He also targeted those who called the move transformative and railed against AT&T for taking out heavy debt three years ago to buy Time Warner for $ 85 billion.
“It’s not a business of transformation … it’s the final act of one of the stupidest mergers in recent history.”Bad money“The host said.” The truth is, AT&T made a mindless decision and now they’re paying for it, but in American corporations nobody really pays for it, nobody can say it, nobody can admit it. “”
The WarnerMedia Discovery collaboration will give AT&T shareholders a significant stake in the new company and end AT & T’s experiment with a vertically integrated content and distribution company. AT&T will receive a total of $ 43 billion in cash and debt, and WarnerMedia will retain certain debts under the transactionwhich is expected to close in about a year.
Cramer accused the phone company of buying a media company and criticized former AT&T CEO Randall Stephenson for receiving a $ 64 million retirement package last year.
“Today’s move is a huge rejection of that nonsense. All the talk about synergies and monetizing AT & T’s close relationship with its customers has been utterly chimerical,” said Cramer. “For me this was an enormous destruction of value.”
AT&T shares fell 2.7% to $ 31.37 while Discovery fell 5% to $ 33.85.
AT&T is a cautionary story as to why investors should be careful about owning high-dividend-yielding stocks, Cramer said. AT & T’s return of nearly 6.7% was a sign that something was wrong with the company or the stock would be higher and the yield lower. And many AT&T shareholders own the stock for the dividend, which has been cut in half, he added.
“This is what happens when you run the most heavily indebted company in America. I can tolerate these mistakes Apple or alphabet or Facebook“, He said.” They would never do anything so stupid, but at least they are sitting on piles of cash so they can afford to make mistakes. “
Disclosure: Cramer’s charitable foundation owns shares in Facebook, Apple, and Alphabet.