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Wednesday, August 23, 2006

Cramer's MAD MONEY Plan to Save Time Warner (Aug. 23, 2006)

Cramer first discussed a "hold'em or fold'em" play. He has a break-up value play for Time Warner (TWX) that he can offer it the proper strategy. He first reviewed Time Warner (TWX), which he thinks is doing poorly right now. He had nothing good to say at first and was still critical of the CEO Dick Parsons. Cramer even discussed the borrowing to buy back stock. He thinks that Parsons and Icahn are fighting the wrong game. Cramer says he has the formula to make a $16+ stock go to $26. He said the group is a loser with Parsons and Icahn, but Cramer said breaking-up may help. He thinks Time Warner cable is worth $11.00 and they should focus on just that and spin-off everything else. He said TWX is worth $26 if you break it up. He said the half of Adelphia will take them from 9+ million homes to 13+ million homes. Cramer said AOL is not worth anything to him, but maybe it is worth $2.00 per share or $8 Billion and it should be sold to Microsoft (MSFT) or even be given to them. Filmed entertainment segment is worth a lot to an outside studio, like Viacom's (VIA) Paramount; he said their film business has the lowest margins and it is worth another $3.00. Cramer then said TWX should sell its HBO unit to Viacom andf that it is worth $4.00 per share. The basic cable networks like Turner, CNN news, and others is worth $6.00 and they should sell it to CBS (CBS). Cramer said the magazine unit should be turned into a standalone pure-play magazine charity.

Cramer said this stock needs to be Sold until Parsons follows this plan to save the company value.

Jon C. Ogg
August 23, 2006

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