Why Jim Cramer Is Worried About Bristol-Myers Bid to Buy Celgene: TheStreet: Investing Strategies

Published on 3 January 2019

Jim Cramer's back and ready to discuss the markets. At the open, the Dow Jones Industrial Average slumped 337 points, or 1.44%, to 23,009, the S&P 500 was down 1%, and the Nasdaq declined 1.26%. 3:35 Bristol-Myers Squibb's Buying Celgene for $74 Billion Bristol-Myers said Celgene investors would receive one Bristol-Myers share and $50 in cash for each Celgene holding, as well as a special rights issue that will pay off if the merged group meets certain business targets. The deal values Celgene at $102.43 each, the companies said, a 53.7% premium to Wednesday's closing price. The combined group -- which will be 69% owned by Bristol-Myers -- would have a portfolio with nine drugs that generate more than $1 billion in sales, the companies said. "Together with Celgene, we are creating an innovative biopharma leader, with leading franchises and a deep and broad pipeline that will drive sustainable growth and deliver new options for patients across a range of serious diseases," said CEO Giovanni Caforio. "As a combined entity, we will enhance our leadership positions across our portfolio, including in cancer and immunology and inflammation. https://www.thestreet.com/investing/e... 0:18 The Rotten Apple? After the bell on Wednesday, the Real Money Stock of the Day said -- through an open letter attributed to Tim Cook -- it now expects December quarter (fiscal first quarter) revenue of $84 billion. That's down about 5% annually and below prior guidance of $89 billion to $93 billion, as well a FactSet analyst consensus of $91.3 billion. The guidance cut comes after a number of iPhone suppliers, including Cirrus Logic, Lumentum , Qorvo, Japan Display and AMS, had issued sales warnings and/or below-consensus guidance. Together with a market sell off, iPhone sales worries had weighed heavily on Apple's shares in November and December. Apple added that macro pressures (heightened by trade tensions) weighed on its Chinese sales, as did a "particularly sharp" contraction in the Chinese smartphone market. Competitive pressures might also be a factor -- Chinese OEMs such as Huawei and Xiaomi have been taking share in the broader smartphone market, and trade tensions could be impacting the buying decisions of Chinese consumers. https://www.thestreet.com/opinion/app... Apple is a holding in Jim Cramer's Action Alerts Plus portfolio.