we have a mixed bag right now. the roadmap starts off with the facebook fallout. shares hitting a new low after the first lock-up expired. who's telling how much more downside for the stock when the massive lock-ups come later this year. >> a new milestone for apple shares, closing at a new all-time high as jeffries raises its price target to a whopping $900 a share. we'll talk to the analyst behind that call. >> and the turnaround at the gap continues. the retailer boasting a beat on earnings and raising its guidance. gap shares trading higher premarket. a phenomenal performance for that stock over the last year. >> and then as we mentioned, there is europe shares hitting a 13-month high fueled by comments from europe's angela merkel that the country remains committed to the euro. we stick with facebook. one day after the stock failed to all-time lows, $19.69, was that intraday low before closing at $19.87 following the first lock-up expiration. mark zuckerberg, according to "the wall street journal," conceded it may be painful to watch his investors continue to retreat from facebook stocks. the value of shares have fallen from $19.1 billion to just over $10 billion. i think the smallest violin in the world right now is playing for mark zuckerberg. but investors who have been locked in the stock have really, really suffered at this point. >> they have. yesterday we talked about it and you made a lot of the fact that i said it was a broken stock. it's down 50% from its ipo price. we focus so much on those early days on nasdaq's problems, on whether it was morgan stanley that was responsible. but here we sit roughly three months out from the official public offering and it's facebook's problem at this point as they deal with this overhang of stock that's going to continue for some time. yesterday the sellers were more likely -- the unlocked shares were more likely to be sold because they were people who sold some of the stock in the ipo, they were the early investors but there's a lot more stock to come. >> i predict there will be a massive short squeeze on facebook. i think this stock could potentlly rocket towards the end of the year. this is why i would argue that, partly because the short interest is so large. coming into yesterday, it was roughly 80%. there's a massive short position. if you read shandy's article today in "the journal," it talks about zuckerberg talking to the staff. it's been a painful period but he's explicitly saying here, the press doesn't know the company's future plans. if they did, they would have the same faith in facebook's ability. >> that there's a message internally that's not being conveyed publicly to shareholders? >> correct. and there's speculation they're going to come through in the fall. >> that is a huge leap of faith that there's a message being conveyed internally at the company as to how they monetize the roadmap ahead that's not being conveyed to the outside world. why would they sit on that with their shares sitting at new lows day after day? isn't it their responsibility to shareholders out there suffering through this decline to actually let us know what is going on there and what their plans are? >> they would argue they're playing a long-term game and there are further lock-ups to come. at what point do you get worried about the share price? and let's be clear about this, this enables facebook friends to be able to see what other people are buying, share their purchases and their charitable donations. it would be social commerce, a new wave of social commerce. >> can you press the button and say, i want a higher stock price? >> maybe the technology isn't quite ready. maybe they're waiting to roll it out -- >> i appreciate the side of the argument that you're bringing to the table. but for shareholders who are now sitting at close to all-time lows on this stock -- yesterday was a baby lock-up expiration. the big one comes in november. that's going to be 1.3 billion shares. >> it will go down sharply. i think the final point here, you follow these valuations. at this point at least the analyst who followed the company, this is still not an inexpensive stock. >> no, even with the decline. huge decline in the shares. >> let me make one more point. what also comes out of this article is they are concerned internally -- and i paraphrase here, about staff retention. they're worried that people -- >> they should be. >> at that point, he may have to profit maximize which he said he wouldn't do in order to retain his staff and keep the party going. this may be a change in sentiment within facebook. >> if that's what it takes, then that's what it takes. >> just saying. >> shares of apple rising in the premarket one day after hitting a record-closing high of $636.34. the stock less than $8 away from its all-time intraday high. jeffries raising its price target on apple from $800 to $900 a share. the firm saying its channel checks indicate apple's ipad mini has gone now into production. the jeffries analyst will join us to discuss his call on apple later in the program. this is an important stock for the market. >> in terms of percentage, it's 20% of the nasdaq. >> in terms of the gains we've had over the past year -- >> this was a quiet move to an all-time high. not intraday. a quiet move