tv Fast Money CNBC May 4, 2016 5:00pm-6:01pm EDT
check your broker with brokercheck. breaking news at this hour. you're looking at a live shot of columbus, ohio, where john kasich will deliver a statement where he's expected to announce he's suspending his campaign for president. that announcement all but ensures that donald trump will indeed be the gop candidate for president. the possibility of a trump presidency becoming more and more of a reality to investors here. what does this mean for stocks. seems like this week, though, we've had a little bit more of a defensive tilt in the markets. >> no question. look, urn certainty, let's get
back to a few classic market tents. i think there's a level of the trump policy that's very unknown. people that try to do the math to tax cuts, and entitlement that don't change, and spending doesn't change. there's a lot of elements to this. i think we're way too early to assess. clearly, so far, there's no substance to any of this stuff. i think for markets, this is unsettling. the flip side of that, of course, is if you're expecting hillary, who was supposedly, yeah, if that's the devil you know, for wall street, i'm not sure you love the devil. i think uncertainty, for markets, dropping into the context where we've been, markets have went to the peak, traded right up near the high, and traded sideways and now they're giving something back. to call this -- i would not relate this to trump. >> i actually think the point tim makes, let's look where the market has been, and where it is now. 1810, up to 2050, 2060. down at 1810. i said this last night.
you didn't have to worry about everything out there. on the 2050, you know, today would be the first day anybody seriously said, i've got to start thinking about a trump presidency. i don't think that's why the market was down today. and for me, i think it's unclear how a trump presidency would impact the market at this point. it's unclear to me which of those policies are going to be the strongest. >> isn't that worse? isn't that exactly what -- >> no. >> the market doesn't like uncertainty. that's what it's all about, uncertainty in the markets. wouldn't that be the big cloud over the market? >> within a day or two he could come out and say, you know what, if he comes out and says, i am going to focus on fiscal policy, and that's it, that's all i'm going to do, i think the market goes up. >> i would argue we have more certainty today than we had yesterday. >> because we know it's him. >> we know it's him. a week or two ago, there would have been some question. do they feel -- >> could it be --
>> who knows. we have a little more certainty. also, you've got to think that if trump does win, then he has a congress that is more republican. maybe, you know, the -- >> coattails. >> yes, coattails. maybe he's in a spot to get something done. but what does he want to get done rather than be a protectionist? i'm not sure he's formulated what he wants to get done. >> isn't that the whole reason you're fearful? >> no, i'm fearful for a lot of reasons. >> shooting from the hip. he doesn't have a policy. a guy who will build walls, and has a protectionist policy. and the last time i checked isn't good for the american consumer. free trade is good for the american consumer. i think it's definitely not a place where we're better off. we have a guy who has proven, he loves debt. we've got a lot of debt in this country. if you think at it, we're at a place to this point people have felt that the federal reserve, treasury, whatever, are really running the show on this.
>> i think the reality is, this is the uncertainty. but if you listened to trump last night at his, quote unquote, victory speech, we came away with the different trump, the more presidential trump, i think. you listened to his tone. and actually, somehow he actually mustered a little bit of graciousness toward ted cruz. and now to -- >> that's difficult to do. >> difficult to do for him. but i think because of that, i think you've at least got a chance to see a little bit different trump. when you talk about the markets themselves, that's about china, that's about the economy, europe, anything else. >> let me ask you this then. if trump is going to be protectionist and the rest of the world's falling apart and we do fiscally stimulus here, maybe that's positive for the markets. i'm not saying it is. this is where i'm unclear, that uncertainty to me, if there's a focus on fiscal stimulus, good. if this protectionism, that's got to be bad. >> but if trump is a really
viable candidate, which clearly he seems to be, hillary's got to move toward the center. we have a less controversial hillary for the street -- >> oh, i see. witch hunting on biotech. >> she has to move, for her, she's got to move more toward the center. >> in rhetoric or reality? ultimately, it's about who controls congress and the legislative branches. >> right now we're just trading on rhetoric. >> i guess what we're saying is, we have to get back to the spot, and i don't think we know what trump's spots are. >> do we know hillary's necessarily? sometimes she's affiliated with wall street, sometimes she's against it. so i think there's almost as much uncertainty with her as there is, quite frankly, with trump. >> if you're just joining us, that is the podium, in columbus, ohio, where we're expecting john kasich to formally announce he's suspending his campaign for
president. let's get to john harward who has been covering all this. it makes all but certain for donald trump to be the standard bearer for the gop. >> that's right. he's going to get the 1,237 delegates he needs. we'll not have the brokered convention, about the protests and maybe violence in cleveland, not going to happen. it's going to be a donald trump choreographed convention. it's been a little surprising, the speed with which his rivals have decided to get out. we thought ted cruz would go all the way to california. but clearly, his will to go on was broken by that route in indiana, and the same is true of john kasich who hasn't been able to get any traction in the third wheel in the race. >> john, donald trump will name a vice presidential candidate sometime closer to the convention. he's formed a committee already. >> well, he said that he's going to have ben carson on a committee that's going to do search for the vice president. we don't have much detail on
that. he's talked about doing it closer to the convention. >> you know what, john, we're going to go straight to john kasich. let's listen in. [ cheers and applause ] >> wow. thank you all for coming. the first thing i have to do is thank my great wife, karen. [ cheers and applause ] she has endured my political career, and also, of course, accentuated it. there's no one like karen.
she's charismatic, she walks into a room and people fall in love with her. you know, when she appeared on anderson cooper, john weaver commented, and beth hansen commented that if we'd only run karen, we would have been a lot more successful. i happen to agree with that. you know, emmett reed showed up, and they're unbelievable. they're just so beautiful. and they've been so supportive. [ cheers and applause ] and they traveled with me around the country as well. and it was always such a delight to have the family on the road. and as their principal had said, don't let education get in the way of learning. and i think that they learned a great deal. and of course, i want to thank the worthington christian staff, and particularly buzz for their
patience and willingness to kind of look after our family. it was terrific. our staff, nobody has ever done more with less in the history of politics. than what the staff has done. i mean, it's kind of always been this way. it's been a mystery to me, other than to say that i like to think that they think that they've been part of something bigger than themselves. and we all want to be part of something bigger than ourselves. and i think we do it with honesty and integrity. and as a result, i think i know, and i sure hope and pray that they -- that they feel that this experience that they have had in this campaign has improved them and changed their lives for the better.
i'm looking forward to being able to spend more time with them. the volunteers, just amazing. i don't know how many, 800 people we had, is it 800 people that went to new hampshire? people who went to michigan, people were in south carolina. i mean, i would show up places and there were like people i knew. and i'm like, why are you here? and -- but they were believers. and i could never thank them enough for the long car rides, and in the snows of new hampshire, they knocked on doors, and in the rain of south carolina, they knocked on doors. they really gave of themselves. my mother used to always say, never forget the volunteers, johnny. and they are always the ones that have given me the octane, the fuel to be able to carry out my purpose. and i want to thank the people who gave the money, the
financial resources. we never had all the money we wanted. we were probably outspent by 50 to 1. but we were never, ever daunted in that. and we just got up every day and did the best we can, and of course, a big thank you goes to beth hansen, who was the campaign manager. [ applause ] and did everything she could possibly do. and my dear, dear friend doug price, who -- [ cheers and applause ] well, we start getting into these names. but as i mentioned, i think emma said, well, mr. doug, didn't you travel with my daddy for, like, a year and a half? and reese looked at him and said, how did you ever do that? but we had a great time. and we're going to have a lot more fun in the future. and of course, the kitchen
cabinet, i look at joann davidson and bob klafky, and jim, the only guy i know carried more luggage than an entire circus crew. it was just unbelievable. and i know i'm leaving some people out. but i want to thank every one of you. you know, i visited these beautiful, beautiful towns in new hampshire. and people really counted me out in new hampshire. but when we hit our 100th town hall, it was remarkable. those beautiful towns. i will never forget the people of new hampshire. we moved from new hampshire, you know, in the far east all the way to the excitement of california, even being able to sit in traffic in los angeles. it was a big part of it. and i just love california. and what it means to our country.
