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Cramer Doubles Down On Negative Snap Thesis, Praises Instagram: 'You Cannot Compete With Free'

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Cramer Doubles Down On Negative Snap Thesis, Praises Instagram: 'You Cannot Compete With Free'

Jim Cramer described Morgan Stanley's "very devastating downgrade" of Snap Inc (NYSE: SNAP) akin to an "obituary" Tuesday afternoon. He double downed on his thesis Tuesday evening during his "Mad Money" show.

While Snapchat remains popular and "cool" among the coveted teenage demographic group, investors might not care as the company is "anything but profitable," Cramer said. And standing in Snap's way of eventual profitability is none other than Facebook Inc (NASDAQ: FB) CEO Mark Zuckerberg.

In fact, competing against Zuckerberg in the social media space is a game Snap can't win. Facebook has been on a mission to crush its competition and has even given away free advertising spots on its Instagram platform to advertisers who are already paying to advertise on Snapchat.

"One thing we all know: you cannot compete with free," Cramer said. "If you open up a lemonade stand on your corner and you're charging 25 cents per cup and then a young Mark Zuckerberg in a hoodie comes along across the street and starts giving his stuff away, you're done."

Bottom line, Cramer has a clear warning to Snap investors: "You are just going to have to suffer" for what may prove to be a long period of time.

Related Links:

Snap Once Again Atop The Short-Seller Favorites List

Morgan Stanley Helped Bring Snap Public But Now Sees Further Downside To Stock

Posted-In: Instagram Mad Money Mark Zuckerberg SnapChat social media Jim CramerTech Media Best of Benzinga

 

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