dennis gartman on commodities, we're put ug his feet to the fire. >> it feels like the whole market hangs on this question, melissa. so let's have dennis settle it out. >> thank you, kelly. "fast money" starts right now. live from the nasdaq market site overlooking times square, i'm melissa lee. your traders on the desk. tonight on "fast," pfizer and allergan linking up. but one trader says it is the tech space that is right for the next round of in version deal making and we have the names and the ways to profit. and as chipolte deals with the fallout from the e-coli scare could another stock benefit. two stocks stick out and both of them were up sharply today. and later, low gas and record sales so why can't shares of form and gm rally. it is not china, closer to home and it could have big implications for the rally. but first we start off with amazon. another day, another all-time high.

and this is other retail rivals rush to speed up promotions. so will amazon ruin christmas for other retailers and is this the must-have stock. is it the grinch in the retail sector, tim? >> grinch. it defends if you mean putting other guys out of business to their detriment. some could adopt the model. cyber monday, whether it is happening sooner or not, will be much better for those names. i think on the consumer apparel side than for the retailers. so to the extent that amazon at this point is trading out of multiple, we haven't seen it trade up because they are getting the growth and the investments in logistics have paid off. yes, i think you need to own this stock. do you need to buy it today? after this spike, no. and i think a lot of news is prepping for black friday. >> black friday, black monday, it started last friday. eight days of deals. >> we're in a permanent discounting environment for retailers. look at a stock like macy's. it was trading at 70s, all-time high in july and traded down to

38. and it was an investment year and they are moving to the omni channel and they have to compete better with the online model that amazon has and it still can't get out of its way. i think macy's are stuck in the mud for a while as they invest over the next year or so. >> there is clearly a disruption in retail. and zaub is at -- amazon is at the epicenter of it. and they don't make any money on it. they are trading up because the web services. i guess i'm on tim's side. if i'm in amazon, i'm taking off a third, a third, a third. this stock is up 100% plus this year. it has been a rocket ship. trees don't grow to the sky. so i would take off a third and go into walmart. because i think they have an opportunity to take on some of amazon's market share. when i look at walmart store, i see a distribution center. >> what this different this time around, guy. we have been prognosticating the death of the brick and martor, where do you think retailers are

having a hard time and amazon is doing well. >> people point to the weather as the biggest reason why. maybe the wrong product. i think that has a lot to do with it. it is heading that way any way. a lot of the companies are slow adaptors, but in terms of how do you trade them, i think macy's put in a capitulation bottom back on november 11th when it traded down the levels dan just talked about. it traded 30 million shares it. took it a long time to bounce. it still really hasn't bounced. but you have something to trade in the form of the low that day. nordstroms two days later traded down to 50. the bounce is much more interesting, it is much more pronounced. but i think the same thing, you trade nordstroms off the november 13th low but the best way to play retail, both visa and mastercard. >> it is interesting that you mention mostly the apparel retailers but amazon is putting the screws to the likes of a best buy and game stop, whose

earnings were terrible today. >> i just think you don't need to go into any one of those stores to buy anything. it is not like a macy's. we talk about alibaba and the comparison to amazon and i know, tim, this is a name you are involved in, j.d..com rallied above the 200 day moving average for the first time since late august. that is one i'm taking a close look at it because i think it is the ugly red-headed step child in the chinese e-commerce. >> if you believe in amazon, you have to believe in alibaba, if you believe you have any transparency and this is a company that is not full of fraudulent retail activity. and if anything, that is what they are trying to fight against. when you talk about the companies that sell commoditized goods, game stop, electronics, anybody could do it. we talk about the major manufacturers and mostly with nike and we could do it same in the market place. dtc, direct to consumer is the market here. and it is a generational thing. tvs are not selling as well

because millennials are doing stuff on small screens. an this is very clear. and this is something not expected out of best buy even though people are excited about 4 k tvs, but a fresh cycle, not so much. >> well amazon's rivals are trying to get ahead of the cyber monday battle. amazon has talked about their promotional plans. but target will offer 15% off all items on the website. but those plans won't do anything to take market share away from amazon, or so says our next guest. michael follows amazon for web bush. he has a buy rating on the stock. is that because amazon will cut prices until they can compete? >> actually, i think that amazon has done something different this year. they've been price takers instead of price-leaders in all nonsale periods. and by that, i mean it is not a 365 day sale. i monitor a basket of televisions and i've seen one television in particular go from $800 to $1,500 on prime day.

back down to $1,200 now and it is going to be below $800 next week. so they are moving price around. the other retailers are frozen and following. and i think amazon is saving up the dry powder for this week. i think you guys said, made a great observation when you were talking about the environment. we have bar bells of consumption. we have people who are older and shop at retail, younger who will shop online. we have people above median income who will shop online and below tend to go retail. tech and non-tech savvy. i think what you see with the bar bells, is as smartphone and tablets penetrate the population, people have a computer in their hand. so that couch potato when he is done eating turkey and watching football, they could pick up the phone and start shopping right then. why wait for cyber monday. you see the sales at times when people have the tablets and phones ow. that is all weekend. and retailers are trying to

respond but they won't win. >> so are you saying that all throughout the year it fluctuates prizes so during this time it could afford to sacrifice the margin. >> absolutely. and i think amazon's goal here is to try to bring people and the prime members. once you sign up, they know they have you have the entire year. and then they could jack prices up. if you have to get the tv for super bowl, in february the price is back up and they'll make more margin. >> we have to let you go. thank you for your time. we appreciate it. >> thank you. >> of web bush. so that sounds like they are managing the margins so we shouldn't be afraid of amazon giving up on margin. >> also sounds like you should do the trade of buying a $800 on thursday and sell it for $1,500 in february. that is the trade. but it does sound like -- we do know that amazon is managing business differently to make profit to exactly what michael is talking about. >> we have breaking news on carl icahn. seema mody has the details. >> reporting a stake in xerox.

a gain of 7.13%. carl icahn said shares of xerox are undervalued it. has been an underperformer this year. down 15% or so already in 2015. but again carl icahn reporting a stake in xerox of 7.13%. his stake in this company makes him the second largest holder. back to you. >> thank you so much, seema mody. this is very interesting position by carl icahn. this is a stock that hasn't done well this year. down 22%. maybe that is where the opportunity is. at the same time his portfolio now is a basket of stocks not doing well even after he has taken stakes. look at freeport macmaran, and transocean is another, chesapeake is another. >> let's not beat around the bush. >> demand is not necessarily there. >> i've said carl can do anything he wants to fix the company, but unless he could buy the back end products, the stock

won't go higher. freeport macmaran is straddling $13. and it changed after the announcement he was in it and back down to 8:00 and i think it will have a seven handle. clearly headed there. xerox is up 10% on the back of this. that to me is ultimately the [ inaudible ]. it will fade this rally. >> would say -- i would say, listen, carl is a goo that a month ago put out this danger ahead sign. when you talk about fixing companies, he searches for value and doesn't see a lot tv. he has some in energy space. but xerox to me, you used to work at xerox printer back in the day. it is something that now all of us have to go read about because we haven't looked at it. and maybe that is the jean jus of what he is trying to do here. >> and there is no fighting trends. and guy mentioned the lack of

demand in copper. it is down to $2. it could go down to 1.40. and we'll talk about that with dennis. and even rig is a broken company for a long time. because a company looks cheap, you might be coat tailing an activist, you have to understand what the underlying business is going. this is what dan is saying in regard to xerox, i don't think you need to pile on this at all. >> carl icahn can hedge his portfolio. and he puts out a warning, he said himself his portfolio is almost completely hedged. so don't chase into this, particularly on xerox, up x% after the close of this announcement. if anything, you wait until it gets back to -- let's call it around $9 or $10. that is when you want to get in. >> i was in charge of the mimmo graph machine. >> is that what happened. >> trade school. >> remember that? >> no, i have no idea what you are talking about. earlier in the month, when xerox

did report earnings, they said it would launch a comprehensive review of options. so they are looking for ways to strategically enhance shareholder value and it is interesting that carl steps in and now says i have a 7% stake in the company. we'll see what he has up his sleeve. >> this is a small company. he owns 53 million shares of apple. that is his bet. and everything else is tag ago long on the side. so if he could hold this for a couple of years and get 100% return, that is what he does. >> coming up, alcoa popping on news, after elliott management has taken a stake. find out why it is being called dramatically undervalued and whether you should get in. and as chipolte is under fire, could other names have a bigger stake. and we are naming names. and record sales, and we'll explain when "fast money" returns. the great beauty of owa property

is that you can create wealth through capital appreciation, and this has been denied to many south africans for generations. this is an opportunity to right that wrong. the idea was to bring capital into the affordable housing space in south africa, with a fund that offers families of modest income safe and good accommodation. citi got involved very early on and showed an enormous commitment. and that gave other investors confidence. citi's really unique, because they bring deep understanding of what's happening in africa. i really believe we only live once, and so you need to take an idea that you have and go for it. you have the opportunity to say, "i've been part of the creation of over 27,000 units of housing," and to replicate this across the entire african continent.

can a a subconscious. mind? a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

>> we're getting 11.3 shares for our shareholders. when we negotiated that price, that would have equaled over

$400. so you can't look at spot price. but you get a proformal ownership of the fourth largest company of the market cap in the world. you get access to 100 new markets. you get access to a deeper pipeline. you get access to $25 billion in free cash flow and access into a dividend for our shareholders. so when you put that altogether, the value creation for shareholders is a mix. >> welcome back to "fast money." that was allergan ceo present saunders speaking to meg tirrell about the terms the deal with pfizer. it is the largest inversion transaction on record. after the merger, the company will do business as pfizer plc and trade under the ticker pfe and dan is looking at other potential inversions in the tech space. >> they talk about synergies and cost cutting but at the end of the day this is about taxes, i think. in technology, we've seen a ton of deals throughout the whole year. a lot in semiconductor, some of

the biggest so far. so a couple of names that seem obvious here, one is arm holders. in the u.k., $23 billion market cap. the customers are qualcomm, apple, and anything based in u.s. we know what has happened with qualco qualcomm. and they have a $75 billion market cap. that could be one that maybe makes sense. and another one much smaller which is garmin in switzerland. no debt, $2.5 billion in cash. a difficult business but maybe that is something where somebody wants to get into the wearables market quickly. and i'll throw out sap. for years, it is german and it has been rumored -- this is a huge deal just announced right here. it is a $100 billion market cap and maybe oracle would help or maybe getting a hair cut on the tax deal would be something to look at. >> anybody want to do deal or no deal. >> i think garmin is

interesting. and i think it is because of the wearable space. and david einhorn disclosed he took a big stake in it. i think there is something going on with this name it. won't take much for somebody to gobble them up and get into the sportswearable space. >> i'll tell you what. i get the idea. and i could say with qualcomm, or texan, these guys have to do something. and i think there is a lot of cash to deemploy and a -- deploy and a way to back door these things. i would say deal. i'll play the game. >> deal. armed with a target. >> i'll play the game. allergan is trading like there is no deal. because i'm in your head and i don't realize i'm there but i anticipated your question and i answered it. >> how do i get you out? >> i'm out now. >> get out. >> with that said, allergan on its own should be higher than this. regardless of the pfizer deal, this is a stock that i think is cheap it. just came off a great quarter with an unbelievable business model that is being penalized for the conversations and headlines we're seeing.

