e provider about nuplazid. - [narrator] grubhub perks give you deals e provon all the food that makes you boogie. (upbeat music) get the food you love with perks from- - [crowd] grubhub. good morning 1 c

11:00 on capitol hill. "squawk alley" is live ♪ ♪ ♪ happy thursday welcome to "squawk alley." i'm jon fortt with carl quintanilla and julia boorstin ahead this hour, whose side is robinhood on the ceos of robinhood, reddit and melvin all testifying to congress at the top of the next hour and then it's a rollback for walmart shares this morning as the stock falls post earnings the ceo will join us in a cnbc exclusive at 11:30 we'll begin with facebook

calling australia's bluff taking a different tack from google banning the sharing and viewing of news down under australia is trying to do here arguably makes sense facebook values news content because it creates engagement. if facebook now has to pay to link to news content, it might have to place a value on different types of news content perhaps some vetting of news sources getting to this whole misinformation thing does australia have the stomach to really let this play out because, i mean, facebook is not a democracy. it's an authoritarian company. and people in australia, around the world, love facebook >> people love facebook, jon, but, you're right, this is facebook calling australia's bluff. what's so interesting here facebook is very concerned about this proposed bill that

australia has because it could set a precedent for other countries around the world to also force facebook to pay for content. this is clearly not just about australia. but i think the risk now to facebook is the reputational damage i mean, the fallout that could come from this that's unintended, facebook accidentally ended up blocking other sites. the sharing of other content such as nonprofits and government services, things around weather and health. so facebook is getting a lot of blowback for that, carl, and they don't want to be in trouble for being bad for public services they don't want to be associated with all of these things that they are supposed to be allowing people to share. so that's going to be a real concern, carl, and it's going to be really interesting to see what happens considering the fact you have people like the prime minister of australia and the former head of facebook australia coming out and criticizing mark zuckerberg and facebook right now >> yeah, you're right about the other sites that did get blocked.

a piece up this morning, julia, about how apparently facebook even briefly blocked its own page in australia according to some reports, not exactly sure how that would work. it's clearly not an australian story alone, jon the question is, is france next, and to what degree do rivals like google try to create some goodwill with other companies like news corp. in the wake of facebook troubles? >> indeed. i wonder what would have happened if this were happening in the midst of australia's wildfires. do you block news sources then so the longer this plays out, the more fraught this potentially, carl, gets for both sides. >> guys, we're less than an hour away from the start of the hearing at house financial services today regarding robinhood and gamestop joining thus morning two members of the committee massachusetts congressman steven lynch and kentucky congressman andy barr gentlemen, it's great to have you. thanks for the time ahead of the hearing. appreciate it. >> thank you >> great to be with you. >> congressman lynch, we have

three big silos of interest here being represented, the short sellers, social media and then there's retail is there one, do you think, that's truly going to be at the center of this hearing >> i actually think that we should focus on the integrity of the markets themselves and not so much on winners and losers in the gamestop trade there is a target-rich environment. i think my colleague would agree there are a lot of moving parts here but what i'm centrally concerned about is the fact that during the runup of gamestop's price dislocation, you had robinhood in a position where there seems to be a liquidity problem. they suspended trading and put their retail customers at enormous risk. and i'm just wondering what would have happened if there were wider volatility in the

market and there wasn't someone like citadel to come in and rescue them? what if we had liquidity problems wider in the market and you had a major brokerage firm suffer a catastrophic slaps, could that reverberate through the system itself? so i'm worried about that and i'm also worried about, look, our adversaries learned a lot about the vulnerabilities of our markets back there during the gamestop debacle so is there a way that these trolls in russia could do the same thing they're doing with misinformation on the political side but use that to disrupt and undermine the integrity of our financial markets? that's a real possibility. but we'll learn more about that today. >> yeah, there's certainly a lot of the issues you're raising were big questions in the early days of that squeeze congressman barr, in an era in which there seems to be no issue

that is even remotely bipartisan, does this one at least get in the ballpark? >> well, i hope so and i hope this hearing is more about an impartial fact-finding exercise as opposed to political grandstanding or an effort to justify excessive government interventions in ways that would actually harm investors. i think there is going to be undue scrutiny of short selling when, of course, we know short selling is an important part of hedging, the proper and efficient functioning of the markets in terms of price discovery and the provision of liquidity. i hope that the scrutiny of payment for order flow doesn't end up leading to an overreaction by regulators to unde undermine and we've seen great innovation with robinhood and other online trading forms to

give access to the capital markets to expand participation in saving and investing. volatility and a handful of stocks that didn't have any systemic impact in terms of the broader markets should not be a justification or a predicate for an overreaction by regulators. >> do you think there is a risk of going too far in terms of regulating more transparency especially around that payment for order flow >> i would say i need to know more to judge that i am concerned about the pay for order flow model and the aspect of are retail customers getting the best price because there does seem to be a lack of transparency there i know that the brokerage firms have to file 604/605 forms, but

those are once a year or when you open your account. so there's no way that a retail -- there's very little way that a retail investor can find out if they got the best price and what the margin was as this -- are we getting the national best offer, or is the margin significant that the retail customers is losing out here so is this the best execution under this model and how much -- how much advantage is being taken of the retail investor under these circumstances? i do agree that, you know, we want to encourage people we all love the idea of democratization and zero commissions but it's not free. there's a cost here. and we're trying to figure out what that cost really is >> congressman barr, good morning. it's jon fortt

i want to press on that democratization idea it seems there's a difference in investing and day trading and when it comes to access to capital markets are apps like robinhood really encouraging saving and investing, or are they encouraging the gamefication of trading? do you see a difference? and do there need to be perhaps different incentives given to the way this gets rolled out to new investors? >> that's a good question. i would say you can't legislate valuation. investors should be free to take risks. that's what the market is all about. investors should be free to trade as they see fit and they have the freedom to be wrong i think you're seeing market discipline set in here no, there shouldn't be gamefication of the markets, but i think market discipline is setting in when you see retail investors who get in late in

this rally and where gamestop pricing is so far away from valuation that retail investors learn a painful lesson i think at the same time these professional hedge fund investors are learning what democratization means in terms of the risk of short squeezes. and so i think this episode is a teaching moment for many market participants i see the market working very well >> it's not a bad point, congressman. certainly the street is well aware of the institutions having to rewritetheir algorithms and strategies because of the retail presence looking at that chart of gamestop will tell you people who bought at $400 have learned a painful lesson we can't wait for the hearing this afternoon i appreciate your guidance going into it. >> on the issue of gamefication,

though, last year we saw the volume of options double i'm sorry, up 50%. and i'm concerned that retail investors are being led into the options trade, and that's a much higher risk. and it adds to the gamefication aspect of this as well very concerned about that. >> we look forward to the line of questioning, congressmen. thanks so much >> thank you thanks for having us >> good to be with you still to come, walmart ceo doug mcmillon with that stock sliding. this is decision tech. find a stock based on your interests or what's trending. get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity.

when you switch to xfinity mobile, you're choosing to get connected to the most reliable network nationwide, now with 5g included. discover how to save up to $300 a year with shared data starting at $15 a month, or get the lowest price for one line of unlimited. come into your local xfinity store to make the most of your mobile experience. you can shop the latest phones, bring your own device, or trade in for extra savings. stop in or book an appointment to shop safely with peace of mind at your local xfinity store.

walmart continues to be a drag on the dow this morning took about 50 points off right at the open, down more than 5% we're going to talk to doug mcmillon later in the hour about the quarter, the capex, the div hike, the wage hike and more hi, i'm a new customer and i want your best new smartphone deal. well i'm an existing customer and i'd like your best new smartphone deal. oh do ya? actually it's for both new and existing customers. i feel silly. but i do want the fastest 5g network. oh i want the fastest 5g network. are we actually doing this again? it's not complicated. only at&t gives everyone the same great deal.

like the samsung galaxy s21 5g for free when you trade in. some say this is my greatest challenge ever. but i've seen centuries of this. with a companion that powers a digital world, traded with a touch. the gold standard, so to speak ;)

- [narrator] grubhub perks give you deals on all the food that makes you boogie. (upbeat music) get the food you love with perks from- - [crowd] grubhub.

welcome back robinhood's investing for everyone approach drew millions to the platform but how much is wall street pulling the strings of robinhood our next guest suspects robinhood's deep ties brought us to today's hearing on capitol hill joining us now author of

"leapfrog. natalie, good to have you. there are a lot of theories on why is robinhood really motivated to do the things it does, but it seems to me the most likely explanation is robinhood is set up to try to be the facebook of trading. it wants to keep people engaged and spending win or lose which may or may not be in the individual investor's best interests. >> yeah, you know, i like that you mentioned facebook at the end of the day who is facebook's customer? is it the end user or the people they sell massive amounts of lucrative data to? i think the same thing is true here who is robinhood's true cu customer is it the end user or is it the people who get a slice like citadel of every single transaction that goes through their platform wall street and silicon valley are not that disconnected.

you have people like steve cohen who were investing in a company that went under and as recently as october the founders of the company, where did they go they rolled into robinhood these are all interconnected companies. i feel bad for the founders in the middle of this because the people invested in and ultimately their true customers like citadel are pushing them for short-term returns and outcomes f. you're a founder and trying to build a business that will last, if you're trying to build something for the long haul, you have all sorts of people whispering and enforcing that you make decisions about the short term not about making sure your company exists in ten years. >> point taken about who the customer is. i would argue facebook isn't really selling the data. it's selling the fact that facebook can target because facebook has proprietary access to the data. the value of data underlying both cases seems to me to be the important thing.

who gets smart over that access to massive amounts of data and talking in terms of democratization, in both cases it's the big companies with big funding and resource who is get access to that data because they're able to look at what the little people are doing, right >> yes, and i want to go back to the fact that if i'm being told that this is no commissions and no fees and i'm not told every time i take an interest in a stock somebody else is getting a heads-up and selling it to me at a little bit of a premium no matter how small it is, when we talk about democratization to anyone about anything it needs to come with full transparency and we don't have that that's what i think this hearing will be interesting. if you're going to go to the effort to democratize anything, that comes with responsibility anybody can buy a car but not everybody can drive a car without a license. it has to come with education and with transparency. if i was building a movement of

millions of people that were going to go on robinhood and move the power to the people, i want to know who is benefitting from each of my transactions, full transparency about the rate and who every day is making out with a slice of the pie. >> yes, certainly transparency will be front and center today, natalie. i'm curious about another thing which is the cap table, the people who are the investors in robinhood. it sounds like you think there may be some conflicts of interest there, an incestuous set of investors explain what you mean by that. >> people scratch each other's backs and i think it's a lot of a closed network you have investors that invest together regularly, that when companies fold, they fold themselves and their founders into the company it's hard to imagine the same guys that invest together, the steve cohens aren't also talking

about what happens when a cap is cannibalizing another company. they invest, collaborate why would they not be collaborating in an environment like this? i'm not suggesting anything illegal happened but, yes, as your point stands, transparency involves knowing who the players are and what's their motivation. again, back to venture capital like trading is designed to be short-term oriented. they care they get an exit as soon as possible to have liquidity and show the return on investment on their fund, if it's sequoia, andriesen, they just care they have their moment of liquidity they don't care if the next day it disappears. they got their out >> well, natalie, i'm curious to hear how you see your model as different from that -- you call yourself a builder capitalist instead of venture capitalist.

tell us sort of how your model is different >> sure. i would go back to anybody that would say that to say, sure, you might say you care about the company long term but what are the economic incentives to care about the long term when the only thing that really matters is that five, six, seven year fund returns an investment so you can raise the next fund. it defines what we've been doing for a long time. a bunch of people investing in startups long before venture capital existed that are just long view investors, they tend to be more operators than bankers, people who know how to make a company work, how to build things that last 10, 20, 50 years and because their operators are not doing spray and pray, not doing portfolio theory, they have more concentrated portfolios i'm looking at my portfolio and i don't think it's acceptable for over 70% of my portfolio to die which is typically what happens in a vc portfolio. i'm not looking for that one uniform that will make up for

the losses of the rest of my portfolio. i'm in it to win with every single one of my companies not all of them will succeed but not all of them -- not the majority of them will fail either and disappear off the face of the earth. i i am not doing the investing that requires one or two unicorns to pay for everybody else >> i hear what you're saying, natalie. at the same time perkins held on to stakes in alphabet and amazon and made a lot of money after the ipo so it's not always about the quick exit natalie, thank you >> thank you when we come back walmart ceo doug mcmillon after the break. trade. oh yeah, you going to place it? not until i'm sure. why don't you call td ameritrade for a strategy gut check? what's that? you run it by an expert, you talk about the risk and potential profit and loss. could've used that before i hired my interior decorator. voila!

maybe a couple throw pillows would help. get a strategy gut check from our trade desk. ♪♪

i'm rahel solomon and here is your cnbc news update this hour in texas millions are waking up to lights that turn on for the first time in days fewer than 500,000 customers remain without power, however, about 7 million texans, about a quarter of the state's population, are being ordered to boil their water before drinking it and, have you seen this one yet, the internet lighting up with photos of texas senator ted cruz apparently traveling to cancun, mexico, yesterday as millions of people in his state still lacked power and heat cruz's office meantime has not

responded to requests for comment. in italy mt. etna continues to erupt in spectacular fashion. europe's most active volcano has been spewing lava and ash for days "consumer reports" is out for top picks. toyota lists with four entries the camry, prius, corolla and the lexus rx and tesla's model 3 also made the list julia, back to you >> thanks, rahel it's the big earnings mover of the day, walmart shares down about 5% alongside the president and ceo of walmart courtney >> thank you very much, julia. doug mcmillon, thank you for joining us here today. after you reported your fourth quarter and full-year earnings as well as just wrapping up your investor day and rushing to the camera for us. i looked back at the calendar and it was one year ago today you had your last investor day and i asked you about the coronavirus impact in china.

at the time you were just talking about having to shorten some store hours and a switch in some of the categories being bought a lot has changed since then walmart as an essential retailer a big beneficiary. how can you hang on to this momentum, though, going forward? >> hi, courtney. first of all, thank you to our associates you're right we didn't know anything that would happen in 2020 and they did such a great job of serving and reacting, adapting so we're eternally grateful we grew our top line and had a strong bottom line performance for the year total company for the year ended up $560 billion in sales on the top line we layered on about $40 billion in constant currency which is an amazing accomplishment it's because of all the people in our stores and our e-commerce businesses, our truck drivers and all those people, that made it happen. the way that you maintain and grow a business in retail is by serving customers.

in the case of sam's club members. our focus is on doing just that. some of the decisions we announced today are aimed in the mid to long term being able to do that in an even better way. today we announced an increase in u.s. wages with over 400,000 associates seeing an increase and also increased our capital plan for this year in front of us so what we can invest in our distribution centers, fulfillment centers and in market fulfillment centers so that we can do an even better job of serving customers with pic pickup and delivery. >> you mentioned the wage increase now that it will take your average wage to $15 an hour, but that still leaves, i believe, from your investor about half of the associates that are going to be below that. what would happen if the federal government did, in fact, mandate a $15 an hour minimum wage across the board that would have to be material to walmart's 700,000-plus

employees that would fall into that category. >> we do think the federal minimum wage should go up. it's been too long since it's been adjusted. some form of an adjustment there and indexes it so over time businesses large and small have some certainty around what the federal minimum wage will be as you know around the country states have started to move. we've moved. our wage is up 50% since 2015. our focus today with this announcement we want to increase wages for key roles in our business and for associates with more tenure. we're raising the wages for 400,000 people in key jobs for e-commerce fulfillment in our stores and operating the stores every day stocking freight, managing inventory our minimum wage rate will continue to go up over time and i think our past history reflects that point. what we're trying to do is put together the opportunity to

climb a ladder so mmm of us started as hourly associates in our company. i'm one of those the way we think about it is regardless of where you start in a company what is the opportunity you have to become a store manager or to move into a home office or have a job like mine so we're investing not just in the bottom rung of that ladder but the other rungs as well and it's not just about hourly wages. for some roles we believe in cash bonuses and don't want to take those away for every role we do a 401(k) match we have a share -- associate share program where we invest and when they buy walmart stock, health care is important we think about the whole system and will invest over time while investing in things to drive productivity like automation >> you recently took a trip to washington, d.c., met with president biden, have you been pushing for a broader stimulus

package, another stimulus package, the one that is currently being debated or some other version, and/or, some help for the broader retail industry which outside of walmart many of your fellow compatriots have been suffering over the last year what does the retail industry need and what do consumers need from the government? >> there are some specific industries that need support and some players within the industries that do we've been for months now suggesting the government should move quickly to do additional stimulus and as we had the conversation last week that obviously came up. we do see individual families and customers struggling more than they did this time last year and months to go. as it relates to the stimulus the two things that we stressed were helping the families that need it most and helping small business the amount of that congress, the administration are going to have to figure out but we can see in

our customer behavior some customers as they received this most recent stimulus are spending it more on basics, on private brands, smaller pack sizes, things like that as opposed to some of the stimulus dollars that came out earlier last year spent more like tax rebate checks where people were buying televisions and things to entertain themselves at home it reflects the fact customers do need some help. >> part of the announcements from today's investor day, you talked about capital expenditures, you're looking at about $14 billion, higher than, $10 billion or $11 billion we've seen previously in past year here but mark lurie is now gone should investors be concerned about the rate of digital innovation even with a stepup in spend, some of which is going to the digital platforms? >> walmart has a lot of talent and a lot of depth and mark did

a great job and i'm grateful he's been a part of the company. greg foreign left a while back greg did a fantastic job as they leave, other people step up in walmart's case now we have a lot of digital thinkers, an omni channel approach and all of our leaders, our associates on building a business that's more digital and more omni in fashion. we're all excited about that as it relates to the capital investment, there are several forms of automation that we've been testing in our distribution centers and e-commerce fulfillment centers and in some cases automation that can go inside of a store or next to a store that will help us grow our capacity for pickup and delivery and do an even better job of serving customers that want to get delivery whether it's from an e-commerce fulfillment center or their local store which enables us to deliver quickly. what you see in our numbers today we've made this choice to both invest in people, help

create that ladder of opportunity, and at the same time invest in automation such that productivity can go up and the customer experience is better and those things pressure the next 12 months in some ways but they set the company up beyond just this next 12 months to have even more success and growth so we're really excited about it >> you're talking about building a business there are a number of other revenue streams outside of the core retail business that you're looking to grow, advertising is one of them, health services, financial services, is this just a necessary diversification to be able to help you better compete with the likes of amazon and to improve your margins? >> a diversification is important, but the thing that's different today is the way that digital can play a role in that diversification. these are business that is are designed in a way that puts the customer in the center and is

m mutually reinforcing the role of financial services is different so what we're excited about is the way those things get stitched together into a customer experience that serves more holistically and it creates a different business model that drives the top and bottom line and that's a positive and gives us more levers to pull looking forward. >> and just to wrap up here let's talk about consumer behavior we like to give your view on the u.s. consumer broadly and the consumer you serve certainly the pandemic has been very hard on certain demographics in this country what are you seeing in the u.s. consumer and in some of the demographics you may be serving? >> with over 160 million transactions on the average week we basically see all of america.

so if you take a snapshot of our demographics or income levels, it looks like the united states. so we see it all there are customers feeling pressure, people who haven't been employed -- i had a conversation with a customer not long ago in a store i'll never forget who was trying to make basically $20 stretch for the last week of the month and with that $20 buy some groceries and have money for gas those customers are the ones the stimulus package needs to help and help quickly and small businesses, too. we need small business to come back online. it's such an important part of our economy. we would like to see the government more to address those areas quickly. we're trying to help with vaccinations, keep prices low, stay in stock. we're one of the places people can get some help and be part of the solution to this recovery.

>> there are so many more areas we could go into but we are out of time. doug mcmillon, ceo of walmart, thank you very much for joining us on a very busy day for your company. >> thanks, courtney. >> carl, back over to you. >> all right, great stuff. thank you so much. and thanks, doug the white house, meantime, we're getting word is set to take some action to make sure that the united states has adequate supply of certain scarce resources kayla tausche has more on that hi, kayla. >> reporter: hey, carl the white house has said that in the coming weeks it will issue an executive order launching a comprehensive review of critical supply chains and cnbc has obtained a draft of that executive order that provides a little more detail about exactly how the white house is thinking about this and where some of those areas are where it sees the need to be greatest. the executive order has a two-part review that it would launch the first is a 100-day review identifying immediate needs in four specific areas.

the first is semiconductors, high-capacity batteries including electric vehicle batteries, the third is critical minerals including rare earth and the fourth is medical supplies including nitro gloves which is one area the administration has evoked the defense production act to try to ramp up production of rubber to produce more of those gloves by year end the second part of this review would be a one-year review by several government agencies that would follow this 100-daytime frame and it would be a review of the health industrial base and in the language included in this draft it is very interesting. there should be focus paid to items produced solely in or transported through nation that is could become unfriendly or unstable in the future we should note that, of course, as with all drafts the contents

are subject to change. the white house did not respond to a request before airtime, jon. certainly this provides a little bit more detail of directionally where the white house is thinking on this and what we could see in the coming weeks when this order is officially released >> some important analysis happening there. thank you. as we head to break, take a look at shares of twilio. results getting a boost from recent acquisitions like the segment customer data platform and election related businesses as well. we'll be right back. we see increased efficiency connected to more comfortable homes. emerson's energy star™ certified sensi™ smart thermostat uses geofencing to simplify how homeowners manage comfort and costs. emerson. consider it solved. good morning! how homeowners this is where everything. started. the four way is engulfed in history.

you're sitting in the place where giants ate. the four way is the heart and soul of the community. ♪ ♪♪ hey you, yeah you. i opened a sofi money account and it was the first time that i realized i could be earning interest back on my money. i just discovered sofi,

and i'm an investor with a diversified portfolio. who am i?! i refinanced my student loans with sofi because of their low interest rates. thanks sofi for helping us get our money right. ♪♪ - [narrator] grubhub perks give you deals thaon all the food that us gemakes you boogie.. (upbeat music) get the food you love with perks from-

- [crowd] grubhub. the dow hit a session low of down 325 down 267 at the moment s&p not far. big story of the morning, of course, after the gme reddit hearings on the hill the treasury secretary on the closing bell with sarah eisen at 4:00 p.m we're back in a moment stay with us

keeping your oysters business growing has you swamped. you need to hire. i need indeed indeed you do. the moment you sponsor a job on indeed you get a shortlist of quality candidates from a resume data base claim your seventy-five-dollar credit when you post your first job at indeed.com/promo

we're just a few minutes away from the start of that gamestop hearing on capitol hill joining us now is co-founder and member of the so-called paypal mafia. reddit is part of the portfolio. now, david, the last time you were on i talked about the idea of this whole gamestop trade speaking to the clash of insiders and outsiders and you warned that elites are weaponizing censorship to keep outsiders out. with all that have in mind what would you like to see today's hearing focus on >> thank you for having me the first thing that the hearing should do is try and establish ticktock or the chronology of what happened here, why on thursday, january 28, did robinhood feel that they had to freeze the buy side of the trade causing the wall street bets and engineering this short squeeze

it basically cracked that side of the trade and gamestop price fell after that. i'd like to understand what went into that decision we had vlad on our podcast, the all-in pod, and he talked to it. his hand was forced by the clearing house he got a call at 3:00 in the morning from the clearing house that it was governed by a formula. he had no choice i think that it's important for us to understand first and f foremost what went into the decision, why was it made then at that time and who influenced that decision. was it an order that came down from the dtcc or did any other industry actors exert pressure over that. that's probably the heart of the matter >> now, david, it's interesting that we saw the ceo of reddit's prepared testimony that he said there were no evidence of bots, no foreign actors, no bad actors involved in wall street bets

indicating there was no manipulation everything that hammed on wall street bets was within the normal parameters of what happened on reddit how important is that to your understanding of what happened and to what we learned today >> well, first of all, why is steve huffman being dragged in front of congress to say that there is no foreign actors because wall street bets was be street bets were part of this disinformation, whatever that means. basically what happened is that opponents of wall street bets tried to weaponize the speech rules of these sites like reddit and discord in order to take down the buy side of the trade we need to know what happened there. who exerted pressure on reddit and discord to take down wall street bets? in my view it is market manipulation to try and accuse your competitors of a bogus, you know, speech claim, disinformation in order to disrupt their lines of communication so that your side of the trade can win

that is manipulation so, of course, there's no disinformation here and steve even has to go up there to explain that and we need who tried to weaponize these free speech rules and who succeeded in the case of discord, and it's really too bad that the discord ceo isn't up there, as well to explain what happened. >> david, great to have you back it's john ford it seems to me there is a thintech opportunity here, too, and i'm interested in the idea of democratization, and i'm not sure that's what robinhood represents and there's a gameification of trading versus a democratization of investing, but do you see opportunities in what would be, perhaps more solidly democratization of investing products, innovations that would help there. >> i think robinhood's going to be on the hot seat today because the thing that we all discovered

about their business model is that their users have turned out to be not the customers, but the product. robinhood makes its money by selling payment to order flow with the big hedge funds like citadel and that's really going to be probed in this hearing i think vlad has a lot of downside for him, we could see congress take action against order flow other countries like the uk have banned it and that could be disruptive to their business model. i do think robinhood's going to be in the hot seat today and they're going to have to explain how all of this sort of day trading and -- by the way, it's not just stocks. it appears that most of the trading on robinhood is of these options. so they'll have to explain how all of this option trading is beneficial, and so i think there's a lot of down side here for robinhood today. >> is there upside for investors like you who are looking for fresh ideas to serve the retail

investor, perhaps? there clearly is an appetite there not just for gambling, but for participating in the upside for markets and perhaps in the way that the existing platforms are not serving. is that something that you're looking into >> very much so. >> look, i think we heard complaints from the wall street hedge funds and they were crying, complaining and whining that the message board traders on reddit had basically done to them what they'd been doing for years which was engineering a short squeeze. they posted their ideas on reddit and created a movement. individually all of these reddit traders were weak, they were poor, they weren't rich and powerful, but together they were able to create through online organizing they were able to create effectively the largest hedge fund on wall street and they were able to disrupt a melvin and citron and almost drive those guys out of business so i don't buy into the arguments that i think you're going to hear the hedge funds make in front of congress today

that effectively they should have the exclusive right to be predatory and the exclusive right to trade these kinds of options. you know, i think that main street needs to have the same access and play by the same rules as these wall street titan, and i think that's going to be a big focus to the hearing. at the same time i do think that robinhood has some vulnerability here because again, their customers are not really the users, but these big hedge funds, and i think a lot of the folks on reddit didn't understand that. >> yeah, david, we're almost out of time because this hearing is about to start, but i want to get your quick thoughts on what you anticipate to be the conversation about section 230 how much reddit and other platforms like facebook should be responsible for the content that is shared on their platforms and ways you can see reforming that without perhaps changing sort of the spirit of those laws >> so right now, keith gill,

roaring kitty, has been sued by a class action lawsuit, i think a class action lawsuit by people who lost money and they're now trying to blame him and they're trying to go after him and say that he was their investment adviser and he was someone posting ideas on the messageboard if that lawsuit is allowed to succeed all financial advice on the internet is allowed to come down because the people would face too much liability, but without section 230 of the liability shield that section 230 that reddit provides, reddit would be in the lawsuit and that's concerning to me is that if reddit were to lose section 230 protection you would see them being sued every time somebody lost money by listening to a post on their site. so i do think section 230 provides a very important function in protecting online speech if you were to get rid of 230 you would see less of online speech and not more of it and the way we'd like to see this problem fix side rather than getting rid of 230 i would like to see a common carrier

requirement based on the tech mopolization and not being able to refuse service to people based on their creed and that is what we need to make and not to get rid of section 230 >> very interesting point, david and one we are sure to return back to. thanks so much for joining us on this very exciting day ahead of the hearing. >> thanks for having me. >> now as we head to break, klein ease tech stocks under pressure today by news of a big laggard there despite yesterday's earnings beat. it listed streaming company ticker iq down 7% after posting a year over year decline in subscribers. more "squawk alley" after the break. stay with us

i knew about the tremors. but when i started seeing things, i didn't know what was happening. so i kept it in. he started believing things that weren't true. i knew something was wrong, but i didn't say a word. during the course of their disease around 50% of people with parkinson's may experience hallucinations or delusions. but now, doctors are prescribing nuplazid. the only fda approved medicine proven to significantly reduce hallucinations and delusions related to parkinson's. don't take nuplazid if you are allergic to its ingredients. nuplazid can increase the risk of death in elderly people with dementia related psychosis. and is not for treating symptoms unrelated to parkinson's disease. nuplazid can cause changes in heart rhythm and should not be taken if you have certain abnormal heart rhythms or take other drugs that are known to cause changes in heart rhythm. tell your doctor about any changes in medicines you're taking. the most common side effects are swelling of the arms and legs and confusion.

we spoke up and it made all the difference. ask your healthcare provider about nuplazid.

as we head toward the afternoon and this hearing on the gamestop trading phenomenon, i am watching palantir which continues its post-earnings slide down almost 7.5% it will be more than 24% for the week, julia. almost erasing all of the year to date gains. >> well, john, what i'm watching is a stock that's not moving very much right now, but it could move after the bell when it reports earnings and that is roku, and i just want to flag that roku shares are up 260%

over the past year and 37.5% carl, just year to date. famous for earnings, kellogg, hormel, smuckers, campbell's kraft-heinz and they're leading the s&p at the moment and you can build two cases, one is inflation could be an assist on pricing and the defensive play that we saw when covid first hit. a busy afternoon let's get to the judge ♪ all right, carl. thanks so much breaking news continues now. welcome to "the halftime report." i'm scott wapner we are, as you know, just moments away now from the gamestop hearing on capitol hill as the leaders of robinhood, citadel, along with melvin capital answer questions before the house financial services committee. they're getting set, as you can see. here's who you will see in today's virtual hearing. we'll show you the wall of the major participants there

there is