based on what you just laid out? >> i think not the technology stocks, i think the parts of the market -- liquidity will go -- in a period of less -- of less limited liquidity liquidity will go to the winners even more. you can see the technology stocks doing better and the other half of the market suffering would be one way to think about it but i don't make stock market predictions as you know. >> i know. we are out of time always love these conversations and we really look forward to having you back again soon, glenn. scott, thank you i will see you back here tomorrow. >> all right, becky. >> that does it for us today we will see you tomorrow right now it's time for "squawk on the street. ♪ good wednesday morning, welcome to "squawk on the street," i'm carl quintanilla with jim cramer, david faber futures are solid coming off the nasdaq's 30th record high of the year watching vaccine news, stimulus talks, big miss on adp but revisions were up. coming up this hour teledoc and

lavongo on their merger and the first company's earnings report. david has news on microsoft and tiktok. >> want to continue to update a story we're following closely given we have not seen anything like it. tiktok the incredibly popular social media app in the u.s. and around the world, bytedance its owner, the u.s. government saying we will shut tiktok down -- in the u.s. unless you find a way to transfer all of it to u.s. ownership and microsoft playing the role as potentially the only suitor for the business i wanted to bring everybody up to date on new reporting that i've got because it is interesting. both sides right now, bytedance and microsoft and of course the u.s. government is still very much involved in this as well are negotiating to try to reach some sort of an agreement under which microsoft would buy the u.s. business of -- texas tok's u.s. bit from bytedance within the next two to three weeks.

that seems to be what they're hoping for in terms of a timeline obviously in these you do set a timeline to deal with the big issues the biggest issue has been involving technology and particularly the transfer of the software code that currently sits in china that runs tiktok we're talking as much as 15 million lines of ai. we talk often about whether the chinese have a lead in ai. well, ai has been at the heart of what has made tiktok and the algorithm there so strong and why conceivably it's become so addictive for so many teens around the world 15 million lines of code there's just not that many companies that could even be in a position to transfer that and there's been a negotiation going on about how long the u.s. government would give any buyer to actually take that code from china and move it to u.s. servers. the answer is one year and, again, the number or universe of companies that even would be in a position to have

enough software engineers to accomplish a task like that, well, it's extraordinarily small. so that's another reason why it would seem when you tick off google or facebook that you're left with microsoft. they have agreed, i am told by people familiar with the situation, to a one-year deadline to transfer this code you can talking about bytedance has about 10,000 software engineers so this is an enormous undertaking that microsoft perhaps alone is in a position to actually do if they want to move forward with the deal which of course then gets to you value and that is what they are just beginning to talk about now, again, according to people who are familiar with the negotiations they've sort of bracketed a basic idea of where value might be, perhaps it's as low as $10 billion, it might go as high as, oh, i don't know, the founder, 36-year-old founder of bytedance might want as much as $30 billion. it's very much unclear you could get to that number because let's not forget, of course, you are either faced with shutting down the business or selling it and so it would seem at almost any

price it's worthwhile to bytedance to get something for this business as opposed to taking its chance that is perhaps within some period of time, maybe when there's -- if there is a new administration at some point they might be able to reopen tiktok in the u.s. which by the way remains a very much unknowable answer in terms of that question. that's where things stand right now. they're hoping to get to a deal within two to three weeks, are just starting to talk about value, they have reached an agreement with the u.s. government about how long they will have to actually transfer this code, guys. it doesn't mean it's a done deal by any means and of course there is always the possibility that should microsoft say we are not going to pay a lot for this business that bytedance says we're going to shut it down and take our chances there is always that possibility, jim we will see. you are talking about depending on who you talk to a business with as many as 100 million monthly average users in the u.s., 55 million perhaps daily average users, time spent is

enormous with a growth path that many believe is extraordinary and could open up a truly new business for microsoft that reaches well into tens of billions of value over time. >> david, if microsoft just runs the operations only but bytedance keeps running product development and the algorithm most importantly, that doesn't really address the national security situation so what you're telling me is they can cure that >> yeah, i think the cure is that everything gets moved to the u.s. all software code. so there is no connection whatsoever with bytedance, there is no connection at all to chinese servers, to chinese engineers, to anything like that >> then that's -- >> which is why microsoft -- you know, from a security standpoint as well as you know has been vetted, the dod contract we talked about that azure got for cloud, they've been through this again, it comes back to this idea, jim, that there's really only one potential company at this point. >> no. >> can you imagine others? >> no, there is a hope that hans

ves per gets involved at verizon with a substantial media addition, yahoo and the division itself drv. >> does verizon have -- if they were even to be interested and i have no idea that they are, i could think of a couple gaming companies perhaps -- not gaming -- >> i also thought -- >> -- that might have at least interest in looking at the asset but i don't know if even verizon is in the position to have enough software engineers to pull off that feat of moving all of that code. >> very good point they are not littered enough, not code oriented. the problem is hans has his hands filled if you take a look at that last call for verizon he doesn't bother to mention yahoo and they have a considerable business aol, itwasn't aof, it was oath interactive, when that one was thrown up in the air -- >> again, i think this is a

debating issue of such significance this ability to transfer that code within a year that it really does leave you -- if bytedance could find other buyers that passed the u.s. government's test, jim, they would do so. >> absolutely. >> the only way to get near fair value for this asset will be if you can engage in some sort of an auction but that is not going to potentially be the case we will see where they end up over the next two to three weeks and whether they can reach a deal. >> you know there are hawks within the administration that fear that microsoft doesn't have enough leverage over the prc and the prc has leverage over microsoft. if you what you said is true i think the deal does get done and the president's objections will be answered. we still don't have a read on this so-called key money issue. >> the read is that it has not come up in recent conversations between the u.s. government and bytedance even after the president talked about it, that it is -- those in the u.s. government who are negotiating

on behalf of the u.s. and from their position, national security, have not brought this idea up. >> can you reveal thos driving this >> i believe the treasury secretary is deeply involved. >> that's what i stood, too. he should call us and tell us how he's feeling. >> certainly wanted to update people on that and a we will keep close to it. >> not done deal because not everybody is in favor of this. there's several wings to that white house, david. >> yeah, but -- all right. understood understood jim, i mean, microsoft believes, i think, at this point that they have the go ahead to try to negotiate a transaction. >> i agree with that >> and they would not move ahead were they not in a position to actually buy the asset if they can agree on a price. >> i'm saying that there is a flurry of -- is there anybody else because i think the answer is no one is sophisticated enough to handle that code. >> that's what it feels like. >> wow amazing, satya nadella, the good

guy. >> as people react to your conversation saying cramer says yahoo -- or verizon might buy tiktok, is that your argument? >> no, it's just that they're looking for someone who is like a verizon. they think that verizon is an interesting idea but it's not like they're negotiating with hans vesper. i'm saying within the administration people are saying is there anybody else? is there anybody else? there are people who fear that microsoft is too close to china. >> but i don't think those are the people who are running things right now. >> i agree with that. >> i don't thinkest that the case again, i wouldn't report what i am if i didn't feel confident that it was true. >> but i would not mention what i said if i didn't feel that there are people who are desperate to try to stop it. >> right >> but may not have the cards. fair >> so they don't want it to be sold to anybody. >> yes correct. >> they just want to shut it down. >> in the end they want to shut it down. >> some factions within the administration who conceivably are not at the negotiating table at this point. >> well, they keep coming to the table. they're still here we wouldn't be having -- >> they're still around.

you can't get rid of them. i know. >> i said it was going to be -- that it was going to be a trade war going into a cold war. >> you can't get rid of that guy, he pops up everywhere. >> it's ideology. >> iknow >> i have into my hand, david, a list of 53 people in the state department who do not agree with this man >> oh, man all right. i hear music playing, carl he's got his head down. >> we're going to get to obviously a slue of other news, novavax, disney, wendy's a ton of earnings and more on the way tonight. after the break we will talk to teledoc and lavongo on their merger ckn mont cross currents da toy. ba ia me ♪ come on in, we're open. ♪ all we do is hand you the bag. simple. done. we adapt and we change.

