Tesla Inc.’s shares reversed their earlier losses to trade nearly unchanged on Monday afternoon, shrugging off a report that regulators opened an investigation into the electric-vehicle company.
The stock fell as much as 6.4% to $950.50 in morning trading in New York. That was a 23% decline from the record closing high of $1,229.91 touched barely a month ago on Nov. 4. A stock is said to enter a bear market when it falls 20% on a closing basis.
Tesla’s market value also briefly fell below $1 trillion for the first time since it hit that level on Oct. 25. However, the stock pared its decline to trade up 0.1% as of 2:10 p.m.
Reuters reported Monday that the Securities and Exchange Commission opened an investigation into Tesla over whistle-blower claims on solar panel defects, citing a letter from the agency. The New York Times also reported that Tesla engineers questioned the safety of the company’s Autopilot system, which is the subject of an investigation by the National Highway Traffic Safety Administration.
“The solar business has been a disaster for the Tesla story and the Street continues to be frustrated by this business segment,” Wedbush analyst Daniel Ives said, adding that it increases the nervousness among investors at a time when the broader the market is seeing turbulence for high-valuation names.
