help yourself ♪ ♪ living on the edge you can't help yourself ♪ ♪ living on the edge ♪ >> good morning, everybody, welcome to "squawk box." this is cnbc and i'm becky quick along with joe kernen and andrew ross sorkin. welcome to "squawk box." let's take a look at what's been happening with the u.s. equity futures at this hour yesterday was a bit of a muted session, mixed session, the dow and the s&p 500 were both up slightly higher. they were each up by about 1/10 of a percent the nasdaq gave back two points, that's it. you can see this morning that the dow futures are indicated up about 44 points, the s&p 500 now up three days in a row i indicated up another six points and the nasdaq futures up by about 57 also take a look at what's been happening in the treasury markets and you can see at least right now, we check the ten-year, we look at most closely, yielding 1.138%, that field staying steady above 1%.

also we will do our obligatory check of the reddit hype stocks. let's take a look at gamestop. it closed higher by 2.7% yesterday after the huge down day the day before, down by about 60%. right now, it's up by about 4.9%, a gain of $4.50 to 96.93, and then there's amc which finished yesterday's session 14.7% higher right now, that stock is up by about 1.1% robinhood, by the way, has also raised its trading limits allowing users to increase positions of gamestop to 500 shares, and amc to 5,500 shares. also, remember just two days ago when elon musk said he was getting off twitter. yeah, that didn't last very long overnight, he's been tweeting, and it is driving up doge coin significantly. it's up by 72% i don't even follow this or know what's going on with it. if you look on twitter, i did

see these tweets, elon said doge coin is the people's crypto, he tweeted other things, no highs, no lows, only doge it was original this made up crypto it's got this dog for a symbol, you know, what are those dogs called, the sheeba, the dog for the symbol, there's another one he tweeted saying you're welcome, with a picture of his face on rafiki, the monkey from the lion king, holding up simba with a face of the doge dog on it stuff like that still out there. he mocks the shorts with some of his tweets under night i have become meme destroyer of shorts this fight against the shorts carrying on through elon musk with his tweets overnight. andrew >> i don't know where to go from there. thanks, becky. we will go to a piece of news

right now, and it's a big piece of news. apple close to finalizing a deal with hyundai and kia to manufacture an apple branded self-driving electric car. i want to get straight to the man who has the news with exclusive details. phil lebeau. great reporting. >> andrew, yes, it would be an understatement to say that this would be huge not only for the auto industry but also for apple. when you look at what is possible here, the multiple sources who tell me they are working towards a deal make it clear these are talks that have been going on for some time, and that they are moving towards a deal whether or not it gets finalized, that remains to be seen they're keying in on production at the kia plant in west point, georgia. that's about 90 miles southwest of atlanta it would be an autonomous electric vehicle, scheduled for release in 2024, but the people i talk with say, look, that could get pushed back to 2025. 2024, they're going to have to start making steps fairly quickly if they're going to meet

that time line here's the most important part it would have apple hardware and software in other words, this would be an apple car. this would not be apple software underneath a kia model this would be an apple car, they're keenly focused on making sure that the user experience, by the way, it fits in with the apple ecosystem. that's a big part of this. the kia georgia plant, it does have the capacity available and there is the kia skate board hyundai kia has an ev skate board. basically think about that as the platform underneath the vehicle, it can be adapted, depending on what the top hat of the vehicle would be that could be utilized by apple as they're working on this apple car. we've reached out to apple yesterday, it declined to comment on this report or the questions we had for them. we also reached out to hyundai kia. hyundai kia spokesperson declined to comment on the questions that we put to them regarding finalizing a deal with apple. one other stock or a couple of

others i want to focus on here, general motors, why take a look at general motors. clearly if apple does develop an apple car and gets into this ecosystem with let's say, a vehicle that is for row bo taxi eventually it would be a vehicle that perhaps, there may be vehicles that perhaps people would buy, as part of their own personal i'm buying a vehicle, i'm going to buy an apple car. what are the implications for general nomotors and all of the auto makers. we talked to mary barra when reports were bubbling up we asked this specific question, what does it mean if apple gets into this game here's what she had to say. >> we consider apple to be a formidable competitor, we're working with all the capability we have, with our technology to go as fast as we can, to really satisfy and delight the customer in our vehicles and create that

relationship and just a incredible overall ownership experience >> one other auto stock to take a look at, ford, and we're showing you ford, obviously because of the implications it would face if there's an apple car but also because ford will be reporting its q4 results after the bell today and guys, i'm sure there will be some questions during the analyst call for ceo jim farley about the landscape in terms of competition. maybe not a specific question on apple getting into the auto business as an auto maker, but clearly this is a space that is developing quickly and, again, we have talked with multiple sources who say that apple and hyundai kia, they are moving down the path towards finalizing a deal for production of an apple car in georgia guys, back to you. >> well, phil, i have so many questions for you, starting with this, and i first wanted to ask you this actually yesterday as i was watching you break the news

on the air i'm glad we get to do it right here, which is, you made a couple of references to the idea that at least initially this car would be used for last mile transport. >> correct >> that it may not be a consumer car, at least initially. what are you thinking about in that respect, and when you talk about it being an autonomous car, is that a fully autonomous car without a driver >> well, the idea is that it would not require a driver now, look we're in this strange area here, andrew, where fully autonomous vehicles, while that technology is being developed, we have not yet hit the point where, a, it's robust enough that you see it on a regular basis. yeah, we say waymo working in a gio fenced area in the phoenix area, and you have seen a number of companies apple is testing autonomous vehicle technology in california there are a number of companies that are testing it there and in some other states. if you're going to get it to the point where let's say you're at home, andrew, and you say i want

a robo taxi, and i want the apple car service, let's say app sl operating that service or some other firm is operating that service we're a long way where that car picks you up and takes you somewhere and there's no driver behind the wheel, at least on a nationwide basis that's a regulatory hurdle and questions that are going to have to be figured out in washington. they're going to have to come to some agreement in terms of standards as well as what's the technology that's out there? what's the minimum safety requirements that are going to need to be met >> but explain, then, the rationale for apple to start as a robo taxi service or enterprise style business -- >> they want it to be a differentiator look, could apple immediately go out, buy a plant, start building an electric car right now, absolutely th they've got the money. there's no shortage of plants. there's overcapacity in the auto industry around the world. you want to do that.

you can do that. what differentiates that car nothing. nothing would differentiate that car. you make it autonomous and electric, now you've got the differentiating experience, and if you're apple and the people i've talked with who are familiar with apple's plans, they have said it time and again, apple wants this to have the true apple experience for the consumer but it's got to be differentiated how do you make it differentiated, you make it autonomous, and electric that way you can say whether it is to a robo taxi service or a package delivery firm, you want to conquer that last mile, the most difficult part of the transportation puzzle that's trying to be solved, we can bring the answer to you with an apple car. >> hey, phil, you talk about an apple car, and i can't help but think about how many more semiconductor chips that car is going to require, and that gets me back fo news we have seen, a group of senators went to the white house to ask the biden administration to help them out

in terms of getting more semiconductor chips. there are a lot of plants that have had to shut down production or slow production because they can't get enough of these chips in part because of some of the issues that the trump administration did in terms of china and limiting the back and forth with the chips what's the latest on that? is there an update >> those senators would like, and by the way, the letter to the white house came from senators from auto production states so we're talking about ohio, michigan, wisconsin. >> indiana, ohio, yeah. >> tennessee, indiana. they would like the trump administration, a, to put this on the front plate, front boiler in terms of, hey, we need to figure this out, and they would also like the trump administration to consider you -- i'm sorry, the biden administration i apologize. old habits, they change. the biden administration to consider the defense production act possibly in order to move the chip makers to add production i'm not sure that that's going

to go far with the biden administration keep in mind, becky, this is a worldwide program. why is it a worldwide program? i know people want to focus to a certain extent between the trade relations between the trump administration and china and the implications for the semiconductor market, but keep in mind, when all of the auto makers around the world basically shut down production back in the spring of last year, what happened? they turned to their supply chains, and their semiconductor suppliers and they said we're not going to need as many. we are drawing down production we're just not going to need many you remember at the time, becky, a lot of auto makers thought, we're dead in the water, at least for six months we're not going to need as many of everything, including semiconductors who did the semiconductors turn to, the consumer electronics firms. why? because there's a boom in people ordering electronics, consumer electronics, game stations we're all staying home, we started ordering more of those

the semiconductor companies around the world said okay, here's somebody who wants our chips, we'll meet that supply there. now that the auto sales have rebounded, the auto makers have come back to the chip companies and said we need more. the chip companies have said we allocated all of our production, so this is that four to six month gap you're going to see here between what is asked for and what can be supplied >> phil, i just want to go back to the questions we were talking about about this car for a second, because i will admit to being confused i've always thought of apple as a consumer oriented company. >> correct >> we talk about delighting the customer having great systems and software that are just, you know, beyond that's what i think so much of the public is interested in and the relationship that apple has always had i don't personally care when i order food or order something off of amazon or whatever it is how it gets to me on the last mile that last mile is going to get done by a delivery service, and

to be honest with you, i don't think most consumers are very interested in the actual dynamics of that. >> i understand what you're saying, yeah i don't look at this -- >> the idea they're going to sell these fabulous cars to delivery services doesn't make sense to me. >> well, that's not the primary goal so if i left you with that impression that they are developing the apple car so that the last mile equation can be solved and they can turn to grub hub or whatever food delivery service is, and say here you go, here's an apple car, that's not the primary goal for apple the primary goal here is the consumer experience. and you're right, that's what apple wants to do. they want to make this ubiquitous so that if it's part of your world, it's the apple ecosystem. and whether it is the apple car or you're at home looking at your mac computer or your ipad, whatever it is, they want it to be one in the same and seamless

throughout so yes, the user experience, if it's a robotaxi, they want to make sure you get the user experience of it ultimately if there is a consumer vehicle that crow and i buy, and say i want to get an apple car, that it is within the same apple ecosystem i don't want to leave you with that impression that this is being developed strictly for package delivery firms but the last mile, that is a huge part of what you want to figure out you have to figure that out if you want to be autonomous and electric it doesn't matter if you're autonomous, if you say to people, we're autonomous down the highway. that has been solved by auto makers it's the last mile into your driveway. >> thank you, phil that's very detailed and it's hyundai. what if we were to tell someone who just can't get it, it rhymes with sunday, right hyundai. is that good for you

will that work for you it's hyundai sunday, hyundai. good, excellent. and this is hyundai kia. that's what i'm going to remember as a meme is that a meme or is -- no, one or the other anyway, we're going to move on now. there's other stuff happening. i would have put not this stock but the next one in the headlines, is what i would have done i would have put pay pal in the headlines, and we're not going to do that we are going to do that, though. let's talk about ebay, $40 billion company, the shares are up today, 4th quarter and revenue beat estimates first quarter guidance was better than expected during the holiday season, one in ten shoppers bought something on ebay. the next one is blowing my mind. i don't know, i guess it's the market cap pay pal, look at what it's doing today, up 12 i have looked in a couple of places and it is there right now. it's what i thought. it's like a quarter of a

trillion dollars now paypal pypl, no, almost 300 almost $300 billion on paypal. the company added 16 million. >> it's amazing. >> it's unbelievable isn't it i'll tell you what's amazing. >> instead of messing around with gamestop, and all of these little tricks, why didn't all of these retail people buy paypal a couple of years ago. buy a company that's actually growing and it's going to be a great company. why play around. the company added 16000000th to accounts in the fourth quarter a 39% jump in total payment volume they're into crypto, they're into installments now. it's not even just payment anymore. you pay something and it's going to be like a loan that you pay in installments, this is all new to me sorkin, you know all of

this you probably use venmo >> i've got venmo too. >> i take venmo all over the place. >> i have my own paypal account. i used to use my husband's account all the time he got sick of me using it i caved and got my own account, so i don't have to run anything by him anymore >> like the casual dune in the jean jacket, this is him 300 billion. >> it's awesome. >> it is and then the estimate of new accounts, heck, i might even get one, new accounts, supposed to be 35, but it's going to be like 50 million or something. 2020 was the strongest year, which is not a surprise in pay pal's history, keeps getting better and better, 115% rise in the stock last year, and tell me about the crypto element, you can use bitcoin on paypal, is that how -- but it's not totally adopted.

>> i don't know if you can yet, but you're going to be able to but what they're doing with the payment is they immediately translate it into dollars. just so everybody is clear, you could use, supposedly you would be able to use bitcoin to pay for something, but the merchant, it would get turned into dollars for them >> okay. well, that's all right because you want to know what you have you can either have, you know, x, 3 x, 1x, it might be a good idea. >> it goes to the issue of whether bitcoin is a real currency. >> right >> maybe not now, but it will be someday. anyway, when you put paypal in the headlines, ebay, i don't know that is just amazing just a choice. >> ebay is up 10%, too but paypal is amazing with what they have done, and when you talk to dan about the number of times people are trying to hack into their system every second, it's amazing, the stuff they know how to do in terms of protecting that company, too yeah, always an interesting guy

to talk to maybe we can get him on soon. we're going it talk about the reddit rebellion, and the backlash against hedge funds, our next guest made headlines when he took over the illinois pension fund and fired dozens of hedge funds. and later, tom farley will join us to talk about the surge in retail investing. will it last "squawk box" will be right back.

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welcome back, everybody. hedge funds are at the center of the reddit rebillion, and our next guest has been pretty vocal about the role he thinks -- and mark, thanks for being here today. it's good to see you. >> thanks for having me. >> let's get people up to speed who maybe aren't familiar with your story you ran an illinois pension fund with $24 billion on the behalf of i think 140,000 state employees, and you made all kinds of headlines when you came in back in 2015 because one of the very first moves you made was to fire a lot of the hedge funds that had been running money for that fund. why did you do it, and what happened to the performance of the fund after that? >> right so cnbc was actually quite helpful in making the headlines, so i really always appreciated that, and continue to. what happened is we actually

just got in, we looked -- we took out a blank sheet of paper, and looked at our entire allocation without any preconceived notions, and we started looking at these hedge funds, and our hedge funds were mostly of the stock picking variety, not so much the derivative book that were truly awful our hedge funds were benchmarked in the hrfi, which is total nonsense, we benchmarked them against stock markets because they pick stocks and they were net 60% long approximately we didn't even penalize them on the huge growth exposures, because they had about 140% long, 80% short. just comparing the 60%, they were under performing index funds, which we could get for free by 150 basis points by the way, we have great guys this is the whole industry the 2 and 20 was so devastating that even the best managers who

can produce alpha actually destroy value for institutional investors, for all their investors, and so there was just no reason to stay with them. now, one thing that we did do is we did retain some of them we removed the long only vehicles which have proper benchmarks and the carryover like the s&p 500 or whatever it is, and that worked out quite well, and the result of all of this, we moved about 2/3 of our total portfolio to an index approach, and the other third because of the challenges with pension funds where because you're part of the government, you're always under resourced and you always have the risk of political meddling the other third we actually outsourced the selection of managers and went for big alpha, and the result is today that portfolio is a top pension fund. >> let's fast forward to today and the reddit army taking on

these hedge funds, what do you think? >> this is one of the things that was so so frustrated. also part of what i was doing here, and there was this view that -- and they have a huge portfolio of the derivative book hedge funds -- there's this view that you don't need returns from hedge funds, which is ludicrous, and they serve as a diversifier and reduce risk. for years now, hedge funds and many cios who got stuck investing in them have sort of taken this approach that somehow the derivative books and the short positions, it's not just a low risk or no risk, they actually reduce risk, which is completely ludicrous there's risk all over those portfolios there's risk all over those portfolios and, so you should expect equity like returns okay, for the gross -- on your

sort of gross exposure books, your longs and shorts, so the beautiful thing about what took place last week, for all my frustrating of theoretical risk, the world got to see what it is, the short positions have unlimited downside, derivative books have little poisonous elements inside them as well these blow ups are going to happen 15 years ago, amhert blew up, the founder cried to skrjamie diamond. this continues to happen there's risk in the books. >> you say that when markets are tested they emerge stronger. what do you think the outcome is here >> for sure. so what hedge funds are going to have of course is all of their customers, all of their limited partners are going to be asking this question, all of a sudden there's going to be consciousness of risk. right. so and of course that's going to

go right internal, so i think we're going to have a reduction, which is exactly the way the market should be working and the beautiful thing is on the robinhood side where they were badly under capitalized, right, brokerage firm, the fact they raised 3 1/2 billion over the weekend and that their clients are now much more conscious, right, and perhaps will move, i think it's the market, this is all the market working and the market kind of clearing the real damage that got done, particularly last thursday >> hey, marc, what happens if i told you that when all is said and done and when the dust settles and we actually can see all the numbers that the winners of this episode were actually the hedge funds and that the losers of this episode were actually retail? >> that woruldn't surprise me i the slightest, remember, though, andrew, with these huge fees, the huge carry, when hedge funds

are on both sides of a trade, the guys who win the trade, their investors are getting 80% of the winners, and on the loser side they're getting 100% of the losses for the most part that wouldn't surprise me at all. the fact remains that there is risk in these portfolios, right, and this risk has been denied for years. it's been sort of ignored and that's really what i'm talking about. >> yeah, andrew, maybe you're alluding to the front page of the journal, sinvest, they made 700 million they were buying gamestop at 10. and then there's a hedge fund, if you want to call them hedge funds, scitadel or whatever, and they are making money on the increased volume so i think that what you said has already happened, andrew i don't know if we need to wait to see whether that's actually going to be the case is it too early to say it right now that the professionals are going to be the net winners on this especially if this doesn't hold

up where it is right now, and people are still holding it retail is it worth 90 i don't know i have no idea what gamestop is worth. >> that to me is the central question, and then goes to symptom degree to the point you're trying to make, you're looking at the issues with these hedge funds and saying, you know, there's risk in the portfolio, there very well may be risk, and i'm not denying that at all, but i think the point that the public has taken away from this episode at the moment is that the retail guys can beat the hedge fund guys and the hedge fund guys are not that good at what they're doing, and i'm not here to defend the hedge funds, actually they may be better at what they're doing than at least the current narrative over the last week. >> i always expect the professional investors will win a battle like what we saw last week we'll never know what would have happened had robinhood been properly capitalized had robinhood appreciated that

what capital and strong balance sheets are for are for the stress tilmes, not for the easy times. there's no need for capital in the easy times when the chips were really down last thursday, and robinhood had to shut down their trading, right, we won't actually know what would have taken place. it's unknowable. having said all of that, i'm not suggesting, actually, that these reddit guys are brilliant, and the hedge funds are so stupid, i'm saying hedge funds have a lot of risk inside of them, and it's really nice to see that sort of get surfaced and appreciated. >> we certainly have seen that, and marc, we appreciate your time today it's good talking to you. >> thank you very much coming up, the ceo of parler said he was fired by parler's board striy. details next some see a grilled cheese sandwich and ask, “why?” i see a new kitchen with a grill and ask, “why not?”

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. parler ceo john matze said he was fired he said he has met constant resistance to product, his strong belief in free speech and his view of how parler should be managed. he told the journal the company was close to restoring service for users who had downloaded the app, and before he was fired, he was working to adjust the moderation rules in ways that would have allowed parler to return to google and apple's app stores i don't know the behind the scenes i guess what had already been published on parler was just too much for the board, i guess, is all i can figure unless there's something else, andrew ♪ >> it's interesting, though, to be honest with you if you're on that board, you have to think of the value proposition of that company was and to some degree, you know, if

you were going to moderate things, that sort of undermined, i imagine, the quote unquote value proposition. maybe there is no value proposition if you don't it's a complicated one meantime, a lot more coming up on "squawk," the spac craze has been popular and profitable so far this year our index of the 50 biggest spacs has outperformed the s&p by a wide margin we're going to dig into that trend next ♪ i made a business out of my passion. i mean, who doesn't love obsessing over network security? all our techs are pros. they know exactly which parking lots have the strongest signal. i just don't have the bandwidth for more business. seriously, i don't have the bandwidth. glitchy video calls with regional offices? yeah, that's my thing. with at&t business, you do the things you love. our people and network will help do the things you don't.

