you have to have the right number of captains and the, you know, the other people within the planes ready to go that's not always the easiest thing to do. so it's a training issue, leslie >> yeah, you definitely don't want to get an an airplane with a pilot who doesn't know what they are doing that does it for "squawk on the street." "techcheck" starts right now good morning welcome to "techcheck" i'm carl quintan quintanilla. early results in a new $20 billion deal sending adobe plunging today we will talk about that. is a deal making renaissance coming something to debate. and netflix a rare outperforming today. where evercore says buy now as shares top more than 5% although the nasdaq down about 1.3% as yields today remain stubbornly high starting with the deal of the day, adobe shares plunging after releasing earnings ahead of schedule, the top line missed, bottom line was a beat

guidance for the current quarter mixed by the company announcing it will acquire figure ma for $20 million. a closer look. >> the deal is really all about the top line and accelerating top line you know we are an extremely profitable company we have some aggressive goals in terms of being able to make this accretive in year three, which is rapid as well as driving top-line growth. i any from the perspective of shareholders we willoff set dilution while the transactions underway we believe that it rapidly actually enables us to accelerate our bottom line eps as well. >> adobe planning to integrate features from photoshop and that cash and stock deal expected to close in 2023. john, i'd love your thoughts, especially given, i don't know,

the argument that they are paying a rich multiple >> they are paying a rich multiple when you consider that this is more than 10% of adobe's market cap i am not saying it's a rich multiple because it's not worth it this so potentially a transformative deal. if we think about the size of it, this is a little smaller than microsoft nuance. sorry, a little bit big ter than microsoft nuance smaller than facebook whatsapp and in league of microsoft linkedin or salesforce slack with that $20 billion price there. and given adobe's size, that's significant. figma has managed to both be important kdesign-wise to a productive community, to a kind of product design community, to the software community so it's important design-wise and it's a productivity app which starts to potentially get it into some competition with microsoft, in figma a lot of

workers will build workflows and ways to hand off design work from those doing more of the interface design to those with the coding there is a potentially larger addressable market but also a software language issue here figma has some simplified ways of designing that are different from what you do in photoshop, in in design, right, in dream weaver and some of those other things that adobe has built or acquired how they integrate all that and make to make sense is going to be important but the addressable market is opening up here in a way similar to when adobe moved into marketing with the omniture buy. >> you said something key that th that is has become a hugely important product. the question is, is it become a throat to adobe? there was a great article over

the summer, a cnbc reporter here in san francisco, and he talked about how figma had become the sort of cult product within microsoft. people really, really wanted to use it and it come boapetes wite of adobe's products. a lot of complaints you hear from adobe from wall street analysts is that the competitive landscape is changing. a younger demographic of designers and engineers don't want to use adobe as much as some of the newer products did adobe have to make this move, john was the competitive landscape, what wall street has sort of been valuing the company at, which is a lot lower, did this make this is a defensive move from adobe is it possible they overpaid >> sure, it's possible they overpaid if they don't integrate it well and grow according to plan. talk about this being a threat to adobe this is used inside microsoft, which makes productivity software, which makes, right i mean, it's also a threat to microsoft potentially if

somebody who is less productivity focused gets a hold of it and builds share in that team productivity atmosphere so, yes, it is potentially a threat to adobe, figma was, on its own. this is a company that's growing annualized recurring revenue double year over year to 400 million in the current year expected it's also potentially, if this falls into the wrong hands, salesforce, microsoft, or anybody who is big enough to acquire it, then they could potentially move in on adobe here is adobe, been pretty prudent and careful with m&a, talking about that the beginning of the pandemic, saying this is a big swing we need to take. >> you could imagine microsoft wanting to get a figma into its own hands. of course, the regulatory landscape is trying to get a deal done, a bigger one with activision why not give it to a partner like adobe so like you said, it's in

