Cramer's Mad Money - The Biggest One-Day IPO Pop In A Decade (10/27/11)

by: Miriam Metzinger

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Thursday October 27.

Groupon (NASDAQ:GRPN), Amazon (NASDAQ:AMZN), Linkedin (NYSE:LNKD), Google (NASDAQ:GOOG), (NYSE:CRM), Netflix (NASDAQ:NFLX), (NASDAQ:ACOM), Travelzoo (NASDAQ:TZOO)

Groupon (GRPN) looks set to become the most hyped-up artificial IPO Cramer said he has seen since the era began. It is going to be the worst offender of the orchestrated first day pop strategy that sent Linkedin (LNKD) up 109% its first day of trading when only 8% of shares were offered. Only 5% of Groupon's shares will be available to guarantee huge demand. LNKD is down 10% from where it closed after market the day of its IPO, and Cramer thinks Groupon will have an even greater decline. While Groupon seems to have a great long-term story, the company has yet to make a profit, because its costs are so high, and it needs to shell out even more money to expand its subscriber base. Its competitors are the formidable Amazon (AMZN) and Google (GOOG). Investors who want to play this IPO should get in if they can, but they should sell it the same day.

"I think it will be the biggest one-day pop we have seen in a decade," Cramer said.

Cramer took some calls: (CRM) is not another Netflix (NFLX) because it is an "honest, great company in touch with its customers and shareholders." (ACOM) was a great story, but the stock has peaked.

Travelzoo (TZOO) could bounce to $40 on the Groupon IPO, and Cramer would use any pop as a chance to sell.

CEO Interview: Vivek Ranadiv, TIBCO Software (NASDAQ:TIBX). Other stock mentioned: IBM (NYSE:IBM)

TIBCO Software (TIBX) has been forgotten amid the run up in tech. This business software company reported a terrific quarter in September, when it reported robust performance in all of its segments and offset the decline in demand from the financial sector. The company is capitalizing on big data, social media and the cloud. While IBM (IBM) is a major competitor, CEO Vivek Ranadiv said, "IBM uses a database, and a database is like a phone that doesn't ring...with our software, the information finds you."

Cramer would buy this neglected tech stock.

CEO Frits van Paasschen, Starwood Hotels (HOT)

Even though Starwood Hotels (HOT) reported a knockout quarter, the stock is still off its highs; following its earnings, the stock jumped 6.2% even after running up 25% in the last month, and even then, HOT is down 10% from its level a year ago. HOT beat earnings by 3 cents on stronger than expected revenue, up 9% with revenue per available room up 12.4%. CEO Frits van Paasschen discussed dramatic expansion in China and other emerging markets. He blames the sour macro news for keeping the stock down. "Look at the trendlines, not the headlines," van Paasschen said.


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