Closing Bell - Closing Bell: 3/27/25

Episode Date: March 27, 2025

From the open to the close, “Closing Bell” and “Closing Bell: Overtime” have you covered. From what’s driving market moves to how investors are reacting, Scott Wapner, Jon Fortt, Morgan Brennan and Michael Santoli guide listeners through each trading session and bring to you some of the biggest names in business.

Welcome to closing bell. I'm Scott Wobbner live from Post 9 here at the New York Stock Exchange. This Make or Break hour begins with two big stories we are following this hour. Of course the very latest in the trade war and the impact that new round of tariffs is having on the markets today and a very high interest IPO because of its proximity to the A.I. trade. Core we've set to price tonight go public tomorrow amid some serious questions about that offering. We will get the latest in both stories in just a moment. We'll also speak to Black Rock's Rick Reeder exclusively today about all things markets. First though take a look at the picture here 60 to go in regulation been under pressure for most of the day today as those auto tariffs begin GM and Ford and some of those other related names from that space all lower. So there's red a bound in that group. We're watching chips to today from Nvidia to AMD Micron and

more read there as well. And that leads us to that core we've IPO being closely watched on Wall Street and elsewhere a good sentiment read on many facets of the A.I. trade. And that is why there is so much attention on it, including from our Leslie Picker,

who is following the money for us and has the very latest because the latest has been changing from here to there. What do we know now? The latest has been changing, but I think you describe it correctly in saying, this is a big sentiment read. I was just talking with a big investor who said that if this deal came out in December,

probably wouldn't have as many Issues have as much hair on this deal. However, given just the fast-moving dynamic No final decisions have been made although it's looking like discussions with investors are such that we would see a downsized deal Not gonna see a refiling of the s1 that indicates a new offering size at this point in time, but there have been conversations about making a pricing below the range. The $40 per share number, that's the one that's out there that pertains to Nvidia's willingness to anchor the offering with a $250 million order at that price. That's according to a person familiar with the matter. Nvidia already owns 6% of CoreWeave, which would have been diluted down to 5% after the offering. There's call scheduled about an hour, hour and a half

timeframe after the market closed to determine the final price tag. But at $40, CoreWeave would be pricing 15% below the marketed range. The company and some of its selling shareholders are planning on offering 49 million shares, although that number could be reduced if there isn't enough demand. CoreWeave provides software and cloud services to manage AI infrastructure.

IBM, Meta, Microsoft, NVIDIA, and OpenAI use CoreWeave's technology. And while its revenue has skyrocketed from $16 million to $2 billion over two years, its losses have widened. And some analysts have suggested that Creative Accounting has led the company to showcase some higher gross margins than they actually have, Scott. There are several issues that seem to be

at the forefront of the conversation today. Many, in fact, high customer concentration, big debt load, enormous capex required because they have to buy the latest and the greatest of the Nvidia chips. And Christine is going to have part of that angle in a moment. Depreciation that would take place because what are the old chips worth? The multiple, I mean, you're dealing, Leslie, you know, the IPO market as well as anybody, you're dealing with more questions about this one than maybe you've had with many others. And not to

mention the timing. No it's true. And sometimes when you have a market and when you have and this goes to your point earlier when you have this sentiment story stock I mean this is a company that plays into the AI infrastructure environment into the AI supply chain. If we thought about something like this three months ago many investors may have been able to look past some of those difficulties to invest in an IPO in a growing space. And a lot of those problems are things that may not be a next year problem may not be the year after that but maybe like three years down the road. And so you know investors could say OK I'll buy into the IPO. The problem is that ever since deep seek happened ever since you had those comments from Joe site earlier in the week questioning whether data centers are in a bubble. I mean all of that plays into sentiment that suddenly those risks really become magnified and investors are no longer to to take on something that's unproven it's untested. You know it's a new new

issue to the public markets and that's where that kind of confidence issue plays And there's just a lot of negative sentiment out there as a result of all that but as of now we're ago, right? There was also some suggestions out there that would they wait for another day? But as you know it now This is gonna get more details after the bell and we'll do it tomorrow What I have heard is that the book itself, I've heard that a big portion of the book, about half, maybe a little more, maybe a little less, is comprised of three big investors that are pretty solid. They're in this. So basically they

have to fill the other half of that. At what price point that gets done, how many shares that gets done, that remains to be seen. I have not heard that they've officially decided to pull it or anything like that. But you know, it's a tough deal. No question. You bring us the latest as you have it, Les, please. Thank you very much for that. That's Leslie Picker following the money.

Christina Partzanevalos is following the Nvidia angle for us. What do we know here? Well, actually, I just want to touch on what you asked Leslie, even from the Nasdaq perspective, they're still going through with it. The caterers are booked for tomorrow. 100 people expected. But this is a big tech IPO, and it's really drawing scrutiny for its massive debt. You pointed to high interest borrowing and looming loan maturities. But first, let's actually just go over the good news. They operate over 300,000 GPUs from Nvidia acrossIA across 32 data centers, made $1.9 billion. Leslie

talked about that just last year, and they're forecasting possibly $4.6 billion for 2025. So, they rent out GPUs, CPU storage, and a lot of that has to come from NVIDIA, who is also a 6% investor, possibly 5% if it gets diluted, a supplier and customer. Microsoft is Coriwee's top customer, generating two thirds of its revenue, while Nvidia is a close second. It recently signed a $12 billion opening ideal, but customer diversification is a concern

that you pointed out to Scott. Financials also projected $15 billion cash burn in 2025, 8 billion in debt, 15 billion in lease loans or lease obligations, but much of this is collateralized by GPUs, to your other point, Scott, with limited lifespan. So this is taken, I just grabbed this from the S1, so you can see the tech equipment is six years, but it's usually around three to five years. So that could mean rapid depreciation, especially when you consider in videos frequent chip

updates that are on an annual cadence. So, CoreWeave is known to have a lot of H100s, which would already be outdated compared to the B200s. As the IPO just hits this volatile market right now, CoreWeave faces tough questions. Can it outmaneuver NVIDIA's possible expansion in the near future, hyperscaler competition, as well as its own financial risks. Scott. All right, Christine, I appreciate that. You bring us any updates, of course, as you have them. I think we surrounded that really high profile story very well. Now to the other one. That's tariffs beginning today on auto sending shares of those stocks lower. Our Phil LeBeau joins us now

with the latest there from what you're hearing from inside the industry. And Scott, I can tell you what the industry is trying to figure out is exactly how these tariffs will be applied. There's a lot of fine language that has not been codified by the White House at this point. And as a result, even though they say it's a 25 percent tariff on autos and components that are manufactured outside the United States, there could be some offsets within that. And that's the reason why when you take a look at the shares of the automakers, yes, they're all under pressure. This is going to cost them. There's no doubt about that.

There's a possibility that in 2025, you could see some of these automakers post a loss for the year. And by the way, GM is more exposed in terms of manufacturing outside the United States. That's the reason its shares are under greater pressure. And let's refresh everybody's memory here. What we're looking at is a potential tariff on roughly 46% of the vehicles that are imported

every year into the United States. Of all the vehicles sold, about 7.38 million are brought in, whether it's from Mexico, Canada, South Korea, Japan, a few other countries, obviously many countries over in Europe. To what extent is that 25 percent tariff applied on the landed cost of the vehicles versus are there some offsets because hoping from the White House over the next several weeks as you take a look at the parts suppliers. Just getting hammered today, Scott. A lot of this is uncertainty. Some of them do have production outside the United States, which would be implicated. Some of them supply vehicles in another country. Will those vehicles not be made to the same degree? There's the level of uncertainty there. And then finally I want to take a look at the auto dealer stocks and the reason the auto dealer stocks are under pressure is because almost everybody

agrees you're gonna see the automakers pull back on incentives, probably raise prices and demand overall is gonna fall. That's the reason why the automakers or the auto dealers are under pressure. Scott, back to you. Are we hearing anything, Phil, from CEOs, Barra and Farley of GM and Ford respectively? Not yet, not yet. Two reasons. One is because nobody is entirely sure exactly what the detailed language is in terms of the USMCA compliant components,

how that could be offset in vehicles that are manufactured, let's say in Mexico or in Canada. That would have huge implications for obviously the big three, but all automakers who have plants outside the United States then ship vehicles in here. The other thing to keep in mind, we haven't heard much from auto executives, not just Mary Barra and Jim Farley, but one reason we haven't heard much is because they're still working this with the White House. They are still talking with the White House because the language has not been finalized, and nobody wants to get out ahead of this.

Yeah, understood. Thanks for helping us understand this better, Phil. Appreciate that. That's Phil LeBeau. Stocks overall modestly lower today. Investors are assessing the potential market impact of these tariffs. For more, let's bring in Rick Reeder. He is BlackRock's CIO of Global Fixed Income, head of the asset allocation team as well. It's good to have you. Welcome back. Good to be here. Thanks, Scott. By the way, I'm always on on difficult days. I want to come on with like a big stock market rally, a big, but a lot of stuff to cut through here. You should be happy about that. Big days happen. We need big guests like yourself to help us understand all of this. What is your take here as the market's uncertain, it's unsettled and it's trying to get its arms around what all of this is going to mean? So one of my super smart colleagues said today, he said it's like there was an earthquake

500 miles offshore and we got to wait till it gets to shore to figure out where everything's going to, where everything's going to play out. And I thought that was a great, and now by the way, the offshore analogy was also pretty good. Listen, I think there's a couple of things and I think what Phil was saying, we've tried to look at how do you, how do you implement some of these tariffs? How do you think about parts? How do you think about the elasticity of different businesses?

