>> melissa, if i'm right i remember we teased this earlier. is it renovo. is there any coincidence that rhymes with le noefo? >> i'll have to ask the guy. i don't think he wanted to name his car after a chinese appliance maker slash -- >> what -- is it a chinese company? >> no, no. it's a u.s. company. it's got enfunding. it's based in california. >> just wondering. >> super high end. if you think tesla's expensive, this one's in another league. >> can't wait to find out more. straight over to you guys. >> thanks a lot, kelly. "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square. i'm melissa lee. our traders on the desk are tim seymour, steve grasso, brian kelly, and guy adami. tonight on "fast money" netflix shares nearing $700. we've got a top analyst who says they're worth just a fraction of that price and he'll tell you why later on. plus houston, we have a problem. could big oil be the real cause behind the spike in the lone star state? earthquakes evidence that claims to link fracking to the richter

scale and what it could mean for the oil trade in your pocket. first the top story. stocks surging with all three indices ending higher by 1% or more. the dow swinging back into the black for 2015. the question we asked tonight, are stocks about to break out of their tight trading range? steve grasso, what's your take here? >> if you look at where the stocks have been moving in the s&p specifically, if you look at the 50-day moving average, that's right around 2100. if you look at the 100-day moving average, 2086. picture perfect. kissed it. broke it. broke above today. it's all about greece. if i were to say we're going to break out of the range i see a head fake rally and then more, more, more pressure going forward. zplu know what was interesting was the rates were rise rising. around the world they were rising, not just the u.s., not just germany. also uk and japan. at the same time we saw stocks rally. >> they're rising most notably in europe. remember the bond intraday kissed over 1%. we were down five bips.

that's 20 times where they were two months agoes in terms of yield. germany has rallied above the main lows which i think technically is very important and again the parts of those indices that were perform ugh were seeing industrials, you were seeing financials, you were seeing things that are much more cyclical and that tells you i think that the strength in europe to me is going to be supported and if you want to buy anything on today's move i think you buy germany because not only did you retake technical levels but the dollar strength to me is what everybody's talking about and yet the euro's been the one that's been rallying. germany rallied with a stronger euro today. the dollar is going higher. the euro is going lower. that would be very good for germany. >> what happens with u.s. stocks in your opinion, brian kelly? >> first of all, we've got to dissect why today was such a big rally. and it really was a relief rally because of a potential greece deal. that's really what got this going. that's probably not enough to have this market rally to new highs. that being said, i think the rate conversation's interesting because think about it this way. it's not just that all rates are moving up. it's the longer rates that are moving up because we get the steep yield curves and we're starting to see some of the banks move up. banks are going to be a lot more willing to lend.

and if they're more willing to lend that means there's more credit out there, that means money supply increases and then that is enough to get stock market to a new high and to break out. so watch the banks. that's your key. if they continue to rally. then i would look toward the small caps, iwm. that's one that guy's talked about as his indicator. if that starts to break out, that's good news for u.s. stocks. >> we did see outperformance by the russell today. >> and the iwm, the support level's been 121, it's bounced off that a couple times. one of the theses has been if that stays above 121 you're okay. the transport weakness has not manifested itself in the broader market. we've talked about that. can the rally continue? regardless of whether or not i think it should yes, i think it will. the reasons why i don't think matter. i just think that the s&p being right here doesn't give you the long to sell the high. >> the russell's been aided by the strong dollar. so you get the small caps outperforming so you have that strong dollar issue. >> dollar hasn't been strong. >> no, the reason why the russell has been outperforming is that 80% of their revenues are derived domestically. you're going to get the

outperformance. it has outperformed by 400 basis points. now it's more like 200 basis points. but if you still get the strong dollar you still have the russell outperformance. >> i know we've all got our rally caps on. great day for the markets. but let's put this in perspective for the week we are just about flat. in the russell for the past 12 months just about flat. so where do we go from here? >> i say sell the russell. i've been saying sell the russell since last friday. my view was small cap stocks aren't going to late the move in higher rates. i'm going to stay with that because i think it's a case you want to hedge your portfolio that would be most responsive to the higher rate environment but to say one day gets us back to out of anxiety people are very concerned about the fed a lot of people are wondering whether that jolt we got yesterday is something that's going to be very much fuel for the fed's meeting this time is the fed still in play for june. i doubt it. but you can't tell me that the move we've seen in rates isn't unnerving to a lot of people. and for equities they're the only asset class that really hasn't responded as far as i'm concerned. >> at the same token we saw strength across the board. including the sectors that are

