Power Lunch - China Chess Match, Viral Déjà Vu 5/14/24

Episode Date: May 14, 2024

America’s chess match with China continues, as the White House raises tariffs on $18 billion worth of Chinese imports. We’ll discuss the global impact.Plus, “Meme Mania” is roaring back to life on the back of tweets from ‘Roaring Kitty.’ But some retail traders think it could play out differently this time. We’ll explore. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Good afternoon, everybody, and welcome to Power Lunch. Alongside Kelly Evans, I'm Tyler Mathis, and glad you could join us today. Coming up, America's chess match with China continues. The Biden administration raising tariffs, $18 billion worth of Chinese imports. We will discuss the impact. Plus the meme season, viral trading roaring back to life on the back of meme veteran Roaring Kitty. But some retail traders say this could play out a bit different and leaving more people holding the back. And speaking of those meme stocks, GameStop up more than 20%. off its highs of the session. AMC up more than 30 percent, also off the highs. Additionally, names with high short interest, Nova, Virgin Galactic, plug power on the move as a result of the meme return. Now on the broader market front, the Dow has given up its early morning gains. It's lower by 19 points right now. The S&P up four points at 525. The NASDAQ up a third of a percent. Chinese tech on the move. Alibaba down 7 percent, posting an 86 percent profit drop, Kelly.

And Google holding a major developer event, announcing a new version of Gemini AI. The stock only up fractionally today, but we'll have a lot more on that in a minute. First, though, an update on the bid for Paramount and David Faber has the details. Hi, David. Hey, Tyler, as you guys well know, I've been following this one pretty closely, as I did 30 years ago when Sumner Redstone and Barry Diller were fighting over the property. Another saga, perhaps worthy of its own movie, is the battle for Paramount. Some things to add to the mix today because we've been very much focused on the potential of a bid from Sony and its partner Apollo. But people close to the situation that I've been speaking to have late indicate that the likelihood of a bid, at least for the full company, seems to be fading a bit.

There has not been an NDA signed by Sony at this point, a non-disclosure agreement that you would typically sign so you can begin real due diligence. And beyond that was a fallen Sony parent stock price last week that we can show you as well that may have given. given them some pause. Not to mention, of course, what is this the continued deterioration of the environment we know so well, namely the cable ecosystem, all of which has led to what I am told is at least, quote, a rethinking of the Paramount bid. That does not mean that there would not be some sort of bid potentially forthcoming, but will it be restructured? Would it perhaps simply look more like some of the other things that we've heard about as well, trying to take control of NAI and therefore exert control over the combined company in that way?

but certainly something that people may want to keep in mind. Again, this was never going to be something that moved easily, but you may recall, of course, that they did send a letter of interest and express interest at a $26 billion price, that of course, including the roughly 15 or so billion in debt at Paramount, but it did result in Paramount stock price moving higher. You can see Sony is up today, but you can also see the decline I'm talking about. As you take a look at Paramount chairs adjusting for our report,

I should also add, by the way, that while the David Ellison, the Skydance slash Redbird Partnership that has been pursuing control of Paramount as well is no longer in an exclusive period of negotiation, they have continued to do their work. And so perhaps if you were handicapping it at this point, given at least this latest development regarding Sony and Apollo, perhaps the Ellison Skydance bid once again may come to the fore. Who knows at this point, but given how closely we've been following, it, Tyler, wanted to at least share that with our audience at this point. Yeah, my question was going to go to that question of Skydance and Redbird.

Redbird, obviously, deep-pocketed person, lots of media people in it, and whether that had this, whether the fact that Sony is rethinking brings Skydance closer, if you could put it that way, to concluding some kind of acquisition of Paramount. You know, listen, there is a level of complexity here that's high in all of this, and particular, the Skydance deal, which they have made contingent upon, at least previously, the merger, getting approval from the special committee of the board of directors to value Skydance, to essentially purchase Skydance in a way, merge it in with Paramount. And then, as we've reported many times, there would also be a significant issuance of equity by Nuco, as we would call it,

that would be purchased in part by Larry Ellison, by Redbird, by KKR, which is also an owner of Skydance right now. and perhaps many others. So there's a high level of complexity there. However, the control shareholder national amusements run by Sherry Redstone has in the past, at least indicated, is my reporting, interest in pursuing that bid and being in favor of it, if you will. Will that lead to a finish here that they actually get to the finish line, I should say, Tyler? I don't know. As you well know, all of these things are quite dynamic in terms of how they move. There is a hope, given how long this has gone on, that something will be concluded over the, let's call it, the next couple of weeks. And remember, you're dealing with a new management at Paramount itself,

which replaced its CEO Bob Backish with a trio of senior people who are running the company. One final point, by the way, I forgot to add in terms of at least the way Sony's looking at it, and, of course, the way the Skydance group is as well. There's a very important renegotiation coming up for Paramount in terms of distribution of its cable networks on Charter, the big cable company, that had been extended. That extension runs out very, very soon. And so all the parties will be very much focused on the economics of that deal and how or if in any way it harms Paramount's profitability. So a lot of moving parts here. But again, the big headline this afternoon, Tyler is, at least from their perspective, Sony, the word being used.

just rethinking. All right, David. Thanks very much. David, Fabor. Let's get over to that Google event now where Deer Jibosa has been tracking the headlines, and we're learning ever more about Gemini today, Deirdre. Yeah, Kelly, there's a lot of technological advancements

that matter deeply to developers. We can hear the cheers and applause from the amphitheater right beside me. For our audience, though, probably the biggest announcements so far have been the expansion of SGE, that's search generative experience and Project Astra, Let me get to both because they have implications for Google's business model. Senator Pichai said that the company is launching what they're now calling AI overviews in search across the U.S.

It'll be available to all users by the end of this week, and they're going to roll that out to different countries, more countries throughout the rest of the year. And that means that the way we search, what we know of search, 10 blue links, that is going to be changing. There's been all these questions over whether Google would disrupt its current business model. I wouldn't say that this is an entire disruption, but this is sprinkling more generative AI into traditional search queries. And that is going to look different for users, for advertisers, for merchants. So that has major implications. The other thing that was just announced was Project Astra. This is a universal AI agent.

And as I watched that demo, I couldn't help but think that this is certainly what Open AI was trying to front run with its demo yesterday. This is less of a chatbot, more of an AI assistant or an AI agent. I want to show you some of the demo that they just showed a few minutes ago in the amphitheater. What neighborhood do you think I'm in? This appears to be the King's Cross area of London. It is known for its railway station and transportation connections. Do you remember where you saw my glasses? Yes, I do.

Your glasses were on the desk near a red apple. That last part kind of blew me away, blew the audience away as well, because what you didn't see was earlier on in that video. It had seen glasses, even you looking through your camera, might not have noticed that, but AI agents have memory and they have reason. And this is really a new era of generative AI that's going to have enormous implications. There's another part of that demo where the user is not looking through her phone, but she puts on a pair of AI glasses. This is what you're seeing right now. And it seems to work a lot better. So it does also raise this question, what is going to be the device of the AI era, even when we watched Open AIs demo yesterday,

the kind of when you're awkwardly holding the phone to show your work, it's got to be a better way. It is certainly a throwback to Google Glasses. I don't know if you guys remember that, but a lot is shifting this week and a lot is on display here at I.O. So, you know, the audience here is digesting it and developers digesting it, Wall Street as well, certainly. On that note, we are going to be sitting down with Sondar Pichai later today in the 4 p.m. Eastern hour to talk all about what was announced. We will look forward to that. Thank you very much, Deirdre Bosa.

And I'm going to ask Google, where did I last see a guy in a lime green jacket? Sitting right across from me, by the way. Wed Bush's Dan Ives joins us right now. Google told me that, that I would find you here. And it was actually, it was ahead of even the presentation. Head of the event. It's really good. You say there is an AI arms race going on right now.

We know who the players are. How is Google positioned and how's it doing? I think quickly narrowing the gap versus Microsoft and OpenAI. But this is a huge event. I mean, for developers in terms of this Game of Thrones that's playing out, I mean, Google really needs to show from a Gemini perspective and from AI that they're going to be the ones that actually monetize this. at the same time that it looks like Apple and Open AI are going to have the partnership.

You know, Deirdre talks about the device, what's going to be the AI device? We think it's really going to be the future of the iPhone. I think iPhone 16, that's going to be WWDC next month. So they need to make sure, and I think they're doing a good job to show on search as well as even on cloud. When you think AI, you don't just think Microsoft and the godfather of AI and Vidi. You think Google. Is the future of their AI, just as you, You said the future for Apple is the iPhone, AI, in Apple is the iPhone.

Is the future here the Android phone? So I think it's going to be about search, how they monetize that in terms of when we talk about you look at Gemini, you look at sort of these next versions, how they're going to monetize that. What does that mean for the actual advertisers? And then, of course, they'll be advertising AI from a cloud perspective. That's a huge piece of Google as well. after a lot of black eyes that they've had from Gemini, from some of the launches,

it's important here to developers that they flex the muscles show we have the product, we have something others don't have. And I think this so far has been a great show. We have the meats. Because if you look at the last six or 12 months, it hasn't. It's always, it's excuses. Well, this, well, we should have done this. This is an important event to show that they're leading again.

And when it comes to search, you know, it continues. be their world, everyone else is paying rent. But you look at Open AI, you look at Nadella, you look at now, obviously, Apple and Cook, this is going to be really a battle that plays out going after that trillion dollars to spend. If, and this is my favorite thought of experiment, if Siri becomes powered by Chad GBT, I probably would just default to using that pretty much all the time. What's Google's answer to that? I don't think they have that answer yet. And they're talking about a search assistant and what that could be. But the nightmare for Google, and what keeps Sunar up at night, it's Cook and ultimately Nadella from an Open AI getting together in that launch event.

So when WWDC next month, they launch, that's not good for Google. They wanted to be front and center in terms of Gemini. And I think that's an important dynamic that's playing out here. Who's going to monetize? And maybe in fairness to them, Google might argue it has the better position with Enterprise, you know, with its tools in the cloud, with its reliability capability, with its simple scale. With the consumer, if this voice, sorry, usage disrupts me going to Google, I don't know how Google can answer that. And I think that is the biggest challenge. And that's what they're really trying to showcase today, that this technology is going to be so good that you're not going to bypass that.

Well, you'll hear next month from Cook in terms of this OpenAI partnership and what ultimately will be the iPhone 16. And I think your whole AI strategy from Apple, they're betting on Open AI. How ironic is, given the history between Apple and Microsoft, that it is now Apple and Microsoft bonding, in effect, potentially, bonding to fend off or to get competitive strength against other rivals? It's Alfred Hitchcock, a Twilight Zone. I mean, no one would ever expect that you'd get to this point, but it comes down to who has the best technology out there. It's Allman Open AI. That's why this was an important event. for Google showing where they're going, but this is one, get out the popcorn. There's still a lot more to be written here. All right. And I love the green jacket. And I'll bring one next for you. For me, yeah, 44. Yeah, I like the shirt. Yeah, I like the shirt is good too, man. Good to see you.

All right, Dan I. Still to come, we'll take a deeper dive at potential market risks around the world. We've got the U.S. upping China tariffs, Secretary of St. Blinken arriving in the Ukraine and sending a message to Russia. We'll discuss all of it with the Atlantic Council's Fred Kemp. Plus, CNBC releasing its 2024-50 list. We'll speak to one of the companies transforming health care when Power Lunch comes back. Welcome back to Power Lunch. President Biden is announcing new tariffs on a wide away of Chinese products today, including EVs, chips, and solar panels, all of the things we need for the energy transition.

The new rules will impact about $18 billion worth of Chinese imports. Now, that's just a fraction of the $427 billion worth of goods we imported. last year. But what will the measures accomplish? Joining us to discuss that is Fred Kemp. He is president and CEO of the Atlantic Council. He is also a CNBC contributor. Fred, it is great to see you again, first of all.

To see you, Kelly. Listen, this is, it seems to me an important moment. This president who had criticized tariffs in the past, not only embracing them, but applying them vehemently in areas that he seems to most prize the message being, I

assume, that if we allowed all of these international products in like Chinese EV, they would put our industries out of business overnight. Otherwise, why is such a strong response here? Well, I think that's right. We've been waiting for the administration to pull the trigger on this. They've been looking at Trump tariffs, Trump-era tariffs for a long time,

and they not only kept them all on, they've added to them. I think what's new about it is prevention and resignation. Prevention, the 100% tariff on EVs, and that's right. I said 100% tariff on electric vehicles. There's only 1% of the U.S. market that's taken by Chinese vehicles. So this is about the future. This is about preventing in the future. And what Biden administration officials say is we've learned from the past.

If we wait too long and let all these products come in, we've lost the jobs. We've lost the economics back. So we have to do this now. And the part that's about resignation is they've just shrugged their shoulders and said, China is not going to take on any market-driven trade policies. They're not going to change their unfair actions. And so we now have to act to take on direct and indirect impact to our supply chains from their unfair practices.

So that's what's behind this. I think let's focus on the EVs because that's the much more consequential industry than solar panels at this point. But what would have happened and refresh our memories or take us back to that time? In the 1980s, what did the U.S. attention? to do in terms of tariffs or barriers to keep Japanese cars out of the country, for instance. You know, and what would have happened if they never made entry? The point being is China being accused of literally subsidizing its EV industry. And if not, I mean, or if they are in some fashion,

but if they just have a better mouse trap and the U.S. can't compete, what is the risk globally for our automakers if they can't keep up? Well, first of all, it is electric vehicles for sure. But we're also talking about lithium-ion battery, semiconductors, solar panels, medical products. What's different, you know, China's been dumping products for years. It's had overcapacity for years. But what's different about this group of overcapacity is it has national security consequences. And, of course, the electric vehicle market, we already see in Europe how quickly the Chinese can take that market. Watch Europe now, though, because Europe by June or July will decide on its overall.

electric vehicle tariffs. Our action will only cause more Chinese vehicles to come into the European market. The European market can't act preemptively. They have to show the harm. And so I think for this to really work, you have to have transatlantic agreement on where these tariffs are going. Could China get around, quote, these tariffs by making their manufacturing in countries other than China? In other words, Mexico, Brazil, Portugal, what have you? Well, I think Mexico is the place to watch right now. There are ways to go at that. The administration is talking about them, but surely China is looking at as Mexico is a way to get around all this

and get everything they've got into the U.S. market, but through Mexican manufacturing. I think that's got to be a next order thing that one takes a look at very quickly. All right, Fred, thanks very much. Always good to see you, sir. Fred Camp. Thank you so much. Great to see you. You bet.

Well, in addition to global headwinds, investors here in the U.S. also have a slew of economic data to contend with this week. PPI coming in a little higher than expected. We've heard that story before for the dampening the possible Fed rate cuts later in the year. Let's bring in Julie Beal, Chief Market Strategist with Kane Anderson Rudnick. Julie, welcome on inflation. Walk us through the numbers and explain why it seems to be getting harder to cause inflation to come down after so much inflation, seemingly. has been wrung out. So what you often see with inflation is kind of, it looks like a perfect mountain when you kind of track it. And what happens is, is the steeper that rise, the steeper the decline.

But that last mile is always the hardest. That's very typical in most cycles. And what typically causes that last mile is an economic slowdown. The only time that really kind of hasn't happened is more like the 1950s. And so that's where we are right now, where we are not necessarily getting the economic slowdown and we're just finding it hard to grind out that last percent. And I think, you know, Chair Powell is in this really tricky position where he has kind of committed himself to Ray Cuts this year. And you can tell that they really want to be able to do that. But they want to be

also very mindful of where we are in inflation and trying to ring out that last percent, which is pretty meaningful. Your answer, not implicitly, but suggests that you are suspicious or suspect of of the Fed being able to engineer the so-called soft landing. Do you think that something harder with more unemployment is likely? I think it's hard to say whether it's likely or not, but I think investors need to be really honest about how hard what the Fed is trying to do right now is. And the tools that they have are very blunt instruments.

And so I think it's really hard to be able to predict whether it's actually going to work, but I think it bears repeating how difficult it is to do. Julie, there's a couple of names you think are not so flashy, but kind of doing well quietly. Ali's bargain outlets is one of them. You can sort of think about the consumer interest there. And cadence. Yes.

So, you know, I think when we're thinking about small caps, people have been shunning them. And I think for good reason, earnings really hasn't returned for small cap. They've been very negatively impacted by inflation. But there are still lots of great small cap businesses. They're not flashy. They're not sexy. The ALEAS is one that does off-price discount, close-out merchandise, which for a value-starved consumer, which is true at the high end, the low-end, the mid-end, they shop at Allies, and I think they find

the value that has been really missing from a lot of retail. And Caden is so unique in that it has these very niche positions where it has a number one position, and it's able to kind of consistently execute with high profitability. So those are the types of businesses that were drawn to. Do you like small caps at this point in the market cycle as a group better than you like large caps? And if so, why? I don't think I like them as a group. I think you really, as a, you know, kind of as a small cap investor, I think I actually get paid to say no more than I get paid to say yes.

And the reason why is if you look at the small cap index over time, it's actually degraded in quality, both from, you know, the financial metrics, partly to the profitability, you know, also the level of leverage. it's really important to be very selective. That said, I'm finding that on a relative basis, the valuations in small caps are much more attractive than they are in large cap, and so I think they're part of every balanced portfolio diet. I think of small caps in that sense. It's kind of like my 18-year-old son.

He hears no a lot more than he hears yes. Julie Beale, thank you. Appreciate it. Thank you. All right, GameStop, Hire, as the meme craze is being brought back to life by the person who started it the first time around, roaring kitty. But how is it different this time? We'll discuss when Power Lunch returns.

Welcome back to Power Lunch. I'm Bertha Coombs with your CNBC News Update. It's possible Donald Trump's defense team will not call any witnesses in the former president's criminal hush money trial. Trump attorney Todd Blanche told the judge this morning that he did not know whether Trump would testify. and he said the testimony of one of the defense's expert witnesses will be contingent on jury instructions. Meant, Hunter Biden's federal gun case could go to or will go to trial in June. The president's son had asked a judge to push the trial to September to give the defense more time to prepare. But the judge rejected that request today.

The younger Biden is accused of lying about his drug use on a form to buy a gun. And Jeopardy is getting a spin-off. Sony Pictures Television, which produces the popular game show, announced a new pop culture edition today that will air on Amazon Prime Video. Contents will compete in teams of three to answer questions about topics ranging from the Avengers to Sondaya. No word on a host yet.

But Tyler, you know who I think would be great? Who? Christina Parts Nevelas. She is big on trivia. nights. I bet she'd be wonderful at that. Sounds like a good idea to me. We're nominated. Here we go. Embraced. Endorsed.

Bertha, thank you. All right, still to come on Power Lunch, our anatomy of a consumer series continues with an eye on retail spending. Will it get a clean bill of health? We will crunch some numbers after the breaks and we will have some names. You're going to want to take note. All right, welcome back.

We continue our week-long series, breaking down the health of the consumer. Today, we look at a part of that space with the heaviest lift. It's the arms of the consumer retail. Joe Feldman is senior managing director at the Telsi Advisory Group. Joe, welcome back. Good to have you with us. Thanks for having me. How is the consumer doing from where you sit and what you see? Well, we think the consumer's in a relatively decent spot. There seem to be relatively healthy in terms of their ability to spend. The issue has been where they're spending. We continue to see a shift back towards services from goods and that's weighing on good spending at retail.

And with that, you're also seeing that the pullback on big ticket spending as well and discretionary spending. So, you know, you're seeing basics, household items, consumables, all doing well. Some of the discretionary categories like beauty could be argued to be discretionary, but that's been doing well. Spring products have done okay as spring has broken in different parts of the country. But the consumers being very choiceful in how they spend. and where they spend.

Let's talk a little bit about one of the companies that you like that reports earnings tomorrow. No, excuse me. I guess it's Thursday. And that would be Walmart. Yeah, Walmart, I think, is really well positioned for this environment. We like Walmart very much. It's an outperform rating that we have. We think they're executing quite well.

They sell products that everybody in America needs, and they serve all of America. And, you know, from low income to high income, people are shopping. at their stores, they offer the best values out there. And while you're into the store buying basic items, household goods, food, consumables, you can pick up some discretionary items at a decent price. And, you know, they've also added a lot of technology to their company in the back end to operate more efficiently. And we like what they're doing and think they're well positioned for the future. Do you think Costco's too expensive? Costco is always expensive, you know, on a relative basis. It's always trades at a very high P.E. multiple or EBITDA multiple, whatever you want to look at.

I've been covering the stock for about 20 years, over 20 years now. And it's like almost the perfect stock chart that you'd like to see over time. It's just up and to the left. And, you know, it looks really good. It always looks a little expensive. But you know what? They've got a more affluent consumer. It's a membership model.

It gets you to the store. They have about the best traffic to the stores that we've seen in years. and they continue to put that up month after month, as you see in their sales reports. There's usually bad traffic around Costco stores that I, in my experience, because they're so popular. It's like, the old Yogi Berra, they got so popular, nobody goes there anymore. Let's talk about Dollar General, which is, I think, third on your list. Different kind of retailing model there. Yeah, definitely.

Dollar General is definitely more of that fill-in trip for that lower-to-middle-income consumer. you know, maybe you go to Walmart once a week, every other week, and in between you're going to the dollar stores, like a dollar general. Dollar general, they brought back Todd Vassos as the CEO about six months ago, and he's really helped stabilize the business. Operations are much more balanced at this point, and they're executing much better. And we think, based on the traffic data that we see, traffic has been picking up. Our channel checks show that we're seeing more regular visits as well. So we think Dollar General, which has not moved all that much as far as the stock performance year to date, has room for upside from here. And we think they'll report a pretty decent quarter when it comes out.

You've got an outperform on Target. Let's go back to where we began, and that is Walmart, their main competitor, I suppose. They're sort of textually different kinds of companies. What do you think of Target? Yeah, you know, we do like Target. we have now performed rating. There's a big profit recovery to happen. Their profitability eroded significantly about a year, year and a half ago. They had to clear out a lot of inventory as people stopped buying discretionary goods. Two-thirds of their business or 60% of their business is discretionary.

And it's value price discretionary, but that people had been pulling back there. The stores look terrific these days. Traffic has definitely been picking up, again, based on some of the data that we look at from like Placer AI. And just again, our channel checks, we're seeing much better traffic there. And so if they can get that recovery, people coming in and buy the groceries, and then picking up some of those value price discretionary goods, that stock could look a lot better. That story, I think, has a little longer to play out. That's more like later this year into next year where we should start to see that recovery really pick up steam. All right, Joe, thank you very much for your time today.

We appreciate it. Very clear. Thank you. Joe Feldman. Coming up, some meme mania, deja vu. GameStop and other meme names are skyrocketing on those tweets from the man known as Roaring Kitty. We will discuss when Power Lunch returns. Welcome back.

We're seeing a revival in the meme trade after the famed Roaring Kitty stepped back into the fray Sunday. GameStop up 20 percent, but it was up as much as 130 percent in earlier trading pre-forcese. market. Other meme names along with highly shortened ones are getting a nice boost as a result. Game Stop up 52% right now. AMC is up nearly 30%, Blackberry jumping 10%. Let's talk a little bit more about what this is all telling us. Michael Maus joins us. He's chief market strategist at trade ideas. He traded GameStop during the first meme craze, but welcome, Michael. You have a different strategy this time around. What is it? Yeah, thanks for having me. I think the strategy will be a little different this go-around. I think there is some different headwinds we're going to have for these

particular mean names. Basically, the crux of it is that the original short squeeze, especially with GameStop, happened with this anomaly where there was more shares borrowed than initially existed in the market. So you're short about 125% of the entire float. This time, you're only short 20% of the float. And I think that's one of the reasons we're seeing this fade from all-time highs. However, as you note it yourself on the intro, a lot of other short names are starting to move as well. I don't know if this is short companies or short funds getting nervous that this might be meme stock 2.0 and covering, but I'm zooming out and looking elsewhere to see if there are other names, especially short float names, that may actually get an advantage based off this move that

