macy's' chief executive terry lundgren choking up on the stand, accusing stewart of breaching a contract to sell her goods exclusively in his store. the contrasts here are deliciously absurd. this trial involves allegations of ruthless sharp-elbowed business deals over such products as linens, stationary, curtains and kitchenware. martha stewart has been accused of tough business tactics right from the start of her storied career. she worked as a model, then started a catering business, and went on to build an empire, best-selling books, a tv show, housewares. her daughter would later write a tell-all book saying much of this was a facade, that at home there were no prepared foods in the fridge and sometimes no costumes on halloween. at the height of stewart's powers, the debacle. prosecutors charging her with selling shares of flailing biotech company inclone based on inside information. a woman worth hundreds of millions of dollars skirting the law to save just $40,000. at first in this infamous cbs interview, stewart refused to talk about it. >> i want to focus on my salad. >> reporte

macy's ceo terry lundgren testified that macy's took a big risk on stewart after being convicted.ick to my stomach, he testified. on the stand tuesday, stewart says she was flabbergasted by lundgren's response. i don't know if i got through even half the points before he hung up. martha has been able to remain lighthearted at times throughout all of this. when she came out of the courthouse yesterday she turned the tables on photographers, taking photos of them with her small, white camera. this case could wrap up by friday. there's a small chance. if it doesn't, it will be delayed all the way till april. >> andrea canning, thank you very much. martha stewart is with us now. good morning to you. >> pleasure. >> i want to start with an image and put that image up of you on the witness stand that people are seeing across the country right now. you know what this does, martha. this conjures up memories of 2004 and your conviction and your time in prison and it damaged your company and your brand and your reputation. are you worried this, no matter whether you're smiling in that pictu

i can see ron johnson wanting it, too. >> i met terry lundgren through martha stewart.s really the guts of their houseware. i think that they could make a very strong case. i just keep thinking, wow, if fernado is bailing from $10 million jcpenney, what's going to save ron johnson. what. >> maybe -- >> i mean, this is the guy who -- they're in the malls. >> the little pins, jim. they're really cool. you get a discount. remember those? >> yes, i do. >> we should have known something -- maybe that was -- >> but look, we have qualcomm doing better. i listened to stan druckenmiller. in the interim, if you were out of this market you would be missing some good opportunities. >> i know. >> so it is a balance. it's a very big balance, a tight rope that you have to walk. >> i think ken was going to talk about stan, and how much money he gives to that school. even to you this would be serious money. >> you bet it is. >> it gets up close to, starting with something other than an "m." >> the great givers are coming in. the other way to look at who's coming on your show. including

terry lundgren testified on monday. now it is jcpenney's turn.f testimony,ing macy's employers showed in august of 2011 before he was ceo or member of the board saying, quote, i'm feeling awesome about the strategy. i need to pull off martha. she wants to do it. i need to propose a deal she can go to terry l. with and break their agreement. it is the only issue in the way of success at this point. now, on monday, terry lundgren explained his company's anger was actually directed at martha stewart and her company. lundgren thought it was more of a one-way street, martha pushing to get into jcpenney rather than a two-way street. lundgren send a congratulatory e-mail to jcpenney. the e-mail said congratulations to you and your team for telling and selling your vision for the new jcpenney. well done. and the reply, thank you, your note means a ton notice. i consider you a friend. we're actually on the same side trying to make the department store the favorite place for people to shop. i'm not sure friendship is what everyone is considering at this po

we heard from terry lundgren and we're going to hear from martha stewart tomorrow.y observers say it's macy's really that after martha stewart eight years ago to the day came out of prison, macy's said, you're going to be rehabilitated and your brand is bigger than exconvict. and this has been a good seller for macy's and martha stewart went and did a deal without telling macy's with j.c. penney to sell her stuff as well and macy's is saying huh huh, a civil agreement on who can sell the wares. >> do you think we would have a zbremtd like this when it comes down to corporate law? >> no. she peddles perfection and her business dealings are messy. the story is so interesting, her name and brand mean something -- to almost anyone who knows martha stewart, her brand is simple and clean and good lines, right? when you look at the business dealings between macy's, j.c. penney and martha stewart it's not so simle and clean and bright colors -- >> hold that thought for a second. i want to bring in our legal panel because this is like contract law. sunny hostin and randy zel

. >> i'm terry lundgren, listening to you tonight because i know he watches the show.. can he call someone and say i want that rfid? or is that just burberry and will they say what are you doing giving it to macy's? >> he can call me. i do all my own e-mail. any customer can e-mail me. go to twitter, @benioff, facebook.com/benioff, i will happily go see any customer in the world and show them what i think the future is for their industry. banking, manufacturing, financial services, retailing, whatever it is, you know, let us take a look at what we can do for our customers and the reason we have this growth, jim, all over the world, and i think we're faster growing than any of the other companies you mentioned today, by the way, by maybe an order of magnitude, is because we are transforming our customers. our only job is to make these customers massively successful. >> well, look -- >> that's what gets so exciting every day. >> you say the customer's ready to fire you. i've got to tell you, these numbers were unbelievable. marc benioff, thank you for being on the show.

apparently the judge said that macy's ceo terry lundgren and martha stewart spoke after her testimonyppears an olive branch of some kind has been extended, not clear by who. the judge is now ordering both of the companies, jc penney and macy's, to mediate. he wants the companies to settle this on their own. he said we live in a free market society, and the business people involved need to work out a resolution. however, if the case cannot be settled by april 8th, he will hear macy's application for a preliminary injunction at 10:00 a.m. though he prefers not to, he said he'll decide the case if he has to, and while it appears macy's is winning some of the battles, it doesn't mean things will necessarily end up their way. interesting developments, maria. we'll bring you more when we have it. >> thanks, court. facebook, getting a facelift and time warner says it's time tore big changes. our special co-host jack welch knows something about running media giants and will weigh in on the latest overhauls. stay with us next. ♪ [ indistinct shouting ] [ male announcer ] time and sales data. s

. >> tell terry lundgren i said hi the next time you talk to him. >> pete, nvidia. >> graphic chips,pc market that they have gone the same way as intel to the downside. i don't think they have the same upside as intel does right now. you've got qualcomm and the other space with mike ron and sandisk. i think those names actually have more upside than nvidia. >> doc, a tough one, noise around isrg. >> after a very significant correction, judge, because it made a big run up, citron has been all over this one. our herb greenberg has done a great job on the bear case for this stock. herb has been right, as has citron in terms of how it's come off so dramatically. down in the 480s, you listen and if you shot, you cover. >> biggest pops and drops in midday trading. salesforce.com. joe? >> this is all about mark benioff. they are doing a four-for-one split. this is about cloud competing storage. when you see what happened with oracle. that's about sales force taking market share. you want to own sales force and also want to own workday, wday, $10 billion market cap, i truly believe that comp

also interesting, the judge said today in court that terry lundgren and martha stewart spoke after her would be the first time that the two have talked since she told mr. lundgren about the jcpenney deal and he hung up on her. it appears someone may have extended an olive branch, though, again, it's not exactly clear who. the judge says he wants the name of the mediator they have selected by tomorrow. melissa? >> all right, courtney, thank you very much. want to get straight to josh lipton now. we got a quick market flash. news on herbalife. josh? >> that's right. herbalife popping here in the afterhours. here's your news. herbalife holder carl icahn disclosing a 15.6% stake in an amended 13-d filing. that is up from 13.6% as of march first. herbalife up about 1.5% in the afterhours. melissa? back to you. >> 15.5% stake now. karen, what do you think carl's got up his sleeve? >> i think he's got poking ackman with a stick up his sleeve. it's fascinating to me. i think it's sport for him. >> yeah. >> maybe he loves herbalife, but i think it's more sport. >> i think karen's right. and i h

terry lundgren's testimony, who is the ceo of macy's, was completely fascinating. as he was when maryland called and said i'm doing this deal with jcpenney. and he said he'd never speak to her again. but yesterday, they got on the phone together, at least an indication there may be some settlement of this. which, by the way, if you want to look at the mistakes ron johnson made here. number one, doing this deal in the first place. number two, writing, you know, sophomoric e-mails sticking it to terry lundgren, which turned him into a full-time enemy. and then three, not resolving this thing and letting it go to trial with hundreds of millions of dollars of legal fees and all this embarrassing information. so in my view people want to know why jcpenney is in trouble need look no further than his management skills in this case. >> i wonder if you think that is hubris that is born in a culture at apple, i guess, where he thought you couldn't lose at all? >> i think there may be some of that. and some of the retail analysts i've talked to said look, this guy's never bee