And quite frankly, the error bands are so wide around it that it's uncertain. And then you marry that to the fact that if you're a corporate CEO, CFO, by the way, in this industry and other industries, how do you think about supply chain? How do you think about your distribution channels? How do you think about your cost of goods sold? What do you do with SG&A? So we're in this incredible period of uncertainty. And I think the data, particularly corporate data over the next couple of months, is going to reflect the fact that people are sitting on their hands. You're in this period of stasis and uncertainty. So as an investor, you know, what do you do?

You take your beta down a little bit, you manage your risk down a little bit, you buy some options to create some upside convexity in the portfolio. But I think you got to, you know, I always said, you know, instead of trying to hedge everything, just just hunker down a little bit, take a little bit less beta risk, hold on to things like income that provide you a balance in the portfolio. But we're going to learn a lot over the next month or two that are going to give us a bunch more information about about what these things will mean. I mean, there are some who are suggesting don't wait around.

Like they're already switching their allocation mix. Way heavier in bonds, for example, and lighter in equities. And you've had many firms take down their exposure, take down their outlooks. You get Barclays today, markets are under pricing trade risks, switch preference to global fixed income over equities.

Mr. Wheelhouse here. So there's something really interesting, and this is a pretty historic point in time. Normally, you think about, gosh, I've got to go to cash, I've got to get really defensive. The beautiful thing today is you've got a central bank, you've got the Fed, and by the way, the ECB, that hasn't hit its inflation target.

So you keep the front end of the yield curve high what that allows you to do you can build a portfolio with pretty safe fixed income create six and a half six six and a half almost seven percent yield and so think about what that means if they're on a pension fund an endowment foundation my return target by and large is around seven percent and inflation Let's say inflation is running high twos, we could debate which metric we use. Gosh, if I can hit seven, I've got to operate income, I've got to manage, you know, inflation, that gets me a pretty attractive real rate relative to anything we've had over the last couple of decades. So we are seeing some of that

shift and I think that's real and I think you'll continue to see that income. And by the way, it's also a historic point in time because post-COVID, companies, consumers, financial institutions, de-levered because rates were so low, so they've turned their debt out. So you've got actually a structurally good time to invest in these asset classes. So it's a pretty neat,

so you are seeing some of that shift. By the way, I don't think it necessarily means if you've got a lens longer than a week, a month, two months, you should get out of equities. I think there's some great stocks, a bunch of which have been repriced down. I just think you've got to manage your near-term beta a little bit and then think about, gosh,

what are the stocks I'm going to hold, and I'm going to hold them for a longer period of time. Like what kinds of stocks? If you can't talk about individual names, like I know you probably can't and don't want to, but when you say that, what are you referencing? So listen, I think at the end of the day, you've got to take, so technology is a great place to invest in equities.

But you think about today, you talked about AI. By the way, I think it's extraordinary, where we were a month ago or two months ago, because markets can only do one thing at a time. And then all of a sudden the sentiment changes But I think you broaden out how you think about it who are the companies that utilize data effectively That are maybe broader than the mega cap and so look at some of those companies the health care companies I think are super interesting around where using data effectively

Financials I think by the way not just us Europe I know they've had a great run into some of these European financials, some of the European banks, but you look at the multiples on those banks if you believe that Europe's got some infrastructure spent. Some of those multiples, even with the rally, are still pretty attractive. So I love the idea of doing that. And also, for the first time in years,

you know, diversify a bit more internationally, that, by the way, including Asia, diversify a bit more internationally, that by the way, including Asia, where there's some opportunities. This is, I think, the U.S. is going to be a little bit more uncertain than we've been used to. And for the first time, U.S. economy, we could have a transition that administration's comfortable with because we've got to bring the debt down and we've got to do a number of things in the country, that maybe we can just

transition a little bit. Maybe I can hide a little bit internationally while that plays out. Well, there's a lot there. I mean, you use the word transition just now. Is that what the Treasury secretary refers to as a detox? And we've already come down 10 percent in the S&P. We had a decent bounce, but now we're a bit unsettled again. Was that enough of a pullback? And to my first question, I mean, is that what you're referring to? That this is gonna be, the transition has the potential of being somewhat painful.

So, you know, I will say one thing, and I won't interpret how anybody describes this, but I will say one thing. You know, I've said this on the show before, what is the biggest risk to the system? We have too much debt in the United States. We've got to roll over too much debt. We've got to bring spending down. Oftentimes that requires a recalibration to do it. We've got to create a better runway around where we are in terms of our spend in this country. Bring the debt down, get the cost of the debt down to create a more

durable dynamic that, by the way, you'd feel comfortable with the currency as well. So those things can require a little bit of a transition. You know, by the way, things like the spend in parts of health care, we talked about there's some parts that are pretty darn stable, and things like robotics, data sensitive companies. But the amount of pullback you're going to see in some areas that got funding from the government, you know, whether that's data sensitive companies. But the amount of pullback you're gonna see in some areas that got funding from the government, whether that's hospitals,

whether that's parts of the education dynamic, and that by the way, have been huge hires or people over the last couple of years. So you see a little bit of pullback there. And I think you'll see that in the payroll data over the next couple of three months, that you'll see all of a sudden, what was it, 42% of the jobs created for the last three years have been healthcare and education. Think about the funding dynamics, how that's transitioned.

That's going to be different going forward. 22% have been leisure and hospitality. Immigration solved a lot of that. You're able to operate restaurants, hotels at full capacity through immigration. That's changing. So there's some things that are gonna evolve that are gonna be quite different than we saw over the last couple of years. And we just gotta watch that play out for a bit.

Have you raised your own alarm bells on recession? So I think at the moment, so I think we were talking about last time we were on, I think the error bands have to move out a little bit around how you think about growth, how you think about what's the transmission of tariffs into inflation. And I'd say a couple of things. What's happened is companies sitting on their hands, I'm pretty confident the consumer will pull back a bit here, but consumer will be fine. What I'm not, what in the near term, the reason why I think you have to increase the risk

of a slowdown to a higher proportion today or a higher, higher part of your calculus is companies are going to sit on their hands. If you think about CapEx, you think about R&D, you think about M&A, if that's going to be postponed, then, and by the way, you're talking about a big amount of growth driver of the economy, then I think you've got to say, gosh, we may have a quarter or two that are slower than originally anticipated. By the way, we came in at the beginning of this year. It was all about animal spirits, and it seems like it's moved to animals and hibernation

from animal spirits, and that can translate into a bit slower growth for a couple of quarters. So on that note, and before I let you go you know bankers have been sitting on their hands and animal spirits to your point really hasn't gone anywhere. We do get this IPO we think tomorrow core weave which is important on a number of levels for a sentiment barometer on AI and certainly on the deal market and IPOs and companies that are allegedly going to be coming to market in mass, at least we thought this year. How closely will you be watching it on both accounts?

Meaning the deal, this deal that comes to market? Yeah, the IPO, not only for what it says about where we are in the AI trade, but where we are in terms of more capital markets activity, the animal spirits you just mentioned. Yeah, so I've spent a bunch of time looking at, you know, so we do every major company that comes to market and listen, I think you got to watch it. I tell you know, I find the sentiment dynamics including I was just described on the show, you know, there are some pretty, pretty positive aspects to this company that don't get talked about as much when the sentiment goes the other way. So, but you know, I think it is an indication of sentiment's changed and I think we're going to be in this period. So yes, you watch it, does it give you a reading for sentiment? But then like always, you know, things really

change and so I wouldn't put so much stake in gosh, how did this one deal go at this particular point in time but but I you know and I think sentiment will change particularly about AI and not just AI automation data etc but so we watch it but but I don't think you can overplay one deals impact on the whole market and a bunch of good companies that will probably get drawn down. I'm sorry but it does come on the heels of like Joe Tsai for, talking about a possible bubble in the whole data center trend, which is the latest, greatest part of this trade.

That's I guess what I'm getting to. By the way, it's totally fair. We're going to learn over the next few months in terms of how do you think about infrastructure, the companies that are in energy infrastructure, data center, cloud. So we're going to learn a bunch about that. You have to have a little bit more skepticism about the amount of aggregate spend, but I don't think you have to have any skepticism about the amount that's going to be spent on automation to create synergies in your business, cost reduction in your business,

productivity enhancement. And that is real. And no matter how you think we're going to get there from an infrastructure development point of view, that is, we're not going back in terms of in terms of that dynamic. We'll leave it there. Appreciate it. As always, Rick Reeder, thank you. Be well. Thanks. Black Rocks, Rick Reeder joining us here on Closing Bell. Now let's bring in Lauren Goodwin of New York Life Investments and Drew Mattis of MetLife Investment Management. It's good

to have you both. What is your, Lauren, current view on the markets in context of digesting more tariffs? We'll see if we, you know, this IPO, how it goes, and what that says about where we are as well. I'm one of the folks who's saying that it's already time to move, to make allocation changes. And I see a lot of investors sitting on their hands. Look, I don't expect that market volatility is going to calm

until we have more policy uncertainty. And a lot of us are looking to see if we get that next week, whether that means... More policy certainty. Certainty, whether we get that next week or not. I'm not really seeing it. I anticipate that this volatility is here to stay with us.

And I agree with one of the things that Rick just said, which is that these capital-intensive megatrends are with us. They're taking off, they're here to stay. And so in that environment of more volatility, likely more capital intensity, a little more inflation awareness, that's a portfolio allocation,

a set of rebalancing themes that probably would have been true even two years ago if not for the AI trade. And so this is a move towards reducing beta inequity, broadening geographic diversification, leveraging credit as an opportunity to add income in a portfolio, and adding inflation-aware asset classes. So, Drew, do you see it the same way? I think the lesson from these conversations thus far in our program with both Rick and Lauren is, I need to change the way I was viewing this market from beginning of the year until now.

Am I asset allocations are gonna look far different than I probably thought they would just a few months ago. Well, I think it depends on whether you're talking tactical or strategic allocations. I think Rick made a point about the short term versus long term. And I think short term growth risk is overwhelming default risk. And so you're seeing you have to take that into account. And so you're seeing, you have to take that into account. Longer term though, I think, you know, the AI trend and the capital intensive nature of the AI trend

and what AI can mean for long-term productivity and potential growth in the United States is really the overwhelming, you know, the tides coming in on that. And we're gonna see kind see what it can buoy as it comes in. I think one of the things people are really losing sight of is the ability of AI to improve worker quality, and taking those mediocre workers and making them better workers, and

taking the better workers and making them great workers. I think if you take that and take it across the entire US economy, you're really looking at a trend productivity moving higher in a sustained way over a long period of time. But between now and then we have to get there. And so in the short run, it's a matter of kind of defending what you have. In the long run, you have to think about

where you wanna be heading and how you wanna position for that. Lauren, I think one of the most difficult things for investors right now is doing what you're supposed to do. Looking through some of this to what might be the good stuff, as I've been saying on our show recently, of the tax cuts and the deregulation, some of the things that are more allegedly going to help businesses do better and the markets do better as well.

Do you find it's difficult to do that? Do you feel like the bad stuff is going to last longer than you thought, the uncertainty, some of the chaotic nature of things, the tariffs, the trade wars, geopolitical stuff? I certainly see it being very, very difficult for our clients. This is the time where you're getting phone call

after phone call about, you know, should I be in cash? How do I manage my risk in the near term? But let me tell you, as an economist, this is in many ways such an exciting way to invest, not because of all the day-to-day drama, although that's exciting as well, but because we really are looking at three- to five-year trends. And I think looking at some of the comments that Drew's making around the durability of AI, just as an example, many of the themes that we're discussing, the debt level in the US, the strength of the dollar, globalization, AI,

these are really closely interconnected. These are a function of business decisions and government decisions that have been made for decades, and changes in those decisions have been sort of underway for quite some time. If you take just one example, we'll use AI because we've been talking about it, chat GPT changed the way the world can interact with a computer, but artificial intelligence starts in the 50s and it's

really the innovations and processing power and computing that get us to the point where we can use that technology, make that real. That's closely linked to government investment in the way we spend our money, et cetera. And so as an economist looking at these structural trends, those are meaningful investments that we can make now. All right. We'll leave it there to be continued. Lauren, thanks. Drew, we'll see you soon.

Thank you. We are just getting started here on Closing Bell. Coming up next, legendary sports mogul Tedonsis is standing by with his take on sports team valuations sports media rights. Oh yeah. Alex Ovechkin chase for history. We're back after the break. Welcome back. Valuations for professional sports teams are showing no signs of slowing down, especially

after that $6.1 billion deal for the Boston Celtics just a week ago. And our next guest sees even more upside ahead for his growing DC sports empire. Let's bring in Ted Leonsis. He's the founder, chairman and CEO of Monumental Sports and Entertainment, owner of the Washington Capitals and the Wizards. It's great to catch up with you again. Thanks for being here. Great to see you. Let's start with some Capitol stuff before we get on to the business stuff. Six goals away. Ovi is from immortality. I mean, what has it been like for you to go through this

and to watch this his entire career? And now he is on the precipice of history. He's a really once-in-a-lifetime kind of athlete and human being. His family kind of adopted our fan base and family and I think he'll be the only player in a big four sport to start his career, win an MVP, win a championship, break an all-time record with one franchise and our city and fans just adore him and feelings mutual with him and his family. Yes, yes we do. Yes. I can speak as one.