i think this stock, again, by itself should be a $330 stock. >> it should trade up to the deal price. >> forget the deal price. this should be 325 on its own. the deal is the gravy on top. >> up next,alco popping after announcement of a 6.4 stake in the producer believing the company is dramatically undervalued. we were just talking about freeport macmaran. >> it does. and this is a case of it is so bad, it has to be good. and in this case, they can cut back on some of the production. and if you look at actually where they bought this, where elliott bought this, $8 has been formidable support. a couple of things go on here. >> don't think this is a bet that the aluminum market will take off. i think it is a bet they are going to shut in production, perhaps some of the chinese production comes offline and then at that point, i think it should do well in this particular case. that is what i think is going on. >> the timing is interesting. because they are going to break

up the company already. >> and the best part of the business is the metals business which they were smart to evolve into. and it is hard for me to say that the value is not already known out there in terms of that. in fact, at that multiple, there has been a catch to alcoa or derivative, i don't get this one. i don't get it. >> gee? >> beaks mentions $8. we treaded down to in the end of 2013 and here we are back at $8. and here we are again. a couple of days ago, in terms of the percentage, if you have that type of risk appetite, alcoa is interesting from the long side. >> up next, the commodities hitting a 13-year low as gold continues to tumble. but this man, dennis gartman, says one will hit the bottom and he'll tell you which one is next. i'm melissa lee, you're watching cnbc, first in business worldwide. here is what is coming up. >> as chipolte deals with

another round of e-coli scares, could some casual rivals benefit at its expense? plus auto sales are near record high. so why are auto stocks stuck in neutral? >> it is a good question. >> and the answer could have implications for stocks. when "fast money" returns.

welcome back to "fast money." i'm kate kelly with breaking news on valeant pharmaceuticals and pershing scare holdings, the large hedge fund company run by bill ackman which was increased at a trouble time for the pharmaceutical company. pershing square is doubling down on ownership, going from beneficial ownership of 5.7% of the stock to now the equivalent of 9.9%. it did this through a number of recent transactions in the options market. so capitalizing on the common stock ownership which was over 20 million shares by purchasing the equivalent of about 14,000 and change additional shares through the options market in valeant, melissa. so bill ackman continues to show faith in valeant despite what it has been through in the last month or so. >> kate kelly, we're going to

let you go. thank you so much. interesting. we are seeing shares move higher in the after-hours session. dan, i want to go to you. did you see anything in the options market that would give you a clue as to what was going on. >> not exactly. open interest has been moving up and the stock is between 70 and 90 over the last five trading days. that could have to do with the fact that dealers are hedging against what they are selling. and one point with bill ackman, representing ownership through options, he's had a couple of in stances where it worked against him. herbali herbalife, people were shooting against it for months and months. and then target back in '07 and '08 and all of the call premium went poof, it went away. and so this has the potential of trading. >> and it was terrible. a 10% range on the session and closing near the lows so a strange trade. >> closed at 97 and closed at 87. didn't he have to add to his

stake. if he did nothing than opportunitiament to -- tantamount to him saying i lost. he was forced to do something. >> you don't think the 5% beneficial stake, doesn't that say he lost. >> what if something has changed in the story in the last month and a half. >> he has. >> and he said it has not changed. the story is still in tact. >> i think as it related to any -- any allegations of fraud, again being the enron of pharma. but in terms of the specialty pharma business, that has changed dram atically in the lat few weeks. before this started to bubble to the surface. i don't think he had to double down and has -- where we go, hard to know. let's move on. the thompson reuters market continuing to go lower so we want to know what is next for the likes of gold, and are they headed higher or lower. let's bring in dennis gartman

and let's play a little game called higher or lower. we'll start off with oil. dennis. higher or lower. >> it is still going trend. the trend is still lower. we had a rally for a short period of time depending on the saudis but it is still bearish and going lower. >> we have not see the lows for the year for oil. >> i'm afraid we have not. >> gold, higher or lower. >> still going down. the trend is still -- i think this is the third anniversary today of the high in gold. in just over $1,800. the trend is still downward. in dollar terms, still going lower. >> and stocks. higher or lower? >> stocks, it is still a bull market, isn't it. and every time you try to pick the top, it blows up in your space. so they will continue to move from the lower left to the upper right. as long as the fed continues to be expansionary and even if it tightens in december, it is still expansion and still pushing stock prices upward. >> at one point or is there a point at which a strong u.s.

