in on the streets of amazon, and 11:00 a.m. in new york, and it is "squawk alley ". >> i am thinking about my doorbell and when you going to ring it ♪ ♪ i'm thinking about my doorbell ringing ♪ ♪ when you going to ring it ♪ ♪ i'm thinking about my doorbell ringing ♪ ♪ when you going to ring it ♪ yeah, i have been thinking about my doorbell ♪ ♪ oh well ♪ what is the chance ♪ >> and welcome to "squawk alley" with myself and kayla tausche and jon fortt. and joining us from san francisco kate mitchell partner with scale ventures and in new york dennis berman, editor of the "wall street journal," and thank you for coming back. and now, amazon hitting new all-time highs after the note from bernstein raises the target

from 770 to 1,000. they see e strong trajectory from the retail to cloud. they say that amazon is so profitable, it is harder and harder for the company to find way t ways to spend all of the money. separately, amazon announcing a youtube competitor called video direct, dennis, which has some irony in it, because just when the analyst says that they have run out of things to invest in, and here is a brand-new thing to invest in. >> i have known that jeff bezos for over 20 ways will find a way be it drones or videos. you cannot deny amazon as of late. the store riff to success is about the aws, the amazon cloud services, and if you are looking at the growth from that business, and the last quarter, they drew about 15% of the revenues and had about the same amount of profit as the rest of the quote, unquote amazon. here is my predick is shun for you, at some point the performance is so great they have to spin it off as a

separate company. that is interesting, and people would disagree with me, but aws is the driver more than anything for the company. >> i do disagree, and part of reason why is that google le is also out there, and they have the target set on the cloud, and they can afford the spend a lot of money to drive the prices down and affect amazon's business model for years to come if they ke decide, but the decide that jeff bezos is running ow of ways to spend money, amazon fresh, and if they roll it out, groceries are going to be costing so much money, investors' heads will spin, so don't get attached to that idea, and on the amazon direct idea, it has the potential to change the game in video, because it emphasizes n gn gaugement over w number of people, and talking about paying 15 cents per hour of streaming n. that model, one person who watches for 30 minutes is the same as 300

people who watch for 30 seconds. that is potentially game-changing. >> and while the company as not made huge strides in a lot of the areas, and the nascent areas of growth, i am wondering, kate, where the stock goes from here, and the company did guide to the profit in the upcoming quarter, so is it anyone's guess as to whether to add $300 in per share price to the stock? >> well, you know, it is interesting, because when you look at amazon, they are taking the playbook on the retail side and applying it to the cloud side. i agree with dennis that aws is where the story is s and two, they have a ton of head room there, and there are a lot of compa companies converting to the cloud, and they are bigger by multiples than all of the comet pet or the -- competitors incl google and so you have all of

the facebook users who sell through amazon, and the same through the aws platform. tons of companies form ed and high growth companies on the amazon platform to help people be effective to use the aws cloud. so there is huge amounts of headroom there, and wen yhen yo think of the new technology, they are light years ahead of the competitors, and the one to beat. >> and dennis, people who don't understand how it is rising on the incrementally better margins, but still thin, and every other tweet, what happened to the amazon fire? how much failure are they allowed to post without suffering some kind of penalty? >> well, we know the answer. he had dark days jeff bezos in the 2001, 2002, 2003 and 2004. a lot of the entrepreneurs think they have the right, but jeff

bezos has the right to try and fa fail. the fire was -- i don't think they have ever seen a single living person with an amazon fire, but that is besides the point. they have built such an infrastructure -- >> dennis, don't diss me, because i have a fire. >> is that on the fire. >> i'm the one! i'm the one on the market. >> i want to see that on the market. >> and now, from the standpoint, it is going to be used in so many ways, and it is truly remote, and think about the cargo planes with the unseating the u.p.s. relationship, and form i forming something big which has lots of chances to be powerful. but right now bezos has the right to muck around a little bit. >> and he has. >> and when you see what is happening at smart start-ups at scale. they fail to succeed and you it

rate to success and samle p a loft of thing, and what is interesting is the imples it is contract that jeff bezos has made with the shareholders, i will continue to invest aggressively and only the recent string of profit s ths that you seen, and the profits have been the result, and secondly, failures, but that is the only way to find success, so it is interesting to see the true innovator playbook played out at scale, and it is ekts troord their and i can't -- extraordinary, and i can't think that he won't find the succeed. >> and we are getting all tweets from the fire user. >> and what about echo, because i have that at home, and using it on screen before i get on screen to the talk to you guys.

