Jim Cramer and David Faber explored the record run for stocks despite this year's slump in Apple shares --including Thursday's 4% drop on news of the Justice Department-led antitrust lawsuit against the iPhone maker.
Earnings also in the spotlight: FedEx shares surge while Nike and Lululemon take a hit on guidance that disappointedWall Street. Also in focus: Day two for Reddit after shares jumped 48% in its public debut,
the latest news impacting Tesla shares, the Trump SPAC merger vote, Cramer's deep dive into Boeing's stock slide.
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Let's give you a look at futures as we get ready to begin trading for the final day of trading of the week. Do we have that? Maybe not. All right well if we don't we'll get to our roadmap. It does start with that record run for stocks major indices seeing a four-day win streak the down nearing 40,000 for the first time and the S&P it has been holding above 5,200. FedEx shares also surging this morning despite what was a revenue miss for the eighth straight quarter the company saying it's seeing results from cost-cutting efforts and are there some warning signs in retail Nike and Lulu lemon shares both moving lower Nike is seeing slower growth in China Lulu perhaps less optimistic about its business right here in North America. Let's start with the markets and that record rally achieved despite that pullback by the way interestingly we saw yesterday and Apple shares and really throughout the course of this year so far Apple shares have not participated as we pointed out many times Jim in the overall rally. Look people regardless of no growth company 2% max people are looking at the phone itself and then insult to injury Jonathan Caner on this morning really basically basically calling him not a monopolist but a company that is trying very hard to pressure other companies that are in their universe. I think that there'll be a bit of a hangover there are some analysts who actually took it very seriously. It is not the one known for AI David the other companies that are in the Magnificent Seven are our AI companies although Tesla cutting production in China spring that went down so I would stay I would of course stay long it I don't think there was anything in justice that was anything more than a mosaic of odd oddities that they chose to focus on with some pull quotes that I think you would say Jim I don't want you to bring that up because they're not substance to them up. I think you would say to me Jim could when you if you have something substantive why don't we use it in the so-called a block and then you would say look let's just hold that back maybe to a mad dash. That's how I feel about the Justice Department's case. Maybe mad dash maybe not. No forget it too bad you don't get to decide we're gonna you started on Apple so we'll just stay there for now. I would point out by the way on the AI let's let's not forget this week began I believe it was this week with those stories about alphabet and Apple and in fact helped the stock prices of both. That Bloomberg story still yeah no real confirmation of it and by the way just just so we're sure many people felt that alphabet itself the stock was going to fall or badly during this spring and if you take a look at it is one of the best performers and David as you know it's got the fabled reverse head and shoulders chart that I often point out to you as being incredibly important because I know you're a fundamentalist. Yeah well I'm a technical analyst of course that's what I've spent most of my time doing is you won't know that's reverse head and shoulders right yeah just want to make sure I know and that's in your outfit has me so transfixed is very hard for me to focus. As I'm sure it would I'll see at the disco later. I hope I hope is usual our Friday night. Yeah I'm taking a red eye because I really have hoarse sleep I certainly proved that this week. Well you always do. You never sleep. All right back to Apple. You don't want to give the DOJ a lot of time but listen Jonathan Kenner was a guest earlier on on Squawk Box talking about the case that they are bringing as we made the point yesterday Jim it will be years in the making and so who knows the stock did suffer yesterday though on the announcement. Take a listen who a little bit of what Mr. Kenner had to share earlier on Squawk Box. Our concerns are not with necessarily what Apple is doing with Apple's products. Our concerns with are with restrictions when Apple tells others what they can and can't do with their products. That is our primary area of concern and that is the primary area of our focus in the lawsuit and ultimately allowing others to innovate will yield more benefits including the kinds of benefits that Apple was able to generate and we talk about this in our lawsuit when it had access to the Windows operating system in the early 2000s so that it could launch products like iTunes, iPod and the iPhone. Trying to connect in fact previous antitrust actions and the benefits that were brought in part for Apple as you heard them do there. Right. Well look I think that if we were to look at Costco and say you know what if you want to sell in Costco you're gonna have to play by these rules not by your own rules by that take then Jonathan Kenner should go after Costco. It really is that I'm not being facetious I'm saying it's the same kind of logic. Costco is the second biggest they can determine a lot of different things you would go after Costco and I what I'm neglecting to point out and I should have said right at the top of the show Jonathan Kenner worked at Paul Weiss really nice man. Oh no are you pulling away on can you what do you mean you've always said really nice things about Kenner? Well I've always complimented his seriousness his focus now you're just going with nice guy what happened Paul Paul Weiss is my attorney and they've been so for almost 40 years and I expected more I expected more of a rigorous lawsuit I expected as I went over it to see something more than you know what we should offer the Apple Watch it makes it so it's very difficult to get away from the ecosystem I was shocked I thought that there would be a smoking gun here I thought that there was something like Microsoft with this 95% share I even thought maybe there was a reference to Standard Oil trying to get 100% share David instead they're talking about the performance high performance phones and that they dominate high performance it's actually a brand new category I've never heard of it before and frankly what they're trying to do is say you know what it doesn't matter that Apple has 20% worldwide share ignore that and when it comes to the high performance phone they have a very big share how did they make up this category I do not know and I thought when after I finished reading it that I want the hour and 15 minutes it took me no more than that I went that time back I want it back so I can focus on more substantive research and things that matter to our viewers okay I guess we'll do that and that is quite an indictment from you it is meant to be it is meant to be it is meant to be this sound like a swan song for someone who recognizes that he may not be running the antitrust Department of the Justice Department six months from now well that is certainly a real possibility all right you want to move on to a couple of the other earnings movers this morning or you know the only thing I would add on Apple back to AI is this Wall Street Journal report that they held talks with China's Baidu for use on AI and the devices that interesting makes sense right you don't it's not like they're gonna be using alphabets Gemini in China you want to use the local provider if you're gonna stay in at least the good graces of the Chinese government yes Google us know Google and meta nothing in China so they're not allowed to be there right so well I mean I think that was really good idea and that partner would be very very good that would actually be something that I wouldn't be surprised that Jonathan can't put in since it's equally as unpersuasive Wow now this was after all these years the pain together of our long time you still surprised me you still make it interesting Jim well I just he goes beyond the pale it was a pastiche if not Mosaic a very weak analysis don't buy me a big team move though no I thought if I had hired him to Paul Weiss I would have come back and I would throw it back and I would say pick your best five pages I didn't get anything out of them there I thought that was funny yeah I was referring to us like we were married did you get it and then I was referring to that absurd decision you made to buy your wife a bathing suit on Timu that was a major mistake and ill advise the fire hazard it came I think it came with a fire hazard label as many things do come from China who would ever do that it was a major trying to get divorced what we're thinking it came in a FedEx package and it was just you know I open it up a FedEx package perfect let's perfect thank you all right FedEx shares are going to be up Jim you know the take I'm hearing having talked to one large shareholder express margins stronger than have been thought even though two and a half percent is not much to speak about it's a lot better than it's been the cost cutting is starting to take hold and tired of the beat appears to have been expressed margins this is a company that has blown up previously in a weak demand environment but the question is maybe they can hang in there if there is one and they seem to be getting better at managing expectations not to mention the five billion dollar buyback is a big number what's your take two points here that need to be made rise should Romanian has delivered from his first appearance on our network where he said that it was an unwieldy structure he's slowly weaning themselves out off of the multiple different structures that had been almost like different companies what's incredible here David is the second thing they had no revenue growth and they made this amount of money can you imagine what happens when they get revenue growth Europe was particularly really particularly tough to them David they've kept 70% of the business that you that they got from the UPS work stoppage 70% of the customers who were with who were with UPS who then went to FedEx stayed that's a rather remarkable number this is a tour de force quarter and I think that you and I both remember when there might have almost been activists because they had so many MD 111 planes which are being retired I applaud this company they were they did not have the right infrastructure they had too many people 22,000 people now out a remarkable quarter and deserves to be up this much yeah right I mean they did obviously have an out a significant activist a couple of board seats de shaw let's take a listen to a super meaning from the call describing the quarter for the third consecutive quarter we delivered