Facebook should ditch its crypto-venture project and buy Square, the payment platform run by Twitter CEO Jack Dorsey who has a market value of $ 34.2 billion and an established bitcoin game, CNBC's Jim Cramer said Wednesday.
Cramer was initially a fan of the Social Media giant planning to enter the digital money market with his announced Libra coin, but changed the course after Big Tech was grilled in anti-trust hearings on Capitol Hill. Facebook should just drop the concept, Cramer said.
"It is clear to do more harm than good," said the "Mad Money" host, addressed the message beyond viewers and Facebook leadership. "Instead, just grab some of your money, you will get into payouts, just buy Square [for] $ 70 billion … [and] blow out Square's payment network worldwide. Square Cash will be Facebook Cash. "
In June, Facebook announced Libra, a collaboration between international organizations, which has drawn skepticism from Washington, DC officials, including President Donald Trump and both sides at a time. Cryptocurrency was the main focus of the company's Global Policy Development Manager, Matt Peraults, in front of the House Judiciary Committees antitrust panel earlier this week.
The hearing, which included Apple executives, Alphabet's Google, and Amazon, follows a $ 5 billion Federal Trade Commission fines issued to Facebook for privacy issues.
"If [Facebook would] just brings in some inaccessible foreign councils with true credibility … then the government might allow them to self-regulate again," Cramer said. He said he is still not worried about the company because "their Instagram business is on fire."
Rest of Technology
Cramer said the risk of Washington regulation over all the big tech companies.
Amazon, which has drastically changed the retail landscape, is in the best shape of the group, Cramer said. E-commerce behemoth, which opens another HQ in Virginia outside DC, has some influence in Congress because it has operations all over the country.
While the company is being investigated by the EU, it made a victory in a settlement with German antitrust officials to change its business terms with sellers using the platform, Cramer noted. Amazon Assistant Secretary-General Nate Sutton was a representative of Tuesday hearings on Capitol Hill.
"I think these changes will immunize the company. For the most part, though, Amazon knows how to play the game," Cramer said.
The alphabet has "real earnings risk here" and resembles the antitrust issue that Microsoft met nearly 20 years ago, Cramer said. With the largest search engine in Google and popular video platform in YouTube, the technology company has a great deal of influence over what the audience sees first when looking for information on the web.
Google, whose director of economic policy Adam Cohen was present at antitrust hearings, is facing allegations of rivalry and conservative disturbances, which may be a matter of freedom of speech, Cramer said. Outside the congressional panel, Google faces new accusations, upgraded by President Donald Trump, from technical investor Peter Thiel to ties with China.
"Unless they can find a way to rid the government, someone will always try to break them up," the host said. "I think there is real earnings risk here. The company needs to find a way to self-examine, not cheap AI, but of expensive people … they lack a powerful, familiar territory that can tell them what's right or wrong. "
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