tv Squawk on the Street CNBC April 14, 2022 9:00am-11:00am EDT
best offer. >> who knows what lurks in the minds of men you know who knows >> no. >> only the shadow only the shadow knows. i don't know what elon is thinking it's been a great thing to speculate about today. make sure you join us -- oh, no, not tomorrow, monday three days tax day, eh. see you monday good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with david cramer we'll discuss the big news of the morning. of course, it is elon musk launching a $43 billion hostile takeover of twitter, offering $54.20 a share, 18% premium to the prior close. musk writing a letter to chair taylor saying, quote, since
making my investment, i realize the company will neither thrive nor serve this societal imperative in its current form twitter needs to be transformed as a private company my offer is best and final if not expected,i'd need to reposition my stance as a shareholder. twitter has extraordinary potential. i will unlock it twitter saying the board of directors will review the proposal to determine the course of action that it believes is in the best interest of the company and all twitter stockholders jim, wide range of opinion about what is going on. >> best and final means no negotiation. well, bret taylor represents the share shareholders he can't do that you can't just say, hey, you know what, we'll take it you can't. that's not share to the shareholders in all the coverage this morning, i've not heard about the shareholders protection from elon he can't steal the company even if he has -- thinks he has a better idea, that doesn't get him to be able to take the
company. so i'd like to ask david, because i think this is important. david, there is a fiduciary duty on the board they can't abdicate because they got a best and final deal. he is not buying a house here. >> jim, i think you're right on the key question that's come up any number of times already in the calls ids i've had this mor. best and final, the use of that term, which we rarely, if ever, see. certainly in an unspliolicited d certainly, in the uk, you don't. we know musk's unpredictability is high. to your point, this board, which i can tell you will have an initial meeting at 10:00 a.m. this morning, from what i understand, is going to have to consider what that means you know, is it buffet esque, in
a sense? remember when warren approaches a management, he often has that as an unsaid condition hey, this is it, take it or leave it but the take it or leave it, best and final part of this is a key. agree with you, in that i don't quite understand what the board is left to do here typically, they're not going to say, "okay, thank you so much for paying this price. it's over and done with. of course not. no board would do that you might begin an auction you might consider if there are any other strategic alternatives on the other side, you might say, "no, thank you," then the question is what musk really does the alternative, though, could mean, jim, and i'll leave this to you, the stock goes down an awful lot, particularly if he sells it. >> well, i don't think this board is taking that short-term view by the way, david, if i were advising this board, i would say there may be personal liability if they agree to this. this is one of those where they literally are not doing their job.
there is no fiduciary responsibility if they say, "we take it. david, that opens them up. you remember, there are times when individual directors are opened up for a level of lack of fiduciary that i think crosses the line this crosses the line. >> well, listen, they all have dno insurance. today i'm sure wilson, the law firm that advises twitter's board and will be involved, will be front and center, more so than bankers or advice they'd be getting on the financial side. what do we do here from an m&a and legal perspective, what is the right thing to do as the board typically, you'd open up a conversation, which would include price. oftentimes, of course, that'd already have taken place prior to this. this is unique this is musk he already owns 9.2% of the company. he already spent billions. another key question, i know it sounds funny to ask it of the world's richest man, but
nonetheless, his financing why not include in your offer something that give an indication that you've already got it locked down, that you're going to offer up stock that you'll get collateralized, that you're going to borrow against, that you're going to sell a certain amount of shares something that gives eves every and the board a sense that, okay, jim a carl, nd carl, thiss financed he is the richest man. why would he want to do it all in equity? you'd expect he'd want to use some debt here to buy this outright for $43 billion and write a check or sell shares to equal that amount of money seems odd, as well that's another question i would have thought at least financing would have been addressed in his brief letter to bret taylor. >> yeah. carl, it's erratic erratic behavior it is not what people expect that's a serious board
a lot of people felt he controlled his own board maybe he thinks that's what they have here. they have no choice but to project it i think they can say, look, we're open to all offers beyond that, carl, if they say, "we accept," they're phony. >> right. >> they're not phonies. >> that's why we have two downgrades this morning. cfra. >> yes. >> market performer. the general theory is likelihood that he does walk away and the shares tumble from there. >> right. >> is the view that he is trying to elevate the price to exit period, is that too nefarious? >> boy, that would be a violation, too he has to announce everything down he is, i think, doing one and done this guy can take a loss like nobody can take a loss i just think maybe he doesn't -- you know, he got tired of it like i said, he is a capricious individual who, of verall, may
know what to do with twitter, but doesn't go by the rules. it is not a car or house it is a publicly traded company. he doesn't really respect the s.e.c. when you look at the board, every single one of those people, they're from a world where this doesn't happen. they're not going to suddenly change their stripes, carl >> david, it kind of also raised the more theological question about what's the best ownership structure for the company, period fred wilson this morning, founding investor, twitter is too important to be owned and controlled by a single person. the opposite should be happening. twitter should be decentralized as a protocol. power is an ecosystem of communication products and services we're back to a theoretical discussion of who owns the public square? >> without a doubt i mean, if we were to get to that point, there'd be a lot of debates in terms of whether it is good for society to have the world's richest man own a powerful platform like this. although, on a regulatory side, it is unclear there would be any
true impediments were they actually to agree to a go private with mr. musk. unclear whether we're going to get there. listen, again, at this board meeting, when this board starts talking an hour or so from now, guys, you have to go through best and final what does that actually mean what do we think this company really is worth? do we think there are other strategic buyers out there would we consider starting a process? do we want more information on financing? do we put in a poison pill these are all key questions. jim, i would note, though, it is interesting to watch the stock trading up it is below the offer, $54.20, so cute with the 20, right >> right. >> it is, nonetheless, up. that is the market, not believing, certainly, this is something that doesn't have a shot and/or i guess this somebody else might come along though i have a hard time coming up with a long list of buyers of twitter at that price in the strategic world. >> bezos wanted to preserve the
"washington post." i think the things that musk wants to do with twitter are substantive. i think that, david, they have to say in their response, we are open to something more substantive. you give us not best and final, but give us that you're fully financed and we come to the table. that's what i need to hear in order to stay long twitter that's why i think the stock is up that's certainly a good response. >> yeah. again, back to best and final, i mean, if you're the board and you're thinking just no, you are faced with the possibility your stock is going to go back to, i don't know, jim, again, i'll leave it to you, 30. i don't know where it goes. >> yes, but -- >> down a lot. do you want to face that >> i -- >> maybe you do, maybe you don't. finally, i would add one historical note here i don't remember any deal getting done unsolicited at the initial price, except for one i thankfully broke carl remembers it, too dow jones. it was 60 bucks off a stock
price. i don't remember where it was, probably in the 30s. the premium was so enormous, of course you had to say yes eventually this is not quite that. >> that was family members. >> i was going to say -- >> that was family members there are no family members on this board fred wilson, who was my chairman at the street, listen to fred. i mean, fred wilson is the dean of ethics of these kinds of things i just respect him totally that's a very important point that you have mentioned about fred >> you know -- >> yeah. >> as with lots of things muskian, there is the hidden easter eggs. the 54.20. the 4.20 within is that a wink >> david, how about the idea he likes to have so much fun that it obscures his real goal? what if he'd said, look, here's the price. you know what the discussion would be like? oh, here it goes
the war has started. no, he puts all the stuff in say, you know, get serious had he just put a price out there, one line, david, you know what the conversation would be between you and me opening bid. who else is in he defeats his own purpose, doesn't he >> yeah. listen, but it's musk. he is a unique figure. >> yeah. >> he is iconic. he is the most consequential -- he is the most consequential man of business, period. i think it is fair to say at this point so he gets to write hiss own r - his own rules, and he always does he is doing it here. your guess is as good as mine, whether best and final really means that whether it is -- and i used the term earlier -- buffet esque, or whether it leads to a negotiation where he backs off that and comes up with a price that's not ending in a 4.20, and that, perhaps, fully reflects what the board sees as the full value of the company jim, i don't know where it is. i don't know what you think. i don't know what you think twitter really is worth, you
know, in a go private and/or a change in control situation. certainly given where it's come from and the problems the company has had for some time. >> it did trade as high as 73, so it is easy for board members to say, look, this is so far from where it's trading, we can't give it up like this that would be legitimate carl, i have to tell you, it is a poorly run company they've underperformed they're very -- remember, they're not up to opening day. when you look at chart, i mean, i think you'd say, all right, you guys had your chance so that is something that, i think, is going for musk again, musk keeps taking things away i mean, i wish that musk hadn't -- if he didn't say "best and final," discussion would be perfect. >> they think it should trade anywhere at a 20% to 30% discount to snap. >> to snap, right. >> this year's revenue putting it in the high 40s, low 50s. >> david, you have to love it.
in 2017, disney came close to acquiring twitter. go back and say, well, here's what others -- remember salesforce they went 29 fidelity didn't like the deal. >> i know. they got pushback from shareholders hard to imagine a world in which disney or salesforce has interest now, right, jim >> not at all. >> i don't know what the list includes, but i don't see either of those names on the list by the way, the premium for dow jones, thank you, todd, was 67% off the initial bid. that is not this even before he started buying stock, it is still not this. again, back to best and final. that's the key here. you know, you could find a board that later today says no, or soon, says no and it's over. we'll see. we'll see. >> i don't know. tomorrow maybe says, i want to join the board again
look, he isn't like us he doesn't believe in the s.e.c. world's richest man. he is -- i keep coming back to this -- capricious carl, we've discussed him now, and now he has everybody in the country talking about i. if he has everybody talking about it, he has more viewers. it is important for him. he is egomaniacal. he is funny. he is different from other bus businesspeople, and i think he wants other businesspeople to be like this. the former ceo of t-mobile was saying, why aren't they like me? >> we can count the businesspeople like that on one hand, right? >> yeah. >> maybe less. >> i mean, he is an arrogant, musk there is a division of the company created -- a division created by fdr, the law of the land, and he thinks it doesn't really have any say over him
>> yeah. >> justices never come to the aid of the s.e.c. on this. they've been ilent >> no. listen, at least he did sort of file his deed in a timely manner i mentioned it to you yesterday, but at least he gave us an update on his position i'll say that for him. yes, if it is best and final, if they do say no, and if he does sell all his shares, as is possible, jim, it'll be interesting to see what happens then then we'll just reference this once again as another sort of, you know, interesting point in the history of, as i said, certainly one of the most interesting people in the world of business and the most consequential that we have right now. >> you're saying he makes this business amusing, and that's why -- >> i am a clown to you >> yeah. >> well -- >> maybe he is a ringmaster. big apple circus. >> you know, sometimes we sit there and go, it is easy to write a letter
i mean, he's already spent, i don't know what the number was, $2 billion something on this position for him, it's pocket change. he finds it in the couch still, it is a significant sum of money he has actually already spent. we want to know more give us a little bit on the financing, how you expect to actually do this any chance you bring in any partners or something like that. >> morgan stanley signed off on this, right? he used morgan stanley's name. >> morgan stanley signed off he did, once an underliner of twitter. >> on april 4th, a note suggesting there would be an alliance between musk and silverlake on the board, right >> i think if he'd said, i'm making this bid. i have morgan stanley as my banker, then the conversation, again, would be, david, do you think anyone will pay 60 that's what it'd be like instead, it's like -- >> i know. though -- yeah morgan stanley doesn't typically
sign onto something like this unless they actually think they can win. i'm not sure what that means >> serious person. >> i would expect that morgan would have pushed them a little bit on providing more definition around how you finance the transaction. >> do you think -- >> again, come on, he is the richest guy in the world, but still, you want that it adds to the level of seriousness of it. to your point, jim, there is a lock of it in certain parts of what musk does. >> do you think tesla down 2 today is fears he would have to liquidate some >> absolutely. like david said, the bump in the price today isn't nothing. it was 52 at one point today the sale of tesla is -- look, it is the opening salvo that's what we have to find out. this board meeting that david is very close to is everything. because the board meeting is going to say, get serious, or it'll say, we're serious i don't know whether they'll say get serious or we're serious david, i wish you knew because
that's the story of the day. >> yeah. well, again, this is an initial meeting of a board that's probably going to have a couple of them on this. what you want to do is talk to your legal adviser, talk to your financial adviser, get a sense as to what can happen here talk about possible defense of putting in a poison pill, for example, if you think it is effective or adds to the leverage you have with them. then consider, would you go the strategic alternatives route are there others a lot before the board, jim. i don't want to pretend they'll have it all figured out by 10:30 this morning they're not. >> you said they'll have a couple of them on it i mean, how many, three, four? >> what, a couple of what? meetings >> tequila, gin, vodka a couple of 'em, i don't know. couple d-- be more specific. >> come -- >> doobies >> it is legal in california. >> he probably wants to make the
9:00 hour of "squawk box" and "squawk on the street" terrific. and i don't like amazon. he's probably thinking that, too. we'll get to what andy jassy told the guys on "squawk." from the road, david faber joining us to talk about twitter. when we come back, the banks. we'll get to goldman, morgan stanley, wells, citi, ubs, and others taking another look at the pre-market claims, up 18 to 185k retail sales roughly in line of course, the ecb leaving rates unchanged but renewing their pledge to end bond buying in the 'rba ia mth wee ckn moment th. keep dreaming. [music: “you can get it if you really want” by jimmy cliff]
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so boost your bottom line by switching today. comcast business. powering possibilities.™ bunch of bank earnings we'll start with shares of morgan stanley, up in the premarket. beats on the top and bottom line same for citi. on the flip side, wells is falling. earnings beat but revenue slightly below projections the bank says it'd be helped by rising interest rates. aggressive fed actions and the war in ukraine adds to downside risks. goldman here, after reporting better than expected q1 profit and revenue. the wells story is actually the outlier is the credit tailwind opposed to the bill. >> yeah. the club owns wells, we're up huge on it i was disappointed i don't want to hear that america's national bank has a ukraine problem. i don't want to get -- i said last night on "mad" i felt
jpmorgan was forthcoming about ukraine. i didn't expect sharf, because there is no real european exposure goldman didn't really say it because it sounds awful to be, let's just say it, an opportunist about the warm if you are worried about ukraine, you came to us. it was true and it was a good reason they had a good number. other side, management was supposed to be good, but the stock market went down they're levered to that. expenses, which everyone was worried about, were terrific. >> down, expenses down 18. >> very impressive so i think this is the quarter where soloman said, i told you can adjust my expenses yao didn't believe me. i told you i had a stream of revenue that's really consistent you didn't believe me. i told you our capital markets would do well no matter what you didn't believe me. i won all three checks that stock goes higher
let's not forget, the value. you're talking about $293. that's a pretty clean book because goldman scrubs everything goldman is the star of the day gold man is the star. >> seems the up vestment banking down 38% at goldman, 27% at morgan stanley priced in? >> i thought so. higher than morgan at 15 not priced in. >> other thematics, light tax rate pretty much across the board. made things easier. >> that's rtrue i don't know in the end, goldman and morgan stanley are both going to be good today c citi, i found confusing it is up other than a decline in russian exp exposure, i didn't see much. unproven situation i'm tired of seeing this tangible book there of 79, stock at 50. how tangible that is -- remember, they said
they had to back off in the buyback. >> yup. >> i've not seen that degree of difference between stock price and tangible book, other than when you start getting into the fed era. this is a more solid bank than those. washington mutual. these were banks where the book value was overstated i want more information. i want everything in the book value explained to me. this should not be -- you mean to tell me if citi closed today, i get the 79, which is what book value is supposed to mean? there is something fishy there i don't buy it. >> nteresting. speaking of expenses, down 18 at goldman. citi up 10 it was a surprise, as well. >> i don't like that either. look, i'll be honest, not that i'm dishonest, but charlie sharf is a guy i banked on when we bought the trust we're up huge. but i made a mistake not selling it at 54/55.
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i can't tell you everything. but if you want to make history, you gotta call your own shots. we going to the league! we had been cutting back on twitter once jack dorsey handed over the reins he had been selling. there is now going to be management distraction and maybe board distraction, with or without elon he is going to -- he is going to get his message across probably even more effectively not on the board, which may be the reason he is not going to be on the
board. so i think there's going to be some drama, and we don't know if the advertising model, the subscription model, some combination of that, is going to prevail. >> i think there's going to be some drama that's cathie wood talking about twitter and elon musk. she was directionally correct. bernstein this morning, is the price fair elliott originally invested when it was in the low 30s in march 2020 80% can be seen as a good return from their perspective. >> well, i think that, in the end, had he just made a straight o offer, i think bret taylor, representing the shareholders, would say, okay, you noyknow wh, let's see if someone wants to beat that. i think he can still do that elon musk can change his verbiage remember, he is subject to change and drama. >> you don't think he would suffer from saying, "it wasn't my best and final at all"? >> i think he'd be happy to do it if the board says, you know
what, we'd like it to be higher, he says, you know what, i said my best and final. that was somewhat rhetorical let's talk i mean, i think cathie wood, even though she was selling the stock wrong, the decision causes drama. drama on broadway, you get what you get. it wasn't a comedy there's the opening bell and the big board. pen and park investment transferring from the naz dam a nasdaq charge enterprises celebrating its recent listing i mean, the conversation has flipped completely from tesla to twitter. >> it sure has. >> there's still a lot going on in evs jonas yesterday talking about the capex required to move vehicles to electric i mean, all in, talking $20 trillion over the next 20 years. >> right i think watch rivian, of course
ford has riverian stake. ford needs all the money it can to make electric to meet the demand taiwan semi, $44 billion commitment to capex. interesting, yesterday, we had downgrades which made no sense to me. i just want to talk about something about sentiment for a second usually, you don't find sentiment to be as bad as it is right now. but the american association of inve investors, the sentiment, you have to go back to september of 1994 to see this low of bullishness. now, that was when the dow was 3755 that was the beginning of when people started spending on the internet didn't get crazy until '99 that was probably one of the best buying moments, right here last time you had this sentiment. sentiment bad. now to jpmjpmorgan, are you kidn
me is there a day when putin doesn't threaten nuclear war >> today, putin arguing europe can't afford alternatives to russian gas. they, themselves, need to substitute oil and gas production equipment that's going to be a problem for them. >> the eu is saying ten times the amount the russians have spent on the war through natural gas. this is a war financed by -- >> by the way, we'll send another $800 billion we're going to send an unspecified amount of c4, javelins, 30,000 body armor suits. >> significant, especially after the light of a cruiser i mean, cruiser, they're gigantic battleship cruiser putin lies about everything. there's been endless verification of what ukraine has said. >> isn't the old saying, don't believe it until russia denies it >> i like that. >> yeah. >> but the humvees, sending
soldiers from one area to another. no tanks, planes helicopters can be shot down easily i can say that this is still not the switchblade environment. none of this is going to get them in an east part of ukraine war. this is calvary. that's how small it is don't make too much of it. they're able to reach the ships, and the ships are producing a lot of the missiles to ukraine they're like our cruise missiles i have to tell ya, this is still not commitment if zelenskyy were here, i mean, tanks, planes. t tanks, planes. instead, they get stationary artillery and some new system that's really not new, that is supposed to deflect missiles no patriot none of the new missiles that raytheon makes that are cheap. remember, the new systems that we have, $2,000 missiles
patriot is a fortune patriot is old we're not giving them anything new. nothing state of the art that's disappointing. >> we're talking about the war and genocide and weapons i don't think we're going to get the booth to take their eyes off twitter. >> well, look, twitter has been -- since the day it opened right around there, twitter is all we talk about. i was talking to my ep, and producer regina gilligan, nothing media likes to talk about more than the media. twitter has become the media i know the articles about what musk will do next will be endless. the one thing you don't know what he is going to do is what he'll do next. he doesn't it's fun carl, let's say he were an entertainer. you know, he tried to produce
interesting things every day he was bored being on the board, i think, would be boring. he likes to have fun he has a car company that certainly is -- i mean, you don't see jim farley coming on and saying, you know what, i'm going to make a bid for rivian no, jim farley is making cars. >> we're going to get a mustang, is it an f-150, an announcement yesterday. >> farreley has to spend so much in the battery factories tesla doesn't get enough credit for all the great things instead, we talk about his twitter position. >> yeah. >> by the way, what is he really proposing when he says he wants more of a free speech? >> societal imperative. >> i mean, other than fomrmer president trump, who has been really censored? let's say you're going to kill someone. i mean, this is, like, in my back and forth a serious attempt to kill me, that guy gets blocked. a serious attempt to maim me or
my family, that guy gets blocked. well, i hope so. >> right >> everything else is free i mean, the things i don't even -- i said some words about what the drawings are against me i'll say they're deliverance like that's free speech that's free speech. >> we're back to the question about the business model that is if these free speech is gong to be truly unadulterated, something has to buy a subscription or advertiser has to place an ad on it. >> i wanted to track people who use their names and those who make theirs up jim cramer is a blah, blah, blah, and it pops up every 10 seconds. i don't know where the impediments are to free speech if you can say you can bodily harm people and try to get it down, sometimes it is hard sometimes it is not. what's the limit i mean, justice holmes would
say, that's overboard, it is ridiculous he was the primary supreme court judge about what can you say i don't know what musk -- what else can they do to promote anger? i was with jenson long he was basically saying there's two models there is the model based on conversation there is a model based on engagement engagement, it means you ferment anger. i think twitter is unbelievable committing anger, and it kept the daily active users high. >> 305 we can talk twitter a lot, and we will, but it's the banks and travel, jim. travel making a run here we get an upgrade of delta at barclays target of 60 they're talking about demand offsetting oil emphasizing premium. corporate travel exaccelerating >> why aren't people driving american express right here? almost at 200 in february. it is all the way back to 180. it is a steal, judging by what delta is saying. now, i went out last night and
said i thought disney was a logical place to go. but we don't talk about disney much it takes hs -- the government h to give them a helicopter. i kno don't know what to do. at one point, carl, they'll have to close the gap between the iconic nature of the brand and the terrible nature of the stock price. i'll use the term "terrible. >> they are going to get helped incrementally by hong tong di disneyland, opening april 21 better than the alternative. >> i had dr. taupe on in terms of china last night. he questions whether the shanghai cordons could work. it reminds me of stephen king's "the stand." they kept trying it is the famous lincoln tunnel scene of "the stand. you can't keep that. you can't keep 29 million people under wraps.
>> headlines out of china today they're going to work to ensure ports operate functionally in the future despite the lockdown. >> only thing operating functionally there is tesla. he didn't miss his numbers nike is not going to miss its numbers. i don't know whether apple -- i mean, are people going to order apple? does it come are they moving things like ups, with apositive note out today? >> speaking of apple, th macbook pro delivery time extending now three to five weeks, based on the troubles out of china. >> that's a great machine. i bought that for my wife. you know, i think there's a couple things that really threw me today one of them was katie uperty saying more positive things about ibm than i've seen her say lately about apple this is the one you want in the store. it was interesting. >> place to hide they go to overweight, 150
i didn't realize i ize ibm has negative correlation to upi. >> new way to judge stocks ibm has made some transformations. they've offloaded a business that was very slow it has not been a great performer. i think -- i didn't think it'd start being a good one until the second half. to me, facebook, now meta, and this are second half stories they could be one again ahead of the second half. >> yesterday, you mentioned the jb hunt upgrade was important. a transport, jim, some are finding open. >> you know, one of the things that i wanted andrew to talk about, and maybe he did a little bit, but amazon's fuel tariff was viewed as possible ups has that, fedex, railroads you'd like to see everybody be
able to say, hey, listen, my earnings are not going to be hurt because i'm passing the fuel on. i think that can happen. now, the guys that prodicuce a o of fuel and don't take a lot of money are costco costco has its typical annual dividend boost, which i just love 13% boost. they make a fortune on all sorts, on gasoline now, that's not what they want remember, they're really trying to make it so members do well. but they have the gasoline yesterday, we had a trap proctor dividend boost obviously, the banks are so cons constrained. but you like to see, hey, i'm taking up 10, 15 >> sure. >> can't do it. >> by the way, andy jassy of amazon on with andrew sorkin on "squawk box" today a conversation about unionization, saying employees are better off without unions. not close to accepting crypto as
payment. a lot of discussion about supply chain. take a listen. >> there are certain items that are very difficult to get. you know, we all are -- have a lot more demand for chips than there is supply right now. you know, because we design our own chips and buy chips for the things we do in aws, our devices, even in our vehicles, we get a fair share of those still, it's not fast enough and it's not enough. i think some of the issues happening right now in china, where, you know, as there are variants and as they're being conservative and locking down production, creates some issues in getting products as fast as we need. it's still more expensive and time consuming to get products into the country there's still supply chain challenges. >> you think the surcharges put a crimp on retail growth >> they're that big. they're that big, it might be. we had resale sales, and it was a little confusing. this is a very important company for the u.s. and business.
remember, walmart and this really are the two companies we should be watching i didn't see any -- i didn't hear anything in there that made me feel people don't feel amazon is still an incredible bargain you know what, in two, three weeks, we've had people, like dr. taupe last night, saying, we're almost through the hump. there will still be people scared to go out, but the country is ready if the country is ready, it is not necessarily going to be as pro-amazon, but amazon is doing terrifically jassy, wow, the stuff they were talking about with satellites. >> right. >> it is going to be profitable? i mean, they are as serious as m musk is capricious i mean, jassy is so deadly serious. the only time, you know -- some people say that jassy doesn't like me because i made negative innocent co
comments about the giants. they're in the nfc east. enough said. >> to your point about covid and our response, office occupancy, tenancy, ok ccupancy back to 43 about as high as it's been pfizer to submit for a booster for kids 5 to 11 that's the headline that kind of rings, i don't know, a little tired now, doesn't it? >> i -- i felt the same. i mean, the statistics say you should get the fourth booster. i don't -- other than myself because i'm so to the law of what they're saying, i haven't heard anyone say, yeah, the fourth booster, you have to get it, particularly if you had omi omicron. the omicron protection is four months it's just like a booster but i don't think people -- i think -- i don't want to say it's over. i think it is an epidemic, not a pandemic. >> right watching morgan stanley, up 2% one of the top s&p gainers
two-week high here on ms leslie picker has been listening to the call and has highlights hey, leslie. >> hey, carl strength in equities and fixed income currencies and commodities trading helped to offset macro-induced declines in investment banking we've seen across wall street that helped morgan stanley report far more excess capital than the other big banks the q&a portion of the call kicked off with a question of plans for the higher earnings power, whether through acquisitions or organic investments. the chairman and ceo, goreman, called it a, quote, high-class problem but noted the importance of having a safety net right now. >> we've been protective of keeping a bufferer on on a buf. you never know what we experienced with the markets in the last quarter were extremely volatile you have to anticipate the worst. make sure you're prepared for that we clearly have done that. we've been chipping away at the
excess capital >> he added the firm will continue investing in technology and retirement platforms and also look internationally for potential deals. shares of morgan stanley up about 2.8% right now goldman sachs' analyst call kicked off a short while ago ceo sullivan beginning the call by noting that, quote, the most significant event of the first quarter, no surprise, was the invasion of ukraine. >> there's no question the first quarter was extremely volatile russia invaded ukraine inflation rose across the globe. we saw an accelerating trend to deflowabliza deglobalization. in recent decades, we've grown used to low inflation, interest rates, and the free-flow of goods across international borders. i believe we're entering a period that that won't be the case the consequences for financial markets will be meaningful >> solomon also said they're
seeing an increased risk of stagflation and mixed signals on consumer sentiment fixed income, currencies, commodities more than expected shares up 2%, as well, guys. >> leslie, thank you for that. there is a comment from solomon saying that ukraine conflict reduced q1 revenue by $300 million >> about $500 million yesterday. russia and ukraine from jp jpmorgan to go back to what james gorman said, morgan stanley they don't seem like a capital markets company anymore. they do a lot. i think they have a terrific revenue stream, and the revenue stream is good i'm not saying they shouldn't be lumped in with these when i went to -- when i tried to get a job at morgan stanley, it was all underwrite, capital markets.
they really didn't have a lot of interest in wealth management. they're a wealth management company. they have a very solid wealth management company the wealth management, that doesn't leave because of ukraine. it just doesn't stall. maybe that's why morgan stanley is up more than the others their call was not about ukraine. i'm quite surprised that he led with ukraine he could have said, time and turmoil, they m cocome to us. >> last few quarters, we had the bank stocks come into earning season a little hot. not this time. >> morgan stanley can go up more big position for my travel trust. i'm disappointed with charlie scharf because i don't think he's been able to fix the bank yet. he hasn't been able to fix the bank yet that thing is going from 60 on my birthday, 5-10, to 45 a lot of that is charlie just not getting what i want. he is -- why is he talking about ukraine? i mean, why isn't he talking about the state of the american
consumer and how robust, how good is it his narrative is terrible. he has really got to come on and explain why his bank isn't doing better now that they've put behind the past of what a lot of people felt was chicaner i'm disappointed in charlie scharf. >> interesting the framing of them as some kind of global supermarket like citi is not what you think of when you think of waells. >> no. honestly, i compare them to kroger really, charlie, come on you're better than this. you're better. my travel trust owns it. when i see it, it makes me angry because this should have been their breakout quarter instead, they stumble. we'll watch it banks are a huge piece of the puzzle today quick reminder, you can get in on the investing club with jim sign up any time and find out more at cnbc.com/join the club or use the qr code on your screen
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time for jim and "stop trading." >> nasdaq is trading down when interest rates go higher that is the correlation. qualcomm -- by the way, ninth largest auto company, a big win because they are trying to get into auto, not just sell stock goes down. so just be careful when the rates go up, tech goes down even on good news. >> i did notice tsm at least raised their guide for the year, right? we have that. >> and intel committed full dividend put it out there i question his commitment and he said, listen, jim, i'm totally committed. that was very good pat, i'm trying to rebuild
things. >> tonight >> i've got kelly steckelberg, back on -- with having zoom. and i think zoom stock still sells at a high price, but they have a lot of optionality and i can't wait to speak to her. >> you have been calling for zoom 2.0 for a while. >> full disclosure my stepson worked there, recently resigned. had a great time wanted to be -- stop working on two coasts who can blame him? >> good long weekend see you tonight, "mad money" 6:00 p.m. eastern. when we come back, mk'uss bold move recording twitter we're back in two. an office commune. not a security concern around for 50 miles. unless you count the wolves. and all the llama milk you can drink. you know at cdw, we can design a security solution using hp elite devices with real-time threat intelligence to help protect your data from new threats, anywhere you work. anywhere?
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self sel ♪ good thursday morning. welcome to another hour of "squawk on the street. i'm carl quintanilla with mike santoli live at post nine of the new york stock exchange. energy morgue has the morning off. david faber on assignment but is going to join us momentarily markets here on the beginning of a long holiday weekend dow holding on to gains, s&p slipped into the red a ton of news. elon musk among it. >> 30 minutes into the trading session, three big movers we're
watching united health shares in the green after beating estimates on the top and bottom lines the company raising its outlook for the year the stock up 7 bucks, helping the dow. a handful of big banks on the move following results we will break down those numbers in just a moment but first, it's a story of the morning. elon musk making an offer to buy twitter for $54.20 a share this morning. that's weeks after becoming the company's largest shareholder, going to join the board, not joining the board. you see the stock up 3.5% below, carl, where it did initially open up. obviously, well below the bid of $54.20 just building in, i think, a lot of inherent skepticism, just the unorthodox way that this offer was made, characterized as a best and final offer not the typical way to initiate a process of potentially negotiating the acquisition of a public company. >> we talked about that with
david. but he always throws a little bit in there to make you question his commitment, whether or not it's a gag, really. bernstein out today, it's almost a rite of passage for the internet investor to be hypnotized by the unrealistic -- >> and the stock has traded mostly on the general asset value, the perception it's this massive footprint culturally and socially as opposed to financially, valuation is never really fit with, you know, the comparable companies in terms of, you know, cash flow multiples and things like that it has been regarded as something of a strategic asset in digital media as opposed to something that's just kind of really an odd company to be taking -- for that matter, if you want to earn off it. >> david told us about a board meeting happening about right now, right west coast time, david, right? >> yeah, unclear on that may actually be happening very
soon but certainly this morning let's leave it at that, carl the board of twitter getting together as you would expect they would, of course, to, well, discuss this offer from mr. musk any number of questions if you are on the board i assume you will be asking both your local and financial advisors first of all, what is best and final mean does it have legal bearing probably not not in our country if it was the uk, it would have more weight than it does here. that's why we spend so much time talking about the inclusion of that term, best and final. it doesn't mean anything really. it doesn't necessarily mean -- we heard it from other potential buyers as well and then it goes by the wayside when they raise their bid. in this case, unclear whether mr. musk would do that to mike's point, this is not your typical approach, not the typical unsolicited bid and he said it's best and final and indicated he would perhaps go in a different direction, albeit
potentially selling his shares if the board says no you are not going to say yes right away you probably want to have a discussion around value. you probably want to consider whether there are other strategic buyers out there and whether you might want to consider moving towards a path of what we call an option to see, in fact, if anybody could exceed a $54 price. you will have that discussion. you will have a discussion about whether there are other defenses you should put in. this company already has a staggered board. it didn't have a poison pill maybe you put that in to prevent him from going up here the fact is he made his offer. you also want to have conversations around financing yes, he is the world's wealthiest man you want to understand, carl, what exactly he is going to be doing here it to finance this and whether or not he is going to lever up the company in some fashion or in fact pay for it all with equity. in other words, just all in cash without actually taking op debt.
so any number of questions for the twitter board as they begin this process of trying to understand where musk is coming from and respond to him. >> yeah, you know, david, among the reasons why it does seem at least on the initial response, it's a relatively easy no for now, the stock is trading above 70 much of last year you can say, look, they are a sell side analyst on a $60 price target on this at this price you can sort of say, okay, your move, elon i wonder if there are softer factors too in terms of best interests of country 7,500 employees here this is a guy who has been suspended for a time from twitter for using the product in a certain way. somebody who is subject a consent decree about how he is supposed to be using the target. it makes for a messy back and forth in terms of this being the person potentially to own the whole thing. >> all important points you make, mike and i think ones that the board
is well aware of yes, you would expect that perhaps they think some ways, well, we say know and he goes away and we're over it the question of course what happens to the stock price and how much they care about that. while analysts may have target prices above this current price and/or the bid he madeor there is certainly some that might make a fundamental argument the stock could hit the price at some point, we know it will go down and perhaps down sharply should mr. musk decide to exit his position and, obviously, withdraw his bid as well if he gets that no that's going to be fascinating to me what they decide to do you may be right maybe they say this is nowhere we see the fundamental value or should be the premium for a change of control at this company, see you later then it's up to musk to decide best and final really was that in fact. >> yeah. absolutely fascinating to see maybe, who knows, as soon as monday we will catch you again soon on
this keeping with twitter and the question of what the stock is ultimately going to be worth, joined by two analysts who downgraded the shares this morning. oppenheimer's jason helstein and angelo zeno. welcome, guys. angelo, we'll start with you you downgraded the stock and also said that you thought that this offer would actually be attractive at this price to twitter given where you think it would ultimately be worth, but just as we were talking, given the fact it has traded significantly higher on its own in the past does not filter into this decision as to whether to accept >> no, it does to an extent. i think, you know, the world's, you know, nine, 12 months ago is totally different than the world today. i don't know if you can necessarily put that in your analysis when you look at how much valuation within the industry here just the last six to nine months, i am hard pressed to think that with anyone out there
would value twitter closer to that 12-month high at 70, $75 range. in our view we think a $55, you know, somewhere along the lines of $55 which was our target price is a reasonable offer out there for investors. in fact, [ inaudible ]. >> and, jason, you have tracked a frame -- tried to frame the valuation question of twitter relative to snap as a stand-alone basis. where do you think that takes you? >> we had a $60 price target you would think that twitter should trade at something like a 20 to a 30% discount to snap because snap is simply executing better that would put you at 48 to 54 and 54 is the offer price, right, at 20% discount we think that again in this current environment he really did not need to offer more than that, and i think he, mr. musk, has brought up the idea, you know, for twitter to be the best as a platform, maybe, you know,
it shouldn't be dependent on advertising. and if you are talking about ultimately a business pivot to maximize the value for a company that has struggled to gain share of digital advertising the last four years, two out of the last four they have gained share and two out of the last four they haven't, we think that he doesn't in this environment, he does not have to offer more than that. >> jason, i mean, operationally have you gained out -- has he given you enough clues as to what he would do to the business model that might theoretically shrink that spread between twitter and snap >> look, again, i think i talked about this on the show last week i think we need to understand why users aren't growing faster. is it because the product changes didn't work or that the product changes brought on new users offset by users who abandoned the platform because they didn't like the rules around content so i think that, you know, the first thing he would do, he would widen the content rules
and not be so arbitrary about what content is allowed or not allowed on twitter i think over time it's logical -- like if you come up with community tools, where the community could vote on what is appropriate or not appropriate, but again not the easiest to do. but something that has been discussed. ultimately, i think you just have to address, like, let twitter be the open platform that it's supposed to be, not edited, and ultimately you figure out, you know, what advertisers want to be connected with that platform and then otherwise how does it need to be supported with a modern subscription. >> angelo, assuming that the company is going to continue as a public company, we have a new ceo in here, what do you think the initial measures are and should be for trying to maximize value better is it about subscription tier? is it some other approach to digital advertising?
