>> what? >> darden? >> the guy that did the clip. >> oh, john oliver. >> john fitz, great. darden. >> i'm melissa lee. thanks for watching. see you back here tomorrow at 5:00 my mission is simple, to make you money. i'm here to level the playing field for all investors. there is always a bull mark somewhere and i promise to help you find it. "mad money" starts now! hey, i'm cramer. welcome to "mad money"ful welcome to cramerica. other people want to make friends. i'm just trying to save you some money. my job not just to entertain but to teach you and coach you how this works. call me or tweet me@jim cramer. we've got an amazing acquisition i situation brewing here with this ali baba ipo. and it's the cause of today's weird action, where the dow

actually gained 44 points. the s&p declined .23w0u6r789s tech play nasdaq got hammered. finishing off 1.07%. down much more, because as i have been telling you for weeks and i have been worried for weeks and i've made it clear to you again and again, fund managers are going to sell, sell, sell, all those stocks, including many of your favorite tech names in order to raise money to buy ali baba, the day it comes public, no matter what the price, including the higher 66 to $68 range announced tonight or maybe even higher. you see the stock of the chinese ecommerce tighten even at the seemingly lofty levels will still be very cheap, not just a revenue clip but on actual earnings growth, making ali baba a better investment than just about every other large

capitalization stock out there that these managers hold. so it will be a magnet for huge funds to pick up. that's why they're selling their other stocks to come up with as much ali baba as possible. there is not as much new money to transfer to pay for the darn thing. let's say ali baba will raise money in an ip or, then we tend to thing hedge funds and mutual funds have to raise about $23 billion in order to get the stock on the deal. that's the wrong way to look at it. that's much less than is actually being raised. it's something like ten times that is being raised. here's why. the more people talk about how exciting this deal is, they're really talking, you know that, and how it's worth much more than it's going to be priced, the more the funds and individuals will clamour for the stock. as they do, we begin to hear while the deal might be priced at $70 bucks and the demand could far exceed the supply at that price, each majork will get a fraction of what they like and

minor accounts or maybe you might get next to nothing or nothing at all t. fact is, under writers give out big amounts to big first, nothing to little ones. that's the way the business works. like it or not. another way this business works, though, is that if money managers really love ali baba, they won't be satisfied with the amount of stock they get from the dealer maker on the ipo. they won't like it. they'll be upset. let's put our heads together. consider a giant mutual funds that manages billions of dollars. that fund will be put in for what's known as 10% of the deal. that's the way they typically do it in order to indicate real interest in ali baba. no one expects to get 32 million shares. that's how the moving dance proceeds. so then a behind the scenes conversation occurs. the deal manager says to the fun manager, come on, look, that's ridiculous, this ali baba is tight as a drum. how much stocks do you ultimately want to end up with

when the day is over? the manager replies, i'd be happy of a toll of 5 million shares. >> that might be a typical amount. the view then says, look, you know what, i know you are going to stick with it. i can probably get you a million shares in the ipo. that's probably the right ratio, 5 million to get a million. the account will be thrilled, because he knows this stock is wore atmosphere heck of a lot more than that. how does he know? simple arithmetic. the company is composed to earn roughly $2.50 cents a share. the fastest known company is facebook, which sells at roughly 40 times earnings. that means these managers have been comfortableplay paying up to $100 per share the same amount as facebook and maybe much more profitable. so of course you'd be willing to pay at least the same multiple for ali baba as facebook. it's apples to apples, so what could happen is that fund

manager gets its first shares on the deal. then that manager goes and pays up in the open market for the rest 4 million sharesful he might be willing to pay as much as $100 bucks. now we are talking 70 million on the 1st million at $70. up to $400 million on the rest. i know these are huge numbers. but that's the math, people. even if they ultimately pay $1,000 in the after mark, they will get an abundant $94 million a shareful these numbers are no doubt at the high end of the ranges. i'm not exaggerating. it could happen. they're well within the realm of the possibility. when you get that kind of talk, it tends to draw in tens of thousands of other buyers, big hedge funds, small mutual funds, individuals of all shapes and sizes and depending on their consistent business, they might get a bit of stock. i said to myself, wow, this one's too hot to handle t. dealer, though, is focused on

giving stock to the kind of first-hand i just described. because it is the dealer's job to get the stock placed with the best holders, what's the best holder? those are people who buy more of the stock when it opposite and not flip the stock they got. if the dealers correct the stock wage to holders, not flippers, the stock will pop mightily from the $70 level, because these guys won't sell at that price. ultimately that process is what makes a deal red hot. here's the problem. ali baba at $70 bucks is worth any sunday fund worth it's salt. if they want that full position, then they need a lot of cash. not just the cash on the deal. these funds, however, don't have that cash sitting around. so what do they do? of course, they have to sell something. they sell the stocks that look leak ali baba but are more expensive. i think it was darn obvious, there are immense number of stocks, as i told you what would happen, this is what i worry

about, people. collateral damage to ali baba, chipotle, facebook, netflix, salesforce.com, tes larks all of it. every one they're all being liquidated to buy some ali baba. some will be buys as you will hear later in the show. at the same time, there is one winner here, that is yahoo, which has a huge hit. huge stake in ali baba. that's why i repeatedly told you to buy it. i will spare you all the before tax and after tax discussions, so we can get to the two numbers that matter. yahoo will be selling 24 million shares. 24% of the stake, which will give them about $6 billion after taxes. the company has a $5 billion. suffice it to say if ali baba trades anywhere near the levels i'm talking about after it becomes public, the hotter price, you are basically getting the rest of yahoo for nothing, nothing, people the whole rest of a profitable company for zero. so what do you do?

again, keeping it simple, you take the term prices which values the shares at nothing. you add on ten bucks, which is the price i'd be willing to pay. ten times the $1 shareful that's the minimum i expect yahoo to make. it gives you a 52% stock. 22% higher than now. more importantly, that borrowed dime, yahoo will have $10 billion bucks. with that am of money, that i can easily buy yelp and home away. or they can buy out aol, too. give some good advertising managers there. all these would change the face of yahoo or they can take the cash and buy back stock. they've purchased more than 30% of the share cap in the last 20 years. so while there will obviously be many losers going into the ali baba deal, yahoo is not one of them, since i bet most of you won't get the, yahoo is the best

way to play. if you sell it after ali baba comes public or hold onto it as it monetizes its stake, if you go into the dandy ipo, the dam these funds should be done selling, you should do well on that, as well. later, while much of the market looked fine today, anything that looked remotely like ali baba got clobbered. two which i say, the deal will only come, this, too, will passful why don't we go to john in michigan? john. >> caller: jim, the pleasure is all mine. i love your passion. >> thank you so much. >> caller: jim, i recently purchased ford motor company in the low 17s. since then it's been downgraded. what should i do? >> all right, latin america is not good. carolina is not good and because of the tussle with ukraine and germany and the rest of europe and us, europe's not good, either. so you got these three markets

that aren't any good. can i go below 16? ah, probably not much. then you just hold onto it. it's just unexciting to me. mark in new york. mark. >> bouillon, jim. >> caller: thank you for taking my call. >> of course. >> caller: my friend said it was magnificent, any plans to franchise at all? >> i like that. this first stablg good. i love the empanadas, how can i help? >> caller: what i learned, we can figure out at a reasonable price. both the conference call, buy the best of three companies, diversify, i broke one of the cardinal rules, you should learn it quick, i didn't scale into this company average in. >> right. >> caller: my stock tonight, jim, gaining and leisure

property, glpi. >> there were a couple lee cooperman gave you that were good at the meeting. a couple that weren't so good. it's okay. i happen to like it. i happen to like it i. it like lee's work. i'm sticking with lee. people get very impatient. they shouldn't. i have been patient with lee for years. that's why i have done so well following him. thank you for those kind comments. call up the ali baba effect. stocks that look like the upcoming ipo in some way, shape or form are getting hammered. i have a stock that's been cut in half. but maybe it's too cheap to ignore. find out if you should get in before it gets taken out. whoa, don't miss my review a. company behind a new security maish that helps counterfeiting world wide and ali baba could soon be over. i am sorting through the rubble to find the stocks that could be bought. stay with me. it's cramer. we needed 30 new hires for our call center.

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♪ >> people in michigan ask me about this thing called angie's list the website where you find reviews on businesses in your neighborhood, as well as being i got to say one of the most hated stocks out there. i said i'll get back to you. angie's list is equal to a to you words. yep, it's been a total bow wow. one that's literally been cut in half since the beginning of the year from 15 bucks to 7 and change. it has immense competition. its fundamentals leave much to be desired and the company has a serious cash flow deficit. so i will not be a buyer.

but, you know what i do think this is an intriguing situation where the company could intriguingly turn itself around. if management doesn't get it's act together, can i see an acquired and making the necessary changes for them and turning this thing into a pretty interesting operation. but who would r would like to buy an acquisition like angie's list. we see small operators and user bases like angie's. just this morning we find out that price line paid $6.4 billion for open table the online restaurant table. they have it back in february, facebook shield out an astronomical 19 billion for what

what's app? then there is tumbler, the multi-media blogging platform yahoo bought for $1.1. the best is trulia. they consistently started losing money to zillow, zillow decided to acquire them for $3.5 million, game, set, match in the real estate business. ask spencer ashcroft, he's a frequent tweeter. among other things they reported six consessiontive earnings. i told you it was a dog. i think it can be valuable to a social media play that wants to get in open the local review space which is a very hot space. in the past, i said repeatedly, google or priceline should go out there and buy -- yelp sclnl which has become the online

version of the yellow pages, but better than the yellow pages ever were. it's filled with reviews from people leak you, kind of fun to go to. yelp is a $5.5 billion company. the management agree to a hefty premium. i think they want to make this grow and grow and grow. angie's list is like the cheap low rent fixer-up version of yelp. angie's list has serious problems with its business model and yelp has 132 million monthly users, in part because it's content is not free it's gated. it's a prescription business site that rates all sorts of service providers across the country. if angie's list doesn't turn itself around, a google could buy it and pick up the problems instantly and tail have a website that could potentially rival yelp. or, wait a second.

if the problems are so easy to fix, why can't angie's list solve them, itself? intriguing question? not ret torical. a lot is because this is a poorly managed company in my opinion that's embracing the wrong strategy. you can't expect the current management to change their ways if they haven't already. i welcome them to come on and explain to me why it's better than i this i. it has the prescription problem the gateing thing. they're charging a membership thing other companies give away for free. that's severely limits the size of their user base. you want to most robust population putting in news, stories, commentary second, angie's list isn't focused. they're providing reviews when smaller apps come out leash like and third is without resolving the first two problems, angie has to spend 82% on sales and marketing. that makes it incredibly difficult for the company to

turn a profit. one of the big reasons they miss the big numbers and are in the red ink. i think it's a company better for a potential inquirer, there is so much low hanging fruit here f. only someone had the brains to do it. let's say they can take down the pay wall and turn it into a free website t. answer base services are extremely limiting. angie's gets the revenue from revenue fees. that makes no sense. i bet they have many more use first they made the site free and much more ad revenue. as a part of a natifacebook or , angie's list would have access to a gigantic users, which would slash it's marking budget. we know yelp spends 50% on

marking expenses, on angie's list, it's 83%. i think can you quickly come down to yelp's level or lower if angie were to become a part of a larger internet company. it makes sense? limiting the pay wall, slashing the mark, they can become profitable almost overnight. last but not least i think the company can focus on specific mobile apps for particular industries. that's one of the reasons i like yelp so much. it's better on my hand held than my desktop. angie's has a huge edge when it comes to rating an rekrug contractors. the consequences of hiring a bad contractor can be dire like a bad meal as anyone trying to renovate their house knows. i bet a single site or app, guys coming to different businesses for you, that would attract traffic. this is something angie's list can do right now.