to an all-time high here. in the past, we followed every tick of this stock. coming out of not a great quarter, and in the midst of a quarter that will not be a great quarter given people continuing to hold back before the iphone 5 comes. >> there is a pressure out there amongst mutual fund managers, money managers, et cetera, to own this stock going into this product launch. the traditional pattern, historic pattern has been running up into the product launch, selling off after the product launch. and we're bookended by what will be a seasonally strong quarter with the fourth quarter. let's get a shareholder's take on the apple situation. michael senseatera owns about 375,000 shares of apple. michael, great to have you with us. >> thanks, guys. >> how important is apple tv to your bullish outlook for apple? >> we look at apple tv like a long-term call option on the company. it's more important for us in the short term what iphone and ipad units do. apple has done a fantastic job of disintermediating and making it larger and larger. if they can partner with cable providers or media content guys much in the same way they did with the record labels, we think it can help the company longer term. but short term, we're more focused on ipads, iphones and their continue to take market share there. >> what would be a more richly valued option? >> if you think about it thematically, we like to think apple's done a good job of getting into these channels much like they did in the record industry saying they want to provide a new way to do old things. i've never met anybody who likes their set-top boxes and the interface therein. at ridgeworth management, we look for those companies who can really find ways that disrupt their markets and get pricing. so apple probably -- they've always had the apple tv business. it's been a very small piece of their business at $99 for the apple tv. will they do a television, a set-top box is less important as will they be able to get the proper contracts with cable providers or with media companies directly such that they can allow and provide content to their user base. >> michael, one of the reasons to buy apple is because you believe that it's an exceptionally well-run company and it can deal with the fact that it's reaching the scale that it is and whether it can contend with the large numbers. in that requirement, how concerned are you that within the last 24 hours we've actually had an apology from apple over what it appears to be doing in some parts of its retail empire? the british guy that they recruited apparently cutting staff hours in certain markets and a reversal now on that. is that significant for you as a shareholder or more or less white noise compared to the product development? >> that's the definition of white noise to us. at the ridgeworth large cap growth fund, we're looking for key metric on every company we own. key metrics becomes the reasons why these stocks can outperform their peers and outperform the market as a whole. a real footprint of any type of company is going to have fits and starts, periods where you're growing, shrinking, changing, moving staff around. apple's square footage of retail has been some of the most profitable ever. they can make changes. we give them latitude to do that. we want to focus on the things we think drives the stock. for us, that's units of a lot of these major product lines. >> don't you almost have to own the stock if you're a growth fund like yours and you're going to compare yourself to various indexes and/or to your peers? doesn't it become an automatic that you have to own apple. >> i would challenge people to make the bear case beyond the market cap argument. but in the russell 1000 growth index that we bench ourselves to, it's 8% of the index. to your point, you have to own 8% of your fund if you just want to be market weight the index. >> michael, are you 8% of your portfolio in apple or are you more? >> we're more than that. we're about 175 basis points active. >> michael, great to speak with you. >> thanks, guys. >> shares of gap rising in the premarket. second-quarter profits up. better-than-expected 29%. strong sales in north america. they raise their full-year forecast. the gap has been performing quite well, executing well, inventories have been managed far better. it's been a turnaround that has been reflected already in the stock price. >> and the stock valuation. if you look at the p/e and the forward p/e, it's trading at a higher multiple than macy's is. you see the turnaround happening, great metrics such as gross margins improving, inventories going down, big same-store sales increases across its businesses and you wonder how much of it is already reflected in the premium valuations. >> school traffic is down. that's one concern. apart from that it is a stunning reversal listed in terms of the personnel changes they've come through with, the partnerships they've done within fashions. and also i guess they write the color theme. who knew that color -- i was so flabbergasted -- >> colored denim. a huge trend. >> it turned into big bucks. >> color is very important. let's get a little bit more on the gap right now. let's bring in two analysts that have different opinions on the stock. evelyn cupperman and joining us, richard