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we don't often see this happen, a company teledock stock is up 200% this year livongo one of the most exciting deals if you've been following the legitimacy of telemedicine and also the ability of being able to take control of your own health care which is what livongo does we are thrilled to have jason gorevic who runs teladoc and glen tullman joining us now. congratulations on a blockbuster merger that could not have been done unfortunately without the pandemic but is going to rule.

i want to start with you, jason, you will be running the combined company. i was looking at the book "the patient will see you now" and they predicted there will be this company that will be the uber of health care and it was named teledock and you had done 120,000 consults in 2014 how many consults have you done now? how big are you? and how pervasive you are both here and worldwide >> well, our guidance for the year is about 10 million virtual visits this year, but we're just scratching the surface bringing together these two companies is the next step in creating a paradigm shift in what people can get from virtual care regardless of what their clinical condition is. i think it really has the opportunity to be that destination for consumers no matter what they're looking for in health care. >> one of the things, jason, again, just before i go to glen that i thought has really worked in your favor, no one wants to go to a hospital anymore, to go

see a doctor they find it frightening. teledock has picked up a huge number of people because everyone is afraid. >> that's exactly right. this is a catalyst, we were already on a tremendous growth trajectory and the adoption was happening any way. i would say that this situation has accelerated consumer and provider adoption and the role of virtual care by at least three years. that accelerated the bringing together of these two companies which i would say was inevitable i just didn't expect it to happen quite this quickly and when glen and i started talking it became clear that putting these two leaders in health care together was better than us trying to sort of duke it out in competition because we were ultimately going to converged. >> glen, i have to tell you you know that i've been a big fan of livongo and of your work which i've known for two decades you stock is up 470%

why given now when you are obviously the leader in what i regard as being mentor medicine, people where you are really life coaching people with lifetime diseases like diabetes the world is your oyster why throw in your lot now? >> i think this was an opportunity to connect with a company that had a shared vision and as jason talked about this idea of having one stock you know, this merger creates the global leader in consumer centric virtual care and neither of us could do that alone. so what we wanted to establish with people was one place to go, create a longitudinal relationship and this brings together the two fastest growing companies in the space, the two most innovative companies in the space. you know, jim, when consumers look at this they don't want to go to four different places. they want to go to one place and they want to have their entire transaction managed and that's what we've created here. we've made it easier for people

to stay healthy and we put the power back in the consumers' hands. that was so exciting and we knew either we were going to -- as jason said, we were going to compete or we were going to come together and we decided the best way to impact millions and millions of people was to come together. >> i think it's important to point out that even though you guys have been dominant players, jason, there's very little overlap. there's lots of different ways to be able to get it so that there's customers. i know that the deal has to close first, but it could be extraordinary. >> that's right. teledock health we have over 70 million people who have access to our platform, i mentioned we will do over 10 million visits this year. that 70 million is here in the u.s. plus tens of millions internationally. there is only about a 25% client overlap which we were quite frankly surprised when we compared notes so that just provides tremendous

opportunity to expand the penetration and distribution of livongo's leading chronic care management capabilities and by putting them together we think we just get better engagement, higher levels of referrals and more value for the consumer. i guess i'd just add, you know, this is what our clients have been asking for. they've been asking for a single solution and a single partner to deliver this kind of care and virtual solutions for their members, their consumers, regardless of whether it's a company or a commercial population or a medicare or medicaid population. >> glen, then, you know, in terms of you delivering more value for your shareholders, you're counting on jason to deliver on some of the synergies and what he was just talking about. how confident are you from your vantage point that he can achieve? greater than half a billion revenue synergies by 2025?

>> we've sent time together, i have a great deal of confidence in jason and in the teladoc team, as well as in our team you know, jim mentioned the fact that there is very little product overlap, there's very little customer overlap and so we know, our teams know, we need each other to successfully win and execute and what jason said was exactly right, we have many of our clients who have said you need to add telehealth and many of them said you need to add teladoc and so this is really driven by our customers who are saying to us make it easier for us and give us one vendor, one place to partner with, one place to go to so that's what we've really been able to do so i have great confidence look at the track record of what jason has built. you know, jim mentioned early on where the company was.

look at the company today. and this was, i think, the final piece of the puzzle that completes that virtual care place to go that, you know, a consumer whether they are talking about a hospital stop, whether they're upgrading their care, whether they need behavioral health it's all one place to go. >> yeah. >> people are saying we want it to be less confusing, less complex and less costly. that's what the merger does. >> inn grating a deal like this is about people and cull door. anything in your background that would indicate you have the experience necessary to make sure you execute this thing properly >> well, i guess i'd start with saying we have a pretty good track record so far of integrating companies, retaining key management and at the foundation of that is when we consider partnering with someone, culture is critical to us so, you know, that was part of

the bill jens. i was having an email exchange with one of livongo's incredibly talented executives and talking about the future and he actually emailed me that he has had fun with the diligence process which you never hear somebody saying they're having fun with the diligence process, but getting to know executives who have a common goal, a common mission and a common culture is really powerful and everyone sees the complementary assets and capabilities that both companies bring to this. >> glen, one last question you've been someone who has understood the costs in health care forever for everything you've done, tried to bring it down with electronic medical records. is there any help -- hope when you put these two companies together that they will actually be some day that health care won't take so much of our gdp? >> well, i think what i would say is we're going to make it much more efficient. that said, remember in health

care the longer we keep people alive the more services they use. they replace more hips as they get older, this he replace more knees, they need, you know -- when you keep people alive for a longer period of time they're spending more money on health care, but what we believe is you can spend it in a much more quality fashion, in a much more cost effective fashion i think what teladoc has been able to demonstrate is if you use telehealth you're going to drive down your costs, you're going to keep people out of an expensive saturday system unless they need to be there and similarly livongo delivers a measurable return on investment. we are all about how do we create an incredible consumer experience, number one, number two, how do we make it better care and last but not least if you do those first two you're going to deliver a better cost effective process. so both companies, again, have a very aligned vision on doing

that and i have tremendous confidence that jason, our new combined board and the team that he's put together -- and, remember, he's picked up probably the best data scientist in silicon valley and a lot of them who are going to help drive and further informate the process. we have a lot of assets to put together i have to tell you we couldn't be more excited about where we're going to take the company. >> i've been both your companies -- livongo is number two and just enjoyed having you gentlemen on our own so many times. jason gorevic, congratulations, new ceo of this combined entity, again tullman, once again thank you for being able to make it so that medicine is not just the province of the rich we will go over to carl. thank you so much. all right. jim, thanks. still haven't gotten to disney so far this morning, stock it up 6% free market

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>> announcer: the opening bell is brought to you by nuveen. a leader in income, alternatives and responsible investing. normally we would have gotten to disney by now, jim, but market reacting well to the earnings last night, certainly the sub numbers out of disney plus as we well know years ahead of schedule and now sell side commentary that reiterates this idea that disney is pivoting to a world in which we do go to heaters and get on planes to go to parks less. >> i think that there are -- look, this was a remarkable call, first of all, because the cost controls -- no one ever thought they could amount to so much i think in a lot of ways because people thought disney was so well there was nothing you take out. this was a cost call, it was remarkable when you get to the point where you actually have to defend that you have so much cash, i mean, just think about it. two quarters ago we were talking about having to suspend the dividend and the dangers that disney was facing.

now they've got a lot of money, this he can wait it out, they can do whatever they want and there's so much good vaccine news that to not energy the vaccine news with disney is to lose why the stock to go to 135, 40 in a heartbeat. great conference call. you can do a movie and charge 29 bucks for it and it's one off and people say fine. this thing is just 100 million different platforms. carl, it was a remarkable call and the people who sold the stock at 117, they should have their fingers taken away from them so they can't keep entering on the keyboard. they need mittens. i will buy them all mitten clips so they never do anything. >> jim, at the n kbrchlt sc it's the american red cross helping those affected by disasters like tropical storm isaias. at the nasdaq celebrating an ipo rack space technology, a multi-cloud technology services company, we will talk to the ceo

later on on on "squawk alley." david, to jim's point, enormous discipline and that "mulan" $29.99 is something for a dis me plus sub, we will be looking for fly wheels in that. >> and of course that 100 million global sub number for disney plus i think is what the market is seeing off of. let's not forget they are spend ago i lot of money on disney plus you have to invest a great deal. but the investor base, the analysts all seem to be applauding the future investment that's coming there given the growth they're seeing. guggenheim, new bob tease up bold investing day sequel with star streaming expansion bundle breakout on the horizon is there a bundle breakout on the horizon? >> if they hadn't done disney plus what would be the conversation cruise ships, we would definitely be talking about that long lines for space mountain, are you kidding? closed come on, david.

>> and got no movies in production right now and none going to the big screen. it would be void of anything positive to talk about. >> right. >> but since it was first brought up as an idea years ago by bob iger we have been talking about direct to consumer for disney. >> bob who >> the first bob. >> oh, yeah. >> i like guggenheim, they called this guy new bob. new bob. they just go bob to bob over there. >> it's like newco. >> let's find another bob. you know what bob spelled backwards means. >> that's clever. >> thank you keen sense for the obvious guys, a 6% move, jim you think it's sustainable, though, and you don't think that continued pressure on the theme parks and where they've can cut $700 million in capx that continued concerns about cost cutting will get in the way of a positive story >> if i were a disney analyst i would say, okay, here is the positives and all of those and

including with the positives i would say the eli lilly antibody trial, the novavax vaccine, the merck antibody pills i would not do hydroxychloroquine, sorry, mr. president, that's a risk factor. i do think that you have to start thinking about that. i think if you have in the bowels of the nfl you are thinking how is j & j doing with the warped speed vaccine i think of all the things that we've been talking about if they don't pan out, i don't think you can have all these companies and axford university fail so i now think that -- i think that the bears could be on the run on any good vaccine news from now on. >> interesting carl. >> they raised an awful lot of money, carl. >> well, i mean, the follow on to that is what happens to the trade and deep cyclicals do we see an explosion in interest in the industries that are actually now a pretty small

slice of the s&p but highly visible like travel, leisure, restaurants? >> i went over to the emerson yesterday because emerson used to be the classic name that you could buy and it turns out they made the quarter just on margin expansion. but today someone can't resist, we got a term recommending the stock and i will tell you here is the one you want to know, this is how people can gauge this, there is a man steve tusa, i call him i wish mail because of the moby-dick aspects of ge which he got completely right. he today has good things to say about 3m it is the stock to watch david, one time we used to talk about the key to this market when we sat next to each other the fact that he said good things about 3m and has hated it since 250, it is down to 150 tells me, carl, that everybody is trying to find a cyclical that they can cotton up to i've cottoned up to dupont because they have auto and also

hogs i watch 3m as being the bellwether if they make big moves here, more health care and china picks back up which it looks like it's doing that could be the stock that people with going to pile into 3m. >> that's the first time i have heard you say something like that. >> first time tusa -- i'm with tusa, like i'm with stupid, i'm with tusa. >> speaking of tusa makes me think of ge. they've been selling some stock. >> really? you're waving at me? >> i wanted people to know that i can see you as a human you are not a hologram. >> i'm here. power isout in the house so here i am. >> i like that white background much more. >> you like the other background. >> yeah, where you are -- i could do green screen of my other shot. >> wapner came here because he doesn't feel like his house can compare to yours. >> we are all going to get in the house soon and one of these

days you will get me come over there. maybe we will get carl and we would call that a show in the same place show. >> we could do it on the stage maybe. >> on a set. >> carl, i went to broadway on sunday it was kind of like planet of the apes. >> "i am legend. >> you did it. guys, i was talking about ge but i want to mention the banks, we haven't talked about them since earnings season. warren buffett adding $337 million worth of bank of america. >> i know. >> another 13.58 million shares, average price 24.81 between the end of july and today. >> isn't he worried about increasing loan losses and the possibility there may be no deal between the democrats and republicans? >> i don't know. berkshire is by far the largest single owner of bank of america shares i just want to see exactly where they are in terms of a percentage adding more. >> i wonder if secretary mnuchin

says, do you know what, guys, i think you're going to have to curtail and cut your dividends because you're going to need the capital. are people just thinking that's not going to happen? >> i guess they think that it's not potentially going to happen. i guess you think that it may happen. >> i think if we don't get a deal soon and take away the $600 and don't put $1,200 in people's pockets. i'm a big believer that the vaccines are going to come to the rescue but we need something to keep us going before the cavalry gets here. >> "politico" with the latest this morning is that the gop concessions include going to $400 a week through mid-december, election more -- eviction moratorium through mid-december, $200 billion in state and local and the dems according to "politico" have given a little bit on usps funding. >> could be a deal tomorrow. >> it does appear like there is movement. >> there will be a deal tomorrow tomorrow or friday. >> you think so? >> yes $400 is the number >> $400 is the number or bid ask

4, 6 now. >> that is what the dems were hoping they would come up to. >> okay. >> they're not going to say 450 now. >> you get 400 and you get an extension. >> yes. >> do you get an overall bill or is that a separate quick extension and then you deal with the big other issues >> my understanding is that, yes, the small package. >> right. >> but then again my verizon bid was my understanding and you laughed that off. >> i want to make sure people understand it's not you saying that you know that's going to happen, you were simply saying it could make sense for it to happen even now it's not going to happen. >> people who are more powerful than me within the administration thought it made sense. how about that. >> got it. >> it wasn't like i got it out of thin air. >> i understand. that's good color to have. >> thank you >> yeah, and microsoft tiktok, microsoft bytedance fascinating. >> we will talk nikola, too, after the break with the

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nikola reporting its first earnings as a public company last night with no revenue or physical product to show at this point. how does it stack up against its competition? joining me now is trevor milton, nikola's founder and executive chairman he will give us an update, discuss the outlook for the company. always good to have you. you know, on the conference call yesterday after you reported earnings your ceo was not particularly forthcoming i think to the frustration of some analysts in terms of hoping for more guidance on some of those milestones out there i will go through them with you and see what you can tell us, if anything let's start with the announcement of a significant commercial agreement for nikola zero emissions you say it's in the works by the end of 2020 is it still? >> yeah. it is. there is a lot of really good things going on in the background, the hard part is with analysts you need to manage your expectations. i'm a little bit more of an outspoken communiqué testify type of could you tell testify

chairman, our ceo is very and cfo are very methodical and all about managing expectations with analysts definitely we have a variety here at nikola, but it's in the works for sure, i'm excited about it. >> i guess let me come back to that how does that work as you say you come on tv with us, we talk, you are an outgoing personality, you're willing to say things, you're very active on twitter and then you have these buttoned up ceo and cfo. is that an arrangement that's going to work long-term for you given you are still a development company, we are all focused on milestones because it's not like you have any profits? >> i think it's good you need balance in life i'm a lot to handle, i know that and it's good to have a cfo and ceo that are very methodical and they have ran publicly-traded companies before, mark was the president of bothering ton industries, he is a lot more i wes you to say thought out, very

buttoned up like you said. i'm very open, good or bad, i get hammered and i get loved, it's a love/hate relationship with a lot of people. >> that's why we like to have you and that's why i've enjoyed getting to know you a bit. let's go back to the list, an announce of an oem program for the nikola badger by the end of 2020. that's still on track? >> absolutely. i have three term sheets on my desk to choose from and unfortunately they have -- the oems have made me not speak about what they're doing i can give you just a little bit. i can give you a lot what i can say is that we are in very, very deep definitive discussions with -- with oems. i had three of them on my desk, i had to choose which one we were going to go with and i think everyone is going to be very, very excited about that. we will tell everyone as soon as we can this is the with unthat is hard for me because the badger is so awesome and such big news and what we're doing is so revolutionary when it comes to

the idea of how big oems can work with new upcoming awesome brands, it's kind of like what everyone wished, you know, tesla would have done with an oem we have done. so it's going to be very exciting when that news comes out, unfortunately -- >> i get it. >> they've handcuffed me, you know. >> i guess so. how about the announcement of a hydrogen station collaboration by the end of the year is that still on track >> it is they wanted to beat expectations and it was really painful, look, i know yesterday was tough, i wasn't on the call, i was here in phoenix but i let our ceo and cfo, you know, manage the call because that's their job, you know, and i wanted them to feel like they have a voice in the company and so it was really hard for me because the way i would go about things would be a little bit different but that's also what's good about the company is that the long-term -- you know, the big institutional funds want to know that you have very, very like rock solid methodical, you know, executive

team, right, and then you also have me who is very vocal and innovative and creative and working on huge deals. so you really do get the best of all things but they wanted to manage expectations. they put it out to let people know, look, by the end of the year my goal is to go and blow it out of the water now. >> right you are out there, you are the cheerleader, you can only cheer so much, but eventually you've got to actually put up some real numbers and milestones, trevor i mean, we can bring you on all you want and you can talk all you want and it sounds great but when are we going to start to see something beyond you promising stuff? >> no, look, that's absolutely fair and i also have to, you know -- i usually don't come to my defense too much with people because, look, i have a lot of things to learn and do better, but we are a pre revenue company and we told everyone from the beginning of the year, look, give us until the end of this year people want us to be tesla in our first three weeks' debut, we want all these trucks on the road right now

we're going to have the first zero emission truck coming into production in the world, it's coming out of our factory in germany now, we have five of them built, they are going to be testing over the next four or five months and we have them in the hands of customers next year and full deliveries at the end of next year, that's ahead of everybody. our factory in arizona we just broke ground, all the big earth movers, everything else are showing up next week, we will have that factory done in the next pretty much in the next -- in the next 12 months. i told people 12 to 14 months. that will be up and running. nikola world you will see the real badger, it's real and everyone gets to see that pickup truck at nikola world, see it driving, it is beautiful we've given like to our defense we are pre revenue, with he told everyone that we need until the end of the year. people need to like understand that we're not a revenue generating company yet but we are coming in like a freight train that's why people were excited to invest. it's getting in early or way

early on tesla if we were building 1,000 trucks a year we would be $200 or $300 a share. you either get in early and get the benefits of the rockiness or you don't, you know. >> trevor, it's jim cramer i've always appreciated your commentary and if you've got the badger let me be the honey badger you've got 14,000 reservations, $10 billion order book how much in deposits have you taken in >> i wish i could comment on that but it will give away the number of reservations we have. >> is it the possibility that the number of deposits is zero >> no. heavens no no we have a lot of deposits. >> so people are depositing, some people aren't depositing. is it kind of like a commune >> no, no. we require deposits on every order we have now. >> that would seem to be a disclosable number it's a material number that you have to disclose if there was an sec not the one that's on cbs but the actual sec i think they would ask you what is your number. >> no, i think that's fair and i

think you're going to see in our next quarter's earnings, i think you will see that divided out. >> okay. >> look, the badger is actually really cool and i'd love to have you out here i know you guys -- i think yesterday you kind of, you know, you kind of came down on us pretty hard and that's okay, it's my job -- it's my job to prove everyone right, it's your job to really question things and i'm okay with that but, look, i'd like to have you guys out here in person to see this, but even sooner when we make these announcements i will come on again. they are coming in they will be coming in soon. we wanted to beat expectations because that's the only thing you can gain credibility as a pre revenue company. >> as long as you say you're not going to take money in and you take money in you've definitely beaten expectations. david and i like to talk about cyber truck, badger. how many things can you do at once would it be enough for the fuel truck, right hydrogen would be enough, but you just got to get it all in, huh?

>> you know, it's something strange and funny about entrepreneurs that are -- that have been around and really pushed hard is you find out that efficiency drives you insane you push your teams to be fully efficient all the times and if you're working on one project, most of your teams actually is idle because they wait for each other. you can do four or five projects more efficiently than one. once you build a company you realize that when it comes to engineering on a auto group. that's why big ies ms have some projects >> there's confusion about value act. that's jeff unnen. that's the first time i met you. it's inclusive capital he owns 20 million shares. it moved to value act over i want to clarify that what about the shares and what about new money? are you in a position where you can try to deliver on all the different things you're telling us about without having to raise

new capital? >> yeah. here's a couple things there was three or four stories that said we went out and did offerings and diluted everyone and hurt everybody none of it was true. we were just issuing the warrants that come with the spak and also the pipe investors that invested before anybody. that was tough and yesterday they announced value liquidated all their nikola holdings. it affected our stock. they moved it to a different fund, a different name that's to address that it's hard because sometimes you're chasing and telling bad media. the next one when it comes to money, look, we're sitting on $900 million in cash in our account. we have 40 million from warrants right now the company is doing very well financially. like, i know a billion dollars doesn't sound like a lot of

money in today's age five or six years ago that would have been impressive it still is. i'd rather have a billion than not have a billion right, cramer? >> building a factory, a burn rate of $200 million a year for the three years. we have hiring and all the vehicle programs we have the launch yesterday in the earnings, we spent $11 million less than expected and we even built a badger in that program that was never disclosed. so to build a badger and beat i by that much was -- they got the numbers wrong. that's okay. we try to clarify with the analyst last night, but once the stock stabilizes and starts to do really well, there's a lot of financing options you can do with -- we're going to need more money, but we're going to do it at the right time where you bring in the right money without

hurting peep >> and you talk about your shareholder base you have speculative people. the stock took off we know about the robin hood traders. they're not long-term. you're dealing with volatility, particularly when you have somebody like you out there stoking the fires. >> yeah. our generation changed a lot you know this. first and foremost, it's changederinchanged everything some are in the for the long-term, but most of them are in and out quickly right? and it does make it a little more difficult to predict where the stock is going to go they want to communicate with the executive team i give them access to actually on a platform of twitter and instagram to directly ask me questions and talk to me it's refreshing. they're used to ceos that sit behind a desk and never talk even if i get hammered and i do a lot. i mean, i came up with a new thing called toll for trevor

i'm going to do a weekly or monthly episode of that, and you guys get this. the world has changed now. i have to deal with the robin hood investors of my generation and also the institutional investors. very few people are ever ipo prerevenue and dealing with that along with a nationwide pandemic so we got a tough thing on our plate, but this year, i can tell you this the next four months are going to be the greatest four months in nikola's history hands down this is what's exciting about nikola >> okay. i'm keeping that tape and i'm going to play it back to you next time if you don't deliver just so you know the next four months >> i'm okay with that. and if i don't, beat the hell out of me on the program >> i will beat you silly >> it will be a tag team >> tag it. >> trevor, thank you it is always refreshing and interesting. appreciate it. executive chairman of nikola

guys, s&p 3325 this morning. keep your eye on disney up 10% close to 130 that's a post co-vid high on the heals of its results back in a moment you say the customer's make their own rules.

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it's time for jim and stop trading. >> you're not going to get as much as a piñata other than when you get trevor from nikola, but there's a company called novavax. earlier it was so small i couldn't have it on mad money. here it is it is a background stock initially when they came out with their numbers last night people said wow, 130 people were

antibiot wore and anti-bodies eight people had side effects. that's the beginning of what you'll hear. you'll hear side effects and how many side effects make it so that people might not take the vaccine when it's developed. is side effects people went away as soon as people heard the side effects were not serious, the stock shot up. but you're not just going to hear that things are effective we're going to hear about whether something has more side effects. whoever has the least side effects, carl, wins. >> the jpmorgan note, we believe we can conclude this candidate looks best in class. are you in that camp >> no. i am still oxford and j&j and then pfizer. those three i think are the best look, these guys remember,

moderna, i'm not even including. i know people feel they're best in class, but let's take them all as a piece that's why i buy disney. you think they're all going to fail they're not all going to fail. one of them is going to get us to the promised land we have to think positive about life we're getting incredible, incredible numbers from these companies. one of them is going to make it. we only need one to get to the promised land. novavax is up 4,479% that's a nice return, by the way. and i say i am feeling and i felt this last night i was talking to mark benoff for the first time i felt there are enough shots on goal, enough drug companies starting to hear good things that next year is going to be a different better year than 2020 >> yeah. it would be nice to move onto things like distribution and logistics rather than approval and development.

>> don't forget -- beyond meat -- >> look, this is another one this is like nikola. it's the future. wictor peng. jeff martin. he believes in hydrogen. and that's what we got to find out about. hydrogen fuel. because it's cheap it's clean it reminds me of nuclear power before three-mile island >> jim, we'll see at you 6:00. we have data to get to maid money, 6:00 p.m welcome to "squawk on the street." let's get to ism services with rick santelli. >> this is a key this is where the weakness is and co-vid has the greatest effect we're looking for a number of a july read. 58.1 this is the highest read to february 57.1 in the rear-view mirror up

to this point is unrevised 41.8 was the low water mark in april, the worst level in 11 years. so we outperform on service side in huge positive revision on adp and we see the markets continue what they've been doing. interest rates on the soft side, but they have bounced just a bit off the low yields carl, back to you. >> we're joined by david faber and leslie picker. one of the stories of the morning is disney reporting the first quarterly loss since tw201 moving higher this morning as analysts take note of the quarter. the ceo announcing big budget remake mulan will debut as a premium price download in september. our next guest says too early to buy. laura martin is with us.

always good to see you >> thank you nice to be here. >> you say you're looking for better clarity on co-vid pressure when is it going to be too late? >> you know, i think hopefully we get a vaccine by year-end, but that's not the end you have to have people in cinemas willing to sit for three hours together you have to have people willing to go to a park where there's thousands of people touching everything you touch it's fear in addition to actually having a substantive solution and i just wonder if the physical world is going to come back to january of 2020 levels for two or three years >> in the meantime is the pivot to digital and direct not enough for you? >> it's really not enough for me we saw thelosses went up from 500 million lost last year to 700 million this year. 69 subs in nine months

100 million paid subs between hulu it took netflix eight years to get to those numbers they're still not making money at this. they're losing money that doesn't help us from an earnings per share or precash flow metric point of view. >> laura, do you think demand was where it should have been for the parks when they reopened do you think they should be lowering their prices to get more people to attending parks in this environment, despite the reduced capacity >> i absolutely do i think almost all physical assets are going to have to lower price points it goes for professional sports in person games and all of these physical whether it's cinemas or parks. i think we're going to have to have 30% price cuts to get people back into the physical world. you're putting your life at risk or taking higher risk than you thought you were in january even after a vaccine since there's so much unclarity about whether you can get this virus twice

i think that fear level will lower demand structurally. by lowering price, you generate demand over time >> investors seem almost solely focussed on direct to consumer in a sense i mean, it's somewhat reminiscent of another name you follow closely, netflix. if subscriber rates go up, something to else seems to matter do you agree with that and when will it not matter >> i don't agree disney is down 20% year to date. there's lots of stocks that benefit from co-vid. amazon, not only benefits from co-vid but also benefits structurally because so many people have moved online for grocery shopping or for the first time e-commerce shopping that benefits no matter how long co-vid is. pel ton bikes, awesome winner. roku, awesome winner from co-vid i think there's plenty of places that benefit from co-vid

regardless of how long it lasts. because they benefit short-term and structurally so i don't understand why we have to argument about disney. you have the ability to allocate capital. >> the company lost almost $5 billion. the stock is up almost 10% because they continue to grow rapidly on direct to consumer. >> yeah. i think part of that, i think, i would say, is espn didn't expense a lot of its sports costs but those aren't cost savings. those are cost deferrals until the sports comes back. one of the reasons media networks overdelivered at the profit line and almost all the profits came from that is espn didn't account for the sport writes those are cost deferrals to when sports comes back. so --. >> separately, sort of on theatrical distribution, i

noticed this morning walmart is going to turn its parking lots into cinemas from august 14th into late october. and i can't decide if that is a positive sign of adapting to the environment we're in or a sign that true physical movie theaters are not coming back the way we think >> fabulous idea love the innovation. people want to get out but they want to be safe. it would be good if some of the big screen movies could be seen on even in a drive-in context. it would get people to remember how special movie-going is as an experience while they await cinemas reopening. i think it would be good for consumers. good for walmart if they're charging and i think it's a good development. >> are you concerned by the time we get a solution to the pandemic, there could be a weaker pipeline for disney amid the shutdowns they've stalled, done limited types of

production, halted it altogether is there a risk by the time a year, two years from now comes around, people are willing to sit in a movie theater, that there won't be anything to show? >> yeah. i think it's a big problem social on the entertainment side with 14 guilds that have to agree to start up production as you know, both television and film scripted are heavily unionized. if anyone union doesn't want to come back, you can't shoot things easier for films because you can go to berlin or australia, but if you want to do it in the u.s., it's tougher and a lot of tv series are filmed here. i think there's an issue with pipeline for new production that may not be available for -- in the movie theaters to the robust extent it was preco-vid, yes >> finally, laura, while i have you, facebook launching reels. it would be a rival to tiktok in

50 countries beginning today what do you think is going on there in terms of how they view the ongoing developments of what will happen to tiktok and another example of where they're trying to disrupt another rival with an innovation of their own? >> yeah. well, i think facebook one of their core competencies is copying other people's good ideas. let's call it a fast follower. snap they basically stole. and snap, it didn't hurt snap particularly they turned it into instagram. they turned it into a bigger business i think this is them copying tiktok at a time when they are out of favor with the administration one of the problems in tech is really hard to protect your ip not patentable so i expect facebook to build a better business by copying tiktok up front and then figuring out ho innovate and make it more social. longer engagement times and they'll figure out a way to make more money with it tiktok, whether it goes to

microsoft or somewhere else, you know, with microsoft we just saw them shut down mixer which was their competitor to twitch after paying top five twitch streamers enormous amounts of money. and within a year they'd shut it down things can go to microsoft, but that doesn't mean microsoft is committed to stay. if tiktok goes to microsoft, i wouldn't be surprised if it doesn't exist in two years that would be great for facebook >> laura martin on two of the biggest stories of the morning as always, thanks. >> my pleasure the owner of the sacramento kings is next as the nba continues a successful restart in orlando can baseball continue outside of a bubble and who do their stumbles mean for the nfl? his views on the ph rwatfoard on the other side of this break stay with us this is decision tech.

