>> but it happens on this crazy zoom that's why i don't know about this new world >> think of the worst face you could imagine and now hold it. >> it's friday, but i don't know if that takes some of the sting we're sieve out of these markets. make sure you join us next week. "squawk on the street" is coming up next. 1234 . >> yeah, there's no freezing here we're live, in person, i can reach out and touch him. i'm david faber with jim cramer. carl has the day off we are looking at a lower open, but we'll start with our road map. that starts with the netflix

drag shares are getting hammered on loan subscriber growth, and pulling the nasdaq deeper into nasdaq territory peloton following well below the ipo price. wiping $2.5 billion off its market value the ceo coming back against the cnbc report that sparked that sell-off silicon heartland, intel investing $20 billion in new chip making facilities in ohio we heard a lot about that on "squawk box. netflix shares are down sharply after the company reported better than expected earnings for the latest quarter, but the focus on disappointing subscriber growth. here's what's ceo reed hastings had to say >> there's a number of, you

know, potential explanations in covid, but we worry about hanging too much on that there's more competition than there's ever been, so it doesn't feed like any qualitative change will overall confidence in streaming becomes all of entertainment so like market side very large our excuse is steady, and getting better so now we're staying calm. >> you buy that, gym >> no, the other thing that would seem a little lame is they said latin america is a little weaker it's kind of like they're a regular company now.

whether they basically just said they had a conference call that was a typical conference call. they obviously had some incredible -- it doesn't seem to matter, and these two movies, nothing seemed to matter of course they could be completely wrong the margins were very, very disappointing. >> so the last quarter reported was strong, it's all about the guidance >> the risk i have is make things will be better. i know i'm not telling people to go buy netflix, but i am saying that i don't think basing everything on their estimation is -- >> we've got any number of downgrades this morning.

i think we each brought back the owned penguins to show the analysts adding absolutely no value, because after the fact they are running off -- we have morgan stanley i have stifel -- yeah, we used to have the great music we played with that >> this is a very interesting netflix preview about how everybody was pretty bullish >> morgan stanley, here it is. churn is declining and netflix clearly has pricing power, as evidenced by the recent price increase >> we're all used to the conference call calm, basically saying our real competition

isn't the other guy. it's time. >> the other reason become that doesn't the new content doesn't ignite people. >> no, no, originally had this idea, and analysts were so ridiculous >> the music was great >> i find, david, rather than just capitulate on the entire market, i want to go back to say what a terrible day to get the peloton memo obviously never waiting for zoom and docusign

it's a coda to the pandemic. i don't know if you -- listen, this time, 50% of the people have this things in a couple weeks. >> i want to move on to peloton shortly, but i want to keep an eye on shares of disney and discovery, soon to be warner discovery, obviously very much focused i want to focus on viacom they have centered their growth potential and investment cases for their direct to consumer businesses, jim. does the netflix quarter make within wonder whether or not this had be the best strategy

now it's a zero sum or dog eat dog. disney has a couple things going for it they have theme parks, consumer products, the money had otated i think -- you think about it, rotated out disney, so notice now i think that money comes bam. >> a lot of other things, but that said, that $230 million subgoal they have which is out there, people have been questioning. they wonder whether this raises the idea that the market itself is not programs as large as people anticipated it does that own it. net flexes convoluted. the people buying netflix today,

and that there's more to it. they released those at christmas time again, you have just say, listen, we've been saying this, and saying this, there will come a time -- when stuff something such as "squid games" i'm going to take my 4, 5, 6 shirt and burn it this weekend >> why >> an effigy kind of thing i like green very much, and these guys are very smart. >> see, they should call taketwo. people, of course, say no, and strauss, of course, has to deal with the people who -- they need to buy gaming.

>> all of a sudden you're talking about the metaverse. by the way there's no short an of speculation around ea -- >> tell me. >> i know nothing other than it comes up a lot, there is a reordering going on, to a certain extent. >> you think the breakup, people thought maybe you can't fight microsoft? >> the idea that somebody would junk microsoft -- first of, any other company think being do it has equal if not more -- amazon, no way >> remember when i told that -- >> apple amazon. >> there are some smaller ones out there. >> yay. >> but you're right. >> they needed another leg you can't just come in with the

same old, same old after what happened that's the kind of thing they're or the jets. >> listen, we're not kansas city see, if someone said you have to take a long-term view, that means you're fired. >> we haven't been to the super bowl since 1965. that's a pretty long-term view >> it is >> let's talk about peloton a bit. shares of rebounding this after tumbling 24%, the company says it's review the production levels this is after

c the ceo responded. it's not clear -- >> you can make one and have -- one bike, one treadmill. >> what i come back to with peloton, frankly, the ofrlg they had back in november. >> when they said they didn't have enough cash. >> remember that at november 16, they offered 24 million shares at $46. >> and they said they needed cash. >> >> we don't need cash by the way, there were a number of growth funds, and a lot of --

>> shocking. >> planet fits in, there are people who understand this, lifetime fitness, people came back to the gym. people like being with other people this is something that i've learned in my 57 years people like people they want to compete against them >> almost. yeah our viewers would believe it. >> ah, thank you when you think of peloton, you think of the pandemic, and then dr. gottlieb saying, look, by force of nature, everybody got it, and it's time to move on >> the idea, of course, is to have the recurring revenue stream from the subscription surface. >> it's kind of like reed hastings, how many people want netflix. peloton at a tern point -- >> it's just -- >> the treadmill -- right.

>> there was an upgrade. stifel upgraded it to a buy. did you see that >> yeah, very bullish. >> at least i'm taking a stand. >> okay, let's use a big company. i haven't been able to figure out how to get the "n" out of faang and put the "m" in i think microsoft is doing so many things right. i wouldn't sell off netflix. that gets us to the broader mark here. how low can he go in particular that we pointed out yesterday are leading the market lower, that don't have a lot of

earnings -- >> when you see someone, lie jeremy grantham. >> he's been talking about it for a long time. he's always worth listening to. >> i'm watching "yell ojackets" worth watching am zoom, google, meta, apple, microsoft spent $280 million last year just on r&d. i want to go with those companies. they're done they're the dot-coms.

>> how about never say, jim, i'd like to have dinner with you on thursday. >> next wednesday, no, how's never? good for you >> i like that never? really never >> they're starting to sell multiples, and this is the time to -- are you telling me that it's -- you're saying time to buy 23 -- >> you want to buy up? >> no, i want to bike down. >> how about hyln? >> how about union pacific, where lance came on and said they had an unbelievable

quarter? one of the things we learned -- just all these corporate companies is your hair looks great, cut it out. what if i did like this -- >> i have a -- listen up, yeah >> is that gray? is that gray >> oh, my god. hair care for men, with you? the quarantine, that's what's causing they problems. you get it, you're off for ten days and you can't find someone to -- they can't find people to fill shifts with the quarantine. >> what's happening? it's happening. >> it's silver. >> it's happening. i tell you, man. >> it makes you look more distinguished. i like real companies that make real things at a profit. i'm sorry. that's what i like

-- all that other stuff. they're just lemonade. >> later silicon heartland, hear what intel's ceo has to say about the $20 billion investment it's a really important one. gina raimondo yesterday? come on. ohio ohio >> now you're talking. jobi. here's the futures we'll be back right after this n. oh, we can help with that. okay, imagine this. your mover, rob, he's on the scene and needs a plan with a mobile hotspot. we cut to downtown, your sales rep lisa has to send some files, like asap! so basically i can pick the right plan for each employee. yeah i should've just led with that. with at&t business. you can pick the best plan for each employee and get the best deals on every smart phone.

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comcast business. powering possibilities. welcoming up, does carl eye sawn think the market is inflated plus jim's mad dash and count you down to the opening bell we've got that opening by about ten minutes from now more "squawk on the street" coming right back. throwing things at me? look, as cfo it's my job to be ready for whatever's next. that's why i have my finance team, randomly hurl things at me. it's also why we use workday. it gives us insights, so we quickly pivot our strategy, people, planning, you name it. sorry, sir. i will aim straight at your next step. see that you do. would you like some coffee? workday. the finance, hr, and planning system for a changing world. ♪ if you wake up thinking about the market and want to make the right moves fast...

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time for a mad dash. key pg >> talking about netflix, obviously the problems with the peloton, but the real economy is

people, jim. this is a good company you buy a house, you have -- now, the issue here is what i'm most worried about, which is the costs have outrun the ability to raise price. sherwin-williams had the same problem, too the ceo is cease we'll have price increases, and i think they with. american is tired of price increases because of the supply chains this is we've been to fix omicron. we also have to add capacity at the same time we need china to get stronger, and are autos going to be in a glut because we have enough chips or are there just not enough autos? unfortunate csx and union pacific, but they're saying already there will be too many cars the gut issues in america are housing and autos, and are they too high

are there not enough of them we don't know what chips he's going to make. we need full-featured chips. that's what the car companies need so an industry. it's had missed quarters >> do they have the pricing power they need, or will think over compressed margins? i think they do now, what this makes is for people not involved with companies that were created the last few months, like clear, where there were more people in the clear line than in the pre -- i waited longer in a clear line -- >> i've had a good experience so far, but clear is now bigger -- i'm saying the companies that have been created the last, say,

year are -- people were looking at this saying, now i have to worry about inflation, the fed -- so no one is thinking how the ten-year is back. remember, by the way, you can catch us anyway.

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>> announcer: the opening bell is brought to you by -- do you think that the stock market is inflated do you think there are pockets of the stock market that are inflated >> very much so. i do think that some of the multiples are crazy, some of the investments are just out of this world. as far as any manageable ratio. >> that was carl he has said that before at

various times. you listen, you always listen. >> goldman sachs is a 5.75 times earnings inflated jpmorgan ten times earnings right. but financials have typically traded at depressed multiples they're going to -- and what's the additional risk? no different from what we remember i think just buy real companies that makes things and have good service. david, can i say, let's just go to alphabet, a premier company, right? it's at 24 times earnings, but

the investments -- 24 times earnings for a career company with a great balance sheet, lina khan is the only one -- >> i'm talking about revenue growth. >> am i supposed to be -- let's go to -- [ bell ringing ] >> let's go to metaverse we're talking about the old facebook not an expensive stock it's 22 times earnings 22 for a company that grows unbelievable so, i mean, are these -- maybe these aren't the ones that he's talking about. maybe his 'talking about some of the spacs that, by the way, i think gary gensler will make so you have to put the projections in, so, david, when we go back to high leon, you're going to see the end of that.

u.s. global investors were celebrating the sea to sky etf. >> time for them. the atlantic coastal acquisition corp, too. we'll talk more about spacs -- >> the west is covered by that center fielder for the phillies, gary -- what was his name? >> his. >> yes, thank you! >> u.p.s., moderna today, they have a neutral, but they talk about how this company has $13 billion in cash, maybe they do something with the cash. or i'm saying that the drug stocks are interesting there's two for united health. david, may you one day get to

the point where people call you every 30 seconds to talk about their medicare advantage -- how did they get my number i'm trying to find things than dispassionate that work. >> let's go back to netflix -- >> no. >> wait a second you start to get to multiples, only 23 times 24 gap eps that's way morgan stanley is talking about this thing. >> the old days with netflix, it was so much money they didn't talk to each other which one did you like i'm tired of that guy, his whole suite of products. anyway i say they're

interesting, and time not talking about rivian i'm not talking about a battery company. on the lightning round, everybody wants to talk about battery companies. i've got one. >> tell me. >> ever veready. >> let's say that reed -- >> you can make an argument this is not without higher multiple names in the market. that is reflective, perhaps of the fact that growth will not be anywhere near -- >> we kind of felt, with the end of the pandemic, maybe people are going outside more i don't know >> i don't know what to think of his comments this is a company that could interest you apple. >> yes, i've heard of it. >> they'll be monetizing more and more of their service

revenue, and kind of interesting stock even but, you know, i just find that apple is interesting it's come down with better than expected numbers i believe i have prevailed on tim cook we can get this number to push the service revenue growth, i want to know if you buy one of these, how much is it now, they make every morning. >> you want to know the actual number >> we go back to the apple card numbers -- >> now, goldman -- >> you've been talking about that card for a long time. a long time. nothing is going on there for a while, right >> that's fair. >> it is fair. you were very enthusiastic about it two years ago. >> i was early a lot -- >> you were absolutely right we have a lot of money managers who are suffering a lot of pain.

>> that's what you said last time. >> my checklist, you brought up some that are very painful there's a lot of hedge funds that i think will show atrocious numbers. i've been talking about it a bit. so many of these hedge funds have moved strongly into the private market, jim. they own a lot of companies that have $10 billion values. >> the window is shut. >> you're not defen strait ing now? >> look at that, the dow is up ooh! >> i think it's something that i'm hearing more about as a concern, namely a lot of his hedge fudged that own these privates in bulk, are these marking them appropriately when you have the public peers coming down, the question is are you marking the privates a lot of any gains were not from

the public equity investments where they were terrible, but where they were -- round up, round up you know, what's interesting to me. >> temperature me they're making fortunes unlike previous models, they have enough money to return a lot of capital maybe they should be look alternate conoco finally it's down -- the stock goes to 80, it's down enough.

>> see, to me, that's expensive. >> can i interest you in any of these? by the way, the journal decides to do a big story on spacs, and the -- that was a quote from michael ray richardson from years ago. >> i get, you know, i don't want to pat myself too heart -- we talked about projection that seems object sur

take a look, you want some beach body can i interested you in wheels up >> wheels down. >> and there's -- by the way, that's trading above still talking a bit above ten. >> they're giving me these instead of what i'm asking for that's okay. >> let's keep going. >> now we're talking about the dilution >> there's what i was looking for. >> right >> i do remember that.

>> the single greatest spac performer of all times >> you point out, like a couple -- >> people thought it was going to be worth 7 billion when it was 60 billion based on the numbers -- >> lordstown -- >> i had a fabulous doctor work on move shoulder yesterday, and said, are you using the -- >> these things are just trading terrible you think there's any analyst who understands. >> look, lordstown is probably near pat gel singer's enterprise it was like a commodity that is

made up. marx brothers, right >> at some point there might be something worth buying. >> should we take up the carpet? let's come back to the broader market here. you know, you mentioned -- i think some of the keys. >> 20 times earnings, and 20% that is a really good balance sheet that actually makes inspection call me interested. call me interested call me ishmail. that's the -- kind of like melville starbucks at 96, david, that's obviously people worried about staffing, right? quarantine. >> they eliminated their vaccine mandate. >> how do you do same-store sales.

how do you -- i'm sure they're struggling, but -- >> a decline in that stock that's -- you know -- >> that's what i'm saying. >> it's getting interesting. >> it's getting interesting. i don't know if they can make the numbers. decline, a real number on covid. well -- >> you wonder about china, though they're still having the property issues, and they're still locking down major cities. or at least what we would consider to be major cities. for them a city of 10 or 12 million is nothing >> a stock that i don't talk about enough, the stock sells at seven times earnings, a much better balance sheet, a lot of high-tech stuff. the name is general motors make stuff, sell it, get the

chips, they'll sell more >> -- the mad dash you brought up in idea, i was trying to following you, which do you believe is the case? automobiles or a shortage? >> there will be -- there will be a shortage -- >> or will it be just right? >> a -- that could be competition, because lithium, which is a fantastic company, car max in that game, but i'm focusing on companies like ford and gm ford has had a parabolic boost they are chip short, but order long when and you have company like ford, they have the book for the f-150. the big problem is they don't have the chips if they had the chips, they would make a mint. the demand will not go down by four rate hikes. >> but will they have the chips.

one of the big stories is with pat gelsinger. >> now down, down. >> i'm not sure specifically -- >> i'm just surging you to look at -- there have been a lot of companies that have -- now, service now was at 700 now it's at 500. it still sells at 80 times earnings do you bike salesforce here -- i mean service now here? >> inindividual contraand amd were your all-time best calls. amd is also down 16%, and nvidia is down. >> amd, we sold some at 160, it was very painful we started buying some back. i think it's interesting

>> how about nvidia? you haven't sold any there >> nvidia -- i hate to use the term long term, but i think it's got a lot going. it's your gaming chip, your metaverse chip the only problem i have with nvidia, they're the highest level of autonomous. i don't think you're necessarily going to get to that if there's one accident, you know what happens. i like the semiconductors that have come down a great deal. i like companies that had been very expensive, and they're not, i don't like all the stuff that came -- i searched for one company that has come public in the last year, that i would want to buy one. one. >> let's quickly divert to pat gelsinger. he was a guest on "squawk box" this morning, with the plan to spend building factors in ohio to make chips. take a listen. >> we did a nationwide search

