Is Eli Lilly Heading Back to New Highs? Plus Lionsgate Looks to Tap the SPAC Market 1/9/24

0:03Breaking news tonight as we kick off Fast Money Live from the Nasdaq market side. I'm Melissa Lee here tonight. Carter Worth, Karen Feinerman, Dan Nathan and Bono and Eisen. In just the last hour, a roller coaster of news for the Bitcoin markets. The SEC appearing to send a tweet just after the market closed that said it had granted approval for Bitcoin ETFs to list on all registered national securities exchanges. The agency's official X account quoting chair Gary Gensler saying today's approval enhances market transparency and provides investors with efficient access to digital asset investments within a regulated framework.

0:34But minutes later, Gensler himself tweeted that the post was sent prematurely, saying, quote, the SEC Gov Twitter account was compromised and an unauthorized tweet was posted. The SEC has not approved the listing in trading of spot Bitcoin exchange traded products. Let's get straight to Kate Rooney, who's got the very latest on this developing story. Kate. Hey, Melissa. So we did get that tweet, that ex-post by the SEC official account. An SEC spokesperson later emailing saying attributable to a spokesperson, they say the SEC's account had been compromised. The unauthorized tweet regarding Bitcoin ETFs was not made by the SEC or its staff.

1:14You mentioned Gary Gensler. I also just spoke to one of the issuers with an application out there. They said that they were in a bit of a panic mode. They said they had not gotten any word from the SEC. There was some confusion around that. It had also affected Bitcoin prices. You saw the price of Bitcoin slump and then later spike. So there is risk of potential market manipulation here. What that, you know, what the reasoning behind that tweet was and whoever did this. The other theory that I've been talking to a couple other sources who are saying that this could have, it's also being interpreted as a potential mistake.

1:50They're saying, was this a tweet that was drafted and then sent too early, which we've seen before on earnings. No word yet on exactly how this happened, how this apparent hack or unauthorized tweet happened, but absolutely affecting prices. And this has been this highly anticipated piece of news the market has been waiting for, expecting at some point this week. So the timing is quite suspicious, Melissa, but big market impacts here. Kate, thanks. Keep us posted on what you find out. Let's get to Eamon Javers meantime with more on the SEC hack, Eamon. Interesting, the SEC has got a problem on its hand in terms of the use of Twitter for market manipulation.

2:25This time, the target is its own account. Yeah, they sure do, Melissa. And this is not new. We've seen this with Twitter accounts going back to 2020. There was an incident involving a number of high profile people's accounts being hacked. That also was related to a cryptocurrency issue. So this happens around this crypto theme from time to time. In this case, though, I think the key word to look at in the SEC's statement to us is the word compromise. You know, Kate was just discussing whether or not this was sort of like a fat finger error on the part of somebody in the SEC comms department who tweeted out something by accident that had been drafted before.

3:02That's certainly a possibility, but the SEC uses the word compromised in their statement, which does indicate that they believe that somebody in an unauthorized way took over that X or Twitter account, however we're calling it these days. I think that's something to watch for. And because that has happened before, we can kind of trace where those come from. And generally speaking, what you're dealing with here is social engineering. A lot of times it's just a phishing attack where somebody gets the login credentials or a straight up bribery attempt of somebody who does have the login credentials for a high profile account.

3:39And you can imagine that there are people who fit that description inside the SEC, but also potentially inside Twitter and or X under Elon Musk's management. You've got to imagine that there are quite a number of disgruntled former X employees or Twitter employees out there who would be susceptible to any kind of reach out like that. So there's a lot of possibilities here. But I focus on that word compromise as an indication of what the SEC is thinking, at least initially, about how this happened, Melissa. So there are a lot of potential sources of the hack at this point, Eamon. And I think that what's interesting, too, is that this happens before an election year.

4:15So not only can companies be manipulated, but political news can be manipulated. And that can also move the markets, particularly in a hotly contested election year. And that's the bridge we're going to have to cross very soon. And this sort of just amplifies that issue. It's a really important point, Melissa. Everyone I have talked to who is an expert in this space thinks that 2024 is going to be a massive year for disinformation. because it's a political election year. We're going to see a lot of stuff happening on social media and elsewhere. This generative AI boom makes that potentially more nefarious.

4:49We're also going to see, experts have told me, more nation states participating in the U.S. election and trying to move results, move popular opinion through hacking and influence campaigns. So not just the Russians like we saw in 2016 with their influence campaign, but also potentially the Chinese. We potentially some Middle Eastern entities, potentially the Iranians all participating in this election year this year. So bottom line, as we begin 24, the lesson here is be careful what you read on social media. Not all of it is true. The other side of it, though, Eamon, is if it does come from within the SEC, that's also a huge problem.

5:26Imagine a hacker getting access to the Edgar database and filing a company filing, which is a fake one. I mean, that could easily move the markets as well. And we've seen hacks like that going back to 2015, right? I mean, there were hacks of PR wire services putting out fake press releases in a pump and dump scam designed to just capture a quick trade on those entities. In a lot of those cases, they are able to unwind who did it. It sometimes takes a year or more to figure out who did it. But people get caught doing this. And maybe that'll be the case here. We have to get more from the SEC on what exactly happened here.

6:04And interestingly, the SEC just put in place in December new rules for publicly traded companies which have to disclose their cyber incidents in a more timely fashion. Let's see if the SEC follows those same rules itself and discloses all the details around this in a timely fashion. Eamon, thank you. Keep us posted on any developments that you find out. Eamon Jabbers in Washington for us. This is just a fascinating story. I mean, when Karen and I were in the green room getting ready for the show, we were sort of looking at the approval, thinking that it was a real approval. and we're watching.

6:33You have sort of a playbook for when the approval actually happens because we saw the markets move on the back of it until, of course, we found out that it was a hack. I know. That was your observation, which is an excellent one because it wouldn't be shocking to any of us to see this be a real piece of news. We're expecting it. In the next few days, that wouldn't be surprising. So I don't know where the term prematurely came from, but there was no decision. So it's not like there was and they just haven't released it. But it reminds me of the guy from the Global Association of Billionaires and Millionaires who made a bid for Marks & Spencer via a fake press release.

7:12This one is more real, looks more real. But, I mean, we see it from time to time. It's just interesting to see, all right, were you surprised by anything that traded? Yeah, but I think the biggest issue is if you think it's market manipulation, if you told me that this tweet was going to come out and what Bitcoin would do one way or another, I wouldn't be able to tell you whether it was going to rally or sell off. So really, you've got to come back to whether it was a compromise situation, the way Eamon laid out, or whether it was a hack. And if it's a hack, it's a serious problem, right? Compromise is more of a one-off situation.

7:41You've got to speak, you've got to broaden it out a little bit, right? So if we're talking about this election year, Eamon just told us how many different nation states want to push misinformation to kind of push their own agendas. And I think the biggest takeaway to me, and I've been saying this now for I think a year and a half or so, is that Twitter went from being this town square, right? Right. This crowdsource kind of town square sort of situation to a single point of failure for so many different organizations who will rely on this to now be their mouthpiece to whatever their constituencies are.

8:08And there's again, then throw in all this stuff with these fakes and, you know, the pulling back from, you know, safety and protocols that are existing on this platform and the like. And we know that they've scaled back this group. So if you are an organization, whether you're political, whether you're a corporation, whether you're anything, and you are relying on this to talk to your stakeholders or for branding or anything like that, you're doing it wrong right now because we've had 16, we've had 2020, we've had 2022, we've had all these situations over the last few years. And so to me, I just think it's funny that we're still talking about this because it's the same thing we're talking about eight years after we had an election that was co-opted.

8:46Sorry, we don't know if the compromise is from Twitter or from the SEC. It sounds like the SEC, right, and not Twitter, where they could have compromised their PR account. But people have become accustomed to hearing official notices through this sort of thing, and they're giving validation to that. Yeah, I think we can debate whether or not companies should or shouldn't, but I think we need to take into account the fact that they do. And the impact that social media has in terms of dissemination of information across the board, not necessarily just Twitter. So I'm with you. I mean, I think now that it's been taken private, clearly we have less insight into what the goings on are at that particular company.

