Met this morning a 70 billion merger. Royal dutch shell buying bg group. Will this finally trigger energy . Tesla upgrades the model s with a starting price of 74,900. More features a larger battery has tesla shares moving higher in the premarket. It is earning season. Alcoa set to report tonight. Apple watch review season. Were going to preview both in just a minute. First up Royal Dutch Shell striking a me da deal to buy bg group. Shell says the combination would add 25 to its proven oil and gas reserves and make it the Worlds Largest producer of liquefied national gas. Heres what shells ceo told cnbc europe about the deal this morning. This is not a bat on the oil price. This deal works in a whole range of oil and gas prices. Of course we still believe in the longer run in a few years time we will see the longterm fundamentals we assert itself. We will see Higher Oil Prices than what we see at the moment. Of course, this deal will look not just very good it will look fantastic. Jim after kinder two of the biggest ever energy deals have been announced since last summer. Kinder his stock has done quite well. Its been a very big win. Royal dutch. Heres my feeling on this. Hes been on mad money. Sensible man. Clearly overpaid for this asset in a lot of trouble, bg. They were trying to meet deliverables for natural gas. Andrew gould is the chairman of the company and former ceo of slummer i think that shell oef paid. I dont want to say dramatically overpaid because i think they could have bought this thing for far less. No one else was going to come in. This is a liquefied natural gas. The only thing that i really like about the deal is that i dont know if bg could develop 500 barrels a day of brazilian properties. That makes sense. I think this stock, if you wanted to sell calls against it they did clear the dividend. I think thats important because a lot of people felt that royal dutch was going the cut the dividend. Instead they see the dividend out for a up kofl years. The stock is not being annihilated. 25 billion into 2020. The companies have to have this vision and they do have cash flow and theres a lot of theres absolutely a lot of overlap. World dutch can do a lot. In the sense of buying the stock it could work its way higher over the next seven years. Yeah. Got to take a long term. Ill take a 2022 perspective. The spread is quite narrow. Isnt that interesting . Given the price paid that seems to rule out the idea of the very small group of potential other buyers here. Exxon. Its not going to happen. Exxon plus 50 premium. I swear, if they had done 35 premium, maybe bg could have held out for a couple of months. Whats interesting is weve been waiting given the fallen oil prices for consolidation to take place but more from a distressed point of view that there would be deals to be had. None of nothing weve seen so far indicates the stress in the price the buyers are willing to pay. This is stress in the ball of natural gas. Companies are getting significant multiples. In this case its 8 dilutive to shell on an nav. Even with synergies im seeing some of the Research Notes here. They are said to be buying growth. Its about deporter oil. They had the highest when i talked to ben, i that have this incredibly high cast base. I mean this stuff, they were doing this stuff in canada that was presuming that oil was easily going to go to like 270. Honestly, those properties were they are insane what theyre trying to develop in canada. This is cheaper. Its natural gas. There is going to be a natural gas shortage in asia but no natural gas shortage in this country. Our natural gas will probably go under 2 because we have so much of it. Is it a good deal . I dont know. It would have been a good deal if they had bought it for 40 premium premium. Typically when you do that youve got to come with a decent price. Just to check off thing. Theyre talking about a close in early 2016. Quite some time. Youre going to need brazil antitrust, youre going to need china. Those are always can be question marks in these kind of things. 1. 2 billion break fee for those looking at spread here and thinking, can somebody come in over the top . Thats typical but its a big number. Given your analysis and others its hard to imagine anybody is going to pay more than what shell is willing to pay here. If someone does theyre a bigger sucker. Geez, this is a gigantic national gas buy. The late 90s where oil prices were canada as well. Is that a distress scenario or is there going to be go big mega caps . The bg was not they had problems in shipping the natural gas because they had assets in places that are funky. Egypt, they have problem. Waiting, if you look at waiting they did a deal with 35. Noble deal worked big. Every up with of these sears, yo that was chip. Chip johnson did an amazing job. All of those deals say, listen we dont have to sell. This stock market loves deals in the hole. No one has to sell that ive seen. No great assets great, either. Noble cutting 10 of the workforce. They do have the gigantic asset off the coast of israel thats been hard because of the labor problems. Thats ind ofkind of why i liked noble. Those deals are working. They can want for as much stock as they want in this country and the deals work. Why sell . If you can keep yourself alive by selling equity even if you dilute yourself you live to fight at day or the deals weve seen have been big premiums. Huge. By the way, it takes global m and a year to date to 938 billion. This dime last year 864 billion. Well ahead of the pace last year globally. Like i said shell is not going to go down a lot because they had high they were able to grow the production and they werent able to do that before. That was really really important. They raise their the amount of deliverable oil that they have. They raise it. Thats why the stock is not getting hammered. And the givedividends being declared. I think a lot of companies they made acquisitions, stocks would go higher. This wasnt one of those. Right. Speaking of would be acquisitions maybe one day tesla shares ariseing in the premarket. Upgrade of model s vehicle. The new base called the 70d will feature all wheel drive, a larger battery pack of 70 kilowatt hours. Greater range of 240 miles, previously 