♪ ♪ good wednesday morning welcome to "squawk alley." live from post nine, the new york stock exchange. great to have you, andrew. >> nice to see you. >> carl quintanilla is on assignment we begin today with social media. the first democratic debate set to air tonight with companies like facebook and twitter in the spotlight. the president just this morning claiming big tech companies are, quote, all democrats and are purposely repressing his reach julia joins us from los angeles

with more. >> well, john, ahead of tonight's debates, both facebook and twitter are making changes and announcing different things that they are doing to show that they are unbiased and they also want to be tools for civil discourse and valuable information, not for the spread of fake news now, twitter will be broadcasting the debates in english and spn aish with tools to make those live streams easier to find twitter is enacting new more stringent rules to enforce what they call healthy election conversation explicitly prohibiting manipulating or interfering in elections, including efforts to suppress voter turnout cracking down on spam as we twitter will regular lu disclose efforts to manipulate the platform and political and issue ads will be explicitly identified to you a void accusations of bias, both twitter and facebook's policy teams have

been in touch with the dnc, rn, and all campaign teams facebook says those organizations can reach out it to identify suspicious behavior which it will then investigate facebook is also taking specific actions to monitor threats and investigate reports before, during, and after the debates in particular it is creating what it's calling an operations center similar to this war room it created for the midterms in brazilian elections last fall. this will gather representatives from a range of different teams, including engineering, data science, and public policy now, all of this comes as right now facebook and twitter executives are testifying on capitol hill abo this is going to be in the spotlight this presidential election it will be the ultimate test of whether or not these companies are doing enough back over to you >> yeah, we are going to be talking about it so much more. julia, thank you for setting us up with that lawmakers on capitol hill this

morning. for more on all of this, let's bring in two notable venture cap lists. gentlemen, good morning. cameron, i'll start with you all of those details that julia just laid out ahead of this democratic debate tonight and some actions that social media companies are taking to try t y eliminate bias, does it go far enough >> it's proactive steps. learning from happening in 2016 and the backlash they got, particularly facebook and fake news, some of the content that was sort of ridiculous, they are being careful to prevent anything from happening and i think it's better to be preventative than retroactive. >> the states akes are high com into the 2020 elections. it seems like all sides have some sort of criticism to level against the social media giants right now. is there any way forward for

them that would be, in terms of some of the safeguards and some of these rules of the road they are putting in place, that would really appease everybody and work well and be fair? >> well, i think, you know, one side sort of, you know, thinks facebook is not censoring enough the other side thinks too much they wanted to be neutral platforms. now, that's changed. i think in the short term they are being to be buffetted by competing political things it will be like tax rates. one side wants to pull in one, the other side the other direction. in long term the algorithm, all those things are transparent that's a 10 or 20-year pros zbres. >> do you think the platforms are biased >> i don't think so. i am sure the executives have opinions like everyone does. the platforms themselves year over year see anything inherent in twitter that suggests to me that they are showing one kind

of cop tent verse the other. i think they are fairly objective solutions. >> what do you think of the idea that this is all theater look, i admit that they are doing things and hopefully to the extent that there is really fake news out there and really bad actors, you want to stop that but there is going to be a battle over this no matter what. >> of course. >> but should they be open platforms? this idea for freedom of speech, i mean it's funny because the newsstand down the street, you can decide, the guy selling the magazines, not sell the magazine there is no idea that somehowhet has to sell everything rc. >> right i think these solutions are -- the newsstand on the street reaches one hundred people these reach hundreds of millions of people. there feels to be a responsibility on their part given their scale to be open and objective and eallow both sides equal air time.

>> so i where does this idea come from? i was tweeting on twitter, of course, this morning that president trump's tweets get shoved into my feed routine lay even though i don't follow him that's a weird way to repress somebody i mean, if there is really this anti-conservative bias, they are other ways to do it other than serving up conservatives to me proactively. that's not what i kisigned up f. what's happening >> yeah, i think the debates here, you know, are going to be basically like with the traditional media and now social media it's going to kind of mirror the same die am that i can where one group main days it's mostly unbiased and the other says they abiased against. you will see similar partisan lines harden here. >> can you prove it one way or the other if you are twitter >> i think you could it's hard without root access because these social networks

