also reporting, xpo and cboe, commercial real estate in focus with cbre, as well and, of course, it's jobs friday economists expecting an additional 240,000 jobs created in april slightly less than march's 303 employment rate expected to hold steady we'll see. that does it for us. "fast money" starts now. live 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 the mother of all buy-backs. apple beating on the top and bottom line, announcing the biggest share repurchase in the history of business. all business $110 billion that's an entire john deere. an entire boeing the afterhours action and the conference call straight ahead. plus, the peloton plunge shares hitting new record highs after announcing layoffs and the ceo departure. can the company pedal its way out of the hole? we take a deep dive into the

future of this one-time pandemic darling. and later, sales of novo nordisk's wegovy more than doubled, but the possibility of increased competition putting pressure on the stock today. can the company tip the scales in its favor we'll go inside the numbers. i'm melissa lee, coming to you live from studio b at the nasdaq on the desk tonight -- courtney garcia, karen finerman, dan nathan and guy adami. start with apple $110 billion buy-back, eclipsing the previous record set by apple in september of $83 billion. that weighing a 10% drop in iphone sales sharing are soaring 7%, adding $200 billion to the company's market cap the conference call just kicking off at the top of the hour steve kovach's got all the details. hey, steve >> hey, melissa. so, yeah, top and bottom line beats for apple. and let me go over the other numbers here that are really driving the stock up higher. the dividend increase, up to 25 cents a share now. and like we've been talking about, the biggest buy-back ever

in corporate history $110 billion and then, some more numbers here by the segments. iphone revenues were slightly missed expectations, $45.96 billion. by the way, that's down 10%. services, though, that's the bright spot in this report here, that was a slight beat, up nearly 14% i talked to tim cook about that one, he said that's driven by app store and other services and also increase in subscriptions that they have. greater china is down 8% that is an improvement, quarter over quarter, it was down 13% in the december quarter guidance, so, breaking with tradition a little bit here, when i talked to tim cook, he gave a little bit of color about the guidance he said to expect june quarter revenue growth in the single digit percentage points. low single digit percentage points that is sending the stock higher, too. some other thing i talked about, on china, tim cook just came

back from a trip there a few weeks ago, talked about what he say. he said, quote, i feel great that in an extraordinarily competitive environment that we grew iphone sales in mainland china last quarter that may come as a surprise to some people, and so, i feel good about china. i think more about long-term than i do the next week or so. i asked tim cook about artificial intelligence, of course, there's this perception here that they're behind in a.i., we don't really have the good narrative about where they fit into the whole picture here's what he told me about a.i., specifically about what they're doing on the hardware side, to enable a.i. services, quote, we've been shipping a nurl engine since 2020, and so, we've been working on a.i. from a silicon point of view for years before that to be able to ship it in 2020, and so, i think we have a huge opportunity here. and as people start using a.i. more, there's a big opportunity here expecting to hear more details about artificial intelligence next month at the developer's conference mel, back to you

>> steve, thank you. seems like a lot of the worst case scenario for apple has been dispelled. what did you make of the guidance, though >> the guidance is not as bad as feared i think the commentary he just gave around a.i., i think we would all agree that there is a tremendous opportunity in the future, you know, because they don't have anything going on right now. so, when he says they've been shipping a neural network, 99% of the people in the apple ecosystem have no idea what that means. it wasn't bad, as feared china wasn't as bad as feared. if this stock is up 7% because of a $110 billion buy-back, that probably doesn't make a lot of sense. karen and i were just talking about it over the last three fiscal years, they've been averaging $20 billion in share repurchases, right and so, they've been retiring these shares so, when he gives the guidance that is expected to be low single digits eps growth, when you think about how many shares they have been retiring, you know, they've been managing this earnings growth, there is no organic earnings growth in my opinion right now. so, they better get the a.i.

