>> and last minute halloween costumes. 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 not just to entertain but to educate and teach you. so call me at 1-800-743-cnbc or tweet me @jimcramer. we understand the term better than expected. we know that when a company reports sharply better than expected numbers, its stock goes up like alphabet nee google stock did. we also know when a company comes out with worse than expected numbers followed by the dreaded words "cuts forecast" as was the case after hours with amazon, the stock gets

but how about another category? a whole new one. it's causing stocks to jump today. the category that i want to call not as bad as we thought. the not as bad as we thought thesis helped get the averages from getting hit too hard today. the dow dipping just 30 points. s&p declining 0.3%. nasdaq losing 0.65% let me give you some prime examples. number one not-as-bad-as-we- thoughter. why, it's bristol-myers. not that long ago, bristol-myers was at the top of the heap, the gold standard, the go-to name in the pharmaceutical business because it had the best growth of all the old-line pharma companies. some called it a biotech stock in disguise because of its massive re-rating from a boring old drug company to a company with the winningest anti-cancer franchise out there thanks to the breakthrough drug opdivo. you may have seen the ads for this drug, the ones that encourage you to ask your doctor -- that's right, direct to

us. but a few months ago, we learned opdivo wasn't all that wondrous. in fact, it failed to meet some end points in an important lung cancer study that caused the stock from $75 down to the mid-50s immediately. then when still one more study came out showing this drug had inferior characteristics to merck's keytruda, bristol-myers broke down to $49 as the market judged it was just hype, not substance. today bristol-myers reported and they had some good things to say about opdivo and some of its other drugs. by this point, short sellers, who had been swarming over the stock because it seemed like the second coming of a valeant, a very unfair comparison that nevertheless got around. well, they were stymied because as poorly as this company has played its hand when it came to promising opdivo's greatness, management was understatedly positive today. or to put it in the prism i'm using tonight, the quarter simply wasn't as bad as people that it would be. the stock rallied more than 5%. i actually still think bristol-myers is promising too much but today's gains are based

just as owners get disappointed and sell their stocks when they don't like what they see, short sellers get disappointed when there is good news and they have to cover their positions, which then sends the stock higher. that's the truth behind bristol's big move, one that i don't trust as much as i'd like to because it's based on the company simply not screwing up badly again. i felt the same way about cheesecake factory and buffalo wild wings. both companies reported last night. as far as i'm concerned, the numbers were nothing to write home about. wall street was looking for 1% to 2% growth from cheesecake factory, and the numbers came in at 1.5%. hey, that's not better than expected. that's just not as bad as we thought. a tech stock that delivered that kind of number, one that failed to beat the top line, would be slaughtered. but when it comes to the restaurant business, if you do a

consumer seems to be so strapped that's in the middle of the range, you know what you are? you're a hero. no wonder cheesecake's stock rallied more than 5% today and actually hit a 52-week high. because it wasn't as bad as we thought. in fact, the restaurant business is so bad right now that people loved, loved, loved it when buffalo wild wings predicted its franchises would have minus 1.70 franchise same-store sales. that's right, down 1.7%. and what happened? it came in at minus 1.6%. the fact that it was a negative sales number, that didn't matter. the stock went up over $8 today or 6%. it's almost stupefying, isn't it? but that's how bad this industry is. in other words, in the land of the blind, the one-eyed restaurant chain is indeed king. twitter almost pulled this off today. it came very close. the emphasis of course is on

of their daily average users was actually positive. you see, twitter was supposed to report a horrendous number. part of that whole process by which the company was unable to sell itself. amid all of the other rancor and bad will that developed during a process that was played out way too publicly for many was the belief that when twitter next reported, it would deliver numbers so disappointing that the stock would go right back to the $14 level, where it was before all the takeover hoopla started. but twitter didn't do that. it managed to report the kind of disgustingly -- it did not report the disgustingly terrible quarter that investors had anticipated. for a little while it looked like twitter's stock was going to break out for good. however, then we learned the company was shutting down vine. that was something at one point speculators thought would be the reason for someone to acquire twitter. so the pre-earnings desperation came back to life. it didn't help they trimmed their forecast either. my take? listen.

lot of people's today. you know what? i think genuinely it wasn't as bad as i expected it would be. twitter did beat on both revenue and earnings. plus i think this number makes it more likely that twitter can come back into play. that's right. you heard me. especially if they develop something that can use machine learning to actually knock off the trolls, which i keep telling you is very important to the valuation. if they do that, i am saying right here, right now, that potential acquirers will come back, and this company will be bought by someone else who can use all that data to help their clients make better decisions about what consumers want and where their advertising dollars could be best spent. but, see, it's a one-two punch. first twitter has to fix the troll problem, making it more of a community that people want to go to or not be scared by, and i think they could be doing that. then they have to keep the process of the sale quieter. it got totally out of hand the last time the company put itself up for the sale or was being sold, to the point where it became $29 a bus, for $29 a

to buy this thing, correctly since the acquirer's stock would have been pummeled at that price tag. i think the discipline of closing vine and chopping heads, while at the same time showing some growth, is going to make twitter more attractive to buyers. but, again, not until the troll issue is dead and buried because the shareholders of any potential suitors might despise twitter for its inability to tamp down the hate even as they can't keep their eyes off it to see what's happening. believe me, they continue to fix things up, and a google or a salesforce will be right back there kicking the proverbial tires. finally there are companies that recognize they can change the coloration of what people think about them and manage to make their stocks soar. for years now, qualcomm, the company that develops intellectual property integral to the modern-day cell phone, just kept disappointing wall street. management, which is very pro-shareholder, was beside itself.

that make wall street see that it isn't as bad as they think it is? how about by making a big acquisition that in one fell swoop changes the company's stripes from a so-so cell phone chip play with oodles of cash overseas that it can't repatriate without paying some painful taxes, into an internet of things automobile semiconductor company with some terrific cell phone technology on the side. that's what happened today when we lrn down $47 billion to buy nxp semiconductors, a foreign domicile company that's one of our favorites. you can follow along for the rationale at actionalertsplus.com. qualcomm stock actually jumped more than nxpi's. why? it's not as bad as we thought. here's the bottom line. it's great to be better than expected, but in this market, i will gladly take not as bad as we thought. lately that's become a time-tested way to drive your stock higher. why bother to look through it? the darn strategy is working. patrick in florida, patrick. >> caller: how are you, jim

>> good day for me, patrick. how about you? >> caller: excellent. thanks for asking. jim, a question for you. i'm long on tesla, and with their recent earnings report and solar city activity, i'm wondering what your thoughts are on their growth and stock appreciation. >> patrick, i think if they were not buying solar city, i think that stock would have up very big on that quarter even though it was aided by some credits. but because they are buying solar city, the stock stalled, and that is the issue in my eyes. i need to go to charles in missouri. charles. >> caller: hey, jim. i live in a small town in the boot heel of missouri. walmart just announced closing of our local store in january of 2017. we've had a store here for 40 years. in light of the jet.com purchase by walmart, are small stores like ours sacrificial lambs, and what does this mean for the stock in the company's future? >> well, charles, it is true

some stores they think are underperformers and i think it's about time. i feel bad they closed your store. the jet.com acquisition is very important. i continue to support exactly what doug mcmillan is doing, and he is always welcome on "mad money." how about kevin in tennessee? kevin. >> caller: mr. jim. i have owned tractor supply for years, and it's performed great until its recent decline of 30%. do i buy, sell or hold? >> oh, boy. you know, that was such a bad quarter, and i kept thinking when they reported their actual number after they first said that things would be bad, that it was time to pull the trigger. but i have to tell you something. now we got to wait for tax loss selling before i can say it is time to buy tractor supply. it's not outstanding. it's not even great. really it's not even good, but it is not as bad as we thought. and right now that's enough for

helping zillow, h&r block, and kimberly-clark connect their businesses. could it help your portfolio as well? i'm sitting down with the ceo of servicenow to find out what it has to offer. then the neglected sectors are alive with the sound of profits. i'll tell you which ones beaten down are suddenly showing signs of life. and groupon closed down more than 20% today, but it's still up over 30% for the year. i'm talking with the company's ceo, so stick with cramer. >> announcer: don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer, #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc.

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aleve pm for a better am. look at this tremendous rally in servicenow, the cloud-based software play we've liked so much on "mad money." here's a company that helps corporate information technology departments to develop their own internal applications as well as providing enterprise software that can help its clients automate various

like human resources, legal, finance, and facilities management. i've always thought that servicenow is a well run company with a terrific niche, and last night we got proof their business is in great shape. the company reported a two-cent earnings beat off a 21-cent basis with in-line revenue up 37% year-over-year. very bullish guidance for both the next quarter and the full year. plus management talked about extremely valuable new client wins on the conference call. put it all together, and you can understand why the stock is 7% hi can it keep climbing? let's take a closer look with frank slootman, the president and ceo of servicenow, to find out more about the quarter and the company's prospects. mr. slootman, welcome back to "mad money." >> thanks, jim. it's going to be with you again. >> all right. it's not easy to have accelerated revenue growth when it's a company your size. actually this is the first one in 2016 that we've had on, which is pretty amazing. how can you accelerate revenue growth in this environment? >> well, it's a function of us really hitting on all cylinders. when all our channels, all our

in at the same time, you know, you go into overdrive. and you sort of saw the effects of that. >> i saw there was a largest contract too in finance. i know a lot of banks have been hobbled together over time, and they all have different kinds of -- all the different kinds of systems all over the place. was this giant contract one of those where a bank had made acquisitions of other banks and they really finally had to get it together? >> yes. typically -- well, what you see here is that these very large institutions are sitting on large numbers of disparate legacy systems and they're going through a process where they want to massively consolidate and standardize on a fresh new platform. >> all right. now, when i see that you do h.r., the first thing i say, wait a second, we have a neil bush on, and workday is so great at h.r., how can they be going up against servicenow?

>> yes. i mean we're customers of workday as well, and workday is a customer of servicenow, so we actually have a very good value added relationship. we're really focused on processing the work that comes into h.r. organizations, people, employees and large companies have a constant flow of requests, issues with paychecks and so on. that work flow is run through servicenow. sometimes that results, interchanges io well if it's a change of address or a new member of the family, anything that changes the actual record, that goes into workday. but we typically, our systems are deployed across functional boundaries. in other words, we're not just launched to support h.r. we're also launched to support i.t. facilities, legal, and markets, and large enterprises want to have one service experience, not one unique to each service area.

i'm inputting a question to servicenow, or would i think i'm just inputting a question to the company? >> that's exactly the point. you know, you don't need to know who you're talking to. >> interesting. okay. now, you want a piece of business with a company that we have long favored for about 140 points, constellation brands. i know it's a new piece of business so we don't have to get but why would they be attracted to servicenow, and who else would they be thinking of doing? why do you win that business? how come you get that contract? >> well, we win for a variety of reasons. but, you know, typically there's a big modernization effort under way where, you know, companies are trying to consolidate and refresh in terms of architecture, in terms of platform, and set ourselves up for 10, 15, 20 years to really have a platform that they can build on over that period of

at the same time, they're looking for transformations. they want to change the service experience that they historically have had, something that is much closer to the consumer experience that you get in online retailing, online banking, and so on. and then finally, we're also looking at redefining the economics, the cost structures. organizations are always looking to take out big chunks of cost, and that's very much central to the big initiatives that we do with these companies. >> but you also it companies take like a zillow. when it was a smaller company, you probably did a lot of things on paper. when it's millions of people are logging in every single day, it's a different story. so they would bring in a servicenow to be able to make sure they see correct patterns, know if there's something wrong within their organization? >> well, first and foremost, we got to make sure that the zillow infrastructure is always in the air and available for their end user clientele.

to making sure that zillow's service experience is available and performs and so on. >> all right. last question. did you chuckle when you saw the e-mail that was released from colin powell -- they actually cracked his e-mail box -- which said that you were a target of salesforce? i know that you and mark are friends, and i don't think there was really anything going on at all. >> yeah, i don't think that many people realize, but, you know, ceos talk. everybody talks in silicon valley. you know, it's not always about m&a. we compare notes on many things. it's very informal. all companies maintain lists of assets they're interested in. it's not quite as eventful as i think the industry observers are making it out to be. >> all right. thank you so much and congratulations on a great quarter. frank slootman, president and ceo of servicenow.

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you know i like to tell you what's happening behind the scenes on wall street, peeling back the curtain so that, well, you know what's really going on, why certain stocks move the way they do. and right now we're hearing talk about what's known as a re-rating. re-rating some very big sectors, meaning institutional investors are pushing money into groups that have been stalled out or neglected for ages. they suddenly come alive because something has happened to make them more valuable than they were just a couple quarters ago. take the banks. the banks make up a huge percentage of the s&p 500, but their performance has lagged behind the averages for ages and ages. that's because the banks have been stuck in interest rate and regulatory hell. the financials simply can't make that much money off your deposits because rates are so low. lately, though, investors have

potential rate hike, which will let the banks generate higher profits pretty much risk-free. but this time right now, in the last couple of weeks, buyers are gobbling these bank stocks up not because of a rate hike but because of fees. yep, the focus is on fees, fees, and more fees. maybe enough fees to make people want to own financials for more than just the net interest margin. that has been the only thing anyone has cared about for three years. where are the banks making this money? when you see giant ipos like zto express, forget the fact that it didn't do well, we have to take notice of what it means for the banks. they're making money on that, especially it sounds like a snapchat ipo might not be that far away, and that is going to coin money for the banks. initial public offerings are very lucrative business but there year there haven't been very many and it's hurt the equity sales trading. that seems to be changing this

meanwhile we've got mergers galore, another terrific business for the investment banks. when you see qualcomm's $47 billion purchase of nxp semiconductors, a transaction that's driven the acquirer's stock up dramatically, that's right, qualcomm, you can almost taste the big m&a fees especially since it comes on the heels of the at&t and time warner tie-up. when you see the wild trading in currencies that we've experienced lately, coupled with all that bond activity, you got to start thinking maybe the brexit induced turmoil that produced such rich trading fees might not be one time only and when you see the long growth that we're getting at both large banks like bank of america and jpmorgan, you have to believe that their gross margins could finally be climbing just from lending alone. how big could the ripples be? i'll go out on a limb here and say if the federal reserve raises rates in december, get this, this is unbelievable. the most beleaguered company in

fill in the blank, yes, talking wells fargo, might even see its stock go higher. now, that would be something. in the meantime, citigroup remains the cheapest of the banks on a book value. i think it can vault $15 from here. look, it's not just the banks. we're seeing a similar re-rating of the oil service stocks. once crude got to 50, domestic drilling started picking up. the big dogs that provide assistance to the oil producers, what's known as the scoop in oklahoma, are seeing a real reviva that's how the stocks of halliburton and baker hughes have been such horses. finally, i remain firmly convinced that the airline stocks are back in business. i say that because when the best run airline, southwest, says that things are pretty downbeat

stocks in the cohort are either hit with merely glancing blows or actually go higher on the same day of a southwest morning, well, that's just a plane of a different color. the much improved united continental remains my favorite in that sector. here's the bottom line. the banks, the oil service companies, and the airlines are all groups that the market had given up on for at least the last year, maybe longer. and they're all inching back. i think all prime to explode higher if just a few more things go well because the fabled re-rating process has this quarter finally begun. p.t. in california, p.t. >> caller: jim, how you doing? greetings from your second biggest fan in the world. >> thank you. what's happening? >> caller: not much. i ran into a 3-year-old on the street that had a "mad money" binky. >> that's good news. >> caller: so, hey, i was listening to exchanges by goldman sachs, and they're rolling out a pretty cool retail bank online. deposits for as little as a dollar and some really attractive and aggressive personal lines of credit from $3,000 to like $33,000. i'm wondering with the trouble at wells fargo, are these innovations at goldman sachs a

