the sg data is so noisy that some choose to ignore it altogether the world's largest believes esg ratings rarely help and instead using tools for picking climate friendly investments the disconnect between esg and environmental impact >> all right good stuff, kate, thank you. that does it for "squawk on the street." "techcheck" begins right now. good wednesday morning welcome to "techcheck" i'm carl quintanilla and deidre bosa. the sector closes out a tough 2021 we're going to break down how the disrupters themselves are

being disrimupted and then tech biggest catalyst from google to netflix to amazon and the new products and announcements that could determine their fate in the new year and then, finally, that big pile of cash in silicon valley. we talked fund-raising and spacks and ipos. a deeper look at how capital is being used inside tech companies to lure employees, win customers and finance investments, d >> meantime, carl, the nasdaq higher and tech continues to underperform and sitting near all-time highs for the broader indices and we're keeping an eye on apple still just inches from that $3 trillion market cap and we're also waiting on a verdict for thernos founder elizabeth holmes as we head into day six of jury deliberations not far from here in san jose. first, a look at a sector that has severely underperformed in the last few weeks and that is fintech. this was supposed to be fin tech's year. buy now, pay later

the ipos of coinbase and robinhood and not to mention all that online and digital commerce that has been happening over the last 18 months what's happening instead is investors, they're actually returning to the incumbents. take a look at shares of visa and mastercard they have each jumped more than 10% over the last month while the more recently public names like affirm and sofi down double digits the question is, guys, is the hype of the off starts wearing off within those names the names tied more closely to crypto, coinbase and robinhood now have the lowest multiple to ev to sales basis in the group and square that embraces bitcoin and blockchain hasn't done the stock any favors since that change the company is on fact for its first yearly decline since it went public back in 2015 the question here is that a lot of these retail investor and buy now, pay later i don't think anyone thinks

they're going to go anywhere next year. can these incumbents kind of hold on and move quick enough or is this just a pause >> i think it's a pause. i think this is a pretty classic trow of disillusionment and a lot of energy in the space and reinvent everything and the reality of execution sets in and that's right next to the reality of having to change an enormous amount of consumer behavior, especially around the holidays as people shift the way they spend money, which is really the fundamental all of these companies. you're trying to get a lot of people to change how they spend money. that's going to take a lot of time >> yeah. it is interesting when you think about the, i mean, if this, if the legacy payment companies are able to start to take a knock out of the upstarts with this, what happens when they really put their own pedal to the metal. i think it's also interesting loo looking at that chart you can

see what happened to affirm all because of that relationship with amazon and one more comment what happens when you're able to plug into that kind of scale >> yeah, i think, look, amazon wants to change the way you spend money at a major rate. i think the question is whether they can actually convince people, especially in the fourth quarter when, you know, the holiday shopping period brings people back to their habits. i think there is a big question whether amazon's scale can actually do the things amazon wants or whether it's just going to take time >> yeah. scale in fintech as we've seen, guys, isn't necessarily the key here visa is one of $500 billion company has been making a lot of investments in the space but hasn't been some might argue simple nimble. the buy now, pay later trend disrupts the rails and the whole thesis we'll see what happens and we'll stay with the opportunities here our next guest recently lowered his price targets for affirm, square and paypal and he maintained his buy ratings and dan joins us now

dan, good orning great to have you with us. >> good morning. >> investors were so excited about this young, active base that robinhood and coinbase promised but they've been slow to sort of cross sell different products is that being slow to the punch or users not this young base of users, not really buying into it and buying into other products >> i think when you talk about, thanks for having me on the show when you talk about names like coinbase specifically what we're seeing here, some worries not so much the engagement, people are using it very often and more worries from the investment community about shrinking yields or rates and that's what is holding the stocks kind of backward if you think about their shares in bitcoin or else where, they're actually gaining share so it's more volume at a smaller take rate or a smaller spread and i think that's what is concerning people are still using those apps pretty widely, if that's a

question. >> they're using them widely, but if you think about the transaction costs and the take rate that they're getting and that is likely set to decline. the whole premise is that they're going to be able to sell other products and engagement, too, when you look at coinbase and robinhood that can rely on things like crypto prices or meme stock action. where do they have to go from here how do they have to expand their business >> that's a great question two separate answers one for coinbase specifically, they need to go deeper into say more institution, institution and bitcoin and more nfts, et cetera that's what's going to get them deeper engagement with the consumer for robinhood specifically, that's the promise and also the issue. the big kind of promise for robinhood is the kind of one stop shop and if they can actually do this, the isis going to be a home run they haven't delivered yet on

that that's kind of the cross selling you're talking about if they do it, very, very successful but the onus is on them to prove that they can do it. >> i buy that about robinhood. you want to build a new kind of bank and financial behavior especially with younger people is coinbase making the same promise? coinbase is pretty cupled to the price of crypto. that's where the energy in the crypto markets come from what does coinbase need to build to decouple itself from that volatility >> they need to actually, you know, this is the main issue that you're hitting. they are all about fee-based trading. i think what's happening to them is that you're getting companies like square, et cetera, we're basically saying we're going to decentralize everything and make everything free. their business model is challenge and where do they need to go? they need to go deeper into where the other guys are and offer more products like lending or banking products which is kind of what robinhood is doing

or square is doing and if they're being attacked on the fees, they have to go and counterattack on the banking side so, in my view, if they actually start becoming more of a bank because the app is very popular and you can leverage it to giving loans, mortgages, et cetera kind of being a mix between robinhood, square and say like a sofi, that could be good for coinbase, but i'm not seeing progress there >> you know, it's interesting, dan, you mention and fees in general. i wonder we've been talking about deflation and financial services for so long but we've reached this point where it's zero commissions everywhere and the models are getting their revenue from things like payment forward or flow and in some cases the lion share of their revenue. i wonder do you think that means we sort of bottomed out in deflation in financial services overall? >> it's a good question. i mean, i don't know where it's headed, but i think at the end of the day, if you think about, you know, three years from now,

everything that's fee based right now like crypto trading is going to be free so, i actually think that the robinhood model is more sustainable than the coin-base model because they're already offering an issue with pay forward. we don't know where it's headed but charging these very high fees from the consumer is very dangerous because at the end of the day it's all going to be free i think more convergence and it's just like the tdameritrade's of the world. the fees are going to be almost zero at the end of the day that's my view >> okay, so, dan, what does that mean for the visas and mastercards of the world are you surprised that investors sort of gone back to them over the last month or outperforming. what is the longer term bet here you think the legacy players can innovate quick enough to catch up or not be disrupted >> yeah, i think the disruption

theme on the networks and that's a great point. the theme on the networks is very interesting and there's a lot there but further down the road what is happening at the end of the day, do we have enough about two-thirds of the growth, for example, from visa comes from cash to card conversion. you ask yourself the question, how often do you still pay with cash today versus precovid i'm not surprised to see that and i think the upside for the networks and that's something that is coming and it's going to come cross border trade. cross border trade is ten times more profitable for the net, withes than regular transactions you're talking about almost 1% take rate versus ten basis points for a domestic transaction. as flights come back, now we have new variant, but at the end of the day, it's all going to end and people are going to fly again and i think the numbers are probably going to be revised upwards for visa and masteracard and i think that is the reason

the stocks are performing and less concerned about the disruption at this point and more nearterm fundamentals >> the longer trend, though, when we talk about cross border, that is certainly, but isn't the whole premise of crypto and blockchain going to disrupt that what is your time frame here do you think it is going to take a lot longer for something like crypto to disrupt those kinds of transactions and can visa and mastercard sort of avoid that? what can they do >> you know, it's a very loaded question, i'll try to give you an answer. at the end of the day in five, six years i think you're right i think that crypto what jack dorsy is working on at block, which is the tbd protocol which is challenging coinbase's model and in a way could challenge the networks if you could transfer money between people in different countries without a fee, you do that

i think what people are underes underestimating is habits. at the end of the day, you go to a hotel and pull out your card you have to change the way people do things i think those business models are viable, at least for the next two, three, four years. what happens after that, i agree with you more disruption down the road. >> yeah, i remember even with ali pay's model. that was going to disrupt the rails and it wasn't something they didn't think would happen for a long time and now we have crypto and the pandemic has changed habits quicker than anyone expected. dan, as always, thank you for your insights and have a great new year >> thank you, happy new year one trend we have talked about all year and maybe more than any other is the impact of mega cap tech on the overall markets. our senior markets commentator mike san tollsantolli is back ws

and if there is anything that might alter the trajectory of that market in the coming year >> the meme has some version but not the few going up at the expense of the average stock, but just the magnitudes. you know, i was looking at microsoft just for one, which i have long said is really the most important stock in the market over apple just because it's a more pure measure of demand for the classic tech business model that's not really about i love the product, i'm going to buy the stock that's responsible for about one-sixth almost of the net s&p 500 gain this year is microsoft going to go up 53% again next year on a $2.2 trillion market cap right now? i am unclear and that's really a hard bet to make but i would feel worse about this trend if it was obscuring some kind of scary macro message going on under the surface of the market right now that's not really the case a little bit of a tilt towards

defensive classic and defensive sectors. what are people complaining about when they are complaining about mega cap dominance is it you had less of a chance to beat the market and giving you a false idea of the markets underlying strength and supply demand maybe it's all of that but when the equal weighted russell 1000 is up 20% something on the year, it's hard to say it's been just a handful of stocks, you know, pulling the market higher and the rest doing nothing. >> right i undwwonder, though, take cath woods' overall philosophy there is generational change in battery storage and in mobility and not to say that it's going to necessarily move the revenue needle or the earnings needle, but give a cushion to any would-be fall and sentiment regarding these mega cap names >> potentially again, i don't know exactly.

it's about what your starting valuation point when you buy into those trends or how you try to capture some kind of return off of them. i remember, this is probably sounds like a trivial example, but i remember 15 years ago and people say nano technology was going to be really the thing to watch and it's there it's revolutionizing things. i remember lennox that was the bitcoin in my opinion, open source free thing and one stop to use to play it, red hat, and it went nuts and eventually became part of the fabric and bitcoin found a way to absorb and benefit from it. i think it's a hard gain to sort of pick the winners on these visible but, you know, hard to handicap longer term secular trends >> you know, mike, i think carl and i had the exact same question about cathie woods' thesis and the fourth industrial

revolution this time somewhat different the examples you used didn't have the pandemic behind them. could this time be different because of those trends and looks like we'll be in this hybrid workplace for longer and payments are changing as we just talked about some of the other trends could persist. >> obviously, it could be the case that we accelerated things. you know, one way i would think about conceptionalizing the art philosophy think of it as venture and you know the general trends and you want to put a lot of money behind those trends and whatever five or six different areas and chances are your handful of humongous winners will take care t tesla is a best example. that to me makes a little more sense. the pandemic effect, to me, shouldn't be a mystery to market

right now. we're two years into this. the market sorted out exactly what that means for long-term cash flows to some degree right now. >> right so, more baked in. mike, thanks, as always. after the break, one-hour delivery from amazon what happened with that. and what about subscribing to uber prime don't miss catalyst for 2022 lots more ahead. "techcheck" is just getting started. inner voice (kombucha brewer): as a new small business owner, i find it useful to dramatically stare out of the window... ...so that no one knows i'm secretly terrified inside. inner voice (sneaker shop owner): i'm using hand gestures

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let's get a gut check on rivian shares are in the red today. they're down more than 5% after the ceo announced that deliveries of its electric pickup and suv that use large battery packs are delayed until 2023 that stock, though, still up since its electric ipo in november and now down more than 40% from its highs speaking of evs, let's take a look at tesla on a run, as well. elon musk exercised all of his

options bringing the total to 22 million stock options since the spree. gan last month sold around 15.7 million shares since posting that twitter poll in early november asking if he should sell. for those keeping track, yes '22 is more than 15.7. musk will end up with more shares than when he began selling, which makes this complicated, guys, to figure out. >> yeah, yeah. one of the untold stories, though, about that selling cycle. he's going to have more tesla than he did before if you're an investor in technology, what will move the needle in 2022 a very cool note laying out five catalysts to watch in the coming year for example, uber may launch a subscription service and amazon shortening delivery times and netflix, of course, getting into gaming will those be the difference for those names? mark joins us this morning to talk about his note. mark, i don't know how you want to handle this maybe pick the catalyst that you are zeroing in on the most

because they're all interesting. >> i think the most interesting one is what i call son of idfa or daughter of idfa. a major change of emarketing lat year based off of personal information off of iphones that was ended and caused disruption and materially impacted facebook. if there's a launch in '22 of a successor ad attribution platform that doesn't deny or doesn't hinder people's privacy but allows marketers to have similar levels of efficiency in terms of their marketing campaign, that is the biggest single catalyst because ramifications for so many different companies. that's the number one, number one catalyst i'm looking for son of idfa. >> that's very interesting and you're right about just the widespread impact. i think more interesting on a single stock story is your

belief in the potential for a prime-like subscription service at uber which i think you are suggesting could be around 99. dt 99. give me the odds on how likely you think this is. >> i want to step back just a little bit, carl that product is out in the market its arer soft launched uber one and they had different membership programs in the past. why wouldn't it be successful? these membership programs only work if it's a high frequency activity like prime with amazon which has been a retention tool for that company with uber once we get back to mostly open economies, a number of times a week that the average person would either use uber for delivery or ride sharing that is a weekly act that creates the opportunity for a monthly membership program like uber one i think that's a really interesting opportunity and they're the only company that

can do that across both delivery and ride sharing doordash can't do it and lyft can't do it. a real competitive advantage for uber they signed up five and 10 and 15 million subs for that program. that's one of the catalysts we're watching for >> those two ideas next to each other because i absolutely cannot resist an ad tech conversation the decline with apple, say you can't do third-party cookies and track people across apps that has led to a lot of effort to build super apps we're seeing it maybe with uber. do you think the facebooks and googles and amazons of the world will actually try to build a competitor or replacement that apple approves or going to move towards big super apps that dominate your entire online activity >> that's a great question that's a great set up. i think the term i've heard used is content fortresses.

companies like amazon have this advantage which they don't need to build a tool to track people all around the internet because their ads and their transactions right on amazon's platform the true work around for facebook is going to be if they can get people to actually perform more and more commerce activities on facebook's platform itself so they don't have to track you all over and marketers don't have to track you all over the internet. i don't know exactly how this is going to play out. i just know the amount of money we're talking about. not just facebook. millions of marketers who had really detailed attribution models that they no longer could use. so there is an inherent interest and a lot of money in stake in getting some sort of viable solution probably won't be as good as idfa and with that much at stake my guess is that something is going to be worked out in a 6 to 12-month time frame and that is going to be the catalyst >> mark, we've been talking about super apps for years and

uber, facebook, others have been trying to do this with very little success we really have nothing over in china and the chinese other super apps why is that and do you think it could actually be the tiktok now the most popular app in the world, that can be more successful in doing so and capturing an audience more than our popular play snrz. >> you're asking the $100 billion question and i don't know if i know the answer to it. i'm not sure if it is a cultural difference or whether the app development hasn't been as well developed here in the u.s. i don't know the answer to it. you're right there hasn't been really a super app created. now, that said, some of these companies have created a very broad array of services for consumers and amazon's probably at the top of that list. the broad number of entertainment, shopping options you get out of amazon. so, amazon may come closest to

being that super app so far but it is different than what you see in asia and a bit of a mystery. >> mark, favorite mega caps. amazon, facebook and sometimes we'll get to some of the large to mid thank you, mark. evercore isi we'll have a look inside google's latest tactic to win meacha, ene rket srewh w co bk. lity candidates matching your job description. visit indeed.com/hire

