When Tesla, the electric-car company controlled by Elon Musk, went public in June 2010, pricing its IPO at $17 per share, Jim Cramer, the ubiquitous and highly confident American TV anchor, proclaimed on his show Mad Money that investors should avoid the stock at all costs. It was a ‘Sell! Sell! Sell!’ Cramer announced in his typical over-the-top, over-caffeinated style. But he wasn’t finished with his diatribe, not by a long shot.
‘You don’t want to own this stock,’ he continued. ‘You don’t want to lease it. Heck, you shouldn’t even rent the darn thing.’ The next day, another CNBC reporter found Musk on the streets of Manhattan and told him what Jim Cramer had said about the Tesla IPO the day before: ‘Our own Jim Cramer said yesterday, “I’m not sure Tesla has a business plan that’s going to work. It’s not a smart investment.” What do you say to the skeptics who look at where Tesla is and the money that you’re raising and say, “They’ve got a nice roadster, but they don’t have a good business plan?”‘
Tesla’s IPO had raised some $225 million (£184 million) and the stock had traded up around 40 per cent on its first day.
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