♪ think of the amazing repartee ♪ ♪ if i could walk with the animals, talk with the animals ♪ ♪ and they could talk to me ♪ think what fun we would have asking crocodiles for tea ♪ ♪ lunch with two or three lions waltz with sea lions ♪ >> welcome to "squawk alley," i'm carl quintanilla, jon fortt is here. ryan cohen will join us in a little bit dom chu is on the floor with the latest >> reporter: we're tightening up right now. we got as high as 38

you can see behind me, 35 to 36 is the indication. the market makers here are yelling out a number of prices and levels and number of shares. what they're doing right now is trying to get down to a price that can clear the most number of shares out of here. we're getting close to that number right now at 35 1/2, which is the midpoint of this indicated range as of this time, you're still talking about an approximate market value range of just around 14 to $14.5 billion. so very much higher than the 15 to 17 and the 17 to 19, the 19 to 21, and the $22 open. and then the 26 to $29 indication that we first got when this came to the floor. so as things stand right now, they're yelling out a bit more we'll bring you more details but 35 1/2 is the midpoint of the current range. we could see this stock opening up sometime in the next few

moments depending on how quickly they can get those orders together to find the one price that clears the most number of shares for the opening trade back to you guys >> thank you very much, dom. leslie picker is here. jay, what strikes you as interesting about this name and your flexes on the week we've already had? >> with chewy, unlike, say, crowdstrike from earlier this week, the barriers to entry aren't obviously there and a great company, but as with many of these issues, there are questions about the valuation that the market is talking about, is it going to be a good investment on a point forward basis. >> and the answers are >> i wish i knew you know, i could have retired long ago if i knew that. >> leslie, your thoughts on where we are and given the indications this morning. >> oh, i think what's remarkable

is the valuation here. just to put things into perspective, dom was quoting 35, 36 a share petsmart itself, the parent company of chewy, that was acquired by bc partners in 2014 for $8.7 billion, that's half the valuation we're looking at for the opening trade today. blue buffalo was acquired by general mills about a year ago for $8 billion so thing is coming out at $22 per share, $8.8 billion. opening trade is looking at, you know, 60% higher from those levels soremarkable what we're seeing today, especially since this is an e-commerce company. they sell pet food they're in the right space at the right time looks like they've begun trading. >> 36 and change here, guys, which is about 64% gain at the open again, as leslie pointed out,

priced to 22, which was above the range. jay, have you developed a model to see how day one puts you in good stead or not in the weeks to follow? >> yes and the model is that there is not a lot of predictive color. if it starts trading down, there's a tendency to drop a little bit but for those that jump on the first day of trading, there's no easy trading rule to predict how it will do in the next few weeks or even the next year. >> jay, i'm wondering, with chewy in particular, it's still majority owned by petsmart which has a whole lot of debt. people who are buying the stock today will not really have any say vote-wise in the direction of this company. so what are the dangers, what are you really getting if you're buying chewy, and don't really have a say in what petsmart does >> there is that corporate

governance issue but on the other hand, if the parent company does something that's obviously harmful to the chewy stockholders, there's also the legal avenue plaintiffs' lawyers sometimes overreach, but they do offer minority shareholders a lot of protection in a case where there is a parent company or a private equity company or dual class shares that does not give public market investors control >> let's check in with dom over at post 5. dom? >> reporter: what we've got right now, guys, is a high intraday of $38 after pricing at $22 per share and then opening at $36 per share so as we talk about the movement that we're seeing so far, remember, we did see a 26 to $29 opening range when we first started quoting the indications

on price as of right now, what we are seeing is, again, a new high, again, $38.50. you're talking at this stage about a 73% increase in price. to many of the points that you guys have brought up, this does kind of call a little bit of attention, not necessarily negative or positive, to the idea that there is a healthy amount of demand for certain brand names out there in terms of private companies on the ipo side of things, chewy, which does have competitors out there, is now valued at north of around 14.5 to close to $15 billion at this stage, making certain assumptions for the number of shares, the green shoes and everything else that will happen still, on an estimate basis, this does really kind of raise some flags about whether or not the ipo market is near level some people were skeptical about it i would also point out this has been a decent year for ipos in terms of price performance remember, prior to today,

renaissance capital says that we've had about $26 billion raised in 65 initial offerings and generally speaking, 60% of those offerings are trading above ipo price. i would also point out one of the etfs, they manage a smaller etf that tracks the ipo market, has more than doubled the performance of the s&p 500 this is certainly a big day for many chewy shareholders, especially their private equity owners, petsmart and everybody else but the idea is that beyond meat and now this has raised a lot of questions about, to professor ritter's point, the valuation of certain companies in this marketplace. back over to you >> dom chu, thank you. leslie, i would add fiber to that, given the fact that we saw those shares surged 90% yesterday. crowdstrike also going public earlier this week, up 70% in first day of trading venture capitals came out on

twitter and said, what you're seeing is a broken ipo, whether it's crowdstrike or zoom, that basically these companies have mispriced going into trading, and they've left a lot of money on the table >> you bring up a good point, morgan, including chewy, we know where it's trading right now we'll have 14 companies trade at upwards of 50% on their first day of trading 14 companies are doing essentially what chewy is doing right now. i was speaking with sources yesterday about that gurley comment. they're saying it's really hard to price these things. when you look at what they did with chewy, they raised the range because they saw the high demand they priced above the boosted range which is pretty rare, usually you see things at the top end of the boosted range, but they posted above the boosted range and up 77% right now, that's remarkable it makes the job of a banker challenging to assess demand

you don't want another uber or lyft but you don't necessarily want such momentum and mania as you're seeing with a lot of these companies. >> jay, petsmart itself sold for $8.7 billion back at the end of 2014 and its sales have not been growing. the brick and mortar retail. meanwhile chewy now is owned by petsmart but worth, in the public markets, a lot more than that petsmart has a lot of debt i imagine those debt holders are going to want to get paid. how does that factor in to what shar shareholders of chewy should expect going forward >> they may sell off shares over time to pay off debt typically what happens in situations like this is the parent company eventually either buys back the company that went public or totally divests.

it would be surprising if petsmart still owned part of chewy five years from now. >> jay, really quick, we asked the ceo why this is any different from pets.com two decades ago. he said the internet is more mature, data collection and synthesis is more mature and the consumer is more mature. do you buy that? >> i think there's some truth to that 20 years ago, e-commerce was in its infancy, whereas now almost everybody gets things delivered. and that's one of the problems that brick and mortar stores have been having >> jay ritter, nobody knows more about ipos than they do. >> maybe leslie picker is tied >> i learned what i know from jay. >> thank you both. it curse occurs to me, guys, ifr chewy, you're looking to get

into brick and mortar retail but i don't know if you want to get into it the way petsmart is into it, these big, huge stores in strip malls and whatnot maybe you want more urban or smaller stores how they navigate the petsmart ownership will be interesting. >> it's a good question. they mentioned in the perspectives, their big competitors are not just the amazons of the world and the other retailers in the pet space. it's the costco and walmart and places that have capital that would enable them if they wanted to be competitive in this space to lower prices and put additional pressure on chewy's margins. >> sounds like a question for the co-founder, who is coming up next ryan cohen will join us right near at post 9 we have a big show still ahead don't go anywhere. chewy?

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frombe go[ laughing ] gone. woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. welcome back to "squawk alley. pet product retailer chewy began trading just a few moments ago stock is up 78% right now.

joining us at post 9, chewy's co-founder ryan cohen, ryan, congratulations. >> thank you i'm glad to be here. >> so you're not a shareholder in chewy >> no. >> but i would imagine you have a lot of feelings about seeing this company you built starting in 2011 go public taoday >> it's a very emotional day, it's humbling. a culmination of it's years of sacrifice, dedication, lots of hard work, an amazing team it was far from an overnight success. to see it today is just incredible i'm very proud >> one of the things that's been coming into focus in terms of this ipo is how much capital is being raised and how much of that capital is going to go back to paying down debt at petsmart versus back towards operations at chewy what do you think about that >> yeah, i mean, i can't speak to exactly the capital structure, but i will say it's a capital-light business and requires very little to engender growth the company has gone from $200

million in sales in 2014 to $3.5 billion in sales in 2018 it's burned through money that's gone into investing in acquisition. at any point we could racheting down the spending and been profitable for us it's always been about scale and market leadership and building a big business. the governor of growth has always been free cash flow so we've always been very disciplined about that >> you yourself had a nice exit a couple of years ago, got some free cash. are you investing in ipos this year >> not any yet >> another question specifically about the pet business omni channel is big right now, blending physical and digital retail given what's happening with premium brands and treating pets like people, if you were doing that, would you do it in urban areas or would you do it kind of

in the suburban strip malls were the petcos and petsmarts have been in the past >> i think it's all about creating an experience for the customers. if you're going to invest in physical stores, it needs to be focused on the experience so people want to bring their pets into the score it depends on the category, but to the extent that retailers want an amazing in-store experience, omni channel strategy can make a lot of sense. >> you got a $14 billion market cap today. did you not sell for enough or has there been enough growth since then to validate today's market cap >> i think we were -- at the time we were running a dual track process. it felt like a fair deal to us at the time. it worked out really well for the team at chewy, it worked out really well for the shareholders at chewy, and i'm grad to see it's working out well for petsmart i'm very happy >> i love the story, your original idea was jewelry. >> yes

>> what switched you to pets and are you glad you didn't go into online jewelry >> we weren't passionate about the space. i was in a neighborhood pet store one day with my poodle and it was an amazing experience i had an epiphany that if i could recreate that experience but do it online and at scale, think about all the small things we've been doing, the handwritten holiday cards, the pet poportraits, the flowers, is bringing a face to e-commerce. we were able to different shiate ourselves and build the largest pet retailer in the world. >> a lot of folks like to point to the ill-fated pets.com in the late '90s and early aughts why did you move into this model? >> i'm a contrarian.

there weren't a lot of people in that category so it created an opportunity for us having said that, it was a low margin business. >> how much does fast delivery matter in this category? because you've got heavy bags of pet food, often. people know when they're getting close to the bottom of one and for chewy, the subscription delivery has been important. does it really need to be that fast >> yeah, i personally think so i think within e-commerce today, it's protecting that flywheel of fast shipping, competitively priced, and having that selection. we differentiated ourselves by being the category experts and really bringing a face to e-commerce at the end of the day we happened to sell pet products. frankly, if you're in the business of delighting your customers, you can be very successful i think we would have been successful, frankly, in any category >> talk about what you know about, say, my pet you probably know how much he eats per day and thus when it's time to order more food, when

his next checkup is due. is that wrapped up into various algorithms you have back home? >> absolutely. we try to create an experience that's really frictionless so when it's the one-page checkout or just all those things, we don't want to inundate you we figure if we deliver an amazing experience, you'll come back to us then we go and do all those small things that create that wow experience you tell your friends and family, this is the best experience, this is where i need to shop. >> it's not a shower of notifications and taps on the shoulder >> exactly >> you're looking for the consumer to touch back themselves >> totally, exactly. >> i want to go back to the delivery piece of this for a minute, because one of the things i found fascinating in reading about the history of the company is that you built out fulfillment centers. a lot of e-commerce retailers outsource their delivery facilities why did you go down that route and how does that set up the company for future scale >> it's really hard to scale the vision since day one was to

build a multibillion dollar business we weren't experts in fulfillment in the beginning we were using a 3pl. it wasn't scaleable. so we had to become experts, we had to make it our core components we brought fulfillment in-house in 2014 and neverlooked back when you think about fulfillment of chewy, it's world class operations we've got seven fulfillment centers. >> what part of this business is sensitive to the economy do people -- i mean, they're not going to stop buying food for their pet. but do they buy more expensive food or maybe more treats when the economy is good and then scale back how does that work >> i think we really have the tail winds of just the shift from offline to online then the humanization of pets, the market moving up and average selling price moving up. if you look even during the great recession, the industry grew and it's $70 billion amount today that's growing at 3 to 5%. the last thing people will cut back on, even during a recession, is their pets

what's even more durable is really the consumable part of the business which makes up a big chunk of revenue, the majority of chewy's revenues >> it's a consumer staple. >> exactly >> in the lifespan of investing in the business, focusing on cash flow, to the period where profits are important, where are we >> it really is a function of how quickly we want to grow the business we could have been profitable many years ago but for us, free cash flow is that governor of growth. i think it's up to the new management to decide exactly how quickly they want to scale the business >> and would you expect the public markets to nudge them along faster or maybe not obviously there's plenty of examples of public companies who have a long leash, so to speak >> i think once investors understand that the underlying business is profitable, and that, you know, you've got these sticky customers where the revenues are so predictable, and so it makes sense to continue investing in growth, especially as that pay back period

