← CNBC's "Fast Money"
CNBC's "Fast Money"
Netflix, United Airlines Report… And Natural Gas Surges Amid Freezing Temperatures 1/20/26
00:43:09
Shares of Netflix and United Airlines on the move as the company report results. The latest on the streaming giant’s bid for Warner Brothers Discovery, and what United CEO Scott Kirby has to say about the company’s latest numbers. Plus, the latest out of President Trump’s White House briefing, the surge in Natural gas prices as freezing temperatures hit millions across the U.S., and the stocks that bucked today’s sell-off. Fast Money Disclaimer
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What does it mean to live a rich life? It means brave first leaps, tearful goodbyes and everything in between. With over 100 years experience navigating the ups and downs of the market and of life, your Edward Jones financial advisor will be there to help you move ahead with confidence. Because with all you've done to find your rich, we'll do all we can to help you keep enjoying it. Edward Jones, Member SIPC not every sale happens at the register. Before AT&T business Wireless checking out customers on our mobile POS systems took too long. Basically a staring contest where everyone loses. It's crazy what people will say during an awkward silence. Now transactions are done before the silence takes hold. That means I can focus on the task at hand and make an extra sale or two. Sometimes I do miss the bonding time. Sometimes.
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Live in the NASDAQ markets in the heart of New York City's Times Square. This is fast money. Here's what's on tap tonight. A market meltdown on the threat of new terror sending major indices to their worst day in more than three months. Once high flying tech stocks leading the way lower, how much more pain is there to come? And how do you position yourself right now? We'll get some answers. And a big night of earnings. Netflix shares dropping despite a revenue beat. What is driving the movie? The latest of the streamers bid for Warner Brothers discovery. And that's not the only report we're watching. Shares of United Airlines taking flight. We'll get the details behind the numbers from CEO Scott Kirby later on this hour. I'm Melissa Lee. Come to you live from Studio B at the nasdaq. On the desk tonight, Tim Seymour, Karen Feiderman, Dan Nathan and Guy Adami. We start off with the market rout coming after President Trump threatened new tariffs on European countries over the weekend as part of his push to take control of Greenland. Stocks closing near session lows with major averages each putting in their worst days since October 10th. The S&P sliding 2%, erasing its year to date gains. The Dow shedding 870 points while Tech led the losses with the NASDAQ down 2.4%. The Magnificent Seven collectively dropping 3% today. That's an aggregate market cap loss of nearly $650 billion. That's more than the size of Visa. And while stocks pull back longer dated treasury yields are on the rise. A benchmark 10 year yield hitting its highest level since August. The dollar index Dr. While gold and silver settled at fresh records and Bitcoin slipping almost 4% now back below 90K. Also today, President Trump joined the White House press briefing room to mark one year since taking office. Eamon Javors is in Washington with all those headlines. Eamon?
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C
Yeah, Melissa, that's right. The president spoke for about an hour and 45 minutes in the briefing room reliving what he views as the highlights of the past year on a whole host of different topics. But take a look at this, which shows the timeline here for the tariffs that the President announced over the weekend, February 1st. He says it will be a 10% tariff on all goods, that is goods involved with countries that sent their forces to Greenland to protect it from a potential US invasion on June 1, he said that will increase to 25% and he said those tariffs will be charged until a deal is reached for the United States to purchase Greenland. So at this point, that's what the President says is going to happen. But remember, Melissa, we saw the president announce tariffs last week. He announced 25% tariffs on countries that are doing business with Iran, including potentially China. The president said several times last week that those tariffs were in effect. They are not. We have not seen those noticed in the Federal Register yet. So nobody is collecting the tariffs that the President said went into effect last week. It's not clear whether these will go into effect or whether the President will be able to come to some terms tomorrow. But, but he does leave tonight to head out to Davos and he is expected to address the World Economic Forum tomorrow and he's also going to talk to CNBC tomorrow. So all of this coming to a head as the President goes sort of eyeball to eyeball with those European leaders in Davos tomorrow. Will the President be in a deal making mood or will the President be in a military action type of mood? We just don't know which President Trump we're going to see tomorrow. So we'll keep our eyes on him.
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A
On what basis?
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D
Amen.
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A
Is President Trump threatening these tariffs since the tariffs that were already in effect are being decided on by the Supreme Court?
- [04:18]
C
Yeah. So this is these would be, we believe, I. E. By tariffs. That is the same law that the Supreme Court is considering right now, whether it's constitutional or not to use to use that law to impose tariffs. So the President could be imposing tariffs both here and in the Iran situation last week using a tariff authority that he claims that the Supreme Court could then shut down. We don't know. The Supreme Court is taking its time coming up with this ruling on tariffs. And meanwhile, companies, you know, the meter is running on these tariffs. Companies are paying these tariffs every day that the president put in place back on Liberation Day, as he called it last year. So this is real dollars and cents for a lot of companies. They want some resolution to this. And for the president, he wants to be able to continue to flex in terms of foreign policy by using these tariffs to push countries to do what he wants them to do. All of that really up in the air. It's just an incredible moment. Melissa?
- [05:09]
A
Yeah. Eamonn, thank you. Eamon Jabers in Washington. And do not miss Joe Kernan's interview with President Trump. That's live from the World Economic Forum in Davos tomorrow, 1pm Eastern Time, right here on CNBC. What's fascinating about this terror threat this time around is that it's not for trade reasons or economic reasons. It's for geographical reasons, the ability to actually seize a country, which is sort of strange to think about.
- [05:34]
E
Play with fire often enough at a certain point you're going to get burned. And as much as the president will say that he doesn't watch the stock market, I guarantee that he knows the S and p was down 2%, say one of the biggest one day moves we've seen in quite some time. So there's a very good chance that some of this rhetoric gets ratcheted back. But your point is well taken. But the most concerning thing for me today, forgetting about the stock market is the fact that 10 year yields are now basically 4.3% on the back of a dollar. That's seemingly starting to weaken again, which has historically something you see in like developing economies. This is not a developing economy. So a weaker dollar, weaker bond market is problematic.
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F
Well, you still, I mean, I call this the emerging market trade. The day when your currency, your stock market, your bond market sell off. This is what you see when there are political crises in emerging markets. I mean we, we have seen this and we saw this in April. And you combine that with and which is the tail and which is the dog or which is, you know, one which is leading the other. But the move in JGB yields as we've talked about, I mean this is on top of also takai with policy that is very concerning for credit investors, for people that are worried about sovereign sovereignty. And this was a Sell America day. And whether you're worried about the Danish pension fund or not, the fact that they were able to get out there were selling treasuries not based upon what's going on in Greenland, but in fact were worried about the country's finances. I think global bond yields, and I mean sovereign bond yields moving higher is a risk that equity markets have not had to encounter in a long time. Because in April, it was, you know, it was the US Market, JGB yields were under control, even though, you know, we've been talking about that for a while. So today was a day when you combined what's been simmering in the pot with US Headlines and it was a Sell America day.
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G
So I agree with both of them. I thought the bond move was particularly interesting. A couple of things. I thought it was somewhat reminiscent of Liberation Day. But we've been through one Liberation Day, and we saw that it was just. That was, you know, within a few days, that was the peak bottom.
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A
Right.
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G
And so, you know, I think people are more sort of tempered now. There was an interesting interview Sarah did with Secretary Lutnick where he seemed to say, we're not. We're, you know, the trade deal is as it is. It's not changing. He sort of made it sound like we're not breaking up. We're just. We're, you know, we're just in a fight.
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A
Right.
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G
That's how it sounded to me. The other thing that I found really interesting was the lack of move in the vix. Right. This wasn't. We got nowhere remotely close to a panic territory at all. So maybe that's coming.
- [08:02]
F
Got a couple of days.
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C
Yeah, yeah, yeah.
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G
No, I absolutely could have. I bought a tiny bit of stock today. I bought Amazon, traded below 230. I thought, all right, down nine bucks. You know, I want to be bigger. Anyway, other than that, I did nothing.
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F
Yeah.
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C
To your point about, you know, the kind of post April period when we had, you know, that tariff situation and, you know, investors got okay, I think, to some degree about what was going to be out there, what was going to be pulled back or so. But it really did, you know, take a few months to get a lot of clarity yet. And so we think about this sort of situation, we do have the cumulative nature of these tariffs. We do have, you know, a situation where if we have that level of uncertainty going forward, you might have a lot of companies kind of pull back on some of Those plans for 2026, whether it's CapEx, whether it's hiring, that sort of thing. And especially when you think about just how, you know, volatile. I guess if you just look over the last couple of weeks or so, a lot of policy, not just on foreign policy, but just think of the banks and how they traded after last week's earnings with that threat of know, a cap on credit card rates. And if you look at JP Morgan for instance, it really hasn't been able to get out of its own way since reported and it reported a quarter and gave guidance and a commentary that we all sat around saying that look pretty good. Right. And so you're seeing some of the money center banks really got hit hard towards the end of the day. So if you think about where we are, if rates are going to go higher, if uncertainty about the economy here, but also the global economy is going to kind of get ratcheted up, then at some point, if you're a strategist or you're an analyst covering a sector, you're probably going to get a bit more cautious on what you expect to happen in 2026. So again, you know, this is one day, One day does not make a trend. We did have, you know, a 6% or so sell off that came I think in November and then where we were a few weeks later, we were just kind of pressing against new all time highs.
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A
All right, let's get more on the sell off with Stuart Kaiser. He's Citi's head of equity trading strategy. Stuart, great to have you with us. A lot doesn't work if bond yields go higher here in the United States. I mean you think that, that the problem here in terms of the market sell off really started with JGBs.
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D
Yeah, most I do. I mean, I think you have, yeah, jgb, JGB yields moving higher. You did have obviously the tariff from Greenland headlines. And then also you had, look, positioning was quite long and you had a nice kind of cyclical rally to start the year. So I think investors were, we're not looking to hang around once they got that kind of bad news. But of the three, we do think the global bond yields was the number one risk. And frankly I think that's been a risk that's really been in the background probably since July of last year when 30 year yields in the US, UK, Germany and Japan all got above 3% for the first time in history, basically. So this has kind of been a simmering risk in the background and you know, decided to kind of to rear its head this week.
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A
How long do you think this lasts? I mean, when we take a look back at Liberation Day and that low that we saw, that was a great buying opportunity. We're going to look back at a day like today and think the same.
