good monday morning. joining us today, the co-founder of ala ventures. also, the ceo of indigo go. back after a long vacation. honeymoon's over. we've been wanting to see that. >> real life begins now. >> the dow's up 175. shares of pandora have had our attention after being halted not once but two times since the open. our bob pocsni is on the floor. >> the way halts work, this on all the exchanges, if it moves

more than 5% in a rolling five-minute period, than it can be halted. it was halted twice, in fact, as you heard there from carl. it was trading around $19.37 earlier in the morning. then suddenly over $20 and that's what triggered the first halt. that was five minutes. then there was another one, five minutes. pando pandora, trading on good volume. 12 million shares at 20.93. that's up about 6.25%. the key issue is why did it exactly happen. i can tell you what's going on generically. pandora pays money to stream its songs. it pays royalties. the copyright royalty board, the crb, the organization actually sets those particular royalty rates. the royalty rates of course the people in the industry want higher royalty rates. there's been some speculation maybe they would raise them for next year. i don't know when that ruling is. i understand it's supposed to come in the next month or two. but apparently it hasn't happened yet. there's speculation they may

raise the rates. david was talking about this a little bit earlier. there were other agreements that pandora had entered into and crb can now use these other agreements as benchmarks for setting the rates. which obviously pandora wants to set lower royalty rates if it can. i believe it's about a sixth of a penny per stream. .0014 or 15. that's pretty small amount. the industry wants to raise that. i've heard .0025. so we don't have a ruling on this but we have a lot of speculation. some of it is that it may be favorable, at least at the moment, to pandora. again, up 6% for pandora right now. guys, back to you. >> we'll watch that. thank you very much. a big story in tech. apple has discovered a major security breach on the app store. >> so about 40 apps with malicious code were discovered on the app store that could

potential limb paimpact hundred millions of users according to an analysis. apple has since removed the apps from the app store. the security company says the list included many popular apps in china including messaging app we chat which has more than 500 million users as well as the ride hailing app. we chat says the security flaw already fixed and a new version of the app released. but how did this happen? well, apple, remember, provides developers with a set of tools to create apps, including one called x code. in china, some developers used a counterfeit version of x code because it downloaded more quickly. apple and its hardware does have a system in place where it can detect corrupted code. but if developers disable that warning, they can create apps on compromised software. the compromised apps once downloaded could prompt fake alerts or exploit vulnerabilities in the ios

system. in a statement apple saying it has removed the apps created with this counterfeit software and it's working with developers to make sure they're using the right version of x code. importantly apple says it is not clear whether any user information was actually stolen here. switching gears, in better news for apple, the tech giant also gave an update this morning about ios 9, seeing the fastest adoption ever, with more than 50% of devices already using the new operating system. guys, back to you. >> thank you very much for that. what's the most important to know here about being targeted? >> i was able to speak with a chinese company that was a victim of this. and the message was, this isn't that big a deal. they were able to get a new version of their app up within minutes. they aren't even sure that the purpose behind this hack, whatever, was done with x code, was done malicious. it was perhaps just an

experiment. so they're trying to downplay it. the fact it was caught and it was a relatively quick fix is a good sign. on ios nine, that's really fast adoption. you do hear about glitches. those are an issue. but this, we're talking tens of millions of downloads in a very short period of time. so you're going to have some that go wrong. >> where x code and the security is concerned, i think what's concerning to me is the fact that the news of this breach, thing news of this counterfeit version of x code, was determined by a third party, palo alto networks. that stock up 17% in the last month. when retailers get hacked, we find out from the blog. what does it tell us about these companies that we're finding out from other people that there are inadequacies in the products? >> the big takeaway is it's only a question of when, not a question of if. apple has all the security protocols in the world, all of the resources at its disposal, yet it gets hacked.