>> and the company was suppressing conservative news on the trend section, and julia boorstin can tell us more about that from l.a. >> well, carl, facebook is denying a gizmodo report that they had suppressed stories about con ser servative topics were prevented from showing up in the trending section even though they were popular among the social network users. republican chairman reince priebus responded by saying f e facebook must respond, and #make this trend. and the manager of the trending topics says that facebook does not allow the reviewers to

systematically discriminate against sources of any ideological origin and we've redesigned our tools to make sure that is not going to be possible, and it is a fireable offen offense. and so this is so important because facebook reaches so many people. >> and so, jon, we have seen the politization of cable news channels and television, and is this next? >> well, this report from gizmodo does not pass the smell test. and there is only no named sources, and we are to believe that the young conservative journalists are breaking the biggest story of the year online about the biggest social network using bad practice, but they don't want to be named somehow? they talked to several people, and even the people who denied that this sort of manipulation,

and they did not name the people who denied. they needed more work on this o one, and maybe there is a story there, but they did not write the story that is in there. >> and jon, can i go in there and disagree with you, because whether it is true or not is beside the point. what is important about this story that came out on gizmodo is that it makes us ask the question, who is in control, and what are the means by which they have that control, and have we, how have we conis sented to this arrangement in in way -- consented to the arrangement in any way and as 1 billion users, it happens. people see what is trending and click on what is there, but it does focus the mind -- >> and this is a good question to lead to the story, but that is not the story. they don't answer these questions. >> whether it is an algorithm or person, and it does not matter, and how does facebook worker and how does it make the choices.

>> and kate, we know that the television stations and those stories are cureated by this? >> they have been consistently very are responsive to these inquiries from the public. i agree that you will see the power of the trending topics, and trump is there pretty regularly and say that, and the fact that they are being quite open, and algorithm, and there is a reason for them to combine two topics, "star wars" and may the force be combine with you should be combined to one, and the a.i. algorithm to do that instead of a human will, and i

like that they responded openly. it is not in the interest point of view, and they host a liberal, and conservative politicians to pete with their employe employees, and so that is against the grain, and for gizmodo the call them out, and they answered oso openly is a good sign. >> and now, with apple last june, an apple executive saying that since apple music started, they have grown more users and now spotify is saying that they have 30 million paid subscriber s compared to the apple who has 30 million paid subs, and so now, spotify pushing into the video their own shows and another vote for videos. >> when do we have time to watch all of the content created?

i don't have enough time at all, but when it comes to spotify as business, you have to admire the growth of 1,100 million people, because that is a serious amount there, but to me, the profitability of spotify is more than the profitability of amazon, and the licensing contract s wi contracts with the music publishing companies have put them in a bind. the fact of them going into the kcon serts and the videos and te merchandising is telling me a weak n weakness in the core business and try to creep into profitability, and still, it is a tough road for them to really make substantial profit. >> and jon, they do have a reputation for trying a bunch of things, and succeeding at a few of them, ard -- and for them to say that the core business is grow growing is a positive? >> yes, is it is a potential positive, but i agree with dennis, the product is growing sbushgs the business growing? what is the business behind spotify? how sustainable is it? it is odd, because apple is in

the position to be the microsoft of the online services, and maybe they will get it right on the third time, and they are so profitable they can get it wrong so many times before they get it right. so weird that they tend to be so different in services than product, and sometimes with the first product, apple watch no w notwithstanding they get it right, but in services, apple can use at lot of money to figure this out, spotify, so watch out. >> and kate, your thoughts on spotify? >> well, one of the things with the business model, it is subscriptions on the top line, and working hard to the convert it to profitability, but they are still converting with the increased growth, and maintaining the a 25% conversion ratio for subscribers which is is high, and the fact that they can maintain it says something about the stickiness of the brand. and we can watch all of the videos as we are walking like this across the street. and that is what me lineals

think about, and snap chat is huge, and that is important for spotify to be there >> we have covered a lot of ground. kate and dennis, thank you so much. meanwhile, we are receiving the biggest one-day game for the dow and the s&p in just about a month at nine points. the s&p 500 is up for the transport cases, and the russell is in correction territory, and cross crossed through the 200-day average, and gap posting lower than expected quarterly sales, and lot more earnings coming tomorrow, with macy's, and the gap shares hitting a low of 13%. and lumber liquidators in the red after they missed test

mates, and the in-store sales fell 10%, and the stock down 10%. and lending down after a 30% loss yesterday by lend iingclub. the former coo is here in a cnbc exclusive. and hp is launching a new individuvideo camera arm. and solarcity is cutting their estimations. "squawk alley" is back after a short break.

continued fallout for lendingclub after the ousting of the ceo with the stock down 5.5%

and trading at less than o one-third of the value when it went public. board member and former morgan st stanley board member caught up with the the scandal when investing in the same outside firm as they were considering an investment. so what impact is this for lendingclub? joining us is former executive vice president and former board member john donovan. john, it is great to see you and i'd love to get your insight on the company knowing it as well as you do, and it seems s a une situation to be in >> yes, kayla. great to be here. how does this happen? well, it is interesting to look, and i don't know more than what i am reading in the press, but certainly, a company built on tra transparency, and built on a level of the high set of objectives and a strong board, and what happens is that in the

audit, it looks like they found the information and they are held accountable for that high set of standards. >> what is the responsibility of a board of directors or the executive team more broadly to have the knowledge of the outside investments of the executives in the investments? >> well, based on the information that we are seeing, this is something that happened in march, and so from the standpoint of the reaction, and note, i still own stock, and so i am long lendingclub, but with the reaction that it is dealt with, it was quick, and not something that happens at a large financial ininstitution that takes years and lots of outside investigation, but it was uncovered internally, and found by renaud himself, and so i am not sure there is a lot of there, the there, because it seems that it is not material, but $150,000 in revenue.

>> and the stock had been under pressure for some time, and it did happen around a time for the industry when a partnership of citigroup and prosper refrained. prosper saying they would lay off one-third of the employees and the ceo would forego the salary, and are there broader issue issues through the industry that we will see rippling through for a long time? >> well, a great point, because it is a tough time for the industry itself. certainly, large group institutional capital, and the debt money coming in, and that has tightened up in the first quarter, and so from that standpoint, yes, it is a more challenging time for industry. if you are looking at the stock price, it is one-third of what it was when it ipo'd, and there are those challenges, but from the standpoint of the quarterly earnings which is not getting a lot of the press, they met the earnings per share, and u on --

up on the revenue, and up on the ebidta, and so many people are wondering where the new revenue is coming from, and whether it is what lendingclub was looking to do with a couple of the partners, and that has the to be address addressed in terms of the future growth of the entire industry. >> john, that is what i don't get here, the promise of the peer-to-peer lending is, hey, people getting online, and they have extra money, and people need money, we connect them, and it is transparent, and beautiful. where does the capital come in that it is the fact that they need more money than they are able to get organically than the masses as it were? so this is in fact more complicated a company and a structure than perhaps we were led to believe in the beginning? >> i don't know. if you are looking at how it started, it was the ideal model

when the u.s. prosper started first, it started with the company called built in the uk, but you have an idealistic platform of individuals investing in individuals, but there were questions of the reg regulatory overnight in 2008, and is a security or not, and i was on the board at the time, and the board made a decision to seek out additional oversight, a and so the lendingclub went to the fcc to say we want to be registered and then they registered with advisories and started to get the institutional capital in, and they were attracted by the yield, because i am looking around the world with a lot of places with the negative yields, and who else is giving the yield in what are relatively safe classes of consumer debt. so the institutional capital started to come into the

platforms to foster the growth over the last couple of years, and now as they retrench, yeah, the industry has to look at itself. we are seeing the entities saying, hey, we will rely more on the individuals and go back to more of how that originally started. maybe other things like the index funds or other avenues, but look, why does serik's capital come in? because they are looking for a relatively safe yield in a safe sector. >> and john, i don't want to put words in your mouth, but are you saying that the board overreacts to la plaunch? >> well, mary meeker, and hans meeker and the other members, they said, we are going to make

that decision, and how it transpirs, i don't know. but we should look at what financial situations are striving to be, and not outside entities to come in to investigate, and then levy thousands if not millions of dollars in fines. >> and he, look you, john, have a lot of stock in the company, and so you want to have it turn out okay. thank you so much. >> thank you very much. and now, michelle cabrera caruso telling us that the impeachment may have been annulled? >>le with, we ha -- well, today have on the record xent from dilma rousseff who say s -- not true that she is going to to resign today. why? because it is possible that a

senate vote happens tomorrow that would impeach here, and ooh if she was eventually convicted, she would lose the perks of having been president, and she could not run for office for eight years, and she could not keep the pension which i understand is substantial, and if she resigns today, she could avoid what is the fate de compli as it comes to this, but however, we are told that the rumors are not true, and she is not resigning. >> thank you, michelle. >> and it is the annual charity day, which is and event that is always crowded with big money. so we will check the markets and the dow up 157 point, and the s&p up 0.8, and the nasdaq is a lagga laggard, but up 6.4%, and this is as amazon hits a new all-time

high, $697 and jumping above the $700 mark this morning. we will be back in a moment. ♪

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xfinity x1. it is the annual charity day for wti in new york city, and bob pisani is looking like a small child next to shaq. bob? >> well, let me tell you that it is always nice to be here with the btig charity trying to raise $600 million for charity. shaquille o'neal, i swear every year, you are here, you get t l taller. who are you here representing this year? >> chairman of the life fund and creating scholarships for the nurses for the last five years. >> this is famed in honor of your grandmother who was a nurse? >> yes, she was a nurse, and my

mother just received her doctorate degree, and i know she is watching, and so congratulation, mom. and so we want to help men and women who have wanted to become nurses for about 25 years. >> in the middle of the playoffs, lebron and the cavaliers looking strong here, and are they going all of the way? >> i think it is a rematch of the last year's finals, cleveland cavaliers and golden state. steph curry playing unbloo unbelievable, and cleveland unbelievable, but you can't count out the spurs and okc with that series, but in my opinion, i think it is a rematch of last year. >> and portland is in there. >> and they are playing well, but steph curry played at home like he played on the road, it is probably over for portland. >> you are one of the great entrepreneurs out, there and i know that you have new venturs s going, and what is one? >> one of them is ave tar 8760 teamed one apollo jet, and so

you pay $295 a year, and you can fly empty ticket, and meet and greets and chals, and so that is only $295, and a lot of people should check it out. >> it is a huge business for the fractional jet owners. >> yes, i will call up my guy, and say, al, i need a one-way to l.a., and the plane is from florida, and they have come the back, but we will people get on the empty leg for $250. >> and so, now what about the businesses out there, and they love the "shark tank" and hearing about the success stories, and for those of us out there who want to be the shaquille o'neal or success story, what is the path to mental fitness and physical fit ne

ness? >> well, dwight eisenhower said, the smartest leaders are the ones smart enough to hire the smart ones. >> i have a loft people helping me out with my ideas and for example charity-wise, my mother always taught me tole help out those in need, and i wish i could take credit, but when i was being raised by my mother and father, i would not be here today. >> shaquille o'neal, thank you for coming by and supporting the charities and being an inspiration for other people, and of course, a-rod, and joe girardi and eli manning, and so many celebrities. >> and the great one, shaq. thank you, bob pisani. >> and simon is here at post nine. >> and the market is slightly hi higher, but the performance is the greek stock market, and greek bonds, and greek bonds rising to the year high, and the yield is moving in the other direction, and tapping lower as you can see to below the point to where we were last year, and

the big news is in brussels last year that the germans have finally, finally eased the objections to cut the greek debt. options on the table are interest payments and holidays and extensions to the maturity, and options are on the table, but noing agreement. and the cost to the greeks is mas i.v.ive. on one hand they have to keep the primary surplus of 3.5%, and that is after they have paid the interest, and then agreed to what is call the contingency mechanism to get to the, pend chur if they don't get to the gtp expectation. extraordinary. and they are saying that we are no longer isolated as a country, and the politics now is razor thin as people have said that you is have done the kcountry a disservice by falling out with everybody else, and people are fearful that the greeks will have further pain, and further pension reform, and tax writers

with the no gain until 2018, and the details to be wosrked out my 24th. on the meantime, the stock market, the banks are

and invested in this space in the past. and when we come back, not a year for jack dorsey and shares in his company with the shares down 20%, and still coto come, a buy on twitter, and he will tell us why, and also, all-time high coming back to the ipo in 1965. back in a moment.

