BUSINESS-01
into Brexit Debate; Trump Shows Off Products to Defend His Business, But
Are They Real?; Michael Horn CEO of Volkswagen American is Stepping Down;
Square's Earning Top Expectations; Square Stock Up Sharply in After-Hours
Trading; "Go" Champion Duels Google AI for $1 Million Prize; Lily Cole Says
that Illiteracy is a Barrier to Independence for Women. Aired 4-5p ET - Part 2>
Sebastian, Christian Amanpour>
Michael Chen; Lily Cole>
enough delegates needed to win by the convention. Mitt Romney questioned
Trumps claims about running successful businesses. The British press drags
the Queen into the "brexit" debate. Buckingham palace not at all amused.
CNN did the research and Romney was right, the magazine when bust and
winery is owned by Eric Trump, his son. Trump University is committing
fraud says New York Attorney General. Trump is fighting three class action
lawsuits, two in California and one in New York. Jack Dorsey, CEO of
Twitter and Square announces Square expects to turn a profit by the end of
the year. Square's fourth quarter revenue of $374 million beat
expectations. Lee Sedol, the World Champion Go player, lost his first game
to Google DeepMind Alpha program. Many experts thought artificial
intelligence was 10 year away from this wonderful achievement. Literacy
for women is fundamental to solving the gender gap. Lily Cole says culture
is behind most of our problems right now to close the gender gap.>
Stock Markets; Technology>
Meantime, Nancy Reagan's casket has arrived at the Ronald Reagan Presidential Library in California ahead of her funeral on Friday. The former U.S. first lady will lie in repose for two days. Ms. Reagan died Sunday of heart failure. The current First Lady, Michele Obama, former First Lady, Hillary Clinton, they will both attend the funeral.
Buckingham Palace has issued a complaint about front page story in the Sun newspaper today, saying that the Queen thinks that Britain should leave the European Union in a Brexit. A statement said that Queen Elizabeth remains politically neutral and it is up to the British people to vote on the issue come June.
George Martin, the music producer, known as the fifth Beatle, has died. Martin signed the Beatle's into their first recording contract that produced many of the band's largest hits. He was knighted by Queen Elizabeth in 1996. He died at his home in London on Tuesday. He was 90 years old.
Carly Fiorina says Ted Cruz can beat Donald Trump, and he's the only one who can do it. Hewlett-Packard's former chief executive has joined the company's current CEO Meg Whitman in opposing the Republican front-runner. Trump famously criticized Fiorina's appearance early in the primary season. You'll recall that. While Whitman has questions Trump's business acumen, calling him unfit to be president. Speaking at rally for Ted Cruz today, Fiorina took that one step further. She said she is horrified by Donald Trump.
(BEGIN VIDEO CLIP)
CARLY FIORINA, FORMER REPUBLICAN PRESIDENTIAL CANDIDATE: We're not going to beat Donald Trump by having leaders in our party tsk, tsk over our voters. We're going to have to beat Donald Trump at the ballot box. The only guy that can beat Donald Trump is Ted Cruz.
(END VIDEO CLIP)
HARLOW: So far there is no sign of a Trump slow down though. Polls show he is leading in Florida less than a week before that winner take all primary. A Trump win in Florida could deal a fatal blow to Florida Senator Marco Rubio. Donald Trump spoke with Anderson Cooper just a short time ago.
(BEGIN VIDEOTAPE)
ANDERSON COOPER, CNN ANCHOR, ANDERSON COOPER 360 : A huge night last night. Did you have any idea that you were going to win as big as you did?
DONALD TRUMP, U.S. REPUBLICAN CANDIDATE: Well I felt good. Mississippi I was there three or four times. And it was like a love fest. So I felt very good about it. Michigan has been great. It's been great for me for a long time. I have so many friends there. And I had no idea it would be that big.
[16:35:00] COOPER: Do you think it's the message on trade particularly in Michigan that was effective? Because we see Sanders winning as well there with a very similar message on trade.
TRUMP: I think they want strength. I think they want military. I think they want to take care of vets. I think they hate Obamacare. But I would say ultimately it's about jobs and the economy. And you know, Michigan has been stripped. You look at those empty factories all over the place. And nobody hits that message better than me.
COOPER: Two new polls out today, Quinnipiac, also CNN/ORC both showing essentially the same thing. You are way ahead here in Florida almost I think two to one against Rubio. And even in Ohio, leading Kasich six points or seven points in each poll. If you win Florida, if you win Ohio, is it over?
TRUMP: I think so, yes. I think if I win those two I think it's over.
COOPER: If you win Ohio, Kasich drops out, and you win Florida and Rubio's gone. And it's just you and Cruz, if you don't get all the delegates needed to win by the convention --
TRUMP: Well, I think if I win Ohio and if I win Florida, you have got to be pretty much assured of getting it.
COOPER: You think you will get all the delegates?
TRUMP: I think so, yes. I really think so. I don't see the convention going that route. I see probably getting the delegates. It is a like the fighters. That's the ultimate way of doing it. You knock them out. If you knock them out, nothing more can happen.
COOPER: You would go for a knock out.
TRUMP: I'd rather go for a knock out.
(END VIDEOTAPE)
HARLOW: Well, it was part victory speech, part infomercial. Donald Trump celebrating his primary wins on Tuesday night all while standing next to a table piled high with Trump branded merchandise. It was a response to Mitt Romney and others who questioned his claims about running successful businesses.
(BEGIN VIDEO CLIP)
TRUMP: So you have the water. You have the steaks. You have the airline that I sold. I mean what's wrong with selling? Every once in a while you can sell something. You have the wines and all of that. And Trump University, we're going to start it up as soon as I win the lawsuit? Does that make sense? I mean, that's it. OK.
(END VIDEO CLIP)
HARLOW: Here to separate the sizzle from the steak, and fact from fiction, our very own Clare Sebastian who has been running all over New York City getting all of these items, and we're going to pore through them. You got a lot successfully. Let's begin. What did you find?
CLARE SEBASTIAN, CNN REPORTING: Well, we're going to start, Poppy, with the one I didn't get, and frankly the most interesting to have on display at a political rally, the raw steaks. Now Donald Trump did used to sell Donald Trump steaks. We found it on a website called the Sharper Image. Which as you know, sells high tech and lifestyle products. A rather unusual item for them. It is still on the site, but has been discontinued they told me in 2008. They still do have a rather bizarre tribute to him though. Take a listen.
(BEGIN VIDEO CLIP)
TRUMP: Just raise the stakes. Trump Steaks are the world's greatest steaks. And I mean that in every sense of the word.
(END VIDEO CLIP)
HARLOW: OK. So Claire, there are the steaks he had next to him last night. Do we know if those are even Trump steaks?
SEBASTIAN: Well, I mean they have been discontinued, Trump Steaks. Of course that bares a question where these rather nice looking raw steaks came from. There's been a lot of rumors online that they came from a Florida company call Bush Brothers. That's a wholesale meat company. I contacted them. They would not confirm or deny whether those were their steaks, but they did say that they are a supplier to the Trump Hotels and Resorts in Florida.
HARLOW: All right, so what did you find? Because you have a bag of --
SEBASTIAN: Yes, we had a rather successful shopping trip in New York City today. As you see the Trump branded bag.
HARLOW: They are from Trump Tower on Fifth Avenue.
SEBASTIAN: Exactly and we found Trump wine.
HARLOW: OK.
SEBASTIAN: So now I'm going to tell you a little bit more about Trump wine. This is actually from a winery owned by Eric Trump, Trump's son that is based in Virginia. They produce about 40,000 cases of this and this is one of the best sparkling wines.
HARLOW: So it's quite successful.
SEBASTIAN: It's quite successful. They also have around 100,000 visitor every year. But this is Eric Trump's business, not Donald Trump.
HARLOW: No Donald, OK.
SEBASTIAN: Nor is it, as Donald Trump claimed, the largest winery on the East Coast. It is not. Plenty of other wineries that have more wine. Particularly we found in North Carolina that more than 10 times the number of cases per year.
HARLOW: So you might want the drink the whole thing before the show.
SEBASTIAN: Yes, I wanted to. The team had test out the products. Here we are Poppy, the -- here in the bag -- to the Trump water. We've got a few bottles in here.
HARLOW: It just becomes a question is this actually his water? Or are they just putting the Trump label on mass produced water that's sold to anyone who wants to put their name on it?
SEBASTIAN: Well, that's the key question, Poppy. This is on the bottle it says, bottled in Willington, Connecticut. We found a bottling company in Willington, Connecticut, called Village Springs, and they did confirm to us that they do produce and bottle this water. It simply carries the Trump brand, and it's sold in the Trump properties like Trump Tower and the hotels.
HARLOW: So they sell that to a bunch companies who put their own logo and branding on it.
HARLOW: You can put your branding on it. Yes, that happens with a variety of different products. That is Trump water but he does not produce that.
Now we come to the question of the magazine that he held up.
HARLOW: Right. Because Mitt Romney had said this magazine went bust, et cetera, and Trump is saying it didn't.
SEBASTIAN: Well, Mitt Romney is correct. There was a Trump Magazine that did fold in 2009. That was kind of a luxury lifestyle magazine. But the magazine that Trump was holding up, you can see it there, this is the same thing. It's called the "Jewel of Palm Beach."
[16:40:00] It's produced by a company called Palm Beach Media Group. It's an annual publication exclusive to Trump's Mar-a-Lago Resort in Florida. It's also in the hotels in New York, which is where I picked up this rather well-thumbed copy today.
HARLOW: So it comes out once a year.
SEBASTIAN: Once a year.
HARLOW: And no one buys it.
SEBASTIAN: It's free. Like any magazine you'll get a hotel.
HARLOW: So it actually cost him money.
SEBASTIAN: Well it is part of the branding around the hotel. It's got lots of articles about the Trump properties and nice pictures of interviews and that.
HARLOW: But the Trump magazines that were sold have been -- that was discontinued.
SEBASTIAN: That's a business that folded.
HARLOW: So really key here in all of this. It's one thing to talk about water or magazines. When you talk about someone's education. Trump University is now closed for now. They're going through a lawsuit. And a number of people claim that they were ripped off. That they didn't get the education they paid for. Last night he down played that, and call it sort of a small lawsuit.
SEBASTIAN: He said he would be able to reopen Trump University once he became president and he is sticking by this. But as you know, there is not just one lawsuit there is three lawsuits. The two class action lawsuits in California. There's another one in New York that was brought by Eric Schneiderman. Now, he is not backing claim. He said these claims are extremely serious, Poppy, this is what he told CNN's Chis Cuomo, last week.
(BEGIN VIDEO CLIP)
ERIC SCHNEIDERMAN, NEW YORK ATTORNEY GENERAL: This is equal of someone of him putting up a sign saying Trump hospital when it's not, and when he people in it aren't nurses and doctors. That's basically what he did. You can't commit fraud. It is not a light charge. It is a serious charge for someone who wants the public trust to take a much more important role.
(END VIDEO CLIP)
SEBASTIAN: So there you have it, Poppy. The Trump University claims obviously very serious. Pulling all of this together. We have got the steaks which have folded that business. We've got the magazine business, this is just a free magazine that goes with the hotels. This belongs to his son. And this is just water bottled by someone else and carrying the Trump brand.
HARLOW: So of those five business, three have folded, those two exist.
SEBASTIAN: Exactly.
HARLOW: OK, Clare, thank you very much. Appreciate that fascinating report and look at that.
HARLOW: This just in to CNN. Volkswagen has announced that its top U.S. executive is stepping down. The company says that Michael Horn will leave VW to pursue other opportunities effectively. Horn served as president and CEO of Volkswagen America since 2014. This obviously all comes after the emissions scandal and investigation. We'll have more on that ahead.
The company is Square, and the stock has been pair shaped. Its earnings are just down and show Square's business may finally, finally be straightening itself out. A live report next.
(COMMERCIAL BREAK)
Hayman's company Square has brought in more money than expected. It reported revenue of $374 million for the fourth quarter of last year. Those numbers just out. It expects to turn a profit by the end of this year. This is Square's first financial report card since the company went public in November. A lot of questions about CEO Jack Dorsey, obviously the CEO of Twitter as well. And he must be breathing a big sigh of relief right now. As I said, he also serves as CEO of Twitter, and some investors have worried, you know, it's hard to run two companies at the same time and how do you give them both the attention they need. Shares of Twitter and Squares of twitter have had a rough ride thus far in 2016. Both now bouncing back slowly. Samuel Burke here with us to break down the results. Let's go through the numbers.
SAMUEL BURKE, CNN MONEY, BUSINESS CORRESPONDENT: Well, the basic number that I'm most interested in is transactional revenue. That's actually how much money is going through from the consumer to Square when you swipe a card in one of their little devices, the little square up there.
[16:45:00] And that was $299 million. People had expectations of about $300 million. So right in line with expectations. That's the most important number. That's why the stock is up more than three percent after-hours.
HARLOW: But their business model is changing. We are used to the little white square that plug into the phone, taxi drivers here in New York use, a lot of merchants use. That's actually changing, so people won't have to buy the physical item anymore.
BURKE: Exactly. So people are used to seeing the device that you're seeing right on your screen right now. You swipe your card there. But actually they are taking advantage of Apple Pay and Android Pay. Those new payment platforms that are built right into phones. So instead of having to sell those devices, let's I want to start a business tomorrow and charge Poppy Harlow for something. All you have to do is have your credit card go near my phone and that might be it.
