alley" is live ♪ ♪ cutting in the deep ♪ rolling in the deep ♪ you had my heart inside of your hand ♪ ♪ wish you never had met me ♪ and you played it to the beat ♪ ♪ rolling in the deep ♪ baby i have no story to be told ♪ ♪ but i found one of you and i' going to make your head burn ♪ ♪ think of me in the depths of your despair ♪ welcome to "squawk alley." we start with facebook today, continuing concerns over mark zuckerberg's commitment to the company's privacy practices. the company is rebounding after the journal report sent the stock down 2%. stephanie, kevin delaney with us

is to start the hour what did you think of that journal piece? we're both journal alums, they put work into that, yes? >> a lot of shoe work in there they didn't see the emails themselves seems there's compelling evidence that the emails reveal what i think we have long suspected which is there is a pattern in this leadership of trying to brush this under the rug or dismiss it or not taking it seriously enough. this comes down to more than just the letter of the law or in this case the letter of the consent decree this is about the spirit of it is this a leadership team that wants to come out and say we're going to go above and beyond when it comes to the privacy of our customers, our most valuable relationship or are we going to try to do the bare minimum we can in order to abide by the consent decree. >> the question is who's the customers. does this matter until an advertiser says i'm not spending

my dollars with you. >> that's true what this revelation -- we know that facebook violated the consent decree cambridge analytic, that it misled its users over privacy. i think the implications of what happened yesterday, there could be public relations problem. sort of an oil spill to communications with zuckerberg that could come out, which likely intensifies facebook's willingness to settle with the ftc. >> i'm going to do something unpopular and take up for facebook on this one being that in 2012 they were just barely passing the 1 billion user mark, facebook was a very different company than the company today. the year before they opened up the facebook platform in a way i think was unwise and handed out data to these developers and it seemed like they didn't have a grasp of what this would do.

and the mark zuckerberg, email seemed to be him saying really they can do that in 2012 that means something different when viewed through a lens of 2019 and their dominance and understanding just how destructive that move of theirs, giving away data was >> i disagree. i think the argument you made was valid in 2008. 2012 facebook was under a consent decree. >> not yet >> there are parentally other emails implicating as well we can't actually -- by 2012, facebook was -- had been not only sort of identified by regulators as having problematic privacy but the regulators did take action which was the consent decree. >> it was out there, what were they going to do >> the practices as we know, including subsequent years with cambridge analytic, were not compliant with at the least the spirit of the 2012 consent

decree but pretty apparently also literally with the consent decree >> what i can't help but think we don't know whether there's a smoking gun or not, we don't know the specific details of the emails or how many emails stretched out over a period of time i wonder if there's this debate about whether the ftc is going to name mark zuckerberg and hold him liable for the situation and what does this report do for that argument? >> i think that's part of the public relations challenge that kevin referred to earlier. this makes it very personal. this isn't an anonymous set of executives hashing out and trying to understand and, you know, to john's point, look if the context of this email really is, i didn't know this was possible, that's certainly something to consider. but i don't think that the sources that have been talking to the journal are sharing this information because it seems like maybe there's a misunderstanding and the ceo

didn't realize all this stuff was capable of being shared. i think these emails, the fact that they're coming to light, the process to me suggests that, you know, mark zuckerberg, there's a name and a face now associated with this particular problem and it is the ceo, one who has from day one made it very clear that he is -- has super voting rights, super control, and so that he would suddenly be what who? there's a problem? me seems a little out of keeping with the way this company has been run >> what did you make -- i'm sorry you were going to say something. >> it has implications i think for how it plays out in terms of regulatorsand potential legislati legislation. pr becomes one of the things that is a factor in the outcome for facebook we saw at their annual meeting, the majority of voters, shareholders who are not mark zuckerberg voted to remove him

as chairman. he controls the company but that says something significant. >> it's symbolic. >> totally symbolic but it's significant in the next phase that it emboldens ledge slaytgis to take a hard line against these companies. we know elizabeth warren has identified it. >> let's turn to i.p.o.s you have extreme volatility in beyond meat. fiverr went public in the last hour crowd strike joined us yesterday up more than 70%, higher today this is what that ceo said about the upswing. >> we'll let the market dictate the pricing. we're looking at value long term for shareholders and we f >> and you have chewy tomorrow,

is all of this slowing down, you have bill gurley tweeting about the broken i.p.o. can you imagine if a cfo gave away half a billion dollars in market cap because the issue was misprized, are they >> i don't think it's slowing down, we have slack, we have airbnb farther in the future but we have a bunch of names looking to take advantage of their conditions and the market conditions which are favorable at the moment. >> the flip side of the gurley argument you can say uber was mispriced, too, right? >> sure. to jump on what kevin said i think a lot of the companies are turning to the public markets for what it was intended for, they need the money we work is in a position to fund the growth that it has projected and build its grow out, they need to go to the public markets because they need the cash.

>> it looks like, relatively speaker uber was priced right. you can get it wrong a little bit to the upside or down side but compared to 70%, depending on how you look at it, they got what they were going to get. granted, the markets were in r turmo turmoil, we had the tariffs p stuff and all that but really for the company this is about getting the most cash that they can for the retail investor it's about getting the best price you can for me those are at odds. >> this is a debate. you have companies that tried a bunch of different mechanisms to offset this. there was the dutch auction that google used to find the perfect price in the market. you have the direct listing which slack is going to use which spotify used successfully. i'm convinced this is going to go on forever and ever the truth is you have -- bankers don't know where these stocks are going to trade in a week so it's easy to look back and

say they mispriced it. >> one of the things i find fascinating coming out of this i.p.o. cycle if you have, you have chewy going public tomorrow, they're the ecommerce platform for pet food. mohawk is expected, ai, you had revolve which did well last week some of these other more traditional industries that are maybe using technology to reinvent themselves. is it a situation we're seeing what's old is new again? >> i think it's a really mixed bag. i think the thing that has been most interesting to me about this i.p.o. cycle is the success of the enterprise names over the consumer names i think it underscores the fact that these enterprise names are going public at a time when they have big customers look at crowdstrike, they have adp as a customer, cornell hospital as a customer

they're coming to the market with reliable and large sources of revenue that will continue month after month after month. with these consumer names i think the risks are greater. i was listening to the fiverr ceo, he was talking about their whole business model is contingent on the freelance economy which is so full of uncertainty depending on how economic conditions go, how regulators decide they want to classify workers there's more uncertainty there than selling a subscription to adp. >> levi might argue the other way, maybe less tech oryebted obviously. >> i think those companies rely on consumer trends the levi story is a turn around story. this was a company that was left for dead and the investor excitement around the company was the turn around and buying into an american icon. >> it leaves the question, though, are retail investors

buying into these i.p.o.s this year, are they getting a good deal >> to kevin? >> literally crickets. >> it's impossible to answer that question. i wouldn't have a view of evaluations, i think everyone agrees the market is richly priced in general. what we've seen is that a bunch of these companies, you know, lyft, the classic example, super interesting i.p.o. but it's unclear when they can reach profitability. it's hard to answer that question that you just raised in some of these circumstances. we don't know -- you can't do a fund men cal valuation easily when there's no time horizon for period of timabili profitability. >> some of the bulls would rather you don't let us dream. >> to stephanie's point, i was looking at up work, which is a freelance marketplace as well, their shares are down 25% in may

over investor concerns about the outlook, slowing growth for the freelance marketplace. there are fundamental questions. i don't know exactly how to compare that to fiverr's business but that would raise questions for me as a consumer if there are macro concerns about an already listed freelance marketplace that have sent shares down 25% in the last month, that's a warning sign to me. >> his argument a moment ago was if employment goes down, freelancing goes up, because people look for work but we're going to have to wait to see the macro effects at work guys, good discussion. thank you, stephanie and kevin. >> after the break, semi is trying to rebound this morning after falling more than 2% yesterday. dan niles joins us and later is chewy's coming i.p.o. more bark than bite

we'll discuss what we should be looking for. we're back after a break ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow. you set it. nasdaq. rewrite tomorrow.

welcome back, stocks are trying to rebound after getting slammed in yesterday's session led by the likes of lam research and applied materials. the sector is coming off a 2% drop, its worst performance in a month. our next guest saw it coming, tweeting this week, most names

will cut forecast when reporting due to bad in demand and elevated inventories dan niles joins us on the phone. good morning, dan. >> good morning. >> how much of this short call has to do with china >> very little, actually you read part of that tweet. on the back end of that tweet was we think they're going to cut numbers even excludeing huawei for us we look at huawei and that's a risk the stocks go up because as you all know and we've been talking about, there might be a meeting between president xi and president trump at the end of the month that gets resolved, obviously that should be good for semiconductors to some degree all the companies have come out -- well, not all, a good portion came out saying huawei is this percentage of revenues we're cutting based on that the issues i have is with fundamentals outside of that, if

you look at whether it's pcs which we think with shrink this year smart phones, next year will be the 5g cycle, which is when i think you'll see growth. automotive, china's been 10 months negative auto sales year over year. you look at hyper scales spending, what facebook spends google spends that went up from a tremendous forecast to now companies are trending off that. as i think kevin mentioned earlier, the market is richly prized semiconductors are priced more richly, they were hitting all-time record highs in april when we were one to two quarters into a down cycle. >> it sounds like you're buckling in for a long-term then we're expecting a new smart phone cycle the holiday season, apple and others, pcs, too, but

after that what's going to change the demand picture if not the holiday season >> the holiday season i think is going to be a big disappointment because apple doesn't have a 5g phone. who's going to spend over 1,000 when if you wait another 12 months you can get a 5g phone. so i think this holiday season is going to be a big disappointment and smart phones is the biggest in demand for semiconductors it comes down to what are the fundamentals you have at least another -- the call the firm made on semiconductors and why they downgraded finally, you know what, we might have a problem until the back half of next year and a lot of investors weren't necessarily thinking that. so i think the holiday is when you can end up in real trouble in the semiconductor space. >> why do you think wall street has been optimistic about

semiconductors >> that's a great question i've been managing money for 15 years. the last downcycle or recession was over 10 years ago. a lot of people on wall street have never seen a real down cycle where stocks go down 50%, that's what happened the last two recessions so you've been paid to always catch the falling knife or reach for it so i think everybody sort of agrees the odds of a recession have gone up, we're talking about fed rate cuts for a reason when you think about it from that angle, optimism runs rampant right, every semiconductor company, this is part of the reason i'm negative, when they reported march they all said the back half is going to be great. if you look at the forecast for most of the names you have above-seasonal growth in the last nine months of this year. and the in demand picture even before china and huawei started

didn't look great anyway that's the problem i have. that's why i'm focussed on stocks outside of the semiconductor group. where i think fundamentals are actually improving, not getting worse. >> i'm looking back to a note i took when you were on in august of last year, you said we own one semiconductor stock, that's it you thought trade tensions with china would go on longer than anticipated, that's why you were ba ba bearish, do you still own that semiconductor? >> first of all i should send a check for that puff, i appreciate it. yeah, i think the thing is, when you're dealing with the markets and stocks moving this fast, you've got to have a very long-term view, as you rightly pointed out, these are problems i was seeing back in august of last year. that obviously hasn't changed. it's obviously gotten worse. and so, for me right now, you

know, we don't have any stock in semiconductors right now we got rid of all of them. we put shorts on on tuesday, we'll put more on as we go forward. i think from a long-term perspective, we're going to be pretty negative i think through a good portion of this this year, at least through the summer, unless stocks rerate a lot lower and we get paid to take the risk whereas most of these names right now are richly valued. >> fang, we like to talk about those names quite a bit on this show as well but if you look quarter to date, the second worst performance within that name of big tech names is netflix what do you think of that? >> it should be. it should go down more once disney launches. one of the names we like a lot is disney. and come november, disney is