now, regarding johnson's comments in e-mails, testified earlier in court, saying that terry lundgren some of his word choices and that he was just boasting a little bit. he didn't mean to imply lundgren wasn't working, but when a competitor tries to step up a game, perhaps someone else's game will also have to be changed. interesting stuff playing out here again today. it's not over yet. >> courtney, before i let you go, i want to get your reaction. everybody's talking about the company, and ron johnson, including buffett today, who talked about his own experiences as well. once working there. take a quick listen. >> when you start arguing with your customers about what they want, it's not a good idea. and, you know, it's -- they've got a very, very tough game to play from this point forward. i mean, they've obviously turned away a very significant percentage of their customers, and the thing about retailing is your competitors are always moving. >> you just don't normally hear buffett talk in explicit terms like that. >> yeah. exactly. i think, again, this is one of those cases that

macy's chief executive terry lundgren who is suing both stewart and jcpenney, saying he felt sick to his stomach when stewart said she was doing a deal with jcpenney. lundgren thought they had an exclusive arrangement. ♪ looks like we made it >> reporter: macy's had helped stewart resuscitate her brand after she got out of the clink. both stewart and jcpenney insist there was no breach of contract. on the stand stewart said "it just boggles my mind that we're sitting here in front of you, judge." here's the question, could fresh accusations of being a corporate backstabber be yet another blow to the public image of america's pre-eminent domestic diva? she made it through going to prison. can she make it through being accused of, you know, having really sharp elbows? >> you know, i think people used to think that martha was nice. and i think they've gotten over that. she's somebody whose style authority they trust. >> now, if martha stewart was hoping to use her testimony to seem more relatable, there was at least one misstep. when asked whether customers would be willing to buy her p

terry lundgren said when martha stewart called him in 2011 and said she was going to do a deal with jcpenneyick to his stomach and he hung up the phone with his friend and business partner and has not spoken since. meanwhile, his products are selling in his stores and he's profiting from her. we will hear from her on the stand today and she's going to -- and her company has told us this, they have a contractual loophole that allows her to sell her home goods also in jcpenney. two household names and a brand. a very top female brand all in court today. >> and she's ventured to staples recently, too. >> her products in a lot of different places. at issue here is sheets and linens and things like that in two competitors at the same thing. >> what's the thing we need to know about your money? >> pack your patience. the bite from the sequestrations starting to reveal themselves the next couple days. already we told you passengers at jfk and miami spending more time in customs lines. bring your patience because it won't just be customs travelers. we're expecting across the travelsphere you'll feel

you hear terry lundgren talk about that.ine's interviews was describing how it's almost like cheating on someone. that's really how the ceo seemed to describe it, that he feels personally betrayed. >> that's a whole lot into her brain. and look, department stores are competitive. jcpenney, the dallas-based company, they lost a ton of money. they've been losing money like crazy. so they want this kind of deal. macy's guys saying, look -- >> it's all about the contract. what do the specifics of the contract stipulate. and a store inside a store. it's like what's the definition of store is. it's like what's the definition of store is is going to hint upon. john berman is going to look at other stories. >> in not martha stewart news this morning, another winter storm beating down on the nation's midsection. significant snowfall making travel pretty awful this morning. this was the scene in minneapolis as this late season storm dumped a nice coat on the twin cities. severe weather warnings are still in effect for much of that are

how do i tell terry lundgren he's clueless when he tells me business is good. >> we'll see you in justwe'll see you at the top of the hour. when we come back, our guest host has been mark zandi. we'll get his optimism. more on that when squawk comes back. i'm a conservative investor. but that doesn't mean i don't want to make money. i love making money. i try to be smart with my investments. i also try to keep my costs down. what's your plan? ishares. low cost and tax efficient. find out why nine out of ten large professional investors choose ishares for their etfs. ishares by blackrock. call 1-800-ishares for a prospectus which includes investment objectives, risks, charges and expenses. read and consider it carefully before investing. risk includes possible loss of principal. ♪ [ laughter ] ♪ [ female announcer ] each one of us is our own boss. ♪

terry lundgren says he hung up on stewart when she used that line on him, to explain what was happeningy and her. they have not spoken since. martha is testifying right now. i just heard from our producer inside the courtroom that she was in fact banned from doing business until october of 2011 as a result of that prior case. she wasn't involved in the direct negotiations with macy's in the initial writing of that contract. but she was aware of it. so we'll bring you all the latest as it unfolds throughout the day today. >> as you have been, courtney, thanks so much. courtney reagan at the courthouse in new york city. >>> when we come back, take a look at the u.s. markets here. ism data take us into second gear. up 128. ♪music plays thank you orville and wilbur... ...amelia... neil and buzz: for proving there's nowhere we can't go. but, at some point... giant leaps gave way to baby steps... and with all due respect, you're history. if you taught us anything, it's that you can't cling to the past... if you want to create the future. that's why, instead of looking behind... delta is looki