- [10:56]
D
You know, we definitely could be, you know, for now I'm kind of equating this a little bit more back into October when you had that brief kind of tariff escalation between the US and China and President Trump kind of threatened 100% tariffs again on China, we got about a 5% pullback in US equity markets. So to me, that timing is a little more consistent with where we are today than that. What we got back back in last April, you know, we'll have to see, obviously headline risk is going to be, you know, going to be quite elevated as we go into Davos, etc. But for now I think we're thinking about this a little bit more, you know, like October on the tariff side of things. You know, the JGB yields, that's something that can be a little persistent if yields start to rise and we start to see them spill over a little bit. You only had the US 30 year up 8 basis points today. You know, gilts and bonds didn't move as much. If that kind of starts to cascade, I think that is the risk I'd be worried about. That could be a little bit more persistent and a little more damaging to markets.
- [11:50]
E
Yes, I'm glad you mentioned that because I, I watch that more than anything is the fact that again, yields in Japan every day seemingly a new record high on the backdrop of a currency today notwithstanding, that's been weakening right before our very eyes. And at some point you're looking at, we saw In July of 2024, if you remember into August of that year when the whole trade unraveled. This is a little bit different this time because of the bond market. But speak to that. I mean, the fact that it can make its way to our shores very quickly.
- [12:19]
D
Yeah, you know, I agree with that 100%. I mean, I think if you go back to that past summer you're describing, that was more of like a yen carry trade unwinding and that's going to kind of operate more in the front of the yield curve. We haven't seen that metric kind start to blow out that volatile carry ratio on the yen. To your point, what we've seen is, is the 30 year and the bond, bond, bond term premium kind of, kind of continue to rise. It would definitely be concerning to us if we saw the yen volatility, you know, really kind of inflect higher because then you sort of have both the front end and the long end of the curve operating from a, from a negative risk perspective. So I agree with you. We've got our eyes on both of those things. For now. It's the long end of the curve and you're kind of watching does that, does that create a global spillover and then obviously got your other eye kind of on that yen carry trade and, and see if that starts to dislocate. But for now I think pretty comforting to see that the currency side of that hasn't been activated as a risk.
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F
Stuart. Tim, sue, where do you think we are most extended here? I mean look at the rally in gold today, look at the fall in the dollar. We've talked about JGB yields where, wherever you want to quantify or assess the credit profile. And what's going on with Takahashi. Are any of these trades seem as if they've gone too far to you? And again you talked about positioning from investors that almost seemed complacent going into this.
- [13:36]
D
Yeah, I mean it's hard to say this gone too far at this point because the trend, you know, the guy's point earlier, the Trend in the 30 year JGBs has just been, you know, very persistent. So, you know, it's hard to see where support, you know, for that trade could be in terms of us. I mean, I think Karen mentioned we haven't really seen, you know, the VIX move all that much. You know, today felt like more of a positioning, positioning type sell off. Right. It was tech, it was mag7 that underperformed and actually, you know, significantly underperformed. IWM, you actually had a day where small cap was up and cyclicals did okay. But it was really staples and IWM were the, were the two best, best performers. So I don't know, looking at it today that I would identify anything that, you know, on a tactical basis looks extremely oversold. Which, you know, for that reason I do think you want to be kind of a little bit cautious going into the overnight because I don't see like massive dislocations. You know, I think Karen mentioned Amazon moved about nine bucks. It's a nice move, but you know, that's not a, you know, just close your eyes and buy type level. And I think it's hard to identify any assets that would fall into that category, you know, sitting here today.
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A
Stuart, thank you. Stuart Kaiser. Thank you Citi. And I think that's a great point. In terms of the move lower that we did see, it was a move lower, but it didn't change anything in terms of the trend line of the markets. I mean we're so close to all time highs here. It wasn't like a big correction, I.
- [14:53]
C
Guess in days like this. And I think Karen does this too. And I think you're speaking to that with like an Amazon. You really try to get your hands around what was moving lower and why. Right. And how it was relative to let's say the broad market and then some of its peers. And you know, one of the names that stuck out to me was Taiwan Semi. We know how important this company is to so many aspects of the generative AI trade. And you think of this thing was trading I think on Friday afternoon at an all time high. But then we think about all of these other companies. You know, you mentioned an Amazon but you look at Nvidia, how that's traded, look at Microsoft, how that's traded. So we've been talking about this underperformance by many of the Mag 7 over the last few months. And so you know, I like to see is Taiwan Semi going to start to follow some of its made your customers or not? Is it going to follow it for fundamental reasons? Well, here's a company that just reported last week and had great numbers and really had good commentary. So maybe some of these names have just gotten ahead of themselves both in sentiment terms but also valuation and expectations. And so to me, I think Taiwan Semi is one of the more interesting names in the market today.
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A
All right, we got an earnings alert on Netflix shares are under pressure after hours. The streaming giant reporting earnings just slightly above expectations. A milestone 325 million paid subscribers. The conference call is underway. CNBC's Julie Borson got the latest on this. Julia. Hey, Melissa. That's right. Netflix shares are about 4 1/2% lower in after hours trading on guidance that is short of expectations. The company guiding to first quarter earnings $0.05 short of estimates and revenue a hair short of estimates and first quarter operating margin they're guiding to 32% rather than the 34% that analysts were looking for. The company also announcing its pausing its share buybacks to accumulate cash to help fund the pending acquisition of Warner Brothers. On the conference call just now, executives updating on the Warner Brothers deal. Take a listen.
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D
We're working really hard to close the.
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C
Acquisition of Warner Brothers Studios and hbo which we see as a strategic accelerant. And we're doing all this while we're driving and sustaining healthy growth. We forecast 2026 revenue at 51 billion which is up 14% year on year.
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F
It's an exciting time.
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C
You know, this is an exciting time in the business. Lots of innovation, lots of competition.
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A
Co CEO Ted Sarandos along with his co CEO Greg Peters also weighing in on some questions about the integration of the two. They're enthusiastic about Warner Brothers theatrical business and when asked about pricing as a result, changing pricing as a result of the deal, they said there is no change to their approach on pricing for Netflix. They also said they are confident about the deal getting regulatory approval. Sarandos just moments ago talking about what a big rival YouTube is. So that's sure to be part of that argument to the Department of Justice. Back over to you, Melissa. Julia, thank you. Julia Boorstin. Karen, what you make of these numbers?
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G
So I thought the numbers were pretty good. I also think of Netflix is not a great sort of estimator of their own future earnings. So I kind of discount that somewhat. They went to sort of great lengths, as Julia alluded to, about how competitive the space is, which is a message to regulators of, you know, you got to approve this deal because it's so competitive. I mean, this they're not. This Warner Brothers is so far from over. This bump is not going to get it done. They know that. But so looks like they're going to end up paying more if they want it. They seem to want it. So I'm long this hasn't been a great run for Netflix, but I'm staying long. I didn't see anything that was particularly troubling here. The valuation is a little bit stretched as it has been for a long time. The cash flow is good though.
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F
Well, you know, I'm tactically long. As of last week, I thought the set up for the earnings was really in the favor of the bulls. And I think if you can look out 12 to 18 months, there's no question that the multiple is interesting. As you get into 27 listening to Sarandos, there's two or three things that sound horrible for margin. The competitive landscape. He's emphasizing it. They're on the tape talking about production capacity they now have and they're saying we're no longer making cat videos where we're a TV company. I mean, do you want to be a TV company? And I mean, cat videos, you know, I think are fine. But ultimately the messaging from Netflix here is a 35 multiple which you were paying last year and okay to pay. It's a different time and that's the biggest issue. The earnings were fine. The earnings are going to be fine. The ad generation and so the, you know, what we're getting in terms of those ad comps north of 50% growth going to be great. Are you paying 35 times for it? I don't think so.
- [19:25]
A
Is there some degree though of playing down everything on the part of Sarandos so that the deal, I mean, it looks like it's a super competitive industry and the deal has to go through because of all these pressures that they are antitrust. He doesn't win. He's saying everything is great and we've got great margins and we got pricing power. I mean, it just doesn't work that way.
- [19:44]
G
Yeah, they want to be an under promise over deliver, right? Yeah. And that's what happened. These numbers are actually for this quarter.
- [19:51]
A
Very good.
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C
Well, there's an argument to be made that maybe Paramount goes to the Warner board and says, hey look, these guys aren't doing. I mean there's lots of different ways to think about that. Right. I mean, I would have thought coming into this you'd rather be in a position of strength. You'd rather put up a big quarter with good guidance and be able to articulate how your company is going to be able to better integrate Warner Brothers and how they're going to be able to take cost out and actually grow margins and the like. And I mean Tim's point about the advertising thing, I think that'll probably fit better in some of these new properties that they have. They've been growing it really fast. It's really great margin sort of business. But again, I think it's really hard to say. I would have. If, if I'm Sarandos and you guys would all like me to be Sarandos, there'd be no, no cat videos, Tim, in that world, you know, I probably want to have a strong source. I want to have a stronger outlook than what they did. I think there were lots of puts and takes for both.
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E
What's it.
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C
I'm, I think YouTube cat videos. That's what the.
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F
It's not a euphemism for anything.
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E
Guys, I'm hoping that it's not your job. I thought the quarter was fine. I quarter was real. I think the guide scared people and the fact that they talked down margins. But listen, I said last week I thought it set up really well into earnings. That's clearly wrong. But I think the sell off is now it's completely overdone. To the downside.
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A
Coming up, we'll keep watching Netflix after hours bringing the headlines from the company's conference call as we get them. Plus the details reunited. The latest quarter and an exclusive interview with CEO Scott Kirby on the airline's next move. But first, lunging tamp. Sending nat Gas prices is spiking. The next move in energy as millions face the blast of winter weather. Don't go anywhere Fast money's back into.
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- [23:23]
E
Sharply higher pulpit ung chart and I'm not advocating to get into this because it's a very poorly but when you see a move of this magnitude today, I mean it tells you everything you need to know in a past life. We call natural gas the widowmaker and that's exactly for things like today. Now the weather will pass and this will pass as well. However, the energy trade will not pass. I think this is just one more reason to like what's going on in the energy space.
- [23:49]
A
There's an economic impact though. Theoretically for a prolonged cold streak. People aren't going out as much, they're not shopping, maybe as much. They're not, you know, doing all these things.