that's what we're seeing all across the internet. so it's unfortunate but i think we should all expect to be hacked at some point. >> apple has always been thought of the closed guard, more security, less of the malware. to see something like we chat get broken into is really concerning. also the global nature. i don't want to be the one to create conspiracy theories but what is the reason so many of these are chinese huge companies? is there any support that was anywhere given? i think there's still more of a story here to be told. so we just got to find out. >> i think it has to do with where the tools came from that some developers were using to create the apps in china. they wanted a faster download so they used this version of x code that they thought perhaps was just mirrored but actually it had some other things in it that turned out to be corrupt. i think that's the issue with china specifically. not everybody in the world is looking for that particular site to download this incorrect version of x code. >> yeah, comes on a week where

the chinese president's coming to seattle. no firm list of attendees but apple has invitations to be there. the company rolling out a new ad for the al muapple music at the emmys last night. >> you know how long it took me to make this mixed tape? a play mix is made for you. >> it's like you have a boyfriend that makes you a mix tape in your laptop. >> wait, watch what happens next. >> this is incredible. ♪ >> nice to see those actors there on a big night for viola davis. >> pitch perfect. the story last night was it was a big night for black women at the emmys. apple had this ad ready. and it strikes me, people like to say, oh, apple wouldn't have done this ten years ago. apple wouldn't have done that 15

years ago. the apple i started covering in 1999/2000 would not have put out this ad. i talk to apple executives over the years about diversity in their market, asking why there was so little of it. this is a new apple. now that apple is the biggest company in the world, this is significant. this is a significant cultural moment that apple had this commercial with these celebrities, these women, trying to reach a broad global audience. no question, that is what they're trying to do with an emmys -- >> you had the drake and future mix tape coming out last night as well. it is a different company. with different companies under the fold. >> but the marketing says a lot. apple's marketing has always been crafted from the very top. apple has been very choosy about the images, the people in particular, celebrities who represent the brand. for three black women to be representing apple's brand in this apple music ad, it's important. >> i thought the ad totally nailed it. and what isn't told enough is the director was anna

deverneaux, the director of selma. the first of three ads that will be coming out with this group of people. they'll be more talk and more excitement. >> i think on the timing front, not surprising, the 90-day free trial is expiring. so we've got three commercials this week. we've got drake and future. really ramping up the marketing efforts for spotify in a big way. >> it was television's big night at the emmy awards. if you missed any of andy sapburg, take a quick listen. >> i watched every show ♪ ♪ every single episode ♪ i'm all caught up ♪ and i feel superb ♪ and i watched every show ♪ i'm overjoyed because my dvr says you watched every show ♪ ♪ hey, jon hamm ♪ i watched your show "mad men >> when is the last time you showered? >> over a year. there's no shower or toilet in my viewing bunker. >> taking on what some are calling peak tv. plenty of emmy nominations for netflix and amazon but hbo still

the brand to beat. the network cleaned up. game of thrones the all-time record for most wins by a program in a single year with 12. hbo first with 14. comedy central, a diftance second there with abc, amazon and netflix behind. it really was -- time warner was up today but hbo had reason for it to be. >> i'm the least well read of my friend because i'm like who is this that keeps on winning these awards? >> people seem to be frustrated with how much veep won last night as well. it's interesting to see those numbers. hbo taking more than a dozen. abc, the only major network up there, only taking two. and when you heard some of these actors and actresses and writers thanking hbo, thanking amazon, they were thanking them for the leeway they were given as artists to pursue stuff that wasn't deemed necessarily safe by the net works. is that going to benefit these guys in the long run? >> i think the big news was

streaming last night. you had netflix with 34 nominations. almost as many as fox. only had 14 a couple of years ago. i think it's fantastic. we're seeing the democratization of what was heretofore an oligarchy of a couple of networks. it will be the number two player behind espn. its democratizing, it's great. the emmy nominations and the awards will follow suit. >> on. there was a mention within the next 20 years, all of tv will be on streaming, will be on the internet. seeing amazon and netflix be able to get so many nominations is a step in the right direction. the fact amazon was so quick to nail it with transparent. for netflix to go from 13 to 34 nominations in two years. yes, they didn't win for one of their best series. but just the fact they're there so credibly is a step in a huge direction. >> also the way they changed voting structure of the emmys.

including people who might not have just voted the old way, the old tried and true, has obviously made a difference. very interesting. >> we're getting some word from reuters that a -- a statement from pandora is out, saying, quote, that they are pleased that the copyright office affirmed the admissibility of pandora's agreement with merlin as a valid benchmark in the copyright royalty board proceedings. pandora's off the ehighs of the session but still up after some crazy action in the past hour. >> i think it's important. i still listen to pandora. i have apple music. i listen to beats one radio for a while. it got kind of cumbersome for me it pandora still has great technology at the core of that music genome project. you know, perhaps the investors that have believed in that. we'll see where it goes from here. it's very volatile stock. >> thank you for joining us today. >> all right, let's get a check in on the markets.

close to session high. the dow up by 175 points. the s&p up by about 19 points. the nasdaq up by 43 points. that's good for just shy of 1%. the dow gaining by more than 1%. all major averages pretty much making up for slight averages we saw last week. shares of alibaba falling after the lockup period of about 63% of its shared, about $105 billion, expired on saturday. that means the company's biggest shareholders can start selling today. alibaba of course now entering its second year as a public company. shares are down about 2%. among those shareholders, yahoo! and the executives that could essentially now be sellers. go pro falling after a report in barons over the weekend said shares could decline another 28%. currently at 33 .19. its 52-week high, $98.47. it's already down about 5%. 5.5% today. the article said it could be a

one hit wonder akin to the palm pilot or the flip camera or the family sedan. >> yeah, the old blackberry references. that's not helping the name. already been through a lot of pain as we know. when we come back with a valuation of over $11 billion, it's the next foreign company you need to pay attention to. a top executive will join us live. plus, there's too much money for too many start-ups in silicon valley. so says our next guest. and disney making a major investment in virtual reality. more on that when squawk alley continues. trader group, they work all the time. sup jj? working hard? working 24/7 on mobile trader, rated #1 trading app in the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of the other competitors do in desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivative pricing model, honey?

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the rally this morning starting to gain some steam. dow's now up 180. the take is part of this is a response to crude which is up about $1.25. also a demonstration a big part of friday's sell-off was more related to exploration and not a reaction to the fed. announcing a new funding round this morning from some powerful media companies. julia borsten live in san francisco with more. >> that's right, announcing a $66 million round of financing from some of the biggest names in media. ceo telling me he wants jaunt to become the service provider for live virtual reality. did distribution to any vr

headset. >> one of the important things in terms of vr, making it a mainstream technology, is to give people content that can really relate to. she has a lot of experience developing and producing could be content user really want. >> three content partners, the walt disney company, caa and participant media and china based capital partners. they're joining others along with the madison square garden company, google ventures and paul mccartney. he says he wants jaunt to become like a hbo or netflix for virtual reality. its app is available in i-tunes and google play. into bringing its strategic

investors into the new dimension. last week, partnering with abc news to shoot an immersive piece in syria. >> all right, julia boorsten, thanks. an unexpectedly decisive virus in greece yesterday. we are at session highs. dow's up 187. we will get the close in europe and see whether that will be determining here when we return. care of my heart.

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flip card is india's largest e-commerce company. with 75% of the company orders coming from mobile apps what does this mean for e-commerce in

india? thie pduct officer joins us now. give us an update. it's been a few months since we last had you. we've been talking about the growth for the primary platform. now the returns being an important -- fast returns being an important new future that's arriving in e-commerce with a competitor of yours promising to deliver refunds for returned items within i think an hour of actually receiving the item back. what are the key competitive points, leverage points, right now? >> well, i think the most important one is mobile and how do you deal with it. you mentioned about 70% of all transportation saxes are coming from mobile. about a year ago in july 2014, we had about 15% of transactions coming from mobile.

so from -- in a year we've gone from 15% of user base in mobile to 70%. that kind of revolution is almost unforeseen. you have to figure out a whole new set of products to actually deal with that. returns is just another part of being mobile. we actually have instantaneous returns. we don't wait for one hour. we'll give it to you as soon as we pick up the return from you. it's a very competitive market. focusing on what people really do with mobile phone to get it right. we're building a lot of features in that wing. >> smart phone adoption obviously a huge part of this. you've told us before that growth and success for flip card is all but guaranteed because only about 10% of india's population actually had a smart phone right now. we heard a few weeks ago from tim cook talking about activations of iphones in china, that they were holding in there, even in this weakness. i'm wondering what you can tell us about india's smart phone market and what trends you've been seeing in the last few months. >> it's been absolutely crazy.

millions of people are coming online. i'd say iphone is a reasonable factor but i would say the android devices are a much bigger factor. low cost android devices are flooding the market. when people get these phones, they want to message, they want to share and they want to buy. when they want to buy the default method is flipkart. i think i mentioned this before, e-commerce is only 1% of indian commerce. so a long way to go. people are using it in extraordinary ways. launched a couple of mobile features recently that allow people to, for example, look at a piece of clothing and just take a photo of it and we will basically show you from our inventory if we have that particular piece of clothing. so visual search. the ability to message while you're shopping and talk to your friends and family. all of these are very interesting trends that are popping up at low cost smart phones flooding the market.

>> what's the environment looking like for recruiting engineers? has it gotten any less competitive or any more attractive for you since the downturn of the market a couple of weeks ago? >> you know, flipkart has always been in an extraordinary position. as a market that has almost infinite growth in front of it. it's been an area a lot of people have been interested in working on. we've had very little difficulty having really good talent across the world. in fact, our focus has shifted a little bit from actually just looking at indian talent to looking at global talent. we want to get the best talent across the world. in fact, today, we announced a few new hires from a variety of different companies across the world who are coming onboard to work with us. >> so as you continue to search for talented ed aand look for expand, how should we expect to see that shape up in india? do you think there's room enough for multiple e-commerce

competitors for a time to come or do you think a dominant player or two will become even clearer? >> you know, there's a couple of different trends to look out for. typically in developed countries, you see e-commerce be about 8% of all commerce. in india it's about 1% today. so the market definitely will grow at least 8 to 10 times for e-commerce. in india, you have some very interesting infrastructural issues also. because of the lack of roads in the country, i say e-commerce will grow much higher. so now you're talking about a company that's pretty significantly valued at .50% of 1% and we probably have a growth of 20 just with the market in front of us. i think that kind of a growth is not just about one company. there will be many different e-commerce companies who will do well. there will be grocery companies.

furniture companies. high-fashion companies. even our own is in that. i am very hopeful flipkart will continue to be the largest. >> those are some pretty big targets and possibility you lay out for growth. we'll see how it develops. from flipkart, thank you for joining us. >> let's bring in simon. greece one of the only areas in red. >> europe has bounced back nicely from the janet yellen inspired losses we had on friday although we are off our highs. the big focus is what's going on with v.w. in germany. one of the great behemoths. down 18%. it's lost about -- in order of magnitude from the allegation that it deliberately fixed its software systems so that it could, in turn, fix the emissions testing. it's lost $18 billion of market cap. which is roughly what its

maximum fine might be. they have all been suspended or -- at least suspended from sales as things stand at the moment it the problem vw has. portia is the parent company. the german company wants to meet with the ceo and the european commission also said it is in contact with vw. the question is can the ceo actually survive this onslaught, particularly if you get tougher diesel emission standards across europe, specifically in response to what is happening here. it's interesting the other auto stocks have fallen. though many of them are off their earlier lows as you can see. oils are down. basic resources are down. there was a report in the sunday times in the weekend that anglo american might need to cut its final dividend. i should mention that zurich financial has also abandoned its bid for royal in the uk as they

found a loss with their own general insurance division and they seek a review there. you can see rsa down about 21%. meantime, alexis stsipras is bak as greece prime minister. allegedly able to swerve the left from his own party from that parliamentary body, if you like, that he had there. immediate problems is the refugee crisis. many refugees have greece as their first point of call. and obviously the recapitalization of the banks. so he has his work cut out. back to you. >> thank you very much, simon. when we come back, some harsh words for start-ups from a top vc and co-owner of the golden state warriors.

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good morning, everyone. here is your update. secretary of state john kerry increasing refugee visas in the u.s. to 100,000. up from 70,000 by the year 2017. he said the u.s. is exploring options to eventually increase the limit beyond that. so far, 4 million syrians have fled. along with hundreds of thousands from africa and the middle east.

