california, 11:00 a.m. here on wall street. "squawk alley" is live. ♪ ♪ ♪ welcome to "squawk alley" for a wednesday, joining us this morning. kevin o'leary is the chairman of o'leary funds, an investor on shark tank and jon fortt and kayla tausche. and best day for the dow since may 14 and the nasdaq close to the closing high. we begin with breaking news, from yahoo and the nfl. the league announcing that yahoo will be its exclusive partner for the first time ever live stream of an nfl game to a

global audience for freext yahoo will broadcast the game between the buffalo bills and the jacksonville jaguars on october 25th in london. the game should be available on all devices, including desktops and mobile. we've talked about this a lot, guys, the point at which a new round of competitors start bidding for rights, how significant, kevin? >> it's huge. for two reasons, number one this validates over the top as a major way to distribute content. when you get the nfl involved, that's a big deal. and to me as an investor, it's the most interesting thing marissa has done at yahoo since she started her tenure there. it's been really boring until now. this tells me yahoo is not dead. it might still be alive. >> is she throwing a party? or does she have a plan? that's one of the things i'm curious about. if you throw enough money at the nfl, it will give you the game being played in london between two teams who aren't exactly killing it right now as far as how they're playing.

so my question is, is yahoo going to be able to convert this massive audience into a habitual daily habit yahoo users? >> and does it matter how much she spent to acquire the ability to do this we've known all year that the nfl was planning to live-stream this. youtube was was thought to be the front-runner, now it's gone to yahoo. but it doesn't come for free. >> but it tells me she's in the game if there's a 15% to 20% chance she can turn this into a franchise, where she does over the top for the nfl exclusively, that's a big deal. for this -- >> 15% to 20% chance? >> it's better than nothing. because frankly everything that created value at yahoo for me as an investor came from ceos of ie yesteryear. this could mean something. i don't mean any disrespect, but it's a big deal.

>> you don't want this turning into a sunday ticket situation, though. >> that's, you mentioned the money she is spending, we know she's spent a lot to acquire big names. the terms are not disclosed in the release. although re/code is out with some news, they're saying she spent $20 million to stream one game. >> let's see if she can monet e monetize. if that's the metric, can she bring in $25, $30 million. let her try, this is the best news i've heard out of her camp for two years. >> she was asked recently about how she measures katie couric. another expensive type of content she acquired a couple of years ago and she said it's more than profitable based on just the ads we're able to sell against that. do you think this will end up being profitable, 20 million? >> i will be watching this game. i watch everything nfl. i'm one of the 80 million people that are just hooked on the content. and it's live. this isn't something that you're going to look -- >> it's live at 9:30 in the morning. >> who cares, it's football. i love football. look if we're together, i'll

have it on my little device here with the sound off. this is interesting. i would have never thought they would have given it to her. i would have thought google for sure. would have got this thing, maybe even apple. here's little old yahoo. this slyke the monty python -- "not dead yet!" >> what are you going to, do bleed on me? we're going to follow the story all morning long. yahoo senior vp adam cahan will join us late oern this morning. and brian rolapp of nfl network and we'll see if this could be a game-changer and how much traffic you could drive. next up this morning, apple's ceo tim cook taking a big shot at companies like google and facebook in a speech in washington talking about the competition. saying they're gobbling up everything they can learn about you and are trying to monetize it. we think that's wrong and it's not the kind of company that apple wants to be. the same day instagram announced plans to open its photo feed to all advertisers late they are year.

marketers can target ads to instagram's 300 million users by their age, gender. facebook shares having a nice day, above $82. a few bucks from all-time high. is this the monetizing moment? >> it is. this is huge. i mean you think about the scale of instagram, the fact that it's made for advertising. perhaps in ways that twitter isn't. obviously made for advertising. think about the fact that facebook has managed to put ads into its main news feed in a way that users have not found overly intrusive. instagram has images, video possibilities, brands have been beating down their door for this opportunity. that's big. on the privacy issue -- yes, apple doesn't want to know you, they just want to get paid. they're very good at it at the same time, i'm kind of paranoid online. i don't stay logged into facebook while i search the web. i don't use the same email address to log into facebook that i use for a lot of other different services. people ask me, why, why do you care, what are you trying to

hide? nothing, i just don't like the idea of businesses out there knowing more about me and my patterns than i know about myself. i think we need a clearing house digitally where i can look and see what marketers know about me and decide whether i'm comfortable about that and manage settings like can you on other services. so i think tim cook is ride, he's a little self-serving, but he's right. >> i'm wondering why jon seems to care more than the average consumer. tim cook said in the past, when an online service is free, you're not the customer, you're the product. he seems to be saying there's going to be some sort of revolt down the line. that customers are going to realize this at some point in the future and it's going to get ugly. >> we have attempted in the platform of companies that i've invested in that are private now, over 27 of them, to come up with a standard on what we're doing for our employees on the digital footprints, here's what i've learned. if you're in your mid 20s, and you've come into the workforce, which is generally where 90% of the people are. they don't give a damn.

