we have inflation coming you're not worried about that? >> i don't think you're going to get, like, a worldwide systemic problem. >> okay. >> and if inflation goes up, the cost of elon musk -- >> correct something to think about. >> some inflation is okay. >> all right make sure you join us tomorrow michelle, thank you for being here "squawk on the street" begins now. good wednesday morning welcome to "squawk on the street." coming up this hour cigna david cordani responds to carl icahn what a morning between disney,

tesla, s&p is trying for a sixth day up but futures are red. so is europe ten year below 2.98. the shorts getting smoked. elon musk tweets he's considering taking tesla private. shares did pop we'll see how the stock opens this morning plus, disney results were a bit of the miss. the studio and parks business soars. investors pressing bob iger. we'll fill you in on his answers. >> and snap sorars and comes bak to earth many earnings movers to get to this morning tesla shares pulling bag until the premarket after rallying late. jump sparked by the midday tweet from elon musk saying he's considering taking tesla private. musk later issued a statement saying a final decision hasn't yet been made.

a reason for doing this is about creating the environment for tesla to operate best. as a public company. we're subject to wild swings in our stock price that can be a major distractions for everyone working at tesla all of whom are shareholders pretty wide range of reaction from the sell side today including jpm saying it's a statement. the ceo of a public company, we're going to fold. the possibility into our evaluation. >> look, i think it's entirely possible that he meets with the saudis you have to think maybe elon needs the must be. i'm sure in a conversation they say you want to go private if elon doesn't dump from what is clearly a pump, then i think the fcc is unlikely to go after him. it reminds me very much of -- hoping that the government will

get involved against herbalife this is a pretty -- let's just say it's pretty tough fire just lit under -- >> it's abhorrent behavior from a ceo. >> i know. >> james murdoch -- >> james murdoch. >> you think they knew about this >> no. i'm saying -- >> i wonder. because typically if you were actually thinking about doing something like this, you go to your board your board sets up a special committee and they immediately start a process not to mention they put out an 8 k. none of that happened here i don't know who the general counsellor is at tesla this is a side show from the main course of whether or not you can actually e mass the funds necessary to take the company private. i haven't talked to anybody who would be in the business of financing that thinks you can. but there are disclosure questions here, no doubt. >> how about the bonds bonds traded up. you have to make the bonds

whole. and people believed it bonds were going down. i think the bonds are better judged than the stock. he rolls in 20%. you're taking an $80 billion deal, roughly. i think you throw in the debt in there already. >>ive -- i've seen 88. >> all right. >> okay. but the point is, you still need $60 something billion in equity or debt. unless masa son is starting a new vision fund and wants to give two-thirds to writing an equity check or a debt or a facility where you don't have to pay me back for ten years. >> david, you know, he says he has the financing. well, look, okay

he's an illusionist. but it doesn't matter if it he has it and you're short the stock. >> he thinks you're a simulation. >> 50% simulation. but brian said it was only less than 25%. >> a senior banker said this may be the most unlboble company ever. >> wow. >> it doesn't generate any to pay down the debt or the interest. >> richard burnstein thinks it's bad. wait for the lbo stockholders who can seize your assets if things go south. >> yeah. >> it was going to go down and then they got a bid to 72% premium. >> right everyone thought it was ridiculous people loved the keurig. i use it every morning people love tesla. >> you're arguing somebody is

going to buy it? if you want apples to apples, who is going to buy it >> guys -- >> there's all sorts of money. >> a statement from the board. last week elon opened a discussion with the board about taking the company private this include the discussion as to how being private could better serve tesla's long-term interests. and address the funding for this to occur the board has met several times over the last week and is taking the appropriate next steps to evaluate this. this is a statement from members of the board, including denholm, and james murdoch. >> there you go, david they heard you. >> i'm glad they did nothing in here about what the next steps are, as we said, of course, typically, for example, dell, one of the largest lbos of all time with an owner who rolled in and a partner in private equity immediately set up a special committee. the first we heard about it was through that i don't remember if were leaks

of the responsibilipossibility . everybody got down to business and you went back and forth. we'll see what develops here my main question is regarding funding. i cannot imagine what that word means that i have secured funding. or those words mean. because they don't mean what i would take them to mean. i don't think. >> no. it seems fanciful but it is, if you say something like that, it's a lie then there are consequences. >> they say in this press release address the funding for this to occur. they've had discussions as how big private would better serve tesla's long-term interest and address the funding for this to occur. >> you know -- >> i don't know what that means. >> if that's true. >> you can address the funding by saying i don't think you can get the funding. >> assuming this is, obviously, if the board statement we take it for what it's worth morgan stanley said if it's true why would you announce it in

this way >> i think the man is obsessed with the shorts. david, he's got steve who is a totally real director. that's a person on the board james murdoch could be i think that a lot of about lyndon johnson rice, you know, of johnson publishing. he could get musk on -- they're probably related. >> probably. >> it seems fanciful but the man loves to tweet like our president and he says a lot of things like our president that are emphatic emphatic. >> does this statement read to you like funding is secured? >> i think he's david blaine i wasn't able to figure out how he was able to sew his lips up

and have the king of spades in his mouth when dr. oz cut it. >> there's not a scenario in which you can model out an lbo and where it would work. unless somebody is cutting him an equity check for the whole thing then they would own it then he would be selling it somehow. >> i think there's a 50% chance there's a simulation you don't understand -- [overlapping speakers] >> just so you know, you're not the only one [overlapping speakers] >> that's what this is about, right? >> yes it reminds me of what bobby kennedy said i'm dating myself here get hoffa's squad. >> you get the shorts by executing. >> oh. >> either that or force pattern recognition where you're afraid

to be short for reasons that are right or wrong right, jim >> exactly. >> yes, that's right. >> ai, machine learning. >> can i tell you, i talked to a number of large hedge fund managers who shorted the stocks for the first time after those tweets. >> yes >> what did they think about the bonds? >> this is the time. >> 5% bonds? >> i don't know. >> why don't they short the bonds. >> i don't know. i didn't ask i will i'll follow up with those questions. >> there's the argument being made by a lot of shorts today that elon versus the shorts is a better narrative for him than elon versus mercedes, elon versus porsche. >> i'm going to leave that to scott who did akman versus the shorts we need a chronicle of this. i loved that statement by chanos however the stock is going up and not down what chanos needs is sellers he needs the government. the government is silent.

