tv Squawk Alley CNBC July 22, 2020 11:00am-12:00pm EDT
now, of course, before you go out and raise money, you're not supposed to be having these conversations with potential targets. it's against the law so, it's, you know, unlikely that they've actually engaged in due diligence and started that process with airbnb specifically at this point. but you know, i think it's possible he laid it out as one of four potential types of companies that they could acquire, carl. >> all right, leslie fascinating day. certainly a fascinating interview this morning with bill our leslie picker. thank you. david morgan, we'll see you later. good morning, everybody. welcome to "squawk alley," i'm carl quintanilla with jon fortt and julia boorstin from separate locations. another choppy day as we work our way farther from the flag line china tensions are upset by this pfizer news and there's earnings the calendar marches on with microsoft and tesla. tonight, julia, even as we try to process the results from last night, including snap. >> yeah, absolutely. we see snap shares down nearly
9% after reporting yesterday afternoon. let's take a dive deeper into snap's quarter stifel's john eggbert and lloyd wamsley of deutsche bank joins us now gentlemen, you both have buys on this stock, and there was interesting commentary from snap about how they're expecting lower user growth in the third quarter, and they're also anticipating there will be significant revenue headwinds, even though the first 19 days of the quarter they showed 32% revenue growth so jon, tell me, why are you so bullish? >> well, i'm bullish because of the long-term story. and i think that the underlying trends are still intact. on the short term, it sounds like the third quarter will have some complications we're not exactly sure how much sports we'll have. back to school may be limited in parts of the country feature films won't be launching like they normally do, and those are big areas of brand advertising spend that snap and other digital media players benefit from in the short term but in the long term, the direct
response budgets remain very sticky, even during last quarter, which was maybe the toughest quarter in a decade for advertisers. didn't give us a lot of faith in snap's ability to grow over a longer-term period >> lloyd, you reiterated your buy. you increased your price target. in light of those headwinds that john just mentioned, the fact that there isn't going to be so many different factors driving advertising in the third quarter, where is your optimism for the second half of the year? >> yeah, our optimism is really around the business on the direct response side -- scaling up the s-curve the company has been investing in their ad tech stack for the last several years we've heard great feedback from the ad community, and it's really starting to catch on with direct response advertisers. as we head into the fourth quarter, the business will index more towards e-commerce. the company has spent the last year developing more e-commerce-focused ad tools, so we think they're really well positioned into the fourth
quarter. and then stepping back over the longer term, the company has, you know, confronted an onslaught from instagram, from tiktok, and they continue to grow users at a healthy clip, even if it's a little lower than what we had been expecting they continue to grow time spent in their discover unit so, they're doing a really good job executing. and so, we think that the story is very much intact. >> hey, john good morning i want to put these snap results in the context of social media more broadly it strikes me that even though there's talk of this ad boycott, users, the social media users certainly don't seem to be abandoning facebook for snap snap certainly doesn't seem to expect that to happen. as long as that's not happening, are these results, in a way, bullish for facebook investors any way? because it seems like the options are facebook or nothing, social mediawise, at least for most users, and perhaps, advertisers.
>> yeah, it's a great question, jon. we're bullish on facebook in the short and long term, and i think that they, like snap, will take share during this difficult period but i think you kind of have to separate the user story from the advertising story. the boycott, i think, actually speaks to some bigger themes, which is during times of, you know, protest and other things going on in the world, brand advertisers have to pause their messaging to make sure what they're going to consumers with really resonates so, we actually saw, i think before the boycotts, snap seemed to have felt it in its business, and facebook probably will, too. in june, there's just, you know, a week or so where advertisers really had to kind of pause everything and make sure that they had their creative where they needed to be to give the right message. so i think the two are a little bit separate i think social media during times like this can build a lot of awareness about what's happening around users, and that's why even during times our advertisers may not want to be as loud as normally, social media users get a lot of value
from being on the platforms. >> so lloyd, along those same lines, when these boycotts, or at least pullbacks, from facebook started getting announced, i was wondering, is this just a convenient time for a lot of advertisers to pull back on their budgets, given what's happening more broadly, or is this something that facebook and facebook investors specifically should be worried about? given what we just heard from snap, which of those, or maybe a third option, do you think it is >> yeah. so, when you look at facebook, they probably have 20% of their business focused on brand, which is much lower than where snap is so, they're more insolated they've got an incredible direct response business. i think when you look at the brand side, there will be an impact in the second quarter, and that may extend into the third quarter with the boycott, but they have such a strong direct response business that we think the broader recovery theme at facebook is on track.
and to your question about are some advertisers just using this we have heard in the ad community that some of the boycott is a quote/unquote low-cost win they needed to cut their budgets anyway sothat they would take pr benefit of kind of participating in the boycott for something they had already planned to do anyway >> hey, john, sort of related to that, i wonder, across the space, you've got facebook basically deleting boogaloo pages, twitter suspending accounts that reference qanon, if they violate the rules. snap how are they thinking about the evolution of the regulation, at least, on content? >> yeah, well, i think you see all three companies taking moves to adapt to the times, and i do think that a lot of what they're doing is encouraging they're deciding to make changes that they wouldn't do in the past it's difficult to predict how it evolves from here.
the election will obviously be a very complicated period for social media you have some companies not wanting to fact-check, others explicitly fact-checking ads, some not accepting -- like twitter. but i think a lot more platforms will spend time thinking about if they're on the right path, and if not, what they need to do to make sure they're protecting kind of the health of conversation, particularly around the election. >> yeah, john, health and safety very much in focus you mentioned twitter not accepting political ads. twitter did suffer that big hack there was a lot of concern about what that might indicate for the potential for minuanipulation. we hear from twitter tomorrow morning. what are you expecting to hear in terms of outlook and also the steps they're going to take to really protect the platform? >> yeah, given the magnitude of the breach, i would expect some serious contrition on the company's part, because i think they understand that that kind of mistake just can never happen
again. otherwise, it really undermines the value of their platform for political and public conversation and so, i think what you're going to see in terms of tangible ramifications, they're probably going to have to step up their investments in security and engineering quite a bit to bring up their platform to an acceptable level and you know, you may have regulators sitting around as well and making sure they do that so i think they're going to be pressured to do it protractively. but those investments could be meaningful, tens of millions of dollars, maybe even hundreds of millions of dollars in aggregate. and we actually raise our cost estimates heading into the quarter with our preview because it just seems very likely that that's going to happen >> lloyd, i want to give you the last word on twitter here. what are you expecting from twitter, especially for a company that relies so much on live events? we do have some sports coming back, but a lot of live events and movies still missing from the fall >> yeah, i think it's going to be a tough quarter for twitter, specific to the second quarter we are below consensus on our
estimates. you know, the conversations in the ad community have been tough, vis-a-vis twitter, in the second quarter but ido think the snap strengt in brand spend in july means they probably have scoped a sound more upbeat on the exit trends sports are coming back, which is critical for both their engagement and their revenue so i think there is scope for them to sound optimistic on the outlook. but whether or not some of those sports come back with ad budget for twitter, we'll have to see it may be more of a nice to have than a must-buy ad product, so i think it's a lot of uncertainty on the outlook >> john, lloyd, thank you both so much for joining us, on the heels of those twitter results and giving us a little preview ahead -- i'm sorry, on the heels of the snap results and giving us a preview of twitter tomorrow thanks, guys
jon? >> thanks. and speaking of, slack is actually down 3% microsoft slightly higher. slack files an eu competition complaint against microsoft. deirdre bosa has the latest. deirdre? >> hey, jon. slack is accusing microsoft of violating eu competition law with its teams messaging app in a few different ways -- one, by forcing users to install teams because it is bundled with office two, by blocking its removal and three, making some functions inoperable with rival software so, slack, essentially, wants to see teams sold as a stand-alone product. and guys, this is a new twist in that rivalry that has been building for years now, when teams entered this field in 2016, slack posted a blog that said, "congrats. we are genuinely excited to have some competition." slack even offered some friendly advice since, "this is harder than it looks. slack's ceo, stewart butterfield, he was just on our