for our next mega fab location we looked at 30 to 40 sites around the nation, a lot of many factors, you know, big, it's going to be growth to eight fabs over time, so large location, energy, water, talent. you know, all of the midwest schools, and this is manufacturing. you know, we wanted a place that had a history, a passion for manufacturing and scale. >> there it is that's why it's ohio. >> but there's no infrastructure there. you need infrastructure to be in that business. remember, also, he said there's 3,000 jobs when i went to the israeli fab on saturday, sabbath in israel, there was no one there ireland was very upset how few people worked at the irish fab after they got it built. i think pat's playing for positive press

he's been pretty good for that he does have plenty of capital, he might be able to do it, but this foundry business without something directly from congress is just not going to be what's -- i said nvidia's high-performance chips and i want amd's i do worry we're too concentrated with taiwan semi, given the geopolitical issues, but i think intel makes a lot of money, but it's not cutting edge. let's end on the nasdaq here we have the comp down over 10% always look at arkk, because it's reflective on what's going on in this market. underlying some of the speculative names, that stock, that arkk is down 21-plus percent for the year you know a bottom when you see it >> sure, walks like a duck -- that doesn't feel like a bottom to people. people say, listen, it's just

those are -- i like the company, but, you know, a lot of draftkings are at much higher level. how much stocks does he buy when they were down 50% she bought a ton of -- that's really incredible. >> all those companies spending a lot of money -- >> the cost of acquisition is endless. i look at companies, again, the oils are back. today is oil is down, but the permian is going to be amazing very good for the long-temple investor i think you have to -- >> all right let's take a quick break you can get in on the new cnbc investing club with jim. find out more on

cnbc.com/investing club, or point your phone at the qr code on the screen. let's look at how treasuries are faring, we're back to 1.76. >> isn't that why we sold everything, because it was at 2? >> we'll be right back don't be shy, now. i like that prime cut. -aflac! -i love my gold jacket, but that aflac blue feels so right. when you feel right, you coach right.

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qs well, netflix hetting, actually, that's a new recent low. i'm going to find out what that takes us back to the last time netflix suffered a interday loss they're down grading the stock as other stock calling the future a red notice for long-term growth slowdown. we'll join us later on >> tough

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into irony robinhood is big into irony, but they don't know it roll out to their customers. that's what we need a crypto wallet obviously has a hole because this is not the level where you want to start buying crypto yet and i think it's ironic. and robinhood is -- >> bitcoin down 10% today. >> robinhood in tights >> what's behind the move? i think the 36-page russia white paper about how they should outlaw it. i come back the interview, which says listen, deutsche coin, how many are there do they have deutsche coins every day? by the way, it remains or was robinhood's most active thing. and this is what we want to get people back. not to doegs, not to amc, not to let's say -- i don't know.

you want to call it gamestop but let's get back to real companies with real things and real balance sheets and profits, even dividends. proctor and gamble, united health goldman sachs is six-times earnings look, i just thrive on companies that make things, good services, profit, reasonable price and david there have been more reason than any time in two years. >> what do you have on "mad" tonight? >> i got so lungy. in the heart of inteleland which is ohio, the buckeye state, isn't that something? they should put it in west virginia and maybe manchin would have voted >> exactly >> and if he benefits middle east, they'll be the bank that benefits most. i happen to love the regional

banks. they are so good quietly making a lot of money. and no one -- first horizon? they want joey >> no. nobody wants jobby >> too early for jobby >> wasn't too early for zanga though have a good weekend. you know, whatio you have a god weekend. i'm going to get a haircut >> me too. y yeah, i got some grey, thanks, jim. the pursuit is on. the pursuit of outperformance at pgim. with deep expertise to outthink across multiple asset classes, actively managing investments in the world's public and private markets.

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u.s. bank. we'll get there together. good friday morning and welcome to another hour of "squack on the street. let's give you a quick look at markets. we're down on the s&p. nasdaq down over 1% and now down 10.5% for the year, which is only not even a month old. lei out just moments ago rick >> yes, david. up eight-tenths on december read for leading economic indicators,

exactly as expected and in the rearview mirror revised from 1.4%, to up 7/10ths of 1%. and to point this out, we did not have a negative month for the entire year of 2021. it was negtive precovid and in march, when covid hit. and that's the leading index of economic indicators. yields are making new low yields high prices for the week and we have a big expiration of historic proportions 1.3 trillion in single stock options. morgan, back to you. >> thank you we're 30 minutes into the trading session on the friday morning. here are three big movers that we're watching grier griering to p -- going to start with netflix shares are now down 24%.

we're going to have more on the numbers. and in the red, despite beating on earnings with profit jumping 23%, even though we saw softer volumes. and seeing sales grow across all the business lines as customers deal with supply chain issues. and cost pressures getting a lot of attention from analysts this morning. shares are down about 4.5% intel planning to invest $20 billion in a new manufacturing facility just outside columbus. set to produce advanced semiconductors this will be the first manufacturing site location in four decades shares are up half a percent right now. >> let's turn back the markets a rough start to the year. major indexes are all recovering they're actually back in negative territory on pace for largest monthly losses since 2020.

and great to have you hear wondering about your overall read in many respects we're getting what might be expected after a 20% gain last year, as earnings grow sort of steps down a little bit. what are you looking for, i guess, for clues that maybe this down turn might be able to pause for a while? >> so, i think the key thing is, like you said, the main driver for the software we're see today has been the fed's hawkish to it and that was unexpected, in the sense that it's going to do both taper stock and qt at the same time, all in one year, whereas the span of multiple years last time i think all the main thing i'm looking for is how will earnings play out and specifically, as you said, earnings have been strong for the last one year.

but the main reason for that was a goods consumption that weall did since covid. the interesting thing would be, to some extent, earnings might decouple from gdp. might be strong because of services rebounding. earnings could be soft because they have historically been driven the weak sales we saw last week was precursor of what might be coming down the road >> do you think there's outright down side risk to current year earnings at this point because the pattern has been massive beats verses the consensess even if this quarter, the estimates had not gone up very much >> i would say for this particular quarter, i think they're probably going to be okay because, like you said, i think the beats are going to slow down now, especially

because they were driven by this unexpected amount of goods consumption that happened. our baseline is we're going to be okay. but i think the risk said are to the down side. we're slightly above consensus for the earnings this year but that's probably as good as it gets. and that's important for the fed hike situation as you know, the start of the fed hike, actually has not been that bad for equities. but that's because, even though valuation continues to go down, earnings momentum continues because the fed is hiking to a hot economy. this time it could be little bit different because earnings have more down side risks, as compared to previous steps >> given the conversation and how you're analyzing this right now and the shift away from goods, space consumption, where do you see opportunities under the hood, if you will, across the major averages >> i would say, the usual metric

of looking for cheaper stocks, cheaper valuation stocks make sense. one other thing that's happened is although auto index is down, it's painful and stocks have had high value looking at different sectors, we think consumer discretionary, software, those are the sectors highly valued and that could have more pain in particular, consumer discretionary. we are underweight because i think that could have more painful slowdown on the positive side, the stocks that we like are financials. we also like fan max as a whole. because you could call them as growth stocks, they're really not cash cows in some sense. they should be more reiant in the current environment and we like the health care sector as the one defensive sector probably going to do better than other defensive sectors. >> given everything we're

talking about, does the s&p go higher or lower from here or hard to say because there's so much volatility to be had? >> our price target is 4800. in december, when we put that out, it wasn't that high it looks a little richer but that's where we're sticking for right now. there's limited upside, if any, to u.s. equities from here >> i know you also track retail flows and options activity and things like that a tremendous factor in the markets last year. i was hearing and seeing analysis that, just yesterday the afternoon sell off team seems to be retail investors in part is it going to be a retail and do you think that's more structural permanent part of the market >> that's a great question i think we need distinguish between two different retail investors. one is through mutual funds and

another, who invests directly in the stock market so, all the mean activity we're hearing, the same investors who invest in these call options and crypto, that's a different category now, the interesting thing is all the news that we've been hearing about strong inflows, actually came from retail investors, who invest in etfs and mutual funds it's a zero sum game and from what we see, they continue to sell in fact, this week we don't know what happened. but for the mutual funds are positive to some extent. for it's going to be a battle between these two investors. and if anything, the direct retail has done things in a good way. it's the fact that they continue to be selling is, i think, a sign that there's more to come >> thank you very much appreciate your time this

morning. >> thank you turning back to netflix, plunging after reporting lower subscriber growth. it's down 23% right now. it's actually the largest since july of 2012 and it is leading both the s&p and nasdaq lower today joining us is will pow and spg global principal and former netflix exec, simon gallagher. we've seen a flurry of down grades on this stock yourself included in the last 12 hours since -- whatever it is, 15 hours since we got these results. what was it specifically in the numbers and in the commentary that caused you to down grade to nump -- neutral? >> thank you for having me it's been a bit of a conundrum a company, that, on one hand, is in the pull position with industry-leading content

portfolio. but it's had a bonanza of new content launched in the fourth quarter, which demonstrated higher subscriber growth than 2021 and somewhat still below forecast didn't carry over to q1, to the degree we and others thought it would. i think the real question is what is the long-term penetration opportunity? and is it perhaps not big as we once thought there's still an ample growth opportunity ahead. but it's clear that's going to take longer to get there and i think our previous thesis had suggested. >> i want to get your thuts too. because we saw a number of hits and items, offerings on the platform that broke records, according to the company's own metrics. they see it as a head scratcher. and that's expected to continue at least through the current quarter.

>> look, i think it's an enormous overreaction this morning. i think if you believe in the long-term story of netflix, it's a media company that has changed the world in terms of the way people consume media and will continue to change the world they saw tremendous engagement with "squid game." terrific returning titles. new films coming out had their best performing two films ever on the service. ntd performs slightly. yes, there's the projections a lot but i still think it's certainly doesn't justify the correction it's had today, in my opinion. >> listen, nobody questions the success of netflix but this morning, you heard will say it, people are questioning how large is the ultimate market and not just for netflix but for company that i certainly follow closely.

discovery, merging with warner viacom we go from there disney and so, i guess my question to you, simon is, does this make you question just how large the mark is for direct to consumer, for all the people out there or whether they're getting what they need from all the providers and don't need to be adding more >> look, they're certainly getting -- in the u.s., absolutely they need a high water mark. and certainly made reference to this on the an excall yesterday, that he thought they're about two-thirds of the total high water mark for cable subscribers. the way he indicated there's an upside in terms of subscriber and undergrowth in the u.s netflix is the leader and the only service that has a true global footprint they've lowered their prices in india and continue to work and tweak the business model there they're also producing content

in over a dozen countries around the world. so, it's not just about the growth story in the u.s. and everyone needs to remain mindful of that. this is a global service it's going to continue to add subscribers in every corner of the globe. >> i know you don't want to get in the way of the selling here, perhaps, given the re-evaluation of the growth prospects for the company. but down 25% is that enough, in your opinion and what does the multiple look like on out years you have numbers for? >> it's a great question one of the reasons we decided to go to neutral is, even on expected weakness, valuation wise, it doesn't look compelling for tech names 22 revenue call it 40 ish times, 22 earnings that arguably starts to look more interesting at these levels a lot of the big tech growth

names are 30 times even compelling to buy at this levels and at the end of the day, market doesn't like uncertainty. and looks like uncertainty is the big over head on the stock >> i mean, the consensus for this year and nex year were something around 24 million net adds globally per year and that's getting stepped down base on the current run rate. i wonder what that means for the cash flow heading out of a few more years it doesn't seem as if netflix feels there's any real ground for a strategic shift in terms of content strategy. but does the down side guidance suggest they're implicitly saying they're getting a lower return on the content investment, if it's not driving new subs as they previously became accustomed to seeing? >> no. what we are seeing is that the two very important metrics n

