that said nelson peltz has tremendous experience in helping to turn around challenged financial companiesf 2011, peltz's triumph took a stake in state street, a custodial bank like mel melon. at the time it urged them to spin off its money management unit and they refused to sell their asset management business, but they got aggressive about cutting costs and returning capital to shareholders in part i think because they felt pressure to deliver results. by the time peltz exited his position a little more than two years later, state street had more than doubled. how about legg mason? another venerable financial firm that peltsz got involved in after the company had fallen on hard times. peltz is actually on legg mason's board of directors with his company. and since the standstill agreement preventing him from arding more shares late in 2012, the stock has rallied a spectacular 97%, trouncing the 39% gain the s&p 500 over the same period. that's extraordinary outperformance. if peltz can work the same kind of magic with bmy melon we saw with state street and legg mason, and the upside, i'

we will soon now hear from activist investors nelson peltz and carl icahn. they'll be live on stage there in the city. see if they name names of their next targets. and if they do, you will hear them first right here on "closing bell" today. >> we are looking forward to all of that. first, though, let's see how we close here. looking across markets at a pretty strong performance, aside from the dow up 60 points. bill already mentioned we've got the s&p up about seven today. and the nasdaq lagging but up about 14. >> all right, let's get to our "closing bell exchange" for this very, very busy wednesday. abigail doolittle from peak theories is back, saja practiced human, keith fitzgerald from money map press, jack was rujan and rick santelli joining us as well. sajai, i see two words in your notes here -- small caps. does that mean you're buying what janet yellen is selling right now? >> exactly. we like the small cap story. we think the credit cycle is going to get a lot healthier. and in an improving credit cycle, you really want to look at the smaller compa

nooyit enough for indra to silence the critics that might side with nelson peltz? >> i do not think so. he has made it clear that he is in it for the long haul. he has his mind made up. >> nelson peltz might not be quiet, but the folks that he needs to persuade to go along with him are listening to his story on the one hand, and looking at the numbers that noo yi is delivering on the other. is she offering enough? greatk, this will be a set of results. it is only one quarter and he has some broader point about having the benefits of a beverage and snack business together. it is one battle in a long war, and like i said, he will continue to press pepsi shareholders. it is probably not enough to get him to walk away, or the people that he needs to influence. >> does he have a point? would pepsi be a better company if it were two companies -- food on the one hand, beverage on the other? >> i do not think so. first of all, if you separated the business, it would result in additional cost of 800 bill -- $800 million to $1 billion. talking about activist investors broadl

one of them, nelson peltz whose first 13d filing on this company interestingly enough was issued fourte exactly when it was trading in the $40 range, has done phenomenally well on the trade at this point. still, this sort of outcome involving a large premium and a huge market reaction was never a given. at our conference a couple weeks ago, he spoke a bit about the hopes he had had for family dollar saying despite the gains to date, he still wasn't entirely happy. >> if you're asking me if we're satisfied, we are not. there's a wide gap between performance at family dollar versus dollar general. and we think that they should be able to close that gap. they put out a poisoned pill after carl made the announcement. the only one who voted against that bill was my partner, ed gardner, who was on the board because we believe in great corporate governance. and if carl wants to do what he wants to do, we have no objection. >> of course, ed garden, chief investment officer of triams who's been on the family dollar board since 2011. clearly the poisoned pill was overcome given that both boards

nelson peltz trying a major holder in family dollar.o us this morning they sent us a statement, the firm saying they're going to be voting in favor of it, believes the combination with dollar tree represents the best path toward. family dollar is a great outcome for all the companies' shareholders. they do also say that they're going to be saving $300 million annually after the third year once this deal is complete. >> we also pointed out a big win for carl icahn. the single biggest holder -- >> john paulson smaller about 2%, icahn and this is as of the last filing date about 9% so another big win. >> piggyback on to mr. nelson or carl. but i think jim cramer said you do much better pig bybacking on peltz necessarily than carl. >> i think the other angle, what we talked about with becky earlier this is now, i know, not on a square footage basis but from a store basis this combined company has more stores now than walmart. >> all right. but we need to put that into context. it's 11,000 stores is walmart and that's, in 27 different countr

