This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Jim Cramer on Facebook's Pricing

NEW YORK ( Real Money) -- We want things to be compliant with Facebook (FB - Get Report). That means we need to see oil stabilize, which it can, since the Cushing, Okla., oil glut is being alleviated by the Seaway pipeline. We need to see Europe stabilize, which it can, given that every short is worried about something good happening this weekend. We need to see gold rise, which is what happens each time the Germans give in to some growth initiative that could be considered inflationary.

We also need to see earnings be smooth -- and the last major company that talked was Salesforce.com (CRM) with a 38% revenue growth rate, astounding for a multi-billion-dollar company. Plus, Salesforce CEO Mark Benioff confirmed to me that Europe was a major positive because of some huge contract wins, including with Vodafone (VOD).

So we have a decent backdrop, for certain.

But we also need to see the frenzy die down -- and that, well, that's not going to happen.

So if we balance the über-exuberance of Facebook with the über-depression of an oversold stock market, maybe -- just maybe -- we'll get a decent day. Of course, that sure hasn't been the case on many Europe-dominated Fridays.

Now, as for the parameters on Facebook: Many institutions are trying to get full positions on the deal. My understanding is that a lot of the buy guys got one-third of a position. There are those who want to be weighted for a big $100 billion-plus company who believe in the $2 earnings-per-share number for 2015, and they would be more than thrilled to pay roughly a 25x multiple -- higher than Google (GOOG), lower than Salesforce.com. So I wouldn't be surprised, despite all the flipping and all of the stock supply, if we saw institutions paying up to $50.

If the price goes north of $50, I think they'll back away and that retail investors will control the opening. South of $50 and I bet you'll see some buying for a decently blended average. It would mean they didn't ratchet things up in price at the last minute, and that would be good news. It would eliminate institutions from saying, "It was high at the road show -- now it is ridiculous."

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Our Tweets

Partners Compare Online Brokers

Top Rated Stocks Top Rated Funds Top Rated ETFs