♪ busy morning lot to get to today. first up, walmart is out with an earnings beat, fueled with growth by the e-commerce division now in the red this follows the acquisition of flipkart all with the amazon effect on retail professor nyu school of business and "new york times" best selling author as well as jason cowakanis of insider.com we just talked to bill simon, former u.s. chief of walmart and talked about the question about whether or not amazon's behavior is predatory on other retail and

the effect we're seeing on walmart over time. >> well, yeah, the answer is yes. when the chinese put steel in the u.s. market before, you know -- for less than cost, it was dumping. when amazon does it, it's innovation look what's happening with whole foods. you're about to get a mercedes for the price of a camy. if you order whole foods to be delivered at home it's less expensive than if you order home delivery from kroger where would you rather get your groceries? so, yeah, a.mazon/whole foods at the high end and probably walmart. in the middle will be ugly for the next decade. >> 15 years ago, it would have been walmart who people would be going after anti-trust wise, saying they've got all this data that was their secret sauce. they have randy mott as their cia. they were taking over the world. now the targets on amazon and walmart looks like a deer in the woods. what do you make of this is amazon really a problem and

is walmart looking decent here with this e-commerce growth? >> it's pretty amazing what whole foods is doing by lowering prices they've been lowering prices 30%, 40% the whole value proposition of, you know, walmart has been the cheapest prices and now you look at whole foods is going to be the cheapest prices but the best quality. this is just absolutely too good of a deal for consumers to pass up. >> do you think whole foods will be the cheapest prices, really >> well, i think they'll be pretty close so when you start look iing at two-hour delivery in most cities and ground beef going to 5d$5, roast chickens are 10 bucks. i don't think amazon will look at whole foods as a money maker as much as part of this amazon prime cult where people pay $120 a year for the privilege of shopping and getting these discounts. the consumer is going to win and for walmart to go buy a

competitor halfway around the world and try to compete and beat amazon there, while they're getting, you know, their butt kicked here, that seems like a crazy strategy to me maybe there's something going on that we don't know i think it's also worth noting that benchmark just put $50 million into good eggs, which is my favorite service i use here in san francisco so i think the high-end two-hour delivery, beautiful packaged produce and food is going to be the standard now i don't know that walmart is going to fit into that standard. and this is a place where consumers are going to win so, i don't think it's going to be an anti-trust or a dumping product at a lower price and the government needs to get involved in this one. amazon still under 50% of e-commerce and e-commerce still a small portion of real-world commerce if you look at the innovation, that's what's going to win here. bezos and his team are so good at simplifying and innovating, simplifying and innovating and

that flywheel is something that walmart doesn't seem to be able to catch up with. >> scott, walmart is upping its ante they struck this deal to basically start automating the pick and pack process in terms of food delivery how does all of that and the moves forward in technology play into this move to cut grocery prices >> i'm actually bullish on walmart. i think they've done the best job of any traditional retail of getting off its heels. i thought jet.com would be the biggest write-off in retail history. for four or five quarters amazon was able to report incredibly strong e-commerce growth walmart has its mojo back. it's bifurcating into amazon/whole foods will serve the upper and walmart will serve everyone else. the grocery at walmart is shockingly good.

and promoter scores on grocery is fantastic biggest story in grocery will be amazon/whole foods because we're obsessed with it the second story operationally will be the success of click and collect from walmart if you can give someone those outstanding groceries without taking them inside a walmart, which isn't an outstanding experience, it's creative to the brand. >> from real goods to virtual goods, let's move on and talk about youtube, google-owned video service revamping its subscriptions, paid service to compete against apple, spot if i, pandora and others, what was formally called google play music. it still seems to exist in some part video subscription, youtube red. not sure why they called it that in the first place, is called youtube premium. you can get youtube music for 9.99, jason. you can get youtube premium for

a couple of bucks more at the same time, spot if i has 75 million subscribers. >> yes. >> apple just announced apple music. they have 50 million is google finally going to get this all lined up and stop confusing us with these different packages, with these different names and put a bundle together that people are going to buy >> no. youtube and google are a complete disaster at simplifying and, you know, we talked a little bit about amazon strategies always like to make something amazing and simplify it, make it easy to understand people at google are inkred icry smart and terrible at branding and packaging new product. it's even more complex than you put out there. youtube premium will go from $10 to $12 you get the sequel to "the can karate kid" for that money and then it's sort of like youtube's live music offerings

plus spot if i but then you also have youtube tv their over-the-air packages and bundling there google music will be depricated. call it youtube premium. charge me $15 and give me everything and stop making me think. they're making people think too much and that's what amazon prime is. give us $120 for amazon prime and we'll give you everything. there needs to be a google prime and apple prime. imagine if those two companies got their acts together and said give us $10 a month. you get everything the problem is that google has been always structured as nobody is in charge that's why we never hear from larry page anymore he's never talking to us, shareholders or the consumers. and everybody is in charge of something different and nobody can give you a straight answer at google. it's that obscureification that i think is damaging them on the product front. they have to make things simpler. that's what bezos has drove into

his team and that's why they're winning. apple needs to copy them and google needs to copy them and make that the best price. >> taking on a company like spot if i and how much of it about the video portion of it? for $2 more with this new subscription they're rolling out you get kobra kai and the music. >> you came off as so much more hip. i say kobra kai and can slip and break a hip. all the big players want that $180 billion back. this was a good day for spot if i and netflix. over the last 20 years, there are key things one, network effects, aging and reverse technology from a brand standpoint they've been mono brands how many brand offerings does netflix have one. how many brand offerings does

spotify have one. when they try to come up with a brand that's over reaching it's a good day for spotify in the midst of hearing that the government will restrain the acquisition of time warner of at&t with 130 million phone contracts, you have google with 2 billion preinstalled android device distribution. so any time apple or google put an offering on the most valuable real estate in the world, which is your phone, the competitors start shaking. apple music grew faster than spotify last quarter with a far inferior offering. anything google and amazon do, you have to take seriously but textbookcase study and what not to do. >> let's move on to instagram. ceo kevin sistystr hochlt m

confirming that they are rolling out time management tools. this reminds me of new york putting the calorie count on the menu it won't necessarily determine what you get to eat but, hey, here's what's in it. is this the trend of the future and should facebook get credit for pulling back the curtain a little >> you should give facebook and instagram no credit, you should not trust this company in any way. their entire reason to exist is to addict people to something that is fundamentally unhealthy for them the studies are pretty clear that this kind of addictionto social media leads to people having depression. you shouldn't put your kids on it. >> why not giving them credit for notifying people -- >> because it's window dressing. it's window dressing and it's reactionary to the incredible bad press they have for not even checking that people are putting

racist ads to try to subvert our democracy on their platform. they should be ashamed of themselves you should not trust them. the only sign you should trust them should be when they give you a button that says pay $5 a month for this service with no ads and no tracking. until they do that, they're the most untrustworthy company in the history of technology. do not let your kids use facebook or instagram. it's terrible for them keep them off social media. >> at least you didn't call zuckerberg castro like scott did last time. >> i like being on with this guy. mark zuckerberg is who you get when you replace -- the largest study on teens every decade by pew has shown the number of kids who see their friends every day has been cut in half not as much drunk driving.

that's great, because of uber, not as much unwanted pregnancy the reason teens aren't having sex is they're on their room in their instagram feed, envy spiral and depression is skyrocketing. >> envy spiral >> instagram, if you take the power combination of user community times engagement, instagram is the most powerful platform in the world. >> i'm going to play devil's advocate here and say the purpose of a company, any company, is to create a business that they're going to make money off of, right? i mean, why is it their responsibility to, i guess, police people in how much time they're spending on their products shouldn't that be up to the individuals who are actually on the products >> yeah, 100%. but as an individual who invests in companies or goes to work at a company you need to think

about what you're contributing to society and democracy and children and if you want to go work at a tobacco company, this is the modern day tobacco company it's not as serious as cancer but mental health is a very big issue and instagram has grown from 80 million five years ago to 900 million monthly active users, a very powerful company they don't take responsibility for what they do i think what you're seeing is society saying this company will not take responsibility for itself, so we have to have this discussion on cnbc, in washington, d.c. and in every household -- >> aren't they taking responsibility >> no. it's window dressing. >> by coming up with this feature? >> it's window dressing. >> it's like mcdonald's saying we're going to come out with carrot sticks, apple slices instead of french fry. >> yeah. >> give you real beef that -- yeah, you can say it's reactionary, but it's something, isn't it >> well, no. >> reacting to social pressure and maybe they get better. >> there are two types of

companies, ones that are marauding and don't care about the impact on consumers and the ones that do care about the impact on our society. so we can get rid of hormones in different produce and fish and pesticides and hey let's not have high fructose corn syrup. facebook is the high fructose corn syrup of the digital ecosystem. it's terrible for you. >> to jump on to the tobacco thing, there's no surgeon general that's going to write a report about mental health. >> a key component of the capitalist system is for-profit entities and their job is to decr create economic security for their stakeholders facebook is doing their job. the man in the mirror is the guilty party here. we're not doing our job. we're not electing people that hold these companies to the same standards that we've held every other company. when our mothers, our sisters and our daughters started dying

from tobacco, we elected officials that regulated tobacco. a better business model is for manufacturers to pour mercury into the rivers and they will do that unless we elect officials that hold them accountable. >> bingo. >> this is a failure in our citizenship, failure in our commonwealth and failure in our elected officials. >> i don't agree. >> facebook will continue to be a bad actor until we hold them accountable. >> you know what, though if you made $50 billion off of our beautiful capitalist and democracy here, you have a fundame fundamental, ethical and moral responsibility to defend the democracy and capitalism that made you the $50 billion. >> last time you were here, you said i own the stock i own the stock! >> i agree jason, you and i are brothers from another mother. i'm with you but i'm talking about the world we live in jeff bezos will continue to play the commonwealth and a man who has more wealth than the entir municipal budget of chicago is

still going to put his hand out. i do not see anything resembling the very appropriate and commonwealth, civic-like behavior that jason is outlining from big tech. i think it is our job to step in. >> what about apple? what about apple protecting our privacy? apple is protecting our privacy every day. >> we'll continue. jason, scott -- >> i like that guy. >> -- thank you. >> so glad. >> we never even got to tesla. >> oh, my god! let's go over time. >> when we come back, the cisco skid lot more from our cnbc interview with chuck robbins this morning. dow off the highs of 25. back in a moment

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look at you. this tech stuff is easy. [ whirring sound ] you want a cookie? it's a drone! i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. cisco reported earnings last night. we talked to chuck robbins about the year ahead on "squawk on the street." >> as you look to next quarter, i believe that if you look at the earnings per share that we guided and the revenue that we guided, it's one of the fastest-growing quarters we've had in quite a while and also, i believe that the eps next quarter is a record eps guide as well we're confident in the future and we believe in the strategy

frankly, we've just begun this journey on this intent-based networking and the first product we launched shows that our customers are adapting to that, they buy into it and we think that will be critical for the future. >> revenue, about the use of cash, about m & a, about how 5g may change the business long term. >> one of the biggest surprises to me out of the cloud and internet of things is how well intel and cisco have held up if you had asked me ten years ago what was going to happen, $17 to $25 intel was around five buck morse than that. they've been stuck in this range. cisco hadn't been above 34 bucks a share since the dot com bust can they get past and grow different businesses intel has done a slightly better

job telling that story but cisco still very much in it. >> the worst performer on the dow today. if you look at the round-up of analysts' notes, slumping service provider are being pointed to maybe the beat wasn't as big a beat or the guidance in line not bigger than expected it speaks to the fact that overall investors are getting much, much pickier about the numbers they want to see coming out of the tape. >> they've been up about 16% year to date. >> true. >> expectations are high. >> exactly. >> coming up, i've never seen anything like what has transpired here. that's what the judge in the cbs lawsuit case is saying ahead of his ruling today on the fate of sherry redstone's restraining order -- the restraining order against her. latest on cbs/viacom when we return stay with us

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well, it'sonce again.eason >>yeah. lot of tech companies are reporting today. and, how's it looking? >>i don't know. there's so many opinions out there, it's hard to

make sense of it all. well, victor, do you have something for him? >>check this out. td ameritrade aggregates thousands of earnings estimates into a single data point. that way you can keep your eyes on the big picture. >>huh. feel better? >>much better. yeah, me too. wow, you really did a number on this thing. >>sorry about that. that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

welcome back to "squawk alley. how hot is too hot that's what steve liesman is asking after the fed said it would tolerate an overshoot of the inflation target. >> how hot is too hot when it comes to inflation for the fed and what does that say about the outlook for interest rate frts fed? they've made a huge deal of saying 2% inflation target is symmetric. it was below 2% for a while, it will tolerate above 2% for a while. i'm going to walk this not one year, not two, not three four, five, six years the fed has been below it's 2% inflation target let me give you -- pc inflation since 2012, core pce, 1.58 neither of these numbers are 2%. hold on. remember those numbers for a second let's take a look at what fed officials have actually said about tolerating high inflation, about symmetry

j. powell, our new fed chairman, at times it may be above 2%, just as at times it may be below. our inflation objective is symmetric. how about charles evans? i don't think that's a problem for our symmetric definition what would it really take if the fed meant what it said remember those numbers we had before we ransom numbers for you. if they want to average 2%, the fed needs about six years of 2.7 on the headline and 2.4 on core pce if it really wants to balance out that six-year undershoot bottom line, a little overshoot won't change the outlook for rate hikes this year but the fed is unleakly to be truly symmetric, probably accelerates the hike if it overshoots. not very hot, probably plenty hot for the federal reserve.

jon? >> steve liesman, thanks. >> i have a quick question for you. >> go ahead. >> hi. suggesting that the method needs to be reviewed how likely is it that we see a review >> i think that's part of this whole thing. if we can get that chart back up, when you miss your inflation target for six years -- well done, guys in the back how is that hitting your target? i think there's a lot of thinking about rethinking it for a couple of reasons. one is what i just talked about. it's unclear what the fed really means by symmetric and guys like bill dudley told us that he thinks the fed should go to more of a range so it doesn't have this idea of missing a single target but put it within a range because it's very difficult to hit a big u.s. economy, $19 trillion economy, to try to get inflation within a couple of tenths ofa point is very difficult. there's a lot of support for what loretta metzer is talking

about, revisiting that inflation target. >> you laid it out for us well, steve liesman. >> thanks, jon nafta deal looming over the white house as the president hosts a trade delegation from china. our kayla tausche is in washington and joins us now. >> it's expected to come and go today, the deadline, despite from paul ryan that a full agreement must be delivered to congress by may 17th in order for it to be voted on this year. top democrat on the house ways and means committee told us his expectation of meeting that deadline changed this week. >> unless there's some engagement when i talked to bob lightheizer a few days ago, he indicated there was a reason to be more pessimistic about these deadlines. >> now focused on high-level trade talks with chinese

officials led by vice official leo ha who could be meeting with the president at the white house. presenting its own drama with questions over whether peter navarro will take part he will not be in the delegation we have learned, despite a source telling associates yesterday he's successfully fought his way back in one consideration in his exclusion, episode in beijing where he interrupted the chinese to say we don't need a bleeping history lesson, according to a source briefed on that exchange. others deny that, claiming the story is part of a coordinated shivving campaign by mnuchin who will seat important ground or intellectual property for a short-term reduction in the trade deficit. we should note, carl, reduction in the trade deficit is something that the president has been seeking.

