- Tesla is facing a “deepening” criminal investigation into its public statements about Model 3 production, The Wall Street Journal reported Friday.
- The company denied the reports, and now Wall Street is expressing skepticism as well.
- Shares of Tesla gained more than 3% at the opening bell Monday. Follow the stock in real time here.
A report from The Wall Street Journal on Friday that said Tesla was facing a “deepening criminal investigation” over its public statements about Model 3 production has been met with skepticism on Wall Street.
“We think it will be difficult for prosecutors to prove criminal wrongdoing,” Ben Kallo, an analyst at Baird, said in a note to clients as reported by Bloomberg. Kallo, who has a bullish $411 price target for the stock, added that “investigators would need to find evidence TSLA made projections it knew would be impossible to achieve, which we believe is a high bar to meet.”
Kallo also said that the article “largely recycled previously reported information” and that Baird found “certain aspects of the article suspect.”
He wasn’t the only Tesla bull skeptical of The Journal’s reporting, which, citing anonymous sources, said Friday that an FBI investigation was focused on Model 3 communications by Tesla as far back as early 2017. The company said it had received “no additional document requests” from the Department of Justice for “months,” while supporters nearly immediately sought to connect the article with short-sellers, or those investors betting against Tesla’s stock price.
"Good question," CEO Elon Musk added on Twitter in response to a question asking "where is the SEC when the WSJ published old information purely meant to distort the stock and harm investors?"
Another vocal Tesla supporter, Ross Gerber of the Los Angeles firm Gerber Kawasaki, called the article questionable.
"You've got to wonder how much the media is being manipulated by Tesla shorts," he tweeted. "Of course as the stock breaks out they release some BS WSJ article. Mid day. Not questionable at all."
Shares of Tesla fell slightly following The Journal's report Friday but still managed to close in the green. The stock opened up more than 2% Monday morning after the bullish note from Baird.
Musk, who recently informed Tesla of his plans to purchase $20 million of the company's stock in the next available window, seemed to hint in a tweet that the purchase could be made Monday. Shortly after, he said he would be "signing off Twitter for a few days."
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