ir leaks to save manufacturers, like colgate, over 20% in energy costs. go brush your teeth. go boldly. emerson. good afternoon, everybody. "power lunch." longside kelly evans i'm tyler mathisen. coming up a senate hearing on the collapse of silicon valley and signature bank taking place in ■@jhington today. the fed becoming a target. so where did it all go wrong and more importantly what can bee1e nexted, kelly?

for the future. >> plus the big change for a couple of former high flyers. alibaba getting broken up. lyft getting a new ceo. we'll discuss the road ahead for both. only one of the stocks is higher right now i believe. let's get a checkq on the markes first, though, with all the major averages at session lows. the nasdaq is now down more than 1%. ? market and some of the movers there with dom chu and kristina partsinevelos. dom, you first. >> let's do a little accentuate the positive on this more downeo side session so far. three earnings reports are driving some of the bigger gains in the s&p startingxd with carnival corporation up nearly 6% right e1now. the cruise line operator is bouncing back after afá down daá yesterday. tied to what was viewed as a -'xt disappointing current quarter forecast.w3 wells fargo upgraded that stock to an equal weight from an ñ a more ok risk-reward balance for shares at current levels. up e16%. then you've got dow component walgreen's, both alliance the health care retailer and ope betterfá than expected quarterl results. slower sales of covid vaccines and covid testingxd equipment,

though shares up 3 1/2% up right now. hings up p a little with oure1 last mover. it's mccormack. the best performer in the s&p 500. the spices and seasonings maker really reported a better nan expected report as well helped along by itse1 ability to raise prices for its products. still grilling, cooking out more at home. some of those pandemic trends sticking. we'll see what happens here. but it's up 8% right now. now let's send it over it to kristina partsinevelos, who may or may not like a little montreal steak seasoning in her recipe. over to you. >> if it has the word montreal in it i like it. but let's talk about semiconductor names right now trading on the nasdaq 100. all are in the red with amd the biggest lager right now. there's noñ but they always usually fall in sync with rising treasury yields. micron i want to focus on that because those shares are lower right now down about q2.2% of te street pretty much braces for the worst with earnings outok after the bell. citi expecting a billion-dollar inventory write-off. t.d. cowan in their notes say a

miss is widely expected. but overall it seems like analysts are calling for a bottom in memory prices. you've got silicon carbide producer i want to talk about right now wolf-speed because that stock is trending@ó5=mq■ 3% lower after president biden is set to visit the facility in the next hour or so to highlight how investments like the $53 billion chip stock are unleashing a manufacturing boom. keep in mind that çóchipmakers still need to get approved for that government aid and they'll have to decide if they should continue doing business witik china or risk losing funding. so none of this is guaranteed. big picture, though, we zoom out the smh,e1 which is a great barometer for chip names, it's an etf, it's still tracking for its beste1 quarter since q42020 and its longest monthly win streak in overok two years. >> kristina, thank you. let's get to the big event ine1 washington now a senate hearing on the recent banking crises. steve liesman joining us with the ñrxddetails. and and steve it sounds like the big takeaway so far is don't

expect any big change in the way it's currently be being done. >> no, they still have a lot of debate to do in hearings and things like that to figure outi but let's start with what top financial regulators were saying. they acknowledged this morning mistakes wereok maid on their i the recent bank failures but most pointed the finger at svb's management and what regulators say was a deeply flawed approach to handling interest rate risk. >> they were issued a matter at based on the w.!ccuracy of their interest rate riskñr modeling. essentially the risk model was not at all alignede1xd with rea. >> we also heard dramatic new details about just how fast and furious events were movinge1 in the final hours of svb beforee1t was shut down.e1 fed vice chair mich#ñ you just heard there he told the committee thcf■ after $42 billin left the bank on the thursday before it closed, 100 billion

was scheduled to go out the door friday morning, leadingg+vìáhp % regulators to shutter the bank before those deposits could flee. the detail highlights the speed with p$ich deposits can now technology and social media and then spread to other banks and the contagion risks or problems moment seem to have not( answer. barr's testimony made clear also that supervisors cited problems at svb numerous times from úg&2 board itself was informed of the issue of interest rate risk in silicon valley in february of 2023. we don't know what happened another key u■issue, new rules adopted by the fed in 2019 exempted silicon valley from stress testing for several years. xd last year stress tested banks for falling interest rates in a year that banks were being stressed by surging interest rates. so even if svb had been stress tested, guys, they wouldn't have

found the interest rate risk problem through the stress test. >> well,xd it's interesting certainly that the fed 7 c notified or at least aware of the interest rate risk that they had in february of this year and then who knows what happened. things started to move very quickly there obviously. i was texting yesterday, xdstev with at( mutual friend of ours o shall remain nameless for the purposes of this conversation. but heehpaid that one of the contributing factors to the flight of deposits from banks and from silicon valley bankt( particular was the idealpok tha bankers were unwilling,e1 his words, too cheap, to pay rightfully higher moneys on deposits. and so people left to put money into treasuries and that that was one of the contributing factors. do you see it that way, thate1 bankers own penny-pinching ways con4jg!ute to some of the deposit flight that we saw. >> i think that's right, tyler. and one --r

it as bankers made a choice to let deposits leaver those low interest rates. and maybe part of the problem, tyler, is bankersñr being a lite old-fashioned because the rule in banking is that you get divorced beforew3 you change yo bank. that may not be true these days especially with thexd technologs that exist to move money around, the abilitye1 to quicklye1 openk accounts online,xd and also the possibility right now ofw3 gettg higher interest rates through either treasuries or money markets or other means. i think the bankers got caught asleep at the wheel in the changing economy and of course i think as wet( heard this mornin if looks like the regulators did too. >> steve liesman, thank you very much. we appreciate it. let's get some more reaction to today's bank hearings from our panel. at the pete2/s;■ institute for international economics. and brian gardner isko■ chief stifel. welcome to both of you.

nicholas, let1háup)t with you. i think8 the wake of the covering of é@■depositors at silicon valleyht■ bank and othe there is this assumption that all depositorse1 are going to b covered up to whatever amounts in all instances. are we right in that assumption or is that a leap too far? >> no, i think the assumption i1 right. even so the communication frpt u.s. authoritiesw3 and particularly treasury secretary janet yellen has been a bit unclear on that matter because it seems the u.s. authorities don't want to completely own up to the consequences of the decisions they announced on march 12th when they said silicon valley bank deposits are fully insured no matter how large and we know that some of them were in the billions if nor millions. but the fact is that's what the situation is. if another bank right now has a problem like silicon valley bank, its e1depositors would be insured the same way.

that's a very solid expectation i think. and this is why actually we don't see that much panic in the banking system because everybody got that message no matter what janet yellen say. >> so brian, how do you react to that? are we right in assuming all banks' deposits no matter their size will be backed up by either the fdic or the fed?xd what about7oo congress? doesn't congress have the ultimate call here on what the deposit insurance should be? >> it does now. we used to have a construct before dodd frank that the regulators had some discretion, which they used in 2008 to guarantee non-interest-bearing liabilities. that's gone away. so congress has to have a say. there's a mechanism wheretìáhp % regulators can start the process. but it still ends with congress. i wouldok take some exception t the previous comment from nicholas about all deposits

is if you surveyed community bankers, and i'm talking banks with less than $10 billion in assets around the country, and s asked them if they think their federal government my guess is a healthy majority are going to say no. i think that'st( where yellen w getting in trouble last week with her testimony. she was trying to walk a< ■ tightrope and saying yeah, we're going to guaranteet( deposits i there's a contagion risk like we did with silicon valley and signature. but i think you have a hard time -- i think regulators would have a hardñ■ time explainingxd contagion risk and not guaranteeing deposits if you start guaranteeing deposits at the smaller banks, which thene1 you ultimately get it back to congress. it has to be a congressional decision of where deposit insurance levels should be. >> although it doesn't sound like theg@r(t&háhp &hc%te to change them right now, brian.e1 am i wrong about that? am i wrong about6&d if so that'e seeing some pressure across the regional bank complex, although this one might be less about

