Electric vehicle (EV) maker Tesla’s (NASDAQ:TSLA) CEO, Elon Musk, is under fire again, this time for the secret glass house project. The Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) are conducting investigations into the use of company funds to build the CEO’s home, as per the Wall Street Journal. The project, internally called “Project 42,” envisions the construction of a spacious glass structure, including a residential area for the chief, in Austin, Texas.
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A Glass House for Musk
According to SEC regulations, publicly listed companies are required to disclose expenses that exceed $120,000 related to the interests of senior executives. Additionally, any perks that exceed $10,000 and are provided to top executives must be disclosed to shareholders. Project 42 is being investigated by the U.S. Attorney’s Office for the Southern District of New York (SDNY). The scrutiny is in its initial stages and may not have any significant outcomes leading to misuse of company funds. Also, if the allegations are found erroneous, Tesla or Musk might not face any penalties.
The company was also under an internal investigation by company shareholders and lawmakers in July this year for the multi-million-dollar construction. Internal sources claimed that the glass used for the structure was of a special type and cost millions, leading to criticism from both shareholders and the board. The outcome of the internal investigation is unknown, and the actual delivery of the special glass remains uncertain.
Is Tesla a Good Stock to Buy Right Now?
Wall Street has conflicting views about Tesla’s stock trajectory. Yesterday, Guggenheim analyst Ronald Jewsikow lowered his estimates for Tesla. Jewsikow has a Sell rating and a $125 (51.3% downside potential) price target on TSLA.
The analyst believes that Tesla’s inventory levels suggest that supply is currently greater than demand. Jewsikow says that U.S. demand is not catching up with the pace of production and fears that Tesla may have to resort to further price cuts to boost sales.
On the contrary, an unknown Global Equities analyst noted that the demand for Tesla’s CyberTruck is “off the charts” and could stall the demand for legacy pickup trucks. His views are based on a survey of real customers who have ordered and await the delivery of their CyberTrucks. The analyst reiterated a Buy rating on Tesla with a price target of $350 (36.2% upside potential).
Overall, on TipRanks, Tesla stock has a Hold consensus rating. This is based on 12 Buys, 13 Holds, and five Sell ratings. The average Tesla price forecast of $257.75 implies that shares are almost fully valued at current levels. Meanwhile, TSLA stock has gained 137.7% so far this year.
