Tesla, Inc. TSLA shares rallied over 15% on Monday following news that CEO Elon Musk has clinched a deal with the Chinese government to roll out full self-driving in the country and transfer data from the country. CNBC Mad Money host Jim Cramer, though not a big fan of the company, lauded Musk’s move.
What Happened: “Elon Musk pulled a rabbit out of the hat. He bagged a terrific one this weekend when he got permission to sell a subscription-based full self-driving for the Tesla giant,” said Cramer on his Mad Money show.
This, according to Cramer, gives a whole new revenue stream for Tesla and can go a long way toward restoring the price momentum after the vicious price-cutting in China.
“He made a surprise trip to China and nailed down a deal. This is unbelievable,” the stock picker said. “Also [a] perfect example of a CEO redefining narrative.”
Cramer also expressed surprise at the ease with which Musk got the deal done with China.
“He got on a plane and made a deal. I can’t think of anything similar in the annals of American business,” he said. Looking back into history, the CNBC host said this was similar to what Armand Hammer did with Russia.
In 1973, Hammer signed a 20-year agreement with the then Soviet Union, which allowed Occidental Petroleum and Tower International — two firms he controlled, to export phosphate, which Occidental mined in northern Florida.
Cramer said, “At that time, there were U.S. troops in Russia fighting against the communists.”
“Of course, I don’t put Xi [Jinping] in the same category but Hammer is the only other executive I can remember who could make a surprise trip to a hostile country and come back with a deal.”
The stock picker also said no one else could have pulled this off, and that’s the reason why shareholders love Musk. The billionaire made fools of “last week’s downgrades,” he said.
Cramer also weighed in on whether the stock move has staying power. “Plenty of people shorted the stock. The stock can keep running until all the shorts are crushed,” he said.
Financial Data Analytics firm S3 Partners’ Ihor Dusaniwsky said Tesla is the third-largest U.S. short behind Nvidia and Microsoft, with $18.53 billion, or 3.97% of its publicly available shares, Reuters reported. Monday’s rally cost short-sellers $2.93 billion, bringing April’s cumulative losses to $2.11 billion. For the year, the shorts are still in black with a profit of $4.1 billion.
See Also: Everything You Need to Know About Tesla Stock
Why It’s Important: Tesla shares have been on a downslide since the middle of 2023 as price cuts announced to lift sagging volume did not produce the desired effect. The company was squeezed by competition in China, one of its key markets, while demand faltered elsewhere.
After reporting a third straight quarter of double miss, the company clarified that it would push forward the launch of next-gen EVs and also lay an accent on its FSD, which it now promotes as FSD (Supervised).
Bullish analyst Daniel Ives said he sees the China FSD approval as a “watershed moment” for the Tesla story.
Tesla ended Monday’s session up 15.31% at $194.05, according to Benzinga Pro data.
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Read Next: Tesla’s Robotaxi Plans: Potential Threat Or Future Partner For Uber?
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