conversation. thank you for joining us here and good luck with the rest of it. >> it's a pleasure. i hope you guys keep watching. >> we'll be following along. >> absolutely. >> rami malec is the star of "mr. robot." that does it for us here on "closing bell," guys. thank you very much as well this afternoon. "fast money" coming up in just a few seconds. melissa leer, what's on tap? >> news just crossing celgene is making a pretty major acquisition. we'll have the detail straight ahead, kel. >> over to you guys. >> live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee. your traders on the decemberric pete najarian, dan nathan, karen finer sxhan guy adami. google's stealth rally. the tech giant soaring today after a big -- as google looks to cut costs are they spending money on the right things to keep the momentum going? plus janette yellen sounding the alarm on biotechs just one year ago today but boy, was she wrong. a look at the best performing players in the space since then and whether there's still time to get in. but first let's get to the story of the day. stocks posting their fourth straight day of gains but it was technology that was a real standout. some of the biggest names in the space reporting this week from

intel to netflix and google. so will tech hold the key to this rally here? guy adami, what do you think? >> i don't know if it will hold the key but i think it's going to be interesting. out of all the names you just mentioned netflix is the most interesting on the because it's been the most talked about over the last couple weeks from carl icahn, david einhorn yesterday. i think netflix is going to take off post-earnings. i think it has a 750 handle on it. i still don't think netflix can be replicated. i get the valuation is extended. right behind, though, is a 10% move in google over the last couple days that the rest of the gang with k. speak about. >> and that's sort of interesting ahead of its earnings report, google. >> it has been sort of a stealth move. we don't really talk about it that much. it's a name i've been long for a while. last year did nothing, this year had an okay year. i would love to see expense control. there's a lot of hope that we see a different kind of cfo function and always capital allocation. please, please use the money. buy back stock, dividends, something. >> doesn't that make a little nervous to see the journal article today talking about expense control a day before the

earnings? to me that's one of the things -- it sets up a little poorly. you have a new cfo. you've got to imagination the whole thing. you don't want to drop bochbltz first call is one of the worries i have. >> i think the interesting thing about google and netflix are the runs we've seen in the stock prior to earnings and whether that sets up more poorly compared to an intel. >> which has performed so poorly. >> in the face of a downgrade, though, has barely moved. >> this downgrade feels like it's a little bit late. going from 25 -- or 29 to 25. you see where the stock is right now in terms of target. this is a stock that absolutely dan's been right on this name. i was long this name for a while. finally i've gotten out of this position just because it's a name that just feels broken. it's not about the pc anymore. but unfortunately they're also getting beat in other areas, probably the data center right now and that becomes a problem right now. you look at the xlk, you ask is technology going to be the key to this whole thing? i don't necessarily think it is. i think this rotation of the market that we've had time and time again, right now it's back to the financials. and look at how well they

performed today. jpmorgan, numbers weren't particularly great. still performed. you look at the xlk. started the year around 42. still around 42. it's really just been this sideways market. had its ups, had its downs. mostly on the up side. now it's on the down and it seems like something else has taken its place. >> you've been cautious intel for a long time. the price action today does it tell you that perhaps investors have priced the bad stuff in? >> it could be. listen, we've had some very high-profile disappointments. we just had seagate. so if you're looking at the pc supply chain, we had micron, we had amd, then seagate late last week. i think the news is in the stock. i think pete may be correct. i think a downgrade at this point. the stock was trading 34 a month and a half ago. now it's 29 and change. i think you have to be very cautious, sentiment has gotten very, very poor. heading into the print. it is a cheap stock. we know they guy buy it back. i will just say one thing. when we highlighted this chart a couple weeks ago-k intel have a sort of micron moment where it's just a heat selling breakdown. if you look at the two-year chart, this $29 is a massive, massive level. you just don't want to see a

situation -- i don't think you bottom fish it right here. if the numbers are okay in the second half, guidance looks okay, then maybe you buy it at 30. i don't think you try to buy it at 29. >> we've got some breaking news on celgene. cnbc's meg tirrell's got the details back at headquarters. meg. >> hey, melissa something, big news here, celgene announcing a deal to acquire receptos for $7.3 billion or $232 per share. that represents about a 12% premium to where receptos closed earlier. $7.3 billion celgene is paying to buy receptos. with it it gains a drug for inflammation and immunology. that drug is in phase 3. the company saying it's going to further diversify celgene's revenue beginning in 2019 and beyond. again, a $7.3 billion acquisition celgene for receptos, melissa. >> me, i'm just curious. within the space we're seeing receptos in the after hours session halted for trade. but what other stock do you look

at as potential takeout targets along the same line as receptos? >> there's quite a few. probably the spaces that have been the most hot have been in cancer and rare diseases. so you've seen a lot of those companies even bigger ones like vertex talked about. receptos was one that had been seeking to sell itself for a while. i've heard other companies have taken close looks at it. and so this one should come as a surprise to nobody. however, a lot of people are questioning the valuation here as they do on a lot of other biotech names. you look at any cancer companies like clovis is often talked about. puma had been before ascot ran into some troubles but probably still trying to seek a sale. companies like that are often talked about. >> meg tirrell, thanks for those details here. again, receptos halted for trade at this hour. it was up 5%, hitting a new 52-week high during the regular session. we are watching celgene trade higher on this news. >> right now celgene is 129 1/2. i think that makes it an all-time high in the stock. i know pete talks about this. we have been steadfast in celgene for years now. i still think that is the gold

standard followed by amgen and gilead in that order in the biotech space and i do think it has further room to run. what does it mean for the rest of the space? i think in the immunotherapy, juno and kite are two names that still also have room to the up side. it's clear celgene is getting in motion. they've made a couple of headlines now over the last month or so. i don't think this is the last. i think the space still goes higher. i'll mention one thing. it was a year ago i think today that janet yellen's stock procrastinators said that biotech was extended i think on valuation. it's up 58% since then. i still think it has room. >> doesn't mean she's wrong. they're paying $7 billion for a company -- >> she's been wrong -- >> they diversify their sales in 2019. that's what meg just told us. it's in the press release. >> we're going to have much more biotech later on in the show. ivb, by the way, today new 52-week high on that. let's get back to google in the meantime. the "wall street journal" out with a story claiming google is taking a stricter approach to cost by hiring fewer employees and cutting expenses. those changes coming amidst a

cfo change with former morgan stanley staffer roth porat taking over the reins in may. rosenblatt's securities manager has a buy rating on the stock. joins us on the "fast" line. martin, great to have you with us. if i were to be a cynic when i read this news i would say google's cutting costs because it can't grow the way it used to. >> well, certainly some of you can read that on the surface. i think it's really going to be a key point when ruth guess gets on both the call on thursday and investor conferences coming up because i think there's still growth opportunities here at google and maybe the underlying message about controlling costs is just to spend it wisely and in the right places. you know, karen just mentioned about buybacks and dividends. i think a lot of people are concerned and interested in capital return. and i think her comments are going to be pretty telling. i don't think larry page brought her in just to do buybacks but that could be part of the story. they need to grow the company. they need to attract top talent because you know, aside from just the financial numbers they're competing for people against facebook and others.

they still need to and i think they can invest for growth. it just needs to be done very smart and smarter than it has been. and hopefully she'll deliver more transparency and visibility on all of those numbers as we see going forward. >> martin, it's karen. you have a $600 price target. how did you get there? what are you thinking about? what kind of growth we'll see from google. >> well, basically, kind of a 15% plus or minus a couple points top line. stable margins. a multiple of about ten times. enterprise value to ebidta in 2016 numbers. to give you some sort of comparison. facebook is about double that in terms of a $100 target on facebook. which is roughly 20 times yahoo! and others are considerably lower. so you know, actually when you look at google, $600 price target, it's roughly in line with traditional media companies. i'm not saying it is a traditional media company. but give some reference there. but i still think it was a 15% top line with stable margin, ebidta margin growth outlook for

the next couple of few years and hopefully we see her and hear her say more about how they're going to deliver that. not facebook 50% growth but still a decent mid teens growth. >> let's assume, martin, that these reports are correct, that google is in fact doing some cost cutting on its own. does that necessarily -- do you read that as it precluding google from making a major acquisition such as a twitter? >> no, i don't preclude it from a major acquisition. specific to twitter, i don't think they're going to buy twitter. that's just my opinion looking at what they've done historically and when they tend to make major deals typically much earlier and not necessarily a somewhat broken story. but i don't think those comments glued that. i think this is just kind of -- i describe it as kind of laying out the basic framework that we're going to be careful, we're going to control costs, and i think now as we go forward over the next several months again into the investor conference calendar in the fall we'll hear more comments, we'll be more about prudently investing in growth.

that could include m&a. so no, i don't think that precludes it necessarily. >> martin, great to hear from you. thank you. martin pyykkonen rosenblatt securities p i would imagine as a shareholder you're happy google is going to do the cost cutting or does that raise a red flag for you? >> no, i think you'd be pretty happy. i don't know whether it's twitter or not but i would like to see some kind of ook wiz igs in something outside of the world of the driverless cars and google glasses and all these types of things where he's talking about that being frivolous and all the rest of that. i think this is a company that needs to find where their real true growth is going to be coming from. we talked about yesterday youtube being such a great driver right now but what else is there? is there something else that they can put out there? is there an acquisition? if it's not twitter what is it that actually can produce some great growth? >> you just mentioned youtube. but they made $4 billion in sales last year. they didn't make any money on it. we've been talking about a report coming in for a long time. martin mentioned in analyst meeting in the fall. i think expectations have gotten kind of high. with this 10% move now the stock has basically flatlined for a

year. and we know why that is. if they were using some of that $70 billion in cash to buy back their stock they'd have a different sort of investor interest in it and they don't. there's a lot of things that has to happen. and i think you should go back and look at what the expectations were when tim cook came into apple and what people were thinking. it took time for changes to happen. when they started to happen it really started to happen and the stock took off again. i think you have to give google and the new management a little more time. >> sure saying we're on the precipice of a breakout. >> yes. but i think you're probably going to see some consolidation between 540 and 6 hufrn and then you need to give this company some time to reset the course. >> i just don't think it's fair to penalize them in the past for having high expenses and try to penalize them again for trying to rein in expenses. they just should be doing that. >> coming up next, amazon's prime move. why it could be thanksgiving in july for the tech tigtan tomorrow. and could another move higher be around the corner for the stock plus janet yellen sounding at larm on biotechs a year ago but her call wasn't so good a look

at whether there's still room to get in on some of the best performers in the space. ahead on fast.

we've got an earnings alert here for yum brands. the food giant, the fast food quick service restaurant giant that owns taco bell, kfc. you can see they're down about a half percent in after hours trade. the company reported per earnings share of 69 cents. that beat average analysts estimates of 62 cents a share. revenues a little light, $3.1 billion. estimates were closer to $3.2 billion. they also said comparable store sales in china were down 10%. analysts on average were looking for a smaller decline of around 8.8%. and no details from a conference call because that won't happen until tomorrow morning the:15 a.m. but some of those headlines, remember, this is a stock that's had a pretty decent rally so far this year, melissa. back over to you. >> thanks, dom. perhaps the conference call being tomorrow morning is sort of muting the reaction of the stock in the after hours session. it will be interesting, guy, to see what they say specifically about china especially since the stock market is -- >> it's had a big run. you know what has been interesting recently. seemingly mcdonald's is starting to get out of its own way after floundering around 94 for a long

time. i'm not ready to say it's fixed, it's going through 105, but it's finally showing signs of life and briefly, what day is today? >> tuesday. >> last week, pete talked about chipotle mexican grill. the stock's up about 10% in about three days of trading. >> that was the "barron's" mention when they said it was going down 10%, 15%. moon shot. >> big day for amazon here, kicking off our top trades. the stock up more than 2% hitting a new record high. the company's getting ready for its prime day, a massive sale for prime members only which begins tonight at midnight. now, amazon was also upgraded to a guy from a neutral at ubs. the firm citing strong subscriber growth for amazon's prime service. guy. >> now you're in the deep end of the pool with amszon. it's been an amazing run. we know what the valuation is. it's not worth talking about. but i think this stock is going to continue to push higher and just drag people along with it.

nobody believes the story. whatever their story is. but when they want to push the right levers, they're able to do it. i think despite the move the stock has had i still think it goes higher from here. >> what would you do? >> i think it's ludicrous. you're talking about prime day. >> what's ludicrous? >> prime day is ludicrous. first things first. >> what's the next thing? >> $89 billion in sales last year. $732 million in net income. and they're going to push a day tomorrow where they're going to lose more money on prime day. that's basically what they're telling you they're going to do. >> it's a loss leader. that's like nothing. >> you do it on the day after bastille day? let's just get crazy? >> because they want to increase the number of prime subscribers. >> that's it. that's the key. that's the key to this thing, is they're willing to lose some money to be able to get a build of their prime users. >> right. absolutely. i think -- >> once you try it you stick around. >> don't they lose money on the prime users ultimately? i mean, to me the years 2000 to 2010 were a loss leader and now we're in another series of ten years of loss leader. great product. love the company.

love it. >> dan and karen showing some love. >> it's a late upgrade as well. >> next up gopro. the stock soaring more than 5 1/2% after barclays upgraded the name to an overweight from an equal weight. also upping the price target to 65 from 50. the firm citing new products and brand strength as key catalysts behind the move. we should also note the move in gopro supplier ambarella up a whopping 8% on the day. got a price target increase from can acord. >> and both of these are tied in somewhat to the drones but when you go to gopro itself they talked about -- this particular analyst from barclays is talking about the fact they are seeing some strength in their pricier cameras. actually everybody was hitting on gopro saying they're not going to be able to compete. well, they are competing and not only are they competing they're winning because of the stellar brand. it starts with the brand, goes to the content and then you go out to 2017. that's when they're seeing these drones start to kick in. same kind of story is building out right now for ambarella. they're actually going to get some gains because of what they're seeing going on with the drones as well. that's further out. i think right in front of us

