Carl Icahn & ImClone:Erbitux, IMCL’s Cancer Drug, Gets Positive Test Results

Icahn asks permission to buy up to $500 million of ImClone. You might see his bid as similar to what happened with Kirk Krekorian and GM. Wrong. Do not be fooled, Erbitux might not be Avastin. I think this drug is only worth 300-400 million head and neck cancer sales. ImClone, that’s no Genentech. Icahn is no Kirk Krekorian. Icahn’s been in ImClone since 1999 and has made over 400 million on his investment, not bad.

He’s been good about buying low and selling high. If he wanted a bigger position in ImClone he could have just bought 3,000,000 shares on the open market. Instead he publicly announced his plans to buy the stock and he only did it to be an activist a shareholder in ImClone. Bottom line, I don’t trust Icahn in this. His recent deals with Blockbuster and Mylan Pharma, I think you can say they raise eyebrows. There is too much chance that Icahn can mess this company up. I say BEAR – get out of ImClone while it’s up, before Icahn can start pushing them around. SELL SELL SELL.

Q: Does Icahn’s IMCL bid mean it is worth more broken up?

A: Ring the register my friend. I think this is a 300-400 million dollar drug; you got a 3 billion dollar market cap here. I think the play in ImClone has come and gone. If I were you I said sayonara to that.

Q: Is BMY a safer way to play Erbitux than IMCL?

A: If this drug is as big as they say it will actually impact BMY’s bottom line. If it’s not you got the 4% yield to fall back on. BMY just cleaned up a lot of legal problems; it’s not as bad as it used to be. Bottom line: You want to be in Erbitux, be in BMY.

What would it take for you to establish a position in Stemcells?

I don’t like those stocks. We gotta deal with reality. This has been a crummy market for 5 years. As soon I go down and recommend the basement stuff with the STEM’s and GERN’s I get my head taken off and so do you. Bottom line: You want to play this, you go with the BMY.

Cool stuff happening after the bell

Smith Barney, initiates on GOOG. HRB up 8% after the bell on a really big quarter, be careful. Ring the register. AVP did discontinue its mid quarter update policy today, if I were at my hedge fund that would tell me more pain ahead, Ring the register. WFR is the play on the silicon shortage, I think it goes higher.

Altria (MO) – this is getting real interesting

In November the CEO said that it’s basically up to the courts now whether they break up the company and stock. Reiterated in May at the Goldman Sachs conference was that there are only a couple of court cases left that could stop the company from breaking and unlocking value. I’ve got William Ohlemeyer on the phone, Vice President and Associate General Counsel, Altria.

Jim Cramer: Can we feel emboldened that we have substantially accelerated the timetable to perhaps unlocking the value of Altria given the fact that the government’s no longer asking for $130 billion in that racketeering case?

William Ohlemeyer: We are very pleased with the way our defense was presented in the case. I think we’ve made it very clear the government hasn’t proved what they need to prove in this case.

Cramer: When the government decides to knock off $120 billion isn’t that a statement by the government that they don’t even believe in their own case?

William Ohlemeyer: That’s what we told the judge. I don’t know why or how or who decided what to say on their behalf but the law and the facts don’t support the claim for a smoking cessation program, let alone one that costs tens of billions of dollars.

Cramer: There is a case in Florida and a case in Illinois. If those two go away what else is standing in the way?

William Ohlemeyer: The major class action cases are one in Florida and one in Illinois. We are waiting for a decision from the Supreme Courts in both states. We have other cases that are certified as class actions and are in various stages of pretrial proceedings in the appellate courts. These three cases have potential to influence other courts in other parts of the country who are considering similar cases.

Cramer: Here’s the bottom line: This is a timeframe issue. If I were at my hedge fund I’d be making a bet here with one of the highest yielding stocks in the Dow with a company that is clearly more valuable broken up. I think the government is going to lose this case. I think the Illinois case comes down in two weeks, unclear about the Florida one. You need to be in this stock before this stuff happens cause once its broken up…70…80…90…Sold to the other guy!

