good afternoon, everybody. welcome to "power lunch. i'm tiler mathisen it's good to be back, sort of. it's snowing here. morgan brennan will join me in a moment we'll tell you what the targeting of silver means for the market amc is surging, but can it give the battered-down movie chain a second chance? and we are in the eye of the

spac storm six deals today, including one for the electric vehicle supplier microvast "power lunch" starts right now welcome to "power lunch. i'm morgan brennan we start with a parade of retail investors mike santoli has the story for us a pretty decent bounce the s&p 500 at this point up about half of what it was down last week. the nasdaq leading look at the nasdaq 100 these stocks, they big growth stocks very heavily owned by some of the same hedge funds, they a rough week last week. this is where the buying is happens. that's the spillback

guess what the heavily shorted stocks in general are coming off gamestop, it looks like perhaps you could say the fever has broken it obviously has lost bit of that oomph we also mentioned silver this seems like another area that they are trying to targets. it's up 7% it was up more at the open this is a much bigger market, a futures market, so it's not the same as taking a heavily crowded short in terms of small-cap stocks one thing, though, if we do get a cleaning out of the shorts, it's going to leave a depleted base of bearish bets very, very low short base right now. we'll see if that ends up being a negative in terms of contrarian logic, guys.

>> michael, thank you. stocks are clawing back a bit from last week's very steep losses as the retail frenzy continues, what does it all mean for the market david bailen is with citi pride bank and liz young my dear friend, the late jack boggle said, don't just do something, stand there it sounds like a pretty good advice when you have a week like last week and you're a long-term investor what do you think? >> that's exactly right. everything that went on will have an knecht on the broad market short term. we all realized it seemed pretty easy to affect the market, and of course it will make peet

jittery. we were already vulnerable to a pullback i read something recently that said there was a bubble in the bubble talk. so i think we were fragile in that sense and got a bit of a pullback it wasn't dramatic, broadly speaking, but what you saw was buying opportunity in that pullback, because we're still headed for better things on the other side of this so investors came back in and bought at a better price than they could have before in some other places in the market. david, what is the lesson from last week for retail investors? >> i think the lesson will be learned over the course of the next week when a lot of retail investors take a loss on the positions they took on speculation. the reason they'll have the losses is the companies they ultimately be on did not have fullally good -- that's really just a traders market, for more

sophisticated traders, you can make money, but for retail investors, you can't that's the first lesson. secondly, the information advantage out there is diminished it's certainly possible to take millions of investors just moving $1,000 or $2,000 apiece and change market conditions that lesson for professional investors will be well learned usually we see individual stocks that move that much. in this case we saw 50 stocks that had large moves, tens of billions on the short side and covering for moe that's a lesson of this particular pertain for fundamental investors, this is an anomaly and looked upon as a buying tuned, and that's sort of what i would table you're >> there have been some retay

investors that -- i mean, the way one trader described this was's crowdsourced activist investing. davely offenses trading has more than doubled since 2019. as of this month, small enticers account for about twice as much of the offenses volume as big and mid-sized players. what does that mean for the market moving forward? >> i think they are here to stay i think the risk we're in the middle of right now is some of the retail investors could experience a pretty dramatic loss what i don't want is for them to get disenfranchised with investing. prospect theory would tell you that a loss is twice as painful as a gain is joyful. you have to think about it from that perspective i hope that people don't get disenfranchised with investing and trading. it's one of those things where i

welcome all investors to the market i think every investor, retail, institutional alike, has a right to participate, but has a right to gain or lose. and it is a civic at your own risk game. there could be regulations, but there also will be a conversation going forward about who's responsible for educating younger investors, new investors. is it some of our responsibility in the industry to provide more education? and that's going to be a big debate i don't think we'll see the end of for a while. >> it's very fractionalized right now how you get educated, and sometimes you get burned as part of that education many of us have been david, what should i buy now in the market what about cash levels is now a time to raise cash, if

i haven't? how much cash should i have on end on who will inevitably be at some point a market pullback and buying opportunity >> here's what we're seeing. the ultra-high net worth investors have too much cash right now. cash levels are between 15% and 20% for many clients at the beginning of a new economic cycle where we'll see the impact of a 23458 decline in the coronavirus, as well as an impact of the significant -- we're at the beginning of a cycle where investors should be fully invested and overweight equities right now but there are places in the market where you can get much better value some of the cyclical stocks, certainly markets like mexico, brazil, southeast asia

in europe there's dividend stocks pays 4.5%, so there's a bifur kcated market, and the le your home stocks, which will do well when the pandemic ends, which we think is four to six months ago, we think those stocks can do well we want them more fully invested in the market now. >> david, thank you very much. and hliz, thank you see you soon. robinhood was supposed to be the vehicle to -- and now the company is facing all sides. kate rooney as more on robinhood's situation, even as we see this capital raise again. >> that's right. robinhood's venture capital ventures stepped up to solve at least one big problem for the start-up -- cash it would announced an additional

