Closing Bell - Closing Bell Overtime: Big Earnings Movers 4/27/22

Episode Date: April 27, 2022

Shares of Meta surge in after hours trade following a beat on earnings and user growth. But, Josh Brown from Ritholtz Wealth Management says investors shouldn’t trust the post-earnings bounce. Plus, Teladodoc gets crushed following a big earnings miss. Kari Firestone from Aureus Asset Management gives her reaction and analysis. And, Michael Santoli takes a closer look at all the stock moves in his “Last Word.”

Welcome to Overtime. I'm Scott Wapner. You just heard the bells. We, of course, right here, Post 9, just getting started. Big show ahead. We begin with our talk of the tape. Decent rebound for stocks, sort of fizzled at the end. Still, though, a ton of questions about where this market is going, with critical earnings reports either imminent or still to come in the days ahead. Meta, Qualcomm, Pinterest, and others hitting any second. We'll get to them, and of course, we'll show you the immediate stock reaction across the board. Our experts are here as well. Halftime's Josh Brown, the CEO of Ritholtz Wealth Management. SoFi's Liz Young. And with me right here on set at Post 9 is Alex Kantrowitz,

big technology founder. Josh and Alex, of course, are CNBC contributors. So we are awaiting those numbers. Qualcomm and Meta are the big ones we're looking out for. But, of course, Alex, it is Meta that everybody is focused on, particularly after that bombshell last quarter. Well, it can't get much worse than it did last quarter, right? So, you know, Mark Zuckerberg is probably the happiest man in tech right now. He's got Elon Musk taking all the negative attention. His business has bottomed out about as far as you think it could possibly go. So this quarter can't possibly be as bad,

but ultimately the fundamental questions are still there for Facebook. Josh Brown, what's your outlook here? As I said, the first ever drop in daily active users last quarter was an absolute bombshell. And now after you had Netflix report, their shocker, you've had Snap, which wasn't all that great, Alphabet. Now you move to this one. What do you expect? I just think like this, this is so obvious if you're

an onlooker to the large cap tech companies and what's happening. Your best case scenario is Microsoft, 3%, 4%. Your worst case scenario is negative 40, as was the case in Netflix. I think it's still falling. Maybe negative 50%. So it's like if you're on the sidelines right now and you already have exposure to all these names and you own the Qs and you have broad market exposure, you have S&P exposure, why are you looking at these stocks and saying, yeah, you know what, I feel like being down 19% after an earnings call.

Let me roll the dice on the next one. It makes no sense that anybody would be behaving like that right now. This market is messy, like Johnny Depp messy. And I don't know that meta could be the thing that pulls us out of it. So I'm going to stick with what I've been saying. I think Apple holds the key. Microsoft was very encouraging. But Apple Thursday night is really going to be make or break and tell us whether or not this S&P needs to be in a full-blown bear market or not. We're not that far away. We're already off 12 or 13 percent from the high.

Liz Young, what's riding on these numbers now, right? There are some who say that Fang is dead, and this is the F in Fang. So is that truly the case? Well, I don't think Fang is dead forever, but what I do think is that a lot of people want to say that earnings are going to be what saves the day and that we're going to have this strong earnings season, and that's going to pull us out of this. Earnings are not what ails us. Earnings are not what got us here. Hey, Liz, forgive me. Earnings are not going to save us. Forgive me. are not what got us here. Earnings are not going to

save us. Forgive me. I'm going to interrupt you and I'll come back to you. And I apologize, but I told you things were happening and they were imminent. And John Ford has Qualcomm right now. Hey, John. Hey, Scott. Yeah. I mean, these numbers are particularly strong. Let me go through them. Qualcomm reports earnings for fiscal Q2 of $11.16 billion versus $10.6 billion expected, and earnings per share of $3.21 versus $2.91 expected. Also on the guide, very strong. They're guiding to a midpoint of $10.8 billion for fiscal Q3. The range is $10.5 to $11.3 billion. The street was looking for just 10 billion, also guiding to a non-gap EPS of two point seven five to two point nine five. That's two point eight five. Sorry, two dollars and eighty five cents earnings per share at the midpoint. The street was looking for two dollars

and fifty nine cents. I did have a chance to talk to Qualcomm CEO Cristiano Amon and CFO Akash Pakiwala about these results. A few things that stand out that are going to be interesting for some other companies that you're going to be talking about. Qualcomm partly outperformed because of Samsung, the Galaxy S22. Qualcomm had more than 75 percent share of the chips, critical chips in that phone versus 40 percent in last cycle. So they're winning there. The IOT business in Qualcomm, which Cristiano Amon has been talking a lot about, saying, hey, we're not just about handsets. Remember that business grew 61% year over year to $1.7 billion. Amon told me Qualcomm is gaining share in China year over year. Now, all is not rosy for the market overall. He said Qualcomm did see China

weakness in lower tier handsets, which of course is not where they focus. And Qualcomm's guidance does assume a COVID recovery in China by the end of fiscal Q3. And if that doesn't happen, then this kind of beat and raise might be perhaps less of a raise. But all of that said, strong numbers. And I'm going to have Qualcomm CEO Christiana Amon on Squawk on the Street and then 10 o'clock hour tomorrow. Scott, this has to relieve some fears, though, John. I mean, chips have already been under pressure. You have supply chain concerns. You have covid lockdowns and a beat and raise quarter perhaps is exactly what this space needed to hear from someone like Qualcomm. Yeah, that's true. Now, granted, some of this is Qualcomm specific. They are able to win more of that Samsung business. They used to split Samsung between doing a lot of their own chips and Qualcomm chips. Cristiano, by the way,

saying to me, hey, this proves that even when we've got a big customer that's making their own chips, we can still win that business from them a clear nod to what apple is planning to do he's saying hey we got the best products so we can win the business so there's that there's also the fact he is saying that on the lower tier there is some weakness in china but qualcomm's playing at the higher end so you got to worry perhaps about some of those players who are at the lower end in markets like china they might not do as well but yes this is a very much a beat and a raise from Qualcomm. All right. That's our man, John Fort with Qualcomm's numbers. You heard he's going

to have interviews coming up as well. John, we'll hear from you again if we need to. Let's bring in halftime investment committee member Jim Labenthal for his instant reaction. Jim, sigh of relief from you on a day where price targets were cut at Barclays and Morgan Stanley, a stock down 26% year to date. Does this stem that tide? Well, for the stock, it should. It should. And really what this comes down to is what is the right multiple for this stock? It's currently trading at around 11 times this year's earnings, Scott. And I'm just going to tell you, because of the growth rate of the earnings and the diversity that John was talking about, it deserves a much higher multiple. Now, frankly, it usually trades around 15.

So, you know, if you get from 11 to 15, that's about a 35% raise right now, plus the estimates are going to go up as they should. Frankly, I think that multiple should be 20 times by the end of the year. Why do I say that, Scott? Two reasons. One, they're diversifying away from Apple. That's what John was saying about the Samsung business. And two, they're diversifying away from smartphones in general with Internet of Things and auto.

Internet of Things was up 61 percent. Simply put, this stock deserves at least a multiple of 15 right now, which would put it up around 170. And frankly, I think it deserves a multiple of 20. The price target for me is 230 at the end of the year based on that 20 multiple. All right. Jim Labenthal got a bounce because I got meta out. Julia Borson has it. Hi, Julia. Well, Scott, we have Facebook earnings beat estimates coming at $2.72 versus the $2.56 that were estimated. Revenues missing estimates coming at $27.91 billion versus the $28.2 billion estimated. A monthly active users also lower than expected, $2.94 billion versus the $2.97 billion expected. And the company says there was softness in the back half of the first quarter that coincided with the war in Ukraine. They expect that to continue into the second quarter. That very much is in line with what Snap said. They also are giving second quarter revenue guidance

of between 28 and $30 billion. That is below the consensus of $30.63 billion. I'm going to be speaking to Facebook CFO, Dave Wehner, and I will be back to you guys with more. Quickly, Julia, 1.96 I see as the 1.96 billion is the daily active users. That was higher than the prior quarter. As I did mention earlier, they had their first ever drop in DAUs, and that was one of the reasons that it was such a bombshell report. Does this help with some of those concerns? I think that might help a little

bit. Also, if you look at the fact that the consensus estimates for DAUs was 1.95 billion, so slightly better than expected. I haven't seen the slides yet. Those break out the different regions. And one key thing that we're going to be looking for as soon as we get those slides is whether or not they saw an increase, decrease, or flat daily and monthly active users in the U.S. and Canada. That region is particularly important because that's where they have the highest average revenue per user. So overall, they did grow daily active users. The question is just what happened in that key most valuable and most saturated region. Yeah. Julia Boorstin, thank you for that.

Alex Kantrowicz, sigh of relief in the market. I mean, look at the stock. It's up nearly 8% in the OT. That's certainly a different story than what happened last time. The biggest issue last quarter for Facebook was the fact that they were losing users, like you referenced. And if they're able to grow users, then it changes the game for them. You don't really find a way to make your living as a shrinking social network. Look at Pinterest right now.

Disastrous. The contraction that they're seeing. Facebook growing. That's important. You know, I think that the revenue guidance is a concern, right? They're still being hit by Apple, probably inflation and other macro factors that we're seeing across the economy. But number one is they have to be able to grow and they're growing. So that's why the market's reacting. Josh, you know, that last print last quarter had people wondering perhaps whether we had seen peak Facebook, you know, a first ever drop in DAUs. I'm wondering if we're still thinking that today there is competition to worry about TikTok and Snap. Other things that people are doing today may be

different than Instagram. What do you think? Yeah. And now on the horizon, my friend Dan McMurtry at Super Mugatsu on Twitter likes to bet against companies where they end up with a competitor that's like being locked in a cage with an axe-wielding psychopath. A reinvigorated Twitter don't believe the hype about we're closing down ads. If anything, they may get even more aggressive in competing for eyeballs, for ad revenue, for everything with something like an Instagram. So I don't love the setup here. I like the fact that the stock was able to bounce

rather than violate those COVID level lows, which is about 150 to 160 a share. If we're not going to visit those levels tomorrow, I guess that's a good thing. That's somewhat constructive. But technically, this thing is still in no man's land. And as we've learned, don't trust the post earnings bounce. They almost never last. So far, that's been a pretty good rule of thumb for investors on the day after earnings. Maybe this one will snap that narrative. But until it happens, I wouldn't be saying the coast is clear in this name. It's just a lot of damage and a lot

of people trapped in this stock. It's a big bounce, though. And it could have been awfully worse. Now, I do wonder about, you know, if their revenue projection is at the lower end of the estimates, Liz, if we do need to think about a slowdown in ad spend. It just all goes back to the same topic story that we've been talking about. A slowing economy or small businesses, which are the lifeblood of Facebook. Remember, 90 some odd percent of Facebook's revenue comes from advertising. And if there's a slowdown, that will cause a decrease in revenue. How concerned should we be about a slowing economy hitting a Facebook in the future? I think we should be concerned about inflation hitting companies' bottom lines and

think about the things that go first when companies are trying to cut costs. They lower advertising, they lower sales, they lower marketing expenses. They do that before they lay people off. So I do think that ad spend is going to be pressured in a lot of different places. And I would be being really careful with any companies that are dependent on ad spend until we get to a point where we know that inflation has peaked. We've got some of these really big Fed hikes behind us. And I'd be looking at midsummer at the earliest to start towing into those names. All right. The letter F is out. That's Ford, of course. Phil LeBeau with that. Hi, Phil. Hey, Scott, we take a look at Ford shares moving up about two percent right now.

The company beat on the top and the bottom line, earning 38 cents a share versus the estimate of 37 cents. Revenue coming in a little bit better than expected at thirty two point one billion. Some numbers within the numbers in the first quarter, they ended the quarter with $29 billion in cash, including $45 billion in liquidity. They've got the cash pile that they're going to be using to invest in electric vehicles. They are reaffirming their full year EBIT guidance of earning between $11.5 and $12.5 billion. The adjusted free cash flow for the year will come in at $5.5 to $6.5 billion. That's all reaffirmation of what they have previously given as guidance. That is assuming that the supply of chips steadily improves.

Why do I say assuming? Keep in mind, they're still dealing with a shortage. In fact, the Flat Rock plant, it's going to be down tomorrow and Friday. One example of the fact that they do not have the full supply of chips that they would like to have. Their commodity costs up about $4 billion this year. So those are the numbers within the numbers from Ford. One other note, guys, you don't want to miss Jim Farley, CEO of Ford, coming up on Mad Money. He's talking with Jim Kramer, not only about the first quarter, but the outlook from there. And Scott, I will leave you with this. You will see headlines that Ford had a mark-to-market write-down on their Rivian investment of $5.4 billion. Remember, they have not liquidated their investment yet. We saw a big $8.2 billion

gain in the fourth, coming off the fourth quarter. So that's some of the noise that's out there regarding Ford as they beat the street, earning a penny more than expectations scott back to you farley's going to be talking evs obviously what the future holds for this company and hopefully we will as you said phil get some more insight into what's exactly taking place with the the chip story that's what matters most of all. Yep, absolutely. It's improving, but it's still going to be impacting Ford, all of the automakers, as you go through the rest of this year. Yeah, I mean, he was downright giddy with you yesterday, Phil, as he was showing off that new vehicle. So I would have been surprised if something big dropped negative today. So we'll

see. And we'll hear from Mr. Farley coming up. Let's fill the boat with the latest on Ford. Want to get back to Meta. As we said, earnings were good. The guidance looks a little bit light. The daily active user certainly not as bad as feared. The revenue increase of 7 percent in the first quarter. I should also note the slowest pace of growth for Facebook since that company went public in 2012. It brings the issue back to you, AK, on this notion of whether Facebook has reached its peak, if it can still grow its user base against what is a much different competitive landscape than it was when the company went public. I don't think it's the peak necessarily, but it's going to be really tough.

Every company, there comes moments where you have to reinvent yourself. Facebook right now is dealing with an issue where when you look at Snap, you look at TikTok, it's losing the youth. And the way that it's chosen to reinvent itself is through virtual reality. That's a bet that might take five, 10 years to come to fruition. Meanwhile, what's the company doing? Where is its attention when it comes to younger users? And that to me is the issue. I think that's probably the problem that we saw when the company's user base contracted. It's got to get them on. You ask them, where are they chatting? Is it WhatsApp? Is it Messenger? No, it's Snapchat. Were they watching videos? Is it Instagram? No, it's TikTok. This is the biggest challenge for the company. And if people believe

it's peaked, this is probably the reason why. Yeah. Liz Young, in what is a tremendously big week, was Microsoft good enough? Is meta Facebook now good enough? And now everything, I guess, hinges on what Apple delivers. I know Amazon is important, too, but the biggest company in the market and especially what Qualcomm had to say now, Qualcomm, as John Ford said, may be Qualcomm specific, but nonetheless, you may get a little bit of a read through through supply chain issues, chips and the like and what's happening over in China. How do you see it? Look, when we're talking about tech, this was the point I was in the middle of at the top of the show.

