In short
Podcast Summary: CNBC's "Fast Money" Episode on Tesla and Bitcoin (11/9/23)
Episode Overview In this episode of CNBC's "Fast Money," hosted by Melissa Lee, the discussion revolves around the recent performance of Tesla stock, a bearish analysis by HSBC, and the ongoing rally in Bitcoin. The episode features insights from a panel of traders, including guest Danny Moses, known for his views on market trends.
Key Topics Discussed
- Tesla's Stock Performance
- Tesla shares dropped over 5% following a downgrade by HSBC, with a price target set at $146, representing a potential decline of 30% from current levels.
- Discussion on the bearish outlook due to increased competition, especially in the Chinese market, where companies like Li Auto are gaining traction.
- Bitcoin's Rally
- Bitcoin prices are surging towards $40,000, marking a 36% increase in Q4.
- A debate on whether this rally is sustainable and potential factors influencing its momentum.
- Investing Strategies
- Danny Moses presents a bullish stock pick that he believes has potential upside, diverging from his usual bearish stance.
Detailed Notes
Tesla's Performance and Analysis
- Recent Trends
- Tesla's stock is down nearly 28% since July, raising concerns among traders.
- The negative sentiment is exacerbated by HSBC's analysis indicating Tesla may not be able to maintain its growth and margins due to rising competition.
- Market Dynamics
- Analysts highlighted that nearly half of Tesla's cash flow valuation relies on future projects (e.g., battery technology, AI).
- Concerns over high interest rates could affect consumer purchases of Tesla vehicles.
- Panel Discussion
- Danny Moses maintains a bearish position on Tesla, arguing that it's now perceived primarily as an auto company facing stiff competition.
- Other traders express skepticism about Tesla’s long-term growth, citing significant pressures that could lead to a valuation reassessment.
Bitcoin's Momentum
- Current Surge
- Bitcoin's recent price increases are attributed to improved sentiment and potential ETF approvals.
- The cryptocurrency's market has seen significant inflows, raising optimism among investors.
- Future Prospects
- Guests discuss the implications of potential Bitcoin ETF approvals on market dynamics.
- Institutional interest in Bitcoin is growing, with expectations for increased retail investment due to easier access through retirement accounts.
Trading Insights
- Danny Moses's Bullish Stock Pick
- Moses reveals a stock with significant upside potential, pointing to structural changes and opportunities within the sector.
- Market Sentiment
- The panel discusses broader market trends, including reactions to treasury yields and economic indicators that could influence stock and cryptocurrency performance.
Closing Remarks
- The episode concludes with a reminder of the volatility in the markets and a cautious approach towards both Tesla and Bitcoin as they navigate through competitive and regulatory challenges.
Key Takeaways
- Tesla faces significant challenges, including competition and market sentiment shifts, leading to a bearish outlook among several traders.
- Bitcoin shows strong rally potential, bolstered by institutional interest and possible regulatory advancements, but faces skepticism regarding its sustainability.
- Danny Moses highlights the necessity for investors to remain vigilant and adaptable in the current market environment, especially in tech and financial sectors.
For More Information: Visit [Fast Money on CNBC](http://fastmoney.cnbc.com) for additional insights and resources.
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Transcript
Automatic transcript. May contain errors.0:01Live from the Nasdaq market site in the heart of New York City's Times Square this is fast money Here's what's on tap tonight. Tesla throttled late July. The stock was closing in on 300 bucks. Since then, it's dropped nearly 28 percent. And a new call from the street says shares could drop even more from here. A bull bear battle royale coming up. Plus, Bitcoin Bonanza, the cryptocurrency on a heater of late, up over 30 percent in the last 30 days and more than doubling this year. Will this rally last? We'll debate that. And later, cue the NBC on NFL theme music. One of the traders behind the big short is here with us on why this mystery stock could go all the way.
0:40The name and the trend he's so bullish on ahead this hour. I'm Melissa Lee. Coming to you live from Studio B at the Nasdaq on the desk tonight. Karen Feinerman, Dan Nathan, Guy Adami, and sitting in as a guest trader tonight, Danny Moses, founder of Moses Ventures. We're going to get more at the end of the market's long winning streak and that dismal 30-year treasury auction in just a minute. But we start off with the biggest drag in the Nasdaq 100 today. Tesla dropping more than 5 percent, its worst decline since earnings last month. The stock nearly 30 percent off its highs of the year. The move coming after analysts at HSBC initiated coverage of the stock with a reduced rating, slapped it with a$146 price target.
1:18That's 30 percent lower than today's close. Add to that increased competition in China. Beijing-based Li Auto posting sales growth of a whopping 270 percent in its latest quarter. It also posted better profit margins than Tesla. The stock has well outperformed Elon Musk's company over the past year. But is China still an opportunity for Tesla or are the hurdles too high to jump at this point? There are many people who have been bearish of Tesla on this desk. Danny Moses, this is your number one short here. Yeah, it still is. I was here July 18th, I think, right before they reported their second quarter.
1:53And the quarter was OK, but they did miss second quarter deliveries. And then third quarter, obviously, CFO stepped down prior to that and then missed those numbers. And I think now it's really become a show me story in terms of it's an auto company. And I think people are going to start to lose patience over time here for what this company is going to be over time. And so I don't think it was down that much because of the downgrade. I think it was an excuse. A lot of stuff going out there, Cybertruck delivery, et cetera. So I'm still short the name. Isn't there something that we've learned from GM and Ford in their latest quarters?
