Am considering taking Tesla private at $420. Funding secured.— Elon Musk (@elonmusk) August 7, 2018
The Criminal Probe
What It MeansHowever, it isn’t really clear what the nature of the investigation is. Sure, Musk’s going-private tweet certainly caught the DOJ’s attention, but the breadth and depth of the probe is pretty much unknown. We don’t even know what documents Tesla was invited to offer. It could be an inquiry into that one tweet, or it could be an inquiry into statements regarding the company’s health, or the resignation of Tesla’s CFO Dave Morton, some at Bloomberg have guessed.
It's also worth mentioning that this isn't the first time Tesla CEO Musk's tweets have put the company in a compromised position. Between the immense pressure of his job, described in a NYT interview, the potential of his other ventures, and his well-publicized preference to run his companies insulated from public scrutiny. (See also: What If Tesla Goes Private?)
But this is only one of three ongoing investigations into the company, from either the SEC or the DOJ. Tesla has recently transitioned from “production hell" to "delivery logistics hell,” according to a tweet from Musk (dude, stop tweeting). Earlier today, news broke that the Saudi Arabia's foreign wealth fund had invested up to $1billion in a Tesla competitor, Lucid. This news came after the fund bought a 3-5% stake in Tesla earlier this year. And Lucid isn't Tesla's only competitor in the electric vehicle market. Today, Audi released their electric SUV, and, though analysts have said the competition doesn't match up, it never encourages investors to be reminded of competition, or a market crowding.
For all these reasons, it's no surprise that the Tesla stock tumbled today, dropping dramatically before recovering some of the losses by the end of day.