Event tomorrow, ali baba. While todays market gained 109 points, nasdaq jumping 6. 8 t. Real story is tomorrow it can be projectilesed at 68 a share tonight a. Very good price for those able to get stock on the deal a. Very good one, indeed. To you, for days now, i have been hearing about how bad ali babas ipo could be for the stockmarket. I hear that its overvalued. Sell, sell, sell that its too high. Sell, sell, sell that it has omake ownership. Sell, sell, sell of course its a sign of a on the. Sell, sell, sell. The house of pain so i thought id adjust these negatives head on tonight and say if you hate baseball, if you hate twitter, linkedin, google, j. D. Com because you think theyre ridiculously expensive at the height of absurdity. You should love, not hate, but love ali baba. Even ali baba opens at 8 a share. Could still be a buy, buy, buy it may be a buy even a couple points north of that, given it would given advisors who got in on the deal a bended average. Thats how they think. Because i thought the stock might be priced as high as 70. The fact that there was no last minute bumpup in price is a huge win for the buyers. How did i come to what some people think is a silicon collusion this stock is as cheap as all get out . Okay. Let me explain why you should stop worrying and learn to love ali baba. The first objection, of course, valuation. Oh, wouldnt it be ridiculously expensive at 80 bucks . No. In you stack it up youd find at 80 a share its cheap. Mabry dicklously cheap, given the growth rate and profitability. I think the company can earn 2. 50 a share. Thats well within reason, so at 80 bucks where i think the stock could trade. It could have a price multiple of 32. Thats cheap. I expect it to generate 30 quote for the next few years. Remember, ali baba is no joke. Com, its immensely profitable. At 80, it would be much cheaper than face book, it has higher cost margins. The rest of the repairs up. Forget about it. Amazon sells 169 times earnings, 5 mar jivenlt people thrilled to own twitter. Let me see, faster growth. Yes, 66 performance. It sells at 138 times federal government years earnings. Teslas got 56 growth, 2. 2 mar jens. Jd. Com 48 growth. Miniscule margins 572 rhimes times earnings. Linkedin similar, gross mar jens less than a fifth of ali babas. It trade at 76 times earnings. Baidu can give it a run for its earnings. 43 margins, which is one of the reasons i like that stock so much. Google, itself, its very cheap. It trades at 19 times extra earnings. It is growing at 30 gross margins. Few manage money and you own any of these stocks, any of the ones you mentioned with the chepgs e exception of baidu, you probably want to sell those stocks. Ali baba is a bargain comparison. The own wereship structure, its convoluted. Its opaque with many hidden owners, we know ali babas major owns 8 of the company. Yahoo has 22 . The rest, actually not all that clear. Does it really matter . They obviously offskinned the game. Third objection. Corporate governance. Ali baba las a very big board, 30 odd souls, many of whom are chinese communists. It controls every branch of the government. To which i say so what . Weve toll lated with that baidu jd. Com deals . How about this one . Just because its bigger. It makes no sense to me. He only owns about 8 of it. So what. Have you ever looked at companies with two classes of stock . Who do you think controls those . The public class . For that logic, you might as well sell google or i have a. Com or cvs. Ill take may chances with jack mahs control. I keep referring to, its just too darn big. This is a recurrent theme. I dont get it at all. What does it matter how big the market cap is . As i explained before, ali baba will be cheap on an earnings basis versus every other dividend stock in this country. Thats on a fundamental basis, not the market capitalization. Ali baba has a funky relationship with ali pay, which gives jack ma serious advantage he owns ali pay and shares 37 of the profits with ali baba an 37 of the ecommerce comes from ali pay. Its a rick. So we dont want someone owning a method of payment that could hurt ali baba. Wait a second, why doesnt ma unload much more than 12 million shares in the deal like he could. If he intended to take a bigger chunk, why doesnt he dump mo much more . Why does he quadruple the amount he sells . He isnt. A lot more deciders will be able sell stock on the deal tan usual. They wont be locked up until later the journal, wall street journal says 8 billion might be free to trade. Who cares . The 608 pricing, this thing is tight as a dump, as a drum with 68 pricing. There is no stock around. If anything, we want more supplies. Eighth objection the ipo marks the top, the top of the mark. So you got to sell it along with everything else. Hey, isnt it 2000 all over again . The beginning of the biggest tech crash in history . Wait a sec. There were 300 companies that came public that western profitable and disappeared. Ali baba is extremely profitable. These two tiers are night and day. If they didnt trade then as i did, they could ail to understand the difference. Ecommerce has to slow. Right now, ali baba can be a house of card. Oh, please, less than china is on the internet. You have the brick and mortar operations, the National Enemies are a fraction of what they are. Chosen is dramatically under scored. We have overscored. There is no omni channel there. Its the longest and best of the traded internet companies. The chinese economy is slowing. What a miserable time of bringing this deal. Actually, chosens export is low t. Retail economy is, if anything, growing faster. Much faster tan the rest of the world. If you go on the site, which no one has done a. Few of you have like i have, i have used it. You would know ali baba is an international company. You are basically able access workers to buy or build things anywhere in the world. I just cant hate this deal. Im sorry. You heard the hundreds of institutions and have been furiously selling other stocks to raise capital so they can buy the one. I hear there are over 100 institutions that want a billion dollars in stock. That was before the road show was complete. They arent sellers. Theyre buyersf theyre not flippers. Theyre owners. They cant get as nearly as they want in the ipo. Im blessing pay as high as 80 bucks a share for ali baba. Hey, a few bucks more. At that price its among the cheapest in the best of the internet place. Guess what, you dont like it . You dont have to buy i. Gordon in oregon, please, gordon. Hello, jim, im a big fan of yours going back to 8g years ago. My question is seadrill. My issue is we have negative free cash flow. We got increasing debt that increased 38 just below 13. However, Morgan Stanley just put an overweight on it. My question is, is management prudent capital aloindicators to the long run or is management playing money carlo with my retirement money . In there let me give you the address of that stock. Seadrill, ensco, unfortunately my Charitable Trust owns and rick, transocean, you cant own them yet. They havent bottomed. One day they will. Ensco just reiterated the dividend. Maur ice in new york. Caller hi, jim, booyah. We want to thank you for everything that you do for us little guys at home. Without you, wed all be lost. Thank you. Caller i know we had, we liked rbs. Yes. Now that citizens financial has its ipo next week, what do you think about that . People want to own these banks. They want regional banks. I think that thing is going to be, im not going to say red hot. I think it will be a strong deal. You actually want to be in it. I think that bank is starting to rally and its good. All right. Open sesame. The biggest tech offering is coming tomorrow. You know what, i am blessing it if you can get it as high as 80 a share. You know what, im throwing in a few dollars more. On mad money tonight, you know darden, their stocks are going cold. Is it worth taking a bite or eating elsewhere. Forget about passwords. I got the play. Plus sears and rite aid. The house of pain the house of pain. Just got serious beat downs. I think one is worth owning, not the other. Ill reveal next. Stwik cramer. Stick with cramer. Theyre custom made trains. You cant get any better than that. Siemens trains are not your grandparents technology. Theyre something thats gonna change the cities we live in today. I find it so fascinating how many people ride this and go to work every single day. Im one of the lucky guys. I get to play with trains. People say, wow, we still build that in the United States . And we say, yeah, we do in a we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. How could they have screwed up so badly . Is it terminal or can there be a comeback . Those are the questions im asking ability sears and rite aid down 5. 8 and 18. 5 respectively. I have to tell you, while both deserve the punishment meted out. Rite aid screwed up royally. Roughly two years ago, rait aid made a missteps i fine breath taking. They totally got their pharmacy wrong. They incorrectly several times botched the scheduled drugs going generic to the point they had to guide down 10 from the previous guide down. I think it calls in question the running side of the business. There are a lot of new wrinkles in the drug store business. Its not leak they couldnt be forecasted. Today i call up a december 29th news, it was entitled. Jeneric drug prices spike. Pbm rates dont keep up. National Community PharmacyAssociation Study finds. In this article the ceo of the trade Organization Says pharmacy acquisition costs for more and more drugs arrive in breath taking fashion. The article continues, meanwhile, reimbursement from pharmacy managers is not keeping up, leaving pharmacists out in the cold. It includes a bunch of drugs. The fact that 86 percent of pharmacists surveyed saw the exact problems that rite aid talked about today. 86 and rite aid didnt see it . That is just terrible execution. Now we know rite aid got a new chief Financial Officer in july. That Supermarket Chain has been a disaster right out of the chute. Missing numbers repeatedly, cutting a hefty dividend not long ago after it became public. There is inexcusable. However, there is a silver lining. There is some good news. Its that rite aids term, which is what we have been focused on roughly a year ago with the companys remodelled stores doing so much better than the old ones, its continues. I am not willing to write off rite aid. It pushes out further than i like. The company has to get its pharmaceutical act together now. Maybe they just turned into zombies. I dont believe it. I think the turn is on. But not in the pharmacy side. I dont feel the same way about the sears holdings, however. After its disastrous quarter. There is a well reason to fwhoet this morning by Credit Suisse analyst thinking about the end when it comes so sears. He actually references that family song by the doors. He has laid out a sorry where sears is worthless as a cheney. If the bulls say there is value in the real estate. He thinks the whole company should be leg which dated. Its losing about 10 in share each and every year at rite aid, surely, thats not the case. I want to stick with rad as panful as it is. I know its painful for many of you. After reading the Credit Suisse about sears, it seems like the late great jim morrison is right. This is the end, my only friend, the end. Pete in new york. Pete. Caller hey, jim. Its all about 67 skechers. They lost about 10 yesterday. It was an overreaction. They were blah numbers. The consensus is 90 cents. A little high in my view. Im a believer, so stay an keep my shares until the quarter. Pete, there was a lot of rumors around the last few weeks of data were not good. I would find that somewhat surprising. I know when you have a stock a total bottle rovenlth you know i leak these guys. I had them on the show the stock is up 81 . Its subject to hiccuples. I agree with you. I think it was viable. Lets go to matt in california, matt. Jim, your staff is terrific. Yes, they r. Thank you. Caller does the stock of disney sit into the 80 to 120 category, if so, when . Geeze, we are talking about you remember my old books. Iulesed to say a stock that goes to 90 goes to 