they just don't care. they've grown up with the idea that they have a digital footprint. they're proud of it, frankly, they don't care. and so here i am trying to say look, we'll scrub it clean for you, dig into your past to try to buy the data back to zero. they don't care. i don't know who tim is speaking to. maybe you, jon, your concern. my experience has been for millennials, they want a bigger digital footprint. they want to use the platforms and they know exactly what they're doing. the solution to me seems to be facebook or anybody else should make this transparent and allow you to turn it off or on and you decide if you want a really deep and long with a long tail. or if you can just scrub yourself digitally out of existence. i don't, but frankly, i think 75% of the population couldn't give a damn. >> i think that's right. until something happens, until there's some seminal event where people go oh, wait a second -- >> maybe not even then or maybe for ten minutes. >> maybe not. >> kevin, it's good seeing you, thanks for joining us on a lot of breaking news, kevin o'leary

this morning. checking the markets, dow in a tight range, up 134. all major averages seeing a nice gain. our own rick santelli is with some top market voices around. with a very special edition of the santelli exchange. >> you bet. definitely, carl, we have a couple of guys when it comes to the fundamentals, we have jim beanko, when it comes to the man in the trenches, the man of the hour on a wild day in the marketplace, jeffrey gundlach. doubleline. we're going to be doing a little conference this afternoon. as you look up and see a 233 yield in the 10's, see the 80, 90 bases points in bunds. summarize how you're feeling today, given what's going on in the market. >> we expected this kind of action we bay at the end of january. basically, it seems that european yields have been the anchor, right. the reason that people were buying u.s. bonds in january, at low, at yields that were really low and much lower than yields that they hated bonds at a year

earli earlier. was a relative value argument. you got the bunds down to five basis points on the 10-year, which is hard to believe. rub your eyes when you see five basis points on a 10-year. now they're skyrocketing higher. you look at the chart on the 10-year bund. it's something to southeast. it's a breakout. and you look at spanish yields, italian yields, you see trend line breaks, one chart that looks absolutely like you know where the direction is head std bund. that direction is the yield is going higher. so it's going to be hard for u.s. rates to settle down, although we don't expect much higher rates in the u.s. we think they're going higher. >> when i look at rates moving up, jim, from a fundamentals standpoint, what do you think is the trig centre or do we even need a trigger, considering the age we live in? >> i think there is a technical consideration that might be the trigger. it's called positive convexity, a word that makes the eyes glaze over. every time interest rates fall prices get more sensitive to movements in interest rates. so we've got bonds now, moving in price movements of very low

yields, more than they've ever moved before. why have they fallen? central banks squash interest rates and when that happens, everybody has got an opinion. the fed is going do raise rates. the ecb does more qe. they're at extremes, a lot of people are long the market or short the market. there's very few people in the middle. when you have lon durations and very extreme opinions, you have get the market to move and then it turns into a giant move. we're having a rout in the bond market now, but back in january it was one of the best months in the history of the market. >> it was the best january ever for the 30-year treasury bond. >> i've got data back to 1871. so in this same year that we're having this rout, you also had one of the best months ever and that's the structure of the bond market. it either booms or busts right now. >> jeffrey, when i look up at our markets, i think about corporate bonds. one of the big topics this year is liquidity. if we're going to talk about liquidity, maybe the corporate sector is the best area to talk about. how vulnerable are they to

widening spread? >> i think they're vulnerable particularly if interest rates rise. which is a nonconsensus point of view. most people think that corporate bonds, particularly junk bonds are somehow going to save you if interest rates are rising. but i think that's wrong. i think people -- were looking, we're hungry for yield. starvation for yield and buying corporate bonds and junk bonds was a way to try to accomplish something in terms of yield land. but if fields are rising, then the starvation of yield is actually abating. and a bigger topic that i've been talking about now that's a longer-term topic is the corporate bond market, the junk bond market in particular has never experienced secularly rising interest rates. >> never ever. >> never in a bear market. >> when i came into the business, 30-year bond prices were under 55. okay. so if that occurs, let's switch gear as bit if i'm holding in a fix income instrument, i'll hold it to maturity. i don't get dragged into the volatility. now we're talking corporates and high yields, maybe bond funds own a lot of those. is there some risk in certain

bond funds, given the complexion of their portfolio? >> there's always risk that flows could flow out in terms of daily n.a.v., open-ended funds or etfs. and certainly there had been a lot of money going into high-yield corporate bond funds. in fact in the month of january, the best month, best january ever for long-term bonds, there was a monsterous inflow into long-duration corporate bond funds. >> the riskiest ones relative to interest rate risk. and i think investors, if what's going on now, continues, they're going to be a little bit unpleasantly surprised when they ep up their statement for the end -- for we've got a whole month now, for the end of june. if the yield rise continues. we're going to be looking at negative returns in corporate bonds. particularly long-duration corporate bonds. with the steepening of the yield curve. so sure, money could flow out. but the hold to maturity is great if you have high quality bonds, but what about defaults? if interest rates are rising, long-term, junk bonds if

interest rates rise for kind of systematically for the next three, four, five years, there is going to be a very different context for junk bonds than anybody has experienced. there will be a wall of maturities that comes into 20018-19, and if interest rates are rising, these companies will have to roll over the debt at higher interest rates. that's something that has never happened in the history of the junk bond markets. it's always been when your bonds rolled over it was a benefit. you could refinance them roll them over at lower interest rates in a secular decline. that's not the case now. so maybe the default rate that we all think we understand as an average. >> which has been very well behaved. >> about 4% on average, often down near zero like it is today on a 12-month basis. maybe if interest rates are rising, certain sectors of the economy get stressed and maybe the default rate is very different during rising interest rates. think this is a very important idea. investors don't have to act on it now because it's not really that relevant for this year and maybe not even next year. because of the maturity. calendar isn't there.

but in the years down the line, if interest rates have bottomed, which i kind of think they did in july of 2012, on unorthodox basis. i know the long bond. >> i'm with you there, jim. what do you think? >> i would add to it another technical argument that the flows and the liquidity into especially high-yield and corporate bonds has been coming from the etf sector, people aren't picking credits any more. >> the problem with the etf sector, it's like playing craps in the alley. it doesn't make the yields or contribute to the yields i see on the screen. so keep going. >> so the money flows in, it usually flows in through something like an etf. when it flows out, it flows out through something like an etf. if jeff is right and i think he is, when the money starts flowing out, it comes out of the market at an index level. the etfs get the money out, everything is for sale. there's no discrimination. this is a good credit, you should keep this. this is not such a good credit. one paintbrush. it all comes out, like it all flowed in earlier it could all come out the other way. >> high-yield etfs exhibit

double the volatility of an off-the-shelf high-yield bond index. etfs are double the volatility of a high-yield bond index. if you're analyzing risk-adjusted returns using index data, you're fooling yourself in terms of the risk ex-exposure you're taking on in a high-yield etf. in the '87 crash, i was in the 30-year bond pit and i was indoctrinated in the notion when everything gets wild or weird, you buy treasuries. i'm looking at stocks having a robust day. the dow jones industrial average is up 140. have we come this far down the rabbit hole, gentlemen, that when the fixed-income market gets a little squirrely, flight to safety is in stocks? why are stocks up? you start out, jim, and you finish, jeff. >> i think what it is, is there is the bad news -- good news type of thing. when people see yields go up they say reflexively say high yield is good. that means better economy.

that may be the case, that may not be the case. >> do you believe it's the case? >> i don't believe it's the case right now. that gives you the reflexive response in stock market, yields are up, that must mean things are going better. everybody forecast it everybody wants it. they look at it as a sign that the things rupp. i don't think it's the case. >> i don't think it's the case right now. think market action this year rosetta stone. the long bond wants the fed to tighten. >> they want a depression. >> they want a depression. >> wants the fed to tighten. when you look at what happens when economic news comes out, when economic news is weak, the long bond doesn't do that well. i mean the economic news is pretty good, there might be a knee-jerk reaction. but in the days following, the long bond does pretty well. and the best friend of the stock market for sure is zero interest rate policy. if the fed doesn't raise rates, that's bad for the long bond, because the bond wants it to tighten. and it's positive for stocks.

because stocks love their friend, mr. zero interest rate policy. >> so they love the fed chairmans of the last seven years. >> what explains the market action broadly or year to date is the feds willingness and ability to tighten is diminished versus where it was entering this year. >> now last minute we have i want to each to weigh in on this. do either of you have confidence in the central planners and the central bankers. to bring the epilogue of all of this experimenting to a good conclusion? can they do it? jeffrey gundlach. >> no. no way. in fact i saw a headline today that was great. it says mr. draghi says quantitative easing is going exactly perfectly as planned. >> i saw that, too. >> i said frame this, clip and save. because one day this will turn out to be something that he'll regret. >> jim? >> no one has ever raised rates off of zero. no one has ever entered a quantitative easing program. no one has ever done it. not getting too technical by using tools like interest in

excess reserves and reverse repos. no one has tried to target the fed funds market which really doesn't exist. and they're going to try to do that where the long band is demanding they raise rates and the fed fund futures is demanding they don't raise rates. you've got the markets giving them confused signals. everything they're going to try is completely unprecedented. good luck. >> one-word answer to the following. is the fed going to raise interest rates in 2015? >> no. no. >> i say no, too, oh, my god, a no trifecta. what a great duo we have here today. thank you, gentlemen. >> that was a fantastic discussion, rick, thank you so much. quick alert here on show time. julia boorstin is live with some news. >> that's right, carl. source tells me that showtime is expected to announce its over-the-top direct-to-consumer app as soon as today. the announcement could come from cbs, showtime's parent within

the next cull of hours. cbs did decline to comment. but my source says that the app will be available via apple, as well as other platforms. now this comes in contrast to hbo's direct-to-consumer app, hbo now, which launched through apple for a period of a couple of months. now my source tells me they're putting the final touches on the press release, which will reveal the pricing for the direct-to-consumer app. cbs has moved into the over-the-top space with its app, cbs all-access, which costs $6 a month. this app is expected to be more in the price range of the hbo now app which is $15 a month. so it will be a waiting the official announcement from the company on this showtime direct-to-consumer app. back to you. thanks so much. les moonves hinted at this at the code conference last week. we'll watch cbs stock. when we come back we talked about it at the top of the hour, yahoo teaming up with the nfl to stream a regular-season game

this year. yahoo's senior vp adam cahan and a senior nfl executive will break down the deal. and a venture capitalist, the co-owner of the golden state warriors is withousen the eve of the nba finals. and one analyst is placing a new valuation on hue lew, saying it could be worth over $9.5 billion. he'll make his case later this hour. [ male announcer ] legalzoom has helped start over 1 million businesses.

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the nfl and crue are partnering in the first-ever global livestream of an nfl game. streamed for free across all devices through yahoo on october 25th. joining us now are adam cahan, senior vice president of product for yahoo. what's your plan to retain the value of the gigantic audience you're probably going to get for this? obviously you want to turn yahoo into a daily habit for them. is it downloading an app that you want them to do? how are you going to get them to come back? if they don't come back this is going to cost you money probably, not make you money, right? >> i thanks for having me on, good morning, brian as well. >> good morning, adam. >> i guess i would start by saying you know we're thrilled

that the nfl picked us as their exclusive partner for this. it's a really big historic event. and for us to be able to offer that to our users, a global live stream of a football game completely for free, available on any device to any connected user is a big deal. to your point, i mean i think for us, we view this as a very big industry event. and it really is a shift. and it's a platform shift and i think you know, if you look at how consumers are engaging right now, especially with sports content, or content more broadly. we're seeing times where people are on their mobile device more than they're on even their tvs, their desktop or anything else. for us to participate in that is a big deal. and you know to your question about retaining users, i think the opportunity for us is to ignite our global fan base. i mean yahoo reaches over a billion users monthly. we have one of the largest sports franchises. plus the largest fantasy

football, fantasy football is the number one franchise out there. so we think we have the opportunity to retain a lot of those users. >> hey, brian, ways trying to decide whether or not this is in the neighborhood of when monday night football went to espn. is it that historic in your view? >> well, it certainly historic in a lot of ways for us. adam mentioned it, reaches very important. and the nfl is in part built itself on creating really good content from the most dominant media platform of the day, that has traditionally been television. and television is still very, very important to us. but the shifts in how our fans interact with content, the shifts in how everyone interacts with content over digital and mobile platforms has us thinking well how do we reach more people. and yahoo, who reach as billion people a month is one way to do it. so it may be historic. i think 40-some odd years ago when "monday night football" showed up on paid television, i think people probably scratched their heads and said, is it a

stunt? is it going to last? i think time certainly told on this one. think time will tell on this one as well. >> adam, there's a question over how much yahoo will have to invest in the platform to make sure it's ready for primetime and ready for the reach that something like this could bring. we saw it happen to sling tv with march madness and the premium providers for the mayweather/pacquiao. what does yahoo do from may to october to invest in the platform? >> we want to make sure we deliver a flawless consumer experience. for us, first and foremost it's making sure that our users really have a delightful time when they're watching an nfl game like that the good news is for us that we've had a lot of experience, we've done lots of large-scale events. we did a taylor swift concert with livenation, its own seismic event across the internet. things like the royal wedding or even the michael jackson funeral. these are you know, global events and i think you know as brian pointed out, one of the

things that's really exciting for us is the global reach here. we think the nfl and football, especially the fact that this is happening in london really will bring a global audience. so we have that scale of a billion reach and i think that's the opportunity for us. >> brian, what does success look like from the nfl's perspective? besides the obvious, the stream works and the viewers are happy with that aspect of it. is it higher social engagement? is it some other metric that you're going to be looking at that's going to make you say yes, this was great. maybe we need to wait a couple of years before we do this again. >> i think you mentioned the most important one is that our fans expect a high quality experience. and television has been very good at that for decades. so the first thing we are looking for and we're confident yahoo can do is create a high-quality experience. the game will be produced professionally, you will see it i think the fans will not have any drop-off in that. but we want to make sure it looks great.

on whatever device you're accessing, that's number one. i think number two, what's important for us is reach. adam mentioned it. it is not by happenstance that this is game from london in a 9:30 eastern time zone, primetime in china and other parts of the world. reaching globally in a frictionless environment becomes very important and yahoo has proved they are able to do that. i think we'll see. i think this is an important step for us, it's an important step for yahoo. an important step for anyone in the content business. to start to prove out that these distribution platforms can create a high-quality wide-reaching experience. and that's what we're looking to learn. >> adam, not to quibble, but you know, bills/jags in london is one thing. a lot of viewers, watching right now is when would we get, how about a broncos/seahawks game in prime? are you guys working on that as well? >> what i would say is with

every platform shift, we think the nfl has played a really big part of it if you look at even the transition from broadcast to cable, from cable to satellite, the nfl led the way and a lot of those consumer platforms were defined by that shift. and their choice in doing that. the last six months of what's happened in the cable industry, the unbundling, you know you're seeing, you're discussing hbo now going for free, sorry, going over the top. you're discussing showtime possibly doing that as well. we've seen a massive platform shift here and i think the nfl will help us lead the way there and hopefully we'll have more of it to come. >> brian, so much of live streaming is an experiment. even the economics in a couple of months ago it wasn't clear how the economics of something like this would shake out. i'm wondering how you decided to let whoever your partner would have been, now we know it's yahoo. keep the advertising revenue? >> well, i think you know, again, this world as you know and as everybody there knows, moves in light speed. i think the online advertising

market is much bigger than it was one, two, three four years ago. i'm not sure we would have done this four years ago. but four years in internet time is a long time. and when you see the dollars shifting from television and other mediums to digital platforms, to mobile platforms, as at an accelerating rate. while it still may be in its infancy. it is moving quickly. so we think that there is plenty of advertiser demand, there's clearly consumer demand. the mobile phone is no longer a piece of optional equipment. the amount of video hours being streamed on these platforms is enormous. so i think people have moved there in the ad market is developed. i think it has a lot, a lot to still grow. this is a clearly the beginning of the shift. not the end. and so for us, i don't think on a monetization standpoint, money standpoint. it's that big of a lead. >> tell us how you think advertise something going to

work for this obviously you've done big events before. but nothing this big. how many different ways do you slice this geographically? how soon, maybe today or maybe even sooner, do you start selling those ads to budweiser, to doritos, to all the folks who traditionally want to be in an nfl game? >> great question. i mean one of the things that we really feel like we bring to the table is terrific advertiser relationships. yahoo does have those kind of premium brands, the types of folks that really want to be associated with something like the nfl. you know the nfl is probably among the most premium kind of content experiences out there. for us, what we're offering is already starting today, we're certainly in market, telling our advertisers the reach and scale and opportunity for them to be part of something historic like this most of the advertisers we have are looking at the global nature of this. one of the unique things about this is unlike a traditional tv broadcast that really focuses more on the national advertiser, we do have the opportunity to bring a lot of our global brands to bear.

