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tv   Fast Money  CNBC  May 16, 2022 5:00pm-6:00pm EDT

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blend. and so i like the fact that almost nobody, almost nobody is saying that was the low. they're saying it is a low. >> even the ones that think we're getting a bounce suggest that we're still going lower we'll see. santoli's last word. "fast money" begins right now. i'll see you tomorrow. right now on "fast," wall street has home depot and walmart on the clock are rising rates anz skyrocketing inflation starting to take their toll on consumer spending and what is the forecast for the rest of the year plus crude back on the climb prices hitting record prices we have the charts and all of this with china sidelined with covid shut downs are we about to get a new summer surge. and later shares of twitter right back where they started before all of the musk mania started. the battle now over bots how do we get here and where is this going next.
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i'm melissa lee, this is "fast money" live from the nasdaq market site on the desk, tim see moyer, karen finerman and guy adami. and the likes of target, home deport and others starting tomorrow morning and we could get a first real read on how the consumer is handling inflation so what are we watching for in these results? tim, what do you say >> well, walmart is interesting because relative to target, it is actually not very cheap relative to its self-. it is relatively cheap but in terms of who they serve, a lower to middle class consumer not entirely but probably disproportionately hurt by higher energy prices so while this is a sweet spot, i think for the business cycle for a company like walmart, it is a case where i do think that a core customer may be most under pressure here. comps are expected to be about 3% some people think they could inch over that again, inflation in terms of
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food prices is good for walmart ultimately they are the ones that could push people around but also higher food prices means better top line and better comps even if the margins are under more pressure. >> this is a interesting report. after some of the credit last week, consumer credit was up i think in march $52 billion it was up 14% year-over-year revolving credit was up 21%. so when you think about that demographic that walmart serves, it is interesting to see the trend. that one is really important the other one, as far as home depot is concerned, we know that with rate where's they were and the housing going up, people were pouring lots of money into their homes and now all of a sudden forget inflation. the negative wealth effect of the stock market being down 20%. maybe the housing market at least some of the anecdotal stuff that i'm seeing and we have been talking about it on the show over the last month or two, it looks like the housing market is beginning to school. the 30-year mortgage has doubled
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in three or four months or so. so to me i think what comes in this part of earnings season is the most important i think we all breathe a sigh of relief there was no master disasters last month, but despite that the stock market did not perform particularly well during that period so i'm not sure that there is anything these two companies or rest of the retails have to say will make us feel that much better but i think can he could make us feel worse about the consumer. >> aptd wait the quarter closed is later in the season, karen, so we'll have a much better sense of how the consumer is digesting all of the price hikes they've been seeing whether it be from energy or food prices. everything that you pay for, basically? >> right i mean i think it is going to be three months of sort of cloudy data because the first month of this retail quarter is february, which was still very much effected by omicron. and then in march you had sort of the response to the russian
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invasion of ukraine. and that is sort of pulled back people's spending a little bit briefly, maybe and now maybe you're starting to see what things could look like in april so i think it is about the forward-looking, not so much the b backward looking because every company will have some different spin on that. but the forward-looking, i think that is important. but i think to dan's point about housing rolling over, it is -- i agree with that. it is hard to see how it wouldn't if you look at something like rocket mortgage and how much they expect their revenue to be down going forward, it is hard to think that it is going to be great for some of the housing names. but the home builders, i think have somewhat priced that in names like home depot, maybe not and a lowe's which i own maybe not. >> how do you think about that sub sector retail, guy because if you're a consumer and in a house already, i mean,
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you're still feeling all right you locked in that low 30-year fixed mortgage rate. so, at least you're not being hurt by that. >> yeah, and as a sell-off in home depot, the sell-off from 419 i think was the all-time high down to the 285, 290 level. and you go back to 2020, that is where the stock had trouble for the upside before breaking out i think tim would agree and i know he said it, on valuation basis, i don't think home depot has been cheaper in the last decade or so so you could wrap your head around it on valuation and maybe 17.5 times next year's numbers i sort of like it into earnings. i think anything has been priced in and the margins get this stock higher even with the analysts cutting the numbers i think the price is still 360-ish or so and the two things i'm looking at, comps for sure and margins in the form of are they able to pass on the costs to their consumer. to their customer. >> right but i think that a question too,
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tim, is for the consumer going to home depot, if you're paying x percent more for a two by four and a hammer and a bunch of nails, you might not do that home project that you're planning on doing. and i didn't make that up, that is what analysts have said but i thought that was a good point. if you have an elective home improvement, you might say maybe not now. >> i'll tell you what, the two by four and the hammer and nails are not -- i will not be derald by that home project what i think is interesting is that home depot and lowe's have not given any indication that the business has changed or that the housing market has changed that concerns me as an investor. and i was going through some notes, jp morgan in april where they were talking about the positives of the house housing cycle where the consumer and the consumer balance sheet and the wealth effect. nobody has cautioned that rates have risen 100 basis points that
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they're going to rise significantly more if we believe the fed. floor and decor did give a guide to put a shoft adjustment to their guide. so reiteration of home depot and lowe's is tough to expect and i would like them to get it out of the way. to me, that is where we're going to be. their comps will be down and point to weather related, coldest april in 22 years so the headline numbers will not be great. they're not going to talk about necessarily the impact of the housing market but others have and i kind of wish they would. >> i'll just say this, tim, you just hit on something that i think is important investors sentiment or consumer sentiment, too, a couple of months ago, investors thought they had money everywhere. and in used cars, in watching, in digit art, in crypto coins and it all went poof so when you think about the housing mark, i don't know how it sustained it could come in and still be fine but the think the key point is the mortgage rates and i got
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off the phone with a friend of mine who finally refinanced the mortgage -- >> now >> he locked in. 2.75%. that is going back three months. and you know what the mortgage broker and his lawyers said, that is great. this is my last bit of work for a while and you mean for the rest of the day. no for a while because people are not refiing they were putting it into -- when you think there is leverage in the system, sthey were spending at home depot or digital art or guy adami and i think that is gone for now. >> i think you could sigh that inflation is still historically low and the rate of change, karen, in the system, in the past month or two or months, that is a real shock so used to free money and everything at a discount and just high priced everywhere for their own assets that they own in their portfolio
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>> right i think it is sort of now we're in that time where people don't want to open their statements, if they're not online now. for seeing what their ira is or what their match is. but also, sort of like the slap in the face when you get to the gas pump and you're like, wow, that -- and then you start to think, where else are you going to pull back to be able to pay for that but one of the good things about being a home depot or being a walmart is that they're trying to keep the customers prices low and they have the buying power to do is so they're going to push back on suppliers and say i don't care if you're costs have gone up we're only going to take a small increase and maybe they pass it along to the customer and maybe that is even a little bit good for the home depot or walmarts of the world. but they could only do that for so long. so i think in the interim i think inflation is actually somewhat peaking and that the expectation about inflation going down will be
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helpful. >> well as consumers are getting squeezed, home prices apparently are still going through the roof the st. louis fed reports the average u.s. home price in the first quarter was just over half a million dollars. that is a record the one big player in the real estate market expects housing to hold up. joe is blackstone chief investment strategist. great to see you where are we in the housing market at this point >> well thank you very much for having me. and i would say that there is very much the risk out there that conditions soften in the housing space. we've had this steady drum beat of bad news over the last couple of months, over the course of the last few minutes you're talking about the rising mortgage rate and the consumers getting pinched and the negative wealth effect as people are looking at statements and seeing stocks down. and so you are hearing this drum beat the bad news where people are talking about recession odds rising over the next 12 months but i'm of the view there is a longer runway to the economic
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growth here in the united states i think ultimately the fed is going to have to hike interest rates until something breaks but i don't agree with the consensus view that said recession that we're on the edge of a recession now. i think that we've got a longer runway here and it is household balance sheets that are really the source of that tail wind so, i do think that over time housing ends up, i think, having terrific supply and demand fundamentals so that when we do get to a point where something breaks, i don't think it is housing that does. this is not another -- this is not another setup to 2007 or 2008 or 2009 type environment. i think there are risks out there in the economy but in my opinion housing is not one of those big risks. >> it is sort of, though, mind blowing, joe, to think that mortgage rates could go up by this percentage in such a short amount of time without actually cooling the market down by just saying that it is supply/demand
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dynamics that will support everything has there been an additional decrease in supply in the market i mean, how do we think about this it just doesn't make any logical sense on paper at least to me. that you could have this spike in rates and you don't see that cooldown >> sure. i think there is a third dynamic to consider. one important consideration is going to be home price second is going to be mortgage rates. but the third is labor markets and historically housing ends up being more highly correlated to labor markets than it is to mortgage rates and so, what you -- what would you expect to see is that housing activity is going to slow down because of higher mortgage rates but when you think about home prices and if i think about what caused home prices to drop, that is a story of labor markets as long as the jobs market remains relatively healthy, i think housing will as well now, we do have to think about how the jobs market overheating. clearly that is something that the fed is dealing with so i do see some problems down the road. but again, this is not a next
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six months or 12 months phenomenon so i think we could see housing activity slow and certainly we could see home price appreciation -- i think that is going to have to level off but if you think about the factors that are going to cause a drop in home prices, you really have to have, in my opinion, the unemployment rate rising and i just don't see that anywhere in the next three to six or six to 12 months. i think we're still in a rather healthy jobs environment. >> it is tim cool specs by the way. and when i think about what the fed is doing right now with their asset bubble and you look at wealth to income ratios, however you want to look at them, they're staill high higher than 2008 that is the part that concerns me, that the fed understands what it did on the way up and the way down, could the fed be as impactful as they claim they're trying to be because the market has been topped higher
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but part of it is your fed call here. >> and i think the fed will have to go further than the market thinks the market has got the fed wrapping up its hikes by the end of the year. i think the markets may price in one hike in 2023 at this point and i think they have the fed funds rate going to 3% my own view is that the fed will have to extend out that hiking cycle. and i think they'll be hiking well into next year and as a result i think the feds fund rate will go higher. and i think there are going to be challenges in equity markets in my own view i think that valuations in stocks still remain too high and that i think we're going to have to see multiples come down but if i think about the wealth effect, households have wealth from a couple of different sources. you have the savings of the house and then you have your stock and retirement funds and if you look at the difference between 1999 and 2000, when the tech bubble burst and '07-08 when the housing bubble burst, when the tech and the nasdaq bubble burst you have a shallow
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quick recession because relatively fewer people own stocks than own houses so if we do have an issue or a challenge in the financial markets, it is going to impact a relatively smaller number of people because generally housing has greater dispersion so if we're going to look at the catalyst or culprit to the next sort of economic disruption, know, markets maybe, nfts and cryptos that you were talking about as we were coming on, maybe. but very little access in housing. >> so, joe, if the fed is going to keep raising until something breaks does that mean that the housing market could break beyond the 6 to 12 months where you say the housing market will remain fine? >> sure. well for to think about the silver linings here, it is that you don't have a lot of excess in housing you haven't had overbuilding or a drop in credit or lending st standards and people using their
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homes as an atm the way they were in the great financial kries. and it is really that last part where people were tapping their equity in their homes and that caused so much people to go upside down where the value of their -- what they owed was greater than the value of their home they walked away and turned the keys to their homes over and they walked away that negative equity, we're nowhere near that. if we look at heloc, the cumulative use of home equity lines of credit is still 60% below where it was in 2007 and at the same time home equity is at an all-time high. so if we think about the things that are going to break. because you have little excess in housing, i think you end up having less risk so you might see home prices generally flatten out. you might have pockets of weakness where home prices in some regions might fall but the idea of having a national and prolonged drop in housing as the economy eventually rolls over, i
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think is still relatively low probability. >> great to get your thoughts. thank you. >> thanks. joe of blackstone. >> are you buying what jz is selling. >> blackstone is one of the biggest player in the real estate market. so people will hear me say this and say he's talking his book. he is talking his book but you should listen because quite frankly they're some of the smartest people out there in terms of what blackstone has been doing so he's well versed. in terms of the stocks, you look at sherman williams and coming off 20% and whirlpool off their high time highs from a month or so ago valuations are more reasonable now and with housings it supply-demand fundamentals and they -- >> and i disrespectfully disagree i think he's compared too much to the financial crisis that was
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housing related. technology companies are expected to cut and if you think that is relative to where the height demand is or the supply in the housing market, those things will come together apt some point and i don't think it will be a great setup here so to me i think we're good to see unemployment start to tick up and i don't think that is good for home values. >> blackstone. >> sorry. >> and i agree in terms of the declines in the stock market, you have to watch that because there is a cycle it doesn't have a vacuum companies feel it and then they take action and that action might be not hiring as many people or laying people off. anyway, coming up. we are watching the after hours move and shares of video game higher after the details next. an get ready for for high energy trades with paul sankey and the names he likes as cruise n'gonyer cmbli dot awhe. "fast money" is back in two.
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welcome back to "fast money. earnings alert on take two shares are popping despite soft booking and out look for the year ahead and reporting earnings of 95 a
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share. and steve is monitoring the conference call. >> take two shares are up despite the revenue miss and light guidance for the fiscal year and the company is following the same path we saw road blocks and electronics arts did last week now that gaming companies have lapped themselves in comps from the pandemic start to look normal, all three of the gaming stocks hammered this year. take two down nearly 40% on the year online gaming was down 6%, take two blaming that on competition. but we also know recurring online gaming revenue hasn't grown as much since lockdowns are ending and that is where zynga coming in shareholders will vote to approve the $12.5 billion deal later this week and singa will have a larger revenue come from mobile which is where the biggest growth in gaming is happening. that call is still going on and i'll have more >> steve, thank you. tim, i know you're envious of
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his suede. what do you think of take two. >> suede is year round,by the way. i like the story this was a better number than expected they did a great job that. i think that the zynga acquisition may turn to be, synergies are great and there is growth to come from it would they be paying $12.7 billion today or anything close to it. i doubt it certainly relative to its peers and i think it is expensive. eu is a name i long and i prefer and if you look at ww2k and they have content that people are looking to get into and it is also a case where they are gaming more than they were pre-pandemic so the trends haven't fallen off a cliff. >> we have a news alert. leslie picker has the details. leslie. >> there has been trickling over the last hour is the deadline
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for the first quarter and we're painting a picture of what happened behind the scenes that led to significant losses for some of the major equity tech funds that we track during the first three months of the year tiger global was down 34% during the first quarter. a source told me based on the firm's 13-fs, they sold down quite a bit of the portfolio tiger exited affirm, and bhaish, bumble, and cuba software and dual lingo and netflix and pay poll, that is not even all of the names there. tiger also pairing back almost the entire stake in alibaba and sliced in half the stake in amazon and doca sign one area tiger added is doubling the stake in block melvin and d-1 pairing back a lost stakes but less in the tech space. melvin sold some of the advanced auto parts, bath and body works and some travel names.
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d 1 paired back disney and t-mobile. >> thank you leslie which one would you focus on, karen? >> well tiger global is really interesting to me. some of those seemed like they were good sales. it is sort of makes you wonder, wow, what is left in the portfolio to be down as much as they are but they have a gigantic run i like to see, you know, big holders of the faangs. i'm curious were there faang buyers or sellers, i'm guessing sellers since we had the big bounce in january. but other than that, i don't know something like a pershing square would be interesting i know they have reported but i haven't seen it yet. >> guy >> just goes to show you even the smartest people in the room are just getting obliterated in these markets. when everybody was doing well when valuations didn't matter. now look at all of these names without exception, every name on
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that list are stocks that had valuations that didn't make sense in zero interest rates and everybody was focusing when rates go higher. i'll say a name that i think is interesting here amazon is taken to the wood shed i think a lot of people would have signed up for amazon sub-2,200 and we'll see people adding long positions in that name. >> what is your take on baba jp morgan now upgrading the tech sector which just a few months ago or a couple of months ago they said was uninvestable >> look, the reason they are referencing on uninvestable is not because baba and ten cent are not world class tech companies. they are it is the dynamic with cybersecurity, big brother, all of the things that give the chinese government the ability to push these businesses around. and that is really the dynamic to the extent that alibaba, we
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heard this from mark lazry on overtime folks say that i don't have to be here. and as guys would say, when periods especially tech stocks were running, why do i need to invest in china when i'm getting 30%, and 40% other places an that is the sense on china you have the s.e.c. and all of the dynamics that make this very difficult. at some point, and i think enabling on alibaba does make sense. i'm high and long from lower levels and i think it is a case where you've shaken out a lot of big institutions that include some of the smartest hedge funds in the world that we're talking about today. i think we're having the sell-off where you've shaken out just about everybody who is there. >> we're just get started here on "fast money." here is what is coming up next >> refiners looking fine that is the word from a top energy analyst as oil prices continue to jump he'll lay out his picks in the
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space next plus, buries big bet the big short investor taking a bite out of apple. but he's hoping this one falls far, far from the trees. the details ahead. you're watching "fast money," live from the nasdaq market site in times square. we're back right after this. left to “find themself.” leaving you lost. you need to hire. i need indeed. indeed you do. indeed instant match instantly delivers quality candidates matching your job description. visit indeed.com/hire
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don't like surprises? [ watch vibrates ] proactive notifications from fidelity keep you tuned in all day long. so when something happens that could affect your portfolio, you can act quickly. that's decision tech, only from fidelity. welcome back to "fast money. energy the top performing sector in the s&p and oil prices continue to climb higher the stocks dominating the list of 52-week highs occidental and devon energy and let's bring in paul sankey to break down the moves good to have you with us
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how are you seeing oil prices and how they play out into the year and into next year. >> it looks like today we broke out to the upside for people would like to read charts. so that is a big move today. and this week russian oil officially should leave the market in terms of traders being able to buy it we'll see what actually happens there. but there is more crude to come out of the market. and then as you know, it is extremely tight on the diesel side particularly which prices around $160 a barrel, at $50 above crude prices, it is a pretty dramatic environment. not so mention $8 natural gas. so everything on fire at the moment >> it is karen, thanks for being on so how long will it take until we see some supply risk bonds from the u.s.? i know that people -- companies are probably a little timid giving this administration's prior stance, so how long do you think it will take to see that supply
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>> you know, i'm not sure how much difference the administration really makes. it hasn't been helpful with things like the keystone and with the leasing but the main thing that we hear is we're looking for growth in the permian which doesn't need the pipeline or the permits. the issue there is short labor, almost no labor available, no steel or cement. we have the cfo of diamondback that made an acquisition today on last week on the call with me and he was just saying simply there is no ability to increase activity at the moment without simply stealing everyone from another company which obviously would be hyper inflationary. so it is not doing it. so the answer is that we're probably going to see pretty muted growth in oil and natural gas supply this year from the u.s. >> you see valero going to 150 it is like 127-ish now, paul is that your top pick? >> we loved it that is way 110, when it was at 110 it was a great price target.