I think a lot of people want to believe that earnings are going to pull us out of this, but earnings are not what got us into this. So at this point, the best we can do is that earnings create a floor on how much some of these names can draw down. And they create a floor on the market because we have those fundamentals to fall back on. But the reality is there are so many macro headwinds still in front of us in the next 60 days that the market is just hard to impress. We've been punishing beats by 1.7 percent on average, punishing misses by twice that. So at this point, yeah, they're good enough, right, to not create more damage. Earnings aren't piling on, and that's a good thing. But earnings are not

going to be what solves all of our problems here, especially in tech and communications. Josh, do you personally believe that the FANG... I agree with Liz. Go ahead. I just want to add to what Liz said. I think what she said is the key point, and it's so important. We don't have an earnings problem. We don't even have a revenue problem. We have a multiple problem. We started this year at 21 times forward earnings for the S&P 500.

We are now down to 17.8 times. Where does it end? Does it end at 17? Does it end at 15? You go back through history. You try to find the impact of high inflation on the stock market. And one of the things that you notice is that actually earnings and revenue don't get hit that badly. And here is the reason. Judge, if you sell 100 refrigerators last year at $100 each,

and then you sell another 100 this year at $1. 20 each because we're in an inflationary environment? Well, it looks like your revenue is growing at 20 percent. It looks great. But people aren't paying the same multiple for your stock in that environment. So Liz has nailed it. And the only point that I would build on that with is we have a really interesting situation right now with both bonds and stocks down big to start the year. S&P down 13 percent. Barclays Ag down high single digits, which it's been a long time since we've seen that. It's like the worst start of the year since 42, I think. Some crazy stat like that, right?

Dude, it's bad. Worst start to the year since 42. It's bad. And that's right. And you go back 90 years. We have good data, 90 years' worth of stock and bond returns. And here's what's right. And you go back, you go back, you go back 90 years. We have good data, 90 years worth of stock and bond returns. And here's what's interesting. There are only four years that end that way with negative returns for both stocks and bonds. In two of those four years, you had very high inflation.

1969 being a pretty good example, just to give people a sense. It's not the end of the world to have a negative year for both. It's just very unlikely. So we have Salesforce. We could see clients logging into their accounts. And I said to the head of my wealth management group, I said, what's going on with the clients, the logins on the Dow down 1,000 day? And he says, well, there is an uptick, not much. And I said, well, what are they worried about? He says, half of them are panicking about bonds. The other half are panicking

about stocks. I said, all right, put them all in cash. I'll call them Labor Day. I'm joking. But like that's the environment we're in. Historically, one of those two things will win out. So we may have actually had a blow off top in bond yields last week, which nobody's talking about. Highly possible. So stay tuned. One thing that everyone should keep in mind, and this is immutable, eventually the money has to go somewhere. So we may have seen the worst of the stock market correction if the whole thing is about multiple compression. If you tell me there's a financial crisis brewing, that's a different story. But we have no evidence of that. So I'm trying to stay constructive.

Big multiple contraction already could be more. But earnings are holding up. Yeah. Speaking of earnings, PayPal's out. Kate Rooney, what do you see there? Because this stock has been man, it's been crushed. Yeah, Scott. So in the first quarter, it looks like slightly mixed results here. Revenue was a beat, but PayPal with a significant slash here to full year guidance. Let's start with earnings, though. Adjusted EPS 88 cents for the last quarter. That was in line.

Revenue coming in at about 6.5 billion, 6.48. Also a beat that was up 7%, And excluding eBay, revenue grew 15%. So eBay still very much a drag on growth over at PayPal. But when it comes to the full year guidance, they're now looking at revenue growth of between 11% and 13%. For context, guys, three months ago, PayPal was looking at full year revenue growth of about 15% to 17%. So slashing that number significantly eps outlook also lower than expected for the full year they're looking at a range that's now about 80 percent excuse me 80 cents below where they were forecasting just a few months ago total

net active accounts now at 429 million and payment volume coming in at 323 billion growing 13 percent but again the guidance and the slashing guidance really is the headline here. Back to you, Scott. Yeah. Kate Rooney, thank you. And not much reaction, certainly in shares, which remain higher in the OT. Now, of course, all that can change in a matter of moments. And we'll pay attention closely to that. But Josh Brown, this stock is down 56% year to date. To say it's in the in the penalty box would be an understatement. It's like it got sent to the locker room, told to get dressed and go home. It's been so bad. It's a it's a disaster. It's actually worse than that.

If you go back to the high of July 2021, this stock is down 70 something percent. And let me put that in dollar terms. This was $300 billion in market cap. And now it's around $100 billion, maybe less. So they've lost $200 billion. Think about how many companies there are that are $200 billion in total market cap. That's how much PayPal's valuation has suffered. Where are the activists? Is nobody paying attention to this?

Carl Icahn was involved in this when it was still a part of eBay. He demanded they spin it off. It worked. It was fantastic for shareholders of both companies. Where are the activists now? How could you have a company fall this far out of favor without the attendant deterioration and fundamentals? They still have 400 million users. It's not like the business fell apart. It just stopped growing. How could you have a market cap shrink to this degree? Nobody steps in. Nobody questions the CEO. What are you guys even doing there day to day? Is anything taking place? So I think this is going to get really interesting. You sound like an exasperated shareholder. You sound like an exasperated shareholder. I'm not in it.

I already got crushed in this stock. I'm out. Who is going to step up and say, guys, what are we doing here? Right? And I think there are a lot of fintechs, publicly traded fintechs in the same boat, by the way. PayPal is just the biggest and most glaring, ridiculous situation. The other the other thing, Josh, real quick before we take a break, and I'm purposely not including Liz in this part of the conversation is, you know, possible

takeouts, possible deals, mergers between big banks who missed out on the fintech revolution from the organic level and now have no choice but to take a look at a paypal a square uh a sofa and that's particularly why i didn't that's why i didn't include liz in the conversation they can't do it almost none of these companies are making any money they're all losing money like robin hood is losing money hand over fist it's it's what's called dilutive to earnings you can't do you can't do a deal. You can't do a hundred billion dollar deal for PayPal if you're a money center bank and take that kind of hit to earnings and then risk what the potential charge off would be. And a charge off is almost certain

for most of these money losing fintechs. So I think what's really interesting here is that people like Jamie Dimon and DJ David Solomon are going to start eating these companies' lunches. In the end, it turns out it's not that hard to hire engineers and build a great app. So if you think about what fintech will look like over the next 10 years, it's very likely that you'll see Morgan Stanley, JP Morgan, Goldman Sachs, Bank of America stage a little bit of a counterrevolution. And they have the capital to build really great stuff, and they are. So it's going to get a little bit, the disruption narrative gets a little bit tougher. And for PayPal, I do think they would be well served finding some more traditional

dance partners, at least for joint ventures. I just think it's too big and too expensive to actually get acquired. Let's go back to the Facebook story, Meta, of course, as well. Again, it was a top line miss, bottom line beat. Julia Boorstin just off the phone with that company's CFO. JB? That's right. I just spoke with Meta CFO Dave Wehner, and he pointed out to me that the company had sequential growth in daily active users in each region, and that was improved on every region other than Europe. And they, of course, pointed out that Europe faced headwinds because of being blocked in Russia, being shut down in Russia, and also because, of course, because of

the war. But they point out the solid user trends on the Facebook side other than the blockage in Russia. So Europe was the one region that lost users. Now, on the revenue side, he notes that revenue fell in the midpoint of the range, very much as expected, and that it would have been higher. It would have been at the top end of the range or higher than that if it were not for the war. So very much worth noting here that they're facing the same headwinds that Snap pointed out last week. Now, in terms of Q2 total revenue guidance, he said that's the continuation of trends impacting revenue growth in the first second half of the first quarter. the softness. He also notes

that they expect to face foreign currency headwinds. I asked him about the impact of the operating system change that Apple, the iOS operating system change that has impacted their ability to target ads. He said they are continuing to work on privacy-enhanced technologies to deliver good performance for their advertisers. And they're investing on that front and also on AI and machine learning to build robust solutions for their advertisers that use less data. I pressed him as well on the impact of reels. They warned last quarter that people spending more time on reels was going to be challenging for revenue. He said, indeed, that does the growth of reels. They're pleased with the growth of reels, but that remains a

headwind in terms of revenue growth because as time shifts to reels, which has relatively few ads compared to services that are more mature, they do expect reels to be headwinds to revenues near term in 2022. But going forward, they do expect more opportunities for reals going forward. Guys? Okay. Julia Boorstin with the update there. Thank you. You can see the stock in the OT up better than 13%. This smells to me all about DAUs. You take all the other numbers out of the picture after what happened last time, then the fact that DAU growth improved in every region, that that, Alex, is what this story is about today. No doubt about it.

There's no other way to look at the reason why the stock is moving as high as it is right now. I mean, when your guidance is below, when your revenues miss and the stock's up 13 percent, this to me says gigantic sigh of relief on the active users, on the daily active users, that that story isn't, in fact, over, that it was just a perhaps a blip. Yeah, well, investors also kicked the crap out of it in the last quarter. So, you know, they probably punished it too hard. You know, there's a lot of reason to try to run away from Facebook, right? You know, all the headwinds that are coming at it, TikTok, you have inflation, you have

the war in Ukraine, you have supply chain issues, you have struggles with direct to consumer brands. So if you're an investor, you have all that in your head, and then they're shrinking. Yeah, you got to get out there. So the fact that it's a bit of a dead cap bounce, right, on this one, where they're now saying, OK, we're going to give it another chance, but not too many of them. So we'll see how it plays out. Is that the story, Josh? It's all about the DAUs? I mean, I'm getting a comment from a money manager who says, much better than the buy side feared. And maybe that sums it all up too.