$2.4 billion on top of a billion they brought in last week, so $3.4 billion for robinhood after restricting trading, robinhood is starting to ease some of those limits on gamestop gamestop at least we just got word they raised the trading limit to 20 shares, up from a single share this morning and last week. still, clients who already own more than 20 shares still can't buy more ceo vlade tenev spoke on the weekend. robinhood said that the capital requirements increased 10x last week, and all piling into the same names, which at least this

would, robinhood is battling criticism from lawmakers, and still a lot of blowback from social media even if some are leaving robinhood, it's estimated they added 600,000 new accounts on friday back to you guys. >> we're going to bring mike back into this discussion. one thing that robinhood is facing heat over is the payment for orders flows, who will basically pay for the opportunity and i think what that data cannen able. mike, to take a closer look at that business model, it's one you have covered and we've had talked about for years now, but perhaps this situation shedding light on what that entails. >> a lot more attention, because it's free to trade, so i guess it creates more focus on exactly how a firm does that it's industry practice, not every firm does it, but most

have vertical integration. what that does is enable a large who willsale market maker, like citadel, a lot of big firms, it allows them to capture of spread between the bid and the ask price. they improve the price slightly, and there's a lot of semantics, but they're trying to make it up on volume. it's not really directional bets, but just making sure you have a steady stream of public orders that's what tends to happen here, in its most basic form >> $3.6 billion in just the last couple days for robinhood, how does it speak to not only the company's ability to potentially still go public, but also how investors are voting their confidence in this name and potentially the value around those order flows, those execution of trades?

>> as far as the ipo, we're hearing that that is on the back burner they had tacked about doing a direct listing which at the time they had -- we still see some support from younger investors who are using robinhood, but i think they're trying to get by i spoke to a source who said it's hour by hour, not even day by day they're allowing some of these volatile names you have sign, and in terms of going forward, it's a matter of making sure they have enough capital, which they have tapped their venture capital investors, and a couple lines from banks they needs to get through the coming months and some of in volatility, you see it in silver today. this is a reality of how young people trade stocks. because robinhood's demographic is younger, they had to deal with the same capital requirements, but a different

demographic of traders this is a unique problem po robinhood. >> guys, thanks for breaking it down for us. all right. still ahead, we will have more on the retail investor fallout, including a red january for hedge funds. and why the bleeding may not be over yesterday. another day, another spac deal in the electric vehicle space. we're going to talk to the president of microvast, which makes batteries for ev vehicles. more "power lunch" is next you downloaded the td ameritrade mobile app so you can quickly check the markets? yeah, actually i'm taking one last look at my dashboard before we board. excellent. and you have thinkorswim mobile- -so i can finish analyzing the risk on this position. you two are all set. have a great flight. thanks. we'll see ya. ah, they're getting so smart. choose the app that fits your investing style.

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again, tillman will be chairman and ceo of the company and over about 60% of the total shares an index of the 50 biggest spacs today, up about higher than 8% this year. morgan >> tyler, thanks it sounds like a deal, another spac announced today we hily had --, an electric vehicle, the deal with an implied equity valuation,

seering almost 30% look at that i'm joined by the executive vice president of microvast, shane smith. thanks for being with us today. >> thank you, morgan for having me >> what does this enable microhave as to do that. >> microvast was found indeed 2006, and then turned thog into a trog -- that's been fob can ied on -- and we focused it on the western countries, to the extent where, hey, we needed capital to expand or product capability -- or manufacturing capability with these product lines, so we could responsible

we're seeing increasing competition, but when we see so many startups going public, and just in that landscape, you see gm as well hoe would you assess the landscape? >> great question -- first of all, wes products that we're shipping in volume so sometimes that is proved differentiating in our road show when we're asked question ing we make our own anode, cath eid, light and separator. those are worth class in and of themselves

but when we integrate those toby, we can make high-program was cells, where it's an expensive asset, and you need it to probably tick outly, our batteries that we may, fast charging, in a very safe application. what's it's like to be making a battery in the center of houston, but two, with the change of administrations railroad expecting a more

favorable subsidy situation to come your way? >> i don't foe yug on the -- if the -- then the return on investment will speak for itself, but it does help when it's anouned tha 645,000 government vehicles need to be electrified. europe has it and we're seeing it in our customers in such a rapid pace of course, china does by being the largest market of today. the fact we're in houston, it's a great place for a headquarters, but being a glob company, that is just a ironic.

>> it just mash you l.a. lap a bit. >> thank you for your time. >> thank you alphabet, amazon, would big aist, coming after the bell toby thshtss neown, but the damage to e or ido we'll look at the hedge fund fallout next

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action has quieted down. the attention turns to silver today. leslie picker, hi. >> spot silver is surging, a byproduct of the recent push on reddit last week the thought being if they pushed up the ishares

ticker, they could force the perform of more silver to meet the demands. there's an element of trying to bring down big banked, now, in reading through the reddit trace, did not some, some in believe who you pushing this trade. now, there's no evidence now exactly who is better hind the silver surge most people on reddit use an alias, but several hedge funds certainly suffered from last week's squeeze and the week before as well melvin capital down 53% for the

month. citadel provided a cash infusion about a week ago citadel's flagship fund down about 3% for the month other funds also nursing some significant losses for the month of january tyler? >> what is the outlook for regulation, not ned of hedge funds. what does your spiedy sense tell you? >> i think that's the number one question i get from a lot of people, you know, where is the s.e.c. on this at this point it's unclear so far they have put out two statements, and they're making sure that the little guy doesn't get hurt here, but you know, it's really different to tell,

because like i mentioned people use aliases for this. it's not easy to trade back who started this thing, to push a stock price higher, whether there's any nefarious activity going on it's a complicated because of the disparate nature of these forums, as well as people don't have to use their real names most people don't use their real names to post comments >> yeah. leslie, thank so much. morgan thanks, tyler. ahead on "power lunch," vaccine roll-out continues to hit roadblocks we'll speak to one doctor who took parts in trials of the j & j vaccine. amc soaring today, as speculators on reddit continue to pour into that stock. now one analyst is downgrading it, saying all this new money could come with a price.

i'm courtney reagan. here is your cnbc covid update at this house. the pace of the vaccination effort continues to pick up.

the cdc says the average is up to 1.3 million a day during the first month of availability, almost two thirds of recipients were women 55% were over 50 years old 60% were white the cdc says as the program expands,ist important to make anyone whoa eligible has an equal opportunity to get vaccinated today dr. fauch irexpressed the importance of getting vaccinated quickly. >> viruses cannot mutate in at the don't replicate. if you stop vac nation widely, you don't give the virus an open playing field, you will not get mutations. the white house team also announced a $230 million government deal to buy at-home

covid test ing kits back over to you, morgan and tyler. we're at the highs of the session now. just a check on the market the s&p is up 1.8%, 3780 is your level there. the dow industrials are up about 1%, 323 points, and the outperformer again is the nasdaq compose i had, so a strong tear to the month of february the oil market is closing for the day, and we turn to josh lipton for the latest. >> morgan, oil prices are finishing higher today with brent and wti up more than 2%. brent is sitting around the $56 barrel market, u.b.s. expecting

$60 by mid 2021. goldman says $65 possibly by july opecs curbs are giving support to the prices, and we're going to end here on natural gas prices, as they point to cold irtemperatures across the company. tyler, back to you thank you very much, sir turning to the latest on the covid vaccine front, according to the cdc, a little more than 31 million vaccine doses have now been administered in the united states, but in an effort to speed up distribution, moderna has asked the fda for permission to fill its vaccine vials with up to five additional doses, fill it to the rim. this comes as the average seven-day hospitalization rate continue to say drop nationally by more than 12%

dr. ray paneteri is a professor of medicine, and also involved in the j & j trials and moderna. let me ask you how helpful you think the j & j vaccine is going to be. on the face of of it, people go, well, the other one 95%, this one 70%, so why would i do it? >> that's a great question we have to look at it this way the j & j vaccine will be another arrow in our quiver. our quiver against the deadly covi cov covid-19 you have to compare it to the flu vaccine. in essence, all of the available vaccines are far more effective

than the flu vaccine, which many of us try to get as soon as possible so i would suggest that everyone get whatever vaccine you can get the quickest also, the j & j vaccine trial showed the ed at least 85% agai most severe aspect of covid-19, the respiratory failure. let me turn to the falling hospitalization rate and what seems to be 9 lowercase count. did we come through the holiday surge and we're now on the other side of that curve or what this. >> that's precisely a part of it we saw the surge with the holidays, and we're on the back side of the shoulder of that curve now. we're reaping some benefits. i think also there's been a greater emphasis, far greatest

emphasis on mask wearing, on personal hygiene, staying away, social distancing. that has a profound effect -- profound effect. so i think those two together are contributing to the drop a warn -- we're still going to see an increase in death rate simp lay because there's a lag, but that death rate will essentially start to decline. >> my hands are continually chapped because of the hand washing and sanitizing i want to go back to the vaccines for a minute. one of the things we've heard from the moderna and pfizer vaccines is some people tend to have a pretty strong reaction to the shots, the side effects. i wonder what the j & j side effects are looking like versus those? >> yeah. we participated in the trial there was in some individuals

low-grade fever, make muscle aches, a bit of a headache salve the dose most vaccines that are effective will generate an immune response that's actually good we want the immunity again the foreign protein. in the cases of pfizer and moderna, the mrna vaccine, you get the initial dose the subsequent one, your body is primed to react to the foreign protein. i personally received the pfizer vaccine, did have a low-grace fever, muscle aches, headaches for a day, and then it passed. >> let me ask you how important it is going to be, doctor, for companies like cvs, walgreens, publix, others to get involved in the distribution. it seems like the logistics and

practicalities of actually delivering the vaccine have been the problem here how much is it going to help when cvs and walgreens and others are able to play a bigger role in vaccine delivery >> well, you know, that's a great question i would focus back on the flu vaccine. remember, flu shots were given by providers, healthcare providers, almost exclusively early on then retail pharmacies stepped up big box stores even stepped up what did we see? a huge increase in the uptake, and people getting shots in their arms so i'm really encouraging -- it's encouraging that retail farm sis would step up and start dosing that means your -- fewer hosts, and that mean less mutating

viruses. >> you know, new jersey, they are largely limited by the availability within counties, and i think -- i mean i got my flu vaccine at the acme store down the street last fall. doctor, we appreciate your ins insight. thank you. and we have a great lineup of guests include alex gorski. you can go to the website and see more info. you can register at cnb cnbc events.com. silver is soaring today by precious metals standards. how could you trade it and all of that next on "power lunch.

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time now for today's power movers, starting with dupont also sets another unit sticksfix downgraded to hold, stifel still likes the stock. despite the downgrade, the form raising its price target and we end with the viela bio. the dial gives horizon viela's

pipeline of drugs in the immunology area. now over to seema mody perhaps 'em more interesting is the moved hitting the higher since march of 12013 is this just hyped, or is there true value in sill her matt, michael boop is, and matt, i'll start with you. what is the best way to play it? >> well, first, i want to take one second to wish my father a happy 91st birthday. you're the best. they track each other closely. i think all investors should be very careful here. you know, the shortage is high,

but it's not extreme also, if you look at the futures traders, you look at the chart on that, it's not -- thee not short at all if anything, they're long. so i really think that investors need to be careful so be very, very careful here. besides they could raise requirements at any time and we need to be careful there. >> if there was one fundamental reason silver should go higher, what do you make of the push for solar energy we know the solar industry does rely on silver. >> i think this trade right now is total speculation the volatility is not worth the risk there is a push to move toward

solar, which you need silver for, i think long term that might be the play, but there's other weighing to play non-correlated assets like market neutral, global macro themes i think that's the best way and necessary way in a portfolio to limit volatility if you want to buy silver, i would buy a watch or coins and put them in a safe the volatility is just not worth it at this point. >> thank you botch we discuss how to navigate a historically weak month, february, follow us on twitter as well. morgan, over to you. let's get a check on the markets. we are at highs of the session here we have the dow up 330 pounds, the s&p up 1.9%. the nasdaq is the big outperformer

amc, meantime, a has been selling tons of new shares to raise plenty of capital. our next guest says that comes with its own problem we'll talk with the analyst who downgraded amc earlier today that's coming up next on "power lunch. >> announcer: and now the latest from tradingnation cnbc.com and a word from our sponsor.

