Jim Cramer says stay away from stocks after this SPAC
CNBC’s Jim Cramer on Monday told investors to refrain from buying shares of beautiful pictures until the stock falls.
“You have to stay away from any post-SPAC stocks that explode higher right after the merger. The history of these things is really ugly when they come back to earth,”Crazy money” said the presenter.
Getty Images went public this year after announcing in 2021 that it would go public through the SPAC, or special purpose acquisition company, deals with Neuberger Berman and CC Capital. Getty was previously on the public market, before being acquired by a private equity firm in 2008.
Since the announcement SPAC deal completed on July 22shares have rallied significantly, rising from about $9 on July 22 to about $34 on Monday.
According to Cramer, the stock’s rise could be due to SEC filings released shortly after the deal’s close showing that nearly all of SPAC’s investors opted to buy back their shares for cash instead. for taking stock in the new Getty Images. As a result, investors saw an attractive opportunity to create a short-term debt squeeze, Cramer said.
These investors are still trying to squeeze, which is why stocks have continued to rally recently, he said. Shares of Getty were up 10% on Monday.
Cramer added that while the stock isn’t currently being bought, he expects it to drop as the remaining inventors sell off their positions. “Stay away until it cools down,” he said.