Time since 2012. Maybe stocks are slowing because of the hunt for yield, the tenyear treasury note below 2. 6 . Whats that sound . It is realtors dancing as Mortgage Rates are likely to fall back again. Europe as you can see with the exception of what looks to be switzerland or lichtenstein is down. Our road map begins with apple and one very large acquisition. Talks to buy beats headphones, dont forget the streaming service for 3. 2 billion and create the first hiphop billionaire, we will address some skepticism from the street. And getting divorced before they got married. Publicist and omnicon calling off their merger. Ugly breakup in the ad industry. Somebody call john ham. Ralph lauren and the gap out with results. Ralph lauren beat, warning about shrinking margins. Ralph waging its Global Expansion at the begin of margins. Were calling it straight out of cupertino. Apple in talks to buy beats, the streaming Music Service founded by producer dr. Dre and jimmy i owe veen. Surprise tag said to be about 3. 2 billion. Apples biggest deal yet. Beats launching a Music Service that could increase apples presence in that area. Jim cramer rocking the beats headphones. I own the portable boom box blue tooth which i found crushes bows, sound quality great. Did they overpay . Is it a done deal . No. Its not a done deal because they have so much money. Its a rounding error. They need to be cool. One of the problems i think that apple has its not cool. It used to be. You always expected that. Look, these guys are the definition of. Now the fact that i have them, is a bad sign because like theres obviously my age group, you dont want to see my demo with these. This can be defensive because they need to be in cars, this is a way to get in, augment car play against harman and they need to be offensive because we know that itunes business is actually on the decline. Not a slower growth. But actual decline. You need something. I would have if i were and im not tim kooshg, i would have bought pandora for 6 billion and harman for 10 billion, 16 billion coloss sass to own streaming music and 250 million cars. Maybe im just a big thinker and put my headphones on and go home. I want to talk about lab lala, not carmelos wife, i was a member of, unloaded my music to in 2009, the first cloud based music platform. Apple bought them in december of 2009 for i think 400 million. Promptly shut them down. Launched icloud. You mentioned pandora. Why shouldnt apple still go after pandora, also spotify because you have google play which is expanding, amazons discussion about streaming, buy pandora, buy spotify, become the behemoth, coloss sass of the streaming world. Thats why this deal is difficult to size up because there were other people they could buy. We dont know if its a done deal. Second, we dont know the real price. Its true that they do have revenues. Its not like theyre buying some either company. Weve seen that going on. I want my company to be in the infotainment business and own the deck inside a car. Thats what harmans done so well. Its one of the reasons i like harman. Harman will be down here. I say if harman really gets slugged, it will down because decrease the valuation of harman. People will say these guys are in chrysler and fiat. Now by the way if you go to the chrysler if you go to the home page you will see that you can also get harman. Many people should realize harman is the big Speaker Company for all the major cars, particularly the japanese and germans. For 7 billion, 7 billion company, they are in every car. Even car play, apples product laid on top of harman. Interestingly enough, htc, sprint and harman announced a deal a couple weeks ago which made it so your cell phone has harman style sound. Is this not an appl apple Itunes Iphone defense against android, sprint, harman. Theres the whole thing. All right al pacino. Im going to counter this, be the private School Head Master and counter your beautiful speech. Volvo is getting car play. I dont know if that yeah. Not going to help. Dont come to me with some frayto rap. Poor hc, can they do anything right . The founder investor in beats. 