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tv   Squawk on the Street  CNBC  July 29, 2021 9:00am-11:01am EDT

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good thursday morning, welcome to "squawk on the street." i'm carl quintanilla with jim cr cramer, david faber. we're now about halfway through facebook qualcomm, paypal, comcast, ford all in focus today. of course the robinhood ipo and futures have held onto gains even as q2 gdp is a miss facebook and ford and qualcomm and our parent comcast reporting
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results, renewed corporate covid restrictions also in focus >> plus, we're going to talk about fraud charges, u.s. prosecutors charging nikola founder trevor milton. >> you had a great interchange with him initially >> carl. >> and robinhood set to make its public debut valued at 32 billion after pricing toward the bottom of the range, and that's where we're going to begin, jim. a lot of discussion about going to the bottom because they want this to work perhaps >> exactly but what i want to be sure of is that goldman understands that vlad is trying to do the right thing by people, and i point that out because there are a lot of disparate groups that are in the stock that he's giving to people, and i don't think goldman's all that sensitive one bit to what vlad wants to do i think they're treating it as a traditional ipo. i think vlad is doing anything but traditional. what we don't want is what leslie picker talked about,
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every deal north of $2 billion has broken print. >> i thought that was an interesting stat that leslie shared with us yesterday the big deals have not done well. >> what should you do if you're goldman? you price it so that it works. >> okay. which do you think they did that >> i don't think they care at all. >> but do you think where they priced it was the -- >> i don't think they have any idea i think that they're so busy trying to figure out who is who -- >> they're so busy trying to sell those uber shares, by the way. this morning i was hearing from some guys in europe. >> underneath you it says goldman not done allocating robinhood ipo shares that's what led me to be skeptical. typically by now you'd have a better idea. it's 902. >> usually you'd have me sitting here saying it's ten times oversub skriezed. >> if you knew it was allocated to, but i'm sure there's someone at goldman who says cramer
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doesn't know what he's talking about. the issue is you can't have the print price broken because if you have, say, 30% who are thinly capitalized who bought it, they may not have any fire power to buy more, and you don't want a situation where it breaks the print immediately and people say what the heck did i just pay 38 for so it's an unsophisticated group that goldman is working with vlad to be able to say, listen, not everyone's done an ipo before goldman has the ability to do that, but goldman is not going to tell vlad everybody should win. >> they say 65 what do you see? >> i think that the problem with that whole recommendation is there's a page of horribles. look, here's the things that go wrong. what you don't want is gary gensler to say, you know what? we're not in favor of companies that make money by order flow. i also was surprised at how much of the business is options,
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which, again, means thinly capitalized people going for gold in the 22 million that said, i've been in favor of robinhood from day one i had them on about five years ago. it's about democratization it's about getting new people in it is a great app. i know that they felt like that they did let people down during the gamestop era i don't mean to pick on goldman, but goldman's a very different kind of place. goldman is all sophisticated investors who get it they know exactly the deal you get 1/10 of it and buy it in the after market david, that's not what's happening here. >> no, it's not. in fact, i'm getting texts right now. they're begging us to take robinhood shares >> that's what i'm afraid of >> large allocator of capital. >> that's what i was afraid of >> i said what do they got left? and he said lots. >> don't do that, david. >> why that's reporting but by the way, listen,
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something that adds into the uncertainty is how this is going to perform is of course the very large allocation for robinhood customers. >> that's what worries me. >> does it worry you i also heard you saying you never know does it get lumped in or included as another meme stock do they take out their anger over what occurred >> there can be that kind of braveheart, it's got to be done at the right level, and david, if they're still allocating, you know how you get a deal done you price it so that very big companies say i'll take 10%. >> of course this is how everybody steps up, and they know they're going to get allocations that are going to be cut back dramatically, because they think obviously it's going to go up in its debut. this is less certain we'll see where it settles today. more importantly, what is the basic underpinning for a bullish outlook for the company. what is it about
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>> you said you can't build it on selling order flow. who knows. >> it has to become a more full service broker sfwr has this relationship with this growing cohort that really is the future of investing at saving >> carl, i mean, if you have -- this is like the youtube yesterday where they said, look, older people don't watch tv anymore. younger people watch this and it's a great ad break. if i were working at goldman, i would call immediately and say i want 22 million young people and people say, capital -- markets, in other words that they're not the ethos of what vlad has built is very different, but the ethos could be crushed today if this deal does -- >> do you think this would be happening right now if we hadn't gotten some of the fin ra disclosures over the past 48 hours? >> when you have a whole page in
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recommendations about controversies. i mean, this is not the kind of typical, you know, david you gate deal but have some red flags. this is like outages, fines, finra, meme stock trading restrictions, jim. this is a parade of horribles. >> yeah. >> and that's not what i want in an ipo in a very otherwise positive -- >> no. all right, let me give you a positive people like the guy they hired from amazon, their cfo they think very highly of him. >> well, look, i think -- let's go back. jason mor nick, a former exec company 20 years, came over. >> i'm saying good things about robinhood. >> okay. >> i'm saying that goldman has to understand what robinhood's about. >> i think they do. >> do you? >> yeah. >> why are they doing a 38 why didn't they say the low end of the range is 38 we're going to do a 25, restrict the number of shares and have everybody win. >> maybe robinhood had a problem with that.
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>> we don't know, but i do know this deal must work. this is a must work deal for this company. >> why is that i mean, bumble and didi and coupon -- why? >> you want this -- i'm speaking more philosophically you have 22 million people who want to be involved with stocks. >> oh, so you're saying -- you're saying the wall street sentiment is on the line >> yes, i do fwl retail sentiment. >> i think retail sentiment is on the line precisely because these are people who want very much to make money and don't really understand the process because the process is pretty arcane, and i think when they hear, for instance, david say they're still allocating shares their interpretation is wow, it must really be hot. >> so they may not have a full understanding, you're saying of the process itself, but listen, d did. >> they wake up the next day and they're ready to go again. their sentiment seems to last for a day. >> make it a meme, and the apes
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like robinhood, the connection is the citadel citadel you know is considered by these people to be a hatred of them. >> right >> do you ever talk to them about citadel? >> i haven't i try not to. >> citadel, they think that citadel is about one rich guy taking everything they have. not robinhood. citadel takes from the poof r a gives to the rich. i think this is totally untrue i don't like how much concentration citadel has in the market that's the government's fault. it's not citadel's fault citadel is very well-run they're not evil they're not evil, they're like a company. >> speaking of not evil, can we get to facebook numbers? >> is it stark industries? >> we're going to continue with robinhood i'm told, not a lot to talk about facebook. >> we always like to point out when it's a company that we spotted early, it has been on
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our cnbc disrupter 50 list five times, back in 2017 we added these guys to the disrupter list. >> they showed me the app, and i said we're done. what do you mean i said, well, everything on wall street is done that's it. right there is what a younger person would do. they don't know anything they don't know broker, they don't care, they think most people are bagging them. >> what are you doing? >> i'm looking at -- you know, i'm trying to see what's going on out there. >> but we're on air. >> i know where we are i'm trying to add value. >> like we're not adding value. >> i didn't imply that, i don't, and therefore was trying to. we're going to move on to facebook now >> what is 22 minute >> what is themetaverse. >> i'm reading this interview -- >> metaverse is the most exciting thing -- >> zuckerberg gave to the verge to learn about the metaverse because that came up a lot in the facebook call. >> read unity. >> it seems to be an important potential growth area for the
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company, facebook of course which reported just blowout numbers. these numbers that we've seen from the largest companies in our country in terms of the top line growth are so dramatic -- >> and you know it shouldn't be down you know it shouldn't be down. that's winter just saying things like -- just saying listen, things are going to be terrible after. he always says that. you have to duotgo to the unity conference call, which explains what the metaverse is. which is the idea, you're looking at basically -- you say i like the way that person looks in that shirt. ultimately, it's based on nvidia, what happens is it's conceivable, okay, david, listen to me. it's important. >> i'm reading what zuckerberg had to say about it. >> he didn't tell you nothing. >> no, he did. >> a persistent synchronous environment where we can be together, which i think is probably going to resemble a hybrid between the social platforms we see today and a body where you're embodied in
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it. >> it's a hologram ultimately you could go into a room, let's say you're alone and you're a little lonely, okay and you like classical music you go into the room, and you say to the first person you see, do you think this at you like the -- before you listen to halfner, listen to beethoven's ninth. these people don't exist. >> how about mozart, can you bring him back >> yes. >> or what if you like stra vin ski. >> it's the right of spring. >> i know this is a little scary for people and the typical way is to be able to sell something like what i said with unity where you're looking what people are walking and you're looking at how people look and you're saying, you know what? and then you're matching yourself with it i want -- what size is that and then press, you order. >> you can also re-create the entire workplace, couldn't you this is like the tenth iteration
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of zoom. >> this is the -- look, some people view this as terminator. >> fold into that self-driving mobility, ai, musk has already announced the tesla ai day for august it is, it's minority report. >> it is minority report okay i just want to get this so people know because unity's really involved. when i see a model in the scene walking and turning in my direction, that model is me wearing this shirt and i can invite my family to the same environment and help me decide whether i want that shirt. there you go, metaverse, that's a smaller metaverse, the one that jensen wants. >> nvidia. >> you walk in, you like shakespeare and you really like that king henry iv, you like the speech about we've -- the people
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who stay -- >> i like to brush up on my shakespeare. >> start quoting it now. >> king. >> i'm just saying you can have a discussion about shakespeare with several people, and you know, you do -- the person to the left does the comedies, the person to the right does the histories, in front of you the tragedies and kick it around. >> in terms of the stock prices performance -- we're going to talk a lot about the metaverse for years to come. >> zuckerberg's a genius. >> and autonomous calls. they still aren't here. >> zuckerberg, he's actually quite regular. >> is he really when he's out with that hoverboard with his flag >> no, when you say how you doing? he says, okay, coming up. >> specific to the stock performance, guys, jim, they did provide a two-year growth rate and then they said there would be a slight deceleration analysts seem to be taking that and/or investors perhaps a bit harder than they should or not. >> a bit harder than they should.
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>> or not. >> when winter says, look, it parses winter's always said there's some deceleration. now there's serious deceleration wait a second, that means things are really bad no, he's just -- look, just don't be hype oriented it was a fantastic quarter. >> oh, my god, these numbers across the board >> 57% revenue growth for google 21% from microsoft i've never seen anything like this. >> that's what happens when you make up the content for them. >> yeah. >> so much of it falling into profit i mean, the cash flow numbers. >> they have high performance computing. they do have that. they have to -- >> they're incredible. they're profit machines. >> that alphabet quarter is still -- >> that was the best oh, my god, pin chai. >> yesterday the question was the google print even better than snap's. size aside. >> google's incredible, now you
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have this whole new engine coming of google cloud it's losing money but when that flips, it's going to be -- it's just going to be incredible. i think that -- if i were a politician, a hack politician trying to make hay with my constituents, i would just say, you know what? we got to have a hearing these people are making too much money. we need hearings, right? and vlad, by the way, we were talking this morning, vlad's going to be worth some incredible number. >> andrew sorkin of course was talking about this all morning on "squawk." i think he's still at the nasdaq where we're going to keep our eyes po iised this morning. >> good morning, a couple of pieces of news the first is that they have now officially finished indicating this stock this morning, goldman sachs spent a lot of time this morning trying to finish up. we were asking a lot of questions this morning about
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whether that was unusual, whether it posed a problem leslie picker reporting last night that there were a lot of calls still going out to try to bring in investors at that $38 price, so we will see what happens later today, and i can also now report that we will have robinhood ceo vlad tenev. he been on this program at 10:00 a.m., so many of them which jim and you and david have been posing all morning. we will put them to him and try to get some answers about the future of this company, the ipo, and of course some of these regulatory issues that all of you have been talking about. >> that will be good andrew, what does he know at ten? what worries me frankly, with what he's got is it does feel facebookish. remember when facebook came public and there were just a lot of people who didn't -- it was just chaos it was chaos >> and we'll see whether there's
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chaos today or not he's going to ring the opening bell he's now preparing -- he's now prepared to speak publicly at 10:00 for reasons that were somewhat inexplicable, goldman sachs couldn't finish getting that book together this morning, and they didn't want him speaking publicly before then, so we'll see what he has to say at 10:00 about all of this and then we will see of course where the stock opens this morning. that, by the way, not expected to happen until even later in the day, and we will, of course, watch and wait to see when that actually occurs. >> one of the things, andrew that i really like is there's the sheer number of people who are in on this deal is rather extraordinary. i'm hearing that there are more people involved in buying this stock than almost any other stock in history can you ask him that because the number of investors is just extraordinary.
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>> well, and -- and this is what i think becomes the sort of larger question about the entire offering, which is to say, you know, if you have so many retail investors in here, and i think nobody knows the answer, what does it really mean in terms of are they buying hold has this become a meme stock how do institutions think about it if it does pop, do the institutions sell? do the retails sell? what do diamond hands and paper hands look like in a situation like this? i know there's no short squeeze to be had in this instance it's not going to generate interest in that regard, but how does this actually work? >> you know, do you know, andrew, there are more than 100,000 people who are in on this deal, 100,000 i mean, that's a herd, isn't it? >> which also changes a lot of the governance issues because as you've seen, even with some of the spacs with a lot of retail
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audience in there, retail historically doesn't vote whether it comes to governance issues it just changes the entire dynamic with which you will communicate, and perhaps we will see from vlad how he plans to communicate with the investor class. the investor class is going to look so very different than so many other companies that go public. >> one thing i'm really thrilled about is if goldman didn't want him to speak, and he's speaking at 10:00, maybe he's more in charge we want him to be in charge. we don't want him to be a deer in the headlights. we just don't. we don't we don't want him to be bambi's mom. >> he's going to be with sorkin, so it's going to be tough, we know that. >> because we don't have him >> no, the interview >> we would be tough, too. we would like to have the interview. we don't wear pocket squares jeesh. >> you like that little pocket square there. >> how about us interviewing andrew, isn't that the height of
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what you like, us interviewing another one of our colleagues sh. >> we should promote that? >> coming up, andrew ross sorkin on his interview with vl vlad tenev we can't wait for the next hour. andrew ross sorkin let's take a look at futures here and get to a break. a lot of that those we have not yet covered, including qualcomm. i know jim's fired up about ford we'll talk some comcast. we'll talk the hood ipo. futures pretty steady. we're back in a moment sales are down from last quarter but we are hoping things will pick up by q3. yeah...uh... doug? sorry about that. umm... what...its...um... you alright? [sigh] [ding] never settle with power e*trade. it has powerful, easy-to-use tools to help you find opportunities, 24/7 support when you need answers
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united states, just recorded southern district of new york against trevor milton, it's never good when the u.s. is coming after you, but that is the case of course for the founder of nikola, former ceo who joined us here about a year -- not a year and a half ago, year and three months ago, right before the pandemic hit, march let's call it when nikola announced that spac deal it has since, of course, become a public company on its own right as you see, but it is down this morning on this news. the u.s. attorney is coming after him for what they call misleading statements on creating a fully functioning semitruck knowing that it was inoperable and it goes on from
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there. .2 in the overview of the indictment, deceptive, faltse, misleading claims, addressed nearly all aspects of the business including those false and misleading statements, false and misleading statements that nikola engineered and built a l hydroelectric pickup truck, that it was producinging hydrogen, wn no hydrogen was being produced at all false and misleading statements, nikola developed batteries and on and on in house >> can i just -- a lot of people don't like short sellers, and i understand that. there's a lot of people who are new to the business and they don't understand it. na nathan anderson did say all of this was happening they came after nate very hard it reads like the indictment that hindenberg game, and i salute that particular -- the
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amount of work that nate did on this was extroaordinary, and it looks as though even though nikola said all of that was untrue, it looks like a lot of it was true. >> it's interesting in part because it goes back to what we were talking about to a certain extent with robinhood. amongst those retail investors who ultimately invested were investors who had no prior experience in the stock market and had begun trading during the covid-19 pandemic. to replace or supplement lost income or to occupy their time while on lockdown. that's in the indictment >> vlad tenev has done very little promotion of his deal he's felt it's not what he wants to do. i really salute that they've added a lot of new product. they want to be obviously more than payment for order flow. i was shocked to see how much the business is options, which
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means there are a lot of very, very young people with not a lot of capital, not exactly who you want to -- shareholders today. i got to hand it to him. that's all the app the app is so good, and it's amazing, david, the app is good enough that it probably attracts -- i have young people who i know who just say, jim, you know, theapp revolutionize our business so i don't know. >> payment for order flows is what, 80% of revenue or so >> 80 p% of revenue. >> do you think that gets a bit of a twist post-issue? >> i think if gensler says something, it will be disastrous you have to hope that gensler says, look, just be aware that it's a disclosure issue and that it's not a regulatory issue. just got to be disclosure. my conclusion people in the background, a lot of people like
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wood fire grills we're going to talk about that when we get closer to the opening bell in a moment, but it's all about grills week >> weber is another kind of grill. i like -- i have a weber i don't have a trayger >> i don't have a trayger, no. i don't have a trayger. >> i mean, there's this and then there's vlad, which is maybe in some ways the facebook of the era. >> there's a lot of other stuff too. a lot of companies who reported earnings last night. >> those numbers actually look pretty good. >> if i could hear you, we could have a serious discussion. >> we could talk about comcast a wit. . >> why don't we. we work for comcast. they're back buying back stock >> it's very hard to compete against the grill masters. >> they're saying cramer.
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>> when we were all working from home, we missed that, and now that we're back, we realize we've got to talk over them. >> i'd love to see a show of hands of who's vaccinated. >> that's a very important developing story here. more and more companies requiring vaccines for people to come back to the office, google yesterday and then we had. >> apple stores. >> google mandating vaccine. >> google yesterday. >> disney world masks. >> danny meyer for his restaurants. >> i think it has to do with the -- i'm not a doctor, but the amount of time you have to spend with someone who has delta, two minutes and you got it 15 seconds if they breathe on you. 15 sedconds, and different kind of masks, no longer the usual. they want n95. >> the vaccine rate, the daily pace of people getting their first dose is back to a three-week high, so maybe that's why the market is kind of looking past this. >> you're right.
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i watched the phillies last night, there's no game why? because the nationals, a lot of them used the j&j, david the j&j is not stopping the delta, but people are very asymptomatic they don't know. >> a lot of it is breakthrough but not symptomatic. it's people being tested a lot >> those trayger people are loud >> at the exchange this morning, it is trayger, the grill maker celebrating an ipo today at the nasdaq it is robinhood celebrating its ipo, and as andrew said a moment ago, we will speak to ceo vlad tenev in about 30 minutes. >> vlad never changed haircut wo wise he never felt like he had to conform. he's not a conformist. >> is that helpful for understanding whether or not to buy? >> he's a rebel with a cause
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rebel with a cause >> one name i know you want to get to, jim, is ford they raised the guide for the year you tweeted this morning that they have the best evs. >> i think that one of the things that ford did, they completely switched the model. ford is a loyalty model now. ford has the second best selling ev, the mustang, they're actually making money on it. the conference call, other than adam jonas, no one knew what the hell he was talking about. what he's talking about is orders it's tesla he has orders like you wouldn't believe for his cars and trucks. and it's amazing david, can you hear me over there? come closer because it's a big deal there and i know that you obviously we talked many times about your support of the stock through a great period it's moving up further today you love farly.
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>> everybody keeps saying how much money are you losing on this he doesn't sell if it doesn't make money china, they're not losing any money in china anymore i am so impressed with what farley's doing that i hesitate to say it could have a 2011 run where it went to 18 when they had an earnings surprise it's been all downhill for the last ten years, and he is talking about having the -- car and driver truck of the year, orders for the f-150 electric, they're going to blow people away try getting a bronco try get ago -- try getting a ma f r -- maverick the previous ceo, he was a steelcase. a company that makes cabinets. >> he made cabinets. >> not true. >> it was a quizzical pick this guy, i would not mess with farley he has said to me over and over again we want to bury elon musk. he's going to. he's going to have an
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electric -- bear with me he's going to bury him on the truck. i don't know if he's necessarily going to bury him on the car, but on the truck. >> "washington post" has an article that the white house is working with automakers that evs will make up 40% of cars by 2030 >> the key thing about ford reservations for the f-150 lightning have already climbed 120,000, three quarters of the customers are new to ford. how about that i think that's amazing the bronco, david, 125,000 orders, okay, 70% of these bronco customers are new to ford this is a different ford, which is why i like it so much. >> as for the chip shortage, jim's general thesis is that that supply chain trouble will ease in the coming quarters. farley basically said the same thing last night take a listen. >> remember, they had a japanese chip buyer that made them
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unique. >> the flow of chips now in the third quarter but the situation remains fluid, especially due to the delay in ramp-up of one of our key suppliers that ford is uniquely exposed to in the first half overall, after effectively managing through the first half, we are now spring loaded for growth in the second half and beyond because of those red hot products, pent up demand, and improving chip supply. navigating these chip con constraints has led us to make important permanent changes in our business model at ford. >> that's really interesting as we move to a just in time narrative to just in case. >> i will tell you that the analysts do not have any sort of sense whatsoever, any sort of
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sense whatsoever about what's going on with this company and i'm going to say that vlad tenev and jim farley are both rebels they have a different model. it's very pro the consumer, and tenev, is so pro the consumer i think he's going to have a j gigantic number of people who have never come in and farle's so pro-consumer that i question whether the dealers are ready. there were a couple of people on the call that questioned the dealers, what will the dealers do he's got a priority list i urge people to realize when you read this thing, the analysts have never seen anything like it from ford or anyone, except for adam jonas who's incredibly smart and says great call so far and he talks about how the ev is on fire, and so obviously there are people who genuinely are starting to get who this man is. this man is not -- this is not a
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ford ceo like i have ever seen in my life he's amazing. >> we'll keep our eye on that along with obviously the progress of the robinhood ipo. we'll turn to our leslie picker. >> i've been showing with some sources this morning ever since the company broke syndicate at 9:02 this morning, meaning they had their confirmed orders distributed to investors just trying to get a sense of kind of what that book looked like to give us at least some color as we head into the first day of trading today. as i mentioned, syndicate broke around 9:02. now, we've been talking a lot about this retail allocation aspect of the deal which is unique usually you see a small proportion allocated to retail obviously with robinhood in the business it's in, it did decide to have a range between 20% and 30% of the allocation distributed to users of its platform i'm told that the allocation for retail, i don't have a specific number, but i'm told it's at the
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lower end of that range. so closer to the 20% perhaps than the 35% interestingly, they did send out an email to retail investors once the pricing was decided late last night. i'm told they did see kind of a tick up in interest once investors on the retail side knew the price of $38 per share, they were more interested in buying as opposed to kind of more of an auction system where you place your indications of interest, i would buy shares at this price, this many shares, it sounds like retail investors do feel a bit more comfortable once they actually know what they're buying, which does make sense. from an institutional investor standpoint, i'm trying to get a bit more color on the book here's what i have right now i know there are a number of their current investors that did decide to buy in at the ipo price. mutual funds, hedge funds so pretty much what you'd see in every deal now, the one thing i don't know and i think we'll get a stense o
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this is that breakdown of retail versus institutional does that say something about st institutional may be wanting more of the stock or retail wanting less of the stock. i think that remains to be seen. we will have a better sense of what that demand looks like when shares begin trading, which should take place about three and a half hours from now roughly speaking >> leslie, it was right around 9:02 when i was quoting some people on the institutional front who were saying goldman had approached them not that long before that kind of begging them to take stock. >> yeah. >> i don't know that there was a great deal of institutional demand you can always find it goldman's great at doing that. i'm sure they got it done. it does not sound as though it was easy. >> it's interesting. it depends on who you spoke with i spoke with one person who said, oh, we have people asking for more stock if it's there, and then i've spoken with several other people on the buy side that say that they were approached with more stock, and
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of course this ipo allocation process, ipo pricing, it's so much about psychology so those types of signals are not something that institutional investors feel totally comfortable with usually if it's considered a hot deal or, you know, one of these kind of founder led growth deals, they're the ones that tend to be clamoring for mor stock, and you have a concentrated book of investors that are considered high quality, which are ones that have long standing relationships with the banks they tend to hold, they have kind of this trust on pricing and things like that it seems like this is definitely a different kind of deal it will be interesting to see how things turn out when the stock begins trading that's ultimately the nice thing about ipos you do have a sense of whether it worked or didn't work based on what the stock does today >> all right, leslie, thanks we're going to watch it with your help obviously. leslie helping us at least put one more wrinkle on the progress of this ipo this morning
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what haven't we got to, guys paypal and qualcomm, paypal 1.15, a $0.03 beat the guide was lower than we thought, jim. >> i thought that first of all this is not an unusual thing for dan schulman, the unbelievably good ceo of paypal second, he had been saying over and over again this would be the toughest quarter in terms of the separation with ebay i want to look away from that and just say there's been remarkable growth here venmo's incredible, i think the number of merchants that have been added is really amazing i thought it was a fantastic conference call with the exception of what they had to say about ebay, which is obviously -- he said it's going to be tough. i frankly think that my chat, what i really like about it is the number of merchants who have signed up for this thing, the number of consumers. the buy now pay later is crushing it. 400 million active accounts. venmo up 58% they're now making money on that 32 million merchants this stock's a buy you just have to overlook what they had to say about ebay and
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recognize growth a pace. it's fantastic, and they're ready to do anything you want crypto dan is not -- dan does not talk up his own stock he never has he tells you all the things that can go wrong, and you buy and you should buy it. >> $335 billion market value >> i mean, we got to remember it's one of the larger companies out there. >> so is mastercard, that was a great quarter. >> visa. american express is not one of the largest companies. >> he did a great job. >> uncyou think so >> mastercard is about open borders. we hope that delta doesn't ruin that as the borders open, the numbers get better and better and better as we return to normalcy when i listen to the cdc, i question, well, i mean, i'm sitting here with a mask, i'm back to the mask days.
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everywhere that's a layer of protection, jim. don't seem to have a problem with it in some parts of the country. it is a layer of protection. >> we talk a lot about ipos. it's been a record year for straight ipos, which leslie is reporting on a lot i did want to get quickly to some spacs we haven't hit it in a while and there's been a lot of news >> the broken deal well, yes, the broken deal was interesting. it was sold by advent to fortress that was last week that certainly has roiled the spac market. in particular the pipe market. i am talking about atip, physical therapy centers they have labor shortages conce conceivably. that thing has been nothing short of a disaster. giving they close the deal in june, how could you close the deal in june and warn in july, but they did it's more than that. did you see today, archer, acic
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flying cars. >> they cut that value, that deal to 1.7 billion to 2.7 billion. >> yeah. >> a dramatic cut. the value of the overall transaction, this was the most led spac, acic getting that done, but getting it donevaluatn this is one where we would sit there and look at the projections for 2026 and on and sort of saying interesting in terms of what they're looking for in terms of the multiple these are actually, of course, taxis, small airplane taxis i guess you'd call it. one may be autonomous. >> when you speak to anyone in the spac business, the first thing they say is understand, we are not this company >> right. >> they all do that. of course you're like a financial company. we are not flying taxis. they would say this, could you please tell david you're not flying taxis >> i love saying the words flying cars. how can you not want to say
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flying cars. i understand what the industry is, and i do say that in jest. >> the dow and s&p are both hitting records -- >> let me just quickly finish. tailwind qomplx, they didn't get enough votes for their deal. they've got to reset that and meet tomorrow. and finally starboard did get their deal approved. so many redemptions came in they went below their minimum cash requirements so they had to waive the minimum cash requirement. they did announce or i should say they did close the deal. >> we're still not hearing anything from gary gensler about this 2026 farce. >> we have seen a number of deals. the one that was renegotiated prior to that, that russian -- remember that company, the satellite company, then they came after them. >> the blue chip >> speaking of chips, amd is over 100, jim, for the first time >> it's about time you go back and forth with lisa su, one of the things that's
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interesting, xilinx was great. they didn't do a conference call, but xilinx is the antidote to those who say in the end intel is going to catch up the xilinx business, internet of things, teleco that's a surprise. i think people are starting to realize that when lisa su talks about these various italian cities, what she's really saying is we are at a much smaller form factor than intel, which everybody wants a smaller form factor, and then when you listen to facebook, you realize how much money they have to spend on projects that are amd chips. so i felt even more encouraged after i listened to facebook last time. >> you can see semis are having some strength today, and a pretty good take zoom is up almost 5%, keybanc goes to overweight, 428. they did a survey, jim of cios and their takeaway was that about 40% of employees will work some remote for the long-term,
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which is up from about say 20 pre-covid. >> it turned out to be that nobody's -- if you look at the numbers as david was saying, you don't see a lot of companies that said we could have done much better if we were able to visit customers. nobody's saying that and the travel and expense budgets are so far down. we will hear bill from service now who is really on the other side of that. >> yes >> he wants people face-to-face. >> right but where are you on return of the business traveler? i still don't see it >> look, i am a guy who thinks delta's really bad it's almost like when i -- >> you mean the variant, not the airline. >> it's kind of like for me when i was at my birthday party and i said, listen, there are going to be millions of people who unfortunately are going to die from this and it's going to be a pandemic, and you laughed. well, i'm telling you that adel daoud -- delta, the pandemic variant. >> not if you're vaccinated. >> there are whole people who
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are saying that when i say it's good to get vaccinated, compare me to stalin >> wow >> yep, that's sort of where we are. got to work with that. >> when we come become, do not miss robinhood's vlad tenev with our andrew ross sorkin coming up in the next hour as we go to break, let's get a look at the bond report. we really got a clearer picture of the discussion of when taper might happen the ten-year 1.266 goldman says they expect a warning in september and a formal announcement in december. we're back in a moment with the ceo of service now ♪ music ♪ ♪ dream, dream when you're feeling blue ♪ ♪ dream, dream that's the thing to do ♪
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♪ music ♪ when you see value in all directions, you add value in all directions. accenture. let there be change. only 6% of us retail businesses have a black owner. that needs to change. so, i did something. i created a black business accelerator at amazon. and now we have a program that's dedicated to making tomorrow a better day for black businesses. ♪ ♪ i am tiffany. and this is just the beginning. ♪ ♪
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what the world needs now...is people. people who see healthcare a little bit differently. where technology helps doctors provide more precise care... leading to faster, better outcomes... and puts improved health in all of our hands. because seeing a healthier world isn't far in the future. we're building it...now. ge building a world that works. we're building it...now. ge(sound of peopled returning to the workplace) (sound of a busy office) (phones ringing, people talking, meeting) the company we've trusted to keep us working remotely, is the same company we'll trust to bring us back together.
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safely. securely. and responsibly. so now, between all apart and all together, there's a bridge. cisco. the bridge to possible. terrific number. a beat in earns and revenues a great forecast if you remember last time, people didn't care for it. i said that's wrong. buy the stock thank heavens, bill mcdermott, the ceo, who is here now, gave you wrong views about that would happen over the years, certainly the next few
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quarters it was a quawake-up call bill, congratulations. >> thank you very much, jim. our team did an outstanding job. we significantly exceeded the guidance across all metrics and that was reflected in the strong full-year guidance raise we kept the promise, jim. >> you sure did. you came on, i remember, you came on and you were very forceful that the people who did in the understand the strength will be proven wrong i love ceos who stand up for their stocks but i have a problem, bill i was shattered. you said this is a do or die moment and it kind of woke me up why is it a do or die moment for people in business >> well, let's think of it this way. the global economy is recovering at the fastest pace in 80 years. and the enterprise digital transformation market is expected to grow three times faster than gdp in 2021.
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so business leaders are now facing do-or-die moments in a forever changed world. business models have changed forever and the pandemic has accelerated the digital imperative if you think of it this way, in 2027, 75% of the companies that are on today's fortune 500 list will not be there unless they make bold changes and digitally transform their companies. that's do or die >> well, i certainly felt that way after he read about the -- your observability solution. and the importance of observability, i don't think anyone else has this this is a very proprietary thing to service now i want people to know what it is >> think of it this way. there is going to be more than 500 million applications developed in enterprises by 2023 and that's equivalent to the total number of apps that were developed in the past 40 years
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so what companies have to do is they have to have platforms that can digitally transform their enterprise the now platform from service now allows you to observe your data, form patterns, understand what that data is doing everywhere from developers that are in operations to executives that are watching shopping carts at the checkout counter in any given retailer so we run the whole business i.t. has to serve the business, employees have to get a great experience, customers have to get a frictionless service, and you have to create new applications that whole value chain is managed in the cloud by service now with enormous precision. jim, i call service now the control tower for digital trns foration work flows with servicenow and how great when you have repetitive things that are really something that makes an employee get down in the dumps
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and you are fixing that. i thought that your analysis of what you have done with airbus and toulouse is worth sharing. >> oh, airbus is just a great story. you know, if you think about this idea of looking at your business and really understanding what's going on in your business, you could scan things in your supply chain and truly automate the way that supply chain is reacting in real time airbus innovated a tracking app with a creator application on the now platform in less than three months they transformed their manufacturing trmg incident response process by 20% improvement. so just think of the shareholder value getting created in that one application. >> it's important. you hear these people how they took out costs one last question. getting our sales professionals and executives in front of executives only going to help.
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sounds like you don't want to sit there on zoom, do you? >> no, i actually don't. but i think it's really important. what we've tried to do with our employees, we want to return people to work safely, jim as you know, with the now platform we vaccinated millions and millions of people globally by transporting, administering, and monitoring vaccines for countries all over the world and we want to return our people safely and we have given them to the beginning of the year. having said that, i have been on the road for weeks meeting with customers all over the united states and the federal government as well as all the commercial sectors just think about companies like servicenow when you see these results that were largely earned over zoom and doing things digitally when we could fully get back and engage with customers. the future is bright, jim. >> no, i agree bill mcdermott, thank you so much, ceo of servicenow, great
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stock, great company, great ceo. good to see you. when we come back, robinhood's ceo vlad tenev we wet fresh record highs on the dow, on the s&p, vix back to 17.5 we're back in that moment. it's a thirteen-hour flight, that's not a weekend trip. fifteen minutes until we board. oh yeah, we gotta take off. moment.wnloae mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style. ♪♪ millions of vulnerable americans struggle to get reliable transportation to their medical appointments. that's why i started medhaul. citi launched the impact fund
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to invest in both women and entrepreneurs of color like me, so i can realize my vision and give everything i've got to my company, and my community. i got you. for the love of people. for the love of community. for the love of progress. citi.
