i would like to get right to valeant. you were at the berkshire annual meeting where charlie munger called valeant quote, a sewer. mr. buffett said the business model was enormously flawed. on cnbc this morning he said i don't think you would want your son to grow up and run a company in the manner that valeant was run. how do you respond? >> we made a lot of changes in the last few weeks. i have been on the board for about five weeks. we have a new ceo, joe papa, who is starting today. today is his first official day. appropriate i should be on your show. the company's made some mistakes but i think where charlie is wrong, he's wrong to indict an entire company on the basis of a few mistakes and a leader that is no longer with the business now. and the 22,000 people work for this company, i think this is a great company. when you look at the -- one of the things i was sort of thinking about to give you a sense of context, think about when berkshire invested in goldman sachs. goldman sachs had to be one of the most revile

valeant is not just the poster child. valeant has become the pinatta for it all. and one day, if people understand that mallinckrodt is not clumped in as a company that raises prices, but, rather, it's a company that raises prices, bought competition to put on a shelf, and then is going -- never done a proper clinical trial, once people realize that, then hopefully this will become the poster child, and when that happens, unlike the thousands of products that valeant has that becomes more difficult to actually analyze the business going forward, mallinckrodt, everything's based on two drugs. the main one is over 45% of the income. >> let me finish by asking you one more question. what do you say to those who say that specialty pharma in general, valeant, mallinckrodt, those embroiled in the issue of drug pricing and the like, that that's a tinderbox right now, and you're the guy running around with the match, and that's why stocks like this are and continue to be under pressure. how do you respond to that? >> respond to the fact that we have a country paying a bil

valeant rejected the offer made just a few weeks ago, before joseph papa took over as valeant's new ceoy? >> an offer that had no firm offer price. the whole thing was a little -- it is shady, only because everything that's happened over the last six months has been extraordinarily shady. why wouldn't you think this is as well. i understand if you're short the stock in something like this comes out, there's nothing like taking profits. to me that's all this is. i think there's tremendous headline risk to the down side despite what we saw today and the last couple of days. >> david said, you know what, for a stock that had declining stock price, why wouldn't they reveal if they had a bid in the spring as opposed to now. why would they reveal it essentially after the close on a thursday ahead of a long weekend. all sorts of things didn't add up to him. >> yeah, listen, that's exactly why i think this stock is a no-touch at this point. you don't want to -- you don't want to necessarily try to short it unless you're using options. you're going to get a lot of these stories coming out of her

valeant, this is a trading opportunity. where would you exit valeant then?uld need to see a lot more financials come out and see how the new pricing model fix in -- fits in and how their credit -- creditors are treating them. there are a lot of moving parts. understand a change of heart would also mean i would leave different than i believed initially. it is not true. i believe initially $200 per share, nothing at all is being priced in. many of the hedge funds have exited the position. sentiment, negative overly negative, i figured it was an opportunity and i own what was put against it for the black swan. right now, for me you have to look at the entire pharmaceutical industry. it is amazing -- how about this? valeant is not going lower without dragging it with it. but valeant can go higher and it can go significantly lower. belief that your this is a valeant like company? andrew: much worse. valeant played with the system, raised pricing, pretty much helped establish the platform company. on the other hand, most of the income comes from one drug. which th

buffet and munger passed on valeant and refused to conceal negative view about valeant and questionables model or the hedge fund billionaire championing the cause. bill ackman. >> bill ackman really wanted you to speak to him because he said you're doing reputational damage to a company you don't understand. he wanted to you change your mind. will you change your mind on valeant? >> i don't think so. there's a complaint about my saying valeant was a sewer, i thought my complaint would come from the sewers. [ laughter ] >> that is unbelievable. he said the suers should be complaining more. up another 9.5%. what the two investors said negatively about it has not hurt it really that much? >> well, yeah, a lot of the losses are built in and they have a lot of assets. you know, that was a fascinating interview. you interviewed both of them afterwards as well. you got great quotes. two interesting things they mentioned. buffett, don't they look alike? liz: you should see early picts. they look exactly alike and they're best friends. >> buffett believes that valeant could easily sell bausch &

liz: of valeant. >> of valeant.t all, it was trumped their business model was to jack up prices among other things. liz: that is not illegal. >> i don't think it is wise when you take somebody with a life saving drug and you buy it and quintuple the price something of the sort. i think public policy and public opinion will turn against a company like that. liz: charlie, you've known warren for decades and decades, bill ackman likes to be considered a baby buffett. is he anywhere close? >> he certainly made a brilliant investment in general growth properties. he is totally right about herbalife. and he is very articulate and intelligent and he is a fellow harvard man. so he is not all bad. [laughter]. on the other hand, the main thing that valeant did that was inbelievely clever was to pay consumers part of the deductible for the drugs they were selling. that is totally illegal, medicas but that doesn't apply under the laws, under state laws. they saw that loophole. so they did, with all of the drugs that weren't cov

the ones that look like valeant. who will be on this show with us later. that stock is not going down. down another 6%. how about the look-alikes? forget whether the analogy makes any sense. getting very close, very close to paying $40 billion for all e began's drug business. remember they did break out the pfizer thing. nasty. the amazing thing about those who really love domestic growth. these traders will pay anything for it. even if it is tainted. consider the amazing comebacks in chipotle, hormonel foods, kroger, when chipotle had the first ever loss, i urged you to buy the stock. after today's gain the stock is now nicely where it was whether it was at that hideous number. some disappointing numbers last week. nobody likes biojen's decision. but today those stocks were low. hormel is back. so is the costly of feed. no foreign exposure whatsoever. still, the sales were in a bit of a slow down. but hell hath no fury like an industrial stock scorned. be this is strictly upon further review. i can call what happened today resumption of a long dorm an bul

vonnie: valeant pharmaceuticals up 8%.of its value in the last year. -- 19% of its value in the last year. there is a report that they turned down a takeover bid by tpg earlier this spring according to "the wall street journal." what do we know about this offer and might it return? devin: we're thinking probably march or april after that stock took a nosedive after the company lowered its full-year guidance. the companyt was that rejected the offer and the board rejected the offer because the stock is down so much. probably has some vision for what the company can do. they want him to execute on that strategy first. david: being down and not selling because of that is not cause for analysis -- does this indicate that in fact other people might be interested in buying them? n: once a firm like tpg shows interest, that signals blood in the water. i did get an interesting e-mail last night from a valeant shareholder who said when tpg wants to deal, it means 20 plus i've equity firms would love to do the deal. valeant just bec

valeant seeing big gains on the day. citron reversing course on valeant and getting long on the stock. >> it got to a point, actually, i figured, i'm going to put my money where my mouth is. and i got $1 million check, cashier's check to the ms society. this is my money. this is not the money of hedge fund, or investors. that's all i want them to do is test their drug. just test your drug against the same synthetic that you bought to put on a shelf. i can tell you one thing, if valeant did what mallynnckroot is doing -- >> telling us that the company is basically making great strides in transforming itself into a pharma company that's consistently meeting or exceeding expectations. dan? >> i would say that was a fascinating interview. now he categorizes he's long in valeant for being so right for so long. i think it's important for viewers out there to understand here, he also said he's long put. he's defined his risk on that one. doesn't see it going to 60. obviously sounds very convicted. if you look at the chart, back

it's very different from valeant.david mayorist the biggest bear and biggest supporter of mallinckrodt and even though the price of the drug was raised a lot before they acquired it, going up 5% a year since they acquired it. >> very different than the other increases. meg, thank you. let's get to the dom chu for a market flash. >> keep a look at amazon.com because the online retail giant is still a few moves from hitting the record level. the stock has now broken down at one point, did break down and hovering just around the $7p hundred per share market. market first claimed earlier this month. underperforming the overall market today and one of the biggest drags on both the s&p 500 and nasdaq composite overall so keep an eye on the amazon shares. "power lunch" will be back in two minutes. keep it right here. more after the break. >>> welcome back to "power lunch." small stocks underperforming the broader market. the s&p 500 down by about that 1%. some of the big names dragging down the small-cap index are treehouse

let's talk about valeant here. we saw it surge. short seller.s quote unquote, the pharmaceutical enron is now reversing course and it is long. that news sent the stock surging. you may recall left was on this show. we did see that immediate impact in the shares today. >> yeah. well, that is interesting. although it did say he is long puts. as a trade, remember when he first started with the fillador work, 180, or 170. quickly down to the low 100s. now at 26 maybe all the juice is out of that trade. i mean i don't look at it as you know this korvex news is more interesting. i think citron as a trader i think of corvex as a longer term investor. >> part of the reasoning behind getting long is that andrew luck essentially said or citron essentially said they don't think the new management will do anything, make any calls or make any decisions that will torpedo the stock. they'll be very careful. >> i think they're holding their hands. >> that could be, too. >> what's interesting is the street is now with the falling of the tank putting valuations o

people wouldn't have known about some of the issues at valeant without andrew left and citron. people swroent known about issues at enron without jim chenos. do you think the environment is getting better in your mind for what short sellers do for a living because of the kind of stories that you all have uncovered? >> short selling is a initial. i'm a niche of a niche. and i think that in the u.s. it is more tolerant. you know, globally, we have been active in europe recently. there's a lot of resistance to the idea of criticizing a public company. and, you know, my come back to that is, look, capital markets are really as important as political issues. i mean they affect almost everybody on the facest earth. if we can't criticize certain market participants, that's akin to not being able to criticize political leaders. so there are parts of the world where that message hasn't gone through yet. >> you're never going to be the most popular guy at a wall street cocktail party. but that's okay. i think the short sellers play a very important role in uncovering market malfeasance a

week show thatis they sold out of their valeant holdings last quarter.meantime, andrew west, his report on valeant, saying he is back in. >> everything i said about valeant and it up being true, setting up certain entities to alter financial statements. as the stocks go down to the mid-to high 20's, i said they had a good trading strategy, maybe hedge myself. dark, i figured the stock might see higher before it sees lower. here with us now to discuss the 13 f filings and what is significant about the hedge fund , upunity is divya narendra from sumzero. we have hedge funds, mutual funds, private equity funds. you run a platform for people to share their ideas. we see a few things. --erally, poor for performance among hedge stocks these days. and a lot of private trade. what does it say about the state of the industry that so many people got taken for a ride on this one, and clustering into the same set of stocks? divya: i don't think it says much. i think people read into it a lot more than they should. mind, moreo keep in than half of the hedge funds out

