i didn't hear from you it was national joe day. 27th i didn't hear from you, sorkin i don't think there is a national andrew day. >> there is a st. andrew. >> there is a st. andrew. >> there you go. >> you'll be here at -- >> i'll see you. >> 5 to 6:00 on monday we'll see you? >> 5 to 6:00 on monday, see you then. >> join us for andrew's return "squawk on the street" is next ♪ you know your love keeps on lifting ♪ ♪ higher higher and higher ♪ a good morning for the initial public offering market lyft going public today. and we have all the bases covered. we'll bring you, of course, the opening as well. welcome to the -- welcome to "squawk on the street" and our special coverage of lyft's ipo i'm david faber. he's jim cramer. we are here at the new york stock exchange carl continues to have the week off. let's give you a look at futures as we also get ready to close

the quarter. and what a quarter it's been for the overall averages it does appear we're going to have a strong open at least if you were long stocks this morning. let's get to our road map, it starts with preparing for liftoff, set to make the public market debut this morning. the first major technology ipo of the year and the question is, is this going to open the floodgates for other unicorns? plus, warren's warning, why warren buffett says regular investors shouldn't buy into the so-called hot ipos and shares of wells fargo are rallying tim sloan retiring saying the bank would benefit from a change in leadership. another one, warren was involved in that one. we'll start with lyft, will trade under the nasdaq the ticker symbol, lyft, $72 a share. that was at top of the expected range. in fact, above the original range for it it values lyft at more than $20

billion on its first trade comes as the company's big arrival uber preparing to enter the public markets, perhaps within let's call it a next four to six weeks we're going to bring you lyft's opening trade once it happens. jim, some quick color i've gotten, some investors and bankers. well placed as you might imagine. very much oversubscribed not going to give outnumbers everybody puts in so much more than they could ever get, those numbers aren't necessarily -- >> hot deal, you try to get 10%, you get 100,000 shares if you run 500. >> exactly so, listen, the key is they seem to have undercut some of the hedge funds in terms of allocations as you might expect because the long only demand was quite strong growth names don't come along that often and even though they're losing a lot of money, they're growing very quickly >> many people have said to me, jim, how can you recommend a stock that is losing money

growth investors love companies that grow fast that have decent balance sheets and this one is blessed with the great balance sheet. >> that may be one of the keys for it at least here in the early going, jim, it does appear -- i don't know if we'll see a nine in front of the stock when it opens. going to see an eight if not more appears to be a strong open. >> i thought it was ten points above. the more i talk to people this morning, the more i think -- >> they seem to have done a good job in terms of placing it again. not going to get a lot of flippers i made this point in terms of 13 fs because you get them so quickly. and they're going to be watched closely. if you do sell and don't buy on the after market and a decent allocation, you'll be penalized for the next deal when that comes down the road by some of these underwriters there is not expected to be that much you'll have the -- in and out and in and out and in and out. there will be volume don't mistake that but, you know, at this point, it does appear they have done a good job placing the stock, gone

through every single name as you might expect in the book and so there should be a lot of demand. >> i was surprised when i heard 72, david, i said, oh, wow, they want to generate a -- i thought there was strong demand at the 79 level where big institutions come in and buy it. now people have to understand they didn't get their allocation, they sit on the first block and then they buy in the after market and give themselves a great basis seems so far to be very well handled by the -- >> right i guess the question does become, you know what about six months from now what about the first wave of lockups, expiring. what about if and when this company stops, what seems to be pretty aggressive promotional pricing in certain areas to compete and take market share from uber, and if and when you start to see margins improve, but topline growth decelerate as a result >> well, look, the -- the projections for margins are unbelievable that's what made me think, listen, i'm going to recommend

this to people from "mad money" because they do understand they're not like the 1999s, 2000 deals, gross margin, we don't need the gross margin, we're a dotcom these guys have a business plan. i am concerned that once people have their allocations, and the stock goes up a lot, some of these brokers are going to free you the sell so you can reload for uber that stock will be kicking around. >> there are operating expenses including marketing this rank as a percent of revenue, but not last year stayed flat. >> i look at that, it worries me you're talking about a company, you know what other company 100% revenue growth last year come on. >> that's why you're going to have -- where do you find that >> that's why you have funds that literally -- their charter is t all costs >> long onlies growth is scarce of that type. >> i like the way your tenor is not 1999

you're not giving me, like, this is going to be -- we need to be more measured. you and i are both thinking the same thing we don't want this to end too badly. we know it ends badly. we don't want it to end too badly. >> it is an incredible growth area when you look at the total addressable market, however you want too use it, wherever this thing goes over time it isn't as though you have opportunities along the way if you're an investor who believes if you don't buy today, you're not somehow going to have that opportunity another time not to mention uber is going to come along, it is -- it is in other businesses and lyft does not, but i -- >> i happen to think uber freight is worth a fortune i happen to think uber is run by a ceo, well, well run guy, really smart guy and dara, these two young gentlemen seem like young gentlemen. >> they do >> young gentlemen at alphabet. >> yes, you did. on that question of promotional pricing and the competition with uber, andrew ross sorkin who interviewed those two young

gentlemen earlier -- cnbc's own pocket squared andrew ross sorkin did ask both those gentlemen about that competitive landscape. and pricing. here's what they had to say. >> one thing to realize, in 2016 and prior, there was a need for us to get up to scale. scale in our business is a three-minute pickup time beyond that, now what we have is 80% of our passengers are coming in organically they're coming in because of the brand, because of the service, because of our driver community. and so it is not about a price, you know, battle between the two players anymore. it is about getting the best service, having the best software, and real world operations. >> and there you hear it a reasonable answer onewould think although again there is this question of, okay, but what if you really want to -- how much did they promote in order to gain what was it, another 10%

of the market? >> well, look, no one else can cop come in. look at the stock at ge. they're talking about the document, the selling document is very revolutionary. it is very much mission driven, purpose led. and i don't -- after listening to andrew's interview, i'm hard pressed not to be cynical. i have to be cynical, but i don't want to be i think these two gentlemen trying to do the right thing i got to tell you, in the end, there is a gauntlet of stock coming public. if you hang on for all of it, i think you'll end up not making as much money. >> watching it all closely jim, speaking of things we watch closely, let's bring breaking news here in terms of bristol-myers and celgene. want to break for a moment here because we do have all the all important recommendation from

institutional shareholder services, the proxy adviser that has a lot of power, like it or not, in terms of how votes are influenced and they have recommended in favor of the bristol-myers celgene transaction. i told you earlier this week, it might be friday. it looked like it was more likely potentially monday. it is today. it is now. it has happened. the recommendation from iss is out. that can figure prominently in terms of how passive funds in particular choose to vote their shares and this would certainly seem to be a significant, positive for bristol-myers and its continuing efforts to get this deal done. you can see the share -- the spread is tightening >> i got to tell you -- >> iss has recommended in favor of bristol-myers i haven't seen the report. but, of course, a number of people who have it have passed along they said -- you and i talked about this a lot. you've been in favor of it you did interviews with the ceo.

the vote is april 12th for all of our viewers. >> i'm sure there is someone who owns bristol-myers who said there is a bid for bristol-myers somewhere that is better than what i have. dr. caforio has not said there was anyone in contact. i said, david faber asked me to ask you, he said no one has contacted. no one i'm sure someone said, wait a second, $75 billion great american company, isn't there somebody going to come in from bristol. i think the answer is no >> no. and, again, i haven't seen the text of iss. there is a debate going on that is worthwhile about whether the firms should have the power they do to potentially given who they -- who pays them. namely many hedge funds and what the role really is it is important, that's why you see the stocks reacting the way they are on the 12th, remember, starboard led the no vote campaign joined by welling ton. wellington weighed in with a press release saying they don't like the deal. they have shares voted by

vanguard, still somewhat unclear whether those shares will be voted with wellington or not dodge and cox, they haven't confirmed it, also against this would seem to say your big holders who are passive are certainly going to look at the iss report and so we very well may be in the 12 saying this done deal has been approved. by shareholders, still has a ways to go. >> tremendous duplicity here when you have a passive fund, that owns bristol-myers, right and you decide you don't want to do this deal, are you calling dr. giovanni caforio and saying i have a better deal for you merge with gilead. they went for no options nothing. that's like saying, you know what, the mets really stink. what would you do about it i just told you, they stink. they don't, by the way i'm not just saying it no fan the rigor of the position is suspect. they have an ill advised position they offer nothing constructive. i have talked to dr. caforio,

he's -- tellea i don't know, i got a good restaurant nothing for him. other than a reservation great restaurant. >> there you go. you got celgene and bristol-myers. we'll come back to that. we'll be all over lyft's public debut. >> wall to wall? >> wall to wall. one of them will include talking to ben horowitz, a lyft board member, co-founder of andreissen horowitz, a big interview. >> good get. >> we own the quarter today. and we are going to end it with the beginning being very strong for the markets. more "squawk on the street," special coverage of lyft's ipo, when we return [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out.

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♪ i get lifted i get lifted ♪ wells fargo ceo tim sloan stepped down saying he thinks the bank will benefit from the change in leadership the company spent several years trying to restore its reputation following the 2016 fake account scandal. wells fargo has begun to search for a permanent successor. alan parker takes over in the interim, presiding partner before he left there and took

over as general counsel. >> heavyweight. >> funny, researchwise, to get your take, deutsche bank downgrading it to a hold given management, eps uncertainty. raymond james upgrading it, given the retirement they say removes the head wind. which is it? >> tim had a very good quarter, very good year, 5% raise, three weeks ago, not fired by what people say it is mixed. i like the upgrade, it makes sense because people feel like he's going to go to capitol hill and they're just going to crush them on april 10th but the downgrade has a little more legitimacy because they were on a path they were on a path to making a lot of money their bank stock -- it is nothing worse than being a bank stock. they were on a decent path and had a great quarter. it just -- they have the unfortunate aspect of being, yes, indeed, in the xlf. >> i know. >> all banks are created equal >> deutsche bank in their notes,

cost saving targets will likely be re-evaluated by a new ceo that will be a while until potentially you find out who the new ceo is. >> they need to bring -- i heart a l heard a lot of candidates being bandied around, all wrong. they need somebody with technological savvy. the tech savvy guys are the winners. you to have that now i would take someone from mastercard over someone from -- from sun trust, which is someone who i thought -- retirement, you got sun trust bbt. >> 58 years old, sloan it is not like he -- >> he didn't want this when i talked to him, it was, like, i just talked to him right after buffett had given him 100%. >> i know. seal of approval. >> i talked to tim about the upcoming hearing, april 10 and what he's going to do with the house committee and maybe come on mad after

>> he told you a little while back on "mad money". >> soul searching. will it be to the point where wells fargo where they say, tim, you're a lie bit aability and y it resign? >> if i'm not doing my job as opposed to someone having an opinion about me that isn't always informed opinion, then of course it would be appropriate i'm not in this role if i'm not getting things done. i work for our shareholders. i work on behalf of the board, right? they have high expectations for me and i'm exceeding those expectations >> all true, but he also said, listen, if i'm going to be a distraction, i'm out and he sat -- he is -- i say sadly, he made $18 million last year okay, no one should -- this is like the -- >> been at the bank a very long time wasn't a new face. >> worked really hard. separate investigation with -- even including the people who did the investigation to see how involved he was and every time i came back and said he did not

know he did not know. he did not know. he worked hard to get rid of the scoundrels, okay in the end, he is the elizabeth warren face of -- belongs in jail so when you have a prominent executive come in to washington and you have someone running for president, who thinks he belongs in jail, and you have a house, i don't know if you saw the house committee, they're no friends of the stagecoach so it is going to be about tim not going to be about wells. he couldn't stand that he had had enough. was not going to hurt the shareholders i'm telling you -- look, i'm not saying i look inside the soul of this man but i've talked to him a lot and this was not what he would want to do, but the april 10 circuits it going to be a circus we have to go down there it is going to be circus maxi s maximus. >> tigers and everything >> oh, yeah. >> on chains >> the coliseum. i did a fashion shoot with my daughter at the coliseum >> all right

moving on, lyft is going to ring the opening bell in a few minutes from now be sure to stick around for the first trade.

that's what happens in golf nothiand in life.ily. i'm very fortunate i can lean on people, and that for me is what teamwork is all about. you can't do everything yourself. you need someone to guide you and help you make those tough decisions, that's morgan stanley. they're industry leaders, but the most important thing is they want to do it the right way. i'm really excited to be part of the morgan stanley team. i'm justin rose. we are morgan stanley.

you're watching cnbc's "squawk on the street" and special coverage of lyft's ipo opening bell in 7 1/2 minutes from now you can see they're getting ready, get it all done that's remote location, right? i think. yeah of course, as wall street gears up for lyft's public debut this morning, want to bring in andrew

ross sorkin at the company's driver center in los angeles he interviewed the two co-founders in last hour listening closely to that interview, andrew. what stood out to you? >> i think there were a couple of issues. one is the profitability issue in terms of i think there is a lot of investors this morning who are asking themselves when does this company become profitable, how does it get to profitability? i think they had mixed answers about how they get there and what kind of time horizon. i don't think they gave one. whether -- therefore the question becomes what kind of honeymoon period investors will give this company. is it an amazon where you get a long, long time or is it much more i should say, by the way, lots of cheering behind me as the group of folks from lyft, employees and drivers and so many others are getting ready for the opening bell the other big issue, though, has been a bit of a corporate governance controversy, david, about the dual class shares. in this case, logan green, the co-founder and john zimmer, will

own 49% of the company or have voting control of 49% of the company. they only own 5% of the company. so that was a real question. and we asked them about it. >> spent a lot of time with our board and investors to put together a thoughtful approach to governance. and dual class being one of them we also selected an independent chair of the board, and over the last several years have been, you know, making great effort to make sure we have a really diverse board coming from all types of different backgrounds but collectively, we really need to set the company up for this long-term opportunity and to create the type of durable growth that we're going after. >> the other big question we asked them about is this raging battle, of course, with uber and how much they are spending to discount against each other and what that will do to profitability and what that battle looks like. here is what they said about that >> one thing to realize, 2016

and prior, there was a need for us to get up to scale. scale in business is a three-minute pickup time now what we have is 80% of our passengers are coming in organically, they're coming in because of the brand, because of the service, because of our driver community so it is not about a price, you know, battle between the two players anymore. it is about getting the best service, having the best software, and real world operations >> we were in a car yesterday with mel, our lyft driver, who talked about the cultural difference we'll see whether that translates in terms of valuation and whether the stock this morning pops and as we always talked about, the question is whether, you know, a pop of the stock is a good thing or a bad thing. are you leaving money on the table? and what does it mean for the

long-term, david. >> they have been successful in pur pushing social responsibility. i thought it was interesting, but i think there are plenty of people who think they have been engaged in discounting and promotional wars in order to gain market share. they didn't seem to address that in that answer >> they did not. and it is absolutely true. we should also say it is in the filing, in the s-1 filinging about the risks and they talk about how much discounting and promotions have played in terms of their ability to grow market share. if all of those discounts disappeared and all of uber's discounts disappeared, maybe they would be a level playing field. is it a race to the bottom in terms of that pricing? and think that's going to speak largely to whether either of these companies ever reach profitability. >> andrew, what are we hearing about other things they can do i think uber eats is a terrific business i think uber freight is perhaps the most unknown great business. i know you ask about this

scooter business, can't they just do -- can they start lyft food tomorrow and maybe start taking some share. >> it is so -- it is so interesting because when you talk to logan and john about these other -- not even ancillary businesses, but growth opportunities, they say, look, we are a pure play transportation business. i don't think, and, look, maybe they'll pivot, i don't think over the next couple of years they have any ambition to get into the food business or other forms of delivery. maybe that's surprising, maybe it isn't they try to really suggest they are a pure play transportation company. of course, transportation may mean autonomous vehicles, bikes and scooters and the like, but in terms of other businesses which you would imagine, you could layer on top, i don't see them going there maybe they'll partner with others that could be interesting. but in terms of the core business, i don't think that that's their approach. i think that one of the things they claim is a virtue of this

company is that it is unlike uber which is in so many different businesses, but as you said, there are many pieces of the uber business which are not fully appreciated either >> well, andrew, we'll be following it closely we're a few minutes away from that open. we can see, of course, those two co-founders that you just interviewed. >> great reporting. >> taking the podium and the applause building. andrew ross sorkin, back in l.a., of course, on site for where they're ringing the opening bell for lyft. in the brief time we have until we get there, it is worth mentioning quarter to date, cisco, one of the best performers, 23% and one of the worst, of course, kraft heinz down 23%. >> just reinvented cisco doing it rather quietly. he did not brag. only thing he brags about is unc. which i think he may have -- i think that may be the right call he's done a remarkable thing there as has kelly cramer, five top reports, they are amazing.

