well or not well you know banks have been kind of poor in terms of their numbers but today, you have co-america at the top of the s&p 500. so what is what you want a little bit of give and take. >> so the first of the faangs is out of the way and now it is going to get real interesting. i'll see you tomorrow. that is mike santoli joining us. "fast money" is now. right now on "fast," blown away and then back to other. netflix adding 7 million new subscribers but the ceo is stepping down and earnings posting a key miss the key takeaways coming up. plus as the u.s. grapples with the debt ceiling, we'll explain how the d.c. brinksmanship could create a back door easing of the fed poll ty tools. and later a face-off one advertising ceo seeing a comeback while an early investor said not so fast the next 12 months could be tough. who has the right read

i'm melissa lee we're live on the desk tonight, guy and steve and bonawyn and -- >> we're missing earnings in a big way plus a shake-up in the c suite. here to take us inside of the numbers, julia boorstin. >> hey, melissa. that is right, a big subscriber beat that is what is driving netflix shares higher. they added 7.66 million new paid subscribers. that compared to the 4.5 million that netflix guided to now revenue was pretty much in line with expectations and while operating margins topped expectations, earnings per share did come in substantially lower than estimated. that was in part due to a noncash unrealized lost related to euro based debt in terms of guidance, for the first quarter it was light and they no longer provide subscriber guidance. the company does say that they

project modest positive pay net ads in the first quarter netflix did not reveal any specific numbers about its ad supporting tier which launched but they are so pleased so far saying we believe branded television ardsi advertising is substantial revenue and profit opportunity for netflix. they also say that they plan to roll out their crackdown on password sharing more broadly in the first quarter. writing in the letter to shareholders, quote, as borrower households begin to activate their own stand-alone accounts and extra member accounts are added, we expect to see improved overall revenue which is our goal with plan and pricing changes. the company announcing that they do expect to resume the share buyback program sometime this year we'll be hearing more from netflix's new co-ceo, former product chief greg peters on the call but melissa, he has been talking on the call last couple of quarters >> julia, could we triangulate based on the numbers that we do

have about what sorts of the quality of the subscribers they added in the quarter >> well, we are going to be digging into that. i'm sure when the analysts go through the numbers here and i would just go and look at the average revenue per user, but i think what is key here is that -- is that the earnings disappointment was not because of a margin issue. so that is key and i don't think we have the full impact of the crackdown on password sharing even in markets where they've done it, they haven't rolled it out to all markets. and one thing that is important as consumers trade down, if you say i don't want to be paying the full amount for ad free. i want to pay less and watch ads. those users will be incremental. so they are not losing money if people trade down to the lower cost ad supported services but looking at the revenue growth here and the fact that the revenue forecast is pretty much in line with expectations they seem bullish about margins

but the stock is up about 6.5%. >> thank you. guy, your take on the quarter. >> 7.5 and 7.6 is much higher than i think the 4.6 the street is looking for if that is your only metric, it is a great quarter there are other metrics and one of them is valuation so i don't know what happened on the eps side, i'm not crazy about that b but the guide is not great and it probably trends up to 340 and you pull the rip cord when it gets there. here we are at 340 i don't think there is all that much left in the tank. that is not to say go out and short netflix with two hands i think you do a back and fill here and i think this quarter was good, not good enough to in my mind compensate for the valuations that are probably in line, might be rich compared to the broader market i think you sell it on this bounce. >> that subs was a stunning number something they have not done since the beginning of the pandemic in terms of ads. >> almost as stunning as the sub

pullbacks that we saw a year ago that knocked the stock and we know what happened to the stock. and the things that i heard that were the most interesting were a sustained free cash flow going forward and resuming return of the buyback. this is a company that among the streaming peers is the only one that is actually profitable. it is the only one that is generating free cash flow and for netflix for a while that was the big issue too. big debt load and big dynamic and content spend but for streamers there is no way out, there is a way out here and i do think that they've shown that tonight. >> you're right. they are the only one that is profitable and unlike guy, i'm going to go a little bit crazy about the earnings here and the numbers because ultimately we're talking this up to a one-off ch charge and when the dollar is strong you can't say that is because of dollar denominated debt and revenues overseas and now that is a head wind you

can't say that it doesn't work in your favor. so for me, you have to take the good with the bad in terms of the fx there and then i don't know what i'm supposed to be focused on. on sub growth, which they have removed. >> no, because they're not going to get it. >> well then i don't see what all the hoopla is about, right if you look at revenue and earnings, they are in line and they are profitable. but if wur supposed to be taking our eye off the subscriber growth paul and move to the revenue and profitability ball, i think that ball is a lot smaller than that sub zbgrowth number. >> it is very ironic. >> it is great that they have this great number. but too bad, folks, you won't hear that number again from this day forward. steve grasso, in terms of guidance >> so the problem is that is what is going to add to the level of volatility that you're going to get on days where they report and when you look at the stock, after the report, the volatility we saw, that is what you're

going to see going forward if they don't give us any reports because to bonawyn's take on this, people and investors and institutions don't care about anything as guy said, he didn't want to drill down because investors care about one thing, sub growth could they continue to invest and to grow subscribers. that is it right now now the trade, if you look at it, if you see the gap act from april on earnings, the stock gap down dramatically. in order to close that gap it has to trade at 351 and change it tried to close that gap post earnings, melissa, so it leads me to believe there is a little more in the tank to climb that level back to the 350 area we're shocked that reed is gone. and he's not really gone he's the executive chair so he's still there. i think people have to digest the fact that he is still there and you'll see that back up to

the 340, 350 era still left in the tank. >> we were talking in the green room where we get our makeup done. >> yes. >> before the show and you paused and -- >> i didn't pause at anything. ip said to myself, where could reed hastings go what media company is looking for a ceo soon in the next few years? >> why did you have to highlight that we get makeup every night. >> why do you think we look so good. >> you guys get makeup >> you want to look good when the walk through the door of the nasdaq. >> in a perfect world, don't you think that a succession plan for disney over the course of the next couple of years, reed hastings is a perfect person to fill that role and number one, and on the show, i know we could say it because we did it for years when netflix was a mere percentage of what it is now disney should have bought it. >> should have bought netflix. >> if you can't buy it, next best thing you could do is bring in a reed hastings who is probably the best suited person on the planet to take disney to the next level. >> all right

for more on all of this, let's bring in rich greenfield of light shed partners who has been lurking in the background listening to our conversation. shaking his head and disagreeing with most of -- why is that? what do you take issue with? >> well i could not disagree more with the commentary that subscriber growth is the driving factor here. the reality is when you move to advertising, there is a huge opportunity to bring on new revenue streams and to ramp advertising and, remember, they're moving toward telling people, hey, if you've been sharing your account, with your daughter, who lives someplace in another state, or with a friend who lives across the country, you're going to either have to start paying more for than person or they have to get their oeb account and it is going to put more focus of the company on investor wise on revenue growth and i think if there was anything that you could point to in this print, it was the guidance of only 8% revenue growth organically in q1

i think that is a very conservative number. they just exceeded expectations on revenue but i do that i that 8% will prove low and you'll see that 8% move into the upper teens if not 20% as the year progresses so the real number is can they get back to high teens revenue growth, that is what investors are going to care about, less so on subscribers specifically. >> i think that just to clarify the points that we're trying to make on the desk, maybe we didn't make them very clearly and that is entirely possible, is that it seems like investors in the after-hours session are very excited about the magnitude of the subscriber additions. and we're just saying that it is too bad that this is happening at a time when netflix is trying to tell investors that that is not the metric to focus on an it is the metrics of profit and revenue to focus on and not sub growth at a time when subscriber growth, the cover was knocked off the ball this quarter, rich. do you adisagree with that

rich is frozen >> well he was speechless at this whole thing but getting back to a double-digit percentage revenue growth, so, what would netflix -- what is the expectation? netflix is a value stock or it is a growth stock? >> well it is probably neither right now. and in its own point it looked like a broken stock. but if i think about netflix, let's acknowledge they are the largest player let's acknowledge that streaming will consolidate and they're going to be a consolidator and let's acknowledge they're profitable i think you look at it from a value perspective and i will go back to the fact they don't want you to focus on sub growth, because it makes sense it is like when we talk about software companies, what multiple of sales are they if i'm a streaming company, it is really just, it is been only about subs and to some extent disney was over-rewarded in

terms of the rapid sub growth and depending on how you're counting hulu and their empire, i think they have too much credit. >> rich is back, i'm told. let' bring you back in >> look, the thing i would think about is the $3 billion of free cash flow. there were so many investors and media executives who said netflix is never going to make money. they never -- this is a business that will never work streaming is a bad business. we've heard that so many times and you've seen media companies that are rushing to get to profitability and they don't know how to do it so they're cutting marketing and spend and they'respending $17 billion a year on couldn'ntent and generae $3 billion, up 100% year-over-year so i think the real thing to think about as everyone looks at what netflix from here, what does this mean for rest of the sector do you think the peacock and the

paramount plus and the habbo ma will it give netflix more of an advantage in '23 and '24. >> the street was looking for negative $160 million and it came in to your point at 332 that is incredible against a quarter that the metrics, i mean, i'mbrightt buls people who watch this show has come to learn, but the math doesn't make sense to me. >> but remember as you start to regrow revenue and as it starts to grow double-digits or more and you're starting to, again, at $17 billion of content, you can't keep spending. they create so much content that you don't need as much more incremental, especially if others are scaling back. and i think that investors have not focused enough on is the legacy media industry is going to start scaling back how aggressive they are on streaming as they rush to profitability. you've heard it from bob iger and david zazlov, that is going

to mean less marketing spend from netflix on a relative basis. the end result, though, is tremendous free cash flow over the next few years and that is something that no one was expecting for netflix. >> so, rich, does that underscore, does that show that there is a way to profitability for the legacy media companies that have entered streaming more recently, this netflix quarter orks does this tell thaem that netflix was so much in the lead it was a competition that they cannot win >> can you hear me >> okay. we're obviously having many gremlin issues with rich we'll thank rich at this point thank you, rich greenfield of life shed partners what do you think? does this make disney look better or worse? >> i think it makes them all look worse when you drill down into profitability and then you look at user engagement and how long the actual users are engaged

with the -- with the interface, right. and you look at netflix and it is multiples of what others are, what speaks to its ability to kind of drive revenue. so i'm with tim, that you will see consolidation. with that said, i will kind of circle back here and say i still think that the focus should not be on subscriber growth. it should be on churn and profitability. and with those things abated i think that speaks too where the others have to make up ground. >> steve >> yeah, i agree with that 100% and i agree with what you had said, melissa, to rich i agree it should be about fund fundamentals it is not. it is about sub growth and that is why we see the stock up post earnings i think they'll get a pass tim brought up a good point. this is a company that people thought would be written off it is not after this print so it is getting a second look, a third look, a fourth look. i think there is probably aly bit of a balance i own the stock below 300. i sold it yesterday. i'm not going to be buying it

back right now i want to have a clear, defined direction. >> we'll keep track of netflix in the after hours still holding on to the 6.5% gain. we have a news alert in the crypto space kate rooney has the latest details. >> so this time the s.e.c. is taking on platform nexto, it is the agency's latest crypt owen forcement, the s.e.c. charged them with failing to register the lending product. it was an interest bearing consumer product that let people tender crypto in return for yield. nexto agreed to pay $45 million in penalties to the s.e.c. and state regulators without denying the finding and also agreed to a cease and desist order as cc chairman gary gensler said in a statement that compliance with our time-tested public policies century a choice as he put it where crypto companies will not comply we'll continue to follow the 23facts and law to

hold them accountable. last week they charged genesis and gemini for a similar interest bearing product and in the wake of the ftx collapse, the s.e.c. has come under pressure for not imposing some of the these safeguards earlier. back to you. >> it is great they're cracking down now, kate it is just stunning, right now they have a cookie-cutter where they're going to enforce against all of the companies that have offered to for people to lend out their crypto and earning some yield. >> like the untouchables a little bit. >> i like what you did there. >> you have the fbi. and i think there is a theme to this, by the way, folks. i think one of the big issues is what are securities and what are not. where do you get additional regulatory framework involved and i think we'll see. but it is a little ironic that there has been a lot of money lost and this is when we're starting to tap people on the wrist. >> i doen't think it is

necessarily and when the ftx came out, they're bad operators. nefarious things going on. but that is not an indictment of bitcoin. >> right. >> and bitcoin in the last week or so -- >> it traded like a champ. >> i don't think it is coincidental of what is going on in japan that is for a more wonky show than we exhibit at 5:00 here monday through friday. prices and vols an the strength of consumer and more on that straight ahead. and plus analysts eye ibm and the traders are breaking down those calls when "fast money" returns back in two. i'm so glad we did this. i'm so glad we did this. i'm so glad we did this. i'm so... ...glad we did this.

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guy. >> well this would be the water world in terms of -- well in terms of kevin costner movies. >> disasters. >> they have to relate to a kevin costner movie. >> why were you giving it away people were supposed to figure that out. >> or be like me and have no idea how is it like that -- >> it is a miserable guide now they're going -- now margins are going to be a problem. that sales growth was -- it was awful. and in a season why they should be knocking it i get it but that is the wrong season to be buying the stock. i think it will continue to go lower from here. >> it is the same song and it is a valuation trap and it is the propensive to spend at the ability to spend the consumer along with leverage, right and we're seeing savings draw downs. i think that this is pretty much what we've heard across the board. and when you see companies like lulu and nike saying it is trickling down. >> and when you think about

these numbers you have to think inventory is building and then once you carry that into the new year how difficult is it to get rid of it. >> the inventory issue is think is let's throw it out of the door and that is just a big problem for margins and if you think about the strength of macy's and nordstrom, they haven't been overly promotional and their dtc business is growing. i like macy's and the valuation. i like the fact that you'll get a chance to buy it lower here and they could change that business model. >> proctor and gamble reported declines in prrevenue and profit look at that up 10% this is this quarter alone up 10%. on goods, grasso >> yeah. it is not a winning recipe you have to keep raising costs to cover your gaps or to make up your margins

we're going into a slowdown. whether it is a deep soft or a hard slowdown, who knows what the reaegs bottoms out at. but the recipe for proctor does not seem like it is going to come out with anything great it was a darling right out of the pandemic and it seems to have lost the luster recently. i would stay away from the stock right now, . >> the commentary around the pricing is interesting consumers have working down the inventory within their own pantries and being more careful about using items like paper towels so people are conserving instead of guy using five paper towels, use one if you can. >> we're going somewhere else with that. i'm glad you decided not to -- >> it said paper towels and other paper products. >> it means they could no longer past their costs on and that is what we've been talking about for a while. prices will continue to rise volume sales will go down. at 23 times next year's numbers and in this environment, proctor and gamble is too expensive. >> and the message in the bottle

on this is that other staple companies will be hit the same way. and a little trade school on this the whole concept of price elasticity, this is one of the misnomers. i thought it was the opposite. if something is elastic, there is give to it. >> but at some point it snaps. >> and then it snaps so again the elasticity here has worsened and that is the case 17 point spread between 6% contraction in sales, 10% rise in their top line. they haven't had this kind of sales drop in years on top of a 10% sales rise this is a bad number and again staples have been defensive. i don't think you're chasing them here. >> here is what is coming up next. blue chip, check can big blue add this color to your portfolio plus, debt ceiling drama the threat of default looming. and that could have big implications for the fed's tightening plans the details ahead. you're watching "fast

money," live from the nasdaq market site in times square. we're back right after this.

welcome back to "fast money. call of the day on ibm shares closing well off the highs of the session though still maintaining a gain. they show market performance saying the company should benefit from strong demand for i.t. services in 2023. shares up 7% in the last year, well outperforming the i.t. peers as well as the broader market they specifically said the turnaround is here it is paying off, tim. did you buy that >> well, it is all relative. and i think if you think about

what the company is actually promised and what they've delivered on, they've been pretty successful in matching the two. the red hot acquisition seemed very expensive and late. it was very strong acquisition but i think that is an area that becomes a lot more commodity one of the upgrades is the expectation of weakness on free cash flow may be over done or reflected in the price i think for a company outperforming on a really bad tape because they had underperformed the s&p by probably 150% over the previous four years is not a reason to go out and buy this it is not a reason to go out and buy a mega cap tech company which is qualifies as where if anything there is retrenchment. >> do you like ibm. >> i do. if you see the chart, the stock has been hugging the 50-day moving average the stock is lower than that the call is not that impressive to me because i believe they have a price target of $140 which is where it is trading

right now, i think that ibm has an extreme opportunity to make quantum computing what aws was so if they leverage those relationships and with corporations, i think they move much higher from here. but definitely a legacy play company. >> this is where you could wonk out because on the 18th, morgan stanley down fwgraded ibm and moffett nathanson upgraded to 140 price target. so i mean valuation you could make a case. tim is right do you hear that it is like the sirens. >> we're in times square >> you've never heard a siren before. >> it just seemed louder this time than it typically does. at any rate. they report next week, i would be more inclined to wait because earnings for them are typically disastrous >> i don't think this is much of a bullish call, it is a relative

value play and they're outperforming in a down tape if we look at revenue growth or free cash flow, it is been declining for the better part of the last decade. you have to go back to when they were filming bodyguard to see those numbers where they are right now. >> what a great place or when taco was roaming the prairie. >> but can he don't did that that. >> but we did. all right. we're going to break now coming up, the debt ceiling drama unfolding in d.c so could the default dampen the moves by the federal reserve more on that next. and get ready for a zucker punch. the battle over meta's next move two big names sounding off in the future who should you believe the details ahead.

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welcome back to "fast money. markets closing out the day in the red with the dow dropping more than 250 points it is third straight day of losses

the drop erasing the index games for the year and the s&p and nasdaq closing out lower on pace to end two week winning streaks industr industrial stocks posting the lowest close in over two months but there were a couple of bright spots energy and communication and health care all managed gains at the end of the day. what do we make of the action. we heard from lyle brainerd, the last official before the blackout starts on saturday. guy? >> well they're staying the course >> no matter what. no matter what the progress they are making on inflation. >> and the market chose not to listen for a while i think the market is starting to listen now. but forget about lyle brainerd, we're seeing layoffs in a number of different sectors what does that mean, slowing economy. slowing economy manifesting itself in lower rates. not supportive of current valuations so to me this makes perfect sense. >> it was just a matter of time.

i didn't understand the rally. it seepmed to get the hard up ad to the right and despite what fed officials have come out and said time and time again so i think you need a bit of eye retracement back to a level where we could rally but not on the back of expecting looser monetary policy. it would be because of a surprise of earnings to the upside which is what i think is the underlying issue. >> i would say it was 13 days ago that on december 28th, it was a reference. it was 13 days ago on the 28th the market began a rally that took us up through the 200 day this market has been predictable. but i thought yesterday's macro and then price action in the fall through today frames where we are the market is focus and not sure how to react between the backward looking fed analysis of the market they're looking at a trailing indicator in the job market and

other things that are yesterday's news versus the forward and the leading indicators of the market and the leading indicators of the market are the leading indicators of the economy. and we got that with industrial production and with certainly some of the retail sales numbers and really those are the more important numbers for the market and i think this is where the market is starting to break down. >> the contemporary and forward-looking guidance and messages out of earnings season, when we just spent so much time talking about proctor and gamble and nordstrom and where the consumer is at right now steve, so we're getting cold water thrown on this rally at this point. >> yeah. but by the same token, we had a nice earnings report out of netflix. so it depends on who is going to carry the market more aggressively but people -- we don't know whether it is a hard or soft landing and until we start to hear companies report. and get thicker into this. we all know it was an issue with retail sales and knew there was

an issue with jwn. it is where do we see the thick of earnings start to perform or not perform but when you look at the technicals in the market, 3865 is the support area. but the truth is, we don't have real support down to a 3800 level. the difference is the 200-day moving average is dropping that has been bulletproof resistance to the market that is 3971 so a lower level to breach to the upside for the bulls >> that is like glass half full, isn't it, grasso >> trying. >> isn't that the 200-moving day average because that means the market is momentum. >> it does mean that but if everyone is keyed in on stuff that they know because they can't key in on what they don't know, they look for these big, brown shiny on the and that is the 200-day and that has been insurmountable for the market to

cross over and you have a downward slope that might make it easier. >> the u.s. hitting the debt ceiling today while it intensifies on capitol hill. joe is a former chief economist for the national economic council and now chief economist at bc america. so explain this to you like we're in fifth grade. >> okay. >> in terms of how this counteracts what the fed is trying to do with its balance sheet. >> just to recap, the fed, there is a statutory debt limit that has to be increased every few years. we've run up against that. the treasury is now is using accountable gimmicks to stay under the ceiling so that at some point both parties reach a deal to extend it. how does that impact the fed it impacts the fed, melissa, right where i think is around the summer months. because the treasury will do these measures, we could go into them, they do measures that get them through this quarter and second quarter you have a big

april tax payment and net borrowing by the treasury comes down and then we have a big debt fight coming back sometime in july just like we did back in 2011 at that point, the economy will be if recession. it will be in obvious recession in my opinion. the fed will be pivoting toward lower interest rates an the debt ceiling with an extra layer an extra worry that will rattle investors potentially leading the fed to qe if there is concerned about a missed interest payment so it could get ugly. >> there is a small technical thing where the treasury has an account at the fed, it is going to use that cash and wind that down, which raises reserves at the fed and that is where it counteracts what the fed is trying to do because that is injecting liquidity when the fed is trying to pull out. >> yes so here is the thing right now the treasury is balance is around $400 billion they, meaning the treasury, could run thatdown about to sa

$100 billion, $75 billion. you have to have some money in it because as money goes out, the treasury could bounce checks on the fed so that could offset the liqu liquidity portion for a very short period of time what the treasury is doing is the nonmarketable debt which are government trust funds including things like social security, they are giving the trust funds ious but the liquidity drain, it will continue and the drop in securities will ultimately massively offset any modest -- in the short-term related to the debt ceiling for the government or the treasury balance dips a bit. >> kevin -- joe, it appears. >> we haven't had kevin -- >> i was going to say kevin mccarthy if you watch the votes, it is clear he made some sort of deal with a small group that seems to have a very large voice and in

your notes it said thick things will get messy not 2011 messy but messy i don't think a 19 1/2, 20 vix is pricing this in whatsoever. >> absolutely. i mean, we had the debt downgrade in '11 if we did, it would be for selling of different accounts that wouldn't be allowed to hold treasury securities. but '11 was tricky we had the debt drown grade and the economy was soft then in 2011 but i'm thinking we're going to be in recession potentially in july so it will be worse, yeah. you could think the vix to go up significantly. >> thank you for joining us, joe, not kevin >> thank you. that is the first of our silly games that have seeped into actual content here. >> asking kevin miccarthy, it could have been bull durham. >> and jim is going to make a

joke when you said speak like fifth grader and guy wishes he was that advanced. i know you. >> it is amazing that people say we are not going to get downgrade. that downgrade won't happen. i'm sure they said that in 2011 too. i'm not trying to say that is where we're headed but i feel like nobody thought that was going to happen then. >> so why not now, also. >> we brought this up last night and if you've been in markets and you've taken certain things as gospel, you remember where you were when the u.s. was downgraded and it was an extraordinary moment for markets, especially some of the domino effects that went to the european sovereign debt market. i'll point out the rest of the world, as we talk about all of the shenanigans going over over here, looks interesting and continues to outperform and it is clearly an emerging market. so from the china bottom, the etf that tracks the msciem has outperformed by 20%. so the third week in october

a weaker dollar and rates that have peaked and inflation that has seen some of the worst day is a great recipe and i think you're buying weakness there. >> i think this is interesting where will the cuts come from? it going to be health care or defense spending which is a no-no or social security and secondly the idea that letting them go into a default or get to the point of have ago i downgrade is some type of bargaining chip is preposterous if you're trying to fight inflation. i think those things will have long standing negative effects in terms of servicing debt for the u.s. government going forward. so i think that is kind of off the table. i do expect there to be so continued posturing as this gets contentious. >> coming up, the bull and bear case on the stock next and plus slb gearing up to deliver results today. that is formerly known as schlumberger acon in that name when

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briar taking stances on where shares of meta are going this year take a listen. >> i think you'll see meta come back extremely strongly this year on the back of reels and business messenger to deal with the competition of tiktok and other short form video competitors. >> my view is over the next 24 months there will be a big rebound. but they're going to be under a lot of pressure for the next 12 months and they're not cutting costs fast enough in my humble opinion. >> so, who is right? steve? >> well, the stock is down pretty aggressively and has closed that gap from earnings where it fell off a cliff. the question is what we've all said on the desk, what is the metaverse, does zuckerberg know what it is and what the spend going to be on metaverse that is the growth engine. but what they have to do is talk more about the core. we have the headwinds from apple privacy, the head winds from tiktok and i think the shock has

just shook off a lot of that it was public enemy number one i think d.c. has a bunch of other fish to fry right now. i think they'll move higher here but i'm still long the name and i intend on staying long. >> i think the downside has been derisk and the valuation which you can't argue against. and when you look at the financials and you look at debt, it is like one times free cash flow and sequential revenue growth year-over-year, quarter over quarterand you juxtapose that with irresponsible spending in the short-term. and so really as long as they could get the capital discipline reined in and let us know how they plan on deploying the capital and the relevant kpi to determine whether or not it is active -- actually effective spin, i think that is when the stock really starts to turn around but the debate is really about whether it is a 12-month period or a 24 to 36-month period but i think the down side has been

derisked. >> when you refer to frivolous spending what are you referring to? >> i'm talking about billions. $10 billion on the metaverse. >> like $40 billion. >> sorry >> the degree, the magnitude of the spend is frivolous or the spending on metaverse is frivolous. >> the rate of the spin, when you compare that to where free cash flow is, to me is a bit -- >> so i think it was october 27th, the stock traded 220 million shares, 23 million just to give you some perspective on that today and so the dynamic, when zuckerberg came out, it was almost a mea culpa he's not going to do that. if he reversed field, the stock will sell off even more. so in it rally and what facebook has been doing quietly and is what every other corporate is doing and trying to get rewarded for which is to focus on the bottom line not the top line so i think it goes higher. i think this is an environment where they have more ammunition and noise around what they need

to do, everyone else is cutting costs, this is what they need to do the stock will be rewarded the core business not so sexy and not growing. 2.2 billion people in terms of the platform it goes higher. >> they've pivoted to a business they can't explain and nobody understands which is problematic. and to bonawyn's point spending opinion hand over fist to do it. and the problem is this level is where we bottomed out from if you go lack and look in march of 2020 so the earnings on the first, on a back drop where ad spend continues to go down, i think you're looking to profits and not longs. >> slb and seeing how traders are aypling the name. the action when "fast money" the action when "fast money" returns. can help you be better prepared for unexpected events. voya. well planned. well invested.

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welcome back to "fast money. oil prices resuming their march higher today the commodity closing out the ninth positive day in the last ten sessions slb following suit the company formerly known as schlumberger on deck to report earnings and options traders are betting it could be due for a pullback

mike khouw has the action. >> more than two times the daily options. right now a move of about 4.3% when they report tomorrow. the most active single contract the january 55 puts just under 6,000 of those trading for 46 cents a contract buyers of those puts risking less than 1% of the stock price on a bearish bet, not surprising giving the big move we've seen up nearly 70% since the mid-september lows >> slb was nobody's acronym. although energy was. >> energy and one of the hardest things to do in markets is actually let your winners run. i've been long schlumberger and next year they'll return 15% of the cash flow and the dividend is coming back and the spending discipline is there. but if you look at the space, off shore drilling is just getting going and this is part of this that is the power. >> mike, thanks. see you tomorrow tomorrow of course is the full show, 5:30 p.m. eaerti

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2023 trader acronym. do you feel zen with bonawyn or think grasso is just right we want to know. all of the picks are on our home page pick your three favorites head over to cnbc.com and fast money. the end of our show tuesday jarn 24th you would vote as many times you want. >> okay, moms. >> which i have done for karen let's look at netflix, higher after the latest earnings reports and the company beating estimates but handily missing on revenues the ceo stepping down and the credit card starts in 45 seconds. top of the hour. it is holding on its gains in the after hours so far up 6.75%. final trade time, grasso >> the tmi, tesla. >> tim >> schlumberger, oil services are only hitting a sweet spot in terms of core business. >> bonawyn >> whether it is debt or vix,

gld i want safety. >> it tonight's ranger-bruin game a litmus test game. >> yes. >> bristol myers, bmy into earnings early february. >> thank you for watching "fast. seeing tomorrow mornin my mission is simple to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to help you find it. "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends, i'm just trying to make you a little money my job is not just to entertain but to educate, context. call me 1-800-743-cnbc or tweet yes @jimcramer. maybe we're looking at it all wrong. maybe we're