i'm jim cramer, and welcome to my world. you need to get in the game. they're going to go out of business, and he's nuts. they're nuts. they know nothing! i always like to say there's a bull market somewhere. "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my job is not just to entertain you but to educate you. so call me at 1-800-743-cnbc. is it so bad that it's good, or is it just plain bad? that's the question this market tries to resolve each day lately.
and this morning it answered negatively before changes in the afternoon and then getting negative again after rebounding after hideous lows, the dow finishing down only 55 points. s&p slipping just 0.12%. nasdaq, advanced 0.26%. what do i mean when i say things might be so bad that they're actually good? i'm talking about a theme now that's so alien that most of you watching at home, as we run into a vicious gauntlet of news this week that will probably determine much of how the historically miserable month of september pans out. let's flush things out. first, regular watchers of this show know that stocks ultimately react to the future. not the past or the current set of circumstances. the immediate reaction to downbeat news may be negative, but negative news tends to spur
policy actions by governments, and those actions can work to stimulate growth provided they're aggressive and smart enough to turn economies around. that's what this market holds every day now. let's take the three big bad/good battlegrounds. china, europe, and the united states. look, we know that china used to be one of the world's great growth engines. it almost singlehandedly kept the global economy afloat during the global recession as the chinese communists figured out how to spur domestic spending. but after playing the role of the world's economic engine for so long, the chinese locomotive seems to be in danger of running off the rails. each piece of data is weaker than the last. so what's good about that? well, much of the slowdown in china seems somewhat self-inflicted. when the pure si realized it
overstimulated the economy, governments hit the brakes and in many ways still seems like it's happening. the hope is that the chinese will stop stepping on the brake pedal but start cutting rates, adding real ago taken to the downshift in their economy. how about europe? the european central bank meeting this week and we're expecting to hear some chatter in unison that's going to reverse the declining economies over there and maybe unite to save the spanish banking system. you can monitor these efforts by watching the largest spanish bank, which has been climbing ever since it bottomed at $4 and change. and that rally continued today. $7 stock finishing up 1.28%. that's positive. what changed or reversed this stock which i consider to be the most important name in the universe right now barometer? word that german agreed to help out troubled countries in helping out troubled country in what i now call the lend me some sugar, i am your neighbor philosophy
first done by outkast in that anthem "hey ya" hey, in the united states we've been deeply focused on how slow the economy is. the slower it is, the more likely it is the fed will take action, whatever that action might be. i'll admit as a hedge fund manager i always play these worst it gets, better it gets moments because you have to presume that central bankers around the world aren't suicidal, therefore they'll take actions to improve economies they're responsible for, right? but i do have some misgivings. first of all, china's economy is slowing, everyone agrees. the declines are all incremental ones. a few percentage points misses. no more because in some subpar numbers we got, these are slow bleeds, okay? almost as if the chinese don't think there's anything desperate they need to respond to. that and the fact that the chinese need the european markets to survive. go to europe, and all the chinese rate cuts in the world will do nothing to help that cause. here in the u.s., ben bernanke has taken endless actions to get the economy moving. including taking rates down to
where you would have to be a fool to try not to take a loan out to buy a house. the operative term is "try." you have to be a fool not to try to take out a loan to buy a house. the mortgage loan process has gotten ridiculous. ridiculously difficult, particularly if you're self-employed. plus, it's really up to congress, the united states and the president to give us some sort of budget that actually makes sense and doesn't shut down the economy. ben bernanke himself can't build a bridge over a troubled fiscal cliff. let me be crystal clear about one thing. i'm not even focused that much about china right now. i might not even care what bernanke does. i do hope the chinese find a way to stimulate the economy but europe holes the key to that growth even though there's the european handcuffs china wears. while i do care about the employment numbers, i suspect that we can bounce back rather quickly because of anyone proving housing market, that's huge. a red hot auto market. did you see the amazing numbers today?