2:23And that is the EV business is much tougher for even established OEMs. So why doesn't that bolster the Tesla story? They are the ones doing it and doing it profitable at this point. The other side of that coin is they still make automobiles that people need to find. You're not walking into your local Tesla dealership and saying, here's 65 grand. Give me my car. You still have to finance these things. And even Elon Musk talked about higher rates being a bit of a drag. And we can't do this. I understand. But if you were to back out that$103 print from December of 2022 and just looked at this move from October of 21 to where we are now, stocks down 50 percent.
3:01And it's not coincidental that it top ticked right before the Fed started to raise rates. So say what you want. Company now has cut prices six, seven times. Margins are going to be impacted. And I think we're starting to see it now. Yeah, I think that's really the central point. Part of their story was their margins were unlike anybody else's. And it traded on this really high multiple. So if those margins compress, that margin, that multiple should also compress, and you get this sort of double whammy. And, I mean, we're talking about, are we seeing the whole idea of the EV adoption slow down in general as well, and then just rates higher, multiples lower?
3:42Yeah, it's interesting. So looking through this very detailed report from HSBC, you know, I think this is the most important point. Almost half of our discounted cash flow valuation of Tesla comes from businesses that will not generate revenues and profits until 28 estimate. OK, storage, solar. Well, those do. So here's the ones that are not generating revenue until 2028. OK, it's this optimist humanoids. It's robots. OK, it's Dojo supercomputer. It's fully self-driving. So those other ones are. And so I guess the point, and I think this is what kind of Danny's getting to, is if right now it's a car company, you know what I mean?
4:17And it's fine that if people believe in all those other advanced technologies and Elon is the one to push those forward. And he probably is the one to come up with the best robot or come up with the best supercomputer or whatever. But right now, if you were paying 600 billion or you were paying, to Guy's point, in late 2021,$1.2 trillion in market cap for that, There's a lot of things that have to go really well, and most of which the adoption for electric vehicles here. You need to keep to maintain share and grow share and make it more profitable. But then you need to be able to do what they hope to do in China.
4:51And so right now, just the competition and the pressure on pricing and their inability to kind of create the sort of elasticity that they thought they could do by the six price cuts over the last year and a half now. It's not materializing, you know. And so to me, I still think it's overpriced. I don't have a position in it. Every time we see Danny on the show, he comes and says, listen, I do think it's a short because right now it is just an EV car company with a lot of competition. Just for the record, I was planning to be on the show prior to Tesla being down, prior to the market being down.
5:21I tend to find myself on here from time to time when that does occur. But I do think, like I said, I do think for now it looks like an auto company to me until all these things are on the come. Let me ask you, how long have you been short Tesla? Off and on for five years, six years. Have you made money overall? I think I'm very close to this point. I mean, I was down this year. I had a nice move down. I didn't take enough off the same. This is the time. This is it. This is it. This is it to me because I don't know why it's Magnificent Seven anymore. They're out as far as I'm concerned. You look at the seven companies that we talk about.
5:48I think it's Seal Team Six on Veterans Day. Well, that's fitting. Seal Team Six. Seal Team Six. I think they're out because it's an auto company. We are what we thought they were. See, Danny, that's what we have in mind. It comes up with clever things. Right. Who's Dan's favorite band? Do you know this off the top of your head? His favorite band? You should know this because we played the music. All right, his second favorite. Pearl Jam. Pearl Jam. Somebody's in your ear. And before we started, we heard the song Black, which is, by the way, probably the only song you need to listen to. I mention that because Gary Black, who was on this show.
6:15Yes, he was on this show. A couple weeks ago. See what I did there? That's how I tie it all together. He put out a tweet talking about how if you back out Dojo and Optimus and FSD, you get$90 a share in terms of the value of the EV business. By contrast, they have it valued at$300. This chasm continues to grow in terms of where people are. And my sense is a guy like Dan Ives, who's been, you know, the axe in the space. He's going to sort of come out with a bull case in terms. It would be great if we could have him on and talk about Tesla. Yes, we will very shortly. Well, I'm just saying. But I do want to ask anyone question before we move on to this.
6:52It's$209 right now. So at what price do you say, you know what, I've made the money. I'm good. Where do other companies trade right now, Guy, on a multiple basis? Listen, I know we're going to talk to Dan in a second, but I think if it gets back below 100 or towards 100, it'll probably take some off. I think it's going to$50. $50. I could make a better. Listen, OK, and I've been. Does the world collapse around it as it goes to$50? I've said this whole cycle that we'll know that the market's corrected when Tesla finally caves, when Tesla finally gives in. I've nothing against it. I just think it's being valued incorrectly.
7:23I think it's an auto company. Listen, I think it goes back to what I was saying about those other parts of the business. Like, again, I think if it goes down to$100, which it was trading at in January, it's probably a buy there. You know what I mean? You weren't pressing it at$100 in January. I wasn't. But I started when it got back to, like,$140 before that Q4 print in January. And I think the most important thing, every quarter that they have reported this year, the fundamentals have been deteriorating. It's that simple. So there's no reason to be buying it here. There's going to get lower levels.
7:51Clearly, four out of four of our traders tonight are negative on Tesla. So we had to bring in a pinch hitter here to play the bull. Our next guest has a$310 price target on Tesla. That is nearly 50 % upside from here. Let's bring in Wedbush's Dan Ives. Welcome back, Dan. Yeah, great to be here. Good to be here. Great to have you. Should it be kicked out of the Magnuson 7? Does it go to 50? I mean, like, where do you start? I mean, I think six to nine months from now, the stock has a three in front. I think it's back to above 300 as ultimately, I believe this is more of an air pocket that we're seeing from a growth perspective.