air, guys. you remember talking to him a few months ago and he said this >> this perpetual question, which is, at this point a little buzz puzering for us, but at some point, microsoft's just going to kill us >> but guys, that's exactly what the eu complaint alleges, that microsoft uses its market power to try and crush slack now, the complaint also throws microsoft into the antitrust spotlight, which it has largely avoided versus its big-tech peers over the last few years. of course, we are all looking ahead to this monday when the ceos of amazon, apple, alphabet and facebook will testify before congress of course, you'll note, i did not mention microsoft. back to you guys. >> yeah, echoes of bundling here, that old term from the browser wars thank you. and spotify, meanwhile, striking a new licensing deal with universal music you can see, shares of spotify rising again this morning, up 5%, what's already been a strong
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welcome back our next guest is trying to change how produce is grown and distributed with its food grown locally and fully controlled environments and touched by only a few human hands, this as consumers look for safer food options during the pandemic. joining us now is the co-founder and ceo of bowery farming, irving faine
irving, great to see you. >> great to see you as well. thanks for having me. >> great to have you so, i visited you at one of your facilities back in november. fascinating to see the automated way you've got stuff growing, just like stacked up amazing. at the time, you had, i think, around 200 stores that you were distributing to. you expect to be at 650 in september? what's driving that? >> yeah, that's right. you know, i think there's two different components driving that the first is outside of the global pandemic and the fact that, in general, you're seeing a trend where consumers are looking for higher-quality food, they're looking for transparency in the food system they're looking to answer questions like where's my food grown? how is it grown? at bowery, we provide protected produce. it's local all year wrong, it's pesticide-free it's grown more sustainably, and that's important to consumers, and so therefore, it's important to retailers and then you layer on top what's happening right now with covid,
and there's a real focus around surety of supply chain for retailers, simplicity of supply chain for retailers, and then just general safety of produce so, i think all of that collectively is really driving the growth that we're seeing at bowery. >> i don't think consumers get this i mean, it's interesting that, you know, it's almost like a manufacturing facility you've got a warehouse, but for growing produce, for growing food but i'll bet you the retailers do has the conversation with grocery stores changed during this pandemic, as they're wondering, are we going to be able to get supply, where is it coming from? you know are the people who are involved in touching this being tested? >> yeah, it's a really good question, because i think what's interesting is that the trend that is pushing us forward at bowery really did exist beforehand, because if you look at what's happening with climate
change and a lot of the disruptions to the supply chain, there were large food safety incidences over the course of the last couple of years there have been major disruptions with field flooding and other issues that are causing retailers to recognize that they need to ensure that they have food on the shelf when consumers walk in. then you add, exactly as you were saying. now retailers are saying, like wow, we not only need to make sure we have that surety of supply, but now transparency and safety of the product itself is becoming that much more important. there's actually been 50% more growth in the packaged salad category compared to nonpackaged salad, and that's really driven because consumers are flying towards safety they want to trust the food that they're buying, wherever it's coming from. and that combination of surety and reliability of supply for the retailers, a much simpler supply chain because food doesn't have to travel thousands of miles it can get on boats and planes and trucks those are advantages and then the safety piece is
really critical. so, i think the conversations were already moving well with retailers. this just only acted as a further accelerant >> irving, julia boorstin here i'd be curious to hear a little bit about the labor piece of this my colleagues here at cnbc have done a lot of reporting about the challenge to farm workers of covid and the risks there and just the challenge of the supply chain there. so, how is your food harvested differently? are fewer people involved? and how do you see dealing with that in covid? i mean, jon just mentioned the question of testing your labor force. >> yeah, so, we, without a question, the health and safety of all of our people at bowery and of the farms is the number one priority for us, and it has been from the very beginning we have two really distinct advantages the first is we run food-safe facilities and always have so there is a standard of cleanliness and safety that's always present long before the pandemic even arrived. the other real advantages we have -- and jon was talking
