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THE LEAD WITH JAKE TAPPER
Banning Trans Fats; Twitter's IPO; Braced for a "Super Typhoon"
Aired November 7, 2013 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JAKE TAPPER, CNN ANCHOR: I tried to buy 200 shares of Twitter today, but somehow I ended up with 200 boxes of the game Twister, hashtag firemybroker.
I'm Jake Tapper. This is THE LEAD.
The money lead. How much are your 140 character-quips and an unlimited stream of snark and selfies worth? Well, enough to mint some brand-new millionaires and billionaires on day one of trading, Twitter running out of characters to fit all the zeros it made investors today.
The national lead. The FDA moving to ban trans fat from everything, everywhere. Does this mean Americans will have to buy their Big Macs on the black market Web site Silk Road?
Plus, the pop culture lead. It won song of the year at the Country Music Awards. Now meet the man who inspired the moving and tragically real story behind the song "I Drive Your Truck."
Good afternoon, everyone. Welcome to THE LEAD. I'm Jake Tapper.
Today, we are going to begin with the money lead. A million dollars isn't cool. You know what's cool? A billion dollars, to borrow a phrase. In the year since the popularity of Twitter exploded and changed everything from the way we get our news to the way celebrities feud, one question has been asked over and over. Can a social media service that allows anyone to post anything, no matter how brilliant, no matter how inane, in 140 characters or less, can it actually make money?
The answer, at least for investors today, a resounding yes. Twitter just finished its first day of trading, immediately leaping over its initial public offering price of $26 per share as soon as it opened, this despite the fact that Twitter has never actually turned a profit.
The company's revenue is growing, but the company has reinvested much of it.
Our Alison Kosik is live on the floor of the New York Stock Exchange.
Hey, Alison, hashtag hi. Alison, how much did Twitter make today?
ALISON KOSIK, CNN CORRESPONDENT: Well, considering Twitter was trading anywhere between $44 and $50 today, that means Twitter is worth about $25 billion.
Not too bad, huh, considering this company, as you said, has yet to turn a profit. In fact, it has lost $134 million just this year. But look where it closed today. I want to show you something interesting. It closed at $44.92, so just before the closing bell today, just a couple minutes ago, it was starting to lose steam. Not sure if that's ominous, but one trader is questioning, you know, how sustainable this kind of price is, considering it was a huge jump from the original IPO price of $26, which the institutional investors got.
The regular investors got it for about $45. Now, this was a huge day for Twitter. It made its public debut right here at this trading post, right here along Twitter row. The blue blocks were placed right along here along the floor here at the New York Stock Exchange. There was a lot of excitement. There were crowds here.
Sure, the crowds have thinned and now the big question is, can Twitter keep up this momentum, Jake?
TAPPER: All right, Alison Kosik, hashtag thanks.
Compared to some of the other older companies trading with similar pricing like Macy's and Best Buy, Twitter is a baby. Excuse me, a hatchling. The company's only 7 years old, founded in 2006. Since then, there has been enough behind-the-scenes backstabbing at the company, particularly with the founders, to fill an entire season of "Days of Our Lives."
It's here all in our latest LEAD read, "Hatching Twitter." It's a true story of money, power, friendship and betrayal. The author and "New York Times" business columnist, Nick Bilton, joins me now from New York City.
Nick, nice timing, my friend. Nice timing on the publishing of this book.
NICK BILTON, "THE NEW YORK TIMES": Hashtag hi, Jake.
TAPPER: Let's start with Twitter's IPO. You said you think the company is actually undervalued.
TAPPER: Why do you think that?
BILTON: I said that when they were going public today at $26. I think at $44, or $45, whatever it closed at, that's a pretty big number. I don't know where it's going to go from there. But it was amazing. I think what's really fascinating to me is some of these founders that I wrote about in the book, at the end of the book, I say that they are going to be worth hundreds of millions or a billion dollars, and they actually doubled their worth today. Some of them that were worth a billion are now worth two billion. TAPPER: These four men who were there at the beginning of Twitter, Evan Williams, Jack Dorsey, Noah Glass, and Biz Stone, who you profile in your book, not only a rocky start at the launch of Twitter, but things really got nasty between the friends when it came to figuring out who was the best person to run the company.
So the story is, you know, there's these four founders, these guys that came from all over America. Evan Williams grew up in a farm in Clarks, Nebraska. It's like a town of 250, 260 people. Biz Stone grew up on welfare. Noah Glass was born on a commune.
And they all went to San Francisco to Silicon Valley in search of what we call the modern-day dream, tech money, and they came together and they were four very close friends, and they accidentally built Twitter, and as a result, completely tore their friendships apart. Some of them ended up as billionaires, as we saw today, and some of them ended up with actually next to nothing.
TAPPER: What you write and capture really well in the book is -- one of the things is the frustration that Ev Williams in particular felt about Jack Dorsey talking to the press, making it sound as if he was the sole inventor of Twitter.
TAPPER: I actually interviewed Dorsey back in March. I want to play some sound. Here's what he told me about the start of Twitter.
(BEGIN VIDEO CLIP)
JACK DORSEY, CO-FOUNDER, TWITTER: When I moved here in 2000, I realized I had this beautiful picture of the city. I could see like these swarms to the Met when there was a show in taxicabs, where I could see emergencies happen in real time, but I was missing the people.
Where were the people, what were they doing, where were they going? And that's where the idea came from. What if you could, anywhere you are, just send out what you're doing, where you are, where you're going, and anyone could receive it?
(END VIDEO CLIP)
TAPPER: So that's the kind of language I think that probably infuriates some of his co-founders. Who invented Twitter?
BILTON: Well, it certainly wasn't just Jack Dorsey alone. It was everyone that was in the room at the time. There were 12 people that worked at this company called Odeo. It was a podcasting company that created Twitter.
But the real genesis I think came from Noah Glass and Jack Dorsey. And it was one night in a car. They were drunk, and they had been out drinking and dancing, which was a typical affair when you're in your late 20s out in San Francisco. And Noah Glass was going through a really terrible divorce and he -- and his company was failing, and he was talking to Jack, and Jack had this idea of the status update, where you could update your status and your friends would be able to see what you were doing.
But it was very simple, it was very simplistic. And Noah -- and people had heard it. There were similar things out there, and Noah had this realization, being how lonely he was with his divorce and everything, that if you could use it to connect to people and feel -- quote, unquote -- "less alone," that you would actually be able to use the service in a completely different way, and then once you brought in Evan Williams and Biz Stone, who had pioneered blogging, it took on this entirely different life form and together, the four of them and the other people that worked there created what it is today.
TAPPER: So we only have about 45 seconds left. I guess my basic question for you is, how are they going to make money? For people, all these people investing who have hopes that Twitter is going to be able to actually deliver profits, how are they going to be able to do that?
BILTON: Well, the company can be profitable today. They have acquired dozens and dozens of companies. They are now up to 2,000 employees and this year, they are going to make about $640 million in revenue. Next year, it will over $1 billion. They are making money. They are just choosing rather than to say that they are going to be profitable to actually reinvest that money within the company.
And I think that that's going to continue to happen. And this public offering, they were originally supposed to raise over $1 billion. It's now gone over $2 billion. That's going to go to expanding internationally, hiring new employees and continuing to get it to that point where they are a profitable company.
TAPPER: All right, Nick Bilton of "The New York Times" and the new book "Hatching Twitter," thank you so much. Good luck with the book.
BILTON: Thank you. Appreciate it.
TAPPER: Coming up next, it's what makes some of our foods taste so good and last so long, but soon that one little ingredient could be illegal. Does that mean the end of your favorite snack?
Plus, the hits keep coming for Toronto Mayor Rob Ford. A new video, no, not that video, but a new one has surfaced of the mayor enraged talking about murdering someone and it might just make the next great YouTube remix. That's ahead.
TAPPER: Welcome back to THE LEAD.
Time now for our national lead.
And as you can see in front of me, I had a bit of a craving during the commercial break for some artificial trans fats. Yes, I will admit it, my weakness is partially hydrogenated oil used in many of my and your favorite foods, to lengthen shelf life and help preserve its oh- so-processed flavor.
But the Food and Drug Administration today took its first step in depriving us of our right to indulge. They announced that trans fats do not meet the requirement of being -- quote -- "generally recognized as safe."
The FDA is now taking preliminary steps to remove most trans fats from the food supply. But we should note that process could take years and the food processing lobby spent $28 million this year alone. So the big question, of course, is banning trans fats a good idea, or should the focus really be on educating Americans on healthy eating options and letting them have a choice?
Well, let's bring in a local chef that you may recognize. Mike Isabella, he's the owner and chef of Graffiato and Kapnos, and appeared on season six of "Top Chef" and "Top Chef All-Stars." He supports a potential ban on trans fats. In New York, we have Josh Barro, the politics editor at "Business Insider," and he opposes the government proposing this ban.
Mike, let's start with you. Do you use trans fats when you cook?
MIKE ISABELLA, CHEF: No, I do not use trans fats. In Graffiato, Kapnos, G, all of my restaurants, I don't use it at all. We really work with farmers, we do local sourcing, we work with seasonality.
We don't really use it. We haven't used it ever. We make everything from scratch, everything fresh. And even if we wanted to preserve stuff, we would do more of a classic style, things like preserving, pickling, smoking, curing. But, no, we don't use it at all. And I'm definitely not planning on ever using it.
TAPPER: Right. But, of course, you are a chef at some fancy restaurants in which food is fed immediately.
These trans fats can help preserve food on the shelf. You see these things are all in boxes. They're not fresh plates. And so why would you not support a ban?
ISABELLA: Well, I also too have a fast casual restaurant, which is like a sandwich shop, and we have cakes and things like that.
And our cakes -- sugar is also a natural preservative. Butter is also a fat, a natural preservative. A lot of that stuff already that we're using in the foods is natural preservatives that is going to help keep the products longer. If you really know how to work with it and use it, you don't really need to use something that is synthetic that's really not even food.
TAPPER: So, not necessary is what you're saying.
ISABELLA: No, not necessary. TAPPER: Josh, when things are deemed unsafe, it doesn't seem unreasonable to ban them, right, especially when children may be choosing certain foods when their parents aren't around. There is this obesity epidemic in this country. Why do you oppose the ban?
JOSH BARRO, "BUSINESS INSIDER": Well, I just think, generally, the government shouldn't tell people what they can and can't eat.
There are all sorts of lifestyle choices people make that are unsafe. Eating 4,500 calories a day isn't safe and smoking and drinking too much aren't safe. And I think the government generally takes the right approach to those sorts of things, which is that we do things to discourage people from smoking or from drinking too much, but we say if adults want to make these informed decisions, they're allowed to.
That's why the FDA has required since 2006 that foods be labeled as to their content of artificial Trans fat, and that's been working. Consumption is actually down about 80 percent over that period.
So, consumers have been making informed healthier choices. I think informing them has been working. We don't need the government to actually come in and tell people that they're not allowed to eat certain things.
TAPPER: Josh, do you think this discriminates against poor people in some ways?
BARRO: Well, I think there is a cost element to any time you impose food regulations and I think, you know, a lot of the -- no offense to Mike -- but a lot of the sort of restaurateur perspective on this is coming from a higher end place where these marginal increases to food costs don't matter so much. I do think that they -- you know, the food cost increases might not be that big but I think we should tread lightly about imposing new regulations that add increased cost, especially when we're seeing that free consumer choice is working to move people toward better choices in this area.
TAPPER: Mike, I assume that you have the most healthily developed palate in this building and possibly this zip code right now. What is the taste differential between a Trans fat, you and I were looking when they were bringing these out. White Castle burgers, I mean, that's good eating. You got -- I mean, that's delicious. White Castle burgers are delicious.
MIKE ISABELLA, "TOP CHEF" ALUMNUS: It is delicious. It's also delicious after a couple drinks. But -- I mean, if I'm working with a product, it's just as easy to make something just as tasty to get, you know, ground beef from the store, a piece of cheese, some onions and some bread and you will have the same thing. It's really saving you some time, a couple of pennies here and there, but it's not like something major where this tastes so much better than what you can make at home. It's really more about time and products.
Trans fat doesn't make things taste better. It's really something that I wouldn't -- I wouldn't use. TAPPER: Josh, we have seen this movement away from Trans fat. McDonald's says it no longer uses Trans fats in its fried food. New York City, of course, has a ban on artificial Trans fats in restaurants.
If there's success in New York and it's healthier for people, why not move it to a national level?
BARRO: Well, again, just because I think the market is working this out on its own. Now, I grant that part of what has moved restaurants like McDonald's in that direction is the fact you had the New York ban. They had to make these changes in New York City and a lot of cases they said, well, it's not that difficult for us to make this move, let's make it nationally.
But it looks like there are certain products, microwave popcorn, for example, where Trans fats seem to be actually, you know, a significant advantage in those products and that's why they're persisting there even when we've seen this overall big reduction in Trans fats.