50 . If they would have held they sold. If they would have held on they would have made over a billion in profits. Thats another rounding error for htc. Poor htc here. When you look at sort of this deal and i heard joe kernen talk about a billion in revenues, this is three times sales. Three times cool. Three times cool. Trading three times revenue, apple stock, apple shares. If people say you overpaid for beats, arent they also in some ways suggesting apples own stock is overvalued because the multiple to revenues is the same . Its really im not saying that. Its hard to come up with a theory about apple being overvalued after that previous quarter. That previous quarter was very good. They introduced new product, get nice leverage. The new new chief marketing officer who can combine with coolness. Cool does matter. Okay. And look, who am i to declare whats cool and not. Im like a guy probably like history. I do know that this is what a lot of young people listen to. You know it yourself. You bought the box. I used to think bose was cooler. I like these more. I like my harman headphones more. The fact that youre rocking the headphones and i have the portable speaker does mean they have a image identity crisis. Speaking of the deal. It may not be done. Somebody seems to think it is done. This video with Tyrese Gibson and dr. Dre posted to facebook last night, watch this. The forbes list just changed. Hey, it came out like two weeks ago. They need to update the forbes list. It just changed. In a big way. Understand that. Oh, my. The first billionaire in hiphop right here from the [ bleep ] west coast. Believe me. Oh. Shout out to the lbc. Dr. Dre saying whos going to argue with that . Hes a billionaire. One of the founding investors in the guy its named after thinks the deal is done. You know, im sure theres a board of directors, tim cook, it will be interesting to see. Maybe they like that video. You know who also doesnt seem to be in keeping with the apple this is a brand new apple. According to reports, dr. Dre was spotted on the apple campus last month. May have been in the works. Who else will get very rich off this deal, another entertainer, we interviewed him, will. I. Am, he has a big stake. 50 is not in this one . Pure entrepreneurship. Built a company, invested a company, selling it getting rich. God bless america. If youre apple i would like to see why not spend 7 billion and get pandora. Upped it by a billion. Pretty excited. Harman is what you once. You want car play is not dazzling people but the market that you really want is the car market. And harman is an inexpensive stock. Move from dre to charles dickens. A tale of two retailers. Ralph lauren reporting fiscal Fourth Quarter earnings of 1. 68 topping wall street estimates. Warned its operating margin would decline as it wants to expand its stores. The gap sees Current Quarter profits above street forecasts as comp sales rose 9 in april. The gap is doing well, the gap up i wont say very well. Outperforming ralph lauren. Ralph lauren down 13 . 9 comp sales. Pretty good for the gap. Gap is good and old navy leading it. They were helped by late easter. Youll see ralph lauren down badly because they guided, remember the forecast means more than the number, they guided down 300, 350 basis points for margins and thats not what you want to hear. Roger fairer, vice chairman is retiring. A lot of people feel hes done a fantastic job. Ralph laurens stock has lagged the group. I dont know how much i want to look at ralph lauren and add toomey and decide those trump gap. I do think its a mixed picture. And i think that ralph lauren is a Great Company but periodically disappointed in a forecast and then beaten the forecast. I want to throw out an audible, omaha, talk about a different gap, the gap between ralph lauren and michael kors, kors up 13 year to date, ralph lauren down 26 spread in the Price Performance over just 5 1 2 months. Kors has big china business. Coach has kind of fallen apart here. Kors and fossil very strong. Fossil very big in the wearables. People forget that. I think that kors, our friend Herb Greenberg had questions about their asian business. Kors has the people have lone pine, steve mandell, someone who taught me about retail in the 80s has a big position. The disparity is remarkable. It is here. In general is this a case of ralph lauren, do we care about margins when spending the money and compressing your margins to grow your business . Bad uses of capital and good uses of capital. Yes. I think whats happened is we simply we start worrying, whats the deal, inventory problems, why do they guide so big down when we know theyve got a good european business. Not seen bad numbers from vf corp. And no guide down like that. Very difficult to figure out the valuation here. Quickly, overall market, we referenced small caps at the top of the show. Surprisingly, the dow is the only major index that is up this week. 0. 