  We use group theoretic methods to calculate the spectrum of short multiplets
around the extremum of N=8 gauged supergravity potential which possesses N=2
supersymmetry and SU(3) global symmetry. Upon uplifting to M-theory, it
describes a warped product of AdS_4 and a certain squashed and stretched
7-sphere. We find quantum numbers in agreement with those of the gauge
invariant operators in the N=2 superconformal Chern-Simons theory recently
proposed to be the dual of this M-theory background. This theory is obtained
from the U(N)xU(N) theory through deforming the superpotential by a term
quadratic in one of the superfields. To construct this model explicitly, one
needs to employ monopole operators whose complete understanding is still
lacking. However, for the U(2)xU(2) gauge theory we make a proposal for the
form of the monopole operators which has a number of desired properties. In
particular, this proposal implies enhanced symmetry of the U(2)xU(2) ABJM
theory for k=1,2; it makes its similarity to and subtle difference from the BLG
theory quite explicit.
