Tesla shares fell in the US Tuesday and are poised to open lower Wednesday as the electric car maker has confirmed it is being investigated by the US Justice Department. The probe is centred on CEO Elon Musk’s tweets saying funding was secured for the company to go private.
Tesla shares ended the US Tuesday trading session lower at $284.96. The stock is currently in the red in pre-market activity.
Tesla under US Federal investigation
After a variety of reports suggested that Tesla is being probed by the US Justice Department over CEO Musk’s tweets, the electric car manufacturer has confirmed that it is the case.
“Tesla received a voluntary request for documents from the DOJ and has been cooperative in responding to it,” the company said. "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.”
Tesla also noted that it hadn’t received any other formal requests, including a subpoena or for a formal testimony.
The criminal investigation follows Musk’s now infamous tweet in August that he was considering taking the company at $420 per share and that funding had been secured. Soon after, Musk announced that the company would remain a publicly listed one after discussions with relevant people suggested that was the best option for the car maker.
The investigation is in the early stages and could take months. However, once the investigation is over, no further action could be taken.
The probe centres on Musk’s tweets that he could take the company private and that he had ‘funding secured’. It’s likely the DOJ would wok to ascertain whether or not those comments were based on fact.
Tesla shares initially rose on Musk’s tweet. However, they have sunk to below the $300 mark since then.