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. and facebook's oversight board

rebuking high-profile -- >> peer are going to wonder how important and independent it is. it seems they are independent, but -- that outfit is great. >> thank you. >> let's do the rest here. that's really where we should start. >> i've got seven pages. >> i know, eye looking at your list >> i want to start it fofs unilever makes me peel positive. i'm an optimistic person. >> i'm not saturnine

la gubrious >> no. >> what did you get? >> i got a perfect on my lsat. i memorized it. let's start with at&t. it's a name you don't like -- >> no, no, i want i don't hate it anymore, i just don't find the up side. obviously it is -- >> 1.2 wireless adds is a good numbers. >> far bers than verizon's number we know about the promotional nature of things, the cfo telling me it's not really as much about that. it's simply about what they say is executing better on wireless, on taking share potentially. >> we have to talk about this 289,000 net adds in broadband. has it become a free for all in broadband? >> on the call, which i think is underway, we're going to be

talking about the acsell rely rating build-out for fiber, which gets to the broadband. that as weakened as you now, shares of comcast, our parent company, and charter, and the much smaller altice. as it overbuilds it fiber. they say, at least, when they do that, they take share where they build. >> they have to, by nature. >> yeah. this is the nightmare coming true, so we're all going to ask about who needs new deals, whether the ftc will allow deals. this is arguably the most important earnings number, and i will give you this is a better than expected quarter. we've got maurice lclaure acros

the street. >> yes, he came down from the nasdaq amazing. we're here, but he came down we love him, but he's everywhere. >> this is very important. i've been very negative. i'm willing to say this is the bottom and the focus they did here, i would like to know how much was done on subsidy i also maybe feel like, perhaps this is a clarion call >> interesting it may be. listen, this stock, as you point out -- you've been right to be negative on it listen, it's going to be a far smaller company than at&t. we can't say that enough, and the key contention why they are jettisoning warner into discovery, is because they want focus. they're going to continue to talk about the fact they will execute on a higher level. it's a good quarter.

by the way, i did want to turn to that name, discovery. >> yeah. >> take a look how that stock has performed since the deal was announced. it's been nothing short of just horrible i think we have in a chart as well there it is. you know, we're talking about a stock that's declined over 80% since they announced the deal. this is going to close, most likely perhaps even in the first quarter, but certainly the first half of next year, and there are a lot of investors who don't want a part of it. they're worried about the leverage at the company. remember, it will be one of the largest media companies in the world, obviously a direct-to-consumer will be the primary focus, bur it still has linear networks. with five times leverage, and linear networks, there seems to still be resistance. with an increasing management team, it's going to be tough

at&t is jettisoning a lot there to create value, so to speak 76% of the company will be formed or controlled by former at&t shareholders. we'll see. >> a lot of times we have to think about who the shareholder bay is at&t was for different, it was slow growth, verizon is for a little lower dividend, faster growth t-mobile up five yesterday, because they have the fastest growth the individual investors are no into dividend. highly unusual this is exciting to me >> that, by far, is the most positive thing i've heard you say about at&t since the deal was announced. you were very, very angry. you were misled on the dividend. >> i think misled is the right world. is it a star that's born

no, but i would say, wait a second, they're not an also ran. >> the best name, so to speak, has been t-mobile, and we haven't heard from that company yet. >> not at all. good numbers, not as promotional as leisure your. >> but they have a different, i might argue, a stronger culture, having seen it to a certain extent firsthand verizon and at&t are such enormous companies. >> it was exciting i went to the burlington store, near coney island there were in t-mobile people outside trying to get you outside. they all knew john ledger personally they were mission driven burlington had a line around the block. i was just trying to buy a

couple t-shirts, bud people selling t-mobile who said john, and then i called john, and john knows everyone he seems to be remarkable in terms of his salesman ability. >> we're awaiting the numbers. let's move to tesla, if we can, and get to some of the names you did mention unilever on tesla, give me your take here many analysts saying very solid results, not necessarily a huge surprise per se, but they delivered. >> i've been using t.a.n., which is tesla, amazon, netflix, companies that people have written offer that keep coming back you know the problem with tesla? >> tell me. >> they were perfect we were looking for perfect. wedbush raising the target to 1100, but shanghai, this was -- this is what i thought was most

interesting. shanghai is exporting to the u.s., that's how successful. >> they're exporting vehicles to the u.s. they are working on a new one in austin and berlin. >> in the old dalys when it wasa sainted company. i went to the irish plant. >> fab. >> and they threw away most of them at the beginning, because they weren't perfect we're talking about tesla in the same way berlin, maybe the first 200 cars may not be perfect it is a fab. it's a fab not just fabulous, but it's a fab. i'm going to work on that concept from now on. i know a lot of people say, listen, it's still a car i think that shows you we're just searching for more akin, it's a fab -- >> there are a lot of other businesses there as well

don't forget solar, starlink, other things going on. full automation of the automobile will produce protenchally an entirely new business line. >> when you're in germany -- >> yeah -- >> -- that's bmw, benz, audi, well, who is right in their backyard who is planting an american flag there? why don't we give that more credit hey, squid, i'm talking to you. >> i'm listening, and trying to read about the valuation of tesla, to add to the -- >> what did you call me? >> i watched it again last night. it just keeps getting more -- it's brutal. the fact that a quarter of million people have watched it,

i don't know what it says about the world. >> i know, hard to stay focused. david, their conference call, one of the most boring -- maybe the biggest yawner david, this thing -- gm was more exciting as a conference call. i'm thinking this read like, not a steel company, they're pretty exciting, too. how about it read like a corrugated box conference call >> wow that exciting. >> i take those to bed i used to use legal cannabis, now i read the tesla conference call. >> those words alone right there -- >> i found myself using, where are my drops i was using drops to keep my eyes up. it was so bad. i use these. when i am trying to do the conference call, this is the only way to study it and read

it. >> those get me every time. >> adam jonas, milk margins. >> put them on again one more time. >> are you sure? >> the old days when you read a tesla call, you couldn't show it to your kids, it was x-rated it was amazing but now it's so boring you have to put these on to stay away. >> what do i need to know about diamonds a color, cut -- >> i don't know. i gave money to the apes -- >> i'm talking about -- you're a diamond merchant. >> i got these from walgreens. >> let's got to some other earns. let's get to other earnings. >> the reason i put unilever on there -- >> we don't talk about it enough >> when unilever comes out, i like to be up and watching, one

of the reasons why my eye versus an infection today procter didn't raise price yet unilever did proctor will notice have to catch up these two companies are delivering amazing numbers >> but your point is important, because it gets back to the broader issues we are dealing with, which is inflation that's a lot of money, 4%, on everything. >> every input is up. >> there's a lot of ingredients on shampoo. >> i got this. he's a jets fan, which is disappointing, but the amount of things that have gone up to make anything, and so it's a footrace to raise price

unilever was ahead, but procter did a good job. >> you were critical, though, of procter in terms of what it's going to mean. it's had significant reduction in margin. >> one of the biggest reduction in margins that i have seen. >> i think unilever's stock has been straight down, and you're buying at a very good level here, so i put that at the top, because i was very impressed with the way they handled the supply chain. >> what happened to their old ceo. >> i'm reading this unbelievable book this starts out with the collar of kraft heinz versus unilever paul poll man is a agree -- he felt that crawford heinz would slash, so he led the fight against one of the great

aggressive company >> they totally screwed that up. >> the book reads incredibly well. >> does it >> it reads like a great guadal canal things >> i'll let you take over from here. >> they had supply chain issues, but what i think -- this is another company, and what i was focused on last night, companies that did not blame the supply chain. companies that predicted problems and were able to get beyond them. >> tesla also did a good job on that, didn't they? >> fabulous. >> back to hp. sorry. >> tesla has probably been the single biggest star for supply chains a lot of people are taking ford up to 20, but i've got to tell

you something, david, i don't think ford is this quarter story. i think it's a next quarter story. >> how about hp? did you have anything more to say on that? >> gaming is big for them. they are able to procure far more chips than they were, and enrico has quietly turned that story. we did not mention wework. >> i don't want to mention wework. >> it's the smell of victory. >> it's like, we're here, right here they're here how come they weren't here when we're here >> you know the most responsibility spac, wdac. the trump media company. >> not the highest quality

sponsor, not the highest quality underwriter, and mr. orlando appears to be based in wuhan. >> e.f. hutton is the sole -- >> it dame b-- came back -- coming up the ceos of nwucor and more it's another day. and anything could happen. it could be the day you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions

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comcast business powering possibilities. we're going to get to our mad dash early, so we can squeeze in a guest >> weakness of 150 million, weaker orders, perhaps because the company is -- don't smirk at me. >> i know, i'm sorry i got an e-mail and somebody told me the thing i was forgetting on the diamond thing. go ahead. >> thank you red hat did hold up, there were a.i., which we know is the hottest single topic in the university, whether it's the metaverse from mark zuckerberg or what jensen is doing, pretty

much most companies. they're expected to be back to mid single digits. they used the term tiny bit of pausing. he did not deliver. >> you appeared i have gone back and forth. you have been positive -- first of all, i don't take an opinion -- >> i jumped the gun. >> i think there's reasons for people to be concerned they generate free cash flow, all those things. >> free cash flow is good. the thing that really worried me, and sometimes you have to look at the way a call is set up, people should know that, katy ubrie, a backer, says there's also a shortfall in software that was meaningful. katie sounded concerned. >> so it comes back to potential an execution issue

>> yes execution. they better deliver when this company splits. martin schroeder is taking over. >> yes this is going to make people say, you know what now that it's financially engineering, but execution all right. you heard that from jim. by the way, followed by southwest ceo ryga kelly keep it here

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>> announcer: the opening bell is brought to you by -- david, a lot of people aren't aware that facebook has an aggressive, powerful, oversight board, which includes heavy hitters. michael mcconnell, stanford law, i just use him an as example, and the person we have on now. the company this morning is saying the social media -- the advisory board is saying the social media giant hasn't been fully forthcoming with how it treats its high-profile users, which is one of the issues that the critics of facebook have

brought up. >> yes, on both sides. >> we're going to bring in an oversight board member, julie owano, director of internet without borders, which i regard as being an ultimate arbiter, not at all owned by facebook, so to speak julie, right now, when ike looking at this report, it almost reads as if it's going to be something that, let's just say, an angry politician might feel in washington that facebook does here we are the most authoritative group. you speak independently please give us your findings. i don't want to characterize them they're up to you. >> thank you very much the authoritative word you used. indeed, the key takeaway from our report shows that, first of all 500,000 users have appealed to us, of which half were related to hate speech and

bullying, because people wanted the content restored and had been taken down the the third is that half of the case came from the united states and canada, and the decision we made, facebook was prompt to do restory 30 pieces of contact we asked 156 questions of the company, which the company have answered 130, and committed to implementing some of the recommendations. the keep takeaway, is, yes, it's a difficult task we are up for the challenge. we do not hesitate to put in ought evers. it's more clear to its users, and last but not least, that facebook is more accountable. >> i'm hearing this, and you're really calling outfacebook i think you're saying they don't move fast enough, they're not

transparent enough i understand you guys are so independent i don't even know if facebook is ready to comment today. >> well, that's the challenge, but i think it's helpful for the company. we've had some hard questions, and hard discussions, but after all this, facebook has realized it's more helpful to be up-front, in order to restore the trust that's been so much affected in the past few years we have learned through the journal a few week ago that the company had not been up-front with us. -- to speak to us and explain how -- have it explained to us in the full extent the result of that is that now facebook has requested from us to provide advisory on its policy related to cross-check, to make it more trustful, make

it more fair and make sure the company, well, respects its own rules. that's what it's about here. i'm encouraged that we're going in the right direction and making those hard decisions. >> julie, how would you kirktize the back and forth, was it amicable you know, there's a sense that they listen, but won't actually follow you beyond that, i would love to get some thoughts, when you listened to the testimony from ms. haugen and your thoughts. >> as with everyone else, i was disappointed that the company had not been up-front will the cross-check, and i was very worried, there was a case mentioned where there was an active conflict.

so we are eager to hear from ms. haugen she has agreed to speak with us, and we are moving forward to be able to do so, but my first reaction, i was shocked, disappointed, and i did not hesitate -- the discussion was quite frank and we did not shy away from asking hard questions and found the company to do much brer, and things that may not be comfortable for the company. we've heard that's correct but honestly, the question here is how to make a company as big as facebook, that has so much impact around the world, how do we make sure the company is responsible in respecting the human rights of its users, and treats them fairly, because this too allows so many people to express themselves it's important to remain like that. >> what was the reaction on the

advisory board, to the extent there was one, to the whistle-blower, to everything we learned in the "wall street journal," what we learned on "60 minutes" and ultimately when she appeared on congress. >> the nakedo initial reaction is we need to speak to ms. haugen, so we will continue to do that, to interact with external actors and interact with organization and to make sure we are in the right -- on the right path of holding facebook accountable, and also on lifting, you know, the -- on what was until very recently very opaque moderation process so i'm hoping we're in the right direction, and please, read the

report, there's so much to learn. and please help us in our mission. >> julie, just before we let you go, there's something that's important to me. i tried to do more work on your oversight board, but one thing i was clear, it was not facebook i went to. i had to go individually to you. i want people to know your level of independence. i want to also understand, mark zuckerberg did set this up he's told me how important your board is what will happen are we going to see major changes? if you said to do what you said, this requires mark zuckerberg to do some major changes ahead, before his launch, say, of the met 'verse. >> we do not reaction on -- that's not interesting even for the general public and not even even for the company we make principal decision and

recommendations that are strongly embedded into human rights conversations and principles in addition to that, we are also in the world, in the 21st century, so we have to be agile and responsibility in our bylaws, there was nothing about our tracking the impact of what we are doing. we have created an -- group on which i'm currently sitting on, which is working on the met rings to measure accurately how facebook is implementing our recommendations when it says it will implement them, and to push the company, and implement the recommendations, and i think that conversation is one of the most interesting ones, one of the most important learning and take away from this

>> julie, i want to thank you, and i want again people to understand how separate and independent your board is, and this is quite a rebuke i really appreciate you coming on to show us the independence you have, and well, frankly, i hope mark zuckerberg license to you. thank you very much. >> thank you very much for having me. all right. you can see facebook shares are down a bit we've got a lot of earnings this morning. we'll be hearing from gary kelly at southwest we'll get an update. lamb research we didn't get to. >> the reason i want to foucus n lamb at the moment, they're at the beginning of the food chain for waiver fabrication they didn't blow the numbers away asml did not blow the numbers

away what is going on the companies that make the equipment that brings about more chips? not blowing things away. >> why not >> it's a mystery. they can say supply chain. they were both quite confidence, the companies. i think if tim archer were here, he would say we bought back a lot of stock, things are going well, but if you have that many orders, how can you not be blowing away the numbers we're in a business if you don't beat and raise, you go down. i'm not disappointed, but i'm not blown away people want blown away this earnings period. >> all right we want to come back to tesla for a second i mentioned starlink as being a part of tesla. i know that's not the case it's obvious -- obviously part

of spacex. one of your favorites continues to surge, jim, and i'm talk being ford yet again, another 2.5% gain in the stock. it's now up 87% this year. >> i certainly don't want people to get ahead, because the ford strength will come next quarter. that's probably when their supply chain is doing better i don't expect a blowout quarter here everyone is trying to position themselves ahead of the f-150 lightning, which is more of a musk kind of waiting list merged with a marc benioff salesforce.com single sort of pick uptruck farley said he shut every place down when they were losing

money. when i first met him, he said we're going to make cars only where we make money. that sounds like, are you kidding me but that had been ford's ethoethos. this is a person has one goal in mind right now beating musk. >> i know, you've said it many times. >> he's beating musk musk, to him, is darth vader >> he has a long way to go he has got $800 billion to go. obviously that cap will not be made up that quickly farley is a unique man i have never e-mailed him and not gotten a response.

i e-mailed him, and got a response five minutes later. i don't have that close of a relationship with elon musk. netflix as well is up -- >> that's what i said would half. >> after a bit of a fall. >> that was people who just -- >> you've been talking about t.a.n. >> 11 t.p. these are companies that rich people wrote off they used to come on air, trash, and send us e-mails saying we don't know what you're talking about. they have now taken over the world. i look tore more optimistic against the rich people's negativity here is one that's been very controversial, not that i'm not used to controversy, but severe airlines posting a smaller third quarter loss, widespread bo

boosts -- so joining us now is the man who is really implaquable. i'm talking about the chairman and ceo gary kelly gary, you shy away from nothing, and you have come on a day when the stock is down. i know you take a long-term view before we get to vaccination, how is business, and particular, as david is going to ask you, how is the business of the business person? are they back? >> great to be back. thanks for having us you know, starting with the third quarter, i was really encouraged by the, you know, the surge in demand and revenues it's just a shame that we had the covid surge on top of that, because it cost us $300 million. including that, that was a handsome profit. very encouraged because of that.

we didn't end up there because of the covid surge, but with that more or less behind us, the demand for the fourth quarter looks better as a consequence. holidays look good, very much in line with what we saw pre-covid in 2019. on the business side of things, jim, really not much has changed since we talked after the second quarter. i think in july, when we were here, we talked about business travel being down about 63%, and we regressed in september, i think we were off about 73%. these are all relative to 2019 numbers. we're predicting that we'll recover here pretty quickly in the fourth quarter, down 60s somewhere, so it's coming back it's just slow, but in the meantime the demand from the consumer for leisure travel is really, really strong, and we're very well prepared for that. >> well, last time we spoke, we

went over some hub and spoke issues, frankly. you just have a huge number of planes coming from florida i've noticed, gary, that you did cut capacity it's going to be down 8% rather than 5%. is that in response to some of the, let's call it mechanical -- that's the wrong word -- scheduling issues that you had >> no, not at all. >> jim, why liken the situation to kind of the overall nationwide participation rate. we're seeing a bit higher attrition, higher access of leaves, a little higher attendance, and we just don't have enough staffing to absorb those out-of-work situations, if you will we have to get our staffing balanced royal tiff to our flight and customer activity it feels like we've done that pretty well in the

september/october time period. we just want to be cautious going into the holiday season and make sure we have that balanced we're going to continue ton conservative on that front until things prove otherwise our historic staffing models just aren't working flow so we just need to adjust. that's why i said in today's earnings release, i was just too aggressive coming into the third quarter. we want to pull back a little bit. to be within 8% capacity of where we were in 2019 is pretty darn good. we still have airplanes that aren't flying. we have 24 airplanes still on the ground i'm very anxious to get those flying good. the good news is the demand is there. we just need to get the resources on board so we can grow the airline. >> excellent now we have to swift directions a bit. you said at one point you would put your unvaccinated staff on

unpaid leave we understand that you took that back why did you take it back and what is your stand now on the unvaccinated >> well, first of all, we need to defeat this pandemic. second, my goal would be to get as many of our people to look out for their safety and their health, as many vaccinated people as possible i am for people getting vaccinated having said that's correct i agree with our state governor, that that doesn't mean that translates into me mandating that employees get vaccinated. now what we are dealing with, in essence, an executive order that is a contractual issue so we're going to do what we have to do to comply with contract terms, but those are evolving it's not -- i'm not going to fire anybody you've already heard me say that our push is to get as many

people vaccinated, and we're showing great progress with that, by the way we are offering a financial incentive to do that we're not penalizing people by having them pay, as an example if they're not vaccinated. all of this is an attempt to get people vaccinated. if they can't get vaccinated we're asking them to seek an accomm accommodation, and we'll evaluate each one, and as long as they're valid, we will approve those. we have a push to get all of that done by november 24th, and i'm encouraged by the progress >> on that note, this is a question a lot of ceos are dealing with, given on the one side the government et cetera potential requirement and their own implode aye base do you remember vaccines of any

other kinds of your employees? >> no. no, we don't again, i don't think the company should require it of its employees, either. again, i want our employees to be vaccinated for a variety of reasons, but in the independence, i believe that that's their choice. i also want us to remain a government contractor. we've been a government contractor for decades that means we carry military charters that's one of our charitable pillars, supporting the military and military families, for example. we carry the u.s. mail we are a member of the civil reserve air fleet, which participates in helping refugees from afghanistan, as an example. all of those things are important, and they're a big customer of ours we're going to do our darnedest to comply with the contract terms, and at the same time my top priority is taking care of my people.

last thing i'm going to do is fire somebody because they don't want to get vaccinated, so it's a process. the white house is directing this, and we're doing our best to comply. >> gary, real quick, just to come back to business travel we've had this conversation for a year and a half, it feels like it is positive, i guess, do you have or have you formulated any further thoughts about the true return and what tut look like as a percentage of 2019 numbers when it comes to business travels, giving all the changes that have taken place and the way people choose to work? >> going back a year, you remember i was sharing not that i was pessimistic, i'm just trying to be realistic we all know the world has changed dramatically as a planner, all we can do is make assumptions i think they should be

conservative i think what we have seen so far, now, 20 months into this pandemic, it argues to be conservative we're still down where we go from here is anybody's guess. everyone, include me, believes things will improve. we'll have events, conventions, meetings at a minimum. a lot of the business travel i think will be tied to, are people returning to the office or working virtually there's a lot of moving parts here, and a lot of reasons to be cautious i think most people believe it will not recover any time soon to 2019 levels the good thing about southwest, we're low cost, we have a low-fare brand, and we're very well positioned to serve consumers. we're going to do well either way, and we're well prepared either way gary, always appreciate it

thank you. >> you bet thanks for having us of course, gary kelly, ceo, southwest. >> i don't want to give this instant analysis, but, you know, the airlines, scott kirby with phil this morning, candidly i thought their quarter was better, but southwest is always a student of how hard it is to come in and give us a b-plus united was strong. i think we'll have a surge of international travel i say that, because, again there's a great reawakening -- reassessment is what we've been calling it my head writer is calling it the great reassessment that means we're reassessing ourselves. i am a dollar side represented by men that's what i am, but i am not gripped with the idea there's an existential crisis in this

country, not that different from 1967, where we had thought people, and there is euphoria the war was over it's making people think, yolo you know how hard either for me to say something like that >> obviously having lived through the civil war as well, you have some perspective. >> i think that general grant lived in -- >> that would only make you about 170 years old. >> there is a reassessment you're going to go international more than you go to texas. >> got it. coming up we're going from planes to trains we'll talk to the ceo. union pacific. that company, of course, out with earnings. want to talk supply chain? first, though, it is time for the bond record.

some nice picture of that train. look how treasuries are featses this morning ten-year, jim, you know -- >> i'm sweating it, partner. i sold 20-year bonds for 14.5%. there was a return and a half. >> those were the volcker years. >> the days of bond owners. >> we'll be right back. jerry is here! j! mate, how are ya!? it's so good to see you. good to see all of you, yeah! why is jerry so... popular? it's been like this ever since we started using workday. what do you mean?

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about trying to get the other side of the story. facebook, they were blasted as being ambiguous, not responsive to transparency. the board and what we heard today from the board, well facebook released a statement to me, we thank the board for their

ongoing work and issuing their transparency report. that issue we believe the board's work has been impactful, which is why we asked the board for input into our cross-check system and we will strive to be clearer in our explanation to them going forward. that's a response. it's the beginning of a response i've been trying to get mr. zuckerberg the time zone is the issue, you can see the different times. what matters to me, i first started to delve into this board to see their independence. you couldn't get-go to facebook to get information because they're not giving information you google the board, get hold of the staff the staff told me they might have something for me in some period of time they're so independent that i got sprung. >> right. >> i thought i got sprung. i want people to know the news process here i wake up, working on earnings, find the report, i find that we have a spokesperson and believe

me, it was pulling teeth to get to facebook because of the time zone difference. mark zuckerberg has told me again and again, i'm going to take this group seriously. the ball is in his court. >> we await your continued reporting on this. >> if you look at the people who are on this board, david, it's everybody that you like to work with at one point in your life, a nobel prize -- they actually have one if mark zuckerberg doesn't do more than just issue this statement from the company, i would be personally disappointed because this group is somebody -- he put this group together. >> whatles do we wan-- what else want to do here? look at blackstone, one name i didn't get to. john gray was a guest on "squawk box," president of the firm, steve schwarzman still the ceo there's been generational change at these other shops. >> right. >> whether it's apollo or carlisle or kkr, but not at blackstone yet but they're killing it, man. that's $160 billion market value

now. >> i understand they actually got out of individual houses and could end up being -- >> they did a strong job there in terms of getting in and out they are fairly nimble as we know few related earnings. >> brilliant as always today. >> all about having permanent capital to a certain extent and over the last 12 months distributable earnings of 1.6 million, becoming a c corp, be dividend. >> what's important the stock was at 40, my friend was on, tenth anniversary show, saying when it was 40 a buy fell on deaf ears. it's a housesien day for the rails. csx reported terrific numbers and led by coal believe it or not. metal good, fertilizer good. metals, mining and fertilizer. and then union pacific, now i had -- >> we'll be talking to lance fritz in a little bit. >> i had lance on. this is important. you have him on and i don't.

like andrew sorkin -- >> it's not like that because we're on the same show. >> the braves and red sox. >> this is important i had lance fritz on recently, sorry to slouch, on "mad money." >> moving it along. >> at the conclusion i said could you please be more bullish, give me more, give me more he did he delivered and i think it's really important to know that lance fritz, when pushes comes to shove is the delivery man. >> real quickly what do you have on mad tonight >> i have no idea. >> good. >> i'm kidding i have whirlpoole ceo -- >> it was a joke. >> oh. >> i have vlad tenev, mark bitzer, there's no "squid game" coming down. but ynon has turned the company around it's a show and a half as my friend ed sullivan said. >> all right it's okay. >> vlad, do you know how hard it

was to get vlad tenev. >> coming up ahead of newcorp and union pacific. >> important number is distorted by intercompany switch, ask about the cash flow, best ever >> got it. >> i got to get me a cappuccino. >> we'll be right back. people, with quickbooks live someone else will do your books for you. they'll even pair you with an expert bookkeeper like me, who knows your business. knows... your... business! expert bookkeepers who understand your business. intuit quickbooks live bookkeeping. sustainability is essential to creating a better tomorrow. that's why cisco is committed to achieving net zero emissions by 2040. and we believe our smart buildings solutions can help.

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welcome back to "squawk on the street." rick santelli live at cme hq awaiting our september reading on leading economic indicators we've had 16 months in a row without a negative, it is up 0.2, up 0.2% 17 months in a row now where we haven't had a negative number. a good run that started in may of 2020 with 3.1 which happened to be the highest ever going back to 1959 now, for the september read on existing home sales, let's head east to diana olick. diana? >> rick, existing home sales in september rose 7% to a seasonally adjusted annualized rate of 6.29 million, that's a beat, the street was looking at

3 3.7% the realtors are pointing to august brief drop in mortgage rates. these would be signed contracts from july and august, not only lower rates but that rates would begin to rise this fall, which they have and are significantly higher the inventory of homes for sale dropped to 1.27 million, down 13% year over year and a 2.4 month supply continues topush prices higher. the median existing price, 352,800, up 13.3% yearover year, but it's actually the smallest annual gain we've seen all year and part of it is that mix of what's selling, very little selling on the lower end of the market. in fact, homes priced between 100 and $250,000 sales dropped 23% year over year, million dollar plus home sales up 30% year over year again, a nice strong beat on sales in september back to you guys david?

>> diana, thank you. diana olick. good thursday morning to everybody. welcome to another hour of "squawk on the street. i am david faber with morgan brennan and mike santoli live at the new york stock exchange. carl has the morning off a quick look at the markets. a hour hour into trade the nasdaq eeking out a small gain, the broader market down slightly at this moment. >> we are 30 minutes into the trading session as david mentioned so here are three of the big movers we're watching in a daywhere there are a lot of movers we'll start with ibm, shares sliding with revenue below analyst forecasts amid weakness in the cloud business and a pullback in client spending. those shares down 7% right now plus at&t, that is moving higher after beating earnings estimates. revenue topping expectations with the company seeing growth in demand for its phone and internet services and hbo and hbo max. you can see those shares are up about half a percent right now csx reporting an earnings beat driven by an increase in shipping volumes 3% higher than

the year-ago level the surge in revenue, just out pacing the surge in expenses you can see those shares are up 3% speaking of freight railroads and transports, we'll speak with union pacific ceo lance fritz in the next half hour on the heels of that railroad's earnings. mike >> thanks. let's get to tesla the stock actually up, actually sold off slightly after beating third quarter earnings estimates last night after the close now up more than 20% year to date also has more than doubled over the last 12 months the stock has. joining us is needham's rog gill who has an underperform rating on the stock give us the high points of the quarter. a lot of focus on a pretty good profit margins, automotive margin at the high end of expectations we pretty much knew what the volumes were going to be what gives you hesitation in terms of where the stock is valued right here? >> well, as you noted, the

automotive gross margins came in better than expected, grew about thunz basis points to about 28%. that's about two consecutive quarters in which the gross margins have improved on the automotive side. this is excludeing the regulatory credits so they're able to grow the margins, despite the regulatory credit, and also despite the fact that the asps were down about 6% what that means is basically they're doing a fairly decent job on reducing the costs of their battery packs to build materials. that's a positive sign i will say this, this is coming after, you know, four to five quarters in which automotive gross margins have been declining on a consecutive basis. this reflects about two quarters where margins have kind of rebounded and inflected higher how sustainable are the gross margins? the cfo did mention that the gross margins could stagnate as

they ramp the berlin gigafactory as well as the texas gigafactory, continue to ramp the production of those facilities, that will keep the margins stagnated according to the cfo, so my question is, you know, will the stock price continue to reward the company if the gross margins don't improve? it is priced to perfection in my book. >> you know, you mentioned asp is coming down average selling price is coming down obviously volumes continue to track higher, ev adoption going up everyone concedes that naturally tesla market share has to go down as everybody else builds out their ev lines the sustainability of every piece of this business is really the big question i mean, capital expenditures, does it seem like the right number people have talked about maybe it's not, it's like 5.8 billion over the last four quarters, does that seem right i'm looking for places within the income statement that would lead you to question the

sustainability of the profit levels or question them? >> well, one, i think just broadly, the company is being priced like a software company, priced as an a.i. company, so it's wrong for investors or analysts to compare it to an automotive company because if you look at the valuation of tesla as trading at almost 100 times earnings, this is twice the rate of nvidia. the gross margin and operating profile has improved, nowhere near a software or an a.i. company. they're eeking out 28% gross margin nvidia 66% gross margin, trading at half the multiple on a price to earnings basis. so that, you know, i think that needs to be said and some sanity needs to be put in place in terms of the valuation the other thing that is pricing in, is pricing in this very

lofty target of, you know, 15 to 20 million vehicles over the next ten years and to your point about cap x, in order to get 15 million cars, which would be about 15% of the entire auto production market, they would have to build about 24 giga factories over eight years and do that about three giga factories a year. each can produce maybe 500,000 to 750,000, you know, per factory. so these are extremely ambitious targets and means capex will go through the roof both of those aspects, the stock is pricing in as if an a.i. software company and pricing in a huge continuation of growth in their deliveries, without any impact on the accounting of the capex, i think a lot of that is priced in. you know, we have a 10-year discounted cash flow where we project out for ten years and

we're very aggressive in our assumptions and assuming they're going to get to $360 billion in revenue of that back, $700, you know, 20%. >> i mean, i know you take umbrage with the valuation, priced like a software and a.i. company, it is sitting on software and a.i. and what elon musk does with his companies, combination of software and hardware, look no further than spacex that said if you don't think this is where investors should be putting their money to work, where would you suggest they do that >> i think if you want to play kind of the a.i. auto tech play, i think individual ya on the semiconductor side is by far the best play, particularly even on level 4 autonomous driving all ofs the cars outside of tesla pretty much all of the mainstream vehicles, toyota or mercedes, going to be running on

nvidia's platform, enable full autonomy similar to what tesla is reported to have. nvidia is going to drive most of the autonomous driving on the semiconductor side we also like two simple, which is a company that went public that's doing self-driving for trucking, for freight. that's a more realistic market for autonomy is in the trucking side and so those are the two companies i would play to put a.i. in auto tech. >> thanks very much. appreciate you running it through us. >> thank you pleasure. >> take care. cnbc is out with its new all america economic survey. steve liesman is looking at rising recession fearses from the public steve? >> good morning, david higher inflation, supply shortages and the surging covid have led to some of the worst polling numbers on the economy in the history of the cnbc all-america economic survey. 47% of the public believe there will be a recession in the next

12 months that compares to 34% who do not and 16% are unsure. on the one hand results like this have never occurred outside of an actual recession yet the split or the differential more definitive in recession. 20 points or higher, not the current 13 there would be a ways to go for it to be a true recession. among other indicators, 46% saying the economy will get worse in the year ahead, a record in the 13-year history of the survey 79% judge the current state of the economy fair or poor, worse result since 2014. 4 84% thinks the cost of living will rise. negative views on the economy while they spill over into attitudes of the stock market as you might expect just 31% say now is a good time to invest. the lowest since 2016. that compares with attitudes a year ago republicans are much more pessimistic than democrats, slightly more upbeat, but both those with investments above and

below 50,000 have lost confidence in the market. we can debate whether that's a good market call, but it's another sign of surprising and growing concern about the state of the economy among the american public. one piece of good news, 35% expect higher wages in the next year that's the most since 2019 with that, david , have a wonderful day. >> and you too, steve. i will give it my best shot. >> as we head to a quick break here, a look at our road map for the rest of the hour including an exclusive interview with the ceo of nucor, shares down about 3% earnings not well received >> plus we are on ipo watch with beverage maker vie ta going public. >> we have union pacific pacific ceo lance fritz as well and so much more "squawk on the street" from here at the new york stock exchange coming up for the next hour, i guess i should say, next 45 minutes, stay with us so, should all our it move to the cloud? the cloud would give us more flexibility,

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welcome back to "squawk on the street." nucor shares under pressure despite reporting the biggest quarterly earnings ever, $2.1 billion for the company. here to break down the quarter, nucor president and ceo leon topalian great to have you on the show. thanks for joining us this morning. >> thank you for having me, morgan looking forward to it. >> so, i just realize that street is not responding very well today to the numbers, but just to put it into perspective, record results and at $7.28 a

share, this almost matched your full-year earnings record of $7.42 back in 2018 we've known steel price have been on fire this year and that the market has been very strong. how sustainable is that not only going into the fourth quarter but 2022 what do you see when you look out over the coming months >> i couldn't be more proud of our team, morgan first in the safety and health and well being of our team we're on pace to have the safest year in our history, but as you pointed out, 7.28 reflects the strongest quarterly performance in the history of our company and as we indicated earlier, we anticipate the q4 could be as good or better and setting another record in the fourth quarter of this year the end market demand in our customer segments that we serve remains incredibly robust. we see that continuing well into 2022 so again, i think there are a lot of positive indicators and certainly some as we talk about

supply chains that could be headwinds as we think about manufacturing in the united states. >> yeah. so you -- so is it safe to say you see steel in a prolonged cycle? i ask that because a couple weeks ago goldman sachs downgraded steel makers including nucor and said that they see the market maybe anticipating a correction in the coming months as import volumes arrive, new capacity begins operations do you think that's wrong? >> what i think is there's been structural changes in our industry i think the supply/demand will dictate pricing but the supply/demand picture, particularly supply, much different than it was over the last 24 to 36 months, much more leveled and as we are anticipating and seeing today, higher highs, we anticipate higher lows. there may be some corrections. i don't think we're going to see the drop-off i think that's one of the things that, you know, the analysts have got to continue to watch

and nucor has to continue to perform. as the most profitable steel maker in north america, we're very confident that we can continue this. >> yeah. in terms of capacity, you're putting $2.7 billion to work on a new state-of-the-art sheet metal that's going to be looks like be an appalachian region. what will that enable the company to do. >> we are a growth company we're going to remain a growth company. part of that is going to come through organic growth the greenfield announcement of a $2.7 billion sheet mill is going to reflect pieces of that. it's going to differentiate ourselves being in the largest sheet consuming region in the united states and the customer segment that we serve needs an wants this, wants it from a cost position and also from a sustainability position, generating the cleanest steals in the world nucor is on the front edge and leading edge of that we announced a brand of family of products that will offer net zero products to our customers

that need those to deliver net sxwer zero targets for their end use like general motors and many others. >> leon n a lot of categories where there's been tight supply and prices have been going up, there's been some sense out there that customers are kind of incorporating this into their planning and their mindset and double ordering and pulling forward more than they need in terms of supply. is there any risk of there beak a cliff out there as supply rationalizes are you seeing actual true organic demand in your customers? >> that's a great question and something really all year we've been very active one of the things i would tell you that reflects that we don't see that is a relationship we've built with our customer segment over the last 20 or 30 years and we've stayed close to understand their end markets and their end customers are using the steel and so i think while there could be some of that, we think that's

a very small percentage of the overall backlogs that reside in nucor today. >> we have these spending bills that are making their way through congress right now, whether the infrastructure deal that's been long anticipated or whether it's even the clean tech and green infrastructure component of the reconciliation bill hashed out right now. if we see those materialize and make their way through congress what does that mean for nucor and steel demand domestically? >> yeah. i think it's going to be a huge boom for manufacturing and quite frankly the infrastructure bill is something my predecessor and his predecessor have been advocating for and we're going to be tireless in advocating congress bring this to the floor. it's long overdue and the u.s. can ill afford to wait for a bridge to collapse or dam to fail or lives to be lost before we rebuilds the roads and bridges and waterways in this country. we're driving on roads and bridges designed during the ice

hourn administration it is time this bill comes to the floor and again, as we think about rebuilding and building back better, who better to do it with the cleanest steel makers on the planet. it is a huge opportunity for manufacturing and not just steel, but many seg mptsz of our economy that is long overdue >> yeah. i don't think a lot of people realize how integral steel and certain types of coal are to the clean tech feuture we talk abou and the manufacturing of some of those products the conversation we're having the fact that we are seeing such strength right now in the cycle in steel, how much of this is what we've seen, the dynamics around the pandemic, and industrial led recovery in this versus some of the groundwork laid with tariffs a couple years ago? >> look, i think the underlying demand is incredibly robust. it's strong across every market segment that we supply to. i think that demand is real.

there's a lot of confusion that 232 is artificially propping up the steel industry and that's simply not the case. the things that we think and have put in place in trade are much longer term again, 232 at some point will go away we understand that what is in place to prevent the imports from coming back be into the united states are things like winning trade cases with the itc that levy any dumping margins that are fin place for five years the demand picture is strong and again, nucor feels well positioned to serve this market andthe opportunities that it will expand. as we think about semiconductor chips, when that subsides the boom in auto is going to be huge and nucor is new investments and continued investments that our millswill be able to capitaliz on that and serve that end use market. >> all right leon topalian, nucor president and ceo, thanks for joining us today. >> thank you very much

appreciate you having me >> and as we head to a break, check out the biggest laggards on the s&p for the week. ulta beauty down 9% after giving an updated business outlook. ibm reported earnings after the close down almost 9% paypal reported to be in talks about perhaps buying pinterest we'll be rig bk. ayitus. htac tv: mount everest, the tallest mountain on the face of the earth. keep dreaming. [coins clinking in jar] ♪ you can get it if you really want it, by jimmy cliff ♪ ♪

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[ screaming ] tonight my family will kill him. [ gasps ] [ screaming ] welcome back let's get to our etf spotlight a look at the airlines the ticker there, yeah, it's jets top holdings in the group reporting results before the bell this morning. american airlines is posting a profit thanks to more than $990 million in federal payroll support. by the way, that's not -- it's up 25% year to date. southwest, we talked to gary kelly earlier in the hour, it's under pressure it's, of course, seeing its mass flight cancellations and delays a couple weeks ago cost the company $75 million. as i said, gary kelly did join us to discuss the quarter and demand. >> july when we were here, we talked about business travel being down about 63% and we

regressed. it's -- in september i think we were off about 73% these are all relative to 2019 numbers. but, you know, we're predicting that we'll recover here pretty quickly in the fourth quarter to end down in the 60s somewhere. it's coming back it's just slow but in the meantime the demand from the consumer for leisure travel is really, really strong and we're very well prepared for that. >> that stock is still up about as you see it 4% year to date. united airlines, by the way, having a stronger go of it, up 1.4% and 31% year to date. a quick break here dot awhe.n'gonyer ♪ ♪ ♪ ♪

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your update at this hour pfizer and biontech covid booster shots is 95% effective against the disease according to a study out today. 10,000 until trial. in chicago police say an officer accidentally fired his weapon hitting two other officers while police were making an arrest at a gas station. police say one bullet hit both officers the injured have been hospitalized and neither has life-threatening injuries. in china, a deadly gas explosion caught on camera by a passing driver at least three people are dead and 30 injured the blast demolished a three story building and hurled debris into vehicles and businesses. and health officials say a salmonella outbreak tied to raw onions has sickened more than 650 people in 37 states. the outbreak has been traced to whole onions from mexico consumers are advised to throw out red, white or yellow onions

whose origin they don't know i have a bunch in my fridge. back to you guys. >> all right >> christina, thank you very much bitcoin dipping below yesterday's record highs but the crypto asset getting a boost as linked etfs make their debut this week. the second bitcoin futures etf managed by val carry investments is set to trade on the nasdaq tomorrow we're joined by the ceo. good to have you here. can you take anything away from the first few days of trading in this initial partly sunny futures etf from pro shares relevant to how yours is going to launch. i assume yours is structured the same >> yeah. and thank you so much for having me yeah exactly, so it was a fantastic first few days of trading for pro shares we've definitely learned a lot at our time and we plan on taking that forward as we trade tomorrow >> and the fact that it is

future based, that is what has been approved so far in terms of bitcoin linked exchanges what is the virtue of having multiple entries in this area? because, of course, they are essentially set up the same way. there has been an issue, i believe, when you have just the single bitcoin futures etf right now, there are position limits that the cme enforces, in other words you can only get so big or active in a given contract >> that's correct. so position limits i think are less of a concern as more etfs do enter the space because there will be large holders of these contracts and it will be harder for be one entity to control the market this is why we actually believe that having a handful of these products is good and we do welcome it. >> is there a drawback that -- to there being a futures exchange obviously -- futures etf you have kind of the friction of rolling to new futures

there's some kind of strain from the underlying bitcoin price over time perhaps, although we have seen things like an oil futures etf has existed for some years? >> right i think that's a good nuanced question regarding roll costs we plan to roll into the next months futures contract as efficiently as possible and believe our team's expertise in this market does give us an edge over other offerings. to your point about a futures based etf than a physically backed etf, that's been a question we get asked a lot. we think it's a fantastic opening to have this futures based etf, the sec has clearly signalled a preference for futures etfs versus, and it's easier to put an already regulated product in a etf wrapper than to take an unregulated product and put it into the regulated wrapper we thing that this is a good time for a good structure.

>> okay. just to dig into that more, obviously you're focused on launching this bitcoin futures based etf but how are you longer term thinking about the possibility of a spot bitcoin etf? is that something you think is going to come to the market at some point >> yeah, we do that, of course, is the holy grail, but it does appear to be far off and not likely to be approved this year to note we do have an application in we filed back in january 22nd, but again, given this reality, it's more prudentto focus on i think the futures etf for the time being. >> leah, thank you very much we'll watch it as things get trading tomorrow appreciate it. >> thank you so much as we head to break, take a look at shares of hp hpq the symbol the company did hike its annual dividend and now a dollar a share. it issued a very positive outlook despite ongoing supply issues or supply chain issues which it expects to continue

through the first half of fiscal 2022 "sawonhetreaonaight ahd quk t seet. stay with us.

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welcome back take a look at shares of digital world acquisition corps. we note it this morning because it is in a deal to merge or acquire trump media and technology group digital world acquisition group is a special purpose acquisition company that had about $293 million, that's how much it has in trust, assuming no

redemptions, how much would go into said company. it's valuing trump media and technology group initially at $875 illion, but there is an earn out here as well that could take the overall valuation up to as high as $1.7 billion. that will depend on the performance of the stock price that's post-the business combination. this morning they've announced the eal. it will not close for some time. trump media and technology group will soon be launching a social network named truth social, which is going to be available for preorder they say and it will create what they're calling a rival to the liberal media consortium and fight back against the big tech companies of silicon valley. it's arousing a good deal of enthusiasm right now in the marketplace. i should note 100 million sthars, mike, already have changed hands. that would be the highest volume one day, sort of one-day of the transaction name we've seen in a

spac name. >> amazing the target company here is sort of not really operational yet. >> no. >> so this isn't like a typical spac where there's an existing business and you're kind of -- >> i did not see any projections typically on day of announcement you'll get projections, sometimes we, of course, say well 2025. nothing at this point other than a plan to launch this social network to combat the so-called liberal media. but right now, it's looking very good for the president >> i was going to say -- >> they're going to hit -- if they maintain near the stock price they will hit those incentives in terms of performance and, therefore, it will be worth $1.7 billion. >> like in the heat of it in the early part of this year it was mainly spac vehicles like capitalize a brand or personal brand and that's the extreme example of that right here. >> yeah. the trump brand. >> yeah. >> just looking back at the popular vote you had nearly half of the american adult public

voted for trump. a built in market for that adding to the enthusiasm in the stock right now. >> some are doing comparisons to twitter and daus and what they're worth in the united states and this and coming up with a fairly large number. >> it's going to be an interesting one to watch. up next, union pacific ceo lance fritz will join us first on cnbc after reporting results. later today do not miss the cnbc disrupter 50 summit at 2:00 p.m. eastern, attendees will hear from founders and ceos of breakthrough venture backed start-ups poised to become the next great public companies. i'll be there and moderating a panel. how to repair a broken supply chain with executives from linage logistics these are two start-ups disrupting transportation and logistics. engister at cnbc evts.com/disrupter 50 summit we'll be back right after this.

(rhythmic electro rock music) (crowd cheering) - bito, bito, bito, bito! - [announcer] bito, the first u.s. bitcoin-linked etf. everything you've seen me do was made possible by what you don't see. cause when you're not looking, i go to work. ♪♪ strength isn't a given.

it's grown. it's earned and tested. ♪♪ we all have the strength to see what's possible. it's up to us to unlock it. tonal. be your strongest.

>> welcome back. union pacific beating on the top and bottom lines as cost cuts and price increases bolster profits for the company and shares up fractionally lance fritz, ceo and chairman joins us now to discuss. great to have you back on the show. >> morgan, thank you for hosting me this morning. >> let's talk about the results.

flat volumes but did report higher revenue that speaks to the pricing power you've been able to command at the railroad. how sustainable is that, looking out into the coming months, can you continue to raise prices if need be? >> yeah, morgan, in addition to pricing power it showed the power of the overall franchise because there was a strong business mix as well that's supported by some of the business development activity that we've got under way in terms of the pricing environment, it's a good environment, right truck capacity is tight. that's a great area for us to be able to compete in and it looks like truck capacity is going to remain tight as we go into 2022 and maybe even beyond 2022. >> which speaks to some of the supply chain bottlenecks, the gridlocks, the issue, think about the ports, particularly on the west coast which i know you're picking up containers from to transport around the country right now. just in terms of some of that

congestion and the ripple effects, do you see that going into 2022 as well? >> yeah. i suspect so morgan, the fundamental issue as you point out is we need more capacity in truck driving and in warehouse and distribution centers to be able to handle this increased demand for goods being shipped into the united states we've seen some progress there, but not enough yet, and that's fundamentally what we need to see. so that's all about labor. it's all about making sure we get the workforce kind of right matching supply with demand and i suspect that's going to happen i just don't suspect it's going to happen this year. it will tail into next year. >> okay. of course precision scheduled railroading you've been implementing over the past couple years plays a role in how you're able to navigate this i would imagine. the lower guidance for full year volumes from the prior guidance of 7% does that speak to the supply chain issues we're seeing

