman sachs sayingal 85 is our price target it is a buy. but then do you expect the stock to retrace once people are actually look at some of that underlying growth. >> i think it will come back. if the rest of the world goes $2 or three dollars over time. this is a big growth story. >> you are not worried about how much money whatsapp is losing? >> a drop in the bucket for them. and this whole stock thing, short-term stuff. the long-term vision is growth. >> speaking of mobile. we have a quick news alert. blackberry soon town veil the new blackberry classic. looks just like the classic blackberry. and a lot more during our exclusive interview with john chen in a few minutes. >> stay tuned for that. meanwhile our next topic. shares of alibaba in the green today. as a host of firms have started

initiating kovre ining coverage e-commerce giant. all rating the company a buy this morning. shares up more than 45 percent from ipo price in september. 97.66 down 2% interday despite the ratings. when you think about alibaba, we are about a week away for earnings for its most recent quarter. growth is undeniable. but do you think it's overvalued here? >> i don't. because they are playing in such massive markets. consumer e-commerce in china, b2b. >> i call this the cook effect. he can't wait to get in bed with these guys. he wants to do business. and apple is in a great place. but we know china is a super important market for apple.

whatever they do together is going to be big. >> isn't there a problem that everybody seems to love alibaba. it's gone up so high, near highs since the ipo. j.d..com which people used to love is pretty far down. is baba the better buy here or other competitors who are getting overshadowed. >> you really do need to look around. alibaba is this bright shining star. and i have said before on one of shows here that it is an unknown because we don't know how it is going to play in the u.s. which is a key expansion area for alibaba. >> in the morgan stanley they talk about alibaba services and cloudy as being the next expansion areas but they have an interesting chart that shows even though they do so much more than transaction volume than amazon, amazon is able to make more money in terms of revenue. and i'm wondering if you think

the china commerce model t revenues are so much lower than here. >> you see a revenue mix shift. so there is a better monetization of the user base. i expect to see greater revenue and rev more user and monetization going forward. >> big day of the code mobile. live in l.a. with some highlights. >> it was particularly interesting to hear from facebook acquisitions instagram and whatsapp. zuckerberg saying he wants to turn them into meaningful businesses if their own right. >> i still do this day see every ad before it goes on to instagram. and that is to make sure that the advertiser quality and content quality is high enough. and yes that is subjective, right? but at the same time the reason why is we wanted to make sure advertisers were putting content into the network that would feel

native to the network. >> with zuckerberg playing products aren't really interesting businesses until they have a billion users. whatsapp ceo says making money is on the back burner. >> we're focused on growth for the next few years. we want to grow and get to a billion or two billion users. and that is the goal. revenue is something that if you listen to earnings call is something that will happen five years from now and later. >> one company that is making money, apple addressing questions about retailers rejecting apple pay. they're saying it is just a matter of time. >> we think that retailers who are going to successful are going to work around their customers as well and accept payment their customers want to use. we think we have a good system. >> he also acknowledged had mistake in the update of apple's ios. saying the company reacted within the hour and quickly

fixed it and also said mistakes are pretty much inevitable. >> thanks for bringing us the highlights. lance, i'm interested in what kevin cyst rom said. s thevery ad? that east really close quality control. >> how many ads is that. i can't remember last the time i saw a ad on twitter. that's nice to say right now but if they want to truly monetize instagram you are going to have to see a lot more ads and that dream of seeing each one is going to fade away. >> is it even a dream though? or are they just trying to get it perfect and figure out what the right experience is before scaling it? >> they are following the model of google and facebook. they grew 150 million users in two years. there are certain platforms you can wait and just scale.

>> your portfolio at one time included zoom which is one of the de facto platforms to transfer money abroad. >> yes. >> i'm wondering if you are thinking that apple pay is just a steppingstone to another technology or if you think this is going to be the de facto payment technology. >> if they win the merchants i this i they will win overall. the key is over 500 million iphones sold. there are about 500 million card 40e8d's it have visa american express mastercard and discover. so the time period is coming where someone has a visa and a an iphone equal probability. >> consumers will drive the merchants. the merchants are the followers. >> i would challenge that. aren't they going to be more like the american express of the digital payments. there is going to be a day

whether everybody has an iphone. android is going to be out there and they are not going to have apple pay. so it's a higher end play, right? >> the key is the technology. what apple did is put things together in a way that made it really simple to do mobile payments and right now those merchants saying no have a really big problem with the customers who are going to walk in and try and do this on a device that has the right symbol. and it is not going to work. why? because they made a prior agreement that they wouldn't have third party mobile payment systems in the same places mernlts customer exchange that they all signed up for. this is a bad move and even if this isn't the final technology. when 10 million plus people just bought this device and expect to do it, they have to answer. >> the credit cards and the credit card issuers that showed ter burden of fraud if it ever does happen. so that is an important key to che keep in mind many mind.

larry chang from volition capital. take a look right now at the markets. the dow is basically unchanged. s&p slightly into positive territory. whereas the nasdaq is losing 16 points. much of that is attributable to facebook. shares of ea rallying after earnings and profiting that company topped estimates. also raising its forecast for 2015. it's up nearly 5%. and shares of the sanofi slipping after the board of directors removed its ceo and appointed its chairman to that position on the interim basis. they plan to separate the roles of chairman and ceo when it appoints the permanent chief executive. but it was largely a decision on management tile. >> blackberry is going back in time for its latest phone. we'll talk about that in a moment with with john chen. and the creator of google wallet

joins us to ra break down the fight between apple pay and retailers. walmart and best buy. is the ebola scare still hurting bottom lines? we'll ask that question to the ceo of marriott. "squawk alley" back in a moment this is a burrito made with chocolate, soybeans, and apricots. what kind of chef comes up with this? a chef working with ibm watson, on the cloud. ingredients are just data. watson turns big data into new ideas. and not just for food. watson is working with doctors and bankers to help transform their industries. today there's a new way to work. and it's made with ibm. ♪ there's confidence... then there's trusting your vehicle maintenance to

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. i asked him about the classic and why he thinks it is not going to be a repeat of the amazon fire phone mistake. take a listen. >> we restore a lot of interface, software interface back to the classic which is the famous 900 had. the cut and paste. people write script on it. books on it. people write things underneath their desk. under the table. they could do it with one hand. all the similarities the muscle memories are back in that phone. and faster internet. i promise. >> we're going to hold you do that. >> absolutely. i did a lot of test run on that. >> in the earnings report a few days ago we saw the fire phone do a belly flop.

$170 million write down. you said on the passport you didn't make the mistake of making too many. you made a few. you are selling out of those you said. is the classic going to follow the same lines of caution that you did with the passport? >> in principle yes. i'm not going take any exposure unnecessary risk to the balance sheets. and there is one thing i'm really proud of, i'm hoping you ask me for proud moments. we went from to a really got balance sheet. a lot of pain and suffering and hard work to get to this point. and i promise more the investor obviously but our own people, the employees we're not going to put the company at risk again. so we already know the class ic will be reasonably received. there are people waiting.

every day they tell me. better come out soon. so therefore we're going to probably make a little bit more. but we're not -- i promise that we're not going to get ahead of our own headlights. >> so you have been cautious on hand set, prudently so, apparently. you say internet of things is going to take a while to see how that pans out. it's been my impression that the future of the company rests with blackberry enterprise server and probably bes 12 itself. because that is the one that is backward compatible, works with android, ios and windows phone. and that is your pitch to the enterprise to stick with blackberry where it counts. right? your future is in software. am i wrong in looking that way. >> >> not at all. the big part. one thing i found the phone and the business rely on phone and percentage of the business phone revenue versus internet and q and x and the embedded the connected car play.

where we're very strong is still being developed market. everybody loves and it talks about it. but it is still being developed. so the middle part, which is the server, it is not a big number for us. we by and large do 200 to 250 million dollars a year. this is small compared to the bigger picture. we want to double next year. it has to come from the best server. better device. more importantly they gave us a platform to add more future features. the soft sim features. encrypted voice features. and when i add these features the customer benefits from it, the customer pays for it. so it is a platform of growth. not only a platform of connecting back to the customers. it is a platform for growth. >> also a statement here on kim kardashian. they say there are many like kim

who just can't live without the older devices. we're excited to be laumnching the classic soon. >> blackberry kardashian. they know this f they name it that and market it like that it will explode. you won't see anything that john chen just talked about. you will only see kim kardashian head lines. so the company had to respond to that. >> more including the outlook for 2015 coming up later on this hour. >> let's look at the markets at this hour. right now the dow is negative by about four points. earlier in the session it had turned positive for october. right now it is about 40 points off of that. traders are waiting for today's

fed decision. that is coming out around 2:00 p.m. many watchers of the fed expect to it end the six yearlong qe. art cashin will tell us what to watch for in a moment. and fed day coverage continues at 2:00 p.m. eastern. "squawk alley" will be right back tigers, both of you. tigers? don't be modest. i see how you've been investing. setting long term goals. diversifying. dip! you got our attention. we did? of course. you're type e* well, i have been researching retirement strategies. well that's what type e*s do. welcome home. taking control of your retirement? e*trade gives you the tools and resources to get it right. are you type e*? they've always done amazing things. they helped us touch the sky and explore what's beyond it. they create beauty,

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as the big day for markets with many expecting the fed to announce an toned quantitative easing. here a art cashin. art good to see you. >> yeah. >> normally on fed day we see a melt up. >> the tradition is to rally going into it. in fact there is a recent paper out that points out from since 1994, 80% came before the

meeting. unfortunately facebook is raining on the parade. and pulled down nasdaq which is weighing on the other indices. >> what are the important psychological levels for the market? we talked about the fact that the dow is about 40 points from being positive for the month. s&p and nasdaq closer. what are you watching? and do you think the market cares if we're positive for october? >> psychologically i think it dwould like to. the last four days in october are historically the strongest days of the year. the best guarantee for ab up move. >> and then when halloween passes, sell in may and go away. so you are supposed to come back then. so that's bullish also. >> anything investors should be taking away from facebook to make them bearish? >> i don't know the reaction is misplaced. it reraises some concerns. remember in the dotcom age it

was very forgiving of going out and looking for revenues and looking for eyeballs and you didn't have to have earnings. and i think after the surprise in amazon, when facebook came up and they said wait a minute. growth at any cost? we're not sure that that goes. so i think people are going to be slightly more cynical. >> i don't see amazon and facebook in the same boat. i think, you know, amazon, you know, financial numbers seem to be different. and facebook just came out with very strong numbers and it's saying basically it is a story of reinvestment. i don't know that much about stocks but citi are surprised that investors are reacting this way because it is literally the opposite of how they should react. the numbers show the right growth in the right areas. including bloebl revenue. >> i agree. it is probably not an app comparison. but after you see someone almost get run down by a car you look a

little differently. so when they saw the reaction to amazon, which was the icon of growth. growth at any cost. that's that fine. and then when they began to miss revenues they said maybe the model doesn't work fully. and this was a big size. the going statement around the street is you paid 10 billion dollars for something that generated little income. and they are a little unforgiving about that. >> just by the way i don't think facebook is saying growth at any cost. i don't think that is the message they are trying to deliver. >> i agree. but if it looks like a duck, it walks like a duck? >> september the fed raised had percent is on falling oil prices --. we have brent at 87, you'd at 82. what do you think is important there? >> traders and investors are watching if oil stays above 81,

that is benign and allows buyers to come in. if it starts to dip again, down below 80 and a half. anxiety levels spike. and if it trades below 80 some actual sellers comes in. so we'll have to watch and see. there are still concern about deflation in europe, earlier than here. so we'll be watching that. it is going to be interesting to see if the fed mentioned europe in any outside influences against getting the inflation they want. >> with two days left for traders to use halloween and spooky and ghoul puns. >> ghoullies and ghosties bring goody this is time. >> hopefully that is true. art cashin of ubs. thanks for joining us. a reminder, cnbc will have full coverage of the fed decision on street signs this afternoon, starting at 2:00 p.m. eastern. normally at this time we have the market close in europe

but with daylight savings time starting one week early you can see the close in an hour from now on the fast money halftime report. it will be back in "squawk alley" at 11:30 a.m. next weak. >> up next the man behind google wallet breaks down the story between apple peay and retailer like best buy and walmart.

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apple firing back at retailers refusing to accept apple pay. last night apple vice president greg jawswick said retailers better get on board if they want to be successful. >> retailers are going to work around customers as well and accept payment they think customers want to use. >> joining us is creator of the google wallet. a google paypal exec and currently ceo and founder of mobile -- >> nice see you. >> when you think about apple pay and its place in the overall

placement landscape, does it kill anything off or just apply an incremental development for consumers behaving in a store. >> i think it is a step in the right direction. standards are always good for payments. this is really important. so the fact that google wallet is now -- apple pay is now on the same page as google wallet. nfc is a future standard for mobile paneth payments and we know consumers want to be able to pay with their phone. >> i compare apple pay to itunes in terms of potential. and the way apple seemed to win was first having all the record labels lined up and then a really convenient consumer experience. apple has the consumer experience arguably. but in terms of the record labels, they don't have the retailers, the equivalent in this case. do they have enough leverage to force them to come along

quickly? or is it going to take them coming out with their own solution and failing and losing customers before they see that this is successful, that apple pay is successful, if indeed it is. >> you need places to buy. you need retailers. but i'd say the history of innovation and payments at least in the internet phase is that you can actually aggregate enough of the smaller retailers to get the idea out. and then consumers want it. and that drive of consumers wanting an idea has always tipped things over. this is the story at paypal. the story at square and i think will always be the story in the future. in this internet age you don't want to go against the consumer. you want to do what the consumer wants to do. >> so i'm curious, as the creator of google wallet i heard you say apple seems to have a done something right. what is the fundamental secret sauce that you see that apple put in that google wallet failed do. even though it's five year in

invasii innovation but it seems like something sbringz you see is different. >> i think apple jumped on a technology to give it even more adoption. and standards are really important in payments. you have to remember nothing happens overnight in payments. i only been a few years since google wallet. we expected it to take five to seven years. i this i it is on a good trajecto trajectory. but the emv mandate which drings chip cards to the west of the worlds requires these to change. so over the next three years we'll see the bigger infrastructure changes in history. >> what was wrong with google wallet then? you said it would take two to five years. but it hasn't penetrated. what was google wallet missing

that maybe apple pay has? >> in payments you have to solve two sides of a equation. all the consumer devices to have it and all the merchant devices to have it. google wallet put out a lot of consumer devices. hundreds of millions of phones with nfc. now the struggle was how to you get merchants do it. and it's hard to get merchants to change for no reason other than a new idea. now the emv mandate, the chip cards require all the terminals in the u.s. to change. they are going to change way. >> innovation has meant hundreds of companies have been cropping up in the last year. but it seems a space dominated by the big tech companies. i'm wondering how you as an executive separate on the technology side the wheat from the chaff and whether you think a lot of the small companies will go away. >> there is a rule of thumb i learned at paypal.