she has been taking heat from nelson peltz at the delivering alpha conference. if you own the stock, pepsico, i bet you are more thankful today. that's because they reported a trick number this morning and guided up its earnings trajectory and stock jumped a buck skiefr and was higher at a certaint point. partf this rally is managements sheer grip, fabulous cost controls and manufacturing food that's good tasting and, yes, occasionally good for you. and that's all around the globe. i know dozens and dozens of ceos. i think they don't need to be prodded by any money manager. she is tough enough on herself. it was a very strong quarter. more important, though, i. you to understand how modern. management works, most managers are trying to beat the benchmark, which is most of the time the s&p 500. they start with the presumption that represents the index. they ten typically try to find the best stocks in each cohort. sometimes a sector is so anemic the managers. to make it a smaller portion of their portfolio. when it comes to the sectors, they have to own at leefrt

he saw a board somewhat dysfunctional, one holdout, nelson peltz's son-in-law wants this thing sold. he is on the board. heavy hedge fund investments. hedge funds are big into family dollar. put that all together, carl's activism and this thing was ripe. >> lesson to learn is follow carl? >> stands to make, reports indicate 131, 140 million. >> 70. >> the question, could go higher. so the question is, what happens to apple and navistar and transocean that carl is agitating for change too. melissa: what is the answer? >> i would always -- melissa: depends on the company. >> i would say play it by ear. this is one thing i know about carl. he gets most, some of what he wants most of the time. and every now and then he gets something like this. that is why i like following him. listen, did he lose on apple? he didn't really win but you did okay following. increased buyback. this is pure carl. he got the whole ball of wax. melissa: president obama continuing to pound the drum of so-called economic patriotism, addressing growing trend of companies moving offshore in his weekly address. >>

not only do we have sort of the flailing sort of business, pepsi has the snack business and nelson peltztry in. >> pepsi is much more in the callous, emerging market itself leverage, even though coke has been this brand. it's a bloebl brand. coke has been much ma leaned. these are not cheap stocks. i think coke is getting too much credit. i think a lot of the marketing will prove their numbers next quarter. >> i go with pepsi. >> what? >> dan, the outrage. >> yogi that's been said since the ''80s. >> don't drink either. investment wires, i'd go with pepsi. i don't like coca-cola, that soda pop stuff. >> you can check out more on the website optionsaction.cnbc.com. right now, we were supposed to bring you a live bp ware. saying it is, quote, sensitive about elliot management, which took a doctor 1 billion activist stake into emc. emiot wants emc to spin out the amware, i was talking with them. he says they put out a 60% chance ownership will change in bp ware next year whether by a spinout or acquisition, which would be a crown jewel in this space. dr. j., how do you interpret all of this

way, governor christie is about to speak and be interviewed by our john harwood later in the day nelson peltz and scott walper is back. we have special guests as well. and so, hello to john, kate, josh. three big themes from delivering alpha that i want to bring you up to date on. number one, treasury secretary jack lew there should be a corporate tax rate. maybe 28% as the basic rate for corporate earnings which would bring us back down more in line with some of our economic rivals. an hour ago, retire hedge fund manag manager druckenmiller said the mr. fed is putting the economy at risk. if you like someone other things, actaviss is up. citigroup that made news earlier this week with its settlement with justice department is down 4.5%. kate you led the questioning with one of the guys who has never been on television before, ken griffin of citadel. you hit him with the day's breaking news which andrew ross sorkin broke on the bid, the offer for time warner by fox. what did he think? >> that's right. he likes the deal. he thinks it's going to get done. let's listen to what he had to say. >>

as tom pointed out, it is a big victory for nelson peltz's management.e of their founders onto the board. he is also chief investment officer. he is in the board of family dollar. they have been working constructively with management. there is a supportive activist role there. they have been pushing for this deal. carl icahn tweeted that he thinks family dollar and dollar tree would be perfect partners. >> a single sentence from mr. peltz -- by joining the dollar tree party dollar is becoming of a stronger organization that will drive significant value. chris marangi is with us. we're thrilled to have you here with the mergers. this really speaks of the new confidence out there. >> it really does. that isd about the m&a being supported by lower borrowing costs. the missing element was corporate confidence. now we are seeing that return. that is going to push the cycle. >> acquirer, acquiree -- it is a nirvana. we are six-month out her 12 month out. perfect. it is too good to be true for tom keene. when does this become diluted, frothy, and stupid. >> lay

nation's biggest pension funds is pushing pepsico to shake up its board and give activist investor nelson peltzames in 2020. prime minister has announced his own olympic dreams. at the center of it, adam mc

he comes behind howard levine and fellow activist investors nelson peltz. his capital could be put to better use elsewhere. icahn mounted a public campaign last month to get family dollar to put itself up for sale. he claimed that the company was being poorly run and lagged its competitors. in a statement on monday following the dollar tree offer, icahn welcomed the deal but still hopes that a higher bid will emerge. he says, quote, this is a big win for all shareholders of family dollar and yet another vool addition of the activist investment philosophy in general, end quote. icahn sold shares on monday and tuesday at prices between 7515 and 7595 a share, above dollar tree's office, which values family dollar at 74.50 a share. and that could make him a cool profit of $174 million bucks. he says that he could sell more shares in the future. this is just the latest feather in icahn's cap, of course. in the past year, he's scored some big profits, even when his investments haven't necessarily gone the way he expected. his huge returns include netflix and dell

. >> nelson peltz made people money last year. i wonder if he'll do bank of new york.hink he can bring value there. >> they did file on that. >> stay tuned on that. i think he's going to come with game. >> that's great, actually. we played some sound earlier on "squawk," and last on this set saying yellen would be dovish way beyond what coincides with an interesting hearing today. follow that with dow up 51 points. we'll see what happens in the next hour. of course, stock trading with jim in a moment, and counting down to the testimony on the hill. live coverage begins in just a few minutes. ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friend

financial times, a shareholder of 250 million in shares wrote a lerts to the board of pepsi asking for nelson peltz not advocate splitting the company, but pushed for that. i asked the ceo about that, does not want to comment on any individual investor, but look at the multiples. the stock is driven by way more than an activist investor. multiples, especially when you compare them to other consumer staples and to the s&p 500, saying it speaks to the earnings power and what they continue to call the power of one, keeping snacks and beverages under one roof, david, but it's not going away soon. >> no, but it's getting the stock up, and if they continue to do that, they'll have the stronger argument, one thinks, in terms of larger shareholder base. >> it's up more than 7 % on par with the rate. it's been out performing, and they continue to beat when it comes to the earnings. >> wanted to move on to another stock. it's up just a limit today. this is biotechnology, a $is 1 .7 billion market, now worth 6.7 billion. that is because this morning the company put out news that it's investigational breast ca

i mean, when you look at this stock, family dollar, when nelson peltz tried to make a buyout offer for11, he was going to pay $7 billion, and the company said that undervalues us. that is not actually taking into account where our stock will go, where this market will go. and even though same-store sales have been spotty over those three years, for that company and that board to have created $1.5 billion in additional value for shareholders i think is pretty miraculous. and for a lot of companies that maybe didn't sell two, three years ago on those valuation concerns, now with the market as hot as it is, kelly, i think you'll have to see some of the markets saying, look, where else is there to go? >> and andrew, i was just going to say, so everybody's clear as well, dollar tree, family dollar and dollar general have about 30,000 stores. they've added about a third since before the recession, and that's the important justin lay hart was making in the "journal," that gene, maybe this is forcing their hand to some extent because they've proliferated so quickly. >> yeah, no. i mean, i thin

. >> no, i have a fantastic relationship with nelson peltz and the board of directors i'm very exited> guys did you want to say something real quick? >> alan krueger wlorks is, of course, a famous economist commented on how yummy the bacon was. >> they have good stuff, too. >> you. >> you also brought up the square hamburger. >> but, jane. >> you got the pretzel bun. >> jane, have you found a food that bacon does not go with? that you were going to try to do. i'm not willing to say out of hand it doesn't go with ice cream. there must be a bacon ice cream. >> of course, people put bacon on top with a car pell sauce. >> right. have you found something? >> bacon and milk. bacon and milk would be gross. >> i'm not convinced of that. bacon and mayo is pretty good. >> a bacon milk shake? >> i don't think there is any, anything you can come up with anything. i put it on tuna fish. >> that's natural. >> that has a salty sweet, bacon and broccoli is good. >> now you're overdoing the pig. >> gene, that was great, thank you. >> thank you. >> she did a thing that showed bacon bowls. >> they adver

. >> warren buffett thinks pepsi's fine but nelson peltz says that's because he's undermined -- >> ii love -- >> you think there's a synergy there? peanut butter and jelly? >> i love -- yeah like smucker. smucker buying. i think anything that ends in toes i like. >> mementos? >> cheetos, doritos, tostitos. >> why do you have to like them connected to the drink part? >> because it makes me want to have a -- a -- remember -- >> that's the problem. >> the carbonation. >> makes want to have a coke. >> i like coke better than pepsi. >> but you have your tostitos with the coke. which undermines the issue. >> no it doesn't. at least i'm buying something from pepsi. >> but you -- >> oh, okay. i guess -- >> or you could be buying it from a separated -- >> i'm also getting the salsa from pepsi, the tostitos salsa. hot. >> right. >> so why -- now you're making the argument that that's -- >> because those are better than any -- >> that's got to be a latin brand. >> with the hairs coming out of it? man -- >> that's like you know. >> when people say that that's what you got to substitute for the c

many big guests at the conference this year including nelson peltz. that's wednesday, the 16th. joe will be interviewing stan. we are back in just a moment. "squawk box" returns. ♪ ♪ ♪ [ male announcer ] if you can't stand the heat, get off the test track. get the mercedes-benz you've been burning for at the summer event, going on now at your authorized mercedes-benz dealer. but hurry, offers end july 31st. share your summer moments in your mercedes-benz with us. habeing able to pay as we goo rawas crucial for a start up.s. having to fork out a lot of money up front was risky. you can launch a feature really quick, and if the feature doesn't work, we haven't lost anything and we can have something up and running in days. and this would not be possible without the cloud. we are now supporting over 25 million users each month. ideas can be tried and tried again on the ibm cloud. the ibm cloud is the cloud for business. >>> welcome back. >> with the travel season now in full swing what are the years hottest trends in luxury getaways for the uber elite? on your set this morning is t

and nelson peltz, john paulson, governor christie. i'm actually going to be listening to -- i'm going to stay this year. going to stay. i'm staying. i'm not going to leave. see we do the show there at 6:00 in the morning until 9:00, and then -- >> last year you left? a little earlier than maybe you would otherwise this year? >> i guess i did. although it's a phenomenal conference, i had something to do. really. that's -- let's get back to europe and the sell-off. there it is! full day. it's awesome. it's going to be great. and don't -- i think there's going to be some programming. that day that we're going to be able to show viewers. but it would really be better -- >> if you were there in person and signed up. >> cue the crickets because it's the second day of janet yellen's testimony, i believe, in front of congress next week. >> it will be a good day to be talking about what happened on -- >> what do you do when rob -- do you just ignore him? >> watch this. >> the producer is yelling at us right now. >> see that? is he yelling? >>

nelson peltz believes that pepsi should be broken up, that snacks don't belong next to the soft drinksnks it's all one big thing and it's got to be that way. what do you think? >> you probably ought to ask her or nelson that. like i said, they're not only a competitor of ours but they're also a partner of ours in strib utding our products. i think both systems have a lot of merit. coke is bringing the franchises back in, coke pepsi wants to keep them and we have kind of a mix in our business. >> but do you see, you see the merits of either side? do you say to yourself you know what, actually -- >> i wish i had more snacks? >> you know i've been so focused on our business, and the boys and girls club here lately i haven't really taken the -- >> he's got -- >> you've got -- >> you haven't looked for -- >> you haven't looked for potato chip brands? >> no we like to stay very focused on drinks. >> last question, this is a health question. how much pressure do you feel around your brands about making the smaller bottles, you know, coca-cola there's a big article i think on the cover of busi

among the newsmakers nelson peltz the activist investor hinting at a possible proxy fight at pepsi arguingone on at the company but because of suggestion for corporate improvements. >> i give them no credit, because the stock was supposed to, according to them, earn $5 in 2012. they missed a little bit and they earned $4.10. last year they were giving high fives because they got to about $4.34 in 2013. so, the stock is not moving because of earnings when the company should have been earning $5 two years ago. the stock is moving because people, shareholders, see the wisdom of what we're saying. >> and peltz told us he most definitely still wants to break up that company, splitting it in two. i know, joe, you think that salty snacks go with soda. he comes out on the other side of that debate. >> i don't understand investment banking and synergies and rationalizations and stuff. but, you know, salty snacks, drinks, you eat the salty snack. you drink -- you know it just seems to me. that one i get. >> coke's done very well. >> coke has done well. how about when this -- when smucker bought the

even talking about what peltz says, i think the board's job isn't necessarily to micromanage. i'm not going to criticize nelson about the fact that maybe he is so -- and i can't talk about nelson, because i can't know if this is true, i see by his record that some of it might be, that he really is an expert on brands. in that unique situation, i think that's fine. but what a board should be doing is the opposite of what they do and even what an activist is doing, is not micromanage. you can't go into companies, einstein i don't believe could go in to these board meetings and be on all these boards that people are on and really understand what the hell they're talking about and they're doing. these boards are a farce -- >> you thought it was big shareholder warren buffet by abstaining even though he disagrees, that would have made a statement, you would have come out and said, oh, this is wrong? >> i think he over the years has pretty much said what i've said about a lot of these ceos in a lot of these companies, i don't think he's a great fan of a lot of them. i won't speak for warren buffet. that's not a big