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welcome back to "squawk box" once again 100 spacs, spac ipos, i should say, in 2021 so far, and the frenzy doesn't look like it is losing momentum. some of the biggest names in business have jumped aboard the spacapalooza former boeing ceo, dennis muilenburg, dennis kudlow and wilbur ross are getting a piece of action. joining us now theresa gow,

founding partner, the diversified capital fund, the vehicle hoping to shake up the historically homogenous ecosystem and build wealth in the process. good morning to you. >> good morning, thanks for having me. >> help us understand what's happening here but most importantly, if you could put it in the context of the valuations because clearly there has been a massive rise from the context of some of these companies being private companies to all of a sudden jumping in the public markets both in the ipo context, but now in the aspect context. >> sure, well, you know, i think that if you think about this current wave of spacs, it's really a third option for going public there has always been traditional ipos and with spotify and others, the direct listing, and for companies that have reached the late stage, high growth, spac is another option it's a faster process, often times than a tradition that will ipo in how quickly you can

become public, and i think what you see with the valuations is the same thing you see with their more traditionally ipos in the same sector. you look the at things like electronic vehicles and software, and consumer internet, the public markets are high, and when the companies go public via spac, which is another mode to go public, you're seeing similarly high valuations. >> okay. which process do you think has more scrutiny? because the critique of the spac is that a lot of these companies are coming public are not being scrutinized in the same way that they would be in an ipo and that the rules allow for them to make forward projections and the like in ways an ipo, you're not allowed to. >> i think your traditional ipo, there's more process that goes in place beforehand, right, so selection of underwriters, the time where you file with the s.e.c., first confidentially, and then you go public, and

there's the entire road show, which i don't know if anybody loves in the days when you used to fly around all over the place, but even now with virtual road shows, there's the process of meeting with potential public investors that you don't get that same process with the spac, so it's clear that there is more scrutiny there, more points in the process, a longer process with a traditional ipo than when a spac i think in all cases, right, sorry, go ahead. >> what i was going to say is spac son spores could s-- sponsors would say the public is looking to us for due diligence, and there's a remarkable amount of diligence being done by the inv investor class i have to admit i'm skeptical about that, but i would love your view. >> i'm sure there's a lot of diligence, but the question is who gets to do thatdiligence in a spac situation, it's spac

s sponsors in a traditional ipo, everyone gets the same information in a traditional ipo filing i want to separate out, and draw some analogies to meet sort of the 99 bubble, right, there's spacs that are companies that are late stage market leaders high growth, and they're choosing, you know, do i want to go public in one of three ways, traditional ipo, direct listing or a spac, and then there's what i'm calling, what we used to call in 99, concept i pos, earlier stage companies that probably aren't far enough long in terms of revenue, or production even in some cases to withstand a traditional ipo process, but they're able to go public through a spac process at a much earlier stage so there's what i would think of as later stage growth companies where they're just deciding do i want

to go public more quickly, and that's why i'm thinking of a spac or do i want to go through the process which has, you know, the other advantages that we spoke about in terms of being able to market to public shareholders in a traditional ipo process. these concept spacs if you look at the analogy i would use there is nicola, right, went public in june, doubled very shortly and is now trading lower than the initial issuance, and then there's sort of the later stage companies that decided to tap into spac instead of a tradition that al ipo, like draftkings which traded in 2020 and traded up nicely. >> i don't know if you can see our screen but prior to showing nicola on the screen, we were showing the cnbc 50 relative to the s&p 500, and clearly there's an out performance at least right now. if we were to show that chart 12 months from now, 24 months from

now, 36 months from now, how do you think that cart would compare? >> you know, i don't know. i unfortunately can't see the screen, but i'm sure i've seen it that it is out performing i think the right analogy, again, to my point about the spacs and the traditional ipos is comparing sort of the spac 50 to the 50 most recent traditional ipos, right, if you think about companies like a snowflakes or airbnb, i think that's the right comp because the s&p 500 those companies, most of them, many of them have been public for many years if not decades. >> fair enough we got to leave the conversation there, i would love to have you back to continue it, and i want to thank you for joining us this early in the morning appreciate it. >> great thanks for having me >> you bet becky. >> hey, guys, some breaking news right now on merck, and this is pretty big ceo ken frazier is going to be retiring on june 30th. he will continue to serve as executive chairman of the board. robert davis has been named as his successor, and robert davis

currently serves as the cfo of the company. i don't know if we can get a look at the stock right now, up by about $0.13 we'll continue to watch this because this is significant news. when we come back, more airline furloughs on the way the latest on plans from a major carrier next then we'll talk more about big numbers for paypal and the huge gains for the stock over the last year. "squawk box" will be right back.

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. welcome back, everybody. recapping that merck news that just crossed the wires ceo ken frazier is going to be retiring on june 30th from the cfo position he will be taking over as the chairman of the board, or stay on as the chairman of the board. the cfo robert davis has been named as his successor for the ceo position, in addition to the ceo news coming out, the company reporting earnings just a few moments ago too. let me run you through the numbers on this. merrick came in with adjusted earnings of $1.32 versus the

$1.38. street was looking for they actually lost money because of acquisitions, collaborations, intangible asset impairments, if you strip those out, the adjusted number was 1.32 versus 1.38 revenue came in at 12 1/2 billion dollars versus the 12.7 billion the street was street was at 51 m.8 to 53.8 >> ken frazier, you can't

minimize his tenure there. i guess i'm old enough there are benefits to being old. i remember what happened with ken with vioxx he was the general counsel. >> lawyer. he was general counsel and lawyer before. >> they had a ceo named richard clark that wasn't that well thought of they were trying to figure out how to navigate through vioxx which caused some heart attacks. the company was going to settle and the settlement talks were for about $50 billion. ken frazier, we had him on "squawk box" all the time. he decided and pushed as hard as he couldto go case by case, case by case, case by case they ended up winning. the total hit that they took was $5 billion instead of 50 billion. next thing you know ken, they elevated him to ceo. then after that they had a

pipeline problem and he brought in this unbelievable r&d chief, perelman and developed keytruda, saved jimmy carter's life and is a transformational therapeutic so this is -- and then we know everything that happened with trump -- with president trump's ceo counsel. >> on top of that -- >> favorite of jeff sonnenfeld, too. he was hired by roy bagalos and i think he really cared about merck's culture. >> not just the company, but i think health care overall. ken frazier has done things to try and take on the health care industry at large and deal with the problems

he's trying to squeeze that out and not mask and hide and work through third-party vendors. i think he's had trouble trying to take on that system because it's so engrained. he has done things to try to make it better at merck and the health care system overall and in the united states i hope he doesn't give up on that >> old friend of "squawk box." i remember -- i was kidding him once because he had been on so many times during vioxx. now you're ceo he goes, yeah, joe, all you. all you. i remember him saying that kidding. >> he's got a accepts of humor, too? >> yeah, he does he's a good man. he's not leaving he's chairman now, right >> no, he's going to be executive chairman. paypal closing out -- we're moving on. strongest year ever after reporting a surge in quarterly revenue. the stock outperforming the broader market in the past 12

months paypal said the activity remained high when it allowed customers to buy and sell cryptocurrencies for more on what's working, we're joined by courtney gibson. told you it's good for me to be old because you know who i know well and i know -- i don't know, it might have been when you were a high school intern, but jim reynolds used to come on squawk all the time, courtney you know that, right >> reporter: absolutely, i do, joe. you can't call yourself old, right? you're seasoned. you're like a fine wine. you're getting better with time, joe. >> that's right. thank you. give him our best. i know he's still active and around. >> reporter: i will. absolutely >> so i said earlier, you can talk to both paypal, which is one of your favorite stocks, although you're not obviously a stock analyst, you're president of this capital markets firm, but talk about paypal and how that -- technology never really

goes out of fashion even with valuations because it's just the future >> reporter: absolutely. i mean, the digitization of our economy, joe, is a real thing. i think the paypal earnings that we saw last night just further reiterated that. i mean, the structural changes that we've seen, paypal has just been a huge beneficiary as many of the other fin tech names have been and i just expect this name to continue to grow. it's our analyst, ken hill, one of his favorites for 2021. i personally hold the name based on his call. we're up pretty nicely today >> the other reason that i referenced you, it hasn't been talked about much, but you think some of the biggest beneficiaries and sort of that ironically of the gamestop frenzy are some of the clearing firms that are seeing the increase in volume are you actually recommending some of these or is your firm? >> well, not necessarily the

clearing firms, joe, but the actual brokerage houses themselves >> brokerage houses. >> when you think about brokerage firms, whether it's goldman sachs, jpmorgan, or the exchanges like i.c.e. or nasdaq. they make money when they trade. it's the volatility and increase in volumes that allow them to make money so i think some of the really big beneficiaries, again, it hasn't really been talked about as much, it's been talked about in a negative way, but these firms are going to benefit even when you think about the volatility and increased volumes at the beginning of the pandemic last year. we saw earnings coming out of the financial services firms where did they make their money? in their trading arms. pay close attention to that. it was a minimal spike if we're being honest, it was a week in time, but that increased volatility and increased volumes did probably create incremental revenues that weren't actually anticipated for this year. >> is that a hedge fund guy behind you that is broke now and

he can't afford to fly his private plane? is that what i'm looking at? >> you know what, joe, it's a little bit of irony, right i do love this photo here that my husband bought this painting because, let's be honest, hedge funds did not lose last week just as in any trade, someone is quote, unquote, a winner and someone may be a loser this is a joke these hedge fund guys, there were plenty of big winners last week on the institutional side, on the hedge fund side as there should have been if they were good, they got in on this just like the quants and retail traders a little bit of a joke for your viewers. >> we're finding that out now. how long have you been at loop, including the high school internship how many years, now president? how long >> going on 20 years now, joe. going on 20 years. >> you were a high school intern

at like 3. okay anyway -- >> i was exactly. >> exactly all right. thank you, courtney. cnbc contributor. >> thanks, joe appreciate you. >> jim reynolds. say hi andrew. where did she get a picture of my plane from when we -- yeah, rhtig when we come back, much more on the ceo transition news at merck. hey, dad! hey, son! no dad, it's a video call. you got to move the phone in front of you like..like it's a mirror, dad. you know? alright, okay. how's that? is that how you hold a mirror? [ding] power e*trade gives you an award-winning mobile app with powerful, easy-to-use tools and interactive charts to give you an edge, 24/7 support when you need it the most and $0 commissions for online u.s. listed stocks. don't get mad. get e*trade and start trading today. dana-farber cancer institute discovered the pd-l1 pathway.

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stocks looking to extend their three-day winning streak that's ahead. betting on sunday's big game the ceo of draftkings. and elon musk's break from twitter has ended, pretty abruptly, after a day and a half his latest tweet has the meme face cryptocurrency doge coin on the move we'll bring you that story and much more as the second hour of "squawk box" begins right now. good morning and welcome back to "squawk box. take a look at the u.s. equity

futures. 2 1/2 hours before the markets are opening. the dow looking like it would open off 6.5 points. the s&p 500 off a point. the nasdaq up about 44 points. got a couple of big headlines to bring you this hour. perhaps the biggest, apple close to striking a deal with the automaker hyundai and producing an apple branded autonomous electric vehicle that's according to sources who spoke to cnbc's phil lebeau. car will be made at kia assembly plant in georgia rollout tenttivelily scheduled in 2024. meantime, the so-called reddit stocks will be in focus in washington. janet yellen holding meetings. the fed and cfgc will be represented at the meeting to discuss the wild trading we've all seen in the stocks and the impact on investors and the markets. brittain has launched a trial that combines the covid vaccines made by pfizer and astrazeneca.

the trial is studying whether vaccinating the same person with two different vaccines would offer the same immunity. the idea is to add flexibility to the rollout plan since both of those vaccines require two doses. so an interesting approach there. joe? >> yes, breaking news this morning. on merck in addition to earnings, ken frazier is retiring as ceo effective june 30th. meg tirrell joins us with more hi, meg. >> reporter: hi, joe this is a big move you know, ken frazier has been ceo of merck since january 2011. it's been quite a transition for the company in that period of time really seeing the boom of keytruda and the birth of immunotherapy as a major way of treating cancer. ken frazier also, of course, really known for standing up to president trump after the charlottesville events a couple years ago and being the first ceo to step down from that manufacturing council. he came to merck back in 1992

and he really worked his way up through the ranks. he worked with the legendary ceo roy vangelos who really is still considered among the legends of pharma ceos and was somebody who worked closely with him and then was general counsel and moved up ceo in that time in that time we've seen merck's stocks double. cancer drugs keytruda and antibiotics. they made an acquisition of cubith you saw merck and ken frazier in particular really say we are not into big mergers that was something that he really focused on as a strategy, not going that route when we saw so many companies looking at inversions and things like that. merck really focusing on building research. interestingly, they also just

announced that roger pearlmudder has stepped down as head of research january of this year. this is a big change at the top of merck we are going to see an entirely new leadership team. a new merck going forward. but a longer tenure than we see for a lot of ceos. he was there since 2011 as ceo he's still going to be executive chairman for some period of time we'll figure outgoing forward how long he'll be in that role, but this will be a big change for merck, guys. >> it was interesting, meg you ee 4luded to it. he was general counsel that's not necessarily the guy that you think would be the one to lead a pharmaceutical company, but he -- the job he did with vioxx when it happened, and it was -- it was a very tenuous time for merck, if you remember they were -- you know, there's more than a few of those

painkillers that had some real adverse events and side effects, and they were getting assaulted. you know what happens when the bar goes after a pharmaceutical company, and there was a lot of pressure from merck to settle. it would have been a really large settlement it would have been, we were talking about it earlier, 50 billion. we used to have ken frazier on when he was general counsel with "squawk box. he fought every case individually and as you know, it ended up kind of being handled by merck in a fashion where all parties were satisfied and it cost them only $5 billion and he was elevated to ceo as a general council. roger pearlmudder brought him in from amgen and those two together, pretty formidable combination for merck. and this is -- you know, this is -- i don't know if i call it a loss, he'll still be there, but a pretty good tenure as you

say. he was the last senior executive hired by vangalos. he is legendary in the halls of merck as you mentioned >> that's exactly right, joe whenever we'd interview ken frazier, i'd talk to him beforehand he always showed up early, which was great because you'd get to talk to him, but then it was really intimidating. you'd try to prepare for the interview with ken frazier and he was looking over your shoulder i'd love to talk with you about your alzheimer's you should really ask roger about that he saw roger pearlmudder overseeing research. when you asked him about it, he knows every single detail. that was a partnership where he was sort of theceo, then he ha the leader of the research part. so we'll see what partnership evolves under rob davis and dean lee. it will be a different kind of partnership. ken frazier was such a leader in

the industry as well, not just in pharma, but across the industry especially over the last year as racial justice issues have been so important as they have been for so long, but they've come to the fore in 2020 ken frazier has been such an important voice on this. he once told me before an interview at jpmorgan, he reads the obituary section of "the new york times" every morning before anything else. so i asked him at a conference last year when we could meet in person, i guess that was 2019, we could still meet in person, not to sound morbid, but what would he want his obituary to say. he said he hoped it would say he was devoted to social justice. that's what he's focused on in running this giant pharmaceutical company, to focusing on that i would expect we would still see a lot of leadership from ken frazier in that area. >> on one of our shows during that event last year ken was on. he spoke for about 10 minutes.

you could hear a pin drop as he was talking about the events it was very, very -- i don't know it was significant and solemn and he talked about his up bringing he got a step up he said, if i hadn't gotten a step up or hand up, that he could have ended up -- who knows where he would have been very eloquently spoke to us that day. i'll never forget. i know you guys remember, too. do you remember, becky and andrew ken was -- >> yeah, especially as he was talking about his own experiences and what he had heard from other ceos also of color, the experiences they have had and their families have had. >> a mentoring program i think we had the harvard -- the harlem -- i think we had jeff cannon on, too, that day.

>> right no, it was an amazing conversation i remember because he stopped me in the middle of the interview and said, the reason i'm on, i have the opportunity be at this to be on cnbc and then went into this really remarkable description of his childhood and the opportunities that he was afforded and clearly he's trying to afford those opportunities to so many others. it's worth pointing out, by the way, that just in the past two months he started a program called 110 which is an effort to employ a million black people and to create opportunities for them it's also interesting to note that -- and we've talked about this forever, there were -- i was trying to do the math -- only four black ceos in the fortune 500. when you take him out, ros who just joined walgreens, roger

ferguson is retiring as well so when you talk about progress, it is -- it is in certain cases one step forward -- two steps back, one step forward in terms of just even numbers but i know it's something that's dear to him and something that i know he's working to improve >> right okay thanks, andrew. coming up, we've got all kinds of stuff going on. jeff bezos stepping aside letting aws chief andy jassy take over. is it a sign amazon shares have topped jon fortt is going to share both sides on this week's on the other hand we'll check on the markets "squawk box" will be right back.

welcome back, everybody. let's talk markets joining us is schaar man rosamani she's goldman's investment officer for wealth management. i know we've been watching all of this volatility been concerned about what's happening, been concerned with some of the stocks what have you been hearing from your clients >> well, clients are very focused on the long term we try to encourage our clients

to think of investment horizon as a long investment not short day to day clients are asking us about what's going on with some of these stocks, a stock that goes up nearly 27 times, nearly 30 times in the span of a month and then down 60, 70%. clients are asking us about the impact of these stocks, what does it do for volatility, what does it do for how they should look at their portfolios our recommendation to our clients is to stay focused on the long term and to think of their core assets. since the trough of the global financial crisis march of 2009, we have recommended clients stay invested we have not gone under weight s&p 500 once over the entire 12 year period. we keep on encouraging clients to stay focused on that. it's an interesting side show in terms of the volatility that we see for a few days, but it does not have a material impact on our client's portfolios and

wealth creation from our perspective. >> that's interesting. it's been the right call we have seen significant tumbles including the one last year when covid hit. the market when covid hit, your advice was to stay invested, too? >> there are a couple of factors that drive our factors to stay invested our view is that it's very hard to anticipate certain market moves. it's very difficult to get out of the market in anticipation of a down draft especially when you have a shock like this pandemic. in fact, during the pandemic our recommendation was to add to the s&p 500 so starting in mid february, we were a little bit early, but our recommendation was to add to the portfolio. then with the rapid increase we take our overweights off if you think about 2020 with the

facts -- and somebody told you that at the beginning of the year, that we're going to see something like 20 million infections at the time in the u.s., we're going to see something like 345,000 fatalities, earnings down at the time people were thinking before the pandemic, up but then down as much as 20, 30% now we're down about 15%, for example, given great fourth quarter earnings people gave you all those facts. gdp down 3 1/2 percent who would have thought the market would be up 18% so the message to our clients is it's hard to anticipate how the market might react unless there's compelling evidence we're going into a recession, the bias is to stay invested if things start to get cheap, then to go overweight. >> you know, that's really interesting. there are a lot of people who think what we've seen with the retail investors with some of those stocks that you mentioned at the top, up by 1,000% or

something in a matter of weeks there are some people who would say, wait a second, these are signs of bad turn coming you think it's noise why is that? >> yes, exactly. we think this is noise and one should focus on the signal the signal is the incredible earnings the theme of our outlook for 2021 was u.s. resilience we're trying to give clients the message u.s. preeminence is intact so core assets and things such as the s&p 500 and more assets in the u.s. than elsewhere and then stay invested and then u.s. resilience and when we're thinking about u.s. resilience we think about the diversity of the economy, we think about the incredible corporate management equality. earlier you were talking about various amazing corporate ceos and management that has been ranked the highest in the world by independent third party

academics. so when you're looking at all of this, the key driver of a client's portfolio are going to be earnings. it's what market expectations are in terms of valuations when you're looking at these other factors, they are a small part of the market, not a big part of the market again, staying focused oncor assets rather than the more volatile issues that eventually correct themselves when a corporate company price is so separate from underlying fundamentals, eventually earnings and prices do convert and that's the key message for our clients. sharmin, you said one thing that would make you tell people to sell stocks or get to the sidelines a little bit would be the idea that we would be headed into recession we've had a lot of money that washington, d.c., has spent and probably a lot more still to come do you think that will be the thing that keeps a recession from hitting us?

