tv Fast Money CNBC January 30, 2013 5:00pm-6:00pm EST
the coolness factor being questioned at apple. wouldn't it be something it's a company we've never heard of who actually blows all of these out of the water one day? that's the american way and that's what we need to encourage and support. innovation. innovators everywhere need to be supported. that is how america stays competitive. before we go, take a look at the day on wall street. a competitive day on wall street. take a quick look at facebook. the stock is moving in the extended hours. the dow down 44 points. nasdaq down 11. and the s&p 500 tonight, down six points. facebook on the move. first, the stock dropped 3%, then it went positive, now it's down again as you can see there. facebook now at $30 and change. that will do it for "the closing bell." thank you for being with me. hope you'll follow me on twitter and google plus. have a great night. see you tomorrow. but stay with cnbc. "fast money" begins right now.
> live from the nasdaq market site in new york city's times square, i'm melissa lee. blackberry blues. is the rim reboot nothing more than lipstick on a pig or is it a perfect about face. can facebook mobilize its way back to its ipo price? trading all the after hours action. and the aubrey overhang. now that the ceo of chesapeake is retiring, what should you do with the stock? first, we have to get straight to our top story, and that is the markets, failing to reach new highs today. between the gdp report and the fed statement, we couldn't get to 14,000. steve, at the same time, we still held on. >> we did. and, the problem is, nobody wants to believe in this rally yet everyone continues to buy this rally. so, you really have to look -- you have to be a stock picker's market. you have to buy what you really want. buy what you understand. buy the stories you believe in. and those ideas probably go higher.
other than that, we're waiting to fall off this cliff and i think the air is slightly coming out of the market. that's what i saw later on. >> when the gdp number hit the tape, karen, were you surprised we were able to look past it? we did see the futures go lower and it just kind of -- as if it didn't happen. >> yeah, funny that the same information in another era, three months ago would have been a disaster. i don't know how to account for it. starting to see the volatility index speak to that. you can probably speak much better about that than i. >> it has picked up dramatically. 7.5% today. after -- what, four out of the last five days, we've seen the vix rise. made it through 14 today, after being in the low 12s just a couple of days ago, so, this is a pretty big move, but it's also what you'd expect when we're up against an area where people are looking for a correction. >> people startled defending that gdp number right out of the
gate. >> right, it was the lack of government, the drought. >> inventories, everybody. everyone jumped more over it. more so than i've ever seen in it in my life. >> it's all about what's forward. you can ignore what happened. >> that was so three months ago. >> that speaks to the complacency we have. today was the worst down day of the year, okay, we were down 39 byes. that's as bad at it's been, people. like doc just said, you had the vix that ticked up a bit. it was up 7%. what's going on here is that the rally is getting a little long in the tooth. we did not react as badly as you would have expected with the gdp number, but yesterday we had poor consumer confidence. there's other things out there. we have the sequestration, this increase in payroll tax. don't think for a second, guys, this amazon number yesterday, the revenue miss, they saw a massive deceleration in north american sales in q-4. this is likely to continue through q-1, so, to me, at the end of the day, at 1500 here and the vix popping today, what's going on is, i think you're seeing people starting to buy protection for the first time
all year long. >> right, but doc, you noted this continuous sort of rotation out of the bond market. you are noting that the tbt and tlt specifically. >> yeah. we've talked about that since mid-december. that there's been days when you've seen massive turnover of either of those etfs, the single or the double inverse, which is the tbt. and it's up about 8% this year. that's just in 2013. and the regular denominated when is about 4% drop. so, there's clearly been rotation. you can take a look at the volume levels and see on the days when money was coming out very aggressively. i'm not saying it went to the sidelines. i'm not saying money's coming off the sidelines into the market for all those folks who want me to say that. but i'm saying -- >> but we have seen that. we have seen money coming into the market. we saw the data points saying this is the highest turnover into the equity markets, second or third on a historical value. and each of those times that beat it, the market fell off 40
40% or 50%. it's a contra indicator. >> let's get more on the gdp numbers, which investors seem to want to look for. our next guest says the economy is stronger than you think. michelle myers joins us on set for a deeper dive into the numbers. michelle, certainly, a lot of the factors, you can explain away this number all you want. >> yeah. >> at the end of the day, still uncertainty because of the fiscal cliff. if it will have an impact, what will sequestration do to the next number? >> that's a really good point. i think if we do see a sequestration kick in, probably would impact q-1 gdp, but it will impact q-. defense, if it's the defense cuts that we see, we'll certainly see further contraction in federalense spending and that will be a hit to the real economy. >> because of these, the fourth quarter numbers, the economy is stronger than you think. are there certain extrapolations like that contraction in the
defense spending that we saw in the fourth quarter that may have been a little bit stronger than had been inanticipated that makes you rethink q-1, even? >> the way it was interpreting the report is that it is largely distorted. you had the massive inventory. you had the defense swing and that typically -- you typically have noise at the turn of the fiscal year, so, q-3 defense spending was really strong, q-4 was really weak. you want to look past that a little bit and i think it sets the stage for stronger q-1 gdp. but to your broader point, ultimately, we should be preparing for greater government contraction. and that's going to be a real serious hit to the economy. >> where are your projection, though? do we throw out the two quarters of negative growth? that used to be the sign of a recession. do we say forget about that now, it's a different world that we live in, now we're going to talk about government spending, inventories? how do we look at the world now going forward with gdp without
coming up with three different excuses and i'm not being cavalier when i say that. >> only two different excuses. well, i think you want to look at the trend, right? so, you want to look at where domestic sales are. one thing we've experienced from this business cycle is very choppy inventory management. and i think that speaks to the uncertain tim of this cycle. businesses aren't quite sure on how much they should produce and how much inventory to hold. i don't think it's fair to define a recession as just two negative quart earls and the nbr never does define it that way. they look at different indicators to determine it. and also, remember revisions. this is the first release of gdp. inventory data isn't complete yet. trade data's not complete yet. we will get two more revisions to gdp. at the end, it could be a totally different number when we get the final release. >> yeah, at the end of the day, investors want to know if for the second quarter number on gdp, if we should brace
ourselves for a massive slowdown. we saw contraction in the fourth quarter. what could we see in the second quart quarter? >> well, for q-1, our baseline forecast had been 1%. i think the risk is the upside now because we get the inventory swing. that's noise. look past to that. into q-2, i think the question becomes what kind of fiscal area do we see ? if the entire sequestration quicks in, we will see a contraction and that will hit gdp. the other factor in q-1 is higher taxes. the payroll tax hike is going to hit consumer spending. we start off the year pretty soft because of consumer spending. we have positive offsets coming from housing, coming from business investment. but the economy still has a lot of challenges ahead. >> michelle, thank you for coming by. michellemeyer. we want to get a check on facebook shares. let's go to julia with more on this. julia? >> hi, melissa.
i'm just right now listening to mark zuckerberg talk about mobile. he really, you know, he kicked off the call emphasizing this was a really big year for mobile. emphasizing the fact now more people are using facebook on mobile every day than they use facebook on the desk top. he did acknowledge this was hard for facebook to navigate but they have sort of figured that out with apps and advertising. that we have a strong foundation and a lot of momentum. so, it is really interesting. he understands that mobile is really what facebook is all about now. just a couple of quick words about those numbers, facebook did beat on the top and bottom line, eps of 17 cents, that's two cents more than expected. revenue came in higher at $1.59 billion. and it did really seem that the headlines were all about mobile. we have the first time that facebook's mobile users have exceeded tha eed the web users. 57% increase in mobile active daily users from a year ago.
facebook is really a mobile company. but it's interesting that mobile ads are still responsible for just 23% of total ad revenue. but that is up for 14% in the prior quarter. so, i'm going to keep on listening in here, but it's interesting hearing him talk about the potential of mobile. melissa? >> julia, thank you for that. doc j, i know you are in this trade. is this surprising, the pull-back? >> i was happy that we rebounded, melissa. as i said on "halftimes," i'm short puts in facebook, at the 29 and 28 strike. that's because i was willing to buy the stock and by offering somebody else the insurance that they were seeking, i collect that premium, it looks like i'll keep that premium unless the stock does break back through there. it went down to mid 27s in the afterhours very quickly, bounced back all the way to positive in the session. now it's down 60 cents. i love the way mobile worked out for them. dan, what did you see? >> one of the things to me is this company's grown up a little bit. their road show was a disaster. the quarter right out of the gate was a disaster. >> their road show was a
disaster? they were able to go 38 and go to 45 the first day. >> they lost some very big investors right at the end of that road show that made that deal fail. in a lot of ways, they weren't communicating well. and the stock got pummeled. as low as $18, right? now, they're doing some of the right things in a way. they've basically much clearly articulated how they are going to monetize mobile users. zuck has been out there in front of people. he did that tech crunch thing. he's on the calls, he's talking to people, what the path forward is. i give him a lot of credit. i'm not a fan of the company or their products. i think seven years we're going to be speaking about them like myspace we speak about right now. but at the end of the day, there's a very good shot that investors who are out of apple now, they're looking for the next double, triple and it could be this stock. >> all right, got to take a break here. coming up, reaction to facebook's new numbers. bob peck tells whether he'll add to his stake. and later on, afterhours action continues with qualcomm's latest report. we are on that conference call. and ahead, the blackberry
reboot. a perfect ten? we ask the analyst who has been looking for a 60% drop in the stock. much for "fast" straight ahead. [ male announcer ] when we built the cadillac ats from the ground up to be the world's best sport sedan... ♪ ...people noticed. ♪ the all-new cadillac ats -- 2013 north american car of the year. ♪ for a limited time,
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qualcomm rallying nicely after hours on better than expected earnings. jon fortt is on the conference call for us. what's the latest? >> lots of good news for them, melissa. they are saying that they see over the next 12 months turnover in the hand sents ae hand senet markets, they will be adding more higher end chip sets. they expect that to fuel growth. that's why they raised fiscal year guidance. china and latin america have been helping in the current quarter. they were trading at one point close to all-time hikes that
they saw, i think back in february. i talked to paul jacobs before the call, as well. he talked about hopes that he has to see growth beyond just hand sets, as well. he pointed to dell announcing they are going to have 4g chip set in a tablet/pc hybrid they were talking about. they are not quite seeing the pop they want to see. a lot of times competitors coming behind apple, things like the ipad mini that have lte are expanding. they are not seeing that pop yet, but they are hopeful they will. overall, they're also seeing that the capacity has opened back up. that's something we were worried about. tsmc is back online and others are providing them with capacity, as well. firing on all cylinders is what it sounds like. >> jon, thank you. let's go to mike khouw. the beauty of this kind of trade is that $34 in chips are in each iphone 5. they also get picked up in the snap dragon and android. plus the new blackberry device. >> everybody looks at apple as
being one of their biggest customers and that seems like a risk factor. but when you look at the total revenues they do, it is still a small percentage overall. and this means they're really just exposed to the smartphone market. the two most active options being the 65 strike calls, both the weeklies and the monthlies. they we both of them are now both $2.50. those were some pretty good and well positioned bets going into this. >> all right, we will check in with jon fortt later. research in motion ceo unveiling the blackberry ten and announcing rim is changing its name to blackberry. listen to what he told us earlier. >> the key, really, is in the difference of the platform. we are just not another android. we are not another windows 8. we are something different. we haare something special. it is truly unique. >> so, is the rim makeover just
lipstick on a pig or perhaps a perfect ten? couldn't resist, right? joining us now, jim siba, expecting a 60% drop in the stock with a price target of $6 a share. you said at the end of the day, it's sell-through that matters. anything about this launch event and about the device, which you have, that changes your mind? >> actually, not a lot. it was nice to have alicia keys there today, that was pretty nice. and to see their name change, but the big surprise was simply that this will be available tomorrow in the uk, canada in february 5th, which is great, but the people in the united states, you don't get it until march. people want the device now. the longer time takes, the worse it is for the stock. >> that didn't make any sense to me, either. you have a launch and you have all the ads during the super bowl and then you doubt have the device in the markets for another few weeks afterwards. that seems like a big misstep. >> absolutely. they needed to have a global launch. they needed to have all the supply chain lined up.
they are spending a lot of money on the super bowl this weekend and people are going to forget about it in a month. >> tore thing that they addressed in the interview with cnbc, he addressed inventory levels. we asked him, are you sure you can meet capacity, which i sort of chuckled at. i thought, already, there's talk about not enough capacity. and he said, you know what, we actually took care of the inventory, we made more than we thought we would need to make sure we have it in the pipeline. that seemed almost like, i don't know. bold assumption. >> well, put it this way. it's make or break for the company right now. it's all hands on deck. it is either going to happen or the company is going to have to split up if it doesn't. they have to go with this with both feet. they're doing the best they can but right now, it's not lined up the way we hope it would. >> if that is the case, isn't that a buy in either situation. it is either going to work or they are going to break apart the company. why would it still be a sell? >> we think in the current place they are at that they are unlikely to make money. expectations. this game is all about
expectations. have risen dramatically in the past 30 days. the stock has risen dramatically and we think expectations are way ahead of themselves. we still have a sell rating on the stock. >> so, let's say you get into the bad case scenario where, first of all, i think the delay for the release is really odd. that's obviously a bad sign. the bad case scenario, there's been a lot of talk about what the pa tents are worth here. what do you think is sort of a floor value for where the stock could be in the event that the 10 is not all they need it to be. >> the stock came down 12% today. and they bot pretty hammered. we think is the stock could go down into the single digits. we think the floor is close to $6. we think sell through is what matters. today was a little bit of bad news but we are really keeping an eye on sell through. that is going to happen in the month of february and march ahead. we think it could go down to single digits. >> and jim, you cover apple. i'm curious. we have data points from apple,
we have data points from samsung and we know what's going on with research in motion. maybe it's not a company-specific problem, it may be an industry problem where each players, the revenue growth is decelerating, the average selling prices are coming down. is this just endemic to the sector, i guess what i'm asking is, is there a good trade in this sector at this point? or is the problem hitting everybody? >> i actually do think it's now becoming more of a trading sector rather than a long-term investment sector. we think the hand set industry is becoming more and more commoditized. you talked about qualcomm, other stocks that benefit from, it doesn't matter if it's apple, samsung, lenovo, research in motion, now going to be called blackberry that is successful. it doesn't matter. the connector stocks are great long-term invesmentes. we think the hand set industry gets more competitive, margins come under pressure and growth slows. >> wow. the death nel it sounds like,
for these guys, jim. what do you tell your long-term investors who are clients? we them them. we would be talking money out of researr carch in motion and the tech nor stocks. we like the stocks that are connector stocks. >> all right, jim, thank you for soming e inine ining -- coming . how do you like that trade? >> i think rim is a tough press here on the short side. i think problem sum of the parts is probably a little -- i haven't done the work like jim has, but they have 79 million users. somebody is going to figure out how to monetize the user, whether this phone works or not. but again, you go to qualcomm, there's very few stocks exposed to the high end and low end that have 16% earnings growth expected this year, 20% sales growth, 25% of their market cap is in cash. no debt? i mean, that's the play right here. that's the stock you buy on a pull-back. >> in terms of rethinking about the space as a trading sector, dr. j, i'm sure that's the way you've been thinking about it for a long time. >> yeah. and we talked about it last
night on the show last night. i said 12 1/2, 13, i'll stick by that. that's where you reload for the stock here. and that's if, as all issues that jim brought up, addressed. now, i held it, jim let me use it a little bit. the browser is fast. it's a nice phone. if the operating system, which people say is also, walter mossberg liked it a lot, if those things line up correctly, then the issue is, when is it available in the united states? i think the super bowl ads are because they want to sell to the cios at the companies. they want to get them excited about the product. >> all right, we have breaking news. i want to go back to julia, on the facebook conference call. julia? >> well, melissa, really interesting stuff from mark zuckerberg. he talked about the fact that advertising business is growing really well. he's very excited about the work their are doing in targeting and how they are working on new ad experiences that are designed to be less disruptive for users. now, he said he wanted to temper expectations about montization from over products.
gifts, some of the game stuff and apps has been selling. he says for the next few months, the work around a.s will have the biggest impact on revenue. despite the fact that ads are the most important thing for the business, they are investing in a number of other things for the long-term. he talked about graph search with the company, which is company just introduced a couple of weeks ago. he said the different things aren't going to have an immediate impact on revenue. but they are investing in these different areas and also, they're going to invest in head count. he said, we are not operating to maximize our profits this year, but we're operating for the long-term. so, he was followed by sheryl sam berg who just got off the call a couple of seconds ago, she talked a lot about ads. the potential in mobile, better targeting and new ad products and she rattled off a number of different examples of how well facebook's ads are working. for example, pepsico had a five-times return on ad investment. we're going to continue to dig in here, melissa, it sounds like ebbersman just took over the mike. >> julia, thank you for that.
facebook shares trading lower. still to come, stairway to heaven. we go off to charts to find out if the refiners can move higher. plus, what chesapeake could look like in a most mcclendon world. and later, two traders duke it all over whether amazon still has the goods for investors. it's a shop til you drop street fight. more "fast" coming up. see life in the best light. outdoors, or in. transitions® lenses automatically filter just the right amount of light. so you see everything the way it's meant to be seen. maybe even a little better. visit your eyecare professional today to ask about our newest lenses, transitions vantage and transitions xtractive lenses.
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welcome back to "fast money." we're watching fusion io, which is getting hammered here in the afterhours. here's the news. the storage drive maker forecasting third quarter sales below estimates. fusion io expecting third quarter sales of $80 million. the street was looking for $137 million. the company's cfo giving interesting commentary about his two largest customers, saying the change in guidance reflects a two quarter shift in the timing of their both purchases. fusion io hammered here in the afterhours. melissa, back to you. >> josh lipton, thank you so much. let's go off the charts now with steve grasso and target the refiner rally that we've been watching. >> right. now, if you look at the refiners, everyone thought the consensus trade is, they are
going to run into year end and be shorted in january. that didn't happen. the markets always know better. and what we saw out of valero is the reason why. they blew the cover off the ball. >> right. >> so, 20 times what people thought their earnings were going to be were, in fact, what they were. because they used cheaper u.s. crude, their highest input cost and sold it higher energy prices out the door. >> okay, so, here we have the stock up 80% over the past year or so. >> that's right. so, right here, you see this whole section here, it was overbought. it continued to be overbought. it is obviously grossly overbought at the level we're at now. there's another chart here, longer term chart. you'll see the long-term resistance. >> right. >> so, you come in here, you see the price level here. i mean, this is dramatic. now, you come to a low of just about $14, so, we're making a retracement here, and if you look, we're right butting up against resistance. resistance is going to be around $46.31. >> that is where investors will probably be -- >> you want to be cautious there. so, if it closes a couple of
times for confirmation above that lovelle, you know you're good to stay in the trade. but quite frankly, most traders, most pms, though they were fooled here and didn't realize this was coming, think it's overdone. >> all right, so, phillips 66, this has been a favorite on the desk. guy's final trade last night. >> more than one of these guys. they loved this trade. and it's the same type of thing. nothing is going to compare to the valero trade. they set the bar way too high. if you look at this, this is up 117%, basically, from june of '12. so, if you look back, both those names, valero, up 130%, whatever the number is, from that same time frame. you have to look at it in a relative basis. are you going to get this gross outperformance to the market, most say no. most say it's unsustainable. >> mike khouw, an these two names in particular, would you also sell at these resistance levels? >> well, i definitely would in
phillips. it's interesting, because the refiners, if you look at them going back 12 months or forward 12 months, all look cheap fundamentally. a lot of the names, like valero, some of the names are trading at 4 1/2 times. and enterprise value basis. phillips is much more expensive at about ten times. one of the reasons, though, that these multiples look so cheap is because a lot of people don't believe that these fat margins they've been getting for so long can persist. a function, as steve just pointed out, of cheap crude, especially in the mid-continue nebt. you know, what you have to do is really cyclicly adjust these numbers and that's probably going to justify some of the low multiple turns that you see on these things. and so i definitely would not buy them up on a rope here. >> just to finish off, can i put a bow on it here? >> yeah. >> the only thing that's a positive catalyst is the keystone pipeline. if that comes to fruition, a lot of the gulf refiners still will have wind at their backs. the mid -- let's call the midwest refiners, they are going to have a head wind going on -- >> yeah, but keystone pipeline
issue, that can help normalize crude prices, right? typically, kruld prices are thought of as a global commodity. they have not been. that's what's fueling domestic oil. if you can start pumping some of north american crude to more global markets, you're going to see that spread start to come in. >> all right, we have to move on here. chesapeake stock rallied 6% on the announcement that their ceo is stepping down in april. a move that our own karen finerman has been calling for. in fact, take a listen. >> this pay package is about sush. one of the things in there, the $12 million the company paid for his map and water color collection. it's ridiculous. i don't note how compensation committees can feel comfortable doing this kind of thing -- they said that he created unique opportunities -- that's his job, he's the ceo. this board, this cceo, or both,