>> yeah, what will they do here? what's the violation >> he has to sell. he has to sell. >> the fcc is looking to see if he ells. >> yeah. >> if he doesn't sell -- okay. let's play devil's advocate. i'm the saudi sovereign wealth fund i'll write you a check and what does he say? no go buy the open market why didn't he take the check if he was so desperate? >> what would the check be for $2 billion. >> to buy new so he would issue new shares. >> he said he didn't need the funding on the conference call the saudis were willing to buy it for $2 million. he said go buy it on the open market that doesn't seem desperate to me. >> are the saudis willing to give him $60 million what are they into the vision for? 27 or something.

>> you don't have to buy the whole thing. you can do a tender of sum. >> then what you have a public entity then you're a public entity. we want to be private. you don't want to deal with the shorts sales and gmarkets and th conference call again where you have to deal with the ridiculous analysts. >> i had to laugh at the tweet yesterday regarding the saudis and tesla. how does the old wall street saying go? you always want to lose money on your hedge this is what this would be. >> yeah. >> remember paul jacobs is trying to lbo qualcomm. >> that was fanciful. >> maybe they can get together. >> get together and lbo both companies and create a giant antonymously electric powered phone. >> you're calling elon musk a liar you did this you couldn't find anyone. >> i've been doing this a long

time i'm not saying it's impossible, because there are always new interesting structures that bankers can come up with but it does seem to be somewhat fanciful, to use one of your words. >> harvey pit was on in the last hour and asked what he would do if he were at the fcc. he said i would defer to those in enforcement and called the tweets problematic and said there's enough for people to ask questions. your point, it's not a violenato if he doesn't profit from it yourself. >> if you have an engaged prosecutor in enforcement, you can -- remember, it's about exposure. >> completely irregular. the whole thing is irregular we don't know about it nothing. they're talking about this for, what, about taking the company private for how long >> how about if the saudis did

say to him, you want more capital? and massa son says you want more capital? what happens if that happens >> well, that makes sense given the timing of the ft story and his tweet. >> yeah. >> the gentleman was on this morning and it was a very, very solid reported story it came -- this saudi deal came and he did his thing to me it's a one-two-punch if he said i wanted to i could we had people on-air who were shareholders how much money do you need how much money >> i think you're a simulation. >> by the way, i've got the report in front of me, too want to see the report a lot of big people on that. >> yeah. we should point out not all the board members signed that

statement. we haven't touched does my or snap or any of the other names today including cigna. david cordani will join us take another look at the premarket. s&p going for six days up. hasn't done that since -- five days up hasn't done it in six months back in a minute at fidelity, our online u.s. equity trades are just $4.95. so no matter what you trade, or where you trade, you'll only pay $4.95. fidelity. open an account today.

disney is down at the premarket but not as much as last night the company spent more on programming and technology saw another drop in subscribers at espn as the company is on the verge of buying those fox assets and gearing up to launch a new streaming service in late '19. bob iger last night. >> we're going to walk before we run as it relates to volume of content. because it takes time to build the kind of content library that ultimately we intend to build. we feel that it does not have to have anything close to the volume of what netflix has because of the value of the brands and the specific value of the programs that will be included on it and the price, by the way, will also reflect lower volume of product as will, by the way, the cost of reducing and owning all that content. >> talked about the possibility of bundling some of these

different products like hulu and the main disney product, as well. >> look, i thought it was a compelling conference call the stock was down a couple before it started. i liked about what he had to say about espn plus. and what he basically said what david has been saying there's been a moderation of decline espn plus he said is better than expected which begs the question what was expected because it was his own expectations but, you know, i was positively inclined i care more about the future there's a moment toed in the ca here is where we have coming out next year. and then repeats them. just in case people missed it. i think he was trying to change the narrative here he was talking about movies. he was talking about espn plus and the future and those who are focussed in the past are doomed to repeat themselves and continue to say that the stocks aren't worth buying as it goes higher.

>> you know one of the interesting things, also, he clearly states the launch of the direct to consumer products at the end of '19 is the biggest priority of the company during calendar 2019. we'll spend a lot of time talking about that coming launch, which is more than a year away. >> lab tech was mentioned in the first three -- >> early on. he's talking about the notion of the platform if you put the platform on these new screens, hd screens for your computer, you're talking about a huge number a huge number of things you can watch. he also talked about 200 football games he has. so i thought he spun a great tale the stocks rallied ahead of time made it so you had to have an unbelievable tale and you didn't get that we didn't get hard numbers on espn plus. but i'm taking bob's word for

it. >> that's what >> 200 college football games. >> that's a good point the stock rallied over the last friday and monday. >> i reiterate it goes to 123. >> cramer's mad dash in a moment don't go away.

six and a half minutes to go before we get started trading here at the nyse on hump day.

