power. if deflate-gate, which moves away from the balls being tampered with, moved away to the commissioner's power, i'm pleased that was ratified as to the commissioner's power. >> jerry jones with the boxing match and everything else, we appreciate your time. good luck. thank you. it's been great having you. thank you for watching "power lunch." >> "closing bell" starts right now. hi, everybody. i'm kelly e vanls at the new york stock exchange. >> happy monday. i'm bill griffeth. a $32 billion deal in the chip space to tell you about. japan's softbank buying the uk's arm holdings. they say arm holdings. we'll say both. could we see more of these deals overseas, especially given what's happened to the british pound since the brexit vote? david farber joins us with that. earnings in the tech sector, netflix, yahoo! ibm reporting

after the bell. we'll tell you what to expect and live analysis when the earnings are released. meantime, the republican national convention officially under way in cleveland right now. we are live on the ground there with the latest developments. plus, mr. trump senior trade adviser on why he believes free trade failed the united states. remember this one? we have new developments in the story about a hedge fund portfolio manager fired after throwing a big hampton's party. the hedge fund manager is speaking out saying there's a lot more to the story and he'll tell us what it is after the bell today. >> all right. japan's softbank buying uk based apple supplier arm holdings. david farber, david, has the story for us right now. >> i do. that's right. arm. i want to hear about the hedge fund guy and i'll wait for that. but as for this deal, of course, many people actually not expected it.

they weren't waiting for a deal of this type. arm holdings, bill and kelly, not necessarily thought of as a consolidation play and not for softbank. talking about the name you might have expected. perhaps the main customer or intel. apple being the main customer or samsung or qualcomm. softbank, well, that was probably something that people had not thought about and the man who founded softbank and runs it as the ceo has been thinking about it. in fact, for quite sometime. at least for the last few months. and only recently approached the company with the deal they simply couldn't refuse. a 43% premium to the stock price just on friday and the multiples are staggering. 33.6 times the company's ebitda. 20 times the revenues. over 60 times earnings. you get the picture here. he was willing to pay a very big price. arm holdings, of course, becomes softbanks and very quickly

because the deal, again, not strategic in nature, not putting together two players, this deal could close before labor day and they're saying by the end of the third quarter. which point softbank will own this large asset in addition, of course, to the still very large position in ally bah bah and to the 80% plus ownership it has in sprint. not quite as good an investment. masayoshi son said this is the next big bet, a bet on the internet of things. here he is on a conference call of earlier this morning. >> i said, biggest paradigm shift that's coming is the internet is going to get connected. not just pc. not just mobile. but everything else. everything else will be interconnected. so that is internet of things. in today's terminology.

today, ten divides per population having internet of things. but in 30 years from now, 1,000 devices per population is going to get all connected. >> we're going to all be connected and everything we own and rely on will be connected to the internet. of course, he expects they will be using the intellectual properties of chips of arms holdings and annuity he sees paying off over a long period and somebody who talks about 500-year periods. you know, he is not just talking about today. and he's willing to make huge bets with his own capital here. 32 billion, of course. not expected anyone to come in and play here given the multiples we talked about. though you never know. but they can close the deal very quickly, too. which is also an advantage. >> david, when his deputy left, i thought one of his criticisms if you want to call it that was

softbank was too quick to acquire stakes in companies we not exit them or do something with them and kind of surprising, you know, he leaves and this is the first move that softbank makes. >> yeah. it is interesting to note after the departure. this is an enormous deal. this is right up there with the purchase of the wireless company in japan from vodafone and the stake in sprint and, of course, the alababi investment of years ago. you're right. that said, they did sell a good amount of that stock a few weeks back. roughly 10 billion and monetized their investment in supercell and they had been doing selling in part to help them do some big buying. >> do you think this wouldn't have happened this quickly if the brexit vote hadn't happened and the impact on the value of the british pound? went down appreciably. do you think there's other deals as a result now for uk companies? >> great question. in speaking to people who were

familiar with this process, they tell me masa son was planning this for quite sometime and doesn't hurt you buy it when the currency is far weaker. that said, the company itself reports 95% of the sales are in dollars so you're not going to be benefiting on that currency translation if you're masayoshi son. >> just quickly, sprint is the biggest problem for this company. why not fix it? >> well, you know they wanted to combine with t-mobile and got the thumbs down from the government. before they even really tried in a significant way. they knew it wasn't going to happen. this deal is actually being taken as a sign that they're done investing in sprint. they're not going to put more money in on the conference call this morning. masa son seemed to say that sprint is self sufficient giving me room to consider what is his

next big move which, of course, is arm holdings and the internet of things. >> yeah. sprint down 6% today. they're on their own i guess. david, thank you very much. >> watching for that hedge fund guy. >> great story, as a matter of fact. >> yeah. heck of a party. let's get to the closing bell exchange for a monday. keith bliss at post 9. heather hughes checks in from d.c. and contributor jack bah rougian is in chicago. what's the next catalyst for the market sitting here and virtually in record territory? up or downside? >> next catalyst is fairly soon now that the tech earnings rolling out this week and then roll into the industrials. and her's wrie's the catalyst. earnings reports tell us that the companies are feeling good about the longer term and the

future, and that the second quarter marks a trough in the earnings, what a lot of people suspect, then i think you see the investors and traders be willing to take on additional multiple expansions right here, right now and earnings to catch up with them in future quarters and really critical what we hear from the companies like netflix, like ibm and microsoft tomorrow and then later on in the week and then getting into the industrial companies like ge and the like next week. those are the critical things and will be the catalyst to push it forward. we have seen momentum built into the market. internals suggesting that investors expect that. keep your eyes and ears open for later this week. >> heather, are you guys focused on earnings here? >> yeah. i think it is important to look at earnings. we have news out of the big banks for the most part looks very promising and we need to hang our hat on the consumer and in terms of confidence and catalyst and propel the markets

higher. what concerns me is utilities and telecoms led us to new highs and defensive sector and gold climb on the backs of this. walls of worry and global instability w. the 10-year this low, there's the anomalies that 10-year setting record lows and the stock market setting record highs and one of the two to be reconciled. >> jack, you late last year famously telling us and correctly so to watch for problems for the u.s. equity market. we had that early in the year and now we find ourselves at all-time highs. where do you stand right now? the problems behind us or more volatility to come, do you think? >> bill, this is still the year of living dangerously for the market. you know, that's the line i have been using and telling customers that and investors that. remember, and keith was right about something. you know, we are looking at multiple expansion. the reality is that math is

math. what multiple to attach to the market right now, especially in the wake of the low interest rate environment. the question is in earnings and the fact we have been seeing a deceleration in earnings over the course of the last few quarters. we have been seeing contraction with what these companies are making. last week, you know, everybody's talking about how to see inflation come out and we saw inflation come up. producer prices are going up faster to consumer prices and says that operating margins to contract and could be hurtful for the market down the road. do i think we're in the clear yet? no. if anything, what heather said is right. this market has been led by defensive sectors and this low rate in the bonds telling us there's still a red flag of warning out there. >> bill, we have had five consecutive quarters of revenue decline and concerning and i get it. it's the tina trade. no alternative, right?

looking at bonds where they are, 1.58% on the 10-year today, didn't budge much with the global instability, people are flocking to the u.s. stock market as a safe haven perhaps. >> there's a feeling. people are in the aggregate and overgeneralizing and understandably so and people generally investing for yield, not for growth. and there's a fear out there that that's going to bite those investors some point. do you share that? >> yes. look at the spreads on the highest yielding and lowest yielding sectors in the s&p 500. it's about 2.6%. what does that mean? yield compression. that's tight spreads. investors are chasing yield. i get it. bidding up asset prices and pulling yield down. >> when stocks get treated like bonds, there is a structural flaw in the market and it is something that we have to be absolutely concerned with and that's what's happening right now. >> there has been but, you know, when does it stop?

no one has a crystal ball to predict that. does it pay for the investor to stay out of the market in the meantime? >> last word to you, keith, quickly. >> if we were to take subsets of the market this year and the market leaders, it is utilities, defensive names. but from february 11th and you look for june 27th, two low points and ebbed in the market and then the growth sectors and names, they have led us out of the troughs and that's what's important to remember is that investors are now looking at those growth names, wrongly so it may be and not concerned about yield right now and looking forward to growth by the calculus that we have. >> thanks, folks. appreciate your thoughts today. >> thank you so much. let's get now to the republican national convention in cleveland and security is ramping up. we have more out of cleveland right now. ayman? >> reporter: we're here on lakeside drive in cleveland just outside the security perimeter and you can see some of the

heavy police presence here in cleveland. a couple of numbers through the scale of this operation here to secure this republican convention this year. they have booked about 5,500 total officers to secure the rnc this week. they say they have purchased 10,000 extra sets of handcuffs and they have also cleared 1,000 beds in local jails for any protesters that they happen to arrest in the course of the week w. the political tensions seen in the country over the past several months and the shootings over the past week and a half or so, around the country, tensions are very, very high here. let me show you some pictures now that we have taken just a couple of minutes ago. these are pictures of a protest that's happening just a couple of blocks away from where we are outside the q and what we're told about these protest pictures is looking here at anti-trump protesters running into protesters who are against the black lives matter movement. police appear to be maneuvering

in between the two groups of protesters who are shouting taunts back and forth at each other. police trying to keep them separate so that they don't get into a physical confrontation and just voices and shouting and anger venting right now. it looks like this is something that's being successful right now and police able to keep them apart and we're monitoring that in realtime and let you know what happens there and that's the kind of activity that caused them to buy the handcuffs, clear the beds out and bring all of those extra cops. we have seen cops from california, indiana, we have seen consolidate police here, national guard. all kinds of security here, guys. they're working very, very hard here in cleveland. >> can't wait to get out there. >> yeah. aren't you looking forward to it? >> see you when you get here, kelly. >> thank you. eamon javers. people aren't talking about the election yet. dow's up 13.

transports down 6. vix lower and the small cops up about 2.5. up next, what we have been talking about in the markets, the jupheaval in turkey. venezuela's collapsing economy is sending scores of people to neighboring colombia. in search of food and medicine. how the two crises play out and potentially ripple through global markets. also ahead, netflix, yahoo! and ibm expected to report revenues after the closing today. and martin schroeter with us before his call with analysts. what's it like to be in good hands?

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welcome back. fengss are rising across the globe. attempted coup in turkey leaving thousands arrested and more government officials removed from office. >> joining us contributor with us here a recent nominee by the way to the national petroleum council. congratulations. >> thank you. >> and we have with us chief international correspondent michelle ka russo cabrera. michelle? >> yeah. so turkey key to the united states both in terms of a nato ally, helping us theoretically in the fight with syria and also helping the european union coming to the number of migrants entering the continent. so when to see this coup, attempted coup on friday and now the subsequent crackdown today which raises all the issues that we talked about on friday, guys,

the problematic ally that is president erdogan of turkey, arresting thousands already a number of people saying, you have already gone too far. are you trying to use this coup to cement your position and garner even more autocratic power at this point? it's a very controversial situation. even as the western world doesn't want to support a military coup. >> i wonder, too, the implications for the european union here. >> i mean, in terms of staunching the flow of migrants, turkey was an important partner in that as of late and also, the fight against isis. i mean, turkey important transit point for foreign fighters of europe going to syria. erdogan late to seal the border. now with the crackdown on the military, are they able to contain the isis situation and we saw with the attacks at the airport remains a virulent threat. >> what -- what if we have to deal with a strong man in a

strategically located country? >> the issue is if you're a straw man and control your country, we don't want chaos but, again, the question is, can he control the military? you need the turkish military on multiple fronts right now. that's the concern about the crackdown. >> the journal had an op-ed likening it to what happened in iran in 1979 saying obviously we are not there yet and what happens if he cloaks it in the veil of islam and then pushes the country into that political situation? >> i mean, certainly eastern nato ally. something we don't want to have happen and amazing art erdogan retains the support of the large sections of the population and why the coup failed and there is a support for the increasing islamization of the turkish politics. >> not true in venezuela, guys. >> i was going to take you there. a failure of an economic system that just collapsed on that country. >> yeah. we're watching it unfold every day. there's new video over the

weekend where they opened the border between venezuela and colombia. 1,300 miles had been shut. and the reason there are 30,000 people on saturday, 100,000 people by the time it was over going from venezuela look at them running. was so that they could buy food in colombia and the shortages are so bad in venezuela. people are incredibly desperate. they -- a few weeks ago, a couple of women -- excuse me. 500 women just charged the border and said, we are going to go across and so desperate for food. and so they decided to start opening the border again. they had shut them because they argued that people buying food in venezuela, yes, subsidized when you can get it. in theory it's cheap. but of course, nothing to eat. doesn't matter how cheap it is and then go across the border and sell it for more and why it was closed and now they're starting to let people go back and forth and see the desperation in the people. >> what options does that leave at this point? >> i think the question is, a

self coup and military taking over greater sections of the venezuela economy. the defense min city a head of all agencies and if you can't pay the government employees i think that's a real concern. will the military remain loyal? >> and i mean, michelle, just the contrast in what's going the happen in a few weeks when you have a humanitarian crisis like that in venezuela and a nearby country will be hosting the olympics where the whole world will be focusing on south america. i mean, it is just going to be such a contrast in stories there. >> yes, it is. even though brazil is having its own economic troubles -- >> right. >> as well at the time with corruption within the country rampant and although they have been better, relative to venezuela about embracing things that would make their economy more competitive, ultimately

still they have a very kind of status view of the world and really held them back and when commodity prices were booming, brazil lived high on the hog and now they're not anymore. that's ditto for venezuela. there's similarities, yes. there are contrasts and i'm sure that rio looks good, bill. because rio's a very pretty place and ultimately, too, notice similarities, i think. >> could it be the neighbors that can and should put more pressure to bear on venezuela? you're watching starvation, crises, infants dying in hospitals. you know, why should we all just be standing by an engoing, well, too bad? >> failure of an economic system. >> countries have influence at this point? will cuba put pressure to bear? >> china. >> that would be the one. china basically owns venezuela. the minute china basically stops extending balance sheet to venezuela and when that government potentially falls. >> oh boy. all right.

thank you, guys. appreciate it. all right. we have 36 minutes left in the trading session here. the dow is up 17 points. that will take us to a new all-time high. close there. and we have got the s&p up about 6. nasdaq up 30 points right now. up next, new details on a story still buzzing at water coolers across wall street. a portfolio manager that hosted a fund-raiser in the hamptons and the manager himself will join us live. >> with the other side of the story. and there is another side, apparently. also coming up, earnings season with a notch of the netflix and yahoo! and ibm. what analysts are expecting and break down the results once they hit the tip here on "closing bell."

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welcome back. a couple of movers in the market to tell you about today. bank of america rising on the back of the better than expected earnings report out this morning and profits did fall from a year ago as low interest rates continued to affect the company's bottom line. help offset that, though, the second largest u.s. bank by assets has been cutting costs by closing bramplg e ining branche overall head count. that stock up 3.9%. groupon climbing after piper jaf

ri upgraded it and increased the price target, just under $4 right now. the analyst expects the company's new marketing spending to help drive customer growth. well, this story is still buzzing on wall street. a portfolio manager fired after throwing a pool party, a fund-raiser, in the hamptons. robert frank has more on the story. sflobt. >> a lot more, kelly. the spray-a-thon and the controversy keeps flowing. as we first reported, bret barna was fired after the july 4th fourth burst into the news. social media filled with those pictures of the party featuring more than 500 customers, champagne showers. "the new york post" reported that the owner of the mansion anonymous was threatening to sue for a million dollars for damages. saying the guests wrecked the pool and stole art from the house. it turns out the house was rented to barna for $27,000 by

omar amana. the new jersey-based investor arrested last wednesday on charges of wire fraud and conspireing to defraud investors. u.s. attorney's office saying there was a conspiracy to defraud investors with a scheme of a technology company of kit digital. he was not reached for comment or his lawyers. and it's unclear whether or how his case relates to his demands for money in the bret barna party dispute but the lawyer telling "the post," quote, he didn't have sufficient funds to make bail last week. so the plot really thickens on this party. >> this is the owner of the property? >> this is the -- well, we don't know whether if he, in fact, owns it. he was the renter of the house to barna and claims made by him for money just before he himself was arrested for fraud. >> wow. >> so a lot going on here. and now, we have a case that started as a party and now a white collar crime case.

>> i was going to say, you know, every summer we seem to hear about one of these and not as often that it has that kind of white collar crime aspect. >> this is beyond the party itself. >> every summer there is a party in the hamptons that becomes a symbol of excess, whether it's -- this started out that way and now it seems like the guy who broke it into public trying to threaten barna actually has a bigger story himself. >> i'd like to hear from bret barna has to say about this. >> he'll tell us his side of the story in a cnbc exclusive comes up in the next hour of the show. you won't want to miss it. thank you. >> thanks, robert. >> thank you. time now for a news update with sue herrera. welcome back. >> thank you very much, guys. that the hour, a dump trump rally breaking out in the middle of cleveland right near the site of the republican convention. the four-day convention begins today as you know. our eamon javers and others are there covering it for us. faa lifting restrictions on

flights to and from turkey coming as the u.s. waits for them to send over an extradition request for a cleric accused of having a role in friday's failed coup. russian president vladimir putin planning to temporarily suspend officials named as directly responsible in the olympic doping world. the world anti-doping agency announcing today it found evidence that russia cheated at the 2014 sochi olympics. we wish many more returns, first american to orbit earth turning 95 years old today. the former astronaut started trending on twitter earlier today. after nasa tweeted out, birthday wishes to him. that's the news update this hour. as i said, many happy returns. and we wish him all the very best. >> absolutely. >> such a great story. right? >> true american hero. >> 95. >> 95. >> good for him. >> god bless, right? see you next hour. >> thank you, sue. we are heading to the close here. we have the dow and the s&p at record territory.

if we were to close right here that would be the case. today, a leading trader to tell us, joining us to tell us what he's watching into the close on the first trading day of the week coming up. also ahead, donald trump's top adviser on trade. he'll tell us why he thinks china does pose an enormous threat. stay with us.

welcome back. less than half an hour to go in the trading session today. happy monday to you. >> you, as well. >> dow worst performer and they all drift higher. >> most important thing today, kelly, up volume versus down volume. so the tape is still doing same way and still trending to the upside. people showing confidence in the market and because of the way the earnings come out earnly. >> we have tech earnings after the bell today. what happens if netflix, ibm, yahoo! others that follow this week, what happens if they don't meet up to the high standard we're setting so far? >> you are a naysayer on this? that's not the way it is going down. everything is better than we thought. obviously the expectations

somewhat muted but meeting or beating. so far early. a good earnings season. we'll see what happens with the industrials. but look. people are confident. they're probably looking to expand multiples. and as long as the other things -- the global things and a lot of -- >> a lot of global things and people kind of going, wow, much more resilient market than they thought. >> that's interesting. that's a thing kind of curious is from where i'm sitting and look at things and the most you have the republican convention coming up here. probably the most note worthy things protests outside. you had nice, turkey, the horrible things here domestically and not wrankling the market and we'll keep our eyes on that, as well. >> i had to naysay. thank you. bill? >> all right. thank you. heading to the close with 23 minutes left in the trading session here. the dow up 21 in record

territory. donald trump as we know is in cleveland this week to accept the gop nomination amid some of his headline grabbing proposals. when we come back, we'll talk about one of those -- talk to his top trade adviser about some of mr. trump's trade plans. and still ahead as we mentioned, brett barna's story sounds like the plot of a seth rogen movie. wild movie at a rented house. a threatened lawsuit by the alleged homeowner and fired by the employer. but barna says there is another side to this story and he will tell us what it is coming up in the live interview on "the closing bell." stay tuned. i asked my dentist if an electric toothbrush was

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i'm never going back to a manual brush. as we all know, the republican convention kicks off in cleveland today and this year's race for the white house has many issues front and center including international trade. >> oh yeah. indiana governor mike pence and presumptive republican presidential nominee donald trump spoke about trade last night on "60 minutes." >> i support free trade and so does donald trump. i mean -- >> not really. >> i do. free trade. no. no. i'm all for free trade. i'm not an isolationist. because i want good deals -- >> undo the agreements.

>> these are stupid people that think that. i want great deals for the country. like the deal signed by bill clinton, nafta, one of the worst things to happen to this country in terms of trade and economics. >> all right. joini ining us with right now i senior adviser to mr. trump on trade, dan domico. thank you for joining us today. >> thank you bill, kelly. >> you're welcome. >> let's keep it to nafta. what specifically don't you and let me put it this way, what specifically doesn't the trump camp like about nafta? what would you change? >> well, first thing that people don't like including myself and the trump campaign is that it is failed to give us the job growth and the trade that it said it would. the reason why that's the case is more because of what was done after nafta was passed than the agreement itself.

although agreement has problems with it. mr. trump's biggest issue and mine has always been enforcing the rules of the agreements. we don't do that. but when you take a look at what happened after nafta, nafta took away the tariffs, what little we had in the united states and those of the mexican government and country. and they did it over a period of years as i recall. but what they did immediately after nafta was they put up border adjustment tax of a value added tax. that tax was in the range of 16% to 18%. it was placed on all goods coming in to the country and it was rebated to manufacturers in china shipping the products into the united states. so what you had was nafta negotiated away tariffs and put in the same things back in place with the border adjustable value added taxes. >> your industry -- >> how big of a screw-up is that? >> steel is one of the hardest hit, your industry. obama administration taken steps to try to make it tougher,

costlier for the imports of china. i notice that the auto manufacturers and other steel users weren't so happy about that. so i guess, you know, that's the problem with trade is winners and losers. >> well, the problem with trade is not with winners and losers. the problem is trade is trade cheaters who do not follow the rules they agreed to, access to the markets. china being by far the biggest offender and other nations find themselves having to do the same thing to keep up with them. the issue is not one of winners and lzers but cheaters, lawbreakers and all we have ever asked for of the government, republican or democrat, enforce the rules and laws of free trade that gave china and others access to our market. on the other hand, what we have with china is on the steel side, as an example, they would not let our products into china. they will not let us build a steel plant. they're the biggest

protectionists in the world. >> let me ask you about another aspect of all of this and that is, you know, we all know companies that have had to move jobs overseas because it was cheaper to produce whatever product they were making because of the lower cost of living overseas. you know, mr. trump said he brings some of those industries back here. how do you do that when economic forces are working against you? you're a businessman. if it's cheaper for a company to make a widget overseas than here, what enticement do you provide to bring them back here again? >> that is a very good question. and it's -- the answer is very simple and straightforward. what you do is you begin to enforce the laws that are on the books. you if your trading partners don't participate you put in tariffs until they do. ronald reagan put it in in the

1980s against japan and others, tariffs on semiconductors, motorcycles, voluntary agreements on steel and automobiles and got them to the negotiating table where both germany and japan strengthened their currency by 50% in 1985. that's what we need to do again. that's what mr. trump is going to do. if people -- if our trading partners do not follow, agree to the laws and rules that they did agree to get access to the market and don't come along with that, then there's defensive tariffs put in place. >> okay. last question. are you suggesting that every single u.s. job lost to overseas production is the result of the cheating by those countries? >> i would say the vast majority of them are but much worse than that, bill, there are millions of jobs that have not been created in this country because of of the trade cheating. millions of good paying jobs

were lost. millions of more never got created. >> sir, good to see you. thank you for joining us. >> thank you. >> you bet. any time. >> dan dimicco. be sure to keep an eye on cnbc.com for his upcoming op-ed on trump and trade, as well. about 13 minutes left in the session. dow up 23 and s&p and nasdaq stronger as you can see. s&p up 6 points. about a third of a percent. nasdaq up two thirds of a percent. and we're not finished. it is a big day in tech land with earnings due in about 20 minutes. netflix, ibm and yahoo! all reporting. we have previews of those coming up next.

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i love earnings season. don't you? it's just so exciting. getting the numbers. big tech earnings coming your way after the bell tonight and live team coverage on all of that. julia in los angeles. josh in san francisco. and susan at cnbc headquarters to el us what to expect. julia, start us off here with netflix. >> for netflix, key number to watch is subscriber additions.

projecting 2.5 million new subscribers. half a million of those here in the united states. now, netflix's revenue expected to grow 2.1 million and earnings to decline 60% to 2 cents a share. nemt fl sent the shares lower in april. we'll see if guidance sends the stock swinging this afternoon and gained or lost an average of nearly 13% for the past 3 years the day after earnings. kelly? >> yeah. big mover. julia, thank you. josh covering yahoo! for us today and seems like the earnings not top of the mind today. >> well, kelly, wall street not expecting much good news from yahoo! after the bell here. analysts predict yahoo! to report 10 cents on revenue of 1.08 billion. that would mean drops of 39% and 13% respectively. neil says he'll also be watching

growth in mavens, a metric they use for mobile, video, native and social ads and looking for 410 million or 3% growth year over year. bgc says the real focus won't be the metrics but any news, any color on the sale of this business. guys, back to you. >> all right. that will be very interesting to see if we get news on that. susan, what about watson's favorite company ibm? >> we're expecting revenue to fall 4% and epps by a quarter percent and 17th straight quarter of yearly negative declines and analysts i have spoken to say they're looking for signs of improvement in the business in the midst of the ceo's transition of ibm now to a cloud and next generation technology company and the key segment in this report card is a strategic imperatives division of cloud and 40% of the revenue

by the year 2018. back to you. >> all right. we'll see all three of you at the top of the hour when the earnings come out. thank you very much. now with 8 minutes left in the trading session, the dow up 15 in record territory, joining us on the floor of the new york stock exchange is phil from latinburg asset management. we were talking about the defensive nature of this rally. i mean, that's where people are going, going for yield not for growth. does that trouble you? do you want to invest that way, as well, right now? >> no. the question is will we get a rotation of defense to offense? will people finally stop buying utilities? energy names that bounced and look to maybe con surmer discretionary. health care, very much unloved. maybe the telecoms and success in telecoms and still pretty good value. >> i'm surprised bank of america is up almost 4% despite the huge dprop in the net interest margin. >> ought to be about an all the finances. jamie dimond with a solid number

and bank of america is a flux play and never get clear understanding of how strong they really are. reality is with all the banks it's a tough sector to love simply because with margins being where they are, with interest rates being where they are, they can't get the liftoff in earnings. i'd rather see a discretionary play. underarmour unloved name. think about the economy going. it's a consumer based rally. you either play the consumer card. everything else, whether it's the brexit fears over with or you think about earnings, we don't get liftoff in earnings, you need to think about where to make money on offense and less on defense. >> energy, quickly? >> energy i, lie the space. i have for a long time. i want to catch the dividends. you've seen we have a lot of bounce off the bottom. a couple of real strong names there and you have an ability to eclipse the income. >> all right. phil, good see you as always.

>> thank you. we'll take a break here. the dow still up 17 points in record territory. closing countdown in a moment. after the bell, you just heard the earnings previews, from ibm in particular, we'll get a breakdown of the report from martin schroeter after the bell.

2:30 left in the trading session here. time for the closing countdown.

how are you? >> good, bill. >> let's go back to watch the journey for the two major averages. quite a rally we have had since the bottoms put in a couple of weeks ago. a gain of just 3% there on the s&p but today at 2167. good enough for an all-time high. dow, same thing. take it back a couple of weeks and watch the rally there. a gain overall of 3.25% to 18,536. watch the 10-year. i guess we put in a bottom a couple of weeks ago at 1.36 i think was the low. and now we're back to 1.59. that's -- held steady today and earnings tonight. we itemized those and watch them carefully. when ibm, yahoo! and netflix report and just going to say, well, all three are positive

depending on how we close out here, right? >> yeah. it is interesting from the banks and bank of america reporting this morning. third big bank to put in better than expected profits and i think that's put a little bit of support here under this bull rally going forward. >> i agree. >> investors looking forward to see what the tech players say after the bell today. but both financials and tech very supportive and the deal news today, softbank with a humongous bid. that's also fairly supportive for the positive goals going forward and into what, you know, has been a very rocky news cycle otherwise. >> up 43% today. if you hadn't seen. a premium put in and some of that the result of the huge decline in the british pound. >> exactly. >> and made that company that much more attractive. right? >> impressive number to say the least this morning. >> yeah. that's for sure. thank you. >> thank you. >> see you later. so a pretty quiet, sneaky rally for the dow and the s&p

putting us in record territory today with the industrial average up about 17 points on the close. gms ringing the closing bell here at the big board and hamilton bank corp at the nasdaq. stay tuned now for all those earnings and the cfo of ibm joining kelly evans and company on the second hour of "the closing bell." see you tomorrow, kelly. thank you, bill. welcome to "the closing bell," everybody. i'm kelly evans. all-time high again today. the gains not huge and drifting higher. the dow up about 15 and underperformer today. s&p was up 5, about a quarter of a percent. 2166 the closing level for that broad index. the nasdaq today up about half a percent, 26 points, 5055 and less than 3.5% from the all-day

intraday high. considering everything that's saying something. it's a busy hour for earnings today. julia boorstin with netflix numbers. josh lipton with yahoo! and susan li with ibm. welcome, guys. tim seymour shortly, as well. jon, i want to go there. the collar. >> well, you know -- >> so sharp. >> the folks are pushing boundaries in wardrobe. >> bringing the earnings together with the market and when's happening? >> i'll do my best. viewers have to keep it tuned here. >> which of the three do you think is most important? >> let's see. of the three, i'm going to have to go with netflix because in this kind of environment seeing markets with all-time highs the growth stocks and stories people want to believe.

questions of international. that's where the bulk of that growth is supposed to come from so i think a lot of eyes on netflix. >> kayla? >> a little bit of a lemming stock and i say that because people rush into it and then out of it. so given that this is an extremely volatile stock after it reports earnings, you're going to see huge swings in either direction and it's going to cause people to change their sentiment act momentum stocks largely. >> that's true. down 25% since its december peak and already been a big mover there in terms of sentiment tim, what are you watching and make of today's small rally? new highs. >> yeah. still very impressive. very resilient stock market. nasdaq outperforming and rewarding tech that lagged. i think in terms of netflix to me, always been a company that's priced for perfection and so the international subs need to more than offset the domestic business and a ton of competition. i think as everyone said, a momentum stock and the markets in the doldrums and worried

about netflix and it could actually -- the market's very balanced going in. >> we have seen shares moving there and coming back in a moment. let's get to john harwood with something on the anti-trump movement, about to make the stand on the floor as we understand. the republican national convention there, john. >> waiting to see whether the stand takes place or whether it just fizzles. we have had reports all day long that anti-trump forces had amassed a majority of delegates in ten states, enough to force a roll call vote on the rules of the convention. they hoped to be the first chink in the armor to unbind delegates and people bound by the results in the state to vote for donald trump and not for him free to vote for someone else. they don't expect to succeed but they are trying to make a symbolic protest. they're huddled on a corner of the floor behind me. mike lee, the senator from utah,

who is an ally of ted cruz, has said that he is going to try to force this vote. he complained just a few minutes ago down on the floor that the convention was displaying coercion masked as unity and trying to fight back and other delegates trying to fight back. just don't know whether anything comes of it. counter force from both the rnc and the trump campaign to try to make sure that there isn't any visible or consequential protest on this floor. >> all right. john, thank you. our john harwood following developments there in cleveland. let's get to julia boorstin. netflix numbers are out. >> moving sharply lower. subscriber numbers lower than expected. 1.7 million members added in the second quarter and wall street expected 2.5 million addition new members. now, the company explaining here that they're adding new members

at the same rate expected and when's impacting the subscriber additions is that un-grandfathering. paying $1 or $2 more than expected so effectively a price hike and causing churn. now, it appears like this churn to impact subscriber numbers in the next quarter, as well. the company's guidance for q3 of 2.3 million net adds is also significantly lower than wall street had been expecting. just for some context, wall street analysts expecting addition of 2.85 million internationally in q3 and another addition of 774,000 dmixally in q3 and subscriber numbers coming in lower than expected in q2 and lower than expected projections for q3 and worth pointing out the higher monthly subscription numbers with a positive impact on earnings and earnings per share

of 9 cents versus 2 cents and the guidance for the q3, though, coming in guidance of 5 cents per share in earnings versus wall street expectations of about 7 cents in earnings per share for q3 and lower guidance sending the stock lower by about 13%. guys, back over to you. >> thank yo seems important here to talk about, you know, the total net additions, guys. that's been such a mover for the shares. their total and make sure i'm reading this correctly. total net additions in the u.s., 160,000. >> yeah. >> last quarter. that's compared to the street estimate of 532,000. i don't want to say it screeched to a halt, jon. they might be making more on those people because the average price is higher. but that's why the sharyls are lower. >> yeah, absolutely. and that and you have got to believe the story that they're telling which is just wait until next quarter and u.s. net adds twice as high as this quarter and might be a little difficult for investors to get behind

after they were expecting those numbers to show up right now. also, international, 1.5 million net adds. versus 2 million expected and saying the 2 million will come next quarter. interesting what they say about this price sensitivity and ungrandfathering and wonder if they're hitting some what of a wall and telling them, okay, we're willing to take these price hikes and only up to a point. these people who have been paying kind of a cheaper freight for a while, they don't want to pay more. when's that say about the perceived value over time? >> it also raises doubts about netflix's ability to estimate how the customers feels and stomach. the fact that it has an internal and street estimate of 532,000 net adds and came insofar below that and it says that the churn began in early april. with the press coverage about the fact to ungrandfather the

longer ten neuroed users and several months ago. >> yeah. >> at the very beginning of the quarter and elevated in the quarter, why not take expectations down? >> julia, do you have any idea? >> well, i just want to weigh in here an give you more color from this reed hastings letter to shareholder why the subscriber numbers less than expected. they talk a lot about ungrandfathering and the primary driver and specifically says that they're not suffering because of competition or from market saturation. they say that they believe that amazon prime, hulu, cbs all access, the surge of all of these new direct to subscriber options that are not part of the tv bundle, they say we believe we're growing against linear tv hours and did not contribute to the miss in q2. they also say we don't believe market saturation is a key factor in the u.s. given that we experienced similar performance over the same period in multiple countries with differing levels

of netflix market penetration and very specific. this is really about ungrandfathering and not competition or market satch wags and one other key thing here, so much interest in international potential and the markets they launched in through the end of 2013, they said they're on track to delivering agree gags and they're profitable and now we know half a billion dollars in profitability to netflix. so certainly some interesting areas to watch there with international markets. >> not too shabby and competition, you were shablging your head. >> i don't believe it's not a factor. in my household, yes, we enjoy orange is the new black, et cetera. but the kids programming is largely commodityized and some households maybe they're primarily tuning in to netflix for kids programming and same time if you've got amazon prime access, access through hulu,

another service, if you're looking to cut a service, maybe because of the price going up, if netflix isn't that valuable to you, maybe you end up cutting it. ungrandfathering, the weirdest kind of genetic -- how do you -- >> let's bring in -- >> papa is your papa, right? >> by the way, tim, just want everybody to see what's going on here? shares down 15% to about $83. their 52-week high and might also have been the all-time high, $133. about $50 off their 52-week high. >> yeah. and in fact, the $82 level is important. i can speak to the kids programming and you have a place here where domestic competition is enormous so think about those domestic subs, if we got this number last quarter, in other words, this is the second major quarter of slowdown in domestic, this stock down twice what it is today. the ungrandfathering effect

worse in the third and fourth quarter and get ready for more of this. to shrug it off, international, no way they have the same adoption that they have had in the united states. so trading at 40 times 17 ebitda this stock should be lower. >> julia has more for us. julia? >> just a quick nugget on china because many analysts believe it's the next big frontier for netflix and the regulatory climate is challenging and disney launched was closed down as was apple's movie offering saying we explore options and meantime work in the newly opened markets and goes on to say there's no change in their view that in the u.s. netflix can reach 16 million to 90 million members and optimism about the potential here and very cautious on china. >> all right. we'll have more on netflix in a bit, too. ibm, see how the sharyls moving as the earnings are now out and

susan li with the numbers. >> hi. we got a bet on the top and bottom lines and eps basis and 295 apiece. the market looking for 289. revenue beats at 20 billion. we were looking for 20.03 billion in the estimates and looks like all lines, business loins are pretty much in line. cognitive solutions and has watson involved and 4.7 billion there the earnings and the revenue. back to you. >> thank you. ibm shares up and the company's cfo here in a couple of minutes also breaking down the results further. before he speaks to analysts, again, that's martin schroeter, tim, sorry to keep it so brief. >> that's okay. >> i think we have a few more minutes. do you want to comment on ibm or netflix? >> ibm first of all, not the inflection point and very disappointing. if anything, 15 billion less in

revenue. and hasn't done anything different. it's not terribly cheap. it's not a stock to go in and buy tomorrow and not going out of business and again we have been waiting so long for this turn. these numbers right now on the revenue side, not looking between the sides and the headline, don't get so excited on a beat on eps. >> all right. john? >> interesting line in here. just for those who want to be contrarian. the annual run rate, this is from ibm. annual run rate for cloud as a service revenue, a subset increased to $6.7 billion from 4.5 billion in the second quarter of 2015. so, i mean, a lot of these cloud numbers are kind of hard to compare apples to apples. >> can you compare it to microsoft's 10 billion? roughly the same thing? >> percentage of sales, jon. still not a big number. >> not a big number but growing at a rate that makes your eyebrow go up a little bit.

hard to compare apples to apples. they had different legacies in software but it's moving in the right direction unlike netflix which we just saw and the growth rate, you know, promising something better next quarter than this quarter. this quarter for ibm is better than people expected. >> stay right there, everybody. we need to get back to john harwood in cleveland. when's happening on the floor there, john? >> reporter: there's a raucous demonstration on the floor. the anti-trump forces were shouted down. they were trying to force a roll call vote on the rules of the convention. the chairman gavelled the vote closed saying that the ayes had it and now you have this situation where everyone's yelling and shouting on the floor. this is the kind of chaos that republicans and the donald trump campaign did not want to see on this floor. the anti-trump forces are making a cause that the convention's trying to silence them and giving added fervor to the cause. apart from the merits or lack of merit of donald trump as the candidate.

you can hear that shouting behind me. that is disunity at the republican convention right now. >> john, that's what they were hoping to avoid, right? wasn't so much that this disunity didn't exist but can we present a unified pront? >> reporter: they try to move past disunity. it's in all parties in every election. but what you try to do is put on a show that papers over those divisions that pulls the party together and we're seeing a demonstration right now that goes directly against that aim which is very important for the trump campaign. he needs to unify his party coming out of this convention to take the fight to hillary clinton and right now he's got a little fight on his own hands right now. >> john, bernie sanders seemed to suggest when he appeared with hillary clinton days ago that he wanted a roll call to show the amount of support he had amassed in the primary period so you have to imagine there would be a similar expectations at least

from some at the democratic convention, as well. how's this different? >> reporter: i think it's different because i don't think there's going to be a scene like this on the floor of the democratic convention. usually what happens is either the leading candidate exceeds to a vote and done very quietly. or, in the end, the challenger turns over delegates and asks for a yunanimous vote. we saw that in 2008 with hillary clinton running against barack obama and moved far unanimous vote at the convention and that what happened. this is when the fissures are deep. >> so, john, this is the first day and this was the one we were looking, following to see which way it would go. it got to the floor, caused, you know, some pandemonium and shouting down. does this mean the entire issue put behind the party? do they move on now? kind of focus on the big

speeches and things to come in the days ahead? >> reporter: depends on how much fervor there is among the ant anti-trump forces. people get tired and won't win. the anti-trump forces know they won't unbind the delegates. they're not under the allusion and petitions today, for example, for the nomination of tom coburn of oklahoma, they know that donald trump is going to be the nominee. the question is how much stomach do they have for the fight? the fact that some of the national polls in the last few days have been favorable to hillary clinton, probably increases their ardor more with wind to say, hey look, we are not going to win this election with donald trump. we are just going to have to see this play out because you did have some very raw emotion on the floor right now. they're playing music over it. we'll see what happens in the next couple of hours. >> playing music over me here when we have to go and i think

we have to go. john, thank you for now. our john harwood on the floor in cleveland and back here where we have earnings of ibm and netflix and coming back to the big moves in netflix stock in particular in a moment. tim, a parting word? >> i think you have an earnings season as you know very important. the tech stocks with numbers to surprise to the upside. and i think for that tech continues to get a bid. >> all right. thank you for joining us, tim. there's more coming up on fast money. sitting down with the co-founder of netflix, mitch lowe with a reaction to the quert and one thing he says the company, he says will get the company back on track. that's next hour. netflix shares sinking after weaker than expected subscriber growth and how troubling the news is for the stock down 15%. yahoo! set to release the earnings any moment now. will investors find out which company won the bidding war? later, hedge fund manager

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netflix just reported second quarter earnings and the stock down about 15%. let's bring in barton crockett. he's got a market perform rating on the stock. larry haberty with a short, larry. this stock down $50 from the 52-week high. what do the latest numbers say to you? >> well, i think the stock was priced for perfection. it was over 100 times ebitda. put that in perspective. facebook at 20 times. top line here 28%. there was very, very poor conversion of incremental revenue to ebitda. this is the content cost fighting. and essentially, the company is just not generating enough cash. the content costs are increasing. i think the international expansion is low quality. i think customs are different

internationally. it's just a nice business. i'm a customer and very happy. but it's a very, very overpriced stock and i think goes down further. >> okay. ebitda being an earnings measure. what about you? >> i have a market perform because i do share some concerns about when's happening with netflix. this is a company that's maturing and i think that it's difficult to own the stock going through maturation. i think that there's some growing pains as the guys as their subscriber growth sloes, getting more penetrated, mathematically has to happen despite the protestations and data suggesting that and lean on rate more and a difficult time raising rate and i think that reflects the status versus a replacement and the proliferation of better alternatives. i think netflix is a company that if they can keep their cost structure stable and grow their subs you can see earnings growth

and i think the key thing is that they understand the sub growth and pricing leverage will be and if they miss perceive that they can drag the costs up so high that there's a real earnings kind of issue potentially. >> okay. >> so i worry about netflix maturing and they believe in the business but i worry about execution when they're maturing and this report kind of i think feeds into those fears that i have. >> i have a netflix story, kayla. i was a member for about 24 hours this past a week or two ago. >> huh oh. >> i thought i should go back, look at the movies they have and for streaming purposes, they don't have many at all. that was the surprise. so, now paying member of hulu where i watch seinfeld episodes. do you think that's at all -- >> the company says it's not competition. not saturation and that they're not having to compete against hulu, apple tv, all access. a slew of competitors and interesting to see they weren't

able to win you over despite spending $6 billion on con tent. larry, i'm curious if you think we're reaching the point that comes home to roost and able to get away with these ridiculously high levels of content spend at the same time that they're not even close to cash flow positive. at what point do investors say that i don't like this? >> i think you saw it in this quarter. they incremented sales by 450 million and cash flow by 10 million. and this quarter isn't going to be too much fun because you have pokemon 2 or pokemon go and which is consumers are spending 33 minutes a day on it. at last report and the olympics so it's going to be very problematic. competition only gets worse in this business. content's being created as an exponential rate and the valuation is very, very high. i can't see why anyone would spend three times the multiple on this that they would on

facebook and i think people are going to be adjusting. i look at it as the coyote over the cliff and not a -- it's kind of an ugly finish. >> i always liked that visual. unfortunately for this case. guys, thank you. barton, larry, larry, we'll see you later with yahoo!'s numbers when they come back and back to john harwood on the floor in cleveland. john, so the leadership shout down their ability to even bring -- tell us what just happened again. >> reporter: we just had a bit of drama on the floor when in light of the protest that had occurred on the floor to the decision of the chair to say that the rules had been adopted, they had another vote, another voice vote. they then recognized and the chair ruled that the ayes had it again. adopted the convention rules. squashed the trump forces and then recognized the delegate of utah, one of the states seeking the roll call vote.

the motion was denied because even though nine states had presented petitions with majority of delegates seeking that vote, that is over the threshold, seven. you need to force that vote. then they said that three states withdrawn their majority of petitions to force the vote. in other words, you had lobbying going on by the trump forces, rnc forces, to get three states to withdraw their request. and that meant they didn't have the sufficient right under the rules to request that vote. you have had competing chants back an forth. some making the chant we want a vote. others making the chant we want trump and usa and this is that division on the floor is continuing right now and john barasso the senator is trying to calm the waters right now. >> wow. so they're saying, you know, okay. they needed seven states to be

able to push this measure. >> they had nine. >> they opened them up. >> they had nine. >> but you're saying they had six? >> reporter: yes. because there was lobbying, you could call it muscling, strong arming. whatever you want to say. three states withdrew under pressure and now they didn't have enough to force the vote. and so emotions are fairly raw on the floor. >> sure. because there was sort of sense that this was finally going to crack up the nut and decide whether to unbind the delegates and instead if this doesn't go forward or tactics behind the scenes, effectively it's over, right? >> reporter: i think it is effectively over. i think the anti-trump forces knew that it wasn't going to ultimately succeed and this is what mike lee, the senator republican conservative senator of utah was talking about when he said he accused the rnc of coercion masquerading as unity.

that's what happens in politics a lot. it is not unique to the republican party or this convention and seeing a demonstration of it. >> all right. for now, thank you. john harwood in cleveland. back here, we have had the earnings. ibm reporting better than expected results a few minutes ago. up next, the cfo breaks down the quarter for us and letting shareholds know when to expect profit and revenue growing again. waiting on results of yahoo! and final bids for the xhaen and due today. that's coming up on "the closing bell."

welcome back. netflix hit hard there and shares of ibm higher after reporting its second quarter results better than expected. joining us in a cnbc exclusive is the company's cfo martin schroeter. hi, maurtin. >> hi, kelly. >> can you speak to where you guys are seeing momentum? cloud is a service, for example. what is in that? how did you get it up 50% on the year? >> sure. so, you know, in the quarter where we're seeing momentum continuing to see momentum in the strategic imperatives. another 12% growth in the quarter so on a run rate basis, that business, those strategic

imperatives over 30 billion. we said over a year and a half ago that by 2018 we'd get those to 40 billion or 40% of our revenue and we were, you know, certainly on track if not a little bit ahead. we see momentum in the cloud business, up 30% in the quarter and a theme the clients continue to move fard as they think about how to get to a hybrid cloud environment and then within the cloud business, we have good, strong growth in the as a service business and think about the as a service consumption model if you will. for those products, those offerings where you are buying essentially a subscription to a service. and that business for us finished the second quarter at a $6.7 billion run rate, annual run rate and good performance in the strategic imperatives. >> we saw microsoft announce the yields by linkedin and show the share of the cloud relative to

others, including you guys. you know, hewlett-packard gone through moves and as the landscape of services and hardware is changing and the enterprise space, what do you do to stay ahead of that? >> quite a bit of activity for us. i mean, our view on the cloud is about moving clients to a hybrid cloud model and while our clients love the agility of cloud, they want the benefit of all of the data in the existing systems of record and all of that is not likely to be moved in to a public cloud environment so the work we have under way is not only building the right linkages for the environment, things like our platform called blue mix we hupg the clients with the process changes to make as they move their processes into cloud consumption if you will and that's work under way with the global business services business where we have

the industry expertise to help those clients move their processes and across ibm we have what we consider a cloud first approach. that's true of the way we run our own business and true of the clients thinking about what they can to move into a hybrid cloud environment faster. >> how much of this growth especially in the cloud is through acquisitions and did that pace increase in the quarter or taper off a bit? do you have anything big up your sleeve? >> we have done quite a few acquisitions as you know in the past 12 months and helped to build up that cloud business, if you will. but if you look just at that of a service run rate, for instance, we saw very strong growth and half of that growth from okacquisitions and from ou own organic capabilities as a service. >> okay. and appreciate your joining us. walk us through the quarter. you have to get to the analysts' call. thank you. >> thank you, kelly. >> sharyls fractionally higher

after the results. still waiting on results of yahoo! this afternoon. we could get them any moment now. also waiting for an update on the winning offer in the bidding battle this afternoon. that's next. later, hearing from the hedge fund manager fired for throwing a wild party in the hamptons. get his side of the story later on "the closing bell." gain the freedom to fumble with the new water and shatter-resistant samsung galaxy s7 active. exclusively at at&t.

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plus a $250 prepaid card. comcast business. built for business. welcome back. here's how we finished today on wall street. gains weren't huge, the s&p still up 5 points at 2166. the dow up 16. 18,533. the nasdaq up 26 to 5,055. here's a look at big earnings movers after hours. most lynette flix. down 15% after its earnings came out with a disappointing subscriber addition number. ibm up on the report and yahoo! waiting on for its numbers and for any update on the bid process for the company. wi next guest make headlines for reportedly trashing a home in the south hamptons. the fund-raiser, an event

featured a share-a-thon of champagne and the man that rented the home said he was going to sue and our guest was fired from his hedge fund job. omar amanot charged and arrested with four counts of fraud. his website describes him as a pioneer of electronic trading and investors in dozens of companies and can't afford to make bail reportedly and faces up to 50 years in jail. multiple judgments and liens under his name. joining us now, cleex ussive interview is brett barna, a former manager. >> hello. thank you for having me. thank you for the opportunity. >> the party. first question, do you have -- do you regret it? do you regret throwing the snaert. >> i regret certain aspects of the party. but, you know, really what this was, supposed to be about charity. we raised $100,000 for animal rescue. that i'm proud of.

saves 400 animals. >> why are you here? you lost your job. you feel as though that shouldn't have happened and people don't know the whole story? >> that is right. that is right. look. the whole point here is that we raised a bunch of money for a charity. good, clean event. we had it run by the former police chief and security team of eight people. no damage to the house. we weren't allowed inside the house because when we originally paid for the house we were supposed to get five days and nights in the house. the owner asked us for cash. up front. which we declined. we paid him over air bnb. >> this guy? >> omar, yeah. and we had problems with him from the beginning. one was demanding cash up front and arriving at the property i found out why. he had booked it to another group and just wanted to get paid entirely. so, you know, we couldn't even go into the house. we definitely didn't get it for five days and nights and after

the event he wanted more from the charity's profits. >> you said he to you pay up or else and or else is "the new york post" had story of the event saying you guys trashed the place and going into detail about just what a rager it was. >> yeah. yeah. that's right. i'll tell you, the event itself was nothing like what you read about. you know? were people drinking alcohol? sure. were people in the swimsuits at a pool party? yeah, clure. it was good, clean fund and raised all the money. really this is about is the man trying to create the most ridiculous story he can to try to pressure me to give him more money. >> were there dwarfs? did you hire dwarfs? >> david and sandy were there. i know them. >> okay. friends of yours? >> yeah. we have known them for five years. we had a stilt walker. deejays. a live performer. we had a good, fun party and nothing illegal that happened and no property damage. i think we sent you the before and after photos of the property. >> yes. >> no damage.

this idea of a million dollar lawsuit, you know, there's -- i don't know how you create million dollars of damage of that house. i don't think it's even $1 thuz. >> you lost your job and the story in the "the new york times." how long did you work there? >> seven years. >> i don't want to put words in their mouth and said we can't have the firm represented like this? >> yeah. i mean, look. i don't see what else they could have done and kind of see they didn't have any facts at the time. getting the same calls from press. they're getting calls from investors asking about what happened and only armed with the information that were in the tabloids. now the facts are going to start to come out. i think we gave you guys some of them. and, you know, you will see over coming time there's more and more people coming out of the woodwork with more and more facts of what happened. >> yeah. there's a lot we probably still don't know about the guy that owned or the home or brokered it to you guys. but what now? i mean, i guess just coming back

to sense of would you do it all over again if you -- >> boy. >> i assume you wouldn't have. >> not in the same way and have to protect the potential image. we didn't throw the event to be on cnbc. we were just trying to raise money, good clean fun for the charity. >> isn't there a better way to raise money for charity? >> well, there's a lot of events to raise a lot of money. the idea is to mobilize the next generation of philanthropists and not one event with a couple of $50,000 checks. this was, you know, almost 500 people that donated about $200 each to the charity. that's great. these are people that don't donate all the time and not calculating in their head about tax write-offs and all that kind of thing. people just starting to come out and support charities so this brings them together and there's a lot of value to that. i'm proud of this. >> but your concept of good, clean fun probably different than for a lot of folks, right? i mean, maybe you didn't break any laws here. but would it pass the

grandparent test? could you say, guess what i did this weekend? i mean, this seems like a reasonable way to think about. >> funny you mention that. i had a difficult conversation with my grandmother and, you know, by the end of it, i think she kind of understood what was going on but, you know, there's a responsible way to have alcohol at an event. i suspect everybody on the trading floor has consumed alcohol before. >> i suspect they're consuming a lot of it as we speak. you did send us some photos and the resolution isn't great and will be online before and after photos that you mentioned. so if more capital came back to you and said, hey, we understand there might have been more to the story, you know, we'd love to welcome you back, is that what you're looking here is to be able to add complexity to the event and get back in the old job? >> add -- i'd be careful. i would say there's facts to keep coming out. you know? i can't speculate of what happens there. >> you keep pressing your case

against this guy? >> start to press my case against this guy. yeah. yeah. yeah. yes. you know, i have never been through this before. this is me getting organized so, you know, we are going to let -- i talked to three people the other day that kind of ran me through their assessment of the house and preexisting damage and we just found out today that that house didn't have a rental permit. he rented it two times no permit so -- >> maybe twice at the same time. brett, thank you for joining us. >> thank you for the opportunity. >> brett barna here at post nine. we have an earnings alert on yahoo!. you can see it on the screen there. josh lipton? >> kelly, yahoo! just reporting. eps of 9 cents. the street looking for 10 cents. revenue of 1.31 billion. analysts predicted 1.08 billion. looking through the release here, kelly, mavens mobile video

native and social ads, 504 million, better than some estimates i was seeing. gross search revenue of 365 million. display revenue clocking in at 470 million and break out the costs of commissions. beyond the financial metrics, bigger question, the very future of this company, we know yahoo! entertaining bids and anymore color or insight to share about that process. that conference call at 5:30 eastern and we'll be on it. kelly, back the you. >> appreciate it. again the yahoo! shares fract n fractionally lower much more. we'll have more on the earnings when we come right back.

yahoo! just posted its earnings. for more on the results, let's bring in victor anthony from axiom capital management and larry hagerty. the revenue is stronger than expected. >> slightly better. more of an inline print as far as i'm concerned. i think the devil is in the details of yahoo!. you have to look at the growth drivers. mavens is one number i'm looking at. that was down from 60% in the second quarter of 2015. so i want to look at that growth rate. i want to look at the growth rate of display in the search business when those numbers come out. the head count, what they have done in terms of streamlining the operations in the second quarter. those are the details i'll be looking at. i think the print is largely irrelevant. everything is focused on the sales process. >> what about you, larry?

>> yeah, i think the operating results are a matter of a dollar and plus or minus an evaluation of $38 per share, kelly. the real key here is if you're confident in alibaba, that it can maintain the value. i think we are confident in that the chinese consumer is strong. he and she are going on the internet. the second question is, is somebody going to get involved here who understands tax efficiency? we think the operating assets are going to go for about $6 billion, close to $6 a share, less any obligation they've got on that search dealing contract that was released a couple weeks ago. that more or less is a side show to the map event, which is the sale of the company. the company has been very badly run. i thought a couple years ago if i were on here i would have told you the trough ebitda would be around $1 billion adjusted.

it's now around $800 million, and it's falling at a 30% rate. so we need to do something pretty quickly to getting this company into more responsible ownership and operation. and we need to get rid of these wonderful hidden assets that jerry yang and his buddies found 15, 20 years ago. >> victor, search was down i believe about 17% overall, and there are lots of questions around search's roll in a potential yahoo! sale. the billion dollar that mow gillies is potentially owed. how does this search performance, paid clicks down 24% year-over-year, price per click up single digits, how does that factor into the likelihood of a sale here and the value that a buyer might see in that aspect when the downside is pretty clear with mozilla? >> if that number you quoted, the growth rate, that was better than what it was in the first

quarter. so those numbers look okay. i think that mozilla is kind of a sticking point. any buyer will more than likely if they're having contact with mozilla to negotiate some sort of structure post-sale. if that doesn't work, they'll have to factor that into whatever bid that they offer yahoo! for the company, but that's a sticking point, i think. >> we're still looking forward to more detail on that bidding process. for more, victor, larry, thank you, both. yahoo! shares down about a half of 1%. we'll also get the latest on netflix. those shares down more than 15% after hours. we'll tell what you to expect on the conference call coming up. rw technologies make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant.

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let's check on some of the names moving on earnings this hour.

susan lee, what can you tell us? >> let's talk about vmware. eps beat 97 cents. adjusted revenues as well. both license and services revenue coming in ahead of estimates. deferred revenue and billings were also ahead of expectations as well. kelly, back to you. >> all right, susan. thank you. those shares up 5%. we're just minutes away from conservatives calls for yahoo!, ibm, netflix in particular with the shares off 50%. we'll tell what you to listen for right after this. using 60,000 points from my chase ink card i bought all the fruit... veggies... and herbs needed to create a pop-up pick-your-own juice bar in the middle of the city, so now everyone knows... we have some of the freshest juice in town. see what the power of points can do for your business. learn more at chase.com/ink see what the power of points can do for your business.

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welcome back. just about a minute away from the calls, conference calls for ibm and netflix and yahoo!'s video stream conference which starts at 5:30. what are you watching for? >> more explanations from netflix about why their number was so bad. i'm also going to be paying attention to vmware, about what was so good in their quarter. >> kayla? >> netflix, the second quarter, what's done is done but they've also taken down guidance for the third quarter. i want to hear why they think this trend isn't improving. >> some of our guests were saying it might not be. there is more coming up on "fast money." kayla, john, thank you so much for joining me this afternoon. that does it for "closing bell."

"fast money" begins next. >> and "fast money" starts with breaking news. scenes of chaos at the republican national convention as anti-trump delegates try to make their final stand. we're live on the ground in cleveland with our own john harwood in a few moments time. julia boorstin and bob peck are on the earnings call. also following earnings from ibm and yahoo!. josh lipton with the yahoo! call and susan lee is listening in on big blue. i'm simon hobbs in for melissa lee. our traders, tim seymour, steve grasso, dan nathan, and guy a a ada adami. we start with the nightmare earnings for netflix. the beg headline, subscriber growth or the lack of it. only 160,000 new subscribers were added in the quarter. that's against expectations of over half