Ralph Nader thinks there’s something fishy going on after Tesla’s meteoric stock surge and subsequent sell-off over the past few trading days, and he’s calling on regulators to take a closer look.

“I think the Securities and Exchange Commission should pay attention to the protection of investors here”

“I think the Securities and Exchange Commission should pay attention to the protection of investors here and look in to see whether there’s insider trading, potential market manipulating or even the ability to clear the transaction,” Nader said in an interview with CNBC.

Nader did not provide any evidence of nefarious dealings amid the stock’s recent volatility that saw it skyrocket over 30% during Monday and Tuesday trading, only to fall 17.2% again Wednesday. Before Wednesday’s drop, Tesla (NASDAQ: TSLA) was up 112% in 2020 alone.

The stock was initially boosted by a strong 2019 4Q earnings report Jan. 29 that saw price per share increase by $2.14. The stock rose 12% in after-market trading that day.

One area of concern for Nader involves a bonus incentive for Tesla CEO Elon Musk. If Tesla can sustain its market cap above $100 billion for both the 30-day and six-month trailing average, along with hitting annual revenue or EBITDA milestones, Musk is entitled to an initial bonus of at least $346 billion in options, assuming his compensation plans holds up in court.

Tesla’s market cap was sitting at $138.6 billion Thursday morning, but there’s no telling if the company can sustain its market cap above $100 billion with how volatile the stock has been. The company first surpassed the mark on Jan. 22, and it briefly surpassed $160 billion amid its wild rally earlier this week.

Nader especially doesn’t think the rally is sustainable, and he thinks short selling is fueling the big swings lately.

“I’m talking about the price of the Tesla stock,” Nader said. “It’s totally in the nosebleed territory. Tesla sold less than 400,000 vehicles last year and its valuation is greater than the combined valuation of Volkswagen and General Motors. That tells you there’s a lot of speculation going on, a lot of short selling — a lot of short covering.”

Tesla has become the No. 1 stock to short, but 2019 wasn’t kind to investors using the tactic, reportedly losing $2.89 billion last year as the stock surged.

It wasn’t the first time Nader, a former multi-time presidential candidate, had been critical of the electric automaker. Just after Tesla’s break over $100 billion market cap on Jan. 22, Nader tweeted out a warning: “When the stock market bubble implodes, it will have been started by the surge in Tesla shares beyond speculative zeal.”

“Watch out Tesla believers,” he continued in a subsequent tweet.

The bubble was re-inflating as Tesla stock rallied again Thursday morning with shares running up 8% before settling down a bit in the early afternoon. Shares were up around 3.7% to $760 around 1:15 on the East Coast.

Ralph Nader Tesla