CRYSTAL BALL:

What’s going on with the dairy stuff in the grocery store? Is there any money to be made there? Evan Morris, a Bank of America analyst who is very good, he hasn’t really cared for Dean Foods (DF) for a long time. What made me interested in it? I make the coffee in the morning and by mistake I put the Silk in it and it didn’t taste any different from regular milk. It looks like DF is breaking itself up. Morris and a couple of other analysts are saying that they are going to get rid of the specialty foods business AND milk prices have come down and they haven’t had to lower prices, raw costs to them good, they are getting good prices. BOTTOM LINE: Even though Dean Foods is at its 52 week high my crystal ball says its going higher.

The Google now trades at 300 piece is all anybody was talking about today

Jim Stewart, SmartMoney Editor at Large, joins Jim Cramer:

Stewart: (In reference to his article questioning whether GOOG was in its own little bubble and his ownership position in the stock)I took enough off to pay for my whole initial investment. My feeling is, why be greedy here. I lived through the bubble, not saying it is a bubble, but we are getting up there in the stratosphere on this thing and I figured why not be a little bit prudent here.

Cramer: If EBAY sells at 55 times earnings and YHOO sells at 84 times earnings, clearly those companies, fast growth. Google growing faster than all of those. If you believe where EBAY and YHOO trading is true then how can you not pay 350 for Google? Tell me why that doesn’t work.

Stewart: There is no question that at this point that GOOG deserves a higher PE than either YHOO or EBAY. But, Google is not going to keep growing at 500% / year. Nothing does, nothing. Here’s another thing that is critical to this analysis. Google’s founders said, and I believe them, that they don’t care about meeting quarterly expectations. They are investing for the long term and I say good for them. But guess what is going to happen the first quarter they slightly don’t meet the expectations they say they don’t care about? It’s gonna be bad. Then I step in and replace my shares.

Cramer: Google vs. Time Warner. Does Time Warner have a bylaw that says its not allowed to go above 17 ¼.

Stewart: I’m not an investment banker but I did some calculations and I came up with Time Warner being worth $23 if you value AOL at 0. ZERO. I think AOL is worth something.

Cramer: Are managers saying that TWX is just too hard?

Stewart: Most people remember AOL Time Warner as the worst deal of the century. Now all those people are gone. They’ve got new management; they’re doing well and have got some great assets. I can’t believe it’s stuck down there but sooner or later I think people will wake up what’s going on.

Cramer: What did you do with your GOOG money?

Stewart: I’m just sitting on it. Neutral on the market here.

Cramer: Bottom line: You know I believe GOOG ultimately goes to 350 but its taking a little detour here, road seems a bit bumpy here. Just follow the cones, go around and eventually you’ll get there.

AM I DIVERSIFIED?

Diversification is the only free lunch. I am determined to get you diversified. You call, mention your top 5 holdings and I let you know whether you are diversified or not.

Portfolio: AV, LU, VZ, JNJ, IR
Answer: No. You don’t have it. AV, LU and VZ are all in telecommunications. Immediate surgery. Sell VZ, get into a diversified financial company, maybe like a Citigroup kind of thing (C). Sell AV, get a defense contractor, LMT type, GE, UTX would do it for you.

Portfolio: AMZN, EBAY, MSFT, STZ, AH
Answer: No. Ouch. We’re fine with AH. STZ is one of my favorite companies. MSFT, even though the stock is glued to 25 I can see has a reason to be in a portfolio. AMZN sell it, you need a big bank that preferably yields more than 3%.

Portfolio: WLP, BDK, QCOM, LLY, HPQ
Answer: Thinking… is HPQ too much like QCOM… no. HALLELUJAH. WLP, like it. BDK, like that stock, looks like its going to 100. LLY, excellent drug company. QCOM is telecom, HPQ is computers they are different enough to bless the portfolio.

Portfolio: AIG, WLT, XMSR, EBAY, TGT
Answer: Hallelujah! Yeah I like it. One of the best retailers, EBAY I like it. XMSR my favorite in the group. WLT interesting construction. AIG I like the tension of AIG I think it could go higher.

After the bell EAT raises guidance

You know I like casual dining, I say next to go is DRI Darden.

Disclaimer: I AM NOT JIM CRAMER. I sometimes write the summary in first person because my brain doesn't quite move fast enough to process and type at the same time, so please excuse that. This blog has no affiliation with Jim Cramer, CNBC, or Mad Money. If you'd like to contact Jim Cramer email him at madmoney@cnbc.com, or call 1-800-743-CNBC. This summary is done for you and I to be able to better track and follow Jim Cramer’s comments. The show goes by quickly so I try and catch as many keywords as possible for each stock because of this, ACCURACY IS NOT GUARANTEED but is however strived for.

NOTE: I've added today's closing price to each of the stocks listed below.
The Lightning Round:

VLCCF - 38.52 - Knightsbridge Tankers Limited - We don't want to own that anymore BEAR
XOM - 56.73 - Exxon Mobil Corporation - Ring the register
BP - 61.05 - BP p.l.c. (ADR) - Ring the register
RD - 58.88 - Royal Dutch Petroleum Company (ADR) - Ring the register
FBR - 13.19 - Friedman, Billings, Ramsey Group, Inc. - BEAR - no
NLY - 19.41 - Annaly Mortgage Management - BULL - Mike Farrell is inside the yield curve
SIRI - 5.83 - Sirius Satellite Radio - You know I like SIRI but the bull play there is XMSR
XMSR - 31.83 - XM Satellite Radio Holdings Inc. - BULL - I like the XM handheld product, battery operated
ATVI - 16.12 - Activision, Inc. - BEAR - I don't like that stock. The only stock in that sector that I'm crazy about is GME, I've been buying that ALL ABOARD
GME - 31.2 - GameStop Corp - I've been buying, all aboard
MCK - 40.51 - McKesson Corporation - Ring the register we like guys with proprietary products
WDC - 15.4 - Western Digital Corp. - Ring the register. We don't like the drives at this point in the cycle
TGT - 53.9 - Target Corporation - BULL - Great retailer, Sell WMT buy TGT
WMT - 47.57 - Wal-Mart Stores, Inc. - Sell this to buy TGT
UGI - 25.68 - UGI Corporation - BULL - I like that stock, I think you should own it
QCOM - 36.93 - QUALCOMM, Inc. - BULL - think its troubles are behind it but you are still one quarter away from the major earnings breakout.
SRNA - 19.45 - SERENA Software, Inc. - Too high risk for me
SPY - 119.91 - SPDRS - This is an individual stock show my friend, not a show about the S&P
RF - 33.5 - Regions Financial Corp. - Another boring financial that I like
PNC - 54.71 - PNC Financial Services - Another boring financial that I like
CMA - 56.74 - Comerica Incorporated - Another boring financial that I like
NCC - 34.05 - National City Corporation - Another boring financial that I like
FHN - 41.18 - First Horizon National Corporation - Another boring financial that I like
CMGI - 1.86 - CMGI Inc. - Quarter just okay, wanted a better quarter. Was at 2.40, now at 1.89. BULL - I think that's way too low. Quarter nothing to write home about but that doesn't mean you gotta stab it in the head
TIVO - 7.22 - TiVo Inc. - Killing me, feels like NFLX did when it was at 11 going to 18. I admit I wished I owned tivo. Don't like the technology.
CSC - 45.29 - Computer Sciences Corporation - Ring the register - I want you out of Computer Sciences - one day you could wake up and that whole company could be taken over by India.