this is a team that is energized to win i've never seen a team work team that is better than what chuck has put together. >> interesting to see that technology, ibm up 23% this quarter. >> that was -- knocked down. >> and apple computer. >> apple computer? i thought best days were behind them what is that >> just apple. i don't know why i called it apple computer. >> let me call you back. i'm using all my devices i'm playing chess here apple is bad i don't -- i'm sorry i use everything they -- how about the apple card call the magnises. >> it is not called that watching too many documentaries. no it is not. it is certainly interesting. we spent plenty of time talking about kraft heinz. biogen is a loser, that happened last week. all right, let's get started here lyft, they're starting the applause here at the new york stock

exchange, they're also starting the applause as well here at the big board, by the way, doing the honors, twin river worldwide holdings, celebrating its listing. story of the day is back in l.a. lyft's ipo >> all right >> yeah. ve remember facebook -- >> there was a remote one done for the company called fac >> yeah that was ill advised >> yes, it was -- it didn't go quite as well as they had hoped. it was cross country as well. >> completely botched and really funny. >> completely and totally botched, yes. >> made us all look like idiots. glad i was doing my daughter's prom party that night. good sense to say, what a -- what a kind of show you don't like to have >> yes

it was that. this, i'm sure, will not be. can't say i'm sure but it doesn't appear to be. seems that it is already very well placed that is the stock. only talking with 32 million shares or so. >> up environment today. oil, david, oil is up, the market goes higher it loves that. sign of world trade, a lot of people feel mnuchin's leaks to the press bodes positively david, we have to talk about a stock that is just horrendous. >> please, tell me. >> dowdupont. >> dowdupont, okay. >> second time warning now dow is being spun off. jim fitterly, it will yield more than 5 but not only was the crop protection bad that was a lot of that weather, but also the chemical company dow did not get the gross margins they should have because oil went up at the same time. they couldn't pass along ethylene prices. people are saying, jim, it is

the gang that couldn't shoot straight, how did you get affiliated with these guys by saying you like them and the answer is that, you know what, i like the breakup but the -- in between when they put the companies together and the breakup, it has been -- well, let's just say last night when i got home, i kicked everest. >> did you really? >> i had to. >> i don't believe you. >> someone had to pay for dowdupont and that stupid dog was in front of me i gave them a -- >> okay, good. >> he was dowdupont. i said look at you you are dowdupont, get out of my face that was a disappointing quarter. people react badly because you get -- >> dow around 52 bucks a share we're not showing it right now down about 1.4%. >> and celgene, amazing. >> let's recap on celgene. >> wow. >> it is up sharply. again, we told you at around, what, 8 minutes after 9:00 --

>> we had it first. >> the proxy advisory firm is recommending shareholders vote in favor of bristol-myers deal to acquire celgene and the stock is reacting accordingly because of the influence that iss has on so many of these so-called passive shareholders who oftentimes do rely on its advice in order to vote their shares. you can see bristol is coming back it was -- people were setting up the spread, the spread is closing, shorting it to a certain extent, to set that up the vote is the 12th of april. we have noted of course the opposition led by starboard. not economically very large owner. they have spent a good amount of time, a lot of -- explaining. >> -- good paper out the other day about the five drugs that are not revlimid. >> by the way, just to remind people, the terms of the agreement, one share of bristol-myers and 50 bucks in

cash just to remind people. it does appear it is likely very likely you could -- >> we'll have a new -- >> i'm told on retail owns about 30%. and half of that, retail is -- >> i think it is about 30. and i'm told they feel pretty confident that they will get a good amount of retail to vote. and typically retail does vote in favor of management >> green chutes, carmax, carmax a serial disappointer. very good number nongreen chutes, restoration hardware rh reported a quarter that was disappointing versus what gary friedman said they would do in december but he linked it almost entirely to the stock market and said he made his projections before the big swoon, which is true and then also some other good tidbits in the rh conference call, he really directly talked about how the chinese need us more than you think.

that he feels that the talks are going our way. >> rh is down 16%. the stock is so volatile >> it is one of the most volatile. >> always around quarterly numbers, it feels like you get a double digit move one way or the other. can't show it to you we're going to be on that 72 bucks. lyft is not going to open. >> no. i think i'm hearing 80, 82 restoration hardware, rh, conference call that was a bit of a scold by gary, saying, hey, listen, i'm doing my darn best here, you know, hindsight is 20/20. i made a prediction. market fell apart. we're levered to the stock market then goes in about wayfair it was like that -- like when nixon's resignation speech out of nowhere he says my mother was a saint, but they'll never write a book about her gary had a great call.

when you're selling high end furniture in galleries you need to have a good stock market. that's good overlap. he has the highest percentage and says everyone is trying to get to vietnam, trying to get to indonesia. the problem is what fred smith told me in fedex david, to start a factory, green field factory in vietnam, get the boats from the harbor to long beach or to san francisco, david, it can't be done overnight. the chinese know what they're doing in infrastructure. that's their secret. >> they're very strong there you made the point any number of times that the longer things go on, people can change the supply chain. and move things to vietnam >> excited about the fentanyl l from china. >> there was a lot of lawlessness in the country --

>> the state controlled enterprises. >> you think somehow it is -- it is not >> i don't want to jump from place to place to place. >> really? you never jump from place to place. >> i'm linear. i'm looking at what's popping and what's not and getting people to have a context the cemsemis are popping, interesting piece about xi link and 5g, but nothing else of great note and wells fargo, see, i told you, i told you that when tim -- when tim quit the stock would go down tim was fixing it. tim was -- tim sloan was fixing it people hate me for my position he knew -- he knew, that's all i hear about, he's doing a good job. i don't care say what you want about me all right. >> it is down, a bit >> sloan was turning -- >> also a bank stock >> the banks have just been -- >> even fortress bank. >> year to date, citi is up 20%.

i got goldman sachs up 15% those are not bad moves. >> 10s and2s >> should point out -- quarterly performance of the nasdaq comp, 16 plus percent, growth continues to be the focus in the way people want to go. yeah mercado libre is the leader. >> i like the ebay plan. hawk tan led this. it was hawk tan and micron that led this incredible reserge ens in the semis that has been -- i don't know if you saw murotra when he was on. >> yeah. >> micron, the short position here is humongous. that short trade is over you have to look six months out. and the cutback in new boundries and the cut back in production always produces lift anybody who is owning a semis is

owning it for q4 q4 looks good. i remain bullish >> when i was a homicide reporter, okay, two years i was a homicide reporter, and, you know, the police leak things to me >> yes they do. >> they selectively leak them to me and estimate to not reveal they leaked them to me i say, who do you think i'm getting this stuff from? that's what i hear when i hear that the talks are going well. >> apparently the talks are going well. >> when the police told me this and here is the suspect, we want you to put his name in, is he guilty >> your body kudlow seemed to indicate they might take a little longer. >> kudlow is in the sweet spot between the group that saysing nothing happens and the group that says something happens. pay attention to my ex-partner larry, old partner larry kudlow. >> a look at lyft. 72 bucks where they priced the

offering as we pointed out, and as -- >> lyft. >> very well placed. hedge funds undercut don't expect to see that much immediate selling of the stock by those who it has been placed with a lot of demand from long -- they wanted to place it very well they did that. we are looking, of course, for a significant increase in the price once the stock opens that may be for some time. let's get over to seema mody at the nasdaq, check in with her in terms of what is going on over there. seema? >> david, markets may be open. we still have some time before lyft officially trades as a public company here at the nasdaq behind me is nasdaq's capital markets team, gearing up for this ipo one that has generated a lot of attention, this will in fact be the biggest ipo for the nasdaq since facebook went public in 2012 of course, it did receive a lot

of attention duringing i ints r show as well this ipo was oversubscribed this week we saw lyft increase its price range from 62 to $68, to $70 to $72 to price at the high end of the range at $72. now the task at hand here is for the nasdaq's capital markets team and their chief ipo officer, which you can see back there jay heller, who we'll speak to throughout the morning is to work in coordination with ipo, the syndicate trading partner to ensthure this process is transparent that is always a challenge for big ipos like lyft the quoting proc 10:35 a.m 10:45 a.m. is when shares are eligible to trade.

but from what we understand, this company not expected to go public and officially trade between the 11:00 a.m. to 12:00 p.m. hour. we'll keep you updated back to you. >> thank you, seema. a little while until we see a first trade there. >> probably, i don't know, 10:30. what they're trying to say now, huge wave of retail money flowing in right now to try to get in, at whatever price, using market orders. i try to tell people -- i've given up trying to tell people how to do this that's what facebook is like >> six months from now, when some -- uber is out there as a public company where do you think lyft will trade? that's a brutal question to ask. higher than today's price or lower? >> i think it can be higher. >> you do? >> yeah. people want pure growth and the growth here is still pure. it is duopoly. i'm not saying they'll fix prices but i love duopolies. and i don't know how this happened i don't know how they're on --

it is really remarkable. and they know what they're doing. you can be in a situation where prices could go up, and once in the public, they don't -- it is going to be good going to be good. >> i want to bring andrew ross sorkin back into the conversation andrew, funny, there have been a lot of investing -- a lot of investors along the way here you mentioned carl icahn during your chat with the two founders as well. it is not quite what it appears to be. it is a big win, but they diluted people so many times around the people, raising money along the way, that you just can't do the math if you bought in at $2 billion valuation that it is a ten-backer it is not. it is probably less than that. still a good investment, though. >> it is he did very well there is a lot of big winners that say it is getting loud in here in large part because the mayor of los angeles just walked in and valerie jarrett on the board

of airbnb was just behind me before we have a couple of other people, maggie wilderrama and talking about winners, ben horowitz, from andreissen horowitz, they made an early developme investment and are big winners this morning after passing or maybe being passed over. we'll talk about it from an investment in uber at the time a couple of other big winners that may be worth talking about, general motors has a stake in this company they will be a big beneficiary of this ipo as well. as is fidelity and when we talked tothe two founders, logan green, worth over half a billion dollars this morning after this transaction takes place. john zimmer, a little over $350 million. not a bad day. they, of course, have said they plan to hang on to the stock, but didn't say when they may sell it. so we will watch for that, of course, as well. >> yeah, well, i mean, lockups

become important in these kinds of situations, don't they? and it is not just for the founders, but also many employees as we know who have been compensated to some extent with shares along the way and are anxious to monetize a portion of that. >> one of the big issues here and in the uber ipo has been the idea that both of these companies plan to offer or are offering, i should say, stock or cash in some respects to certain drivers who have met certain thresholds in terms of how much they have driven, how long they have been driving for the company. this could be a great hay deydao some of them some drivers are upset they were left out of this or if the stock does drop, there will be lots of debate about that as well. >> andrew, we'll be checking back in with you shortly i'm sure want to get to rick santelli, chicago pmi data out moments ago. rick what can you tell us about

it >> march, chicago pmi, 58.7. this is a miss we're expectinging a number closer to 61, 62 remember, we're following 64.7 the reason i'm starting there is that was the best number going all the way back to october of '17. that number took you back to the 20-year high several years earlier. it is definitely a retro grade, only takes us back to january, where the number was 56.7. so a bit of a miss but what isn't missing today is yields the big refrain, of course, has been the decoupling of the logic and the correlations between higher rates and higher equities and lower rates and lower equities but we are seeing not only sideways, but as you look at one week of two-year, we're rounding back up f y if you look at a two-day of tens, we're trading above yesterday's highs. we have done some work there super significant if you're looking for a market to make

that long titanic turn if you look at one week of bunds not nearly as developed, still flat which leads you to one conclusion we're the conductor of the orchestra. we the u.s. market turns markets, central bank is well ahead of other central banks if you look at gilts, the same dynamic at work. flattening, not quite turning up of course, being a friday, the friday close of higher significance than intraday levels or daily closes let's look at one week of the dollar index yes, it has given up a smidge this morning on the one week chart, a nice week holding on to nice gains. 97 handle has been elusive here we are, if you want to see the mirror image of that, euro versus dollar, 57% of the dollar index, the euro has not had a good week. jim and david, back to you >> okay. thank you, rick santelli reporting for us first from the cme on the pmi numbers

jim, overall, looking at the s&p, the broader market, we are up almost 13% for the quarter and another let's call it third of a percent right now >> yeah. >> if you make it the makeup of today's winners, again, you got companies that are levered to china, free port, caterpillar, that's the mnuchin doing great story, coming here there is also a really interesting series of things that are going on with carmax leader autos have been the big bugaboo of the market. steve tusa, very negative piece out about 3m saying -- they have auto exposure. if autos, contrary to what the two gentlemen jeh aare showing life, have any life, we have to check to see how carmax is doing. and micron leader is back. people want to show they own micron i don't know

this is a market that they want to buy hp, didn't have a great quarter. but they -- celgene causing more interest in some of the biotests, thinking, wait a second, it can happen to you too. people think of gilead, something could happen to gilead. >> really? >> gilead has to do something. >> gilead has a lot of balance sheet capacity >> yeah. they have some better luck in drugs. >> incredible market cap numbers, not even that long ago. >> they have an arthritis drug no one has been able to nail down arthritis arthritis drug can be very valuable we're hearing about select drugs that are starting to move needles. one that i had hoped would have more impact was the j&j ketamine drug you don't have time to go to the doctor's office. the idea was if you had a spray, it would immediately do it that, hypothe va understands it is far more important to have

troubled veterans have that drug on them as opposed to have to go to the doctor's office i think that will be the next battle there we'll see the gottlieb successor. what are you are you hearing i food in all the good food companies that are doing that? a lot of good. for instance, campbell's crackers you hearing about that maybe a takeover possible. you didn't hear that >> which one >> mondalese >> this food group has come away >> kraft-heinz has been such a poor performer. >> smuckers' quarter was good. there's life in the supermarket

and we're not covering it because we're so blinded by the hell that is velveeta. >> nomad's food is another one, small, but up 25% in the last couple of months. >> originally a spac. >> frozen foods over in europe, frozen foods in europe doing very well. conagra. >> millenials like frozen food because apparently it's more nutritional because it maintains the nutritional value. >> they like it. it's cheap remember what millenials do. they don't like to leave the couch so they call grub hub, uber eats, caviar, whatever, and they -- or they heat it, domino's, though not as much as they used to or they heat up something they bought in the frozen food aisle for $2.49. everything is $2.49 in the frozen food aisle. like when my parents were growing up and my parents would give me the stover's frozen dinner with the cranberry in the middle that got hot and was silver and like that turkey

piece and i thought we were kings. i thought we were kings! >> stover's macaroni and cheese guy. that's it. i love that. >> annie's macaroni and cheese. >> general mills. >> started to take a lot of share away from kraft-heinz. >> i saw velveeta, actually had a sell buy date. >> it did? >> can you imagine. >> 2030, what was it >> no, no, 2020 something. pulitzer prize winning jim stewart comment that had he liked my analysis of velveeta. >> by the way, he's coming on. >> ah. >> jim stewart will join us in the next hour as we continue, of course, this special coverage of the initial public offering of lyft also we'll have -- yeah, we'll talk to jef lures. >> yeah, former company board members, and we'll bring you the first trade. where will it be will it have an 8 in front of it or a 9 in front of it? >> i think it will. >> stay with us. the future of technology investing

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day, of course, as owners of lyft, certainly those going into the ipo start figuring out just

how much they are worth. can't help yourself. got to probably do it, and then those who got allocations at 72. >> i think they are going to do quite well. >> it will depend how long they want to told. >> they will go right back and say we held this you can see it from our filings and they will want more until everybody runs out of money. >> what do you have tonight? >> i've got hello alfred. >> i don't know what that is. >> a service that basically does everything for you you don't have to -- you don't even have to think anymore you can just watch a lot of video games. >> i'm not interested in really watching video games, but okay >> okay. >> i like it. >> i loved working with you this week. >> you did >> really? >> it was good i won't say it was a lot of fun because they will give me a pay cut. >> sometimes carl is here and

then you've got to swivel back and tort. >> the dupont portion of du dupont is doing well so the stock is not down entirely. >> and dow splitting off, finally here. >> we should talk to jim fitterly that means we are. >> before that we have to continue our special coverage of lyft's ipo. >> plastics. >> yeah. >> and lyft. how do you gauge the greatness of an suv?