different hands, like a google or somewhere elsewhere it might create a problem. >> we haven't gotten to the deeper probes that activision, microsoft are getting in brussels and london. great to have you. valuations were getting a little more reasonable on the q2 call do you think this is reasonable? >> well, i think we should understand what dee pointed out, which is a significant, was a significant competitive threat to adobe the design factor in everyday applications and enterprise applications cannot be understated. when we look at the number of designers that now are a part of product teams, that ratio of designers is increasing. it shows the fact that design really matters in fact, you could argue design is table stakes. the collaborative nature of figma really speaks to the way that this younger generation of

product designers like to work collaborative. we saw tailwinds during the pandemic when you look at the design community polled, a third of people were using figma. after the pandemic two-thirds were using figma this was a significant threat that i don't think could be understated. the microsoft factor and the regulatory aspect of activision, regulators will take a look at this, too, because this is going to consolidate a lot of the people that are building products that are design related. >> doesn't sound like you think adobe had much choice other than to close this deal >> i don't think they had a choice i think this was very much both a defensive move, but also an eye towards this trend where design rules and design matters. the best products that are available, whether for consumers or enterprise, have the most elegant design it's table stakes. >> good morning. it's defensive, but it's also

more than that, isn't it because you have got son adobe products now, many across creative cloud, that have collaboration features built in. you can share versions of a product with your team figma has managed to put that productivity experience and that team experience more built into the interface. so it's a place where people who aren't design centric felt more comfortable. if adobe expands the enterprise share there beyond designers but as part of the design process, that's different from what they have had with documents, withaco bat. that's different from what they had inning marketing and their adjustable market gets larger, doesn't it >> your comment speaks to going back to when the company was founded maybe over five years ago. one of my good friends, adam nash, who is the best products person i know, he was one of the

early investors. congrats to him, by the way. he said that everyone was missing fact that people thought the design community was small if you look statistically, probably only showed 100,000 designers in the work force at that time. what everyone missed was this aspect that was brought up in your point, which is that the product figma is so simple to use, it brings in people that are not designers as well. so from the initial ideation of a product to the first design to then handing that off to the engineers to then all of the people that need to be involved in selling that product, everyone can get involved in that process collaboratively over the cloud so you don't have any issues with trying to determine, like, okay, which version am i on? you don't have to download any software and install it on your laptop these products that adobe uses are actually difficult for people that are not designers to use. so the collaborative nature i think to your point actually

expands the market where everyone can become a designer what does that mean for asana, doing similar things software for teams, productivity software to teams what does it mean for larger players like microsoft and salesforce, microsoft and teams, salesforce now with slack, that would like some of that design conversation happening within their environments >> yeah, i think when we look at the process of designing products, it's more design centric. when you think about slack, and figma allows integration of slacks, there is this aspect of collaboration that is specific to this use case is there room for some other products to exist, some to incorporate in absolutely what figma nailed is the design of the product for design. and i think it's going to be very difficult for another

product that was built for the frowned up for another use case to try to encroach on their territory. >> you are kind of pointing to two other companies, vox and drop box they made their names on being pure cloud storage company but they have been trying to get in collaboration space and investors haven't really bought that story yet are you pointing to them as well >> no, i think, look, i really like the way that figma built out their product. i like the way that they built out a product that was really kbeerd towards community by the design of the product itself and that was able to actually get the groundswell of momentum to pull in all of these people and then layering in again that point that john made about the fact that non-designers can also get involved in the process as

well. >> lo, finally, what is the risk that adobe actually makes figma worse for those that love it i was seen tweets from some developers saying the point of figma was it was not an adobe product. they pointed to another acquisition, fireworks, and said that adobe left major bugs and didn't fix stuff and eventually discontinued it. do you think that that's a real fear for that sort of cult status it currently has? >> yeah, look, these are always some of the challenges that comes for that post-m&a integration. the promise is sold to the shareholders, but typically the customers in this scenario, which you point out, this passionate community, that's always the biggest risk, is that the, in this case, this was the anti-adobe and so the fear for those types of passionate users is that, oh, my god,ness, the company that we didn't like acquired our baby

and now they are not going to know how to treat it and treat it well. >> gordon haskett says figma was founded ten years ago by a couple kids who graduated from brown and they are now getting $20 billion. shows you the strength of some of these start-ups thanks so much >> and we keep checking on adobe. it was trading down on this. i should mention down about 17 plus percent heading in the other direction this morning is netflix. up more than 4%. our next guest upgrading the stop to outperform with a survey indicating 20% of churned users will return to netflix once a cheaper option becomes available. joining us head of internet research mark mahany on the cnbc news line. mark, how much of this is good news that people will return for a cheaper option or bad news that it takes a cheaper option to get them back >> good question, john

i think it's necessary news. i think netflix almost painted themselves into a premium price corner i think they have the premium product when it comes to streaming in the market but they have never given people a discount plan. we tracked this for a decade, but the last five years you have seen greater price sensitivity amongst netflix customers. it's the biggest reason people churn. this move in one fell swoop you get a way to potentially increase rpu and a way to retain subs we are and reattract those subs who schurned off. the question i have, why didn't netflix do this a year or two ago? but that's the past this is one of the most identifiable catalysts we upgraded netflix. >> the cheaper option and advertising component that they can achieve long-tail scale

within their business with premium prices though. do you boy that and why? >> well, you know, a real eye-opening moment for me and investors, too, i think, should have been when we you a the rpu, the ad revenue that the other streaming services were generating some five to $10 in ad revenue per user on top of the subscription prices. i don't see any reason netflix can't monetize just as well as the other services get this they have 220 million premium subscription customers worldwide. that's a prime audience, like amazon prime you are talking about a global, like brands that want to launch a global campaign, netflix is probably a great platform for them i don't have to bleesk that netflix can get premium ad prices but i bet they can the way the setup on the stock was simple lay that the market wasn't assuming any growth out of this ads business i find that hard to believe they can't get good growth, can't get

more subs. and there is a wild upside case. if they get the premium dollars for gloenl brand advertisers with a prime-like audience, i think there is a lot more ad revenue than the bullish case lays out i think risk/reward is hi lie asymmetric. >> there are reports of large advertisers who would be onboard. what do you think the street's tolerance will be fortune, and is there going to be pressure to inflate the content even more to make thasure schachurn remains reasonably suppressed. >> churn is kind of issue number one. if you can't manage churn, you can't run a successful subscription business. netflix has done a decent job with this over time. but they have, every year, as -- every year over year they incr increased prices they increased churn rates. also challenges expanding into asia-pacific where i think an ad

supported model will do better than a subscription model. there are a lot of potential wins if netflix executes well. the fact that they are paired up with microsoft reduces some of that execution risk. the fact that they hired excellent outstanding executives from snap i think reduces that execution risk that's how we came away. will netflix be able to generate a couple of billion in ad revenue in three years i think that's high probability. could they generate over ten that's a possibility either the probability or possibility is in the shares, that's what makes the risk/reward so interesting. >> back to that piece about content spend, what do you think the trajectory is for netflix the next few years we talked about this before. a lot of the content is bingable, maybe more reality versus prestige tv how does that look going forward? >> they talked about you -- one of the things they said this year they want to keep the content in the zip code of 17

billion. netflix has never been a zip code company they were always amping up content spend every year, 10 billion, 15 billion, up to 17 billion. my guess is theyplatin out for a year or two and then increase again. if they get the ad-supported subs on to the service, it gives never mo them more revenue. but i also want to caveat all this by saying i don't expect -- this is not the netflix of last decade when it was a monster spot i think we have a it dislocated stock that has a new growth initiative, it's a rare catalyst in the space, that's why we're enthusiastic on it and i think they can continue to up content spend over time and they spend as much or more than anybody that's why the content is better than anybody out there. >> i want to go broad for a moment i know adobe isn't exactly squarely in your coverage

