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Sell the Icahn Pop in Commercial Metals or Ride the Wave?

Commercial Metals landed on the trader radar after the Fast Money pros spoke with billionaire investor Carl Icahn about his hostile $1.8 billion bid to buy the company.

”We have the money and we do believe there’s support for our bid,” Icahn tells the desk.

As is so often the case, shares of the company surged on word that Icahn was involved. Considered an activist investor, others often follow him into a stock on the hope that he can unlock shareholder value.

Should you do the same?

Trader Steve Grasso says no. “Sell the Icahn pop,” he says. It’s better to fade it, not buy into it.”

Pete Najarian, however, is on the other side of the trade.

He’s spotted unusual options action in CMC. “The January 14 and Jan 15 calls are very active,” he says. “It makes me think (institutional investors expect) another bidder to step in. As Carl points out, at $1.8 billion - valuations are fair.”

> NEW SLIDESHOW: 10 Top Stocks for the Long-Term Investor

Trader Joe Terranova isn’t so sure. “Maybe there is a white knight but I’d be surprised. If Carl wants it, I think he gets it,” says the pro.

The likelihood of the deal going through has been the subject of many conversations largely because CMC shares failed to trade $15, Icahn's bid price. Many investors take the discount as a sign the market is skeptical that Icahn can pull it off.

Part of that skepticism stems from Icahn's failed attempt earlier in the year to agitate for change at Clorox .

But Icahn insists circumstances are very different. “At Clorox – the shareholders really didn’t want it. But we do believe that there’s a lot of support for this.”





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Trader disclosure: On Dec. 6, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders: Grasso owns AKS; Grasso owns AMR; Grasso owns ASTM; Grasso owns AVAV; Grasso owns BA; Grasso owns BAC; Grasso owns D; Grasso owns LIT; Grasso owns MHY; Grasso owns PFE; Grasso owns PRST; Grasso owns S; Grasso owns XLU; Najarian is long AAPL; Najarian is long C; Najarian is long JPM calls; Najarian is long WFC calls; Najarian is long INTC; Najarian is long; HOO; Najarian is long GE; Najarian is long COP; Najarian is long MC calls; Terranova is long EMC; Terranova is long SU; Terranova is long NCR; Terranova is long UPC; Terranova is long TRLG; Terranova is long VRTS; Terranova is long LQD; Terranova is long MUB; Terranova is long AXP; Terranova is long IBM; Terranova is long HES; Terranova is long CAT; Terranova is long SWN; Terranova is long CNI; Terranova is long DECK; Terranova is long SBUX; Finerman owns SPY; Finerman has short calls AAPl; Finerman owns BAC; Finerman has short calls JPM; Finerman’s firm owns SPY; Finerman’s firm owns IWM; Finerman’s firm owns MDY; Finerman’s firm owns JPM; Finerman’s firm is long IBM and has short calls;

Steve Grasso
Stuart Frankel & Co. and its partners own CSCO
Stuart Frankel & Co. and its partners own CUBA
Stuart Frankel & Co. and its partners own GERN
Stuart Frankel & Co. and its partners own GM
Stuart Frankel & Co. and its partners own HPQ
Stuart Frankel & Co. and its partners own HSP
Stuart Frankel & Co. and its partners own HSPO
Stuart Frankel & Co. and its partners own JPM
Stuart Frankel & Co. and its partners own MET
Stuart Frankel & Co. and its partners own MSFT
Stuart Frankel & Co. and its partners own MU
Stuart Frankel & Co. and its partners own NYX
Stuart Frankel & Co. and its partners own PRST
Stuart Frankel & Co. and its partners own RDC
Stuart Frankel & Co. and its partners own UAL
Stuart Frankel & Co. and its partners own WFT
Stuart Frankel & Co. and its partners own XRX

Brian Kelly
Shelter Harbor Capital is long EURO
Shelter Harbor Capital is long IWM
Shelter Harbor Capital is long LNG
Shelter Harbor Capital is long PLPT
Shelter Harbor Capital is long CORN
Shelter Harbor Capital is long SOY
Shelter Harbor Capital is long AUSSIE $
Shelter Harbor Capital is long CANADIAN DOLLAR

Mike Khouw
Cantor Fitzgerald is a market maker in securities of AAPL
Cantor Fitzgerald is a market maker in securities of AKS
Cantor Fitzgerald is a market maker in securities of BAC
Cantor Fitzgerald is a market maker in securities of C
Cantor Fitzgerald is a market maker in securities of PNC
Cantor Fitzgerald is a market maker in securities of GS
Cantor Fitzgerald is a market maker in securities of JPM
Cantor Fitzgerald is a market maker in securities of WFC
Cantor Fitzgerald is a market maker in securities of GDX
Cantor Fitzgerald is a market maker in securities of MS
Cantor Fitzgerald is a market maker in securities of NFLX
Cantor Fitzgerald is a market maker in securities of GLD
Cantor Fitzgerald is a market maker in securities of XLU
Cantor Fitzgerald is a market maker in securities of TLT
Cantor Fitzgerald is a market maker in securities of XLF
Cantor Fitzgerald is a market maker in securities of SMH
Cantor Fitzgerald is a market maker in securities of INTC
Cantor Fitzgerald is a market maker in securities of CSCO
Cantor Fitzgerald is a market maker in securities of YHOO
Cantor Fitzgerald is a market maker in securities of IBM
Cantor Fitzgerald is a market maker in securities of CDR
Cantor Fitzgerald is a market maker in securities of AMZN
Cantor Fitzgerald is a market maker in securities of CMC
Cantor Fitzgerald is a market maker in securities of VZ
Cantor Fitzgerald is a market maker in securities of FIO
Cantor Fitzgerald is a market maker in securities of TOL
Cantor Fitzgerald is a market maker in securities of VMC
Cantor Fitzgerald is a market maker in securities of GE

Tim Freeman
Elevation LLC trades SPX options

Mike Walkley
No disclosures

Andy Hargreaves
Neither Andy, nor his family own shares of NFLX
Pacific Crest does not own > 1% shares of NFLX
Pacific Crest has no investment banking relationship with NFLX
Pacific Crest does make a market in the shares of NFLX

Steven Winoker
The following companies (GENERAL ELECTRIC GE) are or during the past twelve (12) months were clients of Bernstein, which provided non-investment banking securities related services and received compensation for such services GE / General Electric Co.

An affiliate of Bernstein received compensation for non-investment banking-securities related services from the following companies GE /General Electric Co.

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