• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Jim Cramer

Jim Cramer: You Can't Aspire to Be a Meme Stock

That means aspiring to be shorted. And the shorts just aren't that stupid to take that bait.
By JIM CRAMER Jun 28, 2021 | 06:38 AM EDT
Stocks quotes in this article: AMC, GME, BBBY

I hear it among the CEOs of small-caps some of the time now. I suspect I will hear it many more times in the coming months.

"How do we become a meme stock?"

First, let me say, in some ways I am the worst person to ask. As the only individual in the media fierce - or stupid - to take this mob on, I am no advisor to those who are seeking this throng's attention. You will be in my twitter feed in a nano-second and it won't be positive.

But I get this cynical gaming of the most nihilistic group of people I have ever seen in 40 years of investing. The desire to be a "meme" stock means the desire to have your stock bid up by Reddit followers with the hope that you can dump either your shares to make a score or the companies' shares to clean up the balance sheet.

The meme-seekers want what happened to the stock of AMC (AMC) : a company that might have gone bankrupt were it not for the short sellers whom Wall Street bettors hate and seek to destroy. Or they want what happened to GameStop (GME) where a savior emerged - Ryan Cohen - as a sort of Mel Gibson Braveheart character, who created a movement to smash the shorts.

Both cases have been wildly successful.

So, naturally, CEOs want to emulate the success of either or both.

However, in the interests of companies seeking the attention of the WallStreetBets crowd with the hopes that they can get the meme crowd to bid their stocks up, there's something that must happen first before you attract their attention: you need a gigantic short position in your stock.

Now no company I know ever aspires to have a large short position against it. You can't just go out there and hire shorts to get squeezed up by the WallStreetBets people as tempting as that may be. However, if you could that would be the best way to get the WSB crowd to buy your stock.

Nor can you hire someone to make a short report that scalds you. As diabolically brilliant as it may be, there is no Hindenburg for hire. Nate Anderson, the analyst behind Hindenburg, is actually an honest guy trying to profit from rooting out questionable managements and he's done a very good job of doing so. I don't know of any really venal outfit that will comply with the process of starting up a short campaign.

However, I do know this. The shorts are on the run more than I have ever seen before. They are a bunch of bambis, endangered forest slaughter. I think any company with a stock that has more than a 10% short interest will be ready to rock and roll with a simple reach out via twitter. All management has to do is note something positive that is about to occur and a mention of the size of the short and that gets the WallStreetBets people going. They aren't Einsteins, or Buffetts or Mungers, although the latter shares many characteristics of meanness and contempt.

Now, why am I mentioning how to get things going? Because I would love nothing more than an honest company that needs money to get the WSB people to raise it for them. The WSBers are just a dream come true for a company that needs money. If they sense there are shorts to be trashed they will take a stock to infinity to do so. Of course, as we saw with Corsair Gaming, the execs are beginning to ready their insider forms to be able to drill the WallStreetBets bids at much higher prices than thought possible.

Unfortunately, I have found that most companies with a high short position in their stock tend to be deserving of such. They have bad balance sheets, negative prospects and are inherently undervalued. I think most short sellers, when not part of a stupid gang tackle effort a la GameStop or, say Bed Bath & Beyond (BBBY) , are smarter than the longs, or were smarter before the WSBers emerged as the most important force in capitalism at this moment.

So my bottom line: you can't aspire to be a meme stock. That means aspiring to be shorted. And the shorts just aren't that stupid to take that bait. Nevertheless, sadly, I think if I were short any stock with a more than 10% short position I think it is time to cover and cover right now because you have a target on your back and it is way too big to beat.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

Action Alerts PLUS, which Cramer co-manages as a charitable trust, has no positions in the stocks mentioned.

TAGS: Short-selling | Investing | Markets | Stocks | Trading | Jim Cramer |

More from Jim Cramer

Jim Cramer: I'll Put My Money With 'Boring but Lucrative' Any Day

Jim Cramer
Sep 29, 2021 1:28 PM EDT

Let's look at that recent downgrade of 'dull' Morgan Stanley and see why exciting is best left for the stadiums and amusement parks -- and not stocks.

Jim Cramer: America's Toughest Job? Finding Workers

Jim Cramer
Sep 28, 2021 12:17 PM EDT

It's the question of our time: Where are the people willing to take on these better paying gigs? Let's see what's going on and what we need to happen.

Jim Cramer: Here's How Analysts Can Be Off By a Wide Margin

Jim Cramer
Sep 24, 2021 12:02 PM EDT

Let's look at the reactions to Nike, Costco and Salesforce to see what happens when they're viewed from a real world perspective.

Jim Cramer: It's Pure Insanity That We Don't Make Chips Here in the U.S.

Jim Cramer
Sep 23, 2021 11:05 AM EDT

While the big guns meet at the White House about the global chip shortage, the president and these companies are approaching this all wrong.

Jim Cramer: Go Ahead, Have a Cow, but I Say Powell and Xi Are Bulls

Jim Cramer
Sep 22, 2021 3:51 PM EDT

We rallied, because China's President Xi and Fed Chair Powell made decisions that they knew would lead to rallies.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 04:51 PM EDT PAUL PRICE

    We should be in for better starting soon.

    Window dressing tomorrow, the last day of ...
  • 11:56 AM EDT STEPHEN GUILFOYLE

    Stocks Under $10

    Check out what's going on in the Stocks Under $10 ...
  • 12:04 AM EDT PAUL PRICE

    Two Good Signs -- Especially for Small-Cap Investors

  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login