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tv   Fast Money  CNBC  August 23, 2017 5:00pm-6:00pm EDT

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them all out together. when they managed to have a decent top line beat in a given quarter people come back to a little bit or short covering. >> manny cheirico joins jim cramer tonight "fast money" starts right now. live from the nasdaq market site overlooking new york city's times square i am sara eisen in for melissa lee. it's the battle of the smartphones. samsung launching the new galaxy note did you lose money in shares of blue apron? one top securities lawyer says you might have a shot of getting some of it back. he will be here to make his case later, it's the ad man's warning of the world the ceo of the world's largest ad agency speaking out about why u.s. companies are not spending
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as much as they used to. we'll bring you the comments first, a classic trump trade. that fell sharply today. transports now on pace for their second negative month in a row. and the airlines in the group hit the hardest. delta, jetblue, southwest, united airlines, all near or at bear market territory, which means 20% off their recent highs. which were just last month is this sending a warning sign to the rest of the market? is it a sign there is more selling to come? >> sara, great to have you with us thanks for filling in. it's a long day. 2015 transports had a miserable year at the beginning of 2016 it was off to the races i think tim was early on that one and correct. i have to tell you something it is not just the airlines, as you mentioned. railroads have been under pressure for the last few weeks. federal express was quietly sold off a few percent. a name like priceline,
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impervious to any bad news seemingly has sold off one thing i have said for quite some time now, the iyt transport's etf. if it holds 160, i think the move to the up side is intact. we're getting perilously close. >> tim, is it industry-specific issues plaguing the group or a broader signal about the economy? >> if you break down the transports into the shippers, rail, airlines the airlines, to me, which i think still look very interesting and i better because they're down united down 25% from where i thought it was interesting, these guys reported early in the earnings season. ultimately the fear of pricing free fall what's going on. this is the fall season. dropping prices close to 20% there seems to be a concern about capacity online. nobody believes the airlines are in better shape. hunter wolf upgraded a few of
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these names mostly on valuation at this point. if you put a ten time multiple on united. that's a $93 stock in 2018 it's a $63 stock right now i think they're very cheap i think we have -- go ahead. >> if they're going to change their ways the thing about the airlines they have been disciplined about capacity now they are going to add capacity potentially there is going to be a pricing issue. to me that concerns me maybe they don't deserve a ten times multiple maybe it's the airlines of the old. even warren buffett this week was getting out of them. i would stay away. >> pricing has been relatively stable oil has come in. today the action over the past few weeks is a result of crowded positioning by hedge funds hedge funds were ultra long airline stocks they got out and forced selling occurred on a light volume day which pushed the group down. jetblue, below $20 it's a buy here.
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i would buy delta here i think -- they were caught off guard. dollars barcelona. >> they're at capacity and there is pricing concerns. >> the scare is business travel in the fall. that's seasonal. that's scaring the heck out of the hedge funds, so they're forced to sell. >> you have every reason to be cynical about an industry that every time they had the opportunity to fix themselves have not the pricing free-fall concept is made worse by oil prices there were a lot of hedges the guys put off in a world where the oil market has actually been less predictable in that it's been more stable than these guys thought, they threw a lot of money at the hedges and they lost money on their hedges it's a temporary phenomenon. not a reason to sell. >> guy, when some of the bearers for the market point to the fact that the dow transports have been nowhere for the year.
