Closing Bell - Closing Bell Overtime 1/25/23

Episode Date: January 25, 2023

A fast-paced look at the after-hours moves and late-breaking news live from the New York Stock Exchange. Closing Bell Overtime drills down into stocks and sectors, interviews some of the world’s most influential investors and gets you ready for the next day’s action.

All right, Sarah, thank you very much, and welcome everybody to Overtime. I'm Scott Wapney. You just heard the bells. We are just getting started from Post 9 here at the New York Stock Exchange, and boy, do we have a big earnings hour ahead. Tesla, IBM, ServiceNow, Las Vegas Sands, and other big names hitting the tape any moment now. Our reporters, of course, standing by with all you need to know there, and we're going to show you the stock moves that follow, as we always do. Got some great guests coming up to Eric Jackson on the stock he just bought again and star venture capitalist Rick Heitzman on whether the worst is over for high multiple tech. Boston Celtics owner and investor Wick Grosbeck is with us today on his league

leading basketball team and the top investment investments he is making these days. We begin, though, with our talk of the tape, a nice fight back for stocks after Microsoft's weaker guidance had the major averages reeling for much of the day. So what now with those other critical earnings reports looming? Let's ask our panel today. Josh Brown, he is the co-founder and CEO of Ritholtz Wealth Management. Stephanie Link, the chief investment strategist for Hightower Advisors. And Dan Ives, the Wedbush analyst who covers Tesla. Josh and Stephanie, of course, our CNBC contributors. It's great to have everybody with

us. And we have a really big hour ahead. Josh, you know, size it all up for us and also take into consideration this fight back, as I say, we had today in the market itself. Yeah, that was really an interesting afternoon session. And one of the people internally was just basically saying, sometimes it's as simple as stocks don't want to go down. People should keep in mind where we are seasonally. There's a lot of demand, typically, last year being an outlier. There's a lot of demand for stocks, generally speaking, in the month of January. And we've certainly seen that

in prior years. So I wouldn't be surprised to see a month like this normally. Stephanie Link, how about you? Are you impressed by this session today? I mean, Microsoft still finished negative, not all that much. Market was able to fight its way back. And now we've got some big earnings looming, including IBM, which you're into. So it all matters now. Yeah, well, fingers are crossed on IBM. But look, I think today definitely was encouraging action, not only for the market overall, but really tech, because it really got slammed this morning. And I thought it was particularly interesting that the semis, many of the semi-cap equipment companies as well, did pretty well on the day. So basically, I kind of attributed to,

so far, earnings are okay. They're not the disaster that people are expecting. 19% of the companies, the S&P 500 reporting, 70% are beating, 27% are missing. The rest are in line. That's pretty decent, right? So for every Microsoft, Texas Instrument, and Verizon yesterday that you have, you also have very good numbers out of D.R. Horton and talking about housing, which is really sort of interesting, just given the multiplier effect. You had Schlumberger last week, which was really outstanding. Even Boeing, the number of the headline, terrible. But the underlying metrics were very good. Free cash flow. Same ditto for GE. So I think it's simply look, we got overly negative on earnings and the earnings story is OK.

Yeah, for now. And we've got a lot in front of us today, including Tesla. Mr. Ives, which you call today, quote, one of the most important moments in the history of Tesla and for Musk himself. Why? I think it's because where we are in terms of Tesla as a company, just had the price cuts in terms of Model 3Y. What do margins ultimately look like? We've clearly seen a massive Twitter overhang on Tesla. And really, this is Musk showing that 2023 is going to be an innovation year. And what do deliveries look like? It's a fork in the road.

Tesla right now is in a massive position of strength. But 2023, after a Cinderella ride, finally seeing some turbulence. I got my eyes tuned right on the fact set, waiting for these numbers to hit. And I know all of you want to know exactly what is going to happen the moment it happens. And I told you, our reporters standing by are going to jump on, fill the bow as soon as that hits and we see the stock move. Higher interest rates, Dan, you got competition. All of those are real legitimate issues, especially more lately, right? No doubt. But if you look at China and you look at what

they've done, the price cuts so far, and that's been a home run coming out of the gates, that's going to be an important data point. I mean, Phil hit on it a bit, too, in terms of can they maintain sort of margins in a range the street wants to see called 23, 24 percent going into 2023. You used two numbers just now that are below the street, right? Phil used 26 percent. That's what the estimate is. Isn't, you know, 23, 24 percent going to be deemed disappointing? It's really focused. Phil talked about this quarter. I'm talking about guidance for 23. What does margins look like given the price cuts? That's the key. Look, I think it's a seminal earnings for Musk and Tesla. But in my opinion, they further flex