we're seeing in GameStop. How do you short more shares than there are? are. There was a lot of speculation to why. I think the one thing that everyone agrees on is the reporting four shorts is a little bit archaic. We're in 2024, and currently it's every two weeks the actual data is compiled and put on a ledger somewhere. I think the speculation was that, you know, somebody shorts some chair in one broker, and then the lag happens that, you know, that gets bored to another broker. And because the data is not being reported instantly, and we have this T plus 3 or T plus

zero or T plus 1 delay, depending on what you're trading, that lag is allowing people to short more than exists. So, you know, if we're going to correct that, and I haven't seen much movement in that fact, I think we need to get to not only shorter settlement, but we need to also get to a point where shorts are reported almost in real time. I thought there was maybe some effort to do that. It is urgent now as it ever was, and you'd think the technology certainly exists. So, Michael, what should traders do this time around?

Maybe people got burned the first time around holding shares that are now, they thought, more, like, worthless, and maybe they get a second chance. Just talk to us about some different strategies here. Yeah, absolutely. I think you need an exit plan. I think if you're in from the original squeeze or you're getting involved in this squeeze, you know, we wish you all the best, but there's a large chance that, You know, things aren't going to, they may happen faster than this time, which is some sort of revision to the mean.

So I just implore people to have some type of a plan to say, I am going to get out of my position when X occurs. Whatever you decide that is, I think that's something that you need to focus on because there was a lot of people who didn't have an exit plan last time. And some of the stocks are coming back right now. A lot of them did not. You know, I'm thinking Bed Bath and Beyond, for example, was part of this first meme stock mania. So have an exit plan, understand that, you know, chasing these moves probably isn't the best idea, either buying these stocks when they're up 130, 40%. What we're doing a lot at trade ideas is looking at the entire market of heavily short-floated names and saying, is there anything that hasn't moved yet? Because if you remember the first meme stock mania in the first short squeeze, there was GameStop that moved initially and then AMC moved after that.

and then we had Blackberry. What happened is traders jumped from heavily shorted name to heavily shorted name to heavily shorted name. So if we are going to see that same thing repeat and the same continuation again, what we're really trying to focus on is what could potentially be the next one that they jump to. And then also what companies look okay and are maybe doing a little bit better financially or doing a little bit better when it comes to market trends than a GameStopper and AMC that could take advantage in the long run of these short squeezes if they happen. Like a Beyond Meat, are there any particular names you'd want to mention?

Yeah, Beyond Meat is one of them. That's holding up very well today. I think we can kind of go back into some of the more shorted names or even some of the names that were popular during that last cycle. So Beyond Meat is very heavily shorted as well. We have names like even Nordstrom's, JWN is showing a 21% short float. MobileI, which is a recent spinoff, that is actually sitting at 23% short float. And that represents 10 days to cover, which means that if people are covering their shares in MobileE, every single day, it's going to take them 10 days to get out. Upstart with a 32% and Wayfair with a 22%.

There's a lot of names out there of companies that would actually get some sort of move based off of this. I just can't imagine the retail army riding to the rescue of Nordstrom, you know, it just doesn't have the same ring to it. Well, you know, at GameStop, it was kind of defunct, right? Where we live in a world where if you want to buy a video game, you do that digitally. And it's very hard to predict where this army is going to go and where they're going to get excited about. Sure.

So it could be that. It could also be some of these more exciting names. A Rivian is 20% shorted as well. So there's a lot of short. shorts out there where people could get excited. All right. All right, Michael, thank you very much. Michael Noss. We appreciate it.

And a quick check on the markets. The Dow climbing to around session highs up 110 points right now. As we had to break, we celebrate Asian-American Native Hawaiian and Pacific Islander heritage all month long. Here's our own Dieter Bosa. The population of Asian-American Native Hawaiians and Pacific Islanders is growing by double digits in nearly all 50 states, representing the fastest. growing demographic in the U.S. The community's buying power currently equals $1.3 trillion.

