♪ welcome to squawk alley for a wednesday. myself at post 9 on a day when market is hanging in there. one of the best days in about a month but allergan and pfizer are are walking away from the merger after new rules on corporate tax inversions. david faber has been covering the story since the beginning and back at post 9. >> the largest deal ever torn asunder or terminated is perhaps the better term to use there. of course both companies this

morning saying they will go their separate ways. this after treasury decided to change the rules midstream. at least something of a surprise to the companies themselves. the three year look back that was introduced by the new regulations issued monday evening and made allergen a far smaller company and in doing the deal as a smaller company, pfizer would not be able to make itself a foreign company. and you don't want to do this any longer. not that there weren't other reasons for doing the deal but perhaps even bring that cash back to the u.s. but in a tax freemaner is one of the key reasons pfizer pursued the so-called inversion. it's very unclear whether we'll be able to do any of that kind of thing from here on in. >> we did speak to ceo brent saunders earlier on squawk on the street and i asked him to respond to criticism from the

obama administration about companies like his who do so much business in the u. s. are headquatered in many ways in the u.s. but for tax purposes it's a dublin company. >> we are a job creator. we invest in the u.s. we continue to invest our r&b dollars in the united states. we will continue to offer cures and treatments to benefit the american people and we understand our contact with the u.s. it's simply not true. >> they were not expecting this obstacle to be he erected in front of their deal. it was last february in a conference call where mr. saunders said we don't see any real obstacles. they constructed the deal to meet the rules as they stood at the time. and he believes that what treasury did was un-american and will not benefit other companies that remain headquatered in this

country. >> a lot of candidates talk about building walls. they just built a wall around the united states and building people in. >> allowing the u.s. to become uncompetitive. i'm not sure that's a good thing. the ultimate insertion is when a u.s. company can no longer compete with the lower tax rate and freedom that the foreign company has. and not be acquired for the inquiring and we do have to wonder whether we'll see more companies base here and say i can't compete and that doesn't seem to be what many that support treasury's action want as the ultimate outcome. and after this deal falls apart and they try to do a smaller type of inversion and they don't stair down rate into these rules

and is there a possibility that there's anything else. >> and the provisions also seem to procollude to a certain extent deals that might otherwise from taken place. they're in an interesting position pfizer and they're just trying to figure this out and this is still relatively new for them. what their strategy is going to be. in part to access that cash overseas that they want to bring home and help support their dividend. that's a big consideration for them. i think there's much yet to be decided. >> all of this talk about being un-american about the size of the taxpayer. and how much money they're going to have left over. and in the case of pfizer it wasn't as much about the u.s. tax goal although that is a part of it. it was getting access to the

overseas cash that they don't want to bring back and have to pay taxes on again. and that's so many corporations that say we're taxing the money we earn overseas. why shouldn't we be taxed again when we bring it back to the u.s. interestingly some would say you would bring that money back here to invest and now we won't do that. and following inversions for as long as i have and as so many other things are, it's not completely clear that it is simply bad for the u.s. at the same time what is bad is perhaps the absence of any real corporate tax reform. >> yeah. even though the debate continues about exactly what pfizers tax rate was or is here in this country they're working on that today. thanks david faber. he is the writer for hbo silicon valley and the author of a new book disrupted. my misadventure in the start up bubble.

>> glad you're having me. >> talk about facebook first up making the big bet on live video today. the company is adding live video button to its mobile app and ios and android. you can see real time broadcasts of your friends and others across the world. you can also start your own live stream with the push of a button. it's taken some by surprise just how big a priority this is for the company. they are now the power player in tech and they become ground zero. >> google hang outs is it all of the above. >> the advantage that facebook has and periscope has to watch out for this this is integrated

directly into facebook's most popular destinations. into notifications and into profiles where as periscope is a second app on twitter it's side loaded and you can see on twitter if you #periscope who is on periscope right now but it's not like you can get your twitter followers on to periscope and vice versa. >> the opportunity is to generate engagement and still out of the spotlight unless it seems to me they sbi grate even more closely. >> a user is ten times as likely to comment on a live stream than an ordinary video. >> we just did one. what struck me is yeah there were people immediately engaging and sending in comments and sending stuff to us. when we're on video there

typing. that's the other thing i think that facebook does so much better than twitter. >> i learned never to power john forte's fan base. >> it was a network effect here. you have 1.3 billion people everywhere and you put a product out there and at least a sizable number of people are going to click on it. that's the new benefit that facebook has. >> yeah i did a live stream with a guy from re/code the other day. his line was you know we all work for facebook right now. and so we have to feed that beast. we did not get nearly as much engagement as you did. >> your streams go for half an

hour. you assemble all the viewers because you don't stop. >> let's go to the bathroom. >> but also i was surprised by how easy it was to set up. this was fascinating in the sense that john picked up his phone and put it on a selfie stick. this is already happening. we're on tv. that's powerful, right? >> the other big topic is amazon and this new shareholder letter writes the reason cultures are so stable in time is because people self-select someone energized by competitive zeal may shrek and be happy in one cultural while someone that loves to pioneer an event may choose another. he never said his approach is the right one and you write a lot about the mind set it takes to work and succeed in the valley and in this industry.

and these are really tough places that take a physical and psychological to and either you love that, some people love being marines. some people love that. >> we need marines. >> we need amazon, right. >> and needs a lot of people. in just the last five years the company went from 30,000 people to more than 230,000 people. multiple of 8. can you really expect when your company is growing that quickly that all 200,000 of those new editions are self-selecting to be at that company? >> a lot of them just want a job but also how bad can it be if it was really terrible they would start being able to recruit.

that's what the statement is also about. recruiting is a big issue in tech right now. being able to find more talent and you don't want anything to slow that down. you don't want to go to amazon because it's too grueling and too scary. >> is there a difference between amazon or a five person start up. does it start from day one? >> i don't know. five person start ups are by nature intense places. everybody is doing a little bit of everything and you're trying to get this off the ground and you and ri going to start a company we'll be working really, really hard. it's going to consume our lives but i don't think people sign up for amazon. i'm going to put in 20 years and it's going to be at this pace. it's a very tough pace and burns people out. this innovation is this idea that your job is a tour of duty. it isn't a career. you're not coming here to work for the rest of your life. we're going to burn you out. >> this is like the reid hoffman example where you say this is going to end some day. >> yeah. >> isn't this part of what this is about.

some of these companies that started off waving the flag like apple have become so massive that now serve working for them. from the high school or college kid at the retail store from, you know, uncle tim in a ceo suit and now you're talking about family lead policies. now you're talking about lackation rooms. all of these things. in palo alto. but when you're book now that's a whole different story. >> some of these guys aren't prepared for this. maybe that's what we're really seeing is a mid life crisis where they have to start thinking about how do we build a sustainable business and create sustainable jobs for people that can last throughout a career. i don't know if the reid hoffman idea actually works. his idea is fw going to have 30 jobs in the course of a career but just the plugging in and unplugging seems to be a waste of a process and so inefficient. it's time to leave right? and then you started again and

then you'll have to get on board and get all your benefits paperwork out. does that really work? >> that makes up for the free bacon and the dogs in the office. we hope you'll come back. >> thank you for having me. it was great. >> the book is disrupted. my misadventure. >> the markets are near session highs. they're mixed through much of the morning but the energy sector is hoping to lead one of the s&p sectors. the dow s&p and the nasdaq all trying to avoid a three day losing streak as they have done it for now. constellation brands and the stock is trading up by four and a quarter percent and take a look at these stocks. because the justice department just filed a lawsuit to stop the merger of the two sustains and while the companies called the doj's action counter productive

you can see that the market carl is thinking a little bit differently about a merger that had been in the works for over a year at this point. a new $320 arena set to open in las vegas, the ceos are with us. can they carry that to the primaries and takes a shot at apple in an interview with the daily news. talk about that when squawk alley continues.

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jane wells is live in sin city. >> hey, john. i'm at the t-mobile arena opening tonight. $375 million. 20,000 seats. they're going to be here along the wayne newton. it's a 50/50 joint venture along with mgm resort and aeg president. thank you. >> thanks for having us. >> this is new for you. crazy, different. >> fun. >> outstanding. >> it seems like a big place when you have a 16,000 facility that you own across the way. you're building a 50,000 seat venue next door. do you really need all of that. >> well, the market needs it. we turn away a lot of great acts

every year. people that want to perform but they don't have the venues and we recognized that many years agatha if we had another venue had to be with the right partner and had to be the right size. we knew we could fill it up as well as keep our other facilities very well occupied. >> you thought about vegas before. this is the first time they have done it. why not. >> we have been in business for almost 20 years now as a music content provider and venues around the world and as jim said it's about the right partner and the right location and the right vision for the arena and now it's time. >> you're counting on an nhl team coming here. if that's going to happen for the 2017 or 18 season. if you don't get an nhl team this is a big bowl. >> let's be clear on that. when dan and i came one this we weren't even thinking nhl and the numbers pencilled out really well. we were going to make a bunch of

money on this arena without a team. that came up months or a year later so that would be icing on the cake. we want someone that lives here. hockey fan. i want the team but from our perspective financially this thing works great without one. it will be more fun for the town if we get one. >> ufc 200 is going to be here instead of across the street. >> sure we cannibalize but this say venue for the entire community. we are very conscious of the fact that we didn't want to have our own arena, mgm and we were conscious of the fact that we want to make this great for the whole community but by having a partner for aeg and being conscious with our other competitors in the casino space we want this to be the hometown arena for las vegas and if we lose that but it's good for the town it's good for mgm because all boats will lift with this tide. >> you were in charge of the

spontaneous shorships and branding and how much did t-mobile pay? we're in a suite now that will lease for what, 200 a year. >> so how much of those long-term contracts have that immense $375 million investment. >> premium seating to club seats and our founding partners we have a tremendous group of sponsors that stepped up and it enables projects like this to be constructive. >> did you make it all fact? did you have 375 million. >> this is going to be a very good investment. this is such a vibrant entertainment market with so many coming in. it's staggering the number of events. >> when do you reach venue glut? >> i think this market and we have been in the market for like i said almost 20 years now and it's such a vibrant market and there's so much entertainment it reminds me of when we went into

london and we thought could there be more events and the new venue creates new events. guns and roses reuniting. an event that hasn't been together in 23 years. a new venue like this of this scale and magnitude will create new content in the market. >> before we go, you're opening next year. you aren't afraid of risk. you barely survived in open city center. you're opening and they're just struggling. this is an incredibly risky venture. after city center it's all i got. >> after city center everything is easy but i don't consider this risky at all. i would consider a multibillion dollar investment. we have to prove ourselves. but in our hometown here there's 41 million visitors coming every year. we own 41,000 hotel rooms here. we know this market better than anyone else and to find a partner like aeg and to build

right in our neighborhood, this is as safe a bet as you can make in las vegas and we'll prove that out in the next year. >> thank you for joining us. guys, back to you. >> thank you. >> as safe a bet as you can make in las vegas. up next, vans celebrating it's 50th anniversary as a company this year. the ceo will join us live when squawk alley returns.

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vans is celebrating it's 50th anniversary. it's an iconic brand and it's gone viral in social media recently. joining me now is kevin bailey. we know vans as more of a skateboarding alternative brand but it really started as what the tag lines and canvas shoes

for the entire family. how did the brand evolve over the last 50 years into what we know vans to be today? >> it's been a really exciting journey kayla. since our founder moved from massachusetts to california to start this little shoe brand it started when modern skateboarders adopted us as the shoe of choice and they were emulating their surf heros on dry land and our shoes got adopted for their sticky soles. it was recognizing that finding yourself, expressing yourself through the music, the art, and the activities you participate in as well as your own individual style, footwear apparel and et cetera. and that's what allowed us to expand into a more global consumer mind set. >> it was partly discovering vans themselves and partly the company reaching out and saying why don't you wear our shoes while you're competing and i'm curious in 2016, what's the best

way, the most bang for your buck that vans has in reaching potential customers? >> yeah i think it's a number of ways. best way is a hard one to pick. i know you talked about social media earlier on the show today and social media is one of the platforms where we are really active. it allows us to have a two way conversation. but we also have our house of vans platform that we ran in ten cities around the world about two weeks ago and that allowed us to connect through an experience and be part of our brand and participate with us and we also had retail stores around the world that allows us to enact with our consumers on a regular basis. we think that's where our youth culture lives. >> how do you think about how to use social media and what percentage of your marketing budget to dedicate to it? you got around 4.5 million instagram followers on the van's

acounty around 15 million. nearly 16 million on facebook. a good number on twitter too. where are you getting the biggest bang for your buck and how much of your marketing budge is shifting in that direction. >> we shifted a great deal toward the digital front and the social front. so that for vans is critical. and most of them will get an actual individual response. we find all the platforms will be really relevant. the leading multiplatform young stars of today with over 32 million followers each. and a lot of what they told me was they have to be active on multiple platforms because they will move constantly. for us it's across multiple platforms and a dramatic increase in the overall investment on the front. >> increasingly in footwear it seems to be about performance

but it's nike with the self-tying shoes and shoes that will lead your chemical properties. how much are you under pressure to increase the performance aspect of your property. and you say it doesn't look too technical. however we have brought out pro classics and brings in very technical performance features. and now an all weather mountain addition version of it that is suitable for multiple climates. it's really about what we feel pressure in the industry to do. >> revenue up 14% last year. kevin you're doing something right. we appreciate you joining us. >> thanks, kayla. >> on this milestone for the

company. >> thanks, everyone. >> europe is about to close in 15 seconds. >> we make gains on the european stock market during the course of the session. german production was down after january. so it's interesting that through the session you see a lot of the pharma stocks rise as the deal is not only called off and it's a huge amount of stock and $40 billion in cash by the end of the year so your question comes if they're dublin based do some of these stocks come back into play as take over targets? and also belief that they're going through $32 billion will not be effected too much by the changes in the tax regime. the minors have moved to the downside. the airlines moved to the down side as well. they're leaving affairly push you len years of strikes and

warning and easy jet came through after having suffered over 600 strikes due to french industrial action during the course of the quarter. so those guys are down. the other interesting thing gaining traction is that u.k. prime minister david cameron after yesterday in birmingham, really failing as far as many people are concerned to answer questions about his arrangements in panama. there's a trust set up by his late father which according to those reports has not paid tax. cameron will not benefit from offshore trusts and funds in the future. in the future. this is important for financial markets if it means that he is less able to argue for the u.k. to stay within the european union for the referendum june 23 if his leadership comes under further question. it's interesting to note that since the belgian bomb blast support for staying in the eu has risen despite the commentary that you got within this country as we're working our way to

that. guys back to you. >> thank you very much. a big night in wisconsin for ted cruz and bernie sanders. the question is will any of that momentum carry over to the next set of primaries? we'll talk about that in a moment. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen. hii'm here to tell homeowners that are sixty-two and older about a great way to live a better retirement... it's called a reverse mortgage. call right now to receive your free dvd and booklet with no obligation. it answers questions like... how a reverse mortgage works,

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>> good morning. here is your cnbc news update at this hour. syria showing an on going battle between syrian forces and militants in that country. is syrian army launched a counter offensive to recover a local village overrun by insurgents just a few days ago. the obama administration will transfer $589 million in funds and left over from the fight against ebola to the fight against the zika virus. much of that will go for development of a vaccine. gap apologizing after receiving criticism but an add for the company's children's clothing line was insensitive. it features an older white girl resting her elbow on top of the black girl's head. critics say the black girl is being used as a prop. amy schumer is not happy with

people magazine. this after being listed on a plus size edition of the magazine. she says she's not plus size and said the magazine never contacted her to let her know she would be featured. that is the cnbc news update this hour. i'll send it back downtown to you. >> thank you. a big night for ted cruz and john harwood is live in washington with more. >> this is the night that ted cruz and bernie sanders have both been hoping for when they had solid victories over the front runners in their party. donald trump and hillary clinton in a big important state. wisconsin was that state. let's take a look first at the democratic numbers. bernie sanders with a substantial margin of victory over hillary clinton and then you look on the republican side and ted cruz got a double digit victory over donald trump. 48% of the vote. john kasich well behind in

third. this is the reflection moment in this republican campaign. >> tonight is a turning point. it is a rallying cry. it's a call from the hard working men and women of wisconsin to the people of america. we have a choice. a real choice. >> but was this really a turning point. that's the question that's going to play out over a couple of weeks. first of all, because of the democratic appropriation of delegate it will be very difficult under any circumstances to make up hillary clinton's lead in delegates and on the republican side ted cruz is way behind donald trump and the race is heading toward new york state which is the home state both of donald trump and of hillary clinton. polls have shown both of those are ahead. if they can hold the leads the talk of wisconsin momentum may shift in a different direction. >> but this race still in motion. stick around for a moment. donald trump has been pretty

vocal about how am handles it's privacy as well as where it does it's manufacturing and now in an interview with the daily news senator bernie sanders also took a bit of a shot at apple. >> apple is not destroying the fabric of america but i do wish that they manufactured in the united states instead of china. >> they are not destroying the fabric of america but he brings up this manufacturing and then the issue of taxes. john. i frankly find this frustrating because we had donald trump first talk about the manufacturing issue. we talked about that. they do manufacture more in the u.s. than a lot of competitors do and they also pay a lot of taxes by technology company standards. does this show a level of ignorance on bernie sanders part about how apple's business works and how the technology economy

functions or just an overall focus on other aspects of the economy and his standard economic message? >> i think it's about presidential politics pure and simple. look candidates are going to get american companies for taking jobs overseas. that's why you hear donald trump saying he's going to reverse actions taken by ford and threaten to take benefits away from them. hillary clinton is proposing claw backs for companies that shift overseas. this rhetoric goes across the board and so in the case of bernie sanders when he says they're not destroying the fabric of america that's partly because apple is a popular technology company but he wants to critici them for sending jobs overseas. these businesses go oversaes for less expensive manufacturing and it's not clear that any

presidential candidate can do much about that. >> john, what is the impact from a 30,000 foot perspective on this daily news interview on the sanders campaign? is it something that is just getting a lot of buzz because he's willing to say when he doesn't know the answer to something or do you think there's a material impact and he's seen people that trust his believes and he'll be able to execute things where in this interview he acknowledged that he wasn't sure there there wl there were certain laws behind the things he was proposing? >> first of all this interview is probably getting more attention than it deserves for whatever impact it's going to have on the race and as for how much it can damage sanders, sanders has a very small chance of beating hillary clinton as it

is he had an interview with editors trying to poke holes in his story. i'm not sure that this is going to be as big of a deal as some of us in the media made it. >> john, thanks. a very revealing look at the wealthy on this week's episode of secret lives of the super rich. but first, rick santelli. what are you watching today? >> john harwood, you can't repeal the laws of economics but we're trying to do that at every term whether it's inversions or the notion. bernie sanders there may be a big fire sale. inventory close out. what's going to be on sale? how much will it cost? you'll have to come back to find out after the break.

>> shares in the green despite questions over an executive shake up. diana has more on that story. >> those questions still linger about the shake up. one firm though sees opportunity in the turmoil. barclays saying given the recent pull back due largely to a dispute with the company's founder they now trade at a discount to the same large cap peers which we believe discounts any management related uncertainty. now a source familiar with the situation tells me that the outgoing ceo is addelment about

not leaving the company before may of 2017 as announced monday. since the beginning of the value creation strategy which is to buy less land and focus on shareholder returns, total returns has been 106%. that's close to dr horton. it's more around 146%. now debt to capital has gone from 60% to 30%. we will get more insight into what's going on on halftime when the grandson of the founder will join scott and the traders. back to you. >> we cannot wait for that. let's get to the cme group in chicago. rick has been on fire all day. let's get to the exchange. >> the only reason i'm on fire is because the world is filled with dry tender. that's the cornerstone of about every major dynamic these days.

you can't repeal the law of economics. if you're profitable you survive. if you're not you better hope you're in a socialist economy because that's the only way you'll survive. it's all about profit and all about how much profit gets taken away and what goes to the bottom line. taxation. it's necessary. we need all the things it buys but in the end the rules that dictate what taxization is and what levels it occurs at, that is very important in creating new businesses and planning for the future. when you tear up the rules of the road all is lost and it's all about supply and demand. that's what i am going to talk about. supply and demand and securities. the journal had a great article.

remember how we were talking about yields especially yesterday. this was in the paper today. many government bonds trade below zero yields and the only part i'm interested in is the fed holdings of treasury debt account to close to 20% of u. s. government bonds outstanding. bank of england's holdings account for 26% of u. k. government debt outstanding and bank and japan 30% of japanese government debt outstanding. wow. okay. so there's basically your supply demand story so if that's how many are owned by the central bank what's left is much smaller for everybody else. so a week from tomorrow we have our -- two weeks from tomorrow, had my date wrong today. i apologize. 21st of april. they tried to get it closer to zero and we have been as close as four basis points about a year ago. but the point of this is now that we're in this where the

risk is back on. risk on. so what it means to me is before the meeting many investors would rather hold the best which is sovereign credit and the best is grading on a curve considering central bankers have printing presses so you want to watch risk and the better risk improves if the carpet gets pulled out, what happens? it's the big rush back into the sovereigns. the guilds, the treasuries, this dynamic is probably the most aggressive as we get close to some of these big central bank meetings. might be clearly buy or sell fact. and we could debate as to whether it's working out for bernanke and yellen. back to you. >> thank you, rick and the secret lives of the super rich we have to slip into the more

comfortable lives of the wealthy. >> well we did some undercover reporting and you can't buy the world's most exclusive lingerie in any store. you have to be invited and the store comes to you. check it out. >> the fitting experience usually takes place at a posh hotel suite. pops a bottle of bubbly and shows her klines the line. >> $700. if you'd like a gold fitting on your piece we offer those at $400 per piece. >> two 18 carat gold slides and rings boost the basic bra price up to $2,300. and then there's this. but don't call it underwear. >> we have a lace nicker which has nine bits of 18 carat gold and that retails for $18,000.

all are handmade in english using lace and french silk. >> now due to discretion they wouldn't tell us who their clients are but they include a lot of pop stars, celebrities and new york socialites and the biggest clients are in the middle east. back over to you. >> thank you. i used to get a little uncomfortable and my mom would shop for certain clothing but i guess on tv it's more comfortable to watch. it's still uncomfortable for all of us. >> a little bit. coming up, survey monkey announcing a new product but first major news under the new ceo. a peak under the hood next.

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survey monkey which was named to last year's disruptor 50 list announcing a move into an entirely new business. data and analytics on mobile apps. joining us now with the news and interview with the ceo. >> that's right. the world leading online survey company is launching today survey monkey intelligence and data and analysis of over 1,000

apps targeting developers as well as marketers. >> when you think about businesses moving to the mobile device all customer sen trick companies need intel about their customers in terms of download and time spend and revenue. that's what they offer. >> the platform is different from the rival app and that it's a freemium model as well as growth and declines over the month. and one added 6 million users while uber is losing over 2 million users plus a couple of paid tiers from $79 a month to just under 1,000. they provide access to user engagement as well as revenue data plus the ability to compare a range of apps and see user overlap between apps like howl tinder users are also using match. saying the company will generate

more than $200 million in revenue this year with margins in the 35% range. today is a big step for survey monkey. it's the first big launch since the tragic and unexpected death back in may. >> thank you very much. when we come back, whatsapp tightening up security details. more on that in a minute. ♪ [engine revs] ♪ ♪ [engine revving] the all-new audi a4 is here.

in a sense running a hunt for what he is calling a dream ceo job and says the assets are durable. valuations low thanks to a collapse in confidence. comes on the heels of doing very well and general risk on environment which has stocks close to session highs. >> but that is a very closely watched stock and the come mens come as the company yesterday announced its probe had ended and then reports yesterday afternoon about potentially get

a default waved by lenders. that would be very valuable and material for the company. >> and taking encryption to a new level. they already announce only centers and recipients to see messages but now end to end encryption as well as iphone and other devices taking the conversation to a billion users into the realm of secrecy. and encryption issues are more important and governments worried about fighting crime. and meta data is still available but this strikes me as a nuclear level of resistance to some access to conversations. we already had brazil reacting against facebook. jailing an executive over the issue. the ballot continues.

>> this is what the president mentioned. it was the equivalent of a swiss bank account in your pocket. but we're moving in that direction. >> overall a market being supported by oil and what was the biggest draw down for this week of the year since at least 97. our thanks to them. the half begins now. >> welcome to the halftime report. our top trade this hour, the board room drama inside one of this country's largest home builders. the ceo is being told to pack up and get out by the company's 85-year-old founder. his grandson and a soon to be former board member. he is in the middle of it all today and joins me now in a cnbc exclusive interview. he's live with us today from chicago. welcome. >> good to see you. >> you and your grandfather say you want him t