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's Best Blogs

Yet frankly, the whole thing is absurd. The stock is so overvalued as to take your breath away. It's as if we have just gone into the Wayback machine and ventured right into 1999, the epicenter of the dot-com bomb blast.

Yet, here's a shocker. You shouldn't blame management or the underwriters for this travesty of a valuation. This was no Facebook (FB). They really did everything right. Management didn't choose to sell any on the deal. In fact, many insiders bought on the deal. Neither Morgan Stanley, Goldman nor management elected to raise the price of the deal to anywhere near where the demand was, so as not to be too greedy. The company allowed 14% of its stock to go public, so it is not one of those sliver deals I talk about, the ones where so little is offered that it has to pop no matter what.

And most important, Chairman and Co-CEO Aneel Bhusri wasn't perturbed or upset that the bankers left so much on the table. It would have been reasonable to think that Workday had a right to demand every last dollar, but Bhusri told me and my colleagues at "Squawk on the Street" that he wanted the deal priced as close to the comparables, the other companies in the space, and not a penny more than that.

They were anything but avaricious vs. the greedy ravenous buyers.

Nevertheless, even as everyone involved with bringing this deal did everything right, we are stuck with an opening that immediately took the company's stock to the stratosphere of valuations.

How can that happen? Simple. This is a tech company with sustainable long-term growth coming public at a time when one of the largest sectors of the S&P 500 has so little growth to go around that it's become a pathetic parody of a cohort. When the personal computer market away from Apple (AAPL - Get Report) is shrinking, when spending on hardware is being radically curtailed in large part because of the cloud, but also because of slowing economies worldwide and when two cell phone companies are crushing everyone else, there's a terrible dearth of high-growth companies to choose from.

Check Out Our Best Services for Investors

Action Alerts PLUS

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
Quant Ratings

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
Stocks Under $10

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
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

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
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free

Markets

Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs