kick or a tender kick? and it's florida versus disney the sunshine state's governor wants to strip the entertainment giant of its self-governoring status it could mean tens of millions of dollars a year from disney. it's wednesday, april 20th it's an anniversary of sorts details on "squawk box" straight ahead. ♪ good morning and welcome to "squawk box" right here on cnbc. we're live from the nasdaq market sight andrew ross sorkin along with joe kernen and melissa lee look at you. thanks for joining us this morning. >> good morning. >> hello, hello. becky is off today we're still 3 1/2 hours before the market is set to open, if we

did it now, dow would open at 43 points higher. nasdaq off and s&p off by about a point and a half treasury yields, though, our favorite topic. >> sitis it? streaming might be it today. >> got close to 2.9. got to near 3. now 2.884, and the two-year, those of you who know different inversions, 2.5. let's talk a little stream. >> yeah. the story of the day here. netflix stock tanking after the company reported its first loss of subscribers for more than a decade to be exact, subs were down versus an expected gain of 2.7 million. even 700,000 subscribers lost thanks to a wind-down in russia, the report clearly a shock to investors. netflix reporting a loss of 2 million subscribers for the

second quarter after earnings reported t ceo reed hastings is open to offering lower priced tiers with service and advertising. he said that wouldn't likely be an option for a year or two, blaming inflation, competition, russia's invasion, and password sharing, estimated 100 million households are getting the streaming for free due to shared log-ins. here's hastings on that company earnings call. >> working on how to monetize sharing. you know, we've been thinking about that for a couple of years, but, you know, when we were growing fast, it wasn't the high priority to work on now we're working super hard on it remember, these are over 100 million households that are already choosing netflix they love the service. we've just got to get paid for some degree to them. >> nightmare numbers sent other

streaming stocks falling disney is down 5%. warner down 4% roku down 6% this is a huge pivot, and the question here is how is it priced after the fall? are the best growth days behind netflix? and can it actually do all these things hastings outlined on that call in order to restart growth in that fashion. >> i had so many thoughts. 700 was the high on the stock. i don't know what the market cap was there. but it's down to hundreds and change at this point it looked like the greatest growth, $500,000 that i wish comcast would have bought when we had the chance but never did. then a lot of things hastings sachld he's made definitive statements in the past that netflix will never do or wornlt

do or doesn't make sense there's the old saying what do you do when the facts change you change the facts i'll give him that it would be a little bit humbling to say we'll never do advertising. now we want to offer as many solutions as possible. shares are not a beg deal until you're not growing 700,000 in russia. what do they watch in russia do they send a couple of missiles and turn on bridgerton. >> how does that work? i guess it's not the russian people and then finally, finally, andrew, for you, i watch netflix for maybe a half hour. the entire half hour i'm going along the little things, okay, this is trending, no, no, no, n. >> the question is why don't you

quit the service >> i might i might and stick with peacock the danish crime drama aren't doing it for me. >> i told you, "the tinder swindler." >> again, it's too real. i want to go back to yellowstone. i want to see rip again. >> but the question is -- that i wonder is -- >> and that was pea dock. >> is this an admission, not a mistake on the advertising fund but the price? >> if they had raised prices >> if they stuck at 2 or the 3 bucks less, would they have seen churn? would they have needed a conversation at all? he does believe genuinely in his hearst that the subscriber experience is going to be better without advertising.

on that score, it may not be wrong. >> a minute is just a minute it allows me to gather my thoughts three minutes, four minutes. >> it's the opening. >> the opening they got their pay it forward with the pandemic. let me watch you this? didn't you think it was in elastic? oh, yeah if you don't have the content, and i've been come plank about that -- >> now it's get coming pettive as a parent with small children, for a long time the reason it was in elastic and i going to say it terrible, netflix can act like a babysitter for children for a half hour. >> why not disney? >> now there's competition you would rchlt havn't have netx

when adults watch adult shows at night. >> does this open it up for other streaming services or does it say the entire space was over-- >> i think it says -- the model of -- >> the subscriber. >> i was going to say the amount of amazon -- net flick has been buying, it's part of a volume problem. they're spending so much money on content to make stuff that unfortunately not a lot of people are watching that. >> it was acknowledged on a call yesterday. we need the equivalent of a "bridgerton" every quarter but they about the spend that that would entail. >> could you come up with an example other than "bridgerton?"

>> i'm not he does. >> "house of cards," i'll watch a lot of stuff. >> "the crown. >> the equivalent of a account house of karsd," something that will get people to stay. can they actually converts or get it to subscribers? that's the big question. >> that's crossing the rubicon will they? >> they will the problem is it's not going to happen for another year or two they have two issues they have technology they're not an ad sales organization that's a whole other project unto itself. >> so what's cnn plus thing at this point if the best streaming service lose $2/00,000 that was a tough time to launch.

shouldn't they have talked the zaslav before they did that? they should have said, dave, do you like doing this? >> i don't know what they were doing. >> you're very nice. >> no. my view is they were doing it -- i don't want to say to jam them but effectively so i its had to start to force the issue. >> how about that. that's oak we have research greenfield on was j he like, nemg felix is his own forever guy. >> okay. let's see -- >> -- if he's in the same place? yes. >> would it affect universal, the theme park, if they pulled the tax benefits from the whole orlando region >> no. this law is specific to where

walt disney world is. >> i'm trying to foig fib out, had to get rid of a law that applyer loued dismy can world. ron desantis didn't mention disney by name but lawmakers would consider terminating all special districts enacted by florida in 1968. >> i don't know. >> could you find out, please? >> the government at disney was created in 19 and opposition so-called don't say equity bill. disney did not lobby publicly against the bill when it was being considered, instead emerging as a critic after passage and obviously we -- who

are with kidding we work for comcast and nbc, part of what comcast owns. we would never base it on -- i kin. >> now it's become completely criticized what dow you think of that. >> but i do kind of agree. you have a governor stick his hands in it and at other times you need the hans-off approach i kind of understand it in this case the they want to tread into things like this, they're free to do so because they're free to do things that they want to do, right? >> disney gives a lots of money to its candidate in flr. this might be a gesture as

opposed to something that could happen. >> oh, no. i think it could happen. do you think that could happen >> the problem is you can't move it. >> the disney stakeholder, that's wide. the employees, people from all over the world that goes down there. it's an important thing for florida also if there's 100,000 employees on this -- >> right they're voigters also. >> -- they may be mad at the way an employee is treated. >> the people who are mad are those who are effectively trying to politicize it

>> once again, it could be people on both sides. >> the parks are full. disney launched an app supported streaming. >> they did. >> peacock has said -- i'm fine with it's got a little thing. i can see how mihm tiest've got to put in. it' it's very, very long, not like "squawk box" with all the kmeshlgs for "squawk box" it's worth it >> go to "squawk box." >> every minute many do not sell twitter. we'll share the reasoning behind

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and present, can continue to get the tools they need to build a future of unlimited possibilities. it's elon musk's favorite day of the year. dina free marngs ceo of nasdaq and the world's richest man is

offering up another brain teaser ahead of it. late yesterday musk tweeting blank is the night the word tender would make sense to put there as in the end der is the night maybe an innocent reference to the is scott fitzgerald novel or maybe other aspirations of elon to take over twitter tender is the night. >> tonight is the night? >> today's the day, 4/20. >> tonight could be the night, tesla's earning night. >> it could be 4/20. he likes teasing people about 4/20 54/20. why did i -- why is that our two-year anniversary to come back to the nasdaq >> 4/20, i don't know. when i wa-- you were with the

s.e.c. when you -- this is our day. this is our day, meantime take a look at this in a letter to the twitter board chair, the leader pressing them not to sell to elon musk he writes, harmful data sharing and digital discrimination owning we know transitioning ownership and sealing it that are so important. joining us right now to talk about that is mark more yell himself, national urban league and former maier of new orleans. good morning. >> good to be with you frmg good morning. >> it's great to see you this has become politicized. you have something to say about this

what is the right answer is this about any individual owning the company how do you think about it? >> twitter is no ordinary company. there are 217 million daily users, 4.5 million in ad revenue each and every year. a unique company in terms of how it talks about news, politics, and public opinion what concerns me is mr. mosque's own statements that the twitter content. it seems to talk about voter registration, algorithm and bias and we worked hard to adopt these, that they're shouf free speech we think the twitter board has the right and responsibility to consider some noneconomic

factors such as how this would impact the society at large if all of that were allowed back on the site that's what's at large they're at the center of this discussion it is not free speech to allow race and religious hatred to proliferate twitter. it's not free speech to announce it so that is the issue at hand you know, we very rarely taken such an aggressive posture against the transfer. >> to be clear, specific to mr. musk, you look at a company lice face boorks addenda-class owned by an individual individual with mark zuckerberg. >> i think the distension is mr.

musk's own statements in relation to content moderation policies and our concerns he would not protect -- if you will, the site would not operate in a fashion that createses iti-- creates its own options. some of them have made great progress the board has a right, we think, and a responsibility to consider that as they consider this offer. they made the other offers, but the board has to consider this. >> marc, would you concede the algos have already been screwed snup i think he's responding to the way the content moderation

has been levied at the company in the past in a totally i would say capricious and biased way, and that's what got him inner jieds in the first place i don't think he looked at it and said, wow, i want to have a bunch of horrible stuff and it's not on here, but i think he looks at it. there's no way these are fair algos. we want to stoop the hate speech >> that's a point of view some may indeed hold. but the point is mr. musk's own statement that he does not support the monetary if he gave assurances that i had

would not come back on the site. i don't know we don't know mr. musk we've not spoken to mr. musk we would to love have a conversation with mr. musk every. one of the most powerful people in the pain. to be able to teenage droel of sis. in ee effect, like it is his own. these are broad questions. these questions are important when you're talking about a publicly tradedtraded. there's a broad, broad interest here and we hope there's going to be a discussion, debate, and that it carries every other

option. >> to be fair their, we note with your discussion let's put that aside for one doesn't that underscore the larger issue you don't like musk and what he has said about the plitter platform and doesn't support that's fine. right now you may agree with how it's being run by a board in silicon valley, but you may not agree with the next owner. isn't that the larger issue? it shouldn't be about elon musk taking control it's the notion that you have a very good moment.

the point is ele elon musk has put himself in that box. >> did we have that conversation when he took over "the washington post," for instance >> they're -- there are 227 million active users twitter is unique, whether it's facebook, twitter, youtube, they have cornered the market both with stiezing and active users people like twitter. they like what twitter gives them the opportunity to do we have to stand up. this is about mr. musk's own

statements it's not an endorsement of how twitter is being run as such there has got to be strong content policies these companies are operating with scant or no regulation, and, therefore, we have to ensure that they police themselves. >> mr. mayer, we want to thank you for all of your message this morning pochl powerful equities. it sounds like they may be beginning new sign much more coming up. we'll ask dr. scott gottlieb what americans should be thing on whether whether or not they even chaenchd. don't go no anywhere ey switched off egfr gene mutation and stopped the growth of tumor cells.

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america's largest pension

fund will prepare a fund to replace warren buffett they disclosed its vote ahead of berkshire's meeting at the end of the month calpers holds $3.2 billion in the shares he would remain ceo even if it's adopted. it comes amid an argument that the roles of the chairman and ceo are greatly diminished when a person holds both jobs berkshire opposes the campaign. >> that's not going to happen. >> yeah. he owns 32% of the shares. >> that's not happening. coming up -- it's a nice -- i don't know if it's nice, but -- masks are off on airplanes even as biden appeals a key desichlgs we're going to talk with dr. scott gottlieb.

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the biden administration announcing its plans to appeal the ruling that lifted the federal mask mandate on public transportation if the cdc decides the order is still

necessary for public health. joining us now, dr. scott gottlieb, former fda commissioner and cnbc contributor, also serves on the boards of pfizer and alumina the cdc is the expert agency, scott, on this, but we pointed out in the past kind of a -- i don't know people have different feelings about the s.e.c. after the last couple of years, cdc after a last couple of years, but maybe watching the airlines one after another rush to basically remove the mask mandate, watching uber and lyft rush, was that based on a judge's ruling >> i think the cdc should have lifted this ordinance when it was up on april. i think the government isn't going to appeal it the doj appears to be lukewarm

they don't want to risk losing the 11th circuit that's part of the problem, part of the basis of the judge's ruling people are made to feel vulnerable and some people that are made vulnerable, especially children under 5 who have health conditions and can't be vaccinated, the masks were providing less protection than a lot of people presume because they were wearing cloth masks. for people who feel at risk, one way that masking still works if you feel vulnerable and wear a high-quality mask and you wear it well, it will afford you some protection but the brunt of the implications are not the immediate impact on public health it was clearly time to lift the mask mandate the time was april 18th. that can be solved not by appealing it but by the cdc taking action. they should go through a careful rule-making process.

it could be solved by the cdc being a better agency. make policy through rigorous transparency, science, and rule making they didn't have a good administrative record in place was part of the judge's riling in this case she cited they didn't have a good administration record. >> just in terms of how you view the ventilation and everything else, is an airplane with all the things that they've done, the cabin of an aircraft versus, let's say, we have ipos here, there's lots of people in the lobby right next to each other they're packed in there and there was no mask mandate for that is an airplane because it's recirculated air, is it better -- more dangerous or less davis in terms of contracting germs than just a normal indoor setting where it's really crowded? >> look, this is the way i think about it the risk of contracting covid if

you don't have good baseline immunity through vaccination or prior infection is proportional to the risk of the seth you're in if you're in an area with lot of people, that's going to be a hire rink than an environment with few people versus an environmental with good air circulation. an airplane in the air has good air filtration systems the riskiest part of the travel is probably when you're getting on and off the plane, when people are bunched together, the air filtration systems are turned off or you're standing in a tight place in the airport. >> scott, let's say you have a tight-fitting n95 or kn95 mask on you have one on. what's your level of protection, and would it be significantly enhanced if you and everyone around you -- is it better if you have it on and tight

fitting? sit it worth mandating that for anyone or is it just for you if you decide to wear it? >> if everyone around you is wearing a high-quality mask, that's going to improve the overall safety of the environmental. but if you have a good-fitting mask on, high-quality mask on, you're going the afford yourself a high quality of protection people who feel vulnerable are going to feel protective in that sitting. one way masking does work, the exception is young children who can't wear high quality masks, can't wear them well i think one way to think about it is if you want to provide yourself some protection on the journey, wear a mask when you're getting on and off the plane, a high-quality mask. for brief periods, you can wear it all take it off when the air filtration is on and you feel the air moving >> we keep talking about airplanes where fondly enough the air circulation is -- it

seems better as you were saying when the planes are in the sky, not always clear when they're on the ground but let's talk about trains, subways, public buses. i don't know what you think about ubers and the like hochl u are you planning to nash gate that yourself personally >> yeah. there's no question trains have poor air circulation in its system i've discussed this with others. in a car, prevalence is low, maybe 20 cases per 100,000 people per day because we're not measuring a lot of the cases that are current so the likelihood that that one uber driver is going to be infected when you're in the car with them, that's pretty low on a train, it's a hire seth because you have alot of peopl in place with poor circulation i'm going to still wear a mask where i'm in a confined space

with a lot of people around wrrk the incidence is hire. when you're in flight, air circulation is pretty good the risk isn't on immediate risk of public health it was time to lift it and what this does to erode cdc's authority. what they should do is go through the rule-make progress says to relee on other parts of their statute. they need to set up these vulnerabilities. they give you a basis of comparison in the last 25 years, cnb kris lifted 21 regulations. over that same time period, it issues more regulations, but we always went through the development of a careful administrative record when we asserted authority so we could withstand court challenges the cdc doesn't do that. they issue these orders without a careful administrative record.

i mean the judge at least in part cited that in his ruling. >> scott gottlieb, one more question so covid, you know, to say it's over and behind us we may never be able to say that it may never be accurate. in one year, three years, five years, ten years, do you see a number of people who have a mask with them? in other countries, you see masks being much more prevalent than here. have we been fundamentally changed where 5%, 10%, 20% people are going to have a mask toe if they hear someone cough next to them or they see someone that looks like they're sweating or feverish or something could you go along with mask

makers forever j&j isn't even going to make the vaccine as much. do you think we'll be using masks? >> i think it's going to be more culturally acceptable than it has in the past. we started that with sars 1 where mask use during the previous seasons became more common. >> that was after sars. >> last piece, scott we were talking about it yesterday. s who response when people are sick and you're forced to travel, you're going to to be the one forced to wear a mask. do you think we're done with that i did a twitter poll interestingly -- i said, if you were anythingly sick and traveling, would you wear a mask even if you had covid?

20% now that the mask mandate is on, they would have no problem, get on the plane with covid, no mask i'm not sure culturally we've figured this out yet. >> the recommendations have always been around flu, that if you have to go out, it reduces the risk of transmission i think a lot of these recommendations are going to be enforsd. hopefully we're at a point where covid is not going to be spreading with the same velocity and intensity it has in the past we don't know. but it appears to be evolving in ways that are less serious hopefully once it becomes mandated, it leaves room for people to do it on a voluntary basis. when they're no longer forced to do it, maybe they'll be more willing to voluntarily do it. >> scott, thank you.

always great to see you. >> thank you you bet. we're coming right back.

with momentum behind the drive to legalize marijuana, why are pot shops getting smoked frank holland joins us with more good morning >> obviously a lot of excitement

about 4/20 and the fact that 250 million americans have access to recreational cannabis. it's the holy grail for both the u.s. and canadian operators. there are four bills being considered in congress that would allow u.s. operators to list on major exchanges. but obviously the chance of any of these bills passing both chambers is unclear. the stocks of the u.s. multi-state operators, the companies with the license to sell cannabis in the u.s., even with all the momentum, they're down i spoke with the ceo of cresco labs he said they'll have a tax rate as high as 70% they can't take out most business deductions because cannabis is federally el legal

he said immediately it will increase cash flow and profit. that cost of capital is a major issue for u.s. ngos. it's part of their motivation to acquire investor partner with u.s. companies ceo says it would dramatically change the company's valuation. >> the most immediate change is we would take over direct control. right now we don't have direct control and we don't consolidate those results into our future. >> so keep in mind even with legalization or some type of reform, states would still control licensing and regulation, according to steeple.

the reform would increase sales by 5% to 10% in the first year maybe not as much as a lot of people think you also have to remember, the legal sellers face very stiff competition from the illegal market joe, back over to you. >> yes. >> yes, frank. >> i'm not a doctor, joe >> i don't even think you play one on tv. do you at this point >> no, i don't even play one on tv my favorite basketball player used to be dr. jay >> i played golf with dr. jay once, nice man but i'm not a name-dropper "squawk box" will be right back. ♪ ♪ nice suits, you guys blend right in. the world needs you back. i'm retired greg, you know this. people have their money just sitting around doing nothing... that's bad, they shouldn't do that. they're getting crushed by inflation. well, i feel for them. they're taking financial advice from memes.

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dowfutures this morning adding to yesterday's gains. major averages coming off their best day in a month. this amid rising interest rates and commodity prices so why are we seeing this resiliency joining us now stephanie link and anstasia amrosa. what's your take on this sort of rally? have you reached your sort of peak rate hike talk at this point especially since bullard dropped the possibility of a 70 point basis point hike >> i think it's really interesting the markets have been fairly resilient. they're down 8% from the recent highs amid the surge in interest rates, and the surge happened because it wasn't just the fed becoming more and more hawkish, but it was also some of the other central banks including

the ecb. and the reason why i think we could see is a bit of pause in rates here is because as you say a lot of max hawkishness from the fed has been priced in but also we don't have ecb meeting on the calender, boe meeting on the calender so we have a few weeks we're not going to have any surprises and by the way the earnings season so far has been coming in better than expected. so that should give the market some more resiliency i think in the coming weeks >> we're still early, very, very early in earnings season as we all know, and stephanie netflix this could show how big tech and

the impact of one stock could have on the s&p 500 overall. what's your take on whether or not big cap tech will kind of take this lead of throwing in the kitchen sink they blamed everything, inflation, the conflict in ukraine, et cetera, et cetera. it was a long, long laundry list >> it was a long laundry list and the second quarter in a row now of a disappointing report. and i think this is a total stay at home beneficiary. now it's coming to roost, right? it's coming back to haunt them and there's all kinds of competition. so i think this actually is a message for any of the stay at home winners to be careful you have to look at valuations, and many of the stay at home winners are not cheap. many of them don't even have earnings, so i think there are winners and losers in technology, and i think you do want to focus on certain total

adjustable market stories like cyber security, ai, data center, 5g there are places to play in technology in all of those themes, but you really do want to focus very much on valuations >> all right, we have to leave it there thank you so much for joining us this morning, coming up much more on the netflix nightmare, an actual loss of subscribers, the first in over a dedeca we'll talk about the options open to the streamer when "squawk box" returns

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that's life well planned. call it the streaming smack down netflix shares destroyed as hundreds of thousands leave the service. where did it go wrong? a break down of the results is coming up. a big fight brewing at the magic kingdom. why florida governor ron desantis has a bone to pick with disney and dow and s&p futures in the green again. and the second hour of "squawk box" begins right now.

good morning welcome back to "squawk box. we're live from the nasdaq market site in times square. take a look at futures this morning. show you where things stand. right nuwe're looking at a bit -- i don't want to say mixed picture because the nasdaq is off. straight over to dom chu who's looking at this morning's premarket movers i imagine including netflix. good morning to you, sir >> so i would talk about netflix because i know because i've got some behind the scenes insight you're going to be talking more substantially about netflix in just a few minutes here, so i'm going to stay away from netflix because i know you guys are going to go big into that. i'll go into some other related names, alphabet and amazon

the reason why they're in focus right now is because analysts over at citi group have put amazon, they've initiated coverage there with an outperform buy rating and also put it on their focus list they think amazon has a leading position in e-commerce, also cloud computing, also online advertising. amazon has been on the focus of citi and alphabet updated to buy as well and more operating efficiencies happening with regard to the youtube business overall. those stocks in focus so analysts over at citi having a big move there and twitter shares actually accelerating a bit, up just about 1% interesting elon musk the founder, ceo of tesla in his bid to maybe try to take over the company has tweeted out

something again, somewhat cryptic. basically all it says is blank is the night you can maybe fill in the blank and say tender is the night and that hints at that offer there and then we'll end with what's happening with lululemon, and those shares up about 2% right now, up 4% yesterday that move off the lows there comes a bit more on some optimism it'll accelerate its business, and this morning new news out with the company saying it wants to grow its overall revenue profile doubled over the course of the next five years. if they can get to that point, they would be on track for a $12.5 billion rev newel year by the year 2026. they're making a lot of these comments about their long-term growth profile ahead of annalist day coming up. so they think that some customer spoorns issues, they think some

product innovation and new product offerings will help propel some of that story there. andrew, i know you and joe both like the pants i love the pants, but as you can see here i'm not allowed to wear them when i'm on-air >> i've got new ones for you i think i've talked about this on the air before. i'm wearing some ministry of supply >> that's high end stuff >> that's redundant in terms of andrew >> but it has the sort of stress that the lululemon >> they look like dress pants. they even have belt loops. >> i've heard a lot of good things about ministry of supply. the other two ones i've been asked to try out or look into are bylt, b-y-l-t and public wreck. so i've got a couple of shorts

and pants i'll try out this season obviously not here. >> do we have the rainbow animation, the more you know >> it's a public service >> it is, guys >> we don't get a commission on any of it. >> no, i don't make any money from any of this stuff i don't endorse it, but i'm telling you as a matter of fact i own these clothes and i've been asked to try them out >> by whom >> some of the folks out there maybe in my golfing circles who say hey maybe you should check out these pants if you talk about lulu all the time you can check out these pants. >> you've got the domino you can get them on stocks and fashion advice >> we've got earnings proctor and gamble the consumer products giant reporting profit about top consensus forecast and p&g

raises fiscal sale guidance. so we are seeing shares up by 2% in the premarket session they also addressed head winds which is interesting given that the dollar is at a 20-year high against the yen. 2 percentage headwind expect to hear this more from multinational companies in earning season, but for now p&g shares >> 2 million subscribers, that's what netflix says it expects to lose next quarter. a slew of downgrading moves today to neutral or even sell lower price targets. i love it. >> look at those price targets 605. what was he waiting for? >> i know going to sell at 250 it's awesome that's why you need these guys to figure out what to do with your portfolio

including jp morgan moving from 300 from 605 why would you get cynical about the investment business? sarah fisher, co-founder and partner of light shed. just for starters i'll start with you, sarah. we like to keep things simple. we talk about like ten different things that are affecting netflix. is it just cliche to say content is king, or are bowling alleys really crowded and miniature really crowded right now because we're reopen there are other things to do other than watching netflix. >> it's true content is always going to be king but the bigger problem here is competition you're seeing some of these big streaming services like disney, like hbo max finally invest in

new content. and they're starting to invest in overseas markets. net publish had an advantage when it started to invest in localized content far ahead of its competitors. but they realized that opportunity is ripe if they put the content investment interest. you're going to see a huge expansion this summer from disney plus, hbo max finally came to europe and netflix talked about password sharing and things like that they're going to have to figure out how they get potentially on top of that. if they say potentially 100 million accounts they could be potentially monetizing and they are not, it's time they do a crack down >> someone on twitter suggesting a price target for netflix 420 might be a better price target you used to come on -- i love you but i always wanted you to

speak about -- i always wanted you to speak about comcast with the same love that you spoke about netflix. did you ever get less enamored of netflix and the whole model on the way from 700 down here? or have you been surprised by this big turn around in the fortunes of netflix stock? >> look, i think similar to what you saw with mark ruckerbering and meta on their last conference call, for the first time they look vulnerable. and i'd say if you were listening last night it's the first time reid hastings who's always sort of saw around corners, last night netflix seemed vul fnerable for the fir time they didn't really seem to understand what was happening. netflix is still dramatically outspending all of their peers a lot of disney spending, a lot

of the media companies is for sports and stuff that ends up on lippier television versus on streaming. when you look at streaming netflix is spending $17 plus billion on content i think you all were talking about it earlier in the 6:00 a.m. hour, the content isn't resonating to the level. yes, bridgerton was reat, squi game was great but the amount of must see break through content isn't good enough it used to be fine i just went to the stars premiere the other night, when you have this level of competition netflix needs to be crushing it -- but the spending has been uneven. >> is there answer then they're picking the wrong stuff? is it they're overspending on too much volume and need to narrow it down and have a better gut about what they're doing and what does it say -- we use today have conversations about com cast, what nbc was doing

with peacock and other things. and i think your critical view you thought they were sort of slow rolling this. but the question i think once you start to see some of these other companies be more challenged whether actually the strategy of maybe slow rolling it, it may not be a bad one. >> richard plecler has a famous quote more is not better, better is better. i think if you step back and think about that for a second, this is not saying, hey, you need all game of thrones or you need all squid games or you need all stranger things. obviously things like tiger king did really well. netflix needs things that break through, the crown you can go through all the titles over the last 7, 8 years that have done that. if you look at the past year it just feels like relative to the spend, it doesn't feel like the hit ratio has been high enough and especially not just on the tv series, on the movie side they're clearly not getting

their return on the movies spent, probably 5 plus billion of that 17 is on movies. they've made a lot of excuses. i think the content success and the content hit ratio is not spending too much, it's honestly the titles are not landing with the level of success they need to given the rising level of competition that sarah correctly spoke about earlier. >> sarah, it -- listening to that i was thinking, wow, you really don't need to think a lot about sports and content but no wonder it is so valuable rich struggled to find like five game changers. that's a bad omen when you're groping and came up with five finally, but it wasn't easy. so can you imagine and you said it just because there's $17 billion doesn't mean there's a crown in there. does it, sarah

