tv Street Signs CNBC March 11, 2014 2:00pm-3:01pm EDT
the dow is down 33 and the s&p is down about four. there are some winners out there right now. mcdonald's is one of them, bouncing back after yesterday's move, up 3%. alcoa up 2.75%. salesforce.com is also up 2.75%. there are winners out there. that will do it for tuesday edition of "power lunch." >> have a great afternoon. see you tomorrow. "street signs" begins now. it is 11:00 a.m. out west. the dow down about 30 points. forget that, though. we are jam-packed today with big stories and actionable advice. does it pay off to buy the worst performers in the red-hot nasdaq? we will call it the digital dog theory. is google finally facing a real threat? maybe, but not one you might expect. why one big regulator is saying beware of bitcoin. and the investor who called plug
power a 50 cent casino stock is here. >> fantastic. okay. i'm seeing red today. the dow is down only marginally but here's a really cool fact for you. the dow's lowest point in the past year came exactly one year ago today at 14,373. since then, the index is up about 14%. the nasdaq is currently down for a fourth day. that would be its first four day losing streak in about seven months. amazingly, if the s&p ends down today, it would be its first two day losing streak since february 3rd. brian? so much to do today. but we begin with something about as rare as a milwaukee bucks basketball win. jc penney getting a stock upgrade. citigroup analyst oliver chen slapping an $11 target on the stock. oliver, welcome. you think jc penney will have positive sales growth ahead, nearly nobody else on the street does. why do you think they can do it? >> yeah.
we are really excited. we are excited about the product story. a couple things happening. we think home will be much better. it's lapping easy comparisons in the first half and the second half of the story is about kids. they have 10% of the store closed basically so we think their achievability of a plus five comp in first quarter, mid single digit full year, is achievable. this leads us to believe that liquidity is not as much of a risk as feared by many on the street. >> what could go wrong? >> well, i think it's a highly sensitive business model to the reality of the comp. are we really in the go forward phase. will customers come back. my take is these are basic changes being made and the fashion risk isn't here. it's just going back to the basics. brands like people love, it's steak and potatoes versus a highly differentiated kind of assortment. >> you mentioned liquidity, a fancy word for do we have the cash and capital to stay in business. do you believe jc penney will be solvent in a couple years?
>> i do. i think the long term picture is good. the near term picture for the year, but as an ongoing basis, the reality is there is a lot of risk and there is a road to recovery. $2 billion of liquidity currently. our base case calls for $20 billion of liquidity at the end of the year as well as networking capital being a source of funds. our take is that as we stress test the networking capital we see visibility to jcp in the next year and the years after. we are early to this call so there is definitely a risk involved in making this decision. >> the stock is already up nearly 50% in one month so it feels like people are starting to come around to your idea about confidence in the stock. what do you see as the biggest competitor to jc penney out there in the retail world right now? >> well, when jcp lost share, we did see them lose share across the spectrum. so companies like tjx, ross as
well as macy's, both off prices as well as full line department stores so the competitors are probably going to get comps from all those kinds of stores. it should be pretty fragmented where they resume the comp. that's what i would say. it's about bringing the people back to the store, too, who love the brands, who are actually looking for reasons to buy. they just didn't have the fit, the size or they had home wear that was much too expensive. >> got to leave it there. thank you very much for joining us. once again, your price target is $11 with a buy on jc penney. we are also following a developing story on herbalife. activist investor bill ackman is taking another swing at the company today. he is hosting a conference call about the company's china business. eamon javers is monitoring the call for us. we will bring you any news as it develops but in the meantime, why not bring in herb greenberg and the premiere of herb cam as well. you're looking good out there. what specifically are you listening out for on this call? >> well, i think you are really trying to find out if bill has
something new on china that would not only affect herbalife but affect other multi-level marketing companies because we have issues with nuskin. i think you are trying to find out and right as the call starts, he is going through the "new york times" story from yesterday which got a lot of people focus orded on the issue hedge fund lobby. >> the china business is increasingly a corroborate con their revenue. it is a fast-growing revenue growth driver for the company. if indeed something happened with the china business, for example, if it was shut down, regulators have been sniffing around the business in china, would it really hurt the stock, would it really hurt the company? >> yeah. i think if you do anything to hamper the growth of something that is growing very rapidly, it's only 11% but it grew, you know, several hundred percent if i remember correctly over the past year, over the past quarters, you do anything like that, that's going to have an impact. people are looking -- these multi-level marketing companies,
people are looking at the place for new growth. >> you know, first off, herb, for the holidays, i will get you on comcast xfinity. the dsl line or whatever you have installed in your giant mansion needs to be upgraded. very quickly, so we have got your buddy, andrew left of citron research, he put out a call slamming plug power. i remember when plug was a $1500 stock in 2000. what's your take on this insane run on plug from 12 cents to $11? >> i have no idea. i was at the conference yesterday in california, people came up to me saying you see what's happening to roth. it was going up. i said no, i'm going out again in a few hours, be interesting to see if people say hey, you see what's going on with roth? any time you see something go like that, rise like that, that quickly, you have to raise certainly -- it raises concerns. >> herb either live from his bedroom or an ikea showroom. thank you.
nasdaq, the index up 33% in just the past year. get this. 88 of the 100 nasdaq 100 members are up in that time which makes us wonder is there any value hiding in the few stocks that are down in the past year? you are supposed to buy low, right? examples, teradata, down 21%. citrix systems off. your next guest ran the numbers and is here with the data. let's bring in paul hickey. this is sort of our version of the dogs of the dow theory, minus the dividend aspect. it may be complete garbage. is there anything to it? >> well, i think it may be closer to the second thing you said. but the problem with the dogs of the nasdaq, so to speak, is there's not a lot, like you said, of dividends in the nasdaq 100. it would be the same stocks yielding the most every year just because they pay a dividend. so going back over the last five years, we are just looking at stocks that have been the worst
performers in one year, look to see how they did the following year and it's mixed. in 2009, the worst performers of 2008 did great. they were up over 100%. while the best performers of 2008 were up in the mid teens. that was one year. the last four years, it's been mixed. two years they outperformed, two years they underperformed. not much to look at there. to this point, you know, what you want to do is maybe focus on some stocks that have underperformed and see if there's any attractive names there. >> you've got a few that do actually prove this theory, even though in general, the theory doesn't seem to be foolproof. you have a number of names here like intuitive surgical, starbucks, costco where they have been a big performer one year, then severely underperforming the next, right? >> right. all three of these names have underperformed the nasdaq 100 over the last year. all three of them, they certainly have their warts and
all in there. herb greenberg brought up issues surrounding intuitive surgical multiple times over the last few years. the stock has been down a lot over that period. but the stock, after its disastrous earnings report last summer, has been forming a base and slowly creeping higher. it trades in the mid 20s on earnings at valuation so it's not cheap but it's a lot cheaper than it's been over the year. i think a lot of these issues are out there so you can see the stock surprised. starbucks has underperformed, they had weak results, coffee prices have been skyrocketing, and howard schultz moving out of the day-to-day operations. but again here, that stock has been down but it's just been recently breaking its downtrend. that's a name we could see, a lot of the bad news is priced in so we could see the stock outperform here going forward. finally, costco. their margins have been under pressure but their subscription
or membership renewal's over 90% per year. you have that annuity stream there which is a real cushion for the stock. >> real pleasure, buddy. thank you as always for doing your excellent work. we appreciate it. even though you pretty much proved our theory is garbage. got some breaking news. we are getting word into the cnbc newsroom that twitter is experiencing problems. no word on the cause of the so-called twitter outage. all we know is that productivity around america has now surged. feelings are no longer hurt. >> all those people who are watching who had felt the need to write in and tell us we are doing a terrible job can no longer do it. isn't that wonderful? >> i pulled the plug on twitter. thank you. up next, should google watch its apps? the real threat it may be facing. a short seller says the fair value on one red hot stock is 95% less than the current price. he makes his case ahead. we also find out why new jersey might ban the sale of
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it's amanda. hey sweetie. what? okay, i'll send it. one hundred seventy-two dollars for a chemistry book, what is it, made of gold? just use citi popmoney. boom. ah, she's feeling lucky. hey sweetie...cancun, yeah no, you'll be spending spring break with your new chemistry book. with citi popmoney it's easy to send money to just about anyone, anytime. visit your local branch or citi.com/easierbanking to learn more. google shares are up 45% in the past year. down a bit today, but so far, nothing seems to be able to stop the stock. but is it finally facing a real threat? maybe in the form of smartphone apps which are largely unsearchable. joining us now, pivotal group's brian weezer, one of the lowest price targets for google on the
street which doesn't make you bearish, it just means i suppose you are less bullish than most of your peers. more and more articles about how twitter may be taking search revenue away, apps are unsearchable. are these real threats, in your mind, to google? >> not at all. at the end of the day, advertising is about a least worst alternatives business. if you are a paid search advertiser, just because there's more activity going on inside of apps, does that make google any less useful? no. not at all. the reality is that google is dominant in search. it will stay dominant in search but their growth opportunities really aren't about search but display advertising and then we can talk about their other businesses. in terms of practical threat, no. >> what are the biggest threats to google? >> well, government regulation, changes to privacy expectations, if not actual regulations as well are practically the biggest threats that google has. >> we have been saying that for awhile but it doesn't seem to be coming home to roost. when is that going to happen?
>> over a multi-decade time frame, to be clear. there is very little to get in the way of the google juggernaut. it's one of those things that if you were like me, an analyst trying to list what are the risks to be conscious of, those are it. those are them. look at what happened in europe where the regulator did impose a settlement. we haven't seen any real impact but that's the sort of thing that you want to be mindful of. >> why are you so confident that apps are not a threat to google? because apps largely are untrackable. google makes its living knowing everything about us so that it can sell that data to ad search words to marketers and whatever. >> it's not about knowing everything. it's about knowing more than anyone else. it's like that joke about two guys trying to outrun a bear in the woods. at the end of the day, google knows more about you than anyone else. they have more data to apenned to advertising information. that's really what matters. >> what about samsung rolling out its new operating system? is that a problem? >> woe be to any carrier or
manufacturer that in some way blocked or prevented consumers from using google. it's possible they could cut a deal with microsoft bing, make that the default, but as long as they don't prevent consumers from changing the defaults, they are not going to do that. so it's not a real issue. >> brian, you seem to have debunked all the fears we put out there. thanks a lot for joining us today. two big stories on apple today. both dealing with music. first, apple surpassing spottify in the streamed music wars and reports that apple is asking record companies for more exclusive releases. let's bring in re/code's eric hassendal. what do you make of these headlines? do they move the needle? >> it sounds like this is another textbook repeat of the innovators' dilemma. ten years ago we were talking about apple disrupting the business of the record labels and now apple is having its own music business disrupted by some
new players, namely spotify. lately we just don't see the actual download sales are beginning to decline. people are listening to more streams. wasn't so long ago that a certain guy named steve jobs would quickly dismiss the notion of renting versus owning music but here we are seeing interesting consumer preferences being expressed in the marketplace. >> do you feel, though, that apple's itunes business at billions and billions and billions and billions a year is fully appreciated? >> well, it's on the decline. we know that much. but yeah -- >> from a spectacular rise. >> from a spectacular rise. we are probably seeing some level of maturing but we are also seeing apple being forced to challenge itself and consider new options. we had in the last year, itunes radio added to the mix. so now you have a pandora like stream. we might see apple, if this trend continues, we might see apple try to consider maybe doing some kind of subscription model itself. when was the last time you
bought an album on itunes? it's been awhile for me. >> to that point, i know you listen to a lot of music. you have said it's rare that you buy something on itunes. why? >> because it's just easier to go to spotify in my estimation. i will buy something like namely the beatles but when i want to listen to something that's new, i'm not necessarily going to go out and spend $9.99 to buy the album when i can give them $5 a month and listen to it. >> i can answer that question. i bought an album on itunes yesterday. buy albums all the time. >> why? >> because i control the music through my house on my phone. you can't use, you can't control spotify through the remote feature on your phone. it has to be in itunes -- >> depends which product you use. i use a product that allows you to actually play your itunes but also play spotify, pandora, other things as well. depends what product you use. i have a similar system. >> well, that's amazing.
my dream is to have sonos but i sort of jerry-rigged the air play $99 into the $150 receiver so i'm kind of creating a fake sonos for a lot less. >> i like it. it's the best thing about being in my apartment. >> invite us over. >> sure. sure. >> thank you very much. >> you bet. there was some news on apple that i think -- by the way, folks, this is the part of the show where we will punk mandy. apple, by the way, just released new ios 7.1 which includes australian english in siri. did you know this? as of last night. >> i did know you can get siri in australian, yes. >> let's test it out. i have my iphone here. we will test out the new australian english iphone siri. ready? >> let's listen. >> plastic knife. siri, is this a knife?
>> knife. that's a knife. >> seemed to work. here you go. siri, what's my favorite song? >> oh, that is awesome. >> apple shares just surged. thanks to our production team for that. we had a little fun with you on that one. >> that was fun. up next, we are following a developing story out of new jersey. lawmakers are voting whether or not to ban tesla sales in that state. we'll have a live report ahead. another regulator says beware of bitcoin. is it just too risky for you?
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no two people have the same financial goals. pnc investments works with you to understand yours and helps plan for your retirement. talk to a pnc investments financial advisor today. ♪ there's your markets today. dow down 58 points. not a lot but down a little more than beginning of the show. all three markets are down. speaking of down, it looks still like twitter, the service, not the stock, the stock's actually up, the twitter service has been down now for 10 to 15 minutes. take the opportunity to maybe make a phone call.
>> or talk to somebody. >> hug a loved one. >> go have normal human to human communication. we are also following a developing story out of new jersey. the state holding a vote at this hour whether or not to ban tesla sales. let's get out to phil lebeau. this is kind of to protect the dealers, isn't it? there's a long-standing dispute over this. >> reporter: well, the dealers say it's to protect franchise businesses in the state. here's what's going on. the new jersey motor vehicles commission is meeting right now in trenton, we actually have a photographer who is at this meeting, and they are discussing changing the state laws when it comes to selling vehicles, requiring essentially a dealer, a third party. this would ban direct sales from auto makers in the state of new jersey. tesla has two stores in the state of new jersey, has sold several hundred cars there over the last year or two, and tesla would have to lay off about 27 employees if this law is changed to ban direct sales. the company says it would be a huge blow to its business in that state.
>> the actions that the new jersey vehicle commission could take today would effectively shut us down entirely. it's effectively a death penalty and we would not be able to renew our licenses. and we would not be able to grow. >> we reached out to the new jersey governor's office. it says this administration does not find it appropriate to unilaterally change the way cars are sold in new jersey without legislation and tesla has been aware of this position since the beginning. so if tesla was looking for some help from the governor's office, it's not coming. by the way, texas and arizona are the only two states that ban the direct sales of cars from auto makers to consumers. tesla has been lobbying other states, has gone to court in other states to make sure it can continue to sell vehicles in those states where there has been a push to ban direct sales. as you take a look at shares of tesla, keep in mind that when the company had a conference call today, i asked them point blank, will you go to federal court in order to guarantee sales nationwide. the response was yeah, we would
consider doing that. also, the thing to keep in mind when you look at what's happening in new jersey is that the delivery of vehicles would be banned so if you are a new jersey resident and you buy a tesla, you would then have to go through a third party in new york, some other state, have the vehicle delivered there, and then they would deliver it to you in the state of new jersey. it would dramatically crimp sales, no doubt about that. >> new jersey as you know is a small state. if i wanted to get a tesla, i can go to pennsylvania and new york. it's not that big of a deal. if you live in texas, it's a haul. what's the real risk here that the other states adopt this rule? how do you find a dealer, if tesla had three cars, would that be a dealer? >> reporter: the bottom line is this. we went through this when general motors and chrysler went through bankruptcy, people said you got to protect the dealers because of franchise laws which keeps manufacturers from just cutting out a franchise dealer.
the deal with franchise laws is you cannot sell directly if you're an auto manufacturer to a customer if there are already franchise laws in existence. in other words, if i'm gm, i can't say i don't want to go through phil lebeau chevy anymore, i will sell directly to you. tesla's argument is we don't have any dealers so who are we hurting by selling directly to the consumer. ultimately most believe they will have to go to federal court. that's the only way they will be able to win this nationwide. >> don't they sell as many cars in a day, gm sells as many cars in a day as tesla does in a year or something, right? >> probably. probably. but you got to start somewhere. >> thank you very much. there is no hotter stock than plug power. one guy says the stock's real value is about 95% less than the current price. he's up next. plus microsoft ups the ante in the gaming world. is now the time to buy good old mr. softee? we will debate that.
issues accessing twitter on web and mobile. twitter is looking into those service issues. go have a proper conversation instead of yelling at us on twitter. let's take a look at what's happening on street talk, your daily rundown of stock news and views. i want to lead off today with retail giant macy's. moving to the upside, got an upgrade to outperform from market perform at wells fargo. >> the stock is up 1.8%, wells noting a strong performance during a difficult holiday season. it shows to them. macy's, the clear leader among midtier department stores. their valuation range goes to 67 to 70 from 54 to 58. wells gives a range not a target price. >> let's bring up capstone turbine. those shares absolutely soaring, 8% is a soar, i guess, after a target increase at cowan. >> there you go. 8% is a pretty good gain. their target increased 42% from the current to 270. the world's largest producer of low emission microturbine
systems. new restrictions on nat gas in north dakota are expected to help capstone turbine. that's part of the basis for the call. still, one of these volatile stocks. just be careful. >> one year, 118%. >> just saying. it moves a lot. >> right. amd, advanced microdevices. the tech company initiated by capital markets. >> their target is $5, about 30% from the current price. they didn't meet analyst expectations with a decent fourth quarter. also initiated by a target price for applied microamcc in the same call. >> let's take a look at facebook. we have been talking about this, hitting market highs this week. citi increasing its target to 85 from 70 bucks. >> not helping today. facebook's down a percent to 71.26. it's like the analyst race to who can have the highest price target. that always ends well.
target raised 18% from the current, accounting for the whatsapp purchase. ubs slapped a $90 target on facebook yesterday, saying it's gaining traction with brands. >> who will be next? maybe someone tomorrow. we have power secure international, our under the radar stock. shares are up by 8%. another soarer. they got an upgrade to buy from hold. >> powersecure, under the radar mover. that target is 30% higher from the current level. this company provides energy technologies to oil well service. kind of like where cramer was yesterday. fourth quarter analyst estimates were beat by four cents. strong backlog so powersecure international, powr, getting a pop today. all right. all you video gamers, you may want to rejoice because microsoft is releasing its new titanfall game exclusively for the xbox. microsoft has been heavily promoting the game since last summer.
they really need this one to work out. could titanfall be a game changer for microsoft? let's talk numbers. rich ross and steve cortez. steve, we know xbox has been struggling. it's one game but has a lot of hype. would you buy microsoft stock just because of titanfall? >> not just because but partly because, yes. i would buy microsoft stock. i think after a lost decade, redman, washington is finding its way. it outperformed the s&p for the last year. i think there's more to come. remember, this company has the largest r & d budget in the entire world of any company. i think we are finally starting to see that budget produce some tangible benefits such as tightanfall. i'm too old to know what kind of game is going to really succeed but when i talk to young people and read about the online buzz for this game, i think it is real and i think it will be significant to the bottom line. >> i should put you in touch with my boys. they can tell you exactly what the next thing is going to be in the gaming world.
rich, what about the charts? what do they tell us? >> i'll tell you, this company could re-release tech and it's still not going to get through $39 a share. i brought two charts to illustrate this point. the first one is basically a one year chart. you can see the stock's done well along with the broader market and the technology sector as a whole which has been an outstanding performer. you see that well-defined up trend. the stock is held and tested at 150 day moving average on two separate occasions. we also have a little head and shoulders continuation pattern. what i don't like is that the stock has stalled here without taking out the previous high. which is in contrast to the s&p 500 which has pushed out to a fresh new high. that tells me we could be looking at a reversal in trend here. now if we zoom out to a very long term chart, you can see that there's more trouble ahead for this stock here, as we test and challenge this critical multi-year resistance around $39. once again, this takes us back
over 13 years. i simply don't think the stock has what it takes to get through there. i would be a seller into this key resistance. >> i certainly will concede the long term problems of the company but we have new leadership now. i do believe there is a new paradigm, clearly there is new exclusive leadership. in addition, the fact you get a 30% dividend yield which is unheard of in a tech company that has this kind of growth potential, i think there's comfort in that as well. bullish on microsoft. >> guys, good debate. thank you very much. we appreciate it. that's why we look at stocks from both sides. check out the online edition of talking numbers, part of our partnership with yahoo! finance. >> apparently what has gamers frothing at the mouth is oculus rift. you hear about that? vision goggles where you can visit virtual worlds. >> that's what we need, more virtual stuff, less reality. >> exactly. who wants reality? >> so real. let's take a look at what's happening with the markets. the dow is down by 72 points. we are at session lows, folks, with a drop of 28 points for the nasdaq, s&p also lower.
one of the hottest stocks out there has been plug power. a guy today issued a report saying he thinks the stock is worth 50 cents. stock was at $11 when he issued it. he is exclusively coming on right after the break. we have also got a little tease of what's coming up on "closing bell." chevron wrapping up its analysts day. ceo john watson will be here at post nine of the new york stock exchange. wait until you hear what he has to say about the price of oil. >> huge story. plus, controversial painkiller hit the market this weekend. the drug is ten times stronger than vicodin. the question is whether that's too dangerous. we will debate. a question i'm often asked. do handsome men make better business pitches than women? "shark tank's" lori greiner and marcus lemonis will be here to tackle that question.
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welcome back to "street signs." i'm phil lebeau with breaking news regarding tesla. the new jersey motor vehicles commission has just voted to ban the direct sale of automobiles in the state of new jersey. that means that new jersey becomes the third state after arizona and texas that will not allow tesla to sell vehicles directly to consumers in the state of new jersey. take a look at shares of tesla intraday. notice they have been sliding lower. that's when the conference call started in the middle of the day. tesla first realized there was this meeting with the new jersey motor vehicles commission, held a conference call and you see the shares moving lower now that the motor vehicles commission in new jersey has voted to ban the direct sale of automobiles. guys, back to you. >> phil, thank you very much for that. to your point earlier, i guess to what degree it sets a precedent, to what degree we will see other states voting to ban sales of tesla.
>> three down, by my math, 47 to go. here's the problem for tesla. if this steamrolls, where do you sell your cars? or do you start a dealer affiliate network so the dealer buys from you? lot of people don't realize the car dealer buys the cars from the supplier and sells them largely at his or her own risk. i guess they want tesla to open up car dealerships. that would probably eat significantly into their profit margin. >> we have to watch the stock. it's only down by .7%. doesn't seem the market is overly perturbed about this. now down 1%. we will keep an eye on it. this is a stock that is up over 500% over the past year. it's done spectacularly well. >> if you own a tesla, your resale value just went up. >> there you go. yep. one year ago, plug power was a 17 cent stock. earlier today, it nearly hit $12. that, my friends, a gain of nearly 6,000%. in a year. our next guest says it's still a
50 cent stock and his report turned the stock decidedly negative today. calling this a casino name, slamming shares of plug power. thank you for agreeing to come on on short notice. we appreciate it here. i will give you your handy-dandy summation of plug power. here's your summation. no profits, no unique technology, no scaleability, no demand, no brand equity, no media hype, no support. what's your beef with plug power? >> there's no beef with plug power. it's just a matter, it's a function of the markets. this has turned into let's run the lowest common denominator, whether it be finger traders or whatever powers may be, this stock has taken a run over the past year from 17 cents to this morning, $11.50, $12 on no basis whatsoever. bookings are down. every metric is completely wrong. but what i thought was most compelling is 13 months ago,
this company did a stock offering at 15 cents with warrant coverage at 15 cents and management did not participate in this offering. so we see today they are speaking at a conference and i don't know how anyone can take any management serious who, forget about the fact it's completely missed every single milestone they put out to investors over the past five years, but who pretty much 13 months ago would not even put a dollar to their company betting against bankruptcy in offerings. >> did i hear you correctly, you said that you cannot trust what management says? management i believe is going to be coming out with guidance and also earnings this thursday. so you are going to say take it with a grain of salt? >> if you go read my report, you will see 2009, '10, '11, '12 and '13. they don't just miss guidance. missing guidance is okay, if you miss by 5%, 10%, 15%. when you miss expectations by 40% to 50%, that's not missing
guidance. you are actively deceiving the marketplace. >> i'm going to push back. i read your report three or four times, highlighting certain things you pointed out. if this was a coca cola who missed the by it by 40%, i woul. plug power tends to get large one time orders and not that many of them so if you miss one order, you could be off on your projection by 40%. >> they know when their orders are coming. they have a small concentration of customers. if that was the case, if it got pushed back, you would make up for it in the following year. if something didn't come in q-4, you would pick up for it q-1. their backlog numbers don't make sense. it just doesn't make sense. it's not me saying this. look at the company's actions. one month ago, they made an investor conference call saying they didn't need any money to execute their business plan. literally, one week later, they went out and raised money. so you really just cannot trust management.
>> to defend them, to play devil's advocate, they just signed a deal with walmart, obviously very big customer. they say they will be profitable this year. are you not seeing any silver linings here? >> that is incorrect. they didn't just sign a deal with walmart. they have had a deal with walmart for the past four years. walmart has been taking advantage of some of the tax incentives of the go ahead and go towards alternative energy which ends in 2016. as for them saying they will be profitable this year, they also said they will be profitable last year and every other order. this is a show me, don't tell me type situation with this company. >> but if they showed you and they were profitable, if they are right this time, and if the treasury, these are ifs, if the treasury stretches out the end of that tax credit past 2016, would you change your harsh views on plug? >> i mean, possibly, if the stock was 60 cents. >> how would you come up with 50 cents?
>> i just talk, if you look at a blended average of the cost that they raised money over the past i think it was 15 or 16 months, they raised 15 cents, 30 some odd cents, most recently 5.75 but a lot less with warrant coverage. if you take an average, it takes you to around 50 cents. >> it's not just plug power. there are other companies in the sector which have been doing spectacularly well recently such as fuel cell, which was at its highest since 2009. also ballard at a seven-year high. are there any others in the sector you are raising questions about? >> i'm focusing right now on plug power. the reason why is unlike ballard power, plug power actually has nothing unique. there is no unique technology. these type of forklifts have been around for 50 years. when you operate in a segment, where there's no competition, and you are working at negative gross margins and you have lost $800 million on your business model, at what point do you say, and that's with the federal tax
incentives, at what point do you say maybe we just don't have a business? >> well, listen, on that basis, we have to go. there are a lot startup and i know plug has been around a long time, i was at the nasdaq when it hit 15 a share. it had a reverse split so it's at 150 now as a top. there are a lot of companies you describe that operate at losses for a long time before -- just because it was 2012 and 2010, it's a different year. i'm trying to defend -- i want to let our viewers know, we invited the ceo on during a quiet period. they can't comment at all and we invited rob stone on from cowan and company, who is the only analyst that covers the name. >> that's my favorite. please read my report and see about rob stone and citron. >> i did. you called him your pal. i assumed you meant that sarcastically. >> i didn't slam him. the market has spoken itself. this past year, rob stone has presented two stocks that citron was on the other side and i
think they are both down 50%. one's down 60%, 70%. you will see. it's obvious. >> andrew, thank you very much for bringing your views and once again, we did reach out to plug power. hopefully they can speak to us after their quiet period because of course, we have the q-4 results and guidance on thursday of this week. thank you, andrew. all right. if people want to criticize us for being tough on andrew, the reality is that it's -- >> it's a big call. >> nothing against andrew. someone had to take the other side as best they could. bitcoin buyer? beware. >> one regulator sounding the alarm on that and lots more to come. also, live in our studio, the entrepreneur whose pitch for personal petals landed him $1 million. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪
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bitcoin down a bit today and finra issue an investor alert saying it's too risky. tim, finra is basically saying the bottom line message is you invest in bitcoin, you're on your own. >> absolutely. and i think for anyone who has been following bitcoin for a while, this release from finra, you're going to say this is sort of no duh. we know that's the case. it's a very volatile asset, goes
up and down. more importantly, for anyone who wants to buy bitcoin, the companies that sell it to people keep crashing and people do lose their money and they have pretty much no recourse. >> and here is the thing, when finra come out with a warning of this kind, it's usually with regards to i don't want to say dodgy things, but things that are very speculative. you know, certain chinese stocks, perhaps gold stocks that aren't necessarily stocks. is that putting bitcoin in the same camp? >> well, from finra's point of view and if you're a retail investor, yeah, this is a speculative commodity. some of the other things that finra has issued these alerts on have been marijuana stocks, sort of ponzi schemes, fake gold stocks, weird chinese companies that aren't really listed. so it's -- from finra's point of view for retail investors, it's a speculative commodity that's a little too speculative. i think that's fairly accurate. >> we have to leave it there. we'll talk lots more about bitcoin in weeks and months and potentially years to come if it's still around. next, the big bucks in
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if you only knew what happens in the xlerticommercial breaks. welcome back to "street signs." barbara corcoran. you're riding around on a villy bike. you bought in why? >> i loved the entrepreneur. what he said he meant. you looked in his eyes and you knew he was going to do everything in his power to make these bikes sell. look at, you're the sucker that bought one of them. >> we didn't buy it, they brought it in for us. i would break it if i sat on it. how much did you buy in for? >> i bought in half the interest for $500,000 along with mark cuban. >> and fleetwood hicks. >> and sales are $200 -- let me think. it was so low. i think $2,000 when he was on "shark tank" and now it's over $1 million. >> you got in at a good price.
i didn't randomly mention fleetwood. he's joining us right now. >> no kidding? >> the magic of television. telecommunications, barbara. >> he's joining us because he likes who is on his bike. >> there you go. >> it has nothing to do with you. >> fleetwood, why this? isn't the bike market saturated? >> you know, what's great about our bicycles is very really cater to more of the noncyclists that just wants to have a great time and enjoy the bicycle. so we feel like there's just a mass of people across america that want something fun and new and stylish to do and this is it. >> i want to ask you about the price. for a -- just a standard bike that hasn't been customized, it's already over $300, right? if you want to customize it, it's over $600, maybe even over $700. isn't that price point rather high to get sort of mass traction? >> well, let me start off by saying we've got entry level bikes at $389 all the way up to
$800. if you go -- >> they're all custom. >> they're all custom? >> every single bike. nothing is ever manufactured that's repeated again. you design your own bike online. you get exactly what you want and they start at $349. >> nobody will ever have this thing. >> well, maybe after this they'll have this thing. >> she should sign it and sell it. >> and you have to throw the hard hats in for free as well. you're going to be opening up your own store, your first store as well. where is that going to be? >> well, we've got a test boutique opening up right here in dallas, texas, and it's got cruiser bikes and cool accessories and baskets you can't get anywhere else and beautiful locks and helmets and also gear that you can wear and look stylish when you're riding your fashion bike. >> do you make them for like larger than average size people? >> you know, our bikes, they'll handle anyone to 275 pounds -- >> i'm in. >> 6'6". >> you're safe. >> you should be good to go. >> i'm close. >> thank you so much.
>> no, no, no, hold on. tell them who is buying these bikes? he's selling 500 bikes to one corporation but they have their logo on, they're customized. all pimped out and they're a better price. >> we have to leave it there. thank you very much, barbara, as well. >> first time she's ever said pimped out on national tv. >> on that note, i will drive off into the sunset and hand you over to "the closing bell." >> and your little dog as well. thank you for watching. welcome to "the closing bell." i'm kelly evans here at the new york stock exchange where the dow is off 70 points. >> i'm bill griffeth. the s&p needs to add less than a point to close at a new high. we are currently down though ten points, near the lows of the session as we go into the final hour. so it's not looking good right now for all-time highs. >> a couple different factors. maybe it's china, even the talk about the fannie and