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tv   Power Lunch  CNBC  May 20, 2013 1:00pm-2:01pm EDT

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the skills that i needed to make one of those tech jobs mine. we teach cutting-edge engineering technology, computer information systems, networking and communications management -- the things that our students need to know in the world today. our country needs more college grads to help fill all the open technology jobs. to help meet that need, here at devry university, we're offering $4 million dollars in tech scholarships for qualified new students. learn more at >> boy that whistle was loud. record breaker today. the s&p at an all time high today. the dow, all time high today. russell 2000 just hit an all time high. we're going to take the markets apart for you. who is this young fellow here? fresh face boy. he is the fellow behind tumblr,
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bought by yahoo! for $1.1 billion and he never finished high school. and no more mr. nice guy presuming that he once was. this is steven cohen. he says he is no longer going to cooperate with a federal investigation into him and his company. sue? we got that story covered. >> we start with a new club member in the record high club today. year to date, it's up almost 18%. since the march 2009 bottom, it is up almost 200%. if you bought in near the lows in 2009 you were up a whopping 135%.
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>> that is a picture of david carp. he just sold tumblr for $1.1 million. his share is about 200 million of that. that will be okay. we certainly don't share in the winnings to this. >> we don't get a part of the tumblr fortune.
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>> tell us a little about how we know him. what we need to know about him and how he did what he did without finishing high school. >> david carp was just one of these kids with a great idea. let's have a blogging service that is super easy. you can do super short posts and that is very social this is back in 2007, 2008. i remember buying the kid beers. >> was he 21? >> don't want to get him in trouble. >> he can buy the brewery now. >> he is a very nice guy. he is sort of the opposite of some of the image we have come to see on some other start-ups of tech companies. he is not going to say i'm the ceo on his business card. he actually is fairly respectful
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to his mentors over the years. >> so, marissa meyer, who bought it on behalf of yahoo! says they're going to leave well enough alone. does that mean david carp will stay there running and managing and actively trying to grow the business? >> i do think he will. this has been a labor of love. i don't think he ever dreamed it would sell for $1.1 billion. david has been at this for years really because this is what he wanted to do. i think as long as they leave him alone they will stay there. she used to like to surround herself with young smart kids. >> it is a very rich price for this company based on its current revenues.
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>> they must be betting that technology and add sales can add a lot. >> thank you very much. >> take me out for a beer sometime? i know i'm of age. >> me, too. thanks. more insight now into david carp from someone who knows him and banked on him early on. that is the general partner with venture capital. he joins us now on the phone. congratulations to you for this investment. >> thanks very much for having me on. really exciting day. >> what is it about david carp that made you want to back his company and invest in this company. >> i met david when he was 19 years old. he had a consulting company in new york city called davidville. he was building web applications on the side.
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i have been using it every day since that moment. david struck me as somebody who is very, very compelling. he has this design, you know, instinct and raw talent. self-taught technical expertise. usually we see somebody who is strong technically speaking or strong from a user experience standpoint but david is extremely rare in that he combines both of these and he is able to think about these things and actually make them. >> will he fit in with yahoo!'s culture and with marissa meyer? >> this is something we thought long and hard about before we agreed to sell the company. we supported the acquisition because we believe the answer is yes. we really value marissa's leadership of the company. what they thought about tumblr.
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how they thould it would run. how they value the business and the management team. we spent a lot of time. >> oh, great. thanks a lot. >> ty, back to you. >> for many more now on the deal itself, we have got john fort, our silicon valley correspondent. now that we have got this billion dollar plus deal. first, john, fill us in. >> tyler, how do you value something like tumblr. we can look to acquisitions.
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youtube was serving up 100 million videos a day. today the number is more than 4 billion videos. hard to put a price tag on that. another question is suggesting growth peeked in november. who said numbers are wrong. plus, quantity cast measures mainly brouser traffic.