universe but this is a big software deal that they are attempting $20 billion to buy figma and adobe does reach into internet and into advertising with their marketing plays what does this signal about this time in the market, even though adobe's stock is way down from its highs and the valuation on figma still by historically -- historical standards pretty rich >> well, i'll try to answer that this way, which is this is a tough time to make a bold initiative in advertising of any form, advertising seems to be under increasing pressure. so the management team is thinking long term making a major advertising initiative now. why not? we should be thinking a year or two out. the ad market i think will get weaker before it gets better so these kind of initiatives will look worse, look poorer, whatever, the next six to 12 months beyond that, you are tapping into new -- the market for

advertising is still well intact they are creating new tamms. they are expanding their total adjustable markets and some of this is just green field revenue opportunities for the companies. adobe's done very well in this market i think netflix -- netflix is going from zero to 100 and it may take them three years but they will go there in advertising. so i find the space interesting. i know near term it's not. if you are willing to look out as a management team one to three years, you should absolutely be investing in digital advertising. >> mark, appreciate that one of the top s&p gainers today. the president making some comments about -- and appearing with negotiators who brokered that railway labor agreement let's take a listen. >> good morning, everyone. as you might guess, i am very pleased to announce a tentative labor agreement between the railroad workers and railway

companies. this agreement is a big win for america. and for both, in my view i want to thank the lead negotiators from the labor movement, the brother locomotive engineers, train men, air and rail and transportation workers union and other labor unions this is a bin for tenses of thousands of rail workers and their dignity. during these early dark uncertain days of the pandemic they showed up so every american could keep going they worked tirelessly through the pandemic to ensure that families and communities got the deliveries they needed during these difficult few years. because of the labor agreement those rail workers will get better pay 24% wage increase over the next five years improved working companies peace of mind around their health care by capping the costs

that workers will have to pay. it's about the right to go to a are doctor or stay healthy, make sure you are able to have the care you can afford. it's all part of this froemt agreement. they earned and deserve these benefits this is a great deal for both sides, in my view. it's a victory for railway companies. i want to thank the lead negotiators from the railway, the national railway labor conference and our major rail companies. these companies also played a critical role in keeping america moving curing the pandemic and that's not hyperbole it's a fact. this agreement railroad companies will be able to retain and recruit workers. they will be able to continue to operate effectively as a vital piece of our economy they are really the backbone of the economy. i have a visual image of rails being the backbone i mean, literally the backbone of the economy so i think the unions and the rail companies for negotiating in good faith. they have been up for 20

straight hours through that negotiation and for sticking with it, especially the last few days in fact, the negotiators here today, i don't think they have been to bed yet. together we reached an agreement -- you reached an agreement that will keep our critical rail system working and avoid disruptions of our economy. i'm grateful, grateful for the members of the administration who worked tirelessly on both sides to help get this done. i especially want to thank labor secretary marty walsh, card carrying union member and the first union labor secretary in decades for his tireless -- [ applause ] >> this agreement is validation, validation what i have always believed unions and management can work together can work together for the benefit of everyone. they are traveling now a number of them up but i want to thank secretary of

transportation pete buttigieg, deeply involved along with deply labor secretary julie suh, direct of national economic council brian dietz and celeste drake for this commitment and hard work. to the american people, this agreement can avert a significant damage that any shutdown would have brought. our nation's rail system is is the backbone of our supply chain. everything you rely on, and it's hard to realize this, everything from clean water to food to gas to every day -- i mean, liquefied natural gas to everything -- every good that you need -- on a rail delivered to where it needs to go. with employment at record lows and signs of progress and lowers costs this allows us to continue to rebuild a better america with an economy that truly works for working people and their families today is a win i mean this sincerely, a win for america.

so i want to thank you all for getting this done both business and labor. thank you, thank you, thank you. and may god protect our troops thank you so much. [ applause ] plan. >> that is the president in the rose garden with negotiators who put that deal together reportedly around 2:30 in the morning. kay will has been following the story you can sorer t of see the messaging. complements from leader mcconnell, unions in detroit yesterday and now this notion that we are literally making the trains running on time and certainly the administration and unions and railroads avoided the worst case situation there will be kinks getting commerce back up to speed after agriculture goods were slowed in shipments and hazardous materials were not shipped throughout the week as they await today see whether this

deal would come together white house officials say president biden was frustrated throughout the course of this week and recent days the railroad companies simply wouldn't just offer the time off to these workers they had been asking for for months. in recent days, despite taking a neutral tone inside the negotiations, president biden used his public appearances to call for union work he is to get the credit that they deserve even in some points name checking the business roundtable in the chamber of commerce for their suggestion that congress should get involved. while this is a win as the president says, it is also a face-saving agreement for the administration the impact on the economy from this shutdown, if it were to happen, would have been large. jason fermin, a former white house economist, said this would be the biggest most rapid most devastating impact to the supply chains that one can could possibly imagine. >> this is also an administration who talked up its ties to labor and not being able to broker a resolution would have been equally damaging guys >> kayla, i wonder how you think the white house is thinking

about wages overall. obviously, they are supportive of union efforts to keep wages becoming even stronger, but that is clearly something that is resulting in a headwind for the fed at least >> it's a double-edged sword for sure and the white house has had a hard time distilling the message on wages and has gotten a lot of push back at even the slightest suggestion that wages should go down in order for inflation to get in check when you talk to the unions about it, they note that these wage increases of 24%, that's not 24% in one pop it's about 14% immediately some of which is retroactive pay. this is over the course of five years. and they argue these workers went to work during the pandemic they could not work from home. they had to forego pay increases for the last three years when other industries saw significant pay increases and that this is their due that is coming to them after several years. >> all right kayla, thank you turning back to software i spoke with several ceos this

week about what areas they are spending more in from a strategic perspective despite recent cutbacks and spending pressure here is what the ceos said >> a lot of people in the customer business are running on legacy instruction they could save money and use their operating costs a bit if they modern size infrastructure. ironically, in this environment it puts more pressure. if you are up for storage refresh on your hardware, would you pspend the money on other storage area or build a cloud operating model while saving a ton of money probably the latter. that's our bread and butter selling model. we are leaning in more on that front. >> retention rates are strong. it gives us confidence to go to market to acquire new workloads

as well as to continue to expand the capabilities of our platform you are seeing us invest in new features, announcing more features when you have upcoming versions of our software and so it's both an investment in r&d and sales and marketing our general expense envelope has not changed since the beginning. year we are adjusting for the macro environment, making adjustments in terms of some people doing better, so we are doubling down there. some projects not going so well, so pulling back and-in investing elsewhere. we are investing heavily for our growth. >> in essence, part of this, they are trying to get customers to rip out what they've got and replace it with newer technology and this is going to be particularly important leaning into even to sales and marketing where they think they can gain share during this period. >> interesting time when companies are looking to costs, that they invest in the right

technology you are essentially saving costs down the line. that's a pitch they are making a news update now. >> here is what is happening president biden celebrating the tentative deal to avoid a rail strike that could have cost the u.s. economy billions of dollars. he welcomed negotiators who the white house following 20 hours of straight talks leading up to the deal jobless claims unexpectedly fell in the latest week to their lowest levels since may. meanwhile, retail sales posting a surprise gain in the month of august as americans spent more on vehicles, groceries and clothing however, some analysts say the report shows some signs of weak demand there was a downward revision to july sales. humana shares surging, up 7%, raising profit outlook for the year citing lower medical costs. they also gave an eps guidance for 2025 that is well above estimates. and tennis legend roger federer says he is retiring.

he won 20 grand slam titles and was ranked the number one player in the world for nearly five years in a row just incredible. he says his latest farewell tournament will be the labor cup in london next week and, guys, it comes weeks after serena williams announced her plans to retire carl >> we'll see about that. still some theories out there. thanks meantime, adobe's $20 billion acquisition of figma is the tip of the m&a iceberg this year. so far we have seen blockbuster deals from microsoft, 69 billion for activision, broadcom vmware, 61 billion along with smaller deals. private equity firms like vista. google koopg up mandiant for six. the question for investors is who is next. adobe's productivity play could spell chdanger for for

