tv Fast Money CNBC July 19, 2022 5:00pm-6:00pm EDT
on the verge. >> i think so. i think they will say, energy is the only thing. it will take a while because it should. you have to have a lot of consumers here. i think the june lows are interesting. >> this was a good one today, really broad-based. >> that's right. >> good stuff. thank you. we'll be back with fast money. right now a rip roaring wall street, the s&p scoring more than 3% with every sector firmly in the green. the nasdaq closes above its average for the first time in months and there were a couple standouts. we'll tell you what they were. plus, netflix shares soaring after the streaming giant said it lost fewer subscribers than expected. we have the only analyst to upgrade this buy since april.
and twitter on the fast track, getting a big win as it looks to expedite its trial against elon musk. what comes next in this twisting and turning saga? we have answers for you here on fast money in the heart of new york city's time square. we are going to start off with netflix earnings. shares are soaring, levels not seen in three months, higher now by more than 7%. the company lost less than half the subscribers expected. >> reporter: the second quarter just wasn't as bad as netflix feared. investors are breathing a big sigh of relief after the loss of 970,000 subscribers.
that's less than half the loss prompted. expected gains for the third quarter are not as strong as analysts forecast,, which was 3.8 million. netflix is attributing the challenges to competition, password sharing, and the economic downturn. but netflix says it's making progress, generating revenue from password shares and instead it expects to draw premium pricing and evolve over time. the ceo wrote, quote, in time we are hoping to create a better than linear tv advertising model that's better for consumers. and the company offering more detail, saying, quote, we have adjusted our cost structure for
the current rate of revenue growth. >> thank you very much. i know you'll be busy. guy, i think the reason the company gave for some of their struggles were interesting, including the economic downturn. are you canceling netflix when things get tight or do you want to hunker down and watch more? >> well, competition started really just a couple quarters ago. and you know, i understand why the stock rallied just on the headlines of better than expected subscriber losses. it's a crazy thing to say. but that third quarter, 214 is below the range i was looking
for. and their operating margins this quarter weren't great. they have been interesting on evaluations, and that's probably true. i think people are excited about the microsoft relationship. maybe 225 and then maybe falling again. >> dna, what do you think? we're sitting about 216 right now. >> i think they did a good job putting the whisper out of expecting a loss. they probably gained here and the fact that it's not down a lot, down 35% last quarter and 25% the quarter before that, i think it speaks to the fact that the company knows their challenges and they want to monetize every household, and we'll start getting more and more of how they're going to do that say over the next two
quarters. i think the valuation for the first time in a long time looks attractive. the competition is here, and that was a pillar of the barricade for a long time. but i want to make a bet on reed hastings. >> and what do you make of the ad about the 2023 event? do you think it should be sooner or does 2023 feel right for you? what does that do for you as for the company adding more revenue? >> i think it's smart or appropriate that they are talking in measured terms about the impact of the business model with the with interesting revenue market and that they are not expecting at lo. they are trying to keep expectations lower, and this is a company that didn't need an
ad model six months or a year ago. i imagine they are driving very hard on this. why go slow on this? i think we have seen this in a lot of other platforms. and let's be clear, we have sat for years and watch withing the ad-supported model in regular tv. no question people will subscribe to this type of model. i think listening to a business that's downsizing expenses and certainly right sizing some of their growth relative to where they are here makes a lot of sense. it's amazing where they have gone in three quarters. a year ago, the downgrade, and
here we are. this is the first two consecutive quarters of negative subgrowth in this company's history. so i think those are the things we are focusing on. yes, i think in terms of valuation, it's easy to own the company here. it's still one of the dominant streaming players. >> and i think they are talking about right sizing the structure and saying this quarter wasn't as bad as it could have been. do you feel it's a good position for where they are right now and looking for ways to find lost value? >> they say they will be capital-positive, so that's good. it's interesting to see the company has shifted from internet growth to really sort
of focused on the operations. they're also talking about getting members who are other families on the same membership, getting that. that's important. they talk about streamlining their costs. they didn't used to have to focus on this. they still have to focus on content, and there's a lot of competitors out there. and i don't know if it's the bottom, but i think this price is pretty well discounted. i know it's a competitive environment. it's definitely something i would look at. and the reopening trade is something that people have
looked into. i think a lot of bad news is out and the valuation reflects a lot of bad news. >> and we have michael baxter joining us today. got some of your notes here about what you make of the quarter. anything here that you heard that will lead you to change your thesis, coming out with with a new recommendation tonight or tomorrow? >> oh, i won't change. i'm not allowed to preview what i'm going to do, but i'm not going to change my thesis. the only negative i heard in here is splitting up the cop tent and i hope they have
learned that's an antiturn tactic. >> the microsoft relationship is interesting. it could have gone a number of different ways. they went microsoft. i don't think the market is making a big enough deal. is this interesting to you? >> i have to be honest, i didn't even know microsoft was in tech and of course they are. where i i think it gets interesting is that microsoft is committed to streaming to any device, and i could see them bundling netflix with their pass. i could see microsoft getting to 100 million subscribers, sign a deal with samsung for smart tvs. i think a partnership with netflix would make seasons and could work out for both parties. >> when you're looking at subscribers and loss here, it's always surprising they have
been able to manage with all the password sharing. where will potentially new subscribers come from and is it breaking apart family sharing? >> well, they are close to saturation. i think their approach on password sharing is intelligent. they are talking about a small up charge for additional households using the same password. that's kind of what spotify does, like an unlimited family myrtle beach. t-mobile, $25 for each additional line and they don't care where the people live. so i think there's a way to squeeze that in there, but they're saturated in the u.s. the real way to get there is offer a lower price here. >> and i have a question about
your history with this stock, and finally this came around and you didn't seem to hit the bottom. did you ever sort of lose your resolve or just stick to the market? >> i told everybody i ever spoke to that they would etch on my tombstone that he was right about netflix. no, i never lost hope. everything that happened, it just took eight years before i happened. i expected disney to compete sooner. honestly, i thought we'd have competitive streaming services in 2012 and i was wrong. i probably could have upgraded for a few years and put it back but i'm stubborn and stupid. >> i don't know about that.
very interesting to talk through this with with you. dan, i want to give you the last word on netflix. >> i've known michael for a long time and i think it's really easy to tag him as a guy that's a loan bear for that long. but if you read his tips over the years, you took out fundamental tips and he's been trying to lay pout the basics. i bought this stock about a month ago. i was hoping one more big downgrade to the subscribers, not a great quarter here. i think it's a relief rally. i think i would be shocked if it got over there any time soon. there's nothing that great other than it wasn't a disaster.
i am bullish long-term, thinking multiple years. i do think they will get the ad- supported model correct. coming up, delay denied. new developments in elon musk's trial and the deal on the horizon. and stocks rallied today and one group saw outside gains. we'll break down the action when fast money returns. we're back in two. ♪ ♪ how's he still playin'? aspercreme arthritis. full prescription-strength. reduces inflammation. don't touch my piano. kick pain in the aspercreme.
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welcome back to fast money. on wall street today, take a look at the across the board gains, dow up nearly 750 points, s&p dropping more than 2.5% and nasdaq adding more than 3%. only one sector really outperformed in the market, more than 4.5% today. so what does this say about the state of the market? >> i make this smh move is
extraordinary. the combination of getting the boost from the lower rate environment, the combination of getting reinforcements from a couple semiconductors, great numbers out of japan and we are pricing a lot of those dynamics. this is a chart we want to see continue to outperform, soient the charts that follow this market, this was a rally today. some is just low prices. >> what do you think of that? do you think this is telling us
more about the broader state? should we be more positive? >> feels to me like more of a sentiment share. i don't know much that the underlying business changed much today. it was on the heels of enormous underperformance, and some of those i think are still pretty expensive. used to be semis traded with with somewhat of a cyclical pe over the life of the cycle now. that seems to be lost now, so some of these still seem pretty high to me. so i feel like this is a bounce. >> guys, what do you think right now? would you looking at individual semis with with more to run? 4.5% is quite impressive. i'm not sure we can put that on
back to back days right now. >> no, but 12 times the next year's numbers, i think tim is right to point out since june 15th, the they the fed had their last meeting, and i don't think it's coincidental. i'm sure the ergos agree that the yields have come down. i think that can continue. since that day, i've thought correctly and incorrectly now. i'm going to stapped by that. i think when it gets there, i think the next low is coming very quickly. >> dan, what do you think of the move in brussells of 3.5% there? do you think there's more room
to run there? is it a dollar sort of play? >> i think it's tied to what these guys are saying about the semi move here. you'll want to go to more on the small caps in the u.s. and chip makers, that sort of thing. sentiment got really bad and we were talking about disrupted supply chains. it's crazy this this will make it to the house. it could have been a buy the rumor sell the news kind of thing once we get more over the course of this week. i think it's important to remember that just because we have a rip roaring day, a beautiful day in the stock
market, and basically everything was up here, but that doesn't change the backdrop medicine that's so challenging that's not likely to change on a dime either. markets can change on a dime but i don't think we're done here. to me i think you want to be careful chasing something that is going to end up being top to bottom. twitter's speedy trial getting the thumbs up from the court. what's next for the deal? details next. plus, we are flying into some airline options. how they're playing this one ahead. you're watching fast money,
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tonight record-breaking heat torches the uk. how much hotter will it get? welcome back to fast money. twitter shares gaining nearly 3% after a delaware judge granted the company's motion for an expedited trial against elon musk, who planned to walk away from the $44 billion deal to walk away from twitter. karen, what do you think happens from here? >> i think that not a lot happens to the stock here. i think the stock won't move that much either way because we won't see any fireworks until the october trial. maybe there's a chance of
settlement. that's possible. i don't think it happens in the near term. i think musk wants to try his hand at trial before he hopefully gets religion, because i believe the musk side has the weaker argument by far. the judge wasn't having any of this today. so it was clear that it went a lot closer to what twitter wanted than the sort of ridiculous treasure hunt for some information that i don't think they're ever going to find. right now i think the fireworks will die down. >> fair enough. gene, what do you make of what's going on right now? you can be an attorney and try and figure out the outcome but help us play the stock.
