good morning it's 8:00 a.m. at intel headquarters in california, 11:00 a.m. on wall street, and "squawk alley" is live ♪ ♪ good wednesday morning and welcome to "squawk alley." carl and jon both have the morning off. we're going to start this hour with intel third point urging the company to explore strategic alternatives after the chipmaker continues to lose market share to the likes of amd as well as

samsung. you can see the stock yesterday performed quite well when the news first hit, but is down a bit this morning sort of a wide-ranging letter, although it does not specifically take aim at ceo bob swan it did point to a talent train at the company, deidre, and concern about the loss of talent at the company, as well as making the basic point as to whether the board should actually consider whether intel should remain an integrated device manufacturer or go in a somewhat different route >> right, and it's that integration model that has made intel so successful over the last few decades that just simply isn't working for the company anymore, in the rise of taiwan's semi. you bring up they didn't really mention bob swan by name but really these problems started long before him. the writing was on the wall back

in 2013. they were having all these issues, they were losing share in the pc market, there was no presence in mobile something else that that letter brought up that i thought was really interesting was these national security concerns we spend so much time this year talking about these national security concerns, huawei, the cybersecurity attack and intel has been one of the greatest american manufacturers and that decline, which loeb points out, is a serious consideration for many manufacturing in the country. >> that's interesting to me because in theory what third point is calling for is a slimmed down focused intel now, its peer, amd, has done that they've spun off their manufacturing operations, global foundries. it's now actually owned by the abu dhabi government, large by owned by the abu dhabi government so if they were to slim down operations, if they were to spin off perhaps as loeb put it in the letter, some failed acquisitions that they've made

in recent years, who would be the owners and what would that mean for national security implications as far as ownership goes david, i think that's an interesting question i know you reported earlier that they have hired an adviser i know you'll potentially be quite busy on the m&a front with this situation in particular when we look at national security, how exactly does intel pursue these strategic alternatives in a way that would ensure that they still have those end goals from that standpoint >> it's a great point, leslie, and a key one. one that we have talked to bob swan about as the company is making those key decisions about its manufacturing and how much will it move away from, what will it consider in terms of outsourcing for some of its chips to the likes of taiwan's semi or even samsung there is this belief, i think, in the third point camp that you could separate manufacturing to

some extent using joint ventures with some of the names i just mentioned, particularly taiwan semi, although again to your point, it's not clear how the u.s. government would look at it and as we go from a trump administration to a biden administration, i think there's some continuity, at least, in the view of national champions when it comes to this specific area but it's a very important point. now, they may think at third point that the wind is behind them in terms of the benefits of being viewed as a national champion in some way, but that remains, i think, a key part of the story that's unclear another, of course, is whether they would ever consider abandoning being an integrated device manufacturer, something that i didn't discuss with mr. swan, the company's ceo a few weeks back >> the magnitude of the decision about what's in or out, i think we're going to make that determination over time, but i would expect that an idm and filling fabs, primarily for us here in the u.s., is going to be important for us to continue to

extend the capabilities of an idm model here in the u.s. >> so you heard it there, deidre their expectation, at least so far, was that they would continue to be an integrated device manufacturer and obviously have an important presence in the u.s. but this pressure campaign from loeb -- and by the way, i pointed out earlier the nominating window closes on the 15th of january. he does have directors ready to go, i'm told, and we'll see how high quality they are. but the question is whether he also will have support of frustrated shareholders that we so often talk about, who have watched the underperformance of this company for some time and perhaps are frustrated as a result >> yeah, intel shares down more than 17% this year, while, you know, it's watched nvidia grow larger in terms of market company and also surpassed in terms of share rise. it raises questions, i know that

bob swan wasn't singled out in the letter, but remember, david and leslie, that he was the interim ceo. he actually said he didn't even want the job and his background is in finance. it's not engineering and that was another point, is their ability to retain talent you have to wonder how much having a finance guy at the head of this company is helping that matter >> let's continue this conversation no and bring in t.j. rogers to do that he's the founder and former ceo of cypress this idea of a talent train at intel and whether you can sort of regain some of the luster that they had previously, i mean, you have good insight into that is that something that you believe has occurred and is it possible to reverse it >> yes, it's possible to reverse it intel has an incredible platform

to move forward from i can tell you in silicon valley, i came here in 1970 and intel was exactly two years old, the very first year working at stanford for my ph.d. in integrated electronics, i met them and they began a recruiting process. i never thought about money, what my paycheck would be, i knew it would be fair and reasonable i wanted to know what i was going to work on that would change the world now we've got a ceo talking about which parts he's going to talk off and chip and we've got the buzz ard swine around talking about strategic options and stuff like that. not okay something has got to change. >> well, what needs to change? >> well, they need a new ceo the ceo needs to be technical. if you look at advanced micro devices, for example, they've caught up tremendously on intel in intel's area and their ceo is a ph.d. and also a good ceo.

so you've got to get somebody that's respected by the technical community, for sure. they certainly have enough money. second point is i'm a process guy, i'm a device guy. i worked my entire career, so i have zero sympathy for the whiners at intel who sat there and say for three and a half years, we can't make seven nanometers that house needs to get cleaned, there's plenty of talent here in silicon valley and we need to have it scheduled and jobs need to ride on it. >> so just to be clear, t.j., do you think that a smaller semiconductor company could be a more powerful one and would solve some of those issues the reason i ask is because loeb is pushing for spinning off some acquisitions, but he notes that intel is losing out to competitors and customers are building chips inhouse

the talent wars and the talent that is fleeing, and then of course that intel is of imperative importance for national security. so would a smaller more focused company solve that problem as it would in other areas that loeb has targeted >> well, first of all, loeb is doing his job, he's bringing attention to an area that needs attention. and by the way, the stake he bought before he made the announcement, it was $50 million paper dollars. so let's not talk about loeb as the great strategist in semiconductors he also used the words slim down and focused. every company gets fat and bureaucratic, but by the time they go through all the strategic initiatives and bring in the bankers, the franchise may be gone. what they need to do is make the best cpus and servers in the

world this year right now in volume and that's what they need to focus on and i keep carrying on about their carbon footprint and the diversity issues and stuff like that and they have chosen not to focus on their business. and now their ceo is speaking equivalently, if the boeing ceo said i'm not sure we want to be in airplanes anymore or the gm guy said, okay, i'm not sure we need to be in cars we have to have somebody who is dedicated to this tough business go back to andy grove. he was the most important and he was not a nice guy, he was very tough. i always admired the toughness and discipline of intel and their focus. their stuff came out on time like a clock and they ran

everybody else into the ground now we have press releases where we have new york private equity people speculating on what intel strategy ought to be intel shouldn't tolerate that, and if they do, that's a sign they need to change. >> with all fairness, they've had many years of this decline to sort of get it together it's surprising. i'm kind of with you that it takes a letter to get them going. i guess, t.j., when you say that they need to focus, does the integrated model still work for intel or do they need to really drill down and focus on something like manufacturing does that come at the expense of design, especially when you have the growth of custom chipmaking by big tech, amazon, apple, microsoft? >> yes, their model works, obviously, given that they ran the world for over 50 years. >> why is that still obvious, though >> well, take one of the challenges, because it is through technical people who

have worked there. that's the short answer. but take one of their challenges apple says we're going to make our own chips. why would that be? that's because intel didn't make what apple wanted and apple said clearly we want more functionality per unit of power. intel has worked on bigger and bigger chips with more and more processors, high-powered chips mainly suited for servers and apple wants a chip that can let their pc run for a week and intel hasn't provided it and if you want to make power, you don't do it by tweaking your transistors in a fab somewhere or tweaking your design against the process that isn't optimized. you have the designers and process people working together to make low-powered chips integrated between the design and processing side. the chip goes into the fab and it yields well and it does what it's supposed to do. it is very important for people, if you want to optimize some

parameter at a world class level, everybody has to work ago. every an log company making super performance circuits has their own fab because they have to control both ends. >> t.j., i just want to understand, though, if third point would have put up some qualified directors here, do you think that they would garner support? do you think this board needs to be refreshed, and if in fact there were candidates who had the technical expertise that you were talking about, that intel would benefit from them? >> yes, i do and this is why even though i'm very skeptical of talking about semiconductor strategy, he does perform his job by pointing his finger at the board. because at the end of the day you just made the comment it's been a long time things aren't getting better where has the board been i checked that out this morning. first of all, there's ten of

them half of them have been there three years or less. there's the problem right there. you don't walk into a place like intel and push the button on the ceo. especially when he's a competent, nice guy that you kind of like and thinks he's doing the best job but he's just not world class suited to be where he is they also earn $340k a year. i would rather see them get $150 k if they didn't perform and $1 million if they did. even though the board, you look at their credentials, we've got ph.d.s, a well-known professor, these are real people so the board is not a ceremonial board. they've chosen for whatever reason not to act. >> well, we're going to be watching it closely, t.j., especially over the next few weeks where i think the nominations will likely take place. i certainly appreciate your insights thank you. >> thank you take a look at this mystery

chart as we head to break. up more than 120% year to date what stock is it i'll give you a hint it is not intel. more "squawk alley" after the break. don't go away. ing. neighbor 1: allez! (sound from wind chimes) neighbor 2: (laughing) at least geico makes bundling our home and car insurance easy. which helps us save even more. neighbor 2: hey, sarah, hey, peter! neighbor 1: touché. neighbor 2: ahhh! neighbor 1: pret! neighbor 2: en garde! for bundling made easy, go to geico.com

check out the chooiinese e-commerce company looking at a potential spinoff. the stock up about 150% year to

date, though it has been in the cross hairs of regulators over in china as alibaba comes under pressure in today'seson ssi up 1 1/2% we will be right back. stay with us on "squawk alley. keeping your oysters business growing

has you swamped. you need to hire. i need indeed indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo (music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries.

welcome back we've been taking a look at stocks that have outperformed for 2020 and cloud communications provider ring central certainly one of those winners, up 130% this year let's bring in ring central founder, chairman and ceo, vlad shmunis thank you for being with us. >> good morning. thank you for having me. >> let's talk about your latest move, ring central glip. you're taking on the videoconferencing market, but i can't help but wonder, is it too late zoom and some others have become established players. how do you convince people to go away from them and onto your

platform >> well, we don't think it's too late by any stretch. as a matter of fact, it's very, very early in the market and also it's not a winner-take-all situation. there's not a monopoly here. people have and will continue using multiple tools for communication. and with ring central, people have a very, very nice choice. it's an enterprise grade, if you will, carrier grade solution, which is highly competitive. essentially we remove all limits, people can host and have unlimited meetings with up to 100 participants there is no minute limit

most meetings, as a matter of fact, last longer than 40 minutes. so it's a great value. and on the technology side it is well differentiated because it is seamlessly integrated with a messaging solution so that's a unique offering in the market we do have quite a few customers who are using both capabilities and it's early, but it's doing very well. we would very much urge everyone to check it out for themselves at www.glip.com. >> you made an important distinction there. you said that it is free for up to 100 users, allow for meetings up to 24 hours that is different from what we see from zoom. are you monetizing this, making money off of it, or are you in investment mode right now? >> we have just introduced it. we absolutely see quite a bit of

interest and the way it will be monetized is what we offer in the free service, we call it glip pro, so our fee service is at the pro level and it pretty much has all of the features and then some that the competition does as well we have a pro plus here which offers additional analytics, additional api and additional platform capabilities. so this is one way to monetize but very importantly, ringcentral has been about work from anywhere for many years and we have been and are leading in that market. and in the work-from-anywhere world as opposed to work-from-home world that we found ourselves in 2020. but 2020 is over, so 2021, we

believe, and our customers are telling us, will be coming back to normal over time. people will not be just working from home, but will be working from home, office, or in the middle, if you will. and ringcentral's suite is uniquely positioned to support that new world of work from anywhere more specifically, we have industry-leading cloud communications, cloud solutions to replace traditional on-prem cbss, so this would be from companies like cisco, and a number of others and there is $400 million

on-prem equipment, and also a percent have been converted to the cloud. and very importantly, ringcentral has a unique partnership arrangement with three incumbents in the market so $180 million of the roughly $400 million, ringcentral is a product of choice from on-prem to the cloud we want to offer people complete message, video and phone solutions. >> but vlad, your stock is up over 120% this year. in a return-to-normal world, how exactly are you able to kind of keep up that momentum, keep up that growth? i understand that you do have these partnerships locked in, but do you expect to see as much activity as you had this year, this unique year of 2020 >> look, ringcentral, there's no question i'll tell you what, ringcentral

has been growing at over 30% for a good number of years now, ever since it was a public company, which it never dipped below 30%. we are now running at well over $1 billion in revenue. it's all high quality, very sticky recurrence, and before covid we have held our own and during covid it's hard to make predictions, of course, but we don't see any degradation in market trend. the movement and desire and need for people to move from on-prem to the cloud is as strong as ever and, you know, that takes care of itself what we're here to do is solve our customers' needs

we are on a mission to convert as many of the 400 million on-prem to the clouds, differentiated solutions we are leading in most industry analyst reviews. and it's about the product and customer needs and we seem to do pretty good at this. >> i love that you bring up the magic quadrant, vlad thank you so much for being with us ringcentral ceo. leslie. >> let's get a quick check on the markets. nearing new inter-day highs and on track to end in positive territory. the dow is up 1880ois, s pnt&p up four-tenths of one% we'll be back. stay with us

(music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries.

i'm morgan brennan and here is your cnbc news update missouri republican senator josh hawley says he will object to the electoral college certification yesterday that will force members of congress to go on the record about whether they think president-elect biden or president trump won the election in georgia, more than 2.5 million people have already cast their ballots to choose the state's senators early voting ends tomorrow ahead of tuesday's runoff. in argentina, cheers of joy

erupt from pro-choice activists after the country's senate passed a bill legalizing abortion argentina is the largest nation in latin america to legalize abortion and in yemen, the country's newly chosen cabinet was just arriving by plane when a large explosion rocked the airport officials say at least 22 people have died and 50 were wounded. none of the cabinet members have been injured wishing everybody the best there. back over to you guys, david >> thank you, morgan as china's regulators pressure and group to potentially overhaul it's businesses, our next guest believes this and the pending antitrust case against alibaba, due in part to the leadership of that company's founder, jack ma. joining us is j.l. warren capital's founder and head of research, june li.

i rely on you to help me understand what's going on in china, whether it's how many automobiles tesla is selling or what apple's demand looks like here on alibaba i would love your take. is it focused on jack ma and alibaba or does broadly speaking technology in china have a big problem? >> hey, david, thank you so it is our belief that this is not really targeting at any specific organization or even big tech as the industry, rather it's targeting as a single individual it seems like there's not enough oxygen in the room for two bosses monopoly, it's a strict legal term, really up to the interpretation of the regulators in china we know the regulator is tied to the party so whether you are a monopoly or not, it is really beyond the point here so i think the government has

already formed a committee and they went outside to both alibaba, as well as end financial and they tried to make the process very swift and according to the development of the last, especially last two days, it seems like the government wants to shape the message in a relatively gentle way. it's aware that big tech is critical to the strategic vision of china in terms of the next 15 years development. it certainly doesn't want to overstep into the private sector, therefore it definitely does not want to discourage the entrepreneurship and doesn't want to discourage the formation of the next generation innovations that allow china to move up the value chain, and to compete with the u.s.

specifically so in this case they want to say our conclusion is that beijing versus big tech is significantly different from, say, for example, u.s. versus google, amazon, facebook, et cetera. so here it's political, as well as legal that invites public opinions but in china the verdict is already made before the announcement of investigation is made so this is the difference. >> june, so i follow jack ma closely. he has been more outspoken certainly than most, if any other ceos in china that i can think of is this simply a reprisal against his willingness in the past, at least, to criticize the regulators and a way to make sure that he doesn't talk again? >> possibly, he's certainly a very charismatic, a great english skills, well loved by the west medias like you, as

well as wall street. but then in china you've got to understand, no matter how much money you have and how much influence you have on an international stage, jack ma is not exactly in the power structure of the cpc so therefore you are always going to be beneath the parties. so the party is above the law and you are beneath the party. so i think beijing wants to send the message to him in a forceful way, but it doesn't want to target or crack down any possible big ideas and new innovations, whether it's in internet or social media, you know, the chip development i think what's going to happen, what we will see is that the government will try to play a role in financials and try to give some guidance and work with the private sector to shape the

strategy as to what specific verticals that the gigantic company, artificial intelligence companies should focus on, as opposed to to what the company identifies as the most immediate monetization >> it's interesting that you said just a few moments ago that the message is being sent in a gentle way, perhaps the tech sector at large, but more forceful to jack ma. isn't this all about sending that message so i wonder if that's been accomplished now or do you think that beijing perhaps isn't done? billions and billions of dollars have been knocked off jack ma's personal net worth in the last few weeks alone, and to me it feels pretty forceful splitting off its credit business, putting it into a holding company, potentially letting beijing take a stake. so me it doesn't feel like there's anything gentle about that has the message been sent or is there more to come >> i think the message has been

clearly sent and you saw the market valuation at the end, the consensus right now is about $100 billion, down from the pre-oip, sort of the banker's valuation of $300 billion. so in the process of sending the message, two-thirds of ant financial's valuation got compromised. so that is a forceful message. however, i think if you pay attention to the headline of the stake media over the past i would say couple of days, they send the committee to both alibaba and ant financials just for one day and then overnight they announced the investigation kind of completed without any outcome. they didn't say anything about an outcome, but as i said, that's really beyond the point you don't need to say the outcome. the outcome is whatever the interpretation of the regulators are. so they tried to make the

process not too hurtful and not to have too much ripple effect to the broad big tech industry, because china clearly knows that manufacturing with construction and export, the traditional economy, the pillar of the economy is not going to be able to rise up to the challenge of the rivalry with the u.s we need a big tech, the goose that lays the golden egg, to contribute to the stakes >> i'm sorry to interpret you. to that point, in sending a message to alibaba, don't they also say, you know, to your point, we are above the law, we can regulate you as we see fit, just because it's alibaba today doesn't mean that it's not going to be other tech companies down the road and i have to wonder, what does that mean for innovation in china? what does that mean for foreign investment coming into china,

even though today the story really is alibaba and ant financial, jack ma's businesses that he's founded? who is to say that it won't trickle through the rest of the economy in the future? >> absolutely it would tricking through. however, the message here is this it's okay to make money and you are allowed to make as much money as possible. but money and power structure are distinct they are not intertwined they are separate, no matter how much success you have as a merchant, you are always going to be a merchant merchant is not a part of the integrated power structure you are not going to enjoy -- i mean, you are not going to leverage your wealth to gain the political influence or social status i mean, jack ma in a sense has succeeded and he has this extreme power in the society, he's a social media presence and his media presence not only in china, but also

globally remember four years ago when trump just became the president of the u.s., jack ma was the first china person who went to the trump tower and met with him and promised millions of millions of jobs he's going to create if he were going to show some goodwill in return to china. i mean, clearly his status is international and has way exceeded a normal business tycoon xi should be the person who meets with the person of the u.s. on an equal-to-equal level, not the boss of an internet company. >> june, it's funny, i pointed out to that meeting as one that ran ascance to the leadership of china, sort of along the lines of jack ma kind of raising their ire. let me come back to alibaba as a company and get your take of the

state of the chinese consumer and on the state of their overall business right now >> so i mean, i think -- i guess you refer to the e-commerce part of alibaba group, so that's the entity in the u.s., and i think it is not -- it's not a dynamic strengthening monopoly it is, of course, still the largest market share in the e-commerce business. it's about 55% of the e-commerce market, versus three or four years ago it was more than 70% the monopoly has already been weakened and i'm sure you're aware, it's relatively new, more innovative platform and that's the market answer to alibaba's e-commerce mondopoly. the market had an answer for it. and if you look at the market

share three, four years ago, it was 3%, 4% of the total e-commerce now today, after covid, it's almost as high as 20%. so it's growing at five times faster than alibaba. jd.com, although it's still smaller on a market share basis, it's growing faster. so it's hard to argue alibaba actually has a monopoly in the marketplace. when jeff bezos was in dc, how he defined the market share, he said he's only about 15% of the retail market, even though he's 50% of the e-commerce in the u.s. so if you look at china retail, e-commerce is only 35% of the total china retail, so alibaba, it's 15% of the 30%, so it's only 15% of the china total

social consumption so is this a monopoly? i don't know it's up to the public opinions and lawmakers and regulators to decide >> june, always appreciate it. thank you. and today marks one year of covid-19 we'll take a closer look at the impacto e st tthreaurant industry after the break

see yourself. welcome back to the mirror. and know you're not alone because this. come on jessie one more. is the reflection of an unstoppable community in the mirror.

nature's bounty unleashes something exciting. say hello to a drug-free way to ease stress. stress comfort. a gummy supplement with lemon balm plus saffron, to naturally boost your mood. stress comfort from nature's bounty. to naturally boost your mood. (music) anncr: give customers access to precisely what they want, when they need it the most. with adyen, the payments platform that delivers convenience for all. adyen. business. not boundaries.

typically a busy time for restaurants, but the latest data shows another drop in traffic and sales. kate rogers has more on those dire statistics, kate. >> deidre, that's right. the week leading up to christmas especially is typically a busy time for bars and restaurants, but for the week ending december 20th, the industry saw the largest drops in sales and traffic since mid-june, according to black box intelligence, sales dropped by 16.9%, traffic down by 20.9% the data are mostly reliant on chain restaurants. with covid cases spiking around the country, varying restrictions in place and weather getting cooler, things likely won't turn around any time soon. full-service concepts continue to struggle more than limited service and fast food concepts and older diners above age 65 are staying home in larger numbers. the national restaurant association says that 110,000 locations are now closed, either temporarily or permanently

10,000 of those closures happened in the last three months alone the most recent pandemic aid package is welcome news as 37% of restaurants surveyed earlier in the month said they didn't think it was likely they would be in business by june without additional aid the national restaurant association called the relief bill a downpayment on what the industry needs to survive, while restaurants and bars can borrow more than other small businesses under the new aid bill, they don't get direct relief like other industries did now, all of that being said, it remains to be seen how many of these small businesses actually take on these loans and how many will be able to survive in the future leslie, back over to you. >> kate, it's certainly been a year marked by local favorites closing, i'm sure, pretty much every viewer watching this can relate to seeing one of their favorite restaurants close this year so thank you for staying on top of it. take a look at shares of astrazeneca with brittain becoming the first country to approve the drugmaker's covid-19 vaccine. the stock up about seven-tenths of a percent and later today

don't miss an exclusive with sir john bell who helped oversee the oxford vaccine we're back in two minutes.

the bitcoin boom continues into the final days of 2020 hitting another new all-time high, now on pace for its best year since 2017. wl rhtac sy thweilbeig bk,tawi us ow. like where to find the cheapest gas in town and which

supermarket gives you the most bang for your buck. something 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 now and speak to a licensed humana sales agent to see if you qualify. learn about plans that could give you more healthcare benefits than you have today. depending on the plan you choose, you could have your doctor, hospital and prescription drug coverage in one convenient plan. from humana, a company with nearly 60 years of experience in the healthcare industry. you'll have lots of doctors and specialists to choose from. and, if you have medicare and medicaid, a humana plan may give you other important benefits. depending on where you live, they could include dental, vision and hearing coverage. you may also get rides to plan-approved locations; home delivered meals after an in-patient hospital

stay; a monthly allowance for purchasing healthy food and beverages; plus an allowance for health and wellness items. everything from over the counter medications and vitamins, to first aid items and personal care products. best of all, if you have medicare and medicaid, you may qualify for multiple opportunities throughout the year to enroll. so if you want more from medicare, call the number on your screen now to speak with a licensed humana sales agent. learn about humana plans that could give you more healthcare benefits. including coverage for prescription drugs, dental care, eye exams and glasses, hearing aids and more. a licensed humana sales agent will walk you through your options, answer any questions you have and, if you're eligible, help you enroll over the phone. call today and we'll also send this free guide. humana, a more human way to healthcare. - [narrator] at southern new hampshire university, we're committed to making college more accessible by making it more affordable,

that's why we're keeping our tuition the same through the year 2021. - i knew snhu was the place for me when i saw how affordable it was. i ran to my husband with my computer and i said, "look, we can do this." - [narrator] take advantage of some of the lowest online tuition rates in the nation. find your degree at snhu.edu. welcome back to "squawk alley. online shopping is estimated to have jumped a whopping 40% that's expected to translate to a record number of merchandise returns as well. joining us now to discuss, tobin moore, ceo of a returns

technology company that helps ikea, best buy and other retailers to manage their returns processing thank you for being here you shared a statistic that for the average return reverse logistics costs 59% of the original sales price of the item you said that a whopping 76% of customers plan to return some of their christmas gifts this year. so what does that mean for retailers bottom line? it sounds a little dire. >> thanks for having me on the show it is going to be a crazy return season for sure this year, especially with the surge in e-commerce sales three to five x the return rate is experienced from e-commerce sales versus in store. so it's going to be a whopper of one. i for one know that today i'm planning on returning some items later in the afternoon and i was just in starbucks picking up a coffee and overheard some women

talking about their day of putting together boxes to drop things off for returns. >> you also shared another shocking statistic that returned inventory creates 5 billion pounds of landfill waste each year and the process emits over 15 million metric tons of carbon dioxide. is there a way to cut down on this and make the process more efficient for the environment? >> there is for sure it's really getting as efficient as possible about when a return comes back, connecting it to its next buyer as quickly as you can with the least amount of touches and shipments in between so it's really using technology when a return is first initiated to identify where it's finally going to ending up going to be resold for the for the best price and trying to cut out all the steps that you can in between. >> hey, tobin, it's deidre i've been covering this ecosystem that's been growing to help some of the smaller

retailers, especially the direct-to-consumer names manage their direct sales and perhaps better to compete against the amazon juggernaut. so there's so many companies in the space. there's another company returnly that does something similar. do you think we'll see partnerships in this space >> i definitely think there will be more partnerships we're seeing it on a bigger scale with amazon and kohl's where they're leveraging them for express returns dropoffs we're seeing the best in class retailers really focusing on investing in returns because they know it's a way of acquiring and retaining customers. 89% of customers say that if they have a bad online returns experience, they won't shop again with that retailer so it's well worth than investment what we're seeing is for the smaller retailers to keep up with the big guys like amazon, it's going to come down to

partnerships. >> do you have -- >> go ahead. >> i just wondered, are you seeing more retailers come to you guys and perhaps taking their products off amazon because -- so you don't compete with them in terms of stuff that you guys may sell? you're very focused and there have been worries about how much data certain retailers want to give to amazon or walmart for that matter? >> well we work with the retailers on the return side a lot of retailers are using us to manage the returns. so help them by providing self-service online returns portals which is more important than ever today, where people don't want to do things in person or stand in line so they'd much rather process a return on their phone by themselves or at a computer. we're also helping them with express returns locations, so we partnered with staples to allow any of our clients to have their customers do express dropoffs of returns at staples stores around

the country and this allows them with a qr code to initiating the return on their phone to be able to drop off and within seconds scan a qr code and do a returning in eight to ten minutes. >> i was going to ask you just real quickly, in discussion with some of those partners, what are their expectations in terms of 2021 in terms of the breakdown between online e-commerce and traditional brick and mortar purchasing habits? >> well, while covid is still going strong, online sales will continue to be strong as will the returns. you know, right now during this holiday season, which the returns really spans from mid-november all the way through january and even february, we're expecting to see $115 billion of returns this year. you know, we expect it to continue afterwards in the new year's and even after covid is finally over you know, people's online

purchasing habits have really gone up and so have the customer expectations, which includes easy returns experiences. >> excellent well, tobin, thank you so much for joining us and sharing your unique insight over to you, david. >> thanks for having me. >> okay. leslie, thank you. as we head out here at "squawk alley" we can take a look at markets that are still up abo about 0.23%. time to sendi it over to scott wapner for "the halftime report." mr. faber, thank you very much welcome to "the halftime report." i'm scott wapner this record-setting market, what 2021 will deliver for your money. that is, of course, the big question so much to discuss and debate with our investment committee as always joining me for the hour today, joe terranova, pete najarian, steve weiss, shannon i