and relearned at google. ubiquity trumps novelty every time. you can have all the great ideas you want and the great innovation. but until it is everywhere it is hard to be relevant enough to overcome the habit of how consumers want to pay. and so again you have to be able to put out these capabilities. there is a few large retailers who have said we don't want apple pay. but many more saying we'll support the consumers. so it is the best time for a new idea to come. >> a lot of potential bolt on acquisitions. to come. thanks for joining us. up next. what is it going to take for 2015 to really be a good year for blackberry. more of our exclusive interview with ceo john chen. and explosions right after takeoff. should we be pointing fingers at

the russians? >> and first rick santelli. >> as we look at the fed decision and read the statement and watch all the smartest and brightest parse words out, there is a couple of overwhelming large macro issues we seem to ignore and take for granted. what are they? tune in after the break. we'll discuss them. no question about that. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long term injury, get medical help right away

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down qe. what should the plan be with the exit? and facebook may not be happy with the stock today. one of our traders is buying the dip. and why is the biggest money on the street getting market moving information before the rest of us? and is anything being done to stop it? all that and more top of the hour. about 20 minutes. >> see you then scott. the cme group and rick santelli is stabbnding by. >> hi kayla. and i don't know what your preference is music is but if you listen to the oldies, there's one song i always like it's called "just dropped in to see what condition my condition was in" and kind of appropriate on this second day of the two day fed meetings. no press conference. we're going to see the statement. we're most likely going to put an ultimate too many stone on

quantitative easing this chapter. but of course the fed will hold out because that is one of the tools in the tool box. but truly what condition is the fed conditioning in and they are conditioning markets. therein lies the biggest problem. aye been around traders and one thing about them you give them a finger they want an arm. and give them the arm and they want the body. just the way it is. and the fed has tried to be overly transparent and lead the market by the nose. kind of oversteering. remember when you learned how to drive you pick a point out there and generically try to steer for it. the fed may be oversteering. and on the conditioning there are several things i want to bring up specifically today. i've heard twice now that the fed shouldn't make the same mistakes it made in 1937. now it's been a while since i've taken statistics. but one sample really is not

enough to draw appropriate conclusions. there is a raft of issues besides raising the banking requirements, the snugging up, the money supply issues from the summer of '36 to the fall of '37 that resulted in reversal of the markets. los of issues. maybe one specifically is nothing would have turned out different. it wouldn't have ended or changed everything, especially considering unemployment levels were so much more bleak then than today. but the point of this is that the notion that the fed should never tighten and should always in the second form of conditioning, that they should only do things in one direction. three guests today have said we need to look forward to the point where they are tightening a quarter point every meeting. why? why can't the fed do what every trader does every day? you look around, take a state of economy, state of the markets and try to make the appropriate decisions to match what is going on? why does there need to be a

stencil? and why does an investor have to have a stencistencil. the federal reserve should do what's best for the economy. not what's best for traders or the market. kayla back to you. >> i hope the fed listens to as much kenny rogers as you and i do. >> i hope so too. >> thanks so much. >> he asked about your taste in music at the top. britney spears on occasion, right? >> how much mileage will you get out of this joke. >> a lot. i ask ceo john chen what's topping his to-do list for 2015. >> we need the make money. right now if you notice what i've done in 2014 or the team. it's not just me alone. the team has done. we fixated about balance sheets, cash flow. make sure we don't burn cash. make sure we start generating cash. make sure we have a war chest that we can build up to invest

in future innovation channels. geographies and so forth. i think we by and large, i wouldn't say we're done. within the next two quarters we turn cash flow neutral or positive. from operations. i use the term operation every time. but people who are into financials understand what i'm talking about. next year we are going to have to start making money. you know, you can't just keep doing the operation or balance sheet. you have to go start making money. and money has to come from stabilizing the revenue. i use the word "stabilizing." as you know one of my biggest challenges the service activation fee, those are declining. because as people move even if they move to blackberry pan, i still lose that. it's been steady decline of 15%. that's law of gravity. i can't fix that.

