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Cramer Welcomes Change at BofA, Yahoo!

The board of directors at both Bank of America and Yahoo! was right to fire key executives, Cramer suggested Wednesday, because both stocks were underperforming.

"We want boards of directors to do their jobs. We want them to get impatient," Cramer said. "We want CEOs who have under-performed to feel the heat. We want change when everything seems futile and the stocks are on a one-way trip to a murky bottom."

The market also seemed to agree with the management changes, as both stocks jumped in trading Wednesday.

Bank of America rose 6.9 percent to $7.47 and was the top percentage gainer on the Dow after the heads of its consumer banking and global wealth and investment management units left. CEO Brian Moynihan on Tuesday announced banking chief Joe Price and wealth management head Sallie Krawcheck will leave the company as part of a broad management reorganization. Bank of America has lost almost half of its market value this year.

The problem with BofA, Cramer said, is that it simply became too big to manage. The Charlotte, N.C.-based bank continues to face multiple legacy issues, including bad mortgages and increased regulation. It's also battling lawsuits related to its 2008 purchase of Countrywide, once the nation's largest home lender.

For BofA's stock to turnaround, Cramer said several things need to happen. It needs housing prices to increase dramatically, employment to rebound and an easing of regulatory pressures. Cramer's charitable trust owns the stock, but he thinks it's a tough one to play, even as it's cheap versus its tangible book value.

Yahoo! shares gained 4.6 percent to $13.50 after its chairman, Roy Bostock, abruptly fired CEO Carol Bartz on Tuesday, ending a tumultuous tenure marked by stagnation and a rift with Chinese partner Alibaba. To Cramer, Yahoo! will have a harder time turning its stock around than BAC will.

"When you miss the three biggest online trends of the era--mobile, social and cloud--you simply can’t stay relevant," Cramer complained. "Yahoo! does have a huge installed base, but it’s struggling not to be AOL and trying to keep pace with Google. That’s just not happening."

When it comes to the technology space, Cramer would rather own Google or Apple. The former has mobile, social and cloud platforms while Apple has strength in cloud and mobile. Yahoo! could be interesting on the basis that it might get taken over, but Cramer thinks that's a very risky move to make.

Reuters contributed to this report

When this story was published, Cramer's charitable trust owned Apple and Bank of America

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