Downside Of Disruption - Cramer's Mad Money (9/25/18)

by: SA Editor Mohit Manghnani


Salesforce CEO Marc Benioff talks about partnership with Apple.

"Most of cyber attacks are state-sponsored" - FireEye CEO Kevin Mandia.

TherapeuticsMD is a speculative biotech.

Stocks discussed on the in-depth session of Jim Cramer's Mad Money TV Program, Tuesday, September 25.

Cramer was at the Dreamforce conference where he will be interviewing executives and getting a peek at new technologies. Technology forms 20% of the S&P500 and hence it's important. Whatever happens in the sector affects not only the tech companies, but the world. A lot of these tech companies have caused massive disruption in businesses but innovation also has a downside. This segment is about discussing the downside of disruption as it's tough to spot it.

There was news from Amazon (NASDAQ:AMZN) partnerships and expanding into other markets that will disrupt various areas from retail, entertainment to advertising. Square (NYSE:SQ) is also disrupting the small business payment space and making inroads in the payroll space.

In the semiconductor space, analysts are worried about Micron Technologies' (NASDAQ:MU) boom-and-bust cycle that was seen after weaker than expected earnings and fueled by Intel's (NASDAQ:INTC) chip manufacturing issues. This led to the entire semiconductor space going down on pin action.

He also spoke about voice recognition technologies innovating and making the QWERTY obsolete. "The bottom line is that you need to know what industries are being disrupted if you're going to invest in the stock market," he concluded.

CEO interview - Salesforce (NYSE:CRM)

Cramer interviewed Salesforce chairman and co-CEO Marc Benioff to discuss this year's Dreamforce conference.

Benioff said that Dreamforce is the biggest tech conference in the industry that brings together 171,000 customers, employees and developers. Commenting on the major announcements, Benioff spoke about their new partnership with Apple (NASDAQ:AAPL) which will integrate Siri into Salesforce's ecosystem.

"I have Apple in my veins," said Benioff as he worked with them in the '80s. "I'll tell you right now that it's so important to us to have this amazing new relationship with Apple and CEO Tim Cook, the ability to bring together Apple developers, Apple customers, our developers, our customers, and to show incredible new ways that you can connect with your customer," he added.

"We're going to get to Google too, I'm sure," he joked as he spoke about Salesforce's partnership with Amazon. "They're doing incredible things on the cloud. We're cloud brothers, Amazon and Salesforce. And we're going to just show how you can use AWS in a new way," he added.

Apart from that, he spoke about buying TIME media brand with his wife. "We bought Time because that's an important institution that is having a positive global impact on the world and is deeply aligned with our family's values and we're delighted to be the new stewards of Time Magazine," said Benioff.

He also commented on social issues by saying that it's time to remove the quote "Focus on your shareholder. The business of business is business" from the management books. "The business of business is improving the state of the world." It's about improvement of all stakeholders as trust is the highest value to attain.

CEO interview - Dropbox (NASDAQ:DBX)

The stock of Dropbox is down 16.5% since the company's recent quarter. Cramer interviewed CEO Drew Houston to find out what lies ahead.

Houston said people live the Dropbox product and that's how they have over 500M customers. It starts by people using it at home, eventually bringing servers to work which is then used by companies. "I think a big misunderstanding is that people thought that people are buying storage when, really, 80% of our subscribers, more than that, are using Dropbox at work. And they're really buying sharing and collaboration and the ability to work better with other people," he added. They have also partnered with Microsoft and Google.

Commenting on competition by the likes of Microsoft (NASDAQ:MSFT), he said that even big companies cannot shake Dropbox's growth. Their gross margins are expanding in the face of competition. This trend seems counterintuitive, but that's a mistake investors make about Dropbox.

Houston said that in times where technology is distracting and overwhelming, Dropbox aims to make things simple.

CEO interview - FireEye (NASDAQ:FEYE)

The stock of FireEye is up 13.3% in 2018. Cramer interviewed CEO Kevin Mandia to get his take on cybersecurity.

Mandia said the company has many ways to make money but their mission remains the same - to protect and prevent as many attacks as they can.

Commenting on cybersecurity, he said, "It took me too long, but here's the dead reality: every cyberattack is related to geopolitical conditions. If you're in the United States and you hack a company, you're going to get caught, so you have to live in a safe harbor. You almost have to be condoned, you have to be supported, and many of the attacks we respond to, there are, in fact, people in uniform conducting the attacks against our companies."

FireEye has responded to over 600 breaches last year and more than 80% of those were state-sponsored. "The heads of the state or the heads of certain agencies of that state knew the attacks were ongoing, but there's no risk or repercussions to the attackers," added Mandia. They are seeing increased attacks from Iran, Russia and North Korea.

The attackers look for soft targets which then ripple into the system. Commenting on the attacks on Bitcoin (BCH-USD), he said that attackers use Bitcoin's anonymity against it.

Viewer calls taken by Cramer

Lowe's (NYSE:LOW): The stock is up after the hurricane. Cramer would wait for it to come down before buying.

TherapeuticsMD (NYSEMKT:TXMD): It's a speculative biotech but it has no edge.


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