demanding impeachment of trump. when you do it -- when you're yelling that much, the yelling gets less significant. >> well, there have been centeri centrist democrats arguing -- >> it's an oxymoron, i guess. >> anyway, join us tomorrow. right now it's time for "squawk on the street." ♪ big day for snap inc., the parent of snapchat making its wall street debut at the big board. biggest tech ipo on a u.s. exchange since 2014. we're going to cover all the bases including the opening trade. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer, david faber at the new york stock exchange. stocks look to build on some more records, perhaps, after the s&p's best day of the year on explosive volume. europe is mostly green. yields around 2.46. jobless claims hit a new 44-year low. roadmap begins with a snap

decision, the open, the first trade, how the stock performs in its debut all coming up this morning. >> plus, new record highs for stocks. dow 21,000 as the post election rally marches higher. >> and mcdonald's rolling out changes to its stores, its menu, mobile ordering, delivery. ceo steve easterbrook is going to join us live for an exclusive interview. first up though, stocks coming off their best day of the year including new record highs for the three major indices and dow closing above 21k for the first time ever. this morning the president tweeted since november th, election day, the stock market has posted $3.2 trillion in gains. and consumer confidence is at a 15-year high. jobs with a watch on for a potential rate hike this month, steve liesman will talk to fed governor jay powell later on this morning on "squawk alley." interestingly state street today says on the fed, only one meeting in the past 179 meetings has a 50% hike been priced in and the fed didn't deliver.

>> well, look, we definitely need it. we saw j.p. morgan breakout yesterday and that's been the leader. that tells you very much. bank of america trading up very big today. when i see these things, i say the rest of the economy is strong enough to take it. i don't know if you guys saw the eurozone inflation numbers. this is not, as wilf and sara make the point every single morning, you could really just spend all your time talking about u.s. and miss what's happening around the world. it's a big mistake. the rest of the world is doing much better. so i think there's no excuses to not have one. there's no excuse. there were years where i said don't do it. i'm saying you better do it. you better do it because i see lots of good things coming. >> yeah. yesterday i tweeted out something you said on february 3rd, which was that the idea that they would not hike in march is fanciful. you said. that was coming off of the jobs number. pretty resolute on this for weeks. >> there's great job growth in

the country. really fabulous. and the job growth is broad. now, we know there are pockets, but the pockets are all disruption. the retail disruption pocket, the restaurant disruption pocket. but other than that, i mean, if you're working at honeywell and parker hanifen, maybe ge, you've got business. >> right. you do mention those pockets. i mean there are certainly lots of managers out there who probably are using retail as a way to hedge as a short. >> yes. >> or trying to figure out this incredible drop in traffic that we saw from january to february when it came to malls and what that will mean. those target numbers of a couple days ago, jim, were really bad. >> oh, yeah. but i'll tell you, were you on the shake shack call? >> i was not. >> you're talking about a growth of what was supposed to be a great growth chain that is not

only just sub par but is well below what a lot of the companys that are -- we're talking to steve easterbrook, i mean, they're growing like mcdonald's. mcdonlald's a lot bigger. >> certainly. bit of a bigger base. >> i have to tell you the calls leave me very cold. they have a million reasons why things aren't going why the they said it should be. >> right. >> look, here's a big problem. it tastes really good so you figure it does well. >> all right. but to this larger point that you brought up this week that we've discussed this idea of people staying home and/or whether it's mall traffic coming down dramatically and therefore some soft stores in the mall suffering or whether it's a shake shack, we'll talk to easterbrook about what they're seeing in terms of trends, people not leaving the house as much, but that is a key point here. >> yeah, we're going to talk more about the markets. of course we want to get to snap inc. making wall street debut today raising $3.4 billion in

the ipo pricing shares at 17 million a piece, values the parent about $24 billion. the ipo oversubscribed by more than ten times. they could have taken this to 19 but they want to have some longer term investors. >> give you quick stats if i can up to the minute. >> i'll stat you back. >> 12 times oversubscribed is the latest color. top 25 accounts got 70% of the stock. i've talked to a number of managers this morning that put in for large allocation, as little as 2% of what they asked for. so that is lining up, jim, to be a fairly high demand situation where you could expect the stock is going to react quite positively from the price moving high sgl high. >> they laughed not unlike what john travolta laughed at carrie -- there was a stephen

king book by the way. facebook at 19 times earnings when it came public -- 19 times sales, excuse me. this is going to be at 24 times sales. just keep that in mind. much higher valued than facebook even though facebook made a lot of money. this is considered to be a must buy by all the advertising firms. they're saying, listen, if you want to reach this mtv demographic in this new age you got to be there. the valuations make absolutely no sense whatsoever, but that's okay. if you're going to grow from $1 billion in sales to $2 billion in sales -- what? >> you said the valuations make no sense whatsoever. >> none. >> that's exactly what you said. >> but that's okay. i was looking first day facebook and that was obviously a disaster. first month twitter, that was a disaster. and that's because these things can't be valued at these prices. now, it turns out that facebook turns around because it ends up making a lot of money. even in 2012 -- 2013 was a standout year for making money. okay. this is not making sales. but the way this deal is priced

and the buzz around this deal and the fact that the advertisers love it, you're going to get a price that is ridiculous. it's not necessarily going to go down instantly. twitter went up after its ridiculous price. >> sure. >> accept the fact it's ridiculous, it's play money and don't draw any conclusions other than the fact the stock market doesn't work correctly when you have a really hot deal which has really great growth. >> of the top ten tech ipos priced in this country, the average first-day gain 27%. >> well, this should be more than that. i mean, just because of the way -- >> right. this is a growth stock where they've been starved for that kind of thing coming out. >> yeah. >> and they're going to take it. and they're taking it big. >> let's have some fun. and talk about the fact it could be a $40 billion company. say 28.5 -- actually 29. >> 29. that's what you got? we'll see. >> what's wrong with that? what's the matter with doing a little math? >> i'll give you math 1.4 billion shares outstanding.

>> you shouldn't call it alchemy. >> wilfred frost was jealous of him. and that's it. if wilfred frost is jealous of someone, i mean, other than like bond, i mean, sean connery bond. >> come back an exclusive with mcdonald's steve easterbrook about his company's new game plan for growth after their investor day yesterday. take another look at the premarket as the s&p and the nas coming off their best day of the year. back in just a moment. opportunities aren't always obvious. sometimes they just drop in. cme group can help you navigate risks and capture opportunities. we enable you to reach obal markets and drive foard with broader possibilities. cme group: hothe world advances.

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mcdonald's holding its investor day yesterday. announcing initiatives to reshape stores, menus and app. joining us this morning mcdonald's president and ceo steve easterbrook joins us from chicago. steve, it's great to have you. congratulations on two years on the job. >> thank you very much. it's good to be with you guys. coming from an unusual venue. we're in a warehouse in the west loop district of chicago. >> we got a look at some of that yesterday, some of the innovations you have in store. what are the headlines, for me at least yesterday was the work you've done looking back at lost customer counts over the past few years. >> right. >> specifically regarding your core customer. where do they go? and how do you get them back? >> that's absolutely right. you know, part of what we've tried to do is we've turned this

business around is confront the reality. because once you assess where you're at, you can then set about fixing it. so it's always driven me mad around our business when people say things like guess counts are soft. they're not soft. they're down. so if they're down, let's analyze the issue and fix it. so we put a lot of in depth consumer insight together and we have seen that the majority of the customer visits -- there's no customers but just the frequency of visit. we've lost to more near competition, that's frustrating but the heartening thing is that's the easiest customer to go back after and win back. so we're pretty confident about that. >> steve, jim cramer, always good to see you. >> hey, jim. >> 650 scores experience in the future numbers look really good. really 4% to 8% comp left. at the same time i am concerned about mobile ordering. when ron shaich, it took him to do panera two before got it

down. starbucks doing mobile ordering, too good, causing disruption at their stores, why should i think your modeling will be any different? >> it's a fair question. one of the other question we always get is kind of what's taken you so long. well, we have put a fully integrated plan together. so it isn't just the consumer facing technology getting a mobile app that's more engaging and useful. it actually links all the way through to the kitchen and the operation. so we've been very mindful that if we're going to create additional demand, can we meet that demand? can our kitchens keep up and our managers do a great job? so we will actually link from end to end as you place your order integrated into our kitchen operation so we can actually meet the demand that we'll be creating. so we're confident there's no hurdles as we grow our business. >> well, that will be good that is ahead of what the other guys are doing, clearly learned from them. i know you watch the show and follow my tweets because every time i get an egg mcmuffin you say thank you. so i'm aware i believe the stay

at home economy is the answer. your delivery idea seems made for this particular economy. the projections you're giving though are so big. what makes you think people want to stay on their couch and get a mcd? >> the reality is as we've found if you look back over the history of mcdonald's when we introduced the drive-thru, to a drive to building or the whole breakfast, those are slow burns. the reality is the customer demand exists already for home delivery. so it's not like we got to go out and create a market. there's a market there but we simply do not currently meet. when you think about some of the differentiation advantages in m mcdonald's is we are in more communities around the world, closer to more customers than any other restaurant business. so if i give you just one stat just bring that to life, 75% of the population in the u.s. and our five large international markets, 75% live within three miles of a mcdonald's.

so if we see that societal trend of home delivery growing, there is no business better place to meet it. so we want to get into it, learn, understand better, but there's a demand that exists already. i think, again, given our speed as well we can get that home delivery quicker so most customers than majority of other businesses. we're excited. we're learning. we haven't perfected it yet. we're trying different delivery models whether it's owned by us all the way through or third party aggregators, but we have a sense of urgency around this and we're going to go hard at it. >> well, steve, given the statistics you've just shared and what we have talked a lot about at this desk recently name the trend jim referenced of people staying home, of not perhaps going out as often, certainly not to the mall though that's not necessarily where they'll find a mcdonald's though might on the way, what are you seeing not just here in the united states but around the world? and what are your expectations in terms of people's willingness to actually go out or perhaps not go out as much?