>> absolutely. it does. if you recall coming into the year our guidance was 4 to 6% volume growth. coming out of the second quarter the environment looked so good that we raised that to 7% and continue to see disruption from semiconductors in the automotive industry, the international intermodal supply chain disruption and as a result, we lowered it to 5% >> yeah. i want to get your thoughts on the industry broadly because we've seen a lot of activity over the last couple months and something you and i have spoken about before, consolidation, kansas city southern tied back up with canadian pacific you've got the csx, pan am deal, trying to move forward as well and then, of course, changes in terms of leadership over at canadian national where you have activist investors looking to see a former up executive helm that company i guess your outlook for the potentially changing landscape and what it means for union pacific since so much of the

freight that you move gets handed off to some of the different railroads? >> yeah. you're exactly right about 40% of our business is interchanged with another railroad they originate it or terminate it for us. and let's pick apart all the things you talked about. the cp purchasing, the kcs, we've been vocal, several concerns the overriding concern is we want to make sure our customers continue to have good commercial access to and from business in mexico so we're involved in that process to make sure that access remains. in terms of the transaction that csx is trying to do we look at that as a minor transaction. i'm hoping they have success sounds like something that works for them in their network. when our peer railroads, partners in joint business development, are running a better network, have more opportunity, that creates more opportunity for us as well then in terms of just overall,

we think our best reaction to what's going on in the rail industry is to continue to run an excellent railroad network. we have the best franchise in the industry we have an excellent team. we're hitting on all cylinders we've got some opportunity to create a little better service product and continue to recover from the impacts of the wildfires and other events in the second quarter or in the third quarter, and we feel very good about that. so our future is very bright >> lance, david faber here a quick diversion to vaccine mandates i'm curious, we had gary kelly join us this morning from southwest. they're not requiring their employees to get vaccinated though encouraging them. you are and seem to be in a dispute with your unions update us in terms of your progress given you have a december 8th deadline to get everybody vaccinated. >> yeah. let's be clear, we are following

through on president biden's vaccine mandate for federal contractors. we've looked at that very deeply and we believe it's a lawful executive order and we are a federal contractor so we think it's an obligation for us to comply with it there are some of our employees that aren't happy that the federal government is mandating they get a vaccine we're working with those employees. but setting all that aside, december 8th is the date that the executive order notes as having all employees federal contractor vaccinated. that doesn't mean that there's something that's immediately going to happen on december 9th. we're definitely encouraging our employees to comply with that vaccine mandate and making it very easy for them to do so. >> yeah. it's a conversation worth having with so many ceos, lance finally to wrap all of this up, the outlook on inflation conversation we've been having with so many ceos.

i'll put that to in part because we have seen dramatic run-up in fuel prices. >> yeah. morgan, we're seeing inflation in purchase services for sure, right. whether it's commodity driven or labor driven, we are seeing the pressure right now it's manageable. you mentioned fuel price increases. we offset that with fuel surcharges into the marketplace and those are broadly accepted in the transportation industry but you're right, there is real pressure on prices inbound and some of that might have transitory some of it looks like it might be structural. >> interesting lance fritz, we appreciate you joining us today thank you. >> thank you still to come, coconut beverage maker going public on the nasdaq we'll talk with the co-ceo ahead of its first trade we're back in two minutes.

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tools and a personalized plan that helps you build a future for those you love. vanguard. become an owner. coconut water company vita cocoa pricing below 15 bucks a share. we are still awaiting the first trade. joining us now is co-founder and co-ceo mike kirban congrats on the ipo.

your company is a very good position it would seem in terms of the coconut water market with 46% market share when i see numbers like that, though, i think you've only got one way to go, which is down, given i assume there's a lot of competition coming so are you banking on the market itself increasing dramatically or do you really think you can continue to gain market share? >> we'll continue to gain market share but more importantly we're bringing in new consumers. 66% of our growth this year is coming from new consumers coming into the category. that's what's driving the growth that's what we're really excited about. as we continue to also gain market share going from 42% last year to 46% this year. >> and what gives you the confidence you can go from 46% to i would assume as much as half the market at some point? >> well, we started this business and built it over time with competitors, coke and pepsi. we pushed them out of the market through pure strength and through our supply chain skills. and by being able to push them out of the market, we're now i would say unshackled and we're moving this thing forward.

we have the ability to grow even faster because we are now the category cap and the category leaders of this category and as we build our broader portfolio of beverage brands, we're seeing incredible growth the business is up 17% year to date and we continue to accelerate growth moving into q3. >> you pushed coke and pepsi out due to your supply chain skills. my thoughts would be that those two companies are pretty good at supply chain what are you doing better? >> they're pretty bad at cracking coconut they're amazing at supply chain but working in the tropical world, we're buying coconuts from thousands upon thousands of small family farms today and historically the coconut water was a by-product we've put in the infrastructure and built partnerships with these local communities that are helping them thrive and giving us the ability to access the coconut water which is a major barrier to entry and definitely a barrier to scaleability in the coconut water category >> so mike, i know it's not just coconut water for the company anymore either

how are you viewing expansion? what are the other types of, i guess, beverage markets, natural beverage markets, that you see great growth opportunities in? >> yeah, as we look at the business, we're focussed on a few things first and foremost, it's continuing to drive the great growth that we're seeing in vita coco water one of the fastest growing brands in the beverage aisle today and we're becoming a household staple across the u.s., europe and even china. in addition to that we've introduced new brands, for example, powerlift, which is a sport drink that actually is no sugar and has protein, 10 grams of protein taking sport drinks to a whole new level. our plant based energy drink brewed has more caffeine than a monster or red bull and it's single plant based ingredient. consumers today want healthy, plant-based, functional ingredients in their products and that's what we're building

and that's what we're really excited about. >> mike, those efforts suggest that there's always going to be a surge for something that seems kind of new, somewhat better, novel, i mean, you see stuff about how cactus water might be preferable to coconut water in some areas how much of a risk is that to the core, you know, kind of sustainability brand wise of coconut water? >> look, we started this business 17 years ago with a dream of bringing coconut water from brazil to new york as an alternative to artificial sport drinks since then, we built vita cococ one of the leading healthy hydration companies in the world. we think that we can continue to drive that growth between our scale, our routes to market, our competitive insights and industry insights and so on. we believe that we can continue to be the leader in healthy hydration and over the long run by giving consumers of this generation more of what they want, more of the good stuff and less of the bad, we believe that

we can be one of the largest and most impactful beverage companies in the world that's our objective public markets gives us a platform to be able to do that >> all right big aspirations. we'll be watching as you guys start trading. congrats. >> thanks so much. thank you. >> you're welcome. speaking of big aspirations, take a look at tesla, shares up 3.6% guess there might have been a time, morgan, musk would have talked in grandiose terms but he fulfilled a lot of those promises of course, perhaps as many as a million vehicles will be delivered fairly soon to consumers every year. >> that's the thing about elon musk, tesla or spacex, he puts very ambitious guidance he does reach it at some point >> also now and then since the stock is overvalued and it's too high should go down. >> no longer on the conference call will be interesting what that does to see what it does to the volatility in the shares moving forward. >> yeah. right now it's locked back into

retail investors with options chasing at the high for the day, $900.00. so it clicked right there. the all-time high from january slightly above 900, it's 940 cents. so everyone is watching that on a short-term basis. >> quickly approaching $090 billion in market value. that will do it for us on "squawk on the street. "techcheck" starts now ♪ ♪ thursday, welcome to "techcheck" i'm jon fortt with dea deirdra bos and julia boorstin pinterest. then record revenue and record profit for tesla is this elon musk's breakthrough quarter? and later, wework fina