if i'm a shareholder, am i holding on tight, hoping the court makes elon musk buy? >> i think you should let go and start the play the game that i listen is elon is not going to settle. it's not in his vocabulary. and this is not a prediction. i think this goes do court and elon musk is going to save $4 billion to $5 billion. he gives up 10%, gives $10 billion back as part of the deal. that's a win for twitter, getting the stock into the mid 40s from here. i think if you put it in the perspective is that a 10% move with with all these fireworks around here probably isn't great risk-reward, but i think there is a higher bias here
just given that the evidence or i think the outcome here is probably stacked as of today in twitter's favor. >> and you have been on the right side of the negative sentiment, so what do you expect there? is there anything opt fundamentals here that gives you a reason to think the reset would not be a surprise? >> ening the fundamentals are probably going to be ugly. i think that's why twitter has been pushing hard for an expedient trial, because they'll say, look at the damage that's been done business. i think the headlines and
reports will be negative. even through all the negativity, i think investors have been through so much here that they can look through to twitter, 260 million daily users. meta is down a lot too, but it's almost a 60% discount to that. i would say it will be a report they blame on elon but i think investors are going to look through it. >> that's really fascinating. what do you think this says for twitter going forward? does it shake them at all? >> i think once this clears up,
there's a shadow on the company to ultimately be not really aggressive and monetizing. i think for elon, when he was talking with the company and giving ideas about monetization, i think that sparked good conversations and i think they will find ways to come back to the value of each daily user. so i think there will be some good that will come out of this. i want to caution here, thinking in the near term on this earnings report, it will be a mess because i think those people, those employees implementing those changes and products, their minds are on something totally different. they want to get a different job and it's not a productive time at twitter. >> absolutely. stay with us so we can bring in some of the traders here.
i know karen gave you a nod when she was discussing the position today. is there a trade to be made here? >> i suspect karen is calling this really well. that being said, there's a chance that elon settles. let's see where tesla stock is after this report and what that does for his ability to close on the deal if he's ruled there because it sound like a lot of participants are not that interested in doing it. the company is not worth what he's trying to pay for that, basically 50% from where the
stock is now. i don't think it's interesting and i don't think it's worth where the stock is right now. >> tesla, the electric automaker is sitting on a nice hedge heading into the quarter. let's get the technical view. >> well, you finally balance between the success and failure. you have this tight range you see, and it's the same chart with a different time frame. take it back further, and we have been having high
volatility and low bearing. where this debate or standoff is occurring, it's under the trend line. again, the money guys are going to say something and there are already people shouting not to move it high or low: now it's points off. that's as close as you're going to get. i think it's going to break the downside? it's running 60/40 that it will go down, 40% say no, it will get resolved. >> really interesting stuff there. that's quite a range there. thank you. and do you give it a 60 chance, 40 chance? >> clearly carter coming to us
from the guy guggenheim. and the april photo, stocks traded up obviously only to fall off and here we are now. i think we'll see a similar move.i think the stocks will get solid again. i don't think we have heard the last of former president trump's rant about elon musk. i think they will get more directed and make more out of this tesla story. i think higher startings and lower after, just like last question. >> gene, i think you believe there's a long-term story here? what do you make of tesla?
>> i try and be judicious and i just look at what i see as the bad. the facts are that the auto industry to $2.5 trillion market, and tesla has demand for their products. in the june quarter they life- supported 27% delivery, down from 67% in the march quarter. disappointing detail. when you adjust for shanghai, the growth would have been similar, 68%. the reason why growth is high despite the fact that it's been censored is that people want their cars. i don't know if the stock is going to be up or down after the report. but i do know demand for their
products aught paces their ability to produce them. they can produce 2,000 globally and gm sold 7,000 electric vehicles in the second quarter. it's such a wide gap, i believe the company will find a way to produce more. i think it will be more than just electric cars and they can do other things. no other car company has all those optionalities on the table, and i think that's what makes this company a unique investment opportunity. >> that and its founder as
well. thank you so much. we'll see you back tomorrow after the report. jen, what's your call? he's not going to make a call on if the stock is up or down after the report but you can. >> reporter: well, i think this shows the sentiment and cult like status here. it significantly underperforms the highest part of the market valued in the last couple weeks. first stock, 160% on two events essentially in 2020, the s&p fusion and where the stock split. i look at the multiplals and i don't think stocks are trading at those premiums or will be, and i think there's some rationing down of that to go. i also looked at the
competition from hyundai, from kia, the big conglomerates in this part of world. this was always a big story. i think the competition has outperformed the gap to get that kind of a following. >> very good. we'll keep talking about this unwith. coming up, we are flying with with airline and jumping into the auction pit. those details and next. plus real standup stuff, the name for eyes overhead. we'll be right back. you'll always remember buying your first car. and buying your starter home. or whatever this is.