>> when we're looking at the current environment we have great fiscal stimulus, we have very good monetary policy that provides a favorable backdrop. we have u.s. growth and global growth above trend all of that is supportive of equity markets then in addition, when we look at valuations, we don't think valuations are excessive we know there are some headlines out there looking at bubble territory. to your point earlier, when people are looking at some of these small cap stocks and some of them larger, is that a sign of froth we think one should look at valuation in the metrics, we have been in a period of low and stable inflation since april of 1996 average market valuations are substantially higher than the long-term median when you have a

lot more inflation or a lot more volatility as long as inflation is low and stable, which is the base case for the foreseeable future, probably out at least five years, then market valuations can be higher than what we have seen in the past and so we're not at all at froth think levels in the core market there are some side shows, but the core market is not so over valued that one should actually get in the market so, again, stay invested. >> sharmin, it's good to see you. thank you for your time this morning. >> thank you very much when we come back, the big game is this sunday, and millions of people will be putting money on the line. draftkings ceo jason robbins will join us with a preview of what he's expecting for online bets and his outlook of the online gaming business penn gaming reporting a quarterly profit despite dealing with covid-related restrictions.

ceo jay snowden will join us for an exclusive interview right now the stock is down 2.4% we'll be right back. time now for today's aflac trivia question. founded in ada, ohio, this company makes an item that's featured on suaynds. the answer when cnbc's "squawk box" continues a medical bill for twelve-hundred dollars. i had no idea i'd have to pay that. that's right. it's hard to know exactly what your health insurance is going to cover, so you gotta protect your blind side. aflac! aflac pays you money directly to help with expenses health insurance doesn't cover. really? aflac. get help with expenses health insurance doesn't cover. get to know us at aflac.com. folks the world's first fully autonomous vehicle is almost at the finish line today we're going to fine tune the dynamic braking system whoo, what a ride!

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now the answer to today's aflac trivia question. founded in ada, ohio, this company makes an item that's featured on sundays. the answer wilson their football has been the official ball of the nfl since 1941 welcome back to "squawk box. some big succession news this week in big tech jeff bezos handing over the reins of his company to aws chief jassy who will become the ceo in the middle of this year jon fortt joins us with this week's on the other hand >> andrew, yes, this signals a top.

it's not a knock on and jie jassy. look at a 25 year chart of microsoft. see where the stock peaks? bill gates stepped down two weeks later. it's like the ceos of juggernaut companies have a sixth sense jeff bezos has been the head in retail it turns out walmart, target, best buy weren't so easy to beat in digital first market, shopify and etsy represent a stubbornly consistent class of companies that they can't muscle they couldn't break into the smartphone and in cloud microsoft, google, others are mounting small challenges. all of this happening as amazon stock and the rest of the market has gotten extremely expensive, andrew >> so you're saying that amazon's in decline now? >> well, on the other hand, let's not be too hasty here.

i think i just made an argument for why andy jassy's class action is strong the handoff was rough. maybe a better comparison is apple under tim cook cook was a trusted lieu ten noeblt to steve jobs who brought a level of logistics discipline. andy jassy has done something similar. he grew aws inside of amazon as for how amazon's competing, we've seen the company building out delivery that competes with ups and fed ex, advertising that competes with google and facebook cloud continues to lead despite the industry mounting strong challenges from the toughest rivals in the world. andy jassy isn't the sign of a top, it's amazon moving from strength to strength. >> the big question for

investors watching all of this, what about the valuation how do you think of that >> you guys were talking to sharmin about that i know what she said clearly she's the expert it makes me feel a little weird when we get the multiples that we have, even on the likes of apple and amazon well, compared to the market, this isn't -- compared to the market if all of these took a 20 or 30% haircut, would anybody say that valuation is crazy i mean, with apple trading at, what is it, 35 times right now amazon way above that? i don't know, but amazon's still pretty strong. >> jon, thank you for -- you always give us both sides of the hand but then i want to know which side you agree with. we'll have to do that another time appreciate it. great to see you, my friend. >> we'll see you. >> he's ambidextrous i can never tell, right or left. all right. still to come on "squawk box,"

draftkings ceo jason robbins is our guest. that interview is next later, is big tech regulation on the way? senator amy klobuchar who oversees the senate anti-trust panel will join us. first though, february is black history month. we're honoring some of our cnbc contributors here's helena kroft. >> think about the sacrifices that generations before us made to put us in the position that we are now i think about everyone who participated in the montgomery bus boycotts and what they went through. so whenever i'm feeling down, i just remind myself that i'm standing on their shoulders and i have the obligation to push forward because they blazed such a path for me and for you as well yeah...uh... doug? sorry about that. umm... what...its...um...

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total wagers on sunday's super bowl are expected to dec

decrease 37% from 2019 despite 36 million americans gaining betting access part of the reason working from home employees won't have their office pools and other pandemic-related restrictions holding us back, jason robbins, draftkings ceo and co-founder. is this an outlier given the recent developments in states legalizing i was surprised to see that, jason. >> i'm a little surprised, too, but the office pools thing makes sense with a lot of people home. still the vast majority of wagers are happening in the illegal market dr draftkings was in five states last year versus 12 this year. >> i was wondering that's like the dark pool.

we have estimates how much goes on there but we really don't know i don't know how we do any apples to apples or year over year comparisons for how draftkings does. it was not reported or officially reported prior to this i think it's onwards and upwards every time we have another election in november and more states start going this way, for a lot of reasons, too. >> yeah, i agree we're very excited about this super bowl we have two big promotions one is a $55 million free pool all you have to do is enter for free we have a cool odds boost where any team scores a touchdown in the super bowl you double your money. no guarantees. i imagine most if not all -- >> when did that come out?

>> i got an odds boost a week ago. i was in california in a car oh, my god, it's happening it's great do you have to sign up to do that is it forexisting? >> no, existing, too anybody new or -- >> when did that come out? >> i'm not sure exactly when we posted it. >> that's a good one that's one of those no brainers. >> we call them no brainers. >> that's you giving me back what you have already taken from me i will take it i have people tweeting me that paypal is benefitting. so many people can fund their

sportsbook the easiest way, through paypal. >> paypal is a great company they feel more comfortable using it than perhaps other methods. very cool to see they've had a great success. >> jason, i was hoping you would weigh in on the reddit, robin hood that we've been covering. a lot of folks are saying, i can gamble online, i should be able to gamble in the markets online. what's your take away and lesson of this whole past week or more now? >> you know, i've been following it i'm not close enough to really have a strong take away or opinion. i think usually what happens in the situations is people start

asking questions and then companies respond. i think robin hood will be the same we have had our fair share up and down i understand why customers are frustrated if they can't get on. usually things aren't as they appear to be we'll have to see. i think all of the right questions are being asked right now. obviously sort of spectator view watching what was happening with gamestop and some of the other stocks is wild i've never seen anything like it in my life i think there's a bit of a paradigm shift it really started with wall street bets and reddit like many things we've seen, there's a real paradigm shift happening in many areas of our society. how people access the free markets and usually -- >> jason, do you ever consider the possibility that a reddit group could effectively go on to your site, for example, and i

don't know what procedures you'd have to try to push a particular bet in a particular way? >> you know, i haven't thought as much about that but, you know, for us really it's harder to gain because we typically set the lines where we think the right spread is. we don't move them that much we look at the super bowl line even though there's 70% bets on kansas city, this doesn't happen much kind of interesting to see that so many people think kansas city can win. we don't move it much. it's 3 and a half and even though there's pretty substantial weighting on the line the business doesn't work as much with the way the pricing work and the market. it's much more where the odds are and we tweak it based on information coming in. we don't move it substantially

just because action is favoring one side or the other. >> andrew, they are amazing. a half point, you figure out what does it matter? 6 1/2 points last night i had virginia. i squeaked by. they won by 7. i had another one where the under/over was a 1/2 point i was 1/2 point under on the memphis game half points happen all the time. when i bet on kansas city i had 3 and it went to 3 1/2 i was like, yes. i got in there early now it's back to 3 some of the stuff you do, jason, you get me to take some receivers, going to give me an odds -- he never gets the first touchdown. i got for net with rushing yards. that's not going to happen so you can have that you need to give me that touchdown, that no brainer, because you owe me, all right? >> you better make sure you take advantage of that. >> i'm talking $3 bets

i'm talking $3 bets. on a triple parlay you can win $25 on a $3 bet, which is fine it has enriched my life, jason i think it's going to happen in more and more states it makes watching these games -- i'm really struggling with southern illinois, edwardsville against tennessee state today because they're both not very good do you have any -- you can't -- i'm not asking -- >> i wish i even knew the answer to that question you sound like you know a lot more about sports than i do. >> i read everything i can it's going to beat this system i'm going to use my brain and i'm going to feet the system that's all you're trying to do, and it never works what's the next state you need where do you really want to expand where would that help business >> there's a lot of exciting things going

i -- it's going to be a big year for the public affairs team. lots of exciting things happening. >> even got espn plus just to watch the esp plus games i'm watching volleyball. lady's volleyball quite a bit in the afternoon, which is good jason, thank you there's nothing that -- because i don't want cable anymore i can't watch the political news anymore. there's nothing left thank you. >> thanks for having me. >> big weekend big weekend coming for you we've got some breaking news to bring everybody right now 23andme is the latest company to announce it is going public via a spac the genetics company merging with virgin groups 23andme valued at $3.5 billion the transaction expected to be

completed sometime during the second quarter you're looking at that stock up about 8% we're going to bring you the first interview with 23andme ceo and virgin group's sir richard branson. the man behind the sc.pa coming up at squawk on 8:45 a.m. it's hard to hope, hard to cope with crisis. so we get to work. we mend, fighting for every person in every neighborhood; we, the coming of the common good. so dare to care, to be hope-sided. we're never divided, when we live to give, we always live united.

check out doge coin this morning. elon musk tweeting a rocket to the moon with one word doge. later he tweeted dogecoin is the people's crypto. then he tweeted no need to be a gigachad to own. finally he said no highs, no lows, only doge. i should also point out he has removed the bitcoin symbol from the twitter bio. if you wonder why he's doing this, i think he's still toying

with the shorts. he also tweeted, i am become meme, destroyer of shorts. it's like a haicou five syllables, five syllables, he forgot the middle one with seven. dogecoin is up 60%. >> no shorts he's destroyed every short tesla. he's destroyed $40 billion worth of shorts. he doesn't need to do it with twitter. >> yeah. i think he's just enjoying himself. >> i think there's a real question to be asked, is he actually buying bitcoin? i'm not sure that he is. i don't know that he's fwieg dogecoin or not. i'm not sure whether he's buying something. i don't know why people are popping the currency it goes to the whole issue of manipulation and responsibility that we all have, especially those who have a voice at a time like this and i think we should have a longer conversation about that i know we've got to go

>> luckily, we have a guest coming up who can talk about just that. when we come back, senator amy klobuchar will be joining us to talk antitrust regulation and big tech she may have a sense on this dow futures up by 34 points. s&p up by 6. s&p already up three days in a row. nasdaq up by 2 points. this morning up by 56. we'll be right back.

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amy klobuchar is joining us this morning she's writing a book called "antitrust, taking on monopoly power. good morning to you. thank you for joining us, senator. >> thank you. >> before we get directly into some of the antitrust issues i know you're dealing with, i want to ask you about a market power tech question and it's something we've seen played out even over the last week. part of the market power issue is a bit of a freedom of speech issue and a bit of what these platforms can do i'm curious what your reaction is

what do you think the responsibility, if there is any, that the platforms themselves should have when it comes to pushing stocks >> you know, i think this is just one more example of this enormous power that these platforms have i'm he glad in some of the other issues you guys were just talking about that secretary yellen has called a foreign investigation to look at this manipulation you want to have small investors. you want to have people participating but you don't want to have deliberate manipulation. that's a thin line i'm glad this is being looked into you don't want regular people hurt by this kind of behavior. overall with tech, i think we know for a long time they've pushed against any kind of rules of the road saying, hey, trust us, and that just hasn't worked for people it sure hasn't worked for people that have had their private information spit out all over the place. it hasn't worked for people who

are victims of misinformation. that's why in addition to antitrust we have to get rules of the road in place for privacy. we have to make sure the economy is fair for people i look at this from a business perspective, which is a lot of your show, i don't think it's good for startups. i don't think it's good for competition if you have big companies with 90% market share in the case of google that can control the gateways my bill and the house has done a lot of this, house of representatives, is aimed at actually getting to what i consider a conservative principle, capitalism. this idea of competition in the marketplace. adam smith himself warned about the overgrown army of monopolies we need a check and balance. we are rusty we haven't kept up with the marketplace. >> senator, do you tie the issue of antitrust with the idea of

misinformation and potentially even manipulation? you're right, misinformation, which we've seen in the context of the election. manipulation in very many ways can be looked into in the same regard as this -- gamestop and the election in certain ways could be put into the same category >> right so the approaches may be different. misinformation could involve rules and transparency policies and algorithms and those kind of things so in that way it's a different set of rules that you put in place. competition rules wouldn't just apply to tech, right you've got only two really online travel agencies online travel companies that are controlling all of the brand names. you could go down the road with the consolidation we've seen in industry i think one thing they have in common though, when you squelch competitors. we have zuckerberg email, when

they buy nascent competitors, you squelch all of the bells and whistles that could come up, the whatsapp instagram purchase, they no longer are off on their own trying to compete with facebook, facebook now owns them >> senator, is the answer to break these companies up is the answer to prevent them, the biggest companies, from buying smaller companies what do you think the ultimate resolution of this should be >> it's the law. the first answer is you've got to have the resources for the agencies you can't take on trillion companies with band aids and duct tape. look back at at&t breakup which, by the way, at&t's own chairman once said it was good for them it made them a better competitor you've got the whole cell phone industry responded i was a lawyer for mci at the time i know exactly what happens.

consumer rates go down they don't have that grassley and i have a bill to do that secondly, changing the laws -- >> what do you make -- >> go ahead. >> i was going to say, what do you make of the idea that maybe there's more innovation than we think? the reason i even suggest that is ticktock was something that if i said that phrase to you two years ago you, you would have looked at your watch if i said clubhouse, which is an emerging social platform even three months ago you would have talked about an actual clubhouse, meaning there are people doing relatively innovative things and actually gaining market share in some regard >> there are, and this is one of the most exciting things about america's economy. let me be clear. i don't want to punish success when we talk about structural remedies in breaking things up, those companies would be unleashed to do even more and my concern is that while we're seeing really good things happening, we also know there's

really bad things happening. part of that is that we don't have the remedies in place, we don't have the resources i mentioned for the agencies and some of the legal standards just don't fit the sophisticated marketplace we see today you have court rulings where the courts have gotten more and more restricttive about antitrust cases. this isn't just consumers coming to me. there's a bunch of businesses big and small that know this is unfair that can't get their product advertised the way they would or they're unable to compete in a marketplace all of this is balancing things out again. >> senator, klobuchar, can i just ask you about something that i heard earlier this week on this network. senator warren was on and she was talking about what's been happening with retail investors and with robinhood and was saying she wants to make sure they're going to stop market manip manipulation, including things like companies buying back shares that kind of shocked me. companies buying back shares does not qualify as market

manipulation in my book. does it qualify in yours >> i did not hear elizabeth's interview so i want to look at exactly what she said in that context. i think what treasury secretary yellen has called for is simply a review of manipulation i'm not sure she detailed that is what she was considering. i think what we're trying to do here is everyone knows we have a new economy. for four years we've been -- >> are stock buybacks are bad? >> i think there have been instances where they have been bad but not all the time, no >> senator, thank you for joining us today >> thank you. >> we really appreciate it we hope we get to have you back more for a more in depth conversation. >> thank you. >> when we return loretta mester will join us in an exclusive interview. straight ahead later, a huge interview on the spac merger 23andme ceo ann

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breaking news, ken frazier stepping down. his company reporting earnings below street expectations this morning. one week ago today gamestop hit a high of $483 a share

today it's worth less than 20% of that. this hour we're going to reflect on what we've learned in a wild week of trading with former nyc trading president, tom farley. big news, 23andme going public with a merging with sir richard branson. we have an interview with sir richard branson and ann wojciki. good morning and welcome to "squawk box" here on cnbc. i'm joe kernen along with becky quick and andrew ross sorkin s&p up 7 and the dow up 35 and the nasdaq up 59.

>> thanks, joe here are the stories investors are likely to be talking about today. anything news from merck he will step down on june 30th and be replaced by davis separately merck reported fourth quarter earnings that missed on the top and bottom line. that stock right now up by 9 cents. sources tell cnbc that apple is near a deal with hyundai for the automaker to produce an apple brand self-driving vehicle it will be produced in georgia it's tentatively scheduled to go in production in 2024. and american airlines saying that it will send furlough notices this week to about

13,000 employees as the second round of federal payroll aid is set to exspire doug parker side the coronavirus vaccine is not being rolled out as quickly as many believed. shares of american are down by 2.1% andrew want to get straight to our first big interview of the hour. steve liesman joins us with a very special guest steve? >> reporter: good morning, andrew yes. thank you. i am joined by cleveland fed president loretta mester thank you for joining us this morning. >> thanks, steve. >> reporter: yeah. treasury secretary yellen is meeting with other federal regulators about the crazy trade going on in companies like gamestop and amc give us the fed perspective on this i think there are a bunch of

areas this intersects including financial if a still the and whether or not you think more regulation might be needed. >> well, steve, i don't think that this is something that's really influencing my monetary policy views right now i do think we need to ensure it's a fair market place as you know, financial markets are important for the economy. i'm glad janet yellen is getting all of the regulators together to look at what happened it's a remarkable indication of how new sources of risk can influence the market, this interaction between technology and markets, and i think that's actually good to think about i do have concern for some of the retail investors who may not be as knowledgeable about the risks they're taking on. if you look at the oecd, it does a cross-country survey of

financial literacy of 15-year-olds the u.s. is ranked sixth looking at making sure institutions understand the risk that's being undertaken is important. i'm glad secretary yellen is taking a look at this, investigating what happened, whether there was any manipulation, whether this was a new kind of technology into the markets. >> reporter: how about from a monetary policy perspective, do you look at trading like this? there are some 15-year-olds actually involved in this trading -- and say, you know what, maybe it's our monetary policy which is so loose that we're doing speculative bubbles here >> that's not my view. monetary policy works through financial conditions, of course. we certainly understand financial stability is a necessary thing in order to

reach our mandate goals of price stability and maximum employment you're going to get volatility in the market from various sources. i don't think this should influence what our monetary policy is except that we should be monitoring and making sure that volatility doesn't spill over and engage in other parts of the financial market. at this point this is not one of those situations. >> president mester, you join us when the bank of england has announced it's doing preparation for negative interest rates. it does not necessarily mean it's going to be setting interest rates in a negative way. what's your reaction to that does the pressure build with europe negative and england negative for the u.s. to bring rates down into negative territory? >> steve, as part of our framework review where we took a deep dive, we set tools and

communications around monetary policy, we did discuss negative interest rate as a tool. the conclusion of the committee is that it wasn't something that we were interested in pursuing further. and i think 24that's right i think each country needs to look at the financial markets to see if it would be an effective tool in their economies. i think there would be problems with going negative. i believe the tools we have in terms of our interest rate policy, our asset purchase policy and our forward guidance, i think those are the tools that i want to rely on for adding accommodation to the economy >> move onto the economic outlook. the vaccine is being administered, maybe not as fast as people had hoped. what is your outlook for growth this near and what impact will that have on monetary policy review >> so there's no doubt about it, the rollout and the prospect for

a rollout of vaccinations so that they're widely distributed certainly is light at the end of the tunnel we have to get there though. so the light at the end of the tunnel shouldn't blind us to the fact that it's going to take some time to be rolled out but once we get to that point, i do see that the economy could grow quickly. i've assumed in my forecasting, you had to make some assumption that the vaccinations will be widely distributed by the third quarter and the second half of the year we'll see a pretty good pickup in growth so the year comes in at maybe about, you know, overall 5% growth and the unemployment rate at 5% or lower than 5% that's really contingent on that rollout of the vaccinations. that's the key element here and while that's happening both support from monetary and fiscal policy is needed to get us to that point and better prospects

going forward. after that point we're going to have a post vaccination recovery that's still going to need support. the economy is not going to pop back in seven parts of the economy, it's going to take time to get people back to work we have a good prospect for the second half of the year and going forward with the growth, but we need to get there first >> does it seem, i don't know how to describe this, strange or kind of out of sync for you to be talking about a 5% growth rate, 5% or below unemployment rate and yet the fed still in place with the most wide open, easiest monetary policy, $120 billion a month of asset purchases and zero rates does that seem out of sync to you? >> no, because of the waymon tear ri policy works and the nature of this shock that we've gone through we've never seen, right, this

kind of recession or recovery post the things that are guiding our policy or buel band aid goals. even though we have a growth rate of 5%, the hole was so deep we still need to climb out of the hole the stronger growth rates are going to get us there, but unemployment is still going to be elevated. we won't be at maximum employment and we're not going to be at price stability as measured by 2% and trajectory above 2% which is our new strategy because of how low the rate has been. you have to look at it to understand why monetary policy should be accompanied. >> president mester, one more question here. you and other fed officials have talked about minority unemployment and how it's fared

worse to white or overall unemployment the fed also has what it calls an inclusive employment goal, really directly to monetary policy can you explain what that actually means in terms of monetary policy. is the fed looking at the black/white unemployment gap as a trigger or some reason to guide monetary policy? >> what i interpret it meaning is that we look at more than just the unemployment rate and the overall unemployment rate to really determine where maximum employment is. we need to look much more broadly than we did before, and this came at a learning from the last cycle if you remember in the last cycle, which was, you know, lasted 10 plugs years, it was in the later part of the cycle where we really saw people in communities that, you know, were never really included in the economy and economic opportunity really get heart of the economy. they got jobs, and that learning

i think is important for the way we look at and assess maxment employment so we're explicit in the statement that you mentioned, the strategy that it's inclusive, meaning we're going to look at various indicators, including employment population ratios and various disaggregating measures to assess maximum unemployment. and just because unemployment is low, we're not going to necessarily move monetary policy it's going to be we need to see what's going on with inflation i think that's the way i look at it it's really let's look at the economy more broadly but also more disaggregated so we can understand whether we're at that maximum employment goal that we have >> president mester, thank you for joining us this morning and reacting to the news as it's coming over the wire. >> thank you for having me, steve. >> reporter: joe, back to you in -- i don't know where you

are? are you home hq new york city? >> yes always always. >> there you are >> oh, yeah, i didn't see the picture this morning >> monday and tuesday i was snow bound. anyway, thanks, steve. coming up, the pinch of salt -- pinch of salt. a limit on state and local tax deductions was a part of former president trump's 2017 tax law will lawmakers use the covid relief bill to repeal the cap? that's from two congressmen from opposite sides of the aisle. they like each other. later, sir richardraon bns and 23andme going public via a spac

coming up when we return, tom farley's going to join us. what he's recommending for market regulation following wall street's reddit rally. sir richard branson and the ceo of 23 and i me don't go away, "squawk box" returns after this

a little more than 3 years ago president trump signed a major tax overhaul into law. inside that law was a cap on the amount of state and local taxes that people could deduct from their federal tax returns. the state and local tax is potentially back in play

they're pushing for the s.a.l.t. limit to be pushed back but that has pretty heavy opposition in washington joining us for more on this is new jersey governor scott got heimer and david schweikert is not in favor with it congressman gottheimer, let's talk about this and why it should be part of the covid-19 relief >> as you know, people in my state in new jersey are really hurting now. 30% of our small businesses have closed unemployment is 7.6% people meade more dollars in their pocket to get into our economy and get things moving. it was great for the red states and jacked up taxes for people in my district in one of my counties it was

$24,000. so it significantly raise the taxes. this is about trying to get some tax cuts for folks who could use the help. >> congressman, i know you're opposed to this. why don't you lay out your reasoning. >> it's perfectly rational if you're from new jersey or new york to try to advocate for this, but we need to deal with the reality of the math. almost all the value ever this tax cut, as you might call it or tax deduction goes to the very, very, very top income earners. the top 1% gets 57% of its value. the top 20% gets i think it is like 96% of the deduction. if you're particularly a democrat, you believe in a progressive tax system, this is not the tax you advocate for because it concentrates its value to the very, very wealthy, high income earners.

congressman, what do you say to this >> dave, good to see you you should come visit with me in northern new jersey. the taxes went up. the average s.a.l.t. deduction in the northern part of the state, rural new jersey, $14,000. their taxes went up too. this is about frankly helping out families in a tough time and getting them back what the red states stole from us a couple of years ago. listen, it was great for them. if your a a moocher state like the state of arizona, you get $2 back for every dollar. jersey we're getting 75 cents back for every dollar we send. louisiana they get half their state budget from the federal government he's saying this is a democrat issue. this is a moocher issue. some states made away like ban

ditsz. we get money back and i think that's the right thing to do >> it's now objecting to that. >> it's a substantial amount of income it's to be from the phoenix. >> the reality is , therefore.

>> the state and local income tax. want to get 4% of the value of that tax deduction and if the goal is to help working families in the new york, new jersey, looking at the local tax deductibility may not be the appropriate result don't ultimately move the vast substantial value of the deduction for the very high earners. >> congressman gottheimer -- go ahead. >> i was going to say a super majority of taxpayers of middle class families in my district are paying more taxes because they got s.a.l.t

all i'm asking for is to end double taxation. the reason we did this for 100 years to not pay the same tax dollars twice. i'm happy to make the deal, david. if you agree not to take a penny more than you put into the federal government, i'll make that deal now. our numbers will go up in terms of what we get back in new jersey we'll be able to put those dollars to our roads, bridges, tunnels and things and i'm fine to make that swap if you want. >> let me ask you a question. >> sure. go ahead >> in terms of doing this now. i'm in your district i understand what's happened and what's paid. it seems crazy for me to take something that i know is so controversial and put it into the covid relief bill. why not do it now? is it because if this goes through budget reconciliation

you won't need any other votes >> we need money back in the pockets of folks in my district. i see this as a key part of getting some relief to folks who need it right now. we were hit hardest very early on devastating for new jersey and the northeast and states in the area i also signed and co-sponsored legislation to do it separately. tax cuts to the hardest hit places and we really got hit hard with the tax hike bill two years ago. >> congressman, we're almost out of time. i'll give you the last 20 seconds. >> you can understand the absurdity of this. you either support a graduated tax or you don't understand as republicans we've done things saying raise the deduction to the bottom 80% of income earners

if that's your working family, but 57% of this deduction goes to the top 1% income earners it concentrates to the very, very wealthy this is a regressive tax break for the very wealthy it's sort of an absurd process and using reconciliation our fear is they're going to raise income taxes as a way to pay for it >> not me. let's lower taxes. >> we are not hearing the end of this i have the feeling this issue will come back gentlemen, i want to thank you both for coming back in. we'll have you back. thank you. >> thanks. all right. coming up, new initial jobless claims data. we'll have the breaking news when "squawk box" returns. key portfolio events, all in one place. because when it's decision time, you need decision tech. only from fidelity.

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welcome back to "squawk box" right here on cnbc getting breaking economic data want to get to steve liesman who's got the numbers. steve. >> reporter: thanks, andrew. i have 779,000 for initial claims that beats the estimate of 830,000. if you give me just a half a

second i can tell you when it was last that low. it looks like we beat it o outgoing back to november for a number that low. it remains ridiculously high as things go i have continuing claims of 4.5 million. that's a decline from the prior month. now i'm turning to the productivity numbers u.s. farm productivity, u.s. labor costs up 6.8%. productivity 4.8%. we were looking for minus 2.8% this might have to do with the structure of unemployment here you have a lot of lower wage and lower productivity earners coming back off the roles. not exactly sure what's behind this it's something that's certainly been very, very volatile you had a huge surge in productivity in the third quarter and second quarter that's certainly a result of

what's happening with the pandemic we'll have to see how things level out. we're looking for tomorrow's jobs report. adp above consensus. claims number in the week of the survey was elevated above 900,000. andrew as i said yesterday, some of the high frequency data i've been following also has been negative we'll have to watch that for the jobs number where the consensus is plus 50,000 back to you. >> steve, thank you for that we've got a lot more coming up on the program right after the break. the lessons that investors and top market watchers learned on the rise and fall of game stock. tom farley will be our special guest right after the break. and then sir richard branson and the founder and ceo of 23 and me as that company announces it's going public today via his spac stay tuned, watching "squawk" on cnbc

treasury secretary janet yellen meeting with top regulators to go over the reddit rally. joining us to talk about what we've learned and whether he thinks regulatory tweaks are needed is thomas farley. looking at some of your comments we think more people invested in the market is a great thing.

democratization. plus if it returns to 8% as you pointed out for 100 years you need to do it to keep up and plan for your financial future you also point out that speculation and gambling -- speculatory returns are lower and gambling are negative. what should we think of last week it was good because so many people were involved or it was bad because it wasn't buy and hold >> great to see you again, joe by and large it had really good elements to it also some concerning areas it bothered me when i was running the new york markets bringing likely tens of millions of traders since the pandemic

started a year ago is a good thing. hopefully that brings them into the market and they learn some of the kind of long-term buy and hold investing tenants that have worked so well in this country for over 100 years you know, it can improve lives for a great number of people >> all right go on. at the same time, i mean, president of the new york stock exchange -- >> right. >> -- did you ever chaffe at the way a lot of the reddit traders characterized the market, the people that run the markets? the people that run the exchanges? the people that run the hedge funds? without anyone challenging them, they'd just say, look, we all know it's completely rigged. it's not fair. it advantages people -- it advantages the haves and the have nots don't have a chance. this is our chance if you look at wall street, it might be below the media

probably not that bad. >> i doubt that. >> tom, we can see a picture of you if we look up in the dictionary who's running things. >> yeah. yeah hopefully i'm not one of these suits we keep hearing about. >> you love suits. are we suits >> i couldn't wear one after the branding debacle of suits this week it's fun to talk about tendies and stocks and all of this kind of thing to me, a more interesting story is probably the less interesting story for the majority of viewers, which is the clearing infrastructure of the markets. markets are always going to have short squeezes and always have panics and manias and you want to limit those and the sec certainly has a fair and orderly

markets mission but the more interesting thing is that the dtcc called robinhood for $3 billion it didn't have take it from me, i've been through this i've managed clearinghouses, clearing brokers, merchant def defaults they're a messy business in some ways this was an escape over the last week in that we didn't have a clearing broker default. when you have a clearing broker default all of a sudden you're liquidating millions of accounts i think that's going to be the lasting story. it's that and what you described, joe the perception of the stock market it's interesting because you have a guy coming in to run the sec, barry gensler, probably the most knowledgeable sec chair in history when it comes to clearinghouses i expect he's going to gravitate. walk me through why you called for 3 billion, they didn't have it, they put up a smaller number

it's not just robinhood. a lot of people were getting calls. something broke down in the risk model of the risk brokers. i can tell you having worked with or more gary gensler, there's going to be a whole bunch of insightful, indepth questions about that. >> hey, tom, we have to break in here and i do want to get your reaction on the other side of this we have some news just crossing right now about clover health care -- clover health. the medicare advantage provider that was taken public by a specific backed by chamath pochamath. it alleges that he misled investors about critical aspects of clover's business in the run up to the spacs transaction. it said they have not disclosed they are under active investigation by doj cnbc has not independently

