This after snap reportedly conjured up a whole chamber of secrets on facebook in a dossier titled project voldemort the document lays out all the ways facebook tried to thwart the competition and prevented snap from trending on instagram. Now snap is hoping the ministry of magic known as the ftc will step in. Will regulators be able to work any real magic here . Guy. That was one of the best openings in the history of the show. He doesnt know what to say anymore. Do you even know what she said im familiar with this harry potter thing there are like eight of these movies. Yes. Theyre its the sack same movie. The kids get older and run a dont spoil the end. It sounds like fast money. Its a scam run around with their wands good job. Back to talking. I want to dislike facebook in the worst way. I want to stand here and say, you know what, the stock is headed sl headed little headed significantly lower we said in july, you know what will happen, it will go back and test that july high from last year to 11. Its going to fail so you have that major double top. You go back to that quarter on july 25th or so, outstanding people arent fleeing. Advertisers have nowhere to go their operating margins seem to be improving so as much as i want to hate i and as much as regulation could crush these guys and gals, i think you got to buy the stock into their october 30th. Average revenue per user. Arpu is holding fine. Metrics are amazing. The bull case for people that think there could be more regulation, facebooks sum of the parts including whatsapp and instagram, highly valuable properties with massive user bases that may be undermonetized at this point leads to a place where people might begin to value the company otherwise. Facebook is trading at a discount has underperformed the sector and despite the fact you havent seen people migrating en masse to other form, i would argue then google controls the ad space in todays media world even more so than traditional media companies, so far facebook is not yielding a premium on its multiple. Is that discount the regulatory discount . I think its the regulatory discount i think its the idea that the challenges, the narrative theyre trying to create a superapp which includes their chapz which includes instagram and the traditional of what you think of and facebook includes their libra so the problem you have with facebook or the risk is they cant get any of these things done then all of a sudden this combination, this superapp theyre trying to get together doesnt happen and youre left with all these disparate parts not necessarily saying thats going to happen but probably why facebook hasnt hit new highs yet. Look at all these instances in which facebook allegedly copied or came out with a feature that was very similar to snap and the ftc isnt just talking to snap but also talking to other previous acquisition targets or smaller competitors that would have been acquisition targets. How many times has apple copied samsung limitless. Seven. Exactly so the point is its okay to be copied. Are we using it as a template that these Big Companies are being broken up. I think thats the bigger thing. If you break up facebook does that domino through the whole large cap tech is facebook yeah. You can make a bull case if they do try to break up facebook, the stock should actually be significantly higher to tims earlier point, so i hate the win win thing and talked about it last week but right now and bear case is probably a six to ninemonth or year bear case but into earnings a month from now or 35 days from now i dont know how the sum of the parts is a positive this time around. Its a force thing, by the government, overreach. Screaming negative this time. Well, if its a win win why would there stillable a discount to valuation because of the Regulatory Risk . I think facebook needs a catalyst of some kind and certainly since we had all the dynamics around the elections and all the issues and a privacy perspecti perspective, the privacy issue is as important as the regulatory issue even though people havent walked with their feet i think at its core facebook is a company who has a product that at some point there is something that could be mildly tenuous about their loyalty there but it comes down to this stock has traded roughly between 20 and 30 times multiple for the last five years and traded add a massive discount to Something Like a microsoft at this point. Theyre apples and oranges except for the fact there is a scarcity in the social media space. It should be traded at such a bigger number, the irony if you break it up and force it to break down these core businesses i think theyre going to stand on their own and be worth a whole lot more. I think you bring up a good point this terms of privacy. These are someof the biggest issues, right that, congress and the ftc, whoever wants to come down and beat tech for whether using their dominant position or the privacy issues, two huge things, for facebook theyre facing in the crosshairs for both of them. Yeah, i think its important to separate those two, right, because you have one allegation or one thing that congress may come down on them for which is kind of using their position to bully around and push around competition or keep competition out. Now, thats an age old tactic that everybody every industry has used thats one thing, the privacy issues to me go a little more to the credibility of the company and exposes them a bit to potential competitors. Now, we havent seen a real competitor they have a massive mode because of the size of their social media because of that effect but you can see rode the credibility and guy was saying my bear case, im not necessarily bearish on facebook im just not crazy bullish on it but its like the next month all of a sudden it will fall apart but start to see how the story begins to deteriorate and erode. Totally agree i couldnt agree more. Again, go back to the Second Quarter release on july 24th, analysts, six of them at least were tripping over themselves collectively to raise their price targets and the price targets i see were