mike santoli. that's what happens when you run out of time. and jon imaginarian. thanks, guys. melissa lee and the "fast money" crew. what are you watching? >> tesla. volatile after-hours session for tesla. the conference call gets under way in just about half an hour's time. everything could change based on whatever's said on that call. >> already coming back a little bit. over to you guys. >> thanks kelly. "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square i'm melissa lee. a night of after-hours carnage. fitbit falling hard green mountain tanking and tesla sliding as much as 6% on earnings, now reversing some of those losses. we will have live team coverage with all the latest headlines and all these movers throughout the hour and what it means for your money. and we've got to kick it off with tesla here. the stock very volatile right now. the call gets under way in just a half hour's time and when that begins we'll get a lot of answers. phil lebeau will be on that call. what went wrong. what can we expect to hear phil? >> melissa, we've said it all day long. this is all about the guidance for the third quarter and for full-year production and the numbers that tesla put out this

afternoon a lot of people looked at that and said that's not good. let's start first off with the production estimate for the third quarter. tesla says it will produce at least 12,000 vehicles in the third quarter. most analysts were saying they wanted to hear of at least 13,000 or 13,100 being the production slash delivery target for q3. but the real hit comes for full-year production. tesla now says it plans to produce or deliver, i should say, between 50,000 and 55,000 vehicles this year. that is a reduction from its previous guidance which was deliveries of at least 55,000 vehicles. and what is the cause of this? why are they expecting slightly lower deliveries? in the earnings report tesla says that it basically comes down to taking a little extra time in terms of the rampup of production of the model x suv. since model s and model x are produced on the same general assembly line model x production challenges could slow model s production, and that's why tesla is now saying that

next year -- or this year full production will be 50,000 to 55,000 vehicles or deliveries will be 50,000 to 55,000. as for 2016, they are increasing the amount of production for vehicles. it will now come in 1600 to 1800 vehicles per week. that works out to between 83,000 and 93,000 for full-year production. the model s average selling price in the fall of 2016 they expect that to come under pressure. also tesla is on track to produce energy products this quarter and then the model 3 we should see the first unveiling -- or the unveiling of the model 3 in the first quarter of next year. and again, melissa, it's all about the guidance for q3, q4 and looking out into the future. we know what the numbers were for q2 a little bit better than expected. the loss of 48 cents a share better than the consensus of a loss of 60 cents a share. revenue coming in at 1.2

billion. most were rpg 1.8 billion since we already knew how many vehicles had been sold or delivered in the second quarter. but again, that 50,000 to 55,000 production forecast for this year slightly lower than 55,000. that's what's weighing on the stock this afternoon. and again the call starts in about 25 minutes. >> phil thanks so much. we'll check back in with you later on. specifically from that shareholder letter they say that the timing -- it is the timing of model x production ramp and high total deliveries in q4 that create operational challenges for our delivery organization toward the end of the year. that is a concern, and that has been essentially what has been behind a lot of the downgrades that have hit the stock in the past month or so. ubs, pacific -- >> if you look at this on a technical level it's overbought on a weekly. the last two times it was overbought on a weekly were 2014 basically and it lost 33% and 37% in a stock price. is this going to do that? nobody has any idea. but that's past performance. i think you've got to wait right now. >> to me it doesn't actually --

this doesn't really worry me. we'll see what the conference call has to say. but if they told me that their sales were slowing down people didn't want their car, then i'd be concerned. but you're talking about an operational issue. could they have done a better job? should they have some better work flow processing with the two new models? perhaps. but to me this isn't a huge deal for tesla. i think above 260 for a trade only use that as your stop i personally would much rather get into it closer to the 230 level. >> this reminds me of the weather or the -- wouldn't the demand just be out then? q1 would pick up whatevers wasn't delivered or ordered in q4. >> if one is inclined to play in tesla, which i'm not because valuation isn't based on fundamentals. now or years from now. you'd want to wait till the conference call because there could be so many nuance that's you really probably should know before you jump into this and hope you're on the right side of the trade. than the other side.

