Closing Bell - Closing Bell Overtime: Cohestiy CEO On Closing Key Acquisition; JPMorgan Global Head Of M&A On Dealmaking Activity Turnaround 12/10/24

Episode Date: December 10, 2024

After stocks slid into the close today, our panel discussion with Adam Crisafulli of Vital Knowledge and Patrick Fruzzetti of Rose Advisors give you the market trends you need to know. Anu Aiyengar, J.P. Morgan's Global Head of M&A, shares insights on the state of deal-making and the driving force behind the recent flurry of announcements. Plus, interviews with Howard Hughes CEO David O'Reilly on meeting house demand and Cohesity CEO Sanjay Poonen closing the deal for Veritas’ enterprise data protection business unit—and what’s next on the road to an IPO. Key earnings reports from GameStop and Dave & Buster's and a deep dive explores how Taylor Swift’s record-breaking tour is transforming the entertainment industry.

That bell marks the end of regulation. Greek American Issuer Day ringing the closing bell at the New York Stock Exchange. Phillips Edison and Company doing the honors at the NASDAQ. And the headline average is closing out with small moves. But it's a different story beneath the surface as Alphabet soars while names like Oracle, MongoDB, and Chipnames pull back. That's a scorecard on Wall Street, but winners stay late. Welcome to Closing Bell Overtime. I'm John Fort with Morgan Brenner. Well, coming up on today's show, more M&A rumors.

In a busy week for deals as Walgreens jumps higher on a report of a sale to private equity, JP Morgan's global head of M&A will join us with her outlook for mergers and acquisitions in the new year and under the new administration. And speaking of deals, CEO of data protection company Cohesity will join us to talk about news that his company just closed its merger with, in a way, competitor, but industry partner, we'll say, Veritas. But first, let's break down the market action today. Joining us now, Vital Knowledge founder Adam Crisafulli and Patrick Frizzetti, managing director with Rose Advisors at Hightower.

Guys, good afternoon. Patrick, investors expect a 25 basis point cut from the Fed coming up, but economic activity, labor numbers have been coming in warm, if not hot. So how much risk do you think there is to stocks, not just around CPI itself, but the possibility that after December, there might not be as many cuts as investors are pricing it? Well, the market certainly stretched to this point. And I think, you know, with CPI coming out tomorrow, PCE later in the week, that'll certainly give a better indication of where we stand in regards to inflation, at least at the present time. But, you know,

the markets, it's very benign macro backdrop, as you said, both monetarily and fiscally. Financials are performing pretty well, which is always a healthy sign. So, you know, going into the end of the year, I think, you know, could very much be positive. but so much lies on future policy decisions going into 2025, whether it relates to trade or other fiscal policies and immigration policies, of course. Right, right. Adam, how much of today's action is the flip side of what we saw about maybe a week ago, the downside on Oracle versus that upside on Salesforce.

Yeah, I think definitely tech in the very near term is facing a very high bar. You know, we're coming off a week last week, like you mentioned, a pretty blowout earnings reports, Salesforce and Marbella being the big ones. Oracle's bar was almost impossibly high. You know, it's hard to say that fundamentally the company is really performing poorly. Management on the call was as bullish as ever. But the bar is very high. We're going to hear from two more big reports this week with Adobe Wednesday and then Broadcom on Thursday.

So tech, it was kind of a weird session. Tech was very strong out of the gate and then faded very hard. And then you had kind of the equal weight S&P, which was extremely weak out of the open, rebound a little bit off its lows. But, yeah, definitely tech little bit off its lows. But yeah, definitely tech facing a very high bar. The macro environment, we heard from a bunch of financial executives today at the Goldman Conference, and all of them pretty much across the board

were pretty optimistic about what they're seeing on the ground as far as just strength of the consumer, corporate health, et cetera, corporate optimism, which is becoming more bullish into next year, especially on the M&A front. You had two big deals get blocked today. One of them formally blocked, the other one speculated.

Corporate America is very hopeful that the Trump 2.0 regime will have a more permissible M&A environment. So that's one of the big drivers of corporate optimism. Yeah. And that's something we'll be talking about a little bit later this hour and perhaps more questions than answers still on what that policy is actually going to look like under Trump 2.0, although, as you mentioned, a lot of optimism. Patrick, what are financials signaling to us as you do look to 2025 and parts of the market that look attractive, especially given the fact that under the surface there is a lot of churn? I mean, look no further than the equal weighted S&P and some of the pullbacks we've seen in certain sectors, in certain areas of the market that are not big tech right now. Yeah, well, look, when I look at the market, I think you can always find good companies, good businesses to invest in.

And I'm not talking about trading. I'm just saying looking at over long-term cycles. And you'll oftentimes get opportunities and take case in point. Whenever there's a comment in the headlines, take, for example, when Trump came out and said, we're going to institute tariffs with Canada and Mexico beginning on day one. Well, you have to look at the probability of those things really happening, or is it more just rhetoric and potentially used for future negotiation? And, you know, one company that we own is Canadian Pacific. They own all the rail line down from Mexico through North America up to Canada. And I think there'll be big beneficiaries of deglobalization, something, frankly, that Trump supports. And if they get through any of these talks around tariffs, I think they could be a huge beneficiary of nearshoring and onshoring. And they're at a

reasonable valuation. So there's names like that, I think, within the market. Even if things, certain sectors are seemingly overpriced, I think you can always find good ideas. And that would be one, I think, pretty good example that we've taken advantage of. Okay. Adam, the fact that the S&P 500 is up, what, 28% this year? It's headed for the second straight year of 20% plus gains. The first time we've seen this since the late 1990s. I mean, one of the reasons is that analysts expect S&P earnings to rise 17% next year. That would be the highest reported number since tracking began in 1996. Can we actually achieve that? Or when you do start to talk about things like deglobalization and tariffs and trade policy changes and a strong dollar, does that actually

become a higher bar even than what is suggested right now? So, you know, I think based on everything we hear from corporate America and management teams, you know, the current macro landscape is very positive and you do have several tailwinds heading into next year, including a more supportive Fed. But I think you raise a great point as far as just expectations being very high. Valuations are very high. You know, I think if you kind of strip out some of the super cap tech stocks, valuations like a little bit more reasonable, but definitely there's a lot of optimism already in the marketplace. And that absolutely is a risk as we move into next year. You know, I think people are optimistic for a reason. There's a lot of justification for, you know, for a relatively bullish outlook

as we head into next year fundamentally, but definitely there's going to be a risk. And you saw that with Oracle or, you know, any type of modest shortfall can have an outsized reaction on the downside because sentiment, complacency, positioning is all at relatively frothy levels. All right. Adam, Patrick, thank you. Well, we've got a news alert on GE Vrnova. Seema Modi has details. Seema. Hey, John. Ahead of its investor day, GE Vrva declaring its first ever dividend of 25 cents per share and announcing a $6 billion buyback. The company is also raising its financial outlook. 2025 revenue guidance of $36 to $37 billion.

That's been narrowed to the upper end of its initial range. And its free cash flow targets has been increased significantly as demand continues to soar amid growing demand from data centers. Data center demand in general for electricity and power has put this company, GE Vernova, in a highly coveted position given its market share in natural gas and wind turbines. Vernova does count the big hyperscalers as customers. And CEO Scott Straszak here in the release saying he's planning about $9 billion in CapEx and research and development investments through 2028. Shares are moving higher in overtime and are up about 145 percent since spinning out from GE back in April, Morgan. All right. I guess making the case here that it's better apart than together. Sima Modi, thank you. With shares of GE, Vernova jumping right now up almost 3 percent here in

overtime. Let's turn now to Senior Markets commentator Mike Santoli for a look at the homebuilders. As Toll Brothers drags the sector down today. Mike. Yeah, Morgan, homebuilders down 2% as were semiconductors as measured by the Philadelphia Semiconductor Index. And this is a kind of a duo I like to keep track of as a bit of a bellwether on these sort of secular long-term growth themes, also benefiting from scarcity. They were leaders coming out of the low in the market in late 2022. Here's where they stand from the end of 2022, both a bit below their highs and really having done nothing for around eight months.

Semis in particular have rolled over pretty hard. The big question for the market is, are they just kind of reloading and consolidating those gains? Or has the story changed enough that they're not going to be able to be leadership groups going forward? I don't think that this chart really tells you the answer to that. They've been sitting on this shelf for a little while here. But obviously, the market itself, the rest of the market has carried on higher without them for the last several months. Now, within homebuilders in particular, because of all the optimism about the advantages of new home construction over existing home sales because of supply issues,

the valuations on a price-to-book basis for the homebuilders have reached basically historic highs. This goes back to the global financial crisis when they were super cheap and financially impaired. And you see that they've kind of gotten up to these levels they haven't spent a lot of time with. So we have had a pullback here. Obviously, if interest rates come down, mortgage rates come down, consumer confidence is up, and all of a sudden you have a boom in home construction activity again next year, obviously this can be justified. But it's going to take something, I think, to convince new buyers of the stocks that they are well valued, Morgan. How much does hinge on what we hear from the Fed when we get a rate decision next week? I think, to convince new buyers of the stocks that they are well valued. Morgan, how much does hinge on what we hear from the Fed when we get a rate decision next week?

I mean, there's already, you know, the expectation price in the markets that you're going to get a so-called hawkish cut. But the trajectory is less than clear when you look to 2025. For sure. And, you know, of course, it's the longer term bond yields that are really going to more dictate what mortgage rates do. And they've been sticky here in the 4 percent plus area. So it's unclear if you don't have a clear path towards several near term rate cuts in the first half or three quarters of next year. Just how much lower can longer term yields go? And obviously, if we have wage growth where it is and and maybe again, you have this sort of confidence issue perking up. And even for that matter, you know, existing home turnover picking up as well. You know, the story can still work.

I just think that it takes a lot for people to be persuaded that the story is quite as bullish as it was a little while ago. All right. Mike, thanks. Mike Santel, you'll see in a bit. GameStop earnings are out. Stocks off the overtime lows. Julia Boorstin has the numbers. Julia. Mike, thanks. Mike Santel, you'll see in a bit. GameStop earnings are out. Stocks off the overtime lows. Julia Boorstin has the numbers. Julia. Hey, John. GameStop reporting adjusted earnings of $0.06 per share and $860 million in revenue. We do not compare this to analyst estimates because there is so little analyst coverage for this company. But for one point

of reference, the $860 million in revenue is compared to $1.1 billion in revenue in the year-ago quarter. Back over to you, John. All right, Julia, thanks. We've also got a news alert on GM. Steve Kovach has details. Steve? Hey there, John. Yeah, GM is getting out of the robo-taxi business. We just got a release here from General Motors saying Cruise, that's a self-driving division that it has a majority stake in. They're going to refocus that team to focus on personal vehicles, autonomous driving, as opposed to building the fleet of robo taxis that had been testing out there in San Francisco before that accident that involved it hitting a pedestrian out there in San Francisco. Since then, they've scaled back their plans, tried to relaunch, and now it looks like they're just completely getting out of this business.

Also in this press release, they note that GM did own 90 percent of cruise, and after some restructuring with shareholders of cruise, it'll own more than 97 percent of that self-driving division. And a lot of those teams, it looks like, are going to be restructured just to focus on GM personal vehicles, not a fleet of robo-taxis. We see shares reacting here on that news up 3%, guys. We're going to take a look at Tesla and see if there's any reaction there as well. Yeah, that's another one. All right, Steve Kovach, thank you. We will talk more about the housing industry ahead when we're joined by the CEO of real estate developer Howard Hughes Corporation

with a look at how rates, the election, and a national housing shortage could all impact his business in the new year. Mobileye, too, while we're talking about robo-taxis. But first, we've got a big interview with J.P. Morgan's global head of M&A in a week that's full of deal news and speculation. That can't miss conversation right after this break. Welcome back to Overtime. Shares of Walgreens soared after a Wall Street Journal report said it was in talks to sell itself to private equity firm Sycamore Partners.

It's the latest headline in the M&A space after yesterday's merger news from ad giants Omnicom and Interpublic Group, along with an insurance deal, speculation about a takeover of Hershey's. We just keep on going down the list over the last 48 hours. And moments ago, it was reported that a federal judge has blocked the Kroger and Albertsons deal and that President Biden is set to block the U.S. steel Nippon deal. That's reportedly the case. Joining us now on set is our own Leslie Picker, along with Anu Iyengar. She is JP Morgan's global head of advisory and M&A.

Welcome to you both, Leslie. Thank you, Morgan. Anu, maybe we start there because those are a lot of headlines, and it almost feels like two steps forward, one step back. How are companies digesting the current environment in terms of whether or not they have appetite to do deals in this environment? Or, you know, is 2025 looking any brighter, given the whole antitrust environment? Oh, there's certainly a lot of M&A news this week. We picked a good day.

We did. The animal spirits are certainly back, and the optimism in the business community is extremely high. The outlook for the debt markets, the equity markets, M&A markets, all for 2025 pretty good. That's on one side, right? And why is that? Because people expect interest rates to continue to decline, more IPOs to happen, and the regulatory framework to be less onerous, broadly speaking, not just antitrust, but broadly speaking.

