Jim Cramer Picks Twilio as Good Buy Despite Recent Controversy

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Jim Cramer is sticking with fast-growing cloud services provider Twilio (TWLO) - Get Report , arguing that a pair of high-profile mistakes have not dimmed the explosive growth potential of a tech company that has rocketed over the past few years to sales of more than $1 billion.

Typically, the mistakes made by Twilio CEO Jeff Lawson would warrant ejection from the Action Alerts PLUS portfolio, Cramer told members of the AAP investors club during an exclusive members-only call Wednesday, Nov. 13.

Lawson last quarter first had to cut guidance and then confessed to an error in how the company calculated its earnings.

"You can make mistakes and Jeff Lawson, the CEO, made some doozies," Cramer told AAP club members. "Now I know it is easy to say that this one should just be kicked out and we own the mistake and move past it. Why not?"

Instead, Cramer said he has decided to stick with Twilio for two big reasons: his belief the leadership of Twilio's CEO and the increasingly integral, behind-the-scenes role played by the company in keeping the online world humming along.

"My problem with that is that I genuinely believe in Lawson. He's created a company that out of nowhere has 172,000 active accounts, nearly triple the roughly 61,000 they had at the same time last year," Cramer told AAP Club members. "Twilio literally has more business than it can handle."

Beyond Lawson's leadership, Twilio's cloud services and platform have become an increasingly crucial part of the modern business world, Cramer noted.

The company's cloud services help software developers put voice, message and video capabilities into apps, powering, for example, the text saying your Uber driver has arrived.

"This is a company that is instrumental to the success of any small- to medium-sized business that wants to get the word out to people about their wares," Cramer said. "I don't think there is a better way to stay in touch with a customer than using a Twilio platform."

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