i think you can wait a half hour to see more -- >> the trade has been wild in the after-hours session. down 7, now down 2 1/2%. >> i'll be dopey enough to play preconference call. that's what i do. i think the quarter is fine. yes, the full-year guidance is disappointing. what's disappointing to me is gross margins came in around 23 1/2%. that was lower than expected. how do you trade the stock? i'm going to stick to my guns. i'm sort of in the ubs camp. i don't think it's going to 210 their price target. i do think it's going to 225. we made a test of the highs at 290 level, i think we failed. i don't think we're going to trade down to the may lows of 180ish. but i do think there's a chance to go back to 225 and if it gets there you buy at that level. >> for more let's bring in jeffreys auto analyst dan dolic. he's got a buy on the stock, a $360 price target. dan will be with us here on the red phone for the entire hour at the nasdaq. dan, great to have you with us. how disappoint is that opening of the window of deliveries for 5050 to 55 versus the straight

up 55 they had given prior? >> absolutely. if you look at the knee-jerk reaction this is very disappointing because people were expecting a much higher number and they were talking about this $55,000 number for the past past year or so. but if you look at some of the discussions you guys have had, it's very interesting. tesla doesn't have a demand problem. there may be some production problems. there may be some bottlenecks. there's literally hundreds of suppliers that have to come together to produce the model s and model x and they discussed also in the shareholder letter how they're both being produced on the same assembly. so there is no demand issue. the knee-jerk reaction is disappointing. once you peel the onion you see that this is actually not a demand issue, this is a supply this is a production issue and i think on the call what they're going to have to prove to investors is there's really no demand issue. i don't think there is. but that's the -- the onus is on them to actually prove it on the call. >> i mean would you be looking on the call for them to raise 2016 guidance if they in theory buy 5,000 vehicles or so?

>> i would be looking for them to explain the real reason or the underlying reasons for the reduction in the -- from 55 to 55,000. that would soothe a lot of investor concerns about the fact that maybe demand is slowing down. i think that's the number one concern. it's less about what 16's going to be. i don't think anyone would -- i wouldn't say believe them but i think anyone would want to look and see what the reasons were behind the unexpected so to say, decline and maybe explain that better. i think that would soothe a lot of investor worries. >> tesla conference call under way in 23 minutes' time. we'll bring you the headlines as we get them. in the meantime green mountain getting roasted, excuse the pun, after hours. losing more than 25%. sara eisen is covering that story for us. sara what's the latest here? >> well there are a number of disappointments from this earnings report. not going to sugar-coat it. some of the big ones that investors are focusing on why the stock is getting so baent up in the after-hours guidance. guidance coming in sharply below

forecast. both for next quarter and also for this full fiscal year. just to give you a sense of it next quarter, which is the fourth quarter fiscal year for tour ig green mountain sales expected to fall in the low teens. analysts were looking for that sales growth to rise. in terms of earnings the forecast for next quarter missing by 20 cents. they also said earnings and sales will decline for the full fiscal year. what's happening? keurig is facing a number of problems and execution issues with its core products the pods which sales actually declined during this quarter, and the brewers, which is how they get people into their system buying these machines and then buying the k cup pods to go along with it. the brewers' sales declined 26% on the quarter. they're facing problems on both the pods which is about 80% of their business and the brewers after the release last year of the new keurig 2.0. expect a lot of questions on the

call about how they're going to turn around these fundamental trends. what's more disturbing is the company's going through a $300 million productivity savings program over the next few years, eliminating 5% of the workforce, a little more than 300 people. it's about 6,600 people globally that work for keurig green mountain and the company has authorized another billion dollars in stock repurchases, melissa, which seems a little odd considering it's facing key problems when it comes to new launches. its cold machine a little later this year and its hot machine released last year. >> sara eisen, thanks so much for breaking down the keurig green mountain story for us. what happens now to this stock? at one point we were saying this could be a takeout. coca-cola can step in and buy the rest of it. now it looks like nobody wants this thing. >> i wouldn't buy it if i were coca-cola coca-cola. sales are declining. we talked about tesla having operational issues. these guys are having a sales problem. demand is down. so for me you walk away from this thing. if i'm coca-cola, it's like an options trade gone bad for them.

move on. >> it's interesting. we talk a lot about p/e multiples. this wasn't priced for perfection but it was priced for really good growth and now not only growth they're going to have a decline. then you've got to think all right, what's the right multiple for that? i don't know. but it's a lot lower times the lower earnings that could get you -- it should be down this much. i don't think you need to step in right here. >> coming up next disney ceo bob iger says netflix is more friend than foe to his core business. but a top analyst has a certain warning to disney investors. he'll be here. plus fitbit questioning earnings but the stock is tanking after hours after initially rising. we'll tell what you it is that has investors so concerned. later the tesla conference call kicking off very soon. we'll hear from ceo elon musk on what drove the quarter. that is when "fast money" returns. stay tuned. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route.

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and provided by unitedhealthcare insurance company, which has over 30 years of experience behind it. with all the good years ahead, look for the experience and commitment to go the distance with you. call now to request your free decision guide. ♪ ♪ o0 welcome back to "fast money." i'm julia boorstin with the latest on the cvs earnings call. ceo les moonves very bullish on the tv business as it undergoes a digital transformation saying the company's seeing double-digit increases in the scatter advertising market and super bowl ad rates are surging hitting $5 million per 30-second

spot. he also says with the surge of new digital streaming services and skinny bundles cbs is positioned to thrive. >> we are establishing price points for our programming that are much higher than what we've gotten before. in addition, showtime all access, and cbsn are growing o.t.t. news product have all been launched in-house. we didn't have to buy some other company or outsource anything to get them off the ground. we own the technology. so these broadcast offerings, these broadband offerings, rather, will drive high margin income as they continue to grow. >> moonves says the company's new streaming service, the showtime app is off to a strong start and that each million subscribers will generate $100 million more in annual revenue, most of which will go right to the bottom line. the surge in digital streaming is sure to also be in focus on 21st century fox's call which kicks off at 5:30 p.m. eastern. fox, which beat on the bottom

line but missed on the top line, benefited from its ownership of hulu. we'll be listening to hear what new ceo james murdoch and executive chairman laughlin murdoch say about their new digital strategy. melissa? >> thank you so much, julia boorstin. netflix hitting another all-time high today. disney ceo bob iger commented on the company earlier on cnbc. >> we view netflix as friend not foe. there's no reason for us to beat netflix. we actually are taking advantage of netflix's great growth. i guess maybe you could argue we've helped netflix's great growth. we're selling product to netflix which is off network, abc and other networks. we're nocht that we have product like "how to get away with murder," that netflix really covets. we're selling our movies to netflix. the output deal for our movie studio kicks in with netflix starting with our 2016 slate. and net tlix has also come forward as an aggressive buyer of original programming. >> check out netflix's

performance over the past three months in comparison to traditional media companies. so is netflix really their friend or their foe? rich greenberg of btig joins us on the "fast" line. let's start right there. is bob iger trying to put a nice spin on this? is netflix really a foe? >> look this is a classic prisoner's dilemma game. this whole industry is basically as they're struggling on tuesdaying as advertisers are looking more to mobile devices and that's why facebook is surging. is and as you look at consumers who are less interested in the multichannel bundle the big fat cable bundle all of these companies have been increasingly interested in monetizing to the one company that's paying out lots of money for good content, which is netflix. but by doing that licensing it's actually decreasing consumer interest in watching linear live tv which is hurting advertising. and it's driving people towards on-demand programming, meaning netflix. so this is really the industry literally doing it to themselves, and you're seeing the pain that's just starting

given bob's comments about espn. you obviously heard time warner talk this morning about you know, kind of not answering the question about their 2018 guidance and whether it was attainable. and you saw discovery come out and halt their buybacks. across the board you're seeing media companies scare investors. >> at the same time we heard les moonves on the cbs conference saying over the top it's off to a strong start it would be a high margin business. what are are we seeing in terms of the breakdowns of who's doing it right and who may get shot in the foot later on? >> i think if we were looking at the road runner about to run off the cliff les moonves would be positive to investors. he's never said anything that would be negative at any point in time. i don't think that is a credible argument for why you buy media stocks now. i think the reality is consumer behavior is rapidly shifting and when you look at the growth, over two hours a day of consumers watching netflix, look at the success success that twitch, which is now owned by amazon look how much that whole e-sports category has exploded. when you think about media

companies, none of them have any presence on mobile devices. nobody's watching fox. nobody's watching espn. nobody's watching discovery programming on mobile devices. these companies are just not there. they're out of mind. and that's a real problem, is you look at these companies into the next few years and i think investors are just derisking right now relative to the netflixes and facebooks. >> rich we're going to leave it there. thanks so much for phoning in. we appreciate it. >> thanks for having me. >> rich greenfield of btig. >> does disney warrant a 9% haircut off of highs? >> given what he said about espn. cable is -- i'm not going to split hairs here. when you listen to what he said he tried to paint it with a positive brush but it's not positive. that's the way the world is going. i don't think you can put that genie back in the bottle. this is not to condemn disney. i think it's a great company. maybe it got ahead of itself on valuation. i thought it was going higher last night, i was wrong. with that said disney last night, cbs today proves once again why you have to continue

to be in netflix. it's a netflix world and everybody's coming around to that. these two earnings releases i think prove it. >> you're in disney. >> i am in disney. >> how are you feeling today? >> not so good. i actually think that last night when earnings first came out i thought all right, they've got a lot of different businesses they're not all going to be hitting on all cylinders at the same time. i do think this is the beginning of a potentially much bigger shift. i would not add to disney here. >> despite the catalysts, the shanghai theme park opening, the pipeline of "star wars" and all this stuff that everybody was so jazzed up on -- >> you've got to be positive about "star wars." >> you're not getting that for free or for cheap. i'd say okay. but you're not. it's expensive. >> next up facebook. a big day of gains for the stock. the company rolling out a slew of new features today. the first the ability to live-stream video for celebrities but not regular users. celebrities can now share live video using the facebook mentions app designed to let public figures collect with fans. facebook also announcing that it will enable businesses to

privately communicate with customers through messages by way of its messenger app. guy. >> i've liked facebook for a while. i was dispointed in the way it traded post-earnings. the i thought the earnings release was good as good as the last four or five quarters. but the performance of the stock has been exactly the same. run up into earnings, subsequent sell-off, followed by the ramp higher. i think this is now the next ramp higher. i still like the name. i know it trades at 35 times forward earnings but i think it deserves that valuation. it can go higher from here i think they still have a lot of levers left to pull. i think facebook goes higher. >> one of the levers might be this messaging app. >> could be. >> for small and medium size businesses this could be a great way of connecting with customers and therefore for advertisers that could be attractive. >> so the thing that facebook has done is they bought a lot of companies that have been very innovative and i'm just as guilty as anybody else to sit here and say why would they pay that much more? they can see how it can be

monetized. if i'm xhp comparing the two versus a netflix i'd much rather be in a facebook because there are so many places they can go. with netflix one big problem, there's going to be competition coming into the space. facebook has bigger modes. >> ten minutes away from the kickoff to tesla's earnings call. we'll hear from ceo elon musk in his own words. you're watching cnbc first in business worldwide. in the meantime here's what else is coming up on "fast." >> announcer: could key apple suppliers be signaling it's time to buy beaten shares of apple? the secret sign you need to know. when "fast money" returns. this summer, challenge your preconceptions and experience a cadillac for yourself. take advantage of our summer offers. get this low mileage lease on select ats models in stock the longest for around 269 per month.

we've got an earnings alert on fitbit which is falling in the after-hours session. let's get to dom chu with the details. hey, dom. >> what we have right now is a bit of confusion. this was a stock that was up after an earnings beat a sales beat and what appeared to have been an outlook beat as well. but then there were some questions raised on their first ever earnings report about the comparability of their non-gaap or adjusted earnings per share or their gaap regular earnings per share and whether that was comparable to the average analyst's estimate. that caused, again, some confusion in that trade after hours. it went from you can see there a positive trade decidedly down to about 10% or 11% as we stand right now.

a lot of the issues around this are still kind of being resolved right now. but generally speaking some of the analysts out there still believe this was a beat. bob peck at suntrust was one of them. friend of the show as well. he just spoke on the "closing bell" with regard to his take on this report at fitbit. take a listen to what he had to say. >> looking at the numbers, they beat on units, revenues ebidta the guidance for full year are better than anticipated. if you had to nitpick a couple of different things. one is in the guidance the revenue growth rate does slow as one would expect. the margins for next quarter are also lower than what we saw in q2. a little bit of inventory build as well. you could maybe nitpick on the gross margins down a little bit. this is a shock going back to where it was five days ago and still up 140% or so since the ipo. >> that's got to be one of the keys whether this is profit taking after a 150 run from its ipo price. this is going to be a big question. comparability waiting to be sorted out. back to you, melissa. >> thank you very much dom chu. let us know when you get that

sorted. steve grasso you're long fitbit. >> i left the floor started trading above $515:002. and you have to expect this thing from a momentum trade. but i think the a.s.p.s. you have three models. one trades at 80 150, 250. that's got to lift up margins going forward. this is just profit taking. >> i'm going to take the other side of that. for a stock priced to be a growth stock when you hear bob peck say revenue growth is slowing, gross margins were a little bit down, yeah you want to be nitpicky but it's priced so you that should be nitpicky, right? >> that's not nitpicky though. first of all we had made a comment last week we thought it would trade 55 bucks. i don't want to be disingenuous. it did print 55 in the after hours when 99.9% of the folks out there couldn't take advantage. that i'm sorry about. with that said at this point in its cycle you can't have slowing revenue growth with that kind of valuation. there will be a point to buy the stock. i just don't think it's right at 46 bucks. >> are you talking about revenue growth slowing or the rate of revenue growth slowing? >> i thought it was revenue

growth slowing. >> that's what he said revenue growth is slowing. do not miss a first on cnbc interview with fitbit ceo and co-founder james park. that's tomorrow 9:30 a.m. on "squawk on the street." as we head to break take a look at tesla. it is falling in the after-hours session. down now by about 4 1/2%. that conference call about to kick off in just a few minutes. we'll bring you the headlines from ceo elon musk as we get them. plus a socially awkward move. twitter falling below 29 bucks a smar for the first time ever. a new low for today's session. a look at whether this is the beginning of an even bigger move lower when we return. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day.

welcome back to "fast money." volatile after-hours session for shares of tesla now down about 4% in the after hours. the conference call is starting right now. we've got it all covered from every angle. jeffreys' analyst is manning the phone. phil lebeau is listening in in chicago. we'll check in with both of them in just a minute. we're also watching a couple of other names after the bell. herbalife is moving higher after hours. keurig green mountain fitbit and cbs are all moving lower. we start with apple giving back some ground today but in correction territory and it's taking a number of suppliers with it. let's go to dom chu with the details. >> you can see that 11% down

side move here. and of course when people play this apple -- they don't have to just play apple stock. our friends over at cnbc pro took a look at some of the names besides apple that have that ecosystem effect, that halo effect from apple. of course we're talking about some of these big suppliers. check out some of these names. semiconductor related. contract services related. if you look at a name like skyworks solution, a stock that had been having a huge run as of late but now you can see they're down by about 13% during relatively the same time frame as when apple hit its previous recent high here. also a name like cirrus logic, one you that guys have mentioned before on air. you can see those shares down by about 8% during that similar time frame around. and avago technologies down by about 7%. all of these names that have been associated with apple by suppliers. they've been listed by apple on their website as contributing to the apple product ecosystem. apple one way to play it but other people have been playing it through the suppliers. and of course that's just part of the story. just a few of the stocks. the rest of them are all up on

cnbc.com/pro for subscribers, melissa. back over to you guys. >> but of course the caveat, dom-s not all of their business is for apple and that the semiconductor sector overall has been in the downturn at the same time. >> absolutely. there are varying degrees to which these companies actually get business from apple. some more than others. but again, it is interesting that these moves have happened in coincidence possibly with what happened with apple. like you said semis are wr hot at one point, now certainly underperforming other parts of the market. >> dom, thank you for that story. dom chu. let's also talk about mxp semiconductor. they're also one that fell in the last couple of days on the back of apple supplier concerns. up in today's session. but certainly this is a stock who's an apple supplier but has major other businesses out there. emb chips for cards, major player in china. a lot of the automobile chips out there also. >> this is one that people thought they missed. i've owned it. i bought it. i sold it for a profit. and then it ran up four times as

much the profit i clipped on this name. you always think you're late to the game. year to date up 27%. but switch gears, jbl, that comes up as a supplier as well. the last earnings cycle in june. the stock is off 20%. maybe that was a canary in the coalmine. they depend on apple for 18% of their revenues. >> are you back into nxp or looking to get back in? >> i want to get back in. i think i want to see it pull back a little more. if overall market sells off maybe i'll get my entry point. >> to me nxpi is the best because they're in the connected car. if that's going to be the next area of growth, we know apple's looking into it. i'd much rather be in xpi. the other ones to me look a little scary, especially since we know that smartphone sales in general are slowing down. >> we had bill fleckenstein on the other night and he was talking about shorting some of these names. i think nxpi was one of the names he mentioned. before you go killing me bill ace very thoughtful guy. he doesn't come on tv every day and make comments like that. these are well thought out

positions he's put on. doesn't mean you should do it today. but what i will say is everything he talked about is basically a synthetic apple short. dan nathan mentioned that as well. nxpi's not an expensive stock on valuation. i do think you see the pullback he talked about but i would go back and listen to some of the comments bill naidmade. >> twitter the stock falling below 29 bucks a share. this is a new low for the stock just when you thought it couldn't get much worse. this was an interesting article in re/code, not saying this is the reason it's down basically listing the reasons google won't buy twitter. do you think it's going to happen? >> i don't. i mean it could, but it seems less and less likely every day that goes by. and yeah so i wouldn't be in it just for a takeover. you have to be comfortable with the fundamentals here. >> anybody comfortable with the fundamentals? >> i want to call-spread it. >> for the ceo? >> for the ceo. >> his name's brian -- oh never mind. >> the reason why i bought a call spread is because you're

back to this place where i said before they have to do one thing right and the only one thing they have to do is get a new ceo that's going to have a vision for this company. so i wouldn't want to own the stock because this thing could just bleed down. but you wake up one morning and there's a new ceo there. >> how much do you think the stock pops? >> depends on the ceo. you get an executive from google to come over here because maybe google google's not buying it but executive wants to come over i think the stock pops 10 20 bucks. >> your basic bet is when it gets a new ceo more than likely it will cause the stock to pop. >> yes. >> i'm long 25% of my original position. i know my risk and i have been bleeding money and i have been bleeding out of the stock. 29 1/2 was that level you talked about when you broke into this. i think i am long what karen said, i'm long for that takeout. the ceo is just a little bit of icing before i get that takeout. i do believe that something is going on. why they're talking this stock down. >> wouldn't the ceo naming a ceo close the door on the takeout? >> i think all bets -- this is not conventional.

