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Did Google’s Bold Move Just Change the Tech Trade?

On Monday, tech traders were trying to figure out how the game had changed after Googlestunned the Street by dropping $12.5 billion in cash or $40/share to acquire Motorola Mobility.

According to CEO Larry Page, “The acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable Google to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”

Among the many issues circulating on the floor was whether Google had overpaid for Motorola – Google paid a 63% premium to Friday’s close. Also traders were wondering what the deal means for other players.

What should you make of it? How should you position?

Instant Insights with the Fast Money traders

Pete Najarian thinks the stock to watch now is Research in Motion, which he calls a fallen star.

“They’re sitting on a mountain of cash – they generate a lot of cash – they’ve got a few patents of their own – they become interesting,” he says.

And what Najarian means by interesting is that after the acquisition of Motorola, another major player could find RIM attractive – especially now, after the stock has sold off so sharply.

Trader Steve Cortes is also watching RIM. “I do think the Motorola acquisition puts a bottom on RIM around $23,” he says. “I’d trade RIM long with a $22 stop.”

BGC analyst Colin Gillis is on the other side. He isn’t so sure RIM is a takeover target.

If a company is looking to make a move, it's likely Microsoft and Gillis doesn’t think a RIM acquisition makes sense because of the competing operating systems. “If Microsoft gets into the hardware business – I think it would be via Nokia,” says Gillis. But you might want to think twice before placing any bets. Gillis expects to see Microsoft remain agnostic and “let the hardware guys slug it out.”

Gillis, however, thinks the clear winner is Microsoft due to their Windows 7 OS. "If you’re HTC or Samsung and you wake up to find out that Google is a competitor – you’re calling Microsoft to find out about the Windows 7 phone operating system."

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If you're looking for a trade, Steve Cortes adds that there’s no need to go downstream. He says the trade is long Google.

“I’m a buyer of Google on pullbacks,” he says. “The stock has outperformed the market and outperformed technology. And I commend the company for putting its cash to work – in an intelligent way.”

Pete Najarian is skeptical of the action in Google, which traded near its lows of the session. “The Street thinks the premium was too high and is now wondering if Google bit off more than it could chew,” he says.

Steve Grasso is somewhere in the middle. “It seems like they paid too much for the patents and I’m seeing sell side come in,” he says, “but that doesn’t mean the stock can’t jump.”

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FINANCIALS ON FIRE

Elsewhere in the market, the traders were closely watching financials, which bounced back as risk appetite returned to the market.

What’s the trade?

Pete Najarian is largely skeptical of the space, and worries that most firms are facing serious headwinds. However, if you must put money to work in this space, he says, "I’d play asset managers such as Blackstone."

Steve Cortes agrees that investors should stay away from banks with housing risk. However he thinks brokers are attractive. "I’m long Goldman and Morgan. "They benefit from volatility and M&A," he says.

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VALUE TRADE OR VALUE TRAP – JOHNSON & JOHNSON

Is it time to pick some value out of the rubble from last week’s whipsaw trading? Steve Cortes thinks so, and he’s gaming Johnson & Johnson, which was down about 6 percent over the past month.

Get all the details. Watch the video now cortes ,you’re looking here for value?



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Trader disclosure: On Aug 15, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Cortes owns (GOOG); Cortes owns (WMT); Cortes owns (PG); Cortes owns (GS);Cortes owns (JNJ); Cortes owns (MS); Cortes is short Gold; Cortes is short Japanese Yen; Cortes is short Ten Year U.S. treasuries; Steve Grasso owns (AMD); Steve Grasso owns (ASTM); Steve Grasso owns (BA); Steve Grasso owns (BAC); Steve Grasso owns (C); Steve Grasso owns (D); Steve Grasso owns (JPM); Steve Grasso owns (LIT); Steve Grasso owns (LPX); Steve Grasso owns (LVS); Steve Grasso owns (MAR); Steve Grasso owns (MHY); Steve Grasso owns (NDAQ); Steve Grasso owns (PFE); Steve Grasso owns (PRST); Steve Grasso owns (UAL); Steve Grasso owns (XHB); Steve Grasso owns (XLB); Steve Grasso owns (XLI) ; Najarian owns (AAPL); Najarian owns (C); Najarian owns (BX); Najarian owns (MS); Najarian owns (MSFT); Najarian owns (PFE); Najarian owns (TCK) ; Najarian owns (ECA); Najarian owns (GLD) calls; Najarian owns (GDX) calls ; Najarian owns (SLV) calls; Najarian owns (SGI) calls; Najarian owns (CMC) calls ; Najarian owns (RSX) calls; Najarian owns (DIS) calls; Najarian owns (UNP) calls

Brian Kelly
Accounts managed by Brian Kelly Capital own (FXE) calls
Accounts managed by Brian Kelly Capital own (SLV) puts
Accounts managed by Brian Kelly Capital own (JJG)
Accounts managed by Brian Kelly Capital own (SPY) calls
Accounts managed by Brian Kelly Capital are short the British Pound
Accounts managed by Brian Kelly Capital own (FXE) calls

For Steve Grasso
Stuart Frankel & Co and it’s partners own (AAPL)
Stuart Frankel & Co and it’s partners own (CSCO)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MET)
Stuart Frankel & Co and it’s partners own (MSFT)
Stuart Frankel & Co and it’s partners own (YHOO)
Stuart Frankel & Co and it’s partners own (RHT)
Stuart Frankel & Co and it’s partners own (MET)
Stuart Frankel & Co and it’s partners own (MU)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners own (UAL)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners are short (QQQQ)

For Colin Gillis
BGC Financial LP and/or its affiliates, expect to receive, or intend to seek, compensation for investment banking services within the next three months from Google.





CNBC.com with wires.