Google’s Chrome Dilemma… And MicroStrategy’s Crypto Connection 11/21/24
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optimize life from the and that market decide in the heart of new york cities, times square. This is fast money. Here's what on tap tonight. A target on big tech alphabet and amazon plunge today is regulators across the globe when we see break ups for these beameth. And what could IT mean for the socks plus banking on gains, retails and money centre banks leave in the market today.

Is there more juice left in the trade in which name should be bet on? And later, a bit point bananas a the crypto o hit another all time high and inching closer to that key one hundred thousand dollar mark. Meantime, a key reversal and cheers of microstrip. Gy, what's next to the stock? I'm little to come.

You like consider a beat the anz on the destiny tem sea where current find and then and and courting R, C, start off with a massive fall up from google anti trust wales shares of parent company alphabet dropping five percent arashi a hundred billion dollars in market cap in just one day. This coming after the department of justice recommended that google sell its chrome browser to fix what regulators call an illegal monopoly. And online search reports of the D O, J.

Recommendation had come out earlier in the week, but the stock wasn't rattled until today's session. Aye javis got more on this. Amy hate their mysa. Remember.

this is just the D. O, jays ask and google will have a chance to respond in court. Ultimately, it's going to be up to the judge, and we don't expect that decision until the summer of twenty five.

What the government is asking for here is a break up of google, and we haven't seen something this sweeping since the government order to the break up of microsoft in the early two thousands. But remember, that decision was overturned on appeal. Now what the D O J is asking for here is to force google to sell the chrome browser, which has about sixty five percent of global browser market share.

And they're also asking for google to sell android or for the government to put in what they call behavioral remedies that would block google from using android to favor its own search services. Now finally, the D O J requests that google be blocked from paying apple the billions of dollars each year that he pays now for default placement on apple devices. Google reacted to all this harshly in a statement this morning saying D O J chose to push a radical, interventionist agenda that would harm americans and america's global technology leadership.

D O J wildly overbroad proposal goes miles beyond the court's decision. IT would break a range of google products even beyond search that people love and find helpful in their everyday lives. So this fight goes into the final stages, with the government making a big ask of the judge. They are going to have to wait and see how we respond.

What is the back you is, is in the thinking, aim in account or experts that the judge is unlikely actually pursue now, right? Break up simply because microsoft break up border was overturned.

That's a really good question. And I think the judge is going to have to take that president into account. And if he does push for a break up to make sure that he does IT in such a way that IT is stronger on appeal, because there's no question this is going to go to the summer of twenty five before the judge makes this final decision. And just no question here that google will appeal this thing right?

aye. Thank you. aye. Java and dc. Google not the only big tech name getting hit with anti trust headlines today.

The e reportedly considering a probe of amazon's e commerce business and whether the company's prioritizing its own brand products. If found guilty, amazon could be found up to ten percent of global annual revenue. I know where we wanted.

Start with this. There's over arching regulation on big tech on the google story is very interesting because the stock is definitely reacting. We hadn't really seen that shocking.

Ly, I mean, we've said on the desk, I think, for a decade talking about the headwinds about tory stuff, and we ve just kind of been very dismissive about what IT means for the stocks. And I think to the point that image just made is like, yes, here is a proposed remedy. But yet IT has to be, you know, I mean, it's a whole host of things that has to happen.

The fact that I lost one hundred billion plus in market cap is very oud to be the other thing, say. So the ftc or the D O J basically has suits against the apple, amazon, meta. I don't know they have against microsoft are right now, but all those companies actually have beef with each other and they actually supports some of the other cases they are being brought against their competitor.

So it's a pretty weird situation. I'll just say this is like, these are our national champions. Make no mistake about IT. This is the place for innovation.

One of the things that I really underestimated over the last couple of years is just how pissed off so minutes of the tech community, so much the investor community, so much of wall street you has had thinking about wall street. Okay, these guys who do a lot of ma, there's been no ema in the text base because of the regulatory overhang. So a lot of these folks are really upset about this. That would be interesting to see how this plays in the twenty twenty five. But again, I think some of these opportunities when you have a stock down five percent of is something probably good buying opportunities.

Yeah, I tend to agree. I mean, the ask that's really pointed and even as well, that's the most you can ask for what everyone to ask for, right? So whether that actually ever comes to if that in fact came to pass the stock could be a think a fair bit lower than here.