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good thursday morning. welcome it another hour of "squawk on the street. i'm carl quintanilla, with david faber, jim cramer. the ceo of robinhood, vladimir duthiers is going to join us on ipo day. record highs on the dow and s&p this morning first, we are going to get to pending home sales if just a moment one thing we didn't get to wags fwd at 6.5 we were lacking for 8.4. still the guest q2 in several decades but a lot of discussion about whether the inventories dinged us. >> right, i can give you the rap of rich people did you hear the clueless chief said we are going to stay the course when we are going to have giant gdp? i think the answer is, is that jay powell has done a lot of work on the delta variant and he is very fearful it there will b
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shutdowns again in some places so that's why i think he had to do what he did. >> all right maybe one reason why futures didn't move around on the miss. >> yes. >> meantime, online stock trading platform robinhood will make its public debut today. the hotly anticipated ipo is a five-time cnbc disrupter pricing at 38. the company valued $32 billion we await the first trade let's get to the nasdaq. hey, andrew. >> hey there it's great to see you, carl. and it's great to be here with the ceo of robinhood co-founder eight years ago, vlad you co-founded this company. >> eight years, but six years after we launched our product. >> and so -- >> amazing. >> you know, more than anything, this cin company now represents this retail trading movement before we talk about the
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company, what does this moment represent to you >> it's a very special moment for me and my co-founder we came here as immigrants to this country, you know, i came at jfk airport right here in new york and then 30 years later, less than 30 years later we're here and starting from nothing, created this company that serves over 22 million customers. >> lots of questions about this offering and in particular i mentioned the retail investor. what's unique is how much presence of retail investors there is going to be in this stock now. how do you think about that? and do you know how much has been allocated to the retail versus intuitions? >> it's going to be one of the largest retail allocations ever. and i think when you hear the mission of robinhood to it democratize finance for all, it's really about giving access to everyone, what was once reserved for the 1% or the very wealthy. so it makes a lot of sense
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very consistent with how we've always operated. so we're proud to have one of the largest retail allocations. >> do you know the number? i know somewhere between 20% and 35%. we have been hearing it's somewhere this that range. can you -- >> i can't, unfortunately, share the exact allocation details other than to say we're very proud to give our customers access. >> how will it change the way you think that you will run the company and communicate with the investor base? the reason i ask, the retail investor base is a very different type of investor base. we have seen, for example, the retail investor base the last couple of weeks when it came to the lucid spac, for example, they don't vote. it's harder to reach them. you know, amc has had some issues in terms of getting the vote from shareholders on certain issues. >> yeah, i think it's certainly something we're interested in. you probably saw that we did a customer road show last weekend and we are going to try new things we think it's important not just
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for retail investors to participate, but for there to be dialogue between retail investors and the companies that they are invested in so it's definitely something that you will see us engaging with i think the customer road show was one example of new things we can do >> you talked about democratizing investing and that you have very much done, but it's also come with this question about payment for order flow and whether the customer is now the customer, whether the robinhood customer is really not the one that's paying for all of this, but it is the quote/unquote established, right, and it's the citadels of the world, virtues of the world that are paying 75% of the revenues that the company gets what do you say about that and how do you explain it? >> yeah, it doesn't resonate with me. this business model that we've helped pioneer, which is now the standard business model for retail brokerage in the u.s., has allowed so many more people
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to participate and has led to an aggregate lots more money being put into customers' pockets rather than corporate profits. so we've -- we're proud to have passed back more value to customers, and we will continue to keep doing that i think eliminating commissions was really just the start. >> what do you think the risk long term is to the business model of payment for order flow given how much of a -- how big a percentage of your revenue represents >> well, i think we are going to have to keep a dialogue with the public, with the media about what payment for order flow is i think you probably have seen me over the past couple of months engaging more openly in the topic, and the truth is i think it could be better explained, and we could continue to do that and i think we'll continue defending it as something that has led to a much greater diverse set of people participating the markets.
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and i think from a business level you will see robinhood continue to diversify its business lines and its revenue over time. i mean, in particular, just in the past couple of quarters, even within transaction-based revenue you have seen cryptocurrency take a larger share. >> right that's what i was going to ask you, which is that a huge part of the business became dogecoin in the quarter prior whether you believe that's sustainable, what that ultimately means to the business when we have these meme moments? >> mine, my philosophy, the philosophy of robinhood is to make it as easy as possible to participate. on the brokerage side the goal is how do you take first time investors and turn them into long-term investors. you have seen that through fractional shares, drip, recurring investments. we are seeing a lot of really exciting engagement with those we are going to continue making them better and better so, of course, there is going to
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be idiosyncratic moments where something is more culturally relevant, like a particular cryptocurrency or a particular stock, and of course we have to be available for our customers. >> speak to this, because it's the thing that i think feels at odds on the business model, does rely on to some degree volatility, trading, options, crypto on that side, and on the other side i know that the company spending an inordinate amount of time educating investors and pushing the ideas that these are long-term investors. the longer-term inveer is not g to be as profit nl. >> we are optimizing for happy customers and optimizing for the long term. so making first-time investors into long-term investors and giving people more selection and diversifying the product sweep based on what customers tell us, they tell us they want help
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spending, saving money, we want to offer all of those things i think over the long run, if we focus on happy customers and they use our products, we'll have diversified revenue and it will be fundamentally very good for the business. >> what's the chance that robinhood itself becomes a meme stock? have you thought about that? >> that's very self-reverential. no i haven't thought about it much. >> and this goes to the communication issue though i mean, you know, you occasionally see ryan cohen when it comes to, you know, gamestop, he will put out a tweet. i don't know if it's intentional or not i think it probably isn't. he will put a picture of apice cream cone and then folks on reddit are trying to divine meaning into that. this goes to how you communicate and what you say and whether you think that actually, you know, literally a tweet can move the stock. >> yeah. i mean, i think what's interesting with what we've seen in retail investing over the past year is that a lot of these
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companies have been hit hard by the pandemic, right, and you see it started with some of the airlines and then followed with some of the retailers, some movie chains and brick and mortar. >> right. >> and you have the institutions that are basically writing these companies off and then retail investors coming in and keeping them up and supporting them. >> but that does that make sense to you when you look at an amc stock, for example, or any of these others that have moved in this way, do you say this is healthy for the markets? do you say this unhealthy for the markets? >> well, i probably shouldn't comment on my own views on -- >> but i assume you must have views about -- no, but it is a phenomenon and it's a phenomenon impacted by your own users i am curious sort of how you personally think about it. >> i think it's a real thing i mean, customers, there is customers that love these companies. they want them to thrive and you
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are seeing them also get resources that allow them to hire really good management teams in some cases and then build for the future so i think it's very interesting. i don't know if people have understood the ramifications of what high retail participation in the markets means, but fundamentally it's a good thing and we are excited to be a part of it. >> my good friend jim cramer has a question. >> hi, jim. >> hi, vlad. how are you? congratulations on a great day for you. >> thank you good to see you. >> yes same i know that we had you on at the beginning when i was in california always felt you were about democratization. i am concerned when i saw the actual documents, i was an option trader when i was add goldman sachs. there is a possibility of losing money in options do you think many of your
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options traders take delivery of option stock is it an onboard way or do they not want to own common stock >> let me tell you this, jim so robinhood, our top value is safety first so all of the work we have been doing on the options platform is to make sure that it's clear to customers what they are buying and we have made a lot of great work around the education of what options trading is because, you know, it is complicated. it's for more advanced customers. we have been investing a whole lot in education but i think fundamentally there is customers that are very interested in it for a variety of different use cases, and it is a powerful tool that has been reserved for wealthier, more fist indicated investors up until recently and we're proud to drive that accessibility to a broader audience
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>> valentine'lad, it's morgan congratulations. hindsight is 2020, but if you could go back to january, would you have done things differently? >> i would siay there is always things we could have done better, and i'm the first to say that but it's been an amazing six months, and it really, 18 months and much more than that. if you had asked me six years ago, would i have thought in six years we would have over 22 million customers, over 100 billion in assets under custody as of q2, i think what we delivered for customers and the size of the business, i don't think i would have been able to guess that >> you know, vlad, when i look at what the 22 million are about, i want to know whether they trade every day sometimes we see these stocks and they are, like, you know, 20