8:26I think margins start to trough out and going into next year, I think numbers conservative. And the sum of the parts, as Dan talked about, I think when you look at battery technology, FSD, at times I could argue it's probably one of the best AI plays out there. To me, this is more of a table pounder opportunity rather than time to hide in the cave. Can it grow? Can it gain market share? Can it achieve scale if China is weak? If there are issues in China, I mean, if Li Auto is really, I mean, It had a very good quarter. It reached 100 ,000 units. That's the point when Tesla started making it work, 100 ,000 units.
9:03And it's at that critical mark now. So maybe it's poised to sort of, you know, really win the market there. You raise great points. Moses, you know, obviously raised great points. I mean, I just got back from Asia. You know, I was there for two weeks. In my opinion, the China story, the cuts they've done, that's the strategic poker move they needed to do. No doubt, demand softened. But I do believe we're starting to see some equilibrium. Where I look down to next year, you look at 2.3, 2.4 million units. 40, 50 % of that needs to come from China. So to your point, no doubt, China is the hearts and lungs of the Tesla growth story.
9:37But it goes back to, look, the bears have hated this. If you go back five years ago, three years ago, and I get it. They view it as an auto company, as Danny talks about. I view it and have always viewed it as disruptive technology company, which is why I view the sell off here and a lot of the hate as more the opportunity to own it rather than the time that there's some sort of, you know, fire in a crowd theater. No hate here. All love. But you know what? I think Elon Musk doesn't love the fact that interest rates have been going higher. He made a point of talking about it at length a couple of weeks ago.
10:08How important is the bond market to the Tesla bull story? I mean, look, Musk called it out. And again, it goes back to that was a disaster conference call. We talked about that, just the way that was handled. Of course, it's very important because the price cuts, essentially, nothing even happens to that relative to the consumer. And I think as Nathan's talked about, ultimately, you need to see that come down. You need to see the China story stabilize. You have a lot of competitors come from all different angles. But if you look at Lucid and others, it's very hard to scale. And I think it just continues to come down.
10:40it is still Tesla's world and everyone else is paying rent in electric vehicles. So if you look at the gross margin part of the story, where do you think that's going? And what do you think is the right multiple, at least to think about, you say it's a disruptive company in many fronts, but the auto business alone. How do you think about that? So I think from a gross margin perspective, I think it troughs out over the next quarter or two. I do believe 95 % of the price cuts from the rearview mirror. And I look from an auto, if you actually look at the EV business, I think the EV business is worth$250,$207 per share.
11:14Then you start to look at the sum of the parts, the battery technology, FSD, and what I view is the supercharger now with them essentially being de facto in the U.S., that's another$30 to$40 per share. That's our view as a disruptive tech company, not as an auto company. Let me ask you a question. How patient are investors going to be? A lot of the things have been on the come for a long time, right? And so CFO resigning to me, who's been there 13 years, kind of got passed over. It's not a big deal. I don't know what your thoughts are on that. But to me, when you see something that occur, I'm not saying there's anything nefarious that's occurring, but that's a big deal as far as corporate governance and so forth.
11:47At what point, if the economy does start to slow away from Tesla, which they're going to be impacted by, which Musk has said rates are hurting, are people going to say, yeah, you know what, Cybertruck, maybe they're not going to deliver as many. Maybe the sentiment turns. I just feel like we're going to hit one of those air pockets. Yeah, and to your point, look, Zach leaving was a gut punch to the credibility of the Tesla story. Because he was one, especially from an investor perspective, many relied on him leaving. There's definitely a void. I think he even saw that in the conference call. But it comes down to Cybertruck, November 30th hits.
12:16You want to start to see vehicles actually delivered. Can you deliver? Okay, we're talking about$200 ,000. Can you deliver$50 ,000? Can you deliver$75 ,000? What that does to the actual model. It's important because then it's the drum roll. you need to see a sub-30K vehicle come that's going to be built out of Mexico and ultimately probably another vehicle that comes out later next year. So these are important parts of the story. And I do view it's a little fork in the road time, but we've been there before with Tesla. And I view this, it's a bit white knuckle. And you'll see like today, many kind of, you know, I think you're definitely seeing the sentiment right now and nervous.
12:54But I believe you sit here six, nine months now. This is more of an air pocket than the time that this actually starts to cascade. So, Dan, we haven't been here before. So if we're going to go from their expected 1.8 million deliveries this year to 2.4 next year, you just said 30 to 40 percent of that has to come from China. They have 10 percent market share in China. So they have some local manufacturers are eating their lunch at a time where China is putting export restrictions on graphite. Right. Like the list goes on and on. And we haven't even had the recession to Danny's point here. So my only point is that they may not do in China what they did here in North America or Europe.
13:32And that blows a huge hole through the valuation story because they've spent so much time and energy really setting up to get to 50 percent market share or whatever. And they're never going to get there in China. Yeah. Me and you have talked about that before. And that and that is I believe that is really a key to the bull bear story here. We believe China, they're actually going to be able to gain share. I think the price you're seeing stabilization there, I do believe from a scale and scope perspective, it gives them significant efficiency, especially from battery technology, that that's going to be important even from a margin perspective, 25, 30 percent higher margin for every car they sell in China versus the U.S.