shortens, as the company gets even more scale. for us, we were always focused on scale market leadership is going to maximize share value over the long term the volatility of the markets, that's always been the case. you've got to focus on the long term >> what's ryan cohen focusing on for the long term? what's next? >> retirement is overrated that hasn't been very fun. i'm talking to entrepreneurs, different businesses, different corporate boards i don't know, maybe one day i'll start another business >> i want to get your thoughts on the whole process of getting investors to buy into an idea, because your company was had d headquartered in florida, you had a hard time in the beginning raising capital. what would your advise be to other entrepreneurs? >> don't stop, keep your conviction, keep your head down. we had over a hundred people that actually passed on us i think they were right in terms of how difficult it was to go

head to head in this category against amazon but i think that everyone underestimated the execution and so we stayed focused we didn't get distracted by shiny objects. we were really good at doing a few things really well and ultimately, you know, we showed investors that this was a durable business and we got them to believe in us >> what's a shiny object what's an example -- >> 99% of ideas are shiny objects. we say we have operating principles at chewy and we say, you know, execution over ideation it's just so important in a startup, where, you know, you've got limited resources, you've got limited time and capital, you have to stay focused >> i understand that, but bezos if he were here would say you have to fail often and you have to fail big. >> i think as you get larger, you really have that optionality. but in the beginning you really need to execute very well. and you really don't have the optionality to fail. i would say instincts and having strong -- today the company has more optionality than it ever

had. but that happens over time >> all right ryan cohen, thanks for joining us >> thank you for having me >> chewy, your baby, goes public congratulations. >> a special day thank you for having me. speaking of amazon, responding to former vice president joe biden's tweeted challenge, the company's tax practices. ylan mui is in washington with the latest >> reporter: the fight basically sums up the entire debate over corporate taxes into two kind of snarky tweets. joe biden started this he's now of course running for president. and he posted this tweet yesterday morning. "i have nothing against amazon but no company pulling in billions of dollars of profits should pay a lower tax rate than firefighters and teachers. that tweet linked to a story with data showing amazon paid zero federal income taxes last year despite earning nearly $11 billion in profits so last night, amazon fired

back, saying it's actually paid $2.6 billion in corporate taxes since 2016 they tweeted, "we pay every penny we owe congress designs the laws. assume biden's complaint is with the tax code, not amazon." the company has a point here, corporate tax receipts have plummeted since congress lowered the rate from 35% to 21% at the same time leaving some key deductions and credits intact government data shows corporate tax revenue is down $11 billion so far this fiscal year, that's a nearly 9% drop and it's much bigger than even some critics were expecting. no one is really sure why recepti revenues have fallen so dramatically maybe there is not as much repatriation as they thought maybe there's less tax revenue to collect in the first place. maybe companies are really good at working the system to lower their rates. but guys, whatever the reason, this twitter beef makes two things very clear.

one, those numbers don't play well politically, and that means companies like amazon will continue to be a punching bag on the campaign trail back over to you >> all right ylan mui, thank you. meanwhile, let's take a look at shares of broadcomm, getting crushed after lowering its revenue guidance, seeing the, quote, effects of export restrictions on one of our largest customers, referring to huawei, and seeing other headwinds in the business as well we will discuss after the break. every day, visionaries are creating the future. so, every day, we put our latest technology and unrivaled network to work. the united states postal service makes more e-commerce deliveries to homes than anyone else in the country.

e-commerce deliveries to homes 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 to "squawk alley," i'm are a harahel solom. the owner of the attacked oil tanker is cricket tontradictings

on the source of the attack. iran has denied it's responsible. the u.s. will get a chance to extradite wikileaks founder julian assange interim hearings are likely to be held this summer and fall new york has ended religious exemption to rules firing that schoolchildren in the state be vaccinated governor andrew cuomo signed a new law minutes after it was passed by the state legislature in response to the nation's worst measles outbreak in decades which has hit new york especially hard. if you're stuck trying to find dad a gift for father's day weekend, how about some plastic surgery? a new report from the american society of plastic surgeons says more than a million men had some form of cosmetic work last year, an increase from 2000. the most popular procedures are rhinoplasty, eyelid surgery, and

liposuction. happy father's day that's our cnbc news update. let's get back to "squawk alley" with morgan. >> you're getting a hard and chocolate, matt, honey, that's it thank you, rahel dom chu is on the floor with a breakdown of today's action overseas >> morgan, markets across europe are set to close lower as weak industrial data out of china over heightened trade tensions german dax has its second straight positive week technology stocks are dragging the markets to the downside on the european side of things. look at shares of europe's biggest chip makers after broadcomm warned of a global slowdown in technologies, infineon technologies, st

microelectronics, and ams. the one-two punch of trade essentials and weakness in the bond market has pressured some of the biggest lenders in europe amid that uncertainty. european investors continue to move toward safe assets. the yield on the benchmark ten-career government bund in germany, a fresh record low today moving deeper now into negative territory, all of this happening as gold prices hit a 14-month high as well. a lot of those macro headwinds featuring heavily in the eastern trade, jon >> thank you, dom. dom, as you were mentioning, guest dan niles was right when he joined us yesterday, broadcomm leading a chip stock plunge this morning after missing revenue and cutting guidance their shares now down 6.6%

broadcomm cited uncertainty in the global trade environment inventory drawdowns because of that, oems aren't sure how this is going to play out they're being cautious of course that u.s. pressure on one of the company's largest customers, huawei, broadcomm's ceo, called the environment very nervous. our jim cramer tweeted earlier that the earnings call was truly depressing guys, there was so much in the chip sector about how good the second half was going to be. and of course, you know, we talked about it here, i talked about here there are people talking about the second half in january i'm always a bit skeptical, because who knows, there's a lot of living to happen between january and july but this puts it on a whole different trajectory we have to be careful about drawing too many conclusions is there any readthrough from broadcomm to apple i would say be careful, because you've got inventory issues on

both sides you don't know how much inventory apple's got of certain chips. and you don't know how much inventory it's building up of new iphones or even who the component makers are in that as people are trading, keep that in mind. >> what a story out of broadcomm. and the effects that these trade tensions are having. as we go to break, major averages here, pretty tight range. but well off the opening lows. we're down 24 points on the dow. chewy at 37.5 is now the fifth best debut of the year we're back in a minute -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.

do you think the company has become too big that it should be more closely regulated, has google become another tech monopoly >> mike, if we are going to focus on some really hard computer science information problems, like being part of the google really helps us because we're able to use dish signals and technology that they have to be able to figure out what's the right way to do our recommendations. >> you need to be this big to solve the scale of the problem because you're so big? >> well, having -- having -- having enough scale does help us build systems that are world class, to be able to address this >> and that was youtube's ceo put on the spot on the issue of google's size, a big theme from

the code conference this week. and as calls to break up big tech have grown louder, sully c c silicon valley has stepped up its defense. is a potential breakup better for stock prices that's the thesis of our next guest who joins us with mark mahaney. yusef, you have this note arguing that a breakup could be good for stocks. is it kind of a weird conundrum where the threat of a breakup is bad even though a breakup itself is good? >> on the possibility of a breakup, don't hold your breath, it would take years to have visibility into that, that's number one the issue is very complicated both on a domestic as well as an

international level. we believe a breakup would unleash accretive -- it would be accretive to shareholders over time, because you would allow these businesses, which are already very much at scale, if you take facebook, it's four or five different businesses already have over a billion users. even if broken up, these businesses will be at scale. they'll be able to compete and be more nimble, get their own financing, et cetera, and will not be in the crosshairs of reporters. if you look at a pure sum of the parts analysis, look where these things should trade, look at comps, and that's what the note we published this morning was about, making some relatively conservative assumptions about what these businesses should be worth separately in the case of facebook, for instance you look at somewhere between 25 and 35% upside to current shares over the next 12 to 18 months. so yes, we think a breakup is

