good morning it's 11:00 a.m. at casper headquarters in new york city, also 11:00 a.m. on wall street, and "squawk alley" is live ♪ casper, the friendly ghost, the feriendliest ghost you'll know ♪ ♪ he always says hello and is really glad to meet ya wherever you may go ♪ ♪ he's kind to every little creature ♪ apologies for that song. good thursday morning. welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt at post 9

of the new york stock exchange casper's ipo is pending. we're awatting the first trade at the nyse. bob pisani is on the floor what's going on, bob >> casper is opening at $14.50 remember, priced last night at $12 after earlier indications earlier in the week $17 to $19, a haircut at $12, opening at $14.50 terrific timing there, carl. this has been a long route for casper, been private about five years. investors have been pushing back against these money-losing companies that have been out there recently the days of growth at any cost seem to be over. investors want profitability or a haircut and they got the haircut here, opening to the upside, in the direct to consumer space that's been challenging. you see what peloton has been going through. smile direct as well a lot of competition out there old-school people that are publicly traded like temper saly

out there, tpx the symbol. they're profitable for many years. purple innovations, they or profitable but barely. ipos on fire this year new high for that basket of ipos that are out there, that symbol is ipo a nice lift in liflt, t, and zo. pinterest doing well in 2020 maybe the fourth ipo in the last few days all doing well, one medical by a pharmaceutical, and reynolds consumer, all in different spaces, all up nicely. they went public last thursday $14.37 for casper. >> mike santoli at the desk. we'll talk about what this means for the ipo market and also the model. >> yes >> a decade ago if you said i

could buy a mattress online, i would have laughed at that >> identifying a big market that people hate the experience, that's all great but i think it tells you about the dynamics you kind of typically try to price these things in traditional wall street terms for something like a 20% upside relatively short so it seems like they maybe in the short term got the right price. i find it fascinating that these e-commerce disrupters, without a really clear path to actually being sustainably profitable, face a very high burden of proof. that's different used to being big brand name and a fast growing area where you could buy first and figure it out later, that's not the case anymore. peloton, it's basically around its ipo price right now. it's had swings around that, but it's a similar story where, look, we just need to prove that we can outgrow our marketing expense. that's kind of the whole game. >> yeah. that's the key of course talking about a company that started direct to consumer, started with the e-commerce model, but is continuing to expand in

brick-and-mortar right now as well a lot of focus on the supply chain, where and how those mattresses are getting made, what that could look like moving forward. the key is what the path to profitability is, which is something as you mentioned we're foxed on wi efocused on with ale companies. uber reporting after the bell too. >> absolutely same story with peloton in terms of what's so special about a casper mattress, about this particular bicycle? and i think the idea that there's competition -- >> competition is the key word >> nothing necessarily proprietary. that will have to be proven. market-wide, the reason that the nasdaq 100 giants, the trillion-dollar giants, they're consuming all the oxygen the idea is they have these impenetrable platforms if you're an upstart, is there room to become a big cap >> looking at the casper as -- my question isn't about marketing expense.

general and administrative it's 30% of revenue. under 10% with temper sealy. why? i'm going to ask the ceo, but when you're talking about cost, yeah, marketing, i get it. you don't have storage, you need to get the name out there, but you have to come in efficient if you're expanding into brick-and-mortar >> see if that ends up being flipped over as the opportunity case as opposed to the risk. keep that under a lid and try to grow past it or shrink it down as a proportion of sales who knows? at this point, i think nobody wants a consumer small cap this is a consumer a small cap we'll see if it can fare in this tough market >> in terms of product categories, the mattress industry famously closed, right, big players who have been troubled over time, e.

>> many in bankruptcy. >> household creation. was this an easy shot in a sense? >> in terms of going at that market >> yeah. >> i think so because the experience is pretty terrible. one interesting thing, though, why do the traditional mattress companies constantly advertise it's a product category you don't find that often, but when you need it, you need it now and you better have that brand at the top of your mind i don't think it will sfwget toe point of consuming the market, but this amount of growth they've had probably wasn't that tough just because nobody kind of likes the incumbents. >> interesting because it's not -- casper isn't the only company going public today ppd at the nasdaq poised to start trading, the high end of the range, $27, raising more than $1.6 billion. i think it's the biggest raise so far for 2020.