14:08But it comes down to backspin against the wall before in China. And I believe this is going to be a prove it story that they're going to be successful on the other end. That's that's our view. And that's that's been key of the bull thesis. Look, when you look at the China story for Tesla, for Apple, you know, that's always sort of been the albatross that you're fighting. This is the last we're going so long. But in terms of China, in terms of how much of the stock is China, do you discount that at all for geopolitics, given where we are right now? Look, it's that. And again, just getting back from the region, like it's definitely clearly a nervous period.
14:44But I do believe, at least for right now, contained. I mean, I think there's some that's maybe in the stock. But if I look at how it actually plays out, unless there's a further black swan event, at least for right now, bark's worse than the bite. And that's sort of been our call on Apple as well. Dan, thanks for coming by. No, thanks for having me. Dan Ives, Wedbush. All right, so we're going to goodbye the guest, even though he's sitting right here. Can I just say one thing before we go by him? He, this wardrobe, ridiculous. I mean, it's in a good way. Salmon. And he's got like, you like his fit.
15:15That's what the kid's fantastic. Anyway, sorry about that. So even while he's sitting there, I'm going to ask you, what is a part of the argument that you disagree with the most? In terms of the bulk case. Okay, so stabilization in China. And again, these price cuts, I do think if the margins are the story, you're going to have to make up for it in terms of the demands got to be that are offset, declining margins. And I'm not sure it will be in terms of the consumer going forward and with interest rates where they are and where I think they're going to go. All right, let's get to the markets now.
15:47The S &P and Nasdaq's long winning streaks coming to a close as markets turn sharply lower following a weak 30-year Treasury auction this afternoon. That sparked a spike higher in yields with the 10-year jumping back above 4.6 percent and the 30-year crossing 4.8. Add to that comments from Fed Chair Jerome Powell, who said he is not confident that the central bank has done enough to bring down inflation. It's also worth noting Chair Powell was ushered off stage at today's IMF conference in Washington as climate protesters overtook the stage. Powell, not happy with the interruption, had some choice words to say.
16:22Thank you very much. Thank you very much. Thank you.
16:31Just close the door.
16:36By the way, you might think that we did that as a joke, but we actually had to bleep that out. He said it. He said it. He said it. He said it. But this really shows you, because the move was really on the back of that auction, that rates hold the key to the direction of the markets. Everyone's a bond auction expert now, right? Everybody's been watching. And I think there was a large short position, obviously, in the bond market for the last few weeks, which has now been covered. And I think that people got offsides on that type of positioning. I think we saw evidence of that today. There's no shorts left to buy these.
17:07So people are learning what win issued is on bonds, what a tail is on bonds and all these things. But the bottom line is, I think that the rate moved lower to me is because the economy is slowing in general. And I think the trap is that people buy the stock market when rates are going down. It's just a reflex. And I think that's a trap. Dan? Yeah, I mean, Guy's been saying this. I think, you know, if you rates accelerate and they go back through 5 percent in the 10 year, right, like that's not going to be like great for stocks. And if they go lower and they go like much lower fast, like there's got to be something going on that's probably not going to be good for the economy, which shouldn't be good for the stock.
17:41So I just think that the rally that we've just had, 6 percent in the S &P and, you know, 9 percent in the Nasdaq, I just think it pulls forward whatever excitement, you know what I mean, like that you have in the near term. And, you know, like estimates are going to be coming down for 2024 earnings in the S &P. It's just going to happen. And so we're going to have to start thinking about valuations very soon. Coming up, the obesity drug battle is heating up. Shares of Eli Lilly retreating from yesterday's record, while AstraZeneca bets big in a different way in the space. All the details from the GLP-1 race next.
18:10Plus, Trade Desk Tanks shares a digital marketing company plunging after giving weak forecasts. We'll dive into that quarter straight ahead. Back in two.
18:23ZepBound has the highest efficacy we've seen in an approved drug so far, 20 % weight loss at the highest dose. So I think a lot of people are waiting for this, a lot of physicians, a lot of potential patients. We'll start shipping, as you mentioned, before the end of the year, and we expect a swift uptake and ramp. That was Eli Lilly CEO David Ricks on CNBC in just the past hour discussing the company's newly approved obesity drug ZepBound. The company, the stock, pulling back from the all-time closing high it made yesterday, falling 4.5 percent for its worst day since September 2021. That move coming as AstraZeneca announced the deal with the Chinese pharmaceutical company, Ecogene, to license an experimental oral GLP-1 pill, which a company says could reduce side effects associated with Lilly and Novo Nordisk injectables.
19:11The drug is currently in a phase one trial, AstraZeneca closing almost a percent higher in the back of that news. The reversal was really interesting. That's what we wanted to highlight. Unbelievable. Two times normal volume mean sell the news type of event without question. I think Deutsche Bank initiated the space with neutral. So there are a lot of things working against it. I will say this again, probably for the hundredth time, we have seen moves like this before and Eli Lilly to the downside over the last year, year and a half. Every single one of them has looked terrifying. The story's over.
19:42The stock's going back to zero. I don't think that's what's going to happen here. I think every pullback has given you an entry point. And I think this is what we're about to see again now. Yeah, I agree. I mean, it looks like$27 looks like a big move. It's actually not so big of a move considering the run that it's had. I agree. It's a sort of, you know, buy the rumor, sell the news. But I do think the story is still very much intact. And I sort of wonder, though, should we be looking at some of the we talk about all these sort of collateral plays, are they more interesting? Is the risk reward there more compelling maybe than owning the stock?
