The recent Department of Justice (DOJ) probes on Tesla, Inc. (NASDAQ: TSLA), initiated after Elon Musk tweeted about securing private funding, could have big implications. The fact that the probe is happening has already hurt the stock, dropping it 6.6% on Tuesday.
Historically, these probes rarely turn out to be something extreme, but the DOJ will follow any threads that do come up according to former DOJ prosecutor, Paul Pelletier.
The Security and Exchanges Commission (SEC) is also getting involved. The New York Times reports that Goldman Sachs and he private equity firm, Silver Lake, have already received subpoenas from the SEC in regard to their interactions with Tesla.
Tesla is fully cooperating with the DOJ and is saying they have ever only received queries, no subpoenas. The DOJ will look into the recent exit of their Chief Account, who left after only one month. Upon his exit he stated he had “no disagreements with Tesla’s leadership or its financial reporting.”
All this federal attention can’t be good for publicity and has been hurting the Company’s stock. The outcome of this will be key for the future of the Company and Elon Musk’s reputation.