Tesla plunges after report says US has launched a criminal probe over Elon Musk’s statements

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Markets Insider

Shares of Tesla fell as much as 6% Tuesday after Bloomberg News reported that the company was under investigation by the US Department of Justice over CEO Elon Musk’s public statements, citing two sources familiar with the matter.

The criminal probe comes one month after federal prosecutors also opened a fraud investigation relating to the billionaire’s claims that funding had been secured to take Tesla private at $420 per share. Musk later explained in a blog post that the tweet came after a meeting with Saudi Arabian investors that left him feeling that “no other decision makers were needed and that they were eager to proceed.”

The new criminal inquiry is in the early stages, Bloomberg said, adding that enforcement actions can take months to materialize. Both federal prosecutors and Tesla declined to comment to the news organization.

Tesla’s stock price initially flew as high as $489 per share following the go-private announcement by Musk in August, but has since sank as low as $244 following a slew of investor lawsuits and regulator investigations.

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