45 days. Have we gone too far too fast. We would agree. Currently it trades around 20 times ebitda and linkedin was originally approached to be taken out around 17 time answer ultimately got taken out at 21 times. Once something is broken, the bankers and the companies will look at 30, 60, 9day moving day averages before the news was broken. And if you look at those averages and put a 40 premium on that youd get to 25, 26 taken out. Thats 3 to 7 upside but the risk that you alluded to at the beginning. Show if something came out that a process was busted, was never occurring in the first place drop down to below 18, a 25 drop so we dont like the risk reward setup. Sure feels like were walking toward a deal but youre not convinced its going to happen. Yeah, were unclear is a deal is about to happen but more of what were trying to quantify is what is the risk reward for investors and whats the upside. The other thing we pointed out in a note yesterday, whats the boards responsibility. So if it has been an informal reach out on a companys part and there is interest, does it owe it to shareholders actually have more of a formal process and more Companies Look at the asset and maximize responsibility. You expect them to make a deal in calendar aelephant 16. Well, when we met with management their point of view, you should have the ceo on board for at least a year and started full time september a year ago. A lot of challenges theyre doing in Fourth Quarter, nfl, live, even integrating double click. If those didnt come to fruition at that point they would maximize responsibility by having a process but see the results of those efforts first. Citi says no deal could mean it goes back to lows of may, ho decrease from where we are now. How low do you think it goes if this doesnt go anywhere . Yeah, we think it could break below 18 where it started before this happened and our target obviously is 18 for the end of the year. But you could have a as far as risk reward the risk to the downside is songer than poe emption upside. Well, lastly, we know from fabers reporting that the real people are looking at this business and looking seriously. Do you expect a deal to happen undoubtedly between now and the lets say the middle of 2017 . Well, it really depends on how their efforts come out in the Fourth Quarter. If nfl resonates, live resonates and maus uptick back up i dont think management wants to sell and the board is supportive of management particularly if showing progress here so to us, it would be more predicated on how it turns out. Look, respectfully, bob, though, hasnt that changed . I mean, isnt it more clear than ever now based on the reporting thats been out there in fact theyre resigned and maybe thats the best word, resigned they have to sell, they may not want to but resigned to the fact they have to and theyre going to do a deal with somebody whether its disney or microsoft or sales force or whoever else has been thrown into the pot. We agree they need to maximize the shareholder value and if there is interest out there, thats why in our note yesterday we said the question is now the board responsibilities, if there is Significant Interest do they need to acknowledge that and then also then reach out to other pears that may be interested in a formal process was instituted. Who makes the most sense if someone does buy twitter. You know, theres a lot of players we went through in a note, 30 different players or so, we think there could be a takeout but may be at a lower price. The ones people most point to are google, microsoft, sal salesforce. Com and verizons and at ts of the word but disney is difficult. Theres a lot of not safe for work content on twitter. I dont know if disney would want that brand association. You say lower, lower than where were trading today . Yeah, it could be a process. Cow have a deal thats actually offered lower than where you start today and then i think youd start more of a formal active process. Yeah, interesting. Bob, i know you jumped out of a meeting to give us a call. We appreciate it. Talk to you soon. Thanks so much. Suntrust bob peck. Twitter on the move falling off its best levels of the session. Joe. I think if their deal would be close youd see things happening to the boards and i think thats whats important. Why wouldnt jack dorsey step off the board of disney . On the board of disney and sitting in a room discussing with disney what they should do with twitter and needs to step off that board. Sheryl sandberg sits on the board of disney, look at seasforce, look at alphabet. Alphabets youtube ceo sits on the board. Were close to a deal. Thats what you have to look. Reshuffle the boards to align with fiduciary responsibilities. We havent seen it yet. What do you do if youre an owner of twitter shares at 12. 05. If youre a realist, ill tell you what to do and told josh brown yesterday. What you do you sell either the 22 or 23 calls, now, josh said not enough, i deserve more. I dont think youll get any more, josh. And everybody else out there peck said you might not get this much. I think you will get like ive said, judge, low to mid20s so to me that says 22 to 24 is the sweet spot. Thats why im short 22 calls and 23 calls against my longs and im short all the way out in january. Got more premium. Bought me 4 worth of Downside Protection by selling those. Thats why i did it. I think the stock gets taken basically right about here. If i own the stock today, pete, is my best move to sell it right here. Yes. Youre at 20 just where are we at, 23. 