Motley Fool Money - Motley Fool Money: 06.27.2014

Episode Date: June 27, 2014

GoPro has a big debut.  Nike hits a new high.  Barnes & Noble spins off the Nook.  And television networks score a big victory.   Our analysts discuss those stories and share three stocks on their radar.  Plus, CNBC's David Faber talks about the new CNBC documentary, Amazon Rising. Learn more about your ad choices. Visit megaphone.fm/adchoices

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You can get them. From Fool Global Headquarters, this is Motley Fool Money. It's The Motley Fool Money Radio show. I'm Chris Hill. Joining me in studio this week from Motley Fool 1, Jason Moser from Motley Fool Pro and options. Brian Hinman and for a million-dollar portfolio, Ron Gross. Good to see you, Jens. Hey, you.

We've got a hot IPO, a new gadget warming up, and one retail stock that's going cold. We will talk with David Faber about CNBC's new primetime documentary on Amazon.com. And as always, we'll give you an inside look at the stocks on our radar. But we begin this week with GoPro, the video camera that is popular with extreme sports fans. GoPro went public on Thursday at $24 a share. And in the first two days of trading, shares rose more than 50%. Brian Hinman, what is going on? It's the end of the world as we know it.

Seriously, is this that great a company that warrants a 50% jump in two days? No. Bottom line is right now this is a hardware company. but investors are not paying, you know, 50% more today for a hardware company. They're paying for what this company can become. And we honestly don't know, and the company doesn't know exactly how it's going to get there. Now, the plan is for GoPro to go from making these, you know, extreme sport cameras that, you know, allow you to film yourself doing things, turn themselves into a media company and then sell more cameras. So the cycle is convince people to buy cameras, distribute the videos that come off of those cameras in unique ways,

convincing people that they are famous or important, which then encourages other people who want to be famous and important to go buy GoPro cameras. And what kind of multiple you put on that, Brian? A big one. Yeah, the big question here, so they're profitable. They're making money selling and making cameras, which in itself is impressive. They have 6% margins right now. They're growing. The question is, when they move to the media company, when they're able to distribute, are they going to make any money doing that?

Ron, for people who think that we are entering dot com 2.0 bubble territory, stocks like this are helping to make their case. Yeah, companies raised $118 billion in the first half of 2014. That's up 60% from last year. So clearly the IPO market is hot. The problem for me with the IPO market is you should be going public if you need to raise capital for, growth in the future, not because your shareholders want to sell, not because you want to pay down 2.75% debt, which is what GoPro is doing. The CEO is selling a big chunk of his stock, which I guess I can't be grudge him because he's got a whole lot of capital tied up in this company, but I still

don't like to see it. I don't like to see 60% of the money going out the window to pay low interest rate debt. And so I think companies are going public for the wrong reason. They're lining their pockets in many cases, and I don't think that's good. Well, the container store did just that, right? I mean, they went public and they used a lot of that money to pay down debt that they owed from, you know, getting them to where they are today. I mean, I think these guys are right. I mean, hardware is typically a race to the bottom at some point, so then it's a matter of figuring how you leverage that hardware into something else. And it is unique, I think, that content, I mean, you don't get those types of points of view, I think, with anything else. I mean, I don't know about you, but when I think of extreme sports, golf comes to mind.

Sure. And I think this could be a pretty awesome training aid. You throw it on your hat. You know, you're recording yourself as you hit the ball. it's instant feedback. It tells you whether you're moving your head or not, right? I mean, you go back, you roll back the tape, and you can say either my head is staying still

or I'm moving my head, and just so it's a teaching A2, right? Nothing. Just another avenue, a suggestion and idea. Nothing you just said makes me want to run out and buy one of these things. From one type of video business to another, ARIO is the upstart company that enables subscribers to watch traditional over-the-air television on their computers, tablets, and smartphones.

This week, the U.S. Supreme Court ruled that ARIO's business is in violation of copyright law. So Ron, big win for the Goliaths of the TV industry, CBS, Disney, Comcast, Time Warner, Cable. Really important ruling for them, obviously. The ruling is based on copyright. It's a copyright decision, which I think makes sense. It goes back to old copyright laws that were put in place really before the Internet even existed. It does raise some questions for cloud computing companies, for companies like Apple that store things on the cloud and people will access it.

But I think the Supreme Court actually made this a very limited ruling. So you can't really extrapolate what it will mean for other companies. But it's a very important ruling for these guys. You know, it captures, it allows them to keep a hold of those fees that are so important that people pay for $3.3 billion in the most recent year. Projected to go to $7 billion by 2019. People pay for the right to broadcast these things. Those fees are, they add up to big numbers, so very important. And Jason, for all the talk of cord cutting.

U.S. Supreme Court just handed a big victory to the cord companies. Yeah, I mean, I, for one, have always been very happy to have my cord not cut. I mean, I think what it really boils down to, I think most people have the gripe that they feel like they don't have choices out there. And I'm just going to use you as an example, Chris, because it's so easy. We always talk about how you wish you had Fios, but you're stuck with Comcast. Yes. I, on the other hand, have Fios, and I brag about it all the time to you about how wonderful the service is. But, no, I think that that's the key really.

The key really is that if the consumers get more choices, then I think the cord-cutting phenomenon maybe takes a little bit of a back seat right now. And so that's going to be just sort of the interesting thing how this all plays out is, are the consumers going to see more choices? Are we going to see consolidation? If we see more consolidation, then I think that just puts consumers in a bit of a different position. And you see more things like these Aero services pop up to try to disrupt the industry. Yeah, I think Ario itself is done. I think this is it. They'll probably try to sell off some of that antenna technology.

they have, but as Barry Diller put it, there is no plan B. So, sorry, Ariel. Now that Amazon's new smartphone has been unveiled, gadget fans are turning their eyes to Apple in anticipation of the eyewatch. Wall Street Journal reporting that Apple is planning multiple versions of a smartwatch device later this year with more than 10 sensors to monitor health and fitness data. Jason, assuming the price is right because we don't really know what the price point will be at this point. Are you buying one of these things?

Um, probably not. I'm a bit of a watch guy, like a traditional watch guy. I think that these, these ideas face two really big hurdles. Number one is to make something that doesn't look stupid on my wrist. And then number two is to make something that does something different than what my phone already does. And as of right now, I don't see a device out there like that. I mean, they, they are clunky-looking devices and they do the same thing that your phones do. But, you know, I think Apple has done a good job in the past of not worrying about being first- market but being sort of best to market. They watch some of the others get in there and sort of try and iterate and fail at times. And so, you know, I think this is something that Apple will do again here. I suspect they'll come out with a pretty sleek-looking design. I think the price point's going to be the real key there. I sure it'll be a device that's centered more around health and fitness. And I think there's a big market for that. Yeah, Chris, I think that the story here isn't necessarily watch. The story here is how they get sensors on you. And watch is a socially acceptable way to have sensors all over your body. If Apple were to come out with a sensor chest

strap, that would be far less exciting to me. So I actually am really excited about this because the quantified self-movement is absolutely enormous. And I would put sensors all over my body. In fact, I might have some, you know, under my shirt right now. I love, I love, I love tracking what's going on with my body. And it's a very big movement right now. It's very popular. And if anyone can pull this off, it's Apple. I don't think you need the interface of the watch. You need it to talk to your iPhone.

And I have an iPhone, so it's natural for me to want this product from Apple. You say it's a very big market, but when you look at the actual number of devices being sold, it ain't that big. In the first quarter of 2014, there were 300 million smartphones that were sold and less than 3 million smartwatch devices. Now, Apple's is obviously not among that universe yet, but right now, 1% of it. the smartphone market, that's not very big. It's simply because the sensor technology is crummy. The data collection aspect of it is crummy. And if anyone can figure that out, it's probably Apple.