immediate runs. there's an expectation people move money around, creating multiple bank accounts, whatever it is. it might just be about solvency in the longer run. >> so i would point out my colleagues, myq stifel colleagus webinar with a group that helps manage deposits across the system and so there is a little fail-safe mechanism there that can help bankw manage their deposits. going into today's hearing i wa1 skeptical thate1 there was enou political will on capitol hill to increase deposit insurance. it came@t■ once or twice. the chairman mentioned it during the hearing. that was t(it. and to me the fact that it wasw mentioned, deposit insurance was mentioned so infrequently, i think underscores the point that there is no political will currently to increase deposit insurance with the caveat when circumstances change the political winds will shift. you look out for the next month

insurance i don't see the political will to lift it. >> so nicholas, let me ask youi just sort of the baseline question here asñi a freshman student in this. is there enough money -- where would the money come from if tq's -- i almost didn't say stuff. if really bad stuffñi happens a many banks find themselves in ñ as svb either because of commercial real estate exposure or other kinds of exposures, where would the money comev wh if i'm remembering correctly ará greater in volume than the amount of deposits under $250,000? >> there'sewreally no reason to believe that the u.s. bankingp, system is bankrupt, that a large number of banksçó areñi insolve. this is note1 the situation we'. we're seeing a number of banks making poor risk management

decisions and silicon valleyt( bank of course is a prime but even soe1 theçó fed has gon through -- and today's hearings i don't think there's any expectation, any realistic expectation that the supervisory failure of the fed ise1 so comprehensive that you would have a large number of banks that would be insolvent to an extent that the fdic woul be able to cover the losses or insurance deposit insurance, even unlimited deposit insurancp with u.s. government. now, if you're in a very pessimistic scenario what may happen, and this is not completely unthinkable, even though i think it's highly unliw['y, is that the deposit insurance fund of the fdic would be depleted the fdic would need to borrow from the u.s. government the fdic would be able to borrow from the u.s. government. it would be embarrassing for the entire system because it would

signal that it doesn't work as intended. but this would not come to a point where the fdic would be unable to provide deposit insurance even at the unlimited levels that it's nowok expected. >> my bottom line takeaway from what you just said is i'm worrying about something that probably is very unlikely to happenxd and i guess i take comfort in that. nicholas, thank you very much, and brian, always good to seee1 you. >> thank you. >> appreciate it. stille1 ahead, we're going check in on some of the day's biggest winners despite this down market. alibaba's now up almost 15% after announcing a plan to split into six. mccormick is spicing things up after its earnyn. i think i'm ready for this. heck ya! with e*trade you're ready for anything. marriage. kids. college. kids moving back in after college. ♪ finally we can eat. ♪ you know you make me wanna...♪ and then we looked around and said, wait a minute, this isn't even our stroller! (laughing) you live with your parents, but you own a house in the metaverse? mhm. cool...i don't get it.

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tech giant alibaba. the company announcing the most significant reorg in its history splitting itself up into six business groups each with the ability to raise outside funding and to go public. the first is the cloud intelligence group led by alibaba's current ceo. it will encompass ai and cloud technologies. next is its taobao t mall shopping group which has the online shopping platform. local food service. as well as mapping. the sino logistics unit will be yes, it's logistics business. the international e-commerce unit will be the global digital commerce group. and finally the digital media

and entertainment group is for streaming and movies. alibaba shares surging almost 15% on this potential value creation. here to discuss is scott kessler, global sector lead for tech and media telecom with third bridge. scott, it's great to see you. is this justification warranted? >> well, i think it's big news for sure, and i think people are perceiving it as such. look, alibaba has been essentially a next generation digital conglomerate for some time and i think a lot of conglomerates over time realize that perhaps they can actualize more value if in fact they separate out those businesses and provide them with independence. >> i heard david say what if the purpose of six different units is to make layoffs easier, streamline, cost cuts. that wouldn't be quite as bullish. or maybe it would be given the year of efficiency that wall street's been so excited about here in the u.s. >> yeah, that's an interesting take. i'm not so sure that that's the

