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tv   Fast Money  CNBC  July 14, 2014 5:00pm-6:01pm EDT

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>> kayla. >> banker names, tomorrow, jpmorgan, wednesday, bank of america. not only get consumer broad stories about how the consumer is doing, you'll also get how companies are doing whether they're borrowing, what sort of activity -- >> big week on that front. >> bank of america, we'll see what they say on their potential settlement. >> i'm going to book my ticket to jackson hole. thank you for now. "fast money" begins right now. live at the nasdaq market site in new york city's time square, this is "fast money." i'm melissa lee. tonight's top story, apple's influx point. the new larger screen iphone will be delayed until next year. barclay's upgrading from overweight to equal weight rating the price at $110 a share. it's at an inflexion point right now. that of google back in 2013. this is interesting, remember in 2013, beginning of the year,
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google was mired in concerns about the motorola integration and also the conversion or the transition to mobile advertising. >> right. >> here we are now, google, nice run. >> yeah, so it's a very important time. and if apple's in the same place, the question is, you know, where are they off to? and what are they doing on the innovation side and where are the new products? and certainly the wearables. this is where people think they're going to reinvent themselves. the exciting thing is they're seeing good demand on the iphone. all the numbers we're hearing from people in terms of interquarter, et cetera, say they're coming in around 37 million units, this is going to be the high end of the range. slightly changed the way they've given earnings guidance and therefore they've been beating since they started to do that the last quarter. based on the playing field, how they were doing, gross margins, sales.
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>> doesn't that push sales forward? somebody going to say, you know what, it's delayed, i'm going to a samsung. >> whether they have that out for christmas, that's a big deal. i don't know if this is true or not, i want to make sure i get the story clearly. this is the inflexion point it's going to go higher? >> go higher. >> hasn't it already inflected already, a bit? it seems a little bit late. >> i think that's a fair comment. in terms of delay, i think any delay for them just makes people want the products more. i think it actually works to their benefit in a weird way. to karen's point, we've seen the stock rally. but i understand what they're saying in terms of inflexion point. this quarter coming up, it's next tuesday they report, here we are september 2012 levels. i thought for a while, we're going to retest that 703 level which is basically 100 in the stock. i think it's an inflexion point. if we can somehow come out with a solid quarter, which is what they need to take the stock higher, what was resistant in
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forms of $100 will be support. i think you own it into earnings and at least you take off half before the report on tuesday. >> and there have been some data points in recent weeks. we got a report from samsung. samsung showed weakness. barclay's, one of the core weakness, provides a buffer for apple and an opportunity to gain market share. and then also, transition potentially to monetize the app store as well as itunes and offer more recurring services. >> i don't know how you compare. if you look at google, google is still roughly 70% of the search. >> right. >> apple is already overall smartphone under 20%, right? so it's never had a firm grasp on any one market anyway. >> well, the ipad market. >> what? >> it owned the ipad market. >> all right. developed that market, it created that out of nothing. but you're coming from a certain point in history where if -- i think apple has probably seen the best days. can it be a value stock? i'm long the name. >> you don't agree. you don't think apple saw. >> i think probably -- >> still meaningful upside,
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which is barclay's. >> no, i think you have to own a certain aspect of the market. i got excited about that bigger screen phone because i thought that was where they were going to steal some market share from android. but they were the ones that convinced us we needed a certain different size phone that you could work in one hand, not a two-handed ipad maybe tablet, fablet, if you will. they were trying to create that market, they didn't create that market. so obviously we have to go a different direction, they don't own that. >> i will say it's a new way of thinking for apple to come out with a larger screen. this was something they were not going to do. now the real, to me, inflexion point would come if they started to go with cheaper asps. i think if they wenter for the market, they would own china. they have difficult issues there, even though there's no question with the china mobile deal, they are gaining traction. i think china's a big part of the second half. >> with more on apple, let's bring in brian blair. great to have you with us. >> thank you. >> you just got back from taiwan.
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you did your own -- from what you're seeing, you're actually seeing more optimism, potentially, surrounding the iphone 6 demand. >> absolutely. and there were a lot of great points made earlier, screen size being a critical one in the launch on china mobile being a big deal. but we actually believe they're making maybe between 90 million and 100 million of the iphone 6 from about right now mid july through the end of the year. that's just the iphone 6, 4.7 inch. doesn't include what the 5.5 inch will contribute or the 5s which will remain in production. we believe that apple is incredibly bullish on this. and one of the big things is this larger screen. it's going to see incredible demand, not just in china, but throughout greater asia and other pockets of the world where the large screen has been very successful and samsung has shown us that. >> i want to get your take on this delay. what is your take on the delay? and let's just sort of follow it through to the logical conclusion. let's say the delay actually happens and the phone is not released until next year. what does that do to apple? >> any time you have a whole new
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hardware design, you're going to have glitches in production as you start production. we heard a lot of these exact same comments about a month or two ago. the issues related to the screen, issues related to the sapphire glass. these are not new. i think it's very early right now, the production for the iphone 6 is supposed to start basically now. between last week and the next two weeks when it's supposed to start ramping. and so i think what's happening is hearing a couple of things that are real, that are occurring, but apple has several months to fine tune production and get these products out in time. what i think is likely to happen, it is still going to launch on time and be available, but it might just be smaller quantities, much like with the iphone 5. you couldn't get it for the first two months. it was out there, just in limited numbers, but to your other question, if it was to be pushed out until next year, it would be a bit of a problem because a lot of analysts, including myself are baking this into their numbers for the december quarter, and if it's not there at all until 2015,
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then people are going to have to bring their numbers down. having said that like i said earlier, the iphone 6 numbers, i believe the production is so significant for that skew alone that is going to, i think, drive overall expectations higher. >> do you think, is it your thesis that the street has got it wrong in terms of iphone 6 and people have to raise their numbers for demand? >> absolutely. that was my biggest take away. that the component supplier, everybody who is supplying into apple who is shipping those components off over the next couple of months, the numbers were staggering. when i first heard 90 million to 100 million, i didn't believe it. it started to make sense this was really going on. apple does often trim back that estimate they give to the supplier partners. but just to hear that range is just -- speaks to what apple really believes this can do. and i think people will be raising their unit expectations. >> last question here, we were talking about china and the importance of china to apple. not a lot of people were paying
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attention. and going to have a new phone july 22nd. >> yeah. >> and there's a lot of hype in beijing, which is going to be a steel case phone and a bigger threat than samsung ever has been. how do you look at that competition? >> this is probably the most important smartphone company around the world to watch right now. they're still only doing business in china, but they a are -- it has a very apple-like cult following over there. they do great products and great marketing, very respected brand. but, you know, i actually think that along with some of the other players that are like cool pad and tcl, those are the guys that are killing samsung right now. that's why samsung got crushed on smartphones and why they're going to continue to lose share. is it a concern for apple? it is. i think a lot of this is going to change in the fall when this product, when this new iphone comes out and launches on china mobile concurrently with the rest of the world. that's never happened before. and somebody made the comment earlier, it's right comment,
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apple in china is going to be meaningful just because of a concurrent launch this fall. it's a very, very big deal. >> great to have you with us. thanks for your time. tim, i think you're the one that made that -- >> brian and i were kindred spirits on this one. they were talking about pricing in the iwatch. they're saying 30 million to 60 million units in the first 12 months. you have the street starting to get more excited and build it into the models. and this is, to me, gravy for apple. >> what's interesting, though, this quarter doesn't even matter. he's talking about december quarters. as i mentioned earlier, we have an earnings release eight days from now. i think it's important given the way -- what the market's done, what the stock has done. i think it's given the fact you mention inflexion point. this is a good quarter for them. it's imperative they beat or beat significantly for the stock to continue to go higher. >> courtney reagan has news. >> yeah, that's right. so the mexican fast food chain
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disclosing more details on its forthcoming ipo. the eatery which is known for the grilled chicken is looking to raise up to $107 million. this company disclosed in a filing it seeks to sell 7.1 million shares to the public. did previously announced on the nasdaq under ticker symbol loco. back to you. >> thanks so much. turns out those big bank earnings haven't been so bad after all. citigroup sending financial stocks higher today. what does this mean for jpmorgan and bank of america earnings later this week? plus, find out why new rules in china could be great news for tesla. more "fast money" straight ahead. ♪ during the cadillac summer's best event,
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♪ that's lisa's favorite song. >> tell me what it is. >> i don't know what it is. >> that's your wedding song. >> that's my wedding song. >> beat you to it there. >> citi 3 cents higher. after beating estimates.
