you know, expose your kids to stuff and they might not develop as many allergies. i don't have allergies, do you >> not to food >> thanks to mom and dad for letting me eat junk food >> closing bell right now. facebook for enabling add versaillesers to target with shadow contact information, what it means for consumers and investors coming up brett kavanaugh and his accuser testifying on capitol hill today. >> it is called the worst

nightmare. the closing bell starts right now. goosh. stocks rebounding and very steady gains throughout the morning. we have been down a little bit but still a nice rebound the dow swinging more than 175 points within today's session. >> the dow is higher today, first time we have seechb that in four days let's begin with technology. apple and amazon both powering the nasdaq higher after jp morgan with an over r overweight rating the firm giving apple a price target of $272 that's a 23% increase from yesterday's close. then there's amazon which is

also higher after the most bullish call yet firm says it expects amazon to ral rally to 2525 over the next year it would be a big upside on 30% game let's discuss this and the impact these calls had on wall street there was no kind of new way of analyzing apple's business it was kind of the story we have been hearing it is more of an ongoing profit

source we trust them with whatever they do next that was the substance of the call. >> i totally agree with you is it something that has been the last two or three years? >> i think it's a bit of a split story. apple is a little bit more of a mixed picture. apple traded at a discount to the market for amazon i feel as if you have to be very much on alert for the fact that it is par in a sense that amazon has no boundaries.

something else has to come along as a catalyst. >> it is not just theesz two stocks >> when it comes to leadership of of this market it is often tied to the low rate envie

vonment. >> i still think slow and low for the economy and rates are perfectly fine for these stocks. i think the banks are still lagging today. it is a little bit of a hangover at least >> great stuff we'll see you again next hour. we look forward to it. on the topic of amazon of course they announced some stores recently and the tech giant has taken another step into brick and mortar. it is the only one that truly sells merchandise. those categories are here too. there is about 1,800 products. they are rated four stars or

higher top sellers trending or new items. the first table are products most added to amazon wish lists while it's a very physical store the price tags are actually

digital. she said shoppers want to try out devices like what you're looking at they want to try the voice command door locks here is what shoppers told us. >> i think by having a physical store it is very good addition. this for me is phenomenal. >> imagine that, the future of retail thanks s thanks very much you did a great job. >> when you're buying something do you buy something so you don't have to get out?

would they deliver it for free if you don't want to take it awaythen we'll talk about what they looking into when it comes to competitive practices. they will join us, her thoughts and some of her other cases. that's in the next hour there on the closing bell

>> we look forward to that stocks moving higher in this lasthour good afternoon to you all. encouraging response to the sort of fed inspired selloff yesterday. >> historically when you look at fed announcements and interest rate hikes there is a lot of anticipation leading up to it. we saw the volatility yesterday. a continual pattern that we have seen that the market always rebounds and always recovers after any significant news it has ban lot of things on your

kalen da calendars. we had the fed yesterday the testimony coming out wasn't expected but it is something everyone has been speakingon >> considering the global fundamentals i would expect the dow must be stronger we know lots of people having the same position or same position location some times

comply call i complicates these things i think it has been holding in rather well. yes, we didn't get that close testing. we got up there not even yesterday before the announcement or after. they have come off herewe hover they haven't give back much. truly, it doesn't surprise me at all that interest rates gave a little back but think did give a lot back and that really is the issue. >> we were talking earlier in the show the way apple and amazon are dragging markets higher today you prefer microsoft

>> i do. it is because of what you see in amazon >> i think that's lot of worry not knowing what the landscape will be like moving forward. >> i mean i guess i'm wondering

if you see that any where on the market, we are ong >> we have not seen ityet. >> yeah, i mean i really think it's the cumulative effects. let's put this in perspective. january of 2018 the cumulative positions of all central banks went through 16 trillion now granted it changes one foreign exchange trade

there is outside variable. it traded up to 16.5 it is still right around 16 trillion, okay we are talking nine months of it went through banks are starting to pull back. >> okay. thank you very much. coming up shares of carnival sinking today. we'll speak exclosiveusively. and a high stakes hearing on capitol hill brett kavanaugh and one of his accusers testified before the

senate judiciary committee you can reach out to the show on twitter, facebook and send us an e-mail dow is up 77 points.

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the dow is up 0.3% or 82 points the high was 171 for the dow we have lost a fair amount it is a positive looking chart more broadly than yesterday. >> apple contributing a good chunk of that. facing lawmakers today along with blasey ford one of the women accusing him of sexual assault it is veering from his prepared remarks. he is categorically denying accusations of sexual misconduct or anything remotely close to it in his remarks he had said such

obvious character association would from serving our country in political acquainted positions. here he is saying that those on the left are calling him evil and that's doing irreparable harm to his family and his reputation during ford's she was incredibly emotional and speaking in very raw terms during her remarks republicans had to further questions during her testimony both republicans and democrats are expected to question judge kavanaugh. he is one of the members of republican leadership had told reporters he found no reason not to find ford credible however he did want to hear from judge kavanaugh to see whether the burden of proof will be met.

he had knowledged that he did some times had done things that would make him cringe. he is denying any type of sexual assault or sexual misconduct guys, republicans are still as of now set to vote on his nomination tomorrow. >> thank you very much for that. we are going to continue the discussion and bring in stephanie miller, senior vice president. thanks for joining us. what's the latest expectation? do you think 51 republicans would still vote in support of mr. kavanaugh? >> it is hard to call. i'm getting the updates that you all are. i haven't had his side of this yesterday today. blasey ford had a really good morning.

she did very well. she presented herself very well.

i think it really matters to investors. i think the house is going to flip to a democratic control right now we think that the senate remains under republican control. if the senate becomes in play because of frustration and anger and sort of politically motivated voters around this supreme court nomination if the democrats take control of the senate i think it pretends poorly for the trump administration that they really valued it will probably come to a screechinghalt

>> are you saying that it helps the republicans case or hurts them >> i think it's pretty clear at this point that it has become -- that it has become a very very political event. if he is confirmed i'm already seeing a lot of conversation around what democrats could do to impeach kavanaugh i don't know if he gets confirmed if it will translittle -- translate to who shows up for the elections. i think democrats feeling like they would have a say in who a supreme court justice would be due to a seat that it will remain open would actually motivate more democratic voters to the polls >> even if the democrats pick up more seats, not clear that investors are paying such close

attention or we are seeing so much volatility around the midterms maybe we are not seeing close enough polls but what are the market implications of say a democratic house or democratic congress on the trump agendas and the markets? >> i think no matter what our base case is that the house flips. i think there will be quite a number of oversite hearings. i think it will -- you know, another example i think the house ways and means committee will see trump taxreturns. >> we want to interruptand tak you live to the hearing where

judge kavanaugh sounds very angry. let's listen i and other leading members were opposition research from head to toe, from birth through the present day. recall the people who were exposed that year of 1998 as having engaged in some sexual wrong doing or indiscretions in their past one person on the left even paid a million dollars for people to report evidence of sexual wrong doing. it worked. nothing about me from 2001 to 2006 i worked for george w. bush in the white house as staff secretary i was by

president bush's side. i traveled all over the world with president bush. i went everywhere with him from texas to pakistan, from alaska to australia, from buckingham palace to the vatican. i was vetted fwi american bar association and this committee i sat before this committee for two confirmation hearings in 2004 and 2006. for the past 12 years leading up to my name nation i served in a very public arena. i'm what is often referred to as the second most important court in the country i have handled some of the most

significant and sensitive cases effecting the lives and liberties of the american people i have been a good judge for this nomination another fbi background investigation, another american bar association investigation, it is until last week no one ever accused me of any kind of sexual misconduct. no one ever a lifetime, a lifetime of public service and a lifetime of high profile public service at the highest levels of american government. >> we will continue to monitor

the hearing. we have been following this all day. he is making the point here he has been thoroughly vetted through many decades of public service and that he feels enough is enough that he wants to clear

his name during these next several hours of testimony they were caught for comments. do you think their belief there, their view on this has changed at all or they still remain pretty confused about how they vote tomorrow? >> the phrase i'm using is sympathetic but unclear if they had been swayed. they try to delineate between the testimony of christine ford herself and what they say democrats are doing in order to politicize and whatever might have happened to her

>> he said yesterday this news conference is that he intended to watch it. we know he delayed a critical meeting because all of the attention is focused on this hearing today. as far as melania trump a spokeswoman said she has not watched the hearings today she has been busy preparing for meetings tomorrow.

>> please keep us posted as you continue to follow this hearing and bring us any updates and headlines. we'll get an update with sue find out what else is happening right now. >> there is a lot. they are urging everyone to get their flu shots. physicians said everyone aged six months and older should get vaccinated >> one of the most frustrating things for me as a physician as a health advocate and surgeon general is when people die from preventable diseases, when there is something we can do about it. we can prevent thesedeaths

commissioners at the port authority of new york and new jersey you are up to date that's the news update i'll send it back downtown to you. >> sue, thank you. less than half an hour to go we are off session highs still seeing a broad rally the dow is up 60 points into the close. s and p up and it. still ahead, google hit with a record fine by vestager earlier this year. amazon is now under the microscope we'll speak with her about which amazon practices she is looking into arnold donald joins us to

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>> thank you guys for having me on i'm excited about having a record earning about having an opportunity to raise our guidance at the midpoint it will show a 16% increase in earnings per share. it will be partiallyoffset.

>> the pliesing since june it doesn't compare well to some of your rivals. so you disagree with their interpretation of that >> we have nine brands we have multiple destinations. there are a lot of factors that can influence yield. the bottom line is our yield is strong we are in line with pricing overall. individual segments are up nicely and the others are part

of over it's all pricing and strategy management to ensure that we give our guests, you know, the great vacation experience and the value they want ultimately it will lead to increased earnings we are focused on earnings >> i want today aed to ask you supply a lot more ships are coming out and there's a bit of a concern there about over capacity. can you describe how you see the industry right now >> yeah. the industry is still capacity constrained. every market in the world and every single market. we are capacity constrained because the maximum the industry can to grow is 7%.

bookings are strong. the caribbean is a growth area we had a record area and we'll have an increased from capacity and also occupancy and improvement in overall returns next year. >> just listening to you it sounds like a very bullish picture you're painting of industry, demand, we are in one of the best consumer

environments ever. your stock has gone nowhere this year the entire industry is under performed. >> there are a lot of variables going ochblt we'n. what we know is if we create value which we are doing we increased earnings we will deliver on our commitment of double digit returns, guidance that we will achieve this year. we have earnings growth, you know, planned in the future. we have clear site on that the market will eventually recognize it people are always looking for inflection points. they have fears and so on. the reality is our industry is strong our company is very strong and our cruise line brands are super strong we took on four new ships this

year we have carnival horizon the first ship at sea. we made history. and so all of those are just additions to already strong environment. >> thank you very much for joining us this afternoon. >> thank you appreciate it. >> and allen donald is one of the great all time >> i did not know that >> i don't even know what that fast baller is >> my apologies. still ahead on the closing bell, aetna making a big move today. details on what they are selling ahead. we are back in a couple of minutes. ♪

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shares on the move aetna will be selling the medicare part b drug business. we have more on the story here, bertha >> yeah. they are saying it is a win-win for all involved they are hoping it will be the final hurdle to get them approved at the doj to get that $69 billion merger approval over the finish line. the way it will work is aetna will give up 2 million members to well care.

he says it would be a big win for both certain lay good price for them to triple their market share in the medicare part d business back to you. >> thank you very much the nasdaq is up around about 0.7% coming up president trump yliticizing the negotiating his comments are coming up in today's frostbite. do you want the same tools and seamless experience across web and tablet? do you want $4.95 commissions for stocks, $0.50 options contracts? $1.50 futures contracts? what about a dedicated service team of trading specialists? did you say yes? good, then it's time for power e*trade. the platform, price and service that gives you the edge you need. looks like we have a couple seconds left.

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welcome back it was after the show so we haven't discussed it yet we told reporters we rejected a one on one meeting because he is not happy with negotiations. here is what he had to say >> tariffs are too high and he doesn't seem to want to move

we are thinking about taxing cars coming in from canada that's the mother load, the big one. we are very unhappy with the negotiations and negotiating style of canada. >> oflk he also suggested he didn't like freeland and canada has comeout. >> it shows how frosty negotiations >> a lot of frost. >> yeah. i thought that >> this is a true frostbite. it was sort of icy in terms of the attitude towards canada. the canadian dollar just weakened

that's really we saw much of a market impact. threatening more and trying to make it personal between him and the prime minister of canada both sides need to make a deal >> i have to say though it is remarkable that they did not find time for a quick one on one where he does with all sorts of other leaders. it is remarkable they did not have time for a one on one >> also tru dea u has his own

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significant uplift from yesterday. it was a very positive morning getting to the highs around lunchtime. we have sold off in the afternoon. we are set far positive close for all three of the major indexes. you can' the nasdaq leads up to about 0.8%. it is up and technology is up there too and consumer discretionary sector doingwell

today it is up 0.8%. >> and what's interesting is despite the movement immerging markets, seven days of gains u.s. stocks on pace to close higher as well snapping a three day losing straek feak for the . we did get a number of consumer giants reporting to date that had negativeearnings the nasdaq leads to charge and

apple's performance due to an upgrade has had a big impact on that there goes thebell >> that does it for the closing bell back to you. >> welcome to the closing bell let's take a look at how we are finishing up the day on wall street up 57 points definitely off the best levels. s&p has a gain of .3%

russell 2000 under performing. it is no secret facebook sells your date ta to advertisers facebook is using other information to target ads to users. that discussion is coming up later in the hour. first joining the panel today to talk about this market and stephanie is here. leading the dow was apple. dowdupont and the big decliner was conagra.

>> there was some continuation of yesterday's fed inspired selloff. there were interest rates there that kind of weighed -- continued to weigh >> yeah. but i think the theme for this

week has been all about rates and their gradual increase in yields also it's about energy and the rise in the commodities. those are two that are top of mind at least for me the thing is if you step back and see why rates are going higher it is because the economic data is getting pretty good today you had durable goods. it's a huge number you have initial claims that are down 23% year over year. so on top of that you have consumer confidence we haven't seen so the data isgood

>> analysts establishing themselves is the biggest out there applying a gain of more than 27% for the stock for current levels we discussed this a little bit earlier. do you agree with what he said earlier that there's nothing really new here? they haven't discovered nothing we have come across before >> i do agree with analysts. amazon is my biggest discretionary stock. i don't worry so much about apple as i do with amazon. i feel like you have the buy back support you do have a free cash flow yield of5%

you'll see this operating leverage that's good enough at this evaluation >> and it is definitely much more sentiment driven. it is not based on the momentary idea so i don't think you have people doing these sort of channel checks >> right what about the fact that they are opening bricks and mortar stores >> nobody looks at that and says wow, that's little bit too far field for amazon >> i think it's also with any high multiple growth stock it's all about the town, the total addressable market they keep on finding new end marks to focus on. you may agree with them or not agree with them. the growth potential is there. add on the fact that they are focused on profit blt on top of

that which means better earnings trajectory, that's pretty powerful >> what do you make of it? it is not as obvious sort of strategy as whole foods is to have fresh groceries >> i think you'll have when you have -- online and pick up in the store from all of the retailers like kohl's, someone could ordering in and get it delivered that day they are try to go having that as well. they already have very fast speed as it is i think it also kind of helps in that regard. >> i think what is going to matter is there's a rethinking of cloud services demand will is a school of thought that says maybe it will calm down a

little bit next year it would probably hurt much more than any other >> sales force reached a record high today >> it is still going >> and we'll make it up on the advertising size even if it comes down you have advertising going higher you a lot of stuff to talk about. >> we have another story to talk about. the u.s. drug enforcement administration opened the door for a commercial launch of the anti-seizure during. this is kind of an effective substance that can be used and as a compound that works you the legalization of recreational which is to me giving you the ability some day

to own a crop stock. it is a commodity that's not that interesting in terms of anything proprietary or anything like that. >> so it's slightly different than the kind of euphoric type of moves >> it has been there for a while. i do think it distinguishes it for a while. the market is very receptive to anything that looks like it has a -- >> do you have con stilllation brands >> i don't i would probably look at something like that. i think these are so volatile. while i do think long term there is a lot of opportunity i do think it will take a long time to really get focused and to really get market share in this. >> we have breaking news right now on tesla david is stepping in with details. >> yeah. we are confirm the sec is going to bring charges and sue both

tesla and musk for fraud this is based of course on the infamous tweet of some time back now in which he discussed the possibility of taking the company private and said that he had funding for potential go private secured. our understanding at this point is of the angst that will be coming shortly we are waiting the complaint is it will involve false statements that were made to manipulate the stock from a corporate officer knowingly entering into that tweet with the interest of driving up the stock at least is what the argument would seem to be based ton fraud claim and market manipulation. don't have a lot more for you at this point at least based on the evidence we are in the process of accessing the complaint itself we are expecting to hear from officials at the sec in the not

too distant future to explain why they moved two charge mr. musk it is a fairly serious moment for the company. as you perhaps know some times there are various contracts the companies can be involved in whether it is debt or others again, they have to prove this in a court of law. it is a civil charge but it is certainly a serious one for th company. the effort to take tesla was fairly quickly abandoned by mr. musk we all know that and it is certainly expected that the company is going to defend his behavior in a number of different ways in terms of saying that in fact he did have a lot of conversations with the investment fund of saudi arabia and that his statements were true and accurate as he knew

them at that point as a result of conversations he had had and meetings that he had at that point as well with people he believed were decision makers and say they would be behind and be prepared to take the company private. typically just to remind people, but the sec does give you an opportunity. they sort of give you that opportunity to submit reasons why they should not bring the action and in this case they decided to they do now have the complaint in front of me again, as we said, it involves a series of what the sec says are false statements it is regarding taking the company private. his statements as we all know say that the sec indicated that

should he choose it was certain he could take tesla private. we all know what the number was at the time over the current stock price. they go on the say by engaging that conduct and will violate again section 10b. they bring this action pursuant to 21d to join the transactions, practices and course of business alleged in the complaint i'm reading through here as quickly as i can to get to some of the key things. they point out over 22 million people followed musk on twitter. tweets were publicly available with to anyone with internet access and go onto point out his statements regarding short sellers and his complaints about them being unfairly targeted by

short sellers and predicting that the short sellers would be burned, and this is in quotes, are perhaps an dpafrpexample ofi was in his interest to try to drive the stock price up again with what they were saying are false and misleading statements. so we have more to do here in terms of reading

it was not necessarily what we view as a typical go private it involved raising some $30 billion in equity, having 20 billion rolled over from existing investors and mr. musk rolling in his20 billion

the sec would saw no, he did it with the purpose of try to go ma nip late the stock and that is fraud. >> let's get reaction from phil who is ready join us as well what's your take on this she asked the question, how surprised willshareholders be

think the biggest question that investors are asking themselves right now in terms of okay, nts immediate future things may not change. >> the only defendant named on the docket is musk it's not the docket itself is that a sort of upsetting factor >> potentially it does show there was this camp out there. it says if you take this.

>> tesla down 5.5% on this news. you're not an owner. >> no. the reason stock has fallen is because of lack of confidence. i can tell you as an investor one of the most important things that i view when analyzing a company is the management team it has been an unstable situation for quite some time you don't tweet it

i think if you get a new leadership gown the road i think the stock actually rallies >> what's the worst case scenario for investors >> worst case scenario is there is some judgment againsthim. >> come back an give us your latest thoughts. sec saying musk knew or was wreckless. it's a pretty clear suggestion that he was very much in the

wrong. >> we have been discussing the fact that this is a civil suit that musk is the person named in it, not the company itself >> i think it is highly significant because it deals with a ceo that apparently went outside bounds of pro pryty and may have acted more to influence stock price than to inform investors. that is not permissible under the securities laws. >> but how are they going to be able to prove that in other words he had come out afterwards and said he had been having discussions and maybe there was more there is that what this is going to

come down to whether there was a deal on the table that he had been discussing with his investors? >> no. i think what it comes down to is that he said financing for this proposed transaction had been quote secured closed quote secured in that context meant that there was a legal right basically to call upon the financing should the transaction go forward he subsequently made it clear that he had no such agreement but he had merely had conversations in the interim of stock price gyrated like a roller coaster and created severe problems forinvestors.

a lot of talented people there is there somebody with the same vision that musk has if he is no longer running this company? there is no response yet from tesla. we have reached out and no indication musk plans to step aside. i understand that is a hypothetical at this point it was something that stephanie said and it jumped out at me i thought no he is the secret sauce

he is the dna of tesla. >> it was my understanding that the company was expecting that the sec would bring an action against tesla and musk we must say that at this point the complaint is only against musk it is a very important point to make here because earlier i was talking about fraud claims and the impact they can have on various contracts. if tesla has been spared a charge of fraud from the sec

that's certainly an important and positive investment you can view it for the company. sources close to the company indicate the expectation was that in fact the action would be brought against tesla and musk but important once we got to complaint in front of us it does appear right now mr. musk is the only defendant from the sec. we want to clarify that. >> is harvey with us >> yes >> so what is the significance that he is named and the company is not >> i think it is relatively minimal and limited. the main actor in all of this was mr. musk if the sec were going to allege charges against tesla it would make perfect sense to first bring a lawsuit against mr.

musk, establish how he acted and that his actions were a violation ofsecurities laws what happens if the company decides to fight it? worst possible outcome tell us what you know. >> well, i think the time frame is not going to be immediate i think a lot in terms of the investors will -- and what advice they should heed, is basically to watch very

carefully if he remains in charge of the company. i think it will minimize at least in the short term some of the impact of all of this action but as the case comes out, as the sec presents its evidence which i think is a process that can take, you know, up to six months here, there may be motions to dismiss and alike the case will go to discovery. as the sec releasesevidence.

>> he can face a number of punishments. he can -- and this is hypothetical >> yes >> continue. >> yeah. he can be from future violations he can have fines imposed againsthim.

if criminal charges are brought and they are brought against musk he could face jail time as well as additional fines >> lots of ifs there it could also impact spacex as well >> let's sort of summarize all we know at this moment >> yeah. i think it is important to put things in perspective again

as an officer of a public company. the sec filing claims that he knew or was reckless and not knowing his statements were false and isleading. >> we all know stock responded at a cig in i have cant move up at the time. they go ton say that the statements were premised on a long series of what they call baseless assumptions and were contrary to facts that musk

knew there is a back and forth and the sec prior to when the sec brings an action i can share with you at least some of their responses to the sec prior of course to this action today mr. musk did in the approach that he had no intention of increasing ownership of th company. he had no intention of cashing out. he had no motivation at all. he wanted existing shareholders to remain with the company if that were possible and they wanted to do so all of which is pointing out of course that in fact he was not try to go manipulate the stock in any way shape or form to benefit hips.

on this charge ofwrecklessness they will be fighting back here on a number of fronts as we move ahead. but certainly want today give people some sense as to where tesla will be coming from in defense on those days. >> and as you speak the stock is going south, david it is down almost 10% here after hours. recapping the tesla news

let's bring back phil who has covered the company for more reaction here on the specific allegations from thesec. unless they are so widely above expectations to an extent this is locked in on the open side by these questions about what happens with musk's future at tesla. until it is resolve think a lot of people will say there are great things that might be happening here is he going to be the ceo a year from now is tesla going to face further

lawsuits whether class action or individual because of everything that's been involved in this i think that's the interesting thing to watch for investors from here orward >> i think this may be a positive force for change at the company. we have been advocating he has a different role and different visionary role i think it is an opportunity that this may pave the way for some of that i also believe that it is unlikely that he will be removed. i understand that that's what investors are jumping to that

conclusion i think it plays into the difficulty that tesla is having. i think it's understandable the immediate reaction i believe that it is going to cause this to be for probably the next three months. i'm optimistic it will be a force of some positive change at the company. >> that sounds like a remarkably positive spin on what is unquestionably a negative headline if it was taken would we be moving a lot lower when that day

comes? >> i think it would be the stock would go lower i also want to be very clear i think this is negative that will cause the stock to be raised i think there are positive results coming for the september quarter. that gets muted with all of this i don't think that in a non-board role, noninvestor facing role, i think it would be a positive for him personally. i think it wouk a positive for the company. i think it would allow him to focus on what is best. he can do that without having a spot on their board other an investor facing role so understand why my view would be viewed as aggressively glass

half fall but i think in fact that is -- this could be a great catalyst for change at the company. >> it is sort of what you were saying >> absolutely. this company hasn't been able to consistently execute so there's that, right you all of this drama and all of this uncertainty and lack of

confidence how much is a preep yum right now? we don't know. >> way back in, how long is this likely to take before we get definitive decisions on guilt and then punishments >> i think unless there is a settlement which we should not discount as a possibility, and i can explain that in a moment f you wish, but unless there's a settlement i think we are looking at a minimum of at least six months and perhaps up to a year if the department of justice is actively investigating they may

well intervene in the sec action to preclude discovery while the criminal investigation continues. so unless the case is settled we are looking at i would say a minimum of six months to a year. the case could be settled because what's most important is that he continue as a predominant guiding figure of tesla. as a result, if he can extra kate himself from this litigation and do so while preserving the pablt to guide tesla it might well be seen in his interest to basically settle the sec's charges. he may try not to admit or deny them and then go back to his principal job of providing

guidance to t eric sla as it moves forward. the fact that he has gone after them so many times and if the allegation was he put this out there to burn them it might have been the biggest gift ever with stock way off of those highs >> oh,yeah so you're right. there is a long long tweet trail

at a minimum and then other comments that likely have come during analyst calls where he has made it clear that he is not a fan of the shorts. obviously the argument that you will hear from musk's legal team as well as from tesla is there's a big difference between not liking short sellers and trying to commit fraud so that you can burn the short sellers that's -- it will be interesting to see what the sec is alleging, if they can prove this or as he mentioned, do we see some type of a settlement at some point. >> we are going to have a press conference from the sec.

oh look at that. it is on what is only mr. musk and not the company. it did appear likely it would be against tesla and mr. musk the action as far as we are aware is solely against mr. musk so they will be explaining the thinking behind that, perhaps as soon as 5:00 is when it is scheduled for. we want today let you know also interesting that in some of the back and forth between mr. musk and his attorneys and the sec try to go discourage them from bringing the action the company did make a point of saying as the driving force behind the company, behind its technology and man that keeps sort of investors believing in the stock that investors in tesla would suffer certain injury if the he were charged as

has been the case now. they go onto sort of the indicate that is case is not a fraud case as we often think about them against the company that has been cooking its books and therefore that causes the market value to correct based on new information that the earnings we relied on was correct. the company would say you're going to ent all of these who believe in him because he is so essential to the future of the company. they will be heard even though it had abchutely nothing to do with the fundamentals of the company that is at issue here. sort of an interesting choice by the sec

they referenced that he learned about 420 in marijuana culture and thought his girlfriend would find it funny which is not a great reason to pick a price >> right >> there's so much in there. >> right and the company would tell you he is simply -- he went up 20% as a premium and that got him to 419 and he figured it doesn't sound like a great number. i will go a buck higher to 420 i'm curious where the sec gets that con sengs that it was about marijuana. >> we do say the 20% premium and then they say it ruled in 419 and then he rounded up on the marijuana reference. >> we have a great pnl with us

first of all, david, stick with us phil has a question directly for you. >> as i recall they do typically prove to bar the offending offender as a director and officer of acompany.