I think Brian was right. I think the most important thing here is that this is the entrance into wearable technology. It doesn't matter if it happens to be a watch or where, you know, what will it be next? But clearly, we're all moving towards having computers as part of our daily life on us. and it's just the infancy of that. Coming up, one stock's closing in on an all-time high, while another just hit a new 52-week low. Stay right here. This is Motley Fool Money.

As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. So don't buy ourselves stocks based solely on what you're here. Welcome back to Motley Fool Money, Chris Hill here in studio with Jason Moser, Brian Hinman, and Ron Gross. First quarter results for Bed Bath and Beyond were disappointing, to say the least, and shares hit their lowest point in more than a year. Brian, how bad was this? It seemed like a bad quarter, but I don't know, new 52-week low bad?

Yeah, it wasn't really that bad. Honestly, I don't think this is a bed-bath and beyond specific story. This is the e-commerce revolution playing out. You know, you read between the lines here, and what happened was bedbath and beyond is just getting Amazoned. It's one of many players here. I mean, same store sales were fine. They were, you know, flatish, up 0.4%. management's guidance for same-source sales were fine.

What's really happening here is Amazon is attacking every retailer, and the responses that traditional brick-and-mortar retailers have, they have not traditionally been good. You can try and defend your sales by lowering prices, or you can defend your profits by giving up sales. Both of those are bad. What we're seeing with Bedbath and Beyond is margins taking a hit. So they are trying to defend their sales,

But the end here is the same. It's a bad formula. What's interesting is I believe William Sonoma is doing quite well, and they're actually making a real big push onto the Internet. I mean, you buy the stock because you believe I think that they're going to be successful there. And I think they're making some headway. Certainly the stock is performing well. I'd say those are two opposite ends of the spectrum.

For anyone out there looking at these two businesses, I mean, William and Sonoma has done everything right in their e-commerce strategy. And I have to even question whether Bedbath & Beyond has an e-commerce. strategy at this point. I mean, there's just none. I mean, so little of their sales are tied to e-commerce at this point, and they're so stuck in this rut of having to discount and coupon everything that when you add that to the fact that I don't think there's really much growth left for this company as far as footprint of stores, you know, it wouldn't shock me at all if you actually see some private equity interests coming here and try to shake things up at bedbath and beyond at some

point. Yeah, Chris, I think the investing takeaway here is when you're looking at retailers, you need to see them identifying some sort of niches. So if they have high shipping costs because the product is heavy, if there's an immediate need, if there's a wonderful in-store experience, or if you need expert help, all of those things are Amazon resistant. Those types of retailers are Amazon resistant.

Bed Bath and Beyond just doesn't fit that model. They're really good at making those 20% coupons. But you've got to look at for Wayfair.com, too, right? I mean, that's sort of the Amazon style, e-commerce, bedbath, and beyond at this point. They're already topping out there at, I think, you know, one billion in sales now, so look out for them. When Barnes & Noble introduced the Nook e-reader in 2009, it was seen as the bookseller's answer to Amazon's Kindle. This week, Barnes & Noble announced it will spin off the Nook Media Division as a separate business. And Ron shares the Barnes & Noble up more than 10% this week.

The market seemed to like this move. More than 56% up the stock this year. Really strong. Obviously, it was the walking wounded at its low. So we've seen a nice pop. steal from the Wall Street Journal here, which says they're separating a struggling retail store business from an even weaker digital operation. That's what you want to invest. What's not to love? But I do think this makes sense. Let's not forget, Microsoft owns a big chunk, I think 18% of the Nook

business. That business loses money. Does have the college bookstore business associated with it. That business is profitable, but not enough to make up for the losing Nook business. It'll allow them to separate. Retail stores does make money. They're really the only game in town left in terms of brick and mortar bookstore. I happen to like actually shopping there myself. So this makes sense. What happens to the nook business remains to be seen, but there is a deal now on the table with Samsung where they're co-branding nooks.

We'll see if that can kind of boost the business a bit. It's a tough business, though. Any chance they rename the nook? Because, come on. Nook? Maybe not. Nike's fourth quarter profits came in higher than expected as overall revenue grew in nearly every market.

So, Jason, probably no surprise that the stock is within a buck or two of an all-time high. Yeah, and I think you keyed in it. There's another great quarter. I mean, they bested expectations. And, I mean, this is just, this is a stock that you want in your portfolio at any stage of your life. I mean, it is just taking part of this tremendous sporting goods and sporting apparel market. It's just going to continue to grow. It translates globally.

And, you know, you look at their total sales number of close to $28 billion last year. And more than $5 billion now is direct to consumer, so online direct stores that they're selling. Those are higher margin sales, which is a big deal. It keeps those margins moving up. And gross margin did move up this past quarter, thanks to some pricing power there and more sales from the direct-to-consumer. They continue to buy back shares, and they've brought that share count down about 10% since 2009, so that's good to see. Put this in context, you look at that $5 billion in direct-to-consumer sales, that's more than double of what Underarber sales. sells in a year altogether. So yeah, I mean, Nike is still, by far and away the market leader here, you know, and there's really no reason for that to change. I mean, I think there's room for more than

one winter, obviously, but Nike's certainly one to watch. You can follow this radio show on Twitter at Motley Fool Money is our handle. Got a tweet from Matthew Capels who wrote, I ran my first 5K race on Saturday. Thanks to Motley Full Money for keeping me company. Thanks for listening to us. Are we a good pump-up song? I don't know. We got to to be there and we didn't have to do any of the running. So that's kind of... The assumption there is that he did it in 38 minutes or less, right?

That's not so bad. Matthew's got speed to burn. We'll go to the other side of the glass to bring in our man, Steve Broido, but also on the other side of the glass this week. Got to give a shout out to a few of our members who are joining us, Bob Guidry, Larry Ho, and Paul Sinkagrain.

Who are joining us. Thanks for coming in, guys. Ron Gross, time for the stocks on our radar. Steve will hit you with a question. What are you looking at this week? Stevie, this is radar stock. It's not a recommendation. It's Fossil.

F-O-S-Ls. Shares are $105 per share. Don't let that scare you, though. Very strong company, most known for their watches, both retail and a wholesale business. Ten-year revenue compound annual growth rate of 17 percent. Companies doing really well. I'm not sure if it's cheap enough for me to dive in, but it is a recommendation here at the Motley Fool. Steve, question about Fossil?

Is Fossil have any chance of becoming a high-end watch brand? I mean, it seems that mid-tier, does it have any shot of getting it to a Motto-level or something? They do have some higher, and right now their big, big license brand is Michael Coors. Michael Coors has been a big part of this business. That license comes up in 2015. You only buy the stock if you feel comfortable that will be renewed. But they do have some higher price points. You can buy $1,000, $3,000 fossil watches. Jason Moser, what are you looking at? I'm going to go back to the well with Twitter, ticker TWTR. I think there's a lot of noise out there

that trying to compare Twitter to Facebook, and I think that really people aren't quite seeing this for what it really is. Twitter and Facebook are two different things, sort of two different purposes. And I think that, you know, Twitter continues to test things out, these new retweet with comment, which will allow people to add a little bit more than 140 characters. They're testing out this. They have the acquisition of Snappy TV, which I think plays right into their video strength there. And then I thought it was just really interesting to see the news on them testing out in their Indian market. a WhatsApp button in their Android device, in their Android device app. So this all just tells me that you have a company that's still very much in the beginning stages of learning its strategy.

But for me, I think Twitter has a long way to go. And I think the media is fully bought in with Twitter as a communication platform. And that's really what you have to look at it first and foremost as. Steve, first, are you on Twitter, Steve? Yeah, I tweeted once. That was the extent of it. How to go? It was fine.

The Latin American Steve Brodo has more tweets. you know. I think that's right. You need to get to it. Steve, question about Twitter's business? Is there any way Twitter can monetize subscription revenue? We've kicked that around before. I mean, I think there is a possibility there that maybe platform partners would pay some type of a subscription fee to Twitter at some point if that value really proves out. But from the user side, like you and me, probably not. Brian, we've got about a minute left. What do you got?

Sure thing. I'm going to Medtronic. There was a health care mega merger. Medtronic wants to buy. COVIDian. This is a $60 billion company buying a $30 billion company. This is a game changer for Medtronic. It frees up a bunch of cash that they have trapped overseas, and it gives them a lot of clout with hospitals who now all of the sudden care about how much they're paying for things. And the ticker? MDT. Steve? Is this the same company where you hit the button if you fell down and you can't get up? Is that Medtronic? No, they do make pacemakers, though. So if you, I suppose your Heart stop stops beating, there is a button that will kick you and hopefully save your life.

Does that do it for you, Steve? Yeah, sounds good. I'm in. All right, Ron Gross, Jason Mosa, Brian Hymond, guys, thanks for being here. Thanks, Chris. We will go inside Amazon.com with CNBC's David Faber. Stay right here. You're listening to Motley Full Money.

Welcome back to Motley Full Money. I'm Chris Hill with roughly a quarter billion customers. Amazon.com is the company that has changed the way the world shops, and it is the subject of the new CNBC primetime original Amazon Rising. It premieres Sunday, June 29th at 9 p.m. Eastern, and it is hosted by CNBC's David Faber. David, thanks so much for being here. My pleasure. Thanks for having me, Chris. The documentary begins with a single-engine Cessna plane flying to Matinicus, a remote island off the coast of Maine.

And, David, I grew up in Maine, and I had never even heard of Matinicus. Antichus until I watch this. Just how far is Amazon's reach these days? Yeah, well, it's everywhere, and that was the point of going to Metinicus, which is not that far east of the mainland, but as you point out, having even been a resident of the state, not many people even know about it, and very few people live there. But the reason we use it is it is an example of Amazon's reach, and it's incorporation into the daily life of so many people, so that even those who choose not to really live amongst us, so to speak, still need, in fact, perhaps need Amazon even more than do so many of the other 250 million or so users that you refer to.

Looming over this entire documentary and, of course, over the entire story of Amazon is the founder and CEO Jeff Bezos. He's someone who does not appear in public very often. He rarely sits for interviews. He would not sit down with you guys. but it's clear from the research that you and your team have done. This is someone who is, as one person in the documentary, says, there's public, Jeff, and there's private Jeff, and they're two very different people. They are.

Listen, I would, you know, you certainly, one of, if not the most sort of iconic founders, CEOs we have out there these days, certainly in the technology world. It's funny, I got to know Bayesles a bit many years ago. when there was more of a need on his part to communicate, to combat criticism and things of that nature. But what we've learned through the years is when Bezos has something he wants to say publicly, he wants to do it as in a controlled environment as he can, a la the introduction of the phone just last week. And he does not make himself, as you said, available very often at all. And certainly not in the free-ranging way that we love to do things here when we do these documentaries at CNBC.

see. But we were able to talk to a lot of people who work with him and get a great deal of insight into, as you say, the public Bezos and the Private Bezos, or at least the Bezos at work. And he's the driving force, certainly behind Amazon, continues to be in every way. And it's a fascinating character, incredibly driven, relentless, in fact, is the word that seems to come up very often when associated with him. And somebody who empowers people, but also challenges them as well quite often, but does seem to get incredible work out of a lot of people and is unafraid of challenging anyone in any business.

Again, just a reference to the phone last week, willing to go up against Samsung and Apple. He may not win, but he simply sees opportunity everywhere. It's pretty incredible that Bezos continues to have his doubters, despite the fact that he has grown this company from nothing 20 years ago, to a $150 billion company today. One of the images in the documentary that struck me was the cover of Business Week magazine from 2006,

and the headline is Amazon's risky bet, and it was about Bezos looking to launch Amazon Web Services. And now with the benefit of hindsight, we know that that's a bet that paid off handsomely. We, of course, don't know the specifics because Amazon tends to keep those pretty close to the vest. At some point, do you think people just start giving this guy the benefit of the doubt, just given his track record? Well, the most important constituency, perhaps for him, does give him the benefit of the doubt. And that would be the investing class. Amazon does get the benefit of the doubt, as you well know, trading at a multiple hundreds of times, at least its reported profits. That is, of course, is also referenced because it grows revenues so quickly.

But there is still that question as to whether one day those massive revenues and that great growth in revenue and all of the investment this company constantly makes will pay off in significant earnings. Now, Bezos told you from his 1997 shareholder letter, which was the first when they went public right on until today, and he always attaches it to the annual report every year, that I'm not interested in reported earnings. I'm interested in future cash flows. And so people believe him, people have followed him in that way. And at least there, he's been able to, so that the company can have more than $150 billion market value and be so incredibly competitive in so many different areas and spend so much money on things that aren't necessarily going to pay off immediately. You're listening to Motley Full Money talking with CNBC's David Faber about the new primetime original Amazon Rising. It premieres Sunday, June 29 at 9 p.m.

this is a very detailed program that you have put together and you go behind the scenes into the warehouses. And some of the shots, David, I've got to be honest, looking at how massive these things were. I was reminded of the very last scene in the movie Raiders of the Lost Ark when the camera pans back and the warehouse just gets bigger and bigger in the frame. And it's an amazing automated system that Amazon has set up all of these fulfillment centers.

but as you point out in this documentary it's people who are doing the legwork and this is an easy work I mean people who are putting together these packages filling up the boxes and in some cases walking upwards of 15 miles away a day that's really demanding work

yeah you know we always try in these documentaries to at least give people a sense as you point out how these companies work in the case of Amazon it's connected to our lives in so many different ways. And it's influence and culture even at this point, given its influence on the book business. But the point we're trying to make there is when that package arrives at your doorstep,

you may not really think about everything that went into getting it there. Logistics, which are so incredibly complex, and all the algorithms in the way that Amazon has figured out exactly how to get it there as quickly as possible. And then, as you point out, all of the people behind that, If Amazon could figure out a way to automate the entire process and have robots do everything in a warehouse, I have no doubt that they would, and perhaps will one day do that. But right now, you've got thousands of warehouse workers who walk 15 miles a day or pack hundreds of boxes a day.

And it is hard, hard work. And we spoke to a number of them about their experiences in Amazon. And not all of them have great things to say. right now, as you point out, it is dependent on thousands of people in the fulfillment centers. It's also Amazon's business dependent on millions of independent sellers who help create this massive inventory. And that's another part of this story is how does Amazon deal with its vendors? And just like the employees who work in the fulfillment centers, it seems like not all of them have great experiences with Amazon?

No. I have a relationship that we explore in the documentary. Amazon, for example. There's one where Amazon buys a product from the company that makes the product and then sells it to you and ships it to you and keeps it in their warehouse. And that's one part of their business. But another is the so-called third-party business, which is a very large business for them, which are other retailers that create a presence on Amazon and give up about