2 , s p, nasdaq, nasdaq 100 and the russell, are you concerned that small caps could bring this down . Can a feather drag down a super tanker . You have to go back to march 8th 2000, to march 15th, and see a dramatic shift out of russell into s p 500 and dow stock names, the year, the fulcrum year everybody is worried about. No, its completely on target with what happened that year and dont forget, the s p can, indeed, separate. They are the russell was dominated by Companies Like fireeye which has become the posterchild, soon to be joined by rocket fuel and what happens is, you know what, the money comes out of those and goes elsewhere. Dow stocks, a lot of good dividends in there, Balance Sheets and companies actually making profits, buying back stock and raising dividends and thats what this market has become. All right. Good a block. Were going to move to the next episode. All right. Coming up after the break. Alibaba preparing to go public and a former board member of yahoo will offer his perspective on what could become the biggest tech ipo in history. Futures on a friday. 18 minutes before the opening bell. Come back a little off our lows indicating a slight down open there. Its europe. Can you hear me with those headphones . These are amazing. I can hear you and i have mozart. You and mozart not that nor can i wear those headphones for obvious reasons. More squawk on the street live from post nine at the nyse when we return. Know what the experts at your ford dealer think . They think about tires. And what theyve been through lately. Polar vortexes, road construction, and gaping potholes. So with all that behind you, you might want to make sure youre safe and in control. Ford technicians are ready to find the right tires for your vehicle. Get up to 120 in mailin rebates on four select tires when you use the Ford Service Credit card at the big tire event. See what the ford experts think about your tires. At your ford dealer. Anbe a name and not a number . Tor scottrade. Ron im never alone with scottrade. I can always call or stop by my local office. Theyre nearby and ready to help. So when i have questions, i can talk to someone who knows exactly how i trade. Because i dont trade like everybody. I trade like me. Thats why im with scottrade. Announcer scottrade proud to be ranked best overall client experience. No price hike for two years. Netflix announced it would be raising prices for new customers from 7. 99 to 8. 99 a month. This morning it emailed customers saying a guarantee is out their plan and price will not change. Read my lips. For two years. Matter . Netflix likes to underpromise and overdeliver. This is the thing you say these guys are good, Reed Hastings gets it, about doing whats right for shareholders. I wanted apple to buy netflix when it was at 70. So much for that. Netflix is caught up in the vortex al la tesla. Can you value them on subscriptions and subscription signups . That worked for a long time. Not working now. I have to tell you this will not have impact. Its just nice from a shareholders perspective wouldnt you want the price increase. Im going to quit facebook or quit netflix, nobody did. If they jacked the price by a buck that will help margins. I wanted prime to raise prices, amazon to raise prices for prime. They did that. What good has did it do . These stocks dont trade on expected earnings per share. They trade on growth. And this may be now people will say hold it, maybe they were going to drop maybe growth was going to drop so lets like change that. So and when netflix does these things where they go back on it, people will be confused. Netflix is a cult stock. People driving tesla, they like tesla. That really worked until the last week of february. It is not a strategy now, it is hope. I hate to use the term momo, its overdone. I dont mind. The momentum stocks, theyre sort of declination its the wrong word, isnt it . The draft was on last night. Its early this morning. Yeah. Eagles didnt draft until 11 40. Killing my night. Marcus smith. The momentum is no, thats why you watch rocket fuel today and say well wait a second, how did rocket fuel know to be able to sell a huge number of shares at a very high price, 61, 218, look at that. They got 5 million shares on january 30th. Well that was very smart. But the company does have 218 million cash position. They managed to raise a lot of cash. Doesnt work immediately theres big competition in that. Weve got a bunch of exchanges. Thats the kind of thing that happened in 2000. Is fireeye just fireeye or a bigger metaphor for this market in any way . It is the ultimate metaphor. I call it sharp stick in the eye because i like to have fun like the software as a disservice stocks. But yeah, i think rocket fuel, you have the 82 secondary that clearly didnt hold that was filed after the stock had burst up to 96. They didnt care that they sold at 82. Yet 90 million coming off lockup on may 22nd. If that stock gets hit again you really say, okay, that stock is year 2000. I surrender. Not all companies are year 2000. Many companies could show a profit, a la zillow if they wanted to tomorrow. The notion of growing without worrying about profit is now out the window. Now you got to worry about profit. A lot of these companies were using an amazon model, meaning hey, i dont need to do profit. The market has changed. Not that many theres not that much room for too many amazons probably. Turns out theres room for one amazon. Up next, it is jims mad dash as we count you down toward the opening bell on a friday. We are indicating with a slight drop at the open, not big, but a slight drop here. Were watching bond yields, gold, the dollar. Thats had a rough week by the way. More squawk on the street and the mad dash from the nyse straight ahead. Tall the building is, or how ornate the halls are. It doesnt matter if there are granite statues, or big mahogany desks. When working with an investment firm, whats really important is whether the people behind the desks actually stand behind what they say. Introducing the schwab accountability guarantee. If youre not happy with one of our participating Investment Advisory services, well refund your program fee from the previous quarter. Its no guarantee against loss and other fees and expenses may still apply. Chuck vo standing by your word, thats what matters the most. So ally bank has a that wont trap me in a rate. Thats correct. Cause im really nervous about getting trapped. Whys that . Uh, mark . Go get help i have my reasons. Look, you dont have to feel trapped with our raise your rate cd. If our rate on this cd goes up, yours can too. Oh that sounds nice. Dont feel trapped with the ally raise your rate cd. Ally bank. Your money needs an ally. Visit truecar. Comoney,com,t and never overpay. Yers remorse. A good deal or not. Okay, this is the price,sman comes and youre like. Ells you, all right. As the animation says, time for cramers mad dash. You may have noticed something unusual about this segment, jim this is my Johnny Football. Look, this is what he needs if hes going to star for the browns. Okay. All right. Heres reality. This is not my fault. Its soy milk didnt do the thing. Stratty sis. A stock deep momentum stock, reports a number today, reported earnings 8 cents but as we were talking off camera, that makes it an expensive stock and the market doesnt like expensive anymore. It likes inexpensive. Strat ta sis with its buddy ddd and foxle jet have captured the imagination of investors but not captured the earnings per share. Im going to slam an a lists on this one. You are . I am. Look at that 89 buck, the stock down 30 year to date. The average price target of the analysts on strat ta sis is 143. You either start cutting your price target or somebody somebody on the sell side has to start to come to a defense down 517. They tried, ddd, a big stand made on it. Happened to be a former mountaineer and climber of the all adirondack 46ers, i see a pattern that is k2. You dont need to be a technician to understand that pattern as well. Heres what i want to focus on for strat ta sis. This is a company that a lot of people go to the videos and say holy cow. This is the coolest thing ever. You go to youtube and see like wow. The actual ones at home dont do a lot of things people say they do. Not yet. Strat ta sis is a good manufacturer, just overvalued. Thats part of the problem with this market. Theres nothing wrong with strat ta sis. Its a Great Company. The stock got inflated. The company is a good company. Thats what were seeing over in this russell 2000 world. Really good companies. Plastics my son, plastics. Exactly. If you go back to mrs. Robinson f that was filmed today, he might say 3d printing, i think its the most interesting and disruptive industry but the stock 100 times sale. You will not get a fight from me. It reminds me of north american rockwell in 1964. They had game two. So did xerox. Take a look at the way the stocks trasdsed along with admiral. Those were the hot stocks. And texas instruments. 200 publicly traded Radio Companies in the 20s. Collins. Remember when rca peaked, 480 . Right before the crash. There you go. All right. What a buy. Thank you very much. Good stuff here. The opening bell a few minutes away on friday may 9th. Futures indicating a slightly down open. A lot more to do here at post nine for you bulls, bears, and the bell, coming up next. Female announcer when you see this truck, female announcer it means another neighbor is going to sleep better tonight because they went to sleep trains ticket to tempurpedic event.