going to launch their own over the top service. i know i've talked about netflix before here's my problem with netflix netflix is going to lose $3.5 billion in cash flow this year they're going to have negative cash flow of $3.5 billion, it's valued at $150 billion you have disney coming in and they're launching a service around 7 bucks, netflix's average subscriber is $13 a month. they'll have plenty of cash flow to fund it from the rest of their businesses and this is disney, they'll ramp to 150 million subscribers or so by fiscal 24 if you believe their top end estimates. netflix right now has 150 sue kriebers it's hard for me to imagine that netflix continues to add subscribers at the rate people expect when you have disney at 7

bucks a month and netflix at 13, i think netflix has a huge problem in the fourth quarter. anybody who doesn't have a service is thinking of adding one, they're going to think of disney first before netflix. people aren't going to turn off their netflix but i think in terms of the incremental subscribers out there, i think disney gets the majority of them. >> you put another stake in the ground we can check you on in a year. >> please do you have a better memory than i do >> carl does thanks as we head to break, take a look at shares of fiverring, which just went public at the stock exchange they're up 44% right now how about twitter, that's down over 2% after it was reiterated a sell on that stock it's actually down 4% now. we have more "squawk alley" straight ahead don't go anywhere. your daily dashboard from fidelity. a visual snapshot of your investments. key portfolio events. all in one place.

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welcome back to "squawk

alley," two tankers reportedly attacked this morning off the coast of iran. sending crude and tank -- stocks of operator tanks higher dan murphy is in dubai with the latest dan? >> reporter: this is a very serious story we're tracking here in the middle east and a major investigation is now under way after what is feared to be a simultaneo simultaneous sabotage attack on these two tankers. we can tell you the first ship involved is japanese owned, and look at these pictures that give you an insight into how severely damaged the ship was it was moving methanol from saudi arabia to singapore. it suffered serious damage in its hull it's believed all 24 crewmen were forced to abandon ship. reports suggest the damage was

so significant, it could be consistent with a hit by a torpedo. the second vessel involved is norwegian-owned. it was also transporting crude products into asia it is also believed a fire broke out on board and its 23 crewmen also had to abandon ship and be rescued. we do not know who or what caused this incident no individual or state actor has come forward to claim responsibilities but it'ses important to point out this incident happened near the strait near the coast of iran one of the world's most important and vital choke points this has the potential to raise tensions across the region further. this also follows a swaabotage attack on four tankers off the coast of the uae a month ago

it was believed during that incident, mines were used in what were described to the united nations as a quote sophisticated operation by a state actor. the finger of blame has been pointed towards iran but it has not claimed responsibility for this attack. at the same time we cannot assume these two attacks are linked as i pointed out before, an investigation is still under way. either way, this incident has raised tensions and caused tensions to flare in the region. that's part of the reason we saw crude oil prices jump 3% early on in the session. >> thank you let's get to sue he are a for a news update. >> reporter: good morning, everyone here's what's happening at this hour the house intelligence committee hitting michael flynn and rick gates with subpoenas related to russian election interference.

california congressman adam schiff said the subpoenas were issued because flynn and gates have refused to fully cooperate with congress. officials say several law enforcement officers were hurt during a protest in memphis sparked when federal authorities killed a man they were trying to arrest a crowd threw rocks at memphis police officers. three people were arrested in the violence amanda knox is back in italy for the first time since she was acquitted in the 2007 murder of her british roommate knox returned to attend a conference organized by the italy innocence project which seeks to help people convicted of crimes they did not commit. here at home it's the 119th u.s. open championship teeing off today in pebble beach. brooks koepka comes into the tournament having won the last two years and also won the last

major, the pga championship in may. the weather is beautiful out there. a little marine layer coming in. that's the news update this hour back downtown to you i love pebble beach. >> you know it well, sue thanks still to come, move fast and break up while individual states are getting into the anti-trust fights against big tech. meantime, dow session high 142 about 100 points off of that as we're trying to avoid teehr days down. we're back in a moment my degree from snhu has helped me tremendously. the flexible class schedules allowed me to go to work full time, run my catering business and be a mom and parent. when i reached this accomplishment,

it was like, it's here, it's happening, it's now. we at southern new hampshire university are the ones who succeed. we are the ones who break through. 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.

