Topline
Shares of Tesla plunged Monday morning after a Reuters report alleging the Securities and Exchange Commission is probing claims the electric-vehicle maker failed to properly disclose safety risks associated with its solar panels, adding to a slew of concerns that have tanked the stock’s value since an all-time high just last month.
Shares of the electric-vehicle maker helmed by Elon Musk have plummeted more than 20% since an … [+]
Key Facts
Tesla stock fell up to 5% after Reuters reported the SEC opened the investigation over a whistleblower complaint filed by a former field quality manager in 2019, alleging Tesla and the energy company it acquired in 2016, SolarCity, did not publicly disclose a “liability and exposure to property damage, risk of injury [to] users [and] fire” before the acquisition.
The whistleblower complaint also alleged Tesla failed to tell customers that defective electrical connectors could lead to fires, Reuters reported of the SEC investigation, which marks the agencys first into the SolarCity acquisition that itself sparked a years-long shareholder lawsuit.
The SEC confirmed its Division of Enforcement was still actively investigating the claims in a letter to the whistleblower in late September, according to Reuters, which said it independently confirmed the correspondence.
The Monday plunge pushed Tesla stock down more than 20% from a record closing high of $1,229 on November 4, with the company’s market value plummeting by more than $250 billion over the same period.
Representatives for Tesla and the Securities and Exchange Commission did not immediately respond to Forbes’ request
Key Background
Shares of Tesla have racked up big losses since Musk, the world’s richest person, suggested last month he would sell about 10% of his stake, sparking concerns among investors about how share prices would hold up amid the massive liquidation. Musk has since sold about $11 billion worth of stock, representing about 5% of the shares he owned.
Tangent
Though Tesla CEO Elon Musk initially lauded the SolarCity acquisition in 2016 as “transformational,” a group of shareholders ended up souring on the move, taking the billionaire to court and alleging the purchase was a bailout of a troubled company founded by his cousins. In October, a judge dismissed the direct claims against Musk, but gave shareholders the opportunity to sue him in the future.
Big Number
$977 billion. That’s Tesla’s market value on Monday, down from a record $1.2 trillion in early November. Despite crashing since then, shares are still up about 33% over the past year, compared to nearly 24% for the S&P 500.
Surprising Fact
Though he became the first person ever worth more than $300 billion last month, Musk is now worth about $259 billion, down nearly $7 billion on Monday. To compare, Amazon Founder Jeff Bezos, the world’s second-richest person, is worth about $197 billion.
Further Reading
SEC probes Tesla over whistleblower claims on solar panel defects (Reuters)
After Taking A Thanksgiving Break, Elon Musk Is Back To Selling Tesla Stock (Forbes)
JPMorgan Sues Tesla For $162 Million In Warrant Dispute Tied To Elon Musk’s Tweets (Forbes)
Tesla Stock Wipes $140 Billion In Worst One-Day Decline This Year After Elon Musk Teases Massive Sale (Forbes)