about this earlier -- is there is a substantial amount of robotics and automation inside of our farms that we develop so, what that means is our farmers actually work in a way that's much more spaced out than some of the images you see at these meat processing plants where people are required to really stand shoulder to shoulder and have very close contact with one another and so, those two components combined with just an increase on focus in safety and social distancing and testing within our farms have really led to a safe and secure workforce for all of the employees at bowery >> hey, irving, we've got double-digit unemployment and you've got food inflation. i mean, you've got to go back to the '70s to see it this bad. isn't it possible that households are going to be looking to trade down when they buy food and not paying as much attention as to how it's farmed? >> so, you know, i think the important thing for us is that right now bowery is on the shelf at or below the cost of a traditional organic product already, so we're already competitive on that shelf and
not asking consumers to pay a big premium. that's important right there the second piece, and the data that's interesting, is while people are spending more time at home -- and there was a recent study that said over half the consumers are cooking 90%-plus of their meals at home and when people are cooking at home, they're actually spending more time thinking about the health of what they're eating and the quality of their ingredients. so, there are certainly going to be places where people are trading down, but there's actually been an increase in fresh produce sales. i think people are really looking to say, how can i eat it healthier when i may not be as active and out the way i normally am? >> and irving, finally, interest rates are low, but i mentioned there are questions about the availability of capital. what has this economic environment done to your plans to expand? because you know, you want to be close into urban areas you need buildings you need equipment has that slowed down has it sped up >> yeah, it hasn't slowed down at all, and i think we are in a fortunate position where we have some incredible investors and
supporters behind us, whether it's google ventures or tomosic. and some of those folks, i think what you're seeing in the capital markets is, there may be slowdowns in some areas, but there is still a lot of capital in the system, and that capital is looking for great companies in great industries. and when you look at what we're working on at bowery and the trend around indoor farming in general and the growth that we've been talking about during this segment, that's exactly where investors are looking to say, i want to place capital in good places, in good companies, and in industries that i really believe are poised for growth. and we already felt that way about indoor farming i think covid and the global pandemic has only exposed how big the opportunity in front of us really is. >> yeah, and again, i have seen that facility that you've got in kearney, new jersey, at least one of the facilities that you've got it is fascinating stuff. thank you, irving. irving fain, bowery farming co-founder and ceo >> thanks so much for having me. europe's going to close largely in the red seema mody's got a breakdown
this morning >> hey, carl stocks are pulling back from four-month highs led by declines in france and spain. it follows a weaker session in asia after the state department ordered china to close its texas consulate on orders of spying. there is also a new big-tech antitrust battle in europe with slack filing a complaint against microsoft, with the european competition alleging uncompetitive behavior they say they used the office suite to add users to a weak copycat product. the eu commission this morning says it's received the complaint and will assess it under standard procedures. now, this is the second time a big-tech rivalry has spilled into the european commission following spotify's complaint against apple last year. finally, can't seem to hold the euro down. td securities today saying it should extend its gains against the dollar as the eurozone has done a better job in managing the coronavirus than the u.s the euro currency, worth noting, up 7% against the dollar over the last three months.
julia, over to you >> thanks, seema want to take a lack at best buy, hitting a new all-time high this morning after the company noted a rebound in sales both in store and online that stock now up 8.5%, is one of the top three performers in the s&p today. "squawk alley" will be right ckba when we started carvana, they told us
that selling cars 100% online wouldn't work. but we went to work. building an experience that lets you shop over 17,000 cars from home. creating a coast to coast network to deliver your car as soon as tomorrow. recruiting an army of customer advocates to make your experience incredible. and putting you in control of the whole thing with powerful technology. that's why we've become the nation's fastest growing retailer. because our customers love it. see for yourself, at carvana.com.
