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Icahn-ography

Cramer has this rule: Be a lemming. Especially when it comes to following the top investors on Wall Street.

That’s why he has his eye on BEA Systems, the business software company. Since June, Carl Icahn has about quadrupled his position in the company and made some bold statements about BEAS needing to be sold.

Bascially, Icahn said competition makes it too hard for tech companies to stand alone these days, and that BEAS could “attract a meaningful premium for shareholders if it were sold to a synergistic company in the area,” Cramer quoted the activist shareholder as saying.

The key here is that Cramer said he thinks BEAS’s shareholders are behind Icahn and his strategy. Of Icahn’s 33.4 million shares, 16.2 million are options, which means his voting power is equal to only about half his position. Remember, common stock let’s you vote, options don’t. So, in a sense, Icahn has left himself open to the whim of other large shareholders. But Icahn neither muscled his way in to the company, nor did any key players leave to make room for him.

“I think that means they believe in his plan,” Cramer said. “Otherwise, they would have jumped ship and sold him their stock.”

True to his investing principles, Cramer likes BEAS for more than just the takeover potential. The fundamentals are sound, and the company has a foothold in China, despite the software piracy rampant in that country.

The only real catch is the buyback and options probe. As a result, the Securities and Exchange Commission is holding up BEAS’s $620 million buyback. "That could be huge for the stock until [BEAS] gets current with the SEC filings,” Cramer said. The delay could last until November, but this shouldn’t be an issue for long-term buyers of BEAS, as long as the buyback does resume.

“I like the fundamentals at BEAS, I like the takeover potential, and I especially like the fact that Icahn is my icon,” Cramer said.

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