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million shares outstanding, and they trade 150 million i mean, people are just glued to the app and will they stay glued to the app when we get the unemployment benefits lower, jobs come back just kind of like who your people are, i want them in today and not flipping the stock >> our customers do a variety of things i mean, most people aren't trading every single day they are looking at their watch lists, they are reading the news, they're looking at their portfolios and in some cases making adjustments but we add more and more content that educates customers, that keeps them informed. and we'll continue to do that as well as adding more products that they can use through robinhood. >> vlad, it's david faber. final question from us here at the nysc morgan asked you about the january period what did you take away from that you are a technology company, but you are a financial
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technology company, and when the peak margin calls were coming in with big volume, what did you learn about the financial part of a technology company and all the regulations and all the things that come along with that and how are you going to apply it now >> oh, i think in those short few weeks around end of january/early february we certainly learned a lot. we got a whole lot of work done, strengthening everything across the board, not just the balance sheet, but customer support. we made it a lot easier for customers that want to come back to the service we have a lot of those at the time to actually come back. we have seen a lot of increases in activity through q1 and q 2 it wasn't just january, but april and may. i think it's been a better and better experience for our customers every time. >> were you surprised by that? because, you know, a lot of times when a business has a major challenge, a customer facing business has a challenge,
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the customer walks in your case they didn't walk. they actually kept -- you know, even more came on. how did you think about that >> at the time we were just making sure we were focused on the basics like how can we make sure our service is reliable and robust and stable three all of the load we were seeing, which was unprecedented at the time. how can we make sure that customer support is working and how do we get better every single day and i think it speaks to how much customers love the product fundamentally. they are continuing to refer their friends. 80 plus percent of our new growth is organic and word of mouth. i think there is a lot more we can do to serve people. >> long term, how much of the business do you think is crypto? the reason i did we interviewed senator elizabeth warren yesterday and she talked about crypto in the context of snake oil, in the context of snake oil
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salesmen and she said this is a sector that needs to be regulated. what do you think is going to calm down the pipe when it comes to regulation in terms of crypto and how it might effect you? >> i think we will be a participant. it's clear our customers are interested in this asset class and i think it's a more and more widely accepted asset class. you are seeing institutions taking a bigger role it's global by nature, which i think presents an interesting opportunity for robinhood because it's an accelerant potentially for international expansion into certain markets we will continue constructive dialogue and people are trying to figure out what the regulatory framework is going to be and we welcome that. >> what is the defensive mode around robinhood >> i think there is a lot. i think the brand robinhood really stands for this next generation of consumers and i don't think other incumbent brokers can own the message of
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being for the next generation and democratizing as much as we can. i think that resident onates wie people it's a message that has snowballed, especially in the past ten years of course, it's more than the brand. i think we delivered the goods when we say better democratizing access to finance, it's not just, you know, a slogan for us, but you can see that through all of our products like the stock trading business, crypto, options, our debit card and savings products, and more recently ipo access, which allows customers to participate on ipos. >> given in ipo, what is success a for you? when you talked to the bankers yesterday and trying to set the price, you know, it did start -- or it was at the lower end of the range at $38 do you say to yourself, i want 10% -- if we can get a 10% pop on day one, that's great, 20%, i don't want it go down? tell us the way you thought
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about it. >> the way we like to run the business, it goes back to our top value. safety first we generally like to be conservative and i know that there is a lot of misconceptions around robinhood and how we operate but we like to be conservative and what we want to make sure is that everyone is set up for long-term success. i mean, ultimately, it's great to be here in times square, but it is a moment in time, and, you know, you are going to find that jason, our cfo and i, aren't going to be commenting too much on day-to-day price fluctuations and what we want to see. we want to be a long-term business that adds more and more value to customers, and these short-term fluctuations over the long run just wash out we had ale like to be a heavy company in the words of benjamin brand. >> and how much influence do you think your shareholders should have on the company? i ask because of the control nature of the way you structured
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the governance. >> i think we'd, obviously, like to hear from our shareholders. we are going to respect all of them, retail and institutional, and maintain really healthy dialogue i think that you mentioned the share structure. we think the reason that that's become more important and more prevalent is because to run a short-term business, it's good to avoid short-term distractions, to run a long-term business, it's important to avoid those types of distractions, and wety this positions us well to be a long-term focused company that takes big bets and continues to challenge the status quo. >> finally, when investors today think about your company, should they think about you as a competitor, if you will, when they are thinking about the comps, the comparables, to the coinbases of the world, to certain banks, to a brokerage firm what do you think the fair comp is i don't know if i'm going to -- if i'm the best person to tell investors what our comps are
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what i'm focused on is customers. i think it's a technology company that's very financial -- that's, obviously, in financial services i don't think -- i think it's a unique company there is not a lot of companies with our growth profile and our product set in financial services so it's certainly a different, a unique opportunity and a unique business that we are building. >> five years from now, what does this company look like? >> five years from now we want robinhood to be the most trusted and most culturally relevant money app worldwide. so not just investing. we are already going beyond investing. not just in the u.s., as well. >> we wish you a lot of luck congratulations on a milestone day for you, and we hope to see you again very, very soon. >> thank you, sir. good to be here. >> good to see you in person, no less, after all that time. carl, back to you. >> thank you very much with vladimir duthiers
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robinhood at $38, indicated to open at $41. a lot in there that line we like to be conservative. >> yes, i think vladimir duthiers has changed. tenev has changed. emphasizing safety that's what you have to do talking about education, trying to get people to understand the broader portfolio of what they have as a product. all great. what i was trying -- i just wanted to be sure that given an options-based investor and given the amount of trading that happens, i feared that there would be flippers. i think he -- david, i felt specially that what he said is really -- a lot of options fast going, but a lot of people are embedded in the stock market who weren't before and that would be positive for our country and our business. >> yeah, if you keep him fully engaged over a longer period of time you talked about that so often
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as for the perspective of this stock, we'll see right now it's looking fairly strong i am not sure. i think there are early indications i have seen. >> i think vlad tenev hgetting the deal priced right, that's terrific >> earlier, you said maybe they should have prised it at 25. >> i wanted to do be sure -- i feared flippers. it doesn't appear to have -- >> again, we will see. we will see how it performance they managed to allocate -- >> you make a determination, coinbase was 400 told people not to pay 400 the mean people said cramer paid 399. no the question about the moment, the competitive moment, he didn't say technology, algorithms he said brands is that sticky enough? >> i think that's right. the people who are in the market -- because of robinhood, there is a tremendous number of surveys that show they are loyal
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to robinhood the great point is that even after the so-called fiasco the last week of january/first week of february, more people came n i was looking at the app store and seeing that even more people came in. morgan, these are people who truly believe that it is a revolution and they are a part of it and it's a positive revolution. >> it's very positive. potentially represents what we are seeing happening in real time right now, represents a fundamental shift, right and you can talk about what happened in the meme stocks, crowd sourced activist investing since the beginning of the year as well. to your point, the fact thaw emore people engaged, we can talk about income equality, assets and increase in value over the last decade and what that has a done in the divide to the country, to see more people, that democratization, more people getting investled and benefiting from that process, that's only a good thing for the
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middle class you can make that argument in terms of this specifically, payment for order flow, we talked about it a little bit, he was pressed on, you know, a little bit in this conversation that we all just had what he said about we are going to have to keep up a dialogue with the media about what payment for order flow is and that it could be better explained. but it's not the media that is the risk around payment for order flow it's gensler, right? >> so many good point, and in particular this notion of this whole new middle class, younger people a-- businesses were dying it became a business for dinosaurs. >> you mean financial services >> yes they decided they wanted index funds. but they pick stocks and they care about stocks now, david, don't look askance at me. it's absolutely true you look at amc, gamestop. >> no, i don't. >> they love stocks. and crypto. >> theyand crypto. >> they are inventive. think about it
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this is a crowd sourced attemp to be able to make money and that was lost. i remember when -- he was trying to talk about people showing a pe piece of america boy, did we forget that. warren buffett said that is a mistake. this man is not that. >> i am curious to see what that allocation is to retail investors. he didn't answer that question. >> who is getting it >> it's potentially the lower end of that 25 to 30% range. it will be interesting to see how that plays out and what kind of pop potentially we get in this today and beyond. >> well, meme and beyond. >> and beyond. >> very meta, isn't it >> jim, how about tonight? >> i'm in the meta verse i have one of the largest agriculture companies, glowucos monitor, terrible diabetes epidemic and then i have a guy,
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vlad tenev. >> he is doing the pre and post. >> pregame, postgame. >> yeah, it's earn certainly his day. it's vlad money tonight. >> i am so excited morgan, great to be with you, too. >> having four on the desk like old times, right >> had to fight hard for that. >> i want to hear about the money app five years from now. >> what paypal's gonna do. i hope everybody is not a flipper. i hope they look at options because options, yes, are higher risk. >> see you at 6:00. >> what an exciting day. thank you. >> "mad money" with jim cramer 6:00 p.m. eastern time sticking with the robinhood theme, leslie picker, kay rooney, bob pisani, i think leslie might be able to help us out with some indications. >> that's right. early days it opened 15 minutes ago or so this is the process where they pair orders together to get a sense of what price they should
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open the stock at. right now we are hearing orders around $40 a share but this is on pretty low -- a low amount, 2.6 million shares at this point in time. we won't start seeing activity until that amount pretty much doubles, until you get 10% of the float here that's matched to start getting real indications in the windows that we typically see. now, i have been chatting with investors. i have been chatting with other sources this morning to kind of get a sense of what's going on, what's sentiment like, how this deal is different. we talked about the retail aspect and allocation there. ceo vladim vlad ten i have declining to give a number. we learned that number is closer to 20% another thing worth watching for is the actual infrastructure and pipelining of robinhood. if you allocate 25% of this deal
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to retail investors on the platform, that is still a tremendous amount of stock that's going to be changing hands and a lot of people are really expecting a lot of volume here so keep an eye on, you know, how the technology handles this. this company has a history of out abilities in the past that is an important test for the piping and infrastructure that underlies this company >> leslie, i mean, it's also an important test, i think, for the rethinking and shifting we have been seeing in terms of how companies are coming public and what that looks like so whether it's the retail allocation, whether it's the fact that employees are able to sell a ecertain amount of shares and not be locked up for months on end, all of this is going to be key to this big,er broader conversation we have been having for a couple of years now around the best way to bring these companies public. >> yeah. robinhood has this ipo access platform they are not the first company to use it. what's different is that the companies that have used it
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recently -- and this is in the last few months or so -- figs, duo lingo yesterday. they are only selling 1 or 2% of the offering to retail investors. here you are looking at ten times that amount potentially depending on where they fwind u here so this is -- from that standpoint, never been done before just from the sheer size of it, the size of the ipo, $2.2 billion, even pricing the low end of the range certainly one the biggest ipos we have seen this year, top ten. so all of those things play factor here. should be a really interesting day. >> you said likely we see trading potentially what after lunch? >> i would say after 1:00. >> okay. leslie picker. thank you. kate, not everyone is happy about robinhood's ipo. some retail traders are threatening to short that stock as well. so kate rooney has the latest there. >> that's right. robinhood has been a
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polarizing -- there are fans that have introduced a whole new generation of investors the stock market they are facing push back from people online. they are saying they are going to boycott the ipo robinhood is reserving 20% of hairs for vail investors on the platform like leslie just reported it had originally said up to 35%. a faction of them are take took reddit and twitter urging each other to not buy into robinhood's ipo today. others are pledging to borrow money to short it. a lot of these comments are stemming from grunls around gamestop and trade reg restrictions in january. other reddit traders are saying ignore it, not spend the money to short the stock according to a survey from card fy, robinhood users are pretty mixed whether they would buy shares in this ipo a third said they would buy. 30% said, nope, they are not buying a third say they are still unsure guys, it's unclear if this chatter on social media just a very vocal minority or if it's
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going to translate to real action if this ipo turns out to be another viral event it could be a good thing for growth add robinhood. he with saw similar push back on social media earlier this year in gamestop and that frenzy. the same negative sentiment happening on twitter and reddit and traders using the app logged on more than an hour per week in january on average it was number one in the app store. touring that time the app saw record users growth and that engagement has been a huge lure for venture capital investors who have backed robinhood and did during the gamestop saying a. that has dropped significantly over recent months it is a risk for investors and one they are very focused on robinhood's pandemic-era growth has been tied to these viral events like gamestop and even dogecoin rallies we will see if the ipo ends up being another viral event. back to you. >> kate, i want to get your take on what tenev said about
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customer interest in crypto and also this note out of mastercard today. they had earnings, the cfo said that they have seen a decemberst decent level of deceleration in how people are using at least mastercard products to buy digital currencies like crypto over the last three weeks. >> we have seen a slowdown in retail trading in general. some of the excitement around meme stocks whether it's amc or gamestop so it seems like some of the trading activity slowed down stimulus checks, that has been robinhood's main growth area and vlad tenev mentioned cryptocurrency picking up the slack here there seems to be a bigger focus on cryptocurrencies and moving to where the puck is going, so to speak and finding what customers are interested in trading a that seems to be cryptocurrency that moment others have pointed to things like coinbase. bitcoin has been hanging around 35, $40,000 level.
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that's not good for trading volume and trading and transaction-based revenue wihich is how hoodie makes their money, 80% of revenue mastercard was sort of the other side of -- has been a little less activity. visa though mentioned crypto on the earnings call. paypal yesterday also mentioning crypto so you have a lot of these mainstream card companies it's driving user engagement. they want to be involved and i think, if anything, symbolically are just mentioning cryptocurrency as a potential growth area. >> kate, thank you we want to get to bob pisani now as well who often helps us navigate this period prior to the open of a high-profile ipo bob, what are you looking at here >> i have been covering ipos for 24 years this is one of the toughest to get your head around there is a lot that people really like and a lot that seems to be very cautious. very cautious to me is how dependenter this on trading
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revenues 82 poerz payment for order flow. the options are 38% of the revenues equity's 26% crypto is high they do some securities lending, miscellaneous things, of course, too. they have margin interest on top of that. so it's still very dependent on what's going on with trading revenues so this leaves them very, very exposed to what i call regulatory risk not just for payment for order flow, but gamification you know, gensler promised a report to congress about what happened with the reddit gamestop thing this summer sometime just because they paid a fine, a lot of money, doesn't mean there couldn't be additional regulatory actions coming. i tell you what i like about this company 22 million accounts. that's very, very impressive now, remember, schwab's got 32 million. i would say vanguard north of 30
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fidel a's north of 30. 22 million for a young company is impressive. they don't have much money 81 billion in assets under management blackrock has $9 trillion in assets for blackrock 8 trillion for vanguard. 7 trillion for charles schwab. 81 -- look, we are talking 1%. but those accounts have very little none in them, but have the potential to grow. i think that's a plus for them finally, guys, what i'm disappointed about in ipos in general this career. we have an awful lot of them 260, snort of that, that's not quite a record, but in terms of the dollar amount raised 94 billion, close to an all-time record the old 96 billion set way back many, many, many years ago i think we will have a record. amount i don't like any of the aftermarket action that i'm seeing we are getting first day pops in the ipos here. the ipos are up about 7% but only 50% are above the ipo
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price. why is that? because the after trading, the after market trading after the first day, it's trading down the average ipo is trading down. why is this happening? it's happening because the prices are high. so people are taking profits right after the first day. i think we will see much more cautious pricing environment because people are look at these kinds of numbers, the average cnbc viewer buying in on the first day, the average ipo is underwater and that's going to send, i think, a note of caution to pricing in the second half. keep an eye on that one. but this is one of the most interesting ipos i have seen in a long, long time, guys. >> that's exactly where it's going with you we have traeger that just range. they rang the opening bell this morning. something like this total 18 more companies coming public this week alone. and i just wonder how closely a name like robinhood, which is being seen for a variety of different reasons we have been laying out on the air all
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morning, one of the most closely watched, hotly anticipated ipos of the year. how that sort of sets us up for some of these other big offings especially since as you mentaled big ipos we have had this year are underwater. >> this is happening in an up market we are in a historically high market if everybody wonders what matters, number one how is the stock market doing everything else is really secondary. we are in hot stock market and have been for quite a lomg time other than a couple of days of hiccups. the fact that you are trading underwater after the first couple of days, i think it's a warning sign it teals me they are getting good prices. i am sure the people who have gone public are happy with the prices i am concerned with the average cnbc user who is buying it after the first day and is losing money and that tells me the prices are too high, people are
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taking profits to i think there is going to be let's call it, pricing discipline it means you will get push back when people stry to get higher prices in the second half of the year let's face it, maybe not not good for the company raising money but it is good for the average viewer. >> bob pisani, thank you we will be hearing more from you today. our "etf spotlight." looking at the u.s. aerospace and defense. it's up over 14% this year we've gotten a lot of numbers from aerospace and defense companies. that's why we're showing you this a boost from a couple of those top holdings northrop grumman raised full-year guidance stock up 20% this year, up 2.5% this morning textron, similar story, beelts on the top to and bottom lines while raising the full-year guidance after strong reports from boeing, raytheon, lockheed
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martin general dynamics also reporting yesterday as well. we will continue to keep an eye on the sect weor given the indications around a recovery around commercial aerospace and aviation even if there are question marks on the defense side. >> indeed. meanwhile, check out the shares of our parent comcast. up this morning after an earnings beat. that's an all-time high. actually got to 59.70. a stone's throw from 60. chairman and ceo brian roberts joining us at 11:00 a.m. eastern time the dow and s&p. we are back in a moment.