>> i was enthralled on the papa johns call it's amazing because the new ceo is talking about inexcusable comments the question is the worst behind them now i could argue that the 10% decline in july, which is the bad month, and then the guidance of going forward to minus 7 to 10 could mean that it is behind them the problem is that dominos is taking advantage what is going on. >> weren't they tripping -- >> remember they have great international business but one thing i would come back to is papa john himself he's not going away he owns 29.5% of his stock a quote from him immediately after the conference call he said i'm not going away.

>> means what? >> yeah. he issues a statement right after the conference call. he said they're trying to deflect. i'm not going away. >> my mother was angel but they never wrote a book about her >> we know what happened. >> what happened >> he went away. it's onlyicoming up. it's an anniversary coming up. we have an opening bell coming up. don't forget cigna's ceo will be on he'll respond to carl icahn's objections regarding the deal to require express grips.

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♪ ♪ each day, brings new possibilities. that's why you need a partner dedicated to helping your company reach its goals. u.s. bank -- the power of possible. the opening bell is sponsored by u.s. bank the power of possible. you're watching cnbc "squawk on the street" live from the financial capital of the world the opening bell set to ring in 90 seconds a lot to get to. we're working our way through it we got through tesla and disney and papa johns this morning. haven't touched on trade the u.s. is finalizing plans to impose 25% tariffs on $16

billion in chinese goods going to start on the 23rd of the month. this is the second under section 301. chinese have already announced plans to retaliate on things like u.s. coal, oil, cars, bikes, some medical products >> yeah. >> they do a lot of products for china. these are things that are beginning to hurt the chinese. obviously, showing they can take a lot of pain. today no articles about apple. does apple trade back up >> i don't know. >> it's incredible i mean, bikes yeah i've been trying to buy an american bike for ages i bought a brooklyn bike i don't know if it was made in brooklyn. >> interestingly china july trade data up 12.2.

[ applause ] [ opening bell ] >> do we have a restraint on their ipos >> i don't know. listen, you know, i thought the nxp qualcomm decision or lack of decision would be a larger impediment than it seems to have been even in the broader market but certainly in the relationship between china and the u.s. i guess that was not a correct read

hear mhis priorities. >> i think that's an important

thing. obviously the discussion but it does beg the question of how can only stocks be going up with a president who is against -- again, he's going after drug prices a lot of people feel that express grips keeps the price of drugs down the president hasn't indicated which. with the hmo have been extraordinary under president trump. that's almost counter intuitive. >> the president did say apparently last night at the dinner with business leaders that he would have an announcement next week on drug prices but they could come down really, really substantially also said he thought gdp for the next quarter could be in the 5. >> the 5s? >> as in 5%. >> the fives the fives? >> i don't know which is more likely i have secured the funding or we're going to have gdp in the fives. i don't know. >> i don't know. they both tweet. >> they do, indeed.

>> of course yesterday we spent a good amount of time discussing carl icahn nonetheless trying to argue and marshall shareholders to vote against that deal to acquire it. the vote is coming up on the 24th of august let's bring in david cordani the ceo of cigna the man who authored the deal. we're going to play defend your deal, david. we're happy to have you this morning. you put out a long letter yesterday on this subject. mr. icahn says he has no idea how you can be doing the deal. it's ridiculous. what do you say? >> we've been consistent the combination presents an

outstanding affordability. everybody from the president through corporations through individuals approve the affordability. cigna and express individually are functioning very well delivering very low medical costs. and the combined company will further improve affordability. cigna steps farther with a goal to deliver medical costs at a cpi level by 2021 and we're delivering the lowest medical cost in the industry it's about creating value for customers and clients. and as a result, delivering value back for our shareholders and we're committed to this really attractive strategic and financial combination. >> yeah. mr. icahn was talking about a number of things that are fairly complex in terms of rebates and policy but the timing is good here because i want you to go try to explain, at least, to our viewers and shareholders last night i guess there was changes

to medicare part d the practices used in medicare part d. >> the headline it's good. and from a macro perspective, the commercial market has been using a variety of mechanisms around formulary coordinating therapies, et. cetera. what the secretary stepped forward and said it would be a good thing for the medicare programs for the proven capabilities, for example, that express grips does quite well to be afforded to the medicare program with the objective back to the first point of aimproving affordability with tremendous clinical quality the statements yesterday afternoon we agree with. we view them as an evolution to the marketplace and the combined company is in good position to be able to perform and deliver

more value in that case for medicare beneficiaries through approved affordability it's using proven commercial solutions for government programs who prove affordability and quality. >> icahn said instead of buying express you can do a multiyear partnership. that would be better than buying them and taking the risk therein. why is that not something, perhaps, you would have explored or considered? i know you had a multiyear partnership a number of years ago. give me some sense there as to why that wouldn't be an appropriate avenue. >> sure, david so, first, we're a company that does believe in partnering in a broader sense, we partner quite effectively, for example, 500 physician groups and hospitals around the united states to coordinate and deliver better value and care. we get the concept of partnering more broadly, relative to the con bin nation

it's more broad. there's a set of capabilities. there's a tremendous distribution expansion capability cigna overlaps with 10 to 15% with express grips commercial plans. and importantly, what is being proven now is the integration of data to work more effectively with the practicing physician the benefit of our patients or customers presents an outstanding opportunity to improve affordability, quality, and service. we see it as a strategic reformatting and repositioning opportunity. beyond that, mr. icahn suggests what cigna should do is sit on the sidelines, allow the marketplace to shake itself out, and buy back our stock we don't believe that is a strategy we believe that's more financial engineering and we're attuned to delivering outstanding shareholder value. we delivered it in excess of 38

0% tsr we're used to it but we do so by working in the marketplace to create value for our customers and clients. >> all right jim cramer you know i'm a huge supporter of cigna. it's been a remarkable stock if you stayed independent, if i look at the cvs numbers today and how great their pharmacy benefit manager is, you have a fantastic manager. i'm not saying that the combination could be long-term ting is. but your stock, i think, i could argue would be a 200 to 210 based on what cvs is saying and united health is saying. how do you deal with the fact that would be fabulous performance? >> so, jim, good morning thank you for your comments. we've delivered great results. our 2017 results were off the charts top. line, bottom line, we delivered the best medical cost trend in the industry in 2018 will be the

sixth consecutive year we have a strong foundation and we're delivering for clients and customers as we grow our business we're proud of that. secondly, we view our stock as temporarily dislocated it's a phenomenal value today and we're confident we're going to grow the value over time. the difference is this combination presents an opportunity for immediate value creation in the first year we don't have to wait three or four years excludeing the known transitioning clients. exceptional free cash flow six plus billion dollars in 2021 but cash flow in the first 18 to 24 months and still have significant capital to deploy even in those 18 to 24 months for additional shareholder value. we agree with you. our company is high value. our company has been performing quite well and we're confident in our ability to create tremendous shareholder value, but having these capabilities to further

improve affordability to take our country to a sustainable level with a partnership with the physicians and broadening our reach to address the marketplace and drive growth, that's attractive to us. all while delivering that outstanding shareholder value. we don't have to wait three to five years we'll deliver it in year one. >> have you talked to icahn? did he get in touch with you did you have a dialogue? >> we're disappointed he chose his means of communication was an open letter. >> situations like this can be important. can you characterize how your conversations have gone and the arguments you made there and what your expectations are when they come out on friday? >> strong governance is an important of iss looking at.

we had good engagement to walk through the strategic rationale, the governance framework the evaluation framework and the value creation framework including the mitt gants to with the changing marketplace and the regulations around the market we're confident in terms of the shareholder value creation we're confident that iss understands the shareholder value we've created over the last eight plus years. we have a good open line with communication with them. and, finally -- amazon and everybody runs for the hills carl uses it in his letter mr. icahn. the competition you expect here from amazon forming in terms of what it will mean for this combination. >> there's no doubt the marketplace continues to go through evolutionary change at a

minimum. we've continued to invest heavily in innovation. we've poured about 3/4 of a billion dollars into our technology, capabilities, et. cetera to broaden our direct to consumer reach, our partnership capabilities with a physician community and health care professional community as it relates to amazon, it's another example of change in evolution. they're entering the mail order pharmaceutical fulfillment we see that. obviously we anticipated that action our a company is able to create better activity for a individual or patient with their physician to enable them to either maintain their health, lower their health risk, 25% of americans have high health

risks. and then getting the best acute care we see this in as a changing marketplace. we're well position the and even more effectively positioned to deliver value to our customers >> we will leave it there for now. we appreciate you lending your voice to this debate this morning. we'll, of course, await the outcome of the shareholder vote a little more than two weeks from now thank you. ceo of cigna. >> huge supporter. i think that stocks is higher. it doesn't matter but when he speaks he's not speaking to the point of view of this board. he's done a great job at cigna i'm a believer i had him on and questioned it i was unsure because i liked cigna stock. it's not going to hurt it. it's a combination. >> all right probably haven't heard the last of it. >> we don't have a lot of time

that's another part of what has been a curious move here. >> yeah. no dialogue whatsoever with the company. we'll see. >> yeah. >> pretty flat open. dow down 25. we'll get to the bond pits. >> good morning, carl. treasury rates and the dollar index pretty much highly unchanged. but where they're perched are loftily levels look at one week of tens there's been a downward drift. not many basis points. look at the chart starting in early may, we're still in a tight range. we're still trading right around the midpoint of the closing yields for the year thus far we have a 10 year note auction today. maybe we'll garner a 3%. we're three and a half basis points away. we have to wait to see i don't think it's highly likely but you never know there's so much control in the

fixed income markets what is interesting about the 1% level. 1% for the 40 year and that hasn't been seen since early in january. if you look at what is going on with respect to the currency side of the equation, on the dollar yen, the dollar is very close to a one month low and year to date of the euro versus the dollars shows something fascinating, as well the dollar index busted out hovering at a 13-month high. the euro versus the dollar which is a significant portion of the dollar index can't break under the may 29th low you see on the chart. right around 115.40. traders are assuming we're going to stay in the range it will be fascinating to see if it does. finally, on the pound versus the dollar, a fresh one year low of course, that comes after mr.

carney's tightening up a little bit. maybe too little too late. we'll continue to monitor and a fresh batch of 10 year options we'll be covering. back to you. >> yeah. one of the biggest thank you, rick. match group among the big gainers. ceo will tell us what is working of online dating sites including tinder dow is down about 40 back in a minute

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time now for jim and "stop trading. >> a lot of questions in social media over after what happened to snap. notice facebook is up. i would point out that the problem with snap is that after the close, prince allawi came

out and said that daily ampverae users are down those are the twins, you want to have both engagement up and daily average users. and that's why facebook stock is down >> 1 plus 1 is 11. because a key block, there's a lot of use we didn't get to in the morgan stanley piece, saying it's going to get bought, maybe. >> coors, accessories are incredible wendys winning the burger wars, and that's because she likes the

baconator. >> what's on mad tuonight >> i don't even know remember, musk apologized. >> he's just a simulation. >> yes, exactly. >> jim, we'll see you tonight, "mad money," 6:00 p.m. eastern when we come back, former chrysler ceo bob nardeli will talk about musk with the dow down 44. to find the best deal on the right hotel for you. tripadvisor.

good wednesday morning, welcome back to "squawk on the street," david favor here at the new york stock exchange. busy morning, whether it's disney, tesla, snap, oil down by the way, a buck and a half wall street is buzzing after elan musk talks about taking the

company private, could he? should he? plus cordonny response, the cigna ceo joins us after carl icahn takes aim at his scripts >> elan musk suggesting he might take the company private for $420 a share four member members of the board issued a statement just this hour >> the independent members of the tesla board issued a statement this morning providing a little more clarity to those tweets and memo from elan musk yesterday. the board says it was musk who began the discussion last week about taking the company private. the board has met several times over the last week and is taking the appropriate steps to evaluate this, they said the statement was from six of tesla's board member, asidejerge

the only ones that did not weigh in tesla is up 4% in more than a week if tesla really wanted to go private. > -- why announce it in this way? musk said yesterday in a tweet that he had secured funding for a buyout that was considering at $420 a share that the saudi southern welfare fund at taken a stake? would this buyout work tesla's cash flow is negative, they could do some sort of equity backstop, but they would

need partners willing to write big checks here. it's not impossible but the structure could be complicated in that it would require many of tesla's current membership giving up their rick quliquidits and making for a very convoluted ownership. >> joining us from los angeles, true car's ceo scott painter, currently the founder and ceo of pair i don't think you take issue with the way leslie framed it? >> the question is what about that equity backstop how would that work? you take the existing shareholder base, you create that private structure that leslie was mentioning. the other is you get a strategic investor, like a softbank, and

the third is you get some sort of private investor, you get some wealthy silicon valley guys, the saudis could buy them out. look at the five largest shareholders in tesla, you've got elan musk at about 20% t. rowe price, 9% stake. fidelity, 8.2% and ballie gifford, 7%. and tencent, with a 4% stake >> look at the sovereign wealth funds that are out there, there's a lot of money sloshing around out there, norway is a trillion dollar fund, china investment, this is a mean one

for china. it the goal states have multiple investment funds, but abu dhabi with 683 billion, and saudi arabia has $250 billion. so you could potentially put something together in that the top five existing shareholders stay in, and then you get some sovereign wealth fund manager, maybe they take a bigger stake >> there couldn't really be debt because there's no way to pay it down or ebita. musk would roll in and have --

>> scott, we have tweets to go on and a board statement, and i'm reading from a jpm report this morning, either funding is secured or it not secured and tesla's ceo says funding is secured. scott thoughts on that >> well, you know, i think that it's a pretty interesting time to be in the automotive industry and really the idea of taking tesla private is a very, very straight forward concept that will free up the company to focus on getting to profitability. right now the overhead, the time and average that's spent being a public company is a distraction for the company. and there's other companies that look like tesla a but keep in mind, tesla is a remarkable, just record breaking company, it's generating right

now about $16 billion in cash flow, but it's got a five-year, 90% compound annual growth rate, compared to other automotive companies. it's doing something that nobody's ever done before which is producing an affordable electric car for the masses. >> i wanting to talk about this idea of taking tesla private, you just heard the conversation that's been taking place on the set. when you say straight forward, what do you mean by that could it be a leveraged buyout or something else? >> you're going to have a lot of turmoil about this, because tesla is one of the most shorted stocks period of all time. but the reason that investors are shorting tesla has nothing to do with the fact that's the

la -- the shorts and the detractors are really betting whether or not that's the la can pull it off. as a former ceo, i can tell you that the idea of being able to operate your business, especially when you're in hyper growth mode and getting to mass production scale, is really a huge challenge, why complicate that with being public the process, the actual process of going public would need an anchor investor. and the world is capital and the world is actually looking for a hyperactive company that's bringing in too much money >> they had the variability that that have had to fuel the growth you're talking about

how much stock have they sold? >> being a public company is about access to capital. and so at the time that's the la went public, that was the right phase in that company's growth we are absolutely in a very dynamic time, especially in the automotive industry. i am running a company that's a little ore two years ago, we have a billion dollars in debt and eequity. tesla has always been a bet about the future and whether or not -- this is going to be how people get around and whether or not they adopt electric as a power trait. >> one of the things that elon musk tweeted about yesterday there's a lot of retail investors in tesla he pointed to fidelity, and that there are fidelity funds that are involved

space x. >> this is a guy who's putting people on mars in the next 20 years, this is a guy who has turned the private space program into a real reality. this is a guy who's digging underneath los angeles this is one of the great visionaries of the century, 50 years from now, they're going to be writing story about him like they write about ford. and they think he's going to change the world and you might short tesla, i would never short elon musk. he might have a shot at pulling this off >> i would never not short elon, even the shorts in tesla, are not shorting what tesla is doing or even it's long-term potential. they're really shorting the gain in public. whether or not that capital exists on whether to go private, it would allow them to streamline for example, spacex would be a public company.

