Cramer is an entertainer not a stock guru. However, you have to remember he is a member of the boys club. He has reluctantly decided to put his chips with guys he knows can pound a stock into oblivion. I don't blame him. He is simply taking advantage of his stock pimp background.
I for one don't buy or sell on pimp recs. Cramer will ultimately change his mind again with a "buy, buy buy rec. Of course that won't happen until LINE starts to close in on 30 again.
Cramer ALWAYS dumps stocks of companies that come under question (for illegitimate or legitimate reasons--doesn't matter.) He usually dumps stocks that experience a big drop in share price.
Cramer doesn't want to be associated with anything that is not a current success. That is one reason he tends to pump stocks at their 52 week high and tells people to sell near the 52 week low.
For example, Cramer had the CEO of Herbal Life on Mad Money countless times and always with HUGE praise and the familiar "BUY, BUY, BUY" bit. When the shorts went after Herbal Life, Cramer was nowhere to be found. Ditto BP. Cramer had BP in his Action Alerts portfolio, and if I remember correctly, he blew it out at $30 a share after wildly pumping it in the $60's. That means his subscribers and his listeners bought in the $50's and $60's and sold at $30--if they were dumb enough to still be listening to him at that point. The smart ones held on, bought more at $29, $30, even $32, and then broke even or better when they sold at $48. Still want to listen to Cramer?
Cramer doesn't have your back, and he doesn't care if you lose your money. Keep that in mind the next time you consider buying one of Cramer's stock picks.