. >>> welcome back to "fast money" shares of valeant, about the discounts the company promised in the hearing in front of congress. if there is one thing this company needs, it's therapy. stock therapy. biotech reporter, meg, this is awful. really. >> yeah, it's just sort of on going, never ending. we keep hearing from them, they will change this and we find out they are not changing it. it goes back to the two little old drugs. they are heart drugs. they are very old. valeant acquired them and raised the prices and as they got more and more attention from multiple government committees, they promised they would offer hospitals the volume based rebates of up to 30% on these and as they were dragging from congress again just two weeks ago, and the senate committee on ageing showed that none of these big hospitals were getting discounts, bill ackman who just joined the board promised he would do more to provide this discount. take a listen what he told congress. >> instead of individually negotiating these discounts, why not just make the 30% price decrease on them across the board? tha

and you won't believe who just bought shares of valeant and immediately sold them. we've got a way for you to get your money back from apple. all when "fast money" returns. it takesbut stealing itd work to eaonly took a few days. female announcer: protect your money. find out if you're dealing with a registered investment professional at investor.gov. before you invest, investor.gov. >>> welcome back to "fast money." retail getting crushed across the board this week. massive declines on disappointing earnings despite an overall bounce in april retail sales. allen is the former chairman of jcpenney. allen, always great to get your take. >> how are you, melissa? >> great. if you were in jcpenney, what would you do in there? >> i think anybody heavily in the apparel business, which most of these department stores are, they suffered a tough first quarter. and i think a tough last quarter, fourth quarter of last year. i think there's a lack of newness in the marketplace. i think there's been a tremendous focus on the internet. i would say at the expense of the department

taking valeant forward from where it is now. he made that clear as day on the show just a few moments ago. >> great stuff, scott. >> might even change the name of valeant. >> that's what he said. >> scott, thank you very much. just getting started here on "power lunch." a bold call on jcpenney plus a historic moment in had a v-- in havana. first brian sullivan. >> yeah, it's been a huge day on cnbc today. we had warren buffett and bill ackman, after the break, john chen is going to join us. we'll dive into their business and whether or not they're benefiting from some of apple's recent struggles. john chen coming up. who do you work for? your boss? yourself? your family? our financial advisors are free to realize a plan to fit your family's unique needs. we'll listen. we'll talk. we'll plan. baird. at ally bank, no branches equals great rates. it's a fact. kind of like bill splitting equals nitpicking. but i only had a salad. it was a buffalo chicken salad. salad. >>> welcome back to "power lunch." i'm in beverly hills, californ

. >>> charlie munger calling the actions of valeant demeant. what did big ackman have to say to that. we'll play the clip from the interview that all of wall street talking today. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. (announcer) need to hire fast? go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with a single click. then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. (announcer) over 400,000 businesses have already used ziprecruiter. and now you can use ziprecruiter for free. go to ziprecruiter.com/offer6 images, videos, social updates. we call it dark data. 80% is invisible to most businesses. the ibm cloud has tools that can help see dark data and put it to work. hello, my name is watson. working with watson in the ibm cloud, we can help an energy company predict pipeline corrosion. and help a start-up to use social data t

one being valeant.on valeant, and there was a piece following up in the "wall street journal" today talking about how valeant's pricing was a strategy that started at the top. they say it was the ceo, pearson, who did a lot of that. you said over the weekend that valeant was a sewer. >> it was. >> it was. what happened. we also point out, you worked at a hospital -- >> they were robbing our hospital. >> what happened? >> they raised a heart drug that old people real-- people really. it was outrageous. he said i'm correcting under pricing. you raise the price on absolutely necessary drug by 500% and say you're correcting a underpricing. he's like the joan of arc. i would call that demented. >> it started at the top but it was out touted as a reason for buying the stock and why he could make the aqqucquisitions made. it wouldn't be the most attract of thing to say, but to large investors, it was conveyed when they want something that was one thing for sure the price was going to go up on the product. >> i

valeant's down 86% from its 12-month high. two companies, both inversions, of course -- or actually, valeant was never an inversion. valeant just has a low tax rate as a result of being -- >> canadian. >> yeah. >> canadian/ -- these were where the hedge funds were, and i just find biotech's been terrible. regular old pharma not so hot. >> speaking of valeant, you're going to have an interesting guest on "mad" tonight. >> i know joe for a long time from perigo. we've got to find out what happened to perigo and what's the story for vealeant. people are excited this morning that they're going to file their quarter. >> yes. >> that's a low bar, isn't it? wow, they're going to file? great. anyway, we'll see what joe says. frying pan fire? out of the frying pan into the fire? >> yeah. we were doing the math earlier on the mylan deal and what it's worth. >> $167. kind of regret that. avon-like. >> yeah. given its $90 or something like that. >> and you can say who's really running valeant? is that ackman? i don't know. papa? nice pay