63. And its made an absolutely incredible move and all based on nothing to do with the fundamentals of the company but based upon all the rumors were hearing about each and every day. The smart trade is what john is talking about, ive done the same thing, been in this hundreds of different types and recently its been all about call spreads. This is why it makes so much sense. For this risk reward go out to january. Somebody bought the january 20s against the 29s. It cost them very little. The potential gain there, if it goes anywhere close to 29, if it goes above there you have capped yourself out. 9 bucks is the most you can make, thats it but do we foresee that coming somewhere above 30 . I dont think so but somewhere in the middle 20s, higher than john on this. I think 25, 26, 27, those numbers would maybe make sense. If as many people are as interested as were hearing about all being reported, there might be a little bit of a bidding war scott and some competition to maybe its closer to 25, 26. We asked before, steph, whether the price move that it enjoyed since the reporting first started complicates the matter. Twitter was at, what, 14, then 18 and now its nearly at 24. To pete he point peck says you might not get that much. The stock is falling off its best levels. The fair question whether youre an owner do you sell it. I would because the rally as speed said is fundamental. Lack of fundamentals rather. This company has had a really big problem monetizing what they have. We dont know what their strategy is and seems like a hodge pomg but there is potential there. I truly believe that but i think it would make more sense to be part of a Larger Company with bigger pockets with bigger scale. I think of all the names, google, alphabet makes the best sense, quite frankly id rather them spend money on Something Like twitter and try to figure that out than the selfdrives car or the fiber or any of the other initiatives of this that that company is doing. And i think theyve got plenty of cash to do it so i think twitter makes sense as a part of a larger entity. I do not think salesforce. Com makes sense. I dont think disney makes sense. We tossed around a couple of names in that fang group, that name you all know so well and follow. Its sort of a forgotten run, the stocks have had a great move, lets talk about these stocks. Over three months look what theyve done. All outpaced the broader market, netflix is the worst performer yet over three months up 13 . Youre asking these things back. Youre asking the right question sitting at the end of q3 and have to sit and take a look and say, what do i want to do going into q4. Looking back upon q3 this has been a risk on environment. Technology is up 9 . Utilities down over 3 . Consumer staples down over 3 . You look at small caps, up strongly. It has been a risk on type environment. Do you want to extend that foo q4 in a lot of your holdings. Me personally ill hold on to my names like facebook and adobe but take a look at some of the super staple napes that have fallen back here like a dr. Pepper, snapple and try and use that as an opportunity to maybe diversify and get a little bit more defensive in q4. Pete, here we are talking every day about whether volatility will return as a result of the election or some of the turmoil in the european Banking System and maybe its going to hit our market over here. Yet these stocks have had a great run. These stocks. If the market pulls back as a whole arent these among the first to go down too. I would think maybe not. No, i would agree. I would think if we start to see a downturn i do think some of these would be under serious pressure but havent seen the call that everybody seems to be making whether its delivery alpha or whatever, where theyre talking about pretty significant pullback why havent seen that. Maybe we will. I tell you what the interesting thing to me is one name thats thought and i know its not a fang stock but not on that list if you look at performancewise, how about baba. We all talk about facebook, you know, we focus on that, alphabet, baba has been that name thats continuing to plod a little higher, a little higher. Not far off the high, just under 110. When you look at names like this there are risky spots out there where people are willing to go and not always just on the multiple but talking about where they are in terms of technology. Technology has been where you want to be. The chips, another area very, very strong so you want to be in the fundamental enindividual yon and micron up 2 . I go with bidu. Pete hit baba. I hit bidu. Up 21 in the last month and a half. Bidu is seeing the same sort of run that amazon is seeing and thats somewhat related, of course, but id say watch that as well. Steph, you own amazon. Right . Still . Yep. Stocks up 17 . Year to date 20 . Stay with it. Yeah, i think that theres still some juice left. Sort of a question. More of a statement. Its not the cheapest of the four and ill give you that but you could do a sum of the parts analysis and get to Something Like 900. Maybe north of that. Alltime high. There are some aggressive target, 1,000 plus. The story is really them getting penetration with prime. Because people that are prime members, they spend more. Something like 80 more than nonprime members so if they can grow it here in the u. S. Which theyve been doing nicely but also internationally, that is a nice tailwind for the company. We have the cloud story too but i would say this overall about fang. Fang in a 2 gdp world when theyre going 20 , 30 , 40 , even if that growth is slowing which is a concern for facebook and google, i think you can still own them and if they were to pull back i think you want to absolutely own these. I think you want to barbell and tech and want growth and value. I was going to go back to the question whether the market pulls back do these pull back . These have doubled the output of the s p in three months. Yeah, doubled the output of the s p and theres no sector that even comes close to it financials are the second leading sector up 3 . It hasnt exactly felt like a risk on yahoo environment. And it has been. Small caps and emerging markets stocks are up close to 10 in the quarter so its been a very Strong Quarter and to what pete was saying before, think about the market just today. The price of oil, where it sits but yet the market is higher once again today. Oil was so important to the equation of where the s p goes in 2016 for the quarter thats down 3 but yet the market is rallied. Going back to technology we talked about it profitbrexit and talked about the emphasis on the positive turn you saw in the chip stocks. That was the leading indicator and to stefanies point, they have the growth and balance sheets, they can make the acquisitions and certainly have the cash to repatriot home. Up, take a look at tap, this one is flying. Its up, what, 3. 25 . Going back to what you said, these are focus stocks for some group and its under heavy accumulation today. Good stuff, guys. To Morgan Brennan now for a quick market flash. Hey, morgan. Shares of Avis Budget Group is falling with hertz global. Avis made comments about weak demand in europe, not because of brexit but security concerns and appears hertz is falling in sympathy. Cnbc put out a call to them. Hertz is down nearly 6 and avis down 7 1 2 almost. A big call and a major player in the health care space. This is a sector many believe will be in play after the election. Get in now or stay away . The call of the day is next. Were hunting for yield in some unusual places. Is the risk going to be worth the reward. And swoosh. A big day for nike. Well get you ahead of the trade. In is the Halftime Report with scott wapner only on cnbc. Hiim here to tell homeowners that are sixtytwo and older about a great way to live a better retirement. Its called a reverse mortgage. Call right now to receive your free dvd and booklet with no obligation. It answers questions like. How a reverse mortgage works, how much you qualify for, the ways to receive your money. And more. Plus, when you call now, youll get this magnifier with led light absolutely free when you call the experts at one reverse mortgage today, youll learn the benefits of a governmentinsured reverse mortgage. It will eliminate your monthly mortgage payments and give you taxfree cash from the equity in your home and heres the best part. You still own your home. Take control of your retirement today we are back and look whos joined us. Cramer. I cant stay away. I missed you yesterday. You heard our conversation on the fang. Yes. I just think and came over. I love that i talk about that on mad dash and want to talk about it on mad money. Its one of these discussions that has to be had theyre back. Yes they are and what i think interesting and talk to stephanie, amazon, the valuation is on what we should be thinking about now because were almost into october. The valuations on 2018 are not bad and i know that people at home are thinking who the heck thinks about 2018 and the answer is the big immigrant money managers. Thats what you think about because you cant base it on next year but think further. It is tech and so i was surprised to hear the piece this morning, the jpmorgan piece, it was a little funny because it also did ali ally ba i walked right in. Glad you did. Pete was talking about pete was talking about baba. I love the guy. Look at him. Bab is not expensive. 18. And i hit him with everything i had. I really d i rush i mean i got in there eight times. I thought id do three fumbles and still put points on the board. The guy was unstoppable. Honestly he looked very vikings like. Talking about delivering alpha. Dangerous alpha. You call it looked like for the vikings three sacks. He was looking for the problem with sy, he is so smooth you start thinking that, you know, am i being sold . But the fact is is that i like the play on china. I think china is doing better than most people. I know that is strictly v verboten. Im hearing very good things, auto sales were on fire in the month of yes. Yes. Let me ask you this, on back on the fang, three months, remember its fa because they changed the darn name and wrecked everything. A note to follow higher stock price. Facebook up 17. 5 three month, amazon at an alltime high up 17 . Netflix up 13 1 2. Google is up 19. You stay with those i think amazon i will keep thinking about what bill mueller said at dangerous alpha where he said it is not dangerous at all. It really is going to double and then i look at do you know that alphabet has not been expensive for a year now and moonshot. Its not moonshot. Its on i95 now. Netflix, i have a problem with. Thats why i went with fa, alibaba. Youre putting baba in there. Which one would you buy today . I know youre holding. Which one would you buy . I would still by alphabet right here. I would still you know why, i keep thinking its going to come in. As i spend a fortune, as my wife my wife is now, were getting the tide button. Tie im so prime. Im so prime. Im mr. Prime. All the buttons. The other day, it was raining and i said, why do we have one darned umbrella. 12 umbrellas the next day. I never my little guy was a toy. Next thing i got 8,000 rolls of paper towels. And you can use every one of them. Never have to go out again. Its fantastic. We were going to do lilly on the call of the day which i still want to do. I want to ask the same question i asked these guys before you came here. Back to twitter, what if a deal doesnt happen . The stock has had an incredible run based on the reporting by faber and others. Look, i know that citi came out with citi has i love bob peck. He says 18. These things take to tend a life of their own. Look, we had always talked about twitter is worth more its worth more to mark than the market. If you can offer 360. Procter wants to know what do people think combine einstein artificial intelligence, people who follow so and so who like the vikings often buy gillette. Who doesnt want that info . Steph doesnt like the sales force thing. No. I dont. The fit, you mean. I i think conceptually it makes sense. The price they would have to pay, it would be transformational. Almost the same size. It would be a big, big deal. Its a huge deal. Synergistic it is at the very onset. This would probably be like a fiveyear Strategic Vision and thats fine, but it makes me nervous that theyre bidding up for linkedin. In there and now looking at twitter and let us see what he has to say. Money burring a whole in his pocket looking to spend it. Either hes looking to spend his money or core business is slowing and in that case you dont want to be there either. Least hear what he says. I die think einstein melded with this is interesting. Very expensive. Almost as if its a trophy property. Its a franchise, its a las vegas franchise in the nfl and people are willing to overpay for it because they dont create a lot of hem. Jim, you said yesterday if you get rid of some of the haters, if it was cure rated better twitter would be more attractive to the masses because instead of just being a bunch of haters it would be trolls . For that reason disney may not want it. So into its bambi. Like thumper, like shooting his mom. Hey, boom. Like hey, get bambis mom. You need to via human being at it and all bambi mom all the people that want bambis mom where she ended up arent allowed on twitter. Lets say you got in around 15 or even at 18, havent you been given a gift . Havent you been gi