here's the thing. if angie's list doesn't make these changes, if it keeps going the way it's been going, then i think the stock will continue to be punished. now, it's already been cut in half, once this year and i could totally see it being cut in half again, if nothing changes. now we have a longstanding rule on this show, we never recommend takeover stocks unless you know the fundamental also are sound. at angie's the fundamentals are far from sound. if the company had different management or business model, i might feel differently. but as it is, the stock is too ricky for you. so let me give you the bottom lievenl i put on our investment hat, i think angie's can be an investment takeover. but as an investor, the company right now is doing all the wrong thing and you can't afford to wait for the situation to change or the stock to catch a takeover bidful by then angie's list can be a leg of a lot lower.

angie, listen to me, i think you need to change or your stock will keep falling and someone else will clang them for you. much more "mad money" ahead, plenty of big money managers will be selling stocks to buy into the ali baba ipo. i have a list of companies you should be grabbing up in their wake not just selling. a wall street newcomer is sporting an 8% yield. can you trust this new kicker? i'll get the fact. first it's a probable recuring theme i have been highlighting for years and years and you don't have to be a cart tracking technician to spot it. best of all, it's hang right now. stay tuned. stay with cramer. .

last wednesday night i totally over sad doughed by events. we got big fuse from jds uniphase. that's jdsu, the maker of optimal components call in all tile about it as well as making tests and measurement gear for carriers that prevent things like dropped calls. they came out and told us they were splitting the company up into two separate businesses. now you know i think that breakups are some of the most compelling stories around this mark as there are tons of companies out there for whatever

reason the stock market values the whole business as being less than the sum of its parts. you break the company up into its xeent pieces and you get a higher valuation. we've seen this again and again in the last two years ago i think it will be no different. the next breakup play that is shrinking in order to grow t. market agrees with me, which is why it is still climbing despite the tsunami of all these techs as the managers seek to sell, sell, sell, in order to raise cash for the holy grail of ali baba. to you, the problem from j. d.'s uniphase is its stock is stuck in purchasingtory for ages, when i say ages, i mean ages, from 1999 when this stock was at already have 1,182 to $13 now.

whoa! but its true. for starters, the industry i don't have all has been volatileful most of the optical players thought 2013 was going to be this great year. the upgrade cycle, though, it never materialized. partly because carriers have been spending less than expected. you know it froze a lot of spending, it was that sprint t-mobile merger and second jd's testing the measurement issue, part of the company has been lumpy, that's code word for sell, sell, sell. with less growth tan peel have been anticipating, again, that's an industry-wide deceleration, no fault of jdsus. rather than sit there and watch your stock languish, j.d. issue decided to break up the company in order to unloing the value for shareholders, like many other breakup stories, this one has an activist investor, very smart guy. sandel asset management. i talked to you about them

before. they have been pressuring the board of directors to split up the business for some time some what are the details of the split-up. why does the move make me want to be a buyer of jdsu before it splits up. it plans to spin off the commercialization and optical products business to create a component and lasers. that itself nuts and bolts of our telecom equipment, what j.d. issue called enablement with an optimal performance product checker. we know it's all about making sure carriers's networks are working, allowing them to identify and this is like a snap what a winter that has been for teco networks. what about optimum category? it's 12% of j.d. issue sales, which includes optical solutions. it's the coolest part of the whole manual, believe plef.

as well as making thin coat optimal coatings for industrial applications. j.d. expects it to be broken up by the third quarter of next year. i think you should own the stock. i expect it to rally substantially since the sum of the parts are sotp. we actually use that term. it's definitely worth more than the whole. to one denies that. we have been pushing this tleng for years. j. d. issues testing division never should have been under the same roof. these are two businesses that don't have much in common and they're in common in terms of their margins or their cost structure. the core test of the measurement business will likely have a gross margins in the mid-60s area, 60%, potentially heading as high as 70%. that's really fabulous. the optical business on the other hand has gross margins in the low 30% rage. so by spinning off the optical

