tv Closing Bell CNBC May 10, 2022 3:00pm-4:00pm EDT
dollars in market value over the course of the last three days so it's something to keep perspective on. >> and three years ago there was not one company that had a trillion dollars. >> and now there's other four. >> dom, good to see you. thank you all for watching "power lunch." "closing bell" starts right now. thank you, tyler and courtney it is another roller coaster session on wall street the dow had been up more than 500 points before turning sharply lower, then recovering now struggling for direction as we head toward the close the most important hour of trading starts now welcome, everyone, to "closing bell." i'm sara eisen here's where we stand in the markets. as you can see the dow is higher by 29 points the high of the session was up 500, the low was down 357. the s&p 500 up a nice three-quarters of 1% the strength is in the hardest-hit part of the market, technology communication services, netflix
and alphabet working today nasdaq composite up 8.5% it is leading for a change small caps up 0.4 of 1%. what's not working, the more defensive plays that have fared better in the sell-off check out some of the most actively traded names right now right here at the new york stock exchange palantir giving more back. nio and ford continue to be among the most actives amc down about 4%. it's reversed its gains off of earnings coming up on today's show, we will talk to canyon partners co-founder josh friedman about his outlook for the market after this brutal bout of volatility huge credit fund plus amc ceo adam aron will join us for an exclusive interview. the stock is down more than 50% so far this year it's falling again as we just showed you after last year's frenzy among retail traders. let's get straight to the wild action our next guest says it might be time to dip your toe back in ahead of a summer rally.
joining us now is tony dwyer tony, i know you've been looking for a bounce i don't know, today feels a little tenuous what do you see? >> hey, sara, thanks for having me the whole period is tenuous. when you get these indicators, we tend to look for the low tick and i'm horrible at that, as you know what you want to do is identify an environment where you think even if goes down further you'll make that back up quickly on a reflex rally our call is that a similar environment, i can't wait to hear you talk to the credit investor we're similar to we were in the first half of 1994 so i think that playbook may look pretty good here. >> so in that scenario, would you be buying technology because it's been hardest hit for a summer bounce? >> if you're going to get a bounce it's in those names that got hit the most today is your clue on that it's getting all the stocks down the most are seeing that kind of bounce-back because it's not
fundamentally driven what happened in 1994, sara, credit took a hit because the fed razz a lot more aggressive than anybody thought they were going to be. as the year began to progress, you got 50 basis point moves and ultimately a 70 basis point move but what happened when it made its low in june and i think we're surrounding that now what happened is people said the market had discounted what the fed was going to do and there wasn't enough of a lag time to have the higher rates impact the economic data. so what happened is the market rate rise stalled and looked a little better. you got a rally in the 2-year, 5-year and 10-year kind of like you're getting now and that lifted the indices the average stocks still struggled, it was just an oversold bounce. then you got that summer rally as we talked about the last time i was on, we got that fall fall. when the economic reality of what happens, the impact of interest rates i'm a little bit blown away, sara, on something that i heard on cnbc yesterday or maybe it
was this morning neal kashkari came on and talked about how the accommodation withdrawal by the market has been faster than the accommodation they instituted in 2020 so think about that. you put trillions of dollars of stimulus into the economy, and they have taken it back faster so there's going to be an economic impact and that's where we have to deal with that once we get the summer rally. >> which is why we always have to listen to you carefully here and read the note carefully, tony so short term you're looking for a bounce for what, a few months? and longer term, i read your note and you actually sound pretty bearish about what the fed has to do, about some of the forces weighing on us, china slowdown, global growth, all of the issues that have been plaguing investors. >> that's exactly right. how does -- when you have the kind of move in credit, sara, that we've had and i know the spreads aren't as
historically as wide as they have been. but the level in yields has put a crimp on the mortgage market so where are you getting your money? you get your money from a bank you can borrow it from your equity account, our brokerage account, or you can earn it. we're at peak employment it may get a little bit better in the next month. that's the box the fed is in but banks are tightening their lending standards. if you want it, you can't get it out of your house. if 90% of the mortgages, according to my friend, 90% of mortgages are below the current mortgage rate so who's going to take equity out of their house to increase their interest payment by two basis points. so that's the financial tightening that neal kashkari was talking about. i think that comes into play on a lag, so that's probably fourth quarter. >> so my question is what you should be doing about this view. you mentioned the beaten down names will rebound the fastest
we're seeing that in technology today. in a rising interest rate stwi environment, you hear strategists after wealth advisor telling their clients you want to be in quality, you want to be in cash flow positive companies that are profitable. so are you saying transition into unprofitable tech companies, more speculative names right now? >> it depends on -- like if you're trading for a bounce. listen, i've talked all year about how my dad sat in the basement, looked at me and my brother and said don't just sit there, do something. all year we've talked about don't just do something, sit there. you're in a tumultuous environment, it's going to stay tumultuous if you are a trader and looking to play a bounce, we talked about dipping our toe in that's for a summer rally. if it goes up 5 to 7% in the next week, that could be a lot of it. >> it could happen fast, yeah. >> well, tony, thank you for
joining us with the short and long-term view d tony dwyer. after the break, shares of amc have lost half their value on the back of earnings. we'll ask the ceo, adam aron, whether he thinks retail traders have lost interest or something else is driving the sell-off in the stock. the dow is up 122. we'll be right back.
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earnings and revenue estimates and issuing weak full-year sales guidance it's down 27%. shares of amc initially positive after earnings last night but reversing course, now down 4% or so. the movie theater chain beating on revenue but investors remain cautious ceo and chairman adam aron joins us in an exclusive interview adam, it's nice to see you welcome. >> sara, always good to be with you. >> so clearly some progress on the revenue side of things and attendance in the movie theaters but you're still burning cash and not profitable yet why? >> well, let's talk about the progress first there was something called covid-19 you may recall that shut all movie theaters two years ago and basically stopped the flow of movies to theaters from hollywood studios we've been marshaling a glide path to recovery ever since. as you said, we just reported the best first quarter in two years.
we saw considerable progress in 2021, and then, you know, just this weekend we had the biggest movie of 2022 opening in "dr. strange. when we look at the movies that are coming, including "top gun maverick" and hit after hit after hit, we're optimistic the box office is coming back, that theaters are coming back, and that's the news at amc that we reported in the last 24 hours. >> so i guess another way of asking is what level of attendance, adam, do you need to see to not be burning cash >> oh, i suppose if we were -- get to a point where we're 10 or 15% down in attendance from pre-pandemic levels we should be in pretty good shape when you look at where we were in the fourth quarter of 2021,
we got within 25% of pre-pandemic levels. and we were breaking even in the fourth quarter but we're not trying to get to operating cash break we want to be robustly profitable again i think we need to see attendance levels rise to 10 to 15% of pre-pandemic norms. but i do think that's a doable thing sometime in 2022 or 2023. >> adam, on the call you addressed, as you often do, the retail shareholder base in your stock. and actually said, i thought this was interesting, that some of the feedback that you've been getting specifically on social media may be well intended but some may be hurled at us with an intent of harming me or the company. it was the first time i heard you speak out against some of the enthusiasm or mania around your stock explain what you're experiencing and how concerned you are. >> look, twitter is an anonymous
media. look, on balance the enthusiasm, the passion for amc amongst our retail shareholders has been stunning to us it's so much more on the side of being constructive i don't want you to read too much into that commentary. i'm very fortunate to work with the shareholder base they love our company. they're rooting for our company and we appreciate their support. >> even with the stock down 80% from the highs >> well, it depends where you want to look, right? 15 months ago we were at $1.91 a share. it is true that in -- if you look at calendar year 2022, our stock has fallen it's also true that the market has fallen these are very uncertain times and there are a lot of other companies, really wonderful companies, your own, comcast
which owns nbc universal is off 20%, disney is off 30%, netflix is off 70% amazon just bought mgm studios and it's a streamer and it's down a third this year it's a tough market in 2022 and it shouldn't be a surprise to anybody who watches. >> i think the meme trades in particular have reversed and that was obviously a point that a lot of people thought, okay, the speculation in this market has gone wild. now the fed is raising interest rates and a lot of the froth is coming out of the markets. they look at stocks like amc and it looks particularly vulnerable so i guess i'm wondering are you worried about losing that lifeline that you've had of retail traders. >> no, i'm not worried about losing the retail traders. i think there's a lot of passion and enthusiasm for amc but when you're doing the parade of horribles that colors the market, why don't you throw in a war of ukraine, the first major ground war in europe in 75 years. >> 100%. >> since the balkans back in the
'90s look, these are messy times with inflation and interest rate hikes. but still, it's more your job to comment on share price it's more my job to run the company. and when you look at what we reported yesterday, we reported a five-fold increase in our revenues year over year, a narrowing of our ebitda loss by 80%, a huge opening in "dr. st strange" this weekend. there's a biopic about elvis starring tom hanks, all the way to the sequelvatar i'm very optimistic about our future and that is what we're focused on, bringing amc back to a position of strength as we defend the number one industry on a global basis. i think we've done a nice job in
guiding the company back to recovery. >> you've also been focused on deals, adam. i think you said on the call that you were going to look for more strategic deals you know, the gold miner that you invested in, high crop mining, that share price is lower than it was when you announced your stake as well as your own stock i just wonder, there's still a lot of skepticism and people scratching your heads about you investing in a gold mine and whether that was a really good use of shareholder capital when you have still billions of dollars of debt that you could be paying off. >> there's only one problem in your premise and that is if you look at our share price, our share price at amc and the stock that we acquired was $1.07 and high crop is in the money. so it's not accurate that we have lost money or even that i think that we will lose money with high crop we are in the money now. we're positive we had a very strong return in a very short period of time. our strike price is 1.07 on
their shares yes, we are going to look for more opportunistic ways to smartly diversify the company because we think there are opportunities out there to grow shareholder value for amc. now, with respect to high crop, we've only invested $28 million when we had $1.8 billion at the end of the fourth quarter of 2021, so it's not like we bet the farm if we did have to bet the farm, i don't mind betting the farm on a company that has $45 billion of proven gold and silver reserves in the grounding. >> hycroft mining up 126 thank you for taking the time and the questions. we appreciate it adam aron, ceo of amc. we have been all over the place today. the dow is higher but has lost about half the gains just in the 20 minutes of this final hour of trade, up 46 points right now. s&p holding on to a gain of 0.8
of a percent most sectors are higher today. technology and communication services lead. real estate and utilities lag. the nasdaq up 1.8% still down for the week which just shows you how brutal it's been but the nasdaq 100 is up a nice 2.2% tech getting a bid today but it's been a brutal year for all the faang stocks, all down double digits in 2022. mike santoli will look at the damage done to the valuations in this space for his dashboard next. a quick programming note, don't miss an interview with lee cooperman coming up at 4:00 p.m. on closing bell overtime we'll be right back here on "closing bell. ♪♪ this... is the planning effect. this is how it feels to know you have a wealth plan that covers everything that's important to you.
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adjustment in a short period of time take a look at some of the heavyweights microsoft, apple, alphabet and the s&p 500. microsoft was the absolute premium valuation on a legacy tech stock everyone loved the predictability at 35 times earnings it's down to 25. how far back to you go in time to consider 25 to be the norm. parts of 2018, 2019, not cheap but normalized on some level assuming the earnings hold up. then you have apple which really did get this huge revaluation during the pandemic. it was always cheap, now it's not. it's not back to prepandemic levels alphabet does look relatively inexpensive and gets you actually back to below where it was at the bottom of the market in 2018. overall s&p still 17 times earnings what i find interesting, the equal weighted s&p is below 15 times earnings meaning it's the very largest stocks still skewing the
multiple higher and still meaning that we're not really back to historical norms necessarily in overall s&p valuation but you're kind of getting in that zone 17 was a level we reached in 2018 and 2019 as well. >> it's interesting to see how much better apple is doing. >> it's been the one harbor people have been flocking to. canyon partners co-founder josh friedman thinks investors will see high double-digit returns in some areas of this volatile market. he'll be here to reveal those opportunities when "closing bell" comes right back
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it has been another volatile session today. stocks mixed as we near the close but still down sharply over the past week and of course for the year so where can investors find opportunities amid all the volatility and how can they protect themselves joining us is josh friedman, canyon partners co-founder and ceo. josh, it's good to have you. >> thank you, sara, for having me. >> i know that you're known as a distressed investor so maybe you're licking your chops. i'm just curious where you think we are in this whole process of completely revaluing equities and bonds and crypto and everything else as the fed raises interest rates and we deal with this war in ukraine and the shutdowns in china
how much longer do you think this volatility lasts? >> i think we had a pretty big sea change in the environment generally in the market. we went from a negative optionality market to a positive optionality market if you bought a bond a few weeks ago, there was so much pressure from the fed and treasury stimulating the market on top of the demand that was recovering from covid, rates were so low and demand was so high, that everything was pouring into equities and on the debt side yields were so low so if you bought a standard bond, you were negative optionality. if rates went up, you lost money. if credit spreads went up, you lost money if the credit deteriorated you lost money we have seen a sea change in that over the last two weeks. >> is it healthy to you as someone who did warn about the excessive risk taking that we saw during that period >> absolutely.
