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tv   Fast Money  CNBC  April 18, 2013 5:00pm-6:01pm EDT

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chipotle kcked it out of the park. revenue and bottom line were very, very strong, michelle. >> gain of 5% there on the afterhours. ibm lower by 3 1/2. thanks so much for watching. that does it for the "closing bell." >> "fast money" starting right now and they have the news conference from boston, as well. welcome to "fast money," we begin with breaking news, an fbi briefing on the boston marathon investigation is expected to begin at any moment. when it happens, we'll bring that to you live. as we are awaiting that press conference. let's check in with scott cohen in boston for more on what we know about the situation. >> reporter: as you can see from the live picture in the briefing room, melissa, they have set up some easels that are covered right now. it was expected some of the pictures would be shown, the images they've gotten from all
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the cameras at the site of that explosion. we will see, the video cameras, cell phone cameras and so on that captured those attacks from all different vantage points. we have not heard from law enforcement in the last two days. there is now going to be video shown at this press conference. there's going to be video shown and that, that means that they've gotten a lot of evidence that they can work with. but it also suggests they're going to be appealing to the public as they've been all along to see if they know who these people are. and figure what exactly it is they have. but the good news is we're in such an age of cameras and videos and eyes basically everywhere that this could be important. the other thing that we know they have been combing through the site even today, evidence
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technicians continuing to comb through the site looking for physical evidence. and remember the fragments of the bomb they had uncovered early on and pictures that they released showed the electronic components which seemed like readily available household components. and as nbc news has reported, authorities have been canvassing some of the hobby shops to see where these things may have been purchased with the idea that they were purchased locally. again, a lot of misinformation, information, speculation has flooded into this news vacuum over the last couple of days. they are finally going to fill it up with some information that is on the record from law enforcement led by the fbi, which is leading this investigation. we understand now that the mayor of boston will speak. we originally thought that it was going to be only law enforcement. but the mayor at all of these news conferences after being discharged early f the
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hospital on monday, le t attend the marathon because of a broken leg. but then all of this happened. he will be there, as well. but the news conference likely to be read -- led by richard delore who has a great deal of experience in this type of situation. lots of questions and there have been lots of questions over the last several days and lots of questions from the public. we should get some answers very shortly. melissa? >> thank you very much, scott cohen. we are expecting that live press conference in boston when that starts. we'll bring that to you. meantime, let's take a look at what we're following for you tonight. triple talk. ten-year treasury on the vix, still think he's seen the highs for the year? we're going to go off the charts to find out. it's the stock that can't get a break, huh, but has it finally gotten cheap enough? find out how the traders are managing their risk in this.
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and seaworld pricing the ipo, communing the whales to find out if you should be diving into the stock. we do have a slew of tech earnings after the bell here. google reporting higher sales and profits. let's take a look at the action in the afterhours session at this point in time. it had been trading higher, still is, but certainly pared its losses. meantime, look at the action and shares of ibm falling sharply in the afterhours session down by 4%, hardware sales slipped and microsoft's third quarter earnings rose 19% to the core windows division reported higher sales. we are seeing a 2% gain in that stock. let's turn to our traders here. dr. jay, guy adami and mike khou at the options desk. the problem here is that the nasdaq is the one that really felt the pain over the past couple of days, down by 1.2%. we have these tech earnings, which theoretically could be the linchpin to the action tomorrow. >> and they'll help a little bit. google, of course, was down hard today, down $16, i believe, apple was down hard, a new low
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since 2011. and then after hours, we've had some bits of good news here and there. google, of course, came out with those earnings that you spoke of. we hit a high of just shy of $800. $796 and change, and on the lows, it was $760. that's pretty big. people are trying to digest exactly how close to the yahoo numbers these guys got on the pay per click and all that sort of thing. at yahoo, by the way, that was down 7%. >> right. he said in terms of the market action and the s&p 500 in the weeks after ibm, ibm was really the determinant in terms of the action. >> well, and the ibm, the revenue miss to me is what's so glaring in terms of ibm. there's a lot of noise somewhere else. but i haven't seen ibm miss on the revenue side. to me, it's a significant miss. again, if you were waiting for
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ibm to bail out the s&p tomorrow, you might have to look for something else. to me, google is its own animal. ibm specifically given the move we've had now, given the afterhours move in terms of the stock. now we have to be careful. we'll talk about s&p levels later. the fact that ibm traded up to 215 and traded, you can make an argument double topped there. sort of scared me a little bit. >> i don't think the street is surprised that ibm missed on the revenues. they've been telling you all along they're going for a more d this is a company that never misses. so missing on eps slightly, that's different. the stock is a big deal. ran into resistance at 215. although it reinvented itself, it's running into software pressure. the irony is the hardware came in weaker, selling the x-86 business is a big driver for these guys. it's a stock that needs fresh catalyst and the market doesn't have it. >> and we'll see about ibm in terms of what they say. oracle launched a new line of servers themselves. we'll see if there's