coming up on "halftime report report" ma'amson hits an all-time high as amazon hits highest earnings. and also, we will look at what kramer calls the worst conference call of a year. and now, the stocks off of the highs of a month, and back to you, carl. superthank you, scott. and twitter shares are down, but our next guest is going to still

bet on the stock, and they turned off data miner which turned it into an advanced trust. and we are joined by the suntrust bank executives bob and mark. and so now, before we dial into the overall tone of the internet and media conference. bob? >> well -- mark? >> good morning, carl. thank you. we are excited to be here. bob just got us kicked off in the conference this morning with both public and private companies joining us, and more established companies like trip adviser and pandora and exciting emerging companies with us for the next day and a half. and we have investor bases whether it is venture capital, and the private equity capitals because they are trying to find out the intermediate ya placement over the next few

days, and the so we are excited about this and the trends to be revealed in the conference call. >> and bob, you had a interview with uber, and headlines cro crossing the desk right now, and what did you learn? >> well, it is interesting to talk to them how they look at the world and the lifetime values and the penetrations into the new market, and a lot of people don't understand how prof profitable they are in the quote, unquote more mature quote, and realizing that it is only a six-year-old company. and the tan jen shall companies like uer ease which is just starting to be tapped. it is an impressive company. >> and we had cuban on this morning, bob, who suggested that the delay in the ipo in terms of the company's life cycle is pushing people away from opportunities to invest in hypergrowth. is that a problem? >> well, it is funny, because we asked that question at the end of the session, and the timing

of the ipo and all, that and unable to give the answer of when the actual timing is going to be, but what you have seen the private markets have capitalized on the growth as they are coming later and later for the ipo, and when the ipo one doe thaws out, and it starts to ramp up, how the investors get a shot at those. >> and why so positive on twitter, bob? >> so back to twitter. we are recommending the stock after coming down hard from the highs of the 50s to recommending it at $20 or so, and we were early on this one, and one thing that we like, they have a number of levers to tap into it, whether it is integration of the double click, and the google search, and on the risk/reward basis here you are talking about the $12 downside risk which is twice the ebida risk. and it is also an m&a candidate because heading towards the end

of the year if it does not turn around. >> really? who is a natural buyer,ed a it has been argued on our air that google has the hands tied for the time being in europe, and who is after them, and what p percentage of your recommendation is based on that the optionality? >> well, the real part of it is based on the upside/downside and quantifying the downside at 8 times where the ebidta is where the companies will bid. and so the monetization, and the brand dollars will shift back over, and the periscope content starting to attract brand dollar s and if any of those hit, you could get some change in sentiment. right now, you not seen the list, but we believe something could happen in the back half of the year. >> mark, sentiment on tech be

relatively volatile so far this year, and does the second half bring any clarity or less en th volatility for any reason? >> well, the second half the year, we will watch it as everybody will with the public equity markets, and whether or not they are receptive to new equity issuances, but whether you are a private company investor or the public company, you have to be in the room to understand that this mediation that is taking place across the multiple industries that are emerging private entities to drive the future growth from the acquisition perspective for those companies, and/or in terms of disearning intermediate markets. >> thank you both for coming by. mark and john, thank you for stopping by. >> thank you. and the men to whom that

report is going to join us in a moment. man 1: you're new.

man 2: i am. woman: ex-military? man 2: four tours.

woman: you worked with computers? man 2: that's classified, ma'am. man 1: but you're job was network security? man 2: that's classified, sir. woman: let's cut to the chase, here... man 1: what's you're assessment of our security? man 2: [ gasps ] porous. woman: porous? man 2: the old solutions aren't working. man 2: the world has changed. man 1: meaning? man 2: it's not just security. it's defense. it's not just security. it's defense. bae systems. the discussion of the highs on the dow, the biggest gainer is goldman sachs, and good for 23 point, and boeing 18 points on the dow, and two negative components at this hour, and that is walmart and fpfizer. jon. >> and hp, inc. personal systems and printing for the most part launching the tech ventures to

increase fields of 3d printing and artificial intelligence, and shane wall is the chief technology officer over at hp, and joining us at post 9. shane, good to see you. >> good to be here. >> and now at the hp labs, you are sort of the internal skunk wo works is reporting up to you that what you hope to get from the hp ventures similar tech ventures i should say similar and different from the kind of the innovation flow that you get from the laps? >>le well, the word is innovation. and for hp, it is how to keep reinventing, and we have done it in the office through two ways, one is hp lab which is 50 years old now, and the pre-eminent institution in the valley, but to compliment it, we have created hp tech ventures, and that is an externally focused of how the drive the ecosystem for the core business and as well as

some of the new plays. >> and now, the relative 3d printing, and how to drive it, because printing is so important to the hp legacy, and how does a group like this help perhaps jump start innovation in that field, and create the markets faster than they might come to resist? >> well, a couple of ways. so we obviously in the labs, themselves, do some corps investments in thr investments in 3d, and compliment it with the ecosystem to bring in the startups to fuel so some of the 3d fuel print future. previously announced last year, we are excited about the technology that we have, but today, what we want to emphasize is that using the hp tech ventures to drive the roadmap overall. >> what if you find an executive to do what hp does and does it better? are you in the purview of that? >> well, we have to look at what they do, right? and we put potentially

everything on the table, the investment or the acquisition if it made sense, but looking at it wholistically where we want to go and the pricing strategies. >> are the pricing strategies above trend or below trend? >> well, it depends upon the area. in some of the recent announcements on the 3d printing, those numbers have been down over time, but we are excited about where we are going to go in the future and where the 3d printing can take us, and hp tech ventures is a good way to do it, and i would not em fa is size the 3d print, and also investing to build out the core business to compliment it, and investing in hypermobility and commercial mobility to drive some of those aspects as well as internet of things. >> ballpark, how much money are you going to have available? >> well, what is that? >> well, ball park?

>> well, we have not a value, but off of the balance sheet, and take a strategic investing and where we see a good opportunity, we will do it, and focus on the right opportunity as opposed to trying to hit a specific number. >> shane wall, e chief technology officer at hp, and thank you for joining us. and it is going to be interesting where you put the money. >> thank you. >> and when we come back, it is a tough day from solarcity, and we will take a closer look at that. and on broad street, the averages up, and two names in the red, pfizer and walmart.

views from c-suite, brands and jpmorgan executives weigh in on the politics and the health of the community on "squawk box." welcome back to "squawk alley" and we have a development of the fraud case held by the bank of bangladesh in the new york fed, and what we have is a joint statement from the bank of new york, and bank of bang la dash and swift which is the payment system under which the fraud took place allegedly, and what we know they have had a meeting in switzerland, and they have had a meeting and will work together to try to normalize the

operation, and recover this money. it is training that it has not happened before, and perhaps it has, but just now announcing it, but there is a meeting in basal, switzerland between the two cases to be working with one of the biggest fraud cases anybody around here can remember $81 million in cyber theft funds from the banks in switzerland. >> and now, of course sh, backey elon musk, they are looking at the q2 loss of $270 to $2080 and the expenses up 54%, and now arguing to maintain the cash flow instead of growing so a fast. >> makes you wonder if they are a part of the restrained housing market, and the restrained inventory, and if you are buying a house, and having a house

built, maybe that upgrade burk with no inventory. >> and the commercial market has been hot, so that should counter that. >> and now, going above $27.22, which some argued would be above, but for right now, the ground is hold iing, and we arep a to 185, but for now, we go to scott wapner and the "half." welcome in, guys, guy to the "halftime report." stephanie link is here, with joe terranova and jon and pete najarian, and the best day for stocks in a month, and we will get to that, but kick it off with amazon. the jump in the shares today as the number one internet analyst on wall street raises the price