gaugement in turn and their cfo called it out on the earnings call yesterday, they're as strong as they've ever been. so, it's important to make sure you're not just growing subscribers, but maintaining the subscribers you have all data suggests they're doing that well. that supports they're producing the right content for their customers. >> finally, will, how does this set us up for other media names and streaming platforms when we get those results in coming weeks? >> that's a good question. i don't cover all the other media companies yet to report but got to raise some questions with respekt to tam. and i think without question -- the other question that was the stronger u.s. dollar and what did that mean to other tech companies and with global enterprises? that would be a key element to

watch as we get reporting from the likes of apple and others with global footprints >> thanks for joining us today will and simon as we head to a quick break. here's a look at our road map for the next hour. peloton trying to pedal higher after the massive drop on the cnbc report. we're going to talk to a analyst who believes the stock is still a buy. and bitcoin getting battered already down more than 15% in the new year >> and blink charging announcing a new partnership with gm. we're going to discuss that with the company's ceo. don't think all about going anywhere

bitcoin tradebug low 40,000. hi, don. >> it went below 39,000 on an interday basis but if you look at the overall trend for bitcoin over the past year and we hit the high north of 68,000 and closer to 38 right now, you can see the move down 10% today. that move puts it at the lower level since august fifth to give you contexth about where we were the last time we saw these and according to data from coin market cap, you're talking about a mark cap near the highs and

closer to 727 to put it in context from a stock perspective. it's like losing two disneys in terms of market cap. that's how much has been lost. that's a fairly mild, and i say tongue and cheek here, mild move compared to what's happening with other parts of the crypto ecosystem. either down about 12% right now. meanwhile, down 15 deutsche coin holding up relatively steady. ripple down 11% as well. watch some of the smallerality coins. that's going to be more volatile and with regard some of the stocks, a variety of different reasons, there's negative sentiment. however, microstrategy is one of the companies most closely associate would crypto currencies you can see those shares up 12% today. meanwhile, they're down about 14% over coin base

robin hood's down about five they've been on a slide the better part of a year. still the bitcoin story playing inat the drops there as we watch the sea of red play out, the crypto side of things really does come down to whether bitcoin with a center of the crypto universe is going to be the one to hold up here. >> we're going to stay with that theme as well. looking at whether bitcoin is encroaching on a hedge of inflation. >> what was once an old is now being challenged by a new way of thinking hold bitcoin so, even though it's a debated asset class, it's often called a digital gold, out performing the s&p 500 and gold in 2021 for the third year in a row. of course, we know, as we mentioned, dropping to a low of

37,228 bucks gold hit a new high this wek but both gold and bitcoin overlap, which is why i made this lovely ven diagram. and you can see in the middle, they exist outside of government sponsorship, for both of them. pers perception is part of their value and a finite supply of both for example, goldman sachs analyst predict crypto currency will continue to steal market share, highlighting it already has 20% of the store of value market but what you see on the left has been close to zero over the past six months, especially this week despite that lack of correlation, new government regulation is expected to bode well for bitcoin's adoption. >> we might having more corporations moving, exiting, buying, selling and if we have

mock operate we will have a higher liquidity, which is going to thrive visibility to down >> but that volatility continues. as we know with the crypto currency falling 44% from the 52-week high, contributing to why wall street still remains divided on which is the better store value. mike >> as gold actually has acted a little bit better lately with bitcoin's decline. there's maybe a little bit of a see saw going on there still to come, we'll speak to one analyst keeping a buy rating on peloton, despite yesterday's dramatic drop and maybe because of the drop in price first, check out the biggest laggards on the dow so far this week most of the stocks are down. you see goldman sachs and disney both down about 10%. boeing, j.p. morgan and caterpillar rounding out the worst five we'll be right back.

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welcome back it's now time for our etf spotlight. down 1 to 1.5% top holdings include lindy, free port, but watch ppg today. that's under pressure, despite beating on the top and bottom lines. they say continuing supply disruptions, negatively impacted sales and operating costs. declined in auto and aerospace production, in particular, really dinging sales and ppg doesn't expect a rebound in leisure parts and car production until 2023 this is an interesting one to keep in mind those shares are down 2% we'll be right back. ♪ ♪

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welcome back here is your cnbc news update at this hour. secretary of blinken says his talks today with russia's foreign minister come at a critical moment. he says there weren't any major breakthrough tlonzs on the border with ukraine but says he thinks the two sides are on a clearer path to understanding their positions. this is not a negotiation but a candid exchange of concerns and ideas. i made clear there were certain issues and fundamental principals that the united states and our allies are committed to defend. that includes those that would impede the sovereign right of the ukrainian people to write their own future there is no trade space there. none >> after talking almost an hour and a half, president biden has

wrapped up his virtual meeting with japanese prime minister he said they agreed to cooperate on threats from china, north korea and russia and a tweet saying the bolt of heaven will be ringing with rock the singer, best known for his 1977 album, "bat out of hell" has died at the age of 74. and the associated press reporting that comedian louie anderson, has died at 68 he was being treated for blood cancer >> rest in peace to both of those entertainers i will say meat loaf, one of the greatest performers, in my opinion, of all time "i will do anything for love and i won't do that" and john got that stuck in my head this morning, so this is where we're at thank you. we're going to look at shares of peloton, this after cnbc reported they're temporarily halting production in light of weaker demand partnership.

the company's ceo saying, quote, rumors we are halting all production of bikes and treds is false. let's bring in lauren thomas it was interesting because he did come out swinging mr. foley with his response but he did say the right sizing their production and that we are, quote, resetting our production levels for sustainable growth. you've been doing quite a bit of recording. and the latest drop in stock, given some of the bad news we've been seeing. >> essentially what i'm discerning from the memo, he's been very choice with his words. he says reports that peloton is halting all production are false. that's not what we reported yesterday on cnbc.com. what i obtained in the internal documents is peloton is planning

to temporarily halt production of products and essentially pausing production of the bike, the bike plus and the tread at various moments in time in the months ahead we outlined the timeline in our story. what i take away from this, again is peloton is in a moment where they need to reset that's likely going to be employees. there was mention of employees and you know, this is aump ken that saw so much demand at the onset of the pandemic and it's not seeing the same demand today. so, like any business in this position and peloton now needs to reset >> and obviously, moved so quickly that maybe no company could beects pected to stay exactly where demacnd was going

to go. but during the high demand period, this company did make a bet in terms of adding volumes and making acquisition to add manufacturing. it seems as if, at least implicitly, peloton thought the run rate of demand and after the pandemic would likely be higher. >> yeah, absolutely. and you've even see that the company has made internal forecast but over the course of months, it's repeatedly lowered the internal expectations. peloton acquired precord at additional manufacturing capacity to the business it recently broke ground on a plant in the united states that's going to be in ohio that isn't even expected to be open until 2023 or later at best all those were put into fruition

when peloton was seeing unexpected growth. that's not happening today we've seen a number of down grades, whether it's price ratings on the stock everyone is trying to get a grip of what is the new normal going to look like for peloton going forward? >> and the new normal for many of the names that benefits from the so-called stay-at-home trade we've seen in the pandemic great reporting, as always we appreciate it our next guest maintaining a buy rating for the stock joining us now, bernie, great to have you back on stocks jumping to 5% right now but we're still down 80% over the last 12 months why do you say it's a buy right now? >> we think it's attractive at these levels first, obviously, maybe talk about the down side first. we think the floor for down side

is trading one times revenue that way it's trading like a hardware company, like a fitbit, or how gopro has traded in the past and that's missing the subscription piece of the business, which is 33% of revenue. over the last 12 months, they generated about a billion dollars in subscription revenue. we have growing 20 or 30%, still, despite the massive cuts we made. but 70% gross margins on that subscription revenue we think, if you're doing a sum of the parts valuation, yod look at software comps and it's still 15 times is the group average of what we're looking attop it's looking a that risk/reward and thinking we're certainly a lot less down side, as you mentioned the 80% pullback in shares >> key point you're making there.

and it shows and this is sort of a forward-looking indicator that shows demand and what we're seeing with the inventory piece and hardware piece of the puzzle at peloton do we have that chart? yes, we do this chart really shows the drop that we've seen recently in demand for some of these machines and of course, you can see that -- you saw the demand spike in the midst of the pandemic now that's been cut by more than half it is only half the story but when you have the ceo talking about right siding prooduction, how does a chart like that speak to the adjustments we see and potentially how much noise where production is concerned for peloton? >> i think we're talking about -- this isn't the

production issues we were talking about last year, where they weren't able to make enough goods. now we're talking about the demand side of the equation. on demand, we assume deliveries have peeked and we've been declining every year in the future and that gives us, i think a bit more clarity or at least sense that maybe estimates are getting conservative at this point. prior, we're hoping we're going to go through a low in 2022 and maybe in 2023 or 2024, the demand would reopen again. we're taking a much more conservative view to our model and that's why we feel comfortable talking about floor values because at least our estimates are washed out at this point and that's why >> just looking across your coverage universe, how much of this is a peloton-specific story and how much is the reversion of the mean, if you will, that

resetting or quote/unquote normalization in stay-at-home names as we start to see the economy emerge from the pandemic and a shift, potentially, from goods to services? >> yeah, you don't need to look much further than laura martin has had a great call on netflix. that stock down quite a bit today. we went through last earnings period, where stocks are trading off, based on fundamentals then the macro trade off from november to now and the question is which companies can comp covid? and it shows estimates are going to be increasingly important one company we feel good about being able to cop the cop is doordash and uber as well. we're bullish on delivery. all the consumer checks and survey work prove it will be sticky post pan domic. and especially with them adding

new verticals like grocery seems like grocery stores are changing how they set up the business to account for more delivery within the business so, doordash is one that's certainly a covid beneficiary but we feel good about >> appreciate your insight thanks for joining us today. >> thanks for having me. after the break, we'll hit the outlook for evs with the ceo of blink charging announcing a new partnership with gm this week and markets have been jumpy. there was a low in the s&p 500 just this hour it was below the 200-day average and down from its high now down about half a percent on the day. the nasdaq still underperforming with names like tesla and netfx.li we'll be back in three minutes

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blinkcharging announcing a

partnership with gm. they're out fronts for customers. joining us is blink charging ceo and founder. michael, what does this deal mean is it sniignificant importance n terms of sales for your company? >> yes, and validation in general. >> why >> having gm select blink cing o servicing the cars and they went through a vetting process. i think there's tremendous validation for blink charging as a company. >> what does it let you do in terms of the validation? again, for a company still in the early stages, what did you have last quarter? 6.4 million in revenue where is this going to lead? >> there's 4600 dealerships in

the territories we're working with them on look at 10 charging stations and the numbers are astronomical and gets our charging stations out in front businesses not selling equipment where we generate our recurring revenue revenue through the sale of fuel, energy this allows us for more customers to know who we are, more dealership level face-to-face sales it works in our favor across the board. and thissent the only one i work with the best way to understand what they've been accomplishing is download the mobile app, go on the web portal zoom in on our map and look at a list view and you can start seeing carmax, auto nation, even

audi dealerships that have blink charging stations in them. >> to your point, michael, in terms of the deployment around the country of the stations that are going to actually start generating recurring revenue for you, what are the expectations, let's call it, for the end of the year, in terms of how many you have out there, verses right now? >> substantial growth in our business a lot of people are unaware of the fact that just because they build back better has not gone through, the money for charging stations hasn't been approved. that's not the case. $7.5 billion has been deployed and ear marked we're going to be able to take tremendous advantage of the capitol for us to deploy charging insfru structure. it's extremely exciting times for us and again, having our chargers

at the point of purchase at the dealership level, like with gm, gets our brand out there allows those to know that blink is one of the leaders in the infrastructure charging space. >> it's morgan we talk about that recurring revenue model and i guess the importance of the money maker that is the sale of fuel or energy as you put it given the fact we see energy prices at multiyear highs and how does that translate to the prices that you're charging consumers that are going to be using your stations? are you able to pass all the cost on and is it still easy to get that energy, electricity as you continue to expand your footprint? >> there's no problem getting the energy for our charging stations i'm not sure if you follow but recently, british petroleum came out, who owns the charging stations and says the profitability on the charging station will outweigh the

profitability on the dhcharging pumps. there's a tremendous amount of switch over and blink has positioned itself, not only on the recurring revenue sales model and with gm, which is selling hardware we're the only fully vertical charging ev company in the united states. there are those that sell hardware, those that sell networking services, throws that sell both and then you have your owners and operators blink is the only company today that, not only do we design our charging infrastructure specifically at the needs of our customers, the network the charging stations operate, which is compatible with any hardware that complies with the ocp, the protocol and standards, we're able to put that hardware on the network as well. blink owns a substantial amount of its charging stations we believe the long-term most

viable component is fuel, where we have long-term exclusive contracts for many years, whether it's 15 years or 20 years in length, where we're the sole provider of ev charging services, whether it's ev bikes or even flying drones that are going to land in the future. >> looking forward the flying drones you have enough cash, by the way too, make this happen or you have to raise more >> right now we raised about a quarter of a billion dollars early last year. we've been pretty stingy spending the capital we have quite a runway ahead of us obviously, a lot of our growth has been done through mna. unfortunately, with the stock price being the way it is, it impacts it and we see a lot of growth, both organically and throughout positions >> thanks for the update >> thank you for having me >> coming up in the next hour,

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check out the biggest laggards on the s&p 500 for the week netflix, moderna, applied mat materials, ford and discovery at the bottom of the s&p for the week stay with us

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grocery filling the supply chain pinch and tony is joining us now tony, take me through the whole chain if you can quickly from the manufacturers to you the distributors to what you're seeing in terms of getting stuff on the shelves what is the impact right now of omicron as it continues to spread >> so couple points here we are uniquely engaged in navigating all the supply chain disruptions. we run 150 grocery stores and service a significant number of military commissaries across the globe and provide 2,000 countries. it's been a unique opportunity for us to learn the last couple years. the effects that you mentioned about both the supply chain disruptions and the inflationary effects that are related they are coming from one primary source and that is the tight

labor marbkets manufacturing, trucking, our shops and the retail stores that has forming the disruptions and dealing with the labor crisis right now has caused the inflation that we're seeing. >> so, it's not so much the virus, which we could imagine, you know, spike in cases, people are out for a little bit would seem to be a longer term problem if you can't get enough people to be hired to fill the jobs >> i think that's right. i think the effects of the virus are now having much smaller effect than the effects of trying to get the people to do the work to drive our economy. some of that has been caused by the virus and the pandemic and dealing with people who have taken themselves out of the workforce as well as the policies and people do sampling of jobs and that has caused disruptions in a lot of industries >> we're seeing the tightness in the labor market and i know we have spoken to you about this before actual food prices and

from an inflation standpoint how you're navigating that right now. >> yeah, great question. we're seeing inflation in every aisle and one thing that is crystal clear is that no category and no business is going to be immune from the inflation or supply chain disruptions. we're navigating it by working hard with our suppliers and get the best price when we can the fact of the matter is they're experiencing cost increases that are extraordinary and they're going to pass those on and we are dealing with a number of tools to try to minimize the effects of that with our communities that we serve. so, amongst those i'llgive you a couple examples. on one hand we announced earlier this year that we're going through a supply chain transformation make our supply chain more resilient to deal with some of the issues we're facing and what we will continue to face we're going to be announcing within a couple days we have extended a partnership with an organization we called coastal pacific to reposition a lot of our goods through their warehouses for our west coast customers. that effect will have us be more predictable and more able to supply those customers in a more

effective way and also pull our costs and pull out 7 million miles out of the system and reduce the emissions of greenhouse gases by about 10,000 metric tons. good for our customers and good for us and good for the environment. that's one way we're dealing with that. what we can do to provide a buffer for these issues for our customers. secondarily, i think -- i'm sorry. go ahead >> you know, tony, we'll run out of time here so, i apologize. but we'll have to end it there always appreciate the update, though and, obviously, a story we're following closely. thank you. >> pleasure's mine, thank you. >> as we wrap up here, did get another look at netflix and maybe off the lows is the best you could say had been down as much as over 25% first day it has been down that much since 2004. >> says something about this market that you can't have a $200 billion company and have that kind of air pocket and also says something about what it means for the long-term growth

trajectory overall market trying to use it as an excuse and market got oversold and hit the 200-day average on the s&p day isn't over yet we'll see how it goes from here. >> well off the lows disney shares have been down as much as 7% on that and netflix missed on guidance back a bit morgan, over to you. >> dow turning positive, still poised for a down week that will do it for "stock on the street." "techcheck" starts now. >> good friday morning and welcome to "techcheck. i'm deiidre bosa with john fortt. netflix