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Is word out? Is Cramer going to jail?

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 3/13/2006 2:22 PM

So, I was watching CNBC this morning, and caught Don Imus' show.

What I found funny was that Imus couldn't distance himself fast enough from Cramer, pronouncing the show "unwatchable" and asking several times, in a mocking tone, "Isn't Cramer going to jail?"

Bo sounds like the Jersey wiseguy plumber, with all the "your" and "dats" and double negatives one could wish for.

Here's a transcript - I wonder what the word on the street is - I mean, this sounded like a really bad character witness shtick from before the perp gets sentenced. Or maybe that is just me? And why today, and more importantly why Imus, who is part of the great GE family, bagging on Cramer, who is also a part of that family? Interesting times we live in, no?

Anyway....

"Imus: It's an unbelievable American business story.

Bo: Well you know who eyeballed that?  My friend Jim Cramer.  He eyeballed that bank a long time ago.  Jimmy Cramer, the guy who bites the heads off the bulls.  Wonderful guy.  Smart as a whip.  Good friend of mine, too.  Big heart guy; big, big heart.

Imus: He's given lots of money to the Ranch.

Bo: Let me tell you something.

Imus: Lots of money.  Almost a hundred grand.

Bo: Seriously?

Imus: Yeah.

Bo: Let me tell you something.  One of the biggest heart guys--Jimmy Cramer--in the world.

Imus.  He's going to jail, isn't he?

Bo: He ain't goin' to no jail!  He's the...He's the epitomotatious
[sic] guy.  You watch his show, you watch his show, you start bankin' on him, on those stocks...

Imus: .. The show is unwatchable...

Bo: You gonna make money.

Imus: It's unwatchable.

Bo: "Ba-ooyah!"  What does he say?  "Ba-ooyah!"

Imus: What does he say, Lou?

Lou: "Boo-yah!"

Bo: "Boo-yah!"  No, he's the man, I tell you what.  I've had him up at Rejo's (sp?).  He's just one funny guy but he's a big-hearted guy. You know he used to live in his car?  He came outta livin' in his car 'cause he went down on hard times so bad, and he picks himself up, and he's successful, and he loves his country, loves the little children, everything.  He's a good man, good man.

Imus: Well he's going to the slammer, right?

Bo: (laughs) No he ain't going to no slammer.

Imus: Well that's what I heard.

Bo: No!.  What are you talkin' about?

Imus: Well I hope not.  I like the guy, too.

Bo: He's number one on the MSNBC.. He's number one on CNBC ..uhh.. He's number one.  He's number one."

Wow. Loves his country, God, the flag, children, puppies, apple pie, you name it.

Does anyone else wonder just how patently obvious this can get? Jim Cramer - vicitm? And saint! Man of the people. Philanthropist. And a man whose pulled himself up from the streets. A regular guy.

My gag reflex keeps tripping. Urp. Urrrrgggnnnhhhpp.

You know, one o those Harvard grad lawyer Wall Street deci-millionaires that are so sympathetic....Hey, if Milken can paint himself as a political prisoner, why not Cramer as American hero?

cramersubpoena2.jpg

Urrrrrp. Mfffhhh....mffffffhhhh....uuurrrggghhhp.

Here's my fun little mental image of how the next interview could go:

cram.GIF

 

cram1.GIF

 

cram2.GIF

 

cram3.GIF

 

 

Meanwhile, in the recurring nightmare that keeps running through our hero's head....

 

 

convict1.GIF

 

 

convict.GIF

 
Copyright ©2006 Bob O'Brien
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Comments (40)
Re: Is word out? Is Cramer going to jail? By n-tres-ted on 3/13/2006 3:03 PM
Have you seen the street.com "cover story" (pun intended) on OSTK? New valuation says OSTK very undervalued.
Re: Is word out? Is Cramer going to jail? By n-tres-ted on 3/13/2006 3:04 PM
http://www.thestreet.com/_yahoo/markets/activetraderupdate/10273359.html

Here's the link.
Re: Is word out? Is Cramer going to jail? By jcline on 3/13/2006 6:16 PM
If the rumor is true....I can see it now.... a bright orange suit with "BULL" written on the back. Maybe the numbers can match the OSTK short position???
Re: Is word out? Is Cramer going to jail? By rtway1 on 3/13/2006 6:29 PM
The only shame that Cramer knows is when it has cost him money.I really think he would be an actor than a whatever he is supposed to be. He loves the camera and can,t get enough of himself. I woudn,t beleive him or any of his friends as far as I could throw this computer.He made his bed and now let him sleep in it.(With Bubba)
Re: Is word out? Is Cramer going to jail? By G on 3/13/2006 6:59 PM
I can see him now, teaching felons how to trade stocks. Glad they dropped his ass from talk radio in my area.

Ba-ooh Ya may mean something entirely different after the slammer.
Re: Is word out? Is Cramer going to jail? By Tony Ryals on 3/13/2006 8:32 PM
Notorious Net Loon Tony and his clogging ways will not be a part of this blog. Consider all further inanities by this well known crazy to be auto-deleted. Sorry, Tony, no mas con el loco gibberisho, si?
Re: Is word out? Is Cramer going to jail? By dave on 3/14/2006 6:56 AM
Texas, California, NY and Florida are about 90 million people or almost 1/3 the population, but Cramer can go through an entire show without getting a single call from one of these four states.

Statistically, that is impossible if incoming callers are random.
Re: Is word out? Is Cramer going to jail? By rtway1 on 3/13/2006 10:50 PM
I also have a feeling if push comes to shove or a contract may be loss on the P.I. firm old BO might have a different take on Jimmy, or might not remember him all that well. No wat I mean man, heez a alrite dude.
Re: Is word out? Is Cramer going to jail? By anon on 3/14/2006 6:57 AM
http://images.google.com/imgres?imgurl=http://www.poynter.org/resource/59729/calandra.gif&imgrefurl=http://www.poynter.org/dg.lts/id.45/aid.59729/column.htm

Romenesko

THURSDAY, JANUARY 22, 2004
CBS MarketWatch co-founder Calandra quits amid SEC probe

CBS MarketWatch chief commentator and parent company co-founder Thom Calandra quit Thursday amid an internal probe into his trading activities that was sparked by a Securities and Exchange Commission inquiry, the site reports. Calandra (left) says while his work "has been tremendously rewarding professionally, it has also been stressful. And the SEC's informal inquiry adds to this stress. So I've decided to take this time off to focus on my family, whom I adore."
> "Eyebrows were raised last month when Barron's reported that Calandra had traveled to China and Mongolia at the expense of Ivanhoe Energy, a tiny Canadian oil stock whose shares went from 32 cents a year ago to the low $7-range in November." (TheStreet.com)

See Links
> Earlier: Fost on Calandra, CBSMW's stock ownership policy (SF Chron)
> Earlier: "Calandra is one of the new breed of journalists" (arizona.edu)
> Earlier: For biz journos, credibility is not more than a trade away (OJR)
Re: Is word out? Is Cramer going to jail? By Niel Storts on 3/14/2006 6:58 AM
When little jimminy gets the slam, he will find out that he has no survival skills in the new environment. Fact is that he, like rocker et al, have earmarked on themselves certain traits that will make them targets for victimization. This is going to end badly for the lads. Poor babies.
Re: Is word out? Is Cramer going to jail? By InTheKnow on 3/14/2006 6:59 AM
I see that Gary Weiss has dedicated his last blog to this blog. This man is either a fool and as naive as they come or not too bright. No wonder no one but sickos and paid bashers post there.
Re: Is word out? Is Cramer going to jail? By bobo on 3/14/2006 7:01 AM
'lil GW is still writing his blog? Sorry, I've been reading knitting with dog hair, thus have missed his latest pearls...
Re: Is word out? Is Cramer going to jail? By n-tres-ted on 3/14/2006 7:24 AM
You guys are a riot! You're cracking me up!
Re: Is word out? Is Cramer going to jail? By ginger on 3/14/2006 8:56 AM
Until the bug is fixed, the way I find todays posts is use and Edit command.