>> i think what we're seeing generally is businesses have to work harder around the experience to entice customers because technology is making easier for people to stay at home. if you want to see a movie, you can put on netflix as opposed to go to a movie theater, for example. so we need people out and about. that's where we prosper in and around our restaurants. so the other part of our growth story, and we were showing off yesterday around the warehouse here is how can we make the experience more fun and engaging that we become the preferred choice when out and about. but it's competitive. that's never going to change. but we think if we can do a good job away from the restaurant to the home delivery, improve our offering and just the experience of customers in and around the drive-thru and in store then we are well placed to win that market share fine. >> yesterday's big theme was --

disciplined. we're looking at a lot of kiosks now. how much of the customer interface can kiosks become? and what's the r.o.i.? we've heard some competitors say these things pay for themselves in two years. >> yeah, for us, i mean, we already have great examples around the world already where we have a well established kiosk program. so if i use france as an example now where all the restaurants in france have a kiosk and have for years, during the busy hours we take more than 50% of our in-store orders through the kiosk. it's a behavioral shift for customers just like back in the day when airlines changed to kiosk check-ins at the airports. we resented that in the early days as travelers, but now it's a change and just live with it. we find customers prefer the kiosk because particularly larger groups or mom's with kids like to spend a bit more time, they can dwell, they can have fun putting the order together, they can customize it easier and they don't have that stress that

sometimes they feel at the front counter when they feel rushed. so for us it's a more relaxed experience. and it takes congestion away from the counter. so it's a win for customers and smooths our operation as well chrks is great. >> steve, how do we be sure that the technology doesn't overrun the labor force? we've seen incredible technology at some of these companies and the individuals just aren't trained well enough. now, they can be trained and it can work, but you can have the machines be too good to the people. >> there's a couple things. first of all, when we think about where are labor in a restaurant is based at the moment, currently a lot of that is behind the front counter. it's difficult to offer great hospitality when you've really got the majority of work behind the front counter. again, through the kiosks we're introducing a new position, we call it guest experience where we've got hospitality staff who

can help customers go through the ordering process but also bring meals to them at the table. but other places and it's training programs, we are a very disciplined operational company. and typically three or four times a year we put new training modules into our restaurants to help our crew adjust and evolve to new technology, whether it's how to accept apple pay, how do you redeem offers by the app because it is new technology for our crew to handle as well. so it's all good, customers feeling good about it and enjoy experience in the restaurant. we're putting just as much time and attention to helping our crew understand and embrace experience as we are trying to offer to our customers to enjoy as well. >> steve, one of your earliest big bets of course was all-day breakfast. and since its inception the debate rages on about whether that loses is potency over time. can you characterize that? >> yeah.

yeah, the debate rages on everywhere apart from mcdonald's. we feel good about it. some people thought a one quarter wonder and then a one year wonder, i tell you what, our breakfast business continues to grow. it is a platform of growth, do you still get the same surge year upon year upon year? no, you don't. but we've created a new kind of platform of business, customers continue to respond well. and frankly other countries around the world are learning pretty quickly from what the u.s. has done. australia and canada recently launched all-day breakfast and seeing just as strong if not stronger results. so we feel good about it. but we're not a one-trick wonder. there's lot of other things we're doing around the menu other than just all-day breakfast. >> steve, you've often talked about the idea of something ethereal involving franchisees, start feeling more excitement and putting more people on, is that kicking in? how much business did you lose because the mojo wasn't there?

and people felt the place wasn't clean enough, that kind of thing. explain that to people. when you said it to me i was like mojo? but you believe. >> i fundamentally believe it. we're an emotional business. if you believe and you're confident that exudes itself through the restaurant, it exudes the way you're willing to reinvest, your staff, encourage your crew, if you believe you're going to grow, there's a different feeling and vibe in the restaurant and customers feel that. part of the reason why we've gone to the effort we have over the last two or three months to build out this amazing facility here in the west loop district of chicago is we can explain our growth plans, you can do it by power points or webcasts or e-mails, if it's the experience you're trying to sell into the owner operators the best thing you can do is build it out, allow them to touch it and feel it. and we are really confident. every single owner operator in the u.s. is having the opportunity over the next two

months to come through this facility, our leadership operates from around the world. our own leadership teams, our board, media, analysts, they're proud of this. honestly, words only go so far. the experience is something if you touch it and you feel it, it really brings it to life. and that's why we're excited about where we're at. and i think the mojo as you described i really would be surprised if anyone left this facility feeling anything other than excited and motivated about what the future holds. >> steve, i'm glad we got you on today. >> yeah, it's great. >> thank you so much. steve easterbrook of mcdonald's. ev evan spiegel making his way to the floor with tom farley of the new york stock exchange. a once in a generation founder, of course gone from stanford,

classes with eric schmidt now made his way to this $24 billion valuation, he himself is going to have about a 17% stake worth about $4 billion, which people point out is more than the reported offer for the entire company that facebook once gave. >> yeah. and controlling the company completely there's not one voting share being offered today, which didn't seem to come up very much. people didn't seem to have trouble with zuckerberg controlling facebook or the google guys controlling google. it's what we have seen, but it's a bit rare to see not even a shred of a voting stake whatsoever being offered. >> do you think he's unhappy in any way? >> no, not in any way. >> there's nothing. everything's great for him. >> not a lot to be unhappy about. his model girlfriend is here. >> why did that occur to you, carl, gee? >> i can read between the lines. >> he's probably pretty happy fella. >> though it's interesting he keeps such a low profile. we did not know whether he would

be here today or not. >> no. >> he's not on the press release. >> no. right. >> the nyse put out this morning about the ipo. >> and unlike jack ma who hung around for a long time that day waiting for the pricing because it could be a while, we don't expect to see a lot of mr. spiegel this morning and unfortunately he's not going to join us for an interview unlike so many other companies that have gone public. what are you going to do? >> i've done this show for like ages, right? all the other stuff, i'm the 12th year -- i have been on this and only once in my whole life has my daughter said, hey, dad, could you get a selfie of that guy and send it to me? i have a selfie with him. i'm very proud of that. she said, dad, you have really made it. i've made it because i'm next to this guy? that's it? >> do we have the "time" cover? "time" magazine put spiegel on the cover. >> of course. >> he's now in one of the famous dog lenses, you said yesterday snapchat is an opportunity to be

silly, for a lot of vendors and advertisers that kind of lens is money. >> yeah. look, i understand that you can't reach this group without this -- these people. it's a messaging app. i know that it's silly so therefore we don't know if they look at the ads, but it will be a long time before we're able to shoot that theory down. in the meantime i'm going with my they're all going to laugh at your $4 billion valuation. >> jim, we'll see if we get there. i'm betting still we don't, certainly not on the first trade. i don't know where we're going to open up no doubt given it was quite oversubscribed and a lot of accounts didn't get near what they put in and a significant aftermarket for this name. >> right. the deal's locked in because the way they gave it, david. >> yeah. >> the way they gave it is going to matter. >> remember 200 million shares but 50 million went to only those who would agree to a one-year lock many of whom actually were already shareholders pre-ipo. that leaves only 150 million shares -- >> they could come in and buy

more. >> yes. >> they could come in and buy more get an average position that's a better price. look, it's exciting. now, maybe that shouldn't matter. my evan pictures. maybe it shouldn't matter that it's exciting, but it is. >> it is. carl, you're talking about a company that is absolutely a growth company but nonetheless there were certainly some concerns in terms of the decline in daily average use going down. >> right. >> moving down, obviously still growing very quickly. >> right. >> they stress engagement as opposed to that metric to a certain extent. and the willingness of their audience as kind of a best friends network as opposed to facebook, which wants everybody. >> right. >> but the question is, can you monetize it and continue to do so? >> but we won't know for a long time. but in the interim we're all going to bet that they can. >> it's this emphasis on the camera. gene munster out this morning, philosophically we think of snap trying to own the tech stack one

step above social. the camera has already established itself as the future of communication skprks they are all in, munster argues, on the camera, whether it's the platform itself, whether it's hardware with spectacles. and any other future hardware they put together with partners. >> it's really important for people to understand this is a must-buy for advertisers. advertisers saying, listen, you just got to throw money at these guys. and that matters. we don't know if that's going to work for a long time. in the interim people are going to say, listen, you've got to try it. that's what matters. >> right. and if you are advertising, you've got to try to be creative about it because people can skip your ads. so advertisers who use snapchat have to come up with things people will want to see. >> jim is determined. >> i'm getting up. i never get up. okay. i never get up. >> he's on the move. >> look, look, look at this! who is cool? who is cooler than i am?

>> you got it. when did you get that? >> who's cooler than i am? hey! who is cooler than i am? see. there. i'm not kidding. i've made my case. this is a chick magnet. >> jim talking directly to farley and spiegel who were at the balcony. one thing for sure, guys, just the pageantry of today is a potential boost to user growth, right? >> oh, yeah. >> in the prospectus they point out the average user opens the app 18 times a day. >> that's the number you keep hearing when people say, oh, you're twitter, they say 18 times a day. now, i mean, my daughter, she might do it double a day. >> 25 minutes a day spent by snapchat by the average user, 25 minutes, that's the engagement again they shared in prospectus. 60% of u.s. 13 to 34-year-old smartphone users, that's the key

for the advertisers as you said. they don't care about us. >> no. and i love it because screen shot, the picture disappears in ten seconds. so if you don't have the appropriate makeup, you don't feel bad. it's no esteem problem. like facebook it's up there forever. so if you have blemishes, i mean, i don't want to be talk about vanity, do you think it's vain to talk about that? >> dealing again want to be kept to the people who you consider your close friends. don't care what you look like anyway? >> no, that's okay, concept of close friends is something advertisers are comfortable with. >> it's all part of this narrative written they do things unlike anybody else in social. >> right. >> so whereas twitter was about curation and discovery, this is about keeping it close to your friends. it's not landscape, it's portrait. it's not san francisco, it's venice. >> it's venice. which is a lot cooler! it's still good, stanford. don't worry about it.

there's still the stanford thing. you know, stanford was my backup school when i applied. >> i'm sure it was. >> yes, it was. >> let's get the opening bell as we watch farley and spiegel. [ bell ringing ] >> at the big board snap celebrating its ipo. we'll have the opening trade when it happens later on this morning. no telling when that will be. typically in the 10:00 a.m. eastern hour. could go a little longer. we'll find out. >> i hope it's not too late. come on, it's too much fun. look, again, fun, usual caveats. i already said it's going to be saying it's overvalued. >> you did caveat. >> if anyone wants to go to twitter and see two guys who are

remarkably happy. >> those guys. >> yeah, because my daughter said, dad, cramer's cooler than i ever thought. first time since i -- no. since 1973. >> 1973. that's when you're going back the last time you were cool? >> had a really good year. i had it and so did the sterling vineyar vineyards cabornet. >> so did the mets. game seven. >> you pointed this out yesterday, they come in with such a tailwind that there are no excuses to having a weak open today. >> yeah, there's no excuses. it is very difficult for consumer packaged good company to say, you know what, we're not going to sample that. forget it. we're going to ignore that demo. because that's the demo it's trying to decide between crest and colgate. right then crest versus colgate. right then the kind of shampoo you use, right? right then e.l.f. versus estee

lauder. right here battleground for beauty right here. for clorox, this is it, david. this is it. not for huggies and pampers, thank heavens. bad buy there for them. >> that would be an awkward snap. more discussion today about a would-be copycats. there's a company in korea called snow being talked about does essentially what snap does. evan williams of twitter fame has a new product out today called series. >> look, we know instagram stories did slow it down. but we also know this that there was a backlash among the true believers in snap that instagram did that. there are true believers. there is something ethereal about snap that much more of an intense relationship. obviously the user, the metrics show there's an intense relationship. >> yeah. on the larger issue of the capital markets it is certainly been some time since we've seen an ipo of this size.

as we've said many times a dearth of initial public offerings last year one of the lowest we've seen i think since 2009. >> right. >> and there is hope that this will certainly embolden other companies. nobody's expecting uber or airbnb to go public this year. >> right. >> that seems as though perhaps an '18 -- yeah, uber has some management situations. airbnb does not, but again their gestation would seem to be longer. they can access the private markets for so much, not just equity but debt, they can keep going for a very long time. but this is important for wall street overall to start getting a bigger pipeline. not to mention the nyse. by the way the banks are up this morning while the general market is down. banks were up again, guys, not because of this. >> no. >> the expectation of higher rates. >> there's an unbelievable sense that this helps a lot of tech. for instance, the alphabet data centers, i mean there's $400 million check going from these guys. >> every year.

>> yes, every year. if they slow down, that's the kiss of death. everybody we look at here i'll try to get that picture off it should expire in ten seconds if they slow down. if they have a slowdown, then all of these valuations we're talking about, which is why i say it could be ridiculous. remember, facebook was making money not long after. these guys do not have those projections. >> they're coming to market much younger than either twitter or facebook, only five years old. >> that's smart. because we're still in the sampling phase that every advertiser's there. no advertiser said we don't get a return on investment yet. it's too soon. >> it has moved fast. it was only four years ago i interviewed spiegel on the floor right here. he did an interview with us. >> he was on number four on the subway? >> we did it on the floor. >> oh, floor, i thought you said four. >> guys in the booth, do we have spiegel a few years ago? take a look. this is snapchat with david four

years ago. >> snapchat is not a way to send inappropriate content because any photo i send to you can be saved by someone with quick fingers taking a screen shot or taking a photo with the camera. it's not a great way to send inappropriate photos. >> so all the stock in its offer sex texting -- >> i wouldn't know. >> sex texting. is not true? >> well, we don't see the photos. >> huh. >> i was obviously struggling with even saying the word sexting. not something i was that familiar with, but they have clearly moved on very quickly from four years ago where we were simply talking about disappearing photos as an opportunity to have a -- >> insider trading. >> as you brought to preet bharara. >> i want to ask you what percentage of your kids use snap versus instagram? >> my oldest one is not a snap user. he's an instagram user and my youngest we haven't let have a

phone yet. >> mine is 60/40. >> when i'm on the couch and they grab my phone, it's snapchat. >> yeah, that's why colgate is sitting there thinking i can't think about a bubble or not, i got to get these guys kids, i can't reach them. mtv you can reach them. this is mtv for the new generation, a lot of four-minute shorts, a lot of different new stuff to look at. you got to get this demo. this demo is making up its mind right now. >> one thing really quickly, jim, that i don't hear you saying is this rather unique three class structure is a turnoff, right? >> yeah. >> where evan gets ten votes, existing investors get one and new people get zero. >> it's a younger state. that's just the way these guys do it. it doesn't matter until the stock starts going down. and then we're going to really look at it. you know? i mean, it starts going down, people are going to say, hey, that's because i have no vote. the same way by the way when the stock starts going down, you

know what happens? the advertisers cancel. and then they're stuck with a gigantic bill to google. but that's all out there in the future. we don't want to think about that, okay? >> no. but so far the fact that the founders have control of the major technology companies we talk about so often, at least facebook and google and alphabet has actually been viewed as a positive. >> yes. >> they are not going to feel forced to do things in any sort of sense quarter to quarter but going to make the long term decisions that are necessary to ensure the long term health of the company. bezos also although does not have that kind of control and amazon has been given that opportunity and earned it. >> i like the contrast with marc benioff, he has real shareholders. thinking long term he's done well. but if someone were to go to marc benioff say with $56 billion market cap with an $80 billion bid, david, i don't think marc benioff would say, hey, listen, i got -- you can't

do this. i'm against it. >> jim, he made it clear on your show when you asked him about it the other night, benioff, that he would hit the bid. seemed to me. if somebody's actually willing to offer that number, seems to me he knows what his shareholders want him to do and he would be willing to do it. the question is will anybody actually be willing to make that kind of a number. >> correct. >> let's get to post eight, which is going to be bob pisani's home for the next couple hours. hey, bob. >> good morning, guys. we are inside as we have been on so many occasions. of course with twitter and with alibaba here. and we are waiting for the stock to open. there are no indications as of yet. it's going to be a little while, but let's talk to the man in charge of ringing the bell along of course with the co-founders of snap, tom farley, ceo of the new york stock exchange. tom, big day for you, congratulations, big win for the nyse. >> yeah, it's great. it's a fun company. i snap back and forth with my three daughters and wife, so for me it's particularly fun. >> and you were rather shameless in the months leading up to this

walking around with these spectacles of course all over the floor of the new york stock exchange taking snaps. what did it take to get this kind of account? what was in the conversations that made them decide to choose the new york stock exchange? >> i don't call it shameless, bob. i call it authentic, an authentic form of marketing. but, you know, look, we're having all the large ipos here at the nyse. i think this is the 28th straight ipo here at the new york stock exchange. we just had to do the right things to make sure they would have a great home here, for starters a smooth ipo day, which is what you're seeing going on behind me here. and in the years to come we'd be there for them. >> evan spiegel declined our request to spend the morning with us, but you spent the morning with him, how is he feeling about it? >> i spent a great deal of time with him and his family, his mother, he's in a good mood. this is but a small milestone for this company, that's the way he thinks. he's building a company to last for many, many years so that's kind of what i've ascertained.

so sure he's excited but excited to get back to work. >> let's bring you in the process behind us. we have two of the best people in the business, patty murphy, glenn corelle building the book, they've won all the big ipos for several years. walk us through the process about what's going on. of course we see the traders outside. they've got orders to buy and sell, but there's a lot else going on right now with goldman sachs actually building the book. >> what's different about what goes on here is there's two processes you have to understand, one upstairs with the dream team of investment banks snap has assembled, they're talking to some of their customers trying to find out where the bids are, where the offers are and the same type process is happening here on the floor with this whole group of brokers. they're communicating with even a broader set of investors. so those two groups, both gts and the bankers upstairs led this morning by goldman sachs as a stabilizing agent, they're communicating constantly. i've been in touch with goldman

quite a bit this morning. there's goldman representation here as well as some of those other investment banks, morgan stanley and others. and it's really the coming together of those two processes that we use to ensure a smooth ipo processing. one more note, bob, we won't open just because people want us to open or at a particular deadline. we'll take as long as it takes to have that price iteration slow down so you can have a smooth open. >> how long will it take? obviously big ipos like this have taken a while, twitter took a while, alibaba, when do we think this might open? >> let me bound it for you. a really small ipo that's not complicated is 20 minutes and alibaba is two and a half hours. >> 12:00. >> no, this one is in between. 12:00 would be alibaba. can't predict with perfect accuracy, but this is a smaller raise than alibaba. so i would hope that it would open a little quicker than that. >> before i let you go, you've had a big number of ipo wins, but the biggest one is still out there, ara mamco, they've talke

about listing on a different exchange, can you update us on that? >> i'm not going to comment on whether or not i've had discussions. i will point out with respect to energy we are far and away the global leader here at the nyse. the stats are almost staggering. i think we're three or four times the size of the next closest exchange. so to the extent a sa-- of cour we would be talking to them. >> we got to let you go. the market is at new highs, you're a market watcher. do you believe the trump agenda of reducing taxes, increasing infrastructure, less regulation is going to lead to an increase in earnings, which is what the market is betting. what's your take? >> i've said this to you before, bob. i'm not a great prognosticator but i'm in this position where i get to meet with the leading ceos and the number one issue for the last three years has been around taxes. so if we can come up with a tax plan, and i know there are many a slip twix a cup in the lip, not easy to do, but if we can come up with a lower tax plan, i

suspect it would be good for the economy. >> tom farley, thank you so much. patty, do we have anything happening at all? okay, no indications yet. patty murphy, best in the business behind me. we'll be standing here all throughout this process bringing you updates on how snap is ready to go public. back to you guys. >> we're going to keep you busy, bob. talk to you in a bit. bob pisani at post eight. we haven't really discussed the impact on the exchange or on goldman and morgan stanley for that matter. >> well, look, i think there is the multiples for the big brokerage houses have lacked these kinds of deals and you get the rates up, you get more -- you get these ipos and we can raise numbers. i was looking at goldman sachs today saying how do they ever justify paying 255 remember it was at 165, but it's a different company if there's a lot more deals, different company if there's a lot more m&a, different company if there's more credit balance gain. so we got to be aware that these

companies having anticipated some but haven't anticipated the hoopla. >> david solomon made comments this week at goldman, goldman has been part of 14 m&a deals in the first six weeks of the year. >> and i think this year is going to see as i've said many times some very large potential transactions. tmt certainly means technology, media telecom. i think when it comes to the telecom part of that we've got to wait and see. there has been a real level of activity when it comes to merger and acquisitions that has not yet shown itself, i think. but certainly from the conversations i have about the conversations that are taking place we would expect to see later in the year perhaps some big things. but a lot depends on what you just heard farley talking about. certain deals you're going to want more clarity on tax reform. >> right. >> you're going to want to have more clarity even on dereg to a certain extent or antitrust regulation and how that's going to figure in. but, yeah, it should be a pretty

good year it would seem at this point given at least the dialogue that is taking place, jim. >> well, how much of it will be out of weakness, david? >> a lot of it is driven by lack of top line growth. but that's been the case for many years now. >> but we have too many restaurants. actually, saw restaurant brands buy popeyes but we have way too many health care companies, way too many insurers, i mean, why can't -- look at aig the other day, david. if they're going to get rid of peter hancock. >> it's very much unclear they are going to. >> well, but there's obviously stories about that. >> yes, there are stories about it. >> but that's a company that would be leaderless. and someone might buy it because it's low book value. >> it's possible. >> i'm just saying when i see -- >> although those from weakness don't necessarily come up with a big premium that will reward shareholders. >> good point. >> and growth companies out there like the one about to go public here that will trade at

mull pmultiples that make them too high for many companies to feel comfortable buying. >> once again we have to hear many people have to say top. this could be a snap top. they have to do it because of the way that wall street works. if you got a certain piece on the ipo and then you come in and average up, that's what happens, so you have to recognize that the process of an ipo is not going to necessarily produce a low price other than when google came public and they used at auction. and it would turn out to be a fabulous thing. >> i guess the question is and i don't expect you to answer but i'll ask is a year from now snap will be lower or higher than opening trade today? >> i would say lower. >> really? >> yeah. i would say lower. i think that's about the cycle of when the advertisers would find out whether it's for real and very few advertisers i think are going to really be completely excited about the prospect of something that disappears so quickly. they'll have other programming. but i think it's a cool site,

it's a silly site. it's not a facebook site, so it will be harder to be profitable. >> sure. >> i'm not saying it's going to be twitter. i know twitter has a lot of things going for it that they're trying to change. i'm saying facebook is a unique place to advertise. it's fabulous. as is alphabet. fabulous places to advertise. when you're these advertisers, eventually you're going to say, i know i should have bought, i didn't get the return, i got a good return, but not a return that's going to justify 40 times sales. >> right. interesting you mentioned twitter. we mentioned the top ten tech ipos average first day gain 27%, the best of those ten was twitter 72%, almost 73% that first day. >> yeah. >> of course it's come down. >> but then it did go on december 26 went to 74.73, so opened at 45, high of 50 that day, then went to 74.73 then it was just like that north face of everest that is just so bad and

well let's just say all she wrote became the king of the groupons and the zyngas. >> listen, i mean, to their -- i don't know if you want to say credit, they tried. they tried to sell themselves. they thought they had a deal. >> yeah, but they -- >> you had somebody sign an mda, a few of them and some maybe even violated those ndas but then saying things, but they didn't get it done. >> no. >> they didn't get it done. >> because shareholders may not like that price and would threaten to bring down the stock to the acquirers. >> that is true. you and i are speaking in code. >> we work our butts off to get this stuff. >> we do. by the way when it comes to ipo performance last year, twilio, the ones we did have seemingly were priced to really rise sharply. >> george hugh just became the c.o.o. of twilio. i spoke with jeff lawson last week, he's doing fabulously, that's the backbone for uber and

netflix and airbnb. but that stock lost a lot of its fizz because it was not able to generate an unbelievable number that you have to do, not unlike what happened with box which i have on tonight. they ask for so much. the market asks for so much. and they will ask for too much out of snap too. and i think it's interesting this whole venice thing not being silicon valley. >> yeah. >> i think that kind of works for a moment. >> for a moment. >> yes. now, snap/gopro, that's too mean. >> yeah. >> jane fonda, baby. >> as we're talking we mentioned miranda kerr. her snapchat profile is public unlike spiegel, here are some of her snaps in the past few minutes as she works her way around the floor. >> i like that. do you have a squirrel one?

can we give a squirrel, please? no squirrels? i've got great ones from my daughter. they're squirrels. i'm not going to show them because i actually have some decorum. a shade of it. >> so as we wait for our first indications on snap, let's get to the bond pits and check in with rick santelli at the cme. hey, rick. >> good morning, carl. well, we are continuing to watch the dollar index and treasury rates and for that matter most sovereign rates melt up a bit right now. one-week of tens gives you an interesting view. we've basically covered about two-thirds of the closing range in a week from low 2.30 to around 2.5%. but here's where it gets interesting. let's look at tens minus bunds. we've always looked at this as a barometer somewhat differentiating variety of issues, whether it's growth, future outlook between europe and the u.s. now we see that it's been hovering right around 2.16, 2.17. on this particular chart notice the high end december 2.75,

notice recent low at 2%, exactly half way back is where we sit. that's important, especially in the context of the rest of these year-to-date charts. look at tens basically up 2.5 basis points on the year. dollar index is within striking distance of unchanged. euro versus the dollar, within striking distance of unchanged. then there's the s&p. i picked the s&p 500, i could have picked any equities. notice a difference year-to-date? yes. we can all talk about treasuries and how they're in competition or capital issues or fed balance sheet, raising rates, all of those things, but in the end we've had the volatility but not a whole lot of net change from where we settled last year. and finally, here's the way a chart looks when it goes guns hot, april fed fund futures. sure, i could go over the math and the variance of the math for percentages, but look at april feds funds futures in june remember july of 2016 is when we

made the second attempt at an all-time low yield at a 1.35 area for tens. look at how we've responded and look where april fed funds sits now. carl, jim, david, back to you. >> thank you very much, rick santelli. obviously we're going to keep an eye on snap's wall street debut. we're going to bring you the first trade once it happens. meanwhile, a bit of a pause after that monster rally on wednesday, dow's down ten points. we're back after a break.

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what's in your wallet? awaiting snap ipo, pricing above the range at $17, valuing at nearly 24 billion. no indications yet, but bob pisani's going to keep us honest on that. meanwhile, fairly muted open for the broad indices is going to allow us to put extra attention on this new issue. >> yeah, look, we had a huge rally yesterday. and anything other than just -- anything flat is actually a nice verification of what happened. i don't see anything worth

trading on today other than avago, which is broadcom. they had a remarkable quarter. and burlington, which also had a remarkable quarter. and those are really kind of it. other than shakeshack. and i really recommend the broadcom quarter which is they kept the symbol avago, stock only up six, i think it should be up more. it was a remarkable quarter. truly fabulous. >> an upgrade of exxon at credit suisse. >> i like gravitas, mostly because analysts stayed away from it during the decline. it was a good report. i think the oil stocks are just floundering here because we need to see oil breakout or natural gas turn on some cold weather and we don't have that. the cold weather play has turned out to be a disaster, never even got cold in chicago. >> see the cherry blossoms in d.c.? i mean earlier than ever. >> nature's been fooled. >> i tweeted picture of tree in central park this weekend that was blooming. >> did the news wires pick that

up? >> i think bloomberg may have picked that up. by the way other things to pick up, snap here -- the underwriters are actually a little concerned as we're not picking up this thing is going to go too high. >> well, what did i tell you, john travolta? >> jim, what's tonight on mad? >> we have box. i'm in a box with that travolta thing. the guy is really good and platform been a disappointment coming back, aaron did have cash flow positive. i'm very excited about snap. mostly because -- >> you've gotten more excited as the week has gone on. >> yes, because i check with a lot of advertisers. and i had to be sure. i did not know how strongly they wanted it. and that was the key because if they really love it, then you can sample that for a long time. >> you said it's going to be lower a year from now than where it opens, the advertisers are going to sour on it. >> look, you can't sell at 40 times -- david, there are things called multiples. and you can't sell at that much high a multiple, you can't sell at 40 times multiple of sales

when facebook is selling at 18 times next year's earnings. you can't. you can't. it's einsteinian. >> einsteinian. >> don't need watson. einstein gave me these numbers. thank you marc benioff. just kidding. >> jim, we may be talking with you later today. >> really? i don't know, i got to meet with some old fed guy. >> "mad money" tonight 6:00 p.m. at the very least. when we come back, more coverage of snap's wall street debut including the opening trade when we return. about your brokerageees.ave a qn fees? what did you have in mind? i don't know. $6.95 per trade? uhhh. and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $6.95 online equity trades and a satisfaction guarantee. you don't like their answer, ask again at schwab.

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good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen and david faber at the new york stock exchange. snap's ipo set to go public on the floor this morning. priced last night at $17 a share. that's above the projected range, gives it a market valuation of nearly $24 billion. if you haven't heard by now it is the largest tech ipo on a u.s. exchange in more than two years, almost three years. aside from that relatively quiet action dow's down three although the market's on track for six weeks of gains. bob pisani watching the snap

action at post eight. >> we're getting not necessarily to opening but closer to an indication. there's a little more yelling back and forth here. we've got patty murphy in the back, you see him, one of the best in the business, handled many of the big ipos including alibaba and twitter before. based on my experience doing this for a long time i'd say we're two, three, four minutes away from an early indication of where trading might begin. again, very early indications but given the demand and interest wouldn't be surprising to me if there was a two in front of it at all. we're waiting for that. we're getting very, very close. important thing about this is this is part of the whole process, the book building business. you see the traders outside behind me. they have orders to buy and sell, very old fashioned really an auction process. you can hear them yelling back and forth orders to put in to buy and to sell at the same time goem goldman sachs is called the stabilizing agent, lead book runner, they're building a book with clients around the world, around the country who have indications of buying and selling interest. very old fashioned combination of people on the floor shouting

out orders and high-tech electronic book building that's going on right now. but of course retail investors care about is how it trades at the end of the first day. can they make any money if they buy in right at the open? this is a tough game sometimes, often the big retail players will move up on the first day and six months later if they have problems remember facebook in 2012 when it finally did go public they priced at $38, opened the first day closed at $38.23 just a little on the upside. six months later had a lot of proble problems. twitter had a huge first day overall 44.90 and it of course had problems six months later and now trading around $15. alibaba in 2014 priced at $68. closed the first day at $93. huge first day. right here we were standing here. and of course within six months that went negative. now $104 roughly. so i think we're going to be getting indications any moment

now. 21 to 23 is the indications for snap. $21 to $23. doesn't necessarily mean it's going to open there. i anticipate it will open between 11:00 and 11:30. in between that time what you've got here is people looking at the initial indications, goldman, people on the floor are looking saying this is where we're initially indicated. and people will say, okay, i'll take 2 million at 21 or i don't want any at 23 and now it keeps changing. people keep putting -- this is a dynamic process. people keep changing. it's a poker game. a gigantic poker game of some people want in, some want out and nothing really happens until the last 15 minutes. this could go notably higher. we could go $23 to $25 or could go down a little bit here. early indications are certainly very good. remember talk was $14 to $16. the price was $17. now our first indications at $21

to $23. patty, any idea here? another hour away? yeah, they're saying nothing's going to happen immediately. again, we still think it's going to be roughly one hour away. keep a close eye on that. but certainly a very good sign early on $21 to $23. remember, what everybody cares about is how it ends on the first day and how your average investor coming into this game is going to do in the long term. that's what matters. it's the six months from here that really will determine whether people are really making money on the long term in the game. i'll be here waiting and price any changes. we'll let you know. carl, back to you. >> bob, just a question from me as we await this opening trade. love seeing what you do inside that pit. just in terms of what this means for where we are in the market cycle, it's hard not to marry this with the fact that this is a hot market, hot ipo in a market that went up 300 points

and had the best day of the year yesterday. how do we use this snap ipo highly anticipated biggest tech ipo since alibaba as a marker for where we are in this rally? >> well, look, in theory this should be a phenomenally hot market. but the market has been coming off lows since the middle of last summer. i did the first ipo story getting better in june of last year, sara. and you talked often about it as well. and yet it hasn't really materialized. we had only five ipos in the month of february. that's a terrible number. i am hopeful that if this is successful and i don't mean just necessarily today but in the next week price holds up and does well, there's more than 100 unicorns out there very high value companies that are out there that may finally take the bait and move forward. this is an enormous backlog. i think april could be a phenomenally great month if snap holds up pretty well. so there's a lot at stake here.

just the idea markets at new highs, we had that back several months ago. it was necessary but not entirely sufficient for things to happen. i think we need a really successful ipo, maybe this one can be the one here. we've been waiting for it for a very long time, sara. >> we're not far away from finding out, bob. back to you soon, bob pisani at post eight. as we said earlier all of this as stocks continue to hit record highs, dow, s&p, nasdaq, their best day of the year yesterday. dow 21k for the first time ever. let's bring in fund strats founder and mike santoli, busy morning, guys, good to see both of you. mike, nice piece on cnbc pro last night. sort of putting this rally into context and treating it as you said with some respect. >> it's definitely earned respect. to me the main feature of this rally has been its persistence. it's not been so much until yesterday it was surging in leaps and bounds. it's the fact there's been this quiet urgent bid, demand for

stock increasing over supply of it and it's basically kind of passed through a lot of these warning signals, tactically speaking that we saw crop up a couple weeks ago. i think a market that kind of declines a lot of these excuses to weaken is one that you have to respect. now, it's running very hot right now. it looks overbagought. it's more so than a couple weeks ago. if you're going to have a 5% pullback, almost every year you do, it's going to start at a level where you're up in thin air like this. doesn't mean today. >> does this fit with your world view? >> well, this market has far surpassed our expectations year-to-date. it is amazing to see this underlying bid. i mean, i think we've obviously had a good economy, so it's supportive. but i think the divergence is what concerns us. you know, the bond market isn't as bullish as the equity markets. so i jursz want to see how that plays out. >> i wanted to ask you, mike, about covering ipos over the years. you see a company like this where we're seeing tremendous

revenue growth, though a short period of time, it's not profitable, it looks like there's high demand opening very hot at a very high valuation is even against competitors like facebook when it first went public wlarks do you make of it all? >> i think it's a feature of a bull market. not the waterloo of a bull market. what i mean by that is normally all-time highs as you were saying you'd see a stream of these types of deals. you'd see marginal companies you really hadn't heard of getting crazy valuations and popping on the first day. you wouldn't see a very widely viewed as successful huge company like snap, kind of a seminal player in this industry going public finally as being the thing that sort of tells you that these excesses are getting extreme. at least in my view. look, again, it's one of these elements that you see of a bull market beginning increasingly to act like a bull market, such as ignoring, you know, overbought readings and having people get in there and buy all-time highs.

>> is that true, tom? does every top need to look like globe.com? >> i remember some of those tops. yeah, it doesn't feel euphoric at all, right? i think institutions have actually been holding risk flat. the money that's been coming to the equity markets have been etf flows. and then you have companies, you know, internet as a space has just been driving so much of the growth in the u.s. economy that it doesn't surprise me you're going to see some big valuations for these stocks. >> you have been pounding the table on f.a.n.g. for a while, right? >> well, crap and lang and laggards. >> you should explain. >> it's an acronym. cf computers, r for resources, a for american based banks and the t is for telephone companies, so net neutrality play, but it's basically cyclicals. >> that's one of the interesting things, tom. this phase of this rally has been about old economy, it's been about global actual growth,

real asset -- i'm saying that makes it a great thing, makes it sturdy. but it's not hopes and dreams. it's nominal gdp growth around the world looks like it's trending higher. that's kind of the message of the market. >> yeah, but aren't there high expectations for policy action from the trump administration, republican congress, how much is baked in there? and how much has to go right for this market to keep where it is? >> my sense of it is it just keeps investors focused on upside risk from policy. i don't think the market is so cranked tight in need of specific policy help right now right here. >> tom, your concern though about a flattening yield curve and what follows, aren't you? >> yes. because, you know, the yield curve tells us what you can expect for making long term investments. when it flattens, it's telling us incremental returns for businesses is declining. so this is something that has almost always prestaged weakness in equities. that's why we're watching it. i agree with mike, i think there's still some fat pitches about buying stocks with a lot of heat, like energy, the banks,

energy, old tech. i mean, these are really still deeply discounted sectors. >> don't want to be reaching out on multiples, is what you're saying? >> that's right. i think you don't want to pay too much even for quality. i think you can actually make some good bets on deregulation. it's really explained most out outperformance of some of the sectors year-to-date. >> what do you make of people pointing out etf volume yesterday especially in the s.p.y. are we in the thick of retail return? >> it certainly looks like it. year-to-date etf inflows are running four times last year. there's $7 trillion of savings in the past decade. very little went to stocks. in the next ten years it's a good bet they'll be a lot of inflows. but i don't know if it means stocks have to keep going up. >> i also wanted to bring up the fed been a big story, mike, this week. i know there's a big interview we've got in "squawk alley" next hour with one of the fed governors. the two-year yield right now is at the highest level since back in 2009. what does it tell you that this market is able to do what it's

doing in the face of rising expectations of fed hikes? >> it tells me when we have those fed expectations building at a time when you're seeing the macroeconomic indicators confirm that there's momentum, i think it's okay. and you have by the way the s&p financials sector up 3% in a day yesterday. which was by the way not about the president's speech. that was about the fed expectations going up, mostly. and i do think that's why you have this engine. i don't know if it means that the fed has kind of learned last year's lesson which is don't raise the market's expectations only not to do anything. or maybe get a rate hike out of the way before pins and needles election in europe. i mean all these things maybe are coming into play, but i think the market's okay as long as economic numbers are cooperating. >> mike, tom, good to see you guys. >> good to see you. >> don't go too far. we're going to continue to await the open of snap as we head to break. but we'll give you the latest on their market debut as we have it. stay with us. dow's down 18.

cameras augment the way we talk. >> let's get to bob pisani atd post eight. >> 22 to 24 now is the

indications. remember the talk, $14 to $16, pricing at $17 early indications $21 to $23 that is now up $22 to $24. as i said before this is a dynamic process. it's a poker game. everyone saying i'll take 3 million shares at $20. i'll take 4 million at $21 and then the price numbers come out and people say, no, i don't want it at that kind of price, i'm dropping out. other people say, oh, wow, okay, we're in. 3 million at $23. it's a giant poker game with people being able to take money into the pot and take money out of the pot at the same time. and at the end of the day one price is given to everyone who's money is still in that pot. very dynamic process. we'll keep an eye on all of this, but there's pat murphy putting together the book in conjunction with goldman sachs who's got a desk of their own. they're putting together orders. of course you see hard to see but there are traders shouting out orders to buy and sell. again, they'll change. they'll tell we have 3 million shares of 22, their customers

will say, huh-uh, forget it, i don't want 23, only want 2 million shares, no, change that 2 million at $23. so it's part of this is the fun of watching this is how you combine that old fashion open outcry system with very modern trading technology, assembling a book from orders thousands of miles away at the same time. it's one of the best things about this job being on the floor of the new york stock exchange. capitalism in action. a lot of money being made today, and of course a lot of people involved in the money making business here. so, again, $22 to $24 current indications. i still think we're an hour away, frankly. and that's the normal pattern for something that's as big as this. anything changes of course i'll come right back to you. guys, back to you. >> bob, thanks for the front row seat. bob pisani inside that pit where we are waiting that snap ipo opening price. and for more on whether you should be investing, let's bring in business insider founder and ceo henry blodget and mkm senior internet analyst rob sanderson.

rob, you call this the most high profile and most controversial ipo of 2017. we know it's high profile. why do you think it's so controversial? >> well, i think first of all the early stage of the company, the valuation based on developing revenue model, some key questions coming out of the recent metrics, young and inexperienced management team, an application that's largely not that relevant for a middle-aged money manager, there's a lot of dynamics at play here. >> henry, what stands out to you? you're down here for the big hype of it all. what does it remind you of? is it a twitter, a facebook, is it something else? >> no, reminds me of pretty much every big tech ipo of the last 20 years. they're very controversial. you've got a lot of people who look at the valuation and says it's insane, it's crazy, it's going to zero. a lot of other people including aun smartest investors in the world taking long positions, having come up with scenarios where they can go on to be worth a huge amount. and there are certainly scenarios where snapchat fails

here down 80%. there are others where over the next few years you're up 3x to 5x from here. that is the thing everybody's struggling with and depending where you come out on that story you can construct stories to justify investing. >> we played that little clip before of evan spiegel, that pitch it as a camera company. how does that register in terms of valuation and where future profits will become from? >> to me that was one of the most worrisome lines in the ipo filing was that snapchat describes itself as a camera company. i think right now it is an app. it is actually a communications platform. uses cameras, but if they're going to move into hardware or even if it is software cameras, that is a different kind of business. that said knowing evan he's very smart, probably looking very forward going off of spectacles saying, look, don't just think about us as this app. think about us as communicating with photography and video going forward. >> rob, how do you characterize spectacles right now? and how much of a canary is it

into this coal mine in which snapchat wants to lead investors? >> yeah, i think, well, first of all the calling it a camera company i think that's a little recognition that their user base considers camera and app. they didn't really have a camera growing up. the spectacles initiative largely they've done a create v job in marketing creating buzz around this. their community's really enthusiastic for the product. but as a business i think it's just another capture, content creating element. and, you know, virtualized experience in some degrees, but it's not the backbone of where they're going with this company. >> rob, obviously one of the big features here is that they skew younger. their biggest portion, majority of users are 18 through 24. i've heard of bull and bear case on this. bull obviously that's a competitive advantage, it's an asset for advertisers, the bear case though is that it might not be a very loyal group. how do you view it? >> yeah, that's an open

question. another area of controversy. i think that demographic's been particularly hard to get to with advertisers with traditional media. that's the great promise of snap there's a very high engagement level among that cohort of users. they're largely absent or increasingly absent from the traditional marketing vehicles. and whether or not they're loyal how long term that's an open question, but so far this company i think has the finger on the pulse of that demographic. and that's a very creative demographic. and they're learning from their users really quickly, faster than anybody else can because they mix in other cohorts is just very different. >> henry, you know your way around a bull market and internet stocks, or perhaps a bubble and this is not that. carl mentioned theglobe.com earlier which brought back some memories, but to be fair multiple on this thing call 24 right now it's going to be pretty darn high. >> absolutely. >> what do you think for a valuation perspective? >> i think we talked about the two key issues.

snapchat has the demographic, advertisers are flooding in, revenue's going to grow incredibly rapidly over the next couple years no matter what happens. but if user growth continues to breakdown, the stock is done. it's going to break down, there's nothing propping it up. there are no assets here or anything else. if the users start to go to instagram or somewhere else, that's it. >> daily average users -- growth has gone down. >> growth has slowed. company has a good explanation for that, look, it's expensive to store photography. we're not going to invest a huge amount of money in markets where there's not a lot of currency right now concentrate on the united states and europe. that's where the real money is. facebook is making $20 a quarter from each one of its daily average users in the u.s. and europe. we're at 2 we have this great platform if we can keep growing our daily average use eshs from say 100 million now to 200 million that gives a huge path to $10 billion of revenue. that is the bull story. if they continue to do that, good story for the stock from

here, but the risks are real. and you've identified the key point which is the growth is slowing. if that keeps up, it's the same thing with twitter. twitter's growth slowed up, that was it for the stock. >> rob, can they continue to keep it up? how do you view the competitive landscape here with instagram stories now at 150 million daily active users coming on the heels it just launched in august? >> yeah, i think there's, you know, different overlapping demographic. and i don't think that the feature of a story on a different platform and the adoption of their cohort into that feature is necessarily cannibalizing what's happening on this network. they have identified some issues on the android platform. it's a more unstable app on that platform. if you look at the deceleration, it's really in rest of world as opposed to u.s. and europe. fixing the android, i think, has potential to reaccelerate the user growth. that is an unusually hot item for an early issue. it's all about one metric into

the first earnings report as to whether people label this the next twitter or next facebook. >> i think we also, henry, have to mention management credibility here always, but especially in an offering where all the shares are not going to have a vote. and you have to put your trust and your faith in that guy we just saw there, evan spiegel, who's not here anymore, is the founder, 26 years old. julia boorstin told me earlier he's a product genius. >> investors are counting on him being a product genius. he's certainly shown huge skill at that thus far. but that said i do think that one thing's a little bit different here. if you look at facebook, sheryl sandberg head of business operations at the time they went public very strong. no issue with evan's age in ceo in terms of prouduct direction, but running a global massive business is very difficult to do. we're going to see whether snapchat actually has the infrastructure and leadership in place to do that over the next couple of years. >> a friend of ours tweets, if i

were to offer you $100 in shares of facebook or snapchat, which would you want? >> put it this way, you would have to be prepared if you're betting that 100 on snapchat to lose all of it, 90%. but you could get 3x to 5x over the next few years. for facebook to be a 3x to 5x here, they would have a pull a rabbit out of the hat. higher risk, higher reward sdpl thanks for helping set us up as we await that first trade. henry blodget, nice to see you of business insider and rob sanderson, our thanks to you as well. and we should disclose here amid our continuing coverage that nbc universal and snap do have a business relationship like so many other media companies. we are continuing to monitor this progress of snap inc.'s ipo taking place behind us here at the nyse. as we head to quick break, take a look at the overall market. the dow for the most part is holding its gains, that more

than 300 point rally we saw yesterday, it's down about 11 points. s&p down 6, and nasdaq down the most. we will count you down to the first trade of snap inc. when we come right back. queson you ask,n important but one i think with a simple answer. we have this nd to peek over our neighbor'fence.ortant anonce we do, we see wonder waitin every step y y take, narrows the inuence of narrow minds. brges continents anbrings this rld one step closer. so, the question you asked me. what is the key? it's you. everything in one place, so you can travel the world better.

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we approach innovation differently at snap. it's not a throw things at the wall and see what sticks kind of company. we try to take time to really listen to what our community wants from our products. and then build those things. >> as we await the first trade of snap inc. right behind us here at the big board, let's get a quick update here from the news from sue herera. sue. >> sara, good morning. i'm sue herera. here's what's happening at this hour. seven baltimore police officers arrested on racketeering charges for robbing and extorting up to $200,000 from their victims. the officers are all members of a gun crime investigation unit. they also stole guns and drugs allegedly. they face a maximum of 20 years in prison for each count. tesla launching a contest for homemade commercials. ceo elon musk making the announcement on twitter in

response to a fifth grader who sent him a letter with that suggestion. american express trying to fend off competition from citi and j.p. morgan for the biggest spenders. the company is expanding benefits for its platinum card including a $200 credit for uber riders. but the added perks raises the annual account fee to $550 from $450. and giant pandas back in the spotlight today at tokyo's zoo. keepers closed the exhibit for a week for mating season and hopes are high that one of the two pandas will give birth. that's the news update this hour. i'll send it back down to you guys. carl. >> thank you very much, sue. we are continuing to watch the indications on snap $22 to $24 of course as you know by now priced at $17. above that range of $14 to $16. and, david, all the anecdotal investigation that at least bob pisani is getting is there are still buyers of size at the higher levels of the range.