208. Starting price, 74,900. Thats about 5,000 more than the previous base model. Stock is up about 4 earlier. The stock, a lot of people the shorts press their bet in this one and you can argue this does not produce any more earnings per share than before but there was when you talk to i talked to them and they said listen we had no range anxiety because ours goes 19 to 21 miles, electric back. This anything that answers range anxiety is going to send the stock up whether it should or not. It will send the stock up. Stock has been up a little bit lately. Up yesterday, too. Yes. Well below the highs. The fact is they and i dont like the stock here. I like the car. They did announce real numbers on friday and people even though the numbers were good the fact is theyre starting to look more and more like the car company and less and less like kind of a drama. Less drama, more car. Drama story. Meanwhile, heading into earning season in what some analysts are expecting to be the worst earning season since 2009 amid concerns the stronger dollar is going to weigh on profits, the season unofficially begins with alcoa reporting after the closing bell tonight. Family dollar reported a quarterly operating profit of 74 cents with comp sales weaker than expected up. 5. Retailer sees the merger with dollar tree closing by the end of next month. We look to usa today for zy geist for mood and their headline is let the earnings train wrecks begin. I cut that out to use. I was doing that too. This is interesting because it has the oils on the left. Every one of them can now be thought of as a takeover play. This is immediately takeover play. And then it has vertex i think theyre having a terrific quarter, some new drugs. Amazon does a great quarter. I think the company is right. Mattel, theres a lot of new stuff coming out thats good. First solar is going to do a terrific spinoff. Every one of these, i picked it up because i like them all. Im not kidding. Wow, thats my buy list. Terrific ipg could be taken over. Wind stream i dont like them but theyve got a good yield. They put together an excellent buy list i just didnt know they were worried. Youre not calling it loss season the way ast today is. No. Not earning season loss season. To, the train wreck. The train wreck. The only train wreck is fracked oil coming through your town. The only train wreck i know. There are not going to be a lot of losses. Maybe a lack of growth but to what extent has the market been allowing for that . None of the companies are going to have the shortfalls. Those are the ones with the gigantic exposure to europe. No i dont read that. Do you read the sports section . No. I read the New York Post sports section. But this is just the companies that are going to disappoint are the companies that are Tech Companies that have gigantic business in europe. I kept looking to see those. Its not going to be simmer x. That sounds like apple. Its one reason stock gen takes it to a hold today. Theyre going to make a splash i guess. We wouldnt talk about them for any other stock unless they mentioned, apple, right if . Ouch. It had to do with their balance sheet. It did. For quite some time. Stock gen. They came on and did an interview. It was like, wow they did an interview. I remember that. Remember that . Wow. Theyre speaking. So now theyre speaking about apple and i guess everyone has to short apple because of stock gen. Stick a sock gen. Im not sure were going to do this segment any longer after the break. Great. We will let you go on and on about the watch. They could be right. You might want to call the top in apple. Kind of like the stock here. Good buy back good dividend a bunch of new products. I dont know. People have seen that watch. Most people are theyve seen it. Yes. Yes. And theyre about to get a better look at it. Well talk about what stock gens argument was. And the reviews on the am watch today as they countdown to the devices release date. One more look at the premarket. Despite the miss yesterday on that leeday win streak still on track for a second straight winning week which hasnt happened in a couple of months. You heard cramer refer to the downgrade of apple over at socgen today to hold from buy. Currency headwinds are toed a versusry sales. They remain kerpd that apple will struggle to replicate the success of the launch when they upgrade the portfolio in september. Their point broadly is dont get hypnotized by all the apple watch drama. Its still about the phones. The share of high memory foebs are coming down. Share of 6 and 6 plus are coming down. Why would that happen . Samsung has a competitive phone. You can argue that the expectations for the watch have gotten well ahead of themselves if if dont sell a lot that weekend and people are going to come in and downgrade so theyre trying to get ahead of that. Again, this is why am i so skeptical about it . Its because analysts keep wanting to make calls on apple. They want to call tops and get you to trade it. My goal is to get people to not trade it. Why do i spoof this . The guy could be right for a couple of points. The worst thing hes been able to do is say sell apple and buy achle apple. No one has been able to do that well. Sell apple 59terrific, other than a hedge fund who is going to be able to do that . Right. Its a hedge fund call. Although some have seized on the analysis that they provide about obviously 6 pfrs of6 of sales overall is the iphone. If there seems to be significant sales of the 5 at what might be a lower average selling price at some point and that could hit, you noeksknow overall. Tomorrow if john ledger from tmobile said, listen im going to give you a watch if you go and buy our apple phone, they will sell. Yeah. Its an idea. John will weigh in on that. Its an idea but it would be expensive. They have unlimited firepower. So does sprint. Unlimited firepower . What does that mean . They dont have unlimited amounts of money. They can create money. Havent you seen what the fed will let you do . Sprint has created plenty of it. Have you seen the spreadsheet . Let me take you back to the watch Beverly Hills we get too far. The new york times, quote, it took three days three longdays often confusing and frustrating days for me to fall for the apple watch. But