>> i think it's illinois. a long journey begins here. route 66. began in chicago area in illinois. made its way to california. you're looking to lewis & clark, i'm looking to route 66. >> part blue, part red. >> i understand. michael jordan maybe. live from the nasdaq marketsite overlooking new york's times square. i'm simon hobbs in for melissa lee. good evening. cnbc's breaking news coverage of the two biggest stories in the after-hours session continues. we start with that 7 for 1 stock split at netflix, and later boeing's new ceo. but first, julia boorstin on netflix. you saw this coming clearly, julia. >> absolutely, simon. the 7 for 1 stock split will be effective in the form of a dividend payable on july 14th to shareholders who have owned the stock as of july 7th. this news of course sending netflix shares trading higher in after hours.

this was very much expected, simon. after the company at its annual shareholder meeting about two weeks ago took a preliminary step for the stock, which is expanding the number of possible shares. now, this was key because they needed to get that done before the stock split. two weeks ago i reported that the split would be anywhere between 5 for 1 and 10 for 1. here we are with a split at 7 for 1. right in the middle there. now, the purpose of the split is to bring down the price of the stock, which has gained about 100% in the past year. it's now one of the most expensive companies on the s&p 500 in terms of the price of that stock. and to bring the price down for retail investors and also to help those netflix employees who are participating in its options program to be able to exercise the options better. this is to help employees and also retail investors and very much expected since that annual meeting about two weeks ago. simon? >> though just for the record julia, the authorization on the stock was 30-1 wasn't it?

so there's still a lot of slack there that for whatever reason was designed in but not used. >> well what they did is by expanding the number of shares to that potential of 30-1 what they were really doing was expanding the number of shares that netflix has to more in the range of other companies in silicon valley more in the range of facebook or apple. but we never thought they would do a split as big as a 30-1. so the 7-1 range was a little more expected. of course it only brings down the price of those shares to about $100. so it's not like it's going to be one of the lower-priced stocks, but it was a big move down for net flix to make it more accessible. >> julia boorstin on that breaking news. let's bring in bob peck managing director at suntrust robertson. you have a hold rating on netflix. it's one of the best performing stocks in the s&p 500 this year.

>> it is. we absolutely love the netflix story. they are disrupting linear tv. they're expanding internationally, getting into japan, getting into china, trying new things like crouching tiger coming up this august. fantastic story. the tough problem we have is that it currently trades around 100 times ebidta this year or 75 times next year or 40-plus times ebidta 017. that's for a company growing top line around 20%. though we love this story we have a tough time putting investors in. >> but none of that changes if w. a 7-1 stock split. so why do you think they're doing this? >> i think it makes the shares more affordable. options tore employees as well. >> the retail investor? >> you saex the retail investor as well. all those are logical arguments. but to your point it doesn't change the valuation. it's still an expensive stock. >> a growth manager is going to pay a growth premium for this. i totally get it. but i look and say netflix, their international expansion is huge, they're going to be in 80 markets by the end of 15 200

markets by the end of next year. i look at it and say they have 45% penetration in the u.s. right? five years from now they're not going to have close to 15% penetration in international markets. the opportunity for them internationally enormous. we talked about this on the shelf, $1500 stock easily. >> it's a great point. and the longs that own it right now, that's exactly how they're looking at it five-plus years or so. >> so what's it about? is it about execution? is that the risk that you're worried about? >> it is about the execution. actually, deploying in those markets, getting the uptake in those markets. you remember about two quarters ago stock got hit by about 30% or so. that's because they stumbled in both domestic as well as international. so if you had any stumble like that at these valuation levels that would be the risk as an investor. >> so to that point then bob there does seem to be more competition. with the hbo -- everybody seems to be offering a similar product. it's driven people into netflix. how long does that last?

is that part of your thesis that perhaps competition starts to erode some of that growth? >> there's something now called popcorn time which is allowing people to get some of this content for free without paying for it. i think the way reed looks at it it's almost a portfolio of video assets so, you get hbo go as well as netflix, as well as maybe some basic cable to get your live programming, so not just one winning all. >> let's go back real quick. the problem with international growth, though one of my partners pointed out, is licensing. that's why they're so competitive for their own content. >> right. >> you that really can't grow that much internationally unless you own the licensing. >> that's exactly right. there's a commitment risk side where they have $7 billion of commitment for this licensing going forward. so you're counting on actual subscriber uptick in those markets to get at your r.o.i. the further you go out on that risk spectrum as far as content it becomes a little riskier as well. >> hold that thought. we're going to come back to you on facebook later in the show. in the meantime here's a quick look at how other stocks have performed since their respective

stock split. starbucks is up over 13% since its april split. apple is up over 38% since it split last june. and mastercard up 15% since it split last january. exxon almost doubling since july 2001. and finally, lockheed martin up a staggering 352% since its january 1992 split. guy, you were -- you were slightly negative about this as to what that would mean for the professional investor before we came on air. you don't think it's hugely relevant. >> all the stocks you mentioned were stocks that were going higher. companies aren't going to split their stock if the stock performance isn't there. by definition these are all going to be great performing stocks because but for the fact they were going higher they would never split. i understand what they're doing. i get it. it's just one more reason i guess to own netflix. you have to remember i've been bullish on this stock now for quite some time. it's been very difficult to stay steadfast on a name that trades at 200 times forward earnings.

but reed hastings that's not misstepped since 2011. you want to talk about one of the great ceos out there. he's one of them. it'll come to a point where the valuation gets in the way. we're not at that point yet. it's very difficult to replicate what netflix has. >> just underline the point that he's making. that a stock split is a symptom of a stock that's going higher, not necessarily a reason for it going higher. >> when we look at the negatives with netflix, everyone talks about -- guy just named it valuation. he said valuation hasn't gotten in the way yet. but when you look at a stock that trades at $700 or $650 it begs the question of valuation. when you look at a stock that trades at 100, perception's reality. there's a dual reason why companies do this. they get people off their back as far as valuation because not so many people are focused on it. >> $1,500 was your -- >> 1400 $1500. it's all about their traction. they've got roughly 68,000 62,000 paid monthly subscribers right now.

they're going to get 150 million, no problem in five years. i don't see that being an issue at all. i think it goes even higher. and they've got pricing power. 9.99. hbo's 14 bucks, 15 bucks a month. i think they can boost pricing as well. i think pricing, the combination of increased pricing and just the additional growth overseas. it's going to be amazing for the story. >> it may be amazing for the story in five years from now. but moments like this b.k. likes to take a step back. let's take a look and forget it's netflix. you have an asset that's up 742% in two years, trades at a questionable valuation. i'm not going to make too many judgments on it but it's higher than a market multiple for sure by a mile. and they've just made a move that's going to bring more retail investors in. that's not a stock b.k. wants to own. i am absolutely of a sell here. i'm not saying it's going lower. i'm not saying short it. but i'm saying you've got to take some profit on this move in the after hours and tomorrow. >> it is a very busy post-market session here on cnbc. we'll have more on the boeing

news as well. shares falling in the after market on the heels of that announcement that it will replace its current ceo jim mcnerney. we will tell you what it means for the stock potentially in a special report after this break. plus move over arabella. we've got a look at the next two stocks with charts that are screaming for investors to hit the sell button. and later on the show it's tough out there for a short seller. we're going behind the scenes with one short seller who won't give up on his claim that the market is still overbought. that's all when "fast" returns. ♪ ♪ [ radio chatter ] ♪ ♪ [ male announcer ] andrew. rita. sandy. ♪ ♪ meet chris jackie joe. minor damage or major disaster, when you need us most, we're there.

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you're looking for a place for your life to happen. zillow. boeing has a new ceo. phil lebeau joins us now on the "fast" line with more. phil was this a surprise? >> not a surprise because we've known for some time that dennis mullenberg would likely be replacing jim mcnerney as ceo. i think maybe the only surprise is a bit on the timing. we've known from talking with jim mcnerney, from talking with executives at the company that he was not in any hurry to step down. you know about a year ago they named dennis muilenburg the

chief operating officer and while they didn't say it at the time it was pretty clear that eventually there would be a smooth transition from jim mcnerney to dennis muilenburg and that's been put into place right now. we know jim mcnerney was hoping to stay on at least to the 100th anniversary of the company in 2016. and he'll be doing that as the chairman. he simply will not be the chief executive officer. but this should be a smooth transition, guys. dennis muilenburg has been with boeing for 30 years. prior to being chief operating officer and coming up to work at the headquarters in chicago he was down in st. louis. he was running the defense division. he had numerous roles, executive roles within the company. so he is highly regarded within the company. wall street is comfortable with him. and he knows the various facets of the boeing business. i think that most on wall street, while there may be a knee-jerk reaction by some investors to say look jim mcnerney was an all-star ceo and

you're sorry to see an all-star ceo leave, at the end of the day i don't think boeing is going to miss a beat with the transition to dennis muilenburg. >> david? >> couldn't have said it clearer. this isn't a stock-moving transition. i think that it's been telegraphed by the street. so no i don't think the stock moves on this at all and i think it tells you something about the company they promote within. i think it's a very very solid sort of characteristic of boeing. i think they've always been willing to move people up the ladder. and i think that just goes to tell you what kind of company it is. >> nice to see you. thank you for joining us on that breaking news concerning boeing and the transtoigs aition to a new ceo. b.k. >> there's nothing game changing about this. if anything it's off i think about a half percent in the after hours. it gives you an opportunity to buy here. this is a longer-term concern with boeing-s they get a lot of their revenue obviously from these upstart and developing airlines in the emerging markets. if something happens in the emerging markets boeing could

get hurt. that's not happening today p on this news if it's down you buy it. >> in durable goods orders out today it was obviously soft in the aircraft department. if people are going to look for a reason to sell you could see it here. especially at the price level it is. i'd rather still buy the airlines. and i'll buy the airline that seems to produce the most amount of profits and that's jetblue currently. whenever you get a chance to buy these airlines on a dip and everyone's been bullish about them as of late you see guy pointed out morgan stanley initiated them, today jetblue. >> we'll come back to that. specifically on boeing. >> trade it against 140. 2014 was a nuncfunky year for the stock. here we are testing that level. i think you get long against 140. the paris air show was a dud. not a big deal. first time in years that actually nobody really talked about it. but at 15 times forward earnings i think boeing's fair here against 140. own it on earnings in the middle of july. >> what about the dollar effect? if we're going through a period where we're focusing back on what the fed might, do maybe it's going to be aggressive.

we can debate that. >> it could hurt. the xm bank also could hurt. >> there's a lot of things out there that are threats to boeing. i guess the point on this particular ceo change this isn't the threat to boeing. right? the other part of it is defense stocks have been on fire and boeing trades -- you know trades about 15 times next year's earnings. 2.6% dividend yield. so it's not a bad stock right here. i agree with guy. 140's your bogey and it's a great risk-reward. >> we should point out that ceo departures aren't always a bad thing. six months after michael eisner left disney the stock was up 20% after ceo steve jobs left apple the stock was up 34%. but when ford's alan mullally left ford fell 10%. let's bring in jeff sonnenfeld. senior associate dean at the yale school of management and knows most of these parties extremely well. what do you think of this departure? >> thank you for the beautiful

titling. in this particular case not only do you guys nail it just right, i think of course phil knows this industry better than everybody on the planet except for maybe one of the ceos in the industry. but i do think the analysts there also nailed it. this is a very good, very smooth succession. i did talk with jim mcnerney and had dinner with him last week. as you guys were just saying the paris air show was not a big surprise. i wouldn't call it a big bust as you said. at least not for boeing. it was actually -- boeing got an $11 billion deal there. it was the biggest deal there. they sold 100 737 aircraft there, which is not their hottest item. but it's a pretty good deal. they sold it to an air leasing company. but jim mcnerney came in just for context, remember everybody, a really troubled place that you had phil condit who had a pretty stormy

controversial reign. many questionable deals in terms of defense contracting improprieties. and then a guy came in harry stonesafer a great guy, and he got caught up in a scandal. jim mcnerney came in this fallen icon and brought tremendous stability but also incredible growth. this is the best decade in the entire history. literally ten years to the day jim mcnerney took over. if you hear bells ringing in the background, i apologize. i'm on a train. >> i thought you were going to say you're at an airport jeff. >> no. >> this has to do of course with the explosion of demand for commercial aircraft in asia. it's a great time to be rung an airline arguably and supplying the equipment arguably. >> it is. and he's found the defense and civilian aircraft very well. they were heavily weighted toward defense before. jim's brought that balance back. >> just before guy has a question, very quickly, since

you pointed out you were at dinner with him last week and without wanting to intrude on a private conversation was there anything sugds at that dinner that maybe he thought now is the time to spend doing something else, still saying chairman of course? >> i wish i could tell you i had the inside word. i'm completely surprised when he contacted me today to tell me because last week we were just talking about what some thought was a little bit of reversal in course as he was talking about creating a new middle market aircraft, something between the 737 short haul and this great new miraculous 787 dreamliner which was way late coming out because of the huge contractor problems he was handed when he took over. but i thought he was going to want to see that through. and just like phil suggested, he would want to stay on for the centennial. >> jeff, that was my question. did he speak to what the next growth area for the company was? obviously, people don't talk about the aerospace defense i don't think nearly enough. but did he speak twor he thought the next growth area was for

boeing? >> i'm sorry. >> you probably can't hear us jeff. i fear you might be going into a tunnel and we're going to lose you. >> yeah, i think we are in a second. >> that's the nature of dynamic traveling. i think we'd probably better leave it there, jeff. jeffrey sonnenfeld. be well. travel well. coming up if you thought arabela's sell-off was scary, we've got three stocks that can suffer a similar fate. in the meantime here's what's coming up on "fast"." >> are short sellers a gieg breed? we'll hear from one short seller whose fund has been brutalized this year. why he's sticking by his claim that the market is highly overbought. you've got to hear it to believe it. plus, it's time to tap the rockies. well, maybe not. because a top analyst says the beer trade may be tapped out. and we'll explain why, ahead on "fast."

we want to quickly recap two breaking stories in the after hours session. netflix rising on news that it will be a 7 for 1, a 7 for 1 stock split. and shares of boeing edging down on news that long-time ceo james

mcnerney is going to move over to the chairmanship of the company to be replaced by the chief operating officer. we will continue to bring you breaking updates throughout the hour particularly on the latter of those two stories. in the meantime one of gopro's key suppliers, ambarella, saw a sharp drop to the tune of 13% in the past week. and if you thought that was a fierce decline, it has nothing on the next two charts that our next guest has uncovered for us. evercore isi richard ross is checking the charts at the smartboard. take it away. >> simon, first things first. we're in a bull market here and you will be much better served by buying strength rather than try to pick the top and a high flyer. that being said clearly there's a place for short selling. i've got a couple of examples i'd like to show you. let's start with skyworks solutions. this is a real market darling. by all measures this is a fine company. but let me show you what i don't like about this chart. it's been two years since we

touched this purple line. 50-week moving anch. the stock has risen almost 837%. why is that important? let's go back to 2011. another two-year period where we remain above that long-term trend line. we also rise about 390%. it takes two years to unfold. that culminates in a 65% pullback. even if we don't have a pullback of that magnitudes, you can clearly see just to get back to the long-term trend line we're talking about a decline of -- up 380% in two years. a lot of bearish technical symmetry in admittedly a very fine company. on the next chart we see biotech, a lot of high flyers. i'm a big fan of large cap profitable biotechs, the r.e.b. however, stocks like biocrist pharma, not to pick on the name per se up 107% in just the last two months alone, and on the candles we have a very bearish formation. the gravestone doeji. anything called the grave stoebstone is clearly not a good thing.

with the stock around 15.50, $3 down i'd be a seller here. once again a bull market. you want to pick your spots and pick your stops close by. >> we'll leave it there, rich. thank you for the information. richard ross joining us there from evercore isi. after the break we've got the brand new ceo of boeing dennis muilenburg and the outgoing ceo, james mcnerney, joining us on cnbc. aring them first. charge! so why would you invest without checking brokercheck? check your broker with brokercheck. ♪ what if we finally had a backyard? that'd be amazing. ♪ hey, what if we took down this wall? ♪ what if this was my art studio? what if we were pre-approved? ♪ shut up. from finding, to financing. how'd you do that? zillow.

breaking news in the after hours session. long-time ceo james mcnerney is leaving the company effective july 1st, and c.o.o. -- his c.o.o. will take over. i'm not sure that's strictly true. i believe he's staying on as chairman. let's get to the "fast" line and to cnbc's phil lebeau who is joined now by both gentlemen. phil, take it away. >> thank you, simon. i am joined by jim mcnerney, who is the current ceo and chairman of boeing who will be leaving and stepping down as ceo effective july 1st. and his successor is the current c.o.o., dennis muilenburg. they're joining us on the "fast" line. and jim, let's start first off with you. why now? why the transition to say it's time to hand over the reins to

dennis? >> well i think it's a little bit of a generational shift. in a month or so i'm going to be 66. dennis is 51. this is a very long cycle business where living with your decision decisions is important. doesn't always feel about but it's important. i've had a decade, 14 years if you count my time on the board. i think it's time for dennis who has been working with me over the last couple of years toward this date. we've been thinking this way, the board has been, for a period of time now. this is i think in the category of sort of a stable managed transition with a pretty firm business base. >> and we apologize for the announcements you hear in the background, guys. i'm calling from the detroit

airport. dennis, the trarnz igs. obviously you've been with boeing for what now, 30 years, and you are somebody steeped in understanding the various facets of the company. what are your thoughts as you take over for jim effective july 1st? >> phil, first of all, it's really a privilege to take on this leadership role for the company. i've had the chance to work very closely with jim over the last year and a half. as he said this is about stability and confidence in our path forward. i've also had the opportunity to work with our other senior executives here at the company including ray connor who's done a fantastic job of running our commercial airplane business. as a result we are well positioned as we head into our second century as a company, ramping up our commercial airplane business, growing our defense business internationally, and we're investing in productivity and innovation for the future. we have a strong strategy in place and we're going to continue to execute that with pace and confidence.

>> jim, with no disrespect to dennis, i was just reading a note that was put out by an analyst, and he wrote the title of the note "the king is dead long live the king, talking about your tenure at boeing. there is a knee-jerk reaction on wall street whenever a successful ceo steps down to say, well that was a good run, the best we're going to see for a while. what do you say to wall street to convince them that dennis is going to continue the path that you've set for boeing since 2005? >> well i think dennis is well known to our investor group, and quite frankly i've had many occasions to present to them next to dennis. and he's pretty darn good. he has the confidence of most of them. having said, that i mean dennis and i have been working side by side for the last year and a half. we've -- he's been making

decisions with me that he's now going to live with i'm now going to be part of in the chairman's role, and i think what the analysts are really looking for, because i think most of them think we have a winning hand the company's been doing well the future's bright if we execute, i think the source of reassurance that they can draw on is that we have crafted that strategy together and in many ways there's not going to be a change exception generationally. and it's time for that. >> dennis what's the number one challenge in your opinion right now? i know you've got a number of them in front of you. you've got the triple 7 bridge. you've got possible replacement for the 757. you've got some defense programs that obviously some tough choices are going to have to be made. when you look at your portfolio at boeing and your tenure over the next -- let's just say the first couple of years, what do you look at as being the biggest

challenge? >> yeah, hey, phil we see those challenges and opportunities in those areas you just mentioned. one, commercial airplane business. we're very well positioned there. we're bringing more innovation to the market now than we have at any time in the past. we do have challenges related to continuing to ramp up that business and doing it successfully and profitably, and we believe we have a strong plan in place to do that. it's all about execution. we do need to deliver on our new development programs like the 777x and the 737 max and build a bridge to those future programs. and as you saw recently at the paris air show we continued to make very strong progress on building the 777 bridge. challenges there but also confidence we can execute. the defense market a little more challenging right now. but again, i think we're well positioned and we're seeing continuing signs of international growth. and we're going to continue to

invest in productivity for the future, and that's a steady part of our strategy and one we're going to continue to deliver with pace. >> jim, one last question. you're familiar with what it's like to be part of a strong bench, when you were at ge and you were one of the finalists to replace jack welch. you've got a strong bench now at boeing, and you are now the ceo who has said okay dennis muilenburg is in the eyes of the board the right man to lead this company in the near future. perhaps for a long time. but you've got a strong bench. how do you convince wall street that that bench, that talent, whether it's ray connor running commercial or the other executives in the division that that bench is going to stay in place and you will remain with a deep bench. >> i think we have exposed our investor group to us working together as a team in many

different venues. that's one way to do it. i think they see us working together. i think results at the end of the day are the thing that count. and i think that the same faces for a company that is not achieving results is not a good thing. same faces working together for a company that is achieving results is a good thing. i think recently the same faces have been working together and we hope to keep that going. >> guys, i want to bring in steve grasso. he's got a quick question for you. steve, go ahead. >> mr. muilenburg first of all you look younger than 51. i'll start there. secondly, when you look at your commercial fleet in sales, it's roughly a $60 billion number. when you look at the feds it's roughly half of that. when you look at the strong dollar is that your number one concern, being that you earned about 37 38 billion domestically and there's an assortment of other countries that you earn about 12 billion from is the dollar your number

