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

Jim Cramer: Tableau Will Surely Set the Tone

NEW YORK (Real Money) -- When I say, "Supply kills," and you aren't exactly sure what I mean, I should add, "Go Google 'supply of Tableau Software (DATA - Get Report).'" Here's a company that has done everything right for the growth momentum cohort, not unlike its compadres in crime. The stock had rallied tremendously this year, running from $67 to $102 and peaking in the last week of February, same as all of the other highfliers.

Then it crashed back to Earth, or at least to $55, before the company reported Tuesday night. Once again, as it had always done since coming public a year ago, Tableau delivered the superior growth for which it's been known. Sales grew at more than 80%, and the company struck many huge deals.

Now, in the premarket, it is trading up. Can this move be trusted? Let's look at the history.

The last time Tableau reported a similarly amazing quarter, back on Feb. 4, the stock soared 13% -- from $79 to $89 -- in one session. It kept climbing, too, peaking at $102 near the end of February like just about every other stock in this sector and its close relations. That means cloud computing, software-as-a-service, big data and network security.

Must Read: Jim Cramer: Undervalued No More

So, then, what went wrong? Why didn't it continue? I think that, because the stock got very expensive vs. historical parameters, there was a ton of insider selling after the quarter. Then the company dropped a 4-million-share follow-on offering, pricing the darned thing at $89.35. Yes, supply hit the tape from everywhere, and this just plain overwhelmed demand.

It's really been bombs-away ever since. Tableau's sickening slide has looked like all the others: relentless selling, perhaps spurred by margin calls, then a little lift -- followed by another barrage of selling.

This one barely participated in the post-Yelp (YELP - Get Report) earnings rally, in part because its cohort of business-intelligence software has been soft of late, even as that's not been the case with Tableau specifically. But Tableau's giant offering really laid to waste all who have tried to catch the bottom here. That huge swath of stock simply couldn't find a home, and the stock's been a hot potato ever since. It didn't help, for certain, that the offering came during the week of March 20, the heaviest week for initial public offerings in seven years.

I have often thought of that offering as a price-discovery event. Look, we knew the stock shouldn't have run all the way up to $102 after that last quarter -- but what was the real price? Where do large sellers and buyers meet? What's it really worth?

Four million shares were priced well off the high, and you tend to think that this is price -- or, if anything, you'd think it's below the real price and that the stock will bounce back up. Nope, the stock traded down to $75 four sessions after that $89-and-change pricing. Straight line.

A few weeks later, it would all be gone and then some: The stock closed Monday off 15% for the year.

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 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

Our Tweets

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs