Cramer Calls Bottom on Shanda; Should Investors Follow His Advice? (SNDA)

Dec.19.05 | About: Shanda Interactive (SNDA)

CNBC's Jim Cramer believes it's time to start buying Shanda Interactive (ticker: SNDA). From a recap of his Friday program:

....the stock is trading at about $15, down from $45.40, "takes me right to the edge" of recommending it. But what pushes him over is a recent positive article in the Financial Times and the recommendation of Internet Review author, James Altucher, he said. "Altucher's been on a roll lately, and the man doesn't make bottom calls idly," said Cramer.

"When a stock falls that hard, when it comes down from above $40 to $15 and then it starts to see a glimmer of good news, you've gotta think it's hit bottom," Cramer explained.

Shanda isn't a great company, said Cramer, but it is a well-positioned one, as online games are extremely popular in China, he said. Expectations couldn't be any lower and the stock couldn't be more hated. "It's time to buy Shanda."

Comment: Before you run out and follow Cramer's advice consider the following: (1) Cramer's last call on a China stock and his subsequent retraction; (2) Cramer's rate of success; (3) The Financial Times article that Cramer was (likely) referring to (is it really positive?); and (4) All China Stock Blog articles on SNDA.

Final Comment: The glimmer of good news????