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call volume in united today. 6.5 percent is in line with the amount it's moved over the last eight quarters. it it will benefit from the earnings and could see the highs we saw as recently as april. >> thank you so much. guy, what do you think of united? you pick the time frame. >> i think the fact that delta finished at the 30 level, where we bounced from early march. delta just finalized plane orders. i think they are balancing probably the best in the group. if you think united will have
that kind of move, i like what mike is saying. >> okay. i guess i need the airlines to help reunite people with their bags. tomorrow united airlines ceo will be discussings his company's earnings report. and tune into the full show friday at 5:30 p.m. eastern. coming up, we are hitting some of today's biggest movers, boeing, nike and more breaking the market. when traders tell us how to make thinkorswim® even better, we listen. like jack. he wanted a streamlined version he could access anywhere, no download necessary. and kim. she wanted to execute a pre-set trade strategy in seconds. so we gave 'em thinkorswim® web.
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broader market. and legacy automaker filling the gap, ford revealing et cetera new car. trader's choice, which of these names are you looking at? >> ford traded down to the levels we saw may of 2021, bouncing now. july 27th the valuation is ridiculously low. i think in the earnings next week, the stock will continue to rally. karen, how about you? >> i'll follow up with with with gm, pretty much for the
same reason he said. i think the report next tuesday, you know, i think it will be a question not so much how much revenues are but how much they were not able to fulfill demand because of supply chain. so why it's up 5.5 5.5% today i don't know. >> i don't know why it was up today, maybe just because evening else was interesting. the multiple compression has been pretty dramatic here, expecting the trading like 27 times is really interesting to me. i was hoping@this before days like today. it makes a lot of sense to me.
>> sam, what about you from that list? >> can you imagine if we combined would you rather with the trader's choice? we'd be blowing minds here. i'll go straight to boeing and say a 36% move, it's time to get good from what's been a lot of bad. we have got about positive june orders and deliveries and some certifications. i think this is part of why boeing is moving higher, still on the down trend. but second half, it will really be something. this is $20 a share and precap
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welcome back. jim is talking with the ceo of ibm after yesterday's full report. catch that at the top of the hour on mad money. meantime, check out the moves in crypto today, bitcoin surging to its highest levels since mid-july. help us make sense of the market that drives me crazy. >> full disclosure, i started
buying when it was 2100, down to 867. we have this move in a short period of time and i think a loft crypto traders focused on this. that's been the callous for a long time here. i think i would lock to take profit around $2,000 again due to my average. it's clearly risk on? karen, what do you think? is this going to lose some steam? >> i kind of agree. the bounce has been quite impressive, although the down trek was with with even more impressive with the magnitude. i don't know if any of this crypto bottom is that there was an overleverage or it's the idea inflation could be coming
welcome back to fast money. let's get a check on stocks moving after hours, net flick of course jumps after losing fewer subscribers than expected in the second quarter. jb hunt trading lower and interactive brokers missing band revenues in the quarter. that stock is down after hours. any final thoughts here on netflix? this will be a big talker tomorrow during the trading day. >> and we have gone through a lot of fundamentals. the stock traded up through the $4.19 low down to $2.11 and you're back in that range here. i think you hold the bottom end
of this range, it's tough for the technical standpoint of the stock. >> time for the final trade, so let's go around the horn and we'll start with with tim. what's your final trade? >> why not? airlines are going to report and delta already reported that the airlines are trading not only with the recession but not seeing the return in european flights. so we are getting better trends and i think they will continue. >> i don't like buying things at 4 percent, 5%, but mattel i would buy because they traded up today. with the disney princess franchise, i think it's a great team and they have done a great
job. >> dan? >> that 2020 breakout level 105, 100ish is really important. that's what i want to start nipping at but i wanted to hold that level. >> and guy, what's your final trade? >> check the guggenheim, qualcomm i rally. >> thank you all for watching fast money. mad money with jim cramer starts right now. 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. >> i am matt kramer. i am just trying to help you make some money. i do not just educate but i teach you. you can also tweet