alley is live. ♪ good monday morning. welcome to "squawk alley." i'm carl quintanilla we're going to start with wework as several board members look to push out adam newman, ceo. karen swisher joins us this morning, new york times columnist and cnbc contributor we talked on friday and we hear

from the journal and now the "times." i mean is there good read on how much danger he's in? >> i don't know. he has control of the board. i think he ph wins a lot of support. the company needs money and dep was an important part of this whole thing and therefore he kept quite do what he has the power to do necessarily. >> yep wipe out the entire board if he wanted, but they do need soft bank's leverage. how much money do they need? >> softmu softmoney, we'll see i think everyone is interested in getting this thing back on track and sort of recover from the disastrous s-1. >> kara, this feels different to

me from uber but i can't figure out why. it's these two ceos who have this maverick streak who are on this growth at all costs, sort of tear. so why does it feel to me like if newman were to step away, the whole reason for believing in the company's growth wouk be at issue here. >> you mean without him it's nothing? i don't think that's true of any company >> i'm not saying that, no but so much of the mythology around the company is his take over the world thing is that really any different from travis or no. >> they're a different personality. travis is so pugnacious andso aggressive this guy is aggressive but he has a surfer dude vibe i don't know if it's true or not, but that's what he puts out. maybe in a very few small cases,

but, you know, they've got an interesting good real estate business and somebody good at this could bring in talented executives i think it's gotten out of control, the valuation and everything else, so we'll see. >> kara, that gets right at my question which is if for some reason adam neuman is out, who would run it >> i don't know. he would still remain chairman under these plan, so that depends. but there's lots of people there's tons of people good at real estate. i don't know donald trump i don't know somebody but there's tons of job. if he's out of a job in 2020 for example. it's not a tech company, so it's not a tech answer. >> right just to game it out, kara, on friday, you threw some cold water on the idea they could

actually come to market with the ipo, but if he did agree to become nonexecutive chair, how much does it improve their chances of getting that thing done >> i would slow this thing way down in terms of going to an ipo. they need to fund it it's losing a lot of money it's not improving it's not scaling in a way software does. the tech company, you make money on all the things. the costs keep growing as the business keeps growing so someone has to get in there that's what's happening with uber with the layoffs. like galloway said last week on the program, everyone understands math, and math is the problem and not anything else. >> it sounds like you think the skepticism, the hesitance of investors to back the ipo is more about the model, not whether he flew on a private jet without pot. >> they knew about that before

that's not new that's ridiculous. that's not a giant revelation about this guy investors always know this stuff and later when they throw founders under the bus, they pretend they didn't know in some executives' cases, they do hide things, but they had to know his behavior. he's smoking pot on a plane. if he was doing great, they would let him do what he wants i don't know that was overblown, but i think it's just that now they're embarrassed. now they're embarrassed by it publicly. >> kara, how far do you think this reverberates in the softbank world in terms of funds? i guess how much more scrutiny do you think this adds to that company? >> i think we need to look at -- not just me but everybody needs to look at the investments they've made a lot were done indiscriminately i wrote a story two years ago

about this, you know i think we need to look at uber. we need to look at all the companies they put a massive amount of money into look i think even their investors are worried about this, losing money. we'll see. at the same time hasan is an interesting guy who puts all his shoulder into something and the question is did he put too much in and too much capital. i think that's the issue, too much capital that isn't going to be returned to their investors. >> on a last point, kara, we've talked for years about large cap companies largely held with big growth ambitions and losing money. do you see that closing because of this? >> if it's software, it's one thing. real estate, that's another. carl, you and i can open something if we're spending an enormous amount of money and growing it to crazy sizes, but

you have to get the cost in line math is back in vogue, carl. >> no, no. keep spending, cutting taxes no problem we'll not end up in a bad place. >> kara, moving on, several facebook investors expecting to the ftc that includes snap who kept an eye on tactics this is a new twist, isn't it? >> volt more, yeah they shoplift all his best ideas. snapchat has to be at the center of this. if yu look at netscape, microsoft, but snapchat is the one facebook hat most impacted it's the only social site that's been created for a long, long

time and it probably has a lot of stuff to say about how it's been impacted, its growth has been impacted by facebook continually borrowing its ideas. >> a lot of the piling on of facebook right now i feel is like muddying the waters i think you have to determine at what point did facebook become so dominant that you're talking about social networking or digital p impacting. for a long time it was getting potentially pushed around by google. >> no. >> yeah. >> no, never. >> you've got google trying to take the data out of facebook? was google going to take -- what was it >> google+. >> that didn't work out so well. people worried about that. at that point, google was huge was it bad for facebook to be

buying up little companies that could have ended up being competitors? i don't think so. >> i think it's more than copying the ideas. please that was started on snapchat every everything they did was laughable. i'm going to skip the word borrowing. and then a no vote thing, the idea of knowing. it's knowing what apps are going to be popular and going out and buying them. it doesn't look good i bet there's lots and lots of emails about these i think the way these companies are probably a little sloppy in their email things and things will come out that will look bad. that will be interesting once the subpoenas pull in these emails i happened to be interviewing one of the ftc commissioners today, so we'll see what happens in my podcast. you know, unveiling this stuff will be where we'll see whether

there's real problems. these are people with subpoena powers, and that's the danger with facebook >> i'm glad you brought up no vote a lot is paid to instagrams, whatsapp and other profiles they've made over the year i just wonder if no vote is going to be part of it when they put together an investigation here. >> absolutely. it was used to identify apps that were popular and then buying them. it makes sense, and at the same time, not knowing how big you are and the impact you are and not having a sense of it is -- you need to have it if you're that big what's interesting in one of the stories -- i think it was in "the wall street journal" drn they're talking about how facebook is trying to make friends in silicon valley. it's kind of too late. come on. they shouldn't have behaved like that in the first place and now chickens are coming home to roost in that area, you know,

eventually we'll see if they did the things the ftc and others are tryinging to figure out if they did that will all be public and we'll see. >> kara, it's not too late. >> i'm sorry, too late for what? >> to make friends look at all the friends they have in silicon valley. >> after the lawsuit i'm waiting to be invited on the facebook supreme court john, you and i could serve. it would be great. >> life turns? >> first ultimately they decided against buying this was the thought at the time how could they co-exist.

>> bob igor is a wise man. it would have been such a bad brand misfire for disney and he would have had his hands full. he's not someone who wants to get involved in that that was a smart move not to buy that company for sure. >> do you think this is priced in to two iter where it is now because i imagine if disney wouldn't buy them and imagine he's looking back and saying that was a good call, who would buy them at this point is there no takeout premium that this stock deserves based on the bad side of the good/bad balance and the platform? >> i don't know. sure, there's buyers there's lots of buyers google might consider it that was a problem too i remember having lunch with a google executive of who would buy twitter and they were like, we're not getting near that.

that's so political and such a mess that was pretrump. now it's sort of nobody wants to touch that mess in terms of what to do about him if anything bad happens and the political stuff and hate speech. a lot. it will remain independent for the foreseeable future. >> we had this talk earlier. stock is up for the year. >> yeah, it is. >> versus the s&p. is this about their ad sales force getting it together or about bad or ill or good, people are on it? >> yeah, it's good people are on it it's a good lilt business. i don't mean to call it little it's a good little business. it doesn't have to be as big as facebook we'll see what happens after trump and the political season one of the reasons, the media is on it, the public is on it because of political issues. we seal see where it goes.

i'm not denigrating how big it is, but it's not big compared to other places it could be an independent and that's that. >> still below -- well, actually it went public in 26 but got into the 70s as everybody remembers. kara, good to start the monday with you good to see you. thanks. >> thanks, bye-bye. kara swisher. when we return, the emmy awards is an apple nominaonti next? dow's down 25. stay with us nt free access to r. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale. mm. yeah, they say if you blanch it it's better, but that seems like a lot of work. no hidden fees. no platform fees. no trade minimums. and yes, it's all at one low price. td ameritrade. ♪

welcome back to "squawk alley. streaming dominating the emmys all of this with more on the way. apple pc plus, peacock plus and others set to debut in the coming months. with us michael wolf and former net flick and hulu executive simon gallagher, principal at sbc global let's start with you, michael. how important are the awards >> they're important because they provide the legitimacy for the programming and it highlights their new programs in a way they couldn't accomplish through advertisements and other forms of promotion our research activation shows people are coming for the library and it's why there's

been a lot of changes in licensing. so nbc has taken back "the office." "friends" is taken over by max, part of warner bros. and "seinfeld" is going to netflix they know the shows are bringing a lot of viewers people are staying for the originals, and they'd like to flap given the a they're spending on producing the originals. >> i want to get to that in a minute simon, you used to work at netflix and hulu when you see companies like amazon and netflix winning last night, does it justify the spending, and if so, how do you qualify that >> they know exactly what they're doing. they're managing their budgets they know how much they need to

spend. we've seen evidence of it. they're doing the right things they're right up there with hbo. so, yes, i think they're justifying it. >> which is more important, simon, when it comes to the emmy the buzz that the streamers get from the win with potential viewers or the kind of cloud within hollywood that might help them win the next bidding war versus a rival network >> look. it definitely all helps, but i think what you're starting to see is netflix is still being creative how to draw the best producers into the system. we've seen some unconfirmed discussions that ted and scott are exploring, how can they pay bonuses. moving away from a flat line to something that might be based more on films, i think they're still being creative and i think there's a willingness to lean

forward into netflix. >> michael, is there any reason to think -- there's been a lot made today on the heels of the emmys the idea that for hbo this is the big last hurrah as all these other companies continue to ascend, especially with "game of thrones" going away and some of their other popular series, do you think that's the case in. >> no, i don't, and part of the reason is hbo has penetrated across the 90 million homes that have cable television. it's a recognized brand and hbo that people are going for the originals. the originals are very important. it's not just game of thrones. it's all of the new things they keep throwing out there. so i think that people keep looking at these services and think that consumers are going to switch from one or the other. our research shows that actually people are stacking these

services, that they're going to subscribe to multiple services because they're going to get not just the originals but all of this other programs. >> michael, i wonder what you think about apple tv plus. i've been kind of megh, but then watching my wife and apple tv previews, i'm thinking, oh, we're getting apple tv plus. >> it's going to set you back $4. >> $4.99 i don't make all the decisions could we be underestimated apple tv plus? >> they've done a great job. look at what they did. they came from music to a modified paid subscriber shows on one service are not the same as the shows on the other, but apple has everything in their wheelhouse and in their tool kit to be able to sell you

apple plus tv. so apple is not only going to make money on their own service. they're going to make money selling everybody else's services and so will amazon. regardless of which services are successful, both apple and amazon are going to be winners no matter who else wins. >> we're looking at stock performance year to date and amazon is up 40%, amazon is up 18%. amazon has gone negative for the year i wonder if you think investors are right to start to worry how much this is going to cost them when you're going up against purses like apple's. >> look. i understand the concern i think that it's short-term you look at a leading investment firm like dan loeb they increased their position in the second quarter yes, the heat has come off the netflix share rise, but i think you're going to see that ratio

start to come down over the next 6 to 12 months into 2021 when it will start to look more like adon't want to say value stock, but it's not going to be what we see today. >> michael, we can talk about all the original content everybody is developing right now. you see the prices for "the big bang theory," "seinfeld," as a couple, are we in a classic arms race >> we are. whenever there's a content race. the companies really win and the content they have is going to make a big difference. it's why kevin maher of disney made what he did at the same time these companies are going to continue to produce and they're going to -- there's going to be a lot of competition for producers, people out there who can produce actors

it's going to be a world where people are going to buy multiple services ands each of these companies will try to outspend itself. >> thank you for joining us. >> that inch you. >> the dow just went positive. both that and the s&p are at about a break even right now after the break, we're going to take look at the autonomous box now delivering your pizza. "squawk alley" is back in just a up omites. ♪ keeping the night interesting, is all about setting the right tone. ♪ lower carbs. lower calories. higher expectations. ♪ the light beer you've been waiting for has arrived.

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> post mates is partnering up to deliver meals via robot phil lebeau has more phil. >> this is the next stage of delivery whether it's goods, foods bought by you and

delivered by a service called post mates post mates and phantom auto are going to be partnering up. it's going to be call ed serve teleoperators can drive the vehicles in case there's an issue on a sidewalk or they're crossing an intersection phantom auto, we've been tracking them. it's a startup out of mountain view, california it comes down to this. they have drivers tell operating vehicles they're sitting in a cockpit with a 360-degree view if there's an issue, they can deal with it we're going to see this with other delivery firms you've got domino's looking to develop its own autonomous vehicle service and the reason

this is important, guys, increasingly regulators are saying we like the idea of autonomous vehicles but we want to make sure there's some way for someone to step in if there is an issue, the vehicle hit as person, a pedestrian, if it hits a car, if there's some issue that makes it staal in the middle of the street that's what regulators are interested in when it comes to teleoperation. >> amazon and others developing their own. we've seen what a quagmire it's been for drone industries to be able to take off and be tested you could make a similar argument and how long and slow that process has been. i wonder where robots fit into that scheme and why we're really starting to see these take root here. >> i think we'll see it more with a vehicle as opposed to a drone primarily because the faa

is a bit more highly regulated as an organization it works much more closely with airlines, commuter operations, whatever it might be in terms of whatever in the air. in terms of the ground, you're going to see regulators get more active over the next couple of months, but you're already starting to see people say, the technology is there. we just need to prove it and once we prove it and teleoperation is part of it and it can be safe and effective, we can see it expand. >> just out of curiosity, how fast do these bots actually go >> not very fast that's part of the appeal here look they're going down the sidewalk. if you have one going down a sidewalk and it has to stop at 15 main streets, you don't want it flying down the street. conversely, morgan, if it's going slow down a sidewalk, you know it can stop if it's like a car, it brings in

a lot more issues. >> thanks. it's a fascinating trend let's send it over to sue herera. >> good morning. president trump is tamping down his decision to rival democrat joe biden and his son on a call with the president of ukraine. democrats say that could involve election interference, but today trump pushed back. >> we had a perfect phone call with the president of the you cain everybody knows it it's just a democratic witch hunt here we go again they failed with russia and everything and they bring it up. the one who's got the problem is biden. the national hurricane center says tropical storm karen is on track to pass near or over puerto rico and the virgin islands tomorrow. and a u.n. weather

organization says the global average temperature is set to rise 2 degrees fahrenheit over preindustrial levels other the last five months warning comes as governments meet today in new york for the u.n. climate action summit we'll have more on our next summit that's the news update for this hour let's get back to you, carl. >> sue, thank you very much. seema mody has a breakdown seema? >> take a look at germany's dax. the stockmarket there is setting to post its worst dade since august as new data reignites fears. here's data. german activity hit its lows since 2009 while the service sector improved at its slowest pace putting pressure on the german government. the euro's auto, mining, and

banking sectors trickling down 1% or 2% peugeot, germany's commerzbank among the worst performers, but the other big story has been the tour company collapsing overnight after it failed to go anywhere what's at stake? 21,000 jobs, 100 uk travelers stranded abroad along with others it's the largest situation as others work to bring uk citizens home thomas cook has been wrestling with 2 million in debt they could stand to cut capacity the other bing story is how the uk prime minister boris johnson

has touched down in new york, see how he plans to respond to this general story back to you. >> see ma mody watching europe for us. when we come back, an exclusive look inside we works boardroom. the latest in the we work saga if you didn't get that, you're hopeless back in a minute liberty mutual customizes your car insurance, so you only pay for what you need. i wish i could shake your hand. granted. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ when didwhen i needed ton? jumpstart sales. build attendance for an event. help people find their way. fastsigns designed new directional signage.

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adam neuman. we have more on the founder's risk factor both in we and across tech. hey, diedre. >> it's hard to imagine apple without jobs and amazon without bezos. they hinge on their high-profile founders you have right now in the spotlight adam neuman and

wework softbank and masason are pushing him out. now, shareholders, theymay not like adam's reported drug use and erratic behavior but with founder risk, of course, comes founder reward, and the question they face is there a company, and is there a wework or tech we rork he built it and raised billions. earlier he told me his relationship with masa son was beautiful and it took 20 minutes for masa son to make a gut decision to invest they invested $10 million. now even half that number is looking difficult to attain and

neuman looking more like a risk. guys >> diedre, we tend on wall street to measure the ipo as this point of sort of defining success, but not so out in silicon valley, right? adam neuman, even though he's based in new york, he's raised a ton of money, taken out a ton of money. in a way, he's already succeeded, right >> he's certainly succeeded. i think a lot of folks would argue that you go back to travis kalanick who never cared about an ipo, never cared about going public in the case of adam neuman and wework, they're in a time crunch they need to raise more money. can he keep that growth going?

certainly wework burned through money. they need more money, so i think that story still needs to be written. >> diedre, as all of this unfolds, i wonder with silicon valley and all a the tech companies, unicorns, whether it bolsters the case or chips away at it. >> if you actually look at the trajectory founders are giving away more and more of their companies compared to facebook and google days i think it will be interesting going forward. of course, all three of those founders are there and they're looking at an ipo next year. sometimes there's those sunset provisions with lyft we've seen what's happened with boxx it goes back to the question, are companies better led by their founders when you see this next generation of tech companies graduating and going on to

public markets, we'll see what this tells us. >> yeah. certainly never a dull day deirdre bosa, thanks for bringing that to us. all majors are higher, but first, rick santelli, what are you watching today >> today is the sixth day in a row that rates have gone down and then they went up. does that sound normal that's what we're going to discuss right after th at fidelity, we believe your money should always be working harder. that's why your cash automatically goes into a money market fund when you open a new account. and fidelity's rate is higher than e*trade's, td ameritrade's, even 9 times more than schwab's. plus only fidelity has zero account fees and zero minimums for retail brokerage and retirement accounts. just another reminder of the value you'll only find at fidelity. open an account today.

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welcome back let's get over to rick santelli. >> ten-year notes are not only fundamentals but in a large part logic. they have eight sessions moving up aggressively and six moving down back to back, you know, the fundamentals have not changed in the last 14 sessions that dramatically, so i guess first on the list is -- and we all know this to be true, but we're seeing it me as the ta size in so many ways including the behavior of markets and that is untethered to economic fundamentals while all of it isn't attached to the ed kr it cry circumstance most of it is. you look at oil, very

specifically global trade. some of these issues aren't directly correlated to the '07/'08 crisis, but many of them, indeed, are. think of how america is tethered when you think of the washington rate and let's not forget the swoon. when somebody is monitoring the markets, it's not only my job but my hobby a ten-year note from well above 2% down to around 146 and this happened rather quickly so one would think those eight sessions up was a response to that proactive down move which actually brings you to a more disappointed end result. if that is the hypothesis, that means global rates continue to be in a low rate major trend and that the big downdraft really which was precipitated by what was going on around the globe think negative rates in europe and japan and also think of balance sheets not only there but this this country,

quantitative easing. you o like at christine lagarde and there were a lot of ifs there. if the economy does better, if germany spends money to get the economy going. especially when you see air pockets. it's one of the biggest markets around it's not moving as much, which brings us to the biggest issue last week. think about it this way. we have more pressure with all the debt, all the issues on a global perspective running through pipes that are the same size if not smaller with banks and legislature's behavior when you have inventory, as an skpaem pl, with corporate as a bank, you have large inventories of inventories f much has changed dodd/frank, those inventories

don't change and finally exit strategy. we hear it from yra harris that makes people quite trigger-happy. jon fortt, back to you. >> thank you. still to come, apple's iphones are now on sale, but can they stop the unit sale skid we'll debate that next [ applause ] thank you. it's an honor to tell you that liberty mutual customizes your car insurance so you only pay for what you need. i love you! only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪ when didwhen i needed ton? jumpstart sales. build attendance for an event.

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we've got a full weekend of iphone sales with new phones, but can apple pick up sales in china and elsewhere? with us from one market, guys, good morning. pierre, you know i love a bold call and you are rarely short on those. $155, that's a call that apple is going to drop 29% from where it is right now. and i wonder given that iphone unit sales have already been slowing, what convinces you that it has that far to fall when they've shifted investors attention to services? >> it's a very good question and a question i get a lot from investors. i think the math works well for investors, as long as they get some comfort that iphone sales are stabilizing. so last year, i down by 15

percent on that kind of development. and then the stock recovered because investors got the feeling that now this was like behind us and iphone sales would stabilize. the call i'm making today is that i'm heading for a second step down for iphone shipments. that's based really on looking at the combination of 170 million iphone 10s, the latest generation iphones already being in the wild combining with the fact that people now replace their phone after three years than after two years. that means about a third of the first-hand is very new, latest generation iphones. that's going to be a development for this year y. see shipments dropping by another 15%. >> is that your worst case scenario even if it plays out that way, do you think the stock gets to

155? >> down 15% after a difficult 2018 seems unlikely to us. our worst case is down seven to ten percent kind of range. i think the argument and the discussion to be much more broader than what iphone units do. it ought to be more on what the iphone install basis does. i get that people will extend the replacement cycles. you're buying more apple products be that air pods or apple watch or apple services. i think the discussion ought to be more broader on what is happening and how much you are monetizing the ios install base versus just looking at the units. >> how would you respond to that >> i think i like the argument of install base. if you don't feel like you want to replace that, it's very much

stoke tg. that's something to monetize. it's a very difficult equation. apple has an -- people stick to their phone longer. it's kind of a zero sum game. it was very exciting two years ago. now it's painful. similarly, as apple gets into offering new services and continues to grow revenues from existing services and even as you see apple trading revenues for other devices or you see apple is -- so the upside from this new services and newer opportunities are real. there will be value today. we have confidence. iphone direct revenues would reach a real stable and sustainable flaw which we are not there yet. >> when does apple start trading on hopes and expectations for the 5 g iphone next fall

even if this cycle is rough for them, at what point do we start to get either rumors or data or hopes that shift that? >> it's a great question. the one thing i would say near term, it's somewhat positive that the iphone product shipments are pushed out by a couple of weeks. that's almost unique for expectations. it's notable that demand seems to be good enough that shipments are pushed out. in terms of when people get excited about 5 g typically it is sometime in the early part of the year, somewhere between january to march of 2020 is when you would start to see investors start to care what the 5 g cycle would mean for apple. >> how do all the new services whether it's apple tv plus or the card, how do they fit into their bear case here

>> so they fit within the limits of their business model. with the iphone, apple has a very special relationship that is very unique and that doesn't tolerate anyone else. you can't have an iphone in one pocket and an android in the other. what i think it will compete with netflix and amazon prime. we develop players with a very good experience at doing that and making the bet that it will fly over the economics of that industry is a tough bet to make. that's a bet i wouldn't make today. same thing for i cloud and all services for the app store that is being challenged. i would say the ios business is a business in which you don't have competition. the app store business, the apple services business aren't businesses in which there is competition. i suspect the transition is not going to be that good. >> first few weeks of next year,

we'll get some answers. i guess we will get some before that when we see how this quarter turned out. thank you. >> thank you. we're watching the market come well off the lows. session lows down. squawk alley is back in a moment. when did you see the sign?

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welcome back to squawk alley. fortune out with its most powerful women list. marilyn hueson at number one again. tech is well represented throughout the list of 58 women. a few appearing in the top 12. guys, to me one of the most notable things is how many women in aero space and defense actually run publicly traded defense or contract companies. they made the list in addition to hewson ceos of northrop grumman, general defense and boeing's business. one notably absent name if you're looking at a.&d is gwen shatwell. >> amy hood of microsoft in at

16. where is lisa sue. >> she's on this list, too. >> cheryl samburg. >> a lot of tech. >> they make a good list. >> media, too. >> and banking, too. marry ann lake. busy week still ahead. let's get to melissa in the half. welcome to "halftime report." the bulls pushing aside the wave of negative headlines, but should you trust this market >> new trade fears. more signs of slowing growth and concerns about unearning season but stocks holding near record highs. is this the calm before the storm? netflix down seven percent in the past week and losing 25% of its value this quarter. is it safe to buy in this drop this consumer staple stock has been rallying in the past week, now up 20% this year. and it just got a big