However, between here and there is there's a lot to have happened, right? We have any number of google's response. also.

I think that the landscape is changing anyway in search. I think there was just a little while ago, another competitor know who wants to enter into search. I also wondered, so who would you sell chrome too?

And that's the sticky point. No, you can figure out who .

would natural .

to make the search, right.

That's why they don't have two thirds of sea. I mean, to think about IT because the case here is that chrome, if you have chance and it's already embedded, you're much more likely to search on google, right? But if, let's say they sold IT to open a eye, who's working on a browser right now, well, all the sudden there is going to be lots of choice where that search goes. To open a eye right now is a search entry for a sense of purpose. So I mean, to me, I do think there's not too many buyers of IT for regulatory reasons.

but I think the buyers potentially very powerful as well. So um i'm .

so no, no, no, I don't even think it's where the big grievances I mean, the big grievance is, is really more on the ad tech side, which is another lawsuit that just been filed. Again, all this is timing to rush stuff through before a new administration comes to. I realized you can make an argument that the filing in twenty twenty on search is something I had a chance.

And maybe maybe the previous administration, certainly this administration, but we are talking about many years and possibly multiple administrations of D O, J. Pushing on these company. So it's not as if the trumpet administration would necessarily be looking to unwind all this, but that's the sense you get by the activity over the last couple days.

You get the sense that there's some rush to actually get stuff in before this next two point o trump, possibly this mentals years and years. And again, I would just get back to where are the grievances. They're really more on add tech, more for marketers.

more for advertisers. Is this a buying opportunity?

I would say. So I think realistically, when you look at what is actually being proposed are going to divest chrome theoretically that if IT actually goes through, this is relatively a small part of their actual business, right? I mean, it's been estimated will probably diverses for like twenty billion and their market cap is like about a hundred times that.

But I think the bigger issue is the regulatory concerns and just in general, that environment until you bring up the current administration because every saying OK with trumpets in there, me less regulation. But when you look at amazon, this isn't just a us problem. This is coming from abroad as well, playing that.

The question is this a global regulatory phenomenon that's just starting? If so, that could put pressure on these companies. But short term, I think.

is probably in over action. I think though, if you think about what the the number would be, twenty thirty billion IT is really important to their search business, right? So I read a that that if you were gonna go from international pore to chrome, your fifty percent more likely to do a google search.

Think about where the default. So if the ftc is basically saying this is non competitive, right? It's hurting you. Consumer choice, that sort of thing. IT is important.

Then if you think about dominance that google has in search, right? And if you'd give that off and you don't have that connectivity to the search process, then IT could be a huge hit to google. But again, to your point, again, it's gonna .

probably at least a year or two away. Summer is when the judge decides.

and then google will peel that could .

be tied up for years. Let's add deepwater asset management managing partner gene monster to this conversation. Gene, how are you thinking about this? Ask of judge meta.

Well, my initial reaction is to go to the worst case scenario, which should be, in fact, that h chrome gets fun out. In that case, google is call IT ninety percent search share within kind of the, think what I consider developed countries, ninety percent shirt chairs is gonna drop probably goes to eighty percent.

And in that case, you probably get a search business that was growing at ten to fourteen percent over the past several quarters to quickly drop down to low single digits, may be potentially even going negative for a little bit. So this says the reason on the sock down five percent is that this really gets to the core of half their business, which is search. And they will claw that back over time.

If this does get spin out. People love google, and they will slowly come back, just like they did with the andean when they switched out their core and firefox. And so that's the first place my mind goes to.

The second place is what's the probability of this actually happened? And I think the panel. Outlined IT properly. I think it's it's the odds of this anything actually gone anywhere, although not just because it's a difficult task to get a big spin out like this, but they're just simply as impress dence to IT.

And so I think that ultimately ah this two shell pass, I do think that there are other things within what the department justice and the ftc are doing against big tech. It's gonna AR its head the next several months. But I think this chapter around chrome getting spotted out is going to just kind of blow over effectively.

Let let's, though, pursue that worst scenario, pathway gene. I mean, what does what does gi look like without a chrome?

Well, IT doesn't look very good. I mean, that IT goes back to this ninety percent share that is going to drop. And german, I needs its its right now, I review is riding on top of search.

That is the mechanism the google is fighting, open an eye is using their search dominance to do that. And so that that is that's been a key piece to this puzzle. The puzzle of of gina is to leverage search.

And so anything you do, anything that happens that has a negative impact on their search here, this loosely circles back to something else that was buried in this department justice letter that came out was related to apple and h their deal, related to a their search deal. And on both of these, if if that deal got avoided, that would have a negative impact. So this does I think it's a very low probability.

Um I don't think this is the a topic on google. I think it's perplexities the a topic. But since we're talking in a regulation here, I think it's a something that if IT does happen, the stock would definitely go lower. I mean, care mental go lower. I Better go another down, another ten fifteen percent on that genus.

current things for being on. So about this default, is that what would be the default? Or is IT there is no default and you have to choose from a menu, in which case you might very well choose google to get back your point of keeping a good percentage of market here. Do you know what what the remedy would be looking for?

The remedy would be so if com ga span out, what would happen is when you start up your roster, they would Randy ze a, which option comes up first for you to select. And so there that would be some sort of a equal playing field to do that. Presumably people would look down and and check and and go with google.

Uh and so I think that's why they're not going to lose a huge uh, percentage of their shares. I think a lot of people, but that's probably what the remedy. Uh, ultimately, this chrome business without a deal where google would pay for placement or somebody paying for placement, that business is a horrible business.

I don't know who want. I won't pay twenty billion. I won't pay five billion because out of fears that the department of justice would block any these kind of payments.

And so care and I think that it's irani ized peace. Um I think that anybody who's interested in purchasing in this would want to have some assurance they could sell placement on that. Hey, gene.

you just bench in the apple search deal that they pay about twenty billion dollars. That would be google to apple fifteen percent of their profits. When you think about that, is there way that, that deal could be blocked and not the chrome deal? I'm just curious how you think in about that.

I'm a big believer in apple. I think company's going to have accelerating revenue growth with the iphone. With the piece that keeps me up at night is what happens with that search deal. And I came up on the google the last earnings call soon. Dar said that there would be unattended consequences if, in fact, that deal got avoided.

But the fact that that language a reappeared in the department just in this chrome, and not only did the language reappear but is almost outline a language to the effect of don't try to work around this, don't try to work around us, the department of justice in IT. And so dan, I think that um again, it's a low probability because this would be very negative event. Think there's just a lot of lawyers on google and apple that would fight hard for this.

But if in fact, that did happen, the reality is that that's your numbers are right. Minor pretty close to that thirteen percent, call IT, but it's A A measurable impact to earnings. And so i'm surprised at apple wasn't in big believer in apple. I own the stock. I think it's it's going to do well of the years, but i'm surprised this dog and act, react more today.

Jane, great to see you. Thanks so much for your time. Thank you, team monster. I want to go back to the point that we were talking about begin on the shows, which is why today, why today, of all days, the google decide to react to an anti trust headline when so many headlines are passed weve SAT here on the desk and nothing happens to the stock.

Well, I think IT gets back to what the timeline is, both in the context of a possibly change in administration. But I think IT also gets back to really what the the upcoming gates again, december twenty, google producers, I think their final remedy, then you get into this post discovery period and then you're you're really into the summer.

And and I just think at some point, there has been pressure on the company to respond and respond aggressively. And I think that's part of what that is. And think about classic negotiation over reach on each side.

And when you talk about google remedies, you're already on some level, acknowledge ing. Okay, we'll do X Y, N, Z. And I think it's it's important for them to get out there and act reasonable even though they have to be very vocal in opposition.

Let's go to in video now. The role coast arrive for shares since earnings last night, the AI darling initially felt more than five percent after hours, but open today's trade in the Green rising nearly five percent and then fell back into the red midd day, down as much as three and a hf percent. Claude, its way higher.

And to finish the day just above break even, we are talking here. We are saying, what does that do tomorrow? You said down five percent. I set up somewhere in the middle. So, and Price .

action tells this is they're not done with this one, know. I mean, so again.

you know that quarters day .

and what is done me.

I mean, because the ones .

who bid IT up like a thousand percent over the, you know, three years or so, I I listen. And we've seen the hyperscore, their biggest customers, kind of fall, by the way, side, microsoft kanker, google kanker going to. Amazon still doing pretty well.

Meta still doing pretty well. Super micros not doing particularly well. Those are their fun top customers, fifty percent. So they're just not beating the way they were before. Soon later, they, him, are gonna not be as impressed anymore with the service, you know, the magnitude de to the beats. And then ultimately, this can become a story like some of these, otherwise a bit.

They were OK, though, with a smaller beat, right? Tonne, were you? O, K, with a smaller beat?

yeah. I think this really wasn't enough to take the stock down or and I wouldn't be surprised of a trade kind of flight here because I also wasn't enough to be that cattle is tired, but realised this is the fastest growing of your mega caps. You're seeing this risk on rally, right? And you're seeing that with bitcoin.

That is where the retail investor wants to put their money they want. The thing that's doing the best, which is an NVIDIA, is in many of your etf, which as people put money and it's going to continue to push out higher. So not where am adding our money. Most reclines are over allegations that and sound so well, but I wouldn't get out of that .

by means I will play the role of the invidia OK. Okay, because I was a smaller than expected beat, right? Didn't I didn't match the whisper number and IT struggled higher and IT still managed off of record highs, still managed to close .

higher the table and the okay, i'm long so after, okay.

I are you the table for .

in real life .

at these levels.

they successful ly downshift at all expectations last night. I mean, to me, we have a more modest outlook for black. Well, we have a dynamic where we know, if anything, there's a slow transition going on.

And yet it's trading at thirty three times forward, twenty six to me. That is something that ultimately look around the market right now considering the growth you're getting from the video. I mean, know, I know we would like to sometimes be revisionist around here.

I mean, I feel like I felt this way bad. And videos for a long time. I think it's it's a case where this is growth at a reasonable Price given what their growth is.

I think you had to listen the conference call to me. That was where all the context was. And jen wang was very, very bullish about the the being in the early innings, right? And that we have tremendous more growth.

And um I think that this this sort of change over from hoper the blackwell, which they cited, alright, we will see lower margins as blackwell skills and that won't happen probably till the beginning of April. So so we are going to see bargains go down. But IT is not a demand problem, right? So that would be the problem that the Beata's raised wasn't enough if it's because demand isn't there. That is not the way they painted IT. And I tend to agree.

tend to believe that stand .

is not the and so many other things that are telling you that we're going to have over capacity built out. If you look at so many other names in the ecosystem, I will say this though to the bulls you saw dealt pretty well today. You saw micro act pretty well today. So you saw like a reemergence of some of the ecosystem that had come off pretty hard.

You can be right, but the problem here is, when do you .

pull the trigger itself? This point, a great one. If you've on the stock has become such a bigger part of your portfolio, soon or later, you have to do something because you are so concentrated in this one name.

Coming up for watching gap on the move and extended trading shares are higher after reporting results to details in the numbers in the quarter. Next, plus a third class ticket to airline technical nice, the head and tail wind get IT had entAiling in the space, in the charter master's playing pairs. Trade ahead.

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Welcome back to fast money shares, a gap pop in fourteen percent after beating top in bottle estimates, raising its guidance ahead of the holiday quarter. c. Correa joined us on set with more details. Court.

I feel like I had so many stories over the years, so many CEO, but IT looks like they're starting to gain some traction or so. Well, as a good point, they beat earnings per share by a decent margin. Revenues a be slightly in line kind of depends on how you want to look at that.

And then comparable sales maybe slightly like, but they were positive overall. You take all those brands together. And then the gap named like brain actually turning on really strong sales of three percent or may be was flat this time around.

And that has sort of been the winner. But they're talking about gaining market share seven quarters in a row at old navy, which I thought was really notable. And then the fourth three quarter of puzzle compromised gap, as let us seems to maybe be inflecting, those comments are higher by five percent to just at a time when apples' really seems to be taking off.

I know you spoke with a vo c vo co. That was on here recently. We talk about hello, but if what is still trying to hang into this game.

And so IT seems like they're doing well. The call is ongoing right now. They're continued to talk about the financial rigor, getting back to basics when IT comes to the finances and the Operations. And then that's what is going to help these brand take off. So you know, we'll see obviously.

new denim setts might .

have also helps dm guys. So I feel like anyone should know IT should be you, which also, by the way, usually means you in to buying new tops and new shoes and everything .

to get is right. Yes.

and go ahead.

These with genes. And then we call that the canadian and taxi, to which actually very popular right now, danny on dena, believe I oh very popular.

You would be worried or canadian friends?

No, no, no, you would be on trend. But yes, so far, you know, they're starting to be maybe little bits of trends in the right direction. Forget that they ve got a long way to go. And but in republicans is definitely still a point that really needs to be fixed. Men stronger there than women, but overall business week er there.

So basically less bad is great is I mean.

look at that. Even rostov was reported after the bell, not a great quarter and those shares were higher as well. So really interesting some more detail from our traders, and I want to speak to him actually tonight, and then we'll have the interview tomorrow just about a sort of the intricacies of the appearance selling and directionally is a weaker as that, that IT seems like IT depends on who you are. So maybe it's not a consumer thing and maybe it's really down to what you're selling for. thanks.

Thank you. Agan court in Garcia, what here?

I think there's a lot of positive to be said about this. They do seem to be closing a lot of stores in there and there. I think i'd that is actually could go either way, right? Because I think some of this you're going to see like with nike, there actually have not a shift away from method za and tories traditional, but actually starting to see them gaining share. I think that's actually really positive sign here, especially with a lot competition like an alone living here. You're not in your heads.

I love you. I ve the only you train. You're talking about what I just say. This says our chief denied respondent. Here I find the leave I really interesting right here is down forty percent from the fifty two week trades at a very reasonable multiple edec that were definitely a downgrade in their guidance. If you go back about six months, i'm seen IT more and more people I see IT at my house, oh, my kids that were and leave us again.

I have just loved the margin improvement here. The growth margin was good. The Operating margin was good.

I think they've got some good momentum. I'm sad. It's up so much. I have two small opposition. I should have none more.

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Welcome back to fast money shares, the united airlines out performing delta this year, but could IT be a short flight for the name Carter racks and worth and worth charting with the paris trade on these too high fires chart. Master Carter.

yeah, obviously there's a high coral lation. If you look at any rolling five year period, these two airlines, they do the same thing. And of course, the big is about eighty five percent coalition.

But the comparative charge here tells the tail two lines, two colors. One has doubled the other over the past to twelve months. Ted, of course, being the the one that's really so far ahead.

Look at a three year comparative chart and you start to see here just how highly coral later they are. And then of course, this recent period, really since the August law, when united up one hundred and fifty percent or is dealt up seventy. So that's one of two ways to look at IT.

Another and really more accurate way is to look at what is known as a ratio chart depicting relative performance. And that's what this is going back over ten years. It's simply united, divided by delta, which gives us simply this when the line is going up, unit is not performing.

When it's going down, it's underperforming. It's not about the scale. Next generation three in a row, if you look at where IT is in relation to one hundred and fifty moving average, the united is so far above, just as it's been in the past or below that mean reversion becomes highly likely final chart. We try to animate the peaks and troops of this relative strength line one line, the relationship between the two. And at this point one is right by my work, to be short, united as a pair, and long delton.

All right, caring while we have you, we've got ta point out your trade. And microstrip. Gy, yesterday you said to sell at all. Today I looked like announce reversal day hit a record high um and then if IT closed basically on its lows on very heavy volume, what is next for the .

yeah that's what's known as a curists sal day and um as you point out, IT IT often reflects exhAusting meaning something that's a persistent up trend that then on the day in question has yet shocking new highs gapped up at the open, in fact and then starts to slip and then falters, closes almost on the low and volume expands dramatically to a record IT IT Marks a reversal of a long standing downtrend or in this case, uptrain.

Alright, Carter. Thank you. Carter backs and worth. We're going to trade microstrip.

Gy, just ahead. Hold those thoughts. Let's get to airlines.

So i've always said that airline stocks are your trading stocks, and there's been a reason why investors have entrusted airlines for years. And we also love the airline iconium. So resume right? Revenue per available, see mile.

So in delt this case, the reason now an investment and not just a trade is that the raim, which was about fifteen cents or point one five five years ago, is now up to eighteen. In other words, these companies are making more money airlines, but dealt this specifically, and they layed that out in an investor day. Today, they put a three to five year target. I think the stock continues to go higher because the companies rerating on a multiple that the market was unwell to give IT. And I think I think we're there and I think they've .

always been really well position. They have a really clean, baLanced I compared to their peers and even when you look at them precoe levels. So I would absolutely take something that's been under performing U A L when they're so highly like Carter point IT out there. I would absolutely take that trade.

I jets is probably the way I would do IT. I just cut shorted and i'll tell you why. Net jets, no, the jets, the etf, you is fifteen percent of that. Delta, about twelve percent of that. I think a sign of the top is delta.