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welcome back to "squawk on the street." yes, there's more breaking news on this friday last trading day of the quarter. our february read on new home sales. 667,000, an upside surprise in housing. that's seasonally adjusted and annualized clip, and that's well above an upwardly revised 636,000 last month and still leaves it up just about 5%, and if we look at what's going on with university of michigan, we get our final read we toss the mid-month read which is 97.8, and another retire. 98.4 that is a good number. 98.4 is the best level that

we've had since october of last year, and let's go through some internals, always fascinating. the one-year inflation moved up a tick from 2.4 to 2.5 five to ten-year inflation outlook, a lateral move from two and a half remains at 2.5, so even though we had a little bit of lightness earlier with respect to chicago pmi, new homes and university of michigan powered up a bit sara, back to you. >> rick, thank you very much good morning, everyone, and welcome back to the special edition of "squawk on the street." ride-hailing service lyft set to make its public debut any moment from now we've got full team coverage and analysis for you hi i'm sara eisen here with david faber live from post nine as always from the new york stock exchange carl has the morning off the best and strongest first quarter for the s&p 500.

it's energy stocks that are in the lead it is one of the firsts in a wave of tech unicorns expected to go public this year lyft making its public debut at the nasdaq today the company pricing its initial range at $72 per share valuing lyft at more than $20 billion. we've got full team coverage and analysis for you as we await the opening of this stock. seema mody has all the action for us at the nasdaq deirdre bosa is at the lyft line at the san francisco international airport, and andrew ross sorkin is in los angeles today at lyft's driver center where they rang the opening bell remotely this morning and we begin with seema waiting for the first trade. any indication, seema? >> reporter: seven the size and high-profile nature of this ipo, it is all hands on deck here at the nasdaq we're on the top floor right next to the nasdaq's ipo and capital markets team brian, steve and that's the guy you want to know he's the chief ipo officer for the nasdaq at this point they are still

collecting orders from preipo investors around 10:35 a.m that's when the ipo discovery process will commence when nasdaq in conjunction with jpmorgan, the lead underwriter, will try to align, buy and sell orders, not until 10:45 will we see shares eligible to trade and from what we understand we won't see the first trade until around 11:00 to 12:00 p.m meantime, this ipo is being watched very closely unofficially kicks off that ipo frenzy where a number of caps from palantier, are slack, pinterest, own uber getting set to go public that's why the lyft ipo is generating so much attention, not given its size, biggest ipo for nasdaq since facebook went public in 2012 but they have a lot of shares to issue, 32.5 million shares so that's another reason why nasdaq is trying to be very meticulous in this process and's a fair and transparent process with the lead underwriter to ensure all the investors get the amount of shares they want and also leave

enough money on the table to ensure they can encourage retail investors and post-ipo investors to get into this company we'll see where it trades. it did price at the upper end of its range $72. guys, for now back to you. >> seema, thank you. as we await lyft's first trade billionaire investor warren buffett with a bit of a warning for regular investors here on cnbc just yesterday. take a listen. >> we haven't bought an initial public offering or i haven't, charlie hasn't, i think since 1955 i think buying new offerings during hot periods in the market, i don't think it's anything the average person should think about at all. >> joining us now is elevation partner's co-founder, early facebook and google investor roger mcnane me and his new book "zhu ucked" and jon fortt joins

us as well do you heed warren buffett's advice, or do you buy into the hype today >> i think it's always smart to listen to warren buffett, particularly when he talks about the stock market sara -- >> what about lyft how does it look to you? signs so far look good, right? >> it is a great deal for lyft, right. the company is in this battle with uber, and we've talked about this on other shows, and the challenge for those two companies is that there isn't room for both to participate and bet's a little bit like what we saw with xm and sirius, you know, where they need to raise a ton of money they are going to beat each other up like crazy so this is a fantastic deal for the lyft management team and for the early investors. i think for the public market buyer coming into today this is going to be a lot dicier and because it's the first one out

it's not crazy to see how the stock does well initially but in the long run they have a fundamental problem. it's not had a profitable business today, and they have a really well-financed much larger competitor, and the two of them i think are just going to have to slug it out until one of them either ones out of cash or the two of them merge. >> it's funny, roger john, remember, i did mention xm and sirius to you i think yesterday on set as something that we could see. of course, you always wonder from an antitrust perspective whether it could ever be allowed years down the road for these two to get together, but near term, john, did you hear anything from the interview with andrew earlier, anything you've done in your work that does indicate the path to profitability perhaps will be sooner than investors expect >> no, david, in a word, no, i didn't, and here's i think for investors is the conundrum on the one hand, yes, yes, warren buffett, greatest investor, et cetera, but you shouldn't follow him on the likes of amazon. he didn't see that coming, and i hear a lot of people talk about amazon when they talk about the

fact that a company like lyft isn't profitable, but if you think about what amazon was doing all those years early in its public life, it was building this logistics network that was unique, that nobody else had it was the foundation of prime, and i think you've got to the ask yourself with all these losses what is lift building that's going to put it the in a unique position versus uber and everybody else i do not think they have done a great job explaining that, especially because a lot of what they have been spending money on is marketing, driver incentives, a lot of the same people that they are marketing to can also use uber very easily the same drivers, drive for uber as well. >> well, they say they are the nice version of uber, and they capitalized on some of uber's troops in the last year. are you saying, john, that that doubling of revenue growth that we saw is unsustainable? >> well, i'm saying that infrastructure and competitive advantage goes beyond nice i'll tell you. what uber got a lot nicen that

amount of time if lyft stops paying these kind of incentives to drivers, we'll see how they feel about them versus uber once the public markets have their spotlights on them and they are under pressure talked about investor. you look through this s-1 and think about whether to invest or not, what's the sustainable competitive advantage. what is lyft investing in with all these losses >> yeah. you know, when it comes to uber which investors will probably be able to make a decision about pretty soon, the businesses such as uber eats or uber freight, do they in your mind sort of change the equation there in terms of the comparison with lyft >> yeah, so, david, i think we now have a new rule which we add to the warren buffett rule which is investors should always listen to jon fortt. i completely agree with what he just said. all the ancillary businesses at uber have a lot of interest. do i think that this notion that there are delivery services that

can be delivered economically to the consumer that have real value, that's a no-brainer the challenge i think on this whole thing is that the scale of these companies in order to be profitable has to be simply gigantic, and the market values that we're putting on them today assume that they will be profitable at that giant scale and i don't think there's any evidence yet with two players in the market that there's enough differentiation and whether it's eats or any otherance layer delivery service they aren't a big enough part of the piece to offset the damage of going toe to toe with lyft in the united states and with other players and in other markets, you know, every single day i think that's a tough, tough business, and as john said it's not like they are building permanent asset value here all of this is about competing in the moment. >> yeah, i know, but, john, at some point, when you make that move to autonomous and the costs potentially decline

dramatically, i don't know who owns the fleet of cars, but maybe it's some sort of leasing arrangement with a reit-like stricture for that, you would think that these buses look a lot different. i don't know how many years away that is, but can you start a discount cash flow mold pretty soon. >> yeah, and you've got to ask yourself how long term are you prepared to be as an investor? are you willing to wait five-plus years? some years it might look pretty bad. i mean, if you invested in snap, how are you feeling about that it's still relatively early in the game for them. they are not looking too hot they were kind of in the lift position versus facebook though they didn't come out first a second-tier player someone thought, hey, they look better than twitter and have unique things going on, a very unique founder and ceo in control, so how -- how long are you willing to hold your breath? how much faith do you have in the leadership, their vision, and, again, what it is that they are investing these losses in? i mean, $900 million that's a lot of money, a big hole that they will be digging

themselves out of if they succeed. >> i'm so glad jon brought up snap roger, can i ask you a quick question because snap is indicative of the fact that today doesn't necessarily determine what kind of investment itis. i went back and looked in 2017, first day, snap closed up 44%. it's now lost two-thirds of its value. >> so correct. jon is making a really important point about the driverless car thing. i believe the time horizon for that is substantially longer than the bulls would have you believe. you know, the history of automated vehicles which we've seen with airplanes and we had eve seen it with large ships is that you need to have special lanes. you need to have all kinds of, you know, essentially blinkers everywhere to make sure that the thing doesn't run into stuff we haven't made any of the changes to our transportation systems to support it, and so i think there's a lot of hope built into this valuation, and there may be a lot more that goes into it when it starts trading. sara, your point is exactly well taken.

people could be so enthusiastic because it's the first new ipo of this scale since facebook, and they may run the thing way up and if they do there's a lot more money to be made when it comes back down to earth. >> we'll talk a lot more about all of this. jon, thank you we'll see you for the big hour of "squawk alley." roger, please stay with us need to talk about the wave of ipos and where it puts us on the cycle on the last day of a very strong quarter >> people love growth and we're starting to get names that we don't typically see. embattled wells fargo ceo tim sloan announcing he's retired after two and a half years at the bank's helm. our wilfred frost has more on that news. wil has been following this all the way through. what have you got? >> good morning, david, yes, indeed as you said, tim sloan is retiring effective immediately. >> i'm confident in my ability to lead wells fargo through the work that remains to be done

it's become apparent that the focus on me has become a distraction, that impacts our ability to successfully move wells fargo forward. >> that was tim sloan, of course wilf having some trouble with his mike we'll get back to him i think to get more on that report, of course mr. sloan somewhat unexpectedly stepping down. sara, he said in many ways that he felt he became or at least indicated became a distraction to the extent that it was no longer beneficial for him to continue. >> i think there's some important questions going forward about politicians' role in this, the fact that you have influential politicians like senator elizabeth warren running for president so outspoken, obviously putting so much political pressure on a company where the board chose tim sloan. the biggest share herald, one of the most experienced shareholders that we cover warren buffett, supports tim sloan. what does it say about the influence of politicians and their ability to choose ceos, and what kind of precedent does

that set >> yeah. good questions all up next, we'll take you live to live the he's driverless center in los angeles andrew ross sorkin is there with a lyft board member ben horowitz you won't want to miss that and as we wait for lyft's opening trade, wl,onel d't go anywhere. >> big suspense. measure up? a cfa charterholder does. you've worked hard to grow your wealth. make sure you're working with a wealth manager who can grow with you. cfa charterholders have the investment expertise to unlock opportunities other advisors might not see. learn what a cfa charterholdr can do for you

at therightquestion.org

welcome back to this special edition of eson the street

let's send it over now to andrew ross sorkin in los angeles sitting down with ben horowitz, general founder and co-owner of andriese anne horowitz and more importantly a lyft board member. andrew >> ben is here your firm owns 6% of this company. over $1 billion now. when you invested in this company, it was not a clear investment which is to say there was a real view this was a winner take all market, something that roger mcnamie talked about. >> hasn't turned out that way. >> and here we are historically you make early investments in companies you haven't been a public company investor, typically not, how much do you stay in this stock? >> we're big believers, and the main thing is that lyft is gaining share. when you have a company that's winning share you stay in it, and i think it's going to continue to win share for the foreseeable future. >> how much though is that a function of discounting incentives, marketing and

promotion in terms of a money-losing proposition relative to a situation where there isn't that kind of spend >> yeah. so i think that's actually had a misunderstanding of what's going on because their marketing spend and driver incentive spend has gone down while their profit ability has gone up and their market share haynes creased over the last year so you really -- you know, like that's a they're, but it's not actually supported by the numbers the numbers say they are just winning people like lyft better. >> do you believe that there's a path to profitability, and what does that look like you to >> oh, yeah, definitely. i mean, i think if you look at the economics and they went through that with investors which, you know, is part of the reason why it was so well received is the economics are already good and improving at a very steady rate, and you can see that in the financials, so i think absolutely and i think the way pricing is now in the market between them in uber, like you can see the path to profitability.

>> how does this investment to you stack up against uber which is something that you looked at at the same time, too? >> yeah. look, so we like the character and the culture of the lyft guys better than uber, and -- and we continue to, and, look, we take a very long view of these things we tend to invest in things for a decade or more, so we're happy to be patient and like so far we're quite pleased. >> do you think this is a five-year story out, ten years out? >> we're huge believers. we think lyft is the best company in what is looking like one of the best markets in the world. >> to get to that place does it need international expansion do you see uber getting into eating or other kind of services >> we've added bikes and scooters so that's probably the first one, and i don't want to forecast them doing anything -- i'm a board member, not a ceo. >> right, right. >> but, look, there's -- there's amazing opportunities given the

position they are in. >> what's your take on what's going on in the valley right now when it comes to autonomous driving because that's another piece of this puzzle >> yes. >> but it also seems like the time line has shifted a lot. >> yes. >> in terms of the idea that it was here almost just a year ago people thought we'd be jumping in these things left and right and now not so much. >> well, look, i think, one, it's a hard problem. like it's really a hard technical problem, and, you know, the bar for autonomous cars is higher than the bar for human drivers in terms of safety, and i'm for that like i think that's a good thing, and -- and i think a lot of those forecasts were based like in we can do better than people we should put them on the road that's kind of adjusted to, no, they have to be like way, way safer than human drivers, and i think that's a process. >> what's your take on the dual class structure of this company, the idea that logan and john will own 49% of the voting control and only 5% otherwise. >> yes. >> and given what's happened

with travis kalanick at uber where effectively they stripped that away from him and some of the questions about facebook today and about snap and the idea of this dual class as somebody who is on the board >> somebody who is on the board has $1 billion worth of lyft stock, right, so i have skin in the game on this one, so i'm very much for it like these guys, one, they have got the best vision for the future of transportation two, they are the toughest most resilient founders in all of silicon valley and maybe all of business, and they have proved that out, and then, you know, like so would i rather have them in the ceo position or run an expander type? >> at the end. day is that money on the table that was left and a mistake or is that a good thing >> well, look, you know, these things, ipo -- the ipo market is interesting and so forth i think that you want your

investors to make money, and you want, you know, in particular like the people who believe in the company early to make a gain so i don't think it's terrible if it goes up, and i think that when a stock goes down, particularly in the first year after the ipo, that's a dangerous situation and in some ways in that, you know, people want to harvest their tax losses and these kinds of things so you get weird stock behavior that you don't want everybody making money is a good philosophy. >> how pivotal is the success of this ipo though to the rest of the unicorn or now decacorn ipos that are coming and some of which you've invested in and are probably thinking about the exit for? >> i don't want to forecast the ipo market that's like your job i think it's great when great -- it's great for the market. it's great for the country, and it's great for business when great companies go police, and a high-quality company like lyft going public is outstanding.

i think from what i've seen the companies going out this year are of the highest quality. >> do you think that there's an upper limit. jim cramer was saying a lot of ipos are coming, and how much of that can get soaked up by the market and investors >> look, i think there's a ton of interest and money wanting to invest in the future of growth i mean, one of the tragedies of the kind of regulation -- the regulatory regime of the stock market is we have like half the number of public companies that we, you know, 15 years ago, and that's basically done terrible things it's kept individual investors out and created a wealth gap it's really, really bad so to have high-growth companies coming out it's just a great thing. it's great for everybody. >> hi asked jon and logan about this, you were mentioning it and getting into the politics of the moment do you have any worry, not just

about lyft but of what might be described as the sharing economy, the idea that the political winds could move in such a way that all of these contracted workers effectively have to become employees at some point in the game? >> yeah. so, you know, i think -- that would be unfortunate as long as it's the same for everybody, then, you know, i think the business is still, you know, work in a lot of ways, but you talk to long people. the independence is a feature, not a bug, like to be able to work when you want, to be able to work for multiple companies, to do that thing, to be an owner of your business as a driver is a breakthrough, and it's not the kind of breakthrough that you want to -- you know, you don't want to move from ownership back to employment or from employment back to servitude or like, you know, servitude backwards from that, and so like pushing the world backwards i think is just a mistake from a legislative

standpoint, but, you know, like -- it certainly would be worse for the world and the workers if it went that way, by think the businesses would still >> where do you put that risk now, especially when you think about investing in new businesses that are in this space. >> so i think the -- you know, it's very hard to forecast policy because, you know, it depends on like the political winds, but, you know, so far what we've seen it's been, you know, mostly a local, not a national phenomenon, and that's much more manageable. >> for investors this morning looking at this ipo thinking should i buy, should i not you've spent a lot of time in this business, no, no, i'm not going to ask you that, butwhat is the comparable company? is there a comp out thereto that you would think about? when you've done your valuation work and put spreadsheets together on this, what do you think about it >> i think it's more like, you

know, it's an interesting thing because the -- historical companies that are most like them are the big telecom networks so, you know, huge infrastructure build-out to build the network and so forth but once the network is built it's just a super valuable thing and, of course, you know, the big -- that did run as a single player thing to start with at&t, and then, you know, it was broken into the baby bells and so forth, but that's the thing that's most comfortable, and that's i think the right way to think about it, but there's something exactly like it. >> i would ask the guys about this before. travis kalanick tried to buy this company in 2014 do you remember remember that? >> yes, that's a true story. >> he confirmed it as well do you remember what you told them then? >> i thought we shouldn't sell i thought that -- i thought the offer wasn't appropriate for the quality of the company. >> it was valued at $5 billion