You know I was thinking about this and what but a couple seasons ago it was like the franchise is aging and it's probably going to be a rebuilding effort and all of a sudden here we are with the best record in the National Hockey League. And I was wondering if there's a business lesson somewhere in all of that that you can impart on our viewers. Succession planning is really, really important. You know, board of directors, public company, I serve in several boards. That's the most important thing you can do. And we really did very, very smart succession planning

in our front office. We have the youngest coach in the NHL. We have the youngest general manager in Chris Patrick. And they've done an unbelievable job of being able to invest for the future, but to leverage the infrastructure and the players that we had. And yeah, we have the best team, best record right now,

and someone going after an all-time record, and the business has been unbelievably strong. But playoffs start in a month, and the great thing about pro sports is when the playoffs start, nothing matters. Everyone goes to zero and zero, and that's when the nerves start to really kick in. Yeah, the slate is clean when the playoffs begin.

All of this, of course, is part of monumental sports. You own the arena, which obviously helps. And the network, we bought the network. And the network as well, which is one of the reasons why, when you look at valuations, what do you see? Are you undervalued, what do you see? Are you undervalued or do you feel like there's a lot more upside?

We're not public companies yet, although I do have partners and I brought in the Sovereign Wealth Fund as an investor. The Qataris. Yep. And we have very sophisticated corporate structures now. And the league is the level of sophistication. And as they've brought in private equity funds, we have to start looking at our businesses

like we're pre-IPO. And I say, that doesn't mean we're going public. I was gonna ask you about that, of course. But we have to start to look at how we corporately develop and that we can reward our shareholders and we can grow the business. I'm up here for the NBA owners meeting and it feels more and more like it's a hundred to two hundred billion dollar enterprise where we have a strategic plan on how will we digitize

every nook and cranny of the business? How will we globalize? Today we talked about with enthusiasm the expansion opportunities in, let's say, Europe. That there's not a professional basketball team in London or in Paris. After we went to the Olympics, Adam came back, Adam Silver came back and said, there's unbelievable enthusiasm from fans, from sponsors, and that's

a good growth vector. As we changed our media partners and we started to be more looking at digital expansion, and it's the Amazons, the Alphabets, the Microsos, all of their growth is coming from outside the U.S. We have NBA Africa. Africa is going to have a quarter of the world's young population. It is the most strategic continent. And if you look worldwide, 9 billion people on the planet, 2 billion people have said basketball is my favorite sport. So I think the NBA right now is a growth stock.

I think NHL is a growth stock. And we're blessed to be in a big market and own NHL, NBA, and WNBA franchise. How are you thinking about the idea of potentially going public at some point? I mean, I see you at the teams, the building, the media network, and MSG's public. How are you thinking about it? Well, I watch MSG very closely, and I watch Liberty Media, and they've overcomplicated, if you will,

how they present themselves to Wall Street. I come here often, and you have to have a simple message. And so I want to make our company understandable, to show that we're a growth company and that we are comparable. It's not hospitality, it's not real estate, it's software as service. Our customers renew at 80, 90% every year. We get increases, balance sheets of our customers are bigger than ours.

80% of our revenues are contracted. So, you know, analyst community, they like predictability in the revenue stream. You get this. I mean, you're a former tech guy. I mean, you understand. And you've long made the connection to a SaaS type business and use that as kind of the model of how you think

about yourself. And we have commerce built in. We're a media business, a digital media business. And I've tried to make Monumental a platform company. I think the NBA and the NHL are becoming platform companies. We have the WNBA, we have the G League, we have NBA 2K, we sell merchandise, we can syndicate out and go to Europe and go to Africa, but it's on one platform with one Kind of leadership view of it. We can get financed much easier much less expensive by being on one platform

so We're an underappreciated Asset class even though these teams seem to be valued very highly but when you look We're no different than Oracle or Salesforce.com. We get multiples 10, 12, 15 times top line. We're making R&D investments just like software companies. So I view the next, we just had my 25th anniversary of owning a team, and I think the next... We just had my 25th anniversary of owning a team,

and I think the next 25 years, the appreciation could be even greater, but it's not gonna be the consistent growth. I think you'll see some bumps in the road the next couple of years. Everyone's awaiting, what will the IRS do? How will we handle depreciation? Right, some potential changes. Everyone's looking what will the IRS do, how will we handle depreciation. Right, some potential changes. Everyone's looking at the local media industry. We

have great arrangements with our national and digital partners, but the local media business is under a lot of pressure. That'll change as we change out partners or we become the platform and we go direct to the consumer with vigor. If there's a day you're up on that podium this chair is available. I'm just saying you be well and best of luck to your franchises and your businesses too. Great to see you. Thanks for being a fan. All right Ted Leons is joining us right here at Post 9. Up next the Dean of Valuation is back. Aswath Demodarin will get his take on the IPO market ahead of Coreweave's pricing. We're back right after this.

Welcome back. Check this out. Shares of Applovin. They are tumbling after Muddy Water has disclosed a new short position in that stock. It follows previous short reports from Fuzzy Panda and Culper Research questioning the integrity of Applovin's AI powered Axon software. We've been watching this stock a lot related to that momentum trade.

We have reached out to the company. We'll bring you any updates of course as we get them. Coming up next, cautious on core weave. The dean of valuation, Aftabat De Moter, and he gives us his take on that IPO before it prices tonight. We're back on the bell right after this. Welcome back core. We've expected to price its IPO after the bell today. Our next guest cautious about that offering the Dean of Valuation Aswath de Motor and of NYU Stern School of Business joins us now.

Welcome back. So you're watching this pretty closely. I gather. What are your thoughts? It's less about the company and more about what where the AI trade is going from this point on. I mean, the way to think about it is a year ago, CoreWeaver had gone public. The words AI and NVIDIA would have been enough to carry it over the line. The fact that it's not able to do it now is an indicator that the momentum of just trading based on the words AI or NVIDIA are not working anymore.

I think that's healthy. I think it's all, you know, when you just push up pricing based on buzzwords, you're asking for trouble. So maybe this coming down to reality is a good thing, but Core Weave is going to be the target of that coming down. What's unhealthy, according to some, is, you know, part of the A.I. trade.

Josai, for example, talking about the possibility of a bubble in data center. I'm wondering how you see that. I think that collectively AI has been bid up too much. I mean, I've said that about Nvidia, I've said about data centers. We've gotten way ahead of the game. I mean, the AI product and service business,

which ultimately is what has to pay for all of this, has not taken off in any substantial way. I'm hard-pressed to think about any company making significant money from the ad product and service business. So I think from that perspective, investing all this money up front, and I think you're getting a bit of the backlash when you look at the Metas and the Microsofts as well, kind of pulling back, is that recognition that maybe this was too much money spent too far in advance of the actual evidence that

the market exists at that day. I mean, do you think that the stocks, which have already had a pretty sizable correction, especially ones in the momentum area, we were just showing up love in before we came to you, it's getting crushed today. There are so many other names that went straight up into the right and now have gone straight down in an elevator. I think the sobering up started around September of last year

and I think the deep sea story, even if it didn't stand for long, kind of brought people back even further down to it. So this is not something that's developed in the last few weeks, it's really more over the last few months. And it's part of, I think, what you see almost every buzzword in history in the last four decades as a point, I call this the bar mitzvah moment where people wake up and say,

okay, there's a lot of promise here, but show me something that I can, that I can hang my hat on. So I think we're at that moment in the AI business where we're looking for some evidence that that product and service business will be trillions of dollars rather than hundreds of billions of dollars.

Lastly, before I let you go, I mean the other big piece of news related to you, you sold all your Tesla. You don't own that stock anymore. You've cut back over time in video, you have some of the other Mag-7s, but this one's no more. Why? No, I tell people, look, this is not a political trade for me. I love Tesla. I like Elon Musk. This is not a... But I don't think a company that essentially takes half the market off the table, because that's effectively what you're doing when you become a political star. That's not good for its story. So I'm

willing to buy into the notion that robot taxis and an optimist can carry Tesla but I think right now looking at Tesla the story has been damaged whether it can come back from the damaged stories I think what every investor is looking at. Well that that's the key question, whether the damage that you claim has been done is irreparable or not. Sounds to me like you're, you, that's an open question for you.

And that for me is the big concern with Tesla. And the stock I mentioned as my replacement is a stock that I've historically avoided because of the Chinese company and the Chinese government is very much part of the story But now you've got two big EV companies both of which have become political stories So I don't have a good reason for staying with Tesla and avoiding BYD anymore Toyota is the one you like

Toyota won't for a long time because I think that hybrids are going nowhere and in many ways the last couple of years you've seen a comeback for the hybrid, the Prius. I see a lot more Priuses now than I did just a year ago. On a day when we're talking about auto tariffs, everything comes full circle from the beginning of the show. Professor, we'll see you soon. Take care. Thank you. That's Professor Aswath, the motor.