right now is gopro showing us that this is a brand and a brand that can compete against a lot of the others. >> the drone story right now for ambarella. it's expected in this quarter that they're going to report more than 10% of vechbz going to come from drones. >> that's going to accelerate. in terms of gopro they're looking out a little bit further. >> is this ridiculous? >> can you say the word competing? i don't know who gopro is competing with on that level. >> the xiaomes of the world. everybody shoots down me when i say somebody's competing with them. i'm giving you that somebody's competing. >> they have the market share there. i mean, listen, you have to make a bet whether you think people are still going to have these big bricks on their helmets or whatever in a few years. and don't bet on drones. >> the bricks got smaller. >> it sounds like you think they've got the market share locked but you think it's ridiculous because it's on your head. >> flip camera here, people, please. >> testy show tonight. thank you. >> flip camera. that's ridiculous. >> now to the big banks. two big reports hitting the

tape. jpmorgan beating the street on the top and bottom lines. wells fargo results came in mixed. this is bank of america and blackrock get set to report tomorrow before the bell. >> i'm not sure sf you said jpmorgan. the top line was a little bit of a miss pape little bit light. expense control was very good. i thought it was a mild positive. it wasn't stellar but it was absolutely fine. some of the investment bank revenues down. i think the expense control was very good. the story is well intact. if they are a $6 earnerish give or take i don't think the stock's expensive here at all. happy to continue to own it. >> goldman sachs thursday. right? we've said it. the last quarter was ridiculous. i can't tell you what the stock's going to do post-earnings because it always does funky things. last quarter was crazy great. rallied and then sold off. and now subsequent rally. i think you're going to see another great quarter. i can't tell you what the stock is going to do but i still think it's headed to 240 at some point later this year. >> did you get any read on morgan stanley which is i think your favorite? >> morgan stanley i think is one of the better names out there.

jpmorgan i think they delivered almost what we were expecting them to deliver. something very solid but nothing that's going to blow us all away but they've got all that m&a. citi fits into that bank as well. then when you look at morgan stanley i did put something on just today in morgan stanley. i think there's more up side coming. >> still ahead micron soaring on news of potential offer. but what about the other chip stocks that could be ripe for the picking? we're naming names in just a few. in the meantime here's what else is coming up on "fast." >> announcer: hedge fund moves. what the smart money is saying that just might prisurprise. you. >> holy shnikes. >> announcer: plus it was one year ago that janet yellen sounded the alarm on biotech. but you should have been buying. a look at the best performers and how the traders are playing them now. all that and more ahead on "fast." every dollar count. that's why i have the spark cash card from capital one. i earn unlimited 2% cash back on

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welcome back to "fast money." we've got a news alert here on what's happening with the s&p 500. there's going to be an index change because when payments processor paypal is split off from ebay it will go into the s&p 500. it will replace the drilling -- offshore oil drilling contractor noble corp. so again, ebay's paypal unit

when it eventually gets spun off will actually be a part of the s&p 500 along with ebay. it will replace offshore drilling contractor noble corp. in that index. so we'll keep an eye on that development as it happens toward this actual spinoff date, melissa. back over to you. >> dom chu, thank you. delivering alpha conference kicks off tomorrow and it looks like sentiment this year is looking kind of bearish. cnbc's kate kelly's got the details. kate. >> it's been a choppy year for the markets to be sure. and with rate hikes likely coming pretty soon that volatility may well continue but some of tomorrow's panelists are keenly focused on the timing of the next downturn in the equity market especially for reasons that range from greece to the fed. paul singer for one has been dubious for years now about the central bank's zero interest rate policies not just here but abroad as well. he called holding developed government debt quite nutty in a recent letter and has said that shorting it is actually the bigger short. of course a comparison to the subprime big short of 2007. based on past comments he's almost certainly bearish on the latest proposed greek deal which

relies on further austerity. overall he believes the market is overleveraged and of an unsound structure, all of which could add up to a downturn in the future. singer may be the least apologetic of the day's speakers when it comes to having strong views but jpmorgan asset management chief mary erdos has said recently that she's expecting another possible big leg down, especially on the heels of the chinese stock market's enormous setbacks of recent weeks. that down draft set against the generally slowing economy there could cause what she calls an unwinding that triggers dips elsewhere. finally there's double line's ceo jeff gundlach who believes we're still stuck in a low growth environment here in the u.s. meaning perhaps that the fed desired interest rate hikes, melissa, may not go over so smoothly if and when they happen. >> just quickly paul singer-s there any indication he has been in on a short bond trade? >> he's recommending shorting developed government bond debt to his investors and in general. that was a huge theme of his last letter. i would have to assume he is

doing that. he talked in some detail about their hedging strategies for almost any eventuality. hard to know on a net baasis where he stands. but the strong implication is that he's doing that. >> all right. kate kelly, thanks a lot. >> thank you. >> guy adami. >> tlt. talking about bonds, let's talk about it. 2 1/4 in terms of ten-year yield was resistance on the way up. stopped there a couple times. now when it blew through it's support on the way down. and we saw it manfest itself last week when the markets held off. that's exactly where we stopped. 2 1/2 in the ten-year is the top end of the range. i still think rates go down. but in order for me to be right you have to close below that 2 1/4 level over a couple of days and we've seen shown no inclination over the last xum weeks. >> it seems like the comments from mary erkdos are interesting. she's one of the few people who manages money who think there can be a ripple effect from china. so many people think china can be contained which is amazing to me given how big a power it's become in the world.

>> it's a big controversy. a lot of very smart people saying that the stock market, the wealth effect that's been createed is very isolated and this is a very centrally planned economy and then the markets are being attacked that way or at least the sell-off and it's going to be contained but remember, when we hear the term contained we heard that about our subprime and stuff like that and it wasn't until it was right on the front page where it really hit us. i'm definitely a bit skeptical. >> we should note coverage of delivering alpha kicks off tomorrow. scott walker will be moderating a conversation between blackrock's larry fink and carl icahn during the 5:00 p.m. eastern fire. sure to be full of fireworks. for more information go to deliveringalpha.com for all the details. still ahead on "fast money" micron on the move. the stock jumping 11% today on reports the chinese chip maker could be preparing a bid. what about the next m&a targets in the space? your chip stock shopping list next. speaking of m&a shares of twitter on a wild ride today after a hoax report that the company received a buyout offer. ahead we'll find out why some traders think the stock is heading even higher. stay tuned.

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welcome back to "fast money." u.s. markets finishing in the green for the fourth straight day with the s&p 500 seeing its longest winning streak since january. the dow closing back above 18,000, less than 2% away from all-time highs.

crude oil initially falling on news of an iran deal but rallying to close higher by more than 1%. here's what's coming up in the second half of "fast money." biotech stocks have climbed more than 50% in the past year and if you listen to fed chair janet yellen you may have missed out on that rally. ahead we're looking back at yellen's infamous valuation call that could have left you in the dust. and later, twitter fakeout. reports of a buyout offer sending twitter shares flying today but the stock quickly fell back to earth when the report was discovered to be a hoax. coming up we'll tell you why some traders are still betting on a big move higher for the little blue bird. but first more news on celgene and its acquisition of receptos. receptos opening just now. cnbc's meg tirrell's got more at headquarters. >> that's right. we are seeing receptos shares opening up. looks like they're up about 10 1/2% now to 229. celgene of course just announcing a deal to acquire receptos for $232 a share, or $7.3 billion in total. now, that was just about a 12% premium to where the shares closed today.

this isn't as high a premium as we've often seen on these biotech deals where we see 30% or a lot more than that. it will be interesting to see how folks respond to this. but one thing we didn't mention earlier was that celgene also early released its earnings. it wasn't scheduled to be out until july 23rd. but with this saying that second quarter revenue came in at 2.28 billion, slightly beating estimates of 2.24 billion. eps for the second quarter also coming in ahead of estimates at 123 per share compared with estimates of 114. company also increating its long-term financial targets. this is celgene. for 2020 net product sales to exceed $21 billion up from 20 billion where it said previously. as we're looking at celgene in the after hours, up 5.1% on this deal, clearly people like it from the celgene side, mel. the receptos celgene skaul starting now. we'll come back to you with any developments, melissa. >> meg, just quickly last week on stock therapy you were talking about about gilead having a shopping list and a lot of dry powder. does this put a fire under gilead to do a deal? >> there's been a fire under

gilead for a while. people have been wondering what they're doing and where they are. even on twitter folks just kind of carnelly saying okay, gilead, are you going to buy something. and you're seeing celgene g getting rewarded here. and that's why there has been such a push in m&a in recent years because investors really seem to like it. so you have to wonder for gilead and also for j & j today are they going to start buying soon. >> all right, meg, thank you. meg tirrell, our biotech reporter. pete najarian in biotech where are you? >> gilead. i like this name. it was my final trade last night. the reason is we saw some up side activity last night. when you look at what this company trades for right now, 13 times earnings, 10 times forward earnings, when you look at the numbers they're able to produce, it's not just about the hep c. they still have the hiv as well. they've got different areas which are still pumping in and givg them all kinds of ability to maybe be an acquirer of somebody and i wouldn't be surprised at all if at some point they make an acquisition. >> i want to go back to those comments fed chair janet yellen made a year ago. i have the exact quote.