>> what a story, kayla i'll be watching for developments from you later on today. markets are about to close in a few seconds in the uk and across europe. stocks moving higher led by the technology sectors in italy. two populous parties looking to finalize plans for a coalition ocado soaring after agreeing to take license to kroger ap moeller warning it could be hit with these and sophia vulgaria. willem marx is there. >> reporter: the digital economy, as is so often the case, the aswrenda hijacked by u.s. administration efforts particularly on trade. we heard pretty strong words from the european president

donald tusk. who needs enemies when have you friends like donald trump? he talked about them being capricious on that trade deal and angela merkel talking about what they wanted to see two weeks out from tariffs take a listen. >> translator: we have a common possession we want and then we will be ready to discuss reducing barriers to trade. >> when challenges threaten to destabilize the world the only solution is to join our forces to respond in one voice. carl, we've had a huge amount of unity from europeaners when it comes to trade, they're looking for permanent exemptions from the steel and aluminum tariffs and in one belgium prime minister, there will be no words with the united states under threat that message being being owed

again and again and again. >> willem marx, thank you. first such meeting in 15 years, being watched very closely. former trade adviser to donald trump, former n eer nucoo dan dimicco joins us

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good morning, everyone i'm sue herera here is your cnbc news update at this hour. congo's latest e bowla outbreak has spread to the city of mbandaka one sample proved positive it is 93 miles from bikoro where the owbreak was announced last week 34 cases have now been reported, including 23 deaths. the fbi says the investigation into a deadly building explosion in southern california has led to the arrest of a man on suspicion of possession of an unregistered disruptive device but has not yet been charged of that crime he was an acquaintance of a female victim. little bit of good news. it now appears safe to eat romaine lettuce.

any romaine lettuce on store shelves now is probably not from the uma, arizona, region so is unlikely to carry the e. coli bacteria and two servings of oily, nonfried fish a week for a healthier heart. salmon, mac krchlmakrel and tunl high in omega. so no fish and chips. >> just in time for lunch. thank you, sue. >> through go. white house hopes to broker a resolution to the ongoing trade zpodispute. there are ongoing tensions according to an article dan dimicco writes it stems from his belief that mnuchin is steering

them down the wrong path, policywise, with china, said a source familiar with their interactions i'll bet on the lighthizer, ross, navarro team joining us now, dan dimicco. >> thank you for having me on. good to talk to you. >> what should we believe about reports of this rift >> the news is always full of contradictory statements and i read the article this morning that bloomberg put out regarding axion's reporting that navarro was not going to be part of the meeting today and i saw a retraction so believe what you will whether or not navarro is in that meeting, he will have a

very strong influence along with lighthizer, wilbur ross and the president himself on this trade issue with china it's not going to be an easy negotiation. and there are going to be strong words, as there should be. this isn't about business. this is actually personal. >> actually personal what do you mean by that >> i mean it's personal to every american that's lost a job and the last 2 1/2 decades with trade and economic aggression, win at all costs attitude. >> do you believe mnuchin is a counterproductive voice in these negotiations is he dangerous? >> i have no confidence that the secretary treasury has any real experience on these trade issues his history does not speak to that and, however, i don't believe everything i read in the press,

along with everybody else watching to see how these things progress i can't believe the president will go back on his word to the american people and have anything but a very strong remedy with respect to the chinese. >> morgan brennan here when you look at these negotiations, one of the tric trickiest things based on years and years of criticism against chi china, we're talking about a country that has made promises of opening up trade and changing its policy notice past but the actual enactment of those promises and policies is a totally different story. how do you make sure that those actions are actually taken >> well, morgan, you have asked an exceptionally good question because you are absolutely correct, stating that china has yet to live up to any of their promises they've made over the years with respect to trade, in particular, they have not lived up to one of their commitments

