♪ welcome to squawk alley. joining us at post nine, dennis crowley. good to have you back. >> thanks for having me. >> we'll pack a lot into a shortened trading week. s&p up almost 15. bob is watching what's happening on the floor. >> still a rally but off the

highs. the s&p was having quite a rally since thursday. remember the bottom on thursday. that's when we heard the uae minister trying to create a halt in production or discussions about that. since then the markets rally close to 70 points. really very impressive. we saw all sorts of things turn around on this. the oil rallied and u.s. bank stocks again are rallying today. so the big names, bank of america, all leading the market up 2.5% on average. defensive names, all the stuff that was doing well last week are down today. your telecom stocks like verizon are lagging. your utility names and consumer staple defensive names are flat to down. it's important to reiterate how much stocks have rallied since that bottom in the middle of the day on thursday. if you look at a group of stocks, bank stocks, citigroup is almost up 12% since the bottom on thursday. big global industrial names like

general electric and caterpillar are all up 4 to 6%. and even exxon and chevron were up 5 or 6% or so at the open here and are still up about 4%. so quite a rally right across the board. also seen medal pricing rising as a result. copper has gone up and gold has gone up and a stock like free port that was $4.50 that's over $6 now. that's almost a 30% rally in that stock which everyone had given up for dead essentially. steel stocks have also turned around. iron ore prices are higher as well so stocks are also on the upside. so remember if there's anything that changed, people ask me, this is more talk about the three big issues bothering everybody. oil, china and europe. on oil there's been talk about a russian saudi production freeze. you may or may not believe it but that's a fact. china had record loans in january and the pboc's main governor there defended the renimbi imlying there wouldn't be a sudden devaluations. the ecb talks about buying bad

loans. three things bothering the world right now. a lot of stalk still but at least they're talking about the main issues. right now the dow up about 100 points. back to you. >> thanks so much. despite today's gain the nasdaq still down about 13% so far this year. the s&p tech sector down about 10%. dennis i won't ask you about the ecb but we are trying to get a sense as to how this repricing evaluation how it's being taken in the valley for instance. >> i think people from outside the valley look at it and say there needed to be a correction. some of the valuations are high. from other folks we start to see investors pulling back a little bit. we're very fortunate. a couple of weeks ago it was great for us continuing to build all the great things that we're building but we're hearing that investors are being gun shy on things. >> it seems that risk is off for the time being. people don't want to put money into momentum or high growth but high risk stocks.

how does that play out across the tech sector? >> well, i think specifically what we have been seeing is you really have to show that you've got something that you could be selling. to advertisers, today at a businesses and i they the risk has been kind of locked up in a lot of the high growth consumer things so one of the big things we're focussing on is how can you show the business buying here. it continues to show great growth. >> i get the sense that maybe you took your medicine early. you guys had a pivot, 18 months, a couple of years ago where you were moving away from being more pure play consumer into looking at the data you got about where people are and what they're doing. has that benefitted you? has the conversation with investors around foursquare changed in a way because of what everybody else outside of new york and silicon valley is going through? >> we had a real conversation internally about a year or year and a half ago where it's like we're not going to grow up and

be a facebook or snapchat but we have to find a real business here. we thought about all the assets we have and it enabled us to come together and think about the company a little bit differently and now we're in a completely different position 18 months from now and you'll see a lot of other companies that have to take a hard look at what they're doing and where their fwroeth is going to be and how they'll sustain thelmselves goig forward. >> what you did is what some argue twitter needs to do. get off the ad revenue data model but how many companies like yours can do that? >> you start to look at how big can you be as a consumer company. twitter has been struggling with the growth issues. they have to figure out how to grow exponentially many more users or sit and think what are the assets that we have and what are better ways to monetize those assets. that's a conversation we had and i imagine a lot of different companies are having that conversation too. >> what happens to yelp. the app you came out with is often compared to yelp.

more and more i find myself i don't care how many reviews a place has just as long as they're good reviews and i can trust them and yelp sometimes you get a signal from the number of reviews that you can kind of figure out whether people know what they're talking about but i have gotten review fatigue when it comes to a lot of the apps. what do you think happens to that company. >> on a consumer side people look at the apps and say you're similar but we have a totally differ business than they do. they're focused on the local business which is a very difficult business to be very successful in. especially outside of the u.s. and one of the things that we have been great at is we're a technology company and data driven company. we found all the interesting data streams around real time analytics and that puts us in a totally different class than they are. i don't have a ton of insight into what's going on but i imagine that it will be difficult. >> moving on to another topic here that's alibaba today revealing it bought a 5.6% stake

in grow upupon. it has a long way to go to make up that lost value. stock down 83% since going public in 2011 although they had their chances to do things differently. the question is now what alibaba might be thinking. they could buy these guys with the cash in their sofa cushions. >> it's interesting because we look at companies a broad and how do we partner with them to help us bring our products to other markets and i wonder if that's what they're thinking when looking at a u.s. company. how can they bring their products to the u.s. that could be interesting to see how that evolves over the next couple of months or so. >> what's so interest as good they have a partnership with a company in china that does what groupon does here and they were liquidating that stake and trying to build something internally and organically to partner with ali pay and they're taking a fresh tack to coupons and small business in general.

if they have a partnership that was a little bigger, how do you think that would work? >> i could imagine it's about bringing some of the audience from alibaba over here to the u.s. perhaps. trying to figure out a way to bring that brand to the u.s. and get people in the u.s. interested. but also just learning from a lot of the lessons. grow upon has been through many interesting pivots and trials and different things and maybe they want that experience to see how that does in the chinese market. >> trying to connect the dots here. you guys, groupon, yelp, none of the models worked out the way people expected at first. is local a lost cause at this stage or is there a local 2.0 that's consumer driven. >> there's probably local 6.0 at this point. how many people have tried to make this work. it's the hardest space to do really well in. i think of all the things that we built early on at foursquare and how a lot of them were

focused around local merchants. we just didn't have the scale to help those merchants out. now that we have the business really working i wonder if that's something that we come back to in a couple of years. let's revisit that and it's the 7.0 or 8.0 approach at local but a lot depends on the merchants and how savvy they are at getting these systems up and running too. >> speaking of her chanlts, another major bank disclosing a stake in square. what a week for these guys. >> we got a smiling that goldman sachs is disclosing a stake that it invested in square several years ago. similar to what visa disclosed on friday and what's interest as good these investments were in the class b shares. the private behind the scenes private stakes and now they're being filed with the publicly traded shares. it says they own about 9% of the class a shares but when you think about how many shares has outstanding that's less than the

total. it's quite a vote of confidence for the company seeing these high profile investors. the stock is up about 6% and you were an early investor in square. when you think about local 6.0, 7.0, 8.0, square is trying to attack local. they're doing it with the help of goldman sachs and visa. how much good advice can they get. >> it's all about distribution for them as well. one of the great things is i see them popping up all over the place in new york now. places opposed to changing their pos system now adoptliing it. square is a great data play. all of this great data for merchants about the people shopping there. what are they buy something what are they buying at other places and the same way there's an interesting data play at foursquare they might see that happening with their data as well. >> they tried to leverage the technology with starbucks. it didn't really play out the way they planned. do they need another big high profile customer? or can they really scale at the local level? >> they might be able to do it

at the local level. they made a tremendous amount of progress over the last couple of years with their pos systems. people are more comfortable swiping their credit through an ipad. that's something people are afraid of in 2010, 2011 but it's a different game now. >> not to say that wouldn't hurt. it helps. >> it's easy to say it didn't work. what's going to happen next. but this is what companies do all the time. you get the biggest partner you can get. see how it works out. learn a couple of lessons from it and you continue that or reset it with someone else. >> we're wondering what happens when the new iphones or ipads don't have the head phone jack. that was such a core part of the square product and even though now they're compatible with the apple pay and the communications that does take a chunk of their customer base out. >> it could. i'm sure that there won't be a rude awakening where they're like we didn't think about that so i imagine they have clever solutions. they have been rolling out a lot of hardware that's beautiful

too. taylor swift, bruno mars, kendrick lamar big winners at the grammys last night but they also snuck in this message that was essentially antistreaming. check it out. >> we all love the convenience and we support technologies like streaming which connect us to that music but we also have to make sure the creators and artists like joey over there grow up in a world where making music is a viable career. >> so tonight, my comrades of the recording academy would like to thank the fans that support our work by going to a concert, subscribing to a music service, collecting vinyl, or speaking out for artists rights. >> and speaking of streaming, apple announcing today it has 11 million subs now on apple music up from 10 million just a couple of weeks ago but don't look for kanye's new album on the service. he tweeted my album will never never never be on apple and it

will never be for sale. you can only get it on tidal. i'm not sure an award ceremony is going to change the economics of the music business. what do you make of that? >> i haven't been using tidal. i use spotify and i tend to find that people find a service and they stick to it. i'm not sure how often people bounce from service to service just because their artists might be on that. i might be different because i'm older and i'm not chasing it but people want to find music they'll find a way to get it. >> it's interesting. i feel like streaming is like radio business model wise. nothing has replaced actually buying music. so the message didn't strike me as so much antistreaming as streaming isn't enough. streaming is like the marketing for when you actually buy a concert ticket or do something that puts money in the artist pocket. don't think that because you stream kendrick lamar you did him any favors. >> yeah but if it's marketing then there's value in it beyond the price you pay for the music,

right? that's your argument. >> yeah, some artists can sell t-shirts. but they say music sells everything except music. and i think they were trying to make that point on the grammys. we're going to have to make money somehow. this streaming thing isn't cutting it. >> some artists can also sell subscriptions to the service. tidal was the number one app in the app store after kanye tweeted that. dr. dre doing his scripted original on apple music. >> it will be interesting to see how long that stays before people get the music they want to hear now and they go back to what's familiar to them. so yeah it's very very difficult model and it's interesting to see people jump and and try to figure it out. >> world changes fast. it's good to see you dennis. >> thanks for having me. >> when we come back, test driving the new tesla model x. phil is going to go behind the wheel. plus apple announcing a new 10 part bond this morning. what the company may have up their sleeve and sports illustrated unveiling it's

annual swimsuit issue. two of the cover models will join us live when squawk alley continues in a moment.

you are a model x

reservation holder. how long until you could get in this car and test drive it. >> four years. >> you put down $5,000 when? early 2012? >> march 17. >> so this is a long time coming. what do you think now that you're in here driving it? >> it's everything i expected it would be. >> what surprises you the most about driving the x? >> the windshield is a lot bigger than i expected but i like all the natural light. obviously no obstruction to your view when your driving. it's super smooth. it met your expectations. >> it's quite as can be. >> it's hard to see but this is a canopy windshield. it goes all the way up and over as opposed to most vehicles where it's going to stop here. it has more of a canopy effect so you don't feel as closed in. there's been a lot of questions and doubts frankly that the x would live up to what elon musk first proposed when he said i'm coming out with an electric suv. did you ever have any doubts?

>> no. not really. no, none. >> a lot of people would say $5,000 is a lot of money to put down on an suv and to wait four years for it. >> it is. >> what did you think as you were waiting? >> well, so i did keep taps with palo alto and i called and i said is it ready yet or is it coming? because the expected delivery date was march of 2014 so i called and they were like we want to deliver the best car we can and assure you it will be worth the wait and i wasn't desperate for a new car. i had a new car and it exceeded our expectation. >> we're looking at gas well under $2 a gallon. it's going to stay there awhile. does that change your thought process at all? a lot of people say gas is cheap. why don't i get another luxury suv? >> well, i have driven a hybrid

for probably 10 years now. for us it's solely environmental. we signed up for the car. my husband drives an electric car as well and it has to do with the fact that i want a car that uses no gas. >> one final question. >> sure. >> the falcon winged doors. did you have a chance to try them out and what did you think? >> i did. super sleek and they'll make it through the garage. >> the kids now want you to drop them off closer to school. >> usually it's like drop me a block away and now they're like we're doing caroline. >> one of the model x reservation holders finally getting a chance to test drive the model x. this has been going on this morning. continues tomorrow. all part of tesla's efforts to convert reservation holders into those that put in a firm order. >> from a model x to a different model. up next, sports illustrated unveiling the newest edition of the annual swimsuit issue. the cover models will join us

right here at post 9 when squawk alley comes right back. don't go away. ♪ ♪ for your retirement, you want to celebrate the little things, because they're big to you. and that is why you invest. the best returns aren't just measured in dollars. td ameritrade®.

>> haley and ashley and of course the sports illustrated group publisher. guys, good morning. great to have you as always. >> thanks for having us. >> people can go online and see the moment that you were told that you would be on the cover. but what is that moment like? >> that moment is something that you can never prepare yourself for. of course every shot that you take when you where ever you're thinking this is the cover. this is the cover. you're praying that it's the cover and then boom it's the cover and you don't know what to do. >> how has it changed life for you? >> our career is going to explode off of this. we can create businesses. our name and our word actually means something now. >> you'll be seeing the ashley graham show pretty soon. >> i don't doubt that at all.

>> you always come with some surprises. trying to adjust the messaging. make a statement. what is the statement this year? >> the statement this year is we always want to go bigger and better than last year. this year we doubled down on video. doubled down on experience and technology. our live reveal show on tnt following the slam dunk contest was an absolute success. if you go to si.com we have more hours of video than ever before. this evening there's a red carpet show live streaming at 6:30 p.m. and the introduction of vr this year which is a huge change for us. >> that could get dangerous. >> it's an incredible opportunity at this year. >> this year proves it's not the case. this year everyone is talking about the three covers of the magazine so while we are a brand in transition we're a company in transition. print is a important part of the franchise and directed the

dialogue this week. >> 70 million people will read it and 20 million are women. >> what do you want them to think? >> i want women that have been reading it to know that no matter what size you are, no matter how thick your thighs are, no matter how much cellulite you have because i woman like me made it on the cover and what do you tell those people now. >> the people that told me to lose weight so i could make some more money. honey i'm making money. >> was it your goal in modeling? >> it was something that just happened over the course of time and i had been told your too fat, you're too skinny, your too ugly, you're too pretty and the moment i said screw all of your guys that's when i had my voice and started changing the lives of so many different women. >> how much of that was an appeal for si?

>>. >> the visionary to the brand decided to choose the three covers this year and the reveal show haley had an interesting comment that you should share with the audience. >> my automatic reaction was three different women and three different body types all representing something different so every girl has something to look at and it's such an iconic moment and changing the game of the magazine and the industry. >> makes you wonder why it took so long, doesn't it? >> i have been doing this 15 years and i can't tell you but i can tell you that sports illustrated is the one that made it happen. they are the trail blazers. >> do you mind inviting all of these people to the party tonight. >> they're all welcome. >> they actually are welcome. we have a swim city fan fest of which all the sports illustrated swim suit models will be there from 11:00 a.m. to 5:00 p.m. today at the altman building. >> are you coming? >> our camera man is about to drop the camera and run. >> it's good to see you guys.

congratulations. >> thank you. >> always good to see you. >> thank you for having us. john back to you. >> thanks carl. let's send it over to simon hobbs. >> the thing to remember is it was open yesterday. they got a gain there of almost 3%. losses extended slightly during the course of the session. the big news is that the oil majors bounced when the price of oil went higher on the deal and then came back down and the banks have gone in the other direction. just for the record, investor sentiment. the survey coming from germany was pretty poor today back down to levels not seen since october 2014. let's have a look at the moves. european banks were moving to the down side. some of the big names. not just standard chartered but deutsche bank and commerce bank they cut those losses and that's a big plus through the section. just going unchanged there. the italian banks are ripping

ahead again. gains of 6 or 7% yesterday. mario draghi had to deny that the ecb was about to buy their nonperforming loans or was even in a conversation with them about that but he did say perhaps they could be bought as part of the asset backed operation if they were packaged correctly. that left city for example suggesting maybe the ecb isn't going to come in here but maybe the bank of italy could do something domestically on its own account and at its own risk to help that situation. you see relatively solid gains as well for the italian banks. angelo american came out with restructuring. that moved to the flat line. top gainer is edf. this is all about the dividend there. they announced that they got savings of over $5 billion moving forward. at the same time they were able to -- this is partly because they're going to delay the exit from some of the nuclear power stations. they have also been able to pay the french government, majority shareholder, the dividend in shares so that saves about

1.8 billion euros as well. meantime, this gets vital toward the end of the week, the u.k. prime minister david cameron was in brussels today trying to sure up political support for a deal on benefits to keep the u.k. in the european union on thursday night. he met with them and it will become a flurry of activity if he gets that deal thursday night with a cabinet meeting on friday where he'll pull rank in an effort to try to push the u.k. through the referendum on staying within the european union which will be held in the summer. this is, when people talk about the risks for 2016 this was always on people's list if you like. hopefully we're able to neutralize that during the course of this week. guys, back to you. >> thanks so much. when we come back is the worst over in china? asian markets mostly seeing strong gains during trading today but a china expert will join us when we return. "ow..."

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>> restores scheduled airline service between the u.s. and cuba. they expect to decide which airlines are flying from which cities to havana. china's foreign ministry warning the u.s. there would be serious

consequences to naming a plaza in front of the chinese embassy in washington after a prodemocracy peace prized winning. they backed the plan to name it after him jailed in 2009. three people were killed and at least 9 injured in a gas explosion at a residential building about 160 miles northeast of moscow. emergency workers are searching through the debris. officials are investigating the secure. the united nations security council announcing that the former un secretary general has died. he served one term from 1992 to 1996. he was 93. that's our cnbc news update for this hour. let's get back to squawk alley. >> thanks so much. meanwhile some easing concerns about volatility in china markets following the lunar new year. we did see china up overnight

and that was despite hitting the strongest level this year against the u.s. dollar yesterday. joining us on the phone, china focus venture investor, managing partner with ggv. we were expecting to come back from the chinese new year where they had a week off and have a little bit of volatility but i don't think anyone expected them to have the sharpest one day trade in nearly a decade. why did this happen? >> i think overall the numbers have civilized. you look at pmi numbers. numbers are down but some numbers are going up. so overall, the economy in china, while volatile has come to the point where people have more confidence of what's going to happen in 2016. so we look at a performance and it's sent the index up 3%. >> part of that confidence, we

did see in yuan denominated loans jumping ahead of the lunar new year holiday. there's some sense that maybe business got front loaded toward the beginning of the year going into the holiday because there's so much business around it. how do you shake that out? how do you actually figure what business is front loaded into january and early february and how much that could take away from the rest of the quarter? >> we look at what's happening is the consumption has been going fast and people have confidence of shopping online and so forth. and shifting from off line to online. >> the shanghai is below 3,000 still. what's the attitude from investors on the street there after the couple of years that we've had, particularly the past

12 months in the stock markets over there? >> it's been a roller coaster ride. early 2014 level. so i think before the whole bubble started, it was around, roughly around 2,000 and now people think going back has made sense. still up and down. some people are going to be embracing for that and looking for signs on how the chinese economy is happening and taking place. you do see spending going from off line to online. you also see more from manufacturing to services and also you will see more organization happening in china. >> hans a lot of accounts over the weekend about capital flight. people buying real estate outside of china. trying to get cash. literally cash out of the country by strapping it to their

bodies and in some cases being discovered at security. how much does that speak to what's actually happening? >> i think that sort of diversification has started roughly about 3 years ago and you see more trickle down. down to more of the -- some of the mass market levels. so i don't think that will change. but i think the investments and growth in online sector in china. when we move to china and start operations in china in 2005 you look at e-commerce with less than 0.1%. today is 50% of retail is done online. and that percentage only rising. at the same time, e-commerce and total percentage of gdp in china is less than 3%. so you do see efficiency happening. it will take time to get there. >> the growth in the e-commerce sector aside that's a story that we have been paying attention to for several years at this point

but the people's bank gedependi on what they do and what they say have the ability to change the entire story for how to global investment community views what is happening in china. do you they they need to get better at communicating or communicate more about what they're doing so that there is a clearer picture of what's happening in china? >> that's a fair point. i think more of a confidence and pr issue. i think that the government is now talking about it more and talking about efficiency market based changes. especially encouraging e-commerce sector and internet sector more. more of that needs to be done. even look at the presentation from the ceo from the chinese companies listed in the u.s. and hong kong. the ir aspect could be improved a lot more as well. >> well, they certainly spoke truth to power at least for a day. shanghai up 3%. shenzen up 4%.

we appreciate your time this morning. >> sure thing. >> meanwhile, also in a filing today, apple announcing a new 10 part bond this morning. mike is here at post 9 to explain why now -- i have to think that maybe they are seeing the writing on the wall for interest rates. >> they might be. they have a history of hitting the market's bid when it comes to selling bonds at a pretty good time. the first ever apple bond offering was april 2014. 10 year treasury beyond yield 1.6 or 7%. apple got a great deal and apple has become one of the biggest issuers of corporate bonds in the market. less than 3 years after it started has about $56 billion in total long-term debt right now. going to add to that. we don't know the size of the new ten part offering going out to 30 years but apple feels as if it's advantageous and companies bought back $110 billion worth of shares in about

3 years time planning to buy back a total of 140 billion. so clearly apple prefers to get cheap debt than bring back some of the $200 billion in cash overse overseas. >> it will signal in some sense how much stock they plan to buy back. companies are so bad at timing but they have become so good at timing the bond market. >> apple is also a tremendous buyer of bonds. they keep a lot of cash in bonds so they're almost a tremendous bonds manager. >> they haven't been badly timed but they didn't exactly say hey this is as good as it's going to get. >> trying to remember that but this whole narrative happened on a big change succession in cfos. >> you don't think of apple as having that financial savvy and

is this what the street wants? yes in the absence of other things that are going to get the business going to the next stage. it's interesting though that the parlor game that goes around here what's the maturity structure going to look like and what are they going to have to pay. it's not too bad to lock it in. >> you can't repatriate that cash. the bond folks are benefitting from it for sure. >> the tech companies have always taken a certain pride in having a whistle clean balance sheet and no debt there and even google's cfo or alphabet's cfo said maybe it's time to add some debt to the balance sheet. is there a change in the conversation here? >> balance sheet efficiency which usually includes some debt. you don't want it to be laidened with all cash. you're not giving leverage to the shareholders. but to have a more efficient balance sheet if you can support the debt levels you look at the

other companies and the bond market craves the paper of these companies because it's very secure and also they're novel issuers. they don't have a lot of big tech issuers out there. >> safe to say there's going to be a lot of demand for this one. >> mike, thanks. >> thanks michael. when we come back, cyber security a bigger question than ever. we'll go there live to explain in just a moment.

>> we'll see you in about 15. >> we won't miss it either. thousands gathering in manhattan for the largest toy fair in the world and with more tech toys than ever security is becoming a big concern. morgan is live at the toy fair with more on that story. morgan. >> that's right. take a look at this. this is a robotic toy dog. it even knows how to charge itself. despite a 5% drop in youth electronic sales last year that toy manufacturers are continuing to wrap up their high-tech offerings. so here at the north american toy fair drones are once again on display including odyssey

toys. pocket drone that collapses to the size of an iphone 6 and even fisher price is touting a product that teaches preschooler house to code but this is also raising concerns about cyber security. case in point, v-tech's november breech that effected an estimated 12 million customers including 6.4 million minors, another company in focus is matel with hello barbie. that has not experienced a hack but has critics complaining about it's cloud based data storage. also privacy issues that spurred a lawsuit in december. many manufacturers, toy manufacturers have been more focused on getting products out to store shelves quickly rather than tweaking and testing the security of those products. he says customers should really read up on the security and privacy terms of toys know what they're covering and most

importantly know how to get the software updates for the toys so in the case of these robotic toys they have an app that goes along with a device. that's how the software updates are pushed out and instead of using wifi they use bluetooth and also a technology focused on indoor gps tracking. over to you. >> thank you. software updates and reading security terms, that's too much work. it's supposed to be fun. i don't know. i'll stick with board games for now. coming up, our next guest was named one of the most innovative companies of the year beating out the likes of airbnb, ge and snapchat. the ceo will join us live when we come right back. edededededededededededededededed dededededededededededflvrm dededededededededededededededede evereded

