louisiana to the world. at chase, we're proud to support our grant recipients, and small businesses like yours. so you can take the next big step. good morning, it is 8:00 a.m. attest la headquarters in palo alto, california, 11:00 a.m. here on wall street, "squawk alley" is live. ♪ ♪

♪ ♪ woebl to "squawk alley." henry blodgett. dow close to session highs, alibaba is the big story. shares rallying after revenue topped estimates. we talked to the coo and the incoming ceo this morning and here's what he said about the latest quarter. >> to date more and more consumers in china use mobile to online shopping. so on the other hand. more and more merchants start to spend marketing dollar on the

mobile side so based on this we believe that the mobile side will continue to increase and we are confident that it can outapproach that on pc and even higher. >> mark maheny analyst at rbc markets joins us out west. good morning. >> good morning. >> mobile goes from 27 to 51. they're talking about a trillion in gmv in five years. does this erase all the doubts that people had since november? >> it certainly erases one of the biggest doubts. that last quarter, that's the december quarter, carl, there was a lot of concern over the mobile monetization levels. it's shifting from desk top to mobile and the monetization rates were declining year over year. that reversed this quarter and the company seems to be confident that they can continue to rise the mobile monetization levels. big issue number one which caused it to be the biggest underperformer has been reversed. >> i think the question mark is yes maybe they'll be able to

raise mobile monetization levels. to where? as they shift more revenue, which mobile revenue up 352% and astounding level of growth there as it becomes a bigger percentage of the company's revenue, how does that affect the overall makeup of the business model? >> yeah, so you know, first you got to go where the consumers are, they're going towards mobile devices. secondly in terms of the monetization rates, you're doing about 2.3%, take rates on desk tops and 1.7 take rates on mobile devices, they're converging and the company seems confident that they will long-term, we think that's probably right. this is not a multiquarter phenomenon. this should be a multi-year phenomenon. long-term the monetization levels should be the same. i don't think it matters too much if it's lower a couple of years from now, you're dealing with a lot of incremental demand. you put mobile devices in people's hands, they buy more from you, it's good for alibaba and most e-commerce companies. >> does alibaba have to expand

beyond china to justify this price, if so when are they going to do that? where are they coming? are they going to come to the u.s. and compete with amazon? >> yeah. those are the right questions, henry, the multiple, we're doing depending on where numbers shake out. maybe 30, 35 pe on this kind of stock on next year's numbers. given top line and bottom line growth. it's in the same neighborhood. we think the valuation here is eminently justifiable. to go materially higher from here you probably need to see something else happen. either need to generate other revenue streams within china like cloud computing, which is major new initiative by the company or has been for the last few years or retail success without outside of china. we're relatively skeptical that they can do it outside of china. they're probably going to have do it through investments and they're making a few, some of which has been publicized. but to do kind of a full direct approach into the u.s. and europe, the chances of them succeeding with that are probably pretty limited. >> what if anything should we read into alibaba's comments,

daniel zhang's comments that their hiring freeze is really about efficiency. similar to a move they made three years ago. looking across to other companies like twitter, making some revenue moves that they say are based on discipline rather than short-term trying to get revenue. is there any thread you're seeing across multiple companies in this quarter where they're trying to be more efficient? or can we read too much into that? >> i think we're going to take them at their word this as an efficiency step. they actually did this same sort of move, froze new hires back in 2012. this is one of these companies that still in pretty significant growth phase. they tend to overhire, underhire. it's hard to get the calibration right. i think the good positive thing is this company has been aggressively hiring and they're still doing close do or over 40% ebita margins. it's a reminder of how profitable. how much in cash flow, how much cash flow generation there is to this model. we don't read into it anything

dramatic. we think it's a positive step. the market didn't interpret it that way. they're able to do it and still maintain the growth rates, it's a positive. >> yahoo remains the best performer on the s&p. it was up over 6%, now about 5.5. how does alibaba's quarter change your view, if any on yahoo? >> well, it doesn't you know, the, you can if you want to buy alibaba, buy alibaba, don't bayh hoo. but anyway, yahoo is a derivative off of this fundamentally there's a lot of problems facing yahoo. we're not recommending the stock. we like alibaba, we like yahoo's suppose y exposure to the stock, but we're going to buy alibaba, yahoo has too many problems. >> tesla, earnings were better than expected and revenue was ahead. investors appear to be worried over rising costs and spending.

morgan stanley calling their q 1 cash burn eye-watering and elin mosque talked about rumors of engineers leaving for apple. here's what he said. >> i certainly hope apple gets into the car business, that would be great. we're not really seeing you know, significant attrition of engineers to apple. for anything, car or otherwise. >> probably the best news, henry, is they appear to be on target for delivering 55,000 cars this year. >> they do, that's good. i think the new battery announcement should raise red flags. if you look at it optimistically, another huge market that elon musk is going to conjure into existence and we're off to the races. to me it is hard to build a car company. this is the only successful car company in the last half-century. it's hard, they're still small. suddenly they're doing a huge pivot. they have a new thing they're doing, they want to be a battery company. to me it raises red flags, given how expensive the stock is and how much we're taking on faith that they're going to sell

billions of cars in a few years. >> they are a battery company. that's the thing that people often lose sight of. a quarter of the value of the vehicle is in the battery itself. an enormous number of things hinge on the giga factory. even the new battery initiative there were questions on the call about what the margins would be. he said they would be low up front. once the giga factory is up and running, they could get as high as 20%. there are so many things hinging on this, the type of factory that's never been built before. even at the end of the year, tesla sin credibly dependant, musk said, on their least reliable supplier. hover that might be. i take him at his word that apple gets into the car company. there's so many dleds that the company is hanging by. >> when people buy a tesla, they're not buying a battery, they're buying a car. the car makers are great companies and again the idea that they're going to disrupt the whole car market, that's tough. to me it's a another huge business opportunity we say wow, it could be huge someday, but we don't know and it's an expensive

stock. >> like much of the tesla story that hinges on 2017. there's so much that we put out for the tess la story, they said we will be cash flow positive in the fourth quarter is that a dangerous benchmark to set for wall street? cash flow positive by the end of the year. >> is he saying forever after, including the giga factory and all the other things they have to do? a lot of moving parts and a lot of this is baked into the future products, future cars. >> you have to give him some credit for disrupting -- >> huge credit. immense credit. i'm saying when a company like this pivots, the building a car company continuing to build tesla from where they are, that is going to take extraordinary focus. luck, skill, and now we're also going to be selling these huge batteries? it's something different and i don't think it's unlimited. even elon musk going to hit the point where he is stretched too far. >> he's really good at building demand. here's another way to build demand for batteries.

the cars do it. these home and industrial products do it. >> he's good at talking demand that he's building. 38,000 orders for the powerwall already. >> the question is, does he, is he going to be able to have the supply? and we've got so little information about that. >> all right. finally, a rough run for twitter. the stock near the flat line today, but shares down about 28% over the last seven sessions. it's the worst seven-day decline since going public. more than two dozen analysts have lowered their targets on twitter following earnings on april 28th. we've had reports of anthony nodo buying 20,000 shares. but the story over the past two weeks is well told what happens now? >> with twitter, people have been schizophrenic on this stock. it's either a zero or it's facebook. and the stock goes up and down, yo-yos massively on a new trajectory. they have a good valuation at 35. nothing is wrong.

they're growing fine. they are not facebook. there's just no way based on anything we have seen that they deserve anything like what facebook has. they are still focused on a niche in the market. they need to either invent something that suddenly makes them this massive mass market product that people use every day like facebook. or just settle in and be happy with your 20 plus billion dollar valuation. they're doing okay. >> we should note so anthony nodo buys 7,000 shares of the company. he made $73 million last year. that's a cool $280,000 that he's spending, i think he has that there are reports henry in "business insider" we haven't confirmed this, that the company thought about going into content. potentially buying mike. is that the right strategy? why on earth would they consider something like that? >> you got me. to me that is, we don't know what to do with the product. we may have something to do something different. they said it will be a test lab for us, we'll be able to figure it oulg. there's no question, they have a

massive opportunity for distributing content. no question about that. and facebook has leap-frogged them in terms of video distribution, that's a huge opportunity for them. they don't have to own it to do it. the fact that they're thinking about that, that does suggest it me, we just don't know what to do here. >> you know what i like about twitter? it's all wrapped up in periscope. my criticism of them has been twitter as it exists today is a pipe, it's not so much a product for a lot of people. periscope is so much closer to being a product. that people can get emotionally attached to. see and immediately understand. you know, i've been using it, many of you have been using it. >> you used periscope on the way home from the train last night, answering investor questions about tech. we had kavvon yesterday and he talked about the partnership with twitter. take a listen to this. >> we have great partner in twitter. our vision is so similar to twitter's vision. we want to be a pulse of what's happening around the world. periscope is a visual pulse. twitter is the same thing, just

140 characters in other media. that partnership allows us to do way more than we could have done as a start-up. >> when does it result in this? >> exactly. that's a very good question. >> what is the opportunity for that? and really how much demand is settle for more live video like this? people are trying it, so forth. i have yet to feel compelled, you, anybody would watch you, john. i have yet to feel compelled, i got to have the periscope stream to see what's going on. maybe it takes off be maybe there's a way to monetize it. >> they've got to nurture it. do what google did, getting the content and creating the content and build a business around it they've got a product that builds stickiness. so-and-so is on, i think i'll watch it. >> mayweather and pacquiao, hopefully somebody will be stealing it so i don't have to watch the pay-per-view. oh, periscope, there we go that won't be good for monetization.

clients don't like that. >> we did the comparison yesterday to youtube and it took youtube years to figure out the copyright and five weeks, give us time. markets had been mixed throughout the open of trading, but it was when the dax went positive, actually that the markets turned around. we were digesting some jobless claims this morning. all eyes will be on the nonfarm payroll numbers that come out today, s&p up by .25%, as is the nasdaq, take a look at shares of priceline, slipping even though profit and revenue at the company topped expectations. the stock down 4%. the company did say currency exchange rates will quote significantly reduce growth in the second quarter. a familiar chorus, carl, from the multinational companies? >> when we come back, the u.s. government teaming up with three companies on a new testing program for commercial drones. one of those companies, the only

actual drone make nert program will join us live. plus we talked about alibaba's quarter a few months ago, how does the company look after it split from yahoo? we'll talk to former yahoo ceo dan rosenzweig. and we'll talk to a company first to be fully chartered by new york state and the u.s. government. changing investing forever. ts i am a fully automated investment advisory service. i can help you choose the right portfolio. monitor it. and even rebalance it. i've been called innovative. revolutionary. and just plain smart. i'd blush at the compliment if i could. but i can't. so. i won't. say hello at intelligent.schwab.com

if you want to succeed in business, mistakes are a luxury you can't afford. that's why i recommend fast, reliable comcast business internet.

they know what businesses need. and there's a no-mistake guarantee. if you don't like it, you have thirty days to call and get your money back. with comcast business internet, you literally can't mook a mistick. i meant to say that. switch today and get the no mistake guarantee. comcast business. built for business.

the federal aviation administration giving the green light yesterday to a new commercial use drone testing program. called pathfinder. the faa partnering with three companies, cnn, to study news gathering in urban areas, bnsf railway to inspect track infrastructure and the drone manufacturer precision hawk for farm and crop monitoring. joining us first on cnbc, precision hawk's co-founder and president, ernie yuron. crop monitoring particularly important to the drone industry. i've seen estimates that this is far and away the biggest commercial use that we should expect from drones. how big a deal is it that the faa has green-lighted this at this point? how quickly do you expect to be up and running really showing what your technology can do? >> well, i mean this is a huge deal this is a huge deal for the industry at large, not just in any one of these particular applications. i think you know the way we interpret it is, this is the faa

saying -- we've heard you, we know that this is important and now, you know, show us, prove to us the safety case. show us that there is a business model to do this and there's a business case for it and more importantly, show us that this is good for the united states. and that's what this program is really intended to do. and that's what we intend to do. they can take all the information they're going to be collecting out of this and use it to sculpt the regulations going forward. >> ha do you need to do as far as personnel? i assume you need pilots based on the faa's regulations. you need to put certain safety precautions in use, what are you doing to set up to take advantage of this? >> well, yeah. this is going to be a very, very exciting project for us, we're going to be bringing on pilots, we've been working on technologies you know for quite a while. for within our own customer base. working with you know large companies, they are very, very keen to prove safe operations,

we're going to be using a lot of technologies we've been developing for them and apply it to this so we can make the case to the faa that this is something that can be done on a wider scale. certainly for us to be able to do this. we're going to need to scale up our pilots, we're going to need to be talking to you know the faa test sites. getting locations lined up. getting customers, because we also have to do this within the context of an actual market. you know we're not just saying you can do this over in the middle of you know, a sandy desert. this has to be done within the context of something that has value for the united states. >> sure and cnn's -- >> cnn's ability to test these drones will happen in urban areas. and this comes as every few weeks, earnest, it seems like we're getting a report of a drone within a stone's throw of an airport. what does air traffic control look like under this test program? >> well so i think the key thing in all of this is visibility. visibility of who's operating what. and visibility to the air traffic controller.

they know what's operating. this is, this is is a major concern. you know as you say, every once in a while we hear about somebody who is some place, operating somewhere they shouldn't be and this is something that we really need to find a way to prevent and find a way to give, give the authorities the ability to say who is doing that so they can go find out who it is. and tell them that they shouldn't be doing it. in a lot of cases i think this is a fairly innocent, perhaps uneducated action. but what, what the biggest part of this is, is visibility. making sure that, that users get registered. users and i don't necessarily mean that they have to sign up for huge pilot courses or things like that that's what the faa is going to be looking at. trying to understand what the best fit is for this industry. but i think it's important to know that people are going to behave responsibly and the authorities have the ability to see when they aren't. >> are you envisioning a world where pilots are going to need a license and you're going to need a certain number of hours to

operate a drone in this country? just like would you an aircraft? >> i don't want to presume as to what you know the direction the faa is going to go. i think something that makes a lot of sense would be that you at least have some sort of certificate that shows that you are responsible, that you are a safe operator. we're talking about a broad class of aircraft here. you know in our case it's a very small, you know these things, they weigh a couple pounds. and i think in that class, a reasonable thing to do would be to have somebody you know, register and get a certificate. but do they need to be you know a fully licensed commercial pilot? you know perhaps that's, that's a bit, a bit onerous, but certainly something that shows that you are competent and that you're signing up for responsible use will be important, yes. >> absolutely. a couple of pounds falling out of the sky on to your head could be a problem. you want folks to know what you're doing. earnest, you're co-founder of precision hawk. thanks so much for joining us.

>> not to mention the rotors that are going quickly. armed with $75 million in new funding, chinese drone maker dji valued at $8 billion, they make the popular phantom drome, has quickly become the world's top consumer drone by revenue. expected to exceed $1 billion in sales this year. xl says the investment is one of the largest ever and sequoia, also a big dji backer. we're getting headlines from dow jones citing sources that spotify is laying plans to enter the web business. they've held talks with online video companies about partnerships. of course they just sent an invite out, some of us got it about an event on may 20th. saying they have some news. but apparently dow jones industrials got it first. >> it will be interesting to see what they do we were talking, new $350 million in a first close round of funding, what they would do to build on to their existing business model. we'll stay tuned. up next, netflix out with a

colorful way to announce the latest series. and the president visit nike to promote the trade agenda. nike's ceo mark parker first on cnbc tomorrow morning. ♪ ♪

we heard it last week, netflix will air a new show based on the dr. seuss book "green eggs and ham." now the press release captures the spirit of the book pretty well it goes like this issued from netflix headquarters, delivered to all reporters, we'd love to share some happy news, based on the rhymes of dr. seuss, green eggs and ham will become a show and you're among the first to know. can you stream it on the phone. you can stream it on your own, you can stream it on tv. the show produced by ellen degeneres will take three years

to make and come out in 2018. why would it take so long to make? >> animation. >> it's clearly built on the cat on the hat. who knows a lot about that. there's the fox, clearly you can't forget about the guy on the train, i mean -- so much character depth they can plum here. >> the suspense in the plot -- >> will he or won't he. >> thing one and thing two. >> simon hobbs as we counten down to the close in the uk and across europe. we're seeing a little bounce back in germany. >> we're back up above the flat line for europe. it was really heavy losses earlier today. after two days of selling basically the opener we've had here on wall street seems to have calmed things down a bit. you've seen the selling of bait on the european bond market. so the prices are beginning to go slightly higher, the yields are falling back if you look at the euro, we've had a strong euro over the past month. you can see again just beginning to dip back this is important for european equity markets, because foreigners that are

