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Mad Money w/ Jim Cramer
Mad Money w/ Jim Cramer 7/23/24
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Welcome to Mad Money. Welcome to Kramer America. I'll be with my friends. I'm just trying to make you a little money. My job is not to entertain you, but also explain to you. So, quantity at 1-800-743-CBC, tweet me at Jim Kramer. Consumers at last are finally saying no. They are pushing back on high prices. They are demanding bargains. They are mad as hell and not going to take these inflated prices anymore. This rebellion is how inflation is finally wrenched out of the system. And I bet it keeps playing out behind the scenes. As long as the Fed takes its time cutting rates to ensure that prices start returning to more reasonable levels. Like the levels we saw before COVID, before the supply chain mess, and some say the price gouge began. The actions of a FedUp consumer is the hidden rip time. That's playing havoc with the terms of many different companies right now. To the point where beginning to see some actual disappointments all over the place, it impacts the averages to even a seemingly state that dialed at 57 points. That's the climb point one, 6% NASDAQ, inch down, 0.06%. The thing is, to even notice the pushback from the consumer, you need to piece together a ton of different data points. You have to create a mosaic by hand. Can't chat your BT this one. Because companies are reluctant to say, "Hey look, we took too much price and now we're rolling it back." Sure, some you can spot with the naked eye. Last night, for example, I told you, Mark, you expressed how the terrific quarter they did. Company handling being targets, making a ton of money. But underneath, oh my, as the consumer pulled back. This sequential declines in your spending growth with the airlines. They were going at plus nine. Now they're only plus five. Logging, plus five down to plus three, those are staggering declines. Those are the signposts of rebellion that's coloring earnings so far. Many argue spend is slowing because we've gotten over the post-COVID revenge travel. You know what I thought that too? So far, the airlines blame their woes on having too many empty seats. Sure, but they could have filled those seats if they wanted to. All they had to do was slice price. However, they've reluctant to do so, after tasting that magic elixir of high pricing from extremely full planes. They must have loved that phrase every time they boarded their own planes. Don't you think? Don't hear much anymore. We know that people have clearly caught up on their post-COVID travel plans. I work for Comcast. Comcast, Michael Kavanaugh, talked about it on a conference call saying, about his theme parks, and I'm going to quote here, "We're down in both revenue and EBITDA when compared to last year's record performance, with two thirds of the decline driven by lower attendance at our theme parks." So, Kavanaugh mentioned the culprit calling it a COVID recovery pulled forward of a magnitude we hadn't previously anticipated, hence the record theme park numbers in 2022 and 2023. But now, now Kavanaugh goes on to say, quote, "other travel options, including cruises and international tourism, given the strength of the dollar, have experienced their own surge in demand, which caused visitation rates at our parks to normalize end quote. I bet that Disney gives you a similar decline in park attendance. One reason that stock's falling apart, down 30 points from where it was trading, when Nelson Pels lost his proxy challenge and sold all the stock. Disney got five cruise ships. I wish they had twice that many, because cruises are doing great. Maybe they could have offset whatever theme parks climb we may or may not have. Remember, theme parks are not cheap to visit. I wish they would lower the ticket prices, something that everyone seems loathe to do. We know tickets for events have been a huge contributor to inflation from the CPI. Suddenly, I wonder if that's about to change. Cruises are an amazing bargain. Well, Courtney reports on Thursday, and it hit a 52 week high ahead of that number today. Usually, you wouldn't see that kind of strength in a stock running into the quarter, but the value of the advantage of a cruise is so palpable that stock buyers don't seem to mind. They don't seem to care. Plus, Cardinal reported an amazing quarter not that long ago, and its stock is still warming. The region cruises and the newly-minute Viking holdings have been remarkable for them too. When the cruise lines boast about their affordability, you know what they do? They compare their roommates to those of hotel rooms, which indeed are much, much more expensive. Maybe consumers aren't flocking cruises as much as they are fleeing hotel prices. Hence, the sharp decline in lodging spending growth that Americans best talked about. The airline stocks have indeed been clobbered. The American airline