what i can do is replace it. and this is why next month bes 12 release. and the value and services that we're hoping the customer will see the value in and pay for it will then cover the decline. that's why i'm calling stabilizing. we can't grow when one is like this and i'm just going to refill the bucket and the water that's leaking. if we can do that we are at a cost space that will make us money. because we focus on margin management as you can see in the last three quarters. where we're at least over 40% in margin. >> john chen talking about blackberry's outlook for the year and for a cash war chest going forward. one of the other big stories of the moirng was a rocket bound for international space station exploding moments after takeoff. and as investigators search for a cause questions are being raised as to whether russian parts might be to blame. jane wells is back at

headquarters with the story. >> it is still really early. nasa tweeted a short time ago, if you find debris in the vicinity, please stay away. there may be hazardous materials. or classified. they will hold a news conference to give an update. orbital has been the quiet company which, along with a far more well known space x has been paid by nasa resupply the space station. potential causes, they use an old russian engine refurbished. and in may one exploded during testing. they were using a more powerful second stage motor for the frs time. >> it's tough to lose this, not as tragic as losing a life.

we're very happy to report no injuries and the safeguards in flight and on the ground worked as they should have and all we lost is hardware. >> the rocket blew up and the stock did as well. orbital shares falling. wiping out about 300 million in market cap. the company has had two successful trips earlier. now this explosion last night leaves only space x and the russians to ferry supplies for now. and the russians did so today. and live during power lunch we're going to be watching this. boeing is set to go ahead of a launch with a gps satellite from florida on an atlas five rocket. nothing tot to do with the space station. but boeing hopes to use this to send astronauts to the space station if it wins the competition with space x. >> hopefully the that lounch

goes a lot better. ebola calming. but could still be effecting the bottom line of companies like marriott. that's next on "squawk alley." ye life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement questions. so ameriprise created the exclusive confident retirement approach. now you and your ameripise advisor.... can get the real answers you need. start building your confident retirement today. shyou see this right? it's 80% confidence and 64% knee brace. that's more... shh... i know that's more than 100%. but that's what winners give. now bicycle kick your old 401(k) into an ira. i know, i know. listen, just get td ameritrade's rollover consultants on the horn. they'll guide you through the whole process.

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switch to comcast business today and get 50 megabits per second for $89.95. comcast business. built for business. welcome back. news on ibm and twitter. forging a partnership on data analytics. saying they are going to deliver

an entirely new class of data previously inaccessible to organizations. they are going join twitters access to the collective intelligence of hundreds of millions of people they say. and ibm secure enterprise cloud. a big data and area that twitter wants to tap into. and ibm too as it seeks to get away from the money losing hardware business. >> very interesting. especially ibm this morning has been forecasting a big announcement. that is it. and more breaking news and for that mary thompson at hq. >> this concerns currency. it's been in the news because it is this rival mobile payment application developed by a group of retailers, including walmart, cvs and rite aid in the news earlier this week because rite aid and cvs declined to accept apple pay. current c says it's been hacked in the last 68 hours. emails and dummy accounts have

been accessed. it continues to investigate this. but keep in mind this is a pilot program so these are dummy consults not real accounts. but again current c which is this rival app that's been set up my merchant who is don't want to take apple pay because they don't want to pay the credit card processing fees. >> not exactly encourages for folks who want to take our money. october was clearly a month for stock market sentiment. not least travel and leisure stocks. simon hobbs is joined exclusively by arnie sorenson, president and ceo of marriott international. >> welcome back to the program. your reported results. we'll talk about that in a moment. fascinating to see what you did through the ebola scare as stock fell. you aggressively went back into the market and accelerated had buy bachblgt 300 million in

about three weeks. did you have any doubt that was the right thing to do? >> we didn't have any doubt. we thought it was a great opportunity. the stock weakened dramatically over the course of the last month. we're back today to an all time high. but when you fall by 15% in a couple of weeks with no real business reason for it, that seems like a great opportunity for us to step up and buy. to say no doubt is a little unfair. because ebola obviously is a big issue. it is a concerning issue. and we don't know exactly how it will ultimately play out. but we think the impact to our business is not likely to be significant. >> that's important. no ceo wants to put their head above the parapit and talk about ebola. but do you perceive what's going on differently internally than the hysteria wii see on the 24 news networks? >> i think so. yes. i think the 24 hour news network is obsessed with. this now it is natural. we've had movies about