welcome back a warning for big tech doj's anti-trust chief saying this week that standard oil offers lessons in his approach to tech. an assistant attorney general adding the antitrust division will not shrink from the critical work of investigating and challenging anticompetitive conduct and transactions was justified. good morning first off, let's start with your reaction to these comments this week it seems like he laid out the case for this antitrust scrutiny >> i don't really think you can read too much into his speech in terms of the likelihood of an enforcement action brought by the justice department i think the principal messages he was trying to make in the

speech one the copies on the beat were looking at it and two we have the tools we need. we don't need outside interference and we don't need new legislation. >> he also did cite the antitrust trust case against microsoft, which you were involved in. how did that play out? how did this set the stage for what we're seeing in terms of this more critical lens on tech today? if he were to consult with you, how would you advise him based on that experience >> i would advise him first and foremost to make sure he's investigating the facts and understands them thoroughly. i think he correctly noted that the microsoft case demonstrates the suitability of the antitrust tool kit for dealing with matters of technology in the digital age, for addressing businesses with network effects such as those we find in the digital platforms and bringing

the cases even with products that are given away for free in that case i think the microsoft case was important and he's correct in emphasizing that. >> is it odd that all of these companies, apple, google, facebook, amazon, you can count some others are being scrutinized at the same time when their business models are so different it's not illegal just to be big. >> no, it's not illegal just to be big a violation requires proof of anticompetitive conduct. i think there's a broad populist sentiment in the country a concern about private power that's exacerbated by the tech platforms because they have seeming boundless capacity to grow because they're newfangled and invisible technology and perhaps most important because they implicate other values such as privacy and sort of the

communications and political community. so it's not surprising that there would be a hard look at those platforms. each of which, in its own way, have been an aggressive competitor and does seem to have considerable market clout. >> you say if there is a solution, it's probably in sector based regulation. is your argument we're living more in an ftc world than doj world on this? >> i'm not sure i mean the only solution is in sector regulation i think that he is right that the antitrust tool kit is sufficient concept shlly the problem with antitrust law as a tool to deal with those platforms is those concepts have been con trued in some cases to make conservative legal principles and put a high burden of proof on the plaintiff. so so i think you have to have

enforcement agencies willing to push the edges a little bit and judges willing to listen to new arguments. failing that some kind of sector regulation might be the most effective tool if one believes there are problems that need to be addressed i'm not sure the sec is the right agency, some have proposed the creation of a new agency or new regulatory authority for existing agencies. >> doug, thank you for joining us today key insights on a key topic. thank you. >> thank you when we return, why the rush to go public is not slowing down any time soon. we're back after a quick break ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow.

you set it. nasdaq. rewrite tomorrow.

i'm scott wapner, here's what's coming up we have the latest memo from howard marks who takes on several of the current market conditions we'll debate whether he is right. a well known strategist just cut his earnings outlook is his s&p target next. disney is the call of the day. we'll do it at noon. we're about 20 away. see you then. >> and for now let's get to the cme, rick santelli has the exchange hey, rick. >> thank you very much at next week's fed meeting and the issues involved they have a get out of jail free card on

inflation potentially but the big thing i see is right here, a pillar maybe there's a new pillar we have new pillars now, maximum employment, stable prizes. this might be a pillar of the community, that'sglobal trade. how will the fed tackle global trade? i have no idea i'll tell you why i have no idea, when you look at the data points, the economy and market, and you didn't know there was trade infractions going on between u.s. and china and the closed chapter on mexico, you have have no idea. isn't that what the fed is supposed to monitor, they're thinking about the other issues, maybe the economy don't notice it, but obviously the supply chains are going to be disrupted. i think that's a possibility. >> i wouldn't dismiss it think about the fed when they do stress tests, they try to create conditions to see how banks react. i think the president by default