stocks down 24% for the year, because it's largely domestic and thus not getting much boost from the strong dollar. It's almost back to its COVID lows. It gets the spirits down and astonishing 82% since it's deal with JetBlue Felport. United, Delta, and Southwest are well off their highs. I think this is, again, a sign that ticket prices got out of whack. The only way for them to take back travel market share, I think, is to offer a bargain, a better price. While nobody's blinked on pricing yet, I think it could be dead ahead. You know what I also think we can pronounce the domestic travel and needs your bull market just plain dead. And the next thing you'll see is price cuts for everything across the board involving travel. Now, we know that housing's been in a tremendous bull market because there's a home shortage. But today we saw some numbers that make me think the consumer may finally be saying no to higher home prices. Sales that previously owned homes dropped 5.4% in June compared with May, according to data from the National Association of Realtors. In the Tories jumped 23.4%. Lawrence Yun, the very reliable chief economist from the National Association of Realtors, told CNBC that, and we quote, "we're seeing a slow shift from a seller's market to a buyer's market." Homes are sitting on the market a bit longer, and sellers are receiving fewer offers. End quote. A buyer's market? When did you hear that last? Again, this is exactly what was supposed to happen when the Fed rapidly raised rates. But it took ages to start playing out, didn't it? As that inventory of unsold homes rises, as it grows, we could hit a tipping point where sellers finally get concerned that they may miss out on the peak. I've seen many housing cycles. Cycles were everyone believes prices could do nothing but go up, because we didn't have enough homes being built in the country. But housing prices, they're about psychology. As long as they're going up, everyone holds back on listing their homes. But then there's this period where transactions slow down, and sellers are still holding up out. They don't want to cut prices, so inventory starts moving. That is happening right now. And you know what always happens after the inventory builds, and all of a sudden there's a panic among homeowners afraid to miss out on those high prices. That's when they see a dramatic expansion, and the number of houses for sale. It just explodes, which in turn causes prices to just profit. No reason to think this time will be different. I think there'll be a very different view about housing three months from now. Look, we've now seen lots of companies with excessively high prices get a real come up this year. Does anyone think that Nike's are a bargain? How about a cup of Joe at Starbucks coffee? Hey, get this. How about cosmetics from Estee Lauder compared to St. Elf? Look at the miserable numbers we saw today from L.V.M.H., the highest-ended power liquor and watch company. Sure, a lot of that was China, but there was nothing all that robust in the west offset China. We know that the consumers take advantage of three places. Costco, Walmart, and Amazon. The first two have been the leaders in price cutting. The third cut prices by items by almost 20% on prime day. Many of them over 20%. The sales were incredibly strong. That's not just through gallery. That is a revolt against every other retailer that hasn't rolled back prices. Overall, I'm betting that this is not the end of the client. In fact, I think it may just be the beginning. The consumers at last taking action. She isn't just frugal. She's going on strike against those who haven't lowered prices yet. And she's exactly not revenge travel, but revenge against all who've kept prices high. Most important housing prices should soon be teetering. As it becomes cooler, the Fed plans to stretch out its rate cuts to ensure that inflation doesn't rise from the dead, like my buddy pal friend, Nosferatu. Bottom line. It was only a matter of time before the consumer finally started going on strike. And that time is now. Phillip in Texas, Phillip. Hello, Jim. Thank you for taking my call. You betcha. I would like to know your opinion of the Wendy's company and if you feel like it's a buy, sell, or a hold situation. I don't want to touch this Wendy's. I think you can go lower. Now, it doesn't mean I don't like the food. My wife is like, you know, a child down on bacon or probably while I'm like doing this piece. But I must tell you that I think that Wendy's is the odd man out in this group, because you've got restaurant brands, you've got McDonald's, there's a room for Wendy's, I'm not quite sure. Okay. There's only a matter of time for the consumer on strike. I've been saying it was going to happen, going to happen. It is happening now. And that's the best way to beat inflation. And I think we're finally seeing it occur. Well, may or may or may not tonight, lots have posted a beat and raised quarter list. I've stopped fail today in response. I'm getting the bottom of it all when I sit down with the CEO. Then sometimes in the tick of earnings season, you get confused reactions to the report, which actually give you a buying opportunity to high quality stock. I'm thinking of the situation at GM to see if that's what investors are getting here. But tell us a sword yesterday on takeout rumors before falling back to earth today. I'm hearing where the situation stands with the company's top brass. So stay with Kramer. ♪♪ Don't miss a second of Mad Money. Follow @KimCramer on X. Have a question? Tweet Kramer. #MadMensions. Send Jim an email to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. Miss something, head to madmoney.cnbc.com. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line. It's possible. Complex specialty care that cares about your ROI. It's possible. Because we're already doing it. All while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. When you're hiring, the best way to search for a candidate isn't to search at all. Don't search, match. With Indeed. 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Demand for energy is projected to continue rising in the future. To help keep up, Chevron is increasing their U.S. oil and gas production, and they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations, helping supply energy that's affordable, reliable, and ever cleaner. That's Energy in Progress. Learn more at chevron.com/meetingdemand. For much now, you know I've been banking on a personal computer upgrade cycle. It's fueled by new AI-enabled machines, but can that carry over into everything that plugs into a PC? Take Lodge, Tech International, leading maker of computer peripherals like keyboards, mites, webcams, all sorts of gaming gear. They're set to cover port at nice sales and release speed driven by strong growth. On top of that management, raise their four-year revenue and operating income forecast. Apparently though, that wasn't enough to send the stock higher. After management made some cautious comments about the second half of the year, and that's why I believe the stock dropped almost 3% today. Don't take it from me. Let's talk to Hanukkah Faber. She's the CEO of Lodge, Tech International. Get it better in the quarter. Ms. Faber, welcome back to May of Money. Hi, Jim. How are you? I am good, Hanukk. I hope you're well. Great. I must admit that until I read that you were cautious, I thought it was all systems go. You had a nice top line beat, a nice bottom line beat. What do you credit for the strength in the quarter? Yeah, we had a great quarter. I'm really proud of our team's quality growth, really, plus 13% top line growth. It was really quality. It was brought based across all our three categories, all three regions, and driven by demand, which came in stronger than we had expected. We did all that while growing gross margins by more than 400 basis points. That drove operating income up 67% versus last year, so just a really strong print. Well, I'll tell you what I was confused by, used the terms uncertain and volatile. And I believe that they literally undid all the good things that you just told. How can you have an uncertain and volatile environment and get put up those tremendous numbers? Yeah, the quarter was great, and we are consciously optimistic for the future. But at the same time, we are also seeing that the consumer confidence, especially here in the U.S., is still trending down, still some uncertainty. Geopolitically, we're a very global company. So we just want to not get too far of our skis here. So, yes, we did raise the outlook to reflect the strong demand in the first quarter. And of course, we're going to do our very best to beat that outlook further. Well, okay, so this gets to a point that I've been emphasized, which is the consumer is growing through also going on strike against companies that have raised price, raised price, raised price, that is not yours. I saw a premium logic to gaming mouse for under $100 thanks to a prime day deal. How did that do? Yeah, prime day, I think, was a great example of some resilience into U.S. consumer. We're certainly on the gaming side, or we're seeing really great progress on the premium end, actually. So that gaming mouse that you just mentioned, the super light too, is doing very well. Same as doing very well, our wheel racing, also at the higher end of our portfolio. But we're also seeing consumers who are a little hesitant. So it's really mixed on the consumer side in the U.S. I have to say, in Europe and in Asia, our numbers were very, very strong. Europe, especially outperforming really great consumer demand, really great execution from our team, Europe was up 20% for us. So that consumer looks even stronger. Yeah, I'm beginning to see that dichotomy too. It's something I want to talk about more. Whether it be in soft drinks, whether it be in autos, whether it be in Europe stuff, Europe's doing better. It's something that I'm not used to seeing, but we've got to stay focused on it. Now, one of the things that I don't want to overemphasize, and yet I have been, and I've got to go there, what you're doing with the PC in terms of the AI PC and AI mouse, I found very exciting. When I heard there's a $50 mouse, I toggle back and forth constantly to chat GBT. Tell me about this, because for, I'll pay $50 to make it so I don't have to go back and forth and take five minutes of my time. Do you be sure where I am in my PC? Yeah, absolutely. So that's our Logi AI Prom Builder. It sits in every single one of our mice and keyboards in the English language. So here in the U.S. for sure. It comes for free. It's free software. It lets you do a shortcut to chat GBT. It's now been, it's now had more than five and a half million unique user interactions. Lots of people using it. And just a great upgrade of a product we already have with this Prom Builder. We love it. Now, I should not confuse that with a potential PC refresh. I think it's going to be big, but there has not been, frankly, a real sign yet that there is a dramatic refresh going on. Yeah, I would say on the gaming side, we're seeing some healthy refreshes happen. People refreshing their gaming gear, all that gear they bought during the pandemic. The gaming market is looking increasingly stronger, certainly for us. Our gaming business was up 18% in the first quarter. And again, very, very healthy. On the personal workspace side, maybe a little less so. But yes, we anticipate a PC refresh coming. And that's never a bad thing for Logitech. Now you've got something going for the Mac. I see Mac numbers really doing incredibly well. I don't know exactly what your ratio is. Typical wind tell computer versus Mac. But is it meaningful? Yeah, our Mac business is meaningful. And of course, you know, our generally our work with Apple is very exciting. So in this first quarter, we launched the combo touch for the new iPad range. And that is just a gorgeous, incredibly light product. And that's off to a great start. What does that mean? Tell me what it does. So the combo touches the cover and the keyboard that you use on your new iPad. So Apple does it, but we also partner with Apple to do it for them. Really a gorgeous product, great value as well. So if you bought a new iPad, you must have one of these new combo touches. Good, I was usually went Friday by wife's as we had to do. I was doing a remote hit and I just marveled at how great the computer is. But I'm watching, I see the combo touch and I kind of think it's pretty cool. And this is just again part of just your continual new additions that you make. Will this be a holiday seller or is it just something for school? Both of them. So back to schools, a big period for us, but the holidays as well. And as you say, Jim, I'm so glad you said it. You know, launching 10, 11, 12 new products every quarter. That's our mother and apple pie. We're really good at that. And I think what we've launched in the first quarter was strong driving part of those results. And especially on gaming, we've got an incredible lineup of new products coming up. We're launching those on September 17th at a big global event. Well, that will be ready for EA College Football 25 and then eventually GTA, which I know is going to happen someday. I had a good favor. Thank you so much for coming on. May have money. See you have launched it. Good to see you. Great to see you. Thanks, Jim. Thank you. May have money is back here. Coming up, GM has been stop and go after earnings, ride shotgun or grab a lift elsewhere. Stick with Kramer. At EverNorth Health Services, we believe costs shouldn't get in the way of life-changing care. And we're doing everything in our power to make it possible. Behavioral health solutions that also keep your projections at their best, it's possible. Pharmacy benefits that benefit your bottom line. It's possible. Complex specialty care that cares about your ROI. It's possible. Because we're already doing it. All while saving businesses billions. That's wonder made possible. Learn more at EverNorth.com/wonder. Support for this program is provided by Chevron. Demand for energy is projected to continue rising in the future. To help keep up, Chevron is increasing their U.S. oil and gas production. And they're innovating to help do it responsibly across their operations, including their Gulf of Mexico facilities, which are some of the world's lowest carbon intensity operations. Helping supply energy that's affordable, reliable and ever cleaner. That's energy in progress. Learn more at chevron.com/meetingdemand. At this point, early season, the reports are coming so fast, Wall Street tends to make a ton of mistakes. Take General Motors, which reported a healthy top and bottom line beat this very morning. Only see it's stock tumbled 6.4% response. I say give me a break. That is just plain wrong. So