it's biddi ibuilding rockets, a certainly there's a high degree of uncertainty there, but the potential for there to be a payout is there, and we have enough private market and enough large format investors which means that being private is straight forward, but going private wouldn't be straight forward at all >> elon musk may be the reason he may be able to pull it off. he may be able to cobble together this vast store of mets -- methods >> we have never seen anything like elon musk that's my point. >> i think of ross gerber on "power lunch" just yesterday who do agree with that >> stock's are up. thank you, guys, what a story. disney shares are falling after the company reports an

earnings miss. julia has been digging through tho those results and she has more >> disney's revenue and earnings growth sent the stock lower. revenue increased by 20%, largely on the success of an infinity war those are two of marvel's acquisiti acquisition. ig iger focused on his next >> substantially grow our portfolio and bring our products to market -- the reason the organization of our company supports this ambitious vision in part by allowing the brands and franchises and executive and

creative talent from 20th century fox. >> disney went from green to red yesterday during the call when iger said they have seen noticeable improvement in subscriber losses, saying that's due to the growth of digital tv bundles. much of the call is -- iger outlined how fox's brand will help the disney streaming service, of which hulu who owns 60% better compete with disney and netflix. he did say conversions from free trials to paid subscriptions are strong and exceeding expectat n expectations iger said that in this time of brands and consumer choice, there's a lot of emphasis -- >> disney not getting as much attention as usual because of

the tesla story. still ahead, a look at the big earnings movers of the w'rning, papa john's and snap. dos down 38 on this wednesday, "squawk on the street" will be right back i get it all the time. "have you lost weight?" of course i have- ever since i started renting from national. because national lets me lose the wait at the counter... ...and choose any car in the aisle. and i don't wait when i return, thanks to drop & go. at national, i can lose the wait...and keep it off. looking good, patrick. i know. (vo) go national. go like a pro.

the company's dating app tinder growth in paying subs, stock's up 40% so far this year. joining us here on a cnbc exclusive is mandi ginsburg. >> and tinder subs up year on year, how did that match with your expectations? >> it's certainly a good day to be in the love business. we have $800 million in revenue for tinder this year so things are firing on all cylinders when we talk about the guidance >> talking about whether or not facebook would launch a dating app of its own, is this a sign that even if they do, that tinder has enough of a lead? >> we think we're set up pretty

well between tinder's growth and the record growth of our portfolio, nothing we have heard changes our view that we are in a great position and when you think about it, i just don't think a 22-year-old is going to say i'm going to stop using tinder and start using facebook dating. >> mandy, is it still just focused on millennial's, or do you see it expanding into other demographics as well >> the vast majority of our users are people in their 20, and one of the features we're launching next week is tinder on university campuses. we have always had a strong presence on university campuses, but we think it really invigorates college campuses, by providing tinder where you can really access the wider audience

and you can access just your campus and campuses near you we think that's important in keeping that momentum alive in these college campuses >> so facebook launches a datingdating app, what about match or okcupid, which maybe you're targeting different demographics >> match is the number one brand for people 20 to 50 and it's a -- so the notion that facebook launches a dating app profile, it could open up the market for us as well >> talk to us about university, what's the point of the product? >> well, they're about 20 million students, and that's

just the u.s. alone on university campuses. so think about 4 million or $5 million students m s articulate every year and they're starting friendships and relationships. there's a lot of reasons for people to come back and keep using our products, we think they'll get a lot of value as a student, but when they graduate, we think they'll continue to use tinder >> do you think pricing power is in your court, if you wanted to raise the price of a paying sub, is that feasible in the next year or two? >> we always look for ways to optimize price, but when you think about it, when if we can get a really relationship based product, we think that it's going to be a compelling offering, and if we can apply tools, like tinder gold, which

we now enhance a feature called picks, i think people will pay for our value, and we have lots of opportunity after some price tests across the globe >> mandy, before we let you go, i want to get your thoughts on a different topic. in light of the stepping aside of pepsico ceo announced this week, one of the questions being put out there is there are actually less women at big cap companies, despite the fact that there's focus on bridging the gap and diversity, et cetera, is something you're focussing on in your company and what type of discussions are you having and how are you fostering those next generations? >> very good question. i have two daughters and we're esetting -- 35% of our users are

women. and this is a call to all women executives, we need to make sure we set a good example and draw women into the market in the future >> should we expect those things to be significant year on year when we get into 19? >> the big focus, we announced about a month ago that we bought a majority stake in tinge, and we're really focused now on driving the marketing, hinge has been marketing driven. we think we can really drive growth, our focus on user growth, we need to calibrate monetizization with great momentum in the product. >> mandy, thanks for the time, appreciate it, mandy ginsberg

from match.com. elon musk is talking about taking his company private, can he should he? we'll discuss it we're back after this.

welcome back markets lower this morning, though marginally, the dow down about 51 points as trade concerns continue to spook investors. joining us now at post nine, ben mandel, global market strategist, and chief investment offer at oppenheimer funds you got another $15 billion worth of goods imported from china, about to get slapped with 25% tariffs. the s&p 11 points from its record high, markets have been largely shrugging it off >> i think the market is taking the right point of view. and we will find a resolution. but the market are seeingthrough

it and i think that's the right call >> there's been a lot of focus on whether we get some deals in trade before the midterm elections? do you think that's the case >> it has to do with a negotiated solution, that said, i think there's a lot of never-term risk here because tariffs are playing with fire think about the steel tariffs for instance, and guess how much we collected in duties over those two months about $500,000, as collecting literally zero for more than a decade but the medium term loss is the sentiment, the illusions of losses that economists love to talk about including myself. it's a horserace between those two factors here i think there's a legisla ee'ste

case of things calming down before the electi inelecting -- elections. >> is the market factoring in what could happen if the house swings to the democrats? >> the markets are expecting the house to swing however, i think the thing that the markets were hanging their hat on is taxes and that has already gone through and that is something that's going to be with us, and it will take a lot, you will probably have to flip the senate to go the other way, so i don't think that's very likely at this point, markets are in a really good spot, if you take out trade tension, everything is working out right, economies are doing well, earnings are really superlative, all around, we take our trade tensions and the markets are prime for a big rally.

