i don't have to do anything. you do all the hard work. >> and i think delta air lines traded well. >> excellent guys, thank you all very much. it has been a lot of fun we'll see you back here tomorrow at 5:00. "mad money" begins right you now. "mad money" with jim cramer begins right now my mission is simple -- to make you money i'm here to level the playing field for all investors. there's always a bull market somewhere. and i promise to help you find it "mad money" starts now hey, i'm cramer. welcome to "mad money. welcome to cramerica other people want to make friends. i'm just trying to make you some money. my job isn't just to entertain but to educate and teach you so call me at 1-800-743-cnbc. or tweet me @jimcramer. a few years ago if i told you that a drone raid was about to take out half of saudi arabia's production and our stock market would barely blink, you would have called me absolutely crazy.

yet that's exactly what just happened with the dow slipping just 143 points. the nasdaq backsliding a meager 0.28%. even though the price of crude spiked more than 10% gigantic, gigantic gain. how the heck is that even possible how could we have so many stocks that rallied on the news simple we're a changed country. we have so much oil in this country and we have a lot of stocks that now do better with higher oil prices and as well we have a lot of stocks that thrive if higher oil causes the economy to slow. the united states of today looks a lot different from the united states of even ten years ago first let's understand it looks like iran launched drone strikes that wiped out a huge chunk of saudi arabia's oil infrastructure and they're the biggest exporter in the world. that sent the price soaring, the biggest gain in 11 years and that translates into higher

gasoline which means consumers have less money to spend on going out to shop. so we have it making per secretary sense. they've had a hugh among ghous run. remember last week i told you that my propriety oscillator put out by standard & poor's, it was too high at plus 8 anything north of 5 means you should be doing some -- >> sell, sell, sell. >> that made this vulnerable even if i couldn't tell you the reason why that sell-off might happen remember, i did two shows. this oil shock is exactly the kind of out of left field incident i was talking about and it caused carnage. beyond retail, which indeed get pummeled except for the value place like macy's, the big package of stocks got slammed. think clorox, proshther and gamble estee lauder all have a big reliance on it

and they've got substantial freight costs, again, those go higher with oil, but procter has been a monstrous stock he stay lauder has been incredible again, august you got was profit-taking. naturally the airlines got hit too. american, united and delta all posted losses. the truth is this market held up incredibly well. in the old days it would have plunged on this oil shock. i know because i've live the through a bunch of them starting in 1973. we'd be freaking out about surging inflation and gas lines and the huge decline in consumer spending now saudi arabia losing half of its output is not a big deal the united states has gone from producing 5 million barrels a day, gigantic importer to 12 million barrels per day and we a lot of exporting over the same period we put policies in place that make our nation more energy efficient who needs saudi arabia if you listen to scott sheffield when he came here, ceo of

pioneer natural resources, he said it won't be long until we're producing 17 million barrels a day. astounding if the saudis can't pump it gives american producers a spike in profits allowing them to pay down debt and take control of their finances but our producers are going to sow the seeds of their own destruction. remember they said they keep spending and hurt themselves whenever the price goes up they start drilling again and it pushes prices right back down. only three things that keep a lid on production. first we don't have enough pipelines in the basin there are two about to open. that's the incredibly cheap oil rich region in texas second we don't have enough big ports to handle the big tankers that can hold 2 million barrels and until the recent rollback the government didn't allow excessive flaring and burning off of by-products that comes when you drill for oil before today's spike natural gas

was so cheap it wasn't even worth keeping if you couldn't flare it off, it was an impediment to drilling oil i don't expect anything but a short-term reprieve but some have started taking advantage of the pro-flaring position the president staked out the larger producers are reluctant to produce that because they don't want to ruin natural gas' reputation, cleaner than coal. when it soars the oil stocks soar with it today they were up so much the b buoyed the s&p 500 my travel trust was a big seller of it. i don't think it's sustainable we left some but time to go. these millennial money managers don't own any of these another approach, consider what the spike means for not us but for our trade war partner, china, the people's republic has a lot going for it economically. say what you will about them,

even though a lot of revenues was taking jobs from us, there's one thing they don't have, that's natural resources the disruption in the oil supply is bad news. they have slapped tariffs on oil but still using a million barrels that originate in our borders. and now the price of crude has surged making a real slowdown, far more likely beyond the oil, we saw strength in the sector of the growth stocks that don't need a strong global economy to make numbers adobe, amazing sign of resilience and if you stay tuned i will tell you which ones are still worth snapping up. >> buy, buy, buy. >> not long ago they were getting hammered and benefiting from fresh rotation out of packaged good stocks into the stocks of companies unaffected by oil that can still grow that's why i think it's entirely possible we could shrug off the news and maybe the next thing you know the facilities will be back online, however it is also

possible we have a brand-new world of worry and i'm talking about those ten drones used to smash saudi arabia's infrastructure to demonstrate a serious vulnerability for any country. if you want to stop these drone attacks have vastly expanded radar something great for lockheed martin and raytheon of these l3 harris is my favorite honestly i think the military side of things is the most worrisome. especially as the president tweeted that we are and i quote locked and loaded ready to retaliate presumably against iran the moment the saudis check off on them. we don't need that but who knows what that tweet even means by the way so you know if you could have solar powered drones we could go the world over i'm worried about it the bottom line, i know the stock market's resilience could make if there is an all out strike against iran but, man, i

got to tell you it's amazing how the average has shrugged off such a major decline something totally impossible to even think about a decade ago and that's worth keeping in mind. you know what, i'm calling today a victory for the bulls. patty in florida patty. >> caller: hi, jim thanks for taking my call. >> of course >> caller: thanks for all you do for us my question about octa, i bought it at 115 and i'm in the house of pain. i want to know what your opinion is on the price drops. >> okta is just a terrific company. i think that you have to take the same long-term view that management does. it is really, yes, they rotated out of these stocks. i have total faith in todd todd appeared on "squawk box" the other day. besides from hurting my feelings i think he did a very good job but maybe his stock appeared on "mad money," i think you're fine evan in california

evan >> caller: hey, cramer, i'm a proud cramerican i'm asking about cyberark. a cup of weeks ago you said it was a great buy but it's gone down a bit, about 15%. i was wondering if you're considering this maybe even a better buy now or should we wait and see? >> remember, i've liked cyberark since the 30s so i can't be a traderment i can't say 140 i hate it, at 110 i like it. at 101 i hate it to me cyberark is the same cyberark, they had a great quarter and even though the chart looks bad and people are dumping all over it, it's good if i were starting a position in cyberark i'd start it right here chris in wisconsin, chris. >> jim, boo-yah. hey, jim, i'd like to hear your thoughts on the stock camping world and curious to hear your

thoughts and if you made progress on getting marcus on the show. >> marcus has been on. the quarter not that good. started snapping back but it isn't doing that well. i think that marcus is a friend of the show but the company hasn't been doing that well and i think that's fair. look, neither is thor but the camping world business so to speak is not doing that well an rates but a lot may be that they're out of favor okay how the heck did we not tank in the wake of the saudi arabia oil problem? we are not the old united states victory for the bulls. "mad money" tonight, the cloud is taking a beating but which stocks in the group could see their forecasts clearing up and which must be avoided? >> sell, sell, sell. >> i'll give you my take this year has seen a slew of ipos but is cloud flare a standout

it's a company that's hoping to usher in a new gold rush don't miss my sit-down with an outfit called paxos and stay with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter have a question, tweet cramer, #madtweets send jim an mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc miss something, head to madmoney.cnbc.com. tell him we're flexible. don't worry. my dutch is ok. just ok? (in dutch)

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boo-yah! over the past month and a half we've seen what happens when the most alluring group in the wall street fashion show suddenly glows out of style the high-flying cloud-based software stocked that were slaughtered. some have been hit harder than other. z scaler was over 100% at its highs now up 21% for the year. the cloud kings adobe, salesforce, splunk and workday are down on average 18% from the

highs. of those only adobe and salesforce have lost 10% this is why i tell you you have to take some profits, some schnitzel i call it in your biggest winners when you have them they can go from euros to zeros overnight. many are banded together by silly etfs that should have never been crafted as i told you before i think there are two things going on. first many cloud stocks got way too expensive. that's why i kept telling you to pull back before you pulled the trigger. second, this market got hit with a powerful rotation. as money managers started feeling more bullish they sold the cloud stocks and swapped more cyclical names. the cloud can deliver great numbers during a slowdown. if there's not going to be a slowdown that makes their stocks less attractive. many of which stocks you commented on in twitter, i know you're depressed but maybe we

can shed some light on which brings me to the big question, now that this group has been bludgeoned half to death what are we supposed to do you got to admit with a few exceptions the fundamentals haven't changed at all our favorite cloud companies are still putting up excellent numbers and markets are judging them through a much more punishing prism. so tonight we'll help you figure out which cloud stocks to double down on which ones maybe you got to cut loose we know this whole group has gotten cheaper but we need a way to distinguish between the high quality names dragged down by the rotation and the lower quality names that never should be up in the first place when you make these kinds of decisions you need to be ruthlessly logical not emotional. i always tell you to check the emotions at the door we're in triage mode that means we need to be as objective as possible and put together a simple screener for the software service stocks we'll run our whole cloud

universe through the filters one is fundamentals and one is for valuation. anything that passes both you have my blessing we do a quick and dirty analysis of the stocks to separate the weak from the rest and this is done every single day and want to teach you how it is a quick and dirty rule of thumb that wall street has been using to assess those stocks for ages you know what it's called? i've only heard it once among our guests, the rule of 40 and it's quite simple. if you're running a software as a service company, the rule of 40, it says your revenue growth plus your profit margin should be greater than 40%. if it's below 40, you're in trouble. again, in triage mode and want a simple rule to he will tell us which need to be amputated from our portfolios i like this rule of 40 it recognizes that there are two ways to win, the healthiest are

either rapidly growing or growth is slowing but they've got increasingly strong earnings if a company has 30% revenue growth at a 20% profit margin it passes the test. if it has 70% growth and negative 20% profiten margin it passes, if you only grow at 50% clip and negative 15% margin that's 35% combined and falls below our 40 threshold a quick and dirty way to look at it this is how venture capital firms and helping funds like to assess the trade-off between growth and profitability that we talk about every night here. now let's put it into practice revenue growth is straightforward. remember that's just the sales line but there are a lot of ways you can measure margins. some more generous than others because we want to keep it simple we're using adjusted earnings for interest, taxes, depreciation and amortization or ebitda all seven cloud kings pass

mostly with flying colors. twilia was the highest score expected to grow at a 72% clip further bolstered by a 10% ebitda so this is our winner, okay really terrific. adobe comes in second with only a 24% growth rate because it's much more presentable with a 44% ebitda margin reports, could be very good. and that's thursday so you know, after the cloud kings the quality really starts to drop off. our cloud, hubspot, okta, they don't fare as well neither new relic or okta makes the cut. even before that disappointing forecast their growth was a problem. okta is growing at a 41% clip but negative 9% margin drags it down so doesn't deserve the praise at least on this method

how about the rest of the cloud stocks we talked about paycom, ring central. zenguess less than half make the cut using this analysts' estimates. paycom, zendesk and five9 falls short on this year's estimates everything else we're cutting. what about the cloud ipos from the past zoom video, dyna trace, paysure dut that, frezia and looked at 32 and zoom individuvchltd idia best, dynatrace failed last

year everything else must go. which brings us to the second screen valuation. again, we want to keep this simple i'm failing anything that trades at more than 10 times sales unless we can come up with a good excuse. ten times sale very expensive. looking at the cloud kings, adobe and service now have ten times next year's sales -- boy, i tell you, i don't know if you saw it, we saw big moves at these but service now had the biggest. you know what, not cheap i'm willing to give adobe a pass, it's so profitable and that's fine by me. i like service now but no extenuating circumstances, trades at 61 times earnings. twilio is borderline but given its rule of 40 score, i say we let it stay in this group.

as for the cloud princes of the renaming names, cooper software both traded at well more than 15 times sales and leaves hubspot passing both tests, wow. how about the cloud commoners. only a5 five9, ringcentral and zendesk traded at ten times next year's sales so we have to be careful remaining the ipos cloudstrike, zoomvidia they're expensive trading alt 20 times next year's sales and i don't feel recommending that bottom line, when you try to be objective about the cloud stocks the ones that you want to keep are adobe, salesforce, splunk, twilio, vmware, workday, hub be spot, five9, ringcentral and dynatrace. everything else, be cautious and subjective that's not the best way to