All of that bodes well for M&A. And you've seen a bunch of deal activity because sometimes people say it's better to trade on the hope than wait for the reality. Right. And so yesterday you saw a bit of a merger Monday. And there's more kind of rumors and activity that you spoke about today. On the other side, there are deals that were announced two years ago, three years ago, that have been waiting for a very long time period. And a series of them that you've seen that are not getting completed. Whether it's the announcements from today or earlier on, there were a couple of deals, big deals, which were blocked also. And so, and you combine with that, that we still don't know exactly what policy is going to be. You know the direction of policy. There is an expectation that all of these things will happen,

but the exact magnitude of that is unknown. But having said that, the optimism right now in the business community seems pretty high. I'm glad you brought that up about policy and the direction of policy, because just earlier today on Squawk Box, Jonathan Cantor, who's the outgoing Biden administration head of antitrust at DOJ, had this to say. Have a listen. If you look at where antitrust is today versus 30 years ago, it's night and day. We've seen a shift in our policy. And that's because I think we've seen a shift in how the country views corporate concentration.

I don't think that's going to change. How it's implemented will shift and it'll evolve just as it has from the last administration to the current administration. But I think we've seen a great deal of continuity, including from the Trump administration to the current administration. But I think we've seen a great deal of continuity, including from the Trump administration to the Biden administration. And I expect we'll see an evolution to continue. And I think that's healthy. So basically, Cantor saying that he expects this path forward in policy to essentially continue. And it's worth noting that some of the big antitrust suits against the big tech companies actually started under Trump 1.0. And even just last week, Trump picked Gail Slater to head the Justice Department's antitrust division. She's seen as an antitrust hawk. So it raises the question,

just how lenient, potentially, amid all the animal spirits and all the chatter, do we actually think the Trump administration is going to be to the most dominant companies making deals moving forward? Yeah, only time will tell. And one interesting thing about this Trump 2.0 is, other than previous administrations, it's not all the same people in the same seats. In fact, there's really nobody in the same seat. Everybody's new. So you can't look at a previous track record and say it's going to be the same.

And a lot of the policy outlined leading up to the elections all point to a less government role in business. So I think that is what is driving a lot of the optimism. How exactly it will pan out, time will tell. How would you characterize valuation right now between potential buyers and potential sellers? Because that was blamed for activity below historical averages for a while, especially in the sponsor community where they were buying assets in 2020, 2021 at such high multiples. And so the market hadn't been able to keep pace. But now you've got the broader markets at least at record highs, even if it's maybe not as broad as someone like it. Do you feel like that gap is narrowed to the point where we could start to see more activity, particularly in that sponsor community? Yeah, I think one valuation, you have to be a lot more

nuanced because when you look at the overall market, it looks like it's trading at all-time highs then you separate out the seven mega tech companies and look at the others there is a lot of companies which are not trading close to their 52-week highs so you can still find mispriced asset opportunities and take private opportunities in the broader market. Then you add on top of that, there is 28,000 plus portfolio companies with private equity hands, which has been in there for four plus years looking for monetization. And when you have an attractive IPO market, lower debt, and an attractive M&A market, all of that bodes well for more monetizations because they have held these assets for some period of time and need to return capital and have to deploy capital. You can only deploy capital once you return some capital. So that's

a good cycle that's kind of coming into effect. And then the last piece I'll add to that is the valuations in the U.S. market compared to Europe is while you're seeing all these animal spirits in the U.S., in Europe, the outlook and the market valuations are still pretty depressed. Hmm. You mentioned the expectations of lower rates as being one of those ingredients fueling the animal spirits. What if rates don't continue to decline as much as some expect? And for multinational M&A, what if it's not U.S. regulators and courts that are a real obstacle? What if it's EU and China? Yeah. And so China, I think, has not been a big part of the M&A market now for

several years. And in Europe, more of the trade is related to the valuation differential between Europe and U.S., as well as we've seen decade-high levels of U.K. as a target. So U.K. as a target, because, again, of this mispricing, because when you look at the FTSE 100 companies and look at their valuation versus the S&P 500 there's almost a 10-turn differential in PE which is one of the highest that you have seen but the companies itself majority of the earnings of those companies actually come from outside the UK. So it's just been an interesting dynamic, both with companies that are getting taken private or merger activity in the UK, as well as companies looking at corporate clarity and taking advantage of the US markets through spins, splits, mergers. Again, as long as you can make your way into one

of the US indices, because being a part of the S&P 500 in some ways is the price, because that's where you see the valuation differential. You're absolutely right to add the note of caution, though, that it's not that it's all going to be, you know, sunshine and rainbows, because there hasn't been

fundamental change as yet. There is expectation of change. There's change of the EU as well, right? That happened even earlier. And there's a lot of geopolitical risk. So there are some things to watch out for. But the fundamentals and the expectation right now is more on the optimistic side. That's right. That's right. Well, Anu, thank you. Anu Iyengar of JP Morgan and our own Leslie Picker. Thank you. Well, coming up, much more on M&A when we're joined by the CEO of data production company Cohesity,

fresh off closing a major merger with a competitor. And after the break, are we on the cusp of a housing construction boom? Well, the CEO of real estate developer Howard Hughes Corp. tells us why he's so optimistic about the industry in 2025. And check out shares of Joby Aviation. Those are getting grounded here in overtime. The Air Taxi Company, EVTOL company, announcing plans to offer up to $300 million in common stock. Shares are down about 5.5% right now. Stay with us. Dave and Buster's earnings are out. The stock's losing a life in overtime. Julia Boorstin has the numbers. Julia. Hey, John. Dave and Buster's shares falling after the company announced a CEO transition. Shares now down over 9%. CEO Chris Morris has tendered his resignation and the board is working

with an executive search firm. Until a new CEO's name, the company's board chair will serve as CEO. This comes as the company missed expectations for the quarter on the top and bottom lines. Dave & Buster is reporting a loss of 84 cents per share, worse than the 37 cent loss per share expected, while revenues of $453 million fell short of estimates of $466 million. Now, the company's comparable store sales declined 7.7 percent. That's worse than the 6.4 percent drop that had been anticipated. Morgan. All right, Julia Borson, thank you. Real estate, the third worst performing sector since the election, down about one and a half percent, while the S&P 500 is up better than four percent. So what do investors need to know about housing as we head into a Fed rate decision next week and maybe new policy in the new year?

Joining us now in an exclusive interview is David O'Reilly, Howard Hughes Corporation CEO. Howard Hughes focuses on creating and operating master planned communities, communities, mixed-use developments, and commercial properties. And you're here on set with us, so welcome. It's great to have you. Always thrilling to be here. How do you build better and faster? If you were to advise the Trump administration about policies that are going to make housing more affordable and fix the shortage that we've been talking about for years, what would you say? Yeah, we really need to figure out a way to address this unit shortage of about 4 million homes that we've seen since the GFC. The two areas that I think we could address that would help that in the biggest possible way, faster approvals, got to come out

of the ground quicker. And to think about those states that deliver more affordable homes, what advantages do they have? Municipal financing structure. As a horizontal developer of land in Texas, Arizona, and Nevada, we're able to put in water, sewer, and infrastructure and be reimbursed for those costs through municipal bonds. If we had a national municipal structure that would allow for that reimbursement, land would get sold to home builders cheaper, homes would be built cheaper, the end price of the consumer would come down as well. How important is something like a salt cap going away, especially in some of these high tax, more expensive parts of the consumer would come down as well. How important is something like a salt cap going away, especially in some of these high tax, more expensive parts of the country? I think it's been

a small part of what's caused this migration from the coast into some of the Sunbelt cities. The bigger part is quality of life, quality of education, connectivity to nature and short commutes to work. That drives more decisions than the incremental SALT tax change. How does the first-time homebuyer market come back, considering the low inventory, the high price points? I mean, how long does that take, and where do you see it happening first? Well, I think the breaking point in terms of home prices coming down is going to be tied to how quickly mortgage rates come down. Right now with mortgage rates in the high sixes, mid sixes, the lock-in effect is still real. And until that lock-in effect abates and more supply comes onto the market from the resale side, we're going to be entirely dependent on new home

construction to meet demand. As a result, pricing is going to remain elevated despite the fact that new home construction pricing has remained on par with existing inventory, where it used to be at a premium. So I think that we're seeing some strain in the system. But until mortgage rates come down and supply increases, we're not going to see prices come down. Is it possible for there to be a significant shift in the housing market supply demand dynamic without a major recession? I don't know. I think that that would be a double whammy for the housing market, right? New supply comes on with mortgage rates coming down and less demand because of a recession. It could hit hard. For now, we don't see those rates coming down. We see demand outplacing

supply and we see home builders in a scramble to get their hand on the raw inventory they need to keep working, which is land. The country's in an all-time low at finished vacant developed lots. And we're one of the few horizontal developers that have those lots, thousands and thousands of acres to sell to these home builders. So we see 2025 shaping up as a pretty good year for Howard Hughes. You also develop office space. What are you seeing in that market right now? We've been the beneficiary of migration, not just residents coming into our communities, but businesses coming into our communities, chasing that well-educated workforce that left post-pandemic. As a result, our Class A office

space in the Woodlands is entirely full. Same in Nevada, same in our Class A space in Columbia. And it's been because these companies have relocated their businesses into these business-friendly, warmer, quality-of-life cities that are giving their employees the ability to see their kids at night instead of an hour commute on a train. It's always good. David O'Reilly, CEO of Howard Hughes Corp. Thank you. Thank you.

Well, it's time for a CNBC News update with Bertha Coombs. Bertha. John, the House task force that investigated the assassination attempts against Donald Trump released its final report today. The report includes recommendations for the Secret Service, such as urging that the agency record all radio transmissions, as well as scale back its protection of foreign leaders in order to focus on protecting the president. GOP Senate leader Mitch McConnell has been cleared to return to work after falling at the Capitol earlier today. A spokesman for the 82-year-old senator said McConnell tripped after lunch and sustained minor injuries, including a cut to his face.

The senator was previously treated for a concussion after falling at a Washington, D.C. hotel. And authorities raided the headquarters of Adidas in Germany today. According to Bloomberg, Adidas said the raid was part of a years-long tax investigation that began in 2019 over customs and taxes for products that were imported into Germany. Adidas said it has been cooperating with customs authority. I think they also pronounce it Adidas. Yes. Whichever.

Berserker Coombs, thank you. After the break, what the big divergence between the S&P 500 and its equal-weighted cousin means for the health of the market. And later, the CEO of data protection company Cohesity on whether he plans to take the company public maybe as soon as next year. Be right back. Welcome back to Overtime. Mike Santoli is back to look at the ongoing weakness in market breadth. Mike?

Yeah, John, been a feature of the last couple of weeks. Here's the equal-weighted S&P relative to the market cap-weighted version. And, you know, they kept pace for most of the quarter to date until a couple of weeks ago. You see that lower line there, really a divergence. So when the market gets a little bit overheated and needs to cool off and pull back, sometimes it reaches for some of the biggest stocks as defense. And that's what we've seen happening. Things like Amazon and Apple holding up the S&P 500 as the average stock just retraces a little bit. Now, take a look longer term at some of these weighting shifts or maybe anticipated weightings.

Bank of America has this. And so this is the growth sectors of the S&P 500. That's technology, communication services, consumer discretionary. The traditional sick sick sick goals would be industrials, financials, energy materials. This goes all the way back 100 years. And it shows you just this massive divergence above average for the growth sectors and obviously way below the historical mean for those traditional cyclical sectors. The big question is, is this just the market saying that the economy has just changed fundamentally for the long term? Or is there some room in there for mean reversion?

B of A is suggesting the value sectors can make a comeback, but it's been said before, I guess I'd say, guys. All right. Mike Santoli, thank you. It's the end of an era as Taylor Swift wraps up her 149-date era's tour. Up next, how that record-breaking show could forever change the concert and entertainment industry. And Alphabet, a big winner in the S&P 500 today after revealing its next-generation quantum computing chip called Willow, which is considered a breakthrough in that fast-growing field. We'll be right back. Welcome back to Overtime.

Today, we are debuting a new segment called Fast Forward, looking at the big money at stake in the rapidly changing media and tech industries. And we are kicking it off with a look at the business of Taylor Swift and what's next following the end of an era after the pop superstar wrapped up her multi-billion dollar Eras tour. Julia Boorstin joins us with a look at how the record-breaking concert tour forever changed the music industry and beyond. Julia? Well, John, the Heirs Tour may be over, but its legacy is lasting. Swift's many residences, she did shows only over the weekend in fewer cities, made more fans travel, which insiders say transformed the idea of a fan community. It normalized concert travel,

which created a more robust fan experience, fostering dressing up in sequins and the friendship bracelet barter system. Now building on Swift's momentum, concert giant Live Nation will have more larger venue concerts next year, with total ticket sales for next year pacing up by double-digit percentages. Former Ticketmaster CEO Nathan Hubbard, co-host of a podcast about Swift, says her three-and-a-half-hour-long concert raises the bar, pushing artists to perform longer and to create elaborate and expensive sets. He forecasts fans will flock to high-tech experiences like the Las Vegas Sphere. And it's not just concerts.

Theater chains are looking to recreate the success of Swift's concert film released by AMC Entertainment, which grossed $261 million worldwide. And movie studios, marketing chiefs, they want to turn movies into the kind of event that inspires fans to dress up like they do, not just for Swift concerts, but they also did for the Barbie and Wicked movies. So John and Morgan, the Heiress Tour

also showed something else, the undeniable value of female consumers. And you can be sure that's something that people are going to be paying attention to, whether at movie studios or when they're creating consumer products. It's really fascinating. I mean, last week I was I was at the CNBC CFO Council Summit with the CFO of Shift4, Nancy Disman. And she noted, and Shift4 really has a very big footprint in this vertical from the payments processing standpoint, that concerts and live events and venues are continuing to be robust, even looking to 2025, even beyond Taylor Swift in the end of the era, to be tongue-in-cheek here. And I wonder just how that speaks to how the appetite in general of consumers has shifted,

maybe fundamentally, towards this area of the economy. Yeah, I mean, the experience economy is robust. There was an expectation after the pandemic that maybe a lot of the concert ticket purchasing and travel we saw, that was because people were so sick of being pent up at home. But when it comes to going to concerts, what we saw was that people saved up, they hadn't been to concerts for a couple of years, and then they went out to see Taylor Swift or Beyonce, and they were so happy with the experience, it actually made them want to go to more concerts. So this coming year, we have concerts like Billie Eilish or Sabrina Carpenter, but those are concerts where people may have already gone to a Taylor Swift concert, may have spent a thousand

dollars or more on tickets and travel and outfits and the like, but because that experience was so gratifying and so much fun, they want to keep going as opposed to saying, I already spent my budget on concerts, I'm done. Well, we'll see if these other superstars have the stamina and the corporate jets to do it. Julia Boorstin, fast forward, thanks. My daughter's already requesting Sabrina Carpenter in tickets. All right, see if she to do it. Julia Boorstin, fast forward. Thanks. My daughter's already requesting Sabrina Carpenter and tickets. All right. See if she can do it. Up next, the CEO of data backup and recovery partner

startup Cohesity on closing its merger with Veritas's enterprise data protection business and how this positions the company to go public. And shares of Global Star are sky high today. According to a report, Apple plans to bring the satellite communications company's service to its top-of-the-line smartwatch next year. That would allow users to send messages when they don't have cell or Wi-Fi connections. Now, Global Star's CEO will discuss that and much more in an exclusive interview Thursday right here on Overtime. Stay with us. Welcome back. Data security firm Cohesity completing its acquisition of the enterprise data protection business from fellow private company Veritas. Major deal positions Cohesity

as the number one firm by market share in the sector and joining us now an exclusive interview is cohesity ceo sanjay poonan sanjay good to see you congrats on closing this but now hey some real work begins right this is a behemoth how aggressively can you transform and execute particularly go-to-market sales, to cross-sell Cohesity into an under-penetrated Veritas customer base? Thank you, John, for having me. Good to be with you and Morgan. Yes, this is an important transaction, a really important day for Cohesity. It's sort of like being born again in an 11-year history.

We were the first company to get to $1.7 billion in our pro forma previous year revenue and now looking forward to $2 billion. It's the fastest to get there. I'm no stranger to large M&A deals. I've done several in my VMware and SAP days, so we're humble and hungry. We have a no-customer-left-behind attitude to all of the 12,000 customers and a fresh passion to product innovation. What got Cohisti on the map was customers telling us we had the best product bar none in speed and scale and security, in simplicity and smarts. Now with the support of NVIDIA, you saw Jensen quoted in our press release. We're excited about their investment in this deal too. We're going to go take that message and bring the modern technology to both customers, Cohesity and Veritas. Very exciting days ahead.

You've got a lot of competitors, right? And I'm talking to them a lot of the time. And on the public side, Rubrik, of course, and Commvault. And there are some other private names that are looking to come public. And you know what they're going to say, what they always say. Oh, well, you know, Cohesity is distracted now. Veritas is distracted now. How do you sharpen your message to make sure that you get the full benefit of this scale that you now have?

Well, John, you've gotten a crash course yourself talking to all of these folks on this space and data resilience. I think the rising tide is lifting all boats. I wish all of the companies the success. Our strategy is to stay number one and deliver on product innovation and customer obsession. So I'll have a 15-minute video of our TED Talk type story that's available today. All of our customers, everyone who's facing the go-to-market organization with customers will hear that. We're building the broadest platform bar none. And security and AI are the two drivers of innovation in this space. So multiple companies can be successful.

