good morning. it is 8:00 a.m. at disney headquarters in burbank, california. 11:00 a.m. here on wall street. and "squawk alley" is live.

♪ last night she said oh i feel so down ♪ ♪ when i feel left out ♪ so i, i turned around ♪ this for sure good monday morning. welcome to "squawk alley." carl is off today. with me, john fort, holding down the fort at post nine. joining us also, the co-founder of aol ventures, now president at confide. a lot to get to in the tech sector. the markets are making up some of the losses from friday. we had steep declines on what was the second highest volume day of the year, the dow fell more than 350 points. crude hovering around $34 a barrel which continue to be one of the leading stories in the market. bob is on the floor with more. as we are counting down, bob, to the end of the trading year. >> yes, and we're up, and we should be up. the fed has made its decision. options exploration is over.

we're in a new oil contract. this is the seasonally strong period. particularly the time when you pick up the beaten up stocks this year for possibly gains next year. the problem is this lower for longer theme is really weighing on the markets. so what you want to do is look at the most beaten up sectors recently and see if there's any interest, any buying interest. let's look here. the transports in the russell 2,000 are dramatically oversold in the last few weeks. it's encouraging in the big indices, those are the ones that are leading right now. the other beaten-up area, industrials, materials, energy. industrials are leading. materials in the mid. that's encouraging. and energy is lagging because oil can't get traction. there's the big problem. no traction in any of the commodities at all. although copper has been up last couple of days. extremely oversold sectors where you would see some sort of bounce or anticipate them. we're not getting them today. that's exploration production,

service, even the steel group. all of these dramatically oversold. not just in the last two weeks, but all year. nothing really moving in these particular groups at all. kind of disappointing at this point. that's because that seasonable by the beaten up themes is being discarded in favor of the lower for longer idea. that is commodity prices will remain. they don't have to drop anymore, they'll just be lower into 2016 and the first half of the year. take a look at energy stocks. all right, it's nice chevron and exxon are not down on the day when oil's down a little bit. outside of that, with oil down, if you look at the usually exploration of production names, your pioneers and your concho's and your continental resources, they're all down about 3%. so, is it encouraging that the biggest names are up fractionally? i guess so. outside of that, it's pretty grim in the energy space. similar story for materials. there's some fractional moves to the upside. joy global got an upgrade.

technically it's a industrial, it's a mining stock. minor moves in southern copper. u.s. steel's had a horrible year. i would call this slightly on the encouraging side at this point. remember, most of the material names are down 20% to 30% on the year. we'll see if this holds up. we need 2 to 3 days of a trend before we can say people are picking on the carcasses of these beaten up groups. >> and then you realize just how far we've come. bob on the floor for us. apple shares are up slightly today. 60 minutes doing a deep dive on the company last night. including a rare interview with ceo tim cook. they talked about the iphone, the apple watch. charlie rose asked about whether a car was in the works. they took an inside look at johnny ives' secretive divine lab. some interesting comments came on political issues, namely taxes. here's what tim cook had to say. >> this is a tax code, charlie, that was made for the industrial average, not the digital age. it's backwards.

it's awful for america. it should have been fixed many years ago. it's past time to get it done. >> but here's what they concluded. apple is engaged in a sophisticated scheme to pay little or no corporate taxes on $74 billion in revenues held overseas. >> that is total political crap. there's no truth behind it. apple pays every tax dollar we owe. >> it's a familiar line for tim cook. he said as much on capitol hill during hearings on this very issue. the tax code he says, john, written for the industry age. he's not the only ceo that's critical of it. >> yes, he's clearly very defensive about this. he came out very strong. i agree. this is a criticism that's been levied against most major companies. certainly a lot of tech company, amazon, microsoft, et cetera. i think he's right. we need to make sure our code is not only relevant but also current. and that there's this natural

tension where a ceo has a fiduciary responsibility to ensure the revenues and the profits are recognized in as tax efficient way as possible. >> for fiscal 2014, apple's fiscal year ends before the holiday quarter, to be fair in comparing this, i went back a year. apple paid about $14 billion. that's more than microsoft, intel and google put together, okay. for the next fiscal year, which ended a couple months ago, they paid $5 billion more than that. so throw in facebook and a couple of other companies. that's because apple is making stuff, not just software and services. tim cook is absolutely right. the tax code was made for the industrial era. regardless whether you think they should be paying for taxes, they should be forced for some odd reason to bring back taxes on things they sold overseas.

they have employees overseas. more employees overseas as many companies have in the u.s. why should they? just in terms of the tax dollars they've paid, it's astronomical compared to others. >> they are a bigger company too. >> two-thirds of the business is done overseas so this is somewhat reasonable. he said also later in the piece, i want to bring that money back to the u.s. but i'll get hit by 40% if i do. >> it's because they're making hardware and not just selling software. compared to the others, they're just over 6 billion. but 6 billion compared to 13 billion, 19 billion, i mean, it's out of whack. >> an interesting dialogue about encryption. the interview did take place before the paris attacks. before this debate really took on a new life. but he was asked about encryption and about this so-called back door into the devices. he made the point that if there is a way in, somebody, the bad

guys, will find the way in. they still require a subpoena, a government warrant, to hand over the information. cook said if the information is encrypted, it is not there to give. that was pretty interesting to hear. >> yeah, and he's right. the benefit of encryption if you will is as soon as the message is sent, it gets encrypted and it looks for a unique key in the recipient's phone to decrypt the message so it's insuensured the message can only be decrypted by the recipient. i think he's right, the back door is not the answer. if we give the good guys the back door, the bad guys also get access to the back door. our governments s ahas shown w the breaches we don't do a good job of protecting confidential information. >> he said it wasn't a tradeoff between privacy and national security. >> it's a convince argument.

apple said he did say they are cooperating with the government. inappropriate cases. outside of what's encrypted. there's a lot the government can figure out from people's locations. from what they're sharing on nonencrypted apps. i think it would be interesting to take a fuller view of what the government could be doing based on the nonencrypted information available. i'll say it again, it's odd to me the tech ceos are coming out, individually talking about this, and haven't had a combined cohesive message. it's one thing if tim cook said it. it's another if it's tim cook and jeff bezos on down the line. >> shares of disney moving today. they were falling after "star wars" crushed box office records. they're down about 1%. they fell on friday as well. it did earn about $528 million in ticket sales worldwide. $248 million in north america alone. and if you put it in context, it

looks all the more impressive. avatar, which is considered the highest grossing film in history, took in just $85 million in its opening weekend. there's an analyst quoted that says, i don't have enough adjectives in my arsenal to describe how massive this is. but investors don't seem to like it. >> this is three times larger than avatar, the largest gra es grossest film in history. just huge from a "star wars" perspective. some analysts are concerned about espn, which is a very large part of disney. a big issue where they're paying increasing dollars for sports rights. and more sports rights. to try to stave off competition. at the same time, you've got them losing about $7 million paid subscribers over the past two years. those two trends are difficult to reconcile. >> we don't even have china open yet. that's going to open on january 9. >> this is enormous. you think about the value of this franchise. this was the hard part.

actually meeting expectations. and i predicted months ago this would be the highest grossing film of all time. if you don't adjust for inflation. i still especially believe that because the box office competition in january and february looks weak. i'm sorry, i didn't go back to see "avatar" again. i didn't go back to see "jurassic world" again. >> did you go back to see "titanic" again, that's the other one? >> no, i did not go back to see it again. it was a big weekend for "star wars." not least because you watched episode 4. >> i loved it. i'm now going to watch 5 and 6 before christmas day when hopefully i'll go see 7 with my family. but, john, it's so fascinating that it's not even about the movie anymore. let's say estimates say that "star wars" will bring in $8 million in the box office. merchandise, some estimates have $5 billion. >> yes, this is the perfect storm, or i like to call it the perfect stormtrooper. you've got, you know, a storied franchise that's been

successful. you've got new technologies on the distribution front that are making it more valuable. you've got special effects, incredible social media, incredible cross-marketing, both internally at disney and externally. and, you know, i think what this also point also to is how smart bob eyinger was in 2002 when he bought lucas film for $4 billion. a lot of analysts say he overpaid. this to me looks like the instagram of studio purchases. >> do you think it will be enough to overshadow weakness in espn? >> no, espn is a significant part of the disney stock. i think they have some real concerns there. and we need to see a real strategy. there's concerns particularly about 2007 and 2018. i want to see what they do in 2017 to stave those off. >> there has been weakness around some of that certainty. we'll see how it pans out. john, thank you. coming up, more than 400,000 americans expected to get drones this christmas. if you're one of them, get ready

to talk to the federal government. one of the top drone makers in the world tells us what to expect. plus, after a record breaking weekend, how much can "star wars" really rake in at the box office? the president of fan dango join us. as many as 40 million troubles come january 1st. what you need to know. back in a minute.

