but doing so while abandoning globalization is, in my view, a negative. because the growth in population is not happening in the united states. while in places like india, indonesia, the mideast, growth is coming from population growth that western nations simply do not have. the u.s. needs open trade and globalizations for companies to sell to those growing populations. mobili counting on those populations for their own growth. they rely on the rest of the world much more than the developed world of the united states and japan. it's indeed a changing world and companies are needing to adapt. before we go, take a look at the day on wall street today. the market did trade higher, though the nasdaq was under pressure and the market end off of the best levels of the afternoon. the dow up 47 points. nasdaq down 5 1/2 points due to weakness in apple and the s&p 500 up 2 1/2 points at 1519. once again, the big story of the night, comcast and general electric shares surging tonight

after comcast announced its plans to acquire ge's remaining 49% stake in nbc universal. for $16.7 billion. comcast acquiring the part of nbc that it did not already own. comcast also announced an increase in the dividend and a stock buy-back plan. stay right here, because comcast's chairman and ce ceo i coming up on "fast money" tonight, and that program begins right now. have a great night, everybody. join us tomorrow on "the closing bell." follow me on twitter and google plus. i'll see you tomorrow. have a good night. >> breaking news this hour. comcast purchases ge's remaining stake in nbc universal. comcast and ge trading higher. comcast raising its dividend 20% and announcing a $2 billion buy-back. ge raising its buy-back by $12 billion. interestingly, the most notable thing in the afterhours session is that both stocks are trading higher. a win-win for both which is a very, very rare situation,

karen. >> it sort of makes you wonder, how do you make something out of nothing. you can see why it's good for ge, as they sort of streamline their holdings and you can see how it's good for comcast to own the rest. so, not -- that's not crazy. >> and comcast upped their dividend, too. that's got it going. the earnings weren't fantastic for comcast, but getting a pure play on nbc and then ge becoming just that industrial pure play, that's the market we're in. now you can have different investors and new investors get into each of these names and that's why you are seeing it up 8% now. >> certainly doesn't hurt ge to trade more like an industrial or financial, which are, by the way, at four-year hikes herhigh. >> it's been a good day for financials. goldman has a note out today that spurred. barclays is cutting their staff. certainly making themselves a more efficient machine. but it's all about the banks being able to return to normalcy. and i think that's another place

when you start to look at what's going on in the rest of the world. people feel like they're going to take the pressure off the u.s. banks and the earning power is coming back. it's an exciting day if you are looking at the rest of the economy. it doesn't necessarily change what we see with the market. >> you said something interesting about them wanting to become more on after industrial and i think cap tam's probably become less of a capital for general electric overall. i think what ge is trying to do, and it's try to be more like honeywell. we talked about that on the show for years. we're within a whisper of an all-time high in the stock. general electric had a 60 handle is now trading 22.50. so, general electric has completely underperformed in the last 10 to 12 years. they want to be more like them. i still love honeywell. they traded the same valuation, but if you look at the essence of this, that's what ge is trying to to. >> we're going to get more information in the next 24 hours or so. ge's ceo to address investors in

a conference call tomorrow morning and, of course, we here at "fast money" will be speaking to the chairman and ceo of comcast in just a few moments. but of course, with comcast shares moving higher, this is a fresh high on shares of comcast, and at these valuations, brian kelly, as much as i love comcast, because it is our parent company, soon to be our full parent company -- >> get it out there. >> disclosure. these talks have a monster run. >> comcast has been on fire. of these two, if i had to pick two, i would certainly buy ge, and that's just based on the fact that ge hasn't moved as much as comcast. so, you have a lot more in there and i do think with ge, you can get a different type of investor in there. i'm not sure -- i say that, a new investor, which means new buyers. i don't know if this gets a new buyer for comcast. you know what you're buying. this is a change for ge. >> what's interesting is that the big media companies are all pushing at, kind of the outer edge of their historical margins and their multiples.

