about reworking his board to some extent, a board he has been serving under since he took over in april of 2020 by the way, he was ceo the first time loeb came around with a letter, bought the stock, sold the stock, and now buying it yet again. we'll keep an eye on disney including of course the broader markets. that's going to do it for "squawk on the street. t "tech check" is up i'm deidre bosa and today unity rejects applovin both stocks dropping on the news "tech check" has the exclusive we'll have john riccitello first, connie is with us all hour welcome. so glad you could join us on

this monday morning. >> good to be here. >> do you call it a love triangle between unity, iron source and applovin. they're' mediator and unity saying no. >> the first thing to think about is the fact that apple has released new privacy changes that's the backdrop against which all of this consolidation talk is happening. there's a new thing called app tracking transparency. they're trying to enable certain things to happen within apple in terms of tracking and other things not so a lot of these companies are trying to figure out how to react from that. >> how to monetize. >> how to monetize the biggest thing is apple is trying to figure out if they can take more of a fee of what is happening on their platform. with regards to applovin, think of ads in addition to inventory.

do you have as many ads as you can. unity wants more scale and programmability with iron source it's interesting they decided to do that than with applovin they're the bigger resource. >> howard is coming up on the show and he will say why they are dead set on iron horse since their stock was down 8% last time i checked, unity that is. you explained why all of this is happening, apple privacy changes. it sort of put applovin in this position, if unity and iron source come together, what are they going to do it justifies the deal in the first place, but also raises a question, what applovin going to do if it doesn't work with them? >> that is true. it is also important to note apple has a 30% cut they take on certain activity on their platform and a 0% cut on other as applovin looks at the

strategy, they'll take a look at which one of those pieces of activity they're driving through their tools. >> looking at unity shares down 62% with all of these different factors in play, you have the challenges in navigating the apple operating changes and you also have an environment that's changing you have fears of an ad recession and whether gaming engagement will decline as people get out and about more. what's your big picture outlook on the potential and challenges for unit any. >> with respect to the challenges, you've named them, julia. it comes down to the fact these platforms are in an incredible battle on real estate and who gets to charge rent. a lot of these companies are feeling the negative externalities on that. on the positive side of the ledger, gaming is actually still even 10 years, 15 years into this incredible growth area under rated. i continue to believe that unity's engine and the ability

to power the long tail is going to result in major up side >> julia, we've heard from a number of ceos some say gaming is recession proof, some say it's changing. it changes the question, the state of gaming, julia, where it stands. >> there's this question of whether the more targeted digital ads is recession proof so many questions here kanyi, do you think unity made the right call >> i think they absolutely made the right call it's a matter of culture they want to make sure they contain their culture as a game engine first, piece of technology not as an advertising infrastructure piece that comes second. to do that is an ultimately cultural decision which will have long-term benefits when they think of where their customers get going. >> the deal is not done yet. unity shares are not down 7% we have to ask john riccitello is coming up

into one is questioning whether a deal needs to be done, it's just with one. >> yes >> we want to ask you about disney this morning. our david faber reporting in the last hour that third point's dan loeb is in the stock shares on a bit of a pop loeb generating a letter to bob chapek calling for significant cost cutting measures. a spinoff and continued suspension of the dividend he called for a change i spoke to bob chapek about those saturdays and the tv bundle and whether he's worried about an overall decline take a listen. >> we have such great assets, such great networks, such great propositions in the bundle that i think to some extent we're sort of the main factor in terms of how fast that bundle goes

where it goes. when you've got espn, which as you know is the 500 pound gorilla in that bundle, we sort of can help determine which way that bundle goes and how fast it goes so we feel like we have some degree of control of that. >> here he's talking about using espn for leverage to determine when they let go of this holding onto the tv bundle and shift gears over to direct to consumer in some ways it seems like what chapek is doing in his priorities align with loeb he talked about profitability. less perhaps about cost cutting but he did say he wanted to return the dividend to shareholders whereas shareholders shouldn't kanyi, what do you think how is this going to play out? >> i think with respect to the increase in profitability piece, put cost cutting aside, i think there's an incredible opportunity to consolidate in streaming what we've come to

learn, content rules everything. they have an amazing, amazing roster in terms of some of the most inspiring ip. by increasing the bundle by bringing in live sports, by bringing in a lot of the deals that have been signed by hulu to create a strong bundle of content and deliver great services and great software under that i think the idea of having espn and hulu rolling in and having a stronk ger content bundle is critical with respect to the cost cutting, i think that's a defensive view so it's a secular trend that i think we all should be thinking about as technology companies going into the second half of 2022. >> chapek talked about how strong their demand has been he's dismissed concerns there, but i guess it comes down to this question of, you know, these apps that ssets they have performing well. would espn be doing better if it was spun off where do you come down on this

>> it's one of those things where i happen to think that the platform and the platform power that disney has might mean that it's a better asset within their home that said, there are a number of companies where there's these individual assets that are sort of shining stars that need a little bit more cultural freedom and need a little bit more operating freedom to truly grow. it's an interesting case i can see both sides >> at the end of the letter dan loeb wrote the board would benefit from a refreshment it is a well-rounded, very large board of directors you've got representation from general motors, lululemon, oracle, carlyle, master card, nike julia, what do you think he has in mind here what would refreshment be here i'm not seeing any direct tie to advertising. do they need a ceo who has more

experience in that >> certainly they could benefit from having more board members who have experience in advertising. they also have to worry about making sure there aren't too many conflicts of interest that is one reason they have had board members leave in the past. as disney gets bigger, it's such a diversified company in terms of exposure to the parks, to streaming thigh think the risk of conflict of interest is one factor to keep in mind i'm very curious to see who dan loeb wants to add to the board kanyi, is there any hole you see need to fill in the board? >> i think you make a good point with respect to advertising. it comes down to where we're entering streaming era 2.0 we've left the idea of having pure subscriptions and growing on content deals and have to look towards advertising i think somebody who comes interest that world or has a perspective in how to build really great infrastructure would make sense. >> we spent almost the whole block talking about advertising

which leads us into another story that makes headlines that's the apple meta story that they detailed well they held secret talks to strike a potential talks. ads free facebook subscription model that would have given apple subscription revenue since it's listed in its store another permutation, apple getting a cut of boosted posts on facebook. so many different outcomes here. the outcome we got, kanyi, you talked about this, apple unilately up ended the entire landscape. does it look less altruistic privacy. this story makes it look like apple lost they tried to -- sorry, apple lost, trying to make more money off of apps that didn't pay them and turned around and did that, what do you think of that? >> the truth of the matter is --

there's case studies in history. google agreed, we found out relatively recently that google paid apple $15 billion to make safari, you know, the google search engine be the default browser on safari. it's very important for apple to take a fee on everything that they do on their platform. ultimately that's one of the core strategic initiatives they have this idea of privacy in my judgment was a very, very smart way to align consumer interests around their ultimate business intention, which is to make more money. facebook, whatsapp and instagram frankly weren't driving enough income as a function of their volume the vast majority in the boosted posts and in the long tail creators didn't count as the type of revenue they could charge for. >> certainly aligning around privacy is a good thing when you are talking to regulators, making it clear that's what's in your privacy

i am skeptical that people would want to pay for an ad free facebook if they're used to getting it for free, it's hard to convert them to pay for t. certainly there might be a tiny group of massive fans, the core most dedicated user base that would pay, big picture that wouldn't be a big picture for meta/facebook or apple what do you think? >> i think one interesting case we can look at there is youtube. youtube started as an entirely free product there's 2 billion people with log-in accounts on youtube they've beenable to make serious head way with youtube and their subscription product there is cause for hope that at that scale there's a way to create a subscription lane i totally agree that's not going to be the majority of the user experience. >> apple's really been able to kind of fly under the radar when it comes to consumer blowback and regulators do you think this picture is

