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
TheStreet Open House

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

 

Search Jim Cramer's "Mad Money" trading recommendations using our exclusive "Mad Money" Stock Screener.


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 Baidu.com (BIDU) and JD.com (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.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management 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 extraordinary 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

Jim Cramer's protege, 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
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,265.99 +109.14 0.64%
S&P 500 2,011.36 +9.79 0.49%
NASDAQ 4,593.4250 +31.2360 0.68%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs