good morning, it's 8:00 ampl at sis corps headquarters in san jose, california. and 11:00 a.m. on wall street, "squawk alley" is live. -- cisco headquarters. ♪ ♪

welcome to "squawk alley" for a thursday, joining us henry blodgett, the founder, editor and ceo of "business insider." kayla is out working hard. with us as always, john ford at post 9. henry we'll talk in a moment. but first a quick check of the markets. the dow holding on to a nice gain, up 154 points, a lot of it on the strength of big multinationals as the dollar is at a four-month low. we'll talk about it as we get going. in the meantime, we want to update you on a headline we brought you, we have live pictures of another train derailment. this one outside of pittsburgh, about ten cars on a substantially long train, a freight train in this case. according to our local affiliate, the cars are empty, no injuries have been reported. it comes just on the same week as amtrak drain 188 killed seven people, 200 plus injured, just a

tragic case. and will feed no doubt the argument about rail infrastructure in this country. guys. parenthetically. kansas city southern does cancel their guidance on volume and revenue for 2015 as the rails henry deal with safety issues, they deal with fourex issues. >> with respect to amtrak, you have to come back to the discussions about infrastructure spending and rail and the future going forward. we do need to spend more on infrastructure. >> infrastructure isn't just the track itself. it also has to do with the systems that regulate speed. lots of tech companies are interested in getting sensors and getting software into this when they talk about the internet of everything. this is part of what they're talking about. >> speak of which, let's mock to stofs. cisco shares responding after profit and sales beat expectations, revenue coming in at $12.1 billion.

up 12% year on year and the ceo had a lot of good things to say when he talked to cramer last night. >> our company is in the most competitive position ever. we've moved from selling from selling boxes to outcomes. you're digitizing every company. you change and disrupt or get left behind. cisco is the lead player. you saw it in our quarter. in the balance that our public sector business around the world was up 6% to 7%. so was our commercial, so was our enterprise. so series provider a little weak, but you'll see us change that over the next couple of quarters. >> kram they are morning said chambers took the gloves off this time for this final run saying don't believe the rumors, only real pick-up in the quarter was china strength. asia-pacific up 1. >> there were a few challenge areas, russia was also down 41%. so the bricks overall were having trouble. though mexico and india were relatively strong for them.

i think they were helped by the public sector, what's not clear yet is what the full effect of these megacloud providers, your facebook, microsoft, google on down, who have the influence to create their own networking environment. what their influence is going to be longer-term. there's a question, do they go with white box networking providers. who don't have the same kind of technology that cisco does? or does cisco sort of adapt and work with those white box makers, the way intel has pretty successfully up to this point in the data center? and they seem to be doing that. they seem to be adapting. but the game is not over yet. >> from a business perspective, the big challenge they have is they're a cheaper solutions out there. they're trying to maintain pricing, profits, growth. the big challenges is growth. company had a great quarter. up 5%. next quarter, 3%. okay? that is very stayed growth. congratulations to john chambers, it's been a great run,

he's been a rock in the industry for 20 years. but the stock has been flat for ten years. effectively. and they're in a good position to consolidate the industry. the enterprise industry is in desperate need of consolidation and there's strong cash flow, they can do that. but in terms of organic revenue growth, they're going to continue to face challenges. >> possibly the best number in the report was the 62.5% gross margin. when they had guided to 61 to 62%. that showed they had some pricing strength, some pricing discipline in its environment when others that we were talking about a year or two ago were supposed to be pushing prices down. >> we had some people on the show say the new chapter has got to be more consumer make cisco a little bit flashier. we posed it to chambers a couple of weeks ago. he said we've been burned on that before. >> they have been. that shows maturity. they have in fact made some big consumer bets that have flopped completely. to zero. and the enterprise market is massive and there are lots of smaller, weaker players out

there. as chambers has made this point himself. it's got to consolidate. and if you look at in the enterprise software market, one of the companies that is doing well by consolidating is oracle. you take over all of your competitors, you cut out a lot of costs and you continue to grow from there. they had the opportunity to do that. >> cisco and oracle have a couple of the best track records at m&a in tech and yeah, they really flopped on consumer a while back when they had the flip digital cameras they were supposed to be coming out with. microsoft also backing away from consumer to a degree. where i think we're not trying to grow that as a profitable business. they're looking at it strategically it seems as more of a gateway into businesses. they're not trying to monetize the consumer. it's they're trying to use it as kind of the premium gateway into a bigger enterprise business. >> so maybe another zoom in their future, would you guess. >> you got to hope not. they are doing hardware. we had them in with the surface 3, but doing it as a way do get

a bigger business by and put the cloud first. >> next up, getting more details about apple's new beats-based music streaming service, it will be called apple music. the service will reportedly let artists have their own pages to post things like videos and track samples. artists will be able to share the content of other artists for cross-promotion. we've been wondering when this was going to show itself. almost a year after the deal. >> yellow flag waving for me. this is an area that apple tends not to be so good at. especially the first time out when you're getting social, when you get into itunes. itunes i think is already kind of a mess, if you try to use it on ios versus the mac version, it's like there are parts bundled into the desk top that aren't on mac. if you're in the music app which is different from itunes, managing the music in ios. you've got rdio in there, and now they're going to add the artist tools, is it every artist that will have the ability to do

this. or top-tier artists? are they going to have an app. be mobile-first about it? i think apple has got to be careful with this of course, apple knows this. but i think this is when you got to be skeptical on their ability to pull it off. time and time again. they've gotten it wrong the first time out. >> john is a wise man. >> agreed. >> they're going to sell a lot. they've got 800 million credit cards, phones all over the world. they'll sell a bunch of subscriptions, spotify owns this right now collectively, especially among millennials, play lists are very sticky. this is going to be tough for them. agreed. and they have had a lot of problems on the software side and service side. >> the more important thing is sales, a lot of it at ubs ups the forecast for the june quarter to $51 million. street is at $45 million. are we done worrying about the psych snl. >> i don't think we're done. apple still is the iphone company. everybody is talking about what's next. what is driving this company, is this -- and this is an

incredible product. and i have to say, before everybody starts yelling at me. always negative on apple. let me confess, this has done better than i thought and the other thing that apple is now doing is beating back android. it's clear that a lot of folks around the world have tried android and they're switching to apple. i didn't expect that. i thought the power of the android platform, the ubiquity over time would ultimately make it an incredible advantage just wait microsoft did with computers way back. and that is not happening. in fact the reverse is happening. so i don't think we should ignore the cycle. but i think this switching phenomenon is going do extend this cycle more than i would have thought. >> the cycle is strung, we were halfway through it. the momentum last quarter was pretty strong, their guidance was pretty strong. which suggests they have confidence in what they're seeing. the apple watch, is going to make their ecosystem even stronger. we have the carriers in the u.s. that have the next programs, they get people to upgrade more quickly.

that's strong for apple, too. so lots of goods this is the stuff they tend to get right and it's stuff that makes a lot of money. >> and they just nailed it on the 6. they have nailed it. >> and the stock by the way, up almost 2% obviously on the big market cap. back to 128 and change. that's going to be interesting to watch. good to see you as always. thank you very much. henry blodgett joining us today at post 9. when we come back the world's biggest smartphone chip maker making a big bet on the internet of everything. the president of qualcomm will join us for the first-ever television interview. and music streaming site rdio, with a plan costing $3.99 a month. and then walmart taking a major shot at amazon this morning, details on this new invite-only service when "squawk alley" continues in a moment. [ male announcer ] your love for trading never stops.

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that's a clip from qualcomm's new branding campaign. using the pitch to humanize intelligent technology capitalize on the internet of everything. internet of things. shares of qualcomm up slightly this morning. though they've been down and then up again this year. as investors have digested the troubles that the company had in china. and also, the overall dynamics in the smartphone market with apple and samsung. joining us exclusively qualcomm president derek aberle. the internet of things, is something that we're hearing more and more about, derek. john chambers was talking about ton the cisco call last night. but what does it really mean? and probably more important -- where's the value going to be? who is going to really make money off of it? is it in semiconductors? is it in software? is it in services? where are you investing to grow your ip, mainly? >> yeah, first of all, thanks very much for having me. this is actually the internet of

everything is a huge opportunity. think there are a lot of different perspectives, different companies approach it in different ways. we think there's value to be had across the whole ecosystem. we've been working in this area for a quite a long time. very excited about it. already have more than $1 billion in revenue last year coming from internet of everything solutions. in both silicon as well as platforms. our areas where we're heavily investing in. >> derek, is the space going to be as big as smartphones were? because smartphones, sure there are a lot of opportunities. but qualcomm did a whole lot better for instance than intel has done. so what are the key technologies you think in the internet of everything that are going to make the difference between qualcomm-sized returns on this development and technology versus the intel-sized returns on mobile? >> yeah. if you step back and look at it. obviously the smartphone market is a very large market and we've been quite successful there. the projections for the internet of everything space are even larger in terms of units.

there's projections that in 20019, they will be over five billion new connected devices shipped. we're making large investments and really the think, the reason we think we can win here is because we've made large investments in technologies for smartphones. and it's really those technologies, connectivity and computing for low-power that are going to be the solutions that drive the internet of everything. >> derek, in the structure of qualcomm you've got the semiconductor business, the licensing business, there's some activist who is are pushing for some sort of separation between the two. is there a strategic reason in attacking the internet of everything opportunity why these two things need to be together? >> well, i think independent of the internet of everything is we look at the business, this is you know something that we've considered a couple of times over the history of the company and actually look at periodically. and as of now, as we look at it. we think there's a lot of synergy between the two businesses and the best path for

now is to keep them together. >> for those who have no idea what the internet of things means, how do you convince them that it means more than just your light bulb? >> yeah, think as you see people starting to adopt technology into the internet of everything, one of the things that we see happening is we have this vision of everything being connected around you. and as more and more things become connected, people start realizing that this actually much more useful if they're also smarter. so that draws through things like computing and graphics, the next thing you want is a display on the device. if you think about the fitness devices, the fitness trackers, they started with no displays, then they moved to kind of a low-resolution display and now they've got much higher-resolution displays that require higher computing power. that's the type of progression we're seeing across a lot of different segments, includes things like appliances and consumer electronics. >> the fitness thing people are going to get their heads around. it's going to take some work for people to say i want to have

this as part of my house. >> well, i don't know, we're actually, we see it a little bit differently. as you start connecting the home, home automation has been around for a long time. but there have been barriers to entry. and those are the things that we're working hard to solve with things like the alliance where we can drive both discoverability and interoperability. i think adoption will go from there. >> derek, finally, before we run out of time, do you see any shift in the smartphone market, the strength in apple and samsung that you talked about, that was squeezing you a bit and the partners that you work with that use more of your wholistic chip solution? any sense that those folks are moving up their launches for phones and the picture is going to change? >> well listen, the smartphone market has always been a very competitive market and we have the fortune of having a broad footprint across it. the good thing from an end-market dynamic, we're seeing

a lot of strength in the premium tier. apple, samsung, but many others, you'll see products starting to launch from companies like lg, sony, and also a growing number of companies and partners that are working closely with in china to grow their export businesses abroad. so i do think they'll continue to be healthy competition in the smartphone market over the long-term. >> all right, the underdogs certainly hope so. derek aberle, president of qualcomm, first broadcast interview, thanks so much for joining us. >> thank you for having me. coming up, does the future of news lie in social media? we'll ask one of the top vcs deeply involved in social. the pursuit of healthier.ut) it begins from the second we're born. after all, healthier doesn't happen all by itself.

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publishers to host their news content directly within the social network. yesterday, on this program, the co-founder of twitter, biz stone, told us about opportunities in social. take a listen to this. >> there's still so much innovation left in social communication. there's so much more to be seen ahead of us. in the grand scheme of things, social networking, social applications -- they're really not that old. it's 15 years, maybe since the first social network. and so we really have a long way to go to bring more nuance, more emotion, more of the empathy you feel when you're talking to somebody live into our digital lives. >> what does that say about the future of social? john shellman is a partner at gray log partners invests in social networks, including biz stone's social app. he talked about it yesterday in a tweet storm. i assume you're going to agree

somewhat with biz, that social is still in its infancy. and we don't quite understand its capabilities yet? >> oh yeah, i think we're, at this moment in time we're over one billion people have computers in their pockets and can talk to anybody with pictures, video, texts and more and we're just starting to untap what that can actually mean to express ourselves, to one person or a whole bunch of people all at once. >> how does instant articles fit in that narrative, in your view? >> well i think instant articles tells us a story that the apps we're using on our phone need to get faster and more immersive, to bring the experience of the media we're used to on the web to our phones. any need to push the edges much better than the web is able to today. >> you're starting to touch on something that i want to delve into something a little bit more. instant articles, great from a

user's perspective. no argument there, like from dial-up to cable broadband when it comes to content on facebook. but is this good for the web? is it good for the innovation ecosystem, when facebook now has so much influence over how content gets consumed and presumably, over how innovation gets applied to that content? >> you know, the short answer is i really hope so. you know, if we think about what the web was in 1995 or 1996, it was these clients like america online that provided a better experience. and then a bunch of innovators came up with some standards around the open web that made that faster and better for everybody. and i wonder that if in mobile, we're just getting a little bit caught up in sort of these old technologies haven't totally migrated. facebook with their massive penetration will push the limits, but it's not going to be the place where we're all going to want to read and consume all the great content. i hope this spurs innovation for the platform vendors and everybody else to really produce an experience that's as good, as

fast and feels as native and as exciting and then we'll all be able to publish there in a better way. >> do you think that verizon's move this week is a, is that a welcome new addition? a new entrant that can help, if not threaten facebook's dominance, at least scare them a little bit? >> you know i'm not sure that it scares facebook's dominance. i think facebook is always going to be really good at what it does, let people talk and connect with their friends. everybody is talking about verizon purchasing aol as an ad tech company. think it would be amazing if they looked at the content properties that aol has and thinks about the instant article initiative. how do we reinvent media using the fact that we are this massive mobile pipe. maybe they can help push the standards forward in the same way. >> and josh, that's another question i've got about this impact that we're seeing accelerating the programmatic advertising across the content landscape. facebook seems to have better data than everybody else. so they're able presumably to get more of a premium on

advertising, which is going to feed into this instant article thing. why not let facebook sell the ads for you, if they're able to get more of a premium? does that affect the way you value a content company that comes to you and says, hey, we've got a great idea for the next "new york times" and we want you to fund it? >> you know that's a great question. think when we looking at content in media properties, really look for two things. one is what you can know about the user and the way that facebook knows your demographics, knows where you live, et cetera. we also look at what the intent of why you're coming to the content property is you know i still think twitter has massive upside in advertising because people come to twitter to find out what's happening in the world and ads fit into that experience so well. which is different than coming to an experience to find out what your friends are saying, or where ads feel a little bit more jarring or incongruous. i think that intent of why you're reading the property is sort of underrated, not just what you can know about the person. >> yeah. that's a good point. certainly one that twitter is trying to make again and again.

josh, good to have you, please come back. >> thanks for having me, it's great. >> josh elman joining us from greylock in san francisco. switching gears, let's bring in simon hobbs as we count down to the close in europe. >> what an astounding turn-around for europe. currently up almost in germany up 2% and gaining as you can see. we were down at the beginning of the european session, we've moved substantially into positive territory. basically because the bond trade has turned around. bonds were down and they're gaining as a result of what what's happening with treasuries here. equities, trades we thought we had, the equity market is kind of caught up in the middle of what's happening with currencies and bonds at the market. let's have a look at where we are in spain. there you can see the way in which the 30-year has risen recently from just above 2%, 2.10, to the current almost 3%. big moves there. the yields actually down there. as is the 10-year at the moment.

the euro, is central if you're in europe, worried about earnings, or buying because the euro is cheap, and that will boost earnings, bear in mind coming into today's session, the euro over the last five weeks or so was up 7%. we have eroded that today, again as the trades switch round. importantly, mario draghi is speaking at the imf in washington. he has just said that qe will, will remain in europe until at least the end of september of next year. in any case, he says unless there is a sustained adjustment in the path of inflation, that caveat has always been there. but it's a big caveat, if the price of oil is going to turn around. meanwhile, let me take you to athens, where earlier, the greek finance minister went there again. he says the idea that mario draghi would actually soften the loans to greece for the ecb, fills draghi's soul with fear. and in fact, the reason that it fills his soul with fear is because the germans are so angry

about qe, there's no way that they would go there. but that of course is precisely what the imf is asking the rest of europe to do. in the meantime, good news from greece, the spokesman says they're now looking at a special emergency euro group meeting next thursday or friday. so it may be a, that they can get a deal by thursday or friday, and also the social may have enough money to last until next thursday or friday. up next, we told you about apple's music plans at the top of the hour. today, music streaming side rdio, not to be outdone, announcing its new plan that costs $3.99 per month. account company make money at that price? the ceo joins us in a moment. can it make a dentist appointment when my teeth are ready? ♪

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what makes it an suv is what you can get into it. ♪ [container door closing] what makes it an nx is what you can get out of it. ♪ introducing the first-ever lexus nx turbo and hybrid. once you go beyond utility, there's no going back. good morning, i'm sue herera an here's your cnbc news update. the lawyer for the engineer who was at the controls when an amtrak train crashed in philadelphia says his client has no recollection of the crash that killed seven people. attorney robert gaugins tell abc news brandon bostian remembers trying to reduce speed as the train entered a curve before he was knocked out. bostian suffered a concussion, and has 14 staples in his head. police in ireland are holding six men for questioning

in connection with a terrorism investigation after the seizure of pipe bombs, they say the six have dissident republican links. prince charles is due to visit ireland next week. japan's cabinet endorsed a set of defense bills allowing the country's to go beyond its self-defense stance and play a greater role internationally. the plan has split public opinion. have you ever wondered what goes on at nato meet sngs how about the foreign ministers locking arms and singing along to "we are the world?" listen in. ♪ we are the world ♪ we are the children ♪ we are the ones who make a brighter day ♪ ♪ so let's start giving >> no word on whether they're going to go on tour. and that's your cnbc news update for this hour, back to "squawk alley" now.

they might be the world, carl, but they're not the children. >> that's right. while some music streaming services like title and beatz are going upscale, rdio is taking it in another direction. they're announcing a brand new subscription tier at just $3.99 a month. undercutting spotify and pandora. joining us is rdio's ceo. >> good to see you, thanks for having me. >> we say undercutting, that's a big discount. what do you get for $3.99? >> well, i think the first thing to do is to look at it from the consumer's point of view. as you gentlemen know, i used to work at amazon. jeff bezos preaches, you start with the customer and work backwards. the two biggest challenges i think we face are most people really don't understand streaming and subscription. number one. and number two historically, the

average that consumers spend on music annually, both on downloads from itunes or cds was somewhere between $42 and $50 a year. that's the price range for people in the sweet spot. and historically, as you know, music subscriptions have been priced only at $10. so we looked at this and said, how can we design something not take the $10 offer and try to reduce the price? that would be like taking business class and pricing it like coach. but how would you design coach if you were going to design that experience? and so, we looked at how we could hit that price point and what we could work with music labels to design and created a $3.99 price point which hits the sweet spot of what people spend and gives a great value. >> so with that, 25 songs -- i guess you could do, you could -- reload that every day? ad free? right? multiple playlists? >> yes, it's, yeah it's, it's a combination of streaming radio, so you, you have literally

pretty much what you have on pandora, but 20 times more music, we have 35 million more tracks in the library. as well as what you get on sirius, the part of sirius that's music and not talk. we have curated stations, program stations and then we have computer-generated stations, all of those are ad free and you can skip and unlimited time if you don't like a particular song, you keep skipping. that's the radio part. and then in addition, you as you said, you can download up to 25 songs a day, and keep 25 at a time. so you can have that 25, which doesn't go away. and then essentially up to 50 if you down load it new. and the goal is do look at how people normally discover music and download. you're listening to the radio, you hear a song and you want to download it, you can. >> or a new album comes out from a band that you really like, you can download that album. so you hear a song -- go ahead. >> it seems to me that the key here, though, is how much does the recording industry want to you succeed? it sounds like you agree with taylor swift about the danger in

giving away too much for free. but exactly how good a deal are they going to cut you on this $3.99 offering? is that going to allow you to be profitable in the long-term? how many sign-ups do you have to have for $3.99 to work and is the recording industry really behind you? >> we license everything direct from the recorded music industry. and publishers. so if they were not behind us completely, we wouldn't be able to do this. >> but, spotify, they sort of don't like it. do they really like this deal? >> yeah. the big issue you just mentioned it. the challenge that the industry is really wrestling with right now and the one that spotify is caught up with is free on demand. and we agree that free on, we agree with taylor swift, as we spoke about when i was on your show a few months ago that free on demand is frankly not good for the business and it sets the wrong toep. there's no reason for people to pay if they can hear free on demand. and so our free version is very

similar to as i said, a pandora-style internet radio experience. and what spotify has been pushing is on demand. and so we have a lot of support from the labels for a programmed music experience. as i said like radio. as well as what we're doing. so they're very committed long-term to having companies like us be successful. that's how the music industry survives. we don't have any taylor swift's music is still on rdio, we don't have the same contentions that other people are having. >> you got to come back in 60 days and let us know how adoption is going. >> it's 60 days free for people who try it select starting today. >> yes. anthony, good seeing you again. anthony bay joining us. when we come back, walmart taking a major shot at amazon with brand new invite-only program. details in a moment, but first, rick santelli, what are you watching today? >> i'm watching what's being dubbed on this trading floor as

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. coming up at the top of the hour, stocks are heating up. but don't get burned. and don't head to europe before you hear cnbc special fx report on currency moves, why a number of strategists are changing their tune on the euro. plus one of cnbc's disrupter

50 members joins us on the halftime report. we're getting news on avon products, ptg capital submitting an offer to buy at 18.75. kate rodgers has more. >> avon shares halted for volatility. were trading higher by 4.5%. ptg capital partners in a filing announcing that it has submitted a bid for avon at $18.75 a share. back over to you. >> yeah, stock was halted at $6.97. so obviously halted on volume. we'll wait for it to reopen. but john i'm going to back to a chart. i've got to open up a multi-year chart to see the last time it was anywhere near that level. halloween 2013. >> big drop from above $20 a share, down below it and it's been a steady slide since. i guess ptg seeing some value there. in avon. all made up perhaps that others don't see. >> obviously the struggles in

latin america, 4-x struggles, even stateside have been well documented, that's a massive premium for a stock that's had trouble for a long time. in case you missed it, walmart is going after amazon. the company testing a new unlimited shipping service this summer. that's going to cost $50 a year. below the $99 you pay for a year of amazon prime. unclear whether they're guaranteeing you'll get your goods in two days. the service sinvy tags only. unlike amazon it doesn't include movies or music or original content. at least not yet. but it sounds like they are willing to maybe bundle in some other things down the line. >> we talked with cramer this morning about prime has not seen a lot of resistance at $99. but maybe a walmart customer thinks it is pricey and that $50 is more reasonable. >> they've got to include mobile in this. i mean i'm a customer who shops through my smartphone all the time. the fact that amazon has easy

quick buying through prime, through a mobile device is key. walmart's got to do a lot more than have a program like this if they intend do chase down amazon. let's get over to rick santelli at the cme for the santelli exchange. >> there's been a lot of talk of late about the personality change if you will in the fixed income markets. i think it's not only a real dynamic, i think it's a dynamic that may be with us for a while. like everything in markets that aren't operating on supply/demand, price discovery. all the boring stuff that used to make our markets the best, deepest and most liquid in the world. since then things have gotten a bit strange is a. when you take a macro view. let's look at data. today ppi was on the cold side and of course we did get a little bit of a kick down in yields. but it was somewhat brief. we've seen retail sales that was especially weak and get a brief kick-down. but major u-turns on the latter,

the former is still the session today. but when it comes to inflation, disinflation, less inflation, deflation -- you know maybe i'm alone in this, but i don't think it's ever going to be a problem in the here and now like it was potentially in the '30s. take it another step. a lot of research now is being done, believe me, there was a lot of books written after the depression, there's going to be a lot of books written about this topic. most of the pricing pressure outside of commodities and commodity volatility in a world with no money velocity, is that these programs and policies by planners and central bankers have basically taken the pricing pressures and put them in financial assets. like stocks, like bonds, treasuries, corporates and the other part of the equation, you know we somewhat ignore gets lost in the shuffle. pricing pressures, ignore the 3.7% increase in rent and all that. the reason i say this is, if we move pricing pressures to the side and look what's left. i think atlanta fed, marked down

their second quarter gdp, the handicapped us now pretty much on a daily scenario. moved down from .8 to .7. a far cry from the type of bounce we saw in second and third quarter last year. in the macro sense, what we want to spay specific attention to clues as to when the personality shift ends or actually quite simple. i look at it as a pairing, like wine and steak. you want to keep an eye on 2.24, 2.25 intents, we've talked about it before on a late cash settlement basis. not intraday. and the second thing, is the chart you're looking at right now, difference between 10-year bund yields starting in september, i pick september because 1.50 seem to be home base, we got out to 1.90. if the market closes, coordinate with the 2.25 and we somewhat hover around 1.50 or maybe a little bit below -- look for the personality shift to potentially end. but after talking to david ader today, he's in the trenches with clients, this is hard to deal with. because it's so hard to explain.

fundamentals, well that relationship is on the back burner for now. john. back to you. >> all right. thanks, rick. wine and steak helped to explain it. i can understand that. home renovation start-up houzz launching a brand new video series, the first of which features actor ashton kutcher. check it out. >> renovation that we're going to be doing is on the place that i call home. it's a house that i helped build with my step-father in a little town called homestead, iowa. i'm ashton kutcher and this is my houzz. >> houzz number 11 on the cnbc disrupter 50 test.

welcome back, our next guest is on a quest to disrupt the home renovation and design industry. since they last joined us, they've grown their community by launching a video series, "my houzz" where they feature renovations. the first with actor ashton kutcher and his mom. adi tatarko is the ceo of houzz, number 11 on our cnbc disrupter top 50. i'm looking at your site. houzz tv. these are slick, well-produced videos, they're not cheap to create. you've got a kid's treehouse,

taking cover in a former nuclear missile silo. what is the value that adding this kind of content is going to bring to your business? >> so houzz was always listening to its community in terms of how do we empower people. and provide them with the right technology and the right content so they will be able to take care of their own homes. this is something we've been hearing from our community. 30 million people, for quite a while that they would love to bring the houzz community stories to life via video. so the houzz tv channel is helping us on that front. so we're excited to launch more. videos and inspiration to our community. >> ashton is an investor in houzz as well as a user of the community. obviously he's a high-profile guy. do you have a sense of how many new users his series has brought to houzz or the type of engagement it's driven from existing users? >> well obviously this is a very, very popular movie, as many other videos that we

produce, ashton is a very lovely guy. as well as he's family, but i think that what people really loved seeing is how empowered he was by using the technology. and the lovely family, he's so great and the mother, you know, i love them. they're really great. and i think many people love seeing that. anybody can be empowered like this yes, 30 million people and they love it. >> adi, what have you found as far as the things that spur people on, to actually participate more deeply in houzz? to stay on the site, to stay engaged? and what kind of a role is video playing in that versus static photos and images over the past few months? >> so is the beauty of houzz is that people come and they have everything under one roof from inspirational photos, to with all the data that is associated with them.

to great content and guides. through getting advice from the community and hiring professionals to help them and buyingal the products and materials. on the content side, video is a very complementary piece of our content that we feel users are so empowered when they watch this. it brings everything to life. all the pieces, all the technology that we created. people actually leveraged that and they love seeing it and they take actions after it so connecting to the rest of the content to the community and to the commerce is very meaningful when you bring it life in videos. >> and so adi, you see that and you see what facebook is doing with instant media it's not so much directly in your area, but social is a an important part of what you do. what do you think when you see facebook incorporating content into its site rather than linking out to other things?

>> so obviously facebook is doing what's right for their users or what they think is right for their users. and which is great. i'm here to comment about houzz, so i can say in that context for us, the user experience at houzz was always the most important thing for us. and how do we bring the best content from our community, and bring it to life and allow people to navigate through that content with, great tools and then take action. that was our number one priority when alan and i created this tool for ourselves and it keeps evolving when we get the feedback from the community. the video and the new piece of content that we added to houzz is very powerful as we see in the last few months and definitely with the new series, the "my ))eu-z" series that ashton cuche certificate the executive producer of the series is going to take it to the next level. >> adi, thank you so much. great to see you again, adi tatarko joining us from houzz, along with our julia boorstin out at one market. we want to take you over to post 8 and show you a picture of how

avon is trading, still halted. although the latest indication is right around 6.50 to 8.50. coming as people are trying to figure out exactly what this purported edgar filing reflecting an offer to buy the company means. if it's actually legitimate. kate rog certificates at hq, hey, kate. >> as you said, avon has been halted for a third time for volatility. cnbc we've been unable to verify the information in the s.e.c. filing on this apparent bid. there's a few issues, we're unable to reach ptg capital and the s.e.c. filing, still up by the way has typos in it. ptg appears to have a cell phone number listed on their contact. we also have calles if right now to avon and to the s.e.c. and we'll bring you information as we get it on this story, back to you. >> yeah, the filing seems to indicate that ptg, a firm with whom a lot of people are unfamiliar, is headquartered in london. our bob pasani is by post 8. what do you know? >> here's the important thing,

it's been halted three times in a volatility halt. i want to make a distinction between what that is and news pending. i spoken with the nyse, they have not heard from avon at all. nothing. so normally if a company has announced to make, they will halt it, news pending, and stock halts this is a volatility trading halt. take a look over here. it's happened three times already. volatility trading halt can happen independent of the company. it's simply these are the circuit breakers instituted after the flash crash. if the stock moves more than 5% in few-minute period and rolling average fryer that. under certain circumstances it can be halted. it's hit that now three separate times reerks opens and starts trading again. we're still waiting for it to reopen. we've got indications, but frankly all over the map right now. and it should open almost any minute. so i would estimate probably within the next two minutes it should open. i want to emphasize number one, the nyse tells me they have

heard nothing from the company. the stock has not halted because of anything the company has said. it has been halted because of the circuit breakers that were put in place around the flash crash after 2010. as soon as i get any more, carl, i'll get back to you. >> don't go too far, bob that explanation is is a good one. the distinction between why stocks are halted for news, as opposed to volatility. i will add in terms of color, i don't know if you agree with me, that the level of volume on the floor regarding this particular halt is greater than we've seen historically. would you agree? >> i'll tell you what's weird. three volatility trading halts in a row is very, very strange. because these rolling volatility halts, they allow you to trade within a certain band on a continuous period so they're designed to sort of avoid halting the stock. if it can. all of a sudden the volume was so titanic, the stock had to halt, started trading again, halted again. there's a lot of confusion around what exactly is happening here. i want to emphasize, we have no

information at all from this company. nor does the nyse, and i think that's adding to a little bit of confusion that's going on right now. >> and we mentioned volume. but also in terms of just volume sound. i mean these traders here have been loud for the past five or ten minutes. >> one more question for bob, i tend to think of things that i see on edgar as being legit. do you know how hard is it to get something into the s.e.c.'s edgar database, that might not be legitimate? >> i'm sorry, i didn't hear you, it's been very noisy down here. >> it was about edgar. i tend to think of things that i see under companies in edgar as being legitimate. how hard is it to game that system, do you know? >> edgar should be very legitimate. i'm not -- the, if somebody posted something that was not legitimate, in there, i think that would be a major issue, because i can tell you for sure, the trading community considers that kind of posting a completely reliable one and if it turns out not to be so, i think that would be a major

issue. >> kate rodgers has a little bit more before our time is up here. kate? >> hey, carl, avon did get back to cnbc, they declined to comment on the entire issue. we cannot even confirm that ptg capital is a real company. avon declining to confirm or comment on whether or not this is a hoax. and on the initial rather bid and offer. back to you guys. >> i think we have a reopen on avon and it is nowhere near 18.75, i can tell you that. opening around 7.20. that does it for here on "squawk alley," apologize to staff for being late. but let's get to the halftime report. welcome to the halftime report, i'm melissa lee in today. joe terranova, jon and pete najarian. battleground stock, the darling of the hedge fund set and the stock is on a tear. we've got a short seller and a bull for debate on this