and fabulous back-to-school retail sales. europe is what i'm worried about. europe is what keeps me up at night as anyone who reads me at 4:00 a.m. knows for certain. right now, i've got to tell you, we just don't know what the europeans will do. and i think that lack of knowledge is spooking this market. make no mistake. the so bad that their good scenarios work only if the countries in question really do take action. i used to describe them as four-engine airplanes. when the first engine flames out, we get all excited. they'll step up to the plate, i hate that plane. when the second engine stops working we're sure the central bank is going to react by pumping money into the system. the third engine shuts down, oh, man, we got it. the central bank has to take action, right? if the fourth engine quits? you might think the central bank will kick into action but as far as i'm concerned, without any engines, the plane crashes. now, with the world action in europe's stock markets, germany up 7% year to date. france and switzerland gaining. even italy is in the black. if you use their currency.
we have to be encouraged that stock buyers believe that germany might adopt that outkast dictum that i mentioned and lend some sugar to their neighbors. making europeans take too much heart from the stock market numbers and literal ly don't think things are worse enough to justify taking big action, even as you and i know big action needs to be taken. i know. i joke with my friend david faber regularly on my other show "squawk on the street" that europe will do the right thing. he points out that the more important bond markets are saying otherwise. here's the bottom line, though. rebounds like the one we got today make me feel more confident that mr. market knows good things are on the horizon in europe. and that gives me more confidence that the worse it gets, the better it gets will once again play out to the positive. unlike so many others, i don't want to flee the market because of this gauntlet or because september is historically the worst month of year. you shouldn't either. let's go to brett in new mexico. brett. >> caller: boo-yah, jimmy.
i'm calling from the four corners area of new mexico. >> man, i'm loving that. what's up? >> caller: i'm in at 26.50 and i'm in for any glimmer of hope in molycorp chlt is it time to buy more, average down, sell and take the loss or just hold it? molycorp for many, many points. >> caller: and army boo-yah in >> thank you for serving. boo-yah right back at you. >> caller: ariba, inc., symbol arba was recently bought out by s.a.p. what happens to us shareholders that own the stock in arba? >> geez, you know, i've got to be honest, because i don't know these calls ahead of time. i don't know whether it's a
sunshine. since sunrise senior living ceo appeared on the show last year, its stock has more than doubled receiving a takeover bid at a 62% premium. but there are other bidders that could still drive it higher. cramer asks the ceo next. all coming up on "mad money." don't miss a second of "mad money." follow at jim cramer on twitter. have a question, tweet cramer, #madtweets. send him an e-mail at madmoney.cnbc.com or call us at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. this program is sponsored by aleve. try it for relief from tough headaches.
tarts with more pain. more pills. triple checking hydraulics. the evening brings more pain. so, back to more pills. almost done, when... hang on. stan's doctor recommended aleve. it can keep pain away all day with fewer pills than tylenol. this is rudy. who switched to aleve. and two pills for a day free of pain. ♪ and get the all day pain relief of aleve in liquid gels. i don't have to use gas. i am probably going to the gas station about once a month. drive around town all the time doing errands and never ever have to fill up gas in the city. i very rarely put gas in my chevy volt. last time i was at a gas station was about...i would say... two months ago. the last time i went to the gas station must have been about three months ago. i go to the gas station such a small amount that i forget how to put gas in my car. ♪ three words dad, e-trade financial consultants. they'll hook you up with a solid plan.
wa-- wa-- wait a minute; bobby? bobby! what are you doing man? i'm speed dating! [ male announcer ] get investing advice for your family at e-trade. try the #1 gastroenterologist recommended probiotic. align. align naturally helps maintain digestive balance. ♪ ooh, baby, can i do for you today? ♪ try align today.
latter more than the former. then you have another type of company that will do everything in its power to take control of its own destiny. how does a business take control of its own destiny? consider heckman, hek. this company is essential of helping oil and gas drillers responsible for dealing with the massive amounts of wastewater created by hydraulic fracking. heckman operates many of the big companies. but not all of them putting it all down their own wells deep underground or cleaning up with their own water recycling trucks. here's the rub. because of of a stunning decline in natural gas prices, companies have been cutting back their drilling, which means there's been a lot less demand for heckman's services. that's why the stock was down 59% year to date, way below when we heard from the ceo on "mad money." but they're not willing to take it lying down. but management knew they had to do something. last night they did something and something big. they buying a private company. this deal makes heckman the largest player on this and gives
them the largest exposure in the shale in north dakota. and more than prudhoe bay in the '60s perhaps. and we know oil exposure is much better than natural gas. it should be hugely additive. the acquisition is accretive to ekman's earnings. it rose 1.02 at 38%. that was part of the transaction dick heckman, the current ceo will step back to become executive chairman and hand over the ceo reins to the power fuels chief executive. i the reins. i like this because it means heckman can focus on what he does best, terrific takeovers. he has a fabulous long-term track record, so let's check in with dick heckman, the chairman and current ceo to find out more about this deal and where the combined company is headed. mr. heckman, welcome back to "mad money." >> thanks, jim. nice to be here. >> all right, dick, the stock went down, you pull the guidance, people were really concerned that you had missed the mark. why does this deal change the game for heckmann?
>> well, you know, as you well know, jim, when you're putting a company together from scratch, and let's remember that we did $15 million in revenues two years ago, sometimes it's a little messy, and sometimes the timing isn't the way you would like it to be, and when things become available that you really think you need to have to satsz fie your long-term plan, you have to jump them, and you have to sometimes pay the consequences of the short-term views of some people out there. so what happened was people kind of lost confidence in what we were doing. we never did. and what the customers really have been telling us for months and months and months is we want somebody big. we want somebody nationwide, we want somebody that cannot only transport the water but treat it, recycle it, reuse it, dispose of it. the key to them is they care as much about the environment as anybody in the world cares. they don't want to do anything that's going to damage the
long-term view of their business, but they need somebody big and somebody in all the shales. what this transaction does is it not only makes us the largest in the business, which, by the way, is a brand-new segment, no one has done this before, but it also gives us every major in the customer now a customer of ours. now we can give them the service and the environmental help that they need, the environmental products that they need, the services that they need and keep them -- and keep the locals happy. >> what people are going to say at home who are not that familiar who want to know because the stock was a low dollar amount, they're going to say, well, hold on. how the heck can one company that's smaller buy a bigger company, and how can those two together instantly start doing better? in other words, explain the economics. because you're a deal master -- to the regular person, why a small can buy a larger one and how it all fits together. >> well, we can do it because
they're larger but not a lot larger. they have a ceo and a management team that is a tremendous management team. and mark is a tremendous entrepreneur, but they understand the requirement to go national. and who else are they going to marry up to? if they really want to do what their customers are asking them to do and provide the environment al services that their customers want them to provide, who else are they going to do it to? so by coming together with us, mark becomes our largest shareholder. he has a huge vested interest in doing this right. he has a two-year lockup, so he's not going to be selling his stock any time soon, and it gives him the opportunity, us the opportunity to come together and really build something special. if you ask anybody in the production business, jim, what is the biggest problem they have to deal with day in and day out, they'll tell you water. then if you ask them, okay, who's the big company in that business that you turn to, they don't have a name. they're going to have a name in a couple of months.
>> all right, now, dick, if i was selling my company to you and i look at the stock and $2, i would say i don't want any cash, i want stock. why didn't they get any cash? why was this an all stock deal? >> you know, the reason is, in the conversations we had, mark is 53. i said, we will -- let's give you enough cash that for the rest of your life all you have to worry about is making this company grow. all you've got to worry about is getting this stock to $20. so you take enough cash off the table -- remember, jim, he built a company making over $120 million a year in ebitda. actually over $150 million a year in ebitda. so the reason it's in all stock is first we wanted to give him some security and take the pressure off him so he could build, build, build with us. secondly, and, candidly, we don't want to change the control here. so the whole transaction worked perfectly for mark and perfectly for us. >> all right, dick, last question.
