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tv   Mad Money  CNBC  June 13, 2016 6:00pm-7:01pm EDT

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playing? grand theft auto? >> i don't play any games. >> linkedin deal, i know it sounds crazy, but twitter up 3.5% today. i think twitter goes higher from here. >> see my mission is simple. to make you money. i'm here to level the playing field for all investors. there is always a bull market somewhere and i promise to help you find it. "mad money" starts now. hey, i'm cramer. welcome to ma"mad money." my job isn't just to entertainment but to educate and teach you. so call me. or tweet me. has tech gotten its mojo back? should we take advantage of today's weakness? the dow tumbled, nasdaq is down.
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trying to figure out whether tech could ignite the way so many other groups have. we've seen energy come off its lows. utilities, the real estate investment trust, home-related stocks. lately tech has been threatening to break out despite the largest, better known stocks. some select fast growing technology stocks themselves. but it was today that really clinched it for me. microsoft's $26.2 billion acquisition for $196 per share. a 49.5% premium, where it went out friday. made up my mind for me. tech is back and it is back in a big way. that makes me feel like the oil-related decline we had today. it is giving us some excellent buying opportunities. this is fabulous news for the
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market. tech represents over 18% of the s&p 500. with the exception of a few high profile names, it has been in the doldrum for ages. lincoln is one of those companies, the social net working professional company was trading at 31 earnings. linked in has been signaling that the growth has been slowing somewhat. in fact when the company reported in february, letting investors know the growth slowed from the 30s to the 20s and there were macro issues weighing on the company, that is code for link in the being a lot more sensitive to the global economy than we thought. it was devastating. it went from $192 to 108 in a single session. it was able to claw pack to 130 mpbl after a teent quarter.
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so it is worth noting that microsoft is paying $196 for linked in. that's $4 above the stock's pre breakdown price. even as it represents a 13% year to date decline. which pegs the question. did microsoft get a deal for linked in? that's in 22% increase from the quarter before. nice quarter growth. it depends. most of the analysts reports describe it as an aggressive overpay. one of those acquisitions that woem be added to earnings for a couple years. i read a bunch of pieces and talked about how it was a waste of money. >> the house of pain! >> well, better takeover targets. microsoft could use it for other things. maybe a larger dividend. first, coming in today,
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microsoft had over 100 billion. the yield at 2.8%, you have to ask. is it doing anything for the company shares? i have to say no. therefore anyone who think this is $26 billion acquisition represents a major blow, i think you're plain nuts. that money wasn't burning a hole in microsoft's pockets, it wasn't doing anything either. the company basically sat out all the big tech trends of the past decade. social, mobile and the cloud. that's a remarkable trifecta of missed opportunities. last quarter, the cloud business has been growing quickly and looked like it was on target to become something that obscured the personal computing business. when microsoft reported their number tend of i am a, it was a decelerating rate of growth.
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at the low end. it slid from $55 the $51 in a single session. that's slow moving mega capitalization. that's all over now. with this acquisition, microsoft is now in the social, mobile and cloud conversation. special when i you consider how link in the is truly global. 200 companies rapidly expanding business. plus the total adjustable market is huge. right now linked in only has 4.5% of the global market media share. i think those numbers can grow dramatic when i combined with microsoft's customer base. more important, linkedin brings back to the revenue. sure, it might be down but the social net company's slow growth is faster than anything microsoft has growing. i didn't like the conference
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call that somehow linkedin will be the glue within microsoft. that didn't turn me on at all. frankly it doesn't matter. i care about jump starting froeth. especially after that last quarter. and this deal can do it. i'm no longer worried about the growth rate. this merminger makes me want to buy microsoft shares, not sell them. we saw a bunch of tech companies rally. chiefly name with mobile, social and cloud characteristics that seemed like they could be taking over. i would never buy them before that. some nice moves this morning before the market turned dounld. adobe gave up the game scoring. sales force saw the stocks drop hard. but then it rebounded nicely. anyone who thought microsoft
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would take over sales force was fooling themselves. given that the ceo came on "mad money" and deny that had room ompl however, linkedin, it is why the stock has been most of the day black. go what i'm really focused on, that was looking to the charts, the resurgence. the semiconductors and video has really taken off and even company accompany like texas instruments, continues to pick up adherence. $2 billion buyback. hand research merging wither kelly tencore. the same for tech data, for arrow, and of course, hewlett-packard enterprise which we had on last week. that's quite a list. just as important is what's been on the list.
