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tv   Tech Check  CNBC  November 3, 2021 11:00am-12:01pm EDT

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shatner was incredible at 90 i couldn't get over the fact that he could tie his shoe by putting his leg up on his knee and hanks looks great, too >> commercial space flight and so-called space tourism is a much bigger part of the conversation in general. and i just say virgin galactic is up 1% that stock hammered over the past couple months >> that will do it for us. "techcheck" starts now. good wednesday morning welcome to "techcheck. i'm carli quintanilla nasdaq looks for the eighth straight day in the green. an argument why tech stocks might be too hot right now speaking of which, look at lyft.
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stock surging post earnings as activision and zillow plunge later on, microsoft enters the metaverse. netflix launches its games >> we will start, though, with the massive melt up in tech stocks the nasdaq looking to continue its longest winning streak since august of last year. still hovering around the fly line at the moment mike santolli with us looking at whether stocks are too hot this is the question of the moment, mike >> it is i would argue we're in a reheating phase, maybe not yet to an overheating phase but it has been quite a month a munt ago tomorrow that we did bottom and the nasdaq 100 up 10%. a lot are moving even faster this is the five-day chart remember the buzz etf. the social sentiment basket of stocks that are really being talked about a lot online. tesla is top of the list and affirm and a lot of the other ev names apple, as well
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essentially a lot of those stocks that basically have a lot of carry on social media are running, as are small cap stocks this is important to note. this is the time of year where there is a grab for the riskier parts of the market and is intended to work well unless you have a disturbance on the macro side i look at other broader sentiment measures and they're kind of getting there in terms of people being all in and not quite fully exposed. not yet really chasing in a huge sprint just yet. but i think it's obviously worth keeping an eye on. by the way, the russell 2000 a very oddenty and biotech a huge piece of it and that has started to rekindle a little bit and amc, avis and crocs the top three holdings in the russell 2000, guys >> not sure that is what we expected great point, mike santolli
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raising rates could throw that out of whack. joining us today nyu business professor, the dean of of valuations professor, welcome back. good to see you again. >> glad to be back >> i'd love to get your take on just october to begin with because the two big dynamices for the month were persistent inflation and, obviously, disappointing q3 growth and yet we had the best october in six years. why? >> i think there are two forces that are keeping the market up, in spite of economic growth being sluggish earnings growth has stayed up. in fact, i think between the middle of last year and the middle of this year we had 14 months in a row and earnings spent up every single month. it's almost like analysts are saying, you know what, the economy might be slowing but earnings are coming back the other force, of course, is what kept this market afloat since the middle of last year. interest rates at historic lows and i think both those factors i
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think are potentially at risk but those are the factors that are driving the market overall but accelerating even more with tech stocks. >> yes so, where does that leave us now in the discussion and, obviously, we'll find out more this afternoon but about the rate trajectory going into the middle of next year. the market is famous, as you know, for expecting a slew of rate hikes and then not getting them >> yeah. i think that, you know, for the moment we have another excuse for why inflation is as high as it is with the supply chains i think that that excuse is going to work for another few months and then at that point if inflation still stays high, the question is will you come up with a third excuse or do you finally accept the fact that inflation is here to stay? that i think is going to be the moment of decision for the bond market i mean, let's face it, the fed in this case will actually have to reflect what the bond market does inflation stays high i can't think of a way in which rates can stay at 1.6%
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so, i think that it's convenient that we started the year by saying covid recovery is what is causing inflation. we're ending the year with supply chains being the culprit. when do we run out of excuses? i think inflation is the real and present danger and i think the market has to come to terms with that. >> so, in terms of excuses, though, what do you think are going to be the real factors driving the tech sector in the next six months or year? you mention the supply chain constraints and the chip issues, there is sort of the question of how the supply chain constraints are going to impact the ad supported market what are the issues you're watching beyond inflation and rate changes >> i think ultimately we look at what tech stocks are being priced on. the expectation that people keep spending more and more money, not just in advertising but every aspect of what tech companies sell the question is if consumers are not making more money or inflation is eating away at their incomes, where are we
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going to come up with all this money to keep spending so, i think that there is that, i mean, it doesn't mean that every tech stock is overvalued but collectively that is the, that is the test with tech stocks there isn't enough money around for people to spend to keep all these tech stocks afloat and i think that you're going to see corrections maybe of not the overall market but individual stocks that don't measure up >> so, speaking of valulaationso tech stocks and talk to us about tesla and why do you think it moved so much on the hertz news that did not impact the fundamentals of the company so much >> 100,000 cars. i mean tesla right now is being priced as an automobile company that has sold more than 10 million, 15 million cars that is what people are pricing.
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100,000 cars is not even a drop in the bucket. what i think people are reacting to is i think a shift in the way people think about tesla tesla started ten years ago as a luxury automobile that people in l.a. bought as their second or third car and left in the garage most of the year i think over the last ten years, you've got to give the company credit it's moved into the main stream and when hertz orders 100,000 cars, you really arrived because rental car companies don't buy cars that they don't think are practical. so, the demand is there and hertz, obviously, thinks there are enough stations around for you to charge your car that is what i think people are reacting to. the recognition that tesla is now potentially at least a mass market car that if they can bring the price down, that people across the country can buy it rather than just in the coast. >> not to mention, that's not mentioning tesla but just the mere mention of ev on their call sending that stock shooting. back to sort of the inflation conversation that we were h
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having, you talk about excuses, what are we going to look to next year. there is one, i don't know if you want to call it an excuse or justification to why you could keep interest rates low and that is the cathie wood argument that broader technology trends are deflationary do you give that any merit >> i think that it deflects relative prices. i think cathie's argument cannot work at the overall price level. it might tell you why computers are getting cheaper relative to your food, but they can't explain overall inflation. i think when you think about overall inflation, history has always shown that it's too much money chasing too few goods. you can't get away from the basic description of inflation so, you can have reasons why inflation lags or leads during a particular period, but that can't explain overall inflation. what we spend on everything that we buy, products and services, you know, coming down. so, i think that it's not a full explanation.
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it's a partial explanation >> aswath, when you talk about tech stocks next year when perhaps that punch bowl is taken away a day i mentioned avis and gamestop and amc and sort of the meme mania, excuse me, meme mania return to markets. what do retail investors need to know looking ahead >> i think we're grappling with how social media has changed the way people invest in trade i think amc, gamestop or even symptoms of a larger shift that is occurring in markets and people are not getting their information from cnbc or the "wall street journal." they're getting from the reddit group and whatever other groups they joined in or facebook or whatever social media platform they use and i think it is going to play out. i don't think, i mean, for the moment you've seen the upside of it but basically i think what it does, it makes momentum stronger in both directions
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there is a correction because i feel that the same forces that push prices up relentlessly because of social media would cause the momentum and the downside to be equally and perhaps more proportionately much greater than it used to be. >> which is something, obviously, new issues need to bake into their models as they come to market we have rent the runway, today it's rivian. i'm looking forward to how you're processing or evaluating new issues or perspectuses any differently than in the past >> i think the difference is direct to consumers has always been a business. but what used to be local businesses have now become global businesses. the advantage of technology and breach and social media playing out. right now if i were to make a collective judgment, i think collectively direct to consumer stocks are overpriced because, i mean, where is the money you get
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to spend on all these products and services but as with the dotcom boom 20 years ago, they're going to be winners that come out of this space and if you can find a way to identify those winners, all the more power to you. i look at these companies and i contact who the winners are going to be and the losers are going to be. i am going to steer as far away from the space as i can. if you're a trader, go for it. >> if it's hard for you, professor, might be challenging for us, as well. we look to you for guidance still. good to see you. >> thank you. meantime zillow shares tanking by now the company missed estimates on the top and bottom line by a wide margin announced it is shutting down offers business that buys and flips homes. at least four downgrades today following the news piper cuts the target to 78. shares are already down more than 65% from the highs in february rich barton ceo did talk to closing bell last night said that the company simply could not handle the housing volatility
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>> we missed, we overprofited in the first half of the year and now we're taking a big write down now and did so by a margin that we did not model as even possible so what this is about is not being naive and thinking that this kind of price movement could not happen again could never happen again in the future this is us acting like the long-term shareholders we are and the long-term investors we are in this company and saying it just doesn't work for us. we have a great core business to fall back on >> julie, of course, the irony is if zillow saying it is too risky and volatile to judge the direction of home prices, what does that mean for the rest of us who are trying to do it on our own? >> it also speaks to the fact that moving into this business of buying and flipping houses in the first place was a huge departure from zillow's core competency which is really selling ads to realtors and the
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idea that it will benefit from having a robust real estate market in terms of the advertising business, deidre, but doesn't translate to being able to buy and flip houses or predict which direction home prices are going, which does not reflect well on the company and its decisions. >> what you're saying is zillow is not an aggregator and other companies that and props to jim cramer when zillow announced this business seeing it wasn't its specialty. but those other companies, carl, they have better modeling, more success in it. they also have a much greater risk appetite. one of the things that rich barton said is they're a public company, this isn't their main business and they can't play fast and loose with these kind of losses with the way investors in open pad can. >> open door >> one of the silver linings might be that the company, you know, rather than doubling down
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again at this point did recognize that this was simply not a tentative model for them in the medium term >> yeah, not a tenable model at all. especially if you look at the risks around being able to hire labor to fix up these houses the company certainly cutting its losses there and moving on from that part of its business meanwhile, lyft is up. activision blizzard is down and more of tech'sigst bge movers and opportunities ahead. "techcheck" is back in just two minutes. you welcome 1,200 guests and all their devices. or it could be the day there's a cyberthreat. only comcast business' secure network solutions give you the power of sd-wan and advanced security integrated on our activecore platform so you can control your network from anywhere, anytime. it's network management redefined. every day in business is a big day. we'll keep you ready for what's next.
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let's get a gut check on activision blizzard. that stock getting crushed despite an earnings beat and the chief reason there and the company has also faced significant management turnover. brought in a well respected game developer to run blizzard. we now know she is quitting after just three months on the job. shares of that stock are currently down about 15.5% the stock down nearly 30% year to date. it is the worst performing publisher take two in electronic arts they both report earnings in just a few hours >> certainly ones to watch last night we got lyft watch stocks today surging after adjusted ebitda
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and 73% boost of revenue year over year. driver supply and uber earnings come out with the stock rallying on lyft's results, as well joining me now coin share holder amil the amount of money the ride sharing companies are spending on driver incentives this year with that supply easing a little bit or incentives working, either way you look at it, drivers coming back. what was really important is lyft said they might be able to ease back on incentives in the current quarter. does uber have to come out and say the same thing do you think they'll be able to? >> i think they do have to increase incentives and i think uber will do the same. the fourth quarter is a very interesting different quarter for the ride sharing companies because, number one, been used for a lot of holiday parties and used on the going out and all the things that happen late in the fourth quarter and those.
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they have to do that the few wildcards are what is the weather going to be. and fuel prices, frankly fuel prices matter to drivers a lot, ultimately. and if you have to keep doing what they have been doing for the last two months, then you might see some weird behavior and supply and demand curves >> what kind of weird behavior fuel prices remain high or go higher does that increase the chances that uber and lyft need to provide further incentives and kind of go back on what they said >> they might have to. because if the driver feels like, well, last month or three months ago $20 fare yielded me $12 and now that my costs have gone up by $2 per ride or $1 per ride and you have to adjust accordingly. >> i think it's really interesting, emil, in the quarter lyft had fewer active
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users and riders but prices were higher i'm wondering if you think the same thing will hold true for uber and what you think of this trend overall. is this going to be what ride sharing looks like post-pandemic? >> you know, that's a great question because i actually think that you might, that might be what the new world is that prices are higher and in a lot of cities in the u.s. now, they regulated sort of the minimum wage per hour for drivers and when the company doesn't hit that minimum wage, you have to make sure you're paying the driver up to that like you said with fewer active users, they did a lot more revenue and more ebitda. pretty good metrics to think about. well, maybe this higher price model is going to drive more ebitda and lyft went up 40 million to get to $67 million this last quarter, so that's pretty compelling. the first time, first, you know, big reasonable cash flow that
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lyft has had and i hope you see that uber, as well >> it does sound, emil, like you're seeing uber under pressure for lyft's efficiency and more pressure from doordash on the eat side. >> one of the things to measure that i'm going to look for tomorrow is that uber's whole ride business globally does about three times what lyft's ride business does in one country. so, it's inefficient that's sort of the definition of inefficiency if uber doesn't fix that, then the multiple it will trade at is just kind of be below lyft at some level and at doordash the interim numbers you get from the credit card companies that release the data, it looks like uber is looking market share to doordash in the u.s those are not great tends. but we'll see what happens tomorrow maybe they'll pull a rabbit out of a hat >> emil, today as i look at uber stock price 46.05 about a dollar
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above that ipo price lyft is well below its ipo price. should we expect them to trade around here? what is the value propizaositio for an investor one who bought at the ipo who have seen them do nothing and what is that catalyst to get them going especially if we talk about the new environment where the costs are higher and they especially look like ride sharing looks like taxi companies? >> you know, there's a problem i don't think a lot of investors the dollar return after two and a half years after an ipo. so, i think the catalyst could be that we don't have a covid situation more broadly next year drivers come back and normalize. uber and lyft do better pricing and try to hit a sweet spot where they're not high and not losing money because they're too low and fighting for the last market share if they can do that, the synergy with food delivery even if they're behind in the u.s. on that could be a nice business.