Our focus is the enterprise. We will have 85% of the Fortune 100, the biggest 100 companies in the U.S., and 70% of the global 500, the biggest companies in the world. No one has that base. So we take care of those customers and then expand appropriately. We're hearing great. In the last 10 months, even though we were competitors, I've been talking to many of those customers,

and they're super excited about our roadmap going forward. So I'm going to go talk to the top thousand customers of Veritas the next hundred days over video calls. John, something that we all learned through Zoom, it's possible to get through a number of those customers in a quick period of time. Sanjay, it's really surprising to me. I've had a number of these conversations just in the past week. How many companies, especially as they adopt generative AI into their organization's operations, are not doing a good enough job securing and protecting their data and how accessible it is to pretty much everybody? So what are the biggest mistakes that companies are making and what does that mean in terms of

the runway here for growth? Yeah, I think, you know, several years ago I wrote, I've actually been in the security industry and I'm a security investor. I wrote an article on the four or five key rules of cyber hygiene, multi-factor authentication, encryption, segmentation of your applications. Those are the basic things that folks need to do. And we need to educate everybody on those cyber hygiene rules. These are things like brushing your teeth that we've all got to do. But as it relates to data, we're really focused on ensuring that all that data, you could think of data like an iceberg. Primary data sits on the top of the iceberg. Secondary data, where we operate, back up and others sit at the bottom of the iceberg. That's especially

prone because it's a historical time series of everything you've had. So a big part of our focus is to completely secure that from the bad guys, but then provide insights from the tools. Got to sneak in one more. Cohesia originally filed for an IPO about four years ago. Can you integrate Veritas and prepare for an IPO at the same time when we're looking beyond 2025 for where that might happen? Well, we had a lot of investor interest in this deal, John. It was valued at $7.5 billion when we did it last year. Many of the comps are now double that today, so maybe we're worth $15. Let's see. The IPO is an important milestone.

It's not the only, it's not the destination, but at the right time, we're ready. We'll integrate the businesses and we'll be IPO-ed when the markets are ready. All right. We'll be watching for Sanjay Poonen, CEO of Cohesity. Thank you. Up next, how winning a bid to host an Olympics more than 20 years ago helped transform one Western city into a thriving economic and technology hub. Stay with us. Tonight, CNBC travels to Salt Lake City, Utah, for the third installment of Cities of Success, an hour-long primetime special showcasing American cities that have risen to prominence as business powerhouses. Many say Salt Lake's transformation into a thriving tech hub can be tracked back to a pivotal moment, winning the bid to host the 2002 Winter Olympics. Now, one of the key figures in

securing those games, former Utah Governor Mike Leavitt. We were going to take our budget and provide the best games we could within our budget. In the 15 years after the games, the revenue floodgates opened. Tourism skyrocketed. Skier days shot up by 43%. Hotel and lodging revenue surged 70%. And visitor spending catapulted by 66%. The Games were extraordinary in building our economy. But perhaps the most important legacy of the Games was helping to establish Salt Lake City as a tech hub. It was during the lead up to the Olympics on a trip to Silicon Valley that Levitt approached Salt Lake City native John Warnock, the co-founder of Adobe. And I went to him and I said look we'd like to build a

technology community and he kind of stared at the floor for a few minutes and then kind of shouted at me, you want me to come to Utah? If you want to come to Utah, I need engineers. Levitt's solution? Invest in Utah's colleges and universities, particularly in engineering programs. In 2001, the state legislature introduced the Engineering and Computer Science Initiative, which to date has successfully doubled the number of engineering and computer science graduates over the past 20 years, a cumulative $40.1 million investment. It was the combination of a clear vision, dramatically ratcheting up the number of engineers

we were educating, and having the Olympics and a place they wanted to live. All of that came together into what's become one of the most robust economies in the country. Well, don't miss the premiere of Cities of Success, Salt Lake City. That is tonight at 10 p.m. Eastern. And speaking of Adobe, Chairman and CEO Shantanu Narayan is going to break down the company's earnings in an exclusive interview tomorrow here on Overtime. Before the call, Morgan, really, first of all, you've got to give Mitt Romney his credit for saving that Salt Lake City Olympics. Also, really the big move of Adobe into Utah came after the acquisition of Omniture. And that was a Shantanu acquisition that was really transformational,

turned them into an enterprise company at a different level, brought them into the digital marketing business, which is so important during this season. It'll be interesting to hear what he has to say tomorrow, too. It seems like macro, competitive pressures, web traffic, customers, marketing budgets, and of course, the uptake of Gen AI is all going to be in focus when we get these latest results from a major tech company. Used to be Adobe and Oracle reporting it around the same time. Set the tone because they report off cycle. We'll see what happens this time. All right. We have major averages taking a breather again today. That's going to do it for us here at Overtime. Fast money starts now.