dollar will make you think that stocks will go lower? >> you know, mel, if you look over history, there have been great bull markets where the strong u.s. dollar and a weak dollar. at correlation over a protracted period of time is basically zero. there are times when they move in tandem or contravention, so i'm not one to say that the strong dollar will do anything to the stock market at this point. >> dennis, we'll leave it there. thank you. >> thank you for having me on, as always. >> dennis gartman of the gartman letter. do you agree with dennis. if terms of the strong dollar in stock, at this time. >> for this time, no. i don't. actually, i think over a period of time, it will take some time for the strong dollar to hit corporate earnings. we know about it. it is coming. but the stock market hasn't reacted to it yet. but i do think this time a strong dollar is bad for stocks. >> and what about the dixie, at

a 7-month high. >> it kissed 100 overnight and came back a little bit. but if you consider where the dollar is going, i think we have to push through this. ultimately though, i don't think that central bank policy has to be as divergent as people think it is. and i made this point on the "closing bell." i don't think the ecb needs to be as dovish as people expect it to. having said that, i think what is interesting, you would see asset zollars that would be destroyed, they have been holding in there, i think anticipating the normalization of fed policy. while i think i -- i would say gold is going lower. oil will bottom around 42, i think is the low. i've been saying that for a long time. and i've been dancing around that. nothing has changed for me. stocks, european stocks, will go higher. >> dan, let's discuss this. >> dennis used the term bull market for stocks. and if you think about the dixie, it is banging up against the prior highs. up almost 11% on the year.

on stocks, he said you can't pick a top. stocks have sold off every time the s&p is above 2100. the bull market feels like it is over and i can't mang that u.s. -- imagine that u.s. stocks go higher. >> and you have great graphics to back him up. do you agree or disagree? >> i think stocks are higher. i think that every time the vix has gotten down to 13.5, that is the term for the equity markets. so my answer would be i think stocks go higher. the higher they get, the lower the vix goes. at 13.5, that is where you sell the s&p. >> something is happening in the auto market that is reminiscent of 2007 and not in a good way. and we'll tell you what that is and why it could be trouble ahead for the market. and shares in xerox surges after carl icahn stakes a claim in the company. a top analyst weighs in this hour. stay tuned.

we want to pass along from the state department a worldwide travel alert.

the state department is saying u.s. citizens should be alert to the possible risk of travel due to increased terror threats. current information suggests that isil and other terrorist groups plan to continue terrorist attacks in multiple regions. the travel alert is between now and will expire at the end of february. february 24th, on 2016. essentially, warning beyond the travel, the u.s. citizens should exercise vigilance in public places which wh it comes to using transportation, be aware of immediate surroundings and awoid large -- avoid large crowds on crowded places. just from the state, worldwide travel alert in affect from now until the end of february. back to you. >> thanks for that. until the end of february. that is quite an extended period of time. and it goes across the holiday period, thanksgiving and christmas. should we be concerned when it comes to the airline sector? >> no.

i think you have to ask yourself, certainly this was out there before the events that happened in paris. so is there a bigger threat now? maybe it is just more front of mind. i don't -- i would put it this way, i wouldn't sell the airlines on this threat. >> i think at certain times, we've seen in effect where people were flying less but it is a temporary effect. and there may be very credible new things that came out today that forced them to do this. but i'm guessing, this sounds like a blanket ban that ultimately triggered both money to be thrown at the problem and some people to get more involved in your business at the airport and empowering the tsa that much more and that is what this is about and i don't think that will affect the airlines or move the trade into travel companies or elsewhere. let's move on here. the national average for gasoline, 25% below the average one year ago. auto sales are setting new records and yet auto stocks are stuck in the mud.

so what gives. off the charts with carter worth. he is breaking it down for us at the smart board. what are you looking at. >> it is a great bull market but autos a bad investment. but the back drop, just as you say, melissa, we're back to over 18 million units. it is basically the level in '07 before the plunge. but let me show you the low. we've been improving for -- since 2010. but look at what has happened since 2010. subprime autos, lower quality, borrowers, in 2010 versus now. it looks like nothing, but it is tens and tens of billion dollars. so in the period where we've come off this low, the quality of the borrowing is deteriorated or worse, if you will. but also, the duration of the lending, meaning right now new cars average loan terms are 5.7 years and used cars are 5.2.

