. good morning it is 10:00 a.m. in grapevine, texas. it's 11:00 a.m. on wall street and "squawk alley" is live sn♪

happy tuesday. welcome to "squawk alley." is it game over for the gamestop rally? shares getting crushed this morning. down about 58% along with several other stocks while the major averages are surging. silicon valley, congressman and the dean of evaluations all weighing in on the gamestop and related trades and the continued disconnect in the markets. but that's not all we're watching deidre >> john, we are watching valuation at large over the last few years,

startups in this space have raised money at a dizzying space. robinhood and financial services second but the robinhood slowback could raise a question has regulation been an overlooked risk and coulso evals tweeting about his ask me anything on reddit talking about wall street bets right now we will get to that in a moment as we watched gamestop collapse today. dig coslow is with us. dick, always good to see you good morning >> good to hear you guys i would love to be in the studio with you maybe some day soon. >> we are looking forward to that day we are watching gme obviously go back to levels that we saw about

a week ago the game is not over by any means, should hedge fund regulators be drawing from the past seven days? >> i mean, there are tons. the first which is probably obvious. it should have been for everyone, the music was going to start there sooner or later and always sooner than later so it's no surprise it is falling back down to earth and i feel bad for the people. you see a lot of articles about the guy that made a million bucks in it. i feel bad for the people losing money in the late going. the second thing that has to happen is, the sec has to demand that hedge funds declare what their short positions are. they have to talk about, announce what their long positions are, that they can be short. i think on the short side very quietly. that causes all sorts of problems they write these articles or quote/unquote research reports that don't announce they're a short position and make it look like it's independent research on the company it causes all sorts of problems

and i think thirdly, the issue for robinhood, i told them their lead investor, if you are selling the risk on the back door and the front door says free trades, you will get into trouble sooner or later. when it caused problems for them, people created conspiracy theories and they weren't clear with the users what the problem was, if they were under collateralized that's a hard word the roosters, the chickens come on to roost now. >> that said, it doesn't look like robinhood is facing an existential moment. >> look, it was a family strategy and it was a bigger failure of communications. i think the country will recover from it. they have to stop. they sort of keep shooting from the hip. they created the bank, hey, we're bank a couple years ago and two days later, found out there were all sorts of

regulations that you should have considered now they make the communications announcement in a rush instead of seeing if they can raise very short-term financing from a bunch of their investors to collateralize the trade. if they have lovers that use them regularly, i think they will be able go public later in the year in the short-term, they've lost a bunch of good will from commerce that's recoverable but you got to stop shooting from the hip >>. >> i'm looking at gamestop trading now. i want to know, it's been down before it could go back up to 300 or drop down to $10 bucks there are a lot of things that could happen here. i want to talk about the retail investor in haul of this, though i think unfortunately and wrongly this has been set up as the retail investor versus the

hedge fund you are for the reveal investor. if you say anything bad about gamestop and its valuation, then are you in favor of the hedge funds. look, there is a failed value for gamestop and it's probably lower even at $100 bucks a share the way people usually value stocks because it hasn't been growing and its business model is a thing of the past what's the retail investor to take away from this volatility that we've seen in this and other stocks and what does it mean for trading going forward >> the retail investor should take away when people stir the pot and blend these ideas, it's the early people that will make money and everybody late to the game will get jammed that's what's happening. the early people were able to execute the short squeeze in the hedge fund a lot of people are squeezed alongside washington watching their investment and so forth, if they're getting jammed,

they're going to have to cut their losses here. it's not the case they can continue on for weeks. what will happen in the future is they will ask a shorter period of time because people will learn a lesson, i got to get in and out right away. so i think this is probably, you know, a one or two-time thing and people will, unfortunately, learn a lesson because they got jammed i will go back to one thing dedre said the fintech space has been consistently under appreciated and under valued when you look when square went public, its valuation was orders of magnitude lower than today. when build.com went public, it came out at 2 billion. we have people at chipotle and spot-on, a point of sale company who have seen a tremendous

acceleration even during covid spot on is point of sale company, you would have think they would have gotten jammed by and squeezed by the pandemic it's accelerated so i think these can be much bigger than anyone thinks. >> right and, dick, i do want to challenge you on that. because i tend to believe they have been seen as technology first, financial services second now perhaps investors, perhaps they could be reassessing that hold on, i can't stop looking at this red did with moork cuban. carl mentioned it at the top he is answering questions and says regarding gamestop, if you can afford to hold the stock you hold why? because when robinhood and other brokers open it up to buyers, then we will see what wall street back is made of he is saying that robinhood created this dive, calming it the robinhood dive

