bove 40 bucks. conagra, folks. cag. >> cag is a buy for guy. okay. i'm mandy drury. you can catch "fast money" again 5:00 p.m. eastern same bat time same bat channel, and "mad money" with jim cramer starts right now. my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it. "mad money" starts now. 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 call you and teach you. so call me or tweet me me @jimcramer. darn it all. this market's bad setup. i've been so fretting and worried about. played out again today all over.
dow plunging 178 point. s&p falling 7.4%. nasdaq sinking 7.3%. what's got this market down and what can we do about it? one of the biggest investors of our time said stocks are overheated. i interpret that as being too hot to touch. i'm talking about carl icahn. basically frighten some people into taking profits by using an analogy to the beginning of when stock prices were about to be cut in half. >> i'm very concerned about the market. and i think the market is overheated. especially the high yield market. and it's sort of a fair term because i think the public is walking in as they began in '07. >> '07. hate to mention that. i was in the dentist's chair when his program was on. i got drilled not once but twice. first by the dentist, then by icahn. you can see the pillars of the
market tumble down around you. i was waiting for my deptntist to ask me, is it safe? to which i would have applied, no at least not according to icahn. i would have answered anything the dentist wanted to to end that pain. icahn was a bit difficult to understand. only because it was so wide ranging. it was actually a celebratory one-time victory lap for his multi-billion-dollar wind fall in netflix. a trade, by the way, which icahn shared with the world, so you can't blame him. so when he tweeted that he took his remaining stake off the table, you better believe he accumulated massive street cred because of that trade. that's it. i thought icahn's beef was more the lack of yield than with equities, especially given he owns a ton of stocks, including a massive position in apple which he endorsed mightily.
icahn hasn't sold apple. he wants to buy more. that did not sound like a man who thinks it's going to be 2007. so it's not like icahn to me was saying it's time to get short. i heard him say that they had a desire to ring the register on some stocks like netflix because they have some terrific moves. makes sense. yet there's still some value in the biggest stock on earth, apple. so it's not like the end is nigh for everything. apple got help from a call from piper, who happens to be the axe on the stock. so to speak. based on the checks that showed good sales of the all-important iphone. the second negative, greece again. you know i hated that false confidence about a deal that we got yesterday. i really hated it. this is the kind of torture that doesn't end until after the 11th hour. i won't tell you it's going to end in the 13th hour. mad enough money, so there's no
drop date at all. i was eating my granola after a near sleepless night when i saw the announcement that europe wasn't happy with the greek concessions and i felt sick to my stomach, because you knew it was going to be a bad day from the get-go and they complied with an immediate nose dive. the market still hasn't factored in a no-deal conclusion and it looks like we're going to get that if the germans don't agree on some sort of forgiveness that you know they don't want to do. that's the only way to make it realistic that one day the greeks can pay back the money owed. you can't just cut a deal. they've got to slash how much greece owes. i don't think we're going to go for that. so get the no deal thing into your head. we just cannot have this darn thing hang over our heads and still believe we're going to get a big fat non-greek rally which is one of the reasons i didn't want any fed governors talking about one or two rate hikes until the fat lady sings. this whole saga is starting to read like a play pure misery which dove tails perfectly with the tale of drury prospects told by carl icahn just when the
nasdaq is breaking out. timely. next negative. wow. downgrades! >> the house of pain. >> none of the big international financiers like goldman or citibank. didn't hurt that deutsche bank pulled the plug. deutsche bank, no standout stock itself, didn't clobber jp morgan, but goldman's a huge invisible stock that's been a beacon of light. citigroup seemed like it finally found the promised land. deutsche bank rebuff reminded you that the milk can sour and there's no honey. just to keep that kind of metaphor going, you want killjoys? how about citigroup taking the cyber security stocks to the wood shed today. i've said you're going to get a pullback here but i didn't expect citigroup to make it happen. and the firm really seemed to be down there. sellers beware. when the next data breach comes, you only ask yourself why did i sell them?
nevertheless whenever you see a parabolic move, somebody's going to say enough is enough. look, that's just what comes with the super high growth nosebleed territory. and of course, to make matters worse, the transports have to crash the misery party. fedex is still reeling, even as so much damage came from the super freaking strong dollar. they looked like they were basing at par. that's general wall street gibberish for $100. but the bears have been working on the railroads all live long day and ups can't put any distance between itself and its main competitor which is why they fall through the $100 floor and everyone feels insecure about this key group that once again is leading us lower. so you crush the banks. the cyber security place. sending down the two biggest sectors, finance and tech. then you get run over by a freight train. >> all aboard! >> and a big brown truck.
and you aren't going to be picking up stocks among the red hot rubble any time soon. especially not when carl icahn made pretty clear that he doesn't care for the tape. so what do we do? okay. frankly, nothing. everything i heard about the overheated market, again, to use icahn's terminology, is pretty sensible. as i've been saying for many days now, i don't like the setup. greece is still not done so to speak. told you to beware. the nasdaq still needs to simmer down. the fed is itching to raise rates. to me that says there's nothing urgent to do. as we told readers, we tell you what the trust is going to do before we pull the trigger. we're happy to buy stocks that are already down a lot. mainly good yields. they got enough. you have to like the tenor of anything housing after the magnificent magnificent lenar.
there's another company with a strong enough quarter to withstand the guns of navarone a terrific movie about a fictitious greek island which is fitting given the fictitious taxes and the fictitious pension cuts that the greek government seems to be clinging to. the market enjoys a brief buying respite, which is certainly not enjoyable if you own stocks. however, this kind of action is precisely what has to happen if we lack enough good news, and we sure do. so here's the bottom line. i say let the story unfold. wait to see if this is the pullback that jibes with the wait for a pullback talk. just take it all in until the fear trumps the greed and they fold as they always do. i'm going to andrew in florida, please. andrew? >> caller: hey, jimbo. big air force boo-yah to you. >> thank you for serving. are you up in the panhandle? >> caller: yeah, in eggland.
>> i caught a big one off that pier there. go ahead. >> caller: thanks for taking the call. i wanted your long-term opinion on ford. a little worried seeing as it didn't do much a couple weeks ago. i also saw you on "squawk" this morning. you expected a flatline until international numbers improve. is this something i can still feel confident on? >> the yield is fine. but we've got to see latin america turn. we've got to see europe turn. that's a lot of turn turn turn. until we get turn turn turn it's not ford's turn. can i go to terry in arizona, please? terry. >> caller: it's jerry, but that's okay. i'm looking at a new company called ieyes. they came out with a report, that they're getting some relief, they can see, they can walk around their house and see
things. i just thought since it's such a new company, what do you think? is this a buy, sell or hold? >> here's what i didn't like. i thought it would spike. i felt like people already have a wrap on this thing. the stock has doubled. i think if you want to buy this stock, you want to buy it below 14. somehow i feel it could get there. there's nothing urgent here. we've got to let the story unfold. don't forget there's still value out there. just a little harder to find. on "mad money" tonight, the giant buyer in medical supplies that has real value and announced the breakup over a year ago, and it's been in the -- >> the house of pain. >> ever since? why is it roaring now? you'll find out. then then, oreos, should you keep gorging, or will it take a dip? plus netflix splits. before you buy a single share, make sure you hear my take. i say stick with cramer! >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question?
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after an ugly day like today, i think it's worth remembering him that there are still some high quality companies out there with stocks that can rally even when the rest of the market gets hammered. take one i haven't talked about in ages. backster international. symbol bax. in the midst of a major breakup that i think could be the prelude to a serious turnaround. they've been too big and disparate to be well-managed. for most of last year the stock was a serial underperformer. it fell more than 7%. but back duringxter is in the process of breaking itself up something i recommended last year. the company announced it would
spin off its bioscience business just like i said they should. but it's taken a while. taken a while for the deal to come to fruition. with the actual spinout being completed on july 1st. the new slimmed down baxter is looking like an investment company. one you might want to take a piece of. that's why the stock has been able to rebound. a rally from $64 a couple weeks ago to 71 and change. because of a goldman sachs upgrade. you see that kind of move on this ugly day, you know what you should be thinking? it's got room to run. let's take a closer look at what's held baxter back and why i think those days are gloriously behind them. as it stands baxter international has two main division divisions. bioscience represents the other 40%. the bioscience business is one that's getting spun off. it's the leading manufacturer of plasma-based proteins for immune deficiencies, trauma patients and other blood-related
patients. if you need blood plasma or immunoglobolin baxter bioscience is your guy. it's a bloody monopololis. this baxter is a humdrum slow and steady maker. everything from pre-filled syringes to i.v. delivery systems. infusion pumps. vaccines. anesthetics. pharmacy compounding products. and kidney dialysis machines. all humdrum. all steady businesses. you have to ask yourself. the transaction was only improved by baxter's board of directors this month, and it didn't receive clearance from the s.e.c. until june 9th just over two weeks ago. since then it's up nearly 12% and this move, i'm calling it far from over. how's the spin-off going to
work? baxter's board of directors has declared a special dividend that will distribute 80. 5% of the company's biosciences business, which will be called baxalta, to its existing shareholders with baxter itself retaining ownership of the remaining share of the business. they'll hit the market for real when the distribution happens one week from today on july 1st. if you had a piece of position in baxter as of june 17th you'll receive one share of baxalta for every share of baxter you own. why exactly am i so excited about this breakup? how come i've been urging this baxter to make this move more than a year and a half, even including it as my number one prospect on the chapter of potential breakups and get rich carefully? baxter's got issues. it does. even after they announced the biosciences spin-off the company managed to stumble, not once, but repeatedly. baxter's earnings came in well below their own guidance.
not to mention wall street's estimates. and this january, the company decided to stock with full-year guidance. they did give a disappointing forecast for the first quarter. and that's not all. the bears have been pounding the drum about the potential threats to baxter's business. competition brought on by some key patent expirations. one is the hemophilia franchise. the hemophilia business is part of the bioscience businesses being spun off. this march baxter sued the hemophilia treatment which they claim infringes on some of their patents. baxter created some serious worries about the safety of its dividend. this year, baxter's expected to pay out $2.08 of dividends per share, which represents a perfectly safe 52 cent payout based on what the company is expected to earn for 2015.
but when baxter has the analyst meeting in mid may, they expected the payout to just be 35% of its earnings, while the spin-off would have a ratio of merely 15%. this was essentially the washout period i think for baxter stock, sending shares to the lowest levels in more than 18 months. this has been a huge market for this stock. the stock has been climbing ever since. so after roughly a year of heartbreak, what is the case for this thing? why own it? first of all, the pain last year was about the company's underperformance. while that was very real, i'm putting it in the rear-view mirror category. when baxter reported first quarter results in late april, the company blew away the admittedly lower estimates, earning $1 per share. going forward, baxter anniversaries. that's a wall street term meaning goes against last year's weak numbers. it would be up against pretty easy comparisons, especially as it approaches the third and fourth quarters. on top of that baxter only gets
32% of sales from the united states, so it's been seriously punished by the strong dollar. i remember the dollar has peaked. that's another area where i think the comparisons will become much easier this time next year. once we get to july, the analysts are going to start thinking about 2016. in short, with the washout in late may, the expectations,backser reset down to a level where i think they can be beaten. and of course there's the reason i've been advocating this pickup all along. it will be a much cleaner and simpler story. one of the most worrisome negatives, the heated competition will no longer be part of the story. the new baxter with some growth from its dialysis. that closed nearly two years ago. i like that acquisition. the company is starting to roll out its home hemo dialysis product. last but not least, once the spin-off is complete as i said
could happen in get rich carefully, this company will be very easy to value in a business that is rife with takeovers where we can figure out exactly what everything is worth. historically, it's been a difficult company because of the hybrid supply. investors don't like to put money in companies they don't understand and can't figure out. new baxter medical supply company. easy! and that's the way the analysts think. i think that will attract money managers looking for consistent steady eddie stocks with decent dividends. here's the bottom line. oh it's been a tough year for baxter. the long way to break up is almost upon us and once the company spins off its businesses a baxalta, it could be tremendous in today's nasty iconic icahn-inspired selloff. bax is back, all right? much more "mad money" ahead, including the number one chocolate company on the planet and while the other junk food stocks suffer, it's on the tear. i'll reveal it to you. then the plot thickens.
in 2012 the company's grocery business kept the kraft name. it's making a killing now that it's being acquired by heinz. what about the other part of kraft? i'm talking about the giant global snacks business with the unfortunate name of mondelez mdlz, we are mondelez if you please, we are mondelez if you don't please. you may not have been paying much attention to mondelez even as you most certainly have some of their products in your kitchen. think ritz crackers try dent, dentine gum. and who can forget the beloved oreo back from the days of yore when grease was still a movie starring john travolta and olivia. fig newtons. the thing is mondelez has hit some speed bumps in recent
years. it's suffered from poor margins. the stock has become an outperformer. it's up 13% year to date. in a couple packaged goods sector that's been struggling. think hershey or coca-cola but down for the year. both of them. this stock is less than a dollar off its 52-week highs. is this rally for real? doesn't it have more room to run? let's take a closer look. unlike kraft foods, mondelez is very much cool. just 15% from latin america. 13% from asia pacific. the remainder comes from middle east and africa. when it converts all the sales in these weak foreign currencies, they turn to fewer greenbacks. now that it seems the dollar's peaked versus the euro this headwind could start to be a tail wind six to eight months
from now. that's certainly a part of the reason why mondelez has been able to rally. really, though you need to understand this company is a titan in the snack and candy markets. mondelez is number one globally in biscuits with 18% market share. they're number one globally in chocolate with a 15% share. number one in candy with a 7% share. number two in gum, 30% share. number two in coffee. 11% share. number one in powdered beverages. think tang. with 16% share. which by the way, we had to drink along with watered down grape juice when i was growing up because it wasn't all done in fair weather. think of mondelez as a house of beloved brands that are staples all over the world, even if you wish in some cases that they weren't. lately mondelez has been plagued by declining revenues. we're talking about a 36.8% gross margin. much lower than hershey.
pepsico, 53.7. since the time of the spin-off in 2012 mondelez has been trying to streamline production drive new product, and cut cost. but the company has only recently been able to start delivering on any of this. in particular management has laid out three central priorities for their turnaround. i think it's working. first, mondelez is focusing its portfolio more narrowly on snacks. for a company emerging as jacobs coffee business to form a joint venture. jacob's dewey -- in exchange a $5 billion up front payment and a 49% stake in the joint venture. the company might sell its philadelphia cream cheese brand. that could be worth $3 billion. wow. at the same time, monday alzheimer's disease is also acquiring new snack brands. along with enjoy life foods. second, mondelez is aggressive.
trying to reduce its boated supply chain. last year the company announced a major restructuring program that should produce at least $1.5 billion worth of savings by 2018. these efforts go all the way back to the breakup in 2012 as mondelez has spent $1.5 billion since then on overhauling its spla and distribution networks all over the word. it's just that these are very upply and distribution networks all over the word. it's just that these are very long-term projects. the bulk of them will be up by 2016. mondelez is centralizing many of its transactional processes at new global shared service centers and that too is going to reduce the overhead. by the second half of this year, mondelez expects to have five new production lines. if the production would go twice as fast cutting their operating costs in half. this is what we need to see. of course, there's more to it than that. part of the reason mondelez's revenues have been shrinking is
because the company has been discontinuing many of its lower margin product lines in order to focus on more profitable areas. meanwhile, mondelez is trying to get the most out of their power brands. the ones people really like. i'm talking about oreos, try dent gum, velveeta, and paul's candy. these so-called power brands are now growing twice as fast as the roefs the company and they count for more than 16% of the overall sales. meanwhile, mondelez has been a victim of the strong dollar. even when the super freaking strong dollar seemed like they would never stop going higher mondelez was able to stop some of the pain by raising prices overseas. that is how beloved thaur brandseir brands are. they can raise price. despite the weak euro. that's why mondelez reported its most recent quarter at the end of april, they managed to grow earnings at an amazing 26% clip
on a constant currency basis, earning 21 cents per share. and that's despite the company's net revenue declining by an astounding 10%, although all that decline was currency which caused the company to take a 14.5% hit. mondelez has organic growth. it came in at 3.8%. that's really good for a food company. i think that will start to shine through. the dollar seems to have peaked versus the dollar. mondelez's double digit earnings growth will become very impressive if the euro makes a rebound versus the dollar. and those constant currency numbers become real numbers. let's not forget. noted activist nelson pelt has a nearly 3% stake in mondelez. i think many of the margin gains are to eliminate corporate overhead and focus on improving margins. he won't stop until the margins exceed those of its competitors.
that's why we recommend stocks when pelts takes a long-term position.z takes a long-term position. the bottom line is i think mondelez now has what it takes to go higher. even if peltz's dream doesn't come true. mondelez has been cutting costs and focusing on its power snack brands. and the result is that the company would have truly phenomenal growth if it's not for the insanely strong dollar. but if you believe, as i do that the dollar has peaked then perhaps it really is time for mondelez to break out, and this move isn't the end, but the beginning of something that can last a very long time. i want to go to max in colorado. max. >> caller: hey big boo-yah, jim! max in the mile high calling about cisco foods, xyy. federal insurance upheld the ftc injunction on the merger with u.s. foods. wanted to get your take on that as well as it's up three points
trading just under a 62-week high. what's your position on it? >> i was very surprised that the stock acted as well as it did today. there were a lot of people that really did think in the end that this one wasn't going to work out. and they wanted to be in the stock. me i say no. i think that they've lost a lot of business to other players. i want you to stay away from syy. sorry, they're really nice guys. i want to go to david in illinois, please. david. >> caller: mr. cramer boo-yah, first-time caller. first, i've got to tell you, last night, the rolling stones talking to jim boo-yah cramer. my world, that's the best one-two punch imaginable. >> there you go thank you very much. >> caller: anyway my question is about procter & gamble. with the super freaking strong dollar, procter has really been hurt. i'd like to keep it for the 3.3% dividend and to avoid paying capital gains tax. i'm thinking unilever would be a good hedge fund trade, vis-a-vis is a strong dollar play.
what do you think? >> they're kind of going to cancel each other out. this is one of those i think you have to make a stand. you either think that the super freaking dollar is done going higher and therefore you should own procter, or you think it's not done and you should own unilever. don't double dip. pick one, not the other. that would be like buying you know, like prel and then dousing chips ahoy with it. not chips ahoy. more like a lever brothers. you know what i mean. all right. from your pantry to your pocket. mondelez, if you please has what it takes to head higher. it's just been a victim to the strong dollar. but the dollar's peaked the stock is break out. much more "mad money" ahead, including a single invention that could transform childcare around the world. it's got the potential to save millions of lives and the founders are up next. netflix blitzed and the stock goes on a roller coaster ride. icahn may be selling. should you? don't miss my take. plus, a wonderful wednesday edition of "the lightning round" is just ahead. i want you to stick with -- oh
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but sometimes the most meaningful inventions are motivated by something more important than money. and yes, believe it or not, i do believe there are certain things more important than money. i want to highlight the amazing story of embrace, a non-profit provided to create people in developing countries with infant warmers that can keep underweight or premature babies alive. embrace invented a cheap, durable baby warmer that can be used in place of incue bay or thes, which people in the third world often don't have access to. they created the line of baby warmers designed as a swaddle and sleeping bag product for parents in the united states. they created -- i got a chance to talk with jane chen the
fabulous co-founder and ceo of embrace innovations, along with the artist behind touch our future. take a look. when i see you guys, i think you can make a big difference to the world. and one of the ways that you're doing it is to try to explain first how infant mor falltality is a far bigger issue than we realize and what you're doing about it. it's pretty amazing. >> infant mortality is one of the biggest global issues. about 15 million preterm and underweight babies are born every year around the world. three million babies die in the first 28 days of life. so it's about six babies every minute. one of the biggest problems they face is staying warm. and that's the primary function of an incubator, but incubators are very expensive. they cost $20,000 upwards. they require electricity, so you're not going to find them in the most remote places of the world. >> so you've come up with a product that is far cheaper, but very effective. >> exactly. >> show us how it would work. >> this is the embrace infant
warmer. it looks like a sleeping bag for a a baby. the core technology sits in the back here. this is a pouch of what's called a phase change material. it's a wax-like substance that when melted maintains a constant temperature of 98 degrees for up to eight hours at a stretch. >> you created this. >> me and my team yes. >> at school -- >> yes. so this came out of a class at stanford, at the design school where we were challenged to develop a baby incubator that cost 1% of what a traditional incubator would cost. >> and your role in this in terms of awareness? >> well i'm an artist and i've always been very interested in socially engaged art. both of us are very passionate about the intersection of art and social impact. and i wanted to -- i mean jane, i say, can you please leverage your art to shine a light on this issue of infant mortality? i wanted to take something tangible and real from the place where is this is the most
critical issue. and i arrived at this idea of looking at the hand as a building block for this artwork called touch our future which is a web and mobile art installation to raise awareness for infant mortality. it's a fully technological artwork and worked with jane to see if we could get the actual hand traces of mothers and infants in 14 developing countries, so for the past six months we've been collecting in afghanistan, rwanda across sub saharan africa. in parallel with that, i built a mobile app where anyone anywhere in the world can take a photo of their hand, and i developed this image processing software that extracts a trace of the hand and populates it with a sun, and so you can save it to social media. and the idea is if you give your hand, it's a small gesture. but it's a very meaningful and creative gesture, and then you're also interwoven into the larger narrative about the cause. >> i'm sure when people are
listening, it will be like my first reaction is i want to be involved. i want to be involved financially. your model is very state of the art versus what we hear a lot. i know it's prosaic to talk more, but let's do it for a minute. >> embrace to date has reached 150,000 babies with our infant warmer across ten countries, but the goal was always how do we get to a million babies. the challenge was always finding the funding to do that to scale sustainably. and so what we launched just two months ago is a u.s. version of this product a line of consumer products called the little lotus. and these -- they're right here. they're called a collection of swaddles and sleeping bags and blankets that have nasa inspired technology on the inside. so this fabric uses something similar to the embrace warmer. it has nano particles and wax imbedded straight into the fabric that keeps babies at the perfect temperature. and what parents are telling us is that babies are sleeping longer and better and they love it. >> this is a product that's for
sale? >> yes. >> or people can invest? >> yes, they can. this is the for-profit spin-off of embrace. it's a product for sale, and for every one of these purchased, a baby will be helped by the embrace warmer in a developing country. >> well i've got to tell you, if you're -- it's kind of blow away. this is what people do now in this country. pretty amazing. i want you to learn about it. go to their site. understand this. it's pretty important. it's the way of the future. jane chen the co-founder of embrace innovations, and the rtist whort artist who is the co-founder of abumba. thank you so much. tomorrow, kick off the trading day with "squawk on the street." live from post nine at the nyse. >> are you dictating messages back or anything? >> i got a phone call yesterday. it was like hey, how you doing? people are like cramer like he's talking to himself now. >> it all starts at 9:00 a.m.
round! play the sound, and then the lightning round is over. are you ready? it is time for the lightning round. i'm going to start with hank in florida. hank! >> caller: good evening, jim. oil company eog, typically with a nine-point draw in april. when do we expect or do you expect to see a change in that in return to solid performance, even in light of being seen through the chinese plastic company. >> true, it is a good company. my travel trust owns dow. that's the one i like. the problem is you're not really going to get the big buyback. but i do like dal more. let's go to glen in kentucky. glen! >> caller: jim, first-time caller, enjoy your show. >> thank you. >> caller: i have a substantial
position in lyon biotechnologies, lbio and would like to know if you think i should hold or take my lumps. >> each t-cell company, i invite on air, and i cannot opine until i've done more work on it because the t-cell companies are all over the place. i've got to come back. it's not fair for me to say i like it. let's go to dan in oklahoma. dan! >> good afternoon, mr. cramer. big sooner boo-yah to you. >> nice, we love the sooners. what's up? >> caller: calling about schlumberger, and i noticed the stock dropped last week after it was mentioned about the ceo meeting with putin. i just want to know if it's a buy, hold or sell. >> my travel trust owns it. we were looking to pull the trigger say 85 86. that's where i am. vince in illinois. vince! >> caller: hey, jim. big shook boo-yah. horton works got in at 19. where do i get out? >> when i think of big data in the end i am going to default.
artificial intelligence. sales force. let's go to nancy in california. nancy! >> caller: yes. i am asking about haynes brand. >> man, i tell you, that stock, it is such a good stock. it's always at its 52-week high. no offense, but in this selloff, maybe get a buck and a half below the 52-week high and business is smoking there. i need to go to sammy in louisiana. sammy! >> caller: boo-yah, jim. >> boo-yah. >> caller: what's your thought on family dollar? >> that one's going away. going to have just dollar tree and dollar general, and i like both of them. and that ladies and gentlemen, is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade. huh? listen, td ameritrade has former floor traders to help walk you through that complex trade. so you'll be confident enough to do what you want. i'll pull up their number. blammo. let's get those guys on the horn. oooo. looks like it is time to upgrade
kids are expensive. so i'm always looking to get more for my money. that's why i switched from u-verse to xfinity. they have the most free on demand tv shows and movies on all my devices. it's perfect for me because my kids are costing me a fortune. i'm going to cabo! [ music plays ] don't settle for u-verse. xfinity is perfect for people who want more entertainment for their money.
okay, here's a riddle. which was right, when netflix was up $25 at one point this morning, or when it gave back all those gains and closed down more than two bucks in the wake of carl icahn's victory lap. okay, we know that broader ownership is key in a market like this one, where home gamers tend to own stocks and institutions tend to -- that's why i don't turn up my nose to netflix's split. that would be wrong to do even as i recognize that a stock creates no new value. you wonder how little it means? take a two for one split. break a pencil in half.
and you have two pencils. but you don't have more pencil. that said let's think about who owns netflix versus who management wants to own netflix. right now this is a heavy hedge fund name. the big hedge funds are either piling in or they're blasting it out. either way both cohorts are always in motion trading in and out of the stock, creating insane volatility. witness how icahn's cell call crushed netflix. it's so volatile because netflix is a tough stock to gain. doesn't trade on earnings. trades on sign-ups new content emotions. it's true that netflix has more viewers than all of the u.s. networks combined and it's true they've had some huge hits including "house of cards," which apparently is the most popular television show in china! pretty amazing when you consider how quintessentially american it is although it's also a remake of a british series so maybe
it's got global appeal. here's the thing. netflix is a company with a product enjoyed by the masses. in this 7 for 1 split. allowed users to buy more shares, which can entice them into the stock. a satisfied customer can be more of a satisfied shareholder when the stock is trading at a dollar amount that makes it possible for an ordinary person to buy shares. now, we can't be sure exactly what will happen to netflix post-split because of this emotional component. it's not all that relevant in analog because apple announced its split along with a blowout quarter. apple rallied 12.5%, but i attribute that more to the better earnings. move was far more related to the earnings than in the split. how about the date surrounding the actual split? on june 6th 2014 the day before the split, apple traded at $92.29. ten days later, virtually unchanged. how about the day the split
stock began trading. the stock was at $92.70. seven days later, 92.20. 4.5% decline. i'm calling the whole thing inconclusive. nevertheless, i do think the longer term impact is going to be positive on netflix stock. not as important as the numbers, but listen i know anecdotally that the shareholder base does become more retail oriented. as i've been recommending salesforce.com and visa pretty much forever, those recommendations resonated with you until the stocks got into the 200s and then volatility and sticker shock began to turn off retail investors. then both sales force and visa engaged in 4 for 1 splits. eliminating a key freakout factor about how scary it is to buy the stocks up like that. how does that weigh up against the announcement that carl icahn is ringing the register on his position with netflix. if you want to own netflix, you should buy it because the opportunity is so great not because you can buy more shares with fewer dollars. if you want to sell netflix, it
should be because you think it's too risky, not because some big name hedge fund manager is selling, too. i think the positives from having a more entrenched shareholder base courtesy of the 7 for 1 split outweigh the negative of carl icahn's victory lap. with more retail investors, and fewer hedge funds -- no one else sneezes on tv except for me. it can start trading like a normal stock rather than as a play thing for ultra rich money managers bent on making their quarters come heck or high water. stick with cramer!
we're factoring in again the idea that greece will default and the idea that there will not be a deal. when you do that kind of factor-in, you're going to have multiple days of pain. remember, this is not an 11th hour situation anymore. it's now a 1st hour.3th hour. i think the deadline will probably be avoided. we're going to be under pressure. so do not get excited about anything. don't feel like you need to do anything. maybe pick at something small that's all the way down. but recognize that carl icahn for the moment is probably right. the market's overheated versus what's going on in europe. not here though. i'd like to say there's always a bull market somewhere. i promise to try to find it just for you, right here on "mad money." i'm jim cramer, and i'll see you tomorrow!
lemonis: tonight on "the profit"... -you're steven, also? -steven: yes. lemonis: three generations right here. steven: right here. lemonis: a multigenerational custom-furniture business... do you and your dad have blowups here? steven: all the time. lemonis: ...struggles to stay up with the times... [ screeching noise ] steve: some of the machinery here are 50 years old. lemonis: ...and a father who won't give up control... steve: do you have a packing list? steven: are you really gonna micro me again right now? steve: please. lemonis: ...leaves a son struggling to make his mark. steven: oh, my god. lemonis: if i can't bring these two together... steven: when it's done it has a sticker. if this doesn't have a sticker is it done? -steve: no, it's not done. -steven: okay. lemonis: if he can't do the job, you fire him. ...there may not be a next generation of grafton furniture. your grandfather was here. now your father is here. and if you don