he joins us now. good to see you. >> good to see you guys. i got to start off saying we're in this era of consumer start up technology where if it sounds too good to be true it probably is. give me an update on how the business '] mod'/ el is working. you're getting information about people that are interested in financial products. how is your conversion rate? is this a business that's making money or eventually does this

flame out? >> so this is a business that's going to get started with monetization in 2016. we had some things that we started in 2016 but we're going to focus on margin lending along with collecting interest on cash balances which is pretty traditional financial services revenue that we have been doing already. >> has the action in the markets over the past few months shifted your thinking at all about how you're going to monetize about the most sustainable ways to monetize? because margin lending, i mean, sure, it's a great way i guess to make money but it can go really wrong for investors when the markets dip. >> that's slewly true so we have had margin that we have been testing for almost a year now making sure that we really have it dialled in so that consumers are only the really suitable ones are using it but overall we're pretty excited about the market looking forward this

year. we have seen a lot of new people signing up for robin hood as the downturn has been happening but it's because there's a lot of people waiting on the sidelines and right now is a great time to start investing with discounts. >> margin lending is something that's familiar to sophisticated investors but it seems you're trying to go after the main street investor and i'm wondering if the concepts will be too complicated for the main street investor to do safely. >> i think it will be too complicated for some investors but robin hood is growing very quickly and we have grown to be one of the biggest online brokerages in the country already. we have a large swath of people using the product and it will be useful for people that use robin hood today. it's our most requested feature. it's something that we're trying to get out there soon to keep people happy. >> some tried to construct bearish arguments about the demographics of stock ownership. interest in equities or any

financial asset for that matter as millennials come into the market and delay things like marriage and home purchases. do you think that the demographic wins are a tail wind or head wind? >> they're definitely a tail wind. there's a huge generation of consumers in the u.s. that have previously just not really been interested in investing in the stock market and being the first company that makes that accessible to this new generation is something that's going to be just as valuable for this generation as it was for the past in our opinion. we're very excited about it. it's a huge market and in-turn a huge opportunity for us. >> what's been the most surprising thing to you that you have learned either about your customers habits or about the uptake of free trading? >> it's amazing to see the combination of what the product stands for or the core value has really inspired a new generation of consumers to start using this.

that's not something that we could have really predicted or expected to have happen but we're really excited that's happening and it's cool to see americans that are younger to think seriously about the economy in the stock market and start engaging with it because our opinion is that if consumers are doing this in a larger capacity we'll just basically have a more open, more connected and more vibrant economy. >> some of the older americans that have been coming on our network have been talking about moving more of their money into cash because of all the volatility. have you seen more money going into cash on your platform. >> we haven't seen that. we're still seeing more people buying than selling stocks. over the last couple of months there's been more of people signing up and buying more stocks. it's not something that we're seeing so much with our consumer base. so far at least.

it's a very interesting year. thanks for joining us. >> thanks so much. >> when we come back, apple pay about to see a major expansion. we're going to explain that in just a moment. was engineered... ...to help sense danger before you do. because when you live to innovate, you innovate to live. the all-new audi q7. a higher form of intelligence has arrived.

>> in just two days apple pay finally comes to china. the company has teamed up and the bank announced this would be apple pay's fifth market but stiff competition from alibaba and 10 cent. it's the second largest market by revenue. something that happens in a flash it seems. now we're going to see how this helps or hurts. >> and the eco system is going to be very important as they change their message more toward services. being able to do that in their growth market is going to be key. samsung is not going to take it lying down however. >> kara swisher, as she said apple doesn't need to be number one in china. they just need to be in china. >> meantime, some of the big gainers today, ordinarily it would be a day of chesapeake and

freeport and williams but adt rockets to the top on the news of that deal from apollo. 56% premium. you don't see that too often. not this year anyway. >> and especially for what many are saying is an old line business. an interesting deal to see on a merger tuesday. >> that does it for squawk alley. let's get back to headquaters. ♪ >> thanks. welcome to the halftime show. let's meet the starting line-up for today. joe is here along with stephanie link and jim. also with us on set is tom lee. the founder of fun strap global advisors. our game plan looks like this today. belly up. the stunning number of energy companies one man says could go bankrupt in the crude collapse. he's going to join us live to explain. the hot trade stephanie says is finally starting to pay off and whether itan