i think we're starting to see a return to things like actual financial covenants. we're seeing bonds that we and others passed on that were trading at par or were purchased by brokers at par a few months ago that are now trading at 90, 88, 86 there's been a little bit of liquidity withdrawn from the market, but i don't think the banks are in such poor shape that we're likely to see the liquidity crisis that will drop prices really dramatically and you also have quite a lot of private capital running around chasing credit securities. but you have seen drops and it is much, much more balanced in terms of the type of return per unit of risk for an investor in the credit area. >> so what do you do, josh it's been painful to be in stocks and bonds this year >> well, the types of strategies you pursue in a negative optionality environment are quite different from what you do in a positive optionality environment. prior to this change the focus is more on short duration
event-driven situations, private situations where you could negotiate extraordinarily strong covenants because you needed capital quickly and it couldn't be addressed by the public markets because it was confidential or competitive situations that were more arbitrage and event driven things that weren't likely to move with the market all that changes when you get into this type of an environment and you start looking at all of the things that maybe passed over your desk and weren't interesting six months ago start with the strongest credits and highest quality things that were just priced too tight now maybe a broker has to unload some inventory he has or a buyer who's leveraged that has to sell and that's the first thing a drop in price becomes attractive you mentioned distressed i think we're still a little bit away from seeing things that are at that low a level of the capitalization as to be distressed we'll be waiting for those. >> are you guys actively buying bonds here >> yes, we are, but we're
nibbling i wouldn't say that we're in for both feet. 5 million here, 25 million there, 15 here things we know we can react quickly before a lot of attention is drawn to those particular securities. yes, we've seen things down 10 to 15 points from where they were they start offering levels midteens to high teens as opposed to single digits with a lot of ways to lose money. >> i guess, josh, everything is so fed driven right now. do you have a view on whether the fed can achieve a soft landing or whether we're going to see a mistake >> well, i think the fed made a mistake with the treasury of oversteering into the recovery so coming out of covid into the demand recovery and they oversteered and caused a lot of excessive exuberance to coin an old phrase i think it's not unlikely that we might see a little oversteering on the other side and that could be a little bit -- cause a little bit of
p panic, cause the downdrafts we saw last week and cause a little fear to dominate not only do institutions overreact but human emotion tends to overreact and that's where you get the interesting buying opportunity on the other hand, what i would say is consumer balance sheets are generally in relatively good shape. you've already started to see a little bit of retrenchment as a result of gas prices being high, et cetera. so consumers are not in a bad place. corporations have done an awful lot of borrowing when you encourage people to borrow by having low interest rates and no covenants, they borrow but a lot of the cash proceeds from that borrowing is sitting on the balance sheet of companies. if they start to see their debt trade at big discounts, they may well use some of that cash to pay it back. so they're not sitting on the edge of prices there are a lot of ccc companies that may not endure the interest rates we're about to see the third part of that equation after consumers and companies is banks. when you see really bad pricing
is when the liquidity vaporizes in the banking community that doesn't seem to be in the picture at all this time so i'm not as pessimistic about the levels which things might trade in the near future. >> so you're not positioning for recession? you're positioning for stagflation? where do you think the growth and inflation equation goes? >> i think inflation will stick with us a little while because of what you said at the beginning, which is the supply shock from china and the supply shock from ukraine e they're not really addressed by the fed raising interest rates it takes a large adjustment to correct for those supply shocks but those will work their way through the system so i don't necessarily invest -- we don't necessarily invest based on a pure macroeconomic viewpoint. we try to protect against a variety of situations. but i would say our bias is that we'll have a slowdown, some
restraint in spending, that corporations will start to show some restraint, that these higher fed rates will start to kick in and cause some demand restraint, but probably not drive us to the kind of depths of recession or the kind of overshoot some players are expecting right now. >> really good to talk to you, josh especially as we've seen credit risk rise this year. josh friedman from canyon. appreciate it. here's where we stand right now in the markets the dow has gone negative, we're down 100 points. again, we've been negative twice before today, we've been positive twice, we'll see where it shakes out. down now 116 lost a bit of momentum there the s&p is still positive but it's up a third of 1%. technology, communication services, energy and health care all still positive the nasdaq 100 only up 1.5%. it just took a spill in the last few moments. the fallout in fintech stocks ramping up as that group continues to underperform the broader market coming up, we'll discuss whether
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welcome back check out some of today's top search tickers on cnbc.com 10-year yield obviously still on top. there's actually buying of treasuries with yields moving south. the 10-year note yield is below 3% peloton crushed on earnings. upstart crushed on earnings. amazon and tesla, which is seeing a little pop. biotech is a big winner after pfizer's ak zigs of biohaven pharmaceuticals. find out whether that could spark a wider m & a boom.
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welcome, everyone. we are now in the "closing bell" market zone. mike santoli is here to break down these crucial moments of the trading day. plus brandon ross counts us down to roblox's earnings and dan on the fintech stocks. mixed picture for the major averages into the close. the nasdaq is leading the charge it is still higher, up more than 1% the dow is down more than 100 points it was up more than 500 at session highs, mike. the s&p also losing a bulk of its gains. what's happening here? not a very convincing comeback.
>> no. i would just say kind of sloppy and indecisive but within a range that seems fairly narrow over the last five trading days the s&p 500 has been in a 500 point range. today doesn't tell you much except the market has been able to decompress. it hasn't had very wide swings today. the market went back down to yesterday's lows and the s&p didn't really find a lot of pile-on selling so that's a modest net positive. as i said, decompressing before we got this big cpi number tomorrow banks are still weak that's not great in terms of psychology, but for now the overall market is at least kind of treading water, i would say. >> let's talk about that if you look at the new 52-week low list today, it's bank of america, citigroup i guess you can make the case they're buying bonds, putting
pressure on yields but the rise in banks have hurt yields as well. >> yes we've gone beyond the pure nominal yield discussion and much more about is credit getting better or worse, so we more or less worried about, you know, the consumers' ability to shoulder debt and all those things, and is there some kind of accident in the financial system we haven't yet seen come to light, whether it's because of russia/ukraine, because of commodity market volatility, because of what's going on here in the markets i don't think that's necessarily something we have a clue about, but it's the kind of thing that when the market has been under a lot of stress, it starts to let its mind wander a little bit in that direction. >> health care is one of the remaining positive sectors shares of biohaven pharmaceuticals skyrocketing after pfizer announced it is acquiring the migraine drug maker for more than $11 billion. the deal is pfizer's largest since 2016 and gives it entry into the increasingly competitive and profitable migraine treatment business.
our meg tirrell joins us do people expect this to spur more m & a, which has been very, very quiet lately for biotech. >> yeah. there was a collective hallelujah that went up among biotech investors this morning when they saw this pfizer news they have been waiting for deals like this, given the depressed valuations of biotech and given that pharmaceutical companies have a lot of patent expirations coming up and a lot of cash to spend. as raymond james pointed out, this is the third major pharma/biotech deal. two of the buyers of those deals were pfizer. the last one was pfizer's acquisition of arena for $6 billion in december and merck announced it's acceleron deal in september. but of course it has been such a rough go for biotech stocks. the xbi up almost 5% this is the index that tracks more mid and small cap names and that's up more than the ibb
which has some of the larger biotechs in it over the course of a year, down 45% and really terribly performing over the last few weeks so it's been tough going you're seeing a couple of biotech stocks in particular outperform on speculation that they could be potential future takeover targets stocks like biomarin, intra cellular therapies and neurocren as well. >> i remember talking to the ceo of novartis because they had been a serial acquirer and i asked him why no deals i think what he said was that it's the lack of quality of targets. i'm just curious what you're hearing about why -- why it hasn't been happening and why the sector has been so weak? >> yeah. i think there are a couple of really interesting things that he said in that interview with you. one of the things is that there are just so many potential targets out there, so many biotech companies have gone
public the last few years. it is difficult to parse through everything you're seeing another thing that he and something we hear from a lot of big pharma ceos right now is do the sellers agree where the valuations have come to is a good place to sell that is not usually the case so actually coming to an agreement on those things has been really difficult. >> meg, thank you. we'll leave it there one hot spot in the market today. chip stocks are also doing well, leading the nasdaq gains and significantly outperforming the broader market kristina partsinevelos joins us. how is the supply crunch continuing to affect the sector? >> i have four new examples. taiwan semi conductors announced they're hiking prices for a second time in less than 12 months they're saying it has to do with inflation. the second major reason is they need to expand to help ease the supply chain crunch which leads me to my next point. the lead time, when a chip is made to when it's delivered continues to be a problem.
there's a long lead time for a lot of these manufacturers the third point on your screen is this lagging edge chip shortage for all those that don't know what lagging means, think of the chips used in auto, analog like radio speakers, frequency like that. it seems like more and more newfound res, new manufacturers are focused on the leading edge chips, those involved with ai so we could still see a shortage especially in the auto sector. last but not least one we've talked about a lot and it's still an issue, acor versus asis computer hardware companies saying pc sales are declining. so this weighs on companies with dramatic exposure to pc as well as gpu processing units. >> really good color, kristina, thank you. mike, or they just got too cheap. i think about adam parker saying yesterday he's buying semis because these stocks have priced
in a lot of bad news and they have pretty good longer term trajectories in terms of growth. >> there's no doubt the valuations have come in a lot. at the highs in valuation, people say you have to pay up for the really clear and encouraging growth outlook that they have. so clearly the psychology has changed. the semiconductor index is interesting on a one-year basis. just like the nasdaq 100, it's fighting to stay above its lows from early 2021 and so far doing that one other piece of the supply log jam story that got some chatter as well is the crash in crypto might alleviate one big source of demand and shortage, which is from crypto mining. >> hmm, interesting. crypto having a little bounce today as well, mini one with the broader market. roblox earnings are coming out after the bell that stock has gotten hammered, down 80% year to date. a major concern among investors is user growth, especially as we shift toward a post-pandemic
world. gaming stocks reporting after the bell those stocks also underperforming. joining us now is brandon ross from lightshed partners. what is the big concern here with roblox? there was so much excitement it was the first company into the metaverse and that's where the younger generation wants to be and are still gaining. >> it's certainly seen a major slowdown in engagements across roblox like in other 3-d interactive platforms since reopens happening and that's been much more acute in the united states versus the rest of the world, where roblox continues to really grow and that is -- that's not a user change, it's more of an engagement change. on the user side, roblox continues to actually add accounts and grow the number of users. it's just the time spent in daily activity versus kind of a weekly activity that's changed
>> so what's happened to the valuation? it's now trading about seven times sales. i know you think that it got too hot last year. but now that it's come down? >> i think it's trading at more like four times bookings, if you look at it it's still an ebitda generator, a free cash flow generator you're in this reset year right now, especially in the u.s., which you're about to lap. and we expect the platform, especially based on all the upgrades that are happening in terms of adding voice and layered clothing on top of avatars and brands flocking to the platform that you'll really return to growth in the second half of this year and beyond that. >> so it sounds like you're a fan, right what would you tell the most skeptical investors who see it as a poster child of all the excess last year of all the new companies going public and all the hype and excitement. >> we believe that there's going to be a next generation of
really valuable platforms that are going to be rooted in a much more interactive world than we've seen in the current form of the internet. and this company has as big a chance as any right now, along with maybe epic and, hate to say it, meta, to be a really important player in the next generation of communications and media consumption. >> brandon, thank you for joining us brandon ross of lightshed. it's a brutal day for the fintech stocks take a look at ai learned upstart. it's losing more than half of its value after the company cut its full-year revenue. disappointing results also dragging down affirm look at sofi, released its q1 results earlier by mistake citing a human error they had a lighter than expected revenue forecast joining us is dan dolaff
you know, dan, it looked like really great calls you had on some of these names last year. this year not so much. it's among the hardest hit parts of the market. why are you sticking with names like sofi or affirm which are not what investors want right now? no profits, negative free cash flow, and hiccups in growth? >> look, on sofi, actually they beat q1. they raised up the guidance on revenue and ebitda the funds mamentals are hitting all cylinders. so i think what you're seeing today, that's a little bit of the error of prereleasing, but also i think a lot of the upstart kind of like is dragging it down. i think that sofi had been up like 10, 15% this was a class a quarter for
sofi. >> but there are problems. wait, wait, wait, dan, there are problems here, right what if we see a turn in the credit quality for consumers the postponement from the biden administration of the student loan payoffs, they're losing on that front aren't these big issues? >> those are big issues, but they're actually the moratorium extension is already in the numbers. what we're seeing here is an upping of the guidance despite the moratorium if you look at their personal loan issuance on a quarter over quarter basis, they added like half a billion dollars so they're gaining share. now, if we get a macro event and things turn south, that's not a sofi issue, that's a broader issue. but specifically for sofi, this was an amazing quarter and they're not getting any credit for that. >> what about affirm, do you still stick with that stock? another one that is not profitable and is falling in sympathy with upstart. >> 100%. it's the same issue. those fears are hurting
upstarts, sofi, everyone affirm is a market leader in buy now, pay later if you look at the trust data which we track, they have actually gotten better in april versus the last few months so it's actually trending better. that's going to be key i think people will be surprised to see the delinquencies actually come out better than expected and that should be a big surprise the amazon deal that they have is massive and i think that's going to catch all these bears by surprise. i'm very bullish about affirm. >> mike santoli, can you own these stocks if the fundamentals are good but there are some real concerns about the consumer lending environment in this country? >> both of them, affirm and sofi are around $5 billion market cap so they really have been marginalized relative to the universe of their competitors. can you own them at a price you can own anything. i think the question is are they
really going to be accruing book value, doing things that financial companies do you can't own them by thinking that fintech magic makes them something other than a lender. and sometimes a lender to perhaps lower quality borrowers where you'll have an adverse credit experience at some point over the cycle in a world where capital one financial traded six times forward earnings, i don't know what the world is going to want to pay for these companies if they come to just view them as the lenders that they kind of are at heart. >> dan, that's a question to you. what should you be willing to pay for sofi or affirm given some of these concerns and the re-rating of all of tech stocks? >> i agree with mike, but that's a backward-looking thing and this is something we've seen across all of fintech. we're coming off massively tough comparisons. you mentioned last year was a great year for them. once we hit that inflection point which is coming in the second quarter, a lot of these
worries that are dragging these stocks are going to fade so i think it's pricing in -- it's pricing in like a disastrous environment it doesn't look like the environment is as bad from a demand perspective so i think that both those stocks are severely undervalued. >> you still think 14 at sofi? the stock is at $5. >> yeah, 20 times ebitda. >> dan dolev, thank you. bullish on sofi and achl. to be in tech check don't miss the interview with the sofi ceo. two minutes to go, mike, in the trading gain what do you see in the market internals? >> very mixed under the surface. definitely a little negative skew nothing too dramatic yesterday, remember, was another one of these 95% downside volume days really good washout readings here you have a 3-2 downside to upside it's the mega cap growth stocks holding the indexes together
commodities an interesting story. an indicator says maybe the fever is breaking in terms of inflation anticipation the commodity index is below where it was in early march. it's still in an uptrend but maybe some of the pressure is easing from that market based inflation expectations also crashing if you look at the 10-year break-evens. the volatility index has come in quite a bit. we're at 31, five points off the recent high. that's because the market was around the flat line and could not keep the vix elevated. >> that market base measure into the cpi report, expecting 8% inflation for the month of april. look at the dow. we've seen an 800-point swing on the dow, just unbelievable down 72 points right now and there you see it's the most weakness of the major averages sa sa salesforce is contributing the most
s&p 500 still with a gain and that is thanks to tech stocks like chips, which we hit and some of the software makers as well coming back communication services higher today. real estate and utilities are weaker nasdaq goes out with a gain of 1% so a mini comeback for the market after yesterday's brutal day. small caps also just barely in positive territory into the close. that does it for me on "closing bell." into "overtime" with scott >> all right, sara, thanks so much welcome to "overtime." i'm scott wapner we're just getting started right here at post 9 at the new york stock exchange in just a few moments i'll speak exclusively to legendary investor lee cooperman on the state of stocks and whether a bottom is in fact getting closer we begin with our talk of the tape and it is all about these markets and the search for something, anything positive to build on do we do it today? we did go down a lot let's ask brian belski he does have the highest s&p target on wall street. he's here with me on set