>> well, given the lack of stock available initially and the over subscription of 12 times we've told you about, that's not perhaps a surprise. funny, many of the underwriters are here on the floor watching, the bankers who helped to take this company public, and they're a little concerned. they don't want this thing to run too much because of course then there's more of the risk that you've got a significant fall in the days that follow, which is not necessarily good for them or the psychology surrounding the stock. so we'll see. anything above $24, i think, and some of them will sort of say, whoa, that may be a bit higher than we had liked and then you start to question whether $17 was the right price, did they leave some money on the table even though it was such a small deliver -- sliver. >> remember, both facebook had different views, facebook had the trading glitch that was a disaster and bob reminded us earlier closed up less than 1%

on its opening day. took about a year actually for facebook to shoot higher after it turned around the business. twitter on the other hand and you guys were here front row seat for this one surging 73% in its debut and then started tumbling over the years. so divergent paths drawing comparisons to those as well. some are even looking at gopro too as the company pitches itself as a camera company. but we will see. there's a lot of indications that there's a lot of excitement to get in on the next hot thing, first tech ipo of the year. >> sure. >> and then the longer term it's sort of a question of whether these investors will stay onboard. >> as you recall by the way twitter that had a 70% plus first day, an open at $24 would be a 41% gain. still hefty. julia boorstin knows this company better than just about anybody. let's get to her out west. hey, julia. >> hey, carl, that's right. snap's ipo is the biggest ever for a los angeles based company and it's expected to be a game changer for the los angeles start-up scene. now, snap's headquarters are all

around me, all of these different buildings. you'd never guess it from this hodgepodge of unmarked buildings. employees are spread throughout the beach side venice with real estate prices more expensive here in venice per square foot than they are in san francisco. now, snap's headquarters are so unusual and diffuse that the company actually pointed to the layout as a risk factor in its s-1 but also noted outside of silicon valley there's less competition for local talent. but some of snap's neighbors have not been happy with the company's gentry fiing effect on venice, known for its bohemian artsy feel dating back to the '60s. protest scheduled for here later this morning. organizers complaining about snap employees increasing traffic and competition for already sparse parking spots, driving up local rents and bringing in outside security guards to patrol these streets. snap responding, quote, we don't just have our headquarters here. many of us also call venice home. we've been very grateful to be a part of this creative community over the last four years and

we've worked closely with local schools and nonprofits to be a good neighbor. no one could have anticipated how quickly we've grown. we've already begun focusing our future growth outside of venice. now, snap is trying to work with its neighbors by doing things like shuttling employees in from a parking lot that is off site. we'll start to see those employee shuttles shortly while ceo evan spiegel, and cto, bobby murphy, were in new york today to ring that opening bell. back to you. >> julia, i had a question for you about ad growth. clearly that's the business model here. you cover facebook and you've seen how they've mastered this. how granular is the information, for the ad dollars between facebook, alphabet and snap? where does snap fit in there? >> well, look, the digital ad market is growing very quickly. and right now it's really a duopoly. it's facebook and it's google. those are the two companies that really dominate that digital ad market.

but snapchat while small, we have to remember only had about $400 million in revenue last year is growing fast and also very appealing to advertisers because it has this stronghold on those younger users. so if you're 13 to 24, you're going to be visiting the app 20 times a day almost, and you're going to be spending about 30 minutes a day with that snap app. so that's really compelling to advertisers. and advertisers also love the fact that snap's introducing different ad formats. there are ads between stories and the discover section. and there are also these ads that no one else has really mastered like these filters that people can put over their faces. augmented reality. it's really very different when you're a brand and you can put your brand onto someone's face, have them interact with it and then send that picture of themselves with a brand to their friends. that's a pretty compelling advertising proposition. snap at the same time still has a lot of room to go and to grow when it comes to different ad formats and opening up their advertising platform so more

brands can come in and use it and customize it for themselves. >> yeah, although with spiegel on the cover of "time" now using the dog lens, some viewers saying the dog lens is officially over. we'll have to find out. >> there's a new cat one that's really good. >> julia, thanks. >> there will be new lenses, new augmented reality lenses. >> they're constantly making new ones. as we await the market debut on the floor, let's bring in co-founder executive chairman of four square, snap uses four square for intelligence data to power their geofilters. thanks to have you back in. >> thanks for having me on the show. >> what do you think of the company in large? >> i'm a fan of the product, fan of the friends, i'm a fan of the vision, like becoming the new camera company. i'm interested to see how that plays out the next couple years or so and how foursquare can help them in that. it's an interesting story. >> when people hear that, what should they take it? what does it mean to be a camera

company versus a tech company? >> well, i mean, it's kind of the same just like a more specific application of it. but when you think about what they're doing with the spectacles and wearable computing, i'm a big fan of wearable computing, i'm very bullish on that space. google glass wasn't able to figure it out, but snap's spectacles were great. they positioned it as a toy at a low price point. got a lot of people wearing it. a lot of people on the floor wearing it. that's how you push some of this technology forward. >> what exactly is your involvement? when you say you're helping them with the location services, does that mean the filters you can swipe which tells you where you are in a picture? >> exactly. a lot of times you'll swipe over and see a filter designed around a specific coffee shop or being at the gym in general, a lot of that data is coming from foursquare. foursquare is helping power a ton of companies do this. snapchat and twitter and pinterest and uber and apple. it's a real pleasure and privilege to work with them. >> i'm wondering based on that conversation we just had with julia about how that entices advertisers, the whole location

filter. what sort of appeal is there? >> say you're an independent coffee shop or big chain of companies dunkin donuts or starbucks, why not have your logo on every photo that's taken at one of your locations? now, like the social media managers in the past would have to go and draw circles around every single starbucks or every single coffee shop in the country, foursquare knows about hundreds of millions of places around the world so we can help leverage that data so snapchat and other companies -- >> it is amazing to be in a neighborhood you've never been in and open the app and all of a sudden all these options and these creative artistic lenses and if i woulders. >> yeah. they've done a great job curing that experience. >> why are you positive on wearables? you mentioned that. obviously google glass did not really succeed. why do you think there's a future for these kinds of technology? >> because this future where we walk around all looking at our phones like this i don't think is the future.

like it's going to be distributed through a number of different devices, whether it's things on your wrist or things in front of your face, a lot of the stuff we think about at foursquare, we're not making the hardware, right? but what's going to happen with alexa? are you going to wear alexa on your arm? amazon alexa? how are you going to speak to google now and okay google. in order for those things to be smart you have to carry them with you probably in some form and have to learn about the places you've been and things you do during the day. that's why we think about foursquare playing a big role in that ecosystem too. >> i was just going to say you always have to think about though how the ads fit in and make sure they don't impact the user experience. that there aren't too many of them. that they don't obstruct from what you're trying to do when it comes to user growth, something that mark zuckerberg has always been careful. snap has a challenge here too. >> same thing with twitter, right? you've got a full data, you can't put too many ads, i think

it will be a challenge for snapchat to figure that out too. >> i want to talk to you about evan spiegel, this is some sound of networks found of him at a commencement speech a couple years ago. >> so i'm asked one question most often, why didn't you sell your business? it doesn't even make money. it's a fad. you could be on a boat right now. everybody loves boats. what is wrong with you? >> now his own stake is worth more than that reported offer was for the whole company. what do you make of evan? >> well, i mean, that's like a typical founder. that's the attitude i've had a lot of times when people have offered to buy foursquare. we have this big idea, we have this big mission. we want to go out and do it because we think we're going to do it better than anyone else and i think evan sees the world through that lens. >> does that make him an equally strong executer of the strategy or a big dreamer? >> no, i think that's part of what the founder and ceo does.

at some point you build a strong management team around you, i've seen some of those folks on the floor today, i'm friends with some of those folks and he started to build a great team. i think that's how you take what starts as a start-up grows into something big and grows into a profitable company. >> that brings up the question of timing. why now? the decision to go public at this early stage in snap's lifestyle there isn't a long history of monetization when it comes to revenue growth for investors to stud sdpi e y. >> to be honest i haven't dug into the financial data. i respect what they've done from product perspective and building a team and company, but i don't have a strong opinion on that. >> always great to see you. >> yeah. do we get to talk about foursquare technology? >> yeah, everything leads back to foursquare. >> you're an active snapper too. >> i am. yeah. >> as we go to break pretty steady action after that monster rally yesterday. dow's down 11. pretty much in the range it's been in all day.

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are high yield investors making a big mistake? we talk to bernstein's fixed income guru. find out what he said on tradingnation.cnbc.com. more "squawk on the street" coming up.

markets in focus after that record setting day yesterday. let's get to steve liesman back at hq with a special guest. ha hey, steve. >> yeah, we have federal reserve governor jay powell. thanks for joining us jay. >> great to be here, steve. >> the talk of the markets right now is the level of the market. we zoomed through 20,000 and we got to 21,000 before we even know if 20,000 was the right level. how do you as a policymaker look at these levels and this rise in the stock market since the election? >> yeah, so you're right. the stock market has been quite strong since the election.

and of course won't be a surprise to you that i don't have a position for you today on a level in the market, but what really matters from our standpoint is the extent to which, you know, the animal spirits get into the real economy. so probably the stock market has to do with expectations of supportive fiscal policy and stronger confidence by households and businesses. and those things take some time to get into the real economy, show up in spending and investment, that kind of thing. that's what we're looking for. >> you used the phrase in early january that you didn't think asset prices were very good fed phrase here, not broadly unsustainable. that was 5% ago. you're laughing at yourself here. i mean, i guess that's what you guys do, but was not broadly sustainable. do you think this level at 5% higher it's not broadly unsustainable? >> clearly i've been working at the fed too long. no, i think that's probably still right. asset prices are -- they're going to do what they're going to do. they've certainly had quite a run here since the election. i think from our standpoint what more important is things we look

at is build up of credit in the economy and growth of leverage in the economy. you don't secret aggregates or levels going up, we don't have broad stability concerns. and there are different assets priced different ways. >> so these are not valuations that cause you concern about systemic risk? >> i would say not. >> let's move on. yesterday we got some economic data that caused several forecasters to lower their forecast for q-1 gdp down below 2%. what's your sense of the momentum in the economy right now? >> i think the momentum in the economy is solid. we've had 2% growth. at the beginning of this year i was looking at 2% growth and continued progress in the labor market inflation continuing to get back up to 2% and i see us as broadly on that path. you really can't be too attentive to short-term movements in gdp. we don't measure gdp particularly well in realtime, so you have to look at it in terms of quarters and halves and full years and i think we're where we need to be. >> do you see the united states getting help from abroad?

the global economies growing as well. >> yes, for the last few years we've really had significant global risks and weak growth abroad. and i think that the risk have diminished and actually, you know, growth in europe is a little stronger, inflation's a little higher, same is true in japan. so we see a slightly brighter picture abroad. and i think that will help us. >> speaking of inflation, we got some data yesterday. the two measures the fed follows most closely, are they core headline pce, 1.9% on the headline, 1.7 on the core. are you ready to declare victory? are you at your goal here? >> we're getting close to our goal. we've been close. the goal of course is 2%. and we see that as a symmetrical goal. meaning we'd be equally disturbed to see inflation above or below it. i think that if we keep sort of on this path we'll get up to 2%. we're certainly getting very close. >> what about the unemployment rate at 4.8? is that the sustainable level of unemployment? is there more slack in the labor market?