operating income growth and margin expansion in a declining revenue environment this is a very positive dynamic and the unique one in our industry it demonstrates clear progress on our transformation and ability to manage what's within our control I guess the point you're making in the one I made as well the fact that they are again express has been one of the key areas of concern and they are starting to actually show a margin there you think positive things for the future as well then Jim most definitely and I don't think Europe can deteriorate any much more than it has I do think that Raj recognized with his drive program that there was unfortunately I'm gonna say a lot of fat because I think Fred Smith did a great job building this company with with an amazing mode but they just added on I mean they ground they express he wants to make this into a extra let's say a structure that looks like any other company and when he's done that you're going to see the earnings power it is amazing by the way the e-commerce which is part and parcel of the business it's just not strong it's just not strong because Europe is so weak China okay I don't think that Europe can stay as weak as it is I've been come I've been asking some bankers over there could really be this bad yeah there is a sense that it's just hard to do business there still Germany is the problem Germany is very weak David I did not know that yeah the German economy is is is not in great shape right now it is a turn for the down yeah let's raise a Nike here we can get to it again after it opens but you know no revenue growth and calendar 2024 says RBC leaves little to play for that's a downgrade this morning you can see the stock is going to be down slowing China sales as well what are your thoughts they are they're not delusional because right at the top they talk about the four things that are wrong they'd have to do it believe in a whole sailors more continue pushing new product they don't have that need to sharpen on sports this is typically the season when you buy Nike because it's ahead of the of the Paris Olympics I would urge people not to do so and till they come up with a more serious game plan to be able to reverse these problems that they talked about right at the top I was not as disappointed as they were their digital growth was I would put it in a pathetic category this stock deserves to be down as much as it is even though it's been a continual decline by the way we've been focused on China being badly I think that's a mistake I actually thought that it was somewhat of a bright spot versus the United States which was actually terrible and they are sort of taking to criticizing themselves CEO John Donahoe saying we know Nike's not performing at our potential it's been clear we need to make some important adjustments not exactly clear what that is take a listen to some of his other comments from the call two three performed in line with our expectations that said we don't know he's not performing at our potential while our consumer direct acceleration strategy has driven growth and direct connections with consumers it's been clear that we need to make some important adjustments all right essentially saying what I just paraphrased as well what do you think those adjustments will be well I think that they have to decide who they are I mean do they go back into other company stores had they was share I would have talked about that to new balance lost share to hoku lost share to on they were very very tough on themselves even though inventories were down which I thought was positive this is a high performance company that's not operating at its level of high performance I think John John Ho can fix this because it's not like the categories bad I also think by the way air is gotten old I always thought when would air get old it was this quarter I think they can fix this but they have to start with really trying to figure out what went wrong and why they didn't do what looks so long for refresh yeah but they were hard on themselves and I respect that all right well coming up after we take a quick break it is going to be day two of trading for a reddit this after what was a strong public debut for the social media company let's give you another actually a first look at futures this morning really not saying much at all we're stuck in the streets right at the UPS store we know things can get busy this upcoming holiday you can count on us to be open and ready to help with any packing and shipping or anything else you might need is there anything you can't do um actually I don't have a good singing voice the you know but our certified packing experts can pack and ship just about anything at least that's good the UPS store be unstoppable most locations are independently on product services pricing and hours of operation may vary see center for details come in today to get your holiday goodies there on time now is the time to embrace a new wave of workers every day your team grows younger more digital and more drawn to entirely new ways of working which means you need flexible solutions to connect them where business gets done T-Mobile for business was born digital with America's largest 5g network we can make it easier to work together from virtually anywhere your team may be changing but with the right tech it can be more productive than ever before get started at T-Mobile.com/now we made a profit in the back half of 2023 we grew revenue three times as fast as cost last