thursday, october 21st and "squawk box" begins right now. good morning, everybody. welcome to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin and brian sullivan joe is off today and andrew is live at the new york stock exchange. it's dark, it's cold, but you have a good reason for being there, andrew, do you want to explain? >> thanks, becky we are at the new york stock exchange wework is going public today, via spac making a delayed debut here it is one of the most dramatic business stories of the last several years a company that was once worth $47 billion, about to go public. that public offering scuttled back in 2019, softbank coming in

to save the day, investing in that company, now has something on the order of 16 to $17 billion in that company. lots of folks thought it was left for dead, especially as the pandemic came around, and people stopped going to the office, but, in fact, perhaps the opposite has happened. the company becoming a major turn around story of sorts going and listing today through this spac. we're going to be talking to the ceo of wework a little bit later. and the executive chair from softbank who has spearheaded this investment. it is a spectacular story, folks. and many a documentary has already been made about it and many documentary may be made about the future of this company. becky? >> andrew, just talking about, it seems like so long ago

because we've all been through so much the last couple of years and there's so much build up around wework the first time around, this one snuck in there. >> it has snuck in there it snuck in there in terms of what the business is, in part because we all thought the pandemic would have wrecked a business like the had. but almost the opposite has happened large companies like microsoft and others have started to take subscriptions for their employees at wework so that in this new hybrid world instead of going to headquarters or a major office you might go to a day or morning to a wework. the company has slashed costs, pulling about $2 billion annually out of the company. and right now while i should say the company is still losing money it appears there's a path for profitability. we'll talk to them this morning about that i should note, for adam newman,

a payday this morning. he still owned about 11% of the company. so perhaps about a billion dollars. and we're hearing he may be throwing a little breakfast party for himself and a bunch of old weworkers when the gavel goes down and the market opens this morning we'll keep an eye on that as well. >> it does tell you this is a story about a return but also about a much lower valuation we talked about going from $47 billion to maybe a billion dollars for 11% of the company. that's still a significant hair cut but maybe they can make a go of this and make it really happen. >> for softbank it's going to be a long road. a very, very long road to get their money back and this was a company that was on the cusp of bankruptcy, i think there's no questions and then questions of conflict

of interests adam newman had bought buildings that were leased back to wework and the like it's a dramatic story and hopefully we get more of the story throughout the morning. >> andrew, how does newman still -- newman -- how does newman still own that big of a chunk in the company if you listen to the excellent podcast wecrash you know the story in and out how did it shake out from an equity perspective that he still owns that size of a chunk of the company? >> it's interesting because we all reported about all the problems of the company and clearly there were issues of governance and so many different things that people were raising about the prospects of the company. it's worth pointing out, though, that there have not been allegations or at least not been cases brought about fraud with the numbers or there wasn't a real business underneath there

so when softbank came and said they wanted to buy the company, to some degree he had clearly some leverage, enough leverage to keep a major stake in the company. and so that is how in truth he has been a beneficiary there were a number of suitors at that time looking to buy the company, obviously a much lower valuation. and maybe to his credit, as a deal maker for himself, he succeeded. also worth noting, he played a little bit of a behind the scenes role in the spac itself if you look at the s.e.c. filings for this spac with bow x he participated in perhaps the earliest phone call about putting this deal together that's allowed this to happen. so he's still playing this behind-the-scene role of sorts and has rights to attend board meetings through next year. >> so they have to allow him because people there don't want him there but he had to negotiate the right to still

attend board meetings? that's the question. >> i think back in in 2019 -- i'm not sure they necessarily would have to have him we'll talk to the ceo about that but i do think they have a -- from what i understand, there's a working relationship, they talk to each other and clearly we're sitting here, something right did happen. >> something went right, yeah. to your point, andrew, you mentioned the $2 billion number, from what i understand they redid a bunch of leases, regained 400 million in cash flow by saying to the landlords do you want us in or occupant? if you want us in, you're going to cut the lease, rent, terms. and it's different having just come from l.a. but if you travel from texas or florida, states like that, a lot of people never stopped going into an office i would love to know what they're seeing nationally about where people do stand in, quote, the return to work

i say that and people yell at me at the airport and say, i never stopped going into an office. >> you look at markets like miami, for example, and they're full talking about weworks now. you look in different markets throughout the country where weworks are full i think we can speak to the leaders of the company in just a little bit about that and i think they can probably give us a good pulse of where that is happening. i would say beyond the united states, there's interesting things happening in europe and asia where wework exists as well. >> we'll talk more about this this morning and look forward to the interviews coming later. let's get a check on the markets after the dow hit a new intraday record passing the peak from mid august. the s&p 500 also finished the day slightly higher. it closed just one point from its closing all-time high previously the nasdaq down just a little bit, it was a small decline. if you check out the u.s. equity futures this morning, red arrows

across the board these are fairly modest declines but the dow is down by 92 points, s&p futures down by about 9. the nasdaq off by 18 the treasury market, the yields picked up once again yesterday this is interesting. the 10-year right now, yielding 1.644% and the question is how quickly it will move checking on bitcoin this morning after the cryptocurrency jumped to a new high hitting nearly $67,000 yesterday. stocks are reaping the benefits. shares of strong hold digital mining jumping 52% yesterday that company mines bitcoin using heat generated from a process that removes toxins from waste coal the stock priced at $19 and closed at $28.90 giving it a market cap of about $1.3 billion coin base and micro strategy are up 30% over the last month we've been talking about the new

bitcoin futures based etf that started trading this week but j.p. morgan pointing out a part of the reason you've seen the increase in bitcoin prices is because you're talking about inflation. it's on everybody's mind we talked about it yesterday, paul tutor jones said it's the biggest issue facing society and if it's hedged against inflation that might be part of the reason for the runup too. >> we tied a bitcoin story to a coal story. >> for the arguments about bitcoin mining being dirty this is the story line that says it's not dirty if you do it to clean coal and remove the waste from that interesting. >> but does that increase demand for coal we've seen coal prices up -- i can't believe we're talking about coal prices. by the railroads and build a hotel on baltic. it's unbelievable we're talking about coal and bitcoin together.

coming from the milken conference in l.a. this idea i said what inning are we in? this guy said we're not at the first batter of the first inning because once the institutions come in, if you're a family office of a billionaire, and you want to buy 50 million in ether, you're not doing it on a retail exchange that exists now the institutional infrastructure for crypto isn't even built yet. >> coal is still the interesting story, though. did you see that this is the first time in something like 14 years that demand for coal in the united states has gone up, they've had to mine more of it that's because power plants are turning to coal because natural gas is so expensive. all of our thoughts we can wean ourselves from this, you have to remember everything is price sensitive. when prices go up, people shift to dirtier forms. >> there has to be heat in the winters, particularly europe and

asia that's a concern if they can't get the natural gas they may need to go back to coal. seeing europe in a desperate race for coal. >> india, china. >> we connect -- usually i connect coal with the christmas stocking now i'm connecting coal with crypto. i think it's just -- it's kind of a fascinating turn of events. >> meantime, let's take a quick check on what's going on with the vaccines for a moment we're going to get an update on the vaccines which came later today -- or i should say just came we're going to talk about that and so much more when we come back from the new york stock exchange, the nasdaq,we're everywhere this morning. squawk returns after this. tv: mount everest, the tallest mountain on the face of the earth.

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fortunately, xfinity makes moving easy. easy? -easy? switch your xfinity services to your new address online in about a minute. that was easy. i know, right? and even save with special offers just for movers. really? yep! so while you handle that, you can keep your internet and all those shows you love, and save money while you're at it with special offers just for movers at xfinity.com/moving. welcome back to "squawk box" this morning time now for an update on the a fda's vaccine decision late yesterday. the regulators authorized booster shots of moderna and j&j covid vaccines as well as mixing and matching shots from different companies. if the cdc signs off today the shots could be available by tomorrow yes, they recommended a moderna booster for elderly people and

at risk adults six months after their doses. and j&j boosters for everybody 18 and older who received a one shot dose two months ago a second dose boasts similar performance to the two dose moderna vaccines, brian. >> meantime, tesla shares because i know everybody is interested, they are lower right now despite posting record third quarter earnings third quarter results beat on the top and bottom line, driven by improved margins on the auto business elon musk did not lead the earnings call this quarter and chose not to address shareholders and analysts on that call. of course, you might have guessed it, we will talk more about tesla later this hour and the next and nec with former president jon mcneil he was not only the former president at tesla but the former chief operating officer from lyft. so he knows how these places

operate. he has a very good idea what investors will be watching and he can kind of give us the back story on where the noise is in this what you should be paying attention to and what the key issues are for the future. so we'll be talking to him about all of that coming up later this morning. in the meantime, cnbc has confirmed reports that says that pay pal is in talks to buy pinterest. pinterest shares were halted twice during yesterday's session before closing up more than 12%. the potential price tag of $70 a share would value pinterest at about $39. check out the move when pinterest went public it was valued at a little more than $10 billion, pinterest down to 61.98. it would be an interesting deal for paypal to think about what they could do for the business they've gotten into different -- they bought honey, if you

remember, and they talked about going into these types of spaces pinterest isn't a typical social network so you won't confront the regulatory pressures that you think -- >> it's the nice social network. >> but then the question is the nice social network harder to make huge money social network but i think the idea would be you're going to create more and more ecommerce on that platform. >> it's weird. i don't know anybody that doesn't have paypal already. that was the one thing like -- go ahead >> i feel like if they did the deal they're going back to the future because they came off of ebay which initially started as basically i want to start andrew my skis, right it became a marketplace. if they do this, are they kind of buying back an ebay competitor in a way. >> isn't that all m&a, essentially? add things, get rid of them. add things, get rid of them.