going to take time it may not happen, ultimately. if it does, it will still be positive for the stocks. >> but mark, that's the trouble, isn't it, is that you could end up with one type of regulation that restricts the business practices. that would be bad. and maybe a breakup is the least likely scenario. but that would be good how is an investor to parse it >> let me try two points on you. i largely agree with yusef on this, i think he nailed it are there assets within these companies that investors would love to get their hands on that they could buy and sell them independently or individually? absolutely investor interest in an asset like a spinning off of aws would be enormous. investor interest in a spinning off of instagram would be enormous i'm sure interest in a spinning off of youtube would be enormous too. there's already been preregulation impact, that's the inability of these companies to

do large scale acquisitions. i think these kind of acquisitions are off the table, probably have been for the last two years. it's probably one of the reasons why google didn't attempt to buy twitter. they knew the reporter pressures they would face. i think that's the dog that isn't barking or whatever the expression is. the ability of these companies to do large strategic acquisitions is off the table and they are having increased expenses because of regulation the last thing, to yusef's point, absolutely, this thing would take ten years to play out if any of these companies were to be broken up. >> yusef, it looks like in your note, you're making this argument for upside in alphabet and facebook what about amazon? >> i would say the same theory holds there. clearly, as mark just said, rightfully, aws alone is probably worth somewhere between 300 and $500 billion, it's a business that's generating this year about $35 billion, growing

at 40%, generating very healthy margins. i think if that were to be trading as a separate entity today, it would trade effectively at somewhere between 40 to 50% even of amazon's overall value. so clearly we think there's value in potentially breaking up amazon but i highly doubt anything happens short term or even medium term. >> given all the charter, certainly worth pencilling out mark, yusef, thank you >> thank you still ahead, chewy unleashed. shares surging this morning following the debut here at the exchange they're currently up 68% dow meantime down 33 we're back in a few.

i'm scott walker coming up in "halftime report," could the fed's hand be forced earlier than expected? plus chewy surging more than expected we'll find out who's buying the stock. stephanie link has been busy buying she'll tell us the names you need to know when we see you at noon jon, we're about 15 away, it's less than that >> see you then, scott still to come, backed have i visa, mastercard, uber and others we'll discuss facebook's venture into cryptocurrency ahead of its debut next week. and next, the supplier to companies like beyond meat and

tom brady's own protein line the ceo of pureis joins us on the other side of this break -driverless cars... -all ground personnel... ...or trips to mars. $4.95. delivery drones or the latest phones. $4.95. no matter what you trade, at fidelity

it's just $4.95 per online u.s. equity trade.

no matter what you trade, at fidelity be go[ laughing ] gone. woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. welcome back let's get a check on chewy's shares, you can see up about 69%. $37 and change priced at $22. so doing quite well, guys. meantime, tyson foods the latest to enter the alternative

meat business, announcing they'll use pea protein as a chicken substitute where are these companies getting all this pea protein here is pea farmers in the u.s. to service companies like beyond meat and also tom brady's protein line, tb 12. tyler, great to have you on, thanks for joining us today. >> it's great to be here today to talk about pierce's role in the plant-based movement >> what is your role >> great question. we are a u.s.-based company that develops seed and also manufactures pea protein and that system is an end to end model where we can develop a plant-based protein that can be used to make foods out of to feed people. >> is there enough -- are there enough peas? are there enough of these crops being grown and capable of being manufactured right now to meet all of the growing demand? >> it's an exciting time,

especially for farmers and for food manufacturers and food eaters alike when it comes to peas. peas are a necessity for farmers when we look at biodiversity of crop and different crop rotations and i certainly believe there's enough supply and a growing demand and need for nitrogen fixating legumes like peas to grow on land across the united states and in north america. when you look at it, there's over 4 million acres of peas grown just in north america alone and that keeps growing year over year to build soil health on farms across the united states with the farmers that we're working with on a day-to-day basis to then build foods that we feed people instead of animals with. >> so, tyler, why is beyond meat importing pea protein from europe and i believe canada if there's enough in the u.s. >> yeah, great question. so, with puris, we're the only u.s. manufacturer today and so there's certainly a lot of investment going in the space to build actual manufacturing

facilities that can produce the food there's a shift between the way food has been eaten in the past from meat, eggs, and dairy to the way people look to eat food for the future, which is powered by plants, and there's an -- a significant amount of investment to build the infrastructure to make that happen puris has believed in this for over 30 years now so we've been at it for a long time and with our plan, we've taken investment from car gil to allow ourselves to build more manufacturing capacity to supply players like beyond meat and others so they won't be limited on high quality, great-tasting plant-based ingredients and it's important because i say great-tasting because we've all had healthy diets before and ate healthy and it didn't taste so good so how do we build a more sustainable food system that's healthy for people and also healthy for planet you have to make it taste great so the sustainable choice is simply the easy choice to make >> tyler, growing up, health food was big in my house, we had

