has to be what ad hoc, you have to make your best efforts continually as an ongoing twehig tweak your algorithms. >> gopro down 12%, shake shack coming back a bit. >> short sellers are going paid. >> that's a good point too michael, thank you very much that does it for "closing bell." "fast money" starts right now. "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i'm melissa lee. tonight on "fast," nothing can stop this rally. the market surging to record highs despite a delayed tax reform bill and uncertainty around the future of the fed president trump said he will pick jerome powell steve liesman is work the phones now and will join us with the latest facebook jumping to all time highs while tesla sinks after its earnings report. we're following every moment of

these earnings calls julia boorstin is in l.a. on the facebook call, phil lebeau is getting ready to jump on the facebook call. we're tag teaming both of those conference calls on the red phone. tesla turned to a bear market after hours. let's get to phil lebeau for all the details. phil, the details are in that shareholder letter, there are a lot of details when it comes to the model 3 >> reporter: a lot of details about the model 3, we'll talk about that in a little bit the free cash flow for the quarter, melissa, listen to this, negative $1.4 billion for tesla. they ended the quarter with 3$35 billion cash on hand as you mentioned, when it comes to model 3, the company has issued new guidance in terms of its production schedule. it says it expects to build 5,000 model 3s per week by the end of the first quarter

bottlenecks had to do with the battery modules being built, they could not get those into production as quickly as they would have liked what we know is that 5,000 per week by the end of the first quarter, with an update on full year production coming in january when they release their full year delivery numbers as you take a look at shares of tesla, this conference call at 5:30 will be chock-full of questions from elon musk, mostly about the model 3. the company's cash position will also get a lot of questions, melissa. >> we knew how many model 3s were produced in the quarter because of the timing of the delivery numbers i guess the question is how many were produced to this date will we see how the progression toward that ramp is? >> reporter: no. i would be surprised because they'll say, look, it's very lumpy, you might have a little bit of a surge over a couple of days and then some downtime that's just my conjecture at this point i don't think they'll give us

that kind of detail. certainly the questions will be, where are you right now, where do you expect to be by the end of the year. >> they're also talking in the outlook section of that letter, phil, they plan to produce 10% fewer ss and xs for the fourth quarter, shifting that production to the model 3, which will bring down gross margins by four percentage points versus the third quarter. was that expected, or is that a bigger shift than expected >> reporter: i'm not sure anybody had it modelled in for that much of a shift, with that much specificity people did expect some of that shift. i'm not sure people were expecting that much, melissa >> phil, we'll check with you later on phil lebeau in chicago for us. 15% in the fourth quarter is what they see for gross margin that's almost a 4 percentage point drop what do you make of the drop in the stock? >> kudos to bk, number one,

because over september or so he started talking about the potential for a double top we had talked about that for a long time, the need for tesla to get through that sort of 390 level, which it failed at. now here we are, this is a replication we saw back in june. stock went from 385 basically down to 310 and bounced. we talked about this a week or so, steve and i were sitting together, tim was over there there's a good chance this shut back down to 280 for two years, in 2014 and 2015, becomes support. there's enough in this quarter to push it to the downside if you parse through this thing, it's a mix now they're going from one, they're going from the s to the x. i think there's some slippage involved in terms of margins, margins will reaccelerate. i think early next year. so you do think there's enough for everybody. the big concern is going to be this cash burn is significant.

what do they need to do? >> guy was on point. tim was negative, bk was negative, guy was talking about a 280 level in the charts. i didn't think we would break the 200 day, which was 318 this is extremely bearish to me. >> you're long >> i'm not long. these are may levels i think you could see some support ahead of guy's levels. you do think that every time you look at it as a car company, you get disappointed and the bulls come out and say it's not just a car company. so i think you have the potential here to balance the stock around these levels where we are right now >> karen, what did you make about what they said >> it's kind of a hope company hope hasn't been doing so well to me, the idea that production, okay, they have the reasons why it was slower this quarter but we've heard this production story. more than a couple of times. the idea that by the end of january, they'll really have it figured out and be able to give the full year production guidance, that's sort of a stretch to me. so i don't know if -- you know,