their muscles on deliveries I view it as what's going to be a positive quarter. What do you make of the way that the stock has come back? It's not that long ago we were talking about a $100 stock. And here it is as it's moving in real time here in overtime so it's now obviously risen now 145 that's all big move in a pretty short period of time no well because it was about the price cuts because now you said they're defending their turf delivery is gonna ram and also Musk a lot of the noise on Twitter's and start to you know ultimately go to the background and you feel like there's a pilot on the plane again and the streets likeded. And my view is the most transformational company along with Apple in the market. Josh, what's riding on this here? You know, these stock, this stock,

these types of stocks have rallied a lot. I wanted to, I wanted to ask Dan about, I think, I think it was, Dan, I think you were the one that said you think the whisper number for 23 is 1.8 million deliveries. And I think you also would like for them to bring down that sort of casual 50% CAGR guidance to something that's a little bit more reasonable. Can you talk a little bit about whether or not you think that's what's going to happen on tonight's call and what the stock market reaction will be more importantly if they do it yeah josh brings up a great point because you got ripped the band-aid off it's in the delitude i know what he did last night cut guidance in terms of deliveries 35 40 because that's a hittable number and potentially beatable as opposed to 2023 continue to see number cuts. If they do a 35, 40% delivery number in terms of guidance and sort of have margins in that 23, 24% auto X credits, this is

a stock that, in my opinion, is in the green tomorrow. Wow. Well, we're going to see. It's moving a little bit now, trying to figure out which way it wants to go. Steph, I know you're not involved in the name, but it's an important name. Just given the earnings reports that you already suggested were better than feared, I think the way that Microsoft reported and the impact it had on tech, which fought its way back throughout this very day. What are you looking for here? Well, I would simply say Microsoft is more important than Tesla because Microsoft is 5.3 percent of the S&P 500 in terms of weighting, right? Tesla is less than 50 basis points. So it's not a very big weighting. So that's number one. Number two, I'm not sure all these high multiple or no multiple stocks are going to do all that

well, but they're down so much and the expectations are so low. And to Dan's point, it's all about gross margins because they did lower prices pretty dramatically. Did that spur demand or not? It's as simple as that. So I think, you know, I'm not involved in the name. I haven't been ever, actually. But I do think that the valuation is kind of a challenge. The competition is definitely a challenge and it's heating up in a pretty big way. So I really do think that they have to kind of like knock it out of the park. I am much more interested to hear what other some other companies after the close tonight have to say, namely Lamb Research, Las Vegas Sands and and of course, IBM. I think those are companies where we're going to really listen and hear about trends on the front line about the economy and about the macro as well.

All right. Let me get to Phil LeBeau. Sorry, Steph, but I want to get to Phil right now, who's got these Tesla numbers for us, Phil. Hey, Scott, we've got a beat on the top and the bottom line from Tesla, but it's the numbers within the numbers. And we're going to talk about that with automotive gross margins in just a little bit. First of all, on the top and the bottom line, they earn $1.19 a share, better than the expectation of $1.13. Revenue coming in at $24.32 billion. The street was expecting $24.15 billion. So there's your beat on the top and the bottom line. But the automotive gross margins, excluding zero emission vehicle credits, was expected to come in at 26.2 percent, came in at 24.3 percent. So considerably lower

than many people were expecting, which raises the question, how much of this is because of the price cuts cutting into margins in China? Is there another issue that potentially is weighing on the gross margins? But again, coming in at 24.3 percent, which is lower than what most were expecting. Most had it at 26.2, 26.3 percent. Remember, it was 26.8 percent in the third quarter and over 29 percent in the fourth quarter of last year. So that shows you the margin compression that is taking place there. Scott, we'll send it back to you. Yeah, Phil, and I know I'll hear from you again shortly. Just pop on whenever you got

something that our viewers need to know about. Dan Ives, you saw the GM number gross margins twenty four point three. I suppose you're going to tell me better than feared. No, what I tell you, I think Phil hits on it. I mean, they're ultimately needing to sacrifice margins for volume. And now the question is, with a price war happening in China, what does the trajectory look like in 2023? Street's really going to be focused on what does that margin level look like in 2023 and volumes? Can you get to a 1.8 and a 22, 23% number? But you said the 23% coming in today

was the quote unquote line in the sand for you. They exceeded that even though they're, you know, a little bit below what the street was expecting in terms of 26 and change. Look now, and now it's really all about going forward. You know, can they maintain margins? Because if you look at the price cuts really start in the month of January, and that's what I view as a moment of truth for Tesla, in terms of can they ramp deliveries, which we believe they can, and the scale, and maintain those margins,

which are so well above the industry. And what about a buyback? You know, there's been some whispers around that maybe Musk is gonna do a buyback. Do you think there's any credibility to that? Yeah, well, I think there is. I mean, the company's in a phenomenal cash situation. You look what's happened to the stock,

and there is more pressure on that in terms of doing a buyback. They're in that position. That would probably be one of the key points in the conference call if Musk and Zach address it. I think the last time he was asked about that issue, he's like, well, you know, I'm paraphrasing, of course. We consider it, but is he really going to do a buyback in the face of what he has already suggested is a worsening economic picture?

That throws a little bit of cold water on that notion. If he thinks that the economy is going to further fall out of bed, why would he do it now? It's a great point. And that's right for Musk on this call. The reason I think it's so important. It's a great point. And that's right for Musk on this call. The reason I think it's so important, it's a tight wire act. How are you so positive on deliveries, which I believe we could be seeing 35, 40 percent in a dark macro and also maintaining margins at the same point in terms of what you've executed for it? Phil, you got more for me, Scott?

They are keeping their projection in terms of deliveries and volume. Remember, they have said for some time, I think about two years now, that they expect volumes on an annual basis to grow by 50 percent over time. Doesn't mean that every single year will be over 50 percent, but over time they expect to grow deliveries by at least 50 percent. They are sticking with that guidance. They are not changing that. And that was a big focus for a lot of people, because remember, they only grew deliveries by, I think, 40 or 41 percent last year. And a lot of people said, look, given the issues, given the questions about whether or

not the market is softening, is it time for them to perhaps bring down that projection? They're not changing that. And by the way, they say that the Cybertruck will go into production as planned by the end of this year and that on Investor Day, which is in early March, that's when they're going to be talking about their next vehicle platform, which is getting a lot of attention because a lot of people are saying Model 3, Model Y, as successful as they are, when is the next leg of growth coming? And that's likely what? Late 24, early 25. And that's if you have plans that you can put into place fairly quickly. All right, Phil, thank you for that. I'm going to ask you

point blank. Is the 50 percent number a believable number? Look, I think that would be very difficult to hit. And this is essentially my superhero, like putting on his red cape, thinking that they could hit that 50 percent, which is a double edged sword. It shows confidence. But ultimately, we believe it's probably going to be closer to 40 percent. I mean, you said you wanted to see a more realistic target of 30 to 40 percent. 30 to 40 percent is not 50 percent. Yeah. Right. Look, and it's a surprise that they stuck to that. Now, we got to see on the conference call if they sort of fine tune in terms of if deliveries could be you know we'll call lower in 2023 but no doubt at least coming out of the gates this is a confident Tesla a dark macro and

I think that's the important thing okay hold your thought for a second I'll come back to you in a moment IBM's out Frank Holland has those numbers for us Frank yeah there uh Scott uh shares IBM kind of fluctuating we're in the green now in the red down about a half a percent. The company had a beat on the top line. Profits were in line with estimates at 360 a share. Spoke to the CFO about some of these results. Software, the company gets about 40% of revenue. That beat estimates. He said there was actually surging demand going into December for Michigan critical software like Red Hat that saw revenues increased by 10%. Consulting, just about a third of revenue in line. Also said there was surging demand going into December. Very different story than what we heard from Microsoft. And speaking of Microsoft and the cloud, I asked the CFO

about competing with Microsoft after its OpenAI investment. He said, in part, we're looking at both organic investment innovation, but also inorganic plays that can extend our capabilities. I asked him directly, does that mean that they're looking at M&A? He said, absolutely. IBM also guiding for mid-single-digit revenue growth for the next fiscal year and constant currency. So that's not comparable. Now, shares of IBM up 0.5%, Scott. Back over to you.

Yep, Frank, here back from you, if necessary as well. Frank Holland with the latest on IBM. Steph, I go to you. This is one of the big ones that you were waiting for. A stock, by the way, that outperformed the market last year and outperformed almost all of tech. Yeah, really, it was a great year last year because they delivered finally. I think this is very solid. I think the guidance of mid-single digits is exactly in line with expectations. But there were some people, notably two downgrades this week alone, that talked about how that

actually might come down a bit. So mid-single digits, it's good. And by the way, the currency hit is going to go from a hit to a tail wind. So that's good for this year. But I look at the fundamentals, software up 8 percent, consulting up 9 percent, infrastructure up 7 percent. All three beat. And the software line certainly was very, as Frank mentioned, it was a very important piece because of what we got from Microsoft last night. So I think they're taking share. I think Red Hat is absolutely taking share. I think they're delivering, they're executing. The stock is very cheap with a good dividend yield. So if it is weak for whatever reason, I'm a buyer. Josh Brown, these two reports thus far do nothing to upset that better than feared narrative, right?

Yeah. So IBM, you know, it's important just because it's a bellwether. Statistically, it's not terribly important. I don't think there are really big knock-on effects for a lot of other major stocks more important than that. But in addition to them executing, and Stephanie is exactly right on this name, they have a lot of the characteristics that investors are looking for anyway. So all they have to do is not screw up. It's a 4.6% dividend yield. It's about a 15 forward multiple. And most importantly, it's a stable business.

You might not be excited about it, but if they're executing and they're delivering that mid to high single digits growth, that's really all that's being asked of them from the existing shareholder base. So for that reason, I think this is the type of name that continues to remain in favor. We'll show you service now as it comes out, too. We understand it's an earnings beat, revs in line. I bring it up just because there was so much anticipation around it after what Microsoft delivered, particularly with the guidance there. And not to mention the fact of what the CEO, Bill McDermott, had to say out in Davos, who was hardly as dour, I think it's fair to say, as some of the other CEOs in the space have been. Stock looks like it's moving down by better than 5 percent. We'll get to the bottom of that.

But how about this software, enterprise software narrative that's starting to develop after Microsoft, that this is not a space that you want to be playing in right now? Look, I mean, they'll rip the bandaid off. McDermott will probably do the same in terms of the call. Because what you're seeing in cloud, it's a de-sell environment, and it's going to be a game of thrones for market share. But I do believe in terms of the reaction that you saw with Microsoft, I think what you'll see throughout earnings season, it's what needs to happen for these stocks to go higher in terms of cut numbers that are hittable to beatable. You think these stocks are investable in the current moment? I mean, Kramer had a comment this morning on our air was basically like this growth is over, like avoid these stocks at all costs. He didn't say it quite like that, but that was the point he made.

Like, the growth is over. It's over. Yeah, and look, and I think if you look from a cloud perspective, we're still only 40% paying to trade on cloud. So clearly you're going to see a slowdown, but it's going to be a bifurcation. Clear winners and losers. I look at names like Microsoft, Palo Alto, and some others. I think those continue to be the names they own.

I want to get back to Tesla for a moment. We take a look at the stock, which is still trying to figure out which way it wants to go. Because when I brought up this idea, actually, you know what? I'm going to get back to Phil LeBeau real quick. I'll continue the thought on the other side. Phil? Scott, we don't want to get too wonky here, but we're looking at their investor letter, and this is clearly going to be one of the questions for Elon Musk.

What exactly do they expect in terms of production for this year? Now, I mentioned earlier that they maintain their guidance for 50 percent annual growth average over the long term. And as they have said many times, some years it'll be above 50 percent, some years below. But they also make a point in here of saying that while they expect to get to that rate of production over an extended period of time, for 2023, we expect to remain ahead of the long-term 50% compound annual growth rate with around 1.8 million cars for the year. 1.8 million. Now, whether or not they're splitting cars away from their SUVs, et cetera, that is not 50 percent growth from where they were last year, Scott. They were at 1.31 million, up to 1.8 million. Let's give them the benefit of the doubt.

Let's say they get there. That's under 40 percent growth for 2023. So that's clearly going to be one of the questions during the conference call. Are you expecting a slow, relatively speaking, slow year for 2023 and then an acceleration in deliveries, that's going to be front and center during the call, Scott. Yeah. All right. Great information, Phil. Thank you. Get the instant reaction, too. That's Phil LeBeau. Dan Ives still sitting with me. What do you think about this? We talked about it with Josh before. That's exactly what they needed to do. Give a number that ultimately now puts the bogey for the street in that sort of upper 30 percent, 40 percent range.

You don't have a repeat of Groundhog Day of 2022 where every quarter you're lowering numbers. I think just I almost call it a tactician like performance, at least initially on the press release. Because, I mean, you said one of the comments you made is the earnings were, you know, coming out. We were watching the stock move that and we had this 50 percent number that they were, you know, allegedly sticking to. Musk was, you know, the Superman thing with the red cape that those were your words. Isn't the street tired of that at this point? All of the stuff that's gone on in the last six months plus this the street doesn't want to she wants to deal with reality, I guess I'm trying to say at this point. No doubt. And I think that's why you put a one point eight million number out there.

They're done with the antics, done with missing numbers, a lot of the Twitter overhang. But I think this also just shows it's potentially a new Tesla in terms of the narrative and how they're going to conduct with the street. All right. Thank you for being here. Great to have you. This was all happening. Josh, thank you. Steph, thank you as well. Let's get to our Twitter question of the day. So we want to know, is the worst now priced in for big tech stocks? You can head to at CNBC Overtime to vote. We're going to share those results a little later in the hour. We're just getting started here in Overtime.

Up next, the star venture capitalist Rick Heitzman is here. He gives this instant reaction to tonight's key earnings. We'll get his take on the tech trade, obviously. We're live from the New York Stock Exchange. Overtime is back in just two minutes. All right, we're back in overtime. Shares of Tesla slightly higher after reporting results just moments ago. For more reaction to that quarter, let's bring in Rick Heitzman of First Mark Capital.

It's good to see you. Welcome back. Hey, good to see you. It's a good day to have you too, just given sort of what tech has done just to start the year. What's your initial reaction to what Tesla seems to have delivered here? I think you're seeing the consumer is still strong. I think you saw in Microsoft, the enterprise is a little bit weaker. People are giving tough guidance on the enterprise, but the consumer is continuing to do what the consumer does. And you're probably going to see it throughout travel and in some discretionary spend. Do you feel to this point now we have a lot of big tech earnings to come? Yes.

All right. Let's not make any jump to huge conclusions at this point. But can we say better than feared for the space? Or is it too early? It's too early. But you're starting to see some of the breadcrumbs. You're starting to see some of the travel guys, including the airlines, you know, positively predisposed. People confirming guidance. You've seen some on the travel side.

And obviously Tesla confirming guidance at a 50% CAGR shows that not only do they feel good about this year, but they feel good about through the recession. What about this move early year in tech? Is it believable? Is it a head fake? How would you view it? I still think we don't know yet. And I think a lot of people are waiting to see what does guidance mean? How are the big companies going to guide? And for now, it's a head fake. You know, the guidance we're giving from the board level is, hey, let's expect that things don't get any better. Let's assume there might be a bottom we're going to bounce around for most of the year. And let's assume that we're going to plan for the

best, plan for the worst, but hope for the best. I mean, any better, not getting any better may be a victory in this kind of market, as long as things don't get materially worse. I mean, you know, you look at what Microsoft had to say, and they make you believe that things could get materially worse. You listen to other companies, even in the tech space, and they make you believe that things could get materially worse. You listen to other companies, even in the tech space, and suggest, I don't know, maybe it's not as bad as Satya Nadella would lead you to believe things are. I think it's going to be a mixed bag. And what we've talked about over the last year plus, and since the market started to crack, it's not going to be a broad-based, all software is good or all enterprise is bad,

that individual companies will either beat or hit earnings in a much more jagged way than they had in the last couple of years. Enterprise, though, seems like a particularly tough area to be in right now, more so than many other areas of tech. I would completely agree. I think you're seeing with the layoffs, so there's less seats, there's going to be less software. And the CFOs that we're seeing are really scrubbing their P&Ls. And if you're cutting that level of heads, it means that you're going to go after all expenses pretty aggressively. We view Tesla in so many different prisms. It's, you know, in many respects, a poster stock right now for what were these much higher multiple tech names, the ARK type stocks that got absolutely destroyed last year, but now have rallied back. And you sort of take those

in a basket and then you put the mega caps in a basket. Do you think valuations have finished resetting in the ARK type names, the higher beta tech stocks that got smoked last year? I don't think so, because I think some of those broad-based names are not as good as those valuations suggest. And I think some of the highly speculative stocks that are part of that ARK portfolio are not going to do as well. And even Tesla, which I'm not sure is still being valued as a tech company compared to a car company,

if that whole argument has settled out among the buy side. What's your argument on that? I think they're a better margin car company, that they're a tech-enabled car company that should always trade at a premium multiple. Two car companies. Two car companies. GM's like a single-digit.

GM's like a single-digit multiple. And even if they trade, they're growing twice as fast, and they have probably twice the operating margin at scale. So they should trade a substantive premium to that, but they shouldn't trade on a revenue multiple. Wow. And some of those companies in the same sphere that have already come down like 70, 80, but not even in just the EV. I'm talking about the archetype names. I hate to keep referring to them that way, but that's how people identify them as. They've been down like 70-some-odd percent. There's more to go? I think in certain of the names, there is more to go. And I think certain of the names actually have hit the bottom and

might be coming back up because they have a stronger core business. See, if ARK was a shorthand for speculative, those speculative stocks, you're going to have to really look at their business model. Are they really a tech stock or are they an auto stock or are they some kind of other stock? And what's the long term margin structure? And in what's going to be a challenging year, are they going to hit their numbers? You said it better than me. Speculative is a much better way, I think, to refer to it at this point, because that's for the most part what they were. What about what you're doing from the VC and the private side? What are you telling founders now versus what you were telling them? I don't know. We've visited so many times over the last

six months. Take it three months ago. Is it a different story today? It's generally the same. It's, hey, cash is still going to be king. Husband your cash. Don't assume that the markets are opening regardless of what Tesla did yesterday really has no bearing if you're a small startup. So make sure your cash lasts. Make sure the things that people care about now, unit economics, profitability, margin structure, really matter. And make sure when the market reopens, you're going to be ready to be aggressive and be a winner because you've withstood the storm. You addressed what this, I don't know, sad new reality is. And for some of these tech names, I say sad because people are losing their jobs.

And a lot of them we've heard from most of the big techs along those lines. And now I see Lamb Research is cutting seven percent of its workforce. This news just out. We're talking, you know, thirteen hundred jobs, it looks like. So this beat sort of goes on as companies try and right size themselves for the environment we're in. Yeah, I think they're right-sizing themselves for their business. I think a lot of these companies got too big. And, you know, Google is still net up compared to employees from this time last year. So they're just giving back the employees they hired in the last half of last year when

they didn't adjust to the environment. So I think they're not adjusting to compared to where they were last year. They're adjusting to where their business models suggest they should be going. So it's not just mega cap tech that got bloated on the employee. Everybody, I would almost say any company who believed that money was easy to come by and they could always access the capital markets probably got a little fat and happy, and now everyone's getting fit. And it's mega cap names down to seed stage startups. Lastly, before I let you go, since you mentioned Google, the DOJ suit, do you care about it as an investor?