rice dream and vitasoy so you bring up a key point what is it about the technology, the capability around manufacturing itself at this point in time that's so different that enables that to be the case? >> for puris, we're unique because we're looking at what is the taste, the functionality and the ergonomic profile of the peas themselves for the farmer so they work for our various farmers. we work with over 400 farmers in the united states and design proprietary seed varieties that they grow, it's all non-gmo, organic, and we want them to grow them so they can add nitrogen to the soil, sequester carbon, add to the crop rotation and then we buy everything they grow back and from there is when the fun starts, we take those peas and we use technology that allows us to separate the peas and make those ingredients taste good that then have the right use case so they can replace their animal counterpart into the foods that food eaters are looking to eat today, which happen to be powered by plants and for people's health and also the health of the planet >> hey, tyler, a lot of our

viewers really want to know, a, what's the best-tasting product of the ones that are out there and b, if a quick service restaurant chain is going to do this at scale, not a test in a few restaurants, if mcdonald's is going to do this nationwide, who are they going to choose what do you think? >> yeah, great question. when i look at it, it all takes place on what's the food built from and i'm going to be hyperfocused on that impact it has on the land and that impact it has on my diet. i choose clean label all the time i want non-gmo that's my preference that's the way if we're talking about burgers or sausages, that's the way beyond meat has built their products and i think as we go forward, there will be a lot more people coming to the space and it will be very interesting who leverages the right technology and partners with the right suppliers that can help create that future to give, to your point, that product that food eaters want to eat. >> tyler, in terms of that

supply chain, u.s. farm incomes are down something like 45% from the peak in 2013, a key part of that is because you've seen depressed prices for some of these major cash crops like corn, like soy, et cetera. how much of that is an opportunity, i guess, how many farmers, additional farmers, are you now able to have conversations with to start growing more of these crops that you're manufacturing and how long does that shift over to some of these new crops take >> it's a great question when you look at what you just explained, soybeans, corn, that's the agricultural system that we've come to recognize in the midwest and in the northern great plains and what we're doing with peas is how can we add to that crop rotation? how can we break up the -- just the soybean corn rotation and add peas to it it plays a very impactful role with disease resistance, also sustainability and soil health of the various farms the time is now. we're partnering with farmers

all across the united states and really for a different reason than the past where a lot of agricultural commodities have been developed to feed animals and -- which is fine, but there's a shift and we're trying to bring that value shift, whether it be organic or regeneratively grown crops to food and if you can do that, you're building a sustainable system that not only the scale is needed, the scale can be done because it works for all stakeholders in the supply chain. >> yeah. all right. tyler, puris food ceo, thanks 'vr joining us today wee got more "squawk alley" in just a few moments 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.

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keep your eye on chewy today, obviously big ipo here at the nyse, opened around $36.30, got to $41.30 around 11:30 this morning, east coast time, now back below $35, actually hit $34 a few moments ago which is obviously below the opening trade. still 50% plus gain for the day which had been the fifth best day one performer of the year. >> yeah. the puns are just all over the place. i don't know which one to go with so i'm just going to leave it alone >> dad jokes >> it's ahead of father's day. >> it was another major week for ipos, we had strong start out of the gate with crowdstrike and

fivr as well and next week i think everybody's expecting to get that direct listing from slack as well. >> that will be big. >> not to mention a ton of focus on the fed for obvious reasons and the upcoming g20 meeting so rest while you can this weekend. for now, let's get to the half and the judge at hq. >> happy father's day too. i'm scott wapner front and center this hour, the broadcom broadside, the stock getting hammered did hopes of another leg for the rally just get pounded as well it's 12:00 noon, this is "the halftime report. >> announcer: five days to the fed, but economists are weighing in today we have new and exclusive information. a big question mark for the chips and tech after broadcom reports quarterly numbers. the technicals are saying something very important about this key part of the tech sector stephanie link's making big moves in two big names >> i think chewy may be it