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competition. karen, quickly your thoughts on any of these stocks. you held microsoft, you sold it. >> yeah, i was actually surprised, that's a little up today. something for the bulls tomorrow. but the rest of the news. google was up slightly, but it was as we briefly talked about, disappointing in that tax rate benefit there. so we'll see how that call goes and apple, i really am at a loss of what to do with apple. it had 400 puts that expired next friday. we'll have to revisit. it'll go out at 400 on the nose, which will be -- >> exploration tomorrow. >> this is for the following that do have earnings embedded in them. >> 26 -- >> volatility between here and there. >> april 26th. >> let's get some more on google, hit the conference call jon fortt's been following. what's the latest? >> they're talking a lot about the core business. they have pointed out that motorola's to blame the quarter to quarter decline in revenue. looks like gross margin wise it
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was at negative 18% and that's non-gaap, gaap was harsher. their enhanced campaigns, doing upgrades with combined desk top and mobile campaigns. they say 1.5 million ad campaigns have been upgraded. really speaking to the strength in this core business, which over the past few quarters has managed to cover over the motorola struggles a bit. let me see, the cfo said that results from the motorola segment will continue to be variable going forward, but they are excited about how the business is coming together and adjusting, but clearly with just $1 billion in revenue for motorola versus around 1.3, 1.4 that some were expecting, disappointing on that segment of the business. >> thanks for that update. let's bring in an analyst at wedge partners to break down google's numbers. great to have you with us. i've gotten other notes from analysts saying it's a tax rate. they had an 8% or so tax rate that drove the beat when in past
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quarters they've had double digit percent tax rates. is there a question in your mind, is the earnings -- as to the earnings quality this quarter? >> you know, not really, that was an r & d tax credit that had flow through in terms of year. i remember looking at the core business, i think motorola as you mentioned, it's a little bit of dragging a lead ball on a chain. but the core business is very solid. volume was up 20%, pricing or cpc as people call it, down 4%. that's moderated, and i think the really key message here is that the core business is still in that kind of high teen to 20% growth with stable margins, ebitda margin in the mid-30s range. i think to the point of jon mentioning enhanced campaign, they're trying to equalize the money that advertisers are spending on mobile as it relates to desk top. i think that's starting to work. we saw that a little bit with yahoo. i think we're going to see that with facebook in a couple of
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weeks. mobile advertising may be in the infancy is really starting to work and that was part of what was in google's numbers. >> it's tim. the product listing ads is something that's starting to work for these guys. and this is the core business, it's evolution of the core business. it's allowing, hopefully, users essentially to go through google to go through these acquisitions. what do you see on this? this to me is something i don't think people are paying enough attention to. >> yeah, i think that's a key point, you know, i think the force here is behind google in terms of the monetization of the business whether it's desk top or mobile and frankly a lot of the priority and the listings and so forth are continuing to benefit advertisers. there was always this kind of higher prices and maybe not a significant return on investment, but i think we're still where you may be an advertiser paying a higher price per unit and getting a higher roi because of the targeting and placement of that. >> you like the core business, you think motorola is still a
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drag. what what's the bottom line? what do i do tomorrow? >> i think it's favorable here. sck that's got a 15% to 20% top line growth rate stable margin trading a little bit of a discount to that. this is still viewed by most people as a tech stock as opposed to a median entertainment stock and it's trading at a discount. i think it looks attractive if you've got a long-term perspective. >> thanks a lot for joining us. appreciate it. martin of wedge partners here. in terms of this, what would you be inclined to do at this point? >> still holding. i like the valuation has moved but i think it's attractive. the one thing i don't like about it, seems that the apple of this quarter, i don't know, or last couple of months, and we've seen how when sentiment changes, that's not a good thing, but i'm holding. let's move on to another tech company, apple. our buzz killer. the freefall continuing in today's session. shares drop below 400 to the
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lowest level since december 2011. in this even as jpmorgan came out with a very long note, extolling the virtues of apple. still can't catch a break here. >> stock's broken and we've talked -- i understand that people get upset about this. i understand the emotion people put in terms of apple. but we've talked about this for a while. it's a broken stock. we tried to give you a trend line it held and bounced from. that trend line seems to be broken. i think what's going to happen, i think you have to hope happens in terms of the stock, when they report on the 23rd, which i guess, is next week, it's a disaster. they sell the stock off in a knee-jerk reaction and that's going to be your opportunity to buy it for the next few months. to me, that's really -- has to be your game plan. at this point, if you miss it, you miss it, but if you're looking for a game plan in apple, that's the best one i can put forth. >> do you think that scenario is better than a beat? >> honestly, yes. i actually -- my opinion you get
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the flush, get everybody out and get the new money. so for me, i think that'd be better. >> whether we see capitulation in the stock and -- the problem, not the problem, but the thing with apple and other trades, people get emotionally invested, right? >> absolutely. >> they love the stock and keep thinking, you know what, there are a million reasons, million valid reasons the stock should go higher, but the stock is still going lower. people hang on and hang on and hang on. >> any time we had anything bad to say, i would hear about it the next day. and justifiably, this is a great company that probably doesn't deserve this move. certainly doesn't deserve this move on valuation. although, today's a perfect example. there's a glut of audio chips out there and it's going to impact iphone sales. people are looking at the core business and saying, you know, they are running into head winds. i don't think we've flushed, and i think it's interesting we're talking about this on a week where we had the move in gold. there's a lot of parallels in terms of the overpositioning of
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this name. the emotion behind ale and gold, these things could never fail. and -- >> they'll bounce and go higher. there's a beliefhe >> every dip should be bought sort of thing. >> right. >> and tim's point is spot on. because the volatility of gold exploded this week. the volatility of apple exploded this week. they are trading almost lock step and although you're not going to see the same kind of margins selling in apple that you saw in gold, at least that's my opinion, you could get that during that flush that guy adami's looking for. >> kayla tausche has been following the ibm conference call. what's the latest? >> the stock is still moving, below that $200 mark. of course, you've mentioned it before, missing on the top and bottom line. really, the story here is its revenue misses. all across the board, there isn't really a bright spot for ibm, that's why the stock is moving down so sharply. revenues falling on hardware, software, services, systems in technology as well as the emerging markets which was a huge, huge point of investment
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for ibm. and investors are voting with their dollars and not liking what they see. below that key $200 mark. >> thanks so much. and that, dr. jay in terms of positioning and ibm, what did you see today? and do you think there are bets going higher? >> we had some reasonable amount, but not super heavy. not institutional like i'd like to see. but we had buying of the 200 puts, melissa, against the 190 puts. someone was betting that the stock could have a pullback like this. i had no position and have no position. have not taken any in the afterhours either. i think picking up this stock, if you get a chance below 200 is a good deal. i'll be looking to do that tomorrow. >> these guys are having to sell europe in order to move into africa. and it's a great way to find your growth. but it's taking some time. europe's been a mess. they're cutting 14% of their staff in france and they're trying to allocate towards, you know, the region which has been very good to them. still 40% u.s., 35% or so is
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core emerging markets and that's an exciting place to be. >> all right, pepsico hit an all-time high today. 6 cents a share. one of the stocks topping the tape today. we had a street fight not too long ago on coca-cola. >> yes, i believe i won it. >> oh, you won it. >> i won it in my own mind. i feel i was the superior debater. look, i can't -- it's just like the market, you can't predict, it's not always right in terms of the fundamentals. >> you're taking a victory lap over there. >> i'm surprised i haven't gotten the baby crying. >> pepsi was up big, but coke, if i'm not mistaken, coke was down today. >> it was up the day after i debated it. >> anyway, we're talking about pepsi here. pepsi here. which is more of an emerging market story. snack business, as well. >> yeah, in fact, the whole part of the pepsi, the bottling and the snack foods is an international growth story. 7% in russia, 4% in brazil, about 11% in china.
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they have a big, big business that at least is depending on e growth in emerging markets. also buying up a lot of local brands, bought up the biggest juice and dairy producer in russia. this is a company who can trade at a premium valuation. but at some point, it's like coca-cola. they'll get too expensive for themselves. superior to where they have been trading. you know, this is for pepsi somewhere north of 20, i believe. >> do you think pepsi and/or coke are expensive relative to themselves? >> well, we talked about coke the other day, i thought the answer was yes. i do think pepsi's the better company and therefore the better stock. >> snacks. >> they're snacks. >> frito-lay. >> not that i eat snacks. >> that'd be my guess. >> snacks. >> that's how they separated themselves from everybody else. >> i see you as a corn chip kind of guy. >> and to that point, melissa, just like you and i said at 2:45 this afternoon, the input costs
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coming down. now, these guys hedge because they're smart, they do hedge, but i don't believe they have the significant hedges much higher in the market and they'll be putting on great hedges he here -- >> right. >> that'll mean the rest of the folks at pepsi will benefit from that. >> i want to touch on a big mover in the afterhours session also in the food space. chipotle mexican grill cmg is up big time on the earnings report. another one of these stocks that could feel some relief from abating commodity costs here. we talked about this earlier today on the earnings squad. >> yep. earnings squad. >> yeah. up 5%. >> yeah, it's a very nice pop out of chipotle. >> go to nbc special news report. stay tuned. we're about to take you to a meeting room at the sheraton boston where we're about to hear from the fbi originally. we thought this briefing was coming last night, it's been postponed. and all day long we've been told by sources to expect some artwork, some images.
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that have been called from the thousands of images that investigators have been going through both still and video. video has been made available for this event. we will see it when the officials call for it. and on the stage to the right of where you're looking, we'll follow the officials on to the stage. you will see a large poster board covered in black. those will be revealed at the event. we expect to have someone identified as a suspect as the officials come in the room. pete williams watching with us in our washington bureau. that is the word we're using. this is more than of a person of interest, this will be a suspect? >> yes, and we're told what's behind those black poster boards hiding the thing on the easel is not only still pictures, which we'll see of the two men which the fbi is most eager to find.
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but they're not going to use the usual language of eager to aid in their inquiries, they're going to call them suspects. and i'm told their faces will appear on wanted posters. >> it's been a 24 hours of fits and starts. and false reports on people who have been pursued in this investigation, including folks who have been identified through photography. but this will be the word from the fbi. good afternoon, i am the special agent in charge of the fbi's boston division. since monday's bombings, the fbi and our law enforcement partners have been working around the clock and are fully committed to investigating the matter to bring those responsible to justice. our collective law enforcement team has pursued thousands of leads and tips.
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as i said two days ago, we are working methodically and with a sense of urgency to identify those responsible for the bombings. within the last day or so, through that careful process, we initially developed a single person of interest. not knowing if the individual was acting alone or in concert with others, we obviously worked with extreme purpose to make that determination. the federal government, the fbi in boston, around the world as well as our partners in the boston police, atf, massachusetts state police and more than 30 agencies of the boston joint terrorism task force have set about to ensure that all responsible for the bombings will be brought to justice. more importantly, it was done to ensure the future safety of the city of boston, the commonwealth of massachusetts and the country. indeed, through that process, the fbi developed a suspect. today we are enlisting the public's help to identify the two suspects. after a detailed analysis, a photo, video, and other
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evidence, we are releasing photos of these two suspects. they are identified as suspect one and suspect two. think appear to be associated. suspect one is wearing a dark hat, suspect two is wearing a white hat. suspect two set down a backpack at the site of the second explosion just in front of the restaurant. we strongly encourage those who were at the restaurant who have not contacted us yet to do so. as you can see from one of the -- from one of the images, suspects one and two appear to be walking together through the marathon crowd on boylston street in the direction of the finish line. that image was captured as they walked on boylston in the vicinity of the intersection with gloucester street. as you can see, the quality of the photos is quite good, but we will continue to work on developing additional images to improve their identification value. further, on, we have
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photos of the suspects. the photos and videos are posted for the public and media to use, review, and publicize. for clarity, these images should be the only ones, and i emphasize the only ones that the public should view to assist us. other photos should not be deemed credible and unnecessari unnecessarily divert the public's attention. for more than 100 years, the fbi has relied upon the public to be its eyes and ears. with the media's help in an instant, these images will be delivered directly into the hands of millions around the world. we know the public will play a critical role in identifying and locating these individuals. somebody out there knows these individuals as friends, neighbors, co-workers or family members of the suspects. though it may be difficult, the nation is counting on those with information to come forward and provide it to us.
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no bit of information no matter how small or seemingly inconsequential is too small for us to see. each piece moves us forward towards justice. it is extremely important to contact us with information regarding the identities of suspect one, suspect two, and their location. we consider them to be armed and extremely dangerous. no one should approach them. no one should attempt to apprehend them except law enforcement. let me reiterate that caution. do not take any action on your own. if you see these men, contact law enforcement. if you know anything about the bombings or the men pictured here, please call the telephone listed on the photo. that's 1-800-call-fbi. 1-800-225-5324. all calls will be kept confidential. we have also established a website for tips that directly relates to the bombing.
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please contact us at that website is the photos can be viewed on our website, it is important to emphasize the images from monday are indelible and the horror of that day will remain with us forever. this further underscores our obligation to investigate this crime judiciously in order to bring those responsible to justice. the victims and the survivors deserve nothing more. nothing less, excuse me. as to monday's victims, the fbi's committed to ensuring the victims receive the rights they are entitled to and the assistance they need. treating victims with respect and providing them with assistance, benefits and assistance will better our cases. our resources include an office of victim assistance at fbi headquarters and victim specialists nationwide.