primary rationale here. i think as alibaba stated they're looking to unlock value. one of the ways to do that is to enable the investing public to have a better sense of what these different businesses consist of. and to be honest, i think there is kind of a realization that there hasn't been much in the way of synergies across some of these businesses. if you think about small business e-commerce in china vs. alibaba pictures, i don't know that there's much of a connection in terms of what those and some of the other businesses are doing. >> who's driving this, scott? and what if any benefit redounds to the government of china through this break-up? how do you think they feel about it? >> i think it's interesting, right? because i think over the last couple of years if you consider big tech in china it's been hard sledding for sure.

i think the government has been very focused on kind of reining in the power of these big tech companies that used to be in china. big tech was baidu, alibaba and tencent, the bat companies so to speak. i think it's fair to say there seems to have been a thawing of that kind of cold war that's been taking place between big tech in china and the government. i think this is a good indication of that because i don't know that alibaba would have proceeded with this plan without at least the tacit endorsement of government interests. >> so i also -- i love that point, scott, about what might be going on here. it does seem odd because we already know the chinese government has an appetite for going after these big tech names but we're also in the middle of kind of an arms race against the u.s. do they ever feel the need to amass more power and kind of direct it more clearly? i'm just curious about that

dynamic. >> i think a lot of people have viewed kind of where alibaba's based and the involvement actually potentially of the chinese government as a possible risk. and we've seen that risk come into very clear focus for a lot of different companies in a lot of different ways over the last couple of years. it does seem like, kelly, and i think you make a really good point, that the chinese government seems implicitly be to be endorsing its own kind of corporate champions in the face of i think a anumber of challenges come free throw left. not the least of which are some of the restrictions on the exportation of technology, predominantly semiconductor technology in terms of what a lot of people have been thinking about over the last couple of quarters from the u.s. >> so let me just come back to my initial question, which was who's driving this? do you think that this plan

originated organically and internally on the board of and among the executives of alibaba? was it investment bankers here or in china who said hey, this is a great way to unlock value? or was it chinese government interests saying we like smaller tech more than we like bigger tech? >> that's interesting. that last point i think is pretty important. honestly i think it had to have originated and ultimately is going to be executed by the company itself. now, that doesn't mean they didn't take input from, say, bankers or third parties or what have you. but at the end of the day this is a company that if you look at it closely, this is a company that was worth $850 billion at one point. i think in the fall of 2020 during the height of covid. and more recently it was under $200 billion in value. so i think a lot of people probably were sitting around saying what can we do to unlock

value? i think it's as good a plan as any. >> interesting. all right, scott, thank you so much for your perspectives today. we appreciate it. >> thank you. >> scott kessler. lululemon on deck. lululemon on deck. analysts expect a revenue beat. - hiring is step one when it comes to our growth.

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welcome back to "power lunch," everybody. stocks right now are in the red by about a third of a percent on the dow. a half percent on the s&p 500. and about a full percent on the nasdaq composite. let's check things out at the new york stock exchange with bob pisani. hi, bob. >> hello there, tyler. we were positive on the dow until about an hour ago. so amex has been weighing on the dow. visa. and united health is also weak on top of a few tech stocks. you want to show you a few sectors moving. oil is having a good day. 69 a few days ago. now 73. occidental's up. we've got an upgrade from cowan there. boy, mr. buffett's happy with that investment. halliburton, schlumberger, nice two or three-day runs for these companies that weren't doing

that great. rates rising. a big problem for the tech stocks. we talked about this on friday and it's sort of continuing through here today if you look at some of the big names. amd, meta, microsoft all down. remember, these were the big winners. they're up 10%, 15% on the month. but all of them are down 4, 5, 6, 7% in the last two or three days as rates have been going up. cyclicals. interesting momentum. they've had a terrible month overall. i'm talking about industrials and names like mosaic, material names here. most of them are all down. we're at the lows of the month, two or three days ago. and they've started moving up as well. even the airlines started rallying a little bit. this is very -- just the last couple of days. but we'll keep an eye on that. that will be interesting to see. and consumer stocks which have done okay on the month are also having a nice two or three-day run. bath and body works, autozone, philip morris, dollar tree. wouldn't this be interesting, you end the month with the

