Elon Musk Vs. Jim Cramer: A Story (NASDAQ: TSLA)


Tesla, Inc. (NASDAQ: TSLA) Chief Executive Officer Elon Musk, who has publicly spoken out against the media, government regulators and short sellers on Wall Street, has a new target this week: Jim Cramer.

The Backstory

Musk's broadcasts began last August, when he tweeted on Twitter. Tesla had "obtained financing" to privatize Tesla at a price of $ 420 per share. After the Securities and Exchange Commission investigated the claim, US District Judge Alison Nathan approved a fraud deal between Musk and the SEC, which forced Musk and Tesla to pay $ 20 million each and resign from his position as chairman of the board for three years.

As part of the settlement of the fraud, Musk has agreed that all important Tesla tweets will be approved by Tesla's legal team. As a result of the settlement, Musk then fired at the SEC on Twitter, calling the regulator "the shortseller's enrichment commission." Musk then stated at "60 minutes" that he had "no respect for the SEC".

In February, Musk went back to rock water for tweeting that Tesla would build 500,000 cars in 2019. He then clarified this message by tweeting that Tesla would end in 2019 with an annual production rate of 500,000 cars, but would only produce 400,000 cars this year. .

The SEC then sent a letter to Nathan asking him to sentence Musk in contempt of the court for violating the terms of the fraud settlement.

"Musk had not asked for pre-approval for just one of the many tweets on Tesla that he had published in the months following the entry into force of the orderly pre-approval policy by the court, "says the SEC in its complaint. Musk disputes these claims and argued that the tweets in question do not contain any significant information about Tesla.

Musk Vs. Cramer

Cramer was one of Musk's many targets dating back to the Tesla IPO in 2010. After Cramer had criticized Tesla's business plan, Musk responded to the news. an interview on the air.

"Of course, Jim, we're not Bear Stearns, but I think we're going to get out of it, Jim, I think, recommended Bear Stearns, Lehman, and other things, so, frankly, I think It's a counter-indicator, "said Musk, referring to Cramer. infamous call "Bear Sterns is fine" before the bankruptcy of the company in 2008.

Cramer talked a lot about Musk's recent behavior.

In February, Cramer had said that taking it to the SEC was not a joke.

"If this guy has to attack the SEC, why not take him off? He attacked the SEC," said CNBC host.

On Tuesday, Cramer tore Musk again.

"This judge must either get rid of him or say that the SEC is wrong. But Musk made Judge Nathan crazy, "Cramer told CNBC.

The next day, Cramer said that Judge Nathan had three choices to handle Musk:

  • Appoint a "special master" to Tesla's board of directors to force Musk to comply with the terms of his fraud settlement.
  • Remove Musk as CEO of Tesla.
  • Accuse Musk of criminal violation of the settlement and sentence him to a term of imprisonment.

"If the allegations of the SEC are true, then he spits out essentially in the face of the justice system … [and Judge Nathan] can not just let him violate a court order and get it right, "Cramer said.

Musk Fires Back

Wednesday, Musk replied at one of Cramer's discussions on Tesla on Twitter, which refers to a Wikipedia page describing how Cramer manipulated the stock price through short selling while managing a hedge fund. In the video, Cramer said that everything he had done at the time was legal, but that illegal activities in the hedge fund sector are also commonplace.

Musk then added another tweet: "Jim can not stand the heat."

Cramer replied to Musk via Twitter saying "you're going to make cars, I'm going to do shows !!"

Friday morning, Cramer added a more detailed answer.

"Boss, we both have a lot to do today, but the judge gives you a new lease." Speak to your lawyers, say you're sorry, ask someone to handle your Twitter account and come back to be the big you are an industrialist, have a good time! "Cramer wrote in the tweet.

Critics react

Musk's critics quickly pointed out L & # 39; irony in calling Cramer for market manipulation, since the initial settlement of the fraud was related to charges of alleged manipulation of the market by Musk.

"Jim Cramer, no matter what I thought of him in the past, I thought he had made some very good arguments," said Chris Irons, better known as "Quoth The Raven".

"I actually agree with Elon Musk in his assessment of Jim Cramer as a market manipulator … but I think Musk misses a lot of important points. Nothing says market manipulation like simulating a buyout offer for a $ 60 billion company. "

Regardless of whether or not they stand alongside Musk in the drama, Tesla's shareholders will have trouble doing so in 2019.

Tesla shares are down 19.5% since the beginning of the year and are trading down 2.28% to $ 267.78 at the time of publication on Friday.

Related links:

Tilson Vs. Left: Short sellers invest $ 10,000 on Tesla's profitability

Morgan Stanley limits Tesla's target to $ 260, according to which stocks will remain "volatile"

Photo by Steve Jurvetson / Wikimedia.

Latest TSLA ratings

Date Strengthen action Of AT
March 2019 Morgan Stanley keeps Equal weight Equal weight
March 2019 Barclays keeps Insufficient weight Insufficient weight
February 2019 Canaccord Genuity Upgrades hold Buy

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