if you look at comcast, around $41, it's, you know, it's inside of seven times, which doesn't make it terribly expensive and gives it the value. so, for a company that certainly has not kind of given up its video lengths, nbc universe al acquisition, already approved, versus where they bought the first 51%. and you look at their presence, these guys are making a move that not everyone can keep up with. so, maybe that multiple is even deserved. >> i like the notion of, do you buy ge or comcast, but that's not necessarily apples to apples comparison. so, in terms of the media space, when you have disney trading at new highs, where do you go? >> you don't chase comcast here. we talked about disney last night with pete, he had a different take as i did. we both liked the stock. we've liked it for awhile. i think disney's done a lot of back and fills over the last few years. my sense is, they'll do it again. the move we've seen in disknney

you can call it parabollic, because it is. you're talking about $100 billion market cap. the stock's been on fire. so, i would wait for a pull back. but out of all the space, if you had to pick one, i still think it comes down to dis right here. >> why now? they had up to seven years to w buy the remaining stake. so, why spent $11.4 billion cash, $4 billion in unsecured note and $2 billion in -- >> maybe now's a great time for unsecured credit and bank facilities -- >> financing market. >> it could be. and the thing that's interesting about it, though it is a big deal, $17 billion, there's no integration risk. they already own it and are in control. you're not going to see a big, you know, if they were to go buy something else that's totally different, it takes a way a lot of management focus. it makes sense. >> let's now go to brian roberts, who is the chairman and ceo of comcast joining us in 30

rock, soon to be one of his products -- properties. brian, great to have you with us. >> great to be with you. >> i'm going to ask you the same question that i asked the traders here on the desk. why now, when you had up to seven years to buy the restaining stake that ge owned. why pull the trigger at this point? >> simple answer. we're excited about the future prospects for nbc universal. and we didn't have to do it. ge didn't have to sell now. but we came to an understanding that i think works out well for everybody. they have a lot of cash, as you just described. and we, our shareholders have 100% of the upside here. and price is pretty similar to the same price when we started. but we have two years under our belt. we have completed the integration. we're excited with our management team in place. and we think the future prospects, whether it's the turn around at nbc the network, the cable channels continue to do well and grow, we're announcing tonight our fourth quarter, we were over 11% cash flow growth

in the quarter for nbc universal. the film business has had some good hits recently. and, of course, the theme parks, which has been one of the biggest surprises for us, continue to grow and we're investing and we're excited about their prospects, as well. it's born out of bullishness. >> and you know pretty much within a year of an initial acquisition if this thing is going to work out. so, presumably, this had been in the works, you knew you wanted to buy the remaining stake prior to that seven-year timetable expiring. >> well, we said all along that we didn't have to, we wanted to buy 100% over time. we wanted to make sure that we had the right balance sheet. we've been able to sell some non-strategic assets, such as the minority stake in a and e and history channel. we got an attractive price. we sold and have ge take back $4 billion of seller financing at

these historically low interest rates. so, for our shareholders, this seemed like a great time to bet on a company that we now have the knowledge and information of the businesses, better than we did at the first time when we made the acquisition. and i'm really excited. you think it's a historic day. i think about my dad starting comcast in 1963 and where we are now with comcast nbc universal. we're very proud and excited. >> i would imagine that the competitive landscape, brian, played some role. as the lines between content distributors and content providers, content creators increasingly get blurred, talk to us about how that played a role, if any, in this deal and wanting to own entirely nbc universal. >> well, we knew some day we were going to own it all anyway. so, the basic question is, do you think you have to pay more later? and at the same time, to your point, do you think the trend of value and growth for nbc

universal is attractive? and we've had a really good couple of years and we think the future, you know, we're long-term steady and patient but ultimately, we wanted to own 100%. we wanted to act as one company. we work on projects like symphony, which we work between the cable division and nbc and within all of the various properties within nbc universal. i want to mention that a big part of today's announcement is our earnings, and we can talk more about that tonight or later, but the cable division, the cable business, had a super quarter in my opinion. and our subscribers and internet subscriber, video subscribers, phone subscribers were all better than last year this fourth quarter and we're continuation of some attractive trends and hence the board is authorizing a 20% increase in the dividend and a continuation of $2 billion stock buy-back in

2013. so, it's a lot of news tonight. all of which is the combined comcast nbc universal feeling very excited about 2012 and off to a good start in 2013. >> mr. roberts, it's kaurn. let me ask you, with the dividend increase, the buy-back increase and the purchase here, you're levering up, which would seem to be a bullish bet. how much more levered you are going to be post this transaction than where you are right now? >> that's one of the things about the news. we already have about $11 billion in cash from the proceeds of all the things that i mentioned a moment ago. and the total cash outlay is just north of 13, so, we draw down about $2 billion off our lines of credit, as you mentioned. so, the overall leverage of the company will be about 2.4 times on, right at closing, which we expect fairly soon. and then, we intend to be -- to, over time, try to improve our

credit rating as many of our peers that are large issuers of capital and so, i think this will delever us into the 1.5 to 2 times cash flow range over time and that's sort of our hoped for target. so, i think it's not a big risk because we had so much cash on the balance sheet and because most investors expected us to buy it at some point, having certainty around the price at 16.7, plus the real estate transaction, at $16.7 billion, i think that's right in the range or maybe on the better side that people had hoped we might have to pay and of course if we waited down the road, it might have been more or less, and so we're making that bet today that we think it hopefully will be more. >> brian, it seems like maybe now you might have your hands full, but you had seven years to do this over and you could have chosen a different path, which could have been to beef up your overseas presence and make a bid

for virgin media. i'm wondering if that ever crossed your radar to actually beef up overseas and make a bid like that. >> you know, i think the point that was made before i came on the air about, you know these assets well, and that we're, you know, we spent several years learning them, having an opportunity to buy more and to invest in content, feels like the right thing for our company right now. and you can say, why is that? well, we really do think that there are more revenue streams coming on every day, whether it's subscribe video on demand or subscription from distributors or making better shows, as we've been able to do or take the sports business, when we bought the company, we had several years of losses in sports. we're now able to say we're slightly profitable in sports. we've restructured our deal with the olympics, the olympics was fantastic last year for all parts of the company, the super

bowl and the nfl relationship and now the nhl's back playing. so, you put all that together, there's a sense of enthusiasm and confidence on the future of nbc universal, so, i can't think of a better place for us to make an investment right now than making this transaction. >> and of course part of your deal is to buy the real estate properties of ge at 30 rock as well as in new jersey, which would include cnbc world headquarters in engel wood cliffs. 30 rock, an iconic building, right now, ge's logo is at the top of the building. any plans to put nbc universal instead? >> not something we're focused on, talking about today. >> it's not a top priority? >> it's a priority. we have a lot on our plate today. but it is a won't eaderful grou real estate propertieproperties. put it all together, it is an exciting and, i think special

time for all of us at comcast and nbc universal. all be one company. >> brian, thank you so much for joining us this evening. congratulations on the deal, of course. >> thank you so much. see you soon. >> brian roberts, the chairman and ceo of comcast. >> and the boss. >> and the boss. >> when he says see you soon, there was a tone there. i hope he's a "fast money" fan. >> i hope so, too. >> he came on the show, so, he is -- >> i would assume one of the reasons he got the increase. >> that's why it's increased in value so much. >> but in terms -- what did we learn from brian roberts, if anything, about comcast in this deal? >> i mean, i think it's what karen talked about, that there are synergies here. they know what they can do with the company. i think it's interesting they bought it within one year. knowing, being inside, saying, this is the time to buy it with what's going on in the stock market. i think that this now, what happens to cbs? what do the other cable providers do now? what are the other content

providers do? that's where you need to look for tomorrow. >> all right, coming up next, we will have much more coverage of comcast purchase of general electric's remaining stake in nbc universal. analyzing this deal from every angle, breaking down what it means for the media landscape going forward. and later on, tim cook's cash. apple's ceo fails to impress investors. shares closing lower today. get in while the going's tough? we'll get answers from a top-ranked analyst. stay with us. see life in the best light.

