In a remarkable turn of events, Tesla’s (NASDAQ: TSLA) stock has made a triumphant resurgence in 2023, overcoming the hurdles that marred its performance in the previous year.
After a challenging 2022, TSLA has emerged as a standout performer among major tech companies, with its stock price more than doubling since the start of the year, signaling a striking revival and capturing the attention of investors worldwide.
However, the stock of the world’s largest electric vehicle (EV) maker may be in trouble after August 30 reports emerged that top US regulators have launched an investigation into the company over a secret project.
Picks for you
SEC, DOJ probe Tesla’s “Project 42”
Notably, the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are probing Tesla’s use of corporate funds on a secret project that had been internally described as a house for the company’s boss Elon Musk, the WSJ reported.
After finding out about the project, the US Attorney’s Office for the Southern District of New York has asked for information about the personal benefits Musk received, and how much Tesla invested in the project, as well as its purpose.
The initial reports of the project – which requested a large glass structure to be built in the Austin, Texas area – first emerged in July, revealing that Tesla’s board members had investigated whether the EV maker’s resources were misused on a secret venture, internally known as “Project 42,” and whether Musk was personally involved.
The SEC’s regulations demand that public companies report transactions of over $120,000 in which a related party like a top executive, received a material interest.
Now, the securities regulator is also leading a civil investigation into this mysterious effort and is demanding similar information from Musk’s company.
Tesla lawyers and board members examined the project after employees raised concerns about how the automaker planned to use millions of dollars in specialized glass that was ordered. The latest status of the endeavor and whether the glass ever arrived at Tesla remains unknown.
Tesla stock price analysis
At press time on August 31, shares of Tesla were standing at $256.90, down 0.11% in the past 24 hours. The stock slipped by a further 0.53% in premarket trading to $255.55.
The automaker saw its share price jump more than 12% over the past week, while its monthly performance sits at a negative 4%.
Year-to-date, TSLA remains up over 116%.
It’s important to note that ongoing investigations into Tesla are in their preliminary phases, and their outcomes remain uncertain. The absence of formal allegations of wrongdoing underscores the speculative nature of these inquiries.
Yet, the looming possibility of regulatory escalation and legal action, should incriminating evidence emerge, adds an element of caution to the otherwise resurgent trajectory of Tesla’s stock.
Buy stocks now with Interactive Brokers – the most advanced investment platform
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