9:23But this to Karen's point, this sounds like this was a failure in terms of the credentials on the SEC's point. And I think that should raise as much concern. That is our overarching governing body. And the fact that we're getting information that we've essentially been waiting for for the better part of a few months in terms of the release of this. And we've been teasing up to this point, I think is equally concerning. So I do think clearly, you know, the things that have gone on at Twitter make it easy for us to attack there. I just do think that we should be holistic in how we look at this situation.

9:54I mean, from what we know, price action was in line with presumptions, right? If approval were real, you would expect some sort of reaction. It was up as high as 48 ,000. Of course, now we're down 5 % from that peak. But I think the market, while anticipating approval, it still did move when it thought that approval was in hand. Right. Right. So what we saw move, I mean, if we're going to use this as sort of the playbook, we got the playbook for a Bitcoin ETF approval. Correct. For a window of five minutes. But in that five minutes, what do we see? We saw Bitcoin move down a little bit. Three percent.

10:26Coinbase down a little bit, one and a half percent. Certainly not the huge moves. We were going through all the different things we thought would move and they weren't moving as much as you would think. Yeah. Although it did have a little bit of a buy the rumor, sell the news strategy. Right. Like there's been so much excitement about this. And obviously, Bitcoin has moved so much that you would think sell the news would make sense. All right. Let's bring it to the conversation. Rick Heitzman, the founder and partner at FirstMark Capital. Rick, great to have you with us. Interesting news that's happened.

10:53Yes. You sort of, you know, you are in that world. And I'm wondering, you know, what your take is. Is it the fault of Twitter? Is it where would you go first? I think it's too early to know, but I'd probably go to, you know, it's usually people who make these mistakes. And is it the people at the SEC who had a fat finger mistake or is it someone at Twitter and are there rules? So I think the SEC has to go deeper on Twitter, especially as that organization's been generally gutted since it's gone private, and make sure that things that can affect the market, affect the political landscape, are handled properly.

11:28For the companies that you're invested in, do they use Twitter as a way of disseminating market-moving information? Constantly. Constantly. So they announced earnings. They announced material hires. They announced all kinds of material things on Twitter. So that's really a place of record. And so if you're getting sold in M &A, which was the ultimate market moving thing, you have to be locked down. So what does that mean? And I think it's probably even taken more seriously now than it did when Elon Musk was tweeting out, I'm going private at$4.20 a share. And now the more seriously everyone takes it, the more important it is for us to safeguard it.

12:07Does this make you rethink? I mean, if Twitter was the point of failure, does this make you rethink, as somebody who's an investor in a lot of these companies, this is not a good way. We've got to think of something else. Or we have to increase the accountability. So is this a safe and trusted place where you can disseminate information, where you can manage your profile, And is this the way you're going to talk to your parties and interests, your customers, your investors, your stakeholders? Or does there have to be a better way that people will move off to a Discord or move off to another channel where they feel like that's a more safe, secure place?

12:42So, Rick, I don't know if you remember this, but we met on the set of Fast Money in November of 2013. It was the week that Twitter went public. And you came on. I guess the question was, what is the next Internet stock? Your hair was a little darker. What was the next internet stock to go public? Okay, that was what we were talking about. It was on the set downstairs. All right, when you think about this, let's bookend this to where we are right now, okay? Because Twitter would be well below its IPO price from November of 2013 right now. As an early stage investor, what do you see in the consumer space?

13:15What do you see in the social media space? Because the only company that's really been successful, I think, the last 10 years has been TikTok. And TikTok has all the same concerns that we're talking about right now as it relates to misinformation and all that sort of stuff. Maybe even more. So they're now asking for things like what's your unlock for your phone. And so there's many more back doors in TikTok than anywhere else. The problem has been that the consumer experience hasn't evolved. Right. So the things that you look at what your kids use for social media apps, it's still Snap. It's still Instagram.

