good thursday morning. 8:00 a.m. at starbucks headquarters in seattle, washington, 11:00 a.m. on wall street, "squawk alley" is live. ♪ ♪ welcome to "squawk alley" for your thursday. joining us henry blodget,

founder, editor and ceo of business insider. joe terranova and kayla tausche here as well -- jon fortt and kayla tausche here as well. giving some back after the fed induced rally. speak of the dow apple joins the dow today replacing at&t worth more than $700 billion, but only ranks fifth in dow weighting below companies like goldman sachs, ibm and boeing and henry, you've been tweeting about apparently not a big fan of price weighted indices. >> absurd the price per share. come up with the craziest way to do an index that would be it. it's been that way forever. no need for innovation there. congratulations. >> i was going to say, the dow has critics but they were first by 150 years or so and they've got history on their side. >> and more interesting, apple's tv announcement, i don't know how you all looked at it, but potentially a very big deal, it's like the first big attractive cord cutting option for folks who like sports and so forth, could be a big business down the road and people are

missing a lot of it which is a lot are going to goes to this. hard it to get you guys on this, right. >> right. >> the report. excuse me. >> the report. >> yeah. i mean, what i wonder is, how apple's movements will influence the dow or not and whether the dow will stabilize apple's movements and moments of great rumor. the biggest apple moves that i can think of in the past ten years, haven't been because of broader macro economic things, haven't necessarily signaleded something about the economy unless you count the rise of the iphone as signaling the smartphone era. when apple moves what will it mean and be relevant to the dow overall as the big names moving. >> the journal noted had apple been in the dow from the time of its stock split in april the dow would be up another 700 points or so. you can't ignore that, henry. >> that would be great. >> exactly. >> or would it? what is the dow supposed to do, supposed to signal or indicate about the economy and would an extra 700 points really be an

accurate barometer? >> we'll find out. obviously the watch news is the other big piece of it, henry, as you know, in addition to the tv news. speaking of the watch jean-claude, the ceo tag hoyer and head of the watch division at lvmh gave us his thoughts in the last hour. take a listen to this. >> i think the apple watch is perfectly designed and it looks like an apple watch and that is what an achievement, design a watch that looks like an apple watch. it was not easy. imagine they would have done a round watch it would not have looked like an apple watch. all you know, i think it's a brilliant design for apple. even if for my own tastes, i prefer a little bit more sexy, but that's -- everybody's different. >> that's a ceo who, upon first viewing of the watch, the design, back in the fall, called it too feminine, said it looked like a student designed it. apple has people on the run. >> this was a beautiful dis if you listened to what he said.

looks like an apple watch. in the end, i would like my watches to actually be good looking. but it looks like an apple watch. >> this was a classic just whiplash moment. afraid of being posterized. the posters of michael jordan dunking on people and how they would last for years. that is what the apple watch is about to do to people who dised it when it came out. steve ballmer who had the comments on the iit phone, nokia's ceo, et cetera. apple's watch is going to be more successful than any smart watch to this point. that's safe to say. now he's trying to get into the game. >> and get people to pay thousands of dollars for his product instead of 10,000 and up for the higher end of the apple watch. do you think they went too high, henry? do you think in that bracket they can compete with the tag hoyers of the world? >> the way it's been explained by another luxury expert, it doesn't really matter what americans think. there are going to be huge markets for this around the world. you might as well put whatever

price you tag you can on it, it's going to be a status symbol. seems like a smart pricing strategy. to throw cold water on the bullish outlook, still don't think apple has answered the question, what is this thing for? i realize millions of people rush out to buy it, it's apple, y have to have it. what is it for? what does it do. >>? >> i agree. >> i wait years for this big screen, why do i want a 2 inch one. >> apple doesn't have to tell us what it's for and it's still going to sell millions of them. >> millions. >> in the first week. >> and that alone will be more than any other smart watch has ever sold. >> millions will not make this a long-term, home run product. as a potential consumer i have not heard what it does that i need. how does it improve my life? >> i think -- >> we'll find out in a couple weeks. >> more to come. >> a lot. >> starbucks making more news with plans for a stock split along with a new deliveries service in seattle and new york city, but, of course, most of the headlines around the country this morning are still about the controversial race together campaign. ceo howard schultz $address some

of the criticism in an interview with cramer on "mad money." take a listen. >> there's no part of this on any level that's about marketing or pr or trying to get more business. i don't think it's going to hurt business. we have not seen that in the last 24 hours. this is going to have a long tail to it. i think people trust the brand, they trust the intentions of the company, they trust our people, and i have great faith that our people will do the right thing and not put any customer in a situation where they're being handed something they don't want to carry. >> i would like to know what you think of this, henry, from a cultural standpoint and a stock standpoint. >> i salute starbucks for often jumping into issues like this that often have just get people talking serious issues they've done it before. most companies will shy away from it completely, don't want anything to do with controversy. good for starbucks that they're willing to go there. >> what lessons did we learn about rolling out a corporate message if you want it to be on as grand a scale as starbucks

was hoping with race together? >> good question. we'll see how it goes down the road. >> it's about the context. i mean, i think maybe in our culture we're starting to confuse commerce with intimacy a little too much. just because i spend money with you every week doesn't mean i want to share my deepest feelings with you that we're on that level. there's a time and place for certain types of conversations, to serve -- deserve more than 90 seconds, deserve maybe 10 or 15 minutes. i'm not sure there's time for that in the starbucks. >> that's clearly what the big pushback on social media is. a lot of the tweets, of course, that we've seen, here's one, back in my day you had to evesdrop on the next table to everyhear uncomfortably stupid racial comments at a starbucks. gen eiffel here's your boiling hot coffee and let me tell you where rudy was right. if you start to engage me in a race conversation before i've had my morning coffee it will not end well. >> this is about the execution of it. absolutely. again, most people given what howard schultz did, most ceos

stay away from that. >> his intentions i think are noble. i think this is a conversation we need to have. now we need a place to have it and time to have it. and i think both are key issues. >> the question, too, is this a conversation that should be had between a conversation between a customer or barista or addressing from the board room and corporate levels. >> so many ways this could go wrong. a barista trying to have this conversation with somebody and their response is offensive. now you've got an employee who's upset and a customer who's uncomfortable. it could happen and probably will. >> a good read is kareem abdul jabbaar, in awe the company is trying it and shocked they think it's going to work but the stock, ipoed in 1992, henry, never been higher than right now. >> incredible. >> yeah. >> maybe they could sell addictive drugs. >> starbucks there and have people talk about that. maybe it will work. >> jane wells was at the shareholder meeting yesterday and interviewed a lot of shareholders who were in line,

waiting to go into the meeting, and they actually all applauded the company for doing this and said that they would be happy to talk to their barista about those issues. >> you make me that much money i will be happy to talk about it too. >> when we come back, yahoo! officially closing all of its operation this is china, laying off about 300 workers, shutting down its research center in beijing, the latest in a series of layoffs at home and abroad aimed to trim about 700 jobs since october. in the meantime the lockup period for yahoo! investment, alibaba has expired, 437 million shares were opened up for sale and today you can see the stock is up a little bit more than a percent or so. that was a worry among some, henry, people tried to make the parallel between when facebook first expired the lockups expired which some argue was a relative low for the stock after the ipo. >> often things trade down into the lockup release in anticipation of it and then that's the bottom. it could be here. >> yeah. >> are you worried about china? so little we know about what the economy is truly doing, what the central bank will do about it? some say if you want to play

this space, yahoo! is a safer bet because it's not as heavily levered to china. >> that's one of the reasons that alibaba has traded at a bit of a discount, what we don't know about china and the economy there. obviously incredible powerful there, how much bigger can they get, how big can they get? are they going to be able to diversify internationally. >> it's trading at a discount to its -- where it traded after its ipo. still up after the ipo but it's multiple on 2015 earnings is ten times that of amazon. is it worth that? >> amazon, totally different story from an earnings point of view, not a company that's trying to generate earnings. alibaba, again, i think there is a discount because it's a chinese company. it's in china, it's different market. if it were the same cash flow and growth rate in the united states, united states company, it would have a much bigger multiple. >> one of the things amazing to me how yahoo! has done relative to alibaba since the ipo and certainly year to date. i mean yahoo! has done a lot better than alibaba. a lot of people thought once you separate these two, everybody's

going to rush in to alibaba. nobody's going to care about yahoo! at all anymore. not the case. >> finally, meerkat, only a few weeks old but having an impact on the political scene. former white house senior adviser dan pfeiffer writing an op-ed with the headline "how meerkat is going to change the 2016 election" makes the argument meerkat can do for tv what blogs did for newspapers being easy and cheap to use. we did talk to the ceo last week and he told us about the company's focus going forward. take a listen. >> our main focus is more making sure the product is going to be solid and working, that every time you press that button, people will be tuning in and it will just work magically. >> what do you think, henry? does this smell like a fad or not? >> i think the concept that it makes it much easier to live stream is great. i think the challenge that these companies always had going back to ustream and just tv and others, you have to have

compelling stuff to watch. lots of folks who might imagine they're particularly are compelling aren't that compelling to many people. that will be the challenge. if some i can't daze making a -- candidate is making a speech where the networks aren't covering it, you might have a group of people, other journalists waiting for the gaffe. but this is live. one part of video that is totally working is actually saved clips. you didn't have to see it live and here it is whenever you want it and meerkat is not hitting that. >> if something happens on that live stream, what's different about meerkat is you can download it. you can keep it. you can save it and you can publish it later, at least that's what ben rubin was saying the company's strategy is. i take your point about the gaffes. if candidates or would-be candidates didn't have to be on 24/7 before, they certainly do now. >> harder and harder to be a candidate. >> i don't know. smartphone cameras i think were making this dangerous up to this point as mitt romney can certainly attest. not sure how much just live

streaming itself adds. we've had live streaming as well. it's the social factor on top of live streaming that could make this interesting. i wonder if it's more interesting for organizing a campaign than the speech moment. you can kind of draw people in to a right now moment. your fervent fans of a candidate it might prove to be more effective internally than external sfli you wouldn't be willing -- you like the notion, the concept but not sure if meerkat, despite having first strike advantage will leverage that long term. >> you have to figure out how to aggre grate an audience big enough and content compelling enough for a big audience to watch. maybe the plan is we don't care if it's 2 here, 17 over there, 5,000 here, in aggregate all over the world at once, the audience can be pretty big and we'll figure out a way to put advertising in front of that. maybe that's the plan. this is vastly more convenient than the laptop version of this, the first generation. >> certainly the company would have to get its infrastructure there too. it's been live for what, 17 days, something like that, so to be talking about a audiences

above 10,000, at that point you're really talking about serious capabilities on the back end. >> if you want to organize volunteers canvassing in a particular state or area, you're the candidate, think how much more powerful it is to talk directly to them live. >> especially in some of the early caucuses that might be effective. you're going to stick around for a bit. >> great. >> check in on the markets. yesterday on the back of the fed statement, we did see a rally in stocks and bonds and the euro but most of that is being unwound today. the dow is down by 92 points, despite the fact that apple is one of just a handful of winners on the dow today. some of the winners on the s&p, leading the way, are wynn, delta, red hat and facebook, but the s&p is still in the red by about 9 points. nasdaq, though, holding on to some green by about 0.10%. caterpillar and chevron slipping, the stock the worst performers on the dow right now. carl. >> when we come back the state

of new jersey holding a hearing on a law that could drive uberer out of the garden state completely. live outside the capital for reaction. plus t-mobile making a big change to its strategy, a major push into the business world. ceo john legere will break it down. etsy and pinterest getting hype with fresh multibillion dollar valuations. the brick and mortar stores standing to benefit from all of that. see if you can guess who it is, when "squawk alley" continues. the quietest or nothing. the sleekest... ...sexiest, ...baddest, ...safest, ...tightest, ...quickest, ...harshest... ...or nothing. at mercedes-benz, we do things one way or we don't do them at all. the 2015 c-class. see your authorized mercedes-benz dealer for exceptional offers through mercedes-benz financial services. so open an account with schwab. and when a market move affects, say, a cloud computing stock you're holding,

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today the state of new jersey is holding a hearing on legislation that could potentially drive uber out of the state entirely. about 500 drivers are protesting right now outside that hearing in trenton, new jersey. kate rogers is there live and joins us with more. kate? >> hey, kayla, that's right. the crowd is certainly thinned out since we came in earlier. there are people inside. regulators are considering a bill that would restrict uber more tightly in the state of new jersey. new jersey state ledge ta tour thinks they are necessary but uber drive feels differently. we're here with scott cleveland who lost his job and drives for uber full time. can you tell us how much money you're making? >> full time i make prox will i a thousand dollars a week, which is great because it keeps us from essentially going back and losing our home [ inaudible ]. >> so do you have any specific rights as far as what state of new jersey is doing in terms of regulation? >> i'm concerned that it could

start -- >> i think we're having audio issues in trenton and back to them if we can. new jersey continues to make news with regards to uber, tesla, chris christie signing a law that cup assume assume -- done assumers can buy directly. >> that's a big deal. >> that's great. >> you think so? >>. >> there's no -- when you step back and think about it, why shouldn't the company be able to sell its cars. good for consumers. company can take care of them. >> absolutely on the uber and lyft issue i don't get why uber and lyft shouldn't have to play by the same rules as taxis. is the taxi industry overregulated? i have gotten into a number of sketchy smelling cabs in new jersey as someone who lives in new jersey. the uber experience thus far, has actually been better. but you sort of wonder, is the insurance there, should something go wrong? i would like that to be there. so, you know, if the issue is overregulation, okay, maybe it's

a broader issue across taxis and uber. if it's underregulation that's a concern to. >> i agree. uber is spinning this as you're going to drive us out of new jersey and they're playing right to everybody who's ever had a good experience in uber saying that's outrageous we have to keep them in, let them to what they want. sure it makes great sense. a lot of the regulation that was created to give you the experience you want and the safety you want, technology is now taking care of that with uber. reviews are very powerful things. and when everybody has to live up to that helps. technology is helping and sounds like modify the regulations a little bit but it does seem like uber is spinning this -- >> i had a driver tell me at the end of the ride i'm going to give you five stars as if -- as like that's now a currency, right. >> that's right. >> it's going to affect your ability it to get a ride the next time. >> absolutely. >> he wanted you to give him five stars as well, i suppose. >> obviously. >> did you? >> i have no idea. >> oh. >> in new jersey, actually, in the last year, the police forces have been launching sting operations to stop ubers on the

road, pulling the passenger out, arresting the driver. they've taken a hard line in the state against the service. of course it will remain to be seen what happens after today's protest, but certainly the state has been unfriendly to the service. >> yeah. i mean i had a case just a couple days ago, my wife was getting a cab somewhere, there was confusion the cab didn't show up, i was able to order her an uber for a long trip and it arrived within six minutes. that's much better than the cab experience be where we live in jersey. so clearly this is something i think that we need. it's just a question of what regulations need to be in place to protect the consumer. >> you hopefully don't want regulation that is just existing to protect the incumbents. >> right. >> that is what is taking place in a lot of cases. i'm not sure that's the case here. >> let's go back to trenton and check in with kate rogers. i believe we have the audio issues solved. back out to you. >> hi, thanks so much, kayla. as we said we're here with full-time uber driver scott cleveland who lost his job and

now driving with uber full time. thank you so much for joining us once again. >> thank you. >> tell us how much money you're making on the uber platform? >> working full-time i make $1,000 a week which is very important to staving off bankruptcy for my family. >> if you were to face greater regulation in the state, a different background check, vehicle inspection mandated by the state would you drive for uber. >> providing it's cost effective and i can maintain the licenses and business as well. >> so you're working as an independent contractor and that's an issue that uber is facing out in california, where some drivers have sued them over independent contractor issues and they feel they should be full-time employees. what's your take? do you mind being deemed an independent contractor? do you want benefits? >> i do not mind being an independent contractor. would it be nice to have a full-time position with benefits yes, in? i don't mind being independent as well. >> thank you so much for joining us. >> thank you. >> day la, john, carl, back to you. >> kate rogers in new jersey

today. henry, thank you so much as always. >> great to be here. >> see you next time. henry blodget. >> when we come back a major strategy change for t-mobile expanding its reach to businesses and consumers. ceo john legere will tell us why when "squawk alley" returns. barbara just bought a bike. she wrote a tweet about it. you can't learn much from that. but take data from millions of tweets, combine that with your company's supply chain and sales data. apply ibm analytics and expertise, and all of a sudden, you can learn which bikes to build, what to make them from, where to sell them. because barbara and the world just told you how to build a better bike. there's a new way to work and it's made with ibm.

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. welcome back to cnbc. i'm michele caruso-cabrera with a market alert. we want to show you the greek yields. they're spiking intercession. we will show you the two year and ten year at this point. pretty sharp rises. couple things going on, ft article suggesting the ecb is about to get tougher on greece and the banks in terms of debt. there's also reports about whether or not the greek government is going to go forward with some kind of legislative changes which would go against the bailout program. bottom line, it's getting uglier and uglier the situation there and if the ecb guy does start to

get tougher on the greek banks would could get closer to things like capital controls which would put greece on the edge and participation in the eurozone would be in question. back to you. >> michele, thanks for that market alert. t-mobile ceo john legere making a few announcements yesterday the carrier making a push into the business world with a simplified plan. where does he see the company business wise in three years? take a listen. >> i think we're the only carrier that is growing the ebitda margins of a business at a great pace. the number one core thing here is to change that industry to growth share. i don't have a specific number on how much because i'm actually also focused, jon, remember, you know, 72% of consumers make their choice based upon the business decisions that are made, so there's also a very big drag along, 50% savings, that i'm looking for to get consumers to come to the business as well.