>> that's a business model. >> and a good one. >> build it up, tear it down and build it up again. >> right. >> meantime, let's talk about shares of ibm this morning they're under pressure earnings at $2.52 net income declining 30 cents as the margins narrowed they faced labor challenges including higher acquisition and retention costs. it would be factored in into the future the company saying that would ease margin pressure over the year. >> they talked about changing their incentive plans. we knew it was coming but changing the plan in 2022, that's going to make it difficult for sales reps to hit their numbers unless they're selling software in a big way. wonder how that transition will take place, too. >> outside of that, we've been talking a lot about energy prices we talked about coal let's talk about oil. the other new kid on the block wti continues to trade around 83

bucks per barrel joining us to talk about this is the global head of commodity strategy, we let you sleep in an hour this morning halima, great to have you on coming out of the conference in l.a. i sat down with the head of former -- he's now the minister of investments, form ermine industry man you know very well he didn't want to talk about oil as much but it was clear everyone we spoke to thought the path of least resistance was up up up for oil. inventories at a three year low in oklahoma, demand on the rise. what's your take on where we are right now? >> brian, i think the key question is what's going to happen november 4th. opec is nowmeeting monthly, they're still sitting around 4 million extra opec barrels on the sidelines. will the saudi oil minister decide to unleash these barrels

to try to cap the upsides. the white house is making a lot of calls to key opec producers calling trying to get more barrels. but there's no indication that opec is going to turn the tap. and other big producers, the indians are asking for more oil, china, japan, asking for more oil. but opec is sitting with the barrels on the sidelines right now. >> we have a lot of oil in the united states and u.s. producers are not responding i'll get to that in a second you know this as well as anybody i think the concern is future demand look at the uk we are seeing covid cases pop one in five new cases in the world is in the uk. they're up 35% there's concern about seasonality here in the winter i think the saudis and others, don't you agree that they're sitting and kind of waiting because what they don't want to do is put a bunch of new barrels back on the market, have consumer demand in the u.s. get

crushed again in the fall and winter and we're suddenly back to $42 oil. >> that's what they're saying. we're being cautious because we continue to be concerned about covid cases, variants. you know, he was also out saying we don't have a shortage of oil right now. we have a shortage of coal, of natural gas. there is enough oil out there to meet demand. so you're right, they don't want to oversupply the market but at the same time they have acknowledged that demand for oil has risen by 5 or 600,000 barrels a day because of gas substitution requirements. that's the big issue, as you know, if winter is going to be a cold winter and there's not enough gas on hand to meet demand, will you have demand for oil rise to force the substitution for power generation so it's coming down toa question about what does winter look like? >> i know that, listen, everybody wants to blame politics for everything. i get that whatever side or team you're on.

but the reality for the u.s. producers because people say why don't u.s. producers put more oil on the market we were at 13 million a day, yeah counts have come up a little bit just recently but it was said a couple weeks ago if producers try to put more oil on the market as opposed to giving money back to shareholders they get punished by wall street so there's almost a bizarre disincentive for the big companies to drill more, is it not >> yes investors are demanding capital discipline there are also esg mandates. but the real question is, who has additional barrels opec has always been the set of producers that sit on spare capacity they play this role as a swing producer so when you have tight markets and you need oil immediately, you have to look to countries like saudi arabia, they're the ones that can meet demand in a

crisis and the question is, does saudi arabia judge the current situation to be an actual crisis >> we'll find out november 4th, of course. the biden administration on the phone with them as well saying, please, opec, i think we can all agree is back in the driver's seat. >> yes, they are. >> pleasure to see you >> thank you. when we come back, a major investment in the company that shook up women's sharewear more than two decades ago the deal that values spanx at $1.2 billion and later mike jackson joins us on the supply and demand on the auto sector, guess which side is winning right w. > "squawk box" will be right back s talk about those changes to your financial plan. bill, mary? hey... it's our former broker carl. carl, say hi to nina, our schwab financial consultant. hm... i know how difficult these calls can be. not with schwab. nina made it easier to set up our financial plan. we can check in on it anytime. it changes when our goals change.

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blackstone is buying a majority stake in spanx this is the first outside investment in the company the deal values spanx at $1.2 billion, founder sarah blakely will remain the chair. the deal team was all female the bankers at j.p. morgan was all female and an all female board will be reported sarah blakely is going to join us with ann chung. that interview is coming up tomorrow at 7:00 a.m sarah blakely obviously a friend of the show, somebody we've talked to over the years so interesting to hear her journey on this and what her next thoughts are andrew >> it's an awesome story, becky. a very, very cool thing to see. when we come back more here on "squawk box." drama in d.c. to tell you about as democrats scramble to figure out what they'll be able to spend if they can't agree to

raise corporate taxes. later, wework set to go public via spac today, the company's ceo and executive chair join us live right here in front of the new york stock exchange to talk about the dramatic fall and rise and fall and rise again of wework right now, though, look at yesterday's s&p 500 winners and losers as we head to break ♪ ♪ there are beautiful ideas that remain in the dark. but with our new multi-cloud experience, you have the flexibility you need to unveil them to the world. ♪

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just reporting its results adjusted earnings came in at 87 cents a share. that was cents better than expected and revenue better than expected to, $39.9 billion versus the $39.1 billion the street had been anticipating. cap x $4.7 billion and the things that the street tends to look at, things like the postpaid phone net ads, 928,000 of those, best quarter in over ten years. postpaid phone churn was low

levels, 0.72%. compared to verizon's churn of 7.4% but these are low evels. the question a lot of people have been asking and we'll dig into, is the subscriber numbers for hbo max. these are global numbers, 64.9 million, up 12.5% the street was looking for 70.4 million because domestic subs were less than had been anticipated up to 45.2 million but the street was looking at about 47.2 million because of an amazon agreement that lapsed during the quarter they discontinued hbo max on amazon this was a long-planned exit they were doing on this. the company does say for the full year they think they'll be at the high end of what they earlier said of 70 to 73 million at the high end of what they've been anticipating. you can see stock up about 1%,

broad band up by 6%. business revenue down to 5.9 billion. warner media revenue up 8.2% >> look at that chart. that chart is -- you look at the s&p 500 effectively -- >> right over the same poff. >> this is a company that can't get out of its own way, one of the most indebted companies in the united states and really the world. great job, look at the chart difference there, the s&p up and away we talked about wework, about building, coming down, rebuilding this is a company that has been i don't know if reinventing is the right word with the time warner deal, hbo max and then they come in and undo everything that the predecessor has done. this is a company i know a lot of shareholders has been frustrated by the last couple of years. >> you bring up the debt

one of the comments, they have a clear line of sight for the end of the year for the $6 billion savings gold it's all about debt. what's the yield on this one right now? it's been a high yielder yielding 8% right now. that's always been the question. how do you -- you have to grow your way out of that with a higher stock price or cut the dividend at some point >> by the way, one of the things that's so fascinating to me about this, you mentioned john stanky undoing what randolph stephens did, but he was a long-time executive that worked alongside randall. that's a drama unto itself. >> you're being very nice, because that's kind of my point. i know you guys have sinterviewe stanky, if you're the number two guy at a company you sign off on

the strategy, then become number one guy and basically unwind everything you agreed to he was a key part of some of these decisions being made i'm not trying to dunk on the guy but you agreed to this at some point. >> the reason i said there's a drama in there, it's interesting, even when you're the number two you're still not the number one so you can be there, and often tie times you have to execute what the number one person wants to do when you become number one, you get to execute the way you get to execute i only say that because i think that, yes, he was there, yes, he clearly was part of the fr transactions, was he the final decider? clearly not. i think if we could get him in a room and take a lie detecter test it would be interesting to see if he really supported those tr transactions or not. just a little bit of speculation

out there. drama in washington. democrats scrambling to cobble together a deal and want to get to eylan mui in washington right now. >> reporter: raising the corporate tax rate seemed like a sure thing for democrats but that is now in jeopardy due to opposition from arizona senator kyrsten sinema the moderate democrat has been skeptical of both the size and scope of the social spending package and now she appears to be holding out on the plan to pay for that as well two sources are telling me her opposition to an increase in the corporate tax rate or the top individual rate is forcing democrats to search for other ways to raise revenue in case she doesn't come around. they said there was a call with the white house yesterday that focused on a couple of key proposals, that includes a new tax on stock buybacks which would be structured as a 2% excise tax a corporate minimum tax based on book income, though the white house and the senate have different methods for

calculating that reforming the international tax code came up as well as ramping up tax phenforcement. those negotiations are still in flux think about the protesters who followed cinema to the bathroom or surrounded senator joe manchin's houseboat in d.c there are big gaps to close if democrats wants to reach agreement on a framework this week and we're starting to hear some of them push back against the idea there's any deadline at all. guys >> okay. ylan mui in washington, great to see you. thank you. we'll keep our eyes on all of it when we come back, tesla out with record quarterly numbers. we'll dig through them with the company's former president jon mcneil that's next. "squawk box" will be right back.

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full prescription-strength? reduces inflammation? thank the gods. don't thank them too soon. kick pain in the aspercreme. tesla reported a slew of records in the third quarter they managed to navigate persistent global supply chain issues and delivered about 73%

more cars than the same period a year ago let's bring in jon mcneil, former president of tesla and sits on many boards including lulu lemon and the former chief operating officer at lyft. great to have you here as a first time guest on squawk you are somebody who when you're listening to what's happening on the call probably has a better idea than anybody else, about what matters, what's important and what the key points are. what did you think about the company's results yesterday? >> thanks for having me. i was impressed on a couple of things, for years tesla has been a survival story they're not anymore. they approach a million cars annually sold and delivered. what's most impressive are the gross margins, they're approaching 30%. that's three times the gross margin level at gm and about six times the gross margin level at

ford and they seem to be less affected by supply chain issues and they are, because they control their own destiny, largely on their chips so their sales, as you said, were up more than 70% year over year, versus gm and ford, which are seeing declines of around 30% year over year so i think there was a lot to be impressed with, and they're setting now on $16 billion of cash so they are -- they're emerging as a formidable competitor. >> jon, it seemed like they hit on just about every metric and surprise to the upside on a lot of them. i was surprised by the stock's performance, down by about 1%. is that just because people have priced all of this in, the stock has run so much and they expengt perfection at this point >> i think a lot of that was priced in, you're right. but one of the surprising things was that they are taking price and increasing prices. they're showing that with their demand, which they're now

building, you know, monthly -- multi-month backlogs that they're able to take price increases. so that helps absorb any prices they're seeing for commodities and other supply chain shocks. so i think that is one aspect that i wasn't expecting, quite frankly, was their ability to extract price in this market. >> when you have customers willing to sign up and wait for months and months potentially to get the product, i don't know how long that lasts. you think they need to do more to ramp up production in order to meet that demand, right >> i think that is a key point, the production capacity they talked about that in the earning's call and i think pretty straightforward and transparent about that they've been a single company in california, shanghai is now on line and they've proven they can open more than one factory and produce at volume. shanghai is producing so much volume they're shipping back to

america. and they have two more plants coming on line in a couple months, one in texas and one in germany. jon, it's brian sullivan we talk about tesla all the time as tesla they're changing the battery technology, going to a lithium iron phosphate but outside of that, let's talk about the f-150 lightning, the audi etron, e pace from jag awuar. is there any competitive threat to tesla right now >> i think the competition opens more eyes to e vshs and right now tesla has a dominant share in the u.s., 65% in the u.s., 21% worldwide. but i think that's in the context of tesla only having 1% market share in the global car market and evs only having 4% market share. so if you consider, you know,

evs going to potentially 50% of cars sold, that's already happening in nations around the world, switzerland last quarter reported than more than 50% of cars sold there were electric or hybrid that percent has the ability to go 15 to 25 times. so we're at the early innings of market growth and even if tesla's share shrinks, the market volume will increase. the administration has kind of picked some new winners and tesla is not among them. they're kind of collaborating with union-based producers for manufacturing. and that's created some tension, especially with elon musk. big question comes back, when can this company make money when you don't consider the emission credits they get what's the answer to that? >> that's a good question.

