“Just say no to IPOs” – Former hedge fund manager Jim Cramer

CNBC’s “Mad Money” host and former hedge fund manager Jim Cramer is at it again – this time around, the best-selling author and co-founder of TheStreet.com is cautioning you against “blindly” buying into every IPO that hits the markets.

Just a few weeks ago, Jim suggested that investors should refrain from buying shares of the newly listed Peloton, until such a time that the price drops to $4. With an initial pricing of $29, Peloton first hit the market with a slight price drop to $27, before a brief rise, then came another drop…and that has been trend ever since.

According to Jim, Peloton possesses strong growth prospects but lacks earnings at a time when investors wish to see profits.

“This is not the kind of market where you want to rush into a newly minted growth stock, like Peloton. If you think this stock is enticing, just be patient … we’re in a treacherous market for fast-growing companies with big losses,” Jim said. “Until that mindset changes, Peloton will trade like a money-losing exercycle company with no soul.”

But Jim’s issue isn’t just with Peloton – as a matter of fact, he suggests keeping off IPOs at the moment. “Just say no to IPO. The market can’t handle another IPO. There’s just no money around,” Jim said on “Squawk on the Street.” 

Former Nasdaq CEO Bob Greifeld seems to be sharing Jim’s sentiments. Greifeld believes that the IPOs are a reminder of the 90s when the dot-com craze hit the world.

“In a sense, it reminded me of the dot-com era, when you had companies going public that had no known path to profitability,” said Greifeld.

Companies like WeWork are already feeling the wrath of publicity. The firm has been enduring weeks of bad publicity due to its gashed prices, forcing it to let go of more than a third of its workforce (roughly 5,000 people). And even with that, WeWork’s investors don’t seem like a convinced lot with many blaming the company’s top management for the ongoing predicaments.

Cases of slashed valuations are a clear indication that investors need to broaden their investment skills. Companies that were once attractive have been turned to loss-making entities.

Unicorns such as Uber, WeWork, Peloton, and Lyft are just a few of the companies that are struggling to remain afloat since going public, leaving investors and analysts questioning the viability of IPOs.