year and so what's I think beyond the community of Reddit and the platform of Reddit there's actually a very nice special business here and our gross margins are very high the high 80s and have been for a long time and so even small improvements in revenue go straight to the bottom line for us and so this is truly I think a special company in profitability is you know it's an important milestone for us and we're getting closer and closer. That was a Reddit CEO Steve Huffman he was with us right here at post 9 yesterday of course as the social media company had what was a very successful debut stock was up 48 percent as it to close trading price was 34 if you recall. Perhaps some of those gains given back today Jim you know that was the big question he answered it and certainly the market at least day one seemed to be happy given they have not been profitable in any one year in the 19 years that they've been around. I thought that interview was great and one of the things that is very true that really just surprised me was that Huffman working with Morgan Stanley a place this thing very very well I know he was actively involved with who it should go with he went with the sticky people who worked at Reddit I don't think they're going to flip this was a very well done offering David and I think it could have been a major botch it could have opened at 90 worked its way down to 40 instead it went the other way it kind of went up open pretty good then kind of went down then kind of went up the rest of David different from uber which was a fiasco I applaud this and while I know you guys were very tough on him when it comes to when they will turn to profit I thought he was a very seasoned exec when you spoke with him good us well done. Any signs it gives out for the broader IPO market we had another initial public offering this week a star that we talked about that did extremely well and it's debuted you know we've been waiting for what certainly there are plenty of private companies that have been waiting to go public and yet they have yet to really show up in force. I think it's going to matter tremendously out here at NVIDIA I spent a lot of time talking with people who work with NVIDIA for health care they were almost all private companies they almost all want to tap the equity markets I think and they're not phony AI they're real AI I think they're ready to roll I think Morgan Stanley which is owned by my travel trust had been kind of invisible during the period I think they're ready to bring some deals golden ready I think it's time I think it's going to be that spring period before the Hamptons where people get deals done. I will say it'll be interesting because we have it has been notable by its absence given yes strength in the broader market. Jim get ready you got a mad dash to close out the week coming up of course let's give you one more look at futures we get ready we get started with trading here about eight minutes from now you can see where it's kind of a mixed a mixed picture for the broader markets we're back right to this. At the UPS store we know things can get busy this upcoming holiday you can count on us to be open and ready to help with any packing and shipping or anything else you might need. Is there anything you can't do? Actually I don't have a good singing voice. The Yupy Nup. But our certified packing experts can pack and ship just about anything. At least that's good. The UPS store be unstoppable most locations are independently on product services pricing and hours of operation may vary see center for details come in today to get your holiday goodies there on time. Take a look at the laggars as we head into a trading day Lulu topping the list we will get to it don't you worry after the company reported earnings that as you can see are not being well responded to at least if you own the stock. Tesla also some stories there we'll also mention that so you got a lot to a lot to tune in for it still to come including Jim's mad dash and by the way don't forget you can catch us anytime anywhere by listening to and following the squawk on the street opening belt podcast we're right back. Alright last cross country mad dash of the week you know we saw Lulu it's gonna be down sharply what's going on there Jim. This was a very tough call from a very high quality management where they just mentioned several times US traffic has slowed high single digits I was very surprised that is a big let down. The company was really somewhat mortified by what they're talking about a slow down really pretty much across the board broad bases the term they use. This was surprising and their forecast you know 10-11 percent David this is a high growth company and I think that they themselves were caught unaware of how weak they can be I don't know if they can pull out this fast. Calvin Donner is a very well-run company CEO I know that they were I think that they only they didn't blame the consumer at one point not themselves I think that that is something that I questioned because the consumer was very strong in a lot of other places but geez this was just sheer disappointment surprised at what downgrades on the street no one wants to leave this company because it's been so successful right just a just a week week forward. Again the news that really seems to be moving it is the fact that first first fiscal first quarter 24 guidance is for nine to ten percent increases your over a year Jim which is below virtually every estimate out there from from the annals. Yeah and you know you could go to Ralph Lauren and get much much better numbers. PBH and we could look at the numbers and say wow wait a second this was just this sub-optimal quarter now the question is should we draw a pattern? Nike. Lulu are these companies that aren't just charging too much when others are coming underneath them with good product that's what I questioned they don't address the competition in any of these they still act as if they're kings I don't think they're kings anymore. Yeah stock opens down over 14 almost 15 percent you heard the opening bell there you can take a look at the real-time exchange back at our headquarters here at the big board water technology company Zilam over at the NASDAQ financial services company Citizens in Northern celebrating its 160th anniversary. Well done. It's a long time. It's older than you. How come Zilam? Thank you for that Zilam doesn't sound very loud David are they is is a bit of a subdued group there? Yeah it's it's not a large group here not that large a group. Yeah a company had a changeover or CE that they had an activist that got involved I've always felt because of the secular notion of clean water it's still a winner but it's not my favorite group by the way Pentair which does similar things was downgraded today so let's keep that in mind. Okay I will keep that in mind what else do you want to I don't know where do you want to start with what we have? We haven't talked about Boeing yet. All right let's talk about Boeing. By the way when is my apology coming because you blamed me for selling the stock when I forced you finally forced your hand. David I apologize. The stock is up. Oh I heard that. Well this is two days in a row that it's up. It's up. What does it seem to be great news? I don't know Jim. All right take it away. Okay perhaps there are people who think that the problem with the company is the CEO David Calhoun because airline CEOs are seeking a meeting with Boeing directors. They don't want to meet with Calhoun. Perhaps certain people say if Calhoun is out and this is indicative of something that would start the chain of him being out. Someone new could come in. David the board is actually a heavyweight board and I do think that let's just say that this could be the beginning of the end. If they're going to insist on meeting with the directors the directors by just looking at them. I mean you've got a Dave Gitlin a carrier. He's not good. He's not a guy who's gonna roll over. You've got Steve Molinkop. We know him and as a tough person from Wallcom. His time running Qualcomm. Yep. You have a four-star admiral. They tend to be pretty serious and have their own view of things. There's a former United Technologies executive but again very important. Larry Kellner the not executive chairman knows the business very well from Continental. A GE Aviation person. David these people are not going to be rolled. If they meet now they did offer Boeing in turn only offered Kellner. If these airline executives which of course the customers press there will be a change. There will be a change at the top. You can have your customers rebel against you and think that you can keep the strategies just currently. Yeah and those customers obviously frustrated certainly the ones that rely a lot on Boeing to supply their fleet by the slowdowns and manufacturing brought about by all of the missteps Jim that mean essentially they have fewer planes they can fly and so there's reduction in capacity or at least below what they had anticipated coming into the year. I look for a person like David Gittland who's been so successful carrier to want to be at a meeting with with the executives. I think this idea of just sending the the non-executive chairman is a non-starter when you have your major customers that want to meet with the board. Yeah although that is typically you're gonna you know I mean you're gonna have sort of your lead director your non-executive chairman in this case kind of conduct those in the same way they would with shareholders. You're not going to send the whole board in that's that's very atypical Jim. I mean maybe you think they should. I think they should have a committee that means I don't think it should just be one person and David the one thing I would say is that there really is only one other maker it's so Airbus I don't think these people want to go to Airbus. I also by the way think that if there was a change at the top perhaps the FAA would like that. All that said Mr. Calhoun I think he's been right forthcoming in his interviews with Phil LeBeau but maybe forthcoming doesn't cut it. We've seen time and again that until you had someone change at the top people feel that nothing can change culturally. This board is again filled with people who cannot be bought. It'll be very interesting to see what happens. And we will watch it and watch it closely of course as you take a look at Boeing shares which is as Jim pointed up are up and there's a comparison versus Airbus which has been gaining market share. Yes Jim. All right where else should we where else should we had I mean Apple shares are down a bit. Met is down a bit. I see alphabet though eking out some gains so far this morning. I wonder where the people feel that this story will come to fruition this weekend perhaps about something a tie-in with Apple. There is it by the way a positive analyst note about how they are they're actually much more in a sweet spot than we