it's health care-related name. reynolds consumer last week. how does it speak to the fact we're seeing more companies go public that aren't necessarily tech or unicorn related? >> it's sort of standard operating procedure for a bull market you better have a variety out there. it's also where you are in the cycle. reynolds is coming out of kind of private ownership far while used to be public way back when and is returning to the public market i think it's relatively healthy, but you wouldn't expect otherwise with markets at an all-time high. at least some opening in the window >> speaking of which, bob pisani, not the only ipo we'll be watching in the coming hours and days >> ppd will be over on the nasdaq this morning. essentially biotech companies, very interesting, very sci-fi, essentially a software firm that helps develop novel drug

molecules and novel drug innovations. very interesting organization. ppd is a biotech research firm if you're biotech company that's small and you can't afford large amounts of money to have a lab, they have the labs you can essentially utilize. that's in demand that should be opening any moment on the nasdaq this is a very good start to the year, one of the best we've seen in a long time, largely, carl, because lagging ipos at the end of last year, your liflts and ubers, some of the other ones like that, have all done well in 2020 despite what happened in the last week over in china. so this bodes very, very well. this is a decent sign out there to other big names, not just the airbnbs that are sitting out there but you want to look at the middle-sized firms seeking to raise $100 million, $200 million, $300, $400 million.

it's a good sign for those companies the run so far has been really good particularly companies like one medical and reynolds consumer that are out there. very diversified companies as you heard mentioned earlier. >> nice to have you back on the post sara eisen has a first on cnbc interview with philip krim >> how do you feel >> i'm pumped. awesome day for casper >> the lead-up was bit dramatic. went on the road show with a conservative valuation, lowered the range, priced at the bottom of the raknge. what was happening behind the scenes what was the problem >> i've always been focused on the company we're working with with casper, one of the founders, so excited about

building the world's first sleep brand. these are milestones, moments in time, but it hasn't changed us being long-term focused and building the brand and business. >> was it a top pitch to investors? you were valued in the private markets above a billion dollars. priced yesterday less than $500 million. you're up to $600 million in today's valuation, but what was the concern? >> i loved getting out and meeting investors and telling them what we're hoping to build. the fact there's never been a sleep brand before is an awesome opportunity. people are investing in their sleep because they know it's key to their wellness. we have pillows, our glow light, and as we told the story about what we're building and how we're thinking long term and going after large markets that haven't seen innovation in a long time, people got excited. >> can you do it profitably? >> we're focused on the long term so we're investing in the business, continuing to launch great products we built a great team that's

executing well we're going after big markets and will continue to be focused on building the business for long term. >> philip, why are your general and administrative costs so high to my eye, they're more than 30% of revenue at your x-- of revenue. at others, it's lower. >> the reason why our glow light won "time'"''s" invention of the year, we invest in great products we build truly innovative products that helps elevate people's sleep quality that innovation doesn't come without a team that's focused on this these are folks learning how to help people sleep better, better ergonomic support and thermal support. >> so they'll stay that high >> we're continuing to drive growth in the business going after big market, the growth has been rapid, so we have a long way to continue to grow, and we're going to continue to have that investment

in casper labs going forward the team is locked and loaded and focused on continuing to launch products as we go >> continuing to spend on brick-and-mortar as well, expanding your store fronts. what's the magic number and why is that so important to growth moving forward >> today we have 60 stores and it's been awesome interacting with consumers we're always putting the customer first stores have been a great unlock for that we'll continue to bring those to market it's been great to see that really helping how people shops for nies products. >> how is it enhancing >> it's a great experience if you haven't been to one of our stores, go over the weekend. people spend over 20 minutes in our stores on average. >> is it driving more sales, though >> it's been great for sales people love to lay on the product, touch and feel. our store associates are sleep experted casper is becoming that. >> product sourcing, where does

it happen? how much liability is there on things like tariff fgs it's international? >> we have a global source bug the mattresses are made domestically, so very little exposure to china. >> philip, what's your competitive advantage against competitors like a purple and other players coming in and doing mat res tresses in box >> three things. we have a brand that's connected with people. less than six years in business, we have 31% awareness against our brand, benchmarked against any other brand remarkably fast. brand matters. two is that product innovation i mentioned. the reason our products are rated so highly, why customers tell us day in, day out, about how awesome the products are, because they're innovative and optimize around temperature, humidity control, ergonomics three is that onlymy channel strategy that's what customers are asking us for they want to have a place to try the mattresses

you're spending a third of your life with our products that multiple touch point approach has been great. >> how often does the average american buy a mattress? >> the average american buys a mattress every couple years. >> every couple years? >> because they have multiple bedrooms in their homes. 20 million mattresses are bought in the u.s. every year it's a much bigger market than people think.zors and eyeglasses because you need to update in your home. they're turning to casper. >> you can compress that psych snl. >> repeat revenue is already double digit 20% of our revenue comes from previous customers and it's growing fast because they trust the brand, they know the product is great, and we make the experience as delightful as possible >> what is your core strategic asset? is it information about the customer is it -- i mean, what makes you going forward maybe from a technology perspective better? what makes you more efficient? >> a great question.

my view is you have to do multiple things right to be a successful consumer brand in business we leverage data to help improve our products, to understand where we should open up store, how we spend money in acquiring customers. data is part of everything we do, but it's driven to make the customer experience better kwhn they interact with our products. data is foundational to everything we do, but it only matters if it benefits the consumer casper is getting better and better about knowing who our customers are. >> back to valuation $1.1 billion valuation, priced for the ipo last night, just under $500 million who got the numbers wrong? how could there be such a big discrepancy? >> valuations are just moments in time. this is obviously a huge milestone for us, but it doesn't distract us from building the business we want to build, which is going to take a long time to build the generational brand that stands for a better night

of sleep we're excited to get back to that, continue to launch great products and help the world sleep better >> total addressable market, $432 billion where does that number come from how likely are people to get a better night's sleep >> part of our thesis is that sleep is becoming a part of the wellness equation. people know they need to exercise, eat well, more and more people are realizing they should invest in sleep to feel their best selves. that's where casper comes in the sleep economy has been very disorganized before with brands not thinking holistically. we think holistically and approach sleep from an end to end solution for consumers >> you started this brand in 2014 with a few friends. how did you come up with an idea that mat regtresses needed to be disruptive >> we launched april 22nd, 2014. we met in 2013 and we were tracking our sleep for the first

time the question we came back to was what do i do about that, how do i sleep better we said buying a mattress is a terrible experience. there's got to be a better way we said we could build a better mattress that's universally comfortable, helps people sleep better the s-brands didn't mean anything to us as consumers. the lack of innovation and focus on consumers allowed casper to come in and grow incredibly fast >> sleep is in the name of the company, but do you see yourself expanding to furniture outside the bedroom? >> we're very focused on sleep >> that's not in the cards >> sleep focus we defined our vision. we're very mission driven. we want to help people realize the potential of sleep so we think holistically about that. >> talk about marketing efficiency we've had katrina lake from stitch fix on several times. they went through a period where some digital channelings they started out with proved to be perhaps less effective than they thought. they did some tv

they went back into digital. as areas like podcast advertising are maturing and getting more crowded, what are you having to do love to get as efficient as possible in that message? >> my background actually, my whole career has been in online marketing and e-commerce i knew you needed to have a diversified approach to how you build your brand and acquire customers. that's why we've always been early adopters of going into things like podcast or subway advertising in new york city google, facebook you can't be reliant on any one channel. our diversified approach to having a portfolio of channels we can go and build our products and brand awareness and acquire customers has worked out really well we had a very predictable model in place on how we acquire those customers and we'll be very data driven and how we think about it across the channels. >> i'm curious about the shipping and logistics piece of this i bought a house, they showed up in the box, i pulled them out, bam, they're set up and done

we've seen dimensional weight pricing implemented, all of the shipping companies raise rates on an annual basis and begin to find ways to basically extract more capacity as they move packages around. what does that mean for casper >> it's an interesting logistics market right now with amazon kind of p shishifting share aro. it's an area of focus for us because logistics are an important part in a lot of markets. in new york city, you could order a mattress and we could have it to you later today we've been working on that, so no matter when you want the product -- and a great thing about storage. you can walk out with a product, and a lot of people do >> what percentage of customers buy a mattress having not laid down on it first >> you'd be surprised. we offer a 100-night trial >> not like the runway i wouldn't want to send a mattress back. >> you don't have to worry about

it we'll handle it. we'll pick it up, no issue that was part of what we started with casper. laying on a mattress in a mattress store is not indicative you should sleep on it so we came up with the 100-night trial, and that's become the industry standard. we're putting the customer first. >> finally, what are you going to do with the proceeds from the ipo? >> yeah. we're excited to have this milestone and to add some cash to the balance sheet we'll continue to execute on taking the best products to market under a brand that stands for the best night of sleep possible >> popping up almost 30% congratulations. >> thank you very much >> casper's number eight on the 2019 cnbc disruptor 50 cnbc accepting nominations for the 2020 list. full detailsand a link are at cnbc.com/disruptores getting a market flash on

boeing phil lebeau has that in chicago. >> the stock initially moved higher on comments from the head of the faa, steve dixon, who is over in london talking with reporters. as he's talking with them, he makes a couple statements that are getting attention. first of all, he said that it appears that boeing's software audit on the 737 max is completed or close to completion that may have been taken by some reporters as everything's good to go on the max the software audit is only one piece of this. he also said that certification flight is possible sometime in the next few weeks didn't give a definitive time, but that is another reason why the stock moved higher now you see it pulling back a bit because there is another software issue that boeing is working with on the 737 max. it has to do with a light in the cockpit that came on for the stabilizer during a recent flight test. boeing believes this is a software issue that can be resovrled. think of it as a check engine

light coming on within the cockpit. it's not considered to be a major issue, but this goes to the heart of the problems with the max, which is flushing out any potential bugs that are in there. overall, the stock is moving higher on relatively positive comments from steve dixon, the head of the faa, indicating we could see a certification flight in the next few weeks. back to you. >> it would be a huge relief for the economy at large, phil thank you. let's get over to the nasdaq where another ipo is in place. bob pisani >> we're at the nyse, but ppd, a lot of ipos. it's back, folks the ipo market is back it opened at $31 the price talk $24 to $27. this is a big biotech research service, so if you're a biotech firm and you need a big lab, they've got the labs to do that. this is obviously a hot space in demand here and you can see by the initial opening very nice

early play here. also waiting on the nasdaq, schroderinger backed by melissa and bill gates we're waiting for that to open 11.9 million shares and $17 above the range. casper right here, $14.50. citadel securities handling that trading at $15.43. priced at $12 so that's moving above. we've had a very successful start to the year not just laggards from last year doing well like lyft and ububer, but last week one medical did well, and we've been talking about reynolds consumer, eve an consumer name trading nicely here up about 15% year to date

pushback if the valuations are too high investors not afraid to p ask for haircuts and they got it with casper. >> another big mover this morning is sonos big beat, strong holiday sales in the last quarter, sending shares near -- in the territory of its record highs. sonos above 16 bucks a share hasn't been there since 2018 join us now the ceo of sonos, patrick spence, exclusively on those results here at post 9 good to have you >> good to be back >> you've had quite a few weeks i must say >> yes >> between the holiday season, some product concerns, legacy product from consumers, lawsuit versus some very big competitors. first of all, let's talk about the financial results. what worked in the holiday quarter between new products,

promotion, and how's that going to affect the first half of this year >> the fiscal year is off to a great start on the back of some great products we had new products we brought out ahead of the first quarter, so products like move, the 1sl they did really well another important factor is our collaboration with ikea. we take in really what makes sonos special, that system, that software, and worked with ikea to bring that experience into other products at lower price points and reach more and more homes. that was an important part of it we got bet we ater with promotis well people had been concerned about how much promotion are you doing as a premium brand, but what they were seeing is we got a lot more effective at how we do our advertising. you see that in our sales and marketing numbers. >> you guys are a premium brand. your whole argument is this is what we do we're not trying to sell you advertising. when you came out with this news that legacy products, at least

the way a lot of people read it at the time, lexi products were going to get bricked and in fact they were going to brick some of your newer stuff if they were on the same net work, i thought they're dead they're dead dying. going down you changed your messaging on this but tell me about the process within the company that got you to that first message and what got you to the new message >> we ms.ed edmessed up on the messaging. our intent was never to deliver the message that people had interpreted about bricking the units. our intent was the products we launched between 10 and 15 years ago could no longer handle the new features coming in may we wanted to get ahead and say those older products won't support the new things you saw the passion from our customers. if you want to test a brand passion, look at my inbox in terms of emails. we quickly had to make sure we made a message clear and help bring people along

it's an important lesson for us to remember how important it is to explain these things clearly and get out there. we built for product longevity in the beginning we're building products that last 10, 15 more years so that's something we pride ourselves on and we'll continue to set the bar in the industry there. it also shows you we have work to do in terms of how we make these things last longer >> let's talk about the suit against google, speaker technology mixed responses to this from the wall street community, from analysts why is it woert the rrth the rio this given there will be cost associated with this, it will take some time, and it could potentially fracture any relationship you have in place with google? >> we look at sum total where we are. this is important to balance we're strong financially we're innovating and executing very well. we're partnering and continue to partner with google, other players in the category, but i'm also not going to sit back and let people take what we invented

