emily: elizabeth holmes. steve: yes. elizabeth holmes. the founder.teenager, she started the company with great passion. i remember my partner tim saying, in the very first meeting, she is like steve jobs. this is long before she was wearing the black turtlenecks. i did not see what he was referring to. i even wrote it down on a piece of paper to remind myself that he said that. but it was fascinating. she had that mesmerizing zeal to revolutionize. she was not calling it phlebotomy at that time, but the entire field of medicine, there were these special kinds of needles. we were the very first check. we wrote a $500,000 check before anyone else. but she has been somewhat independent, and has been going at it all on her own. so i don't have the answer to your question. emily: you guys have such a tough job, because you want to invest in breakthrough technology. how do you, at the earliest stages, separate something possible from something impossible? steve: there are people walking in our door every week, every day sometimes -- but certainly a week do

you gave elizabeth holmes the first million dollars. when you were on the closing bell in march, you said the following, "whenever you have a transformtive company, people come after it. they say something must be wrong. so they're trying to make something wrong. but it isn't." we now know there was flaws in testing. regulators may be shutting down labs. elizabeth holmes was on the today show and she said, "i feel devastated that we didn't catch and fix the issues earlier". i'm wondering if you yourself are rethinking theronos today? >> that company is fantastic. the idea of taking two drops of blood from your fingers and running it through a micro fluid chamber that runs 50 blood tests is so much better than allowing the vampires to take quarts and quarts of your blood whether running tests and having the 50 tests stored up in the cloud so can you keep track of them over time. can you compare them to dna tests. she is doing extraordinary things for people and i wish her the best. i think things are going to go very well for her long te

what do you think about elizabeth holmes, and the situation that is unfolding with theranos? i know elizabeth. i have spent a lot of time with her. i have a lot of respect for her mission, and what she is trying to do. but i have stayed out of knowing the details of it. i think health care is changing quite a bit. people are always going to be skeptical. it is on us to be really transparent. emily: i understand healthcare, and what she is trying to do is hard. but, after 12 years, does it seem like it should be more evolved at this point? anne: i'm hugely supportive of the idea that i can walk into any center, and i don't need a an physician. and i can just have a finger prick, and can just get my information. i think people just want to see and understand the technology and understand the data. i get the concern. people are making life-and-death calls based on this data. they want to understand the why of how these things are happening. emily: the thing is this is a $10 billion company. people think it's a fraud. do you think it's a fraud? do you think it's possible, what she

the elizabeth holmes led company was once considered revolutionary.ccuracy of the machines came under the microscope. apple battle may be over but the encryption wars have just begun. it lies in wait in the nation's capital. tensions remain at an all-time high. our next guest is a former director of both the cia and nsa. he backed apple at the height. he joins us now from standard university. general hayden, thank you so much for joining us. encryption,e of even that you cited with apple. you have him saying that encryption is seriously impacting national security and hurting criminal investigations. what is your response? >> i sympathize with it. there is a real problem. this is a bit of a safe haven. security,e world of there are always trade-offs. it is cyber threats. has said that those cyber threats is threat number one. you really have to be careful for legitimate reasons to do something that is actually going to make it successful. my bottom line is the government can do this. i don't think it is a good idea. use that in the past that we are he

alix: what can elizabeth holmes do?said they will present data at a conference, a medical conference in august. i think it will be a lot of eyes looking at the data. it will be the first data they have on their devices and seeing whether or not it's legitimate. if it is, you will still have questions as to why they had this report sent out the patients. i think the company really needs to be incredibly transparent and explain what happened, show us the machines, and really laid out for the scientific community. scarlet: give us a bigger picture. what does this mean for not just s, butas, -- therano silicon valley and private companies? >> i think there is a lesson that can really be learned. in silicon valley there is often a model to move faster break things. that does not work for health. you just have to be so careful and transparent. these are patient's health your affecting. you can't put out something that is a little buggy and hope to fix it later. hopefully this is something other companies will really take home

. >> walgreens was so eager, it didn't ask any of the right questions of elizabeth holmes.lmes under investigation along with her blood testing company as medical reports say her super secret blood testing machine she claimed to event don't work properly. the fed may bar her from entering her own silicon valley laboratories. "the journal" says walgreens own scientist asked for a theranos machine to test out but never received one. theranos claimed it could test for a myriad of problems with a single drop of blood using super advanced technology it wouldn't show to experts. they say the machine did work. the company would dilute blood samples with sterile water, run it on traditional machines which would give inaccurate results. alibaba sells items online. stock fell 7% on the news. it pulled yahoo stock lower. yahoo has a big investment in alibaba. this is not news yahoo needed this minute. other companies are bidding onnia hoochlt. >>> this is an unusual find. workers unearthed a shipwreck from the 1800s. teams uncovered it where a new highrise is being built. they don't k

associated with silicon valley's hottest medical startup it did not ask the right questions of elizabeth holmes who is under investigation along with her blood testing company theranos as reports that she claimed to invent do not work properly. the feds may even bar her from entering her own silicon valley laboratories. "the journal" says walgreens own researchers asked to test it out before putting the service in their stores but they never received one so they sent experts to palo alto but they were not allowed to go in the labs. they claim that they can test using superadvanced technology they would not show to experts. in the meantime, theranos didn't even use their own machines. instead, they used sterile water and ran the tests on traditional machines which would give inaccurate responses because the samples were diluted. >>> according to financial papers, alibaba sells items online and has a bay area tie and has done investment in lyft. it pulled yahoo!'s stock lower on wednesday. yahoo! is a big investment in alibaba. it's the most popular part of yahoo!. >> certainly not. timing is eve

the elizabeth holmes-led company's readings were once touted as revolutionary.nes came under the microscope after reports by the wall street journal. the fbi apple battle may be over, but the encryption wars have just begun. a bill lies in wait in the nation's capital with tensions between the government and silicon valley at an all-time high. our next guest is a former director of the cia and nsa. in a twist, he backed apple at the height of the encryption debate. michael hayden joins us now and ethan kurzweil is still here. general hayden, thank you for joining us on this issue of encryption. given that you cited with apple, -- a formeron director of the fbi, who is saying that encryption is impacting investigations, what would your response be? guest: i sympathize. he has a problem. encryption allows people who would do us harm a safe haven for communication. security,e world of there are always trade-offs. one of the great threats to americans now is not just terrorism. it is cyber threat. jim clapper, the director of national intelligence, for the last coup

one of the things i find tragic about the story is that for all the criticism and questions, elizabeth holmes directly addressed them. all she did is come out and say the same things. i cannot really tell you, but it works and it is going to change the world. ultimately, that is not sufficient. it is sad to see a company which seems so promising brought so low. yet where is it today? we do not know who they need a new coo. that is for sure. what people want to see is the data and they have not provided that yet. they have not provided evelyn's -- evidence that the technology works. >> they say they are going to. emily: but it has been months. >> it has been a long time, but they have scheduled august 1. are the next steps? we know these investigations are happening. what are the next steps? >> the first thing they have to do is get their lab in california back in compliance so that cms does not shut it down. thingsve a long list of they need to fix. once that is done, they need to get back to publishing data. we hope that at the august 1 meeting, they will have some data for the community to

one of the things i find tragic about the story is for all the criticism and questions, elizabeth holmes addressed in. all she does is come out and say the same things, and ultimately, that is not sufficient. it's really sad to see a company which seems so promising brought so low, and yet, where is it really today? we don't know. you and i talked about what people want to see if the data, and they still have not provided that yet. they have not provided evidence that the technology actually works. >> but they say they are going to, so i think that is what is interesting. it has been months. , but has been a long time they scheduled august 1. emily: what are the next steps? we know these investigations are happening. caroline: they have to get their lad in california back in order and in compliance so they are not shut down. i have a list of things they need to fix to satisfy them, and once that is done, they need to get back to publishing data. we hope that at the meeting, they will have some substantial data or the community to see. were just saying, people have been waiting a long tim