thought. The Apple by the way you have to get rid of all the people who don't understand what's really going on that this is a two three four year issue. They all have to fling because they are what I regard as being summer soldier shareholders. Summer soldier okay so they're not in favor of the law. They are not in favor of the law. They're not in favor of the law. Right. Got it. But don't you feel as though I mean what's going to be the catalyst for this stock. You have to wait at the very least for June don't you for the developers conference. Well I have to tell you I think the catalyst number one will be if they can get alphabet as you know Google as their AI that means they have to spend a fortune maybe they can do something in this 60 iPhone 16. But the other not to beat a horse too severely but what I saw from Jensen Wong and what they could be able to become the streaming the on the verse to the right division. You've talked about it. Yeah you mentioned it. But Apple said what was it that you saw Jim because this is you know not the first time you brought this up since you've been out there. What has captured your imagination here. They think at Nvidia very strongly that you can demonstrate the sale of cars that Ford Motor should be in touch with them. They have a Nissan relationship. Homes might be better to be looked at through the Vision Pro. And then the $40 trillion market that is manufacturing of factories would be sped up and if the if Apple just realized that they should call a company like Siemens and that everybody who's on the factory floor should be playing a role the digital twin and the digital twin streamed by Omniverse to the Vision Pro would be Jensen Wong says a game changer for for all companies including Apple. I did notice by the way that Medtronic feels that they've been working very close with Nvidia to be able to put a lot of AI in their product. It's not a relationship that is for show but Apple has to demonstrate that they are more interested in in this and address the keynote where Jensen Wong the CEO of Nvidia directly references how well this could be done in order to be able to sell cars. Why would Mark Zuckerberg say hey we can do this too. I mean he should remember his remember his famous product review of the of the Vision Pro where not unexpectedly he came out and said I think we do do it better. I think that he should press that. I think that's actually wise. I think they'd rather pair with Apple because they think so much of the Vision Pro but if Apple doesn't embrace it I don't think Zuckerberg will be far behind. Jim Tesla shares are down another 3.3% it's kind of close to where the sort of recent lows stop down some 30 let's call it 3% for the year thus far. The latest story that we've got I believe is a Bloomberg story from this morning talking about reduced electric car production at the biggest plant at owns that's in China of course the Shanghai plant. They're citing people familiar with the matter saying that earlier this month they instructed employees at the Shanghai facility to lower production of both the Model Y and the Model 3 Sedan. Those are both the ones that are made in China. They're now working five days a week they had been working six and a half days that at least again is Bloomberg citing people who were not authorized to speak publicly but at least spoke to them I guess. This is a very challenging moment for them. The Chinese companies have been I think we've seen if one thing we've seen in the last six months China knows how to build a really great cheap electric car. Musk has addressed that directly I am concerned for them given the fact that China has become aggressive and China has a government that is willing to help these auto companies. So it is a very difficult situation and then just switch over to Germany the FedEx was saying yesterday the Germany is quite weak. You've got these markets that aren't strong we're not talking much at all about the cyber truck. This is just I still think that you should be interested in owning Tesla because it is so low but they raised prices earlier in America but it is a challenging moment for Tesla and for Musk now David Musk has got so many things on his plate. I don't know how much he's focused on the day-to-day Tesla. Yeah that always becomes a question obviously he seems to have been capable of focusing on a great many things and sort of but he does sort of move all right SpaceX I'm going to go into demon mode as they like to call it for a little while there. There's a problem and then to Tesla but to your point the Chinese automakers have increased the quality of their cars simply put the technology in them the overall quality of them it's not just BYD it's any number of other makers BYD being the leader and that just makes for more competitive markets both obviously in the domestic market in China but outside of China as well Jim. Yes I keep hearing about the Trojan horse that is Volvo where you can put the right amount of American content but make most of it in Mexico get it to United States and that would be the company that could up end the market. Mexico remember that amazing report that just should be talked about far more fillebo going to Chile and seeing that that has become a Chinese market. Mexico 30% of the vehicles are Chinese they will get them through this country if President Biden isn't careful about addressing this issue I say this because former President Trump is all over them trying to stop them