welcome back. breaking news regarding bmw. the national highway traffic safety administration has fined bmw $40 million for a second violation involving safety regulations since 2012. these violations involve the mini two-door hard top cooper. apparently in 2014, it failed to to meet regulatory minimums for side impact crash protection. at the time, bmw said, you know what, the weight restrictions on there or the weight variations on there were not correct. we'll fix those. well, nhtsa went back and did a second series crash tests in july of 2015 and they failed them again. now nhtsa has fined bmw $40 million. that's a big fine when you look at the number of fines issued by anytinhtsa and the department o transportation. 40 million. back to you. >> the hits keep coming for

automakers. if you own a drone, today is the day you must register it with the faa. this comes as drones are expected to be one of the hottest gifts this holiday season. what if you or your child don't actually know how to operate one? there are schools for that. mary thompson joins us from one in new jersey. hey, mary. >> hey there, john. i'm here at the new jersey drone academy. behind me, what you see is a former drive range that the drone academy is going to turn into a netted facility this spring where people who are 14 and older can come and learn how to fly zones. now, that's timely, given the faa is expecting that 800,000 drones will be sold in the fourth quarter. making it one of the hottest gifts this holiday season. it's a trend that's worrying regulators. who starting today require you register your drones. but it's accelerating to the owner who opened this academy this spring when he taught 71 students. that's the number he expects to

explode in the post-christmas rush. >> i'm expecting probably next year, before june, probably, up to 500 students. >> barns opened the academy following a trip to m.i.t. with his son. it convinced him more needed to be done on education. since he opened the academy's doors in april, the classes, teaching drone operators how to build, program and safely fly drones, have been booked up. he charges $250 per student for four two-hour classes, plus a $25 rental fee for drones the students assemble during their time at the academy. the drone range goes beyond hobbyists. barns is also working with local first responders to train them how to operate drones. he's also working with the jersey city school systems in order to get students out of the classroom, into the fields, to teach them how to get drones up in the air. back to you. >> all right, thanks. literally into the fields. yes. we'll have plenty more on drones coming up. the second biggest drone maker

in the world is going to break down the new regulations later on this hour. up next, tough times for twitter after the stock setting an all-time closing low on friday. it's down again today. we'll take a closer look. so what's your news? i got a job! i'll be programming at ge. oh i got a job too, at zazzies. (friends gasp) the app where you put fruit hats on animals? i love that! guys, i'll be writing code that helps machines communicate. (interrupting) i just zazzied you. (phone vibrates) look at it! (friends giggle) i can do dogs, hamsters, guinea pigs... you name it. i'm going to transform the way the world works. (proudly) i programmed that hat. and i can do casaba melons. i'll be helping turbines power cities. i put a turbine on a cat. (friends ooh and ahh) i can make hospitals run more efficiently... this isn't a competition!

ahh... steve, other than making me move stuff, ces. what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this.

take a look at shares of twitter falling after an all time low friday. that stock still below the price of $26 a share. twitter down nearly 40% year to date. down a whopping 58% from its most recent 52-week high. all-time closing high happened almost two years ago, when the stock closed above $73 a share. this is a go pro-like trajectory. go pro was above 90 at one point. a bit worse slope on that one than this one. twitter having a rough time with user growth and investors don't seem willing to give it a long-term bid until they figure it out. >> the one difference between

twitter and go pro is go pro has long been a very popular short. twitter, people have been reticent to short it because they think that perhaps there will be a product. there will be some sort of bottle of lightning the company will release so they don't feel that conviction. although it does have about 12% to short the stock. >> doesn't seem to have been that lightning in a bottle quite yet. >> trying to trick people into collecting on it. we'll see. we want to draw your attention to the market. they've been sliding since the open. still in positive territory. the dow is up by about 59 points. we only have about seven trades days left in the year. simon is here with more on what we're watching. >> the big news in europe is obviously the aftermath of the spanish election. actually, at the beginning of trade, say 4 hours, 4, 5 hours ago, the rest of europe was higher. there was no contagion from spain to rest of europe. the market in general has

fallen. spain itself, as you can see, is down the best part of 3%. the big news out of the election is it's basically too close to call and that the risk is you get a chronic political uncertainty. basically there are two breakout parties. the liberals on the right didn't get enough votes to form the coalition we thought they would with prime minister rehos' party. now everybody's scrambling around. presumably he will be asked to form some sort of government which will be relatively unstable. if they can get anything through a minority environment where spain still has a huge public debt burden, unemployment at 20%. that's a problem further down the road. particularly if the ecb were to ever stop buying the debt to suppress the yield. you see the way in which the yield shot up. we've come back down from there. immediate mark down right across the board of spanish blue chips. the banks certainly are lower.

a lot of energy stocks. remember those, the power, the utilities. they are also marked down. some are off their lows. interesting today a number of the mining stocks did well. city, raised its price target. and you kind of saw some short covering it appears across the sector. again, that has readied itself back to the mean, if you like. finally, let's look at some of the other movers today. having done the deal with apple, talking about $1 billion of intellectual property revenue coming through. itv, according to a report, might be bought by comcast, our parent company. it has moved the stock, as you can see. volkswagen is off its earlier highs. here in california, they're giving a little bit of an extension on one of the deadlines. the ceo is talking about rotating senior management through various departments.

so it's more or less possible to hide defects moving forward. relatively quiet, apart from spain, which is a real headache for many people. >> interestingly, it hasn't taken the market more broadly with it. >> we will see. simon, thank you. up next, a rare interview with ceo tim cook. a look inside johnny ives secretive divine lab. 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.

i'm sharon epperson. here's your cnbc news update. nato says six of its soldiers were kill and three wounded in a suicide attempt near bagram airfield in afghanistan. nbc news reporting american soldiers were among those killed. the taliban claimed responsibility for the attack. jpmorgan chase has agreed to pay $150 million to resolve a securities fraud lawsuit by investors over its london whale trading scandal. that caused $6.2 billion in losses. the settlement disclosed in papers filed in federal court on friday. gop senator lindsey graham is ending his presidential campaign. the south carolina senator posting a video saying he had run a campaign to be proud about. it focused on national security. the 60-year-old graham is an air force veteran. the u.s. postal service says

today is going to be their busiest delivery delay of the year. as it expects to handle 30 million items. 15 billion pieces are expected to be delivered for the entire holiday season. a 10.5% increase over a year ago. that's our cnbc news update. let's get back to "squawk alley." thank you, sharon. i spent a long day waiting in a very long line yesterday to mail my packages. i imagine a lot of people are doing the same. apple acting much less secretive than usual last night. the company allowed cameras into rooms where top executives meet, where new products are designed and new store concepts are tested. so is this a new kind of aprille that we are begin to see? andy cunningham with steve jobs' pr rep, now the founder of marketing firm cunningham collective. it's great to see you. >> thanks, great to be here. >> tim cook said apple is probably more secretive than the cia but the cia wouldn't be seen

pulling back the curtain to this extent. >> i don't think there was anything revealing, but it was interesting that they choose to do this. there was a time back in the day when we wouldn't even have taken the call from "60 minutes." today with apple being the world's most valuable company, it's really important they extend a little bit of themselves out to the people. and i think this was a fabulous way of doing it. and obviously they work very closely with "60 minutes" to make sure it turned out the way they wanted it to turn out. >> one piece of the company i think piqued a lot of curiosity. this monday morning executive team meeting. attendance mandatory. what can you tell us about this meeting and what sort of things get discussed there? >> i think that's the engine that runs the company. so obviously it's important that everybody is there. and there were always meetings like that at apple. i think they've just continued the tradition. i think it's a positive thing for apple that they do that. it was great they showed the

people as real humans. >> how much of this piece from apple's perspective do you think was about branding? it's the holiday season. people were thinking about do i really want to buy an apple product for this person in my life, what will it say, what about the overseas labor practices, are they paying their taxes? do i like this company? was this maybe an attempt on apple's part to say, hey, we're just like everybody else, look at our company's value. real people running this thing. >> absolutely. if you recall, there was a line in the show last night where tim cook said, a company with values that acts on its values can change the world. and i think that line sort of says it all about the way apple is and doing it at holiday time was exactly part of the plan. this was definitely part of a planned event. but i thought it turned out very nicely. "60 minutes" got a few hard questions in there but they were obviously well-rehearsed answers. >> it comes at a time where we've got note after note from

analysts talking about potential weakness in the supply chain. potentially this being a weak holiday for the iphone 6-s. saying people are probably going to be waiting for the iphone 7 coming out next year. we heard the head of marketing say each product's job is to compete with the other ones. essentially to cannibalize the products that have come out before. why is this strategy something that works for apr s for apple? >> i think it will always work for apple. it's cannibalization by design. while this may be frustrating to some users, it's actually a very smart business decision. it enables you to kill products on an ongoing basis and always be at the forefront of new technology. so they must do it in order to be successful. and then of course they've developed the notion that it's cool to have the latest apple product. so that really helps. >> andy, one of the things that tim cook seems to keep taking

passings at is this conversation around encryption and how much access should apple give the government to the private information that people have on phones. here in this interview, as he said before, hey, look, we've designed this so we don't even have access to that, we can't give access if we wanted to. do you think that this messaging from tech around encryption and national security has been effective? if not, what more should they do? >> well, i really love apple's statement that it shouldn't be a battle between privacy and security. we should have both. after all, as tim cook said, this is america. we should have both. and i think that the tech community should work to fight to make sure we have both. because both of them are key american values and they're really important for companies like apple to be successful. >> a few years ago, apple was sort of the poster child for what the government and congress specifically wanted to frame as tax evasion. do you see an issue like

encryption, seeing apple being made an example of on an issue like that, or perhaps another political lightning rod? >> well, certainly, i think politicians and also media are out to find enemies in this situation. and out to find the bad guy. but i believe very strongly that apple is being a great citizen. again, is what tim cook said in the show last night, you know, this is -- we have a tax code today for the industrial age, not for the digital age, and that needs to change. >> certainly on the product side, the piece left a lot to the imagination. sheets over tables in the design lab. so we'll see what they come out with next. we appreciate your time. >> sure, thanks. >> andy cunningham, former pr head at apple. up next, "star wars: the force awakens" already breaking records. the president of fandango tells

us just how big this movie could get.

coming up, we have value hunting with john rogers of ariel investments. plus, the analyst who says the street is too negative on apple. and could microsoft rally 30% over the next 18 months? barons thinks so. do our experts agree? that's the big question. >> sounds good, scott.

meanwhile, the markets are evaporating so far as gains go. the dow is close to the line, now up about 7 points. the s&p went positive again. the nasdaq is up by 11. it's faring the best today. all the major averages are looking, john, to what their performance will be for the year. the dow is down about 4%. the s&p is down about 2 1/2 percent. the nasdaq is positive by about 3.5%, 4%. we'll see what the rest of the averages do. they're driven a little bit more by oil. we're watching crude near 34. brent, near an 11-year low. so a lot of moving parts, but certainly an interesting take today. >> yes, the s&p not getting help from some of the names where it has gotten help in the past. apple, of course, among them. apple is down slightly today. >> certainly we'll be watching that apple down, as scott just

mentioned, 11% this month. we'll talk about the app market. idc estimating the global enterprise applications market will go from $153 million this year to $200 billion by 2019. which app claimed the top spot in 2015? josh lipton has the winner. >> kayla, it will come as little surprise, according to data from octa, the top enterprise app of 2015 is slack. >> they grew over 20% in our network. they call it the usain bolt of cloud apps. we think it's the trend that cloud users are loving the app and bringing their i.t. departments on board with them. >> using data from its network which includes thousands of customers, 4,000 apps, and millions of daily log-ins, octa says slack did take the gold. next in line, greenhouse, which

grew 580%, followed by envoy, zapier. octa broke out which newly public cloud companies saw the greatest customer growth on its network this year. the winner there, box, which enjoyed growth of 50%. but while more customers are fans of box, we know investors are not. the stock down 40% from its recent high. as worries there persist about whether the cloud storage company can maintain growth while cutting costs. just as interesting as okta's analyst is the company itself. allowed users with a single secure log-on to access all their most popular apps in the workplace on any device so no more jumping in and out of apps. octa has thousands of customers including linkedin, mgm and adobe. including graylock, secoia.

