Cramer reviews GigaCloud, dubs the company's story ‘unnecessarily fraught'

amazon, cramer reviews gigacloud, dubs the company's story ‘unnecessarily fraught'

Rafael Henrique | Lightrocket | Getty Images

  • CNBC's Jim Cramer on Friday reviewed the performance of GigaCloud Technology and suggested that there's "something off" about the situation.
  • "GigaCloud's whole story feels unnecessarily fraught, and with so many good e-commerce and logistics stocks out there —Amazon — I don't think it makes sense to chase this one after a massive run," he said. "Just feels like an unnecessary risk."

CNBC's Jim Cramer on Friday reviewed the performance of GigaCloud Technology, a company that offers business-to-business ecommerce systems for large parcel merchandise, like furniture. He advised staying away from the stock because there's something off about the whole situation.

"GigaCloud's whole story feels unnecessarily fraught, and with so many good e-commerce and logistics stocks out there — Amazon — I don't think it makes sense to chase this one after a massive run," he said. "Just feels like an unnecessary risk."

GigaCloud did not respond immediately to request for comment.

The company connects manufacturers, primarily in Asia, with resellers across the globe. It also sells its own products on the platform as well as on other third-party ecommerce platforms. GigaCloud's stock has soared since it became public in 2022, putting up some great earnings reports, according to Cramer.

But last fall, a report from short seller firm Culper Research called some of the company's business methods into question. The report questioned how GigaCloud could run the many warehouses it claims to have with so few employees, and found that it had used stock images for some of its marketing materials. Culper also claimed an investigator it sent to some of the company's U.S. warehouses observed "laughably sparse activity" there.

Cramer said he thinks GigaCloud never properly addressed some of Culver's allegations. Despite this report, he said, the stock has still managed to climb — however, it plunged mid-February and saw more volatility after its earnings in March.

Cramer was also bothered by the fact that GigaCloud was initially considered a meme stock and said its stock action suggests "somebody out there knows something that I, and we, don't."

"If you take everything about the story at face value, then buying GigaCloud would be a no-brainer," he said. "But after taking a thorough look, I worry there's just something off about this story."

He didn't elaborate, beyond citing the short seller report.

  • CNBC Pro scoured Goldman Sach's May conviction lists for stocks with further upside of 50% or more, based on the bank's price targets.

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