when you consider the concurrent pressure to buy back shares. how does buyback and m&a co-exist in this environment >> yeah, and i'm not saying asana or sam sarah are going to do deals they are found are led i was talking to the founder and ceo of sam sarah a couple of days ago it's interesting the reason why the deals are happening. we talked about the defensive and aggressive nature of this adobe deal for figma opening up new markets, maybe transitioning some existing users who are out there in the marketplace into a deeper relationship with their software if you look at pro core, for example, which is in construction management cloud and saas and look at something like an autodesk, which is in another part of that value chain, you can see how some of these things could hypothetically fit together and how there is perhaps more value in some of these market caps

that have been beaten down than is apparent right now. >> not just public markets we have seen that sort of come through to private markets adds well it does lag. you are seeing the valuations either through funding rounds or internal 409 as come down. that was figma before reaching the public markets because that ipo window remains firmly shut, decided to go this route you look at another company, john, like data bricks which is very loved but a large company, loved by the enterprise tech community. could they potentially have an exit for their vcs through m&a activity it does raise the question which we talked about earlier, carl, is that regulatory environment who actually has the money or the stock price to get such deals done >> right and the patience, right? we heard that from day one when the activision deal was announced, john. >> yeah. meanwhile, m&a is not the only part of tech that's under the

watchful eye of regulators affirm is in the cfpd sights this morning what that means for the stock as shares sit 87% below their highs of the year. back in a moment don't go away. (driver) conventional thinking would say verizon has the largest and fastest 5g network. but, they don't. they only cover select cities with 5g. so, for me and the hundreds of drivers in my fleet, staying connected, cutting downtime, and delivering on time depends on t-mobile 5g. and with coverage of over 96% of interstate highway miles, they've got us covered. (vo) unconventional thinking delivers four times the 5g coverage of verizon. and it's ready right now. t-mobile for business.

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we have been talking about a retest of 3,900 for the past few days 19 points as we're down two-thirds of a percent on the

s&p. nasdaq though bearing the brunt of today's selling, down more than a percent >> yeah. meanwhile, the crypto window hasn't scared everyone joining forces and launching a new crypto exchange. the venture backed by sequoia capital and paradigm joining us the ceo of the new exchange, formerly an executive at citadel thanks for being with us today edx builds this up as a safer, faster, more efficient way of trading digital currencies explain to the audience how you are different than a crypto native exchange. >> i think one of the key differences is we are not going to have direct retail accounts we will be the venue for investors who want to trade their through trusted intermediaries like fidelity, schwab, or any other retail dealer. >> you have a bench of executives that come from the traditional finance world.

do you need more crypto leadership do you have anyone who has been operating in the crypto space exclusively for years? >> we do we do. we have a mix of people from traditional finance as well as those that are crypto native and have a ton of digital experience. >> any names >> so we announced yesterday that our general council is david foreman, who is formerly head of legal for fidelity digital assets we've got tony -- who was at -- and another digital exchange a then a couple of hires that are finishing off their current employment both of them have extensive digital experience and we will announce those names as soon as they finish thundershower last days. >> and you guys are an exchange, but you need someone to actually

hold the coins you guys are leveraging a network of select digital custodians what does that mean and which ones are you using and how did you decide on them >> we are going to announce one of our custodians is fidelity digital asset. a second we will announce shortly. the one that -- one of the key differences between our exchange and many of the other exchanges out there in addition to not having direct accounts is that we are not going to be vertically integrated. so we won't have the same conflicts of interest and other issues that some of the digital exchanges have we are going to have separate custody and exchange matching. >> how do you judge -- >> sorry. >> sorry especially over the last few months, you have seen some digital wallets go bust. people can't take out their actual bitcoin or whatever coin it is. how do you decide which are

trustworthy and safe especially if you are leveraging a network of them? >> we are finding someone that we feel really good about. and i think that -- you point out that there are some issues with the market structure in the current digital asset environment. and what we're planning to bring is many of the investment protections, many of the most efficient processes for traditional finance into the digital world so that we can reduce costs and give investors much more efficient execution which allows them to keep more of their dollars. >> jameel, thanks for being with us thank you. meantime, are live sports the future of streaming? we will discuss with the nfl's media and business chief in a moment "techcheck" is back in two

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buy now, pay later players like affirm facing hyers costs, lower consumer spending and now potentially regulation kate rooney with the latest. >> that's right. the agency really wants lenders like affirm to be regulated more like credit card companies and plans to issue some new rules around that. in a report out this morning, the cfpb calling out consumer

risks and installment loans, highlights a l.a. county of consistency across some of these providers, late fees and says lenders don't give credit info to some of the agencies. they may not have the full picture of someone's liability data harvesting, apps and lenders are app and website driven the director telling reporters that generally there has been separation between banking and commerce, but as big tech style business practices are adopted in payments that separation can go out the door, as he put it. the report also shows some of the growth in the sector americans took out $24 billion worth of loans just last year. that was a tenfold increase from 2019 ain i had that growth there has been a lot of new march pressure they point to a drop in revenues from merchant discount fees and sop of the increased credit losses as well affirm and clarn that saying that they give lower cost options to consumers, work with regulators the report acknowledges some of

the lower costs. affirm down 75% this career and then clarna slashed by about 85%. >> maybe not surprisingly affirm shares are up half a percent and if you read between the lines, there wasn't actually a clear call for action. we know that regulators move incredibly slow and also it wouldn't necessarily be a bad thing. one of the knocks about buy now, pay later, you can't use it to build credit. >> the question is whether had give them more oversight and companies like affirm would say they are okay with that. they want to work with the regulators and they have in the past it gives consumers lower cost options and more opportunities to build credit if in fact they were reported it it's not consistent. affirm it's one of the issues the regulators are calling out. >> they don't necessarily love the legacy players, the credit card companies, because they have thane other set of issues what is the most likely thing to

come out of this when are we gonna get it i know that's a big question. >> and we should mention that mastercard, jet propulsion laboratory, amex are getting into buy now, pay later. it's consumer driven you look at the growth it's not going away. they are not going to shut it down they will still exist. the timing hthough is the big question it took six months for the report to come out new rules and when do those get implemented, does it take an act of congress. >> and then apple, so fascinated what they are trying to do in the space, use their own balance sheet. they wouldn't be under the purview of regulators? how does that work >> that's a great question in terms of how their balance -- they are not using the partnership model that we see -- >> the banks. >> right so it's interesting that apple is not being called out when they talk about big tech practices although data harvesting and privacy is something that apple has taken a stance on and said we are not going do that. shocked if that didn't apply to

payments as well one thing, too, it's been a low march business but as interest rates go up that could be a boost if they are holding higher balance on the balance sheet it's getting more competitive out there. >> interesting to see it roll out. thanks. >> carl. meantime, guys, a gut check on pinduoduo a top pick for q3 of this year, to say pinduoduo has been an enigma would be a considerable understatement beyond manage's vague picture, they have executed strongly and expect that strength to continue the stock a rare tech name in positive territory for the year. up over 20% since january. 90% of analysts are calling it a buy. the dow is down about 75 still hovering just about 3,900. back in that moment.

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built for now.

. sports rights are definitely in focus as a new nfl season gets under way monday night's game smashing espn viewership records. our julia borstin joins us to discuss it all >> the chief business and media

officer for innfl, thanks for joining us ahead of your big game tonight on amazon >> thanks, sorry about that. that is a good game tonight. >> glad to have your audio there. so let's talk a little bit about viewership before we dig into the amazon question. viewership of 5% in the first week what's driving that, and do you think those gains will continue? >> look, i think what's driving it is pretty simple. we had a fantastic week of football i think this is one of the best weekends we can think of as far as action on the field we had seven games decided by a field goal that's the most i think we've ever had in a kick off weekend we had 11 games going into a fourth quarter looking to score. where the football is good people will watch, so they not only watch, but they watched longer >> the question, though, brian,