. >> no valeant? >> no.othing negative the say about valeant except for the high drug price issue is focused on valeant, and valeant does not in fact invest much in the r&d, and so if you want to make the exception, and unfortunately, it is valeant, and maybe their high drug prices, you have something to complain about it, but they are not reinvesting in the r&d, and vast majority of the companies the more money they make, the more they invest in the r&d, and the morrisk in the drug development. so that is a good thick. >> thank you. joe edelman, and meg terrell, thank you. sfwroo and coming up, billionaire stan druken mill ec says it is time to get out of stocks and buy gold. and also other stocks that are down ahead of the trade. , social updates. we call it dark data. 80% is invisible to most businesses. the ibm cloud has tools that can help see dark data and put it to work. hello, my name is watson. working with watson in the ibm cloud, we can help an energy company predict pipeline corrosion. and help a

valeant goes down. if it holds, get on the long side. >>> banning the sale of e cigarettes, cigars, pipe tobacco to move in line with cigarette rules. the major tobacco stocks are still on fire. take a look at the one-year performance of reynolds american, up a whopping 35%. altria up more than 25%. philip morris surging to 20% in the same time frame. and perhaps the cigarette business can be summed up best by the famous words of warren buffett. it costs a penny to make. they sell it for $1 and it's addictive. and yields are addictive too, tim. >> that's right. newport, with all the pressure on the menthols, you have a place here where they just showed in their last numbers their ebitda is down 4 1/2%. the company continues to grow. this long piece by the fda came in less onerous. it doesn't change the long-term financial impact. obviously in this environment stocks where you actually have visibility into earnings and you can see margins growing that pay a high dividend, they're going to trade expensive

i think back to the original valeant investment that was about allergen?ember the hue and cry about that? i'm surprised that he stuck with it as long as he did. >> is it a few mistake or a business model based on -- >> it was a business model mistake. >> well he just said it's a couple of mistakes. plus when we would ask pearson, what is your biggest drug? you know what the biggest drug is -- it's tofu or jublia? >> jublia. i think he made 5, 6,000 for a ten-minute voiceover. but still, jublia. >> those three athletes -- >> i've been fascinated with the relationship between charlie, warren and bill. you know, bill likes to compare himself-to-favorably to warren. he goes out every year to some out there in omaha. >> right. >> they do this whole thing and yet you have -- >> you don't sound -- >> no, no, charlie and warren will very rarely say anything negative in particular about bill ackman personally. in fact, becky tried i think to elicit an answer specifically about bill. warren said praised by name and category. >> so he could have said the category. it

remember allergan is sworn -- bought by valeant.et's see in that $11 billion what do you get the libido drug. if you want to become merck, if you want to become pfizer, you have to pay the price. the price is a lot of that cash flow the $2 billion in cash flow, you don't have it. >> when you have $30 billion in debt you have to make sure you can maintain a nice cash flow generation pace to your point margins will potentially decline if they're no longer able to raise price and/or also have to spend a lot more on right turn. >> -- r & d. >> he did talk having to roll back. you're talking 15%, these guys are three and change. joe made a point that he wants to be in that milieu so to speak, allergan 19%. >> 19%. >> and now i've not seen this morning's. >> the deal we're talking allergan still to close perhaps as soon as june, jim, a lot of money coming to the balance sheet. they'll be able to prepay some debt. >> they have $40 billion in debt, you have $40 billion in cash. >> obviously they're in a position to buy back a lot of stock.

we reached out to valeant. last week formed a new committee overseeing the prices of the medicines. they said the senate hearing two weeks ago revealed there may be gaps in that process of giving these discounts to these hospitals. any hospital available for the discounts receives them. so the question now is when will we hear from new ceo joe papa as to what solutions these r now back to you. >> all right. thank you so much valeant stock is down 75% just this year. a senior research anl wist piper jaffray has an underweighting on valeant and joins us to day. >> thank you. >> the reaction, when i first saw this report, i thought, you know what? valeant is now going to be much more of a target for congress. what is your interpretation? >> well, the report today didn't surprise me. yes, i would agree with you. the reason that report today doesn't surprise me is that these are products that have massively high margins. in some cases, 98, 99%. and it really wouldn't surprise me if what the company is doing here is

valeant ceo joined the beaten-down biotech company. here at td ameritrade, they work hard.dom. random? no. it's all about understanding patterns. like the mail guy at 3:12pm every day or jerry getting dumped every third tuesday. jerry: every third tuesday. we have pattern recognition technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. there's no way to predict that. td ameritrade. incredible bladder prthat lets from always discreeyou move like you mean it now comes with an incredible promise. the always discreet double your money back guarantee. always discreet is for bladder leaks and it's drier than poise. try it. we're so confident you'll love it, we'll give you double your money back if you don't. incredible bladder protection. double your money back guarantee. that's always discreet. quite like the human foot. introducing the 255 horsepower lexus is 300 all-wheel-drive. with twenty-five percent more base horsepower. once driven, there's no going back. whoa. what's going on here? oh hey allison. i'm val, the orange

