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Cramer's Mad Money Recap: Activision Blizzard, Wendy's

Jim Cramer says that eventually, these meme stocks will run out of steam. But we're still in early innings, and these giant moves are likely to keep happening.
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Sometimes stocks go higher due to dissembled logic, Jim Cramer told his Mad Money viewers Tuesday. That's certainly the case with the Reddit crowd, as those traders will bid up a stock for just about any reason.

Case in point: Today's monster surge in the stock of Wendy's  (WEN) - Get Wendy's Company Report. There are no less than 28 professional analysts covering Wendy's, and most of them are bullish on the stock after every earnings report. And most of the time, no one cares.

But today, Reddit user "Chillznday" proclaimed on the WallStreetBets forum that Wendy's is the "perfect stock," largely because the restaurant chain's summer salad is just that good. This well-reasoned logic sent Wendy's shares soaring 25.8% by the close, taking most of the restaurant sector along for the ride.

Cramer's been a long-time fan of Wendy's, calling it an established company with a great CEO and an activist investor dedicated to rewarding shareholders. But while he believes in the company for its management and earnings, those metrics don't matter to the WallStreetBets crowd. For them, it's all about the salads.

In the end, it doesn't matter why people are buying shares of Wendy's, only that they believe in the company. It doesn't matter if you're a home gamer or a professional analyst. Every shareholder made a ton of money Tuesday.

Eventually, these meme stocks will run out of steam, Cramer concluded, but we're still in early innings, and these giant moves are likely to keep happening.

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Executive Decision: Activision Blizzard

In his first "Executive Decision" segment, Cramer spoke with Bobby Kotick, CEO of Activision Blizzard  (ATVI) - Get Activision Blizzard, Inc. Report, the video game maker with shares up 37% over the past year.

Kotick attributed Activision's success to their continual focus on their customers. He said over 425 million people play their games in 190 countries around the world. Whether you're a serious competitor or just need a quick distraction for a few minutes, Activision has games customers love.

Kotick also commented on his recent pay cut, saying that Activision is a performance-based company and salaries aren't a performance metric. He was happy to align his salary to the 25th percentile of their industry and instead, rely on stock-based compensation that only rewards him when the company exceeds its goals.

Finally, Kotick spoke about their Call of Duty Endowment, which provides assistance to veterans. He said veterans are three times less likely to find work after that return from service and the endowment hopes to help rectify that statistic.

Executive Decision: Thor Industries

For his second "Executive Decision" segment, Cramer spoke in person with Bob Martin, president and CEO of Thor Industries  (THO) - Get Thor Industries, Inc. Report, the RV maker that just delivered a stunning 95-cents-a-share earnings beat. Martin drove from Indiana to New Jersey in his own personal motor home to mark the occasion.

Thor cannot keep inventory on dealers' lots, Martin said. Everything they're building today has already been sold and their backlog extends into next year. Last year, people bought what they could, Martin said, but this year, they're ordering what they really wanted.

Demand extends across Thor's entire product line, Martin added, from entry-level trailers to their biggest motor homes. In the U.S., travel trailers account for 80% of the RV market, with customers typically trading up every three to five years.

Outside of the U.S., Martin noted that sales in Europe are also strong, with factories working at capacity to fill demand. People are rediscovering the great outdoors and Thor is there to help, despite semiconductor shortages and the deep freeze in Texas earlier this year.

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Executive Decision: Biohaven Pharmaceuticals

For his final "Executive Decision" segment, Cramer checked in Dr. Vlad Coric, CEO of Biohaven Pharmaceuticals  (BHVN) - Get Biohaven Pharmaceutical Holding Company Ltd. Report, which just today received FDA approval to use its drug Nurtec ODT for the prevention of migraine.

Coric said they've been working for years to get to today, where they can offer patients one pill for both the treatment and prevention of migraine. He said the drug changes the paradigm for how migraine will be treated going forward.

Coric added that prevention is critically important because most patients know what their triggers are and know when migraine is about to hit. Now, instead of suffering, they can simply take one pill to safely and effectively stop the event before it even starts.

Biohaven is working on a lot more than just migraine treatments, Coric added. He said his company has vast expertise in lots of neurological conditions, and while it won't find treatments for all of them, he's confident that more drugs like Nurtec ODT are in its future.

Cramer's Playbook: Mastercard

In his "Cramer's Playbook" segment, Cramer proclaimed that the goal of business isn't just to make widgets, it's also to make our world a cleaner, healthier and safer place for everyone.

Business is the greatest force for social change, Cramer reminded viewers, which is why today's announcement that Mastercard's  (MA) - Get Mastercard Inc. (MA) Report foundation is donating $1.3 billion to COVID relief in Africa is so important.

Today's announcement give Mastercard a seat at the global table, Cramer said, and it keeps the company top of mind with consumers around the world. More importantly, when it comes to recruiting the best talent, people are going to want to work for Mastercard, giving them the competitive edge for years to come.

Lightning Round

Here's what Cramer had to say about some of the stocks that callers offered up during the "Mad Money Lightning Round" Tuesday evening:

Kimberly-Clark  (KMB) - Get Kimberly-Clark Corporation (KMB) Report: "I'm concerned. That was not a good quarter. That was a bad quarter."

Allegiant Air  (ALGT) - Get Allegiant Travel Company Report: "I like it. I like pure-play travel stocks. "

Gap Inc.  (GPS) - Get Gap, Inc. (GPS) Report: "Gap is reinventing itself and the stock is going higher"

Pitney Bowes  (PBI) - Get Pitney Bowes Inc. Report: "They are engineering a turnaround but I don't know if it's for real yet."

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At the time of publication, Cramer's Action Alerts PLUS had no position in the stocks mentioned.