Is it material to an investor psyche? I think the only thing that really matters for is if they're also looking at the Activision transaction, and it just creates more smoke, and that might cause more tension as people are thinking about either in the U.S. or Europe, are they going to allow Microsoft's acquisition of Activision to go through? Otherwise, a lot of these big cap names are getting sued frequently. All right. Good stuff. Really great to have you here. Thank you very much. Again, that's Rick Heisman of FirstMark.

Again, up next, Boston Celtics co-owner Wick Grosbeck. He joins us live at Post 9. We're talking basketball, team valuation, some of his latest venture investments as well. That's after this quick break. OT right back. All right. Welcome back. I want to show you Chevron shares up near 3%. Why? Because that company has announced a large buyback as we started to hear of, you know, a stream of those of late. And this is yet another one that is Chevron. They're a 75 billion dollar buyback. From what I see,

that stock is up 3 percent. Let's get another look at Tesla as well. After reporting results, the company's earnings call kicks off in less than an hour. Our next guest recently sold out of that stock, but got back in on Monday. Joining us now on the news line is EMJ Capital's Eric Jackson. You couldn't stay away, huh? No, it was too good to pass up, Scott. I've said on your program before that I thought that this is going to be the best performing big cap tech stock this year. I still believe that. I thought that they would come through with the delivery numbers for this earnings. And that's what they did. So I had to get back in. I mean, I think you were looking for one point nine million on the delivery number. They actually seem to be suggesting one eight. That make you rethink any of this? I don't think so. I mean, I agree with Dan's

eyes from before when he said, you know, that was the bogey that I think most people were looking for. I think they're going to get to 1.9 and probably exceed it. At the end of the day, that's the number that I care about the most with Tesla. It's not gross margins because I think Elon Musk said this. Well, I think Elon Musk said this a few days ago on a Twitter space, is that in recessionary times, you want to get units out there in people's driveways. You want people to have the product because later they can upgrade to all kinds, you know, full self-driving and other software add-ons. But you need to have them with the product.

It's no different from Netflix announcing the good subscriber numbers last week. That's what got the street excited. They didn't care what plan that they were on. It's just getting the subs. I understand. I mean, but there's two different things, right? Good for sales is not necessarily good for stock, right? If you do have to take a hit in margins to get more product out, ultimately that factors in and filters in to those important numbers. Well, I think the folks that say that, you know, Tesla should be valued like a GM, I think they sort of fail to grasp it. I mean, this is a massive company now. It's not the Tesla of a few years ago. And that brings certain advantages of free cash flow and operating margins and so forth. And that is they just have a lot to work with. So they can take a hit on gross margins

this year if they can maintain their leadership. And I think that's what they are doing with the price cuts in China. And these are the right moves. These are the right moves. They'll be ahead when things turn around. I mean, the argument that, you know, Rick Heitzman was just making is, yeah, they deserve a premium to the car companies. And as I suggested, you know, General Motors has a multiple in the single digit. So even if you double that. Tesla, where its multiple is now, is still so substantially higher than even that. Is that justified? I think so. I disagree with Rick.

And, you know, if his argument is, hey, this is a shinier car company, I say that they are much more of a, you know, one step above that. They're a software platform. They have many more businesses that they can get into off the backs of what they've built with their cars and their charging networks and so forth. So there are many more levers they have to pull, and that does deserve a premium. All right, Eric, I appreciate the time very much. Busy day, and it's good to catch your thoughts here in overtime. That's Eric Jackson. Coming up, we're tracking some big stock moves in overtime.

We're going to run you through all the action coming up. Plus, Boston Celtics co-owner Wick Grosbeck. He is here at Post 9. We're talking basketball. He's got the number one team in the league right now. OT, right back. All right, we're back in overtime. Here's another look at some of tonight's big earnings movers.

Of course, Tesla's front and center as we await the company's call. It gets underway in less than an hour. That stock is hugging the flatline, really trying to wait and see what Elon Musk, if in fact he is leading that call, has to say on it. We'll bring you the headlines a little bit later, of course. Switching gears now, the best record in the NBA right now belongs to the Boston Celtics. This is after making the NBA finals during last year's season. Co-owner Whit Grosbeck joins us now. He is also co-founder of tequila brand Sincoro Tequila, a successful venture capitalist.