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the russell index. also nowhere are these bearish signals? >> so, i think the bears -- people who -- their dogma that suggests the suggests they're bearish, they say yes. i probably fall in the former camp in terms of the iwm and the transports, we're getting dangerously close to levels where they break down. i think trump's nafta comments in the speech last night did not help specific rail lines like my final pick last night. kansas city southern you mentioned it today is it what he says or what he does you recall the tough talk about mexico six, seven months ago kansas city southern was a huge buy at the time. i still think it is right now. >> in other words, don't necessarily trust what he says last night he said he thinks we'll have to withdraw
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that's a quarter of the global economy. >> i am sorry. last night was trump going back to a core power base and putting a lot of people standing behind him on a podium that will cheer at anything. that's how i feel about last night. back to the transports, are these a tell on the economy? fedex recently told us that everything that they're seeing in terms of the macro trends in their industry are as good as they've been in a long time. secular transfer pricing for small shipping packages has never been better. this is a case where a market has been overly trading itself. >> i agree. >> some of the names are setting up for a big pickup. i am not jumping out fedex is a name i start to nibble. >> key point on fedex. that's where we started with is this a warning sign for the rest of the market. the fact that we spent the last five minutes talking about only airlines says no ups, fedex
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if these stocks were hitting lows for the year i would be concerned. if they were saying the sales trends and shipping trends don't look that good, so fedex, ups, those are the places i would play in the transports. >> still, what was out there today, david, the fact that president trump did say, we'll shut the government down if he doesn't get his $1.6 billion border wall. that has to make investors jittery. is this a trump trade? >> as far as the shutdown is concerned, when we think about a shutdown that's 30% it's not necessarily the entire government so i look at it and say, in general, i don't think the market was reacting to that today. light volumes in the street. we anticipate that these are holiday weeks. i look at the transports and say weak, obviously, but there are pockets within the transports that you look at to buy and pockets you avoid. i look at rails. i would avoid the rails. i don't look at rails as being an investable area second half comps are much more difficult. i like the airlines. jetblue i like below 20. delta is a name to buy.
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let's go off the charts. robert is here to break down what's key. >> thanks very much. let's look at a couple charts. starting with the s&p and each of the sub indexes in the transports and pull the story apart. starting with the s&p. we had a nice pullback to the hundred-day. write off key support. all looks good longer term trend for the market still positive in theory, from a standard technical analysis standpoint, you want to buy the dips everything looks fine. why are we cautious and remain cautious since we went into this may period there is a lot of divergences developing in the market, i think we really have to pay attention to the technicals. the next chart this is the transports the transports really just in a big trading range. that's what we saw in 2016 not a problem. in fact, they took off after the big trading rearrange. in theory you say they're setting up for a rally
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in 2016 the relative performance was building to the upside in anticipation of that move. that's opposite of what we have here coming into may the relative performance began to diverge lower highs in terms of relative performance. and again here this becomes a concerning point. especially when we go back and look at where we saw the last decay in 2015. perhaps these are in broad consolidations over the last number of months and quarters and they do resolve. but right here, right now, it's a concerning sign. is there a trade many of the stocks are deeply oversold the airlines this is a horrible chart but it's a big decline there is probably a trade setteding setting up here. like in 2015 with the ongoing decay, we have divergences developing a new low. i think this is a cautionary statement. there is a trade i don't think it's an investment moving on to the rails
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same type of thing pull back to the 200-day moving average. very nice. big consolidation. in theory, this is where we want to buy it. we are seeing incremental relative performance decay similar to what we saw in 2015 we have been cautious since may. we continue to be so on the margin, incrementally across the market, we are seeing areas that are decaying. things like industrials starting to roll over we'll stay cautious into the fall. >> you have to bring him to the desk. >> i was waiting for you to invite him. >> you are the center square you make the decisions. >> i thought this was a guy adami -- >> welcome to the desk. >> have a seat. >> let's do this. >> what other parts of the market are you watching besides the transports >> it's obviousta technology is leadership relative performance leads to the upside incrementally you are seeing this decay we have banks, sort of on the margin one week they're good.
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one week they're bad you guys have argued about this week over week 10-year, 30-year drifting lower like in 2015 there are warning signs in the background semiconductor, an area we have talked about since may, is an area that's starting to erode. we think that's a broader decay taking hold. be very careful going into the fall. >> that means going in a different direction than overall technology >> picture point the semis took off in 2016 huge uptrends into '17 they've broken those in real price and relative price things like klac, amd. come down to support levels. you get a bounce if the bounce doesn't have upside sustainability we are in trouble going into the fall. >> my question the transports my level on the iyt is 160 the transports led us out to the upside in the beginning of last year is there a level of if the transports break down it drags everything else with it? >> looking at the dow jones
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transport index. it's rallied to the 50-day starting to stall. rails are part of that airlines another part. taking out the 200-day will be a signal or cliche breakdown that people will be pretty concerned about. >> robert, thank you what did you buy today, guy? >> biotech generally speaking traded pretty well held the ibb, the $300 level i still think biotech is okay. my final trade last night. kansas city southern down today on the trump comments i am more of a bull. i stick with that one. >> i added macy's today. the retail sector is another one of these places where we say the charts look awful. macy's is one of the worst charts i started nibbling last week it's probably more of a trade. on an asset basis the company is very, very cheap just gotten earnings out of the way. the whole sector was pushed around in the steel and metals and mining space, continues to work. a lot of the names breaking out across the industrial metal
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sta space. >> strong copper strong emerging markets. those are risk-on signals with what's happening in the transport. >> that's why it's important to talk about the transports when we talk about the airlines they are having a disproportional effect on the overall transport sector that being said, what did i do today? one of my final trades last week, walmart. i took some of that off today. the price action today scared me a bit. >> what did you buy? >> ahead of tomorrow's earnings, i love the stock and took advantage of the weakness. i like jetblue below 20 bucks. a lot of action in the transports at this desk. speaking of the trump trade, we should note that somebody' e talking to paul ryan did you lose money on the
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blue apron ipo you are not alone. now, 23 separate lawsuits have been filed on behalf of shareholders we'll talk to the lawyer representing many of the investors. later, could espn's decision to replace a broadcaster whose name happens to be robert lee invite more scrutiny for the worldwide leader in sports this is a crazy story. we'll debate it. much more after this on "fast money. what powers the digital world. communication.
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see how much you can save when you choose by the gig or unlimited. call or go to xfinity mobile. it's a new kind of network, designed to save you money. it's been a tough first half quarter two was weaker than quarter one. the weakest for us was for the u.s., which i think was pretty much the case across the industry i think that's where the pressure has been amongst the heaviest. >> that was ad mogul sir martin sorrell on kemba walk"squawk one street." he talks about the forces the company faced in a difficult first half of the year he called the pressure an industry-wide problem, across the united states. question if the economy is so robust, what's behind the weakening ad spending from the largest companies in the u.s.? >> it's not weakening. overall ad spend in the u.s. will be up versus in 2017.
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you're looking at tv ad spend being down that's because of the olympics and the election in general ad spend will be up in '17 at the end of the day, i look at facebook, google i look at the facebook ad spend roughly will be at 40% their ad revenue will be up 40%. google something like 20%. in general i look at an ad sort of agency as a travel agency, right? there is not necessarily a need. as facebook is going in and doing all the work measuring, targeting. they can go direct if i am procter & gamble spending hundreds of millions of dollars to advertise through facebook, i don't necessarily need an agency i can go directly to facebook and get the same exact thing done because they're doing all the leg work. >> is your point that ad revenues are -- the margins in the ad business are as strong as they have ever been? because they're not. >> no. they're not. ad businesses in general, the revenue will be impacted because people will go direct. there is no reason to use an agency in this case. i look at facebook
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they are doing all the work as far as whether or not -- what the penetration looks like the sort of alignment with the advertiser and target audience all that stuff is done internal. they have the data and they sift through it there is no reason for the middle man. >> he talked about technology which he called an opportunity, not a challenge. he said a lot of their big clients are facing activist pressure zero-based budgeting fighting off hostile takeover attempts by kraft, heinz they're cutting back. >> it's a difficult environment for ad agencies. yeah, is technology maybe an opportunity if i was sitting up ahead of an ad agency. i look to figure out how to get into the game, how to beat facebook and google at their own game i don't think they can do it it's a melting ice cube here, i think. but adding to that is exactly what you said. a lot of pressure on these companies to advertise