So I think, you know, in a lot of cases it's not that hard to not use Trans fats and I think the market has been pushing people in that direction with an assist from New York. But it's still a very heavy handed thing to have the FDA come down and basically say everywhere, no artificial Trans fats.
TAPPER: Mike, final word. I just want to basically sum up your position. As a chef, you're saying you don't need Trans fats, they don't taste better, and you can -- there's absolutely no reason for it other than for cost and it's not even worth the cost when you consider the health effects.
ISABELLA: Yes, that and also it does preserve it. It can sit on the shelf a lot longer and it's really the big companies that are going to have to make the change on this, because they're the ones that are using the Trans fats. All the smaller companies and businesses aren't really using it.
So, if they can continue to work the same way we are, I think all the prices of butter and things like that will come down and it should make it hopefully all the prices are around the same and you are getting a better product.
TAPPER: All right. Mike Isabella and Josh Barro, thank you so much. Good debate. We appreciate it.
Coming up on THE LEAD: Rob Ford is hoping to put his troubles behind him, but that might be a little harder now. A new video just surfaced of the mayor in what appears to be an impaired state. We'll have that just ahead.
Plus, Netflix's new deal with a comic book titan. Which super heroes will be coming to a television near you?
(COMMERCIAL BREAK) TAPPER: We have some breaking news in our world lead on THE LEAD today. It's being called one of the strongest storms ever observed, a super typhoon. It's about to make landfall on the Philippines. Thousands have already been relocated as this thing barrels towards land.
I want to go to Andrew Stevens. He's in the Philippines.
Andrew, how big and how devastating is this typhoon expected to be?
ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: Well, Filipinos are certainly very used to extreme weather, Jake. They get 20, 24 storms every year. Amongst those, there are usually category 5.
But this one is something different, at least that's what the weather forecasters have been saying on the local networks here and also international storm chasers have come here as well. It's just about 5:30 in the morning here and the wind has just started in the last 30 minutes or so to pick up significantly. Quite strong gusts now but it's just nothing compared with what we are expecting.
Expecting landfall in about two and a half hours, gusting, the latest reports say, between 270 and 300 kilometers an hour. That's almost 200 miles an hour, Jake. Gives you an idea of just how big this storm is.
It's been eerily quiet so far which has allowed preparations to be completed, what preparations they can make. As I say, the Philippines is very used to this, so thousands have been evacuated but as we flew in, last night to this island we're on, all along the coastline, you can see lines of shanties and you wonder how many people have actually moved up. Thousands, the officials say, but we are talking in this region alone, perhaps 1.5 million people in the path of the storm.
TAPPER: Andrew, beyond evacuations, how are people preparing for this? As you point out, it doesn't sound as though there really are enough hardcore structures for people to be able to survive if they don't evacuate.
STEVENS: It's interesting, we had a look at half past three this morning at the main relief center which is a basketball stadium in the middle of town. Only 5,000 people there, Jake, considering this storm is only a few hours away, you would have expected a lot more.
They do say more will come in but it does suggest that most people, as I said, they are used to extreme weather. They don't want to leave their houses in many cases. They want to stay and protect what's theirs. And they will hunker down. They are used to it.
One of the big problems not just the low-lying coastal areas and the storm surge that will happen, we don't know how big it's going to be but some reports say it could be significant, 15 feet, perhaps, apart from the low-lying coastal areas, you've got the hillsides in the mountains which is very, very prone to land slips. So, you're going to get a heavy, heavy rain. This is an area which is regularly hit by earthquakes. A lot of the areas in the hills are already weakened. We had a big earthquake here just about a month ago.
So, coming from several different angles on this, people are facing land slips, flash floods and of course, storm surge in low-lying areas.
TAPPER: All right. Andrew Stevens, stay safe, my friend. Thank you very much.
Let's get in and check in with our political panel in the green room.
Hilary Rosen, I want you to picture yourself, you're sitting on the couch. You're watching television. The phone rings, and the thunderous baritone of Vice President Joseph Robinette Biden Jr. Suddenly bellows into your ear canal, you son of a gun, you did it.
He's, of course, erroneously congratulating you on becoming the new mayor of Boston, Massachusetts. What's your response?
HILARY ROSEN, CNN CONTRIBUTOR: Oh, my God, Mr. Vice President, you're the only one who thought I could be mayor of Boston. You're the only one who believed in me.
TAPPER: We should point out, that actually happened to a guy in Beantown Monday night. Vice President Biden called the wrong guy.
Stick around for more politics when THE LEAD continues.