Tesla Motors (TSLA) shares have performed extremely well over the last 12 months, surging more than 610 percent. It goes without saying that such a price-per-share spike, in combination with the names’s increased visibility lately due to extensive news coverage, is a set-up for more upside. CNBC’s Jim Cramer however, thinks investors who are longing Tesla are “playing with fire,” since the ticker trades like the company has already disrupted the country’s electrical grid.
“The people that are buying these stocks, just know you are playing with fire,” Cramer said on ‘Squawk on the Street.’ “I totally understand. Everyone likes to make money overnight. Just understand you’re playing with fire.”
Tesla shares hit a 52-wkh Wednesday, the day the electric car maker announced plans to issue $1.6 billion worth of convertible bonds, as it looks to shore up its cash position in anticipation of the upcoming Gigafactory. The company wants to build the world’s largest battery factory here in the US and have it operational by 2020. Tesla anticipates investing upwards of $2 billion toward the plant, which it says it should produce enough batteries for half a million Tesla vehicles annually. Cramer called that number “eye-opening,” but said the company’s current share prices are based on “hope.”
Investment in Tesla is based on the belief that Elon Musk (Tesla’s founder and chief executive officer), can “smash the electronic grid” with his battery technology, Cramer said, adding that he would not buy into that option.
“I would not take the option because there are too many fabulous companies that are doing really well and that are dramatically lower in price and aren’t as based on hope,” Cramer said, adding that Tesla “is a press-release company right now.”
Full Cramer clip
Tesla Motors, currently trading fractionally higher at $253.75 per share, has seen its stock advance more than 7-fold in the past year, and 15-fold since its June 2010 IPO.