Jim Cramer is a fan of well-executed spinoffs, so when communications conglomerate RR Donnelley & Sons decided on a three-way split, he was all for it.
But instead of unlocking shareholder value, the new companies' stocks have been tanking in the double-digits, with no clear projections of where their businesses are headed.
"Breakups work when they provide clarity, but they only scare investors away if they actually make the story harder to understand," the "Mad Money" host said.
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LSC shares are down 17 percent since its first trading day, Donnelley Financial's slid 14 percent, and RR Donnelley's stock was essentially slashed in half.
Cramer decided to find out why the promising breakup went astray.
Nearly six months have passed since the divorce, and LSC Communications, the company's printing business, is still getting a wait-and-see response from banks like Wells Fargo, whose analysts initiated coverage with a "market perform" rating two days ago.
When RR Donnelley & Sons first split, Cramer had a wait-and-see attitude too, in the hopes that the company would make some smart acquisitions.
"The difference is that the company's had months to figure things out and they still seem pretty unfocused. It's like there's no sense of urgency here," Cramer said.
And although investors liked LSC's last earnings report, the company recently filed for a secondary share offering so that the RR Donnelley stub could unload its position in LSC, a worrying sign.
Donnelley Financial, the spun-off capital markets branch that deals with financial and regulatory communications for investment firms, was hit by 2016's drop in IPO activity, delivering weak revenues in its last earnings report and disappointing guidance for 2017.
Donnelley Financial also announced a secondary offering that would enable the leftover RR Donnelley to sell its remaining shares of the company.
And RR Donnelley itself has not been a stellar performer. While its latest earnings report beat expectations, management's 2017 sales forecast was flat, which Cramer said "wasn't exactly confidence-inducing."
Not to mention the risk that Federal Reserve interest rate hikes pose to the high-yield business communications company's profits. "No wonder it's been a horror show," Cramer said.
Before the split, Cramer never imagined that the original RR Donnelley could botch a breakup so badly.
"They haven't given us growth targets, they haven't given us guidance, they haven't painted a very good picture of what they'll actually look like going forward," he said.
Instead, the three have created confusion and uncertainty, the market's least favorite attributes.
"Until we get a clearer road map here, unfortunately, I think the stocks will have a very hard time finding bottom," Cramer said.
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