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heavy hitters set to report this week. could citi be a good sign for the earnings ahead? let's bring in credit suisse managing director. great to have you with us. >> great to be here. well, citi's expectations were lower than the average. management guided down to a decline of more than 20%. and they ended up down 15% and only down 12 in fixed income. not clear there's a huge read through to the group. >> let me ask you something, the $7 billion, which is not actually all cash paid out. they got some flak, i think, from the analysts about why did you pay that much? seems like it's the right thing to do. what's your take on it? >> you've got to make it go away. they definitely got treated worse than jpmorgan did. and if one believes the numbers in the press about bank of america actually proportionately worse than bank of america. but it's something where you've got to make it go away. i think when you think about it,
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citi did take money from the government, the only one of those banks that had, you know, the government actually invest in its common stock. and so, you know, they got treated differently. >> it's tim. so in terms of other things that people want to see go away and things maybe now could be drivers is citi holding. to what extent do you seedy v t divestitures. and things that people can start to market where they weren't before. and other drivers, please. >> yeah, well, sure, that was probably one of the most interesting things about the quarters that citi holdings wasn't losing money. it was profitable and they said it should stay profitable throughout the year. and so if they can get the, you know, net interest income enough to cover the expenses and credit losses, then i think people will believe there isn't a black hole there. and that's extremely constructive. the other major driver, they had more loan growth that outweighed their margin compression, which is something most banks don't have. there were a bunch of good things in there. they weren't extraordinary, but
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a bunch of good things. >> mosche, obviously the stock has had a tremendous run, trading around all-time highs along with wells fargo. huge premium in terms of valuation. 13 times forward earnings, two times book. does it deserve it still given the run the stock has had? >> well, i think that, you know, i think that there's a little more opportunity to make money in the cheaper stocks. we like citi better. i'm not going to say it doesn't deserve it, but i would say incrementally we probably favor the cheaper ones here. >> such as, what's your top pick? >> top pick is in my universe, citi among the banks. >> great to have you here. >> thank you. >> what's your topic? >> well, citi down 7% year-to-date. bank of america's right in the middle right there where it's basically flat on the year. but it's caught between two moving averages. i think the major thing with city, it was a tremendous head wind. there was speculated 4 billion, $10 billion, and now once we have this clarity, it's probably torqued to move higher. i would agree with him.
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leverage for your money, citi's probably the best. >> i like citi a lot. let's talk about bank of america, which i think also offers extreme value at 1.2 times price to tangible book. the concerns around the sensitivities to their business which are definitely the consumer which are loan growth, interest rates, i think are actually a tail wind. i think what's going on in the economy is very good for their business. bank of america, as we said from a market's perspective, trading perspective has been beaten up going into this period, looks interesting. >> you know, i like them both, bank of america, citi bank, if they can earn as much as they're earning now with things -- with so much head winds in terms of flat net interest margin being so against them. think about that earnings power. and they're not getting a super multiple at all. and citi bank trading in a big discount. i like it here, be a buyer here. >> are you in the camp of go with what's cheaper? >> i'm always in the camp, it's cheap for a reason. so stocks underperform for a reason. when you try to play catch-up,
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typically doesn't work. i'll stay in the u.s. bancorp camp. goldman sachs could have a ridiculous ly good quarter. i don't know what that will mean for the stock, but some of the read throughs you've seen, maybe goldman is set up well. and blackstone at the end of the week, it's going to be good. over this quarter in terms of m&a and other activities. coming up, looking to buy your next warhol from the comfort of your own home? the details behind the new deal that may allow you to do just that next. and later, a $3.8 billion deal as one hedge fund heavy weight on both sides of the trade very happy. the name, who banked all that cash a little bit later on. at every ford dealership,
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to business. they've done good stuff, some capital reallocation, they got a big dividend, dan loeb on the board. some of the catalysts have happened. now i'm seeing competitive threats. and other all -- and phillips, a third auction house. so i'm not long either. >> is this a better deal for ebay? >> it might be. in terms -- i don't know is the short answer, but i know, i think how you trade the stock. we told him it's probably the wrong move and proofed to be correct.
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stock went from 60 down to 48. it was a low we made about six or seven months ago. i think you own ebay here against that sort of 48 1/2, 49 level. i think for the first time in a while and i mean a while, ebay looks like it's tradeable on the long side. >> i think some of the parts, this is definitely a name i want to own, it's kind of -- you do the math with yahoo, a little bit different. if you look at some of the parts on paypal alone, i think it's a $40 stock. i think the stock's cheap and would own it here. >> if they changed their name to paypal, would it be a higher multiple? >> yes, absolutely. i think people would have a better understanding. >> next up, tesla going after winning approval in pennsylvania. plus, over the weekend, china posting new rules that would require at least 30% of government auto purchases to be electric vehicles. >> right, so let's talk about china first, this is the largest auto market in the world. there's a lot of competition, too, but i think about a 10%
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kind of reduction in what they could layer on top. it's very good news. the delays and the waiting list for tesla in china have been growing. this is one market where they can do very well. i'm of the belief that we're pricing in a stock here with no competition. and we're using extreme valuation metrics and calling it a technology company. it's a great company. but, you know, little things like this are enough to on a day -- one to two-day basis give it a trading rally. they will be allowed to bypass dealerships in pennsylvania and sell directly, and this has been another big issue for tesla, it's good news, it's good news for the stock today and tomorrow, it's not good news for the stock next month. i would not be buying a stock on this news. >> the other good thing about the china news is that this leads you into the tax incentives which start on september 1st. where they are exempt, they and also domestic vehicles, domestic from levees through the end of 2017. >> you know, elon musk was
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extremely positive in china. it wasn't kept a good secret, they're behind on all of their benchmarks. they wanted to forecast out to 2020. they're way behind, they have to ramp up dramatically. this is the first sign of many more to come. it's a positive sign for tesla. >> next up, mylan announcing it'll buy abbott laboratories brand outside the u.s. for $5.3 billion. the new deal will bolster the product line and, of course, cut its tax bill. >> just another example of why inversions help, why it's only a piece of the pie. there's a lot of other things that go into these types of deals. but the company shouldn't be put on trial while they're doing an inversion. it's totally legal and it's evidence the ceo said it earlier on cnbc. if our congressmen need to get together and have true corporate tax reform. don't blame the company for doing what's in the best interest of shareholders. >> that's another tax potential
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deal. >> that seems to be a much bigger issue. how do we have this tax policy that's so punitive. more than almost any other country in the world. i don't know how this isn't getting to be sort of crisis already. you know, there's a lot of -- there's a lot -- tons, billions and billions of dollars offshore. >> and let's not forget this deal makes sense anyway. it makes sense and it's not expensive on a tax conversion scale, somewhere less than seven times adjusted ebitda. not like they overpaid for this. a good deal on a lot of metrics. if they can be tax efficient, they will. >> ti think on "closing bell," o tim's point, this was a great deal. i think it's going to be accretive off the bat, 25 cents earning, 2014, not so much. i think it puts them right back on solid footing. they reported at the beginning of august, this is probably the first of a few deals they pull off.
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i think mylan at 51 and change is an interesting stock. >> coming up next, gold suffers the biggest daily drop of 2014 today. how dennis gartman explains the carnage. are yahoo's best days behind it? we'll talk to one shareholder holding on. why he says yahoo's not dead money, not yet coming up.
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♪ >> well, next time you get r.e.m. >> although not really. i would have liked to -- >> anyway. >> welcome back to "fast." live at the nasdaq market site. a market flash from valero. court? >> yeah, that's right, melissa, we're getting an interim update from valero energy, the company saying it expects earnings to come in at a range of $1.10 to $1.25. that is below the street expectations of $1.39. the company will report on july 30th. we got a couple of weeks to go. but right now, as you can see, shares trading lower in the
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afterhours by about 2.5%. back to you. >> thanks for that. and just doing a quick check, western is down. >> talking about the refiners. when they eventually crack. they have cracked. and when you look at the street. the street has been way too high on a lot of these numbers, specifically in the refiner space. so i think the days for the refiners you're going to see transition out of the refiners into the service names. >> such as? >> well, if you go -- >> hughes. >> or schlumberger. depends on north american or global. >> i would just say this is a key level for the stock, it's about 80 cents from the 200-day moving average. if it holds that, it builds a base. >> all right. after six weeks of gains, gold fell today more than 2% making the biggest drop in a single day this year. is the safety trade officially over? let's bring in dennis gartman. great to have you with us.
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gold's biggest drop of 2014 makes a nice headline, but this, of course, is after the biggest weekly gain since 2011. how are you trading gold at this point? >> well, first of all, i would never call gold a safety trade. it is anything other than the safety trade. it is a -- it can be a very dangerous trade. and today it was. i think gold was catching up with the fact that corn prices have fallen $1.50 from their highs, crude prices are down $8 a barrel in the last several weeks. that livestock prices are starting to come off, the cotton prices have fallen, the commodity prices are generally coming down and gold was still rallying, giving strength in the stock market and there was a reason for gold to come down. the gold bugs are going to say it was government intervention because there was basically two large onslaughts of selling that hit four hours differently today. and the gold bugs will say that today. but i think catching one the fact that other commodity prices have been under extreme duress and gold got extended to the upside. nothing more than that.
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i think gold is probably, here at $1,300 an ounce. and i really don't pay much attention to gold in dollar terms, still bullish of it in foreign currency terms. $1,300, probably going to find some support. >> how do you factor in seasonality? basically said that gold and the xau, 9 of the past 13 times since 2001 has moved higher and performed better than the market. at the same time, we're getting data points and indications that the monsoon season in india's weak. and so gold demand might be weak. how do you sort through those two factors? >> well, gold tends to have a -- there is a seasonality to gold. a lot of people don't believe it, but it tends to get stronger in the summer on into december. that's the seasonal trend. i'm not sure anybody would predicate a trade on that. but if you're going to err, you're going to err bullishly. the monsoon has actually picked
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up quite a big deal. and the crops in india are going to look better than they did week and a half ago. you can set your watch by it and this year it's been a week and a half late. but they're finally getting rain. that's going to help. even so, gold sold off very hard today and a lot of people got hurt. i'm long a little bit of gold, but i'm -- i've been long for a long period of time, and i'm long in foreign currency terms and in terms of the euro, i'm actually up, in terms of the yen, i'm down 1%. >> okay. >> dennis, what turns you in gold? what makes you a raging bull? what headline do you need to see in order for you to get bullish in gold and in any terms? >>. >> to be honest, it's not going to be news, you have extraordinary good news for the gold bulls. i mean, all of the problems in the middle east should have been, should've given a strong bid to gold market, and you didn't get one. you got a modest bid and today you got a huge selloff. what i really would like to see is the psychological circumstance of seeing gold in
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euro terms trade above $1,000. that's psychological circumstance i think would be strong, it would bring a bid to the market would force the shorts to run for cover. we traded all the way to 975, 980 euros to the dollar, euros to gold over the past -- last week. today, you closed around 962. but even that's still a strong circumstance. get it over 1,000. >> there is no headline that will make you turn into a raging bull on gold. and it's only a psychological level, which we have that would make you more bullish. >> mel, that's exactly krektd. there's no real news it's going to be fanatically bullish of gold. gold is a technical market and, again, it is not a safety play. >> dennis, good to speak with you. it's only a technical trade. do you agree with that? >> i do. technically it was overbought last week, .7 of 1% added in
