Jim Cramer knows no one wants to hear it, but investors shouldn't get caught up in valuations when it comes to an unseasoned initial public offering like Snap.
When a company goes public, often it will hold back stock. In Snap's case, it came public with 200 million shares that trade, and has 1.2 billion that aren't public yet. Thus, the 200 million shares are what's determining the company's $40 billion valuation right now.
"As long as that is the case, we cannot draw real conclusions about what the company might be worth. Once we get the float expanded, and we learn how much advertising love there is for Snap's daily average users, then we will need to think about valuation," the "Mad Money" host said.
Until then, Cramer warned that investors will drive themselves crazy trying to be rigorous about something where rigor doesn't apply.
Watch the full segment here: