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we are following breaking news on this Friday Amazon agreeing to buy Whole Foods for 13.7 billion dollars let's talk about it now with Jim Cramer on the floor of the New York Stock Exchange all right Jim take it away it's disruption of society not just disruption this is a what I regard as being a move by Amazon to destroy the margins and owned the business of food and groceries in this country you can't compete with Amazon on price you but the big rap against Amazon was the food could spoil okay they are they needed this level of distribution they remember what they can do they are a technology master they can charge what they want and normal mind they could lose money for years and no one will mind they can wipe out a whole industry everyone's in this industry but no one has been able successful to successfully compete with Amazon when Amazon wants to dominate an industry and I don't think this is going to be any different Walmart will put up a fight that's what Walmart will do everybody else has to think do I surrender do I get out of food how do I make money in food is now the food section of my business is really terrible and let's overlay yesterday's got what happened with Kroger where a pro Gert odd you listen we've got competition coming in from every side you know that Aldi they got little IDL coming in they've got obviously you always have the dollar stores I mean when we own a fraction alerts we're on Walgreens I'm going after you know I'm gonna do noodle on this wool beans walgreens has emphasized food of late maybe that's a mistake so people who are have tried to get food in order to be able to compete with the busy mother on the way home and you know busy parent but that's how they view it have suddenly had a wake-up call and the wake-up call is amazon's in our business and what they can do even if you listen to Kroger they were concerned before what Amazon can do is lose money they can lose money now remember if you're an Amazon Prime what would happen so out there if they say Amazon Prime today eggs are free Amazon Prime today we're giving away no Amazon Prime go into our grocery aisle and you can get a sirloin for free Amazon Prime is the ultimate Club now you take Costco Costco Sat Club absolutely it's a great club then you get very good prices Costco is the one that I think is a plaintiff I don't want to buy any of these right now I wanted I went to dust to settle cuz we've got to downgrade these industries but Costco is the one that you compete for this Avenue they do it on a club basis and they pass the law on prices but food deflation is bad for them they've given you an excellent if you go back to comfortables you had to create a disposition on food deflation but this is what I call the most ultimate disruption that I have seen in in industry one company coming in now there's only four hundred plus stores a Whole Foods okay but they had a roadmap to do 1200 activists came in wanted me what uh one of the things that Whole Foods prides itself is they make the most money per square foot of a of any retailer now Amazon doesn't need to do that obviously now Whole Foods has a great rep prep prepared foods prepared foods was something that obviously Amazon couldn't do right remember we think about what Amazon couldn't couldn't do they could not do prepared food so they could not offer the virtual supermarket online it could only offer them it would really paper towel tie let's think about his paper towel time they were in the dry goods portion of the grocery business they were struggling about how to do the fresh well we know how to do fresh now what does it do for uber do they use uber does someone else to use goober to deliver you can no longer be just you've got to be able to deliver against Amazon that's another problem see if Amazon can't deliver to your house why do you want to stop at the store now Amazon's got another another thing but Amazon's able to do they already have the biggest problem with supermarkets is checkout but Amazon has been perfecting and by the way Diebold Nixdorf is our DVD they also have it but they have been able to perfect this notion of shopping with this so you could go to a Whole Foods breeze right through because you've done you've checked everything and then you're out um so they've got no I mean one of the big problems against Whole Foods has been the lines well we just eliminated the lines technology has eluded Whole Foods one of the things that hopefully was under spent on for a long time was point of sale well you don't have to worry about that anymore because Amazon's the king a point of sale so you've got a club membership that now includes everything it's a consumption driven company amazon is a country and it's the country that offers everything that you need to eat to feed and clothe the family this is a feed and clothe a family situation just incredible and what does this all mean for John Mackey well John Mackey they say it's going to stay you know I don't know John Mackey is what I regard as a materialman water Rob is a steady man water Rob is a great man Royall Rob is a good man I would love to see water IVs the form of coma a Co CL I'd love to see him come back I'd love to see him come back now I could Amazon do a two-class employment situation the Mackey people get paid more and then a new level comes in and gets paid Lester's the whole foods people are paid more than anybody but remember amazon's non-union so they could open a whole new group of whole foods that I believe are non-union and cheaper again you're dealing with a competitor that has scale that has cheap labor that has supply chain management that's the best we've ever seen and they are somebody who if you compete with you can only compete on price and no one has that balance sheet except for Walmart maybe Costco to compete on price against Amazon is to say I'm going to lose money on food for now until the eyes can see so think about it target think about it the dollar store it's going to be very challenging now the dollar stores will say well wait a second our people are not generally Amazon shoppers because they don't they can't afford the prime but I still don't want to be in food uh anywhere and that's what this did mean remember the mall what Amazon did to the mall Amazon is now gonna do to the grocer if you remember there's no given lifespan to a grocery store when I was growing up it was the great Atlantic and Pacific tea company okay and Sears well hey G cradle in Pacific uh uh Sears I don't know I think that Sears they are a chunk of real estate that that Amazon now needs but not in any way that's going to benefit Sears it's just incredible and the other M&A deal that's you know on a much smaller