This Day On The Street
Continue to site right-arrow
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: The Kids Know WhatsApp

NEW YORK (Real Money) -- Just ask the kids. I asked five kids Thursday while on my vacation about WhatsApp. They all said the same thing: It's the way to text when you are overseas. They were all proud WhatsApp users. They all told their parents how much money they were saving. They were thrilled that Facebook (FB - Get Report) will now include it, and they will spend even more time on Facebook as their de facto homepage.

Then I thought about this company as an initial public offering and the reach and excitement it would create. I thought about the eyeballs internationally, thought about the potential to be a disruptive technology company for phone companies worldwide, thought about how it is still one more technology that is social, mobile, cloud and connective.

I realized, right then and there, that Facebook wanted to get on the right page of IPO history, the page that asks when WhatsApp opens on that first day of trading at a $30 billion market cap why Facebook, Google (GOOG), Apple (AAPL) or the pathetic Microsoft (MSFT) didn't buy it. Why didn't these oh-so-smart companies even think about how much of a game-changer WhatsApp would be? Here you have Apple and Microsoft buying back stock. While it has helped a little for both -- and I like Apple's way of being opportunistic and aggressive -- I sure wish Apple had bought Twitter (TWTR). I know Twitter. That was a no-brainer if it could have gotten Twitter at $10 billion. I think this deal, given how much money FB has and a decent valuation of its stock on 2016 earnings, was just as easy to figure out if you are from the subversive, totally linked younger generation that Facebook, and advertisers, want.

But let's give the naysayers their due. First, "I never even heard of it" was all over the place. I was one. Of course, I could have been using this service instead of paying a carrier a lot of money, so the "never even heard of it" reason is about as stupid as it gets when you think about it. Once you did hear of it you then said, "I wish I had used it."

Second objection: It has few employees and doesn't have huge revenue. That's the same as when Gilead (GILD) bought Pharmasset in November 2011. Gilead, a very good pharma company at the time, was transformed immediately into a great one because of the potential success of Pharmasset's hepatitis C formulation, its principal compound. Gilead paid $11 billion, or $137 per share, for Pharmasset, 89% above the previous closing price, even as the stock had risen 240% over the last year and the hep C formulation wasn't even through regulatory hurdles. Gilead was at $19. It is now at $82.

Select the service that is right for you!

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


DOW 17,976.31 +263.65 1.49%
S&P 500 2,086.24 +25.22 1.22%
NASDAQ 4,947.4410 +56.2220 1.15%

Our Tweets

Partners Compare Online Brokers

Top Rated Stocks Top Rated Funds Top Rated ETFs