invest got your list. stay with cramer

now that the dust has settled on the turmoil in the cloud space with many of these stocks bouncing today, we got to circle back to the group earlier. i gave you my triage analysis of all the names we covered which you can double down on, which are risky and now i want to come back to another software company that has a service, one that you've asked me over and over again since it became public last friday. i got this all weekend cloud flare. cloud flare is a cloud-based web infrastructure play and it managed to rack up a decent ipo price at 15 then surging to 18 at the open and staying there before climbing another 3.5% today. this is a strong stock so could this fresh face cloud stock be

worth owning i think we need to be very careful here about approaching new name, frankly. if cloudflare had come public say six months ago when the cloud stock was red holt and seemed to be no price investors wouldn't pay for them maybe i would have felt a little more comfortable about recommending it lately it's gotten a lot less hospitable in the current environment you need to steer clear of something like cloudflare and i know a lot of them like it. i don't get me wrong it has intriguing concept. its platform helps business run their website enhancing performance and eliminating the cost and complexity of managing lots of hardware in the old days you get all these services from separate providers. cloudfare bundles them together in one easy to use platform that allows you to adopt additional solutions. as the company sees it they're disrupting multiple large

enterprise large software markets with their bundle and going after vpns, web security, distributor denial of service prevention, intrusion, detection and application delivery, content delivery network, domain name systems, advanced threat prevent and wide area networking and think of it as a one-stop shop that is going for all of that they have a $31-6 billion total adjustable market or t.a.m. that is going to 47 billion by 2022 and that's without counting the new areas they're trying to expand into storage, 5g, the internet and things -- what can i say? it does feel like it's got everything going for it. they don't sell user data or try to compete but give them an easy to use platform. cloudflare's neutral like

switzerland. in fact someone said they're a little too neutral last month they caught a lot of flack for providing infrastructure and security services for some of the ugliest destinations on the web including the site where a number of shooters weral callized and they dropped them after the el paso shooting it wasn't the first time they got in trouble with doing business with the most hateful parts of the web when they're like switzerland i mean that in the positive and negative senses. what about financials? they posted 43% sales growth last year. that's a deceleration from 2017 although in the first half of this year it reaccelerated 48% the margins, noise here. we'd like to see a smooth trend but had a huge across the board improvement in 2017. better gross marriagesen, better operating margin and free cash margin followed by major deterioration last year. in the first half of 2019 the

margins improved modestly and seem to be back on the right track for the moment >> all aboard. >> the other thing that's tough to get a read on here, cloudfare's free cash flow which appears to be going in the wrong direction. >> boo >> after falling from negative 20 million to negative 78 million last year it worsened again down 39 million in the first half of this year, a decline versus the first half of 2018 that's bad that said there are real positives. cloudflare is paying customers grew by 38% last year and 33% so far this year. solid. better still the number of customers paying more than $100,000 a year has been going much faster up 70% in the first half makes sense part of their pitch is they causmers want to spend more it's easy for the company to give them exactly what they need but there's the problem. when you compare cloudflare to the rest of the group it does indeed come up short

remember that rule of 40 that i talked about i mentioned it earlier in the show the idea here is that if you're a software as a service company, your revenue growth plus your profit marriagesen should exceed 40%. anything below that threshold is suspect. the rule of 40 gives you two ways to win. you can lose a lot of money as long as you have rapid revenue growth or you can have slow revenue growth as long as you are making a lot of money. but you can't pass midgrowth and not sell out margins i told you the companies that passed but cloudflare ain't one of them. the company is growing at a 48% clip but its operating margin is negative 27% add those two together and get 21%. when you look at all the cloud stock that is have gone public, cloudflare actually has the worst rule of 40 score in short, cloudflare may have a solid concept but in terms of its financials it lags behind the rest of the cohort

now that would be fine if the stock had a sensible valuation but, gees, it sells for 28 times last year's sales. even if we assume it will keep growing at roughly the same pace that means it's trading at 15 times next year's back of the envelope sales forecast. that makes a pretty darned expensive stock. all of our cloud kings are cheaper, salesforce, adobe, vm, ware, splunk and servicenow. if you got on -- got in on this cloud flare ipo and made a nice profit, take it. good for you i hope these guys can deliver spectacular numbers going forward that justify the stock's stratospheric valuation, yes, parabola but based on inconsistent results it's too risky for me especially in a market that no longer worships at the altar of the cloud. let's go to jackie in new york jackie >> caller: hey, jim.

thank you for your recommendation of verizon and twilio they made me over 10% if that's nice thank you. >> caller: well, listen, the question tonight is i got in on ipo day at 38 and the stock has been trading down with earnings coming out tomorrow on chewy should i cut my loss or wait for earnings to -- >> we think chewy is a great concept so you don't want to trade in and out and flit when it comes to chewy. do i know if this quarter is good or bad? i have no idea but i do like the concept very much. let's go to jerry in illinois. jerry. >> caller: hey, jim, boo-yah >> boo-yah, jer. >> caller: as a former marine we say hoorah. >> thank you for serving >> caller: in early august you recommended health catalyst,

that recently launched an ipo. so you're very high on their strategic plan that provides a complex analytics to their health care industry which sounded promising to me as well. so after doing some of my own research and after the stock dropped from its high of $49, i took a minimal position of 45.10. >> okay. >> caller: but early in august the stock dropped $33 from 27 -- 27% decline. since then it moved up to about $37 today but it's still off 18% from my entrance. >> right. >> caller: so, jim, what's your recommendation >> i think this is a really good company. i think these stocks really got hammered all them like a giant group move. but that said i think i'm reiterating health catalyst is a terrific company i think you'll do just fine. no need to buy any more unless it breaks that low that it hit

of $32 now, if you made some money on cloudflare i say good for you. but these guys are just too inconsistent for my liking much more "mad money" ahead. looking for an easy way to access the $9 trillion gold market an under the radar company hoping to help there are two deals staring us in the face. they are worrisome and i'll point them out and tell you how to approach them rapid-fire tonight's edition of the lightning round. so stay with cramer. >> announcer: tomorrow kick off the trading day with "squawk on the street." live from post nine at the nyse. >> what is that? >> that's for you, not for the viewer >> we have a podcast when you do this, the podcast is thinking is he doing thumb's up.

thumb's down. >> i was just being -- >> a fun monday morning thing. >> announcer: it all starts at 9:00 a.m. eastern. tv announcer: it's just as powerful as the lexus rx... as many safety features as the rx, the new... the lexus rx has met its match. if they're talking about you... you must be doing something right. experience the style, craftsmanship, and technology that have made the rx the leading luxury suv of all time. lease the 2019 rx 350 for $399 a month for 36 months. experience amazing at your lexus dealer. (classical music playing throughout)

♪ after an unserving weekend where somebody bombed saudi arabia's oil structure the price of crude was sent soaring. you appreciate the value of having gold in your portfolio. i've been pushing for precious metals for months now. insurance against economic chaos. it soared from $1300 to just under 1500 right now regular viewers know i like barrett gold and eagle mines or the gog but tonight a more modern way talking about a privately held company that holds and safeguards physical and digital assets it is a tokenized version that represents real physical gold. normally i'm skeptical but paxos is going about this the right way enlisting the most legitimate vendors to take custody of their goal and price of it is the basis for the token

value. not like cryptocurrency soy let's take a closer look with the co-founder and ceo of paxos. welcome to "mad money. good to see you, sir have a seat. thank you so much. all right, so i tell people, buy gold stocks and tell them to buy the gld. why is your method victoria's secret that, let's say, maybe more true to the price of gold >> yeah, so it's really important to realize with gold and really almost any commodity that either you can make it really tradeable or owe the underlining but hard to have both future, gold etfs you're not owning the underlining gold. it's liquid, tradeable but at the same time if you want the real thing you have to bury it in your backyard when it comes time to unbury it you don't know if it's real gold we tried to solve that problem square that fundamental contradiction. so paxos gold is unique. one token equals one ounce and

represents a bar in brinks down to the serial number and real gold you're able to move around like the futures market but yet you have the underlying asset. >> how do you guys make money? >> we make money and actually we don't make money from custody fees that's really cool no minimum to buy it you can hold it with us. we make it when you buy and sell >> okay, because that's important. people -- i was with someone in my high school reunion that buried in its backyard someone could steal that they might see where it is why not a safety deposit is the box? this is less expensive than a safety deposit box. >> we have a great rate with brinks it's really credible vault but there's only six vaults in london that you store gold in and 80% of the goal in the world trades in that market so this is institutional grade vault that everyone uses open to retail and we tried to build it so it's institutional grade but available for retail and

institutions. >> so let's say i know that i tried to buy some gold and it's a lot per ounce and a lot of people balk at that what's the small amount that you can buy if you use paxos? >> we go down to really there's no minimum but we recommend you buy a tenth of an ounce so basically $150 minimum at today's prices so anyone can get in and buy. >> haven't others tried this and failed >> yeah, i mean i think what's unique about paxos, we're a trust company and regulated just like a bank and the reason that's important is you're not just trusting us because we shay you should but because we're regulated and have oversight so unlike anyone else this actually token itself was regulated and approved by the banking regulator in new york so you're not just trusting us, we have an independent board, deloitte and touche is our auditor. it's not just safe for retail

but for institutions too. >> so we hear the terms crypto and blockchain and we start thinking, well, wait a second. it's something that got everyone excited then people lost money on crypto. what is crypto and blockchain when it comes to your company? >> blockchain, everyone talks about it breathlessly, super du jour topic but it's a database so when you say, hey, we put gold on a blockchain, we put it on a distributed database and the beauty of that is anybody can access it. so you're not reliant on paxos or anyone else to move your gold around once you're on the blockchain you can send it to anybody else on that same blockchain with you and we're trying to use the power of a database upgrade if you will as opposed to crypto which is a little different. i like it too but it's a completely different thing altogether because you're just owning the database. >> so let's say jamie dimon, i'm watching the show and say that guy cascarilla, he's doing a

good, what is keeping someone else from doing what you're doing. >> there's no reason they couldn't but can you do you have the engineers and technology, have you thought about how to create innovative products so anybody can do that but i think what's neat about paxos, one we're a trust company but, two, half our company is product and engineering. we're a technology firm at heart and so we're trying to give you the confidence of a bank but innovation of silicon valley and different from most institutions that are in the banking world today. >> look, i'm pro-gold. another way to buy gold. think about it and stop worrying it's over $1400. that's what everyone says, it's too expensive. another way to play it that's charles cascarilla. it's a private traded company but you can buy goal in a very secure way "mad money" back after the break. - stand up if you are first generation college student.

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>> announcer: "lightning round" is sponsored by td ameritrade. it is time it's time for "the lightning round. >> buy, buy, buy. >> sell, sell, sell. [ buzzer ] >> then "the lightning round" is over

are you ready, skee-daddy? bob in california. bob. >> caller: hi, jim from sunny hermosa beach, california, how are you doing? >> i love hermosa beach. hit me >> caller: jim, two weeks ago ulta beauty had disappointing earnings and the stock fell over $100 a share since then it has lost another $10 a share. is it safe to buy it now >> bob, the problem was that analyst, that call had a lot of analysts very angry and a lot of people have given up on the company. i have not i think it's within so% of a bottom i've been wanting to wait. i wanted to wait until we see the next quarter but i'm okay with it. another 20 points an i'm fine with it. bill in florida. >> caller: hey, jim this, is bill if st. augustine, florida how are you? >> oldest city around. what's going on? >>. >> caller: hey, i've got a question about dva, one of the largest dialysis providers in

the united states. and zax got a strong buy on them but down from their 52-week high but up a point and a quarter today. what's your impression about them >> i think it's a very good company. it is -- it's down a lot from its high but it's profitable it's not expensive i'm going to say buy to it tyler in texas tyler. >> caller: big boo-yah, jim cramer from houston, texas how you doing, buddy >> all right how about you? >> caller: i'm doing well. so, i'm on my way to work this morning. i stop off at mcdonald's to get me a mcgriddle i saw we're 6% off the all-time highs back in august and want to know what you think about it >> i say buy i think they've got game down a little last week on an accounting issue that wasn't really bad and now people are saying it doesn't do well in a higher gasoline environment. that's where you go. you buy it matt in texas. matt >> caller: big boo-yah, jim.

>> wow all right. >> caller: hey, what do you think about the company coupa. >> it is an expensive stock but good one joe in new jersey. joe. >> caller: hello, cramer always a pleasure and an honor to talk to you. >> oh, thank you joe, what's going on >> caller: you recommended valley national bank about two years ago. >> yes. >> caller: i still own it. should i sell it. >> hold on to it it's a 4% yield. not doing much but when the curve gets back again you'll feel good about it it's a very well run bank and i like it. to jean-pierre >> caller: hi, mr. cramer. first-time caller. longtime fan big boo-yah from me and my two good friend, poda and cody g what do you think about cleveland clip

>> too risky here and a worldwide slowdown i don't want to go to cleveland-cliffs and that, ladies and gentlemen, is the conclusion of "the lightning round. >> announcer: "the lightning round" is sponsored by td ameritrade ♪ ♪♪ ♪♪ ♪♪

sometimes i wish there were such a thing as a buyer's strike i wish we could reach a point of revulsion with ipos where the underwriters say, sorry, we aren't going to do this deal [ buzzer ] >> sadly that almost never happens because there's too much money involved to say no the fees are too great right now we're staring down the barrel of two hideous deals that could be damaging to the entire market the first, we work or the we company or whatever they're calling themselves it is quite simply desperate for money. they can raise 3 billion in the ipo or perhaps score a $6 billion loan we work needs all the work they can get. they are losing money hand over fist >> boo >> this is one of those deals that let's just say raises eyebrow. they have outrageous examples of self-dealing the most egregious the ceo who is quite fun to be honest got

wework to pay 5.9 million in stock through a partnership he controlled in exchange for the trademark to the new name, the we company i can't believe the chutzpah wework was a great name and changed it to the we company it sounds like it was coined by a 5-year-old and found a way to profit fortunately newman returned the compensation but that behavior makes me wonder about the leadership style there are words to describe this i just can't say them on basic cable. "the wall street journal" reported newman already cashed out at least $700 million by selling his shares or borrowing against them can you believe this guy i like ceos who hold their stocks both after the ipo, maybe buy some i don't even know what to say about a ceo who sells stock before the ipo even wework's financials seemed crazed numbers are supposed to be straightforward but using adjusted earnings for interests, taxes, depreciation and growth

investments. huh? it's a real estate company if they're growing that fast and they are how can that be included as operating expenses no wonder wework that got a $47 billion valuation last round of private fund raise something now talking about doing a 10 to $12 billion valuation for the ipo. incredibly the company is trying to fix some of these governance issues on the fly and the company has fabulous revenue growth i will give it that. it could be attractive to the growth hounds out there however i don't care about wework itself what bothers me is the investment bankers trying to jam this deal down the market's throat and it feels like the mutual funds and hedge funds are heaviless to stop it that's the problem wework could hurt the entire market if it bombs >> no, no. >> what about the other damaging ipos saudi aramco the saudis expressed an interest in floating shares of it i can't think of ray worse opportunity. i'd expect a valuation in excess of a trillion dollars.

that's what they're talking about which would flood the market with new stock even if they only floated a sliver that's not what we need but the best we could hope for is a postponement if you want the arms to go higher it would be great if the investment bankers would just stop doing crummy deals. of course, that won't happen because they don't w greed. if they're going to do these deals i hope they price them at low levels eno make the stocks enticing and don't hurt the market unless the big accounts pass on either piece of merchandise look, every bit of merchandise out there has a level where it's worth buying i just think the levels for wework and saudi aramco are much lower than either company would like and unlikely to get reasonable prices for the buyers if these deals aren't priced at cheap levels i expect the market to get hammered on the days they come public. what can you do? how about we stop participating in low quality or high risk ipos and we including you big money

managers out there tell them we don't want these deals at any price. that's about the only thing that will put a stop to these extremely suboptimal and ill-advised ipos stick with cramer. as usual we were behind schedule. but sophie's enthusiasm cannot be dampened. not even by a run-away donut. we powered through it in our toyota prius. because a star's got to shine, no matter what. it's unbelievable what you can do in the prius. toyota let's go places.

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tonight on an all new "american greed" a $30 million house scam run by a reality tv star but when his lies unravel, the scheme gets canceled and an unwitting partner winds up dead. don't miss it tonight at 10:00 only on cnbc we got equity offerings tonight, funko which is -- a good one we like that and shopify, we like that but don't like to see big equity offerings, often a sign of too much supply and i regard that as quite worrisome even though i like funko and like shopify i always like to say there's always a bull market somewhere and promise to find it for you on "mad money. i am jim cramer and i will see you tomorrow