- [23:59]
F
I think that's right. I mean, structurally, it's hard to feel like anything has changed. But there's no question this has been an extreme winter across actually a lot of parts of the world and the cyclicality of that will affect. There's also been an element of where lower gas and energy prices have been a tailwind to a lot of economies, especially Europe that about, you know, certainly go all the way back to Ukraine invasion where, you know, biggest impact on Germany outside of defense concerns was the impact on energy. So higher natural gas prices not great. Cheniere LNG is a name I think is very interesting here after you've priced in a lot of bad news, overcapacity and I think actually was cheap going into this, there's one to look at yet.
- [24:37]
A
Coming up, a bright spot in today's sea of red why shares of intel buck the trend and where the traders see that name heading next. Plus all the headlines from Netflix, this conference call, what one top analyst is hearing and the latest details on its Warner Brothers Fed. You're watching Fast Money live in the NASDAQ marketsite in Times Square. Back right there behind you.
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- [26:57]
E
I don't know.
- [26:57]
A
What's the D word?
- [26:59]
C
Dumb. Oh, this is a gentle one of the dumbest moves I've seen in the stock in a very long time. You think about that upgrade. I mean here's analysis been bearish and again it's probably was easy to do so on fundamental reasons and something changed obviously this summer when the government took a stake and then obviously this company, you know, just said they're going to get into manufacturing. But on the PC front, I do think it's worth noting that obviously, you know, intel is a huge customer of Dell. Dell is down 35% in the last month and a half and Intel's up 35% in the last month and a half. So when you think about this disconnect, you think about what analysts are talking about with PC demand. It has not been apparent. I mean Dell told us that when they reported last month and if you're waiting for a AI PC upgrade cycle, I wouldn't hold you back breath.
- [27:46]
G
Yeah, so Dell, I mean the PC refresh, which I had been much more optimistic about than was warranted, hasn't happened. But for Dell, not only did not happen, they lost share in the pieces that did get sold. So I don't know that I would call this dumb. I agree that the valuation here seems stretched and a lot of good things priced in.
- [28:06]
A
For Intel.
- [28:07]
G
Yeah, for Intel I know CPU demand if, you know, if PCs really take off. But, but I would not be a buyer here.
- [28:13]
A
And D of course is the D.
- [28:15]
G
Is the, it's a letter in acronym.
- [28:17]
B
Bidang, Bideng, Badang.
- [28:20]
G
Yeah.
- [28:21]
A
Meantime, we did see huge gains in the memory stocks today and they seem.
- [28:27]
F
To be immune from the broader sell off. Also, if you look at the semiconductor index, the stocks, smh, whatever you're tracking, unlike the NASDAQ or triple qs or the spies which went through the 50 today, we talked about the start of the show. The semiconductors have not and in fact, the semiconductors chart looks a little different here. And it has been more resilient because of this view of different parts of the memory complex, which I don't know how you don't get back to their commodities. And at some point there's a production response because that's truly what it says. It does tell you demand is not abating.
- [29:02]
A
Yeah.
- [29:03]
E
Guy Micron was a $90 stock in March. So less than a year ago, it's trading $365 today. Forget about valuation. It's not about that. It's your belief that somehow a highly cyclical, highly commoditized industry is now no longer that. And I don't believe that to be the case. It's not different this time.
- [29:22]
A
Coming up, all the headlines from the Netflix conference call. What's moving the stock after hours and where shares are heading next? More fast Money into. Welcome back to FAST money. Stocks dropping to start the holiday shortened week. Major averages all posting their worst day since October. The dow falling nearly 900 points. The S&P down 2% falling below its 50 day moving average for the first time since December 18th. And the NASDAQ leading the losses down 2.4%. Shares of Lululemon dropping six and a half percent today. Founder Chip Wilson reportedly looking to oust private equity firm Advent from the board in an ongoing proxy fight launch late last month. Separately, Lulu also pausing online sales of a new workout line of leggings after complaints the material is too sheer and not. Okay, this is in the prompter. It's not squat proof.
- [30:14]
E
You didn't say that.
- [30:15]
A
I did. You did not say. I swear it was in the prompt.
- [30:18]
F
She had to read it.
- [30:18]
A
But that's a complaint.
- [30:20]
E
What does that even mean?
- [30:20]
C
What does that even mean?
- [30:21]
E
What does it mean?
- [30:22]
A
It's called the Go low line.
- [30:24]
B
Right.
- [30:24]
A
It's two shears. They've had this.
- [30:26]
F
But what happens when you squat?
- [30:27]
E
Well, it's not squat proof.
- [30:28]
A
Maybe it becomes too sheer.
- [30:31]
F
I guess.
- [30:31]
A
It's a big problem.
- [30:33]
F
I guess. Be careful of the squat.
- [30:34]
A
You want to be able to be careful.
- [30:36]
F
New Year's resolutions are out. I think there's probably more squats in 26, especially in January.
- [30:42]
A
Squats are seasonal.
- [30:43]
D
Maybe.
- [30:45]
F
Anyway.