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get back to our top story this hour. comcast purchasing ge's remaining stake in nbc universal. both are trading sharply higher. let's bring in larry haverty. he owns comcast in his fund. larry, pleasure to speak with you. >> hi, melissa. >> how does this change the media landscape? >> i don't think it changes the media landscape but i think it's an enormously bullish message for the market. the message is really simple. companies that are doing things, utilizing low cost debt, are going up. and this is the first time in a long time, melissa, this is the fourth deal i've looked at, two small ones in gaming, boyden

buying a pry haven't company, pinnacle buying public company, ameristar, disney buying lucasfilm and comcast buying the rest of this. it's an absurdly low cost of finance in this when you take out the cash, virtually earning nothing and then the bonds, or the short-term credit, probably not over 3%. so, you got a blended cost of financing this thing around 1%. it's just very, very clear. it's a win-win situation and you look at this. and i'm almost in tears on why the folks in cupertino don't figure this out and do something with that cash. here, you have comcast, these guys are smart financial people. they always have been. >> sure. >> and they're at a seven multiple. that's a 14% pre-tax cash flow return. they generate billions of dollars of free cash flow. they have almost $20 billion of combined operating cash flow.

they use that free cash flow to grow the businesses, these have always been growth people. i've known them for over 30 years. they grow the business, they finance very well. they return cash to the shareholders in terms of dividends and share repurchases, and the stock's trading at an all-time high. the media companies get it. >> i understand your argument but the bulk of this deal is just cash on the balance sheet, so, in terms of your argument of utilizing financing at its cheapest, just a small fraction of the deal is financed. >> well, i think they still have ample financing to do more share buy-backs at a 14% return. i think brian said he's around 2.5 times levered. i'd be comfortable with this company three times levered. they've kind of done enough, and this is an enormously large company now. it's 50% to 200% bigger than its competitors. probably they've done enough for

everyone and the stock has been just great in the last year, but the stock is still cheap because i think investors undervalue cable. the situation between cable and its competitors is stable. the internet is just a phenomenal profitability tool for the cable industry because they can slowly raise their prices in the internet. and the media business technology is encouraging the increased consumption of media. comcast is in the middle of these things and it's a seven multiple. disney and time warner are trafding at close to a ten multiple. >> larry, i'll ask the followup question in terms of apple. one has to take into consideration or just assume that they've spoken to every investment banker on the planet about what to do with their $137 billion, yet they continue to decide to do nothing. so, i ask you, what do they see that the rest of us don't see? saving for a rainy day type of

thing and is that day upon us? >> i just don't get it. i look at the cash in two ways. one is, the flow, which is the cash flow the company's going to be generating in the next few years. and the $45 billion or so that they're passing out to the investors, i think, is incredibly appropriate. but that doesn't solve the problem of the stock. the $137 billion that's just sitting there doing nothing. and here, you look at a company, comcast, that's responsive to its shareholders. it didn't like $10 billion sitting around doing nothing. so, what did it do? i bought some assets. now, apple is not asset intensive. they don't need to keep buying assets. they generated about $20 billion in free cash flow. they need to do something with that pile of cash. and the discussions -- they're nauseating. >> larry, getting back to the big deal of the evening, comcast, you would, right now, the bottom line is, you don't think valuations are stretched and that you would actually --

not that you're doing it, but you'd be willing to buy the stock -- >> not in the least. i think that this stock's going to go, catch up to the multiples of time warner and disney. >> all right, larry, great to have you with us. larry haverty. coming up, stocks at five year highs. our traders will give you the top trades to play the runup. plus, political posturing. will washington fuel the next leg of this rally? we'll tell you what to watch for ahead of the state of the union address tonight. stay tuned. revolutionizing an industry can be a tough act to follow,

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>> dow reclaimed 14,000. >> we wipe that off from '07 and bring that back? >> keep running, when we cross 14,000, we dust it off and bring it back. why not? fresh five-year hikes here, closing above 14,000. in case you missed it. >> thank you. >> great graphic. that's like -- >> ridonkulous. >> all at the same time. >> so, we asked what the top trade was for the day. tim, kick it off. >> well, i tell you, that chart of the dow items you people are putting more money into equities. they are not concerned about the things that had gold going higher. long platinum, short gold and if you look at this trade and if you look at it, all the way back ten years, this is a reversion to the mean. just items you how far it could go. but it is telling you that people are not as concerned about europe and there's no inflation. so, why do you own gold? there you go. >> so, this is an industrial play. get back to the deal of the day. >> it is. >> seven degrees of separation

of kevin bacon or whatever that game is. >> industrial demand in platinum and a supply deficit in platinum. >> all right. guy? >> funny you should bring up bacon, mel. >> why? >> i don't know if this is the top trade of the day necessarily, but you scoffed at me, at jack -- >> you always say i scoff, but i -- >> you do scoff, unrelated to this. >> jack in the box has been a monster. i understand valuation is a stretch. and i understand that people bet against the stock and lose. i think they will continue to do so into earnings, which i believe come out next week. >> why is that speaking of bacon. >> don't they make burgers and those things -- >> i don't know. it's your trade. >> qdoba, we're going there for valentine's day. >> that's your present to me? you just blew it. no surprise. karen? >> xlf. we own a number of, you know, jpmorgan, bank of america, citibank, but i like the xlf. i would still, if you want want to pick a particular name, i know it was up a fair amount recently, but i think we're not so far along in the story of

recovering in financials. >> and beekers? >> well, my top trade is just the market itself. at 14,000, everybody wants to know if it can go further and i think we're probably entering this final phase here. we're in a news vacuum, there's not a lot going on. that's driving the market except for the quote unquote great rotation. the news backings usually happen in corrections. when they happen near highs, you generally get a parabolic move. guy's been talking about that for awhile now. my target, about 1580 for this move if we get it. just buy the spy here. >> you have moth balled your bear suit. >> yes. this is a trade, so, you know, clearly we're -- it appears we're going higher, so yes. >> let's talk financials, as well. the financial spider etf, higher level since 2008. individual banks hiding some remarkable multiyear highs. is there room to get in on this trade? i feel like that has been the refrain for the past few months. is there still time to get in on

this trade? >> there's still plenty of valuation left. if you look at things on price to tangible book, in many cases, you buy below one times. this is a case where, again, i point to the comments out of goldman saying that banks have to earn more, the roes are going to go higher, because attrition is going to take out other banks or banks will have to. that's what gets people more excited. if you look at what's going on around the world, the pressure is coming off. basil three has been pushed out. no one is focused on the place where they were, which is these guys need to be clamped down. look at what's going on in the morg mortgage area. i'd say long. >> there's one stock, blackstone, we talked about it. it's pushing up towards $20. it closed at $18.75. it's had trouble there in the past. mid '08, early 2011. appears as though it's going to have trouble again now. i think it's headed there. my sense is, third time's the charm in bx and i think it continues to go higher. >> b.k. mentioned a news vacuum.

there is a big event this earning. and that could be, in fact, the key to the rally. may be in d.c. with the president set to give his state of the union address this evening with jobs and the economy in the centerpiece of this address. take a look at some of the sectors that actually moved ahead of the speech here. we saw nice pops across the board on cyber stocks. expectations that the presidents could issue an executive order. clean energy stocks continuing its run, as well. so, we saw solar stocks across the board going higher today. we should note, cnbc will have full coverage of the state of the union address tonight at 9:00 p.m. eastern time. let's get more on what we can expect here. the senior analyst at guggenheim partners -- i love -- chris krueger, the graphic was just -- >> chris, if you didn't get a chance to e so it, that was exciting stuff. >> no problem. >> chris, in terms of what the president will lay out, will jobs and the economy be number one in your view?

>> absolutely. i mean, this is -- what we're going to see tonight is basically the sequel to the inaugural that we saw three weeks ago with a real focus on middle class job growth and job creation with sort of climate change, immigration reform, gun control and the sequester sort of taking a secondary role. >> and in terms of how he -- his tone will be received, he received a lot of criticism during his inaugural address for being too strident, for almost being arrogant in how he addressed the country and how he laid out his agenda. do you think he'll take a different tone this evening? >> you know, i -- i don't. i mean, i think, you know, judging the president's speech, it's going to be judged depending entirely on where you sit. i think most of the congressional democrats will applaud the speech tonight and most of the congressional republicans will criticize it. i think, you know, the thing to keep in mind here, too, is that the president isn't really giving the statele of the union to the congress, he's talking to

