Jim Cramer's done it again. This time around, it's a frantic, wild-eyed rave against radio companies and radio stocks. In a borderline hysterical rant, Cramer pillories broadcast radio as being the worst of investments.
And the numbers don't lie. As he points out, radio's Wall Street performance has been horrendous. But that's also because the stock pickers just don't understand radio's value in a digital world. Yes, radio's financial effectiveness is being challenged, along with the medium's ability to compete against new technology. But radio is still a great advertising vehicle that puts butts in seats and bodies in stores. That's why radio continues to perform well in medium and smaller markets, where such arcane "metrics" like store traffic and bricks & mortar purchasing means so much.
But the real underlying reason for Cramer's tirade is his defense of the satellite radio merger. And in that regard, he speaks with a forked tongue. In the last three years, XM's stock price has lost about 60% of its value, compared to a nearly 50% dump by Sirius. And when you look at the way these companies have flushed millions of dollars into lavish talent contracts and content, along with questionable advertising and marketing campaigns, it's no secret why they need a government approved merger to survive. Cramer, however, doesn't address these “minor” fiscal issues and extravagances.
And this same guy, who lambastes every aspect of the radio business, goes on "Today" and nearly bursts into tears during a discussion of Eliot Spitzer's inane actions. It's one helluva roller coaster performance. This guy needs to chill.