i wonder, what do you make all of this. it seems he sick nighting this trade and sort of fuelling the wall street best group, plunge grow $100. >> mark cuban owns the dallas mavericks. it's easy for him to play russian roulette with your money. that's my competent on that. i think that if these were people that have to sit back and go, hey, hang on don't worry the water is fine. we're all good it's easy to do that when you own an nba basketball team >> so do you think he's being sort of irresponsible here by telling all these retail investors? >> yes, i do you know, it's not, no one is investing based on the fundamentals they're investing based on momentum and people, follow me, everybody charge you know, if you are the one charging and everyone else takes a step back, you will need more

money. i don't think that's particularly ways. you know, mark has a very strong opinions and a bunch of other people have been on the show saying the same thing. it's the retail investors versus the hedge funds. i don't look at it that way. i think a lot of people will lose a lot of money they don't want to lose. >> back to you, dick, your argument that you don't think thin tech is overvalued. i hear you, given the digital transformation, but regulartory risk ant group in china, knocked down in the last few weeks. what makes you think the same thing couldn't happen here particularly as regulators start to get an eye on them? they are valued so much higher than your traditional banks. >> yeah. you know, you mentioned earlier, are these really technology companies? you and i had an argument on the show about wework. just because you write technology doesn't mean are you

a sector company we all saw what happened there i do think most of these thin tech companies are tech companies. strike, chip olty. spot on. square these are technology companies i would separate maybe the stock trading companies out because they're not necessarily the same types of animal. what i mean by that is these thin tech companies like squares and stripe and chipotle and spot on and on and on, they can grow forever. they have an infinite total aggressive market. every customer and kind of company in the world that could use them will use them the free trading apps. they're a bunch that compete with each other. they're all down to free trade and there aren't an infinite number of retail investors that will trade stocks all day. i think the trading apps will get a lot more regulatory attention than the spots and squares and spot-ons in the

world and the international audience continues to grow like a weed i think they consistently come to market, because people don't understand how big they can get. i think that will continue to be the case >> dick, finally, when you watch the reddit community and see cuban sort of telling them to hang tough then you watch them turn to silver i wonder what you make of that goldman has a big note out this morning which essentially explains why it is physically impossible to corner the market in silver, i guess you could try to do with gamestop. does that reflect to you that their aspirations are unreasonably large >> yeah. i'm not sure what it pivoted the commodities on day two not to make too much light of the situation. first of all, most of the hedge funds are long commodities, hedged against other things they are doing. it's not like you will squeeze

citadel and point 72 and melvin capital out of silver. they are already long silver now you are just really playing, you know see who is on the merry-go-round when the music st stops and people will get out of luck like they did when they released gamestop. it's gotten silly. i get the idea it's sort of gotten silly at this point they're not doing or hurting anybody than the people late to the game >> dick, it's a lot to process last week has handed us a lot of curve balls. thanks for helping us to understand it better we'll see you soon >> thank you for having me >> meanwhile, keep your eye on dallas morning, goldman price target of $96.

currently trading at77 $ bucks find out why we are back from just a moment >>

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. take a look at shares of gamestop now they are down about 50% from where they were. they closed yesterday. it's been worse at times since today's trade down 60% or more but keep in mind, this is a stock in the single digits mere

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welcome back to "squawk alley", the major indices are hi harder, having a hard time we are joined by mark cuban fresh off his ask me anything on reddit and, mark, i believe you feel we got some things out of context about what you were saying to the editors. >> i wasn't telling people at all. i said, any of us that traded long enough have been through the pain of making mistakes. the key is learning lessons, if you hold your stock, if you afford to hold it, i'm not a fan of selling into a diving mark. so i told him to hold on i certainly am not encouraging anybody, but that said, i am a

fan of what's going on with wsb and i like the idea of this collective buying. i think it could have an impact on the markets in the future >> gamestop is halted, we want to mention mark, here's my concern about some of what i see happening, including our wall street best people are saying, hold the stock. here's why no matter what happens, it's not clear who these people are, what their track record is, what stake they have in this or dumping it i am all for the retail investor so often we see these cycles, where the market gets high value, retail investors get in their trading, maybe day trading. things go down they get disillusioned and go. i don't think it's good for retail or the market either.

>> i look at it differently. i think 25 years ago you would have been absolutely right, because it was more difficult to acquire information. now the information is so readily available and it's supposed to all be public information that we all having a says to and no one is supposed to have an information advantage. so i think you know groups like wall street best, you know, aggregate that information in some cases and you can be a smart investor and still be a small retail investor and still you know become a part of this unwired network that buys together i get your point that we don't know who is making these recommendations. but you are not looking at one individual or five individuals acting as an analyst and give them authority you are talking millions -- not millions, let's sea tens of thousands of people posting and the information on wall street best is one source of information but it's just kids today, younger generation look at things differently, i think

what's altered my perspective on it is what happens in the cryptomarket, huddling on for dear life has worked for a period maybe bitcoin, etherium, et cetera, will go down again at the same time we are starting to see the evolution on block chin chain. younger kids, gen z, millennial's maybe have a different approach to how they look at stores of value. how they look at how assets are priced than we looked at traditionally. let me just add, look, the far k -- narrative, discounted cash flow, those are all subjective we have been told by wall street, the lower the growth rate, then that's an indicator that the stock will do great things you know, in terms of asset

valuation. that doesn't necessarily hold in a digital environment the same way it did in the past >> so that's really interesting, mark by the way, we had a halt on gamestop, so are you saying that the millennial generation and the way in which technology has caught up to trading will make it obsolete? those have lasted for reasons, mark >> they used to trade salt for gold things change. you know, i'm not necessarily going against warren buffet and graham and dodd. what warren buffet can do is come in and take a company and take it and monetize it in a different way. but how people value assets is changing in a low interest rate environment and you know we are looking at stocks because we've seen what's happening in gamestop we have thatt what's happened ir

alternative assets trading cars or digital trading cars or artwork and we celebrate when somebody that we presume is smart comes in and pays some incredulous amount for a piece of art we celebrate when you know the michael jordan rookie card has gone up 700% in a year or less and we don't just presume that the people buying trading cards are just dumb investors. trades are going to happen. >> yeah. that was my next question. if it hasn't been for money supply going to the moon and everybody stuck at home. those trends are their retically reversible are you saying the consequences in the short term are irreversible or not? >> no, i think this is real. bitcoin and etherium are teaching us interesting lessons.

you know, i posted a poll on twitter. and i asked, how do you consume your information about stocks and comparable assets? video or by reading? and then i asked, how old are you? 25 and under or 25 and older and the result was 36% of people consumed their first information via video and 35% of the people who answered the poll were 25 and under. you know i see that with my kids they don't go online to read sec reports. they watch videos. that's how they get information. the point is, different generations consume information differently and they also value things differently generations now, particularly gen z that has grown up with an iphone, they put a premium on digital the idea is that a digital

trading card or artwork could have more value than something tangible in our minds or physical would be inconceivable to many people, yet to gen zs, that's what makes perfect sense and so when it comes to stocks, it's the same thing. i don't think so they look at them i never have either. i've never looked at stocks that doesn't pay a dividend as the current value, discounted value of future cash flows to me, that was always a narrative that brokers use to sell stocks. it's what someone will pay for it i've written blog posts 15-plus years, i was taught you get long and loud you get out there and create more buyers for the stock price and it goes up that's what's happening here, except it's wall street bets that is doing the getting loud i think now that they have recognized their power and learned some lessons, we will get more of it not less of it

it won't be a set of circumstances where all these people lost money and will go home with their tail between their leg and will never do it again. i think their perspective is different. >> all right you called in because you said we have some of your comments out of context but i simply read what you have written on the reddit ama. i will read it again you said when robinhead when they open back up, to buyers, then we will see what wall street best is really made of. that's when you get it all to work i wonder, what are you making it work here? at a certain point here, wall street and the funds that were being targeted originally, they can started to benefit from this we don't know who is in this trade. also, if you are encouraging more trades through robinhood, isn't that, in fact, handing more money over to wall street because the market makers are

