idea of debt relief? >> no. despite the fact that christine lagarde sat through the meetings over the weekend. let's send it over to "squawk alley." >> it's 8:00 a.m. at netflix headquarters in los gatos, california and 11:00 a.m. on wall street and "squawk alley" is live. ♪ ♪ welcome to "squawk alley." henry blodgett is back at post 9. jon fortt, kayla tausche, with a lot to work with netflix, another all-time high this morning after the company

reported strong q 2 results, including the addition of $3.3 million subs, the 7 for 1 split taking effect after the bell. reed hastings talked about the stock on the company's earnings webcast, take a listen. >> when the stock was half this price i described it as euphoric. so it's a mystery to me. and you know, what we focus on is how to get incredible content, stream is beautifully. market it in every country. grow the member base and i think i'm out of the stock commentary business. >> unbelievable metrics today. going into 200 countries, spending $5 billion on content. easily doubling for the year. doubling and then some. >> i think some of the most interesting commentary was around pricing. how it sounds like he doesn't want to disrupt this momentum he's got by raising pries in the traditional way too soon. doesn't want to charge people

for what they're already getting, but wants to tease them into higher tiers of higher definition. >> cramer seems to be describing the company as what it's doing right now as a value play in a world where other stand-alone services are $15.99 a pop. is netflix differentiating itself? >> they're perfectly positioned as a company for the future this is where everything is going. tv is this. we all want stuff when we want it. we have a great service for that. they've been from the ground up, the more content they get and the more valuable they become to their subscribers, the more pricing power they have. so it's very refreshing to hear reed hastings say, hey 50% ago i said the stock was looking too euphoric. but investors are say look, we know this is the future. we kind of got to be there, it's pricey, but we got to be there. >> these targets, we're at 110 as we said. but they go 125, 135, there's a couple 150s on the street. do you have a line on your head as to when this euphoria ends?

>> well a the at some point i think people are going to be spooked by the amount of investment. from a free cash flow perspective. you start to hear some talk about that plus a billion-dollar run rate going into content. on the other hand this is what tv networks spend. creating great video content, costs a lot of money. you have to put out all the money first, you get paid back for it over time. >> it's an interesting combination of the reluctance to raise prices too quickly, but saying hey, in 2016 we're going spend a lot more money on original content, because that's working for us, we're going to move into movies. so they're reluctant to charge more bur they're not so reluctant to spend more. it will be a big test of their model in 2016. >> but the market is showing patience with that. the stuff the journal had, was forward earnings mullet 3e8 is currently more expensive than 99% of u.s. publicly traded companies with a market cap over

$1 billion. it's in a league of its own. >> you think about the value from the viewer perspective, it's a reasonable price, it's much less than the competing services. the more stuff they have. you don't have to watch all of it. you don't have to watch a fraction of it. all tough do is find some stuff in there that you like. and it's worth the price. it becomes more and more valuable. >> it's the anti-twitter, right? it's extremely sticky. they're charging subscription, not relying on advertising, their subscriber numbers are driving the valuation which is up huge. they're growing subscribers, faster than people expect. maybe facebook is not so much the anti-twitter, it's netflix. >> does it bother you that the two biggest, two of the top three gainers for the year are companies, netflix and amazon, for whom earnings quote-unquote are illusive, quote unquote. they're spending money, but the growth is there, that's why people are paying. >> it doesn't bother me at all. if more companies were like

amazon. we would be in so much better shape as an economy. if companies instead of trying to maximize quarterly earnings, were actually saying we have a great opportunity, we're going to invest our excess cash in the future, we would all be way better off. and this is a good show, both of these companies will illustrate that if you tell that story and you do a good job and you persuade some fraction of institutional investors that you are investing responsibly for future growth, that you will get the valuation. that you don't have to be a slave to folks who grab a little bit of your stock and say i want my pay-off right now. >> traders as bezos calls them. shares of intel higher after the company's second quarter did show a surprise beat. pc shipments down 10. earnings helped by sales of chips for data centers, which saw a 10% jump in revenue year-over-year. a couple of the sell siders went

into the quarter thinking it was going to be worse. we've got a bit of an upside surprise. it was actually not so great news in here. take off some of it, inventories were higher than intel expected. usually the supply chain works through the inventory. leading up to q 4 and builds it up in anticipation of the holiday season. that didn't happen here. also we've been used to the cadence of intel of tick tock. they introduce a new manufacturing process where the chips get more efficient and they improve the design. one year to the next. they said this time we're going to do tick tock tock, we're going to stay on 14 nanometer longer, because 10 nanometer is taking longer to come along. that's not great news usually. but given the fact that intel has beaten their competition to a pulp, they can get away with it gross margins were relatively strong and there's still the upside of windows 10 which intel isn't building in. >> isn't that what the entire

second half is hinging upon? >> it's hinging on the combination of windows 10 and sky. and one of my sources tells me that microsoft is planning a big market push for windows 10. in september. it's supposed to bring in a lot of great new designs, they said that's qualified for manufacturing meaning it is ready to go so if the october lift, if consumers see the new pcs and say okay, maybe i will trade in my 5-year-old pc for something new instead of just getting a tablet or just getting a new phone. could see a significant -- >> there's nadelia on the cover of "u.s.a. today's" money section. they report dmt coming days this is the beginning of the push thaw mentioned. >> it's the new tech look. the t-shirt that's kind of form-fitting, a little bit zuckerberg is doing it satya is pulling it off. it's sun's out, guns out. >> thoughts on the pc space, henry? >> intel still dependant on that they're talking a good game

about the internet of things, the data center chips. the more they can diversify away from pcs, the better off they are the big problem is they missed this. >> and the profits coming, 70% of profit not from the pc business, from data center, it's from the nan business, it's from other things, that allows them to be diversified. >> this is a company that led the dow last year, down 18% year do date. do you see them having enough momentum in the second half to be able to make that up? >> it hinges on being able to convince a lot of consumers that now is the time to upgrade to windows 10. i think a lot of people think with the features that will log you to log into your pc using your face, that microsoft and intel will win over consumers. the question is whether wintel can ride again and convince consumers this is the way to go. rocker neil young taking a

cue from taylor swift, the artist announcing on facebook he is banning his muse frick streaming sites. young writes streaming has ended for me. i hope this is okay for my fans, it's not about the money, it's about sound quality. and he is becoming a bit of an advocate on this front. the sound quality of vinyl and his own product versus the regular streaming products we talk about all the time. >> henry this makes no sense to me. if sound quality is such a problem, pull your music from radio, right? sound quality on the radio when you're going through a tunnel is terrible. and these days with title, there are higher-quality streams that sounds better than a lot of downloads. sure some services like pandora are lower-quality, spotify don't sound that great but if you want bad-sounding music, you can get it you can pay for it streaming isn't the problem here. >> i'm a neil young fan. i say this respectfully, but come on, cranky old man -- come on. you're no taylor swift. the folks who are on streaming

may not even have heard of you. it doesn't matter all that much. neil young is rich. he doesn't need whatever pennies he's getting from streaming. if he wants to sit back and say, lecture, back in my day -- but come on. people are streaming this is where it's going. you want to be there. >> i love that he says i hope my fans are okay with this. if his fans cared about sound quality, they would go buy a remastered album to actually get the sound quality. >> i remember this with cds, when cds came out the audiophiles said it's not as good, this is the way the world is going, it's good and not to get better this is actually the way disruptive technologies work. people hear disruptive technology and think it's a better solution. no, in the beginning it's worse. but it's easier, more convenient, simpler and it did gets the job done and it gets bet frer there. that's where streaming is it's only going to get better.

>> you could say the same thing about wearables and for every neil young there's an ac/dc or led zeppelin. >> i didn't get him saying it's not about the money. if he made it about the money, i understood it better. now with the higher-quality streams, you can't hear the difference between a good stream and a download. >> henry, good to see you as always. it's been a while. henry blodgett, of "business insider," in our netflix discussion we did talk about bezos, he does have an investment in "business insider." >> and we're grateful for that. let's check the markets, we're still in positive territory. the dow and s&p are on track for their biggest weekly gain since march, in about four months. home builder sentiment came in better than expected, as did jobless claims. the philly fed was a little disappointing and people are saying the maybe the june juch was an anomaly. we're seeing the dow holding

above 18,000, the s&p up by about half of 1% and the nasdaq up by about 1%. we also have a busy earnings day. goldman sachs beating estimates. but getting hit by the large litigation charge. shaving off about 2.77 per share. that stock down about 1%. citigroup, posting its highest profit in eight years, largely on the back of releasing some more loan loss reserves, as well as ongoing restructuring. that stock up nearly 3%. and ahead of its pay pal spin-off, ebay reporting a 7% jump in net revenue and announcing an additional 1 billion buy-back shares of ebay. mossberg will tell us what software he says is finally a first-class sit separate. and shares of apple, why jeffrey gundlach says it's cheap. and fan duel. when i started at the shelter,