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but we could go higher here with the way margins are playing out in q2. so, yeah, we have been top pickers as you know from my previous appearances on the refining side. but then again we're also calling for oil to be the s&p 500. so all of them look attractive to us relatively to the market. >> you said 25% of the s&p 500 you think oil will be. >> no, 10% >> 10% i thought this was a huge -- 10%. that is still a big call. >> you could get there but you need the s&p at 500. i think that would be too negative we think you could get with a very bearish s&p, you could push towards 10% in the s&p and in oil. it was 14% at the peak in '0 and 30% of the s&p in 1979 >> all right paul, thank you. >> paul sankey, sankey research. guy adami, even if i get to 10%
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of the s&p, that is a lot of dollars that have to flow into the sectors from institutions. >> this is been a theme that tim has been on. paula zahn back in october, marathon petroleum made an all-time high today north of 95. oil prices could go sideways for next six months and these stocks would i think take that time to continue to grind higher based on that price. valero, we've talked about forever. agree with them there. all of the levered names make sense and i dig that whole beard/mustache thing he has going. a wailer out of a winslow home picture. >> is that a compliment? we're tand you can about valerie and his way to play the diesel shortage, long valero and short trucking and in this case he's calling for a short amazon tim, do you like that? >> i think the market is not efficient enough nor that fair
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trade. i've done a fair amount of trades in my career that i thought were fundamentally correlated and i don't like pair trades paul is a talented guy and come on here with -- and pe pushed him into short exxon and made him a billionaire. so, i understand what he's doing there. and i think the most important point about this sector that is not just that it is underweighted and people -- the dynamics of the s&p under pressure and the energy sector is going to get it there faster. but the 15 to 25% free cash flow yields but then company's balance sheets are so different. eog, pxb, net wash, they have no net debt it is incredible and i think they truly understand whether it is 50 or 75% of how much they are giving back to shareholders each earnings period. and until that changes, i think people treat the companies like at airlines. they don't trust them in the best of times because they always quickly get off sides let's see.
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i think this time is very different. >> coming up, one bad apple, bury revealing a big bet against the tech titan we'll break down what is in store and plus twitter bringing the social stock to levels not seen since before musk made his stake public so what is next for this name. more on that when "fast money" returns.
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welcome back to "fast money. michael bury of the big short fame revealing a big bet against apple and s.e.c. filing out today showing his firm asset management had held against apple of march 31st. the s.e.c. filing showing bury bought shares of alphabet, meta and discovery. dan, i'll go to you, as the options guru among the four of us the four of us. >> let me dial up the heat seeker we have no idea. in mid-march before the fed meeting apple traded 150 and it went up into the end of the month, if they could pull the chart up and it traded almost 180 and then spent the next month and a half going lower and here we are at 145 we have no idea whether he's out of that position i suspect he looked at that sort
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of parabolic move of $30 and said it is an easy short at that point. we were talking about it at the time expectations for the full year given what was going on in china, and theocowns there, and demand and europe and being out of russia and the list goes on and on, and the supply chain issues it didn't seem like that stock was trading at the right lex when it was 180. so to me he probably took that short off. i would be hard-pressed if you had that inclination in late march. >> karen, what did you make of this bit of news >> well, we don't know exact what they are when he took them off. and i mean he's a fantastic -- i don't even know if trader is the right word just investor i guess. but i just love hearing that his long alphabet, long meta i think both of those are attractive even though their down i still think there is value there for sure >> coming up, flying lower twitter dropping hard as elon musk is in a battle of the bots
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with the social network so where does the deal go from here we'll debate that next and check out the climb in big pharma lilly and merck in the green as drugs push the shares higher we have the details when "fast mone rury"etns r crazy day? of course—you're a cio in 2022. but you're ready. because you've got the next generation in global secure networking from comcast business, with fully integrated security solutions all in one place. so you're covered. on-premise and in the cloud. you can run things the way you want—your team, ours or a mix of both. with the nation's largest ip network. from the most innovative company. bring on today with unbeatable business solutions from comcast business. powering possibilities™. (vo) this is more than just a building. it's billion-dollar views. perfectly located. an inspiration. and enough space to start an empire. loopnet. the most popular place to find a space.
