11:00 a.m. on wall street and "squawk alley" is live ♪ >> good friday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan at post nine of the new york stock exchange. jon fortt has the morning off. market starting to get some legs here 20 points from an all-time closing high on the dow, but we'll start with slack surging nearly 50% in the first day of trading. on the rise again today. leslie picker back at hq with more on the debut. i think the flag was still outside of the exchange this morning. >> they weren't quick to take that one down, i guess, carl

as you mentioned, shares popped around 50% when compared to the so-called reference price of $26 a share. but no investigator actually made a quick one-day gain of 50%, as they might have in an initial public offering. in fact, the most any public market investor would have made buying and selling slack's shares yesterday is about a 9% return that's because the reference price is more of an arbitrary one set by the financial advisers in the nyse and a direct listing, so no shares were actually sold at that level. the shares opened at 378d $38.5 rose as high as $42 and ended at $38.62 to many, that's the beauty of the direct listing strategy versus the more traditional ipo. there's no favoritism on the part of the underwriters and there's no money left on the table, because slack didn't raise capital in the first place. overall, slack's debut was viewed largely as a success. and further evidence that the

direct listing model works there were no crazy price swings trading volume was manageable, and the public markets valued slack well above where it had been trading recently in the private markets. to be fair, slack debuted in a near-perfect market environment with the s&p 500 reaching a record high yesterday, but its direct listing is certainly causing other companies that qualify, at least, to think hard about whether they want to try that method of going public in the future guys >> all right, leslie, thank you very much. we're going to stick with that very topic and the recent ipo wave let's bring in continuity ceo and the former coo of twitter, ali rowghani it's great to see you, again, ali, welcome back. >> thank you, carl, great to see you. >> a lot of discussion about slack yesterday and the degree to which it can displace conventional email, butterfield seems to think that could happen in five to seven years does it really have the cult following they say it does >> i think it does it's now an indispensable tool in most workplaces, at least in

what kind of modern skand emergg organizations. and i think just beyond looking at slack, i think that chat-based communication, if youyo think about the customer use case, we all use email to interact with friends. we also use sms and other text platforms. i think there are mo multiple modalities to communicate in real life and multiple modal 'tis to communicate in a business complex and i don't think it's a great ambition, there's a great rallying cry, but slack doesn't actually have to literally kill email in order to be a successful long-term company but it has to add additional sort of utility to how we communicate in an enterprise >> ali, do you think we'll see more direct listings, given the performance so far of slack and also spotify last year >> i do. i do and i hope so, because i think, like anything, innovation just makes the system better. so it was great to see such a successful example of a direct listing yesterday. and i thought leslie did a great

job breaking that down in the prior segment. so i would expect more i don't expect overnight, you know, everyone to do it as slack did, but hopefully we'll see more of them >> in terms of the ipo pipeline and what you're most excited about as i guess the second half of 2019 unfolds, what are you watching for >> in terms of things to come? >> yeah? and companies that could go public >> yeah, you know, i think the one that i don't think it -- i'm not sure if it's a 2019 event, but a lot of people have been extremely excited about airbnb it's a company that we love. and i don't know when that company is planning to go public, but i think that's a very interesting one to watch. the incredible scale of that company and its disruptiveness to travel and hospitality. that would probably be at top of my list. >> we talk a lot about market conditions and how, i guess, appealing they are right now for

some of these companies to go public on the flip side, some of the critics have come out and said that those could be marketing a market top how do you think about it? >> yeah, i think the market has certainly been incredibly enthusiastic about the recent wave of companies that have come public and particularly, the sass companies. you look at the way slack was received yesterday, zoom and pager duty, et cetera. i think investors are seeing real sort of stability and long-term durability in these kinds of business models and there's a generally -- you know, we had many years where there were very few ipos and we've had just a spate of them in the past six months or so and so, i think that in a sense, it's a combination of the market waiting for assets like this to become public. and also, generally liking the business models and the sort of stories of these companies so, i think it's really been a

terrific conclusion to many years of company building for a bunch of these companies and i hope that there are going to be a number more that kind of restores the faith of wall street in technology in silicon valley being able to produce great, long-term, durable businesses >> yeah. definitely, tech could use some success stories, ali i wonder, if you were in a company that was setting to go public, i assume you'd rather do it sooner rather than later? >> you know, it really depends on a lot of stuff. i mean, market factors are obviously an important consideration, but, you know, what comes first is what's going on inside the company. you know, the processes and controls and the maturity of the leadership teams, the command of the business, the ability to forecast futu forecast future, et cetera it so starts really with an evaluation internally. but all in all, i feel like many companies have waited longer than they should have to go public and so i think that your general sense is right, carl, that it's a great market

being a public company offers a lot of benefits. and so in general, i think, i hope that this spate of successful ipos encourages a lot of founders to view being public in a more favorable way than maybe they haven't in the past >> agreed. given how many fewer public companies we had than we did 20 years ago. ali, let's turn to facebook and this crypto offering libra, set to debut next year, as we know already getting some pushback from capitol hill. how is this being viewed in the valley right now >> i think in the valley, it's viewed as generally positively it's seen as perhaps one of the ways in which crypto becomes more mainstream, more regulated, more controlled, maybe, with a lot of backing from respectable, entrenched players facebook, mastercard, uber and so on. it's an interesting governance model. it cuts against one of the kor

t tenancies of cryptocurrencies. this is a less volatile version of crypto, but one that clearly has a use case so i applaud the facebook folks for launching this i think it moves things forward. and who knows what the future brings, whether it really sort of takes hold or not but i think it's a fascinating attempt to kind of harness the power of internet, to change the way money works. >> ali, i don't know if you saw "the new york times" article yesterday, arguing that the real reason for facebook's new cryptocurrency is that this is the last, best hope to reestablish trust between facebook and the world, going on to sort of describe that what makes cryptocurrencies revolutionary is that they create the foundation for a new form of trust. you think that's the case? >> you know, that may have something tangentially to do with it. you know, i've been on your network and have been critical

of facebook in the past. and have said that the platform deserves real anti-trust scrutiny, but i think that, you know, they've been working on this a long time you don't launch an initiative like this just in response to, you know, the most recent sort of anti-trust pressures or the recent news. so i think it has a much deeper roots than kind of the last year or even since the fake news scandals i think it has deeper roots there. and i think it's -- i think it's just a fascinating new innovation, in a very important space. and it may have some benefits, as they think about restoring trust to their platform, but i don't work at facebook, but i would doubt that that was the primary motivation >> all right but on a related note, though, there are some, ali, who speculate, and we know it's way early, but that maybe this ends up being more important to them than newsfeed, when you look at global advertising, addressable market, versus the global digital payment and banking

market >> so that's what makes it interesting, but, you know, as you know as well as i, it's way, way too early to say that. they've built one of the most formidable, you know, advertising and content businesses in history. and, you know, to declare a few days after the launch of libra that this new -- this new product or this new initiative can rival, you know, poor facebook, i think is a little early. but it's certainly interesting and it's certainly playing in a massive space, a massive market. it could be massively disruptive so i think that's what makes it quite interesting. >> finally, as a former cfo of pixar, are you going to go see "toy story iv" this weekend? because i'm seeing it tonight. >> absolutely. absolutely i was just speaking yesterday with ed capmall, the retiring founder of pixar, and it got me incredibly excited about the movie. the way "toy story 3" ended and now the toys are with a new child and starting their

adventures from the beginning, it takes me back to my childhood and i can't wait to see it >> reviews have been really good ali, please come back soon it's been too long thanks >> i will. thank you so much, carl. great to see you >> ali rowghani. >> animated movies are still the best movies. when we return, the pre-trial hearing for the sprint/t-mobile deal underway this morning both of those stocks are lower right now. boost founder, petered ai ed ae joins us nt.ex the dow is on pace for record close if these gains hold hey! i'm bill slowsky jr.,

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welcome back to "squawk alley. the pre-trial hearing for the proposed sprint/t-mobile merger kicking off earlier this morning as ten states file an anti-trust suit to block the day. this after our own david faber reports that a tie-up is seen as highly likely a deal which would include boost mobile founder of boost, peter adderton is back with us here at "squawk alley. peter, great to speak with you this morning thanks for joining us again. >> thank you thank you very much for having me >> so, let's start with this suit from ten states right now what could that do in terms of derailing this potential deal? >> well, i think it's all going to depend on what the dej comes out. i think the ag has jumped the gun. i don't think the ag's approach will be the right one. if you try to think that by shutting down this merger, somehow soft bank will throw billions of dollars behind the

business, we'll see lower prices, jobs are going to be saved and stores will be opened, it will have the complete opposite effect. so i think the ags know that i think they're waiting to see what the doj comes up with >> you've come on several times in the past and talked about the fact that you're interested in buying back these boost mobile assets we have david faber reporting on the deal that a potential asset sale to dish could be likely is that your take on the situation as well? >> well, you've got to try to understand the media reports we're hearing right now. i mean, what they're saying is that in order for a merger to be approved, we have to complete a fourth player. ieb would be a weaker player, because they won't have the same capacity that verizon and ut mobile would have. we're hearing that dish would have to raise between $6 and $8 billion and would be directly competing against metro. we're already there. that's exactly what we have today. so the remedy can't be exactly what we have today and then you start thinking about this, the only winner out of that is actually softbank, and i think we might be witnessing one of the greatest

mind tricks by softbank's ceo massa than we've ever seen before because, again, the only winner out of this is softbank. >> in terms of the details around a potential divestiture, as part of the drkoj's stipulations, do we know what those details would look like? what they would include? >> we have been calling for an investor of boost, which we got, and have been calling for spectrum to set up this hot spot-like network that we think works out extremely well if you think about it, the doj is saying that we want an owner of boost who's a pro-consumer, who will focus on ensuring that prepaid is connected are we really saying the cable companies there best ones to do that really what experience do they have in pre-paid pre-paid is a very, very dynamic beast. you really need to understand that i just can't imagine for a second that the doj thinks that off-loading this business across to dish is going to protect prepaid and all the things that they need to do. and i think that that's one of the issues now, if i'm john legere over there at t-mobile, of course i

want the capable companies as my competitor he's already clearly called out many, many times that they can't compete against him. so we're now hearing that t-mobile is negotiating with dish if i could negotiate for a competitor against me, i would love the cable guys, especially in the prepaid space and don't get me wrong, i'm not saying that the cable companies shouldn't be able to be part of the process. they just shouldn't be only ones and i think the doj will ultimately agree with us on that point. >> peter, i want to get your thoughts on what a couple of analysts have come out and said really in the past week, including craig moffett on our air earlier this week, kind of scratching their heads and being really critical about how the details of this deal and the divestitures, boost mobile, for example, could play out, and what that means with spectrum. why would that still make sense? >> i think there's a real misconception to how effective it can be. if you look around outside of america, mnvos have been big pushers of process and that's why you see massive output in

europe and australia and other markets. so there seems to be this perception that an mnvo cannot create a fourth viable competitor which is not true. you need the right economics and the right wholesale agreement and the right access to the core network. and all of those things we've been pushing for if you have all of those things, you can be very, very competitive. so i think that this feeling by analysts that, hey, an mnvo will never be successful, in today's business, that's true. but if you look outside of america in italy and some of the other markets, mnvos have been very, very effective in kraegt low creating lower prices in markets where you're seeing consolidation. >> skpooeand spooertpeter, lasto get your thoughts. what is your expectation in terms of all of the telecom, huawei, et cetera dealings that we've seen, the ban, that being part of those talks? >> you know, it's funny, when i look at that, you hear a lot of

things about huawei being banned it really comes down to, is huawei ever allowed to play in this space and this per, what are the conditions they need to play or say they can't play and move on so i think there's a lot of rhetoric between the two i've said this before on your program, huawei makes some incredibly good devices for the low-end consumer it really comes down to, are they allowed to play if they are, what are the rules. and if they're not, just move on >> peter adderton, thanks for joining us today >> thank you when we come back, shares of canopy growth down after posting a wider than expected loss we'll discuss that after the break. in the meantime, record closing high for the dow now, first time since october 3rd have an all-time high on the s&p as we're looking at the best june since '95 don't go anywhere. ♪ feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow.

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welcome back take a look at aerospace and defense stocks they're mixed today after

president trump tweeted that he called off a strike last minute last night, calling the expected loss of life, quote, not proportionate to shooting down an unmanned drone. this, of course, in relation to iran and all of the flared tensions we've seen there. that drone was a northrop rq4 global hawk. it's one of the most sophisticated unmanned aircraft. it's estimated to cost upwards of at least $130 million so military tensions easing a bit today. but even so, from a market perspective, aerospace and defense stocks have still had quite a strong week. second-best performing industry group in the s&p for the week, up more than 5% behind energy equipment and services also worth noting, while the senate voted to block $8 billion worth of arm sales to saudi arabia and other gulf nations yesterday, the president is expected to veto that and proceed with deals that will potentially benefit lockheed martin, raytheon, boeing and others because of iran

but it's not just geopolitics, either there has been a lot of news in this sector. you have paris air show yielding big orders earlier this week more m&a news with arrest aharrl getting the green light for their merger and we have lawmakers working on defense spending legislation and a new acting defense secretary, mark esper, poised to take the helm as for the response to iran right now, we've got a number of experts including retired army colonel jack jacobs on cnbc earlier this morning noting that military retaliation might not be the policy right now, but more economic sanctions could be so this is definitely going to be something to continue to watch. >> indeed. you're right about north rupp. 30% gain for the year, i think, at least double the s&p's year-to-date gain. >> yeah, and aerospace and defense stocks, the ita, etf, one of the best performers year-to-date so far, up more than 20% as well >> yeah, we'll watch that. european markets obviously going

to close in the next couple of minutes here with closing highs on the dow back here let's get to seema mody. seema? >> hey, carl european stocks basically mixed, but still trading near their highest level since early may after this week's central bank-driven rally. and the latest economic data raising expectations that the ecb could launch a fresh round of stimulus in the coming months the eurozone ihs manufacturing index holding below that key 50 level in may, with the sector posting its weakest quarter in six years. now, energy is a big story in the equity market. global oil majors extending their weekly gains amid intensifying fears of an escalating conflict. total, royal bp all up as oil trades above $65 for the first time this month. and british airways, lufthansa and klm joining us airways to reroute flights away from iranian water. european counsel president donald tusk urging restraint on both sides and those heightened risks

helping energy names but separately, macro trend worries continue to weigh on a number of european tech names. uk-based chipmaker cutting its 2019 revenue guidance, citing the impact of the u.s. ban on huawei, the apple supplier sai the restrictions caused order delays and forced several of its customers to slash their investments. now, iqe has lost nearly a quarter of its value today, pressuring shares of other european chipmakers including als, dialogue semia and infe on here's what's happening at this hour. chinese president xi departing north korea, concluding his first state visit to that country. it was the first visit to north korea by a chinese president in 14 years earlier, accompanied by kim jong-un and their wives, he laid a wreath at a memorial to chinese soldiers killed in the 1950 korean war. the u.s. special representative for iran, brian

hook, met with saudi arabia's deputy defense minister in riyadh the minister affirmed saudi support for maximum u.s. pressure on iran and explored ways to counter what he called hostile iranian acts here at home, hunter fan is recalling nearly 8,000 brunswick seal kriceiling fans due to the potential of shocks. the fans have three and four lights with four blades, ranging from size from 44 inches to 60 inches they were sold nationwide from november 2017 through may of 2019. and thousands of people gathered at britain's stonehenge monument today to celebrate the summer solstice. each year it attracts people to the site for the beginning of summer, the longest day of the year in the northern hemisphere. you're up to date. that's the news update this hour guys, i'll send it back downtown to you morgan >> so cool definitely on my bucket list and i guess now today, officially, sue, we can say, it's a summer friday >> that's right! it is. the first summer friday. >> that's right. >> sue herrera, thank you.

>> got it. >> after the break, rbc out with a new note on amazon, reiterating confidence in the stock. that analyst joins us next. meantime, take a look at the major averages the dow is up 90 points right now. the s&p is up 4. we are still on track if these gains hold for record oscles for both of those averages later today. we're back in a moment

welcome back to "squawk

alley. amazon to 2,300 with room to run. that's the latest from rbc this morning, reiterating its outperform rating on the stock, saying amazon's long-term margin potential could be even higher than investors think the analyst behind that call, mark mahaney, joins us now, along with sunovis trust portfolio manager. mark, lay out your increased full case for amazon here? >> right, so we've done these u.s. online retail surveys for seven years. when we came out with this last year, we saw sort of -- there was some concern there we saw slipping satisfaction scores at amazon i think that's because they were aggressively shifting towards third party vendors and we saw what appeared to be a little bit of a plateauing of prime interest in the u.s. this year, both of those trends improved and in the meantime, what we're seeing is not surprisingly, the longer people are with amazon, the longer they shop with them, the more frequently with them, the more that they spend, satisfaction

levels improved modestly, prime penetration really jumped from last year. so we think the fly wheels continue to spin at amazon we like the stock, we have for some time. but we like the stock, have new survey, data behind it and now we're watching for the catalyst of this prime one-day shipping on amazon retail sales. it won't show up immediately, but over the next year, there will be a path to revenue growth acceleration because of that we like amazon and the stock >> i want to get into that piece of it, the shipping piece of it, logistics part of it a little bit more in just a moment. but first, i want to get your thoughts on quality control on amazon's ecommerce platform. and i ask that, because i've had this an in recent times in multiple months because i ordered something that was suggested to me by amazon, a best-selling item and it comes to me and the quality is not great, maybe it's a counterfeit product. is this a growing risk for the platform right now >> i think it is and i think that's why we saw 80% plus satisfaction levels amongst amazon customers, until

last year, when it kind of dropped down to 72%. we thought that was a cause of concern. then it seemed to have moved back up a little bit this year and there's clearly been a shift, as the company has reported in unit sales that are going to third party vendors, where amazon doesn't necessarily control the packing and the shipping and so if it's fulfilled by amazon, you can pretty much be guaranteed you're going to get that two days, next-day, same day but when you have third-party vendors involved, that's not the case so what amazon has had to do was clamp down a little bit and tighten up quality controls on some of those sellers and if they're not up to snuff, kick them off the network my guess is that's what's really behind sustains. but it is a risk for amazon if they don't handle those third-party vendors correctly. >> dan, sunovis owns amazon shares what do you think of the company? what do you see as the biggest risks as somebody who has shares >> well, i agree with your other guest. we're very establish on amazon we've talked about their

shipping capability, distribution capability. and one of the reasons that we own the stock is because of their strength in aws. as we all know, they're the leader in infrastructure as a cloud service. that drives about 55% operating margin you know, the other area to me that is very intriguing in terms of looking at those next legs of growth is the strength in their other revenue category, which is their advertising segment. that's been growing at a very fast pace around 80, 90% those areas are higher margin than their core online retail business the net margins are 5, 6%. you're looking at much, much higher margins in those areas. to me, that would be the next legs of growth for amazon going forward on top of their huge marketplace presence >> hey, mark, last few weeks, we spent a lot of time talking about zoom and slack and even pinterest, rather than f.a.n.g. i wonder, do you think there's been any displacement in investor interest because of these new issues

>> i wouldn't be surprised if that didn't have a bit of an impact pip also wouldn't be surprised, carl, some of the topics we've been talking about recently anti-trust there's no question that f.a.n.g. or specifically google and facebook and to some extent amazon or clearly regulators and politicians sites now. i think that's had a little bit of a depressive factor on these stocks you have seen now a nice recovery in amazon shares, i think in order for the stock to continue to outperform we have had a slowdown in retail, reported retail revenue growth over the last couple of quarters we need to see some stabilization. and as dan was talking about, if you can start seeing more and more of this, what we think is the best revenue mix shift story in tech today, the faster growth in the higher-margin businesses, as that plays out into ramping margins over time, i think that helps take the stock up, as well and then we'll also be looking for again the impact of some of these newer initiatives. i think there's two in particular i want to point out i already mentioned the moving

to next-day shipping for prime there have been three or four new launches australia, turkey, india to some extent and brazil. as those become material and if amazon is successful in those markets as has been its traditional international markets, that's another win for amazon shareholders, we think. >> is walmart -- you haven't even mentioned the word walmart. are they not giving them a run for their money, at least in india? >> no, walmart is. and our survey does show, we have had four years now of data that shows improving traction by walmart, declining traction by ebay, just putting everything in context, though, we see kind of 90% special election by u.s. online consumers for amazon. and it's only about 40% for walmart. it's a pretty big gap. if there's one u.s. large competitor to worry about for amazon, it's walmart globally, it's alibaba >> dan, i want to get your thoughts on valuations of some of these companies that have gone public recently, including slack yesterday. does it make sense for that company to be valued at $19 billion or some of these other

names that are very high flying, since they went public >> yeah, it's interesting, you look at slack in terms of the price-to-sales valuation, that we have to look at, because they don't have profits at this point. right now, based on the price yesterday or the market value that came out, it was about 50 times sales. if we look at forward revenue growth going about 48% for fiscal year 2020, that puts us about $590 million in revenues on slack for next year, which puts them at a multiple of roughly about 34 times earnings or 34 times sales. so these are really, really high multiples, muffle higher than some of the higher-profile companies that you were talking about earlier. uber, lyft, and pins were all anywhere from 8.7 to 15 times sales. so there's no doubt that the slack multiple is much, much higher than some of these other unicorn companies in terms of what we have seen recently and i was doing some research,

drawing some tangents between -- and i know john will remember this back in the b-to-b stage back in the late 1990s we had companies like commerce 1 and areba going public with no net profit at all, all price-to-sales ratios. and those companies have all been somewhat forgotten. so hopefully slack won't end up like them. but these multiples are somewhat close to those multiples back in those days >> mark and dan, thanks for joining us today >> thank you >> thank you >> still ahead, a lot more on today's early movers, including canopy and caterpillar, which is green, despite this downgrade to underweight over at atlantic dow's up 93. rick, what are you watching? >> you know, it's what i'm watching, what i'm hearing there's a lot of jawboning about eases and potential recessions the big question, though, is will anything on the lowering rate side address some of the issues facing the economy? tethbrk.t t we'll discuss righ afr e ea when it comes to your customers' expectations, there's one thing you can be sure of.

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scott wapner here's what's coming up on the "halftime report" at the top of the hour on this friday, another record for the s&p has us debating what the second half of the year will hold for investors and how far the rally can really go. we're going to ask schwab's liz ann sornders what's likely to work best in the months ahead. and one wall street firm cuts caterpillar to a sell today. who's right? jim or the analyst

>> carl, see you in a little less than 20 or so >> a little battle brewing over there. let's get to the santelli exchange and rick. >> never in all the years i've been watching markets have i seen such a demanding marketpla marketplace, specifically the way equities price or heard as much jawboning in an kpa, that i think is still doing pretty well and it all boils down for the pressures to the fed to ease i get. it there's a lot of things in life where you need to go by the textbook and central banking is certainly a textbook issue and in a textbook ton central banking, we have all the dynamics to give a valid entrance to an easing cycle. but these are not normal times, and sometimes common sense should overrule a textbook so the real salient question is, will rate cuts give inflation and growth a boost now, we could also substitute

other words for growth we could say the stock market or we could say lower unemployment rates, although 3.6 two months in a row even with a weak jobs report last time is pretty low and ed lazear was on with me today and i have the greatest respect. and do you know any economists that put things in a more succulent way? no he is succinct in every way. he's looking at everything, especially dropping interest rates. but here's my issue. whether it's my ac in the summer or my heating in the winter, my furnace and unit can only do so much in other words, you know, when it's 40 outside and i set it for 70, perfect. but if it's 40 below like it is in chicago sometimes, i can't hit the mark and it will run and run and run, but it really doesn't make a big difference and i get a big bill. i think a lot's the same with regard to the u.s. economy right now, trying to heat it up when you have a lot of cold air coming from various points

around the globe, whether it's japan or europe. it's difficult it's difficult to leverage enough of an effect with dropping rates to accomplish it. and that's making the assumption -- i mean, let's be honest here. it's a reach in my opinion to think that they do a 50 in july and a quarter point the meeting after that i just don't suspect that the deflationary issues, or just the fact, have you looked at some developed economy year over year core inflation numbers, they're dropping and i think for the fed to make a difference there, the amount of leverage, how much their heating bill is going to be isn't worth wasting nine-quarter-point tightenings mario draghi wants us to join him. i think he thinks his flawed strategy wour better if we're all in the same boat but think about that, maybe being odd man out when things start to deteriorate might give us a longer-lasting, better economy by doling out those

eases much more religiously. morgan, back to you. >> rick santelli, thank you. one of today's biggest earnings movers, canopy growth, down 7.5% right now. aditi roy is in san francisco with the latest. adi aditi? >> hi, there, morgan shares are really taking a pummeling here, driving that bottom line miss that you just talked about the company says it's making some big investments to meet demand in canada and abroad and claim a stake in the cbd space here's what the companies are spending on. also, marketing and development of new products in anticipation of canada's cannabis market, opening to things like edibles, beverages, and vaping products at the end of the day. and also into the global cbd market, including hemp operations in several u.s. states and it's spending money on expanding its medical cannabis to markets outside of canada, in countries like columbia, spain, denmark, germany, south africa,

and australia. finally, r&d for marijuana-based medical therapies and clinical trials as a result of all of those spending costs, operating expenses went up nearly 3.5 times year over year from about $56 no nearly $243 million all of this driving down the company's gross margin percentage, which went from 34 to 16% year over year. adding to that pressure, our revenues did beat expectations canadian recreational and medical revenue were actually down quarter over quarter. the beat was driven by an uptick in other revenues, which came from canopy's acquisition of medical device maker stores and bickel and there may be more headwinds next quarter as a result of investments. canopy is also warning that its newly approved deal with acreage holdings will result in a material non-cash charge in the next quarter back to you guys >> aditi roy, thank you. after the break, $560 million funding round.

the ceo of ui path joins us right here next on the company's new $7 billion valuation and if ipo is coming for that company. we've got more "squawk alley" after the 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.

we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. the trump administration updating an obama-era strategy for ai overnight, putting an emphasis on public/private partnerships our next guest, the ceo of the robotic at the time and ai

unicorn is among the companies advising the white house their current companies include uber, pandora, and mcdonald's and is coming off a massive $560 billion funding round. is an ipo the next step? joining us is the company's founder, daniel dines. $560 million funding round is that right? right >> yeah, yeah. but we raised more than a billion in total. >> talk to me about training, what, more than three-quarters of a million workers on this how do they learn? >> we have quite a simple to learn platform it's a software platform they have to learn to train the robots using our platform. it's really easy it's more like using microsoft excel. if you can use microsoft excel, can you use our platform. >> you can graduate in a few weeks? couple days? >> i would say a couple months you'll be proficient with it >> how are you going to decide who gets that kind of training do they have to apply? are they chosen?

>> i think that everybody can get the training, really it's -- and then it's about graduation, actually so, we hope most of them will be able to graduate the training. >> what uipath does, you're focused on specifically the robotics, what does that mean? >> do you have anything you don't like in your daily job to do >> no, nothing >> well, i just see one of your colleague open an email, hoping to help in a web form. just two minutes ago this doesn't sound like fun. this is what we can do for your colleague and can do for every worker we can let employees focus on what is more human-like, what's more added value to your business. >> we mentioned a few of your partners, uber and mcdonald's. is there a good example you can speak to that sort of illustrates what you're talking

about? >> we work with fortune 100 companies. it's not just uber and mcdonald's we have really huge companies like exxonmobil, chevron we work in all industries. and everything that can be defined in rules can be everything is mandated can be automated. >> is an ipo in your near future >> well, this room sounds like fun, so i'd like to be here again. but right now we focus on execution or placing our customers, building great customer culture. >> we've heard all these crazy estimates of the number of jobs ai could take away mckenzie has that crazy report, 40% of service jobs.

do you think that number is too high >> well, i think we should look at facts u.s. economy is the lowest unemployment rate in like 50 years. i think ai will add to employment. >> will add to employment? >> will add to employment. >> will not subtract for jobs? >> no. >> because because people have to learn to use it and allows labor to focus on other jobs? >> actually, ai doesn't eliminate jobs daily activity of someone, ai eliminates some mundane tasks. not everyday jobs. it lets people focus on what's of value, like creativity, emotional engagement with people it will increase the service that we -- service individuals and companies will provide it will create a better world for sure. >> that's true they said the steam engine would

take away work and didn't happen that way. >> exactly. >> please come back and give us an update on how training is going. maybe we can get training. >> absolutely. >> yeah. >> yeah, sure. >> daniel, thanks. >> thanks. >> by the way, uipath will be joining us for an upcoming work summit in chicago, along with adobe, ibm and president of the chicago fed. we'll talk tech, funding innovation and growing the bottom line with the leadership. you can join by going to cnbcevents.com and applying. when we come back, can "toy story 4" revive the box office we'll talk about that. the session highs back below the dow's closing high back ithe nus.n remite ♪

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"toy story 4" racking up $12 million last night alone the second best preview night for an animated picture ever but can it revive the blues? julia boorstin watching that. >> with "toy story's" opening night behind "incredibles 2" last year, it's been a decade

since the "toy story" franchise and now "toy story 4" is expected to bring in between $200 million box office opening. working in their favor, 95% positive audience score on rotten tomatoes. they'll be opening in the second most location american films ever behind "avengers: endgames" and opening simultaneously in a number of markets, including china. will this be enough to make up for lagging box office sales ticket sales are down 8.5% from last year. amc are down 15% while cinemark can down 5%. "toy story 4" this weekend will

help grow disney's market dominan dominance. disney is responsible for one-third of all domestic ticket sales this year. disney's marketing campaign for "toy story 4" has been tapping into the nostalgia and familiarity of a brand that launched 24 years ago. despite talk of franchise fatigue behind the disappointing opening of "men in black," the franchise can still perform. back to you. >> we'll have to see what happens. i think carl is going to check it out himself tonight julia, thank you. today on "closing bell," we'll be speaking with amc ceo adam aron about the lagging box office julia just spoke about and if "toy story 4" can turn things around. carl will keep a close eye on the markets this week, if the

dow and s&p can close out another record high later today. >> yep you've got oil coming off the highs. 57 and change, obviously next week will be all about trying to read tea leaves going into the g-20. goldman has some forecasts now saying unlikely to be decisive you can bet the speculation will be for the week. let's get to the judge. record run for stocks. what comes next for your money is sp3000 and beyond the next stop new records, now what? ist been a huge week for energy. up more than 5%. tech up almost 4%. staples andutilities hit new highs again today, we ask, what's it mean for the bigger picture? "the half time investment committee" making new moves as wall street analysts make ke