zwigs division the early stage could slash the annual expenses by roughly $50 million per year, meaning it is actually cheaper to run it. it was official. it's absolutely true, just another added bonus, frankly. beyond that, though, i expect both businesses to be doing better by stand alone xaevenls let's look at optical and commercial measures, this business part is a part of a volatile industry that can be up one year and down big the next in the longer term, it will be positive with the the total optimum growing over an annual rate and the % compound rate over the same period. it used to be much more ro bust growth. the problem with the optical industry is that it has too much competition, way too many players. that's where this deal is so interesting. i think this whole deal can get

much stronger. like the airlines, the rental cars. and that will result in more rational pricing. i mention all this, because once j.d. spins off the optical business, the new company can be a consolidator. on the one hand, it would be easy to see either one can make a bid for this and will probably be added to their companies, but if it doesn't catch a bid, it will have the stale and balance sheet to make some acquisitions of its own. it is spinning off without debt. i can think of first that can easily snap this up with ease. now after j.d. issue spins out its optical dwils, what's left? the remaining company will be almost a pure testament space, with i has been the subject of merger and acquisition company. j.d. issue, after the spinoff, management believes they will be able to take market share by

focusing on the industry wide transition to software define networking, virtualization and the cloud. these are all big trends, also they'll have the security kicker that has become the way against counterfeiting the world over when revealed and not burdened in there company it's an interesting division. now let's get to the numbers. how much would it be worth post-breakup in if you estimate the business, like peers on a price-to-earnings multiple basis, the sum of the parts can be $15.23 a share, a 12% gain from these levels. i think that's too conservative. if you get more aggressive and ice the average price-to-sale multiples the optimum play, then the sum of the parts for j.d. issue could be worth $17.20 or 27.5% gain from hereful again, that grain is simply from breaking it up into two different companies. i think that $17 target is my target. here's the bottom line.

with the announcement of this breakup. i think j.d. issue has a lot more room to run. we seen how it plays stories, they have come out before. it's almost every single time we have looked at one. i bet j. d. issue will work the same way. for the, it's not going back to $1,182 when we joked j. d. s.u. meant just don't sell us. it isn't going back to the single digits, where it was sadly known as just don't stew us. they should rename it gbu. go buy us, that's what you should do. let's go to mike if nevada. >> caller: jim, tlachgs for taking my call. i'd like your thoughts on s.t. microelectronic, they're a supplier of chips to mobileeye and thanks for your insight and good humor. >> mike, you are very kind. you know, i think it's an interesting derivative play and by the way, i should look at

that, it has this really good yield. but mobile eye, itself, has eated up to the fact that mobileeye can go downful i tow that's a shocker. this stock has just moved and moved and moved so if mobileigoes down, st will go down. let's wait until after ali baba is priced. we will take a look. i will look specifically at st. let's go to sunny in my homestead of pennsylvania. >> caller: bowia, i am interested in the prft. >> i'm worried about these information consulting first. i just don't know if they're the right place to be particularly ones that do the business intelligence stocks. ly have to state away from this. i do like the cognizant acquisition. j.d. issue. thank you for taking action to unlock value to shareholders.

you listened to us,elf this program. i think this breakup gives the company more room to run. surviving the ali baba, selling tsunami. i will name the great stocks set to go on sale as money managers make room for this massive ipo. you saw a lot of that selling today. searching for attractive entry point. i'm sitting down with the company that appears to have exactly what you need. plus your calls just ahead. the lightning round is next. stick with cramer. .

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see car insurance in a whole new light. liberty mutual insurance. . >> okay at the top of the show i went over serious stocks i felt were the biggest sources of funds for money managers and need to raise capital to do so. especially as the company keeps boosting the price of its deal like it did earlier this evening. by the time this thing is done, i think it will be around 70. i hope they don't boost the number of shares. i made it clear at the top you want to play ali baba ahead of the deal, you got to buy yahoo. the more aggressive buyers could take the remainor of yahoo's have lumnous, they have been sold and send the rest to levels

where the company's core business valued it at less than nothing. that's ridiculous. at that price, some private equity firm will come in and break the darn thing up. which is why i think it will be higher by the time the deal opposite. what about the destruction left behind as money managers liquidate their positions to raise cash for the deal? liquidation is necessitated nothing the money managers own is as good as ali baba or execution. what level should we peck up here? first things first, we don't foe when the selling will stop, other than it should be over on thursday night when it's soesed to price. earlier today, they should stop the charade and price it wednesday. it's getting overheated. >> that said, there are some stocks we should probably like you into starting even tomorrow. some of these managers might finish selling early because tail be worried that they're cutting it too close and they want this money at hand at all

costs, particularly if the dealers do listen to me an price it wednesday night. the first buy, i know it's a little counterintuitive. it was barely down today. i would make it apple. off 3 cents. here's a company that got preorders for 4 million iphone 6s. the stock did nothing even though it opened up big. apple, too, is a source of fund. even though it is a winner. you should not be able to get apple after the fabulous i6 fuse the good sales are not yet in the estimates for next year's numbers. hey, look at this watch. lit go up even more. so buy apple. in next buy is facebook. i think you get it close to 70. although my charitable trust would have picked some up. down 3 bucks because i opened my bill mouth on "squawk on the street." that's a big bargain because facebook's bes is excellent.

it has similar characteristics to ali baba. you can argue i should be telling everyone to buy amazon, ali baba is a bad analogy, people. ali baba grows forecaster. it's actually profitable. only two others because i don't want to get more granular than that, to wait for the ali baba's offerings eyes, i like celgene, the analogy, the average stock and the s&p 500, what is that about? i formally say there are enough people that think it's down not because of ali baba but the generic competition for the hepatitis c drug. i want to say away from celgene, google is down 3 at one point down 6. it sells at a cheaper price tan ali baba. keep apple, facebook, celgene and google on your screen. as money managers sell stocks to free up cash, you can get an

opportunity to buy fantastic stocks that you shouldn't otherwise. as we get closer to the actual deal, i'll highlight other stocks that should be put on sale i think unfairly, too. stay with cramer. .

>> it is time. it is time for the lightning round. what's that about? it's time when i sell you whether to buy, buy, buy, or sell, sell, sell, when you hear the buzzer, the lightening round is over. we start with jeff in florida. >> caller: hey, jim, thanks for taking me call and a big sunny boo-yah from the space coast of florida. >> right back at you. i love it. boy i wish i were there. what's up today? >> caller: i know oil and gas have gone down the pipeline lately. >> yes. >> caller: my money well is deep in gel what are your thoughts. >> i like gel. few want to be in that same business, you got to get a little more growth. i like enterprise partners epd. i think it will outperform gel.

matt in california. matt. >> caller: yo, jim. is alkermes pipeline? yes, it's based in ireland, sean in florida. sean. >> caller: bay florida state seminoles boo-yah at you. >> i love it. boo-yah. what's up? >> caller: looking at solar wind incorporated. what do you think? >> management consulting, everyone says, hey, how about first solar? no, bozo. this is a key. this is a company about software tools for management. i this i the stock moves up too much. don't boy, don't buy. chris in new york. chris. >> caller: hey, what's going on, jible? it's about znga. >> i do like management. i think it's an interesting check in the game of gaming. i'll say hold onto it. >> paul in texas.

>> caller: boo-yah. >>. >> caller: the stock is on the downtrend since last may. is it time for john deere? >> it is right level, into to the the right level? i think it's too early to buy ad, i got to tell you, if someone bought a tier 92 and had to buy 79, 80, i'd say, bye, bye, bye, pick up some here and be ready to go lower. j imin alabama water up? >> caller: thank you for taking my kauchl i was wondering what your comments are on torchmark. >> they went up today. len da in pennsylvania. >> caller: hi, jim, thank you for having me on. in your opinion, my stock is. >> what? >> caller: st. jude medical.

>> david: st. jude has come do you know lot. i want to buy st. jude. i like the science, ew. the hottest game in town. >> that, ladies and gentlemen is the conclusion of the lightning round.

some companies seem hard to understand. if characteristic is so attractive, we want to len more

about them. that's how i feel ability fs investment corporation. it's one of these kind of companies. why are we interested? first it's a $10 stock. the yield, i like that, that attracts my attention, second it's a business development company that lends money to businesses that might not normally get loans, fs investment corporation is a company that came public in the spring. we know very little about it. without further ado, welcome fs investment corps who can tell us how this company works and why it might be right for the yield seekers out there. how are you? thank you. we haven't had a business development company come on and i think that our viewers need to be educated about it and yours is pretty much a classic one. can you describe why you are different from a bank, why are you different from a broker and basically why you are different from almost any other organization out there? >> well, business development companies are creatures of the 1940 act enabled by mutual fun

t. statute created bdcs since the 1960s. they have been around a wrong time. it's since lately you seen a proliferation of bdcs. they tend to be middle market lenders. >> people might not understand that term, middle market. >> the bdcs lend lick u.s. companies. we are providing capital to mom and pop, 50 to $100 net income companies. lots of different bdcs. we at franklin square are the largest sponsor of business development companies. we have about $13 billion of assets under management. we have been in the business since 2009. so the fund we listed in august of, i'm sorry in april of 2014 was our first fund. >> there will be other franklin square capitals i guess funds to come after this? >> yes. like you, we look at leveling the playing field.

our mission is bringing best in class alternatives to main stream investors. we want to give them the opportunity to invest like the big guys. we provide asset class managers to main stream america, typically large stream institutions had access to. our clients had the opportunity to invest like harvard, yale, providing unique income streels and assets and managers, in our five funds. our partner is gso blackstone. gso is the credit platform for the blackstone group. they manage about $70 billion of institutional assets. so we're providing our clients with access to a true best in class institutional manager. >> so often they say to me, jim, 8% yield at a time when such low interest rates. what itself the catch, so to speak? >> i don't really think there is any catch. at fraveng lynn square, we focus on delivering porls performance.

we provide performs best practices. since inception year e we're up 15% on annual annualized basis. gso and we built a very big lending platform. so it's a time when banks are struggling a little bit. there is enhanced regulation, they're required to have more capital on their balance sheet. so there is a little void in the marketplace and we as a bdc fill that void and we're into what we call a direct lender, making loans to middle market american companies. >> so if i own shares in fs, i own shares basically in what, in all these loans or in the company that manages the loans? >> you have to think of fs like a mutual fund. you own shares of that mutual fund. >> that mutual fund has then is a then a lender to various companies. >> got it. >> 140 loans in that portfolio. this is what we call the leverage credit space. >> right. >> so these are non-investment grade companies, which look to

us to be their principle lender. we talk advantage of the premium and yield ability 8.5%. >> last question, if interest rates were to spike higher, i'd have to think people would be worried. >> that's a great question. people look to us as actually a ledge against rising interest rates inflation. most of our assets are floating rate. so we're done just fine in a historically rising environment. we are looking for, that's a great environment for us as rates go up. >> that's terrific to know. i hope you guy versus learned it. i am learning, too, ashlt this sometimes we have to interview with a senior person and we can learn about it. it's michael foreman, chairman, ceo of fs investment corps. take a look at it. you will notice the companies they invest in, 8.5% yield could

interest you. stay with cramer.

. >> all right, they bumped the price of ali baba from 66 to 68. guy, i got to tell you, they probably do this at 68 to 70. we price it at 70. what you need to know is that

yahoo is a decent proxy for it. more important the selling you saw all over the place, that's because people can buy stock in the after market. i promise to find it just for i promise to find it just for you right here >> narrator: in this episode of "american greed: the fugitives," flying high with jack utsick. this former pilot's living a $300-million dream. he's one of the top concert promoters in the world. >> jack utsick presents the rolling stones, jack utsick presents madonna, jack utsick presents elton john. it looked legitimate. it looked profitable. >> narrator: but when the securities and exchange commission investigates, utsick dumps his partners and disappears. >> it seemed like we got stuck holding the ball, and he goes off and escapes. >> narrator: and later, don't let his youth deceive you. david kaup is only in his 20s, but he's no child when it comes to running devastating loan and real-estate scams. >> i think he just believes he's superior to everybody else -- no one can touch him. >> narrator: in just five ye