headquarters. and "squawk alley" is live. ♪ good thursday morning. joining us at post nine, henry blodget, ceo at business insider. john ford is here as always. let's start with alibaba. sharing slumping after quarterly revenue came in below estimates. that stock on track for its worst day since its ipo. there was a suggestion there was a slowdown in that all-important

holiday season that the company just closed. and the concern is that alibaba is making less money on mobile purchases, which are now making up an increasing portion of sales as buyer behavior is changing. and we were told the montization rate will improve over time, but henry, the question is now whether these are growing pains or whether with so much focus on what was supposed to be a record quarter, you just can't expect as much as you maybe thought. >> i think most of the fault lies in investors and analysts. this is a company that hasn't been public that long. we don't have a pattern of what they're likely to do quarter to quarter. makes sense to think about what it means in terms of the slowdown. but this stock was up 45% to 120 after the ipo. it's been in a downturn. still, very nice valuation. massive company. mind bogglingly successful. growing. everything is good. just that folks got a little out

of hand. >> what do you make of china knee-capping the unicorn here? just coming after it on counterfeiting, piling on as it has this report, and josiah saying yeah, this doesn't help? >> this is a risk around a company that is this big and this powerful. but they're exposed. it's a single market and it's a market that a lot of americans don't know a lot about. but overall, they seem to be doing fine despite that. >> it's rare that you see such a tart exchange between a country's largest company and regulators. this morning, he said we're spending $160 million to combat. this we put 40 people in jail already who are running counterfeit rings. what more can we do other than work with the regulators. he mentioned the saic, the agency that put out this paper, has actually taken it down from the website. is that the hand of a strong and

influential company, or do you think there were real flaws with the report? >> it's both, but the government risk in china is far greater than it is here. you've got a government that has much more control than we are used to in uniform and in the united states. so any involvement like this, alibaba's got a lot of power, but it can be taken away from them instantly. >> so as an investor, how do you look at this company differently? or do you. i remember saying boy, i'm queasy about this. just because he's pretty visible here. they're the only company of this size. there's government risk that nobody seems to be crowing about. now we've got to pay attention to it. but how do you factor that in? >> i think you factor it in with a lower multiple. there's got to be more of a risk premium built in there. especially when you don't really have a good handle on quarter to quarter, what the growth rate is going to look like. we've seen this acceleration and deceleration quarter to quarter before in the company. and so just as a higher discount rate. >> we should note, though, even though revenue missed expectation, still up 40%. >> the scale of the company is

staggering. more customers than there are people in the united states. staggering. >> a statistic that they wanted to mention on the call. but the elephant perhaps in the room was that just two days ago, yahoo saying it would spin off its $40 billion stake in alibaba into a new entity. there's been increasing speculation about whether ally be baa would look to buy back that stake, and here's what joe tsai had to say. >> from our perspective, nothing has changed. after the spin-off, we're going to have another corporation that is also a 15% shareholder in us. >> my sources confirm that saying ally be baa has not retained any advisers to evaluate a transaction and no talks before this spinco plan was announced, though some

investors say why not reduce the flow, but it seems that they're just focused on letting yahoo do what it needs to do and the fact that this will still be a 15% shareholder no matter who it is. >> look, this is a case where you can be opportunistic. it's still going to be a lot of cash to buy it. sit around, wait until a stock is clocked and use your massive cash flow to pick up shares on the cheap and go forward. certainly a much easier transaction than having to buy yahoo, which would have gone through all sorts of regulatory issues. much easier for them to do it. >> there's still some time for them to evaluate, but nonetheless, an interesting comment. let's move on to facebook. those shares have been mixed throughout the morning. they started the pre-market in positive territory. and this came after profit and revenue topped estimates largely thanks to a jump in the growth of mobile advertising. our own julia borsten spoke exclusively to sheryl sandberg.

she's live with more. interesting conversation. what else did sandberg have to say? >> one reason facebook stock hasn't jumped is stock is pretty much flat now, because of concerns about expenses. the company predicting non-gap expenses will grow between 50% to 60% this year. i asked sandberg about it and she told me they're investing to improve all of facebook's apps, plus its creative lab to develop more products. >> in order to continue that kind of user engagement, we know we need to build great products and we're investing behind our consumer products. we're also investing in our ads business. investing in our ad products, making them work for marketers and consumers, and in measurement and targeting. >> sandberg telling me that improving measurement and targeting is crucial to earning more from their growing mobile adds this particular. another area she highlighted s video adds.

she wouldn't reveal plans to increase the video ad load, but she did indicate the potential to eat into television ad budgets. >> it's a format they're used to and they're very emotionally resonant. so we're seeing pretty broad dpgs adoption of video. there's a lot more we can do to bring video ads to people around the world. >> and connecting the world, mark zuckerberg said it's one of facebook's top priorities. it's about much more than just a mission to help people. he says it will also be a good business opportunity. you can find more on cnbc.com. >> thanks so much, julia boorsten in l.a. if i'm a facebook executive, my take is don't say i didn't warn you. they told us this was going to happen. >> facebook is doing exactly the right thing. this is a company that has about a 60% margin. it's just insane how profitable

it is. so they are now investing very aggressively in the future. and that's exactly what everybody who's long-term should want them to do. mark zucker made an interesting comment on "the call" where he said why are you doing this non-profit thing? the shareholders we want actually care about that. and that's a very great statement that puts down a message for what facebook's all about. i think what may be happening here, stepping back from it, is what's driven facebook stock the last couple of years is this huge new mobile opportunity that they've unlocked, it's been massive, it's taking over the company. we may be starting to see the signs of maturity. >> even though just two years ago, you're saying that business might be mature? >> at some point, you're going to start to have too many ads in the feed. things are a bit more saturated. doesn't mean there's not a lot of growth. but the big opportunity that sheryl sandberg highlighted is video. you look at the money in

television right now, if they can start to move that more aggressively to facebook, that is another third huge growth engine. >> to me, facebook's quarter was nearly as impressive as apple's quarter. just a different arena. you take a look at what facebook's put together, they've got the main product, which continues to grow. this is a growth company that's generating so much profit. plus they've got this three-pronged approach. instagram attacks a super premium tier of develop market. facebook, which is the main product. so, i mean, obvious opportunities here. this is on track to be the next google. >> not to mention that they're taking some share from google. that's a separate thread that people are talking about today. >> just like google did from yahoo. >> absolutely. 100% agree. they're doing exactly the right thing. you read some of the analysts notes. well, we're disappointed to see on right expenses go up so much. i mean, come on, have a view

that is more than a single quarter. can we at least go to the end of the year? what facebook is doing is they have put a ten-year mission on the table. that is so unusual, and it is so laudable. so they absolutely should be investing aggressively. >> costs may have doubled, but it didn't come at the expense of profits. so still some impressive growth. let's check out qualcomm. shares tumbling. that stock down nearly 11% today after the company says it expects its newest mobile chip will not be used in what it calls a major customer's flagship smart phone. also warning that challenges with another one of its ships hurt competitiveness in china. john, i know this is a company you follow closely. can we guess which major customer this is? >> yeah, let me decode for you. i talked to steve after the call. he didn't tell me specifically which customer either, but i know. one, samsung is the customer. they're not expecting to be

built into probably the galaxy s6. samsung is probably going to use its own chip. that caused them to take down about 800 million for the full year. he said the bigger effect on taking down that guidance was not samsung. it's apple gaining share. because remember, apple uses its own chips in its phones, just uses qualcomm's base band for wireless. qualcomm gets less of a share of revenue there when apple displaces other android makers. so that effect causing qualcomm to take down its estimates for the year. >> so potentially a 1-2 punch. this coming on the back of weakness that we've seen across the chip sector. what happened to all of these suppliers getting a broad-based lift when apple does well? >> they've gotten a huge lift over the years. qualcomm, they have such big share, relatively few number of customers. you lose one. if they're not making as much on am, that's t apple, that's the issue. >> let me lay out the risk for qualcomm. the risk overall is the mid tier of the smart phone market gets hallowed out over time.

you end up with a commodititized low end where they've got to fight with other providers, including intel and others and media tech. and then at the high end, you've got apple using its own chips. samsung perhaps using more of its own chips. and then there's no mid tier where the low end users upgrade and give qualcomm more money. qualcomm saying they don't expect that to happen. they think people will upgrade and that money will come back eventually. >> there's definitely a reset today where the chips are concerned. if there wasn't earlier in the week. before you go, congratulations on a new investment round. $25 million. those shiny new offices aren't free. >> big secret plans. just spend, we could buy half a jet and be done. >> what do you plan to use this for? what type of growth will we see? >> just more investment. what's happening in digital media in general is you go back seven years ago, huge skepticism. you couldn't raise any money. could you make any money? is it going to be viable? now what we're seeing is finally you're starting to see investors

embrace digital the way they embraced magazines and cable. if you start a magazine ten years ago, you need 25 million for starters. you're going to lose all of it the next seven years. finally you're starting to see big investments in digital. and there's just no question that the world is going digital over the next couple of decades. >> gawker, of all places, recently said to stop chasing just views and focus more on engagement. is the age of the slide show over? when you're figuring out what you're going to invest in, what kind of content you're going to use this money to invest in, what type of content is? >> we're going to invest in getting better every day. that means topnotch digital journalism. just starting to scratch the surface of what is possible there. images are incredibly powerful. so we will continue to use more and more. video is incredibly powerful. but there are just many areas that are likely to open up over time.

and whatever format our readers like, that's the way we'll do it. >> germany's axle springer. international growth. is that a big part of this? >> absolutely. we have seven international additions now. we can see exactly where our readers are around the world. there's some big markets we'll want to go into soon. >> henry, it's always good to see you. thank you for coming back. we want to get a check on the markets. the dow hanging on to about a 13-point gain. led in part by mcdonald's and boeing. but of course, it's the oil majors that are putting negative pressure on that stock. mcdonald's rallying after the company announcing ceo don thompson would retire on march 1st. he'll be replaced by steve easterbroochb easterbrook. crude oil prices near a six-year low. down another 1.25%. the slide yet again this week, john, just continuing. and coming up, ford shares mixed this morning after earnings topped expectations.

ford's cfo will join us in a first on cnbc interview in a moment. plus, according to early uber investor, firing the twitter ceo would be a "huge mistake." what does he expect in the latest quarter? we'll ask him in a few minutes, and later, kenny g is going to join us live right here at post nine. he's an early starbucks investor, claims to have helped invent the idea for frappuccino. he's with us a little later on this hour. "squawk alley" is going to be right back.

2014 was a tough year. phil lebeau joins us, this time with ford ceo bob shanks. >> thank you very much. bob, i heard the conference call today and i was looking at the numbers. an interesting 2014. talk about how important this transition year was in terms of hopefully setting you up for a better 2015. >> that's a really good point, phil. we said more than a year ago that this year was going to be somewhat different than the previous four. that we were going to see a lot of launch effects from a very aggressive and unprecedented introduction cadence of products this year. or last year, rather.

and we delivered that. in fact, we delivered one more. so we're very well-positioned as we go into 2015 for growth. >> do we hit 17 million as an industry? a lot of people are saying i'm not quite sure we get to 17 million. what's your take? >> i think it's possible. that's certainly within our guidance. we include medium heavy trucks. we do expect to see growth in the u.s. industry in 2015. in fact, we expect to see growth globally and in all the other major regions that we commented on this morning. so we're in a growth industry and the u.s. is going to be part of that. >> yeah, and at the same time, when you look at what's happening in europe, you guys have basically widened your guidance for 2015 in terms of losses that you expect there. and it raises the question, is russia really the problem there, and have you seen the worst in russia, or is this a case where