- [30:45]
A
Yeah, we can go on, but we won't promise another check on Netflix. Here, the stock around the lows of the after hour session following the streamer's narrow earnings beat. The conference call wrapped up a few minutes ago. Bring in Rich Greenfield of LightShed Partners, who is on the call. He's got A buy rating on Netflix stock. Rich, great to have you with us.
- [31:04]
B
I don't know how I follow that.
- [31:06]
F
Last segment, but not fair.
- [31:09]
A
You don't have to talk about squats. What, what did you make of this quarter and what did you hear from Ted Sarandos about this deal that they.
- [31:18]
B
Are absolutely committed to getting to close? Right. Like they want this transaction. They are. Obviously they showed flexibility in adjusting to all cash. I think that's great. Makes it easier and faster to move this forward. From a proxy standpoint, they'll probably get a vote in March or April. And look, I think this really, you see how focused Netflix is on winning this. I mean again, nobody thought they were a bidder. And look, I think even listening to Ted and Greg on the call today, they were pretty clear that when this all started they were sort of anti acquisition as they got into it and they started doing due diligence on Warner Brothers. They believe this was something they had to have. And so I think that this is what makes it really hard. You know, you saw the commentary in the proxy this morning from Warner Brothers. It's going to be really hard for Paramount to come back because there is more value to the Discovery global that to be spun off piece of this that Netflix isn't buying than what Paramount had talked about. They had said it was worthless. Warner Brothers has said it's worth three, four, five, maybe even $6 a share there. That makes it very hard for Paramount to come back unless they're willing to really overspend on this, like to do something truly crazy from a valuation standpoint. And I don't think that makes sense for Paramount. So Paramount should just, I think pack it in and go do something else with their cash rather than overspend to buy Warner Brothers. I doubt they'll do that, but I hope they do for Netflix. I think they're really focused on winning and it was interesting. They are far more confident in regulatory approval than what investors currently. When I talk to investors, they do not have Netflix's level of confidence on the regulatory side. And that was interesting to hear today.
- [33:03]
G
Richard's Karen so are you happier with Netflix? Let's say there were no Warner Brothers deal. Let's say it were just continue to remain independent. Do you like Netflix now with a combined, let's say they pay up some more from here, which I think they will have to do to close or would you have preferred old Netflix?
- [33:24]
B
Look at this price level, Karen, I'm not sure it matters. You know, you've sort of been tagged for right now, you're tagged for doing a large deal. Netflix has never done a large deal. So you're sort of in that deal hell right now or deal limbo, paying a couple of dollars more in the scheme of Netflix, I mean, they just, they're going to generate $11 billion of free cash flow at least in 2026. So I don't think paying a couple dollars more is all, is not going to skew this. I think the question is, is, does Paramount come out with some, you know, 35, 37, like do they just literally go for broke and even though it's too much and too overvalued to do it. But anyway, and I think Netflix will pay any price. So, Karen, I think there is a price where Netflix walks away. I think they really do want this. So I think you're in this position now where Netflix wins within this range of a couple of dollars. The stock's going to go up over the next year. They end up losing because of a knockout bid from Paramount. Stock is going up because it shouldn't be this far down on this process. So I think Netflix ends up being sort of a win win. Which do I prefer? I mean, look, I think from the power that, you know, if you think about sort of the, what they can do with Warner Brothers, I think it's hard not to be attracted to the opportunity. If you think back to Disney and Bob Iger and what he was able to do, he made the acquisition of Lucas Pixar and Marvel and those content acquisitions were transformative. I think of Warner Brothers as sort of being a similar transformative acquisition. Just imagine what Netflix can do with all of that IP over the course of the next decade.
- [35:02]
F
Rich, before we started talking about squats, which I'm guessing you're wearing good old fashioned sweatpants in the gym.
- [35:08]
B
I'll do squats with you anytime. Tim, let's go.
- [35:11]
F
Wow. Let's take this offline. No, I think that's great. So, but the conversation was more about are some of these headlines that we're seeing out of Netflix, Are they dressing for antitrust? Are they dressing for selling the Warner Brothers board? I mean, they're talking about here how excited they are and we know they are, but about what they're going to do with their theatrical distribution business, for example. So I'm just curious, should investors kind of read through some of this, including the things that we thought were margin negative and, and know that some of this is window dressing?
- [35:41]
B
Look, we call Ted out on it directly. Ted Sarandos the co CEO of Netflix, we called him out in a piece we wrote this morning. You know that he's made very public comments that consumers don't hate movies, they hate having to go to theaters and the long windows. And he's now talking about the fact that they're going to buy Warner Brothers with 45 day windows enacted for all of those Warner Brothers movies. Those obviously seem very much, you know, like they don't make sense when you put them back to back. He literally came out and responded to that question we had on the conference call and said, look, when I made those comments before, we weren't in the theatrical business. We make this acquisition, we are in the theatrical business. And just like we've evolved on advertising, evolved on live programming and evolved on sports, we're going to evolve on theatrical. You know, obviously, you know, know, who knows ultimately what happens? I mean there is this larger question. Forget about what the window is today, Tim. The larger question is consumer behavior is shifting. Forget Netflix, forget Warner Brothers. People are going to the movies far less than they used to. Attendance, meaning butts in seats are down 50% from pre pandemic times, meaning 2019. So whether or not the window stays at 45 days, the whole theatrical business needs to change with or without Netflix flicks.
