"They'll mess up the market": Jim Cramer on the moment-of-truth effects of the WeWork IPO.
Similar to the Fed, Jim Cramer, as some would say, has a dual mandate: to run the markets and pump up. He is definitely a great entertainer. But this morning, in CNBC's "Squawk Box", he has expressed his concern about the stock market that is in the lead so clearly that a single, chaotic and outrageous company that goes public is messing it up "Market.
He wants the WeWork deal to "go away," he said. "I do not want WeWork, I mean, I do not want WeWork at all costs."
There are not many companies that rushed to go public with more losses before IPO than WeWork – Uber was perhaps the only one. [1
It is the entire approach of WeWork CEO Adam Neumann to fully control the company and rip off shareholders today. WeWork – under its new name The We Co. – announced plans to list its shares on Nasdaq in the revised IPO application (S-1 / A). In an IPO, new investors buy stocks that sell the company and / or insiders, and through this tactic insiders can unload a portion of their stock and the company can raise a ton of new money from new investors to burn – and that's exactly what burn What WeWork will do with it.
One month ago, I briefly linked WeWorks initial public offering: In the hilarious IPO filing, WeWork dreams of $ 3 trillion in revenue, but has billions of losses. Massacre of red ink in the second half. But I will not do Pooh-Pooh today, I'll let Cramer do that. He is much more colorful than me.
But one thing I would like to emphasize: The collapsing "valuation" of the company, which results from the future IPO price. Almost every day there is a new number, and investors refuse to nibble, and the next day there is a lower number that is billions below the previous figure, and investors still refuse to nibble , And then there's an even smaller number, as if it were a race where this stock belongs.
WeWork was rated $ 47 billion as a private company. In the final round of fundraising, investors who put money into the company paid a price per share that valued the entire company at $ 47 billion. All this is a lot of hocus-pocus negotiated behind closed doors to stir up turmoil among the next group of investors, now including IPO investors.
Until this morning, the IPO rating had fallen to "as" According to information from CNBC, Reuters and other companies, it is only $ 10 billion. From $ 47 billion to $ 10 billion would mean a drop in value of 79 percent.
Cramer fears that this misunderstood deal, "going down, down, down," as he said, will take the market by itself, had worked for years to pump and hype. And that's what he told CNBC:
"We do not want this deal. I wish they would just go away. "
" I just want it to go away. I do not want WeWork. I mean, I do not want WeWork at all costs. It's to the top of the world. "
" It sounds like a crybaby, but there are certain deals, and they can really take any market out of the air. "
" You can just say: "We are terrible and wait until we are well again." Why do they just have to go down, down, down [with the IPO price]?
CNBC Co-anchor: "Because they need the money."
"I know, but we do not want to give them any money. They will only mess up the market.
And he admonished everyone who watched the show, "Please stop the WeWork business! Let's stop WeWork.
So worried is Cramer that this misunderstood WeWork IPO business in itself may be the last straw to break the market.
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