verified it. we have reached out to clover and chamath but you're looking at that stock dropping 9% and i want to go back to tom on this because we've had lots of conversations about spacs. we talked about diligence. we talked about what can be said and what can't be said in the context of that and frankly how different it is than the ipo process unto itself. we obviously had chamath on the morning of the clover health announcement tried to push him. we can go back and get the tape because i remember asking him a number of questions about the history of this company and there were complaints about clover health. in fact, we didn't have enough time to get to certain questions about it i remember that morning very well tom, can you just speak to these larger disclosure issues right now in the spac space? >> yeah, sure. it's nice to be here with you, andrew obviously as you said it's breaking news. i don't know anything about this

situation. ambulance chasers. they're going after something with absolutely no merit the spac vehicle is a really interesting vehicle in that it gives a company that wants to go public certainty about price and the amount of proceeds there's also a little more certainty, although not complete certainty, about the timing of going public and, you know, as you point out, there are slightly different disclosure obligations in a specific than a true ipo you can share projections with investors. with that additional -- the additional ability to share information with the market, it comes great responsibility as you would imagine given where i come from in my career, i'm always very circumspect about what we share with investors if you share one thing with investors, you always want to share it all you never want to share something about investors that the benefit of hindsight will be

rooted in words. >> tom, does a spac sponsor -- this is a legal question does a spac sponsor have the same fiduciary duty to the public shareholder that a typical board member might of a publicly traded company? >> so the spac has a fiduciary obligation to the shareholders of the spac itself if that's what your question is, andrew. it's actually quite clear. so in my case i raised one spac and merged with a company called global growth. i have a second specific i have $600 million of proceeds sitting in a trust account i have shareholders that put up those $600 million i and my fellow board members have a fiduciary obligation to those shareholders who have provided the $600 million. >> that's an interesting distinction. do you have a fiduciary duty to

the despacced firm you have a duty to the first shareholders do you have a duty to the second shareholders >> i think you're complicating and getting into a nuance that isn't complicated. the board members of that new company then have a fiduciary obligation of the go forward company. >> so, tom, just in general in terms of -- you saw what happened last week >> yeah. >> is it okay to go -- to use social media to aggregate a lot of people -- >> no. >> -- to go long or -- it could happen if they didn't like a company that they decide we're going to short this company. is it okay to operate that way or do we need to tweet regulatory agencies to be able to monitor things like that? >> joe, i don't want to sound cavalier about this.

i have a tremendous amount of empathy. you have an equal amount of winners and losers the equity markets go up and you're creating winners and losers what happened to me is not a good thing other than it may well have brought new traders to the equities market. i have empathy i don't want to sound cavalier i'm less concerned about the tracing, i've seen shorts over and over and over again and they are painful and the price comes back down as it is here but there is an underlying clearing issue and perception issue with respect to the perception issue, i think you deal with that with more transparency. that's how barry gensler will look at it he'll look at the issues of short position disclosures he's not going to say get rid of short selling. that's ridiculous. short sellers bring a lot of value to the marketplace

how do we bring more competence into the market. >> tom, to that point, and i'm seeing, you know, twitter and reddit and other things lighting up as we're talking. hindenburg research is a firm that's involved, oftentimes advising short sellers, et cetera. >> right. >> the question is they have incentive to put out this research the stock moving on this do you believe that short selling is a part of the market and maybe more importantly that firm will be held accountable if they were trying to manipulate the stock. should they be held accountable in the same way or should a retail investor on reddit be held accountable the same way hindenburg research might? >> when there's uncertainty, everybody should be finding a boogie man herbert hoover blamed the

depression on them they weren't the blame it seems good to name the blameless, faceless guys it's either the investors or hedge funds or short sellers or people writing a negative report the market takes all types we want people to express a view a stock is going down. we want people to express those views. it increases liquidity and increases the incredible markets that are the envy of the world i won't vilify short sellers i won't vilify the reddit traders. the fact that they're sharing trading ideas, hello that's been going on before the nyse has been funded 200 years, 400 years, 1,000 years i don't see the boogie men and evil doers because of this i see really investigate the underlying issues, improve transparency and don't throw the baby out with the bath water

don't start thinking, hey, wow, we have a volatility problem let's tax the heck out of this market or let's overregulate these markets. that's where you get in real trouble. i lived through that. >> you're good on this subject, tom. we want to see you again soon, but you're not fooling anybody you're still a suit. i don't care if you come on in your skivvies, you're still a suit. >> no. no >> you're not a suit okay you're not a suit. >> i'm going head band and wrist bands next time i'm on here. >> you can be a roaring hat or -- >> it was nice to see you guys again. it's been must-see tv the last week and a half. nice job. >> we'll take a break from the spac world and come on again coming up, sir richard branson and the founder of 23andme you're watching "squawk box" on cnbc ♪

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xfinity makes moving easy. go online to transfer your services in about a minute. get started today. big spac news just out, meg joins us right now with a pair of special guests. meg? >> becky, thank you so much. 23 and me is going public, through a merger with sir richard branson's virgin's group

spac and the founder and ceo of 23 and me, as well as sir richard branson joining us now, sir richard, let's start with you, i'm hearing that ann has a few audio issues and she'll join us very shortly but tell us about this decision to choose 23 and me, you said you looked at hundreds of companies but you see tremendous growth potential here where do you see that coming from >> well, i was a very early investor in 23 and me, and i was lucky enough to know ann in those days and i was also a very early user, i actually discovered that i had a great great great grandmother who is indian, and we managed to track a grave stone, so i've been incredibly impressed with ann and her team, over the years, and you know, of the hundreds of companies we looked at, this was the one that really stood out. >> so you just mentioned the

ancestry applications of 23 and me, and they have been a pioneer in health care and trying to bring that directly to patients and consumers, where do you see the growth coming from, more from the health care side, or the ancestry side? >> i think the bread and butter is the ancestry business to date but 23 and me now enables people to take control of their health, to lead healthier lifestyles, and then with the knowledge they've got, they can develop drugs much quicker, to cure people, and then, you know, since investing in 23andme a number of years ago, we at virgin have gone on to invest in companies seeking to cure cancer, diabetes, heart and liver issues, and so on, and we've also set up companies like virgin health to help people lead healthier lives and in my poon there is no better way to invest your money than health care, and return, the financial terms can be very good, but it

can also save your life, or it could be even, it could even save a family member's life, so it's great to put a percentage of your money into health care. >> we know 23 and me has been working on the drug development effort, partnering with major companies and really tapping into this incredibly rich database of genetic information, with users opting in to research do you see that growing as a part of 23 and me's business, under this new vehicle you have? >> very much so. and i think one of the reasons they wanted to go public was to have the sort of resources you need when you're developing drug, but what appealed to me was the fact that, with that enormous data of 10 million customers so far, and all of that information, that they should be able to develop drugs, you know, in three and a half

years, rather than seven years, which a conventional drug company takes. and that's extraordinary, because developing drugs is extremely expensive. and i think that's the real big upside of this company >> joe, do you have a question >> a question for ann when we have her when we have her i know we're trying to, what do they say in this business, we're trying to, well, actually richard maybe can comment on it before we get ann and it is actually kind of a personal question, richard, i have not done this, but my kids have, and i was adopted, so suddenly my kids know relatives that they have no idea about, they live in michigan, that live in texas, and the whole privacy thing is fascinating to me, and i'm just wondering about what type of

legal concerns there are, when all of a sudden, people all over find out that what they thought they were, wasn't exactly who they think they are, and it opens up all kinds of nightmarish privacy concerns that i just, i wonder how you navigate that, and i don't know whether achb heard the whole question, i understand she's good now, but you know what i'm talking about, richard it's crazy, what some families find out, from 23 and me >> well, this is when i don't have ann, hoping to answer, but i thought, i've got friends who have discovered brothers through 23 and me, and have been absolutely and utterly delighted to track them, a half brother or a brother down so i don't generally think it's nightmarish. i think it's actually something which is generally really nice to discover people that you

didn't know existed. >> we've got ann with us now, our audio has been fixed and ann, great to see you this morning, and i of course want you to address joe's question but i have to ask you, one of the last times i think we saw each other in person was at this conference in las vegas, the health conference, i asked you if you were considering an ipo, and at the time, granted it was more than two years ago, you said it sounded miserable to be a public company ceo you said there's a time and a place when you're steady and growing, so are you at that time and place? why go public now? why through a spac just tell us >> it's a great question, and you're not the first to ask, so i think i've been really convincing about the fact that we were going to stay private for a long time and we did, we did stay private for a long time and frankly wewere private while we built really this infrastructure, that i felt like it is so important for us to execute all the things we want to do. really be able to take on therapeutic, really be able to

take off on the consumer vision, so what happened now, is there's a maturity within the company, there's an establishment with our customers, about how we operate, there's an establishment with our investors, about what the mission of the company is, and how we always put our customers first, and so now, we're really at a point in time, where i'm ready to, you know, explode, like there's huge opportunities on therapeutic, and huge opportunities for our consumer business >> and let's add, go back to joe's question, this privacy question, has been one that you have always had really, before your consideration of business, and how you are looking at that, and questions that consumers might have about their privacy, on how, you know, what they might discover >> for me, privacy has always been about choice. and transparency so the most critical component of 23 and me is that we give our customers the ability to have a choice to get their genetic

information, and a choice to learn about additional relatives and a choice to learn about additional health information. and then we're transparent about, do you want to opt into research we have a phenomenal collaboration with gsk, really trying to move this information forward, to make therapeutics that are permized that will really cure disease, so the tenets for me on privacy have always been about choice and transparency >> and we're just about out of time, but i have to ask, are we going to see new things from 23 and me what's next for growth for you >> i think we're really just about to take off, i think that's what is just, is so exciting here, is the therapeutics team came to me last year and said we are exceeding expectations, it's just taking off, so there's a huge opportunity there, and then on the consumer side, we're at this summit point because of covid where there's a whole

world coming with virtual care and how is it that we can help our customers really think about prevention, think about covid has taught us that the, the importance of prevention, and what the human genome gives you is this information about what your risks are, and now what we're going to be able to do is give you more and more of those ways, to help keep our customers healthier. we found over 75% of our customers were already taking actions trying to be healthier, and so the next era for us is about using your genetic information to benefit from the human genome and actually have a healthier longer life. >> ann wojcicki, we appreciate you being here, sir richard branson, thank you so much back to you, andy. >> thanks, meg and appreciate you bringing us that interview be sure to join us tomorrow. "squawk on the street" begins right now. good thursday morning, welc