scale Walmart buying bonobos yeah you know I mean look Walmart wants to have an apparel to run through a jet comm and that's fine they've been on my show with Mad Money oh that's fine I mean you know that's fine I gotta flee you know today it's a day the night of the flu okay Anna all right moving on to some other stocks those are not out for Morgan Stanley saying that the Apple pullback is due to overall technically Katy Uberti who's really fabulous and I like her stuff it's not going to necessarily change things right now because we have these stocks are heavy I've been saying that you know we downgraded Apple to a two because we knew that there was just too much play there's too many people talking about a supercycle you know when you have these sellers that come in all you got to do is wait them out and one of the things I learned as a hedge fund manager patience is better patience is our true virtue wait out the sellers just wait them out you'll be fine you'll be fine trying to figure out right now whether I just mentioned Costco on Costco is intriguing to me Costco but Costco Costco Hulu people it's intriguing to me not yet not yet because they you know Costco is a lot of uh uh uh if they can make a lot of deals and they can they have food deflation right now for the food that they have but it's perishables they can come down they might I don't know whether Costco compete with Amazon in getting food but remember because they make their money on the card I'm just noodling about Costco noodling I'm noodley not sure you not sure yet Amazon should go through a thousand all right something to watch yeah definitely also credit squeeze downgraded square gets airfryer's to be such an amazing job their CFO but really kind of runs the place she's just monster good she's out of Goldman she's just one of my absolute favorites I think she does bad we use caviar at bar San Miguel it's a terrific product should we switch to the point-of-sale product I don't know but I do think that Square has moved up from 14 to 24 very fast and that was because there were a lot of sorts and square thinking that their business model which was to lend to small business was dangerous but I've gone over this David vineyards on the board now he used to be the CFO of Goldman and what I look at when I think about that situation assisted square has a very good call when the cash that comes out of the register is that's what they say so it turned out to be the dur model wasn't earliest I see so the shorts have to come in and cover just the way it was square probably too high too far too fast I give it a speeding ticket but it comes back 20 Baba line art and then yesterday we had layoffs announcements at Nike and now the stock has been downgraded with Nike I'm struggling with Nike because I think that the moves are gonna be right but the industry is so competitive it's not like Nike and nobody else adidas came back to life big balance sheet there Under Armour obviously Kevin Pines part of the mix and paying up for endorsements but Nike Europe had been slowing the United States is bad the wholesale change bad it's like he finished no but Nikes gonna have to know it's a Nike reset and I tend not to want to play the recess for a couple of quarters hey Jim what did you make of these snap chairs getting slammed yesterday well you know snap has got 900 million shares that are gonna come off all kind of off Pat and so to speak if you want to look at it like it's gonna be coming to Newark stock I never liked the two classes that no vote I don't like the situations no vote we did a fabulous court with Governor's Conference for this treatment deal III just think that what's happened with square is is that there's going to be tremendous pressure on the stock when that comes in and then we have to rethink I know that dj khaled loves he loves snappy love snap but my problem with snap is Instagram Instagram is so on its game right here so on its game and Mark Zuckerberg is such a laser-like focused guy he's Amazon to Kroger okay they're Kroger I love they wish they were quoted poker is a great American company but there's nothing you can do in the end because Amazon is the Army Navy the Marines okay they're coming in and they're the Air Force and you are cavalry you're cavalry I mean these guys are cavalry I mean you're coming in with cowboy these guys Amazon's mechanized in their cavalry it just doesn't work my grandfather's in the cavalry served with Pershing no go man no go against mechanized Amazon the world we just live in yep exactly right that's why this kids guy should go one through 1,000 should have been below but it's you know it's suey generous is the suit yes we learned at a loss Suey generous no one is like gonna come up with something like this again and what can I say I do love Amazon we all love Amazon we got that button you can press the tie comes now I want the states to come I press the button I went to stink and I went to stake what I really want I went the t-bone okay and I went to t-bone in time because the barbecue is on and I went some charcoal and then boom and it's I mean it's what we've always wanted it's kind of like the Jetsons I mean it's not even worth talking about this but Facebook is now gonna be using artificial Facebook love Facebook but you know Facebook's went you'll remember it's fine whoever created that Fang I want to just demolish him hey you did well he's you know Craver created fat what can you do I always imitated never do always duplicated but never been able to keep I saw someone come up with fam I said ban doesn't stand for anything like it yeah at least got to be illiterate I mean the people who try to come in against me there's a big mode on this stuff no we got Fang and Jim also created candy I created candies in those socks are doing incredible they crush the market even though the team is Decker's I'm being credible and you go to real money dot-com for more on candies indeed and then a big day for for actual arts plus we have the Dow DuPont merger getting oh my god this is so big now look it's not gonna be three different companies well you're relaxed they're gonna spin off as they spin off there's gonna be a lot being done Edie Breen is one of the great value creators I may have to spend time studying Breen this weekend he's a remarkable guy and he's a scrappy guy he's a scrappy guy and he you know Dan Loeb is so like Ethan Dan Loeb is like got a plan and you know what he knows he knows not to press too hard wanted Breen cuz you know ed green brings a gun to a knife fight alright Jim so much for a quiet Friday yeah thank you can't just screw that alright thanks so much Jim for more on Amazon and Whole Foods stay with the street
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