According to the Congressional Asian Pacific American Caucus, that's larger than the economies of all but 16 countries in the world. For AANHPI Heritage Month, I'm Deerreveza. Welcome back to Power Lunch, everybody. CNBC's 12th annual Disruptor 50 list

is out today. And of course, a key trend across this year's list is artificial intelligence. To see the full list, you can scan the QR code on your screen or go to cnbc.com slash disruptors. But among the list, we saw an increase in the number of health care and biotech startups, one of which is driven by the health care provider, City Block, making a return from last year's list, but declining in the ranking slightly because of some layoffs last year. For more on the company, let's go to our own Julia Borsdon,

and with her is City Block co-founder. and CEO, Dr. Toyen-Anjani in Brooklyn. Thanks so much, Tyler. That's right. I'm joined now by Dr. Toyen-Ajai, CEO and co-founder of City Black Health. Thank you so much for joining us here in your offices. I know you have a big meeting of some of your leaders from across a thousand employee organization today. Talk to us a little bit about your model of integrated primary care, a community-based

model. You integrate a couple of different things that aren't traditionally associated with medical care such as behavioral health and social services. Why does your model work to reduce costs for Medicare and Medicaid patients? First of all, thank you so much, Julia. It's so nice to be with you. And such an honor to be on the list. So just all our gratitude, we're really, really delighted. So what Citiblock does, which is unique in the healthcare space, is first of all, we focus on people with the most complex needs, people who are likely to struggle to address their needs through the traditional health care system. We focus on people who get their insurance through

which means they're low income and people who are duly eligible for Medicare and Medicaid, primarily seniors, living in poverty, and younger people with disabilities. And what we know, and I think we also have intuitively know this, but it shows up in the data in healthcare so compellingly, is that your diagnoses, your organs, your heart, your lungs, your kidney, your brain, how they're working, is only a small part of what it actually means to be healthy. What drives health for us is our emotional well-being, our psychiatric well-being, our community and our surroundings for many of our members it's whether or not you have enough food

to eat today whether you're worried about getting access to education to transportation to get to your doctor's office all of that matters so much when we're trying to get people healthy and keep them healthy and so we focus on all of those and so talk to us about your relationship with insurers you just announced a deal with centine you're reaching more of their patients but what does this mean for you financially you're trying to achieve profitability um how are you doing in terms of top and bottom Yeah, so we're doing great. I think when we first started this company about six years ago, lots of questions about whether there's a market in Medicaid, whether you can scale and create profitable margins in Medicaid.

And I think we're here to say it is possible to do both of those things. You talked about our partnership with Centine. They're one of the largest health insurers in the countries, focused on the Medicaid population. We have a mission alignment for sure. And that's allowed us to grow with them and with other payers. Our relationship is such that we partner with health plans. that have an incentive to provide coverage and access and high-quality services to people that they insure across the country.

We work with them to identify their highest risk and rising risk population, so the subset of the population that needs more services than most doctor's offices can provide. And then we contract to essentially say, look, if we provide better care to these folks in the community, we take care of their mental needs and their social needs, we can reduce the amount of time they go to the hospital and emergency room, and we create margin for the business. And so we are out of time. And I'm sorry we don't get more time to hear about your business.

But can you just tell me you mentioned off-camera what your revenues were last year and whether you were on a path to profitability. Just tell us how big your business is right now. We closed a billion dollars of revenue last year. And we are making great progress on our path to profitability. We're really excited about it. And your goals to reach 10 million members by 20-23. Sorry, by 2030.

Sounds like you're well in your way. Twain and Gai, CEO and co-founder of City Black Health. Thank you so much for having us in your offices here today. Thank you, Julia. This is great. Tyler, going to send it back over to you. All right, got a lot in there, Julia. Thanks very much. Antoine Ajai.

We appreciate your participation as well. CNBC will continue its coverage of the D50 reveal at 4 p.m. Eastern with the company ranked number two on the list. And rural industries. We'll be right back.