we read endlessly. john lennon's kid wrote the other day. we read endlessly. there's nothing we can do. the water is -- you ruin the water and there's no hope for any comeback and this has got to be stopped. i mean we spoke last time. lots of people like mayor bloomberg saying, listen, we've got to deal responsibly. will your company end the debate by proving that you can handle the water without danger? >> you know, jim, absolutely. and the answer is, people get hysterical about lots of things they don't understand. and as i said earlier, the producers are as adamant about doing this right as we are and as any environmentalist is. and the fact is that water has been treated since the farr farrow pharaohs. there is no water that hasn't run through sand and gravel on this earth.
we've been through the industrial revolution, all kinds of things in this country and this world. and you know what, we're all still drinking water out of the tap. and we're going to be able to continue to drink water out of the tap long after you and i are off the planet. there's no magic to this. it's just consistency, it's being careful, it's doing the right thing, it's recycling, it's reusing it. there's no magic to the treatment of this water. it takes work, time and a commitment to the environment, which all of us have. >> dick, thank you for coming back on. thank you for this transaction. terrific job. >> jim, love to be with you. >> fantastic. that's dick heckmann, chairman and ceo of heckmann corp. yes, some of us didn't give up. and it turns out it was right not to give up. it still is. after the break we'll try to make you more money. >> coming up, social status. it's been a nonstop slide for facebook since going public and losing nearly half its value. but who's really to blame for its sagging share price? cramer's answer may surprise you.
say what you will about facebook, the ipo was a fiasco, the stock is a disaster area and the company mite very well be run by a bunch of jokers if not midnight tokers, and we've all been wondering where in the world is waldo zuckerberg, although we were gratified tonight that he filed with the government saying he won't sell his shares for at least a year. hallelujah! i'm not here to blame zuckerberg for the collapse of the stock or praise him for not wanting to sell down here. in fact, somebody has to admit that facebook is not solely to blame for the fact that its stock keeps getting hammered, hitting another 52-week low today. and that somebody might as well be me. the truth is, the incredible deceleration in facebook's growth can't possibly be caused by the company's execution alone. it's being caused by a techtonic
shift there's crushing revenues and earnings for all desktop reliant web companies. facebook is simply caught up in the vast super migration that's happening right now. the transition to using mobile devices to surf the web rather than desktop computers. the transition is every bit as brutal as it is paper to web predecessor, which caused print operations to be wiped out en masse by internet competitors. you figure about how print analog dollars are being trumped by digital dimes. now those desktop digital dimes are being usurp ed by mobile pennies and facebook is caught right in the cross hairs of this large sea change. when facebook came public, the initial earnings estimates assumed a very slow migration from desktop to mobile step by step, inch by inch. they were wrong! with the big telco players
heavily subsidizing apple iphones and google powered droids, you have a gigantic chunk in the demographic most sought after by advertisers, and facebook on the inhospitable device. not the tv-like desktop. come on. you browse the iphone, you don't stare at it. you get the same amount of engagement as you might look at a wristwatch or worth or checking out ball scores at best. and that's just not enough for the big advertisers, no matter what they say or do right. right now as the ad's embedded and mobile articles seem to be failing the capture the eyeballs needed to justify the high advertising rates left over by the desktop bureau, boy, oh, boy, this generation is thrift i ier. the true culprit behind facebook's hideous spiral down, it's structural and secular, not cyclical and easily reversed. something that we learned about in a brilliant and courageous
piece by my colleague here at cnbc in today's new york times. let me give you a web history lesson so you can really understand what's going on right now. when i started thestreet.com in 1995, my business plan was on the dead tree crowd not being able to compete with the fleet of foot websites. the whole trees to paper mill to printing press to home delivery thing cost way too much money to deliver the news versus our dialup site. just as important, i knew that the print model relied on expensive ads for its profits. and because of our low cost structure, we could come in well underneath those rates with banner ads, which at the time was the rage. i figured the old media crowd would never be willing to cannibalize their print operations in order to promote a web presence. how can you give away something for free online that you charge money for in a much slower print world. hey, for awhile i was right.
i was able to offer salaries that far exceeded the print versions because of our low cost structure. at first the print folks bridled. they resisted. they were kicking and screaming. in the end, though, they compromised themselves and went to a hybrid web and print model. the result, except for those who offered truly proprietary information like "the new york times" and "the wall street journal," no dead tree company could figure out how to make another enough on the web to replace print ads and it's led to a diss trous decline. fast forward to today. companies like facebook, which base their business model only on the desktop advertising model platform now face the same dilemma as the dead tree crowd did back during the initial rise of the internet. i'm sure that facebook going into the year made certain assumptions about how much they could profit from the desktop while they slowly transitioned to mobile. turns out the transition is happening way too fast and the
desktop driven ad supported companies have been reported flat footed. i bet facebook will eventually figure out how to make up for the lost revenues. but what i heard so far won't cut it. then these users will leave in droves to other freer venues. facebook didn't do a great job of telling people how badly they were being hurt from the transition from digital dimes to mobile pennies in part because they didn't see it coming any more than "the new york times" did when we did thestreet.com and in part because they simply didn't want to admit to the problem because it would have caused a dramatic decline in the ipo price if not the outright canceling of the deal. in fact, i think these desktop dimes happened so swiftly, the ipo managers must have been blown away by it, too. the cfo's insistence on a high price and a huge amount of stock offered to raise big money at all costs, despite the declining fundamentals, which is what sorkin talked about. now, the johnny-come-lately, mostly hedge funds who bought
ipo, they're trying to lock it up the darn thing, accelerating the nasty selloff. the rise of companies that actually do better on the mobile device. think google, yelp. and twitter. twitter and yelp are much more critical. it will take share because it's more fun. you can post your pictures for all to see. that was the magic of facebook anyway. and the community includes people you don't know as well as those you do. twitter is the better mousetrap and it's worth any amount for apple, google or even facebook to buy now in order to maintain their social presence. so what happens to facebook's horrendous stock? the company has to figure out how not to compromise users -- that's problem the z-man's worry -- while still pleasing advertisers who haven't realized how little bang for the buck they're getting for those mobile facebook ads. when they do, they'll demand far more and pay far less to
facebook just they like they did to the publishers, and it's got to do so before the next lock-up has expired. hundreds upon hundreds of millions of shares being cleared or freed up include many underwater, that's why i don't want to blame facebook. sorkin articulated that. i can't fault facebook more than i can blame any other mobile effectively. most can't. it's no different from how amazon hurt bricks and mortar retailers or how apple's itune destroyed the music industry. facebook has some worth, i know it does. it makes money. it will eventually figure out some way to better monetize this 900 million users as they shift to mobile. but at the moment, it has to be valued with an enterprise as a down shifting revenue investment.
it must be at a lower multiple than they get. they may have caught a break tonight when jeffries recommended the stock. the z-man filing hit the tape. so when you couple sudden change of fortune with a group of sellers who must get out because of their need to limit losses, you've got a first class debacle. suffice it to say, there's a price to be paid for this stock. it just might not be anywhere near where it is right now. let's go to rich in my home state of new jersey. rich. >> caller: hey, jim. big south jersey boo-yah to you. >> liking that, man. i was there on thursday. what's up? >> caller: hey, jim, several weeks back, there was, i guess, a lot of people had questions about, should they be buying nokia, and you were feeling it wasn't a good time at that time. but now it seems to be nokia is corroborating with verizon and microsoft, selling off some of their assets to regain some funds, and i want to know what you think about it now. >> okay. look, nokia is one of those stocks i can't keep people out of.
i did for points and points and points. do you want to own a $2.80 stock where the fundamentals seem to be on a decline? is this sprint at 2.80. at 2.80, sprint looked real bad and turned out to be a buy. am i telling you to buy nokia. i'm telling you it's too late to sell. if you want to speculate on something, i like the fundamentals better at every other cell phone company. that said, i'm not going to fight anyone trying to speculate on nokia. that said, if you want to speculate on nokia, i can't stop you at this level. kenny? >> caller: boo-yah to you. >> good to have a stuttering -- >> caller: thank you. my question is at hewlett-packard, the rise in yield and the recent 52-week low, how you feel about that yield maintaining that level as a buying opportunity. that's my question. >> look, it's got a 3% yield. i've got a bunch of stocks that have a 3% to 4% yield that have much better fundamentals. even 5% yields is a much better fundamentals.