you've got to hire i guess the best creative minds again about content. >> that's right. and notice a lot of these series mentioned bridgerton, ozark, these are now in their subsequent series. we haven't had a new hit come out in a really long time. i would argue that another problem is actually the user experience when you log onto netflix there is so much content, there's so much you can be wading through it's a little bit overwhelming, and from a marketing perspective to me as a consumer it's not as clear and distinct what has been -- i'm sorry, what netflix is investing in versus services like hbo you look at netflix. when you see that little red "n" for originals in the netflix corners, to me that's an indication of a sloppy netflix original and a ripoff of a sloppy tv paid thing they're doing for scale. i think netflix needs to figure

out, one, how are they going to increase the frequency of hits not just relying on new suksquent seasons and then, twor, how do they reputationaly become a platform known for producing quality, the same way disney does for family content they do not have that reputation, and it's going to continue to bite them down the line especially to rich's point, other streaming platforms are going to come in and invest heavily, and it's going to continue to get competitive unless they can break through here >> we've got limited amount of time at this point but it seems there's a couple of parallel problems with netflix. one is on the content side, but the other is sort of the management side of things. it feels like hastings and company are caught on the back foot i mean when it comes to monetizing the households getting netflix for free, they've said they're looking to

monetize so why hasn't reed hastings been able to see around these corners which seem kind of -- i don't want to say obvious, but why has it taken so long >> i think that's a great question and i think sort of, you know, the most important question here is they seem sort of caught off-guard in terms of the size of the industry. they've always talked about a tam of 700, $800 million i think you had jason kylar who talked about 100 million subscribers. i know there's a lot of blame being put on netflix today but remember disney came out and said, oh, we need to do advertisers, too the whole media subscription business is slowing than companies hope and everyone else in the kind of

chain of this industry, the problem right now is consumers are moving from linear tv to streaming tv there's no denying that. they're moving to the streaming, but the streaming business seems smaller, far more competitive and less profitable than investors expected and that's the real problem that everyone is grappling with today. >> all right, rich, thanks sarah, thanks. when i look at netflix my previously watched thing i've got like 15 things and i've got 8, 9 minutes on each one on the previously watched it's like no, no, no >> and that's the problem. they're also, by the way, buying a lot less programming from the other networks because the other networks are trying to keep them on their own platforms coming up the battle between florida governor ron desantis and disney is heating up the governor making a surprise announcement it could strip disney of its self-govnierng power. we'll discuss the move and what it could mean for shareholders "squawk box" will be right back.

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that's a savings of over $500 a year. switch today. welcome back to "squawk box. here are some of the stories making headlines this morning. elon musk continues to hint he'll go directly to twitter shareholders in his bid to buy the company. his latest tweet a blank line followed by the words is the night appears to be a reference

to a possible tender offer tender is of course the name of a 1930s f. scott fitzgerald novel as well as a 1930s song. grubhub says it's exploring various options for the unit been less than two years since just eat take away just bought it for $3.7 billion. and raising interest rates too fast, he told cnbc's closing bell he's concerned the fed may move too quickly and choke off economic growth. bostic is not a voting member for 2022 when we return florida governor ron desantis escalating his feud with disney, charging lawmakers to eliminate the unique status that allows the company to operate as an independent government we'll discuss that after the break. time now for today's aflac trivia question. netflix entered the content production industry in 2013 th

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♪ ringcentral ♪ cal: our confident forever plan is possible with a cfp® professional. a cfp® professional can help you build a complete financial plan. visit letsmakeaplan.org to find your cfp® professional. ♪♪ welcome back to squawk in florida governor ron desantis taking closer aim at disney. he's introducing a bill to end-all independent special districts in florida which would revoke disney's near total control of the 40 square miles it calls home in that state. joining us now to break down that move and much more in

disney himself this morning is anthony scaramucci coming to us from mickey mouse's house, it's nice to see you, sir. got to nice view out there what do you think of this? and what do you think of sort of this idea that desantis throwing his political weight around in some ways as retribution for the position that disney has taken against him, effectively >> well, it's a mistake on a number of different levels but let's talk about republican principles or supposed republican principles, andrew. they're about free markets and allowing private control of things and sort of deleveraging the government to get the tax savings disney has given to florida residents by having them not pay for all the services surrounding disney so number one there's a bit of hypocrisy there. number two, revenge is probably

not the best political idea. i think we've learned for 5,000 years of political discourse it is way better to figure out ways so i think this is a huge mistake for him and more over he has republican enclaves in the state hat has that same status i don't think he wants to revoke those and i also think this would be challenged by the courts because this is a lot like retroactive taxes they were given this ability to do this back in the '60s so they would come to florida. i don't think they can necessarily go back on it without a challenge. i think it's going to be very hard for governor desantis on this issue >> any argument straight up on the merits, though, which is to say maybe there shouldn't be special benefits for specific companies? >> so, actually, no, i don't think there's any real argument straight up on the merits because this was put in place back in the 1960s, and this was an enticement to bring disney to

the state of florida of course they could have gone to other states. it would just be like us going back to your taxes, andrew say your 1995 taxes and saying, jeez, we want to change the tax code in 1995 and we'd like you to pay more even though we already promised you a certain tax code in 1995 i don't even think it's enforceable in court so no, i don't think anything on the merits here. but it speaks also to the bullying nature of governor desantis he has to be very careful with that he wants to run for president. the last one of course only had one term, so to me i don't think it's a great strategy. >> that's what i was going to say is is it a great political strategy, andiest going to layer on top of the disney situation his comments yesterday in regard to the sale of twitter basically backing elon musk saying he wants that deal to go forward,

and he believes the pension fund in florida should hold the board of twitter accountable if they don't sell it to elon musk how do you think that's going to go over politically in the state of florida if not nationally if you think that's where his ambitions really are >> listen, i understand the strategy he wants to go after the primary voters on the right if he wins nomination which of course he won't win nomination, but i get the strategy but again it's very hypocritical, andrew, because he's supposedly a free market person if you don't like what twitter is doing you can sell those shares and you can buy something else in the marketplacemism i think the notion that a governor who's supposedly the governor for all the citizens and all the residents for florida is now going to get involved in shareholder activism, i think it's a bad use of his time, but it's also very hypocritical as it relates to free market

activity so this is the sort of stuff going on in our politics right now. i would prefer somebody more principled you probably saw the governor editorial today discussing inflation. that feels like a presidential run to me. >> do you think the country is there? do you think the country is there for mitt romney today relative to the sort of bombast of a desantis within the republican party or potentially former president trump >> i am so there, andrew i can't speak for the entire country but i am so there. let me tell you something, okay, they may get there because this sort of stuff going on right now is absolutely nonsensical. we need more of a right or wrong approach as opposed to a left or right approach i think common sense is what americans want so we'll have to see

maybe people are not there maybe they want more of this brimstone and fire and all this stupidity and rhetoric, but i'm hoping not hopefully 2024 will be a year of common sense >> okay. we're going to leave it there, anthony. we appreciate you joining us from -- >> beautiful day here in disney world. >> i know it i hope you enjoy it. the lines i hope aren't too long go check out hollywood studios and the new star wars attraction if you can it's pretty cool >> all right, looking forward to it >> thanks. see you. still to come nasdaq just out with results our exclusive interview with ad adina friedman is next needham is upgrading shares to a hold based on the lower price with ads stay tuned you're watching "squawk box," and this is cnbc now the answer to today's aflac trivia question.

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coming up, will elon musk have investors dancing after the company reports tonight? a look at this morning's s&p winners and losers we're coming right back with so much more here on squawk

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joe, i was going to ask you actually what's it feel like in times square we keep seeing the empty shots what's it feel like?

>> i jumped out of the car and walked 5 feet but i put a mask on because the police are everywhere, and everybody i've seen has a mask. so even people here i -- we're far away from each other, but i was wondering i don't want these guys coming in here and yelling at me for not wearing a mask, but if they did then that's next but i told you ofb the cadillac of masks right here, the n95 >> the n95, right. >> it's confusing. if you were thinking that that was right now you'd be like what are we doing talking about this, but that wasn't. that was -- is it ironic, is it a joke it was 4/20 i think one person had gotten covid at the nasdaq, so i was unable to come in for a couple of weeks back in 2020. >> that's right.

