Cramer vs. Cramer: ‘Mad Money’ host changes his tune on Zillow

CNBC talk show host Jim Cramer is known for his loud and outrageous on-screen antics, and earlier this week the “Mad Money” host turned his attention to three real estate companies that recently completed IPOs: Zillow, Trulia and Realogy.

Cramer is pretty adamant that investors should avoid Zillow and Trulia, instead taking a closer look at brokerage house Realogy. But that’s not the most interesting part of this story, since as you’ll see below, Cramer appears to contradict himself in comments he made about Zillow just two months ago.

“Of the three recent housing related IPOs, you need to be careful with Zillow and Trulia,” said Cramer, citing a slowing growth rate in the companies’ revenues and their reliance on online advertising. Strangely, the CNBC news story cites Cramer as saying “stay the heck away” from Zillow and Trulia, while the video and transcript offers the more benign comment of being “careful” when considering the stocks.

Nonetheless, he’s not the first to criticize Zillow. You may recall the highly critical report issued in October by Citron Research, which specializes in shorting stocks. It noted that there are an “array of red flags swarming around Zillow,” pointing out that the company’s “best days are behind it.”

Zillow, in blue, and Trulia, in red. Both companies have seen big stock slumps in the past three months

Interestingly, Zillow CEO Spencer Rascoff appeared on “Mad Money” with Jim Cramer back in September around the same time that the Citron report was issued. Cramer wasn’t too critical at that time, simply asking whether Zillow’s stock was “too hot to handle.”

“I have little doubt that Zillow will wipe the floor of the competition. That’s my take. These online businesses are all about mind share, and Zillow, which has the most users and fastest growth, is the mind share leader. The company has a smart mobile strategy, including a smart app, that’s designed for renters, but man the stock is expensive,” he said.

He concluded after his interview with Rascoff: “Clearly, you have the best story in the group.”

Interestingly, at that time, Zillow’s stock was trading at more than $40 per share. It is now at around $26 per share after getting hammered following its last earnings report.

This week, Cramer countered that the prospects are weakening for Zillow and Trulia, and that the companies don’t have a deep “moat.”

“There’s nothing stopping anyone else from getting in on the action,” he said. “And there are many companies that want in.”

It’s kind of like Cramer vs. Cramer.

Here’s Cramer’s take on Zillow this week, pointing out the weak growth rates from the company’s last quarterly report:

And here’s what he had to say about the company back in September when Rascoff appeared on the show:

  • Richard

    Are you slow or just a bad reporter? “Of the three recent housing related IPOs, you need to be careful with Zillow and Trulia,” that doesn’t mean he likes it. For Cramer be careful and stay the heck away have close to the same meaning. Cramer still doesn’t like Zillow’s stock.

    • johnhcook

      Ugh, did you read Cramer’s comments later in the story when he said of Zillow: “Clearly, you have the best story in the group.”

      So, what is it: Does Zillow have the best story in the group, or should investors be careful and stay away?

      I recognize that things can change over two months, but Cramer appears to be talking out of both sides of his mouth on this one.

      Another example: He said two months ago that Zillow is the “mind share” leader and that really matters with Internet stocks. Then, this week, he comes back and says: “There’s nothing stopping anyone else from getting in on the action,”

      Well, what is it?

      Part of journalism is actually listening to what people are saying, and trying to make sense out of it. With Cramer, it’s a bit hard to tell based on my viewing of the two videos.

  • Nunya Bidnez

    “CNBC talk show host Jim Cramer is known for his loud and outrageous on-screen antics, and complete inability to perform cogent financial analysis…”

    There, I fixed it for you.

  • Bob

    Perhaps the Shareholders Foundation Inc. recently filed lawsuit against Zillow will eventually shed light or provide the public with more info/facts about who’s really being outrageous with claims or blowin smoke with their comments

    • Dunes

      Apologies

      I should have said lawsuits like the Shareholders Foundation lawsuit..others have filed basically the same suit or have announced they are investigating/intend to..