guys, thanks very much. really appreciate this. "fast money" is coming up in just a few moments. melissa lee is back. melissa, what's on tap? >> hey there, kelly, we're going to continue going through this gopro filing. josh lipton in the house. he's looking through that filing right now. also a cnbc exclusive with one of the top retail performers so far this year and for the past 12 months, the ceo of kate spade joins us in an exclusive. >> can't wait for that one. all right. over to you guys. >> thanks, kelly. "fast money" starts right now. live from the nasdaq marketsite in new york city's times square, i'm melissa lee. our traders tonight are tim seymour, dan nathan, karen finerman, and guy adami. tonight's top story, buying growth. while everyone's talking about the nearly $50 billion deal between at&t and directv, there are two other effect deadlines reportedly in the works, google looking to buy video game streaming service twitch for $1 billion and twitter looking to buy audio sharing company sound cloud. so are all of these tech deals just a desperate attempt for companies to find growth right now? and that, dan, seems to be at least for the twitter move and this audio. >> i don't know if it's growth because there's no earnings in nif these things.

but it's really eyeballs. it brings you back to 10, 15 years ago when we had 9 last tech bubble, when everybody was fighting for eyeballs. obviously they're fighting for ear buds and other things too right here. for a company like google they should be taking in as many $1 billion little gimmicky things they think they can do that will make it more use tofl their users and make their property stickier. i think it makes sense. >> but it sounds like you say you're ready to throw capital out the door if it means we're playing for 10 to 15 years down the road, which i don't think apple's doing with beats. i'm not sure what facebook is doing with oculus but this is a case where i think ultimately we've got a company that is so big people are giving them the benefit of the doubt but -- and in google's case i don't care. but in other places it's not that simple. and i think the guys that need to reinvent themselves are the ones you should be most concerned about. >> the google deal makes sense. karen, you're a shareholder. twitch is sort of the monopoly for live streaming whereas youtube is a monopoly for recorded. >> you can see where that makes sns. and i thought at the time when they did youtube that that was a ridiculous deal, doesn't make any money, but that's just

turned into a home run. but also not only they're doing it just buying lottery tickets. they're preventing the other guys from buying lottery tickets. and that's part of the strategy as well. >> is that a good ufs capital, though, just so the other guy can't get it? >> going back to a completely different space, five, six, seven years ago probably, a company like ingersoll rand top-ticked train when they bought that, looking for growth. so a lot of times when you see deals like, this although obviously these are not of that magnitude, sometimes they're ringing the bell at the top. i think this apple deal's a little bit different. we obviously have steve here who can discuss it. i think that's trying to get them into a different business. but i'd rather find companies who don't need to find growths, who are in the sweet spot of their company. look at micron today. look at the two upgrades over the last couple trading sessions we've had. people starting to warm up to the story we've been talking about for quite some time. pricing in d rams remain stable and micron dominates the space. >> i would add one other point here. with these public companies who have lots of ksh gaeg into the market at a time when there's been a lost questions about the ipo market they are driving up

the values of some of these companies yet to go public. in some ways it's kind of snowballing. people talking about valuation bubbles. we're going to have alibaba later this summer. this is going to help cause a frenzy. if we see a bunch of billion-dollar teams with 50 34r0iees and no revenues. >> venture funding, right? reached $10 billion in the first quarter. that's the most. it's the second quarter of 2001. so we've seen this reach for some of these smaller companies and we see the money pouring into venture capital funds looking for the next big takeout. >> especially as they cash out alibaba. those guys are in the private market. and alibaba's going to have a ton of deals to be looking at. i think that will be dropping a stone and rippling outward. >> but in terms of marking the top, do you think this that it marks the top? are you dhaerpd yes, these companies can afford to do it? >> can i tell you? tim -- i almost said tim made a good point. tim made a very good point. when you talk about a company like twitter reaching for a soundcloud, if they spend too much on, that this is a company that -- they need to reinvent

themselves. >> it would be their biggest acquisition to date. >> google given the benefit of the doubt. i don't think google is having trouble finding growth. they're still growing their top line 25% and they're doing if at a reasonable valuation. but google has been doing this for the last ten years. so google has been trying to reinvent themselves and moving out laterally and i think it makes sense for them. >> when you slipped in the ingersoll rand reference, were i saying that you're concerned that now would be a top of some sorts for technology? >> yes. i am. i think when you see deals of -- listen, these deals have not been huge magnitude. that train deal was a big deal at the time. but it also marked almost the speak of the entire cycle and the peak of the market for the entire time. this could happen with alibaba as dan points out all the team and a lot of these tack-on deals that don't seem like a big deal but in the aggregate are. >> that is dwarfing all of these sorts of things. >> the train deal was with debt at the absolute top. this is cash or stock which they

have an abundance -- >> and stock is the key. again, the currency of choice here is using a stock that may or may not be overinflated. and that to me is part >> referee: why these deals are interesting. >> shares of apple today hitting their highest price since october fwvt. it comes as investors look for clues surrounding a possible deal with headphone maker beats. ubs analyst steve milanevic follows apple. good to sigh in person. >> good to see zblup what happened to this? we were talking about it ad nauseam for a day a week and a half ago and then nothing. >> i don't know if it's yet to be announced or not. apple tends to take its own time and so forth. but of course we're talking about a deal that's pure speculation at this point. but because apple does so little on the acquisition front it's get an inordinate amount of attenti attention. >> and you think the deal's okay? >> i think it is. obviously we need to see it announced and the terms and so forth but it would frankly be strange for apple which has passed on so many things many adjusts thought it should have bought to do a deal that turns out to be completely stupid. i think you have to give them a little credit. the bechkts of th this is

obviously in the streaming realm pl. itunes radio hasn't been a huge hit. accessories like this keyboard. that makes sense. it also gets them into the younger crowd. just like they this max in education for years which benefited them. i think getting kids using beats and so forth helps the brand. >> doesn't this underscore the fact that apple missed the boat? they were too entrenched in the itunes ecosystem and recorded music, they missed the boat when it comes to things like streaming. they missed the boat when it comes to accessories. they were in their own world too long. >> you know, they may have missed. i would certainly argue they missed the higher end screen phone which we expect this summer. but apple is very different from google, dan, which buys a lot of stuff and yet search is till 90% of their profits. remember apple's organization is functional. that is by engineering, supply chain. it's not by product, ipod, et cetera. so it's difficult for them to have lots of product. they have to really cooperate on what they do. i tend to like that focus. some of the street doesn't. but this does suggest that they're beginning to broaden out at least a little bit. >> that gets into it because to me this is more of a marketing move than a technology move.

and everyone wanted to see some kind of new innovative technology for apple who had never done a deal anywhere near this size, right? so they want their first one to actually be something oh, i get where the technology's going. with what's app, back to this whole conversation, you get why facebook is doing it. you get the global footprint. it's complementary to at least they're getting more users. with apple this sounds like hey, they're actually going down a road of marketing and almost the retail side of their business, which i think could be huge but it's also sounding a very new time for them and is that a reason to be excited? in other words, should we forget our disappointment on technology and say this is a company that could be actually, whether it's logitech or all these people that went to the bank on apple? >> yeah, i think it's important that the company be viewed as a brand over time as much as a technology company. some tech investors might not like that. but the fact is if they can get anything like a nike multiple for this stock, hiring angela errans from burberry, a luxury brand approach, i think over time that is where a lot of their stickiness is. so obviously, there's technology risk here and i expect they will

do things on the technology side, but i think the compatibility culturally between the companies is really important. jimmy eyevine, who runs beats, has mentioned that apple actually didn't do that good a job with the ear buds so, they did the headphones. so we've got a good product but he thinks most headphones look like medical equipment. that's important. it's the experience of the music, experience tham brings that's compatible here. >> the highest price we've seen in the stock price since halloween. your target price 625. we're within a couple percent. what makes you move that price target higher or make a neutral call on it at this point? >> i think what's interesting is that we find that 2/3 of funds that own apple are underweight. i've been frankly a little surprised that we haven't had even more incoming calls after the very strong quarter and the 44 million iphone number. so my guess is that the june quarter will be okay but it's really new products. i think we see this deal if it gets done, try 20u7bto understa that, and then the iphone 6 upgrade sick cycle i think is

going to drive the stock higher over time. i think portfolio managers might even move to a panic position where hey, i'm underweight apple, i've got to be here. the last six to nine months has been one of apathy. >> when you say underweight have you done the back of the envelope calculation where if they got be properly weighted in apple what that would mean to the stock? how many incremental shares that would be. >> we did some work on that and i'm trying to remember how much it was. 200-some million shares. it's hard to quantify exactly what that means. but 2/3 funds we think are un r underweight in the stock. our price target 625. but it could definitely go higher from there. >> steve mulenovich of ubs. >> we have the stock split and people get really excited about that. it helps the stock hasn't been over 600 in a long time. one thing we didn't even mention is that the company has missed on their ipad numbers for two consecutive quarters. that great iphone in the last

year, a lot of 4s. to me you may see tough guidance going into the iphone 6 launch. who the heck is going to go and buy a 5s or a 5 w4 they know they have 4.7 or 5 1/2 in screens coming out in september? >> i think apple if you look at the technicals here looks very interesting. if you draw a line basically from where the stock began its rally in 2009 and you draw it through the bottom part of the support line, you basically have now gotten up to a place where apple arguably outside of that dip and the sell-off has held this entire trend and the chart looks fantastic. i think apple is the most interesting valuation call in big cap tech anywhere, and i think this was a disappointing deal, and you know, i traded apple from 525 to 590 and sold it. i don't own the stock here. and i want an opportunity to get back in. this deal wasn't it. i was disappointed. but i think apple's a worldly company. >> do you buy this notion about institutions being underweight in the need to be properly weighted in apple? >> that shouldn't be an underlying thees tois own the stock. that may be the case.

but for me there has to be nor to it than that. and dan, i'd just say that them selling more iphones versus. pads is actually a better value proposition. >> not if they've cannibalized the category and it's going away, like the ipod. >> moving on here, urban outfitters falling in the after-hours session. let's send it to cnbc's courtney reagan back with the details. >> if we check out shares of urban outfitters you're going to see that stock price movement after the bell. the stock moving lower after the teen apparel retailer reported a 20% decline in first quarter profit as costs jumped. its earnings were a penny shy of wlls forecasts. as you can see here, the stock current lly trading down fairly sharply. call under way right now. same-store sales also disappointing at the namesake chain. >> better hold 35. this is exactly where we held now since late last year, early this year, and it's where we bounced from late 2012. so this thing opens below 35, which looks like we're going to do, it has pretty much a straight beeline down to 30 bucks.

then it gets interesting. but i wouldn't try to play with it right here. >> we'll dig deeper in the retail story with the ceo of kate spade later in the hour. that stock up more than 20% in the past three months. the ceo will tell us the number one place he sees growth right now. that's straight ahead. and breaking moments ago, gopro filing to go public. josh lipton's been reading through the s-1. he'll have all the details for us. that's next.

we've got breaking news here. gopro filing for its ipo. cnbc's josh lipton has got the latest on this. josh, you've been looking through this filing. >> yeah. we've been talking about go. o all day and the s-1 just hit. i actually have a camera right here america can check out. so just looking at the fieshlgs melissa, let's just talk about the top line growth this company's seeing. 2011, 234 million. 2012 hops to 526. and then nearly doubles again to 985 million. net income also nearly doubled to 61 million. you talk about this camera and really gopro is the action camera market. you talk to analysts, they've got about 54% of the global market share. and some of the excitement is just because that market is growing by leaps and bounds. it jumped 70% last year. i think what's interesting about founder nick woodman, too, is he

wants to take that company in some sense in a different direction, not just as a camera maker but he really thinks, listen, he's got dramatic compelling content that he can leverage as a media company. i talked to mike many pact over at wedbush and he thinks listen, if they can take this content and make it into a compelling channel that works for cable or satellite or netflix they've got a winner. >> we shouldn't expect too many details being what you said. they have under a billion dollars in revenue. so they don't have to disclose as many details as some other companies out there. >> right. that was the whole point of the secret ipo. that only those rules only apply to a company with under a billion. that was something i know some investors and analysts were talking about. woodman said they dhushld revenue every year since the camera debuted in '04. so what happened in 2013? >> so given how you say the company wants to evolve, it would seem something that with fit with google. do you have any knowledge of google having looked at this before the ipo? >> i don't have -- i haven't heard about any kind of acquisition talks like that. especially when you hear woodman

talk about this company, it's such a great passion to him obviously that it seems he really wants to take this company and keep evolving it. you talk to analysts who think he has a real shot there developing it not just as camera maker but to real media brand. >> woodman owns, what, 45% of this company or there tlabouts. he has a big stake. honhai was also an early investor in this company. >> i believe 200 million in 2012. at that point the valuation was around 2 billion. incidentally, full disclosure, i did go to high school with nick woodman. men lowe class of '93. >> where did that get you? >> we're talking about it. >> you should be wearing the camera. forehead right now. >> that would be much better pr. >> let me ask you a question. for people that don't understand the media component of this. how do i get from a hardware company to a company that owns exciting outdoor video? i mean, anyone who owns the camera can post this. any other person that's in the outdoor -- espn should have their family sports -- you know, this is all stuff we've seen before. for a company that in the first quarter of 2014 missed on revs,

they were expected at 255, came in 235, how about you say this is hardware that a lot of people can play in. so why does this company have to be more? >> two points. one is that's a common criticism, i think, or at least a concern with gopro as an investment, it is just hardware and they already do compete against sony sxien so, why can't another big name just step in? i think one pushback you'll hear from fans is is they'll say -- and it's kind of a swishy metric but they'll say what woodman has done here is create a brand. he's created a lifestyle. shaun white, right? and actually, once you do that, once you have a brand asoefrted that strongly with your hartware, it's actually harder for another company to come in and step on it. >> cult of gopro, it sounds like. >> that's right. >> i know. i got injured with a gopro super bowl week. strapped it to my forehead. >> bloodstreaming. it was not pretty. >> cut me before -- >> that has nothing to do with gopro, and everything to do with -- >> you're right. >> josh, thank you for joining us. josh lipton. facebook going after snap chatd and kicking off our top trade.

working on an app called slingshot that would let users share pictures and video that disappear after just one view. >> if you can't build you try to buy and if you can't buy like they tried with snapchat they'll go back to building. these guys will figure it out. they may be too late. we talked about this in the discussion earlier. the guys were the first mover in some of this stuff. snapchat is growing like crazy. i think facebook users who like their messaging apps will probably use it if they have something that can compete with snapchat. >> next up, deutsche bank, the german lender, aiming to ease capital worries by planning to sell $11 billion worth of new shares. tim? >> this is good news and bad news. this is a company that first of all has had the spector or sneeshlg t essentially the fear of a capital raise coming for some time. i think it's a positive. a lot of this is priced in even at the 25% dilution year. you're at a capital place where the market is going to take it off the table. what this does do is they could either shrink or they could grow and become the last man standing in europe. the people that are actually

looking to take some of the business that barclays, for example-s giving away. i think deutsche bank is going to be more highly levered but a more highly profitable company and i think at this point you've seen a lot of people price this in this stock. looks very interesting to me here and a stock i'm going to look at. >> at&t buying out directv in a $48.5 billion deal. where does that leave satellite tv provider dish? will to be able to keep up? let's bring in cnn's jon janrone. otherwise known as j.j. flash. >> there it is. >> earlier, j.j. there, was a report. we mentioned this report because it moved the stock. verizon was taking a look at dish. do you think that is within the realm of possibility? >> i'm not sure it is. but that does get right to the crux of the real question. what do they do with the spectrum? at this point the core business, if you put a normal five times ebidta multiple on it you've got about 14 billion. the rest of the value is in that spectrum. the market says it's worth 18 billion. but i was talking to -- the spectrum, that is. by was talk tying hedge fund manager today and he said can't quite get xhfshlg with the valuation on that spectrum because we don't know what they're going to do with it.

so the company's got to either sell it or come one some sort of sharing deal, leasing deal where it gets put to use. otherwise this is another one of those yahoo-like situations where you know, there's a big question mark over a piece of the business that has nothing to do with the rest of the company. >> what do you think is going to happen? they'll come up with a sharing agreement or they're going to se sell some spectrum? >> i don't think he's going to sell. my theory is charlie wants to stay in the game. this is his company. but it's not clear that's going to happen right away. another thing to keep in mind is there are a lot of tv stations out there that are not getting paid very much. all they've got is advertising revenue. and they too have quite a bit of this spectrum that could be sold to at&t, to verizon, and they could do the same thing with it. if you've got more and more sellers, we don't know how many yet, then they're not in as good 'position as you might think. >> does it feel as though everybody is partnering up at this point? are they going to be able to get it through the regulatory aspects that crop up with all these deals at a certain point? >> you know, i've got my doubts about that, guy.

i think in fact that's another reason to be kale with dish. we don't know that these things are going to go through, and if they don't then the whole game changes. that would essentially rule out the possibility of them doing another merger. because remember, they could try to buy t-mobile, something like that. don't think that's a high probability situation, but it could happen. that's an important thing to keep in mind. >> from a trading perspective it sounds like it's just left out in the cold at this point. it's an orphan. any move higher in the stock that we've seen based on anticipation of some sort of deal being announced, that's out of the stock and that's gone -- >> yeah. that's it. i think right now any move higher is based on speculation they're going to be able to monetize the spectrum. it's not going to be because of the underlying business certainly. satellite is a very tough place to be because they can't do broadband like the cable guys can. so you've really got to keep your eye on the spectrum and whether or not they can monetize it. >> j.j.-g to see you. john jannerone otherwise known as -- >> flash. >> jumping jack. >> united states is accusing china of spying on their trade

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♪ u.s. department of justice is accusing five chinese officials of criminal cyber espionage in a kras that is the first of its kind. attorney general eric holder says chinese officers stole trade secrets and sensitive internal communications from u.s. companies involved in nuclear energy, steel manufacturing, and solar energy. so what does that mean for u.s. companies doing business in china? let's bring in jim lewis, senior fellow and director of the strategic technologies program at the center for strategic and international studies. jim, great to see you again.

