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NEW YORK (TheStreet) -- Has Jim Cramer become too bearish on stocks? Has he gotten too negative? Those were the questions he pondered on Mad Money Monday as he recapped the day's merger and acquisition news.
Cramer reminded viewers that every stock has two prices: the one the market gives it and the one other companies are willing to pay to acquire it. Those prices are becoming less in sync, Cramer continued. Tyson Foods (TSN) is now willing to pay $63 a share for Hillshire Brands (HSH), a 70% premium from where the stock traded just a few weeks ago.
When Cramer featured Hillshire as a potential breakup story a few months ago, he valued the company at a mere $40 a share. Today's news made Cramer question Friday's feature on Kraft Foods (KRFT) and the valuations of its many brands, he said.
But it's not just the food stocks. Merck (MRK) announced that it's paying $24.50 for Idenix Pharmaceuticals (IDIX), a stock that traded at a mere $7 a share. Analog Devices (ADI) is paying up big for Hittite Microwave (HITT), another under-the-radar stock.
Then there's activist investor Carl Icahn taking a stake in Family Dollar (FDO), sending those shares up 13%. Cramer said Family Dollar is far from best-of-breed.
But with all this activity, Cramer said it's clear the true valuations of these companies are a lot more than the markets are willing to pay, which means it's time to go back to the drawing board to figure out what they're really worth in today's environment.
Executive Decision: Jonathan Bush
For his "Executive Decision" segment, Cramer sat down with Jonathan Bush, chairman, president and CEO of Athenahealth (ATHN), the electronic health records company whose stock has become a battleground of late, falling from $204 to $128 a share after activist investor David Einhorn made negative comments about the company.
Bush addressed the controversy against Athena by referencing his book, Where Does It Hurt?, which looks in depth at the battle between the new cloud-based software model for health care versus the entrenched enterprise software model. He said the old model shows a lack of enthusiasm and courage, and in a 21st century health care model systems need to be connected and patients need to be able to shop around and easily get their data from place to place.