JJC:
The world is full of CEOs
who are merely bad... who
don't know what they're
doing... who bumble
through life, running
their companies
incompetently... not
really doing a lot of
harm... not doing much
good either...
But then there's the
special kind of CEO... the
Chief Executive Officer
who makes a decision that
is so bad, it tarnishes
his entire reputation...
not to mention it crushes
the value of his, and
perhaps your, stock...
And for these special
destroyers of value...
these leaders who, if we
didn't know better, we'd
suspect were hired by the
competition to wreck the
companies they're running,
we have the Mad Money Wall
of Shame...
Tonight, I'm adding a new
face to the wall... and
that new face is... James
Keyes. That's right, James
W. Keyes. He's the
Chairman and CEO of
Blockbuster Inc.
(BBI)...
because of his horrific
plan to buy
Circuit City
(CC).
I used to think that this
man was a fabulous CEO...
a tremendous turnaround
artist... but, in one fell
swoop, this guy has
managed to take his stock
down 35%!... while the RTH
- the retail holders index
- was flat in the same
period...
BBI was doing great!...
I'd recommended the stock
at $2.72 on March 7th...
The company was doing a
great job of turning
itself around, because of
James Keyes... A terrific
strategy to compete with
Netflix, Inc. (NFLX)
and video on demand of all
stripes... BBI was paying
down debt, and they
brought in a CEO with
experience from
7-Eleven... The company
was cutting costs, raising
prices, making BBI more
than just a place to rent
movies and games... a
place to buy movies,
shows, games...
The turnaround wasn't just
working... it worked. And
then, with one bad
decision, the decision to
buy CC, Jimmy Keyes, who'd
done such a fabulous job
turning around
Blockbuster, totally
wrecked the stock...
We had a 15% gain in BBI
as of April 11th... before
the company announced its
bailout... I mean
takeover... of CC, on
April 14th, instantly
sinking the stock. It's
now $2.52. It is down 24%
from where it was before
this ludicrous takeover...
This stock would be so
much higher... the perfect
turnaround story... if not
for this abomination of a
deal that's holding it
back... I think BBI would
be at $5 bucks, had he not
done this deal... and he
can still double it by
pulling the deal tomorrow,
right in the face of the
annual meeting of CC
shareholders.
I think the meeting will
be an embarrassment but,
if Keyes does the right
thing and scuttles this
deal, he will be off the
Wall of Shame, and BBI's
stock, I believe, will be
off to the races...
If he doesn't drop the
bid, then BBI better fire
him, and get someone else
to undo this nonsense...
What a waste... He was
doing such a great job...
and now his face adorns
the Wall of Shame.
This deal makes the least
sense of any I've seen in
recent memory, which is
pretty much saying
something. CC would be
going out of business, I
believe, of its own
devices... and here's BBI
paying an outrageous
premium for the company,
when they should have just
let it die.
This is like a government
bailout of CC, not an
acquisition. BBI's
shareholders have spoken
loud and clear... I don't
think Jimmy Keyes is
hearing them... Yes, he's
Gollum in Lord of the
Rings... I'm not
listening... I'm not
listening...
Can anyone explain how
this deal makes any sense?
I know I can't. I know
Jimmy Keyes can't either.
How does it makes sense
for Blockbuster to sell
PDAs from Circuit City,
and for Circuit City to
sell digital downloads
from Blockbuster? These
are two entirely different
companies... two different
models... two different
businesses. So there
really are no
cross-selling
opportunities, not to
mention the lack of
cost-cutting opportunities
that usually come with a
merger...
Let me invoke a great Bond
movie... Blockbuster
should live, and let
Circuit City die...
I told you to get out (of
BBI) at its 52-week high.
Now the stock's at a
52-week low... I think we
here at Mad Money know the
stock better than the CEO
and, if he would just
listen to us and stop this
nauseating bid for CC, I'd
pull him... I'd take him
right off the Wall of
Shame, because he's been
an otherwise fabulous
CEO...
. . . .
.
The Bottom Line!:
Blockbuster Inc.
(BBI)
and Jimmy Keyes can be
saved... and (the stock
can) run. They just have
to scuttle the
Circuit City
(CC)
deal, then who knows how
high this stock can go....
. . . .
.
■
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Final Segment 2
Final Segment
2 Title:
'Mad Mail'...
. . . .
.
Featured
Stock(s):
See comments below...
After this segment, you
can see Jim's
Sudden:Death picks
here...
. . . .
.
■
Stock Snapshots - Includes
all stocks mentioned above
■
Jim
Cramer's
rating on
this stock
STOCK
SYMBOL
Closing
price
that
day
Opening
price
next
day
Full Company
Name/Comments
(see comments above for
each)
Q:
My question is
regarding the
upcoming CSX
shareholder's
meeting. If the
hedge funds that
are trying to
oust Michael
Ward (CEO) get
their way, what
impact will that
have on the
stock? Or do you
think a
resolution one
way or the other
will bring
stability and
therefore
improved share
prices?
JJC:
Michael Ward has
given you the
best-performing
rail stock in
the world. These
guys... I saw
their ad today
about their
board... it
looked like it's
better than
Michael's board
(of trustees)...
Look, this whole
thing's been a
big travesty.
These guys got
in. They were
hoping for a
private equity
buyout. They
didn't get one,
because that
world collapsed.
Here's what
happens, if
those guys take
over... Maybe
you get a
short-term pop,
and then next
year... next
year, I think
the stock's cut
by a third.
na
na
na
Mad Mail
General
Question - No
specific stock
Q:
I have been
hearing about
methane recovery
from landfills.
I like methane,
because it is a
more volatile
greenhouse gas
than CO2, and it
is a bi-product
of landfills
(something we
cannot live
without). Is
there a pure
play that
implements
methane recovery
technology and
uses the gas to
produce energy?
JJC:
Nothing
that's
investable...
Remember, a lot
of times what
happens on this
show, is that
there's a really
good thesis, but
no stock to go
with it.
Q:
I'm wondering
about Tidewater
(TDW). It's come
back a bit
recently, but
you'd think it
would outperform
the oil drilling
companies, which
they service. I
don't think the
costs of oil
would be a
factor, because
they should be
able to pass
these costs on
to their
customers. What
do you think?
JJC:
They missed the
quarter. I
wasn't happy
with the
quarter, but a
rising tide is
lifting all
boats. That one
will eventually
be lifted.
na
na
na
Mad Mail
General
Question - No
specific stock
Q:
Light Emitting
Diodes (LEDs)
use less energy
per lumen than
incandescent and
even fluorescent
lights. Most of
our (Air Force)
pilots and crew
chiefs had LED
headlamp, which
lasted weeks or
months of
constant use
before changing
batteries. What
do you think
about companies
based on the LED
technology?
JJC:
Again, I do
not have a pure
play on this
stuff. I invite
our viewers to
come up with
one, but I
can't.
[
end of final segment ]
Go to the SUDDEN:DEATH
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Symbol keys:
A Charitable Trust stock.
- An asterisk next to a
stock symbol indicates that
Jim mentioned it is a stock
that he manages within
his
charitable trust portfolio.
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Thumbs up - indicates
he would buy the stock or,
at the very least, not sell
the stock. We do our
best to interpret Jim's
opinion on stocks, as we
think it is indicated by his
comments during the show.
Please read his comments to
decide for yourself.
Thumbs down -
indicates he has said not to
buy or to sell the stock,
based on his comments
We do our best to interpret
Jim's opinion on stocks, as
we think it is indicated by
his comments during the
show. Please read his
comments to decide for
yourself.
Back up the truck -
indicated by Jim, when he
says the stock is so good,
that he would do a
'mon-back' on the stock...
In other words, this is the
sound someone would say to a
truck driver, "Come on
back... " as he is "backing
up the truck" to load up on
his cargo. Translation
for buying stocks:
This recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
Stumped. - Of the
2,000+ stocks that Jim
Cramer has in his head, for
which he has an informed
opinion, he sometimes comes
across a caller with a stock
he does not know well enough
to opine on... He then
indicates he is stumped and
will have to come back to
it, after he does some
homework of his own on
the stock. This
usually occurs during the
Lightning Round, when Jim
does not know in advance who
is calling, or what their
stock question is about.
Definitions of key phrases
used by Jim, known as
"Cramerisms":
Definition: 'Pull the
trigger' is Jim's phrase for making
the decision at that point to trade -
either to 'buy' or
to 'sell' (although he
usually uses the phrase for
buying), as if to say you
should feel comfortable
enough to make the final
decision without looking
back...
Definition: 'Ring
the Register' is Jim's phrase for
selling a stock, and making
it a final sale, that you
should not look back on.
Put it behind you.
Definition:'Let It Come In' indicates how you
may wait for it to pull back, or have the
stock price come down briefly, as your
chance (after letting it come in) to buy
the rest of your position (i.e., total
number of shares you own in that stock).
Definition:'backing it up'
or 'doing a 'mon-back' is Jim's
phrase for the metaphor of backing up a
truck to load up on a stock by buying
it. 'Mon-back is short for the
imaginary worker saying, 'Come on
back...' as the truck is backing up to
receive its load... Notice that we use
the little truck icon to indicate where
Jim has mentioned this.
Translation for buying
stocks: This
recommendation by Jim
indicates that, after you do
your own
homework on the stock,
you should feel comfortable
loading up on it, as it is
in a good position to be
bought at this point.
See more
"Cramerisms" & other
financial phrases
here >>
Helpful Websites:
See the stocks currently
known to be in Jim Cramer's
Charitable Trust at:
Stock Homework 101:
This is an excellent
upcoming site that provides
resources and links to help
you do that homework that
Jim Cramer recommends after
hearing his suggestions...
FastMoneyRecap:
This site will be a quick
summary of recommendations
made by the great Fast Money
TV show crew, that will
offer you a unique service,
to compare their picks to
Jim Cramer's past comments
about those stocks.
