Cisco Sparkles; IRS Fallout; Dealin' with Groupon
An informative and entertaining look at the must-see CNBC moments that will sharpen your business edge today, tomorrow and beyond. What follows are some notes and quotes from the biggest stories covered on CNBC on Thursday, May 16.
Cisco Lifts the Nasdaq
Cisco Systems shares spiked roughly 14 percent, a day after the company delivered quarterly results and financial targets that beat Wall Street expectations. Cisco's broad customer base makes it a bellwether of sorts for the technology sector, so the stock's strong performance helped lift the tech-heavy Nasdaq.
"We've gotten much better at our operations, and I think that's shown in the results," Cisco CEO John Chambers told CNBC's "Squawk Box." But, he added, "we also continuously reinvent Cisco where appropriate and then stay the course where appropriate. So we are hitting on all cylinders, but I think we're doing very well versus our peers."
"What I underestimated, really, was momentum in the stock. I didn't say short it—I wouldn't short it," said trader Stephen Weiss of Short Hills Capital on the "Fast Money Halftime Report." "It's a well-run company. It's a good product, but its limited end-market, so the momentum can't continue," he said.
IRS Controversy Continues
President Barack Obama told reporters during a midday news conference that he will not assign a special prosecutor to investigate the Internal Revenue Service, which admitted to targeting conservative groups when they applied for tax-exempt status, because several congressional committees are already looking into it. Hours later, Obama asked White House budget official Daniel Werfel to serve as acting IRS commissioner, succeeding Steven Miller, who Obama fired Wednesday.
Earlier in the day, CNBC's John Harwood had spoken with Democratic Sen. Max Baucus of Montana, chairman of the Senate Finance Committee, and Republican Rep. David Camp, chairman of the Ways and Means Committee, about what's expected of their probes. Both condemned the IRS' actions and vowed to get answers about why it happened and how future violations could be prevented.
"I think that it's going to be sufficient for us to be working with Congress," the president told reporters during a midday news conference at the White House. "They've got a whole bunch of committees. We've got IGs already there. The IG has done an audit. It's now my understanding they're going to be recommending an investigation and ... Attorney General Holder announced a criminal investigation of what happened. Between those investigations, I think we're going to be able to figure out exactly what happened, who was involved, what went wrong, and we're going to be able to implement steps to fix it,"
"The key here is just ask all the questions and get the facts and let the facts determine our conclusions and where this goes to, Baucus said. "We want to—both committees have a very solid hearing and not political. ... It's not on behalf of the president. It's not on behalf of one political party or the other. It's basically ... our job on behalf of the American people. The American people, I think, want to have more confidence in what government does and does not do. It's unfortunate that this developed, but our job is to help gain more confidence by getting solid answers and following up where the answers lead."
Good Deal: the Groupon Interview
Between the failure to reverse a falling share price or stop an erosion of its main daily deals business, Groupon has struggled to turn things around. In February, the Internet company fired co-founder and CEO Andrew Mason. Many of its problems persist, but the company is still trying to fix things. Co-CEOs Eric Lefkofsky and Ted Leonsis spoke with CNBC's Julia Boorstin to help investors better understand Groupon and provide an update on the site's search for a new CEO.
"I think we were misunderstood. I think we caused a lot of that. I mean we absolutely didn't manage the process of being public as well as we could have or should have. ... We're now just intensely focused on the day-to-day business of running a great business, and hopefully we'll be less misunderstood over time," Lefkofsky said on CNBC's "Squawk on the Street."
"The board has set up a committee, and we're very active in the committee," Leonsis said. "In June, we'll formally start our search, and we're going to be very, very deliberate."
The Dimon Defense
Lately, it seems just about every executive who appears on CNBC is asked about embattled JPMorgan Chase Chairman and CEO Jamie Dimon. After problems with mortgage foreclosures and the London Whale trading debacle, shareholders have suggested splitting Dimon's two roles. Former Honeywell Chairman and CEO Larry Bossidy stood up for Dimon.
"If anybody deserves both jobs, it seems to be him, and I think it's a widespread feeling in Wall Street that he's the best leader they have," Bossidy told CNBC's "Squawk Box."