connotatiocontagio contagions that have been shown over the last years. and it creates a certain fear with folks and it is perfectly rational for folks to wonder how far is this going to go? is it going to spread. it is important the public policy folks do what they can to protect us from that. but this is not as highly contagious a disease as the flu for example which, we've had some experience with a decade ago or so. and i think we'll watch it and see how it develops. but i think so far it really is not impacting our business. >> and arnie, very important to mention the move we've had in your stock. a massive outperformance to rivals and the market. a gain of over 60%. partly because of what's a happening in lodging and what's happening in your business and the fact you're buying back stock so aggressively. returning 1.7 billion to

shareholders potentially. and 8% this year alone. earnings per share are rising at 25%? is that sustainable? >> we think it is at this stage of the cycle, yes. we have given no earnings guidance for next year and i should be careful about that. but what we're seeing is same store rev par growth we call it up about 8%. which is very healthy. healthiest since the great recession for us. unit growth about 6 to 7% next year we think gross. we'll lose about 1% of the rooms in the system because they are old and tired and we need to get them out. but put those together and you ought to see our fee growth in the low teens rate. put cost leverage on that and put some share repurchase on that and it drives healthy earnings per share growth. i think we'll continue to see that move for the foreseeable future. >> i guess you are lucky that you are so exposed to the united states. >> well the united states is

strong. the strongest big economy in the world today. and if anything i think we're finally starting to see the economic recovery grow fast eer than the modest pace over the last few years. >> bmp efore we let you go. you have been at marriott for many years. you worked hard and still a young guy. some people are talking about you going into politics. mitt romney is something on the board. do you ever discuss that's something you might do further down the line. >> i have never discussed politics with mitt romney except for his politician. i love the job i am in. and i tend to stay here for a long time. >> would you go into public service? is that something that would interest. >> i think that's a very noble calling. i'm not sure i have it in my dna to go for electoral politics ever. that to many is a tough business these folks are engaged in.

i hope to live for many years but i hope to be at marriott for a long time to come. >> arnie sorenson the president and ceo of marriott. >> thanks simon. he didn't rule out an appointed position. but conversation to continue another day. in case you missed it. hp is going 3-d. jumpbing into the market and unveiling plans to take 3-d printing to the next level with multijet fusion. the technology will be able to print products ten times faster than any current conventional approaches and at a much lower cost. the technology is set to become available in 2016. you were at the event today. what did t look like? >> like a big printer but what's interesting is hp is combining traditional technology with 3-d. a big bar. faster. 30 nozzles. incredible speeds. color. it's fascinating and for of

course it's for business, enterprises and not consumers. i think it's fantastic because they are a leader in printing and i love that they are using traditional technology because it is so smart. >> interesting. we'll see if they are successful with that. ibm and twitter announcing a partnership during the hour. the twitter stock spiked about half a percent when the news came out and it's come down a little since then. they are talking about data intensive capabilities for the enterprise, saying they are going to develop applications around twitter and figuring out what is going on out in the real world. and specialized enterprise consulting as well. interesting because it is an area both companies want to goet into. >> seems partnerships is the way ibm is going these days. apple and now twitter. >> and figuring how to cook stuff with its technology.

looking at all the fire hose or twitter data and turning it into something good for business. also smart. >> smart ahead of the elections next week. twitter is going to be a big network for that with all the data. and with the dow now in positive territory that is all for "squawk alley." let's send it over to the halftime report. thanks very much. let's meet the starting lineup. john najarian. steven weiss, josh brown, mike murphy is the ceo of rows cliff capital, steve brasso. one of the most