>> thanks. how are you? >> i'm good. when i heard this news, i thought immediately about retaliation. what do you think the odds of that are? >> chinese will definitely look for some way to retaliate. but they will bear in mind the fact that their economy is more vulnerable than ours. so they'll see if they can find something that makes the point that they aren't happy, but there's a limit to how far they can go. >> the companies cited by the attorney general, they're sort of in the old line manufacturing areas where dumping and tariff issues really are in play. but there are a host of other companies that are dealing in china that are sort of entangles with the government right now, companies like qualcomm, which are under investigation by the anti-monopoly bureau for using its competitive market position in abusing prices. so i'm wondering where you think is the most likely area we'll see retaliation happen. >> you know, i think that's the kind of thing that china will look for. can they squeeze companies like qualcomm or some of thes, maybe cisco, a little more than

they're squeezing them now? the u.s. can help manage that by reminding the chinese that legitimate investigation is one thing. doing it to retaliate against something you don't like is really contrary to china's wto obligations. that's the crux of the story. china doesn't live up to its wto obligations. they've got to play by the rules. >> jim, here's the other side of it. i think all these concerns on china are things we've seen for decades. let's be clear about this. gsk now is also in some trouble in china for fear they were bribing officials. this is stuff that goes on as well. foreign companies haven't necessarily been without their own failings and transgressions. so to some extent isn't this just a case where some guys are finally getting singled out and it's a difficult trade environment and none of this is any different than we've ever seen before? >> no, it is different. the u.s. has been talking to china about economic espionage for four years in private, and it was even topic number one at

the sunnyland summit where president xi and obama talked about this for a couple hours. chinese haven't taken steps to show anything that would suggest they're trying to get it under control. you know, if it's a legitimate investigation into corruption in china, that's perfectly within their rights. god knows there's plenty of corruption to go around. but in this case they've been ignoring the u.s. on economic espionage, and so the government, the administration decided to take it up a step. >> do you think this signals a change in the way u.s. policy deals with china when it comes to hacking? we're talking about cyber espionage of probably intellectual property and such, but when it comes to hacking state targets like the department of defense and so on, so often the u.s. has turned a blind eye to any sort of alleged activity. do you think now this could signal perhaps the u.s. would regard it as an act of cyber warfare? >> no, i've been in the room when defense department officials have told the chinese,

look, you're a great power and great powers spy on each other, you spy on us, we spy on you. and military espionage is okay. we don't like it. sure. but it's within your right to do it. what the u.s. is objecting to is this commercial espionage. that's where i think you're going to see the pressure, is no one forced china to join the wto. they said they would protect intellectual property. they aren't doing it. >> jim, we're going to leave it through. thank you for your time. jim lewis. retaliation. a company like qualcomm. like a cisco. >> could be. yes. but i don't think it's going to affect the stocks. but you know, china can come back and say listen, the snowden stuff, you guys are doing the same thing. so either there's no credibility with him, which who knows, or everybody's playing the same game. so i think you know, we're maybe going down a road we might not want to go down. >> qualcomm's been under heat for a long time for this whole abuse of antitrust thing. >> if you think it's heat now, do you think it gets worse because of the wild card now that china could retaliate?

>> i think a lot of guys in china -- >> kate spade is a high-end retailer that beat the street in the first quarter driven by a surge in sales toyotas core brand. the luxury brand is looking to make some big moves in asia. craig levitt, the ceo of kate spade, joins us on set for a cnbc exclusive. plus dennis gartman sounding the alarm on u.s. markets and make something big adjustments to his portfolio. we've got the details after right after this. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal to execute your trade in one second. i'm derrick chan of fidelity investments. our one-second trade execution is one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. they're the days to take care of business..

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kate kelly and credit suisse. kate. >> in alexandria, virginia in a courthouse any moment now we are expecting to see the onset of a hearing in which the united states has charged credit suisse a.g., the swiss bank, on one count of conspiracy related to tax fraud charges. the activities in question date back as long ago as 2002 as well as 2006 and 7. there are two unnamed clients in these court papers that i'm holding that the u.s. has just filed against credit suisse, and we are expecting, melissa, to see both a guilty plea and a settlement and fine that will come to a total of more than 2.5 billion according to sources familiar with the matters. attorney general eric holder will give more details in an expected press conference around

6:00. >> all right, kate kelly, thanks for that update. does this matter at all in terms of the credit suisse trade? >> i don't think so. i think this is stuff we've heard in here the whole time. i think it's good to get some of this stuff behind you. we've seen a lot of stocks rally in back of it. no, i'm not changing my view. >> stocks closing higher today but dennis gartman says this chart shows why a correction may be coming. joining us now is dennis gartman, the editor of the gartman letter. hey, dennis, what do you see in that chart? >> well, i think what you've seen is a divergence between the various indices. it reminds me so much of what happened back in 1972. i'm probably the only guy other than dougie cass who can remember in 1972 and was in the business back then, but back then you had the nifty 50, back then huh the dow making new highs while the underlying market, the broad market was basically coming apart. and i see the same thing happening here as the dow -- as the narrower indices make new highs but yet the russell, the nasdaq seem to be showing signs of weakness.

a little disconcerting to me. i'm not sure things are going it come apart as they did in '72 to '74, but it has caused me to say look, i'm still long of coal, i'm still long of aluminum, i'm long of basic materials. but at the same time i wanted to get hedged, i wanted to go back to market neutrality. and everybody's heard me say that on tv before. but i think in a bull market there's only three positions one can have really bullish, pleasantly bullish and neutral, and at this point i'm comfortable being neutral. i have been for a couple weeks and likely continue to stay that way. >> you're concerned or comfortable. what needs to happen to make you change, to get you more into the fearful mode? >> guy, it's going to take a lot, actually, to get me to be fearful about things. you're going to have to see deterioration in the narrower indices. you're going to have to see the dow not make a new high. you're going to have to see the s&p not make a new high. you're going to have to see the russell and the nasdaq take out

previous lows. and then i would get a little bit more concerned. but it's still been a bull market. you have to remember that. and so therefore one can -- at most the most bearish one can be at this point is neutral. every smart guy you know, every smart woman you know who's tried to pick a top has erred. so to me the most bearish one can be here is neutral. and i must admit even at that point i'm always worried about missing the next move to the up side. that's what bull markets do. >> so when you're in neutral, dennis, on equities but you have long positions in materials and coal, i mean, it sort of doesn't make any sense to me at first blush. so if you can walk through the reasoning behind that because when i hear you're bullish coal and bullish materials, it sounds like you're betting on global economic growth, which would be good for the markets. so have you pared back that exposure at all, or do you have the same full position in those areas? >> i still have the same -- i'm still long as much coal as i've-h i'm still long as much aluminum as i've had and i've

simply hedged it using s&p futures, using other sorts of drifts, selling short the triple qs, buying sds, any number of things to get as close to neutrality as one can be. but if you take a look now over the course of the last six or seven months, i turned very bullish of alcoa, of aluminum back in october. and alcoa has gone up about 40% relative to the broad market. that's not a bad trade. >> dennis, thanks for your time. good to see you. >> always good to be here. thanks for having me on. >> dennis gartman of the gartman letter. you have gone short qs recently. >> it's interesting what he mentione mentioneds. i don't think you try to pick a top in the s&p. it's got this kind of most favored nation status or something like that. but i do think that you can sell rallies in the qs and the iwm, which is the russell 2000, until you're proven wrong. the qqq is very dominated by google, microsoft, and apple. so remember what you're doing there. you know, and apple's kind of keeping that thing afloat right now. so to me i'm actually getting

pretty close to covering the qs. if the s&p makes a new high, listen, it could go up, you know, 2%, 3% in a straight line. >> time now for pops and drops. big movers of the day. we've got a drop here for worldwide wrestling down 3%. guy? >> compared to friday when it was down 40% this is actually a pop. you count vince mcmahon out, you shouldn't do it. he's come back, risen like lazarus a number of times, and if you want to trade the stock from the long side, given the volume you saw on friday, maybe do it against that friday low, 1055. >> volleys. >> all about iron ore, about china demand. they're also about a ralfullily in brazil by wi has been more geared about a change in politics. long volley, short petrobras. totally outperforms. vale not trading on fundamentals here. >> pop for fire v.ve. >> 91 million shares coming unlocked tomorrow night on the close. rick sherman was out pounding the table reiterating his buy

today and $55 target. i'll just say this. the stock is still up 40-some percent from its ipo in september. if the thing gets nailed down 10%, 20% like we saw on twitter, probably a buy. >> pop here for skechers up 4%. karen. >> skechers got a pop on citigroup nishtding withinitiats price target. if you want to be in the shoe space i think foot locker sch better than skechers. new york city daredevils armed with gopro cameras five members of the red bull aerial team took to the skies sunday for a superman style freefall over lower manhattan. the winged suited wonders got past the freedom tower and successfully landed on a barge moored in the hudson river. >> that's a little dangerous, don't you think? >> slightly. >> you don't want to be doing it. you've got to be doing it at least less populated areas. you can land on somebody, that's going to hurt, no? >> r.e.m.'s life's rich pageant. >> that's an excellent point. r.e.m. out of?

>> i'm sorry? >> out of -- >> what other bands? >> i mean, b-52s. >> georgia satellites. >> georgia satellites. go on and on. >> kate spade, as the company refocuses on its core brand and takes aim at michael kors and coach. the ceo of kate spade joins us here on set to talk about the transformation of the company, a cnbc exclusive. plus dan nathan spotted some bullish activity in another retail name. he'll break the trade down after the break. more "fast" right after the break.

