Tesla's stock jeopardized by carmaker's covert venture

author: FutureCar Staff    

In a surprising turn of events, Tesla's stock has experienced a remarkable resurgence in 2023, overcoming the challenges it faced in the previous year. Despite a difficult 2022, TSLA has emerged as a standout performer among major tech companies, with its stock price more than doubling since the beginning of the year. This impressive revival has caught the attention of investors worldwide.

However, recent reports suggest that Tesla's stock may be in trouble. On August 30, it was revealed that top US regulators, including the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), have launched an investigation into the company regarding a secret project. The project, internally known as "Project 42," involved the use of corporate funds to build a house for Tesla's CEO, Elon Musk. The US Attorney's Office for the Southern District of New York has requested information about the personal benefits Musk received from the project and the amount of Tesla's investment, as well as its purpose.

The initial reports about "Project 42" surfaced in July, when it was disclosed that Tesla's board members were looking into whether the company's resources were misused on this secret venture and if Musk had any personal involvement. The SEC requires public companies to report transactions over $120,000 in which a top executive receives a material interest. As a result, the securities regulator is now leading a civil investigation into this mysterious project and demanding similar information from Tesla.

Tesla's lawyers and board members began examining the project after employees raised concerns about the company's plans to use millions of dollars' worth of specialized glass. However, the current status of the project and whether the glass was ever delivered to Tesla remains unknown.

As of August 31, Tesla's stock was valued at $256.90, experiencing a slight decrease of 0.11% in the past 24 hours. In premarket trading, the stock slipped by an additional 0.53% to $255.55. Over the past week, Tesla's share price has increased by more than 12%, but its monthly performance shows a negative trend of 4%. However, year-to-date, TSLA remains up by over 116%.

It is important to note that the investigations into Tesla are still in their early stages, and the outcomes are uncertain. At this point, no formal allegations of wrongdoing have been made, highlighting the speculative nature of these inquiries. However, the possibility of regulatory escalation and legal action, should incriminating evidence arise, introduces an element of caution to the otherwise resurgent trajectory of Tesla's stock.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative, and there is a risk of capital loss.

FutureCar Staff