this morning shares of all the stocks jumping over 10% that does it this hour i'll send it back downtown for "squawk alley. >> good morning, it's 8:00 a.m. at stitch fix headquarters in san francisco, 11:00 a.m. on wall street, and "squawk alley" is live. ♪ ♪ good friday morning, welcome to "squawk alley. i'm carl quintanilla with sara eisen at post 9 of the new york stock exchange, john fortt is at the nasdaq in times square where he'll sit down with stitch fix ceo katrina lake in a moment big story, 21st century fox and

comcast moving in opposite directions comcast, the parent company of cnbc, has approached fox comcast focuses on the cable network, movie studio, partial stake in hulu, and perhaps more importantly the international assets it's not interested in fox news, fox business, and fox sports 1 here's what les moonves said last night about the news. >> i think we were all shocked about the initial announcement, which was on cnbc, about murdoch potentially selling some of his content assets and that's sort of surprised me, because we all envision rupert as somebody who's always expanding, and the reports from cnbc that they said, well, the talks had stopped and no surprise, you know, brian roberts stepped in there so, i think what it says is, content assets are unbelievably

valuable >> also getting reports this morning on verizon's interest in parts of fox, as well. joining us to talk about this, obviously, is robert mcdowell, partner at cooley llp, we'll talk about that in a moment. the media frenzy all week long is affecting players who aren't even part of this particular conversation, who might be given their strength in content down the road >> really interesting to envision what sort of tie-ups we may see, who's interested, but i think the number one barrier is going to be the regulatory issue and what happens specifically with the at&t/time warner deal now that it is facing a bit of a challenge. we hear from the government does this have to wait for that, so that could be one of comcast's potential sort of headwinds to this deal if it does continue to pursue that antitrust action and what exactly we can expect from the trump administration on that front. comcast already such a big player in content with our

parent company nbc universal >> the large lesson here, everybody looking for scale in distribution and also geographic scale, as david made the point last hour, a lot is about companies domestically focused who are hungry for a more international presence as we said earlier, robert mcdowell joins us to talk about this media frenzy, robert, and the fire that's getting lit in the face of these confusing signals regarding antitrust. what do you make of all that >> well, there are some confusing signals right now, especially because it seems from a due process perspective you might have shifting rules of the game, and i'm talking about at&t/time warner inc if you look at comcast, nbcuniversal, which you're a part, i was commissioner at fcc during that review during the obama administration, but also look at other deals, big deals, there have been behavioral remedies and not just structural remedies to try to cure any

potential consumer harm or market harm that could come about as a result of a merger. so we're seeing a bit of a stutter step, some uncertainty that is affecting this very segment by your proving it uncertainty in the markets and m&a overall in this space, but we've seen for a while the marriage of content production and distribution across a variety of platforms, and we're also seeing now with the fcc's recent action to try to relax some of the rules regarding media ownership in the traditional media space to help cure that asymmetry with digital media, which is less regulated over the top media you can have production, distribution, you can have all sorts of things, but in traditional media, now the fcc is starting it to modernize those rules, so that should be sparking a big wave of m&a activity here over the coming years, but the uncertainty is holding some of that up. go ahead >> we'll see what happens on that front

just wanted to add another suitor name here, potentially r verizon. are you saying verizon would have less scrutiny than a comcast or a disney in going after these 21st century fox assets >> that's a good question. i don't know the absolute answer, but i think the department of justice has an opportunity to redefine what they are putting into the denominator of competition how do you evaluate competition. for instance, does a traditional tv station only compete against other over the air tv stations i think not, as i look at my own viewing habits or my kids' viewing habits especially, so you're competing against the whole video market when i was a commissioner looking at the combination of sirius xm, i didn't view that going from two to one as if that's the only audio platform, it's the audio market generally prerecorded mp3 over the air radio, et cetera, so there was a lot of competition i felt, and

the bush department felt, as well so right now with all the convergence we have, that's the key word here, the convergence of whether you're a tech company, traditional media company, telecom company, wireless, cable, look, they all have networks. even if you're an edge provider. they have fiberoptics and routers and all purveying in a slurry of ones and zeros that's the data that becomes video and voice or whatever so congress needs to step in to modernize our laws, because they exist in these old antiquated regulatory stove pipes that are no longer applicable to answer your question about the prospects for these deals, i think this is actually a terrific time for the doj in particular to modernize its view of this marketplace to figure out what's in the best interest of consumers and competition and so, you know, some would argue that a lot of these content and connectivity deals should continue to go into effect because right now there's

only one big company, which is your parent company that has that marriage of content and connectivity, and so certainly at&t and others would argue that you need competition and what's the best way to do that, but to have these combinations >> it is a reminder, we talk about the disruptions whether it's autonomous driving, migration from digital to video, and the government is going to have to adapt. it's not just about media, it's about changes technology is going to bring us in the next decade >> exactly doesn't matter if you're a new tech company providing a service and you're competing against some sort of incumbent, and it could be ride-sharing or the sharing of your house, et cetera, competing against hotels and taxi cabs, which are regulated, so what you're seeing is regulatory albatross, so investment and innovation is going to go into the least regulated parts of the economy,

so you have to kind of re-examine competition law in the context of these old regulatory stove pipes that might individually regulate broadcasters or cable companies or taxi cabs or hotels or whatever and see what can you do given these innovations, which are bringing great inefficiencies to the markets and are wildly popular with consumers, so what do we need to do to modernize our laws, have a win-win situation, where you can have robust activity here but protect consumers, investment, entrepreneurs at the same time >> appreciate your take on things appreciate your time >> thank you breaking news regarding tesla, cnbc is learning walmart is planning to testocomposuti tw trucks they say we have a long history of testing new technology, we're excited to be among the first to pilot this new heavy duty electric vehicle >> i would say that's a strong

vote of confidence, tesla shares up 2%, where they've been all morning. that's the question, whether this is a game changer, and i think what came out in terms of the stats surprised analysts, that is the range of 500 miles the trucks can go minimally, the cost, $1.26 per mile that is a lot lower than diesel, so this could change the game. we'll see if we get anymore word on that walmart/tesla tie up in terms of the trucks. first, we are watching stitch fix make its public debut this morning let's send it out to john fortt at the nasdaq with ceo and founder katrina lake over to you. >> katrina, thanks so much for being with us and congratulations on your first day as a publicly traded company. the stock up better than 16% got a sheet from the nasdaq here, it's hard to come by the exact data, but you might just be the youngest female founder/ceo to take a company public ever. but, all that aside, stitch fix

is at the intersection of retail and big data tell me why is it important to have this funding now to grow the business >> absolutely. when i started stitch fix, i was looking around and saying how are people going to buy clothes ten or 15 years from now, and i didn't see that solution in better stores and i didn't see that solution in searching through millions of pairs of jeans online, and this idea of personalization of getting to know people, getting to know products and generating really good actionable recommendations at the intersection of those two things was something i felt like was the future of retail and so we're really excited to take that business and to be able to kind of share that with a broader audience now >> for people who aren't familiar with the stitch fix model, and there are going to be fewer now that you're public, you can choose how often you get, basically, a box of clothes that are customized to you partially through what you've told your algorithm, what types of clothes you like, your sizes,

et cetera, partially through a stylish, who's then picked stuff out for you. the frequency ranges from every two to three weeks, to every couple of months, right? where are people most often choosing to be in that continuum, and where do you expect them to be? >> yeah, we see a lot of variation in the ways that people engage with stitch fix. so you can get shipments on a monthly cadence. that's not necessarily a healthy cadence for all people to shop, but not everybody likes to shop that way you could get things on a quarterly cadence, also a la carte. i style fixes myself and i have clients who will come for special occasions or kind of specific things they are looking for, and other clients that are more consistent. so we really think about the frequencies as really just matching the way people engage and making it most convenient for them >> you style them yourself >> i do. >> friends or random strangers >> for both. in fact, we have some clients here today, which has been very

fun. a client that i've been styling for for years and she had no idea i was styling her fixes for better or worse and she's celebrating with us today, which is fun >> is that important for you to do do you view that as a core aspect of this human being being involved as a core aspect of what stitch fix does >> absolutely. with stitch fix we use data science, a lot of data science, but there's an important human layer of styling above it, so when i'm styling fixes, i can see what the algorithm is recommending, but it's still my choice of what i'm going to choose and not going to choose and that is so important in building relationships with our clients and making sure our clients feel heard and so the combination of how they work together is really special, but that stylist role in particular is unique as you look to other models >> some ipo investors are getting gun shy after snap, blue apron, companies trying to connect the real world to, you know, to technology and data those two haven't done so well

since their ipos i think investors are trying to separate hype from reality explain perhaps from the context of inventory how you tackle that issue. you've talked about how you had a big inventory problem in the past, learned from that, moved past it. how are you handling inventory and how are you handling it better now >> this is a business on a near billion dollar base. we've been cash flow positive for years and had consistent profitability, and so this is a business that i think has proven in a lot of ways and we have really strong contribution margins and metrics to show for it in terms of the inventory side, one of the things we're extraordinarily good at is turning inventory and moving inventory and the way we use data to drive that is that when people are signing up and letting us know their preferences, that helps us to make sure we have all the jeans in the right sizes and inseams, so we can actually use data to really power the inventory side of our business. to your point, that is one of the harder parts of our business to do. when you sign up and say i want

a new pair of khakis and need to have your size and inseam, that's one of the challenges in our business and i think that's, you know, a benefit that we now have with this very large scale, is that we are able to serve many people very well with a broad base of inventory. >> i think you said you're going to have to start spending more on marketing for customer acquisition. what's the most efficient way for you to do that is it through the googles and facebooks? we've just seen their earnings, they've become a very key marketing channel, especially for digital businesses are there other ways that are becoming important to you? >> absolutely. diversifying is a big initiative for us last year we spent about 7% of our revenue on marketing that is still very low relative to other e-commerce peers. others you'll see 13%, 15%, 17%, so we've been pretty conservative on that front, but very effective in terms of channels, social, digital works well, but we've seen tv be really effective, as

well >> like to hear that, okay >> yeah, we've had three rounds of tv and they've all been very effective. so we have a very broad mix of marketing channels that are effective for us and that's been kind of an important part of our strategy, is diversifying that mix. >> talk to me about culture. you've got a company that's got data scientists, you've got stylists, you've got quite a diversity of different types of workers and life experiences what kind of culture are you trying to drive in the company and do you view it as being different from what silicon valley and san francisco have had in the past? >> i think our culture is very differentiated and it's a big source of our success. the diversity of thought, of experiences, having data scientists working alongside stylists and merchants, all of that is so special and one of the things i love most about this business and many people who work here do, but i think even in the abstract talking about how the stylists and data science work together in styling fixes, for example, is kind of symbolic of the way we work together and partner together,

so i think we've been able to create this amazing culture that is, i think, a big driver of success in our business and one i think all of us here share a lot of pride in. >> talking more broadly about culture, there have been news stories out. you were sexually harassed by an investor as your company was getting off the ground there's a nondisparagement about that, but i want to ask about the conversation that's opened up since in tech and silicon valley and now in politics everywhere about these issues. as you reflect on your experience working past that, learning from it, where do you see that tech is now, founders are now, and where do we need to get to, how do we get there? >> my path as an entrepreneur has not always been easy and i've learned a lot through that, my hope is that now that there's such a broader conversation about the challenges of many people and many industries across -- beyond tech, my hope is the conversation moves things

forward. i think in venture capital and in tech we still have a gender issue. there's still not enough women who are venture capitalists, not enough women who are decision makers at the top and i hope that at stitch fix we can demonstrate kind of what success can look like with a real diverse team, but, you know, i'm hopeful that there's change coming and certainly having a lot of conversation on the topics, i think, is creating some momentum. >> quite a milestone you've got here, the stock up from where it opened, better than 14% right now, katrina lake, founder, ceo, stitch fix thank you for being with us. >> thank you for having me >> carl? >> good stuff, thank you very much when we come back, elon musk calls it "a hard core smack down to gasoline. details on the company's new rides coming up. plus the new semitruck that walmart is planning to test out. hot off the heels of the stitch fix ipo, bill gurley joins us to talk about the ipo and a lot

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a big night for elon musk and tesla. we're getting word walmart might be testing these new trucks. over to you.

>> i heard your report earlier when you were talking about that i think we will hear this from a number of companies, the largest shippers in this country, that are all going to test out this truck to see if the metrics truly deliver the type of game changing performance elon musk promised last night. here is the tesla semi, and, yes, that's what they call it, the tesla semi what are the numbers, the performance numbers, that elon musk is promising? 20% lower costs, a cap on the charging rate, and a guarantee for up to 1 million miles that this truck will not break down as if that wasn't enough news last night, there was this, and this is the eye candy that has tesla fans talking this morning. it is the new tesla roadster it goes zero to 60 in 1.9 seconds with a range of 620 miles. >> people have been asking us for a long time, when are you

making a new roadster? we are making it now >> a lot of cheers last night. by the way, that roadster is scheduled to be built and delivered starting in 2020, but guys, as you know, as you look at shares of tesla, there are more pressing questions that wall street have right now no discussion about that last night, elon musk did not do a briefing with reporters as he usually does before these types of events, so still more questions than answers when it comes to the model 3, but at least last night elon musk and tesla fans had some things to talk about in terms of future products >> did he put out any production targets on the future products, phil, and are they a little more conservative or realistic? >> no. >> no? >> nothing those are the kinds of details that journalists and analysts were hoping to get last night. this was one of those events where there were some

interesting elements that were discussed by elon musk, but a lot of questions what's the price of the tesla semi, what's the anticipated price, all of these things factor into whether or not walmart and other large shippers will buy this truck. >> phil, thank you for that. what a night our phil lebeau watching tesla today. speaking of production schedules, we're getting breaking news on apple hey, josh. >> carl, this news just crossing here from apple, it refers to home pod, remember that company's new smart speaker. previously, carl, apple said homepod was going to start shipping in december that has now been pushed out apple telling cnbc just now in a statement we can't wait for people to experience homepod, apple's breakthrough wireless speaker for the home, but we need a little more time before it's ready for our customers we'll start shipping in the u.s., uk, and australia in early 2018

apple is not offering an explanation of why that ship date is getting pushed out, but also means apple is not going to be able to take advantage of the all important holiday shopping season of course, with homepod, apple's going after that hot smart speaker market that you guys talk about all the time, going after amazon and google. of course, these are also products with very different price points amazon echo around $100, google home around $130, whereas the homepod starts at $349 but again, apple saying the ship date is going to be pushed out now to early 2018. carl, back to you. >> josh, thanks for that when we come back we'll hear from the ceo of sirius xm. how he plans to compete with streaming rivals when "squawk alley" continues in a moment

faber deserves to start his weekend, but not going to happen quite yet. he's back at post 9. >> yeah, we have more to do

today. yesterday did sit down with executives related to or part of liberty media. one of them sirius satellite radio, which liberty controls. they do have a stock for that one, as well jim meyer is the ceo of the company, and we talked a bit about the investment in pandora that took place back in june remember siriusxm invested $480 million in the company that time for roughly a 20% stake, did it through a convertible security if you notice pandora's stock price has not done well since then they are perhaps happy at sirius they didn't hit the bid when it was 15 a year earlier, but i did ask meyer if he's still happy with the investment overall. >> radio in this country is a $25 billion business just in the united states. we're $5.5 billion, 5.4 billion, call it roughly 20%. why wouldn't we want to figure out how we could participate in the other 80%? 90% of the other 80% is free,

and radio is a mess right now, so we think this is a good -- in a good position, we own slightly less than 20%. we certainly have a position on the board to evaluate this opportunity over the next couple years. >> and to actually change the trajectory of the company, as well they have three board seats. meyer is one of those board members, as well, at pandora we'll see over time, guys, whether it does improve the performance. overall sirius itself, don't forget about a $24 billion market value, has had very good performance and meyer is unafraid what the future brings in terms of cars or autonomous vehicles, feeling their content will continue to attract consumers who pay them as much as $16 a month >> they do have amazing channels, andy cohen, grateful dead channel >> we should do a "squawk on the street" channel, don't you think? >> we have a cnbc channel that plays "squawk on the street. >> i agree, the most popular is the country music channel.

>> is it really? >> highway >> highway >> great channel >> i like coffee house, too. >> i like coffee house also. spectrum, i like the spectrum. >> david, thank you. now you can have a weekend as we head to break, watching the major averages across the board dow is down about 80 points. plus we are watching shares of stitch fix board member and benchmark capital general partner bill gurley joins us to talk about the ipo. big pop at the open. a lot more, "squawk alley" will be right back. every day, on every street, in every town, across america. small businesses show their love to you. with some friendly advice, a genuine smile and a warm welcome they make your town... well, your town. that's why american express is proud to be the founding partner

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we are the driven... the dedicated... the overachievers. we know our best investment is in ourselves. we don't take no for an answer. we fight for what we want. even for the things that were once a given. going to college... buying a home... and not being in debt for it for the rest of our lives. but we're only as strong as our community. who inspires and pushes us to go further than we could ever go alone. sofi. get there sooner. and i am a senior public safety my namspecialist for pg&e. my job is to help educate our first responders on how to deal with natural gas and electric emergencies. everyday when we go to work we want everyone to work safely and come home safely. i live right here in auburn, i absolutely love this community.

once i moved here i didn't want to live anywhere else. i love that people in this community are willing to come together to make a difference for other people's lives. together, we're building a better california. good morning, everyone, i'm sue herera and here's your cnbc news update in this hour in his first speech to parliament since his re-election, japanese prime minister abe planned to beef up japan's defense capabilities, this to counter the growing threat from north korea, saying he'll boost pressure on pyongyang to change its nuclear missile program. a palestinian rammed his car into two west bank junctions,

attempted to stab israeli soldiers he was shot and severely injured. mafia boss of bosses has died while serving multiple life sentences. he was 87 years old. he was one of sicily's most notorious mob bosses, serving 26 life sentences for murder convictions as a powerful costa nostra boss. and newly installed ge ceo flannery buys $1.1 million in shares, acquiring 60,000 shares at $18.27 a piece, bringing his total holdings to more than 683,000 shares that's our news update this hour back downtown to "squawk alley." carl, back to you. >> sue, thank you very much. let's get the european close here michelle caruso-cabrera is back at hq. hey, michelle. >> hey there, carl as you can see from the red on the screen here, european stocks are on track for the second straight week. exporters are under pressure due to the stronger euro

it's up more than 1% on the week, although off of its highs in today's session now, that may be because mario bragg hee, head of the european central bank said monetary policy will remain easy, even though the ecb is becoming confident the recovery will continue still sluggish wage growth is his reason for worry specific stories to tell you about, shares down more than 40% today. yes, in one day. it's uk's second largest construction firm. it expects to breach loan covenants. the firm blamed delays in a middle east project, also saying it might need some form of recapitalization, so share holders clearly worried about dilution rearview mirroring the downward trajectory due to consistent concerns over their debt burden. stock has lost about half of its value this month alone

you'll recall last week the founder ousted the ceo over the poor results that's it for europe out to john fortt at the nasdaq with a special guest hey, john. >> hey, michelle thank you for that i'm here back at the nasdaq with bill gurley. you're here with stitch fix. what's your take on this ipo >> well, look, this is one of the most enjoyable experiences i've had as a venture capitalist getting to work with katrina, you just had her on. i think this company is so well positioned in terms of how deeply they understand both the customer set and the product set, and they are using artificial intelligence and machine learning at a level that i think is unprecedented before in their sector. >> dig into that, because, you know, we have all sorts of terms, big data, machine learning, artificial intelligence, algorithms when you have algorithms that get smarter on their own, i think everybody accepts that's

artificial intelligence. exactly how deep is the play here, and can you compare it to other companies in benchmark's portfolio that are disrupting other industries >> look, i agree with you. i think those words are overused and in many cases overstated in order to be successful and powerful in these types of areas, you need huge data sets and you need them on both sides so you can do the matching you and i were talking earlier how well spotify does with some of their daily mix projects. stitch fix customers come in and fill out a very deep profile before we ever engage in a customer, they've given us way more information than any other apparel retailer has, and then on the product side, i think we measure something like 60 to 70 different features and characteristics of those products and these are fed into a huge model every time someone gets a fix, whether they keep it or don't, whether they like it or not, item level and information on

both sides, and it's a rich, rich data repository and it is getting better over time >> somebody like or a company like an amazon on balance is it more of an accelerator or, you know, a dangerous competitor to a business like this now amazon wants to send you a box of stuff and you keep what you like and send back the rest. >> maybe we should view that as flattering i have deep respect, obviously >> definitely flattering, but how much flattery can you take from an amazon >> we really come at it from a completely different angle amazon was about earth's biggest selection, so they have so many skus out there and you can do all kind of searches >> they don't know anything about how i dress. >> understood. we take it from a completely different place. we profile you, we have dope understanding of our entire inventory set, predictive keep score for every item in the inventory for you and we send you a curated box.

our head of algorithms says it's the ultimate recommendation engine because we never let you see the choices. it's a very different approach >> surprised what snap's stock has done since the ipo >> switch that fast? >> just that fast. >> look, one of the unique things about stitch fix relative to all the unicorns out in silicon valley is that they've run very disciplined and profitable approach. they've been profitable for several yores. the reason that you never heard of them as a unicorn was because they never raised money over a billion because we came public with over 100 million on the balance sheet. and for all of these other companies, whether they test the public markets or not, eventually they are going to have to prove to the world they can make it to profitability, and i think snap still has work to do there. >> so, are you critical then of the way they promoted their importance in the marketplace before investors got a chance to

weigh in >> how do you mean what is the point you're making? >> well, i asked you about snap and you started talking about stitch fix and they didn't tout the unicorn thing, they were profitable before they took this step is that in contrast to snap, are there lessons learned there when you go to other portfolio companies? >> if you can. we're in an environment where capital availability is remarkably high, and if you're in a competitive situation, you see this a lot in enterprise sas companies, where you're loaded up with capital and you're forced to compete and then profitability rates go down for everyone in the sector, and that's a problem that doesn't have an easy answer. i do think there's a lesson in general for entrepreneurs that capital has a cost, that you eventually need to have solid unit economics and move to profitability. you know, and this happens to be a company that did that very early on >> carl quintanilla's got a question back at the other

exchange >> fascinating discussion, guys. bill, i'm just curious because it seemed a couple of years ago when we would talk to you at code, the whole conversation, all anybody wanted to talk about was how great it was to stay private for longer is the lesson for snap and other names suggesting they went to public markets too soon? >> i don't think so, carl. i think about it this way. i really think about being public as playing at the next level. i like to use the sports analogy of moving from college athletics to pro athletics, and if you want to be better, if you want to succeed, if you want to play at the next level, you have to step it up and go there. i think the opposite is true i think you're going to see a large number of unicorns who were afraid to play on sunday, afraid to be in the public markets that didn't get their act together in time, didn't get profitable, didn't understand unit economics and hurt the value of the equity as a result. >> a couple of the companies

that people are really looking to go public out of silicon valley, uber and airbnb. dara now in the ceo seat there, what's your assessment how he's doing? >> i'm super excited, you know, it's early on. he's brought in a very different approach to international relations. he's already had some significant impact on the company in london, also in brazil >> what's the impact in london that you see >> i think just bringing completely different attitude with the engagement to regulators and dara is a sophisticated executive. i think he comes forward ear first listening and it's just contrast to how we've played things in the past and it's going to have a positive impact. >> you guys at benchmark butted heads with travis kalanick, cofounder over at uber softbank is now coming in making an investment at a lower valuation. are you happy with how that whole piece of it is working out? >> look, i would tell you one of

the reasons i haven't been on cnbc in a long time is 2017 has been a very difficult year, and it's been one where we've been working quite diligently behind the scenes to try and help move things forward for the company, and some of the things that we did along the way, our data points that you just mentioned at this point in time we've had significant impact on the company in terms of what's going to move forward from the standpoint, board standpoint, shareholder voting control standpoint, and we've received immense positive feedback from the shareholders very broad shareholder space, almost as if it was public about those steps. and so just in the past week, as you've read in the press, we've come to an agreement with softbank about those terms and they hope to move forward very soon and i hope that will be successful >> as benchmark, have you sat down yet, looked at that whole process and situation and taken

away lessons learned, how you're going to do things differently in the future or things that you absolutely would do exactly the same way if this type of situation comes up again >> look, everything that happened this summer was a very difficult decision for us, and the two questions we get most often are, how could you have possibly have done this, and why didn't you do it sooner. obviously, those two, you know, are in dark contrast with one another. we reached a point where we felt like, you know, the entire company, you know, and all of its constituents, these drivers, riders, employees, shareholders, were at risk if the company continued to move in the direction it was and working with a large group of over shareholders took action that was not easy to take and we've suffered, certainly, on some brand hits as a result, but we felt we were on the right side of history and i think today if you ask anyone involved are we better off because of dara's leadership and where we're going, i think they'd all say yes. >> carl's jumping in

carl >> bill, hope you won't mind one more from me this time social media, we know some of these big social media names are under pressure politically, some of the ad models appear inconsistent, engagement is spotty you've got their policies regarding abuse are often vague. are we entering some sort of different chapter, a darker chapter on these names >> i get most of my information on this from watching you guys every day talk about this topic, so, look, i think there's quite a bit of new awareness on what's possible and all of these technologies, whether it's what google can do with their search or facebook can do with their feed, when they want to make changes, they know how they have very smart people, and so as political pressure ramps on these guys, i suspect they will respond and make changes appropriately. >> i want to dig into that, because a lot of times these start-ups come to seasoned investors like you for advice and you've got in your portfolio a number of names, including next door, that have really

important and sometimes sensitive data about where people are, what they are concerned about, you know, how information gets spread to a community. are you linking up with different expertise to provide to companies like this in light of things like the russian meddling in the election process that we've heard about, the types of hacks that we've seen seeking personal information how's that change the way you advise the way you do? >> look, there's only a few platforms that have reached a point where the number of participants on those platforms that can do so in an anonymous way, self serve, if you will, is so broad that you have things happening that even the platform doesn't know about, so i don't think we have any sub scale players that are at that level you know, next door, which you bring up, we've built a mechanism from the beginning where the senior members of each community are known as next door leads, and we've given them

editorial control, so we've created and distributed force, if you will. not unlike how wikipedia is structured, where they can go in and make changes, so we have what we believe to be a scalable approach to deal with situations like that. >> hey, bill, it's sara back here at the new york stock exchange you've made some headlines before when it comes to valuations looking across right now the private markets and the public markets, just wondering if you can give us an update on your thinking about bubbles and where you see signs of excessive risk taking we've seen quite a stunning rally in tech stocks in the market this year >> that's true, especially the fangs. welcome, there continues to be a historic level of capital availability that i relate to the extremely low interest rates that have been out there as long as those interest rates stay as low as they are, i think you'll continue to see some form of speculative behavior and tech is a great place for speculation. look what's going on in the crypto currencies and no one is

afraid to speculate in this market i do think we're also watching, however, as many of the unicorns mature in age, many of them are having to come to the recognition they either need to grow up, get profitable, go public, or do something along those lines. the silly notion of we're going to stay private forever is not playing out in a very positive way. >> i'm shocked sara eisen didn't ask you directly about bitcoin, so i'm going to. is this a speculative bubble in bitcoin? do you have any money in bitcoin? are you more focused on block chain? tell us. >> we do have money in bitcoin, and i don't think it's irrational i look at the global -- not that i'm a macroeconomist, but i look at how so many governments are overinflating and interest rates are on the floor, and there is nowhere to put money and so if you live in one of those countries where you don't trust the currency of your own government, you know, how do you

want to get paid we work with a company called hacker one that pays white hat hackers to find vulnerabilities in large websites and many of the people in those types of countries want to be paid in bitcoin and we pay them in bitcoin. >> that's why you have money in bitcoin? >> i think of it as an incredible store of value for the rest of the world. look, it deflates, doesn't inflate. >> in terms of percentage of portfolio, what are you doing? >> it's small, it's like another company. that's not our business. >> sara eisen? >> what do you think it's worth, bill, do you think you can put a price or valuation on bitcoin? >> no. >> you think it keeps going higher. >> i do. >> and not a fraud >> i don't think it's a fraud. >> okay. thanks for clearing that up. >> an important perspective. what do you think is primary driver of the next stage of growth in silicon valley if we take the things that have already been hyped off the table, you know, artificial

intelligence, big data, machine learning, we talked about that, this connecting reality to the digital world through a.r., things like that, it's built into the new iphone, what's the next thing >> the one that has a remarkable monetary momentum to it is the machine learning stuff. you guys talk about nvidia and the servers and you look at what is said about machine learning, and we have a company called cerbrus that's early in that market, and the demand from companies to kind of crunch data in a way they haven't done before seems like it will go on for a very long time. >> can you give us something we haven't heard a lot about. >> i've been spending a lot of time looking at healthcare, and it's extremely dangerous it's extremely dangerous because the laws of most marketplaces doesn't exist. you know, there's not a simple gravity. there's forces in five different directions the people that are consuming aren't paying, and there's all

this -- you know, it's crazy, but i would like to believe that when you look at the marketplaces that have been built, like an uber or zillow and you look at the smartphone that you're carrying with you all the time and you look at the -- at the ramp to 18% of gdp, that there are solutions that can be had, and i've got two new investments. i'm optimistic that there's something there. >> i wanted to ask you a culture question about silicon valley. one of the stories that have really dominated this year from venture capital to established big players like google to startups is questions about the bro culture. is anything of that getting fixed? what's the problem in silicon valley why can't women get promoted faster, paid more and become more -- have more leadership roles? we focused today on stitch fix, one of the only ipos of the year actually led by a female. >> yeah. look, i think that the continued awareness and katrina talked

