“Rarely do you come across an executive who’s so comfortable in his own skin that he can speak his mind about so many different companies,” the “Mad Money” host said. “Most execs insist they can only speak about their own businesses — they don’t want to step on anyone else’s toes.”
But Malone isn’t one of those executives, and he proved it by drawing the now-pervasive comparison between Amazon and the Death Star, the evil Empire’s battle station in the “Star Wars” franchise that had the power to destroy entire planets.
By using scale, reduced cost and heightened convenience to reach consumers, Amazon is moving “into striking range of every industry on the planet,” Malone said on Thursday.
And to Malone, scale — particularly the kind built on artificial intelligence and fueled by the stock market — will propel the success of giants like Amazon and Netflix in the future.
Backed by money from the market and major film studios, Netflix co-founder and CEO Reed Hastings has developed an international platform that uses AI and price controls to satisfy consumers while giving directors more free will than traditional studios.
“It’s a built-in edge that puts Netflix on the path to world domination,” the “Mad Money” host said. “Netflix will beat anyone trying to scale. They’ve got the directors willing to work for them. And that’s why Malone said ‘it’s way too late’ for the cable companies to band together to stop Netflix.”
While Cramer could argue that both CBS and Fox still have hidden value that could be unlocked by takeover bids, he was more taken by what Netflix may still have to offer.
“If anything, $83 billion seems too small a valuation for Netflix. Do we really think an international content distribution company with local artificial intelligence and the ability to make its own AI-driven programming should only be worth $83 billion?” Cramer wondered. “I could make a compelling case that this worldwide operator ought to be worth a lot more.”
All in all, Malone’s comments about Amazon and Netflix (and the echoes that followed) made Cramer even more bullish on the two companies’ power to defeat any rival with scale, better information and AI.
“Amazon and Netflix are like Big Brother — they know you better than you know yourself. How can anyone beat that?” the “Mad Money” host said. “After watching that interview with Malone, I’ve gotta tell you that, if anything, I think Netflix’s stock is cheap at these levels and I think it can go higher. Maybe much higher.”
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Source: Tech CNBC
Cramer gets even more bullish on Netflix and Amazon after comments from Liberty Media's John Malone