As it becomes less and less likely Tesla will go private at $420 a share, the odds that Tesla or CEO Elon Musk or both will be penalized for saying it would do so have only increased.
The solar power and electric car manufacturer is facing a criminal probe by the Department of Justice, federal officials told Bloomberg, over Musk’s public proclamation on Twitter on Aug. 7 that he had the “funding secured” to take Tesla private at $420.
Tesla confirmed in a statement that it has received a “voluntary request for documents from the DOJ and has been cooperative in responding to it,” according to CNBC, and that “we have not received a subpoena, a request for testimony, or any other formal process.”
Tesla stock soared after Musk’s tweet, growing the company’s market cap by nearly $4 billion until trading was temporarily halted. Those fortunes were more than reversed Tuesday with a sharp drop-off of more than 4 percent. (The company’s market cap currently sits at about $48 billion, a drop of more than $10 billion from last month.)
The DOJ probe is in addition to two separate civil investigations by the Securities and Exchange Commission. One, which resulted in a subpoena, is scrutinizing Musk’s tweets, and the other is looking into whether Musk misled investors over Model 3 production.
In a blog seeking to temper outrage after his tweet, Musk said the Saudi Arabian sovereign wealth fund had approached him “multiple times about taking Tesla private,” thus justifying his “funding secured” claim.
Tesla’s board of directors nixed any such notions after a meeting later that month. The possibility was further disqualified Monday, with the news that the Saudi sovereign fund is investing $1 billion in Lucid Motors, a rival electric vehicle startup.
The board has reportedly stepped up its search in recent months for a No. 2 executive to help lift some of the load at Tesla, where the strain of a year that Musk described in a New York Times interview as “excruciating” has more than started to show.
In July the CEO embarked on a diversion to Thailand, where he proceeded to accuse a British rescue diver of being a “pedo guy” after the diver helped rescue a team of trapped soccer players from a flooded cave.
Musk apologized for the claim, then said it was “strange” the diver hadn’t sued him and later referred to the diver as a “child rapist” in an email to BuzzFeed News. (The diver, Vernon Unsworth, has since filed suit.)
Musk continued his string of questionable behavior this month when he appeared on comedian Joe Rogan’s podcast and proceeded to smoke what Rogan said was marijuana: