Tesla Shares Crash by a Whopping $105 Billion in a Single Day After CNBC Host Jim Cramer Said “Tesla Could be the Next $1 Trillion Company” – Inverse Cramer Strikes Again

Tesla stock has been riding one of the most exhilarating bull runs in the company’s history. In the last month alone, the EV maker’s stock price has surged by a whopping 50%.

In the middle of the trading day today, Tesla shares reached a peak of $270 a piece, a remarkable increase from the $144 per share low hit in late April.

Tesla stock also recorded 11 straight days of gains, nearing its all-time high of 13 days straight green days.

As Tesla’s stock was going on this historic run, CNBC financial host Jim Cramer repeatedly said that Tesla was not a good investment and that he would rather invest in General Motors shares than put his money into the Austin, Texas, EV maker.

However, late last night, Jim Cramer changed his tune about Tesla, stating that the EV maker could be one of the companies to reach a $1 trillion dollar market cap.

Normally, a famous financial personality giving support to a company would be considered a good thing; however, Tesla investors immediately knew Jim Cramer’s support meant trouble for the stock.

Before we proceed, let me introduce you to “Inverse Cramer.” The idea of Inverse Cramer was coined after the CNBC host made some questionable predictions about the financial market.

Jim Cramer advised investors to buy Bear Stearns days before the investment bank went under and set off the 2008 financial crisis.

On top of that, over the years, Cramer has made several big blunders, including promoting FTX, the crypto exchange company, just before its founder was indicted for fraud. The company vanished, losing billions of dollars for its investors.

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Given some of the large blunders Jim Cramer has made throughout his career, people in the financial world started to imagine investing in the opposite of what Jim Cramer recommended.

The idea is that if Jim Cramer says to buy a stock, you sell it, and if Cramer says to sell a stock, you buy it. An index fund was created, investing in the opposite direction of Cramer's suggestion, and the index fund outperformed the S&P 500.

This is the story behind how Inverse Cramer came to be. However, going back to today and Tesla, once the CNBC host came out in support of the EV maker, the company’s investors knew it was trouble.

Lo and behold, on the first trading day after Jim gave Tesla his stamp of approval, Tesla's stock price reversed its trend and crashed 8.5% in a single day.

As the trading day started, Tesla’s stock rose to a peak of $270 per share, which was up from the opening price of $263 per share. However, within a few hours, Tesla crashed and closed the day trading at $241 per share.

From the $263 opening price, Tesla is down 8.5%. However, if you calculate from the intra-day high of $270, Tesla stock is down 11%. Multiplied by the 3.2 billion Tesla shares outstanding at its peak today, the EV maker was valued at $860 billion.

However, within a few hours, Tesla lost $105 billion in value, and the stock closed at a $755 billion market cap. The loss also appears to be continuing into after-hours trading, and the EV maker’s shares have slid to $238 per share as we speak.

I Was Recently Laid Off From Tesla, but I Put 100% of My Severance Pay Back in Tesla Stock – Now I’m Celebrating @Tesla @elonmusk #Tesla
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— Torque News (@torquenewsauto) July 10, 2024

To put this into perspective, Tesla's market cap loss today is more than that of General Motors and Ford’s entire market cap combined. It’s difficult to wrap your head around this news, and Tesla investors worldwide expressed their shock at the brisk reversal in the stock trend.

Overall, it’s good to remember despite this challenging day, Tesla's stock price was growing at an amazing pace and it’s understandable that after so many green days, some investors might want to take out some of their winnings.

Even after today’s reversal, Tesla stock is still up 41% in just the last month. In the next few weeks, Tesla is also expected to post strong Q2 2024 financial results, which has the potential to reignite the bull run once again.

Currently, this is all the information we’ve; however, we’ll be sure to keep you posted as the volatility in Tesla stock continues. 

Until then, make sure to visit our site, torquenews.com/Tesla, regularly for the latest updates.

So, what do you think? Are you surprised Tesla stock immediately collapsed after Jim Cramer gave it its stamp of approval? Also, what do you think is behind Tesla’s massive stock crash today? Let us know your thoughts in the comments by clicking the red “Add new comment” button below.

Image: Screenshot from CNBC’s YouTube channel

For more information, check out: I Was Recently Laid Off From Tesla, but I Put 100% of My Severance Pay Back in Tesla Stock – Now I’m Celebrating

Tinsae Aregay has been following Tesla and the evolution of the EV space daily for several years. He covers everything about Tesla, from the cars to Elon Musk, the energy business, and autonomy. Follow Tinsae on Twitter at @TinsaeAregay for daily Tesla news.