What some on our production team have called you the most interesting man in the world. For all that you have going on. And you have a lot going on. We'll get to most of it. But the Celtics, best record in the league right now. It's a great team. I've had 20 rosters there. I've been in for 20 years, which is the luckiest thing that could ever happen to me or to anybody being part of it. This roster might be my favorite. They're so connected. They're young, but they're talented and they're playing like one unit. It's unbelievable. Dialed in and resilient, too. I mean, in the face of organizational strife, I mean, you have a changed coach right before the season starts, the last second move, and somehow you guys just don't miss a beat. Well, Scott, there was a

lot behind the scenes there and a lot of thought and people trying to make things better. And really, the players stepped up and said, we got this. Our new coach, Joe Mazzulla, interim coach, said, I can handle this. Brad Stevens recommended him. I knew Joe. And we went that direction. And at this point, I couldn't be more proud of everybody stepping up. It's an unfortunate situation. We're trying to make the best of it. It's poetic that you're here in many respects at the New York Stock Exchange because you paid $200 million 20 years ago to take the Celtics private off the New York Stock Exchange. They were traded on the NYSE. It was $200 of equity. The total price was bigger, thank goodness, for Sock Jan, which lent me $180 million right on the spot, the first meeting, way back when. They must have a high FICO score or something. I don't know. Well, it was secured by the Celtics.

But at the time, it was thought to be an overpayment. It probably was. We got bailed out. But we never did it for money. We did it for love and passion. And that's true now 20 years later. I can't imagine what the team must be worth. It is one of the trophy franchises in all the sports. Phoenix just sold for $4 billion. It doesn't

matter if you don't ever sell it, but yeah, it has gone great that way. But we are paid in enjoyment and we're, and we love it. And we're in the thousand share. I mean, really it's the truth, but these things have gotten more valuable, more than I ever expected. Why? What is driving it at this point? Because it's exponential growth and every team that comes up for sale makes your mouth fall to the floor. I think it's that it's a chance to be on a global stage and compete. And you win or you lose. We lost last night to the Heat. They beat us. We lost to the Warriors in June.

So, you know, there are losses here. But the winning is winning off the court in the community. You can do so much with charity and you can win basketball games. You can have a ring. I've got a trophy in my living room. It is a thrill. I didn't even realize that, you know, just recently the NBA voted to allow sovereign wealth funds as investors. That has to have some impact on driving valuations. I'm part of that committee that reviewed that and voted for that. And I feel that if you're going to have valuations like this, it's not just the lead owner who has to, but you need a whole core. I've got 20 great partners that I've been with for 20 years. And those were a group. And to put that group together nowadays, instead of having it be 200 of equity,

be so much more, having additional investors. I mean, we're sort of a global, we're an investment class that has emerged and become, I think, more respected or valued by investors as almost a counter-cyclical, just a long-term place. So anyway, we're welcoming in sovereign wealth. You can't obviously have a controlling interest. It's no more than 20%. Do you, and some would suggest, well, with that great stream of capital comes geopolitical risk. There's risk all over the world. How do you think about that? Well, we like to see basketball bringing people together and unifying. We had a team just play in Paris. We had a pre-season just, we had a team just play in Paris.

We had a preseason game in the Middle East. We play in Asia. So the NBA is global and we actually think it's a force for, hopefully, we're trying to use it, and it has done this, to bring people together. And so maybe we can counteract some of the strife. I feel like one of the, and we're going to switch gears for a moment. I mean, I feel like one of the fastest, and we're going to switch gears for a moment. I mean, I feel like one of the fastest growing spaces in your other business, Sincoro Tequila, seems like everybody's got a high-end tequila.

Now, where did this come from? Not everybody has Sincoro, though. How did this happen? It's a partnership with, Michael Jordan is involved. There was a dinner with Michael Jordan, Jeannie Buss of the Lakers, Wes Edens of the Bucks, and I came with my then-fiancé, Emilia Fazzolari. By the end of that night, we were drinking high-end tequila that Michael loved drinking. And then there was another night. And by the end of that night, we said, let's do our own because we would actually

like to taste a little better than this. And we did it. Your wife is CEO, right? At home, too, by the way. But she's the CEO, but we're all in it together. We're all part of it. And it's Michael's newest team, really, in a way. We're teammates, and it's an amazing experience to have those partners. So if that wasn't enough, you're a co-founder and partner of Causeway, right? You describe it as a venture firm, investment firm? Growth capital, growth venture.

Since about 2014, we've made some investments in companies like SeatGeek and Quint Events, to name two, that are top of mind for a lot of people these days with ticketing and with events like Formula One and the British Open and the Kentucky Derby. How do you think about where valuations are in the kind of environment we're in? Exit strategies for you? Both of those companies are probably going to look to exit on a positive basis this year. So they're in the mix for doing that, depending on the markets. Having said that, we saw things decline generally in the industry and valuations have gone down over the last 18 to 36 months. But these are live sports events and that's roaring back. And so these two companies

to name two are we're feeling very optimistic and hopeful. I'm sorry. How's the world look to you today? Right. I mean, if you sit in in the garden and it's packed, obviously, it's a bit of a bubble environment because obviously people are going to show up for Celtics games and the tequila is doing well. But how do things really look to you on the ground? In my own personal investing, I've gone more towards debt and cash recently. I mean, I've got a lot of equity exposure with the Celtics in my, if you sort of add up a portfolio, I guess none of it is a, it's not a mega portfolio, but I'm just saying in my own small way, probably a little more cautious, but I'm feeling like just as the man in the street, I'm not a professional investor or advisor, but I think we're going to be OK this year.

