Mad Money

Cramer: Twitter's move into the S&P 500 is a metaphor for where business is headed

Key Points
  • "Mad Money" host Jim Cramer muses on what Twitter's entry into the S&P 500 means for the future of the stock market.
  • Cramer highlights the differences between Twitter and Monsanto, the company that the social media stock will be replacing in the index.
Twitter's move to S&P 500 a metaphor

Sometimes, CNBC's Jim Cramer finds the symbolism on Wall Street to be "downright heavy-handed."

On Tuesday, that came to the fore when Dow Jones Indices announced that the stock of Twitter would replace agrochemical play Monsanto in the index.

"We're right on the precipice of the first generational change in the S&P 500 in ages and I can't help but feel that this is a metaphor for the way these companies are headed," the "Mad Money" host reflected.

Cramer highlighted the market's widespread "skepticism" towards Monsanto, a $56 billion company that pioneered the development of generically modified seeds and GMOs.

Soon to be acquired by Bayer, Monsanto was also held responsible for creating Agent Orange, a pesticide used by the U.S. government during the Vietnam War that was said to have lasting toxic effects on the Vietnamese population.

"How reviled is Monsanto? So reviled that Bayer has chosen to scrap the once-hallowed name of Monsanto itself," Cramer said. "The issue here is progress itself: rightly or wrongly, millennials believe that Monsanto has taken it too far and that natural and organic is the way to go."

Enter Twitter, the $28.5 billion, blue-bird-branded social media play that, unlike Monsanto, makes nothing except for a stagnant platform on which others can express themselves.

But the company's audience has spread from younger generations to baby boomers to even the president of the United States, who takes to Twitter to address the country "totally unfiltered," Cramer noted.

"Think of Twitter as the natural and organic way to communicate," he said. "It's gotten to the point where it's large enough and relevant enough and representative enough of the new economy."

"In the old days, all of this was true for Monsanto, at least after it shed its old-line chemical business and became a seed company with biotech trappings," he continued. "But that's now become old school and Twitter is new school."

The "Mad Money" host added that Twitter has overcome its earlier growing pains, gaining momentum and turning into a fast-growing earnings story on track to profitability.

"So, it's out with the once-thought-of-as-new GMO makers and in with social media," Cramer said. "Social media [is] as loved as GMOs are hated by those who seem destined to take over the earth."

WATCH: Cramer paints a market metaphor using Twitter

Cramer: Twitter's move into the S&P 500 is a metaphor for where business is headed

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