The Federal Reserve is at war with inflation, and Wednesday it lost another battle, as the latest Consumer Price Index reading came in red hot, Jim Cramer told his Mad Money viewers. But in the Fed's battle against high stock prices, Wall Street continues to get slaughtered.
The amount of wealth destruction that's now being done in the stock market is getting very real for a lot of people. Cramer dove into some of the biggest losers in the Russell 1000 to put some of these moves into perspective.
The biggest loser in the Russell since November, when the Fed first declared war on inflation, is Carvana (CVNA), down a staggering 89%. Wednesday, the company announced it will be laying off 2,500 employees, as it struggles to survive rising interest rates and soaring used car prices that have shut out many buyers.
Carvana is followed by Upstart (UPST), the lending platform that appeared on last night's show. Shares of Upstart are down 86% since November as loan losses are beginning to mount.
Other notable names making the loser list are Unity Software (U) and electric truck maker Rivian (RIVN), both off more than 80%. Online retailer Wayfair (W) can't seem to find its footing, and investors continue to flee from Netflix (NFLX).
This market is ugly. It's painful. And it's likely not done yet, Cramer concluded, but we are closer to the bottom than we are from those lofty November highs.
Executive Decision: Unity Software
In his first "Executive Decision" segment, Cramer spoke with John Riccitiello, executive chairman, president and CEO of Unity Software, to see if the stock's 80% decline, mentioned earlier, was warranted or an opportunity to buy.
Riccitiello said Unity has continued to grow more than 40% over the past few quarters, but the company has reigned in their guidance, in part due to a programming misstep that reduced their advertising revenues. Riccitiello admitted it was hard to see such a self-inflicted wound, but vowed they will recover.
Outside of the misstep, Riccitiello said the company's core gaming business saw 65% growth this quarter. Unity has also begun cutting back their spending by $100 million, a move which will allow it to become profitable by the end of 2022, ahead of schedule. A leaner and more focused Unity will ultimately be a stronger company, Riccitiello added.
Executive Decision: GlobalFoundries
For his second "Executive Decision" segment, Cramer also sat down with Thomas Caulfield, CEO of GlobalFoundries (GFS), the first in-studio guest on Mad Money in more than two years. GlobalFoundries just delivered an 18-cents-a-share earnings beat with huge gross margins as semiconductor shortages rage on around the globe.
Caulfield said GlobalFoundries is a global semiconductor manufacturer with plants in the U.S., Germany and Singapore. The company has 15,000 employees and is shifting to balanced production across their facilities.
When asked about those facilities, Caulfield said every one of them is running "white hot," with 24/7 production that is over capacity to meet demand as quickly as possible. His company focuses on "feature rich" semiconductors that power everything from autos to 5G wireless products.
Caulfield said the Chips Act, working its way through Congress, is much needed legislation, as the U.S. accounts for 50% of semiconductor demand, but manufactures only 12% of the world's chips. The U.S. needs to be competitive, he said, and that's what the Chips Act will help accomplish.
Executive Decision: Roblox
For his final "Executive Decision" segment, Cramer checked in David Baszucki, founder and CEO of Roblox (RBLX), the online gaming platform beloved by kids and teens.
Baszucki said Roblox remains the place for innovation, safety and civility. People come to Roblox to play, make connections and interact socially, but soon they'll also be able to learn and be entertained as new features get added to their platform.
Roblox has been proactive in policing its community, Baszucki added, and the company isn't waiting for laws and regulations.
When asked about demand, Baszucki admitted there are difficult comparisons to the height of the pandemic, but he said the 18- to 24-year old demographic remains strong, as does areas like Japan and India. More and more companies are joining Roblox and creating their own content, he said, which only makes their worlds richer for everyone.
Lightning Round
In the Lightning Round, Cramer was bullish on Cisco Systems (CSCO), Cheniere Energy (LNG) and The Blackstone Group (BX).
Cramer was bearish on Kohlberg KKR & Co. (KKR).
RH Looks Ahead
In his "No Huddle Offense" segment, Cramer tipped his hat to Gary Friedman, CEO at home furnishings provider RH (RH), for being among the first to see the market decline coming.
Six weeks ago, many investors were still "living the dream," confident that rising interest rates and Russia's war in Ukraine wouldn't derail the markets. But Friedman felt otherwise, sounding the alarm on his company's earnings call that wealthy investors were reigning in spending and supply chains weren't getting any better.
"Gary saw it first," Cramer said. Supply chains have gotten worse, oil and food prices are soaring, and wealthy consumers are cutting back their spending. Shares of RH have retreated to 52-week lows as a result.
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