they are expected to issue a report that may ban elizabeth holmes from her own labs. >>> tesla will offer more stock to raise money to pay for factories and equipment to build this model 3. watch tesla stock today. the secondary offering should send stock lower. >>> let's check the rest of the news before the bell. landon dowdy live at cnbc headquarters. >> good morning to you. wall street could see more red arrows today. futures lower this morning. stocks erased early gains wednesday following the release of last month's fed meeting. they suggested several fed members are ready to raise interest rates as early as june if the economy keeps improving. looking for data on unemployment. walmart reporting better than expected results. up on three points to 17526, nasdaq ending up to 4739. back to you. >>> google's conference continues today at shoreline ampetheater. he announced google home is a digital home. i want to point out a classy moment. that is ceo acknowledged right off the top before he even introduced the google home that amazon created the idea and they had done a good job buildi

the ceo elizabeth holmes may be banned from entering her own labs. we'll continue to watch this.two years worth of blood tests on their super secret marvelous machine have been declared invalid. >> what a complete turnaround for a company that once had high hopes. >> i mentioned pets.com and you understood pet.com. theranos will be the pet.com. >> we thought it was innovative technology. >> thank you very much. >>> the new approach to deal with our drought, how much water you have to conserve will depend on where you live. starting next month, the state water resource control board is allowing each local water district to set its own conservation goals. statewide order of 20% conservation enacted last year will end up getting lifted for many of us. >> you were popping in here a second ago. >> i was in the car with some folks. >> juggling a lot. >> the forecast up and down all week for us. >> it was so hot yesterday, i am happy to tell you it will not be that hot today. it will be closer to average and feel like spring tomorrow. back to winter. we take a live look at san francisco

later, elizabeth holmes supposedly throwing out two years of test results.he beginning of the end for what was once the darling of the health care startup world. you're watching cnbc, first in business worldwide. ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ ♪jake reese, "day to feel alive"♪ gap's earnings are out, straight to courtney reagan. >> i want to tell you gap has said they're going to be closing 75 total stores by the end of the fiscal year, 53 will be old navys located in japan, about 22 that means will be banana republic stores that are mostly international, this plus an additional streamlining of the operating model will save $275 million annually in pre tax savings for gap, inc. if we can get to the earnings, remember gap did warn on may 9th its first quarter earnings would be between 31 and 32 cents. they did come in at 32 cents, also gave us revenue of 3.44 billion. that stands. and comp sales is down 5%. again, that also stands from what we were told by the gap on may 9th. if i can get to the guidance, this is very inte

would ban sunny balance wan any the chief operating officer leaving along with founder and ceo elizabeth holmesrom participating in the blood testing business for two years. >>> stock market trying to bounce back after heavy selling wednesday. so far it looks better. the dow is up 45. nasdaq is gaining 1. the s&p is up by 5. back to you. >> thank you. it's been a roller coaster this year. jason brooks from kcbs radio, thank you. >>> let's check in with gianna now with the traffic alert. >> that traffic alert continues in san jose with information from chp. good news to report. they open up one lane of the connector road on northbound 280 connecting over to north 880 and southbound 17. so traffic is starting to squeeze by through there. but a big rig stuck on its side was carrying bales of hay so it's taking some time to clear but traffic is starting to move. slow on 280 itself northbound. northbound 85 slow and 101 out of morgan hill and 101 through san jose towards milpitas. taking a look at conditions which could potentially happen tonight you have the sharks in town taking on the predators.

bill gates, richard branson, and elizabeth holmes, launched their ventures before age 21.son met would-be motion nuls denver at a bank designed just for kids. >> reporter: who wasn't been to a craft fair? >> you can decorate them -- >> reporter: take a closer look. the sellers are all kids. >> we have these with wax -- >> reporter: jasmine quoisay-mack and eulessi ieies make candles at home. these courses from young americans bank that makes loans and opens checking accounts for kids. the courses reach 60,000 kids a year. >> you write that -- >> reporter: what is it you that want these kids to learn? >> we're trying to get them the knowledge of understanding how to create value and make a profit. >> reporter: rich martinez runs the bank's youth education program. >> every once in a while, you will get one of these kids that invests something that needs to protect that investment. it's amazing. yes, you're talking 10, 12-year-olds need patent attorneys because they've created something original. >> reporter: i'm going to take a set of eight. we stopped by 11-year-old isabel