if it's all about let's lift the cone tent moderation rules, do advertisers really -- are they craving interaction with a more kind of free for all type of platform is that really a solution financially? >> listen, i think at the end of the day hear, as far as twitter is concerned, if this remains a publicly traded company, i think you do whatever you can to monetize this platform the best you can. i still believe kind of, you know, maximizing it via an added base -- you know, advertising revenue is the way to go here. i think that the subscription offering i think is an interesting one. i think it could compliment it with kind of what they've thrown out there. but clearly this is an underperforming asset for years now. there is something that's got to be done here, which is kind of why we have been on the side of elon musk taking his shot at this and doing what he can with it because with what you see
from the primary management team and likely what you will get out of this management team, i think it will be a lot of status quo. >> finally, jason, if we are on the hunt for some kind of white knight, how challenged is that process given the fact that twitter is a third rail, almost in ways that no other company is >> i mean, i think we all know back, i think it was 2017, disney basically had an offer, right? i think they decided not to do it and focus on streaming and disney+ and then at the time i think salesforce.com was considering an offer but there was kind of internal pushback. so, look, you know, it would make -- you know, a media company would understand this. however, we go back to, you know, content, editorial versus not editorial. again, you had paypal was interested in pinterest last
year so, look, you know, if the board had an open process, would you have multiple companies take a look at in i think so just given the size as, a very digestible asset. however, you have a u.s. and european government, regulatory system who probably would not look kindly on some of the big tech giants buying this platform so, look, i think this works to mr. musk's favor right now we'll see what happens. >> yeah. and 50 billion, i mean, is that not that many companies that would want to necessarily take that bite given the earnings power of twitter at this point j jason and angelo, thanks very much. goldman, morgan morgan stan reporting results. a breakdown of all the numbers >> it's been a busy morning. wells fargo's earnings call kicked off moments ago the stock the laggard among the
large banks thanks to a miss on the top line higher interest rates taking a bite out of mortgages and relative metric for wells fargo compared to other large banks. home lending down 33% due to a slump in mortgage originations shares of wells fargo currently trading about 6.3% lower goldman sachs's call underway now with the ceo kicking off a conversation with his views on the risks in the macro environment. >> well, u.s. unemployment levels are low, wages are increasing, and inflation is the highest in decades we're seeing new stress on supply chains, commodity prices and u.s. households facing high gas prices and food and housing. we are seeing an increase risk in inflation and mixed signals on consumer confidence >> both goldman sachs and morgan stanley trading higher due to the resiliency which helped
of offset equity underwriting shares up about 1.8% for morgan stanley and 0.7% for fwoeld goldman. i spoke with morgan stanley's cfo who said the pipeline, quote, remains healthy and if the macro environment improves they could see the deals materialize later in the year. citi beat be estimates the ceo is quoted as saying how the geopolitical and macro environment has become more volatile, although she is pleased with the performance in services which were a bright spot for the firm, up about 15% year over year however, like the wall street peers, investment bank being wa drag they were big underwriters in spacs in the first quarter of twin towers but said that the area remains a, quote, heat area of investment for us in a separate release citi trending down the russia
exposure to $7.8 billion down from 9.8 billion that citi disclosed last month in an updated 10k. the ceo saying they took credit reserves of $1.9 billion during the quarter with roughly a bill of that for direct exposure to russia, 900 million for macro related concerns guys. >> a lot going on, taking a back seat to twitter. thanks. as we go to break, a look at the roadmap the rest of the hour we are breaking down the twitter news from all angles we will look how tech investors are playing the deal. >> plus, musk has been a wild card for regulators. could today's move mean more regulatory oversight ahead former s.e.c. chairman harvey pitt with us. >> and jeff seinfeld explores the management implications at stake for twitter as we've got a big leg up in yields with that, s&p's n dowown 25 points c snack food maker? and you had to wrestle a massively complex supply chain to satisfy cravings from tokyo to toledo?
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take a look at shares of twitter. hanging into a gain of 2 to 3%, but off the premarket highs. with that though we have to keep ourine the ten-year, a two-way today. the nasdaqs wn ido a full percent. we're back in a moment r. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire hey businesses!
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>> a lot of our discussion today has been the unique nature of twitter's product and it's elements of free speech, so to speak. does that make the regulatory process, if there is a deal to be had, more fraught >> well, i think the regulatory process is the deal in the way which musk goes about making his offers there is nothing about elon musk that is conventional, and this is clearly another example of that he has already violated certain requirements in his acquisition of the shares. he didn't disclose it timely and on the right form, and that in itself is a problem for people who sold their shares to him without knowing exactly what his true intentions were and now i think with respect to a bid for this company, the fact
is that there will be investors who are very concerned about whether or not the deal is real, whether it will go through, and the like and so at this point there is a lot of work to be done before one can make any kind of conclusive statement that this is a real transaction. >> well, and harvey, this offer was made in a letter to the board as well as, you know, filing by musk in a 13d. the board clearly says they are going to consider it obviously, evaluate whether it has merit. do those things that you mentioned, the fact that perhaps there were lapses in how he initially filed his ownership t stake and the rest, does that play into the company's response and their legal, you know, kind of grounds for how they may reply to musk? they could say, look, we don't
think you are on the up and up, have not gone through the proper channels, or do we say $54.20 a share might represent value? >> i think from the board's perspective, they have no choice but to say they'll carefully consider the offer the fact of the matter is here is mr. musk saying he thinks the current board and management of the company are terrible and need to be replaced. and they are in in effect the ones who are going to be assessing whether this is a good bid or not so there will be a number of things they'll look at one will be the value. and i think it's almost assured that they will say that he has not offered enough for this company. second, i think there will be issues with respect to how he acquired his shares and whether
he has violated the law. third, there will be issues about whether he can possibly manage twitter when he's already involved with tesla, spacex, and his other companies. so i believe that there will be a number of issues and the board will ultimately conclude that this bid is not in the best interest of its shareholders now, one of the problems with this bid is he said if it's not accepted, they will have to reconsider his position in twitter, which is a threat to the marketplace that if the offer doesn't go through or if it's not dealt with appropriately, that he, in turn, will dump shares on the market >> right which is why some people wonder whether or not the letter itself
and the filing are an attempt to elevate prices so he could exit a position, a process which some say he might be doing. will that be made clear in time? >> yes i think that would be a very serious issue. it's something the board will want to consider but my guess is that there is no way the board will take the position that this offer is in the best interest of its shareholders >> on that last point, just from a price standpoint, it's true that the stock was trading above 54 much of last year a number of people, large owners, for whom the cost basis is lower, why do you think this price would not be seen as sufficient >> i didn't say that the price isn't sufficient i said that i thought that the
board would conclude that it's not sufficient they will argue that there are unrealized values. in addition, they argue that mr. musk wants to eliminate advertising, which is their main source of revenue, and that with advertising they have a profit engine far larger than what he is currently offering. i'm not stating that they would be right in sayingthat, but i am stating that that's what they'll wind up concluding >> interesting well, we are, obviously, going to be looking for details of that decision. harvey, it's a complicated issue today. appreciate the guidance. great to see you as always harvey pitt. >> good to see you. we are watching travel names continuing to head higher this morning and all week the u.s. global jets etf, up 5% the last week, around 9% this
week core holding delta kicking off gains across the sector yesterday after positive results. along with united, southwest and they are up almost 7% or more over the last week that said, all three stocks are double digits off their highs for the year and the jets etf almost 20% off the high. "squawk on "squawk on the street" is back in two ♪ ♪ wow, we're crunching tons of polygons here! what's going on? where's regina? hi, i'm ladonna. i invest in invesco qqq, a fund that gives me access to the nasdaq-100 innovations, like real time cgi. okay... yeah... oh. don't worry i got it! become an agent of innovation with invesco qqq you can't buy love.
