Today, the same is happening to the desktop. More and more consumers browse on phones and tablets, ignoring just about every ad in the process. Cramer said Facebook surely knew this transition was coming but likely underestimated just how fast it would happen. He said company executives chose to raise money at all costs during its IPO, which set up the drastic decline that's now in progress.
Facebook has declining fundamentals, said Cramer, and with more share lockups set to expire soon, there's no telling just how low shares can fall. Just as Amazon.com (AMZN) hurt brick and mortar retail and Apple's (AAPL) iTunes crushed CD sales, so, too, will the mobile Internet hurt the desktop advertising model.
Facebook will eventually figure out how to monetize mobile, Cramer concluded, but until they do, the stock is far too risky to touch.
Here's what Cramer had to say about callers' stocks during the "Lightning Round":Chipotle Mexican Grill (CMG): "This hit my downside target and I would try some CMG here." Sprint Nextel (S): "I want to buy Sprint right here." NovaGold Resources (NG): "I like the SPDR Gold Shares (GLD) but not NovaGold." Roundy's Supermarket (RNDY): "I'm not happy with how this stock acts, nor with its quarter. This has been a disappointment." Exelon (EXC): "It's been terrible but it's OK. They're overdoing the negativity." American Tower (AMT): "I want to buy this stock. This is the way to play worldwide 4G service."