Yes, very important. And the thing with reels, don't underestimate the real story. They absolutely have to take the wind out of the sails of TikTok. Like this is almost existential for Instagram and the younger demographics. And actually, as a creator, when you post a video to Facebook, if you can keep it under a minute long, you're better off making it a reel than you are making it a story or a regular timeline post. Because Facebook is so desperate to build up reels that they are substantially rewarding you with viewership of that video. So now you're seeing a lot of creators pivot content that they ordinarily would have uploaded in a different format to that reels format. Like everybody is doing that. So it's really important

as a shareholder to see that they are responding to that new format's popularity in the market and all of the ad revenue that can come from building it up. I got to go to Bertha Coombs because Teladoc is going to develop into quite the story in the OT. Bertha, what do we see here? Well, we're seeing a huge drop in Teladoc. It's hard to do an applicable on the bottom line, but on the top line with a miss at 565.4 million. And they are lowering their outlook for 2022. Now looking at a net loss per share of $43.50. That's EBITDA, earnings before interest and depreciation, revised to $2.4 to $2.5 billion on revenues of $240 to $265 million. Among the issues, they said, is that they are experiencing some headwinds when it comes to chronic condition market.

That's what they bought Livongo for. And one of the areas that they are really trying to grow because it does include more revenue. Part of the issue there is that you have to engage the members to sign up. They don't get it automatically from employers. The other issue in the direct to consumer market in the mental health market, which has been growing and they are seeing growth, but they are having to spend more on advertising, whether it's sponsoring podcasts or going direct to consumers online to get them on. And as you can see there, that stock now down more than 30 percent after hours, a conference call starting at 430, but very much a rough, rough haul here for a stock

that was already down 70 percent from its 52 week high coming into this afternoon's print. Yeah. All right, Bertha, appreciate that very much. That's Bertha Coombs with Teladoc, a disaster in the OT. Stocks down more than 38 percent. Huge position for Cathie Wood, one of the biggest blow up positions that Jim Cramer has ever seen. That's what he's telling me. Josh Brown, I don't know what stock you want to pick peloton netflix teledoc the world's different the world is different today and it's going to be even more different tomorrow and the week after that and stocks like this are going to suffer yeah i mean this this one's this teledoc thing is is going to be really tough you know this was a stock that was working prior to the pandemic and they just had this tremendous pull forward in in in awareness and demand and usage.

And when the stock price was at its height, I think they had a really smart notion. They said, we better diversify this business and figure out something else to do and not just rely on the growth of video doctor's appointments forever. And we got to use these inflated share prices as as like a currency and so they tried they did a they did a diabetes monitoring thing um but i think the market looked at that and was skeptical so this was one of the first of the quote stay-at-home stocks to start blowing up. This has been blowing up for over a year now. And I really don't know what to say at this point. This is a big waiting in a couple of the ARK ETFs. But that's what I said. ARK might be the biggest, actually, institutional shareholder. Yeah.

That's exactly what I was saying about the size of the position that, you know, ARC, Kathy Wood had in Teladoc. And man, I mean, that is the second derivative story of this story, what's happening in Teladoc. And we'll get into that. But we're going to take a quick break. Big thanks to Josh Brown, Liz Young, Alex Cantor. Thanks for being here on set. It's always good to have you right here. We will be right back. More reaction to meta earnings. We have a shareholder standing by to break down the quarter. Plus, we're all over the action in Qualcomm and Las Vegas Sands. Both of their earnings calls are about to kick off. We're dialed in and ready to bring you all the big headlines. We're back in the OT right after this. All right. Welcome back to Overtime. It's time for a CBC News update with Shepard Smith. Hi, Shep.

Hi, Scott. From the news on CNBC, here's what's happening. The governments of Poland and Bulgaria accuse Russia of blackmail after Russia cut off their gas supplies. It comes after Vladimir Putin said unfriendly nations, as he put it, would have to start paying in rubles. The White House accusing the Kremlin of essentially weaponizing energy supplies. But the U.S. and Russia are managing to agree on one thing, a prisoner swap. The American Trevor Reed released today a U.S. Marine sentenced to nine years in a Moscow prison

for an alleged fight with police officers. In exchange, a Russian drug trafficker serving time in the U.S. sent back to Russia. And a Minnesota Human Rights Commission report found that a pattern of racial discrimination exists, one that spans at least a decade in the Minneapolis Police Department. The probe began just after former officer Derek Chauvin killed George Floyd. Lawyers for the Floyd family call the report monumental in its importance. Tonight, the water crisis in California and a dam that may have a hard time keeping the lights on across the Southwest. The details on the news right after Jim Cramer,