and folks who want to reach that. we also have the opportunity to provide different types of advertising in terms of what we can do in a digital environment. >> finally, adam, everybody wants to know if katie couric is going to call this game. as david pough going to do color commentary? how is that going to work? >> katie couric will not be calling this game. david pough will not be doing color commentary. >> i think the nfl has the best out there, so we're excited to be working with them. it will be very much a tv broadcast. >> if you have an audition tape, we'll take a look at it, carl. >> very quick answer on that, adam, brian, big news, thanks so much for joining us. >> thanks for having us. >> thanks for having me. our next guest has had a pretty interesting jour sni going from senior facebook executive to the co-owner of the golden state warriors. he'll join us live to talk the nba finals.

let's bring in simon hobbs to get you the close in the uk and continental europe. greek debt talks, as well as remarks from mario draghi. >> european equities are off their high, the euro surging, it could break $1.13. the bund is selling aggressively in europe. let's kick off with mario draghi and the ecb conference. he's come through with fresh inflation projections that show that bied end of 2017, core inflation will be 2%. that's what they're targeting. if that's true, at what point could they cut back on qe? that's the debate. he said to the bond market it should get used to periods of high volatility because interest rates are so low. which is kind of you're on your own. which is why you see a further selloff on the bond market

today. which is illiquid markets, he's warning about illiquid markets as we have many times on this market. you see the yield on the german bund here is basically doubled within the last week. it's clearly at a year high. it's joining the spanish and the portuguese and the italians who have yields at a year high as well. a strong selloff on the bonds around europe because of the inflation figures and the ecb saying it could end qe earlier than the fall of 2016, if it had inflation, which is to the point. kayla mentions the fact we're waiting for the arrival in brussels of the greek prime minister, this is him in athens today before he left for brussels. the rest of the the eurozone as you're aware will present him with the ultimatum on the core principles for reform. they might delay their payment to the imf on friday. the point is can they do a bigger deal. ebs suggesting he'll be there at 2:30 this afternoon our time. this is what rbs is suggesting,

as far as the incentives actually now to accept an ult mail up. the majority of greek voters want a deal now. if he doesn't make the payment on friday, you'll have chaos in greece as you go through the softer period of deadline with the imf, possibly a referendum. possibly his own career could be the end as prime minister if the chaos threatens the summer tax rei receipts as we go on holiday and the bigger prize is the debt restructuring. to that point, the dutch are getting all excited because their auditor has suggested that the dutch may never get repaid the amount they have left the greeks, 240 billion euros in all from the rest of europe that if he does his job properly he may get those loans softened is the argument from rbs. don't throw your toys out of the program now. do an interim deal. tomorrow we may know. >> never throw the toys out. you might want them later. when we come back, from one

of the earliest employees at facebook all the way to co-owner of one of the best teams in basketball. no, not steve vollmer, chamath palihapitiya, co-owner of the golden state warriors will join us live the day before game one of the nba finals. but what if you could see more of what you wanted to know? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. more and more, data is visual. in fact, the number of mris has increased by ten percent a year.

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your cnbc news update. apple says it's recalling 233,000 of its beats pill xl portable wireless speakers, due to a fire hazard from overheating battery, it's received eight reports. apple says commerce can apply for a $325 refund on its website. proxy adviser iss has recommended that google shareholders with hold votes for all three deteirectors on the company's compensation committee. saying megagrants were problematic. google holds its annual meeting today. president obama's special envoy for the coalition to counter isis says defeating the group will take a generation or more. general john allen made the comments while speaking at the annual u.s./islamic forum in qatar. and south korea has launched a new ballistic missile that could hit all of north korea.

it will be a key part of defense against the northern neighbor. that's your cnbc news update this hour, back to "squawk alle alley". thanks, sue, the nba finals are set to tip off tomorrow night in oakland. where the golden state warriors will take on the cleveland cavaliers. our own josh lipton standing by in san francisco with one of the warriors' co-owners, chamath palihapitiya. josh? >> well, john, listen, chamath, thank you for joining us, i'm a bay area kid born and raised. my first question chamath is why did you want to own a basketball team? >> well to be honest with you, it's just a real opportunity to be part of the local community. and i've grew up loving sports my entire life. and frankly i played basketball my entire life. so when i had the chance to join joe and peter and be part of the ownership team, i jumped at it.

>> why do you think you look at so many tech veterans, so yourself, boll mer, cuban, why are so many tech vets specifically interested in buying a basketball team? >> there's a lot of risk in starting technology companies, making them successful. ultimately when they are, it comes down to culture and team and i think there's something beautiful about that. that exhibits itself in sports, which is the exact same thing. culture, team strategy. and so i think we just want to be a part of that. and have it recycle itself year after year and have a chance to win a championship. it's quite similar. >> are there any similarities between creating a successful start-up and an nba powerhouse like the warriors. >> in the case of the warriors, to a one, the people are incredible. the front office team, the ownership team and the players, they're all extremely high-integrity, high-quality people and great companies have a high quote of those people as well. >> give us your forecast, will the warriors beat king james?

>> i think we're going to win in five or six. >> nice, your firm, social capital partnership, you just raised $600 million, your third investment fund, your biggest. where are you seeing opportunity right now, chamath? where are you putting the money to work. >> when we first started three yaf years ago, we were actually looking at areas that were not well looked after. so we spent a lot of time in enterprise, health care, education, and financial services. and from that, have borne investments like slack, remind, wealth front, cyapps and now the entire market has pivoted to those areas, now we think is the time to start looking at places like consumer and other areas. >> jon, you have a question for chamath? >> i do. you were kind of facebook's original growth hacker. figuring out how to help that service to grow. i can't help but notice the clippers and the warriors, not historically the best teams in the nba, they could use some growth. how are you going to take those skills that you honed at facebook, to grow the business

of basketball for the warriors? >> well, i mean to be very honest with you, we actually have a really accomplished front office that actually runs the team day to day. i would be lying if i told you that i'm actually incredibly involved other than just being two things, one is a vocal supporter where i can be. and the second is to be a mentor for some of the players. think i represent a really good example of a young person who has tried to do things beyond basketball. and i think that's been a really great example for them. >> chamath, let me ask you, you mentioned slack. i was talking to stewart butterfield, chief executive of slack and you're an investor and stewart said to me, he would like to see a correction here. he says that would mean everything from office space to salaries would come down. as a vc, do you want to see a correction like that? >> i think a correction would be healthy. only because i think the pendulum has swung probably a little too extreme in the direction of overvaluation. and under value. meaning there's a lot of hype right now and i think the reality is many of these companies will not grow into their valuation. the problem, though, is that we

are just at the tip of the iceberg in terms of the amount of capital that is flowing into this market. and so specifically we have massive sovereign wealth frunts, trillion-dollar pools of capital that are looking at venture as a true asset class that will mean another half trillion or trillion dollars that has to find its way into the market. >> you have a question? >> i do, you're specializing in social. we're seeing pinterest now facebook through instagram make new moves into monetizing. what's your take on why now is the time we're seeing some of these image-focused networks with a social component moving into monetizing? what do we need to watch for, worry about as instagram makes this move? >> well i think that, i think the great news now is that we've, because of the millennials' impact in term of media consumption, the whole experience where we've been waiting for the ad dollars to catch up with time spent will probably take shape over the next five to ten years.

and i think what pinterest and instagram will show us is that the traditional ad model of a commercial is not what people resonate with. and so it's now time i think because the scale exists, and the trust with these services exists, to really experiment with who is going to capture the dollars from these major cpg companies and otherwise. think the next five to ten years is really where the dollars will catch up with the time spent and you're going to see now the value accrue to folks like pinterest and instagram. >> and chamath. i want to ask you about john doerr, kleiner perkins, they expressed interest in a merger with your firm. why didn't that deal happen? >> i think the reality is that you get to a point in time where we're all looking for different ways of expanding and reinforcing the value that we've created. for us, it was extremely humbling and to be even approached by someone like john. who we just hold in the highest regards. he and mary meeker are two of the best investors in our asset class. so it just didn't happen because it just wasn't the right time

and the right market conditions, but we were flattered to have been asked. >> chamath, thanks so much for joining us. and carl and jon, i send it back to you. >> josh lipton out west. when we come back, one analyst is putting a new valuation on hulu, saying it could be worth over $9.5 billion. he'll tell us why, when "squawk alley" continues. s the life behind it. ♪ those who have served our nation have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life.

. coming you, the battle of the fed heads, yellen says stocks are pricey. bernanke says they're not. so who's right?

we'll debate it plus the call of the day on amazon, piper jaffrey raising the price target on the stock. analyst gene munster joins us. and the first on cnbc interview, howard lutnick, the global spike in yields, we'll see you in less than ten. >> thanks, scott. meanwhile hulu is aggressively investing in original and acquired content to drive growth. in a new note one lifrt predicting that hulu will spend $1 billion this year on content alone. nearly $10 billion. anthony declemente. anthony, you have an enticing note out this morning. where you say "seinfeld" is the barometer showing you how many hulu is willing to throw its weight around in this space. why is that? >> there's definitely mandate from above at hulu to aggressively invest revenue back

into content in order to grow the asset. i think the media owners that own it, dwis nn nnyny comcast a fox. >> they're investing in the technology, the marketing, up 70% and as that's driving the content spent. it's improving the value proposition for consumers and that's driving real acceleration and growth. in the first quarter we see hours streamed up over 80%. we see the number of subscribers in hulu up over 50% and hours streamed per subscriber up over 30%. all the metrics are showing a real acceleration. part of it is the environment. it's no mystery that the world is moving to on demand, into streaming, even just looking at what you guys are covering this morning on the nfl streaming game. to yahoo and showtime potentially going over the top. this is where the world is going. internet video, there's a big-enough space growing fast enough for multiple players to win. when you look at our valuation,

maybe it raised an eyebrow this morning, but the last time hulu was marked to market was in october of 2012 when the private equity owners providence sold out of their 10%, marking it at $20 billion. since that time, netflix is up almost 10 x. even if we take less than half of that appreciation and extrapolate it to hulu, it makes sense that the asset would be worth $6 billion to $10 billion and for the media owners, for fox, they split a third a third a third. that would be about $1.40 to fox's share price. >> the thing that i wonder about valuing these kinds of properties, is okay, beyond just time spent, over the top content that's not hulu, how do you value hulu in terms of its stickiness, how do you -- evaluate whether it's going to be one of the players to stick around loyaltiwise in the long-term? >> well it goes back to the investment in that great content it goes back to the value

proposition to consumers. so $8 a month and the hours streamed per sub is increasing at a 30% rate. so the consumer is getting more value out of the product. and remember, hulu is a dual revenue stream. it's not just an s-vad provider, it's an a-vad provider, the cpms are typically higher than a network cpm. it's because the median age watching hulu is much younger. the median age is 33. 80% in the 18-49 demo. it's because the ads are unskippable. and in some cases the ads are interactive. you have a product that's more engaging. the ad load is lighter and i think ten years from now media consumers will say forget it with advertising, they want things that are on demand and a lighter ad load. think that's what netflix and hulu are providing. so when you -- >> if you want to trade against it, if someone buys your thesis, is it a comcast buy?

what's the trade here? >> i think the viewership is shifting from linear tv. so it's the long tail of cable tv where five or ten years ago, media viewers were surfing, the long end of the channels you know 80 to 120. and it's those channels that are losing viewership, we see it in the data each month. what you want to do is you want to be invested in must-have content. digital platforms that play to the on-demand shift. and you want to probably stay away from some of the companies that deal in kind of long-tail linear cable. >> we got to leave it there for today. i know this is not the first time we're going to talk about hulu. especially if you say they're going to be investing close to $1 billion in new content. come back. >> right, definitely, thanks for having me. >> anthony declemente from nomura. amazon bringing more purchases to your door for free, we'll explain. are you moving forward fast enough?

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under $10. in the past they've only offered free delivery for a certain amount of products or premium delivery. it's in top 10 of the nasdaq top 00 gainers. >> which weighs eight ounces? >> one toothbrush. >> that does it for "squawk alley," let's get to headquarters and the half. ♪ ♪ guys, thank you, welcome to the halftime show, let's meet the starting lineup for today. jon and pete najarian, along with josh brown and jim lebenthal. our game plan looks like this, amazon primed, we'll hear from one analyst on why he raised the company's price target. do the traders agree with that call? lutnick live, the bgc boss on the biggest story on the markets today, the spike in global yields, the fed and much more. we begin with stocks picking up steam in the past couple of ur