both of these numbers are at or near records. so the duration of paper for something that doesn't have a lot of duration, at some point, a used car is not worth leaning against. and if you go further into the six and seven year mark, which is getting a long way out when you are lending, against used car, 30% for new and 16. and this is at or near record territory. so quality, duration, all somewhat negative. but the bigger picture is autos just have not been a good bet. here is a comparative chart over the last few years. the sly measuring the sector in the srp. and the srt which has dragged. and the autos, this is a composite, dragging even more. and so here you have the issue. record sales or performance and yet the investments, the auto manufacturing stocks not good. so here we have ford. we know the stock market has been doing this for the last few

years and ford has been doing this. as long as we stay in this channel, i would just say make the bet that it's down to the right. >> all right, carter. thank you. tim, you're on the other side. >> i'm long ford and good morning -- gm. there is a dividend argument for the stocks. both companies have proven they have learned a lot about the past and protecting gross margins and not giving the house away. and carter brings up how healthy is the underlying market. i care less about the impact for them because i don't think gmac is where they used to be. the credit side is different. and demand is priced into these shares. so it is very difficult to argue with the stock market trend on these shares but owning these stocks at these valuations with their growth and how well-run they seem to be at this point, to me, i'm confident. >> but how much better could the space get. the one place to have spin is the auto parts. so you look at manny, mow, jack,

peter and paul and mary. >> all of them. >> all of the car parts. >> but like at the auto -- look at the chars in those stocks and tell me where the right trade has been. and on "options action" this past friday, dan outlined an interesting negative bear trade in the tesla. very fascinating. >> in tesla. >> he always catches it. you have a ford ceo last week that held a press release and said we are not going straight to autonomous cars. uber is not killing our business. this stuff takes time. i would say to tim, about the demand picture, you are at 18 million units a year and if demand slows because of credit issues it is not priced into the shares annual see 12 -- and you will see $12 in ford. >> of course they are priced into it. >> they are priced into it. but we are back at the 2007 peak. that is the point. >> but the lack of demand and the concern about margin erosion because they are giving away too many cars is why the stocks are -- the cars are trading

where they are, that is in the price. and chipolte gaining back prices after wall street bulls came in defense of the stock. but there could be good news for some of its rivals. steven anderson joins us with the call today. it is great to have you with us. >> thank you for having me on. >> you upgraded panera to a buy with a 210 price target. why do you think it will benefit from the chipolte woes. >> if you look at the overlap of chipolte versus panera, both have nationwide footprints. both have almost the identical number of restaurants, about 1900 nationwide. and given that chipolte and panera are close competitors in the fast casual space, we think panera, along with q double, the mexican brand owned by jack in the box, i think those two stand out to be the beneficiaries of the chipolte stumbles. >> are people that simple in terms of, oh, well if i didn't

get my burrito i'm going to have soup in a bread bowl. if i'm going to chipolte, i may not want to go to panera because they don't have anything similar to what chipolte is offering. >> that is a valid argument. but the way we would address that is that if you go to q dova, it is a very similar value in terms of the prices that available. and if you look at same restaurant sales for the first time in a decade, in the second quarter, q dova beat chipolte and they did it again in the third quarter. so it looks like the veneer in the near term is off of chipolte. and we still don't know the cause of the e-coli outbreak. and at this point there is still a lot of uncertainty on that. with regard to panera, it has been increasing its sales with the 2.0 conversions. we think that is a more significant contributor to

growth. especially in the second half of 2016. >> in your panera upgrade predicated on chipolte's e-coli outbreak. if e-coli had been -- hit chipolte again, would you have upgraded panera today? >> as we see it, we think the -- now that the e-coli outbreak has become nationwide, we do think that is a near-term catalyst. we do caution with panera that margins could be under pressure for the next couple of quarters but as i mentioned, with the 2.0 conversions, we do think that some of the margin expansion will return in the second half of next year. >> steven, thank you for your time. steven anderson of maxim group. who agrees with this call. panera to benefit. >> i agree with the jack in the box portion. 2014 was a crazy year for jack. topped out the beginning of this year and given at least half of it back. but at 19 times forward earnings, i think it is reasonably priced. i do think this benefits jack in the box.

i think last quarter was finally a catch-up quarter and the comps finally have stopped going down. >> so you disagree with the panera side. >> i like the soup in a bread bowl. it is dope. >> a news alert on j.m. smucker. to seema mody. >> a secondary offering of 3.8 million shares representing 3 million shares outstanding it. will not receive any proceeds from the proposed offering. shares down after hours by 1.3%. back to you. >> seema, thanks so much. so secondary here, for j.m. smucker. consumer staples, what kind of trade in this market environment. >> if you look at the sector, some part of the chain has performed welch and at times when people thought the names should be defensive, these are the names that i've heard. when i hear the package goods, this continues to be well-bid and where you have takeover activity but you are also see companying with margins that are

improving because commodities costs are lower and they become much better organized in the business. i'm talking about kelloggs. we saw this with tyson this morning. and this is a company that does better in the environment. i think you stay long. smuckers, we talked about in the old school health and they have a much better path. this doesn't bother me, the secondary. >> would look -- i would look toward conagra foods. the commodities prizes going -- prices going lower. if you call a consumer staples or safer, look at cvs. >> that bounced nicely. >> and nice pronunciation. >> conagra. >> potato, potato. >> it sounded great. >> but they already announced the split of their businesses. any way. moving on. the most heated man in biotech is making money off a penny stock. what it is and why you should steer clear. and shares of xerox surging

after carl icahn takes a 7.3% stake in the company. we'll have much more on this stake after the break. stay tuned. a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive?

palo alto networks moving

higher after hours. to seema mody with the details. >> the cyber security company first quarter results beating expectations on all fronts. the company added new customers and sold existing ones new fire walls and subscriptions. they also said billings are up 61%, causing the company to issue strong current quarter guidance above expectations. and keep in mind, this has been a winner so far this year. up about 40%. melissa. >> thank you, seema mody. one of the few winners in the cyber security space. gee. >> the quarter was great. the me jerk was lower because the guidance for next quarter wasn't as good as it should have been. but when you look at the billings growth, 61% year-over-year, you could almost justify the ridiculous valuation that palo alto networks demands. i still think the stock goes higher and one of the most important sector out there so stay with paw despite the move in the upside. and carl icahn taking a 7.1%

stake in xerox and the stock is soaring in the after-hours session. another active targeting a company with a female leader. and this was a column about this, pointing out there are so few female ceos in the s&p 500, representing 3.5% but here on the desk we could name a handful of companies targets with a female at the helm. pepsi, yahoo, meg whitman with hewlett and we are missing one -- >> and that is dupont. >> dupont. exactly. and then kraft heinz. >> so this is a case where, first of all, whether this is an empirical analysis that is clear or not, the companies we just talked about are companies, with the exception of pepsi, are companies that i think are flawed and businesses that have been rutterless for a long time. so at tack on the boardroom is one that is probably justified. i think in pepsi's case, this is a company where there is a lot of pressure to bring value and maybe spinoff certain parts of

the business and that is a bad idea either. so to classify them across the board, i'm not going to touch that. i would say that i think a handful of the companies are companies a lot of people are disappointed with. >> well, listen, in his column, from february, he said only 23 women lead companies in the s&p 500. that is a group of 500 stocks in about a quarter of those have been -- targeted by activists. there is something there, right. >> well, but maybe a woman ceo is the only one that could fix the company. maybe they have a skillset. that is where i go with it. >> very nice, brian. >> and it tl was a tweet that they outperformed the s&p 500 with male ceos over the last year by five percentage points. that was after of february. with you don't know the updated number. but that was as of the time of the printing of that company. >> and those numbers would be significantly better. they could use an activist as well. getting back to xerox. the reason carl is getting involved is because the shares