jaffray. what gives you pause here? melissa mentions the valuation being somewhat rich. is that perhaps part of why you only have this thing rated a market perform? >> right. gap is up 85% this year. that's one of the best-performing retail stocks. that's better than the past decade that we have seen gap stocks. to say that expectations are high is an understatement. the street estimates are already ahead of the company's raised guidance. and the stock is trading at 17, 18 times that earnings guidance the company put out. that's significantly ahead of the -- what the stock has averaged over the past five to ten years. i think a lot of the good news is priced in at this point. >> richard, to that point, your response? it has been a heck of a run. they do seem to be executing far better. but is the best behind in it terms of the performance? >> no. i think their execution while very good has not been great. they've left a lot on the table in terms of traffic. traffic is down year over year. they're still not attracting all their customers back into stores. there's still a lot of runway ahead. a business that's now an 11% operating business can expand to 14% or 15% closer to the historical range of the company. >> the ceo on the conference call mentioned that marketing investments have paid off online and social media have led to near immediate boost to product demand. is that where you see getting that incremental online business, increasing the store traffic? is the company on the right track to being well executed as opposed to leaving some stuff on the table? >> i think the future is going to be marketing in ways i can only imagine whether that includes tv, social marketing, traditional print advertising. i think there's the whole gamut out there that they're going to explore. old navy's been very successful on tv. i think that continues. >> pick up on what richard is saying about the ability to raise the margin. they're embarking on now cutting one-fifth of their stores in north america which to his point will push that margin higher? >> right. that's very true. the store base is much healthier today after years of closing stores. and it is true, they are actually entering higher margin businesses such as the e-commerce channel and some of the international franchise. i wouldn't disagree that there's margin opportunity. but, again, in retail, you have to prove yourself every season. so i think there's some good evidence that the product and the marketing initiatives might be working this time on the healthier store base. but the competitive environment is getting a lot tougher in the back half with jcpenney with some of their peers in the mall. i do worry we're going to have to see more in the back half. >> aren't they locking in effectively a very good team around them with the relationship they have with people like h & m? >> that's right. so those have worked out very well for them. and like i said, i think a lot of that is already priced into the stock. the other thing to look at is a couple of years ago, they put together six quarters of negative comps before things started going wrong again. so i think we're taking a little bit of a wait-and-see approach, especially at this valuation, to see that this is not just a two-quarter phenomena of good weather in the first quarter and some strong fashion trends in the spring. >> thanks to you both. appreciate it. coming up, after falling to all-time lows, when will shares of groupon bottom out? you want to hear one analyst's latest call on the stock and how low he thinks groupon can go. also ahead, the road to the white house meets the race to get fit. we'll talk with p90x founder, tony horton. paul ryan apparently has 6% to 8% body fat. very impressive. another look at futures as we head to the final trading session of the week. looking at a mixed bag. more "squawk on the street" straight ahead. ♪ [ male announcer ] aggressive styling. a more fuel-efficient turbocharged engine. and a completely redesigned interior. the 2012 c-class with over 2,000 refinements. it's amazing...inside and out. ♪ join mercedes-benz usa on facebook for the best summer sweepstakes. ♪ there's now evidence of facebook's ceo mark zuckerberg is taking notice of his company's sinking stock price. "the wall street journal" reporting that zuckerberg told employees in a companywide meeting earlier this month that it may be painful to watch as investors continue to retreat from the stock. the companywide meeting, part of a new effort to boost employee morale. that brings us to this morning's "squawk on the tweet" question. what should mark zuckerberg do to boost employee morale at facebook? tweet us. we've got your responses throughout the morning. i'm sure plenty of responses will say things like, increase the stock price. >> or employ marissa mayer. coming up, sunday marks eight years since google became public. what an incredible ride it's been for investors in google's stock. we're going to talk about that with the author of "the google story." taking a look at futures as we head into the open this friday. an important bounce potentially. it could take us to year highs. stay with us. and more "squawk on the street" from the nyse straight ahead. 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