that's not a reason to buy a stock with declining fundamentals. that's what hewlett-packard is. we know fb is worth something, right? with all those users. but we have to figure out the price. the problem is i just don't think it's anywhere where it is right now. stay with cramer. coming up, are you ready to get charged up? cramer cranks up the voltage on an all new hyperactive lightning round. and later, sunshine. since sunrise senior living ceo appeared on the show last year, its stock has more than doubled receiving a takeover bid at a 62% premium, but are there other bidders that could still drive it higher? cramer asks the ceo next. all coming up on "mad money."
nothing complicated about a pair of 10 inch hose clamp pliers. you know what's complicated? shipping. shipping's complicated. not really. with priority mail flat rate boxes from the postal service shipping's easy. if it fits, it ships anywhere in the country for a low flat rate. that's not complicated. no. come on. how about... a handshake. alright. priority mail flat rate boxes. starting at just $5.15. only from the postal service.
it is time for "the lightning round." give us a name of a stock, buy, buy, buy, sell, sell, sell. i'll tell you whether to buy, buy, buy or sell, sell, sell. when you hear this sound, the lightning round is over. are you ready, skee-daddy? time for "the lightning round." i'm going to start with john in new jersey. john?
>> caller: hey, jim. big boo-yah to ya. >> yes, right back at you, yeah. >> caller: hey, great, thanks. i tell you, i think we need you in washington right now for the budget situation. >> i wish i was down there. i would be knocking some hides. what's up? >> caller: i own chipotle. i wonder if this is a good time to add on to my portfolio? >> this is my downside target after the quarter that disappointed me. we had the cfo on to explain the story pretty well. deep in the money calls i would try some cmg here. let's go to jim in ohio. jim. >> caller: jim cramer, boo-yah! >> go your way. >> caller: i like this company. i like the ceo. does this company have long legs. sprint. >> i want to buy sprint right here. 4.50, 4.80, but that is the level you want to be in. tyler in florida. >> caller: hey, buddy. good to hear from you again. >> same. >> caller: all right.
i got david and goliath of gold miners. >> gld. i do not want you in novagold. plain even simple. that's why you should own gld. let's go to jeff in virginia. jeff >> caller: been watching since 2005. boo-yah, professor cramer. >> i'm liking that. thank you for keeping the faith for so long. >> caller: how about rndy? >> we're not happy with how the quarter was. we said that this was one we felt would do better but it hasn't. it's a disappointment. john in maryland. john? >> caller: b-b-b-b-boo-yah. this is john from eastern shore maryland. >> i love it there. what's up? >> caller: my wife carol and i enjoy watching your show every night during dinner. and then we enjoy our dessert with larry kudlow. hey, jim, exelo just went with conservation energy. i bought into the stock.
recently they went down. i like their management. what's your thought? >> i agree with you. i think it's okay. the stock is down 16% for the year. i think that's overdoing the negativity. i want to do exactly what you want to do. let's go to dave in florida. dave? >> caller: jim, this is the area of north miami. boo-yah. >> back at you. what's up? >> caller: tell me about american power, amp. >> this is the best stock other than sprint mentioned this lightning round. i want to buy when the stock is down. this is the way to be able to play the next generation worldwide 4g amt. it's for me. and that, ladies and gentlemen, is the conclusion of "the lightning round." >> the lightning round is sponsored by td ameritrade. like? you'd spot movement, gather intelligence with minimal collateral damage. but rather than neutralizing enemies in their sleep, you'd be targeting stocks to trade.
well, that's what trade architect's heat maps do. they make you a trading assassin. trade architect. td ameritrade's empowering web-based trading platform. trade commission-free for 60 days, and we'll throw in up to $600 when you open an account. i've got two tickets to paradise!l set? pack your bags, we'll leave tonight. uhh, it's next month, actually... eddie continues singing: to tickets to... paradiiiiiise! no four. remember? whoooa whooaa whooo! you know ronny, folks who save hundreds of dollars by switching to geico sure are happy. and how happy are they jimmy? happier than eddie money running a travel agency. get happy. get geico. fifteen minutes could save you fifteen percent or more.
thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪ look, it's easy to focus on all the things wrong with the stock market especially on a volatile day like today. all the way wall street takes advantage of the little guy, advantage of the little guy, but that would be doing you a disservice. you see, it seems like this is corrupt beyond all correction. so i need you to remember that there are still some terrific
executives out there who are working their butts off 20 create value for their shareholders like you. in short, i need you to remember sunrise senior living, one of america's leading operators of assisted living facilities. first, 4 1/2 years ago, it looked like sunrise might have to be september off to an assisted living center itself. when the ceo took over in november of 2008, the company was crushed under its debt laden balance sheet, and the stock was trading at just 27 cents. but one of the greatest turnaround artists in the business besides being a friend of mine, long before "mad money" got sunrise back on track. the stock was at $6.84 on the show. he told me that a turn was hopefully in hand. back on august 22, we found that sunset senior live g caught a $14.50 takeover bid from another company. 62% premium from where the stock was trading the day before. now a 112% game. more than a double. it's so easy to get jaded in
this business, i know, so when a ceo delivers for you, gives you a big gain, you know these are possible. we have the ceo here with us tonight to talk about the deal with porter industries. welcome back to "mad money." mark, have a seat. >> thank you, jim. >> mark recruited me in all fairness at goldman in the early '80s and was one of the first people to tell me how to analyze stocks. mark, how do i analyze and spot the next sunrise? >> well, first of all, that's an awfully flattering introduction. >> you deserve it. >> thank you. i think the answer is that turnarounds depend on some core, some core in the business that you can still grab hold of and turn around. you have to have something that a management team can wrap its arms around. >> and what here because when i first -- when you called me up, i had just said, look,
i don't think sunrise can't make it because people can't sell their homes so how can they move into sunrise? >> that's why i came on, to correct you. >> and i thank you. >> there are companies like sunrise that have such an unassailable brand that had been honed for 30 years in a demographic that has no compare and that in itself is a real asset. when you have something that has such staying power and you combine that with a team that's going to work through issues that you have when a company is under the gun, i think that's something that investors can find and grab on to. >> but, mark, the balance sheet was horrendous. i mean, you come in. i would think that you've been in a lot of different situations that you would have to say, listen, that balance sheet is too horrible. what made you think you could repair it, and is that what you were worried about? >> people and other stakeholders really want to work with a management team that's going to work with them to recover their losses. >> so you went to them first and
said, listen, i'm a new guy. and i think i can turn this around. >> absolutely. i said obviously this is a great business at the core here. so what we have to do is work together as borrowers, lenders, capital partners to add strength to the business. we know that day in, day out, we're taking amazing care of seniors throughout the united states, the uk and canada. that's something that's irreplaceable. working on a balance sheet, chipping away at it, if you have the right team and you're willing to livel with volatility, which for some strange reason my team and i are, we can. >> hey, jim, are stocks genuinely mispriced at times, mark? >> well, with hindsight, it was easier to say this was an opportunity. and at 27 cents people should have been a buyer. at the time it was 27 cents, it wasn't so clear. >> right. >> i think what you have to do is have a team that's willing to push through knowing that some things are going to be out of your control.
i would say for an investor, you look at a company, you look at a team. >> you look at the management team? >> you look at the management team. and you look at what's at the core of this company and say are these people who are going to fight the way through it or are these people going to be renters? >> this is a heavily regulated business. a lot of people might think, don't take this job, 2008. president obama comes in. you had a democrat. we had clinton come down hard on this business. >> well, it's a heavily regulated business because it provides an essential need for people. so it's -- you can be comfortable operating in a regulatory environment if the core of your business is built on integrity and charge people the services you provide them with. >> are you worried? maybe he's worried that republicans come in and it becomes a bad business. >> i don't think a needs-driven business, i don't think that's going to change their live, i don't think that's going to vary based on the administration.
>> alzheimer's, do you follow that market in terms of drugs? what's the future of health care for senior citizens in this country? >> well, i think that people are living longer with many more issues than they did before, and i think there are many more med s available than there were before. i think a business like ours has a very strong future because you're really providing absolutely an essential need for people. people who have vanced demen that or alzheimer's really need a place to call home, that understands their needs and is going to work with them and really nurture them and make their days as pleasant as possible. >> one last question. what's next for you? >> i'm the ceo of sunrise senior living. i don't look beyond what i'm doing. i'm proud to be the ceo of a company that is amazing. we have 30,000 people that take care of people 24/7. whether it's a hurricane or just an average day, i'm very happy with what i'm doing. i'm excited to be partners with health care as you referred to before. no complaints.
>> well, congratulations. and nations tony of you who listened to him -- he's right -- when it was at $6 and he said sunrise senior living is going to be coming back and coming back strong. he was right. thank you, mark, and "mad money" coming back after the break. thor's couture miles card gets the most rewards of any small business credit card. your boa! [ garth ] thor's small business earns double miles on every purchase, every day! ahh, the new fabrics, put it on my spark card. [ garth ] why settle for less? the spiked heels are working. wait!
my mad tomato sauce, proceeds to charity, of course. look, i'm never, ever going to tell people not to take a profit, especially after fedex cuts its profit forecast tonight. that's simply terrible news for the transports and all that's transported via express shipments. you want to lock in some gains that's been the worst of 12 in recent history, i'm not going to stand in your way. as i said in the book "real money," nobody ever got hurt taking a profit. but there's so many examples why you shouldn't give up totally, shouldn't sell. we should outline some. first, we got heckmann itself. up more than 37% today, whose ceo we just heard from. almost everyone who saw dick heckmann the last time we were on the show talked about his company is under water. i know that's bad. i know the stock remains decent speculation and could be bought for that very reason. the huge gain today doesn't take the stock anywhere near where it was but it's a sign
that you can't just give up up on someone with a terrific track record. second there's medisys, a maker of skin care medicines. has had a ceo who's been driven to make his shareholders money over a multiple year period. the stock has fallen $12, 38% as it sold itself to value, a third of the premium as friday. third! bristol-myers, my top fantasy football pick for this year. bristol-myers is the eli manning of the big cap, a stock that stands in the pocket, waits for the dividend and then throws the ball down the field for the score. the stock is still being discovered by wall street. it's been rallying like crazy but still discovered by wall street. deutche bank sent it flying almost 4 points today. final there's elevation. a bio tech that got fda approval for a new prostate cancer last
friday. the stock has been red hot. up another $4 and change a day. give me 135% increase. are these needles in a haystack? i call lots of these wins out every day. and that means at least to me that there are manyhaystack. you can't sell them because of a european central bank decision. you give up too much and you'll likely kick yourself about the money you're living on the table. individual stocks can be down right fantastic, especially when you have terrific managements working for you and brand-new innovations driving earnings. so don't give up. get more selective, take some gains but do not leave the table. there's too many needles to think you won't get stuck by one. in this one case, the sticking is good. stay with cramer.
i know the name of eight princesses. i'm an expert on softball. and tea parties. i'll have more awkward conversations than i'm equipped for because i'm raising two girls on my own. i'll worry about the economy more than a few times before they're grown. but it's for them, so i've found a way. who matters most to you says the most about you. massmutual is owned by our policyholders so they matter most to us. massmutual. we'll help you get there. this country was built by working people.
the economy needs manufacturing. machines, tools, people making stuff. companies have to invest in making things. infrastructure, construction, production. we need it now more than ever. chevron's putting more than $8 billion dollars back in the u.s. economy this year. in pipes, cement, steel, jobs, energy. we need to get the wheels turning. i'm proud of that. making real things... for real. ...that make a real difference. ♪