The government’s rush to hold General Motors’ initial public offering, despite a touch IPO market, seems a lot like the US Treasury’s relentless sale of Citigroup, Cramer said Thursday. The question, though, is why the hurry?
“I think GM and Citi are victims of the same thing,” Cramer said during Stop Trading!, “the November election.”
The Mad Money host thinks the Democrats are pushing hard to complete the government’s bailout of these companies in order to tout the accomplishment ahead of the midterm elections. Granted, as CNBC’s Phil LeBeau reported on Thursday, GM shares would have to sell for $141 a piece in order for taxpayers to regain all of their money, but Cramer said people can’t let facts get in the way of a good story. Not when it comes to politics.
Still, the government’s constant selling of Citi has given investors the chance to buy this “great” company on the cheap, Cramer said. He recommended starting half a position now, and then adding to it the week before the election in November. He figured the government would be scrambling to sell off whatever shares it can by that point, which would bring the share price even further.
In other stock news, Cramer praised First Niagara Financial for buying NewAlliance Bancshares, saying the deal has created a “regional powerhouse” in the Northeast. He also talked up Caterpillar’s strong July sales, saying the company is “killing the competition.”
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