The Securities and Exchange Commission (SEC) has taken civil action against Elon Musk for committing frauds. This action is creating a buzz among Wall Street and other investors as his removal from Tesla might lead to significant negative impacts on the car market.
The SEC has accused Musk of making misleading and false statements regarding Tesla. On the other hand, Musk has denied all allegations put on him by SEC saying that all SEC’s accusations are unjustified and he has never compromised his sincerity towards Tesla.
The stock of Tesla reached to its five-year loss after this decision of SEC came over in the public. Barclays has pointed out that if Musk will be forced to leave Tesla then, it is surely going to affect Tesla’s shares. The Wall Street has also proposed the same statement that it will damage the market demand of Tesla cars.
Johnson and Jonas have restated their targets for Tesla after the controversy to $210 and $291 respectively. The analyst at Morgan Stanley, Adam Jonas remarked that it is a huge risk for Tesla if the state of affairs does not get resolved quickly.
The downfall of Tesla’s stock is resulting due to the concern of analysts regarding the lawsuit filed against the CEO of Tesla, Elon Musk. The SEC wants Musk to stop making false statements and return gains he ended up with.
On the other hand, Musk has denied for making a settlement with the government, which might have permitted him to stay CEO of Tesla after giving a small fine. It is not yet clear whether Musk will leave the company or not but this civil action is making the investors worried for sure.
Tesla’s stock fell 14.5 percent down to $262.88 on Friday that is its biggest loss in almost five years.