Tesla Stock Sinks on Reports of New Criminal Investigation


Tesla Inc (NASDAQ: TSLA)

Barely a day after announcing a record quarterly profit that buoyed its shares, Tesla is said to be facing a criminal investigation by agents of the Federal Bureau of Investigation, according to The Wall Street Journal.

Sources familiar with the investigation told the Journal that the FBI is looking into whether executives of the electric-car maker issued false Model 3 sedan production figures stretching that may have misled shareholders.

The investigation stems back to early 2017 when the automaker first started to publicize its Model 3 electric sedans production estimates.

Law enforcement is escalating its efforts by engaging people who previously worked for the company and asking them to testify in the case. It has also subpoenaed some former Tesla employees and is planning to question them.

The agents are primarily concentrating on the wide gap between automaker’s early Model 3s production promises and the current figures. Tesla had promised to produce 5,000 Model 3s every week by the end of last year, but only managed to make 2,700 units.

The company began achieving its 5,000-per-week target in July of this year. WSJ reported that its sources said Tesla’s early production line did not even have a full body shop until late last year.

The Palo Alto, California-based company previously said it forwarded documents to the Justice Department regarding the August 7 “taking Tesla private at $420 per share” tweet by chief executive Elon Musk.

The U.S. Securities and Exchange Commission (SEC) deemed the tweet “false and misleading” and placed a combined $40 million fine in fraud settlement fees on both Tesla and Musk.

The WSJ said the automaker did not immediately respond to its request for comment. The Department of Justice Department and the SEC declined to comment.

Tesla shares traded 6% lower to $319 immediately following the report on Friday, but rebounded closed the day at $330.90. The stock later lost $2.41, or 0.73% to change hands at $328.49 in the extending trading session.

Tesla, Inc. Company Profile

Tesla, Inc. engages in the design, development, manufacture, and sale of fully electric vehicles, energy generation and storage systems. It also provides vehicle service centers, supercharger station, and self-driving capability. The firm operates through Automotive, and Energy Generation and Storage segments. The Automotive segment includes the design, development, manufacture and sale of electric vehicles.

The Energy Generation and Storage segment includes the design, manufacture, installation, sale, and lease of stationary energy storage products and solar energy systems, and sale of electricity generated by its solar energy systems to customers. The company was founded by Jeffrey B. Straubel, Elon Reeve Musk, Martin Eberhard, and Marc Tarpenning on July 1, 2003 and is headquartered in Palo Alto, CA. – CNN Money