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Jim Cramer calls Tesla bid a desperation move to save SolarCity

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JIm Cramer on Tesla SolarCity deal

The financial markets reacted with a strong dose of negativity after Tesla announced that it is looking to acquire SolarCity in an all stock deal worth $2.8 billion. Tesla stock was down more than 10% at the end of the trading day on Wednesday. On CNBC’s Squawk Box, analyst Jim Cramer — who is a well known Tesla bear —  said “The Kool-Aid tasted really good in Jonestown before it really hit ya.” He was suggesting that Musk’s gambit should be a wake up call to the Tesla faithful who think Elon walks on water and can do no wrong.

“Tesla was obviously desperate to save SolarCity,” TheStreet’s Jim Cramer said on CNBC’s Squawk on the Street. “SolarCity had an existential crisis, that last quarter was the worst I’ve ever seen,” says Cramer. “The quarter was ‘so bad’ that the analysts themselves were in open rebellion, all I can say is that SolarCity would have gone even lower if he hadn’t made this bid,” Cramer said of Musk.

ALSO SEE: Top 8 tidbits around the Tesla-SolarCity deal

RBC Capital Markets analyst Joseph Spak did acknowledge that there are a number of synergies that could help both companies, but he thinks  Tesla shareholders are not going to be happy with the arrangement. “We suspect the market will be more skeptical of the strategic rational and the financial/cash flow strain this could add to the TSLA story. By owning the asset, we believe TSLA may be trying the investing partner approach they have taken with shareholders and asking them to stick with them for something they potentially didn’t sign-up for,” Spak said.

Perennial gadfly Bob Lutz was his usual cranky self. On CNBC’s Closing Bell, Lutz riffed further on the Jim Jones theme. “People finally are beginning to figure it out. They’ve drunk the Elon Musk Kool-Aid. They’ve drunk it long enough and nothing’s working,” Lutz saud. “This deal makes zero sense. It’s going to further put a huge amount of financial pressure on Tesla, which is already in financial trouble.”

The unkindest cut of all came from Bill George, a Harvard Business School professor and former chairman of Medtronic. He told Closing Bell, the SolarCity deal was a “bridge too far.” He is doubtful Tesla shareholders will go along with Musk’s plan. “I think he’s going to have a further comeuppance from his shareholders to Tesla in trying to bail out SolarCity. He says he’s an energy company. I mean, being an automobile company is tough enough,” George said.

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Musk said in a hastily arranged conference call Wednesday morning that the combination of Tesla Motors and SolarCity would result in a trillion dollar company. “I have no doubt about this – zero. We should have done it sooner.” He said the idea had been discussed with major investors several times over the years. “This idea has been bandied about with some of our largest shareholders, institutional shareholders. Yeah, there have been discussions.”

Musk and his bold financial dealings often polarize investors. Some think Musk can do no wrong. Others think he is a charlatan who bamboozles people with his lofty pronouncements. The proposed purchase of SolarCity is no different. As always in the stock market, “you pays your money and you takes your choice.” No one ever forced anyone to buy shares of Tesla Motors. Most people who have are quite glad they did.

Sources: Reuters, CNBC

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Investor's Corner

Tesla welcomes Chipotle President Jack Hartung to its Board of Directors

Tesla announced the addition of its new director in a post on social media platform X.

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Credit: @ArthurFromX/X

Tesla has welcomed Chipotle president Jack Hartung to its Board of Directors. Hartung will officially start his tenure at the electric vehicle maker on June 1, 2025.

Tesla announced the addition of its new director in a post on social media platform X.

Jack Hartung’s Role

With Hartung’s addition, the Tesla Board will now have nine members. It’s been a while since the company added a new director. Prior to Hartung, the last addition to the Tesla Board was Airbnb co-founder Joe Gebbia back in 2022. As noted in a Reuters report, Hartung will serve on the Tesla Board’s audit committee. He will also retire from his position as president and chief strategy officer at Chipotle, and transition into a senior advisor’s role at the restaurant chain, next month.

Hartung has had a long career in the Mexican grill, joining Chipotle in 2002. He held several positions in the company, most recently serving as Chipotle’s President and Chief Strategy Officer. Tesla highlighted Hartung’s accomplishments in a post on its official account on X.

“Over the past 20+ years under Jack’s financial leadership, Chipotle has seen significant growth with over 3,700 restaurants today across the United States, Canada, the United Kingdom, France, Germany, Kuwait and the United Arab Emirates. Jack was named ‘CFO of the Year’ by Orange County Business Journal and Best CFO in the restaurant category by Institutional Investor,” Tesla wrote in its post on X.

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Tesla Board and Musk

Tesla is a controversial company with a controversial CEO, so it is no surprise that the Board of Directors tend to get flak as well. Two weeks ago, for example, Tesla Board Chair Robyn Denholm slammed The Wall Street Journal for publishing an article alleging that company directors had considered a search for a potential successor to Elon Musk. Denholm herself has also been criticized for offloading her TSLA shares.

More recently, news emerged suggesting that the Tesla Board of Directors had formed a special committee aimed at exploring a new pay package for CEO Elon Musk. The committee is reportedly comprised of Tesla board Chair Robyn Denholm and independent director Kathleen Wilson-Thompson, and they would be exploring alternative compensation methods for Musk’s contributions to the company.

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Rivian stock rises as analysts boost price targets post Q1 earnings

Rivian impressed with smaller-than-expected losses & strong revenue, pushing analysts to raise price targets.

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(Credit: Rivian)

Rivian stock is gaining traction as Wall Street analysts raise price targets following the electric vehicle (EV) maker’s first-quarter earnings report. Despite a dip after the announcement, optimism surrounds Rivian’s cost control and upcoming lower-priced cars.

Last week, Rivian reported a better-than-expected Q1 gross profit, surpassing Wall Street’s forecasts with adjusted losses of $0.48 per share against expectations of $0.92 per share. The company also reported a revenue of $1.24 billion compared to the $1.01 billion anticipated.

However, the EV automaker cut its 2025 delivery forecast and capital spending due to President Donald Trump’s tariffs. It explained that it is “not immune to the impacts of the global trade and economic environment.” RIVN stock dropped nearly 6% post-earnings, closing at $12.72 per share.

Wall Street remains upbeat about Rivian, citing progress toward launching lower-priced vehicles in 2026 and effective cost management. On Monday, Stifel analyst Stephen Gengaro raised his RIVN price target to $18 from $16, maintaining a “Buy” rating. He highlighted Rivian’s “solid progress” toward key milestones.

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Conversely, Bernstein’s Daniel Roeska gave RIVN a “Sell” rating. However, Roeska also lifted his Rivian price target to $7.05 from $6.10, acknowledging “better” Q1 results. He warned that profitability remains distant and hinges on multiple product launches by the decade’s end.

Overall, Wall Street’s average price target for RIVN climbed from $14.18 to $14.31, a modest 13-cent increase reflecting positive sentiment. About one-third of analysts covering Rivian rate it a Buy, compared to the S&P 500’s average Buy-rating ratio of 55%.

On Monday, Rivian stock rose 2.7% to $14.64, slightly trailing the S&P 500 and Dow Jones Industrial Average, which gained 3.3% and 2.8%, respectively. The uptick may also stem from broader market gains tied to news of a temporary U.S.-China tariff suspension.

As Rivian navigates trade challenges and scales production at its Illinois factory, its Q1 performance and analyst support signal resilience. With lower-priced EVs on the horizon, Rivian’s strategic moves could bolster its position in the competitive EV market, offering investors cautious optimism for long-term growth.

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Tesla (TSLA) poised to hit $1 trillion valuation again amid reports of Trump China deal

TSLA stock was up about 8% at $322.56 per share on Monday’s premarket.

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(Credit: Tesla)

Tesla shares (NASDAQ:TSLA) are on a tear on Monday’s premarket amidst reports that the United States and China have agreed to significantly roll back tariffs on each other’s goods for an initial 90-day period.

As of writing, the premarket price of TSLA shares suggests that the electric vehicle maker might end Monday with a $1 trillion valuation once more.

Tesla and China

TSLA stock was up about 8% at $322.56 per share on Monday’s premarket. As noted in a report from Barron’s, these prices suggest that the company could achieve a trillion-dollar valuation again, a level not seen since late February. Similar to Tesla, the S&P 500 and the Dow Jones Industrial Average were also up 2.8% and 2.1%, respectively, on Monday’s premarket.

The United States and China’s decision to roll back its tariffs would likely be appreciated by CEO Elon Musk. Despite working for the Trump administration’s Department of Government Efficiency (DOGE), and despite Tesla being least affected by the Trump administration’s tariffs due to its strong domestic supply chains in the United States, China, and Europe, Musk has noted that he is a supporter of non-predatory tariffs.

The United States and China’s Agreement

In a joint statement from the United States and China posted on the White House’s official website, the two countries agreed to lower reciprocal tariffs on each other by 115% for 90 days. This means that the United States will temporarily lower its overall tariffs on Chinese goods from 145% to 30%, as noted in an ABC 12 report. China, on the other hand, will also lower its tariffs on American goods from 125% to 10%.

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The talks were led by Chinese Vice Premier He Lifeng and Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer, as per the joint statement. Bessent shared his thoughts about the matter in a comment in Geneva. “The consensus from both delegations is neither side wants to be decoupled, and what have occurred with these very high tariffs … was an equivalent of an embargo, and neither side wants that. We do want trade. We want more balance in trade. And I think both sides are committed to achieving that,” he said. 

A spokesperson from China’s Commerce Ministry also shared a statement about the matter. As per the spokesperson, the deal was an “important step by both sides to resolve differences through equal-footing dialogue and consultation, laying the groundwork and creating conditions for further bridging gaps and deepening cooperation.”

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