biggest movers, tech to the down side and some rotation into consumer names as well as some of the cyclical names. that would be nice going into the second quarter. kelly, back to you. >> energy has been outperforming the last couple days. very different. bob, thank you. let's get to meg tirrell now for a market flash on a major mover in biotech. >> hey, kelly. we're look at viking therapeutics. that stock up more than 65% right now. this company has reported a phase 1 trail, small study in weight loss. it's one of these new class of medicines people are very excited about that we've seen from eli lilly and nove onore disc. this was an early study but the results were promising enough viking said it's going to start a mid-stage study later is this year. this is an injectable drug. but they also said they'll start a phase 1 trial with an oral drug, a pill version of this as well. that is getting people very excited about this. jared holtz over at mizuho saying this weight loss space is the one that investors are by far the most interested in in health care given the size of the market and the opportunity they see here. tyler, back over to you.

>> all right, meg, thank you very much. and i will see you, i'm happy to say, tomorrow for cnbc's healthy returns summit. we will convene ceos, scientists, investors. basically, meg will convene them. it's mostly meg who does the heavy lifting here. and innovators in health care to reflect on the progress made today to reinvent the future of medicine including the newest breakthrough drugs and device innovations. scan the qr code right there. do it right now. you have plenty of time. keep it up there for a second. to register, to join us virtually or visit cnbcevents.com. i look forward to seeing you tomorrow, meg. >> likewise. >> okay. good. bond yields continuing to rise today. recovering some of the ground lost in the banking crisis. let's go to rick santelli in chicago now. let's remind people that when yields recover ground lost that means that ground is lost in the value of the bonds.

>> absolutely. that means price goes down and all these banks we're talking about that have pulled to maturity securities their losses get a bit bigger. if we look at intraday of 5s we do see right around 1:00 eastern rates went down. they went down, not up. and the reason they went down, a very successful auction. if you look at a one-week chart some of the highest yields in this five-year note that we've had since last wednesday. and if you notice on friday the low yield there was 3.23, which means we've moved 40 basis points higher. is this giving us a signal? tyler's talking about how rates have been higher, and they have. but maybe the demand at this auction means they're going to cool off just a bit. three months to two-year. the distance between our two-year and three-month bills has collapsed. as a matter of fact, we are hovering at the closest those two have been in over 20 years. and finally, if we look at what's going on with the dollar

index, like many maturities outside of two and three-year notes it peaked in the fall. september. and that was a 20-year high at the end of september at 114. that chart certainly looks like the dollar index thinks the highest of rates are in the rearview mirror. kelly, back to you. >> thank you very much, rick. oil closing for the day up more than 1%. i mentioned it earlier. but energy stocks again outperforming. pippa stevens, what do you make of it? >> occidental is the best performer as bob was just talking about. berkshire hathaway, another 3.7 million shares. and now owns about 23% of shares outstanding. and tb cowan upgraded the stock. this lens of buying support to the stock. and berkshire hathaway buying is showing no signs of slowing down. one thing i do want to take a look at today is hedging activity across upstream producers and that's because according to estimates from ever khor isi their upstream coverage is hedged about 16% this year. that's down from 30% last year and 50% going back to 2021.

and this is important because it speaks to this post-pandemic producer. they've paid down debt, they have lower capital spending meaning they have lower required cash outflows, so they don't necessarily need to hedge because they can absorb the volatility of commodity prices. and while they do have very sophisticated hedging strategies it typically means to protect on the down side you have to limit the up side. if you don't have to do that why would you necessarily spend the money? >> does that mean if prices fall more they're exposed to that? >> yeah. they're more exposed to the spot preece of the commodity. and some might say this is a bet that they see prices heading higher second half of the year. we have heard a number of executives say that demand is going to rebound. but i think it's more just that it adds complexity, it limits your upside. and a lot of forecasts saying if even if we stay within this range they're still doing okay, they're still bringing in cash. so why would you add on extra layers of hedging? >> pippa, thank you very much. appreciate you being here. thank you. let's go to bertha coombs now for a cnbc news update. >> hi, tyler.

