Cloud stocks took a tumble during the trading session that was potentially fueled by investment funds raising cash to get ready for the next big initial public offering, CNBC’s Jim Cramer said Thursday.
While the S&P 500 tallied its first six-day winning streak in more than a year, the biggest cloud names were in the red including ServiceNow, which lost more than $10 on the day, and Salesforce, which fell more than $4.
“If you own a diversified portfolio, today was good day, but if you had too much concentration in the cloud names well this was pretty bad day,” the “Mad Money” host said.
Lyft shares, after falling near $66 per share after its public debut Friday, closed up nearly 3% at $72, its initial IPO price.
Cramer said it’s his “biggest fear” that growth funds are selling stocks to prepare for the looming IPOs that will be handled by firms that want to avoid botching the deal as Lyft’s.
“It makes sense when you look at the performance of today’s big deal, Tradeweb, a financial services-slash-technology company that jumped gigantically and in an orderly fashion,” he said. “I think some funds could be selling the cloud stocks so they have capital to participate in these IPOs.”
Get Cramer’s full thoughts here