. >> you find yourself pretty much in the same position that elizabeth holmes at theranos found herself where people are calling into question the business model, the products, the results, the promises and everything. what is your strategy to counter the naysayers right now? >> we have a wonderful business that is operating under an extremely capital-efficient plan. we have many, many successes. we have mature products. we have market-ready products. we have products approved by the usda, health canada, endorsed by world health organization, panama health organization, et cetera, et cetera. when you say investors, so as you know, there are a number of short-selling hedge funds who -- and the report you just alluded to, by the way, was an anonymous blog. >> right. >> by a self-identified short hedge fund. and we've responded publicly, i think, in the best way we know how. in terms of our overall response, we're going to continue to operate our marvelous business. so, i'm not -- i'm not concerned about that. we've got extremely healthy balance sheet. i don't even get the comparison you'r

that is what he have heard from elizabeth holmes.me of the tests, they have used -- they have said they don't want to let the industry in on their secrets. is that a viable call? silicon valley full of people trying to protect trade secrets. does this go a step further? >> it does. it is wi it is i worry about creating a culture of fear. i'm going to be attacked before i even test my new technology. >> can we talk about the association in terms of this board. you just have this idea that you have a cohort of people, with a reputation but people is see through it. like lending tree. mary meeker was on that board. they give a good housekeeping seal of approval to these things. how are investors and management when you start to really look at a company? how do we look at those signals and do you discount the signals? what are you supposed to do? >> you have to discount them if they are not industry. i want to look and cisse who knows blood tests. >> did they ever keep the it pry pry tear. >> we have been told because we're from the clev

. >> elizabeth holmes is also trying to stay off the cover. >> death of earthquakes business jifr jinxwill talk taxes, politics and the health of the economy. later, joined here on the set by new york city police commissioner bill bratton. that's why we'll feel very safe. be right back. how do you stay on top of your health? ahh... ahh... cigna customers have plan choices and tools to take control. so they're more engaged, with fewer high health risks and lower medical costs. take control of your health at cigna dot com slash take control. shoshow me more like this.e. show me "previously watched." what's recommended for me. x1 makes it easy to find what you love. call or go online and switch to x1. only with xfinity. >>> ready for a rally. stocks surging around the world. investors focusing on energy, the dollar, and some key earnings today including disney. politics also front and center. primaries today in west virginia and nebraska. we'll talk economy, taxes, the race for the white house, and more with motorola solutions ceo and business round-table member greg brown. >>> damage and

necessarily just elizabeth warren but to get that out there that there's room and that we're looking for -- >> you said that the press is being used for -- joe trippi, susan, amy holmes, thank you for stopping by this sunday. >>> ahead on "mediabuzz," the press rips apart will ferrell and has an impact. first, geraldo rivera, what he says about trump publicly and privately. >>> geraldo rivera, fox news veteran and regular on "the five" has been friends with donald trump for decades. >> geraldo rivera, welcome. >> thank you. >> you're a long-time friend of donald trump and have criticize the campaign he's running. that's got to be uncomfortable for you. >> i was very excited when he announced his candidacy. he's a good friend and i love the guy. we were together every day on "the apprentice" for six weeks and that was in february and this is in june. and when he started speaking i was thrilled. i thought that it was -- you know, he showed he was a movie star and had a grasp of the general terms in the issues. >> and then he started speaking about immigration. >> and then he said mexican immigrants were dope dealers and racists and i assume there are good things mixed

necessarily just elizabeth warren but to get that out there that there's room and that we're looking for -- >> you said that the press is being used for -- joe trippi, susan, amy holmes on "mediabuzz," the press rips apart will ferrell and has an impact. first, geraldo rivera, what he says about trump publicly and privately. this is lloyd. to prove to you that the better choice for him is aleve. he's agreed to give it up. ok, but i have 30 acres to cover by sundown. we'll be with him all day as he goes back to taking tylenol. yeah, i was ok, but after lunch my knee started hurting again so... more pills. yep... another pill stop. can i get my aleve back yet? for my pain... i want my aleve. get all day minor arthritis pain relief with an easy open cap. . . . . this just got interesting. so why pause to take a pill? and why stop to find a bathroom? cialis for daily use, is the only daily tablet approved to treat erectile dysfunction so you can be ready anytime the moment is right. plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. tell your doctor about all your medical conditions and medicines, and ask if your hear