welcome back amc shares surge more than 20% earlier today as the reddit rebellion continues today. mkm downgrading it to sell and giving it a $1 value

here now to explain is the analyst behind the call. eric hander. thank you for joining us $1 price target? shares of amc -- i realize they lost some steam in afternoon trading but still about $14, but why do you think it is going to go down to there. >> the reddit frenzy, the wall street bets have done a great job creating a huge short squeeze on the shares but that's not a sustainable long term strategy when you look at what's happened with the company, in order to survive and create liquidity for itself it has issued -- the number of shares outstanding has quadrupled, essentially diluting sh shareholders value by 75%. they have defer rents to be

addressed at some point. the stock move really has nothing to do with fundamentals. it is all about motion in the short squeeze? i am curious to dig into more because i think it is a key pony not only for amc but other hard hit names and hard hit industries by the pandemic, whether it is airlines or other retail names, et cetera. it is the fact that you have seen these companies take on more debt, issue more stock to raise capital to weather the storm. and it i think raises the question longer term about what that path forward is going to look like when we return to dare i call it, a prepandemic normal. >> you know, when i look at amc, obviously, they have been severely by the fact that there have been no movies released during the covid pandemic and movie theaters are operating in a zero revenue environment there was a time when theaters

were opened but no new block busters coming out and that's hurt them companies like amc are burn being $120 million of cash a month. and they have done a good job of raising fresh capital, but like i said in my report, i think that the cost of that liquidity comes at a severe price. you have severe equity dilution and a balance sheet that has a very large amount of debt. >> do you think we are going to see i guess more deal making, colization mergers, with amc and others in the space in light of this >> what i think is going to happen is i think in the back half of the year we will see the expedition industry get back on track and we are going to see blockbuster films assuming that

infection rates come down and vaccinations happen and we get close to a herd immuni we will get back to a somewhat normalized society we will see a slow and steady ramp during 2021 but i think that companies, rather than looking at cole dags or act wi decisions, they are going to want to shore up their balance sheets, start getting to be cash flow positive and start the deleveraging process i think that's the first, second, and third priorities for all of these exhibition related companies. >> eric, i guess the final question is, can this company last long enough to get to that 2022 turn of the curve or are you saying high debt, zero revenue, and moving maybe a little bit higher, that this is a chapter 11 situation, or a situation where somebody comes

in and referencing back to morgan's question, another company comes and swoops in and buys it, disney? >> i don't see any major movie companies wanting to own theaters private equity, that's always a question there is always private equity on the sidlines for amc, i think they do have enough cash on hand to get to the end of the pandemic. but they are going to reach a point where they have to pay a mountain of interest expense every quarter. their cash flow -- you know, their free cash flow hasn't been enough to really pay down a lot of the debt. so they are still going to be operating in a very tight environment once we get into the post pandemic environment. >> all right eric, thank you for your time and insights today eric handler we appreciate it of mkm. a stealth rally on wall street right now the dow is up -- what is

stealthy about a 313-point gain for the dow? the nasdaq doing even better in percentage terms get real-time insights in your customized view of the market. it's smarter trading technology for smarter trading decisions. fidelity. need better sleep? try nature's bounty sleep 3 a unique tri layer supplement, that calms you helps you fall a sleep faster and stay a sleep longer. great sleep comes naturally with sleep 3 only from nature's bounty

all right, folks, lets take you through where the markets stand. the big winner today is the nasdaq, as you see there, up

more than 2.5%, and morgan, it's really the big tech stocks that are doing it, the nasdaq 100 >> absolutely low right. those are some of the names we saw assaultoff i think the most going into the end of last week as well. amid of everything we have seen with the so-called reddit rebellion and what it's meant in terms of derisking for the hedge funds. these have been popular and long names for many hedge funds not surprising to see them rally today. tie leer, thanks for watching "power lunch," great to do with with you. >> this tv is fun, this business great to be with you thank you morgan and tyler welcome, everyone, to "closing bell." i'm sara eisen here with wilfred frost. as always, stocks bouncing back after a down weed, the dow up more than 300 points stocks ripper higher game stop sitting out the rally. down 25% now as retail frenzy moves to different parts of the

market today it is silver in the cross hairs, up about 8% right