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these highly trained professionals can assist victims and coordinate with other agencies to provide victims with the support, information, and resources necessary to effectively meet their needs. our victim specialist team continues to work around the clock to bring assistance to the victims of this heinous act. identifying and locating those responsible is now our highest priority. no other details of the investigation will be release at this time because this is our focus now. it continues to be an ongoing, active investigation. review these photographs and contact us at 1-800-call-fbi. thank you very much. karen? >> i was wondering if -- should there be arrest, what would charges be? >> i wouldn't want to comment on that. i would allow u.s. attorney
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ortiz to comment on that. >> monday morning, we've got photographs -- >> next question, please. next question, please. yes. >> are both suspects seen planting these devices at the finish line of the boston marathon? >> no. >> the only one when he believe planting the device is suspect number two with the white cap. >> what time did they put those devices out? >> i don't have the precise time in front of me. shortly before the bomb blast went off. within minutes. >> are these the sole people of interest to the fbi? >> at this time, these are the people of interest to the fbi. yes? >> do you have any information on what they did after the explosions? any indication they were around watching? any video of them walking away? >> suspect number two with the white cap on proceeded west on boylston street. and that's all we know right
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now. >> sir, can you address -- the newspapers all over the country including "new york post" that identified two men as potential suspects. i'm just wondering what it does to your investigation when things like this get out and these guys are -- >> i think i addressed that question in my statement by saying the only photos that should be officially relied upon in this investigation are those you see before you today. >> do you standby your earlier statement there is no additional danger to the public? >> i do standby that statement right now. there's no additional imminent danger we're aware of right now. >> okay. thank you. >> any -- >> thanks. thank you. >> again, the photos are available at we'll have more information when we have something to release publicly, we'll be back. check our website, >> you heard there one of the questioners appears to be pushing an agenda of his own and
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was ignored. but there you have the first imagery of the two men identified as suspect number one in the black hat and suspect number two in the white backward baseball cap. pete williams and washington bureau in just the time we've had to look at this, two men appear to be -- you could argue walking together not quite in lock step. but appear to be one following the other in tandem. what do you make of the video and the stills? >> well, i think what's interesting here, they start with one with the guy wearing the white hat who they see set the bomb down at the second bomb site. that's the one in front of the forum restaurant. the one that's in that famous picture that shows the explosion. that's the second explosion down the street. they see him set his backpack down. they don't see the other person set the backpack down. it seems pretty clear they start with the one wearing his white baseball cap backwards. that's the person of interest that starts this whole process. and then as they review the
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pictures, they realize that at several points, they were together. and that's why you add the person with the black hat in. and they say they don't see him setting a bomb down, but because he spent so much time with the guy they think did set the bomb down, that's why they want them both. >> the press conference has been going on, looking to match the logos and iconography on the baseball caps, all of it, every visual detail becomes something they will chase down. and the value of this is to get people's thinking triggered. did they see these individuals? did something stand out? >> exactly. we've seen an astonishing amount of amateur detective work, of people going through pictures that they've seen, trying to spot, you know, where's waldo, and they're saying, don't try to do that, stick with the pictures we've given. and if you think you know who they are, just call.
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>> and notably, pete, of all the citizen media that has come in, the imagery, what we're looking at is pretty garden variety, though, color and digital surveillance camera. this is not the photographs of a marathon goer. >> certainly the motion video is a color surveillance camera. some of the stills, i think, are from, as i understand, some of the still pictures, the ones that look overhead are obviously surveillance camera. the one like that one, the ones more ground level would appear to be -- and unfortunately, of lesser quality appear to be from people who were there with their cell phone cameras and so forth. and it seems like the pictures are little tiny enlargements of much bigger scenes and that's why the quality is not so good on the ground level pictures. >> and pete, lester holt is watching and listening where i understand almost concurrent with the moment these
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>> if there was any question about the wisdom of what the fbi is doing, it was answered right here on the street corner. brian, we draw a crowd, news media parked along here. people come, watch what we do. overheard these pictures are being released, asked what was going on. immediately the smartphones came up. as i speak right now, there are people widening out the picture, zooming in as two men said to me, we wish we knew them. that's the kind of spirit we've seen in boston. people want to help. when that call went out to provide pictures and video, people immediately began scouring their cameras. and right now, they're scouring their smartphones and computers. they want a good look at these two individuals to see if maybe they have seen them. that, of course, the whole point of the fbi releasing the suspect photos today trying to jog memories. only a few blocks from where those bombings occurred, it's quite possible one or both of those men walked these very streets. people along here work in the area, perhaps they'll recognize
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them. that's the whole point, brian. >> pete williams, one of the many phrases the military world has given the english language. works perfectly here. getting these photos out is a force multiplier. this doesn't quite deputize ordinary civilians, but it does get people thinking and thinking back. >> right now that's going to present a challenge for the fbi. because there'll also be a lot of tips from well-meaning people, who will be wrong. everyone will think it looks like somebody they know and that will increase their work load, but clearly they've thought this through and decided they can't figure out who these people are and they're going to have to have help. >> well, it's going to be an interesting 24 to 48 hours now. and now this investigation can be said has -- to mimic the video we're looking at turned something of a corner. as pete williams points out, there are many cautions now. because once these pictures are in the public domain, there will be more fits and starts and
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numerous false alarms. thatst the nature of the business. but for now, the fbi has told us there are two suspects. suspect one and suspect two. both of them young males, approximately, appearing to be the same age. one wearing a white baseball cap. we have them actually reverse there. that suspect two on the left with the white hat. suspect one on the right, a v-neck white t-shirt, raincoat. what they have in common. both carrying substantially sized backpacks, though, in fairness, no larger than many of the parcels we've seen people carry at public events and no larger than many of the backpacks than adjacent in the photography. now the dissemination is underway on people's personal devices, on television, and on
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broadcasts like "nbc nightly news." we'll be along with that as we get later into the evening, about an hour from now on the east coast. for our team from boston to washington, i'm brian williams, nbc news, new york. we've been listening to the nbc news special report on the fbi briefing in boston for the latest developments on the boston marathon bombing. let's go back to cnbc's senior correspondent scott cohen on the ground in boston for the past few days. what did you make of the appeal to the public of two photos of suspects here? >> well, brian williams said it best, it's a forced multiplier, but brings in extra tips, but they don't mind that. they'd rather have more than less. and the other thing, it does fill in some of the blanks of yesterday. they -- the special agent said, yes, yesterday they had identified from the video a person of interest. well, that turned into reports of an arrest, somebody about to be arrested, somebody in
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custody, they solved the whole thing, no, they found a person of interest and linked that to this other person. and now are determining both of them to be suspects. we will also have video that we will get of -- that is playing. and also, i think that you also -- you'll also want to bear in mind what the admonition was. it almost sounds like something out of an old movie or something. these people are armed and dangerous. do not try to apprehend them yourselves. dial 1-800-call-fbi. and -- or go to if you have tips, if you have information. they want more information, not less. as we've said all along, the idea is to keep the information coming in. more is better. >> scott cohen, thank you very much for that. we'll keep everyone up to date we'll keezap technology.o date
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breaking news on the sea world ipo. kayla? >> hey, melissa, just getting a to start trading ow.t
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it's $27 a share. that's the high end of a range that was previously stated to be $24 to $27 a share. selling 26 million shares total, $702 million raised, but investor demand was so high that underwriters goldman sachs and jpmorgan decided to exercise an overallotment for an additional 3.9 million shares adding another $105 million to those proceeds. really high demand for that sea world ipo, $27 a share on the high end of that range. melissa? >> thanks for that. clearly a highly anticipated ipo on the street. let's get to jane wells who has been doing on the ground research into the sea world ipo live in san diego at sea world. jane? >> sweet. >> hey, melissa, yeah, this deal has been getting bigger and bigger, you would think with this economy being at risk, it would be an odd time for a theme park company to go public, that's what's happening. you saw kayla break the details there. it is going to price at $27. now here's what's changed.
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26 million shares offered, 10 million being offered by seaworld and 16 million from blackstone. they bought four years ago from anheuser-busch. this morning in the filing increased the number of shares it planned to sell from 10 million to 16 million. also, as she reported, 3.9 million in overallotment going to be sold. that was upped from 3 million to 3.9. there's 15 million more shares being held in reserve for a potential future offering, and now based on this, after the ipo, blackstone will still own -- it's going to be now about 63% of the company. now, under blackstone management, sea world has become profitable again. the net income quadrupled last year. the average customer spends over $58 each, that's nearly a 4% increase. risks a lot of debt. quote, we are highly leveraged. nearly 1.7 billion in debt and the unique risks of running a business built around 67,000 animals. seaworld saying it could be hurt by, quote, changes in or
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violations of federal and state regulations governing the treatment of animals or the loss of licenses or permits to exhibit animals and the potential risks to employees and guests like the death three years ago of a trainer by a killer whale in orlando. six flags have had a great ride, though seaworld would have a higher ratio. goldman sachs calls amusement parks, quote, a mature industry that gets it. it has a buy on six flags, neutral on cedar fair and, guys, is a major underwriter of the ipo. >> thanks for that. groupon's business model and balance sheet headed into the ipo. joining us for a breakdown of the seaworld ipo. a firm that analyzes major privately held companies. great to have you with us. high demand for sea world. price at the top end of the range, increase the allegation of shares here. what are the fair comparisons? it seems like six flags and
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cedar fair aren't good apples to apples comparisons. >> there's not a direct apples to apples comparison, melissa. the big theme park companies that are comparable are really subsidiaries of disney or in the case of, you know, universal, of course, subsidiary of comcast. so there's really not a direct comparable. the closest would be like you said six flags and cedar fair. compared to them, the valuation is a little bit rich. you do have to adjust, of course, for the debt as jean said, there is this 1.8 billion in debt. we did hear about that price about 20 minutes ago, at $27. we understand it could have sold more. but they really do want this thing to pop. blackstone has an interest, of course, in selling additional shares at a high price and the
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follow on offering and they do have to liquidate their shares over time. >> the bottom line is that you don't recommend it. why do you think there's such a strong investor appetite for this one given the uncertainty in the economy? is it a dearth of similar offerings like this? >> yes, what we're hearing essentially, in this case, it's actually a retail driven demand. a lot of retail investors who want to buy a piece of shamu for their kids. there's a lot of whispers the next sea world will be in china. there's a lot of orders that came in today for the ipo, or from high net worths that are interested. we do think in the short-term, it will pop, although for some reason the market trades down. i would, we would recommend buying it short-term purely. the problem is as the twoor risks. number one, there's $1.8 billion
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in debt. only 275 million is going to seaworld. >> number two? >> and number two big one is that the overhang of blackstone doing a follow-on offering which is almost guaranteed in five months for that reserve stock. and then to have to sell over the next two, three years, about $2 billion in stock to close out that fund. >> got it, sam. >> short-term, buy long-term. >> thanks, sam, for your time. let's hit pops and drops, the big movers. got a drop with bank of america down 2%, karen? >> another drop. we bought stock today and rallied into the close. not enough to make a positive, but i like bank of america here. >> guy? >> i think it's a 12-year high in the stock, great dividend, great winner. i still think there's further room on the upside. >> union pacific, excuse me, up 4%. >> yeah, beat by about 7 cents over street estimates, revenue numbers look pretty good, as well. and the number of cars they've got out there revenue per car
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was up 3%. >> drop here for fedex, down 2%. tim? >> fedex down almost 17%. >> you just want to say -- >> big downgrade today, put an $87 target on it. locking at these stocks for the signal. >> still to come, the top sectors to rely on right now if you're just getting into the markets. much for fast straight ahead. [] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ]'ll bust your brain box. ♪ all on thinkorswim from td ameritrade. ♪
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microsoft shares in the afterhours session still holding on to the gains. the conference call getting underway right now. let's check in with jon fortt to see what is the latest. jon? >> not as bad as a lot of people have feared. and here's part of the reason why. businesses and volume licenses kind of doing better as far as propping up windows and the business division than the transactional revenues from people going out and buying or not buying pcs as the case might be. microsoft saying that transactional business of people actually buying pcs was down with the rest of the pc market which idc pegged around 14%.
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but as far as business volume licenses, that was doing well. up 10% for instance, in the business division. also units doing well, entertainment and devices up 33%, xbox live memberships at around 46 million. and the windows phone business having pretty good momentum. the online division up 18% ads up 22% with search rates up, something that we saw from yahoo also. but overall, the business community helping out quite a bit soften the blow for microsoft of the overall pc business being down office 365, by the way, on track for $1 billion run rate fiscal year. guys, back to you. >> jon fortt, thanks a lot for that. guy, seems like a good quarter for microsoft. nice gains in the afterhours session, which the stock has been able to hold. but it's been a range-bound stock for a decade. >> karen had a great sell the
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other day. exactly that, the quarter's fine. revenue miss. you can dice it up any way you want. relief rally off the oversold condition. i just don't think this stock is mired between which is now the top end of the range here and 26 1/2, 27. >> i think there's a negativity exhaustion, everybody knows about the windows 8 supposed failure. i think a lot of that is priced in. there's a lot of hidden gems including xbox -- >> sounds like a street fight here. an informal street fight. >> maybe stotomorrow. >> #bull here for hash tag. market stalling after roaring to record highs, which sector should you be betting on? let's ask today's fast adviser, cnbc contributor michael farr of farr, miller & washington. great to speak with you. >> great to be here and go microsoft. i own that stock, i've been sitting on it forever. come on, we've got to get this thing over $30 a share. >> good luck with that. we'll see about that i should say.