once i fell i fell hard. Its an extense of the iphone and like the smartphone it starts to change your habits over time. Smartwatchers are still unproven but apple has made a pretty strong case for them. Its not adoration. Thats good because you dont have all the apps written for it and you dont didnt realize europe you were going to use your iphone or tulhe things you use it but i do think youre going to want it. Youre going to want it because you like the apple eco system. If you like the eco system youre going to want the watch. Remember, a lot of people under the age of 25 dont wear watches. They might take this watch. Were going to find out. Obviously a lot of discussion about how it is an extension of the phone in that like the phone in 07 when it first came out there was a huge education process that needed to happen. People didnt know what swipe was and in this case theyre going to need to learn how to work this crown and thats going to take time. Younger people are far more versed at knowing how to use these devices. I have to be educated constantly by my kids about how to use the device and when i realize what i can use it for, then i find it more and more indispensable. Younger people will know how to use this watch and manipulate it quickly. Im still trying to figure out, daylight savings times are one of the worst days of my life because youve got to move this thing and pull this thing out. Sometimes it comes out. Are you ready for this to remind you to stand up every so often the way it does . Yes. Time to stand all. Yes. Actually i do it a little faster because i always want to feel like i dont like to be late to things. Like my father. This watch is the bright i dont know. You wear it. You wear it because its a bright light. I got it. What do you have . I would rather have an apple. I think its going to be a big fashion component. I remember when i bought my daughter her second her second ipod because the first one was pink and the second one was blue and it was a fashion accessory. That may just turn out to be a Fabulous Fashion accessory that also happens to tell time. Wow, that sounds like a watch. Extraordinary. You are a fossil. I dont wear a fossil. Youre a fossil. You wear a fossil . Youno. What do i wear . A lot more squawk on the street from post nine in a minute. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Hey, girl. Is it crazy that your soccer trophy is talking to you right now . It kinda is. Its as crazy as you not rolling over your old 401k. Cue the horns. Just harness the confidence it took you to win me and call Td Ameritrades rollover consultants. Theyll help with the hassle by guiding you through the whole process step by step. And theyll even call your old provider. Its easy. Even she could do it. Whatever, janet. For all the confidence you need Td Ameritrade. You got this. Well, sir. After some serious consideration id like to put in my 15year notice. Youre quitting . Technically retiring, sir. With a little help from my state farm agent i plan to retire in 15 years. Wow youre totally blindsiding me here. Whos gonna manage your accounts . This is a devastating blow i was not prepared for. Well, im gonna finish packing my things. 15 years will really sneak up on you. Jennifer with do your exit interview and adam made you a cake. Red velvet. Oh, thank you. I made this. Take charge of your retirement. Talk to a state farm agent today. Time for mad dash. Seven minutes before the opening bell. Thats a lifetime. Its hump day. Say again . Ump day. It is hump day. Mike mike mike. Why not. If i had my apple watch it would tell me, stand up. It would tell you what the mad dash is ahead of time. What is it . Were going to start with lions gate . Do you hunger for hunger games, if you do you might hunger for the 10 million shares the chairman filed last night after they lowered guidance. Thats a terrific piece coming at you. To a large extent controls lionsgate. He owns a lot of the stock. 10 million shares. Ebitda ebitda, david, its a head and shoulders pattern reverse, its an rht, reverse head and shoulders. Good deal of talk for the need of consolidation amongst the contact advisers like this one. We havent seen it. Why selling the 10 million shares . Remember they did that little deal with malone odd kind of an odd one off deal but nothing has come of it at this point. One of the things that i dont like about this era, ive got good things i like. Theres a lot of stock for sale. Guys are falling stock. Oil companies are filing. A lot of insider selling. Theres a lot of secondary selling after deals come public. Be careful is what im saying. Im adding an issue, be careful. What else have we got . David, riteaid. Riteaid. Remember jerrod and tom where he pharmacists at ride aid andteaid and i do love them. Ms. Gill yesterday from jpmorgan says that dont dont think that wall green might not buy them. Walgreens can buy them. They report tomorrow by the way. The numbers are a little difficult to understand. Buying this envision rx and all i can say is that riteaid is a heavily speculated stock. Dont be surprised at the end of the day if they dont move at all. While the numbers are good they have a lot of takeover ic you buy it for earnings turn and, not for takeover. To give you credit where its due youve been a buyer here for a long time. Much more on the turn around than the m and a opportunity. I happen to like the fine drugstore chain. I like the chains. Actual name is merlot. It is. Im a cab guy. Im a cab guy but merlot runs cvs. Merlot pulled out cigarettes. Its a vice no vice stock. I do think that by the way, walgreens when they report again, that will be coop fusing because of an acquisition. Theres a lot of confusion in the drugstore stocks but people like them. Cvs is the best by the way. You think cvs is the best . Amazing company. Walgreens, a lot of chatter. They would like to get back into pbms. I know. Gres larson sold it. That was greg larson. I think they stole catamaran u and a. Do you . I think they stole it. It was good. Do you use the Self Checkout in cvs . I hate it. Dont you hate it . I dont want to use the plastic bag. If you dont use the plastic bag the thing freaks out at you. I like the person come over . Whats the point of that . Talk to