local ordinance, and we can manage the relationship, and it will yield to a profitable process, but this is a long term play and we're very bullish on where this is going to go. you mentioned peloton, they also demonstrate the demand for fitness accelerates. unfortunately there will be some that won't survive physically. but ultimately the physical and digital coming together on the other side will be very profitable >> congratulations, and good luck with the reopening efforts. thank you, it is good morning, it is 8:00 a.m. at oracle, 11:00 a.m. on wall street and "squawk alley" is live ♪

>> good morning, carl has the morning off. we want to focus on the state of mna in tech. there has been swings and others that were formally the prey have skyrocketed to valuation that's now give them currency to join the hunters. between tiktoks impending sale, we're seeing now in the second half of the year there is plenty of action still to come.

listen to what bob peck told us yesterday on that front. >> if you go back to march, it was about two billion. so really it ground to a halt. you saw in june, and it has been a tale of two cities a big acceleration and 3 q over 2q so you have seen a ramping here. people are getting more of a feel on valuation, liquidity concerns, their portfolios, s a strategic rationale and more mna continuing to take place through the rest of the year >> tiktok is the most talked about target president trump saying he will not extend the deadline. oracle is on the hunt to buy it,

they didn't talk about it at all on last night's earnings call. we have more on what all of that might mean on this potential acquisition. >> that is right, oracle reporting beating and pleasing investors going into this stock. it was up about 10% this year. now hitting a fresh intraday all-time high and up nearly 50% from the march low i caught up with patrick moorhead he says this could be larry ellison's told you so moment saying they just showed strong growth in the software and services that manage among other things a company supply chain they deplete with sap and oracle does seem to be securing deals

here is the call >> as i said previously and only briefly interrupted, our fix of business is favorable. our growing businesses, our growing factor, and are now larger than our declining businesses >> of course the other big question is oracle's interest in tiktok's u.s. operations they declined to discuss the bid on the earnings call, but this company seems to have a unique relationship with this white house. larry ellison is a very rare silicon valley executive to openly support president trump >> great set up, josh.

david faber, no one knows mna better than you. what do you think about this situation with tiktok and what will happen from here? today they're saying they're not going to move it, but things can change >> i wish i had fresh reporting for you to give you a sense as to what both buying groups are thinking right now and what the potential seller is here led by bitedance. but i said this earlier on "squawk on the street. the degree of difficulty here seems to be very, very high. if you're microsoft in it's group, and the partnership with walmart, or oracle's group as well, so many different things that you're dealing with what is the impact of the chinese potential ban on the export of artificial intelligence you're talking 15 million lines of code here much of it is ai

it is one of the reasons that tiktok has become so successful. you know better than i do what that means, john, but continuing to give it's users something that keeps them engaged. you need to get that code. you need to have the updates at least it would be for one year, but if the chinese will not allow that what are you really getting and how do you actually deal with it. not to mention you have a siloed u.s. business. what is that worth to you if you're microsoft or the oracle lead group so it is very unclear. we have the other national security concerns saying it is a september 15th deadline if is hard in these circumstances to get a deal done. doesn't mean it won't happen, but you will have to threat the needle on this one. >> right, david, and you don't just need that code. you also need to be able to

innovate and they shut down any kind of conversation they said we're not going to do anything about this. we didn't even get clues how it would run a consumer facing company that relies on advertising revenue. i don't think it is particularly clear that microsoft would be able to innovate in this space yes, handle it take it over, continue it's growth, but it is such a competitive space. you need to continue to give them new features and bitedance has been really good with that secret code. we have the instagram ceo on "squawk box. and he said people think they're sitting back and watching all of this with glee, he said it would be a bad thing for technology because you would get a buy f

bifurcated internet. so what happens to the internet at large in the world if you get a further fragmentation give whan is happening in the united states and what is happening with companies in china. >> so investors continuing the conversation, no one better than the former oracle executive zach nelson acquired back in 2016 as well as the youngest vp of marketing you also have to be on the board of pagerduty i see the t-shirt that you're on we had jennifer on last week nap is a company that is in the smaller size in the enterprise

