Jim Cramer Says Capital One's Stock 'May Actually Go Up' After $35.3B Discover Deal: Here's Why

Jim Cramer recently shared his insights on Capital One Financial Corp‘s COF acquisition of Discover Financial Services DFS and its potential impact on the stock market.

What Happened: Jim Cramer, the host of CNBC’s “Mad Money,” took to social media platform X on Tuesday to discuss the ramifications of Capital One acquiring Discover. Cramer said that Discover consistently maintains substantial put and common short positions, suggesting that there’s a chance Capitol One’s stock might rise despite these typical market positions.

See Also: Market Clubhouse Morning Memo

This commentary comes in the wake of Capital One’s announcement of its plans to purchase Discover in a landmark $35.3 billion all-stock transaction. This strategic acquisition aims to reshape the landscape of credit card services in the United States.

Why It Matters: The merger, if successful, has the potential to transform the credit card services landscape in the United States. As per the deal terms, Discover shareholders are set to receive 1.0192 Capital One shares for each share they hold, translating to a 26% premium over Discover’s last closing price.

Additionally, Cramer’s comment aligns with his previous praises for Capital One’s management, specifically CEO Richard Fairbank. In 2023, Cramer had lauded Fairbank’s leadership, calling him an “amazing manager.” His endorsement was echoed by Warren Buffet, who last year opened a position in Capital One through Berkshire Hathaway. 

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