i remember that. >> but i did return, and then i think eight months later had the vaccine. i've been happy since i got the vaccine and haven't felt like at risk, and i had covid and everything so i'm trying to move past it. we're joined now here at the nasdaq on the two-year anniversary of when i came back. adina friedman just out with results a short time ago it's back, the lobby down here, the ipos, everything is percolating again. let's talk about results i don't know how much time we have but viewers probably don't understand exactly all the different things the nasdaq is involved with. we know about trading and trading revenue was actually down from a record quarter a year ago which was game stop mania, right so it was down 6%, but the second highest revenue for trading ever but only down because it was that insanity we

saw a year ago >> first of all, i just want to say it's been wonderful having you here >> i love it here. i did not want to be here. >> you've been a great story to the capital market we had 5% overall growth, 13% organic growth, but the trading was down 6% just because first quarter of last year was a record it's still a record in equity options. >> trading is one of the parts of your revenue stream but if it was just trading you'd be up 5%, right? if you back up the trading you're up 13% for revenue. you can't control trading. >> trading isn't somewhere between 25% on any given quarter and the analytics we provide to the investment community, our

market infrastructure, and then of course all the services we offer, to our 5,000 corporate clients in addition to listings. >> so you break down five main businesses >> we have five main businesses, that's correct >> and you've expanded a lot of those. >> so our sas business is up 12% from the first quarter of last year so that includes likeo our anti-financial crime,ological our services to our corporate client and then the analytic services to our investment clients. >> and then three for one stock split makes sense at this point. >> wave been proud of the fact we've been able to deliver stronger returns to our shareholders which has driven up price over time. when we look at what is the optimal price for a stock, it optimizes, it gets down to that

notion of having some between 40 and $100 and so we're doing a three for one to kind of bring our stock down >> you've seen our infatuation, our obsession with jay powell. and what do we always reference? nasdaq stocks and valuations and technology is that the most sensitive. should we view nasdaq stock as the proxy -- >> i think our stock we're a technology company for sure, and i think we've bip able to demonstrate really good growth in our business, but we also are a steward to the capital markets. we're a global business. we provide technology to 130 other markets around the world i would say we're a little bit different than other stocks and

nasdaq nasdaq today has stocks and company from every industry represented. >> but 33% is dependent on your market trading, and if rates are headed higher and it is somewhat less sizzling, less hot than in previous years, should that -- do you take that into account? would it not be quite as conducive to your business if rates go up? >> the way we look at it investor uncertainty and uncertainties around us, for instance in a really complex geopolitical environment banks really need to lean on better and more advanced anti-financial crime technology, and we have what we believe is the most advanced technology available for that investors have to make really quick asset allocation changes and investment which is a tool that allows them to determine

how to allocate their assets, they're using that more than ever, and now they're also leaning in to provide we have portfolio management tools as well, and so our corporate clients are having to navigate a big change in their investor base these kind of swings in stocks makes it so they have to rethink how they engage in investors and we provide a whole suite of solutions to help them do. i think that's part of what's driving our growth is our clients are relying on us even more >> when you have meetings what do you talk about? what do you say considering some people use that and even had technical analysts >> i think we are starting to see that enter more into the institutional mind-set as well as the retail mind-set in terms of people wanting to get engaged

in those asset classes, but it's a really inefficient ecosystem. we're a market operator but also provide technology to other markets including crypto exchanges. we can make them more efficient and provide surveillance technology so they consider investor fairness. our anti-crime think platform now has digitalacyets -- >> toez are all sort of on the outside. you're helping but you're not diving into -- >> and as we continue to see the crypto markets evolve and mature, are there things we can do we can do as a market operator to help that muchaturi? >> melissa i think knows this building pretty well >> like the back of my hand. great to see you i want to ask you about the

three point stock split because in the release it said explit ely it makes it more accessible. of course it would make it more accessible through the stock as well as the options in the stock. >> you're right. we actually do care about how accessible are the markets and can investors directly own shares because that means they are a true owner of the company and not just the financial owner of a fractional share we do care about that, and that's exactly what we were trying to indicate in saying it's more accessible i think that increases participation. as you know that tightens spreads and it makes it also the cost of capital for investors and companies is better. >> right now actually on file we have more companies on file to go public today than we had a year ago

we had 42 companies go public. we had i think it's like 250 companies that are -- are on file to go public and we're hopeful we could see some of the larger companies choose to tap the public markets, but they have to feel confident invetsers are ready to take some risk and putting capital behind the new issuances so that's the big thing we're really continuing to monitor. >> so that's a no, probably. >> i would say that, okay, 2020 we started off really strong then as we know the pandemic i actually really thought oh, my gosh we're not going to have any ipos that year one came out, and everyone realized actually investors are willing to take risks. it just depends on which types of companies are looking to invest in, and that opens up and we had a spectacular year in

2020 with ipos, you never know what can open up the window. but once the window is open there's a lot of companies who want to walk through it. it's only april and just like it was last in 2020 >> good to see you had had a piece of bacon >> we have really good bacon >> is that like the sixth division of the -- >> yes, our caterer is our sixth division >> thank you good to see you. >> great to see you, too >> stay off the bacon, man coming up we've got a preview of tesla results. plus late yesterday elon musk tweeting blank is the night. the word tender would make sense to put there, as in tender is the night. could it be another hint of musk's aspirations to take control of twitter we're going to speak to mark

isaac after the break. squawk returning after this. ♪ with my hectic life, you'd think retirement would be the last thing on my mind. hey mom, can i go play video games? sure! ...after homework. thankfully, voya provides comprehensive solutions, and shows me how to get the most out of my workplace benefits. what's the wi-fi password again? here... you... go. cool, thanks. no problem. voya helps me feel like i got it all under control. because i do. oh, she is good. voya. well planned. well invested. well protected.

welcome back to "squawk box. this morning tesla ready to reports results after the bell phil lebeau joins us with a preview what investors can expect, and maybe he can read the tea leaves or twitter to give us a sense of what may be upon us, bill. >> andrew, i think if you're hoping to get a lot of twitter insight tonight from the analysts call, think again

i would be surprised if we see elon musk go up on this call tonight. i could be wrong he may decide to break platform to discuss what's happening with twitter, but we'll talk about that in a little bit let's talk about tesla and the first quarter numbers, and that's really what's going to be in focus when the company reports results for the state of tesla as it moves into 2022. they're not going to fall off by a lot. what's happening with the chip supply, for that matter what's happening with inflation and the impact tesla is noticing there texas and germany production both of those new giga factories have begun production. remember the expectation is for tesla to deliver 1.47 million vehicles this year after delivering 936,000 last year i do not think that tesla will give new guidance for full year

deliveries they pretty much have said it's going to go up by 50% hevery year they're up likely to give exact guidance in terms of how many vehicles this year and there's the question of elon musk does he show up on the conference call? remember it was about a year, year and a half ago he said i may not be on future earnings calls unless there's something important to discuss yes, i know everybody want wants to talk about twitter. but if you go back and listen to conference calls when it's not related to not tesla related matters elon musk is not on that call >> is it assumed, phil, that the shanghai shutdown will just be made up in future months and so therefore deliveries -- >> melissa, remember when this was supposed to be maybe a week shutdown at most now it's stretching into, what,

two, three weeks they've begun some partial production according to some media reports there, but then you've got suppliers who may not be up to speed in china. this is going to be a bigger issue. q2, definitely we're starting to hear some conversation about that >> phil, thank you phil lebeau. turning now to one of the other companies musk has been involved in recently, twitter of course musk tweeting late last night, plank is the night is he just rercferencing his fandom for f. scott fitzgerald i know nobody can get inside the brain of elon musk, but what do you think is next here >> i think i need to turn my notifications off for his tweets because it's driving me crazy. he's been playing aroundfor th

past two weeks on a sort of game of brinkmanship with twitter's board, it's this back and forth about am i going to initiate this tinder offer and $54.20 per share directly to shareholders or come back and negotiate with the board and maybe secure financing? and so yesterday we -- my colleague lauren hersh and a few others sort of figured out behind the scenes he's putting together and trying to put together a private equity deal to sort of secure funding basically to make this an actual deal to come to the twitter board with, but in the meantime he keeps. >> all ready there are reports private equity firms do not want to be part of any deal he has his own personal wealth as well, but that's not going to

get you up to the full offer >> no, i think that's a great point. i think a lot of firms are like this guy mercurial, i guess i would say and are kind of nervous because with anything elon does is it a big joke or is it for real? i think right now i believe he's looking at, you know, debt options, can he raise a bunch of debt, and again like you said against his tesla shares technically he has said he could afford it if he wanted to liquidate but again what does that do for tesla shareholders and sort of freak them out he's kind of up against a wall on a few of these things >> a lot of concerns about a potential musk take out of twitter revolve around the notion that he won't have strict content moderation policies, mike and i wonder what your take is on whether the real debate is getting lost in there this, and that is the notion, you know, that content moderation is

governed by a small handful of people, and it's great if you agree with them at any one moment, but if you don't then you're out of luck, and maybe that's the real problem here >> i don't think that's crizzy to talk about. i think it's a wider industry issue, too you know, facebook is actually the biggest company with content moderation issues and twitter tends to get less focused just on a global scale, but it's where the world leaders until last year president trump was on there, so it gets a lot of outsized attention i think the thing that companies like twitter and companies like facebook are looking at are basically if congress is going to create an actual rule book around what is and isn't allowed and they're forced to kind of do that work themselves which i don't think they want to be in the business of but sort of forced to, so it's a total

catch-22 >> hey, mike, how much do you think this is elon wanting to be part of that conversation? meaning how these platforms ultimately get regulated i know he talks about different types of moderation in his own system, but also how concerned either is he or should he be i imagine at the moment he isn't because clearly he's interest interested in doing this and the domino or potential ramifications on his businesses, i'm thinking of tesla and spacex which of course is relying on defense department and other government bodies would spend a lot of money with him. people like desanlt s out there yesterday basically going after -- basically saying that twitter board should get, you know, in trouble if they don't take the deal and that the florida pension fund should go after them, and you see how this could get political very, very fast and might work in this

moment but might not work if he's on the wrong side of things with other people. >> that's a great point. there's a real interesting twitter thread last week from the former ceo of reddit who's basically saying elon has no idea what he's in for a lot of of these content regulation issues he needs to maintain these government contracts in general, so what sort of political leverage do regulators sort of have on him if now they can -- if he wins they can pressure him to move one way or another on these issues i think he does earnestly seem to care about speech issues and wants to be involved in that argument it's just is he biting off more than he can chew on a lot of this stuff >> mike, great to get your take. >> coming up netflix shares tanking after hours, and this

morning after losing more than 200,000 subscribers instead of adding 2 million plus for the quarter we're going to talk to our top analysts on the future of the streaming giant next and as we head to break quick check on crypto prices 42,000 now obioin tcn. stay tuned "squawk box" will be right back. your projects done right

