tv Mad Money CNBC September 16, 2020 6:00pm-7:00pm EDT
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tim seymour? >> copper, southern copper >> steve grasso? >> pse is breaking out buy, buy, buy. >> oil 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 is to the just to entertain you but educate and teach you. call me or tweet me like @jimcr. so much of what you see on your
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screen is driven by not the feds' comments, a little boring with the zoom box or retail sales that we got or housing numbers. but what is happening at the morning's research meetings all over the country today where the down gained 37 points and the s&p dipped and the nasdaq lost 1.25%. more on that later today seemed like it was dominated by the fed in the amazing snow flake ipo and as someone that helped bring the microsoft ipo to goldman sachs, i know a big deal when i see one. more on the demons the deal unleashed. we had a nice rally going today and that's about what is going on behind the scenes every morning they have a meeting where they pitch the sales force on individual stocks and entire industries as buys or holds or very rarely sells after the pandemic got rolling, almost every piece of research that came out cut numbers.
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for individual companies and suggested the situation would get worse. the conclusion i've never seen so many sell eric men dae eric men dae er recommendations since 2008. it would hurt the america service economy. how does that hold up when so many services were off the table? for most analysts said forcing people to stay home would devastate the economy. understandable but that instinct turned out to be wrong in part because the government gave us more than $2 trillion worth of stimulus so that consumers could keep spending if they lost their job. what really happened parts of the economy have absolutely been devastated this is a very bad time to own a bar or a restaurant, but other
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parts, they're on fire covid didn't wreck the way we did business in this country, it changed the way we do business e commerce is just extraordinary. it's lit last night fedex lit up the sky with its unbelievable better than expected quarter. they are seeing immense increases in volume. management thought it would ship more last night they said they expect to hit that number in 2023 that's astounding. astoundingly positive revision fedex assumes whatever digital transition we go through, it's not done it will stick with us even after we beat the pandemic a year ago e commerce was 57% of retail and now it's 21%. that's a huge shift. you have to figure the number will go higher and higher but here is the rub. it zero sum. as executive vice president
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pointed out on the conference call and i quote, u.s. spending that would normally have gone into services has shifted toward goods. spending boosted further by penalty up demand end quote. e commerce is currently booming at holiday levels. while the service sector she tells us is severely impacted by the pandemic and high unemployment rates so the analysts who cover fedex, they go over the hoot and holler or yes, the squawk box and tell their sales people they should call the firms they cover and she's boosting her price target fedex because of the positives and upcoming holiday season which they said will be like no other. they aren't saying sell, sell, sell anymore, which is what they were doing when the stock was at 120 in the spring. they are saying buy, buy, buy at 235. that's right they are telling us to sell when
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it was literally half of what it is now then professional money managers' clients, they see the positive research and think about implications the idea america is much less of a service economy is huge even if temporary are we turning to more of manufacturing or service endust industri -- industries doing badly jay powell seounded like we desperately need a bill. i think they will be able to reach a compromise either way, the pin action from fedex caused the transports to roar and even allow boeing to rally on a day when the house of representatives released a horrendous report about the company's problematic culture. next up, we have positive calls on housing some spur by what we heard from stewart miller, the executive chairman of lennar last night after the company's incredible quarter. lennar had a crushing response to numbers yesterday but this
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morning analysts got behind it and it came roaring back today taking the whole cohort with it. just like what we heard from fedex about the goods' economy over taking services, it is catching analysts by surprise. we have high single digit unemployment co-existing with incredible home building numbers and great demand now, that is not supposed to happen even as this is an unprecedented situation. so the rally gets delayed until the selling side can explain to the buying side what is going on and internal research people have realized the pandemic has changed everything in this country. if you can work home from, you're not waiting for a vaccine. you're buying a new home with more space further away from your job because who cares about where it is when you don't have commute. the homes are homes/offices. look at air on chairs i told you to buy last friday they can convert any bedroom into an office houses are being reoutfitted for
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the covid economy causing sales to sore and anything involving furniture at home, way fair, williams-sonoma is doing amazing. that's how miller can say something so counter intuitive yet so true. so we have a boom in housing, yet we have a weak economy that needs help from washington it seems crazy fedex and lennar c could be doing well but they are concentrated on small business that have nothing to do with the stock market we wrote off places like coach known as tapistry. the rest of the down and out, kohl's, nordstrom. i prefer to stick to the tride and true like lululemon. the ceo of general electric spoke at a portionmorgan stanley