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fang. facebook, amazon, google. a smart buy told people to get out. the stock took it on the chin. amazon got no traction. meanwhile netflix did nothing. but apple stock declined a point and a half. it is not like new-old tech is anything to write home about. i came up with that. none of this matters if the stock market goes down. on these down days please keep some tech in mind. i think the alleged overpay is a win for both parties. i think we'll see more like it. just too many stocks desperate.
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bill? >> yes. >> how are you, bill, it's jim. >> caller: it's very nice to talk to you. >> caller: thanks to you i'm drinking beer and watching the stock market. >> there you go. >> caller: my question. i've watched you forever but i've only called in today. >> okay. thank you. >> caller: my question is on marathon oil. how safe is the dividend? what do you see as future growth? >> sir, i have to tell you, they cut the dividend. so what's left of it may be safe. it is only 1.5%. the ones that cut the dividend lost me. if you cut your dividend in this environment, you spent too much at the height. so mro? not one of my favorites. microsoft's deal for linkedin is the beginning of something has legds.
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tech stocks are taking central stage again and i think more consolidation could be coming duxt their news? i've got the plays could play on this move. then sound bites and tweets. hillary clinton and donald trump have locked up the presumptive nominees. what could it mean for your snoin and a private player will. i'm talking to the man behind the stories. don't miss my interview with the editor. stick with cramer. >> announcer: don't miss a second of "mad money." follow @jim cramer. have a question? tweet cramer. send jim an e-mail at "mad money." or give us a call. you both have a
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i didn't think our largest utility system could be largely coal based. this year natural gas will surpass coal. this seed change is having some major implications for the stock market because very few people saw it coming. sure, we figured natural gas would naturally surpass it over time. we just didn't see it happening now. last year 33% of our country's power generation came from coal. 33% natural gas, another 20% from nuclear. 6% from hydro electric. you recall coal produced 39% of the power. we've seen how this has wreaked havoc. it is crushed the earnings and required them on make massive cutbacks. we've seen how it has practically destroyed the coal industry. only a few years ago these coal industries with riding high.
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now most have filed for bankruptcy. we knew the average life of a coal plan would run 40 years and most were built under jimmy carter. so those all are too worn out the retrofit or cost too much money to bring them into line with environmental standards. even though coal handle hammered, the one thing we haven't seen is the price of natural gas actually rally. $2, the level it has been at. natural gas is hovering at $2.50. that's a giant move for a commodity. we know we have loot more than we can handle. i won't say glut. at first many dismissed the natural gas rally because of a couple of heat waves. now more seasonably cool weather has taken over and the price of natural gas hasn't come down, it
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is a different story. one that is linked with the collapse of coal. this has created some tremendous opportunities. some have run up dramatically. oil and gas and range resources have sustain stocks soar from the bottom. they are nowhere near highs of a few years ago. they have the cheapest natural gas out there. it is costing less than a buck. recalling chesapeake and south western, both company have not sold out balance sheets. especially chesapeake. recall substantial gas reserves but only encana will give you decent bang for your buck. the other winners, some of the pipeliner partnerships, the biggest been fish jaer energy
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transfer partners. it yield as mine boggling percentage. before you reach for etp, know that its parent was supposed to merge with williams to krcreate the largest in the country with a particular emphasis on natural gas. now it is too costly for the company. a del tell court will decide this were issue. our old bag would be a possibility. i'm still smarting from the dividend. what other opportunity could be spectra energy? it has already got nearly 40%. my bottom hine is that i think it is your best bet to wait for the best meaningful pullback in the price of oil, in the expectations these natural gas stloks mistakenly come down with the big oils. even though they don't deserve to. when that happens, then you'll get your chance. much more of "mad money" ahead.
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how can you make money off politicians opening their pocket books? i'll reveal how. then you know we're about homework and investing. tonight i'm sitting down with the editor of the brand new website, the hive. and dollar for dollar, i'm taking all your questions in the lightning round. stick with cramer. thank you. ordering chinese food is a very predictable experience.
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candidates down to just two. hillary clinton and donald trump. now the primaries are over the real race begins which means both nominees are going to have to do a lot of work and spend a lot of money in order to attract
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votes. i think the next few months represents a slew of negatives which we've never seen in our lives. the street.com recently put together a whole series of pieces about how this election cycle will be a gigantic slug fest with roughly $12 billion to spend and going on at the federal, state and local levels. here at "mad money," we only care about one thing and that's helping you turn a profit. so whatever they can now legally spend infinite money trying to influence your vote, thanks to the supreme court citizens united decision, you have to acknowledge that election season represents a huge windfall for anyone trying on sell advertising space. as we've seen in the past, the bigge esgest beneficiaries tende the local television stations. especially if key swing states or areas with a contentious senate or house race. so tonight i want to talk about the potential winners of clinton
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versus trump. i expect this trend to continue. the one difference, unlike the primaries, we know where the candidates need to advertise and we know where all the napable senate races are too. we can figure out who will be in a position to win big and what are likely to be the endless political ads. so which drivers are in the drivers seat? i want to start with an oddly named one. called tegna. that's the broadcast casting and bridge ever digital business that was created by the break-up of the could nnglomeratconglome. this can create value when it was announced two years ago in 2014. the story has gone off the rails a bit. this is supposed to be a classic addition. the idea is that the broadcast
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networks would be worth a lot more given that most view print as a dying industry. so it broke up with a perimeter division called it. however things haven't go turned out the way they expect. the newspaper company rallied more than 8% while tegna the digital property has plunged more than 30%. we got some destruction. so what went wrong? it has some attractive properties. the company has been focused on bringing new life into career builder.com. turning into a cloud based business. linkedin. so far the transition has been show to demonstrate results. that's the second largest, it has been struggling. now we're at a point where it is
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less than a dollar above the 52-week low. opportunity. the coming deluge of political ad spending, i think it is possible could it turn itself around. the media business includes 46 television stations, recommending the larnlgt he was group of television affiliates. 46. they're the number one affiliate for nbc and cbs and the number four for abc. then you have the ailing division which includes career builders. cars.com. it averages more than 30 million visitors and a couple of smaller assets. a one stop shop for hoke businesses looking to catch up via the web. and co-factor. it the broadcast, part that intrigues me. we know in the right regions, they can sell political ads for what amounts to 40 to 50 times what they would normally charge
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for regular advertising. overall we can see it spent on broadcast ads this cycle. how much of that campaign cash could make its way to the table? recalling florida, ohio, colorado, north carolina, and virginia, i'm thinking, kaching on those. that's going to be a lot of money. and then one of the most recent conference call, tegna was practically salivating over the tumt. particularly as they believe trump's nomination on the republican side will expand the number of house and senate races up for grabs. now according to a terrific piece of research, tegna has exposure to 34% of the hottest races in the country. the company saw wound 51%
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increase in political ad revenue versus 2012. and i wouldn't say it will continue now that the primaries are over and we're moving toward the general election. even though coil has some tremendous broadcast assets, it has that ailing business where career builders consistently missed it ever since it broke up late last june. in fact it only got worse when they reported in february. the company keeps spending as a service business. that's like sales force.com. with not much to show for it. at the same time, cars.com saw recall it start to decelerate. and it remained the same with the fabulous performance of interest business being offset by the weakness of digital. they were supposed to be sources of growth for tegna. so far it hasn't worked out.
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so in the one hand, tegna gives you a tremendous set of sell vision stations that will make a killing. on the other hand, it has this not so hot recall stock. it is down year to date and the darn thing is trading at this year's ten times earnings estimates. the stock has been punished for its weakness. and if it does manage to turn around, that will be additional. i think it is too early to recommend it as an investment. the broadcast assets are so darn enticing. if it can turn around the digital side, maybe it wobble worth owning even after we know who the next president will be.
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dennis? >> caller: long time listen since 2006. >> thank you for listening. >> caller: i don't know what to do. do i get off this twitter train? i'm dying here. >> on a fundamental basis, i can't recommend. on a takeover basis after linkedin, i think there will be a lot of chatter. on "mad money," we the can't recommend a stock a takeover basis alone myself trust has is not advising buying anymore. let's go to rod in texas. >> caller: from the deep texas woods. it is a real ugly chart. to 8.9% which is red nag territory. do you think this dividend is safe? >> i have to do more work. i have not looked the see that
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it is almost 9%. that is a red nag. our viewers are so smart. i have to do work and i want to do work on it right now. i doubt that it would have been attractive. both sides will spend a lot of money in this election. that is good news for tegna. much more "mad money" ahead. my election coverage continues with more plays that could play as the race to the white house heats up. then they've tan inside twitter. now you're looking at the high and you won't want to miss this. and all your calls, rapid fire in tonight's edition of lightning round. stick with cramer.
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>> announcer: tomorrow, kick off the trading day with "stalk on the street." >> they hope the wrap up the auction by july. >> i don't know. maybe wrapped up. >> by 2017. >> this thing has been the weakest wrapped up wrapped up. .
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regardless of who wins the election in november, we know some company will be huge winners from this messy campaign. like i mentioned earlier, presidential elections are a gold mine. they're the biggest beneficiaries for what is looking to be an incredibly negative and bitter campaign where bothvised likely to spend billions of dollars on local go advertising in television and no one has these names. i recommend it as a trade before the break. there are a host of broadcast companies poised to rake in the profits. i want to introduce them to you. my colleague laid you'd terrific pete for the street last week. there are four more with real
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exposure to the swing states in the presidential race. are you ready? ew scripps, gray television, intravision communications, and next star which is tripling the exposure. why these companies and not the media giants like disney and cbs? they are bigger where these smaller ones have much more exposure for anyone other watches live tv will have to get used the from now through the election in november. as we say on wall street, these smaller companies are more levered to the election. so let's go through these four and see which ones are the most viable for this blood bath and that's what i have to say about this. it is one of the ugliest presidential campaigns in modern history. while mud slippinging may not be a great thing for the republic,
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it is good for the companies and can sell air time. let's start with ew scripps. you might remember them from the spelling bee. but they own 33 television states in 17 states along with 34, not to mention the digital assets, includes newsie, weather sphere, mid role media and cracked. plus, scripps produces a few television shows like the list and now. now, last year skrit spun off. is the broadcast focused company. and 87% of the revenue comes from television. among stock, they've a tough time lately.