it's bad and it may get even worse? >> well, i think the answer is we don't know. we've made a lot of progress in our european transformation plan, particularly in western europe around product, brand, and cost. but when we developed that plan back in 2012, we included russia as an important part of that. at the time, it was expected to become the largest market in europe. we do have confidence that russia is going to be a very important market and we want to participate in that. but you're right. very tough in russia last year. we're going to have to respond to those conditions, ride it out and prepare the business for better times ahead. >> bob, you've got the new aluminum f-series rolling into showrooms right now. how rich is the sales mix? are youie higher proportion of the upper end versions of the f-series?

>> the initial mix is very rich. that's not unusual. when you launch a new product. but we're seeing very strong mix and strong demand. the vehicles are turning very quickly. the fastest-turning product that we have. the revenues are very strong. and we expect to see a much greater percentage of our f-series sales in january reflect the all-new f-150. so we're very excited. the launch has gone well. kansas city is in launch mode right now. that's going well. so this is going to be a big part of the story in 2015. >> bob shanks, cfo of ford. john, one interesting note about that new f-series, on the conference call, ceo mark fields said that he's talked with some of their dealers and some of their dealers have yet to actually drive the new truck when they get them into the showroom because they're in demand so quickly that they basically are doing the paperwork and they're out the door sold already. >> wow. nice problem to have. up next, demand for the super bowl also still fully

inflated with the average price for a ticket up almost 200% since last year. so how much would you have to pay for a ticket in arizona? i'll give you a hint. about how the sticker price on a ford focus. the full answer when we come right back. welcome back to showdown! i'm jerry rice,

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if you haven't bought your super bowl ticket yet, good luck. prices have soared to a staggering average above $8,000 per ticket. that's a nearly 200% jump from last year's big game. joining us is tickiq founder and ceo jesse lawrence, who's here at post nine. we talked to you around most major sporting events and we hear that demand is going up and prices are going up. but put us into context for this event. >> sure. this is the most expensive event that we've ever tracked. it's actually gone up since that graphic went up. it's about $8,200 average now. the cheapest ticket is not much less than that, at about $7,500. so by historical standards, this

is off the charts. >> how does this compare to the world cup final, for instance? i would imagine that international demand, size of stadium played into that as well? >> absolutely. so this is the most expensive event we've ever tracked. second was the world cup final last year. compared to u.s. events, this is about $3,000 more expensive than the next most expensive event, which was the 2011 national championship. >> what is it about this game? vegas messed up the spread at first. and now part of the reason why this is happening, you're saying, is that people were shorting ticket prices heading in, thinking they were going to go down. and now that's not working out so well. >> yeah, not working well at all. so brokers, what they can do to short the market is they can sell a ticket a week out from the event hoping that it goes down. buy that ticket after it goes down for less and pocket the difference. what's happened is tickets have gone up. they're now scrambling to cover orders and as a result there's not a lot of inventory for the average consumer.

>> is it deflate-gate, causing a scramble to want to see it live? >> i think there's certainly a factor there. publicity -- all publicity is good publicity. but i think the majority of it is actually the short selling that's happened. the inventor levels are at historic lows. there's less than a thousand tickets available. normally at this point we're seeing 3,000 to 4,000. it's supply/demand. there's a ton of demand and prices are reflecting that. >> any part of this weather? especially with a historic blizzard in parts of the northeast throughout the week, if i'm wanting to go watch a game, i'm not really going to want to sit in meadowlands stadium. i'm going to want to be in phoenix in 70 degrees and sunny. >> last year, everyone was saying the super bowl here was going to look like this from a pricing standpoint. it turned out to be the exact opposite. it was actually one of the cheapest super bowls we've tracked. i think a big part of that was weather. people were worried about snow. here, it's free and clear.

