>> thank you. all right. well that pretty much does it for us on "squawk on the street." we have the s&p down a bit and nasdaq up a bit. it's been an interesting week, though, underlying all that, but you can see not much in terms of the market moves right now have a great weekend, everybody. "techcheck" starts now. ♪ good friday morning. welcome to "techcheck. i'm carl quintanilla with jon fortt and deirdre bosa coming up, what uber isn't, global ride sharing giant didi filed for an ipo and revealing a lot about the business models for uber and lyft. then an argument that stocks like zoom and doccusign deserve their premium multiples.

and elon musk unveiling the tesla sports car we're going to dive into the tesla narrative and we have a story on musk's tax strategy, jon. >> and tech this morning, broadly higher to end the week, s&p adding to record levels earlier, though it's a little bit flat right now the nasdaq has been in the green. we're seeing some big calls on zoom, amazon, dell and more we'll bring to you we'll get to those but first, a new ipo didi the chinese ride hailing giant is heading to the american market, uber's biggest competitor on the global stage, famously defeating their efforts in china and forcing their u.s. rival to sell the company its business there in exchange for shares in didi and remains a heated rival in -- uber has scaled back its sharing. didi autonomous ev development, even financial services. certainly making it more of a

super app. so a big part of how didi got here has been its home court advantage in china, but guys, that may be one of the biggest risks going forward. we know the chinese regulators are knocking down monopolistic practices. it has targeted didi with a fine guys i also want to raise some questions raised by the f-1 we got yesterday, the company presented revenue in a tricky way that made it seem bigger than it actually is. even that last quarter of profitability was due to investment gains not the economics of the underlying business that may be part of why public markets haven't received ride sharing companies very well. uber and lyft have been massively under performing the s&p since their debuts and maybe that has to do with them presenting adjusted ebitda, adjusted net revenue, when these losses from uber to lyft to didi are very large. >> we were talking about this in the afternoon and trading some

texts ate it and the revenue is difficult to parse and so are these side businesses and ventures that didi is growing. whether it's freight or group buying, they've got in the app if you follow arjun kharpal on the ground in china showing some of these things that didi has built out, carl, but what is also in the f-1, didi is financing these sometimes through debt, through equity, separately these projects. we might lose control of these things in a way, that might be kind of like uber, selling off parts of its businesses that it then has lost control of, still has investments in, whether autonomous driving or the flying taxi you might not be getting 100% of what you think you're getting when you're buying these companies. >> yeah. it's true. i mean these processes have to drive discipline in the end one way or another there is a lot in there on the ownership stakes and vault ways,

but it's happening amid this backdrop of what some argue is escalating tensions between the u.s. and china and this sort of flies in the face of that, the cooperation, the access to our capital markets between two giant super powers >> yeah. that global story is so important to didi and that's why they're listing on a u.s. exchange, not over in china, because as we mentioned at the top it is uber's biggest competitor on a global stage and, jon, perhaps, you know, it comes down to these price wars which may have eased a little bit, according to lyft and uber ceos in the u.s., but still in full force in places like latin america, that hurts that bottom line for both of them. >> yeah. the number two in food delivery in mexico, so lots of international play here when it comes to didi. let's bring in bessemer's byron dieter who talked to us about cloud stocks and also byron has a thesis on how you can value

the high growth software names first your take on this international ride hailing market you've made some investments over time in mobility. i believe there was a start-up you guys were invested in that sold to ola and also autonomous when it comes to freight and remote how do you judge the value in one of these companies versus another as we see didi's f-1 coming out >> you bet well the overall trend is white hot, certainly mobility is one of the most interesting investable segments of tech going back to the ev discussion in the prior seg mpt looking at ride sharing and looking at autonomy and how those converge as well as the electrification of mobility which is a fundamental enabler across that. for these massive markets we're looking at long-term t.a.m. and the revenue potential they hold. when you look at the medium term and as we wrestle with valuations of current businesses

that have fundamental pnls we're looking at growth and free cash flow in bull market cases people over index on revenue growth purely and in bear markets they revert to free cash flow earnings safety and we really think this notion of efficiency, the relationship between those two and efficient growth should be the long term arbiter of value and that's what we're focused on for looking at medium term growth investments and their valuation multiples in this white hot market. >> what does that tell you about a company when they're able to squeeze the most growth out of every individual dollar, about either their momentum, their velocity or the product market fit allowing them i guess the leeway to get into adjacent markets? >> it's a comment on all of the above. that's what's exciting what we fundamentally care about long term, whether a shopping company or a tech business, is free cash flow and their ability to create free cash flow however in the long visionary

bets we're making in tech in the public markets these days what you have to buy into is the idea leverage will come over time and you want to see the profitability come from gross and ultimately net margin and that's really the bet, trying to pull apart particularly with these covid markets who have been net covid beneficiaries and those headwinds and the tailwinds that will continue and the businesses that have faced headwinds which are going to pull back and where will we see some resurgence. from our standpoint if you look at a square, shopify, zoom, these have grown 200% over year, in covid in a profitable way that's an amazing set of metrics at scale these businesses are posting and what we're trying to deconstruct is the relationship between the two variables in the quarters to figure out where value is for the public and for our business, the late stage privates that are about to be public. >> that's interesting. byron on the ride business itself and correct me if i'm

wrong here, it feels like the consumer is going to win, right? i mean layer upon layer of competition. they're already dealing with labor shortages. it's hard to imagine this issing it -- is going to improve pricing. >> i love you say that and that's a thesis in most of tech these days, which is the competition and the flood of capital coming into this market is going to result in more availability of product and lower prices we're absolutely seeing that in ride sharing when you layer in autonomy whether in the cars or the ev totals, we're going to have mass availability at extremely competitive prices that's what we're seeing in the enabling infrastructure in tech as well. arc ws, azure, google cloud, keating, to be the rails of modern technology, they're beating each other up in a wonderful way on pricing which is allowing startups and businesses that are moving to the cloud to leverage that in an extremely efficient way and those are all net positive trends for consumers and businesses that bank with them and build on top of them

>> byron, i could talk about ride sharing and the gig economy all day. i don't think that consumer is going to win here. we have seen prices go up. but i know you have some really interesting comments on software, specifically some of the hottest names from last year that we've seen take a leg down but are starting to rebound like zoom and doccusign of the world. you say they justify their valuations >> we were talking a few weeks ago and the market was down 25% in these segments. it's back up 10% over the last week and change alone. it's been a roller coaster ride are people are trying to solve that question of what is fair value for these markets and when you step back, i love to compare it to some macro things. look at crypto, a fundamental market that is exciting and people are questioning whether it should exist, taking exposure because they want the diversification, that market is at about 2 trillion today. step back and look at cloud computing that market is 2 trillion today the entire future of software, the foundation of our tech

economy, the pure plays are valued at 2 trillion collectively i can't tell you what the next few weeks are going to do, but i can tell you with confidence the next several years will bring appreciation to the anchor stocks of that basket and the industry overall as cloud rips through fundamentally within software and more broadly within tech. >> byron, let me try this, right now there's a cohort of investors that wants to value some companies that don't really have a legacy in software, kind of hike their software companies, companies like gamestop, amc, blackberry is a software company, but we apply your efficiency thesis to what investors would have to expect out of those companies for their investments a the these levels, to make sense, how do you measure the odds >> you know it's a compelling trend when people are trying to adopt it for their traditional businesses there's a lot of cloud watching going on, people are trying to look like cloud, smell like cloud and those words are coming

up in earnings calls we attract that over some of the incumbent offers and the use of the term as they drop it in because that's where the market is head. >> there's big stretches gamestop as they try to cloud is one of the bigger reaches, however some of the traditional software companies like credit adobe first and foremost as the most successful transition business they've done it they took many earnings hits and took this painful trigs nary time and they were able to get their business model and their delivery model transition to subscription and then cloud-based deliveries, multitenant browser based delivery and mobile delivery and those are hard the vast majority of the companies trying to identify with cloud right now are going to get crushed because the pure plays will leapfrog past them and they will own the markets that the legacy vendors once held. >> indeed. amazing how they pulled that off. they have earnings coming up thank you. >> thank you always a pleasure to be back. >> that was fantastic. when we come back what's

next for elon musk a crypto conversation with the ceo of blockchain.com. a big hour of "techcheck" is getting started. it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.

