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Jim Cramer's 'Mad Money' Recap: Stop Worrying About Alibaba's IPO


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NEW YORK ( TheStreet) -- Never in four decades of investing has Jim Cramer seen the markets so focused on a single IPO, he said on Mad Money Thursday. At $68 a share, Cramer said he's a buyer of Alibaba, which will trade under the ticker "BABA" starting Friday.

Toall the skeptics, Cramer offered up his answers to the top 10 worries about Alibaba.

1. Valuation. Cramer said even at $80 Alibaba still has a price earnings multiple of 32, which is cheaper than Facebook (FB)  and Twitter (TWTR) , two stocks Cramer owns for his charitable trust Action Alerts PLUS.

Read More: 10 Stocks George Soros Is Buying

2. Ownership. Cramer said that some charge Alibaba's ownership structure is too complicated but does it really matter?

3. Corporate governance. Cramer said investors tolerate the Chinese risks with (BIDU) and (JD)  so why not Alibaba?

4. CEO Jack Ma. Again Cramer asked, so what? Many companies have dual classes of stock, including Google (GOOGL) , another Action Alerts PLUS name.

5. Valuation (again). Cramer said the size of Alibaba's deal doesn't matter, all that matters are its earnings, growth and gross margins.

6. Alipay. Cramer said Alibaba's ties to Alipay are indeed a risk, although he views it as a small one.

7. Insider selling. Cramer said he's also not worried about insider selling on the deal. If anything, the market needs more shares of Alibaba.

8. Dot-com Bubble, take two. Cramer said Alibaba is not the top of the market. Back in 2001, companies coming public were not profitable. Alibaba is extremely profitable.

9. Chinese ecommerce. Cramer said fears of an ecommerce slowdown are more than offset by the 50% of China that's not even online yet.

10. Chinese economy. Yes, the Chinese economy may be slowing, but Alibaba is also a wholesaler to the rest of the world, mitigating those risks.

Read More: Alibaba Ready to Soar, Prices IPO to Raise $21.8 Billion

Cramer said his bottom line is he's a buyer of Alibaba up to $80 a share given its valuation, growth rate and its excellent gross margins.

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