about this, but the more people are talking about it, which is definitely happening, the bigger impact you're going to have. three of the last six investments that i've made have female founders. katrina, as john pointed out, an amazing role model in terms of not only being a founder but being a founder that made the transition to ceo and then being a founder that made a transition to ceo to public ceo, and she's fantastic. she's one of the best that i've ever worked with and so, you know, benchmark just added our first female partner, so there are some positive data points, but i would encourage everybody to keep the messaging going, keep the discussion going because it is moving things forward. >> you say benchmark just added its first female partner a lot of people would say first? >> i get it. >> and when is the second? >> we add about one partner every two years. >> right. >> so if that were to happen, it would probably be in about 18 months. >> do you have a sense of why it took until now to do that, and

if there are mechanisms in place that make, you know, two years from now that next partner more likely or less likely to be female >> yeah, one of the things that needs to happen is you need people drawn to the category, so if you go back 15 years, everybody wanted to be a venture capitalist today it's less so i guess it's not as glamorous. but every time -- you know, those people develop from banking, you know. i came from banking. they develop from mba programs, develop from entrepreneurs they develop from executive ranks, and so as those numbers keep going up, i don't know if katrina mentioned this, but her management team is over 60% female, and that board is over 60% female, and so each of these data points is like a rock hole where we keep making more progress >> carl? >> john, thank you very much bill, great to have you back i hope it won't be too long

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highlights from the september quarter. >> thanks, sara. >> you say growth rates remain insanely robust and consistent does that mean there's still opportunity in these stocks? >> yeah, and i think primarily with facebook. this is still the one that trades at a discount to its growth rate so you can buy it at 25 pe for what we think is sustainable 30 to maybe even 40% is earnings growth over the next three years, and there's still new revenue streams to be picked at here at facebook. you know, one is that monetization of whasapp. you still have the instagram market that's undermonetized and all the surveys where it continues to show rising advertiser interesting in facebook it hasn't crested yet. facebook is our top pick number two pick for us is netflix. we like what we're seeingout o "stranger things." this quarter they will be exercising pricing power so we like to set up for next year and the third pick for us amazon aws remains, the growth rate

remains unchecked, and we think the retail business is now in a positive inflection point so we like all three of those names. >> marks you say growth expectations overall were lowered, and you really pin it on expedia and trip. what happened to online travel this quarter >> yeah. you know, i think that's the most interesting investor question out of internet, priceline, expedia, trip, i think they showed a confluence of a couple of things, including increasing competitive risks from hotels themselves, airbnbs and new ceos putting their own stamps on the businesses and accelerating businesses with hotel inventory. those assets that i just mentioned, what is most interesting is the setup in 2018, not necessarily a near term stock price but i think it's priceline the overall growth trends are largely intact they will go to near term investment cycles, but i think those will be relatively short term, and these stocks are getting close to trough

valuations we particularly like priceline of those names. >> think of the big-cap text it's interesting that you included a secretary on government footsteps you're watching these incremental moves where governments are looking at the business models of these companies. analysts and investors to us have basically played down this point as a headwind for stocks and profits. when do you think that changes, if at all? >> oh, i think that's already changing i think google is the one that you really have to watch out for. look, the eu is clearly getting more and more aggressive on google the state of missouri is looking into ways that google may be prior tidesing some of it own content. just given a market share dominance, and that's the only word you would use for google, dominance. it's hard to see how any regulator isn't earning their paycheck by at least not exploring whether google is acting monopolistically. i don't think there's any real evidence that what they are doing is undermining consumers the question is whether some of their actions are undermining some of the niche competitors that they are facing that's one of the reasons, by

the way, that google is kind of a little lower down in our buy list it's because of that regulatory overhang and our concern that regulators will get in there, particularly address the android bundling issues. >> mark, thank you so much good to talk to you. good weekend, everybody. >> thank you, carl. >> let get over to the jumping and "the half. >> welcome to "the halftime report." i'm scott wapner our top trade this hour. the quiet correction almost no one is talking about, and whether this week will prove a turning point for the rally. with us for the hour today, jim lebenthal, josh brown, the ubs private wealth manager, one of baron's top 100 advisers and tom lee is here, head of fund strat global advisers. let look at the market steve weiss, are we going to look back at this week and remember it as the start