tv Fast Money CNBC August 4, 2015 5:00pm-6:01pm EDT
"fast money" starts in moments. what are you guys watching for? >> in addition to disney, kelly, etsy. price is truth, kelly, and the stock is down sharply in the after hours session. >> is that the guy adami? >> it's a guy adami sock puppet we got from etsy making its appearance once again. also in all seriousness the shire -- david faber will be joining us with the latest. "fast money" starts now. live from the nasdaq marketsite overlooking new york city's sometimes square i'm melissa lee. our traders on the desk tim seymour, dan nathan, karen finerman and guy adami. here's what we have coming up on "fast." shares of disney falling 3% on its earnings report. the conference call just kicking off right now. we are bringing you the latest headlines throughout the hour. plus one beloved tech stock just hit an all-time high. we'll hear from the analyst who says it is the ultimate bargain. he'll tell what you that stock is and why it could be cheap right now. our top story tonight, that would be apple. the numbers are staggering. since its recent high july 20th the company's lost nearly $100
billion in market cap. that is equivalent to three teslas, three yahoo!s, two netflixes, or one mcdonald's. so does the stock have further to fall here? could this be the best opportunity to buy apple the whole year? guy adami, what do you say? >> that's real cute with the sock puppet there, mel. >> if the puppet fits, man. >> listen, tim's been on this. dan as well in terms of the price reaction over the last few months. it's definitely hit a soft patch. is it the best time to buy? i don't think so. i think technically now it sets up to move toward levels we last saw in mid december and a couple times in january. effectively 105. doesn't mean the company's broken. doesn't mean it's not a great stock. it just means technically that's what it should do. what could it be a cause of? i think this china move has far-reaching ramifications. who knows if it's margin calls manifesting themselves in the selling of apple? it could be a number of things. but think 105 is a level you look to on the down side. >> where would you look to add to on your position? >> it was 115 till it got here.
i've got to rethink because it got here on nothing and i sort of agree with guy that sentiment is so important in this stock more than so many others. this one is really important. so i'd rather, you know -- today was a pretty guy kind of day. a huge puke out day. i'll probably end up doing something through options. i'm inclined to add to my position. >> you mentioned sentiment and sentiment toward product is also important. what you've seen in the last couple months is they've released some products that really weren't ready for prime time. and that is the watch and it's also apple music. and i've used both of them and i think a lot of the sentiment out there at least in the financial press and the people who are reviewing it, it's not particularly that positive. so we know that there's some catalysts coming up. we know there's going to be an iphone 6s, probably a couple different iterations. there's talk about a revamped tv service. i think investors want to get excited about products. and i'm not certain that the 6s product is going to be that new and innovative. i think it can continue this runway for the upgrade cycle but i'm not sure it's going to be innovative.
>> what is different? since that most recent high of july 20th we knew the iwatch was -- >> i don't know, dan. since when is apple music and the iwatch supposed to move the need snl one of the things we say it's a hardware company. if you figure last quarter you had 10% of the installed base, got the new iphone, where are we left? where is china in terms of demand? i think it comes down there there's been a lot of rumors in the last couple days that the new 6 coming out in september is going to be eh, not so much. i think -- >> but tim you said it yourself. it's a hardware company with 40% gross margins. and when you think about their large competitor has half that as far as gross margins i think investors are thinking about is this as good as it gets? when you look at estimates for earnings and sales growth it's mid single digits. and so at some point there's plenty of room if you're a competitor to chip away in the margins. so for me the stock has not been a no-brainer for the last six months, especially when you consider how positive sentiment was and what the product road map looks like right now. >> well, i think for the last six months you've had a case where we had the third quarter come in, fiscal third quarter
and say we're probably stretching out one more quarter. what a lot of people thought was going to peak last quarter. now we're getting into a holiday season. was the stock over its skis? well, if you look at the multiple, no, it wasn't. if you look at the capital markets activity probably the best of that excitement is behind you. if you look at other products to say 10 million apple music users right now makes it half the size of spotify in one month. that's hardly a disaster. >> but what if it's cannibalizing itunes sales of music? this is the stuff that i'm not so -- >> it's not moving the needle. >> but it's got to move the needle going forward. >> let's get back to the hardware issue in terms of the phone. i talked to ryan rosenblatt. and he said when you do talent checks in china and some of the oems there's going to be weakness. we saw that play out in some of the apple suppliers today. invincent. skyworks. all of them down sharply. >> dan made this comment i don't know if it was on air or not and i apologize but he said effectively the stuff that bill fleckenstein was saying last night was a synthetic short of apple if you think about it.
a lot of the stocks he mentioned are suppliers. it all does come down to apple. yes i think the weakness in china definitely has an effect on this. it's something you have to take very seriously. at a certain point then valuation will matter and i think it will manifest itself if and when it trades down to 105. >> i'm glad you brought up valuation. bedid a comparison of the different val waigsz of apple against other companies and obviously what we found is apple is really cheap. and then you back out the cash and it's even cheaper. >> how about apple and apple? >> compared to a lot of the other leaders on nasdaq. >> let's compare apples to apples. >> i think this is the thing if you look at the street and i know we're going to talk about this with one of the more bullish analysts later in the show which is a very interesting conversation. why is it that the multiple was supposed to expand when in fact it's a hardware company that dan is arguing it's going to be very difficult for the margins to ever be this good again and to say this should be trading at a 17 or 18 multiple with cash is saying they're going to do something differently that's going to really grow. >> let's move on to the big story. in the post market. and that is disney. shares of the best-performing
dow component this year are lower as its conference call is just betting under way. let's get to julia boorstin for the details. julia. >> that's right, melissa. looking for commentary in the impact of foreign exchange rates at disneyland paris and hong kong disney. the company did not break out the 4ximpact in its earnings release. investors will also be listening for any outlook for the strength of the parks. so far this quarter as well as the advertising business in light of the media networks. espn will be very much in focus on the heels of ceo bob i guerre saying on cnbc's "squawk box" just last week that espn could be sold directly to consumers. and of course investors are always eager to hear any commentary on "star wars," which is due to hit theaters december 18th. i'll be back with bob iger's comments from the call coming up later in the show. >> let's get a trade on this before we check back with julia later on. in terms of disney we set up pretty interestingly. all-time high going into the numbers. >> all-time high but i think it may have been at an all-time high every quarter for the last
i don't know how many quarters and i think the streak gets really excited and they do a great job and they're hitting on all cylinders but they just can't meet whatever hype is out there. it's down very minimally. 2 and change dollars. it's a very small move down. we like it. we're long. but it's getting pretty expensive. >> long in the tooth here. >> yeah, it's really -- >> 22 times forward earnings. ish. the eps good number. slight revenue miss. that's like crazy. but karen made the point i think that's exactly right. every quarter for the last probably six or seven we've seen the stock at an all-time high into earnings. earnings release. stock sells off a week later. it's a new all-time high. will it happen again? yeah. i do think it will happen again. that's been the pattern. at a certain point like just said about apple, valuation will matter. on the other side in disney i just don't think we're there yet. >> should we be concerned do you think about the small crack in disney at this point? >> one of the things i've been saying probably for the last two or three months is you stay with disney until they disappoint you on earnings. so is this that disappointment? and i say absolutely not.
and if you consider where the bar was and we knew there was a writedown, this was weaker, if you look at the numbers sequentially you're going to have a problem but look at the value of these properties, lucas, these are multibillion-dollar platforms. there's four of them. and they're going to continue. and it's going to go right into the consumer products. it's going to feed into the theme parks, right into the networks. these are all part of the circular nature of the disney business model where i think there are very high barriers to entry. no, not a terrible number. huge run-up into the stock. you buy weakness. >> and i would just add that this is a cult stock. you throw it in there with nike, you throw it in there with starbucks, apple a couple months ago, so on where people are just gaga. it's a very crowded trade to me. i think these guys mentioned valuation, they mentioned price action, it's rallied 10% since mid june on no news. i think there was a lot of good news in the stock. it was priced to perfection but i think you really do want to be careful in some of these very crowded much loved names if everyone heads for the door at the same time. you have some quick reaction like we see in apple. >> more on disney later in the
hour. netflix soaring to all-time highs today. one analyst says the stock is still a bargain. we'll hear exactly what it is that has him raising his price target p plus a drug deal gone bad. shooting down shire's $30 billion deal for the company. is there another deal in the works? david faber will be here after the break. and apple in correction territory. we've got an analyst who thinks the stock will rally 60% from here. more "fast money" straight ahead. why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress: that whether times are good or bad, people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength.
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baxalta rejecting bio pharma company shire's $30 billion bid. the rare disease treatment company saying the offer significantly undervalues the company. this news hitting within the past hour. cnbc's david faber has more on what could be next. david. >> thanks a lot, melissa. this morning of course when the initial offer from shire hit i was puzzling over it on "squawk on the street." didn't take long for baxalta to come back and say no thank you. in fact they said no thank you on july 10th when this same offer was made by shire to them but back then it wasn't a public offer of course. it was behind closed doors. and in fact baxalta probably expected they would come back perhaps privately and raise an
offer of some kind pf although frankly they were somewhat surprised to get the overture at all given baxalta has only been around as a public company for such a short amount of time. about a month. i can't remember ever seeing an unsolicited cross-border for a company that's barely been public. by the way, as we pointed out this morning baxalta does have significant takedown defenses. you can't call a special meeting. you can't act by written consent. poison pill kicks in at 10% and they have a staggered board of directors. and by the way they just had their annual meeting a short time ago. and not to mention cross-border, hostile, all stock. and big. so much so that in fact shareholders of baxalta would own 37% of the combined company. that's an awful lot of things to get over if you're not going to even raise your price from when you actually went to see them on july 10th and make an offer for them. all of which i guess makes continue that surprising that baxalta comes back today and says hey, you didn't even raise -- they didn't say that part. actually they did.
we rejected you then, we're rejecting you again. we think we have a lot more value. they didn't say this necessarily but it's probably true. their shareholder base hasn't even formed here. you're talking about baxter shareholders who got a piece of this thing. you've got to see what develops in terms of a shareholder base. and where it goes from here. they say no synergies that we can see at this point. the product portfolios don't overlap. they kind of line up. the cost savings may not be as large as some people perhaps had anticipated. and even though shire is an inverted company with a tax rate in dublin of course, they've gotten their tax rate down fairly far at baxalta, all of which raise that's key question which is why did these guys do this and what do they do from here? maybe they thought their stock price would go up when they came public, hence it would be increasing the val yoouft deal. the opposite happened. shire stock went down because think many of their shareholders were somewhat surprised by this overture at all and then the other question which came up today is is there somebody else there for shire? is that why they might have considered doing this? i don't know the answer to that.
i've heard nothing that would indicate there's anything going on per se or offers that have been made but we all know a great deal is going on in pharma right now. shire of course was in a deal to be acquired by abbvie before that deal was terminated when there were changes at treasuries in terms of the inversion laws, or regs, i should say, they're not laws. we'll see what develops from here. although this thing could be d.o.a. day one. back to you. >> it's so bizarre. karen, you were even following this deal. why would shire go down this road two times? what does that tell you about shire? >> david brought it up. was shire the possible target of something? >> why would you go back to the same target that had so many defenses and not raise the offer? >> right now they could say look, why raise the offer? we're bidding against ourselves. we haven't seen any offers for the company. let's put a little pressure on them and then they can talk. this is clearly their first -- this is not the last dollar they would have to do a deal but normally the acquirer's stock
goes up as we've often seen but here it went down because i think shire was possibly a target. david, it does make me wonder anyone else out there for baxalta? there's a lot of companies that have big stockpiles of cash that are looking to use that. >> as you know, there's -- you can launch a rumor on anything these days. and it might have some plausibility at least in this rapidly consolidating sector. but karen, on this name, no, this company has literally been public for 30 days. it was a july 1 was when it hit the public markets. so it's very odd to see a public company make a run at one that's been so fresh. i have not heard of another name out there. they obviously are arguing we're worth a lot more than what you're offering. and by the way, the offer price of course came down substantially today because shire's stock price had that decline. so i guess we'll just have to wait and see if shire does choose to raise publicly. the defenses are pretty significant and these guys can't do anything for 13 months. they don't have to hold their meeting for 13 months, their annual meeting.
it's unclear to me what shire is going to do here or why they chose to take this public in the first place. being that a cross-border hostile all stock is awfully hard to pull off regardless of whether you're paying the highest price. >> and regardless of whether they were rejected already. david, thank you so much for joining us. david faber with the latest there. karen, are you in -- >> i'm not. it's so curious. every once in a while, though, you see a deal that just -- it's so odd. remember rupert murdoch for time warner. remember comcast for disney. then it's odd and then it ends up not going anywhere. maybe somebody misread sig lz about how willing a company is to do a deal. i'm not playing for it. but it's interesting. >> interesting to see in this environment even though it's so unlikely baxalta is trading as if it is in fact in play. higher by 12% in today's session. >> david actually said it. the whole space is in play. the fact that amgen is being thrown around as a potential takeover candidate is really interesting to me. we talked about it.
it would be a $140 billion deal. gilead's quarter was great. amgen's quarter's great. celgene should be high otherer. those are the names you stay with in the space. >> netflix hitting an all-time high today. guggenheim initiating the stock with a buy rating and a $160 price target. analyst michael morris is now the most bullish on the street. here's what he said earlier today on the halftime report. >> we just look at this company that we expect to be the global leader in television content and distribution over the next decade. and $50 billion market capitalization right now we still see it as a great bargain. >> dan, what do you think, is it a bargain? >> a bargain. >> today when we were watching apple careen lower and watching this stock skip higher, new all-time highs, it just looks crazy. it really does. but there's no doubting. there's a massive runway for this product whether you're the winner -- the winner right now. i'm just hard pressed when you
think about all the competition that's coming on that this company that's expected to have $6.5 billion in sales this year with a $50 billion market cap makes any sense. but i've got to step out of the way here because it's defying logic. >> it's interesting that people -- we've been saying this on the show that we're worried about the breadth of the market and apple tells you where things are going. it's really broken down technically. but netflix, you're seeing a reallocation of capital. on some level you're seeing investors really chase growth. they're really chasing the top line. we saw that in this earnings season. but at 250 times you're pricing this company like it is the most important media company in the world. i think they're a distributor. i think they're a conduit. i think they're a portal, they're not a media company, they're not a content company to compete with disney right now. >> meantime speaking of disney check out shares of disney and how they're faring in the after hours session. after their earnings report. what's the key on the conference call? we'll hear from cnn bob iger later on this hour. you're watching cnbc, first in business worldwide. in the meantime, here's what else is coming up on "fast."
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welcome back to "fast money." call your attention now to shares of first solar because they are up in the afterhours session although off of their best levels in the after-hours trading session so far up about 6 1/4% here. the company beat on both earnings and sales. they also offered a forecast that came in well above analysts' estimates as well. those shares you can see surging. and of course solar shares are all the rage right now. this particular one, though, first solar, is just about flat for the year. down about 30% over the course of the past 12 months. also interesting to talk about these solar stocks when you have time right now, melissa, when oil prices, energy prices keep falling. so we'll see if those rosy forecasts stick in the days, months, and of course years ahead, melissa. back over to you. >> thank you, dom chu. we say this all the time. oil has no fundamental impact on
solar. and yet it does in the way they trade. >> except for july if if you look at solar city it sort of changed a little bit the plan pattern. that is a pretty good quarter for first solar. it gave back a little after the high after earnings. but the full-year guidance was very good. i think there's a decent short interest in the name, and i think that some of these analysts may have to go back and look at what they said. goldman sachs initiated neutral in the middle of july. the stock is basically the same place they initiated. but this is a quarter that might get the people rethinking the space a little bit. i think you stay with first solar here. >> sunedison up in the after-hours session. it has had a rough time. >> rough is an understatement. >> and especially since glbl went public last week. >> glbl yieldco deal was a disaster by any metric. and that's actually sort of bottomed out maybe today. the first solar, i think that is good. that maybe put a floor under it. they're seeing good demand. remember, though, 2016 you may have a lot of prebuying for
getting ahead of the 2017 tax change in the u.s. i think sunedison is probably overdone here. >> let's get to another earnings mover right now. etsy is tumbling in the after-hours session. joining us nor immediate reaction to the stock move is breed capital senior vice president tom forte. welcome back. the last time you were on the show you said this about etsy. take a listen. >> if it breaks its ipo price i think it's time to back up the truck. by comparison facebook was under significant pressure from the ipo. it's a compelling opportunity. i think the market's reacting to, you know, good, not great report but i think there's nothing fundamentally wrong with the story. i think this is a buying opportunity. >> that was back in may. the end of may or so. and since then we've seen a huge rise in etsy. do you know as an analyst, tom, why exactly the stock was up in the past month so sharply? i'm asking you this because i want to understand what your conviction is in the stock at
this point and whether could you say this is why and this is why you buy it. >> correct. if you look at etsy and if you were to bring it down to one factor, it's going to be the company's ability to drive seller services, revenue on their platform. advertising, logistics, payments. this is what's going to make the community of buyers and sellers in etsy much more valuable to the company and much more valuable to the shareholders. you saw that in this quarter to the extent that their seller services revenue grew at a very fast right especially versus their marketplaces which is where they get 20 cents per listing and 3 1/2% commission. so when i look at etsy and i look at the long-term potential for the stock it's going to come down to seller services and i think the strength there is what drove up side in the quarter on sales and ebidta. and what gives me conviction on the name. >> why is it down 12% in the after hours session? is it simply because it was up 45% in the month prior? >> i think the pressure after hours is a reflection of
continued -- the strong dollar is basically affecting buyer behavior on etsy. so last quarter they noted that 91.2% of listings were listed in u.s. dollars. i'm looking for an update on that figure. they do have initiatives under way to combine local buyers and local sellers. last quarter they indicated in the uk that was having a positive effect. you saw 7x growth in local buyers and sellers in the uk versus u.s. buyers to uk sellers and things of that nature. so we'll look for an update there. and then the company noted they're not giving quantitative guidance, suggesting revenue and ebidta x to y in the next quarter. they are giving qualitative and they're indicating they're going to continue to invest in the business and then also the pressure from the strong u.s. dollar. that's why i think it's down after hours. >> tom, we're going to leave it there. thanks for your analysis. tom forte, breanne capital. what do we do with etsy? >> i just think it's a stock that has certainly a very interesting niche to fill and i think in a fragmented marketplace of smaller goods and
whatnot we all know what they do and we all think it's a pretty good idea. but you price this thing, this is probably trading 10 times eb to sales. there's no room for error in the stock. that's what you're seeing here. i don't think it's a broken company. i think it comes down to valuation. and the guy puppet really tells you everything you need to know about how good things can be on etsy. >> does it get bought? does it get bought? dan nathan. >> no. here's the thing. when a company like this as young as they are starts giving qualitative guidance that means they shouldn't be public for all intents and purposes. $2 billion market cap for a company like this with the sales he just said it, logistics, this and that. that's what amazon does and they do it really well. and they can squash these guys at any moment. i don't think you buy it here at 16 1/2. >> coming up, shares of disney falling in the after-hours session. we'll hear from ceo bob iger in his own words in the quarter. the traders will break down the playbook on dreamworks,
welcome back to "fast money." stocks closing in the red today. trading in a fairly title range. the dow notching its fourth down day in a row while the s&p and nasdaq have now dropped three days straight. crude oil managing to gain some of its losses back, closing higher by just over a percent. here's what's coming up in the
second half of "fast money." can apple stem the bleeding? the world's largest company losing nearly $100 billion in market cap in just the past two weeks. but is apple still fundamentally sound? we've got an analyst with one of the highest price targets on the street who says apple is far from broken. and later tesla gearing up to report earnings tomorrow. and according to one analyst this quarter could be a lemon. we'll hear why tesla could be setting up for a skid in the tape. >> very nice, mel. >> we tried. let's start off with another take on disney taking a leg lower. cnbc's julia boorstin's been on the conference call, has got the highlights. julia. >> disney ceo bob iger focused his comments at the very top of the call on espn and the rapidly changing new landscape that's putting pressure on the ecosystem. he said that they're seeing modest subscriber losses largely due to decreases in the number of households who subscribe to pay tv rather than those who switch to skinny packages. >> overall, though, we believe the expanded basic package will
remain the dominant package of choice for some years to come because of the quality and variety it represents for a price that is generally considered fair and appropriate. we also see the continued development of new platforms with smaller channel offerings. >> disney's new cfo christine mccarthy saying the strength of the u.s. dollar is expected to adversely affect operating income in 2016 by $500 million. then due to those lower subscriber levels that iger discussed the company now expects domestic cable affiliate revenue to fall a bit short of prior expectations. bob iger is on right now talking about the opportunity. he says he sees companies like netflix more as a friend than a foe. melissa, back over to you. >> julia boorstin, thank you. keep us posted pen meantime we have a programming note. be sure to catch disney ceo bob iger in a cnbc exclusive interview tomorrow 9:00 a.m. eastern time on "squawk on the street." don't want to miss that.
meantime for more let's bring in rosenblatt securities analyst martin paikkonen. why do you think there's softness in the after hours session? >> you just highlighted it with espn. there are two parts of espn that are going to be challenges. one is as bob just mentioned as julia reported modest subscriber losses. everybody's going to wonder if that's going to get deeper. and i think the other part of it is whether these newer services over the top as they're referred to, skinny bundles and so forth whether they'll make up the slack. i also think at espn, and i don't know if this is what they're talking about on the call, ad sales have peaked, margins have peaked in espn and there are signs of cutting back cost. something you would do in a normally mature business i don't think you ring the fire alarm here but there are some challenges. and certainly the cable breaking of the bundle is one of those. >> julia mentioned the last piece of her hit that iger was talking about netflix being more of 'friend as opposed to a foe.
would you agree with that or is he putting a nice spin on this? >> i would agree with that wp i think when you look at the deal, people have been talking about this lately but late next year the deal that netflix has had with starz -- or disney rather has had with starz for their films, some of which are classic others more recent, that goes to netflix and there's going to be a lot of films all of a sudden on netflix that are big disney titles over the last recent and long ago years. as well "star wars" is coming out at the box office obviously in december. that's going to be on netflix probably very late next year, might even slip into '17. so very much friend more than foe. i think also netflix as you know when we talked about doing a lot of their own production, i think disney can and probably will be more of a co-production arm doing things with netflix. they didn't talk about that right now but i think that's part of the future as well. >> disney shares went into the quarter at a record high are essentially, martin. and right now it's down by more than 5%. is that decline warranted in
your debut? given what you outlined. the concerns about espn and moving to skinny bundles. >> i'm going to stand back and say it looks like it was down about 2% initially. it's down another couple% to 3% after bob iger's comments and i think those things are going to worry people. i don't think there's any way around that. i don't think this is a severe problem right now at least. i don't think it's a radical change that's required. and frankly with disney here's the benefit of having a lot of other things it going well. the parks. shanghai is going to open. the film segment is on a tear. the consumer products are strong. you do have other things to make up for it. disney right now coming into today was at a modest premium to the group and a modest premium to where it has historically traded. it's getting a little bit of a haircut but not a complete one i guess. >> martin, thanks for your ajs. appreciate it. martin pyykonnen of rosenblatt securities. >> i am long going in. i'm not going to buy more right
here. this is a modest correction. it has to be a lot more profound than that to buy some. >> down 5% in the after market for a listed stock like this i'd say that's kind of significant. i think you're going to see some buyers in the opening 50-day moving average is 115. it's right about there right now. the obvious level to add to this thing is if you see it at 110. that was a level that consolidated after the q2 earnings from may, june, and into this print before it took off. 110 is the level. >> catalysts later in the year including shanghai disneyland, a lot of the pipe that -- "star wars," et cetera. >> i think you also get through the year-over-year studio looks negative on the headline but you actually get into a fantastic calendar into the holiday season and i think that's very, very important. i was going to say 108 is the level on the stock that i think it looks interesting. to me. again, i wouldn't say they've failed you this quarter. they're a victim of their own success. and i don't hear anything that tells me otherwise. >> dan mentioned 115 as a 50-day moving average. >> 110 is the right level, though. this is more of a reaction than we've seen over the last two
years in terms a down draft in the stock. this is 5 1/2%, close to 6%. which is interesting. bob iger's comments were as cautious -- not cautious. probably the wrong word. maybe as quasi-negative as we heard them in quite some time which is why we're seeing this. i still think it's a good stock. i still think it's going higher but i think 110 now that dan just mentioned absolutely comes into play. >> 5 1/2% the loss right now. earnings playbook. a number of other big names out after the bell. let's start out with dreamworks higher by about a percent after hours. the company posting a smaller than kidnap loss from studio to studio. >> this is a company that's been free cash flow negative, there's a major restructuring going on earlier in the year, a lot of people questioning the creative process and then "home" comes out is a major part of the success in the second quarter. i have to say i saw it. it was riveting. with my 6-year-old daughter. just kidding. but very creative. very interesting. >> you saw it by yourself. >> i saw it by myself. let's not kid ourselves. but this is a company that continues to show it can be successful in the creative process. they haven't necessarily had a huge run of hits. the stock had rallied off the
lows off the restructuring. i think it's neutral here. i don't think you do much after hours. >> shares of activision jumping after a solid earnings bet on the top and the bottom line. karen. >> yeah. you know, this great company, it's not a huge quarter for them but call of duty skylander really doing well. i don't get it. >> you play that every single night. >> that's what she's doing right now. >> exactly. that's why we have these here. skylander. skylander. call of duty. this is a great cash generator. you know, it's expensive but not crazy expensive here. they've done a very good job. i kind of like it. >> all right. and zillow soaring after it post aid much smaller than expected loss. plus beating revenue estimates. >> these guys have been guiding down all year. they bought their main competitor trulia. they said in this call they'll close the acquisition sometime in the third quarter. a quarter below initially forecasted. i think you're going to get some excitement around that. 35% short interest here. i think the results are fine.
it's above 80 right now. i think you want to see it hold 80 here. you don't buy it up 6, $7 in the after market. let's see it consolidate here and see set the stage for some beats going forward to closing that trulia deal. >> all right. apple slipping further into correction territory today. but up next we've got a top analyst here to explain why he thinks the stock could rally another 60, six zero, percent from here. tesla getting ready for earnings tomorrow. we've got the three most important things you have to know ahead of that report for your earnings edge. much more "fast money" still ahead. information for an athlete's medical care, or information to track their personal best. with microsoft cloud, we save millions of man hours, and that's time that we can invest in our athletes and changing the world.
down apple saying the stock could be headed for a full-blown -- we wanted to see how the fundamentals are lining up p p fbr capital director dan ives has a $175 price target on the stock. he joins us from 30 rock. dan, great to see you. >> great to be here. >> what's going on? >> i think there's a number of things. ever since we saw that print a few weeks ago we knew it was going to be a white knuckle sort of three-month period here. i think the big worry for investors a lot of it's around china i mean china is key to this apple growth story. there's worries that you have this iphone 6 hangover starting in december. and we see on the watch with soft sales coming out of the gate. and there's more concern that this is not going to be a growth catalyst along with that whole wearable category. you've seen this stock really go from glass half full to glass half empty. now it's a prove it period, especially going into this pivotal next few quarters. >> what i don't get, dan, is that so many apple analysts, and i think you included, i think i
talked to you before on specifically the china concerns a couple weeks go and you were ready to say you know, what it's not going to be a big deal, and yet here we are citing china headwinds as a reason -- as one of the reasons why the stock is now in correction territory. what's the deal here? what makes you believe now that they are headwinds? i mean, we have seen some of the suppliers to apple trade, you know, significantly lower i would say or under pressure based on this apple down draft. what's changed? >> those are perceived headwinds. again, i think there's a lot of differences of perception versus the reality. reality is we believe china $150 billion market opportunity, 7% pain trade today, that's really going to be the fuel in the tank for apple. so i think that really is a big difference, that there's a lot of worries out there in the crowd theater. we think it is perception. when you look the penetration the way the market's going the next two or three quarters you take a step back forest for the trees here, 30% of iphone
customers have upgraded to a 6. we believe a year from now that could be up to 80%. you've got a 6s which gets announced and we believe in the coming weeks for september. eight nine times ex cash. this i'd use a golden opportunity to look at a name like apple. it's going to be a little bumpy but that's where you start heading into the next six to nine months into this product cycle. >> in your view fundamentally nothing has changed the apple bull story. everything is the same as it was on april 28th when it hit its all-time high? >> i think it's perceived risks with china, with no iphone beat that we saw last quarter. i think it's one when you look at this out six to nine months you feel really good about the 6s product cycle. i think what's happening right now is a rerating by the street, nothing more. technicals are kicking in like you talked about but when you look at this story i still view it 140, 150, up to 170 as we
look out in a year. and i do believe we look back and this will be an opportunity as you're going to see all the bears come out, calling a nokia 290 which i find embarrassing, just given the comparisons. but this is really the opportunity for investors that sort of missed this massive run we've seen over the last year. >> dan, going to leave it there. thank you. >> thanks for having me. >> dan ives, fbr. is this a golden opportunity? >> i don't know. >> you're not willing to step in. >> not quite yet. you know, i'd like to hear what these guys think about what the right price level might be. but i do wonder, how much of their buyback will they be using right now? >> apparently not any at this moment in time. or not enough. i mean, with the stock -- >> i don't know. it could be 108. i don't know. >> it's a really good question because we know that apple has actually used these accelerated buybacks and they've gone and bought a lot of stock at very opportune times. they've been really good in the last couple years at doing this. and i think the last one was 6
billion, 9 billion before that. this is when they're basically entering into a contract with the bank to buy their stock over a very short period of time and that has the ability to have a stabilizing factor. so i think you probably could see that kick in. i think the last time they did this the average price was about 110. >> there is an apple put. there's a tim cook put underneath the stock. could this be the golden buying opportunity? >> if you listen to analysts, they love to talk about the multiple ex cash. more than any other company because there's so much cash in the balance sheet. but what i want to know is how a company that was trading at 12 to 13 times over the last few years, a lot of analysts are now saying should be trading at 15 ex cash. where's the multiple expansion coming from? that's the part i think gets the analysts to. >> coming up next tesla gearing up for its earnings report tomorrow. we'll tell you why some traders see the stock stalling out. you're watching cnbc, first in business worldwide. i'm here at the td ameritrade trader offices.
our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. welcome back to "fast money." tesla shares getting a boost ahead of its second quarter. theer are the most important things you need to know for your earnings edge. >> colin langlan for "fast money's" earnings edge. tesla reports tomorrow. cautious heading into the print. below consensus expecting a 67 cent loss. compared to consensus 60 cents. really driven by weaker operating margins. i think the other two factors investors should folk focus on
is the full-year delivery target of 55,000. i think that's going to be at risk as they go into the second half as it implies a 50% increase from the first half. the third thing we're looking for is the timing of the model x. that did slide. originally it was supposed to be q2. now it's late q3. we'll see if it stays on schedule. clearly that's going to be an important read for future model launches. we are cautious heading into the quarter and reiterate our sell rating. really driven by the concerns about deliveries in the second half as well as the slow storage growth opportunity we're seeing. carl langan, ubs autos analyst for "fast money's" earnings edge. >> by the way, that sell rating is fairly new because ubs downgraded the stock fairly recently. how are options traders preparing for these results? >> they're nervous. the implied move in the options market. the four quarter average move of about 4%. but today the five most active strikes were all short dated calls. they expired this friday and
ca -- on this friday's close and call volume is 1 1/2 times that of puts. when you go and think about this report let's look at technicalities here. the stock has obviously had these massive moves. g-swizzle's been all over this, up 50% off the march lows here. it's been consolidating at this $260 level. that's a nice little flag there. but i want to bring up one point. that analyst is very negative. he has a sell on it. look what this thing is. some people would call it maybe a triangle of death a little bit or a head and shoulders top. that sort of thing. this flag is a bit precarious from a purely technical standpoint. especially given that massive run. i just want to make one last point. this is option prices in tesla, implied volatility. they're a bit elevated. it seems like options traders like i said before are a little worried here. it's obviously a very controversial name. china the analyst didn't mention, that's going to be important in the deliveries in the model x. there's a lot of things they could disappoint on. there's a lot of good news in the stock right here. >> some might call it a triangle
of death. that some would be dan nathan would call it -- >> that's brian kelly i think. no. he's the puking camel. >> i'm g -- >> it's a little confusing. >> one of the things about tesla i would say, part of that chart dan is showing is the move from april to the current highs is really all about e.v. it's all about the storage and the stationary storage. that to me is where the street was able to take this stock up 20%, 30%. i think you trade right back down on that. i think one of the things the street is saying is it's all being priced into the future. i'm neutral on the stock. i think it trades down to 220, 240. but i do think the ev's a major opportunity for these guys but it's in the stock. and it's one more of these things that people are saying i expect this to happen somewhere down the line. >> july 21st is when ubs cut the price target to 210. i have the utmost respect. that's pretty -- good for him to come out right or wrong. at least he had the conviction.
i think people are covering shorts today ahead of earnings. i still think it's going to retest that 2 1/4 level that dan said. i've got to say dan moves around that smartboard. it's amazing. the board never goes blank on him. it's incredible. >> hold on. what are you trying to say? >> you can't -- >> for more "options action" check out the full show 5:30 p.m. eastern time on friday. we've got your first move tomorrow when we come right back. stay tuned. what the heck is wrong with hired help? i've got the ceo -- plus the head honcho of brunswick and a deep dive into some under the radar biotechs. "mad money" is next! the 2015 cadillac srx. lease this from around $339 per month, or purchase with 0% apr financing.
let's get a final check on shares of disney because we are tracing them right now to the after-hours session lows. they are now down by more than 6%. nearly 7%. comments from ceo bob iger surrounding pressure from the bundle spooking investors sending shares lower. the analyst at rosenblatt talked about possible peak ad sales, ad revenues over at espn being a concern, pressuring disney too. what do you do here? this is getting worse. >> it's definitely getting worse. i don't know. i think you let it trade tomorrow. i don't think you need to rush in. it is an enormous company after all. it's not like one trade will -- but it's settled down a little bit. maybe three-day rule. >> guy. >> huge move. this is a level dan's talked about. 110 is now firmly in play. the way it's trading right now it's going to be there by the
time the show's finished. 110 holds tomorrow you buy right there. >> we should note again ceo bob iger on "squawk on the street" tomorrow at 9:00 a.m. so we'll be a must-see unitview on the back of this nearly 7% decline on the after hours session. time for the final trade. let's go around the horn. tim seymour. >> mcdonald's not a huge catlist but create your own taste app the kiosk where the kids can pick oup the new toppings and all the things they want, they're doing the right things at mcdonald's, this stock's moving higher. buy it. >> think of how dirty that kiosk will be. >> i don't think about that. i think about all the toppings i can put on. spicy mayo. >> procter. they have the new management thing. 75 bucks seems like a level that's down almost 20% from its january highs here. i'm thinking about an entry on the long side. 75 bucks. >> karen finerman. >> yes. we talked about it earlier. sunedison. i think it's really gotten crushed, it might be overdone. down with oil as well. but -- >> gutsy. >> this is a little -- maybe a lift. sunedison. >> guy. >> did you know what he meant by
black teas quickly? yes or no? >> no. >> solar city. i'm in the finerman camp on the back of first solar. scty. >> i'm melissa lee thanks for watching see you back here tomorrow at my mission is simple, to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now. hey, cramer. welcome to "mad money." welcome to cramerica. other people want to make friends and i'm just trying to save you money. my job is not just to entertain you, but to put it all in context and educate you, call me at nba n800-743-cnbc or tweet mm cramer. when we try