Raphael Stevens

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CNBC’s Jim Cramer on Wednesday said bitcoin could experience a rally over the next few months, though it could be years before it reaches its old highs.
“The charts, as interpreted by Tom DeMark, suggest that bitcoin could have a nice relief rally over the next few months,” the “Mad Money” host said.

CNBC’s Jim Cramer on Wednesday said bitcoin could experience a rally over the next few months, though it could be years before it reaches its old highs.
“The charts, as interpreted by Tom DeMark, suggest that bitcoin could have a nice relief rally over the next few months, even if he doesn’t see it revisiting its old highs for years or even decades,” he said.

“I can’t countenance buying crypto here, but if you still own some and you want out, I’m betting that from this, if you’re another dip down, you might get a better price to get out,” he added.
The cryptocurrency market has had a rough year as investors spooked by inflation and the Federal Reserve’s interest rate hikes have sold off their assets, leading the crypto market to downturn. Bitcoin, the world’s largest cryptocurrency, has fallen far from its highs reached last November, with some predicting it will plunge even further.
According to the “Mad Money” host, DeMark has a 13-step buy and sell countdown that helps him identify tops and bottoms in bitcoin. A certain number of sessions go in the same direction and eventually the buying or selling exhausts itself, he said.  
In his breakdown of DeMark’s analysis, Cramer examined the daily chart of Bitcoin from April of last year through today. Here’s the chart:

Arrows pointing outwards

Cramer said that a notable aspect of the chart is that bitcoin never had a downside retracement of more than 50% on a closing basis since 2020 – until a few months ago.

“According to DeMark, when you get a decline this ugly … it often does structural damage to the asset in question,” he said. “If you’re thinking long-term, DeMark says that it could take many years for bitcoin to come near its old highs, maybe even decades. It’s possible we’ll never see them again,” he added.
However, that doesn’t mean bitcoin can’t bounce, according to Cramer.
For more analysis, watch the video of Cramer’s full explanation below.

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Mark Zuckerberg told CNBC’s Jim Cramer that Meta Platforms is in a position to spend extensively on long-term research.
The metaverse should usher in a massive economy, he said.

Meta Platforms CEO Mark Zuckerberg told CNBC’s Jim Cramer on Wednesday that the metaverse could be a considerable part of the social network operator’s business in the second half of the decade.
“We hope to basically get to around a billion people in the metaverse doing hundreds of dollars of commerce, each buying digital goods, digital content, different things to express themselves, so whether that’s clothing for their avatar or different digital goods for their virtual home or things to decorate their virtual conference room, utilities to be able to be more productive in virtual and augmented reality and across the metaverse overall,” he said.

Investors have cut the company’s market capitalization in half this year as growth has slowed and the number of its daily active users declined sequentially for the first time between the last two quarters. Zuckerberg has been increasingly directing the company toward what he views as the next generation of content, a virtual world where people can buy and sell digital goods for avatars who can communicate with one another. The company’s ticker symbol changed from FB, a relic of its history as a pure social media provider, to META earlier this month.
But the company’s investment in augmented reality and virtual reality dates back to 2014, when it paid $2 billion for headset maker Oculus VR. Shipments of headsets have failed to outnumber shipments of PCs or smartphones. Zuckerberg expressed optimism about the performance of its current-generation Meta Quest 2, which starts at $299.
“Quest 2 has been a hit,” Zuckerberg told the “Mad Money” host.
“I’ve been really happy with how that’s gone. It has exceeded my expectations. But I still think it’s going to take a while for it to get to the scale of several hundreds of millions or even billions of people in the metaverse, just because things take some time to get there. So that’s the north star. I think we will get there. But, you know, the other services that we run are at a somewhat larger scale already today.”
Experiences in the metaverse can be more immersive than text, photos or videos, which are pervasive on Meta’s Facebook and Instagram, and so it will be a big theme for Meta over the next decade, Zuckerberg said.

Zuckerberg met with Cramer in the metaverse. The Facebook co-founder said such experiences can foster a sense of being together, even if people are physically on the other side of the country. He said it’s possible to make eye contact, which isn’t guaranteed on video calls, and use spatial audio that allow for quiet side conversations.
The technology “basically adds up to making it deliver this realistic sense of presence,” he said.
Bringing that to customers over the next several years will require Meta to release a stack of hardware, software and experiences.
“We are at this point, you know, a company that can afford to make some big long-term research investments, and this is a big focus,” he said.
He expects the economy around the metaverse to be massive, he said.
Meta Platforms had 3.64 billion monthly active people across its family of applications in the first quarter, up 6% year over year. WhatsApp reached 2 billion users in 2020, and it’s also an area where Zuckerberg sees the potential for growth.
“You know, our playbook over time has been build services, try to serve as many people as possible — you know, get our services to a billion, two billion, three billion people, and then we basically scale the monetization after that,” Zuckerberg said. “And we’ve done that with Facebook and Instagram. WhatsApp is really going to be the next chapter, with business messaging and commerce being a big thing there.”

AI making recommendations, similar to TikTok

In addition to its metaverse spending, Meta is investing heavily in the development of artificial intelligence, which can bolster advertising — the source of around 97% of revenue — and the company’s existing applications, Zuckerberg said.
“We’re basically shifting from having most of the content that you see in Facebook and Instagram come from your friend or follow graph, to now, you know, over time, having more and more of that content just come from AI recommendations,” Zuckerberg said. “And as the AI recommendations get better, you get access to, you know, not just the content from the people who you follow but the whole universe of content that’s out there.”
It’s a concept that TikTok, owned by China’s ByteDance, used to propel itself to a billion monthly active users. Meta sought to respond to the rapid growth with the introduction of its Reels feature of Instagram in 2020. Reels makes up over one-fifth of the time people spend on Instagram, Zuckerberg told analysts on Meta’s first-quarter earnings call in April. Now he expects AI enhancements to make Reels more compelling to Instagram’s users.
“Our AI system can choose based on what it knows about you and what you personally are going to be interested in and learn about, what you want to see,” he said. “So as we get better at that, you know, our engineers are shipping improvements to the models every week. We check something and, you know, relevance goes up by a few percent. And then we repeat and do that the next week. And, you know, this is just a huge part of what I’ve always focused on in running this company, is getting the velocity to be very quick, so we can keep on making fast improvements to this.”
Meta is also investing in hardware for AI, alongside other large technology companies, such as Alphabet and Microsoft.
“We just brought online the AI research supercluster, which, you know, we believe is going to be the fastest AI supercomputer when it’s fully built out later this year, so that our researchers can build new and bigger models to both make the ranking and recommendations across our social media services and ads better.”
The company will slow its investment in AI in the event of a recession, Zuckerberg said.

Comments on Sandberg’s departure

Zuckerberg addressed questions around the departure of Sheryl Sandberg, the company’s operating chief. Sandberg built up Facebook’s advertising business, making its 2012 initial public offering possible. The Wall Street Journal reported that she left after Meta began a review of her use of company resources for wedding planning. A Meta spokesperson told the newspaper that internal investigations of Sandberg didn’t have anything to do with her choice to step down.
“I don’t think any of the stuff that’s been reported contributed to her leaving the company,” Zuckerberg said. “Of course, you’d have to ask her about that. But what I can say is that I have nothing but gratitude for the amazing work that she’s done at the company. She’s going to stay on our board. She’s a key person. She’s a close friend.”

— CNBC’s Jonathan Vanian contributed to this report.
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American Airlines says it will drop service to Islip, N.Y., Ithaca, N.Y., Toledo, Ohio, and Dubuque, Iowa.
The airline cited a pilot shortage for its decision.
United and Delta have also trimmed service to some smaller cities recently.

American Airlines Embraer ERJ-145 regional jet aircraft as seen on final approach landing at New York JFK international airport in NY, on February 13, 2020.
Nicolas Economou | Nurphoto | Getty Images

American Airlines plans to drop service to four U.S. cities in September, including Dubuque, Iowa, which will lose scheduled commercial air service altogether.
The Fort Worth-based carrier blamed the service cuts on a shortage of regional pilots. American, United Airlines and Delta Air Lines have each scaled back service between some smaller cities and their hubs, citing a lack of aviators.

The four cities — Toledo, Ohio; Islip, N.Y.; Ithaca, N.Y., and Dubuque — will each lose service from American on Sept. 7, after Labor Day.

“We’ll proactively reach out to customers scheduled to travel after this date to offer alternate arrangements,” American said in a statement.
The airports were served by American Airlines’ regional airline subsidiaries. Last week, those carriers jacked up pilot wages in an effort to stem the shortfall, which comes after several airlines shed aviators during the pandemic only to be caught flat-footed when travel demand snapped back.
Holly Kemler, spokeswoman for Eugene F. Kranz Toledo Express Airport, said the airport staff “are incredibly disappointed” by American’s decision.
“Please note, this decision was made solely by the airline, primarily due to a shortage of regional pilots,” she said. “Unfortunately, we understand this is a current continued trend in the aviation industry.”

Kemler said the airport is still served by sun-seeker-focused airline Allegiant.
American Airlines said the cities will still be served by flights at other airports that are between 45 miles and 120 miles away.

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Federal prosecutors have unveiled a new charge against Nikola founder Trevor Milton related to his purchase of a Utah ranch.
Milton allegedly misrepresented the state of Nikola’s business to convince the seller of the ranch to accept a company stock option as partial payment.
It’s the fourth charge against Milton, who maintains his innocence.

