>> stocks are for lovers, gold is for haters. >> more than five. >> that's too many words. >> i just added some prepositions. >> prepositions count. >> please come back soon. "fast money's" coming up. melissa lee is back. what's on tap? >> we close out the quarter with a gain on the s&p 500, big rally in technology, but what we're watching was momentum and microsoft continuing up until the build conference on wednesday. we got a top analyst and, of course, our trader's take on what to do with the stock which has seen nice gains year-to-date. >> "fast money" starts now live from the nasdaq market site in new york city's time square. tim seymour, brian kelly, karen finerman and guy adami. we'll break down the first quarter, but first, breaking news on caterpillar. john harwood with the details in washington. john? >> reporter: melissa, we're going to have the latest in a series of senate hearings in which a subcommittee is taking on american corporations for the way they shelter income from u.s. taxation.

the committee tomorrow is going to present testimony about caterpillar saying it spent $55 million on an accounting firm to devise a tax strategy that allowed it to avoid paying taxes worth $2.4 billion in recent years. now, we've got a response from caterpillar, they say that we comply with the law, that we've paid an effective tax rate of 29%, 3 percentage points higher than other multinational manufacturers. price water house coopers say we've complied with u.s. tax policies, we're proud of our work, but this is going to be another hearing in which the u.s. senate's going to try to make a case for reforming and cracking down on tax evasion or avoidance by american companies, melissa. >> it's karen. let me ask you, is there anything different about this case than you remember apple, i don't know, some time last year? >> and microsoft. >> and a number, as you mentioned before, many, many multinationals that use this legislate strategy? >> it's all of a piece. the argument by the subcommittee

is that they established a wholly owned swiss subsidiary for the purpose of parking profits there even though no actual business activity was taking place in switzerland. and that's the argument, the core argument that the committee's going to make. >> all right, john harwood, thanks a lot for that. interesting, considering trading action today, new high, 100 and change and backing off just a touch. but doing well despite. and karen, you pointed out -- i mean, this is what they did was legal, actually, what's the big deal? >> no claim there was anything wrong with what they did. i really do hope that spurs some sort of more universal corporate tax reform because we desperately need it. >> you know, it's interesting, corporate america has never had more cash on their balance sheet or offshore. 1.9 trillion offshore, 1.6 trillion on balance sheets. this is something that should get you very excited if you're an equity holder, there's a lot of money that could be coming to the sidelines, but they're coming from the sidelines, but also a lot of corporate

spending. there's a lot of capex that needs. if corporate america gets more comfortable with the tax structure, this is a very bullish sign for second quarter stocks. >> connecting the dots here, if you think washington's going to start cracking down on what is now illegal tax sheltering, then companies might be willing to bring that money back onshore and spend it? >> that's the dots that are connected. and i don't think they're going to crack down. i think they're going to try to facilitate getting that money back. there's got to be a way to do it. >> you know, i don't know. i think the only thing that's happened that's different here is the political tone out there than it was a year or two ago. . for me, i look at this as a negative for caterpillar. >> you think the tone is worse? >> i think the tone is worse. a lot worse than it was a year or two ago. and i'm not sure that companies would necessarily, even if they do bring it back, they've got to have something to spend it on. a tremendous run in caterpillar. i'm not long it, but if i was, i'd be selling it. and if you want to be aggressive, i think you can short caterpillar, use 101 as

your stock, 100 roughly was resistance about a year ago in january. >> let's get to the markets. today marks the end of the first quarter. the first time the s&p had five straight quarters of gains since 2007. while utilities, health care and financials were the strongest performing sectors, it is tech that stood out. microsoft closing out the quarter gaining more than 10% since the beginning of the year. hewlett-packard, juniper networks, qualcomm, all outperforming the broader market. guy adami, does that continue? >> we talk about oracle sort of getting into that next level now where they've -- where they've built on a support level now. growing from there -- >> new high today. >> we talked about that last week. it feels like specifically oracle feels like it wants to continue this move higher. that had the big selloff. two quarters ago, it was pretty precipitous. and it's gained everything back in spades. so people are getting very comfortable with oracle. nice job with microsoft. out of the ones that seemingly

want to rally, i think ibm is the outlier you might want to sell here. >> i think at these levels, you've bought the myth, the future that you hope happens. microsoft was the biggest contributor in the first quarter of the s&p. let's talk about apple, though, big cap, tech, i think tech continues, apple 11 times 2015 is the place. people are rotating. this is what's going on. for all the angst in the first quarter, market's up small or flat. and what's happening is you're seeing rotation. i think financials and big cap tech are the places you'll see in the second quarter. >> you were out a while ago. do you think -- >> then we bought back in. >> right. what's your assessment of where it is and the fact it sat out, big tech rally today. >> it sat out. it seems to be counter to everything broad that we -- you know, last year, and more of this year. i think right now, the story is so specific to apple, there's a great desire to see some new product. i don't think it's going to be driven by iphones and their

current host of products, i think it's something new, very specific to apple, not market driven. >> yeah, in terms of tech today, it was software names really leading the way. and guy, you mentioned oracle, but we saw crm, salesforce.com, any software name practically was a leader today. >> some of the cloud names, as well. people were clearly rotating back. the move to the big cap tech is interesting to me. some that work and some that don't. five networks, again, shrugs off a selloff last week. one of the reasons microsoft is doing so well. >> speaking of microsoft, holding a developers conference this week on the heels of the release of office for ipad. will that be the next catalyst for the stock? >> thanks for having me. >> there are a lot of rumors out there as to what microsoft could

be doing at the conference which traditionally has not been a catalyst to the stock. but things like windows 9, perhaps, or a siri like application of phone. and what could be unveiled? >> it's not really catalyst for the stock, it's deep plumbing. we expect a new version of windows to be unveiled. so sneak peek, not all the details. we think there'll be a bond between developers. so microsoft has not gotten that we think under the ceo, that's going to be very clear in a developer's mind. i used to be a developer and we think they're going to make it easier for the developers to build across platform. from a perspective on windows 8.1. just an update. this, again, not a huge inflexion point. the change at the upper management with, you know, focus on opening up and going cloud

first and mobile first and we think that continues to be the big driver for the big story. >> we can say historically it has been a catalyst. this has been different. this is his second time appearing publicly after being appointed ceo. the stock seems to be reacting to some sort of potentially big announcement here. >> i don't think you're going to get anything different. he sent out an e-mail saying early this week saying that this is a new mobile first cloud first initiative. and i think it was very clear with the ipad. i've downloaded, used it. it's actually great and we've all been waiting for this. i think the times have changed from being windows based only. i've said this repeatedly, my kids are growing up with apple devices. microsoft better figure out how to run in the devices and they are. and you have two forces. you have what he's doing and also the cfo who really

understands investors. i think you're seeing the dividend continue to tick higher, buyback tick higher year on year. and you're seeing in large cap, you talk about the cloud. clients are selling those and we're seeing rotation back into the value names in q1. and you spin into growth once you get past q1. that's been a big beneficiary we continue to remain positive on the microsoft to the mid-40s. >> yeah. and you've got a $46 price target, like $4 or $5 from here until the end of the year. >> we are. we're an anomaly. one of the only few that really like the stock. 20% of wall street has a neutral or sell. and i think that's been the right call. >> thanks for your time. b.k., your price target immediately, though for your trade is -- >> is 42.5. and that's a technical level. when i got into the stock,

that's what i thought i would sell it and it's lining up fairly well, we have this conference coming up. a lot of euphoria coming into this week and i might sell at 42 1/2. that doesn't mean i don't like microsoft, i think this might be a company that's changed. but where i got into the stock to where it is right now, no reason i shouldn't take profits at 42 1/2. >> what did you say? something about buying into the hope and dream that will be microsoft? and not what the company -- >> the reality, their move into mobile is fantastic. i think it's more important if you want to consider office for the ipad. but if you look at what they've been doing, the move to the cloud, these secular tail winds, the management, the touchy feely changes, commendable. really commendable when you consider the past in this company. that's why microsoft suddenly sexy, but at 14 1/2 times, 2012, this was a nine times p/e, right now, relative to the recent history, this stock is very expensive and they have to