what the heck happened here then? GM had been on a roll, basically doubling from its lowest last November, to its highs last Thursday, among the best performers in the second. That run kicked off when this company scaled back into electric vehicle investments and started returning fast sums of money to the shareholders. They announced a $10 billion dollar accelerated buyback in November, along with a 33% dividend boost, then added an additional $6 billion to the buyback last month. Talk about shareholders friendly GM's results have been fantastic. Three weeks ago, we learned that they had their strongest vehicle sales number since the fourth quarter of 2020, and it's incredible. And now that seems like that will be able to cut interest rates before the end of the year, things were definitely looking up to the automakers. This stage of the rate cycle has always been the time to invest in this group. House of pleasure. And that's where we are coming into the quarter. And you know what? When GM reported this morning, the numbers were actually, they were phenomenal. And that's why the stock in your scene rallied in response. Wall Street was not going to look confused by the actual results. The stock only sold off later after the comfortable got going more in a second. Not only did GM post a $2.5 billion revenue beat with 7% growth, their margins came in higher than expected. And the company earned $3.06 per share. And it's one of the looking for $2.70. That's up 60% year over year. Operating cash flow and free cash flow were both substantially better than expected as well. On top of the great results, management raised its full year forecast for earnings before interest, taxes and automotive operating cash flow. And earnings per share. Now get this, get this. Previously they had been predicting $9 to $10. Okay. Now let's say $9.50 to $10.50. Some companies don't raise the guidance enough after a big earnings beat, but GM had a 36, 36 cent earnings beat. So a 50 cent forecast boost is very meaningful. The new cash flow forecast were also very impressive. I don't know. I don't know how many Superlors I can put in one piece. And GM's letter to Cheryl or CEO Mary Barbus cited four key drivers of the strong performance, a high performing portfolio of internal combustion powered trucks and SUVs, improving electric vehicle markets here, strong and stable pricing with fewer discounts than the rest of the industry, and the payout from investments that have allowed GM to now focus more on more news and capital efficiency. As she sees it, they've got great vehicles and great execution. There was plenty of other detail on the call with Barre getting into some of the nitty gritty like the features that have made her top SUVs and trucks so attractive. They got Supercruise, named by Edmunds.com, as the top hands-free driving system. She went into how they're cutting electric vehicle costs their best-selling model. The Cadillac Lyric has 24% fewer parts than the previous year's version without compromising performance. Remember, GM's on track to cut $2 billion in fixed costs this year, which is another reason for it's suddenly why it's just suddenly so darn profitable. Still, none of this explains why the stock got steamroll today, does it? There was some negativity on China when GM competes via joint venture with the Chinese automaker SAIC Boulder. Management says the competitive environment there remains very tough. Tons of start-ups that prioritize production over profitability. GM's trying to restructure its Chinese business to make it more efficient, but that's going to take some time. We also got a quick update on the trouble. Crews all the time in this driving business. Now, when I sat in the back of that one, where a bar says GM's making progress with crew's vehicles returning to the road in use in Phoenix and Dallas, they're trying to reduce costs by installing these systems solely in Chevy Bolt EVs, rather than developing a new Robotaxi van that was part of the original plan. Again, though, most of that news is positive. It does not explain how GM stocks spiked 7% in pre-market trading this morning, and then suddenly got thrown into reverse. It was still in positive territory when the conference call began at 8.30 AM. As the call got going, though, the stock started sliding lower. By the time the market opened, at 9.30, GM shares were down 0.4%. And they kept falling through the first hour of trading, only finishing the session down more than 6%. So what in the world happened here then? We got a step back. I saw some people theorize that the solve wasn't response to the poor China numbers. No, or the fact that GM delayed its electrocute. No, I say those are dead wrong. Nobody thought China'd be any good anyway. I don't know if Seoul was clamoring for the Buick electric vehicle. Maybe you are. I don't care. Someone else that, uh, the GM, someone specked, the GM sold off because it scrapped the electric van for their crew's business, but that's a huge, actual, huge cost of savings. It's not, it's a positive. It's not a negative. So let me tell you what really happened here. Because it's pretty darn interesting. It's a great way to look at Wall Street. At 904, the most influential auto analyst in America, Adam Jonas from Morgan Stanley, published a quick take reaction to the quarter, where he extolled the strength of the quarter so far so good. But then without much explanation, decided this, this quarter, would be the peak for GM. In fact, the title of the piece was called, "Too Cue Reaction Peak?" Question mark, end quote. In a summary, Jonas lays out all the positives. Then he suggests history suggests the good times won't last. That was it. You understand, Jonas is real good. He writes a lot. He's kind of like, he's like Stephen King, Charles Dickens, this guy. But there was no real support for that argument. He's respected a lot of analysts, so some people took it seriously. And they, you know what they did? They could change, could change. Because Jonas made you feel like maybe you're the last one in, the stock cross from positive negative, right after that note was published, and never came back. Like you could say, Jonas killed GM. Honestly, if you're going to call it the peak of GM, I'd like to see a little more rigor behind the analysis. Personally, I think it's not so called a peak in any automaker when there's a strong possibility that the Federal Reserve will start cutting interest rates in September, lowering the cost of financing, which matters so much to an automobile. But I don't mind that this stock cut obliterated today. GM reported fantastic numbers with great guidance. And thanks to one analyst reporter, I almost said good analyst, but you know what? I respect him too much. I mean, I'm not going to tell you what I mean. 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I'm not going to tell you what I mean. I'm not going to tell you what I mean. Yeah, movies is an important part of our entertainment strategy. There's great momentum following the Barbie movie. There are 16 films in various stages of development and pre-production. Just recently we announced that Masters of the Universe will be released in theaters worldwide on June 5th, 2026, distributed by Amazon MGM. There's a new Monster High movie that we are co-developing with Universal and Academy Award winning producer and screenwriter Akiva Goldsman. And Matchbox has a great director, some hard graves that directed extraction that we are very excited by. So there's a lot of activity. These are just the recent examples, but 16 movies in total currently being developed and ready for production. Now, I don't know about this cat or an outfit, but I do know one thing. When I met you multiple times, the one thing I always said to you is, look, could there be a moment where you have so much cash? You've fixed the balance sheet. You've got these great properties, and it makes it so you are actually vulnerable. You're at $7 or $22 million, you bought back $100 million with a stock, but at what point does your stock just become so cheap that something does happen? Well, we believe the stock price does not reflect the success we have had to date, and importantly, the future potential. You know the numbers well. If we just look at some of the key metrics, our top line grew by more than half a billion dollars. This is since the start of our turnaround in 2018. Adjusted gross margin improved by almost 1,000 basis points. Our adjusted EBITDA grew by seven and a half times, and free cash flow went from a negative $325 million to more than $700 million, and of course, we are now in investment great and beyond the financial metrics. Our brands are thriving. We are gaining share in the toy business. We are winning major licenses and are having great momentum in our entertainment strategy highlighted by the Barbie movie as one obvious showcase with so much more in the works. So we are well positioned to build on this multi-year trajectory and continue to execute our strategy and expect the share price to reflect this over time. Well, look, your asset-like model, which you've completely turned around, it's definitely the right thing, says to me that, look, if you don't, if you buyers don't want it, we'll buy it. Why just 100 million? Why not just stand there at 17 and say, listen, we will buy everything? Well, we've been buying at this point over $400 million since we resumed share repurchase last year, which was the first time that this happened in nine years. We do have still $800 million remaining under our current $1 billion authorization. We expect to continue to do more share repurchase in line with our capital or location priorities, and this reflects our confidence in our strategy to grow sales, earnings, and free cash flow and create long-term shareholder value. Okay, now your gross margin indicate that the consumer is pretty