This Day On The Street
Continue to site
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

Supply Can Kill the Bull, The IPO Window Lets In a Chill: Jim Cramer's Best Blogs

I think the answer is that the public markets have developed such an appetite for these kinds of stocks, stocks with revenue growth and no earnings, that the owners of the companies recognized a good thing when they got one. While they didn't do outrageous slivers on the IPOs -- nothing below 10% -- they did nothing to tamp the frenzy that's been going on. It is the frenzy that makes me dislike large parts of this market.

Now, I have to figure that these deals will simply be accidents waiting to happen when the follow-on offerings occur.

I think the FireEye (FEYE) deal awoke the fear in me. The deal filed when the stock was at $96, then it was priced $82 and then it broke down to the $60s, and it was like nothing bad happened. That's just the way it was in 2000. We saw secondary after secondary in rapid fashion, all of which were like FireEye: priced high, sold low and then total breakdown with the insiders glad to get something out of their endeavors.

[Read: Ford, GM, Toyota Shares Could Rev on Auto Sales Report]

Must Read: Kass: How I Shorted Tesla and Survived

Keep track of this. It won't happen overnight, as there are many months to go and many lock-ups to expire. But this much supply can hurt the established players -- notice how has been trading? -- as well as the newbies.

I don't like it.

It's negative.

No two ways about it. Supply can kill the bull. It certainly did back then.

The IPO Window Lets In a Chill

Posted at 11:55 a.m. EST on Wednesday, March 26, 2014

Flat one, froth nothing. That's the score right now in this endless series of games between the parts of the market that are cheap and represent value, and the hyped, the overpriced and the over-loved.

Just take a look at King Digital (KING). Here's a profitable company that has mastered the art of mobile gaming but, arguably, is a one-hit wonder. It's a $6.2 billion company with a stock that immediately broke the print price, meaning it dove instantly below where the IPO was priced.

Now some of that is due to the bankers misjudging the market. Some of it is skepticism from the horrendous Zynga (ZNGA) deal, the last time a big gaming play came public. But most of it is common-sense skepticism, people just being simply unwilling to speculate on just anything. That's the case even though, in an irony of ironies, this company is actually profitable, as opposed to many of the software-as-a-service cloud plays and developmental biotechs that may never have a product that passes FDA muster. So in that sense, you have to recognize that there is some sweet justice here. Zynga is still too fresh in people's minds.

[Read: Why You Should Short Hog Futures]

Too bad that the dot-coms aren't as fresh.

Now I have been adamant that there can't be two markets, a froth market and a stable, flat market. The froth market is made up of marijuana stocks, hydrogen fuel cells, software-as-a-service plays, data analytics businesses and too-young biotechs.

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


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs