Jim Cramer on IREN: “Take the Gain”

IREN Limited (NASDAQ:IREN) is one of the stocks Jim Cramer shed light on. Discussing the company’s deal with Microsoft, Cramer stated:

“The super speculative stocks, these remind me of the internet stocks that didn’t make it out of the dot-com era when it came to an ignominious end… I don’t want to repeat that experience. Unfortunately, I seem to be fighting a losing battle. Now, this is a very good company, it’s not fly by night, but it’s called… IREN. It’s formerly known as Iris Energy. It’s a company building data centers for bitcoin mining, AI startups, and, most recently, it got a contract from Microsoft. That’s terrific. But this morning, in order to pay for… data center work that it has to do, it had to issue nearly 40 million shares of $41.12 per share, along with a gigantic $1 billion convertible bond.

Now, IREN’s retiring some previous debt, that’s responsible, but this deal reminds me of exactly what I saw back in 2000 when things were just beginning to unravel… They need to keep raising money if they want to keep building, even if they got an almost $2 billion prepayment from Microsoft at the time the deal was announced. That’s a lot to IREN or any company, for that matter. But if Microsoft decides it’s been overbuilding down the road, it could be one and done. And these data centers are real hard to build…

All I really care about, though, is you and that stock issuance. This time, the deal worked. Terrific. IREN got the money it needed, but does that mean you should hold on to the stock to drop a couple of bucks on it if you bought in on the secondary? Listen, the hyperscalers with deep pockets are now under tremendous pressure for their spending plans. So do you really want to be left holding the IREN bag or any other bags…? Take the gain.”

A laptop and a computer monitor display a detailed stock market technical analysis chart. Photo by Jakub Zerdzicki on Pexels

IREN Limited (NASDAQ:IREN) operates a vertically integrated data center business. The company manages computing hardware and infrastructure while also engaging in Bitcoin mining.

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