- [36:56]
A
Rich. Thank you, Rich. Melissa, thanks Watson. Butts in the same segment. I mean, who would have thought? Coming up, we're watching United Airlines after its latest earnings report. The details from those results and what CEO Scott Kirby has to say about the quarter. The exclusive interview when Fast Money returns. Welcome back to Fast Money. United Airlines shares are higher by about 3% after hours. The company posting better than expected earnings for Q4, saying 2026 is off to a strong start. For more on the results, CNBC's Philippeau joins us with United CEO Scott Kirby. Phil.
- [37:36]
B
Thank you, Melissa.
- [37:37]
D
Scott, listen, set us up by explaining.
- [37:39]
B
The results from the fourth quarter where you beat the street. I want to talk about what you're seeing right now. How strong is the demand you've noticed even in this short three week window of 2026?
- [37:49]
H
Yeah, well, I start by saying thank you to the entire United team for a great 2020, 25. A lot of headwinds in the industry, but we have a no excuses culture at United. We're the only airline in the country that managed to grow EPS year over year. But as we enter 2026, there's really cause for optimism. We're off to a really strong start. Demand is really strong. The last two weeks have been the first and second highest booked revenue weeks in our entire history. But business demand is up well into the double digits. In fact, the five biggest books booking days for business in our entire history have all happened within the last two weeks. Demand is off to a really good start.
- [38:24]
B
Premium revenue up 9%. Basic economy up 7%. But you've heard the talk of the K shaped economy. Are you worried about the basic economy consumer, if you will, slowing down or not being able to keep up or showing cracks?
- [38:39]
H
Well, you know, United we are, we do index more to the premium. So the other leg of the K economy and that's helped us do well. But we've focused on the entire airplane in the entire cabin and winning share and we've been winning share. And so our main cabin is not doing as well as premium, but it's still doing pretty well. And so we've been winning share there and we've been investing in that. Like one of the cool things we just announced this week. We're the only airline in the country that has ovens in coach and we're going to have hot meals where customers can order in advance in coach. So we've been investing for the entire cabin and that's paying off with winning customer share across the board.
- [39:13]
B
You're also bringing in what about 120 aircraft this year. Most of those are going to be single aisle, but you're also bringing in 787 Dreamliners and you've also converted some of your order for the larger variant of the Dreamliner. Is that a reflection of the fact that you want to up gauge as much as possible coming out of the.
- [39:31]
H
U.S. well, we are trying to up gauge and it is exciting. Next year we're going to take a 100 narrow bodies, 20 wide bodies. That 20 wide bodies, by the way is the most any US airline has taken in a single year since 1988. So we are excited about that growth. The up gauge to the 77:10, you know, is really somewhat reflective of a demand environment where we want higher gauge. We have limits on our ability to grow in a place like Newark. Only two run, one set of parallel runways and getting major gauge. But it's also really just tactical about where we're going to fly the aircraft. So those are sort of normal tactical adjustments that we make.
- [40:04]
B
The tariff headwind was one that you.
- [40:07]
D
Felt in the first half of the year. All airlines felt it.
- [40:09]
B
Are you worried about what you're hearing between the US and Europe over Greenland and a possible another tariff war?
- [40:15]
H
You know, we've spent A decade trying to build a brand loyal airline for customers that's the best airline in the history of aviation. And, and what that means is that there's ups and downs all the time. There are a lot, you know, know of issues that happened in 2025 and yet the team had no excuses, culture and still deliver. When you build a brand loyal airline like that, you can kind of get through these events that are going to happen. That's just part of our business. As I look at, at the full year, you know, our guidance, we always, we also guide conservatively. And even with this, you know, our guidance is probably more conservative than normal as we had.
- [40:48]
D
And you're still expecting a record year potentially profit wise.
- [40:51]
H
Yeah, we are, are expecting it. You know, certainly if demand continues anywhere close to what it is now, you know, our guidance will be conservative quickly.
- [40:59]
B
On the corporate side. If there is a tariff war, does that reflect in corporations saying let's dial back on travel?
- [41:06]
H
You know, it can, but it tends to be short lived. Like so, you know, Liberation Day last year, you know, we had a few weeks where bookings kind of pulled back, particularly from corporate, but it was only a few weeks when they started recovering again. And so, so these things tend to have a pretty short impact in the booking window. And I would guess the same will be true this year.
- [41:23]
D
Scott Kirby, CEO of United Airlines.
- [41:25]
B
Hey, they're celebrating 100 years. New livery on the planes back here down in Houston. Guys, we'll send it back to you.
- [41:31]
A
All right, Phil, thank you. Bill LeBeau with United CEO Scott Kirby. Tim, you like this trade?
- [41:37]
F
I like the trade. I like airlines. I like Delta more. I think Delta is a $100 stock in the next 12 months. What I love about what Delta and United are doing is you may not like it as a passenger, but they're extracting money from every part of the cabin. The premium, the front of the bus, the demand that he's talking about and the margin that's there is extraordinary. They've never been run better. I think airlines are yet to really rerate from pre April where they were starting to rerate. I think that's a case that the free cash flow yields on these companies are great. It's around eight and a half times forward on United. I think you can own both, but I prefer Delta Ovens and coach.