slowly changing? you think back to the congressional hearings and tim cook was able to sit quietly and zuckerberg got a lot of the heat from regulators. >> there has been a master class from apple pr in how to figure out how to tell a story about their business interests that alliance with regulators and consumers. >> there's cracks now. >> i still believe facebook and google are playing defense and catchup. even to some extent amazon that said because of how extreme this change is going to be for the whole publisher landscape on mobile, there's going to be increased scrutiny for them. >> so interesting. certainly one to watch and a massive, massive challenge for meta and facebook going forward. turning to another part of the market, our next guest says cybersecurity is the name of the game and those out of the loop could suffer telling investors to sell more traditional software names implying double digit downsize for all four. here to break it down guggenheim

senior analyst, john defucci thanks for joining us today. the headline for your note, easy to like software, probably too easy explain your overall outlook >> yes thanks, julia. listen, it is easy to like software it's a great sector. it's got a great business model with recurring revenue in difficult times that recurring revenue holds up, but new sales are not sold there's not a lot of new sales in difficult times we think we're in a difficult time it could be a prolonged difficult macro backdrop that's what we're talking about. we're talking about some of these companies -- listen, people know that software's a great place to be. that's why a lot of these companies trade at the valuations they do and perhaps it's not going to look so great over the next year or so. >> but let's talk about the stocks you do have a buy on, crowd strike, oracle, splunky.

are you so bullish on those and so negative on the others. >> every company is a little different. yes, valuation comes into play every single time, but one of the things you mentioned early in the introduction, you talked about security security's held up much better than other areas of software and we do a lot of work trying to understand what the new business sold in a quarter was it's not something that is just obvious. you have to do -- you have to apply some accounting and some math to it, and you can -- you can calculate that with some relative -- a high degree of accuracy, we think and security did really well in the first quarter relative to the rest of software the rest of software saw a marked dropoff and if you look at the average nonsecurity name in our coverage universe, growth in the first quarter was about 6% for new what we call annual contract values to new business

versus 42% last year versus security was about 39% in the first quarter versus 49% last year that excludes okta which had an issue in the first quarter where they had a security incident, some call it a breach. that's what separates security anyway >> yeah. when i look at your initiations and i look at your sell calls on snowflake, okta, crm, workday, how much has to do with the sheer number of companies we have seen come to public markets over the last few years and in markets still, there's been so much money do you think too much has been made that's unnecessary and now you've got an economic down turn bundling from some of the bigger players like microsoft. >> microsoft is a threat for some of these players, certainly, deidre, but i don't think there's too many software companies out there. soft wear has been on sort of a

secular up draft for a while and we think it's still got legs to go some of these names though, the calls on salesforce and workday, we believe that a software company at sort of its mature stage should have free cash flow margins of around 35%. we don't think that workday can get there. that's one of the issues with workday. all of these companies are great companies. if you are a public software company, you're a great company, but workday has a proprietary infrastructure they're working on that's a big part of their r&d so they'll never hit the 35% free cash flow same on salesforce.com, you look at them and take into account acquisitions, it's been negative even if you exclude slack which last year it's built in 3%

that's -- every one of these sales are not, like -- they're not bad companies, but there's reasons that they're probably not worth what they're trading at. >> i think what you're getting at, that level of profitability and not where some investors want it to be. in this market environment, right, kanyi, software is over valued, you guys love software, not just you, sort of anyone that comes on from the bay area. >> no, absolutely. i think john makes a good observation with respect to what happens in q1 and q2 the interesting thing is we're in the midst of transition from valuing growth and valuing profit they have to adjust. in the course of making adjustments some had a natural structural adjustment better than others. what i think about with respect to whether workday or salesforce is going to be recession resilient or whether or not there's up side there is more a matter of whether or not their

software is fundamentally deflationary whether or not their software fundamentally saves money, cuts costs, saves money think about hr software, crm, these are things you're automating services and you're very manual. i continue to have optimism about those. >> one thing i'm wondering, what kind of consolidation are you going to see john said he expects consolidation. how soon are you going to see big deals and which companies are going to be in play? >> i'm of the belief that salesforce is great evidence of the fact that they are quite comfortable consolidating. >> they can't do it anymore, right? they've acquired too much that it's really hit their margins. we talk about this a lot as well, private equity space, coming in doing some deals would you have expected more at this point ee spligs with markets we're covering >> yeah, i do think that frankly in q2 there was just such a big transition and such a big transition away from growth and

profitability. a lot of people trying to reconstitute their strategies. what i do believe is going to happen now is there are a lot of names trading below their enterprise value i wouldn't be surprised if we saw a lot more acquisition. >> if we hadn't hit the bottom we'll see. we'll debate that later. thanks for being with us kanyi, stick around. you're here for the whole hour coming up, the whales are out. more on tesla. "tech check" is just getting started. as a main street bank, pnc has helped over 7 million kids develop their passion for learning. and now we're providing 88 billion dollars to support underserved communities...

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let's get a quick check on tesla. shares are up to 20 -- up still 27% off of their highs up today nearly 2% they did fall as low as 630 shares mid june. they've now gotten energy. ceo elon musk tweeting tesla has now produced over 3 million cars in total falling as big as

shanghai this is as some dive back in tech leslie picker joins us at the deadline >> lots of whales so far good whale sightings ahead of the deadline, saurus buying 30,000 shares and d1 citing another share of tesla these showcase the long positions held by fund managers on june 30th that's the last day of the second quarter they'll provide some insight into how professional managers capped off the worst first cap of stocks and whether they were poised to capitalize on the rebound that ensued in the subsequent six weeks there have been early filers not everybody pro crass at this

nats to the deadline with soros, d1 each holding. d1 selling down data dog microsoft open door and almost the entirety of its stake in robinhood and it bumped up in snowflake and atlassian. it upped its exposure buying more alibaba and j.b. dotcom and li auto. trimming ev names including tesla and rivian it cut its intel holding nearly in half. first quarter if you recall saw a lot of managers rotate out of broken tech fearing what we saw in the broader markets we can probably expect to see the same in q2 reading between

the lines of what the market did during that time guys >> on the heels of this news, dan loeb getting into disney and the broader conversation about how the tech market is diverse and bifurcated are there any categories, any parts of tech that you think might see some of these whales migrate into >> yeah. it's an interesting point and in talking especially with people who were involved in the activism world, we haven't seen the third point filing we tonight know if he held disney or if it was something he purchased in the subsequent six weeks. i have been asking around on tech and the activism world. they say given the recent selloff we should see more instances of activists getting into tech where historically they've kind of shied away from that and because obviously the valuations have been off in recent years but the recent pull back, at least the pull back

from the second quarter may have provided more of an entry point. so that's something i'm going to be looking out for people who traditionally shied away from tech, are they seeing the entry or did they see it at the end of 2q? >> thanks for bringing that to us kanyi, they are backwards looking. these are moves made some time ago. we've seen the nags dak up 20% everyone is calling this a bear market rally, now they're calling it a rally are valuations looking expensive? 18 times earnings. as we head into another earnings season where demand could be weaker >> yeah, it's still pretty choppy out there you look at a couple of the pieces of news that came out today. the new york fed talking about manufacturing production being dramatically lower than they were expecting there are still a couple of signals that suggest we are not out of the woods yet i think valuations are a little bit stressed going into q3 and

q4 it seems the idea of us being in a full blown recession the way we were thinking of it a year ago have passed. >> maybe that soft landing. unity is up next and why they said no to applovin and why this is a superior proposal with unity. we'll be talking about all of that coming up don't go away. - [narrator] technology transformed the way we talk.

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good morning and welcome back to "tech check. i'm bertha coombs. here is your cnbc update the united states is in a housing recession. that assessment is from the chief economist of the national association of home builders he blames the federal reserve's interest rate hikes and what he calls persistently elevated construction costs the group said the index turned

negative this month. in another sign inflation may have peeked, u.s. freight rates fell almost 2% in july compared to june, that according to a company that provides invoicing services for the industry. a researcher said increased capacity will help big retailers bring down shipping costs ahead of the holidays. pfizer's chief executive has tested positive for covid. albert bourla says he's thankful to have received four doses and he's feeling well while experiencing very mild symptoms. he is also getting paxlovid. this has been the summer of event covid. event covid for so many of us. >> yet another summer of covid thanks, indeed, bertha. unity software rejecting applovin's $17 billion takeover. they will go ahead with iron

source saying that deal will increase value creation for shareholders. john riccitelli joins us you've talked to us about why iron source makes sense. thanks for joining us. explain why the applovin deal did not make sense >> it's a subject we got into with our board, we went into a deep financial analysis, strategic analysis aided by smart advisers on the financial side the clear conclusion is that the applovin proposal wasn't likely to lead to a superiorproposal and we can do better by way of our customers and better by way of our shareholders with ironsource. >> i want to talk about what we talked about earlier in the show the idea that not only is there concern about an ad recession but there is also this question of how consumers are going to

behave and whether they may be gaming less, spending less on gaming, et cetera. what do you see in the market now as we head into the fall >> two quick concepts. the first is we're broader than games. we do a lot outside of games digital twins whampt people refer to as the meta verse i've been working in the games industry for 25 years. while there are ups and downs on what the -- this industry has been growing for 25 years. there's a comparative slowdown when people spent time at home with covid engagement is strong it gets more than 3 billion people to do anything on a monthly basis. i'm bullish on gaming long term. >> a few more details. you said the clear conclusion was that applovin wasn't the right deal what exactly about it did not clear the bar? why is ironsource a better deal,

especially considering that as of now it has a smaller mediation business >> look, it's not simply about scale, it's about shareholder value. what our board looked at was a myriad of issues primarily it's around looking at the financial value for the investor secondly, it's about the complementary nature of the products and offerings that ironsource has versus app lovin. with the ironsource deal we think we do better with our customers and shareholders and we are more balanced the heart and soul of the company around content creation is the other half of the business it's really what drives the force. it was a complete evaluation all of those factors and feel great about what we've come out with. >> is it a complete evaluation, john, does that mean you're not

going to be looking at this job anymore? can't help but note unity shares are down more than 5%. could you continue to have talks with applovin to get a better deem, for this to make a better deal for shareholders? >> three thoughts. thought number one, variations of share price up or down a few points every day we're really looking long term what our board deeply evaluated is where we expect shareholder value to perform the best. the ironsource we proposed and the board recommends that. a vote coming up later in the year for the shareholders. in terms of negotiating with applovin, we have an announced and committed merger proposal out there and that's what we're focused on we think that delivers value and for our shareholders and we're excited to follow that. >> just to follow on deidre's

question as we look at the stocks move. unity is down about 5% it is down 60% year to date. i know you took down your guidance earlier in the year what is the message you want shareholders to have right now about not only this deal but your outlook in general? >> so our outlook in general is very positive. i think you may have noticed our most recent quarter our create side grew 66% and what we really focused on this notion was two key thoughts idea number one is over the course of the next several years we're going to see nothing about growth in real time whampt mean by that is gaming and gaming dedicated to real time 3d. that is a massively growing business for us. the second is we provide the creation tools and the applications of that part of that is monetization

we strengthened that by americaning with ironsource and bringing them on board again, we feel very good about this momentary down circuit are not the primary focus. the primary focus is where we're going long term and the growth story with unity. >> it's interesting because you laid out earlier just how diverse the business is. so it's not just about games and ads, it's also about this meta verse business we've heard from a lot of these companies that are investing in the meta verse and that being a long-term plan and maybe near term they're focused on many of the big terms. whether it's navigating apple's positions and a pull back. i'm curious if you're seeing any pull back of a retrenching that may have been reif you cussed in a more immediate way than they have been. >> first, the starting point i believe the meta verse is a long term story and it's a near term story we suggested of our create business, about 40% you can call

meta verse, the nongaming side of the equation. we have a myriad of customers doing really, really well. it's increasing as a percentage of our business. it's happening now the reason it's happening, we're essentially the plumbing for the meta verse if you are going to build something in 3d, real time, more often than not they're going to build it on unity. that is a present day reality for us and it's a big up side for us there's lots of complexity in the marketplace. the ad side of the business, increased focus on privacy something that i'm a strong advocate for you know, makes for some new challenges but it's some new opportunities. i think we'll see that play out reasonably over the course of the next 2, 6, 12 quarters and out to the long term capi apple remains a strong ad platform i don't expect that to change. >> we're seeing lots of consolidation. is there anything that would make you reconsider the applovin

deal this is an all stock deal. you would remain ceo you wouldn't get as many voting rights, however, so is there anything you would look out -- what would you tell shareholders that may be in favor of this deal >> first off, i mean, i can't really get into hypotheticals. we have a commitment to a great deal with ironsource and that's really what we're focused on >> well, john, we will leave it there. thank you so much for joining us to talk about the rejection of the applovin deal. >> i tried i tried to see if there was anything meanwhile, adam neumann is getting a second chance. next, we are back in 2 this... is the planning effect. this is how it feels to have a dedicated fidelity advisor looking at your full financial picture.

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adam neumann is investing. t the company is expected to launch next year mark andressen will join the board. it is often under appreciated that only one person has fundamentally redesigned the office experience and led a paradigm change in the company

adam neumann andreessen is referring to wework which newman mismanaged the company has lost nearly half of its market value. you can see it trading around $5 now. kanyi, i interviewed adam neumann at the peak. i actually went to a lot of the wework events where they would have all of their creators he is a very inspiring person. you can still create a good business you can spend too much you can have governance issues what are you hearing in the bay area here he is, bay area pretty critical of his fall last time around >> yes there are a couple factors at play the first i guess is looking at what happened to wework in the first place. the truth about wework is it was a cultive personality going too far and an issue of investors not frankly being as judicious as they could have been, as they should have been with the growth of the company

the vast majority of investors on the board when they were going great were totally cheering for effectively redlining that business and it turned around and became a disaster we all shared some culpability to that culturally it's not something you can place on adam neumann's head the second thing to notice from my vantage point is there are certain problems that are really, really hard problems to solve and one of those is the fact that there is not nearly enough housing built in the united states. it's not something that can be solved with an incrementalist approach it needs a bold, visionary approach as for whether or not adam neumann is -- >> and mark andreessen. >> you can't tackle this problem without that approach. it's clear we're in a recession. we haven't recovered from 2008 this is an urgent concern and an issue of national security i'm glad somebody is taking a bold approach to that. >> so interesting, kanyi

looking at adam's track record it would be fascinating to have him back on now. the fact that andreessen is so willing to put so much money into it. i was struck by the quote that he wrote, love seeing repeat founders build on past successes by growing from lessons learned. kanyi, aren't there other people innovating in this space is he the only one >> there are, indeed you know, it is a curiosity but one of the interesting strengths and compelling so when any given founder or any given sector doesn't work, the money comes back in and gives it another try. as to, again, whether or not adam neumann is the right person for that is really in the eye of the beholder it does speak to the fact that people who are able to command capital continue to be able to command it to some extent distended from it and he seems to have that capacity. regardless, i do most importantly think so long as

there's a bold visionary approach, we as society are doing the right thing. >> is he humbled enough. we'll see as this goes on. >> absolutely. >> kanyi is skeptical wehether he's bold enough >> we should get him back on adam neumann you have an invitation to talk to us on "tech check. affirm shares are off their highs. they're still bullish y. they think it might take a bullish to prove they're not wrong after the break. stay with us tion, the world's most innovative eyewear, turboflex. turboxflex frames are engineered with a 360 degree hinge disguised in the design. for maximum comfort, flexibility, and performance that stands the test of time. now, strength meets style. invest in the best, turboflex.

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time now for tech check on affirm shares are down and competitio ongoing volatility, so what will it take to prove the street wrong? how about a full blown recession. at least that's according to founder and ceo max levchin, he still has faith in the buy now pay later company's ability to lend money and control delinquencies throughout a potential slowdown tech check is back after a quick break.

some pension funds feeling the pain from crypto's big drop this year. they've been pouring millions into cryptocurrencies. now they're also some of the biggest losers with bitcoin and eitther, has t story changed once again, it's acting like it always has, like a risk asset, but bitcoin hitting 25k. >> yeah, where do we go from here >> the way that i think about this is it feels a little bit like 2000, and what that means is we may have just come out of an asset bubble in crypto, and it took ebay three years to recover from their highs, but then they ended up going 10x

it took amazon eight years, and they ended up going 150x it took oracle 14 years. i think there's going to be a recovery from some, cisco never recovered. >> thank you, i was just about to go there with you >> and there were some you never even heard of. >> they were punchy, the majority of them went bust that's what's happening here you're seeing the bankruptcies coming you're seeing the deleveraging coming you're seeing a lot of the unwinding of the activity happening over the course of the last three years, so much of crypto was so over levered with each other and so insular. you're seeing a lot of that unwinding, the fundamental value is going to have to interact with the rest of the assets in the real world. >> i know you guys are still investing, like many other vcs taking this as an opportunity to continue to get into the space, if it is going to be like the internet and hugely profitable and successful one day what is that fundamental value >> four pieces, composeability, immuteability, decentralization

and efficiency in each one of those they are in tension with the others. those are somewhat philo philosophical, what we mean is we're building a new type of internet stack that takes a while that needs to be subsidized. >> has anyone achieved it yet? >> i believe there are a number of green chutes where you're seeing that real activity. a couple of decentralized exchanges are fundamentally, substantially more composable and immutable, and you look at what ftx is doing and how they're trying to think about commodities in a different way you think about companies like gold finch, i see there are green shoots there absolutely. >> if you want more tech check on the go, follow and subscribe to our podcast, listen anytime, anywhere, tech check is back in just a moment.

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we couldn't stop talking about it during the break. my takeaway is that iron source

made sense for a lot of reasons. your takeaway, though, is that it's smaller, easier for them to digest and stay true, right, to what they do. >> absolutely. and he said something really interesting which is that 40% of the revenue and the activity on the content side of the business is coming from the metaverse this wants to be a content business building the content infrastructure for the next generation they don't want to be an advertising business if they buy something too big, they might suffer from indigestion. >> advertising is a dirty word almost >> especially among gaming developers, totally. >> now, one more thing before we go, and that's retail. a big week for the sector as names such as walmart, target, home depot, lowes, and kohl's get set to report results. they should gifve us a good rea on that slowing consumer that's hit tech results curious what you're looking for here, last quarter walmart said higher costs, supply chain troubles and higher inventories ate away at profits. what do we think is going to

happen >> i think a lot of it has to do with whether or not consumer demand can come back, and whether or not consumer demand can come back from the softening of last quarter. the fact that walmart is cutting costs, means that this is something substantially broader than valuations. substantially broader and so i believe that we may be fighting away from a recessionary environment here. >> can they be more of an amazon, which already did a lot of the cost cutting. it will be interesting to see the nasdaq turned it around up 4/10 of a percent. let's get to the half. >> welcome to the halftime report, i'm medilissa lee, stoc recouping half their losses. can this rally keep going with new fears about china's economic growth we'll debate that and much more. our investment community, fire stone, steve weiss and joe terranova, let's get a check on these markets. stocks have turned positive, the s&p 500 coming off its fourth positive week in a row nasdaq clocking in