13:45It's still all those communication and messaging that it's all in the old framework. You know, you need Discord has been the big winner and the big emergent power in social, but probably doesn't have the consumer scale or the name or brand recognition that some of the older players have. But hopefully this is, you know, what's the next version? Oh, this next version is more secure. The next version is more trusted. The next version is how, you know, companies talk to investors in a safe and secure way. So a lot of these crises create opportunity for the emergent companies. What do you think would benefit?

14:18I mean, if people looked at Twitter and said, because of this, we understand now that Twitter may not be as secure as we believe. What is the alternative? I don't think it's Threads. I mean, some people would say it's Threads. I think Threads is kind of DOA. I think you're going to move to, hey, do you have a Discord server? And that Discord server would have a lot more security around who joins the server, who's the administrator of the server, who's in and around it. And that has a whole bunch of different ways that people use Discord servers for commerce, for communication, for secure and private access that, you know, companies could turn and say, I need to have a better one on one relationship with my stakeholders, with my investors, especially as I'm announcing material, nonpublic information.

15:01So how do I do this? And will someone work with me to create that safe and secure place? And I think that's probably a big opportunity. So if anyone out there is doing that, I'd love to hear from you. You're looking for a new investment. Before we go off to talk about, you know, tech in general and investments, I'm just curious. You know, you're part of the tech community. And so when you take a look at these things happening, as we enter an election cycle, where the possibility of these types of events happening more and more to potentially even more detriment. I mean, this was sort of a minor incident in that the damage was contained.

15:32It was caught quickly and it was denied that it was a real tweet. There can be another circumstance where we don't know that it's fake. It happens longer. and the effect is much deeper and longer lasting in many ways. And so who should be responsible? And I ask that sort of in a general societal sort of point of view because the government would probably want to say we want to be responsible. The tech community probably wants to say, no, we can be responsible. And yet what have we here? I don't think either of them could be as responsible because the quality of generative AI is increasing so quickly that the quality of these deepfakes are so real, they're so good, and they can be created very easily and distributed very quickly.

16:13So I don't think anyone could have enough fingers to put in the dam to make this happen. I think the government moves too slow. The government hasn't set out regulations to do that. And I think the individual platforms, as hard as they try, are still susceptible. So there probably needs to be rules of the road. And I think with political ramifications or financial ramifications, someone needs to do something. OK, we're going to have to leave it there, Rick. Great to have you with us. Thanks for playing along with us. No problem. Thank you. We're going to continue to follow the story. Any news we get, we'll bring it to you immediately.

16:47Meantime, we will continue our breaking news coverage right after this. A cybersecurity expert will join us. Fast Money is back in two.

16:57Welcome back to Fast Money. Eli Lilly, CEO David Ricks, taking the stage at the J.P. Morgan Health Care Conference this hour. In fact, should be there right now. We are watching the comments. We'll bring you all the headlines. Shares of Lilly closed the day just off record highs. The stock has been soaring on demand for its obesity drugs, but investors are also awaiting news of potential Alzheimer's treatments. Here's what Rick's had to say about that earlier today on Squawk on the Street. The thing that probably at Lilly we're most excited about is what we call the Trailblazer 3 study, which is fully accrued now and will read out in a few years.

17:29This seeks to take people before they have Alzheimer's, have amyloid in their head, so the risk factor, and delay that diagnosis or prevent it. That's the goal of the study. We have to prove that, but that's a few years out. So that, and then just in the next year or so, there are six basically trial readouts concerning terzepatide and Eli Lilly for various trials. One is due out January 10th, a readout of a phase two trial using terzepatide to treat fatty liver syndrome in obese patients and patients with type 2 diabetes. So there are a lot of different catalysts for the stock to move it higher here.

