Jim Cramer believes some traders who bought calls on First Data (FDC) - Get Report "might have jumped the gun last week." Private-equity firm Kohlberg Kravis Roberts is buying the credit-card processing company for $29 billion, a premium of 26.4% per share over Friday's closing price.
"I looked at the option volume, and the thing that really struck me is that it was so brazen," Cramer said on TheStreet.com TV's Wall St. Confidential
Web video Monday. "There was no reason to be buying those calls other than if you had the inkling."
Goldman Sachs came out with a "very important" note saying this whole industry could be slowing, he told Gregg Greenberg, the host of Wall St. Confidential. "The quarter for First Data was clearly not going to be great -- they are losing a lot of customers," Cramer said.
Although people are calling the takeover natural, "that's completely untrue," he said. A takeover is natural when the cash flow is increasing, not decreasing, or when the company is cheap on an earnings basis, not expensive, Cramer explained.
"First Data is a crummy company," he said. "They've done a lot to try to make the company better."
Cramer said he hopes the government will look into the matter and freeze the assets until it figures out who knew about the deal and who didn't, given that the call-buying was so blatant.
He said he likes
as plays on the deal because the deal verifies that there is a huge number of transactions that take place in retail.
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