here's what's happening at this hour. a federal judge is ordering former vice president mike pence to testify in the special counsel investigation into former president donald trump's efforts to overturn the 2020 election results. that according to nbc news. a spokesperson for pence declined comment, but pence has previously said that he would appeal the case all the way to the supreme court if necessary. nashville residents have been leaving flowers at a memorial near the covenant school to pay their respects to the six victims of yesterday's shooting. during a press conference near the memorial police shared that the shooter had purchased seven firearms in recent years and was under the care of a doctor for what they called an emotional disorder. they did not disclose what that disorder was. apparently, the shooter's parents were not aware of the gun purchases. meantime, president biden has aarrived in north carolina

today to kick off his investing in america tour, visiting semiconductor manufacturer wolfspeed to tout the u.s. manufacturing growth and job creation spurred by the chips act. back over to you. >> bertha, thank you very much. bertha coombs. ahead on "power lunch," draft kings ceo's pay jumping to $48 million. that's a 238% hike. a little less than kelly's pay hike in the most recent year. and mine of course. despite the company losing 1.3 billion. facing some serious public outcry right now over that. meanwhile, on the other side of the same coin lyft's co-founders stepping down from their roles as prident and es

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only from xfinity. the future starts now. welcome back to "power lunch," everybody. lyft announcing a corporate restructuring as the co-founders plan to step down from their day-to-day responsibilities. and david risher, formerly of microsoft and amazon and a member of the board at lyft will

take over as ceo. shares were higher by nearly 10% this morning but have since flipped and are now down about 4%. here's what the incoming ceo had to say on "fast money" yesterday evening to deirdre bosa about how he plans to make lyft competitive with its rival uber. >> i think you start by making sure you're priced competitively. >> okay. >> at the beginning if people are looking at both apps and we're not winning or at least matching i think we've got a problem. as you drive volume, assuming the economics, every time a person takes a ride we make a little money. right? we've got to make sure we get people taking a lot of rides so we can make a lot of money and make our cost position appropriate so every time with we can drop that to the bottom line. >> we're joined by bernie mcternin, a senior analyst at needham. how do you react to this change in the executive suite, and is mr. risher -- what is the hand mr. risher has been dealt to play? >> it's a great question.

and i think the important context here is the company strategy's already been changing since the beginning of this year. that's what dave was just talking to you about on "fast money" last night, where it's really lowering prices. to quote him you're not in the game if you have lower prices. so we actually run a mobility tracker. and even in january it said that uber was cheaper 60% of the time and they came faster 67% of the time. that's tough for the number two operator to be facing as that competition. since then we've seen lyft be more competitive offering things like 10% promotion. but that's the big question, is can they be promotion and still get to profitability? i think less surge pricing or less primetime pricing is something that's weighing on their ebidta guide, 5 to $15 million. so that question of incremental margins this year. and if we're heading into a price war is the key debate on shares going forward.

>> was i was watching the interview with mr. risher last night, i kept thinking how does this company compete? you either have to compete on price -- that's number one. because they're basically commodity services. and a lot of the same drivers in cars work for both. you've got to compete on price or compete as you put out there on timeliness. do they show up on time, do they get you where they say -- where you say you want to go in a timely fashion. and if you can't win on those competitive things you're just not going to win. >> and that's been the reason why people point to this as being a value trap. the stock's cheap but that's one of the things that the buy side's a lot lower than the sell side. $260 million of ebidta for 2023. that gets you to roughly ten times multiple. i think some of the bears on the stock are significantly lower. so that multiple differential with uber on those numbers is actually a lot tighter.

>> would you touch lyft here? >> we have a neutral rating. and i think that that's the risk here, is that the incremental margins for the year can be lower. you have a new ceo coming in. it allows you to maybe reset the decks and really go after market share because market share's been bleeding. 35% down to 25%. i think for the stock to work for the long term. but the problem is this isn't 2021 anymore. so ebidta matters. free cash flow matters. and the stock's not going to trade on market share. it's going to trade on ebidta. so i think that balance is what's so difficult for the stock at this point in time. >> bernie, you're a nice guy. neutral is a very nice way to put it. thanks very much. bernie mcternn, we appreciate it. >> thanks for having me. >> up next not so nice. the backlash over the ceo of draftkings' salary hike. we'll have details and we'll talk about why it happened. and as we head to break throughout march we're celebrating women's heritage sharing the stories of women leaders in business and those of

our cnbc teammates and contributors. here is greshma asaljani, girls who code founder. >> the advice that i would give to women as a ceo is that all of us have power. our job is to find it and use it for good. as the founder of girls who code i use my power to teach girls to code so that they can find a cure to covid, climate, and cancer. and now as the founder and ceo of moms first i'm using my power to make sure that workplaces finally work for women so we don't have to choose between our job and our compiled. all of us have the ability to make a difference.

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welcome back, everybody. the ceo of draftkings got a 238% hike in salary while the company lost north of a billion dollars last year. contessa brewer is here to break things down for us and discuss. i thought he was making a dollar a year but is this -- >> no, his salary is -- his salary last year was one buck. >> okay. >> his stock-based compensation was more than $44 million. >> wow. >> and then he's got all of this

other compensation. the rest of it gets made up in this other compensation that included more than $130,000 for travel and tickets and events for him and his family to go to the super bowl. and that has created all of this griping online. i mean, even for instance when you look at his compensation versus his median employee pay, $111,000. the ratio is 427 to 1. in the previous year that ratio was 137 to 1. so while the company still is losing money, the ratio is increasing. and what the investors are pointing out is that hey, number one, you guys haven't turned a profit yet. number two, look at the stock price here -- >> yeah, that's what i was saying. >> it's up 54% year to date. it's had a big rebound. but boy, was it under pressure since 2021. a high point of 74 was about its high that it hit. and it has just been under pressure.

why? because investors wanted this company to prove a path to profitability. and the company says it will be profitable. in the fourth quarter of this year. now, let's take, for instance, its biggest competitor, fanduel, which now is a market share -- it's the market share leader at 50% market share. the ceo of its parent company, flutter, based in ireland, makes -- we have a full screen for this. he makes, and he just got a big raise as well. his stock-based compensation is up to $23 million. but his base salary, 1.5 million. and they were the first u.s. sports book to post a profitable quarter. so you have a lot of investors now focused on why is the compensation going up so much? i did invite draftkings on for an on-air interview. i asked them for a statement. they declined it. but they point med to their proxy statement and the compensation committee that said look, we are really focused on attracting and retaining the top talent that we need to grow this

company. and two, we think that what we're going to do is over the long haul provide optimal return to our shareholders. >> is it founder controlled -- so in other words, if the shareholders or the board or whomever thinks this is -- incentives are no longer aligned or it's egregious, can they change his pay or is this kind of like a founder control situation? >> he has all of the voting control in this company. jason robins. >> well, that's what you get. >> and his two co-founders if you add in their stock-based compensation together, it's more than $120 million. so the three founders of -- >> in the last year? >> for 2023. that's what this -- according to their proxy statement that is just -- sorry, 2022. has just been filed in 2023 showing last year this is what their compensation was. and look at this by contrast. now, jay snowden makes in total compensation more than jason robins does. but penn also has had a profitable quarter in its sports

betting and its bricks and mortar business is on fire. tom reeg makes half of what jason robins makes. his company keeps making quarter over quarter in profits and expansion in profit margin. >> yeah, and the comp that high is going to pressure earnings, no matter how you slice and dice it. over time it absolutely will. >> it's not particularly esg-ish, is it? >> no, not that either. >> governance. >> >> power e*trade's award-winning trading app makes trading easier. with its customizable options chain, easy-to-use tools, and paper trading to help sharpen your skills, you can stay on top of the market from wherever you are. power e*trade's easy-to-use tools make complex trading less complicated. custom scans help you find new trading opportunities. while an earnings tool helps you plan your trades and stay on top of the market.