so start saving by switching to the mobile service designed for small business: comcast business mobile. flexible data plans mean you can get unlimited data or pay by the gig. all on the most reliable 5g network. with no line activation fees or term contracts... saving you up to $500 a year. and it's only available to comcast business internet customers. so boost your bottom line by switching today. comcast business. powering possibilities.™ here is your cnbc news jub date at this hour. ukraine says it used a missile strike to sink the flagship of russia's fleet in the black sea. russia says a fire on the ship-forced the crew to evacuate and that the ship is now being towed into port with the missile launchers intact. kremlin leaders are warning
of severe consequences if sweden and finland join nato. they include deploying nuclear weapons and hypersonic missiles in the russian enclave of cal callinan grad. from texas it kentucky, 8 # thousand homes and businesses are still without power after severe storms. cleanup has begun in texas where about two dozen people were injured by three confirmed tornados in arkansas a woman was killed when a tree fell on her home. and pfizer and biontech are seeking emergency authorization for their covid booster shots for children aged 5 to 11. the companies say a trial showed a third shot of the vaccine pro provides significant protection against the omicron variant in healthy children back to you. let's get back to twitter. julia joins us now with the latest interesting to hear harvey pitt talk about how he thought the board would see this price >> yes
we'll see what the board decides. that board is meeting today as our david faber reported to discuss elon musk's offer to buy the company for $54.20 a share in cash. musk saying this is his, quote, best and final offer now, we don't have any word on how he plans to finance this transaction. twitter responding saying in a statement, quote, the board of directors will carefully review the proposal to determine the course of action that it believes is in the best interest of the company and all twitter stockholders the big question for musk is what is his plan for twitter is it to make the platform a free speech utility without ads? he has criticized ads in the past ads are the vast majority of twitter's revenue. how much is musk interested in twitter as a sustainable business, and what his interests are will impact what financial partner he excuse. the question for twitter's board, does it shop the company to other potential buyers such
as salesforce which was interested in the past or a poison pill to help defend against musk now, analysts are starting to weigh in with some skepticism and also some concern about the stock if this deal does not happen oppenheimer downgrading twitter to perform fromout perform noting this isn't the first time there has been an offer to acquire twitter. cfra downgrading to hold from buy warning if musk's offer is rejected musk could walk away and the shares would move lower. bernstein noting that the stock was trading above $70 in early 2021 and musk's intentions are not entirely commercial, so the board may look for a white knight or at least shop the bid. and wedbush saying they don't think a deal will get done at this level, predicting twitter's board will not view this offer or musk leading a change in the company as in shareholders' best interest one thing is for sure, carl, mike this must be a massive
distraction not just for management but also for all the employees at the company guys >> absolutely, julia wide range of potential outcomes and the stock of course has traded as high as 77, as low as 32 the last year thank you very much. let's move on to the question of how it might be financed h how does musk plan to play $43 billion price tag for twitter? robert frank joins us now with some options of course, robert he is 9% it's a mere 40 billion or so he'd have to come up with now? yeah, he has the wealth but not the money. he could write a $40 billion check and still be $37 billion richer than jeff bezos his current net worth right now at around $260 billion 180 billion of that comes from tesla shares the other 80 from spacex but none of that is liquid so he would need some outside financing here if he sold tesla shares to fund
it he would be dumping, let's say, if he funded all of it with tesla shares, he would be dumping about 40 million shares on the market or about 4% of the company's total outstanding shares tesla shares already under pressure there you see today on those fears as well, maybe he is going to be distracted by this that would reduce his ownership from his current 17% to under 13%. he always said he would never sell tesla shares unless he had to last year he sold $16 billion worth of shares to pay taxes on his compensation plan, and even after those sales he actually ended up with a larger stake in the company because of those options. now, he could borrow against the shares or maybe sell off a portion of spacex. both of those options would be very expensive more likely he gets financing from private equity venture capital, some other outside investors and funds a smaller portion maybe three to four billion himself. remember, he still has about 2
to 3 billion in cash from those stock sales last year, and of course that s.e.c. filing this morning citing, quote, the completion of necessary financing. so he is saying financing is necessary as part of this deal guys >> yeah, a lot of jokes this morning about funding not yet secured. we'll see. robert, thank you. let's stick with musk and twitter. yale school management's jeff sonnenfeld, talk about what this may mean jeff, broadly, what do you make of this latest episode regarding musk and twitter >> carl, it is just a midweek drama we needed to have something perhaps a little bit more cheerful than the dreariness of the horrors of the war in ukraine with russia this is one volatile player. i don't know we have seen an entrepreneur that's quite this flamboyant main creators are. fraud once said that society is changed by tis contents. these people who flash around a
lot often accomplish a lochlt he has beaten his cynics. any of the short sellers who stayed with the short sell, i think regretted that position. then again, what is he up to we have seen how the tide submarine was a fiasco and his pedo man insults, $422 share buyout, which we're past that now. he didn't have that financing lined up as you have been joking all morning. 1 million taxis, fleet of taxis from two years ago, where are they you know, the insurance company that he promised that we were going to have, the -- so many of the chitty chitty bang bang car that was supposed to fly and float and everything else. those things don't is happen we don't know what is for show, what is for splash a former s.e.c. chair moments ago, he was wisely asking whatever happened with that
breadth of management stretch that he has that the work com boring company lived up to its name i don't think we have that tunnel between las vegas and los angeles he promised years ago and other massive projects frankly, we can just see that solarcity hasn't exactly lived up to what the expectations were and yet he has passed expectations on so many other fronts >> exactly. >> is this a time to sell tesla? >> i wonder, the use of best and final. do you think it's an intentional way to cloud this, or is he stepping on his own toes inadvertently? >> it's never best and final of course, that's a jargon that perhaps some lawyer tossed his way as a standard negotiating language that's used in both whether or not it's an m&a transition or union management negotiations it's never the best and final offer. i think he is likely to go a little bit higher. the management, the board will certainly reject -- this a
fantastic board. i am curious to know if the ceo of salesforce would, brett taylor, who is chairman here, would want to stir things up a little bit and see if they can get some counteroffers we don't know, you know. you had some really, i think, provocative issues about the five different constituencies you talked about earlier i might extend it, adding in what the users are expecting out of all of this how would he change the product? of course, other partners. how is he going to pay with that with financial model, scrap advertising. it's hard to know. the skepticism over what he is really up to, as robert frank, so artfully took a look how he could afford to pay for it, but selling 4% of his tesla would crash that stock and violate all that he said so there is a lot up in the air.
he teseems to -- i likes the splash and he is volatile. he could move on quickly i, myself, have bought into this stock and i'm nervous about it i wouldn't hold it long. >> yeah. you know, jeff, you mentioned all the different constituencies look, we've run through why this initial offer formany differen reasons, the amount and other things, and it's not really a start of a negotiation apparently, relatively easy perhaps to decline as a first step but twitter for better and worse maybe over its history, from jack dorsey, has created this sense of mission around itself, this idea it's something larger than a private company, it's an instrument of transparency for the world. right or wrong, can that or should that play into how the board considers the possibility of a new owner here, or is it just about, you know, paying enough of a premium and we don't
necessarily care what comes next >> we have seen over history, whether or not it's hurst or pulitzer, we have seen that entrepreneurs love the platform, the media. jeff bezos rebuilding a fortification of "the washington post" was impressive and what mark is up to, of course, behind tim"time" magazine will be an impressive suptory this could be a serious media platform he has ala rupert murdoch or others. if it's a political platform, it's hard to see as jim cramer was saying, who has been excluded besides president trump in the aftermath of the january 6th insurrection is that unless it's something really awful where people are threatening violence and things, it's not like we have seen a lot of speech that you name a lot of people who have been -- for political statements so it's hard to know how he wants to actually change that model. in terms of, you know, some new ways of expanding the service itself, you know, he is full of good ideas that could be there.
but very complex jay clayton laid out the five constituencies earlier and i think we have to expand that list and consider what partners would join him and what they would want, won't finance this completely himself >> definitely -- >> they saw a buyout like this when michael dell did a buyout they of course helped michael dell do. they can see how this can be done silver lake, i don't think, would go for a no advertising subscription model or whatever the plan is here to make it a non-profit. >> we are definitely feeling our way in the dark on this particular one, jeffrey. good to see you. jeff sonnenfeld. by the way, as we are talking to jeff, mike, mark cuban tweets, every major tech company, google, facebook is on the phone with their aebt trust lawyers asking if they can buy twitter and get it approved. >> absolutely. $50 billion, not the old bidders, the trillion dollars plus companies, make microsoft they've said opportunistically
there is a troubled company out there, we can be the backstop for. the regulatory question is a big one in each of those cases no doubt. we have talked to analysts, management experts and former s.e.c. chairs about twitter. what about a tech investor that's next on this news stay with us of theoretical ma. we all know this equation, right? he'd crunched numbers day and night. that's it. to maximize profitability. morning. i have quarterly numbers that are beautiful. and forecast revenue from every corner of your organization. is that important? or you could use workday. the finance hr and planning system that helps cfos make better decisions faster. for a solve problems like a genius world. workday. for a changing world.
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twitter's board meeting this morning to discuss elon musk's offer. investor mark cuban tweeting, quote, every major tech company, google, facebook, et, al is on the phone with their - >> elevation partners, co-founder roger good morning handicap for us how it plays from here. we discussed how the initial response from the board is not too complicated probably, they are not going to just say yes, we'll take $54.20.
but where does it go from there? >> there is no chance they take $54.20 i mean, the stock is in a meaningful part of the year above $70 a share. so a serious offer, you know, wouldn't be positioned as best and final. so i don't think this offer itself, you know, is going to move anywhere. i suspect the board meeting will last just a few minutes. that said, it doesn't mean that musk wouldn't raise his offer and something real could happen here but as currently framed, i do not think investors need to take this seriously y they need to ask the question of would it be healthy to take twitter private and rethink the business model and i very strongly think that the answer to that is yes. i was a big fan of scott galloway's idea a couple of years ago that twitter, because of the role plays in the news ecosystem, should be a subscription business because the people who want to broadcast on twitter, so this is politicians, the news media,
celebrities, have a direct interest in cleaning up the environment of twitter and getting rid of a lot of the disinformation noise that's out there, and the economics of a subscription model would actually be better than the model that they have today in that scenario. and i think that's worth exploring. but i don't think that's what elon musk is thinking about at all. >> right well, maybe, might be among the things he is thinking about, and perhaps you could argue that, you know, as a private company without having to worry about short-term results you can execute a difficult transition t that way but assuming that, you know, the company is considering either, other potential investors aor bidders or trying to have elon back off and just go it alone, what is the strategy are from here >> well, you know, to be clear, i don't think he is thinking about this he is a free speech absolutist in his mind, the more the m
merrier on twitter there is never been any indication for him he would like to explore a different business model. i think it's far more likely that he's using this announcement as a way to sell the shares he's already bought that would not surprise me at all. he is, loves attention. this is generating a ton of attention. but it doesn't change the simple fact that twitter's business model is not optimal there are alternatives out there. if the company were private, it would have a lot better opportunity to execute a different model. but it starts from having that as the goal. and i don't see any indication of elon musk has that as a goal. i suspect that none of the other internet platforms would choose that goal. they're all going to be very satisfied with the way that twitter pursues the market today. because it's very similar to the model -- it's basically a poor man's version of the model that instagram and facebook and some parts of google use.
>> roger, fred wilson's point is that twitter is too important to be owned by any one individual, in fact, ownership needs to go the opposite direction to make sure that its freedom of speech is decentralized does he have that wrong? >> no, i'm very much aligned with that. but to be clear, in my mind, the problem with twitter is not freedom of speech. it's that democracy requires that the public square be fair to everyone, that it not create incentives for disinformation or incentives for people to beat up on others. and the problem with the surveillance capitalism business model, which is the one used by google and facebook and to an extent by twitter is that it, in fact, is harmful to democracy because it gives disproportionate political weight to the most extreme voices and in twitter's role as really the assignment editor of the news industry, that model is incredibly dangerous so i agree with fred about the
notion that we should have decentralized ownership, but not because i think free speech issues with twitter but rather i think there are free reach issues that there's just too much amplification and just too much harmful content being given priority by algorithms that don't have democracy as a priority >> it's tough to see how that transition, though, takes place from a public company, beholden to shareholder concerns to something that's, i don't know, something cooperatively owned or in some kind of trust with an oversight function i just wonder if being within one of the megalith companies, presumably facebook is off the table, but a microsoft and alphabet, if they were on a raeg laatory basis allowed to own it and not have to rwring every dollar out of it, do you think that would get it part of the way it needs to go >> well, if i think those
companies would prioritize democracy, then maybe that would work the challenge we have here is that each one of those company, even microsoft, has embraced surveillance capitalism. and so, they have been a participant in the information system that is undermining democracy. and again, i'm not sure it's realistic to get the company to be both private and owned by a gazillion people, but i do think the notion that there is a viable economic model for twitter that ispro-democracy rather than anti-democracy, i don't think that's a stretch at all. the challenge is how do you get there? and in my mind, private ownership by people who cared about it would be the best way but the price point for doing that is obviously going to be, you know, tens of billions of dollars. i just don't see how you assemble that money. so in my mind the most likely case here is that, you know, either musk exits his stock position or that he buys a lot
more stock, raises the price and takes this a lot further down the path i certainly hope the anti-trust authorities do not allow another major platform to buy twitter. >> as we're talking, another downgrade largely because of the vulnerability of shares if he does decide to sell, that's at least three downgrades today. >> yeah. >> and while we're talking, roger, reuters says that twitters will hold an all hands employee meeting at 2:00 p.m. pacific to discuss the offer reuters citing a source there. does bring us to the employee feedback certainly a lot of jokes from individuals who work for twitter, on twitter, joking about what's going on at other companies because our own house is kind of tumultuous. how hard would it be, do you think, for him to retain talent if he were to take the company >> you know, i have absolutely no idea. i think it matters enormously what he suggests as the strategy going forward. but seriously, if twitter would like to increase engagement, it
should live stream the all hands meeting. everybody would want to watch that imagine the fireworks? this whole process is in many ways completely ridiculous, but it is also a perfect example of the world we're living in right now where, you know, individual companies have huge control over public square and where individuals are able to distort that public square with their actions. and you know, none of that is healthy for democracy. we're going to have to find a way through that or democracy is not going to be able to survive. >> roger, okay you've set the stakes pretty high we'll see how it goes from here and we'll talk to you soon thanks very much. >> take care get a check on the markets, by the way obviously a lot more going on today regarding bank earnings and retail sales and claims. still down about 20 on the s&p be right back.
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week amid pressure on the crypto space. kate rooney joins us with action on that take >> bitcoin appears to found support around the $40,000 level, most majorcrypto assets are higher as well this morning. but still haven't reclaimed those levels from a couple weeks ago. analysts tell me bitcoin has been trading like an exaggerated version of the nasdaq. the macro narrative things like the fed has been the main driver of prices. overall bitcoin demand has been what analysts call, quote, somewhat lackluster as they put it, recent selling suggests investors are taking profits into whatever market strength they can find right now. more than half of recent transactions have been by those investors taking profits or 58% to be exact. they also point to a lack of new investors flowing in the bitcoin market right now is still driven by what they call those investors who are in it for the long-term and tend to be a bit less price sensitive one thing, guys, it did help
bitcoin break $48,000 a couple weeks ago a project called terra buying up hundreds of millions of bitcoin every other day i spoke to the co-founder of that project he tells me that demand may have helped investor sentiment but can't take credit for bitcoin's rally. not making a dent in the $20 billion in daily bitcoin volume. back to you. >> kate, thank you very much and that will do it for "squawk on the street" this morning. "techcheck" starts right now good thursday morning. welcome to "techcheck" i'm jon fortt with carl quintanilla, deirdre bosa and julia boorstin. elon musk made an offer to buy twitter. $54.20 a share, at a valuation of 43 billion. today we're going to look into is that the right price? what's the right strategy for the business and the right process and who is the right leadership for this company? twitter's board holding an all hands meeting at 5:00 p.m. eastern to