On Thursday, the rumor mill was swirling over possible merger talks between T-Mobile and Dish Network. As a result, both stocks shot through the roof, which left Jim Cramer thinking—how do you kill a rumor that makes so much sense?
In Cramer's perspective, the merged company would be very attractive. Dish has the spectrum that is desperately needed by a big phone company, along with a television feed. T-Mobile is the most aggressive carrier out there, with the fastest growth, but it needs the spectrum.
"John Legere is a rebel with a cause, aspiring to have the best phone company on Earth. Charlie Ergen is a big thinker who has always tried to make Dish into a powerhouse. Both men are comfortable being in uber-deal mode," the "Mad Money" host said.
And it wasn't the fact that the stocks rallied that indicated that something was happening. Cramer saw signs that a merger might be imminent when cellphone tower stocks like American Tower, SBA Communications and Crown Castle all rallied higher as well.
These stocks have all underperformed lately, but if you take into consideration the merger you can see that these two companies will need all the tower space they can get in order to do a nationwide build out.
"In the end, I think what the market is saying with these moves is that there is an inevitability to the talks that makes them undeniable," Cramer added.
The important thing to note is that when investors see two stocks go up on takeover talks and then stay aloft afterward, this indicates to Cramer that the smoke will ultimately lead to fire.
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Ultimately, they might not be able to agree on a price and the deal could be derailed, but in this case, Cramer thinks the leak of rumors is legit.
"If Ergen and Legere can come to terms, you're going to have a new colossal uncarrier dog with a television tail," Cramer said.
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