i think when you have a multiple like this, and hope starts to crack, i mean, what's the right multiple i don't know timmy's been bearish on this for a long time. i just found it too expensive, wouldn't short it, wouldn't be long it. i don't get it >> being short it has been a danger and you say painful thing. the guys who are short the stock, i'm not sure they're able to hold at these levels. hope stock to me is an understatement if you think about the built-in multiple from autonomous, from automation, from the gig factory, from the grid, all these things are from part of why tesla are not an auto company, fine. but you can't refute the fact that there's a growing chasm between their deliveries and their cash burn or what they're supposed to deliver, forget the cash for a second. we're going sideways in terms of deliveries >> you concede, though, at least, when it comes to ramping

up production of a brand-new vehicle, that up front is going to be the majority of the cash burn and there could actually be -- it could be step function in terms of once they get those bottlenecks nailed down. >> i say that i think part of the problem for tesla is they're trying to launch five new things at once. i think this company is way too distracted in terms of their focus. it's helped them raise capital >> right >> i'm trying to not to so you people a jerk when i say this. all the reasons you just stated on the bear side could have been said a year ago and this stock has ramped up to a high of 386, basically, just a few months ago. >> who cares it's at 307 right now. >> no, but when you say that, though, guys that were short, you started off 100% correct, being short this name is a painful process. there's a 20% shortage, and that's why the stock can still rally. >> okay. i mean, again, i don't care that

the stock got to yesterday that was yesterday, man. >> but there were people that were short, there were people that were negative, there were people that were negative at 200 in the stock you should care. i'm not saying you should wear it >> i'm not wearing it at all >> the same points could have been made a year ago >> but at every point, the story breaks people didn't want to believe that the story got broken and they stock with them what if this is the beginning of the break? >> i don't think it's the beginning of the break i think you can make a very compelling argument that it is i don't think it is. i'll tell you what's going to be fascinating for me is to see what analysts come out, what does adam jonas say tomorrow about tesla, some of the analysts we've had on the show for a while, what do they say about this name? there's enough for the bulls to hold on to some hope there's more for the bears to push i think you're going to see price targets get racheted down. you do think there's a very real chance that over the next couple

of days we get 280 >> if you're looking for an entry in tesla, do you go in now? in a few weeks there will be a semi truck unveiled. >> i can't imagine there won't be a lot of analysts who rethink their numbers. >> analysts are always late on this they're always reactive, not proactive. this is the moment where you either decide do i want to step in and buy a quarter position, do i want to add to my long? you have to decide now >> that's fair you've been in and out so, in >> i don't know. when you stick me with a would i, how long -- were you short the name when it went up $200? >> why are you talking about yesterday? >> i would rather talk about the fact that people talked about

tesla for the last two years as if there were no composition in the ev auto space. the fact is, gm is rerated, ford is rerated, the german autos have gone through the roof this is not tesla what's exclusive domain that's part of the reason why the stock -- >> you don't want to answer in or out tesla i'll ask you this question would you rather right now gm or tesla? >> hmm >> tick, tick, tick. >> this is a tv show with limited time >> tesla >> tv is very bullish. tesla. >> stock is in bear market territory. the conference call is under way. meantime, coming up here, facebook is hitting an all-time high after hours, although giving back some of those gains. the conference call is under way as we speak. we'll hear from ceo mark zuckerberg on the quarter, on russia, on everything, basically, and get instant reaction from gene munster papa john's blaming the nfl

for a football problem you will not believe what he had to say about commissioner roger goodell. and the moment wall street has been waiting for, the most important decision president trump will make to date. who will be the chair of the federal reserve? reports are flying it could be evlime powell. ste esman is working his sources. we'll get you the latest after this stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and.

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shake shack surging briefly, touching a 52-week high in the after hours session. kate rogers has more >> reporter: hi, melissa shake shack's sales declined less than expected during this quarter. the company opened nine new locations in the quarter, also increased their guidance for the year, saying they're going to open between 24 and 26 new domestic company-owned shacks in 2017 18 new licensed shacks next year will be its biggest yet, the company increased its guidance from 32 to 35 domestic owned locations for the year, 16 to 18 licensed locations during that time period on the conference call they said they're actively testing

cashless kiosks and increasing personalization of the menu which consumers really like. despite being pleased with the quarter, they were of course impacted by weather, add that go hurricanes led to nine shacks closing temporarily with a sale loss estimated at $300,000 the stock reacted nicely, up more than 4% in the after hours trade, also up around 4% year to date >> kate, thanks, kate rogers in the newsroom short interest on the stock is pretty high, 44% of shares outstanding short. >> moving towards 50%, huge valuation in the stock we talked about $40, it's been a level that it's been unable to get through now for the last couple of years. you have to ask is this quarter good enough to get the shorts to cover. i think it's good. i don't think it's good enough margins are hanging in there, a good sign. when you talk about a company with a valuation like that, you need growth to accelerate a lot faster than it currently is. i don't think it breaks to 40 on the upside >> i think what's tough for investors right now is the best thing for this company and this

is a theme, is to invest in their future in the short run that's very ditch at a valuation that's very expensive, with comps that are based upon at least right now what we think are the best locations they could possibly comp off of. i think that's the issue i will say this, the chart has spent a year basing, and if you look at charts and the price action, this is constructive >> we should note shake shack's ceo will join us monday for his first post earnings interview. he and guy will have a special surprise for the traders we hope it's shake shacks. >> what would it be, tim >> it's going to be a surprise we're not going to brings you something from -- what's that place you used to work at? >> quick snacks in the garr gala mall >> if it it's still in business. pointing fingers at the in them for slipping sales on a

conference call this morning >> the nfl, by not resolving the current debacle to players' and owners' satisfaction, this should have been nipped in the bud a year ago we're optimistic that the nfl is ahead good or bad leadership starts at the top and this is an example of poor leadership >> papa john's is a sponsor of the league is the nfl to blame or does papa john's have a real pizza problem, steve >> they're down 27% year to date and if you look at domino's pizza, they're up 11% year to date there's definitely a problem with pizza for the last month versus burgers you could see shake shack versus mcdonald's, i don't know if it's a nfl problem or not

i would say that if they're blaming it on the nfl and it gets better, then you could buy these stocks because that support. but i would wait a little bit before we decide this is the time to rush in on pizza >> i would think they have excellent data as to whether this correlates with the nfl they have data, what time every order came in, right >> you buy it, you believe them. >> absolutely, i believe them. it might not be all of it, maybe it's ceding some share to dominos. i believe it that was pretty striking, that very clear shoutout to roger goodell. that's interesting >> and so are they that reliant on the nfl how good does that make you feel i don't think they are, just to be clear, the pizza industry in this country, guy probably owned a pizza place at one point there's a lot of room for the big boys including domino's to consolidate, there's a lot of that to go international, a third of their sales, they have a heavy runway there. if you're looking for growth in this company that trades roughly 19 times forward, it's not

terribly expensive especially when you look at the others in this space the multiples in the entire fast food space will go higher. i would be careful >> i know that you may be biased because of your time at domino's >> my heritage, i thought i was going to hear the word heritage. >> no, why i even -- >> you're an american. >> you spent time working at domino's, see, look. no, that's you at shake shack. hey, the surprise is being blown. >> i haven't even -- >> that's a tease. >> we wouldn't have done that. >> i spent time at domino's. first of all, i don't like the fact that he, theceo, went so hard after the nfl don't bite the hand that -- and allegedly feeds you, no pun intended when things were great, i didn't hear him trumpeting how great the nfl was, now he's taking the other side not a fan. at 19 times forward earnings, i

don't think it's crazy expensive. the short interest is such, maybe people start to get squeezed >> bite not the hand that feeds the nfl. >> circular hands. still ahead, check out shares of facebook and tesla, facebook giving up after hours gains while tesla is changing. we're following those conference calls, tesla's will begin shortly. we'll bring you the latest details, next. i'm melissa lee, you're watching "fast money" on cnbc, first in business worldwide i mean time here is what's coming up on "fast." our long national nightmare is over. >> that's what some investors are saying about rebounding energy stocks. but there's one stock that traders say you can still buy. plus the future of the fed begins tomorrow. when president trump picks one of these people to lead the federal reserve. and a top blackrock strategist tells us which would be best for stocks

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tomorrow president trump is expected to announce the next federal reserve chair. reports are flying that the president is leaning towards powell steve liesman has more >> reporter: all the king's horses and all the king's men saying president donald trump will choose powell as the next fed chief. why powell the 64-year-old native of washington, d.c. is a republican, appointed to the fed by president obama he's seen as a compromise candidate, continuing the policies of chair janet yellen that said, he has backed most of those reforms, certainly more than the president has powell a former partner at carlyle group where he amassed a fortune, we're told. here is what he said months ago

about the global economy and the outlook for u.s. rates >> you've got for the first time in quite a while synchronized growth around the world. you've got a dollar that is flat to down. you've got commodity prices up and you have really significant reduction in downward pressure on the chinese currency. all of this is taking place against a backdrop where as long as this backdrop sustains, it's likely that the process of normalization will proceed without significant disruptions. >> reporter: worth pointing out that powell stands opposed by some republican fed critics. he's called the easy monetary policy a success that sets up for some fisticuffs or whatever you want to call it at the hearings, not a lot, maybe. he's also said he doesn't think the fed ought to do a lot of tinkering with the economy >> steve, thank you, steve liesman in washington, d.c.,

what does this mean for the markets? this is the consensus view in terms of fed picks >> steve is very plugged in, great to get that insight. you said it on the lead-in to the lasting block, this is the most important decision that donald trump has made yet. if that's the case, there should be some fear no matter what, changing continuity at the fed is something that the market should not be blase about i agree, this gentleman has proven to be as dovish as the status quo, that's ultimately good i want the fed to be independent, not a puppet of donald trump people are too complacent on the impact of the fed. a number this morning showed there is an enormous amount of pressure in terms of labor the job market is something they've missed pce is not a good gauge of inflation. >> i'm always surprised how complacent everybody is on the fed, considering that they're embarking on getting off the easy money path, what would go wrong, right a lot could go wrong >> inflation could go wrong. >> especially if we have tax in

the mix. >> right i guess we could have infrastructure somewhere in there too, i think that's way down the road, if at all i don't know, i think inflation is really the most important thing here, more important than the fed chair, more important than -- i mean, i think the policy will probably be similar. they've done a great job of laying out what they're doing, why they're doing it, and when but if inflation starts to tick up, which i think will happen, that's the risk. >> for more on which candidate will be best for the market, terry, good to see you >> good to see you guys again. >> tomorrow jay powell is announced, what do we do >> i think the markets will actually like that so powell basically represents continuity from the current board of governors if we were to get a john taylor nomination, that would surprise the markets and that would be a worry for the market john taylor is not going to run market policyoff his famous rule, but if you look at his rule, right now it's indicating,

depending on what variables you put into the formula, 150 to 200 basis points higher than what the fed rate is. the markets will take powell because that's the gradual, predictable manner >> let's say he chooses powell, let's say we have some sort of tax cuts, not even putting infrastructure in the mix. is the risk to the markets to the downside or the upside >> the risk to the markets is the upside if we get tax cuts. the fed, as karen said, is independent. if we're an overheated economy, we're growing about 2, 2.1%. long term gdp is 1 3/4 we're probably going to get the inflationary dynamics, the fed raises interest rates quicker. we should see a knock on equity markets, that would be the challenge there. >> this flattening yield curve which quietly or not so quietly is atlevels we haven't seen in

a decade, when does that matter, if at all? >> it's interesting, if you look at interest rates right now, both two and ten years have been shifting up in the last month or so the fundamental story is that markets are accepting that when you look at the curve, we think we'll have a steeper yield curve. to have the back end move up, you have to have inflation one of the elements for interest rates is having a premium for inflation risk if you don't have inflation out there, bond investors, i'm a bond investor, say we don't need that premium so we can bid down the price. >> where do you want to be right now, the markets right now, in your outlook >> obviously multiasset. my team works on multiasset strategies we still want to be invested in equities relative to bonds we like equities, we like being exposed to cyclically oriented sectors. we like technology, given its strong run that's where we want to stay invested

equities relative to bonds >> in terms of worldwide asset location, where do you put the rest of the world versus the u.s. >> the big worry for emerging markets, tim talks about this as well, if the fed goes a little more, the dollar moves higher. we've seen a mini correction right now in the u.s. dollar we're going to write about the dollar this week in our commentary, that's a spoiler we still think the dollar is going to move relatively muted so emerging markets would stay on this move mere. >> terry, thanks, good to see you. the market hasn't really digested rates moving up in december everyone thinks they're going to move up in december. i wonder what it does to the marketplace if we don't see rates move higher in december. everyone has factored in this trade, so much so that there is

the -- >> there is a case to be made that they could sit on their hands. >> what would that case be >> you talk about inflation, i get it, there's inflation, if you know where to look there's inflation. but i don't think there's an overwhelming amount of inflation that it would leave the fed susceptible to just skip out on one -- >> this one sort of -- everyone knows it's going to happen >> the markets have digested it, why not go ahead and do it >> and be able to have something later if things turn around. >> we've seen the implied implication that rates will go higher, we've seen it go up to 85%, dive down to 70%. >> i don't think that's an indicator of inflation >> no. >> that's what you're saying, that's consistent. >> i think right now, i don't think -- i think they have the ability to sit on their hands one more cycle through and i think that would -- >> but they're trying to normalize, they're not trying to

be in a rate hike cycle. they're but normalize. you're not in a position to say, hey, it's okay now they have to move. i think the great thing we've all said here, this fed has been as transparent as they can possibly be. at one point we thought this was blasphemous from the fed the first two or three years from bernanke, that's why we've had this volatility, they'll do what they say. i think the global economy benefits from this >> i think if they did nothing in december, that could be -- >> a selloff >> a selloff for the market. i would say what do they know that i don't know and what do they see that we're not seeing i do think they move, know coming up, facebook giving up all its after hours gains, now down around 1% we'll tell you what was just said on the conference call that has investors hitting the sell button check out energy stocks, surging in the last week our traders say there's one name you can still buy. much more "fast money" right after this

energy stocks on fire as oil nears its highest level since july 2015. let's get to bob pisani at the new york stock exchange. >> reporter: hi, melissa opec has stuck to its production cuts for the most part and is now talking about extending them second, this is important, the demand growth has been pretty decent so earnings have been coming in for many of these exploration/production companies and oil service companies. cabot, devon, all have traded up

since their earnings report. big oil names like exxon, especially bp earlier this week, they're also trading up in the days since their earnings release. so oil companies are benefiting from two trends. first, obviously, higher commodity prices that's the big story but second, more discipline on capital spending that's an important part of this as a result, the trading volume in the energy etfs, like the exploration and production etf, the oil services etf, they've been much higher volumes in the last week or so. but this oil rally hasn't really translated into an oil stock rally, at least not yet. many tried to buy into the oil rally earlier this year. but when oil fell apart in the middle of the year, and it fell apart twice, investors just gave up and the big oil etfs fell apart and they never really recovered. one exception is the refiners, up over 36% this year, far outperforming the e&p and the oil service names. refiners have notably outperformed, partially because

gasoline prices started rising in the middle of the year against oil and rose knonotably after the hurricanes phillips 66 was up more than 10% in september there's talk we could be staying in the mid-50s, maybe even move towards the obvio60s, that woule the saudis happy would the u.s. fracking industry ramp up production or show some discipline we should have these problems, melissa, thank you >> bob pisani at the new york stock exchange that's the cycle they always go in >> the last part is critical do we see a lot more supply and the whole thing just unravels. >> except for the fact that rate counts have been down since july if you think about it, what he talked about is ultimately a case where capex has been totally cut over the last three years. if i had checked the health of all the people who said not in my lifetime, we should be

running around looking for a lot of dead bodies people don't understand that opec has got solidarity. the fog has been lifted going into the vienna meeting on november 30. if you look at the drillers, diamond offshore is up 70% in the last whatever. i think the best place to play is oil services, these guys it actually starting to see some capex. >> and some support from thear anco ipo >> that's the ramp, that's the tailwind but these are huge levels in wti and in brent that we haven't seen in quite some time. so we have to get over those on a technical basis. but i do think it's too attempting for opec to cheat, brent at 60, forget aboutit, ussr supply comes on >> you look at valero, a ten-year high or something in valero the last time we traded this was '06 or so. these levels, very important we hold these levels in vlo we have been consistent in exxonmobil since august. karen and i were talking about

this last night. $76 held, bounce, bounce, bounce here we are at 84. exxon is at a significant down trend. we've said there's a good chance it remains in that down trend. that's where i think that's going. ahead, facebook and tesla, facebook giving all after hours gains while tesla flirts with bear market territory. the conference calls are under way. we'll hear from mark zuckerberg and elon musk in a few minutes much mor"ft moy"e asne on this very busy night straight ahead i mean, think of all the things that think these days. thinking planes. thinking cars. thinking phones. businesses are thinking. factories are thinking. distribution plants are thinking. plant plants are thinking. even your toaster is thinking. honey, clive owen's in our kitchen. i'm leaving. oh never mind, he's leaving. there's so much thinking. even this thing is thinking. is this thing thinking? this thing is thinking! businesses are up to their necks in knowledge.

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models during the season of audi sales event. welcome back to "fast money. facebook giving up all its after hours gains. julia boorstin is listening in on the call, she'll tell us what zuckerberg had to say. julia? >> reporter: melissa, mark zuckerberg jumped straight into the growing controversy over russian-purchased ads on facebook take a listen to what he said. >> i've expressed how upset i am that the russians tried to use our tools to sow mistrust. what they did is wrong and we are not going to stand for it. >> reporter: zuckerberg saying the company is going to prioritize protecting its communities over profits to that end the cfo says 2018 will be a significant investment

year, guide that go next year's total expenses will grow 45 to 60%. that acceleration in expenses is thanks to sizable security investments in people and technology the company is also investing in video contend and making long term investments in artificial intelligence zuckerberg stressing the importance of making the investment in security in particular >> i am dead serious about this. and the reason i'm talking about this on our earnings call is that i directed our team to invest so much in security on top of the other investments we're making that it will significantly impact our profitability going forward. >> reporter: zuckerberg as well as ceo sheryl sandberg stressing their focus on the community of users, stressing that phrase throughout sandberg says they've reached 6 million advertisers on facebook. >> julia, that's an increase in '18, 45 to 60% on top of a year

that saw an increase in 40 to 45% year on year >> reporter: yes it's interesting, if you look at the operating expenses for this past quarter, they came in a hair lighter than expectations but there's been a lot of talk on facebook how they're going to continue to invest in dry growth now their operating expenses are projected to grow significantly more than what the company previously said. some of that is about the content investment they're making, which by the way i want to note that zuckerberg stresses is not supposed to be about passive content but the kind of content will talk about, he noted that people tend to talk about sports video, hinting they might make some video investments there. but it's really about this investment in security people and technology, they're going to prevent this kind of situation from happening again >> is it your understanding that the spending will also include, when it comes to protecting our community, include tools, people, to protect political ads or to make sure that they're

from the proper sources or disclose where they're from? >> reporter: it's going to be about transparency and also about sort of oversight. this is going to be about everything, both political ads and issue ads. issue ads are often the harder ones to monitor. but this is going to be about people and the algorithms, both the humans that you need to hire and the technology to help them as well. >> julia, thanks julia boorstin who was on the conference call. gene munster, "fast money" friend, he's been on the conference wall on that red phone. gene, we were joking in the green room before the show started, facebook puts up good numbers, they'll get on conference call and talk about spending next year and the stock will go down that's what happened what's your interpretation of what they're saying and what they're outlining for '18 now? >> like you said, it's kind of their textbook i want to put context around why this is a little bit different if you take the low end of their expense guidance, they said, as

you just had mentioned, 45 to 60% expense growth, that would imply $4 billion in incremental investment basically the street was looking for close to $20 billion for next year. so 20 to $24 billion $4 billion, this is a huge number that they're going to be spending on. now, not all of that, as you were just talking about, it's not going to be around privacy and transparency and kind of mitigating some of this divisiveness some of it will be around content. still, just outrageous amounts of money that they're spending you can tell this whole issue has really got under the skin of mark zuckerberg, and he's going to do anything he can to stop it so i want to put some context, it is different. that explains the pullback in the stock but ultimately this is a good thing for the plat for me >> gene, it's karen. let me ask you something even with expenses going up, you can cure a lot of margin problems with big revenue in a company like this. what's your take on not just this quarter but looking forward for revenue from them?

>> reporter: this is the part that i kind of roll my eyes at their cfo talked about that expense spending but also said to expect revenue growth to decelerate in the quarters to come now, that's almost a cut and paste from his prepared remarks every quarter. and so they say that every quarter, and the revenue growth continues to be strong and importantly, they've got some big pools that they can monetize which they're not monetizing now, most notably messenger and whatsapp and instagram is probably halfway through. i think that revenue growth for this story is going to remain a bright spot for the next couple of years but the expense side is going to be a little bit of a jab to earnings for the next few quarters >> all right, gene, thanks for your analysis. we'll see you a little bit later on for your take on tesla. meantime, let's trade facebook here on the desk, shares are down more than 1%. gene mentioned messenger they did say messenger would be sort of a medium term monetization

these are sort of layers of monetization levers down the road >> and they're going to be huge levers down the road gene, i don't think gene danced around anything, i sort of won't dance around this. a lot of what facebook said they had to say in terms of security spending they have to say they'll ramp it up we'll see if they actually do. i think the quarter was outstanding. operating margins were close to 50%. the street was at 44%. but i understand why the stock is selling off i mean, when they say that 2018 is going to be a significant spend year, that scarce people >> i totally agree, this sounded like a capitol hill testimony versus an earnings call. the stock is up 58% year to date i think you have to be in this name regardless of what he's saying, he's saying it to placate whatever voices are butting up against his or trying to push the latest headline news on top of him. he has to do this. but i think ultimately facebook is still a buy >> yeah, i mean, look, 29 times next year doesn't make the stock

expensive for the growth you're getting. the ad revenue growth is unbelievable, even if it scales down in the third and feathourt quarters as gene said, they do it all the time he was expecting this even before he knew it had to be said i don't think the stock is reacting in a big way, normally it would have reacted a lot more >> this was a gigantic quarter, i agree with everything you're saying, they have to say this. they have to increase the spend, i believe that the only problem with this quarter is that it came out a week after alphabet and last week's so it rallied in front of it and now here it is so it was about standing quarter. i'm hanging on >> carrying his losses down 80% right now. tesla dipping to bear after hours territory. we'll hear ceo elon musk getting a little bit feisty. we'll bring you those comments plus one trader who more than tripled his money in

alibaba this week says the stock has more room to run he'll tell us how high much more "fast money" after this zar: one of our investors was in his late 50s right in the heart of the financial crisis, and saw his portfolio drop by double digits. it really scared him out of the markets. his advisor ran the numbers and showed that he wouldn't be able to retire until he was 68. the client realized, "i need to get back into the markets- i need to get back on track with my plan." the financial advisor was able to work with this client. he's now on track to retire when he's 65. having someone coach you through it is really the value of a financial advisor.

shares of e-commerce giant alibaba are up this year let's get to mike khouw in austin with more hi, mike >> reporter: hi there. i traded over 300 today.

traded at over double its average. one of the notable trades we saw was a buyer of the november 200 calls bought 4,000 of those then sold 4,000 each of the 15 calls in the 20s basically this is somebody who is betting this stock is going to make a move about 15% to the upside within the next two weeks >> thanks for that, mike, mike khouw in austin. check out "options action," friday 5:30 p.m. eastern time. grasso >> the stock is up 112% year to date i'm still long it. this is a stock that's beaten on revenue for the last two years they're making a heavy push in cloud and artificial intelligence they're investing. it's still at a great multiple the average price target on the street is $210 i'm still long it. i think the path of least resistance is still higher up next, tesla sinking after hours. the conference call under way. elon musk getting a little heated we'll bring you the comments after the break.

i think it's terrific. your kids go to college and you start trading. >>yeah, 5 years already. 5 years, hmm. you ever call your broker for help? >>once, when volatility spiked... and? >>by the time they got me an answer, it was too late. td ameritrade's elite service team can handle your toughest questions right away- with volatility, it's all about your risk distribution. good to know. >>thanks, mike. we got your back kate. >>does he do that all the time? oh yeah, sometimes he pops out of the couch. help from real traders. only with td ameritrade. your bbut as you get older,ing. it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

ray's always been different. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and. welcome back to "fast money. tesla dipping into bear market territory in after hours phil lebeau in chicago has been on the conference call >> reporter: melissa, let's get right to elon musk's comments regarding model 3 production here he is talking about the production issues and his optimism that at least they know what the problems are and can

solve them >> the vast majority are doing incredibly well. there are some problem areas after i give this overview, i'll do a deep dive into the biggest problem area >> reporter: and that biggest problem area, the production of the battery modules. they are now pushing out model 3 production to 5,000 per week by the end of q1. they'll give us an update on whether they hit 10,000 per week by the end of 2018, at the beginning of next year that's when they will give us an update with regard to that pushing out production to the end of q1, here is musk talking about, eh, in the grand scheme of things, he doesn't think it's that big of a deal. >> i mean, i think in the grand scheme of things, it's a relatively small shift the model 3 is a ten-year program. and so we're talking about a few months out of a ten-year program, in the grand scheme of

thin things, is immaterial. >> reporter: we're going to hop back on the call, melissa. you mentioned he's getting fairly heated. he went after journalists that wrote those stories about mass firings after performance reviews at tesla, saying they ought to be ashamed of themselves we'll have more obviously tomorrow on "squawk box. back to you. >> i saw the twitter feed, he didn't elaborate on exactly how many were fired. did he talk at all about another report he may have panned on this conference call, or maybe he didn't, about parts of the model 3 being produced and finished by hand is that still going on >> reporter: to my knowledge, melissa, he hasn't addressed that he came out two minutes ago to sit in the chair so that might be going on right now, but so far he hasn't talked about that. >> thanks, phil. let's get back to gene munster, shares now down by 4.8% in

after-hour lows. it looks like the stock took a leg lower here in the past ten minutes, gene. >> reporter: by the way, i can answer your question you just had for phil about are they making these by hand while you were talking to phil, i loved the question from an analyst, elon musk had previously said it's going to be manufacturing hell building model 3, he said that back in the summer the analyst asked how hot is it in hell right now, he said it's 9 out of 10. i think they're making these model 3s by hand right now and will continue to do that over the next months or so and gradually ramp up. just maybe this combative approach that he's taking, maybe isn't sitting too well with investors. it's his style, but i think that probably has had an impact on the stock. >> you've been a huge bull on the stock, gene. does your outlook on the stock change at all based on what he's saying about model 3 production, pushing that 5,000 target to the end of q1?

>> reporter: my outlook that this is going to be the top performing large cap tech stock in the next five years hasn't changed. the news tonight and the pushback is a disappointment and i think that i'm in the camp betting that he's done this in the past and he will ramp. i would just caution investors too, again, i'm fully behind the story, none of that has changed, but we're going to see other disappointments. and it's just a bigger opportunity and he'll capitalize on that. >> gene, thanks for your analysis, always good to see you, gene munster of loop ventures we're getting an unveil in the next couple of weeks do you like where the stock is right now? >> no. i still think over the next few trading sessions, i'll stick to my guns. final trade time >> qualcomm. the stock's valuation is interesting, obviously there are some issues. >> mattel puts i don't think this toys "r" us story is over by a long shot >> alibaba looking for a pop on

earnings >> mel, what are the best two words in sports? >> game seven. >> woo >> rattled that right off. >> brilliant nucor. >> thanks for watching see you back tomorrow at 5:00 for more "fast money." "mad money" with jim cramer begins reince. 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 cram america. my job is not just to entertain by to educate. call me 1-800-734-cnbc or tweet me @jim cramer a bull market like the one we are in p