Avoid ‘bogus’ tech companies that should’ve never gone public

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CNBC’s Jim Cramer said Friday that several tech firms that came public in recent years are beginning to realize their missteps, and warned investors to take their dollars elsewhere.

“The companies out here in San Francisco have only just begun to realize that they over-expanded and, in many cases, some of these companies should never have come public,” the “Mad Money” host said.

“Especially for the most bogus companies that were invented in the last three years, I say they should never have come public, but in many cases they shouldn’t even exist. Harsh? Maybe, but I’m trying to help you preserve your capital,” he added.

Cramer’s comments come after he spent a week in San Francisco interviewing tech leaders. He said Thursday that several told him that there are impending layoffs across Silicon Valley and some companies plan to relocate outside of California.

Looking to next week, Cramer said he has his eye on the Federal Reserve‘s two-day meeting that will reveal the magnitude of the next interest rate hike.

“If they do act more aggressively, will the market welcome that news, or will we get another sell-off? We’ll have to wait and see,” he said.

Cramer also previewed next week’s slate of earnings and investor meetings. All earnings and revenue estimates are courtesy of FactSet.

Monday: Oracle

  • Q4 2022 earnings release after the close; conference call at 5 p.m. ET
  • Projected EPS: $1.37 
  • Projected revenue: $11.61 billion

Cramer said he expects a tour-de-force conference call. If the stock goes down afterward, “we know that tech is sunk and the depths are not yet plumbed,” he said.

Tuesday: Affirm, DuPont

Affirm

Cramer said the meeting should shed some light on the state of the buy-now, pay-later industry.

DuPont

If [CEO Ed Breen] says we’re going into a recession, I want to know how long,” Cramer said.

Thursday: Kroger, Adobe, Honeywell

Kroger

  • Q1 2022 earnings release at tbd time; conference call at 10 a.m. ET
  • Projected EPS: $1.29
  • Projected revenue; $43.85 billion

Cramer said that investors shouldn’t bet against the grocery company despite soaring food inflation.

Adobe

  • Q2 2022 earnings release after the close; conference call at 5 p.m. ET
  • Projected EPS: $3.31
  • Projected revenue: $4.35 billion

“Adobe is a terrific long-term growth story, so if it gets hit you actually might want to buy some on weakness, but don’t count on it to turn around anytime soon,” he said.

Honeywell

Cramer said he doesn’t plan to buy shares of Honeywell for the Charitable Trust, but would consider it if the stock plummets.

Friday: Centene

“I want to hear about whether the company is continuing in the tradition of the late [former CEO] Michael Neidorff, the man who created this health care powerhouse,” Cramer said.

Disclosure: Cramer’s Charitable Trust owns shares of Honeywell.

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