I think things are going to be, you know, I watch CNBC and most of you guys don't you don't know that we'll have a recession. And I don't either. Yeah, it's an interesting environment that we're in. By the way, you just sold a sitcom to NBC. Right. So you got a lot of stuff going on. Yeah, as if you have any. We'll be in primetime on NBC this fall. All right. Awesome. I appreciate you being here so very much. Scott, thanks a lot. All right. You take care. That's Wick Grosbeck joining us right here at Post 9. Coming up, we are tracking some big stock moves in overtime. Seema Modi standing by with that. Seema? Got several companies moving in opposite directions on earnings in overtime and

on significant volume, I might add. We've got the full story coming up in two minutes. Las Vegas Sands is on the move in overtime after reporting results moments ago. We're now getting some headlines from the call as well. Let's get to Contessa Brewer, who has the latest for us. Contessa. Yeah, here's the big turnaround for the stock in extended trading. It's because CEO Rob Goldstein said in answer to a question about what was it going to take for them to turn a profit. And McCown, he goes, yeah, we're already

there. We're past moving in a break-even way toward very profitable. He says that the first two weeks that they've seen these travel restrictions come down for COVID saw immense demand. We're getting more on the call right now. I'll have more for you, but you can see the stock on the move at 3.5% in extended trading. Yeah, stock likes it so far, Contessa. Thank you for popping on. With that, we're tracking some other big movers, of course, in overtime, as always. Seema Modi doing that for us tonight. Seema? Hey, Scott, let's start with Seagate reporting better than expected earnings. CEO Dave Mosley

saying the storage company is managing through a tough economic environment with plans to launch its 30-plus terabyte hammer-based products in the June quarter. You'll see shares are up nearly 7 percent. Levi Strauss results topping expectations. CFO Harmeet Singh says we exited the holiday with continued momentum in our direct-to-consumer business. And he also cited improving trends in Europe. Also comments on consistent market share gains. Stock is up 6 percent in overtime. And take a look at Wolfspeed, trading lower after revenue missed Wall Street estimates. CEO Greg Lowe mentioning there has been some demand pressures on 5G that has impacted, quote, our RF product line. The stock down about 7% in overtime. Scott. All right, Seema, thank you. Still ahead, Santoli's last word.

We need his take on tonight's earnings reports and you will get it next. There he is, Mike Santoli here for his last word. What is your last word today? Process is well underway. I think there's some relief, certainly about how the market performed. The fact that we got traction, the fact that, you know, you're able to contain the potential damage of downside guidance. I don't think it's necessarily done. You can't declare the process is over. But, you know, service now after the market, we'll see if that can have a similar comeback. So I think that the better part of the action today was that tech as a whole didn't bring everything with it, even at the lows. So the

fact that more traditional cyclicals are working OK, we're going to get the GDP number tomorrow. I think it, you know, it's going to give you a little bit of a help to tell the story of what kind of an economy we're in right now, because we are in a firm patch in the economy. At the same time, the Fed might be finishing up. And I think that's what's been keeping things going. The January effect, all the January effects, the laggards working, people feeling underinvested at the beginning of the year. I think all that is helpful to the market right now. We have to see it clear through to see if that's distorting things at all with a 5 percent gain. You mentioned at the top, not only, you know, tech didn't bring everything with it, you know, not only didn't it bring everything with it, it fought its way back.

Right. NASDAQ, I mean, let's just call it virtually flat after the kind of session that it looked like it might be. Right. So I just read that and say people are acting as if they're underexposed to this market, if it's not going to fall apart quickly. I think the bears have a little bit less conviction than they did. Now, that being said, you know, I think six of the last eight days, the high for the day in the S&P is like four thousand plus a little bit. Right. So you're still flirting with this level. You're still trying to figure out if it's if it's for real. We've talked about how, you know, some of things are lining up to say that this is bull market type action. When you buy dips and you don't kind of run away at the first 4 percent drop in a bellwether stock, we'll see.

It's still to be proven. But I think it's more of a two-way market than certainly we had last year when it was all about just kind of fleeing from risk at the first stirring. Let's not forget next week, too. Right. What lies ahead? Not just earnings. And the Fed. Yeah, for sure.

And that's going to be big. Big earnings still to come. Thank you. All right. See you tomorrow. That's Mike Santoli with his last word. Fast Money begins now.