>> i'm curious to get your take on monetary policy jamie dimon recently saying he thinks the 10-year should reach 4%, could be as high as 5%, in an interview he did with us a couple of weeks ago, also talking about the risks on the balance sheet, do you share any of that? >> he's right, obviously >> i'll just say that to begin >> of course >> but what i took away from those conversations is the bond yeelg yields, things like policy and inflation, both of those should respond to the economy in a way that pushes bond yields up in fact historically the pricing has been much more aggressive than the underlying inflation itself so as inflation pushes through the fed target, at 2.5% at some

point in the future. the question is, think about what happened last week with the bank of japan. global central banks outside the u.s. are holding down the long end of the yield curve, because as the bank of japan adjusted it's yield curve, things went up that's exactly what use would see as the boj revises it's policy >> so you think the curve rate doesn't readjust after a while >> we shouldn't be so worried about flat growth rate >> i think let me say something that ben is not saying, which is the likelihood rates go to 5% is zero in most economist's minds in the current environment, where the world is facing deflationary pressures, the

likelihood that rates are going to go to 5%, central banks are likely to get there and the chance of a recession remain very, very small we'll bring in billionaire activist carl icahn as cigna prepare -- icahn wrote yesterday, calling it the worst decision in history. >> we have been very consistent, the combination presents an outstanding opportunity to prove affordability. everybody through corporations through individuals want affordabili affordability. the combined company will further improve affordability >> this is the debate about the

fundamentals fa tactically i would raise a number of questions before the meeting takes place to vote on the deal he owns a small position, relatively, at least percentage wise and he undertook this campaign very, very late. if he can convince some large shareholders to turn, it could become proper more of an issue, now it doesn't appear to be a threat to the deal, but you have to take mr. icahn seriously. here's what's happening at this hour. we begin with north korean foreign minister meeting with iranian president rouhani in tehran the two discuss the withdrawal from the iran nuclear accord rouhani says washington is now being recognized by the world as an untrustworthy company

antonio gutierres meeting with japanese prime minister shinzo abe, this meeting taking place before the ceremony. >> we're demanding the denuclearization of the korean peninsula to avoid a nuclear crisis in england, firefighters witnessing a rare firenado it occurs when cool air enters the top of hot air, causing a swirl similar to how tornadoes were formed. luckily, though, no injuries were reported in that blaze. that is the news update this hour, i'm going to send it over to jackie who's going to try to

get through the inventory report we're having a little bit of a fire drill right now >> literally and figgively too a drop in crude, u.s. production, 10.8 million barrels a day, down from its weak of 11 million that we saw on july 13 some comments from iran's foreign minister saying that the u.s. can't prevent it from exporting it's oil, and certainly it's that reliance on its allies to stop taking the oil that would make it effective. you can see crude down just a little bit less than 2%. when we come back, hitting the jackpot, a casino project is honing in on closing the gap we're going to bring you that story, we're a little over an hour into the trading session, dow is down 64, close to session

lows, the -- don't go away

tesla's stock has been down today and yesterday. we have reports that elon musk discussed with the board last week about taking the company private. the way this was presented in a one-off tweet and a memo a few hours later, and a statement from the board this morning, it all raises questions about the company's leadership we have betsy atkins and the co-author of the book "the driver in the driverless car." thank you both for being here today. i mean odd to say the least, does it mean anything to you the

lack of disclosure, even though it may have been -- did it achieve the desired effect by telling everybody at the same time by twitter? >> people love elon musk because -- as a company ceo he is a train wreck, he treats his investors and shareholders like he's a private and the board, although independent by the letter of the law, really behaves a lot more like a private company board you've got so many directors with cross relationships, cross investments that calper said they needed to add to directors. this is not the behavior of a public company and this is not consistent with reg fd

and the former sec member saying he's got a lot of concerns and they're likely to get investigation about how they released this information with a tweet. >> you've been on a number of company boards and have been involved in certain situations that required special committees what is the appropriate response here do you think it's odd that we only heard this morning about conversations that apparently began last week? >> you know, this board's oversight is very odd. they knew they had a cowboy ceo. he's baited the analysts, he's tweeted before, they should have reeled him in, they should know that they have a rogue here and they know very well how you have to communicate with the market so i think they are essentially allowing friendly fire and allowing all of these class-action lawsuits which are surely going to follow,

derivative lawsuits are going to occur. these are distractions so this announcement is extremely unorthodox >> elon musk wants to run a private company, can he and should he figure out a way to make that happen >> i think this is the best thing right now, is when you take the company private, he's created a great company and it will be the greatest capital funding in the history of mankind when he takes it private. everyone ee's talking about saui billion dollars, there's only a small segment of it that's going to be private advertised, it frees him up to do what he's best at. so this is -- so what, everyone

do , everyone twitters these days >> this is not a small amount of money we're talking about, it is gigantic, it would be the largest ipo of all time or take private, because i can't imagine he could get debt financing for a leveraged buyout this is no easy thing to do, and i think you have to acknowledge that >> waymo is just the software for self-driving cars, tesla has cars which are amazing the difference between the tesla and all the competitors including volvos, is the difference between an ipod and a cassette player. this thing could be worth far, far more if left alone from the mat re-enforcers of the -- and the companies that are trying to drive the company into the mud

i think he ee's doing wonderful things and i strongly support his move over here >> elon musk has said that this is not finalize ed yet. the fact that you have all this additional speculation that you could see investor lawsuits, et cetera is he now at a point where he has to go private? >> it would be great if he can actually raise the money but he hasn't been reliable in coming through with his statements he ee's missed his shipments, yu try to manufacture a complex automobile in a tent outside in a parking lot. you've got whistle blower complaints about the battery factory. there's no reason to think that he's raised that amount of money, which is gigantic, that

would be the biggest go private in american history, we haven't seen the likes and for him to say he's got the money, you have to wonder is it really true? he doesn't have a long history of absolutely meeting all of his public statements. >> it is interesting where we would find pools of capital that deep we showed a graphic a few minutes ago about funds. is that a legitimate way to start speculating? >> there's lots of money in the world. and again, compare it to waymo, $175 billion look at allibabalibaba, the worz chan change -- has changed, we're looking at automotive companies, forget it, they're history, we're now in an age where we're

changing the -- the fact is the battery lost to about $100 a kilowatt hour which we thought was impossible two or three years ago. and the cost is going to keep dropping, in a couple years he'll be able to offer $25,000 that will go 500 miles this is what elon is working on and this is why he is considering it because he knows what he's sitting on this company could be worth more than any other company in the entire industry. >> there's a difference between -- sorry there's a big difference between a software company being highly valued and a company that actually has to make a safe automobile that is able to be shipped on time, meet volume environments i would not be counting the german automotive competitors out. i would not be counting the american competitors out i don't think the market is

going to be patient forever with missing shipments, with missing financial projections, with safety issues. >> you know what we'll have time another time to debate the fundamentals of the company, but for now, i certainly appreciate you joining us with your insight as well >> i do like how this has aroused passion in everybody, don't you, david >> let's get a market flash here kay rogers back at h.q >> the stock is actually hitting a -- a drop in north american same-store sales of 6.1% john schnatter resigned as chairman of the board last month

after he admitted to using a racial slur on a conference call he has since sued the board. it the company says negative b publicity has taken a toll and they also significantly lowered their guidance for the full year. schnatter is still a major shareholder, he issued a statement, as i communicated to the board as early as december 2016 and several times in 2017, i am seriously concerned about the company's declining sales, financial performance and the directation of the company under the current board of directors when we come back, how a casino protect in massachusetts is planning on closing the gap in massachusetts, the gaming commission has ordered the casinos to ante up when it comes

to getting women in hard hats on e construction site. how they're doing it still ahead on "squawk on the street."

tesla's ceo elon musk shocking the street with his latest tweet, sending his stock on a wild ride and it has some traders pressing the buy button. find out on cnbc.com, more "squawk on the street" straight ahead.

about 6,000 construction jobs are tied to casinos in massachusetts. and they have teamed up with the gaming commission to help employ more women in the well-paid union jobs our confetessa brewer is joinin us in our "closing the gap" series hey, contessa. >> reporter: hey, morgan what you see is a high-level of activity at boston harbor. and the casinos in massachusetts are rather unique. they have more than doubled the national average for women in

construction jobs. now, granted, that was a mandate by the gaming commission in the state to get a gaming license under a legislative diversity mandate that requires women to make up 6.9% of the construction workforce. not including design, officer support and other staff. well, encore just hit 7% last month. mgm employed 7.5% trades in the women now completed construction but finding skilled talent has been a real challenge requiring a multiprong approach from the gaming commission, the casinos, the unions and other advocates. >> we need women in the trade halls to be called up when the jobs come. and it takes a company like mgm and mgm springfield to fill the jobs and get the women into the trade halls to be available for the next job. >> i think we'll wind up with a better work environment and a better place for our guests to enjoy because they will look around and see that we are

really reflective of today's society. >> the campaign to have women choose construction careers has set a lofty goal 20% of women by 2020 guys >> contessa, first of all, digging the hard hat, but second of all, given the fact that construction is a physically taxing and challenging job, are women quite literally working the same jobs as men on these sites? and are they facing discrimination -- >> reporter: yes, they are >> okay. >> reporter: so two things, yes, they're doing the same jobs. in fact, we hear that women who are in jobs like waitressing or moving patients in health care already have the muscle strength and the fiscalty needed for this job. the second thing is, women on the job told me, look, if there's something you physically can't do, you ask for help third, what they're telling me is that critical mass of women now, 7%, makes a big difference

than if you are just one woman on the job site, has made a huge difference in terms of acceptance and no one they spoke to has said they face on a regular basis any kind of discrimination or push-back they say, instead, there's a lot of camaraderie on the job. >> that's awesome. contessa, thanks for joining us. contessa brewer. time to send it over to john ford for a look what the is coming up on "squawk alley." >> what is going on with tesla elon musk wants to take it private. is that serious? what is going on in the industry we have the former chairman of chrysler coming up on "squawk alley" to talk about that and a lot more sensor ands this machine are integrated. atta, boy. & yes, some people assign genders to machines. & with edge-to-edge intelligence, you'll know your customers love this color, & don't love this one. never getting grape again. & you can adjust in near real time.

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that's alright. i got a box of 'em. thousands of opinions. one estimate. the earnings tool from td ameritrade.

welcome back to "squawk on the street." i'm jackie deangelis time for the on the spotlight. the u.s. foreign minister said we can't stop iron from exporting oil after sanctions were reimposed yesterday the issue is and has been moving the market around for some time. the supply and demand balance, its delegate right now if the iranian oil does come off, yes, prices will go up. this is what the market priced in, but should that oil not come off, then prices would stay put or even decline as you're seeing a little bit today

if the saudis were to assume the iranian barrels were lost and pump more oil, prices would decline further which is precisely seems why they are taking the cautious wait-and-see approach the energy etfs are lower today. the xle and the oih. back to you, carl. thank you, jackie. the dow is down 24 points, but off the ssn seiolow. "squawk alley" starts in a few moments.

good morning, it's 8:00 a.m. at the headquarters in palo alto you're watching "squawk allie live." ♪