20:16Do you think that, you know, we've seen it play out in terms of, you know, device makers, in terms of insulin device makers, you know, all sorts of different ancillary sort of businesses that might be impacted by people losing a lot of weight. Do you think the trade has played out in the insurance business? No, I don't. What do you think the impact would be? People live longer. Right. Yeah. Therefore, their life insurance. with fewer things to be covered, like cardiac events and, you know. Oh, you're talking about health insurance? Health insurance. I'm talking about life insurance. Life insurance, okay.
20:46Yes, that I haven't really thought through. But health insurance as well. You know, it's interesting. So if you look at the estimates here, and Guy's mentioned the valuation in Lilly, but he's also mentioned that you buy every dip, or every dip has been a buy this year. Expectations for 86 % year-over-year earnings growth next year, and on 16 % sales growth, right? So we keep seeing all of these estimates for what these drugs could be. And I just say to myself at some point, right, like that price advantage or that price take that they can have. Right. There's so much competition coming on. Like the stories are going to be.
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21:16Yes, all these studies, they're going to be prescribed for all these different conditions. But it's also going to be a lot of different competition that's coming online. So I just wonder if like this is probably as good as it gets to talk about the sell off in the last day and a half or so. It was kind of expected, the news, and it might be a sell on the news, a really expensive pharma stock that obviously is right in the cap bird seat for a huge mega trend. But everyone else is coming forward, too. Coming up, trade desk tumbles. We've got a live report next on what is sending shares crashing lower.
21:45That trade next. Temperatures, meantime, may be cooling, but no one seems to have told the crypto markets. Could Bitcoin and Ether avoid another crypto winter, or is there another coming, crash coming? We are watching Fast Money Live from the Nasdaq Markets. We're back right after this.
22:10Welcome back to Fast Money. We've got an earnings alert on Trade Desk. Shares plummeting after hours on a week forecast. Steve Kovacs got the details. Steve. Yeah, Mel, it's down 28 percent. So shares are of Trade Desk reeling here after hours after reporting its third quarter earnings. Top line and bottom line beat is the good news, but traders focused more on current quarter revenue outlook, which came in below estimates. Spokesperson for the company telling me this light guidance was due to some, quote, transitory cautiousness from specific advertisers related to recent strikes in the auto and entertainment industry.
22:43Shares down nearly 30 percent now after hours, but still up over 30 percent on the year, Melissa. All right, Steve. Thanks, Steve Kovach. blaming it on the strikes, which is a first, I think, that we've heard from in the advertising industry. You look skeptical. Using the word transitory, that didn't go well for you. I don't know if I would use that at all. That's a big market cap to get hit. And I've been saying if you guy down or miss, in this case, they made it, guy down, you're going to get punished in this environment. I wonder, though, I mean, I'm not close to the name, but just the idea of a miss on a strike, two strikes, right, that are now over.
23:18I mean, Metta had the same response. Meta talked about, you know, the Middle East situation and some caution and then has fully retraced that. I wonder if this is just way over. 19 times sales, right? Trading 70 times earnings. This is an 80 percent gross margin business. You know, sales expected to grow 20 percent a year. I mean, it's a good business. I mean, like but you nailed it. I mean, every advertising model we heard in this earnings cycle before the tune changed a little bit last week was this caution or lack of visibility on ad spending. And again, you know, we've seen these like, you know, lots of job cuts by lots of companies.
23:52They're kind of, you know, put through price cuts or price, you know, raises where they could. And then what do they do? They're going to cut advertising a little bit. So that's what's going on. Forty five, I think, was a low back in January. It's it is expensive on that metric for sure. But there's going to be a place where it actually is step in and buy the stock. I don't think you listen. You didn't see the capitulation during the day, obviously, because where it is now. But you get a day where it trades thirty five, 40 million shares, which you might get over the next week. and it trades down in the mid-40s, this is when you close your eyes and say, you know what, the worst might be behind it in terms of stock price.
24:24All right. Coming up, we are getting back in the crypto groove. Bitcoin and other tokens soaring over the past few weeks. But can prices keep climbing? And the latest on a potential Bitcoin ETF straight ahead. Plus, we are watching Wynn after its latest earnings reports, the number out of the quarter, and how one of our traders is going long in the betting space. Ahead, Fast Money is back in tune. Missed a moment of Fast? Catch us anytime on the go. Follow the Fast Money podcast. We're back right after this.
24:57Welcome back to Fast Money. Stocks snapping their longest winning streaks in two years. The S &P and Nasdaq falling nearly 1%. The Dow dropping more than 200 points for its second loss in a row. Shares of Disney closing nearly 7 % higher after its earnings beat last night. The company expanding its cost-cutting plan by$2 billion and adding 7 million more Disney Plus subscribers, bringing its total number of users to more than 150 million. And take a look at some other after-hours movers. Unity Software, Plug Power, and Illumina all lower after their results and guidance. The Disney move was impressive.
25:32Should be. I mean, we talked about it last night. Carter Worth actually had a trade in this, right? And I know Dan Nathan did as well. The fact that we, again, traded down to that 79 level in the end of October, the same level we traded down to in the beginning of October, that was a sea change in terms of lower lows and lower highs. And now here we are at$90. I think the stock, but for, go ahead and make a funny joke there, Dan. For sitting. Exactly. The broader market, this is a$93 stock. And quite frankly, on a benign tape, this stock can still go to$98. That's the level I said last night. Good for Disney.