robust. You're able to get that full price, but we are starting to see this frugality of the consumer, whether it be going cruise lines instead of going to theme parks, whether it be not taking expensive airlines, whether it be using Amazon Prime Day rather than holding back. Are you seeing a too frugal consumer? You know, we don't see that. The toy industry actually performed better than anticipated in the first half and was comparable to the prior year period. We still expect the toy industry to decline modestly in 2024, but this is an improvement from our initial outlook at the start of the year. Certain categories are driving this. There's building sets and adult fan and collectors, which boast well for our strategy. And beyond 2024, we believe that trends will further improve and industry will return to growth and continue to grow over the long term. The fundamentals of the toy industry are strong. Toys are an important part of consumers' lives and retailers see the category as a strategic lever. And within this environment, we expect Mattel to continue to gain share and outperform the market this year and next year as well. Look, I share with you, I say, a budding frustration. Cash building, sales good, toy category over and over. Again, I keep hearing from every retailer is the place to be, but the stock is not done what you and I thought it would do. So let's see what happens, but it does represent a bargain here, you know, on Christ, Chairman, CEO of Mattel. Thank you for coming on Matt Money. Thank you, Jim. Good to see you. Matt Money is back after the break. Coming up, pop open those umbrellas and tee up your toughest questions. Kramer takes on all comers in the lightning round. Next. It is time to start with the white round. It's right behind us, where you take the black part. Call to your team, and it's hard to tell you about that by ourselves. So just regarding the course of the time, we're going to start with the five-week Wednesday. And then the lightning round is over. Are you ready, Steve? Yeah, I told you the light round. Let's start with Harry in my home state of New Jersey. Harry! Oh, yeah, Mr. Kramer. Oh, yeah, Harry. Thank you so much for taking my call. I'm getting your one. Yeah, I'm interested in this shipping company. It's a petroleum product, is their thing. And the name of the company is Torm, and the letters are TRMD. Okay, this is one of those companies that has a remarkably high dividend yield. And as long as it has that dividend yield, the stock's going to stay up. But when things start going bad, and they always do in this business, that yield's going to start going down. Okay, and you are going to just head to yourself, "Why am I still in this stock?" So be aware, right now, still going up, but these things are slopes, and they just get crushed. When that dividend goes down, yield will go down with it. Keep that in mind. That's unusual. Let's go to America, Tennessee, Merrick. And Kramer, how you doing? I'm doing well. How about you, Merrick? I'm doing really well. I just wanted to get your opinion on train technology. Hard to stop a train. Now, that company's been reporting soon, and the stock's been straight up. The ones that have been straight up have been selling off, but believe me, train is for real, as is carrier, by the way. And now I'm starting to look at Johnson Controls, a little orally, J.C.I. Let's go to Craig in Texas, Craig. Hey, what's going on, Craig? How are you feeling today? How are you doing today? I'm doing well. How about you? I'm doing wonderful. I had a question about the stock. It hit an all-time high today, and listening to that. It's got a couple upgraving. I feel like it doesn't get a lot of attention, which is probably good. The stock I'm calling about is S.A.P. You know, we had Christian Klein on recently, and the guy was so impressive, because his journalism German company, people don't want to buy it. This stock is incredible. I think that S.A.P. is not done going higher. Let's go to Jim in Tennessee, Jim. My staff is awesome. Absolutely. What's going on? Hey, back in Jim, where you took a lot of the ground call on the stock, and we're going to do some more research on it. The stock was upgraded yesterday. It trades at 85 and chains, was upgraded to 130, and had several target prices up to 190. A question is, the stock is mistering four times in a row, but it doesn't get killed every time. For some reason, it plays a hit, but not fewer hits. The stock is axiom therapeutics. This is central nervous system, CNS. If you can make a breakthrough in CNS, your stock will double. If not, it will just go down. That's a double or nothing stock right there. As I laid the jump, conclusion of the lightning row. The lightning row is sponsored by Charles Schwab. Coming up, field of streams, why the tech mega-caps are in a league of their own. Next. Some businesses are just playing bad. That's something we keep learning in a certain season, and it's painful to watch it unfold. For example, the content business is one awful business. It's incredible how difficult it is. In part because the companies need to pay fortunes for programming, especially for sports rights. Prices that until very recently could be justified by eyeballs. I am not sure they can be justified anymore, because while these rights seem dear to all my media companies, they seem cheap for the mega-cap tax. Amazon now puts him willing to bid up all sorts of sports event programming, something that Comcast or Disney or Paramount can't afford. They don't have virtually infinite money. Right now, the media companies we grew up with need to pay for content are really in a dogfight that perhaps they cannot win. The mega-cap tax they should be in content, and they know that. For example, if the NBA can be a draw for all sorts of other options, including retail sales, their own retail sales. That's the case of Amazon. So what do they do? They bid on a package of games that would have assuredly gone to a Warner Brothers discovery, which currently has excellent coverage in a fantastic adjacent show, inside the NBA starting Charles Barkley. Everyone knows Barkley is amazing, one where people watch inside the NBA, even if they don't watch professional basketball. Yeah, it's that compelling. But Amazon wants that package, and what Amazon wants Amazon gets. Sure, you may have to pay $15 extra per month to watch the NBA on Amazon, versus free ad supported TV. Some would say it's a tax on those who want to watch, including underprivileged people, who will now be pushed by sneakers via Amazon's inferential recommendation system. I say the team members want to be a lie with Amazon, there's no going back to the old days. Even Warner Brothers paid enough to match Amazon for the NBA rights. It's just not clear how this battle plays out, but Amazon's got a huge war chest that can probably preemptively output anyone. We know the NFL has been a terrific property for Fox, NBC, and ABC. These networks have always argued that footballs are great business for them, and it also gets you to watch their other programming. But Amazon now has the rights to a bunch of games. Netflix has both Christmas day games, and Alphabet has the NFL Sunday ticket, which they're finally doing a phenomenal job with after ironing the kinks out. If Apple wanted games for Apple TV+, you could bid for whatever's available in it. The linear TV folk can't compete, because their cash generation doesn't come anywhere near the megacaps. Plus, the digital players have a real edge in that they often have content that costs them nothing. And Alphabet's French on YouTube? I bet it's got tons of programming they give for free. Same with Apple, it's like Reddit and Pinterest. Their users create pretty much all of their content. They have such an advantage over an ESPN, which has to pay a huge amount for everything. Meanwhile, the ads on streaming can be targeted to the most interesting consumers, and the ads on ESPN broadcast are basically a blunderbuss aimed at everything. Another issue, the linear TV guys don't have enough ads. But in Alphabet like Netflix, they said they have too many ads. What a high-quality problem. Ultimately, I see a universe where Amazon, YouTube, and Apple TV+, own the world that currently belongs to linear TV. With Pinterest, Netflix, and Reddit being like what we used to call the UHF channels, the higher ones on the dial filled with local and amateur stations. It's the way of the world. The megacaps have too much money to be beaten, as long as they're willing to spend it. I have no idea what happens to the old-line linear TV plays. They need to rethink what content people will pay for. That's where the profits could have to come from. Not sports, because in the end, I can see Alphabet, Amazon, and Apple locking up all the pro sports they want at prices the old-line media companies simply can't compete with. As long as the streamers are willing to pay up for the best content, the old-line players will keep being beaten, especially with their own streaming entities, so they find a new way to approach the business. It's too bad. We all grew up on free ad-supported sports. Soon those days might be over. I'd like to say there's always a more market somewhere. I promise I'd find it just for you right here on Mad Money. I'm Jim Kramer. See you tomorrow. All opinions expressed by Jim Kramer on this podcast are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. You should not treat any opinion expressed by Jim Kramer as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. Kramer's opinions are based upon information he considers reliable, but neither CNBC nor its affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. To view the full Mad Money disclaimer, please visit CNBC.com/MadMoneyDisclaimer. Want a website with unmatched power speed and control? 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