has created a stress test of adaptability for supply chains many ceos think it's working, they don't see the effects, they're getting along without it why is that important? i don't think it's going to be totally undisruptive, but i think it's a good lesson because the more dy veeiverse fied the s get, the more protected we are as a community there's one thing we've all underestimated i think and that is de-globalization. i think globalization may have been great for multinationals but societies and countries and the unification process and governance they're in moved way slower than what the business side did that catch up is going to be a tough deal i don't see it diminishing any time soon. so maybe multinationals might have a tougher time but i think in the end this particular adaptability test is going to

prove supply chains are more resilient than many political analysts think back to you. >> we'll talk to you in a bit, rick forget plant based meat, how about plants the ceo of leaf liling, going to talk to us about the pricing for cannabis we'll weigh in on chewy tomorrow, what investors should be looking for in a minute stillg a new house. is it that obvious? yes it is. you know, maybe you'd worry less if you got geico to help with your homeowners insurance. i didn't know geico could helps with homeowners insurance. yep, they've been doing it for years. what are you doing? big steve? thanks, man. there he is. get to know geico and see how much you could save on homeowners and renters insurance.

cannabis stock seeing big games this year. amid the growth, though, leaf link has announced a billion customers orders that means they account for 16% of all cannabis wholesale seals. joining us their ceo ryan smith is with us you have a pricing guide which people can look at online and we talk about the space in a hoe moj nous way it's not at all. pricing varies around the country. >> each market is spread by their own state boundaries and can't transport across those lines so pricing wildly varies. >> what's the most interesting dynamics happening right now. >> out west are terrific for

growing outdoors when you see oregon trying to create legislation for trying to ship across state lines. >> what would it take to see that legislation go through, a, and b -- well, let's start there. >> it passed in both houses in oregon and it's on the desk of the governor to sign it's law when it's federally legal so it's cued up to go, similar to the acreage deal with can pi and crosses to an action when the change happens. >> given the fact you have so many varying prices looking across different states and regions, is the time coming to see some kind of future on cannabis >> potentially we've seen a few demos of platforms doing the commodity exchange, definitely more advanced than where the market is right now but that's to come. >> you have a lot of data here based on your own b to b business. >> we're moving a billion

dollars in the marketplace but we've historically done a billion over the last three years. >> does it become more valuable or less valuable with laws changing, you don't have fragmentation across state. >> the number one question our clients ask, where is the opportunity to launch into this market, and we have that information for them i think a lot of numbers you see are retail numbers this is organic numbers from our own marketplace. >> cartridges, edibles, flower, what's the fastest growing >> it's brands the margin we think is to be made on cpg pack angaged produc flowers is becoming what it is we have 80 brands launching every week in the space. >> 80 brands a week? >> yes >> give us examples. >> anything with fat or sugar can be infused with thc, we have

170,000 skews on the platform, anything from beef jerky to coffee and tea anything >> because it binds to something in those types of products or what >> the sugar and fat is what it combines to and you have interesting new technologies coming out that allow it to potentially protect new product >> you would say the growth is better there than say locations or topicals or things like that? >> those markets are growing as well cbd is a hot topic there but we place where we think the biggest companies will be the most commonly used and frequently bought. >> in terms of your business model specifically, wholesale, you're supplying to retailers as well are you supplying to retails like kroger who announced they will be getting cbd in certain states >> our marketplace, we're not a cannabis company we connect buyers and sellers. if you're a licensed seller, you can have an be act on leaflink

and create a card with the brands and process transactions. maybe eventually we can expand the community but we have four out of five retailers in the states with leaflink cards. >> what are the plans for you being a data company yourself? >> that's definitely being considered but right now we want to create a paradigm to go to marketplace. at home you use it text to phone calls and we want to use it in this space so we can design instead of disrupt now and be in that industry a few years down the road. >> we discussed this and people would come on and giggle and snicker and a generation of people in the business who never thought it was that funny, who actually thought it was pretty serious. is that how you see it >> we were getting inbounds when we were raising capital two, three years ago to do you want