>> why would a guy take a job if the company's going to be sold six months down the line? >> i could say ten things that have went wrong with the stock that we wouldn't have thought went wrong with it you about they defied all laws of probability. >> give me a level twitter has to hold. >> my level was $35. clearly it didn't hold that. you've got to give david seaburg credit. he's been saying this is going to go a lot lower. it is a lot lower. now you're in territory where you need a flush day, a day where it trades 100 million shares, makes a new all-time low and reverses. you have not seen that yet. i think it's an incredible valuable property. i know what the guys and girls are saying on the desk. but in terms of trading it's not not -- that level has not made itself known at these -- at current rate. >> coming up next do you think your car is safe? well, think again. two hackers show us just how easy it is to hack a smart car. the shocking video you've got to

see after the break. plus tesla's conference call is under way. we'll be hearing from ceo elon musk later this hour. much more "fast money" straight ahead.

two weeks ago a jeep cherokee was remotely carjacked. cnbc's josh lipton is in las vegas at the annual black hat security conference two men behind the hack. josh? >> reporter: at black hat this year there aren't bigger stars

than the two researchers who remotely carjacked that suv. the point of the experiment the hackers tell me is they want to see big changes in the auto industry. >> maybe three or four years down the road we're going to see this happening a lot. for now i don't really see it happening. that's why we're doing it now. we want to get things fixed, get cars in a really secure state before there's a problem instead of waiting when there's cars going off the road every day before people start making changes. >> reporter: this was a controlled experiment with a reporter from "wired," and here's how the hack got done. they found a car connected to a cellular network, hacked their way into the car's infotainment system which is manufactured by harmon, and from there they were able to reprogram the chip that interacts with the car's internal controls hijacking its steering, brakes, and transmission. this was all done by the way, from their laptops ten miles away. the hackers say the experiment also has big implications. the dream of driverless cars. the hack proves they say, that a lot more has to be done before

that technology is safe on the road. for cnbc i'm josh lipton in las vegas. >> thank you, josh. terrifying stuff. but i spoke to that same hacker just a couple days ago and he said that actually he worked on this for like a year. it's not like he can just open up his laptop and say i'm going to hack that car and hack that car. he was at it for a long time. >> and what's the learning curve? once you do it once is the second one six months then three months then four minutes? it's scary stuff, automation and automated cars could be off the road before they get on the road. we worry about regulation but these are probably things that can't get oft ground without things like this. >> i think there are bigger fears than driver's cars. think about auto braking. think of the little video screens. if you hack into that. that is happening today and that's all technology that can also be -- >> come on. you know what you can't hack into? i'll tell you folks right now. '68 gto. can't hack into that sucker.

>> go back in time. >> or horse and buggy. >> you don't have to plug it in. >> they never get hacked. >> all these years holding on to it. we've got earnings out from mobileeye tomorrow. anybody have a trade? you mentioned connected car. >> just in general that is the next trend here. i think you're going to have these hacks, you could have said the same thing about the nfrnt back in '95, oh you're never going to use it for banking because you'll get hacked in. they'll solve the problem. i don't think that removes the big picture trend in these names. >> by the way, if people get hacked they still go good br thinks they still do online banking, they still vechlt mail. except for guy. disney shares fell more than 9% today after the media giant reported disappointing revenue numbers and slashed the profit outlook for its cable networks. but despite that drop it pears some traders are betting on better days ahead. mike kuo's in austin with the action. >> disney saw a lot of activity today. if you see the dividend options trading in apple czisny was the

single most active stock option today and two of the surprising places we saw activity wrt september 115 calls, looks like we saw buyers of those paying about a dollar and a half targeting an up prove of about 5% through september expiration and also the january 120 calls which were trading for about $2.85, so buyers of those would be expecting disney to be up about 10% by january praix or back up toward those prior highs. and this can make some sense. after earnings come out, the premiums drop and now you can risk just 1 1/2% to make that bullish bet. >> all right. who would say buy disney? >> it's been the favorite in the space. up 30% up until yesterday. but i will say where we started off this show with les moonves cbs is really exposed to the super bowl. they get thursday night football. it was only down 5%. it was down the least in that group. it's been pummeled pretty much this year. but i think if you want to buy something on weakness maybe as a flyer, cbs first. >> our thanks to mike kuo. for more "options action" full

show on fridays 5:30 p.m. eastern time. all right. coming up check out shares of tesla. they are down now about 4%. the conference call about 13 minutes in. ceo elon musk is speaking noifrts right now. we will hear from him after the break. you're watching cnbc, first in business worldwide. here at td ameritrade, they work hard. wow, that was random. random? no it's all about understanding patterns like the mail guy at 3:12 every day or jerry, getting dumped every third tuesday. this happens every third tuesday. we have pattern recognition technology on any chart, plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. for all the confidence you need. td ameritrade. you got this.