and just copy it that's why we've invested in patents. that's why we in the past have sued and successfully beat de m denim, because they copied what we did others copy our technology i'm not going to sit idly by there's real value there that's not the way it should work we did the work, put our blood, sweat and tears. i owe it to everybody at sonos to stand up for our innovation and protect what we invented >> do you feel like google, with all the antitrust skrutdny on it right now, has gotten too big? >> you know, i think the reason i went and testified at the antitrust subcommittee is to really shine a light on some of the things that are happening. we know that new business starts in the united states are at a 30-year low. there's half the number of public companies as 20 years ago. as we think about those things and think about competition and innovation, i'm concerned about what we're seeing now. i've been in this industry for 20 years i lived through the microsoft,

intel dominance. i've never seen this number of companies using that dominance to go into other categories to, you know, kind of hold up their dominance in monopoly in another category that's a real concern. now, you know, i don't know the solutions necessarily, but i want to shine a light, and i think we're strong enough and have a duty to shine a light on these issues because innovation and competition are at stake >> you think justice and ftc are responsive to that >> right now it certainly appears. all we can do is tell our story. we've been telling our story and showing the world there are people that are doing this efficient infringement, playing the long game and saying we can squeeze out the smaller companies over time. we'll see in time. it's for them to decide. i don't control that. >> we always have a side discussion with you on supply chains it was about tariff s for a while, now coronavirus >> our primary concern was the health and spaafety of our peop.

we believe there will be minimal impact, but so much uncertainty around it, we're all kwawatchini closely. we talked about malaysia we've diversified our supply chain into malaysia which helps to some degree dweechb we've done a good job with that in the quarter >> apple had a big quarter for iphones and wearables, air pods, watches. nobody's talking about the home pod. why not? >> another important point is when i look at what happened in the market in the holiday period, we took share. we took share despite there being companies that are putting products out there for other reasons and predatory pricing, doing some of these things we're in excellent position, and i believe, you know, with some of the other products we have, wefsh able to gain share from other players. >> all right patrick spence, ceo of sonos big day for the stock, up more than 13% thanks for being here. >> thank you

>> dow is up almost l 100. two-thirds of that is boeing sue herera has a news update >> hello, everybody. here's what's happening at this hour in washington, president trump appearing at the national prayer breakfast. he attacked the impeachment process and took veiled shots at his opponents. >> as everybody knows, my family, our great country, and your president have been put through a terrible ordeal by some very dishonest and corrupt people they have done everything possible to destroy us >> turkish officials continuing their investigation into the reason why a plane skilded off the runway while landing in istanbul and breaking into three pieces three people were killed and nearly 180 injured the plane was landing in bad weather after a flight from western turkey and the moment a tower block of ice broke off from a glacier

in antarctica was captured on camera a last week the huge slab toppled from the william glacier and rolled into the water. the collapse lasted for several minutes and stretched half a mile across the glacier. you're up to date. that's the news update this hour guys, back to you. morgan >> i just think it's cool they were able to capture dthat in antarctic indian a >> apparently a research ship that got it. really cool. >> more news from phil lebeau in chicago. phil >> take a look at shares of american the airline is announcing that it is going to be extending the cancellation of flights between l.a. and hong kong they have two daily flights, one from l.a., one from fort worth the l.a. to hong kong is canceled through march 27th in terms of slow demand for people wanting to go over there hong kong is a big point of

connectivity for american partners in southeast asia and then when you take a look at the dallas-ft. worth to hong kong route, that will resume on february 21st. at this point, they see enough demand for hong kong from dallas to begin on february 21st, but hong kong from l.a., they will continue to cancel those flights right now through march 27th back to you. >> phil lebeau, thank you. coming up, the wild ride for tesla continues. where the stock goes from here with an early investor ♪ ♪ ♪ ♪ ♪

high protein low sugar tastes great! high protein low sugar so good! high protein low sugar mmmm, birthday cake! and try pure protein delicious protein shakes

beyond the routine checkups. beyond the not-so-routine cases. comcast business is helping doctors provide care in whole new ways. all working with a new generation of technologies powered by our gig-speed network. because beyond technology... there is human ingenuity. every day, comcast business is helping businesses go beyond the expected. to do the extraordinary. take your business beyond.

tesla shares back up almost 7 6% the former ceo of cycle. >> good morning, everyone. thanks for having me on your show >> do i have this right? you got in in '08 in what was a series e i guess at the time, and then got out in '13? >> i did yep. i should have held on, but here we are >> so what do you tell someone who's owned it more recently, maybe has held, maybe has bought and liked it, bought and maybe this week bought and regretted it what should the state of mind of a tesla holder be right now?

