Jim Cramer Criticizes FTC Chair Lina Khan Over Impact on Stocks

Television personality Jim Cramer, hosting CNBC's "Mad Money", recently aired concerns that policies enforced by Lina Khan, Chair of the Federal Trade Commission (FTC), could be detrimental to investment portfolios. Cramer highlighted the adverse effects of Khan's strict stance on corporate mergers and acquisitions.

Investor Portfolio Concerns

Cramer points to ongoing resistance to mergers by the FTC under Khan's leadership, which he believes has led to decreased stock values. As an example, he mentioned the potential merger between Nippon Steel and United States Steel Corporation, where the premium offered by Nippon Steel evidenced an underestimation of United States Steel’s value by Wall Street—attributing this trend to an over focus on interest rates by investors.

Potential Benefits of Mergers

According to Cramer, mergers could inject competition into various sectors. He theorized about speculative mergers such as Merck with Bristol-Meyers or Kraft Heinz with Hershey or General Mills, arguing that these would encourage sector-wide competitiveness.

FTC's Battles Against Big Tech

Khan’s approach as FTC Chair has been notably tough on big technology firms. For instance, despite the FTC's efforts to thwart tech-related acquisitions, such as Microsoft's intent to buy Activision-Blizzard and Amgen’s bid for Horizon Therapeutics, these large corporations have pressed on. Cramer suggested that Khan’s actions have inadvertently created a landscape where only the largest companies with robust legal resources can navigate the litigation-heavy process of acquisitions.

The FTC's anti-consolidation stance has also prompted Amazon.com to staff up with former FTC officials in anticipation of antitrust skirmishes, with Khan initiating an antitrust lawsuit against the online retail giant. Such measures reinforce Khan’s dedication to clamp down on corporate consolidation, which Cramer deems misguided, arguing that it benefits only those with the deepest pockets to fight extended legal battles.

Cramer, FTC, Khan