Why Jim Cramer Says Sell Family Dollar (FDO) Stock

NEW YORK (TheStreet) -- TheStreet's Jim Cramer says Dollar General  (DG) can pay up to $90 a share for Family Dollar  (FDO) and still make money on the acquisition, but Family Dollar is now talking about antitrust concerns, which is a red flag for Cramer.

When he hears "antitrust" and knows that the lower class goes to dollar stores, then he thinks Family Dollar is onto something and that Dollar General would be blocked from acquiring the company. Cramer says Dollar General could keep Family Dollar in limbo for a long time or could simply destroy it if it wanted to do so. Dollar Tree  (DLTR) , though, is ready to go.

Cramer said he initially dismissed the antitrust concerns, but now he thinks they are real and urges caution for investors. In fact, he advises selling Family Dollar stock.

Must Watch: Jim Cramer Says Family Dollar's Antitrust Issues Are a Red Flag

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FDO Chart FDO data by YCharts

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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