Tesla stock is on pace to book a weekly loss after gaining a combined 22% in the previous two weeks. On Wednesday, another executive announced he had left the EV giant and Reuters reported that U.S. prosecutors were investigating whether Tesla deceived investors regarding Full Self-Driving (FSD) capabilities, potentially committing securities and wire fraud.
Rich Otto, Tesla's head of product launches, announced on LinkedIn Wednesday that he had resigned last week. This comes as Chief Executive Elon Musk appears to be fully in layoff mode.
Musk recently dismissed Rebecca Tinucci, senior director of Tesla's supercharger efforts, and Daniel Ho, head of the new vehicles program. The Tesla CEO also reportedly has cut teams under Tinucci and Ho along with laying off its public policy employees and the entire staff in charge of Tesla superchargers.
Musk decided in April to lay off more than 10% of Tesla's global workforce, an effort to prepare for the "next phase of growth." Drew Baglino, who served as senior vice president of powertrain and energy, and Rohan Patel, vice president of public policy and business development, both departed Tesla around the time of those cuts.
Otto wrote Wednesday on LinkedIn that the "recent layoffs that are rocking the company and its morale" have thrown off the "harmony."
"It's hard to see the long game," he added.
Tesla stock fell 1.7% to 171.97 during market trade on Thursday. TSLA is down more than 5% for the week.
Reuters Reports On DOJ Interest In Tesla
On Wednesday, Reuters reported the U.S. Justice Department (DOJ) was examining claims by Musk and Tesla that could suggest vehicles can completely drive themselves autonomously. Reuters based its report on three people familiar with the matter.
DOJ prosecutors are also looking into whether Tesla committed wire fraud and securities fraud by misleading investors about FSD, according to Reuters.
Tesla Stock Performance
TSLA shares jumped 7.7% last week to 181.19 after soaring 14.4% in the prior week. Tesla stock jumped 15.3% to 194.05 last Monday, making a decisive move above a key resistance level after regulators in China reportedly tentatively approved the introduction of FSD.
Since Tesla reported first-quarter earnings and revenue on April 23, Tesla has gained about 20%. Tesla stock hit a 52-week low of 138.80 on April 22. Shares are still down 30% in 2024 as of May 9.
After rallying following Q1 earnings, Tesla stock advanced past resistance at its 10-week moving average, according to MarketSurge analysis. Tesla struggled to retake this level for much of 2024.
Tesla stock ranks eighth in the 35-member IBD Auto Manufacturers industry group. The stock has a weak 37 Composite Rating out of a best-possible 99. Tesla stock also has an 18 Relative Strength Rating and a 63 EPS Rating.
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