7 Eastern, CNBC. Scott, back to you. All right, that's Shepard Smith. I appreciate that. We'll see you at 7 o'clock tonight. Check out shares of Meta. They are surging after hours. The company beat on earnings and user growth estimates. Revenue and guidance did come below forecast, but you can certainly see the stock in the OT is responding by better than 15 percent. Let's bring in David Bars. He's the founder and CEO of Exxon Capital, owns shares of Meta in his fund. And I gather you let out a giant sigh of relief when those numbers hit the tape. Tell me about it. Don't we all need a little bit of relief? You guys have just been talking down the market for the last two weeks. So this is this is joy for us. Yeah, for real, though, as it relates to this stock, how concerned were you going in and now really how relieved are you on the other side, especially as it relates to those users, daily active user growth growing

everywhere except for Europe? Look, we're about trying to figure out what companies not to own in the broad, large, large cap space. So Facebook has and Meta has been a perennial winner in our in our index. And so we've let it take care of itself. We're about long term secular decline. We're about technological disruption. That's what Facebook has been doing to most businesses and companies out there. So this is a bit of a sigh of relief, but certainly they've taken it on the chin in 2022 so far. Yeah, I'm going to take issue with what you said off the top, too. I'm trying. I'm not going to get all over it. But I mean, the market took itself down. We didn't do anything. I mean, there are many reasons why the market was down. We didn't talk anything down. Yeah, well, you got uncertainty. And the more you talk about uncertainty, the more uncertainty

there is. So, you know, you have to try and think about things long term and good quality companies. This company still did close to twenty eight billion dollars in revenue. I don't know how people can not look at anything but in awe of what they've been able to create. Well, sure. But there was a reason why the stock went down so dramatically last quarter, right? Because they had the first ever drop in users. I mean, that's what matters first, second, third and 20th to this story. Well, yeah, the user, you know, their user declination is an important factor. And I think your prior guest was talking about that, how the user growth goes or not is going to be one of the ways in which this stock performs or not. But at the end of the ways in which this stock performs or not.

But at the end of the day, there's still a company that is growing. It's just not growing as fast as it was. And did it deserve the kind of impact that the market gave it? We'll see. But technological disruption is something that I think is a long-term phenomenon. What we're dealing with in the uncertain world right now is uncertainty. And as soon as that uncertainty becomes more clear, these are the kinds of companies you're going to want to own. These are the ones that are going to take us to the next level. All right. This is David

Bars joining us. Appreciate it. Got to run because we have more to talk about right here in the OT. Up next, a fresh round of earnings to get to Las Vegas Sands. Mattel both on the move in the OT. We're breaking it all down when overtime returns. Mattel earnings are out. Courtney Reagan has those numbers. There's a stock up 3 percent. But it was a big story during the day because of maybe private equity getting involved. Do we know anything new? Yeah, we don't know anything new right now, but maybe we will very shortly when we hear from them on the earnings call. As you can see, shares are higher by 3% in the after hours. Mattel did report, Scott, an unexpected profit, $0.08 adjusted.

The street was actually looking for a loss of $0.04. Revenue also stronger than expected at $1.04 billion in revenue compared to $918 million that was expected. The real strength was in the action figure building SADS games group. That was up 41% when you're looking at the billings, but actually strength nearly across the board, though American Girl doll does continue to be a weak point. We should note that the full year guidance was also reaffirmed. It's not comparable with analyst estimates because they're giving it to us in constant currency. The CEO also noting, very interesting, that Mattel's supply chain is playing a key role in its success. Usually you're hearing something very different from a lot of companies when it comes to the supply chain.

And the CFO also points out that they had increased points of distribution and that retailers are really looking to restock low levels of inventory following the holiday with all the disruptions that we saw. CEO Ian Crites will be on Mad Money later tonight. I'm sure Jim Cramer has a lot of questions for him. I know he does, and he's going to ask him, too. It's going to be very interesting because the stock was up big in the session on, you know, reports of a potential LBO. So we'll see. Courtney Reagan, I appreciate that very much. Thank you. Las Vegas Sands, that call is underway now. It was a miss on the top and the bottom line.

Right, Contessa Brewer? Right, Scott. Revenue of nine hundred forty three million. That misses the expectation coming in of one point one billion adjusted loss per share of 40 cents. The estimate was coming in at a loss of $0.24. The culprit here, those pandemic restrictions and the reduced visitation to Macau. It's significant. The COVID lockdowns in China's big cities are just like a spigot to Macau being shut off. Operating losses of $302 million for the quarter, triple that from the same quarter last year, which was still in the pandemic.

Adjusted property EBITDA, that's the key earnings metrics in gaming, it turned negative. That's a reversal of trend. Singapore, on the other hand, is showing stronger results at just a limited COVID restrictions. We're expecting to hear more about Singapore as we continue with this call. Biggest exposure of all the casinos to China, Macau, is it LVS? It's actually Wynn. And right now you've got Boston, at least last quarter,

Boston was out earning as any single property that Wynn has in Macau. So it's really a reversal here of what we've been seeing. And Churchill Downs just reported, Scott, they're seeing record results on revenue and earnings. These regional casinos in the United States are just going gangbusters. Yeah, people are getting out and spending that money. All right, Contessa Brewer, I appreciate that from you. Thank you. Up next, more on this huge story on Teladoc, that stock is plunging in the OT. It is the third biggest holding in Cathie Wood's ARK Innovation ETF. There is big fallout to talk about as well. Next. This is developing into quite a story in the OT. That stock chart right there.

That's Teladoc down more than 32 percent. That's after reporting a revenue miss, giving disappointing guidance as well. And there are ripple effects that we need to talk about. Let's bring in Aries Asset Management CEO and a CNBC contributor, Carrie Firestone. She's on the news line. You know, Carrie, what's your first reaction when it's not just a Teladoc story? It's a Cathie Wood story. This is the third largest holding in the ARK Innovation Fund. You had owned Peloton at one point. I mean, you were a believer in some stocks like this, but what about today? What do you make of this? Oh Oh boy, am I happy I don't own this one. We never did. And this is a case of a company that had a fantastic business idea for a pandemic. They didn't know it at the time, but they provided remote medical service for people who were at home because their doctors were at home and

hospitals were closed and medical centers were closed because of COVID. They did not come up with a strategy for the post-COVID world when those entities that they had taken business from reopened. So now hospitals and providers are able to see their patients in virtual sessions all the time. They had two years to come up with that technology. And Teladoc wasn't part of that effort. And now they're just losing out. They're losing share again. They're losing money. And at 55, or, well, they're not going to be 55 tomorrow, at 30, it doesn't matter,

because no one knows what that growth rate will be or if there is a growth rate. Hey, Carrie, real quick before I let you go. This suggests that higher valuation growth stocks haven't come down enough, and there is more pain ahead for some of the most egregious valued names that can't keep up with that growth trajectory. If you can't grow at all and you're still losing money, it's going to be tough. Very tough. Yeah.

We'll talk to you in the days ahead, Carrie. I've got to run. We've been so busy this hour, but I know we'll catch up with you soon. That's Carrie to you in the days ahead, Carrie. I got to run. We've been so busy this hour, but I know we'll catch up with you soon. That's Carrie Firestone on the news line there. Santoli's last word is going to be about Cathie Wood and Teladoc. We'll do it next. We're back in the OTM. Jen is slipping after hours after beating despite a beat on EPS and revenue top and bottom line, though full year outlook for that company came in slightly below expectations. The company is also disclosing a dispute with the

Internal Revenue Service, which says the company owes more than five billion dollars in taxes for a period from 2013 to 2015. The agency could also add a two billion dollar penalty on top of that. Amgen says it will, quote, vigorously contest those charges. There's a stock that's down a little more than 14 percent in overtime. As we go to break, take a look at Apple. That stock is higher in the OT on the back of a strong report out of Meta, maybe a little bit too on the back of Qualcomm. It reports in less than 24 hours right here. We will have full coverage, of course, in overtime. Up next, Santoli's last word. Michael Santoli is here for his last word. I mean, look, OK, Facebook sigh of relief. But I

really think the bigger story to talk about at this moment is Teladoc. Well, it's emblematic of a lot of things going on, obviously, one in a downtrend, especially with these speculative stocks. It's not a time to be buying the 52-week low list. It usually is not rewarded. Stocks like this. I mean, Cathie Wood's been buying it in the last few days. She's been buying it all the way. Now, not to pile on, but, and there is a principle that Bill Miller used to talk about, which is lowest average cost wins if the ideas you believe in pan out. It's very hard to balance long-term conviction in a business with how the market treats it in the short term. However, again, this is not the market that is treating stocks with a high story to substance ratio well. You have to know that.

Money has been flowing in lately to ARK. It's been one of the most amazing things to watch as the market has gone through this unsettling moment. Money continues to go there. It does go there. There's some element of, obviously, you feel as if the losses have been taken, and it's a good play on mean reversion. Also, shares in an ETF get created when people want to shorten it. So sometimes what look like inflows are not necessarily pure inflows. But I do think that it does show you that there is still a residual

these ideas will work sentiment out there among some investors. We've got less than 30 seconds left in show, but take Microsoft and then you put Facebook with it. Yeah. Should we feel pretty good or better about where the mega caps are? I think you'd feel a little bit better. A little bit better. A lot of selling has happened in the last three or four days, and I'm not saying all of it's done, but at least you've kind of evaded the worst-case scenarios on these big names.

Yeah. It was a beat, of course, on the bottom line for Meta. It was a miss on revenues, but daily active users certainly stemming some of the concerns there. That does it for us. We'll see you tomorrow on the OT.