don't let you scrape all the data very easily in nearly you could show up with analysis, but it will be difficult if you weren't the network operator themselves. >> one other point - >> go ahead. >> i was going to say one other point, if we look at other peer-to-peer networks, the phone system or mail system, we don't ask the at&t or postal service to do content controls on people foej each other or physically mailing even other there is rules against mail fraud where you go after the bad actor. that might be a more productive way of thinking about things i am not optimistic that our politics are heading that direction. >> interesting it's interesting to hear you talk about common carrier in terms of technology and social media. let's move to the next topic cr crypto a report in the tombs times saying people are expressing doubt about facebook's

cryptocurrency offering as cryptocurrency flirts with the $13,000 mark you are the former cto of coin base first to start, bitcoin nearing 13,000 right now 18-month high. why is it rallying >> well, the space is much farther along. most people have probably just paid attention to crypto in 2017 now they are paging back into it again. there is a ton of infrastructure that has been built the last 18 months people are bullish on bitcoin because they see it as a hedge against political instability over the next election or 24 months. >> why do you think some of facebook's partners would be expressing skepticism about libra? what does it bring to the table? what doesn't it? >> endemic to facebook and some of the things in the past year around privacy concerns and how they handled the 2016 content. so these brands certainly want to be involved i think a lot of what is happening now is a fomo, no one wants to miss out, no one wants

to be left out of facebook's program so they are going to jump and say they are a part of it. facebook is going to borrow the brand equity, visa and mastercard and these great financial services companies have to bolster their solution and make it seem more credible both sides are feeling each other out and seeing how this goes it's a tentative agreement. >> do you think theprice is correlated with this facebook introduction >> yeah, a little bit. >> if you think that facebook -- that libra is going to be a bust, you have a problem because the whole inside,dea, i think, everyone will have an electronic wallet and get interested in bitcoin. it's not clear that bitcoin is going to be on or allowed -- >> in the solution. >> anyway. >> right yeah, i think it's created a stir in the ecosystem. people are excited about, you know, cryptocurrencies again that's part of it. what he mentions around political instability and some of the things you are sieg, bitcoin could be a hedge against

that. >> "the wall street journal" reported today that most of the push in terms of price result was the retail customer, not the institutions in fact, the institutions are shorting it right now. >> why isn't libra the worst thing to happen to bitcoin in the past two years if i'm in zimbabwe or venezuela, it seems to me that i'd be more liking for price stability in something like libra versus bitcoin, which is up and down and up and down. if i'm in the u.s. and i'm going to, you know, actually transact with something, wouldn't it be with libra >> that's a great question i think they are very different. bitcoin is more similar to gold and libra is more similar to visa or mastercard for the reasons that lots of folks may or may not trust facebook, they may not want to keep like their money on facebook servers, but they would hold btc it solves a different problem. it's decentralized

it doesn't have like 100 validaters or what have you. no individual, no group of companies can please your bitcoin or take it away. i think they serve different use cases. with that said, i think facebook has good intentions here i know many of the folks involved on the project they are walking into a situation similar with microsoft hailstorm almost 20 years ago. at the height of the antitrust thing, they tried to roll out something like password or the internet, had other services and they ran into a hailstorm of political opposition and eventually just kind of discontinued most of that project. and that's a possibility with libra. like basically you have had outcry from not just the u.s., but u.k., france i think it's going to be very touch and go if it even launches it's going to be like months, maybe years away from launching. so year over year logical look at it as a competitor to bitcoin at all i don't think it's as competitive. >> we will leave it there, gentleman.

thanks for joining us today. >> thank you. and meantime, we want to note philadelphia energy solutions intends to shut down that refinery that was damaged by an explosion last week. philadelphia mayor jim kenney saying the utility's ceo said the shutdown would occur during the next month it is the largest refinery in the northeast and reports earlier that this would happen sent the price of gasoline spiking. >> okay. >> whwhen we come back, loot shares of micron one of today's largest earnings movers, surging after a beat on revenue. the ceo of that company is going to sit down with us exclusively next we are back in a moment. hi. this is the man that's going to check your eyes grandma. cognizant ai solutions are helping healthcare companies advance diagnostics and prevent blindness in patients with diabetes.

