Tesla (NASDAQ:TSLA) Admits SEC Subpoenas, ‘Nothing’ Musk Calls FBI’s Criminal Probe “Absurd”
US securities regulators have issued subpoenas regarding Tesla’s (NASDAQ:TSLA) public assurances over the production of its newest car the M3, the company said in a filing late Friday, the latest signal of a very aggressive investigation into Elon ‘Nothing’ Musk’s EV maker.
The notice, tucked inside a 141-page Quarterly report Tesla filed with the Securities and Exchange Commission(SEC) Friday, confirms that the SEC has issued subpoenas as part of a deepening probe into the company’s manufacturing projections for its M3 sedan last year. Those numbers were widely regarded as a make-or-break issue for Tesla as it sought to navigate factory chaos, slow its cash burn and prove to investors that it could survive.
The US Justice Department (FBI) has also requested documents as part of a similar investigation, but those investigators have not issued subpoenas or made other formal requests, Tesla said in a statement Friday.
Tesla’s SEC filing said that an enforcement action from either agency could damage its business, cash flow and future prospects.
Tesla and Mr. Musk pushed back strongly against a report last week that the FBI was pursuing a deepening criminal investigation into the company.
In an interview released Friday morning, Mr. Musk called the report “utterly false,” “absurd” and written by journalists who are “terrible people.” Had he not read and approved the company’s 8-Q?
The FBI and the SEC declined to comment on the matter.
The SEC’s subpoenas comes a few weeks after Mr. Musk settled with the Commission on a 2nd investigation into his claims on the ‘420’ Twitter that he would take Tesla private.
The tweet, which Mr. Musk later said was a joke to amuse his goth girlfriend, caused the company stock to fall 14%. The SEC charged in a lawsuit that Mr. Musk had misled investors, and Tesla and Mr. Musk agreed last month to each pay $20-M and have Mr. Musk ousted as Chairman of the Board.
This expanding aggressive SEC probe could set up a new hurdle for a company that last month said it had finally resurfaced into profitability, thanks to rising sales of the M-3.
Tesla said Friday that it expected to incur undisclosed costs related to responding to the subpoenas and potentially defending against any government action.
The company agreed as part of the SEC settlement to closely monitor Mr. Musk’s social-media commentary. But in the days after the settlement, Musk taunted the agency, tweeting, “Just want to that the Shortseller Enrichment Commission is doing incredible work.” And he seems to be still out on the loose.
The probe, led by SEC investigators in San Francisco, touches on questions that have been raised by Tesla investors and former employees into whether the company had truthfully conveyed its progress in producing its futuristic, battery-powered cars.
Unconventional factory methods and failed attempts at automation forced the fledgling niche EV maker to endure months of costly delays and executive departures at its car factory in Fremont, CA, during a time that Mr. Musk has called “production Hell.”
“When we started the Model 3 production ramp, we were transparent about how difficult it would be,” the company said in a statement. “While Tesla gets criticized when it is delayed in reaching a goal, it should not be forgotten that Tesla has achieved many goals that were doubted by most. We are enormously proud of the efforts of the whole company in making it through this difficult ramp and getting us to volume production.”
Mr. Musk put it a different way in his Friday interview: “It is absurd that Tesla is alive. Absurd! Absurd.”
Tesla is no longer an investment grade stock, it is a speculation for professionals, Caution!
|HeffX-LTN Analysis for TSLA:||Overall||Short||Intermediate||Long|
|Bullish (0.29)||Bullish (0.35)||Bullish (0.46)||Neutral (0.06)|