to be in this space to this is genius and now we feature it in job descriptions because it makes it all the more exciting. >> that's exciting times thank you so much. please come back we're getting a check where we stand across the major averages still in the green but off the highs of the morning d dow up 55, s&p a third and nasdaq high performer up .5% un"" "i've seen a cat without a gri, but a grin without a cat." hey, mercedes, end audio. change lighting to soft blue. the completely reimagined 2020 gle. with intelligent voice control and available third row. your adventure awaits. visit your local mercedes-benz dealer for exceptional lease and financing offers. mercedes-benz. the best or nothing.

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shares of fiverr this moring debuting and soaring more than 5% ceo micha kaufman joined us last hour take a listen to that. >> we're not here for day one or opening price. we're here for the long haul and that's how we think about the business so i think in general the markets are good, the reception is great, the opportunity is amazing, the growth high i think this is an opportunity for us to have that growth while gaining the market trust.

>> meantime there's more another tech unicorn set to make its debut here at the nyse tomorrow online pet food supplier chewy set to price tonight our leslie picker scoured the s1 and joins us now on what we could expect. >> in about five hours we may have a better sense of chewy's ipo price. they're the online retailer acquired by petsmart in 2017 price tag was $2.5 billion and five years later looking for $8 billion, more than twice the valuation in the sale. the company boosted its offerings by 12% yesterday on better-than-expected demand. they will raise another $100 million to be raised by chewy itself and petsmart will retain control with a dual class structure. we're getting used to those dual

crass structures these days. top line growth last year was 59%, to get to $3.5 billion in sales. one interesting factor to note, chewy specifically cites amazon pet product offerings along with a potential headwind, along with general competition in the industry they will list under the symbol as chwy and will begin trading tomorrow. >> is petsmart public? >> they are public. >> okay. i couldn't find it it seems interesting to me i expect this to be an omni channel play down the line it's interesting that chewy, a brand that at least for people my age, in their 40s, i guess, know less and don't have less, no less than petsmart and ends up being maybe the play on this market. >> that's right. and this is a growing market they're looking at growth rate about 5.4% each year in pets in

general across the world they look at the total market and i think that's what brings a lot of investors and contributing to the greater-than-expected demand, not just hype with people buying things for their pets and people getting pets but the humanization of that, and they talk about this in the s1 as well, giving pets better food, places to sleep, taking care of them as if they were a human as opposed an animal. i don't know what people did 50 years ago but apparently these days they're taking better care of their pets. >> you leave your dog in the kennel instead of bringing them on the airplane is what usually happens. >> right, right. >> these companies that have gone public in general intended to go really well. what i find fascinating, when you look at the ipo pipeline, you have tech companies, ones are very focused on tech companies and then other types of companies like chewy, for example like revolve last week,

that maybe aren't traditionally tech but have tech intergreated into their business model. and i just wonder how hard that's being pushed and what that discussion looks like as these companies come to market >> i think that's an important point. quickly, petsmart is not publicly traded. >> and it's almost immune to economic cycles because what are you going to do, give up your pet? >> and they mention that, it's not thin stock but one of those type of companies people will hold because they look at it as something people won't slow down spending on their pet because the economy crashes. but to answer your question, morgan, i think it's a good one. you have a lot of these companies, we will see the wheel well come out in a couple weeks. and another company that's much

more consumer focused and it may seek more of a tech multiple because they have a website and may have proprietary technology. >> so we will see you tomorrow >> exactly. >> like every other day the last couple of months leslie, thank you. market hanging into gains at 55 fresh headlines on the oil tanker for that let's get to the judge. carl, thanks, i'm scott wapner the gate weight, stocks off to the best start in nine years can really keep climbing no matter what the fed is. it is 12:00 noon and this is "the halftime report." >> announcer: fed watch, six days to decision day s&p, nasdaq and dow are all up about 5% to date are we range-bound until chair powell speaks? is the energy sector about to get a shot after an explosion in