deliver. >> i think real quick, i think to beak's point, the trade sets up. that's working for them. they have seemingly some great tail winds, but they report on april 24th. this quarter, they have to not only -- they have to beat numbers in a meaningful way, i think, for this stock to continue. you could see that 45 1/2 that rick talked about and the 46 that brett talked about. >> one of the biggest rivalries in silicon valley is front and center in the courtroom today. apple suing samsung. how will this legal battle impact apple's stock? that's next. and are there problems with tesla in china? a key executive in china reportedly left. we've got the details coming up.

♪ tech names apple and samsung back in court today in another multibillion dollar war over patents. apple is seeking $2 billion in damages from samsung from selling phones and tablets that apple claims violates five patents, including the slide to unlock feature and the

autocomplete feature that suggests words as a user's typing. samsung's countersuit alleges that apple violates two of its patents. as apple struggles, why does apple focus on the patent fights? let's bring in senior managing director and networking analyst. brian, great to have you with us. >> thanks, melissa. >> let's jump forward to what this could mean for apple. if it is successful, it could feasibly sue lots of companies. >> it could. but at the end of the day, we don't think that's going to occur. you know, when you think about it, you know, there's over 1 billion units of android devices out there. this is what we're talking about, ios versus android devices. there'll probably be some concessions, software tweaks if apple wins. but at the end of the day, we don't think it's going to change the competitive landscape for, you know, worldwide mobile devices. >> apple's obviously not doing it for money. it's a drop in their war chest. why bother with this then? why not just use their time to

focus on innovation and new products? >> i think it goes back to what steve jobs put in place. if you're going to steal from me, i'm going to come after you. i think the term was -- >> thermo nuclear -- >> right. thermo nuclear war. and i think that's the tradition that apple has. they feel slighted and wrong and they're going after some of the google players today. >> but there's zero chance in your view there's going to be an injunction on samsung to stop selling phones? >> well, obviously i'm not a patent attorney, so zero is a strong language, but we think it's highly unlikely. >> okay. >> so this is an issue that just -- this industry in general has battled this for years. do you see any more universal change about patent infringement and patent and this whole industry? >> i don't. frankly, i think it's sort of like a porcupine approach. everybody has these quills. and if you get close enough, everybody's going to get hurt. there isn't going to be one winner. and so, i think, you know, companies rup teenly borrow,

quote unquote, from each other. and, you know, when all of these companies have been around for decades developing, innovating, they have tremendous r & d. and clearly some people are developing something, other people are developing others, and they don't always license or, you know, have access to those technologies. so i don't think it's going to change the situation with tech i.p. over the long haul. >> let's get into apple versus samsung the stocks. you almost have kind of value trap tech right here. in samsung, the company trading seven times earnings, yet one of the most profitable companies in the world. they also have the chip business, more diversified business than apple. how do you play this here? the last time apple was winning patents, that was the top of the stock. i almost get the sense it's kind of the opposite here. and i've been very bullish on apple in terms of this current channel it's in. samsung, i think needs a lot more work to get out of this malaise. >> yeah, i wouldn't disagree, tim. think about it, apple's really the only megacap company we

cover. i think apple's clearly underinvested. i met with all top investors in new york and boston and other areas recently. everybody's underweight apple. i think there's a big opportunity there in the near term. not focused on the upgrade opportunities, what we've referred to the mother load of all upgrade cycles. i think that could add 10% accretion to numbers in the back half of the year. so we're actually one of only two cautious ratings on ibm, we have a neutral on hp. you know, so from a large cap tech standpoint, we're not that excited with the exception of apple in the near term. i think there's a big opportunity. >> last quick question, though, when you say underweight, what does that mean relative to what it should be versus the s&p 500 waiting? so they would have to eventually load up? >> we think that -- well, yeah, relative to the percent in the, i think it's the nasdaq, actually, when you calculate it or the ndx, you know, but when you run those numbers, people are clearly underweight apple shares, yeah.

>> okay. brian, good to see you. >> great. >> thanks for your time. >> what do you say on apple? >> it's okay. listen, if brian -- >> that's a ringing endorsement, b.k. >> it's not doing much, right? tim's been all over this on the channel that's been trading in. it's okay. i think it needs some kind of catalyst outside. brian's right on the upgrade cycle you want to buy apple with both hands here. you know, i -- i'll stick with brian's analysis on that. but for me, you know -- >> i want to talk about qualcomm for a second. it's at ridiculous highs, but it's old tech that's become new tech. meaning, these guys are cutting edge, their chips, snap dragon chips in every new phone that people want to see. but ultimately, you have a place where they run into pressure. for the emerging markets to really adopt, they're going to be lower price phones, this is going to hurt qualcomm and i'm not sure people price this in. >> if you had to pick one favorite, what would that be? >> big cap tech right now. >> today. right now. >> oracle.

i think oracle, they seemingly have tremendous tail winds behind. i think it's oracle one, microsoft two, apple's probably four or five on the list. >> we do have news on yahoo. let's go back to seema. >> preliminary talks to acquire news distribution network for $300 million. what makes this deal interesting is that it could serve as a competitive threat to google's youtube. now, melissa, we know that ceo melissa mayer has made online and digital a big part of yahoo's growth strategy. this will be a news item we'll continue to watch. back to you. >> thank you very much. this is yet another pretty small acquisition for yahoo. >> there's zero chance they compete with youtube. youtube's got -- >> $300 million acquisition to compete with youtube. >> it's fine. >> i care a lot more about the whisper numbers on the alibaba ipo.

and that is something that is much better than where we were a couple of weeks ago. 35 to me is a bottom. i think where you can trade yahoo with a stop probably just below that. and i would get long here. >> that's 100% of yahoo's value or more, and i think people are concerned about these kind of acquisitions. are they doing anything? >> anything after so many little -- >> no, but it becomes very mechanical, i think, and that's where people have been trading it only. >> gm announcing another recall moments ago, saying it is more than doubling its recall, related charges in the first quarter. just one day before mary berra gets grilled on capitol hill. and later, white house press secretary jay carney cautioning against two weeks ago, we'll take a look at how carney's investment advice is panning out. aflac.

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♪ take a look at tesla kicking off the top trade today. falling just under 2%. the general manager in china reportedly left the electric car maker as it gears up in the largest automarket. guy adami, where there's smoke, is there fire? >> the news flow now for since what is it -- i don't know, earlier, beginning of the year has been decidedly negative, right? and it's become increasingly more difficult to trade the stock. i get the feeling, though, that the next cycle of news is going to be anything but negative. you've got to believe that he's going to come out with something. i think they're due to report in about three weeks or so. to beaks' point, i think you

have to start picking away. i thought 225 was a support, it's not. i think it will turn for these guys. >> what does that mean? >> just -- >> more positive news flow. >> negative news flow to positive news. >> they want to make a push into china. >> leaving after a year being on the job. >> not good. but two weeks ago, tesla would have been down 10% on that. i'm certainly talking being wanted here, what i'm saying, you're starting to see that turn in the stock, starting to see that turn in investor behavior. >> to my issue with this stock, we know it's a disruptive technology, it's a technology company, you better be valuing it as a technology company if you're in the stock. but in the auto sector, it doesn't play out overnight, it plays out over decades. it's a very good report. it's an 85-page that gets into. no one questions. it's phenomenal. to say there's not going to be any competition, this valuation makes sense. >> it's more than an auto

company. >> i get that. >> it's a solar play, it's a lot of different things, and that's where the so-called valuation, it's hard to use the word valuation when it comes to this, but that's where the excitement, let's say that. that's where the excitement comes from. >> a lot of disruptive business, i think, is priced in. >> sticking with autos, more bad news for gm. a recall out today for older model vehicles to fix a power steering issue. gm will have to more than double the recalling related charges. we will see the ceo headed to capitol hill regarding the ignition switch recall. it seems like it's one recall after another after another at this point. >> i can't really keep track of them. it's a drumbeat of recall news here. i think, though, the shareholders have gotten somewhat -- i think it'll be interesting to watch her handle herself tomorrow. i think she's done a good job trying to get in front of this, expanding the recalls is probably helpful, as well. i think because she's a woman, they will be not as hard on her

as they would be on a man. not that she needs that, i don't think she does, i think she's fantastic. >> if i had said that, by the way, that would not have gone over well. >> i understand, and i think you're right. it wouldn't have been received well. but i think that's the truth. >> is that good for the stock or bad for the stock? don't you sort of want this moment where everything hits the table and everything is out. >> i don't think it will be. i don't think we'll see a quick resolution here as a frustrated gm shareholder, i think this is going to be dead money for a while. i don't think we're going to see a quick fix even if she does a great job. >> take a look at today's price action. today, the markets were up overall. gm is down a 1%. ford is up a 1%. >> you trade it against 34, but the longer we stay at this level, the longer i'm inclined to believe it's going to breach that level. i think that's the way you traded it, you've got to maintain the discipline. but time works against the gm long. >> same chart as every other automaker around the world. same chart. all look the same. target and wall street and

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welcome back to "fast money." we are live at the nasdaq market site in time square. is super fast trading bad for the retail investor? michael lewis' new book "flash boys." >> stock market's rigged. the united states stock market, the most iconic market in global capitalism is rigged. >> who are the victims? >> everybody who has an investment in the stock market. they're able to front run your order l. >> what do you mean front run? >> they're able to identify your desire to buy shares in microsoft. and buy them in front of you and sell them back to you at a higher price. >> our next guest designs algorithms for high-frequency trading. she's author of "high-frequency trading." and managing partner of able alpha trading, irene aldridge

joins us onset. to be fair, you're on national tv. you're trying to explain a complex issue to a mass audience. you're going to simplify things. you say that michael lewis is not qualified to comment on this topic. why is that? >> i think michael lewis has been a stay at home dad for quite some time and is completely out of the industry and has absolutely no idea what's going on as his last book illustrat illustrates. i have not read his book, i only read the "new york times" op-ed. and what i gather from that, michael lewis was way behind his time. actually, before that. i have talked to a bunch of industry people two months ago when everybody sort of learned there's a book coming out and everybody was asking what sources did michael lewis interview? did he interview you? did he interview you? and the answer was no, no, no, no. he hasn't spoken with anybody who touches high-frequency trading who is connected in any way to high-frequency trading. my personal opinion, he was just paid to write this really antihigh-frequency novel.

>> who would pay him? >> i don't know. but i've been offered money personally to write basically crap about high-frequency traders. and these people, they're former brokers, like one of his central characters who can no longer make money in the electronic environment because, frankly, people cannot compete with computers and processing all this information and it's a true fact. so michael lewis mentions a bunch of statistics in his book about what is a second, how many planes can fly, et cetera. he forgets one important piece of information. when people go to the movies, okay, they're able to only process 24 movie frames per second. that's how many movie frames you see at the theater. and people think it's a continuous picture in front of them. and it's a realtime image. in reality, you only see 24 things. that's it, right? and people are simply incapable of processing more data points in a second. it's just -- there's no way. and today's age of big data,

you're continuously bombarded by all this data. and if you want to react to it fast enough, you have to use computers. you have to use computers for high-frequency trading. >> let me oversimplify this, though, what are the problems with the industry. it's under mass attack from the rest of the world. preferential treatment is a crime. but being faster than the next guy is not a crime. what is the problem here? >> well, the problem is, computers are replacing many brokers. they're replacing many brokers that have been in business for a long time whose kids are in private schools, who have lifestyle to support and they can't compete and they're quite upset about what's going on because they used to make a lot of money. you know, when you hear the 99 percenters, well, they're really protesting the fat cat brokers that used to be made a lot of money in absence of computers. >> traditional brokers are basic -- they're destined for their jobs to become extinct and their trying to fight against it? >> yes, but there are some

brokers who are value added who have the newest technologies and this great customer service and who are necessary. and frankly, there are a lot of people who would want somebody to hold their hand. they don't want to learn about computer programs, they don't want to do anything. so all of these people are necessary. they're not going away. but there are some people who were just sitting there and watching, eyeballing the screen and, you know, i started my career on the trading floor the same way. you sit there and stare at the screen and you try to figure out what's going on in the market and say, well, because of this, i'm going to say this is a buy or a sell. it's no longer the case. computers can do a better job. >> sure. >> we were talking earlier about speed. >> right. >> and tim also that this is a natural evolution. this is no different from somebody running from -- >> literally to a trading desk to deliver the information faster than the next guy. >> let me play devil's advocate for one second. you and i were talking, we agree on that point. is it what he was saying, the retail investor who just wants to go out and buy 1,000 shares of microsoft, are they hurt in any way --

>> is the money taken from them out of their pockets into the pockets of high-frequency traders? >> not at all. it's the exact opposite is the case. it used to be the brokers would command huge bonuses, okay. and they would require high transaction costs. and retail investors ultimately paid, invested into pension funds or whatever. okay, so now the transaction costs are small because everything's done by computers, computers don't require any money compared to people. and they're much lower error rate. the markets recover from crashes significantly faster because markets realize faster that something is going wrong. i think investors have nothing to worry at all. if anything, it's all pro investor benefit. it's really the investors are the beneficiaries ultimately of what's going on in the markets. and i just rode in a taxi and asked the taxi driver, what do you think? you know what he said? he said, you know what, i see my bank account and i see my schwab

account. i just want to make sure my money's safe and everything's good. so i think in high-frequency traders, i think, are doing exactly that. >> thank you for joining us. hope you'll come back soon. >> thank you. >> guy, just quick, guy, i'm curious your thoughts about this. >> it's interesting at a time when it's most beneficial theoretically, i think it's only 40% of the people involved, probably the lowest number we've had in quite some time. clearly scared of something. i don't think it's just hft. i think it's a number of reasons keeping people on the sideline. i'm not well versed enough to know. but i do think there's something scary when machines do take over and nobody's ever been to properly explain what happened may four or five years ago. i'm not saying it was hft, i'm saying something -- >> all right. we should know, michael lewis will be on "power lunch" tomorrow for an extended interview on the release of his new book. and perhaps he can address the

allegation of potentially being paid by the hft lobby here. in an updated filing, we've learned that chinese social media player wabo will list on the nasdaq exchange adding to the growing queue of ipos this year. weibo has added morgan stanley, piper jaffray and china renaissance. listing under the ticker symbol wb on the nasdaq. >> thank you very much, seema mody. tomorrow, japan plans to implement an increased consumption tax, and the bank of japan will release the quarterly manufacturing survey. joining us now to make sense of the trade is dennis gartman. dennis, great to see you. >> always good to be seen, mel. >> some economists are saying that right now their companies are paring back on production because they're worried about inventory levels being too high because of consumption tax is

going to have an impact on the japanese consumer. what's your take about how damaging this could be to the economy there? >> well, i think the increase on the consumption tax is silliness of the first order. and there's no question. last time the japanese raised the consumption tax, you had the very normal, very human response. people bought goods months in advance of the imposition of that tax. we've seen the same thing happen this time. you've brought economic activity that would have been spread out over the coming four months, five months, six months. you jammed it into the last several weeks. and i think the japanese are looking at a deflationary circumstance predicated upon the increase in the tax, much slower economic circumstance prevailing, and i don't think there's any choice but to have mr. abe, the head of the bank of japan become even more involved in the increasing reserves in the system. i don't think there's any choice but to do that. they have to weaken the demand.

it's stopped for about the past six months, but now that we've gone past the end of the fiscal year, we got above 103 this afternoon in dollar/yen, traded up to 103.30. i think you'll be trading 1.25 over the course of the next two years. i don't think they have new choice. >> dennis, it's b.k., i'm with you on they don't have any choice, they're missing on their inflation targets. 2015 is when they are. actually said they wanted to get to 2% inflation and they're far away from that. do you have a figure on how much yen they'll need to add to the system? and they need to get there by 2015. let's talk the next six months or so. where do you see the yen trading? >> i think above 110 in the near future. i don't think it'll take much at all, beaks, to get it to trade 110. and i think that 1.25 is a low number. i bring something to this trade that a lot of the people in the business don't.

i can remember trading back in the early '70s at 2.85 yen to the dollar. it's not that difficult. it's not that great leap of faith to see that happen. if you've traded 2.85 yen to the dollar, 1.25 doesn't seem like that much of a move. your question is how much more yen must they put into the system? here's a very esoteric, very sophisticated economic term. a gob, they need to put a lot, a lot of reserves, a lot of money into the system. they need to expand it far faster than our fed has expanded the qe-2, qe-3, they need to do qe at a much more aggressive rate than our fed has been doing. >> dennis, thanks for your time. dennis gartman. let's say they have to put a gob in. what does that mean for your yen short? >> i'll have to pull out my economics textbook. dxj is your easiest way. you probably would have been better off buying at 45, but against 45, i think you can buy dxj here.

it's the simplest way. >> toyota, exporters, i think japan is cheap. the cheapest g3 market on a forward-looking basis. also japanese pension funds that have to come back in this market. >> time for fast fire here government style. during the height of russian and u.s. tensions over crimea, white house press secretary jay carney cautioned against buying russian stocks. take a listen. >> i wouldn't if i were you, invest in russian equities right now. i think the -- unless you're going short. >> all right. i hope jay carney's listening. because since that warning, russian stocks have actually been doing quite well. climbing around 6.5% compared to less than 1% gain for the s&p 500. thank the white house for that investment. >> it's so dangerous. i don't know where they get the you know what to tell people how to be investing. especially if this guy wouldn't know the russian market if it hit him in the head. >> there didn't seem to be a

hint of sarcasm. there's one thing to say in jest goofing around. >> and he could've taken it back. >> there was nothing sarcastic. i think he was really stating -- >> and by the way, from a market's perspective, that's the time -- when people like that are saying sell a market, that's usually when people in markets say i'm buying. >> all right. coming up, the company that's banking on innovation. doug bowers joins us days after the company's debut on the nasdaq. aq. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) ranked highest in investor satisfaction with self-directed services by j.d. power and associates. gundyes!n group is a go. not just a start up.

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took the plunge into the public market just last week moving higher since its ipo priced at $18 a share, traded today at $20. the company's banking on innovation by lending to venture backed companies and entrepreneurs. with us is the ceo and president of square one financial. great to have you with us. >> thanks for having me, melissa. >> what's a primary way in which your company works? do you invest alongside vcs into companies? or are you sometimes the first investors in? >> we are primarily connected with the v.c. so we spend a lot of time with the venture capital firms. but we also spend a whole lot of time, as well, in the greater entrepreneurial world around the country.

the incubators, accelerators, the young start-up ceos, as well. >> so in terms of the sectors, what we're seeing in the market, in the public market is that technology in general is doing well, biotechs are doing particularly well. does that parallel your portfolio in terms of what you're investing in right now? >> it does. so we've had -- we had a great year of growth in 2013, loans were up over 20%, in fact, loans have averaged up over 22% over the last five years. and deposits up over 15% over the last five years. and particular, deposits were up 38% in 2013 alone. so we've had a good experience, a lot of wind to our back in the greater venture space. >> mr. bowers, it's karen, let me ask you something. i looked at your financials, and i would think being in some of the early stage stuff that you're in that you would have higher nonperformers than you

do. although you have big charge ups when you do have a nonperforming. but it was surprisingly low to me. do you get a bigger spread, as well, for being in that -- what i perceive as riskier part of lending? >> well, there's a couple of things here. first of all, we are very much lending almost entirely to companies that have a degree if not a large degree of venture backing. so we'll seldom go into a straight up, if you will, boot strapped company. so we're looking very closely at the investor as we go into these things. secondly, what i would say is there's almost always a degree of value no matter what happens to these companies. whether it's the intellectual property, a degree of receivables, a smart set of engineers, any number of factors create value in these companies. so you're right, i think most people look at our business and

would think there would be a higher degree of credit loss. but actually, it's something we manage very closely and have had a good experience with. >> we've got breaking news so we're going to leave it there. thanks for your time. doug bowers. let's get to eamon javers for that news. >> hi, melissa. you've been talking about high-frequency trading on the air. now we've got news from the fbi on that front. telling cnbc that the fbi is, quote, actively investigating possible abuses involving high-frequency trading. at issue are possible violations of securities, wire fraud and insider trading laws. spokesman points out that abuses could occur if certain traders receive material information before the rest of the market. and the fbi's putting out this phone number and urging anyone with information to come forward and call the fbi at 212-384-1000. that's the news from here. fbi asking for tips on high-frequency trading. apparently looking at something.

what exactly they're looking at we don't know and we're endea r endeavoring to find out more information. >> thanks for that update. ebay is flat so far this year, but is it getting set for a big pop? we will break down the options action right after this break. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪

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ebay shares have been the subject of activist investor carl icahn and now some think the stock could rally up to 5% in the next two weeks. mike with the options action. mike? >> hi, so we saw a really good-sized trade in the april 57 1/2, 62 1/2 call spread, somebody paid about 35 cents for 5,000 of those. that's a bullish bet, of course, that the stock's going to be above the $57.50 price strike or above 57.85. this would be pushing the share price to all-time highs that haven't been seen since the tech bubble of 2000. that's understandable when you consider how profitable paypal is and how much it's been growing. when you consider, you can buy ebay for 17.9 times next year's earnings. but the s&p isn't growing revenues and eps as fast as ebay is. >> 5% rally in the next few weeks for ebay. who's in ebay here? >> this is a stock drastically

underperformed the s&p. i think the threats to paypal are widely known. i think the stock is interesting at these levels. i think people know the competitive landscape and this is a place where these guys are making it globally. >> all right. you can catch more optionsaction every friday, check out our website, optionsaction.cnbc.com. we've got your first move tomorrow when we come back. coming up on "mad money," should you resist the temptation to buy momentum stocks? [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all on thinkorswim from td ameritrade.

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time now for a trade update. more bad news for bitcoin, the virtual currency plummeting about 10%. beakers has been riding this volatile trade. >> that's for sure. it's volatile. the most recent news is that china may cut off the banks from the bitcoin exchanges. we've seen this before, 420 on bitcoin, that was the last time. >> it's a pboc official who went on weibo and basically said, you know, bitcoin exchanges are like casinos and i don't know about the legitimacy of these businesses, serious stuff.

>> it is, that's why this whole process is not like trading a regular stock, right? this is a start-up situation, the experiment. i think it has legs. i think it goes further at the pboc is clearly worried about capital flight from the company so they're trying to slow it down. >> all right. time now for the final trade. let's go around the horn. tim? >> the outperformance of emerging to developed markets is still a trade you want to play. i'd be taking profits in brazil. ewz at 45, runs into resistance, goes all the way back, takes profits here, but brazil is interesting. >> control, we have the ceo on the show a couple weeks ago. >> karen? >> you missed the last week, fireworks on fsx entertainment. but all that having been said, if you're short, time to cover, i'd buy it here just to cover, not to go long. >> guy? >> how was your trip? >> fantastic. >> thank you. >> yeah.

nice. >> look at that, guy -- >> snap on tools tonight, though. i'm not breaking any news here, but the stock reporting and the stock sold off. it's really performed well. it's defied logic, valuation has stretched, but i like the name sna. >> thanks for watching. see you tomorrow back here for more "fast." meanwhile, "mad money" starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. 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, trying to make a little money. my job is not just to entertain you but to educate and teach you. so call me 1-800-743 -- or tweet me at jim cramer. it's 1-800-743-cnbc. at last, at last the quarter went out with a bang