- Tesla (TSLA) stock experienced a drop on Wednesday, falling below crucial technical support levels.
- This followed a Reuters report suggesting an ongoing investigation by U.S. prosecutors into Tesla’s Full Self-Driving (FSD) capabilities and potential securities and wire fraud.
- The investigation is centered around claims made by Tesla and CEO Elon Musk that their vehicles can operate fully autonomously.
Tesla’s stock takes a hit following a report of a U.S. Justice Department investigation into the EV giant’s Full Self-Driving capabilities and potential securities and wire fraud.
Investigation into Tesla’s Full Self-Driving Claims
According to the exclusive report by Reuters, the U.S. Justice Department (DOJ) is examining claims made by Tesla and its CEO Elon Musk that suggest their vehicles can operate completely autonomously. The investigation is based on information from three individuals familiar with the matter. The DOJ is also investigating whether Tesla committed wire fraud and securities fraud by misleading investors about FSD capabilities. Following the news, Tesla’s stock fell 1.7% to 174.72 in market trade on Wednesday.
Tesla Stock Performance Amidst Investigation
TSLA shares had previously seen a surge of 7.7% last week, reaching 181.19 after a 14.4% increase in the prior week. This was largely due to reports of Chinese regulators tentatively approving the introduction of FSD. However, since the DOJ investigation news, shares have fallen below their 50-day moving average, a key technical support level. Despite the recent drop, TSLA shares have gained about 23% since the company reported its first-quarter earnings and revenue on April 23.
Conclusion
The ongoing DOJ investigation into Tesla’s FSD claims and potential securities and wire fraud has had a noticeable impact on the company’s stock performance. Despite recent gains following positive Q1 earnings and tentative approval of FSD in China, the investigation news has led to a drop in TSLA shares. Investors and market watchers will be closely monitoring the situation as it unfolds.
