It’s not every day you get to see a $100 billion company being born, Jim Cramer told his Mad Money viewers Wednesday, but that’s what we witnessed after the successful IPO of Rivian (RIVN) – Get RIVIAN AUTOMOTIVE, INC. Report, the electric truck maker that, to date, has only delivered 156 vehicles.
The action in Rivian, which ended its first day up a solid 29%, was partially fueled by the true believers. There are many investors who believe Rivian will become the next Tesla (TSLA) – Get Tesla Inc Report and they’re willing to buy in at any price. This notion may seem like overly-wishful thinking, but Rivian has serious backers, including Ford (F) – Get Ford Motor Company Report, which holds a 12% stake in the company, and Amazon (AMZN) – Get Amazon.com, Inc. Report, which owns 20%.
Amazon, in particular, is interesting, Cramer noted, as the company has already committed to buy as many electric vans as Rivian can produce. But there’s more to Rivian’s successful first day than just optimism. There’s also market mechanics.
Cramer reminded viewers that when money managers want to pile into a hot-new IPO, they need to first raise cash, and that means selling the rest of the market. These funds can never get all of the shares they want, so they’re often forced to complete their positions in the open market, which is why you’ll often see IPOs rise on their first day, only to fall in the days that follow.
These basic market mechanics are why Rivian managed to buck the trend, while the rest of the market retreated after the latest Consumer Price Index was indeed as bad as we feared.
Executive Decision: Biohaven Pharmaceuticals
In his first “Executive Decision” segment, Cramer spoke with Vlad Coric, CEO of Biohaven Pharmaceuticals (BHVN) – Get Biohaven Pharmaceutical Holding Company Ltd. Report, the biotech with shares up 148% over the past two years.
Biohaven just announced a global partnership with Pfizer (PFE) – Get Pfizer Inc. Report to bring its migraine treatment, Nurtec ODT, to patients outside the U.S. Coric said in the deal, Biohaven retains the U.S. rights to Nurtec, but leverages Pfizer’s global presence to commericalize the drug around the globe. He called the partnership a big win for patients and shareholders.
Nurtec remains the only drug approved for both the treatment and prevention of migraine. There is no other therapy that does what Nurtec does, Coric noted.
Biohaven is not stopping with Nurtec however. Coric said the company has a broad pipeline of neuroscience-based drugs in development and it will be using the proceeds from the Pfizer deal to double-down on the efforts.
Executive Decision: Mastercard
For his second “Executive Decision” segment, Cramer spoke with Michael Meibach, president and CEO of Mastercard (MA) – Get Mastercard Inc. (MA) Report, one of the few companies that actually benefits from rising inflation. Shares of Mastercard closed up almost 4% Wednesday.
Meibach explained that Mastercard operates in 211 countries and serves 80 million merchants and over three billion consumers. Mastercard makes payments work around the globe and they make those payments safer for both merchants and consumers.
When asked about the pandemic’s effect on their business, Meibach said that at the onset, discretionary spending stopped, but everyday spending simply shifted from in-person to online. Now that COVID is beginning to recede, travel and cross-border spending is returning, but that online business is here to stay.
When asked about alternative payments like “buy now, pay later” and cryptocurrency, Meibach said that Mastercard is all about giving consumers choices for how they pay for things, but they also believe in the benefits of credit cards, which include zero liability for fraudulent purchases.
Mastercard is ready for crypto and it’s ready for the digital euro, Meibach added, but they also need countries and regulators to agree on exactly what those payments will mean for consumers and for merchants.
Executive Decision: Rockwell Automation
For his final “Executive Decision” segment, Cramer checked in Blake Moret, chairman and CEO of Rockwell Automation (ROK) – Get Rockwell Automation, Inc. Report, hot off the company’s annual investor day. Rockwell is forecasting 14% to 17% organic growth next year, news that sent shares to near all-time highs.
Moret said the power of Rockwell Automation is not in any one machine or process, but rather how all of its machines and software work together to increase output, precision and overall quality.
Rockwell is about a lot more than just robots and hardware. Moret explained that its cloud-native software, services, cybersecurity and consulting services also add a lot of value for customers. In a tight labor market, Rockwell provides hands-on training services as well, ensuring that customers will have the best workers for the job.
Rockwell is also active in recruiting veterans for positions both within the company and with customers. Veterans have all of the required skills, Moret said, and are a great choice for workforce talent.
In his “No Huddle Offense” segment, Cramer returned to the metaverse with his top picks for how to invest in this up-and-coming technology.
The obvious choice is, of course, Meta (FB) – Get Facebook, Inc. Class A Report, which changed its name to show how serious it is about becoming the place for virtual reality education, shopping and entertainment.
The metaverse will be powered by high-end chips provided from Cramer fav’s Nvidia (NVDA) – Get NVIDIA Corporation Report and Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report. It will also include the rendering engines from Unity Software (U) – Get UNITY SOFTWARE, INC. Report.
Investors can also look towards Roblox (RBLX) – Get Roblox Report, which was featured on Mad Money just Tuesday. Roblox already has a metaverse, one that’s filled with great developers with a focus on safety, civility and respect for all those who enter.
Lightning Round
Here’s what Cramer had to say about some of the stocks that callers offered up during the “Mad Money Lightning Round” Wednesday evening:
Veru (VERU) – Get Veru Inc Report: “I think you’re in real good shape.”
Change Healthcare (CHNG) – Get Change Healthcare, Inc. Report: “This is a good, steady company and I’m OK with it.”
Arrival ARVL: “I think we crowned the winner with Rivian (RIVN) – Get RIVIAN AUTOMOTIVE, INC. Report. We’re done.”
Emerson Electric (EMR) – Get Emerson Electric Co. Report: “I’d absolutely add to my position in Emerson. That one is a buy, buy, buy.”
NovaGold Resources (NG) – Get Novagold Resources Inc Report: “It’s had a nice move already. Let’s be careful. “
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