to the wto when they joined. every time they say they're going to do something, whether it be production or anything else, it turns out to be hollow promise. the difference this time, morgan, is that we are ready to put in place $200 billion in tariffs penalties against the chinese if we do not get significant actions -- not words, actions and i believe the president when he says he will do that. and his team of lighthizer, ross and navarro is very strong i know them personally this is for real chinese need to stop what

they're doing. their 2025 program is another basically punch in the face to the american worker, the american manufacturer and to this country's ability to be a strong economic leader and global leader. >> and, dan, lastly, on the heels of a report that japan may be considering retaliatory tariffs against the u.s., in general, looking at how much prices of aluminum and steel have jumped with all of these stances on tariffs in recent weeks and months, is that policy working? >> let me make one clarification here pricing has been on the uptick for two years because we've won the cases for dumping illegally in our country tariffs have had minimal impact

on pricing except from the standpoint of wild speculation by a few folks not causing steel prices to go up all kinds of data shows it's been on the uptick for over two years. that's number one. the rest of it is noise. all this clamoring, chattering, the sky is falling listen, japan has been a trade cheater for decades. my own trade partner, nucor steel joined us in a trade case against his own countrymen because of the amount of cheating going on in 1998. we won that case so this is all part of negotiation. this is -- europeans are the same way we won't negotiate unless we get a permanent exemption. they're going to have to come to the table and make sure they do not allow transshipment of

undocumented steel and dump themselves into our market because they are pressured by the chinese. >> dan, we appreciate you helping us understand some of your earlier tweets today and talks going on in washington not the last we've spoken about it dan dimicco. >> we can talk all day, my friend. >> david faber is back here at the desk with news on cbs, which appears to have lost in its bid to block sherryredstone. we'll get to david in a moment meantime -- oh, you're ready phones down? >> i put the phone down, yeah. we take a look at cbs stock because it's down. we got the ruling we expected from the judge in terms of getting it he is denying that temporary restraining order. we talked earlier that some people may have misinterpreted this temporary temporary

restraining order that the judge issued yesterday the letter put out this morning constitutes the ruling on temporary restraining order. discussion of the issues would be more desirable, cho chancell bouchard said. the motion was denied and hereby rescinded. he has rescinded that temporary temporary restraini ining ordere issued yesterday, telling all parties to calm down best we can tell you, you may remember yesterday national amusements, the controlling shareholder of cbs and viacom for that matter, changed the bylaws via written consent, as it is able to do, to not allow the cbs board to be able to vote with a simple majority on whether to issue a dividend. on monday, recall, we got a request for this tro and a complaint to the court ask iing

for the right to and alerting them that on thursday, today, they would meet and issue a dividend that would have the effect of taking their controlling shareholders vote down from 80% to 17% and it seemed unlikely a court would go along with that, with the ability to do that they're planning on meeting at 5:00 today yesterday those bylaws were changed to require a supermajority, meaning they would have to vote in favor of said dividend in order for it to pass i think they're still planning on having that 5:00 meeting but the effect of today's order or the fact that they did get the temporary restraining order means those bylaws are in effect and they'll not be able to issue this dividend and, therefore, we're back to where we kind of were, which is sherry redstone

and leslie menendez are at odds of the composition of the board of directors and she is in a position where she can replace that board whether she chooses to do so is unclear. she had said previously or i should say national amusements has made it clear in their response to the complaint that they had no plans to do that many of my sources expect, of course, they are going to do that she will replace the board in due time and mr. moonvez as ceo and this attempt, some people saying, to blow things up entirely, will include blowing themselves up as well. >> we think this board meeting may be the last of this particular board >> i think it's possible, carl i don't want to read too -- again, who can say how things will go here i've tried to do a lot of reporting the last couple of days as to what may occur.