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shares of micron surging, up more than 14% this morning after a strong quarter showing growth despite the u.s./china trade tensions memory chipmaker saying it expects chip demand to recover somewhat later this year joining us exclusively micron president and ceo sanjay mehrotra good to see you. >> good to be on the show, john. thank you. >> i want to get right to this huawei issue that you talked about on the call. they are your biggest customer, i believe, at around 13% recently you said, quote, we determined that we could lawfully resume shipping a subset of current products because they are not

subject to export administration regulations and entity list restrictions i know you didn't want to give a specific amount that you are sthipg shipping to huawei the last couple weeks, but is it more than half of what you would normally be shipping or less >> we don't talk specifics about customer revenue or customer products that we ship to what i will tell you is that in q4, the quarter we are currently in, our revenue shipments to huawei would be less than meaningfully less than what they would have been otherwise if the huawei ban was not in effect and similarly, you know, if these restrictions continue into our fiscal year 2020, our outlook for revenue for huawei would likely be less than what it otherwise would have been without the ban. the important thing is that we are -- go ahead. >> go ahead. >> the important thing is that

we are a very diversified company, diversified product line, diversified end markets and customer base across the globe. we, of course, focus on continuing to optimize our business just like we showed in our quarter we just reported, we actually reported solid results for the company. >> sanjay, how comfortable are you with your reading on the rules with your shipments to huawei that you will be able to do that. since you talked about the fact that you started resuming some shipments over the last couple of weeks has the administration contacted you or pushed back at all on your doing that >> when huawei was placed on the entity listing on may 16th, we immediately stopped shipments to huawei our team of experts, legal experts, actually reviewed our, you know, complex set of

manufacturing footprint across the globe and the product portfolio and studied the entity listing as well as the export administration regulations, limitation, and they determined that there is a subset of our products that we were previously shipping to huawei that we can continue to be shipping. of course, with respect to the rest of the business, we continue to assess against the complex set of regulations and against our complex footprint to guide our actions for the future of course, the situation, as you know, remains fluid with respect to huawei. certainly it has a certain element of uncertainty we will always comply with the rules and regulations of the u.s. government as well as for that matter rules and regulations of governments in all of the regions where we operate. >> sanjay, a number of reports have pointed out in the last 24 hours the regulations don't prohibit shipments of two huawei

components made in foreign countries as long as they don't contain more than 25% of u.s. o originated material. do the regulations incentivize a company like micron to move more business overseas? >> you know, these are a complex set of regulations that are a part of export regulations and restrictions, and there are all kinds of ago pegspects in curre terms of technologies as well as country of origin, where you manufacture, what your supply chain looks like all of those considerations are important. micron is a very diversified company across the road, spread out across the globe, as well as our manufacturing footprint. and certainly that helps us in this situation as well but we are absolutely continuing on the strat zwri that strategyi terms of a strong global footprint that already exists

for the company and adding diversified markets and diver diversified set of customers because the application for memory that micron makes are really growing fast in terms of when you think about artificial intelligence, machine learning, autonomous, iot. all of these are going to require more memory and storage in the future, and we have a strong product roadmap, strong technology and manufacturing footprint, strong customer relationships and team to continue to address these. in the near storm our industry is facing challenging aspects with terms to supply that has impacted the industry. of course, we are taking decisive actions that we discussed in our call yesterday with respect to cutting back on some of the production as well as capex for the future in order to bring our supply in line with the demand as well as to help improve the industry supply demand balance

>> we always, you know, respect what the administration, it's point of view, and, you know, of even absolutely always focus on doing what is right in terms of complying with the laws and regulations of the government, you know, enforces on the companies, and in this particular case with respect to huawei we have absolutely studied those regulations and have begun shipments i would say i think it's very important that the two countries, u.s. and china, are able to resolve their differences, aspects of intellectual property, respect for intellectual property, fair level playing field. these are important aspects that our administration is trying -- >> there are companies that have voluntarily decided to stop

doing business with huawei on their own irrespective of the laws and >> well, i think it's important that, you know, the rulings by the -- we then have to take care of our contracts with our customers that actually require us that if it is lawful to ship products, then we have to ship products so we have to, of course, in a very globally competitive environment, we have to continue to drive the business in an optimized fashion while complying with all the laws and regulations here so we stop the shipments and what we believe is we are doing the right thing for the long-term competitiveness of the company while complying with the laws and regulations it's important for the global competitiveness of the semiconductor industry as you can see from other companies, too, that the semiconductor industry association has indicated that are actually making their own decisions with

respect to the shipments >> sanjay, speaking of, i want to talk about cap ex which you mentioned. you said that you're going to cut cap ex significantly for fiscal 2020, and that will be one of the things that helps get the industry into healthy supply demand balance do you think you'll be able to handle all of that in the one fiscal year is your sense? i mean it's hard to know these things but your sense that the rest of the industry is going to sort of cooperate in that and not try to take advantage? >> what's important to understand is that our industry currently, as well as has excess supply and that has created a challenging pricing environment in the industry as well. and because industry in the last six months had, you know, demand weakness and what we've talked about is in the second half of this calendar year, the demand

will improve compared to the weak levels of the first half. so it's important to bring the inventory position, the supply situation in better alignment with the demand projections that we have. and we have cost effective inventory that we will carry into next year and as we are seeing the demand, for example, from the cloud operators here in the u.s. picking up, driving our growth in the second half of the calendar year, inventory situation will over time improve but it is important to take actions with respect to supply growth it's important to have shipments be exceeding the supply growth so that ultimately inventory gets in line and demand and supply gets in line. and again, when we look at the long-term trends of -- driven by artificial intelligence, iot and autonomous, they all point to increasing growth in demand for flash as well as for nan memory

and in time the industry will get back to the supply/demand balance. and we always look at our cap ex very carefully in fiscal year 20, we are taking prudent, decisive action in cutting back our cap ex. these are things for ongoing future years as well we will evaluate them as -- depending upon the industry conditions as well as our own overall technology and production capabilities. >> always a challenge in the d-ram business and chips in general. sanjay, ceo of micron, thanks for being with us. >> thank you, jon. >> shares leading the s&p as well up 14% today. still to come -- another company in focus after earnings. fedex rising in early trading after posting a beat on earnings again, issuing weak profit guidance for the year ahead or disappointing. what's next for the stock and how its rift with huawei and the commerce department is factoring in and amazon

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welcome back fedex out with an earnings beat but warning fiscal 2020 will be a transition year for the delivery giant as it focuses on e-commerce growth while reducing costs. fedex express, the pain point as trade disputes and global economic slowdown have created significant uncertainty for that segment which is fedex's largest. ceo and chairman fred smith discussing the company's presence in china as it's been caught in the crosshairs of trade and saying fedex is dedicated to compliance in that country and it's expressed that and reinforced that to the chinese. take a listen. >> they audit us in guangxhao and other places but we've cooperated fully with the china state postal bureau and their investigation of the

two missed routed packages and the return package again, we apologized to the customers. they never left our possessions. we offered to make things right but that has nothing to do with china or huawei. >> a lot of topics covered on this call including that lawsuit filed on monday in d.c. federal court over exported administration regulations which the company has argued would impose an impossible or have been imposing an impossible burden on that a lot of connections made around those huawei packages and that lawsuit. but to that, smith also stressing on the call that the huawei packages were only peripherally involved in this lawsuit that they filed. in fact, it goes back many, many years. and the reasons for this lawsuit also talking about some of the other fedex executives talking about some of the other things -- >> like amazon >> exactly >> amazon air. >> yes not renewing that contract for

domestic air freight services saying that would be a near-term headwind for fedex express as well but that by fiscal 2021 they expect that to reverse course >> that's a big bet, though. >> it's a long-term bet. >> meantime, european markets closing. seema mody has a breakdown of the action >> hello, andrew fractional losses for the major european averages and what has been a relatively light trading session in europe. yields, though, are ticking higher and some response, the european banks are trading higher deutsche bank up nearly 4% here's another big story in europe thyssenkrupp, the finnish engineering firm is preparing to buy the steelmaker's elevator business the company had been exploring a new strategic option after eu regulators blocked their bid to form a joint venture but tech, another big story that we're watching there as well

micron's upbeat outlook for the second half of the year lifting shares of european semi stocks take a look at the performance of these stocks, though, from a longer term perspective. it's worth noting that the largest chipmakers are still down sharply from their recent highs as persistent demand worries have led to a string of profit warnings this year. you are looking at germany's siltronic. down from 50% highs last year. ams talked about some of those concerns and iqe slashing its guidance citing the u.s. ban on huawei technologies. there's where we stand, guys back to you. >> seema, thank you. now to courtney reagan for a news update. >> here's what's happening at this hour. iran's leader ayatollah khamenei says that iranians will not budge or change their stance following the news u.s. sanctions. in a speech today, he called the trump administration the most sinister government in the world.

hong kong activists called on leaders of the u.s. and european union to raise the issue with china's president at this week's summit in japan. beijing has strongly opposed such a development saying hong kong matters are strictly an internal chinese affair. president trump's son eric confirming that he was spat on tuesday night. the incident reportedly took place at the avery, a chicago cocktail lounge. eric trump calling the incident a disgusting act by somebody who clearly has emotional problems and a study published in the journal of the american heart association suggesting that not all types of sitting are bad for the heart. those who watch the mofts tv are more likely to develop heart disease but when it comes to sitting at work, those who sat most had the same health risks as those who sat the least that's our cnbc news update for this hour. back over to "squawk alley." >> that's good to hear as we all sit here and talk about it >> thanks. >> courtney reagan, thank you.

as we head to break, take a look at shares of slack. initiated over at baird with an outperform rating citing strong growth potential and a competitive position in the space. stock is up 3.5% right now and how about netflix set to lose its most watched show, "the office" to comcast's upcoming streaming service. our parent company we'll discuss that next. a lot more "squawk alley" straight ahead 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.

welcome back to "squawk

alley. representatives from google and facebook and twitter testifying as u.s. officials are gearing up to prepare an antitrust probe of alp alphabet joining us to discuss is victor anthony and kevin rippy, co-head of internet research at evercore isi. just let's start here. handicap this. we're all having this conversation every single day. gibber jabber, about what's going to happen to alphabet or any of these companies are they going to get broken up? realistically, do you think this is really going to happen in any kind of time frame >> i'd put it at low that real impactful legislation is rolled out. the political will to actually move forward with something like a breakup of the big tech companies just really isn't there. that's a multiyear process whoever would start such an investigation or process wouldn't be able to finish it.

so that's really where the rubber would hit the road and you probably don't have the political will >> what about financial will i bring that up because there's been research coming out and notes, arguments coming out as of late that maybe if some of these companies did break themselves up there would be more value to be realized as investments. >> that's an interesting question certainly for the likes of an alphabet, the value of youtube within that is probably north of $100 million and the lack of disclosure is one of the more frustrating points if we're talking about amazon, aws, the realization of a splitup, you could make that argument there's a sum of parts, accretion of value >> there's a perception, people say, alphabet is a monopoly or facebook is a monopoly i'm not sure the public even appreciates it it's technically not illegal to be a monopoly. that's not actually illegal. >> right >> maintaining your monopoly

illegally is illegal so that's a different thing. where do you see, given that you'll hear the government hears from all sorts of competitors. where do you think they're most vulnerable >> well, listen, the way i look at this whole thing and agree largely with everything you say. if i look at facebook and google, alphabet in particular, these are massive ecosystems very difficult to break apart an ecosystem because it will be extremely disruptive for users so i place less stock in this whole antitrust issue when -- as it pertains to alphabet -- >> you think separating google and youtube would be difficult >> one of the co-founders of facebook on cnbc saying you should split up instagram. i've heard others say split up youtube. but instagram and youtube are so intertwined with the core platforms of facebook and

google they share advertising platforms, technology. it's very difficult to split that apart when you do do that, and the success of youtube and success of instagram has been largely dependent on facebook, the parent companies and them driving users to the platform. >> there are some potential downstream effects of regulation you guys talk about the app store in particular. if there's pressure on apple and others to lower the themes they charge, some companies could stand to benefit match in particular. why match? >> so if we think through who are the biggest payers of app store fees, you have the mobile gaming companies and tinder. 50% of match revenue throws through the app store and you're playing 30% of that back to google play store or the apple app store. the analysis we've done suggests there's meaningful up side to the financials for the likes of a match group if those take

rates do come down >> okay. we'll leave the conversation there and we'll sweep right. victor and kevin, appreciate it. when we return, a live report from the first city to ban e-cigarette sales. later, another leak from tesla? is email the next twitter for elon we've got more "squawk alley" eater the brk. dow is up 39 points ♪ there are roadside attractions. and then there's our world-famous on-road attraction. the 2019 glc. lease the glc 300 suv for just $459 a month