his supporters and he's going to take the talking points given tonight on the road for the next few days and really try to get his supporters, you know, supporting these key campaign points. >> chris, brian kelly. so, if he's talking to his supporters, he's already got their support. what chance does he have of getting anything done? >> right, well, the speech tonight, it's much more rhetoric as opposed to reality. in terms of legislation that could come out of the speech tonight, really on the sequester and immigration reform are kind of, you know, issues that could get resolved, you know, things lie climate change, gun control, probably not in that same league of likely legislation in the coming year. >> hey, chris, how about the things that have gotten a lot worse for americans? how about gas prices? how about the participation rate of people 18 to 30 that has gone higher in terms of unemployment. is he going to address the i adult issues instead of trying

to point out a lot of the thing s that we knew were in the rearview mirror. >> these speeches tend to be more from a 30,000 foot level as opposed to bottom's up. i think we'll see more pros specifics. and there are a lot of issues to hit in the speech. so, we might see some of those things, but i think what you've seen is a pretty clear blueprint, a pretty clear pl playbook of where the president wants to go in the second term and this is maybe a little bit more specific, but not too much more. >> chris, good to get your input on this. thank you for your time. chris krueger. brian kelly, you said there is a news vacuum. anything coming out of this, even if it is obama's tone, which could signal more butting of hefads in congress? >> i'm not going to make any changes, unless there's a shocker out there. but you have to come back and ask if there's a shocker out

there, he can actually get anything done, is it a reality or just rhetoric. for me, i'm not expecting much. >> we heard at the beginning of the super bowl, unfortunately, that we had an un, you know, impromptu meeting with the president where we start talking about higher taxes and what not. he's had a chance to throat a few trial balloons already. >> of course, cnbc will air tonight's state of the union address, coverage begins 9:00 p.m. eastern time on cnbc. coming up next, ebay shares nearing an all-time high. but do they have what it takes to keep the momentum going? nobody better to ask than the ceo, john donahoe. more "fast" straight ahead. why turbo?

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i know what you're looking for. i'm not chained to your desk anymore. i'm faster and smarter now. and so much less expensive. i am your market data. and if i do say so myself, i have never looked better. superderivatives introduces dgx. data done differently. welcome back to "fast money." i'm josh lipton. watching cliffs natural resources. ticker clf, taking a dive here in the afterhours. the miner reporting lower revenue and a quarterly loss. earnings, the company saying impacted by a $1 billion write down. clf also meaningfully cutting down that dividend, telling investors it could cut it by 76%. cliffs natural resources, down hard here in the afterhours. melissa? back to you. >> thank you, josh lipton.

76% reduction in the dividend. >> a huge drop. i mean, it was just in march when they increased it. >> well, they're kind of all over the map. and i think people are confused because they said they were going to get away from mna. they talked about the drop in ire ore prices. that was a rearview mirror thing. they are up now to $145, so, if they're going to be that active with their dividend, i would look forward to the next quarter being a much better story. >> is this an iron ore story or a cliffs natural story? >> i take it as an iron ore story. you asked me, is my bear suit moth balled, this is probably one of the reasons why. it's hanging in the closet waiting for me to jump back in. >> thank god. >> you look at iron ore prices, that's the heart of the world economy. so, yes, they've risen. but not up to the levels that they have been in the past. you see something like a cliffs natural cut their dividend. they're looking forward, saying we're not going to earn that ind of me. for me, a cautionary flag. >> all right, let's actually go

to scott wap nerp at the goldman sachs conference in san francisco. he is joined by the ceo of ebay, john donahodonahoe. he joins us exclusively. scott, take it away. >> thank you so much. john has a great story to tell and so does the cover of "fortune." ebay is back is what it says. i nope you can see that. we know about the "sports illustrated" jinx. i hope for your sake there's not a cover jinx in this business. >> i pray every night that's not the case. >> how do you keep the momentum going? you're coming off a great quarter. that has to be said and the stock's performance reflects that. you are pushing at an all-time high. >> we are continuing to innovation. in technology, there's no alternative. and the good news is, the space we're participating in, the global commerce and payment, is a place where enormous change is happening and consumers are behaving and we're trying to drive that and we're benefiting from it. >> how do you continue to

capitalize on the movement to mobile? one quarter of your new customers are mobile. i mean, so, you're able to figure this out in a way that some others that we talk about on a daily basis, facebook and other names, are still trying to figure out how to monetize mobile. you think you figured it out? >> well, scott, we're actually lucky, i would say. we monetize on mobile the same way we do on the web. so, it's never represented a conflict for us. so, early on, we saw mobile, we belt hard, we bet big. we didn't worry about cannibalization and we just worried about providing the great, the best possible consumer experience. and that has served us well. we monetize the same way, so, we're indifferent to what screen a consumer shops on. >> paypal drives the train, so to speak in a large way. are you tired of people focusing so much on what paypal's doing? are they focusing enough on what the overall business is doing? do you need to sell that message better than we have in the past? >> again, i don't overly worry

about what people are saying other than our customers. and our customers increasingly see synergies across our two businesses. and mobile is a great example. the fact that ebay's been such a successful mobile app has helped generate paypal's moment payments volume and now mobile payments is growing by paypal off of ebay as well as on. we'll do $20 billion of both and you wouldn't have been as successful on either one if they weren't together. that's what consumers like and what merchants like. >> from a mobile payment standpoint, how do you view some of the startup cheaps that are out there? for example, a square, and i'll give you a quick anecdote. i get out of a cab last night at this hotel, i give the guy the credit card and he does it all by square, i say, can i have the receipt, he said, no, i'll e-mail it to you. you would rather me use paypal, or some sense, to do that, so, does that key you up at night? >> well, innovation always keeps me up at night. but look. payments is an enormous field.

and there hasn't been a lot of innovation in the past 10 to 20 years and mobile technologies is going to enable a lot of innovation and payment and no one company is going to have a monopoly in all the innovation. what we like, we like our position. we did $20 billion of mobile payments volume. and that's not a swipe where the consumer is actually just taking out a card. it's where the consumer's actually pressing paypal. it's the safest, and easiest way to pay on a mobile device or on a tablet. you'll see a lot more innovation from us. we feel well positioned but you'll see innovation from all walks of life in this enormous space. >> you are obviously a good gauge on what the consumer is doing, what they're thinking. we're halfway through the quarter, believe it or not. even on the heels of an announcement that came three, four weeks ago of your last quarter's earnings. has the momentum kept up? what can you tell us? >> i can't comment on our results within the quarters, but you know, i think the overall u.s. economy is doing reasonably well, we'll see what the president says in the state of

the union tonight. but the u.s. economy and u.s. consumer spend feels stable to me. >> so, the increase of the payroll taxes and things like that don't seem to have an impact on businesses like yours or it's just too soon to tell? >> i think it's really too soon to tell. and in aggregate, if you look at the overall numbers and the forecast, i think stable, not exceptional growth, but stable growth in the u.s. and obviously europe is a little weaker and as an outlook. >> you worried about what's going on in europe? that europe is going to rear its ugly head yet again? >> well, i think everyone's got to worry about europe to some extend. but i think, like many countries and many governments, once forced to deal with issues, they'll be dealt with. so, i'm sort of, cautiously optimistic, maybe cautiously cautious about europe. >> great to speak with you. >> nice to be here. >> melissa, back to you. he's the cover boy, so -- we'll

hope there's no cover jinx. >> all right, thank you very much, scott wapner. good work all day out at the goldman sachs technology conference. ebay here, we're close to 52-week highs at this point. >> most of 2011, the stock traded around $30. we talked about paypal being worth that in the stock should go higher. well, here we are now. go back and look for the move from 2001 to 2005, it looks hauntingly familiar to what we're seeing now. i'd be very careful jumping in this stock right now. >> coming up next, the top ranked analyst helps us make sense of tim cook's comments today. plus, those very comments have someone on this desk more fired up than ever before. we'll tell you why, and we'll tell you who, when we come right back. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats.

