Last month, Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk tweeted that he had “funding secured” to take the electric car maker private. The stock jumped 10% within minutes.
Tuesday morning, Bloomberg News reported that sources said the U.S. Department of Justice (DOJ) was running a criminal investigation in parallel with the Securities and Exchange Commission (SEC) civil probe.
Tesla confirmed the DOJ investigation following Bloomberg’s report:
Last month, following Elon’s announcement that he was considering taking the company private, Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it. We have not received a subpoena, a request for testimony, or any other formal process. We respect the DOJ’s desire to get information about this and believe that the matter should be quickly resolved as they review the information they have received.
Within days of Musk’s original tweet, he announced that the company indeed would remain publicly traded. His original tweet, he said, referred to what he understood to be a commitment from a representative of the Saudi sovereign wealth fund to repurchase Tesla shares at $420 a piece.
There must have been a failure to communicate. A Saudi sovereign wealth fund on Monday announced an investment of $1 billion in Silicon Valley startup electric automaker Lucid Motors which plans to launch its first vehicle, the Lucid Air, in 2020.
The SEC probe of Musk’s statements on taking Tesla private is focused on whether the company’s CEO was misleading investors. The DOJ investigation could be more wide-ranging and touch many aspects of Tesla’s business.
The company’s stock dropped about 7% following the Bloomberg report and traded down 3.4% just now at $284.92. The stock’s 52-week range is $244.59 to $387.46 and the consensus price target is $322.38. Since Musk walked back his comment about taking Tesla private, the company’s market cap has lost nearly 30% of its value.
24/7 Wall St.[walls_street_signup]
It’s Your Money, Your Future—Own It (sponsor)
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.