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Cramer Sweats Out the Mister Softee Surprise


At 4:55 p.m. I got the word. "


preannouncing." One of our brokers had seen the announcement on some Web page. Five-fifteen conference call. Greg Maffei. Oh my God.

I looked at my trading sheets. Like I had to. I am always long Mister Softee. Except during that bizarre period when they were calling

Attorney General Janet Reno

mean names, Mister Softee has been a constant, a line on my sheets as surely as it says "

Cramer, Berkowitz

" at the top of the page.

"Is it trading?" I asked my trader Mark Kantor.

"Small 84-and-a-half bid. No, that's gone. Small quarter bid." Down three-quarters of a dollar already, without even knowing how bad. I didn't want to seem heretical, but it flashed through my mind that maybe it was something unrelated to earnings, or something not that negative. But then I realized I was just kidding myself. Just wishful thinking.

"Offered at four-and-half, no bids," my trader said, common parlance for stocks that are about to report some bad news.

Wait a second, I thought to myself, if it were negative, wouldn't they have to stop trading? But then I started recalling other times when there was a conference call preannouncing bad news and nothing was halted. There goes that hopeful thesis.

"Small four bid, offered at a quarter," was the staccato response to my thoughts from my trader. Going lower. Acting bad and going lower. Like every other stock that preannounces.

Do I whack the bid? Given the size of my position, what does it matter? Should I call


? I thought to myself. Oh great, all of that

TheStreet Recommends

Risky Business

jazz I

talked about on the site, and I ended up crashing the Porsche in the drink after all. With no time to make it back up.

My mind recalled that

piece by

Alex Berenson

about a month ago that talked about how the market won't go down until Microsoft blows up. And here it is blowing up. No


here. Mister Softee's not on the 52-week-low list with no room to go lower. More like the 52-week-high list. And hasn't it been acting doggie lately, not keeping pace with the rest of the market. Should have seen this one coming. Mile away.

I scanned my sheets for the tech on it, the collateral damage tech that would be taken down in the Mister Softee-led holocaust. Oh geez, I just loaded the boat up, knowing I could get away with tech for a couple of days. Classic; Jeff, the disciplinarian, goes away, and next thing you know I'm getting clipped in




because of Microsoft. Worse, I'm getting crushed in Microsoft because of Microsoft. No collateral damage there. Ground zero. Target of the blast itself.

I silently dial into the conference call. My line rings. It's my wife.

"Tell her I'm in a meeting," I say. Bad enough that I have to admit I am long tech to Jeff, all I need to really ceee-ment my relationship with my wife is to tell her I am waiting at work for a Microsoft conference call, because I am long it, and I don't know what they are going to say but, from the looks of the trading, it's none too good.

My wife had a lawyerly approach to our business, never ask a question you don't know the answer to, and never have a position on that you don't know everything about. I could just hear her berating me for being long Microsoft and not knowing why an emergency conference call had been held.

At 12 after 5 a voice comes on the line and says the conference call will start in 10 minutes. The 84 bid's getting decked. People want out so badly you can taste the



Kentucky Supper Club

aspects of this shortfall from miles away.

I have to go into a meeting in my office, off the trading desk. I have to get off the call. I will pretend at the meeting that it doesn't matter what Mister Softee says. Or at least I will try to pretend. I can't even hide my feelings on national TV when one of my longs blows up or does a stupid acquisition, how can I hide the pain of a Mister Softee shortfall?

No bids, my trader says right before I go in. Grim. Brothers Grimm. I am a dead man.

Five minutes into my meeting, my trader's making thumbs-up signs and grinning. My research guy, Nick Maier, is smiling. I step out of my office for a second to see what all of the smiles are about.

"Upside surprise, Mister Softee," Nick says.

Before I can even realize how much money I will make, I had the feeling that must run through these death row guys on not just a stay, but an outright grant of clemency. Free as a bird.

"You have got to be &$%^$& kidding me," I said.

Nope, came the chorus.

"Then take some, take it to $88 for pete's sake. Get it in. The world's looking the wrong way." I yelled.

And we did. Up to $87.

I pounded the glass. I whooped. I had a new lease on life. I was long and getting longer. I was thrilled.

It was only much later in the evening that it hit me, why this market keeps going higher without pause, why it makes so much sense to be long: Five minutes before the greatest, most profitable company on earth was about to announce a better-than-expected quarter, the world was trying to short it.

The world was caught leaning the wrong way.

The world was picked off, leaning toward second.

And the world series was won by the bulls.


Random musings:

Dow Jones

didn't listen to me when I said to can the


spending program. They didn't listen to me when I said to sell Dow Jones Markets when the selling was good. They didn't listen to me on my vision of the Internet. But now they have finally listened to me. They gave those two midday pale faces from Dow Jones newswire who appear on


some makeup.

Guess that's a start!

James J. Cramer is manager of a hedge fund and co-chairman of At time of publication his fund is long Seagate, Microsoft and 3Com. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Mr. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he welcomes your feedback, emailed to