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saw long-dated call buying out to the january 25 calls, paying 90 cents for those. that would represent an increase of 25% from the current share price. and also would mean that this stock would be trading above levels not seen since 2011. >> wow, and tim, you got back on the avon train? >> this is probably a bizarre move by myself, because i sold going into these numbers thinking it had a great run, it had been -- i think this is an absolutely a story that's going to continue to rebuild. barron's put a big article to me that was a sense that i want to fade the good news. but the jewelry, they're going to seek alternatives to this. this has been a problem for these guys. what's going on with their brazilian business, they are seeing inventories begin to come down. their sales in north america are actually much higher, so, this is a stock with a lot of short interest. this is a stock where they are doing all the right things and it's a stock on valuation could be $20 higher if they get things right. >> just quickly, that shows how

bullish you, you sold it lower, it was up 10% today and you got back in. >> when i saw her hitting the tape saying brazil is significantly better than latin america, i put a price down, probably 2% below, up 10.5% on the day. it closed up 20%, so, i feel okay though i'm really crying because i had a much bigger position two weeks ago. coming up next, trading all the apple developments. and one of our very own who is all fired up about tim cook's comments today. stick around. [ male announcer ] any technology not moving forward

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the drama regarding apple's capital allocation strategy continues. david einhorn firing back at tim cook as he referred to the lawsuit as a silly side show. what will apple do with all that cash? steve, great to speak with you. >> thank you. >> read through your note and what seems key here, at least to a lot of apple shareholders is that you believe there are signs that the stock is actually stabilizing, because the price action in the stock is pretty decent. but the question is, will there be the catalyst that will take the stock higher at this point, and in your view, based on what tim cook said, what is the most

likely catalyst at this point? >> well, clearly, investors are looking to get more cash back. they have the meeting february 27th. so, there's a reasonable chance at this point that they either increase the dividend or accelerate the share repurchase. but in addition to that, we need new products. he did talk about, when people get into the apple ecosystem, they are more likely to buy more apple products. so, that suggests a low end phone could come. certainly before the end of the year. and finally, we expect a deal with china mobile is going to be very important to continuing the high end iphone growth and that is expected maybe in the fourth quarter this year. we see two or three catalysts over the year that could move the stock up. >> cook mentioned margins and how he'd be willing to give up on margins. does that concern you that they're willing to give up margins in order to sell more and it sounds -- it sounds like he's getting at a lower cost phone. >> well, you know, he made a couple comments. he did suggest they need to get more people buying apple prod t

products, but he also said they're all about making great products. implying their products deserve the high margins. and hey, you look at the macintosh, it gets a very high margin for a pc product. so, it's not clear they're really signaling you're going to see lower margins. the problem is, though they don't call themselves a hardware company, they are a device company and 30% operating margin long-term historically has proven difficult to collect. we are no longer looking for the gross margin to move over 40% this year. we don't see it coming down a lot. longer term, it is a risk. >> in terms of getting the deal in china, that's going to be very important. at the same time, so many cheaper alternatives, as you know. there are four domestic sellers of phones in china that are outselling apple including cool pad technologies, nobody here in the u.s. have heard of them. cool pad technologies out with a $100 phone, u.s. dollar phone, in china, which is a fraction of what the cheapest iphone costs. it seems like getting that

agreement in china is just one part of the equation. the other part is, it's got to appeal to the masses because china mobile may have 700 million subscribers, but it's not going to attract them with a very high priced phone. >> well, that's true. and apple's never going to appeal or sell to everyone. so, even for apple, a lower end phone would still be relatively expensive. but i don't think they can overlook the masses in china much longer. it's a race between good enough and innovation there is a risk at a premium price typically that good enough technology is going to cause people to look at alternative products. and that is clearly happening in china today. on the other hand, apple has to keep ahead through innovation. and i thought that cook made a pretty impassioned argument for innovation not being dead. he said our north star is a great product, you know, 25% of apple employees are still working on new products. so, you don't get the sense they're out of ideas, but that's what investors want to see is

true innovation. and that only occurs every couple of years. >> steve, thank you for your time. as we head to break, take another look at shares of comcast and general electric. both still trading higher on news that comcast will purchase ge's remaining stake in nbc universal. almost a $17 billion deal. meantime, first move tomorrow when we come right back. stay tuned. in america today we're running out of a vital resource we need to compete on the global stage. what we need are people prepared for the careers of our new economy. by 2025 we could have 20 million jobs without enough college graduates to fill them. that's why at devry university, we're teaming up with companies like cisco to help make sure everyone is ready with the know-how we need for a new tomorrow. [ male announcer ] make sure america's ready. make sure you're ready.

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