The Trouble With Takeover Speculation

Nabors (NBR - commentary - Cramer's Take) shows you the problem with speculating on buyouts when the fundies fall.

Here's a company that I truly believed in for many years because CEO Gene Isenberg has been remarkably good at developing the business from a small driller to a dominant land driller.

Ouch, though. The land-drilling business, both in the U.S. and Canada, where Nabors dominates, has turned just awful. That means, no matter how good Nabors does its job, the stock's fundamentals just don't add up.

So today, on the forecast cut, those who were betting LBO just a month ago through calls and common, when the stock spiked to $34 and a half, will suck tailpipes.

If you don't have good fundies, you cannot speculate on takeovers. That's the rule.

Period.

At the time of publication, Cramer had no positions in any of the stocks mentioned.

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