sensitive to rising rates. we saw utilities do okay, reits do okay. all the areas where you think they're going to sell when rates are stronger. >> those i wouldn't necessarily -- they were come offing a tremendous downturn. they were just brought up with the rest of the market. i don't think there's any signal there. i do think we're wondering will higher rates matter? we'll know tomorrow morning. we have retail sales. and this is a very important retail sales number because things have been slowing down. let's say we get a hotter retail sales number. bond market will most likely fall, yields go higher, then we'll see if equities actually respond to this. and that is the wild card out here. i'm not doing much in the u.s. equity market until i see that retail sales number. >> can we connect the dots again? strong retail sales means rates go higher -- >> rates go high pepper. >> meaning what will happen to u.s. stocks. >> good data by the way in the states. i think that's important. brian said also utilities and telecom didn't really rally today. they were at the bottom of the performance chart even though they were up 80 bips. financial, industrials, materials they were at high end.

that's a siren of risk. >> early june we talk about the insurers. tim has been on this rising rate motif. it's panning out. we talked about the insurers on june 1st or 2nd i forgot which day. piper jaffray initiated. we talked specifically about pru. look at the move that had today. if you think rates are going to ratchet higher as b.k. is saying now those stocks should continue to outperform. >> the kbw insurers record high. >> so they have been suffering with these low rates. so now higher rates. they can start to match their longer liabilities with longer-term treasury bonds. what's interesting about this, maybe this is the fed's plan all along because what they're essentially doing is replace their buy orders, the fed's buy orders with insurance company buy orders. it allows the fed to get out of this balance sheet trade that they have on by bringing in another buyer. maybe that's pure genius. i'll throw it out there. i don't know. but if it is it's pure genius. >> going back to utilities for a moment because i think you're the only person on this detection that actually owns a utility. >> i owned. i sold it. i'm out of the name because when

you say that it's still strong, it's not so strong. it's down 13%. so i sold it when i started to really worry about the rate rises coming on the scene. if you look at the xlu that's down 10% year to date. so a lot of these, as the two other gentlemen have said, popped off an extreme sell side low. >> all right. and tim? >> well, i think if you look at what's happened today, the better question, the more interesting thing is do i buy materials and utilities that have been also blown away by the same as the utilities with what we've been seeing in rates. i actually think you have a bit of a trade here because ultimately i think the dollar is going to move back up higher but i think the materials and i'm talking about freeport, rio tinto, bhp, these are names that were badly beaten up. you got big pops today. it's more than a one-day rally. >> your concern about ibm yesterday. ibm is an outperformer today. >> market helped obviously. it's just getting dragged up by the broader market. i still think it's a failing business. i mean, yes, yesterday was a sell-off. today it's net zero. i still think this stock on a benign tip goes down. zblup next, alibaba executive chairman jack ma speaking exclusively to cnbc's david faber biz about his company's

stock price. but there was one comment he said that has some shareholders very concerned. we'll tell you what that was. plus one biotech stock is up a whopping 32% in the past year, and a key fda ruling out just moments ago could send shock waves through the sector. the name and how you can profit, straight ahead. and later, netflix nearing 700 bucks a share but we have a highly regarded analyst who says they're worth just a fraction of that price. we'll tell you why later on. all that when "fast money" returns. what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs. because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day.

welcome back to "fast money." i'm kate rogers. jetblue reporting its passenger revenue, traffic, and capacity all increased in the month of may. now, despite the increase the stock is in the red by about a quarter of a percent as the threat of oversupply lingers over the entire airline industry. the airline expects passenger revenue per available seat mile to increase by as much as 1 1/2% in the second quarter compared to a year earlier. melissa, back over to you. >> thank you, kate rogers. jetblue has long been a favorite on this desk. tim, where do you go in the airline space? >> i'm back to the big boys. united, american, aum these guys have been so beaten up on the whole creep on capacity, i think these guys are -- the valuations

look very good. we got a rally today, not enough to stay there. >> alibaba getting a nice bounce as executive chairman jack ma sat down for an exclusive interview with cnbc's david faber who asked if ma was worried about alibaba's declining stock price. take a listen to jack ma's response. >> when they go up i'm not excited. when they go down i'm not depressed. what are you going to do? you're going to go on the street telling people my stock is too low? or you're going to say my stock's too high? forget about that. just focusing on creating the business. >> forget about it. >> a page out of elon musk -- >> i was going to say it doesn't sound like the elon musk book. but what's very interesting about jack ma is it's almost like his u.s. tour and he's talking about the next ten years for alibaba. he's saying what's going to happen, what we're going to print this quarter is probably already -- it's a fait accompli. we're in a place here we're thinking about our business, we're trying to attract foreign people into our market, in other words, u.s. small companies to be selling into china 350