for wherever they are. I think President Biden should be more concerned about the state of Michigan and stopping Volvo. Yeah interesting I mean of course the other side is you can provide an incredibly low-price vehicle if you wanted to do that but of course you would then undermine our domestic manufacturers that comes in a lot of different areas not just automobiles solar panels certainly is another example for for one that we've we've really tried to keep out to generate some actual domestic manufacturing not just David you're saying that the the environmental agenda may be put to the side for a moment in order to get so that the unions and again the state of Michigan get aligned with an election year I'd hate to think that the planet takes second fiddle to the election year but it is a we have a lot of things that could be a challenge including data centers and the power they use because it's got to come from somewhere. Jim I want to go back to SPAC land which I visited yesterday for the first time in a while and you know why of course talking about digital world acquisition corps or old animation. We warned people for so long during that 21 period 2021 when SPACs were all the rage but digital world acquisition corps has been out there for a very long time remember was under written by a firm called EF Hutton it's actually not the old EF Hutton they licensed right you got to go way back and then it was mired in regulatory uncertainty for a very long time as it did not get the review from the SEC in part because there are a lot of questions about the previous management there having already spoken prior to actually listing and issuing the shares of the SPAC to Trump Trump media and technology group namely truth social being the key thing but that's all behind us now the votes today there's virtually no doubt that shareholders are going to approve this deal wouldn't you if you don't then that deal doesn't happen and then that's it SPAC goes away you get your ten bucks back so yeah they're gonna approve it at 44 bucks aren't they yes I pointed out next week more importantly the D SPAC occurs the additional shares hit the market and I've tried to explain that to people sometimes we may need to go back because people may have forgotten how SPACs work the sponsor shares the new shares that that come in Trump media and technology group has gone on some by my reading of the latest filing some 87.5 million shares and then had the opportunity to earn another 40 million shares in what could be a very quick manner because all those shares have to do is stay above 1750 for that 40 million for 20 trading days for that 40 million to go so you're talking a hundred and 27.5 million shares Trump owns 90% of that it's an enormous potential number Jim but the question of course is if and when you go to try and monetize what happens because we are talking about a company that thus far has had very little in the way revenues some three million dollars for what would be if you do all in and include warrants and converts you get a share base of over 200 million so you can do the math thing would be worth over eight billion at the time of its de-spacking that's fully diluted really around a hundred and sixty nine million shares it appears at the time of de-spacking you were the first person to go over this I spent a lot of time go parsing what you said a DJT would be the by the way the symbol if you'll go through a Monday and David I can't believe there'll be a bag that wants to make that so you know really what is a margin loan for President Trump using that stock because if that stock goes down precipitously then you will have a Twitter on your hands which obviously hurt Morgan Stanley for a while but maybe worse because here at least there was revenues there's almost no revenues here I think you brought to the fore the the problem writ large of SPACs I remember you did the same thing with Lucin this one is far worse this is one where it is political that the stock is up here the faithful obviously wanted up here but David this company would never be if it weren't connected with Trump valued it even one tenth of what it's going to be valued at yeah that would seem to be the case at least based on fundamentals now that said if you were to win the presidency and use truth socialists his way to communicate once again you could make a case that it will become a vital area for everybody to at least be watching and so advertising revenue would probably significantly increase Jim it's it's fascinating for that reason we're keeping an eye on it as I said the vote no question really today de-spacking next week maybe on the 26th or so we'll see what the date is and then we'll be able to watch DJT trade now again if you want to try to access those shares and start selling that could be the end of it in some way and to your point while I reported yesterday that there have at least been conversations that I've been hearing it took place so haven't been able to confirm about would there be a way for him to at least use some of the shares is collateral for alone that has not happened to your point okay that has not happened so you know David you raised an amazing point yesterday you said you cannot borrow it now realizing now maybe people should realize at home what that means that people are gunning against it but they can't win correct yeah I mean you the borrow is something like 300 you know it's and it's you can if you want to pay some crazy number but it virtually makes it impossible to do so at least for most yeah so it's incredible how it's not rigged obviously but the system does is not going to be able to work well the capital system won't work well with this particular item in part because there are people who recognize it maybe this could get President Trump out of what's perceived to be a jam for cash exactly but again on paper at least when this thing is trading publicly as DJT if it maintains the current price his stake alone or the company that he that he's merging into it from media and technology group will be worth that stake will be worth some five point five five point seven billion dollars Jim all right before we hit a break any I want to check with you anything else you wanted to hit this morning yeah well I remember if Donaldson loved and Jen Rhett would be around they'd be able to finance it remember they financed all of Trump's junk bonds for casinos yes yes they're not they're not in business that would be a logical place to go DLJ is no that became a part DJT does not have DLJ yeah yeah wasn't that something they were so good but they did those deals they they they got a decent price from they sold oh yes they did well they were quality and I missed them because the three principles were extraordinary people yeah whatever yeah they all all right I'll give you a bond report I know you've been wanting to hear one general you're gonna check out how treasures are occurring this morning of course a couple of days since our big Fed meeting in the press conference where we heard Jay Powell and there's a look at yields 10 years down four point two one four as we kind of close out the week here and you can see the two-year note also below four six we'll be right back all right week's top gainers of course micron on the earnings that was yesterday you can see the gains there FedEx we've discussed this morning as well and there's odd com powering ahead to one of the largest market values in the current stock market some six hundred and thirty billion dollars we're back right to this all right there's there's Kramer what were you getting a tour there what what am I looking at here Jim that I went over to see the robotics section it was rather amazing because the robotics I think are the ones that are going to be most improved by the new chip black well they're not there yet they're doing mostly pedestrian things when they're done that that bartender will be able to make me a much better drink than he made me yesterday or today's go that was a mocktail by the way just people know all right yeah I know you're not drinking during the day and there you are that's wow you're doing well that's me being that that's me that saying that Apple should be talking right now to Jensen that because that's me in a in a Nissan car I had no idea I was not in the car that's cold rolled steel right there there's me opening the trunk you look very strange there well there I am sitting in the bucket seat trying to get trying to fix the seat belt and then ultimately I get out and I don't realize I'm not in the car and I swing my leg is if I'm basically worried about hitting the rocker panels all right we got a short time for a stop trading what do you got Chipotle you know I feel like we there's an issue going on right now with how much the stocks put really means watch Chipotle I think it went up you even went abuse amount because he announced a split now of course what you do need is some earnings or some upgrades but I think that David we're gonna talk about the split next week because it's the first time I've heard an actual economic reason for why it's justified it's just so much easier to buy a stock with a large order if you do a 50 for one I can't wait to see you yeah well you won't because I'm gonna be away next week but what do you know you're supposed to say you'll be off for the morning and for heaven's sake yeah right I'm on assignment I'm gonna be on assignment relaxing somewhere what do you got for you yeah thanks I've got Octa which by the way I think is made a comeback from a terrible breach they had to become once again the number one in identity Roblox had a terrific quarter and then Amrita who's a David Block has made some incredible that's the old square some incredible changes and really trying to become much more of the other bank it's a winner I got three winners tonight you've had winners all week Jim really great you just great great stuff great content as we like to say great I just justice is served David justice is served all right well finished up the week strong I know you will and I'll see you soon enough thank you you've been listening to the opening bell on CNBC squawk on the street all opinions expressed by the squawk on the street participants are solely their opinions and do not reflect the opinions of CNBC NBC Universal or their parent company or affiliates and may have been previously disseminated by them on television radio internet or another medium you should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy but only as an expression of an opinion such opinions are based upon information squawk on the street participants consider reliable but either CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy and it should not be relied upon as such to view the full squawk on the street disclaimer please visit CNBC.com forward slash squawk on the street disclaimer sometimes it takes a different 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