18:09I mean, but I don't know how many of them are already priced in. I mean, there's a lot of excitement around this stock, clearly. And we were just talking in the break. There just seems to be one good news story after another here. I don't know if eventually there'll be one that isn't so good and it'll trade off. But also there is this other potential engine of Alzheimer's, which I don't know how much that's priced in. I'm long. It's hard to say on a valuation basis. You've got to be there, but I'm staying long for the story. Well, what does the chart say, Carter? Well, I mean, talk about the definition up and to the right.

18:41But what's sort of interesting day to day is that this is based the same price it was in September. So this sideways action after the preceding big move is the pause typically that allows you to go again. I would concur, as they say, I'd be long with you. This is like the NVIDIA, a pharma. And you own NVIDIA. I do. I still do. You own Lilly. I do not own Lilly and wish I had, but I can't win them all. Listen, I'm in agreement with the others, although I will say I don't know what the incremental move higher comes from. I don't know what that catalyst is. If the roles had been reversed and essentially the Alzheimer's drug essentially had had the move, I would say, OK, this obesity drug definitely can take things for the next leg higher.

19:23To Karen's point, how much of this is priced in? And so I just think part of it is just order of operations and everything else probably is seen as a secondary or tertiary effect after just the massive move that we've seen around these two particular stocks, Novo and Lilly. Yeah, and I guess the story for NVIDIA going to$1.3 trillion in market cap is growing into that valuation. It's something that I kind of got a little behind last year when you're thinking about the TAM. The difference here is that people are not double and triple ordering GLP-1s. They are not thinking about what this means for hypertension, for fatty liver, for sleep apnea.

19:58I mean, the list goes on and on and on, right? So this is a stock that if you're thinking about$18 in earnings in 2025, maybe$25 in earnings in 2026, it could easily grow into that valuation over the next couple of years. And Guy says he's been saying this all year long since the stock doubled in March. You just buy this stock on pullbacks. You don't have to buy it when it's breaking out like here. And to Carter's point that it actually has gone sideways, much like NVIDIA did before it just ripped 15 percent in a straight line over the last week. But throw in all of these sorts of trials for other use cases for these drugs.

20:32OK, and then it just expands the addressable market for it. And then if there's any success in Alzheimer's, what are the things that people, I don't want to be fat and I don't want to get crazy when I'm old. And so those two things. People are going to say too late. Okay. Thank you, Karen. Believe it or not, we are great friends, people. I just want to tell everybody that. We all are, by the way. But like NVIDIA, okay, got 15%. It got$150 billion in market cap in the last week because they're selling our biggest foreign adversary, you know, AI chips. Okay. I think we could see this stock at a trillion dollars at some point in the next few years based on an Alzheimer's approval and GLP.

21:10So embedded in that is a would you rather, and you'd rather Lilly over NVIDIA. Even though you did like NVIDIA the other day, you're saying it does look. Well, I said that at 490, and I said from a chart perspective, from a trade perspective, from a whole host of other things. I did quote my main man, Carter Braxton, that was the impetus for this thing. And I did say I see a breakout. This one is a long-term investment. I mean, listen, the other one's great. It's fine. You know what I mean? Never sell your NVIDIA, people. But I'm just saying, at one point, NVIDIA is going to start to sell off, and you're not going to want to buy it because it's going to get cut in half.

21:40Lilly, their drugs are going to have to kill people for it to sell off and get cut in half. And it doesn't seem like that's true. And Lilly is not popular on the street. And you say, what are you talking about? The price target from 40 analysts is 1 % higher. That's a 12-month price target. So it's hardly a consensus view that this has got a lot of upside. The view is actually that it's all priced in. All right. There's a lot more Fast Money to come. Here's what's coming up next. Cinema Shuffle, the studio behind blockbusters like The Hunger Games and John Wick, is making some movie moves, what the new biz will look like, and the SPAC deal helping them get there.

22:16Plus, Tim flexed his bicep while Dan rode on a zebra trade. And now, Carter and Bonoan are laying out their 2024 acronyms. So grab a shovel and an adapter. They'll help you with these next picks. You're watching Fast Money live from the Nasdaq market side in Times Square. We're back right after this.