Deals and IPOs

Cramer on recent IPO stumbles: 'These brokers need the money so bad, it's like there's no shame'

Key Points
  • CNBC's Jim Cramer says IPO underwriters are to blame for the recent string of companies stumbling as they go public.
  • "These brokers need the money so bad, it's like there's no shame," the "Mad Money" host says.
  • "This market wants companies that have good growth with dividends and buybacks, not companies that have high growth and big losses," Cramer says.
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Cramer on Peloton: 'I don't want your desperate deal'

CNBC's Jim Cramer criticized IPO underwriters on Friday, saying they are to blame for the recent string of companies stumbling as they go public.

"It's a tragedy what's going on," Cramer said on "Squawk Box." "These brokers need the money so bad, it's like there's no shame. It's time to stop. It's time to cool it."

Cramer's comments come after two key developments Thursday — shares of Peloton dropping more than 11% on their first day of trading and sports and entertainment giant Endeavor Group scrapping its initial public offering.

"Peloton was the wrong place, wrong time, and the brokers act like it was the right place," he said. "This market wants companies that have good growth with dividends and buybacks, not companies that have high growth and big losses."

The underwriters on Peloton included Goldman Sachs and J.P. Morgan — neither of which were available for comment.

The at-home fitness company had one of the worst debuts of the year among IPOs of more than $1 billion — second only to online dentistry firm SmileDirectClub, whose shares slid 28% on their first trading day earlier this month.

Last week, WeWork finally postponed its embattled IPO after investor uproar over the office space provider's sliding valuation and complex corporate governance structure.

"This whole class is turning into a farce," Cramer said, referring the 2019 IPOs. He added, "We need fewer SmileDirects."

However, Cramer was complimentary of Endeavor's decision Thursday to pull its offering in the face of weak demand.

Cramer said the company, which is Hollywood's biggest talent agency, didn't need the $600 million it was hoping to raise, pointing to its strong earnings before interest, tax, depreciation and amortization.

"It shows there is some restraint going on here," the "Mad Money" host said. Goldman Sachs was listed as the Endeavor IPO's lead banker.

Endeavor co-CEO Ari Emanuel was right to "walk away," Cramer said. "Don't do deals here unless you're so desperate, and I don't want your desperate deal."