going into europe to buy equities on the basis that qew and they're cheap are shorting the euro in order to hedge the positions, if the euro is rising that causes dysfunction within some of the trades. but for the most, that's over. importantly, apt sns coming front and center again. today in greece the government spokesman said that the greece would not cross red lines on labor and pension reforms. but the game is not here. the game appears to be at the moment mario draghi operating behind the scenes at the ecb. reportedly threatening not to raise the emergency funning to the greek banks unless there is adequate progress shown at monday's euro group meeting. he really has the greek banks on a very tight rein. that's a real threat. it's also said that the greek prime minister is bending on social security, as a result of a meeting with draghi and the deputy prime minister on wednesday. more immediately in the united kingdom, polling is open and more or less completed on the

general election. the outlook of which has an awful lot of people guessing as to exactly what might happen and what the implications could be moving forward. i guess since opinion is so divided, there's a possibility of a rally say on sterling if there was a certain outcome. the exit polls released at 5:00 p.m. new york time. >> simon, thanks. as long as the close happens in europe, dow session highs up 85. when we come back alibaba having a pretty nice gain. in fact the best day since opening day. as earnings and revenue top estimates? we'll talk to former ceo of yahoo, when we come back. the secure cloud services that store her genetic data the servers and software on a mission to find the perfect match. and the mom who gets to hear

her daughter's heart beat once again. we're helping organizations transform the way they work so they can transform the lives of the people they serve. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry, but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today. ♪ 800,000 hours of supercomputing time, 3 million lines of code, 40,000 sets of eyes, or a million sleepless nights. whether it's building the world's most advanced satellite, the space station, or the next leap in unmanned systems. at boeing, one thing never changes.

our passion to make it real. ♪ there is an ancient rhythm... [♪] that flows through all things... through rocky spires... [♪] and ocean's swell... [♪] the endless... stillness of green... [♪] and in the restless depths of human hearts... [♪] the voice of the wild within.

good morning, everyone, i'm sue herera and here'sor cnbc news update. a federal appeals court ruling that the national security agency's controversial phone records collection program was not authorized by congress. it says a lower court erred in ruling that the collection by the nsa was legal. italian police say an operation conducted with the fbi targeted a major drug trafficking ring, based in a restaurant pizzaria in new york city. at least 15 suspects were detained. investigators say the crackdown further demonstrates an organized crime syndicate in southern italy has forged strong ties with u.s.-based criminals. iran releasing the marshall islands flag ship and crew it seized last month in the straits

of hormuz, in response, the u.s. had sent military vessels to the region. iranian authorities say that the ship was seized under a court order involving a year's old debt dispute. and rome's airport is gradually reopening after a fire in its international terminal shut it down overnight. the flames that you see there captured on a cell phone video. it took about seven hours to bring the fire under control. authorities say the likely cause is an electrical short circuit. luckily, no injuries reported. that's your cnbc news update at this hour. let's get back to "squawk alley." let's get back to alibaba this morning, shares gaining more than 7% today. the chinese online retailer beat estimates and announced that ceo daniel zhang will become ceo as of this sunday. he joined us this morning on "squawk on the street," talking about growth and chinese demand for its platform. >> from our platform we can observe that the consumer demand

is huge and today the new trend is that people like high-quality foreign products from other countries. so that's why we're start our cross-border initiative one year ago and we will help the suppliers all the over the world to sell their products through our platform to chinese consumers. >> joining us this morning to talk about it, dan rosenzweig, the former yahoo chief operating officer. now of course of cheg, reporting earnings, that stock up 11% to date. >> a great day to be on. nice that people are finally seeing the transition. >> you said this was coming. what's working, what's wokkor working with you at chegg. >> it's clear given how poorly students are performing at college. having a site and business that focuses on their needs rather than institutions is the way to go we have 50% of college kids in the network. the transformation to pure digital now gives us a chance owe a pro forma basis to show the actual growth rates of the company, 34% year over year.

our traditional digital business grew 89% year over year. our prescription business which only has three businesses in it so far, grew 54% year over year. so everything is working right now. >> why does your stock pop so much after earnings? last quarter it was up to 30%. i know it hasn't always. but do you think that this the street is being, is being pretty conservative in the way that they're expecting chegg to grow and pursue the digital strategy? >> i think we have not done the job communicating it the way we need to in the last year. and we're beginning to the last six months. the transition from print textbook rent certificate now done. that deal is signed, the agreement is in place, we're executinging inas if the deal already been completed. pro forma growth at 34%. it used to be 14%. higher growth, higher margins, higher free cash flow. i'm beginning to think the analysts are focusing on what the company is becoming. as opposed to what it was when we took it public a year and a

half ago. >> your stock almost back to levels of january last year. as for alibaba, they're close to level these were in january of this year. how much of that is deserved today? how much worry did they put aside, given the quarter? >> the business performs extraordinarily well. >> there's a cultural misunderstanding of how a chinese company acts versus how a u.s. company acts. they said no new hiring, that means no new net ads. their growth rates were extraordinary. so i think you know we just have to get used to what it's like to have a company that big, in a volatile industry, communicating to us. >> how do we interpret this management movement. should we expect a new ceo every couple of years? as soon as he hits 40, he's out? get a 25-year-old kid? it was kind of a weird announcement. not sure whether this was cover for something that they were unhappy with with the previous

ceo or if they're genuinely excited about having somebody under 40. >> under 45. >> that's what i mean about culturally. you could never make that announcement, that you're not hiring somebody born before 1970. so let's put that aside for a minute. look, it's a rare when a company goes public and then the ceo is gone in less than a year. so there must have been some determination made that where they wanted the company to go in the future, they thought daniel was better prepared to do it. i don't think it has anything to do with age. >> for chinese companies, the most powerful position is that the of executive and executive vice chairman. which jack ma still occupies. even though the ceo is an important role, that's a distinction that u.s. executivings don't think of right away. i wonder what happens in september. a big lock-up happens, part of that is yahoo. they're note going to be sellers right away. but they will be spinning off the stake into stand-alone

entity. does anything change for the company? they've said it doesn't. but does anything really change? >> i don't think anything changes in the way the company executes or the company performs. i think it will be a flooded market of more equity on what was already a very big offering. when they went public, one of the big fears was there were going to be so many sellers at the offering. but that will clear itself out and the company will be valued on how well it performs. at the end of the day, that's what it comes down to. think if you're going to trade it, it's a very worrisome time. >> are we in a period of digestion. we have alibaba saying they need to be efficient. kind of no net ads, we see twitter saying we're going to be efficient about the way we monetize twitter, even if it leads to short-term problems. is there something broader going on in tech. where companies say we need to slow down and digest what we've put together here. >> high-growth companies are not easy to run. everybody says join a rocketship, it's easier than

joining a turn-around like we had to do. maybe there's truth to that. but i do think when you're growing a high-growth company that you have to take moments to digest. now the fact that many of them are doing it at the same time, particularly ad businesses, forget alibaba, you see it with yelp and twitter in the u.s. you could start to ask some questions. something going on with the growth rates in the ads business, that may just be the case. and i think companies are preparing for the storm. they may not know yet. my sense of the advertising business is, something i experienced in 2005 and '6 at yahoo. which you suddenly don't have the pipeline had you before. and i think twitter said some of those things on the call. things they saw in april, they weren't seeing in may. it can happen that fast in that business. >> we'll find out more next week, a lot of networks have their up-fronts here in new york. good to see you. >> great to be here and thanks for continuing to cover chegg. google's headquarters are in mountainview, california, but the company is not happy with its hometown this morning.

but first, rick santelli, what are you watching today? >> what everybody's watching, john, interest rates. how they all march pretty much the same in the wee hours of the morning. what will it mean for tomorrow's employment report? we're going to talk about it after the break. ♪ ♪ at chase, we celebrate small businesses every day through programs like mission main street grants. last years' grant recipients are achieving amazing things. carving a name for myself and creating local jobs.

creating more programs for these little bookworms. bringing a taste of louisiana to the world. at chase, we're proud to support our grant recipients, and small businesses like yours. so you can take the next big step.

so if you get a trade idea about, say, organic food stocks, schwab can help. with a trading specialist just a tap away. what's on your mind, lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move, wherever you are. and start working on your next big idea. ♪ coming up, rate risk in capitals, tom rickets on the impact of rising rates, to your portfolio. an exclusive interview. plus exclusive with colony capital ceo, tom barrick, he

weighs in on the markets and move advice. he's also the ceo of miramax films. and the real rob lowe gives us his take. straight ahead on the halftime show. guys, we'll see you in just a bit. >> all right. google's plans to expand in mountainview may now be in jeopardy. josh lipton has the story. josh? >> john, google is the biggest tenant in the city of mountain view, california. but the city council there just decided google was big enough. the city council voted to grant linkedin the majority of commercial real estate space. that left google with only enough space to build one section of its four-part futuristic campus. a plan remember, it unveiled in february. at the city council meeting david radcliffe, google's vp of real estate, did not sound

happy. >> i'm looking at the potential of getting nothing out of this process. which i could have gamed it, had i known the criteria, to get 100% of it. this is just such an unfair process and i'm very, very concerned at the city's moving forward with it. >> so why did the city reject google's request for more space? well one of the key issues was the need for greater business diversity in mountainview. google currently controls 12.9 million square feet of office space in that community. that is nearly 70% of the total according to jones lang lasalle, a real estate services company. as for linkedin. just one million. google may have options in mountain view, but it will have to wait. the city likely won't have updates about new available square footage until january or february of next year. according to city planner marketing al kurie and city

councilman lenny siegel tells c new brunswi cbs, google is looking to create a world-class campus, they may have to come up with another plan to make that happen. carl, back to you. >> thank you, josh. you got some thoughts on this, don't you, john? >> i do. i kind of saw this coming because google took a tack very different from apple. when apple wanted a new headquarters, steve jobs went to the city council meeting, made hits plea up front. google doesn't have the same warm and fuzzy feeling for mountain view that apple has from cupertino. they feed their employees on campus, they give all of these services, they don't help small businesses around google as much. also a lot of residents of mountain view are afraid of google creating a lot of residential in mountain view. creating a voting bloc so they get everything they want. mountain view doesn't love google altogether. that's what this is about. >> hard to charm mountain view and the eu at the same time, apparently. let's get to the cme group this

morning, rick santelli, the santelli exchange, hey, rick. >> you know here's what i find fascinating. tomorrow we have the employment report for april. expectations are right around 230,000. kind of deja vu, because if you go back a couple of employment numbers ago, we were also expecting 295, or excuse me, 230,000. but on that march 6, that friday, we ended up with 295,000. granted that was revised down to 264. the point is that for tomorrow, we really need to know where we've come from and discuss some of the previous santelli exchange. some worked pretty well. we talked about how we were in the very compressed range for 29 sessions between the closing yield of 186 and 199. we talked that it's just that easy sometimes that the minute you close, 2% or higher meaning outside the 199, you have to look for higher rates. well the first time you did that was the 28th. you look at the settlements, indeed, it wasn't that difficult of a trade so that was tuesday.

last tuesday. we've got 204, 203, 211.14, 219, which happens to have been tied to the aforementioned report. >> the 224 was the high yield close of the year on march 6, that's where we settled. if i look at the board, we've died on the vine at 221. even though in the wee hours of the morning at 5:15 a.m., we spiked all the way up to 231. granted, that outside of our time zone we don't have the same liquidity and that's questionable even in our time zone. that that spiked. so you could kind of see where i'm going with this. until we settle above 224, and this gets a little dicey, sometimes it's a little finessed, because unfortunately you're probably going to get a digital move tomorrow if we get a strong number. so you might have to try to fudge it as to where you think it will settle. but the point is simple -- if we get another strong number tomorrow, there's a lot of

thinness, you could see a quick test of the 240 level. you could see a quick test of something close to 260. now, maybe this sounds too aggressive. but i think that the market is still coiled a bit. if we don't settle above 224, we get a soft number. the issue is how symmetric or asymmetric the response is going to be. my contention is a stronger number tomorrow will elicit a much larger sell-off, i'm not saying it's going to last long. than a softer number in terms of the buys pushing the yields down. kayla? back to you. >> always tough to know whether good news is good news these days. rick sathlei in chicago, thanks. up next, is bitcoin being legitimized? the they'll join us live in just a moment. you can call me shallow...

but, i have a wandering eye. i mean, come on. national gives me the control to choose any car in the aisle i want. i could choose you... or i could choose her if i like her more. and i do. oh, the silent treatment. real mature. so you wanna get out of here? go national. go like a pro.

just because i'm away from my desk doesn't mean i'm not working. comcast business understands that. their wifi isn't just fast near the router. it's fast in the break room. fast in the conference room. fast in tom's office. fast in other tom's office. fast in the foyer [pronounced foy-yer] or is it foyer [pronounced foy-yay]? fast in the hallway. i feel like i've been here before. switch now and get the fastest wifi everywhere. comcast business. built for business.

new york has issued the first charter to global bitcoin exchange itbit. it will make itbit the only regulated exchange open to u.s. customers, after a series of recent problems for the currency, is now the right time to bet on bitcoin? chad gascarillo is the ceo of itbit and is here to talk with us. talk about the process of getting the bitcoin license working with the department of financial services. how did that play out? >> they've been great partners with us. loskey and his staff have been at the forefront of bitcoin regulation, we're happy to be the first one to announce being

a regulated exchange. being a trust company in the state of new york. and so i think this is a big day for us. it's clearly big day for the whole bitcoin industry and it moves us to a standard of care and an ability to operate with customers that's totally different from where anyone currently is in the industry. >> explain to viewers what the charter does for your business and what type of business or perhaps insurance for accounts, it would enable, that you didn't have before? >> sure. so we're now able to operate in all 50 u.s. states. so as a regulated entity so this is a big deal. we're the first regulated entity in the whole world, certainly the first one as an exchange that's regulated. that's different, we hold regulatory capital. we have regulatory exams, we're organized under new york banking law. that's a big deal. we're not a bank. we're not making car loans. but we are having this duty of care to our customers, we're acting as a custodian. so someone deposits funds with us, we're sitting here, operating with a custodial relationship with them. that's really important and is definitely different.

and it gives people a lot of comfort and safety. >> i was going to ask whether you have auditors in house down the hall if they come in once a quarter, who is do that work? >> you have regulatory exams regularly and outside auditors, internal auditors, a whole variety of oversight. and we have aen independent board, we have a majority independent board, sheila baer, chairwoman of the fdic, bill bradley, the senator from new jersey and bob hertz, the former chairman of fasby. >> the charter and the government regulation of itbit being the factor of legitimacy. these new board members are quite a vote of confidence, to have sheila baer, the former member of the senate finance committee and an executive at fasby, the leading accounting principles board how do you sell them and what is in it for them? >> we're excited to have them on board. it's great to have a charter

trust company and it's also important to have people who are willing to come on the board and make a commitment to what we're building and to what virtual currency represents. and so i think the possibility that virtual currency can very much change financial services on a foundational basis is what attracted them to come on board. and certainly also our commitment to compliance, to regulation, to being trustworthy, to putting our customers first and the way we've approached the concept of asking for permission, not asking for forgiveness, in the bitcoin world has been novel and i think all of those things led to them being comfortable with us. >> to put a point on this, if i'm a viewer at home that sees the price of bitcoin going down, that saw the mount gox debacle unfold, why do i care about this? >> any transformative technology still starts out in early daze, when you're in the early phase, there's always going to be growing pains. it doesn't make it okay, but it's to put it in perspective.

whether it's mtgox or other issues that have come up, it's a growing technology, you had it in cell phones, internet, social media you had it in a variety of places. we're trying to represent a different standard and a different way of providing comfort and doing it in a way that's recognizable and regulated and so therefore, the rest of the financial infrastructure and financial services industry can feel comfortable in dealing with bitcoin and dealing with virtual currencies. >> this is not the last we're going to see of you, come back soon. when we come back, harry potter getting a new name at universal theme parks. details in a minute.

move over, harry potter, here comes mario. nintendo teaming with universal to bring characters like mario, luigi, donkey kong to its theme parks, everything from rides to appearances in the parks. no word if there's plans for a zelda-themed restaurant. mario cart is obvious. >> watch out for the mushrooms sliding around. >> get all the pennies you can. i think nintendo had their best operating profit in years,

talking about a brand that's stood the test of time. >> getting into mobile, good times ahead. >> we'll see if the best times are ahead for the market. the dow up 68, europe closed, what an amazing morning it's been for the german bund and interest rates around the world. let's get to wopner and headquarters for the half. ♪ ♪ welcome to the halftime show, let's meet our starting lineup. joe terranova sheer, along with jon and pete najarian and tom berrick is here, the ceo of colony capital and happens to be chairman of miramax. josh brown is out on the west coast in san francisco today at our bureau at one market street. our game plan today, looks like this -- rate risk -- how high will yields go? in capitals, tom ricketts waear in. plus -- >> i