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check on amazon, the stock falling amid reports that house lawmakers are proposing bills that could force tech giants to effectively split into multiple companies or shed private label products and this news comes after a new jpmorgan note says it expects the tech giant to surpass walmart as the largest u.s. retailer by the end of next year julia is going to have a lot more on these draft bills circulating in congress coming up jon? >> we look forward to hearing more about those bills in the coming week. in the meantime tesla is debuting its premium model last night at tesla headquarters in fremont, california, with elon musk touting the car as the fastest production car ever made and they've begun deliveries this is what musk had to say. >> we've got to show that an electric car is the best car

hands down you know so it's got to be clear. it's like man, this is just sustainable energy cars that can be the fastest cars, safest cars, most kick -- cars in every way. that's why we did the plaid. >> with us to discuss the author of ludicrous, the story of tesla motors, ed niedermeyer who hosts the autonocast podcast welcome, great to have you. >> thanks for having me. >> it feels like your generale point is that we've got, you know, the s and x law of large numbers, the roadster who knows, china is a difficult environment, competition coming online and we needed fireworks is this going to cut it? >> yeah. look, i think elon musk played the hits and tesla played the hits last night and they doubled down on the things that have traditionally, you know, built the brand and what they built the brand on the question is, you know, is

anybody -- was anybody not buying a tesla because it didn't accelerate fast enough when you talk to actual users the ludicrous mode is already like physically uncomfortable. i really don't see, other than getting those sort of committed fans to buy another one, like wron what this, you know, this update does. >> yeah. i with wonder if you think, does this mark a pivot in tesla's narrative from, for example, low margin, volume, affordable, to more premier performance >> see, that's the question. you know, tesla kind of has gone back and forth and established themselves at the high end of the market puts also had that vision of getting to, you know, affordable prices and the expensive premium car you're buying today is going to help less well off folks afford an ev in the future. i think we've seen with the model 3 and model y that has definitely not happened to the extent that it was hyped there was talk of, you know, a

million units a year and, you know, by a couple years ago and so the, you know, now it seems with the plaid they have a halo vehicle again that's sort of suggesting they're committing back to the premium model, but i think that it's not really certain and i think as competition comes into the market they have to be a lot more clear about, you know, what kind of a car company are you. >> and you don't sound impressed by yesterday's conference but i don't think that even tesla fans think this was a major game changer for the mission or the financials this was all about tesla showing off its technology, right, and ta it still remains far ahead of the pack even though we'll see more electric vehicles, wasn't it >> yeah. absolutely i think the interior refresh on the model s is important i mean the sales of that vehicle have really been suffering and it needed something to revive it but, you know, i think that tesla has really, you know, obviously built a brand around

being on the cutting edge of technology you know, being on the cutting edge is not always 100% good and frankly, i think there's a lot of things already tesla has a lot of struggles with like their human machine interface, particularly when it comes to the auto makes in their cars you see sudden unintended acceleration being aproblem, mode confusion using autopilot, and i think some of the further steps they're taking, particularly in that human/machine interface piece of it runs a lot of risks of worsening some of those problems i'm referring here to the move away interest like control stocks to like the car apparently to being able to know where you're going there's a lot of potential problems with that and, you know, good -- with a vehicle you have to have your design rooted in, you know, people's actual needs and feels like tesla is building on its brand rather than what people actually need and -- >> but are we maybe overthinking this because narrative is so

important, and elon musk has built this character of tesla on so many interesting and probably important car attributes part of it has been the self-driving things, and there are problems with that narrative. when there are problems with that he can pivot to talk about green and energy efficiency and can get it into the bitcoin conversation which angers the bitcoin people, but gets you thinking about the efficiencies of evs and now it's a fast car he can sort of lean on any one of those things at any time and it's not like porsche can do that or ford quite as well >> yeah. absolutely i mean look at narratives, musk's ability to create and propagate narratives is clearly like one of the most fundamental thing to the company's success i think what we're seeing here, though, musk has always been in this dialog with committed fans, he speaks to literally in terms of when he goes to the media and stuff it's oftentimes to like committed fan blogs and been in this conversation and i think

what you're seeing is with plaid, he's really served them he served what they've been used to sort of expecting and wanting. and i feel like that conversation and discourse they're having is sort of diverging from the mainstream and i think you've seen a lot more evs come on the market. i was driving the mustang mach-e a few weeks back and an example of the car that does the things tesla does well, maybe not to the same extent that tesla does, but they do it in a much more well-rounded sort of normal car package and i think that as this market matures, i think that musk is going to need to sort of examine are his hard-core fans like, you know, are they -- is the feedback from them sort of leading him away from the meat of the market? i think there's a very real risk there. >> yeah. although market cap is still a multiple of some of those legacy players. it will be an interesting 2022. good to see you. >> likewise. >> deirdre, carl and i lost you

i think it was yesterday on m.a.s.h. and frazier, but you have seen space balls, you get the plaid thing, right >> um -- >> okay. >> i know of "space balls. can i get away with that >> yeah. no we have to work on that and have one of those, you know, maybe face time group watch parties. grill stocks rebounding and value expense has been a part of the story. dominic chu looking at names that have led growth back into the lead. >> jon, deirdre, carl, i will say nobody has their luggage combination as 1, 2, 3, 4, 5 anymore. anyway, let's talk about that growth versus value trade because the tesla narrative has been a part of the growth outperformance over the last several years, specifically in the last couple years, but it's been valued at come to the forefront especially so far in the last six months and this year the orange line is an etf that tracks those value stocks and the white line the growth one.

you can see they were pretty much neck and neck to start the year but they've really kind of diverged oefrt course of this particular year so far growth made a push in the month of april they narrowed the gap in performance and then again trying to reassert itself here in the last month or so. so where has that growth story been trading where have investors actually been buying up some of those growth names to propel this near-term at least outperformance over value? it has been in technology and communication services type stocks the mega cap for sure. microsoft, alphabet and facebook, these are the most heavily weighted in the s&p 500 and the nasdaq overall in the last month, up about 5, 6, 7% overall. these three names have contributed a lot and gone on investor shopping lists so looks like big cap technology and com services has been part of the list it hasn't been just these names. it's been names in software and hardware as well, specifically

semiconductors we know about that semiconductor trade and the shortages there, but nvidia over the last month is up 24%. adobe on the software side up 11 or 12% salesforce.com if you look at software and chips those may be two places to keep a close eye because they have been in some ways, deirdre, jon, carl, a way to look at playing value tech so to speak the ones that aren't perhaps geared towards cloud computing or other fast-growing parts of the market, the ones that are technology and can be considered ones that have a value tilt towards them back over to you. >> very good point that bifurcation within check. meanwhile is a big tech reckoning on the way the latest on new potential regulations circling the hill. clover a win, amc is on pace to end the week in red. it has been very volatile.

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resetting at the bottom of the hour welcome back to "techcheck." i'm carl quintanilla with jon fortt, deirdre bosa and julia boorstin we're paying a lot of attention but first a news update with christina. >> hi, carl. here's what's happening at this hour the fda reportedly telling johnson & johnson to throw out 60 million doses of covid vaccines they're made at the troubled plant in blor and 10 million approved for distribution. multiple reports say full clearance for the plant is still being considered following manufacturing issues there royal caribbean says two guests on one of its ships tested positive for covid-19 they were found on "the celebrity millennium" the first ship to sail out of north america since the pandemic both are asymptomatic and in

isolation. philip morris shares nearly hitting a new 52-week high the company announcing share buyback programs worth up to $7 billion. philip morris' stock is up 18% this year. a key measure of u.s. freight volume is showing the u.s. recovery is continuing to accelerate shipments hit its second-highest level in may helped by a rise in vehicle shipments and a likely increase in inventories restocking back to you. >> i'll take it. thank you. interesting. a battle against big tech platforms on capitol hill. julia boorstin has a breakdown of bills behind that >> we're right now digging through the five draft antitrust bills that democrats are circulating and they take aim specifically at the tech giant's self-dealing and the power of their scale. now while the drafts could certainly change dramatically and it's unclear what kind of republican support they have, if any of these do pass, they could have long-lasting implications

on apple, amazon, alphabet as well as facebook the platform anti-monopoly act would make it illegal for the giants they define as half a million monthly users and market cap make illinoit illegal over competitors. that would change the way google could handle search results and amazon its private label products and apple services in the app store. most threatening to the giants perhaps least likely to pass is the ending platform monopoly act that would give the justice department authority to break up the tech giants if they have a conflict of interest such as owning a platform that they also compete on the platform competition and opportunity act would make it harder for the tech giants to acquire competitors. they would have to prove that acquisition target does not compete with them at all yet another act would force companies like facebook to enable users to move their data to a rival service in a bill

most likely to pass would raise fees on mergers to better fund the ftc and doj and bolster their antitrust enforcement. antitrust concerns will be in the spotlight next week. on tuesday when executives from google and amazon testify on capitol hill along with the general counsel of sono that accused google and amazon of using their market power to drive users to their own devices and making it harder for sonos. >> julia i'm watching unintended consequences because we know who they're after with some of the things, plus the platform anti-monopoly act, what's to stop that from snaring walmart who has a lot of users, a big company, 600 billion in market cap, they could easily get there, could they not stock their private label, you know, products in a preferred position on the website and in the store

because of this act? are they going to like that in arkansas >> well, look, i think that these are definitely targeting the tech giants. of course this comes after the big report we got in the fall after more than a year-long antitrust investigation into the companies. i think that these are going to be targeting the tech giants and i think we're unlikely to see some of the more dramatic of these pass, but i think the question is whether you're unfairly favoring your own services all of these platforms will have to look at whether or not they're promoting their own products over another without saying hey, we're going to show you ours, this is ours and we'll show you another one next to it. i think there'sgoing to be a lot of nuance here and i don't know if this is going to have that much impact on the likes of a walmart, at least not yet. >> you know, walmart rises 50% an all of a sudden it could. omnichannel is a thing i think they might be surprised how many different kinds of companies might push back against it we will see.

thank you. great stuff. after the break, the ceo of one of the biggest crypto platforms blockchain.com ins joins "techcheck" to talk bitcoin hacks. cathie wood still bullish on the space to more than a billion dollars. "techcheck" will be right back stay with us wondering what actually goes into your multivitamin? at new chapter, its' innovation, organic ingredients, and fermentation. fermentation? yes. formulated to help you body really truly absorb the natural goodness. new chapter. wellness, well done. nobody builds 5g like verizon builds 5g because we're the engineers who built the most reliable network in america. thousands of smarter towers, with the 5g coverage you need. broader spectrum for faster 5g speeds.

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it's hot ipo summer this year. the jurnlhighlighting the slate which shuz raise upwards in june, july, and august big names and robinhood on their way to go public soon, that's not including all of the spacs which could be announced the summer is usually a slower time for ipos, but these are two massive names that we could see come to market perhaps some of that slack/spac slowdown we have seen over the recent weeks andmonths has something to do with it. >> yeah. i know we're nerds on cnbc i don't know about move over hot girl summer, we can have both.

i think also during the summer as we open up will the demand for some of the things people have been stuck at home focused on remain or attention shift and thus might enthusiasm shift? >> indeed. but that's been the narrative, jon, for a few months now, right. we were all going to leave our homes and you would see eroding participation in sports betting and stock manias it's hard to argue that's happened at least at this early stage, but deirdre, we were talking with cramer and faber on "squawk on the street" about the spac i don't know if you call ate second act it's still early if you look over the long term we were raising $1 billion in spac capital in 2013, this year $100 billion plus, the long-term momentum is something to watch as well. >> yep >> all right is 3 the new 5 big tech coalescing around a new work-from-home policy. next, plus zoom named the top pick by rbc. despite employees returning to the office for that story two to

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wondering what actually goes into your multivitamin? at new chapter, its' innovation, organic ingredients, and fermentation. fermentation? yes. formulated to help you body really truly absorb the natural goodness. new chapter. wellness, well done. amazon is relaxing its return to work policies and allow corporate employees to work remotely up to two days per week the move follows facebook's decisions to ease its own plans. employees who don't have permission to work will be

expected to come in 50% of the time mark zuckerberg told employees he plans to spend as much as half of next year working remotely saying it has, quote, given me more space for long-term thinking and spend more time with my family which has made me more productive at work more time for his hobbies. we looked at the spear throwing the other day. there seems to be a kind of disconnect between west coast tech oriented companies, salesforce, amazon, facebook and east coast, financials, the message is we want you back. >> famously right. jamie die mon is sick of zoom an wants people back. you have to be flexible and if you aren't, you're going to lose out on talent. remember after jamie diamond said that, stripe said come over to us and we'll provide you flexibility. it will be interesting to see how this plays out it's a grand experiment.

do employers really want to give employees this flexibility we're still early in the game here in terms of the thinking of the future in terms of hybrid work. >> you don't want mark zuckerberg throwing that spear at work, so i guess sort of making his point in the open office spaces. but i don't think this is going to work. what tech is pushing right now i think there's a dream of it sort of working, but more what apple is leaning toward, yes, three days in the office, but we're going to tell you what three days monday, tuesday, thursday, right. you can schedule meetings, know when people will be around everybody wants to choose flexibly what days they want to be in, but they also want everybody else to be in those same days i think. i don't think it's going to work i think younger workers, talented workers, lose out sometimes when they don't have those connections, that networking, carl, that that older workers who have been in the workforce more and have relationships might find it more easy to work remote. >> yep

i still think back, jon, to your interview with andy jassy probably early february where we talked about this dynamic and his answer was essentially it's not just that you're in the office, you go to the meeting, it's the tiny conversations that happen after the meeting, in the hallway, where you do a breakout, go to the whiteboard v a coffee where true innovation happens, what jassy believes. >> companies want it both ways spontaneity a few days ago a week and giving their employees flexibility. i'm not sure how this is going to play out. decide for themselves that gets messy too. >> check out chewy ryan cohen's old company. shares moving after the company beat on the top and bottom lines moving down, though, down 5% labor shortages and supply chain issues "techcheck" is back in two

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it's been a big week for

bitcoin and its role in hacking schemes taking center stage alongside new adoption in el salvador, bullish moves by cathie wood's arc invest here to discuss peter smith. thanks for joining us. it's been a big week in terms of headlines which is kind of the norm, however the price of bitcoin hasn't been very volatile it's been flat on the week what does this say about the crypto currency? >> i think it points to how mature the market is getting, as well as just like a greater degree of institutional involvement in space it's been a huge week for news this week in the crypto space. >> peter, what are you seeing that perhaps has changed over the past few months in trading behavior we were seeing bitcoin trade reacting a lot to elon musk this week i think we saw it reacting to el salvador it went up and then it kind of

settled back down again. there's a lot of talk about holding on for dear life and a segment of people doing that but there is a huge group of people and institutions not doing that, right? >> yeah, sure. there's lots of people trading the volatility but also a lot of demand as a long-term investment and we see that increasingly from institutions, whenever you've seen the market retrace significantly, you see the sort of huge level of buy support for the market i think there's an awareness that market has gone up very quickly over the last 12 months and so you'll see some like profit taking towards the top of the momentum swings but you also see a huge amount of institutional buy side when you get towards the 30s in the market i think another sort of example of the institutional demand in bitcoin was the massively over subscribed bond deal that micro strategy did earlier this week. >> that was huge then that deal got up to which was also interesting jpmorgan did a piece earlier in the week, peter, where they said

bitcoin futures are a bearish signal and a reflection of how weak bitcoindemand is from institutions who tend to use cme futures to gain exposure to bitcoin. i'm not sure how much you're watching it, but if you are, is that concerning? >> i don't think that's super concerning most of the long-term money in the space is doing it via spot in large custodians. the sort of trading volume in the future is the volatile trader we're talking about it's hedge funds that are trading volatility, even the retail on the offshore venues. the futures markets to me is like that's where sort of the absolute volatility trader plays and the spot market is where you see the sort of long-term accumulation that's what we're seeing in the market right now that's why it didn't retrace below 30 you're seeing persistent strong demand in the spot market, you know, in an accumulation and long-term hold cycle and those levels >> peter, thanks for breaking it

down for us. peter smith, blockchain.com's ceo. meanwhile does elon musk, the second richest person in the world, have a lower tax rate than you probably there's not much about it. our robert frank got the story on how billionaires, and this one in particular, structures his taxes. robert >> well, dee, elon musk paid no federal income tax in 2018 he paid less than $70,000 in federal income taxes two years before that. how did he do it mainly in borrowing. he doesn't take a salary from tesla. he hit about half the targets in his $50 billion compensation package. that pays out over a decade, but that package is stock options, not cash or income when he doesn't want to sell shares if he doesn't have to, so to fund his expenses he takes loans against his stock. in fact, a lot of stock. sec filings showed he pledged 92

million shares, those are now worth about $56 billion, to pay for personal loans he gets cash from the loans, doesn't pay any income tax, and then deducts some of the interest on those loans from his taxes. end result, millions in proceeds without paying any income tax. there are years when he will have a huge tax bill from exercising options grants. musk tweeting, i will continue to pay income taxes in california proportionate to my time in the state, which is and will be significant. he's also sold all of his california homes except for one in the bay area. he lives in what he says is a $50,000 home in texas that he rents from spacex. guys, it is hard for me to imagine elon musk living in a home worth $50,000 maybe he sleeps in his cyber truck. nonetheless, his taxes are very low. back to you. >> well, yeah, i guess where he lives and where he spends his

time might be different places in a way, in a way but you point out that billionaire income is lumpy. i wonder if this less ownership lifestyle might be a way for some people to get around some aspects of a potential wealth t tax? i mean it is harder to value what you can't see in some cases, right >> well, in his case his asset really is the stock. so for most of us, our asset is our house. so it wouldn't make sense to sell your house because then you lose the ability to borrow against it in his case, he has pledged, again, 92 million shares this is a huge amount, to fund the taxes and the amount of money he needs to spend to exercise those options at some point he will cash out and pay a capital gain tax so he is paying taxes along the way. these three years may have been kind of outliers, but, yeah, as long as you have an asset you can borrow against, that is basically income tax free income and you get to deduct the interest payment so it is great for billionaires who own a lot of stock

>> yeah. yeah robert frank more complicated even that it looks. thank you. former their nose ceo elizabeth holmes is expected back in court next week, and with her trial set to take place in august, her swag is popping up all over the internet taking a look at some of the unexpected merch >> for a cool $22, you can get a theranos mug on etsy more adventurous grab a tee shirt that says elizabeth holmes is my #girlboss if you are the ultimate fan, what is billed as an authentic lab coat like the one she used to wear is for sale on posh mark for $17. so the verdict from buyers can't wait to wear it to my next therapy appointment. shipping was speedy. just like a good genetic test.

>> it is like suicide squad in real life. for the entire piece pull out your phone, scan this qr code, which will take you to our website, cnbc.com/techcheck, where there's much more content to ex plor dee. now we have seen everything. elizabeth holmes' merchandise and she has a fan club meanwhile, morgan stanley names dell a top pick. sales down about .9 of a percent. plus you streamed it, now you can buy it we have the details on netflix's next idea. tech czech is back after one tech czech is back after one more quick break and the sound of a company watching out for you. this is the sound of low cash mode from pnc bank, giving you multiple options and at least 24 hours to help you avoid an overdraft fee. because we believe how you handle overdrafts should be in your control, not just your bank's.

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today in "one more thing," julia is back with a netflix story, something people have been talking about for a long time jb >> that's right, carl. netflix is getting into the merch game it is teaming up with shopify to launch their own online store. the effort is the company's first direct-to-consumer after teaming up with amazon and walmart to sell licensed products based on their property first is merchandise based on

ann an anime series. netflix is planning to release products based on lu path later this month as well as "stranger things" an "money heist. this seems so smart to me. take advantage of the big, devoted fan base they're taking a page from disney here. they established the franchises, might as well figure out ways to make money from them >> yes, and shopify, shopify, shopify. we had a firm on yesterday talking about getting together with shopify netflix launching this store dee, it feels to me like they are sort of building on ecosystem around their brands. like maybe, julia, you could weigh in on this almost like pre-theme park, being able to build experiences to monetize and build interest around their brands. >> yes look, i think every time you have someone wearing a tee shirt with a logo on it or the name of a show on it, it will do more to

promote the product. i think it becomes a virtuous cycle. you get the big fans to buy the products that generates revenue, but also promotes the show. so a win/win all around if it works out. >> it also, guys, brings to mind that collectibles business we were just talking about this yesterday with gamestop and how its revenues from the last quarter in that collectibles segment was up more than 90% so it makes sense that netflix is sort of already getting into that they know that they have some hits, and, you know, direct-to-consumer, carl, that is what gets investors excited these days >> yeah. jb, i mean we only have a few seconds left, but i'm curious as to your thoughts for a long time we thought, oh, can disney ever match netflix's technology and now the question is going to be can netflix replicate what disney does in the whole fly wheel of consumer products, in their case theme parks and content itself >> well, look, we a long ways from talking about a netflix theme park and they certainly don't have the heft with kids.

of course, parents buy a ton of toys and stuff for their kids, but i think it is a small indication netflix is looking for other revenue streams as well >> yeah. interesting to see what other things they will bend on, passwords, now this. maybe more things in the future. big week, of course, next week with the fed meeting everyone have a good weekend let's get to "the half" carl, thanks welcome to "the halftime report." i'm scott wapner, front and center this hour, top lee's big new call the star strategist doing a 180 on two popular parts of the market chances are your money is in play you will hear from tom live in just a minute. we will debate it with, of course, the committee. joining me for the hour, shannon saccocia is the chief investment officer at boston private well degas wright, jim lebenthal and steve weiss. good to see everybody. stocks, going to the wall. nasdaq is on track for the fourth straight up week, first time since january that's where we begin because there's a major call today from