Jim Cramer Notes Shorts Were Wrong About Wayfair

Wayfair Inc. (NYSE:W) is one of the stocks Jim Cramer put under the spotlight. During the episode, Cramer discussed the company in light of tariff news, as he commented:

“The tariffs, most companies are mitigating them fairly well, not as well as Wayfair, the online furniture store that a lot of wise guys were busy shorting, not realizing that Wayfair may have the single best logistics operation out there, locating low or untariffed merchandise to keep prices down. The shorts thought that Wayfair was hostage to China and other high-tariff countries. They were wrong. And this stock shot up and just gaffed the shorts, I mean, like I haven’t seen in a long time.”

Stock market data showing an upward trajectory. Photo by Burak The Weekender on Pexels

Wayfair (NYSE:W) operates an e-commerce platform that provides furniture, décor, and home goods through multiple retail sites and private-label brands. The company’s online storefronts serve both individual consumers and professional clients. Recurve Capital stated the following regarding Wayfair Inc. (NYSE:W) in its Q1 2025 investor letter:

“We fully exited Wayfair Inc. (NYSE:W) in May after owning it for about four years. We had given the company plenty of rope to right the ship and return to growth, but it has been unable to do so. It is hard to pin down exactly why they’ve been able to gain share (i.e. grow faster than the market, i.e. shrink less than the market), but not grow in absolute terms. The succinct summary is that we believe Wayfair does not have a differentiated enough value proposition to be a secular winner. It can be an “alpha” winner by slightly outperforming its end market, but it is not disruptive enough to grow through choppier periods. We were extra patient with Wayfair because of the exceptionally severe industry headwinds it faced, but enough time has passed to convince us that it is more “alpha” than “secular.”

We sold Wayfair at what was likely an inopportune price during the recent tariff-induced drawdown. However, our approach is to exit whenever we lose faith instead of hoping to sell at a higher price. In truth, this process of losing faith began in the second half of 2024 and it took me a disappointingly long time to arrive here. Even though we lost money on the Wayfair investment, we certainly earned some precious scar tissue that will surely help our idea filtering and portfolio sizing processes in the future.”

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Disclosure: None. This article is originally published at Insider Monkey.