26:04I think people behind the eight ball, they're going to start to play catch up. I think it goes higher. Those are all technical reasons, though. Yes. I mean, for the. Well, hold on. Yes. Mostly for technical. But I mean, you know, cost cutting, adding two billion dollars to cost me free cash flow. Bob Iger said that they're moving from fixing mode to building mode. Right. Are they are they in building mode? Are they not in fixing mode anymore? Do they not need to fix the legacy media? Real quick. The free cash flow number was great. And the fact that they potentially reinstate dividend, I think.
26:32So I think. Yeah, I think it is going from fixed to build now. But that's just my we'll see. Well, free cash flow when you're on strike and you're not making content. That's helpful. So that's the bright spot that you see. Well, I mean, I think they're trying to do the right things. I agree. I don't think legacy media is clearly not fixed. I don't know if they have a plan. We just don't know exactly what it is. We don't know exactly what ESPN will look like. Right. I don't know. But great. I mean, I guess the bar was low. That's true. Yeah. All right. A crypto ETF is our move of the day. The ProShares Bitcoin Strategy ETF trading at its highest level since June 2022.
27:08The fund capitalizing on Bitcoin's comeback. Bitcoin Today hitting its highest level since May of last year. Let's bring in our next guest, Meltem Demirrs of CoinShare. She is calling for Bitcoin to go higher. Meltem, you there? Good to see you. I'm here. Good to see you. It's the season of the most hated rally. That's what I call these times. It really is. So many people wanted to believe that it was dead. And yet the prospect of the Bitcoin ETF. And as I understand it, there's a window that is opening for possible approvals for this Bitcoin ETF. Are you expecting any before the end of the year?
27:44Look, I'm a betting woman. I'm betting that we will see approval before the end of the year. If you look at on-chain betting markets, which are our fund proxy, they're also pointing at a yes. But who knows? Who knows what's going to happen with the SEC government? But I think everyone in the industry is very optimistic. If we look at flows into Bitcoin products, we've seen six weeks of consecutive flows. We saw a little bit of an uptick in flows in August. Then we traded really flat, very low volumes. Last six weeks, we've seen a lot more activity, a lot more trading volume. We are now at$760 million of flows into Bitcoin products.
28:21In 2023, we have exceeded levels in 2022. So I think those are all indicators that institutional buyers are starting to position around Bitcoin potentially rallying into year-end and into Q1 of next year. Hey, Meltem, great to have you back on the show. So talk to us a little bit. The excitement in and around spot Bitcoin ETFs is not just that institutions, it's an easy way for them to get into it, but is it also retail? Like, for instance, they could buy it in their IRA. And you just gave us a sense of what the year-over-year increases are. as far as flows, what would you expect if there are some big spot ETFs?
28:59Like how much would that increase in your opinion? I think there's a lot of opportunity here and you hit the nail on the head. Dan, I've talked about this a lot. I think the really big prize here is U.S. retirement accounts, tax advantage retirement accounts. That's super sticky AUM. And to date, if Grayscale, which is an incredibly inefficient product that has traded at a really high premium, now trading at a discount of Grayscale has been able to amass 30 billion of AUM. No, you know, no telling what a BlackRock product will do. Obviously, they have fantastic distribution, huge network as well.
29:36So I think there's a lot of enthusiasm. The question is, how quickly will those flows materialize? I think it might take a few quarters. But again, there is just this tremendous demand. Fidelity's tapped a little bit of it with their advisor they're offering. They have a platform the market's not really talking about, but they've offered exposure for some time, mostly to their higher net worth clients. And I think BlackRock will be huge. The other one I'm watching, by the way, Vanguard. If Vanguard makes the move, that to me will be a real indicator that the race is on. We'll also see some pressure on fees there.
30:07Meltemans, Karen, thanks for being on. There's a lot of, I guess, pent up demand, pent up selling to be done in GBTC, for example. You've had a lot of holders that have been stuck there. How do you think that ends up getting resolved? Is there going to be enough demand to absorb that? I think the real question is, as we get closer to clarity on when and how that conversion to ETF might happen, how much that discount closes. Right now, there are a lot of holders of GBTC who maybe are sitting on a loss, who maybe created shares in the past, who are waiting for that that discount to close. Again, if we believe markets are efficient, it would indicate that as we get closer to that conversion, that discount will close.
30:50We're already seeing some of that action. But I think that will really be the primary question when it comes to how much selling we will actually see. But there's also a question of, you know, what will the market look like in terms of fees? The grayscale product, it's expensive, right? So if new products come in that are more efficiently priced, I think it will create some pressure and potentially some rollover into those newer, more efficient products. Meltem, Danny Moses here. By the way, if I end up buying Bitcoin, everybody should run. I don't own it here. But do you think all the bad actors have kind of played their way out of the space at this point?
31:24And as retail comes in, and I will say, it's obviously been in very strong hands because the stock, the crypto held its levels for quite some time in the face of very bad news. Are we through the bad actor period, you think, or you think there's some still out there? Danny, I hope so. I don't know if I can take anymore. You and I have talked about Bitcoin in the past. Look, I've been here almost a decade now. I hope we're done. I can't take anymore. I think the FTX trial, the SPF trial over the last few weeks, you know, really was a moment of catharsis. The guilty verdict definitely, I think, was sort of an ending of an era.
31:58There may be a couple more shoes to drop, but I think at this point everything is kind of known out there. There's no more forced sellers left. There's no more forced liquidation left. So I think I'm feeling pretty good. I say that and knowing crypto, something else will blow up in my face. But again, I'm optimistic that at this point we flushed most of that out. Really exciting day today, by the way. I just want to share this quick tidbit. I just saw this come across my desk. Today is the first day that CME futures volume exceeded Binance futures volume. Big day. Institutional venues for Bitcoin are now outpacing the more crypto-native venues.