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but it's about time whether the company was established in 2011. ten years later, going to have found the synergies and the sweet spot on pricing and supply and demand >> emil, always great to have your insights. we'll talk to you soon >> good to have you back meantime b of a top internet pick to close out the year is amazon you can find out why on plus microsoft the latest name jumping into the metaverse and power points fresh off a chat with zuckerberg himself how they invest with the man behind the meta etf. stay with us ♪ ♪
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welcome to "techcheck" iroom carl quintanilla the nasdaq eking out some gains and the russell is rallying
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again, up more than 1% and allbirds just opened for trades and the stock opens more than 50% after pricing at 15 which was already above the range of 12 to 15. first, a news update with sue herera hey, sue >> good morning, carl, good morning, everybody here's what's happening at this hour bed, bath & beyond giving after hours gain the stock shot up more than 80% last night after the retailer announced an accelerated stock buy back plan and an online deal with super market chain kroger luxury fashion company capri holdings blowing past earnings estimates. the stock is up 12% on brands michael kors and versauchy capri raised profit guidance for the rest of the year. deere shares are down 5% after union members rejected a second contract offer. workers have been striking the farm and construction equipmentmaker for nearly three weeks now. some rank and file union members are calling for deere to
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increase benefits that have eroded in recent years and a key measure of the u.s. services sector soaring unexpected in october. the ism's nonmanufacturing index hitting its highest level since it was started back in 1997. big growth in real estate and leasing highlighting the shift in spending from goods to services you're up to date, carl. i'll send it back to you >> busy day, sue, thank you. meanwhile, the nasdaq is trying to hold on to its longest win streak in over a year. josh lipton has some stocks driving the action >> let's start akamai enjoying a day in the green and q3 and adjusted ebi tda margin ahead ad still 10% off its january highs and same story with t-mobile and also strong results and investors are buying today that stock still about 20% off its july high and firmly in the red for the year and then there is activision more than 30% off its high game off says morgan stanley
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we were wrong they say about the company's ability to deliver new gains on time despite internal challenges there they downgraded this one to equal weight ea report after the bell today also reporting after the bell qualcomm down year to date and 12% off its january high and talking with matt ramsey, he likes this name. attractively valued matt says and best in breed he argues in wireless technology. back to you all. >> thanks, josh. and turning towards the metaverse. microsoft just unveiling some new tools to immerse workers in the workplace and virtual reality features into teams by next year. powerpoint will be available in the metaverse, as well this is all part of the larger battle for digital dominance to platforms and anticipation that it will lose at least $10 billion a years over the next several years as it invests in this new technology.
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ceo mark zuckerberg told metaverse etf founder that meta's aim is to charge as little as possible in order to grow the overall gdp of the metaverse. matthew ball tech investor and author joins us now. matthew, i'm so glad to have you with us today. you have been writing and talking about the metaverse for a long time now. you have such great perspective on facebook's big announcement what is your take on mark zuckerberg's plan? do you think he's going to be able to build his company meta into the primary or a primary both platform in terms of software and hardware for this new world? >> ell, it's nice to see you i think when we review meta platform strategy here it's important to recognize that they're spending up to $12 billion or $14 billion a year in r& d they have 3 billion active users and a founder in control of one of the most significant companies in the world with
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absolute conviction. very difficult to doubt what can be pulled off with that collection of resources and commitment and at the same time, we saw an enormous evolution in his thinking cnbc reported from a memo in 2018 that they could dominate the metaverse. we saw a very different mark last week. one that talked about interoperability and participating as a co-equal platform in this future. that's a future i can sign up for. that's a future i'm more optimistic of and one in which it's hard to imagine facebook not being relevant >> well, he also, though, zuckerberg also though took a dig at apple and tim cook. he said that he wants their platform for the metaverse to be very different and much more open than what apple has done with the app store and i'm wondering if you could give us a sense of who you think are going to be the big winners here we talked about microsoft and what they're doing and do you
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think we'll see this facebook apple war continue into the virtual world? >> i think to some extent an ongoing conflict with apple is inevitable when you take a look at their perspective, they fundamentally believe that they should own the user relationship and the developer relationship that's a part of epic versus apple. this contest over the app store and many partners investing in the metaverse fundamentally believe it impedes the development of the next generation universe because apple unilaterally defines the profits of developers and the technologies being deployed and who can even participate in this space. they are the single largest draw of potential profits from roblox and minecraft and i think overall we'll see a number of different companies competing with whatever points of leverage they have, hardware, payments infrac infra infrastructure and try to get a leg up on their competitors. >> matthew, you mentioned use cases in the metaverse and
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facebook was a lot about, say, family get togethers and microsoft talked about onboarding new workers we heard from match today about dating gaming is already well understood but i wonder when you think about the classic use case that will help this make sense to the lay person, what's it going to be >> i think the easiest way to think about this is how it's finally going to disrupt one of these categories that has resisted disruption in the internet era, which is education. among the many lessons we learned during the covid-19 pandemic, we're not ready for remote education with the metaverse and related technologies, we have the opportunity to regain a sense of presence and feel and see your teacher, your colleagues and to do something more than just look at your teacher or enter a multiple choice quiz via your mouse or touch pad you can immerse yourself in a real-life, realtime magic school bus. learn about a volcano not with
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baking soda and vinegar but going inside one and see how that would differ. >> i think you just described an episode of "madgic school bus." when you say mark zuckerberg says he wants the platforms to co-exist that is a future you can buy in to. why should the average person or lawmakers for that matter believe zuckerberg and take him at face value given all the information that has come out about facebook and sort of the information that it collects and, also, you know, you had apple and google say they're helping developers but at the end of the day, they take a cut developers, not all of them are happy. >> it's a great point. the answer is users, developers, consumers, voters should be skeptical and hold these companies to account we should only invest in the ecosystems as they approve their commitment to an open metaverse and show that with their policies when it comes to government that's the best example. in the 1980s long after the
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government produced the internet, they established the internet task force. this body was designed with regulating through standards and protocols that put ownership of the internet into the collective to consortiums rather than any one platform i'm excited by the prospect the eu, south korea, japan are looking not just to correct 15 years of mistakes in platform regulation but to take a look at the companies and forcing them into certain obligations and standards. >> matthew, i thought it was interesting that zuckerberg said repeatedly that he thinks it's important to start regulating the metaverse now. considering all the issues that have come to light in terms of manipulation and it could make teens depressed and the political ramifications of these platforms. is it possible to prevent those issues from leaking into the metaverse version of these platforms or is that just the inevitable >> it's impossible to prevent them from being present in the
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metaverse because those are a mixture of societial and inherent technical problems. if more human existence time, labor, leisure, socializing moves into virtual spaces, then the problems that come from all of those when it comes to happiness who profits, how much they profit and what are the attentions of individuals, those are human problems i'm ouptimistic with a better understanding of those problems as they affected the era they can design better systems less driven by algorithms and what the users want and makes them feel good and governments will look and say let's not react and let's predict and govern >> finally, matthew, as i take a look at some of the other names in the meta etf, i see that facebook or meta comes fourth in terms of waiting above facebook is roblox and nvidia your view better bets on the metaverse now that facebook is synonymous with it
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we have to look at these other names, right >> absolutely. we heard this from mark last week technological innovation need to be realized five to as many as ten years away the number of companies that will participate in this transformation and my perspective and the perspective of the council behind the etf is investors don't need to bet on a single company and should not bet on a single company and the steward of each of these companies know that and advocate the same we constructed a basket that reflects the many technologies, networking infrastructure, hardware payments to provide diversified exposure and that, in theory, means should the metaverse be a multitrillion dollar opportunity you need not know exactly and how much. >> matthew, such a fascinating time for this area that you have been focused on for so long. thank you so much for talking to us today and just want to point out that we've been talking about a lot of the stocks in
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that metaverse basket including the game stocks and then also the likes of coinbase and square thanks so much for being with us >> thank you quick programming note as we head to break. i'm doing a cnbc pro talk with investor dan niles always a provocative guest today at 3:30 p.m. eastern head to to find out more plus, putting some numbers on the scale of investment dollars going into climate change the huge cost and opportunities there. stay with us, that's next.
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take a look at the recent move we've seen in discretionary tech stocks. consumer discretionary of 11% in the last month led higher by tesla. 50% in that time and today that stock up another 0.5% or so carl meanwhile, d, the 2021 united nations climate change conference currently under way in glasgow, scotland advancing the next generation of climate change tech and that's where we find our diana olick. >> big names like fifth wall i just spoke to the head of its recently launched climate tech
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fund >> we did not come up with a climate fund as some sort of a fever dream it came about because our corporate partners came to us asking for help to decarbonize their buildings. >> that's because real estate is one of the worst carbon offenders, correct >> it is that's because the real estate industry accounts for 40% of all the greenhouse gas emissions out there. it consums about 40% of the world's power and 40% of the world's raw materials. >> what are you investing in, where is the money going >> the full life cycle of a building because you can't just look at the operating heating and cooling. we're starting up the raw materials going in and think clean concrete, clean steel. how do you create buildings that are better for the environment from day one mogular construction and 3d printing how do you operate your buildings better. >> what is the competition out there to raise money and get it where you want to go >> we think of the size of the
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opportunity just in the real estate industry is going to have to spend somewhere between 18 and $36 trillion to decarbonize itself to put that in perspective over the next 20 years, that is roughly one to two internets worth of spend every year for the next 20 years, right but the total amount of venture capital in this space is probably on the order of about $100 billion we've kind of got $100 billion of venture capital spend chasing one to two trillion dollars of annual market size >> now, investors in the fifth wall fund include invitation homes, equity residential, hudson pacific and icon 3d which just announced a deal to build homes for lennar a lot of stocks to watch there and more to come, julia. >> fantastic coverage out of scotland thanks so much, diana. either is back at all-time highs. "techcheck" will be back in just a moment
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let's get a gut check on t-mobile the company third quarter earnings report beat on earnings
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and subscriber additions those shares are down about 9% this year alongside its peers verizon and at&t tmo price to sales ratio higher than its peers currently 2.3 verizon at 1.9 and at&t stands at 1.2 so on a two-year basis, t-mobile is up nearly 50% and it is leading the ndx today, carl. meantime, alibaba have been cut in half since their highs. is now the time to buy barclay's says so initiating all three today at overweight. plus, he downgraded peloton back in january. goldman eric shaeridan is next with his top picks and what to avoid. stay with us
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pell reports tomorrow. once a pandemic darling. shares have been cut in half from the peak in january that was right about the time when eric sheridan slapped a share on the company welcome back and good to have you again. >> thanks, carl. thanks for having me. >> 171 is a long way back in the rear-view mirror and investors have had to put up with the tread and the investment cycle is the picture any different than it was back then? >> they're coming off a much higher valuation earlier in the year i think there's an element of the price cut around their core product that's acting as a stimulant of demand in the core
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bike product and the trend is in the market and there's marketing dollars going behind all of their products into the holiday period so there are really two stories we're looking for tomorrow night except they can lean in and stimulate demand through pricing mechanisms versus the broader macro element of the world is slowly re-opening and working out at home is not as easy as it was 12 months ago. we don't yet have quite the visibility we want to be either highly convicted, buy rated or sell rated and we currently have a neutral rating and those we see as the two major debates that the company will have to address thursday night with earnings >> right >> i'm thinking back to actually pre-ipo days when it was seen as a tool of the elite and you had to have a lot of money even to get one in your home during the pandemic how much can they lower a pric to make it more accessible even