in fact, ben horwitz actually sits on this company's board. okta has raised some $230 million at a reporting valuation of $1.2 billion. cb insights tells me this is a start-up that's likely to go public next year. okta declined comment on a timing of a public debut. guys. >> another unicorn. josh lipton, thanks. and speaking of mythical creatures, "star wars: the force awakens" shattering box office records over the weekend. 1 out of every 3 tickets for the domestic opening was purchased through fandango's online and ticketing channels. joining us now, the president of fandango, which is a unit of nbc universal. paul, put this into context, how big is this compared to your typical really big movie on fandango? >> this is absolutely huge. this movie, 37% of the sales

were done on fandango, which is giant, gargantuan. >> why do you think it's that different from usual? is it because the audience skews towards the fandango user? is it because people are purchasing in advance and they've been trained like that for this movie? what is it? >> well, first off, going into "star wars," we've already had a huge year. fandango is up 58% year over year. so we've seen just a ton of moviegoers adopting mobile as their platform of choice. reserve seating has grown a lot in the u.s. but i think this movie is its own cultural phenomenon. so this is the movie everyone in america just had to say this year. >> paul, we talked to a critic on friday who said that the part of this market that's so hard to pin down are those people who will go back to see this movie in the theaters over and over again. are you seeing repeat attendees, repeat buyers so far in your system? or do you think that will take

weeks and months for that to start happening? >> we're already seeing a huge amount of enthusiasm to see this movie more than once. in fact, compared to a typical blockbuster, this is 40% bigger in repeat purchase already. and of all our tickets, 20% are already purchased into next week and into next weekend. yes, there's just a tremendous amount of enthusiasm about this movie. >> what other data do you think will be helpful for investors as we start figuring out who the "star wars" viewer is? there's an expectation that the age group will be 40 to 49, the people who grew up with this as a cultural phenomenal back in the '70s. but is it younger than that? is it more male than female? what other data can we parse? what theater rrs getting the biggest bump from this? >> honestly, think it's everyone. this is say movie crossing all genders. it's every age group.

i saw the movie yesterday. i saw little kids. i saw teenagers. i saw families. every age group. so i think we're going to find this is a pretty big movie. this drawing everyone back out to the movies. i think it's going to create renewed enthusiasm for going to the movies across either audience segment. >> what's your prediction on staying power heading into january and february here? >> you know, it's hard to estimate how big this will be other than huge. i think we're all excited. i know it's going to play well into the new year. i look forward to seeing where it ends up. >> all right, so do i. president of fan dango. i'm sure those commercials of yours that have been airing didn't hurt. thanks so much. >> thanks so much, appreciate it. >> when we come back, on january 1st, nearly 40 million people may be unable to go to top websites like facebook, google and twitter. we'll tell you why and what you can do about it in just a moment.

oil prices off the lows of the session, but still below $35 a barrel. let's get to jackie deangelis at the mymex with more. >> as you mentioned, rebounding just a bit, january going off the board this afternoon. everyone's watching february. if you look at the premium difference, the spread between

wti and brent, which hit an 11-year low this morning, you can see it's really tightening and coming in. as there's more talk for the potential for the ban to be lifted. that is why people would pay less of a premium for brent. aaa says we're under 2 bucks. two-thirds of u.s. gas stations are selling under that level. americans saving more than $115 billion on gas this year, about 5.50 per person that's a licensed driver. more americans expected to take advantage of this for the holiday. hitting the road and driving 50 miles or more. whether or not that savings is being translated into other areas of the economy, especially retail, is something we've been discussing and debating. but the savings is certainly there, guys. >> all right, thank you, jackie. starting january 1st, a new method that upgrades the way sites are verified could mean the end of internet access for

internet users. anybody with a cell phone more than 5 years old will be unable to access the encrypted web. matthew, it says millions of users, but my goodness, more than 5 years old. are these like the hand me downs that tweens are using? who do you think is really the customer that has to pay attention to this? >> is the largest people who are impacted are people who are in the developing world. for example, in china, almost 7% of users are going to lose access to the epcrypted portions of the internet. it's exactly that. when you trade in your cell phone in a country like the united states, those cell phones make their way to the developing world. those cell phones then are ending up in the hands of people who sometimes now will not be able to access any parts of the encrypted internet. >> so does this trigger windows xp-like upgrade cycle?