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new information involving continuing talks between microsoft and bike dance beginning to have conversations about the value of the asset according to people familiar with the associations. they may have bracketed values here, but it doesn't mean they're anything near deciding what they think is a value at microsoft or one they're willing to pay and one they are willing

to accept. when you're dealing with only one bidder for your asset, you're not in a great position to negotiate hard. that said, tiktok with its 55 million daily average users in the u.s., perhaps as much as 100 million monthly average users is a growth business, potentially a significant opportunity for microsoft which has been successful of late in the enterprise to move into more consumer oriented xbox is their key entrant there. what they have been dealing with over the last week or two weeks in terms of what they've been negotiating is actually between the u.s. government, microsoft about a period of time microsoft would have to transfer the software code from bytance to microsoft. it's another reason microsoft might be the only company that

could bid for tiktok, because we're talking about what i am told is as much as 15 million lines of ai code alone, and they now have a year after the close of the deal to transfer that code to microsoft servers or what would be tiktok servers here in the united states and move it out entirely of china. have no relationship whatsoever with china at all in terms of their investor base in terms of who they're serving and in terms of the code. that was a key negotiation apparently the u.s. talked about, perhaps as little as six months but it will be i am told a year by people familiar with the negotiations even that could be a significant task you're talking about thousands of software engineers working on a project of that type, and again, not that many companies that are in a position to even do that. so they hope to actually get to a deal perhaps as soon as the next two or three weeks where they deal can with value will it be as little as 10 billion?

could it be as much as what is hoped for in the 25 billion to 30 billion range we don't know. we know microsoft has strong negotiating leverage given it's us or you get shut down. >> they have the leverage, but every m&a negotiation is a dance. usually there are limited partners in the dance as you laid out there are so many partners in this deal to get it done in three weeks. i mean, it sounds like a lot of people are going to be losing sleep. thanks for that. let's get to deirdre who joins us with the sacramento kings co-owner deirdre? >> leslie, thank you he is also the founder of boek capital listing their blank check company today on the nasdaq >> good morning. it's great to be here. >> now, in the past it has proved easier to raise money for spac than putting it to work

what is your timeline to find a company and what makes you confident you'll be able to do so in the one to three billion enterprise range in the tnt space? >> we have a database of 1500 to 2000 companies and we've seen the first deck and the second deck and we've been working with these companies for years. and we have about 150 companies that are spacable. we think that there's a lot of rocket ships out there that are going to need the rocket fuel that spac can provide. >> and what's your timeline? >> well, i hope to execute on it very quickly i hope that we'll have something in the bag in the not too distant future >> explain the dynamic to us a little bit we know that there's been a huge surge in popularity for this kind of vehicle, but what happens if you don't find a company? do shareholders have to approve

the deal where does the money go if you -- >> you have a 24-month shot clock. if you don't find a company during the 24 months the money quo goes back and you lose the risk capital but we feel confident that with the portfolio that we have, that it's rich with companies that are going to seek this i believe that this is a better way to go out than a traditional ipo. the new generation of entrepreneurs is similar to the last generation. i was friends with guys like steve jobs and they wanted to move quickly. they wanted certainty both in terms of the deal getting done and the prize. and most importantly, they were great story tellers. steve jobs was a great story teller the new generation of great entrepreneurs they are great story sellers. with an ipo, you can't move quickly. there's no certainty and you can't tell the story or the narrative. with the spac, it's an s-4 as you're merging when you despac

you can tell the story and you have certainty the deal will get done and also the pricing. you can project future financials i believe over the next decade, there will be a trillion dollars worth of equity through the spac platform >> so it won't just be in times of market uncertainty and economic uncertainty you think spacs are here to stay for the long-term? >> i believe this is the way forward. i believe that the best companies are going to choose this as the way to get out what co-vid has done is as tragic as it has been, it's also been an accelerant we're now in 2023. imagine the world, what it would have looked like in 2023 that's the world we live in today. everything is happening at lightning speed. companies are going from zero to a billion in lightning speed, to one from five in lightning speed and they want to be able to get out and take advantage of the public market much faster.

i also love what's happening, because this is democratizing access to the great companies. it's not just the domain of the privileged few who own companies like airbnb and uber through the spac we get out quickly and the public can have ownership of the next generation of great companies >> you mentioned for the right kind of company amid the pandemic, there isn't trouble. there's quite enough access to capital. goldman sack estimates that completed spac offerings currently searching for acquisitions exceeds more than $38 billion. so some would argue your spac at $410 million isn't enough to do a meaningful deal when you're seeing valuations rise for the type of companies you're looking at what do you say to that and what kind of verticals or regions are you looking at >> actually, ours is 480

i think it's the perfect size. i think that the great companies, the a-plus companies, the companies that have rapid growth, they're going to be valued in the $5 billion range for those companies, this is the perfect size spac. you can also add a pipe on top of that. we have blue chip investors who are supporting our spac andwit the pipe you can expand the size of the deal. you don't want the spac to be too big. then it causes delusion. so this is the perfect size. it's kind of the goldilocks zone for the a-plus companies >> while we have you, i hope you don't mind a couple questions on sports it appears, silver had to make some very bold calls in creating the publ it does look like it's paying off. what do you think so far, at least? >> yeah. well, i am in orlando. i'm in the bubble. other than having to get tested

once, devitwice a day, i think fabulous i was part of the sub committee that shaped what this would all look like. kudos to adam and the rest of the nba. it's been successful so far, fingers crossed. >> do you think it equates to a case study for other leagues others have tried different logistic models that look for wobbly is it too late to change them? >> i think the nba has always led in terms of the lights off, and we have the best leadership in sports i believe under adam silver and the other folks so i think if something is working, why not look at it and why not take the good ideas from it i think they should copy some of the models we've adapted

>> it seems everybody has a spac and a dream. it's funny talking about sports. billny bean and others have a spac that may try to buy something having to do with data and sports teams divi do you think they'll be owners given the pressures in the nba but other sports that are looking for liquidity and might even find a spac an interesting way to go? >> absolutely. i think european soccer clubs and maybe even teams in the major leeagues over here. you get liquidity and a currency if you want to expand your business you democratize accessibility. there's a limited number of top tier soccer teams. and everyone wants a piece of that so i do believe that this is the way of the feature even for sports teams >> i'll take the last question

and i'll stay with sports here i just wonder would you have participated, would you let your team and players participate in a league that was not in a bubble, and so i guess i'm asking is it responsible for other leagues to have their team travel and put their players at risk >> well, we put a lot of emphasize on ensuring the safety of our players in fact, we believe that statistically you're safer in the bubble than you are outside the bubble that's the bar that we set that you should feel safer inside than you would in your own home so i do think that it's a responsibility for the leagues to ensure that kind of standard if they want players to go out there and play >> i thank you for chatting with us today we'll be watching and talk to you soon, i hope >> thank you a market flash now on

cruiselines. seema has that for us. >> david, some news. cruise lines voluntarily suspending cruising and sailing again, not returning to service now until at least october 31st. now, this likely reflects the lack of progress in discussions with the cdc to figure out how they will cruise in this environment before a vaccine is made available the cruise industry delayed sailings twice they were supposed to start august 1st and then september 15th and now they're delaying it to october 31st which means the cruiselines will continue to burn a lot of cash over the next coming months and will continue to operate in this zero, no revenue environment we're looking at the cruiselines which were up by around 4% to 5% on the day now trading at session lows. and the year-to-date story tells a story when you look at where the cruiselines are trading. back to you. >> we'll see if any of the halloween cruises take place

in the meantime, time now for our etf spotlight. taking a look at the technology sector, spyder xlk up over 20% in the last three months since the start of may. helped along by apple. apple makes up nearly a fourth of the xlk and is up more than 40% over the same period getting a rare downgrade this morning over at bank of america. the analyst behind that call joins us next to explain

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welcome back here's your cnbc news update across the eastern seaboard at least six people died and more than 3 million remain without power in the wake of isaias according to the to the a website power outage new jersey has nearly a million power customers still in the dark the global death toll for the pandemic has risen above 700,000. the u.s. has the most confirmed cases of deaths with nearly 157,000. brazil has the second highest number of fatalities with over 95,000 some of whom have been burlied in mass graves -- buried in mass graves chicago's 350,000 public school students will be taking all of their classes job line. the mayor sighs the city hopes to move to a mix of in class and remote learning in the second quarter of the school year chicago is the third largest school district in the u.s

you are up to date that's the news update this hour i'll see you in an hour. "squawk on the street" continues in a minute.

our next guest downgrading apple rising the stock price we are joined now. why did you downgrade to a neutral? >> sure thing. good morning thanks for having me let's put context around this. right? so we grappled with the question of why now back when we upgraded the stock at $170 back in march of 2019. that was a time when sentiment was negative valuation was trading at ten times x cash there were china tariff issues and people felt like that was the end of the one apple had now as we look at the stock here, 15 months later, the stock is up $440 valuation is trading at 25 times

x-cash to get even a 10% up side on the stock you need to get a 29 times multiple on this earnings stream of $17 which is somewhat subject to the success of the iphone cycle. but also services maintaining the trajectory and we think these are risky resumptions in the macroeconomic environment. we think many things could go wrong in terms of the services margin trajectory which is not am mortizing all the content the mix of what's been strong services margins likely to decelera decelerate we think the 5g cycle, we think it's well understood by investors but there's a risk on the gross margin side given the fact that the building materials is a lot higher. i think we're very sensitive to the risk profile of the company. we think the risk is quite balanced at this point from both an up side and downside

perspective. >> hi. leslie picker here i'm curious. last week after apple's earnings you reiterated your buy and wrote about ten exciting things to look forward with apple i'm curious in the last five days or so what changed for you? is it largely due to this expansion of the multiple or have you learned something that you think is different from that thesis to today? >> so when you look at sort of post earnings to now, what are the things within earnings and post earnings that caught our attention the most i would say number one, this was a first quarter where services actually decelerated quarter on quarter. when you look at the underlying components of that, some of it is high margin google licensing issue. apple care which will continue to be a head win for several quarters and the strength in the app store, we don't think lasts. this came out of earnings. the strength in the quarter was

really driven more so by the cyclical elements, not the secular elements of growth this was a point of concern. as you look at the 10q that apple released a day later, apple is price sensitive to buying back stock. in april there was a lot of uncertainty. apple did not buy back any shares in the month of may they bought back about 40 million shares in june, 10 million. i think there is an element of price sensitivity clearly. we are price sensitive we look for opportunities where the market price has dislocations in the at 170 we thought this was a bargain at 440 we don't feel the same. there is a big difference. the stocks went up $60 over a matter of a few days and that changes the way you look at things and the way you assess risk i think that would be the biggest change here. >> wamsi, it seems like your concerns come in layers. there's the gross margin, the content cost am mortization worry. but then you add another layer

involving ongoing co-vid pressure china risk you talk about higher taxes that the democrats sweep. how would you characterize the last tranche >> i think these are all decent probability events people are making assumptions on the $17 of earnings for next year based on the fact there's going to be a good iphone cycle. margins are going to hold. demand is going to be sustained through co-vid the fact that china is now sort of something that we've forgotten about from 15 months ago as it pertains to apple. there's an element here that we can't really disassociate the earnings stream from, and the riskiness of this is what gets us concerned the that is correct these are all nonzero, decent probability events that you either factor into the multiple or you mac or the into the earning stream. right now investors are basically saying we're going to

give a free pass to any of these things, until they transpire which is fine, but that also means you're -- it's going to be too late to understand what the financial impact of that is. stock can correct from a multiple standpoint quickly, especially when you have a growth multiple, the multiple where it's rated now to where people are into staples territory. but you can't argue for this to a visa mastercard territory given the profile of the growth rates and so i think that we can't sort of disassociate ourselves from the risk entirely, and these are important factors to consider when you think about the 17 which are going to -- 3% in tax rate i think it's key to sort of assessing what the likelihood is of apple really printing $17 which is where i think the expectations are on the heels of a strong cycle >> wamsi, well stated. appreciate you taking time

thank you. >> thanks, david still ahead, the co-founder of vine on microsoft's potential deal for tiktok. will other big tech companies make a bid for them or will it get banned in the u.s. after the break. businesses are starting to bounce back. but what if you could do better than that? like adapt. discover. deliver. in new ways. to new customers. what if you could come back stronger? faster. better. at comcast business, we want to help you not just bounce back. but bounce forward. that's why we're helping you stay ahead and adapt with a network you can count on, 24/7 support and flexible solutions that work wherever you are. call or go online today.

is tech tapped out or can the group scale to new heights rick sherman gives his take on

trading nation resqwkn e re" mo "ua othstet coming up.

bringing together these two companies is the next step in creating a paradigm shift in what people can get from virtual care regardless of what their clinical condition is. i think it really has the opportunity to be that destination for consumers no matter what they're looking for in health care >> a large deal from this morning, of course, largely made up of stock. although, there was $11.33 cash component. i'm talking about teladoc buying livongo. not a great response teladoc shares down significantly. that overall impacting the value of the overall deal. it was 5.902 shares of teladoc both the stocks have been market ships. particularly livongo

they went public only a year ago. teladoc benefitting. they'll get together and they're talking about as much or more than $500 million in revenue synergies over the next five years. we had both ceos as you saw on with us this morning but at this point, leslie, not the response perhaps they'd hoped for, although neither of their shareholder bases has anything to complain about right now given the respective moves in both the stocks over the last year >> you're right. it's interesting to see both share prices decline on a deal this size. and with the structure you laid out. i think it's interesting to see these two companies come together, especially deal-making in this environment has been difficult these two companies, of course, are beneficiaries of more people turning to the internet to do things they normally would have done in person but to your point, they've --

the stocks have run up significantly. so it's -- i guess on that, from that standpoint, it's not too surprising people would maybe look to pair back their stakes a little bit but dramatic with teladoc down >> if i'm the ceo of teladoc and you mentioned, well, it's our pressure that's a typical answer as well. we're going to see some pressure from risk entrepreneurs. that's not the case, although there is some of that going on right now. we do short the acquired stock for the spread forgot to ask if they negotiated enti entirely virtually but leslie, things are happening in m&a despite the constraints about being able to put people in the same room >> you're right. there's been pent up demand for deal making when everything shut

down in march, people said okay, we'll wait this thing out. give it a couple months and restart talks when we can visit in person. it's been more than a couple months, and people are realizing deals can be done over zoom. the challenge is a lot of the deal-making being done are with companies that are kind of benefitting from this environment. and/or more on kind of the distressed side of things. that middle ground is -- it's hard tore get deals done, especially amid the uncertainty. so it will be interesting to watch the space and think the second half of the year could provide more use on that front i know you'll be all over it, david. a new report from the new york fed outlines the dramatic impact on block-owned businesses as several prominent ceos and business leaders urge congress to provide more relief to struggling small businesses. valerie grant joins us now hi, thank you for joining us to talk about this important issue

today. >> you're welcome. it's wonderful to be back here to talk about this study in particular >> there's shocking statistics black small businesses have been almost device as likely to shutter as small businesses all over due to the fact that black-owned businesses are largely in co-vid hot spots. ppp, the government relief program left coverage gaps on that front and then also that the black-owned businesses came into the crisis with weaker cash positions which made them more prone to shutting down when everything closed. so my question to you is for the people who are investing out there, what can they do? how can they use their money to help close this gap as a public market investor if this is largely a small business-related issue? >> right i think that's an important

lens most people are invested in the public equities y, the liquid markets. but the issues you described relate to small and medium-sized businesses so as i look at what large cap companies can do, so the companies in which we invest, i think there are some lessons here we've all seen the pronouncements coming out following co-vid and the cries for racial equally and it's a bit of a hodgepodge. there's a lot of announcements that are philanthropy. there are announcements about diversity and inclusion and scholarships and a host of things in terms of things that move the needle in closing the gap for small and medium sized businesses owned by african americans, you have to look for initiatives focussed on a company's business operations. i'll give you specific examples. as you look at papy pal, they made a commitment to support minority-owned businesses. they planned to work directly

with community-based lenders and invest directly in black and minority-led companies and one of the things that was mentioned in the fed study i thought was interesting is black-owned businesses had a higher tendency to use online sources of capital i think it will be interesting to see how some of the fen tech players can be a source of capital to undercapitalized black-owned and small and medium-sized businesses. another example is facebook. many people don't realize that facebook primarily serves small and medium-sized businesses. many people think about what they do from a consumer facing perspective but the reality is the real customer in terms of the companies that are buying advertising on the platform whether it's on facebook, instagram, or whatsapp are small and medium-sized businesses. facebook announced a $100 million program that will

provide grant us as well as credits for advertising to small and medium sized businesses and 20% of that fund will actually be dedicated to businesses owned by women, minorities and veterans and then finally, the example that i think is really most striking is from pershing square capital led by bill ackman a well-known investor. he launched a $4 billion ipo for his special purpose acquisition company. instead of the usual practice which is to allocate a very, very small allocation of the ipo to minority-led firms he allocated 20% which means that those firms thapar tis pated in the deal had an opportunity to really participate fully and generate the fees and the revenues associated with their contributions. and he was actually quite congratulatory because what he found was that the minority-led firms actually expanded the

investor base for the ipo. so they were able to reach segments of the investment market that some of the bulge bracket firms are not able to reach. those are three specific examples that i think really speak to how this issue can be addressed. >> to that point about the special purpose acquisition company that bill actionman raised, we did analysis and found that $0.12 on the dollar is usually what those minority-owned firms will generate compared to other smaller underwriters on similar ipos and we interviewed as part of that one ceo of a minority-owned firm who said that the practice of doing so gives the illusion of diversity without meaningful inclusion in the fee pool. as you see statements from ceos across corporate america, do you think that they are doing enough in terms of meaningful inclusion? or is it similar to the

perspective of the minority-owned broker who said that it kind of gives more of the illusion without really putting your money where your mouth is >> i think that it varies widely right? and so, again, as a portfolio manager focussed on responsible investing, part of what i view as my job is to actually assess what companies are actually doing from a measurable perspective. right? if i look at the dollars committed, i mentioned $530 million at paypal. 100 million at facebook. part of what i plan to do in the year and years ahead is say how much of the capital has been deployed where did it go? did you generate a return or an roi? do you see this as something that's a sustainable business opportunity for you? is it going to help you grow your markets and are the firms

you're targeting benefitting as well that's the nature of the kind of question that i tend to ask as i'm looking at the initiatives and trying to dig behind the headlines. >> i think it's important to ask those questions and continue digging. we think you valerie for joining us >> thank you for having me.me. take care. meantime, dow is up 300 as we go to break, take a look at monster beverage today, all-time high, earnings above expectations up beat commentary on the impact of covid-19, saying it does not expect any shortages to the supply chain, nor will the impact liquidity one of the top 15 ins gaeron the s&p. "squawk on the street" is back in a couple of minutes i hope my insurance pays for it. can you tell me how much this will be? - [cashier] 67. - sorry. - wait, have you heard about goodrx? goodrx finds free coupons to help you save up to 80% on your prescriptions.

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welcome back to "squawk on the street," i'm dominic chew. the rally continues on with the u.s. major stock indexes led by the dow 5 pst. the s&p is up .6 working on a four-day winning streak led by economically sensitive or sickly car sectors like materials, energy and financials as well. consumer, staples and real estate now a lot of what's happening here with the movement in energy is due to rising oil prices after data from the american petroleum institute yesterday and the energy department this morning showed bigger than reduction in oil inventories exploration and companies apay chee and diamond back energy among those stocks leading that sector higher so far today keept ghhe irit re "squawk on the street" is back in two minutes

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to our defense we are prerevenue we told everyone that we need until the end of the year. people to like understand that we're not a revenue-generating company yet, but we're coming in like a freight train that's why people are excited to invest because it's like getting in early or way early on on tesla. if we were building 1,000 trucks a year, we would be 2 or $300 a share. you get in early and get the benefits of the rockiness or you don't. >> that's trevor milton. of course, never short for words to at least give a sense as to his expectations for the company. very different, though, from his ceo and cfo. he says he likes it that way

conference call yesterday, leslie, they were very tight lipped and frustrating to some of the analysts who were focussed on that of course, we've been focussed on nikola since it went public sometime right before people recall they announced the deal before we hit the lockdown of the pandemic and the stock has captured a lot of people's imagination, despite what are, of course, as trevor points out, and he is a unique, voice, no doubt about it, points out that our aspirational goals he believes will be met and met fairly soon. saying as well during the interview the next four months will be crucial and the most exciting for his company, he believes. >> no surprises here, he said, we are pre-revenue company normally if your goal is to get in early at a company, you would do so through some sort of an angel round or venture capital round, private round obviously the whole special purpose acquisition company vehicle allows for more of a

democratization of that. that said, obviously a pre-revenue company, you know, unproven business model, so to speak, is inherently riskier you have seen a lot of momentum traders get in on this you ask him about the robinhood traders and the impact on the stock as a result of that. and we have seen momentum to the upside today and seeing momentum to the downside. that's something that a lot of people looking to invest especially with newer companies, they're going to have to contend with that issue. >> yeah. well, as we've said and i said earlier, everybody has a spac and a dream at this point because everybody has one. if you don't, you're going to have one and wall street is happy to underwrite the offerings themselves which are just the blind pool of capital that will be used potentially to take a company public at some point in the future. nikola, he makes the comparison to tesla but it is a somewhat different business model, having the hydrogen stations, in a sense, anheuser-busch, of course, the one name they have

come up with so many times which would pay them a fee essentially to have their trucks operate on the network, saving everybody money is the idea, leslie. but it's going to be fascinating. he's such an interesting guy to talk to. refreshing if nothing less in terms of his willingness to entertain any and all questions and just speak very openly about his hopes and dreams carl, over to you. >> all right, guys thanks very much david and leslie good morning, everybody, welcome to "squall alley i'm carl and zwrul ya risk on. banks, energy, industrials with 1% gains, dow up 300 session highs. s&p, mike, really a stones throw from all-time high of 3393 starting to come within sight. you can't look past disney today. 10% move and by far the best dow component of the morning >> yeah. i mean, disney really encapsulating a lot of what's

going on which is the market willing to give high quality companies credit for navigating through this period. companies having a higher floor than perhaps was feared in terms of what the trough earnings were going to look like in the second quarter. of course, massive annual declines in parts of the business for disney, but basically the market is holding up the valuation because financial conditions look good and they have a plan and obviously the growing parts of their business, the newer ones that they're investing in continue to grow faster than people even hoped. so all that stuff working together clearly $150 stock eight months ago. so it's not carving out new ground, but it's definitely more of a glass half full-type story in terms of that response. and that's something that i guess we see across the markets to some degree and julia, i do think also on the cost side, too, disney is seen outperformed what the streak was looking for. >> yeah, absolutely on the cost side i think the investors didn't