>> well, first let me start off by saying i have huge respect for elon musk and the company that he's built, so much so that i was an early purchaser of the model x. my name's on the waiting list for the new cyber truck and the roadster, which i think are two of the most exciting car launches in history, probably. and with that said, i believe as you know that the stock is overvalued the fundamentals don't support this north of $700 share value so i believe there's a lot of hype probably coming from retail investors perhaps inexperienced retail investors caught up in a hype cycle i don't know if you know this, but i checked it myself. there were rumor if you type into the google search engine should i -- >> not rumors. we showed it on our screen >> there you go. i did the same thing and that was surprising so that tells you a lot right there. the fundamentals don't support this price barclays has a price guidance of around $300 a share. morgan stanley estimates that

the operating margin for tesla is going to be over the next decade in line with dangler and bmw at 8.3%, so i don't see why the price -- the market cap of the company should be double what those two are >> so you think that price makes more sense at least from the fundamental basis, a number like $300 million there's been so many different ways and so many different debates about how this company should be valued, whether it's an auto manufacturer, a tech company. >> well, here's the thing. let's just talk about performance. last year their low estimates for deliveries was 420,000 car deliveries they delivered 367,000 cars. i personally believe tesla will continue to rise over time and may even reach this market cap one day. but i think today there's no

justification for that -- for this price on the stock, and i think it's -- you know, i think as you know and historically usually these hype psychcycles u with a poor and for everybody who gets caught up in it >> ibrahim, was your thinking similar when you sold in 2013? >> you know, i'm just a conservative investor in the sense that i had realized enough of a ginn that i thought, you know what, i don't want to be greedy, this is enough of a profit margin, i was happy i did really well on the stock and i didn't see it reaching $700 that's for sure. you know, that was surprising. >> one of the talking points has been that tesla, essentially the only way to play from a large cap standpoint, the only way to pure play esg and the notion of climate change given what you've invested in over the years, i wonder whether you think that's true, if they have a monopoly or whether that's not the case.

>> it's heartening customers want to jump on the transition from a high carbon to low carbon economy. that is a transition that will happen and there will be a lot of wealth created in that transition i've been investing in renewable energy and all of this domain of clean technologies because i know that the way we're headed, everything that underpins modern civilization has to get upgraded from the polluting technology that we're currently living under to the new clean world that we have to live within. tesla is one of the few stocks there will be many more for investors to participate in over time and, yes, that is probably one of the factors that is buoying up the stock >> when you say there will be many more over time, it does make you wonder why the market's not giving any of tesla's

competitors credit or faith that they will be able to match their dominance even with the tide rising all boats >> there's a lot of competition coming on. the super bowl had three ads for electric vehicles and none of them were tesla. one of them was for a hummer you know the world is changing when the poster child for gas guzzling excess goes electric. >> ride sharing companies, another area you've invested in and exited as well uber after the bell, you've been skeptical about the business models opinion they say they're targeting adjusted ebitda being profitable in 2021 do you think they can do it? >> only if their food delivery

service gets bigger, if their -- if their trucking service gets bigger the ride sharing service is a money loser, and like i said before, the only way they're going to get out of that is by stopping subsidizing all of these drivers by just purchasing lyft, because if they don't purchase lyft, waymo probably purchases lyft and they'll have a bigger mess on their hands having to compete directly with alphabet in this domain. >> ibrahim, let us know next time you find a good idea stockwise. let us know a little earlier good to talk to you. >> very good to talk to you too. thanks for having me on your show >> a reminder, can't get enough "squawk alley" i know watch us live or anytime on the go on the cnbc app

ere's what's coming up top of the hour. rally time or nervous time what the incredible comeback says about where your money will go next. twitter surging on earnings today. we'll hear from stephanie link about her great call on that stock, ask her what she's doing now. and our "call of the day" gives a popular chip stock a boost and we'll debate micron. see you in about 15. >> okay, scott see you soon boeing's alliance share of the dow's gains right now.

phil lebeau is watching not just the guidance on the certification flight but the wiring issue and the degree to which the two are tied >> the wiring issue is one that -- steve dixon was talking in london saying it's unclear if that would impact a certification flight you've seen the stock pull back a little bit because there is a new software issue that has come up and boeing, we mentioned it about half an hour ago, boeing out with a statement saying during the flight testing of the 737 max's updated software, an indicator light associated with the stabilizer trim system illuminated in the flight deck we determined the illumination was caused by differences in input data between the flight control computers. this is a result of the fcc cross compare redundancy software update that was issued in june of 2019. we should also point out that boeing makes it a point after issuing the statement that it is sticking with its current guidance of a recertification and the 737 max being ungrounded

by the middle of this year that's a broad time frame, middle of this year, but, again, that's what boeing is saying at this point back to you. >> leb will bphil lebeau, thanku shares of twitter surging after posting record revenue this quarter. it's now up, what, better than 16%. julia boorstin has more on those results from los angeles >> it's growing its user base at its fastest pace yet the company growing daily active users to 152 million, adding 7 million daily users from the prior quarter. ceo jack dorsey saying that more than half of the 26 million daily active users twitter added last year were driven by improvements to the product. the ability to follow topics, more relevant tweets and notifications. >> i do believe this is ultimately transformational in all the positive ways.

it gives people a rich time line right away but also a path towards discovering even more. ideally, getting them to a position where they feel a lot more comfortable participating in a conversation and not feeling like they're just tweeting at the world but tweeting at a particular interest >> dorsey weighing in on questions about his tweet last year he plans to spend months this year in africa. he says he doesn't have specific plans but he's focused on building a more diverse workforce advantaged by time zones. >> i don't fear any slowness as we work to distribute our workforce more and i do think that we have to build a company that's not dependent entirely on san francisco. >> we're starting to hear from analysts 60% of analysts have a hold rating on the stock. they're generally bullish on twitter's user growth but honing in on increasing expenses. mkm partners saying the cost of growing the business is rising the company seems to be playing

catch-up on tech investments back to you. >> julia boorstin, thank you meantime, take a look at shares of zynga, up more than 12.5% in today's trade after another strong quarter of earnings results. and a continuation of the major turnaround for the company it's tripped since frank took the hell nm 2016, raising its guidance three times in the last year a boost in profit margins and a focus on sales growth leading them to outperform the s&p for 2019 the ceo joins us now on the company's earnings results frank, thanks for being with us. >> it's great to be here, morgan thank you. >> one of the places i want to start, as you mentioned, strong quarter but advertising specifically, up 11%, now accounting for almost 20% of total quarterly revenue. i realize there's some noise around this in your current quarter guidance, but overall, how much do you expect ads to grow >> you know, advertising has been a great contributor for us.

it's really tied to our main franchise, words with friends. and what we saw at christmas was outstanding performance, a really big gain in seasonality it was a big quarter for us from a demand standpoint. we also saw a big pickup a picke men of the game, people were playing longer and making more moves, which generates more add inventory. we also got deals in q 4 done. as we head into 2020, some of those deals will expire and have to be reset. as you look forward into q 1 and beyond in 2020, we expect advertising will grow. it will get a little bit of a slow start in q 1 but we see it picking up the rest of the year. >> you added a number of franchises to the portfolio in recent years, a lot of it through m&a. do you tin to be inquisitive what would you target next the industry is undergoing consolidation right now.

we are an active participant in that we think our company is a strong destination for a lot of the developers out there we have a prove platform that allows them to come in, keep their creative culture and independence but scale in a way they couldn't do earlier sold our headquarters building in san francisco as well as raised money in the bond market we have $1.5 billion we are looking to deploy against acquisitions in the future the good news is business is in doing well right now, we are not a rush to do m&a. >> what technologies are you taking a risk on looking ahead in the next year and beyond. what's your assessment of newer platforms like apple's arcade? >> i think the technology that is going to probably be the biggest tail game for mobile gaming is 5g when you look at how the infrastructure is rolling out,

the capabilities it is going to provide to developers and the benefits it is going to give to players is really profound we will move to a day where people will be able to instantly play games off the ad they see in instagram you will have higher performance games, games that frankly will be much better from a multiplayer standpoint people will be able to play together in better way with lower latency. it is rolling out at good pace but in some places for slowly than others. we see a long term tail wind to the industry from that standpoint. >> do you think it gives a tail wind to ar and vr, which it doesn't seem like we talk about as much as we did last year? >> it is interesting, those technologies seem to be a little bit further out. there is a lot of investment but there hasn't been that killer app consumer product yet that takes to it the masses i think pokemon go was the closest ar has gotten to a

killer app that's still doing very well but you haven't seen an expansion beyond that in terms of ar, vr requires investment on the players' part. they have to have a high end computer, you have to have the quis you have to be at home to put the helmet on. it is not accessible like you see with mole gaming where you can play toes anywhere, any time as long as you want. i think over the long term those will be great entertainment platforms but i think they are going to take longer than people are expecting. >> i am curious how you are assessing competition for eyeballs and time spend given the fact we have big bucket publishers rolling out mobile versions of their title. as john just mentioned some of the cloud gaming offerings right now and video streaming. all of it i would imagine is competition. how do you continue to bring people in to your products rather than all of these other offerings? >> i think it starts with our

orientation to live services our games are 24/7/365 we know if we don't keep the games fresh and innovative for players they will stop coming back it starts with maintaining a high level of product quality, understanding our users and building the games out from there. i think one thing about zynga is the majority of our players are women. we think of our players as busy adults who may have short stipulates of free time, we want to give them games we kater to a more mass market customer there we welcome the competition because we think it makes us sharper and overall makes better games for our players. >> an interesting stat frank, thank you for joining us today. dzikka are up 12.5% right now.

>> thanks. how is this for a tease? jane wells in chinatown. jane, what's after the break >> well, scared about the coronavirus? forget it, jake. it is chinatown. wrong chinatown. good movie this is the largest and the oldest chinatown in, he ma i have only seen two people wearg inmasks. up next, they are still having their big parade this weekend. why? when schedule a returns. when "squawk alley" returns without the planet getting warmer. at emerson, when issues become inspiration, focusing core strengths to create a better world isn't just a result, it's a responsibility. emerson. consider it solved. gimme two minutes. eligible for medicare. and i'll tell you some important things to know about medicare. first, it doesn't pay for everything.

say this pizza... [mmm pizza...] is your part b medical expenses. this much - about 80 percent... medicare will pay for. what's left... this slice here... well... that's on you. and that's where an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company comes in. this type of plan helps pay some of what medicare doesn't. and these are the only plans to carry the aarp endorsement. that's because they meet their high standards of quality and service. wanna learn more? it's easy. call unitedhealthcare insurance company now and ask... for this free decision guide. inside you'll find the range of aarp medicare supplement plans and their rates. apply any time, too. oh. speaking of time... about a little over half way and there's more to tell. like, how... with this type of plan, you'll have the freedom to choose any doctor who accepts medicare patients. great for staying with the one you know...

or finding... somebody new, like a specialist. there are no networks and no referrals needed. none. and when you travel, your plan will go with you anywhere in the country. so, if you're in another state visiting the grandkids, stay awhile... enjoy... and know that you'll still be able to see any doctor who accepts medicare patients. so call unitedhealthcare today. they are committed to being there for you. tick, tick, tick, time for a wrap up. a medicare supplement plan helps pay some of what medicare doesn't. you know, the pizza slice. it allows you to choose any doctor, who accepts medicare patients... and these are the only plans of their kind endorsed by aarp. whew! call unitedhealthcare today and ask for this free decision guide.

the oldest chinatown in america is not getting the coronavirus stop its party jane wells explains from san francisco. jane >> hi, carl. yes, that's the dragon quite right there, entryway to one of the most storied communities in this country it is bucking the trend with the lunar new year parade saying the show must go on. >> we need hope, and we need to conquer fear >> reporter: that's grand marshal norman phuong who says chinatown is one of the poor stots spots in san francisco it needs this parade, especially now. tourism officials say 75% of tourists that come to san francisco come here. and some reports say merchants are claiming foot traffic is down 50% because of concerns about the coronavirus this

festival usually brings in hundreds of thousands of people, and it has major corporate sponsors lying bank of america, which was founded in chinatown >> he. >> yes, there are some concerns. what we also share with them is you need to follow how to protect yourself making sure you are drinking water, you are taking your vitamin, and really, to understand what this virus is >> reporter: southwest airlines has been a parade sponsor for 30 years, tells us it remains in contact with folks on the ground, quote, we trust in their consult agency with experts and support their ultimate decision on the event organizers could still cancel. guys, as you may know, this city has already taken some hits outside of the coronavirus because many of the streets of san francisco are filled with homeless, they have lost a couple of conventions, including oracle world, which cost the city $64 million in lost revenues it is a big deal financially if they can get people to turn out. back to you. >> absolutely jane thank you for that our jane wells covering what's been to some degree a global

spread of the coronavirus. do not mice a special report on the coronavirus outbreak tonight, 7:p.m. eastern time here on cnbc uber, opinions, tonight, act vision, i think they will be on the closing bell as well for the time being, let's get to the judge and the half. >> carl thanks i'm scott wapner front and center, the incredible comeback for stocks as the s&p and dow hit new record highs again. is it time to get more bullish or more concerned. it is 12:00 noon, and this is the "halftime report." the tale of two market what it means for your money, and what investors do from here. twitter shares flying high profit missed the mark, but strong user numbers. how to play this stock from here casper begins trading today along with two names in the biotech space. should you buy them? shares of micron up almost 10% this week.