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walt mossberg has put office for mac through the wringer. joining us is re/code co-executive editor, walt mossberg. this is a product for windows users and for mac users has

always looked extremely different. is that finally changing? >> it is changing. the 2016 version, which came out last week is essentially a clone of the windows version. windows 2016 will be coming out late they are year. they're at 2013. now they're pretty much at parity. >> walt i'm wondering what you think the value is here. obviously what microsoft really wants is for people to sign up for office 365 for the home user that's going to run them $100 a year. and gives them a terra byte of storage per person. but there are a lot of free options out there. does this make the grade to make you want to pay? >> well first of all, $70 is where it starts for home users, he not 100 and you get the

ability to use it on a phone and a tablet and you get a terra byte of storage. they're, look, there are a lot of competitors, a lot of them are good enough for people, particularly google's docs. but you know, apple has i-work. we're talking about mac users, apple has i-work, it's free and good enough for a lot of people. so there has been a switch by a lot of people, younger people and small businesses, microsoft office, what microsoft is hoping here, however is they've made this into a cloud-based service. you can use it the way you used to. you can also use it with cloud. they've introduced simultaneous editing and threaded commenting and all the kinds of things you see on the competitors. and they're hoping that their superior number of features and that just the -- god knows,

billions of documents and their formts that already exist are going to keep the cash cow going. >> what are some of the features, walt? you mentioned google docs has been good enough for lot of people. i-work, evernote, there are a lot of options and they're pretty much all utilizing the cloud now. what is it specifically thaw think will be so sticky that people will migrate to office if they haven't been already? >> they're all utilizing the cloud. i think we'd all agree, even if we think it's too complicated. word, excel, powerpoint, just have way more features than any of these other products. now some people say let's simplify it and that makes sense for alet of people's needs, for my needs, i don't need all the intricate formatting that's in word. even though i write almost all my columns in word. i'm just writing in plain text. for some other people it may be

different. there's no question that all of these, all of these features are -- an advantage for them. for at least some people. i'll give you an example, people who really are excel experts, windows have been able to use keyboard, quick key stroke shortcuts. to get things done. those have not been fully there on the mac version. this time with this version they're now fully there. for people like that, the spreadsheet in apple suite, the spreadsheet in google suite is not going to cut it. >> walt, when you're talking about excel experts, you're talking to a lot of people in our audience, investment bankers, consultants who say that's music to their ears, we'll have to check it out for ourselves, walt mossberg. a quick note that nbc news is a minority stakeholder in re/code

and we have a partnership. coming up, why scott cooper says the tech market is nothing like the infamous bubble. ♪ if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. hurry, before this opportunity cools off. share your summer moments in your mercedes-benz with us.

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prospect of a tech bubble a much-debated topic at yesterday's delivering alpha conference. here's scott cooper of andreessen horowitz on the differences between today's market and the big bubble of a decade and a half ago. take a listen. >> if your comparison is 99-2000 for a bubble, by any metric, liking at ipos or valuations, venture capital dollars, all of those feed is in and say this is nothing like we saw in '99-2000. all the growth in the last five years in tech stocks has been earnings driven, not pe driven. i think veternture capital will whether it's financial services or bit koi there's a dismantling

of individual pieces of financial services that are happening among venture-funded companies, whether it's health care. think what will happen in the cases of airbnbs and others that have these contractor versus employee questions is the utility that they deliver from a customer service perspective is so great that the regulatory framework will change in some respects to be able to adapt to those. >> so it's not a bubble. like the old bubble. but we were looking for the right sort of metaphor, i said it's a bouncy house, it's inflated, it's a lot of fun for a while. you feel like nobody is going do get hurt in there. it can't last forever. esther dyson said it's more like a trampoline. she got hurt on a trampoline once. the comparison to 15 years ago, doth really compare. >> as long as it's not the bouncy house that gets untethered from the ground and flies up into the sky. >> as long as it's not the movie

"up." >> it's no the an old man's house. >> it brings home the point that there's danger involved. regardless of what degree of danger. >> we talked about this yesterday. i thought it was interesting kupor said he lps, who aren't used to start-ups, calling to try to get in on certain start-ups, that's a red flag for him. he's not seeing it at concerning levels, but that's one thing he's watching for. europe is about to close, closing in on some 7% gains for the week. simon is at post 9. >> this is another very strong rally as you can see for europe here. partly as a result of the greek austerity vote going through last night in athens and the european central bank surprising to the upside for many. and people able to focus more on earnings and the underlying state of the eurozone economy. to that end we had new car registrations coming through today. you see some of the automakers rising in the wake of that jp morgan saying we're at a fresh recovery high for those and suggesting that you have decent consumer confidence, buoyant

consumer confidence and rebounding retail sales. that's the underlying state of affairs, as far as monetary policy in frankfurt, the european central bank president surprised many by announcing they would increase by 900 million euros, the amount of emergency liquidity to the greek banks. all the evidence suggests the ecb will be repaid on monday. a new temporary loan is in the works and will be signed off or will be signed off tomorrow when urin european parliament agrees to restart talks and said it was unfounded that the ecb had causeded bank run in greece in the first place. jack lew has arrived in berlin. interesting questions about the role that this country and the white house is playing in the restart of european negotiations. perhaps pushing the european into debt reduction where they didn't want to go certainly the germans have been holding out against that and he will meet

wolfgang scheuble as well. and the imf has confirmed its demand that there should be greek debt reduction before they enter any new bailout talks which will start on monday. the united states is the largest shareholder in the imf as everybody knows. back to you. >> simon hobbs, thanks for the update. when we come back shares of netflix hitting another all-time high today. rbc's mark mahaney spoke about it and will join us here. hi my name is tom. i'm raph. my name is anne. i'm one of the real live attorneys you can talk to through legalzoom. don't let unanswered legal questions hold you up, because we're here,

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here's your cnbc news update at this hour. president obama is in oklahoma city this morning, on his way to visiting a federal prison as he continues his push for a fairer justice system. he will meet separately with law enforcement officials and nonviolent drug offenders at el reno federal correctional institution. house democratic leader, nancy pelosi, says the iran nuclear deal will have her strong support. she expressed her backing for the accord at a news conference this morning on capitol hill. taxis are losing business travelers to ride-hailing services like uber. according to a expense management system provider certify. in the second quarter, it says uber accounted for 55% of ground transportation receipts. compared with 43% for taxis.

almost a complete reversal from the beginning of the year. and lance armstrong returning to the tour de france. for a charity ride this time. he set off early this morning to raise money to fight blood cancer, he and english soccer player jeff thomas riding tourt route a day ahead of the rest of the peloton. let's get back to "squawk alley." shares of netflix up about 16%, gaining steam this morning after earnings and subscriber growth handily beat estimates. reed hastings was asked about the next big moves beyond the u.s. >> in every nation we're learning, if you think about it, around the world everybody wants this on-demand internet tv. it's just a better experience than linear tv. so i'm really very confident

that internet tv is going to continue to grow. >> the analysts that asked that question, mark mahaney from rbc capital markets who co-hosted the company's conference call is here with us. mark, thanks for joining us. they want to start on pricing. i believe you guys asked this question last night. how much room does netflix have to raise prices? it sounds like reed hastings was saying i don't want to raise prices in the traditional way and derail the momentum we've got. i want to get people to trade up to paying more for higher definition streams. but at the same time they're spending more on original content. are you comfortable with the business model's ability to continue to work in 2016, given that he's not raising prices in the traditional way? >> there's a lot in that, jon. first is we 0 sr. a price increase going into effect.