first and foremost, though, is that cbs has lost on this tro, importantly. i want to read the rest of it. we rushed on air here, make sure we haven't missed anything of particular importance this basically says there's no way they're going to that meeting today and going to be able to violate the intent of their controlling shareholder, as best you can say it therefore nai remains in a position to do what it want. >> and sherry redstone continues to write the rules this was like cbs attempting that break off, declare its independence, in essence, from national amusements, a controlling shareholder. these things rarely seem to happen in isolation. do shareholders of cbs, who might have agreed with les moonvez that putting cbs together with viacom under these terms wasn't good? is there any other legal effort

to try to stop what is likely to happen >> yes it's possible you could end up in delaware court on charges they're violating their fiduciary duty if the terms are unfair to cbs. though i heard there may not be a duty that the controlling shareholder has. that could be another argument, jon, brought into court at some point. the reason we're watching cbs stock sink, of course, is because we're back in the possibility or likelihood that a deal does, in fact, occur, or the controlling shareholder asserts their continued rights, as they have them, and has been at least maintained as a result of not getting that tro. >> really quick, 6%, we see 6% declines all the time. but for cbs it's the worst day in -- since 2011.

>> would not have expected that. by the way, cbs is coming off a very strong quarter. and the special committee of the board of directors rejecting the viacom deal made that clear that they feel there's been a cap on the stock and would appreciate it a great deal more if it was known to be and remained an independent company. but we'll have to wait and see what develops from here. again the national amusements camp and people close to it indicated to me they did not have plans to replace the board. they were relying in their complaint, of course, on what they said were press reports, rumors, things that were being thought about but there had not been any construct efforts made towards that it's hard to imagine this state of affairs will be able to exist any longer and, therefore, kind of what we reported weeks and weeks ago is a likely outcome seems more likely, which is you will get a replacement of the board of directors, as is the right of nai at some point and mr. moonvez having stepped down. >> the way this is playing out,

it could be a story on one of these network channels based on how dramatic it has been we want to bring in julia boorstin julia, reaction and what this means for the fate of both of these companies moving forward t this means on the fate of both of these companies moving forward on this news >> morgan, you make a good point, as stephen colbert yet and cbs has good evening dramas. and good tv too. i don't think this is the end of the story as david mentioned certainly likely with the board members. i think this is one of those issues that plays out in court over the next many months. i don't think is going to end right here i think the real crux is what's going on with cbs. you see cbs shares down 6.5% yesterday and today. we see a number of analysts

coming out trying to guess what's going to happen with the legal battle and the analysts thought that cbs was able to push away national amusements and able to avoid merging with viacom. and the consensus is that a merger with viacom would drag down cbs and would be bad for cbs shareholders so, i think it comes down to that question of fiduciary duty and whether the board members are going to see that the investor community does not want -- or at least the investors do not want cbs and viacom to merge. and that's why cbs shares are down right now the question is what les moonves and his team of lawyers can do with that information in response to the stock market >> julia, people want to start drawing big brush lessons from all of this. what does that say to the notion that one way we could see a similar situation of well-known

tech companies out in your area? >> well, there's been so much talk abdul class structures. you have companies like snapchat which are entirely controlled by the founder, namely evan siegel, at ceo and then facebook, the voting shares are dominated by mark zuckerberg and ifs, one of the shareholder advisory services come out today opposing some of the board members that mark zuckerberg had put on his board so, i think you're increasingly seeing this pushback to the controlling shareholders and it sort of speaks to the fact when there's one dominant shareholder for national amusements and stanley that has 20% of the votes and less than 80% of the ownership stake is going to be dramatic for the investor it's interesting to see how mar

zuckerberg responds. but as they can see that with this outcome that is not necessarily in their interests >> julia, thank you for your insight. david, i believe you have more now. >> just reading through the judge's decision, morgan as well, he basically said the plaintiffs, cbs demonstrated no irreparable harm and on with the legalese just trying to look here for the key reasons that he decided. and listen, many people, and i think there was some confused reporting yesterday because people may have saw that temporary, temporary restraining order as something that was going to remain in effect. or that he was going in that direction. but many people have said, a delaware court really negating the rights of a controlling shareholder would have been extraordinary. we do have a statement from nai,

national amusements, of course, again which is the 80% holder, or i should say vote holder of cbs and viacom a 10% economic holder. they say we're pleased by the court's condition. and to deprive a shareholder of its fundamental voting rights. the court's ruling indicates a vindication to protect rights. as the case proceeds the absence of cbs and express committee come out and share no regard to proposed risks we'll see where we go from here. >> the plot thickens now, i want to bring in tom rodgers. the executive president and former of tivo tom, great to have you >> thanks for having me. >> so, i want to ask the les

moonves question, just hours ago, he got a standing ovation at the upfronts. he's been basically fighting for the control of the destiny of cbs. he's lost at least one major battle in this boardroom war is it over between sheri redstone and les moonves, and what does it mean for programming management which investors have to live with if they hold on to the stock? >> well, i think you got two separate questions there, one, can les go back to work and work with sherry. and is that as a practical matter, going to be broken in a way that you can't put it back together and then you have the separate issue of, okay, i think we're making a little bit too big a deal of this court decision. it really would have been extraordinary if a court had ruled you could that easily

strip a controlled shareholder of control but that doesn't answer the question of whether cbs is going to remain independent. relative to a viacom merger, which is really the position that les has taken and i have not lost any confidence based on the court's decision that he may still win that battle. and i say that because i think it is extraordinarily difficult now for a merger to be effectuated when you have a vote of the independent committee, unanimously saying it is not in the best interest of shareholders a controlled shareholder can do almost anything. but when you're talking about self-dealings between two companies that a controlled shareholder controls and they're both public

companies, the fiduciary issues there are going to be extreme scrutiny and the evidence of a unanimous vote by an independent committee that reviews this, include something board directors that were appointed by the controlled shareholder, it gets really hard to suggest that there's evidence here that it'sed in the best interest of the companies, based on poor business judgment. so whether he and sherry can go back and work together is one thing. whether cbs remains independent of this merger, i still have some confidence that it will >> so, tom, you're suggesting that a merger doesn't go through regardless of the outcome today and how this is playing out. what happens then for both of these companies? how do you see their future unfolding? >> well, you know, the drama here has obscured some of the underlying fundamentals we're talking about. and i think why the cbs

directors have had such a hard time accepting the notion of viacom being brought into cbs. you know, the key profit center of viacom are the children's channels, nickelodeon and its family of channels you're talking about kids program network viewing overall as a sector down 50% in terms of ratings in the last four years and in the last quarter, against that base, they're down another 25%. i mean, this is worse than a melting ice cube this thing is really going south. and i don't think there's any management change or structural change that is going to deal with that underlying industry issue. kids are watching netflix. they're watching youtube they're playing games. they aren't out there watching these channels the way they were and so, that's a hell of a difficult situation to hoist on a company where network

broadcast television as a whole has its own issues so, i don't know, cbs, obviously, has a much better game and much better hand. and i think once this settles out, i think cbs will begin to trade, as if this merger won't happen because of the reasons i stated before in terms of the independent committee vote viacom has got to do that any to look at it >> tom, you're giving us a nice picture just how many layers there are to all of this by the way, today is the upfront for the cw sum in attendance were tweeting that moonves was there and left as this statement was coming across >> cbs said the company is committed to protecting the best interests of cbs stockholders. today's rule did not underlie the commitment of those to continue to act as cbs

shareholders it may recognize that we bring legal action to challenge action to national amusements that we consider lawful. saying they remain confident that they will prevail in the lawsuit previously filed by cbs and members of the special committee. they go on to say that the board will go on and hold the meeting at 5:00 p.m. today to consider declaring a dividend of shares in common stock which would of course, dilute the control of sherry redstone, national amusements, it's unlikely at this point you see the shares down 0.5% >> julia boorstin, thank you for that >> david edleman, i don't think you're going anywhere soon >> yeah, we're doing more reporting on this. is tom still there tom, still on the phone or did you leave? >> i'm still here. >> i understand the idea o