million consumers. the story on alibaba is a long-term growth story. right now for investors it's what's going on with the overhang of the government and the regulatory issues. they took away the lottery business that was 2% of revenues. this is a company you stay long now, it is a long-term holding. it's 28, 29 times earnings. at 35% top line growth with a bottom line about there as well. i think the hype is way too high in terms of the fear and i think this is a very good company. >> he also said as an entrepreneur he doesn't have any interest right now in buying a large company, whether to be something like an e bay or yahoo!. >> he's an investor. >> exactly. stakes in other companies. >> if you look at year-to-date performance in alibaba it's down 15%. yahoo! is probably down 16% and change. but i'll take the -- i'm in agreement with tim longer term, but shorter-term trade i think this one can't really get oust its way right now. and he's doing the right thing. getting out there, pangt the picture. for the analyst company. but i don't think it's enough. he's giving guys something to look forward to but i think short-term it's a sell. >> it's interesting because he said if i'm worrying about next quarter today i'm screwed. i have to be worried about next quarter.

>> and screwed was the word. it was a textbook term he used. >> that's his word he used. >> he said everything he'd want his ceo to say. you want your ceo to focus on the long-term execution of a plan. now, where he said it and where the stock traded is kind of interesting to me because remember, back in 87 1/2, that's where we had that breakout when there were some questions over yahoo!'s spinout and their tax implications. and that breakout was due i think to a lot of people saying you know what, i don't really want to analyze yahoo! i was in yahoo! for the baba stake, let me get into alibaba and just have a pure play. we're back at those levels where those buyers were. so 87 1/2, great level to get in he here, great risk reward and i do think it goes higher. >> next up gopro falling on negative commentary from citi. the latest survey indicating only 5% of u.s. consumers plan to buy an action camera over the next year and that is down from 7% a year ago. citi also noting that other gopro demand trackers like youtube traffic and app downloads are becoming "increasingly soft." guy. >> and they also said there's

risk from drones. if you read this note, you feel like gopro's going out of business. so why do i bring it up? because their price target is still $56. if they're that negative, the price target should be in the 30s, not $2 lower from where we are given the valuation the stock's trading at. i'm more inclined to go to the piper jaffray note a couple days ago where they said $68 price target. i still think they've got some wind behind them. it didn't trade well today. that was me, by the way. >> in the green room. guy. whoa. >> i say stay long gopro. give them another quarter or two. i still think they can convert themselves into a media company. >> i believe. i'm a believer. but i think -- listen, they've had competition. there's been a lot of different cameras out there for years now. what makes this company different is that they are creating a media company that they are creating unique content, and i know people think oh, the drone's ridiculous. maybe the drone doesn't work. but the point is if they can

create unique points of view, and i think the nhl deal was a watershed event, if they can be the only one who gives you a shot of an nhl game -- >> but citi -- you've laid this argument out before but citi is saying basically all those metrics that feed into this notion of it being a social media company or a media are declining. >> are are incongruent. they're saying people aren't going out to buy -- well, it's what's happening. doesn't matter how good of a brand they're building. i believe this is a top drawer investment phrase. >> put it in a drawer. bottom drawer. >> top drawer. and but my point is that the brand is okay, it's iconic. so is twitter and look what's going on with that company. people are saying hey, you can't touch the gopro brand. people aren't out buying action cameras and if they are they might have it in the phone they're look at and they're probably expecting it from the next apple refresh. >> you're not going to have your iphone 6 around your neck when you're jumping off a cliff. >> when i'm in the green room. you know that. >> if on the day tim jumps off a cliff -- >> any day. >> next up here, caterpillar rallying 2% on the day after

boosting its dividend 10%. beakers. >> that was for me. caterpillar, a name similar to what grasso was talking about earlier, one of these global big company names that -- i've lost my train of thought. i'm sorry. >> pick up here. so caterpillar, if you look at the earnings forecast with caterpillar there's such a divergence between the actual stock price and where the earnings forecast is going. it's only second to john deere. this is only a by-product of fed easing at this point. i would be a seller of both. >> you mean the street's way too high? >> exactly. no, i'm sorry. the street is low and the stock price is way too high. >> i see. >> so people are looking forward to this. they've tried to short deere. they tried to short cat. and they can't. they keep getting steamrolled. it's because the fed has been so easy. if you think the fed is tight tightening at this point want to be a seller because earnings are not lining up for both cat and deere. and it's worse for dooesh but still the same story for cat. >> we got a market flash on the new zealand kiwi. we rarely talk about the kiwi here.

kate rogers in the newsroom with that. kate. >> let's talk about the kiwi. it's plunging against the u.s. dollar by about 2%. this after the reserve bank of new zealand cut its policy rate by about 25 basis points to 3.25% and the projections here also point to future potential rate cuts on the horizon. back over to you. >> all right. kate rogers, thank you. does anybody have a trade on the kiwi? >> i do. >> so listen, it's somewhat of a china play here in that -- i mean, their big product is milk that goes to china. so that has been an issue as china has slowed down, kiwi dollar's gone down. i would say you might want to look at the australian dollar too, which is fxa. that's the way you might want to trade that. you go short fxa. >> coming up next drugs and money. the battle for the $10 billion cholesterol market is on. just moments ago a new winner was declared. we'll tell you which name it is and how you can profit. and here's what else is coming up on "fast." >> why does this man hate netflix so much? ♪ because he's the biggest bear on the street and the stock

continues to go higher. will he give in to the bulls? we'll ask him. plus, is big oil causing big earthquakes in texas? explosive new evidence claims to link fracking with seismic activity. >> oh, my god. >> could it mean big lawsuits for big oil? a top analyst will explain the liabilities. all this and more when "fast" returns. ♪ hp instant ink can save you up to 50% on ink delivered to your door, so print all you want and never run out. plans start at $2.99 a month. right now, buy an eligible printer and get three months of free ink with hp instant ink. available at participating retailers. the most affordable way to print. hp instant ink.

as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business.

the fda's advisory panel coming to a decision on a second cholesterol drug this week that could be a billion-dollar opportunity for amgen. let's get to cnbc's meg tirrell with all the details. >> second day in a row were listening to outside advisers to the fda debate a potentially new class of cholesterol drugs. this one was amgen's and it did come in positively with an 11-4 vote supporting approval of this drug repathia for high cholesterol. we did see a positive vote yesterday for regeneron and sanofi with its drug. however, the stocks haven't gone crazy exploding in a positive way because of the discussion around which patient populations these drugs should be prescribed for. they were saying it should be potentially narrower than people might have thought, just for genetically defined high cholesterol or for folks with really, really high risk of heart attacks and strokes.

and that's because the companies haven't yet reported data on what are known as outcomes trials, showing just how well that lowering of adl or bad cholesterol translates into reducing the risk of heart attack and stroke. again some positive news but a little bit more tempered for amgen, regeneron, and sanofi. there are a couple more names in the cholesterol space that have been moving. esperion is one. we talked about it on stock therapy last week. it's been trading negatively because there wasn't a broad recommendation here. casting some doubts as to whether esperion which makes another drug that lowers ldl cholesterol, will be able to get approval before it completes one of those larger cardiovascular outcome studies which could take several more years. that's weighing on esperion today. also an interesting thing to note with amgen is it was recommended for approval in a very small patient population known as hofh, or -- which is just tiny. a couple hundred patients in the united states. but they did recommend

unanimously for approval in the population. that could affect the businesses of aegerion and isis which make very rare disease drugs approved just on that indication. kind of a broad spectrum of companies affected by these votes but amgen being the one that got recommendation for approval. >> your thoughts on why amgen's stock would, though, trade higher in the after hours session even though it is for a narrower patient population as to posed to the reaction we saw in regeneron in the regular session, which is down about 2 1/2%. >> yeah. i think a lot of this was baked in to what was going to happen with amgen. it was open for trading yesterday. didn't really react a ton to what was going on with regeneron. people think that the launch of these drugs might be fairly slow until we do get some more of the cardiovascular outcomes results. so that may have been a little bit baked in. there were very positive comments on what this drug does for hofh. however, it's a tiny patient population. >> meg, thank you. meg tirrell. adami. >> you watch "fast money." you were sitting right there last night, right? >> what is "fast money"?

>> what did we talk about last night on this very show? what's today? wednesday, right? tuesday night. we said you know what? the risk to the down side is in regeneron. high valuation. the vote they talked about was anticipated. we said it was halted, look for it to move lower. it did. we said the trade is to be long. amgen on valuation, that's higher. that is what that -- >> you stick with this trade, regeneron, even on the pullback. >> regeneron's a great company. i get it. but the stock has been ballistic. the valuation is a little bit absurd. i'd rather own amgen here still. all right. time for pops and drops. big movers of the day. got a drop for nvidia down 2%. guy. >> downgraded it. $18 price target. i don't think it gets there. it held 21 there. you stay long this name against 21 bucks. >> pop for amazon up 1%. tim. >> the alibaba of the united states actually doing very well here. but what's doing well here is it's holding on to a valuation in a stock that lost all investor sentiment holding that 430 level where it spiked up to. i think you can be neutral on this stock at these levels. >> pop for caesars up 6%.

>> $6 stock here. lots of option activity in it. but this is a stock that has gotten destroyed this year. it's almost an option itself at $6. if i'm going to play the casino space i'd much rather be in wynn than in caesars. >> pop for cisco. >> supposedly planning a $5 billion bond sale to fund more of a company repurchase plan. they have a company repurchase plan for 15 billion of which they're probably a third of the way into it. that seems to be the way that these equity markets have been working. buybacks, buybacks, buybacks. higher stock price. up 3% for the year. probably goes a little higher from here. >> and we get a pop for swimming with sharks. >> oh. >> check out this amazing video of one lucky diver giving a great white shark a high five. the shark enthusiast left his cage. huh. just to get close enough to slap the shark's skin ait circled the grate -- or the crate. the clip has gone wild. viral. more than 800,000 views. shared more than 16,000 times within the first 20 hours

following this facebook post. >> guy, when did you get back from new zealand? having done that. because that's extraordinary work. >> that's where you need the gopro. >> when you're high-fiving a shark. >> what is going to put their iphone 6 on their mask? nobody. >> coming up next, netflix working on a new deal with marriott and a looming stock split but none of that is enough to skroins the biggest bear on the street to make a move. or will he? that's next. plus a new competitor for tesla. the startup that might soon have elon musk shaking in his boots. that's later on.

welcome back to "fast money." the dow finishing higher for the first time in five days and doing so in a big way. all three major averages seeing 1% gains or more with the dow up 236 points. its best performance in more than a month. here's what's coming up in the second half on "fast money." are fraccers to blame for a surge of earthquakes? state regulators grilling big oil companies today to try to answer that question. we've got a special report on a story that could leave big oil shaking in its boots. plus bmw announcing its brand new 7 series car packed with high-tech features that could rival tesla in the luxury market. but up-and-coming car renovo could be tesla's competitor. we will hear from the ceo

straight ahead. netflix shares hitting all-time highs. now the top s&p 500 performer, up 97% this year. this on the back of a price target increase at ubs and a new partnership with marriott hotels that allows guests to stream the service directly to their rooms. but our next guest thinks netflix is trading at an outrageous multiple. his price target is 60% where the stock is currently trading. michael procter is wedbush securities' managing director, not to mention the biggest netflix bear on the street. this afternoon one of your fellow analysts, rbc capital markets mark mahaney joined the halftime report to discuss netflix's massive run. teak a listen to what he had to say. >> we think customer satisfaction is rising. they've reached escape velocity in the u.s. there's nobody out in that's going to take market share from them. and now they're really ramping in the international markets. more subs in the u.s. this year than last year despite the price increase. that's the definition of pricing power. you want to be long netflix. it's one of the most disruptive

companies and valuation is still reasonable. >> mark as well as all the other bullish analysts on the street have been right on this stock. regardless of what you say about valuation. do you start acknowledging the fact the stock has been moving against you for a very long time? >> mark is not only smarter than me, he's a lot better-looking than me, so he's got a lot going for him. look, i'm wrong on the share price. and i'm going to be wrong as long as investors suspend disbelief and are willing to pay for subscriber growth only. and i think mark pointed out correctly they have pricing power and they are growing at a faster rate thisser than last year. so that's worth a lot. my $270 target is acknowledging that's worth a lot. that comes out to be something like $15 billion. the problem is i don't see the earnings power that my competitors see. and the company certainly isn't generating earning this year. it's a buck 50. so the stock is trading at only

400 times this year's earnings. i don't see a lot of earnings growth next year. i'm at 217. and there's no free cash flow. so i suppose that if you're willing to pay for subscribers and just trust that someday when netflix decides to charge $20 or $30 a month nobody will quit and no competitors will enter, then it probably is worth $670 a share. i just don't think that's going to happen. if it is too good to be true, if they can in fact earn 3 or 4 billion dollars a year and justify a $40 billion valuation, that will attract competition and that will also raise the eyebrows of the content owners, who are going to wonder why is netflix capturing all the economic rent, why aren't they capturing that rent? >> i respect all these reasons that you're laying out, michael and the arguments behind the sell rating as well as your price target. at the same time how do you see this story concluding -- not concluding but how do you see the stock ever reaching your price target? i mean, what sort of scenario

happens to bring netflix down to $270 a share? >> i mean, the truth is that as soon as somebody who is a formidable competitor chooses to compete, and i think that's amazon -- >> but aren't they choosing to compete right now with prime video? >> they are. but they're not selling prime instant video as a service. they're selling prime, which is free delivery, or $99 a year for unlimited free delivery, and throwing in the streaming service for free. i think if they turn that upside down and they try to sell people amazon instant video, let's not call it prime, and then upsell you prime, so do it the way pandora does it, you get a free ad-supported service and if you want no ads, turn them off and we'll throw in free shipping, too i think amazon will have a lot more success. i think netflix will have very tough growth ahead of them. if it's free ad supported you look at pndora's numbers. 71 million free customers, 4 million paying. a lot of people are going to be incentivized to switch over to

the free ad-supported service. i think that's coming from amazon and i think that's coming soon. >> michael, you've been a friend for the show for a long time as well as to the network. i'm just curious, you stick with that 270 come hell or highwater? at what point do you say clients are looking to me for guidance on a stock to trade or invest and i've been wrong? >> you know, i was fortunate in 2014. i won the starmine award for the best earnings accuracy among about 100 software analysts. it's the third time i've won it in 11 years. people pay me for being right about earnings and i've been pretty much spot on about earnings, especially with netflix. nobody asks me whether they should buy or sell a stock. that's a buy side's job. the portfolio managers make that decision. they ask me what's the company going to earn and how are we going to get there? i'm good at that. i'm actually happy that i'm able to help these guys make intelligent decisions. and they want to hear the bear case. i'm not going to cave on a price

target until i see evidence that cash flow is growing and these guys have visibility to $40 or $50 a share in earnings. and i don't see that coming in the next five years. >> michael, thanks so much for joining us. we do appreciate it. always good to speak with you. michael pachter at wedbush securities. got to respect him for sticking to the guns. >> especially when you look at what's happened over the last two quarters where guys have followed through the next day and have been chasing the stocks and upgrading their targets anywhere from 20% to 100%. a lot of these guys were in michael's camp two earnings periods ago. a lot of guys do dcf on netflix which means they're basing it on long-term terminal values where they're throwing darts. and that really will inflate your current share price targets. i have to say i'm in the camp of people who think this stock is stratospheric and that the valuation doesn't make sense to me either. i think there's a lot of competition and international won't be as easy for them in india and china as it appears. >> when they have that earnings blowoff and rip through the ceiling on their stock chart i say you should sell the stock, take profits. i still bear with that. you should sell the stock.

you should take profits. international growth is going to be a huge catalyst going forward. and i think once they increase their per-month charge that's going to be huge. but i don't know what you do with a stock that's up 100% year to date. i think you've got to lock in something. >> still ahead, oil companies under fire about possibly causing earthquakes. could it shake up the sector? the details right after the break. plus box just reported a second earnings report following its ipo and the stock is soaring. you'll hear from the company's colorful ceo aaron levy up next. back right after this. you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent of part b medical costs. the rest is up to you. that's where aarp medicare supplement insurance plans insured by unitedhealthcare insurance company come in. like all standardized medicare supplement insurance plans,

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welcome back to "fast money." i'm josh lipton. for box a better than expected quarter, adding customers, raising guidance. ceo aaron levy on the conference call talking about where the company is and where he sees it's headed. take a listen. >> our company is energized and executing on our mission to transform the way people and organizations work. we are going after an addressable market of $25 billion annually, and we are just getting started. >> now, investors, when they talk about box, they concentrate on expenses. levee has made no secret. he intends to keep spending

after he goes after the market. sales and marketing spend was 80% of revenue. that was worth one-run a year ago. also raising full year revenue guide from 286 to 290 million. that would represent growth of 32 to 34%. melissa, back to you. >> all right, thank you so much, josh lipton. in addition to today's move in the after-hours session i should say, during the session we saw 5% move higher ahead of the earnings. >> they're not making money. if you read the articles there was just one in the re/code they put out about them. they're not going to make money for a while. but they're running the business better and if you listen to what they said it appears that way. they're trying to buy business. you have to believe the story. there's a 30% short interest. so this rally you're seeing will probably last for a couple days. i don't necessarily believe the story because by the time i think they get profitable i think there will be huge competition in the space. there's a chance to short the stock but not 20 bucks. >> we should note the ceo aaron

levie will be on "closing bell" tomorrow 4:00 p.m. eastern time. you don't want to miss that interview. in term of commoditization of the space -- >> i agree with guy i think google and microsoft are the biggest competitors and even dropbox. if you you think the bar is very low, you sell this move because it was low. even though the stock's well off its highs though those highs were absurd. >> the highs of the day on ipo. >> crazy. >> turning now to oil and a big question that texas regulators are trying to figure out, are fr frackers to blame for a dramatic rise in earthquakes? exxonmobil fielding questions about fracking activities at a state hearing. morgan brennan has the details back at headquarters. >> today was the first of several days of hearings following a recent southern methodist university report which found waste water drills drilled by x teechlt to caused earthquakes in the dallas-ft. worth area from late 2013 to early 2014. regulators ietled those wells and they're trying to figure out what's next. this is the latest chapter in

what's become a very contentious debate as oil and gas production has soared, kansas, colorado, ohio, most dramatically oklahoma have experienced an upsurge in earthquakes. in texas the usgs data shows that before 2008 the state averaged two to three quakes magnitude 2.5 or greater per year. in 2010 that jumped to 17. then 49 in 2013. and 37 earthquake so far this year. there's a growing body of research including smu's that argues that it's not the fracking process that causes quakes but the way companies build drills, some wells to dispose of the toxic waste water after the fracking. so today xto officials testified that the spike in seismic activity was naturally occurring and that the 30-plus earthquakes in question happened 2 1/2 miles below where waste water is injected, that the well is mechanically sound. next week enervest will also face the commission and after that regulators are going to decide whether to close those

wells for good. now, if they do this will mark the first time texas has held energy companies accountable for earthquakes. and that would essentially set a precedent for other states grappling with this issue as well, potentially leading to big ramifications for shale producers. melissa, back over to you. >> morgan bren brennan, thank you. how big a problem could this be for big oil? analyst at raymond james joins us on the fast line. the arguments being made by the xto officials that the spike in seismic activity is naturally occurring sounds like a feeble argument. what's your take? you don't seem to think it's a big deal. >> well, of course i'm not a scientist. there are research studies, credible studies that draw a linkage between fracking, or more precisely the water disposal, and an increase in seismic activity. while i can't, you know, confirm or deny the conclusions of those studies, that is what they say. however, it's important to sort

of realize what these so-called earthquakes are. they're not what most people would consider earthquakes in a common sense, which is things that, you know, damage property and potentially get people killed. these are low-level seismic events, tremors might be a better description, that are often a richter 2.0, 3.0 on the scale. normally people do not even feel that. it takes sensitive machines, seismographs, to actually take notice. so they may observe an increase in seismic activity but it's not something in day-to-day life that people would normally feel. it doesn't cause homes to collapse or people to get hurt. it's none of those things. when policy makers think about the issue, naturally they should look at the research. and you know, put it in perspective. these are low-level seismic events that do not cause damage

or hurt life. >> you must have stayed at a holiday inn because you played a pretty good geologist just now. at the same time, pavel, even if these earthquakes are low level, they don't cause property damage, et cetera, it could just be that policy makers and regulators, they don't like the spike in seismic activity and they will go to the frackers and say you have to change the way you drill and/or you have to pay a penalty for the earthquakes that have happened. what is the worst case scenario in your view given that politics is very difficult to predict? >> well, it is. again, when people see the word "earthquake," particularly in the media, they tend to have a certain fear or apprehension. i think the experts in those regulatory agencies that actually look at this issue will realize that these are not the kinds of earthquakes that, again, most normal people would think about. so my perspective is this is --

it's a non-issue as best as we can tell right now. now, of course, fracking has also been under scrutiny in terms of water contamination. that's a much older concern in relation to fracking. and there have been studies that raised that concern as well. but as far as the quakes, it seems to be first of all very localized to texas and oklahoma even though there's plenty of fracking in north dakota and elsewhere. i think it's also important to point out the vast majority of fracking takes place in areas where there is minimal population like north dakota or west texas. what you're referring to in the fort worth basin is one of those rare examples where literally wells are being drilled within eyesight of the fort worth downtown. >> pavel, we got it. >> therefore, even if it's slightly more serious quake, maybe a 4.0 on the richter

scale, by definition nobody would be around to feel it. >> got it. fafl, thank you. pavel molchanov of raymond james. he raises a good point in terms of there being concerns about the environmental impact of fracking long before and that has not stopped or impacted frackers. >> it's going to become a headwind for these names. but you know what a rusty wheel this whole regulatory committee could be. there's going to be a ruling on this. but it shouldn't let you really start to change your mind about a lot of these fracking companies. enp companies they call in the service names. those are the guys that do the fracking most of the time. it's not the enp guy who does it but at the end of the day the whole sector is going to be affected by it. not short-term. >> tesla facing heat with new competition from bmw announced today. but there is a startup that could be another threat. the ceo of renovo motors joins us next. stay tuned.

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the next generation of electrical automobiles may be here. renovo auto out with a prototype called the coupe which could potentially compete with tesla. the one thing which could hold it back, the price tag. the renovo coupe costs just

$529,000. chris highser's behind the vehicle. he's renovo's co-founder and ceo. chris, good to have you with us. $529,000. does it come with a butler or is it lined with gold? what makes it worth this much money? >> well, the supercar segment is where all the latest technologies find their way to market and get into the hands of customers. and that's true whether it's a gas-powered car or an electric-powered car. some of the most important innovations like the use of carbon fiber or turbocharging or even direct injection were first pioneered in super cars. it's the same with our brand. we're taking the best technology on the planet and building the best american supercar we can. >> but what about that technology? i'm sure elon musk also says his technology is best in the world and his car is a fraction, a tenth of what your car's costing. >> for sure. well, i don't know anyone that goes in to buy a ferrari and then decides to instead buy a four-door sedan. our markets are completely different. so people that buy one of our cars are looking for something that's a track car, it's extremely lightweight, it's two-door, it's small, it's nimble. tesla has a fantastic product. we're huge fans of the company.

the model s is great. and we're just two very, very different companies that do very, very different markets. >> what is your addressable market, then? who will buy this car? zblot people that will buy this car will be people that are already owners of super cars, people that enjoy extremely high-performance vehicles. this is the first product that we're launching. we have a lot of other products planned. but our focus right now is taking this car from the production, from the prototype that it is, to a production car and making sure that it can hold its own against the best supercars on the planet, whether they're electric or gas. >> how many do you think you'll sell? and i ask this because you talk about production. how do you ramp production for such a specialized product and get any sort of scale? i mean, it sounds entirely possible that this thing could cost well over $529,000. >> it'll cost 529 when it comes to market. our goal is to sell a small handful of these cars. but like i mentioned, the supercar market is really about taking technology and proving it out so that it can move down market.

and that's what's happened historically. that's where tesla started. they started at well over $100,000 at a price point, built a few thousand cars, took what they learned and used that to build tens of thousands of cars in the model s and hopefully hundreds of thousands of cars in the model 3 in the coming years. our playbook is the same. we actually involved one of the co-founders of tesla on our advisory board since day one. we're following what we think is a very reasonable playbook to get from an initial high technology startup to a high volume company. it took tesla ten years to get to about 30 billion in market cap. if we can do even half that good we'll be very, very pleased. >> chris, great story. thanks for sharing it with us. chris heiser, the ceo of renovo supercar. >> competition is coming in the form of bmw. it's coming from a company like this. but i still think tesla's way ahead of the competition. i still think it goes higher. i know it was down today. i think it pushes toward 290. and i loved him in the monkeys. he looks just like peter tork. >> mickey dolenz possibly. >> great day for the bank stocks.

traders taking a liking to one name in particular, mike kuo. which one? >> bank of america. here's what we saw. somebody sold 10,500 of the july 10th 17 strike puts. then they boston 10,500 of the 17 strike puts and they sold 10,000 of the 18 strike puts. you might ask yourself why would you do a trade like this? stock goes down 5%, only loses 300,000. stock goes up 5% it makes a million. that's why these trades make sense. >> all right. bank of america. and we saw regionals do well today. you love bank of america. >> i do. i'm in bank of america. and if you look at citi and bank of america, those wrt names that were thrown out. those wrt catch-up trades. i said it a couple days ago on the show. that's why i stayed in. i'm in a little bit lower, about 10% lower, 12% lower in bank of america. i'm staying there. >> and you like the insurers. prudential. >> prudential and metlife. both of those look good. they've had a run but i think they've still got a will the more to go. >> for more "options action" check out the fum show 5:30 p.m. eastern time on friday. coming up on "mad money" tonight

krr cramer's got an exclusive with the ceo of doctor on demand, a company that could make going to the doctor's office a thing of the past. plus the newest addition to his healthcare hot list and a stock lesson brought to you by mr. t. had to -- did i read that right? yeah. mr. t. all that and much more. >> i pity the fool. third tuesda. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this. leave early go roam sleep in

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as the company that's all about printing. but did you know we also support hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. dow's back in the black.

but is this rally the real deal? don't sing and dance until you get my take. plus a game changer for the doctor business. a $275 bargain and what mr. t can teach us about the stocks. "mad money" is next. 3w4r. time for the final trade. around the horn we go. tim seymour. >> i bought michael kors on that huge fall. i think the company is not broken. but i took some profits yesterday. and i think it's a decent time. i think the stock's going to have trouble moving much from this legend. >> john deere up year to date. take profits here. >> 386 is your badge number. >> now i get it. >> beakers. >> tomorrow morning we have retail sales. very, very important number. the bond market yields have been spiking. you get a hot retail sales number you buy tbt. i'm short 30 years. but you can do tbt. >> guy adami. >> fun show. >> fun, fun, fun. >> good times. >> remember michael burns, good-looking man, we said if lionsgate recaptures $32 level price is secondary off to the

races. what happened? tim seymour bought the stock. look at it today breaking out. lgf. that will get you done. hi, michael. he watches, by the way. >> i know he does. hi, michael. i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 for more 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 prompt to help you find it. "mad money" starts now. >> hey, i'm cramer! welcome to "mad money." welcome to cramerica. other people want to be friends. i'm just trying to save you money. my job is not just to entertain but teach, educate, and put things like this into context. call me. or tweet me @jimcramer. so that's all it takes. a better agreement between