NEW YORK ( TheStreet) -- NEW YORK ( TheStreet) -- Amazon.com's ( AMZN) high valuation was the topic of conversation after the online retailer traded sharply down Tuesday after a revenue miss. Karen Finerman complained on CNBC's "Fast Money" show about Amazon's stretched valuation and wondered how long it was going to take to achieve the growth to justify it. Joe Terranova said Cisco was a name he did not want to be in. He was particularly worried about the slowdown in sales growth and the increase in spending. Mike Khouw said option traders were positioning for a down move and got it. For a breakout of some stocks from a recent "Fast Money" TV show, check out Dan Fitzpatrick's "3 Stocks I Saw on TV."
Kerry Rice, an analyst with Needham & Co., said Amazon is driven more by opportunities than valuation. He said Amazon's top line was disappointing, adding the revenue from its U.S. operations and media segment were weaker than expected. Rice, who has a hold on the stock, said Amazon needs to tackle some tough problems such as the sales tax issue, continued infrastructure spending, slower revenue growth and its lofty valuation. CNBC reporter Kayla Tausche came on the show to report that Facebook was preparing to file a $5 billion IPO on Wednesday with Morgan Stanley as the lead underwriter. She said investors would be probably disappointed at the lower figure because they been expecting the $10 billion that had been reported earlier. She said it will be important to see what percent of the outstanding shares Facebook will offer in the IPO. She also said there was no information yet on which exchange the stock will be listed. Ron Insana said it was difficult to say how much of a pop the stock will get based on the sketchy information. Finerman said the stock's valuation will depend on its multiples. Larry Haverty, of Gabelli Global Multimedia Market Portfolio, said the stock will be up the first two days. However, he said the stock's multiple of cash flow is so high that the chances of it performing well are slim to none.
3 Stocks I Saw on TV
Haverty said the most exciting part of Facebook is the apps part, but he said the company's margin level, revenue growth and conversion of revenue to income are unknowns. He said it's easy for people to get carried away with the stock which he lumped with others in the category of stocks with "mythical valuations." Lee shifted to Jon Najarian for a "hidden Facebook trade." Najarian noted some legislation that is has passed the House and is now before the House called the Video Piracy Protection Act. If enacted, it would allow Netflix customers to share their movie recommendations on Facebook. He said the move would be a market mover for both companies. Cash-rich tech companies? Ralph Nader is on a crusade to tap into the cash, starting with Cisco ( CSO). Nader, who owns 18,000 shares of Cisco, is mounting a drive to get Cisco to rethink its dividend strategy. He said it's unfair for the company to be sitting on $45 billion in cash while paying out a stingy 6-cent dividend per quarter. He said Cisco and other companies like Apple ( AAPL) are sitting on $2 trillion in idle cash, a portion of which can be used to help their shareholders and stimulate the economy. He said he's mounting a petition drive to get individual shareholders as well as pension funds and mutual funds to pressure cash-rich companies to pay out more in dividends. Khouw pointed out it might difficult for Cisco to do that because of the amount of taxes it would have to pay to repatriate money coming from overseas. Shifting to the credit card space, Finerman discussed a growing trend among credit card companies like Visa ( symbol) and Mastercard ( symbol) to adopt credit cards in the future that use chips instead of chips. She said the U.S. deadline is fast approaching for a trend that is well in place in Europe. She said one way to play the trend in the U.S. is to get into Verifone ( PAY). Lee shifted the discussion to the markets and the S&P turning in the best January since 1997. John Bollinger, of Bollingerbands.com, said there's every good reason to believe there'll be good sailing until the middle of the year. "It's a good time to own equities," he said.
Lee brought in Rishab Ghosh, cofounder of Topsy, who talked briefly about the value of tacking sentiment in social media and using that information to predict market trends. He said it has worked in cases such as his study of JC Penny, in which tweets about the company's new Web site helped explain the rise the stock. In the final trades, Insana said to take a look at Citigroup ( C). Adami liked Trinity Industries ( TRN). Finerman said not to buy Amazon on the dip, and Terranova said he was buyer of puts in the United States Natural Gas Fund ( UNG). -- Written by David Tong in San Francisco. >To contact the writer of this article, click here: David Tong. To submit a news tip, send an email to: firstname.lastname@example.org. To watch replays of Cramer's video segments, visit the Mad Money page on CNBC. Follow TheStreet.com on Twitter and become a fan on Facebook.