story going, they better get higher margins from the services, because if the a.i. devices, if they do come this fall, if they're not driving a big upgrade cycle, then it's going to be a big problem for them >> are you saying that the math works out, if they did not do this buy back, there would be no growth >> look at how they're accelerating their buy-backs there's been low single digit earnings growth. i don't know the math right here, we can back into it, but -- >> $100 million on $2.67 trillion, it's a little more right now, is less than 4% repurchase of their entire float. so, it's hard for that, i mean, maybe if you just do straight up, then okay, then you have that level of improvement, though if you're trading above, i don't know where the multiple is going to be when this settles out tonight, but buy-backs used to be very accretive they are no longer, because you would earn 5% on your cash, so, that's a 20 multiple, versus you're paying something in the much higher than that multiple

so, it's not accretive, but it is, of course, a big player if the market, out there looking to buy $100 billion worth of stock. but as you said, they're kind of going at that pace anyway. >> right. >> >> or close to it >> really poorly they've been buying that and the stock has massively underperformed so, investors have made the decision that that cash that they have, probably better off earning the 5% than going back and buying their stock that's underperforming the broad market >> i missed you. i missed everybody here. >> so good to see you, guy >> i almost didn't make it. >> that's not true >> nobody cares. well, you know -- met foficily speaking, no, but in terms of getting here on time >> yeah. >> okay. >> anyhow. services as a percent of revenue, very good that's why they probably deserve the premium valuation. i think that's a good thing. margins, pretty good, as well. but this now, i think revenue year over year was down 4% this is the fifth out of sixth quarter you have negative year over year -- negative revenue growth, i mean, that's not particularly good. so, you can't do the counterfactual, i get it, but if

they just report this quarter and make no mention of $110 billion, where is the stock trading? i think that is an interesting -- you can't do it, i get it, but this was an okay quarter. it wasn't anything great >> better than feared, though. >> better than feared, but still not fan -- yes, better than feared absolutely right >> yeah, and that's the word i was going to say just better than feared. i don't know if that's great, when you have five of six quarters where we're now down. you are facing competition from china. i think we're going to have to see some innovation with their products so, we do have that conference coming up in june. they just announced a special event next week, i'm not sure what that's about. >> ipad. >> okay. >> new ipads who cares. >> yeah, i think the bigger story, what's going to happen with a.i., do they have any sort of story here? they're really going to need something here, because iphone is more than half of their sales. if you are not seeing people upgrading, people don't need that to the extent they've had in the past, i don't think it's going to do it for them. they can't have continuing quarter over quarter declining revenues i think they're just appeasing

investors at this point. >> at 185, do you want to own apple into that wwc event, where they theoretically will announce some giant a.i. development? guy? >> yeah, well, i would have said no yesterday, so, that would have been wrong. i thought the stock was headed down to the low 160s, and here we are today so, i guess i have to be consistent and say no, because, again, if you dig through the numbers, it's fine again, but it didn't get itself any cheaper. you can do karen, courtney, dan can do the math and figure it out, but the reality of the situation is, i mean, they've been meandering along on the earnings front for the last couple years, quite frankly. >> i wonder, sort of matters, how does it trade going into that, so, we could see them sort of, people get really excited, maybe alphabet trades up, too, if they think there's some big partnership there. and then they really got to wow, which has been difficult to do i mean, microsoft did it, a year and a half ago, longer, i guess. yeah, i -- i don't know. i wouldn't be a buyer right here

>> i think the announcement smacks of a little fear, that they have now a month to sign some big licensing deal, with openai, gemini, or something like that. and so, i also see a headline right here and steve mentioned it, but the apple ceo says making significant investments in generative a.i. we were talking about that june quarter last year. they didn't say generative a.i. once and we were counting all the times that almost every megacap tech company was mentioning it on their conference call they went out of their way to do it now they're going out of their way to actually talk about the investments. think about one theme that has been persistent throughout this earnings period. when expenses have been higher, they've sold the stock hard. so, to me, i just think that that's what the buy-back is there, to kind of ball lang out a little bit what might be a spending spree on generative a.i. a lot of companies spent a lot of time and energy building these language models, right these guys are going to license it which is not bad, that's kind of what microsoft has done, too. if it's going to be on device,

is it going to be on device by the time i fiphone 16 comes out? i would be surprised if it is. y you might have another yearlest. >> let's bring in gene munster from deepwater asset management. your take on the quarter so far? >> quarter was a relief. surprised to hear -- thrilled to hear tim give the guidance to steve, that was rare, but the guidance for june, the revenue guidance was also a relief, essentially in line with the street, up 1.5% is probably where it's going to fall out so, that stuck out to me, and i think the near term, i put that through the end of the year, we have a business that was down 5% in the march quarter, it's going to be up a couple percent in june, about 4% in september, and 6% in december and so, you compare that to the last eight quarters, where apple's business has been down negative 0.3%. and so, you see this kind of

return to growth it is comping off an easier iphone cycle and dan pointed out something that is at the back of my mind, and top of my mind, going into this call, they did say -- dan mentioned that correctly, tim cook mentioned something in his prepared remarks, so far on the call, that they're going to be making significant investments and significant investments, we saw what happened to meta with that, and my view, more spending on a.i. infrastructure is a positive but that is what i'm eagerly awaiting for on the call, is to hear how that spend is happening, so, those have been a couple things that have pointed out. one more, melissa, when we're trying to guess what they're doing in a.i., what that's going to be about, tim mentioned in the prepared comments that privacy is going to be one of their kind of foundation pieces, and that's important, because it's a sign that they probably want to pursue a plan in this agent-based personalized a.i

this is, you prompt it, and it goes out and does a series of tasks for you based on a single prompt exciting stuff we may or may not see that in june, but i think that that's the -- kind of their long-term vision, related to a.i >> let's say we don't see it in june, but we get a teaser in june for it, gene, will we see it in the next iphone, next generation of iphone, so that it will be a catalyst for sales, or as dan mentioned, will we see a whole cycle skipped in terms of, you know, massive uptake of the new iphone and we have to wait, investors would have to wait for another year or so >> well, apple is fully onboard with the opportunity around a.i., i mean, it is a remarkable change in tim cook's prepared remarks related to it, and i think that speaks to how they're going to want to talk about their products and i suspect this fall, it may not be called iphone a.i., but it's going to be iphone 16 a.i., and i think that they're going to make hay when they can and

kind of play into this it's not just -- it's not just hype there's a ton of substance around it. and i expect that these a.i. tools, the initial ones, are going to be something simple like, use your phone and ask siri to book you an uber to the airport, something like that, but i think that they will probably perform better on next gen phones, and this is a really exciting time and technology, and i think that that will be a boost to this next cycle, so -- i think that they're going to be playing it up, as they should. >> let's assume that that is in the next generation, where does apple trade from here, gene? and do you think that 7% in the afterhours, is most of that excitement around the buy-back >> i think it's -- i think the buy-back is part of it, i think the piece that surprised me most is they essentially maintained their revenue guidance we'll hear the earnings in a minute, but that really surprised me i was expecting this was going to be flat, some investors were saying it was going to be down a few percent in june. i think that was a big part of the kind of this move higher

they'll reiterate that in the commentary, so, that was the biggest piece. there is the case that, as you're worried about, as i'm worried about what they're going to be spending in capex, the fact that they bumped up their dividend is a sign, i think dan was commenting about this, is a sign they probably feel great about their profitability, too, so -- big picture is, apple's franchise, their business, is in tact it hasn't grown for two years, but i think it's positioned to start to slowly accelerate, and should have a nice benefit in '25 and beyond as they build these a.i. tools that they'll charge for >> hey, gene, if i think about this over the last few months or so, and obviously for microsoft, it's much more than that, but you know, these three companies, microsoft, alphabet, and obviously meta, have benefitted from, you know, something cloud-based generative a.i., and so, when you think of the hyper scalers, what's going on with gcp and azure and aws, that's been big for them. when i think about the

generative a.i. story on device for apple, i don't have the same through lines as how it benefits them, because you just used an example, hey, siri, book me an uber to the airport, well, we all have ten years of ptsd using siri this is going to take awhile, you know what i'm saying for an apple and so, i just don't think there's anything they can come out between now and september when they have that iphone event that's going to cause a big upgrade cycle. >> i think one piece they can do, an easy piece they can do is talk about silicon, and play up that opportunity about how this is going to run some of these models better. that's going to be some benefit to, i think, telling the iphone story. but i think this other -- this other layer to it, more importantly, around applications, they're going to have to create products that are so compelling it makes people want to buy the hardware they will be successful at doing that, because of what they're doing around privacy, so, i think that's something else that could do it. agree with you on how the world and myself feels about siri. it's a pretty low bar, and

people love apple products, and i think they'll be willing to try it if siri actually did something for you, that would be a moment where you'd probably give it a big hug -- hug your phone, it's been so bad over the last seven years, so, big picture, i think they can sell both hardware and then, again, down the road, this agent-based personalized a.i., i think they can actually charge, just like gpt does, they have a free version, they have paid versions apple is going to do the same thing. it's not the same as a cloud business, agree with you, but it's big >> yeah. services revenue could be big. gene, thank you. gene munster we'll check in with you a little later on for details from the call are we going to look back at this moment and think, that was the day when apple became the stealth a.i. play, the one that had not yet benefited from a.i. pixie dust, and now is the time? what do you say, courtney? >> i mean, it's possible i think that has to be the next catalyst for them. i think it's smart they haven't been just throwing it out there just to ride the wave of it. hopefully when they say something, they're going to mean

it as opposed to just throwing it in every other word on their ear earnings but i don't think we can hold our breath until they actually announce something, you know >> i would say google has had -- hasn't had the puck sixie dust valuation, despite having the goods. i mean, this is a different valuation than google, i think -- or -- i'd rather have alphabet. coming up, it's not just apple reporting results. coinbase, draftkings and more all on the move. we'll bring you the action. plus, shedding pounds and prices novo nordisk making changes to its obesity drug as competition heats up the cost crash diet that could help them set themselves apart e tas enfa meythdeilwh "ston" returns.

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but the good news is... xfinity mobile just got even better! now, you can automatically connect to wifi speeds up to a gig on the go. plus, buy one unlimited line and get one free for a year. i gotta get this deal... that's like $20 a month per unlimited line... i don't want to miss that. that's amazing doc. mobile savings are calling. visit xfinitymobile.com to learn more. doc? welcome back to "fast money. earnings alert on amgen. reporting a top and bottom line beat in q-1. the company said on the conference call that it plans to discontinue development of its weight loss pill, but plans to advance the injectable obesity treatment. novo nordisk falling 4% in the regular session, despite beating profit estimates revenue for its weight loss drug wegovy came in light, but the company raised full year

guidance for sales and operating profit and soaring demand for glp-1s. our next guest, jared holz from mizuho is here on the set. great to have you with us. >> thank you >> in terms of this injectable drug, do we know anything about the safety profile and the efficacy of this drug, as compared to novo and lilly's drug >> we really don't know that much about it. they haven't disclosed a ton of data on it >> okay. >> i think what we're getting this afternoon is being, you know, perceived as very positive, that they've seen the interim results, whatever the company has seen, they believe it's positive. it warrants moving into phase three at some point, but we still need the phase two results, i think those are coming out by year end, so -- really, there's lack of disclosure here. the specifics are not clear, but whatever they see internally, they must like a lot >> we talked about this before, when we heard about them, i

think, but when it was entering phase two. the bar would have to be high, because there are reliable similar drugs on the market in terms of efficacy, or the cost would have to be much lower, i would think. it's still an injectable, so, there's still that barrier what do you think it needs to achieve in order for it to be really viable? >> well, so, i agree with all of that it has to be pretty close to novo and lilly, the bar is very high for efficacy. we don't really know what dose they're bringing forward here. is it the high doze, is it the low doze, if it's the low dose, seeing safety issues with the high dose, if it's the high dose, what type of efficacy versus the others, but clearly, what they're saying tonight, differentiation. what that means, very tough to tell that could mean they think it's safer, they could mean that the differentiation on the fact of being less frequent of an injection. they're going for a quarterly instead of a weekly, so, they think they can really get this way less frequent. time will tell, you know, what happens here >> company has about 23, i'm not

going to say major drugs, but significant drugs in terms of revenue, right this story comes out, they've always traded at a trough valuation. probably still trading at 15 times. but does news like this set them up, not to get a lilly valuation, but to take them from a 15 multiple, you know, maybe to the mid 20s, which would suggest the stock is ridiculously cheap here. >> great question. i think mid-20s seems super high lilly and novo really didn't get those multiples until they had proved to everybody that the drug was safe and effective and they can make it so, a lot of things had to happen right, and they did for those two. i don't think it will get to the mid 20s. could it creep up into the high teens just based on the hype and the euphoria going into the full phase two later this year, as people kind of take a bet on it? because it will be transformational, if it is great and very competitive they said tonight that they're working on manufacturing al already, so, maybe there is more upside here. i've been kind of net neutral, not net neutral, but -- the

stock price, you know, when weer with on the last time, and i came on, talking about, you know, this stock relative to novo and lilly, didn't like as much it's basically right back to where it was so, there could be upside, if this phase two is really great >> so, walk us through this timeline to get from here to actually being a competitor to lilly and novo >> yeah, my sense on timing is, if a phase three begins sometime next year, so, a year from now, you know, maybe this is a drug that's on the market end of 2026 into '27 so, they're still very far away, right? and with every passing day, you've got wegovy and you have zepbound crushing it the wegovy number's a little bit light. expectations got ahead of themselves, i think, and you still have the supply challenges at novo. very hard. >> let's talk about the expectations i'm a novo guy over here, okay i look at 2024 for novo, i see

24% earnings, light decel next year you have just talked about they didn't get the sort of premium multiples until they were proven now, we're seeing a slight decel. i know they guided up for the year if the whole story on the space, there was a great documentary i saw on cnbc -- >> yeah. >> competition is coming you come on the show every week, we talk about it, at some point, is there going to be a lot of pressure on novo and lilly if just one or two of these gets approved >> i think when we look at the entire space, novo and lilly are dominating because they were already great existing players in diabetes. this obesity market is very simple for them to kind of pivot a very similar patient population to obesity. companies like amgen really don't have any presence at all in diabetes, i think it's just more difficult for them to kind of say, okay, we're now going to be a preeminent player here. could they take 5%, 10% market

share over time, sure, but i feel like the dollar -- the dollars that lilly and novo have accumulated over time, how much they can spend and invest in the space is going to make it super tough. the data really has to be excellent. >> the other sort of, you know, competitive force in terms of amgen's drug is that novo and lilly have other trials going on for other versions of their drugs, i mean, for novo, they've got the oral readout for phase three in the second half of '24. if you get an oral pill, why do you need another injectable on the market >> agree you may not. when amgen looks at the pipeline, they are trying to kind of maneuver their version of the drug around the existing products, and if it can be less frequent, and there's a patient population that doesn't love injecting themselves every eek maybe there's a place for it, but the results have to be good. >> jared, thank you. >> thank you >> jared holz. >> michael jordan of the space i'm telling you. >> yes

>> right or wrong? >> sure. >> and he was right about amgen. the last time he was on, $318 stock, traded down to $280, right back where it is he's been spot on the entire space. i'll say this real quick, personally, i think amgen at 15 times is too cheap it's had fits and starts to the upside, but there will be excitement around, the market will try to get ahead of it. coming up, coinbase, block, draftkings and more. plus, prepping for payrolls. markets turning their attention from yesterday's fed meeting to tomorrow's jobs report how should you position yourself heading into the weekend you're watching "fast money" live from the nasdaq market site in times square. ckig aerhiba rhtft ts.gan stan te untapped possibilities and relentlessly work with you to make them real.

welcome back we're getting details from the apple conference call. the cfo saying he expects june quarter revenue to grew low single digits, even with the foreign exchange headwind of 2.5 percentage points. services expected to grow double digits, similar to what they saw in its first call first half ipad revenue expected to grow double digits and gross margins coming in between 45 1/2 and 46 1/2. meanwhile, coinbase down,

despite better than expected q-1 revenue. block surging off a top and bottom line beat cnbc's kay rini has the details for both hey, kate. >> yeah, so, both fin tech companies saw major improvements in profitability coinbase riding on strong crypto prices and trading in the quarter. ebitda topped a billion dollars for that three months and trounced wall street estimates q-1 ebitda was more than the total of all of what they learned last year. margins were around 60% in the tick rate for coinbase, which is essentially how much they make per transaction, up slightly from q-4 transaction revenue topped a billion dollars. majority of that coming from retail traders, so they tend to charge less to institutions, but that area, institutional trading grew faster, up about 133% they do expect expenses to rise slightly, which may be counting for the stock weakness block saw some growth in both cash app and the square seller side of the business it is still called square.

similar story of cost cutting. block raised its outlook for the year and gross profit and adjusted income. nearly doubled year over year. cash app gross profit was up 25%. the seller business was up 19% year over year the cfo telling me both sides of the counter were strong, she put it she cited discipline and said we have seen continued resilience in consumer spending similar to what we're hearing from some of the card companies, mel. >> kate, thank you kate rooney. courtney, where do you stand on either of these names? yeah, so, i think coinbase has been riding the retail investors, very excited about the crypto-currency. the way that coinbase's trading fees are, it's highly correlated with the price of the crypto-currencies. you haven't seen that selloff with other risk assets, as interest rates are probably

going to stay higher for longer. yesterday, there was actually news that came out that investors pulled money out of these bitcoin etfs for the first time, the large outflows, and are we starting to see that peak has the excitement already ended here with everybody getting in on the retail level? or for crypto-currencies, and is coinbase going to be effected by that longer term i would stay on the sidelines here >> to courtney's point exactly, the assets on the platform was a giant beat, if you look at the first quarter. first quarter for bitcoin was enormous and since then, it's been a difficult road >> right >> square's kind of interesting here gap earnings are starting to inflect, and kate just mentioned that a little bit, so, it's a company that, you know, was basically break even last year, so, on a valuation basis, on a pe basis, it's kind of reasonable and -- but the revenue growth is kind of 10%, 11% or so, so -- it's interesting that right as it is getting to gap profitability, the business, you know, the growth in the revenues is kind of slowed down a little bit. so, you better figure out how to

get margin improvement here, but again, this is a company that has been doing a lot of interesting things, have a few difficult years since that pull forward in behavior. they obviously highlight the cash app square is interesting, too so, this one, i don't know i'm surprised it's up. there was an announcement that there was some investigation or something like that and it got kicked kind of hard. >> i'll go off the board quickly for 500, if i may. >> oh, yes >> robinhood reports on may 8th, and that stock has done really well i think the weakness in coinbase probably makes sense a little bit, had a huge day today. given a little bit back. but i think robinhood is one to sort of levitate into next week. coming up, draftkings, amgen, live nation, on the move. the numbers out of the quarters straight ahead. and stocks rising ahead of tomorrow's jobs report what it could mean for the fed don't go anywhere. more "fast money" in two

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welcome back some more afterhours action to bring you. live nation higher, posting a larger than expected loss. booking holdings jumping after reporting a top and bottom line beat expedia dropping and draftkings higher after posting a revenue beat m and shares of carvana surging more than 33% today after a big beat

last night s-3 partners noting that as of this afternoon, investors who have shorted the used car retailer this year have lost nearly $4 billion. live nation. >> live nation a lot of beats across the board, concerts, revenue, ticketing, i mean -- huge beats they have an odd sort of accounting system. none of that matters what really is the issue is, what's going to happen with the doj? >> right >> that's what's weighed on the stock, and that's what will weigh on the stock until it is resolved. a strong day for stocks ahead of tomorrow's employment numbers. the dow jumping 322 points for its fourth gain in five sessions the index having its best day since march 27th the s&p and nasdaq also higher taefd today's biggest winners, consumer discretionary and tech. often in tv land, we like to call it the all-important jobs report but i will pause it that make it takes on less importance tomorrow in particular, because we had the fed meeting and it seems like jerome powell

really convinced people that a hike is just not a possibility it's truly off the table doesn't matter how hot things come in. >> well, to a point. >> to a point. >> price action -- i know you guys addressed it, but from 3:00 to 4:00, the reversal in the market was something to behold and i think he basically said, for all you folks out there talking about stagflation, you know, you're missing the boat here, but the unemployment el oment o element is just not in play. >> what -- >> bad number. >> stagflation maybe comes back. but short of that, i any think you're right maybe not as important tomorrow. >> i don't know. steve liesman was saying stagflation, bringing that into the conversation, is just crazy. >> well, that's what -- >> i think he was sort of quoting powell, who said, you know, i don't see the stag and i

don't see the flation. >> for him, that's a good joke >> yeah. >> do you think they're good economic forecasters there's plenty of things if you just look at what the companies, what a lot of companies are saying, a lot of consumer-oriented companies are saying, there's some underlying weakness, right? and if there was ever just, you know, some other sort of disruption that we can never put our finger on, i could see the consumer pulling back. we saw the consumer data the other day. it seems ludicrous to me that they would make that sort of comment that the idea of stagflation, or a weakening economy, seems ludicrous seriously? like, it seems like we're always on the press scipice of a slowdn and when you think about what's going on in consumer credit right now -- i just don't get that i don't mean to sound like, dour about it, because i'm not, until -- i mean, until -- i think it's so funny that so many folks are so programmed, you know what i mean, to be so optimistic about this, when we know that consumer spending can change on a dime >> i think what you have to look at, too, there's this idea of rolling recessions and different

parts of the economy have been getting effected differently we've been saying that for two years. and different parts of the economy, you are seeing that, but as a whole, i don't think it's happening yet you're seeing that when the banks are reporting, entertainment, travel. the consumer is still strong and if wages continue to increase, and that is what is justifying how we can get through this period of higher inflation, that's going to be better than the fed cutting or not. as long as the economy stays on good footing, that's what we want to see. >> jp is a fan of the show, like many people. >> jerome powell obviously. he's watching. >> but i'll tell you -- the stag is in the form of a 1.6 gdp, which was very disappointing the flation came in, the inflation portion of that, and then the employment cost index, the other day. so, it is there, i mean, if you're looking i guess it was a cute joke, but doesn't really have -- a lot of my jokes, they fall flat >> silence i wish we had a cricket noise. >> we -- do we have a license for that >> i don't think so. we'll work on it.

coming up, peloton sweating it out shares going full downward dog what's next for the faltering fitness stock? we'll debate that next. plus, a new suitor for paramount. the streamer soaring on reports apollo and sony, are, in fact, making a joint offer to counter skydance inside the investor reaction right after this (♪♪) (♪♪) what took you so long? i'm sorry, there was a long line at the thai place. you get the sauce i like? of course! you're the man! i wish. the future isn't scary. not investing in it is. nasdaq-100 innovators. one etf. before investing, carefully read and consider fund investment objectives, risks, charges, expenses and more in prospectus at invesco.com

welcome back to "fast money. peloton plummeting to an all-time low today after announcing the ceo would be stepping down after just two years on the job the company posting weaker than expected results for its most recent quarter and announcing a 15% cut in its work force. our next guest just lowered his price target bmo managing director simeon seigle is here in the studio great to see you >> great to be here. >> what are its options? >> i think -- we had this conversation when barry started. so, we were talking about, okay, what is next for peloton and we could have the same conversation now, we're just, chop off a zero, the stock was 38 at the end of the day, giving them all the credit they deserve, this is a business that has 3 million people, 3 million subscribers, closer to 6 million people, that are paying $44 a

month at a very high margin to use the service. that's a good proposition. but that doesn't mean it's going to grow. and i think in every conversation with this company, we have to decide, is there an asset that's underearning and undervalued or is this a growth vehicle? >> the numbers look good and i'm wondering how engaged these people are and if there has been a deterioration over time. automatic renewals mean the numbers can be bloated >> and i'm sure they are so, what we did, we chopped off a third of that investor base, so, if you take 3 million dun to 2 million and assume they get no pricing power on that, then decide what you want to pay for that multiple, right is this a streamer or is it now? you can decide what you want to pay for recurring revenue. the stock right now is effectively underwriting dramatically more concerns, because there's debt questions but if we were just looking at the business, and we could internalize and management could internalize that perhaps growth isn't the answer, then you might find an undervalued asset.

as long as we keep trying to grow, that's where we lose money. that the issues we've been talking about for years. where, this may not be a growth vehicle and that can be okay >> okay, so, let's say you cut spending on advertising, you cut a lot of things if you're not trying to grow, and then you have this melting ice cube, and it's -- we were talking in the break, churn at 1.5% per month doing some sort of, you know, dcf, for however long you think this subscriber base can hang out, what's it worth >> and so, that's why hearing, went from $7.50 to $6.50 sounds comical, i get that. at the end of the day, the question is, are we taking that negative terminal value, but we're saying, there is value in that, are we saying that if 3 million people, or 2 million people are paying $44 a month, then we're somewhere above a billion dollars in recurring revenue and that throws through a 65% to 75% gross margin. sitting on your -- being in your house, jumping on a bike and paying $44 to do that is a beautifully healthy contribution

to the company the problem is, you'd come back and say, why do they keep losing money? and the reason is because -- in my opinion, is because they keep trying to grow they pour all that money back in r and d is 11% sales and marketing is mid 20s >> wow >> they have a huge office right near here, there's -- 600 to 900, depending on the year you want to look at, at gna, and that's what we're receiving happen with these cuts if i told you, we have a business that's generating $1.7 billion of recurring revenue, and that's jeb rating over a billion dollars of gross profit dollars, you'd say, even if i'm going to handicap that lower, how low do i go? if i keep taking all that money and trying to chase for members that already bought their bike, because we had a pull forward, that's no longer controversial i used to argue that people get that the pandemic was a full forward >> value in the name, and the hardware, i happen to think, is very good. is this a bolt on for somebody, or is that not even in the cards anymore? >> i guess it's always in the cards and it's been a

conversation there have been a lot of players that have been talked about. if we think about the different companies, and this is above my pay grade, so, this is just my own musings, nike, lulu, they entered the equipment space, and they dropped back. they make a lot of money selling shirts and shoes you look at apple, amazon. the whole appeal was, it was this -- i own the best possible customer for material part of their day. you asked about engagement, does apple rather, do they want the melting ice cube or do they want something that's up here and then amazon's already selling the bikes. so, what do they get so, i just -- i think that the conversation here feels much more of a, does someone see value in the asset from a cash persp perspective? do you run for cash and then there's value in its underearning i think to want to buy it for that bolt on, you have to believe in that growth which, the company does. they were explicit on the call i just don't know if we're seeing it. >> simeon, good to see you in person >> great to see you.

