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Jim Cramer Shares How He Fell In Love With Tesla

Cars

Published on August 24th, 2020 |
by Johnna Crider

August 24th, 2020 by Johnna Crider 


Jim Cramer, the host of Mad Money on CNBC, just shared how he, a critic of Tesla, fell in love with the company.

In 2019, Cramer announced that he was no longer a skeptic of Tesla — he became a true believer. “I always say stay away from battlegrounds. Owning positive stories with great fundamentals is hard enough. But a battleground? One where you are met with enfilading fire and interstitial machine gun madness, count me out,” he wrote back n 2019. He noted in that piece that he has always been fascinated by companies with “vociferous bulls and bears.” He also broke down the three things that distinguish these particular stocks from regular equities.

The very first thing was the cult aspect. This means that there are many people who love the product itself — and usually not the earnings or the financial aspects of it. “You can’t put a price to earnings ratio on cool, but you might buy cool and therefore want to buy the stock. That had been my stance for years on Tesla. For example: if you like it, you might want to buy the stock but be careful of the balance sheet,” wrote Cramer in that 2019 article.

A Bit Of Background

In his newfound declaration of love, Cramer told TheStreet that he was in a pretty public feud with Elon Musk. Musk belittled Cramer at a dinner party and then tweeted about him. So there was a bit of bad blood there. But as we read on, we can see that not only did Cramer have a change of heart; he was able to do what many fans and critics alike don’t or can’t do — separate the idea of Elon Musk as Tesla.

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While the two are separate entities, they are like a married couple — linked with one another. So one can imagine Cramer’s stance being somewhat affected by his encounter with Elon. However, we’re human and we do make bad first (or second and third) impressions at times. The beauty is that we have the power to choose how we move on. Do we learn and be better, or hold a grudge until the end of time?

Falling In Love

Cramer had two things happen to him that made him have a change of heart for Tesla. The first thing that happened was that his daughter test drove a Tesla and loved the experience. He said that she’d never cared about cars before, but there was something about this car that moved her. He took note. His wife did, too — she drove a Tesla and also loved it.

The second thing that happened, and one that was very important, was when Cramer realized that Tesla’s balance sheet wasn’t an issue. Tesla can raise all the money it needs — and more. “And I’ve been pounding the table ever since,” he shared with TheStreet.

“I should have realized along the way that when Jay Leno told me, ‘Jim, this is the greatest car company I know’ … I should’ve just changed my mind. Why am I fighting the truth? Why am I fighting progress? So, Rob, I surrendered, and it was the best call I’ve made this year.”

Cramer discusses more in his interview with Rob Maurer — a 43-minute long video where topics such as why Tesla isn’t advertising, how successful the Cybertruck will be, and Tesla’s exciting future (its possible S&P500 inclusion and the stock split). One thing from that interview that Cramer pointed out is that Tesla is a technology company even though critics still argue otherwise. “I think it’s just a very good technology stock not unlike NVIDIA, not unlike Microsoft, not unlike Google, not unlike Amazon. It’s in that pantheon,” he said. He compared Jeeps to a Tesla and said that they were great but they are cars. In comparison, Teslas aren’t just cars. “I don’t think that what’s under the hood of a Jeep is as good as what’s under the hood of a Tesla,” Cramer said.

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Of course, we know he was just referring to the mechanical specifics. Under the hood of a Tesla is generally a frunkpuppy for those FrunkPuppyFriday photos that dominate my Twitter feed every weekend.

Regarding the argument of whether or not Tesla is a tech company, let’s take a closer look at those labels.

Wikipedia notes that a tech company is a type of business entity that focuses mainly on the development and manufacturing of technology products or providing technology as a service. Tesla does both. The Free Dictionary points out that a car company makes and sells cars. Tesla does that, too. However, in my opinion the fact that it integrates both makes it more a tech company than a car company.

Further, Tesla is the only automaker that not only provides insurance for its vehicles, but also sells energy products that compete with big oil and utilities. Car companies don’t sell solar or Powerwalls. But a tech company that develops batteries and solar does. 
 


 


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Tags: Elon Musk, jim cramer, Tesla, TheStreet

About the Author

Johnna Crider is a Baton Rouge artist, gem, and mineral collector, member of the International Gem Society, and a Tesla shareholder who believes in Elon Musk and Tesla. Elon Musk advised her in 2018 to “Believe in Good.”

Tesla is one of many good things to believe in. You can find Johnna on Twitter

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