>> go. >> "valuation metrics in some sectors do appear substantially stretched particularly those for smaller firms in the social media and biotechnology industries." and as we have mentioned since then, shares are up roughly 50%. the biggest winners in the past year, celgene, regeneron and amgen. which ones can you still hold? >> celgene, regeneron, and amgen. no, you know -- well, it's a long -- what was she doing talking about valuations of stocks anyway? is that something new? >> fed policy. i'm sure she thinks -- she's delighted with your opinion on -- >> i don't know if you can make that comparison. she has no business. none them have any business talking about stocks, period. seriously. that's not their bailiwick. not that we have a bailiwick here. but it's certainly not theirs. >> a wick. >> you shouldn't be worried about asset bubbles. they help create them. so they should be worried about them. here's a situation where meg just said celgene's trading up 5% in the after hours. that's a little more than halftime purchase price of reseptos or whatever they are who has no sales and is going to

add some sales diversification to celgene in 2019. it's kind of fairy dust here, people. that's where we are right now with some of is this stuff. so if the fed chair is worried about asset bubbles building, this is a $7 billion acquisition. >> she probably should have been a little bit more defined, however, when -- you can't say the entire swath and say biotech is in a bubble. the names that we were talking about that guy's been talking about and we've been talking about for a very long time. when you look at what they trade on, via p/e, they're cheaper than most of the rest of the stock market. >> okay, guys. pandora, triple d. these are -- >> the barriers to entry, though, to being a blue bird or a kite pharma are much higher than being a yelp or pandora. >> and i've seen bear markets where all these stocks that were darling go to zero. i mean, so it happens. you know, so just because you think there's a greater thing going on here you just don't want to be the last guy holding the bag. >> let's pose it to karen. karen is a value investor. karen's been in biotechnology. somehow she's found a way --

>> she doesn't buy the little ones. she'll tell you that right now. do i have to speak for her? >> no. i don't want you to. >> i buy the indices because i can't choose which drug is going to get approval. i just don't have the wherewithal to do that. and i do believe that there is a lot of pressure on the bigger ones to buy smaller ones. i do believe consolidation is still in play as we just see right now, right this minute. so i'm staying long. it's hard to fathom how on a fundamental basis but this story has worked for a long time. so we're staying long. xpi, ibb, fpt. >> this has lit a fire under other biotechs to do deals. >> i think so. listen, i think dan makes great points. but let me say this, celgene trades at 20 times forward earnings. if we considered it a big cap pharma we'd say it's relatively cheap. the best balance sheet in the industry and the highest margins in the industry. those formulas mean the stock is not as expensive as it looks at first glance. yes, there are names in the biotech space that are ridiculous. celgene is not one of them.

>> now on to micron soaring to the tune of 11% on rumors that a chinese-owned firm is prepping a $23 billion bid for the company. mirror securities executive director romit shaw is live in san francisco. great to have you with us. >> thanks for having me. >> does this underscore the fact -- or does this underscore the notion that maybe memory is strategically important? does this put a floor under micron stock? what does this do if the bid is very unlikely, which is pretty much what the street believes? >> yes to both. i think china's interest in memory is definitely real and credible. but i'm skeptical that a deal like this will go through. why do i think it's credible? china spends more money importing semiconductor components than petroleum, and a good chunk of those semiconductor components that they're importing happens to be memory and dram, which is what micron specializes in.

so they absolutely have an interest in investing in a company like micron. the reason why i'm skeptical on this deal is two reasons. one, i think the u.s. would be -- would look very critically at a chinese company buying someone as prominent as micron. and two, it feels like a lowball offer. >> what do you think micron should be worth, and do you think that there's -- is this a precursor to consolidation in the space? you saw a lot of memory-related names trade higher on the back of this. >> you know, micron's stock started the area at $35, $36 per share. so i think in order for the negotiations to get serious the offer probably has to have the 3 handle in front of it. what does this mean for other memory stocks? it's possible that you could see a bid for somebody like sandisk. sandisk has been a name that's been rumored as a takeout candidate. that stock has basically been cut in half as well. they don't specialize in dram

per say but they are very good at nand. that's in some respects a better business. >> why do you think micron's stock should be worth where it was trading before? haven't things changed in terms of pricing and pc weakness? >> yeah, yeah. absolutely. and i'm not saying -- >> why should it trade at 36? trade meaning be bought at. >> well, look, i've got a $22 price target. that's where i think the business is probably worth today. i'm speaking on behalf of the management team and how they're thinking about it. they're saying, haif, six months ago we were trading north of $30 and we were looking at earning four bucks a share. now, what happened since then is the pc market got a little weaker. pricing got a little weaker. and their costs went up. these things you could argue are temporary from the management's perspective. and over time call it one or two years down the road, you know, they'll be back on a path to earning, you know, $4 plus and get back to a stock price that's

consistent with where it was earlier in the year. >> okay, romit, thanks a lot for weighing in. we do appreciate it. romit shah of nomura. >> stock inputs basically. >> not a great trade. >> but one thing interesting here, micron just from a takeover vulnerability is very vulnerable. it's about as vulnerable as you can get. it's a delaware corporation. it has a non-staggered board. if somebody wanted to do something hostile, they could. 21 doesn't get it done. i think the shareholders wouldn't allow for that. i'm skeptical of this bid. but if there is someone out there that wants to do something, i think the door is wide open to do something on a hostile basis and have a very good likelihood of success. >> sandisk as a takeout target as romit said. >> i suppose it could be. i don't think we have to narrow this down to the memory world. we had the altera deal earlier. why isn't xilink still something that could be in play as a programmable chip? i look at qualcomm in terms of

should they split. that's been something activists have been talking about time and time again. you look at where that stock is absolutely in the doghouse just like micron. people could say it's too cheap but it's a $100 billion company. i think there is stuff in the space right now when you're looking throughout the chip world where you can either say they need to split or they could be taken out. >> all right. market flash here on mead johnson. dom chu's got the details at headquarters. >> the shares mjm, mead johnson nutrition down 3 1/2%. 27,000-odd shares have traded so far. this after the company provided preliminary results. they fell below analysts' expectations. so what they're saying is peel in q2 earnings per share 76 to 80 cents below the 89-cent estimate. also that it sees its full-year 2015 earnings between $3.63 and $3.78. that also misses the average analyst estimates of $3.93. they do blame at least in part weakness in china sales. the company saying that though disappointed with our second quarter revenue performance especially in china we are

gratified by the continued strong performance of other sectors like in north america and europe. they also said that their line of fully imported products in china launched there contributed to sales even as they failed to entirely offset the slowdown in locally manufactured product in china. of course, melissa, had they talk about product they mean child nutrition and infant formula. we see those shares down 3 1/2%. back to you guys. >> mead johnson in today's session hit a new low. it had already been in sort of a down trend for the entire year, down 12% or so. >> 52-week low. now a lot lower. probably a couple-year low. i think if you're looking for a level to buy this thing it's got to come in around $80. i'm not saying it's going to get there tomorrow. but given this, given the trajectory of the stock over the last four or five months, 80 might be right in the ballpark, folks. >> still ahead, earnings season officially kicking into high gear tonight. and we'll get the latest on csx which is popping in the after hours on the latest report. plus twitter soaring on a fake buyout offer. but we've got the real read on this, on why this is just the

beginning for a big move higher. much more "fast money" straight ahead. i'm only in my 60's. i've got a nice long life ahead. big plans. so when i found out medicare doesn't pay all my medical expenses, i looked at my options. then i got a medicare supplement insurance plan. [ male announcer ] if you're eligible for medicare, you may know it only covers about 80% of your part b medical expenses. the rest is up to you. call now and find out about an aarp medicare supplement insurance plan,

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csx reporting an earnings beat. 56 cents per share adjusted. that was three cents higher than analysts had expected. however, revenue was 3.06 billion and that was light. it represented a 6% decline as higher prices were offset by lower volumes. but falling fuel costs and increased productivity did help a key metric of railroad profitability, operating ratio. that hit a record low 66.8% for the quarter. energy the biggest focus. domestic coal volumes expected to fall 10% in 2015 for csx and export coal which has been dented by the strong dollar is expected to remain weak. but there was a relative bright spot that was intermodal, containers of cargo that move between trains, trucks, and ships. >> we've been able to grow that market about 7% a free on the domestic side over the last three years and our domestic intermodal this quarter was actually up 9%. we think there's great vibrancy there. >> the railroad also reiterating earlier eps guidance for 2015 and look at shares of csx in the after hours.

they're trading up 23% on that earnings beat. melissa, back over to you. >> thank you, morgan brennan. guy adami, where are you on rails? >> i think the quarter was okay. i don't think it was spectacular. i think the stock's traded off 20% in the last month or so. i think this -- to me it's a classic relief rally. does it have room to 35? probably. but this quarter did nothing to make me believe that the rails have straightened themselves out. >> i think the scarier read-through is the 10% drop in coal volumes that they're predicting. >> coal's definitely going to be a huge issue. csx unfortunately, they've got too much coal exposure. but the intermodal and the construction side of things were very positive. so if you're look for the positive i think those are where you're going to look. obviously this coal's a major issue. can they get up and over that 200-day? they're almost crossed right now. if they get up to guy's level they're talking about 35, maybe they can find support and then maybe we see some up side but you don't have to chase them. >> time for pops and drops. big movers of the day. pop for sun power up 4%. karen. and i don't know if it was just a little bit of a relief rally or positive upgrade but also we

have oil up a little bit and they're back correlated again. most of the solar names. >> orbitz down 2%. >> this is a ubs downgrade today. they're look at what the risk reward is to the up side. to the up side, very little risk reward. you're only going to get about 5% down side if regulatory doesn't -- doj doesn't approve this deal with expedia it could go all the way back toward 8. i'd stay away from this name right now. >> pop for king digital. dan. >> morgan stanley upgraded, slapped an $18 price target. this thing has a classic warning of just a disaster in the next downturn here. the stock is well below its 22 1/2 dollar ipo price of last year. it's got a lot of shortages. 28% here. a lot of people making that back. >> pop to a new high for palo alto networks up 2%, guy. >> we talked about this. jpmorgan initiated coverage yesterday. i think $216 price target. i'm not saying it's going to get there. a lot of johnny come latelys to the name. the valuation is ridiculous. but they're the best company in the right space. so i still like it here. >> coming um, twitter spiking

midday after a fake report hit the wires. a look at why traders are still betting on a big jump in the stock. right after the break more "fast money" straight ahead. i'm here at the td ameritrade trader offices.

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twitter shares spiked today after a false report stated that the company received a buyout offer. the move sparked a flurry of bullish activity in the options market. so dan's over at the smartboard with all the action. >> it was a flurry, mel. total options volume was 2 1/2 times average daily volume and calls outnumbered puts 3-1. there was one trade that caught my eye. it was about 10:00. it was prior to this kind of fake announcement that made somebody was looking to buy twitter. but when the stock was 36 1/2, there was a buyer at 3,000. the august 38 calls paying $1.78 per contract that's $530,000 in premium and it breaks even at 39.78. and what's interesting here is when you look at how the stock was trading today, just kind of moseying along and then it had that spike. okay. here's the chart since its ipo here, we know the levels. it's pretty simple here, people. 30's the line in the sand on the down side. this is a name that i've been long. i'm getting a little frustrated

here because other than the spike today it looks like it's got nothing but sellers. and i actually suspect if you do get a pop to $40 on some deal speculation i think you're going to have a lot of sellers there. i may exit it too because we're kind of losing faith here. i'll tell you one thing. i'm very skeptical. if they hire an internal candidate to take over as the ceo i think investors are going to be very disappointed in the near term. >> on this move today, pete, it seems to underscore the fact that people really believe that twitter's up for sale. >> i think that is the general consensus. i think folks are looking at this stock and they see where the levels are. but i think if this stock were actually somebody in the target, in the crosshairs, i think it's going to be a price a lot higher than where we are looking right now. and some of the speculation that's out there. that being said, i think this whole hoax was very scary and it's unfortunate because it just shows you the power of media right now, the social media and how quick these things get out there. we saut spike and the adjustment was absolutely incredibly fast. >> that news report in quotes, using air quotes, was crazy

because there were all sorts of mis, grammatical errors. dick costolo became dick custelo. rosenblatt earlier said he did not believe google would buy twitter. what do you think? >> i would like it if they did -- >> consider? >> right. i would. clearly every day that goes by with no deal, we were hopeful somebody at the conference, the sun valley conference. but even if there were talks about i could see it not being resolved until now. soon as they announce a new ceo i think that's it. speculation's over. >> dan does a tremendous job and i'm being at the smartboard. dan knows a lot, doesn't he? that was regis philbin. who by the way is now in the 10:00 hour i believe. and i'm getting off the rails here. but regis. because he's watching. at any rate. dan said -- i think the real level of support is 34 1/4. that's basically what we traded down to a january bounce from. that's the recent low.

bounced around for a few times. i do think you can stay long the name against 34 1/4. i don't think you have to wait until 30 bucks. i do like twitter right here. >> for more "options action" check out the full show, 5:30 p.m. eastern time on friday. coming up on "mad money" tonight, cramer's got a special chart week dive into the recent moves in am plus his take on the ebay/paypal split and the big news about a bid for receptos. all that and much more ahead top of the hour on "mad money" with jim. meantime we've got your first move tomorrow when we come right back stay tuned. facebook's been making big changes but is the social network a buy after all the greek drama? i've got the chart that can signal the stock's next move. plus an exclusive with up-and-coming cloud play box. "mad money" is next! can a business have a mind?

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be sure to catch the ceo of celgene robert hughin tomorrow live in a first on cnbc interview tomorrow 7:50 a.m. on "squawk box" on the acquisition, proposed acquisition of receptos. time now for the final trade. let's go around the horn. pete najarian. >> really interesting move again today in facebook getting up and over 90, almost $91 a share. some option activity there as well. it did pull back. i think this name's going higher. >> dan. >> yeah, google here obviously had a 10% move into the print tomorrow. i wouldn't chase it right here. i think things are setting up good for these guys but i'd buy it below 585 after the print. >> karen. >> i'm a little skeptical of this rally in greece being all

done. a little more protection and short some spiders. >> zillow, morgan stanley appreciation. held 80. >> 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. i promise to help you find it. "mad money" starts now. >> hey i'm cramer. welcome to "mad money" welcome to cramerica. other people trying to make friends. i'll just try to make you money. my job is to educate and teach you. call me at 1-800-743-cnbc or tweet me at jim cramer. you can't stop paem from hurting themselves by doing stupid things but you can try. on a day when the