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Cramer’s Groupon IPO Strategy
CNBC.com | October 27, 2011 | 06:34 PM EDT

Groupon is the most hyped and artificial IPO since the dot com era began, Cramer said Thursday. While you can make some money off the initial surge, it's not a name he wants you to own.

“The Groupon IPO is very much a product of the Wall Street promotion machine,” he said. “I think you'll get an initial pop, but after that you don't want to be left holding the bag.”

The “Mad Money” host said more than just that promotion will factor into the first day spike. Groupon, which prices next week, is yet another example of these “sliver deals”—where a company offers a tiny amount of stock to “deliberately make people salivate.”

We’ve seen it with LinkedIn , HomeAway and Zillow , which all had big gains on the first day. LinkedIn and HomeAway are now down 10 percent from where they started trading in the aftermarket. Zillow is down 20 percent.

“Groupon is like these other deals, but on steroids,” Cramer said. The company is only selling 34.5 million shares, or 5 percent of the company.

Cramer also warned homegamers to be skeptical of Groupon’s business pitch. In fact, he wonders if the company has already peaked, since it recently said it was slashing valuation to a range from $10 to $11.4 billion. Just a few months ago, people were talking about Groupon as a $30 billion company.

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