Tesla (TSLA) Stock: Tumbles As Musk Is Sued By The SEC

Tesla Motors TSLA Stock SolarCity SCTY Stock NewsTesla Inc (NASDAQ: TSLA) is having an incredibly rough start to the trading session this morning, and for good reason. News is breaking that the CEO of the company, Elon Musk is the center of an SEC fraud suit. Today, we’ll talk about:

  • The news;
  • what we’re seeing from TSLA; and
  • what we’ll be watching with regard to the stock ahead.

TSLA Falls Hard On Elon Musk Suit

As mentioned above, Tesla is having an incredibly rough start to the trading session this morning after news broke that the SEC has filed suit against Elon Musk, the CEO of the electric car maker. The suit is a relatively simple one that seems like an open and shut case.

Recently, Musk told TSLA investors that he would be taking the company private. He even tweeted that he had secured the funding to do so, causing the stock to see tremendous gains. However, here we are and no bring-private transaction has happened. Ultimately, it seems as though Musk hadn’t secured the funding that he told investors he did. As a result, the SEC has filed suit against the troubled electric car CEO for fraud.

This is going to be a real battle for Musk with quite a bit on the line. The suit doesn’t only seek for Mr. Musk to pay back ill-gotten gains and penalties. If the SEC gets what they want, Musk will be banned from serving as an officer or director of TSLA or any other publicly traded company in the United States.

What We’re Seeing From The Stock 

One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of Tesla, the news was overwhelmingly negative. When the SEC calls the CEO of a publicly traded company a fraud, there’s good reason to be concerned, and that’s just what investors are. So, it comes as no surprise that upset investors are sending the stock tumbling down. As is normally the case, our partners at Trade Ideas were the first to alert us to the declines. Currently (8:06), TSLA is trading at $268.64 per share after a loss of $38.88 per share or 12.64% thus far today.

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What We’ll Be Watching For Ahead

Moving forward, the CNA Finance team will continue to keep a close eye on TSLA. In particular, we’re interested in following the story surrounding the SEC’s fraud suit against Musk and how it all pans out. Chances are that at the very least, the company will end up with a new CEO. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!

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1 thought on “Tesla (TSLA) Stock: Tumbles As Musk Is Sued By The SEC”

  1. Harsco ended its merger with Brand Energy. That was smart of Harsco. Now, they should look to recover money from Brand’s ex-CEO and the ex-GE people he brought in with him.

    The CEO of Brand was negligent. He didn’t act in good faith. He brought in his friends from GE and didn’t fire them no matter what. The ex-GE guy in Houston had to be shuffled all over the country because he was despised. He was called President of Business Development. He has the polish-looking last name and was sent to Houston from California in 2011. They had to keep him on the road all the time because he couldn’t get along with anyone. Can you imagine how much that cost the company? The ex-CEO also sent him around to meet with all kinds of companies even though he was extremely obnoxious. Can you imagine how many companies he scared away and how much money was lost due to that? The ex-CEO of Brand should be held liable for this.

    Watch out for ex-GE guys. They play politics and form cliques and are a major problem in corporate America. Clayton, Dubilier, and Rice owns Brand Energy. Brand was ruined by ex-GE guys like the former CEO and the “President of Business Development” in Houston. Were they doing their fiduciary duty? Brand’s investors need to investigate the former executives and their spending immediately. Blackrock and other big names are investors in the bonds of Brand Energy.

    Some executives have moved to a company called Total Safety. That company can be investigated next. It’s owned by Littlejohn LLC, the investment firm.


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