- [42:12]
A
That could be a big draw.
- [42:13]
E
I like my warm nuts.
- [42:15]
A
I don't think they're going to be warming nuts in those ovens in coach, but that's my guess. He said meals, do you do it yourself.
- [42:27]
F
I'll say this quickly.
- [42:29]
E
Listen, great quarter. I mean, and I would have said this to him, first of all, their videos are great. The safety videos are entertaining as hell. But when you guide the first quarter for a dollar to a dollar and a half, why bother? I mean, that to me is like, like, you know, what full year guidance is what it is first quarter we're not going to guide. Valuations are always reasonable. The question is, are we sort of at the other end of the spectrum here. If unemployment rate starts to move, airlines will suffer from that.
- [42:53]
A
Coming up, the surge in structure, the Biopharma stock on a huge tear this year. The reason for today's move. And can the stock push even higher? More fast money into. Welcome back to Fast Money. Structure Therapeutics getting another boost today after Guggenheim hiked its price target to $140 from $90 a share. Analysts expecting the biotech company's phase three oral GLP1 drug and as its phase one Amylon agonist, both to be commercially successful. The new price target implies a move of more than 50% higher from today's close. Structure is already up 30% this year. It is the G and exactly.
- [43:37]
G
So easy to get.
- [43:39]
A
At least you follow the rule there. Yes, but do you think that's, I.
- [43:42]
G
Mean, well, I was actually, you know, I just first saw just the headline 140 and I thought, oh, it must be on a, you know, that must be on a takeout expectation or something like that. This is not what that was. As you said, this is just them getting to, you know, commercial viability and what they think they can do. I, and I know Guy, you think this too. It's not a crazy thought that this is a target that is right for somebody. I know you did the interview with the CEO last week where he, I have to think his dance card was absolutely full of the JP Morgan conference. And I know he didn't want to say anything about it, but how could it not be? So I do think a takeout is likely. I don't know possible for sure.
- [44:22]
E
If I knew how to jam structure in my junk, trust me, it would have been there. But unfortunately I couldn't do it. With that said, good for Karen for getting it into debang or whatever bang is going on because it makes a lot of sense and I do. $6 billion company. You look, in my opinion, by sometime at the end of, towards the end of this year, it's a double from here. And the fact that they got through that move to 70 bucks and now There's a proof of concept. This makes them far more valuable now than when they were $20 stock, when people were sort of on the fence. So I think it goes higher.
- [44:53]
A
You see this go higher. Does that make you think Novo?
- [44:56]
F
Well, it. No, look, there's an argument that actually takes the valuations of these others higher that the addressable market is that much more secure. But we, you know, this has of the conversation. Is this now getting to a place where you have real players, I should say players that are able to extend the move that Lillian Novo have had. I'm long Novo. This doesn't scare me.
- [45:18]
G
What if Novo is the buyer?
- [45:20]
A
Oh, that's interesting. Yeah. They did try for Metsara very hard and they did not get it. So. Yep. Up next, final trades. Time for the final trade on this Tuesday. Let's go around the horn. Tim Seymour.
- [45:40]
F
Yeah, we flew around a lot of topics tonight on this desk, but the topic of airlines I think is one that will continue to re rate. I like Delta.
- [45:48]
A
Karen.
- [45:49]
G
Yes, Missy. Congratulations on your additional show.
- [45:51]
A
Thank you.
- [45:52]
G
You didn't seem nervous. I think you did an excellent job.
- [45:55]
F
She can get through this.
- [45:56]
G
I mean, you right. So Netflix. I would wait a day or two, but I do like it here, Dan.
- [46:03]
C
A little girl's all grown up. You know what I mean? Like, we were all probably on her first show that you hosted.
- [46:09]
A
Ever.
- [46:10]
F
Ever.
- [46:10]
A
All of us, like, yeah, 18 years ago.
- [46:12]
C
Yeah.
- [46:12]
D
How about that?
- [46:13]
A
Yeah.
- [46:14]
B
Intel.
- [46:14]
C
I would not chase it into earnings.
- [46:17]
A
Guy feeling very. Wait, wait. No potty mouth in the final trade.
- [46:20]
E
I didn't see such a drink.
- [46:22]
A
We had a loud potty mouth tonight.
- [46:24]
F
Disappointing.
- [46:25]
E
Okay, then I won't say it.
- [46:26]
A
You only have 15.
- [46:27]
E
Transocean comes out rigged.
- [46:29]
A
All right, thanks for watching Fast Money. See you tomorrow on Overtime Mad Money, which Jim pretty much starts right now. All opinions expressed by the Fast Money participants are solely their opinions and do not reflect the opinions of CNBC or its parent company or affiliates and may have been previously disseminated by them on television, radio, Internet, or another medium. You should not treat any opinion expressed on this podcast as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of an opinion. Such opinions are based upon information the Fast Money participants consider reliable, but neither CNBC nor its affiliates and or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Fast Money disclaimer, please visit cnbc.com fastmoneydisclaimer@ Capella University, we believe accessible education can make a difference. That's why we offer scholarship opportunities to all eligible students. Un futuro diferente estam mass serca de lo que cres con Capella University. Learn more at capella. Edu.