julia boorstin monitoring the fox call. julia. >> that's right, melissa, a changing of the guard at fox. laughlin murdoch, fox's new executive chairman kicking off the call talk about how he and his brother fox's ceo james murdoch understand the gravity of taking over for their father at this moment of change for the media landscape. they also talked -- he also talked in great detail about the importance of responding to the change. take a listen. we don't have the sound bite there, but what he said is they're watching more quality storytelling than ever and people are just consuming content differently and it's a key and positive trend that's being empowered by new technologies and they say the customers are demanding distinct ways to consume new content, ways the company is responding to. he also talked a little about the company's acquisition

strategy. of course you have to remember that fox did make a bid for time warner. he says they're more interested in building rather than buying but they will be opportunistic when it comes to acquisitions especially in that digital space. melissa? >> all right. thank you very much, julia boorstin. guy adami, i know you said netflix was the number one way to play this space in general. >> so let's go away from netflix then. trying to figure out what cbs and fox say. both cbs and fox if you look, late september, early october, bottomed out. cbs bottomed out around 48 bucks. that's where we're trading. fox as it turns out bottomed out around $31. that's where we're trading. if you're looking for an entry point this to me is as good as it gets. i do think there are tremendous headwinds but for a trade look at what these stocks have done since january. they're not that ridiculously expensive. you might see a relief rally in the names. both of them set up really well on the long side to me. >> let's get another check on shares of tesla, still moving lower, now down by just about 5% or so in the after hours. conference call is under way. cnbc's phil lebeau's got some of

the highlights. phil. >> melissa, just a few minutes a ago there was the first quest conference call for ceo elon musk about the company lowering its production and delivery guidance for this year. remember going into today, the previous guidance was that tesla would deliver at least 55,000 vehicles this year. however, during the earnings report and on this conference call tesla is now saying the guidance is lower, between 50,000 and 55,000 due to the challenges of bringing up production of the model x, which will be on the same assembly line as the model s. here's elon musk talking about the challenges they will be facing in the fourth quarter. >> we do think it's going to be quite a challenging production ramp on the x. and if we are faced with a choice of deliver great -- the only way to deliver great cars. we don't want to drop to a

number that's greater than our ability to deliver high-quality vehicles. >> the conference call has been under way for about 15 minutes. it will continue now for at least another 45 minutes. the bottom line is this melissa. we have talked about it and everybody in the auto industry has talked about it for some time. it is a quantum leap going from one vehicle to two vehicles on the same production line basically to do it if you're any automaker. and that's the challenge that test l. will be facing in the fourth quarter. so the fact that they have brought down their delivery guidance to 50,000 to 55,000 probably doesn't surprise a lot of people in the auto industry, although i'm sure there are some real bulls who are supportive of that 55k mark who are saying what? they can't hit it? it's a challenging task that they have in front of them. >> definitely, phil. did elon talk at all about demand being strong and that not being a reason whatsoever for this ramp-down in the guidance for full year? >> there's no indication that there is a demand problem at this point in terms of what

they're expecting for the model x and currently for the model s. in fact when you look at their production forecast for next year melissa, they're expecting to build 1,600 to 1,800 vehicles combined per week. that works out to about 83,000 to 93,000 vehicles. so they are expecting to increase production over the next year. they're not expecting a falloff in demand although they have not talked with greater erer granularity about it. at this point it does not appear to be a demand issue, it's more of a production and can they ramp up and make the leap they need to make when it comes to building two vehicles on the same line? >> phil lebeau get back on the call. thank you so much for nap. >> you bet. >> for more let's bring in jeffries analyst dan dolev. what do you make of the call so far? >> thank you very much. the three things i picked up from the call, regarding at first the production, yes, there is no indication of a demand issue. they stated they can do 1600 to 1800, produce 1600 to 1800 cars per week.

going forward, this is a very positive number. this is a number that's up from 1,000 cars a week only a short while ago. the other big issue is gross margin margin. they said gross margin can creep back up to 25 as you know because of the dollar in the mix to the 70d the gross margin has been down, or down more than people have actually expected and that's supposed to creep back up as they improve their cost structure as well. and remember when the model 3 is going to come out the gross margin is expected to come down anyway. so this is not at all surprising. and then lastly the note that there's no need to raise equity. that's actually a very positive thing they're reiterating that despite the cash burn there's no need to raise equity in the coming quarters. >> and is that a concern? i noticed on the balance sheet that they burned what $400,000 worth of cash in the quarter on quarter. at that rate where does it get them? >> so if they actually -- the whole thing is based upon them actually ramping production and deliveries of model x. so once they get to -- and i have to work out the numbers.

but once they get the model x up and running their cash flow should start improving. so i don't see any reason to be concerned. but again, this is definitely a genuine concern and it was nice to hear them say that there's no need to raise equity, although they did say this t. may make sense at some point from another perspective to raise equity but there's no need right now. >> okay. dan, thanks for that. >> thank you. >> what do you think of the trade at this point having heard these comments on the conference call? >> i still think it's the same as i said at the top of the show, it doesn't concern me because they don't have a demand problem, they have a production problem, which is going to happen. >> a continuous production problem. >> you've got to look at tesla. you can't look at tesla as a regular car company. this is a startup type of situation. it's more -- i've always said it's more of a venture capital type of investment than it is a traditional car company. for me i'm not concerned and i think over the next couple of quarters the fact they're not going to have to raise equity is -- via equity is a good

thing. >> as phil said you're make twog different car lines right now. that's problematic. they used to make the model s. they've got make the model x, make another model and those margins are coming in overbought on a weekly -- the last two times they started out was down roughly 30%. that brings you down to roughly the 100 weekly moving average. let's call it 210. >> it sounds back end loaded in terms of guidance for deliveries to the fourth quarter when we don't even know what these challenges will be and how bad they will be. >> both steve and b.k. make great points. reasons not to own it. let's go the technical route. i think the reason not to own it technically is because we failed at that 290 level. they didn't say anything in this quarter that is that crazy bullish that wants you to go out and race to buy the stock. we've seen sell-offs before. i think it trades 225. i don't know if it gets to 210 but i do think it trades to 225. >> tesla down about 35%. coming up on "mad money" cramer's got a pair of hot exclusives. r.r. donnelley announce a split but will it pay off? cramer's getting details from

the ceo himself. av net up today. that is next top of the hour on "mad money." meantime your first move tomorrow when we come right back and last check on tesla too. echnology, but it is not the device that is mobile, it is you. real madrid have about 450 million fans. we're trying to give them all the feeling of being at the stadium. the microsoft cloud gives us the scalability to communicate exactly the content that people want to see. it will help people connect to their passion of living real madrid.

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welcome back to "fast money." shares of tesla now down by about 5%. let's check back in with cnbc's phil lebeau one last time. phil. >> melissa just a few minutes ago the cfo of tesla, deepak was asked about whether or not the company still expects to be free cash flow positive in the fourth quarter, which is the previous guidance and he said it may happen by the end of the quarter but the full quarter we may not be flee cash flow positive. certainly they expect to be there in the first quarter. so that's a slight pushout in that area. and just a minute ago j.b. straubl, who is the chief technical officer, was asked about demand for the power wall and he said they're surprised that they're seeing as much interest and demand on the commercial, the residential side as they are seeing. they thought it would be almost exclusively with utilities. and on the industrial side. but they are seeing greater demand than expected on the commercial side. still another half hour to go on this call. we're going to hop back on to it. >> phil lebeau thanks so much

for your reporting tonight. it seems like they're slowly pushing out little bits and pieces. does this change -- you have turned sort of more cautious on this stock it seems throughout the show. >> we've all had our time where we traded this stock perfectly. we've never traded it perfectly all of the time. and at this point i think it is running a little bit out of steam and you have to look at the charts. and it is running into a wall here. resistance is pretty tight. i think you're going to get the chance to buy. >> our thanks to dan dovlev for his analysis on the red phone tonight. steve grasso. >> this one has been an underperformer. micron down 45% year to date. every time i look at this stock i would say get a chance to buy below 30 take it 25 take it. well, it's 18 and change right now. i nibble just a little bit. >> beakers. >> you want to buy your umbrellas before it rains. now's a good time to buy the vix and protect yourself. >> karen. >> yesterday we talked about sunedison final trade. i would buy glbl just for a -- >> really? >> international yield.

just for a trade. it's been awful. >> guy. >> defense stocks have been parabolic. i don't think they're expensive. noc get you done. >> see you tomorrow for 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, and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to make you a little money. my job is not just to entertain you, but to educate you and put in perspective so call me at 1-800-743-cnbc or tweet me me @jimcramer. behaviors change. people do things differently from the past. younger individual millennials have different habits from us at least from me.