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correctly. we have seen some of the -- some of their ads showing up where you might not want them to it is a completely different landscape. these names, the advertising agencies are a no touch for me. >> wpp's issues. sir martin has a lot of pressure on him he made a number of acquisitions he hasn't been growing organically. google is the biggest ad agency in the world that's the best valuation. and alibaba. >> wpp, its worst day in 17 years. the home builders etf. xhb falling a percent. new homes, a seven month low pulte down 4% from its 52-week high lennar down 8% kb home, toll brothers both down 9% lowe's lower today off earnings guy, home buildings and home improvement. >> to me lowe's -- the lowe's
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report was the most interesting. why? because to me it was a complete juxtaposition as to what home depot said a week and a half ago or so. what does it mean? the gap between the two will continue to grow, and although home depot is off probably 8% from its all-time high, if you're playing would you rather, which is a game we play each night at 5:00 -- >> i have stolen that and used it on other shows. i give you guys credit. >> home depot. tying it back to the transport one thing that's the canary in the coal mine. you see stuff like lowe's and home buildings home sales down 9.4% that's a canary in the coal mine transports carry lumber, housing supplies, all those things so watch this space. it's not a panic yet, but watch the space. >> there is no canary saying the macro is poor. the housing sector is alive and well the tailwinds for the housing
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sector economy are fantastic the amount of private, fixed residential investment relative to housing, it's a very important number people's houses are up 10% year over year for the last three years. people have equity and they're going back to the stores the housing sales are a function of not a lot of supply, frankly. that's not necessarily a function of how bad the market is. >> let's see what new home sales is out tomorrow. a brand-new samsung galaxy he says crushes the iphone in one key category after you see the test, you might agree. here is what else is coming up on "fast money." >> i think i want my money back. >> yeah? that's what some blue apron investors are saying the man behind a massive shareholder lawsuit tells us why they may have a case plus. >> what's in a name? >> if your name is robert lee,
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quite a bit. it might explain a growing controversy at disney's espn we will exaiwh "st ne rurnsn enfa ♪ just a good old boy "fast money" move of the day sponsored by powershares qqq
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welcome back to "fast money. live at the nasdaq market site here is what's coming up in the second half. blue apron tanking more than 40% from its ipo if you're one of the people who lost money, stay tuned a top securities lawyer says you could be entitled to some of that money back.
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we have the details. plus, we are still a few hours away from the big powerball drawing. our traders have four stocks that could help you hit the jackpot without buying a ticket. for samsung, launches its highly anticipated galaxy note 8. seema mody is out there where the launch took place earlier today. seema. >> reporter: the big challenge for samsung is regaining consumer confidence after the tumultuous global recall of the note 7 last year a pr nightmare it cost the company billions of dollars. as part of samsung's comeback strategy, it unveiled the galaxy note 8 here in new york, a very flashy event they rolled out the red carpet for investors, analysts and tech enthusiasts. it's a big screen. 6.3 inches much higher than what's in the market right now a powerful camera.
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that got a lot of buzz today optical image stabilization. a dual-camera lens the price point, well, it will cost you reportedly over $900 depending on the carrier that you have keep in mind, this phone also comes with a nifty accessory, the specialized "s" stylist pen. the question is whether tit's enough for iphone users to switch here is what one iphone user told us. >> i use an iphone right now it's likely i'll switch to whatever the next iphone is, be it the 7s or 8 the note 8 has given me reason to reconsider that it is a bit bigger than i like, but i do -- i am impressed by the dual camera. >> reporter: but apple -- samsung's competition is not just apple the latest data shows that both
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apple and samsung lost market share in the first quarter of the year to chinese players. these lower priced operators that's something to keep in mind as we look to see whether the galaxy note 8 will be successful also, the pending iphone 8 launch, expected in september. meantime, the stock has been up already 30% this year. >> outperforming apple by a little bit seema, thank you a great set up. mashable editor at large and chief correspondent lance ulenof joins us he brought the new note. >> it's a beautiful phone. i want to say samsung is back but it's early it's the rise of the note after the disaster of last year. it is a 6.3 inch infinity display. the first time the infinity display hits the note device the note stands out due to the "s" pen. all the functionality with it.
