Investing / Stocks

Tesla Cars Reportedly Hacked by Teenager — Could This News Damage the Stock?

Indianapolis - Circa March 2019: Tesla Service Center.

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It might only be a coincidence, but shares of Tesla were in a fast retreat early Jan. 13 — a day after news surfaced that a teenager in Germany had perhaps found third-party software flaws allowing hackers to control certain functions of some of the company’s electric vehicles. Whether there will be any lasting economic fallout for the company as a result is, as yet, uncertain.

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Nineteen-year-old David Colombo, who calls himself an information technology security specialist, said in a Jan. 11 tweet that the flaws let him unlock doors and windows, start cars without keys, and disable security systems, Bloomberg reported. Colombo also said he can see if drivers are in the cars, turn on sound systems, and flash headlights.

He shared screenshots and other documents with Bloomberg that identified the software maker and gave details of the flaws, though he requested that Bloomberg not publish specifics because the affected organization hasn’t published a fix. Colombo claimed he could access more than 25 Teslas in at least 13 countries. He decided to share his findings on Twitter when he couldn’t contact most of the owners directly.

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Tesla shares sank about 3% early on Jan. 13, badly underperforming the Dow — which rose as much as 0.4% — and the S&P 500, which fell less than 0.2%. As of late morning on Jan. 13, no media outlets or analysts had directly connected the stock performance to the hacker news.

A Jan. 12 blog post on the InvestorPlace website noted that Tesla traded “incredibly well” after hitting a low on Jan. 10. On Jan. 12, the stock broke back over its 10-day, 21-day and 50-day moving averages.

“However, bulls will need to see the stock hold the 50-day moving average for it to remain constructive,” InvestorPlace said. “On the upside, however, a move over the 61.8% retracement opens the door to the December high near $1,172. Above that, and this month’s high is in play near $1,200.”

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As for the alleged hacker vulnerabilities: The problem involves flaws in the way the software stores sensitive information required to link cars to the program, Colombo told Bloomberg. The main risk is that the information could be stolen and used by hackers to send malicious commands to the cars, he claimed.

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“This shouldn’t happen,” Colombo said. “Especially if we’re putting cars on the internet and trying to make them secure. Everyone needs to work together.”

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.