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Thursday, August 10, 2006

Cramer's MAD MONEY Recap (August 9, 2006)

Cramer was discussing bad acquisitions, and will later do positive acquisitions. Here is what he said: BRCD-MCDTA; S; EBAY; EMC-RSAS; ALA-LU.

Brocade (BRCD) fell substantially after buying what Cramer called as trash McData (MCDTA).

"gGtting out while the getting is good" where the company is overvalued and tapped out. He said Sprint (S) was dumb enough to take NexTel. He was very negative on S.

The "desperate acquisition" or "Dont just stand there do something" when you know it is in trouble and does a deal to get out of trouble. He said that eBay (EBAY) was desperate to keep going by buying Skype. He was critical of Meg Whitman. He said they could have saved Billions by doing a partnership.

The "panic overpay buy acquisition" is when a company worried about slower growth goes out and way overpays. He said EMC (EMC) just did a panic-overpay for RSA Security (RSAS).

Two underperforming companies merging is bad, and he used ALA and LU merger as an example.

He called the Napolean merger where a smaller company tries to buy a larger company; he used Boston Scientific (BSX) as the example.

4 Smart mergers were Federated (FD), Whirlpool (WHR), P&G (PG) and J&J (JNJ).

On a side note, Cramer said Oregon Steel (OS) may be the winner in the BP pipeline fix. He did say no one knows yet who the pipeline will physically come from, but it is cheap and they make the type of steel for that.
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