Jim Cramer: AT&T's Balance Sheet Is Now 'Compromised' By 'Expensive' Acquisition Of Time Warner

Jim Cramer isn't the biggest fan of AT&T Inc. T's decision to pursue an acquisition of Time Warner Inc TWX.

For starters, Cramer said that if he were a shareholder of AT&T, it would be to capture the 5 percent dividend yield. However, the price tag on its acquisition now implies that the telecom's balance sheet is "compromised" by the "expensive" acquisition.

"People want AT&T for the dividend. That's why they own the thing," Cramer said. "They don't own it because of growth."

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Cramer said the deal could be in response to the growing threat Time Warner faces by new-age media empires like Facebook Inc FB and Alphabet Inc GOOG GOOGL's Google unit and Amazon.com, Inc. AMZN.

Time Warner is taking a closer look at themselves and realizing they're no longer as relevant as they used to be and combining together would form a strong ecosystem. Meanwhile, AT&T is bleeding market share to rivals T-Mobile US Inc TMUS and Sprint Corp S.

Bottom line, Cramer thinks that old-age media executives are "very East Coast guys who don't really understand the mentality of what Google might be up to."