15% of their sales off the top to Amazon for allowing them to be on the site and then sell you that product. Many people at home may not even recognize whether they're buying something from Amazon or buying from the third-party seller. Many of the third-party sellers use Amazon's warehouses as well, something called fulfillment by Amazon. FBA is what they say. And Amazon makes a lot of money from that, but they also will actually compete with those same vendors if and when they see a product is succeeding well. and that's an area of at least some tension that we explore in the documentary. Is there a danger for Amazon that at some point they start to erode trust with their vendors,

or is Amazon so big and so dominant in the e-commerce space that, for all intents and purposes, they don't have a choice? I think they do need at some point to wonder whether, or how the public perception of them, and therefore the buying patterns, may be impacted. Largely, Amazon, I think, I would argue is still probably thought of very positively for any number of perfectly good reasons. But the recent fight that they are in with Hachette, the big publishing house, the warehouse workers and some of the protests that have gone on there, competing with their third-party merchants, there certainly are areas where, as it grows,

in power and grows in something in consciousness within so many people in this country, people start at least may start to question it. Now, I did a documentary many years ago on Walmart. A lot of people still have a lot of criticism of for various reasons. But that hasn't stopped that company from continuing to grow to a certain extent, but you could argue that it perhaps would be growing faster or viewed more positively. The Walmart, obviously, an older, much more established company, but Walmart and Amazon, they are both retail giants. In what ways are they similar?

In what ways are they different? No, they're similar in that what I remember when I've done two documentaries on Walmart, but I can go back and remember the austerity there. The absolute penny pinching that goes on to try to make sure they can deliver the lowest price to their customer. that's very similar to Amazon, where this is not one of your, even though it is a technology giant, I would argue, you're not getting the perks like you are at Google. You know, employees have to pay for their parking, things of that nature. So you've got that, and I think that's a similarity there. They are always pushing their suppliers in the same way Walmart is to give the lowest prices

and using their market power to do that. I think there's a similarity there. But one key difference is Bezos. You know, Walmart's had any number of leaders. but they haven't had Sam Walton for a long time. Bezos started this thing. He's still there, and he's still the man pushing everything that's going on. And so I would argue that is certainly a defining characteristic of Amazon

that makes it very different at this point from Walmart. Coming up, David Faber's thoughts about the current market. Stay right here. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hale talking with CNBC's David Faber. When you consider all of the stakeholders that a business deals with its customers,

its partners, its vendors. You could even say that analysts on Wall Street are a constituency. It's clear, as you said, that customers are first and foremost in the mind of Jeff Bezos and Amazon. Is any

of the other, like which one of the others is even a close second? Because it seems like, again, when you look at employees not only not having perks like free parking, but in the case of the folks working at the fulfillment centers, some of the working conditions can be pretty tough. Clearly, for a while now, it seems as though Jeff Bezos hasn't really cared all that

much what Wall Street thinks. And we have a sense of how they deal with vendors. Where are those other stakeholders after customers? That's a fascinating question. And I'm not sure I have a great answer for you, Chris. I think you're right. I mean, it's all of, you know, we go back in time and look at all the things he said over and over again. And it's always about the customer. But he backs it up when he discusses the customer and how he goes about doing everything with that focus in mind. And I think I don't even know how he would or what would come second. It doesn't appear that there is a second in a way. Everything good will flow to Amazon as long as they treat their customers as their number one constituency, I think, is what Bezos believes.

And that's the mantra, and that is what they have followed since day one. And by the way, it's worked pretty darn well so far. Well, there are a lot of adjectives that people use to describe Jeff Bezos, but you use one in this documentary that I wrote down when I heard it because I thought, boy, I've never heard that before, and I think that fits Bezos to a T. And the phrase you use to describe him is hyper-rational. he appears to lead this business with virtually no emotion whatsoever, no sentimentality towards employees, towards partners. He looks at opportunities wherever he confines them, and in that sense, he is perhaps the most rational CEO of a Fortune 500 company.