32:35I think, again, just an indication that things are becoming more institutional, more mature, more professional, all things which I think are great for what I call the most hated rally. Meltem, always good to see you. Thank you for joining us. Meltem Demers of CoinShares, Dan. You know, the CME point is a really good one, right? So if it's going to be a lot of more institutional demand because of the spot ETF, you're going to see a lot more futures trading in around that for a whole host of reasons, obviously leverage by hedging and the like. And just the other thing, you know, we didn't talk about ETH.
33:03We haven't talked about Solana. You know, we were talking about Robinhood the other night, and I kind of casually said, well, you could probably buy it down 10%. It's gone down a lot more. I think a lot of investors are looking at their customer base and saying, wait, they're not doing, they're not YOLOing the same stuff they were doing. But look at the price here. It's happening somewhere because people are speculating again in crypto. That's not a baked good that comes in the package. You looked at me and you made, because I don't know. But as a kid, You only live once. You had yodels. Remember those?
33:31Right. See, I knew where you were. I know you knew that I knew. That's why we looked at each other. Great job on the squawk box this morning, by the way. Yeoman's effort by you. Coming up from bear to bull, Danny has made a name for himself on betting against certain stocks, sectors. But now there's a sector he's actually positive on. It's like Mikey likes it. We'll find out what it is next. But first, we've got some after hours action for you. Capri and Wynn, both on the move after reporting results. We'll dive into the numbers and the trades next.
34:05welcome back to fast money we've got an earnings alert on capri holdings the luxury retail stock dropping after hours after missing revenue estimates the company did though beat on earnings tapestry which is in talks about capri for eight and a half billion dollars jumped three percent during the regular session after a revenue missed before the bell that name also lower in the after hour session what did you learn from these reports karen well they're not in talks they have a deal. They have a very tight deal. So there's no chance that Tapestry did not know about these earnings. They're not surprising.
34:35There was weakness in luxury. We've seen that a few times before. The big thing here is how long will this FTC request goes on? If you knew that would close without issue, then this deal will close. There's nine dollars to be made. But I don't know how long that will take. And if for some reason this deal breaks, which I don't think is the most likely the outcome. I don't know the downside in Capri. Came from 35, but things are worse than they were then. Right. So you've got to think it's lower than that. At some point, though, the Arv in me will end up buying Capri. Because you think it'll...
35:08Because I do think it'll close. I think the argument against a retail merger, it's such a competitive world, right? Even though they're in accessible bags, I just don't think that's enough to block a deal. Never seen a deal like that. What kind of spread would get you in, though? I mean, you can make nine bucks now. I think there's more time to go. We're not going to see the FTC thing resolve for a little bit of time. You'll wait. Yeah. So I will wait. Yeah. Right. Money in your pocket. In my purse. In your purse. Yes. And maybe your Kate Spade purse, which apparently needs to be innovated, according to Oliver Chen over at TD.
35:42Is that right? That's what you're going to have here. You go to the RealReal, and you get, you know, those channel purses or the Prada ones. I mean, you can get them at, like, half price, 40%. They're beautiful. It's fantastic. That's why this RealReal thing, I'm shocked that it hasn't caught on. Why would you buy bust-out retail and go to one of these places when you can buy these bags in pristine condition at a discount? Sorry, that's the more you need. Are you like a paid spokesperson? No, I'm not. Guy doesn't make any money from RealReal. He is not affiliated with RealReal. I'm not. He holds no position.
36:11No. Which is a publicly traded company. Noted. Isn't the more important thing here just retail in general and the consumer demand? And, I mean, yes, there's a risk-arb opportunity, but I'm saying in general. That trumps everything in this case. No, it trumps everything. The kind of good this is. Exactly. So I think that, to me, is more telling than getting involved. I'm not involved, obviously, in the stock, but to me, that's telling. All right. Tummy up. The big short investor is in a bear on everything. We'll reveal the one name Danny Moses likes and why he says this sector is under-owned. And here's a sneak peek at the Kramer cam.
36:39Jim is chatting exclusively with the Take-Two Interactive CEO. Catch the full interview. Top of the hour on Mad Money. Meantime, more Fast Money in two.
36:55Welcome back to Fast Money. Wynn sinking in the after hours despite beating top and bottom line estimates for its third quarter. CNBC's Contessa Brewer's got more on this. Contessa. Yeah, Melissa, they beat overall, but Wynn Resorts missed in Macau, and that's what investors care about. Wynn's at 85 percent of pre-pandemic EBITDA levels. Remember, that's the key earnings metric in gaming. And the company has pivoted to catering toward customers in the mass segment, where in the years before the pandemic, the junket business and VIP segment was Wynn's wheelhouse. We heard that from Melco this week, too, that the virtual end of junkets has hit them hard.
37:34Still, CEO Craig Billings said on the earnings call, these third quarter results prove in Macau, Wynn can hold on to market share without the junkets. They're also highlighting cost discipline there, even amid a ramp up and the rebound to normal levels of visitation. They say operating expenses are 20 percent lower than 2019 before the pandemic. Now, Billings described Las Vegas activity as frenetic and set a new third quarter record in gross gaming revenue and hotel and food and beverage up 12 percent there. With F1 next week, the company predicts its Las Vegas property will exceed all time hotel revenue.