making money through work flow what is the issue here >> the other thing i pointed out. i think you read it. robinhood created a big part so you have, the biggest artificial impact on what happened to the price action in gamestop and some of these other stocks wasn't so much what wall street, what the hedge funds to did or small investors did it's the fact that when robinhood shut you down, the robinhood dive, you took out a lot of natural buyers. you know when sellers come in, if there are aren't buyers, sellers keep on all overering their price until they find buyers and this stock goes down. because robinhood didn't have enough capital to deal with the amount of har gin loans made and the volatility requirements, they had to shut down that natural flow of buyers that was the only aberational thing that happened. yet, we seem to not be taking that into account. so what i said is when they opened it back up -- first of

all, i also said, that you shouldn't trade at robinhood you need to go find an online broker that has a multi-billion dollar trust balance sheet so this doesn't happen again. that was the greatest problem. we don't know what the true demand we won't know what the true demand for gamestop or ac and whether wall street bets could truly have an impact on how we value this company because of what happened with robinhood and the other online brokers that shut off buyers. right. would you guys agree with that >> so. well, so then do you think that robinhood could have done something differently? i mean >> yes >> they have been in the media and on clubhouse saying that was liquidity issue. hold on a second, the other broker annuals use the same business model right. are you saying they are simply better but they also had to halt trading. >> i couldn't give you the list of the balance sheets of those who did that shutoff i do know, i was told they were

some of the biggest ones that didn't shut it down. what robinhood could or should have done is faded to them, look, guys, we have capital constraints and o my god, we are getting blown away by all of this we are going to have the restrict the sec should have been out there saying the exact same thing. >> mark, where do you go >> to what you were saying, mark, i want to go back to what you were saying about the way companies have valued. >> sure. >> i think that's so important for retail investors i completely get and embrace what you are saying about digital versus tangible. but when we go to valuations, price to earnings, things like that that still strikes me as being pretty important especially in a situation like this >> no you know what the ratio has done, price earnings ratio was a narrative created to sell stocks look at -- >> it's also - >> you are investing, you are

buying a share of future profits. >> no, you are not maybe back in the day. no, you are not. let's talk about that. >> so you are saying apple is worth more or trading at a valuation, market cap more than $2 trillion just because it's popular not because iphones make a whole lot of money and are really profitable? >> they go hand-in-hand. >> the amount of cash that they have generated, the value of the design and ip, what they are doing with chips, none of that matters, it's just that it's possible >> that's not what i am saying that's a part of why people buy. what i am saying is what do you own when you own a share of stock in apple apple pays a dividend, it's not a stock. what rights do you have as a shareholder when you own a share of a company that doesn't pay a dividend do you if that company has a lot of discounted cash flow, are they and they don't pay dividends and

they're not growing and they're not investing, maybe they buy some shares of stock back. maybe they issue more options for their executives what do you truly own? there was a point of time pack in the day when you owned a share of stock, you felt like you were an owner of the company. now they have multiple classes of stock you don't own anything what you own is the right to sell it to somebody else it is effectively a digital representation of, you know, a share of stock that gives you the right to sell it or no, you nope, to buy it from somebody else >> so you are saying that it changes in -- >> all right you are saying the changes in ownership structure, i mane, you are not no longer a shareholder. you just hold a trading instrument >> it's not like if you go back the to my blog post of the early 2000s, i can do the same thing right. i haven't changed my position in all these years and supply and demand matters why do you think, you know, brokerages have analysts that go

out and make calls and go out on cnbc and come on and talk about the calls that they've made and the things that they see happening you know, they want to create demand. the reality is they shouldn't. if it was truly about ownership in the company, no analyst should go out there and say anything because you want the stock to stay as low as possible so you can own more. right? you know, it's -- >> well, i mean, whether you're a reddit trader on an institutional trader, you cave research, mark that's what the banks sell, that's what analysts sell. there is value in that. >> i'm not saying there is not value in it. i'm saying, look, if i am a client of your research firm and i pay you for it, great. but when you go on cnpc and talk us up, talk up your book you are saying, i am creating more demand to create an exit or just to inflate the price. when in reality, if you truly were an owner and you had additional capital, you want that price as low as possible

because you want to own as much of the company as possible that's the warren buffet, that itself graham and dodge approach, keep that stock down because it's under valued, i want to buy more that's not what happens. we go out and get long and loud, because everybody wants that price to go up, because that gives them an outlet to sell it. i don't see any difference between that and what wall street bets is doing now i understand your point that an analyst has more training, more background, hopefully not more information but at least be able to share that and maybe somebody on a message board does not and maybe they're just lying or pretending or whatever. i get the difference there but at the same, the goal is the same, you get long, you get loud >> so, mark, is there a world in which you know gamestop can sustain a $20 billion plus valuation and what is it is it simply a store value, completely removed from fundamentals do you think there is some of that with these other names?

>> it really comes down to look, if ryan koen, i don't know him at all has had success with chewy.com and he put up a lot of his own money and bought 12, 13% of the company now, he's truly an owner owning that much stock, he put himself on the board he put other individuals on the board and he invested in a company that has about i don't know, 30, 35% of its sales that are on ecommerce, so they're doing all they can to be a store driven >> you are talking number also then your -- >> no, you asked me about the future of the company,reon why somebody bought the stock, right, and investing how much money own ryan invested to actually take ownership in the company and influence the operations of the company. that's one type of buyer and owner. that's great

if you buy enough for the individual trader. that's the narrative >> how do you justify that i guess my original question is how do you justify a 20,000 plus valuation. are you familiar talking fundamental also when you talk to the wall street bets group, you say it can keep going up and up, what is that based on >> it's based on supply and demand, if you bring in enough buyers >> what is gamestop, a store value at that point? >> yes like any non-dividend-paying stock. right. look, the idea of having a trillion dollar market cap in a company would have been laughable five years ago, ten years ago. the idea that a market gap would increase $600 billion and more than you know almost any a other s&p stock in months would seem

incredible we would always say, the fundamental also could never support that right. it's supply and demand how many buyers and how much money is chasing it. now with low interest rates, there is so much money chasing it this is nothing new. right. it's nothing new at all and there was a time when if a company went from $100 million mark ga cap to $700 million market cap because of all the supply and demand and we knew where the demand came from, it was just, wow, that's crazy. but it is what it is now, we're only -- >> because it came from a message board? >> no i'm not questioning it because it came from a message board. i appreciate what they executed in the short qwiz and the foresight it took to recognize kind of the discrepancy there in the degree of short selling that was going on and what was likely to happen. but i want to go back to

fundame fundamentals gamestop had a 100 billion revenues in a quarter. the iphone margins are amazing ipad is surging. they're attempting this vertical effort with chips in max, et cetera, long game, long play with apple, so, i mean, more than a $trillion dollar market cap on apple in that sense is not surprising but it also concerns me that we tent to have these conversations about fundamentals don't matter. when the margin major endis cease are at all-time highs. we don't have these conversations when they're at lows then it's talk about dividend-paying stocks and fundamentals and a stock-picker's market. so it's strange to me. maybe give me a sense of the context of time in which you are saying this, that these conversations tend to happen when things are looking pretty pe kid and the long-tail of

retail investors are piling into the market when you in retrospect there often isn't a lot more upside. >> yeah. that will be true. you know, you could be exactly right and this is the exact top. we don't know. it still comes down to this what are the ways that you can make money when you own a stock you know there is basically two ways. you can get a dividend or you could sell it. >> or you can sell it to somebody else. yeah mark, when you are on "shark tank" and you want to see cash flow, why are equities different? >> well, because, one, i get to influence operations two, i'm looking to actually be paid - >> theoretically you can do that through proxy. >> well, no, but let me finish, i'm looking to make -- when i make a profit on shark tank, i'm

looking at a profit. i have always excluded dividend-paying stocks because dividend-paying stocks will give apple with a $100 billion quarter, you want to see them raise their dividend. you know, or continue to invest so that at some point in the future they might raise their dividend but there's got to be a payback in my mine so on "shark tank," that's what i look for are they going to be able to write me a check out of their profits every month. trust me, i got a lot of companies that do just that. we work out deals with the owners, the entrepreneurs that say, you know, entrepreneur, you own 70%. i own 30%. if we make $100,000 in cash flow that we don't need to invest back into the company, you keep 70 of it i get 30 of it we gladly pay our taxes on it. you don't see that when you own a stock in a public company. >> yep >> so, if we're going to take on the bit of our conversation, the practical parts, it sounds like

you are saying two things, one is the regulators should have given robinhood some political cover. yes? >> no, i this city regulators should have explained up front what happens when you have your stocks held at a company that doesn't have all that strong a balance sheet relative to the number of customers that i have. it's not that robinhood was a bad company. it's not it's a great idea. it's a great concept it's well run. it's a good company. but they're not the first business to have too many commerce and there's other businesses that have gotten crushed because they had too much demand. that's what happened to robinhood and the sec should have made that clear that that was a risk when you are a customer of a brokerage that could find itself under capitalized if the growth rates are too quick. and the transactions are too high and the margin lows are too high so the sec said nothing. robinhood effectively said nothing. all those brokerages that are in that position have said nothing. that's a problem

that's unfair to all those investors who went in not having any clue that their broker might not have the capital to support their transactions that is the piece that i don't think is being discussed enough. because that impacted the price of the stock in my opinion only as much as anything else that's going on. >> mark, you've said, you know, you've given your advice to some of the retail investors that are currently holding gamestop but i wonder, what do you say to the retail investor who wants to chase the next mean stock? where do they get in and is this a practical message to apply to other stocks like this >> i forget exactly what i wrote. but i answered that exact question i said, look, we have all gotten burned you learn from your mistakes the one thing are you going to do is you got to do the work you got to do your research so you know all you can and you also got to realize that day trading means all day

trading. you have to always be on looking at what's going on that's what i told them. >> how do you do your work how do you do your work, though, are you not looking at fundamentals because they are getting so detached from that? seriously, what is the practical way of looking at this you are not sure what is on the move other than supply and demand. >> i can make as strong an arc strongly attached to fundamentals i pulled up the holiday sales report they did 1.77. >> at what valuation >> but let's put that aside right now. they did 1.77 billion dollars in sales in the fourth quarter and 34% of that was fr ecommerce for easy numbers they did $600 in ecommerce in one quarter. now with ryan koen coming in, let's just say he can continue to increase that so you have a $2.4 billion going to $3 billion sales company.

are there other ecommerce companies that are valued at ten times sales? yeah are there other ecommerce companies valued at 20 times sales that are growing like that yeah so, the narrative is there if you want to talk fundamentals, you can create that narrative. >> as people still try to do mark i got to tell you, viewers have loved this discussion. we really appreciate you calling in you always give us something to ponder and think about. >> i appreciate it, guys, thanks. >> mark cuban. all right. we'll see you later. as we watch both gme and the s&p, which has gone to its best one-day gain since november 5th. "squawk alley" is back in a minute ll i'm an existing custom and i'd like your best new smartphone deal. oh do ya? actually it's for both new and existing customers. i feel silly. but i do want the fastest 5g network.

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welcome back our next guest says the gamestop trade and reddit revolution that retail investors are through letting hedge fund investors treat it like it's their own playground congressman from the oversight and reform committee congressman, i want to get straight to the reform or change that you think is called for in light of what we've seep here. is it mainly focused on short-selling? >> short-selling and more capital investments. what i would say with robinhood is they should have more capital requirements or more requirements for disclosure and

transparency either they need more capital reserves or need to tell their retail investors what they are going to do and on short-selling, we need to have again higher capital requirements for getting loans for short-selling and have the uptick rule, which was in place from 1938 to 2007 that restricted basically put restrictions on short-selling. we instate them. there was no reason that should have been removed. >> now, there is more that's come out about exactly why robinhood did what it did and you are talking about liquidity here what do you think the retail investor in this environment deserves, whether it's in terms of the information that they having a says to the protections around trading i mean, being able to trade on margin trade options under what circumstances, et cetera >> well, they first deserve transparent sip. robinhood has a service that said, you can create a list of stock that gets too hoot, in

which case, we're not going to cover the capital requirements of clearinghouses. so they need to have transparency i think if you have higher capital requirements, you would force the model of a robinhood to be able to create and then they need to have symmetry i think retail investors aren't being able to able to trade you shouldn't be allowed to have hedge funds trade which have higher collateral so there needs to be more independent looking at what symmetry would entail for retail investors and hedge funds. >> it's deidre transparency has been a big topic whether robinhood user, and how much is robinhood at fault here you said you take a look at them and other platforms and are some of the other platforms better because they rely on a different business model they don't earn revenue for payment through order flow >> think the biggest thing

robinhood has been at fault in with a lack of clear honesty i saw the ceo on television. he said it's not a liquidity event and he said what he meant is not a future liquidity event. they're parsing language and not being honest and they should just come out and say and as cuban was pointing out they didn't have enough money to cover the trades and they didn't revise their business model. the second thing is that the clearing houses may be at fault and we need to look at where the clearing houses are. the clearing houses have a relationship with the hedge funds. we need to look at whether there is a level playing field and whether institutional investors have a leverage over retail investors and how do we level that playing field >> right sells data to the market makers. congressman, why did it take this moment, the extraordinary events of the last week or so to look into how robinhood is regulated or not regulated and

how those stand? do you think this will be sort of a moment that regulators look into other thintech companies, many of which have been expanding their financial services at a faster rate than banks in some cases and have reached far higher valuations than traditional banks >> it's a funny thing how politics works and public opinion works. often, it takes a galvanizing moment that captures people's imaginations and moments and here people are used to hedge funds making tons of money and they're used for folks talking down stocks and trying to manipulate the market and finally youio see folks beat the hedge funds at their own game and right when they're winning they're not able to continue trading and it struck how it is fundamentally unfair and that's how the whole system is going to be looked at and we may see finally the reforms that we

need >> congressman, we did a bit earlier this morning about the percentage of stocks that are owned by high net worth individuals in this country and when a challenge it's been for decades to get more americans invested -- i mean really invested in the market i wonder if you think this whole phenomenon and episode will make that more challenging long term. thanks for raising that, people forget that 50% of the country isn't in the stock market. most of the assets are held by the top 10% or 15% so one of the things we have to do is think whether we have an overfinancialization of the economy. how are we going to get more productive investments into advanced manufacturing into things that will create good paying jobs and not just speculation. i don't think the market is totally divorced from fundamentals i represent a district with apple computers and people are placing a bet on the future digitization of the economy. you can question whether that's right, but i don't think fundamentals have no place in these bets, but i do think there

is an element of speculation that has obscured the fundamentals and that has made the economy work for very few while not having wages rise. >> right, congressman. you bring up a good point there. having more participants in the market many agree is a good thing and lawmakers and regulators are walking this fine line here in trying to create safer environments and not angering the retail investor, as well and how do you think of the balance and the moment that we're in right now where it seems to be retail investors versus the establishment >> i think you put more of the burdens on the institutional investors and on platforms like robinhood. mack sure that you're increasing the collateral requirements and hedge funds and more stocks andiand you can have higher capital, and will some of them make it harder

for retail investors to trade? i'm sure that's the case, but that would be a better situation than what we have now where the retail investors are at a systematic disadvantage to the institutional investors. >> congressman, we keep using this term retail investors, but largely we're talking about traders and we're talking about day traders and that's a very, very small segment of the overall population much of which is, many would argue underbanked and underinvested and what sorts of incentives and disincentives do you think either should be set up or should be put in place maybe you think everything's great as it is to encourage equity participation in a healthy way? >> that's a great point. the -- some of them were individuals, but a number of them were day traders or there were reports that some may be hedge funds on the other side. so the story is much more complex.

i believe what we need to do is have government, private sector partnerships to reindustrialize america and the federal financing bank at treasury should be providing loans to build electric plants and solar plants to build the new industries of the future and then have more people participate in those companies employees, and giving them stock in equity so that you actually have workers participating in economic growth. we have an economy that's really not creating jobs in the same way as industrialization did and i believe it's overfinancialized and that, to me, is the whole lesson of this saga. >> all right congressman ro khanna, thank you for joining us. >> the earnings rush does continue after the bell today for big tech both amazon and alphabet set to report we are back after just a quick break.

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your daily dashboard from fidelity -- a visual snapshot of your investments, key portfolio events, all in one place. because when it's decision time, you need decision tech. only from fidelity. >> guy, great sche our thanks to mark cuban and

dick koslow. we'll continue to see how it worked itself out and it got to a slow of 74.22 and it did unwind and manage to rebound don't forget tonight amazon and alphabet currently trading up 1% to 2%, i believe and before we move on to tomorrow with other big names like paypal and spotify. let's get to the judge. all right, carl, thanks so much welcome to "the halftime report" i'm scott wapner what amazon and alphabet's results mean to the faang trade and of course, the overall market we discuss and debate that with our investment committee joining me for the hour today are stephanie lane, josh brown, jim lebenthal, degus wright is with decatur capital management and i'll take you to the wall and show you where stocks are trading today and yes, they're ripping higher and there's a lot of focus on tech and the dow has

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