>> and that drag along affect legere is hoping could appear in the form of a boost for personal and family plans. >> what we're going to do now in addition to how we already pay for early termination fees and contracts, we're going to pay up to $650 to get you out of these phone contracts for true carrier freedom, and i think the other big news is, t-mobile, the group that did away with contracts, we we were' bringing the contracts back and i'm going to sign a contract to every customer that says your data plan and rate will not go up, the fixed plans, while i'm here. >> well, it's an interesting effect, right. they've got this bar and they're putting out happy hour specials to try to fill it up. t-mobile has spectrum, they've got a bunch of towers, lte, they need customers and business plans and area where they're underrepresented trying to beef that up. >> they have about 3% of the business market share right now, so how much of that do you think

is really up for grabs? a lot of those are under contract that don't roll over every day? >> they are, particularly in enterprise, but small and medium sized businesses are the ones that could really be pulled along with this especially moms and dads who want to get deals for their kids with their plans. >> stocks near the highest levels since august of last year, 3308. clearly responding to some of this. some still argue look i'm getting five, six dividend on at&t, four, five over at verizon and not much of anything at t-mobile. >> he's got a tough slog but managed to turn these little marketing events into moments when he can get his message out, unlike when at&t and verizon switch up their pricing. >> and moments that erode the margins further. >> yeah. >> when we come back, shares of alibaba seeing a gain after the first lockup did expire. how do you plays the stock going forward? we'll talk to haney nada one of the earliest investors in alibaba. dow down 82 points. don't go away.

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hello, i'm sue herera. theses a your update at this hour. president obama making a move to requires the federal government to cut its greenhouse gas emissions by 40%. he signed ap executive order less than an hour ago. turning overseas the u.s. and iran may be a step closer to an agreement. officials tell the associated press a draft nuclear accord has been negotiated between the two countries. it would force iran to cut

hardware that it could use to make an atomic bomb by about 40% for at least a decade. honda adding more than 100,000 vehicles to its nationwide recall of driver side air bags made by takata. the vehicles include the 2008 pilot suvs, 2004 model year civics and accords from 2001. the problem, the driver side airbags can explode with too much force. honda has recalled a total of 5.5 million cars and suvs in connection with the air bag issue. and the duchess of cambridge kate middleton revealing she's due to give birth in the second half of april. a royal baby could give prime minister david cameron's party a feel good boost as it heads into the general election may 7th. and that's our cnbc news update this hour. let's get back to "squawk alley." take a look at alibaba this

morning. shares rallying after that first lockup expiration in the week. it got us to thinking how does the expiration compare with our notable companies like amazon and facebook. dominic chu is back at hq with answers. >> so carl, alibaba today, already seeing a surge in volume. yesterday we saw more than twice its average daily volume with the lockup expiration a and today that's carrying over. shares up by a percent and they've traded about 16 million shares, the average trading volume over the last three months. this has been at least for now relatively well absorbed by the overall market. if you take a look at since the ipo, we have seen this run up to around $120 and in the steady drift lower to where we are now, $85.50. the question is, did a lot of this lockup expiration get priced in. we've seen some evidence of this kind of thing happen before. like you mentioned let's take you through a few other big names. let's start off with what's happening with facebook overall because with it facebook, back on august 16th, 2012, we had the first lockup expiration,

significant one there, and ahead of those, those shares were down about 6% on that day alone, and they were drifting lower. we hit about $17.55 just a month after this, the dead low for those shares post ipo. if you take a look at another recent one it's about what's happening with gopro. look at those shares, we can see a ahead of that lockup, october 2nd, 2014, the stock was down 7% and we've seen a lot of that priced in drifting steadily lower as well. maybe a buying opportunity, who knows. we'll it finish off with the amazon.com look. it's been around for ages on the longer term. we took our chart and just focused on its ipo in its first year here. november 12th of 1997, we saw the shares down 4%. they were down 6% the day before. you can see a lot of that kind of pricing in there and, of course, amazon just took off after that towards the dotcom boom. kayla, it just tells you about whether or not you think at the long term prose pects are good, alibaba has an analyst target of

$111 per share on average. that's a 30% move from current levels. so whether or not you believe those analysts for right now, this might be a buying opportunity if you believe those fundamentals. back over to you. >> yeah. there's still a couple initial lockups for alibaba but we will see what the shares do. thanks for that historical perspective. meanwhile internet giant yahoo! announcing it is closing its china office as part of a global cost cutting effort. the beijing facility was yahoo!'s only remaining physical presence after it sold its chinese operations to alibaba in 2005. yahoo! shares have gained 16% in the past year. they're up about a percent today. the gain in the last year was due in part by the company's 15% stake in alibaba. joining us now, hany nada, managing partner at ggb capital one of the earliest investors in alibaba. it's good to see you. >> good morning. >> so walk us through the news on yahoo!'s restructuring. it was expected that they would continue cutting jobs, but we're years into the turnaround. at this point the fear is the

company might be cutting muscle. do you sense that? >> it doesn't feel like it quite yet. yahoo! still has a number of great properties on its site. i think they're wanting to reinvest and double down on those and cut away some of the fat in areas that have not been performing. >> meanwhile, jim cramer says if you want to play alibaba there's too much near term weakness, be it regulatory issues, political issues and then the stingy lockups with a couple more dates in the near future. do you play alibaba through yahoo!? is that a safe bet? >> you know, i'm a big fan of alibaba and what they've done. i think long term this is a fantastic company. it's really hard to find a multibillion dollar company the size of scale alibaba is at growing at 30, 40%. i'm a long-term believer in the growth. >> hany, looking back at the ipo moment for alibaba. there was just a lot of hype, there was a lot of pressure. i was saying i think yesterday it seems to me like even the

folks at alibaba were aware of that, that it was getting a bit intense. looking at how the stock has performed since the ipo, do you thinks the hype is gone or do people still have some reality checks to absorb? >> well, i think it's gone through the typical cycle ipo where there's so much excitement at the beginning, the stock runs up ahead of itself a and as the company tries to rein in expectations, tries to rein in the analyst estimates and so on, to keep people grounded, the stock tends to fade back. there's always also a lockup expectation game. everybody expects a lockup is going to happen, more shares are going to come to the market, so a lot of trading that happens around that ahead of the lockup and one of the interesting things alibaba is that most of the shareholders, about a dozen or so shareholders, are the big shareholders of alibaba, they all have sticky it fingers. they all believe in the long-term prospects of alibaba. i was a little bit uninspired or

underwemd in terms of volume of shares yesterday. people were expecting about 300 million shares to trade. only 35 or so traded, so tells you a lot of the big holders are still holding on and believe in the long-term prospects of the stock. >> we were trying to game out yesterday whether ma has created a culture where people are encouraged to hang on or to enjoy their great, you know, reap the rewards of their success? >> i think jack and just chinese culture in general tends to be hard working. it's less about the numbers at the end of the day and more about the work and what you're trying to do. i think that's the culture that permeates alibaba and actually many, many chinese companies. >> hany, what is the catalyst from here? we're expect something earnings from the company in the range of may. but then everyone's looking at the payments unit and saying when will that go public, what type of windfall will that be? what are you watching? >> that's probably the biggest catalyst is the ali pay and the potential listing. i think other smaller things, that continue to clean up of the

sellers, the continued optimization of the business, the move to mobile, their expansion into other areas beyond just e-commerce, those are all like micro catalysts if you will along the way. i expect the stock to do well over the next two years because of all these catalysts and the potential for the big one which is ali pay. >> it's getting a lift today up by about 1% as the lockup has come and gone. it's always good to see you. >> thanks again. thanks for having me. >> hany nada. >> when we come back a it few minutes from now, tesla's ceo elon musk will hold a conference call about in his words ending range anxiety. what to expect. rick santelli on this thursday, what are you watching? >> you know, back in the day, treasury prices were a lot lower than they are now. bond futures right now have a 148 handle. we're going to talk about a time the handle was half that, right before the crash in '87 and there's a lesson to be learned about the current state of

treasuries. all after the break. transferred money from his bank of america savings account to his merrill edge retirement account. before he opened his first hot chocolate stand calling winter an "underserved season". and before he quit his friend's leaf-raking business for "not offering a 401k." larry knew the importance of preparing for retirement. that's why when the time came he counted on merrill edge to streamline his investing and help him plan for the road ahead. that's the power of streamlined connections. that's merrill edge and bank of america.

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who is most at risk straight ahead on the "halftime report." >> sounds good. you might have an interesting market to deal with. session lows with the dow down 131. to the cme in chicago, rick santelli and the santelli exchange. hey, rick. >> hey, carl. you know, we always feed to have one eye to history because it gives us many clues as to what may lie ahead and what type of activity we should be prepared for and no day comes to mind more clearly than the crash of '87. this isn't about the level of stocks. this is really more about liquidity, zarsty and how markets trade. keep in mind, even under normal times, if markets have an increment let's say of 132nd like many treasuries do, when markets are normal and active but nothing weird going on, it's always a very tight bit offer spread. no light that comes through. the s&p futures are good pit to keep this in mind. so they trade basically very tight, but when the market gets crazy the bid offer spread opens

up. you will see the s&ps trade in full point increments, treasuries in two or three 30 seconds because the market is on the fly. that was when days were super liquid. what i remember most and the lessons to learn looking back to the future, treasuries futures and options in 87 was this, keep in mind the price of the head bond contract back right before the crash in october of '87, was about half of the current price at 148. it was in the high 70s. what i remember most, is really about the bond options pit. that there were clients that had out of the money calls, long 82 calls, 84 calls, 86 calls, out of the money. okay. but when the crash hit and the stock market moved down and here's treasury options what happened was, that you couldn't sell your options at intrinsic value. in other words the 82 calls that were out of the money after the crash started, treasury futures rallied. that's how we've conditioned

ourselves the only hedge against a spongy equity market or sell-off is long treasury futures. we have the assumption there's going to be liquidity. there's issues. above and beyond those issues think about who the traders are in the marketplace now. high frequency, al gor rhythmic, nothing against that, but i question whether they're going to be standing in. see the lesson was those people that were long 82 calls out of the money when the market was trading 88 in the money, they were selling at less than intrinsic value. why would anybody do that? they just wanted to get out. nobody knew what the next day or next week held. the lesson to learn is, everybody thinks that everything is nailed down, they'll deal with liquidity, they could dealt a hedge, do everything at a price that they want. when things get crazy especially in the new world, that might not be as true as many traders think. back to you. >> all right. thanks so much, rick santelli, in chicago. just a few minutes tesla as ceo elon musk will hold a conference call that in his

words will end range anxiety. phil lebeau is live in chicago to tell us what to expect. phil? >> kayla, we'll be on the call that starts in about 15 minutes. it all revolves around the question, how do you end range anxiety for people driving a tesla model s or any electric vehicle the that concerned they will run out of juice, go too far not near a charging station. here's the update we're going to be hearing about in about 15 minutes. we don't know the details but we know that elon musk the ceo of tesla will give an update in terms of what he says will end range anxiety that involves an over the air software update that tesla will be pushing out to all model s vehicles. any of the vehicles that they've built so far and delivered here in the u.s., they're going to be getting this update and really worldwide as well. the model s range according to the epa, 270 miles. remember, just a few years ago, the big push at tesla was to expand its super charger network. these are recharging stations that they have built and established around the country

and when you look at the super charger network you can see for the most part it's coast to coast primarily on the east and west coast but you can find them along main highways here in the midwest, what we call the flyover part of the country. is it muff for people who might be in nds or arkansas where you don't see a super charging station. a few that are hard to point out there that are being built and will be coming on line soon. the tesla conference call does start at noon. shares over the last five years the reason we're showing you the last five years, is because our friends at ken show have done some analysis and this is great stuff. 30 public comments like today's from tesla's ceo elon musk since 2008. when he has talked publicly, tesla shares are up 40% of the time. the average return the day he talks, 0.51%. so that's something to keep in mind. the conference call starts in a little over it ten minutes. let's see what tesla shares do today. they went up on monday after he

tweeted out this conference call would be happening. back to you. >> phil, thanks. that kind of track record makes ef hutton jealous. >> pinterest and etsy the darlings but their user have to get their craft supplies somewhere. michaels's ceo, chuck ruben, arms dealer for crafters, joins us next. ♪

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expected fourth quarter earnings, but the outlook did fall short. joining us in a cnbc exclusive, is michaels ceo chuck rubin. thanks for joining us. >> thanks for having me. >> now, one of the things that you cited in the earnings report was the rainbow loom toy saying the bloom is coming off of it a little bit. how big a deal is that one item for driving traffic to your stores? >> that item was a really big item, in fact the biggest i it tem that michaels has ever had in its 40-year history. we're on the tail end of it after the first and second quarter of 2015, it continues in the assortment as a really good item but this was a fad that for those of us who remember the cabbage patch kids, of that ill. we have a diversified business so we've been able to balance around the rainbow loom in 2014 and get through it in 2015 just fine. >> we've had scrapbooking, the rainbow loom, are you going fad to fad here when it comes to people who are crafting and wanting to do things with your hands or is there a larger

narrative emerging in this digital era where people are doing a lot of crafting digitally as well as physically? >> actually, i don't think this is a fad based business whatsoever. it's a trend based business and the digital aspect of it really shows up not so much in e-commerce, because this business doesn't lend itself to e-commerce as well as other types of retail, but when you think about the digital aspect about being inspired through social media and pinterest or facebook or the marketplaces like etsy, or on-line education, where people want to learn how to personalize and customize something, which is really the business that we're in, the digital arena really plays well to michaels and it's not fad based at all. it's more societal that everybody wants to customize something to reflect their own creativity. >> chuck, can you point to something, a metric of your own, that has changed that you attribute to the rise of pinterest, whether it's traffic, i don't know, demographics, depender, anything like the --

gender, anything like that. >> hard to relate it to something like pinterest but when you look at our performance in 2014 where we set records for both sales and profits, and then the guidance we gave out this morning for 2015, shows that this year, we'll set a new record, we think that we're doing a lot of things right in digital and pinterest being part of that, not all of it by any means but that helps excite a customer. when we can excite a customer that's where a retailer wants to do. leveraging something like pinterest or other digital means of communicating with customers, really brings them in to michaels and then our opportunity is to enable them, show them how they can make those same things that they saw on pinterest. >> you know, it's that follow through that a lot of people say makes pinterest potentially worth this $11 billion price tag that it's reportedly obtained in its recent financing. etsy about to go public at a valuation shy of $2 billion. you are valued at about $6 billion in the market.

do you think that the landscape is looking at these companies correctly based on the value they bring to you? >> well, i think we have to look at what michaels is and we're excited about michaels. we have a number one position by far in our space. it's an exciting industry that's over $30 billion big. very fragmented. we have very high margins, very good cash flow, so we'd love to get the same valuations the digital companies do given the profit margins we make. we're focused -- how other companies are being valued is up to others. we're focused on delivering a great experience for our customers and delivering great value for our shareholders. >> chuck, very quickly, be if you can, how close are we to seeing a 3d printing product that is going to have a huge commercial impact, a 3d printer? >> i think you're starting to see that. one of the interesting items we have is called a 3 doodler, a pen, but it's a 3d pen and you can make things.

the prices are expensive. but like any type of technology over time, and i don't know whether that time is a year or two, the prices in technology will come down and i think it does become somewhat more accessible to more customers. >> well, you would know. thank you, chris rubep, ceo of michaels. >> thank you very much. stock has recovered most of the losses of the morning. say good-bye to the cd. how things likespottify are driving it extinct when "squawk alley" comes back. e

financial noise financial noise financial noise financial noise

not a surprise, cds are going the way of the do-do. new data reveals revenues from streaming services like spotify jumped 29% to $1.8 billion higher than the $1.85 billion brought in by cd sales which declined nearly 13%. and i love this last part, sales of vinyl records saw the highest increase up nearly 50% last year as we all know vinyl is trendy again, but that's amaze magz the death of the cd. >> i wonder how much 8 tracks were up. >> starbucks will stop selling cds at the end of the month too. that could put a dent in sales. >> big driver of sales for a

while. not a lot of drivers of sales for the dow, down 117, s&p is down to 2088 as we watch declines in crude. nasdaq has been stubbornly resilient over the past couple days 4990. over to headquarters, michele caruso-cabrera, and the half. ♪ welcome to the "halftime report." i am michele caruso-cabrera in for scott wapner. we have joe terranova, he's senior managing director at virtus investment partners, josh brown, ceo of ritholtz wealth management jon and pete najarian the co-founders of optionmonster. you guys get a two shot, wow. our game plan looks like this, ticking time bomb in bonds. why looming rate hike may create a nightmare for bond investors and who's at risk and why. selling out of ebay. we've got the analysts banging the gavel to sell on the auction site and first k