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 understand it.

but that was seen as what the key proposition was for people, disappearing pictures pp, yeah. it is 11:00 a.m. on the east coast, 8:00 a.m. out west, obviously. dow's down 28 points. the story of the morning remains the ipo of snap. biggest tech ipo on the u.s. exchange in almost three years. pricing well above the range. and obviously, it's going to open above that, as we are now looking at potential market caps in the range of $33, $34 billion. sara eisen, david faber and myself at post 9 all morning long. joining us at the desk, roger mcnamee, and eric capoue. exciting day. >> great day! >> let's get your take on what appears to be pretty bullish action in the stock. what do you think people are responding to? >> the stock was way oversubscribed yesterday at the ipo. i think there's a lot of excitement about snap. i think snap is fun, clearly has a very engaged audience, and

there's a new player that we now have a duopoly, facebook, google. i think they'll continue to do well, but now there's a new player on the scene. >> does it bust that open, roger? >> i think it's -- let's face it, the market has done way better than institutional investors this year. hedge funds are lagging. mutual funds are lagging. they need big ipos to get back into the game. snap is coming along at exactly the right time with exactly the right scale of deal. i will tell you, i think it's grossly overheated. you know, google traded under its ipo price. facebook traded under its ipo price. in all probability, snap will trade under its ipo price. probably won't take all that long to get back down there. i think cool heads will be more successful. it will be a great trade, you know? we'll see how long it lasts, maybe -- >> what's in the pipeline in terms of ipos? you say we need to see more of them, if this is a success. >> well, i think investors and bankers would love to see more ipos.

i think the question is can they put together the kind of marketing sizzle that snap put together? let's face it these guys were magicians. they made more out of a very small success than the vast majority of companies can do. and i mean, i really tip my hat to them. it's been a brilliant marketing campaign and they've been rewarded with amazing timing and they're going to have a terrific ipo. >> what do you make of -- it's been said about, at least about evan, if not the company, that they zig when others are zagging? that's held them in pretty good stead so far? >> it does. i think snap's been incredibly innovative, and the fact that they call themselves the camera company by itself is kind of, what does that mean? it means they want to capture all the images and all the videos, and that's what this is all about. they seem to have made a success of the glasses where google hasn't been able to do much with their first generation. so, there's a lot of innovation. the fact that they're in l.a., they're in venice. they don't have a headquarters. so, they behave in a different manner than the people in

silicon valley. >> they're very brave. i mean, turning down the $4 billion offer from facebook was at the time it seemed insane, and yet, they were absolutely right, and i really, really tip my hat to them. incredibly brave, incredibly clever, but let's face it, the revenues of the business are small, the profits are negative -- in fact, the losses are huge -- and at the end of the day, eventually, people are going to look at the fundamentals, and it's going to be very hard for the fundamentals to catch up to the valuation we're talking about today. >> you mentioned the duopoly. what's to prevent, as many people argue they will, either facebook or google from just consuming whatever space in the middle snap tries to carve out? >> i don't think google is even trying, but facebook through instagram and mainly it's trying. but look, once you have a network effect -- and snap is a network. it's a network of younger people who are having fun, who are sharing more content than, you know, maybe arguably than facebook. it's tough to pry those people

away from the networks. i think instagram will continue to copy what snap is doing, but it won't necessarily take the core of the audience away. >> well, and they have a chance, eric, i think, to limit the opportunity. i agree with eric completely, it's going to be very hard to displace snap, and i frankly think that discovering some of the other things they've done are truly brilliant. but again, let's differentiate the stock from the business. i think the management and the company, incredibly cool. stock, you know, shall we say fully priced? >> sure. >> and it's going to be a heck of a trade today. what happens after today is anybody's guess. and you know -- >> don't -- i want you two to stay right here. speaking of trades, let's get to bob pisani and see what's the latest we know. bob? >> indications have not changed, $23.50 to $24.50. so, remember this process. they priced it last night at $17. early indications $21 to $23. they upped that quickly to $22 to $24, but in the last hour, frankly, it's been very stable.

this is one of the more stable ipos than some of the other ones like xpo that's moved around a lot. it's been coalescing around the $23 range. so, $23.50 to $24.50 is where we're at. i want to show you the process. this is the runner of goldman operations here. goldman is what we call the stabilizer. in a sense, they're the company that assembles the institutional book. shawn is sitting here. of course, he's in touch with the goldman desk that's assembling the book. you see patty murphy over there on the far end who is talking to traders on the floor and also helping assembling the book. and again, i emphasize this so many times, it's a beautiful mix of human beings that are sitting here looking at massive orders to buy and to sell stock and computerized programs that are helping them understand exactly where the market should be. so, you've got guys that were standing there with pads in their hands.

they're really glorified ipads with orders, talking to their trading desk on the floor, yelling back and forth, saying, okay, i want 3 million at $22. okay, the price is $23.50? now i only want 2 million, or i want out. i'm in. that's why it takes so long. it's a giant poker game, but people can remove chips at the same time as they put in chips. and at the end of game, when the final pricing is, everybody gets one price and essentially everybody's chips are in at the exact same price. so, you see patty's standing there, carell is standing there as well, glen carell. i can't emphasize enough, this team has cornered a massive part of the overall ipo market. i'd love to gem thret them over and explain how they got companies like this, a snap, alibaba, twitter, all the big ones these guys pull in, but it's a combination of being on top of the trading and being able to explain to the

companies. what a company like these really want, when i've talked to these guys, is we want to be able to call down on the floor, a snap, for example, the head of investor relations and say what's going on with our stock today? why is it moving around so crazy like that? and their job is to sit here with very sophisticated analytical tools and be able to explain to either the ceo who's calling up or investor relations, here's what's going on, here's who the buyers anz sellers have been, here's the exchange where it's been trading heavily and here's what we think is going on. is there a big seller, an individual seller, massive sellers? give us a sense of color. and in a sense, that's what they're paying for to list at the new york stock exchange, to have access to that kind of information. gts, which happens to run this particular operation, has some very sophisticated trading tools that are available to them as well. so, this is a big factor in trying to decide who are you going to, not just what kind of exchange you're going to but even what kind of company -- there are several companies here on the floor -- that actually

provide the trading opportunities that are available, gps being this particular one. let me just toss over here and get patty. patty, anywhere close, pat? anywhere -- they're all staring intently. this is a big -- pat, are we getting close, pat? okay, we're looking like five to ten minutes. that's what i'm hearing now. now, normally, again, you'll start seeing them go a little bit crazy when we get a few minutes before. they'll start yelling, because they've got to go to the crowd, which is standing out there, and say, guys, this is it. tell your people, no more messing around, we want final bids and offers because we're going to close the book soon, and people start waving and they get people franticly calling their offices, saying, this is it. anything else? anything else? and then they're going to try to close the book. you'll hear the final phrase, the book is closed, and then the market, the stock will open ten seconds later. so, again, it's a very human process. there's a real actual auction

that goes on. there's a lot of computers involved, but at heart, there's a lot of people. so, we're talking now five to ten minutes. let's just stay here. i'll try to get a little closer, see if the indications have changed, but there's no -- we're not seeing anything, right? $23.50 to $24.50 are the indications right now. getting very, very close. and remember, guys, we're talking about a market cap of $33 to $34 billion, assuming we open somewhere near $24. back to you. >> bob, watching you do it every time, it seems like a new experience. we'll come back to you in a few moments. mike santoli is joining us on the floor, but roger, i want to get a point you made about the retail aspect? >> typically in a tech ipo, you'll have 80% of the allocations to institutions and about 15% to retail. my understanding is that the allocation here was essentially all to institutions. i think that the way the marketing worked, the assumption was that retail knew enough about the company already and was excited enough about it that

you could deny them access to the ipo and that they would make the aftermarket. now, we'll see whether that works or doesn't work. it seems to me that from a marketing point of view, that was a risky strategy, and we'll see how it goes, because there are 200 million shares. it's going to trade a lot of -- >> you seem open to buying some at a lower price, if and when that -- >> i think snap is an amazing company. in this context, eric and i completely agree about it. i'm just talking about a stock. and you know, as somebody who's done this for a long time, i mean, we're in the new york stock exchange. normally, you could throw a hand grenade on the floor here and not hurt anybody. >> easy. >> and today, i mean, it's piled up just like it's 1999 all over again. >> it's '99 all over again, i know. >> and it's kind of fun, right? there's a tremendous energy. but at the same time, let's remember that that energy is not actually correlated to the underlying fundamentals of the company. and $32, $33 billion, that's real money. >> it's a high valuation, mike.

just want your thoughts as we await the opening trade. what will you be looking for? >> it's a high valuation. honestly, i think as a process, it's really hard to quibble with the rigor of it, are wl the orderliness of it in terms of how they raise the offering range and priced it slightly above. all of these things seem to have gone into place. also, it seems like the kind of initial opening pop, if this is the range we're going to see the stock trade in, that you're more or less looking for, showing enough enthusiasm but also not something that seemed like kind of a chaotic grab for a much higher price. so, thaul works. i think one of the interesting things here is certainly versus facebook and even to a lesser degree twitter, is not just what's it worth, but what's it worth based on what, right in terms of the stickiness of the audience. it's not necessarily as far as they're concerned about user growth. so, that's why i think there is a wide range of potential outcomes that all these investors are looking at. and yes, i think there's some hype behind it. we're talking about a lot of attention on one deal. on the other hand, the skeptical case on snap as a company has been very much out there, and in fact, i think if anything, it's

almost the default opinion of a lot of people who hear about it. >> roger, you have to have imagined viewers heard what you just said and want to know, where would roger place a bid? >> you know, that's a great question. i haven't actually thought about that question because it was pretty obvious that they weren't interested in my input. and so, i mean, realistically, the company still has greater losses than it has revenues. and so, as a consequence, you know, the price to me is -- it's not even in the same time zone that we're talking -- >> all right, but here, i mean, 160 million daily users. they average 18 times a day opening the app. >> right. >> they spend 30 minutes on it. they're growing quickly. those aren't bad numbers. >> no, those are outstanding, but you have to turn them into revenue. >> i understand. >> they've only raised revenues for two years. >> exactly. >> revenues are going to go zooming at that company because the publicity around it. i think the marketers have all

been gearing up. snap, there's a lot of engagement on snap. they do their advertising differently than facebook does it, so it's more like advertising. i think it's going to be very successful. >> i think we need to be a little bit more cautious. i think the advertising is there so far as out of the experimental budgets of the agencies, and there has historically been a great fear of advertisers to tie their brands to unknown authors. that is to say, if you can't be sure of what the content is -- i mean, if you're proctor and gamble, you do not want your ad tied to a sexting video. >> but that's always been the case regarding placement in the context of a show. >> no, no, that's exactly correct, which is why i think, to eric's point, i think the revenues grow very rapidly, but i don't think they grow to the moon. i think they are going to have to create products that can support advertising that large brands want to place. >> eric, i have a question for you, because you're talking a lot about the competitive advantage here for snapchat. what can snap offer to

advertisers that instagram stories cannot? >> i think the fact that they treat advertising and media content in a whole separate section called discover is a plus. the advertisers know exactly what they're getting. the data -- this is an area where snap needs to improve. their data capabilities are still very primitive. but the initial data shows that people really engage and they engage with the advertising. it's not as it is on facebook where you don't really know what's going to happen. >> you mentioned content. it's interesting. have they been marketing themselves at all as a content player where they would be ultimately hoping to get some of the tv ad budget dollars, which is sort of the holy grail? a lot of money allocated there. >> well, they have -- we have a number of media companies that run programs on snap or snapchat. and you know, they're looking for more original content, they're looking for lengthier content. all of this is video-based, by the way. so, yes, the answer is -- and

the agencies have less and less to do with any of this because the agencies, the creative agencies are really not a player anymore. they're not a player on facebook. they're not a player on snapchat. >> but to roger's point, is there a ceiling? i mean, i know why kfc has a lens, a sponsored lens, but is cadillac going to have a lens? is morgan stanley going to have a lens? other big buyers of ad content? >> absolutely. they need to bread themselves with younger people -- >> even though the purchase might not happen for years? >> absolutely. cadillac in fact moved their monthly people to soho to be more with the young people. >> time will tell how big that opportunity is. i mean, i'm willing to accept that notion exactly, but i don't think the dollars behind it are going to be measured in the tens of billions. i think they're going to be measured in the tens of millions and ad to low billions. on that basis, the company is going to have a great run, but exactly what that's worth, the market's going to have to decide. >> i want to show you -- you know everybody who comes in to

ring the bell gets to sign the log at the nyse. this is evan spiegel's signature. [ laughter ] to the degree -- i mean, that is a signature right there. >> what is that, a sticker? >> yeah, it's the rainbow vomit -- >> the rainbow vomit sticker, yes, in the book at the nyse, which he signed before the opening bell, i would assume. thoughts on evan as a co-founder, as a visionary, some say. eric schmidt, others have had extremely nice things to say about him, eric. >> i don't know evan personally, but from what i can see, he is incredibly creative, he's very innovative, and he knows what he wants. in other words, he's very determined. so, i think he's going to be a player for years to come. >> which also raises, roger, the corporate governance issues. we talked about the sort of unusual nature -- no voting shares are being offered in this ipo. does that raise any red flags for you? >> i don't think it raises any

more red flags than we already have based on valuation. so, i look at this, and you know, to eric's point, evan spiegel is 26 years old, and look what he has accomplished already, you know? obviously, we don't know how far he can go. my presumption is a lot further than this. sara, it really bothers me when people have no voting. it really bothers me. now, does it bother me as much as the stock price? no, because the stock price stops me from investing way before the no voting. i think tech companies make a terrible mistake trying to create their own rules and trying to make themselves separate from the core economy, whether it's staying private for much longer and not having voting. those things -- >> so, you're not a buyer of the notion that it insolates them from short-termism, from the mania of the street? >> i think it insolates them in a way that causes them to do as many dumb things as smart things. so you know, you look at there and -- >> like what, acquisitions? >> no, i'm saying look at some

of these unicorns which also have had very, very limited voting on the part of their investors. i mean, many of them have done incredibly stupid things. and you know, we've had therrienos -- >> that's not a public company, come on. $24 i believe is going to be the opening price. we're just about there, i'm told. >> we heard a cheer. >> we heard a cheer. >> bob pisani, what do you know? >> the important thing here is they're pairing off, meaning the bids and offers are starting to pair off. it's coalescing around $24. that doesn't necessarily mean the price is going to be $24. anything could happen. it's a completely dynamic process. so, how are we going? are we open? >> opens at $24! >> $24. snapchat opens at $24. pricing at $17, opening at $24. tom farley has just walked in. another big day for you. finally, a big-name ipo and a

unicorn going public. >> yeah, bob. we took a while to open the stock because we wanted to get it right. as you saw, there was a lot of iterating on the price, opening at $24, trading very smoothly. that's exactly what you want to see in an ipo. that's the kind of process you get down here on the floor. >> it was a remarkably smooth process. normally, we've seen bigger price fluctuations in the past, and yet, this time, after the initial indication of $21 to $23, went to $22 to $24 and essentially stayed in that range. stable demand in the process. >> what you did see change is the size of the initial crept up and up. that's the good thing about the process, you get a big first trade that signals to the world that we've discovered a good price. >> and the combination, human, and of course, computer intelligence. >> exactly. >> just watching the people, you could tell they got more excited toward the close. while we've got you in here, we got a human indication that things are going to open, not just a computer indication.

>> exactly right. and a lot of the humans are on the phone talking to their investment managers upstairs, downstairs. and if you don't have that human interaction, you have a lot less faith in the opening process. >> we talk about why the pop up here, $17, opening at $24. you're talking about a better than 30% pop-up. obviously, markets' new highs is a factor as well. but we talked about this earlier, hasn't been a high-demand ipo for a while. supply is an issue as well. >> yeah. this was -- obviously, their story was well received. it's as simple as that. they put on their prospectus, the front of their prospectus. they wanted to raise capital at a price of $14 to $16 a share, priced last night at $17 and traded at $24. people like the story, simple as that. >> and just to put it into perspective, $24 price now, tom, $33.5 billion market capitalization. that's a marriott. a target is essentially a $33 billion market cap. >> yeah. >> already they're not in the s&p, but you're in the top

one-third of the s&p 500 already. this is a big, big ipo. >> yeah, it's a big tech player, another big tech player here at the stock exchange. i'll just point out, bob, the stock has traded up very smoothly, $24, it's now at about $24.80, so we're in a really good spot. away we go. >> guide us in the next few weeks. is this going to finally -- you and i have been doing this dance for six months about is the ipo market going to finally open up. are you going to go out on a limb and tell us yes? and what's going on from here? what's next? >> i won't predict, but i'll tell you, the facts on the ground is that we have a lot of companies planning ipos in the coming weeks and months. so, the answer's yes based on those facts. things can change. >> anybody you can tell us about? you're saying the calendar will finally open up, that march and april will be big months? >> bob, i don't have your encyclopedia kilopedic memory, so i can never remember who i'm allowed to say publicly and not, so i'll refrain, but those big-name tech companies you've asked me a number of times, those aren't the companies i'm talking about but i can tell you they were watching today closely. >> calendar is big for march and

april? >> big for march and april. >> we'll leave it right there. trading above $24 on snapchat, by any measure is, carl, a successful ipo. back to you. >> bob pisani, thank you for walking us through that as we watch the trades, $25 and change. they just had a discussion, bob and tom, about who's next. you guys got guesses? >> no idea, but what i know is that because hedge funds and mutual funds are lagging the market, the demand for more ipos is definitely going to be there. so, anything that they can dress up well enough to get it on to the floor of the new york stock exchange, they're going to take public. >> we're not going to get the big guys. we're not getting uber or airbnb any time soon. >> i don't know. they don't talk to me, so. >> they're not saying. airbnb would be a great company. it's a profitable company, incredibly successful. >> oh, it'd be enormous. >> but why, roger, has the ipo market been so slow? we've seen this bull market,

dow's up, even after last year a sleepy ipo market. thoughts on that. >> there have been supply issues. one of the issues you've had is there haven't been a lot of, at least in the tech world, not a lot of things that have gone public. for the market, i don't think the big institutions were having the kind of performance problems they've had since the election. i mean, i don't think most of them were expecting the market to go up 15% in such a short period of time, so they got caught too defensively postured and now they've got to catch up. >> mike santoli back at the balcony, i'd love your take on roger's theory about whether this is enough to save some active managers from a period of underperformance. >> i doubt any active manager had a small enough fund and a large enough allocation to where this is going to make or break their year, but i do think, look, there's a definite hunger for new ideas, for access to something that can have a high-velocity move, obviously, like a snap. i do think there's receptivity to this idea. what's interesting, as we were talking about earlier, it's not exactly been the kind of market that's been about young

vc-backed, pie in the sky tech companies, right? i mean, since the election, it's been old economy cyclical. so, snap's right in there in terms of the social media ecosystem and all the rest of it but it's not as if that's been where all the money's flowing to. it's not as if emerging growth stock managers have all the cash to throw around right now. it helps that we're at a new high and it helps that it's been tough to beat this market. i am not sure that alone explains the demand for this one, though. >> the way i see it is that this is not in any of the indexes. so, whatever you get from this, even if you only got ten shares, it's incremental. >> no, actually, guys, i actually agree with that. i thought it was a big case with alibaba, which was never even really going to be in the u.s. indexes or anything else, and so, yes, there is that effect out there. i just don't think there's enough stock to go around to give a lot of managers performance on this one. >> the headline is going to be, eric, that this stock goes public and more than $30 billion

valuation. snap, a company that is not profit yabl but has grown its revenues exponentially. the questions are still going to swirl about whether had t has the fate of a facebook or twitter. can you put it in either of those categories? >> yeah, i think it's got more of a facebook effect than a twitter effect, in part because it's a beloved product. it's a product that users keep going back many, many times a day. there's a lot of content being created. it's fun. it's relatively easy to use, not completely easy to use, but relatively easy to use. twitter is a little bit of the opposite of that. my view on twitter is that they missed, or they're still missing a huge opportunity. they're not really a social network. they're the biggest news a.m.ification platform the world has ever known and they don't want to admit that's their real positioning. and the street pushes them to fight against facebook. that's never going to happen. so, see a lot of twitter, but opposition company. >> i think that facebook went

public with $1 billion of profits already in its income statement. this company doesn't even have -- it has roughly $500 million in total revenues and it has losses larger than that, you know. so, it may become more like facebook. it isn't there today. it has gone public much, much, much, much earlier. >> yes. >> and therefore, the risk is in the hands of those who own the stock. >> roger, eric, i'm glad we had you two here for a fun moment. >> this was fun. >> in american capitalism. >> and for the two of us who have been doing tech for 35 years -- >> yes, i know! >> -- it's like the good old days. i'm sitting here with david faber. >> this is like '98-'99. this is great. >> a time machine. >> invite us again. >> didn't end well. >> roger mcnamee and eric. we're joined by an early snap investor who is part of a series s-round. lubin is the co-founder and partner at gsb. welcome. nice to see you. the stork now trading up about

44%. what's the history of your investment, when you got in, and what's the future of it? >> hey. yeah, so, we got in through the last round last year, about a year ago. we knew one of the people there. our cfo knew him from his previous job, essentially. we had followed snap, previously snapchat, for a long time. and we thought greatly about the company, and so we got a chance to invest into the last round. we are very excited about the opportunity. we think that evan spiegel has the opportunity to become one of the types of steve jobs, mark zuckerberg, bill gates. and it has been so far very impressive what he has done with the product. >> so, you have a lock-up period here for owning shares?

>> yeah, we have a typical lock-up, which is 150 days, just like all of the other private investors. that's correct. >> and how will you make the decision of whether you want to stay with this stock in the long run or cash out? >> it will be a function of re-evaluating where stock is trading, at that time looking at fundamentals of the company, you know. they will have two quarters looking forward until then. obviously, we would like to see an acceleration in user growth rate, but it will be a function of different things that we will ultimately use to make a decision. >> well, what is it that you will focus on? in part, the company's tried to divert investors from thinking a lot about metrics such as monthly or daily average users and focus more on engagement. is that a fair way to measure their success, or does, you know, the number of users still matter a lot? >> well, it still matters.

that's the engagement metrics are incredible. i mean, where we looked at it, we compared it to facebook and to twitter. and by the way, we were early investors in both those two companies as well, and we were just amazed by the time spent, by the demographics and all these different engagement metrics. you know, they're way ahead of everything else that we've seen. today it's only comparable to facebook. they're ahead of instagram. they're way ahead of twitter. so, that's certainly one of the key things to focus at on snap. >> when it comes to growing user growth, you know, the company apparently on the road show blamed an app problem with android devices. how much of it do you worry about is from an up-start competitor like facebook, instagram stories? >> i'm sure there is some kind of bump because of the instagram launch. by the way, it was the 16th or 17th try that facebook did to

copy snapchat that finally worked. that said, it's true when you consider that snapchat is a video-first application and requires a lot of bandwidth, and you go to countries like indonesia, india, china, where bandwidth is pretty slow, or low, so you have that issue, and that's also one of the kind of key things that they need to consider and think about when they start to expand more globally. >> you mentioned twitter being an early investor there. you know, some would say that's a cautionary tale, given that it had an incredible public debut, but since then has had really hard times monetizing what has not been a growing audience, or certainly not to the likes of investors. do you see similarities here between twitter and snapchat? and are you concerned? >> well, so far -- well, first of all, twitter had the potential to become what

snapchat has become, essentially a video-first platform, and then use that. and that's something that's haunting them now. i think their issue has been on the execution side. they continue to have a very great product and kind of unique product, but they have not been able to execute against the opportunity. you know, snapchat, again, the engagement metrics are way different than twitter. actually, they're better than facebook when facebook went public. so, we don't really see too many similarities with twitter. >> one last question, luben. we have an early accelerating out of the pivotal, $10 target. they're citing specifically ongoing delusion from share-based comp, something we know a lot about from some of snap's rivals. how much of an anchor can that be? >> yeah, i mean, snap is a very young company that just started to monetize about five quarters ago, and it's already hit over

$400 million of revenue. you know, you have a very young founder who is extremely careful about his company, and i think, you know, you can give him some credit for what he's done so far, given that he also fights facebook and instagram. so, in our opinion, it's not too much of a concern right now. i think if the fundamentals work out over time, i think this platform is going to be multiple times bigger than it is today and all those things will kind of fall in the bag. >> thank you for joining us on the snap ipo day. luben is an early investor in the company and partner at gsb. good to have you here. and carl, you just mentioned the downgrade or the $10 retarget from pivotal. also, they cite here significant risks offsetting the opportunities, like having bigger competition with bigger scale for an upstart company. that's going to be tough.

>> though there is some insolation. and even cramer's view, too, that there is some insolation from competition because of what jim said was a in theerl kind of devotion to the product, at least among its key demo. >> he did raise the prospect that a year from now perhaps it will be below the price it's currently inhabiting. we want to separate from this and get to washington, d.c., speaker ryan taking questions. >> recuse himself. i think he answered that question this morning, which is if he himself is the subject of an investigation, of course he would. but if he's not, i don't see any purpose or reason to doing this. let's take a step back for a second here. number one -- we know that russia tried to meddle in the election. why do we know this? because we in congress and the intelligence community did an investigation after the election, which discovered russia was trying to meddle in the election. this is something we all well know. here's another thing -- we have seen no evidence from any of

these ongoing investigations that anybody in the trump campaign or the trump team was involved in any of this. we have been presented with no evidence that an american was colluding with the russians to meddle in the election. this is something we also know. we're still doing investigations. you've got to remember, in the house and in the senate, the intelligence committees have been investigating this, the intelligence community itself, not the committees, but the community did an investigation after the election and gave us the results of that investigation before the inauguration. the house intelligence committee just finished coming up with its oversight plan to continue investigations. we will always make sure that we are protecting our sources and methods and getting to the bottom of any of these things, but we have seen no evidence, been presented with no evidence that anybody on the trump campaign or an american was involved in colluding with the russians. >> what about the idea that the obama administration tried to preserve some of this information that was coming out about russia because they believed that this influenced

the election? and secondarily, that that was either, "a," an effort to keep the story alive because they don't like the outcome of the election, or "b," you know, contributes to what we're seeing now, is these inquiries continue? >> i think part of what is happening -- i think democrats are lighting their hair on fire to get you to cover this story to kind of keep repeating the same story. i think they're trying to get this coverage going. there is nothing new we have seen here. this is stuff we have been going over. and by the way, we're going to make sure we leave no stone unturned, and that is why our intelligence committees are conducting the investigations, and that's where they should be conducted, because you have to protect your sources and methods and intelligence-gathering, which is why we have intelligence committees in the first point. >> to follow up briefly, is that what you think they're doing, the democrats? >> i am not going to speak to the motives of the ic, the intelligence community before this, i can't speak to their motives, but i can tell you, you know this as well, they did an investigation intelligence communitywide. many of us got the briefings from clapper and brennan after the election, before the inauguration, and never have we ever seen any evidence presented

to us that an american or a person in the trump campaign was involved or working with the russians. >> mr. speaker, the defense appropriations bill's filed today. will that head to the president by itself or will it be with other measures? and will it be the vehicle for a fiscal '17 -- >> i would have to defer to the senate on that one. we're passing that bill off here in the house. whether or not they can take it up or they're going to do something with it, merge it with something else. it's more of a senate question. for senator mcconnell, his problem is calendar. it takes him a lot longer to do things over there than it does us. so, he's got to manage his calendar. so, whether or not that goes separately or is added is something you'll have to ask the senate. >> what about the bills in the house? are you going to -- >> we're moving it. so, you already know we're moving our bill. are we going to have 11 bills moving? no. for fy '17. we don't have a time for that as well. so we're going with defense first. we think defense is important. the reason we think we need to

move defense as quickly as possible is it's a continuing resolution is uniquely bad for the military because a continuing resolution for the military, they have to buy exactly what they bought last year this year. that's not how the military operates, whether it's munitions, whether it's supplies. they need to have the flexibility through an appropriations bill that you don't have in a continuing resolution to be able to customize what they need, whether it's, you know, supplies, munitions, bullets, missiles, you name it. now, let me go to somebody in the back. >> thank you, mr. speaker, lisa from the "pbs news hour," at the risk of repeating myself again. two questions, one on the attorney general. i want to make sure i understand your position. you're saying there's nothing new here and i understand you're deferring to the committee transcript, but we now know that he did meet with the russian ambassador, and in addition, he at least implied, and some believe he stated that he had not spoken with the russians. do you think there are no questions to be asked there? >> sure, ask some questions, but honestly, we meet with ambassadors all the time.

i did a reception about 100 yards that way with like 100 ambassadors last year. i don't even remember all the ones i met with and took pictures with. it's really common for members of congress to meet with ambassadors. i met with the indian ambassador yesterday. so, that kind of thing happens all of the time. as to the rest of it, i would just defer you to jeff sessions and the senate judiciary committee. yeah. >> thank you, mr. speaker. on the issue of immigration, there have been reports of immigrants who are in the country illegally but who are otherwise longtime residents who have been living law-abiding -- >> you mean don't have criminal backgrounds. >> right. >> right. being caught up in the raids. notably, there was a case yesterday of a young dreamer down in mississippi who was arrested and detained right after a press conference where she was speaking with clergy and others about her concerns about immigration. is there any role for congress to step in and take a second

look at president trump's executive actions or is this the new normal? >> no, no, no, i think there's always a role for congress under every instance in every administration to conduct oversight of the executive branch and how they perform in all these case cases. i can tell you this, the priority of the trump administration -- and we've spoken with this -- i spoke with secretary kelly a couple days ago about this -- is to secure the border and deport criminal aliens, people who are not just here illegally, but who are here illegally who are violent criminals. that's the goal. now, you saw this kind of thing happening in the obama administration as well. sometimes people slip through the cracks, but the priority and the goal is to not go out there and deport dreamers. the priority and the goal is to secure the border and deport people who are violent criminals who are making our communities less safe. >> so, what -- >> mr. speaker, if there really is nothing there on the whole russia issue, why not just allow

a special prosecutor to investigate -- >> first of all, we don't have that law. second of all dr. >> but you could pass a law to establish -- >> my own view is you have to protect the sources and methods of our intelligence-gathering communities, especially with adversaries like russia, and that's why the committee of jurisdiction, which is supposed to protect those methodologies, should be the intelligence committee. the intelligence committee, just so you know, manu, they've been doing an investigation for some time now. they just recently added more scope to that investigation on a bipartisan basis, so you have adam shift, the ranking member, nunez, the chairman, agreed to the scope of investigation going forward. that is exactly where from the congress standpoint that investigation should have occurred, because remember, at the end of the day, we have to protect our intelligence assets. we do not want to compromise our sources and our methods of getting intelligence from any adversary, let alone russia. >> will you oppose a special prosecutor? >> we don't even have the law. >> do you oppose the legislation? >> i just wanted to ask about

one aspect -- >> who are you? >> daniel wrenches from feature story news. >> from what? >> feature story news. we're an agency here in d.c. one aspect of the house intelligence committee investigation is to investigate the leaks themselves. so, i'm sure some of my colleagues will be concerned that that will cross a line and will create a degree of insecurity among journalists. so, can you talk about how you think that part of the -- >> sure. leaking classified information's a crime. and if we have evidence that somebody in the executive branch is committing a crime, we should prosecute that person. >> last question. >> i wanted to ask, the freedom caucus -- the wife of the freedom caucus leader this week sent an e-mail to republicans saying you need to hound your office, kill "ryancare," because it's not real repeal and replace. this is just, i guess, an example of conservatives squawking at the bill you're working on. and i'm wondering, what are you

doing to get them on board? are you concerned about this? does the white house need to tell them specifically point blank that they're behind your proposal, if that is the case? >> let me give you a quick refresher of history. we have been running on repealing and replacing obamacare since 2010. in 2016, the house in a bottom-up way, set a working group together -- the commerce committee, the ways and means committee, the education workforce committee, and then any other member of congress who cares about this issue participated in a working group to come up with a plan for what we would replace obamacare with. much of it was modeled off the tom price legislation, which we as conservatives have always seen as sort of the gold standard for replacing obamacare. he's now the secretary of hhs. that is the bill, the plan that we ran on in 2016. we told america, here's our vision for how we replace obamacare after we repeal obamacare. that's the bill we're working on right now. that's the bill we're working on with the trump administration.

we're all working off the same piece of paper, the same plan. so, we are in sync -- the house, the senate, and the trump administration -- because this law is collapsing. and you can't just repeal it. you have to repeal it and replace it with a system that actually works, and that is exactly what we are doing, and i am perfectly confident that when it's all said and done, we're going to unify, because we all, every republican ran on repealing and replacing, and we're going to keep our promises. thank you. >> why is the plan under lock and key? >> that is speaker ryan pushing back on calls for the attorney general to resign after meetings were revealed between him and the russian ambassador last year, meetings that were not included in his confirmation hearing. as he pointed, we all meet with the ambassadors all the time. a story that's eluded us here because of the snapchat ipo, eamon javers, but an important one. >> reporter: yeah, that's right, carl. you heard there the speaker of the house sort of falling back

on attorney general jeff sessions' own comments to nbc news this morning when asked if he would recuse himself from any investigation into russian involvement in the election. sessions says, i have always said that i would recuse myself, if that's appropriate. there you heard speaker paul ryan saying something similar, but not necessarily coming all the way out and calling for sessions to recuse himself from that investigation. we do have, however, a couple of republican members today who are calling for sessions to recuse himself. congressman paul labrador, congressman jason chaffetz, senator rob portman have all issued statements of some kind or another today, suggesting that sessions should recuse himself from any investigation like that. i can tell you that here at the white house, they are saying that this entire story is illegitimate. they say there is nothing there. the white house says, "this is the latest attack against the trump administration by partisan democrats. general sessions met with the ambassador in an official capacity as a member of the senate armed services committee, which is entirely consistent

with his testimony. it is no surprise senator al franken is pushing this story immediately following president trump's successful address to the nation." and you heard paul ryan there saying something similar, that democrats have their hair on fire here trying to get the media to cover this story. and i apologize for the noise here, but marine one is taking off from the south lawn as we speak. the president is heading out to an event in virginia this afternoon, carl. >> all right, eamon. thank you very much for that. eamon javers at the white house today. dow is down 47, close to session lows. when we come back, we'll talk to brian wiser over at pivotal with his early accelerating on snap and a $10 target, after a break. when you have $4.95 online u.s. equity trades... lower than td ameritrade, schwab, and e-trade... you realize the smartest investing idea, isn't just what you invest in, but who you invest with. ♪ termites. we're on the move.

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so call today. because now's the perfect time to learn more. go long. a accelerating with a $10 price target for snap, the biggest tech ipo since alibaba that is currently trading up 50% here in the opening half hour, $25.30 is the price. brian wiser is the analyst, the tech analyst at pivotal research with that call. so, brian, not impressed with this pretty stunning initial ipo pop in terms of price action? >> yeah, well, it's not terribly surprising that the stock would play out this way, but certainly, the valuation is more than robust. it's just very difficult to get there. you know, i'm able to estimate $87 billion of revenue by 2023, if you assume a 30% margin on that, adjusted margin, to be clear. that's not even a real margin. you know, you bring that back to

the president, and it's hard to get much more than $16 billion of value. >> so, $10. talk us through how you get to that valuation specifically. >> yeah, we have about $6.7 billion of revenue, 30% margin' assume about assume $300 million between cap x and acquisitions. discount that back to the present. in terms of cost of capital, i'm using slightly higher costs than i use for facebook. that might be generous. because it's obviously a much riskier venture than is the case for facebook. one of the bigger variables that i think a lot of people don't fully account for and it's difficult to account for is the fact they're issuing so many shares. the average employee got $1.4 million of shares last year. which is stunning. it just -- it dwarfs any other company i cover, the little using of that is going to produce over time has to be accounted for, as well. so it's -- discount by

1.6 billion shares, $10 per share. >> brian, you talk about cash costs, high expenses. we understand that. then you say a sub optimal corporate structure operated by a senior management team lacking experience. i mean, these guys have turned what some called a joke into a real company. how can you say that? >> well, you could call it a real company, but show me the cash flow. i mean, it's not to say they can't be successful. but they haven't done it yet. so there is some real risk. like, i could generate $1 billion of revenue if you dagav2 billion today. that wouldn't make me successful. >> brian, sophisticated investors in the private rounds before it ipo. what is your guess or what's your estimation of what they're seeing? is it just so much scarcity value in this company in terms of an addictive product to this

audience? >> i think that's part of it. there is a momentum element. one of your programs yesterday i saw four people -- none said they would want to hold on to this stock to r for a year but love to have it at the ipo. i think that's nonsensical. i think a lot of people want to buy the stock because they think the next person will pay more for it. that doesn't sound like a sound way to invest. >> you also cite the aggressive competitors. i don't think you named facebook by name. is that who you were referring to and would you not see the younger age demographic, snap versus a facebook? >> i disagree with that. yes, it is -- facebook and google, as well, when we're talking about the competition for advertising colladollars, we look at engagement, time of use and number of people using it, first of all instagram has more huge by itself than does s.n.a.p. facebook has three times the

consumption among 18 to 34-year-olds in the united states. if if you look at all audiences, of course, it's more like 10 x. here's a fun fact. for all the interest in reaching adults 18 to 34, 18 to 24, some data from a few years ago indicated 3% of network tv buys were posted. 18 to 34. every other is 18 to 54, essentially. it's a little higher in terms of how many advertisers care about to 18-34. but we can't overstate the importance of 18 to 34. we have to be mindful about the broader context. and so when we look at that broader context, facebook reaches so many more people. on top of that, google, of course, just -- it's bigger on so many other dimensions, as well. so that's real competition for them. >> yeah, i mean, more than 30 minutes a day for people under 25 is still pretty impressive.

where else are you seeing that? 20 times a day they open this app. >> yeah. but i have to say, instagram has more huge and facebook has more huge than that. where a snap has some really exc compelling data points. tonnage of use or hours in the course of a month, they are bigger than any one cable network. but any one cable network isn't necessarily big business. mtv did maybe 6 or $700 million of revenue last year from advertising. adult swim and cartoon network 6 or $700 in revenue. it's good to be bigger than that but that's not a business. >> one of the things to watch as this develops, exactly how the street is going to grade the company. when is it going to expect in terms of metrics to deliver on and things like that. i don't think it's necessarily certain exactly how it's going to be evaluated. >> i agree. and i think that, unfortunately, a lot of investors are going to look at a terrible way to assess a company.

not least because of financial profiles of this business is so radically different than, say, facebook. but just fundamentally, the user doesn't spend money on advertising. the user is the advertiser. we have to look at share of wallet and it doesn't necessarily relate to the consumer. most investors are looking at arpos for starters, because it's the best, easiest metric to look at, most people think. and that's going to send people down to a very mistaken path, i think. >> yeah. that average revenue per user. jean monieser told us to watch, as well. thank you for jumping on with us. brian weiser, trades just around 25, carl. >> and already the most active stock here at the nyse. of course, snap needs content creators to stay on the platform to succeed. we wanted to bring in one of those popular users on snapchat. the face behind the instagram. girl with no job account. thank you. >> thank you for having me. >> can you help people understand how the product was evolved since you first got on?

>> when i first got on, it was for teenagers to send nude photos of themselves to each other. and my, how we have come so far. it's really a new source for a lot of millennials. i check snapchat first thing in the morning, read daily mail. it used to be twitter for me and a lot of people do the same thing. it's a fun social platform, for me a way to speak to people. it's a way to talk to your friends with silly filters and find what is going on in the world. >> you're also on instagram, though. >> of course. >> snapchat versus instagram. >> so tough. because instagram for me as a creator is another opportunity for me to engage people, monetize. it feels a little forced. it feels like it's much more natural on snapchat, because that's how the platform evolved. so i appreciate the effort. i use it, i like it. i think snapchat is just better at it if that makes sense. >> you said the word monetize. what kind of money are you making? >> that's a whole other segment. but we're excited about getting in front of young female

millennials. it's a cool opportunity for me to work with really cool brands like captain morgan, networks, e., lifetime. it's fun for them and really fun for me. >> i'm sorry. i was going to say the brands themselves, is it individual product stuff, is it brand image stuff? >> it's both. a lot of times it's for a specific movie, a specific product, specific new liquor brand. a lot of times it's getting in front of cool peeps. >> speaking of which, getting in front of people. on twitter it's obvious, right, you're getting retweeted. easy for people to discover you, they suggest who to follow. none of that happens on snapchat. how do you grow your base? >> it's similar to tumblr. people lie all of the time. if somebody tells you they have x amount of followers, divide it in half. i to it all of the time. i lie -- >> on snapchat. >> how can you tell followers you have on snapchat? >> you can't. so the most analytics i get is who views my snapchat and how many of them. that's not to say that 100,000 people could have me, but only 75% of them watch me, you know? >> yeah.

but does it matter to you how many followers you have? i mean, snapchat's argument is that it's not about user growth. >> it's not. that's what's really important. so i have -- >> you buy that. you believe that. >> i completely do. i have about 2.5 million followers on instagram. and i have 100,000 on snapchat. those 100,000 people are so much more valuable. like, if i was just nominated for a shorty award, which is huge. >> congratulations. >> i put that on my snapchat because i know people are going to vote for me there. if i'm adding someone on snapchat, i care about looking inside their life. same for me, if someone adds me on snapchat, they really care. i don't really care if i follow someone on instagram. i like to see beautiful photos, pretty ladies, things like that. >> you say it feels more force. do you believe facebook can find ways to get better? >> they are getting better. they added the stickers. i think snapchat did it first. and the users are there. and i feel loyal to snapchat. >> one question investors are asking, whether it's a fad. >> i mean, i think everyone

thought it was a fad when 12-year-olds were sending self ease of themselves to each other. and now some of the biggest publishers in the world are on snapchat discover. so i don't think so. >> is this your primary job or a hobby? >> it was a hobby when i was in school. but now it's a full-time job. being a girl with no job is a full-time job. >> is there something that -- investors right now -- this is a public company, want to know what the next act for snapchat can be in terms of what they can introduce, what they can become. is there anything particular you see coming or would like to see that would make it better? >> i think the long-term video, the long-form video is very cool. i did abc digital has a bachelor after show that used to be on abc channel 7. now it's on snapchat. they get just as many viewers, be maybe more. there are not as many rules when you're on cable, you can say the "f" word which i particularly like. the long form video -- whether it's political, entertainment news, celebrities, the long form stuff is fun to watch and for me fun to participate in. >> you say the bachelor -- that

does it for me. >> you talk so fast, we fit a ten-minute interview into five minutes. >> but do you have as many followers as ddjkhaled. >> he's 2016. >> an important day for us. we'll continue to watch snap, dow down 42. let's get to the judge. all right. welcome to the halftime report. i'm scott wapner. our top trade this hour, snapping up snapchat, the biggest ipo since alibaba, shar surging as we speak. with us for the hour, joe terranova, josh brown. snapchat stock up more than 45%. two traders getting in on that deal today. john and pete. what are you doing with them? >> well, i'm going to hold it, judge. instead of just flipping it. i oh put a poll out on twitter, i asked people what would they