In some ways, Cramer thinks social media is similar to the dot-com bubble.
Those who get in on social media names early could make a killing, he said, so long as they take profits on the way up and don't get too greedy. Unlike the dot-com stocks, though, most major social media plays are private. When social media companies like Facebook and Twitter become public, Cramer thinks it will be really hard to get in. Not to worry, though. Home gamers can play the booming social media space by way of Sina , he said.
Based in Shanghai, Sina gets the majority of its business from display advertising. Cramer likes that model being as advertising dollars continue to migrate online from print media. What's driving Sina's stock higher, though, is Weibo. The microblog site is similar to Twitter and boasts more than 500 million active users. In addition, Cramer thinks Weibo is a budding online ecosystem. After having launched in December 2010, the site has more than 500 applications. Sina also has 90 percent market share by total hours spent on all microblog services.
When it comes to real metrics, though, Cramer said it will take Sina at least 18 months to monetize Weibo. Once they do, he thinks it could be huge given the number of users and amount of time spent on the site. In addition, its users tend to be relatively wealthy, which is something advertisers love. That said, Cramer thinks now is the time to invest in Sina.
Cramer acknowledged that Sina has already posted a 200 percent gain in the last year. He doesn't think that means investors have missed out, though. When he first got behind Baidu in March 2010, the stock was already up by 226 percent in the past year. Yet the stock has gone on to provide a 141 percent gain.
"We care about where a stock is going, not about where it’s been and I think that Sina is going higher," Cramer said. "I feel much more comfortable with Sina’s financials than with any of the other Chinese Internet names. Like Baidu, this company was among the first cohort of Chinese businesses to come public in the U.S., so the bar has been a lot higher in terms of disclosure and communication from management than with the current crop of China Internet IPOs."
While Jefferies recently initiated coverage on Sina with a $150 price target, Cramer thinks it has the potential to go much higher given the intense interest in social media names. Cramer doesn't like to chase, though, so he recommends buying shares on a pullback. In case that pullback never comes, he thinks investors can start a small position now.
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