we had the blizzard in the northeast here. but flights got rescheduled and now everyone's psyched to go to phoenix. it's 80, it's sunny, it's beautiful. why not? >> will there be any deals to be had over the weekend? >> it depends how you define a deal. it's all relative, there will be deals that poup. we don't think there's going to be anything less than 65 to $7,000 get in. some people who thought they had tickets are being told that they don't. there's going to be people saying, i don't have a ticket, i'm scrambling. it could be a bad situation. >> so a deal for someone who only has $7,000 cash to burn. >> relative deal. >> it's always good to see you. >> thank you. >> the ceo and founder of tick iq. from sports action to european action, let's bring in simon hobbs as we break you down

the close in the uk and across continental europe. >> one week since mario draghi unveiled the qe plans. europe stocks are up about 7% since then. denmark today cut for a third time so far this month. actually, the most powerful, the strongest economy in europe, the german economy has tipped now into deflation. they have prices coming through minus 0.5%. we'll get eurozone inflation data tomorrow. but that is obviously an ominous sign. obviously it's a lot to do with energy. a reason why the germans are being pushed into qe. you continue to see a flattening of the yield curve in the core of europe and yields move down. that means the yield on the 30-year german bund today dipped below 1%. that's the 30-year. the ecb is going to have to buy this and they'll buy out along the curve as well. that's another reason why you're depressing the yields there.

if you're looking for the weight of the market in europe, the real heavyweights, it's oftentimes your oil majors, and they are really weighing on most european indices today. that's former national icons. the first of the oil majors to report. disappointed on its earnings. they're cutting the capital expenditure by $15 billion over three years. the big question moving forward will be the dividends. if they continue to have disappointing results on the price of oil, at what point will these big delividend players cu that? banks have done quite well. we've had a number of banks reporting. they say that capital ratios are fine. they don't need a capital increase. and they're going to get rid of some of their risk assets. the wild card continues to be greece. today you saw a sharp selloff in the greek ten-year, which pushed the yield up to 10.8%. we have come back slightly from

that, but obviously the situation is very volatile. people will say wow, look at how the greek banks have surged today. those banks have come back substantially today. 20% gain. 14% gain. but look at this. look at what these banks are actually valued at. they're kind of penny stocks. you'll see them extremely volatile. big percentage moves. you don't really want to have to rescue one, obviously. >> he's had a big first week. and business ky for you, too. when we come back, what should we expect from the other big social name waiting in the wings? of course, that's twitter and it reports next week. the jason inv we'll get a take

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breaking news in the bond markets. five-year notes up for option. rick santelli, how did the auction go today? >> well, this one i'm giving a c-plus. the variance in this report is wide. that's for sure. so what do we have? 35 billion five-year notes.

the-year-old at auction, a whisker under 129 at 1.2888. here's where it gets wild and variant. it's a bit light there. 63.1 on indirect. better than 52%. a little light on the directs at 9.5. 27.4% goes to the dealers. so a mixed bag. the pricing wasn't bad. and we can do it all again. back to you. >> thanks, rick. facebook earnings were out last night. google is out after the bell. twitter is next week. big gains in mobile and video. but rising costs were holding facebook back. now up just a fraction of a percent. jason is an investor who got in early on uber.

he says firing ceo dick costolo would be a huge mistake. you've been spending some time with facebook. do you think twitter is really well-positioned and he's doing a good job? make the case. >> he's taken an extremely complicated product twitter and shepherded it to massive revenue, which is obviously very complicated. he's also got the growth. very solid. it's not fast enough for a lot of other people. but the truth is it's very easy to screw up these complicated social networks and it's very hard to grow them and to grow revenue in them. he's got those two things dialed in. it's also probably one of the best places to work in technology and people love it. finally, the most important people in the world, politicians, celebrities, journalists, writers, they are hyperactive on twitter, and

they're not even present on facebook and youtube, you know, in large part. so if you look at that, what it means is there is a powder-keg that will explode when they turn on video for all verified users, which i think will come in the coming weeks. the real thing to look out for is when they split revenue with those very powerful people. when they do that, it is going to be extraordinary to see where the most talented people in the world choose to put their videos. youtube, facebook, or twitter. >> this quarter, it seems that the wild card yet again for the social companies is expensive. facebook is able to double, hiring new people, investing in its platform, building new big data platforms and i'm just wondering how much will a company like twitter have to spend to keep up in competing with a gorilla like facebook? >> i think a lot of the analysts are a little too obsessed with

expenses. this is a huge paradigm shift that's going on in mobile. if you don't invest and you're up against goolg, facebook, and microsoft and people who have hordes of cash and are willing to buy big companies and do big swings, then you wind up with yahoo or aol. you're beginning to want to pick twitter, facebook, apple and google. if you look at yahoo! giving back all the money, that basically has ankled that company. yahoo is done. yahoo is not going to make any major acquisitions, and marisa will probably be out of that company in 18 to 24 months and it will be sold for parts. if you want to play in the game known as mobile, you have to be willing to make huge bets and buy things like what's app, instagram, and youtube, or you will just not compete. >> i want to go back to this point you're making, arguing that twitter is positioned really well versus youtube, which is taking a much greedier split with content creators.

if twitter does start to gain any traction, what's to stop youtube from just saying okay, we'll adjust the split, we'll take a little less? they've already got a huge audience. plus, engagement on facebook already very strong. they're saying an average of 3 billion video views happening a day, happening right now on that platform. why is twitter better positioned than facebook, despite what you say, people are still watching videos on facebook. >> facebook has had tremendous performance. they fudge the numbers a little bit with auto plays. that was a big mistake on their part. but people are going to consume a lot of video on facebook. the key difference with twitter is that on twitter if you were to go to 100 really important celebrities or journalists and ask them when's the last time you logged into twitter, they would say i'm logged in right now. i've posted seven times today. if you ask them, have you ever logged into youtube, they'd say i've never logged into youtube. i've never discussed anything with my fans or other peers.

and facebook is what people use for their family and friends. so facebook is going to have a lot of views at a lower cpm. on twitter, somebody like justin bieber or any other celebrity, ellen, they're going to with their tens of millions of followers, when they post a video on twitter where their active fan base is, it is going to go super nova and they're going to command 30, 40, $50 cpms, if twitter does the right thing, which i would say is a 70/30 split, it will print money for those people. it's beginning to make them millions of dollars per day. millions of dollars per month. it's possible that many artists would make more money on twitter than what they do in their day jobs. >> it still remains to be seen whether that will be the case. certainly it's their well laid plans. i want to pick up on what you said about yahoo. you said yahoo is done and marissa mayer has 18 to 24 months. you wrote earlier that firing meyer from yahoo would be a huge mistake. do you see the alibaba spin-off?

is that a swan song, or do you see investors and yahoo users having a sort of backlash and demanding something else? >> it's definitely a white flag. it's for sure a white flag. if you look at larry paige and goo google, or zuckerberg and sheryl doing an exceptional job at facebook, rule number one in the technology business is if there is an opportunity to improve your business, you invest. nobody is going to give back that war chest unless they're done. or perhaps there's some secret plan to take that spinout company and then present an option to shareholders and say hey, we have these two or three big assets we want to buy, you have the option now to take your shares and sell, or leave them in and let us use it for purchasing. so if that second case happens, which they haven't said it is, so we can assume it's probably not going to happen, why would you give all that money back when there's so much opportunity and we're in like the second or third ending of mobile?

she's absolutely done and they're going to put it with aol. it's probably going to get bought by some combination of microsoft and facebook to have some content and some additional unique users. but it's done. >> jason calacanis, thanks for joining us. come back soon. >> cheers. my pleasure. when we come back, legendary musician and starbucks investor, the great kenny g will join us right here at post nine in just a few minutes. dow is up 42 points. "squawk alley" will be right back. recently, a 1954 mercedes-benz grand prix race car made history when it sold for a record price of just under $30 million. and now, another mercedes-benz

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come asking up at the top of the hour, shake-up at the golden arches. one of our traders saw it coming. plus, we talk to a longtime shareholder about how he's going to play that change in leadership. super bowl bets coming in fast and furious. we'll get the latest from vegas on the line from one of the biggest bookies out there. and your best stock strategies from the nation's number one independent financial adviser, rick edelman. that and a whole lot more when we see you in about 156. rick santelli has the santelli exchange. >> good morning, and thank you, kayla. yesterday, of course, two words seemed to have made a big difference and they were in a statement, i didn't see them coming. international developments. but then again, let them eat fish. i'll tell you what i mean by that. i think the markets need to do

their own fishing with a fishing pole. they don't need to be fed fish, but that seems to be the world we're in. many traders expressed surprise at the move. why? the fed's data dependent. our data is affected by europe. we didn't need anybody to let us know that, so to see this move, you almost have to question a little bit of it. so let's think about it. how do we know that we've already seen the effects? maybe going from 60 to 30 basis points in the corresponding move, everybody highlightly aware. and remember, it isn't about what percentage the u.s. economy or exports, it matters about things like how much earnings are driven by multi-nationals, or systemic issues with regard to southern european banks and interest rates and toxic type residual loans. so we want to monitor that. to that end, though, that flows into the next, two out of three ain't bad. when it comes to technicals, we talked about a lot of things and a lot of things have changed in the last 24 hours since we did our range talk yesterday. the first is the 30-year bond. we did indeed get the close that

we needed below 236. we did it. so there's number one checked off. what's number two? we talked about the nine sessions of range in the ten-year that were defined basically by a 179 yield out to about a 285. we settled below that yesterday. check mark two. but three? three is the one we didn't quite accomplish. what is three? the low is 271 on a closing basis. we haven't gotten there yet. so, does that mean you're supposed to be looking for higher yields? no. but this isn't the way the market was for months and months. the fact that we didn't get all three makes me a little nervous. but especially on friday weekly close, below 271 with the other two in place. most likely, you're going to see a whole lot more buying action come the coming weeks. back to you. >> all right, thanks, rick. up next, a special guest joining us live on set at post nine. legendary musician and starbucks

investor kenny g. there he is. who better to play us into the break than the master himself. we will be wipe.

welcome back. you probably know our next guest for his saxophone skills but could this renaissance man be a starbucks ceos which perer? kenny g is a renowned musician and investor in starbucks. ♪ >> i am only a musician.

>> we should start every session like that. >> but you are an accounting major. >> because i didn't want to study music. >> you didn't need to. how did you get to be an early investor in starbucks besides the fact you grew up in seattle? >> that's part of it. my uncle was one of the very first investors and called me and said i know you've sold a bunch of cds so you might have some money to invest. meet this guy howard schultz he wants to expand starbucks and i think you guys will like each other. i met howard. i didn't really know that much about coffee but he's such a charismatic guy and so smart and passionate, first of all we did become very good friends. >> what year was that? >> probably in the mid-to late '80s. >> wow. >> and i invested in the man because i just -- i just saw that this guy is -- he's a winner and an amazing guy and obviously done amazing things with starbucks. >> big moment for me, i said i would ask you this question if i got to interview you.

>> oh, gosh. >> a branding question. >> yes. >> the only artist i can think of with an initial as their last name are in hip-hop, eric b, warren g, how did you come up with kenny g? >> those guys came way after me. i started this thing. my last name is gorlic and all my friends and when i was playing music in bands, g-man, hey g, so when i broke out and made my first cd, everybody said look, let's just call it kenny g and that's kind of -- >> someone with a difficult last name, i'm tausche, i can appreciate that. i would like to go by call la trjts. i don't know if our producers would go for it. you're a day trader, interested in the stock market you have a starbucks investment. we talk about mcdonald's, new ceo, branding expert, what do you think about a company, american brand like that, able to itself snaernds would you buy mcdonald's shares? >> i would have to look at how

the stock is going up and down in the last year or so. i have to talk to my friend todd morgan from bell air investment advisers. he handles my stuff. i'm a risk stataker. i buy stocks more than a normal trade wear. i like taking more risk. i'm okay with that in my portfolio. probably just a cold question, would i buy mcdonald's i would say i probably would buy it. >> what other stocks are you in right now? >> personally, i've had a few stocks that have not done well. walter energy and that thing just has been going down and down and down. i sold it earlier, but let's see, what did i have? i've got -- what's on my thing, apple of course. >> that's good. >> of course microsoft, couple from seattle. >> nice. >> very few artists have had the longevity you've had since 1982. >> yeah. >> and you sold i think somewhere north of 75 million albums, which puts you close to the top 25 album sellers of all time. >> yeah. >> if not in the pack, i'm not

sure -- >> i'm right around there, yeah. >> compared to other artists, who aren't necessarily great at managing their money and their finances, what have you done, do you feel like you've done a good job, and what have you done from the beginning with the proceeds of that to set yourself up where you are now? >> first of all, i'm an accounting major and so i can appreciate the balls lancing of the books. i know if column a is your expense and column b is your income, you hope that a is smaller than b. that's just common sense. a lot of people don't have that common sense. they spend more than they make. so that's the one. and two, i just surround myself with really smart people like my friend todd, i have a great business manager, lester, and i ask good questions. i'm the kind of guy that i look at the smart people and what they're doing and then i go, okay, why are you doing that? should i be doing that? i ask questions. >> do you collect anything, cars, real estate? >> not really. no. i think i own some good real estate so that's good.

>> do you have advice for young artists coming of age in a changing music landscape? >> just be smart. talking about finances? >> and also navigating record deals, streaming rights, i mean how difficult is it as an artist to navigate that? >> you have to love what you do and stick to your integrity. i'm an instrumentalist and play this. i stick with songs right for me. secondly just be smart about your investment don't think you're bigger than you and don't think it's goings to last forever. i'm lucky i've had a career for 30 years, but a lot of people don't get to be out there as long as i have so it can end any time. be smart. >> the talent and the hair. >> got to have good hair. >> kenny g, g-man, perhaps the top selling instrumental artist of all time, thanks for joining us. >> it's a pleasure. i'm a big fan, big fan, so i watch all the time. believe me. i think i watch too much. >> no such thing. >> we appreciate having you here. might ask you to close us to break because we have you here with your instrument. sponge bob and dora the explorer

are cutting the cord, we will find out more in a moment. but here's kenny. >> oh, i am. >> doing some of his musical best here at post nine. ♪

sponge bob and friends are jumping into subscription streaming. nickelodeon announcing plans to follow hbo, cbs and launch its own direct to consumer subscription service. details of the service will be announced next month and nickelodeon's parent company viacom said the service will be aimed toward mobile devices. this is the first property of viacom to pursue this. interesting development. >> big for kids. i mean i know you don't have them but i certainly do. >> but i am one. >> yeah, right. >> i watch some nick. >> sponge bob, is that your favorite? >> it is. still thinking about ren and stimpy from my younger years. we're watching amazon and google, both reporting after the bell. amazon shares have take an hit of late. what are you watching for from that company? >> from a.m., really want to see how much they're spending on content will that continue to

hit their bottom line or have investors adjusted enough. with google are they going to outperform the way facebook did. >> we'll be watching that. certainly a busy afternoon for tech. a busy morning as well. for now that does it for "squawk alley." it is noon on the east coast so we'll send it to the "fast money half time report" and scott wapner. >> welcome to the "halftime" show. meeting mete our starting line up. stephanie link the coportfolio manager of jim cramer's charitable trust. joe terranova senior managing director at virtus management partners and pete najarian, co-founder of option munster and josh brown joining us from sunny san diego or hazy at this hour. our game plan -- >> it's san diego. >> thank you. place your bets. >> days before sunday's super bowl we are live in vegas with the latest on the line and where the big money is