and the excitement that it breeds. i remember we were in the upper peninsula of michigan. never knew where it was. heard about it all my life. i never knew it was located above wisconsin. and we landed and everybody was looking at their phones, and i said, would you all please put down your phone, because this is a winter wonderland. this is magical, what we're seeing here. what the good lord has given us. to the energy of miami beach, florida, for one of the last debates. it was interesting, they didn't think i could make any debate. and i made all 13 of them. in fact, won a couple of them. as for my beloved ohio, the people here, i cannot tell you how much i appreciate the opportunity that you've given me to be a leader in this state.
the people of ohio have given me the greatest professional experience of my lifetime. i've tried to pay them back. and last night in cleveland, a woman, african-american woman said, you made promises, and you kept them, and that's why i'm here tonight. because i believe in you. that you brought our people together. well, it only happened because the people gave me a chance. and everywhere i went in america, everywhere i went in america, i told the people about our beautiful beloved state, and held ohio high. and i think gave people an impression from one end of america to the other that ohio is a special place. and i expect we're going to have more visits as a result. i marveled at my colleagues who held public office. they knocked on doors, they made phone calls.
and i mean, these were people who came from the legislature. i mean, when you're an executive and you have to deal with the legislature, it's not always peaches and cream. but yet these legislators, the leaders, the speaker of the house, the president of the senate, some of my statewide colleagues like the attorney general, just incredible that they would have come out and honored me. frankly, i was so humbled by the fact that they came, and they love me. they encouraged me. the people of our country changed me. they changed me with the stories of their lives. we all remember that hug in
south carolina from that young man who had found despair, and then found hope somehow, and he just wanted to give me a hug. and the country marveled. but you know, that was one of a series of these things that had happened. the gentleman who showed up in new hampshire, he said, i don't think i've warned my son enough about the dangers of a certain type of cancer, and now he has it, and i'm blaming myself, and he put his arm around me and cried. and i said, sir, it's not your fault. you didn't do anything wrong. you're a great father. you come here all the way from new york to tell me about this. take the load off of your shoulders. he wrote us a letter saying that that little conversation made a difference with him, and when we
went to new york, months later, standing at the rope line was that man. he said, i want you to know my son's doing much better. and i wanted to be here to thank you for taking the time with me. we were in a hall in michigan, and a woman stood up and showed a picture of her son who had taken his life. we talked about faith, talked about her son and where he was, and everybody in that hall embraced that woman and made her feel that she was not alone. see, stories like this occurred all across our country. and i think it's, frankly,
because for whatever reason god gave me the ability to make people feel safe. and they came to these town halls where they were absolutely magic. you know, i've learned something, folks, everyone here, that we all need to slow down our lives, slow down our lives and listen to those who are around us. look, let me be clear, we all know that economic growth is imperative to the success of our country. economic growth gives people an opportunity to realize many of their hopes and dreams in life, and without a job the family's weaker, the community's weaker, the neighborhood's weaker, the state suffers, and our country struggles. and i can tell you that economic growth can be achieved by our public officials if they just do their job. but they have to ignore polls.
they can't focus on focus groups. and they have to overcome the fear of reelection or criticism. see, the formula is simple and it works. it is common-sense regulations that don't rush our small businesses, because that's where our kids get their work now. increasingly. that's the fastest area of job growth. we know we need to lower taxes for individuals. and we have to cut taxes for businesses so they start investing in america, not some country located in europe. and we need a realistic path to balance the budget. and frankly, nothing more imperative than a balanced budget amendment to the constitution to force the congress to do their job. and we have to keep in mind that we need to shift power, money and influence from the government back to the people wherever we live. and we have to begin to run america again from the bottom up.
however, the spirit, the essence of america, lies in the hearts and souls of us. you see, some missed this message. it wasn't sexy. it wasn't a great sound byte. but i saw a young lady, i saw a young lady in philadelphia who came to me and said, i'm a producer on a major cable show, and i watch your town halls and talk about the spirit of our country and my role. and she said, you've affected my life. you see, i believe we all need to live a life bigger than ourselves. yes, we need to live a life a little bit bigger than ourselves. we need to reach out to help lift someone else, because you
know what? it comes to us naturally if we let it. you see, we are as human beings kind of hard wired to want to give someone else a lift, give someone else an opportunity. and when we reach out, it's so interesting, and when we reach out and help someone else, you see what it does, is it opens us, ourselves, to recognizing and receiving the help that we need in our lives. it's a virtuous circle. when we help someone else to rise, it opens us up to receive the things that we need in our lives, regardless of who we are. to paraphrase an old adage, i sought the greatness of america in its harbors, and in her rivers, and i did not find it. i sought it in her fertile fields and boundless forests,
and did not find it. i sought her greatness in her halls of congress, and i did not find it. you see, after this campaign, i see it in us. when we come together, when we lift one another with our eyes on the horizon. throughout my campaign, i have said, the lord may have another purpose for me. and it sent all the pundits atwitter. does that mean he's not committed, or he's not focused, or he's not energetic? it shows to some degree how little they understand about life. you see, i have always said that the lord has a purpose for me, as he has for everyone. and as i suspend my campaign
today, i have renewed faith, deeper faith that the lord will show me the way forward, and fulfill the purpose of my life. thank you, and god bless. [ applause ] >> again, that was john kasich officially suspending his campaign for president of the united states. leaving donald trump as the gop candidate. let's bring in john harwood for more. john, really, this echoes sort of the theme, the feeling all throughout the campaign trail of the kasich campaign. >> that's right. john kasich ran a very human campaign. he showed vulnerability. he wasn't using the apocalyptic rhetoric. i've covered him for a long time. covered him for 25 years when he was the house budget chairman. covered his first presidential campaign, which didn't last very long during the 2000 cycle. now again. and this is somebody who's run a very dignified campaign, a classy campaign.
he only won his home state. didn't seriously threaten the candidates ahead of him. ted cruz, much less donald trump. but he has decided that it's simply not viable to continue. his heart wasn't in it. they continued fund-raising, the continued travel with no prospect of winning. and he spoke effuseively about his staff. he talked about finding another purpose for his life. and imploring the rest of the political system to care about other people. there's a lot worse things than a message like that. >> any shot he could be on the short list of vp candidates in your view? >> sure. ohio's a key state. no republican's won the white house without it. donald trump said today he would be interested in vetting john kasich as vice president. i just don't know if john kasich would be interested in running with donald trump. i think one of the challenges donald trump is going to find is finding a mainstream politician who wants to tie himself to trump's candidacy. >> john, thanks very much.
>> you bet. >> let's talk about that. what kind of person could trump choose to be his vp candidate? that would make him more palatable, or better for your portfolio? >> how about somebody -- >> your portfolio? >> oh, the portfolio? i thought you meant in terms of putting him out in front a little bit. like chris christie. he needs somebody that's got some experience, that he's going to have to be able to lean on. whether man or woman, to really push this thing forward. so we really understand exactly where he stands on all these different categories. >> for a portfolio, for me, i've never made an investment decision on who the vice president's going to be. you forget about them once they're in office. >> but this is a different president. this is a guy who's not held public office. >> no matter who he picks, that person's going to be marginalized. donald trump is not the type of guy, let's all hold hands and
s sing kumbayah. >> you will not believe which wall street legend just did an about-face and is now backing the donald in the race for the white house. he'll be here to explain. plus, the after-hours action in tesla. fitbit and whole foods also on the move. live team coverage, we'll bring you all the headlines as they break from the conference calls. and all the biggest names on wall street making very tough phone calls on the air today.
breaking news out of the zone conference. kelly has all the headlines. >> hey there, melissa. david einhorn always a big draw at investment conferences. two ideas he has talked about so far, and he's still on the stage. a caterpillar short. this is an idea that's been out there among some of the hedge fund investors for a while now as a correlation to china. acknowledging people have been sort of bearish on cat. he essentially thinks people are not bearish enough. he said given the downcycle, iron ore and other commodities, expectations for cat are not low enough, he thinks the trough in 2018, and he thinks the current $3.50 per share will look mid cycle at the end of the day. he's still talking about it, so we don't have all the details, gm, general motors. he thinks it's cheap.
as a portion of the s&p 500. he said they're financially healthy and thriving. likes gm, doesn't like cat. >> kate kelly, thanks so much. the cat shares are down by 1.7% on very late volume. as for general motors, doesn't usually trade in the after-hours session. at this point on caterpillar, the stock is up about 10% year-to-date. is the short too late? >> i don't think it's too late. i would say it's more for a trade at this point in time. what he's talking about is the structural change that china is going through, from the commodity-led economy. that's a structural change. the other places i would look to play this theme going back to the copper market, if china sells their copper stockpiles like they did with steel, the fdx is in trouble, too. >> i was going to say, tense words, not very nice words about cat's ceo, and whether or not we can trust the guidance that we
give investors. >> well, yeah, i did question the credibility. because so many times they have put out numbers, and then missed shortly after. and yet give guidance for the rest of the year. so how come -- why is it in november you said this, january is a different world. we feel comfortable where we'll be in december later this year. multiple times that has happened. i realize we're in a very, very difficult trough, hopefully trough for them, but still, that was -- why put it out there if you can't do it. >> would you be with einhorn on this short? >> i would. i don't love the short game as a best idea kind of thing. >> yeah. >> and i'm a little surprised that, you know, some of -- well, we know her ballife has been a difficult one. >> what do you say? >> a company's whose margins haven't deteriorated. this is a global company. great valuation, 5 1/2 times.
you can get behind that valuation even if you think the best days are behind you. >> as we go to break, let's look at shares of tesla. that stock is up 5% in the after hours session. reiterating the short on the stock. the conference call is just getting under way. we'll hear from the ceo in his own words. in the meantime, here's what else is coming up on fast. that's what traders think could happen to the banks this summer. and we'll tell you what has them so freaked out. plus, america. the man who sucker punched vince mcmahon. and became a wwe hall of famer, is one step closer to becoming president. and it's got one small wall street firm scared out of their minds. the name of the firm when "fast money" returns. zero-gravity drop...looka
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welcome back to fast money quoeg. we've got major earnings reports after the bell. we've got every angle covered. the tesla call just about six minutes in right now. courtney regan back at headquarters on whole foods. phil, we're six minutes in, but in the shareholder call there, sending shares higher. >> eli musk is talking right now about the goal of increasing production by 500,000 vehicles annually, by 2018. again, that's an increase, moving ahead two years compared to the previous guidance. that's the main thing we're going to be focused on during this conference call. he's addressed it right off the bat. he's incredibly optimistic about tesla becoming a better manufacturer. that is not going to come without some money. they have not said they're going to raise money through a secondary stock offering, or some type of a capital raise.
but that's the implication considering the fact that the company is now going to not be cash flow positive for the year, because it's going to be increasing its capital expenditures by 50% in 2016. we're going to hop on that call in just a little bit. one other thing we're waiting to see if there's an update on model 3 reservation, the most recent update we've had is a couple of weeks ago in europe. musk said they were approaching 400,000 in model 3 reservations. we'll see if they have a more concrete number today when we get a chance to ask them that question in about five minutes. >> have they addressed the change in the production line? that seems like a big one. especially with the enormous ramp. >> not specifically, karen. but that question will be coming up. elan musk did say i don't want to get too tied up in some of these short-term production issues. that executive change when it comes to the vp of manufacturing
and will be addressed by the reporters on this call. >> phil, see you a little later on. tesla jumping as the call is about eight minutes in at this point. in the shareholder letter, it says, increasing production over the next two years, challenging what will likely require some additional capital. that's where i would imagine on the conference call, a lot of questions will be about that some additional capital line and what that actually means. >> not only that, but how about just the idea of actually getting the execution to be able to do that. the production's been one of the big problems. every couple of weeks we seem to read about something, with the x, or how are they going to get the 3 out. when you look at the numbers now, think of 2018, this could accelerate to a 500,000 number, that seems extreme to me. i love the optimism, i'm just not sure where that's coming from. we've seen nothing, and they're losing these key employees that are part of the production process. maybe the production process has been the problem.
>> we were talking about jim, short tesla, and said the flow of key executives out the door, that's one of the reasons behind his short. >> what would that be, right? either they don't believe they can actually do this in a mass scale. this is a nice, as i think on the "closing bell," they said a nice little small auto company. that's fair. getting the mass scale on this company is about the next step. model x is a significant manufacturing issue. comes down to valuation. if they can get 500,000 units, two years ahead, think about eps by 2020 being significantly more. that valuation suddenly to me is explainable. it comes down to demand. i think, you know, it's really about what goes on with the model 3, the mass market. that's where these guys need to be. >> demand is there, though. i think demand is already proven. >> it's being priced on 300,000, 400,000 preorders. put 1,000 bucks down that's refundable. >> you have all kinds of dough.
if you talk about the same people buying the gulf, which isn't a terribly cheap car, but if this is going mass market, there's a lot of competition. >> do you think 50% of the people are going to cancel? nobody's seeing the car, driving the car. >> valuing the stock on that, yeah, that's a thousand bucks for somebody buying a $100,000 car. >> no, it's $30,000. >> either way. >> i think that's actually a big difference, $35,000, probably more when -- like $42,000. but every car they've had ever is late. people should expect this will be late. especially a big ramp like that. you know, the debt markets at the moment are wide open. the paper of 2021, the yield is 3.7%s. >> that's pretty good. >> that's pretty good. there are places for them to -- >> a lottery ticket that you're
willing to buy. >> the product is magnificent. >> but for him, it wasn't about the car, it was about the battery. >> and they actually said they're going to make their first cells. >> they're a battery company, not an auto company. >> more on tesla later in the hour. in the meantime, stel ahead, one wall street legend backs bernie sanders, or had backed bernie sanders, said he will now support the donald. why is he doing an about-face? get the shares moving lower after-hours.
he's going to win. and he's very comfortable with debt. we know that about donald trump. did you know that ronald reagan's slogan in 1980, do you know what it was? it was, let's make america great again. it actually was. so it's sort of reactionary. he's more like reagan than people think. reagan was a debt-based economic guy. i think trump will be. >> talking about what trump would mean for the markets. he's not the only heavyweight
getting behind the donald. asher is the original corporate raider, also the founder of edelman arts. the last time you were here, you expressed support for bernie sanders. so why the change at this point? >> no change. still supporting bernie. but i think that donald has more of a chance of being independent than hillary. if he were to get in. we don't, but he does. >> what will happen with the markets, with the economy if there were a donald trump presidency in your view? >> i'm not a market person, but i would imagine the economy would do a little better than with hillary. >> what about donald versus hillary do you like donald over hillary? independent meaning what? in what ways? >> well, i mean, i think that, for example, donald would build our infrastructure very quickly. we would start with the wall. very expensive, the wall. it would put people to work. don't you think?
>> i'm not sure i agree with it. >> do you agree with the wall? or do you like the -- >> you asked the economic question. we can go back to velocity. but the wall would bring economic velocity. don't you think? >> you like the impact a wall could have. >> you would be much better off doing roads. but donald is absurd, but he would still be better for the economy than hillary. >> how about in a world where at least we've heard about tax cuts, but yet we're keeping entitlements. it's easy to attack taxes and not have a solution. and actually, possibly keep the same spending levels. what do you think about that? >> you have this very strange word that you use on this show. called entitlements. do you pay social security? >> absolutely. >> is that an entitlement when they give it back to you? >> i'm not sure -- >> you know, i pay. >> do you pay medicare?
is that an entitlement, you end up paying for your own medical in the future? i don't think so. >> we're all paying our way. >> i'm curious on the debate between the fiscal stimulus that you're talking about, building the wall, versus the protectionism that he's talked about. do they equal each other out? is one more important than the other? >> protectionism is protectionism. we've been trying the other side for a long time. we have an economy that's falling into the sea. we might as well try something else. it's really time to keep the jobs here. the only way you're going to keep the jobs here is not to give them out to cheap labor and the rest of the world. >> asher, we've got breaking news, but thank you so much for joining us. asher edelman here. >> just kind of strolled off. >> trump more independent? >> the trump business background certainly makes him more interesting. i can understand why asher was leaning towards trump versus hillary in who would be better
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more breaking news from the conference this time from jim. >> hey there, melissa. interesting short released. the johannesburg, south africa based telecome company. he talked about sub saharan africa, how the african economies in many cases still overdependent on china. notably bearish on china. skeptical of their growth, their credit reliance and commodities. against the back drop, the telecom company is more competition. it's overexposed to the economy specifically in south africa. and in nigeria, which he said are part of this macro hurricane story as he called it. those shares traded on the pink sheets here. but of course, on the johannesburg exchange, i believe
looked to be showing a dip down. we'll see what happens as the markets open tomorrow as well. >> thanks so much, kate kelly. got to go to the ambassador to trade this one. fundamentally, the back drop in south africa, mining country. >> stock trading about 12 times earnings. $17 billion company u.s. to me, again, it's exposure in nigeria, exposure across that region where we know those are oil economies that are stumbling here. the total consumer story to me is really why you're buying it. companies like this are allowing these guys to leave technology. i don't have a position. obviously chenos has made a lot of money short big companies, and done a good job with it. this is more of a consumer consumption play. outside of their balance sheet i think will continue to do fine. >> we should note this is mtn group, the south african tellcom
company. did you see that initial tick lower? >> read carefully. >> let's get to josh in san francisco monitoring the fitbit call. that stock is tanking. >> tanking is right, melissa. fitbit, clearly what they focused on. the operating expenses which really surged, $215 million, up from $79 million a year ago on the call. fitbit's executives talking about how that investment is necessary. invest in their products, their hardware, software, what keeps them one step ahead of the competition. importantly for investors, the company's cfo suggesting that investment is going to continue. he said the company will maintain the investment in ways that is brand building. they'll invest more internationally. they'll front load their engineering costs. you'll see that having an impact on guidance. fitbit saying 8 to 11 cents
while the street was expecting 26 cents. you see the shares dropping hard here in the after-hours. melissa, back to you. >> josh lipton, thank you. all the things that require that. >> there's probably 20 different types of wrist bands now competing for fitbit. to me it seems like it's a commodity. >> this guy is an iron man, too. >> not quite yet. >> almost there. almost there. >> i appreciate that. >> anyway, still ahead, tesla shares up by 4%. i'm here at the td ameritrade trader offices. steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place and lets you visualize that information for any options series. okay, cool.
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welcome back to "fast money." tesla still higher in the after-hours session. phil? >> melissa, we're about a half hour in, and most is focused on raising the production plan. increasing its plan to build 500,000 vehicles annually by 2018 instead of the previous guidance 2020. july 1st of next year, that is when the company expects to begin full production of the model 3.
that's the mass market $35,000 electric vehicle that they just showed us within the last couple of months. here's elan musk talking about how many model 3s they expect to build in the second half of next year. listen carefully. >> as a rough guess, i would say we would aim to produce 100,000 to 200,000 for second half of next year. >> 100,000 to 200,000 model 3 vehicles. that is the plan as of right now for tesla production of the model 3. in the second half of next year. the question of whether or not they're going to be raising capital, he would not get into it. he said if you're going to raise production, you'll need more money. they'll have to do some type of adjustment in terms of capital expenditure in the future. no update regarding model 3 reservations. we were hoping for an updated number, 410,000, 450,000, how
many reservations, we have not heard that yet. we're going to hop back on to the call. >> musk was asked specifically whether there would be a capital raise to boost production? >> yes. and he wouldn't give a specific answer. >> fair enough. phil, thank you. again, the shares are higher right now by 4%. as we go, pete? what would your inclination be in tomorrow's session? >> i tend to be a guy that leans toward elon musk. he's always half full. so am i. i have to give him the ben filled of the doubt. >> how about this whole notion the not answering the question when asked about the capital rates? >> you can see why he wouldn't do it. let's say -- first of all, they might not know. if you don't have equity deal ready to go, it doesn't really make sense to float it out there. >> i think, though, we start to get a little clearer picture about the vp of manufacturing leaving now. sounds like elon musk went in
there and said, this is how much we're going to do. >> conspiracy theories? >> these guys have not hit their numbers ever. i remain skeptical. thanks for watching. stay tuned. "mad money" is up next. 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. call me or tweet me @jim cramer. got to have some growth somewhere in the chain there has to be some growth. without it. or at least the hope of it you get into a