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gold and silver funds. it was about 1350. this was a classic bear market gold rally over the last few weeks very dangerous. >> to dennis' point, all the headlines we've seen geopolitical or otherwise have theoretically bullish for gold and they haven't been, which is why i ask the question. i do think this becomes a technical trade, i'm not sure if it's 1,000 euro, but we'll see where we trade 30 or 40 lower from where we are right now. >> guys are looking for areas or sectors where they don't feel like there's been so much bloat or they don't feel like there's been so much frothiness, and you can say there has not been any frothiness in the gold trade. so gds is how i'm playing it. nice middle ground between the actual commodity. >> the headline is gold trades at 1,400, that would turn him bullish of gold, right? >> 40% higher. >> yeah. >> on the euro cross? >> no, here. >> that would be north -- anyway, time for pops and drops.
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big movers of the day. >> we got a pop for glu mobile. >> i can hardly take this seriously. up on the heels is probably the wrong word on the trunk of the kim kardashian game, which is apparently quite popular. >> tripadviser down. >> took it to a neutral from a buy, they report in a couple of weeks. $105 here is no man's land. 110 a bit of a double pop. you look to buy this stock on a break of 110 or in the low 90s. >> pop for lincoln, up 2%. >> for a company people worried about saturation point of the addressable audience, deals like this, it's an interesting deal for them, $2 million subscribers, they'll be sending updates and news alerts on people in your contact list. it's interesting, by the way, a couple of founders are paypal founders. they're getting a double bite of the cherry. >> drop gt, it was down 5%. >> that was on the headline there was going to be some supply disruption or pushback
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for the iphone 6. so if one of the things that the iphone is having trouble with is a front panel makes that front panel, you could obviously see collateral damage here. there was a short interest of 32%. be very careful with a name like this. don't overstay your welcome on the short side. >> starting today, pizza hut customers with a sweet tooth can enjoy a pizza cookie, roughly the size of a small pie, it can be split into eight slices. partnering with hershey's chocolate, hoping it'll be a big hit with millennials. likes to leave room for dessert. >> it's not a pizza, first of all. >> it's a cookie. a giant cookie. >> a diamond shape. >> that's ridic. >> ridic. >> guy, give -- >> i'm not going to say. >> oh, come on. >> and at the end. >> same thing. same thing. >> the cookie.
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shares of ibm up around 5% today. some are wondering if the rally will continue on thursday. hey, mike. >> hi. so it was interesting today, ibm traded about 130% of the average volume we saw in the name last week. 50% more calls than puts in the name. and i think that was kind of interesting we were seeing bullish activity. where we were seeing it was in the weekly 190 calls. that was the most active of the strikes. buyers paying about $3.30 for those call contracts, which is a bet that it's going to be above $190 by the amount they paid. ibm has not really behaved all that well out of earnings looking back over the past two years, that's eight quarters of reported 30 days after the reporting date, this thing has been up only two out of eight quarters. looking for about $4.30 a share in the name. but maybe some people are expecting that the street skepticism, analysts don't like this stock, there's more holds
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than buys in it. maybe they're hoping that skepticism will propel an upside surprise in it. >> yeah, you're watching ibm. >> well, the report on thursday, if ever was a quarter for these guys to do something positive is this quarter. as mike mentioned, it's been two years of lousy reports. the stock is the only reason the stock in my opinion is at 190 now because the broader market -- and a lot of people looking at oracle, microsoft and what have you. >> why this quarter? >> i don't think they're going to do anything. i think the stock is completely overbought here. we'll see, we'll see if mike's call buyers are right. >> catch more "options action" every friday. check out optionsaction.cnbc.com. ali baba getting a $130 billion valuation ahead of the ipo. is yahoo's 25% stake enough to boost the stock? we're hearing from eric jackson at iron fire capital about why he's holding on to the stock. the core holding, by the way. more "fast money" straight
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all right. no. >> what? i'm trying to -- >> no, but -- i'm just curious. >> i have no idea. >> i'm really curious over here. >> tlc, apparently. >> that was my wedding song. >> anyway. less than 24 hours away from releasing second quarter earnings with these signs of a pick-up in yahoo's core business, could the stock be -- obviously you say no. the stock tells me it has been and it has been pretty much for the entire year. is that the reason the stock went up last year, the alibaba ipo? >> with alibaba, we're about to get into high gear. most people think the ipo is going to happen on august 8th.
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it wouldn't surprise me if a week from now we hear rumblings that the road shows are starting. on how alibaba did on the q2. we're going to hear details from those meetings about what others have planned for the rest of the year and beyond in 2015 and 2016. i think there's going to be excitement building. they took the valuation, as you said before the break up to $130 billion and the filing done on friday. i think by the time there's an ipo, that thing gets up to 150. and then once it goes public, there's a good chance i think this thing could see a bump afterwards, not a go pro type of bump. i think there could be a lot of people demanding to get into this stock. you know, they keep talking about how this is a -- going to be a $20 billion ipo. if it goes out at $150 billion, 75% of that 20 billion could be just yahoo selling the -- not to the public, but back to ali baba management. i think a lot of people will want in after the ipo. >> sure, i understand that.
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but at some point, you're talking -- does the trade become not to be in yahoo but to actually be in alibaba? isn't that the cleaner trade here as opposed to banking on the fact that yahoo will hold an ownership stake in alabibaba. who knows what's going to be done with it. >> well, quite frankly, for this last three years, the trade in yahoo has been this sort of fundamental disconnect between kind of the true, quote, underlying values of these assets, you know, and what most people kind of think the value of yahoo core business should be. so i think there is a disconnect now, there has been a disconnect over the last six months or so. once you do some of the parts analysis, you know, i'm not here to bang the drum and say yahoo core business is the best internet stock out there, i'm just saying, is that thing worth zero compared to aol? which is getting kind of a reasonable valuation? >> no, i think it deserves a
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reasonable valuation and once that happens post ipo, there's good upside. >> eric, it's tim, do we treat this like a holding company then? many cases they trade at a discount. i would make an argument at $130, the rest of the business is trading at a discount. let's talk about the use of proceeds. what do you think they're going to do with this? they may keep it on the balance sheet for a while. tax implications. this is a derivative question that comes off alibaba. >> i think you're right, tim, that's one of the overhangs on the stock right now. i think there's this fear of what marisa will do and basically she's going to burn the alibaba bucks she gets in terms of dumb acquisitions. i think they've been pretty consistent and i expect they will, you know, keep about half or more than half for stock buybacks, which i think most folks will like. then the questions comes down to acquisitions. and, you know, there's a good chance that, you know, marisa's track record, she'll be attracted to some big shiny
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assets that are kind of cool amongst the silicon valley folks. and tumblr is still a work in progress. i think the jury's out on that acquisition. you know, my hope as a shareholder obviously is that, you know, she doesn't spend too much money on, you know, some big asset that really has no chance for monetization in the future. >> eric, thanks for joining us, appreciate it. eric jackson, iron fire capital. what's your trade? >> i'm still long about 20% of my original position in yahoo. but what's troubling is everything we discussed there. the fact it can't get out of its own way. and you are evaluating the core business basically as nothing. there's a reason why -- >> it's negative. >> yeah. >> there's a reason why things like that happen. it all hinges on tim's question. what they do with the money after the fact. >> you're thinking alibaba and the core -- for us, the alibaba bet is made more cheaply and more clearly through soft bank, which is so far hanging in there okay.
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guy? >> i'm in the eric jackson camp. i think you discounted the business so much, 34.50, there's got to be value here. i think maybe if you sell off the announcement, maybe see a rally. >> will the bet on energy pay off in a big way? u wanted to kn? with fidelity's new active trader pro investing platform, the information that's important to you is all in one place, so finding more insight is easier. it's your idea powered by active trader pro. another way fidelity gives you a more powerful investing experience. call our specialists today to get up and running. ♪ "first day of my life" by bright eyes ♪ you're not just looking for a house. you're looking for a place for your life to happen.
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just want to say, i bundled home and auto with state farm, saved 760 bucks. love this guy. so sorry. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] savings worth talking about. state farm.
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advantage fund which has exposure to all of the company's
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different strategies in one master fund, a number of investors moved into enhance or the sibling funds, as well. no doubt, he'll shed more light on wednesday, melissa. and perhaps he'll even weigh in on the creative deal making and investing now going on with situations like allergen. >> going to be the key focal point that's happening. going to be broadcast on cnbc. we should know, kate, it's not just kodiak and whiting, he is in oasis petroleum. he's a big believer in oil deals. and also two other deals that are in the news today, and also valient and allergen. >> and he said it himself, the companies are going to be using their stock as currency. this is exactly -- so, you know, he's also -- to his credit, some of these trades that were very difficult two years ago were making kind of, you know, deep discount calls on companies that
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were trading as if they were distre distressed. the way the markets were trading during some of the volatility periods, it turned into distress for him as some of these things were tough to work out. but guys in energy space and enp are having banner years, by the way. >> we're seeing a bonanza in pharmaceutical deals. last year for him, it was telecom. he was very active in the space and did well on the number of positions. >> yep, it's going to be a big day, big day for all of us, kate. we've got another program here. we will have a mystery guest from delivering alpha that will be broadcast live on "fast money." so you won't want to miss that. be sure to tune in wednesday, as well. mystery guest. yeah. i don't know who this mystery guest is -- i don't, honestly i don't. >> you haven't booked anybody yet. >> no. it's going to be a great guest, i am told. let's get to the tweets, you tweet it, we trade it. bring it on. karen, this is for you.
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you know what, it's from risk reversal. >> come on. >> he wants to know if there are any important take aways from citi's second quarter results for bank of america. do you still like b.a.c. here? >> appreciate the tweet, dan. still like bank of america even more so after the citigroup numbers today. i think we're going to see something good in the stock does not have a lot of good news priced in. thanks, dan. >> thanks for tuning in, my man. >> risk reversal. we'll come right back. stay tuned. kid: hey dad, who was that man? dad: he's our broker. he helps looks after all our money. kid: do you pay him? dad: of course. kid: how much? dad: i don't know exactly. kid: what if you're not happy? does he have to pay you back? dad: nope. kid: why not?
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dad: it doesn't work that way. kid: why not? vo: are you asking enough questions about the way your wealth is managed? wealth management at charles schwab
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time for the final trade. tim seymour. >> this is flying in the face of a lot of momentum, but intel reports tomorrow after the bell. i think they're doing fine. i also think the stock which has moved over 20% since may is now trading in multiples that make it something you don't need to run into, i would say at this rally. >> steve grasso. >> apple still long, you see the print above par, above 100 in the next week. >> karen finerman. >> cumulus radio, a little movement back and forth. i like this right here. >> guy, you were off all last week, we missed you.
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>> liar. >> we did. >> all right. what was i going to say? >> i don't know. >> it's okay. >> mystery guest, we should do a web thing. >> a pool. >> a pool. i like that a web thing. wolverine reports tomorrow, triple ws. good, bad, my in addition is -- my mission is simple -- to make you money. i'm here to level the playing field for all investors. i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to kra mare ka. other people want to make friends. i'm just trying to make you money. my joshgs not just to entertain but teach you and coach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. if this market were in grade school, where, by the way, it trul

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