Stocks wavered Tuesday as investors bet on the reopening of the U.S. economy and weighed earnings from retailing giants Walmart (WMT) - Get Walmart Inc. Report and Home Depot (HD) - Get Home Depot Inc. (The) Report.
TheStreet's Katherine Ross and Jim Cramer discussed breaking news in the stock market. Cramer spoke about the reported deal between Amazon and MGM Studios, AT&T's dividend cut and markets on Tuesday.
Amazon and MGM Studios
Amazon (AMZN) - Get Amazon.com Inc. Report reportedly is in negotiations to acquire the film studio Metro-Goldwyn-Mayer for between $7 billion to $10 billion according to media reports.
Cramer said Amazon can do whatever it wants, it controls its own destiny.
"They have a huge amount of cash, they have a stock that people want. When you decide to go media, it's good to have your own studio. But I think they've done quite well without it.
But some of their stuff is inconsistent. I do think it would be terrific if they bought MGM because they can do more with it than most others" he added.
AT&T's Dividend Cut
AT&T (T) - Get AT&T Inc. Report will cut its payout ratio by more than 20 percentage points in the wake of its media asset merger with Discovery (DISCA) - Get Warner Bros Discovery Inc Com Ser A Report, the company indicated Monday, crashing out of the list of so-called "dividend aristocrats."
AT&T said its dividend payout ratio, which was around 63% in the previous quarter, will be "re-sized" to between 40% and 43% to account for the distribution of WarnerMedia assets into a new company. This will be based on an anticipated free cash flow of around $20 billion.
Cramer said AT&T's dividend cut is just a travesty.
"Corporate America does things that would never happen in the NFL. I don't think there has been any other destruction like this since General Electric," he added.
A lot of people own AT&T because they thought the stock was a high-yield bond and they would get income and also some cap appreciation because of the Time Warner assets which were fast-growing, explained Cramer.
"It seemed like a pretty reasonable thing to expect, but AT&T didn't do it correctly and didn't offer much insight ahead. So they've burned a lot of people who were in it just to get the yield," Cramer said.
Cramer said AT&T is continuing to "cascade."
"It's rather incredible the arrogance here, the destruction, the recognition, the failing to recognize it. I'm glad the stock is finally bottoming for all the people who have bought it or owned it beforehand before they right size the dividend. I'm hoping it stabilizes just because so many people are in it," he added.