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good morning futures point to a higher open on wall street stocks coming off their best day in more than a month meantime it's a quarter worthy of a horror movie. netflix plunging on subscriber loss and the company posting more pain ahead. and florida versus disney. the sunshine state government wants to end a special self-government status that disney has held since the 1960s. this is the latest development over the war of the don't say gay bill final hour of "squawk box" begins right now

good morning and welcome to "squawk box" here on cnbc live from the nasdaq market site in times square, i'm joe kernen along with andrew ross sorkin and melissa lee. becky is off today u.s. futures are now adding to yesterday's gains and treasury yields that might explain a little, we are not at three yet. things have been kind of orderly, 2.86 although we did get to 2.9 three looks like it's obviously going to happen but not today. >> the biden administration says it will likely appeal a federal judge's ruling that struck down mandatory face masks on planes and other forms of public transportation in a statement the department of justice said the appeal would go forward if the cdc includes masking remains necessary for public health. all the major airlines and amtrak and uber have dropped

mask guidelines. and tomorrow on "squawk box" you'll hear from the american airlines new ceo >> that's good look forward to that meanwhile america's largest pension fund says it'll support a bid to replace chairman buffet >> save your breath, this is not happening. >> disclosed its vote in a filing ahead of berkshire's annual meeting it comes from the non-profit national legal and policy center and argues the roles of chairman andceo are greatly diminished where the same person holds both jobs

berkeshire opposes the only way you endorse is show me the money and i don't think we're allowed to do that >> we're not allowed to do that. often get these people saying you're some kind of agent for these people i don't get paid by these people, and tour your point none of us that work here can actually take anyway now i've gotten that disclosure aside earnings season is still going we've got about 16, 17 companies in the s&p reporting results today. among them consumer products giant proctor and gamble, the maker of everything from pampers and diapers all the way out to those consumer products we know for cleaning and everything else comes out with sales for both top analyst estimates and raised

a key forecast in the measure of sales growth at the company to a level there better than it was previous so you take all that into effect and a company able to pass on the costs to consumers because we as consumers apparently still like to pay up for brands we know and trust, and so proctor and gamble shares higher there also what's happening with baker hughes services. down though after an 85% run over the last year it comes out in misses expectations for profits and revenues, though they both did grow on a year over year basis still, though, maybe a bit of that rejiggering taking place with a stock that's already gone up tremendously over the course of the last year or so and then as we often do on this

hour of squawk a check of the most searched tickers on our website cnbc.com from yesterday's full session the ten-year yield is always pretty much near the top of the list it falls to the number two spot because netflix stock takes over the most searched ticker on our website. walt disney, florida versus disney in don't say gay bill, a lot of attention there twitter, tesla, ibm also in it top ten. and the rest of the top ten and highlights of the top 50 on my twitter feed at the domino wti crude oil has been in the top ten for a good amount of time now it has now dropped out of the top ten, so it gives you an idea little less interest in oil right now relatively speaking. >> netflix shares losing a quarter of their value in the premarket after subscribers began the year by leaving the service. julia, good morning. >> melissa, the company lost

200,000 subscribers instead of adding the 2.7 million thathat analysts had projected, and netflix would have fallen short of expectations even if it had not lost the 700,000 subscribers it did in russia when it shutdown service there netflix guided to the loss of 2 million subs in the second quarter instead of the addition of 2.6 million which is what analysts had anticipated it would guide to to help reverse those numbers the co-ceo reed hastings saying he's open to advertising, doing a 180 on his prior anti-ad stance >> allowing consumers who would like to have a lower price and advertising tolerant get what they want makes a lot of sense so that's something we're looking at now and trying to figure out over the next year or two, but think of us as quite open to offering even lower

prices with advertising as a consumer choice? >> as for the company's slower growth netflix citing abinable of factors including market penetration, competition, sluggish economic growth, inflation and password sharing saying in addition to netflix's 222 million paying households they estimate netflix is being shared with over 100 million additional households including 30 million in the u.s. and canada hastings saying they're working to generate revenue from those viewers to help reaccelerate revenue growth >> working on how to monetize sharing. you know we've been thinking about that for a couple years, but when we were growing fast it wasn't a high priority to work on and now we're working super high on it these are over 100 households already choosing they love the service and we've got to get paid to some degree for them >> netflix falls short dragging

down other streaming stocks for them as well in after hours trading. roku shares down paramount off nearly 6%, and warner bros almost 5% as well premarket. guys >> julia, i wonder if it's time now to start questioning management he mentioned when things were growing other things like monetizing households that were in pain were not a priority when they probably should have been an ad supported network, you would have thought this would have been in the works it's like no other streaming platform has this model. it's a prand new model it's been out there, and netflix is now only going to look at it? this all seems kind of surprising >> netflix is definitely late to the game when it comes to the ad supported business right now those comments from reid hastings make the news.

even disney is ahead of netflix on this. they haven't launched their ad supported version yet, but they say they will have an ad supported version by the end of this year. netflix is at a disadvantage because unlike those other companies, broader media companies that have ad infrastructure, netflix just doesn't. so there's a question whether or not they're going to have to actually buy a company to give them some of those tools they need to quickly ramp them up and get them to market >> i immediately thought you don't see monday night football groping for content. it's going to be there, and this is hard. and 17 billion, rich greenfield used the expression that more isn't better, better is better 17 billion doesn't mean you're going to find something, and i was up front once and they were pitching the new shows remember and we did a super sized friends, and they showed all ten

of them sucked, all ten we tried to do. all ten of them all failed that happens again and again and again. what if there's no more decent sitcoms or decent series i think we've used them all up, julia. >> i don't think it's possible >> we need a sequel. look at movies >> one thing interesting they talked about focusing. remember he is co-ceo and that is a relatively new move, and his background is on the content and he said they're working to improve the programming but also the recommendation engine with the idea there's so much content on netflix they want to make it easier for you to find the stuff you want to watch, so there's always going to be great content. the question is what netflix needs to do to focus in and make sure they have more break out shows. so it's not just a new season of

brid bridgerton >> and hbo max you may not like it, may not get hooked on it but 17 billion might be too much take some of it out and get some good stuff suddenly a $700 stock is now at 250, so something went awry. >> yeah. julia, thank you julia borstin. let's take a look at the raft of analysts this morning downgrading netflix, racing to downgrade netflix and lower price targets including jp morgan taking it to $300 a share from 605 and one firm is upgrading to a hold from a sell based on what the eventual ad supported tear co tier could do for the company. michael, great to have you with us are the best growth days for netflix behind it? >> yes, that's a true statement. it is a true statement as i'll ever admit >> so what's next at this point? i mean it's -- it's rerated,

basically overnight. so its 4 pe i think is now somewhere along the lines of 24. is that right to you considering the growth they're already forecasting, the 10% revenue growth for the quarter year on year, i mean it's only done that four times in its history since going public, sub10% >> i think they're completely right. this is a hard business. you know, content is not one because you spend more content has to be good netflix has a huge lead over everyone else, but eventually the industry realize they needed to compete and they have brands and ad sales so we look at the model and this is the first time i could ever say this our confidence in the forward model is so low, you

have to add advertising and shutdown password sharing. yeah, we would say, look, we've seen this before during growth purgatory. you go from growth to value instantly. cash flow is ultimately the floor. until you see the turn in revenue growth this is dead money in my view >> and michael, if that's the case how do you look at the rest of the players in the space? is this smelling opportunity for others do you now look at disney in a different way? does a peacock all of a sudden look at people in a different way? cbs paramount situation? >> we've been asking forever is this a good business, and we've had our doubts, right. now those companies had an vej over netflix but at the same time they have to spend money to

compete. i think this is great consumers but ultimately not to a good business to invest in. we have no buys in this group. i think you're in for a couple years of pain here as everyone realizes this is a hard business to grow to scale and turn cash flow in profitably, so, no, it doesn't change my mind at all. a lot of investors have used netflix as a evaluation. it's hard to value the streaming businesses that the premium used to have. so to me this is a giant canary in the coal mine we want to confirm our view and we stay away from the sector >> i want to understand what you think the addressable market is, michael? and for netflix part of that market is the 100 million households not paying for the service, and i wonder what you think the conversion rate could be on that, like if forced to pay would they actually pay?

and also the notion before that any household out there that didn't have netflix that was yet to have broadband that has netflix and you've done that work before but maybe too optimistic >> the peak penetration was 100 million homes. they're at the peak u.s. penetration for a bundle that includes sports and news, right? so the fact they told you that last night to me it was a lot -- it was late because they'd only talked about 100 million u.s. homes were their ultimate goal they're there now. to your point of how do you then unwind the password sharing, if you have a college kid who have second houses does that count as password sharing, i don't know

also people are paying almost $20 a month for four streams, maybe that's because they thought they could share with other people, family member. so to me you're in the mature market and you're hitting a penetration that says your ex-growth. >> what i was going to say if this is true what does that portend for, you know, warnermedia and its merger with discovery? we were talking about cnn plus just before. >> they've not been as high volume, if you will as netflix in terms of their models or how much stuff they're producing, but how do you think that's going to impact them >> i think it's a good question. what they have an advantage of is they have an ad sales infrastructure around the world. if i was i would push an ad tier quickly, low price, use my ad force around the world to kind of get dollars in the business

all these companies should think about chasing netflix down, kind of that growth business they had. they should focus on core strength and franchises. again, i think you said less is more less is more here as long as the quality is good. >> cord cutting, cord cutting, cord cutting anyone ever say there might be streamer cutting why isn't that going to be subject to -- i've got too much, i don't use it, i don't want it, i want it out of here? sometimes i wonder you get 2,000 channels you don't need to watch with your cord at least. we're only -- maybe that's suddenly a good deal cord cutting will never reverse, obviously. i'm not saying that it will. maybe i'm just saying streaming could have the same phenomenon you could see play out with streaming where people say i don't need this anymore because there's nothing there for me and why blow the money every month

>> the frustration shows people don't have multiple apps, so all the customer surveys we've ever seen or done show great dissatisfaction with the experience of multiple streaming apps, right? i'm going to aggregate this like a cable operator and put this into a simple place where you get all the content and streaming. >> apple tv sort of does that sort of, and discovery wants to do that. and hbo max -- >> i love my apple tv but it's still hard to get it totally around and half the time you're having to go into the apps and stay out of the apps >> in between you're flying over the north pacific in a satellite. it's worth it or you're seeing a bunch of jellyfish don't you like going from app to app. michael, i like going from app to app once again tim cooke, genius thanks, michael. >> the question is do they have

enough hard tgeo t through the first couple and then all of a sudden -- >> people say that wealth is breaking ground on your biggest project yet. worth is giving the people who build it a solid foundation. wealth is shutting down the office for mike's retirement party. worth is giving the employee who spent half his life with you, the party of a lifetime. ♪ ♪ wealth is watching your business grow. worth is watching your employees grow with it. ♪ ♪

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with tru niagen, researched by the world's top scientific institutions. welcome back to "squawk box. i'm phil lebeau. the ev market continues to expand take a look at the new electric

7 series from bmw. they're calling it the i7 with a range of 320 miles price tag, yes it's pricey at just under $120,000. but for bmw this is important. this is the continual expansion of electric vehicle, a market where they have struggled to catch up with the competition. but the ceo says they are in the right spot right now >> so we are coming at the right time, and that st. here to stay for -- for the next couple of years. on the contrary the other markets are vanishing immediately. so that approach we take kind of both handed is really the right strategy for us. >> they've got their work cut out. when it comes to electric vehicles it's about 6% of global sales in the quarter, so they've got a lot of growth potential there. right now they're not bidding any electric vehicles at their biggest plant in the country

down in south carolina and in terms of the ev market share it still remains tesla's universe with a lot of others trying to nibble at their market shares tesla's market share going to come down over time, and bmw expects to gain some of that market share by the way, as you take a look at shares of bmw and tesla, remember we get the q1 results from tesla after the bell. andrew, back to you. >> thank you, sir. i know i saw a picture of a kia telluride. it may be an ev rod. >> it's like a mini van type thing. >> no, it's not. >> okay, to be continued april, though, is the financial literacy month and today we're bringing you details of an important annual

survey certainly tracking the names of black and white investors and this year finding that the players are growing in popu popularity especially. walk us through the highlights of this, john, because it's pretty fascinating stuff >> it's really important what's been happening one of the things, one of the key highlights for us or really kind of a bit of a low light is african american investors are getting into the markets late, taking higher risk as the markets have exploded upwards over the last few years. and while things like crypto currencies have gone up and up we've been joining that chase in the same way that internet bubble occurred.

>> how do you change that dynamic? >> well, the most important thing is education what we're finding from the survey is a lot of evidence that both black and white americans don't really understand what they're investing in for example, 40% of both cohorts came in as admitting they don't really understand their investments. for that, that's the main thing. the other thing is as john alluded, we're seeing a lot of interest in newer investments such as crypto and nfts among african americans and we feel that's a reflection of a broader cultural movement given the buzz around these instruments so we want to be able to leverage thatinterest in investing from all these new inresters and provide client education so they don't get into trouble. >> good thing or bad thing that that's where the interest lies and can that interest to the extent you think it's a bad thing or whatever it is, can it be converted to some degree into

education and understanding about other parts of the market? >> i'll jump in and say what i worry about is when you jump in late and get crushed, when the inevitable happens, then you're going to be gun-shy about getting back into the markets. i think it's something to be quite worried about and that is why investor education is so important, why we have to have public schools getting involved, teaching young people about the markets and the value of long-term investing without speculation. >> hey, kelly, how much do you think the folks that you surveyed really understand not just about crypto and the market but how economy works, what's going on with the fed, what inflation is >> i think you're hitting right what really concerns a, andrew for example, in the survey we found 60% of black americans surveyed thought crypto was

federally regulated, and very high percentage of black investors thought that crypto was something that was safe and perhaps even the best investment so we think it's critical to leverage this interest for example, 58% of black americans are actually invested in the stock market right now, but whenyou go down to the cohort that's under 40 years old, that number jumps up to 68%. and we look at that as an opportunity to engage those folks who are newer to investor via crypto or other stocks to provide education to them, and hopefully that's an in road to other members of their family who may be old and not investing as well. >> it seems if a lot of folks are believing that crypto is federally regulated, i mean is that on tiktok i don't know who's telling people this.

>> i know it's the buzz everywhere it's just -- you know, i find even the guy who's delivering me my pizzas during the week, he wants to talk about crypto because he sees me on cnbc and he wants to know what i think about the markets. people are just talking about it because they hear people have made a lot of money, they got rich quickly and they want to jump on the bandwagon and so it's just word of mouth and of course what's happening on the social media front more and more people learning about how crypto works or how they think it works and not understanding the risk >> we've got work cut out for us john kelly, appreciate it. >> thank you coming up, the united states of disney. it actually exists in florida. disney's own little self-governing area, but that's now at risk as the war over the don't say gay bill grows hotter. stay tuned you're watching "squawk box" on cnbc

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netflix, disney and all the other stock stories making headlines this morning it's a little known fact it effectively self-governs the land disney world sits on, not the state of friloda florida now wants to change that we'll talk about that when we come back. stay tuned what if you were a global energy company? with operations in scotland, technologists in india, and customers all on different systems. you need to pull it together. so you call in ibm and red hat to create an open hybrid cloud platform. now data is available anywhere, securely. and your digital transformation is helping

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and set a course for growth. here, here! friars, send word at once. yes, m'lord. i can just tell you the state of florida and our pension system we have shares of twitter. i didn't buy in. we have people that run the

fund but nevertheless it hasn't exactly been great it's been pretty stagnant. we're going to be looking at ways that the state of florida potentially can be holding these twitter board of directors accountable for breaching their fiduciary duties >> that was florida governor ron desantis yesterday threatening to punish twitter if they block elon elon musk's take over bid. and pushing state lawmakers to eliminate the company's special status which currently allows it to operate as an independent government joining us now jim stuart, columnist at "the new york times," cnbc contributor, knows a thing or two about disney. how did we get here, jim i mean cultural issues nobody shies away from addressing -- companies don't anywheremism local governments don't, governments don't. the federal government doesn't is it social we're just all ready to opine and that's why we're in this mes?

how did it all happen? >> i think we're at a tipping point here where some governments, some governors in this case or some politicians have recognized that "a" there's political capital here to be gained by going up against companies they have branded possible political interests or their constituents or in this case generally liberal or proceed as liberal media companies and they're getting a lot of positive reaction from their base over this and i think this is something we haven't seen to this extent before we've seen clashes between government and corporations, but there's been a kind of tacit alliance that, look, this employs a lot of people in the state of florida the equation has been generally the states try to court these companies, get them there and in turn be relatively quiet about these hot button social issues,

and i think that has now changed. >> on the twitter side of things, the facebook side of things, i don't know which social media you want to talk about. would you agree some of it might be justified in terms they have some of the content moderation has seemed kind of one-sided or you wouldn't even acknowledge that >> well, my own view is we're not going to completely agree given the partisan divide in the country about what should or shouldn't be on these platforms, but ier personally think profit motive is not a bad moderator here if the company are trying to maximize their earnings, they're going to try to thread this needle that alienates as few people as possible say a single ultrarich person owning a platform who doesn't

care about the profit motive but only cares about pushing an ideological message whether it's on the right or the left, that worries me because then you have someone who's using the platform to pursue a political agenda where if you're trying to maximize profit for shareholders your primary motive, in fact, is not ideology >> wouldn't the market, though, then just abandon this platform? to follow that logic through if that was the sole purpose of twitter therefore it's sort of a self-fulfilling, if the market doesn't want it, it'll abandon and make that tool much less effective. >> i'm sure there would be some of that, but one of the interesting questions here is if you take a facebook, a twitter also to some extent, you know, these are these platforms that benefit from a network now, if it starts to skew the

content is that going to undermine that network effect they benefit, can a rival spring up that can begin to get your friends on there the network effect is quite powerful it's not insurmountable, but one of the worrisome things about these is they seem to be these natural monopolies that benefit from these networks and i don't know to what extent an ideological till would undermine that >> how did disney do in terms of -- the first they did too little, then too much, they're still not doing enough as far as shareholder, thinking about shareholders and shareholder value how many mistakes did they make or mishandle? >> well, disney has gotten the worse of all worlds. they were trying not to take a political position and alienate the florida governor, and then they alienated a lot of their

employees and then to flip on that, and then they ailiateinated -- now they've got full on war. there were hundreds of companies that quietly signed this petition and publicly opposed this legislation and not a peep has been said about any of it. yes, they've mishandled. on the other hand, i think it's worth pointing out so far this hasn't done a lot of damage to disney bottom line i mean, taking away their little local government privilege could create headaches for them and get local government meddling and wanting to impose all kinds of rules could be an issue for them, but it isn't going to hit them much on the financial side. you still have a situation where disney is talking about moving hundreds of employees to the orlando area, and florida is giving them $500 million in tax incentives now, that's real money and not a huge amount for a company like

disney, but we don't see them pulling their tax incentives or trying to discourage that yet. so i would say so far this is still in the realm of mostly rhetoric and not solid economic -- >> jim, you spend a lot of time looking at the players involved in this. how do you think jpec, the currency should be handling this is there a way for him to speak about these issues where he placates the politicians, his own employees and the varied customer base, and then throw on top of that, by the way, the fairness of bob iger who's been public, doing a lot of these interviews and he's making comments which are oftentimes at odds which i would argue between the two of them they're exacerbating the problem >> whatever is going on between the two of them is not helping the company at the moment. and you're right, i don't think it's good for them to be

cross-purposes and i've been talking about this iger was considered, you know, very deft at handling issues like this. he is poised he is diplomatic he's charismatic he had this down to the extent you possibly can these are skills i think jay peck is still polishing. number one, understanding what our values as a company are, number two stand up for them when necessary in the public arena, and number three never call on new attention or make more out of it than necessary, and i think they have to stick with that play book. that's the only way i can think of to navigate this. and if they had done that, they would have signed on in the first place into the petition that opposed the legislation

>> do you see somewhat the conundrum disney has people immediately say it's not don't say gay, it's a parental rights bill. i see that so i wonder how do you divide especially with a company that caters to children-- if you play that parental rights card, you saw virginia, the governor there for whatever reason, these issues that there are people on one side and people on the other, what can disney do? how can they possibly please both sides of that -- that issue? >> well, they can't, which is why the less they say about it the better it's not up to disney or the disney leadership to be parsing the nuances of a highly controversial bill in any state legislature. i mean they don't have the resources for that and they don't have the expertise for that when companies are lining up and really forced to take a position

like they have been in this case and hundreds of them did, disney to me should quietly decided, okay, here's a principle we're going to defend, whatever it is, and then stick with it >> very good all right, jim, fun to talk about it. >> this is not the end of this battle >> yeah. >> how's it end then >> does jay peck survive >> i don't think that's an issue at the moment but i think the board is watching closely. i think we're going to see other states i think desantis is getting incredible mileage out of this he's getting amazing press i think you're going to see other people following suit. >> okay. we are going to thank you once again. we're going to get down to the new york stock exchange where our good friend jim cramer joins us now i don't know if i've heard your

particular thoughts on all this. how do you think jay peck is doing and what do you think is going to happen? >> i think jim stewart is right in the sense they've got to lay low a little more. i do not think they're in trouble. if you're running for president they're easy to beat up on remember they have more people working there than desantis won by his margins i do think the initial misstep by jay peck has been corrected he's taken a point of view -- he has a human rights, civil rights point of view, andrew. i don't think he's in trouble, and i think this is going to go past what i don't understand is why people think this is the same company as netflix it's the same as it was when they announced the screening >> we've heard now it's basically dead money and a

rerating thought just for netflix but therefore anybody else, fair, unfair >> i think that is unfair. i do think to tar disney with the same brush as netflix and how the the bundle is more valuable and cheaper is wrong. i believe, of course, it must be rerated. i'm trying to figure out if you put a 20 multiple on 2025 earnings you get to 300. i think it's a kind of a cash machine than people realize. it was a deeply disspiriting call it was like remember the old calls when they joked about what they liked now it's like, you know, like a tool. >> why is the rerating unfair for everybody if everybody was chasing the same netflix dream >> i think disney has other things going for it. when they announced it, espn

kept losing its share. now you get espn plus and disney and hulu i don't know i can't be as negative because the theme park business is the strongest it's ever been. >> what about paramount or what do you think about a warner media? >> paramount is small. >> or comcast, which is a completely different company. >> comcast keeps going higher. everyone notice? i think a lot may be, believe it or not, their theme parks are impossible it's a $400 vip pass to get to the front. per person that's fantastic people don't realize it. we can put universal theme parks everywhere in all the places disney has no one is including that in the numbers. and i do not get that. i mean, theme parks are more sold out than disney's theme

parks. nobody seems to care i care >> what do you think about what warner media discovery >> i mean, he's small-hanging fruit he can crush and kill immediately. but, look, i don't like heavily indebted media companies i wish disney had less debt. i think there's a propensity to believe everything he does has to be under scrutiny i don't think it's interesting i don't think -- i think the story is just okay it's going to take a long time for the stock to be digested at&t i think is bad. >> final prediction on mr. musk this evening either tesla, twitter, tinder with i don't know what. >> he's the last tycoon, my friend he gets it. >> and therefore you do what as an investor? buy twitter and tess will. >> if it goes up, i get hated. if it goes down, i get hated

i will say he should get it and twitter board has to recognize it goes to 32, if he sells the stock. versus, you know, nine up. but i don't know. >> we'll see you on squawk on the street with the gang in a little bit and, of course, reminder you can check out jim's investing club point your phone at the screen bcomoiheubto c cn.c/jntcl we're back after this. come on. ♪♪ ♪♪ ♪♪ 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

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you are watching actual videos of the tesla full self driving technology as recorded by the drivers. from turning too tightly and hitting a pylon... [ expletive ] to swerving toward a pole. jesus. watch the bicyclist on the right almost get hit before the driver takes over. sometimes it seems the tesla doesn't want the driver to take over. i'm trying. this driver had to hit the brakes when the tesla didn't understand a detour sign. ok. here it almost hit a truck. obviously, i had to take over. and here it swerves into an oncoming lane. look at that! often, the tesla doesn't know what it wants to do. what is it doing? or just doesn't know how to turn. jesus, oh my god! tesla's full self driving software for drivers and pedestrians, it's unsafe at any speed. tell congress to shut it down.

earlier from dow component proctor and gamble reporting profit of 133 a share. four cents above estimates revenue at 19.38 billion topped the consensus forecast raising the full year sales guidance we'll talk about the markets and earnings now with the managing partner and portfolio manager at dcla and cnbc contributor. great to have you with us. >> good morning. >> i want to get your take on proctor and gamble, first. it was a good quarter in all fronts in terms of the past quarter and current quarter and full-year outlook. when it comes to price hikes, they niche rated a round of price hikes that have yet to take a effect, i think, on certain personal care products i'm wondering how much more can be powered by that can there be additional price hikes if the consumer keeps

buying the product. >> so i think you have to look at the product, melissa. they have great brands and that's where they get the pricing power at they are so big they're able to control their costs in a way that other companies can't do. when with their distribution and brands and pricing you have to be in companies. the consumer is strong we know that we talked to bank of america and you look at the balance sheets of the consumer. wages are going up consumer will spend where they want that's where our view is you know, you want to be in the reopening phase. you want to be where pricing power is so companies like delta -- they can't have enough capacity you have companies controlling capacity and pricing that's where you want to be not where we were back in covid because that's all that pull through demand won't be there anymore. the market is by forkated. you want to be 70% of the economy which is consumer.

p & g was up 2%. i want to get your take on netflix and what it could mean for a company like disney. should we extrapolate the discounted evaluation on the streaming service on to disney's streaming service, for instance? >> i really don't think so i think netflix is another example of the pull forward that we had in covid. a lot of people got, you know, all the streaming services right away for me, disney is a complete reopening play disney tv, disney plus, espn, that's icing on the cake that's real content they have with marvel and a bunch of other things i think theme parks open up as disney has pricing power again and demand it's sole revenge economy. disney stocks reflect it already. it's not like it's trading at all-time highs i think we've known the companies like disney and disney

plus they have to execute. they have to get, you know, more viewers. but it's also going to be what i think kind of a loop people are going to subscribe to them are going to the theme parks. but i'm not buying disney because of the streaming service. i think it's an add on i think investors have to be careful as to disearn what is going to grow going forward. >> great to get your thoughts ahead of the open. good to see you. final check now on the markets. >> time flies when you're having fun. >> oh, yeah. >> every day this week. >> every day. >> flying. it's been flying. >> flying. >> let's hope it's exudes into the screen to the people at home [ laughter ] >> that was convincing. >> they have fun [ laughter ] 180 points now the nasdaq up 78 we have the s&p. you here again tomorrow,

melissa? >> yes enjoy. >> say it loud and proud enjoy! >> enjoy. >> come on are you and julia going to coordinate >> of course. >> that was a nice yellow. text me. >> "squawk on the street" is next good wednesday morning welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber futures look to build on the best day for the dow in about a month. nasdaq could be dinged a bit by the netflix earnings disaster. maybe yields will help tesla earnings tonight road map begins with the netflix shocker. shares plummeting premarket sending other streaming stocks lower,