this hour. with more than 409,000 confirmed cases, california has overtaken new york as the state with the most confirmed infections. new york still has the highest death toll, followed by new jersey, massachusetts, and then california representative ted yoho has apologized to fellow congressman alexandria ocasio-cortez on the floor of the house yoho also said he didn't speak "offensive name-calling words" at this is colleague, but alexandria ocasio-cortez claimed yoho called her an "expletive bitch" on the steps of the capitol. canadian tourists took in a sight other than the iconic waterfall. crowds of u.s. visitors aboard the tourist boat the "maid of the mist" company says it is complying with rules that include a 50% capacity limit. but on the canadian side, just six passengers are allowed on u e lar ships. yoarup to date
one of the most highly anticipated results of the week is going to come from tesla later on tonight joining us this morning to talk about it, former ford ceo mark fields, now a senior adviser at tpg capital. mark, always good to have you. welcome back >> thanks, carl. good to be here. >> i am -- you know, it's funny. we talk about tesla now in increments of 420. a couple weeks ago it was three times 420, the stock now four times 420 i assume you're in agreement that the price has separated itself from whatever fundamentals we have to work with >> yeah, absolutely. the evaluation of the company has no basis in, you know, traditional valuation metrics. but i do think investors are looking at a couple of things. i think they're looking at the growth trajectory of the company, you know. it's added the shanghai plant. the european plant is being added. at the same time, they're
looking at the competition and folks like vw, who are launching an important crossover in europe, is having a lot of problems with the software management of that they're also looking at the new products that are coming are all incremental. interestingly, even in this down economy, countries or continents like europe and countries like china have not moved off their co2 regulatory requirements, so that's going to further, you know, grow electrification and i think there are two things investors are looking at one is just the software expertise that tesla has in managing the batteries, because as you think about the innovations around electrification and even autonomous vehicles, it doesn't depend so much on mechanical ingenuity. it depends on software expertise, quality, execution and integration, which tesla has. and finally, i think tesla's doing a lot of innovation in batteries.
some traditional oems may be viewing batteries as a commodity that they purchase from others, but tesla is doing a lot of innovation, and we'll see what they come up with in their battery base so, i think for all those factors, there's a lot of expectation for the valuation. >> right right. i wonder if you think -- i mean, everyone tries to read elon's mind, but the degree to which he worked his staff so hard to get open, stay open, get capacity, get supply out, in the quarter, do you think that all was driven by a desire to be in the s&p >> well, i think it was first and foremost a desire to show consistent profitability, because that's been the big knock against the company, is can they profitably grow consistently and if you look at this second quarter, you know, he took very aggressive actions in the quarter. he cut salaries. he furloughed staff. he demanded rent reductions for his sales locations. he even preannounced increases
in some of their features, like their autonomous pilot autonomy co-pilot, you know, that particular feature that they have on the vehicles and he announced a $1,000 increase on that effective july 1st. so he is looking to improve the mix for the quarter. and at the same token, if you recall, he took very aggressive action against california and local counties to get his plants open back in may and listen, in the long term, if your plant is down a week or two weeks, it's no big deal. but if it's down just one day in a quarter, that is a big deal for the quarter. so, i think for all those reasons, he was pushing for profitability. and there's probably one factor that also, as well, as you mentioned, would be a feather in his cap to be included in the s&p 500. >> yeah, mark, julia boorstin here it's interesting how much that inclusion in the s&p 500 could drive demand for tesla's stock
you know, the stock's already up 279% year to date. i have to ask, with all of this in mind, there are going to be other ev models that are hitting the market, especially in the next year. do you see any of these other players really posing a real threat to tesla? >> well, i think you have to put into perspective for the most part, tesla has had the market to themselves, you know, for the past five years. now they're going to have competition. so, just at its highest level, it's going to get tougher for tesla. but when you look at some of the products coming out from the established oems, they're very good products. the question is, can they master the quality in those products, particularly around the software and you know, the knock against tesla was they didn't know how to, you know, manufacture a vehicle. and they're learning you know, they still have a long way to go, but they're learning. but what they do have mastery of is how you manage the software systems in an electrified vehicle, in a thermo magnetry
and all of the technical aspects. those are things that the established oems are growing so if they launch their vehicles, the good news for them is they're going to have competition for tesla now, but they're going to have to master that quality coming out of the gate to prove to customers that they can compete effectively with tesla. >> hey, mark, it's jon fortt good to see you again. >> hey, jon. >> i can't help the feeling that a year or two ago, we were saying, well, starting now, tesla's going to have some real competition. and yet, i mean, do they so, i wonder, is tesla actually looking harder to beat right now, halfway through 2020, than they did two years ago >> well, i do think, you know, they've expanded their product lineup they have now gone global, so they're in some major growth markets like china, and they're about to launch their plant in the near future in europe. i do think what they've been -- they do look more formidable, i would say, two years on, and for
two reasons. one is, they've continued to drive their expertise in software and secondly, i think, you know, they're learning how to be a manufacturer if you recall, elon and tesla had a lot of problems since launching the model 3. and let's face it, manufacturing a vehicle where 4,000 parts come together, it's hard. and they've had two years to work on it their quality is still not where it is versus some of the established competition. but they're learning so, at the same time, you know, they've announced new products that are coming to the market. so, i would say they're more formidable but listen, this is a long-term race so as some of the manufacturers like ford and vw bring some of their compelling electrified products to the marketplace, i think we'll have another conversation in two years' time when we may have a different view >> yeah, that was the other big news on monday, mark, was ford's
partnership with mobileye on next-gen driving tech. i wonder how interesting you find that race, at least in these early days >> yeah, when you look at autonomy, i mean, let's face it, given covid, the manufacturers are really focusing. they're not backing off on evs, or electrified vehicles, and that's because there's a business model there, although at lower margins than their internal combustion engines, and the technology is ready. in the case of autonomy, whether it's level four or level three-plus, the business model isn't there yet and the technology isn't there yet and when you look at somebody like ford partnering with intel and mobileye, it's just telling you that they're pooling resources as they go forward, both with suppliers, what they call tier one suppliers, and with other oems, because they're not going to see a payoff on that investment and a dollar of profit of that for quite some time so, these kind of joint ventures, and also working
together, you're going to see more and more in the industry, particularly around the new innovations around autonomous vehicles and other ones. >> it's going to be fun to watch tonight, as it always is, mark and we appreciate you helping us get ready for it we'll see you next time. >> you bet thanks, carl right now we are getting a "market flash" on first energy leslie picker has that leslie >> hey, jon. i want to draw your attention to shares of the ohio utility company firstenergy, now down about 25%, and that slide comes after yesterday's 17% drop the company said yesterday that it was subpoenaed in connection with an investigation into a bill passed in ohio last year. that bill helped bail out firstenergy's former nuclear plants to the tune of $1 billion. yesterday, u.s. attorneys charged the ohio house speaker, larry householder, and four others, saying that they took $61 million worth of bribes connected to that bill firstenergy and its former
subsidiary, now known as energy harbor, have not yet been charged and are referred to in court documents as "company a. first energy said in a statement that it is reviewing the details of the investigation and intends to fully cooperate guys >> all right, leslie thanks. and coming up, apple partner jamf set to make its wall street debut this morning we will speak with the ceo right after "the first trade." stay wh itus
they have an equal balance between both value and growth investments. >> thanks so much, steve smart speakermakersonos is on a tear, up more than 60% over the past week and notching a new 52-week high today we'll keep an eye on shares of that stock. meantime, pfizer's chief business officer joins us xt ayitusne this is decision tech.
