Tesla’s stock (TSLA) has had some great momentum since the company announced a profit earlier this week, but it has since come to a stop due to a report that an FBI probe over Tesla’s reporting of Model 3 production is ramping up.
On top of Tesla’s already outstanding issues with the SEC, the company has also reportedly been in trouble with the Justice Department.
Though Tesla has been rumored to be under investigation for a while.
Last month, the company said that it received “a voluntary request for documents from the DOJ”:
“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.”
Now, the Wall Street Journal reports that there’s “a deepening criminal investigation,” based on unnamed sources.
They wrote that the investigation is ramping up:
“Action in the criminal investigation, headed by the U.S. attorney’s office in San Francisco, has intensified in recent weeks after the Securities and Exchange Commission settled separate civil charges with Tesla and Chief Executive Officer Elon Musk, the people said.”
The issue is reportedly over Tesla allegedly misleading investors regarding of Model 3 production reports.
Tesla set some aggressive goals for Model 3 production in 2017, but the ramp-up turned out to be much more difficult than anticipated.
According to the Wall Street Journal, the FBI is trying to prove that Tesla knew that the goals weren’t achievable.
Update: In response to the report, Tesla says that it hasn’t recieved any formal inquiry over the investigation:
“We have not received a subpoena, a request for testimony, or any other formal process, and there have been no additional document requests about this from the Department of Justice for months.”
I find all of this hard to believe. But if it is true, I think it’s stupid.
Elon Musk sets very ambitious goals. That’s not new. He knows that they are hard to achieve, but he always aspires to make them happen.
I am sure they could find some employees that believed it wasn’t achievable at the time, but it doesn’t mean that Tesla or Musk didn’t see it as a possibility at the time.
Interestingly, this report comes just as Tesla’s stock went on a tear following record earnings… do I need to put on my tin foil hat here?
Let us know what you think in the comment section below.