GDP - 20.59 - Goodrich Petroleum Corp. - BULL - lots of insider buying
CHK - 21.08 - Chesapeake Energy Corporation - Let's buy this too - lots of good insider buying
GEOI - 14.54 - GeoResources, Inc. - BULL like it
KWK - 56.76 - Quicksilver Resources Inc - BULL Like it
DQE - 18.7 - Duquesne Light Holdings Inc - Get Texas Utilities instead
DEO - 59.29 - Diageo plc (ADR) - I like STZ, then FO they are both better than DEO
STZ - 28.2 - Constellation Brands, Inc. - Better than DEO
FO - 87.2 - Fortune Brands, Inc. - Better than DEO
ERES - 12.18 - eResearch Technology, Inc - Been cut in half, still seems expensive to me
WB - 50.35 - Wachovia Corporation - Ring the register - I'm not a big Wachovia fan, I think Commerce (CBH) is gonna eat their lunch
MAS - 32.56 - Masco Corporation - When you see Behr paints, that is Masco. BULL - I like Masco
BDK - 87.12 - The Black & Decker Corporation - Like this too
SWK - 44.03 - The Stanley Works - Like this too
PENN - 31.02 - Penn National Gaming, Inc - Nah, come and gone - the whole wagering trend. BEAR
IGT - 28.39 - International Game Technology - Don't like this
BYD - 54.5 - Boyd Gaming Corporation - You know its good
HET - 72.02 - Harrah's Entertainment, Inc. - Like it merging with Caesars
SSL - 25.57 - Sasol Limited (ADR) - Ring the register, liked it in October but here at 25 not for me
IFOX - 11.85 - Infocrossing, Inc. - I don't know - you don't need that
MDRX - 15.51 - Allscripts Healthcare Solutions, Inc. - Bull - two thumbs up, hear its still good
ALEX - 43.41 - Alexander & Baldwin - I like the Maui Pineapple more as a land play, one of the few shipping plays I still like. Not like Knightsbridge, this is bulk shipping.
ET - 13.15 - E*TRADE FINANCIAL Corporation - Mitch Kaplan is as good as it gets, BULL -he is really good and whatever he does will be accretive for shareholders
SRCL - 50.78 - Stericycle, Inc. - Medical waste what's not to like
MERQ - 41.91 - Mercury Interactive Corp. - Very very good company, BULL - really good, not cheap though
TAP - 58.64 - Molson Coors Brewing Company - Jump out the window, I want you to buy BUD, sell TAP
BUD - 47.55 - Anheuser-Busch Companies, Inc. - Buy this instead of TAP
STRA - 84.71 - Strayer Education, Inc. - While I like this, take a look at FMD which I think is cheaper and knocked down
FMD - 36 - The First Marblehead Corporation - think its knocked down
FRK - 67.3 - Florida Rock Industries, Inc. - These will do well when that highway bill is passed - BULL - it’s a rock company, you don't get more basic than that
CDX - 33.47 - Catellus Development Corp (REIT) - What are you an arbitrageur? Sell.
JOE - 79.27 - The St. Joe Company - Swap out of CDX into this
CX - 39.72 - CEMEX S.A. de C.V. (ADR) - I have heard not so good things about this company but there is a cement shortage. I am on the fence. If I owned it I think I'd take a little off the table after this big run.
SEIC - 36.21 - SEI Corp. - BULL - not bad
PAYX - 30.05 - Paychex, Inc. - Good but ADP is better
ADP - 43.07 - Automatic Data Processing - Better than PAYX - BULL

DF - 39.4 - Dean Foods Company - Bottom line - I think its going higher - see comments earlier in show.
MO - 68.75 - Altria Group, Inc. - You need to be in this stock - See comments earlier in show - BULL
BMY - 25.05 - Bristol Myers Squibb Co. - Buy this if you want to play Erbitux
IMCL - 35.27 - ImClone Systems Incorporated - See comments at beginning of the show. Sell.
BDK - 87.12 - The Black & Decker Corporation - Looks like its going to 100
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