It's all about data, which is not emotional. It's all about, and we have, I've done interviews with former employees and people who've worked there who said, listen, he might say an idea is stupid when he first hears it, but if you come to him later with the data to prove that you're right, he's willing to change. And that makes a great leader ways as well to feel like, okay, I can make a difference. And so, yes, I think hyperational is certainly an apt term. It's why we used it. And I think it's served him extraordinarily well to not really let emotion creep into things and to simply say, if the data takes me there, that's where I'm going. Your day job is co-hosting Squawk on the street every weekday morning on CNBC. So before I let you go, I've got to ask you a couple of

questions about the market in general, because you literally have a seat right there at the New York Stock Exchange. So far in 2014, we've had close to 150 IPOs. We are on pace for the most since the year 2000. I know you remember the year 2000. A lot of investors remember it. And some people look at the IPOs. We've had and think, you know what, this is a sign that we are headed for a repeat of the dot-com bubble. Do you think that? And if not, what is the number of IPOs we've had so far tell you? I don't think that at this every morning on the old squawk box. Watch explode and then implode.

I think that the number of IPOs certainly is a reflection of a number of things. First of all, we have good markets, and good markets will allow many companies to come public. We have a lot of companies right now that are out there. sectors, certainly technology amongst them, cloud computing and the like, that want to hit the public markets. I would argue that the quality of these companies that are coming public now is still appreciably better than what we were seeing late in the dot-com boom. Better than pets.com? Yeah, better than pets. Exactly. Better than pets.com. And better than, I mean, just, God, you can remember some of the stuff that was coming public was S-1s. Oh, my God. But I would say that it's not completely unfair to at least be aware and start to say,

okay, where are we in this cycle? And keep an eye on the quality of those IPOs and keep an eye on what their thoughts are about growth and what their claims are and what the multiple is that they're coming at. Because I do think quality starts to come down, and I think we already are in that to a certain extent, and you have to at least be aware of it, but it doesn't feel quite as bubble-ish certainly as it did back then, where, you know, I mean, you had just crazy things happening in the markets every day. Yahoo would announce it. We're not there yet. Now, most people may not realize this, but it was about this time two years ago that you appeared on Jeopardy as part of the

game show's Power Players Week. You won $50,000 for a charity and educational foundation in New York City, new visions for public schools. My first question is, how'd you prepare? By the way, you obviously prepare very well for your show, Chris. So thank you for that. But you can't prepare for Jeopardy. Either, you know, what are going to do? Either you know it or you don't.

And they make it easier, I will add, on the power players or whatever. It's not quite as hard as the usual. Anyway, you are up against Dana Perino, a former spokeswoman for President George W. Bush and NBA Hall of Famer Kareem Abdul-Jabbar. And by the way,

That's quite an image. I mean, just, I don't, what's it like standing next to Kareem? Well, first of all, I'm not a particularly tall man to begin with, so it's like meeting somebody from another planet. And I've seen Kareem since. He's at one competitive guy. I saw him not that long ago. And, of course, reminded him, and he, you know, he doesn't like to lose. But I guess that's how he'd become a Hall of Famer.

And he happens to be very smart, too. But he was great. He was a good competitor. I had my kids with me. They were very excited to meet him also. I think it's something that we still talk about. Remember that time? We met Kareem.

Any tips for any of us who were looking to get on Jeopardy? Anything, whether it's buzzer technique? Buzzer technique's key. It really is, and it took me a while to understand exactly what you needed to do. And then getting your momentum and sort of blocking everything out and just focusing on a category. That's what worked for me, at least. So I got lucky that day. He hosts Squawk on the street every weekday morning on CNBC.

You can watch him there. You can also join the tens of thousands of people who follow him on Twitter. The new CNBC Primetime Original is Amazon Rising. It premieres Sunday, June 29th, and 9 p.m. Eastern. So clear your schedule, set your DVRs, do what you need to do, because it's a really fascinating profile of an amazing company. David Faber, thank you so much for being here. Thanks very much for having me.

That's going to do it for this week's Motley Full Money. Our engineer is Steve Broido, our producer, Matt Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.