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conference and said something incredible he expects ge to have positive cash flow in the second half of the year no wonder the stock rallied more than 10% i bet this stock will really get people excited tomorrow once everybody knows about it i don't know anyone expecting positive you will see 3 m go up you'll see honey well go up and raythion they could rally like crazy as the fed chairman sounded down beat and tech stocks got happ hammered as people stole and we still need a stimulus bill the bottom line, they explained the impossible we seen a booming goods economy with a services recession. that's the opposite of the united states of america if we get a stimulus package, both sides of the economy could roar
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without it, different story. if the last six months are any guide, it won't be anything like you've ever seen before. john in connecticut. >> caller: hi, jim, thanks for taking my call. >> you're quite welcome. >> caller: i purchased draft kings for my kids and had a significant climb since then without sports should i continue to hold out with the assumption sports will increase in the future >> i like the company. do i a program about sports called "bull market fantasy" and they signed on as a sponsor. it a great company we had them on numerous times and they are very smart. jay in florida. >> caller: boo-yah big fan of yours. >> thank you. >> caller: shoutout from beautiful clearwater, florida. >> it's spring training already no, we're still losing what's up? >> caller: my question is united airlines ual why are other airlines like
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delta having increased price target by analysts and united is being downgraded i don't get it i understand that united relies heavily on business and international travel, however, they have the most upside from their 52-week high compared -- >> jay, jay, jay, listen to yourself you just named exactly why it's not working. business and international travel i want to go someplace let say you want to go to italy. you get on a plane you fly to milan and get off the plane and they put you back on the plane. i don't think that's a good use of time and money. let go to mark in florida. >> caller: hi, there, jim. i'm looking for great cramer insight you share with us. >> that's very kind. >> caller: on the group of packaged food stocks and one stock in particular. the group seems to be coming steadily down with the possibility or likelihood with an uptick in the coronavirus this fall, campbell and kellogg are getting hit especially hard. >> yeah. >> caller: what is your outlook
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for the group in general and bng foods? >> the group has come down too much too hard. people like marriott more than campbells. i get that we had ken on and he made a compelling story about how bng's dividend is safe and can grow at 7% now and business is better than expected because of green giant. i like the stock you can't understand this market unless you understand how big institutions do business these research firms explain the em possible a impossible and it is impossible. campbells soup, can the company turn new customers into steady processors 12 ipos and how is the newest member of the class of 20 to performing? i'm eyeing jay frog and in september 2019, box, tonight i'm
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sitting down with the ceo one year later to look back at the company's performance so stay with cramer. >> announcer: don't misa second of "mad money. follow @jimcarmer on twitter send jim an email to 8074cney@cnbc.com or call us at 1-0-3-bc miss something head to mad money at cnb cdot.com cnbcdot.com. cnbc.com incomparable design
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most of the economy seems to be in the dull but a lot is doing too well to own the stocks and the lack of love from wall street means you're getting, i think, incredible deals. take campbells soup. it has a 3% yield and generates a huge amount of cash. we put this in the covid-19 index and it's the third worst performer out of 100 because it's not what you buy in an accelerating economy it doesn't mean you throw it away the actual numbers were terrific 18% sales growth but the stock got slammed. some of that is because management couldn't give any guidance for the next fiscal year the future is too uncertain and the pantry plays are out of stock. that won't be true forever let's take a closer look with the turn around artist, president and ceo of campbells soup welcome back to "mad money". >> great to be back with you. >> i want to get one thing straight and i owe you one
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i read the whole conference call there was one where you talked about and said maybe we'll get back to normalcy and i misinterpreted that meaning you felt perhaps buyers had gotten ahead of themselves in campbells product and we'll go back to normal, which is the old slow way. that was not a good way to view it, correct? >> that is absolutely correct. i think that certainly the point we were making or trying to make is that in many ways, it's a new normal you know, we've trained and educated an entire new generation of consumers that are now cooking with our products and i think, you know, although we live in some volatile times, the base for our business and our products, the outlook has never been brighter and we feel that that stickiness or that continuation of that behavior of cooking will continue and i think we are very, very well positioned with our portfolio whether it's our business but also our preg go and pace business to really meet consumer
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needs where that behavior is happening. we feel great about the fact that as we enter into a new normal, that this is going to be an elevated level of relevance. >> i want to go further. it seems as if maybe demand was so strong that you actually had supply constraints and could have even reported a better number than what we saw. >> that's right. you know, i think as we enter into our sixth month now of this elevated level of demand for the pandemic and on businesses that arguably walking into the pandemic were steady businesses that now are experiencing growth rates substantially above anything that we've seen historically that's put pressure on supply. but i feel great about the actions that we've taken whether it's capacity selectively on businesses like our goldfish business or kettle chips business or our broth business or whether it's adding co-man