120. Disdisney i think is stalled here why now . I keep telling my coportfolio manager, will this stock please come down so we can boy it. When that happens, it typically doesnt come down. Alex if new jersey. Please. Booyah, jim. Booyah from new jersey. How are you . Good. Good. Jim, you recommended duncan donuts before. Its kind of in nowhere lands right now. Yeah. In the past you said you were interested if companies that have same store sales increases and they dont. Are you still in favor of duncan donuts . Actually. I was talking to a group of people that think the old Chairmans Club is the street. They said we have to follow you everywhere. Some have backed away from duncan. I said one quarter when it was weather, i understand. The Second Quarter when there was no weather, it was still disappointing, i didnt like. So i have gone all in starbucks. I am not here padding the table at all on sudden can donuts. All right. Sure. They screwed up. Sometimes some stocks deserve another chance as panful as it is to stick with rite aid, i think long term its still worth it. Sears on the other hand looks like jim morrison was right and this could be the end. Much more mad money ahead, including an American Shale Energy player involved in 800,000 wells across the country. Ill find out if its cheap oils giving you a chance to boy at a discount. It could be about to get a makeover, the stock behind olittle garden barely simmered this year. But is it time to load up . Oh, im not talking about the bread sticks. Stick with cramer. Coming unl, bank job, pulls in a business more than a billion in cash last year. The only catch . Its totally illegal. The atm skimming criminals are generating dollars from stealing your data. Tonight, cramer reveals a stock with technology stopping criminals in their tracks. Just ahead. In a market where the averages keep making all time highs. As the Global Economy appears to be slowing. You want to mostically Oriented Companies stocks have been hammered of late also have a potential for pa major comeback. Tonight im breaking 23450er78. I will tell you about one of the most controversial stories out there. Darden, dri, they have more than 2100 locations under a number of brands like olive garden, longhorn steakhouse, capital grill and two months ago red lobster. If recent years its been a consistent under performer, yeartodate the stock has been slapped silly. You know what . I think it might have gone a lot lower if it were not for dardens bountiful dividend. Heres the good news. A major activist smart guy took notice of dardens missteps, accumulating a 9 stake over the past year. They have been hectoring the stockmarket to get its act together t. Long time ceo Clarence Otis is stepping down. He took over darden in 2004 and in the early years he did a pretty darn good job. But there is what have you done for me lately business. And in recent years, well, hes made a lot of mistakes, building out casual denying brands, preferences moved towards chipotle but failtology turn around both olive garden, and red lobster, he ended up selling for 2. 1 billion this year. These are among the reasons why darden beat s p 1,500 over 3 in the past five years. Now how do we know that otis replacement will be an improvement . In part, its because there are some terrific candidates out there. Mostly, dardens next ceo will do a better job because tear pay will depend upon it. Thanks, to starboard, dardens board decided to reaileen managements incentive compensation with same store sales growth. By far the most important metric in the industry rather than overall sales growth, which was the method they had been using before. If your pay depends on same store sales, that means you have to focus on getting people to come to your existing restaurants and spend more money there. If you are being compensated based on total sales, you can keep putting up locations, under the new plan, 30 of the company saegs demands on same store sales growth. At the same, darden has a threeyear performance plan. Its a longerterm compensation thats half determined by the precash flow and the relative performance versus the market. Again, thats a major overhaul, i like this. Its important because incentives do matter. A ceo whose compensation demands on hitting the right metrics will do a better job to pay a fortune no matter what. If this shakeup at the top is the only thing happening, i wouldnt be recommending darden here. The truth is, not only is the board of directors finally got its act together, things are starting to go right for darden in a way that makes me believe a turn around could soon be at arnd hand. First of all, there is the price of gasoline, you know its all important for their business. High gas practices, prices, act as a tax on the consumer. So people have less disposable income an theyre less likely to go out to eat when the cost of driving to the restaurant is so ens pensive. Given the price at the pump is at its lowest levels, falling 9 , i think that will gave big boost to dardens business, it amounts to one of the few companies that have bren out that relationship and made it very clear lower gasoline is better sales for olive garden. However, even lower gasoline prices wouldnt be enough to make me recommend this stock if darden didnt have a turn around plan. With the sale of red lobster, olive garden has become the heart and soul of this business. It has not been doing well, hencewise its a tussle. Regardless of which side wince, a companys october 10th meeting, i believe olive garden will improve. They are totally focused on turning this business around and, yes, i do believe olive garden once a popular favorite of mine can be turned around. There is lar remold eling effort if place, its in the early stages, i think you can have a monster impact. The Company Plans to remodel 350 olive garden locations, by the end of their 2017 fiscal year. It takes a little while to date three stores have been remodelled. The results of these locations have been downright remarkable. On average, these remodelled stores of olittle garden have seen a decline in all other olive g