they proved it this quarter and last shown the emissions credit are worth 1 point of gross margin so they're now making money, and making significant money at the core business, which is the car business a couple of cards they have up their sleeve and rev and selling a car once and only making that gross margin once. they're turning these cars into recurring revenue machines they talked about insurance, auto pilot subscriptions they're rev to make a couple thousand dollars when they sell it once, they'll make a couple thousand dollars every year that car is owned by selling insurance, infotainment and autonomy >> you're the former president of at least, jon obviously you sound like a fan, but you're not an investor now, right? why not? >> i'm not an investor now i am a big fan and i drive teslas, but the stock i think is priced to perfection right now

and i -- but at the same time, i would not bet against the tesla team >> jon, thank you. we really appreciate having you. we'll have you back again soon great to see you. >> thanks, becky. >> andrew? thanks, becky. coming up, i'm live at the new york stock exchange why? because wework set to go public via spac we'll talk more about the dramatic story of the work space company. we'll get you ready for the big interview with the company's ceo and chairman of softbank "squawk box" returns right after this it's another day. and anything could happen.

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. all right. yeah, welcome back after breaking news involving the pfizer biontech booster shot, the company is coming out showing the phase 3 trial shows high efficacy against the booster in general and some of the current variants the trial she'd 95.6 efficacy rate in adults 16 years and older. it's a bit confusing we understand it is currently available for those over 65 or might be immunocompromised this appears to be for the general population there was a trial of 10,000 people above the age of 16 him some were above the age of 65. in that third trial, they were given a third dose with a median gap between the booster and placebo. of those 10,000, five who got

the booster dose contracted covid. fought statistically zero. it was 109 out of 10,000 so five got it even with the boo booster .001 or whatever 109 as well. it looks like we are on the march of the approval potentially for the booster shot for everybody. andrew >> all right ryan, thank you. meantime, wework going public is making its debut on the new york stick via spac. the rise and fall, for more, we are bringing in a cnbc contributor, a professor at yale, ahead of the tributes with the leaders of this country. i want to talk a little about the old version and a little bit of how you measure what has happened here? >> right, andrew, thanks for

having me here such an interesting turn-around story here when we think of where this company has come from. adam newman able to sell this and he was such a poster child for excess it was a black mark for private equity markets for other investor was came in and bought this story that it was somehow a tech firm. so it's really interesting to see how it's being repositioned now and whether or not this, you know, is doing quite well now. but we don't really now how it will be in the future because the office of the future is still unfolding before us. >> how do we measure adam newman, the founder at this point in the ball game clearly, he was on to something, but then there were lots of problems and without softbank coming in, clearly, it will be a

long road back for them making money from the, we might not have otherwise been sitting here >> you know, what's interesting is the essential idea of having leasing space long term and subletting it to others sort term was a solid idea. but there were many companies and large companies who are already in that space. i think what ended up happening, obviously, when we think about adam newman. you think about the self feeling he referenced. you think about trademarkings the word "we" selling it back to the company for $6 million you think about the tequila shots, the smoking pot on the private plane. then a guy walking around saying, i'm going to be president of the world, i'm going to live forever and i'm also going to run for prime minister of israel yet, investors kept pouring money into this guy. so when we look back, i remember you and i talked a lot about this back in 2019. when you look back at on, you're

saying, like, what how did this possibly happen but it is a real object lesson, isn't it, for people who are -- for investor was get caught up, insist they're looking at the fundamentals and get caught up by these charismatic founders. we've seen this again and again. my hope would be that people going forward would recall this lesson and not get swept up again. >> take a measure, if you could, of the company as it is today, very much a different culture, a scaled-back culture in some ways at the same time, we were taking a look at this new hybrid work environment, it mate be that more people end up spending time at a wework. >> yeah. so this is an interesting point where we are at this moment. more people are working remotely, we believe that remote work is pretty much hear to stay there has been recent research but suggest that by 2025 that

almost 36 million people will be working remotely that's a quarter of the united states' work force, which is extraordinary. so and you mentioned also, which is very interesting, this subscription model right where companies can come in and take big chunks of wework's space i have been seeing how they are working. this is super interesting how wework has been working with companies that have excess office space, sublet space is off the charts after covid we were working with these companies to help them work their own covid spaces all of that is a part of this turn-around story. but i do think that looking forward, it could be a different story. right. we're in the midst of the pandemic there is huge uncertainty. the uncertainty has been phenomenal for wework. because companies don't know how to allocate office space right now. but if you go forward, we don't know that people may either go back to the office or maybe

don't want to, maybe they want to work at home, not at a wework. >> joanne, i want to thank you have you offered up some important questions that we will have some answers a little later, we will be injoed by wework ceo and the chairman, the executive chairman of the company. that will happen at 8:00 eastern time "squawk" returns with two big hours ahead.

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could change that. next this hour, auto nation and american airlines. we will hear from the ceos from both companies plus, mix-and-match boosters fda giving approval to the vaccine. now to the pfizer efficacy, details coming up. paypal and pinterest, it's surging. is it a good fit for paypal? that story and much more as the second hour of "squawk box" begins right now ♪ good morning, welcome back to "squawk box" right here on cnbc i'm andrew ross sorkin live from the new york stock exchange this morning. getting ready for the first trade of wework.

i will be joined by wework ceo sandeep mathrani in the next hour to discuss the dramatic back story behind this company brian sullivan is at the nasdaq markets set in time's square, becky quick is holding down the fort at cnbc i got a tweet saying are you in quarantine, why are you reporting from a parking lot near a space heater. >> there is a good reason four being there. it may be cold >> but it is cold. we can use a space heater. so, anyway >> i was excited to see you guys in person. i was at a conference in l.a i figured i'd come back hear on a packed plane everybody was sneezing i figured that out i'm like, wait a minute, i just came from the conference, i'm on a flight, now i'm here >> flying.

that was the nasdaq. >> let's show everybody u.s. equity futures at this hour. ahead of the open, now two-and-a-half hours before we are set to open. we're looking to open in the red the dow up 104 points. the nasdaq down about 25 points. it looks like the s&p 500 will open off 11 points becky. >> we promised you earnings. guess what, we got them. american airlines is out with results. phil le beau is with us. he has the reports >> hey, becky, american reported it did better-than-expected. a loss for the third quarter of money .99 cents a share. in the last half hour we heard from southwest airlines. early this morning, alaska airlines in better, they expect added a justed loss of 23 cents a share. they were expecting 27 cents a

share. the revenue coming in better than expected. not surprise all of the airlines saw a bit of a bump in terms of bookings in september. we're going to be talking with doug parker, ceo of american airlines coming up in a half hour we will talk not only about the thinks, more importantly, what's in the outlook especially as we head into the holiday travel season and into 2022, there is a northeast alliance and the situation going on with the department of justice. a lot of things to discuss, doug parker that's coming up shortly once again, american reporting better-than-expected results for the third quarter. a smaller than expected loss guys, becky. >> all of them expected numbers, all of them still reporting losses the question is when the turns around >> right >> because this has been a hard road for all of them when does it kind of get back to flip the switch where things are actually profitable again?

this is going to be a very interesting interview, really looking forward to it. in terms of how all of these airlines match up, too, that's been kind of the breakdown, that they don't operate entirely as a block at this point. you can really see some of the operational differences between them >> right right. you get to see who can leverage their strength as well as their weaknesses when you look at the strength, certainly for the legacy carriers, yesterday we talk to scott kirby at united. we were talking about delta. we talked with them last week. the international routes and bringing back international traffic, that is going to be crucial for 2022 for american airlines, you can already see, when you look at what their plan is for routes being added back on the trans-atlantic side, there is a lot of growth potential there. also on the corporate side, so that's far different than what you are talking about when you are talking about whether it's southwest or alaska, jetblue, a

slightly different animal. that's why 2022, in the beginning at least, it will be curious to see which of the carriers can get back to profitability and which ones will still have a lot of work to do >> phil, thank you we will see you in about a half hour with doug parker. >> you bet >> okay. meantime, the results at cnbc all america survey are officially out steve leashman joins us with some of the details. good morning, steve. >> reporter: good morning, andrew, yes, president joe biden's approval ratings fitting sharply into negative territory in the third quarter cnbc all american survey as americans soured on his economic leadership, lost some confidence in the handling of the coronavirus. they grew increasingly concerned about inflation and supply shortages that show up 48% last quarter to 41% now and disapproval rising seven points to 52% so those numbers put them

together they put biden's net approval under water. his economic approval now 14 points negative. still he has a positive rating of the handling of the coronavirus. that's declined as well, still plus 5, though compared with other presidents at the end of their first year, biden slightly above where president trump and well bow leo bahama and he had a huge rating at this time the quarter saw a surge in the virus, a surge in labor and supply shortages, americans clearly notice and an agenda that stalled in congress 43% supported democratic-controlled congress that compares to 41%, looking for republican control 16% are unsure democrats, they need a five-to-ten-point lead in this measure. because of the political map, you need to leave that margin to maintain control biden and democrats are clearly going to have the change the

economic outlook to turn these numbers around and they have a lot of work to do. 46% say they expect the economy to get worse in the next year. that is the worst level in the 13-year history of the poll, very surprising to me. the rise in the cost of living now seen as the biggest concern in the country tied with the coronavirus. 60% of americans say they have noticed supply shortages and andrew >> so what was the biggest surprise to you? you just mentioned that item but -- >> i'm surprised at how negative things are and honestly, andrew, we sit here in this little sort of bubble that we're in of the stockmarket. we see the stockmarket's up. it's high, it's doing okay and americans clearly are hurting by this inflation and by supply shortages. >> right. >> and that has turned their

views sharply negative i expected to see negative numbers. i didn't expect to see some of the worst polling numbers that we've registered in the 13 years that i have been doing this every quarter. >> steve leishman, surprising us with those numbers appreciate it. >> the gas swing is $5 a gallon in california, that is not something the biden administration is going to want to see coming up, a big quarter from auto nation we will speak to the chairman and ceo mick jackson how long this car market can stay red hot. at&t shares getting a much-needed lift this morning. they're up just a percent. they're still up earnings came in okay. etf rose, topped forecasts they are looking for a break before we head to break, let's get a check on the macromarkets, the dow, s&p red hot s&p up six sessions coming into

tus e furearoff .3 of 1% will the streak end? it's only 7:09 opn a thursday morning. "squawk box" will be back right after this i promise - as an independent advisor - to put the financial well-being of you and your family first. i promise to serve, not sell. i promise our relationship will be one of partnership and trust. i am a fiduciary, not just some of the time, but all of the time. charles schwab is proud to support the independent financial advisors who are passionately dedicated to helping people achieve their financial goals. visit findyourindependentadvisor.com

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$1.08 a share. revenue also being forecast and the profit nearly doubling from a year ago that was because of strong investment performance check it out, stock right now up about 1.3% we promised you an earnings parade today we are getting it. auto nation is also just out with its quarterly earnings. the profit there coming to $5.12 a share. that trounces the consensus estimate of $4.20. revenue being street forecast. joining uses is autonation's chief executive officer mike jackson. it's a pretty good time to be a car salesman, isn't it >> becky, good morning, i would say so revenue up 18% to $6.4 billion driven by our strategy of that one production was restricted. we moved aggressively to the acquisition of pre-owned car and revenue in order to give our customers more choices

it was up 50% in the quarter of course, we've taken appropriate pricing action around new vehicles. and we have a very optimistic view of auto retail and so has aggressively repurchased our shares i think it's a very good investment we repurchased 11% of the outstanding shares, just in the third quarter. if i look over the past year, that's a 27% of repurchase of outstanding shares so 115% to create an earnings per share year over year to $5.12. so, mike, let's talk about this, because the hardship has got to be getting enough products to getting it to meet the demand i guess at this point. how do you get around that and still come out with great numbers? >> exactly that will be the challenge and you know, in life, you have to accept what you can't change and then look at the opportunity you

have and that's clearly what auto nation has done in a spectacular way that has led imagine to six consecutive all-time record quarters it shows the adaptability and viability of our business model. the fact that we built a strong brand, a great customer experience a digital platform so again a key component, look, we aggressively acquired pre-owned, the minute they shut down realizing our commerce would be ready to buy nearly new. because the demand for automobiles increased significantly already in april, 2020, the american's theory of independence in deciding where they want to go, when they want to go, they were a key component in how to get through this pandemic and decide who is in the vehicle with them. so we embraced that, and as you look at our performance of six

all-tame records, i think our strategy is performing extremely well >> you were smarter than the car manufacturers at that point. a lot were ready to say, no, we're not taking additional supplies coming in, it's a part of that, although at this point there is no around this, it looks like a problem that will last out until next year how do you continue to perform when you will not be able to go back to the same playbook. it will be a little tougher this time around. >> absolutely, we will have the same playbook, becky i have to say all fairness to the manufacturer look, the entire global supply chains were automotive, shut down in the spring of 2020 and restarting it is a colossal epic on your taking then you have significant disruptions of chip manufacturing. there was a fire at a key chip plant in japan that significantly impacted automotive, so, really, the

manufacturers have tried to move heaven and earth to get production back to just trends but imagine here we are now in the fourth quarter of '21. it's still not back. i think we are really into next year until production is back at trends but in the meantime, demand, pent-up demand is being rolled and building, not decreasing we have a lot of customers who tell us, look, i'll tell you this price now other commerce say, okay, i'll take three owns. but we had many, many customers who say, look, i will get something next year. and so when production does get back to a more normal level, i don't see that going into inventory. we are pre-selling what is being scheduled to produce and they're coming in and going right out. so the idea that we will have significant inventories, well, i

don't know when that happened. but the demand is there. >> brian sullivan, good to chat with you again i think this is your last call as ceo and chairman. we appreciate it >> yes. >> let's talk about cars, 67% sales jump in over two years i mean, used cars, simply insane we talk about evs. tesla, their earnings are out, the footballs are fantastic. i understand electrification is seen as the future the majority of the cars are you selling is internal comburkstio. engines, if you drive them now theoretically you will drive them the next decade there are millions driving cars. do you see the combustion engine may be with us a lot longer than the bearish projections out there, given the fact that everybody buying cars now, they're not going to switch to an ev in three years

>> you know, brian, look, the headline again is the industry has pivoted to electrifyification that's where the forward capital is going there is no turning back and this is a global issue having said that, are you absolutely right a, the vehicles on the road in america, primarily moved by combustion engine, that is the way it will be for decades now the 275, 280 million vehicles on the road in america. what a lot of people miss when they say the average car lasts 12 years no, that's the average age of a car on the roads of america. meaning these cars are lasting, to your point, 20, 22 years. so, yes, electrification will gradually increase as a percent of the sales and we embrace it and we're excited about the electric vehicles coming from the manufacturer and when you go to autonation.com, there is an electrification button there we offer the largest

electrification from everyone. it's not from the flip phone to the smartphone, where the flip phone became obsolete. all of these engines have value to america don't forgive, electric vehicles are more expensive and there is sa whole population that depends on combustion engines to get to their job, to school, and every other thing they need to do in life it's under way, there is no turning back the industry embraces it but as far as the changeover of the fleet on the roads of america, it's going to be a long journey. >> hey, mike, before i mentioned this, but you are leaving the company after running it for most of the last 22 years and i think coming on "squawk box" throughout that entire time, we've loved having you, looking back down memory lane here some of the things we've had you on before, this was many years ago, but we just want to thank

you for coming on with us. always being very opened and telling us everything you think, seeing the auto industry and the changes along the way and again, almost 22 years now that you have been here with us we've loved having you and are you really leaving this time >> so, becky, first, that's very kind of you to say, and, yes, it's 22 straight years i never missed an earnings call, sun is shining, a rainy day. we discussed whatever was going on in the industry and we have an exciting and thrilling new ceo, mike manly. he's a world class global executive and that is one of the most respected, admired executives in the auto industry and we are thrilled as of november 1, he is going to be leading autonation yes, i'll be cheering from the grandstand >>

we will miss you, see you back here very soon thank you, mike. >> excellent, becky, thank you >> good to see you they will give mike jackson a fiat 500 on the way out as a ready paing gift, all right. coming up, interest if pinterest, shares of pinterest on fire, reports that paypal may want to buy them the big question is, why paypal, will it once again move into the retail world basically? the topic. on the other hand, john fort it's next. we'll be right back. ...aflac policyholders have been paid $37 billion directly... [aflac!] that's a lotta money. ♪ did somebody say money? he said aflac. well if they're paying out billions of dollars to help cover unexpected medical expenses, what's the difference? coach prime. what... no smoke machine? [aflac!] looks like aflac is ready for prime time.

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front point partners >> welcome back to "squawk box" this morning pinterest shares soaring more than 12% yesterday on a report that giant paypal is interested if buying it the pairing, will it make sense in john ford is here to weigh in on both hands. j jon. >> this is the worst idea since buying tiktok. pay later, remittances, anti-fraud check are you telling me the big bet paypal can make is 39 billion to buy a second-tier social platform of course now. pinterest and paypal are not as compatible as they suggest pinterest makes its revenue from advertising. paypal makes money managing and moving money pinterest receives and attracts consumer attention paypal makes it easier for people to pay businesses i guess why people think so.

facebook is getting into crypto, which means paypal think they should get into social wrong, when corporate prices are fat. stock prices are high. sometimes companies get mission crease they were supposed to hit a launching platform you can buy allied until for less than pinterest. keep your eye on the ball. >> but, but, but, our interest in paypal tools to try to use to make more money? >> well, andrew, on the other hand, whether you work at this from the business' perspective it makes perfect sense if i am a business, i want to find commerce and them to pay me a combined pinterest and paypal solves those problems. paypal has to get smarter in the social commerce move or risks getting out of transactions. paypal are trying to layer in its own payment options, shortstopfy is similarly

deconstructing commerce and could sign buy now pay later options. buying pinterest gives paypal a trove on the data of consumer so trends, sure, the price looks a lot. pinterest growth is slowing down if paypal can get this done as a stock deal, in a couple years, it will look like a smart move to add social variance >> if pinterest growth is slowing, why pay as much, though >> well, if i'm still arguing on that happened, you could say they're not paying that much look what pinterest stock has done over the past 12 months it has been more expensive but there are also other things that paypal combine. you look at iron source, to get into the at mechanics, gaming stuff on the digital side. that only 11 billion, i this i.

>> i can't let you off the hook. you tell us both hands what do you actually believe this time? >> well, i will say that yesterday on tech checks, i argued the first hand. i might have convinced myself more on the second sometimes i convince myself. >> okay. we will see. we will see what happens next to you. thank you for always telling us both sides of the story. thanks becky. are you dressed for davos? >> you know, becky, you and i have been together for a long time, i put this, i have worn this out you put this on right under, it's cold out here it's 10 degrees. everybody put a coat on now. so trying >> it's that time of year. winter is coming andrew, we'll check back with you in a few minutes still to come, our exclusive interview with doug parker straight ahead but, sandeep mathrani and marcelo claure will join us on

the new york stock exchange. that's why arew ndis freezing. he is outside and ready to go. stay tuned you are watching "squawk box." this is cnbc >> ♪ ♪ ♪ ♪

all right. good tuesday morning 7:32 here in new york city the nasdaq market side show is off today. i am brian sullivan. good seeing all of you i can't see you, but in my mind, i can see you, welcome back. we have big news involving the biontech booster shot. a phase 3 trial shows high efficacy for the booster and the variants meg tirrell is joining us now. meg, it was a little confusing we know the booster already exists i am assuming, tell me i'm right. if i am wrong, i have to go back and correct myself that this will be the booster for everybody, not just the elderly or those immunocompromised? >> well, this is the booster that could be for everybody. currently, the pfizer folks are only authorized in those specific groups. let's actually go over that. because last night, we got the word from the fda that boosters

for everybody or at least the groups for each vaccine have been authorized. so now moderna and j&j folks are on track to get boosters, too. this is how it breaks down, essentially for j&j, everybody two months out can go get another booster. it is basically any beers they want, they can mix or match, get a pfizer or a half dose of moderna, moderna boosters were authorized for folks out in those high risk groups, either people over 65 or at high risk because of their health or exposure rick. again, pfizer folks can get j&j. same goes for pfizer this morning, what we got was efficacy data from their trial of the booster so far what we had seen was anti-body do you that, this is showing that it can prevent covid cases, it was a 10,000-person trial. the median time between the

booster dose and having gotten the second shot was 11 months. that's further out than people getting boosters now it shows 96% efficacy against covid. the way they found that is people who got boosted, there were 5 cases versus 109 in people not boosted they said no safety concerns were identified. this is the first real world evidence we are seeing from a clinical trial showing how well a booster can prevent covid in the united states. so far all the data we have been using has been on anti-bodies. guys, this is interesting data the cdc started publishing it is meeting to give guidance on how people should be using these booster doses. these data may play into it. it's the first time we seen the cdc break out efficacy from real world data by vaccine times. so the main take away here this is cases. if you are not vaccinated, you have a much higher rick of getting covid, obviously you can see there is a slight difference between j&j, pfizer

and moderna. moderna being the green there. moderna in this case being a white, the colors are slightly different. cdc advisers are hoping to look at all of this we hope to get gieps back over to you >> meg, thank you. the ceo of american airlines will give us results and vaccine mandates and much more solid numbers from tesla after the bell the ev company reported record results. margins very strong, too we will get an outlook and find out if you should be holding the stock. a reminder, you can always see us live, on the go, on the cnbc app. we'll be right back. >>

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here, here! friars, send word at once. yes, m'lord. welcome back to "squawk box" this morning american airlines reported a short time ago i want to go straight to phil le beau he joins us with a very special guest. phil. >> hi, andrew, let me bring in doug parker ceo and chairman of american airlines, better than 99 cents a share paint a picture of what you are seeing right now as you look at

people preparing no make their plans for the fourth quarter early next year? >> sure. the quarters, the best way for me to explain the quarters, is business we started out business demand, we look i.t. in terms of renew versus 2019 business revenue that number was 25% in march they have gone over 50% in june. in july it was 64% business travel was coming back. we were profitable and the delta variant. we saw august and september fall it was back below 50% again. the result is a probable july and we had a loss. the smallest loss we had since the pandemic some people look at that they're discouraged, because we were doing well i think it's encouraging it says business travel wants to come back. we saw it in july. 64% versus 25% in march. it was huge growth. >> so with that as your expectation as we see cases

drop, more corporate travel returns, when do you expect to get back to profitability? is it q1, q2 when will you say i think this is when we are there >> that was whenever business travel comes back again. >> it has to be fully back >> in july, business levels, in 2019, prices are being up. the financial forecast, what i know is, one, when business travel comes back, which it l. we saw it if june. we were profitable in june and judgment we weren't in august and september as the delta, the variant had its impact but as all that goes away, as we get past this pandemic and we return to profitability. >> november 8th is when europeans who are fully vaccinated candidate come flying here into the u.s. we heard from other ceos in the airline industry who said people are chomping at the bit to do those trips to overseas europe what are you seeing? >> the same and europeans

chomping at the bit to come to the united states. >> you are seeing that on their side >> they were precluded we saw enormous double digit percentages if all areas there is a demand for international travel i suspect by next summer, we will see full flights to europe again and as close to as many flights we were flying before. there is enormous demand, pent-up demand. >> the other deadline you will be facing in a couple of months, as a federal contractor, having full vaccination with the caveat there may be some religious or medical reception for sov some of your employees, where are you? what percentage are vaccinated >> we went through in september a voluntary program, where the vast majority have already done. we do, indeed, have a mandate november 24th, where everyone has to be vaccinated so we will get that done, by

november 24th, we will have everyone vaccinated or some small subset of really medical exemption. it's a mandate we will obviously be compliant with a pan date. we will do so and have all of our people continue to work and be ready to fly. >> what happens if you get to the 24th and you have i don't know, two, three, 4% of your employees not vaccinated who do not have an exception, how much will that impact you or do you look at this and say the 24th is the dead line, we will work with the federal government >> first of all, i don't think that's possible. we have the vast majority vaccinated we seen it since we put the mandate in place, seeing it increase every day what i fully expect is we will get to the 24th and have not many people left unvaccinated. those that are will be on a medical exemption. those that aren't, we'll continue to work with. no one will leave america because of it. we will have people, our team,

fully vaccinated we will have exemptions. we will be fine. >> this is our first time to talk to you since the doj came out and said, we don't like the northeast alliance we don't think it's competitive. we think that american and jet blue should not be together, should not be working together especially with the three new york airports and boston as well how do you see that playing out over the next year >> they're wrong, flat out wrong. oh, absolutely american as big as our scale, is one area we haven't been able to compete as well is in the northeast, in new york and boston jetblue has a similar problem in new york combined, they're our two large competitors. there is good for consumers. we'll prove it it's happening, both of our airlines expand there. that's good. so again it's unfortunate we're spending our time fighting the u.s. government. we'll be ready >> when you look another the consumer right now, do you look

at travel and say it was travel delayed, in other words, people who had trips, now they will start making them as we see the covid variant drop down? >> yes, absolutely what we saw is what i told you, as the variant spreads, people's travel plans change, primarily business travel the company pushed baaing the return-to-work base. what we saw is before that happened, there was huge demand pickup, with a great trajectory, that's what i expect will happen >> it will be a busy holiday season >> oh. we're looking forward to it. nothing than i like being outs o'hare reporting on holiday traffic. >> we are ready for it >> doug parker, the ceo of american airlines joining us exclusively on a day they reported better than results, a loss for the third quarter, better-than-expected revenue did see improvement in bookings in september back to you. >> phil, thank you, for bringin

us that interview. when we come back, we will talk tesla results and find out if you should own the stock. you might want to get a big check on bitcoin, see that currency after it hit to a new high hitting nearly $67,000 yesterday. we are about 64,000 right about now. "squawk box" is jumping right back after this. ♪ [suitcase closing] [gusts of wind] [gusts of wind] [ding]

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all right. welcome back let's talk tesla the car company heavy metal band record seas, gross margins up about 30%. the company making changes to its battery technology let's talk about it all with gordon johnson, the ceo and founder of gl and manager at loop gene, i caught you up on "fast money" last night. wti, this battery switch, it won't get the headlines, going to lithium, phosphate. lft the acronym on lower-cost models it could increase battery life but decrease them in the cold. do you like the changes on the internal side? >> i do, brian, i have to say i am impressed with your tech savvy, your battery knowledge there. that is exactly right is they're trying to ride that appropriate curve around prices that drive

demand they've seen that really nice delivery is up 73% the auto top five is down 23%. we try to ride that curve of pricing yet profitability and margins inched higher in the quarter. gross margins less ev credits were 27.5% they were looking for 25 how you get there, it's hard to do as you describe as the battery piece is something they are doing. it's small it is unspoken s the a key differentiator which keeps tesla's cars priced at a competitive advantage versus the competition we have been waiting for a long time. it has materialized in some countries, not in others >> i guess, thank you for that gordon, i guess there is two ways to look at that right they're trying to make the battery technology cheaper and they're trying to maybe either increase profitability or keep prices steady or decrease prices

in terms of competition. i would severely doubt the second part of that is going to be tesla's strategy going forward. the numbers were good, but you say they still ply still are not good enough to justify a valuation? >> yeah, we don't think the numbers are good the revenue number missed consensus. the bottom line is $2. they came in below that. i don't know what everybody is you can thating about. we need to take a step back. look, you need to look at what's going on here, tesla in the quarter and there are other segments the reason why it's not so valued is because they're quote/unquote working in auto companies and the other segments and there is the gross margin was zero, they're not a utility company, their service, their growth margin was negative 2%. you have to look at unit growth. unit growth in the quarter was 40,000 units tesla sold 241,000 cars.

in the second quarter, gm sold 2.7 million. bmw 4.2 million. gm sold 1.7 million cars tesla sold 24 hundred,000 cars in the fourth quarter. their growth is not anywhere sufficient to match their valuation. we look at their market share n. china the share went from 23% to 11% n. europe the shares went from 33% to 12%. they have no competition even in the u.s., the market shares went from 82% to 66% first half last year, first half this year. when you see competition come in, they're losing mark share. their unit growth is slowing significantly. we think they can get to 1.5 million next year. we are going significantly beyond that 23 think you have a plethora of competition coming in, in 2022, tesla has no new cars in 2022 they pushed everything out because the battery sell

structure isn't available. when you look at all that, you see the guiding growth >> gordie, the changes on the battery. that's the exact point that i just tried to make they're making that changes on the battery because it's easier to source. it is cheaper. one of the downsides may be that you might lose some range, particularly in the cold weather, but you know by now, gone, as well as anybody, people don't care about this stuff with tesla. it is a cult in some ways, people who have them, they want another one, nobody cares about valuation. they view this as amazon back in 1996 >> the margin default. their guiding mar jips, the cfo says the margins will fall so again to get to their valuation, that i have to scale up to millions of cars sold, to ramp up the factory, they will fall the credit revenue in the third quarter was the lowest since '19. so they will not have that buffer we think there is a margin problem going forward.

we don't think they're amazon, we think they're aol >> gene. >> yeah, let me start with the cfo saying margins will fall the cfo said over the next few quarters he's uncertain what will happen with margins and implying they could fall he didn't say that longer term, i interpret that as four-to-five quarters i think his words were considerable upsize, the current margins. margins are 28 and 28 point 8% and the growth margin credit i think they will be 40% over term so i wanted to address the margins. secondly, i want to address, what is the atopic here is tesla a buy or not in if you look at the current run rate, i agree with jordan it does not justify a 50 million market cap. if you take a long-term tech approach, where is the growth growing? toyota and those companies you mention reasonable doubt not growing at 73%

we can debate what tesla's true growth is. ultimately, thatly grow into this valuation as long as they have cars people want and it goes to ev, that's a massive shift over, i think they can, this can be a much bigger company. >> that's the point. i don't know if you tuned in, we tried to bring it up with mike jackson, the ceo of autonation and their sales about car sales generally. i think the question that's hanging out there, gordon, we don't know we don't know is if somebody is going to buy us an electric car, do they buy a rivian as opposed to a tesla, an audi as opposed to a tesla or does the mark, itself, grow enough that everybody can win? that audi and vw and rivian an will and luvid, they can sell cars. will they lose share in will

every tree grow? >> yes, so i think that's a great question but we've seen what's happened in china and in europe, where you've had real competition, their market share has fallen significantly. so we think paz the competition comes into the u.s., you are going to see something similar we've already seen what happens when you have competition. again to gene's point, the street is monitoring their growth another 60% they're still saying 50% so that's a disappointment the street thought they were going to still a million cars this year, they're not, that's a disappointment to go from a million to 2 million, the level toyota is at that's the problem you have a plethora of competition coming into the u.s., china, the rest of the world in the ev space that tesla hasn't had, so we think their growth will disappoint next year we think people will care when that top line -- >> to be fair, they can't sell the cars because they can't make them fast enough that's not a terrible problem to

have >> that's not true you believe they're sourcing, other auto makers aren't willing to take that risk that will be resolved by the end of september that's something to consider. >> i will say tesla's valuation is more than all ten big car makers combined despite being 2% of sales jordan johnson, gene munster, appreciate it. have a great day >> thank you >> all right >> okay. coming up, we are live at the new york stock exchange. the ceo and executive chair of wework will be joining us in an exclusive interview on wework's public debut here on the new york stock exchange. wework workers everywhere around us right now plus the project just outside of the big apple. stay tuned you are watching "squawk" on

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jab and wework ready to make its market debut after a spectacular collapse the company has come all the way back to finally reach wall street we will speak with the company ceo and executive chairman one of three news-making interviews we will talk with blackstone's billionaire developer, richard le frak. the final hour of "squawk box" begins right now [ music [ music playing good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with andrew ross sorkin and brian sullivan joe is off today andrew is outside of nyse ahead of wework's market review. it sound like things are picking up i hear the commentary, the

crowds. >> it is a party of sorts, wework workers, i don't know probably a couple hundred people lined up to be here for this offering, which, of course, has been the culmination of a drama of sorts over the past couple of years. >> that it has. >> we will talk about this in a bit. >> we will talk about every twist and turn along the way before we get to that, though, let's check out the u.s. equity futures. red arrows after another gains yesterday from both the s&p 500 and the dow. you were talking six days in a row the gains from the s&p 500 it closed one point shy of an all-time high. the dow was up yesterday, too, and had some pretty significant progress you can see this morning, though, it's indicated down by 103 points the nasdaq down by about 57. it closed a little bit weaker yesterday as well. if you watch the treasury market we have been watching the yields they are continuing to pick up steam. the ten year is yielding 1.67%

for a long time it was 1.67% we couldn't get ahead of that level. you are starting to see it pick up traction as people think what that might mean for the federal reserve. also, take a look at bitcoin, because bitcoin touched its highest levels ever. you are looking at it down a quarter of a percent right now 66,940 this can be tied back into the inflation picture, too you had bitcoin etf, the first one that launched this week. the more you talk about inflation, the more people look at this that's probably more the reasons you see inflation concerns and this being an inflation hedge. brian. >> it has been quite the run there. all right. everybody, grab another cup of co. ba because it is a business morning. they're fast and furious at&t first up one of the most disappointing stocks in america no doubt decent news to report, revenue and profit beat estimates for the latest quarter

at&t saw demand growth for its phone and hbo and hbo max. in the meantime, american airlines posting a smaller than expected loss in its latest qua quarter. you saw a few moments ago, ceo docuparker joined us, he highlighted the ebb and flow of the pandemic and travel and how critical that process is to his company's results. >> once business travel comes back, which it will, you will see all this return to profitability. we saw it in june. we were profitable in june as well, profitable in june and july we weren't in august as the variant had its impact but as all that, you know, goes -- as we get past this pandemic, i am highly confident american will return to a profitability >> all right all about business travel there. also, breaking news involving the pfizer biontech vaccine booster shot companies say a phase 3 trial shows higher efficacy for the booster against the virus. the trial showed a 95.6 efficacy

rate and for 16 and older. only five who got the booster shot also got covid. 109 tested positive after taking only the placebo this comes as yesterday they cleared moderna shots and j&j as well as a mix-and-match approach of people that want to get a different original shot than their doses. thank you. >> thaunk you, brian. the company blackstone posted earnings that benefit from strong investment performance. blackstone stock continuing to enjoy a very impressive run double this year we just learned the company will take a majority stake in company spankx these are from what i can tell the best quarterly results in the 36-year history of the

company. >> yes, andrew, great to see you. it's great to be here. we had an extraordinary quarter. we had record results really across the board the best or near the best in appreciation in our fund, which is so important if fundraising, into earnings. it was really remarkable i would say the result of two things first, it has been focused on dramatic areas we benefitted from that. global logistics did quite well. software, technology those areas really supported us. also the recovery in travel helped us as well. then the second things, which we talked about last quarter, is the expansion in our business of who we serve and where we invest so if you look at our core plus real estate business, our infrastructure business, our direct lending, they're growing rapidly, we're also serving more institutional customers, more retail customers, more insurance

customers. those two last categories represent more than a third of our business today we mentioned before that we see our business as really moving from a nero channel to much more open waters. that feels like it's accelerating these gains >> jon, help us with this, given have you your pulse on so many businesses and industries around the world. we keep talking about the issue of inflation and what it means in the supply chain issues when it comes to labor. what are you seeing in your businesses >> well, like a lot of your guests, we're seeing inflation in a lot of different places, increasingly it feels more pervasive and persistent than i think many people hope for you know, some areas are transitory i am guessing in reports and semi conductors. when you look broadly, i think a lot of this will stay longer the reason i say that is first the money supply out there has

grown by more than a third since covid began. a natural response governments did to support the semis but there is a lot more money in circulation. then you add to that we have a number of areas where there are structural shortages so if you look in housings, for instance, we are building 40% fewer homes over the last decade than we did prior to the financial crisis in energy, we have been investing globally less than half hoff what we did seven years ago. now a lot of that is positive for the environment, but it creates near-term shortages. and then in the labor markets, despite more than 10 million job option, we have 3 million fewer people in the work force some of that's, obviously, pandemic-related, retirement-related so you got a lot of these structural shortages a lot of capital chasing things. that's driving up prices if you want to be a little bit concerned about cpi in this last quarterly report at 5.4%,

housing costs were up just 3% in the data it's the largest component of core cpi on the ground as we know, new homes, rental home prices are going up much more than that so we've got real concerns around inflation >> so, jon, though, speak to that we spoke yesterday, and he thinks rates are too low are you in an interesting place. you rely oftentimes on very low interest rates to finance the transactions and acquisitions that you make. at the same time you are seeing the effects of that on the other end. >> so i'd say on this, i think the inflation numbers will leave the fed likely to taper a little bit faster , to raise rates. my guess would be a little bit earlier. and as it relates to our business, the good news is we have been thinking about inflation for quite some time. so if you look at our credit

portfolio, almost everything we do is fleeting rate. and if you look across real estate and our private equity portfolio, we really oriented towards faster-growing businesses you can think about the value of any asset, it's a function of the multiple you pay for it in the earnings rising inflation, rising rates hurts multiples. so the way to offset that is define faster-growing companies in the migration, sustainability, life sciences. a bunch of the areas we focused on we think are better positioned in a higher inflation environment. yes, i think it's a risk for a lot of investors >> that's a politicking answer of answering andrew's questions, you say you are here if you are positioning and getting ready for it do you think it's potentially dangerous as paul tudor jones laid out yesterday he thinks it's the greatest

threat in society right now. is he on target or maybe more concerned than you are smr i would say it's certainly the biggest risk from an investment portfolio standpoint. yes, there are concerns about lower income consumers because so much of what they consume is exposed to inflation and i think policy-makers who washington get this. you know, i feel fortunate i'm in my job not theirs they're trying to balance this against a global pandemic in trying to thread the needle. so, my guess is, as i noted, i think they'll be forced to move a little faster. that will help send this, some of this is transitory. but i do think we will end up with higher levels of inflation. there is some risk 5around that. it is the biggest risk out there. i would agree with that. >> jon, in terms of price action, obviously, in the public markets, we seen a big move you benefitted in terms of exits,

where do you think we are in the equity business? i know you are involved in private versus public, but they are so inner-related >> well, certainly prices, nobody can argue, are cheap. i would say equities represent a better value the way i think about that is the ten-year treasury yields today 1.6 heading to 1.7%. the stockmarket is trading at about 20 times forward earnings. that's 5%. and those earnings are likely to grow, given the economic strength out there i think the glass half full side of the story, we talk a lot about inflation. our businesses are seeing strength like other businesses so in the third quarter, 100 performance of our portfolio companies had revenue growth that's something that's never happened before. so i think equities could see some pressure on the multiples i think the earnings feel like they can be better than

expected that makes us feel better about stocks then bonds on the other hand, particularly long duration bonds, we're cautious about that because there is no place to hide when rates move up. >> and then finally, dare i ask you about taxes and what may come out of washington soon is that entering into your thinking at all in terms of buying, selling, or otherwise? >> not really. our focus is on operating our business, delivering great returns for our customers. that's always our long-term approach things we can't control like what happens in washington, d.c., we just want to react to it, anticipate at this point i think we'll see what comes my guess isthey'll pass something, infrastructure, i guess, will pass a smaller spending bill will pass but it's not really affecting us i'd say the biggest impact, there has probably been more

transactions in the united states i think it motivated some sellers to accelerate their plans. >> okay, jon gray, it's great to see you. congratulations on the transactionsp action with spanx anne chung and sarah blakely will be with us tomorrow on that new major state in spanx brian. coming up, two more big interviews you do not want to miss wework you might have heard it, listing on the nyse, we have the ceos. later on, richard lefrak will join us, where is the comeback in new york? he's also got a brand-new

sculpture he didn't sculpt it. he hired someone to sculpt it. in a moment, it looks more lining a jungle in here. we have palm trees galore. we will tell you why all of this tommage popped up at the nasdaq. dow futures are off a touch. we'll be right back after this gold. your strategic advantage.

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up next, wework finally debuting on the markets. ceo sandeep mathrani and chairman marcelo claure join us in this interview. check it out, the statue in new jersey, see if you can see this. shhh what does it mean? and what can it tell us about real estate in the new york area billionaire developer richard lefrak will join us. stay tuned this is "squawk box" on cnbc. le traffic so, should all our it move to the cloud? the cloud would give us more flexibility,

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. welcome back to "squawk box" this morning we are live at the new york stock exchange i want to get right next to our next big interview of the hour wework is going public today on the new york stock exchange under the ticker symbol we it will be a long interview. it is the resulted of a spac transaction with beauex, acquisition corps. joining us live at the corner of wall and broad streets, we ceo sandeep mathrani and executive chairman mar little lo claure.

congratulations to you this was a company that to be honest a lot of people thought was going to be left for dead before you made your investment in it. then the pandemic. and who would have thought we'd be sitting right right now for you marcelo having done right star, print t-mobile then this i'd ask you, when you maid the investment in this company life is relative we will talk about the soft bank investment did you think we would be here at this point this quickly >> that was always the plan, when you are making an investment, when there is a great vision, a great asset to be disrupted, the goal is to have a public company. we got here on a different road than we anticipated. but we're here and celebrating with all of our employees, which is marvelous >> we will talk about that road in just a second he was the one who recruited you to take this job. >> it was a decoy. he asked me to be a board member on my first meeting. we met in san francisco and then the following week, we actually met for dinner

he said, will you be ceo without hesitation i said, yes >> because why >> look, we work as an amazing brand. if someone gives you a super brand to turn around, are you going to have to say yes it was always in demand it was flexible space in demand. so revenue was never a problem occupancy was never a problem. that i have a cost structure so for me to turn around you know a brand like wework, it would be an honor -- >> the great irony of the story is the pandemic might actually accelerated your story and your growth no >> absolutely. you know, the pandemic allowed two things to happen, one it's all about flexibility. no one wants long-term leasings. everyone wants a turnkey project. that's one end the second thing is the all access card, it never could have hand come when you want as you want the third leg is who would have

thought we could sell software 18 months ago, you told me we were going to sell software, i'd say no the pandemic caused us to sell a deck, a conference room we were able to take and white label what we do for a living. the pandemic changed the business for us, it made it top of mind to every cfo absolutely >> marcelo, we talk about this as a turn-around story, softbank is in for about $16 billion. today that value is worth about $5 do you see a way back to correct even >> we are not in that 16 billion. we are 10 billion if you look at the equity contribution. the important thing is it's fair to say three years ago the company was zero it was on the verge of bankruptcy and needed cash and the fact that we have taken it from zero to 89 billion in two years is great now the future is bright like sandeep said, one day you

realize the power of wework. second quarter we worked less than 1% of commercial real estate office space. we amounted for 37% of the leases so, that tells that you the future is bright that people want a flexibility work space people are using our all access cards. we worked in brazil, full of people, so we work extremely good we have a great plan with sandeep. he suggest one step in this journey. i feel good about it >> mass so sun called this a mistake does he have a different view today >> he's excited. it was a mistake in how we executed investment. now it's our job to make sure it becomes another investment for ourselves, i feel extremely confident we will attain that. >> sandeep, explain to the audience, the path to profitability. it's a company still losing money, but you think by 2022, it will get there

>> well, for sure, you know, you got to appreciate this company as i mentioned earlier had growing revenue and growing occupancy, an upsidedown cost structure. what we did to the pandemic is correct the company, cut about 1.9 become of costs. so what we did is we designed a cost structure that should get back to the revenue we lad in 2/2 of last year $900 million would be profitable. this is not a situation where we haven't been there we haven't been there in occupancy. if you see what's happened q2, q3, you know, going into q4, revenues growing 10/15% a quarter, and occupancy will get to the levels we want 2/2 last year sometime next year so we will be profitable this is before we had the all access brought out we had 32,000 members. it brings in over 132 million

revenue a year before we launched our management product we feel comfortable we will get there necks year >> marcelo, we talked about this as a drama impact ac rise, a fall and rise again story. and one of the protagonists of the story is adam newman who apparently this morning is throwing a bit of his own party, not here, but uptown a little bit. with some perspective now, how do you assess adam and his role in all of this >> so, let's talk about the credit i'm a mission area i team up with the investor and then the next chapter came to bring somebody like sandeep to basically execute an amazing turn around. plus everybody had an important role to play here. adam going forward, she a shareholder. we welcome anybody who jumps up with the idea. at the end, sandeep is running the company. he has been the capital of this ship

i can go how grateful what he has accomplished in a short period of time. >> he owns 10% of the company. one of the questions people have even to this day is what kind of leverage he had at the time he made the transaction with you to be able to keep that at a time when some people thought the company was as you said worth nothing? >> the story has to be told. right. adam, as you know, had super majority shares. he can make the decision to go to j.p. morgan or softbank, at the end, for all the reason, he had all the power. he made a wise decision to trust softbank to invest several billion and for us to continue the journey. so, going forward, this will have independent directors, independent ceo. we will continue with this journey that still has a long story to tell. this is a story with drama, sure this is a story where a lot of

people work the way wework the persistenceof these people is incredible this company is here, it's stronger than ever. no doubt, we will be celebrating many more milestones. >> becky has a question for you back at hq hopefully you hear it over all of your fans here. >> okay. i just want to talk to you a little about the leases, obviously, the pandemic changed, it moved a lot over time and i think it caught everybody a little off guard about how some of your big company clients came in and wanted a wework space to bob and weave through the times of the pandemic. shoupg your average lease at this point i wonder how things change again once we come out the other side and companies have a more concrete plan about what they anticipate and what they expect? >> so you know the enterprise clients, the lease term went up during the pandemic. so it's about 30 months, almost two-an-a-half years. if you think about how a business in 2017 you know when

we had 90% of our leases months-to-month, today only 10% are month-to-month 90% have an average lease of 15 months the enterprise months you were referring to is 30 months. i would say from a ten-year perspective in apartment business of a dell business if you will which is more short term so the lease terms are two-an-a-half years. >> can both of you speak to this sort of new future of work and the idea of hybrid work, not throughout the united states, but what you are seeing in other places around the world, where cultures are different we talked about in certain parts of the united states a lot of people are back to work or never stopped going to work. how that's impacting the business and how you think that will change over time? >> you know i think the future has been going through its flexible in hybrid for the last 20 years this is not new. it's like in the poirk ever pandemic, everything got accelerated. if you think about the pandemic,

in the united states, people went to work 50% of the time 35% they were on vacation, they were working at home, traveling. so it will go from 65% to 50% is not a big difference in reality. and, frankly, people always did that they always went for quiet work at a library or stayed home or went to different places it got accelerated so the pieces are the norm that seems to be heading three days on, two days off, away from work anywhere it's actually great for us. >> i know you believe that longer-term companies demonstrably shring their headquarters that actually becomes a benefit no wework? or do you think they keep their headquarters we're seeing google by the way buying up enormous amount of real estate even here in new york. >> i think it's industry related. okay i think the technology is growing. the think tanks are growing. they're absorbing space at

scale. the need for flexible space, depends on how fast they're growing. they don't want to make a mistake, on the flip, have you tro ditional companies who are downsizing because the industry was downsizing for the last 20 years ago it's not something unique they again don't know what the utilization would be so uncertainty becomes certainty for us i like this game of core relationship here, this comes to my retail more than anything else, ecom was about is% of retail sales in 2,000 and 20% last year. people think flex will be the own channel of consistent buchlt-- distribution and 2030 >> i want to ask you, can we spend some time together when you first took on this roam and you talked about software, this as a tech company, if you will, in the same way that adam talked about it but in a different way in many ways, you guys are now try to be in the sass business.

this goes to potentially thousand market's going to value this company over the long term. how bag business can the software piece of this become? >> good idea let's start with every disrupted business is a tech business. tech enables this business when you book a conference room or room by the hour, by the day, by the month, that's technology to predict how many people will go to the building and so on we didn't come not that flex space is so large. customers are setting up their businesses to be a flexible work space. they don't know how to do it so they come to wework we have been doing this the last five years we had an amazing software stack. now we are selling software to service and are starting to power the landlord the growth in flexible work space, commercial real estate is the largest asset to us. we want to reach 30% of the commercial office real estate will be flexible so we were cast in a normal role, when they started

building, managing somebody as a building or we are powering those buildings utilizing our software the high profitability and how we do business >> i want to congratulate on this milestone we do look forward to following your progress and the stock, itself sandeep and marcelo, thank you, guys >> thank you we appreciate it >> brian, over to you. good stuff there a lot of applauding and clapping as well. somewhere, regius, not philbin, but the co-working company from 30 years ago is wondering where their love s. rick santelli standing by in chicago with economic data. rick, give us the numbers, please, sir. >> yes, they're very good numbers for the most part. initial jobless claims dropped as revised 6,000 originally we had 293 last week, revised to 296,000, subtract 6 we are now at 290,000 a.

post-covid low continuing claims dropped 122,000 to 2 million 481,000 also a post-covid low. if we look at philly business outlook for the month of october, philly fed activity was a bit disappointing, 23.8, a bit lower than expected and sequentially since our last like in '07 even though it isn't a bad number, put it in this context, the high water mark, the 48-year high in april was over 50. this number is less than half of that interest rates are 1.66 on 10s, that's unchanged from a 168 inter-day high that takes us all the way back to the second week of may for a comp. sul li sully, back to you >> coming up, richard lefrak will join us live and tell us about this new unusual piece of public art there it is, in new jersey, what

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you are looking, just a

moment, we will take a live look at the waterfront in jersey city, new jersey, it's right across the river our next guest, richard lefrak, more specifically, are you looking at a new 80-foot sculpture of a woman appearing to shush new york city that's not the idea. richard joins us to talk about this new piece of art in the big apple. how are you doing? it's been a while. >> it's been a while, we miss you guys, although i see you every morning. >> so let's talk a little about the sculpture. this is something capturing a lot of attention, maybe a new sculpture it's there because of what you have been doing at the lefrak organization over the 30 years, it's a place that's completely revitalize, what is it like now? and why bring in the sculpture

>> well, it was originally kind of an abandoned railroad yard and over time the economic function have moved to part elizabeth as a part of the norm. so it was basically abandoned land, some old warehouses, and it was geographically in a great spot and my late father, myself recognized the potential here h. and over the last 30-plus years we have been developing these 400 acres. today we have 6,000 aapartments here, eight office buildings, two hotels and about 2 million feet of retail space we have 2,000 people who live here, 22,000 who work here every day. and with the shoppers, we have as many as 50,000 people or something a day to an area that was abandoned basically when we came here in 1985.

>> we have watched new york over the last couple of years and people talked about the end and decline of new york. now it seems to be coming back if a lot of different ways we just heard from wework about office space and how there is a huge demand for that what do you see on the residential side in new york city and the surrounding area? >> well, the tide came out, it came back with a vengeance the residential market is thriving many of the young people and the people who relocated because of the pandemic had left new york, have all come back now apartment occupancys are approximately what they were in 2019 and rents, if anything, have gone up a little bit so that's a good signal that new york is coming back. because new york's asset is the great human capital and if the human capital is coming back, that means new york is coming back >> what do you see areas that, it sounds like things are coming back and coming back with a

vengeance, but are there pockets of weakness still, areas that are you watching what do you think, richard >> well, it seems, yes, listen, there seems to be some concern about office occupancy because you know it actually diminished down to virtually nothing. it's back up to about 30% of the normal office population and with the vaccine mandates and with the revival of the residential market, i would expect we would be up at 50 or 60% by the 1st of the year i think you know people are getting over the fear and i think we're you know on a big upward swing right now and i think new york is going to come back bigger and better and more vigorous and exciting than ever. >> how long do you think it will be before office gets back to the same levels we saw be every the pandemic or does it happen differently? is this a situation where people are permanently going to be maybe part-time in the office, part-time out? >> well, i think for sure, flex hours is the new normal.

i think three, four days a week in the office is what people are going to expect. but i also think that young people need the mentoring, need the collaboration that the employers are going to need to bring them back. and i think they want to come back and since that's how they learn and that's how they create, socialize and further their economic activities. >> richard, a part of the problem has been the increase we've seen if crime. it's a different city than it used to be a few years ago, simply from that perspective, the amount of crime on the streets, the amount of homelessness how big of a problem is that and what do you think need to be done to address that >> well, it's a big problem, you know, the presumed mayor to be eric adams is -- should be elected in the next several weeks and one of the things he promised was to address quality of life issues in new york obviously, the number one being

public safety. but also the homeless issues, issues of safety on the subway system you know, and city service, which are important to making sure the city is a great place so, i'm very optimistic about his future and i think he will be a great mayor >> we have talked a inflation creeping into everything, including buildings costs, barry stearns talked about how all of those inflationary costs are a good thing for real estate investing, that means it's harder to build new buildings, where do you come down on that what do you think about investing in real estate >> well, real estate is a fabulous inflation hedge if you look around at all the buildings, they're full of commodities, steel, cement, is alluminum, glass, so, in effect, are you buying things that already built, are you buying them at a discount, construction costs have skyrocketed i'm finishing a project if miami, where i built two

identical buildings, one started a year later than the next a and the cost differential was 10%. so you can see that the inflation is here in construction costs and that hadn't we're not reflecting the energy and puts which are now going up dramatically. >> what does that mean with the energy inputs? what does that mean for managing these buildings? >> it's going to take a lot of skill and, you know, if we had continued inflation, at some point interest rates will have to go up we had been kind of floating on a sea of low interest rates right now smr what does that mean as interest rates go up then >> it means that it's going to be trouble for some people who are highly leveraged. >> brian, you had a question, too? >> yeah, i was curious, richard, it's brian sullivan,

congratulations on the skumt sk sculpture. >> it's a perfect day to open this up. >> keep it going s. this transitory that's the big debate. everybody i talked out in california at the conference said it's probably not transitory, at least not on the wave side. maybe the court side is, once you give somebody a raise, they will not reduce their salary >> that's correct. you are not going to tell labor to take less, especially right now when they're in a very strong negotiating position and so i'm not a believer in transitory inflation i think we have some inflation it's not like the '80s, you know, which i lived through, where we had interest rates 15/20% but it's real. we're going to have to adjust to i it >> rich, let's talk about the statue behind you. >> thank you. >> that was one that you found

the sculptor is this something tore the city? >> no exit's not meant as a idiss to new york city at all. the artist is an internationally-known artist he has pieces all over the world, in the united states he has pieces in boston, chicago, seattle, miami, and he's known for these colossal scuhpt -- sculptors. hopefully that landmark on the water front will be an icon. to some people, he's saying shh. he's saying, according to his words, respect nature, respect the river, listen to nature.

right. and lastly, that water is in a critical feature in our lives and like a metaphor, like a drop of water is not that significant, but if you put enough drops together, you have a river and enough rivers you have an ocean. and it's like the same analogy with people. one person is not that significant. but if you create community, you can make big changes and make the world a better place so that's his thought. >> i like that >> i had my own thoughts, which was that we have been building a new port project for over 30 years. i thought it was pretty much the best kept secret in town so the statute kind of exemplified that to me >> i like listening to nature, too. richard, congratulations, thanks for being with us today. it's good to see you >> good to see you hope to see you in person soon, becky. >> sounds good up next, we will get to jim

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welcome back to "squawk box. jim cramer is inside we want to get straight over as to him ahead of the opening bill two big topics, jim. one, wework, our some facebook news that came out wework obviously ahead of this open would you buy? >> look, i think that new york city needs to be prepared for wework there's a lot of cities where it works. yes, yes, i would. i think it's an exciting story now that adam neumann is not

involved, what is it, less tequila? less cannabis? i don't know help me here he know what i'm talking about, andrew. >> i know exactly what you're talking about. >> this is much more of a real company. >> let me ask you about another story that may require you to take a shot of tequila the facebook oversight board saying that the company has not been forthcoming, according to the "wall street journal." what do you think is going to happen here? >> i've been saying the oversight board will function as the supreme court of facebook. what they say is going to be gospel when i looked at the members of the advisory board, you cannot believe it not one of them can be so-called bat. they're amazing people and this is very damning.

this is not necessarily unexpected, but what does zuckerberg do? he may not say that's gospel, but i feel that it is. we have a lot of work to do on this one do you like the stock? >> the stock is very inexpensive, has not lost a lot of -- the only thing i would think is if there's a drop-off is if apple accounts for things differently. what are you wearing >> jim cramer -- >> it's fall outside you've been out here for four hours, so i put a little vest on, you don't like it? you know what? it's fancy, monthclair, okay, i like it.

it's not bad next time try columbia, because columbia stock could go up here. you could move the stock >> we're all trying. >> all right love you >> love you too. brian? andrew, thank you very much. all right. a little more than half an hour to the opening bell on wall street joining is is liz young, head of investment strategy at sofi. no disco vest on you, i see. i was at a conference the last couple days in l.a every single person i talked to was bullish on stocks. they doesn't want to be. every fundamental case, except it came back to this -- there's so much money in the world right now. rates are low right now. hold your nose, buy the market right now, what do you think >> it is easy to be bullish after a lot of time of stocks

going up and showing resiliency. about a week ago i had to sit back and be honest with myself that's my job, to be intellectually honest, especially to our viewers, and think about what are the headwinds, and how strong will they be into the end of the year i'll try to frame it into a positive -- a lot of things -- a rally is possible, but i think a lot of things have to go right in order to hold onto the rally. one, there has to be resolution in washington. we need to find out sooner rather than later what will happen with corporate taxes. two, earnings need to calm in solidly, if not positively surprising, kind of across the board. we're in this precipice of handing the batten back to company fundamentals, but it's like watching a baby try to walk if we hold it up the whole time, we'll delay its progress you have to let it fall down and know it won't get hurt.

>> the news this morning, liz, out of the capital of capital, d.c., not wall street, is that the corporate tax hike may be off the table. >> i heard about that. >> if it's doa, is that an all signs go, then, for equities >> well, i think what the proposal was that maybe corporate taxes would be doa, but there would still be a tax on the wealthy it's not necessarily all taxes maybe it wouldn't directly affect certain sectors as strongly as we that would have affected before. if we still have tax arguments, it doesn't necessarily mean it's over, and it will still affect the market going into the end of the year >> liz young, we appreciate it have a spectacular day thank for coming on. >> thank you. brian, thank you for being with us this morning it's great to see you and have

you here an andrew, i hope you get to warm up i'll see you back in studio tomorrow >> see you tomorrow. the should all over the map today. tomorrow we'll be at the nasdaq. right now it's time for "squawk on the street. good thursday morning. welcome to "squawk on the street." i'm david faber along with jim cramer we are live from the stock exchange carl has the morning off futures, you can see we are looking for what would le a lower open across the board, a road map this morning does star with tesla the company says challenges from chips, ports and rolling blackouts could weigh on production. >> yeah. plus shares of at&t are rallying, the company is posting, or did post strong wireless subscriber additions. an