TheStreet.com's Jim Cramer shows you what one company's deal means to its competitor.Buy BEA Systems (NASDAQ: BEAS) (Cramer's Take). That's my takeaway from SAP's (NYSE: SAP) (Cramer's Take) strange purchase of Business Objects (NASDAQ: BOBJ) (Cramer's Take). Why BEAS? Because the Business Objects acquisition by SAP shows a level of desperation that makes me feel that all that matters is that another wave of consolidation is about to take place.
Business Objects is effectively an American company, despite its location in France. Almost two-thirds of its revenue comes from here. SAP can pour on the strong euro and make things happen here that no domestic company can.
So why BEAS? Because BEAS is a direct competitor to Oracle (NASDAQ: ORCL) (Cramer's Take), which is the worldwide nemesis to SAP. If you go listen to the Oracle conference call where they make fun of BEAS, you have to be thinking that if SAP combined the strong -- and I think wildly overvalued - euro with BEA Systems, the Oracle competition won't look as steep as it does now.
BEAS, of course, says it is not for sale. It is still one more company that is stupidly ignoring the buildup of stock by Carl Icahn. My prediction: This ridiculous acquisition of the just-now blowing up Business Objects, a company that was getting its butt kicked, presages another buy from SAP of BEAS, regardless of the sinking in price of SAP's stock, something they knew would happen and did the deal anyway.
BEAS is cheap, with lots of cash and a burgeoning business in China. Business Objects was a much tougher sell.
BEAS is next, in my opinion, and the fact that it hasn't gone higher yet with Icahn's buying is the real opportunity.
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Jim Cramer is a director and co-founder of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. At the time of publication, Cramer had no positions in the stocks mentioned.
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Reader Comments (Page 1 of 1)
10-08-2007 @ 1:43PM
Jon said...
I would not follow ICHAN in any endeavor ... he destroy's companies for profit. ICAHN has been turn away from board seats many times then sells his position and moves on to find another target ... so I would not follow Kramer's advice either ! ! !
10-09-2007 @ 10:15AM
kluji said...
I would not follow cramer let alone ichan!!
10-09-2007 @ 10:15AM
kluji said...
I would not follow cramer let alone ichan!!
10-12-2007 @ 1:12PM
Steve said...
Sorry, I heard about this on Dylan Rattigan's show and each of the commentator's agreed BEAS was a buy.
10-12-2007 @ 1:28PM
belec said...
cramer acts like a guy on drugs. investing is a very serious biz and that ahole behaves like it is a kid's game. only shows how low american journalism has fallen.
as for carl icahn, he's a financial blackmailer going back to the days when is messed up texaco and trans world airline. the media MUST resist the temptation to refer to him as an investor. is there not a law against blackmailing?
the boittom line is cramer and icahn come from the same disturbed tribe.