HARLOW: But is there a concern about that does to their business. I mean how much revenue - because it doesn't cost a lot to produce this Square.
BURKE: Yes, a lot of times they were selling it at loss or sometime even just flat. So it's actually very good for their business because anybody what's to go in and start using Square doesn't even have to buy anything. They can just start using it right away.
HARLOW: And they take a percent of that.
BURKE: Exactly. So analysts are excited about that technological change.
HARLOW: So what about this concerns over Dorsey. Clearly a very accomplished young man. He is still a young man to be CEO of Twitter and Square. But is the concern justified? That how can you run two companies successfully and really keep your eye enough on both?
BURKE: Well, it has been justified for the past almost year when people were seeing the stocks go down so much for both of these companies. Square has been hit incredibly hard, twitter even harder. So people have been saying, "Look this just isn't working out." So certainly like you said people are going to be breathing a sigh of relief not just for Jack Dorsey, but for Twitter. Because it takes the pressure off of Square and it takes the pressure off of Twitter, which is of course a consumer focused company with a broader base of clients. So really I think, people on both sides of that street, because they are right by each other, are very happy right now.
HARLOW: Right, but one quarter does not a trend made. Do you feel confident this is a turning of the corner truly?
BURKE: I don't think you can say this for either of the companies yet. Because this is the first earnings report for Square and it's just a little bit of a relief for Twitter. When you look at that, wow, it makes you -- this is year to date actually. So actually that one over the last couple of months things have been --
HARLOW: Also kind of in line with what the market has been doing.
BURKE: They've both taken a hit because of what is happening with tech stocks. They've all been hit pretty hard. So they're coming back. I don't think you can say they have turned the corner yet. At the end of the day we have to talk about Twitter. They have a major problem. User growth is actually down in the United States at least. Their most important market.
HARLOW: Really.
BURKE: Yes. You know, traditionally with tech companies, it's been, "Well, they can add users, but they don't know how to make money." Twitter knows how to make money but haven't been adding users right now. So you can't not say they have turned a corner when they're dealing with issues like that.
HARLOW: Samuel Burke, thank you so much. Appreciate it so much.
Here in the United States looking at the markets. U.S. stocks managed small gains on Wednesday, as oil prices surged. The Dow closed the session just 36 points higher. Just above that 17,000 point mark, for really, when you look at, sort of the finest of margins. Investors are cautious ahead of the ECB policies meeting. That of course takes place on Thursday.
And now it is an ancient Chinese game with a seemingly infinite amount of allowable moves, seriously. You're going to see this firsthand. The world champion has been beaten in a match by a computer program. We'll have that for you in a moment, and a live-display of me attempting to play it. But first a highlight from "MAKE, CREATE, INNOVATE."
(COMMERCIAL BREAK)
HARLOW: Many in the technology world overjoyed tonight. Not because of a rocket launch or a ground breaking discovery. It is because of a board game competition. An artificial intelligence program built by Google has defeated the world champion of the ancient Chinese game Go. Lee Sedol, that is the world champion, lost his first game against Google DeepMind's AlphaGo program in Seoul. The South Korean is scheduled to play four more matches against the computer in a best of five series.
Tesla founder Elon Musk tweeted this, "Congrats to DeepMind! Many experts this the field thought AI was 10 years away from achieving this." Michael Chen is with me, he is one of the top Go players here in United States. He won the North American championship when he was just 16 years old. That was back in 2006. He is with me now. Congratulations. Nice to see you.
MICHAEL CHEN, 2006 "GO" NORTH AMERICAN CHAMPION: Thank you.
HARLOW: Nice to see you. Thank you for coming in. I have no idea what this is. How to play this. What does it take to be good at Go? Because we have black and we have white.
CHEN: White.
HARLOW: What does it take to be good?
CHEN: So it takes basically a lot of computing power, calculations, which is our brain. And it takes a certain kind of intuition, which is judgment, whether this is big or small.
HARLOW: Do if you and I were playing and I -- could I start?
CHEN: Yes.
HARLOW: So if I went like that, then what would you do?
CHEN: I would probably try to kill you.
HARLOW: Kill me?
CHEN: So you can kill someone by surrounding it. So for example, if you place some random moves, then I will try this around you.
HARLOW: On all sides.
CHEN: On all sides. On the four adjacent sides. So now, do you want to switch colors?
HARLOW: Sure, I want to be the winning color.
CHEN: Do you know how to --
HARLOW: Like that.
CHEN: Exactly, and that kills my stone.
HARLOW: And then you put it back in there.
CHEN: Right.
HARLOW: Got it.
CHEN: And so this would be your territory.
HARLOW: Why is it so much more difficult than chess? I know when you look at possible board positions, there are more I read than there are atoms in the university.
CHEN: Yes. That's true. If you look at it it's 19 x 19, 361, multiply that by 360 and so on, you get a very large number very quickly. So the real challenge to this game is the judgment.
HARLOW: Judgment.
CHEN: Human intuition.
HARLOW: And the human intuition, but a computer won.
CHEN: Exactly. And so that's -- there is two -- basically, there is two fundamental advancements here. One is so the computer has mastered Go. It's exactly the same as Garry Kasparov getting beaten by Deep Blue, except this time there is no other game left. Go is the most wonderful game humans have created.
HARLOW: Do you believe -- two things. Do you believe a computer could beat you at this?
CHEN: Yes.
HARLOW: You do?
CHEN: Definitely.
HARLOW: When we look at sort of the bigger picture of artificial intelligence, AI here and advancement made. Again, experts said this couldn't happen for ten more years and it has happened. Does this tell us more about the ability of the machine to be human or of the way that machine and human can work together?
CHEN: Yes, that's exactly, I think the most crucial point about this. DeepMind's AlphaGo, he became a world champion level player because in addition to the computing power of the computer, they've added human touch, the judgment.
HARLOW: Judgment.
CHEN: And that's what makes us the most wonderful event that has happened in the field recently.
HARLOW: The most wonderful event.
CHEN: They've mastered the most complicated game, the most wonderful game, by adding a part of something that makes us all human.
HARLOW: But remember who that computer was built by -- humans.
CHEN: Humans.
HARLOW: Thank you so much. Very nice to meet you. Congratulations on all your success. Thank you so much.
CHEN: Thank you very much.
HARLOW: Well, this week the education gap has been in the spotlight as the world celebrated International Women's Day. Literacy is a crucial element to economic independence for both men and women. Model Lilly Cole recently addressed the U.K. Parliament about the importance of literacy programs. And Richard asked her what the major barriers are when it comes to closing that pay gap between men and women.
(BEGIN VIDEOTAPE)
LILY COLE, MODEL & ACTRESS: I think culture has an enormous part to play in it. I think culture is behind a lot of our problems right now. If you look at something as fundamental as literacy. Two thirds of the illiterate community around the world, which is 757 million people, are women.
[16:55:00] And literacy -- if women are illiterate that's a barrier then to education, which becomes a barrier to economic independence, which then becomes a barrier to equality. So I think there's multifaceted problems. I think economics play a huge role I think, education plays a huge role, and of course underpinning all of that is cultural issues and potentially even the biological implications of carrying children and having children.
RICHARD QUEST, CNN ANCHOR: The issue of literacy in the agenda of the gender debate, you have chosen literacy as being if not the top, at near the top. Why is that?
COLE: I've been interested in literacy recently because there is data that goes to show that literacy has a huge impact on many, many different social issues, including women's issues like female genital mutilation and the fact I just mentioned around how many -- how high the proportion is of female illiteracy is. But then you also see issues like if you increase female literacy by 50 percent, you decrease infant mortality by 30 percent. So the implications of educating women are very profound. I don't think that's a singular problem that women have, but literacy is I think a key that we have to unlock many different problems including gender specific ones.
QUEST: And how important do you consider it to be? As somebody who has made their name in the fashion industry and in the modelling industry, which arguably -- I mean, we can debate the rights and wrongs about -- but arguably is amongst the most ephemeral of industries in materials of the look rather than the substance. How important is it for you to delve deeper beyond that into these sort of issues?
COLE: Well, I only have ever modelled part-time. I always stayed in school. I went through University. So I've been very privileged in terms of the education I've had. So, and interestingly fashion is only one of the industries actually biases women, and women or female models anyway, are often paid more than male models. So I think I probably had an interesting perspective on it. But I don't see that part of my career really of having any bearing in terms of thinking about these issues. I think I would think about them regardless of having doing done that job or not.
(END VIDEOTAPE)
HARLOW: Fascinating interview. Quick break. We'll be back in a moment.
(COMMERCIAL BREAK)
HARLOW: All right, that's all we have time for this evening on QUEST MEANS BUSINESS. I'm Poppy Harlow. Thank you so much for watching. Stay with us on CNN.
END
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