Tesla one of the leading manufacturing companies who helped revolutionize the car industry is now under Investigation by the DOJ for possible Criminal Fraud practices. The investigation stems from a previous incident in which CEO Elon Musk announced that he considered taking the company off the public shares market. Taking the company private would allow Musk to take majority control over the company’s operations putting many people’s investments at risk. Elon also announced that he was prepared to take the company private with a buyout of shares at $420 and that funding was already available.
The news came at a complete shock to many shareholders and company executives who hold substantial interests in Tesla. Various lawsuits have been filed by shareholders and with the departure of high level executives; Tesla has seen a substantial drop in stock prices. Though they have not received a subpoena, a spokesperson for Tesla reported that the company did receive a voluntary request for documents from the DOJ and will work in full cooperation with the department. Musk has since retracted his statements finding that the backlash from his announcement had caused major issues for the company in such a short time. The funding that was initially available would have come through a Saudi Arabia’s sovereign wealth fund which has partnered with the CEO in the past. Musk later revealed however that the funding had not yet been secured as previously reported.
The CEO for now has chosen to keep the company public and will attempt to fix the domino effects of his announcement for the direction of the company. The Securities and Exchange Commission is also planning an investigation into those statements in order to verify why they were made if it was done to alter stock prices and shareholders investments. Overall the future of the company still looks bright, as Tesla continues to invest in multiple industries and has become a leading innovator in technology. This set back does however bring into question the direction of the company’s leadership roles and how certain operations are handled.