then, maybe even less. >> i think he was offering like 5% of the company, if i recall correctly. >> he was offering 5% of uber. >> or maybe less, but 5% or less uber, yes. it wasn't $5 billion he might be saying 5 billion in today's dollars because uber is worth 100 now. >> right. >> fair enough, but i think we're trading above that. >> you are trading above that. >> and we will see where it starts trading this morning. thanks for coming in this morning. >> thanks very much. >> stay where you are, guys. i'm going to send it back to you? thank you, andrew, and thank you ben. andrew, we'll check back with you throughout the morning including the next hour when you'll be joined by another early lyft investor geoff lewis. as we await the first trade on lyft, how will this impact other unicorns waiting in the wings? here at post nine, pulitzer prize winning columnist jim stewart, roger mcnamee still with us from elevation out there. jim, the year of the i'mio this is obviously going to be a big bellwether

so far indications are good. it's pricing at the top end of the range. it's oversubscribed. they are selling more shares than expected. what's going to be the big test? >> well, obviously where it trades will be a big test, but i've watched many, many ipos over my career, and i've real el boiled it down there are two things here. there's the story, and there are the numbers, and the store to i think makes up about two-thirds of the valuation, and the numbers maybe make up one-third, so the story is real, really important, and so i think every one of these things you've got to say, well, what's the story here and lyft, lyft has a great story. i mean, there's a lot of uncertainty about it, but if you're looking at say what's the addressable market here? i mean, how big could their market be? i haven't really seen a sophisticated analysis of that, but is it all local transportation is it all automobile sales, i mean, but we're talking something really big here, and they can also go into markets that don't real very a local transportation market. they don't have cabs and things

like that, so it could be really, really big, and then you have the technological innovation area. if we get to the day, you know, of self-driving cars, all those labor problems and all those costs of drivers go away that is a huge upside. now it -- it's a long time to go -- >> a long way to go, but i'm telling you, what matters is the story. it's not like -- investors and ipos are not thinking about in many cases they should be, but they are not thinking about the practical aspects of getting there, but this is a -- i'm just saying that this is a really good story. >> understood for right now, but -- but the question is can you sustain the story the way that netflix was able to in its earlier years or amazon throughout the years can you sustain it in terms of having your investor base continue to believe, despite significant losses which are likely to come for years, that there are going to be significant profits? >> well, i think the danger when the story is really, really good is that the risk of not living

up to the story is much greater. take netflix i think the -- people didn't really understand the netflix story all that well. they didn't see how bigot addressable market was remember they were thinking it in the old day. >> they mailed dvds. >> i know. i was guilty of it, saying, right? >> that didn't seem like a super high-tech company. netflix to me isin many ways a investor the ideal situation because it exceeds -- it actually realizes a better story than it was telling at the time of the ipo can lyft actually do better than this story i don't know i wasn't in the presentation so i don't know exactly where they are going, but i think -- to look at the numbers for a minute, the price-to-revenue ratio here, which is all we've really got is pretty reasonable. i mean, it's lower i look at, you know, recent tech ipos, you know, snap which is ridiculous but twitter, facebook, google, it's lower than all of those, and some of them had really good stories as

well now, they are a little further out on the trajectory, the revenue growth is maybe not quite as fast and there's a lot of factors and on the face of it the revenue ratio is pretty stateable. >> on the sustainability, this is really a company and industry that's coming up in bull market in economic expansion over the last decade. most of its users are under the age of 45. are these people if we head into a downturn or recession are going to team caking lyft and ubers? >> it's a great question i think one thing that helps lyft and uber in this environment is car ownership is declining in that exact demographic. in fact, having driver's licenses, it was a trend that started a decade ago, of young people just not getting a driver's license, and i think all of that is immensely bullish. where i would push back only jim, he's very right about stories versus members on this one there's aspects of

the story that do need to be pushed on. one is the gross revenue number because really what sticks to these companies is the portion that they take out of it, and, you know, because of the amount of money they spend on marketing, even that number is i think suspect. the other piece that i think really matters relative to both young and old is that the story that you're looking at here is -- i think it's deeply inflated there's a very common thing about ipos the best companies don't have to tell a big story i mean, netflix didn't have any trouble getting public, just talking about what it was doing, not making promises about the future, so in my mind as a long-term investor, the bigger the storied component is of the thing you're buying in the ipo, automatically that makes it less attractive as an investment but in this case they definitely need the money so it's the right strategy for the poured to take

and for management to take and i really question ben horowitz's point about the telephone network being the comparable because i don't see the investment in physical infrastructure that, you know, would protect them from competition. i think the barriers to entry in this business are way lower than the investors would like us to believe. >> do you agree with that, the barriers. >> i agree that the barriers to entry is the key part of the story, and there are probably other experts and i do feel as in the netflix area, that there's limits to how many competitors can come into this business i agree with roger that it's not because of the infrastructure costs, but the user base i mean, how many apps do you want on your phone i now have uber. i have lyft and curb in new york city. >> do you have via i think three -- at least for

me maybe people want six. >> a part that have is you're price shopping. >> yes. >> which also speaks to one. problems here. they spent 37% of revenue last year on sales and marketing. they have go the to compete with the likes of uber. >> exactly. >> and it's costing them a lot >> the and if it's about price curb comes in. >> if this turns into an oligopoly situation, a little analogous to the rental car bills. you've got two or three dominant players, there -- i mean, oligopolies do compete and sometimes they do create crazily but logically oligopolies adjust their cars and their pricing to a margin maximizing return, and i would expect to see that in this business. now, they have taxi competition. they do have the costs of individual ownership they have some constraints on their price, but i would expect to see the pricing model here look pretty good for them some day. >> roger, back to the ipo itself i don't think we've ever had a

situation where the two main players in a particular market were going public within potentially weeks of each other. i don't know what that does to the lyft ipo, but uber is going to be right behind it. how do you approach it if you're an investor? >> david, i actually think that having the back-to-back like this is almost certainly a great thing for both stocks and i think it's super important for lyft that it went first, and i think it helps uber's valuation story because they are so much bigger so that if lyft gets this monster $20 billion plus valuation which they are going to get, that just says uber -- if you think lyft is worth that number then uber is worth a lot more let me push back on one thing. i completely agree with jim's economic analysis of oligopoly but these guys are valued like they are the next google or something, right, and -- and, you know -- i just don't see that the numbers at this point,

that's -- the numbers at this point say that these businesses are going to struggle to reach break even it's going to take years, and when they get there, what will you value that at? i mean, are they going to be 20% net margin profit businesses i just don't see, that and without, that i don't know how you sustain these monster valuations >> jim and roger, thank you very much great discussion. >> my pleasure. >> as we head to a quick break, a check on where the major averages stand on the last day of the trading quarter good momentum. the dow is up 128 points technology has taken the lead in the overall market which is up half a percent, hence the nasdaq up .7 of 1%. the ten-year yield back above the 2.40 level as we await the opening trade on lyft, we'll talk about the controversy over the dual-class share structure. e re" lle ghban of "squawk on thstetwi brit ck

good morning, everyone i'm sue her rara >> here is your cnbc news update at this hour a federal judge has struck down a small business health insurance plan touted by

president trump. it is the second setback in a week for the administration's health care initiatives. the judge called the association health plans an end run around consumer protections required by the affordable care act. treasury secretary steven mnuchin that he and trade representative robert lighthizer have concluded cop structive trade talks in beijing and added he looks forward to adding china's vice premier to continue the discussions here next week. south korea says its president will travel to the u.s. to meet with president trump for a summit on north korean nuclear diplomacy president moon will visit the u.s. on april 10th and april 11th and nasa astronauts nick hague and kristina koch suiting up for today's spacewalk they will replace batteries on the original solar rays. it was originally set to be an all-female spacewalk but was cancelled when they didn't have the right sized spacesuit for both women how that happened, i don't know.

you would think you would check that before you go up into space, whatever. that's the news update, guys i'll send it back downtown to you. >> or make some new sgluts that w was order, very odd. no doubt. >> we're waiting for the first lyft trade it's set to go public soon we're going to speak with early lyft investor and former board member geoff lewis later on in this special edition of "squawk alley" coming on at 11:00 but we right here on "squawk on the street." >> we're having our own special edition. >> yes we're back in two minutes. pars

tow is up 115 points let's get back over to seema mody at the nasdaq with an update on lyft as we await that opening trade. seema? >> reporter: yes the market has been open for about one hour

waiting for lyft to open for trade. we can see the team working here with jpmorgan, the lead underwriter. let's bring in the head of the nasdaq west coast operations to give us an update on where we are in the process. >> we're building the book jay heller, our ipo execution officer is disseminating the book as it's coming in and all the orders are being given out to the stabilization agent so they can make a call. >> what are some of the challenges you're facing given the size of this ipo >> we expect a lot of retail orders in this given the brand that lyft has so that will increase the size. oftentimes you'll see 10% to 15% of the ipo shares turn over in the first trade so it's really organizing all those buy and sell orders. >> we're about to hit 10:45 a.m. eastern when the shares are eligible to trade, so any indication at this point >> no indication on timeline now. this will take a good long while given the number of orders in the book, but we'll keep working with the underwriters and the street to figure out when that stock is going to open.

>> you along with the other nasdaq executives, you play an instrumental role in trying to get lyft to go with the nasdaq and open for trade here at the nasdaq versus another exchange talk to us about how that process worked. >> absolutely. we try to take a holestic approach with our companies and working with them throughout our life cycle we work through private market to provide liquidity before they go public and build our relationship with all the different products and services so hopefully one day they will become part of the nasdaq family. >> for the past hour it's been the ipo discovery process, right, that you've been trying to initiate. the company priced at the top end of the range, $72. where do we expect it to sort of open >> you know, that's the process we're going through. don't have an indicative price just yet but as i mentioned we're building up the book a million shares paired so far and we'll be closer to 3 million, 4 million, 5 million shares that will go to book.

we'll know more later. jay is making sure that all the orders are across the entire street delivered to the books right under their desktop and the street needs to understand where the orders are coming in and what the price is looking like. >> orders are coming in and once that process kicks off, how long will it take to align the buy and sell orders? >> it could take anywhere from 30 minutes to two hours. we'll work through the process and keep you posted. >> two hours, that would be 12:30. >> for the real el big ipos it can take that long but i suspect we'll be done before noon. >> before noon. >> jeff thomas, senior president of nasdaq. thank you. guys, that's the latest. we'll keep you updated on lyft's opening trade. >> thank you, seema. that helpful as public investors are set to get their first taste of ride-sharing, our deirdre bosa is at the san francisco airport, just one of the many places transformed by the rise of lyft and uber deirdre? >> david, the taxi line is still

downstairs, but at airports all around the world these spaces have really been carved out for ride-sharing and we're here at the lyft line because the drivers have played a critical role in the rise of the ride-sharing companies, but while today's ipo is going to make a bunch of early lyft employees into instant millionaires, the drivers are not getting rich of it and that's because they are independent contractors, so they have not benefited in the same way as say early employees some do prefer it that way because it gives them flexibility or additional income to their full-time jobs, but earlier this week we saw a very different story right outside of the san francisco leg of lyft's road show. there was a very large number of drivers. foreign investors, this represents a major risk and it could determine when, if ever, lyft becomes profitable. now aside from driver acquisition and retention,

there's a bigger question of regulation as i mentioned, they are right now independent contractors. they don't have things like benefits or minimum wage you can imagine what happens to the lyft business model if all of a sudden 1.9 million drivers have to be brought into the fold, and that would cause a lot of pressure on the business model. back over to you guys. >> deirdre, thank you. deirdre bosa well, one point of contention in today's ipo that give co-founders outsized control os opposed to class "a" shoulders and our andrew ross sorkin asked logan green about that this morning. >> we want good governance, dual class being one of them and independent share of the board and over the last several years we've been making great effort to make sure we have a really diverse board coming from all types of different backgrounds,

but collectively we really need to set the company up for this long-term opportunity and to create the type of durable growth that we're going after. >> well, joining us now two critics of the dual class share system, both institutional investors that manage billions and billions of public pension dollars. new york city controller scott stringer is right here with us in studio and another who asked lyft to reassess their dual class structure. you're always raising your hand. it doesn't necessarily seem to be resonating. >> we learn from pass mistakes we've talked a lot about facebook and accountability and some of the problems with the skewed board model lyft, unfortunately, is entering the market, but i think part of the risk is to this this

dual-class voting system mr. green and mr. zimmer get great credit for starting this company. it's going to be a $24 billion valuation, but we need to make sure that share sure share owners, people that are going to buy this stock have the right to have equal voting so we have checks and balances and i appreciate their thoughtful view of governance, but the real way to govern is not to own 5% of the company and yet have 49% of the vote that's what's inherently unfair and that's a genuine risk for some of these companies that become insular when they don't have to deal with their shareholders and owners. >> the counter argument you get from the likes of these founders and others is that it gives us the ability to make long term decisions without short term pressures that come from having shareholders focused on the short term and therefore we will actually make decisions that are in the better interests of the

company over that period of time what is your response to that? >> thank you so much for having me look, the one share one vote principle is a foundation of our corporate governance principles, but we're pragmaticas well aspiri as prinls pelled we think a sunset provision is a good compromise to give the founders of dual class listed companies the time to seek out their vision, to implement the innovation, and at the same time would allow the company to collapse into a one share one vote structure at some point in the near future. >> scott, have you had success convincing companies to do this? >> we're raising these issues, continue to move forward success down the road is what we're looking at i do agree, there's a way to structure balance in these companies. part of it is to have a sunset

provision. give six or seven years best practice to shape the company and then create an open, more transparent system i think this will be the model at some point in the country it is not today, but part of why we do this work is to bring more thoughtto independent directors, independent board chairs that's part of what the dialogue has been about >> you would think you will continue to make progress? it seems to me virtually every one of these well known companies that comes public with founders does have in some fashion a dual class structure many have sunset provisions but almost always come with the structure, uber won't, interestingly. >> but going back to the facebook problem, when you have an insular company and you have one or two people making all of the decisions and you don't have accountability, you do have serious problems there's real issues here and we pointed them out our work is we are long term

investors, we think of what happens 10, 20 years from now. as more of these companies get started and there are more ipos, there will be a greater cry from share owners to make sure it is a level playing field that we don't have two tiered ownership. when you have 5% of the company and have all of the votes, i'm in the election business. >> you would love that >> come on >> in your letter you raise a couple of other things people may not be aware of. they have a classified board meeting, only up every three years. takes a super majority to amenld the company by laws. speak to those provisions. >> thank you so much for bringing that up i think the classified board structure and super majority provision are two aspects that haven't gotten a lot of attention but are serious governance concerns. they continue to insulate this board and with the super majority provisions, these are things that require 75% vote of

all outstanding shares, which makes it almost impossible to change by law provisions like dual class or classified board structure, and it is run so counter to lyft's mission and progressive thinking and i think that this is so backward to their governance practices. >> so you buy uber and not lyft? >> we'll make the decision in the best interest of people we represent, our pensioneers, but we'll look at governance issues. that's a fiduciary responsibility we have we're not doing work to weaken uber or lyft, companies we could potentially invest in. we only do that if they're profitable and in the best interest of a long term investment strategy. governance matters to us that speaks to viability in the long term.

>> it's an interesting issue glad we were able to explore it briefly. scott, thank you. >> thank you. getting a quick check on the major averages the dow cut some gains in half in the last few moments. still up 56 points dow dupont weighs on the average. the s&p 500 is up only a tenth of one percent we'll keep an eye on it. don't go anywhere. special edition of "squawk alley" from the nasdaq as we await the eng adonifopintre lt.

welcome back, special edition of "squawk on the street" and soon to be "squawk alley. we await lyft's opening trade. we are expecting stock to open in the next hour the first, the bellwether in what could be the year of the ipo, jon indications are strong question is, is this a good long term investment for investors? >> that is the big question. you have been going through so many of the issues in "squawk on

the street" around governance, around valuation, around competition with uber. yes, there are so many different companies lined up to ipo, unprecedented insurgent unprecedented serge. levi's debut got a strong reception, we'll see david, this is the first of ridesharing companies to go public uber hot on their heels. one other thing, these services touch 95% of the u.s. population they say 1% of miles traveled in the u.s. happen on ride share networks one key question is, is that a massive opportunity or sign in the decade or so they have been around they're not going to be mainstream. >> limited to urban areas. >> or the value proposition isn't there. >> right, for longer trips that's a good question

it is an enormous market, global market talk so often about this dd in china is the dominant provider there >> founders call expanding overseas a call option which is also a big question. they're largely local. jon, now we'll send it to you at the nasdaq to pick up the key questions as we await first trade. >> we will take it it is 8:00 a.m. at lyft headquarters in san francisco, 11:00 a.m. in times square and we are aweightiaiting lyft' opening trade. "squawk alley" is live ♪ ♪