. >> still ahead, valeant shares collapsed more than 70% since the start of the year.ew ceo joseph papa turn it around. we'll hear from him next. >>> we'll tell you the other biotech stocks the traders are betting $10 million on, right after the break. >>> jim, this is not about the money. as i said, i love the -- this is an industry that does more good for people than any other industry, at least as far as i'm concerned. i'm a pharmacist by training. to me this is all about -- if i could play a small role in improving valeant that has a beneficial impact on the pharmaceutical industry, i think i will have done something that's important. that's what this is all about. >> welcome back to "fast money." that was valeant's new ceo joe papa talking to jim cramer in his first interview since taking over the company. why take the role? karen, you spent time today poring through the latest filing. they said they would file before the deadline. cleared up all the issues from the credit concerns. and the guidance for march. >> i was actually a little bit surprised they did that

i would like to get right to valeant. the berkshire annual meeting where charlie munger called valeant quote, a sewer. mr. buffett said the business model was enormously flawed. on cnbc this morni

>> he has so many friends. >> what's his break-even on valeant? have any idea? don't remember. >> he has been buying on the way down, i guess. it's way above this, right? >> his break even on herbalife is in the 30s. >> should have been short valeant and long herbalife, right? that would have been a pretty good pair trade. most retail brokers in the old days -- now it's more fee based. if you just would mess up the order ticket, your clients would be much better off. >> you never did that. >> it's contrarian thinking. normally the crowd would be wrong. >> he would be the first to admit and he did -- >> i learned from that, at least. >> last monday he was on at noon, half time report. >> heard of it. >> he admitted that he should have sold the stock when it was at 200. maybe now he wishes he never invested to begin with. he is sort of in it. >> 51%. >> all in. >> ackman has generally growth and other ones. he also has jc penney and target. it's a pretty good record. think if you batted .510. >> general growth, the upside. >> people don't mention the home runs tha

valeant? >> much briefer, okay? dumpster diving, here's valeant. >> barrons says it's not yet cheap. >> and it's not done being very volatile. they're well over 100% in plied volatility. it was well over 200%. be very, very careful if you think you're buying the bottom, because you're probably not. >> by the way, a quick programming note. valeant's new ceo, joe pappa will join jim cramer exclusively tonight, "mad money." it has his first tv interview since taking over. do not want to miss that tonight at 6:00 p.m. only on cnbc. coming up, the dollars and cents of silicon valley. top venture capitalist tim draper joins us to talk unicorns, sliding valuations, and where he sees opportunity head right now. and josh brown is making trades in his halftime portfolio. what he's buying and selling. health care's a leader, s&p's basically flat, up two points. we're back on "the halftime report" after this. (announcer) need to hire fast? go to ziprecruiter.com and post your job to over 100 of the web's leading job boards with

he will join us to tell us what exactly has changed on valeant.

this just out from valeant pharmaceuticals.t quarter finances on or before june 10th. last week it filed the annual report for 2015. >>> friday's weaker than expected jobs report changing the outlook of the fed rate hike. steve liesman joins us with the story. we saw it play out instantaneously. >> it was pretty interesting and it continued into the commentary. here is a new equation on wall street. 40,000 jobs equals about two months. yeah, the fridays job report came in under 60,000. looking for 205. also, the three month average. so wall street firms what did they do? it was enough to dial back their calls for the fed by at least two months. they all challennged their tunem june to september. we have changed our call moving to one hike. that was theme, also, rather than two. they said, you know, we're going to do the next one is going to be later and only one of them. september meeting. to me it's all over stated. goldman cited cnbc interview as part of the reason for changing the calls. some have turned noncommitment tal. t

tracy: with your fantasy ceo hat on, what do you think his first task will be as ceo of valeant?one thing everyone talks about is restoring credibility. his job number one is to come in and say, hey, i got this, it is under control, financial reporting on time, it will be transparent. you will know what is in this business. >> dcnf has won a $37 billion contract to build 12 submarines for the australian navy. this is a huge contract. what of the details ?paul: it is ? paul: it is the biggest in australian history and the biggest upgrade of the navy since world war ii. it directly means 2800 jobs and also the heavy use of australian steel. the contract is a victory for talon. patrice: i think the french government and the australian government created the proper forronment to build trust these contracts and it is very important. we have created a bridge, and industry bridge a between australia and france to give confidence to both parties. shery: mitsubishi motors has admitted falsifying emissions test dating back as far as 1990 one. the automaker has formed a panel of three forme

valeant received a bid for takeover. it came a month or two ago and valeant declined. >>> firm reportedly in talks with citi group about loans. after an internal probe found employees at lending club falsified data on some loans. the stock is up slightly on the news that it could be working with citi group. citi group had been working with one of lending clubs rivals, prosper. they ended that partnership. and while lending club shares are up 3% the stock is down -- >> 3% make nothing blip on that schart the past few months. palo alto networks reporting a loss on rising costs. also a down beat outlook for the fourth quarter. it is down almost 10% in the pre market. gamestop's first quarter profit fell 12% and the video game retailers expects lower second quarter results blaming a lack of block buster game launches. shares of ulta salon. rose 38% beating forecasts help. the company is also raising its full year outlook. shares at the moment not moving in the pre market. >> splunk report iing a wider ls but boosting full ye

tracy: with your fantasy ceo hat on, what do you think his first task will be at valeant? restoring credibility. you need to say, i got this, financial reporting on time, it will be transparent. you will know what is in this business. >> french consortium dcnf has won a $37 billion contract to build 12 submarines for the australian navy. this is a huge contract. what are the details? >> they defeated thyssenkrupp of germany and it is the biggest in australian history and the biggest upgrade of the navy since world war ii. and 2800 jobs and also the heavy use of australian steel. >> the contract is also a victory for talon. they have about 35% of dcnf. patrice: i think the french government and the australian government created the proper environment for trust in this contract. it is very important. we have created a kind of bridge, an industrial bridge between australia and france to begin confidence to both parties. shery: mitsubishi motors has admitted falsifying fuel efficiency tests as far back as 1991. the now formed a panel of three former prosecutors. the investigat

struggling valeant pharmaceuticals rejected a takeover bid this spring, according to "the wall streetroach was made, but a price was not specified. valeant pharmaceuticals has been trying to revive itself after drug pricing practices came under scrutiny. intercontinental project. a 49-mile undersea cable. it will deliver faster online and cloud services. it will be completed by fall 2017. francine: i think we have cables across the atlantic. that is how we get to the show, tom. this is time for my morning must-read. we picked out something that crossed the boundaries between the brexit and the eu. we are still back with john nichols weight and callum henderson. when you look at the risks of brexit, risks to the financial markets -- is it clear that we need a plan b or should we ignore this? callum: for a long time, the market was ignoring the risks. there was a very similar pattern thinking ofrket was course the people would do the right thing. then we suddenly woke up and said, we might not. you have seen a huge spike in volatility the last couple weeks. i think the tory party needs

particularly as the valeant thing, we get more clarity there. i don't know, you've got to be really good to be picking trxx. >> one of the ways i'm playing it right now is the xlv. look at the etf and what it's made up of, big pharma stock. they have good yields. some of them are cheap, some are very reasonable. if you ever get the pickup like guy is talking about in some of the beaten-up biotex, you have the xlt making the move back to the 52-week high. >> welcome. great to have you. we didn't welcome you. i apologize. >> thank you. listen, talking about the 15% correction, what would biotech do through that? would it move with the market? would it do worse? would it do better? >> i would think they're a little more protected. >> you would think, right? let's say, play 9 game, 15% correction. ibb given the run that it's had might underperform in that scenario in a 15% down scenario. >> i disagree. i think you want to stay away from the xbi, the ibb. i think we're in a market here where you actually want to own and keep oeng strength. you probab

scott will talk to him about valeant and a lot more obviously. dow is up less than two points.in a moment. earningk from bank of america to buy a new gym bag. before earning 1% cash back everywhere, every time and 2% back at the grocery store. even before he got 3% back on gas. kenny used his bankamericard cash rewards credit card to join the wednesday night league. because he loves to play hoops. not jump through them. that's the excitement of rewarding connections. apply online or at a bank of america near you. (man) that show.t to record (woman) now we have to wait forever to see it. (jon bon jovi) with directv, you don't. ♪ you see, we've got the power to turn back time. ♪ ♪ that show you missed, let's just go back and find. ♪ ♪ and let's go back and choose spicy instead of mild. ♪ ♪ and maybe reconsider having that second child. ♪ ♪ see, that's the power to turn back time. ♪ (vo) watch shows you forgot to record. call 1-800-directv. >>> it's time for cramer and stop trading. >> yeah, you know, couple big calls here we didn't talk about. cisco reposi sysco, a food service d

basically he was the reason that valeant shares went into a tailspin.ing to see what he's up to. back to you guys. >> wow. he's like never mind. >> oh, i know. valeant tried to say some things. we know tepper was involved. bill miller. if you fall 90%, you start to get some lows, apparently from the people who drive you down that much. >> we have a cnbc news update right now with sharon epperson. >> hey, bill. a well backed campaign backed by a millionaire has collected enough signatures to raise the tax on cigarettes. it would triple the tax to $2.87 a pack. >>> the speak of the alabama house is going on trial on felony ethic charges that could result in his removal from office. jury selection beginning today for mike hubbard who's phasing 23 counts of using his office for personal gain. >>> nintendo says it will up its game in the film business. nintendo will reportedly invest proceeds by selling its stakes. and a burger king in finland has made the idea of enjoying a whopper in a sauna a reality. it features red and blue accents to match the restaura

standard & poor is looking at whether valeant can meet its profit forecast.hough that might be a big if. >> the markets moves anyway. >>> as you know, hedge funds are having a hard time recovering from a very tough month of april. kay kelly sizes up the worst performance of that period and tells us whether the old two in 20 fee structure is in jeopardy. kate? >> it's been touch, not of least was the family office with steve cohen. at the milken conference the normal publicly shot cohen talked about his fund's brutal february where he saw a huge down swing over a single four-day period. > >>>. >> in february we drew down 8%, which for us is a lot. and my worst fears were realized. so, yeah, i think the business has gotten crowded. the strategies were not that much differentiated. people think they can hire a threaten and like magically they're going to earn returns. >> cohen says he's amazed at the lack of the hedge fund market right now and is surprised investors aren't putting more pressure on underperformers to shave those fees. the rebellion may be coming.

. >> valeant putting out an alert. brian stolz resigning from valeant effective may 30th. they said they're going to pay three other executives' retention bonuses of at least $3 million. interesting news from valeant. the shares, it doesn't look like they're trading after hours. thank you. >> meg tirrell. mack image mirror on the wall. microsoft is creating a mirror that can tell you who's smartest. first my interview with nba star carmelo anthony. how much longer he plans to play. a fair price, quality service, and that in a new house, you probably don't share the same tastes as the previous owner. ♪ [ dolphin chatters ] so when you need a little house painting or a complete remodel, we'll help you get the job done right, guaranteed. get started today at angie's list, because your home is where our heart is. >>> welcome back. new york knicks forward carmelo anthony is taking his skills off the court. in his latest collaboration he's working with macy's and his teen new york stock exchange mutant ninja turtle fashion line. we talk about that and a whole lot more in this in

we still have to see what happens to judge him on valeant.s a less of a positive story for an investor which was in there through the entire thing through mike pierson's strategy of raising prices in order to reduce earnings. i think it's more of a negative for them than it is for ackman. on the flip side, j.c. penney a negative for bill ackman. microsoft a positive. you arean't take one activist investor and say good and take another and sad h. say bad. it's case by case. >> bethany, they are rich and they will find some lobbyists to take their money. somebody will take their money. but i'm going to ask you, if you were the lobbyist or the pr person for this group, you would work with them or do you think they have an impossible tass snk. >> i don't think i can do p trochlt save my life. let's just start with that. but that said, i think there is a compelling case here. look, a company that's not being well run and that is rewarding its ceo and has an entrenched board and rewarding the ceo for failure that, is not a plus for the economy and

they said, hey, we are not valeant.and big pharma companies, you emphasize that we are not those guys. please by our stock. charles: they are different and they are just allocating capital differently and their r&d is different. david: bloombergs drew armstrong, thanks for being with us. toathan: a special thanks david westin who is leaving us for the salt conference. david: i will be on a panel with boone pickens. the good thing is that i will not have to do too much talking. we will also interview austen goolsbee. jonathan: when the guests are that good, it makes your job very i easy. this is "bloomberg ." we are counting you down to the market open. future stay positive with the dow up 73. ♪ amandajonathan: this is "bloombg ." around the table is amanda lang and matthew miller on the markets. ahead of the opening bell, you can hear it ring away in new york city. dow future stay positive. s&p 500 futures positive about eight points. there is the bell right there. winning.s the euro-dollar 11385. yields are lit

valeant has been the story.f selling specific businesses to raise money to pay down debt and to cushion the profit. do you think that this represents a larger problem in the pharmaceutical company of a broken business model of raising drug prices and borrowing to acquire other companies? leon: no. i think this is a narrow issue inside the market. valeant has a great chief executive in place. they have not announced anything significant, smaller things that they will trim. selfodel will stabilize it and rebuilt going forward, given the fact that, at the end of the day, they have important drugs and patients need the drugs. they will be careful going forward regarding how they operate. lisa: what will be the most active sector for a midday? leon: i think health care will be active and industrial with a combination of china out. those will be the biggest factors going forward. lisa: health care it is. leon kalvaria. david? m&a to oil.rn from inventory will show another decline in the stockpiles. earlier this year,

and that helped put pressure on valeant yet again.nd even on allergan, all the idea of these companies rolling up with a very low tax rate too, which also allergan shares of course given its a dublin base. i always forget where they're based these days. their all over the place. >> across the ocean somewhere. >> they're not in the u.s. >> nvidia beat by a penny. gaming was not the source, they're calling deep learning adoption by cloud providers, amazon, microsoft, ibm not a surprise. but talking more and more about it as a tailwind and whether it's halo or not, intel is the best performing dow component at the moment. >> yeah. the semis have been a tough place to be. if people looked at the apple suppliers and that was a tell to have this last leg down in apple shares, it seems like people were looking for any kind of glimmer right there because once again it looked like there was not a very challenging valuation story to be told in semis. being cheap hasn't worked. >> what would you advise people to think about, mike, ahead of next

and valeant without any improvement became pharma public enemy number one. these stocks have indeed been in the dog house. another one has been getting a huge amount of love. i'm talking about the medical device companies which are in bull market mode. that begs the question. how is it possible that this market adores the medical device place even as it loathes more biotech names? the answer may seem counter intuitive. money managers are pouring cash into the medical device segment because pharma and biotech have gone out of style on the wall street fashion. what do i mean by? okay. most portfolio managers feel the need to own some kind of stock. they will mirror the s&p 500. that way if a given sector takes off, and they didn't see it coming, they'll still participate in the upside. if a sector breaks down, the bench mark will go down too which means it won't be blamed for the weaknes not. right now the s&p is 15% health care which means a huge number of funds are desperate to have some health care exposure. but remember, everybody knows that pharmaand biot