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>> thank you very much. >> who might be next. a possible acquisition target. >> that's right, tyler. these kinds of acquisitions don't need to be profitable as we saw with tumblr. so here are four social mobile services. twitter with 200 million active users. but with the roughly 10 billion $valuation, twit ser more likely to go public it's valuation was
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about $600 million as of last year. what's app has as many as 200 billion miss sajs a day make it bigger than twitter. and then there is social location based traffic service. it has reportedly drawn interest again for a price tag of about $1 billion. 36 million drivers submitting reports. now we will have more on hot potential acquisition targets. more on the content space coming up on street signs. >> thank you very much. look forward to that very much. a big financial boost it plans to pay 4.5 billion during the
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year. right now ge is trading up a third of a percent. >> mr. dixon took over for departed co--founder on april 1. >> the drug maker being bought by activists in a $5 billion stock deal. activists also higher, hitting a 52 week high today. that company has been trying to fend off take-over advances as well. both up big this year. warner up more than 60%. activists up 50%. nice gains, ty. >> absolutely.
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>> jab wells has been covering the stories today as she has been for the weeks and months. >> shaw answered in a deep voice, guilty, your honor. shaw seen here on the left arriving with his attorney. admits he made $1.3 million. a senior partner the judge was surprised there was no restitution. polluters said it would be nearly impossible to track down the shareholders harm. and the shareholders said all ill gotten gains will be paid to the sec once an agreement in the civil case is reached. >> he only had two forks in the
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road. one fork was to conceal and cover up. >> have you ever had a case where both defendants admitted guilty before being charged? >> this is somewhat unusual. that has been commented on a fair amount. >> are you investigating there was a pattern here? >> i can't comment on anything other than what was in the complaint. >> scott london will be in court next week. one thing we don't know is how did the fbi get wind of this?
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at one point, the account was frozen. >> big news breaking this hour. that's coming up next. and j.p. morgan is facing a crucial test of his leadership as shareholders get ready to meet. watching tomorrow's big vote on the fate of jp morgan's. >> today they are starting to look at which way that vote will go and what is contributing to it. ♪ and even stop itself if it has to. ♪ the technology may be hard to imagine... but why you would want it is not. the 2014 e-class,
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>> right now the douj is up 15 points but a lot of the market indexes have been hitting it up high. for the first time ever, breaking the 1,000 mark. the index is up 17% this year alone. so, you ask who are the three biggest winners in the russel this year? solar city up 335%. sun power up 302% and the last is up 20%. >> the hedge fund titan reportedly being subpoenaed to testify in front of a grand
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jury. >> what is the newest. >> well, the very newest is that sac capital held a phone call around noon today to talk them through the latest headlines which together that steve cohen received a grand jury subpoena just this last week. would have tied up the loose ends that remained in terms of possible indictments of the firm or cohen himself. remember there is going be an end point to all of this. so, they are trying to express
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confidence. although obviously the events of the last few days saying that they were no longer going to cooperate. >> that was a big change. >> i talked to a number of criminal defense numbers that say this makes absolute sense. they have been supplying documents for months and they are getting nowhere. they have a total of 410 million right now. >> that's very interesting. kate, you will be watching it all day for us. and now shareholders voting right now on whether to split the role as chairman and ceo. i guess the results, we will
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know them about 24 hours from now? maybe less? >> shareholders heading down to tampa for tomorrow's meeting. >> shareholders have been getting returns. jp morgan's return was second only to wells far go. it is stock hitting a five-year high outpacing its peers. right now you can see it's up about 56% in the last year. these are all arrows. one representative the bank has
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outperformed its peers. after a controversial 11 day black out. sources say the new york city pension funds are the only sponsor to sign the confiden confidentiality agreement. >> what is your instinct? last year it was 40% voted to split the rolls? >> i think that everyone thought at the beginning of this proposal in february when it first came out that because there was 40% voting in favor, that was before the occ again
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said we don't have trust in management so there are a lot of issues facing the bank. the last was above 40% but less than a majority. >> and it's non-binding. >> but if it gets to a critical mass -- >> the board would be under serious pressure. >> will have to do something about it. >> we will get the results in about a day's time. let's go down to sue. >> thanks. on this record breaking day, jim joins the trader. what are you watching today, jim? >> sue, a couple things have piqued my interest today. among them, priceline, lowe's and net ease. as the father of a couple teenagers, you can bet i have some strong opinions about online gaming. [ shapiro ] at legalzoom, you can take care of virtually
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>> away from government repression and open up their
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society. a group of investors is bidding for a major lucrative airport reconstruction contract is hoping he puts in a good word for them, too. >> success is whether we can compete effectively. and a number of other institutions. and two, having the u.s. government advocating on our behalf provides a level of comfort. and the u.s. chamber of commerce. plenty of other businesses that want to take a crack at mayanmar. a country that is suddenly opening up. >> understandably so.
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thanks a mill. >> mondays are like christmas. we get gifts in the form of today's calls. the next direction is upwards as the market stablization plays out. what do you think? >> this is a tough one for me. i'm okay with the technical picture. plus i don't hate the multiples. at the end of the day it's a couple of things that turn me off. i'm not ready to belief that story yet. i would lay off this one.
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>> there is a disagreement there. city upgrading net ease, increasing a price target there the stock is up nearly 50%. i do like net ease. i put these online gaming stocks in with some of the our addiction names like casinos. i think these things are here to stay. i like this stock long term reluctantly. >> let's move on to oppenheimer. since april the stock is up.
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>> this stock has had a 75% run. a 15% moon shot. this is the time where you're supposed to get out of a name like this. i believe in the housing and recovery story. i think you take advantage of the run up and get out of the spot. >> thank you very much. good to see you. and let's go down and check in with sue. >> in the metals markets, reversing course. in fact we did see gold prices sharply lower than where we are right now. some traders are pointing to a
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credit report if reform does not take place. this could lead to a downgrade of the u.s. potentially. that was one for precious metals to go higher. that had been down about 9% overnight. and the etf action is worth noting. that really led really the futures higher as we saw the gld and the sld turned around first. back to you. >> absolutely. thank you so much. >> hey, sue. the nasdaq dipping into negative territory just in the last ten minutes. all eyes on the tumblr deal.
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take a look at apple shares. blackberry shares. speaking to analysts it seems like chatter around the success of its q10 phone. first solar after one of the beers reported earnings. high short interest in the stock. what we're seeing today is most likely short covering. >> time for headlines. avon topping a former tupper wear executive, up about three
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quarters of a percent. the stock is up 3 and a quarter%. goldman took a $2.5 pl stake in icbc. netting about $7.5 billion from its investment since that point. we will take a quick break and more hearings over the irs scandal this week. plus, you think our taxes in the u.s. are bad? wait until you hear about the 100% tax rate. no joke. we will tell you where it is when power lunch continues. bny mellon combines investment management & investment servicing,
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>> let's get an update on the markets. we have come back a little bit. we are almost back to the unchanged level. >> he is a dove and a voting member.
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he said bond purchases will continue until substantial improvement in the labor market. i don't think they see it yet. take a look at the dow jones. on a typical day the dow industrial moves about 125 points. options exploration. there is a lot of shorts in gold. remember the obama administration approved a big texas export. you can own these stocks in that exchange traded fund.
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will get their earnings report. lowe's was. these stocks have had huge runs. >> bob. thank you so much. one of the things that is competing for investor interest is the bond market. it seems to be going the way of stocks, not bonds. we have the five year note. a loot of people thought we would see the 2% mark.
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>> all right. sue, thank you very much. now to the scandal rocking the irs. more hearings on the hill this week. we are looking at the key figures we will hear from and why their testimony is so critical. >> questions continue to swirl here in washington on the irs political targeting scandal. we will see a new round of hearings in the house. he is the number two official at treasury. we will also hear from low wis learner. she is the figure at the irs at the center of the storm.
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members were very upset by this last week and we can expect the full weight will be directed at louise on wednesday. we got a sense of what that will be on wednesday. >> i think we have seen this play book from the republicans before. we're not going to let that happen. >> and tyler, that is washington 10 o 1 right there. what you do is go out and say we are keeping our eyes on the job, focusing on what the american people want us to do. we are viewed as a di traction and we will not get mired down on it.
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>> what did you learn on friday from them that you didn't know already? >> i think it was reinforced. i said much earlier that the acting commissioner should leave his job. be relieved of his duties. so like weis lous learner. a failure to really inform congress. i think all of these things were reinforced by the hearing. >> what puzzles me is why someone at the central office where the -- the singling out mostly took place. why didn't someone higher up say what the heck is going on here? republicans were complaining that groups that were friendly
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to them were getting singled out for this additional scrutiny. why didn't someone stand up and say hey, let's get to the bottom of this and see what the hell is going on. >> when people higher up were informed i think they failed to take adequate action. i think learner has to be pressed. we need to be sure this is not politicized. i think the danger here is that it will become a political object instead of an object of interrogation i'm determined to help out.
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the chairman and i sent out questions last week. >> all right. thank you very much for being with us as always. we appreciate it. let's go now to breaking news. >> former press secretary and biowarfare consultant urged the government to counter what he thought was a major threat to national security mainly terrorists could easily engineer a form of anthrax. he won a 334 million $federal contract to supply just such a drug askording to the la times
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investigation. the drug was the first product the company was able to sell. and what to do about it. they were unaware of his role. barred from giving advice. have a financial interest. really the fortunes of the rockville, maryland firm. while the company was really struggling to bring a conventional drug to market.
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we have reached out. but what a fascinating story. >> it sure is. >> after spending months on the ground, boeing's dream liner is back in the skies and phil lebeau is on board. >> the dream line ser back in the skies. how important is it for united and boeing that united get off without a hitch? that story coming up on power lunch. mine was earned in djibouti, africa. 2004. vietnam in 1972. [ all ] fort benning, georgia in 1999. [ male announcer ] usaa auto insurance is often handed down from generation to generation.
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because the ultimate expression of power is control. ♪ ♪ the new blackberry z10 with time shift and blackberry balance. built to keep you moving. see it in action at >> in today's yahoo! finance question of the day we asked do you trust the irs? 14% said yes. 8% say i used to.
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>> let's see what is coming up on street signs. >> and a warning for you that you have to listen up for. potentially game changing news. also j.c. penney getting another bullish friend. this time an upgrade to buy.
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>> by the time you see this our flight will be near memphis, tennessee. we had a chance to talk with united and we asked whether or not passengers might be concerned about flying on the dream liner. >> bowing and the faa work together very closely to make this an absolutely safe the
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battery is perfectly safe now. we are very confident. >> we have many retro fitted with the new battery system. >> there are 186 united passengers on the dream liner flight between houston and chicago. i will be back next hour after the dream liner lands in chicago. stay tuned for that. >> we look forward to that. but they are actually up 27%.
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>> yahoo! buying a social media side. but is the move more about the ceo than yahoo!? >> what will happen to the bank and dimon if his rolls are split in two? what does it mean for everybody else? we will explore that in the power run down in a moment.
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>> david is excited. he's going to keep on doing what he's doing. when you knew him, could you see that he had it? >> yes. he loved the product. this was a labor of love from the beginning. >> you know with tax rates like this, who needs the guillotine any more? it is still under review by the court system. that may or may not come back. this is a one-time deal. it remains to be seen whether people will actually pay for this.
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>> remember, first of all, this is only an advisory vote. he could lose the vote. but i do think if he loses the vote, jamie dimon will say you don't appreciate the job i do for you? i don't need the money. i'm out of here. >> and the best thing is it will be over tomorrow. >> one that nearly 600 million power ball jackpot. >> not that you need it. >> three step survival guide.
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number two, cool off. put it in the bank for at least three months and then hire a financial advisor. those three. >> i just want to say i hope david carp was just listening to the advice on what to do when you win the lottery. he earned the money but he faces a gigantic influx of wealth. he is getting paid cash. >> you hope the cooling off period lasts a little more than three months. >> and nervous. bny mellon combines investment management & investment servicing,
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but i'll tell you what impresses me. a talking train. this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ >> before we leave you let's get you up to date. the dow jones is down around 13 points. some worries over charlie evans comments but generally speaking
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those are interpreted as positive. >> we will see the chairman on the hill wednesday. that's the same day that the meeting minutes come out. that will do it for power lunch. >> street signs begins now. >> we're down a bit right now but overall the incredible run has rolled on. stocks at a record high. nasdaq breaking above 3500 earlier as yahoo! makes a deal for a company that makes no money. j.c. penney shares are higher. one analyst will ask if that's a bad call.


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