meanwhile, croatia has set up a migrant reception center that will register migrants before arranging for further transport. about 27,000 people have entered croatia since last week. tomorrow, european leaders are meeting to come up with a unified response to the migrant crisis. one of the worst wildfires in california's history has wiped out another 162 houses. bringing the total number of homes destroyed to 1,050. most of them are in northern california. and trump is penning a new book. he says he will outline how to restore america to greatness and reportedly lay out his views on key issues such as immigration, health care and national security. the currently untitled book is set to be published on october 27. that's the cnbc update at this hour. back to squawk alley. carl, that should be one interesting book tour. >> i know we're going to read it. thank you very much, sue

herrera. with sky high valuations, unicorns have been funded weekly. our next guest says these could be insane canary in the coal mine rates. welcome back. it's great to have you. >> great to be here, thanks, carl. >> we've been talking about bubble-type conditions, cash burn rates. you have some choice words for these kind of entrepreneurs who are using cash poorly. we can't really use the wordings that you use. >> the statement was to articulate the fact when we started to look across what was happening, we saw a lot of these companies that were raising these massive amounts of money were allocating it to things that had no correlation to enterprise value. they were spending it on buildings. they were spending it on incremental perks. we just felt all of this was wasteful, not really driving the company to any form of escape velocity.

to me it was a wake-up call to ceos. you have this money. let's use it to hire people. and to get your company to the place you want to be. not on tenant improvements that will not be around if you go out of business. >> if i'm an entrepreneur, my defense is if i'm going to retain these people, it's not just about the paycheck or the bonus or the equity, i've got to stock the kitchen with 12 different types of cereal and i've got to have a building in a nice location. >> well, what's interesting about that, when you look at where the value's been created historically in silicon valley, that actually hasn't been the case. if it's oracle in redwood city or facebook or intel in santa clara, great ideas win. apple and cupertino. we need to separate ourselves from the window dressing we think drives value and actually product market fit and ingenuity that does create the value. >> you were at facebook for quite a while. it takes a charismatic founder and leader to be able to lure

people, despite some of the perks and invitations they might be getting from elsewhere. is that the issue at this stage, that founders, entra pra irins need to develop more than just throwing money at people in order to attract talent? >> well, i think what that does is, like, when you're forced to actually focus on the quality of the offices or other things other than the product, i think what you're really seeing is we don't have a great product. you're going to spend all kinds of things on things that don't matter. another example, why do all these people go and work for alibaba in china? or why did all these people deto work for microsoft 30 minutes outside of seattle? it's because the quality of the idea is so fundamentally big and impressive. when we reduce ourselves to selling on window dressing, i think we're basically saying we don't believe in what we're doing. >> so companies that basically deliver products to people who already have everything they

need but do it more quickly and more efficiently, do you think that those businesses are just less noble or do you think there really is not a market for something like that? i'm thinking of a -- >> it's not clear to me whether those businesses will win or not win. what is clear to me is when those businesses get funded, we also have to make sure other types of businesses get funded alongside of it as well. i think right now is a glut of capital has largely gone into san francisco around a very specifically focused millennial set of business models. i think we need to take a step back and ask ourselves is that the totality of what we're capable of, and make sure there's a breadth of things that touch more than just that class of individual that's getting funded. >> what's the best example you've seen that we are in fact moving beyond that limited scope of ideas? >> well, you know, there's a fantastic company we're not investors in but spending deep amounts of time who have built this incredible array of air

pollution sensors and are deploying them to try to get the ground truth on some really important data that drives massive longitudenal health impacts. these are businesses if you solve air pollution as an example can be a business. they have not been able to get funded. they're trying to raise a large round, hopefully we're part of. it speaks to the fact those kind of quality ideas need to get a seat on the table. >> we had jason on i believe it was last week and he argued that the punch bowl has, in fact, been pulled. the party is over in the bay area as far as a lot of the excesses. and investors are buckling down. your commentary seems to suggest maybe there's still more bunch. what are you saying? >> i suspect there's way too much capital in the system. i think this party is not going to stop for a while. i think companies will continue to get overfunded.