>> i think you should be bullish because they're a core business of investment banking, and trading are doing quite well. i liked the quarter very well. marcus, which is the name of that online bank, it's not going to move the needle. what will move the needle are these big fees. i think goldman sachs is too cheap a stock. jay in indiana, jay. >> caller: hey, jim. thanks for your time. i have a two-part question, and it's a v years, and that's why he bought more. what is your view on it? and the second part is to reduce the debt that they have, do you think they should sell bausch & lomb if there's a potential buyer? >> i was going to say i don't know if there are any buyers out there for bausch & lomb other than ones the justice department would block because of consolidation. that means that asset may not be able to command as much money,

and i am on the same side as bill miller in a lot of different things, particularly the airlines, but not when it comes to valeant. >> don't buy. don't buy. >> bruce in florida, bruce. >> caller: hi, jim. i was really kind of wondering if you can maybe answer this question for me. why is chevron trading so much higher than exxon mobil, conoco phillips and b.p.? >> that's a good question. because exxon is trading higher. these companies are due to report. chevron is regarded as being the most aggressive and frankly in many ways the most scientific of all of the different oil companies. but exxon and chevron are up the same amount. if you ask me, i always like the chevron guys. i think they offer a lot -- bring a lot to the table. but my charitable trust owns

better yield right now, a little bit bigger than these guys, and i think has more of an opportunity to bring out value. so i think if you want to be in the patch, go occidental. a little less yield than chevron. little more yield than exxon, but a lot more opportunity. anyway, banks, energy, and airlines, three areas of the market that could be ready for a sustained rally after being out in the cold. i particularly like the oil service companies. much more ahead on "mad money." i'm talking with groupon's ceo after a very rough earnings then with student loan debt at $1.3 trillion, i'm talking to one private company that thinks it can help. and all your calls rapid fire in tonight's special edition of the lightning round.

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after spending a long time in the wilderness, groupon finally seemed to be executing a comeback and as of yesterday, its stock was up more than 70% year-to-date. then we got two pieces of news. groupon reported and announced it was acquiring its rival, living social, for an undisclosed sum. the stock got taken to the woodshed today. what was so bad about the quarter? actually frankly it's a little hard to say. groupon's top line and bottom line numbers were both slightly better than expected. the company is growing its user base and rationalizing its global footprint. it harder for them to turn a profit at least in the near term. i think the real reason the stock got hit today is it had run up dramatically going into the quarter. in other words, it was priced for perfection and what we got was merely good. should we view this as a potential buying opportunity, or do we need to worry the turnaround is running out of steam? let's check in with the ceo,

good to see you, sir. >> thanks for having me. >> you heard what i just said. honestly i spent most of the day trying to figure out what everybody hates about it, and i decided there wasn't anything except for the fact it had gone up a lot, and people thought this is time to be able to ring the register. >> your guess is as good as mine on that one. i looked at it. it's been a little bit confusing. we had a strong performance, as you said, and the fundamentals in the business are showing great progress. as we look at our execution against our strategy, we'd say so, you know, i think maybe there was some fast money moving out and some perfection expected. >> right. >> but i think we delivered solid results. >> look, i thought typical for the research, credit suisse did a good job. they said, in line third quarter, results, expect gradual progress on turn around. i think people might have expected instant turn around. you have never promised that. >> i have not. i'm a practical guy.

out end up having conversations about roads to recovery that are years long. when we set out, we said this wasn't going to be instant. it's not going to be simple. but in that path, we've also delivered now four quarters of really steady progress. you look at our north american local business, our core business, accelerating over the last three quarters. i'd say most people again -- and that's based on saying this is going to take a while -- but you're going to see progress we've been clear about that. >> you made the acquisition of living social. >> yeah. >> you said i think pretty much when i asked you this, undisclosed sum. but to some, that was rather radical. i think the more radical thing was to be able to sell some things that you owned or shut things that you owned and that living social actually fits into your core mission. >> i agree with you.

year ago, i basically said, look, we're going to do four things. we're going to simplify our lives. >> and you did have a lot of stuff that was hard to understand. >> we had a lot of stuff. one of those key strategic pillars was simplify and streamline the business. that meant removing some businesses that weren't core. >> okay. >> and when we did that, we also said we're going to continue to be opportunistic on m&a, we believe we can do both. we believe we can be smart operators and also acquire companies as long as they pass a very high bar. that high bar was again simple. it said they have to be on strategy. certainly. >> it has to be down the middle with where our focus areas are and that's north american local. that passes that bar. >> what i'm saying is that the reason i mention that is i was looking at your cash position. you have $870 million, almost 40% of usual market cap.

acquisition. so, you know, we look at that in multiple ways, both the financial side and now with what we know about integrating businesses and operating this business well, we don't see it as a material distraction from our day to day operations. we very much look at this deal as can we acquire a significant number of customers at a cost of acquisition that we think is effective? >> this was a more internal investment acquisition. you made a decision that -- >> i mean weoo 12 to 18 month horizon, is it going to pay us back on a gross profit basis. in this case, we feel strongly that it will. >> you must feel that way about advertising on tv because i'm seeing those. >> we do. we do. we've been quiet in that world for years. and i think, you know, it was time to get back on the air. it was time to start educating people about how groupon has changed. we've seen great response to that.

tell me what you mean by that. >> we've seen that it can be an effective customer acquisition channel for us. when i say effective, i'm putting the brand stuff aside. i'm saying if we measure it and we -- do we see the roi we need to see. we measure it like every channel we operate in. we can acquire a good size number of characters at an roi that we think is really solid. we treat it like every channel we operate in, and it has that extra benefit of teaching people what's new at groupon. >> rich, you're a regular guy, and you're one guy trying to turn around a big company. wo terrific -- and i know you're going to say there are -- international markets, would it be better just -- because the thing got so far flung. just say, okay, listen, i'm going to focus on domestics because the opportunity is pretty great domestically. >> i mean we went through every country that we operate in, and we put them through what i think is the right framework. we basically said do we have a strong competitive position in the market? does the market have characteristics that we like? does it have strong mobile penetration? is it a connected market. do we believe we have investment

where we didn't think we could win, we made the hard call, cut them out. we think we have a good winning formula. we believe they can support investment long term and be good solid businesses. >> one last question. it's really unnerving when i mention groupon, you know. i say i think they've bottomed. people said, jim, google could wreck them in a day. >> yeah. >> they can put them out of business in a day. what do you do when you hear >> i hear that all the time. >> right? that's the rub. >> at least i hear that in the media side. i don't really hear that from customers. but i think the big thing you have there is context. and i think it's the challenge that you have with google. you know, we or anyone else that has a different kind of context, people go to google to find stuff. people go to groupon to buy locally. >> right. it's different. >> it's a different animal. now, we don't have their scale. we're acquiring scale as fast as

but when people think of groupon, they think i'm going to go find a great restaurant. i'm going to go find a great spa. i'm going to do something with my kids this weekend. i'm going to save a ton of money. changing that, incredibly hard to do. >> we'll leave it at that. you answered a lot of my questions. i really appreciate it. that's groupon's ceo rich williams. i think the stock is really interesting down so badly today because there really wasn't anything that should make it go down like that. "mad money" is back after the break. going to the skate park today? maybe...

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>> announcer: lightning round is sponsored by td ameritrade. >> it is time! it is time for the lightning round! that's where i take your calls rapid fire. you tell me the stock. i tell you to buy, buy, buy or sell, sell, sell. we'll play this sound -- [ buzzer ] -- and then the lightning round is over. are you ready, skee-daddy? it's time for the lightning

dakota, scott. >> caller: hello, jim. >> yo, yo. >> caller: how you doing today? >> good day. how about you? >> caller: good, good. thanks for taking my call and thanks for your show. i've learned a lot from you. >> thank you. >> caller: my stock is fireeye. i keep on buying it as it's going down, and it's really down there now. >> maybe at some point. i can't recommend a stock on a takeover basis when the fundamentals aren't that good. the one i've been liking is proofpoint because that does the e-mail blockage, which iwh let's go to craig in minnesota, craig. >> caller: big booyah from minnesota there, jim. >> all right. sorry we had to beat the vikings last weekend, but that's just sometimes the way it is. what's going on? >> caller: well, i got shopify, ticker symbol shop. >> you know, it's up too much. it's up too much. it's up 60%. that makes me nervous. i know it's doing well, but it is up too much, and i want to be a little cautious here. let's go to randye in new york, randye. >> caller: thanks for taking my

>> caller: i'm interested in impinj. buy, sell, or hold? >> no, we like the authentication. we did a piece about it saying if it pulled back, we'd be a buyer. it's pulled back. it's getting kind of interesting. how about alex in california, alex? >> caller: booyah, jim. >> booyah. >> caller: first-time caller. how about cynosure? >> oh, the laser applications, no. my charitable trust owns allergan if you're going to be in that. but allergan is still going to come down maybe a few more points as we get into the election. let's go to david in massachusetts, david. >> caller: jim, booyah. >> booyah. >> caller: i was wondering your thoughts on erii. it's been performing well the past year but -- >> yeah. you know, let me do more work on that because it's such a fascinating company. we've got a lot of homework to do. let me do more work on that. let's go to george in florida, george.

>> well, zoe's kitchen did not do what i wanted, which is to say not as bad as i thought. i like the long-term thesis, though. if you have the patience for a year, i think that zoe's is going to make you money because it's fresh food, and it's got a great concept. but it might take a year to recover because when these restaurant stocks go wrong, they stay down. vedula in california, vedula. >> caller: hi, jim. nice talking to you. >> same. >> caller: on semiconducter, buy we just hit the jackpot with nxpi on my charitable trust. now i'm looking at nvidia. if that one pulls in, that's a better one. one more call. charlie in virginia, charlie. >> caller: thanks, jim. i'm a longtime fan and a fellow b&b owner. >> really? >> caller: in november 2014, you discussed verifone, ticker pay, and discussed how every retailer would need a new credit card machine. >> but then i pulled it when it

any money in the 20s. i said this one was a bad one, and it remains a bad one. they just weren't allowed to make any money in this darn thing. what can i say? and that, ladies and gentlemen, is the conclusion of the lightning round! >> announcer: the lightning round is sponsored by td ameritrade. ahh...still sick, huh? i'll take it from here. i'm good. i just took new mucinex clear and cool. ah! what's this sudden cooooling thing happening? you can feel it right away. wow, that sort of blind-sided me. and it clears my terrible cold symptoms. ahh! this is awkward. new mucinex fast-max clear & cool. feel the menthol burst. and clear your worst cold symptoms. start the relief. ditch the misery. let's end this. mmm... i can't believe it's so delicious. i can't believe it has 40% fewer calories than butter. i can't believe it's made with real, simple ingredients.

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we are always on the lookout here on "mad money" for privately held companies that are upending their respective industries either with new practices or innovative practices. that's why we go off the tape and on the hunt because sooner or later they're going to impact the companies you can invest in. take earnest, the online lender that specializes in student loan refinancing and personal loans for everything from buying a home to paying for a wedding reception. with earnest, the whole process of borrowing money can be done online and they'll charge you lower interest rates that

they look at a lot more than just your credit score, and they're proprietary software helps them figure out whether or not you're a good credit risk. the company has been around for three years and they just last month crossed the billion dollar loan mark. i think this is a great example of how the online lending space is dragging the financial sector kicking and screaming into the 21 century. let's sit down with louis beryl, the co-founder and ceo of earnest, to hear more about his company and what sets them apart from both traditional banks and the plethora of online lenders that have popped up in recent years. good to see you, sir. >> thank you. we've had a couple of the online lenders on, and candidly they haven't done that well. i would say that either had trouble finding investors to buy their loans, or they were sloppy underwriters. how do we distinguish that from you? >> yeah. i think that the first part is what you were just talking about, sloppy underwriting.

offline, online. the way we do that is we're actually looking at the full financial profile of all the individuals. so we're looking at their bank accounts. we're looking at their past debts, but we're also diving into their asset accounts, and that's something that no one else is doing. and we're doing it by connecting directly to their online financial accounts. >> now, i would presume that a jpmorgan, wells fargo, could do this if they wanted to? >> yeah, i mean i think that when you talk about could have, would haou other more innovative companies are doing, but i think ultimately we're totally vertically integrated. and we rethought from first principles how would you assess someone? so this happened to me. i was going to graduate school. it didn't really make any sense to me that you weren't looking at all my past job history, and you weren't looking at all of the savings i had right at that moment in time. and if you think about the traditional system, the traditional system kind of had built up this reliance on credit bureaus.

