Jim Cramer Clashes With WallStreetBets: 'Forget Stocks, It's Too Hard For You'

Jim Cramer has taken a lot of heat from Reddit's WallStreetBets community since they led the charge in targeting the two stocks to trigger short squeezes earlier this year.

"If enough people with enough money start valuing stocks a different way, their new metrics matter, too, even if you think they're absurd," Cramer said June 8 on his "Mad Money" show.

In a slight change of tune, Cramer has recently taken to Twitter to call out WallStreetBets, and point out how company insiders at AMC Entertainment Holdings Inc AMC, Corsair Gaming Inc CRSR and others are taking advantage of the WallStreetBests pump to cash out of their personal holdings.

“Here's a great one--the insiders were ready for @WSB on the Corsair trade. WSB pumped and they dumped like mad. Huge selling right into the spike,” Cramer tweeted.

Why Insider Selling Matters: Company insiders whose compensation includes shares of stock can’t be faulted for selling those shares and raising cash periodically. However, traders watch closely for changes in patterns or unusual insider trading activity.

Large insider buys are reassuring to investors that the people inside the company with the most knowledge and experience have a positive outlook for the business. Large insider sells may be a sign that management’s confidence in the company is waning.

Related Link: Insider Buying Vs. Insider Selling: What Numbers Really Matter For Traders?

Traders drove the price of Corsair to its highest level in months on Monday, but filings subsequently revealed company insiders took advantage of the high share price to dump millions of shares of stock this week.

“The memesters wanted you in Corsair. Even though I like the company I begged you not to fall for their nonsense. The shorts won, you lost,” Cramer tweeted.

AMC Still Standing: AMC and its company insiders have also been taking advantage of the run-up and have been dumping shares of stock hand-over-fist. CNBC reported that 12 AMC insiders have sold shares so far in 2021 compared to just three insider sellers total in the previous four years.

AMC has also been raising billions of dollars by dumping new shares of stock into the market, diluting the ownership stakes of existing shareholders. AMC’s share count is now up a whopping 383% since the beginning of 2020.

Cramer specifically addressed AMC in a tweet on Thursday morning, calling the stock the “last man standing” among so-called meme stocks.

“This would be a good level for $AMC to raise more money... so it can really take advantage of being the last man standing…” Cramer said.

Cramer also didn’t pull any punches when offering advice for WallStreetBets traders.

“@wallstreetbets, just make drawings and post rockets and forget stocks, it's too hard for you... take a course,” Cramer said.

Benzinga’s Take: There certainly appears to be no love lost at this point between Cramer and WallStreetBets. It's unlikely Cramer will abandon his traditional, long-term approach of fundamental business analysis any time soon, and it's equally unlikely the retail traders will give up trying to find the next stonk to pump to the moon.

Photo credit: Tulane Public Relations