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welcome back to "fast money. check out twitter getting hammered in today's session. social media stock has now lost all of its games since elon musk announced his 9% stake in april. it come as mid more drama between musk and parag agrawal over how many bots are on the platform so does anyone know how to calculate the numbers and how could the company be valued if there is such a big question over it. for some answers let's bring in gene munster so here is the question. parag said substantially below 5% musk said 20%. where do you stand 5% is what the company has provided the s.e.c. in many files over many, many quarters my answer is 5% puts context around it. but do you trust management. the central question is not can
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you calculate, estimate the number of bots, estimate the number of bots, elon is correct, that you cannot accurately report the number of bots. that is true it is impossible but it is possible to get an estimation based on internal and external data and so the answer to your question what it comes down is that is it 5% or 20%, who do i trust in this case, i trust twitter and the reason there is a powerful advantage to get a better price. >> so here is the question for me, gene, as least in -- if it is below 5%, versus 20%, does that change -- how much of that change the valuation of twitter in your view. >> you could take 15% off the valuation is you take the 20% number and elon said that it is 20% or greater. and so, in this case, so the
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answer to your question, if the number was 20%. >> that twitter was lying about this and it is 20%, you take whatever the market feels the value is and subtract 15% to answer your question i think that ultimately, i think this is a very astute play by elon to essentially renegotiate this in the public markets >> let's say it doesn't get renegotiated and he walks away what happens to twitter. no white knight has emerged, so does it sort of languish >> it languishes in a very bad spot i think this is probably $30 less per share i think that elon will come back and just excuse the silliness of this but probably at a $42 bid on this and whether or not that that gets done at $42, the investors better take it at $42 because it will languish i think what elon has done has injected a sense of just lack of strength from twitter management here
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i think that investors would be spooked if he went away. >> gene, thank you always good to see you gene munster, loop ventures. dan, i know you have a lot to say about both. >> gene just used the term astute he's a beg tesla bull and been right for a while but i'm a tesla shareholder and see the way he's interacted with another publicly traded companies and disclosures and publicly trying to do this after he had all of the opportunity in the world, he was in discussions with the board to talk about some of these things i don't know if it is astute i think there is another word if we want to pull a scrabble bag out. it just seems unsavory to me that is my two cents. >> we said there is key man risk involved with elon musk, but is it the opposite now, guy, where elon musk could be seen as a liability because that is sort -- that sort of one piece that out there, is that he's distracted and doing what he's doing with twitter, tesla shares
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have seen a decline. >> well, just for full disclosure, i mean i was the one that thought twitter would get done north of $54. so that was wrong. but i was very concerned about tesla stock. i know this will take us back to the day they reported earnings the stock closed around a thousand and that was the quarter that every tesla bull had been waiting for for three years and they got it. stock traded up to 1080 and now flirting with 700. so my concern is what happens to tesla and quite frank le here at 700, it is the precipice of seeing the level, and 600 and then quite frankly i don't know what happens from there. so i think your spot on in your assessment where he potentially went from a positive quickly to a negative for the shares. >> well options traders don't seem to be feeling optimistic about this potential deal. let' bring in mike khouw to break down the action. what are you seeing? >> yeah, well we've been seeing a lot of heavy options volume in
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twitter for some time now. ever since the deal was announced. today it traded about 1.4 times at already elevated put volume and the most active contracts were the may 35s we saw 35,000 trade for about 54 cents. it should be said that a lot of those options were actually big institutional traders who were rolling down the may 45 puts which they had previously bought and roll them down to the 35 so this is a group of options traders who are already quite skeptical of the deal going into this they bought a lot of those for less than a dollar and sold them today for $6.20 or so. so they've already made some big bearish bets and pressing them now. >> is the coor rollary to this, mike, a lot of bullish activity in tesla >> no. no, i wouldn't say that. i think this is really a story about twitter shares alone that is that if somebody goes into buy a property and they see
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the disclosures and walk away from the deal, next buyer is probably not going to come in and pay the same price. >> for more "options action," tune in 5:30 eastern time on friday and coming up, is this trade the right prescription for your portfolio. we have the details right after this ♪ ♪ wow, we're crunching tons of polygons here!
