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NEW YORK (TheStreet) -- Has Jim Cramer become too bearish on stocks? Has he gotten too negative? Those were the questions he pondered on Mad Money Monday as he recapped the day's merger and acquisition news.
Cramer reminded viewers that every stock has two prices: the one the market gives it and the one other companies are willing to pay to acquire it. Those prices are becoming less in sync, Cramer continued. Tyson Foods (TSN) is now willing to pay $63 a share for Hillshire Brands (HSH), a 70% premium from where the stock traded just a few weeks ago.
When Cramer featured Hillshire as a potential breakup story a few months ago, he valued the company at a mere $40 a share. Today's news made Cramer question Friday's feature on Kraft Foods (KRFT) and the valuations of its many brands, he said.But it's not just the food stocks. Merck (MRK) announced that it's paying $24.50 for Idenix Pharmaceuticals (IDIX), a stock that traded at a mere $7 a share. Analog Devices (ADI) is paying up big for Hittite Microwave (HITT), another under-the-radar stock. Then there's activist investor Carl Icahn taking a stake in Family Dollar (FDO - Get Report), sending those shares up 13%. Cramer said Family Dollar is far from best-of-breed. But with all this activity, Cramer said it's clear the true valuations of these companies are a lot more than the markets are willing to pay, which means it's time to go back to the drawing board to figure out what they're really worth in today's environment.