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♪♪ welcome back to "techcheck" i'm carl quintanilla with deidre bosa and nilay s&p briefly here in the red. coming up, big techs handing out big money, but will it pay off

more on that story in a moment first a news update with rahel solomon. >> u.s. crude oil production has risen to the highest level since may of last year and at the same time inventories of crude and oil fell more than expected last week and that's helping push crude prices up 2% this morning. crude stocks in the strategic petroleum reserve are also down and dropped to the lowest level in more than 19 years. penting home sales a surprise drop in november. a key index about 2% last month. limited supplies of homes have been keeping sales down and prices up. sales were weaker across the country. u.s. trade deficit in goods jumped to a record high in november exports fell and imports rose leading to a 17.5% jump in the deficit to nearly $98 billion. no significant slow down in flight disruptions today more than 800 u.s. flights have been canceled this morning airlines continue to blame harsh winter weather and rising covid cases among their workers.

deidre, i'll send it back to you. >> thank you for that, rahel. now we focused a lot on the record levels of the ipos and share sales this year, but the cash in silicon valley here is also inside of companies and how they're deploying it as a topic of today's thread. we're going to break it down for you. first up, apple reportedly giving out giant bonuses up to $180,000 in stock grants bloomberg reports that it was presented as a reward for high performance, but also comes as the company scrambles to retain talent here in the valley, particularly to keep them from going to facebook or meta. that is not the only space where big tech firms are spending huge amounts. taking a look at cloud, a story in the "journal" today highlights how alphabet topping $142 billion war chest to build out its cloud business alphabet making equity investment ranging from the cme group and univision and asking those companies to use its cloud

surv services another way they're using cash the streaming war. streamers are set to spend a combined $115 billion on new content in 2022 which, guys, is just a staggeringly large number one that i can't even get my head around. this is really cash as a weapon in tech and these companies increasingly going on the offensive. carl, yesterday we were talking about the dogs of the dow and the highest, you know, the stocks with the highest dividend yields this is a traditional way of returning money to shareholders. more likely to see these tech giants invest it back into their businesses and this is a creative way of doing so, especially that cloud story strikes me as particularly interesting because google, of course, is lagging behind microsoft and amazon with that huge cash pile and use its cash as an incentive for customers to sign on with them versus their rivals >> yeah, we talked about the $12

trillion trillion dollars that have been raised in equity and debt so far this year, d we talked about that yesterday whether it's the cap-x boom in evs or in chips or in streaming. i mean maybe the story of the coming year is going to be less about household spending and more about enterprise spending >> yeah, i mean, if you look at all these markets, they all kind of feel winner take all. they're at different stages of development, but streaming, that's a lot of money. people will only end up with a handful of subscriptions you have to spend the money now to lock in those consumers with google, it's about power. they have to stay hungry and devour >> and to that point, nilay, i was looking at the cash piles. $243 billion for google and amazon, by contrast has an asset heavy and ecommerce fulfilling out the network and it has only about $30 billion in cash. but when you're looking at the cloud wars, pricing power and

now that element of investing in companies to get them to sign on to your cloud, that's an interesting dynamic that could emerge next year >> i really think with google, especially that move to investment is not just about getting people to use google cloud. it's about tying into that broader google ecosystem so they can collect data back for the advertising networks the place you see it ly adt so they would use it to create that data relationship >> yeah, perhaps pushing into that super app territory that mark mu hany was talking about also interesting to see private companies doing this we had databricks on and they're using some of their cash pile to invest in their clients, as well so, certainly a thread that we'll continue to follow well into 2022. now, in terms of the amount of cash on hand that each company has, as we were looking at apple leads the pack here with $190

billion. think about what it could do with that followed by alphabet's $163 billion microsoft $140 billion amazon and meta platforms round out the pack with 88 and $69 billion respentively after the break, a check on crypto as bitcoin looks to end the year more than 30% off its highs and the tax loopholes notu to know about. those details later on this hour "techcheck" is back in two ♪ ♪ ♪ digital transformation has failed to take off. because it hasn't removed the endless mundane work we all hate. ♪ ♪ ♪ automation can solve that by taking on repetitive tasks for us.

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time for a gut check on bitcoin. down 5% to under 48k the plunge coming as nearly 100 and 30,000 options contracts expire on friday that's according to an analysis by coin desk those contracts are worth more than $6 billion. not all that is weighing on bitcoin. omicron concerns hitting the crypto currency hard, as well. down about 17% in december as investors move away from riskier assets still on track, though, for the worst month since may when bitcoin fell over 35%. so many colliding narratives, nilay, for example, for those who believe bitcoin is a play on a withering dollar dollar having its best year in six years. you have inflation, payments,

the dollar currencies, turkey. it's been a hard read all year long >> yeah, you know, i think right now a big argument in silicon valley among some very rich people about whether the future of decentralized services is in bitcoin or whether quote/unquote web three ideas. fundamentally, i believe the only reason people care about bitcoin is dollars the only use of bitcoin that is generating dollars i think all the action and attention around crypto in terms of applications is in the web three ideas and nfts and decentralized services and that will play out in an almost religious war fashion for the next year. >> yeah, i think that's what the bulls would argue that this is a long term, that the volatility is well expected personally, guys, i'm really interested to see what happens with stable coins next year. many call this a potential black swan for the whole crypto complex because they are so

opaque but as you see the value of tether, the market cap of tether and circle and some of these other big stable coins increase as central banks take a harder look at them are they getting less risky? are they becoming more transparent? i'm not sure about that at all but it will be fascinating to watch and it could be, it could be something to make or break the crypto market next year and i don't know where that goes whether more regulation would break it or make it, you know, more appealing >> yeah. there's a lot of people who argue that regulation itself furthers the maturation process of the currency. time will tell speaking of crypto, by the way melissa lee our colleague is hosting a special 6:00 p.m. eastern time "crypto night in america. you don't want to miss that. meantime, a big year for cyberattacks and sort of a mixed bags for cybersecurity stocks. josh lipton taking a look at the

landscape there. hey, josh. >> carl, let's take a look at the hack etf that tracks this sector up about 7% so far this year basically flat here for the last three months but gets more interesting when you look under the hood. fortinet up 140% in 2021 big move third best performer in the s&p, by the way zscaler up and crowd strike a different story there, though. it's in the red in 2021. dan ivs over at web bush expects another strong year for this sector in 2022 bottom line he says companies understand the threat and keep dedicating, he says, more of their i.t. budgets to cybersecurity budgets. his top picks he tells me zscaler and palo alto networks which is up 60% this year on track for its best year since 2014 back to you all. >> all right josh, good stuff josh lipton. there is a lot more "techcheck" still to come.

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cnbc releasing final stock record for 2021 and big tech has officially lost its shine heading into the new year, according to these respondents only 15% of respondents say they're more likely to buy tech versus 35 saying they favored financials and while apple continues to hover right around the $3 trillion market cap, almost two-thirds of respondents see some clouds on the horizon 58% saying it's reasonable to expect apple will slow down its run in 2022. yeah, carl, 182.86 that's the number we all committed to memory really hovering around the flat line today speaking of, apple's decision to ditch intel the right one. our todd hazelton has a great piece on how that decision paid off. catch that article you really only need to look at the stock. stock report at cnbc.com "techcheck" is back in two

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it's been tax loopholes since the 1990s and an exemption called the qualified small business stock, a tax break that lets investors in small businesses avoid millions of dollars in capital gains taxes if the start ups hit it big. but a recent "new york times" article says the peanut butter secret the lavish tax dodge how

it has become the favorite loophole in tech the reporter behind that piece joins us now maureen, great to have you this morning. when i read your piece i couldn't help thinking about it like a succession prequill dished out shares to his children to avoid taxes to avoid taxes. so explain to us what it is, how it works and how it can help founders and vcs avoid taxes and their families. >> sure. so it was this tax break essentially created in the early '90s the idea was to spur investment in small businesses. it was expanded right around after the financial crisis, but essentially it's this $10 million tax break. it's on this type of stock for early investors in a start up. small businesses and a pretty wide amount qualify, but it's essentially, you don't pay capital gains taxes on the first