missing cash flow and -- >> you're talking about like a fico score. >> exactly. >> as far as you're concerned, that's almost an abstraction. >> it's a subset. if you think about a balance sheet like, you know, the balance sheet of any consumer, you know, the credit score, the fico is just a summation of the lines on someone's credit bureau report, but it's got lagging data, and it's totally missing the other side of the balance sheet, which is the asset side. then it's totally missing the income statement. >> excellent. people who have us >> so the average borrower saves just under $22,000. so for the billion dollars of loans that we've done just over, it's $300 million in aggregate that we've save the our clients. >> and how much money is earnest able to make? some banks would say, look, they must be not -- they're taking a risk by not making enough. we have to make up enough so that we don't -- if we lose, we're still okay. >> yeah. i mean so we charge very low interest rate.

>> mm-hmm. >> but what we're doing is we're really good at, one, reducing our costs using software and ought make as well as really assessing the risk. so, you know, over the whole life of the business for a billion dollars of our student loan refinancing, we've never had a loan default outside of the result of one of our borrowers passing away? >> never? >> mm-hmm. >> none of our student loans. >> that's extraordinary. wow. about wells fargo, is that an opportunity for you? do you think people say, you know what, if the so-called greatest banks in the world are doing this stuff, i am willing to venture out and go to a bank that is new that i trust more than the old? >> yeah. i mean i think financial services in the whole history of financial services is built on trust. but i think -- and even in many

but i think when you look at some of the larger incumbents like this wells fargo example, this kind of chase for revenue and chase for earnings, they have seemed to have lost their way. this is i think just another example. but, you know, when we started this company three years ago, we knew there was a huge opportunity to really start over from scratch and build something better. >> last question. i find it intriguing. you keep the loan. >> yeah. >> so if i get in trouble, i actually can talk to someone? >> exactly. we originate all the loans on our balance sheet, and we do use the securitization market to finance our balance sheet. but then we do all of the loan servicing for the life of the loan. so that's something that's also unique. like i said, we're totally vertically integrated. we have a mobile app. we have a web dashboard, and we've innovated a lot of features. one of the features on the servicing side is a skip a pay feature. if you're in good standing and you'd like to take a month off,

new marcus, and that's one of the features of ours that they've emulated. >> excellent. anyway, i think it's very creative and a great solution for a lot of people. thank you so much for coming on. that's louis beryl, co-founder and ceo of earnest, and it's spelled e-a-r-n-e-s-t. thank you. >> thank you. i stole the other team's mascot for good luck. wash it? yeah, wash it with febreze. for all the things you can't wash, use febreze fabric refresher wow [inhales] it really smells great in here. dog barks and try pluggable febreze, with up to 4 times the freshness in one refill. pluggable febreze and fabric refresher

"whatcha doin?" "just checking my free credit score at credit karma. "what the?" "don't you know that checking your credit score lowers it." "actually, checking your own credit score with credit karma doesn't affect it at all." "i guess i could just check my credit score then."

all right. doing the work on amazon. yes, they did not give you what you wanted, but the stock had run up big. remember what i've been saying about this quarter. if a stock has run up big into earnings, it tends to sell off, particularly if you say anything that's a little bit at all downbeat. and i will say that amazon was like that. don't freak out if you own amazon. just be patient, a couple of days maybe. if you don't own amazon, maybe you've picked some up. alphabet, what can i say? it's good right now.

just for you right here on "mad money." i'm jim cramer, and i will see you tomorrow! scary moments aboard governor mike pence's campaign plane as it skidded off the runway while hydroplaning coming in on a landing. does hillary clinton have her sights set on joe biden joining her administration? >> they have vowed t the government sticking it to our secret service agents? >> the charity that continues to build robin williams' legacy. >> and when rocket scientists focus their attention on pumpkin carvings, the results are out of this world. "early today" starts right now. >> oh my god. >> remain seated. >> laguardia national airport, aircraft down. >> good friday morning, everyone, i'm ayman mohyeldin.