it is grandfathered, so we have a lot of subs facing the price increase. our guess is that the price increase is going to go through successfully and smoothly. but that is a risk. and long-term, if you're a bull on the stock and we are on netflix, we think they have pricing power. they're able to offer tiering services and so there pool will rise over time we think it will happen with ways other than just a naked price increase we think they have that power. we like the model. we think it continues to grow. >> if i gave you, if i said to you, i've got a stock, i'm not going to tell you what it is. but it's 60% above its 200-day moving average. would you want to buy it or not? okay. carl, i get the set-up. look, we have been strong and long on the stock. earlier this year we're just long on the stock now we see modest upside in the shares, i want to make sure we don't miss upside by not owning the stock. thatter going to be adding more subs in the u.s. this year than

last year. that tells you that netflix in the u.s., its most mature market. it's still first-half innings, it's not late innings and in the international markets, it's very early innings and in lot of countries, it hasn't even entered the ballpark. there's a lot of potential growth. a lot of things that could go right. that we don't think are reflected in earnings estimates. the market will put a premium multiple on it can you come up with long-term price target upside to where we are today. >> do you think that the subs' number has undue influence over the way the stock trades? at what point do you think that things like free cash flow will start to matter more to investors? >> i think free cash flow is definitely key. it's one of the questions we asked last night. it was a big free cash flow loss number. the question is that what you anticipated? they did do a, they did do a capital raise in order to meet all of these commitments. they're deep in investment mode,

for good reasons, you asked kayla about a subs number. i've heard the critique that there's too much focus on the subs number. this is a subscription business and there's no evidence that the pricing is coming down. it gives you a lot of visibility into the business. subs are more important than any other net emt ric, they should be for name like netflix. >> is there a showdown coming between netflix and the broadband providers? we see our parent company, comcast coming up with a combination of broadband plus the ability to do some streaming on top. and netflix still relies on that pipe being available and people have a big attachment to netflix as a service. it seems like it's going to come to a head even more down the line. >> that's a hard one to call to figure out how that works, there's something symbiotic, people buy broadband access in order to precisely to get access to netflix. these things, there is a win-win here. i would think long-term, the leverage, actually moves away

from the pipes companies, people will find a lot of different ways to get access to that content. they've had more leverage ten years ago than they're going to have ten years from now. the cop tent aggregator, i think the economics work in their favor over time. their streaming margins are rising. >> as we're talking, the emmy nominations are coming out. we've got one for robin wright and kevin spacey over at hou"ho of cards." and the company argues that their hits draw people into the ecosystem. it's hard, it's hard to think of an example where they've had a bust, right? something that didn't play. and they got punished as a result. is that only a one-way win? >> it can't be, carl. you're right. how about marco polo. they spent a lot of money, maybe $100 million doing that show. they announced a season 2

renewal. you can't argue that has anywhere near the kind of hit status as "daredevil," "house of cards." "orange is the new black." and there's a content risk associated with netflix. subs are up they've had a lot of original content shows that have succeeded. that caused a challenging set-up for next year and could raise the bar in terms of can they continue to put out good content. the probability is against them doing that we're going to be very careful as we go into '16 and think about the content. >> you have plotted catastrophe over at amazon. and hulu has bid for "seinfeld." i'm wondering how many players you think the space has room for? >> i don't see anybody else. but facebook may have some play in this long-term. youtube should have some play in this. in the past they should have had a play in this and they haven't.

that was under-executed opportunity for them. and then you have amazon is going to be out there. the one challenge you're going to have is since all of the content is bought on a fixed-price basis, you pay one fee for that content. would have has the most subs can economically outbid everybody else and the gap is widening, netflix is getting more and more subs, they can essentially outbid almost anybody, with the exception of hbo, for content that comes out. it's going to be hard for anybody to catch up. the window is closing for competitors trying to buy content. >> an amazing pop in that stock price today. mark mahaney from rbc thanks so much for joining us. thank you. when we come back, even with shares of apple jumping over 6% in past week, jeff gundlach thinks the stock is still cheap.

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all to grow our economy and create jobs. see how new york can give your business the opportunity to grow at ny.gov/business coming up, 135 billion dollars worth of advice. value investing guru bill nygren is here. he'll tell us where he's putting his money. if you bought netflix when he turned bullish, you would be up 70%. so what is rich greenfield recommending now after the blow-out earnings? we'll talk to him, he of btig and food stocks, when a wall street firm gives eight a buy rating. should you take a bite?

our experts will weigh in. >> i'll take it. shares of apple, having a good week ahead of next week's earnings. yesterday they got this boost of confidence from the bond king, jeff gundlach at delivering alpha. take a listen. >> apple is reasonably cheap stock. i think, given the pe and the cash position all that. one thing that trouble me about companies like that is it's so big. you wonder how you're going to be able to compound your growth at that type of size. and the apple watch, i just don't know if that's going do set the world on fire. think it's been a disappointment. the company generate a lot of cash, so it's cheap. i don't like the compounding factor. but it's not an expensive stock. >> does he like it or not? weighing in is tony saganacci. i believe you put out a note a couple of weeks ago talking

about the apple watch not having the kind of buzz it takes to become a hit product. is the stock cheap or is that justified. is it just not -- getting the momentum that it deserves from new products. >> the stock is very inexpensive. if you look at on a price-to-earnings basis, it looks about in line with the market. apple as a company is different in two ways, it has an enormous cash balance, of 20-$25 per share. the cash flow is much higher than earnings. if you adjust for cash and look at cash flow, the cash flow multiple is more like 10 to 11 times the market. so it's trading for a significant discount. so the first part of the question is absolutely the stock is very inexpensive. in terms of the watch, i think it probably has been a disappointment relative to expectations. but it's really important to

realize this is the first generation, the first iteration and there really isn't a compelling use case for the watch today. i think certainly over time there's a possibility that the watch could evolve to be more of a health monitoring device, have its own connection to the internet, a 3g connection and that could make it a must-have device for a large portion of the population. but right now, it might be 3% or 4% of revenues this quarter for apple. >> last week's selloff, you could argue was related somewhat to japan, to china. now we have burberry saying their hong kong comps were down double digits. why should apple not face the same fate? >> well apple is in a product sweet spot right now. where they're just in the third quarter of having introduced the larger screen iphone. that's really resonating globally. particularly in china, we

believe that apple is really accruing disproportionate share. as a result of the product offering. we'll see what he when the numbers come out. our belief is that moment numb china continues to be very strong for the company and it is a consumer desire to have an apple product and to have one with a larger screen. >> with so little clarity on how the numbers in china could shape up and that being such a good source of growth for apple, do you try to value it going into earnings on trailing multiples? how do you square that? >> i think it's a bit of a leap of faith that the momentum continues in china. on the flip side, the comps don't really get any tougher, our work suggests that there is very strong share gains that are occurring there. and moreover, what we're find something that what's most startling is that more than half

iphone purchases in china are first-time iphone users. and that's suggesting that there's a, there's a population that's really attracted to that device. and our belief is that number doesn't go from being so high to something dramatically lower it just simply doesn't. and that's really the encouraging thing about what's happening with apple in china. >> tony, going to ask what a lot of people think is a crazy question, if windows 10 actually do have a good launch, which a lot of people are hoping for, given what the pc industry is doing, is there risk for apple in the back end of the year, both with mac sales and potentially some ipad sales? >> you know right now, apple remains prince pli an iphone story. at the margin there may be. the iphone is contributing 70% of profits and it's contributing more than 100% of the revenue growth of the company. so everything else at apple has

actually declined from the last year enter a revenue perspective. so the investor debate is squarely on the iphone. and the real debate is that apple just enjoying a pull forward in their products. because they have this great new larger screen. pulling forward demand from next year and we're seeing a big pop this year and the iphone may never grow. or is this really apple winning the ecosystem war and likely to be a sustainable share gainer from samsung? apple has about 60% market share in the high end of the smartphone market. the question is can it go to 80? if it can, the stock is a roaring buy. if it's saturated, the stock is more close to fully valued. >> i'll guess we'll see it play out. tony saganacci from bernstein. emmy award nominations just announced, hbo will be the leader with 126 nominations.

24 of which are for "game of thrones." netflix gets 34 nominations. amazon gets 12. already the outrage is beginning over "empire" which got a couple acting nominations, not for drama. but 24 for "game of thrones," which has never won best drama. >> wow. >> device as many for "game of thrones" as for amazon is getting altogether. but i mean hbo has been in the game a long time. >> 12 is nothing to sniff at. when we come back, the big business of fantasy sports. fan duel's ceo nigel eccles on his company's recent billion-dollar valuation. can a business have a mind?

a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

> fan duel is the most recent company to reach unicorn status with a $1 billion valuation after its $275 million funding round. the company is a major player in the fantasy sports industry. competing against draft kings and now yahoo's fantasy sports service. joining us is nigel eccles, the co-founder and ceo of fan duel. he joins us from scotland. nigel, good to see you again. we call it a budding business in

the intro. but i mean there's nothing really budding about it any more, is there? >> no, i certainly think we're starting to bloom. >> nigel, walk us through the funding round. what do you do with the money now? you got very large companies with a lot of cash. in a business that is your sole focus. what is your game plan? >> sure. so we've raised $275 million. but also a number of strategic investors like turner and nbc, and very obviously google. and our focus for the money is really three things. one is is growth initiatives. and there's a number of those. second is marketing, we've got a product that works, that consumers love and what we want to do is to bring it out to many million more, millions of more players. and thirdly is hiring amazing

talent. like we're transforming the live sporting experience, and we need more great people to help us do that. >> nigel, what's the behind the rise in one-day fantasy sports. >> are we getting, our attention spans getting that short that we can't stick around for more than a day? we want the instant gratification? >> i think it's definitely an element of that. your fantasy sports is still growing very strongly, over 50 million people play it in north america. the point is that daily fantasy makes it more exciting, any day, any tuesday or thursday can be a really exciting day because i'm playing in a fantasy basketball league or a fantasy baseball league. i think what we've done is really taken the excitement of a season and collapsed it down into one day and i think on top of that we made it a really mobile experience where you can do in the bar, on the move. really anywhere. >> nigel, it's interesting to see financial partner like kkr

taking part in a round like this. we rarely see them invest in venture capital. i know they have a new growth fund what were your discussions with a player like kkr like? what do they get out of this? >> you know i think like any financial investor, they say this is a phenomenal opportunity for a financial return. but i think also more fundamentally they believe that there's, this is very disruptive, very transformational for sports. if you look at our player, when they become a fan duel player, they increase their consumption of sports by 70%. that's unheard of. how that will benefit everyone in the ecosystem. so i think kkrc, this is the cusp of a real revolution in sports, they want to be at the forefront of that. >> nigel, how much are you going to pay out this year? >> we're projecting about $2 billion. that's up from about $5, $550

million last year. >> $2 billion that you're going to give away. and the percentage of that, of total revenue, how much do you give away, once you bring in? >> we pay out around 90% of entry fees and prizes. >> question for you, nigel on the product also. one of our viewers says ask why they removed chat this is very much community management. a topic of the day with things going on at reddit. what do you see happening? why did you remove chat? >> you know, so we removed chat about a year and a half ago. it was fun, we loved chat in the early days, it was great way to get, build a community. when we started hitting hundreds of thousands of players, who were on chat concurrently, it was a minefield. so the community management aspect of it gets so challenging, we said it's noncore, and we couldn't scale it you couldn't read chat it was moving so quickly.

so we've taken it away. however, we are looking at other ways of making the product more social. so that's one thing that we're excited about. but chat was fun while it lasted. but we got too big. >> well, the fact that you're in scotland, i can only imagine means it's a global business and i'm sure it's not the last that we've heard from you, nigel, please come back soon, good to talk to you again. >> thank you. when we come back, it's uber against new york city mayor bill de blasio. and while we're on the topic, we are waiting on gop presidential candidate jeb bush do arrive at a start-up in san francisco. he is set to arrive in an uber. which has become something of a lightning rod for presidential candidates these past few days. we'll bring you that moment when it happens. the dow is up 37. can it make a dentist appointment when my teeth are ready? ♪

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wear close to session highs, s&p 2121, the all-time intraday high is 2134. we're just about 13 points away. unbelievable when you consider the set of circumstances the market has had to deal with whether it's been greece, some of the figures coming out of

china and not to mention the earnings, which haven't been too bad. financials at a seven-year high. >> they haven't been bad. it's interesting to see financials that high, since may 2008. despite what we saw from goldman. which continues to be down despite murky earnings from jp morgan. >> intel has turned negative. that does it for us on "squawk alley." now over to headquarters and scott wopner and the half. >> carl, thanks so much. welcome to the "halftime report." let's meet the starting line-up. steve weiss, joe terranova, jim lebenthal and pete najarian. big bite, why one wall street firm says to load up on your favorite food stocks. do our experts have the same appetite? value star, oak mark's bill nye gren is with us with the two names he says to own right now. we begin with the best performing stock on the s&p at this hour. buy by now