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customers love these companies. they want them to thrive and you're seeing them also get resources that allow them to
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hire really good management teams in some cases and then build for the future so i think it's very interesting. i don't know if people have understood the ramifications of what high retail participation in the markets means, but i think fundamentally it's a very good thing and we're excited to be a part of it. >> that was robinhood's ceo vlad tenev. for more on robinhood's ipo let's bring in e*trade compliance officer and president amy lynch. that was vlad speaking on the show wide ranging interview ahead of this debut here today. but i wonder what you think specifically about the risks around this company. especially since we got two more regulatory probes disclosed ahead of today's ipo >> thank you for having me on the street today yes, robinhood is a very interesting entity and they go
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public today under the umbrella of several regulatory and litigation cases pending against it still others that were already settled and disclosed recently when i added up the numbers just since 2019, they have paid over 127 million in fines and restitution to regulators regarding the cases that have been brought against them in recent years so there is a lot of risk there, and it's still ongoing they is a very good job, actually, of disclosing all of the risks related to regulation and litigation cases against them in their prospectus there is a whole section on it it's about ten pages long, as a matter of fact and they mention cases even that are still in the works, as you mentioned, and those two that have not yet been settled are one regarding the registration status of the two firm
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principals, mr. tenev and mr. bot, and then the pending investigation regarding employee trading activity when they halted the gme and amc "stop trading" earlier this year so there are cases still out there. they are state-level cases still out there pending. so it's a spdr web of litigation for them >> yeah, i just want to know that this ipo price at 38 right now, it's indicated at 39.75, keep an eye on that this morning. ahead of those first trades which are expected a bit rater today. in terms of that spider web, all the regulatory scrutiny this company is getting, is this more of a reflection of a tech company that is focused on finance and financial markets and services that is essentially been seeing growing pains given that unprecedented situation, or, i guess, level, so-called
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meme trading and everything else that has kind of taken root throughout the pandemic and especially earlier this year, or is it have more to do potentially with the fact that they have been able to engage so many more retail investors and bring them into this market in general? >> it's probably a little bit of both robinhood is a firm that has democratized finance as they like to advertise, and they have actually done a pretty good job of that. you mentioned some numbers earlier with the millions of accounts on this platform. i think it's number three as far as online trading platforms go right now. and they have grown exponentially just in the past five years so that alone will bring attention from the regulators on to the firm for sure >> amy, i wonder, you know, we've got gary gensler on twitter now. it steams like he is coming out -- he has been vocal and
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made appearances burke bt being little more visible, i guess the question is, given that any incremental regulation on robinhood would be so material as you point out, the risk factors, has the commission had enough time to do that and do you think they wish they would have had more time to do it before this company actually came public or not >> well, unfortunately, they can't control when a company goes public. so they -- robinhood made that decision as far as the timing. and i was a bit shocked myself when i saw that they were going to do it as soon as they have after all of this active litigation against them. i thought a maybe they would want things to cool off a little bit before they went public. they have chosen to go ahead and to it now. earlier you were saying how the markets are so hot and that's why the ipo market is so hot and there is always that fear that that will end, that the bubble will burst
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so i suspect they wanted to take advantage of that timing and go public now but chairman gensler definitely would have wanted more time to take a look at the firm if he could have they are lick you said earlier, the commission is conducting studies right now to take a look at what happened earlier this year regarding gamestop and amc, and the meme stock trading, and that's an investigation that is extremely difficult to parse through because it's a very unusual activity it's the first time it's ever happened so from a regulatory perspective, there is the first time they are looking at this kind of activity, which makes it challenging. and it will be time consuming. they have to bring in experts regarding internet usage and getting data from the internet so there is a lot there that they have to look at and it will take a while before that report comes out. >> yeah.
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currently, we are indicating for robinhood at $39.50. that just slipped by a quarter i should say 25 cents. amy, payment for order flows specifically, i mean, given the comments we have heard from the head of the s.e.c., we can talk about it, where robinhood is concerned, given the ipo today, it has broader ramifications throughout the industry. do you expect that we see more guardrails put in place or changes to that business model in general >> i think so. it will be interesting to see the timing of it and, you know, where it falls in the regulatory priorities everything that i'm hearing from the commission is it's pretty high on the list, especially since other countries actually banned the practice all together so the fact that the u.s. allows it makes us a bit of an outlier when it comes to the most advanced countries so i suspect there will be changes made, perhaps restrictions placed upon the
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levels and volume of revenues that can be generated via payment for order flow, and if that were to happen, that could be a significant blow to a firm like robinhood who has 70, 80% of their revenues coming from that exact type of activity. >> all right we will keep an eye on all of it amy lynch, thank you, appreciate it. >> thank you, have a food day. >> markets near session highs. let's get an olympic update with christina. >> hello we've got some news. american lee is the winner of the women's all-around gymnastics final the united states has won gold in the last five olympic games earlier this week lee's teammate simone biles withdrew if the all-around to focus on her mental health. another american seen as a serious contender to win gold is out of the games sam kendricks, the two-time world pole vault champion,
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tested te tested positive tore covid tokyo has 3,900 new confirmed cases and that's today so the united states swimmers, switching gears, caeleb dressel now has two gold medals in tokyo. he won the 100 meter freestyle race, setting a new olympic record with his time of just over 47 seconds. and with a dramatic comeback from behind -- or from behind surge, bobby finke from fifth place to first place, winning gold in the 800 meter freestyle. his first medal in his first olympic games. the united states has a total of 38 medals, putting it in first place ahead of china with 31 russian athletes have won 28 medals i checked for canada, for those watching ten. back to you guys. coming up next on "tech check," the ceos of qualcomm and our parent company comcast in a few moments. thao is up
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on the 2021 rx 350. experience amazing. robinhood remains one of the stories of the day back to leslie picker at the nasdaq keeping an eye on it for us. >> we're keeping an eye on the indications that have been coming in for the last, oh, hour or so. maybe 40 minute oz or so directionally they have been trending downward now. we're looking at 39.25 still early days, though we need to caveat this this is basically pairing different orders that are coming in to figure out what price to
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open the stock at, which we don't expect to happen for at least another hour and a half, two hours, potentially even more than that given the volume that is anticipated here. of course, this ipo is being conducted in a variety of ways that are really unique on the demand side of the equation. you've got a pretty sizable retail allocation, even if it comes in at the lower end of the range they have been projecting, 25 to 30% allocation to retail, as we have been reporting. still, very sizable relative to other ipos we have seen recently and then on the supply side of the equation, you've got this lockup for employees where they're able to sell about 15% of their shares in the ipo so all of this is leading to some uncertainty surrounding how it is going to go today. that's kind of reflective in what you're seeing with these early indications, but, again, this was a 55 million share ipo, as you can see there, so far the pairing has been just upwards of 4 million shares so we do still have a ways to
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go, usually underwriters feel a bit more comfortable when 10% of shares are paired so we're looking at, you know, at least another million shares to go in terms of pairing these orders. so we're keeping a close eye on it we're here at the nasdaq where the stock is listed. we'll be keeping tabs on this one all day. >> a confluence of factors that make this trickier and more complicated. not necessarily unprecedented though i say that because back in 2012 facebook sold about 25% of its ipo to individual investors as well i wonder how past experiences and past examples, sparse though they might be, are factoring into this process this morning >> yes, so you bring up a really interesting historical analogy here with facebook, which, you know, back in 2012 was very well known for an ipo that didn't necessarily go off the way that everyone planned one of the key drivers for muted
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performance on day one, they did close a little bit higher, ticked downward in the six months following that. they did close 25 cents higher on first day of trading. the reason it was so muted on that day is because institutional investors got word that the order book wasn't as strong as they had thought, facebook pushed it a little bit higher on price for the ipo. and so as a default retail got 25% of the allocation. that was in order to fill the book back then this say little different, allocating to retail investors. >> all right, leslie picker, bringing us all the details. thank you. >> thank you. still to come, rinodobho ceo vlad tenant stands to make millions we'll get a closer look at that as we await the first trades stay with us
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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 record high for the s&p with major averages higher. and the parade of earnings continues. "techcheck" has a big show coming up. the ceo of qualcomm and ceo of our parent company comcast, interview with brian roberts, keeping an eye on that. >> at the top of the hour. had a chance to catch up with him briefly as well. strong quarter for our parent company, the stock is right around 60 bucks.
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yep. you can see it it backed off a bit, but strong broadband numbers, wireless growing well and the olympics, things are getting interesting and exciting we won't say who won gymnastics, but that was exciting. >> it has been exciting. >> yes. >> all right, we're also going to keep an eye out for first trades, robinhood. that does it for us here at "squawk on the street. "techcheck" starts now good thursday morning. welcome to "techcheck. i'm deirdre bosa with carl quintanilla, jon fortt and julia boorstin this hour, robinhood goes public we're live at the nasdaq with every angle on that ipo. latest indications there, 39.25,
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