Edit Find 3/14
Cramer trading OSTK options? By rwesley on 3/15/2006 3:31 AM
Cramer, an admitted option junky probably bought OSTK - MAR 25 calls and shorted the puts last week, front-running the postive valuation story he knew was coming out Sunday/Monday. He knew the stock was set for a jump and that the story would spark a buying binge. He made more than 3500% in the past two days on the calls alone. Do a google search on Cramer and option trading, he's addicted to it and knows how to work the system. Another reason why this crook should be in jail!
Re: Is word out? Is Cramer going to jail? By Why is it most people don't believe there is a pro on 3/22/2006 2:25 AM
I alwasys post on boards about Naked Shorting, most people don't give a shit! Or think your full of shit! I'll keep putting out the word. KEEP UP THE GREAT WORK!
Re: Is word out? Is Cramer going to jail? By robelita on 3/13/2006 3:07 PM
Psssssssshhhhhhhhbbbbbbbbbtttttttttttt!

E i E i OWE
Re: Is word out? Is Cramer going to jail? By hemingway811 on 3/13/2006 3:24 PM
I believe Imus works for Viacom. Viacom owns WFAN. Imus's radio show is broadcast on WFAN and began simulcasting on MSNBC in Sept. 1996.

Don regularly skewers top executives at MSNBC.
Re: Is word out? Is Cramer going to jail? By BobbyC on 3/13/2006 3:27 PM
I just saw that Street.com article on Overstock..... they are now saying that the stock is undervalued..... man if this wasn't actually happening, I would never frigin believe it..... so now that Overstock has these guys by the gonads, they are trying to suck up to them and play nice.... if Bryne is the man we think and hope he is, then he should be doubling over in laughter then in the same instant double his legal efforts to put these bastards in jail....

the only way I would approve seeing Cramer not go to Jail, is if he rats out every last one of the higher ups that are involved.... to tell you the truth, a reduced sentence will be enough....

Oh man that new report on Overstock is just too much..... my cousin is a screen writer.... this could be one great movie....

I really am still in utter disbelief at the nerve of street.com to now put out a favorable report on overstock..... I don't know whether to laugh or be pissed b/c they think they have an easy way out....

anyways let the truth be told....upwards and onwards...
BobbyC
Re: Is word out? Is Cramer going to jail? By Granny on 3/13/2006 3:49 PM
He gave my money to charity. Isn't he thoughtful.
Re: Is word out? Is Cramer going to jail? By Granny on 3/13/2006 3:51 PM
And I didn't even get the tax write off.
Re: Is word out? Is Cramer going to jail? By Granny's Accountant on 3/13/2006 4:08 PM
Granny,
You should be writing off those losses causing by Jimmy's backrunning to the tune of up to $3K a year on your taxes. Booyah.
Re: Is word out? Is Cramer going to jail? By RubeWaddell on 3/13/2006 4:09 PM
Your Honor, I present James Cramer, Man of the (haha) People, A giving, charitable man, Friend of the small investor(hahahahoo-hah),stop. I can't go on. hahahahaha, I'm gonna resign like Gradient's lawyers did, Judge, hahahahahaha
Re: Is word out? Is Cramer going to jail? By hwh on 3/13/2006 4:22 PM
Sum a cum loudly...hwh
Re: Is word out? Is Cramer going to jail? By ginger on 3/13/2006 4:32 PM
Summer come you say ?
Re: Is word out? Is Cramer going to jail? By Tony Ryals on 3/13/2006 4:33 PM
Is it true that this is one of the most popular websites in the UAE ?
Re: Is word out? Is Cramer going to jail? By mfairview on 3/13/2006 4:39 PM
Getting tired of posting on Weiss's board to yourself Ryals? Maybe Cuban will take you back.
Re: Is word out? Is Cramer going to jail? By Tony I thought Bobo was JDD? on 3/13/2006 4:43 PM
Tony,
Why'd you make Carol say those bad bad things about the bunny and make her call him "James Dale Davidson" in the funny papers? Bunny wants some free coffee to make it up.
Re: Is word out? Is Cramer going to jail? By lenofus on 3/13/2006 5:05 PM
I love these bastards giving my money to charity, after they steal it from me.
Re: Is word out? Is Cramer going to jail? By mfairview on 3/13/2006 5:07 PM
At least they could give you the tax deduction (and maybe a tv dinner)!
Re: Is word out? Is Cramer going to jail? By Y on 3/13/2006 5:14 PM
I remember Cramer saying his daughters would rather go to the dentist than Walmart.

That was right up there with Greenberg saying his kids hate the lady in the red dress on the Overstock commercials. Then he smirked and said but he himself would not say anything about Overstock.

Hey it wasn't me, my kids said it.

Shop till the miscreants drop. I said that.
Re: Is word out? Is Cramer going to jail? By Browntrout on 3/13/2006 5:14 PM
Tony- I thought you were locked up in Guatemala?
Re: Is word out? Is Cramer going to jail? By dave on 3/13/2006 5:21 PM
Bobo, you should post the "bull subpoena" picture again. You can't give that pic too much publicity.

That pic is worth a million words.
Re: Is word out? Is Cramer going to jail? By RubeWaddell on 3/13/2006 5:26 PM
Hey TonyBoy,

Hows the Beans n' Lice diet?
I hear Nicotene is a good substitute for food. Wanna invest in my start-up to market this brilliant discovery? I've got a janitor that works in the Chemistry Labs at Stanford on my staff in the evenings conducting research. He says $60,000 should be enough.
Gotta run, I hear a fire engine.
Re: Is word out? Is Cramer going to jail? By aries on 3/13/2006 5:27 PM
Here is a copy of the Street.com article
http://www.thestreet.com/_yahoo/markets/activetraderupdate/10273359.html
Overstock Shares Are on Discount

By Arne Alsin
RealMoney.com Contributor
3/13/2006 4:22 PM EST
Click here for more stories by Arne Alsin

This column was originally published on RealMoney on March 13 at 11:16 a.m. EST. It's being republished as a bonus for TheStreet.com readers.
Over the past year there has been an avalanche of negativity about Overstock (OSTK:Nasdaq - commentary - research - Cramer's Take). The company has been criticized for underperforming analyst expectations in 2005, and there has been a swirl of controversy surrounding Patrick Byrne, CEO of Overstock, and his legal battle over alleged front-running by certain hedge funds.

My review of the financial statements and operating history of Overstock indicates that the negativity is overdone. This is a severely undervalued company.

As I'll explain below, my minimum prospective value for Overstock shares is $92 in 2010; it currently trades at about $23.

Overstock's business is not complicated -- it's the online equivalent of an outlet mall. The excess inventory segment of the retail market is ideally suited for the Internet. Brand-name manufacturers can avoid the inefficiencies of supplying and staffing retail outlet stores by partnering with an online aggregator like Overstock.

Also, excess inventory levels are notoriously irregular and difficult for manufacturers to manage. They have to deal with unpredictable change in both the nominal level and across product categories. Using a single distribution partner, like Overstock, requires no capital outlay by manufacturers and results in fast conversion of excess inventory to cash.

Here's the key analytical point for this particular model: The online space that Overstock competes in is a winner-take-all category. Like with eBay (EBAY:Nasdaq - commentary - research - Cramer's Take) in the online auction space, there's a self-reinforcing dynamic at work here. Buyers naturally migrate to the inventory liquidation site that has the most product, and sellers want to sell on the site that has the most buyers. It's a mistake to underestimate the importance of this dynamic -- or its potential long-term value.

Financial Statements Paint the Picture
The financial statements of Overstock tell an impressive story. Annual revenue has grown from $92 million in 2002 to $239 million in 2003, to $494 million in 2004, and to $804 million last year. Most remarkable is that this robust revenue growth -- soon to be over $1 billion per year -- has been accomplished using a minimal amount of capital.
Go to NEXT PAGE
Page 2
Despite having a comparable operating structure (e.g., gross margins) to Amazon (AMZN:Nasdaq - commentary - research - Cramer's Take), Overstock has used a tiny fraction of the capital that Amazon used, to build a comparable amount of business. During the past four years of rapid growth, operating losses have averaged about 3% of sales at Overstock. During the rapid growth phase at Amazon, operating losses averaged well over 20%.

When Amazon was nearing $1 billion in sales a few years ago (as Overstock is today), it took on well over $1.4 billion in debt to fund its expansion. Overstock has built a comparable base of business, with a comparable operating structure, with long-term debt of only $75 million. Long after the controversy over the hedge fund lawsuit dies down, business students will be studying this story. They can call it "Building a Billion Dollar Business on a Shoestring."