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responsive, pressure-sensitive device the thing people are getting excited about is the dual camera two cameras, both with optical image stabilization. 12 mega pixels apple has with the iphone 7 plus, portrait mode. basically live focus is their portrait mode on the note 8. but the difference is i can control it while i am taking the photo. i can dial it up, dial it down both during when i am taking the photo and after. that's a big difference between these two devices right here. >> is the camera enough to get people -- >> camera is super important. >> is bigger always better >> i talked to coe about this. dj dj coe about this. prior to samsung people laughed at really big screen devices now everyone wants them. why? they spend all of their time with these devices, all day
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long bigger and better. also, this is more of a specialized device it's more for creators, productivity people. they have the ability to open two apps at once with a single click. it has sings the galaxy s clementa pinckn8 had. near water proof water resistance dust resistant gorilla glass. here on the show we couldn't help but wonder nhow the note 8 stacks up against the iphone 7 plus we sent tim and guy to times square, took the exact same pictures with both phones. here is the first picture. which one was the note 7 the note 8 excuse me. which one was the iphone 7 plus? >> i think iphone is on the left. >> i think the note 8 is on the
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left. >> note 8 is on the right. >> the left is better, certainly. let's reveal. >> i don't know. i like the right one look at me guessing the right phone. >> portrait mode is not even showing up on the left-hand side it's unclear we did have a portrait mode shot from the iphone 7 plus, but it was definitely not as good as what we saw from the note 8, which was very -- i mean, right now you are only able to take -- it's on or off with portrait mode i love portrait mode in the 7 plus i used it in italy we loved using it. but having that control is a very big deal. also, you get two photos at once you get the regular shot and the wide-angle shot. so they're both there. you can turn it off if you want. >> which we need with guy. the wide angle. >> another one a second test. see if you guys can figure out which was taken by the note 8 and which one on the iphone here >> note 8 on the left. >> definitely the left. >> it's the same kind of color
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difference. >> look at bk connecting the dots. >> there we go. >> the note 8 makes you look slimmer, guy. >> thank you, sara maybe i should get the note 8 this holiday season. >> for this hot second samsung is ahead of the game in the camera phone space we know apple will release something new, and they've -- just the same as samsung, has focused heavily on camera technology they won't cede that easily. it will be an insane time for consumers. samsung thinks 50 million people are waiting to upgrade. >> what's the price? >> $929. but, if you owned a note 7 you get a $425 recent, and apparently note -- even the people who had their note 7s taken away because they might have blown up still want this device they're still devoted to the
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product. >> lance, thank you. >> unbelievable. >> the final verdict on which stock you would buy. samsung has outperformed but apple has had a good year. >> for me, samsung i think it's a better phone. from what we saw today it's outstanding. i think samsung has to prove themselves once again whereas apple has a lot of runway. in terms of the question you asked to the desk before, for tim's sake i hope the answer is an emphatic no. >> thank you i will take it from here look, samsung has nothing to prove. this company in their second quarter, record numbers. consumer electronics business pales to the display and semiconductor business the refresh cycle has everybody in play. i think the phone will steal people back. i would rather be long samsung. >> i would rather go apple samsung has always been a better phone. but apple has a cult following for bk it's apple. >> they have the chips,
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refrigerators, everything else. >> they do if you buy it, you have a global thermo nuclear war threat. but beyond that, it's fine. still ahead, the pressure is mounting for blue apron as the company faces 23 lawsuits over its ipo. we'll talk to one of the lawyers representing investors about why he thinks they deserve some of their money back plus, espn facing backlash today after removing anchor robert lee from the uva football game because of his name is espn running the risk of becoming too political fa meyafr e teth break.
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. so, what's in a name well, if yours is robert lee and you work at espn, turns out quite a lot. cnbc's eric chemi has more. >> reporter: they decided to change announcers for the univers university of football game announcer was robert lee they didn't want the name to be a distraction. espn put out a statement saying we collectively made the decision with robert to switch games as the tragic events were unfolding in charlottesville simply because of the coincidence of his name. in that moment it felt right to
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all parties. the swap has critics rehashing a familiar claim that espn viewer declines and layoffs are a result of the company becoming too political. long-time sports center anchor linda cohn made the point in april saying i felt the old-school viewers were put in a corner and not appreciated with all the other changes. they forgot their core others have pointed to espn giving a courage award to caitlyn jenner and discussion on race relations espn pointed us to a research report suggesting politics is not influencing their ratings. industry experts say the declines are mainly the result of cord cutting. as disney's most important asset this will be a trend worth watching like so many media business stories, perception can create its own reality. espn directed us to an e-mail it sent to a new york magazine writer explaining the decision was mutual as lee hosting the game could subject him to memes and jokes. funny enough that's exactly what's happening
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anyway with twitter users photoshoppingp of robert lee onto robert e. lee's body. >> thank you, eric that made us laugh. let's trade this besides the fact that this is such a bizarre decision. i don't get it. >> frankly, to the espn viewer it's somewhat insulting. i have to think to most espn viewers could figure out the difference between the two that being said, i don't think that this is an issue for disney in other words, switching the anchors. they have bigger issues in terms of cord cutting. the may the media industry is being disrupted at this point. disney seems to be holding a base i don't think you bail on disney. >> they approached him lee is a young and new play by play guy what's he going to say the network made the decision. be clear about this. i agree with brian linda cohn, fantastic. huge ranger fan. >> she knows, by the way. >> i would love to be a fly on
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the wall in the discussion of how they made that discussion. it's insane. it's not affecting disney core disney has problems with espn because of cord cutting. period end of story nothing to do with the political stance. >> i am certain robert lee is an unbelievable sports caster i am certain none of us here or anywhere heard of him. now he is a household name in a bizarre twist they may have done more for his career with this than they could have done with anything else. >> you're long robert lee. >> buy on disney it's too diversified to be worried about espn. still ahead. blue apron feeling the heat as class-aucti action lawsuits mout still a few hours away from the $700 million powerball drawing. our traders give you four jackpot stocks
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up leslie picard join us with the latest. >> it's one of the most troubled ipos in a long time. lost $855 million worth of market cap since first debuting. the stock was basically cut in half in looking at the deal and trying to figure out what's going on, you can trace it back to pricing on june 16 amazon announced its intention to acquire whole foods. the entire street at a time was concerned that would cut into blue apron's share, that it would be a much bigger competitor which created a big cloud of concern surrounding the deal they decided to launch the ipo anyway with a $15 to $17 per share range. met with investors for about a week and a half. according to people i spoke with, they told some investors the bankers who were underwriting the deal, that they would close the order books early and there was some price sensitivity at the low end of
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the range but overall things were looking okay. then came the shock. the day before they were set to price their ipo they lowered the range to $10 to $11 per share. as one person described it to me, that left no credibility in the messaging of this company. a lot of people who thought maybe we would buy this at a low end of the range if we got some sort of discount completely exited their intentions altogether then you saw the stock priced at about $10 a share. on its first day of trading slumped more than 6% it's been just going downward ever since then. of course, now it's faced with a barrage of lawsuits. at least 23 have been filed. 23 lawyers have been seeking plaintiffs it will be interesting to see what happens with this one, sara. >> is anyone a buyer >> no. >> no. >> it's a garbage stock. in general, bringing the range down on a trade like that, you could have an anchor order that
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backs off because of the amazon news and walks away. i understand why the lead would have priced it lower no question. this is a garbage stock. the lawsuits are, in my opinion, ambulance chaser lawyers going after investors trying to get them in the back seat to ring the cash register. it's garbage gives wall street a bad name. >> how do you really feel? >> our next guest will appreciate that introduction one of the attorneys leading the charge against blue apron on behalf of investors who believe they were misled frank botini joins us from san diego. thank you for joining us what exactly does your case claim? because investing is a risky business investors knew the risks what's your case >> hi, sara. i am glad to be here the lawsuit that we filed in new york alleges that there were false statements and material omissio omissions in the prospectus
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filed for the ipo. as you know, the company came out and posted the q2 numbers on august 10th. the ipo itself was conducted near the very end of the q2. and as we allege in our complaint, there were some very material information that they did not disclose to shareholders in the prospectus that, if it had been disclosed would have affected the price even more you talked about the fact that they were forced to reduce the indicated range beyond what was initially sought by the underwriters given the reaction to what's been disclosed by the company on august 10th, we can see the stock should have only been priced at about $5 a share as we allege in our complaint, some of the material information that was not disclosed in the prospectus, number one, they had very significantly reduced ad spending in q2. >> frank >> yeah. >> brian kelly i have been in the business over
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20 years every month or so i get a letter in the mail with a little check from a class-action lawsuit, usually for about 23 cents what is the split? what do you get paid versus what the shareholders get paid? i have never gotten anything from a class action suit like this. >> well, this case, i think, is a little bit different you have two types of securities cases in the u.s you have fraud cases that are brought under the 34 act those are subject to a high standard of pleading fraud then we have these cases regarding ipos and secondary offerings. those are brought under the 33 act. and that's what my case is filed under, the 33 act. it's on behalf of people who bought in an initial offering. it's really a strict liability claim. it's an easier claim to prove. and the recovery in those cases is higher than the fraud cases. >> frank, is it easier to prove that the people wouldn't have bought the stock if they had known that information i don't know how you prove that. you just said you think the
