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Jim Cramer says Snapchat parent will become the MTV for younger people

An employee wears a Snapchat ghost shirt and Snapchat Spectacles by Snap Inc. while crossing the street outside the company's office in the Venice neighborhood of Los Angeles, California.
Patrick T. Fallon | Bloomberg | Getty Images
An employee wears a Snapchat ghost shirt and Snapchat Spectacles by Snap Inc. while crossing the street outside the company's office in the Venice neighborhood of Los Angeles, California.

Despite the mixed reaction from Wall Street, Snap really is a "must-buy," CNBC's Jim Cramer said on Wednesday.

"I just feel like there is value here. It's not a worthless company by any means," Cramer said on "Squawk on the Street." "You've got to watch what this company's going to do. It's going to reinvent itself as the MTV for younger people and advertisers really want an MTV to throw money at."

Shares of the parent company behind the popular messaging app Snapchat turned positive Wednesday after billionaire hedge fund manager David Tepper said he bought shares of Snap during last week's initial public offering.

Snap surged 44 percent last Thursday from its IPO price of $17 per share, closing at $24.48. The stock surged again on Friday. On Monday and Tuesday, Snap's stock pulled back sharply.

"My youngest daughter loves the thing. Anybody between 12 and 25 loves it," the Appaloosa Management founder said on CNBC's "Squawk Box" Wednesday. "It's kind of anti-Facebook in that generation, too."

Snap has had mixed reactions from the Street and has yet to receive a "buy" rating from any analyst listed in FactSet.

Snap: 6 'sells' and 2 'holds'

Needham - Underperform (Sell)
Atlantic Equities - Underweight (Sell)
Morningstar - (Sell)
Aegis - (Hold)
Susquehanna - (Hold)
Nomura Instinet - Reduce (Sell)
Pivotal Research - (Sell)
CFRA Research - (Sell)

Analysts at Needham initiated coverage of the social media firm's stock with an "underperform" rating, noting the company's total addressable market is 80 percent smaller than Facebook.

"Prospect Theory would label SNAP a 'lottery-like' stock," they said in a note Monday.

(Disclosure: CNBC parent NBCUniversal is an investor in Snap.)