is how many people are going to be watching on amazon? i know there's a lot of concerns ratings are going to drop for these thursday night games far below the 16 million people who tuned into the games when they were on fox last year. how low do you expect those numbers to drop for these amazon games, and what will it take to start scaling that digital viewership >> yeah, i think -- i don't know what the number will be, but we fully expect to be below broadcast. to me, julia, this is not uncommon not unlike 1987 the nfl put a package of games on a little known network at a time called espn, and espn was in 45 million homes at the type. we did not expect to have broadcast type ready event i think a decisionto put monda night football on espn was a smart one, and i think this one will hold up as well in the sands of time. we're not obsessed with a number we think it'll be lower, but we have full confidence in amazon

that number will grow and get into the trends of digital i think these digital numbers will at one point -- i can't tell you when -- will merge with the same viewership of television that's the digital growth we all see. >> there's no doubt viewing is moving over to streaming, but there's also no doubt a lot of the tech companies looking at your media rights including nfl sunday ticket, all the rights up for grabs right now are going to be watching these ratings very carefully. what's the status of your negotiations with some of the assets available now, sunday ticket who's in the lead? is it google, youtube, apple or amazon who's likely to get those rights >> i'd love to handicap it for you but i can't or won't i've got to tell you we have a lot of good alternatives we've been having conversations in the market. since i've been here it's probably some of the more complex and strategic relationships we have. we've said publicly we think

sunday ticket is a package ripe for innovation, and we think digital will do that whatever you see, whatever we announce we're going to do i think you'll see a much more digitally focused sunday ticket. i think you'll also see we're taking plans to take our owned assets into the same digital trend as well. our fans are increasingly spending time on digital, and we'll be there with fantastic products to serve them >> well, we'll watch to see which of those tech giants buys up those rights to sunday ticket another new launch is nfl plus how has that been doing? how many subscribers or users do you have, and what's your plan for that business? >> it's been doing great nfl plus is our first step and it is a step into direct to consumer where you can get archived nfl content you can get all of your in-market games on a mobile phone or tablet. these are rights we've carved out for some time. we were going to move into direct to consumer and digital, we're very happy with it

we're on plan. we don't share the numbers publicly, but we feel good where we are and we're on plan and the important thing is we have -- look, we have a media strategy that is based on reach. we broadcast contracts we're very happy with. what you see with nfl plus and what you'll see with sunday tickets and other assets is a push into what we see will be the future which is combination of tv linear distribution along with linear distribution >> thanks so much for joining us ahead of the big game on amazon tonight. i understand you're about to get on a plane with jeff bezos and we'll let you go thanks so much for joining us. >> all right, julia, good to see you. >> one more thing in the show before we go, if you're struggling to return to office, well, so is tesla and not for the reasons you may expect cnbc out with a deep dive on the company's struggles after the ceo elon musk informed employees they'd be expected in office a

minimum of 40 hours a week three months later employees have come in, but there's not enough space employees of the company san francisco office telling cnbc a shortage of chairs, desk space, parking spots and more has forced the company to set staggered in office schedules with some workers even taking phone calls outside due to the crowd. guys, i don't hate this. i mean, it tells us tesla hasn't been spending huge on monitors and new computers. thoif they've been scaling back office space. it does tell you when the ceo tells people to come in, though, not maybe everybody is onboard or in line >> it would help if there were spots available. i guess to the extent there's room in the parking lot people can work in their cars, right? you can plug in, like plug the car in and then plug into the car and -- >> i mean even tesla's got an extra monitor. there you go >> one thing we haven't discussed, guys, was this piece in the journal yesterday, john, that the company's pausing its plans to make battery sales in

sat germany as they look to the u.s. try to get some of those credits from the inflation reduction act. >> you know it's funny how federal policy helps some times. we'll see some elon actually gets that invite to the white house. who knows what he'll say, but, yeah >> buttigieg said a quote last week he would hug him. we'll see if that happens, too overall we're testing 3900 once again. let's get to the half. welcome, everybody, to the half time report front and center this hour another star investor says a big decline is coming. does altimeter brad girshner agree? we'll ask him coming up. check the markets, see what we're doing here it's another rough day for the nasdaq as you see 1.25%. dow is down about 145. yields about 346 on th