Just .

announce what a little too much here, people, that the sort of behavior that you would see when things you're getting a little too saughton, I think jets is actually up forty five percent. I think that's a well distributed etf I would sell that.

Tell me, cry pda crushing at bitcoin, nearing the one hundred thousand dollar level in proxy microstrip gy, hitting records of its own, the big bet they are making in the crypt to, and how options traders are handling the for fast .

money .

to welcome back to fast money .

stocks closing in the Green today, the doubting four hundred sixty one points, I have to be up a half a percent, its fourth positive session in a row, and the nx squeeze out a small gain. Shares of disney slightly higher today that socked now up twenty six percent over the last three months as a media giant C E O search continues disney planning to replace corn and chief bob I gar in early twenty twenty six conchas, also higher today.

The company yesterday announce plans to spin off its cable T, V channels, including C M B, C M, S N B C, the gulf channel and others, and some changes to the S M P five hundred to tell you about texas specific land will be moved from the mid cap in next to the benchmark S P five hundred, replacing marathon oil. The changes take effect tuesday in november twenty six. Meantime, bitcoin hating another all time high, getting ttl zing ly close to that one hundred thousand dollar milestone.

One major beneficial, the cropt a currency rise has been microstrip gy. That talk also hit new eyes today before that huge reversal that we talked about before, shorts seller ron researched, calling a top in the stock is set up more than five hundred percent this year and with more than three hundred thirty one thousand bitcoin on its baLance sheet with fundamentals like earnings even matter IT hasn't let's bring cancer genuine management director, equity research analyst Joseph buffy, joe, great to have you with us. The stock has been up more than bitcoin itself. Um so how do how do you make out the tales of the stock in the move?

Well, I think millis the best way to to look at microstrip gy is you've got an Operating company baLance sheet that can take advantage of equity and debt to be able to opportunistically buy bitcoin. And the the company embarked on their bitcoin acquisition strategy. And I think August of twenty, twenty.

And since then, since then, microstrip gy is the best performing stock in the fortune five hundred. You called out that it's outperform bitcoin. It's outperform bitcoin by double or more in that period of time. And so you know you look at, you know, investment companies, they can leverage an Operating company baLances to to exploit the opportunities that microstrip gy has. That's that's the high level.

So how do you think about the premium of which microstrip gy trades versus bitcoin and what that should be? Because I can go to the sky I would image. And today, IT was a key, and I was a key reversal in that IT hit a record athi open close at the lows on very heavy volume moon.

This was through a signal technically. That maybe things are gona slow down. How do you think about that premium?

That premium is clearly a point of discussion. foreign. The premium has expanded the premium, which is basically the value of you know the value of stock relative to how much bitcoin they have on their baLance SHE. That is what the premium is. It's over two hundred percent right now. So you can look at that as a risk, but you can also look at IT as an opportunity for the company because, again, they've got an Operating company baLance sheet that can exploit that premium to continue to buy bitcoin. And you know, just this month, the company has a acquired another four billion dollars of bitcoin using equity and earlier this week, also provides a very successful convertible notes offering to raise another two and a half billion, which we expect the company will put to work or perhaps already is putting to work in acquiring more bitcoin, exploiting that premium to be able to expand bitcoin purchase .

gets current. Thanks for being on. So if you were to back out evaluation for the Operating business, I have no idea what that is.

What is that? And so then you back into an ebit Price for bitcoin. Where where how big is that premium when you do that exercise?

sure. So when when microstrip gy embarked upon this this bitcoin acquisition strategy, theirs, you know, IT was mostly a software company. IT was a very successful business intelligence software company. The bitcoin strategy has taken on uh the the majority of the enterprise value here and today that the software business is less than ten percent of overall enterprise value here. So when you back that out uh and you do you know perhaps to some of the part analysis looking at that as well as uh, equity and debt on the baLance sheet, you end up you end up with a two hundred percent premium, which is basically uh, the value of the stock versus how much the coin they have on their baLances.

So basically is the same as the same. I mean, not creating business is so diminished that it's the premium is the same. You keep back IT out.

yes, but the key is as they have an Operating company baLances to be able to exploit capital markets to a creatively by bitcoin, if you were to look at this saying comparison to a big coin etf, right, they don't have an Operating company baLance shit.

right? What's the Flora in your view for the stop? What do you tell investors?

You know the risk is the Price of bitcoin. So you have to look at a that way. No, I think the company uses leverage intelligently.

Don't take their that anywhere above thirty percent relative to how much bitcoin they own. Mean, the convert they Priced early this week had a zero coupon on IT. IT was a very successful deal. So the strategy is to continue to exploit the premium to buy more bitcoin incredibly. I think good analogy for people is, you know, think of corporate emini.

When a business acquires another business, the first thing investors ask is, well, how a creative is that deal to earnings per share after extra share assurance after uh, ema related interests spans? And what's the time period to get to that a creation goal? So here microstrip gy is not buying another company, but they're buying bitcoin are creatively. And so at that premium level, after they buy more bitcoin, every shareholder that owns microstrip is going to own a little bit more bitcoin per share. And you don't have to wait three years for the merger related syn ne gies to kick in to get to the Operation.

right? Joe, thank you. Nice to talk to you. Joe banfy, alright, so he laid out the case. It's got the Operating company baLance.

He is superior to just buy a bit coin. Tf is IT. In your view, this isn't a bet.

Would you rather be coy? T, F, for microstrip. Gy, expensive leverage because again.

you can talk about thirty percent leverage, but thirty percent leverage and anything could be a cancer. Something falls eighty percent. And and i'm not saying IT well, but this is a call on bitcoin.

So this is an option. This is an options market. How many investors do I talk to this? Say, hey, when do they can have options on G, B, tc? When can I sell calls when? So I mean, that's what this is. And the only real questions I actually had for joe or is there is their regulatory dynamic. And it's not like it's a big surprise to anybody.

But at one point, that kind of was, in other words, when they transform this company into a company that had software business and now they make no mistake about IT, by the way, yes, it's kind of genius and it's all this time. It's interesting. This is on a day when gary gangster or announce his resignation.

Bitcoin rally and sympathy even though we expected this, but the sec has been opposition to to big coin. And that made options markets in a whole lot of other ways to get this kind of leverage very difficult, which is what's made this almost ingenious um IT will be forever when bitcoin is unlocked. right?

At meantime, big bets on if and when the bitcoin will cross one hundred thousand dollars, they are in in take and fast among option trades. Mics got the latest on the action at bitcoins record, mike.

Yeah, so I B, I T M in the thing has only had aborted on that for a very short period of time. But they're going gangbusters, already called up paying puts by about four to one today. The most active contracts were the january fifty five calls.

We saw twenty four thousand or so of those treating for about six dollars and forty cents on tract fires. Of those, our betting is about ten percent upside in bit point between now and january expiration, which is about eight weeks away. And one quick point I would like to add with respect to what tim was just saying. When the issue converts, that gives access to an entirely new class of investors, this income investors who can buy big point, can buy I V I T, can buy options on any of these things, or can buy the futures and get exposure to the asset class to a fix income and instrument former converts. And I think that's kind of what Michael sailed on to there.

Yeah, that's a good, good point. My thank you. My co coming up financial flexing big banks well in the Green today as that continues to alpert M A broader market this year.

But the good times last i'll debate that and shares a zillow getting a boost by animals or knocking the door that trade when fast money return. Welcome back to fast money banks getting a boost today with the financials one of the best performing sectors in the S. M P.

The money centers all well in the Green golden sex, leading the charge up more than two percent. IT was the biggest point contributor to the dough, and the Carry regional bank T, F, kept up, with the gains up almost two percent as well. What is giving the banks a booth carren?

I don't really know. I think everything was up today, so they should participate in everything being up. I think there they're always been less expensive than the market on A P E basis.

That gap is closing a little bit, but there are still I mean, to me, they've traded higher than this in picking Jamie more than just because I love jami diamond. But I think it's on the expensive side for them, but it's traded higher than this. And I think that all the reasons of the markets going up, less regulation and economies no set free and all of that helps banks a lot.

M na, all of that. Um so i'm hanging on. I know somebody downgraded this week. I'm not doing that. yeah.

And I think some of this is that like broadening out of the markets, like when you're in the markets continue to do well, even when like your mega ap seven are taking a back seat. IT is a really good thing that the markets can probably ue to run. And people are starting to look at the cheaper valuations and those things that are Better position arguably in a new administration. I think the only like fear is that is some of that pull forward happening like has a lot of the optimism with the adult ministration already been Priced in. Thought you might only hesitant that, but I do so really like the banks, and I think they're really well position here.

so I won't stay in. What's funny to mention that? I mean, I think going back to late sixteen, into early seventeen and how many times in the dust we say, well, is the pricing, you know mean, that kept on going and then I kept on going into some to regulation and kept going to tax cuts or whatever. I think it's a different market right now because I think you would argue even jp organist trading at a multiple that we haven't seen in a long time and relative to tangible book in the leg. So we're going to a point where a lot of stuff is getting stretch from evaluation, simple.

but I don't think so. I think there's five things that are working for banks, and each one of them we've been wanting over the last couple years, including lang growth, a steep yellow curve, the ability to give capital back, the fact that regulate dynamic come up. And now we have A A comment back so I could I can make an argument. They pay nice tips. And I think there's a reason to sit these named long term.

coming up some fast movers on our radar today, how our traders are handling the up and down zillow, P, D, D holdings and the pot stock. That's next more fast one into welcome back to fast money. A couple of stock moves catching your eyes today.

Let's start off with zillow surging almost six percent to three years hides the real say, saw getting a boost from strong housing data this morning. Existing home sales rising nearly three percent in october from a year ago, the first positive year we are read in over three years. Karen.

okay. So that we would why would he be up much that, that is the direction that they certainly need. But I do think though, I mean, I like zero a lot.

I love their last quarter. I love how the fly will is really working. And if and if existing homes sales actually ended up being more than just one month's worth, that would be fantastic for them. But I was surprised the magnitude of the .

move here yeah especially because existing himmels is for october, they still captured the dip in mortgage rates and now rates are higher. And you to wonder what that data set is going to be next month.

We've been talking about zilla for a while. Parents been talking about IT. I nimble on some a few weeks, go on a long term portfolio and and I think it's time to add. And again, it's never been about at least for the last couple years of about the valuation here is really um and disastrous scene was obviously when they get very acid heavy and that was really the day the music died for this stock. I think it's started to pick up again.

right? cheers. The P, D, D. Holdings dropped in nearly eleven percent to day.

The parent of chinese e commerce site mo posting profit red meet the came in below estimates for the quarter. The sock was the worst performer in the nazi one hundred today. Corney, when you make a that yeah .

they think he's investing in china, has been really frustrated for a lot of investors because IT just has not come back the way that people had hoped that wood and that stimuli ous clearly is not coming deferment, but I thought is ensuring there were really citing competition issues. And so you're seeing with SHE and you're seeing amazon is actually now coming with a lower cost competitive.

I mean, there are real problems for them when you have these other people coming out. So I think it's something to continue to watch. I mean, overall, I still like merging markets. We still have our chinese exposure and we get these individual companies. You're going to see .

these big swings like this. And if they pull .

back on advertising, yeah, we talked about that over the last year. And and again, some of the transit team because of the competition, the court just mentioned the thing like the crap that they're selling at the Price point they're selling, it's going to make IT .

pretty unaffordable sixty sense more.

I we've seen this look how selective the consumers.

We're seeing that again, again and were going to see a very promotional holiday season. I think when we come out of IT, I think that we're going to see more pressure on the lower and consumer. I love dory.

and for the record, I ve a .

fast socks. These out space shares a cure.

Leaf crescent ABS truly have Green them all, turning sharply lower middle that after mag gates pulled out of the running to be the next attorney general, the republican had been seen as friendly to the kind of this industry. Is a portrait going up and smell?

Not enough .

time to .

talk about this. I think based on the ag, whether is problems, original ag of the age, you not playing cannabis based upon the ag, you're not going to get legislation and hope for the scheduling. And these are companies, the ones that are doing well, the ones that traded, they, they ve Operated all the way through this. That's how you have to invest in canvas by those companies .

up next final trades, time for the final trade. Ten fifty dollars is a share .

on bank of amErica is a level it's a level. I think it's probably getting to struggle for a second and then it's going through their bank of amErica with that give still exactly Priced current?

yes.

So I think it's a little bit overdone in the short term. I would be buying some google calls here.

Yeah, I love half .

of Carter state to sell U.

A, L, but I just do with the jets.

J, E, T, S, E, T.

courtney. I'll take the other half of his trade here.

I would go with a delay here. I actually I think IT has a lot of optimistic character ics. I think it's only a big a look at .

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