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pa fracturers the team is doing an amazing job executing and i'm 100% comfortable that we're going to address these problems and as we move through the fall and into the winter, the hardest soup season, we'll be in a great position to meet the demands of consumers and retail partners and with that, i think is going to come along momentum and growth and continue progress. >> so mark, there had been a bit of a conflict here mentally. the millennials it looked like they saw campbells soup and thought sell, sell, sell this new group of people, call them genx or whatever, they are not as interested. they certainly care about health they look at the table but they look at the label and they see it isn't filled with preservatives. they look at the price and think good because i don't make a lot of money and then they buy. >> yeah, and, you know, jim, that is really -- when we talk about making the most of a very difficult and tough situation in the pandemic, that is what we're
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talking about is that our products have now entered into millions of new households more than 50% of them are millennials and i think what millennials are discovering is a variety of things but starting with the fact our products fit very well into their lifestyle, what they're targeting for health and wellness thinking about things like the presence of vegetables or the lack of added preservatives. one of the things that i think people have always struggled with conceptionally is the fact perhaps after freezing, canning is the most natural way to preserve food and the idea that what is in the can is actually good food has been a big focus of what we've been working on, both in communication, as well as the renovations of the product that we did well before the pandemic and certainly we're glad that foundation was in place but yes, i think you've got a new generation of consumers that are using our product and are pleased with what they're able to do and i think with that in mind, we
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expect that to continue going forward. >> in the meantime, snacking for the work from home people, it just seems like they're addicted they tend to eat six, seven times a day where in the old days, breakfast before work, lunch at work and go home and they like snacks and your portfolio fits their profile. >> yeah, you know, we just talked about meals and beverage business as it relates to this resurgence of demand on the fabric of the nation brands like campbells, swanson and prego that's 50% of the revenue. the great news with relevancy and acceleration of growth, the other 50% of revenue is a stacks business that is in a highly did i have -- differentiated space that's growing before the pandemic, accelerated through this period of time and we really expect that to grow going forward. if you put those two pieces together, it is why we feel there is such a bright future for the trajectory of the
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company. >> one last question whether you came in people were worried about the balance sheet. they don't worry anymore because the cash flow is huge. if the stock stays here and things stabilize, buy back resumption. >> well certainly one of the things that we're really excited about is the progress that we've made on reducing debt. as you point out, we are highly cash againtive business. you know, able to be in complete control of our destiny and to be able to be in that position essentially a year earlier than we expected is a great spot to be in. we're living in some dynamic times. we want to make sure that we're beingprudent and thoughtful about how we continue to deploy our capital to make sure we're investing in the business, obviously, protecting dividend and kind of the thesis of what our company is very important. you know, ensuring everybody that we stay on that path and then as we go forward, continuing to look at what those other opportunities are to
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generate value but i think at the end of the day, the great news is we're in a position where we've taken care of business on that side and i think are putting ourselves in a position where we have options and choices and that's where we want to be. >> hard to find value in this market other than unless you think that snow flake's value and i want to thank the president and ceo of campbells soup for coming on and setting the record straight. good to see you, sir. >> thanks, jim. not every stock in your portfolio can be a woray, kd octa it's okay to find something like campbells soup "mad money" is back after the break. the only thing that makes t-mobile's new offer on iphone better
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a lot goes through your mind. how long will this last? am i prepared for this? are we prepared for this? with fidelity wealth management, your dedicated adviser can give you straightforward advice and tailored recommendations, with access to tax-smart investment strategies designed to help you keep more of what you've earned so you'll know you're doing what you can for your family and your future. that's the clarity you get with fidelity wealth management. well, everything is talking about snow flake, right? the cloud based data warehousing right out of the gate almost obscene i think, the largest software ipo at 120 and the darn thing opened at $245, more than
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doubling after a long delay because there was so much demand i don't like that. you know where i come down it's a great company and the stock way too expensive. we have club members and i thought the stock would go up 50 times sales and i said that was too expensive and beat 100 there was another major cloud ipo today and we're going to look at this one this was the oddly named j frog like jlo and opened at 71 and pulled back under 65 it is a cloud based platform for development and operation. the idea is software helps collaborate actually managed technology once created. somewhere along the way tech companies figured the software works better with the two groups communicating regularly. so devops was born
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so many investors were excited to get in on the j frog deal however just like snow flake, i think this is a situation where you got a high quality company that's a stock that's already too hot to handle. sorry. it's called discipline i have it. so let me explain why i like j frog the business as a lot was said about the rocket ship stock. you need to understand what these guys do. like i said before, the whole idea behind it is the right hand should know what the left hand is doing and the old days the software industry didn't work like that. the developers would make the software and operations would handle production systems, there was not much collaboration of cross pollination and that created lots of problems it can make something that's great in isolation and tons of bugs from the operation team to put it to work in the real world and that's where j frog comes in they got an end to end hybrid universal platform for continuous software release management just saying that i feel smarter than i did basically the system allows
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companies to build and release software faster and more secu securely they are the bridge between the development and operations this is not just about tech. we live in a world where everybody is trying to digtize how many times a week do i say that you embrace technology to better engage with customers and manage employees or become somebody else's lunch and doesn't matter if it's housing like lennar or railroads like union pacific that's whythey develop their software and benefit from the tools. that's why the company serves, look at this, all ten of the largest technology organizations in the fortune 500 with eight out of ten top financial services organizations and nine out of the top ten retailers, eight out of the top ten health care organizations we're talking about vm ware, facebook. then out of breath, dell, microsoft, that's why you have a great graphic like this because you don't need to say them all
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these are some impressive clients. when microsoft and amazon uses the software they are worrying partners a lot of them were, well then that is fantastic. usually they don't see that. all these companies are in the business of continuously releasing new software they have to be able to quickly react to problems that pop up. you may have noticed it, too you have to continually restart software updates j frog sees it, we're headed for a world of non-stop always on software updates devops makes that possible j frog is the system of record if you want to know why, j frog had 65% revenue growth last year and while that slowed to 50% in the first half of 2020, 50% growth is the kind of number a lot of ceos would kill for
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high 20s is fantastic because this is a service company that have subscription revenue and that is good we love current. the most impressive thing, unlike most of the cloud plays, j frog is within spitting distance of turning a profit they lost 5.4 million last year and in the first six months of 2020 they ca$2020 they came wit million of breaking even and that's not a flute j frog had consistent positive cash flow for years and raised $162 million or primary capital since it was created and it's why the balance sheet remains pristine i think they could turn a profit next year. we know they are winning lots of business from the terrific stable of customers because the neck dollar retention rate is 139% when that number is below 100, you lose existing business and over 100, you're gaining business from your old clients and boy, are they gaining. on top of that, j frog is generating these amazing numbers without much of a sales force. they have a very lean sales
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organization the customers are coming to them, not the other way around oh, boy, is that ever fantastic. listen to what the ceo told carl on "squawk ally" this very morning. >> we have no field sales. we have no reps in the field and basically, our products are being bought and not sold. that helps the company a lot when you have a superior product. >> it's very rare as someone who taught sales at goldman i've always said everything needs to be sold. there are very few products that get bought j frog has one think about the household name companies, long story short and vertigo. already a nose bleed territory when the company initially filed
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paperwork last month, 33 to 37 earlier this week they raised range from 39 to 41 and the deal priced above that at 44. those levels were a $4 billion company. when j frog opened for trading at 4:30 it soared to $71 which made it a $6.5 billion company it's far from cheap. keep in mind late last year they were considering an ipo with a $1.5 billion evaluation late last year. at the ipo price, jor frog was selling for more than 40 times sells that puts it toward the high end of the cloud based software stock it has zoom-like valuation but not growth this morning i said i would be willing to pay 50 times sales for the other big ipo snow flake. even though it felt ridiculous snow flake triple digit growth rate and quickly started trading at more than 100 times sales which doesn't of then work out
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j frog is only growing at a 50% clip can't pay as much for that as the much closer profitability than the birthday buddy. j frog's growth is in line with incino the financial services play that came public in july. i like this one. it trades at about 35 times sales. they were on not that long ago i said this is a company that's hard to beat good mode. to bust j frog around 60, down nearly $5 here still a tad too expensive. you know where i feel co comfortable, in the high 40s is where you want to put it in the bullpen. bottom line, j frog is another company too hot to handle. sizzling you know what? we get sell offs don't forget zoom fell from 450 to 350 and we get sell offs and when we do, maybe you can get it at a much less price let's go to daniel in new jersey, daniel, my brother >> caller: boo-yah jim.
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>> boo-yah. >> caller: thanks for taking my call. >> you're welcome. >> caller: daniel from new jersey i'm trying to diversify away from tech. i had cash in the market and with the recent ipo of albertson and low pne, what do you say now is the time to get in for the long term or look at another supermarket -- >> i like albertson when it came public and everything they're doing but last week kroger reported an amazing quarter and the darn thing cannot get out of its way. hold off aci we'll do more work i think it's cheap but i need a catalyst let's go to joel in florida. >> caller: thanks for taking my call. >> of course >> caller: got a question for you. so tech being so heavily utilized nowadays and increased importance on cybersecurity? >> crowd strike, george was on our show not that long ago i think that what happened today
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with snow flake is going to cause people to take a little pause because that stock is up gigantically for the year. i like to wait a little bit before i tell you to buy it. it's one of the hottest stocks in the market and right now the hottest stocks could be under us all by additional ipos coming to the market sur sure,j frog is a high quality company but the stock is too hot to handle. you know what i need i need some mitts. you know what i need oven mitts bring it -- queue the oven mitts. much more "mad money" ahead. the shift to remote work looks permanent, i'm asking how the position to take advantage of the new normal then talk about a snowsto snowstorm. i'm eyeing the debut of snow flake and telling you what the action means for the overall market that's what is important and all your calls rapid fire in tonight's edition of the lightning round. the lexus es.
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on a day when not one but two huge cloud ipos shot off valuatio valuations, the cloud stocks could be described as cheap, maybe profitable ones we can buy under $20. how about box? the cloud based storage mobile collaboration platform with a cybersecurity kicker here is a more mature company with a stock that sells for 25 times next year's earnings estimates and a cigarette tugren around the value came in and agitated for change six months later they reached an agreement with management and since march both side haves been working to jump start the growth and bolstering the margin. with the stock up 70% since we lost spoke to management in april. tomorrow box hosts the annual
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customer and partner event fully digital. we'll unveil all sorts of invasions but before then we want a sense how much things have already improved so let's check in with aaron levee, the co-founder and chairman and ceo to learn more about how his company is doing welcome back to "mad money". >> thanks, jim thanks for having me. >> first, congratulations. profitable quarter what was it made up of and how reoccurring will it be >> yeah, so we were super happy about the qt that we just announced a couple weeks ago we're able to beat on revenue estimates and guidance revenue on eps on operating margin and also delivered strong feelings so really happy about the quarter. we raised our guidance for the full year on revenue as well as operating margin targets for the full year so i think we are firing on all cylinders right now even though it's a very, very dynamic environment and obviously, the broader macro economic environment it's remaining a challenge in
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many sectors we are seeing growth at this time and we're seeing a lot of enterprise customers continue to expand with us as they go and drive broader digital transformation initiatives. >> let's think about that. you're doing things virtually. it's not like you're going out to dinner with people and trying to press the enterprise why they need box you had the same number of very big sales. how is that possible are we missing something how we used to do business and how we do business more efficiently now? >> well, i think one of the great ironies we will look back on is that the industry that is focused on selling digital technology spends so much time in the physical world to sell the technology what we're seeing is customers want really great products they want those products to be delivered efficiently to them and you can do remote selling over a video conference over web
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x or zoom as easily as in person with the other benefit of you can reach more customers in a single day or week we have the customer conference happening tomorrow we have 25,000 registered attendees to the event, three or four times larger than the physical world so we're able to reach more customers. we're able to have more conversations and ultimately able to support our customers right now with our technology which is helping them move to the cloud. helping them secure their corporate data and making it easier to collaborate securely across enterprises and ultimately integrate with their applications. >> i speak to a lot of hotelers. a lot of airlines. and one of the things is the business traveler has disappeared. i listened to what you just said you're offering, inaugural rating complicated data for the new way of working maybe that your margins will permanently go up because you won't have people flying all over the place spending $900 a night at a hote
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room and $800 for a nice bottle of wine. >> we weren't spending $900 previously but point taken what this event forced every business to realize is what does it really take to serve their customers? how much can be done digitally how can they deliver better experiences? we talked to numerous investing, advertising agencies saying we're actually serving customers better in this environment because we can have a better client experience that's more consultation to bring senior partners in the conversations in a way that wouldn't be possible before because they had to fly around the world so i think you're seeing a lot of businesses realize they can be more customer centric as they move digitally that is not to say that we want the broader reason for why we're in this mode to continue we want offices to open up we think the future of offices is one where it's going to be a hybrid way of working. you come into the office for a set of tasks and activities but
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able to work remotely in more seamless ways. i think the future is a hybrid one but i think what enterprises are looking for is the ability to create better digitalization experiences for employees and customers and investing in cloud solutions to drive this. >> in the meantime, the starboard guys as helpful as you said they might be the month after they got in. >> yeah, so i think we got a great experience with the partnership. they've, you know, i think advocated for very positive continued evolution of the business and the underlying business model we felt the same as them last year we were growing too slowly and not producing enough profit and coming into this year we wanted to make sure we stabilize growth we didn't know about the pandemic at that time so we had certain estimations on what might happen and some of those were correct, some we had to evolve but what we're able to do is drive away greater profitability than the market an tas anticipated. that shows the strength of the underlying business we have and the efficiency we're able to
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deliver results with and i think we're going to just continue to march on this path of executing where we drive greater growth, greater profitability going forward and ultimately, i think it's a testament to the team at box and ultimately, the demand and market to the customers. >> it's incredible some stocks are selling at ridiculous levels, ridiculous multiple sales and some stocks are selling at i think, too cheap multiples to earnings including box. chairman and ceo of box. congratulations on the profitability. great to see you. >> thanks, jim. not everything has to be 100 times sales. i mean, sometimes you can buy a stock that's going to be doing well making money and it's reasonably valued like box "mad money" is back after the break. stay restless with the icon that does the same. the rx, crafted by lexus.
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it is time, it so time for the lightening round buy, buy, buy, sell, sell, sell. and then the lightening round is over are you ready ski daddy? time for the lightening round. let's go to cristos in connecticut. >> boo-yah professor cramer, aka jimmy chill. >> missile fire. he be chilling what's up? >> about six weeks ago you recommended this company and even though you don't like the industry, i want to know your take on it today do you still like parsley energy >> parsley and chevron are the only two oil stocks i will recommend. they are the two best run. parsley is small chevron is a big one and all the rest between tammy in wyoming
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tammy? >> caller: hi, jim. >> tammy. >> caller: i'm a first-time caller recently back in the market since covid and grateful for your guidance. >> you're quite welcome. what's going on? >> caller: thanks to your interview with the ceo of zoom, i took a nugget and turned it into gold. mentioned using the equipment, i purchased the stock the next day. it's up 47%. i already trimmed my position to take money off the table like the boss says and i'm playing on the house money. so tell me should i be doubling down, moving on, or -- >> no, you should be my co-host because you're doing everything right. how about they got zoom. how much do i think he's fantastic and got the amazing darrell at 35 told me not to worry. you're doing it perfectly. jerry in florida, jerry? >> caller: jimmy chill happy hump day. >> that's right. it's wednesday i totally forgot what's going on?
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>> caller: what are your thoughts on ay -- >> that's the company that's absolutely terrific but i got to tell you people will sell a stock like alteryx to get cash frankly, that well, we put the work in the next deal and that's kind of what is going on that's what i see when i look at what happened today with snow flake. let's go to jim in california, jim? >> caller: hello, mr. cramer. >> hi. >> caller: thank you for taking my call. it's an honor and privilege. uber, it's been positive rally the last six out of the seven days sell or hold i'm at my break even point. >> sell or hold. we don't care where the stock is coming from but where it's going to uber is okay people will take out food from now until the cows come home and with restaurants opening a little bit, a lot of delivery, uber eats is good. i like the industry
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consolidating so i think you're okay in uber dave in new york, dave >> caller: hey, jim, long time listener, second-time caller got a question for you we bought 1,000 squares of 367 i want to tell you where i'm going with net. >> i think that you made a little bit of money. time to move on. the rates are just okay right now. they were fabulous go back to 4.5 perhaps the rates can turn around. i know and hanson thinks they can. i'm a little more. cody in washington. >> caller: thanks for taking my call i've been listening a long time. >> okay. >> caller: i want to get your take on a stock that is more of a digital gaming platform but expanding to e commerce and fin tech, as well. it's ski limited. >> i see that stock going up all the time i don't know why that is i got to find out before i reck
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because of snow flake. they sold to get a piece of this red hot deal and that's what you better start getting used to the last thing we need is a title wave of ipos snow flake, that's exactly what you're going to get. don't get me wrong snow flake is a fantastic company and raising 6.5 billion. i predicted the stock would explode higher out of the gate but didn't expect it would double the darn thing closed up 112%. the stunning success for existing shareholders and anyone that got in on the actual deal at 120 lots of winners here the losers, though, everybody else no coincidence it came before a big sell off in the nasdaq they had to sell stocks in order to pay for the snow flake they bought earlier in the day. see today we saw the first wave in ipos from privately held
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companies able to cash out for ages many are exciting businesses with fabulous growth stories like airbnb cleaning up as hotel competitors fall apart there is the surveillance company, exciting financial services and good rx that has an app to save you a fortune on prescription drugs i use it how many companies will become public too many why? because i told you before the stock market is a market and when you add a bunch of supply to market prices tend to go down across the board specifically the big institution money managers who make up the bulk of the action don't have enough cash. look at snow flake the big boys wanted in on this one badly and many of them had to raise cash to get in on the deal when you run a large hedge fund, you might need half a million shares in snow flake to move the needle of your fund. that might set you back $100 million if you have half shares in the ipo and aftermarket
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that's a lot of money. you have to find the money institutional money managers probably don't have $100 million in cash lying around if they want a sizable position, they have to make a less sizable position in something else they need to sell stock in something that looks like snow flake to them and sell they did that's why the tech heavy nasdaq collapsed when snow flake nearly doubled out of the gate they realized they need more cash than they thought if they want to accomplish a meaningfully sized position maybe they were prepared to pay 150 but they weren't prepared to pay 250 so they had to sell something else which is why you saw the cloud stocks that seem like snow flake. the sky high valuations getting slammed almost immediately for example adobe delivered a great quarter. the stock dropped more than 4 %. service now got whacked on what might have been an update and zoom video, crowd strike and many others including big fin tech plays like paypal or square
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where there was positive research the high flying tech stocks, the only one that hung in there was sales force because sales force bought 250 million for the snow flake at the ipo price, investment that doubled. nice work if you can get it. this dynamic should actually worry you. yeah, it should concern you at home there are dozens of similar deals coming in in the not too distant future and they will put the same downward pressure on this group that's been leading the market higher. we have been through the ipo cycle before we know how it goes. we got a huge wave of cloud deals in 2014 and that experience was just brutal older people remember the huge wave of deals in 1999, 2000 and that was anallatinihilation the under raters like to front load the highest quality deals when the worst are coming public, the whole thing fizzles out because there is no more money to buy them at all and that's when things turn ugly
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people wonder what can kill a bull market. i say it's easy. flood the market with too much supply, particularly bad supply. they're not there yet by any means. i think today does mark the beginning of a trend that will do real damage to the best performers out there and you'll see a lot of profit taking between now and the end of the month. look at the late afternoon collapse of the nas. all of which can be blamed on the strength of snow flake you don't need to be panicking i don't want you to panic. it not a strategy. don't be that concerned but as we get more and more deals and we will after the snow flake performance, you need to get more and more cautious, healthy for snow flag holders, unhealthy for the rest of tech as we saw today. stick with cramer. e earned. the unmistakable lexus is. get zero percent financing on the 2020 is 300. experience amazing at your lexus dealer. find a stock basedtech. on your interests experience amazing
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keep thinking about campbells. here is a very good manager with a very good set of brands with a good yield and amazing cash flow and nobody wants the stock because they're so busy buying snow flake now, i like snow flake more than most people and i think the ceo is great i think paying 100 times sales for something is something that has tended not to work out whereas paying 15 times for a class brand name that might boar you but will let you sleep at night, that's from me. camp campbells. there is always a bull market somewhere and i promise to find it for you i'm jim cramer and we'll see you tomorrow
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>> welcome to the shark tank, where entrepreneurs seeking an investment will face these sharks. if they hear a great idea, they'll invest their own money or fight each other for a deal. this is "shark tank." ♪ first into the tank is a unique addition to the beverage industry. ♪ hello, sharks. my name is brandon zavala, and i'm the founder of apollo peak, and i am seeking $100,000 for 10% equity in my company.
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