information about his political rival. that's going to be the crux of this now, remember the other piece here is this whistleblower complaint that we have not seen publicly and that is still very tightly held according to media reports, the whistleblower complaint is about more than just this one specific call so it could be here that there's additional damaging information out there. but the white house feels good enough about this call to put out the entire set of notes here today and for the president to go out on international television here and say he did nothing wrong, you can see the words for yourself and make up your own mind. they're making this pitch to the american people, guys. >> eamon, the market cares more about a china trade deal than any impeachment inquiry in the meantime and the president mentions a possible china trade deal a few moments ago what do we think the chinese are thinking right now >> reporter: well, that's a fascinating question of course i'm not talking to xi jinping directly so i can't tell you what they're thinking.

but you've got to imagine strategically the fact that there's an impeachment inquiry now open on the president and at least in theory there is some statistical chance that there's a removal of a president, although everyone reviews as extremely unlikely here, if you're the chinese you might think let's wait and see what happens. flip that and look at the incentives facing the president. he's facing a situation where he wants to prove that he is delivering on the economy for the american people. he may now need a deal, need a victory here politically and economically more than he did a week ago, so the pressure on him might be to get a deal even if it's not as good as he might have set out for initially but this president has been very focused on this and said he's only going to take a deal if he feels it's a win for the american people. >> eamon javers outside by the flags doing great work today keeping our viewers attuned to

the news appreciate that. good morning once again, everybody. it is 8:00 a.m. at juul headquarters in san francisco, it is 11:00 a.m. on wall street and "squawk alley" is live ♪ good wednesday morning, welcome to "squawk alley." i'm carl quintanilla along with morgan entrepreneur an and jon fortt. we'll turn to tech stocks to start. rebounding after losing billions of dollars in market cap after

the president's speech when he called out social media companies' immense power they lost $58 billion in value with the nasdaq falling more than a percent it is now the time to buy. joining us jeffries brent phil and brent singerling guys, appreciate the time today. >> good morning. >> brent, did you hear anything new or unique in that u.n. address? brent, can you hear me >> yes, i can hear you fine. yeah, no, i didn't hear anything new. i think we have increased scrutiny and regulation happening across the tech sector the big platforms are not immune we've seen other sectors be scrutinized in the past. you know, it's difficult to predict the outcome. it certainly widens the range of what could happen and i think investors need to take that into account. you need to look at it on a case-by-case basis some companies may prove to be

more regulated than others and some outcomes such as breaking up assets, spinning off assets could be positive for the stocks you've really got to look at it individually >> brad, i mean we could talk about regulation and what that means for the big cap tech names and the faang names specifically, but the one name that isn't necessarily exposed to those potential headwinds is netflix and that's the one that has been falling the most and underperforming the most i realize there's a competition component there as well but are the fears and i guess the sell-off overblown >> yeah, look, there's a wall of worry on netflix but there's an opportunity to look long-term. and the long-term reality is that people are consuming more streaming video. that will go up even higher with 5g the long-term opportunity for streamers is billions of subscribers not hundreds of millions of subscribers. if you don't lose track of that, you can see there's really an opportunity to look past this

wall of worry. in the short term there's more products coming out, more competition. netflix has some things they can do such as the content slate they have coming over the next six to 12 months to offset that. but consumers have budgets to spend on multiple streaming apps i understand that's the reality that we're in. >> i wonder what you think is going on here with some stocks that had been hot, including some recent ipos i mean lyft is off 12% for the week it hadn't been performing that well to begin with roku is off 19% for the week look at shopify, stitch fix, a lot of stocks pretty close to if it were a broader index close to what would be called correction territory. is there revaluing around growth going on and what's the impact then on investing in startups in silicon valley >> i think there's been a lot of money that's been sloshing around silicon valley and

private market valuations for several years now. i think there's a little clash as some of these assets have come public. i think there's a little bit of an underestimating of the rigor and frankly the intelligence of public market investors that's taking place by a private market investors are seeing that clash come together and seeing a resetting of expectations. but i look at it on a case-by-case basis there's a lot of excellent companies that have come public, a lot of excellent companies that are coming public but the scrutiny and rigor and assessments of the valuation of those companies will be what it always has been for public investors and i think that reality has to be faced and is being faced and we're seeing that in some of the recent headlines that we've seen, such as with wework and some of the other valuations that are being adjusted. >> do you think wework is a tipping point in terms of that assessment in the private markets? i just wonder how much is going to change given the fact that we have now a situation where it's lower rates for longer in this ongoing quest for yield? >> yeah, so i don't know that i

would call it a tipping point. i think each example should be looked at independently. there is still -- we are still in this low rate environment there's still a lot of money sloshing around silicon valley in the tech startup space and that probably won't stop i don't see any reason for a run on the bank or a rush to the exits. but the reality is that ultimately as these companies get bigger, they do need access to the public markets and you need to mesh the views of public investors with private investors and recently those have been out of sync. i think there will be a healthy reconciliation of that and we'll get back to seeing a lot of great companies come public, which public market investors are eager and excited about. >> we've talked for so long about companies staying private for longer, elongating the window before they come public now that the market seems to be insisting more on a path to profitability, does that window get even longer than it was? >> i don't know that the market

is insisting more on a path to profitability but i think we've always insisted on the fact that that path exists, and so you do need to have some proven economics. if we can see that path, if enough data is provided by the companies as they come public, if the oversight of the companies and the governance are in good shape, then i think we're willing still to give the same leadway we always have as investors but if the governance is not there, the data is not there, we can't do the analysis, that's going to make it really hard i certainly think there is still room for companies who are not profitable to enter the public markets and eventually make their way to profitability by partnering with public investors and giving the data that people need to make their assessments of the valuations of those businesses. >> each new issue is definitely a test of that thesis. we'll see how it goes from here on out thanks for that. good to see you. >> thank you and a day after the wework

ceo stepped down from that role, another chief executive also resigning, ebay's devon wenig who had been in that job since 2015 deirdre bosa has more from san francisco. >> jon, he is stepping down as president, ceo and member of the board. the company, which is based here in the bay area, announcing his departure this morning and staying the cfo will step in as interim ceo while it conducts a search for a successor ebay noted it is moving forward with the potential sale of stubhub and its classifieds group. activist investors elliott and starboard unveiled ownership stakes in the company. elliott pushed for the sale of those two assets, arguing that they could bring in more than $16 billion. now here's what's interesting, guys wenig agreed on a strategic review and shares have actually climbed nearly 40% this year, far outperforming the broader markets. it's not clear that the market at least initially sees wenig's

departure as a didn't thigood tg shares this morning lower. but, guys, there are still plenty of concerns about ebay's growth prospects here. it has struggled to compete with amazon and its gross merchandise volume is a key metric for this company. that's the total value of goods sold on the site that has been declining. to offset slowing growth, ebay is looking to advertising and payments so who they choose as its next ceo, potentially if they could come from one of those spaces, that could tell us a lot about where the company wants to go next back to you. >> so the change in leadership here at the top, i mean is the read-through that maybe wenig was -- i know there's this strategic portfolio review and the company has been under all of this and activist investor pressure is it that maybe he wasn't moving fast enough >> like i said, the stock is up 40% year to date so the markets think that he is doing a decent job with that strategic review i think the problem is much

broader. this is a company that is seeing sales decline on its website when you have a competitor like amazon just go from strength to strength, growing at a much faster rate. so i think that that is it and perhaps the board felt that he just wasn't the right person to do that huge overhaul that perhaps ebay needs maybe the strategic sales of those assets just aren't enough. >> yeah, and if you look at etsy or shopify's performance the past couple of years, it's harder to make excuses thank you. up next, vox media acquiring "new york" magazine and a bunch of other properties along with that the chairman and ceo jim bankoff will jn oius right here at post 9 after the break. stay with us at fidelity, we believe your money

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some more media consolidation headlines this morning. vox media acquiring new york media. the company behind "new york" magazine and others, it's an all stock transaction. joining us exclusively here at post 9, vox chairman and ceo jim bankoff. jim, good morning. >> good morning. good to be here. >> last time you were here i was asking you if you were making a call on consolidation. i guess you were making a few literal phone calls on consolidation. some people will look at this and say it's a 51-year-old magazine that you're buying, but there's more to it than that how much did the digital properties really make the value here >> a ton and i'm glad you led

with that. a lot of people know new york media for "new york" magazine particularly but if you live in new york and all over the world now it's relevant, is iconic and has a great history. it will continue to have a great future in printi, of course. what you may not know about new york media, its digital business is really its primary source of revenue, its primary source of growth they have done an outstanding job of growing and it's not just by taking the great journalism that's in the pages and putting it onto the internet, it's about creating new properties, new businesses one, fracor example, is called strategist that has a great lead generation business attached with it but it's just entertaining, fun stuff to go through. whether it's that or the cut or vulture or grub street, these are great properties. >> if i'm being cynical looking at this space, i say, look, google and facebook are squeezing the heck out of digital advertising profits. at the same time, you guys and

new york media just unionized. you have to deal with unionized work forces so your costs are going higher what do you have to do to make this work businesswise >> you raise a great point about the nature of advertising, which is scale matters, quality matters, performance matters this merger accelerates all of that for us. vox media alone with our outstanding networks and our ad tech and everything we can bring to bear for clients was already in a really strong position. importantly it's not just scale for scale sake we've seen mergers about that in the digital space. this is about quality, it's about relevance, but also about scale. you get the best of both worlds. we think that's a really appealing value proposition for marketers who are looking to build brand. you know, top of the funnel marketers in particular who wanting awareness, who want to be associated with engaged audiences, who want to capture

that zeitgeist. >> we will be able to operate more efficiently but the big upside and synergy is from the revenue side we have very little overlap in terms of clients and customers so hope to bring more value to them but there are new business lines too. there's the commerce business line, there's dij stal subscriptions, which is a fast-growing area that we can piggyback and renleverage we bring a lot to them we bring a television business, we bring a podcast business, we bring a concert and live events business together we think a lot of revenue opportunity will come from it. >> no one would blame you for going to, say, a less frequent paper copy is that a possibility? you look at what ew has done and how si has changed, the actual physical magazines. >> that's not necessary, in the case of "new york" magazine, they're doing well like all printing publications

over the past decade they have seen a decline but they have stabilized so we don't need to make any changes there. >> a couple of years ago, somebody would have expected for you to do a video deal perhaps, because everybody was rushing after video ad dollars has something changed that you're going really in the other direction? here's very much a property that's strong on the written word but that has pivoted toward subscription and has a print product? >> this is a video opportunity and i'll make the case for it. our company has been really good at video we have the leading youtube channel in news, we have probably 15 million youtube subscribers and tons of views. but even better, we have companies like netflix and hulu and pbs and cnbc working with us to create television products as well new york media is less mature there. they're starting to do that stuff. they have some shows on tv as well we could bring their intellectual property, their

talent into the digital video age. that's how the value is created and where the upside is. >> when you see paying for shows that are 25 years old, is this crazy? >> it's definitely a race. crazy is probably a strong word, but it's great for audiences, it's great for content companies. will it find its level absolutely, like any other industry but i think that's a long time coming the streaming wars are just beginning and the competition is now on netflix clearly had a huge head start. we're partnering with them we have a partnership with hulu. >> that's a big deal. >> that's an opportunity to create a food network within hulu so we're going to work with all these partners they're going to bring something different to the table and consumers will choose. >> how is the ad market?

do you see any weakness either because of uncertainties or just seasonally right now >> right now the ad market is in a good plarce, it's strong. we benefit from having a good value proposition. it's a cyclical business so we'll keep our eyes on that, but we're having a good year. >> i guess on the heels of this deal, how do you think about media and how folks are consuming it in the future whether it's the podcast, whether it's print, whether it's digital, how much can those different types of media be leveraged and cross pollinated and is there a point at which consumers i guess get sort of tired out? because there is so much out there. >> i'm so glad you asked that question i call vox media the leading modern media company the reason i use the word "modern" is because audiences want to consume across all these platforms and they don't want to think that's my magazine thing, that's my tv thing, that's my facebook thing, that's my netflix thing. what we're building are brands

that seamlessly travel across all those things so if you're a consumer, you don't have to have your head spinning, what is this thing, can i trust it, are they providing me quality content, whether i see it on my tv, on my phone or on a newsstand. i know what it stands for, i know it has a voice that i love or that i trust and it means something to me. quality is the signal to the consumer that you can trust and that you can enjoy it. >> is more consolidation coming? >> yes, i think so in our case we're going to look to be a smart acquirer that means that we're not just going to buy things for the sake of buying things but if other quality opportunities come, whether they're capabilities, i think you'll see the trend across the industry you see too many of these things are done for financial engineering and generally those are not sustainable types of opportunities. we believe a company built on quality work, quality finance, quality culture and that's what

we're going to stick to. >> given the success you've had in live journalism, conferences and events, can you extend that in this brand? >> absolutely. they already had a great conference, different from the code conference which we welcome our partners at cnbc every year. their conferences are more consumer based they have a great vulturefest which will happen in november right around the code media conference so we definitely think there's more opportunity for live events. >> jim bankoff, come back when you buy something else come back before you buy something else. >> i'll be here. >> good to have you. still to come, forget breaking up big tech how about a public alternative why our next guest says we need a pbs for social media for erli you we're back after this break.

we've heard the calls to break up big tech ramping up our next guest says there might be a better way, how about creating a public alternative in the style of pbs but for social

media. joining us former tumbler executive. i can't work it out for a couple of big reasons one, security. i mean if everybody were on this public thing, it would be taking incoming hack attempts left and right. you saw how the government did with healthcare.gov. i'm not sure they could handle it the other thing is just keeping up with security, keeping up with just the tech that you need to evolve at the next level and content moderation i mean there's going to be all sorts of beheadings, child pornography that people try to post to this stuff if you're public, how can you afford to moderate that? >> all great questions i think the biggest way i try to solve that question is boy making it very local the idea is basically you are

accountable and part of a local public network, like your library or your school or something like that. remember, facebook started as a very accountable local thing that means you can only be there if you're an actual physical member of that community so that means to me that that helps provide a lot of -- how many people that you see are twitter are not people or twitter, they're somewhere in ukraine or not members of the community. and it would cut down on fake accounts, cut down on the access points to that security is an issue, of course. we know it's an issue for everybody and it's something that, again, you hope to solve at the local level as opposed to making this big massive network that requires a lot of money and effort to maintain >> have you had any kind of conversation about this idea with lawmakers or officials? >> no, no. i mean i'd love to i think that from that point of view, again, it's a public good in the same way that a public library is, a public water

fountain is. so the idea that you make people accountable and you don't want to make it a surveillance thing for people, but lawmakers who make lawful requests should be able to get anything out of there like they do from any other private organization. >> i guess it also raises a question, what should be public and what should be private i mean when we talk about privatizing certain things, it makes me nervous people privatizing militaries or police forces, et cetera then we talk about making certain things public, i get nervous too because of worries about is it going to be run in an efficient way what's the incentive to actually do things right? what are the penalties if security -- >> i think the main principle is this idea that, like, first of all, this is not a call to say we should not have twitter, facebook or anything else. those things exist like cnbc exists in the same media space

pbs does the idea is more that there should be kind of alternatives to that platform alternatives that exist outside the kind of business models of the current platforms because i think that helps both sides. markets are helped when they're given little boosts sometimes. things like opportunity zones help draw investments to a certain place, things like that. so the idea is i see a little bit of a market failure in some of these platforms and the idea is to help guide that in some ways rather than breaking up large companies. >> mark and his thought-provoking piece, to say the least. i guess some people could say, facebook, if you think we're doing such a bad job, let the government try it. thank you. let's get over to contessa brewer for a news update. >> here's what's happening right now. on the sidelines at the u.n. general assembly meeting in new york, president trump lashed out at the democrats for the potential for impeachment. >> there's no pressure whatsoever and if you take a

look at the democrats, they went down to see the president of ukraine and they asked him for all sorts of things. it's the single greatest witch hunt in american history, probably in history, but in american history it's a disgraceful thing the letter was a great letter, meaning the letter revealing the call >> russian president vladimir putin met with venezuelan leader nicolas maduro in moscow amid the ongoing political crisis in the south american nation. russia has been one of venezuela's most steadfast allies. prince harry and wife meghan brought their son, archie, to a meeting with archbishop desmond tutu at the foundation in capetown it's the third day of their african tour tutu is a nobel prize laureate that's our cnbc news update for this hour. i'll send it back to you, morgan. >> contessa, thank you. coming up, the crackdown on vaping continues as the ceo of juul steps down this morning

former health and human services secretary kathleen sebelius weighs in next. dot a u13p 8. n'gonywhere. hmm. exactly. liberty mutual customizes your car insurance, so you only pay for what you need. nice. but, uh... what's up with your... partner? not again. limu that's your reflection. only pay for what you need. ♪ liberty, liberty, liberty, liberty ♪

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getting a market flash today on match group julia boorstin has that back at hq. >> match shares tumbling on news that the ftc is suing match group, that's the owner of a number of online dating services including match, tinder, ok

cupid and others alleging they used fake love interest ads to trick hundreds of thousands of consumers into purchasing paid subscriptions to match.com they also say match has unfairly exposed consumers to the risk of fraud and engaged in other allegedly deceptive and unfair practices. you see match shares are now down nearly 6% we have reached out to match group for comment and have not heard back from them just yet. back over to you, carl. >> julia, we'll watch that, thank you. a lot of vaping news to get to as merger talks between philip morris and altria break down you have the ceo of juul stepping down. all of this comes a day after massachusetts bans sales of all vaping products for four months in the toughest crackdown we have seen from a single state so far. joining us this morning in a cnbc exclusive is the former health and human services secretary under obama, kathleen sebelius, previously served as governor of kansas from '03 to '09. welcome back, good to see you.

>> thanks. nice to be with you. >> i wonder if you think we've seen a breakdown in public health regulation when it came to vaping in this country? >> well, i think what you have right now, carl, are two things kind of colliding. the perfect storm, if you will we have this very mysterious illness that is killing people and two of them -- two of the deaths are here in kansas, about 530 people have gotten very ill. the cdc doesn't still know exactly what's causing it, but they know it's very serious and they have about 100 people on the investigation, according to dr. ann shugat, their deputy director so that's very alarming. to me it's like a food outbreak where a voluntary recall would be a really smart thing to do until we figure out if it's the devices or what exactly the ingredients are. but there's that illness at the same time there's a real focus on juul as the leading

company in this marketplace who have, i would say, focused a lot of their marketing on kids, on flavors appealing to kids, on cool devices appealing to kids what you have is in 2000, about 28% of high schoolers smoked and tried their first cigarettes that has gone down to 6% in 2019 but unfortunately we have 25% of high schoolers who now are vaping addicting kids to nicotine is never a good idea. and i think that piece of it has to move much more quickly from the fda. and i have some thoughts about where they could go, but i think these two issues are now coming together so governor baker has said no more vaping products at all in massachusetts. i know governor kelly, our new governor, is looking with her health and human services secretary at what can be done as

just a public safety outbreak here in kansas and i think that governors will follow suit very quickly >> you point to juul's marketing practices and that's a fair point. but don't people have the right to ask what were these products doing on the shelves without any research why are there still no restrictions on flavors or distribution or advertising when it comes to these products >> well, that's a great question and i think it has been a breakdown. when they first came on the market what juul said to the fda was we are just like any other tobacco product. and since you now have regulatory authority over the tobacco products, gather some information on us. we say we are safer and better and a good gateway for smokers out of smoking and into a less harmful product. but they put their advertising as if they are really a smoking

cessation product. at that point the fda should have said very clearly come in, prove you're safe, prove this works as smoking cessation and we will then regulate you as a drug other smoking cessation products are regulated as a drug. there's absolutely no reason that juul, if that's their point of being on the market, if they are better and safer and actually a good smoking cessation tool, they should be a prescription medication. they should prove their efficacy so you can't have it both ways and i think the fda has to move much more quickly. >> secretary sebelius, i wonder if there are unintended consequences and what i mean by that is when you see a state like massachusetts come out and do a full-fledged four-month ban on the sale of e-cigarettes and marijuana vaping products across the board, there are folks that are using those products, addicted to those products that are probably going to still find ways to get those products

i wondering if it pushes them further into the black market which we know according to reports has been linked to some of those illnesses i wonder if there is a risk of cracking down too hard given addiction and behaviors around addiction? >> i think that there is always that risk. the problem is until the cdc really identifies what is the ingredient, the product, the reason that these very serious illnesses and deaths are occurring, i think we need some sort of ban to warn people that these are very dangerous, that you could die. and i am sympathetic to addiction, but there are other nicotine products that people can get, which have proved safe and efficacious and those are on the market we know that serious addicts could get those products right

away what we don't know is why people are dying and getting very ill from vaping, so that's got to be determined i think governor baker has taken a wise step to just say until we know something more about this, we need to urge people just not to use these products at all we don't want to see more illness and death. at the same time, we have the longer term regulatory issue where juul is marketing itself as smoking cessation but has never gone through the reggigord the testing at the fda that would allow them to approve smoking cessation efficacy and approve safety we know that kids are getting addicted to tobacco, i mean to nicotine at very high rates. so the products are really not great. they may be a step more safe than cigarettes, but that hasn't been proven yet. and in the meantime they are being marketed like crazy with bubble gum flavor and very cool devices to lots of adolescents

who were not going to start their first cigarette and now have moved to a different nicotine product. >> secretary, are there read-throughs here, lessons for the cannabis industry? lots of investment going into that right now and still lots of questions about what the impact of some of these cannabis-related products might be on public health. >> well, i think, again, we still arguably don't know enough about cannabis, and particularly what it does to adolescent brains and teenage brains. i'm hoping that that research picks up steam there was a reluctance, frankly, during the obama administration to do a lot of research in that area i think states now have widely approved the use and certainly medical use of marijuana, whatever that means. but there hasn't been the kind of efficacy and safety tests across the board so we've got issues of cannabis, but the vaping issue i think is,

again, taken off like nobody's business and i think tobacco companies, frankly, saw their market share dropping dramatically in the united states this market share increasing rapidly. teen use is now, as i say, 25% of high schoolers, doubled over the last two years they saw a good way kind of into the market so using exactly the same techniques that tobacco companies used in the early days to market to kids, to be cool to kids, to have products that really appealed to kids. that's a very dangerous public health path for us to go down again and certainly we should learn lessons and move much more quickly. >> that's why a lot of people are suspicious of altria having a stake in juul. >> you bet. >> should that be a source of concern? >> well, i think it is a source of concern because altria made

their money and staked their company on selling legal products but products that we knew if you used them exactly as directed, they would kill you. and i think the united states has had a pretty effective public health campaign, and again doubled down in the obama administration to particularly convince young people not to use tobacco. gave very clear warnings and drove down that first time teen use of tobacco by the use of taxes, by the use of public health warnings, all kinds of prohibiting advertising that was cool to kids so that's been very effective. but suddenly we have a new product in the market which is addictive. we don't really know how much harm it's going to do. we don't really know what it's going to do to kids. as i say, if it's an effective smoking cessation market, then prescribe it through a doctor. >> secretary, thanks for shining

some light on it just so much to get to on it today. >> you bet. >> the story is moving very quickly. thank you again. >> sure. good to talk to you. >> it really is. meantime, what to expect from amazon's product event this afternoon. that's after the break stay with us

david, the earnings bulls are back we had a fed rate cut, we have encouraging economic news. are you on board >> i think i'm on board with respect to the third quarter but the fourth quarter of this year in calendar year 2020 we're a little more pessimistic. you have consensus looking for 10% earnings growth. we're looking at 3% to 5% earnings growth next year. >> that is a big difference. what do you see differently? >> the two big driversof that difference are difference in our view on revenue growth so analysts are looking for a bit more robust revenue growth and the second is margins. a lot of looking for profit margins to expand and we think they'll remain more flattish in 2020. >> you've got some assumptions there. what could go wrong?

>> the big risk is that we see a deal on trade. there's a tight relationship between earnings and manufacturing activity if we were to see forward progress, if we were to see manufacturing activity reaccelerate, that would leave us on the low ending of where earnings shake out next year is this the year amazon breaks free of the home and goes mobile that's the big question heading into amazon's product event this afternoon.

deirdre bosa is watching that as well from san francisco. >> carl, that is certainly the key question are we going to see that in the form of wireless amazon earbuds. the company we'll show you right now is setting up for its third annual device event. it's taking place at the iconic spheres in seattle about an hour from now guys, for months reports have swirled that amazon was developing its own earbuds to bring alexa beyond the home. they have the echo auto that goes in cars but earbuds that you can bring with you everywhere would be a major step in its smart assistant evolution. here's the field amazon would be entering it is a very crowded one on the high end you've got bang and olufsen, sennheiser. amazon's are expected to be priced below $100. that would undercut all of the

competitors here they could double as a fitness tracking device. it would be amazon's first foray into the health monitoring space. we are likely to see upgrades to the existing lineup of devices and perhaps some new alexa-enabled products the buzz about one last year was an alexa-powered microwave earbuds, though, guys, would be an entirely new product category keep in mind if we do see them today, though, there is no guarantee they will be a hit amazon has a mixed track record with hardware. if you remember that failed fire phone. finally, if we do not see earbuds or a mobile alexa device, that could raise some questions about amazon's devic and alexa momentum in this increasingly competitive space back to you. >> yeah, as far as i know amazon has never reported exactly how many of any piece of hardware they sell or how much money they make at it so we'll be watching that. >> we don't even know if it's profitable, but i would guess not. >> right, exactly. coming up, the co-founder

and ceo of allbirds will give his take on amazon's latest shoes and what the company is doing to prevent other, let's say similar-looking shoes. we are bk tea icbrk.acafr quk ea ♪♪ ♪♪ ♪♪

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amazon under fire. the tech giant's new sneaker bearing a similar design to

auburn's flag ship product, the wool runner. we tested out both here onset yesterday but joining us now is the cofounder and ceo. joey, thanks for being here today. certainly quite a number of wool sneakers on the market but in terrors of this new one from amazon, how would you categorize the similarities >>. >> yethanks for having me on. at a minimum, it's at least inspired, but there are some striking resemblances that we've seen >> would you say this could fall under copy wright enfringement >> you know, that's a, it's part of the business in fashion as i've come to learn ch we have probably a couple dozen copy cats out u there and the speed at which these guys come at us b has been startling. so you know, getting into the legal conflict is always a murk

territory. we're a company of about 500 people total i would suspect amazon has more than doubled that in just lawyers. but it's probably a risky territory to wade into but you know, we're also looking. we look carefully every time this happens >> joey, i'm looking on well, amazon searching for wool sneakers. and i see red trade. i see urban fox. there's a lot of folks trying to look like you. does it matter if it's amazon as big as they are, as powerful as they are >> you know, it does matter. you know i think, i think what the issue that we've had with some of these copy cats is co copying the look and feel of the product we've done is one thing and i wish people didn't do it we put a lot of work and craftsmanship and a lot of r and d that goes into making sheez shoes, but it's different when they don't follow the same

practices. we source the most humanely sourced wool from the most humanely treated sheep we're 100% carbon neutral as a company and these knock offs are trying to siphon off demand we've created for category of product. they're not taking the same care on the environment not just dispoint, but when ewe look at what consumers care about these days, they expect companies to do more than just try to make money for their shareholders they expect powerful companies to use that. to take responsible action on things like the environment and we're serply doing our small part we're a small company. we're trying to lead the way and do the right thing and i would expect someone as powerful as amazon and probably one of the most powerful retailers in the world if not the most powerful, they could take that responsibility to heart. sfl a small but growing company and certainly growing brand

awareness. have you been approached by other companies looking to potentially take allbirds over >> i mean nothing to the degree that we've really considered seriously. we see like a pretty big opportunity. we're about making amazing no compromise products and doing it with a light impact on the environment. we think we're making an impact in terms of the statements we're making one of the points about some of these copy cats, we have developed carbon negative, meaning it's better for the environment that we make some of the components like the foam on the bottom of our shoe than if we hadn't of made that shoe at all. we've open sourced this technology to the entire footwear industry. we think we're on to something kind of special. we are happy to share a lot of what we do particularly that foundational rnd when it's good for the environment. we'd love for these copy cats to

take all that good stuff and preferably not steal the design, but for those reason, we're not really a company that's for sale we're having a fun time doing it >> how quickly is allbirds growing? >> it's been a good start. you know we only, we began selling to consumers back in march 1st of 2016. and we sold over a million pairs of shoes in that first two years. we're now an 18 countries i'm in berlin today because we're opening up a store and we have a small team here we sell to about 1.75 billion people can access us with free shipping and return in 18 countries around the world we have basically given consumers this incredible value because we've gone and served directly to the consumer instead of the wholesale model and that allows us to put the extra value that's reserved for the retailer, we pack it into these

amazing materials and it makes a great, comfortable product >> thanks for joining us today appreciate it. >> going to do it for us here n "squawk alley" as we continue to see stocks do well let's get to sully and the half. >> thank you very much and welcome to the halftime report scott is out i am in. and d.c. adding a new layer of uncertainty on wall street but it seems like this teflon r market is going to pull a swifty shake it off, at least for now >> d.c. taking its first major step to impeach the president. what it means for this bull run and how to play this market from here faang out of favor another negative call on netflix. the stock down double digits in the past week. facebook, amazon, alphabet and apple down, too. should you buy on this drop? and a bullish new call on the home builders. why it