CEO and founder of U.S. Nikola, Trevor Milton speaks during presentation of its new full-electric and hydrogen fuel-cell battery trucks in partnership with CNH Industrial, at an event in Turin, Italy December 2, 2019.
Massimo Pinca | Reuters

The founder of electric truck start-up Nikola Motors, already under indictment for multiple counts of fraud, is facing a new charge related to buying a Utah ranch — a purchase he paid for in part with an option to buy Nikola stock.
Federal prosecutors in the Southern District of New York on Wednesday charged Trevor Milton with a new count of wire fraud, alleging he misrepresented the state of Nikola’s business to convince the seller of the Wasatch Creek Ranch to accept an option to buy Nikola stock as partial payment for the ranch around April 2020.

The new count is the fourth federal charge against Milton. In July 2021, a federal grand jury charged Milton with three counts of criminal fraud for allegedly lying about “nearly all aspects of the business” to bolster sales of the electric vehicle company’s stock.
The option to buy Nikola stock would have allowed the seller of the ranch, Peter Hicks, to buy more than 500,000 shares of the company at what was then a discounted price of $16.50 per share, prosecutors charge.
Nikola’s stock price briefly surged to more than $60 in June 2020, but fell sharply after Milton was forced out of the company amid allegations of fraud in September of that year. The company shares were trading at $5.60 late Wednesday.
Attorneys for Milton did not immediately respond to a request for comment.
Prosecutors charge Milton built an intricate scheme designed to pump up the company’s stock for his own gain by lying about Nikola’s products, technology and future sales prospects. They accuse him of using Nikola’s deal to go public via a special purpose acquisition company to target amateur retail investors, some of whom lost hundreds of thousands of dollars.

In his civil suit against Milton, Hicks alleged that Milton made similar representations to convince him to accept the stock option in payment for the ranch.

Many of the allegations regarding Milton’s allegedly false and misleading statements were first uncovered by short seller Hindenburg Research.
Milton, who’s still awaiting trial, has maintained his innocence. He pleaded not guilty to the criminal charges in a New York courtroom last year.
However, following an internal investigation, Nikola said in February that it found its founder made several inaccurate statements from 2016 through the company’s IPO that misled investors in June 2020.
In December, Nikola agreed to pay the Securities and Exchange Commission $125 million to settle charges it defrauded investors by misleading them about its products, technical capacity and business prospects.
Nikola was the catalyst for electric vehicle start-ups to go public through SPAC deals. Investor interest in such companies soared after Tesla’s stock skyrocketed to make it the world’s most valued automaker by market cap in 2020.

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Alibaba shares are still lower year-to-date despite a recent rebound in Chinese internet stocks.
Across five major e-commerce platforms’ GMV, Alibaba’s market share fell by 6% in the first quarter versus the fourth, according to Bernstein analysis published early this month.
“Our top picks in the sector remain JD, Meituan, Pinduoduo, and Kuaishou,” Bernstein analyst Robin Zhu and a team said in a report this week. “Interest in Alibaba has persisted, chiefly from overseas investors, while feedback on Tencent has become very negative.”

Across five major e-commerce platforms’ GMV, Alibaba’s market share fell by 6% in the first quarter versus the fourth, according to Bernstein analysis.
Str | Afp | Getty Images

BEIJING — Alibaba was once the poster child for investing in modern China. Now the e-commerce market that fueled its growth is slowing, while new players eat away at Alibaba’s market share.
That’s reflected in the stocks’ performance since an apparent bottom in sentiment on major Chinese internet names in mid-March.

Pinduoduo shares have more than doubled since then, while Meituan shares have climbed 80%, and JD shares are up more than 50% in Hong Kong. Kuaishou is up by nearly 47%.
Alibaba shares have climbed about 42% in Hong Kong, and 33% in New York. Tencent is up only about 25%.
But except for Kuaishou and Pinduoduo, the stocks are still down for the year so far.
“Our top picks in the sector remain JD, Meituan, Pinduoduo, and Kuaishou,” Bernstein analyst Robin Zhu and a team said in a report this week. “Interest in Alibaba has persisted, chiefly from overseas investors, while feedback on Tencent has become very negative.”

Bernstein expects consumer and regulatory trends to favor stock plays in “real” categories — e-commerce, food delivery and local services — over “virtual” ones — gaming, media and entertainment.

A slowing e-commerce market

Over the weekend, the 6.18 shopping festival spearheaded by JD.com saw total transaction volume rise by 10.3% to 379.3 billion yuan ($56.61 billion). That is a new high in value — but the slowest growth on record, according to Reuters.
Merchants who spoke with Nomura said Covid lockdowns disrupted apparel production, while consumer demand was generally low, according to a Sunday report. High-end product sales fared better than mass-market ones, the report said, citing a merchant.
Alibaba, whose main shopping festival is in November, only said it saw growth in gross merchandise value from last year, without disclosing figures. GMV measures total sales value over a certain period of time.

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“Online retail growth is likely to be slower this year than in 2020 and 2021, and its gain in penetration rate may be weaker than the average of 2.6 [percentage points] during 2015-2021,” Fitch said in a report last week.
“This is due to a larger base, deeper integration of online and offline channels … and weaker consumer confidence on concerns of a slowing economy and rising unemployment,” the firm said. Fitch expects online sales of food and household goods to perform better than that of apparel.
In May, online retail sales of goods surged by more than 14% from a year ago, but overall retail sales fell by 6.7% during that time.
Fitch expects China’s retail sales to only grow by low single digits this year, versus 12.5% in 2021. But the firm expects online sales of goods can expand its share of total retail goods to around 29% in 2022, versus 27.4% in 2021 and 27.7% in 2020.

New players grab Alibaba’s market share

In that online shopping market, new companies have emerged as rivals to Alibaba. These include short-video and livestreaming platforms Kuaishou and Douyin, the Chinese version of TikTok also owned by ByteDance.
Across five major e-commerce platforms’ GMV, Alibaba’s market share fell by 6% in the first quarter versus the fourth, according to Bernstein analysis published early this month.
JD, Pinduoduo, Douyin and Kuaishou all grew market share during that time, the report said. Douyin’s GMV share increased the most, by 38%, although its combined market share with Kuaishou is only about 12% among the five companies.

Read more about China from CNBC Pro

In a sign of how Kuaishou has emerged as its own e-commerce player, the app in March cut off links to other online shopping sites.
“Their recent decision to cut off external links to [Alibaba’s] Taobao and JD shows that times have changed,” Ashley Dudarenok, founder of China marketing consultancy ChoZan, said at the time of the news. “Taobao is no longer the only main battlefield for e-commerce.”
In the quarter ended March 31, Kuaishou reported GMV on its platform of 175.1 billion yuan, a surge of nearly 48% from a year ago.
Last month, ByteDance’s Douyin claimed its e-commerce GMV more than tripled in the last year, without specifying when that year ended. Douyin banned links to external e-commerce platforms in 2020.
While Douyin dwarfs Kuaishou by number of users, what’s different for investors wanting to play the short-video e-commerce trend is that Kuaishou is publicly listed.
Even in JPMorgan’s prior call in March to downgrade 28 “uninvestable” Chinese internet stocks, the analysts kept their only “overweight” on Kuaishou based on “management’s sharper focus on margin improvement, higher gross margin, larger user base and less competition risk.”
Users like cosmetics livestreamer Zhao Mengche often describe Kuaishou as having a “community,” in which he said the app is trying to integrate more brands and mimic a village market square — online. Zhao has more than 20 million followers on Kuaishou.
During this year’s 6.18 shopping festival, fashion-focused social media app Xiaohongshu claimed more merchants made their products available directly on the app, and said users could buy imported JD.com products through Xiaohongshu as well.

Ad spending declines

Looking ahead, companies were more inclined in the first quarter to spend on advertising closest to where consumers might make a purchase, rather than just building awareness, according to Bernstein. They estimated growth of 65.8% in Kuaishou e-commerce ads in the first quarter from a year ago, with Pinduoduo, JD and Meituan also seeing double-digit growth.

However, revenue across the top 25 advertising platforms tracked by Bernstein grew by 7.4% year-on-year in the first quarter, slower than 10.8% growth in the prior quarter.
And for ByteDance — the largest advertising platform in China in the first quarter alongside Alibaba — Bernstein estimated domestic ads grew by only 15% in the first three months of the year, despite livestreaming sales GMV likely nearly tripling, the analysts said.
They expect ByteDance’s domestic ads business to slow to the single digits, or even contract, in the second quarter.
— CNBC’s Michael Bloom contributed to this report.

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It’s that time again! “Mad Money” host Jim Cramer rings the lightning round bell, which means he’s giving his answers to callers’ stock questions at rapid speed.

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Rocket Companies Inc: “I said the Fed was raising rates: you can’t own anything in that area. And the Fed is still raising, so you still can’t.”

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Marvell Technology Inc: “It’s driving me bonkers that it could be doing so well and it’s stuck right here, down so much. But we’re sticking with it.”

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Vertex Pharmaceuticals Inc: “I like it very much. … I just have been trying to figure out exactly whether that drug is going to be passed, and I don’t know the answer.”
Disclosure: Cramer’s Charitable Trust owns shares of Devon Energy and Marvell Technology.

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