♪ well, happy wednesday. welcome to "squawk alley." i'm jon fortt with carl quintanilla and julia boorstin this hour we're going to talk a lot about software a lot of 2020's biggest winners and 2021's biggest growth hopefuls fall into that category that's before we even get to ipos companies joining the public markets are hoping to in '21, software names counted among those, they might have another option and method for doing that, and that is where we'll start this morning leslie picker has some more on the traditional ipo and now this

new direct listing >> that's right, jon so just to start, let's take a step back and explain what a direct listing has meant historically and then we'll go into what yesterday's announcement about some changes to the direct listing process could mean so companies like pallen tier, spotify, all have taken this route, which is different from a traditional ipo because they don't use underwriters and haven't historically been able to sell their own stock in the transaction. only prior shareholders could sell and the opening price was made in the market rather than through a traditional road show. yesterday's s.e.c. approval of the proposal would allow companies to actually raise capital concurrent with their direct listing, solving perhaps the biggest deterrent for many companies in choosing this method because they want cash from the ipo the news was a huge win for venture capitalists who have been championing this method,

notably bill gurley. >> i think it would be hard tore anyone to argue whether the traditional ipo or spac that that's going to be better than a listing with a primary offering. this is so elegant and efficient, it actually has fewer steps than an ipo. it's wonderful i do think every single company will move this route >> here's the problem, though. i called some of the top ipo advisers, bankers and lawyers yesterday and no one knows exactly how this is going to work so if a company were to target, say, a half a billion dollar fund raise, amounting to a 10% float or 10% of their market cap and then the stock opens at half of that level that they expected, they're looking at double the dilution. without a set ipo price and without underwriters to stabilize the deal in the aftermarket, there could be additional liability on the issuer, as well as greater uncertainty and lack of control over the trading, which could have pretty big repercussions if

things turn out to be not as they planned, jon. >> yeah, those are some significant issues lessee, thanks we're going to stick with those and bring in steve yang, the founder and managing partner of kindred ventures leslie laid out pretty big questions that are still hovering above this direct listing possibility. how important are those questions to you >> i think those are important questions. i think the first thing to know about direct listings is that what it does is it democratizes access to the everyday, the retail and the small institutional investor, where historically it's been really the domain and under the control of large institutional investors. so, number one, that opens it up for everyone to participate rather than the day after. the other important thing to

note is that this is probably going to be really, really good and beneficial for the company that has great prospects in going public i don't think for the companies that, you know, aren't well understood by the investor market that need that stabilization activity from the banker and the underwriter, it may not be the right method. but if you're a tech ipo, you're probably already on a great trajectory the market understands and sees you coming down the line i think primary direct listings are an amazing new invention that, frankly, bill has fought the good fight there, the new york stock exchange has been great work on spaks, as well as direct listings and the approval is great i mean, this is 100% net benefit to the tech ecosystem. >> steve, i can think of a lot of promising technology companies, particularly in the enterprise space, that maybe aren't founder-led anymore, but

are looking to go public, have good underlying technology, but main street investors aren't necessarily hyped up about their arrival. bill gurley says that this method is going to be good for everybody. you seem to be a little bit more nuanced in that. isn't it entirely possible that some really good technology companies with underlying value might not be valued correctly and might be taking a risk going this route >> yeah, i think if you look at some of the upcoming ipos, like affirm and bumble, you know, if it were up to me, i would pick out the ones that are consumer brands, that have the ability to have a lot of appeal to not only the customer base, but to the general market and so i think for those, primary direct listings are a no-brainer i think for enterprise companies that haven't done as much marketing and don't have as large of a brand in the public

markets already as a private company, it's a question to have the underwriter support and have that book behind yo can be a great thing but i will say this, that the arguments of large traditional institutional investors has been do crocodile tears. they've been lobbying against being able to open up for primary direct listings saying that they're all about investor protection if they were all about investor protection, then what they would be doing would be setting a higher bar of information disclosures and they would also be preventing somehow retail investors from getting hosed the day after an ipo from their large institutional clients. so i think a lot of the pushback here is sort of kind of painting everything as black or white but i think the nuance, what we want is choice for founders, coming from the early stage tech markets, what we want is a traditional ipo option, we want

a spac option and a primary direct listing option. i would say if your company is strong and especially if you're a consumer brand or a household brand already, that a primary direct listing is far and away the best option. >> so, steve, if this does become a popular option as it seems like you think it will, do you think it could impact valuations in the private market or even the way you think about investing in private companies >> yeah, you know, look, i think the theme of the last few years has been private markets have overvalued the high flyers in the tech market. tech companies will get valued by investment funds and there will be a lot of hand wringing when a company goes public for example, in uber in which my fund was an early investor, we saw a lot of that discussion

happening in an open forum what we've seen lately is that public companies have a premium, when you go public you have a premium to the private markets, especially in enterprise so if that's the case, what we need to think about is how do we find the perfect price for an ipo, and do that with the input and the bidding of not only large institutional investors, but retail investors and small investors. so by perfecting the price discovery, it's an important part every other area in finance we use software, we use data and we perfect the price and we have efficient markets. yet in ipos it's still a little black leather book with excel sheets and it's really a crony game and i think leveling this access actually improves liquidity and interest all the way into the early stage private markets. i would love to see beyond just work on ipos and direct listings, i would love to see the s.e.c. change and modify and modernize the accredited invest

rule there are a lot of accredited investors that would be able to join in the early private markets in seed and series a rounds and venture, but are unable to do so by some really antiquated rules so i think more investors, more capital, more competition and democratizing and leveling the playing field is important at the ipo level and at early stages in venture. so i think these are good things and this is counter to my interest as a venture capital fund, perhaps, to have a flood of angel investors and things like that. but i actually think it's positive i think opening this up and the key here to opening it up and doing it effectively is raising the bar on disclosure. as long as investors have the information that they need, then i think everyone can make their own judgment call and i think that starting with the ipo, this is a great, great thing for primary direct listings and tech companies. >> i do like the way you frame

it, that you want choices. if consumer-facing companies are the poster child for direct listings then, how do we boil down the traditional ipo is that more enterprise-facing and what is the poster child for a spac >> sure. well, let me be clear. it's not just that consumer-facing companies, they can be enterprise companies. but as long as they have a great brand equity and awareness among the populus, they can be an enterprise or a small to medium-size business company and if there are enough people out there that are excited about what products or services they're offering, then this is a great opportunity that primary direct littings offer that traditional ipos don't you can't tell as the customer of the company whether you're an enterprise user or consumer user, just go out and buy shares in an ipo in a company that you happen to use their product. this is not something you can do

today. primary direct listings, allow you, as long as you're willing to pay the price in the initial auction, you might have a chance to buy shares alongside the fidelities and the t. rowe prices of the world. that's an amazing thing that hasn't happened. >> yeah, that would be quite a change to the market just some details, i suppose, to work out as leslie picker did outline for us steve jang, great to hear from you. >> thank you according to elon musk, tim cook refused to take a meeting on a potential tesla buyout three years ago. we'll explain atto nt,th sryex so stay with us.

tesla remains a talker today. this is a tweet yesterday from elon musk when he recalled the time he considered selling tesla to apple about three years ago during the dark days of the model 3, as he says, jon, but was refused the meeting by tim cook we don't have much to go on this morning, other than that tweet but eventually someone is going to dig down with him, joe rogan or maybe it comes on our air, and we hope to learn a little bit more about what might have happened or what he thought might happen when he made that pitch. >> i would love to hear that story, but i'm going to go the kind of nontraditional beat me

up on twitter route and say that's probably a call tim cook shouldn't have taken i mean, elon musk is so un-apple in so many ways. i know a lot of people make the steve jobs comparison, and that kind of works if apple were found bid elon musk. can you imagine the distraction that would result from bringing elon musk around that time period, and that's when he was twitter nuts, he was tweeting all kinds of things. can you imagine apple bringing that kind of a personality into the company during that time i mean, they couldn't afford to do that. no way >> jon, i'm totally with you on this one i think there are a couple of factors at play here, but what's really notable is that apple does not make major acquisitions they just don't. they bought beats but that's really it in the acquisition department it would have been really unusual to consider an acquisition of that size then you have the cultural

differences between tesla, which is a technology company, but has a very different culture from apple. and the fact that this would be really weird for him to have taken this meeting without having a real intent to have a serious conversation about it. i think if he had taken the meeting it would have sparked so many rumors and so much speculation, you can imagine tim cook wanting to play this one very, very carefully >> yes, yes indeed we'll wait on the backstory, though as we go to break, shares of american airlines are hitting a session high as we first reported last night, the airline will proceed with the recall of furloughed employees, despite the snag in the coronavirus aid llbi we've got more "squawk alley" coming up. ♪ you make my heart sing ♪ ♪ wild thing i...

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if you've had software stocks this year, you've got a lot of reasons to smile about

2020 the etf outperforms the nasdaq so far this year, names like zoom, of course, z-scaler. alex joins us this morning for his top picks for the sector in 2021 we're glad we finally got you on the show welcome. good to see you. >> happy holidays to you and your listeners thank you for having me on it's always a pleasure. >> your general macro umbrella is about seismic change in 2020 and sort of this acceptance and acknowledgment by the markets of seismic changes and the long-term opportunity in sas, right? >> yeah, we really do think that 2020, as you said, seismically changes and we don't think it's going to go back we think all experiences will be connected, work, fitness, health, finance, you name it we think coming out of the

crisis some of our names are going to have better fundamentals going forward, as a lot of these personal relationships and work relationships really move to this location agnostic way of the world. it's not remote work versus in-person work it's really this notion of work 2.0. >> right some of the picks, we'll just get so tom of them, twilio, docu-sign. you upgrade palo alto. are you wrestling with valuation at all >> absolutely, valuations are a constant conversation with clients. but we'll tell you that the relative fundamentals in our sector have been better. we think the interest rates have definitely played a part in the valuations but, again, i would say that the number one driver for returns in our sector is growth, and particularly it's the amount of outperformance versus consensus expectations the way we look at our top picks, twilio, docu-sign, first

you start with the fundamentals, secular growth opportunities, but more importantly, we think they're going to beat numbers by more than most people expect in 2021, and we think that's going to continue to be the number one driver of returns in our sector. >> now, alex, i know you have crowdstrike in there in the wake of the solar winds hack, i'm wondering what you're anticipating in terms of the cybersecurity space, the fact that it took so long to identify the hack, does that sort of make you lose confidence in these players or do you think that it will be even more important for companies to double down on their investment in cybersecurity? >> it's a great question when i talked to my cio contacts, and i always ask them about how their budgets and priorities stack up, the number one budget priority pretty much every year is security and i think going forward in a world that just got significantly more connected at a pace that nobody was expecting, i would not be

surprised if, you know, the solar winds type of hack is a repetitive theme it's been a repetitive theme, but i think it's going to get even more of a potent budget driver so i think the names that help companies remediate those threats, predict those threats and stay protected from them are going to be core parts of the infrastructure going forward as we go through this restacking for a cloud-first world. >> alex, a lot of the names that you mentioned, interesting names, i recognize from, saand t makes me think cloud doesn't mean much of anything anymore, because if you're in enterprise software or hardware and you're not billing yourself as a cloud name, you're toast so in a sense, if you've got these software picks, isn't it a way of saying maybe it's not safe to be in a basket, to be in

an etf and think you're covered for growth in the future maybe it's more and more a time where you've got to pick individual names >> that's a great question, jon. and i will tell you i think 2021 could be a stock picker's market and i think, again, one of the things that we try to do is really go deep on a lot of our names and just try to really understand the fundamentals, not just the setup, but how is this market going to change, how is this going to grow and evolve? when we talk about work 2.0, we went out and surveyed hundreds, thousands of people to arrive at this notion that 2020 was going to be a massive expansion of that we upgraded zoom in june and docusign we stuck with when it was expensive, because we see these trends in real time becoming active. i do think it's a stock picker's market and names like twilio that are at the forefront of revolutionary changes in their market dynamics are going to be really good outperformers, so i

do think that you want to be -- you want to be exposed to the trend and i think you want to go deeper and you want to just own the winners. winners win. >> finally, alex, we don't have a ton of time, but you're not really calling for an explosion in i.t. budgetsin the next year, are you? >> no, i'm actually calling for the opposite i'm calling for them to be flat to slightly down, particularly over the course of the next six months i think longer term they're obviously going to continue to grow in the low single digit range. there's some verticals that are getting hit particularly hard and they want to see the pace of the recovery before they dive back in. within those i.t. budgets it's really interesting to see which themes are taking priority we talk about this notion of the world we have today becoming a data-centric world where everybody is in the app but they really want the data

you see names like snowflake and the year they've had has kind of been part of that trend. but this notion of app-centric to data-centric and data convergence and, again, we think those are the forces that are going to drive those budgets in those specific areas, going back to the question about the stocks and finally i'll go back to a question you guys had about valuation. i think valuation took a turn for the positive when salesforce acquired slack that's a market validation, that's a valuation validation. they paid 19 times out year revenue for what it means to grow 30% on a come pounded basis for the next three years. >> right, right. great roadmap for the year ahead, alex. we really appreciate it. talk to you soon. >> it's always a pleasure. thank you. our next guest is one of the biggest winners in 2020. it's down today, but having

nearly tripled since the start of the year. the ceo joins us after the break. stay witush or w ending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity. - [narrator] if you're thinking about going to school online, southern new hampshire university is where you belong. we've been online for more than 25 years

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i'm sue herera here is your cnbc news update at

this hour. new york city is ordering all travelers from brittain to quarantine to prevent the spread of the new coronavirus variant mayor bill deblazio says sheriffs will knock on doors of hotels and homes to ensure compliance the city is also requiring all other international travelers to quarantine the federal government has yet to act to restrict travel from the uk in baltimore, a building explosion has sent at least ten people to the hospital with critical injuries. firefighters have also rescued two workers who were trapped on a scaffolding. a new study says a record one in seven national chain stores in new york city closed this year. the new data puts numbers on the retail shutdowns happening pretty much across the entire country. and in bosnia a fire broke out at a migrant camp with 1,200 people that was set to close for the winter the fire is believed to have been set by migrants in the camp who were being forced to leave without getting new shelter.

you are up to date i'll see you again in an hour. thank you. >> thank you, sue. difficult situation there, for sure now as 2020 comes to a close, "squawk alley" is taking a look at some of the biggest winners in the market, starting with remote learning education company chegg seeing shares up more than 140% since january. joining us now is check ceo, dan rosensweig good to see you. and i remember four years ago we used to have you on to talk about everything but chegg when you were less than a tenth of your current value, but now we're going to talk a lot about chegg because this company is absolutely built for the situation that we're in for digital remote learning. what do you expect to change in 2021 >> yeah, well, thank you for having me on and happy holidays, mer ree christm merry christmas, everybody chegg has been built from day one to support the student the

way the student learns they need it on demand, remote, they need it inexpensive, incredibly high quality, and it needs to scale academic support for students and then ultimately skills building for students so they can get jobs. so chegg was rising anyway, when we were on four years ago you didn't talk about chegg because the stock was at $4. but we knew then that we were betting on the inevitable, more students were going to have to learn more often and need more help and chegg is built to do that what the pandemic has done is really revealed just how important it is, not just domestically but internationally. now we're in 190 countries so this is a global situation, so it's pretty amazing >> so, dan, you've got so much data, not only relating to the student cohort, which is young,

which is interesting, along a lot of different lines, you know what they know, what they need to know, kind of where their interests are headed i'm seeing a lot of zoom integrations happening now on learning platforms, i'm seeing money raised for sort asynchronous learning. how does that fit within the roadmap for additional capabilities to build into chegg or perhaps things to buy >> great question. we're looking at what the inevitable looks like in the next few years so we have clearly been highlighted as a result of the pandemic, but when the pandemic is over we don't expect growth to significantly slow because this is not just a trend, this is what it's going to be and this is what it has to be. so if you break it into two groups, the k-12, you're going to have to see a lot more integration of technology actually in the classroom, and then hopefully goes home with the student and we get broadband to every student higher education, which is where we focus, the trends are clear

students are getting older, they have to learn more things, they need their education curriculum to expand to be increasingly skills-based and they need to be able to get support whenever they need it. most people don't know that the average age of a student in the united states is actually 25 years old, that the two largest schools in the united states, not for profit, and online institutions southern new hampshire and western governors is an example. california community colleges have 10% of all students so the american student doesn't look like what people think that it does and they need more help. 40% of them are working 30 hours a week or more we have to be more remote. >> dan, it's good to see you i wonder, as your business has evolved and you now have the subscription business with 3.9 million subscribers, which is a really evolution away from the text book and e-textbook

business, how important do you think that would be going forward, especially in light that a lot of the subscribers are focused on s.t.e.m.? >> you've got it exactly right, which is four years ago the number of students taking s.t.e.m. was 50% less than it is now in the united states just think about that. business has stayed about the same, s.t.e.m. has grown substantially and non-s.t.e.m. classes have gone down the same percentage as s.t.e.m. so s.t.e.m. is easier to teach on line because it's more scientific and mathematical. so things like the ability to use your camera phone to take pictures of formulas to help us educate you step by step by step, we built in chat-based tutoring which allows you to get human help to help you solve that one problem that you have as you have it this is going to be inevitable it's global for sure and it's going to help america be more competitive and it's going to help more diverse

student bases get the support they need that wealthy families have always been able to provide. that's why chegg was built and that is a large part of why we're seeing such extraordinary growth right now >> lots of people and institutions scrambling for learning tools and technology tools now, dan, and that explains a lot about chegg's performance this year. thank you, chegg ceo, dan rosensweig. >> thanks, guys. happy holiday. take a look at the xle energy etf as we head to break it's on pace for its best way in rfme ox eks, with the top si peorrsn the s&p this morning. more "squawk alley" is still ahead. stay with us supermargives yo e mt bang for your buck. somethingt else that's good to know? if you have medicare and medicaid you may be able to get more healthcare benefits through a humana medicare advantage plan. call the number on your screen

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unanswered that means making clear and publicly who is responsible for the attack and taking meaningful steps to hold them in account. >> that's the president-elect yesterday talking about what his response will be to those who carried out the massive solar wind cyberattack joining us is mcafee cto thanks for being with us. >> thanks for having me. >> a lot has been said about the attack so far. essentially you're saying it has changed completely the way in which the u.s. and other nations are going to have to think about cyber defense in general.

>> if you think about the attacks we've seen in the past, we've either seen attacks at scale that have impacted many companies, many organizations, like back in 2017, or we've seen very precision lethal attacks against specific organizations, like the opm breach or the sony hack what this sun burst attack is a great example of is putting those two together, where you literally have thousands of organizations which either might have a very specific attack executed by a very advanced actor and that just fundamentally changes the game >> right it sounds like, also, you think that before we can establish a new kind of defense, you think the perpetrators or copycats will replicate this kind of practice well into 2021. >> that's right. one of the things we always see in cybersecurity is once a playbook has proven to work

well, other adversaries copy it. so now that we've seen that this playbook has worked in successfully breaching department of state, treasury, department of energy by a very sophisticated actor, it would be very reasonableable that we'll see not only nation states, but cyber criminals really focus on this type of supply chain attack, where it's all about getting a back door in legitimate software that is undetected, that's then deployed across many different organizations, and then the adversary can basically pick and choose which of those they want to attack, steal information from, steal intellectual property from, or even possibly conduct cyber warfare, damaging the organization lots of different options for the adversary. >> steve, one concern here which you've mentioned is defending against future supply chain

attacks. but the fact that this attack has happened and has succeeded opens up a whole new universe of vulnerabilities inside government and inside private companies. so what are the new types of security methods that they're going to have to undertake to guard against these increased vulnerabilities now that we have to assume that the perpetrator of this attack has data, has information that's going to help them do more malicious activity? >> you're absolutely right what makes this attack so damaging is it has been under way for months and what an adversary will typically do is, once they get into one of those environments, it will provide virtual hands-on keyboard to the russians or other nation state actors that are behind this to be able to do all sorts of things number one, they're likely going to implant other software that allows them to maintain persistence into the environment. so one of the biggest challenges

and president-elect biden called this out yesterday in his comments, is we don't really understand the full impact of the attack because there are so many additional things that the russians could have done after this initial breach. and it's just going to set up a situation where if we see more of these attacks, they're incredibly expensive and incredibly difficult to remediate because there's so many different opportunities for the attacker to take >> so, steve, just to follow up on jon's question, though, here we are at this point, this attack has been uncovered many months after it started. now that we know what we do, what do you advocate for companies to do to protect themselves, protect the data that they have, and to protect the data of their customers? at this point to make sure there's not more damage. >> so companies need to take a short-term, mid-term and long-term approach short-term, make sure they're

not directly impacted by sunburst look for whether they have the solar winds or ryan product in their environment. make sure they remediate that. for mid-term, for customers or entities that are impacted, they're going to have to do a thorough investigation to regain confidence that they have control over their environment more in the long run and what organizations need to start planning now is really move to new levels of hygiene and deploying next generations of cyberdefense so make sure they inventory what all of those valuable assets that an attacker would want. understanding where ip is and understanding where valuable information is, and putting safeguards around those assets to make them more difficult. they also need to move beyond traditional cybersecurity tools that are only looking for very specific artifacts within their

environment and they need to look for much more general adversarial behavior we have capabilities such as edr, end point detection and response, which is all about looking for the behavior that an adversary would use, even if they're executing a very unique playbook on an organization by organization basis >> that's fascinating. a lot of work is going to be done in the months ahead hopefully with speed steve, we really appreciate that good explanation of what's going on right now >> thank you for having me from security software to gaming software, another one of 2020's highest flying stocks is going to join us next, the president and iechf operating officer after the break. don't go anywhere.

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winner for 2020, video game company, seeing boom in demand as consumers continue to stay at home amidst a rise in coronavirus cases. activision blizzard has grown by 20% year after year, and joining us is the chief operating officer. daniel, thank you so much for joining us today. >> good morning, julia it's a pleasure to be here. >> so, daniel, there's been so much talk about how the whole video game sector has benefitted from people being stuck at home. you have seen remarkable growth

in your user base, but as you look ahead to next year, will you be able to hold onto those gains and continue that growth rate >> well, it has been an incredible year, amidst everything that's going on with covid. we have been just absolutely focused on our mission, which is creating epic entertainment for the entire world, and that's what we will continue to do. we've invested in our biggest franchises, launched some of our biggest games this year with call of duty, black ops and warcraft shadowlands and will continue to create great and engaging entertainment into the new year and we see that players really want to engage with our franchises and love playing our games. so we see that continuing in 2021 >> i think it's interesting that for one of your main franchises, call of duty, you also have a free to play game and a mobile game how important is it to take these core games, traditionally

something you would sell, and then continue to monetize and turn them into different versions of games? >> we've seen a concerted effort as part of our strategy with our games to make sure that it's available to players everywhere around the world in whatever format and whatever platform so what you mentioned with cal of duty, at the beginning of the year we did launch the call of duty war zone, which is a free version of call of duty. what happened as a result, we had tremendous acceptance. over 85 million players are now playing call of duty war zone throughout the year. and it's really expanded our base in addition to that, at the end of 2019 and we're now over a year into it, we also launched call of duty mobile. call of duty mobile has had over 300 million downloads to date. and it really is just expanding the reach of our franchise because we know players want to see it in whatever format they want, and also be able to engage

in whatever monetization models that may be best for them. going into our launch of call of duty black ops which happened a couple of weeks ago, we had the most engaged audience we've ever had in the call of duty franchise. we see that going on and continuing going forward it's part of our mission, as i mentioned, to really make our games as easily available to the entire world because we are a -- on the entire world. >> daniel, talk to us about the shift in the gaming business model. there was a day when it was about selling individual cartridges or disks of games can't help but notice, before april of this year, you spent more than 16 years at google, which is very much a platform company. to what degree are activision/blizzard's ambitions to become that, a platform company that creates experiences

and environments for users to interact, to stay within, to pay subscription fees and grow from there? >> well, you put it really well, but the way we look at it is, we know that players really want to be able to enjoy the content we create we went from a model where we used to ship a game every 12 months or every 24 months to an always-on engagement i think that's what has really changed in consumer behavior and consumer habits. players always want to be on and have the game available wherever they may be. that's why it was so important for us to build the call of duty mobile franchise and building on our mobile capabilities. so, we not only launch a big content launch at the beginning of the franchise cycle, but we also provide episodic content throughout the year. and we have different

monetization models we provide so we can expand the base. that has actually proved to be the case this year we've had about -- over 200 million players of call of duty, which is a record for our franchise. >> to what degree does that put you into either competition with names like google and amazon trying to launch cloud-gaming platforms? we see apple having this wrestling match with epic over how those games will exist on an app store. we see nvidia working with epic now on different things. how do you decide who your partners are and to what degree you just go head-to-head, no, we want the user to come to us first and play call of duty on no matter what platform, but really we want to own the player >> look, at the core we want to provide the best experience for the player and the player can decide which is the right entry

platform they want so, we don't really decide on picking fights or not. we actually have great partnerships with apple, with google, with sony, with microsoft. and our core strategy is to ensure that our games are available in the platforms where the users may be that's why we actually have a fantastic relationship with all the players you're talking about. and they're very important >> daniel, do you also have the advantage of this very strong direct relationship with your users? and your user base has been growing very fast but your operating profit has not grown at the same pace as the user base in the year ahead, will you be able to ramp up that bottom line growth to match the growth of your users >> look, again, our focus is to really ensure our players love our games. we're finding different monetization models in the investments we've made in our

core ip. that's why with free to play, which is relatively new for us it's been about nine months, ten months since we launched war zone, we're still trying to figure out the mechanics of how to engage better with players. epic entertainment is what we are known for. this is why our franchises are so successful. we just want to ensure that we are making them as easily and readily available to whatever customer segment may want to enjoy the games. and to date our strategy is paying off and you see is it with our growth in our user base. >> certainly we see it with the growth in your stock this year thank you for joining us we look forward to hearing more about all those new business models >> thank you and happy holidays to everybody. in the meantime, keep an eye on shares of realreal and fubotv we talked about the winning streaks in the earlier part of the week that may come to a close today although the session is not over

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as we close out the hour, take a look at shares of disney. that stock up about 2% on two price targets by analysts. that stock up now about 20% year

to date, despite the fact that many of its theme parks are closed, including the one here in california. it really does seem to be about confidence in disney's new direct-to-consumer and digital strategy >> yeah, interesting, julia. i want to look at a stock that's down 4.5% today. that is stitchfix. take a look at that chart for the year more important, take a look at just december because that stock has almost doubled in december alone. it's interesting, the pandemic looked like it was going to be a really tough thing for a company like stitchfix that sells not just clothes but the styling service, carl, because who needs to look stylish when you're home in athleisurewear. the fact that people don't have to go out to shop, things are delivered, delivered in a quality manner, you know, they surprised a bit, carl, in their

earnings and guidance this time. and the stock, wow it's true. so many names have up-ended expectations what people thought they were headed into when the pandemic began watch jpm, up 30 bucks in six weeks. fresh nine-month high today as we watch the possibility of being over reserve, the buybacks and steep yield curve. let's get to the judge >> carl, thanks. welcome to "the halftime report." the turn of the growth trade, whether it's the bet for your money for the next few months? we debate and discuss that with our committee. let's go to the wall and look at stocks and see where they are today. the president throwing an 11th-hour wrench into the stimulus push. unclear what that means to the final bill, which ha