does that benefit any company in particular? >> you know, i think that it's going to be -- windows xp is actually one of the browsers which -- the older versions of it will also stop losing -- lose access to the encrypted internet, so you might see some movement. but by and large in the united states and western europe, this isn't as much of a problem. in the developing world though, if you have customers in the developing world, in china, in the middle east, in parts of africa, then they may lose access to the encrypted portions of the internet, and that's going to stop being a problem as of january 1st. >> matthew, people in china, for instance, can't access facebook, google, twitter, as it is. so how much do you actually expect this to affect their daily lives on the ground? >> the internet is more than just those sites. what companies like alibaba have done, which of course are major players inside of china, has

made sure their sites can fall back to support the older versions of the encryption technology. and so, you know, what we've done at cloud flare is made sure that if any site is using our service, than they'll be able to support the latest versions of encryption, but also continue to support legacy browsers and legacy phones as well. >> as we look at how this is changing the way people are able to access the web, are there any other dates like this coming up that you think consumers should look out for? >> well, this is going to be a rollout over the course of the next year, over 2016. and so google and chrome have been the most aggressive at turning off this old encryption standard. what effectively happens is that encryption is reliant on technology being able -- it being hard to do a number of calculations very, very quickly.

and so over time, we've had to deprecate these older encryption standards and use the newer standards as well. and so we will continue to have to deprecate older standards and move to new standards as computers get faster over the next few years. this is going to be a problem affecting users throughout 2016. and the good news is that for most users, they'll be able to upgrade, but for users in the developing world without modern cell phone technology, they all of a sudden might lose access to a lot of the internet. >> so an opportunity then for the micro maxes of the world i imagine. >> yes, that's right. i think you'll see some of these users with the older phones being -- have a new incentive to go and upgrade. but obviously in places like syria, where over 4% of users will suddenly lose access to encryption, they're not going to be running down to their at&t store to pick up a new phone.

this means some of the most vulnerable populations on the internet are going to lose access to encryption and there's not a ton those users are going to be able to do to fix that. >> matthew prince, co-founder and ceo of cloud flare, thank you so much. up next, another blow for controversial pharma executive. the latest when we come back.

welcome back to "squawk alley." we're watching shares of juniper networks down again today, sharply about 5% or so at this point. the stock's been falling since the open. is currently one of the biggest laggards in the s&p 500. comes after the company has provided information on two possible security issues it discovered that could affect one of its operating systems. telling reuters on friday really the department of homeland security is working with the company as it investigates. the stock is down by about 5% right now, still reeling. three days worth of losses. >> all right, thanks so much. meantime, there's more trouble for controversial and outspoken pharma ceo martin shkreli.

kalobios has removed him as ceo, just days after being arrested and charged with misleading investors in his hedge fund. he talked with the "wall street journal," flanked by his lawyers, saying he is being targeted for his highly criticized drug price hike that came earlier this year. he says the government is, quote, beating up -- beating the person up and then trying to find merits to make up for it. i would have hoped the government wouldn't take that kind of approach, end quote. if found guilty, he could face 20 years in prison. he's currently free on a $5 million bond. john live streaming from his apartment. not keeping quiet about this. as many in his situation would have done. but of course that is his personality. >> yes, he seems to like the attention, for better and for worse. we'll see how this one works out for him. "the wall street journal" taking a look today at how jack dorsey runs both twitter and square. one way he maximizes his time. twitter's executive chairman agreed to be his driver for a day so they could talk business.

he also goes to disney ceo bob eiger for advice. so he's a good sounding board for him. says dorsey splits his days, spending the mornings at twitter, the afternoons at square. twitter's stock, meanwhile, sitting at new lows. so plenty of room for improvement there. he's only been ceo for a couple months. so -- >> yeah, six months or so, maybe a little more than that. the article describes 18-hour days. eight direct reports. marathon meetings at both companies. they're located next door to each other, which makes things a little easier. he did say certainly he can get bogged down in minutia, but his legacy still. disney taking about eight points off of the dow. we've seen some of the gains for

this morning evaporate. the dow currently up 19 points as we head into the afternoon session. so a lot to watch there. >> yeah, disney's done well over last few months. it took the dip under 100. the stock has awakened since then. >> green field since 90 bucks is the one to watch. that does it for "squawk alley." let's head over to scott wapner and the half. welcome to the halftime show. thanks so much. let's meet today's starting lineup. joe terra nova is here. ariel's john rogers with us today on whether growth stocks are on the way out and how he is playing the markets following the fed as a new stock pick for you as well. call of the day. barons says microsoft shares could rise 30% over the next year and a half. our experts debate that call. we begin with another hotly contested stock these days and that is apple. shares down