e. real is an animal rescue. amazing is over twenty-seven thousand of them. there is only one place where real and amazing live. seaworld. real. amazing good friday morning. it 18 clng a.m. in the head quarters in seattle and 11:00 a.m. on "squawk alley" and we are live.

♪ welcome to "squawk alley" this friday morning. kayla tausche and mike who is here to talk about a number of things, including amazon who is posting the most profitable quart quarter, and sales are up 64% to over $2.5 billion and jeff bezos has seen the net wealth jump $6 billion in 20 minutes, and also joining us is ben schacter over at mckwor rare ri, ckwory and wt

who said that if you want to beat margins quarter to quarter, it is best to go somewhere else, because it is hard to know who is going to come out better than expected. >> yes, and they will come out once in a while, and then say, hey, we have insanely profitable businesses, including aws which is this sleeping giant that everyone is sort of woke up to last year when they started to show it off. it is really, you know, they prove, and it has taken a long time the train the street to let amazon do this sort of thing, but now it is seeming that they are fine to do it. >> and ben, what surprise d me s that everything outside of aws, and we had sort of seen the growth rate on, that and people expected it to be about where it was in terms of the revenue and margin, but the international retail, and the electronic in general merchandise growing at

27%, and pretty much in line with north america, and we had not seen that growth rate out of international in years, and what does that signal about amazon's prime strategy and how it is to work going forward? >> well, in general a phenomenal quarter across the board on e r every business, and the points that you are highlighting are dr driven by prime, and it is a fly wheel that cannot be beat. we literally don't see any real come petition to prime over tim and in fact, they are going to to be more aggressively adding more benefits to the manager, and we see that it is careerly working and it is working. >> and it is over the model, and we have a prime modelle, and is that going to change the equation for prime or make it more profitable? >> well, i think that prime is really one of the key pillars and the futures of the business. they are obviously, there is, you know, a lot of folks that

they are are sort of bringing on, and they can bring on the people who are worried about spending $50 or $100 in a chunk for a year-long thing. look at the way that spotify on boards people, or netflix, that you can pay a la carte or month at a time if you want to cap sell it, but they will add enough stuff for the prime subscribers that it is going to be indispensable for a lot of folks. >> ben, every time there is a good quarter for amazon, we fall into the selective amnesia where we don't believe there is another one where the margins are a worry or they will go crazy on the spending on the infrastructures, and you can't guarantee the investors that we won't be there again? >> of course not. but they are e shoing when they have the quarters where they do invest, it is a payoff down the line. that is the thing with amazon, are you going to be reward ed for the investments and what they are showing with prime, yes, the investments are paying off, and if you are going to

look at q4 where the margins is going with demand, it is a good thing, and we will take it all of the time. >> and now, february, it is close to getting back the losses of 2016. ben, thank you so much, and ben schacter over at macqua rishgse. >> the company brought up the last loss of last yee, and we talked to the ceo jeff weiner about what changed over the last month? >> we rare have seen a stronger than expected performance relative to the plan internally, and as the year is progressing, we get better visibility as to how we are performing. in addition to that, some of the bets that we placed in the latter half of last year for example, we relaunched the mobile app which exceeded the expectation, and we have seen accelerating growth in temperatures of the consumer engagement. >> and linkedin is down 44% for

the year, and i know, that jon, the story is near and dear too your heart, and cramer pinned him down on whether or not this last kocouple of months was abo something structural, and weiner did acknowledge some execution element to it as well. >> yes, and i can't help but wondering that you are seeing some companies are cautious in the way they guide and you wonder, how much are they sandbagging or trying to reset the expectations. last quarter to this quarter, around certainly, a number of different headwinds like a company like linkedin faces with the marketing solution, and you have all sorts of things happening in the advertising market that are complicated and difficult, and it seems that at core, if you are looking at social networks or the socially driven networks that have growth, that have value, that have moats around them, contrast wit with the struggles that twitter is having. there is value in the linked in if they can execute, but the question is if they can execute on the grand plan to continue to adding to the user-based

services that they can buy classes and take through et cetera, and turn it into a big revenue grower. >> and clearly, the plan was less grand and the company got religion, and mike, obviously, the company is outperforming now, but they are outperforming on the lowered expectations from earlier in the year, and it is a cyclical business, and ver tizitiz i -- advertising and the job marke market, and has the company re-set expectations for itself? >> well, what is funny is that linkedin has always had a conservative approach to guidance and every quarter they outperform and every quarter, they tell the investors be careful, because next quarter may not be bad and we are trying not to go crazy and the one quarter that they don't do as well as everybody sort of expected, everything goes completely, you know, not well and south and the stock tanks. i think that they are going to be continuing the conservative strategy. it says a lot about the market,

and how investors and analysts feel when that sort of winter comes for these companies, you know. that had a lot to do with the how linkedin performed, but thethey are still going to be as c conservati conservative, and we will see how the street reacts to that. >> and we did ask him the narrative of the social in general and survived twitter's numbers and then facebook and no surprise that he said it is going to be here to stay, and you can see the volatility in the metrics that we got in the past few days. >> and linked iin is in a vastly different business than twitter and facebook and a good thing or a bad thing, but it is a professional network focused on monetizing the users and not just through the advertising and not even through primarily advertising, but getting the people and the companies to pay for services.

>> but what they have in common is the usability of the product, and the necessity of the product at the end of the day. >> yes, and you could say that about iphones, too. >> yes, and finally the bizarre scene of the nfl draft and moments before it began, a photo was showing the top prospect larry tuncil wearing a gas mask smoke marijuana, and then after the picture was taken, jon gruden blamed it on there. and he said, if you are a young kid, put it away. if you want to be a pro football player, somebody is going to hack your account. and that response has gotten some criticism itself, mike, on twitter and not surprisingly, but what does gruden have a point? >> well, yeah. first of all, i want to say thank you for calling me an expert on the gas masks and bong hits, but i think that -- [ laughter ] and you know, it is a different age, and like i think about in

college and facebook coming of age, and these kids, they don't understand, but it is continuing to the rise of snap chat, because you don't have the liability of some massive bong hit that you did in college when you were not thinking and posted the video to facebook and somebody grabbed it off of the phone and posted it on twitter and why not keep those, you know, stupid youthful indiscretions on the place where it is eventually deleted over time. >> and it sort of reminds me of the ads on taxis for page 6. if you don't want it on page 66, don't do it. is that the lesson here? >> well, i don't think that is the fair. we should have the freedom to -- i'm not saying go out to hit the gas mask, but if you think that

your phone won't be hacked, that is not realistic, and the services that you are using when you are partying, i geuess, and what that might look like if it is even cully out later, but it is again, a good book for snap chat, and twitter can say, hey, we influenced the nfl draft pick, and it is a el realtime live network that has some, you know, influence in the world. >> i am not sure that is a badge of honor. >> this is one that you don't mention in the earnings call i would think, but i wondered to what extent is social media so much a part of the fabric of life that kids, you can't tell them not to have a facebook account or twitter account if you want to be in the nfl one day. how much of it is about learning to use those things versus staying off of them entire ly. you kids and i have kids, carl, and i'm scared to death of social media in their era. i have, you know, a niece essentially who is afraid to

dance at the middle school dance, because of what people will put on the snap chat. >> and what can be put on #overheard. and apparently goodell said it is part of what makes the draft so exciting. >> wow. >> and so the league, itself, i guess that anything that draws the eyeballs. hey, mike? >> i guess so. i think it is -- i think that you will see a whole lot of the training or the guidance from the parents, too, as they have to realize, okay, my kid could be, you know, is circulating in the youtube video as a "star wars" character or something that could follow them, and thinking of the repercussions when they turn 18 or 21, but honestly like carl said, sorry, jon, it is not going to be keeping them off of the platforms entirely, because it is not realistic, but it is what we do, and how we interact with the world everyday. it is more which ones are you going to be using to post the

crazier things that you don't want out there. >> and if people don't stop using the e.mail because of the discovery processes and lawsuits. >> and time and time again, they have learned the lesson there. and mike, have a good weekend, mike isaac of "the new york times." thank you. >> thanks for having me. >> thanks again, mike. and we can did see chicago pmi and michigan consumer sentiment coming in slightly lower and it is the last trading day of april, and we are on pace for the worst day of the markets since mid-february, and consumer discretionary stocks are boosted by amazon and royal caribbean, and we will talk about it later on in the hour, and meanwhile, warren buffett responded to carl icahn's warning of the reckoning coming in the markets. >> well, you know, there were probably, this is the most wild, and i guess 50,000 people or more that bought the stocks, and 50,000 people, and so i don't kn know if i would pick out any one of them and put too much weight in what they did.

>> of course, buffett's trading experience is longer than carl icahn's, but nonetheless, we will have a special on "squawk box" live monday from 8:00 to 9:00 a.m. >> and now, original investor in uber and siri says that it may have lost the ways, and we will explain. and tougher quarter for groupon which lost more than a triple than a year ago. with e will talk to the ceo. >> and donald trump is set to give a speech in silicon valley, and will the younger voters will listening? more on that when "squawk alley" continue continues. post nine is sponsored by fidelity investors. serious ideas for serious inv investors. ] but you'll be glad to see it here. fidelity -- where smarter investors will always be.

if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

it has been a rough week for apple, and shares are continuing to trade lower after we saw the shares plummet after the earnings report and down another 2%, and the company had the first quarterly sales draft in two years. the billionairactivist and investor carl icahn told us that he has sold his stake. take a listen. >> we no longer have a position in apple. in apple, today, as opposed to maybe even six months or a year ago, while in this one, there is no need for activism assuming that you can even do it, because i think that they have a great management team, but in this

one, you worry a little bit or maybe more than a little about china's attitude in what you have been seeing. >> on top of china headwinds, some investors wondered if apple is facing a product innovation drought. joining us from palo alto, and early siri and uber backer shawn caroline, and so to that question, shawn, if apple is facing a product drought, when you are looking at the recent products that they have launched what would you say? >> well, i have to caveat, i'm a huge apple fan, and i have the apple watch and i buy most of the products and so i love the apple product, and i want them to is succeed. there is a ton of talented people there. but i would say that, you know, compared to how excited people were when previous product generations launched the new ones are not hitting the mark the way they used to, and of course, i'd love to see that turn around. >> and tim cook did say on the

conference call that the company did 15 deals this quarter, and former evangelist guy kawasaki said that it was due to innovation. do you believe that the onus is on them to keep the ip novation growing even from outside of the company? >> well, the best companies will do it. you will see google come up with some stuff internally, and externally, and google map, and youtube, and apple siri where i was an early investor when they had an, ternl ak with -- an external acquisition, and tucked it n. and so what the world wants to see them doing is to do stuff that nobody ever thought of and when you have the thing in your hands, you are amazed by it, the ipad and the iphone, and these are the types of

innovations that create the new marketsb, the ipod and nobody thought that you needed it up till it was there and you loved it, and you could not live without it. >> and it is jon fortt, and i feel like apple is a company that is built on craft, built on the cure ration and struggling with being as big as it is. and over the years talking to the apple executives they would say that we want to make the big bets and have a big impact on lots of people, but as big as the iphone got, they started to feel like they have to make bigger and bigger bets, and hey, they have hundreds of billions of dollars to do it. maybe they are just overwhelmed with all of the possibility, and the fact that if they play small ball nobody is going to be really noticing, because they have had such big hits rekrecen. >> yeah. yeah, i think that is true, but that is -- i think that is what is a little bit surprising about the innovation is that the things that are the biggest are the things that are the most simple, and most fundamental, and think of siri and, you know,

in substance just speaking to this device, and it is navigating the day. so i think that, you know, tapping into the human need tas are there and then servicing them in an inkrcredible way is what they need to do. they really need to just figure out without steve as the amazing product owner where are the most talented individuals within the inside of the company. i believe that tib novation is there, but there is a different decision-making process to be put in place to let the voices that before, they couldn't direct hundreds of millions of dollars really to come out and shine and lead new products. >> whether you are apple or exxon, red tape is something inevitable at these big companies. >> unfortunately. >> thank you, shawn caralon,

early uber and siri investor. and now, in silicon valley, donald trump is going to give a speech, and does he have any hope of winning over silicon valley?

>> republican frontrunner donald trump kicking off his california primary campaign after a chaotic and violent night in southern california heading to silicon valley today, and josh lipton is there with more. josh? >> well, kayla, i'm here in burlingame which is north of silicon valley, and in an hour, donald trump is going to be here at the hyatt behind me rallying the supporters, and we know plenty of them. right now, trump is crushing senator ted cruz by more than 17 percentage points according to the real clear politics. in silicon valley though, a much different story, the tech's elite have come after trump including facebook's mark zuckerberg who used the

developer conference to criticize not by name trump's plan to build a border. >> i am seeing people turn inward from the cop nexted world and community and i hear the fearful voices distancing people as they label as others. >> and beyond the ceos, and on sandhill road, they are also bashing him even the right leaning ones like mark an dree san who said that he would support hillary clinton if trump was the nominee, and then there was of coast -- keith rabois who said that mcconnell loves trump, and of course, it is possible that trump could possibly --

>> well, we are having audio troubles with josh lipton, but obviously, an interesting day as trump heads to the valley given what we saw coming out of some of the valley's illuminati. >> yes, indeed. as the tech race is heating up, one company is seeing social activity around the user's political and geographic location, and so we will go to the founder and ceo of yik yak, and tyler, good to have you with us. >> thanks for having me. >> and so first of all, what is going on with the yik yak, itself? excluded from the google play, and there is talk on the college campuses about people are concerned about the environment it creates, and maybe it is falling out of favor, and various download charts that suggest it is not as pop ular a it once was and you have

executives leaving and tell me what is happening at the company to work on growth? >> yeah, we have done really good growth over the last couple of year, and we are excited in the way that we are taking the unique approach with the social networking. we enable the people to kconnec with the people around them, and it is an awesome hit in the college population. >> but, given all of those things that have happened recently, what is the trajectory now? are you retooling now at all? >> no, not really. we are seeing the awesome, and continued engagement with the college population, and so we will continue to keep building the features to help take it to the next level. this week, we have launched private chat which allows the people to chat on the one-on-one basis with the people around them. >> and what kind of political discourse are you seeing on there, and are you able to correlate that discourse with the results that we are seeing out of the primaries particularly among younger voters?

>> we are seeing a ton of activity around politics on yik yak. it is cool to see that millennials have all of their conversation on yik yak, and so politics naturally will make its way there. and what is most awesome is watching how candidate approval ratings have shifted from months ago until recent weeks. it is some big changes. >> there has been some criticism, tyler, of social media platforms where the users can be anonymous, and they say that it allows them to be nasty and post things that they would not necessarily, and yik yak is anonymous, and what value does it bring that you could not otherwise be if people had to be themselves? >> yes, the mis-use on the social network is a common problem across the industry, and we have done tons of things to make shure that people use our platform in the right ways. what makes us unique is the way that we let people connect locally, and we are going to continue to make sure they use that in the right way. >> how can you affirm given that

people are anonymous when you are doing polls for political temperature for instance that those accounts are individuals and that those poll results represent individuals and not just people signing up for a bunch of accounts or bots for instance? >> yes, we have a number of security measures in place to make shure that the users are e real, and the results that we are finding is real, and beyond just poll answers, we are dyeing into the analyzing real conversation, and real yaks and texts on the platforms that are coming from real users. >> all right. tyler, thank you so much for joining us. and interesting political season where social media is playing a role. >> thanks for having me. yourp closed aboeurope clos ago, and simon is here with the wrap-up. >> yes, disappointing, and the big banks are moving to the

downside. we were down anyway catching the down draft from wall street last night, but they have have further extended the losses. the data is fascinating in europe today highlighting the problem of the european central bank trying to set policy of the 18 countries. and we have deflation back for apele ril, and minus 0.2% with the headline level. but check out the growth figures the gdp figures coming through as jpmorgan put it the eurozone is moving into the fast lane. and remember what we got from yesterday from the united states, the print of 0.5%? these are annualized rates and t the eurozone is growing four times as fast as the united states, and spain is growing six times as fast as the united states. not that is helping the stock market if you are looking at where we have traded in the course of the year so far, and for the month, we are closing out positive, and today's losses have taken us back down, and a gain of the month of 1.46% in april, and massive

underperformance on the united states if i were to draw you a graph from the beginning of the year which means that the down overalls are tracking from year highs more or less. and the top movers today, and credit suisse is interesting with negative territory and other banks as the ceos are holding the sharehold toers be patient, and british air wways a result of the paris and brussels attacks they are cutting back some of the expansion plans within europe, because they say that the demand is too soft to warrant it. as we are heading into the weekend, one of the things to watch is the decision coming out of the canadian ratings agency dbrs on the portugal debt. it is technical, but if this rating agency downgrades portugal, it means that it is no longer eligible for the ecbqe where the banks post debt as collateral. it is unlikely, but if it does,

there is going to be a lot of commentary over the weekend. >> safe travels, simon hobdz. now, coming back after posting a loss this quarter, we will have a conversation with rich williams from groupon. ♪ (music pl ♪ throughout) uh oh. what's up? ♪ ♪ ♪ does nobody use a turn signal anymore? ♪

hello, everybody, i'm sue herera and this is the cnbc news update. french police forced the use tear gas at an anti-government prot protest in france. it is aimed at the labor laws and tow -- thousands have been gathering at the france depub leek. last night at the draft, laremy tunsil was projected to be one of the top picks, but yesterday, video posted of him smoking marijuana through a gas mask. it was posted on a twitter account, and he says that his account was hacked. he was drafted by miami. and now, currency teen preg nan si is on the decrease. it is a decrease since 1991. arkansas, mississippi and new mexico have the highest, and massachusetts and new hampshire with the lowest.

it is the final bow for the elephants of the barnum bailey and ringling brothers circus. all will retire to a 200-acre conservation scenter run by activists in florida. they have been fighting for decades to have the animals pha phased out of the show. now, back downtown to "squawk alley ". >> all right. make makes me happy for the elephants. and groom pot is reporting a lar larger than expected loss on the stock which is down 16%. let's bring in the groupon ceo rich williams, and our own julia boorstin. >> thank you, jon, and thank you, rich. straight the off of the bad year, and i have to ask you about the groupon stock. the stock is down about 16% on news that your losses continue to grow. investors don't seem to have a lot of confidence in this company, and how do you address the concerns? >> well, i mean, it is hard to

predict the daily moves of the stock market, if i could, and we would be having a different interview from a different kind of place, but i think that net, we repretty happy with the progress. we had a clean beat of revenues around the ebitda and we are on track of where we expected to band where we need to b and we are improving the fundamentals of the business and adding a million customers on the marketing spend, and more than we have in years ash and added 75,000 active deals in north america alone to the marketplace. we continued to make real strides in the shopping margins with the gross profit dollars increasing 51% year over year, and so we have made solid progress, and we continue to be on the good track, and if someone expect ed por than that then being on the progress and continuing to execute against our strategy, then it is hard for me to explain it.

>> but, rich, the first quarter loss more than tripled, and a lot of it is investment in the marketing, and investment which the company does not believe will pay off until 2017, and why are the marketing investments not going to be paying off until so sooner, and not until 2017 which is so far from now? >> yes, we have made a pivot in the marketing programs, and we were highly transactional, and we focussed a lot of the marketing dollars on selling the individual units or the groupons, and we have shifted the marketing expense to acquiring customers and lifetime value, and that is the nature of the lifetime investment to pay itself off over time. what gives us confidence is that we have seven years of history, and five years of extremely stable cohorts of customers who do spend consistently over time, and that spend builds over time. so as we are reviewing, you know, the customers that we have acquired in q 1 and watching their dynamic, and watching how they are spending, and throughout the quarter, and of course, we are predicting where the spend will go over time.

we feel really good about those cohorts, and they are spending right in line with the historical averages, and then as they continue to age, and more importantly as we continue to add more of the cohorts in as we move forward throughout the year, we expect the benefits to start to accrue in later 2016, and the back half of 2016, and the beginning of 2017. >> but rich, you looking at the customer base, you have added over a million customers burk it is still relatively stable, and are you going to be able to grow the customer base or a limit ed number of people who want to buy the kind of deals that groupon offers? >> well, the good part is that the stability of our base is there, but we are actually adding to it at a rapid pace, and adding 1 million to the north american business in a quarter is significant growth. taking it to 26-odd million the close to 27 million in 90 days, and that shows how much opportunity for us to continue to grow the base. a big piece of that, and the

confidence in the ability to grow it is just going to get to us, what we are selling on groupon? we are selling stuff that people do everyday, they go the lunch, and get the hair done, and the nails done and the massage and go out to do things with their kids. that is all of the things that we offer on the platform, and then some. we believe that the addressable market for that is much, much b bigger than 27 million people that we have in the u.s. or the 50 million-odd people around the world. >> rich, you are sounding optimistic right there, and right next to you, we are seeing the stock price down 15%. are you saying that the investors don't understand the company or they have it wrong? >> well, i think that investors largely want to see us continue to execute. and you know, i think that a lot of the people see the potential in groupon, and the potential for us to expand and local in particular. and we have not had the greatest and the most consistent track record of the delivery against the expectations, and this is the second time in a row that we have exceeded expectations on

every level, and people want to see more of it, and get into the consistent and more predictable pattern, and see us continue to grow which we are on the great path there, and yes, i'm confident about that. i see how the team is aligned against the four strategic prior tis and executing and improving ways everyday, and that is going to give me confidence and i'm excited about the future for groupon. >> rich, we appreciate your taking the time to come to talk to us, and rich williams, groupon ceo, and back over you at the nyce. >> thanking you, rich and julia. and we are ten points away from the session lows with the dow down 160. the market losss have been accelerating throughout the morning on a day when the major averages lost 1%, and the nasdaq is within 1% of falling back into the correctional levels, and we are on the track for the worst week of stocks in three months. "squawk alley" back in a minute.

coming up on the the "halftime report" we are all over the market sell-off, and the apple one at a high and one at a e low, and what to do with the stocks. and what jim cramerer said about far pharm pharma, and what to do about that area.

and we will also talk about our top picks of the stock draft. >> thank you. and sometimes markets are out of sync, and that is the title of the piece today, and we can look at the very big markets and easily come to the conclusion, and look at the underpin in underpinnings of the economy, and look at the stock market and try to correlate some of the data points, and it is going to be very difficult. one case in point that comes to mind is the dollar/yen due to issues of the deleveraging, and certain types of the structure that krcreate the leveraging wh they come off, and we will see the dollar just getting trounced against the yen. the yen is doing better, and while the yen is doing better, the negative interest rates of course, and we are will see what is going on with the nikkei and so not only out of sync, but a lot of it has to do with the po policy, and a lot of it has to do with when you have the markets out of sync, and you will have many positions that are old on one side of the boat. now, when it comes to the u.s. yield curve and the relative

value trade, things are changing, and things are going to be changing rapidly, and we will go to the white board for a simple observation, and a silly one, but you will see the reason why. if you are going to be looking at the week areally closes, they are a higher priorities than the daily close, and the higher the time frame, the more prioritized they are, and it looks like the bonds will have a yield of 20 basis point, and you have to go back this many weeks all of the way to february 5th of this year to find a higher yield close. well, when it comes to 10, it is a different snacenario, becausee are hovering at 1.83, and last week closed at 1.89 and the week before 11.75, and the picture is speaking loudly, but the point of the exercise is that the relative value trade may be trading, and the big lofty issues sometimes takingts the precedence over the fundamental s and we know, and simon pointed it out along with many on cnbc that europe is bet e. one that comes to mind is spain.

maybe they will have a high unemployment rate es ppecially among the young, but today, it is better, so we will see this going on, and the point is that we learned something else this week, and that is pretty much the fomc is not looking like they are going to be tightening any time soon in my opinion the way they want to set everybody up so there is no surprise, and i did not get the feeling with the statement with regard to the next meeting in june. so a steeper yield is something that you may want to payt attention to, and it is looking like europe is leading us, and moving high ner in the short en like the 2s and the 3z on the u.s. side, and definitely going to have more buying, and the lower yields due to the notion of the fed. something to think of. and jon fortt, back to you. >> thank you, rick. coming up, royal caribbean shares are falling after the earnings and profit top analyst s. the ceo of royal caribbean is going to join us in a cnbc

exclusive on "squawk alley." t 25 years, i've researched more than 450 financial products. i found that one of the best-kept secrets to help you plan for your retirement is the home equity conversion mortgage. it's a line of credit for homeowners age 62 or older. and it's offered by a company you can trust - one reverse mortgage. call the experts at one reverse mortgage now, find out if you're eligible, and get your free information kit! the home equity conversion mortgage line of credit... can help your retirement savings last longer; strengthen your retirement plan improve cash flow; give you access to extra money when you need it and i recommend that every homeowner who qualifies consider getting one now. call one reverse mortgage right now!

shares of royal caribbean are failing to respond to the beat of 26 a share, and simon hobbs with more on that. >> yes, the royal caribbean's earnings were helped by better than average pricing to caribbean and passengers spending more, and that is drinks and internet access, but there is disappointment that the outlook for the second quarter

may be soft. joining us from exclusively of miami richard fain, the ceo of royal caribbean and wo i like to call the founding fathers of the modern day cruising movement. how do you see the quarter, sir? >> well, we are ecstatic, and we had a better quarter than our guidance was, and we had a better quarter than the street estimate was, and we have raised our guidance for the year, and so instead of getting the 25% increase this year in earn, we are up to 30%. we are feeling good about all that is going on at royal caribbean. >> how about the share price not reacting? >> well, obviously, we chose the wrong day the come can out with the earnings, but i think that, it seems to be a great deal of tension in the market. the only thing that i can think of that is going to be helping is if they all took a cruise, then maybe we could do better. >> i want to take a cruise mond monday, because wane to be on the rival's carrier, carnival, and the first cruise from the u.s. mainland to cuba in over 50 year, and what i don't

understand, richard, and i describe it to you as a founding father here, is why you have not yet got permission to send your cruises there? norwegian has not either. and i know that carnival is doing something touchy-feely, and unique in that respect, but why not a better green light on this, because you have put hours on this. >> well, e have all made our application to cuba, and carnival did come out earliest, and start with the special program they have. but i think that the approvals are will be forth coming relatively soon, and we will all be going there. cuba is not going to be a huge part of the portfolio for any of us, but it is an interesting one, and it is one that the american people will enjoy from cruise ships going forward. >> i imagine, because there may be 160 ships in the caribbean at any one time, and half a million people, there is simply not the

space for you all to dock. and even if you do get permission, the people can't go, and just lie on the beach, you, too, you will be restrain ed in the type of cruise that is going to be offered, because it has to be described as a people exchange? >> yes, we will be doing this as part of the people-to-people program, but it is a thrilling program. i think that the american public will embrace it. will be very happy to go and see what cuba has to offer, but as you say, the infrastructure is not there yet. and so it is going to be a while before the numbers in just in quantification get to be very high, but it is still an important part. and the other thing that it is doing for us is that all of the attention on cuba is reminding our guests of what a great vacation cruising to the caribbean is. we think it is having a effect even if the actual quantities are very small now and for the

future. >> and arguably, that may have shown up in the pricing in the first quarter. and richard, briefly, because we are running out of time. i know ta yhat you are going to sending the ovation ship from europe to china, and briefly, how is china shaping up for you? because this is a key market for you, and it is arguably, i think that it as you would put it why the stock maybe was hit in the first few weeks of the year. >> i think that china is one of the great success stories. it is a market that in the last two years quadrupled in size, and for us to continue to do so well despite such a huge capacity increase, it is a testamentt. i think that our position in china, the royal international brand is clearly the leader in t the market. it proves the rightness of our strategy of going aggressively after that market. so i am really excited about what is happening in china. >> good to see you again, richard. thank you for sparing the time.

richard fain, the ceo of royal caribbean live from peopmiami. >> thank you, simon. the dow is down 189 and the worst day for stocks since 1989. we will be back after a break. d to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.

the dow is down 137 and the s&p down 19 points, and the dow and is s&p 500 and the faz dak all ma-- and the nasdaq is in t red now. and tough all of the way around, and tech has been taking it on the chin, but the biotechs h are now joining the crowd. >> and we are putting the busiest week for quarterly earnings to bed, and hopefully next week better, and the mail h historically is never good in may. >> and when you look at it on my screen, twitter and apple are among the worst tech performers of any size, and twitter down, and even more than groupon on the week down close to 16%, and amazon and facebook among the best. so you can't tell it, because it is not just about social media, and facebook doing great, but twitter not so much. >> and tebow is finally agreeing to be bought by row cuku, and t

is going to be keeping the name of the combined company which is interesting. >> and tom carston is going to be running the company, and lot of the brand equity in that company of course. and owl, it was a lot earlier today, but as kayla said a lot more to come next week. have a great weekend, and let's get over to the headquarters with scott wapner in the house. ♪ xx. >> welcome to the halftime report, and i'm scott wapner, and in fact, the s&p has given up all of the april gains, and are we on the cusp of a bigger pullback, and the billionaire investor carl icahn told us this yesterday afternoon. >> i am still very cautious, yes. extremely cautious about the market, but i do believe in general that that there is going to be a day of reckoning unless we get a stimulus. >>