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in the face of these input costs? >> i do think they've now addressed the byproduct in a way where the pricing is the best product in the market at the lowest price point so we actually do believe management is being shrewd there by taking profits where they generally earned more money than they had expected during the pandemic period because they had to spend no money on marketing and they're basically re-investing those pandemic profits for lack of a better term back into positioning their byproduct to be the best in class at the lowest price which could stimulate demand and could forward -- pull forward additional levels of folks into their ecosystem that maybe at the time of the ipo folks were less willing to underwrite that sort of addressable market i think that dynamic is an interesting one to continue to watch. >> eric, i want to shift gears over to facebook and get your
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perspective here you reiterated your buy rating and it faces headwinds from the apple operating system change and they're spending $10 billion a year to invest in the metaverse which has no revenue or profits for the foreseeable future why are you so optimistic on th stock? >> ink the stock is a reflekdz of a couple of key concerns. you had matthew and i have spoken over the years where the metaverse is going in a lot of different public forums and the metaverse is an interesting call option it's not one that i'm going to ascribe a lot of value to today, but if you take the losses in the metaverse today and put it aside, facebook trades at 11 times operating profit on 2023 x these investments in the metaverse. that makes it one of the cheapest stocks especially measured against any level of growth, let alone mid-teens and 20-plus growth in the advertising business when you look out over the next two to three years.
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unlike other companies in the digital advertising ecosystem, facebook has been worried, concerned, flagging this for investors and investing a lot of money in transitioning away from apple's tracking mechanism for most of the last 12 months if you go back to the earnings call from just a little over a week ago, sheryl samberg said a lot of these issues should be sorted out as we move through q4 and the next half of next year they still have a scale of audience and a scale of first-party data and they still have the breadth and depth of advertisers. we believe 10 billion plus that could allow this advertising business that continue to compound despite apple's privacy changes and there's a whole host of headwindsand noise in the broader political realm, as well and there is call optionality along the metaverse for the long term. >> while we have you i want to get your take and celebrating on
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a airbnb reporting after the bell tonight. what's your thesis there >> just so you know, they report after the bell thursday night, not tonight. i don't want to mislead someone by telling them it's happening tonight. i would say generally our call there is this was a pandemic wehner not to get back to where we started with carl on peloton and we think normalization will happen in the travel industry more broadly number one, a normalization of the way we travel and two, a normalization of the way we work and a normalization of supply. so you have a whole host of supply in the hotels, cruises, casinos that are desperate to get people back to certain level of capacity utilizations and we think this company benefited from a period of very long duration stays at very elevated prices in the summer of 2020 and '21 and that will normalize in lower growth, less profitability as you look out to '22 and '23 and the market is sort of ascribing a low double-digit
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revenue multiple to that dynamic and that seems offsides to us and we find it to be more negative on airbnb from current levels >> fascinating we ran out of time today, but we'd love to get you on amazon in the coming weeks as we get closer to holiday. thanks so much eric sheridan. >> thanks, everyone. tech earnings train continues tonight. take-two, roku, etsy we will be right back.
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one more thing and that's netflix continuing its expanding launching five mobile gaming apps and free for netflix subscribers. two of those games are based on stranger things. also today netflix announcing it's launching its first-ever stranger things pop-up retail stores ahead of the holiday season this as the company continues to expand the footprint of its brands and also move into consumer products and here's what it all comes down to. ads, no, games, stores product,
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yes. so deerdidre, you have to wonder now much these games will boost the overall value of that subscription they've got to be crunching a lot of numbers here. >> roku, fox, etsy, take-two, qualcomm and the fed in a couple of hours let's get to the half. carl, thanks so much welcome to "the halftime report." i'm scott wapner front and center, what happens to stocks in the weeks to come is a reckoning for the techtrade now the biggest risk to your money? we'll debate that with the investment committee joining me for the hour today, brenda vinjello, joe terra nova, jon najarian co -founder of closely watching that, and it's very much wait and see the dow's down 70. s&p is a fractional loser and ten-year note yield 156. all right, joe it's all about today


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