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state of the markets the fact that bonds, gold and staple stocks have been rising or is the surge in chip stocks this month a thing you should be focussing on the investment committee on that case plus, five stocks contributing more than 30% of the s&p's gains this month so we'll discuss what the concentration means to your money and with oil up 3% today, our call of the day takes on a stock that just got a big upgrade. is it time to buy conoco phillips that and more at noon on the half jon, see you in about 15 >> all right see you then, scott. and we already knew investors were putting more money into single family rentals, but now they want a whole new type of home diana olick is in d.c. with that story. >> during the foreclosure crisis, investors scooped up millions of distressed homes and turned them into lucrative rentals. foreclosures are mostly gone and the regular market is very pricey investors are turning to builders in a big way. and the builders are responding. today, tampa-based erc home

builders is offering investors private shares in a so-called soft ipo hoping to raise $100 million to build more than a thousand new rental homes across florida. the homes will be in contiguous tracks and they'll be sold in bulk to big investors. >> we think there's a consumer rental demand that is driving these institutions to want much greater levels of inventory of this product and we feel that they are learning or have learned that new inventory is a much safer and more official rental product. >> the build to rent business is exploding. several companies including toll brothers and lennar are dipping into it. 37,000 homes were built to rent in 2017. that grew to 43,000 last year. and some estimate that could hit 100,000 homes this year and into 2020 buying new has a lot of benefits for investors.

>> from some of the typical repair factors that come in at 15, 20 years of ownership. there's also general contractor warranty there's limited product warranty of your appliances >> and the rents for single family are growing fast. 4.5% annually now. compare that to 3% rent growth for multy family apartments. also much less turnover in single family rentals and the rental market is much less volatile than the new home sales market morgan >> it's amazing what a difference a decade and a housing crisis makes diana olick, thank you san francisco becoming the first u.s. city to ban e-cigarette sales despite being home to companies like juul. aditi roy is in san francisco with the story >> hi, morgan. juul which owns three-quarters of the e-cigarette market and is headquartered in san francisco responded swiftly to the vote. the measure would prohibit all sales of e-cigarette products that retail stores but also prevent anyone from buying those

products online and having the products sent to a san francisco address. juul saying in a statement this full prohibition will drive former adult smokers who successfully switched to vapor products back to deadly cigarettes, deny the opportunity to switch for current adult smokers and create a thriving black market instead of addressing the actual causes of underage access and use. the company is backing a competing proposal of voter initiative which would put tougher restrictions on selling vapor products to youth but stopped short of a total ban the company says it has enough signatures to put the initiative on the november ballot but it may hold it until march if that initiative passes. it would override the measure passed yesterday the company recently announced it has purchased a downtown san francisco building not far from our bureau for its expanding workforce. a note was put out pointing out new york and california have both led the way in disruptive regulation in the past from things like crackdowns on indoor

smoking to sugar-sweetened beverages and those efforts don't necessarily spread to other states they also expect juul's u.s. exposure will fall over time andrew, back to you. >> thank you, aditi. we should say, do not miss this "vaporized -- america's e-cigarette addiction" premieres july 15th at 10:00 p.m. eastern time it's an in-depth investigation into e-cigarettes. are they a curse or a cure by the one and only carl quintanilla. lomo oa t ren "squawk alley" still ahead. stay with us i want to pay off my debt and move into my own place. but i need cash now to do it. do you get regular payments from an insurance company? yes. in exchange for some or all of your future payments, we give you a lump sum of cash now. call now, and you'll also get $25 for receiving a quote. (announcer) call 877-cash-now. 877-cash-now. that's 877-cash-now.

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welcome back to "squawk alley. another day, another leaked email. a note from tesla's ceo to employees circulating on the internet this morning saying the company is close to hitting its q2 production and delivery goals. phil lebeau joins us now back at hq with the details on this note and why it's surfacing now >> why do any of these emails come out this has become the question for a lot of not only tesla fans but tesla investors when you see these emails, the question becomes, is this something that makes me change my perspective on tesla does the thought process about whether or not tesla can achieve q2 production and delivery targets, does that change because of these emails? this is about the fourth or the fifth we've seen in the last month, month and a half. and, really, it doesn't change because the language of the

email is pretty similar to what we've seen in previous emails. it's very much we're close let's work hard. if we put our minds to it, we can achieve our goals. pretty standard stuff there. so it's different than when we'd see elon musk's tweets in the past because i think they were much more definitive in terms of stating either goals or targets than these emails. and that's why at the end of the day, you look at the stock it's up two bucks. not really doing anything. and the reaction when these emails have come out, it's less and less of a move for the stock whenever the emails are finally leaked out >> phil, there's been so much focus on demand and just how strong that's been for model 3 if the implication here in these emails is that if they don't meet their delivery targets, it has more to do with logistics and delivery, shipping issues rather than demand is that a positive for investors' eyes? >> it depends how you look at

it some investors look at elon musk saying we don't have a demand problem. he's been saying that for some time and there are some investors who look at that and say what ceo is going to come out and say our product is not in demand. you rarely hear that from a ceo. true, they do have some logistical issues when it comes to not only production but also to deliveries. and this is a company that's still learning to ramp up production it's a quantum leap to go from where they were as a niche automaker to not a full-scale automaker yet but much more pronounced in terms of volume. and that's what they're going through. the growing pains of being able to meet those production targets as well as the logistical issues of delivering those vehicles around the world because, remember, fremont is the place where they manufacture for everywhere not just in the united states but for around the world >> phil, i have a question about these leaks. i will admit, as part of the media, there are things called strategic leaks. strategically leaked out memos

and letters to the media over time yes. but tesla is in a specific situation because he -- elon musk wasn't allowed to send out these tweets so my question is, when you've been in contact with the company, have they expressed a frustration and upset about these leaked memos or something else? >> no. i never -- when i reach out to the company and discuss these, an email came out, it's usually a confirmation yeah, that's what was said that's it. there's never, oh, what is going on here? and you guys have dealt with companies in the midst of emails that are being leaked out. you can sense the frustration. you do not get that sense here look, there are enough people at tesla who are going to be talking with reporters that they know that these emails are going to come out. and so i don't sense that -- they're not looking at this and being frustrated in part because none of these emails have had any content with them that could move the market.

a lot of them are, we're close to record deliveries we work hard if we really focus, we can achieve what we're looking for that's the kind of stuff that nobody is going to look at and say, oh, my goodness >> i think they are moving the market a little bit, moving the tesla stock here and there, around the edges >> around the edges but not the way his tweets used to i miss the tweets. those wery in days nothing like waking up at 4:00 a.m. and someone saying, did you see what elon tweeted? and you think, what have i got today? >> be careful what you wish for. phil lebeau. thank you. after the break -- apple's latest acquisition perhaps a signal that the company's self-driving ambitions are still rollinalg.g on "squawk alley" will be right back ng 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.

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apple acquiring self-driving start-up drive ai which had ceased operations over the last few days apple hiringing several of its employees in engineering and product design as well signaling that the company is far from calling it quits on its self-driving hopes drive ai had told california state officials it was prepared to permanently close its offices on friday and lay off its 90

workers that had been shopping itself around since earlier this year you'll recall apple's own self-driving team went through a massive round of layoffs earlier this year cutting 200 employees from its project titan the amount of this deal for drive ai was undisclosed but the latest valuation came to around $200 million a couple years ago, guys and apple, you might recall, they shut down kind of froze the ipad effort they'd been working on for years put out the iphone and went back to the ipad. sometimes they put things on ice and come back. >> is this about the technology the company was sitting on >> don't know. it's apple >> okay. >> we hear reports about these cars driving around. there are apple cars on the road i mean, being tested because occasionally you see images that get tossed around. >> i don't know if you see people in them or not but often times those cars are for mapping. apple has them driving around. they compete with google maps.

>> these may be more autonomous with test drivers in them. >> you are the eyes on the street >> i go to all the blogs i don't know what the bloggers are saying >> all right well, we'll keep our eyes open for that as well we head toward noon. major indices higher but you can hear more about that on the half. i'm scott wapner the great debate over the state of stocks and why the chip comeback could be a great sign for your money it's 12 noon this is the "halftime report." >> chip comeback are micron's numbers and the stock's jump enough to get investors back in the game the sector is still 12% off its 52-week high but 11.5% this month plus, president trump is expected to leave for the crucial g20 summit within the hour this rally may be dependent upon a successful meeting with china, and the bi