one concern right now? >> no steve, it's not. we do keep a very close eye on currency fluctuations. it's part of the analysis we do. it's part of our daily business. but we don't see currency fluctuation as being a strong driver for the commercial airplane business. and most of koufrptscountries are make long-term plans, stretching out five to ten years, and they're not changing their buying behaviors based on more tactical currency fluctuations. so we continue to keep an eye on that, but that is not a big driver for us or something that has altered our strategy at all. and further to that we haven't seen our customers' behaviors change at all. our backlog remains solid. >> simon, do you have a question? >> i do, actually. mr. mcnerney, i appreciate splitting the chairman and ceo role will work well for the transition. i just wonder whether that's a bit of an epii epiivephany for you

as well, that two are stronger than one or whether you would look to return the chairmanship to dennis further down the line or give the chairmanship to dennis further down the line? >> that a fair question. if you look back through boeing's history, we've had individuals have both titles. there are times when we've split, it often during a transition like this. but sometimes -- other times when events dictated it and made that the right thing to do for our shareholders. i think that's a decision the board will make in the future. and i don't want to prejudge it one way or the other. and i understand the source of your question. our board does not have one formula. our board tries to do the right thing in this regard and that could be bringing it back

together. it could be keeping it apart for a period of time. a decision for them to make. >> jim mcnerney, who is the current ceo who will be handing over the reins to dennis muilenburg who will become ceo effective july 1st, thank you for joining us on the "fast" line. and jim, one last question. relinquishing those day-to-day duties mean a little more time potentially for some pond hockey? >> absolutely. my skating's getting a little rusty. so i look forward to tuning it up a little bit. the blackhawks were inspirational. >> sounds good. thank you, gentlemen. and congratulations again, dennis. simon, i'll send it back to you. >> thanks phil. >> and well done you, phil for that doublehead xluchs on boeing. b.k., how do you trade it? >> i still think 140 is what you trade it against on the long side. there's nothing in the interview that said to me that anything's changing at boeing. i think what's important to remember is exactly what they said, it's a long cycle business. this is a five ten-year type of thing. it's the emerging markets.

the dollar grasso is talking about. that doesn't happen today. against 140. >> they traded the same multiple as lockheed martin. they should trade more like ge at 18 times forward earnings. they're going to earn $9.25 next year. that gets to you a $166 stock. i think that's where it goes. and to b.k.'s point, against 140 own it. >> 166 wow. >> i've owned this stock since roughly 1994. forget "fast money." this is slow money. i've owned it never sold it. i wouldn't sell it now. it's treated me very well. i'm staying in the name. and i'm happy he addressed that strong dollar issue that it's -- >> why fundamentally? what is it a play on that you would stay on for so long? >> what is it a play on? >> yes. >> they make planes. >> on the high-tech subsidy from the u.s. government. >> for me it's always been a solid -- when you go out and start building a book of stocks when you're younger and you start -- i entered wall street in 1993. there were a couple companies you wanted to buy and boeing was

one of them. i have no need to sell at this point. >> it's a long cycle business as he mentioned but boeing has a very sticky shareholder base. i look at it and say jim has 9 confidence of most of them -- i'm sorry dennis has the confidence of most of them. you heard jim say that. i'm sure he dunceoesn't have the confidence of all of them. you're going to see some pressure. it's a buy end weakness. i like the stock long term. >> facebook's monster rally. shares breaking out to an all-time high today. we'll tell you why $100 could be the next stop. ut 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.

tremendous growth overseas. don't look at the valuation. it's not a valuation story. people have shied against valuation in this stock for the last 18 months and have been wrong. couple sell-offs in between.

it still goes higher. squlu made a good point in the commercial break about how it screens now. >> if you screen a stock at $700 it's going it screen differently at $100. if you put up your models this thing is not going to be seen as overbought. nothing changes. but as i said when we kicked off the show perception is reality. when you look at this name now. but i'll say it. i've been dead wrong. i thought you should have locked in profits on that big gap up after earnings. right now they're defying all laws of probability. but as seaburg said it's sticky. they can raise prices without blinking an eye. >> facebook hitting an all-time high today. julia boorstin joins us now with a development that could mean potentially even more gains for facebook. julia, take it away. >> that's right, simon. facebook's instagram unveiling new tools today to make it easier to search and browse the 70 million photos and videos that are posted daily on instagram. a new explore page on instagram will make it much easier to browse all of that content. users can follow tags and places

that are trending while a more powerful search engine will make it easier to find those people places, and tags that users are looking for. the explore page will feature trending tags and places making it easier to browse in a way that we've never had the ability to do before. and the social service will actually feature curated collections of videos and photos which members of instagram's team will curate as well as popular instagramers. this is a big departure from the trend just toward algorithmic curation. also you'll be able to switch from photo to photo rather than having to go back and forth. so in many ways this will help instagram compete more with twitter by becoming more of a real-time search engine. and of course twitter and instagram both have around the same number of users, around 300 million, but instagram's growth has been through the roof. while twitter has been stagnating. one reason instagram has been more popular is it's just very easy to use. twitter has more complicated language. though until now it has been

much harder to search and browse on instagram. instagram's changes also take on snapchat's popular stories feature, which also culls stories from within a 24-hour period and on certain topics and locations. it's very interesting to see instagram step up its game to become more of a real-time engine for content. guys, back over to you. >> julia, thank you very much. joining us back at the desk. bob peck managing director at suntrust robinson, who has a buy rating on facebook. can you translate that for those of us who are not cheek by jowl as close to the story as julia is? >> the take is two things. one they're getting into curated content. that's what advertisers want. that's whuzers want. you want a more curated experience versus just what came first, whatever is latest. more quality content. >> that i curate or they curate? >> they curate for you. let's say you were going to fiji and you wanted to see various photos of that they would curate the best there. but what i think's interesting there is they're also expanding into live events. so they can curate things like

the oscars, the grammys, the super bowl, et cetera, things that are more timely and live and what does that bode well for? a good user experience but also tv ad dollars. >> it's astounding more generally the breakout you've had in the stock and the scale of the wealth that is generated in terms of those equity moves. just talk us through the valuations and where we are now. >> it's been sort of stagnant previous to the last couple weeks, in that 70 to 80 range for a while. but the valuation right now you're trading somewhere around 15 times ebidta somewhere around high 20s eps. this is for a property 17 billion in revenues growing at 50% with 50% operating margins. our target of $100. we put a 20 times ebidta multiple on it 30 times earnings. what's moef interesting is all these areas julia just talked about aren't even in the numbers yet. >> i just want to turn to facebook and compare it to twitter. the company's president of global revenue adam bain

speaking on cnbc this lunch time about its move, twitter's move into video ads. take a listen. >> we are absolutely making a major move into video. in fact last week to the marketing world we made a pretty big announcement for video. for both consumers and marketers we've launched autoplay video, essentially inspired by vine for the last two years, watching how consumers were extermination autoplay videos on vine. we brought that over now to twitter. >> does it move twitter's stock in your view the valuation on twitter, this? >> this one announcement is really good for the long term. but as far as the short term no. they still need to get over some of these user metrics, engagement metrics. when you see the q3 guidance which could be weak. this would could be the first quarter ever where sequentially users decline. >> i look at twitter and say it's a lost cause. i've given up on that stock. i think it's terrible. you talked about the user experience. it's lousy. they're not getting momentum at all in user growth. can they really get that back? can twitter get it back? is it possible to shift?

>> we think they can. and we actually like the long-term opportunities. things you may have seen like periscope. even before we were periscoping here. new products new innovation. making the products easier to use. >> is it in the hands of the market, though in the younger kids are using facebook, they're not using twitter. people are subscribed to twitter but not tweeting. >> i think the biggest question that people out there are asking is it's a $23 billion company right now. does it get taken out at this valuation? at what valuation does it get taken out? >> you've been talking about a premium on that. closer to $30 billion. who can afford something like that? you've got a google an apple, maybe some of the asian players as well. maybe some traditional media which could be interesting to think about. you think about the live content nature of twitter. the problem would be any sort of near-term dilution. >> closer term i suspect interest in who becomes the next ceo. adam bain is one of the candidates we just saw. do you want -- you've actually

caused news here yourself in who should succeed and when. >> we had a note out this morning naming the top four candidates and adam bain is one of the four we pointed to. ross levinsohn. flipboard ceo neal mohan as well as mike mccue. we listed a good 30 that have software experience. >> who do you prefer? is it about organic growth or to steve's point brokering a takeover? >> i think it's organic growth. i think it's capitalizing on this product innovation and the cadence of product innovation. i think per chris saka's post they have a lot in the pipeline. >> do you think investors are willing to wait around for that timeline of re-establishing this company? and i think some of the longer-term ones are. the reason we haven't recommended the stock is shorter term it's going to be under pressure. >> bob, nice to see you. bob peck there. breaking news on cisco after hours with morgan brennan. >> hey, simon. that's sysco with an s.

shares of sysco falling in after hours, this as the u.s.'s number one food distributor says that it's "profoundly disappointed and will review a district court ruling before deciding whether to terminate its $3.5 billion merger with u.s. foods. this is in response to a district court decision earlier that siding with the ftc that is trying to block the merger between the two food distribution giants. shares of sigs co. down about 2 1/2% in after hours. back over to you. >> guy? >> had a great 2014. it's got to hold $35. this actually may be the news that if it gets down to 35 35 1/2, you turn around and buy it. it becomes an easy trade with a very defined stop. >> speaking of asia it has been a horrible week for the shanghai composite. it has taken a nose dive, down nearly 10%, but could that be a signal to buy china and asia in general? cnbc asia correspondent and kensho expert deirdre bosa joins me with the details. >> it boils down to this when

the shanghai composite takes buy asia etfs listed right here in the u.s. the fxi a name a lot of our audience is probably familiar with the larnellest china-related etf, it is listed in new york and it bounces back big-time after a down week on the shanghai exchange. historically the ssec the shanghai comp doesn't even bounce back after such losses but the fxi returns 4 1/2% on average. need another idea? well, check out the aaxj. this is the all-country asia x japan etf. it's not in the nasdaq. this week -- rather the week after china's stocks tank 10% or more it returns on average 5.4%. if you had bought these etfs on monday morning just cred this is right after the chinese benchmark tanked more than 13% last week. you'd be sitting pretty right now. the fxi is up 3.7% over the last two days alone and the aaxj is up 2.3% since monday. and guys if you look at ken schsho's historical returns,

there could actually be more room to run for these two names. for some perspective the s&p 500 is up only about .7% so far this week which isn't shabby but if you look at the etfs, guys, trading chinese stocks a lot of people say it's like gambling in a casino but there are ways to play it right here if you are in the states and the fxi, that is the largest chinese listed etf and that could be a good way to play it. >> nonetheless still arguably a casino. thank you for that. thank you for the kensho view there. i guess a bull market lifts all boats. >> even in a bear market you get? massive rallies that come back 4%. not a bad trading strategy. in terms of longer-term plays-f you want to play the pollution problems china has and is addressing now tsl is the way to play it u.s. listed. if you want to play issue, i prefer japan. dxj. that's your way to play that. that gets you short yen, long-term -- >> fisa shares up nearly 11%

year to date and one trader made a huge bet the stock will continue to soar to the end of the year. mike kuo is in boston with today's action. hi mike. >> more than 1 1/2 times the average daily call volume. they bought 10,000 of those, paid 76 cents. that represents a million shares. good news for people look at pfizer. very inexpensive options. only up about 4% to get to the up side break even on this one. >> okay. mike thank you very much. for more "options action" check out the full show at 5:30 eastern every friday here on cnbc. coming up on "mad money" tonight, with a big run in cyber security cramer is exposing the players that might still be under the radar. plus he's covering the queen of rallies, helen of troy sxhrks, and jim gives his call on oil. you don't want to miss this coming up next on "mad money." up next on this show we've got your first move tomorrow. more "fast" ahead.

facebook gets a new all-time high. but should you take profits or friend it for the long haul? don't miss my take. plus my oil and cyber security shopping list. and my take on a stock up more than 50% for the year. "mad money" is next.

i think what the analysts are really looking for, because

i think most of them think we have a winning hand the company's been doing well the future's bright if we execute, i think that the source of reassurance that they can draw on is that we have crafted that strategy together. >> the outgoing ceo of boeing live and exclusive here on "fast money" within the last half hour as he hands over the reins of the chief executive to his c.o.o. just one of two big stories tonight on cnbc. the other of course is netflix, crossing $700 for the first time ever on news that it will split 7-1. it's time for the final trade. let's go round the horn. steve grasso. >> wendy's. i spoke to a money manager today. he loves the name even though it's up 26%. wendy's. >> david seaburg. >> ibb. you listened to rich ross earlier he told you it was overvalued. i think short term they're pulling back i'm short the ibbs. >> brian kelly. and i like blackberry even though it was down, analysts don't like the uncertainty but john chen has a plan stick with it. >> mr. guy adami.

>> simon i know you're playing hurt. got a little cold. way to go, though. bullied right through it. conagra. you stay long above 40 bucks. >> i'm simon hobbs. catch more "fast money" 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. i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to "mad money," welcome to cramerica. other people want to make friends. i'm just here to make you a little bit. call me at 1-800-743-cnbc or tweet me @jim cramer. it's tough to rally when greece isn't in the bag. they're already yapping less than a week after we thought we put that to bed