they cannot stay. this is horrific. i don't know how they allow it to continue. >> of course, the other bit of news is that the boar, after an investigati investigation, found no improper conduct on the part of aubrey mcclendon, which you railed about. >> i saw it while you were on the air last night. >> i sent you an e-mail. >> i was like, you have got to be kidding. it's absurd. it's laughable. absolutely laughable. but okay, it is what it is. i think that, you know, it -- the whole thing is just ridiculous. he should be out, i think, could he have created value, yes, i believe he did. i believe he was compensated more than fairly for that. i would be long this stock now. >> you would? why? >> because i think there is real value there, there's assets that, you know, part of -- what happened to thele have a wags, because they are so levered, there was a fear of a cash crunch here. they have averted that now and with him out, if they were to face that again, they would be able to avert that again and allow the valuation of the assets to mature. obviously natural gas prices
here has been very hurtful for them. >> right. >> but i think natural gas prices will rally. so, all that having been said, i would be long a stock. i wouldn't be short it and him -- i see it a positive. i know people think it's a negative because he was such a value creator. >> right. >> i'd be long. >> do you agree in that it is the unlocking of value in the company as opposed to the cloud being lifted from the stock? >> you know -- i'm not sure how you phrase it. i know there's got to be a lot of asset sales with chesapeake. i don't totally disagree with karen. i would not be short the name but i do not feel comfortable buying it. there are asset sales they need to get their head above water. >> what's the options read on this, mike? >> the options market is definitely bullish. probably a good time to follow that lead, in my point of view. one of the things is, this is a heavily levered entity. right oafter the news came up, the stock was up a small amount. 10% in terms of market cap. that's not that much of a
change, when you think about the underlying assets of this business. the options market, they were buying the 21 strike calls, paying 80 cents for those. i would go further out, because implied volatility is cheap. >> all right, you catch more options action every friday, 5:00 on cnbc. still to come, facebook shares turn volatile after its earnings announcement. we get reaction from one of their investors. and we will on the conference call. first, they are talking off their gloves. steve grasso, dan nathan, take on the amazon rally. can it last? street fight, next. ♪ [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars.
welcome back. facebook declining more than 2% in the afterhours section. let's bring in robert peck. he is the president and partner at corise and an early investor in the shares. you got in $30 after the ipo. so, bob, in terms of the earnings report, what did you hear out of this report that you liked or didn't like? >> three things to take away. one, he says in the announcement that they are a mobile company. that's gone from 0% of rev nuc s rev nuchs to 23%.
that's tremendous. the core revenues accelerated again, 43%. so, their core business is getting better. and number three, along with all that, their margins expanded, as well. 42% to 44%. so, across the board, you saw the things you wanted to see. your next question may be, well, why is the stock down 2% after market then? >> yeah, we got amazon's report and it rose. why not this? >> the big reason you are seeing that, stock's up 50%, 60% since last quarter. you had a long run. i think some people are thinking about maybe 45%, sort of core growth rates and they did about 43 or so. so, those are the two big things in the call right now, they are talking about investing for the future. much like amazon, investing now, hiring employees. they are not going to maximize for this year, they're going to maximize for the long-term potential. that's what you want to hear. >> as an investor, obviously not looking out six months here, you are looking out years. at the end of the day, here is a company that's not expected to
grow because of all that spending in the next few years. how do you talk to people about valuation or is this a name that you even care about valuation, because there aren't a whole heck of a lot of earnings right now. >> i think the momentum is with the company right now. what are the advertising agencies saying? core business, which right now is fbx. strong momentum there. trades are ten times revs, 40 times earnings. when you look at where the stock could be in two years, i think you can imflip a similar mid teens multiple, 40 times earnings multiple and you get to a 50%, 60% return. >> that's not bad. have you increased your position? >> we have a full position. >> okay. bob, thank you for stopping by. >> thank you for having me. >> bob peck. amazon reporting strong fourth quarter earnings yesterday. the stock jumping on better than expected profit margins. but not everyone is buying into this rally. it is time for a good old fashioned street fight.