38:13Get this by 50 percent for those three days. Billings says the F1 fans are Wynn's customer base. So they're really catering again to that international crowd and those high rollers. Melissa. But going back to Macau, Contessa, Billings is saying that they're holding on to market share and that they're being very disciplined when it comes to costs. What gives them? How are they? How do they miss the mark so much? Well, they have put some money into some new non-gaming offerings, they say, and that has cost some money. They say that Wynn Palace is maybe on schedule for where they thought it would be, but Wynn Macau is not and not quite producing the results that they had predicted.
38:59And so some of this may be about expectations from both Wynn and from investors. And some of it may just be that is there some market share changing hands? Indeed, there is. In fact, I heard from Bill Hornbuckle last month in Las Vegas that they'd gained about 5 percent of market share. And again, remember, everybody's catering to big spenders, but it's that mass segment now and premium mass. So people who are spending a lot of money but not the highest of the high rollers, right now it looks like that's what's fueling Macau's business. Contessa, thank you. Contessa Brewer. Guy. If you recall, Melissa, which you do, last night, when was my disaster?
39:43Bad job, G-Swiz. That's really bad. It was down during the day. It's down again in the after hours. But then if you said to me, this is the quarter, this is what they were going to report, I'd be like, stock's got to be higher. Macau, look at Macau and don't look at anything else. They're building a property in the UAE that's going to be fantastic. The stock is still cheap. They initiated a dividend. Good, good, good, good, good. Macau, bad. Sell the stock. And now we're in a series still of lower highs and lower lows. Until that's broken, I am sorry, folks. I missed the boat on this one. All right.
40:13Let's say at the poker table, our guest trader, Danny Moses, may be known for short calls, but he is making the bull case today on sports betting company DraftKings. What do you like about this one? It's a secular play in terms of the sector in general. It's making a move. Give me a sector within the U.S. economy that actually is going to have growth, produce tax revenue, so forth. It's online gambling. It was a SPAC, DraftKings, so it already had a negative aspect to the company. They just reported blue-way numbers. There's an investor day next week. They guided higher. And next year, they're now free cash flow positive.
40:45The one thing within the sector has been cost to acquire customers. It's been extremely expensive. Now you see MGM, which reported they own 50 % of BetMGM, which also says they're going to turn cash flow positive. You have Patty Power, which is Flutter, which is going to list on the New York Stock Exchange in January. Stock was down today a little bit different mix, but the U.S. growth in online gambling is here. Now, the stocks had a big run. DraftKings obviously moved up on the earnings pretty strong. Still have a small, long position there, and I would certainly add into any weakness. But the sector in general, I'm involved in several private companies that I'm involved in and public companies as well.
41:17But to me, it's a growth engine. Yeah, so, Danny, talk to us about market share here in the U.S. Where are the opportunities? Because it's been a two-horse race, right, between DraftKings and FanDuel and now obviously that MGA and those sorts of things. So how do you think about these? It doesn't have to be a winner-take-all sort of situation. No, correct. I think there's, listen, jurisdictions, markets get approved. Mike Rubin from Fanatics, do you think he was getting into the sports gaming space? He's one of the most successful entrepreneurs of our generation, right? So he obviously sees it as huge opportunities, opportunity for content.
41:46The one thing that DraftKings is doing, I don't think people pay attention to, there's a DraftKings channel now. So when you think about the content and the ad, it's really changing. This whole sector is changing. A channel like How to Bet? A channel with content. Odds? Yeah, well, it has that. It has those all the time. And listen, we're in the middle of football season, so I get excited about gambling stocks in general. But I think this sector, again, because it was a SPAC, one of the few SPACs that obviously do well, kind of got through the gauntlet, so to speak. I think it's interesting. And listen, it's a$16 billion market cap.
42:11It's getting pretty big. It's going to be hard to ignore. So, listen, things could pull back, obviously, but these are going to be free cash flow machines. I think they're going to diversify their business models over time. Tim Seymour sat in that very seat. The ambassador. The ambassador. So DraftKings, that was one of the best earnings reports this season so far. And they did show market share gains, rationalization when it comes to how much they're spending to acquire customers, et cetera. They're going to be profitable probably, what, late next year? No, early next year. Early next year, which is more of a reason.
42:40They have their investor day, I think, on November 14th. I think this sell-off is an opportunity to get a loan to stock. All right. Up next, final trades.
42:58Final trade time. Let's go around the horn. Danny Moses. Short upstart. It's a financial company. Masking itself is a tech company. Great to have Danny Moses here on set, by the way. Aaron Feinerman. I have one. It's a financial company. It is kind of a financial company. But it's not a bank. Morgan Stanley, Asset Management and Investment Bank. Dan? Yeah, the SPY, it's ETF that tracks the S &P 500. It failed right at that downtrend. It's been in place since July. I think it's a good level to play for a move back towards 4 ,200. This past Saturday, the Rangers, three-zip lead in Minnesota. They gave it back, lost in overtime.
43:31Well, you know what? They will avenge that a few blocks south of us. Why are you shaking your head? We have limited time. Medtronic, MDT, back to you. All right. Thanks for watching Fast Money. See you back here tomorrow. Bye for more Fast. Meantime, don't go anywhere. Mad Money with Jim Cramer starts right now.
44:11of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com forward slash Fast Money disclaimer.
From the publisher
Shares of Tesla dropped over 5% after a bearish note from analysts at HSBC. But is the sell off overdone? Plus bitcoin prices surging towards $40,000, up 36% this quarter. Can the rally continue? And Danny Moses of Big Short fame joins the desk with a stock that he says actually has upside. We tell you what it is, and why he’s bullish on the name.
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