[Beginning of Cramer's verbatim comments for this segment...]

Jim:        Last week, during the Lightning Round, Neal in New York called in and asked about DuPont Fabros Technology, Inc. (DFT)... and man, it stumped this chump for certain... so I do what I always do when a call that makes me feel like a joker... I circle back, I do the homework, so I can answer the question... which I did on Thursday.

DuPont Fabros Technology, as it happens, is sort of like the holy Roman empire, which was really neither holy, nor Roman, or really much of an empire... The stock has nothing to do with DuPont, the big chemical company. It's not a technology stock. Nor is it owned by John Fabreau, the director who put me on the map with "Iron Man."

No. It's a real estate investment trust, a REIT. I said I liked the stock, after doing the homework, but I needed to hear more about a dividend here, because that's why people buy real estate investment trusts... they had to stop paying in late 2008, when it had some trouble with financing.

Luckily, the CEO is a close watcher of the show and, by popular demand, he has agreed to come on the show tonight, and help us answer these questions.

Just to refresh your memory, DFT is a real estate investment trust that owns data centers. These are big buildings, where technology companies who lease the space, keep their servers. And that's companies like Yahoo or Microsoft or Google or FaceBook... Think of DuPont Fabros as a nice tie-in to the mobile internet tsunami and the broadband shortage that it's creating. Remember last night... we had Windstream on... they talked about that.

The company has seven active data centers... five in Virginia that are 100% leased... and two more that are both still trying to find tenants... one in Virginia and one in Chicago. DuPont Fabros also has three data centers on which construction was suspended and six more in the pipeline that still haven't entered the planning stage.

Now I like the business, because there's a shift occurring from in-sourced data centers that technology companies own and operate themselves, to more outsourced data centers. As the need for bandwidth increases, which we know it is, so does the cost of owning a data center, which is why companies have been increasingly been leasing space at wholesale data centers.

According to Oppenheimer... a fabulous report out today... the demand for outsourced data centers... the capacity could rise by 15% annually by 2012... of course better than a sharp stick in the eye...

DuPont Fabros intends to expand by leasing up its existing facilities and then bringing on 1.6 million gross square feet of additional capacity.

I like the story. I've got some concerns though...

In order to expand, the company's extremely dependent on credit markets. It has around $706 million in debt, versus $39 million in cash... that's not pretty... a 6.2% debt-to-equity ratio... you know we don't like that on Mad Money. It needs to raise money to restart the development of its new data centers in Virginia and New Jersey, where construction is expected to restart in early 2010.

Now, given that the debt markets are getting better, and similar companies like TeraMark, Equinox, and Switch and Data Facilities, have recently raised money to support their expansion plans, there probably isn't anything to be too concerned about here...

Still, I want to wait until the dividend comes back before I fully recommend DuPont Fabros... and I have a lot of questions...

So let's hear from ... He's Hossein Fateh, President and CEO of DuPont Fabros(DFT)...

Jim:    Mr. Fateh, welcome to Mad Money.

Hossein:     Well thank you Jim.

Jim:     Alright sir, a lot of my real estate investment trusts that I follow, including Brandywine and Federal Realty, as well as Vornado and Boston Properties... Mr. Zuckerman's... were able to do equity offerings before they had to tamper with their dividend or do anything... You knew obviously that things were getting tough. How come you were not able to issue equity when it was time to issue equity?

Hossein:     Well, we certainly can issue equity right now. We choose not to, because we don't want to dilute ourselves. Management here is very much aligned with the shareholders in that we have about 40% of the equity in the company held with insiders. So we don't want to dilute ourselves at this point, be we get calls at least once a week from bankers wanting raise equity for us. We're going to leasing our space in a very rapid fashion, and when the space gets leased up, we'll be putting on a little more debt... We only need another $150 million of debt to add two more facilities, or to restart two of our facilities, which will add approximately $53 million to our EBITDA (earnings before income, taxes, depreciation and amortization).

Jim:    Okay now, given that fact that your tenants are companies that are actually doing quite well... here I'm speaking about Microsoft and Yahoo which represent a big part of your business... Is there a sense that what really happened here is that business is strong, but the credit markets are weak?

Hossein:     That's exactly right, Jim. I mean, the credit markets essentially totally dried up... and so, as the credit markets dried up, we stopped construction and were prudent. In fact, we started only one of our facilities which took only $25 million to do. We've managed to lease 58% of that facility so far. And, uh, now we see that the credit markets are slowly loosening up, and we expect to be raising the additional dollars that we need through credit to finish the other two facilities.

Jim:    Alright, we're big fans of cloud computing. I own VMware (VMW) for ActionAlertsPlus.com, my charitable trust... We are big believers in Salesforce.com (CRM), Marc Benioff's company... IBM's strategy... You guys would seem to be a nice derivative play on cloud computing, where you have to have big servers, but you don't have to have expensive computers on your desktop.

Hossein:     Yes, that's exactly right. Cloud computing... what it's going to do... is increase the amount of outsourced data centers. You know, as you well know, many companies five years ago would want to own their own data centers. With cloud computing, you can reduce the cost of getting into a data center by having your redundancy in geography, rather than having a Tier 4 data center is that you may have two or three Tier 3 data centers. So your cost per megawatt in a data center is going to be reduced drastically.

Jim:    Alright, now I understand that, at last count, you were 48% leased in Chicago and 58% leased in Virginia. Has that already started picking up from those numbers?

Hossein:     You know, our activity is extremely good in both of our data centers. We, uh, we will announce our new leasings that have or have not been done on our next earnings call on November 4th.

Jim:    Uh, can I presume that they're not worse than what I just talked about.

Hossein:     Uh, we don't lose leases. That's the thing with data centers. This is mission critical space. So everyone pays on time. This is not a real estate play where you have a reduction in rents, or a reduction in credit. Normally, our minimum space in the wholesale business is someone who needs 2,000 servers. Anyone who is producing 2,000 servers of computing power is a very significant company.

Jim:    Absolutely, absolutely... Hossein Fateh, thank you so much for coming on and explaining the situation for your company. We really appreciate it.

Hossein:     Okay, thank you Jim...

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Jim's comments AFTER the interview:     Okay, that's DuPont Fabros. You know, he's absolutely right. Recently, at TheStreet.com where I'm chairman, we had to do a data center change. And the idea that we wouldn't pay our bill on time would be heresy because, if we went down for a day, it would obviously destroy the credibility. So he's got a good demand story. I want to see another quarter or two, because I need to see that for companies that have problems paying a dividend in a real estate investment trust.

[verbatim recap]

[end of segment]

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