Tesla plunges, wiping out tweet-fueled rally in just two days

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Tesla's share price surged after the tweet, rising by as much as 12%, to over $US381, before trading closed. Most recently, Muskk had the tech and automotive worlds scratching their collective heads after tweeting that he would consider taking Tesla private should the stock reach $420 a share.

Tesla CEO Elon Musk's tweets about taking the company private and having the funding to do it has the SEC's attention.

Directors plan to meet financial advisers next week and are likely to tell chairman Elon Musk to recuse himself while they mull his proposal, CNBC reported Thursday, citing unidentified people familiar with the matter. At the same time, Musk's behavior could easily be framed as illicit stock market manipulation.

Investors also may have been spooked by reports that the SEC is looking into Tesla.

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Tesla said on Wednesday the discussions had addressed how to fund such a deal but gave no details. To take a public traded company the size and net worth of Tesla back to private would usually require a "leveraged buyout" where the company itself or another party takes a large loan to buy out all the shares from the companies shareholders to go private. "Funding secured", Musk tweeted on Tuesday.

Mr Musk laid out how he envisioned taking Tesla private both in tweets and in an email to employees that drew comparisons to Space Exploration Technologies Corporation, where he's also chairman and chief executive. Tesla is and probably always will be a company that will remain underneath the spotlight, so nearly any actions taken by the company itself or Elon Musk as an individual or CEO will have adverse effects on its stock price.

Tesla and the SEC declined comment on Thursday.

Elon Musk, CEO of SpaceX and Tesla, is facing some backlash after calling a British diver involved in the Thai cave rescue a 'pedo'. It is not clear if PIF is interested in financing Musk's proposed take-private deal.

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Some are speculating the recent moves could all be part of a Musk plot to punish the short-sellers.

Though it is not illegal for company officials to use twitter to promote Tesla, talking about potential buyout prices and issuing other proclamations that could artificially alter the California-based EV maker's stock price could be reason for an investigation and ultimately charges. Musk said via Twitter on Tuesday that the deal was contingent on a shareholder vote but that "investor support is confirmed". Musk previously said that the company would hit that number by the end of 2017 and that sustaining such a production rate is critical for Tesla to become profitable.

Musk has been under intense pressure this year to turn his money-losing, debt-laden company into a profitable higher-volume manufacturer, a prospect that has sent Tesla's valuation higher than that of GM.

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