space right now. we seem to be going through another period of consolidation. what kinds of companies are on the radar at a time like this for these megacap that's have high valuation and lots of cash jingling around to spend >> i think everyone's valuation is high. it is hard to imagine being valued on the revenue. i think most companies growing fast have high market caps, it is hard for them to be bought at this point >> we're seeing that activity ramp up. so the deals are happening sometimes when the smaller

company doesn't necessarily want it, historically, we remember people soft. to what degree should investors think about what big companies need more than what the smaller companies might want to do >> i think investors have to look at what they acquired or spending on smaller companies. if you look at oracle they made a pretty aggressive transition to the cloud so they have done many acquisitions in the marketplace. they acquired net suite that opened up new markets. i think you're looking at technology acquisitions. you're also looking at market expansion. it was not really acquiring technology to help their internet customers out

it was creating a marketplace where they didn't really have a footprint and now they have an enormous footprint >> talk more about your experience then, did this have to keep the culture in tact? do you think it would be able to do that with a tiktok, for example, to continue the culture of innovation? >> i think when you move into a new marketplace like oracle did, you have to keep that culture in tact it is different for the market model. the traditional model was selling to the fortune 500 net suite sold so the culture was substantially different and i think what oracle did, in fact, was keep the company entirely separate. it is a development team, and you have to keep it separate

i think it is not that unusual i think they are moving down market the next step down market is very small businesses that behave more like consumers so i think if you look at market expansion there are ways to look at tiktok as a move down market. >> all right, zach nelson. founder of board suite, thank you. david faber, i keep hering in my head what bob peck told us about the stabilized valuations. despite what zach was saying the fact that maybe they're not continuing to expand at as ridiculous of a race seems to be leaving a door open for the big companies to start buying, right? >> i suppose so. if you're a buyer at these

levels you're going to be concerned if your stock is not similarly valued let's not forget it is not clear that all of these would be car deals. you might look to certainly use your ore valued currency what you won't see is stock not values nearly as high. that wound end up being i d delutive scale is certainly extrimportan. is there a willing nm for company that's unless you have the car insurancy to back it up you won't see it as much as

people think >> i do think that things are picking up don't get my wrong i hear it from many of the bankers. it's not like march, it's not like april, and things are getting done over zoom >> yeah, and the zoom road show is here to stay. that company trading at $25 a share. that is pretty close to preference price into we'll certainly see if that appetite continues and who might be candidates we'll leave it there for now take a look at our mystery chart this morning the stock has tripled since the start of the year. they just reported their first profit ever this quarter and shares are surging today, they're up another 3% this morning. we will tell you it is, and hear

from it's ceon to he other side of this break. stay with us

we have grown 100 year on year we didn't just do this because of covid >> that was peloton ceo john foley here earlier shares have triple ld since the start of the year and they are up again they are coming back rather

dramatically from what was shown to be a doubt digit gain free market this after reporting what was his first ever profit. our next guest has a buy rating on the stock, a price target of $120 he is talking about this being a secular change it will be different for peloton because people will be working out of home, forever, i guess he is saying. >> i think you have a shift that was already well under way it was a preference to work out in the home. the only thing lacking was the digital infusion the pandemic, all it has really done is accelerate the shift in the preference that i think consumers will althoughly have, at least the good majority of them, to do more of the activity in the home.

and for many it is more of a private activity than a public opportunity. i think this is a secular growth story. it is not anything really related to this event. >> is there going to be more catalysts for the stock, international expansion, whether or not it is new entrants of some kind, what are your expectations beyond your ability to increase their installed base >> they're exiting fiscal 20 the connected fitness prescriber number it is going over two million and go to seven million by 2025.

this company on a smaller deal is falling to a similar trajectory to what netflix did with media consumption they get us from a to b or one to seven million subscribers they're only in four countries now. the business will be global over that time period they have two skews in the market now they are becoming four here shortly with the new tread and the higher end bike. i anticipate that the company will also enter the strength category with hardware as well so you have the adoption curve, the shift of houds of tse it is netflix content advantage. a subscriber base that no one has, they have the same impact

dynamic with the talent they have >> we heard from the equinox ceo and he says he wants people that have a combination, a hybrid, and a fitness app to complicate that, and does peloton's wins here come at the expense of these brick and mortal gyms? >> so just like the development of shopping online for general merchandise and purchasing vehicles, there is always going to be a place for the physical attraction of gyms it is just predominant growth that will come from in-home fitness. the hybrid model, if executed flawlessly, could work quite well but legacy providers in the

other industries that i mentioned tend to shift very slowly as we're shifting they tend to be significantly ahead of them they want to be with product and with the offering over all i wish them well i'm sure if t wit will be a pose product in the market. that is what i see here in the future >> let's talk strategy and potentially mna which we have been hitting on quite a bit. it has a valuation around 25 billion, that is more of a software company level valuation. right now it is more of a hardware company and media company than software. do you have a sense they could

stand to beef up in the software area or even that they're looking to do that >> there are certainly tuck ins for maybe bolting in an additional product i find that to be highly unlikely they are best in class and they will grow into the valuation but you industrial a healthy model in the stock and rather than what you're determining, the company being inquisitive, it being acquired itself this is a broader effort i would say they're a likely

seller at a crisis near hear, but if it is going one direction or the other i can see a large global platform company. >> cohen taking adobe on a price target from $400 up to $555. that is all as we head into earnings next week where you can catch it right here on "squawk alley. we'll be back in just a minute before money, people traded goods.

tools, cattle, grain, even shells represented value. then currency came along. they made it out of copper, gold, silver, wampum. soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. that's why it's time for digital currency

and your investment in the grayscale funds. go digital. go grayscale.

the founding principal at p-tec. students are getting practical on the job trains. ibm has been working and has a plan to scale it to reach more young people >> question knew itwas more about one school of having the opportunity. it was about how do we reach every state in the nation to have that pipeline of high

school, dean, and accessibility. to know they could interact with industry and college if is incredibly important that commitment of the public and private partnership is still there. that is whateveryone should take away from this. it is hard work and we can make the growth a reality for every state in the nation. >> you can rewatch the full event. we're going to take a quick break, don't go away, we're back in two

♪ for skin as alive as you are... don't settle for silver ♪ gold bond champion your skin

welcome back, i'm sue her a herera western washington state is under an air quality alert

through monday the national weather service urges people to stay indoors and if you're outdoors avoid strenous activities. >> a quarter of americans aged 1 18-34 rate their mental health as fair or poor versus 13% in older adults a shooting of an us autisti teenager and hyundai telling owners of 280,000 suv owners to park outside because the car could spark an electric kal fire even when off

sue, thank you for that. it is time for an old fashioned "squawk alley" feed. but today it could be called "reading jason's twitter feed. he is out spoken and controversial. he is back with us, and jason, let's start with one of these tweets, peloton last night, a prediction they will launch or buy three new products in the next three to five years, grow tenfold, doesn't apple want to become the apple of gyms as some speculated >> i just wanted to say on the 9/11 anniversary thank you to all of the families that made that sacrifice that day and specifically my little brother, josh, who retired this year as a firefighter. his second or third call as a firefighter from williamsburg

was 9/11 a lot of time has passed a lot of firefighters made that sacrifice on 9/11. putting that aside and making a hard shift to peloton, i'm a huge fan of this company i think it has penetflix like potential. i think they will launch six or seven producting there are two that a super obvious. that is a rowing machine, it is an easy acquisition for them to make, but they will probably just build their own, it will be easy to build, and then there is a unit called tonal. also i'm not an investor in that company, but i'm addicted to that product they represent essentially the end of a company like equinox or any of the gyms. they made a product that is such

a valuable pros suggestion it is a peter product and experience but also a value. they're all in the $1,000 or the $1500 range. i had the original tread 2 but at $2000 to $1500. they will have a weight system, and they will have like a mirror type por grant panel we'll see them go to ten million. i have not personally bought peloton has a stock, but i am going to start buying it i think it will be a correction at some point, and it is really got tail winds people are leaving the cities and having larger homes as well. there was no way i could have

one of these machines. >> you don't buy one of anything you have multiple teslas -- >> i have one of each now, yeah. >> so you say you expect a peloton to come out with multiple new products or acquire them when you look at tesla's valuation, and you look at the currency they have, what do you think would be smart i was pushing on the software and beyond just media driven services people want to compromise their spe exercise experience. >> that is a great observation, jon. robot and tonal, they were easy to buy they have like an apple vibe so it would be very smart for them as a blocking strategy, i

think, to buy tonal and ro pot now. so i would do it as a blocking strategy and then we invested in a lot of private companies. calm.com, a dance a, and fit bod, a cross fitness app and all of those businesses are doing tens to hundreds of millions in revenues so i think with the movement you will see a lot of those go public and who loses? that is what you have to ask where is the money coming from i think this is the new cable tv, dvr, pc, every home will have them. when you look at how brilliant the peloton has priced this, when i go down to my peloton now, i see my wife and i logged in, i see my parents, my brother, when they come to spend time with me and they have accounts now we call this real word viralty over the shoulder viralty.

