By Brad Tuttle, money.com
The Justice Department has reportedly launched an investigation.
You’ve probably heard of ill-advised message on social media costing someone their job. For Elon Musk, Tesla’s quirky billionaire CEO, one tweet could cost billions of dollars.
Tesla stock fell as much as 7% on Tuesday, after Bloomberg News reported that the Justice Department was launching a criminal probe over a tweet in which Musk said he might take his company private.
Musk’s personal net worth, which fluctuates based on the price of Tesla shares, has taken a pounding as a result. At midday on Tuesday, the tech billionaire’s fortune was estimated at $20 billion, according to Forbes, representing a drop of roughly $500 million since the market opened.
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Musk’s net worth had soared to an all-time high over $25 billion just one month ago, so it has fallen by billions since the controversy erupted.
The tweet in question came in early August, when Musk wrote that he was “considering taking Tesla private,” and that he had “funding secured” for the buyout at $420 per share. Soon after, Tesla stock rose to a record high of $387 per share.
But the stock has since plummeted in the wake of the investigations launched about possible wrongdoing by the company and Musk himself, first by the SEC and now, apparently, by the Justice Department. Musk is facing legal trouble because his “funding secured” tweet could be construed as fraud that potentially misled investors. Tesla itself is also under investigation because statements by its CEO can be considered the official word of the company.
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Musk’s subsequent announcement that he wouldn’t be taking Tesla private after all has also seemed to hurt the stock.
At its low point on Tuesday, Tesla shares were selling at $275 — down nearly 30% from its recent high.
By late afternoon Tuesday, Tesla stock had bounced back slightly, to $283 per share. Elon Musk’s net worth was down $370 million for the day at that point, according to Forbes.