Screengrab: Twitter/@SquawkStreet
Jim "Mad Money" Cramer has made a career of giving stock market advice in a signature brash style. So it caught everyone off-guard when Cramer teared up on CNBC on Thursday and apologized to viewers for promoting Meta's stock after it plummeted following yet another devastating earnings report for the company. Meta stock reached a peak of nearly $400 per share in 2021, but has been in free fall ever since, amid a wider tech bubble that’s burst in the last year. The company changed its name from Facebook to Meta in 2021, and staked its future on CEO Mark Zuckerberg's dubious vision for a work-centric virtual reality "metaverse." The push for VR has seen Meta's spending balloon while revenues have dropped. This week's earnings report showed that Meta's VR department has lost $9.4 billion this year, with revenues for that department falling 50 percent year over year. The reaction was swift: Shares plummeted by 24 percent on Thursday morning, and analysts slashed their ratings for the company. Cramer has been a defender of Meta, and as recently as June of this year encouraged CNBC viewers to buy the company's stock after interviewing Zuckerberg about his metaverse plans. He appeared chummy with Zuckerberg, saying, "Mark knows I like to garden, I watched a garden” in VR, adding, "Mark Zuckerberg urged me to learn to be more Zen-like," before trailing off and leaving host David Faber baffled. On Thursday's broadcast, he struck a very different tone and said he was wrong to trust the company's executives. "Let me say this: I made a mistake here. I was wrong. I trusted this management team. That was ill-advised. The hubris here is extraordinary, and I apologize," Cramer said. "OK," said Faber. "What did you get wrong?"
Cramer explained that he did not expect Meta to spend as much as it had, calling it "almost a rogue situation."
"What did I get wrong?" he said, visibly choking up. "I trusted them, not myself. For that I regret. I've been in this business for 40 years, and I did a bad job. I'm not proud.""It happens, you know, you have a relationship with people that extend for long periods of time, and you believe what they tell you to some extent," Faber said.
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Cramer explained that he did not expect Meta to spend as much as it had, calling it "almost a rogue situation."
"What did I get wrong?" he said, visibly choking up. "I trusted them, not myself. For that I regret. I've been in this business for 40 years, and I did a bad job. I'm not proud.""It happens, you know, you have a relationship with people that extend for long periods of time, and you believe what they tell you to some extent," Faber said.
Cramer's admission is a stunning moment in Meta's epic fall from grace, which has seen its stock reach lows that it has not seen since 2016. Can the company turn things around? Well, look at how excited it was to announce "legs" coming in a year and decide for yourself.