many companies that shouldn't get funded will have a much longer half-life than they probably should. it's just up to us to actually have some discipline. internally within our firm what we say is how much are we spending on noncore essential things, how much are we spending on things that actually drive the enterprise value. we say, let's look at this as a 50 million or 100 million investment. because when you look at it in the latter way, you have this crawl of capital that just kind of leaks into these companies that keeps bad ideas around a little bit too long right now. >> finally, are vcs out there beginning to freak out about the possibility their exit door might be getting smaller or closeded? >> when you look at the data, the exits always exist for fantastic businesses. the other part of what i was saying last week is we've also now engendered way too much capital around this rhetoric of never going public. the reality is there's a massive swath of fantastic businesses

that can and should go public sooner the better in my opinion because it gives you the currency and the notoriety and the credibility to spend time with people like you, for them to get to market dominance. they have this responsibility to get there. if they really believe in the quality and veracity of their idea. i think the ipo window is always open for fan of the thattic businesses. again yet another marker of how founders will separate themselves in terms of a class of people who are destined to win or inner its of a class of actors that just want to focus on the window dressing. >> that's a good point and a difference between -- please come back, good to talk to you. thanks again. when we come back, stocksters are green but certainly off the highs of the day. about 12 1/2 points off the s&p. what are you watching? >> there's been much debate about the fed meeting and statement about the exact perimeters of the federal

reserve and its system. i will give you 57 trillion reasons why this discussion needs to get much more aggressive on the pillars of debt after the break. awe believe active management can protect capital long term. active management can tap global insights. active management can take calculated risks. active management can seek to outperform. because active investment management isn't reactive.

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see car insurance in a whole new light. liberty mutual insurance. let's get over to chicago and check in with rick sant tel. >> there's been discussion about the general transparency, success failure and definition

even of transparency of the fed, but also the notion they went trident in terms their charter. congress gave them the ability to monitor on two pillars. the first pillar being full employment. second, stable prices and stable being the operative word. that has somehow been siynonym o 2%. the third pillar that doesn't exist that may need t est but needs a whole lot more honesty associated with it is that third pillar international. we had ira harris on today and he brought up a mckenz yie stud that ended in the 2014 time slot. it's a bit old but i think the trends in this report he referenced are compelling, especially with the discussion of janet yellen and company not normalizing rates. basically what it said is, debt, global debt, outpaced global gdp growth. 57 trillio$57 trillion.

57trillion is the amount that we have more on the debt ledger than we did in the second quarter of 2007. let's look at where it all happened. house hold debt was 33. government 58, was 33. financial, 45, was 37. but here's the interesting aspects of this. first of all in household, there has to be an asterisks. because even though we've put all these developed, emerging economies together, there are four that jump out that have had improvements on household debt. the united states is one of those along with the uk. that's why central banks have been doing a lot talking about normalizing. a bit short of action. ireland and spain are also included. so that really points to the presence of japan on the debt meter. at the crisis period of 2007, 7

trillion, it is now a 28 trillion as of mid-2014 when the mckenzie and company's report that i'm referencing. why does this matter? because servicing debt that's growing faster than gdp growth is creating not only issues, it's creating spirals. if the united states doesn't quit being a follower and quickly turn into a leader, i don't know what's going to break this spiral. the biggest conclusion i've come to after talking to many since the thursday fed meeting is that it's going to hurt a bit. and to think we're going to do all this in a fashion that's going to be painless doesn't make much sense. kale kay la, back ton you. you might know zen payroll from its a-list investors. now the start-up is changing its name and adding a key feature along with it. the ceo will join us live. opportunities aren't always obvious.

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in a move to further disrupt how small businesses manage benefits, the company zen payroll is now taking direct aim. gusto, as it is now known, is adding health benefits and workers compensation to its payroll services questi s which already being used by small businesses. co-founder of gusto, josh

reeves. i'm saying it right, correct? gusto, not gusto, it's not italian? >> gusto, inspired by our companies, all that emergennerg have to serve their customers, that's what we want to embody. >> tell us why you felt like now is the right time to start adding worker's comps and additional benefits? >> absolutely. this change has been in the work since we started the business about three years ago. to understand why we're doing this, you know, this industry we're in is called hr, payroll, benefits. we don't come from that industry. it's an industry today littered with terms like human capital management, human resources. i would very strongly say humans are not capital, humans are not resources. our approach to it is to rethink it from the bottom up and this is one step in the journey. >> if you are one company, it's better to have one single vendor you're working with for some of these services, rather than multiple vendors. but it is curious. because we mentioned your

leading competitor has gotten into payroll. so it seems like the two of you are really going at this from the same strategy. what's different about what you're doing? >> i would say our approach stems entirely from what's best for the customer. when we look at surveying a bakery owner or flower shop spread across the country, our focus is on giving them the most exceptional service possible. and being able to provide this broader gusto service to that client is really what they've been asking for since day one. and so we're excited to make progress in that journey. >> josh this looks a lot like business application software of yesterday. but for the cloud era. we look at what happened with peoplesoft and, you know, how oracle snapped that up. isn't that just happening all over again? is it really that new? >> i would say the biggest change happening now is building human software. again, think of the movie office space. that's not a very good

caricature of corporate america. people today are wondering why are they working so hard. are they getting fulfillment in the work they're doing. what is the purpose of a job. so this is the topic we're connected to. we're happy to go abstract, all the tax filings, insurance, documents. at the end of a day, what is the business -- >> you're not delivering the meaning of life, you're selling software. >> what we do is help you hire employees. you can celebrate someone joining your team. that human flavor, not just the software process itself. >> are you leveraged to companies being created or companies adding a 50th employee or a 100th employee? what's the line that's meaningful to you? >> it has evolved over time. we started with the ambition to serve every company in the world. >> very small businesses? >> starting very small. 2 1/2 years ago, it was really 1 to 5-person businesses. today it's 1 to 100. we have all ranges and sizes of

all industries across the country. in the next few years, 1 to 500 will be our sweet spot. >> at the end of the day, it really comes down to not only service but price. i spoke to a small business owner this morning in the investment industry who said she's working with adp because it's $20 per employee per month. workers comp. all she needs. also insures the withholdings. if there's an error, adp covers it. how competitive are you on price and how much does it hurt your margins to go against a company with a scale like adp? >> one of the biggest advantages we have is being a modern provider. a lot of our processing is done by software. we are much more affordable. our customers tell us that time and time again. we can provide a more accurate service as a part of that as well. >> we appreciate you being here. best of luck with the expansion. i know we'll talk ton you soon. >> it's a pleasure. >> josh reeves. i was about to say the ceo of

zen payroll. the ceo of gusto. >> when we come back, the nasdaq bio tech index. i love you. love you too. ♪ one minute. ♪ hi. hi dad. we need to do this. letting go... it's a little easier when you've saved for college, with state farm.

bio tech's falling on a pretty good tape and a lot of today's decline might be in thanks to hillary clinton. >> just about 45 minutes, maybe an hour ago, we started to see the index take a hit. that's right around the same time, down 2.6% now. that's right around the time hillary clinton tweeted out a "new york times" story about a drug whose price was increased 5,000 percent after its company touring pharmaceuticals acquired it. without really changing the drug at all. she tweeted a link to that story and said price gouging like this in the specialty drug market is outrageo outrageous. tomorrow, i'll lay out a plan to take it on. now, i've been talking with analysts and industry experts today who have been saying that hillary clinton's candidacy could potentially put a damper on these high drug industry valuati valuations. folks are worried she'll advocate for the u.s. government to have the ability to negotiate on drug prices and that could really put a damper on this

market. >> a list of the losers this morning. there's biogen, bristol myers, a bunch of others. thank you very much. we'll keep our eye on that. some of the other notable losers. i like a go pro. argued that stock could go to 25. this most recent product offering is underwhelming. something we discussed last week. >> this is a hardware company with a valuation around $4.5 billion. it's had a high valuation all along. if you believe in this company, you believe they're going to be able to do something that smart phones can't do. it's a fundamental question again about the direction of where this company's headed. don't forget their investments in virtual reality. and software being a key piece of that. >> and that fourth quarter for go pro is its most important quarter going into the holidays. a london-based chip maker is

buying the firm for about $4.6 billion. leading the mid caps today. certainly something to keep our eye on. >> baba. we ekt xpected some weakness to. we're certain lly getting it. is it going to be back? >> it's good to be back. >> it's been too long. our congratulations once again. let's get over to hq and the judge. all right, guys, thanks so much. let's meet our starting lineup for today. dan greenhouse, chief global strategist. our game plan today looks like this. the analyst who upgraded the big bank is live on why he thinks it can thrive. bad side effects. why the soaring costs of some drugs sparking outrage today. the companies in the cross hairs. what all of it means to your money. we begin with thar