Tesla in the Crosshairs, Shopify Pres. Reacts to Tumbling Stock, Reddit Jumps, Uber Falls 05/08/24

David Faber (0:00)

Market insight and analysis. You're listening to the opening bell of CNBC's Squawk on the Street.

Carl Quintanilla (0:11)

Good Wednesday morning, welcome to Squawk on the Street. I'm Carl Quintanilla with Jim Cramer, David Faber's back at Post 9 of the New York Stock Exchange.

Little equity pressure pre-market has some well-known names guide lower. Shopify, Uber, Intel, Twilio, oil below 77 for a moment. That's almost a three-month low. Our roadmap begins with Tesla, though. Under the microscope today is federal prosecutors reportedly examining whether the company committed securities or wire fraud in their autopilot probe.

David Faber (0:36)

Also ahead, we've got some bro stocks that are moving in different directions. Reddit, for example, recent IPO surging. Uber's down sharply. Shopify, really down sharply. The president will join us this hour. And on the AI front, President Biden is going to announce the plans by Microsoft. This is Microsoft money, not federal money. They're going to build a $3.3 billion data center in Wisconsin.

Carl Quintanilla (1:01)

Let's start with Tesla, though. A source is telling Reuters the Justice Department is investigating whether the EV maker committed securities or wire fraud by misleading investors and consumers over its vehicle self-driving capabilities. Tesla's autopilot and self-driving systems assist with things like steering and lane changes but are not fully autonomous. The report also says the SEC is investigating Tesla's representation about driver assistance systems to investors.

So, Jim, I think they're quoting three sources over at Reuters.

Jim Cramer (1:32)

Look, and I know, David, we can go into this. I don't want to... This is obviously serious news. The problem is that I've always found that when you're talking about what the Justice Department is and isn't going to do, it's a really high-risk endeavor. I'm not saying in 902 I should be disputing a story. I'm not disputing a story.

I am saying that the Justice Department examining is very different from the Justice Department indictment.

And I just think I should point that out because it's only fair to do that.

David Faber (1:59)

Without a doubt.

And that's the way it's supposed to work. Investigate, decide whether there is actually something to charge and then do so or don't.

Jim Cramer (2:08)

Right.

David Faber (2:08)

And so this is early Reuters, again, in reading, this is all Reuters reporting, not ours at CNBC. They say investigators are exploring whether Tesla committed wire fraud. They're not saying that they actually did. So, you know, if you're an investor, maybe you take a pause here briefly in terms of digesting this potential news and what it could mean if in fact they were to move forward as an investigation into, as you say, an indictment, but it seems as though it's a ways from that. The SEC also said to be investigating the representations as well around the driver assistance systems.

And again, that's civil.

Jim Cramer (2:44)

Right.

David Faber (2:45)

The other side is criminal. We're serious.

Jim Cramer (2:47)

I mean, Carl, I've covered a lot of stories involving justice. I know a lot of people in the justice department. I just know that the thing that they do not share is that they're going to indict. They could share that they're examining.

They have often said to me, listen, we will not confirm that we're examining.

It's very rare that you actually know their intent, not diminishing what the story is going to do to the stock. It's stock was going to look weaker anyway, because the Chinese story seems a bit of a dodge because we're not ready yet for self-driving there. We're here, Phil La Boa, some excellent reporting this morning, but I just think to sell it on this versus selling on the fundamentals is a mistake because it's a dangerous story, dangerous story.

Carl Quintanilla (3:31)

That's why you would expect Reuters to take caution in reporting it in the first place.

We'll watch it, obviously. The other news regarding Tesla, as you point out, Jim is dispatching a top executive to China, the hopes for unveiling RoboTaxis over there in a certain timeframe.

Jim Cramer (3:46)

Well, I just feel like this sudden story about the excitement of RoboTaxi is not unlike the excitement of RoboTaxi that we saw in San Francisco.

It's not like the excitement that we saw RoboTaxi when Hertz bought, was going to buy 100,000 Teslas. David, the excitement of RoboTaxi is a little bit of sizzle, not a lot of stake at this point anywhere in the world.

David Faber (4:08)

No, well, it doesn't actually exist.

Jim Cramer (4:10)

Right.

David Faber (4:10)

Yeah. But the prospect of it is once again here. Listen, I mean, to connect these two, obviously the SEC and or Justice looking into comments and statements made years ago that indicated, of course, the possibility of full self-driving was around the corner. And by that, I mean very close.