it's been a busy week for vaccine data trialwise, but now we're getting into the nitty gritty of actually ordering stuff once it gets approved. meg tirrell's back with an update on that hey, meg. >> hey, carl this is moving at warp speed and of course, that is the name of the operation from the administration to ensure at least 300 million doses of vaccine be available toward the end of this year, early next year today striking a deal with pfizer and its german partner bi-ontech to supply 100 million doses of their vaccine, should it have success in their trials and getting approval they will be paying $2 billion
for the doses and this is a two-dose vaccine, so enough for 50 million people. they could also acquire an additional 500 million doses, should all go well and they want to acquire more. pfizer is due to start phase three trials for efficacy and broader safety of this by the end of this month, guys. so moving pretty quickly and they say if all goes well there, they should be in a position to apply for regulatory approval in october. so, we could be seeing the u.s. government starting to purchase doses as soon as september, secretary azar said this morning. >> and meg, how does this particular announcement, the nearly $2 billion, fit into everything else that we've heard from this "operation warp speed," in terms of the amount that the government is paying and just how it fits into the overall expectations for how this vaccine might roll out? >> yeah, it's a great question it's both the largest dollar amount we've seen yet, $1.95
billion, but it's also a little bit different. it's the first direct purchasing agreement of a vaccine for actual doses after they come on the market and jon, i'm going to pause right there to bring in pfizer's chief business officer, john young, who can tell us more about what this deal means john, thank you for being with us this morning. you know, i do want to ask about that supply. you know, pfizer has said it can manufacture globally 100 million doses of this by the end of this year with this 100 million-dose purchase order from the u.s. government, does that mean the entire initial supply is coming to the united states >> o, meg. thank you for the opportunity to join you and talk about this contract announcement this morning to supply up to 100 million doses of our vaccine candidate to the u.s we're obviously very excited about that so you know, in terms of the answer to your question, we are obviously working extremely hard our manufacturing team are working very hard to scale up
two parallel supply chains, a dedicated supply chain for the u.s., based in our pfizer facility in st. louis and andover, massachusetts, and kalamazoo, michigan. and then in parallel, along with our partners biontech, to scale up parallel eu supply chain. so, our anticipation, as we've said publicly, is that, you know, globally, we expect to be able to manufacture up to 100 million doses by the end of this year and up to 1.3 billion doses by the end of 2021 so, we're plainly in the process right now of making the necessary investments to scale up our supply chain, and we're looking to accelerate at the manufacture and production of our vaccine as quickly as we possibly can in order to be able to supply what plainly is a position where demand will exceed supply. >> absolutely. how will you make those decisions? i know you've also struck a deal to supply, i believe, 30 million doses in the uk. you know, if you get regulatory
approval late fall, early winter, you know, the end of this year, how quickly will those 100 million be supplied in the united states? >> so, the contract, obviously, provides for those doses to be supplied to the u.s. starting in quarter four this year, and obviously, subject to the successful completion of our phase three study. and i just wanted to underscore that we're also seeing very encouraging preliminary data from our phase one study we need to confirm the safety and effectiveness of our vaccine and our large pivotal study. but in parallel with all of that, we're really doing that work on our supply chain to try and make sure that we can bring those doses to the countries where we have agreements in place as quickly as we possibly can. so, really, the way you should look at this, meg, is you know, it's 100 million doses globally by the end of 2020 and then, obviously, that production continuing to ramp up and scale up during 2021
>> and that phase three trial, you guys are saying you're planning to start in the u.s. by the end of this month. i mean, that's really within the next week or so, right do you have a trial start date you can give us? >> well, our commitment remains to, we believe we still are on track to start that pivotal phase 2b3 study later this month. obviously, we're at the 22nd of july, so we're coming towards the end of the month, and we will receive, actually, in the next few days, remaining data from our phase one study and i think as i said in my testimony to congress yesterday, we expect to be able to use that data to make a selection of a final vaccine candidate to take into that study and also a selection of the dose that appears to give us the optimal balance of safety and also effectiveness, and across all age ranges we will submit these data to the fda, and the fda have been really exceptional in terms of
their collaboration. and by that, i mean realtime engagement with our data, reviewing our submissions, and so on and so forth so, as things stand, we still believe we have a lot of work to do we're working literally 24/7 on this, but we believe we have a critical path to be able to initiate that phase three study by the end of this month. >> and pfizer is doing things a little bit differently from other companies in this space, you know you did not take barda funding for the development of this vaccine, and you're not participating in the government orchestration of the large clinical trials. so, are you going to be competing directly with companies like moderna, which is planning on starting on monday, to get access to people to test your vaccine on? >> no, we don't believe so i think, you know, plainly, the need is very significant and certainly, we believe that there are many sites around the u.s. that we, moderna,
astrazeneca, other companies that are anticipating going into pivotal trials, we'll be engaging in. and we certainly don't believe that competition for sites or patients is going to be a great limiting step. >> finally, i just want to ask you about the price that seems to be established for the vaccine, about $19.95 per dose you need two doses for this vaccine. i talked with your ceo who told me pfizer is doing this, expecting to make a profit are you going to be making a profit here at this price? >> so, we have to be clear that having gone at risk with significant capital investments in our r&d program and manufacturing scaleup, should our vaccine not succeed, the government does not underwrite the cost of that we decided to make that risk, and decided to do so solely for the purposes of moving as quickly as we possibly could
into our phase three program we believe that was the right decision we believe this contract today for 100 million doses, and contract value of $1.95 billion was laid out for the first 100 million doses, but we've also been clear d. i mentioned this yesterday that this an extraordinary time in our history. our pricing will reflect that. we are also very clear that vaccines should be free to the public in other words, no co-pay or costs for somebody to receive a vaccine, because pricing shouldn't be something that gets in the way of access, and we're very pleased that that was part of our announcement today. okay john young, we pressure you being here with us this morning. please keep us posted on your progress. >> thank you, meg, we will do that >> julia, back over to you meg, thank you so much for bringing us that important
we've talked a lot about ipo pricing as the window has been open do you think you left some stuff on the table >> we're excited about the day this is really about the long term for us. we want to be able to commit to our 40,000 customers we'll be here to innovate, and going public is part of that journey we are a company that's cash-flow positive so therefore we are able to pay our bills with our own operations so we're very pleased. >> dean, it's jon fortt. good morning congratulations. it's interesting that you started months after apple opened up its first retail stores, which ended up wiping out a lot of independent, you know, third-party apple retailers, but you guys have grown. apple for a while was trying to build an enterprise sales business out of its stores, which i imagine would have been a threat to you, but what
happened to that >> first of all, we -- from a sales perspective, we sell our software, we're not a reseller of apple hardware, on any channel that puts apple into the enter price, is a friend of ours we offer the subscription software services that allows user to connect to the enterprise, protect their apple. >> but i imagine they would have come for that next, is my point. >> apple is maniacally focused on the experience individuals have they focus on the person we focus on the people everything that apple builds, we think about deploying it to hundreds of thousands of individuals. >> congrats on the ipo give us a sense of how much your business has been impacted by covid and the stay-at-home/work from home trend as you serve to
say enterprise customers. >> obviously internally we sent all of our own employees home. because we are a server-less environment, a tech environment, we all carry excellent apple equipment. we could go home the last four months and not skip a beat we're in the fortunate position to help a lot of organizations through this specifically we've been able to help enterprises send that you are workforce home, with request i want that -- we've been able to help schools send students home, where teachers still have control of that classroom virtually, as if the students were ten feet away as opposed to ten miles away we've been able to help hospitals connect caregivers to patient through technology while keeping the care provider safe >> dean, some of of us are old enough to remember when the word apple and enterprise didn't
always match, except for maybe education. that seems to change back in the days of the ipad and bam more of an industrial tool what inning do you think apple thinking we're in? or maybe what inning do you think we're in >> that's a great question i'm old enough to remember that one time in our history we used at home what we were issued at work today people want to use at work what he love at home that's the consumerization of technology it's all about being as productive with your technology and having the same kind of experience at work that you enjoy in your personal life. i actually think, believe it or not, we're still early on. i think we're in the first half, at the very least of this game there's a lot of movement with apple moving into enterprise spa space. i think this workforce going
home, now that they have a taste of it, some are rather liking it, and frankly i think that will playoff the consumerization forward faster >> finally you say that expanding your global presence is a high priority for you right now. in what way do you expect to do that, given the times that we're in >> yeah, about 25% of our revenue has come from outside the u.s. now, we're growing even faster outside the u.s. than inside because we're able to provide all of our software, support and services in a repluto fashion, we have an excellent go to market channel in every geography around the world, very offici official efficient. dean, as you know, viewer appetite for anything apple-related is endless we hope to continue to check on you in your public life.
congratulations once again. >> absolutely. thank you so much. dean hager from jamf we'll watch that today along with several others, and we'll see what twitter says in the morning. for now, though, a lot of gains being driven by mcdonald's, believe it or not. we'll see if chipotle matches that let's get to the judge thank you very much. this is the "halftime report." we'll debate all that's riding on the earnings reports today. jim cramer is also here with us today. let's go to the wall, check stocks as we turn our eyes to the reports after the bell we are green across the board.