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in terms of sectors, michael. i'm on either side. in terms of which sectors you want to be in right now, michael, which would they be? >> melissa, i think you still want to be a little bit defensive. i think that so much of the market still feels squishy and not in a good way given the economic data we're seeing. i'm a little bit heavier in health care, probably about flat in technology. but consumer staples and health care are two of those defensive sectors that i think leave you in a little bit better stead. i'm heavier in industrials, a little bit lighter in financials. this is a defensive portfolio that i think, you know, blue chips with good dividends make a lot of sense right now. >> at the same time, michael, you know, your stock picks make me scratch my head because if it's such a defensive portfolio, why are you getting into something more levered to the consumer and to the economy being fedex and yum brands? >> well, i'm so glad you asked me, i always -- i always try to
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hit them where they ain't. and these are two stocks people don't like right now. they're worried about avian flu, they're worried about some of the politics, of course, with yum brands and kentucky fried chicken in china. huge amount of the growth in china. i think that's a short-term story. and i think that the long-term story is really fabulous for yum, particularly in asia and the growth. it's a great growth story. you know, fedex i like. i think, again, this is short-term noise too. lower oil prices are going to benefit. >> right. >> if we see a slow, yes, you're going to see it, but long-term, this is a fabulous company with a great balance sheet and superior management. >> got it. >> i'm happy owning it. >> all right. michael, great to speak with you. coming up next on "fast," the man behind "hunger game" series and "mad men" find out what michael burns is up to right now. farmers presents: fifteen seconds of smart.
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how old is the oldest person you've known? we gave people a sticker and had them show us.
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us have known someone who's liv w tir 90s. and that's a great thing. but even though we're living longer, one thing that hasn't changed: the official retirement age. ♪ the question is how do you make sure you have the money you need to enjoy all of these years. ♪ presenting the upcoming releases to theater owners in las vegas at the annual cinemacon movie convention in follow-up to "hunger games," also unveiling something else.
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the vice chairman of lions gate joins us from los angeles. great to see you. >> melissa, nice to see you. >> i've got to talk about the next installment of "hunger games," you recently announced the launch of the "hunger games" explorer. >> well, it's funny, we've always thought that social media was going to play a giant role in our movie slate. and that if we take a look at what's happened to "catching fire" hunger games, what's happened is we premiered the trailer on mtv on sunday night and we've got 20 million views of the trailer on youtube alone and i was e-mailing back and forth to jack dorsey the other day, we have on twitter now we have 2 billion impressions on twitter. so it's a big deal. >> how predictive do you think this will be in terms of box office? >> you know, you never want to predict box office. the last film did -- the original hunger games did $408 million of domestic box and about $280 million of
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international. we feel like we're going to get uptick on the international side because the books have been selling well as they were introduced around the world. and we feel really good about obviously jennifer lawrence. i would argue she's one of the biggest stars in the world today. >> and by the way, on the cover of the most recent issue of "time" magazine of one of the most influential people. that won't hurt "catching fire" when it comes out in theaters. >> it sure shouldn't. >> and michael, let's talk about the announcement you want to make today and it has to do with the logo. >> yeah, my partner and a team of ours is in las vegas today actually as we speak rolling out our new logo. we're excited about that. and really what it is. since the summit acquisition, it was a transforming event for us. and we are a very different company today than we were let's say two or three years ago between our movie business and our television business. it's an exciting time for us. >> michael, you're the man. i mean, if there was ceo of the year, i think you would win it. are you scared about the -- the
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does that scare you. the free market working again. >> i'm not going to talk specifically about the stock price. i can tell you that we are a different company than we were before. as you know, we were in a little bit of a stall period as we had, you know, it's like talking about the name you don't mention when we were stalled with a little bit of takeover battle a few years ago. i think that put a ceiling on us as opposed to a floor. and certainly at this point it's turned out to be the case. >> all right. michael, we're going to leave it there. always great to see you. >> thanks for having me again, guys. >> michael burns, vice chairman of lions gate. let's trade this thing. you like the stock. >> >> love the stock. and i think they're going to do fabulous with this, as well. so lgf, buy it. >> final trade here, around the horn. mike? >> yeah, i would roll that ebay put spread out and down. stock's off. >> john?
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>> procter & gamble. >> don't chase. >> guy? >> i think gold's got a bounce in it. >> really. all right. yep. i'm melissa lee. see you back here again tomorrow at 5:00 for more "fast money." don't go anywhere, "mad money" with jim cramer starts now. don't go anywhere, "mad money" with jim cramer starts right now. i'm jim cramer and welcome to my world. >> you need to get in the game! firms are going to go out of business and he's nuts, they're nuts! they know nothing! i always like to say, there's a bull market somewhere and i promise -- "mad money," you can't afford to miss it. hey, i'm cramer! welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to make you a little money. my job is not just to entertain you, but to teach and to coach, so call me at 1-800-743-cnbc. listen up, okay! listen up! this, right here, this is europe, okay? this is the united states, all right? this, this is china, all right?


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