>> what do you think >> it's a $2 billion enterprise value. the argument that he makes about that recurring revenue stream, and you think about 45% gross margins is very near what nike's are. this is a lay-up for nike. if you think about the engagement, you think about adding that recurring revenue model, the sales, the marketing, the direct -- we've been talking about the direct to consumer for nike for all this time, so, to me, i you this it's really interesting. does it happen from a lower level, maybe but it seems like an easy one. you mentioned lulu and mirror, that wasn't good hardware. that was a bad acquisition this would be good coming up, shares of paramount surging. the details on the companies l-shing up to make a big alca offer next. more "fast money" in two we heard about the farmer's dog... and it was a complete transformation. his coat was so soft, he had amazing energy. he was a completely different dog. it's a no-brainer that (remi) should have

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welcome back shaerp sh shares of paramount surging as apollo and sony are interested in buying the company. that as paramount faces the expiration of a ne goesh yating period with skydance julia boorstin has more. >> a $26 billion all-cash acquisition of paramount, according to a source close to the situation. and apollo and sony understand that paramount cannot engage just yet, because of their exclusive negotiations with skydance that exclusive window expires tomorrow, of course it could be extended skydance and its consortium,

which made its best and final offer sunday, they could hear back from paramount's special committee with a recommendation on next steps as soon as today that's also according to sources. meanwhile, the ceo of cbs and one-third of the office of the ceo of paramount was in a meeting with entertainment journalists today to discuss the fall tv schedule at cbs. he was asked about morale at cbs, and he said, it's a challenging time right now we can only control what we can control, going on to say, we have no idea whether a transaction could happen or not. cheeks also said that while he and the others comprising the office of the ceo, brian robbins and chris mccarthy, are finalizing their strategic plan, he said they will continue as heads of their divisions cheeks said they're planning for the long-term, but melissa, things could definitely change for this company at any moment >> presumably, julia, if apollo and sony were to prevail, that would be buying the company only to break it up, is that a correct assumption, or >> well, i think it depends on

what sony wants to do. sony is an entertainment giant it has the studio that would be a natural partner for the -- for the paramount studio, but then there's also cbs, another piece of this, and then paramount plus, the streaming player, so, certainly, a number of different assets here, which could be split off. but a lot has to happen before that, julia, thank you how are we feeling about paramount, karen >> you know, it's a strange situation. the three ceos, that -- they're just -- that's a placeholder, right? sounds like they know that interesting, it's a delaware corp, normally, they would have to -- they would have an obligation to maximize value, however, shari redstone controls it maybe negates that. and they don't have to do thinking else beyond that at this point maybe they have more, i don't know >> quickly, i mean, $26 billion suggests a triple from the market cap, however, all the

dealt, as well so, where can the stock trade if the deal gets done at that price? and the math suggests, what, 16ish, you can -- you probably have it in front of you. >> ish, right. >> so, there you go, $13.50 to 16, if you want to make that s.ay, there it i >> up next, final trades

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one more check on apple. shares holding onto those gains after announcing the biggest ever share buy-back in company history. tim cook saying they have advantages in a.i. shares currently at their highest since february stock up 6% plus final trade. courtney >> dwo, we like emerging markets. starting to see china coming back around, so, you want to make sure you are invested here. >> karen >> yes, i like citigroup >> dan >> you know, i obviously usually peloton a lot and i use the

tread. i feel like you probably have a dollar downside, maybe like $4. >> it's an option. >> yeah. >> what? >> guy >> you're watching the sixers game, i know msi, check that out, mel >> all right, my mission is simple to make you money. i'm here to level the playing field for all nvestors 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 other people want to make friends. i'm just trying to help you make a little money my job is not just to entertain but to educate and teach you call me, 1-800-743-cnbc. tweet me @jimcramer. i hate rooting against the u.s. economy. but that's what the bulls have to d