"The IPO market is not a monolith," Jim Cramer said on TheStreet.com TV's Wall St. Confidential
Web video Wednesday.
He suggested forgetting about the "blank-check companies" and those that are losing a lot of money, and that don't forecast profitability in 2008 or 2009. Cramer advised looking at the companies that are predicting profitability.
There were 67 initial public offerings totaling $11.9 billion in the first quarter, said Gregg Greenberg, the host of Wall St. Confidential. "It's been a pretty good quarter for the IPO market."
"The market is up very big," Cramer agreed. However, he said he's been reading many articles that all say this is another mania. But if people take a look at the "so-called mania deals, they're all awful and nobody's buying them," Cramer pointed out.
"There's always a presumption that we are at a peak when so many unprofitable companies are coming public," he said. "Look at how the unprofitable companies are doing -- they're dogs and no one wants them."
Concerning the other "big theme" in the current IPO market, blank checks (development-stage companies without a specific business plan or purpose that plan to merge or acquire an unidentified company or companies), Cramer said that the
Securities and Exchange Commission
unfortunately has always maintained a "hands-off policy" about whether these companies should go public.
"Someone should be warning people that these IPOs are bad, but no one is doing it," he said. "There's no reason to participate in these at all. Everybody has to recognize that there is no gun to your head to buy these IPOs."
On the other hand,
is a company Cramer said reminds him very much of
. Even though it did not report a profit, he believes "it could be gigantic."
"This is not a mania company," Cramer said, advising people to get in before it goes up big. "If you wait until these companies are profitable, and many of these will be next year, you're going to pay much more."
People really have to understand this, he said, and be a "little more sophisticated" and not believe the articles that say there's a mania. "Just believe the articles which say this company is better than others," Cramer said.
Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for
Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. Click
here to order Cramer's latest book, "Mad Money: Watch TV, Get Rich," click
here to order his book, "Real Money: Sane Investing in an Insane World," click
here to get his second book, "You Got Screwed!" and click
here to order Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he invites you to send comments on his column by
TheStreet.com has a revenue-sharing relationship with Traders' Library under which it receives a portion of the revenue from Traders' Library purchases by customers directed there from TheStreet.com.