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from the most innovative company. bring on today with unbeatable business solutions from comcast business. powering possibilities™. welcome back to "fast money. news alert on berkshire hathaway latest holdings. leslie picker has the details. >> it was a very busy quarter for berkshire hathaway a lot to get to here first of all, we want to share that they sold almost the entirety of verizon. down from holding $8 billion worth of that stock at the end of the last year also berkshire hathaway taking a new sidable stake in citigroup worth $3 billion while dissolving a small amount left of wells fargo in that portfolio. a huge bump in activision blizzard so hold for man $5 billion worth of stock at the end of the quarter that was purchased as a merger arbitrage play as activision awaited approvals for the
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$69 billion take over by microsoft. they mentioned during the shareholder meeting a few weeks ago, buffet said they hold 9.5% of the company so they purchased more stock since quarter end since these 13-fs revealed and huge boost to chevron. the $26 billion worth of stock which we also had known since that time, sold in pharma names as well during the quarter dissolved a stake in abbvie, bristol-myers squibb and royalty pharma about by 83%. so a lot of selling in the pharma names and purchased 8 million more shares in apple so a lot of moves this quarter by berkshire hathaway. >> thank you shares of eli lilly topping the tape the newest type 2 diabetic drug guesting the fda stam of approval they are expected to bring in
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$14 of a fresh all-time high so a big pharma guy, where would you be >> despite berkshire hathaway getting out of the names, bristol-myers had a 17 year double top from '99 to 2016. it is recently broken on the upside valuation is still good. full disclosure my wife works for merck. and eli lilly, despite the fact that it is a whisper of its all-time high is still compelling throw amgen in the mix, and i think you have to stay with the big cap pharma names. >> and karen, $3 billion in citi, that is a big stake. >> that is interesting i mean he's been an interesting bank investors over time we saw him do preferred in the great financial crisis that were home runs for him. so i find berkshire's 13-f filings more interesting in down
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markets than in up markets so as a citigroup holder, i am encouraged and wells fargo he kind of blew it. i think he sold -- not great usually he's pretty good in the bank >> citi is up 1.5% after hours come up at 7:00, a special edition of the news with shepard smith. he's live in buffalo reporting on the deadly shooting there we'll be right back. esg is responsible investing. who's responsible for building esg into your investments? at pgim, the pursuit is on for outperformance. as active investors, to outdeliver with customized strategies, integrating esg best practices into our investment decisions. as asset managers and fiduciaries, to outserve, with our commitment to better esg outcomes. join the pursuit of outperformance at pgim.
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final trade is sponsored by interagentive brokers sh the professionals gateway to the world's markets. >> time for the final trade. let's go around the horn tim seymour. >> stay in the energy space. pioneer natural, they've paid almost a 10% dividend yield and think they'll continue to be able to pay that. >> chairwoman? >> yeah, i stay in the big cap pharma space, i like merck not just because linda works there and also this year they did spin off so it is even better than it looks.
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>> husband of linda? >> paul sankey is a stud i'm staying on the paul sankey trip, mpc. >> dan >> everything is better with linda. and i like that take two quarter and i think the stock is down enough good balance sheet i think it is relatively cheap >> all right anthks 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, i'm cramer welcome to "mad money. welcome to cramerica i'm trying to make you money my job is not just to entertain you but to educate you you know what, i have been thinking all weekend, this is a market that deserves to be

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