grasso is the bull, dan nathan for the bears. gas sow, go ahead? >> it's about gross margins. it's about what they've been doing with their money. they invested in fulfillment centers. 89 global full phfillment cente now. they invested in their website, in the kindle business. you watch gross margins go from 20.7 to 24.1. it's going in the right direction. you don't buy the stock on valuation. you buy it on growth and i think growth is there. >> dan? >> you talk about growth, i mean, sales are decelerating and that's something that's pretty obvious here. at the end of the day, there has not been another stock since the financial crisis bottom that was up as much, a large cap tech stock that is up as much as amazon. 700%. apple only 500%. the expectations before yesterday in amazon were very low. you saw this small increase in operating margins, in gross margins and it took the stock up a little bit. let me tell you something, that stock was not up nearly as much as it was.
a funky print yesterday on the close that marked it down to 260. that stock was trading 268 at close. i think there is a sentiment bubble in this stock. >> first of all -- look at your camera, my friend. first of all, when you look at this stock, it's a retail play. i'm not saying rush in right now. i think if the market sells off, you can buy the stock at 250, 255. longer term, it's a screaming buy. >> can i put a bow tie on this? whatever you call it? i think that the expectations because of that report yesterday are high. if they have to start spending again and those margins come down, one shred, this thing gets nailed and you see it in the low 200s. >> nobody cares about how much they spend. >> they do if the margins start to come in here. >> people are pricing this as a cloud play. people are pricing this as going forward. a person like karen wouldn't touch this stock but most wouldn't -- >> let's turn it over to the traders. the 90 seconds are up. karen? >> i wouldn't touch a stock like
this. you know, to me, it's a great company, but it's a greater fool theory. you have to be comfortable. the greater fool theory will continue if you buy it. i'm not comfortable. and i haven't been. >> fair. all right. >> do we go to jon, or? >> what the hell. go ahead. go ahead. >> well -- let's see -- no. unfortunately, grasso, i love you -- >> let's not go to jon. let's goes to -- >> you want to go to mike? >> let's go to mr. peck. mr. peck? >> he is long amazon, by the way. >> oh, absolutely. >> you do have one vote. grasso, even though dan won. anyway. we have to take a break. next on "fast," where you can find the most bang for your buck as the euro surges to a 14-month high against the u.s. dollar. back right after this.
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nice pop for shares of lvs in the afterhours trading. let's get the latest from josh. >> nice pop here in the afterhours. missed on the bottom line, but beat on the top line. boosted its dividend. analysts saying they are doing extremely well in china. revenue per average room at the four seasons in macao up 21%.
las vegas sands up some 6% here in the afterhours. melissa, back to you. >> josh, thank you. mike khouw, lvs or do you like maybe mgm? >> well, you know, it's interesting. i think the conversation might make the mgm thing more interesting. i wouldn't chase the stock here. the options market called it right now. they were buyers of the 52 1/2 calls. 7% move, that looks to be what we got. >> let's move on. the yoeuro hitting levels we haven't seen since 2011. let's bring in amelia bourdeau. i wanted to first ask you about the reaction to the gdp number. we did see the euro strengthen a little bit on the back of that dollar weakening. what do the currency markets tell us? it seemed like stock investors wanted to shrug the whole report off. >> yes. currency markets shrugged the report off mainly, as well. it did move euro a bit higher,
though it was temporary. people largely ignored the ugly headline because consumer spending was strong and most of the weakness had to do with inventories, which can be made up next quarter. so, not as large of a currency reaction as we would normally see with a headline like that, because of the details. >> right. and, but you do expect the euro to strengthen. >> yes. >> why? >> there was a large barrier in the market that was taken out. and it surprised a lot of foreign exchange investors that it was taken out. people were caught short the euro, meaning they had to buy the euro to cover their short positions. that propelled euro higher, to a figure of 1.3588 today, was the high. it will continue the momentum up. there aren't a lot of people at this point willing to stand in front of the trade and also because people missed the trade, they're going to try to jump in on this momentum and try to catch some of this revenue now. i'd like to be long at 1.3550.