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♪ kate spade and company wrapping up its first quarter with a renewed focus on the core brand continuing to drive strong sales while it continues to yut pace peers in the industry up 16% this year compared to the s&p 500 retail index which is down 5%. with us now in a cnbc exclusive interview is the ceo of kate spade and company, craig leavitt. craig, great to see you again. >> great to see you. thanks for having me. >> there are a lot of things in the quarter a lot of analysts like. you beat, you raised guidance for 2014. let's talk about the shoulder strategy. because it seems like a lot of other companies have tried to

adopt the shoulder strategy, a strategy in which you're after sort of the entry point all the way up to the $600 aspirational bag. >> and beyond. >> but because they flood the market with too many of the low-end products. and i'm thinking of a coach. i wouldn't necessarily bring up your competitors. but how do you make sure that that is not happening to your brand? >> i think it's really about a balanced approach. so you know, when we look at and we evaluate our a.u.r.s, which are actually quite steady with this approach, that's really one way that we evaluate this. so we are quite balanced in the approach of having this aspirational product that is $600 to $1,300 for that luxury customer. balanced with these access points for that younger, particularly that millennial customer who wants a part of the brand but maybe can't spend the $600 for a handbag. that's things like the cross-bodies, where we have them -- a monday cross-body we have actually here at $148. that's really accessible for that consumer. and it gets them into the brand. >> i love that bag. >> i think that was brought for you, by the way. >> fantastic.

great color. >> five colors available. >> for every outfit. >> got them all. >> in terms of your push internationally it's a very strong push, are you sacrificing the mix between high and low end in order to get into those markets? are you, for instance, selling more of these than these? >> no. in fact, in a lot of the markets that we are growing in the fastest, we're finding that we are actually moving more toward those aspirational price points. china is a great example of that where our accessible luxury price points still on the luxury end of our pricing architecture are among the most popular. this bag in particular, which is about a $600 bag, that just delivered is almost sold out and it's really exceeding our expectations. it really shows this balance of those access and luxury price points. >> of course you can find kate spade in a lot of retailers but you also do strong direct to consumer business. it was up 29% -- >> 29%. correct. >> some analysts say, though, that if you bring in your e-commerce business in-house as opposed to outsourcing that could be as much as 8 to 10 cents in savings per share.

any thoughts of doing that in order to pull the lever and increase profitability? >> it's certainly something we continue to evaluate. i think that what we've seen since the replatforming this last year, we've been able to double the capacity that we have in terms of through-put through our site. so we feel very good that one, we're not depressing the business at all. and i think right now we've got some wind-downs of some tsas ahead of us in our distribution facility with our lucky brand that was divested recently. ai think as we move through that and have that capacity we're going to be able to evaluate whether there's opportunities to do more things in-house. >> congratulations. that first quarter was phenomenal. >> she's a shareholder, by the way. >> i am. >> thank you. >> i sold most of it too early. but anyway, i mean, that was spectacular. so i wonder if you're taking share has to be part of it because you weren't promotional. how big can you get? >> we've said that we think in the long run we can be a $4 billion business at retail, and we still see that pathway. we feel very confident in that.

you know, what we love about our brands are that they are global in nature week, really accepted in every market we've gone into, and it is truly a lifestyle business. we are in so many different product categories with many more to come. so really that diverse approach to our business having multiple product categories, multiple geographies, that is a steady path to growth that we feel confident about. >> in this lifestyle sort of attitude, swimwear, you're going to launch that. >> launching in november, yes. >> what else? >> home launching next year in a number of categories. so we'll have a lot more to say about that in the coming quarter. but that we think is a big opportunity. we're launching a small bit of that later this year. table linens we're launching. we're expanding our tech offering, tech accessories offerings. so there's lots more to come. >> craig, good to see you. thanks for coming by and showing us some of the goods here. craig leavitt, ceo of kate spade. >> thanks for having me. >> you said you sold a little too early. why did you sell? >> i'm an idiot. i have no other explanation than

that. it's phenomenal. they've just done a remarkable job. they've got to be taking share as well as growing the whole pie. fantastic job. >> stock's had a tremendous run. >> better than coach -- kors, excuse me. >> karen can speak to it. it's getting a wee bit rich on valuation. if you want to knock any holes in the quarter, gross margins were slightly less than last year. again, just nitpicking but the stock still feels like it has room up to that 2007 high when it traded up to 45 bucks. >> it's a little hard to take you seriously when you're wearing a cross-body. you wear it well. but -- >> listen, first of all, it's a great color for me. it matches my eyes. just saying. >> one of the big surprises this year, abercrombie & fitch shares up 16% on the year. one options trader made a huge bet today that the stock could move as much as 16% on earnings next week. dan nathan's over at the smart board with more on this trade. dan? >> options volumes ran hot today. 1 1/2 times average daily volume. it was basically all calls, and there was one trade that stuck out when the stock was around

$38, a trader bought the january 42-52 1/2 call spread for 2.18. that trade breaks even at 42.18 up 16% with a max profit of 8.32, up 52 1/2 on january expiration. that's up 38%. when you think about what's going on here, look at this chart. it's just a disaster when you think about all of these gaps. and these are all earnings gaps for the most part. but when we talk about 44.18, this is the break even on january expiration, and the gain, the max gain is up here. it's a wide range for this trader to actually have a profitable trade if things get going. there's 21% short interest here. the company reports earnings next week. and i don't think this trade is an earnings trade. when you think about it, this is the price of options right here. implied volatility is very high. this is not the sort of trade you would do if you thought the prices of options were going to come down very short term. so this trader is looking out a few quarters, maybe sees a turnaround or possibly a

takeover. it hasn't been a takeover name for a long time but it was rumored years ago, 3 billion market cap. who knows? >> more "options action" every friday 5:30 eastern time. also check out the website, optionsaction.cnbc.com. astrazeneca rejecting pfizer's final offer and astrazeneca's stock gets slammed. is the deal really off the table? we'll get finerman's fine print right after this break. much more "fast" straight ahead. making new york state number two in the nation in new private sector job creation... with 10 regional development strategies to fit your business needs. and now it's even better because they've introduced startup new york... with the state creating dozens of tax-free zones where businesses pay no taxes for ten years. become the next business to discover the new new york. [ male announcer ] see if your business qualifies.

i'm scott pelham with the "fast money" news alert. the board of board of allergan, thebox to maker firing back at ackman. ackman saying the board essentially violated its fiduciary duties in rejecting the takeover offer from valeant and suggesting that david pyatt, allergan's ceo, had a conflict of interest in being involved in elvis evaluating the offer in the first place. allergan firing back saying the board of directors is aware of its fiduciary duty to its stock quloerlds and is being advised and take issue with ackman's tactics with the blatant attempt to isolate david pyatt who has the best interests of all stockholders. they do add that the entire board is open to all options

that will significantly enhance the long-term value of allergan for all stockholders. so this war of words continues. of course ackman holds about a 10% stake in allergan. back to you. >> scott cohn, thanks. astrazeneca rejecting what pfizer calls its final offer to buy the drug maker. that after pfizer sweetened its bid to $110 billion. is a hostile takeover on the table? >> the reason you see it not really trade then and astrazeneca rejects and the stock trades down is this is a uk bid. in the uk when a bidder says this is the final offer that's, it that's their final offer. you cannot come back for six months. here, however, you're free to lie and say whatever you want and final bid or really, we're not coming back and then come back whenever you want. so there they try to be really straightforward about it. i think it's great for shareholders because you know exactly where you stand. >> but also the biddee too. you can't -- you have to be very

careful for your shareholders you that don't lose a good deal and that you don't step out of the way. because otherwise it's all a game of poker. >> yes. that brinksmanship. but pfizer put up a mealeymouthed bid. >> mealy-mouthed. >> didn't close it on time. >> coming up next on "mad money," america's energy revolution still in full swing making investors plenty of green tonight find to put a focus on the country's latest shale energy could help caruso climb higher. we'll come right back. stay tuned. ♪ ♪ ♪ ♪ [ tires screech ] chewley's finds itself in a sticky situation today after recalling its new gum. [ male announcer ] stick it to the market before you get stuck. get the most extensive charting

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jcpenney and rite aid alive and kicking. but which story is a better shot at reviving your portfolio in i'm taking the pulse of these retail players. "mad money" is coming up next. time for the final trade. let's go around the horn. tim. >> i like in deutsche bank trade. 20% of it went to a stock sovereign wealth fund. 40 is your stop. deutsche bank. >> dan nathan. >> starbucks. i'm still playing this from the long side. long june puts. >> karen. >> short right here. >> guy. >> where are you watching game 2? >> i don't know. >> same place as game 1? >> just -- >> tuesday night. i've got some time to figure it out. >> before dan caught up to the smart board, anf was my trade.

then he just solidified it for me. abercrombie & fitch. >> you swayed him. >> he does sway me. >> i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 for more "fast." meantime, don't go anywhere. "mad money" with jim cramer 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 trying to make you a little money. my job is to entertain you, educate and teach you. call me at 1-800-743-cnbc or