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stock should have been brought at $5. is that a valuation call the second quarter numbers beat the street by 1% $2.38. the second quarter numbers were fine the issues are secular for this company. the fact of the matter is that was clear when they brought it to market. and your clients bought the stock willingly. >> well, again, if you look at it, when they announced their q2 numbers, a lot of the reduction in the stock price was by the revised guidance that they provided one of the things that we allege in our complaint is that, again, when they filed this ipo, it was at the very end of the send quarter. they knew that they had already made a decision to reduce ad spending from $61 million in the first quarter to just $35 million in the second quarter. they didn't disclose that. that was very material to wall street when wall street received the unexpected news, there was a massive selloff in the stock it's lost almost 50% of the
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value. and it's the worst performing ipo of the year. >> quick question. i have a question about how many of the people who are lodging the complaint through you read the prospectus two, if the stock was up 100% since the ipo would we be having the same conversation? >> well, if the stock was up 100%, we would absolutely not be having the conversation because there would be no losses that the investors would have suffered again, this -- they were required to disclose all material information in the prospectus and there were very material trends that they knew about that they didn't disclose the ad spending was just one of them the other significant issue were the delays they were experiencing at the manufacturing facility in linden, new jersey, which is eventually expected to fulfill 50% of their orders. and those delays were causing an adverse move in the otif metric which is a very important metric for the company, as you know
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so this was very material information that they didn't disclose. >> well, we will see where this case goes in court, frank. thank you very much for joining u us. >> he has to be able to prove the case. >> right. >> they disclosed false information. >> but nothing that he is talking about is relevant to the business in general. long-term structure, setup of the business i say, ad spending those shifts occur all the time. because they didn't disclose it. at the end of the day i won't argue whether or not they did or didn't i say the fact that they decide to pull back a little bit doesn't change the narrative. >> the valuation of the company was not based on the center in new jersey. >> correct. >> where pricing had gone going into the deal, there were a lot of people who had jumped out of the window well before this thing. the fact of the matter is, calling this because the market should be at 5 bucks because that's where the market is is my whole problem with the lawsuit the market has taken the stock to 5 bucks for a lot of different reasons.
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and all of them are more material related to the industry, to how traders are playing the stock. people are positioning against the stock. >> this is common, the investor lawsuits. >> very common especially when the price goes down it creates an incentive for the underwriters to underprice the deals so that they're poised to pop. and so we see that more often than not when they do go down like we saw with blue apron, this is usually what follows. >> leslie. thank you for coming in. traders are betting on even more pain ahead for blue apron. mike joins us from austin to break down the action he is seeing. >> in situations like this, blue apron has very high short interest the stock went hard to borrow on the market can give you clues on where we think the stock goes. looking at the january 2018 forward. implying a price of $4.80 to
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$5.20. talking about another 5%, 10% maybe 15% declines not very positive as far as the options market is concerned. >> all right thank you very much, mike. for more options action, see the full show, 5:30 p.m. eastern time we have a news alert right now from washington. hampton pearson stepping in with the details. >> hi, sara. earlier this afternoon we heard from senate majority leader mitch mcconnell saying that the differences between he and president trump essentially have been greatly exaggerated now this statement from the office of the white house press secretary, quoting donald trump and mitch mcconnell are united on many priorities middle class tax relief. tax release constructing a border wall. they'll hold meetings to discuss the critical items white house and leadership staff are coordinating the planned
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meetings so, at least for the moment, a kind of public truce before whatever behind-the-scenes reported differences there are between the senate majority leader and the president. >> good way to put it. hampton. thank you. quick programming note on that note, ylon mui sitting down with paul ryan tomorrow at 1:00 p.m more "fast money" after this hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade
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final trade. tim. >> happy birthday, dad. >> buy snap. >> final. >> tsro. >> good luck on the lottery tonight! thanks for watching. ksor having me. watching "mad money" starts right now 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 some money. my job is not just to entertain but to educate and teach you so call me at 1-800-743-cnbc or tweet me @jimcramer. how worried should we be about the stock of amazon? on a d


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