Tag Archives: Jim Cramer

Business

Our goal is bigger than just taking Tesla customers

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The founder and CEO of Fisker told CNBC on Thursday that the electric-vehicle startup is trying to do more than just swipe market share from Tesla.

Henrik Fisker made the comments in an interview on “Mad Money,” one day after his company announced it had inked a key production deal with Foxconn Technology Group. The Taiwan-based firm is best known for its role assembling iPhones for Apple.

“At the end of the day, we’re not out here just to go and take Tesla customers away from Tesla,” Fisker told host Jim Cramer. “That’s great if they come … but the real market opportunity is the 80 million people who buy a new car every year. That’s gigantic opportunity.”

Cramer had asked Fisker how he believes the design of the company’s first expected vehicle, called the Ocean, rivals those from Elon Musk’s Tesla, which is the dominant EV brand in the U.S.

While battery-powered electric vehicles expected to continue growing market share compared with internal combustion engines, the space is growing increasingly crowded. In addition to startups like Fisker, established auto titans like General Motors and Ford are investing heavily.

“We didn’t want to do another ‘me-too’ Tesla. That’s what they’re doing. That’s great, but we really want to do an alternative,” Fisker said, touting the Ocean as a true SUV. “That’s what will be differentiating us from other car companies that are really making hatchbacks or sedans,” he added.

The Ocean, which has a starting price of $37,499, is set to go into production in the fourth quarter of next year. In October, Fisker struck a deal with auto supplier Magna International to manufacture the Ocean.

Fisker, a well-known auto designer whose previous EV startup went on to file for bankruptcy, said the company’s ability to secure high-profile partners in Magna and Foxconn demonstrated its potential.

Fisker and Foxconn have so far signed a memorandum of understanding, with the deal expected to close in the second quarter of 2021. According to the companies, Foxconn plans to make the Fisker’s second vehicle; production is set for the fourth quarter of 2023.

“When it comes with Foxconn, I think that really stamps in steel almost that we have a business model that works. It wasn’t just a one-off thing that we made a deal with Magna,” Fisker said.

Fisker, which last year went public through a reverse merger, saw its stock close down 4.43% Thursday to $21.58 per share. The company released fourth-quarter results after the bell, reporting a loss from operations of $31.3 million.

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Business

GameStop frenzy leads to unrealistic expectations for returns

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CNBC’s Jim Cramer on Thursday questioned “are prices real” on Wall Street anymore, as he exasperatingly tried to explain GameStop’s rally of as much as 175% over the past two days.

“I think the average American right now is trying to figure out how do I find a stock that triples,” Cramer said. “‘Forget what you guys are talking about with the FAANG. I want a triple.'” FAANG, an acronym coined by Cramer, stands for big tech stocks — Facebook, Amazon, Apple, Netflix and Alphabet’s Google.

“It is what people want. They want a triple. That’s not necessarily what we can provide,” the “Mad Money” host said. “Robinhood wants it. WallStreetBets wants it,” he added, referring to the online brokerage popular with young investors and the Reddit forum at the center of the GameStop saga.

Against the backdrop of the economic damage from the coronavirus pandemic, Cramer said incredulously that GameStop is “what’s gripping America” and the investing public.

The online-driven trading frenzy around the video game retailer ignited again Wednesday, when the stock doubled following the announcement of next month’s departure of Chief Financial Officer Jim Bell. The stock soared over 70% again Thursday at one stage before cutting the gain in half in volatile session.

Cramer said it seems unlikely that a CFO change could be the catalyst for such moves.

Ryan Cohen, a major GameStop investor and co-founder of online pet food retailer Chewy, and GameStop itself have been quiet during the outsized swings that began last month with a hedge fund short-squeeze around $20 per share, which sent the stock soaring 2,300% to as high as $483. GameStop crashed below $50 by mid-February before Wednesday’s spike.

Cohen did post a cryptic tweet Wednesday afternoon, and that had Cramer and the other “Squawk on the Street” hosts speculating on Thursday morning what it could possibly mean.

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Business

Gen Z and millennials are changing corporate America

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Freelance contractor Upwork had its best growth year as a public company last year and CEO Hayden Brown sees no sign of momentum that started before the coronavirus pandemic slowing down when the economy reopens.

Younger workers, scarred by a job market battered by two recessions in just over a decade, are increasingly seeking more control and flexibility over their careers. The trends have only been heightened by the remote work world, giving companies an opportunity to adjust and tap into a global talent pool of independent professionals, she told CNBC Wednesday.

“The paradigm has totally shifted,” Brown, appearing on “Mad Money,” said, explaining that recessions in 2007 and 2020 dampened workers’ trust and loyalty. “We’ve seen that again for years. That’s not a new trend, but it has certainly accelerated today with more than half of Gen Z freelancing and 59 million Americans freelancing.”

Gen Z, short for Generation Z, is made up of young people currently in or entering adulthood who are now navigating their way through a pandemic-hobbled economy. The age group is also known as zoomers.

Millennials, the older counterpart, came of age during the Great Recession.

Upwork, a labor marketplace that went public in 2018, is helping businesses harness the gig economy for both short-term and long-term projects. The independent economy has disrupted various industries, giving rise to household names like Uber and DoorDash.

Brown said more than 70% of freelancers on the platform are college educated and many are earning high wages.

Unlike ride-hailing apps like Uber, which saw revenues tank 21% amid the pandemic after years of multi-digit growth, the small-cap Upwork saw business accelerate in 2020. Revenues of the Santa Clara, California-based company surged 24% last year to $373.63 million.

Shares are up 522% over the past 12 months and hit a 52-week high Wednesday before closing at $53.36.

“This is a long-term trend that has been happening in the workforce, and companies are waking up to the fact that if they want to be working with the best talent, they have to be tapping into the independent economy,” Brown said. “They cannot be limiting themselves to full-time employees.”

In 2021, Upwork expects business to grow at least 23%. The $6.5 billion company provided revenue guidance of $460 million to $470 million for the full-year.

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Business

Cramer on buying growth stocks after inflation scare shakes up market

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CNBC’s Jim Cramer advised that market players have two ways to approach high-flying growth stocks that teetered and tottered their way through a volatile session on Wall Street Tuesday.

Investors can choose to join in on the sell-off that has dropped some tech names like Apple into negative trading territory this year.

The other choice — taking a cue from Federal Reserve Chair Jerome Powell’s restated commitment to leave interest rates at low levels — is to hold on for the ride and consider loading up on worthy stocks discounted from their highs, Cramer said after the market closed mixed.

“After today’s late afternoon rebound, it’s not too late to sell the more egregiously expensive stocks if you want to,” the “Mad Money” host said. “But as for the better growth stocks, down more than 10% from their highs, call me a buyer. Not all at once, not big, but a buyer nonetheless in any retest of that 9:47 a.m. low that we saw today.”

Cramer’s assessment of the current state of the market follows a roller-coaster trading day where major U.S. averages bounced from their session lows. The market suffered a steep sell-off in the morning, with the Nasdaq Composite down almost 4% at its trough, before the blue-chip Dow Jones and benchmark S&P 500 managed to etch out modest gains at the close.

The Dow advanced more than 15 points to 31,537.35 for a 0.05% gain. The S&P 500 finished 0.13% higher at 3,881.37 to end its losing streak at five. The tech-heavy Nasdaq could not muster enough for a positive day, falling 0.5% to 13,465.20, extending Monday’s losses.

“I’m happy to entertain the idea that you need to ring the register here, but I happen to like growth stocks in a reflation scare. I like growth stocks when risk is on. I like growth stocks when risk is off,” Cramer said.

“If you want to hold on to the growth stocks … you have to be prepared to take some pain, just like in late 2015 and early 2016 — that was the last great moment to buy these stocks — or you can just do some selling if you want to and try to swap back in at a lower level,” he added.

The market has toiled through a rotation as investors swap growth and tech stocks that outperformed throughout the pandemic for value plays of companies that are expected to see business return as the economy reopens. The Nasdaq is now 4.5% off its closing high earlier this month.

Worries that an inflation revival could trigger the Fed to raise interest rates, as it did in twice in a three-month span between 2015 and 2016, shook investors out of growth stocks in recent days, Cramer said. Higher rates pose a challenge to growth and utilities stocks.

Share prices in Apple, Salesforce, and ServiceNow are all down at least 3% this week.

During an appearance before Congress Tuesday, however, Powell told lawmakers that inflation remains “soft,” the labor market faces ongoing challenges and that the central bank was committed to its current monetary policy.

That reassured investors about interest rates, helping the market recover some losses.

“This time our Fed chief has vowed to hold off on raising rates — too many unemployed — but there will come a time and a point where these growth stocks will be somewhat hopeless,” Cramer said. “They’ll kind of look like they did today … before people came in to buy.”

Correction: This story has been updated to reflect the correct number of points the Dow advanced by.

Disclosure Cramer’s charitable trust owns shares of Apple and Salesforce.

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Business

PayPal CFO says company is unlikely to invest cash in cryptocurrencies

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PayPal is not likely to buy digital currencies like bitcoin, though the company does see immense opportunity in the digital wallet space.

In an appearance on CNBC’s “Mad Money” Thursday, PayPal Chief Financial Officer John Rainey said the payments giant has no interest in buying cryptocurrency, instead preferring to invest in services that are additive to the platforms it offers.

“We’re not going to invest corporate cash, probably, in sort of financial assets like that,” he said in response to an inquiry from the show’s host, Jim Cramer, “but we want to capitalize on this growth opportunity that’s in front of us.”

The company has acknowledged that it believes the transition to digital forms of currencies is inevitable. In December, PayPal CEO Dan Schulman called digital wallets a “natural complement to digital currencies” and said the company serves 360 million digital wallets.

PayPal does have exposure to the crypto market. In October, the company announced that it would allow users to buy, hold and sell cryptocurrencies, including bitcoin, ethereum, bitcoin cash and litecoin. Users can also shop with the digital coins in PayPal’s retail network.

Venmo, the mobile wallet owned by PayPal, is expected to begin offering the same services in the first half of this year. The features will also be extended to international markets.

PayPal plans to invest its money in companies that provide “complementary assets to our platform” that can drive growth, Rainey said. The company also announced Thursday it would introduce its buy, sell and hold crypto services to the United Kingdom in the near future.

“The types of services that we’re providing, like buy now, pay later [and] crypto as an example — even offline QR code — those are the types of things that we want to continue to invest in, be it organically or even inorganically when we see opportunities in the ecosystem,” he explained.

Buy now, pay later is a point-of-sale loan program that works much like layaway plans, allowing shoppers to pay for products via an installment plan with no interest or fees.

The crypto comments come as activity in crypto markets has picked up this year. Tesla made a splash earlier this week when the company disclosed that it purchased $1.5 billion worth of bitcoin and would also begin accepting the currency as a form of payment from customers. That followed a surge in interest for dogecoin, the digital coin that was blessed by Tesla CEO Elon Musk on his Twitter page.

Tesla’s move to invest in bitcoin sparked wonders in the investment community if other companies would follow in the carmarker’s footsteps. Earlier Thursday, Uber CEO Dara Khosrowshahi said that the topic was discussed but that the company ultimately declined to invest in the digital currency.

Schulman, who appeared alongside Rainey in the “Mad Money” interview, said PayPal grew free cash low by 48% in 2020 to $5 billion. He forecasts the company will generate $10 billion of annual free cash flow by 2025.

PayPal will be a consolidator in the financial technology industry, he said.

“We want to use that cash. We want to use our balance sheet as a strategic weapon,” Schulman said. “That may be returning cash to shareholders and it may be through acquisition, but every one of those dollars matter to us and we really take our capital allocation quite seriously.”

Last month, PayPal made its first acquisition since announcing in late 2019 that it would buy coupon aggregator Honey Science for $4 billion. PayPal took 100% control of the GoPay payment platform, which is based in China, in a deal that closed on Jan. 11.

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Business

Cramer calls on U.S. to fund plants to address chip shortage, unemployment

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CNBC’s Jim Cramer said Wednesday that the United States should fund the development of a chipmaking compound in efforts to address both the nation’s high unemployment rate and a chip shortage that’s affecting American businesses.

More and more companies, including carmakers like Ford and General Motors, have recently sounded the alarm about the global supply of components, leading them to reduce the production of their own products.

Meanwhile, the U.S. labor market with a 6.3% unemployment rate is struggling to gain traction climbing out of the coronavirus-induced recession.

“We need more chips and we need more jobs,” Cramer said on “Mad Money.” “Why not kill two birds with one stone? It’s time for our government to invest in building the biggest and best complex of semiconductor foundries … in the world.”

Automobiles are becoming increasingly more technologized, which requires silicon chips for things like power steering, brake sensors and entertainment devices. The scarcity of supply has forced GM and Ford to shut down factories, delaying delivery of new cars. GM warned the disruption could impact its 2021 goals.

Demand for chips, which are also used in products like televisions, game consoles and computers, has soared during the pandemic as Americans transitioned to remote work and learning environments. Cramer also pinned the blame on globalization, which allowed companies to outsource manufacturing to giants like Taiwan Semiconductor and Samsung Electronics in Asia.

The more connected cars become, the more semiconductors they will require.

“Believe me, you’re going to start hearing about this shortage constantly, daily, because it’s wreaking havoc with all sorts of industries, and making us a much less competitive and perhaps even hostage company. Hostage to a bigger chip customer, the PRC (China). We got to get ahead of this.” Cramer said.

“Our companies can’t get enough chips because there’s not enough production worldwide, and that lack of chips is hurting all sorts of manufacturing,” he added.

He signaled that he is optimistic on Gina Raimondo, the governor of Rhode Island who was nominated by President Joe Biden to lead the U.S. Department of Commerce. Raimondo is a former venture capitalist, giving her an ideal perspective of the business world, Cramer said.

He also said the low-interest-rate environment can be a catalyst to help fund the federal project with bonds.

“America’s best tech industry, the most intellectual property that is anywhere in tech, is in the semiconductor capital equipment space,” Cramer said, pointing to companies like Lam Research, KLA Tenor and Applied Materials who have machines needed for making chips.

“Meanwhile, building gigantic semiconductor foundries can put more people to work than just about any other infrastructure project.”

Disclosure: Cramer’s charitable trust owns shares of Ford.

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