$10 million in profits the thing is, as you said, imagine it's the roy family, you can spread that benefit and what it's called is peanut buttering and you can hand out this stock in family members, put it in trust and you just multiply it a $10 million benefit can become 30, 40, 50 you give it to children. you give it to a spouse, and -- yeah it just becomes a more and more dramatic tax exemption >> right and maureen, you did use in your article the real-life example of roblox, the ceo who gifted tons of shares to family members ahead of the ipo and early on, but the whole idea it rests on the premise that the company has to become big so the hard part is actually becoming successful and with a lot of these taxes, we have to ask, if you take it away and you close that loophole does that stifle innovation? are there any kinds of those

concerns within this tax exemption? >> it's a fair question. it's a very good question. it's hard to say. >> sure. >> you have to wonder, would it really -- we've seen these huge -- this huge amount of wealth creation. it's basically been unprecedented what we've seen in the last few years from the ipos, lyft, uber, pinterest. would it really stifle it? it's kind of hard to imagine though you don't know if it would. >> one of the things i hear about a lot is sort of, you know, there's concern about the rate of start-up formation, right? big companies own everything or there's a kill zone around them. do you think taking this loophole away would increase the rate of start-up formation or do you think it's actually providing capital to start-ups or incentivizing start-ups >> i think the idea was certainly incentivizing start-up capital, but we've seen -- i

don't know how much this specifically incentivizes it i mean, there is so much capital out there for start-ups. we're seeing -- you look at vc firms and every single day it seems like almost a vc firm and that's exactly the vc firm's benefit because you have to be an early investor in these companies to qualify for this tax break, and i mean, they're all raising record amounts of funds and in a way we've almost never seen before whether it's sequoia or tiger global. every day they have the record amount they've raised to fund start-ups. >> maureen, i wonder how you think it fits with ongoing complaints about overtaxation in states like california we've gotten comments like that from elon musk in the past couple of weeks. >> that's an interesting point because clearly, we've seen so many stories about people

leavi leaving california for texas california specifically and new york for florida, so it is -- i mean, there is a lot of taxation in california in particular and this is a tax break that a lot of silicon valley companies can qualify for, but it's a small amount you have to be in these companies early, either as a founder and early employee or venture capitalist there are different thing, but it is an interesting point and clearly, it's been a hot topic lately, the taxes in california and the sort of migration out of state. >> yeah. another hot topic has been sort of the perhaps disproportionate benefit to vcs we have jack dorsey facing off against aga ag again an dreesen and horowitz. if they create a very successful company, but vcs that are

investing multiple deals and multiple times a year can take advantage of this. >> we were pretty shocked to learn that we have this example of the roblox family, but that's one time you do it as a founder and vcs is the whole business is investing and finding as many start-ups as you can and we heard on some firms and this is successful firms, partners can collectively rack up almost $1 million in tax-free names and this is with each investment and plus spreading it to family members and multiple partners. these are huge numbers >> yeah. >> it is a fascinating piece, maureen, and i encourage viewers to go out and read it. thank you very much for being with us. >> maureen ferrell of "the new york times." quick programming note crypto night in america.

melissa lee will break down the sector with guests like anthony pampleano and dave mackenzie from the tv show "the o.c." approxit will be a great show stay with us you're a one-man stitchwork master. but your staffing plan needs to go up a size. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire

one more thing, in case you missed it over the holidays as we crack open our new christmas gadget, that means throwing away some of our old ones, but perhaps not as aggressively as tom brady. the tampa bay buccaneers quarterback seen here smashing -- wow! smashing the team's microsoft surface tablet after throwing an interception on december 19th and during an interview this week brady revealed that the nfl has threatened to fine him should he break another one, but he said he thinks the whole ordeal was, quote, pretty good marketing for microsoft. i don't know, neil an aggressive throw. i guess it depends what he'll get next a macbook pro with the chip. >> i talked to somebody at microsoft. they told me tom does this all of the time.

>> he does why? >> he's thrown that thing all over the place. >> yeah. >> i mean, it was not a good game for him, as we all know one of the sporting websites said it was officially his 48th pass of the evening, but it was a tough game for him and the frustration obviously, microsoft bore the brunt of it always grateful. neal patel of the verge. let's get to the judge and the half carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center, streaking stos and what the cnbc survey says. we'll discuss and debate that with the investment committee. joining me for the hour today, we've got bryn talkington along with rob sechin, joe terra nova and jon najarian co-founder of market rebellion.com the dow going for six in a row and it is positive by 66, otherwise we're taking a broad beatinger.