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down nearly 30% over the last 12 months. weaker than expected numbers. this company could be poised to make a fortune as we get closer to the election. like i mentioned, wells fargo came out with a terrific formula to measure how much they have the hot races. and according to her, scripps could be the best position of all the local tv. that's because of the strong swing vote exposure. ohio is so important. tampa, florida, so important. west palm beach, florida. they have stations in swing states like colorado and wisconsin not to mention arizona where senator mccain is engaged in what looks to be his most difficult campaign in ages. currently, given that they made
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that in 2012, i bet the actual number will be a lot higher. if that turns out to be the case, this stock could soar. on the other hand, it has been inconsistent at best. and it is hard to value. when the election ends. 51 times next year's numbers soifl even though it may have the most political exposure, it has some hair on it. next up, gray television. i did not know about this until we started doing this. gtn. it owns 57 stations. the thing about gray television is that they often control multiple networks in the same market. according to the study, the company has exposure to 34% of the hottest races in the country with stations in swing states like florida, ohio, nevada,
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wisconsin. as well as states with nine of the most competitive senate races and ten gubernatorial races. like scripps, it is down nearly 28% in the last months but i think it could get a real boost from the political advertising. plus, it is the most profitable. six times the earnings estimates. gray? i think it is a winner. how about this intravision community. they own 56 televisions and they are largest for univision. plus, it has 49 primary spanish hang radio stations and the digital business is the number one ranked online platform for reaching hispanics. the had a tino demographic has
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become incredibly important, especially at the presidential level. whether you love trump or hate him. anyone can admit that he doesn't seem interested in courting the hispanic vote. so i doubt we'll see he and hillary getting in a contest form. next star provides services to 115 television stations, 36 rehated digital, across 62 markets. in january they agreed to it. they will have wound 71 tv stations. reaching thine%. it has been selling off stations. if the media general deal goes through in time next star will
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have tremendous impact. it is a gamble as to whether they can get deal double in time and we can't even be sure the deal will happen at all. given that as recently as las month, they were expressing kernels. out of these, i think nexstar is too much of a wild card. we are left with scripps. and gray television which has multiple network affiliates in many, many major meetd markets. i think scripps works. and gray television is an investment and it is one you can own into november and perhaps beyond. tokyo-style ramen noodles.
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it is time! time for the lightning round!
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are you ready skee-daddskee-dad! time for the lightning round. chris? >> caller: hello. cracker barrel? >> i think it is terrific. i want to buy cracker barrel. let's to go josh in new hampshire. >> hey, what's going on? >> not much. how are you? >> caller: pretty good. what about mus? >> yes. bruce who writes with me at real money.com, i've sustain stock go up. it can break to 5. i think you've got a winner. mike in new york. mike! >> caller: jim, i want to see you 2016. third party. let make america boo-ya again. >> very kind. probably not going to happen. >> caller: go i know you always
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have the other one. i wanted to ask you about arrow electronics. >> i think it is doing well. some good numbers, too. let's go to pike in new york. >> caller: hello, jim. >> how are you? >> caller: good. thank you for taking my call. >> of course. >> caller: i would hike your advice. do you have an opinion, csal? it was a spin off in 2013. >> that's right. it was spin off. we did a bunch of these in that space. that's an interesting idea that might be good for all our viewers. al in georgia. >> caller: hey, jim, how are you this evening? >> i am good. how are you? >> caller: very well. thank you. we enjoy your show i wanted to ask you about lion's gates
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films. >> yeah. it that stock has come down quite a bit but i don't have a case for why it should be bought. i see no catalyst. jim in ohio. >> caller: how are you, jim? >> i am great. >> caller: i like your generational investing show. very good. >> thank you. that took a long time to do. what's going on? >> caller: the cost is $94. >> it is so cheap. i said how did this stock get so low? i'll tell you what. we need to hear from the company. maybe we can get behind it. let's to go kevin in washington. >> caller: thank you for taking my call. i like get rich carefully. i want to know your thoughts on conagra foods. >> i think it is a winner. a lot of these companies are
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doing well. i think campbell's can come back. nick? you're up, my friend. what's going on? >> a huge game for my travel trust. i think it should be right up there. les in florida. les? >> caller: hello? i'm calling from cocoa beach, florida. thank you for taking my call. i'm way down on mattress firm. >> no. i don't want to you possibly one. i did not like those numbers at all. and that, ladies and gentlemen, is the conclusion of the lightning round. >> announcer: the lightning round.
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earlier this month there was the launch of a new website devoted to business, technology and politics. think of it as focusing on the specs of wall street and silicon valley. the parent company of "vanity fair" is privately held, we're always looking for new sources.
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doing homework is such an important part of the investing. the editor of the hive, welcome to "mad money." good to see you. i looked over the articles. you're kind of coming one a newspaper a today and a magazine. it is a big brand. it has covered hollywood better than anyone. it has this history of muscular journalism for about 25 years going. the way the world works now digitally, we want to make sure that people with that content, that world where they all intersecretary. they have a site producing that content hourly. >> i read your piece with the
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tragedy in orlando and it is by a book from columbine. so when you have a story that you want to put out today, you have a place to go with it. >> we want to keep one the news cycle but it is always "vanity fair" site. we come from "vanity fair" and we have deep ties to our writers. >> let's figure out the time of year. we have a businessman running for president so you have lot of business articles about the man. i haven't read them before so it is a whole new insight. >> we're trying to do that. when you have a character like trump, it an endless stream of content. we want to offer a fresh perspective and new reporting. that you we want to make sure
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that we're competing at a level, long form deep dive journalism. >> let talk about the economics of it. to start this, people arer anticipating, whether google will cue you. yahoo! is no longer as important as it once was. a lot of people feel the advertising dollars won't be there. you must feel that it will produce some good level. >> you're right. we think that the shif a premium site that allows us to take advantage of the trend advertising is going. it is a key economic driver for us. the greatest production in the history of man kind. live events is something we want to be big a part of. it is just the beginning. we do them right. distributive media is what it is all about. we want them to come to us
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through and we have to know, what is our facebook mate. we're on linkedin. a big day for linkedin. we think there's a big audience for those who want to share. we want them to know they're synonymous with this. >> the hit show, billionaires, the fact that we were about it all the time. there hasn't been a place where you just go and expect. it is all very episodic. it looks like hive will be covering this as the daily meet. >> it we recognize at the top of these three worlds, it converges and it is driven by evening owed. by people who are looking to remake the world in their own image. you can argue that's what they're trying to do. the list goes on. we want to be the score card that covers what everyone is doing.
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we want to move this forward and to offer the analysis. >> soell me. you're going after everybody. >> it just doesn't matter. i've learned things in the twitter piece and i thought i knew twitter well. so for me it is helpful. >> i think this story, he is the god of twitter. >> a darn good story. >> i think as an investor. particularly when it comes to the inability to retain product people. the fact twitter has this almost existential chaos. it has a decade of life. it is material.
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at the end when they're having a very candid conversation, taurusy says to him, look, there's something about our monthly, maus, the stagnation that's tied to the chaos of the company. >> look. people need to read this article people follow me who say, is this the day? no. i read it. no a completely dysfunctional company. >> the dysfunction is embedded in the daniels of the company. and i think to me, it is a rally tail. a bunch of young identifies get together. they have some version or idea. they see whatever the idea is that has coalesced, it will be a big, big thing. one of the crazy things about this, in sill cone valley, in ten years a company can have all these life cycles. it can be from an idea to a well funded start-up. to a company that's now looking
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for -- i don't know about looking but a company that might be acquired. you have to add this to one more site that was you pull the trigger on a publicly covered company. editor of vanlt fair's new website, the hive. sion... but i keep it growing by making every dollar count. that's why i have the spark cash card from capital one. with it, i earn unlimited 2% cash back on all of my purchasing. and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... which adds fuel to my bottom line. what's in your wallet?
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we're getting a lot of selling from around the world. the yen is getting stronger and it is good for our american company like the auto companies. you see it dechina in europe but that's related to brexit. we are not sure how it will impact us. there's always market somewhere. i promise to find it right here on "mad money." i'm jim cramer and i will see you tomorrow.
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>> the following is a cnbc prime original. >> it is both legal and lethal. seven pounds of metal and plastic... that fire a bullet at roughly 3,000 feet per second. it's called the ar-15. [ shell casing clinks ] to some, it is a brilliant piece of engineering, a modern sporting rifle, and a symbol of one of america's most basic freedoms. >> thank god for america! >> all: pass the law! >> to others, the ar-15 is an obscenity, an assault weapon with no justifiable place in civilian hands. >> you done

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