And up next, what to watch for when Lulu reports an OT inside the market zone. Welcome back. We are in the closing bell market zone CNBC senior markets commentator Mike Santoli is here to break down these crucial moments of the trading day. Kay Rooney on what's behind the move in SoFi and Robin Hood. Courtney Reagan looking ahead to Lulu in overtime today. Mike when you look at this market a lot of outsized movers United down 5 percent Delta is down pretty big Palo Alto is down a have a high beta to sentiment of the moment. Travel stocks are kind of among consumer cyclicals, the ones that sort of whip around the most based on if people are feeling better

or a little bit worried on a given day. And then of course the Palantir, those are kind of the adrenaline favorites. So it's all netting out to sort of not so much, a very hesitant market, it's not really spry. We did actually have this pullback this morning that exactly touched for half a second Fridays low. And I think a lot of the sort of mechanized systems

like, oh, great, we filled that gap. Let's go. We're off to the races. Now, we're not off to the races, but we are holding steady. It's a test of how far we can go with oversold conditions, sediment being pretty negative right now for a couple of weeks, and then just a steady state of the economy. It's not falling apart yet in the data and and also trying to see if we can just separate out directly tariff impacted stocks from everything else. So far tentatively it's Scott. So Sofie, if you take a look at that name, down about 6% into the close. It is on the back of Robinhood launching a competitive banking product. So Robinhood earlier came out with a suite of wealth management offers. It does include a more traditional checking and savings account with a 4% yield. They're offering transfer bonuses too.

So really trying to incentivize customers to move money from other banks and brokerage firm. It all raises some questions about more competition out there for SoFi growth prospects. There is also major overlap in some of these younger investors in the audience, the both of those companies target. And then you got the market factor investor sentiment. Some of these high beta names that Mike mentioned also weighing on SoFi and other growth names Coinbase lower today too.

And Robinhood not immune. It is down slightly heading into the close despite some of those announcements in addition to banking that I mentioned they're launching a low-cost robo-advisor plus an AI investing assistant Scott. All right Kate thank you Kate Rooney. Courtney Reagan brutal lately for Nike what to expect now from Lulu and OT? Yeah you know Scott so Lulu Lemon might be on pace for its best week since December but shares are still down 11% so far this year, make a good point with Nike. Now that down 11% is in line with the retail XRT ETF, but it's much worse than the broader

S&P 500. And so while Lululemon had a pretty strong pre-announcement in January, according to B of A, it's actually pretty typical for them and then often followed by a beat when the full report is out. We'll see if that happens today. But it likely doesn't really matter either way, actually, because the street squarely focused on the current trends. So Needham tells investors it believes trends have improved for Lululemon in recent weeks.

So any slowdown in January or even February can be overlooked. But Jeffries Randall Koenig, he's not so sure. He expects Lululemon's US sales could fall this year in 2025 for the first time in company history outside COVID. His analysis along with data from Placer.ai suggests that web and Lulu store traffic is slowing and potentially starting to underperform peer.

So there's kind of a lot to look for in this report, Scott. We're gonna look through the tea leaves. All right, court, thank you very much. That's Courtney Reagan. We have less than two, about 90 seconds to go. PCE tomorrow. Yeah. I think people are feeling somewhat more comfortable about it.

You can kind of predict it based on some of the other data that we have. A benign number would at least, I think, get one concern out of the way, maybe lessen the effect of some of the hawkish Fed speak we got this week about tariffs. By the way, one-year market-based inflation expectations have really ticked higher. So there is this way that the market is bracing for some kind of a surge in stated inflation, but it's kind of hoping that the Fed is more or less going to let that be. And...

Look at yields. Look at yields lately, Mike. Yields are firm. They are. Longer-term yields are firm. I think it's, again, OK at 4.3. At 4.7, it starts to get to be a little bit of a squeeze. So it is, you know, it's kind of this, again, this delicate equilibrium that we're dealing

with right now. And, again, just in terms of the hard data, I mean, weekly claims were fine. So every day, you have to go through the claims were fine, you know, so every day you have to go through the checklist and say, you know, do we see signs of more than just a growth scare, more than just a sentiment bust? And not yet, I guess, is the answer. We are at these kind of funny levels, we're only 3 or 4 percent above the lows that we got in mid-March in the S&P 500, so it's got to start to get moving soon.

Semi's capital market stocks, they're still weak right now. Okay, good stuff. I'll see you tomorrow. So we'll go out, we're on the road. We'll see you tomorrow. We'll see you tomorrow. We'll see you tomorrow. We'll see you tomorrow.

We'll see you tomorrow. We'll see you tomorrow. We'll see you tomorrow to start to get moving soon. Semis capital market stocks. They're still weak right now. Okay, good stuff. I'll see you tomorrow. So we'll go out red and pay attention to any four week news coming in the next couple of hours. We'll obviously have it for you as it comes to us. In the OT with Morgan.