>> sit not a criminal case there may be one that the ausa but that's all we have right now is this civil case they would be barred if they were to succeed in acting as an officer of republic company. >> and also a moving stock let's bring in collin rush on the phone. we are down 10.4%. does that seem reasonable to you or do you think as others have said that it could be a catalyst for change of leadership that's been needed for some time? >> certainly we think there's ban need for additional leadership you know, you still have to look for analogies in terms of other companies that have had iconic leaders step to the side and what happens to those stocks we think that's a real

possibility here you know, apple is an obvious candidate. you no, i, as we look at this we upgraded the stock based on model 3 production reaching a point where they can generate cash flow. we think it may be you know, the obvious evolution for organization we wouldn't be surprised to see musk settle this fairly quickly. i think, you know, he probably does want to stay involved in the company in an active way and will try to do that and certainly could afford, you know, what could be a modest fine you know, i think the doj case is another story duo think he will move fairly quickly to try to settle this. >> you pointed out it has been lower. >> three weeks ago

right. so after the kind of buy out story played out it really points out that the stock moves and then a little bit of dispair based on the latest kind of data points so not to say that the market is takes a sober view and deciding what it is all about this is a stock that basically priced in so much for so much in the future it's not about today's business that it can swing widely around that >> but it needs access to capital. >> sure. but i'm saying it's not the right price but basically it is not the market saying game over. >> come back in and on date us on your thoughts.

>> it is highly unlikely it hasn't been litigated yet i would put less than a 5% chance that it is outright removed from tesla if it is a different role that doesn't have investor related to it i think it would be a positive i understand the emotion of a press conference and the significance of this i rather suspect that it will get settled in the next year and be a non-event >> it sounds like you're sticking with a bullish call as well your price target of i think 385 for the stock. do you think access to capital will be an issue >> i think it depends what it will look like when they report

based on what we are hearing and seeing it looks like it will generate at least close to that if not better than that. if those numbers come through i do think it works from here as folks ta folks start to expect a settlement separate from the company which would on a financial basis lead them -- tlooef company pretty well in tact we'll stick with that call and wait for those numbers we are still expecting bullish results here going into next week with delivery numbers >> your take in terms of -- you mentioned it could be a positive catalyst if it blows out the production numbers next week or earnings after that could it rally or is this a hold in the short term? >> i think it is a -- could it rally? sure it certainly could i think it's too much of an overhang we don't know what the structure will look like

we don't know if he will be around or in what capacity he is around i think loss of confidence takes a long time to rebuild >> if you look at some of the facts that are being presented here they really think he is freelancing. >>yeah he mentioned it would be settled and there might be a relatively small fine perhaps for elon

musk given that people could have bought the stock following his 420 tweet might he be on the hook to refund people for their losses or is that not really at play here? >> he could be it certainly it certainly will have an impact on the fines i think it's premature at this juncture to try and guess whether the settlement could be stringe stringent or not it does seem to me that musk's principal goals will be to extricate himself from the potential ban on being a principal officer or director of a public company and if the s.e.c. believes there is a basis for accepting that then i think the other elements of the case, the kinds of

injunctions and fines, will become more stringent as his bar becomes less stringent or non-existent it's a tradeoff to some extent but it will also depend on what the s.e.c. thinks will ultimately serve the interests of investors i just don't think we can assume that it's going to be a slap on the wrist or a minimal penalty i think these are serious allegations. i think the timing with which they were brought is incredible and demonstrate the s.e.c.'s resolve as well as its confidence in the case it has. this is very fast action i think the complaint given everything is exceedingly well drafte >> if you are just joining us,

the securities and exchange commission has just filed a suit suing tesla founder and ceo elon musk for securities fraud, charging that he misled shareholders back on august seventh when he said funding was secured for a buyout of taking tesla private. the stock is down almost 10% in the after hours. we are awaiting a news conference from the s.e.c. authorities in washington. at the top of the hour just a few moments from now we'll get more information as we all sort of go through the complaint, all of the ails there is a lot of detail as harvey pitt just said they put it together quickly and any will take questions. >> they did. the stock is down 10%. we have her comments from bulls thinking it could be a positive catalyst allowing the stock price to recover let's bring in gabe hoffman, she is short the stock gabe, your reaction to this down 10% or so since the news hit at the top of the hour. >> it's still my hedge fund's

largest short. i have not covered a single hair this is a kmgtsist i told you would happen august 7th when i came on the stock was 380. i told you the s.e.c. would do this they have moved with us precedented speed against musk there is no investment bank on wall street will raise money for a company that has potentially billions of dollars of private liability against longs and shorts, a ceo who is about to go out for accounting fraud and financials which are an absolute disaster. >> well, that man always has been the short case on the financials front the question is what does this suit by the s.e.c. mean for tesla, for the business and whether --you know some of the analysts have come on the show and said this is a catalyst for positive change. he shouldn't be chairman of the board. he shouldn't be having so much control. he should be the vision guy. >> and when you start valuing tesla as a business, that is a massively negative catalyst rather than the cult stock it is

now with elon musk at the many helm the bond market is always smarter than the stock market. the bond market with the bonds at 8% and i'm sure will tank tomorrow they tell you that tesla is not worth $50 billion. not even worth $10 billion of market cap they can't pay suppliers elon muchk is still telling lies trying to get cars out the door at the last minute of the quarter. i believe this company is about to go into a tail spin and elon musk is potentially facing a margin call on his $800 million of loans that he has with investment banks with stocks pledged again it dwolen hutch has a price argument of 35 with a buy rating to tesla, respond. >> i think he has a valid point around the investment banks not being able to raise money with in overhang. and i think the board will move fairly quickly to evaluate the options. you know, like i said earlier we think musk is moving as quickly as he can to try and settle this

in a very reasonable way for himself obviously. but mostly for the platform because i do think that, you know, his wealths being wrapped up in the platform is critically important to him but also having him out of the way and having him, you know, not be an impediment to the company moving forward i think is critically important. you know, i would potentially disagree with the valuation comments you know, in terms of the potential for in platform to generate an awful lot of cash flow, you know, as it implements some fiscal discipline around growth and incremental operating margins we think there is capital that is bullish on this name and will continue to buy the name even with the overhang hanging around. >> valuation mike. >> yeah, there is. >> you wonder if this thing can be a cap on valuation no matter what happens. >> no doubt about it like i said there is an unknowable but large premium for

the long-term opportunity and elon's stake in it and his evangelicalism we are talking about 6,000 cars a we can it's a trivial number right now. it's all about how they get to in terms of a run rate of mass production and when. >> phil, come back in with thoughts we are going to hear from the s.e.c. with the press conference, one of the key things you will be listening for. >> any response from the company, phil. >> we have not heard, sarah from the company, yet, a formal response more a formal response from elon musk's legal time. i am struck by the word mike used there evangelicalism when you look at those, the biggest tesla fanatics, on social media or you i run into people all the time? northern california who are tesla investors they believe in elon in elon we trust that's why this is so critical, the charge here. this is not just a run of the mill charge. and it's not against the

company. it's against elon musk, which brings up the very question which is the basis forwhy people invest in this company. not all people but a lot of people. they invest because they believe in elon. and that he can take them to the promisedland, whether with electric vehicles, whether it's with taking down the popularity of established auto brands they believe in elon and that's why there is that overhang over the stock. and in terms of the press conference, look, i want to hear just how vocal the s.e.c. is in terms of laying out the charges. david faber has been reading a number of points they made here. and i want to hear from them you can often see the tone of the s.e.c. when they hold the press conferences. and that's what i'm looking for. >> gene munster of loop ventures and join us and pushback and give the view against gabe hoffman's argument moments ago.

>> it's not a car company it's a computer on wheels and that changes the valuation perspective. this is going to be a difficult time, but i think the company will get through and ultimately ride this next wave. >> gene, it's stephanie, i'm curious about the competitive landscape. right now it's all there and not a lot of competition but starting next year you see more in that regard. so, how does that weigh into your recommendation? >> i think the competition is a -- it's kind of a false topic in some ways bus that 1% share of electric vehicles, zero% of autonomous vehicles this is a huge market you can have three or four big winners. i think tesla is one of them >> all right, gene thank you. so stephanie i don't know. you seem like maybe you want to buy the stock. >> no, not at all i have a lot of stocks that i can own and this one is just too

controversial. i'm not afraid of a stock that's controversial taufrl i think there is too many unanswered questions at this point. i do worry about competition and i do worry what kind of multiple you pay as the competition comes into the forefront not to mention all the other stuff. >> and mike, summing up the sentiment we are down 10% at the moment kind of steady at the 10% decline in the hour we have had pass i guess the s.e.c. press conference could change the volume tomorrow morning. >> it can can. it has gone between the low 200s and high 300s the last couple of years. absent the noise it's sentiment driven. you don't know the cash flow needs are going to be. raising capital, you don't know how to put that into the range of probabilities >> well that was an interesting hour, guys >> as if we plan zbld not like we planned at all. big headline thanks to harvey pitt, colin rusch gabe hoffman and stephanie link mike santelli as well as we follow the breaking developments around the s.e.c. suing tesla founder elon musk.

>> the press conference due to start. and melissa lee will continue the coverage of tesla, the s.e.c.'s news conference which as we said starts soon melissa over to you. >> thanks guys so much to cover "fast money" starts right now. marilyn story breaking just the last few minutes s.e.c. sues tesla ceo elon musk for fraud. check out the stock, down by 10.25% in the after hours session. you are looking at a live shock shot the s.e.c. about to hold a news conference in washington, d.c. we bring it live as soon as that gets started meantime we have coverage around david faber and phil le poe at a tesla dealership in california david let's start off with you. >> thank you, melissa. let's set the scene for people at this point so they can understand where we are. about an hour ago we got the news the s.e.c. was charging elon musk with fraud, misleading statements, false statements that led to a move in tesla's stock price that they describe at las