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LinkedIn's IPO Is a Litmus Test for Other Web-Based Companies

Wednesday, 18 May 2011 | 3:20 PM ET

An initial public offering by social networking firm LinkedIn could raise about $341 million, but it will also serve as a litmus test for IPOs of other Web-based companies.

Stop Trading: Jim Cramer
CNBC's Jim Cramer weighs in on stocks he has in his crosshairs.

Take Netflix , for example. Like LinkedIn, it has a subscription-based business model, only Cramer on Wednesday said Netflix's model is better. The "Mad Money" host thinks traders will soon take note, sending Netflix shares to its 52-week high and squeezing out the shorts. He thinks Netflix is becoming a powerful brand and recommends investors be careful on the short side.

LinkedIn's IPO is expected to price after the close of U.S. markets on Wednesday and start trading on Thursday.

Elsewhere in the market, Cramer addressed reports regarding a coal shortage in China. Cramer has long been bullish on coal. He said coal is in a super-cycle, so he wants to pick it up when he can.

To play the Chinese coal shortage, he recommends mining equipment maker Joy Global . After all, he said coal miners are going to need to get more out of the ground. He also likes Peabody Energy because it ships coal from Australia to the People's Republic.

Reuters contributed to this report

Call Cramer: 1-800-743-CNBC

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