you take an uber with someone and then you download the a. i think customer acquisition costs will go down and the prices for the hardware go down, and it is about serve and you get a subscription >>. >> they have a ways to go with pricing to be in every home, like cable or satellite tv, but but i want your thoughts on nicknic nikola >> you have a term, too-soon-a-corn. you say they're either going to fail or be a fraud this is a response to hindenberg

of being the latter. what is nikola here. >> a $12 billion aluation, i should add >>. >> i had trevor on my pod cast, and he spent an hour and a half on the pod talking about their plans. there is a possibility he will hit some of the targets. i don't believe that companies should go public with before they're ready so it is just, it is a red flag for us in the valley it doesn't mean that it might not work out i think what investors need to

know is that they're paying a price that is 100 times what private company investors like myself pay that have the same level of market fit. that is possibly worth a few hundred million, so this new revolution that we have, i would just caution people. someone like that will put out a certain type of product and you know given how easy they are, we're going to see a lot of inventory that might be questionable only invest what you can afford to lose, folks there is a lot of red flags, the product is not out, and i'm not sure that he figured out something that elon doesn't

already know in terms of 10x, the cost savings, claiming what it would be to make it cost ten times less it just feels kind of suspect to me that doesn't mean he is not going to pull it off i would not say they're a fraud, by i would say be very cautious so that is two red flags that you should know there as a retail investor. >> we have seen the proliferation they will talk

about it, an auto analyst, it was his and he pulling in jeff lubin, also a very credible investor, but to your point it will be very interesting to watch. it is different, isn't it? he has an idea, but he is not necessarily manufacturing all of his own stuff and creating his own technology to a large extent so it does differ. but it was enough to get gm involved, at least, to the tune of taking at least $2 billion in stock. >> these spacks are inspiring o one side we want to see retail investors invest in uber or air bnb five years earlier than they did. we would like to double or triple the number of publicly traded companies and have more choice and competition there that would be good but i think people need to shift

gears a little bit and ask themselves just because it looks like tesla doesn't mean it is tesla tesla has an engineer at the thread is the most brilliant of our lifetime i think that is a good argument to be made there i'm close friends with elon and i have known him since before tesla even existed >> he is a great promoter, too >> yeah, and he produced more cars >> it's not that he has not shared hi shared high hyperbole in the past >> at this time i don't think that tesla was worth $11 billion, and it was not trading hands. he was negative $10 million and he has been public about living off of a loan from a billionaire friend that was giving him $200,000 a year to keep him alive. so this was a very different

situation. the fact that trevor took money off of the able to that was a red flag for me. i am starting to feel like it has that dot com feeling when you go to the gas station and they ask you what to buy, they have promoters that are questionable and i think they're looking to flip companies. >> i'm hearing the righteous brothers, with a remake here >> jason, thank you for the outspoken thoughts we'll see how the 2.0 spack turns out. >> as we go to break, shares of

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webefore money, peopleg a way tools, cattle, grain, even shells represented value. then currency came along. they made it out of copper, gold, silver, wampum. soon people decided to put all that value into a piece of paper, then proceeded to wave goodbye to value, printing unlimited amounts of money as they passed the buck to the future. that's why it's time for digital currency and your investment in the grayscale funds. go digital. go grayscale.

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if you caught the game last night, you may have seen the new safety precautions that the nfl has instated >> the night started with both teams meating at mid field, linking arms, it earned them a smattering of boos at arrowhead stadium. they're one of just a handfull of teams starting the season with fans. their attendance last night was around 16,000. that is less than a quarter of full capacity. for teams that spent billions on new stadiums it's likely that no one will show up the rams and charge rs will

share a $5 billion cutting edge facility in las vegas. they announced they will have no fans all year. other changes that you will see and hear, starting with virtual crowd noise. covering up empt look for cardboard cut out fans like we have seen baseball do this year. this week microsoft announced it's working to provide a fan mosaic it's a live feed of team specific fans on an led screen look for teams to get creative in fan engagement. the dolphins have set up a game day theaters allowing fans to sit outside the stadium to watch fans in socially distant manner, of course. the big question with all these changes, will fans still tune in throughout fall. we got a lot more sports vying for their attention. we got the election and the streaming services the nfl has more competition for eyeballs than a year ago >> thanks.

one device on technology front that got a lot of attention last night wads the social distancing and contact tracing bracelets that players and staff are required to wear the ceo of the company behind that innovation joins us now good morning >> good morning. thanks for having me >> this is interesting because your technology kind of is good for on the court, being able to tell where players are and how they are interacting it's also proven to be of interesting use during this time how did that come about? >> the technology has been around for many years. we developed solutions for the industrial and sports world over the last few years now, the safe zone technology is designed not only for the court or for the field, for the

players. it's designed to be used everywhere anywhere where people meet or congregate large manufacturers, thousands employees can use the technology but also in an office setting or in colleges or universities. whatever people meet, we are able to implement the technology >> earlier this year we talked a lot about the promise of an apple/google partnership they were going to create contact tracing technology and every one could use it because they would have an iphone or android phone. why do you think that hasn't taken off and why does the nfl have to rely on a new product, a bracelet rather than the phones that every one already has in their pockets? >> very good question. there are many aspects to consider here. the first thing is the safe zone solution doesn't only do contact tracing but also physical

warning. basically, it actively warrants whoever get too close to someone else that happens with red light flashing or an audible alarm on the tag itself the function ensuring physical distancing is something that phone apps that does contact tracing do not provide that's first thing the second part is the nfl and all of our clients are considering safe zone because of the data quality that we provide. we use an out door radio frequency technology that make it possible to get these contacts really in realtime and in a very accurate way the data quality is really important when it comes to ensuring or detecting contacts of six feet. that's why our technology is extremely more advanced than any phone app out there that chooses

standard technologies like bluetooth, for instance. another aspect that we shouldn't ignore here is the data privacy. the phone apps and contact tracing that collect personal data on the individuals and are able to track the movement this is something we don't do with connect on safe zone and that's why when we design the technology, the data privacy wasn't very important aspect to consider >> that was my question was about privacy. also security because you have a great deal of data here that's available. what concerns have you dealt with in making sure you keep it secure and those who perhaps have less good intentions out of your networks >> absolutely. you look at the solutions that connect on development in the

past, the sports solution that connects data about movement of athletes and the industrial world to increase their efficiency all this data is a very sensitive and confidential data that no one wants to have outside of their environment that's why the solution we developed has very high data security as pekts that we immaterial plemt that's why, prince, all the data that we collect, for example, for if nfl or any other company is hosted within their network, environment that has very high data security standard so no one else can access the data we do not input any names but we use it so that only really designated people within an

organization, for instance, the hr department can access this information in case of an infection to do the contact tracing. that's why if you access the data for whatever reason if the outside, the data is not valid to you because you do not identify any individual within the solution >> all right those privacy protections are in important. thank you p for being with us. >> thank you so much for having me >> squawk alley will be right back and the peace of mind of knowing that important things like your prescriptions, and ballots, are on their way. every day, all across america, we'll keep delivering for you.

i think it's going to be bad for us over the next five to ten years. >> that was the head of instagram talking about the tension between the u.s. and china earlier on "squawk." it's not clear what an acquirer might be getting if they don't get the full algorithm of tiktok >> mentioned it may be good for competition but i think he does bring up an important point. you look at facebook and what's app, these are global apps used all over the world >> watching it close loifr the weekend to see if

there's any important developments got to be frustrated if you're the man who founded bite dance, created this incredible growth company only to watch him have to either shut it down, part of it or sell it at a price that it would not be otherwise worth in a fair market. >> on the 15th, something will happen for now, have good weekend let's get to scott wapner in the half welcome to "the halftime report." assessing apple. is more downside ahead and which of the other faangs could be vulnerable we'll debate that with our investment committee >> good to see everybody let's look at the wall