anywhere from 225 to 260 the stock sold off and technically did what it should have done. In an environment where this Broader Market goes sideways and doesnt want to seem to go lower doesnt facebook sort of set up on the long side i would say yes. Yes. Pains me to say it. You know, if you want the market to move higher, you need facebook and you need google as far as im concerned, these are the two names that have the most opportunity from a valuation perspective, probably have the most strikes against them in terms of the world of the Analyst Community or where people are positioned. Facebook above 191, breaking above 159 is bullish overall for market. Is this good for twitter or snap i think twitter has gone on the radar. Oddly enough twitter has been the winner nap is up 210 year to date. We didnt even talk much about that that streams of the lack of positioning to the long side i think thats probably run its course already lets turn to sorting of what sorting hats no sorting hats. I dont sort hats. I stack them. Lets find out i thought perhaps it was another harry potter reference i thought i was missing something. The chart master will break it all down hey, carter. Interesting times i would start with an eff that captures all of this, cute symbol social, socl and dozens and dozens of stocks, top five, so 45 , 50 are in the top five, six name, twitter being the big weight, facebook, naver in south korea and snap lets plot the chart and move on to some individual names now, obviously subjective, but this is how i would draw the lines. You got a line of tension here youre working into the apex of the situation and what that typically means is is that you get something quite dynamic. In fact, its almost jump ball bulls will say this, of course, bears will say that. If i pull it back even further, here is the same sit of going back for five years. Now, if i were to put the longterm trend line, were we simply to come back to the longterm trend line and i. E. , break below thats my hunch i think we get back to about an 8 decline my hunch is this is what happens rather than to the upside. In any event lets talk about these three stocks and grasso is making this point, snap has been the big winner over the past year and then, of course, you see facebook lagging and i want to look at that i think thats not an opportunity, i think thats a problem so very simple charts. Up trend is an up trend is an up trend. It is in an up trend and bounced off this line. The lines are what they are and looks like its going higher and then youve got twitter and its done the same darn thing bounced off trend, computers draw trends, whats not to like and then there is, however this, one which has, yes, bounced off the line and becaused off the line but now its sort of a bit under, a bit below i think thats at risk of ultimately breaking and what you would get is that and that even as that happens is an unhappy setup. Thats about all i know. Carter, why dont you come on over we got lots of questions will will bring the chair in can i ask quickly, carter would be that little blond kid in the harry potter huff and puff or whats that kids name is he a villain oh, hes a bad guy. Id be on the bad guys side on look as lone. Beanies with the propeller on top. Lets move on back from the rails here in terms of facebook if it does turn lower what is the next support . Its funny. Adressing what you said obviously its support is anywhere you might think but i think amazon is also key all lay at risk. Those two in particular, netflix weve heard from, its in trouble but facebook and amazon here, if and as they weaken im not sure look at today. Thats what kept the market from the session the banks were okay, industrials okay these big names that are so loved if and as they dont progress the market cant progress. Tim said facebook and alphabet, throw in there amazon, of course. Yeah, same general circumstance heavy, a little bit ominous, needs to prove itself with this next earnings are you equating when i look at the s p you can make the case either way. Either its rolling over. Right back to those tops and churning can you make the case with that wedge for the social what level, sorry, to simplify, what level to the downside do you think the case is broke for me its 2979 real short leash on the s p. Youll probably give it a little more room. Either way i think you would agree that any weakness from here would start to undermine the notion were going to break out. Carter, we have to let you go we got a news alert. President trump is in new york city for meetings ahead of the u. N. General assembly. Just a few minutes ago he was asked about trade negotiations with china, eamon javers is back at headquarters with the latest. Melissa, thats right you remember so much attention focused on the idea that the chinese were canceling their scheduled to the midwest where they would talk agriculture with American Farmers the president at an unrelated buylateral session was just asked about that moments ago and had an Interesting Exchange with the treasury secretary Steven Mnuchin over what happened last week heres how he said it. That was actually at our request they delay that. So we didnt want there to be any confusion, they have started buying agriculture theyre going to reschedule that in a different time. But that was truly at our request. Why was that at our request out of curiosity we didnt want confusion but i want them to buy farm product. They are going to buy sdmrath that was the first time the president had heard it was at the u. S. Request that the chinese canceled their visit, it sounded like the president said i want them to buy Farm Products i want them to go through the midwest buying products from American Farmers thats the desired outcome here. There are a lot of political reasons why the United States might not want chinese buyers touring through the midwest in almost a campaignstyle event announcing ag purchases so you get the sense that mnuchin was saying theres some confusion here as to what exactly is happening and we asked them to back off that and they did an interesting moment there, melissa. Why wouldnt they, eamon . I mean, from what i understand because on power lunch we spoke to the National Director of the Montana Farm Bureau about specifically the chinese canceling the visit. It sounded like the chinese reached out directly which can sort of an unusual protocol and usually go through somebody in the government to arrange such a tour of farmland and the chinese reached out first thing this the morning to cancel but no details were actually there was no itinerary. There was no set schedule. It was very sketchy to begin with. Right yeah, what you heard mnuchin saying that the United States asked the chinese to back off that visit why would they want them to back off . Maybe the Media Attention surround it could be something that the United States didnt want at this point mnuchin said we didnt want confusion surrounding the negotiation, that is, maybe he doesnt want American Farmers to think that were at an end stage here to this negotiation if in reality were not. Okay. Eamon, thank you eamon javers englewood cliffs, new jersey today he is, unusual how fragile and how we reacted immediately to that headline that the chinese cancelled this trip. Amazing to me we didnt hear about this that was obvious what the weakness was in the market, why trump didnt have his ear to the ground on this and we find out a day later you have european pmis in the toilet. We have our growth subject to a recession and now you look at a stock like john deere, up 10 for the year if the talks are still on and nothing to worry about that should move higher. The key for the market here is any incremental movement on trade talks. At some the point of it all in time we have priced in the worst case scenario. If you get movement incrementally that will be generally positive for this. If youre looking for an etf, dba which is the agriculture index that trades a lot of the corn and soybean and those type of things is the heart of whats going on here. You know, to me it looks like its trying to bottom but i dont the problem catching a falling knife that has no oil in it as opposed to other etfs. Its difficult to trade in and out of headlines the thing they should be following is the fed and the fed today that made a couple comments to make it sound like the most dovish one has only one more cut tenyear yields and technical components but bond yields are coming back in the dollar is going higher two powerful trades that i think ultimately control the equity market. Draco malfoy was the little toe head kid thank goodness. Sarcasm does not become you number two, i hate the word awkward because i think when you say it it sounds awkward. But that mnuchin thing, i mean, thats about s if. Like your parents fighting or something. The last point, again, i dont were getting strung out. I dont see any deal coming. Goldman sachs said aas well. You can get good headlines, bad headlines. Coming up, ipo drama reaching a fever pitch. What it could mean and speaking of markets, one strategist says there are three keys to the next rally and will tell us why it could put up more room to run. Limu emu doug and now for their service to the community, we present limu emu doug with this key to the city. [ applause ] its an honor to tell you that Liberty Mutual customizes your Car Insurance so you only pay for what you need. And now we need to get back to work. [ applause and band playing ] only pay for what you need. Liberty. Liberty. Liberty. Liberty. Man can i find an Investment Firm that has a truly longterm view . It begins by being privately owned. With more than 85 years of experience over multiple market cycles. With Portfolio Managers who are encouraged to do whats right over whats popular. Focused on helping me achieve my investors unique goals. Can i find an Investment Firm that gets long term the way i do . With capital group, i can. Talk to your advisor or consultant for investment risks and information. Welcome back to fast money. We are following a developing story on wework. Pressure is mounting on the companys founder and ceo adam newman after wework postponed its ipo road show. Lets go live to San Francisco with the latest. Deidre. Melissa, that is right. Adams role as ceo is being questioned after reports of smoking pot on a plane, having so we will la shots, questionable hiring and those Corporate Governance liabilities they shed light on sources tell cnbc its soft bank leading the pressure against new eumann he first invested wework and newm neumann after a 28minute car ride now as we expected Board Meeting sometime this week to determine his fate, both sides will need to tread carefully neumann still has majority voting power and could fire the whole board and keep his voting position if no ipo, remember, thats contingent on a debt deal. He may actually still need more soft bank money. Soft ba softbank has its record to protect. How it treats neumann could affect how it invests in other startups. As for the rest of the board it is unclear where they stand on him. Ron fisher represents softbank stev Steven Langman and bruceton levy, the vc firm that ousted travis kalenik theyll have to weigh risk versus reward. Deidre, a lot of people say it will impact their ability to work with other companies who need money nobody talks about the impact on raising the investor money which its trying to do right now because in the eyes of an investor, if youre going to side with management all the time you dont have my best interests in mind. Melissa, thats a good point, right. They have to tread carefully as i said you got the founders on one side and have to show theyre tough and going to protect their investment so in one sense when you have all of these trying to died if they want to throw billions in the hat it could be seen hes willing to get tough against a founder that is acting the way that neumann which could be concerning to misdemeanor deirdre bosa on the wework saga it started when the board as loued all of this to start happening and started when they said okay with dual class structure before this report. A lot of investors