. -- andue pharmaceuticals fail and -- and valeant pharmaceuticals did not accept a takeover offer. stocks europe 600 is up 1/10 of 1% still. it is gaining a fourth day. the longest winning run since april 14. rising for the third consecutive week. that is the best run since march. a3 point -- a 3.3% gain is the best game since february. a day for philips lighting, the living -- of the lighting division of royals phillips, raising 750 million euros. middlees shares in the of the markets. investors paying 20 euros for 37.5 million shares in philips lighting. the biggest general lighting company by sales. the sales of the 25% stake before the allotment option gives the company a market value of 3 billion euros. failing to conclude a private sale of the business. the first day we have seen a boost in the share price of 9%. this is wonderful -- this is our go.erful ipo function, ipo it tells you everything you need to know and more about the ipo market. i have gone into the western ipo market. there has been 11.1 billion euros of ipo's. top of the list is philips lighting. it hundred $6

trading report that it rejected a takeover offer earlier this year, the wall street journal says valeant down an offer. it has been under scrutiny over its business model and drug pricing practices. the bid may not have included a firm price and the companies are not in talks. & i oncepresident of 7 a growth strategy and plan to be announced by the end of the timeline in 100 days. it comes after his appointment was improved by shareholders. they have several underperforming businesses and are key to expand in the u.s.. once less profitable units restructured or sold off. rishaad: still to come, battle lines drawn in the race for ride sharing supremacy. the main players in this burgeoning industry with their big-name backers as well. our next guest says china's mounting debt problem does pose a threat to the country's social stability. this is "trending business". ♪ right, asian equities trading to the upside. investors are waiting for comments from janet yellen to see the timing of the nats rate hike -- the next rate hike. great to see you. tell me something. what is occupying your time

the company and what not saying that the -- again, bill ackman saying there is much work to do at valeantding restoring the dermatology business to growth. also a lot elsewhere about what's happening elsewhere in the performance. they start talking about big contributors positively. a number of notable positions that have been detracting from the performance at pershing square. it's also worth pointing out that bill doyle, the person leading pershing square was on the board of zoetis. they maintain a near 5% stake in the company and have said they believe in the management and company's operations overall. a lot to sift through for now but those are some of the key headlines. we'll go through here and get you more. >> down 5 25 approximate. >> without a dot. and responsibilities if nova cure and company he's now exactlyive chairman so they position t as he has other things to do and not necessarily taking the fall for the valeant investment. which they shea may take a few quarters before he thinks it will revalue to where he thinks it should be. >> trying to bridge the gender investment g

valeant shares up one-half of 1%. now book to more "cavuto: coast to coast."zuela and fears of an economic collapse there, boy, ugliness on streets of venezuela, pushing some of the airlines as adam shapiro porting to us earlier, to suspend at least some flights in and out of the country. former spirit airlines ceo joins us right now on that. some other topics affecting industry and travel in general. what do you think of this issue with venezuela if you were still running spirit? would you be flying into that or airline in general, would you fly into a country with that much risk? >> great to be with you. venezuela is very difficult country to serve for airlines for a couple of reasons. demand there is really weak. people don't have a lot of money there to fly into the u.s. and the economy's tough. they're really feeling the bern if venezuela if you will. connell: right. >> so airlines got to fly where they can make money and venezuela is a tough place to do that for airlines right now. connell: that is the bottom line. more than you look at say it is dangero

and also increased its holding in valeant and cut its stake in mondelez. >>> and speaking at a forumn hong kong, the head of the world's largest asset manager said 3 it transforms it must easily exit from a services driven economy. saying that a recent explosion is not the correct way to reorientate the economy. >>> and foreigners bought treasury for the second straight month in march. overseas investors purchasing $23.6 billion in u.s. treasury debt in month of march alone. at the end of the month, the yield on a ten-year treasury declined as low as 176 which isn't too far off from where it is now. there is increasing demands for u.s. treasury. the demands is high. and we're still in the 1.70s. >> 1.7% on the u.s. 0.115 on the german. absolutely -- continues to correct me that one. >> not all mispronunciations. the german yield is at .17%. why on earth would you buy the german yield when as you rightly say you can pick up the yield. >> right, yields are so much higher. you get so much for more the u.s. treasury. >>> isn't stocks to watch, corvex with pandora. pandora says its core b