>> that's a pretty good centrist estimate of what the sustainable level of unemployment is. there's tremendous uncertainty around that though. it's not something you can directly observe. there are probably pockets of slack existing in things like people working part time for economic reasons. there are people hanging around the edges of the labor market who are not counted as unemployed, but who could come back in in a stronger market. so, i think you look at the behavior of wages, really, to tell you how tight the labor market is. wages are ticking up, but not a lot. it's a gradual thing. it suggests to me there's probably still some slack. >> when you put that all together, how close you are to your inflation mandate and your unemployment mandate, how does that instruct you for the upcoming march meeting in terms of raising rates? >> i think we're as close to our mandates as we've been in a very long time. as i said last week, i think a rate increase at the march meeting is on the table for discussion, and the reason i think that is the economy has behaved pretty much as we expected. in the meantime, the balance of risks, which has been to the down side in recent years, has

really shifted to being even, and perhaps lifted to the up side because of the possibility and the likelihood of some fiscal action. so, you put all that together, and i think the case for a rate increase in march has come together, and i do think it's on the table for discussion. >> there's two questions out there for the market. one is when that next rate hike comes, and sometime in that march-to-june period, i mean, already we're at 70% of the probabilities for march, but another is how many. even if you went early in march, would you still think 3% seems about right this year or should we start thinking about a fourth rate hike this year? >> it all does depend on the path of the economy and no one is particularly successful at predicting the economy more than a few months out, but i wrote down three rate increases in the september summary of economic projections. that still feels about right to me. that's a gradual path by any historic measure, and it does feel to me that's about right, but it is really going to depend on what the economy does. could be higher, could be lower. >> i know we get into hypotheticals here, but it is important for the market to know

about your $4 trillion balance sheet. if you complete those three rate hikes, do you foresee possibly at the end of that or sometime during that reducing the size of the balance sheet? >> so, the way i look at it is the interest rate -- changing interest rates is the principal tool by which we affect financial market conditions, and that's our monetary policy tool, and i would like to use that tool. the balance sheet tool was deployed when we were at the zero lower bound during the height of the crisis and thereafter, and that's for extraordinary circumstances. so i'd really like to see us get well above zero, well into the normalization process before we start shrinking the balance sheet, because shrinking the balance sheet is a way of removing accommodation. so i'd like to be well away from that, and i would say that's going to take a little bit of time in my thinking. and then when we do go to shrinking the balance sheet, we can do it in a very predictable, almost automatic way. >> does that seem like it's a task for this year, reducing the balance sheet? >> you know, we're just going into a series of discussions about that, and i'm going to,

you know, keep an open mind from my discussions with my colleagues, but that's how i've been thinking about it. >> you talked about the difficulty of predicting the economy in the future. one of the wild cards is the fiscal stimulus that could be coming from washington. what do you expect from there, and has it already caused you to change your growth outlook? >> so, we don't know the scope of it. we don't know the timing of it. we don't know the composition of it. i don't know any of those things and i don't think anyone does. we haven't seen proposals yet, haven't seen congress draft legislation or seen negotiation, so it's hard to be specific. as far as i can get in thinking about this is there will likely be something, and it will be something that is supportive of growth in the near term. so, i have not directly incorporated that into my forecast, but i do think of it as giving me more confidence that the baseline forecast will be reached because it does kind of tilt the growth risk to the up side a little bit. >> are you also tilted by higher stock prices as well as higher confidence levels? does that factor into your forecast and make you think

there could be more growth coming because of those two factors? >> those two things are important but they have to be sustained to affect economic behavior, so i would hope they will be sustained and we'll see animal spirits bringing people into, you know, spending and investing. >> president trump has several appointments he could make right now. several people are leaving the board. what changes do you expect? do you have concerns of the kind of changes that could be coming from the new president? >> i have no concerns. i'm looking forward to meeting new colleagues. and you know, i look forward to meeting people. i'm eager that there be a vice chair for supervision as soon as possible so i can begin to work with that person. >> and you're going to stick around? >> i have every intention of sticking around. i really like the work a lot. >> thank you for joining us, fed governor jay powell. >> good to be with you, steve. >> back to you guys. >> steve, thank you very much. good stuff, making some news with powell there back at headquarters. in the meantime, bob is at the snap post. new indication here on pricing as we await the open, bob. >> that's right, $23.50, sara, to $24.50. price was $17. we initially had indications $21

to $23, then it was up by a dollar to $22 20 $24, now narrowing down to $23.50 to $24.50. the process as far as an ipo, and i've seen a lot of them, very stable, bidding has been very consistent. sometimes with the ipos, you get a lot of wild price swings as bidders come in and out, numbers go all over the place. this is not the case. very, very stable here. and frankly, it's been coalitioned around that $23 to $24 range for more than 40 minutes or so. when is it going to open? i'm sticking with my original predictions, 11:15-11:30 looks like the most likely time, but again, it's a dynamic process. people keep putting in bids and offers at any time and it could change at any moment. i don't know if you're doing any back of the envelope calculations, sara, but i'm looking at -- let's pick a midpoint -- $24 would put snap at about $33.5 to $40 billion market capitalization. yesterday we were talking about $22, maybe $23 billion, so

talking about a huge difference in market capitalization just with the demand we've got right now. i'll be on top of this until we open. i'll be right here. guys, back to you. >> hey, bob, it's david. i hear from the underwriters, at least goldman sachs, they're getting very close. are we minutes away, do you think? >> well, i'm standing here right next to everybody, and nobody is waving their arms and said we're getting close yet. and that's an indication. that's what i love about this, david, it's a very human process. people will be waving, yelling, we're getting closer! nobody's doing that. it's very calm. this whole process has been very calm, very stable all throughout, and i'm sticking to another 15, 20 minutes, most likely. >> oh, okay. all right. >> i was just going to mention that at these indications, we're talking about more than a 40% rise that you calculated here at the open, carl. bob, how does that stack up for recent ipos? i know there haven't been many of them. it's been a sleepy year and last year as well. >> heavens, this is the biggest thing since alibaba, far and

away. and we certainly need something. you might ask yourself the simple question, why? why has it gone from $17 -- $14 to $16 the indication, and suddenly we're talking about maybe opening at $24. three things are happening. number one, the stock market's at a record high. we all know that's necessary but not sufficient. we need the markets to do well for the ipo market to do well, but other things need to happen as well. the second thing, of course, is we've had a dearth of ipos. there is huge demand for high-quality ipos that has not been met. we had a horrible 2016. five ipos in february. that's awful! so, there's huge pent-up demand. and the final thing is, restrict the supply. they're only floating 14% of the company, sara. now, remember, this is not uncommon with tech companies. the game here is let's flow 10% to 14%, constrict the supply, and of course, you get price moves on the up side. so, you put those three things together -- the stock market at new highs, a dearth of quality ipo offerings, and restricting the supply, and this is what you get right now.

so, it's getting close, and i think people, certainly the initial investors will be very happy with the open. >> bob, thank you. keep us posted from post 8, where we are awaiting that opening trade. you've talked to, david, some people who have been in line for this. bull arguments and bear arguments. what are you hearing? >> yeah. i mean, the bull argument is that they really like the proposition to advertisers in terms of a tight-knit group of your friends who you're engaging with constantly and in a deep way, that the advertising is not something you necessarily pass over because it's more creative than is typical, and therefore, you actually have engagement with it, and that it's growing quickly. the other side, as you know, and we've discussed, of course, with blodge blodgettand others, daily user growth has started to decline. it's still significant, but started to dellin, perhaps not coincidentally at the time instagram came up with a competing process. >> it's also at a high multiple. especially looking around facebook, it's hard to get a

picture of this because it's not a profitable company. >> no. >> they had what, a $500 million loss last year. it's about 20 times e-marketers estimate for 2017 ad sales, which puts it in the high ranks, and that's at the $17 price. >> yeah, coming to market, some are saying about double what fb did when it came to market. people are starting to make comparisons on a would-be market cap if you looked at $34 billion, as has been pointed out, you'd be somewhere in the range of some video game-makers, perhaps, definitely two times twitter's market cap, which remains around $11 or $12 billion. >> we're coming off what, a little over $400 billion in sales last year, obviously growing quickly, but we're talking now about a $34 billion market value. let's assume at $24. those are some pretty big numbers, even going as much as $1 billion. you're talking about quite a multiple to sales. but growth is something investors have been starved for in this marketplace, as we had

mentioned many times the number of initial public offerings of high-growth companies has not been large for quite some time. they made up the book of largely long-only investors who were looking for this kind of name with this kind of a growth rate, at least. and so, there's been a great deal of demand. >> and i know you talked to evan spiegel about what the company is, this whole question of what it means to be a camera company. back in the day -- actually, i went back to the prospectus. it's probably one of the only ideal filings where they did use that word sexting in the prospectus. the company actually said when we were getting started, many people didn't understand what we were. they thought it was just for sexting, even though we knew we were being used for so much more. and boy, have they evolved and really captured the younger audience. >> they really did evolve, and quite quickly. i know it was only four years ago that we were on the floor with him doing an interview where i was bumbling my way through even the word sexting. >> yes. >> trying to