Critics of Overstock harp on the fact that the company is not making a profit. This criticism is misplaced. There's more to business value than short-term earnings. Companies with low P/E ratios can be expensive, and companies with no earnings at all can be cheap.

Consider Ford, which was being called "a steal" and "the ultimate no-brainer of an investment" in 2000 because it was selling at less than eight times earnings. Since that time, Ford shares have declined by 70%.

Certainly, the value of Overstock will eventually turn on its ability to generate cash earnings. Although the earnings leverage in this model is considerable, the near-term imperative should be maintaining and building on its dominant market position in this winner-take-all category.

Valuation of Overstock Shares
Since Amazon came public in 1998, it has never traded below one times sales, with the exception of 2001, when it was hit by a wave of negativity. At the time, the company was losing 12% at the operating line and had disappointing sales growth. It briefly traded at $5.50 per share, or 0.75 times sales. Currently, Amazon trades at over $36 per share, or 1.8 times sales.
Go to NEXT PAGE
Page 3
Look for shares of Overstock to perform quite well over the next several years. While Amazon's "trough" was at 0.75 times sales, Overstock's recent low represents a much heavier discount, at less than 0.50 times sales. (Market cap of $440 million divided by $900 million in current year sales.) Using one times sales as a conservative metric, my calculations indicate that Overstock will be worth $92 per share by 2010.

I wouldn't be surprised if the long-term cash earnings power of the Overstock model eventually merits a 1.25 to 1.5 times sales valuation, which would still be a discount to Amazon's 1.8 times sales valuation. This implies a 2010 value of $115 to $139 per share. It's interesting to note that gross margins at Overstock are slightly better and expanding faster than at Amazon.

As discussed above, Overstock is much more capital efficient than Amazon. That is reflected in Overstock's balance sheet, which is in vastly better shape than the balance sheet of Amazon at a comparable point in its history. Also, growth in partner fulfillment (product shipped direct from manufacturer to customer), now at about 60% of revenue, gives Overstock both capital and margin advantages over the Amazon model.

P.S. from TheStreet.com Editor-in-Chief, Dave Morrow:
It's always been my opinion that it pays to have more -- not fewer -- expert market views and analyses when you're making investing or trading decisions. That's why I recommend you take advantage of our free trial offer to TheStreet.com's RealMoney premium Web site, where you'll get in-depth commentary and money-making strategies from over 50 Wall Street pros, including Jim Cramer. Take my advice -- try it now.

Go to THESTREET.COM HOME PAGE | Go to BEGINNING OF STORY
Re: Is word out? Is Cramer going to jail? By z3peru on 3/13/2006 5:35 PM
Bobo, the cartoon was hilarious! Your best yet. Here on the East Coast, it is "night." Just waiting for the news.
Re: Is word out? Is Cramer going to jail? By gregcable2002 on 3/13/2006 5:42 PM
The negativity is overdone? What's up with that statement? these guilty ####s need jail time,for real.
Re: Is word out? Is Cramer going to jail? By they left out the UFO's today on 3/13/2006 5:46 PM
What? No picture of UFO's today in TSCM's OSTK piece?

Too late, jerks. The "King of Wall Street" screwed the SEC pooch with that "Bull" schtick.
Re: Is word out? Is Cramer going to jail? By InTheKnow on 3/13/2006 5:49 PM
Waiting patiently...
Re: Is word out? Is Cramer going to jail? By mhelburn on 3/13/2006 5:49 PM
It is so wrong to try Jim Cramer in the press. So, he and the Enterprise tried a few companies in the press, but he is such a wonderful guy. He loves our country and respects the law as demonstrated by the humble and respectful way he treated the subpoena from the SEC on national television. He probably can't get a fair trial in the U.S. because of the ass that he has made of himself. Where could he go to get a fair trial.. like you could find 12 of his peers. Oz...you could get 12 Flying Monkeys for a jury. I just love you Jimmy, you are such a stand-up guy. Bo loves you, too.

My brother-in-law keeps saying, "Cramer is too rich to be crooked!" That is proof to me. There is a cut off point where a person gets enough money and they become honest. Yup.. that's it. What is that number?

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