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time for today's ever popularñi three stock çólunch, movers today, mccormick is surging after topping q1 estimates thisçó morning. walgreens also popping on an earnings beat despite slowing demandi]ñi for covid tests and vaccines. lee munson, chiepd investment officer at portfolio wealth advisers, lee, let's start with mccormick. >> mccormick, this is cholula. this is frank's red hot wing sauce. these are basicclp staples of portfolio wealthñr advisersxd oe

kitchen. here's the thing, margins are what the issue are. they bz%q earnings last quarter, nobody liked it. today they blew out the lights. the stock is popping. there could be aok lot of short covering, over recently, ubs got hit with a cell recommendation based on valuation,)■maybe, and then the ceo recently was saying, we're going to have to push back. the bottom line is this is a company that's already said we're going tolp try to lower wk force by 10%, doing some automation, and you want to see margins going up. they bottomed out about 34% last year. they're up about 36%. r(t&háhp &hc% those margins go back up to 40. a great stock going into r recession. i can't get enough of that stuff. >> all right. neither can ty, by the way. i'm not a cholula. >> you're not a frank's man? >> i keep basic paprika. >> they probably make that too. >> they make a version. what aboute1 walgreens,t( lee?

walgreens is a different type of play. this is a problem. the stock has two issues.w3 that's it.xd theçó first issue is that they t boots over across the pond. they need to divest boots. a lot of investors are waiting for when that's going to happenr i would like to see them redeploy in primary care. the core growth of okçówalgreen remember, your covid gravy train is over, and they're having to innovate just to get the pills p r(t&háhp &hc% i want to wait and see, i want to hang back, i don't want to buy here, if you want tolp hold it, great, you have to believe the primary care segment is going to be a huge strong grower in the future. aq primary care doesn't continu growing. this stockxde1xd is more bound opinion.

gl >> let's talk about lululemon, whenever i go in their storesx liuz lots of people in ñ15q!9 >> premium experience. like nike last quarter,ñr there were plus 20% same store sales. here's the deal. you're never going toi] get thi great, you know, company cheap, so like a nike or e1starbucks, u want to buy it when they implode.ácf1 o tonight we're going to get earnings. we're going to see how much they want to throw that kitchen sink out the window. ■jf they're going to talk about margins declining all yearlong. and this is what people are talking about when they say there has to be this big earnings revision or slash in your earnings, and that's going to be the enp] of the bear market. this is what we're talking about. so if you're a value-oriented more conservative ves tor, watch the stock.çd=pyou may get a cha cheap, beat up. fancwó yoga pants are always going to be in style. >> someone asked me why ryan

seacrest was trading stocksñr wh us. >> a compliment. >> le, thank you,e

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welcoming ai in a peculiar way. andw3 dominic chu has it underts microscope. >> ai technologies can be tasked not just with writing stories, but tech giant is taking ai technology to augusta national at theq master's, unveiling the technology that will generatee1 automated spoken commentary for the mastersçó web site and the app. take a listen of the sampling what ibm has lpprovided. >> 28 years old from austria is going to hit from the pine straw,fáe1 hole 1. stroke 2, and the ball traveled 162 yards!u■ into the greenside bunker. >> okay. so that's an example. . >> it looks a little bit whatever. >> vaguely european. >> what's interesting about this, there's a terminology, a

wholeçó vocabulary that goes alg with golf at augusta national. it is not the front nine and and second nine. and patrons are not fans or spectators, they are patrons. when you canfáñrjf algorithmica build that into something. these are for highlight clips and e1çócommentary. it won't be realtime generated. >> yet. >> it's an experiment. >> nice knowing you, everybody. >> nobody better than dom chu, thank you for watching "power5a lunch." >> "closing bell" starts now. in a moment. 60 minutes to go in regulation. ■ fighting it out all day long as some of thexd quarter's