are undervalued. i agree. but they are undervalued for a reason. look at last few quarters. they haven't been that disappointing but not great that either. so i agree the shares are undervalued. but it will take herculean efforts to turn this around. you see a huge spike in the after market. >> and the ceo of xerox, she's been at the helm since 2009 and already they have acknowledged they are looking at other operational strategic options to improve company performance. so he is stepping in a situation where the company is already looking for a certain amount of direction, which would make -- feasibly, this battle a lot easier. >> you would think. i guess the question is, carl will have that affect of pushing the stock up just because he is into it. maybe they could get in there and do some cost-cutting, whatever his suggestion may be. for me as an investor, what is the catalyst for xerox going forward. that, i just don't see. i know guy makes copies, but nobody else does. so i don't understand.

maybe -- they have a plan within the company that they are not broadcasting well enough. still ahead, one biotech went from 43 cents to nearly $50 a share in less than a week. but our traders say do not touch it we 50 foot pole. the details next. and shares of electronics arts are up 45%. some are betting party isn't close to being over. we'll tell you why after the break. you're watching "fast money" on cnbc, first in business worldwide. so consider an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company. like all standardized medicare supplement insurance plans, they could save you in out-of-pocket medical costs. call today to request a free decision guide. with these types of plans, you'll be able to visit any doctor or hospital that accepts medicare patients... plus, there are no networks, and virtually no referrals needed.

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welcome back to "fast money." one stock is grabbing the attention of retail and institutional investors alike. look at shares of micro cap. the shares of the biotech company skyrocketing more than 1800% in the past three days. you probably noticed this morning at the bottom of your ticker. and sheer is the -- here is the most hated man in pharma. martin shrelly, where he took a stake and then appointed the ceo all in the span of three days. it is imperati, this is not a growth story or a buying opportunity. this is a story that screams buyer beware which is why we support discussing it tonight. and people look at the move on the ticker and think maybe it is

the time to get in. >> this is not an opportunity. if you are a day trader, trading 18 million shares. we don't like his strategy. unless you are standing at your screens and can trade it and be fast, that is the only way to do it. >> there is danger in that. >> right. precisely, and he owns it below $1. so it is a fantasy deal for him trading 17 million shares. who knows if he is in it any more. >> who is the buyer of the stock at this point. >> that is a key point. >> and that -- i'm not sure. and it is a self-fulfilling move higher. shorting stocks with $2 million market caps. so we are at a place where you have to be careful and think about the risk-reward on that. even if it is a zero in penny stock land, dangerous. and the other thing we're talking about is market caps that are that small are stock wez don't talk about on this show. >> shares of electronic arts up

40% year-to-date. one is betting it trades hot. we are at the smart board with more. >> there was a bullish trade when it was down 5.5%. a trader sold 15,000 puts and $900,000 in premiums. the stock is above here and they take in the 900,000. it is a bullish bet between now and the december skpar is. >> thanks, dan, for that. coming up next, the final trade. stay tuned. 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.

time for the final trade. let's go around the horn. tim. >> home improvement means contractors and ford should be trading better. f-150 is the highest margin out there. i'm staying in the need. >> gee likes allergan. i like pfizer here. >> beakers. >> in an environment of low rates around the world, i think you buy some tlt here, especially with it going lower. >> gee. >> what happened to this show. carl icahn news and the red bowl that you like. >> i don't like the bread bowl. >> but b.k., at the top of the show made a cogent point about alcoa, the levels that we've seen. and typically i'm reticent to do

this. i think alcoa off this move will continue to accelerate higher. back to you. >> i'm melissa lee. thank you for watching. see you back here tomorrow at 5:00 for more "fast money." don't go my mission is simple -- to make you money. i'm here to level the playing field for all investors. there's always one somewhere and i promise to help you find it. "mad money" starts now. >> hey, i'm cramer. welcome to "mad money." welcome to cramerica. my job is not just to entertain but to teach and coach you. call me at 1-800-743-cnbc or tweet me @jimcramer. a day lik