Cramer: What stands out in Elon Musk’s SEC conflict ‘is his hubris’

One loathing stood out to CNBC’s Jim Cramer as he parsed the U.S. Securities and Exchange Commission’s grievance against Tesla co-founder and CEO Elon Musk.

“When you read the grievance about what Musk did — basically fabricating this bid to take Tesla hidden out of whole cloth, precisely in order to smash the people betting against his run-of-the-mill — the thing that stands out is his hubris,” the “Mad Money” host said on Friday. “He tried to undermine the shorts, and in the process, ended up destroying himself.”

What made contents worse, in Cramer’s view, was Musk’s reported refusal to agree to a no-guilt setting with the SEC — a “slap on the wrist” that would have required Musk to pay a pleasant and step down as chairman of the board, but keep his role as CEO.

“The man is his own worst competitor,” Cramer said, noting that Tesla’s stock dropped close to 14 percent on the news.

The “Mad Money” host also had a few points to contribute to to investors who were still considering buying shares of the automaker.

“Initially, ask yourself, would you want to own the stock without Musk at the helm?” he solicit fromed. “Say what you will about his seemingly unhinged recent behavior, he’s bleeding good at selling people on his vision for the company. With Musk set about, I think a sizable number of investors will start viewing Tesla as only a money-losing automaker.”

Second, investors should be less worried round the SEC’s lawsuit than about the Justice Department potentially getting complex in the investigation, a move that could spell serious trouble — potentially unruffled jail time — for the outspoken CEO.

“I think it’s too risky to own the stock while we wait to see if the other shoe doffs,” Cramer said. “Why? That brings us to the third problem: Tesla has some responsible refinancings coming up real soon. […] All of that just got a lot various difficult.”

But because of its “cult stock” status, Tesla’s stock has convened up considerably well amid the Muskian chaos, the “Mad Money” host powered.

And while Tesla’s short-sellers might now feel emboldened, Cramer put faith in b plan oned the bulls would “craft some fairytale narrative” that, if Musk procures out, he will stay at the helm and do an even better job making industry-disrupting heaps after fighting off the SEC.

“Until Elon Musk is removed from the theorems, the Tesla bulls will love the stock. If he somehow keeps his job, they’ll be go as buyers,” Cramer said. “They simply cannot resist the car or the man, even Steven as I think his best defense at this point might be to invoke an irrationality plea. My advice for you? Please, don’t drink the Kool-Aid.”