i'd like to target 1.3750 and just put a stop on 1.3450, a short-term trade. >> amelia, see you friday for "money in motion". time not for pops and drops. we kick it off with a drop for u.s. steam, down 4%. steve? >> really feels like everyone's throwing the kitchen sink at u.s. steel. everyone is so negative in the space. it's really the china trade for me. i don't think it's going to be that bad. i'd be a buyer. >> dr horton, a drop today, 3%. dan? >> after being up 12% yesterday on better than expected earnings. making new five-year high highs. they are going to have $7 million in debt. just take a little bit of that move. >> a pop for robert half, 7%. jon? >> 52-week high. as well as manpower, m.a.n. up 44%. both of them were up over 20% last year. >> pop for adt, up 3%. karen? >> yeah, on earnings but also on an accelerated buy-back of big
size, which is what this company should be doing given the balance sheet and the cash flow they generate but you don't need to chase it right now. >> a pop for avery dennisson, mike khouw. >> four months ago, the deal fell through when they were trying to sell their office products to 3m. they did manage to close the deal, sell that unit, to ccl industries of canada. i this i that's a positive. but the stock valuation is not attractive to me. >> and we have a pop here for el gigante. 19-foot, 1,600 pound cigar recently sold in florida for $185,000. the super-sized cigar is wrapped in 16,000 leaves and as much tobacco as 25,000 regular sized cigars. the buyer is hoping the investment doesn't go up in smoke. >> ha! >> imagine what that would be worth in colorado as recreational -- >> john mcafee bought it?
it is time for the good, the bad and the ugly with dan nay tan. let's get straight to the bad. last month, dan weighed in on navi t navistar. take a listen. >> this stock has been a truck wreck if you want to call it. they had the lowest orders that they've seen since a quarter in 2009. this one is trading near the 52-week low, you probably want to avoid. >> well, they're actually up about 15% since then. dan? >> probably want to avoid. listen, you want to avoid now up p 15%. this stock has 23.5% short interest. they just had a bad bit of news. i didn't see any reason to step in there and buy it. >> so, poor dan, we only have a bad. it's only a bad. there's no good. >> well, probably some ugly. >> there's good in there somewhere.
>> i think there is some ugly. >> yeah. yeah. are we going to roll the ugly? >> oh! i was about to protect dan and you're coming after me. >> yeah. >> unbelievable. >> always gets a good laugh. stick a mustache on somebody. it is funny. y let's get some of your best tweets to the "fast money" traders. dan, we start with you. stock picker asks, anyone else feel like this blackberry 10 rim thing reminds them of palm last year, pop before the epic fail? >> yeah, no doubt. this is one where i think people got involved in the stock because they thought it was an easy opportunity to take the short interest here and really run with a low name at the time when this date was announced last year. and really kind of run the shorts a little bit. but at the end of the day, i think this phone is going to be a massive failure. i think the company will be broken up and i think there's probably some decent assets there. but in the mid teens, you have to be careful. >> okay, we have one here for
mike khouw from brian. bought the herbalife march 40s outright for $3 and now i'm sitting on a double. >> under 24, no, definitely not. i think there's a lot of smoke in this stock, but the valuation argument is going to keep dragging buyers in. i think we're probably range bound on this thing for several months. i'm probably a better strangle seller in hlf for the next several months. >> okay, karen, this is for you. which is a better short? amazon or netflix? that is an interesting one. >> that is. that's like saying, would you rather have your hand cut off or your knee? i'd have to go with the better short, would be amazon, because i do think, with carl out there, that netflix theoretically, possibly could be taken over and amazon, to me, is unlikely to be -- >> amazon can do everything that netflix does for the love of everything holy, just throw me a freaking bone, please. >> they may buy best buy.
>> look, i would have said -- i did say the same thing in amazon, hatch, you know, down 50% from here, so, what do i know? >> all right, lady. >> don't get so sensitive, steve, please. all right, dr. j -- richard tweets to you, what does jon think about macy's? >> i think they have one of the best managers in the business. so, i like them for that. but i think this past quarter because of sandy was the challenge. going forward, i like them. >> and for grasso, ann tweets, triple d. your take. >> i have to tell you, revolution air product. i think it's got a huge, huge potential. i'm there. >> all right. >> should be there, i should say. i love the product. >> all right, coming up on "mad money," jim looks at the clb coe, plus, amazon versus apple. do not miss cramer's insight. first move tomorrow coming up next.